annual report and accounts 2011 stv group plc
company registration number sc203873
the digital stv
annual report and accounts 2011
the stv appeal 2012 is here  
visit www stv tv  appeal to see how you can help
in producing this report we have chosen production 
methods which aim to minimise the impact on our 
environment the papers chosen – revive 5050 gloss  
and revive 100 uncoated contain 50 and 100 recycled 
fibre respectively and are certified in accordance with the 
fsc forest stewardship council both the paper mill and 
printer involved in this production are environmentally 
accredited with iso 14001
stv group plc
pacific quay
glasgow g51 1pq
t el 0141 300 3000
wwwstvtv annual report and accounts 2011
directors’ report – business review 
directors’ report
 business review
01 highlights of 2011
02 our business at a glance
04 chairman’s statement
06  building tomorrow’s stv  
– a conversation with rob woodward  
and charles mcghee
10 chief executive’s review 
 – consumer
16 – production
20 corporate social responsibility
27 performance review
30 kpis 20102011
32 kpis 20122015
34 principal risks and uncertainties
 corporate governance
36 board of directors 
38 corporate governance report
48 remuneration committee report
accounts
60  stv group plc consolidated financial statements 
– independent auditors’ report 
62 consolidated income statement
62  consolidated statement  
of comprehensive income
63 consolidated balance sheet
64  consolidated statement of changes in equity
65  consolidated statement of cash flows
66 notes to the financial statements
94  stv group plc company financial statements 
– independent auditors’ report
96 company balance sheet
97 statement of t otal recognised gains and losses
98  notes to the company financial statements
104  five y ear summary
shareholders
105 shareholder information
107 notice of meeting
highlights of 2011
 pre exceptional
ebitda million

£17 4m  
2010 £169m 
3
investment in new local media services
delivering uk’s most comprehensive  
news service
designed and produced by t ayburn 01
	 t o 	 do wnlo ad 	 a 	 pdf 	 o f 	 this	
r epor t 	 visit 	wwwstvplctv
turnover 	  million 
£10 2 0m 	 	
2 010 £1048m 
–3
operating profit 	  million 

£15  0m 	 	
2 010 £144m 
4
pretax profit 	  million 

£14  0m	 	
2 010 £125m 
12
inno v ativ e 	 c on t en t 	 p ar tner ship s 	
with 	 gr o wth
deliv ery 	 o f 	 a 	 dis tinct 	 and 	 r ele v an t	 	
s chedule 	 f or 	 s c o tland
launch 	 o f 	 ne w 	 digit al 	 c onsumer 	 s ervic e s annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 02
our business at a glance
our strategic aims
b y 	 2 015  	 w e 	 will
gr o w 	 nonbr o adc as t 	 e arnings 	 t o 	 r epr e s en t	
3 3  	 o f 	 gr oup 	 e arnings
	 b e 	 the 	 mo s t 	 us ed 	 digit al 	 s ervic e 	 in 	 s c o tland
double 	 s tv 	 pr oductions ’ 	 r e v enue s
launch 	 t w o 	 ne w 	 mark e t le ading 	 digit al	
c onsumer 	 pr opo sitions
our business has successfully evolved 
from its roots as the commercial public 
service broadcaster for scotland to 
become a leading digital innovator 
with a strong commitment to the 
delivery of high quality content 03
stv is focused on
•  building consumer relationships 
•  delivering great content 
•  connecting with communities
stv consumer
delivers unique high quality content to attract mass audiences which  
are sold to advertisers to generate revenues the content is delivered  
across multiple platforms including digital terrestrial cable and satellite 
online and through connected devices such as games consoles 
the business aims to use its unique content to create communities  
of interest and to engage consumers
the key corporate kpis detailed on pages 30 to 33 are used to monitor  
and measure the progress of each division in fulfilling its strategy 
the stv consumer
advertiser
content
advertising
     consumers
content 
stv productions
creates and produces high quality  
content for broadcast networks in  
the uk and overseas
profit is made on initial sale and on the 
exploitation of back end rights in the  
uk secondary and overseas markets
stv business model richard findlay
chairman
“ our commitment to delivering 
high quality public service 
content in innovative ways 
continues to enable us to 
strengthen our relevance and 
connection with audiences” 
	 f or 	 financial 	 updat e s 	 	
on 	 s tv 	 visit 	wwwstvplctv
annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 04
chairman’s statement
the company has delivered a robust financial performance  
in a year that has been dominated by the challenges of the 
macroeconomic environment and the associated impact on 
consumer confidence we continue to implement rigid cost 
control whilst investing in key growth areas to innovate in 
content production and engage with consumers across 
multiplatforms 
our results in 2011 demonstrate the increasingly robust  
position of the company and that actions taken in recent years 
to scale the business appropriately are improving underlying 
profitability despite a slight reduction in turnover  
market leader in scotland 
profit before tax and exceptional items is £140m and earnings 
before exceptional items tax depreciation and amortisation  
is £17 4m national airtime revenues performed in line with 
expectations down 3 at £67 9m the regional airtime revenue 
market was weaker reflecting the impact of the downturn on  
the scottish economy and ended down 13 at £129m we do 
however  continue to be the market leader in the scottish 
market and in 2011 we have consolidated our leading edge 
position through our targeted and strategic investment in the 
key digital initiative stv local as this platform is developed 
with the launch of further sites we are providing opportunities 
for a new portfolio of advertisers and commercial partners to 
reach their target markets in a cost effective way 
at the beginning of 2011 we made carefully considered 
organisational changes which have successfully positioned  
the company as a consumer focused content business and of 
course all our services are now delivered via digital platforms 
broadcast online and mobile these services offer our audiences 
various ways in which to connect with us while at the same time 
delivering solutions for advertisers and commercial partners 
diversifying our content offering 
our content business – stv productions – has continued to 
broaden its activities across genres and extend the customer 
base it supplies during 2011 working with a wider range of 
broadcasters than ever before including a significant pipeline  
of programmes from the bbc the business enters 2012  
with a strong portfolio of commissions across a wide range  
of channels 
in april we announced the cessation of legal actions with  
itv plc and itv network and the establishment of a settlement 
agreement which has served to clarify a number of the 
differences between the parties we continue to work with itv 
under existing networking agreements and in december we 
confirmed the financial details of the agreement reached with 
itv whereby we will pay £108m over 18 months all of which is 
provided for within our banking facilities and will be partly offset 
by opt out programme savings in the future we believe there  05
are better ways of arranging the current network agreements 
and hope that within the improved atmosphere a consensus  
on this will be reached very soon 
our commitment to delivering high quality public service 
content in innovative ways continues to enable us to strengthen 
our relevance and connection with audiences we have made 
significant enhancements to our service during 2011 with the 
introduction of new programmes delivered across our various 
platforms investment in new technology allows us to deliver  
a more relevant news service to audiences across scotland  
we now provide the most locally focused news and current 
affairs tv services in the uk and we are achieving increased 
audience share and engagement in response this important 
development differentiates stv from many of our competitors 
at a time when commercial pressures are causing them to 
significantly reduce their commitments and ambitions in  
this area 
as a leading provider of locally focused services we welcome 
the government’s decision to proceed with the introduction  
of local television services and we are participating in the 
consultation exercise to determine the process through which 
licences will be awarded we believe that such services will  
by their very nature be financially fragile and that the key  
to the success of these licences in scotland will be to ensure 
that they are complementary to the existing comprehensive 
service provided by stv  
digital is in our dna 
our digital and online strategy is now firmly embedded across 
stv and this has transformed from being a new business 
venture to a deep rooted core business activity  we have 
delivered a strong performance against our digital kpis and 
achieved significant year on year revenue growth of 69  
as we continue to leverage our investment in content across  
all platforms i am confident that we will continue to deliver 
further growth and create value across our entire inventory  
our strategy is underpinned by a culture of innovation and  
in 2011 we have launched a number of new services and 
introduced new opportunities to grow transactional revenues 
in addition to our strong public service ethos we are committed 
to being a good corporate citizen and to give something back  
to the communities we serve in 2011 we launched the inaugural 
stv appeal a major charity run in partnership with the hunter 
foundation initially to support children and young people 
affected by poverty in scotland working closely with six major 
scottish charities we raised over £12m – including generous 
financial support from the scottish government  to underpin 
local projects all across scotland we have confirmed our long 
term commitment to the stv appeal and planning is now 
underway for the 2012 appeal which will continue to focus  
on youth poverty in scotland 
during 2012 the secretary of state will begin to consider the 
position of the channel 3 licences which will expire at the end of 
2014 we continue to engage with ofcom and the government 
on this matter and believe that the underlying strength of our 
business the extent of our connection with our audiences the 
significant positive impact the company makes to the creative 
industries sector in scotland and our strong commitment to the 
delivery of high quality public service content at a local regional 
and national level all serve to demonstrate our unrivalled 
credentials to continue to hold the licences for stv central  
and stv north in the long term 
a clear strategy for growth
in our 2011 interim trading update i confirmed our longterm 
strategic vision to be a consumer focused business which will 
generate over onethird of its earnings from non broadcast 
activities by 2015 through the significant progress already 
achieved this year coupled with our track record in delivery  
of our commitments and targets evidenced by achieving or 
exceeding the majority of our kpi targets and a supportive 
board and highly capable leadership team and staff i am 
confident that we will deliver this goal 
with a clear strategy for growth mapped out a strong and 
focused team delivering on our targets an exciting pipeline  
of programmes both from ourselves and others together with 
our strong news performance locally regionally and nationally 
2012 looks to be another busy and exciting year for stv 
all this would not be possible without our dedicated staff  
and management team led by our chief executive officer   
rob woodward my thanks to them and to my board  
colleagues for their achievements over the last year 
richard findlay
chairman annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 06
chief executive’s review
b uilding 	 t omorr o w’ s 	 s tv
a conversation with rob woodward 
and charles mcghee on how 
innovation will deliver performance  
in the changing media landscape
the imposing structure of glasgow university shimmers in  
the winter sun as stv’s chief executive rob woodward takes  
in the spectacular view across the clyde from the company’s 
pacific quay headquarters “y ou soon won’t be able to see  
that” he points out as scotland’s new national arena takes 
shape next to the secc 
the impressive ultramodern addition to glasgow’s skyline  
will eventually eclipse the view of the ancient university but 
nothing is obscuring woodward’s vision for stv as he reflects 
enthusiastically on a year of progress in the face of tough 
trading conditions and against a backdrop of rapid and radical 
change in the media landscape
“we’re definitely very pleased with the performance of the 
company” he says allowing himself a faint smile of approval 
“we’ve increased our underlying operating profit level year  
on year by 4 and underlying earnings per share have 
increased by 11 those are pretty strong indicators in terms  
of the actions that we continue to take as a management  
team of our ability to weather any storm in the external 
advertising market”
weathering storms has been a regular feature of stv’s voyage 
in recent years – and perhaps even inspired the decision to give 
their popular weather presenter  sean batty his own show – but 
few would question that the company has emerged stronger  
leaner and fitter from the experience
for example stv knew it would suffer from the advertising 
downturn in the last quarter of 2011 but flagged it to the market 
early and dealt with it effectively  settling its longrunning legal 
dispute with the itv network last year also sent a strong signal 
that stv was back on track although the company will have to 
shoulder the £18 million settlement costs over the next few 
years it removed a major financial uncertainty and together 
with the new banking deal announced before christmas gives 
woodward and his team the stability they need to execute their 
strategic plans for the future 
“we were delighted to reach the settlement with itv ” said 
woodward “what we are focusing on now is agreeing a 
longerterm working relationship there remains a strong 
opportunity to have a simplified and more commercial 
relationship which would allow us to continue to get sovereign 
access to itv1 programmes in our territory and that’s what 
we’re striving to agree”
will such an agreement mean an end to dropping itv 
blockbusters such as the first series of downton abbey 
woodward insisted however that “blockbusters” tend to be 
defined retrospectively “downton abbey did end up being  
an absolute blockbuster and that’s why we reversed our 
decision but i would argue strongly – based on audience 
feedback and looking at audience numbers – that the balance 
we’re now achieving feels appropriate
“we will still opt out of some itv programming but by and  
large we will take most of itv’s peaktime schedule and from 
time to time insert some of our own programming which is 
what we have been doing consistently over the last three years”
the itv relationship will also be dependent of course on the 
outcome of the new commercial broadcasting licensing round 
ofcom begins consultations this year on the 2014 renewals but 
the stv chief executive remains confident about the renewal  
or extension of stv’s licences as well as a refreshed and 
flourishing future association with itv  the persistent rumours 
that stv together with its northern ireland equivalent utv 
would ultimately be swallowed by the itv behemoth appear 
finally to have receded particularly with the political climate 
increasingly favouring the local incumbents
 “we are confident about our position” says a buoyant 
woodward “we continue to put content at the heart of the 
company we have overdelivered on most if not all of our 
licence obligations and have been consistent in our commitment 
to provide more not less public service in terms of the licence 
renewal process – given our performance and commitments 
– we believe we are in a very strong position and that gives us 
confidence in continuing the ongoing negotiations with itv ”
as if to underline the point he returns to the company’s 
performance figures rattling off targets successfully met in  07
rob woodward
chief executive in 
conversation with 
charles mcghee
“ we continue to put content at the heart  
of the business we have overdelivered  
on licence obligations and have been 
consistent in our commitment to provide 
more public service content” annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 08
quickfire succession “we’ve ended up performing extremely 
well against our set of operational kpis in particular  i’d point 
you towards our digital business we only just missed one digital 
revenue kpi by £200k and we set a pretty stiff target and 
digital margin was only narrowly missed due to investment in stv 
local we’ve increased revenues by 69 and any business which 
grows its revenues to this extent is clearly performing well” 
while accepting the impressive growth may have been from  
a low base woodward insists “we’ve created this business  
from scratch and we are now getting around three million 
unique visitors to our site every month – and that’s continuing  
to grow that’s nearly a 40 uplift in usage year on year   
people are flocking to these services
“the next milestone is to get more people to come for longer   
to explore more to spend more and to increase the overall  
level of engagement”
t o help reach that milestone stv has enlisted the help of 
experian the global information services group and one of  
the world’s leading credit reference agencies the company 
collects detailed information on businesses and individuals 
including lifestyle data and woodward hopes the link with 
experian will help stv acquire a more intimate understanding  
of its customers
“we are moving away from talking about audiences – where  
we basically knew very little – to a world where we talk about 
consumers” he said “in this world a direct relationship between 
the media company and the end consumer is fundamental so 
we are using developments online to enable us to capture data 
and build a relationship literally with the individual 
“i believe this will be very powerful for stv  it will enable us  
to offer advertisers a combination of mass market coverage 
which is clearly what television has been so strong at over  
the years but in conjunction with highlytargeted marketing  
and advertising and it’s that combination which will make  
us distinctive” 
stv’s distinctive digital offering also includes local of course 
and last year stv local – an online community news and 
information service – was rolled out with high expectation 
although that momentum has slowed a little to allow stv  
to reconfigure its service to better meet the differing needs  
of scotland’s larger towns and cities and rural communities  
the commitment remains solid 
“we are 100 committed to stv local” said woodward “it’s 
innovative nobody else is providing a similar level of service 
and in around a month’s time we will launch completely 
revamped sites to cover glasgow and edinburgh as well as 
continuing the rollout across the country the target is to cover 
80 of scotland we believe what we’ve come up with will build 
on our success to date and take stv local to the next level”
other local developments could also be on the horizon the stv 
chief stressed that “local media excites us” and confirmed they 
are watching closely the uk government’s plans for local 
commercial tv although glasgow and edinburgh will be among 
the first 20 uk locations to get licences the stv chief believes 
that until the government publishes its detailed proposals it is 
too early to assess the full business potential 
meanwhile alongside local and digital stv also wants to be 
distinctive in content one of the main pillars of its growth 
strategy for 2012 a strategy which includes a target to deliver 
33 of total earnings from nonbroadcast activities by the end 
of 2015 this includes selling content to other broadcasters 
through stv productions and there’s a slight tinge of regret in 
woodward’s voice as he admits the company would have liked to 
have shown more progress in this area he quickly counters any 
sense of disappointment however  by pointing out stv 
productions has been “transformed” 
“this was a business that was around 80 reliant on deliveries 
to the itv network we’ve now grown a business where we’re 
selling and producing programming for the bbc for itv and  
for channel 4 we also have a joint venture established in the  
us and produced our first programme commission perez hilton 
for itv2 last year  so if i look at the pipeline for content then  
we have a lot to give us cause for strong confidence”
chief executive’s review
b uilding 	 t omorr o w’ s 	 s tv 	 c on tinued
we are moving away from talking 
about audiences to a world  
where we talk about consumers 09
and as if on cue the stv boss suddenly reveals “we will 
shortly be confirming a new twoyear deal with the bbc  
to produce another four series of antiques road t rip”  
but woodward wants to do more much more right across  
the spectrum whether it’s breaking new ground with 
productions like f ast freddie the festive special for itv   
or resurrecting old favourites such as scottish passport 
he is also pleased with the ratings for stv’s new nightly  
news programme scotland t onight which he claims has  
quickly established an audience double that of bbc rival 
newsnight scotland its success is in sharp contrast to the 
shortlived weekly version of the magazine programme  
the hour “it just didn’t produce the audience we were 
expecting” said woodward 
one factor which has prevented stv productions from  
reaching its full potential is stv’s unfulfilled ambition  
to obtain independent producer status says woodward  
“it is costing jobs in scotland and it has an overall negative 
impact on the strength of the scottish creative sector   
it’s something we will continue to campaign for ”
as an independent producer  stv would be eligible to bid for 
more commissions from the bbc at present they are excluded 
from tendering for the 25 of bbc commissions which are 
ringfenced for independents any bbc work stv currently  
bids for therefore has to be won in open competition against  
the independents – and the bbc itself 
“with independent producer status our ability to sell to the  
bbc would be hugely enhanced” adds woodward “and that  
is why we feel so strongly about it”
he also feels strongly that governments – at westminster and 
holyrood – could do much more to support the creative 
industries woodward argues forcefully that only two countries 
in europe – germany and the uk – do not provide any form of 
fiscal incentive for television production companies 
and he points out that even in “free economies such as the 
united states” a considerable amount of support is available 
“my argument is that i believe there is an opportunity for 
scotland to become a strong creative hub that is recognised  
on a world stage i think we have the talent here in scotland  
but unless there is some kind of fiscal incentive my prediction  
is that it is unlikely to happen”
in the absence of such incentives however  stv has been 
pursuing alternative options including successful strategic 
partnerships within scotland’s creative industry sector  these 
have included projects such as scotland’s greatest album  
with the scottish sun and real radio and the stv appeal  
with the hunter foundation other collaborations will almost 
certainly follow 
woodward was delighted at the success of the stv appeal 
which raised £12 million for 48 children’s charity projects in 
scotland and confirmed it will be repeated this year in aid of the 
same cause but he pointed out “it wasn’t just about the money 
it was also about us being able to highlight the simply horrific 
story of child poverty in scotland t o be able to shine a light on 
initiatives which are really making a difference to me was just  
as important as the £12 million”
the appeal topped a period of positive progress and helped  
the company end its year on a high prompting the tonguein
cheek suggestion that there is ‘life after t aggart’ for stv  
to which woodward responded intriguingly “t aggart isn’t 
necessarily dead we continue to look at innovative ways  
of bringing that back”
memo to ds jackie reid “the body’s probably hidden in that 
fancy new building across the clyde check it out”
media consultant charles mcghee is a former editor  
of the herald and evening times newspapers annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 10
chief executive’s review
c onsumer
stv’s growth strategy remains  
clear  with investment in strategic 
partnerships and an ambitious  
digital strategy
from top
stv news
x f actor
in search of bible john
scotland debates
underbelly
downtown abbey 	 w a t c h 	 y o u r 	 f a v o u r i t e 	 s t v	
pr ogr amme s 	 on 	 s tv 	 pla y er	 	
wwwstvtvplayer annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 12
chief executive’s review
c onsumer 	 c on tinued
stv is scotland’s digital media company with an ambitious 
strategy for growth we have transformed stv from a 
traditional broadcaster to a digital media company that engages 
with consumers across multiple platforms offering a compelling 
range of musthave digital services 
the creation of innovative high quality and relevant content 
remains key to our business we are excited by new 
technological developments that allow us to significantly  
extend our reach effectively building consumer relationships 
and connecting with communities we continue to work with 
partners to deliver unique compelling content that can be 
accessed anywhere anytime
following the transformation of stv and the consistent 
achievement of its growth kpis stv set out strategic aims  
to grow nonbroadcast earnings from 11 in 2011 to represent 
33 of group earnings in 2015 this will involve
 
• doubling stv productions’ revenues
• becoming the most used digital service in scotland
• launching two new marketleading consumer propositions
we remain committed to growing a strong successful and 
dynamic stv delivering value for shareholders and cementing 
our position as scotland’s most popular peak time tv station 
and leading commercial website and as the provider of unique 
digital content
consumer
channels
through 2011 stv has continued to extend its reach across 
scotland we delivered a schedule comprising the best network 
material and strong home grown productions alongside our 
dedicated and popular news service our average peak time 
audience share tracked ahead of the itv network in 2011 
demonstrating the success of our programming strategy and 
our position as scotland’s most popular peaktime tv station 
reaching over 42m viewers per month
despite the challenging marketplace and a reduction in  
regional advertising revenues we have exceeded our  
upgraded broadcasting margin target of 15 demonstrating 
the underlying profitability of the business and the positive 
impact of our relentless focus on cost control and  
operational excellence
 
we continue to be the market leader in scotland and we  
have further increased our market share in 2011 this strong 
position is maintained by offering innovative solutions for  
our advertisers earlier this year  we restructured the 
commercial team to ensure maximum client focus and 
satisfaction offering a fully integrated service incorporating 
digital and broadcast opportunities
commitment to public service broadcasting
we are fully committed to our public service broadcasting 
“psb” obligations and as well as delivering these via our  
broadcast window we seek to deliver psb innovatively  
across multiplatforms
in may 2011 we launched a pilot news service for edinburgh  
and the east and confirmed that this would become permanent 
in november 2011 making stv news the most comprehensive 
local news service in the uk with dedicated programmes  
for the east west and north of scotland alongside a bulletin  
for t ayside
in october  we increased our commitment to news and current 
affairs with our nightly programme scotland t onight bringing 
viewers an indepth look at the important news stories of the 
day along with sports politics business art entertainment  
live studio guests and special features the programme also 
engages viewers via social media allowing them to guide the 
editorial content interact and comment on the issues raised
in other programming we have delivered a range of high quality 
relevant and exciting programmes for our audience scotland’s 
greatest album was a truly interactive proposition delivered in 
partnership with real radio and the scottish sun and saw 
viewers voting for their top 12 tracks from scottish artists over 
the past four decades the series reached 12m people and the 
this is an exciting time for stv  
with a number of strategic initiatives 
underway and a true connection  
with our audience across platforms 13
	 f o r 	 t h e 	 l a t e s t 	 n e w s	 	
visit 	stvtvnews
case study stv news
deliv ering 	 a 	 high 	 qualit y 	
c ompr ehensiv e 	 and 	 r ele v an t 	 s ervic e
news content is at the heart of stv provision both on air and online  
in 2011 we improved this service embracing new technology and 
committing to a commercially sustainable approach to delivery of  
news across platforms
stv has a nationwide approach to news provision offering the  
most comprehensive and local service in the uk we extended our total 
onair news offering in 2011 and stv now provides three distinct dedicated 
and relevant 30 minute programmes at 6pm  one for the east west and 
north of the country and a separate bulletin for t ayside
stv is responding to audience demand with investment in stv local 
allowing us to engage with communities across the country  
at a hyper local level
impact 
• 	 	 ne w s 	 shar e 	 at 	 6pm 	increased 7 	
• 	 	 on air 	 ne w s 	 s ervic e 	 r e ache s 	over  
17m viewers 	 per 	 w eek
• 	 	 ov er 	half a million unique users	 	
visit 	 s t v  t v  ne w s 	 per 	 mon th	
• 	 	 ov er 	50 	 o f 	 t r a f fi c 	 t o 	 s t v 	 n e w s	 	
is 	 fr om 	 mobile 	 de vic e s
	  	 y o y 	  june 	 t o 	 dec ember  annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 14
collaborative venture attracted 125000 online votes and  
23000 new registrations to stvtv
oneoff documentary in search of bible john revealed a  
unique new development in the theory linking bible john to 
peter t obin and delivered a strong 19 average audience share 
outperforming the network by 8 share points born fighting  
was a twopart series following american senator jim webb 
charting the story of the scotsirish who helped build one of the 
most powerful nations in the world this unique collaboration 
between stv  utv and the smithsonian channel in the us is a 
clear example of stv’s commitment to providing high quality 
and relevant public service broadcasting to its audience
we delivered a second series of our successful football y ears 
series which achieved an average 14 share with 10000  
views via catchup on the stv player  in addition we produced  
a twopart football y ears walter smith special which delivered  
an impressive 20 audience share additional related content 
including stv player  online and mobile material increased the 
total audience for the programme by 15
at the start of the year  we announced the arrival of our stv1 
service allowing viewers to catch up on a range of programmes 
from stv one hour later via two regional variations  one for  
the north and one for central scotland
connecting with audiences
in february 2011 stv launched scotpulse an online market 
research panel designed to provide direct access to valuable 
consumer insights over 5500 panel members have been 
recruited this is supported by a dedicated website –  
wwwscotpulsecom – that encourages community and helps  
to deliver higher engagement levels stv has built a strong 
connection with audiences over the last five decades scotpulse 
allows a further enhancement of this relationship by providing 
consumers with the opportunity to have their voice directly 
heard on issues that matter 
we continue the rollout of our strategic digital initiative  
stv local which allows us to leverage our investment in 
content across multi platforms this network of hyperlocal 
websites online and on mobile currently covers 45 of the 
scottish population by local authority area and presents a 
platform for highly targeted local advertising allowing us to 
generate revenue from a new advertising community with sites 
from motherwell to peterhead edinburgh to glasgow there are 
now over 20 sites covered across seven local authorities the 
launch of stv local has created a significant number of 
employment opportunities across scotland with the current 
editorial team standing at 25
in 2011 stv  in partnership with the hunter foundation 
launched the stv appeal – a major new charitable venture for 
scotland with support from some of scotland’s leading scottish 
businesses and a commitment to matchfunding from the 
scottish government the charity in its inaugural year raised 
over £12m for children affected by poverty in scotland with a 
range of bespoke programming and activities we successfully 
connected with communities across scotland to raise funds for 
an excellent cause and we have high hopes for the 2012 appeal
stv creative is our inhouse commercial production team it has 
delivered continued growth producing awardwinning creative 
content for both scottish based and network advertising clients 
including commercials and sponsorship bumpers as part of a full 
offering from creative design to production of the end product 
the team received two commendations and three awards at the 
2011 scottish creative awards and a dadi award in late 2011
digit al
digital is in our dna and our investment in new digital services 
is delivering growth for the business 
through 2011 we have been consistently building traffic and 
revenue with 36 growth in unique users year on year and 
69 growth in digital revenue in line with our targets
chief executive’s review
c onsumer 	 c on tinued 15
we have exceeded three of our kpis in this area and only 
narrowly missed our revenue target the margins target  
was missed due to our investment in stv local which  
is demonstrating growth as it rolls out across scotland
our tvondemand service stv player  allows viewers to catch 
up on their favourite stv programmes and watch highlights 
from our vast archives stv player continues to build traffic 
delivering an average of over 29m streams per month in the 
final quarter of 2011
stv across multiplatforms
following the success of the stv news iphone app stv 
launched its first android app in august 2011 providing news 
sport entertainment and weather  by the end of 2011 the stv 
news app accounted for over 50 of all news traffic this was 
closely followed by the launch of the stv player on android 
devices making this popular service now available via computer  
smart phones and ps3
stv recognises that opportunistic brand extensions of our  
core businesses are key to driving revenues in january 2011 
steven walker joined the business as director of corporate 
development with the primary responsibility of growing stv’s 
classified businesses and has been central to a number of 
initiatives focused on generating additional revenue
stv live casino launched in the summer with technical partner  
vuet ec offering users a live realtime casino experience via 
their computers during the year we launched scottishpassport
com in partnership with scotland’s leading travel firm barrhead 
t ravel in august we trialled an exciting new digital venture 
offering locally targeted deals via email called stv daily deals 
this service is being honed at present and will offer a potential 
new customer base for advertisers and exciting new offering  
for consumers
gaining consumer insight 
in august we retained experian as our data partner to help 
build our customer database capability and evolve and deepen 
our relationship with our audience as consumers of stv 
services which is key to our growth strategy this is reflected  
in the addition of a new kpi focused on registrations to  
stv’s digital services which targets over half of the scottish 
population being registered by 2015 annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 16
chief executive’s review
pr oduction
creating compelling content and 
diversifying the range of genres  
we produce is key to the growth  
of stv productions
antiques road trip 
pr oduc ed 	 f or 	 bb c
born fighting 
pr oduc ed 	 f or 	 s tv  	 utv 	 and 	 smiths onian 	 channel 17
scotland’s greatest album
pr oduc ed 	 f or 	 s tv
fast freddie the widow and me 
pr oduc ed 	 f or 	 itv1
vet school
pr oduc ed 	 f or 	 s tv
perez hilton super fan 
pr oduc ed 	 f or 	 itv2 annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 18
in august we announced a programming and content partnership 
with groupm entertainment part of groupm – the world’s leading 
media management investment group with our first project  
being the successful perez hilton series we aim to deepen our 
relationship with this leading group during 2012
five episodes of daytime factual entertainment show quiz 
t rippers were delivered to channel 4 in july achieving a 
healthy 10 audience share
we continue to seek the necessary legislative change to provide 
stv productions with independent status
conclusion
stv has an ambitious plan for growth and our strategy remains 
clear going forward with investment in strategic partnerships 
helping extend the stv brand in our core scottish market  
and beyond 
we are committed to innovative public service broadcasting  
and the production of creative content across all platforms 
alongside our ambitious digital strategy and to delivering 
shareholder value 
this is an exciting time for stv with a number of strategic 
initiatives underway and a true connection with our audience 
we are confident in our position as scotland’s leading digital 
media company
rob woodward
chief executive officer
stv productions
creating compelling content is at the very heart of our business 
and the productions team is committed to achieving its strategic 
aim of doubling stv productions’ revenues by 2015 t o achieve 
this we will continue to successfully diversify the range of 
genres we currently produce and extend our customer base 
securing commissions in uk and us markets this strategy 
places us in a strong position as we enter 2012 with a good 
pipeline for commissions and growth 
2011 saw stv productions produce programmes for channel 4 
itv1 itv2 and bbc2 and saw the further development of our 
ambitions to expand internationally 
the impact of the economic downturn on the programming 
budgets of broadcasters has resulted in our productions  
kpis being missed in 2011
our daytime series antiques road t rip continues to be a  
ratings success for bbc2 and we have recently announced  
a twoyear deal for a further four series which clearly 
exemplifies the success of this production and is valuable 
returning business for stv  secondary sales have also been 
successful with the series now airing on discovery
our drama department continues to develop productions for 
various broadcasters a key commission for 2011 was 90minute 
film f ast freddie the widow and me for itv1 which aired on  
27 december and attracted a consolidated audience of over  
5 million 
our strategic partnership with kinetic content in the us saw  
us working together with the labased production company  
to develop a format perez hilton super f an this became  
a fourpart series commissioned by itv2 and coproduced  
by groupm entertainment and featured international stars  
lady gaga kelly rowland katy perry and enrique iglesias  
we also developed a pilot entitled the kids aren’t alright  
with kinetic for a us broadcaster 
chief executive’s review
pr oduction 	 c on tinued 19
201011 revenue
75 of revenue from a  
range of broadcasters
200910 revenue
itv 79
other 21
 
201011 revenue
itv 25
other 75
case study stv productions
div er sif ying 	 the 	 r ange 	 o f 	 c on t en t	 	
and 	 mark e t 	 w e 	 supply
our content business is transforming as we continue to diversify  
our revenues away from our historic dependence on itv to becoming  
a more balanced provider of programming to uk and international 
broadcasters firmly establishing stv productions as a substantial 
content producer  
working in partnership has also been key to growth in this area and  
2011 has seen us working with groupm entertainment and us based 
kinetic content on projects including perez hilton super f an for itv2
impact 
•	 	 commissions secured 	 f o r 	 b b c 2  	 i t v 1 	 	
i t v 2 	 c h a n n e l 	 4  	 s k y 	 r e a l 	 l i v e s 	 a n d	 	
c r i m e 	  	 i n v e s t i g a t i o n 	 n e t w o r k	
•	 	 s uc c e s s ful 	returning business 	 f r o m 	 t h e	 	
bbc 	 w i t h 	 a n t i q u e s 	 r o a d 	 t r i p 	  e i g h t 	 s e r i e s	
c o m m i s s i o n s 	 f o r 	 d a y t i m e 	
•	 	 first production 	 f or 	itv2 	 d e l i v e r e d	 	
in 	 2 011 	 via 	 p ar tner ship 	 de als
200910 revenue
itv 79
other 21
 
201011 revenue
itv 25
other 75 annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 20
corporate social responsibility
we recognise the need to  
give something back and make  
a positive difference in the 
communities we serve
as scotland’s digital media company we take our responsibility 
all our stakeholders seriously 
our consumers
our stv anywhere strategy delivers ‘musthave’ content 
wherever and whenever consumers want it – including 
broadcast the ‘catchup’ service stv player  stvtv stvlocalcom 
ps3 mobile apps and social media platforms this extended 
reach allows stv to develop more engaged relationships with 
consumers and gain a better understanding of their needs
we place great emphasis on audience engagement and 
encourage feedback on our onair and online content for this 
purpose stv’s dedicated viewer enquiries team can be 
contacted via both phone and email and the website features  
a dedicated online comments section wwwstvtv is publicised 
regularly using onair announcements ensuring that our 
audiences know how to access online content where they  
can provide feedback to us easily and readily  
stv has very strong social media presence and engages with 
the public via sites such as t witter and f acebook on a daily basis 
across a range of topics we see a high level of interaction 
particularly via our presenter and programmingfocused 
account and regard this as a valuable source of public input 
our online market research panel scotpulse is designed to 
provide direct access to valuable consumer insights
stv has built a strong connection with audiences over the last  
five decades and scotpulse allows a further enhancement of 
this relationship providing consumers with the opportunity to 
have their voice directly heard on issues that matter 
scotpulse surveys to date include research into programming 
formats which directly influenced the design of scotland 
t onight our new flagship current affairs programme
stv has a robust compliance process and dedicated 
announcers ensuring that all of our programming is clearly 
signposted and that the content is clear  enabling audiences  
to make informed decisions about which programmes they 
choose to watch in 2011 stv launched an online compliance 
training system to ensure staff comply with media laws and 
regulations and build their knowledge in these areas 
digital switchover dso completed in 2011 and we are confident 
that via our onscreen promotions and continued engagement 
with digital uk we provided profile and helped drive 
understanding and facilitation of dso across scotland 
our advertisers
stv’s commercial team offers innovative packages for  
clients including sponsored programmes generating 
commercial opportunities for the business whilst offering 
exposure to lesser known minority groups or topics on  
a national television platform
in march 2011 we ran an inspirational series of one minute 
programmes on behalf of quarriers a scottish charity dedicated 
to helping children families and adults overcome adversity  
the series titled a better life was made up of interview style 
programmes with prominent scottish figures including michelle 
mone obe gary lewis and graeme obree documenting their 
experiences through troubled periods in their lives and the ways 
in which they survived these and through hard work went on to 
realise their ambitions 
 
additionally during november 2011 we built on our previous 
annual campaigns marking remembrance day with a new and 
emotive series of one minute programmes titled and on we 
fight sponsored by the scottish sun interviewing veterans  
who have faced injury and emotional hardship the programmes 
showcase the inspirational attitude of the individuals and their 
determination in overcoming any challenges they have faced 
since returning home in order to lead a happy and fulfilled life  21
our community
2011 saw stv join forces with the hunter foundation to launch  
a brand new charity stv appeal 2011 through a dedicated 
campaign engaging with corporate scotland the scottish 
government and stv viewers over £12m was raised for 
children and young people affected by poverty in scotland 
working closely with six major scottish charities who are 
recognised as well established experts in the area of child 
poverty aberlour action for children barnardo’s scotland 
children 1st save the children scotland and one parent 
families scotland the stv appeal seeks to create longterm 
sustainable change in the lives of scotland’s most at risk 
children and young people
we developed a raft of programming to support this initiative 
this original programming included a big launch with lorraine 
kelly a 7 30 for 8 celebrity special hard hitting documentary one 
in four and two live shows on the evening of the grand finale 
where the final total was unveiled the programming featured  
a range of scottish celebrities committed to the stv appeal  
it engaged with local people who fundraised on its behalf and 
told some of the difficult stories of those affected by poverty 
throughout 2011 we continued the rollout of stv local  
our network of hyperlocal news and information websites  
for communities across scotland over 20 sites including 
metropolitan areas such as glasgow edinburgh and aberdeen 
and more rural locations such as elgin lossiemouth and buckie 
have been launched 
placing journalists at the very heart of communities stv local 
works closely with individuals groups and organisations in the 
towns in which they serve listening to the concerns and needs 
of groups stv local community editors host regular social 
media workshops regular events teaching people how to get 
the most from not only the stv local sites but social media sites 
such as t witter and f acebook regional editors facilitate work 
experience programmes for students studying at colleges and 
universities in their area 
the importance of stv local as a community hub is reflected  
in its format and editorial style the sites offer a blend of 
traditional journalism and user generated content this helps 
reinforce a sense of community ownership and allows people  
to see the difference that they can make stv local also offers 
charities and organisations their own dedicated page on the 
sites giving these groups a way to effectively communicate  
with their hometown audience 
in may 2011 stv worked with pupils from high schools in 
ullapool gairloch plockton and portree as part of the nesta ’s 
idiscover educational programme the programme aims to help 
today’s young people develop the skills and talents needed to 
face the uncertain and challenging world of tomorrow and 
explore ways to increase the innovative capacity of young 
people four members of the stv north news team delivered  
an stv session in each school putting the pupils in charge of 
news helping to drive understanding and taking stv out into 
the community
stv has strong links within the communities across scotland 
and we regularly welcome members of the local community and 
students into our studios for informative tours our weather 
presenter  sean batty provides educational presentations for 
school pupils on weather  meteorology and weather presenting 
the feedback on these experiences is very positive and the 
continued high level of interest from schools suggests this is  
a successful and fun method of learning
we have also undertaken a strong programme of engagement 
with elected representatives at holyrood and westminster  
providing an important opportunity for feedback and dialogue 
with msps and mps
in support of its public service broadcasting status stv  
plays a prominent role engaging at all levels with a variety  
of stakeholders we support organisations such as bafta 
scotland rts cbi scdi and scottish chambers of commerce  annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 22
corporate social responsibility c on tinued
our people
as a creative and consumer focused business the contribution 
of our people is a key driver and differentiator of our performance 
and underpins the relationships we hold with our audiences  
and customers 
the commitment and capability of our people have been 
significant factors in the performance we have delivered in  
2011 as we have continued to connect with a wider audience  
and increased the profile of our brand across multiple platforms
in early 2011 we announced a strategic reorganisation of the 
business to establish two distinct operating businesses 
consumer and productions within the consumer business  
we have established stv channels incorporating all of our 
channels and platforms through which we connect with 
audiences and enabling us to leverage our investment in  
content across all platforms 
during 2011 we have successfully attracted new talent to our 
commercial team to support the growth in our digital business 
and as we have extended the reach of stv local our 
commercial team now has the skills and experience to sell 
across all platforms and to maintain our unrivalled market 
position in scotland 
engagement
the transformation of the business from a traditional 
broadcaster to a multiplatform consumer focused content 
business requires all staff to have a clear vision of our strategic 
aims key performance indicators and goals and an understanding 
of the contribution they can make in delivery of these
we maintain an open culture underpinned by the philosophy 
that everyone can make a difference and should strive for 
continuous improvement to achieve operational excellence  
we continue to conduct regular staff briefing sessions with  
the chief executive officer to provide updates on business 
performance strategy and developments affecting the business 
and to obtain feedback and suggestions on the development 
and growth of the business
we have established a senior leadership management  
forum comprising the staff responsible for key growth  
and revenue targets which meets on a monthly basis to 
encourage collaborative working and build up knowledge  
of future trends impacting our sector 
our relationship with trade unions is based on a partnership 
approach and we enjoy open dialogue and regular consultation 
which has been important in supporting delivery of organisational 
change particularly in the news and current affairs teams 
during 2011
all staff joining stv undertake a comprehensive induction 
process tailored to the requirements of their role and business 
area this includes establishing performance and development 
goals for all staff which are aligned to the kpis and goals of the 
business
in 2012 we will undertake a further employee opinion survey to 
obtain direct feedback from staff across the business on a wide 
range of areas impacting on their employment experience this 
will highlight areas for future focus to continue to improve our 
culture and working environment and create an environment 
where everyone has the opportunity to fulfil their full potential
 
learning and development
ensuring our staff have the capability skills and confidence to 
deliver the transformation of the business is achieved through 
our employee development framework stv learning this is 
linked to the development goal setting undertaken through  
our employee performance and development process 
through stv learning we provide development opportunities 
and learning sessions linked to key business priorities and future 
skills requirements 
as we have continued to extend our relationship with napier 
university we have embarked on a mentoring programme with 
the ba hons in t elevision production – providing experience  
in coaching for managers across the business and giving an 
invaluable business and commercial insight for undergraduate 
students this 12month programme has successfully fostered 
we maintain an open culture 
underpinned by the philosophy that 
everyone can make a difference 23
	 v isit 	stv tv  appeal 	 t o 	 fi n d	
o u t 	 h o w 	 y o u 	 c a n 	 g e t 	 i n v o l v e d	
in 	 the 	 s tv 	 appe al 	 2 012
case study stv appeal 2011
helping 	 t o 	 t ackle 	 child 	 po v er t y 	 in 	 s c o tland
a staggering one in four children in scotland are affected by  
poverty – we want to help change this in 2011 stv  in partnership  
with the hunter f oundation launched the stv appeal – a major  
new charitable venture for scotland working with six major scottish 
charities who are recognised as well established experts in the area  
of child poverty and with the support from some of scotland’s leading 
businesses and a commitment to matchfunding from the scottish 
government the charity in its inaugural year raised over £12m  
with a range of bespoke programming and fundraising activities  
the appeal successfully connected with communities across scotland  
and will support 48 projects across all 32 local authorities 
impact 
•	 	 s tv 	 appe al 	 2 011 	raised over £12m
•	 1 7m 	 people 	engaged 	 w i t h 	 t h e 	 a p p e a l 	 p r o g r a m m i n g	
•	 	 t he 	 appe al 	 has 	 funded 	48 projects 	 a c r o s s	 	
s c o tland 	 dir ectly 	 helping 	1800 children	
•	 	 helping 	 e v ery 	local authority 	 ar e a 	 acr o s s 	 s c o tland annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 24
corporate social responsibility c on tinued
long term relationships which will provide the participants with  
a professional mentor as they enter the employment market 
and begin their early careers in the industry  this initiative will 
be extended in 2012
our commitment to public service broadcasting has created 
opportunities for our leading news and current affairs team  
to develop new skills to ensure that we embrace technological 
developments and maintain our position at the forefront of the 
industry during 2011 we piloted a training programme to equip 
editorial and production staff with the skills to become video 
journalists to increase our newsgathering capacity and support 
the increasing demand for locally focused news content the 
success of the pilot has resulted in a wider training programme 
being implemented across our news teams with more staff 
scheduled to acquire these skills over the forthcoming year 
t alent and capability
we continue to provide opportunities for freelance production 
staff and talent in scotland with over 500 freelance staff 
engaged during 2011 demonstrating stv’s significant 
contribution to the creative industries in scotland
we have continued to develop strong links with educational 
institutions across scotland during 2011 we have provided  
over 75 work placements ranging from assignments of one 
week duration for pupils in secondary education and further  
and higher education to funded internships and work 
placements of up to twelve months duration
in late 2011 we were pleased to confirm our support for an 
ambitious y oung apprenticeship programme organised  
by bbc scotland and providing 10 young people with a full 
apprenticeship in advance of the commonwealth games in 
glasgow in 2014 stv will provide work placements providing  
an opportunity to work within a commercial broadcaster 
we are committed to supporting the development of the  
talent of the future in the creative industries in scotland during 
2011 along with channel 4 and bbc scotland we entered into 
partnership with creative scotland agreeing a programme of 
work which focuses on increasing investment in and promoting 
scottish talent and bringing homegrown culture into every 
home in scotland 
reward and recognition
we continue to benchmark all areas of reward and benefits 
through our participation in a crossindustry group of uk media 
companies to ensure that our benefits structure is effective in 
attracting the best talent our reward strategy in recent years 
has reflected the restraint applied across the sector  however  
we recognise the importance of rewarding the continued 
commitment and results delivered by our staff and we have 
relaxed this approach to ensure that we maintain parity with  
the wider market in this area
equal opportunities and diversity
we remain committed to a culture where everyone is treated 
with dignity and respect and the opportunity to deliver their  
full potential we monitor our performance against our policies 
to ensure that we are engaging effectively with our audiences  
and attracting a diverse pool of creative talent 
during 2011 we conducted an extensive training programme for 
line managers aimed at maintaining awareness of best practice 
and ensuring compliance in this area
during 2011 no employees became disabled during their 
employment
we were reaccredited with the “disability t wo ticks” symbol 
recognising our commitment to the employment retention 
training and career development of disabled employees
 
we have continued to support the government’s “get ready  
for work” programme and we have provided mentored training 
programmes for young people not in education training  
or training 25
health  safety
stv is committed to compliance with all workplace health  
and safety laws and regulations we continue to strive to  
provide a safe and healthy working environment we monitor 
employee health and accidents closely and we have proactively 
undertaken health promotion programmes designed to reduce 
health risk and enhance employee wellbeing we continue  
our proactive approach to improve the company’s management 
documentation systems to provide suitable and sufficient 
information instruction training and supervision 
stv continues to provide health and safety training where 
needs are identified and 13 of our production t eam completed 
the bbc production safety passport during 2011
stv has a proactive and responsible attitude towards 
occupational road risk management with clear procedures  
in place that are reviewed regularly so that they remain 
appropriate and to a high standard our clear driving standards 
and rules are communicated to staff through stv’s drivers 
manual and this helps maintain our low accident rates
during 2011 stv commenced a programme of defensive  
driver training with an external training provider  as part of  
this training the standard of driving of all employees who drive 
on a regular basis is being assessed the programme is 50 
complete and the remaining 50 will complete the training 
during 2012
2011 2010 2009
t otal accidents 28 26 18
number attributable to driver error 18 14 11
percentage attributable to driver error 64 54 61
health and safety performance in 2011
stv report workrelated accidents diseases and dangerous 
occurrences in compliance with the reporting of injuries 
diseases and dangerous occurrences regulation 1995 
“riddor” analysis of the causes of accidents provides 
valuable information for implementing improvements  
if and when required in working practices and procedures 
the f acilities manager is the designated senior manager 
responsible for health and safety matters 
riddor threeday reportable accidents
2011 2010 2009
riddor threeday reportable accidents – 1 –
t otal of all accidents 4 11 11
our environment
stv recognises that its daytoday activities can and do have 
an effect on the environment we have an environmental policy 
in place and reducing our impacts on the environment is part  
of our culture and the way we do business we are committed  
to continuously improving our environmental performance  
and to reducing pollution
stv was awarded the ‘bronze’ award from the national 
recycling stars environment media group for the second  
year running for our efforts in recycling 
as the scottish government has launched its zero waste plan 
– aiming to increase scotland’s recycling to 70 by 2025 – our 
business needs to improve yearonyear to help achieve this 
goal and increase our recycling figures  annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 26
corporate social responsibility c on tinued
on average we have recycled approximately 97 of our  
waste during 2011
during 2011 we continued to raise staff awareness and 
encourage participation in our recycling schemes shanks  
waste visited stv to talk to staff about recycling and what  
we can do to make a difference
in 2011 we increased the number of recycle bins and removed  
all desk bins around our offices to encourage staff to recycle 
more which has proved very effective as reflected in the 
increased percentage of recycled waste  an increase of 35 
from 2010 
stv has a green travel plan at our glasgow headquarters to 
encourage staff to use more sustainable means of transport to 
commute t o promote cycling we provide shower facilities cycle 
parking and lockers for employee use we also manage a car 
sharing initiative where we match up employees living in the 
same area enabling them to travel to work together  there  
are currently 38 members of staff taking part in this initiative  
stv also took part in the walk at work initiative
stv is a member of the prince’s may day network this was 
founded by hrh the prince of wales and is a collaboration  
of businesses addressing climate change
we actively monitor our emissions and always seek to reduce 
these in 2011 our transport co 2 emissions have increased by 
14 from the previous year and our energy co 2 emissions 
increased slightly by 9 our travel agent provides us with  
the company’s co 2 emissions for all air and rail travel  
our co 2 emissions have decreased from 236 tonnes in 2010  
to 187 tonnes in 2011 – a decrease of 20 yearonyear  
charitable donations
during 2011 the company made charitable donations of 
£92834 2010 £6000
the company’s policy is not to make donations which are  
of a political nature
rob woodward
chief executive officer 27
performance review
strong digital revenue growth 
combined with strict cost control  
has driven profit growth in 2011
a difficult macro economic backdrop has led to a decline in 
airtime revenues but despite this underlying profit before tax 
and exceptional items has increased by 12 to £140m 2010 
£125m these themes were also reflected in our kpis with  
five exceeded one met and five not achieved 
2011 also saw the end of the protracted litigation against itv plc 
and itv network which has removed a key uncertainty over the 
business but which has impacted cash and profit in the year   
a renewal of our £700m bank facility which was due to expire  
on 31 december 2012 was completed shortly after year end  
and this provides funding certainty for the next three years  
with the potential for further extension at the end of 2014
a new streamlined divisional structure was introduced at  
the beginning of 2011 bringing the broadcasting and ventures 
divisions together under the consumer division with content 
renamed productions all comparative figures have been 
restated where necessary to reflect the new structure
revenue
t otal revenue amounted to £1020m 2010 £1117m with 2010 
including £69m of pearl  dean revenues to the date of its 
disposal excluding pearl  dean continuing business revenues 
were down 3 due to lower airtime and productions revenues 
only being partially offset by growth in digital
consumer revenues at £936m 2010 £950m were impacted 
by a 3 fall in national and 13 fall in regional revenues these 
were partially offset by 69 growth in digital revenues to £7 1m 
2010 £42m as our online audience continued to grow and be 
successfully monetised
productions revenue fell by 14 to £84m 2010 £98m as  
the impact of t aggart not being delivered could not be offset  
by higher production hours for a wider customer base
operating profit
operating profit before exceptional items increased by  
£06m 4 to £150m in the consumer division operating 
profit amounted to £145m 2010 £134m as strict cost control 
ensured the lower revenues did not flow through to profit 
this included managing a planned increase in losses in our stv 
local operations to £09m 2010 £04m as these services were 
rolled out more widely across scotland as a result of this tight 
cost management margins improved in the consumer division  
to 155 2010 141
productions profit amounted to £05m and margins were  
below target at 60 2010 102 due to lower revenues
finance costs
net finance expenses before exceptional items decreased by 
£09m to £10m 2010 £19m which was mainly due to a higher 
ias19 non cash pension credit of £13m 2010 £04m
exceptional items
exceptional items resulted in a net charge of £134m  
2010 £7 2m the accounting charge for the settlement of  
the litigation with itv network and itv plc including legal  
costs amounted to £135m and there was a £14m cost of 
change provision to provide for redundancy costs in the 
consumer division from headcount reductions mainly in  
the news operations
on 27th april 2011 stv agreed a wide ranging settlement  
with itv plc and itv network over various longstanding legal 
disputes under the terms of the settlement stv will pay itv 
£180m of which £7 2m was paid in cash in 2011 the remaining 
£108m will be paid in cash from existing bank facilities in  
18 equal instalments from january 2012 to june 2013
statutory result
the statutory result for the year after tax and exceptional items 
amounted to a profit of £06m 2010 £53m
earnings per share
eps before exceptional items increased by 11 to 380p 2010 
343p reflecting the increase in profit before tax with a partial 
offset from the higher number of shares in issue in 2011 eps  
on a statutory basis including exceptional items amounted  
to 15p per share 2010 139p annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 28
performance review c on tinued
balance sheet
the principal balance sheet movements over the last  
12 months were a reduction in inventories and an increase  
in the pension defecit
the pension deficit on an ias19 basis net of deferred tax 
increased to £230m 2010 £162m due to a lower discount rate 
as gilt yields fell this more than offset the £50m benefit from 
reduced liabilities following the conclusion of the mortality 
assumption project in the caledonian pension scheme the next 
triennial valuation of the group’s two defined benefit schemes 
will take place as at 1 january 2012 with the results and new 
deficit funding pattern likely to be finalised in q1 2013
cash flow
net debt amounted to £545m at the year end 2010 £522m 
with the increase due mainly to the litigation settlement and 
related legal costs the core operating businesses continued  
to generate strong cash flows with 108 of operating profit 
converted to free cash flow 2010 138 again above the target 
of 100 we expect some phasing reversals of this position in 
2012 but remain confident that on a three year average basis  
we will meet our 100 conversion target capital expenditure 
amounted to £16m 2010 £08m with investment in both  
our online infrastructure and news operations our strategy  
of partnerships ensures that we require only modest levels  
of capital expenditure to achieve our growth targets
dividends
the board has announced its intention to resume dividend 
payments with a planned progressive dividend policy  after 
consultation with our major shareholders and given constraints  
in the new bank facility we will keep this under review and 
update at our interim results
principal activities
the principal activities of the group are in the production  
and broadcasting of television programmes internet services 
and the sale of advertising airtime and space in these media 
the group continues to focus upon its television and digital 
media business
shares and other interests
as at 22 february 2012 the company had been notified of  
the following interests of 3 or more in its ordinary shares
t otal shares 
ubs global asset mgt 5526691 1415
henderson global 5294874 1356
blackrock 3852085 986
odey asset mgt 3389070 868
itv granada media 2650961 679
fidelity investments 2247451 576
employee benefit t rust 2195450 562
threadneedle investments 1800582 461
investec asset mgt 1800000 461
murray international holdings 1465383 375
suppliers – creditor payment policy
the company’s policy is to settle the terms of payment with 
suppliers when agreeing terms of payment by inclusion of the 
relevant terms in contracts and to pay in accordance with its 
contractual and other legal obligations t rade creditors of the 
company at 31 december 2011 were equivalent to 54 days of 
purchases 2010 46 days
compliance
part of the information that fulfils the companies act requirements 
of the directors’ report can be found in the operating and 
financial review on pages 2 to 33 the group’s principal operating 
subsidiaries are listed in note 2 to the company’s financial 
statements and details of the principal risks and uncertainties 
facing the company can be found on pages 34 and 35
auditors and disclosure of information 
so far as the directors are aware there is no relevant audit 
information that is information needed by the company’s 
auditors in connection with preparing their report of which the 
company’s auditors are not aware each director has taken all  29
steps that he ought to have taken as a director in order to make 
himself aware of any relevant audit information and to establish 
that the company’s auditor is aware of that information
going concern
after making appropriate enquiries and taking account of the 
renewal of the banking facilities in january 2012 the directors 
have a reasonable expectation that the company and the group 
have adequate resources to continue in operational existence 
for the foreseeable future the financial statements are 
therefore prepared on a going concern basis
statement of directors’ responsibilities
the directors are responsible for preparing the annual report 
the directors’ remuneration report and the financial 
statements in accordance with applicable law and regulations
company law requires the directors to prepare the financial 
statements for each financial year  under that law the directors 
have prepared the group financial statements in accordance 
with international financial reporting standards ifrss as 
adopted by the european union and the parent company 
financial statements in accordance with united kingdom 
generally accepted accounting practice united kingdom 
accounting standards and applicable law under company  
law the directors must not approve the financial statements 
unless they are satisfied that they give a true and fair view  
of the state of the affairs of the company and the group and  
the profit and loss of the group for that period
in preparing these financial statements the directors are 
required to
•  select suitable accounting policies and then apply  
them consistently
•  make judgements and estimates that are reasonable  
and prudent
•  state whether applicable ifrss as adopted by the european 
union and applicable uk accounting standards have been 
followed subject to any material departures disclosed and 
explained in the group and parent company financial 
statements respectively
•  prepare the financial statements on the going concern basis 
unless it is inappropriate to presume that the company will 
continue in business
the directors are responsible for keeping adequate accounting 
records that are sufficient to show and explain the company’s 
and the group’s transactions and disclose with reasonable 
accuracy at any time the financial position of the company  
and the group and enable them to ensure that the financial 
statements and the directors’ remuneration report comply 
with the companies act 2006 and as regards the group 
financial statements article 4 of the ias regulation they are 
also responsible for safeguarding the assets of the company 
and the group and hence for taking reasonable steps for the 
prevention and detection of fraud and other irregularities
directors’ statement pursuant to the disclosure and 
t ransparency rules
each of the directors whose names and functions are listed on 
page 36 confirm that to the best of each person’s knowledge 
and belief
•  the group financial statements prepared in accordance with 
ifrs as adopted by the eu give a true and fair view of the 
assets liabilities financial position and profit of the company 
and the group and
•  the directors’ report includes a fair review of the development 
and performance of the business and the position of the 
company and group together with a description of the 
principal risks and uncertainties that it faces
the directors are responsible for the maintenance and integrity 
of the company’s website and legislation in the united kingdom 
governing the preparation and dissemination of financial 
statements may differ from legislation in other jurisdictions
 
george watt
chief financial officer annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 30
kpis 20102011
o u r 	 k p i 	 t a r g e t s 	 h a v e 	 p r o v e d 	 t o 	 b e 	 h i g h l y	
e f f e c t i v e 	 i n 	 p r o v i d i n g 	 o p e r a t i o n a l 	 f o c u s  	 c l a r i t y	
and 	 c onsis t enc y  	 t he 	 e xis ting 	 suit e 	 o f 	 kpis	 	
has 	 been 	 updat ed 	  s ee 	 p age s 	 3 2 	 and 	 3 3	 	
a n d 	 p e r f o r m a n c e 	 a g a i n s t 	 t h e 	 k p i s 	 i n 	 p l a c e	 	
in 	 2 011 	 is 	 sho wn 	 her e 
why it’s important
t elevision advertising is core to our consumer business 
and our regional advertising sales team are employed  
by stv as opposed to our national sales which are 
outsourced to itv sales 
how we measure it
using nmr data we compare stv’s regional sales with  
the total display advertising market for scotland 
2010 actual
2 011 	 t ar ge t
2011 actual
25
26
26
increase regional advertising market share
kpi 	 achie v ed
why it’s important
margin improvement across the period provides evidence 
of profitable growth
how we measure it
it is calculated as underlying operating profit divided by 
turnover and expressed as a percentage 
increase consumer margin
kpi 	 e x c eeded
why it’s important
our programme strategy results in more scottish based 
content appearing on our screen and savings being made 
in programme costs but it is key that an audience share is 
delivered at least equivalent to that of the itv network
how we measure it
peak audience 1800–2230 for all adults is compared  
to the itv network 
peak time audience v itv network
kpi 	 e x c eeded
why it’s important
page impressions are a key advertising currency and are 
directly related to generating advertising revenues 
how we measure it
using analytical tools the number of page impressions  
per month can be identified and collated and this is  
the monthly average figure across q4 
2010 actual
2 011 	 t ar ge t
2011 actual
110m
140m
17 0m
monthly page impressions q4 monthly average
kpi 	 e x c eeded
why it’s important
unique users to our websites are key to driving advertising 
revenues through their engagement with the site 
how we measure it
using analytical tools the number of unique users per 
month can be identified and collated and this is the 
monthly average figure across q4 
2010 actual
2 011 	 t ar ge t
2011 actual
22m
25m
30m
monthly unique users q4 monthly average
kpi 	 e x c eeded
consumer
2010 actual
2 011 	 t ar ge t
2011 actual
024
in line
085
125
150
155
2010 actual
2 011 	 t ar ge t
2011 actual 31
why it’s important
a key strategic objective is to grow our productions 
business and this provides clear evidence of that growth 
how we measure it
it is the total of all hours of new production delivered  
in the financial year to third party broadcasters
2010 actual
2 011 	 t ar ge t
2011 actual
113
130
121
production hours
kpi 	 no t 	 me t
why it’s important
digital revenue growth is a key strategic objective and this 
measure tracks evidence of this growth being delivered
how we measure it
it is the value of revenues generated from the group’s 
various digital operations
2010 actual
2 011 	 t ar ge t
2011 actual
£42m
£73m
£7 1m
digital revenue value
kpi 	 no t 	 me t
why it’s important
in conjunction with the growth in production hours  
it is also important that the value of content produced  
also grows and this kpi evidences this 
how we measure it
it is the value of new external commissions 
2010 actual
2 011 	 t ar ge t
2011 actual
£7 0m
£168m
£7 0m
value of external commissions
kpi 	 no t 	 me t
why it’s important
video streams are a key advertising currency and are 
directly related to generating advertising revenues 
how we measure it
using analytical tools the number of video streams across 
all platforms can be identified and collated and this is the 
monthly average figure across q4 
2010 actual
2 011 	 t ar ge t
2011 actual
20m
27m
29m
monthly video streams q4 monthly average
kpi 	 e x c eeded
why it’s important
margin improvement across the period provides  
evidence of profitable growth 
how we measure it
it is calculated as underlying operating profit divided  
by turnover and expressed as a percentage 
2010 actual
2 011 	 t ar ge t
2011 actual
102
100
60
production margin
kpi 	 no t 	 me t
why it’s important
margin improvement across the period provides  
evidence of profitable growth 
how we measure it
it is calculated as operating profit divided by turnover  
and expressed as a percentage 
2010 actual
2 011 	 t ar ge t
2011 actual
nil
30
17
digital margin
kpi 	 no t 	 me t
production annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 32
kpis 20122015
o u r 	 k p i 	 t a r g e t s 	 h a v e 	 b e e n 	 r e f r e s h e d 	 t o 	 b e	
c onsis t en t 	 with 	 the 	 gr oup ’ s 	 2 015 	 s tr at egic 	 aims 	
t h e 	 n e w 	 s u i t e 	 o f 	 k p i s 	 r e m a i n s 	 b r o a d l y 	 u n c h a n g e d	
fr om 	 the 	 pr e vious 	 t ar ge t s 	 and 	 ar e 	 s e t 	 out 	 belo w 
why it’s important
our programme strategy results in more scottish based  
content appearing on our screen and savings being made  
in programme costs but it is key that an audience share is 
delivered at least equivalent to that of the itv network
how we measure it
peak audience 1800 – 2230 for all adults is compared  
to the itv network
peak time audience v itv network
consumer
why it’s important
margin improvement across the period provides evidence 
of profitable growth
how we measure it
it is calculated as underlying operating profit divided  
by turnover and expressed as a percentage
2011 actual
2 012 	 t ar ge t
2 013 	 t ar ge t
2 014 	 t ar ge t
2 015 	 t ar ge t
155
155
160
165
17 0
increase consumer margin
why it’s important
page impressions are a key advertising currency and  
are directly related to generating advertising revenues 
how we measure it
using analytical tools the number of page impressions  
per month can be identified and collated and this  
is the monthly average figure across q4 
2011 actual
2 012 	 t ar ge t
2 013 	 t ar ge t
2 014 	 t ar ge t
2 015 	 t ar ge t
17 0m
200m
220m
240m
255m
monthly page impressions q4 monthly average
why it’s important
unique users to our websites are key to driving advertising 
revenues through their engagement with the site 
how we measure it
using analytical tools the number of unique users per 
month can be identified and collated and this is the 
monthly average figure across q4 
2 015 	 t ar ge t 37m
2011 actual 30m
2 012 	 t ar ge t 33m
2 013 	 t ar ge t 35m
2 014 	 t ar ge t 36m
monthly unique users q4 monthly average
why it’s important
understanding the tastes and preferences of our 
consumers and audiences is key to developing successful 
consumer services
how we measure it
using a platform with our data partner  experian  
we capture key consumer data
2 012 	 t ar ge t
2 013 	 t ar ge t
2 014 	 t ar ge t
2 015 	 t ar ge t
2011 actual 03m
07m
12m
18m
24m
consumer insights
objectiv e 	 is 	 t o 	 e x c eed	 	
the 	 ne t w ork 	 perf ormanc e 33
production
why it’s important
margin improvement across the period provides  
evidence of profitable growth 
how we measure it
it is calculated as operating profit divided by turnover  
and expressed as a percentage 
2011 actual
2 012 	 t ar ge t
2 013 	 t ar ge t
2 014 	 t ar ge t
2 015 	 t ar ge t
17
20
25
35
35
digital margin
why it’s important
margin improvement across the period provides  
evidence of profitable growth 
how we measure it
it is calculated as underlying operating profit divided  
by turnover and expressed as a percentage 
production margin
why it’s important
digital revenue growth is key strategic objective and this  
measure tracks evidence of this growth being delivered 
how we measure it
it is the value of revenues generated from the group’s  
various digital operations 
2011 actual
2 012 	 t ar ge t
2 013 	 t ar ge t
2 014 	 t ar ge t
2 015 	 t ar ge t
£7 1m
£91m
£113m
£141m
£17 0m
digital revenue value
why it’s important
doubling of production revenues is a key strategic aim and  
this measure tracks evidence of this growth being delivered
how we measure it
it is the value of revenues generated from external 
commission and secondary sales
2011 actual
2 012 	 t ar ge t
2 013 	 t ar ge t
2 014 	 t ar ge t
2 015 	 t ar ge t
£84m
£120m
£150m
£180m
£220m
production revenues
why it’s important
video streams are a key advertising currency and are 
directly related to generating advertising revenues
how we measure it
using analytical tools the number of video streams across 
all platforms can be identified and collated and this is the 
monthly average figure across q4 
2011 actual
2 012 	 t ar ge t
2 013 	 t ar ge t
2 014 	 t ar ge t
2 015 	 t ar ge t
29m
33m
38m
44m
50m
monthly video streams q4 monthly average
why it’s important
a key strategic objective is to grow our productions  
business and this provides clear evidence of that growth 
how we measure it
it is the total of all hours of new production delivered  
in the financial year to third party broadcasters
2011 actual
2 012 	 t ar ge t
2 013 	 t ar ge t
2 014 	 t ar ge t
2 015 	 t ar ge t
121
140
150
160
170
production hours
objectiv e 	 is 	 t o 	 e x c eed	 	
10 	  min  	 in 	 all 	 y e ar s annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 34
principal risks and uncertainties
risks and uncertainties 2011
like most businesses stv group plc is exposed to a number  
of risks which could have an impact on our operating results 
financial condition and prospects we have rigorous internal 
systems to identify  monitor and manage any risks to the business
all of the risks identified have been fully evaluated and taken 
into account in preparing the budgets and forecasts which 
support going concern and impairment assessments the risks 
have also been reviewed and agreed with both internal and 
external auditors
regulatory environment
our television business is operated under licences regulated  
by ofcom which extend until 2014 these licences contain 
conditions relating to such issues as regional television 
programme production and matters of taste and decency  
it is the responsibility of the executive named on each television 
licence to ensure that the terms of these licences are adhered  
to and measures have been put in place internally to ensure that 
this occurs however  it is possible that in certain circumstances 
these terms may inadvertently be breached and sanctions 
imposed by ofcom in the most serious of circumstances  
it is within the remit of ofcom to withdraw licences
dependence on advertising
stv’s sales expenses and operating results could vary from 
period to period as a result of a variety of factors some of  
which are outside stv’s control these factors include general 
economic conditions conditions specific to general advertising 
markets including the commercial television market trends in 
sales capital expenditure and other costs and the introduction 
of new services and products by us or our competitors  
in response to an everchanging operating and competitive 
environment stv may elect from time to time to make certain 
pricing service or marketing decisions that could have a 
material adverse effect on sales results of operations and 
financial conditions
performance of the itv network
the majority of stv consumer’s programming content is 
provided by the itv network therefore its ability to attract and 
retain audiences and the advertising airtime sales performance 
of itv’s sales house – which is responsible for the sale of stv’s 
uk national airtime to advertisers – are factors that affect the 
performance of stv consumer and therefore the group as a 
whole this relationship is managed closely with regular 
updates on programme and schedule developments being 
provided via itv council on which stv is represented and 
through senior stv staff with responsibility to manage the  
sales relationship with itv 
pension scheme shortfalls 
we believe that the stv pension schemes are relatively strong 
and the investment strategy is calculated to reduce any market 
movement impacts however  it is possible that the group may 
be required to increase its contributions to cover an increase  
in the cost of funding future pension benefits or to cover 
funding shortfalls which could have an adverse impact on 
results and cash flow this position is kept under regular  
review by the board
financial
the overall financial position of stv may be constrained by  
the group’s leverage and other debt arrangements an increase 
in interest rates could have an adverse impact on the financial 
position and business results stv is exposed to a variety of 
financial risks that arise from and apply to its activities currency 
risk credit risk liquidity risk and cash flow interest rate risk  
the group’s overall risk management programme focuses on 
the unpredictability of financial markets and seeks to minimise 
potential adverse effects on financial performance 
stv uses derivative financial instruments to hedge certain  
risk exposures
risk management is carried out under policies approved by the 
board with financial risks being identified evaluated and hedged 
in close cooperation with the operating divisions the board 
provides written principles for overall risk management as well 
as written policies covering specific areas such as foreign  35
exchange risk interest rate risk credit risk use of financial 
instruments and investing excess liquidity 
a  	 c urr enc y 	 risk
stv operates almost wholly within the uk and is exposed to 
minimal foreign exchange risk foreign exchange risk arises 
primarily with respect to the euro and us dollar  foreign 
exchange risk arises from future commercial transactions and 
trade assets and liabilities in foreign currencies
b  	 cr edit 	 risk
stv has no significant concentration of credit risk it has policies 
in place to ensure that sales are made to customers with an 
appropriate credit history  derivative transaction counterparties 
are limited to highcreditquality financial institutions
c  	 liquidit y 	 risk
prudent liquidity management implies maintaining sufficient 
cash and marketable securities the availability of funding 
through an adequate amount of committed credit facilities and 
the ability to close out market positions due to the nature of 
the underlying business the aim is to maintain flexibility in 
funding by keeping committed credit lines available
d 	 c ash 	 flo w 	 in t er e s t 	 r at e 	 risk
stv has no significant interest bearing assets and its income 
and operating cash flows are substantially independent of 
changes in market interest rates 36
annual report and accounts 2011
directors’ report – corporate governance
board of directors
richard findlay 68
chairman 
3
appointed to the board in february 2007  richard is the former 
chief executive of scottish radio holdings plc which owned  
a considerable portfolio of newspapers and radio stations 
throughout the uk and irish republic and which he ran for  
ten years building it into a major force and consistently 
outperforming peer companies in august 2005 scottish radio 
holdings plc was sold to emap plc richard has strong links in 
the scottish arts community he is the founding chairman of  
the national theatre for scotland chairman of the royal 
scottish academy of music  drama foundation innovate 
financial services ltd and a growing life sciences company  
richard is also chairman of the stv appeal charity 
rob woodward 52
chief executive
appointed to the board in february 2007  previously rob was 
commercial director of channel 4 t elevision corporation and  
on the main board he was formerly ceo of 4ventures and 
achieved a dramatic turnaround of legacy businesses and built  
a set of successful new media and digital businesses rob was 
previously an md of ubs warburg and global coo of corporate 
finance in media and communications prior to this he was 
managing partner of deloitte’s european t elecoms media and 
t echnology business and uk strategy consulting practice  
rob is a trustee of the stv appeal charity  rob was appointed 
prochancellor and chair of the council of city university 
london in february 2012
george watt 44
chief financial officer
appointed to the board in f ebruary 2001 as group finance director  
george joined the company in 1998 as group financial controller 
and treasurer  prior to joining stv group plc george worked  
with kpmg’s audit and assurance services practice in the uk and 
also in the us george is a member of the institute of chartered 
accountants in scotland  an executive committee member of the 
scottish council for development and industry  a member of the 
cbi scotland council and a trustee of the stv appeal charity 
david shearer 52
senior independent director 
1 3
appointed to the board in f ebruary 2007  david is an experienced 
corporate financier and turnaround specialist and was previously 
senior partner of deloitte llp for scotland  northern ireland and 
a uk executive board member of deloitte llp  he is chairman of 
mouchel group plc deputy chairman of aberdeen new dawn 
investment t rust plc senior independent director of martin currie 
holdings limited renold plc and superglass holdings plc and a 
nonexecutive director of mithras investment t rust plc he was 
previously chairman of crest nicholson plc and a nonexecutive 
director of city inn limited where he stood down after successfully 
completing the financial restructuring of these businesses was  
a nonexecutive director of scottish financial enterprise and a 
governor of the glasgow school of art he served one term ending 
in early 2007 as a nonexecutive director of hbos plc
v asa babic 45
non executive director 
1 2
appointed to the board in february 2007  vasa works as an 
independent advisor to large european companies previously 
he was a partner of hanover investors group director of 
business integration at vodafone plc and a partner in the 
london office of consulting firm oliver wyman vasa works in  
a broad range of sectors with a focus on t elecoms internet 
media and t echnology industries he has an ma in economics 
from king’s college cambridge
jamie matheson 57
non executive director 
1 2
appointed to the board in march 2007  jamie is executive 
chairman of brewin dolphin holdings plc a leading private 
client investment manager  he was previously a nonexecutive 
director of scottish radio holdings plc until its sale to emap plc 
and is currently a nonexecutive director of maven income and 
growth vct5 plc
michael jackson 54
non executive director 
2
appointed to the board in may 2009 michael is an advisor  
investor and director for digital and television businesses in  
the us and uk previously he was president of programming  
at interactivecorp the internet conglomerate where he was 
responsible for overseeing the development acquisition and 
distribution of content based websites prior to this michael  
was chairman of universal t elevision group in charge of the 
creative and strategic direction of the television business  
he served four years as chief executive officer of channel 4 
t elevision where in addition to commissioning programmes  
he refocused the channel to exploit digital opportunities and 
launched two new channels filmfour and e4 before joining 
channel 4 michael worked as controller of bbc1 and director  
of t elevision and as controller of bbc2 he was previously a 
non executive director of emi group plc
key
1 audit committee
2 remuneration committee
3 nomination committee 37
left to right from top
rob woodward
richard findlay
vasa babic
michael jackson 
george watt
jamie matheson
david shearer 38
annual report and accounts 2011
directors’ report – corporate governance
principles statement
stv group plc is fully committed to the highest standards of corporate governance believing that such standards are vital to overall 
business integrity and performance and considers it crucial that it conducts itself honestly transparently and responsibly 
the board has a central role to play in creating and delivering the long term success of the company and the long term return for 
shareholders this requires it to determine business strategy and the company’s appetite for risk to monitor management’s 
performance in delivering against that strategy and ensure that the risk management measures and internal controls put in place 
are appropriate and effective the board must ensure that the funding and talent available to the business will support it long term 
and must remain aware of the company’s obligations to its shareholders and other stakeholders responding to their needs with 
transparent reporting and active engagement
statement of compliance
in may 2010 the financial reporting council published the united kingdom corporate governance code which applies to all 
companies for financial years beginning on or after 29 june 2010 the “new code” 2011 was the first year during which the 
company required to comply with the new code and the directors consider that they complied with all sections of the new code for 
the year under review with the exception of provision b21 in relation to mr peacock’s chairmanship of the nomination committee 
while it is acknowledged that it would be preferable to have this committee constituted solely with independent non executive 
directors there are a limited number of directors to choose from however  the intention is to become compliant over time 
 
this section together with the report by the directors on remuneration set out on pages 48 to 58 describes how in respect  
to the financial year ended 31 december 2011 the company has complied with the principles and provisions of the new code  
a copy of the new code is publicly available at wwwfrcorguk
board of directors
the membership of the board throughout the year and up to the date of signing the financial statements was as follows
chairman
richard findlay 
chief executive officer
rob woodward 
chief financial officer
george watt
nonexecutive directors
david shearer senior independent director
matthew peacock resigned 19 january 2012
vasa babic
jamie matheson 
michael jackson
board appointment balance and independence
the board has considered the independence of the nonexecutive directors and has confirmed that following the resignation of 
matthew peacock on 19 january 2012 all of the current directors are considered to be of independent character and judgement 
with the exception of vasa babic who is an advisor to and was previously a partner of hanover investors which up until 24 june 
2011 held shares in stv 
the nonexecutives mix of skills and wide ranging business experience is a major contribution to the proper functioning of the  
board and its committees ensuring that matters are debated and that no individual or group dominates the board’s decision making 
processes nonexecutive directors have a particular responsibility for ensuring that the business strategies proposed are fully 
discussed and critically reviewed and their collective experience and broad range of skills gained through a range of industries 
means they can constructively challenge management in relation to both the development of strategy and performance against  
the goals set by the board 
corporate governance report 39
the nonexecutive directors do not participate in any share option or pension scheme of the company
directors now have a statutory duty to avoid situations where they have or can have any interest that conflicts or possibly may 
conflict with the interests of the company  a director will not be in breach of that duty if the relevant matter has been authorised  
in accordance with the articles of association by the other directors the directors confirm that there have been no such conflicts
directors and officers of the company and its subsidiaries have the benefit of a directors’ and officers’ liability insurance policy  
the company’s articles of association also provide that every director and other officer of the company is to be indemnified  
out of the assets of the company against any liability he incurs in defending any proceedings brought against him provided that 
judgement is not given against him all directors have access to the advice and services of the company secretary and at the 
company’s expense the group’s legal advisers the company secretary is an employee of the company and attends all meetings  
of the board and its committees she is responsible for ensuring that all board procedures are observed and for advising the board 
on corporate governance matters
genevieve shore will join the board on 1 march 2012 and is cio and director of digital strategy at pearson plc with responsibility 
for overseeing the strategy architecture and implementation of all of pearson’s worldwide it operations networks systems for 
processes from content creation through to sales systems to manage pearson’s assets such as content rights and royalties data 
and analysis previously genevieve has worked at pearson for 10 years where her roles have included group sales director and 
global digital director  prior to that she worked for seven years at random house
board responsibilities
there is a well established division of authority and responsibility within the company through the separation of the roles of the 
chairman and the chief executive which is set out in writing and has been approved by the board the chairman is responsible for 
leadership of the board ensuring its effectiveness and setting the agenda he provides a conduit for communication to and from 
shareholders and facilitates the contribution of the nonexecutive directors while ensuring constructive relations between the 
executive and nonexecutive directors
the board has responsibility for making all key strategic management and commercial decisions which are necessary for the 
conduct of the company’s business as a whole including the approval of corporate strategy annual budgets interim and full  
year financial statements and reports dividends accounting policies and all significant capital projects acquisitions and disposals 
the chief executive and his management team are responsible for developing the appropriate business strategy and once 
approved by the board for ensuring that the strategy is effectively implemented in accordance with the approved operating  
plan and within a sound system of internal controls to achieve the agreed objectives he creates a framework of strategy values 
organisation and objectives to ensure the successful delivery of results and allocates decision making and responsibilities accordingly 
compliance with policies and achievement against objectives is monitored by the board through monthly and quarterly performance 
reporting and budget updates
it is the duty of all directors to promote the success of the company for the benefit of its members as a whole and in doing so  
to have regard amongst other matters to
• the likely long term consequences of any decision
• the interests of the company’s employees
• the need to foster the company’s business relationships
• the impact of the company’s operations on the community and the environment
• the desirability of maintaining a reputation for high standards of business conduct and
• the need to act fairly as between members of the company 
the senior independent director is available to shareholders should they request a meeting or have concerns which they have been 
unable to resolve through normal channels or when such channels would be inappropriate he provides a communication channel 
between the chairman and the non executive directors and is responsible for leading the nonexecutives discussion on the 
chairman’s performance at the annual performance review
the board recognises that it is accountable to the company’s shareholders for good governance to ensure efficient and effective 
management in order to deliver shareholder value over the longterm 40
annual report and accounts 2011
directors’ report – corporate governance
board meetings 
attendance of board members at board and committee meetings held in 2011 is set out below
 board audit committee remuneration committee nomination committee
number of meetings held 9 3 3 2 
attendance
richard findlay 9 2
david shearer 9 3 2
rob woodward 9
george watt 9
matthew peacock 7 2
vasa babic 9 3 3
jamie matheson 8 3 3
michael jackson 9 3
the board meets regularly at least nine times a year with additional meetings taking place as and when required the board has 
adopted a schedule of matters reserved for its decision which was revised in december 2011 and can be found on the company’s 
website at wwwstvplctv under the investor centre the principal matters being approval of
• financial statements and shareholder circulars dividend policy significant changes in accounting policies or practices
• board and committee appointments and terms of reference terms and conditions of nonexecutive and executive directors
• the group’s longterm objectives and commercial strategy annual operating and capital expenditure budgets
• material contracts and significant variations in terms of the group’s borrowing facilities
• corporate activity which is subject to the city code on t akeovers and mergers or of a material nature
• major changes to the group’s pension schemes share schemes and treasury policy
• risk management internal control policies and corporate governance arrangements
board meetings involve reviews of financial and business performance against the plan and budgets approved by the board both  
at a company and a divisional level the board also receives regular presentations from key business areas enabling it to explore 
specific issues and developments in more detail any matter requiring a decision by the board is supported by a paper analysing  
all relevant aspects of the proposal including potential risks and proposed management action
each year a strategy day is held prior to which the non executive directors are encouraged to suggest specific topics for discussion 
at this year’s strategy day the future plans for and opportunities open to the company were reviewed and discussed in detail  
and a dinner was held in the evening which was attended by the leadership t eam thus providing the non executive directors  
the opportunity to direct any questions to them on their respective business area the strategy day is an important tool in 
communicating goals and objectives so that the most effective use can be made of stv’s resources by focusing on the key  
priorities thereby producing more efficiency and effectiveness
corporate governance report continued 41


leadership
board of directors
when a director is unable to attend or dial in to a board or committee meeting he receives the papers for consideration at that 
meeting and has the opportunity to discuss any issues or make any comments in advance and if necessary follow up with the 
chairman of the relevant meeting
board committees
the board is supported by the audit remuneration and nomination committees  
the audit remuneration and nomination committees each held an evaluation of their work and effectiveness during the year   
the results of which were reported to the board by the respective committee chairmen the reviews concluded that each committee 
was operating in an effective manner and carrying out their respective delegated duties efficiently  the board and its committees 
will continue to review critically their procedures effectiveness and development throughout the year ahead with any concerns  
or observations raised with the chairman

audit committee
•  monitor the integrity of the published 
financial statements
•  review the effectiveness of internal 
financial controls 
•  review the operation of the risk 
management process
•  discuss with the company’s auditors 
matters arising from their work
•  review the scope of work and reports 
produced by the internal auditors
page 42
audit committee report
remuneration committee
•  determine and agree with the board the 
framework for the remuneration policy
•  review the ongoing appropriateness and 
relevance of the remuneration policy
•  approve the design of targets for and 
payments from any performance related 
pay schemes
•  review the design of all share  
incentive plans 
•  determine the remuneration packages  
for executive directors and other  
senior executives
•  review and note annually the remuneration 
trends across the company
page 48
remuneration committee report
nomination committee
•  review the structure size and 
composition of the board
•  review succession plans and make 
recommendations to the board
•  identify and nominate candidates  
for approval of the board 
•  recommend to the board membership  
of the board committees
page 42
nomination committee report
• determines long term direction and strategic aims
• sets framework of appropriate and robust controls
• ensures efficient and effective operation of the business
• engages with shareholders and stakeholders 42
annual report and accounts 2011
directors’ report – corporate governance
remuneration committee
the members of the committee during the year were
vasa babic chairman
jamie matheson
michael jackson 
the activities of the remuneration committee are described within the report by the directors on remuneration which can be found 
on pages 48 to 58 the terms of reference of the remuneration committee are available on request and on the company’s website 
wwwstvplctv
report from the nomination committee
the members of the committee during the year were
matthew peacock chairman 
richard findlay
david shearer
the nomination committee has written terms of reference which are available on request and on the company’s website www stvplctv
there is a formal and transparent procedure for the appointment of new directors to the board as part of the annual performance 
evaluation conducted by the board a review is conducted of the board’s size composition diversity and balance of skills the outcome 
of the review is used by the committee to determine the selection criteria and role specification of nonexecutive directors 
external selection consultants may be retained to conduct searches and a shortlist created in consultation with the committee  
and where appropriate the executive directors the committee reviews the profiles of candidates and conducts interviews prior  
to making recommendations to the board for approval appointments are made on merit and against objective criteria following 
discussion of the recommendations of the lord davies report on boardroom diversity the committee has not at the current time  
set a specific female board member quota accordingly appointments to the board will continue to be based on merit measured 
against objective criteria and required competencies while taking account of the skills and experience the individual can bring to  
the board genevieve shore will be appointed as a non executive director on 1 march 2012 and her expertise in developing new 
digital products and services will be invaluable to stv at it progresses to the next phase of its growth strategy  the assistance of  
an external search consultant was used for this appointment and a description of the role and capabilities required for the role  
was prepared following introductory meetings with the committee and other board members her appointment was unanimously 
agreed by the board
report from the audit committee
the members of the committee during the year were
david shearer chairman
vasa babic
jamie matheson
the audit committee chaired by david shearer  who has recent and relevant financial experience is authorised by the board to 
investigate any activity within its terms of reference and to seek any information it requires from any employee all employees are 
directed to cooperate with any request made by the committee the audit committee has written terms of reference which are 
available on request and on the company’s website wwwstvplctv
meetings of the committee are normally attended by the chief executive officer  chief financial officer and the company secretary 
as well as the group financial controller together with representatives of both the external auditors and the internal auditors  
the committee also meets separately with senior management and the external auditors
the chairman of the audit committee reports to the subsequent meeting of the board on the committee’s work and the board 
receives a copy of the minutes of each meeting the papers considered by the committee are available to any director who is not  
corporate governance report continued 43
a member  should they wish to receive them the committee’s effectiveness is reviewed annually as part of the board  
evaluation process
the audit committee and the board place great emphasis on the objectivity of the group’s auditors pricewaterhousecoopers llp 
“pwc” in their reporting the audit partner and manager attend all audit committee meetings to ensure full communication of 
matters relating to the audit the auditors have confirmed to the committee that in relation to their services to the company they 
comply with uk regulatory and professional requirements including ethical standards issued by the auditing practices board and 
that their objectivity is not compromised
the auditors are required each year to confirm in writing to the committee that they have complied with the independence  
rules of their profession and regulations governing independence having taken into consideration matters such as the individual 
independence of members of the engagement team and the firm as whole and the nature of any non audit work undertaken  
before pwc takes on any engagement for other services from the company careful consideration is given as to whether the  
project could conflict with its role as auditors or impair its independence this includes consideration of the safeguards which  
are in place to mitigate the risks to independence 
the audit committee is responsible for approving non audit work and during the year under review this consisted mainly of  
advice in relation to tax in order to seek to preserve auditor objectivity and independence the company has a policy regulating  
the provision of nonaudit services by the auditor  the chief financial officer must obtain the approval of either the chairman  
of the audit committee or another committee member if the preference is to use the auditors and must provide an explanation  
as to why the auditor is the most suitable supplier of services a case by case decision is therefore necessary and the auditor  
cannot be engaged for nonaudit work without reference to the audit committee it is felt that this process ensures shareholders 
receive value for money and the audit committee keep this policy under review 
in general the auditors may not provide a service which 
a creates a mutuality of interest 
b places the auditor in a position to audit their own work 
c results in the auditor acting as a manager or employee of stv 
d puts the auditor in the role of advocate for stv  
due consideration is given to the award of any nonaudit work and while it is important that the independent role of external 
auditors in reporting to shareholders is not compromised it is equally important that the company is not deprived of expertise 
when and where it is needed there are a number of projects for which pwc is best placed to perform the work to the extent that  
its skills and experience along with its knowledge of the company makes it the most appropriate provider  the nonaudit work 
carried out during 2011 related to recent tax developments together with tax compliance and pwc were considered to be the  
most suitable supplier given that much of the information derived from the audited financial records
during the year the committee reviewed the company’s interim and full year results prior to publication as well as its risk 
management procedures and risk register  incorporating relevant social ethical and environmental risks 
pwc has been the company’s auditors since 2004 the committee is satisfied with its effectiveness and independence and has  
not considered it necessary to require an independent tender process in 2011 the external auditors are required to rotate the audit 
partner responsible for the group and subsidiary audits every five years and the current lead audit partner has been in place for 
three years there are no contractual obligations restricting the company’s choice of external auditor  
a resolution to reappoint the auditors will be put before shareholders at the annual general meeting
internal audit
deloitte llp “deloitte” were appointed as the company’s internal auditor in 2009 and the primary focus of its comprehensive 
internal audit programme is to provide assurance over key revenue streams and operating costs over the course of the three  
year programme deloitte will review systems and processes and ensure that the company is operating effectively efficiently and 
economically and in accordance with legislative requirements and professional standards its work is designed to provide insights 
into the internal control environment and efficiencies of key processes as well as providing feedback on the effectiveness of 
interfaces between the business and enabling functions 44
annual report and accounts 2011
directors’ report – corporate governance
deloitte attend all meetings of the audit committee and provide update reports on what specific areas have been reviewed in terms 
of the planned internal audit for the year  together with an evaluation of the current controls and the key findings and 
recommendations
the board reviews the internal control process and its effectiveness on an ongoing basis to ensure it remains robust and to identify 
any control weaknesses and can confirm that no significant failings or weaknesses were identified in relation to the review
leadership t eam
the leadership t eam comprises the executive directors commercial director director of corporate development chief t echnology 
and platforms officer director of channels deputy director of channels director of content hr and communications director  
and the head of legal and regulatory affairs the purpose of the team is to drive the implementation of the company’s strategic 
priorities whiles addressing critical business issues and opportunities the team meets weekly and is focused on groupwide 
performance with the emphasis on collaboration and teamwork and ensures that there are clear lines of accountability 
diversity
stv is fully committed to fostering talent and supporting people from all backgrounds who wish to progress however  appointments 
and promotions will continue to be made based on merit and in line with the skills and attributes identified for each post including 
those identified by the nomination committee for the board stv is committed to appointing the best available person to any role 
within the group regardless of gender 
notwithstanding this stv will work towards extending the female composition of its board as vacancies arise and suitable 
candidates are identified however the primary focus is the strength of the board and the overarching aim in any new appointment 
must always be to select the best candidate to make the board work better and make better decisions
achieving the right mix of talent skills and experience on the board is critical for business and stv’s aim is to have an appropriate 
level of diversity in the boardroom to support the achievement of its strategic objectives diversity of perspective is vital and having 
directors from different backgrounds and with different skill sets ensures that decisions are challenged in a credible manner and 
“group think” is avoided each person is different and diversity is about recognising respecting and valuing these differences
while genevieve shore joins the stv board on 1 march 2012 as its first female director  its company secretary is female as are three 
of the 10 members of the current leadership t eam stv has chosen not to target a specific number or percentage of women for its 
board but to concentrate its efforts on encouraging more women to remain within the company and progress through the ranks to 
senior positions and as at 31 december 2011 47 of stv’s staff were female
t raining and development
all directors are given a comprehensive introduction to the group’s businesses and continuing development is provided through 
briefing sessions in the course of regular board meetings covering business specific and broader regulatory issues and including 
presentations from members of senior management directors are also provided with and encouraged to take up opportunities to 
meet major shareholders during the year  the directors were provided with information on the bribery act 2010 and its implications 
for both the board and the company  the directors discussed the issues around this legislation and thereafter the revised business 
ethics policy together with the hospitality  gift register were approved and adopted by the board
development and training of directors is an ongoing process throughout their period in office the directors are regularly updated 
on the group’s business legal matters concerning their role and duties the competitive environments in which the group operates 
and any other significant changes affecting the group and the market sector of which it is a part in addition the board regularly 
receives presentations from senior managers within the group and each year board meetings are scheduled around the group’s 
business locations to ensure that director’s knowledge skills and familiarity with the group’s businesses and people are updated and 
maintained in addition board training and development is considered as part of the annual performance evaluation exercise and 
during the year the chairman confirmed with each director that they were content with the level of training and development  
given with no director requesting additional training
corporate governance report continued 45
performance evaluation
the effectiveness of the board is vital to the success of the group and accordingly the company undertakes a rigorous evaluation 
each year in order to assess how well the board its committees the directors and the chairman are performing in addition the 
process aims to improve effectiveness for the future and provide an opportunity for the non executive directors  through their 
exposure on other company boards  to draw on their experience and to suggest areas of best practice it is also an opportunity  
for directors to raise any concerns about procedures and governance issues as in previous years this is an internal exercise led  
by the chairman
the evaluation is conducted using a comprehensive questionnaire which canvasses the opinions of the directors on a wide range of 
matters including board composition board meetings and processes board performance the performance of individual directors 
as well as the board’s communication both with external stakeholders and the company’s senior management the performance 
evaluation questionnaire is followed by meetings of the full board the chairman with the nonexecutive directors and nonexecutive 
directors without the chairman present the chairman’s evaluation is managed by the senior independent director who provides 
feedback to the chairman as part of the chairman’s evaluation the nonexecutive directors meet separately under the 
chairmanship of the senior independent director and the views of the executive directors are taken into account in evaluating  
the chairman’s performance
on completion of the 2011 performance evaluation the performance of each director of the board was found to be effective and  
it was concluded that the board provides the effective leadership and control required for a listed company it was recognised that 
the board functioned well with appropriate board processes papers and agendas and that there was good communication and 
interaction between the board and the leadership t eam
the evaluation process further concluded that the board was made up of strong and independent minded nonexecutive directors 
each of whom contributed effectively and demonstrated full commitment to their duties
the chairman reported the results of the evaluations at the board meeting in january 2012 the nominations committee confirmed 
to the board that the contributions made by the directors offering themselves for election and reelection at the agm in april 2012 
continue to be effective and that the company should support their election and reelection in addition the board considered 
recommendations made by directors during the board performance evaluation for the improvement of board procedures and its 
effectiveness consequently some changes in board practice are being implemented including extending the duration of board 
meetings and allocating more time in the board schedule for presentations by key senior executives 
reelection
nonexecutive directors are appointed for a specified period of three years and reappointment is not automatic directors stand  
for election by shareholders at the first annual general meeting following their appointment and thereafter for reelection at 
intervals of no more than three years the report from the nomination committee contained in this report explains the process for 
selection of directors and succession planning copies of the nonexecutives letters of appointment are available for inspection at 
the company’s registered office and will be available at the annual general meeting
the chairman and other members of the board recommend that the directors retiring be reelected the chairman has confirmed 
that all directors retiring and seeking reelection have been subject to performance evaluation and as part of this evaluation the 
chairman confirms that they continue to demonstrate commitment to their role and continue to fulfil their functions responsibly 
with regard to genevieve shore who is seeking election the board considers that genevieve’s knowledge and experience of digital 
initiatives and particularly monetisation policies provides the expertise necessary to help stv further generate audiences and 
revenues for its content across different platforms the board accordingly recommends that shareholders support genevieve’s 
election as a non executive director   46
annual report and accounts 2011
directors’ report – corporate governance
risk management and internal control
risk is inherent in the group’s business and activities and the review of risk and risk management is embedded throughout the 
group the ability to identify assess monitor and manage each type of risk to which the group is exposed is an important factor in 
its financial soundness performance reputation and future success the management of risk is considered to be of vital importance 
and as such it is a matter for the full board and not delegated to a committee accordingly the directors have overall responsibility 
for establishing and maintaining an adequate system of internal controls and risk management policies and also for reviewing the 
effectiveness of each this is communicated to the leadership t eam and each member is accountable for all risks assumed in their 
respective areas of responsibility and for the execution of appropriate risk management discipline 
during 2011 these reviews have included an assessment of internal controls in particular  financial operational and compliance 
controls and risk management and their effectiveness and were supported by reports from the internal auditor as well as from  
the external auditor on matters identified in the course of its statutory audit work the system is designed to manage rather than 
eliminate risk and in pursuing these objectives internal control can only provide reasonable and not absolute assurance against 
material misstatement or loss during 2011 all points raised by the internal auditor were addressed and executive management 
believes that the control environment has been strengthened further by the actions taken 
a key element of the risk management process is the method of profiling risk this determines the threats to the achievement  
of business objectives and day to day operations in terms of likelihood and consequence at a residual level after taking account  
of mitigating and controlling actions
in addition to both the external and the internal audit the following key controls are in place
•  a comprehensive financial review cycle which includes a detailed budgeting process where business units prepare budgets for 
approval by the board monthly reporting of trading results for review and where necessary corrective action as well as detailed 
and regular reforecasting
•  clearly defined management structure and delegation of authority to committees of the board subsidiary boards and associated 
business units 
• high recruitment standards and formal career development and training to ensure the integrity and competence of staff 
• regular reviews of key performance indicators and business risks and consequent steps to manage any matters arising
• procedures for the approval of capital expenditure 
•  monthly monitoring and reforecasting of results against budget with major variances followed up and management action taken 
where appropriate 
•  ongoing procedures to identify evaluate and manage significant risks faced by the business in accordance with the t urnbull 
guidance and procedures to monitor the control systems in place to reduce these risks to an acceptable level and 
•  provision to the board and management of relevant accurate and timely information based on comprehensive management 
information systems which are continually being improved and updated
a highly detailed review process conducted on a multilevel basis ensures that the consolidated group accounts are prepared having 
taken account of the internal control procedures and risk management strategies outlined above
the comprehensive risk register comprises risks specific to the divisional activities of the business as well as environmental social 
governance financial and human resources risks it is a constantly evolving document which is reviewed and updated on an ongoing 
basis at an operational level and on a quarterly basis by the board with the audit committee conducting an annual review this 
regular review is vital to ensure that a risk culture is embedded throughout the group and that an appropriate risk framework is 
operating effectively it also provides the board and the audit committee with an overall view of the group’s risk profile identifying 
any major exposures and mitigating actions
corporate governance report continued 47
an in depth review of the risk register will be carried out in the early part of 2012 facilitated by deloitte the process will involve 
one on one structured interviews with senior management followed by a half day workshop with the leadership t eam
the risk management process includes multiple opportunities for rigorous discussion and debate to assess the relative profile of 
each risk to the other  risks are linked to business objectives and kpis to ensure that all key risks are considered and adequately 
managed each risk is scored on both an inherent gross basis and residual net basis to provide assurance that the controls are 
operating as intended and both the inherent and residual scores are calculated by multiplying the risk likelihood by the risk impact 
to ensure that more accurate evaluations are taken
the company has in place a whistleblowing policy through which staff can in confidence raise concerns about possible 
improprieties either in the conduct of others in the business or in the way the business is run concerns can relate to actual or 
potential breaches of law or company policy including those relating to accounting risk issues internal controls auditing issues  
and related matters all matters raised will be investigated and reported to the committee no such concerns were raised by staff 
during the year 
the risk management framework and internal controls system across the group which are subject to continuous development 
provides the basis on which the company has complied with the combined code provisions on internal control
relations with shareholders
stv’s corporate website at wwwstvplctv has information for institutional and private shareholders alike and shareholders seeking 
information may contact the company directly throughout the year  in addition stv has an electronic communication facility to 
allow shareholders to receive information more quickly and in a manner more convenient for them the board also welcomes and 
encourages the participation of all shareholders at the company’s annual general meeting
institutional shareholders
stv undertakes a comprehensive programme of meetings and events for institutional investors and research analysts throughout 
the year and the board are kept fully informed of feedback given to the chief executive and finance director in the course of their 
extensive round of investor meetings the board routinely receives updates on significant movements on the share register  
analysts’ consensus forecasts and market sentiment 
the chairman the senior independent director and other nonexecutive directors are available to meet with major shareholders  
to discuss governance and strategy and to understand any issues or concerns and various meetings have taken place with major 
shareholders during the year  discussions at these meetings are conveyed to all directors in order that each can develop an 
understanding of major shareholders views on the company communication with major shareholders analysts and the financial 
press is maintained throughout the year and feedback from major shareholders is regularly sought and reviewed by the board 
copies of analysts’ research relating to the group are circulated to all directors upon publication and a brief analysis of the 
shareholder register is prepared quarterly and made available to the board 
detailed reviews of the company’s performance and financial position are included in the chairman’s statement the chief executive 
officer’s and chief financial officer’s reviews which the board uses to present a balanced and understandable assessment of the 
company’s position and prospects such communication is designed to establish a mutual understanding of objectives
 
private shareholders
we are always pleased to hear the views of our private shareholders and to answer queries by telephone or in writing through 
emailing our company secretary jane t amesstvtv we encourage shareholders to make maximum use of our website to access 
company reports notices of meetings and general shareholder information shareholders can also check their shareholding at  
any time by visiting the registrar’s website at wwwcapitashareportalcom 48
annual report and accounts 2011
directors’ report – corporate governance
remuneration committee report
introduction 
this report has been prepared in accordance with schedule 8 quoted companies directors’ remuneration report regulations 
2008 the “regulations” the report also meets the relevant requirements of the listing rules of the financial services authority 
and describes how the board has applied the principles and complied with the provisions of the uk corporate governance code 
2010 relating to directors’ remuneration as required by the regulations an advisory resolution to approve the report will be 
proposed at the agm of the company at which the financial statements will be approved
the auditors are required to report on the ‘auditable’ part of this report and to state whether  in their opinion that part of the report 
has been properly prepared in accordance with the companies act 2006 as amended by the regulations the report is therefore 
divided into separate sections for audited and unaudited information
part 2 of the regulations  unaudited information 
remuneration committee 
the directors who were members of the remuneration committee during the year are shown on page 42 in the section on 
corporate governance 
the responsibility for the establishment of a remuneration policy and its cost is a matter for the full board on the advice of the 
remuneration committee the recommendations of the remuneration committee have been approved without amendment by  
the board for submission to shareholders 
the remuneration committee is responsible for developing policy on remuneration for executive directors and senior management 
and for determining specific remuneration packages for each of the executive directors the remuneration committee members 
have no personal financial interest other than as shareholders in matters to be decided no potential conflicts of interests arising 
from cross directorships and no daytoday involvement in running the business 
during the period under review the remuneration committee sought the assistance of the chairman and chief executive officer  
on matters relating to directors’ performance and remuneration the chairman chief executive officer and the human resources 
director attend meetings by invitation except when their individual remuneration arrangements are discussed no director takes 
part in discussions relating to their own remuneration and benefits the remuneration committee appointed and received wholly 
independent advice on executive compensation and associated share scheme administration from pwc human resource services
the remuneration committee is formally constituted with written terms of reference with the full remit of the committee role 
described a copy of the terms of reference is available to shareholders on request by writing to the company secretary whose 
contact details are set out on page 105 and on the company’s website wwwstvplctv 
philosophy behind remuneration committee’s approach
the policy is designed to encourage reward and retain the executives and the remuneration committee believes that shareholders’ 
interests are best served by remuneration packages which have a large emphasis on performancerelated pay emphasis on 
performance should encourage executives to focus on delivering the business strategy and by providing meaningful incentives  
to executives ensure that the appropriate balance between fixed and performancerelated pay is maintained
remuneration policy 2011
the company’s remuneration policy approved by shareholders at the extraordinary general meeting in june 2007 is based  
on the following principles to ensure that it is inherently linked to the strategic objectives targets and key performance indicators  
of the business
•  to maintain a competitive package of total compensation commensurate with comparable packages available within other  
similar companies operating in similar sectors
•  to make a significant percentage of potential maximum reward conditional on longterm performance
•  to ensure that the interest of executives are closely aligned with those of the company’s shareholders through the provision  
of equity incentives
• to link reward to the satisfaction of the targeted objectives which are the main drivers of shareholder value
• to be sensitive in determining executives’ remuneration relative to the current economic climate 49
remuneration of executives is linked to a range of business performance measures relating to strategic objectives operational 
targets and performance against the company’s 11 kpi targets progress and performance against these measures is reviewed  
on a periodic basis by the remuneration committee this process ensures that when determining executive remuneration the 
committee takes into account the risk profile of the company and its long term sustainability
the company’s 11 kpis are detailed on pages 32 and 33 of the annual report
 
every year  the remuneration committee reviews whether the remuneration policy remains appropriate for the relevant financial 
year  f actors taken into account by the remuneration committee include
• market conditions affecting the company
• the recruitment market in the company’s sector
• changing market practice
• changing views of institutional shareholders and their representative bodies
•  pay and conditions throughout the company  the remuneration committee has access to information on the pay and conditions 
of other employees in the group when determining the remuneration packages for executive directors the remuneration 
committee actively considers the relationship between general changes to employees pay and conditions and any proposed 
changes in the remuneration packages for executive directors to ensure it can be sufficiently robust in its determinations in  
light of the position of the company as a whole 
components of executive directors’ remuneration
the individual components of the remuneration package for 2011 are outlined below
base salary
the base salary is reviewed annually by the committee when determining the salary of the executives the committee takes  
into consideration
•  the levels of base salary for similar positions with comparable status responsibility and skills in organisations of broadly similar 
size and complexity in particular the median salary levels of those comparable companies within the media sector and the 
comparator group
•  the performance of the individual executive director 
•  the individual executive director’s experience and responsibilities 
•  pay and conditions throughout the company 
base salary levels have not been adjusted since 2007 and the executive directors have proposed to and agreed with the committee 
that base salary levels will remain at current levels in 2012
benefits allowance
executives are entitled to receive a taxable cash allowance in lieu of benefits in kind including car and private medical insurance 
the company actively reviews the levels of benefit received to ensure that they remain market competitive this cash benefits 
allowance is excluded from the calculation of any other benefit provided by the company
performance related bonus plan
the targets for the annual bonus plan are reviewed and agreed by the remuneration committee at the beginning of each financial 
year to ensure that they are appropriate to the current market conditions and position of the company in order to ensure that they 
continue to remain challenging bonus payments are not pensionable 
a performance related bonus plan was operated in 2011 bonus payments are dependent on the achievement of performance 
targets relating to financial and personal performance measures 50
annual report and accounts 2011
directors’ report – corporate governance
remuneration committee report continued
the 2011 performance related bonus plan was designed to
•  ensure a link between achievement of key performance indicators of the business and key financial performance targets  
whilst encouraging a longer term performance focus through a deferred reward component in shares
•  support executives in building up a shareholding in the business through rewards made in both cash and shares
•  ensure that in recognition of the absence of a longterm equity based award in 2011 that there is an appropriate balance  
between shortterm cash based rewards and midlonger term equity based rewards
bonus payments have been triggered in 2011 only in respect of the discretionary element relating to achievement of personal 
performance measures as a result bonus payments at 125 of bonus potential maximum 15 of base salary have been earned 
and will be paid in march 2012 the bonus performance measures and the extent to which these have been satisfied are outlined 
below
2011 performance related bonus plan
performance targets  t arget satisfied bonus payable
group pbt t arget not met 0 
eps t arget not met 0 
operating profit t arget not met 0 
personal objectives
 discretionary payment  
of 125 of this component  
to be awarded 125 
in recognition of the need for restraint in remuneration in recent years the chief executive officer volunteered and subsequently 
agreed with the committee and the board in 2010 that he would not receive any payment of bonus earned in respect of 2010 and 
that this should be deferred for a period of up to 24 months and payable wholly in shares and partially subject to performance 
conditions being met these performance conditions relating to achieving an increase of 10 in eps and group pbt in 2011 relative 
to 2010 have been fulfilled and these deferred bonus payments will be released
the committee has agreed that the 2012 performance related bonus plan will remain based on financial performance targets 
relating to group pbt operating profit and eps bonus potential maximum payments will be a maximum of 100 of base salary 
2011 125 and 50 of bonus payments will become payable upon achievement of performance targets 2011 25 with bonus 
potential maximum being payable upon performance targets being exceeded by 25 2011 25 a straight line mechanism will 
operate between 100 and 125 of budgeted financial performance targets
share incentives
an allemployee share based save as y ou earn sa ye scheme was launched in june 2011 to provide an opportunity for employees 
to participate in the future success of the group under the scheme employees can each save up to £250 per month over a three 
year term at the end of which they have the option to acquire shares priced at a discount on the market value at the date of grant 
approximately 30 of employees took up the invitation and subscribed for a total of 329788 ordinary shares at a price of 123 
pence per share calculated by discounting the middle market quotation on 3 june 2011 by 10
on 29 june 2011 rob woodward and george watt were each granted 7 337 options under the scheme 
no other share based incentive awards were granted in 2011
the remuneration committee has reviewed remuneration arrangements for 2012 and proposes to award an l tip following the 
vesting of the 2009 l tip to ensure that an appropriate balance is maintained between medium and long term incentives  51
dilution
the company operates all of its share arrangements within the abi guidelines on dilution the abi guidelines provide that the 
company can issue a maximum of 10 of its issued share capital in a rolling tenyear period to employees under all its share plans 
in addition of this 10 the company can only issue 5 to satisfy awards under discretionary or executive plans
the following table sets out the current level of dilution against the abi limits for all share plans and discretionary plans principally 
executive plans and sets out the commitments to issue shares made during the financial year reported
maximum current dilution additional dilution during the year in question
10 dilution in ten years 521 148
5 dilution in ten years 437 064
pension
the group operates a defined benefits scheme closed to new members a defined contribution scheme and executives have the 
option to receive a taxable cash allowance in lieu of pension benefits
subject to inland revenue limits the scheme provides members with a pension of two thirds of final basic salary upon reaching 
normal retirement at age 65 the principal features of the pension benefit accrued are noted below these are 
•  the annual accrued pension payable from normal retirement age calculated as if he had left service at the period end 
•  the increase in the accrued pension attributable to service as a director during the year 
•  the transfer value of the accrued benefit at the end of the period calculated in accordance with the actuarial guidance note gn11 
•  the transfer value of the accrued benefit at the end of the previous period calculated in accordance with the actuarial guidance 
note gn11 
•  the increase in the transfer value over the period net of employee contributions 
neither of the executive directors are members of any company pension scheme and both receive a taxable cash allowance  
george watt was a participating member of the scottish and grampian t elevision retirement benefits scheme which is an inland 
revenue approved defined benefit occupational pension scheme until 31 march 2010 when he decided to become a deferred 
member of the scheme 
fixed and v ariable compensation
the chart below demonstrates the balance between fixed and variable performancebased compensation for each executive 
director for the year ended 31 december 2011
rob woodward george watt
56 performance compensation     56 performance compensation
44 fixed compensation      44 fixed compensation
key
fixed compensation is calculated as salary benefits
performance compensation is calculated as bonus available 52
annual report and accounts 2011
directors’ report – corporate governance
directors’ interests in shares
the beneficial interests of the directors and their families in the ordinary shares of the company as of 1 january 2011 and as at  
31 december 2011 were other than in respect of options or other rights to acquire ordinary shares as follows
1 january 2011 31 december 2011 
ordinary  
shares
share  
incentive  
plan
ordinary  
shares
share  
incentive  
plan
executive directors
rob woodward 177097 – 202679 –
george watt 102349 1070 145449 1070
nonexecutive directors
richard findlay 15000 – 15000 –
david shearer 40000 – 50000 –
jamie matheson 12500 – 12500 –
vasa babic 2154496 – – –
matthew peacock 2154496 – – –
michael jackson – – – –
  these shares were held by hanover investors and the interests of both matthew peacock and vasa babic were by reference to the 
same shareholding vasa babic is no longer a partner of hanover investors
executive directors’ contracts 
details of the service contracts of the executive directors of the company are as follows 
name
company  
notice period contract date
unexpired  
term of contract
potential  
termination payment
rob woodward 
chief executive officer 12 months 280207 rolling contract
12 months salary  
and benefits
george watt 
chief financial officer 12 months 270201 rolling contract
12 months salary  
and benefits
all executive directors’ contracts are for a fixed period of one year from date of appointment and will continue thereafter unless 
terminated by at least 12 months’ written notice this arrangement is in line with best corporate practice for listed companies  
in the event of the termination of an executive’s contract salary and benefits will be payable during the notice period there will 
however  be no automatic entitlement to bonus payments or share incentive grants during the period of notice other than where 
normal good leaver provisions apply all executive directors will be expected to mitigate their loss in accordance with general  
legal principles in the event of their cessation of employment the remuneration committee will ensure that there have been  
no unjustified payments for failure on an executive director’s termination of employment there are no special provisions in the 
contracts of employment extending notice periods on a change of control liquidation of the company or cessation of employment 
remuneration committee report continued 53
non executive directors 
the remuneration of the nonexecutive directors is determined by the board based upon recommendations from the chairman  
and chief executive officer or  in the case of the chairman based on recommendations from the senior independent nonexecutive 
director and the chief executive officer and is within the limits set by the articles of association for nonexecutive directors  
the basic fee is paid only in cash nonexecutive directors do not participate in any bonus plan or share incentive programme 
operated by the company and are not entitled to pension contributions or other benefits provided by the company the non
executive directors do not have service contracts but their appointments are for fixedterms of three years subject to the terms  
of the company’s articles of association the companies act and shareholder approval the basis of fees paid to the nonexecutive 
directors is as follows
•  a basic fee of £30000 for carrying out the duties of a nonexecutive director
•  a basic fee of £40000 for carrying out the duties of senior independent nonexecutive  director
•  a fee of £5000 for carrying out the specific duties of sitting on the company’s audit nomination  
and or  remuneration committees
•  an additional fee of £2500 on top of the committee fee to reflect the additional duties involved in chairing that committee
there will be no changes to the fees paid to the nonexecutive directors in 2012
t otal shareholder return performance graph
the graph shows the company’s performance measured by total shareholder return “tsr” compared to the constituents  
of the ftse media index over the last five years
dec 06 dec 05 jun 07 jun 06 dec 07 jun 08 dec 08 jun 09 dec 09 jun 10 dec 10 jun 11 dec 11
20
40
60
80
100
120
stv group plc
ftse small cap media index 54
annual report and accounts 2011
directors’ report – corporate governance
2011 audited information 
the total of directors’ emoluments in the year was £1337 000 2010 £1097 000 
the remuneration of each director  excluding longterm incentive awards during the year ended 31 december 2011 compared with 
2010 is set out in the table below 
basic salaryfees benefits 1
annual performance 
related bonus 2 total
2011  
£000
2010  
£000
2011  
£000
2010  
£000
2011  
£000
2010  
£000
2011  
£000
2010 
£000
executive directors
rob woodward 380 380 92 92 201 – 673 472
george watt 214 214 58 52 113 80 385 346
nonexecutive directors
richard findlay 85 85 – – – – 85 85
david shearer 48 48 – – – – 48 48
matthew peacock 38 38 – – – – 38 38
vasa babic 38 38 – – – – 38 38
jamie matheson 35 35 – – – – 35 35
michael jackson 35 35 – – – – 35 35
t otal £000 873 873 144 314 80 1337 1097
 
1  this is an allowance to cover standard company benefits such as a car and medical insurance in addition this includes  
a taxable cash allowance in lieu of a pension contribution see pension section below for more information
2  under the terms of the 2010 bonus plan bonus is payable in three equal tranches with performance conditions attached to  
the final tranche the first tranche was paid in shares in 2011 the second tranche is payable in shares in 2012 and the final 
tranche is payable in shares in 2013 subject to the fulfilment of performance conditions relating to 2011 financial performance 
which have been achieved in full the chief executive officer has agreed with the board that he will not receive any payment  
of bonus earned in respect of 2010 and that this will be deferred for up to 24 months and paid wholly in shares with financial 
performance conditions relating to future financial performance which have now been met in full applying to twothirds of  
his bonus payment
2010 performance related bonus plan share elements
name date of grant
number of  
bonus shares  
granted in respect  
of 2010 share price vesting date
rob woodward
310311 114919 £124 310312
310311 229838 £124 310313
george watt
310311 64516 £124 310312
310311 64516 £124 310313
vesting subject to satisfaction of 2011 performance conditions which have been met in full see unaudited section of the report
remuneration committee report continued 55
pension entitlements
for further information on pensions refer to the unaudited part of the remuneration report
rob woodward is not a member of any company pension scheme and receives a taxable cash allowance of £7 6000 equivalent  
to 20 of base salary 2010 £7 6000 20 of base salary
george watt was a participating member of the scottish and grampian t elevision retirement benefits scheme until 31 march 2010 
when he became a deferred member of the scheme george watt now receives a taxable cash allowance of £42840 equivalent  
to 20 of base salary 2010 £32130
final salary pension scheme – benefits in scheme
change in  
accrued  
pension over  
the year 1  
£
accrued  
pension at  
31 december  
2011 
£
t ransfer  
value at  
31 december  
2011 2  
£
t ransfer  
value to  
31 december  
2010  
£
change in 
 transfer value  
over the year  
less director’s 
contributions  
£
george watt 806 26801 322108 266570 55538
 
1  pension accruals shown are the amounts that would be paid annually on retirement based on service at the end of the  
current year  
2  transfer values have been calculated in accordance with guidance note gn11 issued by the faculty and institute of actuaries 
the transfer values represent the actuarial liability of the pension plan and not the sum paid or due to an individual
directors’ interests in the company’s share plans 
with the exception of the allemployee save as y ou earn scheme launched in june 2011 refer to unaudited section of report  
no awards were granted under the company’s share plans during 2011 the information disclosed below relates to awards granted  
in prior years
longterm incentive plan
the following awards have been granted under the company’s longterm incentive plans
2008 long t erm incentive plan 
this plan is operated under the rules of the l tip arrangement approved by shareholders on 3 june 2005 the award was granted 
on 11 april 2008 and vested on 11 april 2011
interests  
at 1 january 2011
released  
in year
lapsed  
in year
31 december  
2011
award  
date
release  
date
rob woodward 365452 25582 339870 0 110408 110411
george watt 206000 14420 191580 0 110408 110411 56
annual report and accounts 2011
directors’ report – corporate governance
performance conditions of 2008 award
50 of the awards are subject to comparative tsr performance “tsr award” 50 of the tsr award are subject to the company’s 
performance against the competitor group and fifty percent against the comparator group fifty percent of the awards are subject 
to the average annual roce performance of the company 
competitor tsr group comparator tsr group
average annual  
roce performance
position
  
of award quartile
  
of award
group  
roce
  
of award
position 5 0 median 0 10 10
position 4 25 median 25 15 50
position 3 50 upper quartile 100 20 100
position 2 75
position 1 100
 straight line release between these points
competitor group
sky plc chrysalis plc emap plc itv plc maiden group plc ulster t elevision plc
comparator group
aegis group plc sky plc chrysalis plc emap plc euromoney institutional investor plc future network plc ite group plc itv plc 
johnston press plc maiden group plc photome international plc st ives plc tf informa plc t aylor nelson sofres plc ulster 
t elevision plc united business media plc
2009 long t erm incentive plan
this award was approved by shareholders on 22 april 2009 the award was granted on 7 may 2009
number of units 
awarded under 
2009 l tip
award  
date
release  
date
rob woodward 330000 70509 70512
george watt 190000 70509 70512
the total number of units awarded to all participants was one million units
in march 2010 the committee approved minor changes to the l tip rules to allow a proportion of the value of awards to be provided 
under an hmrc approved option plan structure in addition participants were also able to acquire interests over shares under a joint 
ownership arrangement which also provides the ability to receive part of the award value
it should be noted that the gross potential benefit to participants and the dilutive cost to shareholders under the 2009 l tip  
remains unchanged 
the company employee benefit t rust facilitated the operation of the joint ownership arrangement by assisting participants in the 
acquisition of the interests the committee believes the cost to the company of the joint ownership arrangement is more than 
outweighed by the savings made by not providing an l tip award during 2010 
remuneration committee report continued 57
performance conditions of 2009 l tip
any benefit payable is capped at the potential benefit the executive would have received under “the stv group plc 2005 long
t erm incentive plan” the “2005 l tip” in practice it is likely that for the same performance the 2009 l tip will deliver significantly 
less benefit
it will also be a requirement of the plan that participants will retain 50 of any post–tax gains under the 2009 l tip until they build 
up a shareholding of at least one times salary
participants in the 2009 l tip have been granted awards of units which have no value on the date of grant but have the potential  
to convert into nilcost options at the end of a three year performance period depending on the achievement of the following 
conditions 
•  no benefit is provided at all unless the share price is greater than 70p at this point a percentage of the additional value created  
is used to create a pool in line with the following table
threshold prices incentive value
up to 70p 0
70p to 100p 3 of excess of 70p
100p to 150p 3 of 70p100p  5 of excess of 100p
greater than 150p 3 of 70p100p  5 of 100p150p  7 5 of excess of 150p
•  the units will only convert into nil cost options if the comparative total shareholder return “tsr and return on capital employed 
“roce” targets used in conjunction with the 2005 l tip are satisfied 
•  the value of units converting is subject to a cap to the value that would have been delivered if participants had been granted  
an award under the 2005 l tip 
the maximum incentive value will be adjusted to reflect the extent to which the tsr and roce targets have been achieved
part 1  50 of the maximum incentive value may be adjusted based on the extent to which the tsr targets are achieved over  
the three year performance period as set out below
tsr performance of the company against comparator group maximum incentive value vesting percentage 
median 0
median 125
upper quartile 50
straight line vesting between points
part 2  the remaining 50 of the maximum incentive value may be adjusted based on the extent to which the roce targets are 
achieved over the three year performance period
group roce performance maximum incentive value vesting percentage
10 0
10 5
20 25
30 50
straight line vesting between points 58
annual report and accounts 2011
directors’ report – corporate governance
basis of performance condition selection and measurement
the remuneration committee determines whether the performance conditions for share awards or options are satisfied  
where the performance requirements are based on roce the committee will use the principles behind the audited figures  
disclosed in the company’s financial statements and may take advice from independent advisors as to whether any adjustments  
are required to ensure consistency in accordance with the terms of the performance conditions where the performance measure  
is t otal shareholder return mercer human resources services shall calculate the tsr in accordance with the rules of the l tip  
and signoff these figures prior to the release of any award
by order of the board 
vasa babic
remuneration committee chairman 
pacific quay
glasgow g51 1pq
22 february 2012 
remuneration committee report continued 59
co n te n t s
a cco u n t s
60 	 	 s tv 	 gr oup 	 plc 	 c ons olidat ed 	 financial 	 s t at emen t s	
– 	 independen t 	 a udit or s ’ 	 r epor t	
62 	 c ons olidat ed 	 inc ome 	 s t at emen t
62 	 	 c ons olidat ed 	 s t at emen t	 	
o f 	 c ompr ehensiv e 	 inc ome
63 	 c ons olidat ed 	 b alanc e 	 shee t
64 	 	 c ons olidat ed 	 s t at emen t 	 o f 	 change s 	 in 	 e quit y
65 	 	 c ons olidat ed 	 s t at emen t 	 o f 	 c ash 	 flo w s
66 	 no t e s 	 t o 	 the 	 financial 	 s t at emen t s
94 	 	 s tv 	 gr oup 	 plc 	 c omp an y 	 financial 	 s t at emen t s	
– 	 independen t 	 a udit or s ’ 	 r epor t
96 	 c omp an y 	 b alanc e 	 shee t
97 	 s t at emen t 	 o f 	 t o t al 	 r ec ognis ed 	 gains 	 and 	 l o s s e s
98 	 	 no t e s 	 t o 	 the 	 c omp an y 	 financial 	 s t at emen t s
104 	 	 fiv e– y e ar 	 s ummary
shar eholder s
105 	 shar eholder 	 in f ormation
107 	 no tic e 	 o f 	 mee ting annual report and accounts 2011
a cco u n t s 60
w e 	 ha v e 	 audit ed 	 the 	 c ons olidat ed 	 financial 	 s t at emen t s 	 o f 	 s tv 	 gr oup 	 plc 	 f or 	 the 	 y e ar 	 ended 	 3 1 	 dec ember 	 2 011 	 which 	 c ompris e 	 	
t h e 	 c o n s o l i d a t e d 	 i n c o m e 	 s t a t e m e n t  	 t h e 	 c o n s o l i d a t e d 	 s t a t e m e n t 	 o f 	 c o m p r e h e n s i v e 	 i n c o m e  	 t h e 	 c o n s o l i d a t e d 	 b a l a n c e 	 s h e e t 	 	
the 	 c ons olidat ed 	 s t at emen t 	 o f 	 change s 	 in 	 e quit y  	 the 	 c ons olidat ed 	 s t at emen t 	 o f 	 c ash 	 flo w s 	 and 	 the 	 r elat ed 	 no t e s  	 t he 	 financial 	
r epor ting 	 fr ame w ork 	 that 	 has 	 been 	 applied 	 in 	 their 	 pr ep ar ation 	 is 	 applic able 	 la w 	 and 	 in t ernational 	 financial 	 r epor ting 	 s t andar ds	
ifrs s  	 as 	 adop t ed 	 b y 	 the 	 e ur ope an 	 union
r e spectiv e 	 r e sponsibilitie s 	 o f 	 dir ect or s 	 and 	 audit or s
as 	 e xplained 	 mor e 	 fully 	 in 	 the 	 s t at emen t 	 o f 	 dir ect or s ’ 	 r e sponsibilitie s 	 s e t 	 out 	 on 	 p age 	 2 9  	 the 	 dir ect or s 	 ar e 	 r e sponsible 	 f or 	 the	
pr ep ar ation 	 o f 	 the 	 c ons olidat ed 	 financial 	 s t at emen t s 	 and 	 f or 	 being 	 s atis fied 	 that 	 the y 	 giv e 	 a 	 true 	 and 	 f air 	 vie w  	 our 	 r e sponsibilit y 	 	
is 	 t o 	 audit 	 and 	 e xpr e s s 	 an 	 opinion 	 on 	 the 	 c ons olidat ed 	 financial 	 s t at emen t s 	 in 	 ac c or danc e 	 with 	 applic able 	 la w 	 and 	 in t ernational 	
s t andar ds 	 on 	 a uditing 	 uk 	 and 	 ir eland 	 t ho s e 	 s t andar ds 	 r equir e 	 us 	 t o 	 c omply 	 with 	 the 	 a uditing 	 pr actic e s 	 b o ar d’ s 	 e thic al	 	
s t a n d a r d s 	 f o r 	 a u d i t o r s 	
t his 	 r epor t  	 including 	 the 	 opinions  	 has 	 been 	 pr ep ar ed 	 f or 	 and 	 only 	 f or 	 the 	 c omp an y’ s 	 member s 	 as 	 a 	 body 	 in 	 ac c or danc e 	 with	
chap t er 	 3 	 o f 	 p ar t 	 16 	 o f 	 the 	 c omp anie s 	 a ct 	 2 006 	 and 	 f or 	 no 	 o ther 	 purpo s e  	 w e 	 do 	 no t  	 in 	 giving 	 the s e 	 opinions  	 ac c ep t 	 or 	 as sume	
r e sponsibilit y 	 f or 	 an y 	 o ther 	 purpo s e 	 or 	 t o 	 an y 	 o ther 	 per s on 	 t o 	 whom 	 this 	 r epor t 	 is 	 sho wn 	 or 	 in t o 	 who s e 	 hands 	 it 	 ma y 	 c ome 	 s a v e	
wher e 	 e xpr e s sly 	 agr eed 	 b y 	 our 	 prior 	 c ons en t 	 in 	 writing
s c o p e 	 o f 	 t h e 	 a u d i t 	 o f 	 t h e 	 fi n a n c i a l 	 s t a t e m e n t s	
an 	 audit 	 in v olv e s 	 ob t aining 	 e videnc e 	 about 	 the 	 amoun t s 	 and 	 dis clo sur e s 	 in 	 the 	 financial 	 s t at emen t s 	 suf ficien t 	 t o 	 giv e 	 r e as onable 	
as sur anc e 	 that 	 the 	 financial 	 s t at emen t s 	 ar e 	 fr ee 	 fr om 	 mat erial 	 mis s t at emen t  	 whe ther 	 c aus ed 	 b y 	 fr aud 	 or 	 err or  	 t his 	 include s 	 an 	
as s e s smen t 	 o f  	 whe ther 	 the 	 ac c oun ting 	 policie s 	 ar e 	 appr opriat e 	 t o 	 the 	 gr oup ’ s 	 cir c ums t anc e s 	 and 	 ha v e 	 been 	 c onsis t en tly 	 applied	
and 	 adequat ely 	 dis clo s ed 	 the 	 r e as onablene s s 	 o f 	 signific an t 	 ac c oun ting 	 e s timat e s 	 made 	 b y 	 the 	 dir ect or s 	 and 	 the 	 o v er all 	
pr e s en t ation 	 o f 	 the 	 financial 	 s t at emen t s  	 in 	 addition 	 w e 	 r e ad 	 all 	 the 	 financial 	 and 	 non–financial 	 in f ormation 	 in 	 the 	 annual 	 r epor t 	
and 	 a c c oun t s 	 t o 	 iden tif y 	 mat erial 	 inc onsis t encie s 	 with 	 the 	 audit ed 	 financial 	 s t at emen t s  	 if 	 w e 	 bec ome 	 a w ar e 	 o f 	 an y 	 app ar en t 	
mat erial 	 mis s t at emen t s 	 or 	 inc onsis t encie s 	 w e 	 c onsider 	 the 	 implic ations 	 f or 	 our 	 r epor t 
opinion 	 on 	 financial 	 s t at emen t s 	
in 	 our 	 opinion 	 the 	 c ons olidat ed 	 financial 	 s t at emen t s
•	 	 giv e 	 a 	 true 	 and 	 f air 	 vie w 	 o f 	 the 	 s t at e 	 o f 	 the 	 gr oup ’ s 	 af f air s 	 as 	 at 	 3 1 	 dec ember 	 2 011 	 and 	 o f 	 it s 	 pr o fit 	 and 	 c ash 	flo w s 	 f or	 	
t h e 	 y e a r 	 t h e n 	 e n d e d 	
•	 ha v e 	 been 	 pr operly 	 pr ep ar ed 	 in 	 ac c or danc e 	 with 	 ifrs s 	 as 	 adop t ed 	 b y 	 the 	 e ur ope an 	 union 	 and	
• 	 h a v e 	 b e e n 	 p r e p a r e d 	 i n 	 a c c o r d a n c e 	 w i t h 	 t h e 	 r e q u i r e m e n t s 	 o f 	 t h e 	 c o m p a n i e s 	 a c t 	 2 0 0 6 	 a n d 	 a r t i c l e 	 4 	 o f 	 t h e 	 l a s 	 r e g u l a t i o n 	
s tv 	 gr oup 	 plc 	 c ons olidat ed 	 financial 	 s t at emen t s
independent auditors’ report to the members of stv group plc 61
opinion 	 on 	 o ther 	 mat t er s 	 pr e s cribed 	 b y 	 the 	 c omp anie s 	 a ct 	 2 006	
in 	 our 	 opinion 	 the 	 in f ormation 	 giv en 	 in 	 the 	 dir ect or s ’ 	 r epor t 	 f or 	 the 	 financial 	 y e ar 	 f or 	 which 	 the 	 c ons olidat ed 	 financial 	 	
s t at emen t s 	 ar e 	 pr ep ar ed 	 is 	 c onsis t en t 	 with 	 the 	 c ons olidat ed 	 financial 	 s t at emen t s 
mat t er s 	 on 	 which 	 w e 	 ar e 	 r equir ed 	 t o 	 r eport 	 b y 	 e x c ep tion
w e 	 h a v e 	 n o t h i n g 	 t o 	 r e p o r t 	 i n 	 r e s p e c t 	 o f 	 t h e 	 f o l l o w i n g 	
u n d e r 	 t h e 	 c o m p a n i e s 	 a c t 	 2 0 0 6 	 w e 	 a r e 	 r e q u i r e d 	 t o 	 r e p o r t 	 t o 	 y o u 	 i f  	 i n 	 o u r 	 o p i n i o n 	
•	 c er t ain 	 dis clo sur e s 	 o f 	 dir ect or s ’ 	 r emuner ation 	 specified 	 b y 	 la w 	 ar e 	 no t 	 made 	 or
•	 w e 	 ha v e 	 no t 	 r ec eiv ed 	 all 	 the 	 in f ormation 	 and 	 e xplanations 	 w e 	 r equir e 	 f or 	 our 	 audit 
under 	 the 	 lis ting 	 r ule s 	 w e 	 ar e 	 r equir ed 	 t o 	 r e vie w
•	 the 	 dir ect or s ’ 	 s t at emen t  	 s e t 	 out 	 on 	 p age 	 2 9  	 in 	 r elation 	 t o 	 going 	 c onc ern 	 and	
•	 	 the 	 p ar t 	 o f 	 the 	 c orpor at e 	 go v ernanc e 	 s t at emen t 	 r elating 	 t o 	 the 	 c omp an y’ s 	 c omplianc e 	 with 	 the 	 nine 	 pr o visions	 	
o f 	 t h e 	 u k 	 c o r p o r a t e 	 g o v e r n a n c e 	 c o d e 	 s p e c i fi e d 	 f o r 	 o u r 	 r e v i e w 	
•	 c er t ain 	 elemen t s 	 o f 	 the 	 r epor t 	 t o 	 shar eholder s 	 b y 	 the 	 b o ar d 	 on 	 dir ect or s ’ 	 r emuner ation
other 	 mat t er
w e 	 ha v e 	 r epor t ed 	 s ep ar at ely 	 on 	 the 	 p ar en t 	 c omp an y 	 financial 	 s t at emen t s 	 o f 	 s tv 	 gr oup 	 plc 	 f or 	 the 	 y e ar 	 ended 	 3 1 	 dec ember 	 2 011 	
and 	 on 	 the 	 in f ormation 	 in 	 the 	 r emuner ation 	 c ommit t ee 	 r epor t 	 that 	 is 	 de s cribed 	 as 	 ha ving 	 been 	 audit ed
alan 	 w ils on 	  s enior 	 s t at ut or y 	 a udit or 
f or 	 and 	 on 	 behalf 	 o f 	 pric e w at erhous ec ooper s 	 llp
char t er ed 	 a c c oun t an t s 	 and 	 s t at ut ory 	 a udit or s
glas go w
2 3 	 f ebruary 	 2 012 annual report and accounts 2011
a cco u n t s 62
2 011 2 010
	
	
n o te
underlying	
r e s u l t s	 	
£m
ex c ep tional	
it ems	
£m
r e s u l t s	 	
f or 	 y e ar	 	
£m
underlying	
r e sult s 	
£m
ex c ep tional	
it ems	
£m
r e sult s	 	
f or 	 y e ar 	
£m
c on tinuing 	 oper ations
r e v enue 5 1020 – 1020 1048 –  1048 
ne t 	 oper ating 	 e xpens e s 	 be f or e 	 e x c ep tional 	 c o s t s 870 –  870 904 –  904
litigation 	 mat t er s 8 –  135 135 –  35 35
c o s t 	 o f 	 change 8 –  14 14 –  09 09
w rit edo wn 	 o f 	 in v en t ory 8 –  – –  27 27
ne t 	 oper ating 	 e xpens e s 870 149 1019 904 71 975
  
oper ating 	 pr o fit 150  149 01  144  71 73 
financ e 	 inc ome 02  –  02  02 –  02 
financ e 	 c o s t s 	 – 	 borr o wings 9 25 –  25 25 15 40
																										 – 	 ia s 	 19 	 pension 9 13  –  13  04 –  04 
 10 –  10 19 15 34
pr o fit lo s s  	 be f or e 	 t ax 140  149 09 125  86 39 
t ax 	 cr edit 11 – 15  15 – 14  14 
pr o fit 	 f or 	 the 	 y e ar 	 fr om 	 c on tinuing 	 oper ations 140  134 06  125  72 53 
dis c on tinued 	 oper ations
pr o fit 	 f or 	 the 	 y e ar 	 fr om 	 dis c on tinued 	 oper ations 10 –  –  – – – – 
pr o fit 	 f or 	 the 	 y e ar 140  134 06  125  72 53 
e a r n i n g s 	 p e r 	 s h a r e	
f r om 	 c on tinuing 	 oper ations
– 	 b asic 13 380p 16p 343p 146p
– 	 dilut ed 13 361p 15p 329p 139p
f r om 	 c on tinuing 	 and 	 dis c on tinued 	 oper ations
– 	 b asic 13 380p 16p 343p 146p
– 	 dilut ed 13 361p 15p 329p 139p
 the 2010 basic eps has been restated see note 13 
t he 	 no t e s 	 on 	 p age s 	 66 	 t o 	 9 3 	 ar e 	 an 	 in t egr al 	 p ar t 	 o f 	 the s e 	 c ons olidat ed 	 financial 	 s t at emen t s 
c ons olidat ed 	 inc ome 	 s t at emen t
y ear ended 31 december 2011
c ons olidat ed 	 s t at emen t 	 o f 	 c ompr ehensiv e 	 inc ome
y ear ended 31 december 2011
n o te
2 011
£m
2 010
£m
pr o fit 	 f or 	 the 	 y e ar 06  53 
a ct uarial 	 lo s s  gain 	 on 	 po s t 	 emplo ymen t 	 bene fit 	 obligations 29 135 91 
de f err ed 	 t ax 	 cr edit  char ge  21 29  29
other 	 c ompr ehensiv e 	  e xpens e  inc ome 	 f or 	 the 	 y e ar 	 ne t 	 o f 	 t ax 106 62 
t o t al 	 c ompr ehensiv e 	  e xpens e  inc ome 	 f or 	 the 	 y e ar 100 115  63
n o te
2 011
£m
2 010
£m
non–c urr en t 	 as s e t s
goodwill 	 and 	 o ther 	 in t angible 	 as s e t s 14 79  79 
pr oper t y  	 plan t 	 and 	 equipmen t 15 95  101 
de f err ed 	 t ax 	 as s e t 21 155  111 
 329  291 
       
c urr en t 	 as s e t s
in v en t orie s 16 291  358 
t r ade 	 and 	 o ther 	 r ec eiv able s 17 242  264 
c ash 	 and 	 c ash 	 equiv alen t s 18 05  76 
shor t 	 t erm 	 b ank 	 depo sit s 18 – 01 
 538  699 
t o t al 	 as s e t s 867 990
e quit y 	 at tribut able 	 t o 	 o wner s 	 o f 	 the 	 p ar en t
or dinary 	 shar e s 23 195  192 
shar e 	 pr emium	 23 1120  1114 
mer ger 	 r e s erv e 1734  1734 
other 	 r e s erv e 06  08 
a c c umulat ed 	 lo s s e s 3352 3246
t o t al 	 equit y 297 198
non–c urr en t 	 liabilitie s
b orr o wings	 20 – 549 
t r ade 	 and 	 o ther 	 p a y able s 19 07  25 
r e tir emen t 	 bene fit 	 obligation 29 309  229 
pr o visions	 22 25  31 
 341  834 
c urr en t 	 liabilitie s
b orr o wings	 20 550  50 
t r ade 	 and 	 o ther 	 p a y able s 19 256  290 
pr o visions	 22 17  14 
 823  354 
t o t al 	 liabilitie s 1164  1188 
t o t al 	 equit y 	 and 	 liabilitie s 867  990 
t he 	 no t e s 	 on 	 p age s 	 66 	 t o 	 9 3 	 ar e 	 an 	 in t egr al 	 p ar t 	 o f 	 the s e 	 c ons olidat ed 	 financial 	 s t at emen t s 	 	
t he 	 c ons olidat ed 	 financial 	 s t at emen t s 	 on 	 p age s 	 6 2 	 t o 	 9 3 	 w er e 	 appr o v ed 	 b y 	 the 	 b o ar d 	 on 	 2 3 	 f ebruary 	 2 012 	 and 	 w er e 	 signed 	 	
on 	 it s 	 behalf 	 b y 	 	 	
	
r ob 	 w oodw ar d	 geor ge 	 w at t	 	 	
chie f 	 ex ec utiv e	 chie f 	 financial 	 of fic er			
c ons olidat ed 	 b alanc e 	 shee t
at 31 december 2011 annual report and accounts 2011
a cco u n t s 64
e quit y 	 at tribut able 	 t o 	 o wner s 	 o f 	 the 	 p ar en t
or dinar y
shar e s
£m
shar e
pr emium
£m
mer ger
r ese rv e
£m
other	
r ese rv e
£m
a c c umulat ed
l os ses
£m
total
e quit y
£m
b alanc e 	 at 	 1 	 j anuar y 	 2 011 192  1114  1734  08  3246 198
pr o fit 	 f or 	 the 	 y e ar – – – –  06  06 
a ct uarial 	 lo s s – – – –  135 135
de f err ed 	 t ax 	 ther eon – – – –  29  29 
t o t al 	 c ompr ehensiv e 	 e xpens e 	 f or 	 the 	 y e ar – – – –  100 100
own 	 shar e s 	 is sued 	 and 	 ac quir ed 03  06 – –  09 – 
own 	 shar e s 	 a w ar ded – – – –  03  03 
e quit y –s e t tled 	 shar e 	 b as ed 	 p a ymen t s – – –  02 –  02
b alanc e 	 at 	 3 1 	 dec ember 	 2 011 195  1120  1734  06  3352 297
b alanc e 	 at 	 1 	 j anuar y 	 2 010 183  1113  1734  05  3354 319
pr o fit 	 f or 	 the 	 y e ar – – – –  53  53 
a ct uarial 	 gain – – – –  91  91 
de f err ed 	 t ax 	 ther eon – – – –  29 29
t o t al 	 c ompr ehensiv e 	 inc ome 	 f or 	 the 	 y e ar – – – –  115  115 
own 	 shar e s 	 is sued 	 and 	 ac quir ed 09  01 – –  10 – 
own 	 shar e s 	 a w ar ded – – – –  03  03 
e quit y –s e t tled 	 shar e 	 b as ed 	 p a ymen t s – – –  03 –  03 
b alanc e 	 at 	 3 1 	 dec ember 	 2 010 192  1114  1734  08  3246 198
c ons olidat ed 	 s t at emen t 	 o f 	 change s 	 in 	 e quit y
y ear ended 31 december 2011 65
n o te
2 011	
£m
2 010	 	
£m
oper ating 	 activitie s
c ash 	 gener at ed 	 b y 	 oper ations 24 64  63 
in t er e s t 	 p aid 29 34
p ension 	 de ficit 	 funding 	 – 	 r ec o v ery 	 plan 	 p a ymen t 42 37
ne t 	 c ash 	 us ed 	 b y 	 oper ating 	 activitie s 07 08
in v e s ting 	 activitie s
in t er e s t 	 r ec eiv ed 01  02 
pur chas e 	 o f 	 pr oper t y  	 plan t 	 and 	 equipmen t 16 08
ne t 	 c ash 	 us ed 	 b y 	 in v e s ting 	 activitie s 15 06
financing 	 activitie s
r ele as e 	 o f 	 c ash 	 on 	 depo sit – 04 
ne t 	 borr o wings 	 r ep aid 49 90
ne t 	 c ash 	 us ed 	 b y 	 financing 	 activitie s 49 86
ne t 	 decr e as e 	 in 	 c ash 	 and 	 c ash 	 equiv alen t s 71 100
c ash 	 and 	 c ash 	 equiv alen t s 	 at 	 beginning 	 o f 	 y e ar 76  176 
c ash 	 and 	 c ash 	 equiv alen t s 	 at 	 end 	 o f 	 y e ar 24 05  76 
although 	 no t 	 r equir ed 	 under 	 ifrs 	 the 	 dir ect or s 	 ha v e 	 pr o vided 	 the 	 f ollo wing 	 r ec onciliation 	 o f 	 ne t 	 deb t 	 f or 	 fur ther 	 clarit y 	 	
ne t 	 deb t 	 r epr e s en t s 	 gr oup 	 borr o wings 	 le s s 	 c ash 	 and 	 c ash 	 equiv alen t s 	 and 	 shor t 	 t erm 	 depo sit s 
r ec onciliation 	 o f 	 mo v emen t 	 in 	 ne t 	 deb t
y ear ended 31 december 2011
n o te
2 011	
£m
2 010	
£m
opening 	 ne t 	 deb t 522 494
ne t 	 decr e as e 	 in 	 c ash 	 and 	 c ash 	 equiv alen t s 71 100
mo v emen t 	 in 	 deb t 	 financing 49  76 
mo v emen t 	 in 	 e s cr o w 	 c ash 01 04
clo sing 	 ne t 	 deb t 24 545 522
c ons olidat ed 	 s t at emen t 	 o f 	 c ash 	 flo w s	 	
y ear ended 31 december 2011 annual report and accounts 2011
a cco u n t s 66
1	 gener al 	 in f ormation
s tv 	 gr oup 	 plc 	 “the 	 c omp an y” 	 is 	 a 	 c omp an y 	 which 	 is 	 lis t ed 	 on 	 the 	 l ondon 	 s t ock 	 ex change 	 and 	 is 	 inc orpor at ed 	 and 	 domiciled	
in 	 the 	 uk 	 t he 	 addr e s s 	 o f 	 the 	 r egis t er ed 	 o f fic e 	 is 	 p acific 	 qua y  	 glas go w  	 g5 1 	 1pq  	 t he 	 nat ur e 	 o f 	 the 	 gr oup ’ s 	 oper ations 	 and 	 it s 	
princip al 	 activitie s 	 ar e 	 s e t 	 out 	 in 	 no t e 	 5 	 	 	 	 	 	 	 	 	 	
2	 a dop tion 	 o f 	 ne w 	 and 	 r e vis ed 	 s t andar ds
t her e 	 ar e 	 no 	 ne w 	 s t andar ds  	 amendmen t s 	 t o 	 s t andar ds 	 or 	 in t erpr e t ations 	 mandat ory 	 f or 	 the 	 fir s t 	 time 	 f or 	 the 	 financial 	 y e ar 	
beginning 	 1 	 january 	 2 011 	 which 	 ar e 	 r ele v an t 	 t o 	 the 	 gr oup ’ s 	 r e sult s 
t he 	 f ollo wing 	 ne w 	 s t andar ds  	 amendmen t s 	 t o 	 s t andar ds 	 or 	 in t erpr e t ations 	 ar e 	 mandat ory 	 f or 	 the 	 fir s t 	time 	 f or 	 the 	 financial 	
y e ar 	 beginning 	 1 	 january 	 2 011 	 and 	 ar e 	 no t 	 r ele v an t 	 t o 	 the 	 gr oup 	 or 	 had 	 no 	 mat erial 	 imp act 	 on 	 the 	 financial 	 s t at emen t s 
ia s 	 2 4 	  amendmen t 	 	 r elat ed 	 p ar t y 	 dis clo sur e s
ia s1 	  amendmen t 	 	 pr e s en t ation 	 o f 	 financial 	 s t at emen t s
ia s 	 34 	  amendmen t 	 	 in t erim 	 financial 	 r epor ting
i f r s 	 1 	  a m e n d m e n t 	 	 	 fir s t 	 time 	 adop tion 	 – 	 in t erim 	 in f ormation 	 deemed 	 c o s t 	 e x emp tion 	 and 	 r at e 	 r egulat ed 	 en titie s
ifrs 	 7 	  amendmen t 	 	 nat ur e 	 and 	 e xt en t 	 o f 	 risk s 	 arising 	 fr om 	 financial 	 ins trumen t s	 	 	 	 	
ifrs 	 7 	  amendmen t 	 	 t r ans f er s 	 o f 	 financial 	 as s e t s
ifric 	 13 	  amendmen t 	 	 c us t omer 	 lo y alt y 	 pr ogr amme s 	 – 	 f air 	 v alue	 	 	 	 	 	
i f r i c 	 1 4 	  a m e n d m e n t  	 	 ia s 	 19 	 – 	 the 	 limit 	 on 	 a 	 de fined 	 bene fit 	 as s e t  	 minimum 	 funding 	 r equir emen t s 	 and 	 their 	 in t er action	 	
a t 	 the 	 dat e 	 o f 	 authoris ation 	 o f 	 the s e 	 financial 	 s t at emen t s  	 the 	f ollo wing 	 s t andar ds 	 and 	 in t erpr e t ations 	 which 	 ha v e 	 no t 	 y e t 	 been	
applied 	 t o 	 the s e 	 financial 	 s t at emen t s 	 w er e 	 in 	 is sue 	 but 	 no t 	 y e t 	 e f f ectiv e	 	 	 	 	 	 	
ifrs 	 9	 	 	 financial 	 ins trumen t s 	 clas sific ation 	 and 	 me asur emen t	 	 	 	 	
ifrs 	 10	 	 	 c ons olidation 	 financial 	 s t at emen t s	 	 	 	 	 	
ifrs 	 11	 	 	 join t 	 arr angemen t s	 	 	 	 	 	
ifrs 	 12	 	 	 dis clo sur e s 	 o f 	 in t er e s t s 	 in 	 o ther 	 en titie s	 	 	 	 	 	
ifrs 	 13	 	 	 f air 	 v alue 	 me asur emen t	 	 	 	 	 	
ia s 	 2 7 	  amendmen t s 	 	 s ep ar at e 	 financial 	 s t at emen t s	 	 	 	 	 	
ia s 	 2 8 	  amendmen t s 	 	 in v e s tmen t s 	 in 	 as s ociat e s 	 and 	 join t 	 v en t ur e s	 	 	 	 	 	
ia s 	 12 	  amendmen t s 	 	 de f err ed 	 t ax 	 r ec o v ery 	 o f 	 underlying 	 as s e t s	 	 	 	 	 	
ia s 	 19 	  amendmen t s 	 	 emplo y ee 	 bene fit s	 	 	 	 	 	
											
t he 	 dir ect or s 	 do 	 no t 	 e xpect 	 that 	 the 	 adop tion 	 o f 	 the s e 	 s t andar ds 	 and 	 in t erpr e t ations 	 in 	 fut ur e 	 periods 	 will 	 ha v e 	 a 	 mat erial	
imp act 	 on 	 the 	 financial 	 s t at emen t s 	 o f 	 the 	 gr oup 	 	 	 	 	 	 	 	 	
	
3  				 signific an t 	 ac c oun ting 	 policie s	 	 	 	 	 	 	 	 	
t h e 	 p r i n c i p a l 	 a c c o u n t i n g 	 p o l i c i e s 	 a p p l i e d 	 i n 	 t h e 	 p r e p a r a t i o n 	 o f 	 t h e s e 	 c o n s o l i d a t e d 	 fi n a n c i a l 	 s t a t e m e n t s 	 a r e 	 s e t 	 o u t 	 b e l o w 	 	
t he s e 	 policie s 	 ha v e 	 been 	 c onsis t en tly 	 applied 	 t o 	 all 	 the 	 y e ar s 	 pr e s en t ed 	 unle s s 	 o therwis e 	 s t at ed	 	 	 	 	
 basis of preparation          
t he 	 c ons olidat ed 	 financial 	 s t at emen t s 	 ha v e 	 been 	 pr ep ar ed 	 in 	 ac c or danc e 	 with 	 in t ernational 	 financial 	 r epor ting 	 s t andar ds 	
ifrs s  	 as 	 adop t ed 	 b y 	 the 	 e ur ope an 	 union 	 eu 	 ifric 	 in t erpr e t ations 	 and 	 the 	 c omp anie s 	 a ct 	 2 006 	 applic able 	 t o 	 c omp anie s	
r epor ting 	 under 	 ifrs  	 t he 	 financial 	 s t at emen t s 	 ha v e 	 been 	 pr ep ar ed 	 under 	 the 	 his t oric al 	 c o s t 	 c on v en tion 	 and 	 on 	 a 	 going 	
c onc ern 	 b asis  		 	 	 	 	 	 	 	 	 	 	
t he 	 pr ep ar ation 	 o f 	 financial 	 s t at emen t s 	 in 	 c on f ormit y 	 with 	 ifrs 	 r equir e s 	 the 	 us e 	 o f 	 c er t ain 	 critic al 	 ac c oun ting 	 e s timat e s  	 it 	 als o 	
r equir e s 	 managemen t 	 t o 	 e x er cis e 	 it s 	 judgemen t 	 in 	 the 	 pr oc e s s 	 o f 	 applying 	 the 	 gr oup ’ s 	 ac c oun ting 	 policie s  	 t he 	 ar e as 	 in v olving	
a 	 higher 	 degr ee 	 o f 	 judgemen t 	 or 	 c omple xit y  	 or 	 ar e as 	 wher e 	 as sump tions 	 and 	 e s timat e s 	 ar e 	 signific an t 	 t o 	 the 	 c ons olidat ed 	
financial 	 s t at emen t s 	 ar e 	 dis clo s ed 	 in 	 no t e 	 4 	
 
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
for the year ended 31 december 2011 67
 basis of consolidation          
t he 	 c ons olidat ed 	 financial 	 s t at emen t s 	 inc orpor at e 	 the 	 financial 	 s t at emen t s 	 o f 	 the 	 c omp an y 	 and 	 en titie s 	 c on tr olled 	 b y 	 the 	
c omp an y 	 it s 	 sub sidiarie s  	 up 	 t o 	 3 1 	 dec ember 	 e ach 	 y e ar  		 c on tr ol 	 is 	 achie v ed 	 wher e 	 the 	 c omp an y 	 has 	 the 	 po w er 	 t o 	 go v ern	 	
the 	 financial 	 and 	 oper ating 	 policie s 	 o f 	 an 	 en tit y 	 s o 	 as 	 t o 	 ob t ain 	 bene fit s 	 fr om 	 it s 	 activitie s 	 	 	 	 	
	
t he 	 r e sult s 	 o f 	 sub sidiarie s 	 ac quir ed 	 or 	 dispo s ed 	 o f 	 during 	 the 	 y e ar 	 ar e 	 included 	 in 	 the 	 c ons olidat ed 	 inc ome 	 s t at emen t 	 fr om	 	
the 	 e f f ectiv e 	 dat e 	 o f 	 ac quisition 	 or 	 up 	 t o 	 the 	 e f f ectiv e 	 dat e 	 o f 	 dispo s al 	 as 	 appr opriat e  	 w her e 	 nec e s s ary  	 adjus tmen t s 	 ar e	 	
made 	 t o 	 the 	 financial 	 s t at emen t s 	 o f 	 sub sidiarie s 	 t o 	 bring 	 the	 ac c oun ting 	 policie s 	 us ed 	 in 	 line 	 with 	 tho s e 	 us ed 	 b y 	 the 	 gr oup	 	
on 	 c ons olidation 	 all 	 in tr a–gr oup 	 tr ans actions  	 b alanc e s  	 inc ome 	 and 	 e xpens e s 	 ar e 	 eliminat ed 	 on 	 c ons olidation	 	 	
							
on 	 ac quisition 	 the 	 as s e t s 	 and 	 liabilitie s 	 and 	 c on tingen t 	 liabilitie s 	 o f 	 a 	 sub sidiary 	 ar e 	 me asur ed 	 at 	 their 	 f air 	 v alue s 	 at 	 the 	 dat e	 	
o f 	 ac quisition 		 an y 	 e x c e s s 	 o f 	 the 	 c o s t 	 o f 	 ac quisition 	 o v er 	 the 	 f air 	 v alue s 	 o f 	 the 	 iden tifiable 	 ne t 	 as s e t s 	 ac quir ed 	 is 	 r ec ognis ed 	 	
as 	 goodwill 	 an y 	 de ficienc y 	 o f 	 the 	 c o s t 	 o f 	 ac quisition 	 belo w 	 the 	 f air 	 v alue s 	 o f 	 the 	 iden tifiable 	 ne t 	 as s e t s 	 ac quir ed 	 is 	 cr edit ed 	 	
t o 	 the 	 inc ome 	 s t at emen t 	 in 	 the 	 period 	 o f 	 ac quisition 	 	 	 	 	 	 	 	 	 	
 going concern          
t he 	 dir ect or s 	 ha v e  	 at 	 the 	 time 	 o f 	 appr o ving 	 the 	 financial 	 s t at emen t s  	 a 	 r e as onable 	 e xpect ation 	 that 	 the 	 c omp an y 	 and 	 the 	
gr oup 	 ha v e 	 adequat e 	 r e s our c e s 	 t o 	 c on tinue 	 in 	 oper ational 	 e xis t enc e 	 f or 	 the 	 f or e s ee able 	 fut ur e  	 t hus 	 the y 	 c on tinue 	 t o 	 adop t	
the 	 going 	 c onc ern 	 b asis 	 o f 	 ac c oun ting 	 in 	 pr ep aring 	 the 	 financial 	 s t at emen t s  	 f ur ther 	 de t ail 	 is 	 c on t ained 	 in 	 the 	 p erf ormanc e 	
r e vie w 	 on 	 p age 	 2 9 	 	 	 	 	 	 	 	 	 	
 goodwill          
goodwill 	 arising 	 on 	 c ons olidation 	 r epr e s en t s 	 the 	 e x c e s s 	 o f 	 the 	 c o s t 	 o f 	 ac quisition 	 o v er 	 the 	 gr oup ’ s 	 in t er e s t 	 in 	 the 	 f air 	 v alue	 	
o f 	 the 	 iden tifiable 	 as s e t s 	 and 	 liabilitie s 	 o f 	 a 	 sub sidiary 	 at 	 the 	 dat e 	 o f 	 ac quisition 	 	 	 	 	 	 	
	 	 	 	
goodwill 	 is 	 r ec ognis ed 	 as 	 an 	 as s e t 	 and 	 r e vie w ed 	 f or 	 imp airmen t 	 at 	 le as t 	 annually 	 or 	 whene v er 	 ther e 	 is 	 an 	 indic at or 	 o f	
imp airmen t  	 and 	 is 	 deemed 	 t o 	 ha v e 	 an 	 inde finit e 	 lif e  		 an y 	 imp airmen t 	 is 	 r ec ognis ed 	 immediat ely 	 in 	 the 	 inc ome 	 s t at emen t 	 	
and 	 is 	 no t 	 sub s equen tly 	 r e v er s ed	 	 	 	 	 	 	 	 	 	
											
on 	 dispo s al 	 o f 	 a 	 sub sidiary  	 as s ociat e 	 or 	 join tly 	 c on tr olled 	 en tit y 	 or 	 busine s s  	 the 	 at tribut able 	 amoun t 	 o f 	 goodwill 	 is 	 included	 	
in 	 the 	 de t ermination 	 o f 	 the 	 pr o fit 	 or 	 lo s s 	 on 	 dispo s al	 	 	 	 	 	 	 	 	
goodwill 	 arising 	 on 	 ac quisitions 	 be f or e 	 the 	 dat e 	 o f 	 tr ansition 	 t o 	 ifrs 	 has 	 been 	 r e t ained 	 at 	 the 	 pr e vious 	 uk 	 g aap 	 amoun t s	
subject 	 t o 	 being 	 t e s t ed 	 f or 	 imp airmen t  	 goodwill 	 writ t en 	 o f f 	 t o 	 r e s erv e s 	 under 	 uk 	 g aap 	 prior 	 t o 	 199 8 	 has 	 no t 	 been 	 r e s t at ed	
and 	 is 	 no t 	 included 	 in 	 de t ermining 	 an y 	 sub s equen t 	 pr o fit 	 or 	 lo s s 	 on 	 dispo s al	 	 	 	 	 	 	
	 	 	
 exceptional items          
ex c ep tional 	 it ems  	 as 	 dis clo s ed 	 on 	 the 	 f ac e 	 o f 	 the 	 inc ome 	 s t at emen t  	 ar e 	 it ems 	 which 	 due 	 t o 	 their 	 mat erial 	 and 	 non–r ec urring	
nat ur e 	 ha v e 	 been 	 clas sified 	 s ep ar at ely 	 in 	 or der 	 t o 	 dr a w 	 them 	 t o 	 the 	 at t en tion 	 o f 	 the 	 r e ader 	 o f 	 the 	 ac c oun t s 	 and 	 t o 	 sho w 	 mor e 	
ac c ur at ely 	 the 	 underlying 	 r e sult s 	 o f 	 the 	 gr oup 	 	 	 	 	 	 	 	 	
	
 impairment          
as s e t s 	 that 	 ha v e 	 an 	 inde finit e 	 us e ful 	 lif e 	 ar e 	 no t 	 subject 	 t o 	 amor tis ation 	 and 	 ar e 	 t e s t ed 	 at 	 le as t 	 annually 	 or 	 whene v er 	 ther e 	 	
is 	 an 	 indic at or 	 o f 	 imp airmen t  	 as s e t s 	 that 	 ar e 	 subject 	 t o 	 amor tis ation 	 or 	 depr eciation 	 ar e 	 r e vie w ed 	 f or 	 imp airmen t 	 whene v er	
e v en t s 	 or 	 change s 	 in 	 cir c ums t anc e s 	 indic at e 	 that 	 the 	 c arrying 	 amoun t 	 ma y 	 no t 	 be 	 r ec o v er able  	 an 	 imp airmen t 	 lo s s 	 is	
r e c o g n i s e d 	 i n 	 t h e 	 i n c o m e 	 s t a t e m e n t 	 f o r 	 t h e 	 a m o u n t 	 b y 	 w h i c h 	 t h e 	 a s s e t ’ s 	 c a r r y i n g 	 v a l u e 	 e x c e e d s 	 i t s 	 r e c o v e r a b l e 	 a m o u n t 	 	
f or 	 the 	 purpo s e s 	 o f 	 as s e s sing 	 imp airmen t  	 as s e t s 	 ar e 	 gr ouped 	 at 	 the 	 lo w e s t 	 le v els 	 f or 	 which 	 ther e 	 ar e 	 s ep ar at ely 	 iden tifiable 	
c ash 	 flo w s 	  c ash–gener ating 	 unit s  	 	 	 	 	 	 	 	 	 	 	
											
t h e 	 r e c o v e r a b l e 	 a m o u n t 	 i s 	 t h e 	 h i g h e r 	 o f 	 a n 	 a s s e t ’ s 	 f a i r 	 v a l u e 	 l e s s 	 c o s t s 	 t o 	 s e l l 	 a n d 	 v a l u e 	 i n 	 u s e  	 i n 	 a s s e s s i n g 	 v a l u e 	 i n 	 u s e 	 	
the 	 e s timat ed 	 fut ur e 	 c ash 	 flo w s 	 ar e 	 dis c oun t ed 	 t o 	 their 	 pr e s en t 	 v alue	 using 	 a 	 dis c oun t 	 r at e 	 that 	 r e flect s 	 c urr en t 	 mark e t 	
as s e s smen t s 	 o f 	 the 	 time 	 v alue 	 o f 	 mone y 	 and 	 the 	 risk s 	 specific 	 t o 	 the 	 as s e t 	 annual report and accounts 2011
a cco u n t s 68
 property plant and equipment           
	 land 	 and 	 buildings 	 ar e 	 s t at ed 	 in 	 the 	 b alanc e 	 shee t 	 at 	 c o s t 	 le s s 	 ac c umulat ed 	 depr eciation	 	 	 	 	
								
plan t  	 t echnic al 	 equipmen t 	 and 	 o ther 	 as s e t s 	 ar e 	 s t at ed 	 at 	 c o s t 	 le s s 	 ac c umulat ed 	 depr eciation 	 and 	 r ec ognis ed 	 imp airmen t 	 lo s s 	 	
											
d e p r e c i a t i o n 	 i s 	 c h a r g e d 	 s o 	 a s 	 t o 	 w r i t e 	 o f f 	 t h e 	 c o s t 	 o r 	 v a l u a t i o n 	 t o 	 r e s i d u a l 	 v a l u e 	 o f 	 fi x e d 	 a s s e t s 	 o v e r 	 t h e i r 	 e s t i m a t e d 	 u s e f u l 	 l i v e s 	
using 	 the 	 s tr aigh t –line 	 me thod 	 on 	 the 	 f ollo wing 	 b as e s	 	 	 	 	 	 	 	 	
	 	 	 	
l e as ehold 	 buildings	 	 	 be t w een 	 5  	 and 	 10	 	 	 	 	 	 	
plan t  	 t echnic al 	 equipmen t 	 and 	 o ther	 be t w een 	 10 	 and 	 2 0	 	 	 	 	 	 	
t he 	 liv e s 	 o f 	 as s e t s 	 lis t ed 	 ar e 	 r e vie w ed 	 and 	 adjus t ed 	 if 	 appr opriat e  	 at 	 e ach 	 b alanc e 	 shee t 	 dat e 	 	 	 	 	
								
as s e t s 	 held 	 under 	 financ e 	 le as e s 	 including 	 le as ehold 	 buildings  	 ar e 	 depr eciat ed 	 o v er 	 their 	 e xpect ed 	 us e ful	 liv e s 	 on 	 the 	 s ame	
b asis 	 as 	 o wned 	 as s e t s 	 or  	 wher e 	 shor t er  	 o v er 	 the 	 t erm 	 o f 	 the 	 le as e 	 	 	 	 	 	 	
t he 	 gain 	 or 	 lo s s 	 arising 	 on 	 the 	 dispo s al 	 or 	 r e tir emen t 	 o f 	 an 	 as s e t 	 is 	 de t ermined 	 as 	 the 	 dif f er enc e 	 be t w een 	 the 	 s ale s 	 pr oc eeds	
and 	 the 	 c arrying 	 amoun t 	 o f 	 the 	 as s e t 	 and 	 is 	 r ec ognis ed 	 in 	 inc ome 	 	 	 	 	 	 	 	
					
 leasing           
l e as e s 	 ar e 	 clas sified 	 as 	 financ e 	 le as e s 	 whene v er 	 the 	 t erms 	 o f 	 the 	 le as e 	 tr ans f er 	 sub s t an tially 	 all 	 the 	 risk s 	 and 	 r e w ar ds 	 	
o f 	 o wner ship 	 t o 	 the 	 le s s ee  		 all 	 o ther 	 le as e s 	 ar e 	 clas sified 	 as 	 oper ating 	 le as e s 	 	 	 	 	 	
							
c o s t s 	 in 	 r e spect 	 o f 	 oper ating 	 le as e s 	 ar e 	 char ged 	 t o 	 the 	 inc ome 	 s t at emen t 	 on 	 a 	 s tr aigh t –line 	 b asis 	 o v er 	 the 	 le as e 	 t erm	 	
											
b ene fit s 	 r ec eiv ed 	 and 	 r ec eiv able 	 as 	 an 	 inc en tiv e 	 t o 	 en t er 	 in t o 	 an 	 oper ating 	 le as e 	 ar e 	 spr e ad 	 on 	 a 	 s tr aigh t –line 	 b asis 	 o v er 	 	
the 	 le as e 	 t erm	 	 	 	 	 	 	 	 	 	 	 	 	
 inventories          
i n v e n t o r i e s 	 a r e 	 s t a t e d 	 a t 	 t h e 	 l o w e r 	 o f 	 c o s t 	 a n d 	 n e t 	 r e a l i s a b l e 	 v a l u e  	 	 c o s t 	 c o m p r i s e s 	 d i r e c t 	 m a t e r i a l s  	 a n d 	 w h e r e 	 a p p l i c a b l e 	
dir ect 	 labour 	 c o s t s 	 and 	 tho s e 	 o v erhe ads 	 that 	 ha v e 	 been 	 inc urr ed 	 in 	 bringing 	 the 	 in v en t orie s 	 t o 	 their 	 pr e s en t 	 loc ation 	 and	
c ondition 	 ne t 	 r e alis able 	 v alue 	 r epr e s en t s 	 the 	 e s timat ed 	 s elling 	 pric e 	 le s s 	 e s timat ed 	 c o s t s 	 o f 	 c omple tion 	 and 	 the 	 e s timat ed	
selling	costs													
	 r ec or ded 	 pr ogr amme s 	 and 	 films	 	 	 	 	 	 	 	 	
r ec or ded 	 pr ogr amme s 	 ar e 	 v alued 	 at 	 dir ect 	 c o s t 	 including 	 labour 	 and 	 o v erhe ads  	 le s s 	 appr opriat e 	 pr o visions  	 and 	 ar e 	 writ t en	 	
o f f 	 aft er 	 the 	 fir s t 	 tr ansmis sion 	 or 	 s ale  	 pr ogr amming 	 made 	 f or 	 thir d 	 p ar tie s 	 is 	 v alued 	 at 	 c o s t  	 le s s 	 appr opriat e 	 pr o visions  	 and 	 	
is 	 char ged 	 t o 	 the 	 inc ome 	 s t at emen t 	 agains t 	 r elat ed 	 inc ome 	 	 	 	 	 	 	 	
					
	 film 	 righ t s	 	 	 	 	 	 	 	 	 	 	
a c quir ed 	 film 	 righ t s 	 ar e 	 v alued 	 at 	 dir ect 	 c o s t 	 le s s 	 appr opriat e 	 pr o visions 	 and 	 ar e 	 writ t en 	 o f f 	 in 	 line 	 with 	 the 	 righ t s 	 as s ociat ed 	
with 	 individual 	 c on tr act s  	 f or 	 ac quir ed 	 film 	 righ t s 	 an 	 as s e t 	 is 	 r ec ognis ed 	 as 	 p a ymen t s 	 ar e 	 made 	 and 	 in 	 full 	 when 	 the 	 ac quir ed 	
pr ogr amming 	 is 	 a v ailable 	 f or 	 tr ansmis sion 	 	 	 	 	 	 	 	 	 	 	
 f oreign currencies         
t r ans actions 	 in 	 c urr encie s 	 o ther 	 than 	 pounds 	 s t erling 	 ar e 	 r ec or ded 	 at 	 the 	 r at e s 	 o f 	 e x change 	 pr e v ailing 	 on 	 the 	 dat e s 	 o f 	 the	
tr ans actions  	 mone t ary 	 as s e t s 	 and 	 liabilitie s 	 denominat ed 	 in 	 f or eign 	 c urr encie s 	 at 	 the 	 b alanc e 	 shee t 	 dat e 	 ar e 	 r epor t ed 	 at 	 the	
r at e s 	 o f 	 e x change 	 pr e v ailing 	 at 	 that 	 dat e 	 	 	 	 	 	 	 	 	 	
	 	 	
 revenue recognition          
r e v enue 	 is 	 me asur ed 	 at 	 the 	 f air 	 v alue 	 o f 	 the 	 c onsider ation 	 r ec eiv ed 	 or 	 r ec eiv able 	 and 	 r epr e s en t s 	 amoun t s 	 r ec eiv able 	 f or 	 goods	
and 	 s ervic e s 	 pr o vided 	 in 	 the 	 normal 	 c our s e 	 o f 	 busine s s  	 ne t 	 o f 	 dis c oun t s 	 and 	 v a t  	 r e v enue 	 fr om 	 the 	 s ale 	 o f 	 goods 	 is 	 r ec ognis ed	
when 	 the 	 gr oup 	 has 	 tr ans f err ed 	 the 	 signific an t 	 risk s 	 and 	 r e w ar ds 	 o f 	 o wner ship 	 and 	 c on tr ol 	 o f 	 the 	 goods 	 s old 	 and 	 the 	 amoun t 	 	
o f 	 r e v enue 	 c an 	 be 	 me asur ed 	 r eliably  	 k e y 	 clas s e s 	 o f 	 r e v enue 	 ar e 	 r ec ognis ed 	 on 	 the 	 f ollo wing 	 b asis	 	 	 	
									
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 69
air time 	 r e v enue	 	 on 	 tr ansmis sion	 	 	 	 	 	 	
spons or ship	 	 	 e v enly 	 o v er 	 the 	 lif e 	 o f 	 the 	 c on tr act	 	 	 	 	 	
pr ogr amme 	 pr oduction 			 	 	 on 	 deliv ery 															 	 	 	 	 	 	 	 	 	
r e v enue 	 on 	 b ar t er 	 tr ans actions 	 is 	 r ec ognis ed 	 only 	 when 	 the 	 goods 	 or 	 s ervic e s 	 being 	 e x changed 	 ar e 	 o f 	 a 	 dis similar 	 nat ur e 	 	
 taxation          
t he 	 t ax 	 e xpens e 	 r epr e s en t s 	 the 	 sum 	 o f 	 c urr en t 	 t ax 	 and 	 de f err ed 	 t ax	 	 	 	 	 	 	
	 	 	
	current	tax										
t he 	 t ax 	 c urr en tly 	 p a y able 	 is 	 b as ed 	 on 	 t ax able 	 pr o fit 	 f or 	 the 	 y e ar  	 t ax able 	 pr o fit 	 dif f er s 	 fr om 	 ne t 	 pr o fit 	 as 	 r epor t ed 	 in 	 the 	 inc ome 	
s t at emen t 	 bec aus e 	 it 	 e x clude s 	 it ems 	 o f 	 inc ome 	 or 	 e xpens e 	 that 	 ar e 	 t ax able 	 or 	 deductible 	 in 	 o ther 	 y e ar s 	 and 	 it 	 fur ther 	 e x clude s	
it ems 	 that 	 ar e 	 ne v er 	 t ax able 	 or 	 deductible  	 t he 	 gr oup ’ s 	 liabilit y 	 f or 	 c urr en t 	 t ax 	 is 	 c alc ulat ed 	 using 	 t ax 	 r at e s 	 that 	 ha v e 	 been	
enact ed 	 or 	 sub s t an tiv ely 	 enact ed 	 b y 	 the 	 b alanc e 	 shee t 	 dat e 	 	 	 	 	 	 	 	
	 	
	 de f err ed 	 t ax 	 	 	 	 	 	 	 	 	 	 	
de f err ed 	 t ax 	 is 	 the 	 t ax 	 e xpect ed 	 t o 	 be 	 p a y able 	 or 	 r ec o v er able 	 on 	 dif f er enc e s 	 be t w een 	 the 	 c arrying 	 amoun t s 	 o f 	 as s e t s 	 and	
liabilitie s 	 in 	 the 	 financial 	 s t at emen t s 	 and 	 the 	 c orr e sponding 	 t ax 	 b as e s 	 us ed 	 in 	 the 	 c omput ation 	 o f 	 t ax able 	 pr o fit  	 and 	 is 	
ac c oun t ed 	 f or 	 using 	 the 	 b alanc e 	 shee t 	 liabilit y 	 me thod 	 de f err ed 	 t ax 	 liabilitie s 	 ar e 	 gener ally 	 r ec ognis ed 	 f or 	 all 	 t ax able 	 t empor ary	
dif f er enc e s 	 and 	 de f err ed 	 t ax 	 as s e t s 	 ar e 	 r ec ognis ed 	 t o 	 the 	 e xt en t 	 that 	 it 	 is 	 pr ob able 	 that 	 t ax able 	 pr o fit s 	 will 	 be 	 a v ailable 	 agains t 	
which 	 deductible 	 t empor ary 	 dif f er enc e s 	 c an 	 be 	 utilis ed 	 s uch 	 as s e t s 	 and 	 liabilitie s 	 ar e 	 no t 	 r ec ognis ed 	 if 	 the 	 t empor ary	
dif f er enc e s 	 aris e 	 fr om 	 goodwill 	 or 	 fr om 	 the 	 initial 	 r ec ognition 	  o ther 	 than 	 in 	 a 	 busine s s 	 c ombination  	 o f 	 o ther 	 as s e t s 	 and	
liabilitie s 	 in 	 a 	 tr ans action 	 that 	 af f ect s 	 neither 	 the 	 t ax 	 pr o fit 	 nor 	 the 	 ac c oun ting 	 pr o fit 	
	 	 	 	
t he 	 c arrying 	 amoun t 	 o f 	 de f err ed 	 t ax 	 as s e t s 	 is 	 r e vie w ed 	 at 	 e ach 	 b alanc e 	 shee t 	 dat e 	 and 	 r educ ed 	 t o 	 the 	 e xt en t 	 that 	 it 	 is 	 no	
longer 	 pr ob able 	 that 	 suf ficien t 	 t ax able 	 pr o fit s 	 will 	 be 	 a v ailable 	 t o 	 allo w 	 all 	 or 	 p ar t 	 o f 	 the 	 as s e t 	 t o 	 be 	 r ec o v er ed	 	 	
							
de f err ed 	 t ax 	 is 	 c alc ulat ed 	 at 	 the 	 t ax 	 r at e s 	 that 	 ar e 	 e xpect ed 	 t o 	 apply 	 in 	 the 	 period 	 when 	 the 	 liabilit y 	 is 	 s e t tled 	 or 	 the 	 as s e t 	 is	
r e alis ed 	 de f err ed 	 t ax 	 is 	 char ged 	 or 	 cr edit ed 	 in 	 the 	 inc ome 	 s t at emen t  	 e x c ep t 	 when 	 it 	 r elat e s 	 t o 	 it ems 	 char ged 	 or 	 cr edit ed	
dir ectly 	 t o 	 equit y  	 in 	 which 	 c as e 	 the 	 de f err ed 	 t ax 	 is 	 als o 	 de alt 	 with 	 in 	 equit y 	 	 	 	 	 	 	
	 	 	
 dividends          
t he 	 liabilit y 	 f or 	 final 	 dividends 	 is 	 r ec or ded 	 when 	 the 	 dividends 	 ar e 	 appr o v ed 	 b y 	 the 	 gr oup ’ s 	 shar eholder s 	 	 	 	
f or 	 in t erim 	 dividends  	 the 	 liabilit y 	 is 	 r ec or ded 	 when 	 the 	 dividends 	 ar e 	 p aid	 	 	 	 	 	 	
	 	 	
 retirement benefit costs          
p a ymen t s 	 t o 	 de fined 	 c on tribution 	 r e tir emen t 	 bene fit 	 s cheme s 	 ar e 	 char ged 	 as 	 an 	 e xpens e 	 as 	 the y 	 f all 	 due 	 	 	 	
						
f o r 	 d e fi n e d 	 b e n e fi t 	 r e t i r e m e n t 	 b e n e fi t 	 s c h e m e s  	 t h e 	 c o s t 	 o f 	 p r o v i d i n g 	 b e n e fi t s 	 i s 	 d e t e r m i n e d 	 u s i n g 	 t h e 	 p r o j e c t e d 	 u n i t 	 m e t h o d 	
with 	 act uarial 	 v aluations 	 being 	 c arried 	 out 	 at 	 e ach 	 b alanc e 	 shee t 	 dat e  	 a ct uarial 	 gains 	 and 	 lo s s e s 	 ar e 	 r ec ognis ed 	 in 	 full 	 dir ectly	
in 	 ac c umulat ed 	 lo s s e s 	 in 	 the 	 period 	 in 	 which 	 the y 	 oc c ur 	 and 	 pr e s en t ed 	 in 	 the 	 s t at emen t 	 o f 	 c ompr ehensiv e 	 inc ome  	 	 	 	
t he 	 r e tir emen t 	 bene fit 	 obligation 	 r ec ognis ed 	 in 	 the 	 b alanc e 	 shee t 	 r epr e s en t s 	 the 	 pr e s en t 	 v alue 	 o f 	 the 	 de fined 	 bene fit 	
obligation 	 as 	 adjus t ed 	 f or 	 unr ec ognis ed 	 p as t 	 s ervic e 	 c o s t  	 and 	 as 	 r educ ed 	 b y 	 the 	 f air 	 v alue 	 o f 	 s cheme 	 as s e t s  	 	 	 	
							
 provisions          
pr o visions 	 ar e 	 r ec ognis ed 	 when 	 the 	 gr oup 	 has 	 a 	 pr e s en t 	 obligation 	 as 	 a 	 r e sult 	 o f 	 a 	 p as t 	 e v en t  	 it 	 is 	 pr ob able 	 that 	 the 	 gr oup	 	
will 	 be 	 r equir ed 	 t o 	 s e t tle 	 that 	 obligation 	 and 	 a 	 r eliable 	 e s timat e 	 c an 	 be 	 made 	 o f 	 the 	 amoun t 	 o f 	 the 	 obligation	 	 	
							
	 c o s t 	 o f 	 change	 	 	 	 	 	 	 	 	 	
c o s t 	 o f 	 change 	 pr o visions 	 ar e 	 r ec ognis ed 	 when 	 the 	 gr oup 	 has 	 a 	 de t ailed 	 f ormal 	 plan 	 f or 	 the 	 r eor ganis ation 	 that 	 has 	 been	
c ommunic at ed 	 t o 	 af f ect ed 	 p ar tie s  	 	 	 	 	 	 	 	 	 	 	
											 annual report and accounts 2011
a cco u n t s 70
	 oner ous 	 c on tr act s	 	 	 	 	 	 	 	 	 	
pr o visions 	 f or 	 oner ous 	 c on tr act s 	 ar e 	 r ec ognis ed 	 when 	 the 	 gr oup 	 has 	 a 	 de t ailed 	 f or ec as t 	 o f 	 fut ur e 	 lo s s e s 	 fr om 	 the 	 c on tr act 	 	
 share–based payments          
t he 	 gr oup 	 is sue s 	 equit y –s e t tled 	 shar e–b as ed 	 p a ymen t s 	 t o 	 c er t ain 	 emplo y ee s  	 e quit y –s e t tled 	 shar e–b as ed 	 p a ymen t s 	 ar e	
me asur ed 	 at 	 f air 	 v alue 	 o f 	 the 	 equit y 	 ins trumen t s 	 at 	 the 	 gr an t 	 dat e  	 t he 	 f air 	 v alue 	 e x clude s 	 the 	 e f f ect 	 o f 	 non 	 mark e t –b as ed	
v e s ting 	 c onditions  	 	 	 	 	 	 	 	 	 	 	 	 	
											
t he 	 f air 	 v alue 	 de t ermined 	 at 	 the 	 gr an t 	 dat e 	 o f 	 the 	 equit y –s e t tled 	 shar e–b as ed 	 p a ymen t s 	 is 	 e xpens ed 	 on 	 a 	 s tr aigh t –line 	 b asis	
o v er 	 the 	 v e s ting 	 period 	 b as ed 	 on 	 the 	 gr oup ’ s 	 e s timat e 	 o f 	 equit y 	 ins trumen t s 	 that 	 will 	 e v en t ually 	 v e s t  	 a t 	 e ach 	 b alanc e 	 shee t	
dat e  	 the 	 gr oup 	 r e vis e s 	 it s 	 e s timat e 	 o f 	 the 	 number 	 o f 	 equit y 	 ins trumen t s 	 e xpect ed 	 t o 	 v e s t 	 as 	 a 	 r e sult 	 o f 	 the 	 e f f ect 	 o f 	 non	
mark e t –b as ed 	 v e s ting 	 c onditions  	 t he 	 imp act 	 o f 	 the 	 r e vision 	 o f 	 the 	 original 	 e s timat e s  	 if 	 an y  	 is 	 r ec ognis ed 	 in 	 pr o fit 	 and 	 lo s s 	
such 	 that 	 the 	 c umulativ e 	 e xpens e 	 r e flect s 	 the 	 r e vis ed 	 e s timat e  	 with 	 a 	 c orr e sponding 	 adjus tmen t 	 t o 	 the 	 equit y –s e t tled 	
emplo y ee 	 bene fit s 	 r e s erv e 	 	 	 	 	 	 	 	 	 	 	
												
f air 	 v alue 	 is 	 me asur ed 	 b y 	 us e 	 o f 	 the 	 b lack 	  	 s chole s 	 model 	 or 	 mon t e 	 c arlo 	 model 	 as 	 r ele v an t  	 t he 	 e xpect ed 	 liv e s 	 us ed 	 in 	 the	
model 	 ha v e 	 been 	 adjus t ed 	 b as ed 	 on 	 managemen t ’ s 	 be s t 	 e s timat e  	 f or 	 the 	 e f f ect s 	 o f 	 non–tr ans f er abilit y  	 e x er cis e 	 r e s trictions	
and 	 beha viour al 	 c onsider ations 	 	 	 	 	 	 	 	 	 	 	
												
 financial assets and liabilities         
financial 	 as s e t s 	 and 	 financial 	 liabilitie s 	 ar e 	 r ec ognis ed 	 on 	 the 	 gr oup ’ s 	 b alanc e 	 shee t 	 when 	 the 	 gr oup 	 bec ome s 	 a 	 p ar t y 	 t o 	 	
the 	 c on tr act ual 	 pr o visions 	 o f 	 the 	 ins trumen t 	 	 	 	 	 	 	 	 	 	
													
 financial assets          
	 t r ade 	 r ec eiv able s	 	 	 	 	 	 	 	 	 	
t r ade 	 r ec eiv able s 	 do 	 no t 	 c arry 	 an y 	 in t er e s t 	 and 	 ar e 	 s t at ed 	 at 	 their 	 nominal 	 v alue 	 as 	 r educ ed 	 b y 	 appr opriat e 	 allo w anc e s 	 f or	
e s timat ed 	 irr ec o v er able 	 amoun t s  	 a 	 pr o vision 	 is 	 e s t ablished 	 f or 	 tr ade 	 r ec eiv able s 	 if 	 ther e 	 is 	 objectiv e 	 e videnc e 	 that 	 the 	 gr oup	
will 	 no t 	 be 	 able 	 t o 	 c ollect 	 all 	 amoun t s 	 due 	 ac c or ding 	 t o 	 the 	 original 	 t erms 	 o f 	 the 	 r ec eiv able s  	 	 	 	 	 	
	 in v e s tmen t s
immat erial 	 in v e s tmen t s 	 ar e 	 r ec or ded 	 as 	 c urr en t 	 as s e t s  	 in v e s tmen t s 	 ar e 	 me asur ed 	 at 	 r epor ting 	 dat e s 	 at 	 f air 	 v alue 	 	 	
	 c ash 	 and 	 c ash 	 equiv alen t s
c ash 	 and 	 c ash 	 equiv alen t s 	 c ompris e 	 c ash 	 on 	 hand 	 and 	 demand 	 depo sit s 	 and 	 o ther 	 shor t –t erm 	 highly 	 liquid 	 in v e s tmen t s	 	
that 	 ar e 	 r e adily 	 c on v er tible 	 t o 	 a 	 kno wn 	 amoun t 	 o f 	 c ash 	 and 	 ar e 	 subject 	 t o 	 an 	 insignific an t 	 risk 	 o f 	 change s 	 in 	 v alue 	
 financial liabilities and equity         
	 b ank 	 borr o wings	 	 	 	 	 	 	 	 	 	
in t er e s t –be aring 	 b ank 	 lo ans 	 and 	 o v er dr aft s 	 ar e 	 initially 	 r ec or ded 	 at 	 the 	 pr oc eeds 	 r ec eiv ed 	 ne t 	 o f 	 dir ect 	 is sue 	 c o s t s  	 t he y 	 ar e	
sub s equen tly 	 me asur ed 	 at 	 amor tis ed 	 c o s t 	 using 	 the 	 e f f ectiv e 	 in t er e s t 	 r at e  	 financ e 	 c o s t s  	 including 	 pr emiums 	 p a y able 	 on	
s e t tlemen t 	 or 	 r edemp tion 	 and 	 dir ect 	 is sue 	 c o s t s  	 ar e 	 ac c oun t ed 	 f or 	 on 	 an 	 ac cruals 	 b asis 	 t o 	 the 	 inc ome 	 s t at emen t 	 and 	 ar e	 	
added 	 t o 	 the 	 c arrying 	 amoun t 	 o f 	 the 	 ins trumen t 	 t o 	 the 	 e xt en t 	 that 	 the y 	 ar e 	 no t 	 s e t tled 	 in 	 the 	 period 	 in 	 which 	 the y 	 aris e 	 	
	
	trade	payables											
t r ade 	 p a y able s 	 ar e 	 no t 	 in t er e s t 	 be aring 	 and 	 ar e 	 s t at ed 	 at 	 their 	 nominal 	 v alue 	 	 	 	 	 	
											
	 e quit y 	 ins trumen t s	 	 	 	 	 	 	 	 	 	
e quit y 	 ins trumen t s 	 is sued 	 b y 	 the 	 c omp an y 	 ar e 	 r ec or ded 	 at 	 the 	 pr oc eeds 	 r ec eiv ed 	 ne t 	 o f 	 dir ect 	 is sue 	 c o s t s 	 	 	
													
	 deriv ativ e 	 financial 	 ins trumen t s 	 and 	 hedge 	 ac c oun ting	 	 	 	 	 	 	
t he 	 gr oup 	 us e s 	 deriv ativ e 	 financial 	 ins trumen t s 	 t o 	 hedge 	 it s 	 e xpo sur e 	 t o 	 fluct uations 	 in 	 in t er e s t  	 ins trumen t s 	 ac c oun t ed 	 	
f or 	 as 	 hedge s 	 ar e 	 de signat ed 	 as 	 a 	 hedge 	 at 	 the 	 inc ep tion 	 o f 	 c on tr act s  	 	 	 	 	 	 	 	
															
	
															
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 71
in 	 or der 	 t o 	 qualif y 	 f or 	 hedge 	 ac c oun ting 	 the 	 gr oup 	 is 	 r equir ed 	 t o 	 doc umen t 	 in 	 adv anc e 	 the 	 r elationship 	 be t w een 	 the 	 it em	 	
being 	 hedged 	 and 	 the 	 hedging 	 ins trumen t  	 t he 	 gr oup 	 is 	 als o 	 r equir ed 	 t o 	 doc umen t 	 and 	 demons tr at e 	 an 	 as s e s smen t 	 o f 	 the	
r elationship 	 be t w een 	 the 	 hedged 	 it em 	 and 	 the 	 hedging 	 ins trumen t  	 which 	 sho w s 	 that 	 the 	 hedge 	 will 	 be 	 highly 	 e f f ectiv e 	 on 	 an	
ongoing 	 b asis  	 t his 	 e f f ectiv ene s s 	 t e s ting 	 is 	 r e–perf ormed 	 at 	 the 	 end 	 o f 	 e ach 	 quar t er 	 end 	 t o 	 ensur e 	 that 	 the 	 hedge 	 r emains	
highly 	 e f f ectiv e 	 	 	 	 	 	 	 	 	 	 	 	
t he 	 f air 	 v alue 	 o f 	 in t er e s t 	 r at e 	 s w ap s 	 is 	 b as ed 	 on 	 the 	 mark e t 	 pric e 	 lib or  	 o f 	 c omp ar able 	 ins trumen t s 	 at 	 the 	 me asur emen t 	 dat e  	 	
															
t he 	 f air 	 v alue 	 o f 	 the 	 in t er e s t 	 r at e 	 s w ap 	 c on tr act 	 is 	 c alc ulat ed 	 on 	 a 	 dis c oun t ed 	 c ash 	 flo w 	 b asis 	 using 	 mark e t 	 f orw ar d 	 r at e s  	 	
gains 	 or 	 lo s s e s 	 arising 	 fr om 	 the 	 mo v emen t 	 t o 	 f air 	 v alue 	 ar e 	 t ak en 	 t o 	 the 	 inc ome 	 s t at emen t 	 e x c ep t 	 wher e 	 de signat ed 	 as 	 a	 	
c ash 	 flo w 	 hedge 	 	 	 	 	 	 	 	 	 	 	 	
										
4 	 critic al 	 ac c oun ting 	 e s timat e s 	 and 	 judgemen t s	 	 	 	 	 	
in 	 the 	 applic ation 	 o f 	 the 	 gr oup ’ s 	 ac c oun ting 	 policie s  	 which 	 ar e 	 de s cribed 	 in 	 no t e 	 3  	 the 	 dir ect or s 	 ar e 	 r equir ed 	 t o 	 mak e	
judgemen t s  	 e s timat e s 	 and 	 as sump tions 	 about 	 the 	 c arrying 	 amoun t s 	 o f 	 as s e t s 	 and 	 liabilitie s 	 that 	 ar e 	 no t 	 r e adily 	 app ar en t	 	
fr om 	 o ther 	 s our c e s  	 t he 	 e s timat e s 	 and 	 judgemen t s 	 ar e 	 c on tinually 	 e v aluat ed 	 and 	 ar e 	 b as ed 	 on 	 his t oric al 	 e xperienc e 	 and	 	
o ther 	 f act or s  	 including 	 e xpect ations 	 o f 	 fut ur e 	 e v en t s 	 that 	 ar e 	 belie v ed 	 t o 	 be 	 r e as onable 	 under 	 the 	 cir c ums t anc e s  	 a ct ual	
r e sult s 	 ma y 	 dif f er 	 fr om 	 the s e 	 e s timat e s 	 	 	 	 	 	 	 	 	 	
										
 critical accounting estimates and assumptions       
t he 	 k e y 	 as sump tions 	 c onc erning 	 the 	 fut ur e  	 and 	 o ther 	 k e y 	 s our c e s 	 o f 	 e s timation 	 unc er t ain t y 	 at 	 the 	 b alanc e 	 shee t 	 dat e  	 that	
ha v e 	 a 	 signific an t 	 risk 	 o f 	 c ausing 	 a 	 mat erial 	 adjus tmen t 	 t o 	 the 	 c arrying 	 amoun t s 	 o f 	 as s e t s 	 and 	 liabilitie s 	 within 	 the 	 ne xt 	 financial 	
y e ar  	 ar e 	 dis c us s ed 	 belo w 	 	 	 	 	 	 	 	 	 	
	
	 imp airmen t 	 o f 	 goodwill	 	 	 	 	 	 	 	 	
de t ermining 	 whe ther 	 goodwill 	 is 	 imp air ed 	 r equir e s 	 an 	 e s timation 	 o f 	 the 	 v alue 	 in 	 us e 	 o f 	 the 	 c ash–gener ating 	 unit s 	 t o 	 which 	 the	
goodwill 	 has 	 been 	 alloc at ed 	 t he 	 v alue 	 in 	 us e 	 c alc ulation 	 r equir e s 	 the 	 en tit y 	 t o 	 e s timat e 	 the 	 fut ur e 	 c ash 	 flo w s 	 e xpect ed 	 t o 	 aris e 	
fr om 	 the 	 c ash–gener ating 	 unit 	 and 	 a 	 suit able 	 dis c oun t 	 r at e 	 in 	 or der 	 t o 	 c alc ulat e 	 the 	 pr e s en t 	 v alue  	 de t ails 	 o f 	 the 	 imp airmen t	
t e s ting 	 ar e 	 s e t 	 out 	 in 	 no t e 	 14 	 	 	 	 	 	 	 	 	 	
										
	 p ension 	 bene fit s	 	 	 	 	 	 	 	 	
t he 	 pr e s en t 	 v alue 	 o f 	 the 	 pension 	 obligations 	 depends 	 on 	 a 	 number 	 o f 	 f act or s 	 that 	 ar e 	 de t ermined 	 on 	 an 	 act uarial 	 b asis 	 using	 	
a 	 number 	 o f 	 as sump tions  	 t he 	 as sump tions 	 us ed 	 in 	 de t ermining 	 the 	 ne t 	 c o s t 	 inc ome  	 f or 	 pensions 	 include 	 the 	 dis c oun t 	 r at e 	
an y 	 change s 	 in 	 the s e 	 as sump tions 	 will 	 imp act 	 the 	 c arrying 	 amoun t 	 o f 	 pension 	 obligations 	 	 	 	 	
					
t he 	 gr oup 	 de t ermine s 	 the 	 appr opriat e 	 dis c oun t 	 r at e 	 at 	 the 	 end 	 o f 	 e ach 	 y e ar  	 t his 	 is 	 the 	 in t er e s t 	 r at e 	 that 	 should 	 be 	 us ed 	 t o	
de t ermine 	 the 	 pr e s en t 	 v alue 	 o f 	 e s timat ed 	 fut ur e 	 c ash 	 out flo w s 	 e xpect ed 	 t o 	 be 	 r equir ed 	 t o 	 s e t tle 	 the 	 pension 	 obligations  	 in 	
de t ermining 	 the 	 appr opriat e 	 dis c oun t 	 r at e  	 the 	 gr oup 	 c onsider s 	 the 	 in t er e s t 	 r at e s 	 o f 	 high–qualit y 	 c orpor at e 	 bonds 	 that 	 ar e	
denominat ed 	 in 	 the 	 c urr enc y 	 in 	 which 	 the 	 bene fit s 	 will 	 be 	 p aid 	 and 	 that 	 ha v e 	 t erms 	 t o 	 mat urit y 	 appr o ximating 	 the 	 t erms 	 	
o f 	 the 	 r elat ed 	 pension 	 liabilit y 	 	 	 	 	 	 	 	 	 	
										
other 	 k e y 	 as sump tions 	 f or 	 pension 	 obligations 	 ar e 	 b as ed 	 in 	 p ar t 	 on 	 c urr en t 	 mark e t 	 c onditions  	 a dditional 	 in f ormation 	 is	
dis clo s ed 	 in 	 no t e 	 2 9 	 	 	 	 	 	 	 	 	 	
										
	inventory	 									
t he 	 c arrying 	 v alue 	 o f 	 s t ock 	 is 	 as s e s s ed 	 e ach 	 y e ar 	 at 	 the 	 b alanc e 	 shee t 	 dat e  	 r ec or ded 	 pr ogr amme 	 and 	 film 	 in v en t ory 	 is 	 	
b as ed 	 on 	 c on tr act ual 	 v alue s 	 with 	 an 	 e s timat ed 	 us e ful 	 lif e  	 and 	 is 	 amor tis ed 	 on 	 that 	 b asis 	 	 	 	
 critical judgements in applying the entity’s accounting policies      
t he 	 dir ect or s 	 ha v e 	 no t 	 made 	 an y 	 fur ther 	 critic al 	 judgemen t s  	 ap ar t 	 fr om 	 tho s e 	 in v olving 	 e s timations 	  which 	 ar e 	 de alt 	 with	
s ep ar at ely 	 abo v e  	 in 	 the 	 pr oc e s s 	 o f 	 applying 	 the 	 gr oup ’ s 	 ac c oun ting 	 policie s  	 	 	 	 	 	 	
	 	 	 	 annual report and accounts 2011
a cco u n t s 72
5 	 b usine s s 	 s egmen t s	 	 	 	 	 	 	 	 	
t h e 	 g r o u p ’ s 	 c h i e f 	 e x e c u t i v e  	 t h e 	 c h i e f 	 o p e r a t i n g 	 d e c i s i o n 	 m a k e r  	 c o n s i d e r s 	 t h e 	 b u s i n e s s 	 p r i m a r i l y 	 f r o m 	 a 	 p r o d u c t 	 p e r s p e c t i v e 	
under 	 ifrs 	 8 	 the 	 r epor t able 	 s egmen t s 	 ar e 	 ther e f or e 	 c onsumer 	 pr e viously 	 br o adc as ting 	 and 	 v en t ur e s  	 pr oductions	
pr e viously 	 c on t en t  	 and 	 cinema 	 adv er tising 	  cinema  	 t he 	 gr oup 	 s old 	 it s 	 cinema 	 busine s s 	 on 	 14 	 ma y 	 2 010 	 	 	
							
t he 	 perf ormanc e 	 o f 	 the 	 s egmen t s 	 is 	 as s e s s ed 	 b as ed 	 on 	 a 	 me asur e 	 o f 	 adjus t ed 	 oper ating 	 pr o fit  	 t his 	 me asur emen t 	 b asis 	
e x clude s 	 the 	 e f f ect s 	 o f 	 e x c ep tional 	 it ems 	 	 	 	 	 	 	 	 	 	
									
ext ernal 	 s ale s
segment revenues
2 011	
£m
2 010	
£m
continuing operations
c onsumer 936  950 
pr oductions 84  98 
 1020  1048 
discontinued operations
cinema –  69 
 1020  1117 
t urno v er 	 in 	 2 011 	 include s 	 £1 1m 	 o f 	 r e v enue s 	 fr om 	 s our c e s 	 out side 	 the 	 uk 	 2 010 	 £16m 	 	 	
			 			
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 73
underlying 	 s egmen t 	 r e sult 								      ex c ep tional 	 it ems 													 s egmen t 	 r e sult
segment result
2 011	
£m
2 010	
£m
2 011	
£m
2 010	
£m
2 011	
£m
2 010	
£m
continuing operations
c onsumer 145  134  108 34 37  100 
pr oductions 05  10  01 02 04  08 
 150  144  109 36 41  108 
ex c ep tional 	 legal 	 c o s t s 	 inc urr ed 	 in 	 litigation 	 with 	 itv 	 ne t w ork 	 plc 	 and 	 itv 	 plc	 40 35
oper ating 	 pr o fit 01  73 
financing 10 19
ex c ep tional 	 financing 	 c o s t s – 15
l o s s  pr o fit 	 be f or e 	 t ax 09 39 
t ax 	 cr edit 15  14 
pr o fit 	 fr om 	 the 	 y e ar 	 fr om 	 c on tinuing 	 oper ations 06  53 
discontinued operations
cinema – – – – – –
a t tribut able 	 t ax 	 cr edit – – – 15 –  15 
– – – 15 –  15 
ex c ep tional 	 lo s s 	 on 	 dispo s al 	 o f 	 dis c on tinued 	 oper ations – 15
pr o fit 	 f or 	 the 	 y e ar 	 fr om 	 dis c on tinued 	 oper ations – – 
profit attributable to equity shareholders 06  53 
								
oper ating 	 pr o fit 	 in 	 2 011 	 include s 	 £ 0 6m 	 arising 	 out side 	 the 	 uk 	 2 010 	 £ 0  7m 	 	 	 	 	 	
in 	 2 011 	 the 	 e x c ep tional 	 it ems 	 in 	 c onsumer 	 r elat e 	 t o 	 an 	 e x c ep tional 	 char ge 	 in 	 r elation 	 t o 	 the 	 itv 	 litigation 	 o f 	 £ 9 5m 	 and	 	
a 	 £13m 	 c o s t 	 o f 	 change 	 pr o vision 	 t he 	 e x c ep tional 	 it em 	 in 	 pr oductions 	 o f 	 £ 0  1m 	 r elat e s 	 t o 	 a 	 c o s t 	 o f 	 change 	 pr o vision	 	 	
i n 	 2 0 1 0  	 t h e 	 e x c e p t i o n a l 	 i t e m s 	 i n 	 c o n s u m e r 	 r e l a t e d 	 t o 	 a 	 w r i t e d o w n 	 o f 	 fi l m 	 s t o c k 	 o f 	 £ 2  7 m 	 a n d 	 a 	 £ 0  7 m 	 c o s t 	 o f 	 c h a n g e 	 p r o v i s i o n 	
t he 	 e x c ep tional 	 it em 	 in 	 pr oductions 	 o f 	 £ 0 2m 	 r elat ed 	 t o 	 a 	 c o s t 	 o f 	 change 	 pr o vision	 	 	 	 	 	
	 	 	 annual report and accounts 2011
a cco u n t s 74
5 	 b usine s s 	 s egmen t s 	continued
												 as s e t s 												 liabilitie s
segment assets and liabilities
2 011
£m
2 010
£m
2 011
£m
2 010
£m
c onsumer 387  443  238  349 
pr oductions 298  341  21  29 
t otal of all segments 685  784  259  378 
unalloc at ed 	 c orpor at e 182  206  905  810 
consolidated 867  990  1164  1188 
other segment information
															 c onsumer 										 pr oductions
2 011
£m
2 010
£m
2 011
£m
2 010
£m
c apit al 	 additions 18  08 – – 
depr eciation 24  25 – – 
s egmen t 	 as s e t s 	 c onsis t 	 primarily 	 o f 	 goodwill 	 pr oper t y  	 plan t 	 and 	 equipmen t  	 in v en t orie s 	 and 	 tr ade 	 and 	 o ther 	 r ec eiv able s	 	
and 	 c ash 	 and 	 b ank 	 depo sit s  	 t he y 	 e x clude 	 de f err ed 	 t ax 	 as s e t s 	 	 	 	 	 	 	 	
s egmen t 	 liabilitie s 	 c ompris e 	 oper ating 	 liabilitie s 	 including 	 tr ade 	 and 	 o ther 	 p a y able s 	 and 	 pr o visions  	 t he y 	 e x clude 	 gr oup	
borr o wings  	 r e tir emen t 	 bene fit 	 obligations  	 t ax 	 liabilitie s  	 dividends 	 p a y able 	 and 	 o ther 	 non–c urr en t 	 liabilitie s 	 	 	
						
all 	 the 	 ne t 	 as s e t s 	 in 	 2 010 	 and 	 2 011 	 w er e 	 held 	 in 	 the 	 uk 	 and 	 ther e f or e 	 oper at e 	 in 	 a 	 single 	 geogr aphic al 	 s egmen t 	 	 	
						
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 75
6	 oper ating 	 e xpens e s 	 b y 	 nat ur e
2 011	
£m
2 010
£m
pr ogr amming 	 c o s t s 544 580
s t af f 	 c o s t s 131  164 
other 	 e xt ernal 	 char ge s 147  168 
d e p r e c i a t i o n	 24  25 
oper ating 	 le as e 	 char ge s
– 	 plan t 	 and 	 machinery 01  10 
– 	 o ther 21  24 
other 	 oper ating 	 char ge s 02  02 
 870  973 
a t tribut able 	 t o
c on tinuing 870  904 
dis c on tinued –  69 
 870  973 
services provided by the group’s auditor
during 	 the 	 y e ar 	 the 	 gr oup 	 ob t ained 	 the 	 f ollo wing 	 s ervic e s 	 fr om 	 the 	 c omp an y s 	 audit or 
2 011	
£m
2 010
£m
gr oup
f ee s 	 p a y able 	 t o 	 c omp an y 	 audit or 	 f or 	 the 	 audit 	 o f 	 p ar en t 	 c omp an y 	 and 	 c ons olidat ed 	 financial 	 s t at emen t s 01  01 
f ee s 	 p a y able 	 t o 	 the 	 c omp an y s 	 audit or 	 and 	 it  s 	 as s ociat e s 	 f or 	 o ther 	 s ervic e s
– 	 t he 	 audit 	 o f 	 c omp an y s 	 sub sidiarie s 	 pur suan t 	 t o 	 legislation 01  01 
– 	 other 	 s ervic e s 	 pur suan t 	 t o 	 legislation –  01 
– 	 t ax 	 s ervic e s 02  03 
– 	 other –  01 
 04  07 
included 	 in 	 the 	 audit 	 f ee s 	 p a y able 	 is 	 £5k 	 2 010 	 £5k  	 p aid 	 in 	 r e spect 	 o f 	 the 	 p ar en t 	 c omp an y 	 	 	 	 	
	 	 	 	
other 	 s ervic e s 	 pur suan t 	 t o 	 legislation 	 include 	 f ee s 	 f or 	 dispo s al 	 o f 	 p e arl 	  	 de an	 	 	 	 	 	
	 	 	
other 	 non– audit 	 s ervic e s 	 c ompris e 	 emplo y ee 	 bene fit 	 advis ory 	 s ervic e s 	 	 	 	 	 	 	
	 	 annual report and accounts 2011
a cco u n t s 76
7	staff											
t he 	 a v er age 	 mon thly 	 number 	 o f 	 emplo y ee s 	 including 	 e x ec utiv e 	 dir ect or s  	 w as	 	 	 	 	 	
2 011
number
2 010
number
consumer and productions
es t ablished 350  346 
c on tr act 37  23 
 387  369 
cinema
es t ablished –  16 
c on tr act –  1 
 –  17 
total 387  386 
											
c on tr act 	 s t af f 	 number s 	 c onsis t 	 o f 	 emplo y ee s 	 on 	 fix ed–t erm 	 c on tr act s 	 	 	 	 	 	 	
t heir 	 aggr egat e 	 r emuner ation 	 c ompris ed	 	 	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
w age s 	 and 	 s alarie s 110  129 
s ocial 	 s ec urit y 	 c o s t s 11  11 
r e tir emen t 	 bene fit 	 obligation 	  s ee 	 no t e 	 2 9 10  24 
 131  164 
											
i n c l u d e d 	 w i t h i n 	 t h e 	 r e t i r e m e n t 	 o b l i g a t i o n 	 a b o v e 	 i s 	 a 	 £ 2  3 m 	 p e n s i o n 	 c o s t 	  2 0 1 0  	 £ 2  8 m  	 a n d 	 a 	 £ 1  3 m 	 i n t e r e s t 	 c r e d i t 	  2 0 1 0  	 £ 0  4 m  	 	
t he 	 in t er e s t 	 elemen t 	 is 	 included 	 within 	 financ e 	 c o s t s 	 on 	 the 	 f ac e 	 o f 	 the 	 inc ome 	 s t at emen t 	 	 	 	 	
	
de t ails 	 o f 	 dir ect or s ’ 	 r emuner ation 	 is 	 pr o vided 	 in 	 the 	 r emuner ation 	 c ommit t ee 	 r epor t 	 on 	 p age s 	 4 8 	 t o 	 5 8	 	 	 	
					
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 77
8	 ex c ep tional 	 it ems
 i  litigation matters 
	 on 	 2 7 	 april 	 2 011 	 s tv 	 agr eed 	 a 	 wide 	 r anging 	 s e t tlemen t 	 with 	 itv 	 plc 	 and 	 itv 	 ne t w ork 	 o v er 	 v arious 	 longs t anding 	 legal	
disput e s  	 under 	 the 	 t erms 	 o f 	 the 	 s e t tlemen t  	 s tv 	 will 	 p a y 	 itv 	 £18 0m 	 o f 	 which 	 £7 2m 	 w as 	 p aid 	 in 	 c ash 	 in 	 2 011 	 t he 	 r emaining	
£10 8m 	 will 	 be 	 p aid 	 in 	 c ash 	 fr om 	 e xis ting 	 b ank 	 f acilitie s 	 in 	 18 	 equal 	 ins t almen t s 	 fr om 	 january 	 2 012 	 t o 	 june 	 2 013  	 	 	
	
t he 	 s e t tlemen t 	 has 	 been 	 r ec ognis ed 	 as 	 f ollo w s
								
	 •	 t he 	 e x c ep tional 	 writ e 	 o f f 	 o f 	 legal 	 and 	 o ther 	 c o s t s 	 inc urr ed 	 b y 	 the 	 gr oup 	 in 	 r elation 	 t o 	 the 	 claims 	 o f 	 £ 4  0m 	 2 010 	 £3 5m 
	 •	 t he 	 r ec ognition 	 o f 	 an 	 e x c ep tional 	 char ge 	 o f 	 £ 9 5m	 	 	 	 	 	 	 	
								
 ii  cost of change         
a 	 pr o vision 	 o f 	 £1 4m 	 has 	 been 	 r ec ognis ed 	 during 	 the 	 y e ar 	 mainly 	 in 	 r elation 	 t o 	 r e s truct uring 	 the 	 ne w s 	 oper ation 	 a 	 pr o vision	
o f 	 £ 0  9m 	 w as 	 r ec ognis ed 	 during 	 in 	 2 010 	 in 	 r elation 	 t o 	 r e s truct uring 	 within 	 the 	 busine s s 	 	 	 	 	
	 	 	
 iii  writedown of inventory 
a 	 s t ock 	 writ edo wn 	 o f 	 £2 7m 	 w as 	 r ec ognis ed 	 in 	 2 010 	 in 	 r elation 	 t o 	 film 	 s t ock 	 as 	 a 	 r e sult 	 o f 	 ne w 	 in f ormation 	 r ec eiv ed 	 	 	
	
 iv  finance costs 
a 	 lo s s 	 on 	 e xtinguishmen t 	 o f 	 deb t 	 o f 	 £15m 	 w as 	 r ec ognis ed 	 in 	 2 010  	 on 	 3 	 f ebruary 	 2 010  	 the 	 gr oup 	 r enego tiat ed 	 it s 	 b anking	
f acilitie s 	 in 	 p ar t 	 t o 	 enable 	 a 	 dispo s al 	 o f 	 p e arl 	  	 de an 	 and 	 the 	 £15m 	 lo s s 	 r epr e s en t s 	 the 	 writ e 	 o f f 	 o f 	 unamor tis ed 	 f ee s 	 in	
r e spect 	 o f 	 the 	 original 	 deb t 	 obligations 
9 	 financ e 	 c o s t s
2 011
£m
2 010
£m
b ank 	 borr o wings 25  25 
p ension 	 financ e 	 cr edit 13 04
interest expense excluding exceptional items 12  21 
ex c ep tional 	 financ e 	 c o s t s 	  s ee 	 no t e 	 8 – 15 
t otal interest expense 12  36 
included 	 within 	 b ank 	 borr o wings 	 is 	 £ 0  4m 	 o f 	 unamor tis ed 	 b ank 	 f ee s 	 writ t en 	 o f f 	 during 	 the 	 y e ar  annual report and accounts 2011
a cco u n t s 78
10 	 dis c on tinued
t he 	 dispo s al 	 o f 	 the 	 gr oup ’ s 	 cinema 	 busine s s  	 p e arl 	  	 de an 	 c omple t ed 	 on 	 14 	 ma y 	 2 010 	 	 	 	 	
t he 	 po s t 	 t ax 	 r e sult s 	 fr om 	 dis c on tinued 	 oper ations 	  s ee 	 no t e 	 5 	 w er e 	 £nil 	 2 010 	 £nil 	 	
included 	 within 	 the 	 r e sult s 	 f or 	 2 010 	 is 	 the 	 e x c ep tional 	 lo s s 	 on 	 dispo s al 	 o f 	 p e arl 	  	 de an 	 limit ed 	 which 	 w as 	 s old 	 t o 	 image 	 l t d	
“image ” 	 f or 	 a 	 gr o s s 	 c ash 	 c onsider ation 	 o f 	 £1 	 r e sulting 	 in 	 a 	 £nil 	 po s t 	 t ax 	 r e sult 	 on 	 dispo s al 	 p e arl 	  	 de an 	 p aid 	 the 	 2 010	
minimum 	 inc ome 	 guar an t ee 	 o f 	 £17 6m 	 t o 	 v ue 	 cinemas 	 b y 	 w a y 	 o f 	 an 	 in t er c omp an y 	 lo an 	 fr om 	 s tv  	 as 	 p ar t 	 o f 	 the 	 de al 	 agr eed	
with 	 image  	 p e arl 	  	 de an 	 w er e 	 t o 	 r ep a y 	 the 	 por tion 	 o f 	 this 	 lo an 	 r elating 	 t o 	 the 	 period 	 fr om 	 1 	 ma y 	 2 010 	 t o 	 3 1 	 dec ember 	 2 010	
amoun ting 	 t o 	 £ 9  1m 	 t he 	 fir s t 	 r ep a ymen t 	 o f 	 £25m 	 w as 	 r ec eiv ed 	 upon 	 c omple tion 	 fur ther 	 p a ymen t s 	 o f 	 £5  1m 	 w er e 	 r ec eiv ed 	 	
t o 	 3 1 	 dec ember 	 2 010 	 and 	 the 	 b alanc e 	 w as 	 fully 	 r ep aid 	 in 	 january 	 and 	 f ebruary 	 2 011	 	 	 	 	
		
cash flows from discontinued operations
2 011
£m
2 010
£m
ne t 	 c ash 	 in flo w  out flo w  	 fr om 	 oper ating 	 activitie s	 	 	 	 	 15  95
t he 	 ne t 	 liabilitie s 	 o f 	 p e arl 	  	 de an 	 at 	 the 	 dat e 	 o f 	 dispo s al 	 w er e 	 as 	 f ollo w s	 	 	 	 	
3 0 	 april	
2 010	
	 £m
pr oper t y  	 plan t 	 and 	 equipmen t 05 
in t angible 	 as s e t s 02 
t r ade 	 and 	 o ther 	 r ec eiv able s 229 
t r ade 	 and 	 o ther 	 p a y able s 43
t ax 	 liabilitie s 15
w orking 	 c apit al 	 adjus tmen t 	 agr eed 	 as 	 p ar t 	 o f 	 dispo s al	 14 
 192 
oner ous 	 c on tr act 	 pr o vision 	 r ele as ed 119
l o an 	 due 	 t o 	 s tv 	 gr oup 	 plc 91
 210
ne t 	 liabilitie s 18
dispo s al 	 e xpens e s 18 
gainloss on disposal –
t otal consideration –
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 79
11	 t ax
2 011
£m
2 010
£m
c urr en t 	 t ax
uk 	 c orpor ation 	 t ax 	 on 	 pr o fit 	 f or 	 the 	 y e ar – –
uk 	 c orpor ation 	 t ax 	 adjus tmen t 	 in 	 r e spect 	 o f 	 prior 	 y e ar s –  07
 –  07
de f err ed 	 t ax
origination 	 and 	 r e v er s al 	 o f 	 timing 	 dif f er enc e s 15 22
t ax credit for the year 15 29
a t tribut able 	 t o
c on tinuing 	 oper ations 15 14
dis c on tinued 	 oper ations –  15
 15 29
t he 	 char ge 	 f or 	 the 	 y e ar 	 c an 	 be 	 r ec onciled 	 t o 	 the 	 lo s s  pr o fit 	 per 	 the 	 inc ome 	 s t at emen t 	 as 	 f ollo w s
2 011
£m
2 010
£m
l o s s  pr o fit 	 be f or e 	 t ax 	 fr om 	 c on tinuing 	 oper ations 09 39 
l o s s 	 be f or e 	 t ax 	 fr om 	 dis c on tinued 	 oper ations –  15
lossprofit before tax 09 24 
t ax 	 at 	 the 	 uk 	 c orpor ation 	 t ax 	 r at e 	 o f 	 2 65  	 2 010 	 2 8 	 02 07 
other 	 e xpens e s 	 no t 	 deductible 	 f or 	 t ax 	 purpo s e s 02  – 
mo v emen t 	 in 	 t ax 	 lo s s e s 15 12
a djus tmen t s 	 t o 	 t ax 	 char ge 	 in 	 r e spect 	 o f 	 prior 	 y e ar s –  38
t ax 	 e f f ect 	 o f 	 e x c ep tional 	 it ems	 –  14 
t ax credit for the year 15 29
12	 dividends
no 	 dividend 	 is 	 pr opo s ed 	 b y 	 the 	 b o ar d 	 f or 	 the 	 y e ar s 	 ended 	 3 1 	 dec ember 	 2 010 	 and 	 2 011		 	 	 	 	
	 	 annual report and accounts 2011
a cco u n t s 80
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued
13 	 e arnings lo s s  	 per 	 shar e	 	 	 	 	 	 	 	 	 	
b asic 	 e arnings 	 per 	 shar e 	 “ep s ” 	 is 	 c alc ulat ed 	 b y 	 dividing 	 the 	 pr o fit 	 at tribut able 	 t o 	 equit y 	 shar eholder s 	 b y 	 the 	 w eigh t ed 	
a v er age 	 number 	 o f 	 or dinary 	 shar e s 	 in 	 is sue 	 during 	 the 	 period 	 e x cluding 	 or dinary 	 shar e s 	 pur chas ed 	 b y 	 the 	 c omp an y 	 and 	 held	
as 	 tr e asury 	 shar e s  	 	 	 	 	 	 	 	 	 	
in 	 or der 	 t o 	 c alc ulat e 	 dilut ed 	 ep s  	 the 	 w eigh t ed 	 a v er age 	 number 	 o f 	 or dinary 	 shar e s 	 in 	 is sue 	 is 	 adjus t ed 	 t o 	 as sume 	 c on v er sion	 	
o f 	 all 	 dilutiv e 	 po t en tial 	 or dinary 	 shar e s  	 t he 	 c omp an y 	 has 	 one 	 t ype 	 o f 	 dilutiv e 	 po t en tial 	 or dinary 	 shar e s 	 namely 	 shar e 	 op tions	
gr an t ed 	 t o 	 emplo y ee s 	 	 	 	 	 	 	 	 	
ep s 	 has 	 been 	 pr e s en t ed 	 belo w 	 bo th 	 including 	 and 	 e x cluding 	 e x c ep tional 	 it ems 	 in 	 or der 	 t o 	 pr o vide 	 a 	 fuller 	 under s t anding	 	
o f 	 the 	 gr oup ’ s 	 underlying 	 perf ormanc e 	 	 	 	 	 	 	 	 	 	
e arnings
£m
2 011
w eigh t ed	
a v e r a g e	
number 	 o f	
shar e s 	  m 
p er 	 shar e
p enc e
e arnings
£m
r est a t e d	
2 010
w eigh t ed	
a v er age	
number 	 o f	
shar e s 	  m 
r est a t e d
p er 	 shar e
pe n ce
underlying 	 ep s
e arnings 	 at tribut able 	 t o 	 or dinary 	 shar eholder s	 140  368 380p 125  364 343p
basic eps
basic underlying eps from continuing operations 140  368 380p 125  364 343p
diluted eps
own 	 shar e s 	 pur chas ed 20  16 
diluted underlying eps from continuing operations 140  388 361p 125  380 329p
eps including exceptional items
e arnings 	 at tribut able 	 t o 	 or dinary 	 shar eholder s	
including 	 e x c ep tional 	 it ems 
 
06  368 16p 53  364 146p
eps from continuing operations
basic eps 06  368 16p 53  364 146p
pr e–t ax 	 lo s s 	 fr om 	 dis c on tinued 	 oper ations –  –  15 41p
t ax 	 r elating 	 t o 	 dis c on tinued 	 oper ations –  –  15 41p
basic eps from continuing operations 06  368 16p 53  364 146p
diluted eps
own 	 shar e s 	 pur chas ed 20  16 
diluted eps from continuing operations 06  388 15p 53  380 139p
eps from discontinued operations
basic eps
pr e–t ax 	 lo s s  	 fr om 	 dis c on tinued 	 oper ations –  368  –  15 364 41p
t ax 	 r elating 	 t o 	 dis c on tinued 	 oper ations –  –  15 41p
basic eps from discontinued operations –  368 – –  364 –
diluted eps
own 	 shar e s 	 pur chas ed 20  16 
diluted eps from discontinued operations –  388  –  –  380  – 
t he 	 2 010 	 ep s 	 figur e s 	 ha v e 	 been 	 r e s t at ed 	 t o 	 e x clude 	 or dinary 	 shar e s 	 held 	 b y 	 the 	 emplo y ee 	 shar e 	 t rus t 	 fr om 	 the 	 w eigh t ed 	
a v er age 	 number 	 o f 	 or dinary 	 shar e s 	 c alc ulation	 	 	 	 	 	 	 	 81
14 	 goodwill 	 and 	 o ther 	 in t angible 	 as s e t s	 	 	 	 	 	 	 	
goodwill 	 at 	 1 	 january 	 and 	 3 1 	 dec ember 	 2 011 	 w as 	 £7  9m 	 2 010 	 £7  9m  	 it 	 c ompris e s 	 c apit alis ed 	 goodwill 	 on 	 ac quisitions	
c omple t ed 	 sinc e 	 1 	 january 	 199 8 	 and 	 the 	 c o s t 	 and 	 amor tis ation 	 is 	 split 	 £10 6m 	 and 	 £2 7m 	 r e spectiv ely 	 	 	 	
					
t he 	 gr oup 	 t e s t s 	 goodwill 	 annually 	 f or 	 imp airmen t  	 or 	 mor e 	 fr equen tly 	 if 	 ther e 	 ar e 	 indic ations 	 that 	 goodwill 	 migh t 	 be 	 imp air ed	 	
							
goodwill 	 is 	 alloc at ed 	 t o 	 the 	 gr oup ’ s 	 c ash–gener ating 	 unit s 	  c gus  	 iden tified 	 ac c or ding 	 t o 	 oper ating 	 s egmen t  	 all 	 goodwill 	
r ec ognis ed 	 at 	 the 	 y e ar 	 end 	 and 	 pr e vious 	 y e ar 	 end 	 r elat e s 	 t o 	 pr oductions 
t he 	 r ec o v er able 	 amoun t 	 o f 	 a 	 c gu 	 is 	 de t ermined 	 b as ed 	 on 	 v alue–in–us e 	 c alc ulations  	 t he s e 	 c alc ulations 	 us e 	 po s t –t ax 	 c ash 	 flo w 	
pr ojections 	 b as ed 	 on 	 financial 	 budge t s 	 appr o v ed 	 b y 	 managemen t 	 c o v ering 	 a 	 f our 	 y e ar 	 period 	 c ash 	 flo w s 	 be y ond 	 the 	 f our 	 y e ar 	
period 	 ar e 	 e xtr apolat ed 	 using 	 an 	 e s timat ed 	 gr o wth 	 r at e 	 o f 	 2 	 t he 	 gr o wth 	 r at e 	 is 	 no t 	 c onsider ed 	 t o 	 e x c eed 	 the 	 long–t erm	
a v er age 	 gr o wth 	 r at e 	 f or 	 the 	 media 	 busine s s 	 in 	 which 	 the 	 c gu 	 oper at e s  	 	 	 	 	 	 	 	
	 	
t he 	 k e y 	 as sump tions 	 us ed 	 f or 	 v alue–in–us e 	 c alc ulations 	 ar e 	 as 	 f ollo w s	 	 	 	 	 	 	
	 	
gr o wth 	 r at e	 	 	 2 00	 	 	 	 	
dis c oun t 	 r at e	 	 	 11 00	 	 	 	 	
									
m a n a g e m e n t 	 d e t e r m i n e d 	 n e t 	 c a s h 	 f l o w 	 b a s e d 	 o n 	 p a s t 	 p e r f o r m a n c e 	 a n d 	 i t s 	 e x p e c t a t i o n s 	 o f 	 m a r k e t 	 d e v e l o p m e n t 	 	
no 	 imp airmen t 	 char ge 	 is 	 c onsider ed 	 t o 	 ha v e 	 aris en 	 this 	 y e ar 	 	 	 	 	 	 	 	
								
15 	 pr opert y  	 plan t 	 and 	 equipmen t	 	 	 	 	 	 	 	 	 	
l e as ehold	
b u i l d i n g s	
£m
plan t 	 	
t echnic al
equipmen t
and 	 o ther
£m
total
£m
cost 
a t 	 1 	 january 	 2 010 02  229  231 
a dditions –  08  08 
f ully 	 writ t en 	 do wn –  01 01
a t 	 1 	 january 	 2 011 02  236  238 
a dditions –  18  18 
dispo s als –  01 01
at 31 december 2011 02  253  255 
accumulated depreciation and impairment
a t 	 1 	 january 	 2 010 01  109  110 
char ge 	 f or 	 y e ar –  25  25 
dispo s als –  03  03 
f ully 	 writ t en 	 do wn –  01 01
a t 	 1 	 january 	 2 011 01  136  137 
char ge 	 f or 	 y e ar –  24  24 
dispo s als –  01 01
at 31 december 2011 01  159  160 
net book value at 31 december 2011 01  94  95 
ne t 	 book 	 v alue 	 at 	 3 1 	 dec ember 	 2 010 01  100  101 
										 annual report and accounts 2011
a cco u n t s 82
16	 in v en t orie s	 	 	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
film 	 righ t s 55  92 
r ec or ded 	 pr ogr amme s 	 and 	 films 236  266 
 291  358 
										
included 	 within 	 r ec or ded 	 pr ogr amme s 	 and 	 films 	 is 	 a 	 pr o vision 	 o f 	 £nil 	 2 010£ 0 8m 	 	 	 	 	 	
	 	 	
t he 	 dir ect or s 	 c onsider 	 that 	 the 	 c arrying 	 amoun t 	 o f 	 in v en t orie s 	 appr o ximat e s 	 it s 	 f air 	 v alue  	 	 	 	 	 	
													
17 	 t r ade 	 and 	 o ther 	 r ec eiv able s	 	 	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
t r ade 	 r ec eiv able s 89  106 
l e s s 	 pr o vision 	 f or 	 imp airmen t 	 o f 	 r ec eiv able s – – 
t r ade 	 r ec eiv able s 	 – 	 ne t 89  106 
pr ep a ymen t s 	 and 	 ac crued 	 inc ome 95  87 
other 	 r ec eiv able s 58  71 
 242  264 
										
as 	 o f 	 3 1 	 dec ember 	 2 011 	 tr ade 	 r ec eiv able s 	 o f 	 £ 0  4m 	 2 010 	 £ 0  7m  	 ar e 	 p as t 	 due 	 but 	 no t 	 imp air ed 	 t he s e 	 ar e 	 ne t 	 o f 	 a 	 pr o vision	
f or 	 b ad 	 deb t s 	 o f 	 £nil 	 2 010 	 £nil 	 t r ade 	 r ec eiv able s 	 r elat e 	 t o 	 a 	 number 	 o f 	 independen t 	 c us t omer s 	 f or 	 whom 	 ther e 	 is 	 no 	 r ec en t	
his t ory 	 o f 	 de f ault  	 t he 	 ageing 	 analy sis 	 o f 	 the 	 tr ade 	 r ec eiv able s 	 is 	 as 	 f ollo w s	 	 	 	 	 	 	
g ro s s
£m
2 011
pr o vision
£m
g r oss
£m
2 010
pr o vision
£m
up 	 t o 	 3 	 mon ths 89 –  105 – 
3 	 t o 	 5 	 mon ths – –  – – 
ov er 	 5 	 mon ths – –  01 – 
 89 –  106 – 
										
t he 	 dir ect or s 	 c onsider 	 that 	 the 	 c arrying 	 amoun t 	 o f 	 tr ade 	 and 	 o ther 	 r ec eiv able s 	 appr o ximat e s 	 their 	 f air 	 v alue  	 all 	 r ec eiv able s 	 ar e	
e xpect ed 	 t o 	 be 	 r ec o v er ed	 	 	 	 	 	 	 	 	 	 	
	 	 	 	
18	 c ash 	 and 	 c ash 	 equiv alen t s	 	 	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
c ash 	 and 	 c ash 	 equiv alen t s 05 	 7 6	
shor t –t erm 	 depo sit s – 	0 1	
	
t he 	 shor t –t erm 	 b ank 	 depo sit 	 r elat ed 	 t o 	 c er t ain 	 planning 	 c ons en t s 	 being 	 s ough t 	 b y 	 prime sigh t 
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 83
19 	 t r ade 	 and 	 o ther 	 p a y able s	 	 	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
amoun t s 	 f alling 	 due 	 within 	 one 	 y e ar
t r ade 	 and 	 o ther 	 p a y able s 231  150 
s ocial 	 s ec urit y 	 and 	 o ther 	 t ax e s 21  52 
other 	 p a y able s 04  88 
 256  290 
amoun t s 	 f alling 	 due 	 aft er 	 one 	 y e ar
t r ade 	 and 	 o ther 	 p a y able s 07  25 
	
t he 	 dir ect or s 	 c onsider 	 that 	 the 	 c arrying 	 amoun t 	 o f 	 tr ade 	 and 	 o ther 	 p a y able s 	 appr o ximat e s 	 their 	 f air 	 v alue 	 	 	 	
					
t he 	 c omp an y’ s 	 polic y 	 is 	 t o 	 s e t tle 	 the 	 t erms 	 o f 	 p a ymen t 	 with 	 supplier s 	 b y 	 inclusion 	 o f 	 the 	 r ele v an t 	 t erms 	 in 	 c on tr act s 	 and 	 t o 	 p a y	
in 	 ac c or danc e 	 with 	 it s 	 c on tr act ual 	 and 	 o ther 	 legal 	 obligations  	 t r ade 	 cr edit or s 	 o f 	 the 	 gr oup 	 at 	 3 1 	 dec ember 	 2 011 	 w er e 	 equiv alen t	
t o 	 54 	 da y s 	 o f 	 pur chas e s 	 2 010 	 46 	 da y s 	 	 	 	 	 	 	 	 	
2 0 	 b orr o wings	 	 	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
b ank 	 lo ans 550  599 
t he 	 borr o wings 	 ar e 	 r ep a y able 	 as 	 f ollo w s
expiring 	 within 	 1 	 y e ar 550  50 
expiring 	 in 	 2 	 t o 	 5 	 y e ar s – 549 
										
all 	 undr a wn 	 c ommit t ed 	 borr o wing 	 f acilitie s 	 ar e 	 r ep a y able 	 within 	 one 	 y e ar 	 2 010 	 t w o 	 t o 	 fiv e 	 y e ar s 	 	 	 	
	 	 	 	
t he 	 dir ect or s 	 c onsider 	 that 	 the 	 v alue 	 o f 	 c urr en t 	 borr o wings 	 appr o ximat e 	 their 	 f air 	 v alue 	 	 	 	 	
t he 	 e f f ectiv e 	 in t er e s t 	 r at e s 	 w er e 	 as 	 f ollo w s	
2 011

2 010

b ank 	 lo ans 	  flo ating 55 40
a t 	 3 1 	 dec ember 	 2 011 	 the 	 c omp an y 	 had 	 b ank 	 f acilitie s 	 in 	 plac e 	 t o t alling 	 £ 6 5  0m 	 c onsis ting 	 o f 	 a 	 £5 5  0m 	 t erm 	 f acilit y 	 and 	 a	
£10  0m 	 r e v olving 	 cr edit 	 and 	 o v er dr aft 	 f acilit y  	 t he 	 f acilitie s 	 w er e 	 due 	 t o 	 e xpir e 	 on 	 3 1 	 dec ember 	 2 012 	 in 	 s ep t ember 	 2 011 	 the	
c omp an y 	 c ommenc ed 	 dis c us sions 	 with 	 lender s 	 t o 	 amend 	 the 	 f acilit y 	 and 	 on 	 2 0 	 january 	 2 012 	 the 	 r ene w al 	 o f 	 the 	 f acilit y 	 w as	
agr eed 	 under 	 ia s 	 1 	  r e vis ed 	 p ar a 	 7 4  	 r enego tiation 	 o f 	 the 	 b ank 	 f acilitie s 	 on 	 2 0 	 january 	 2 012 	 r epr e s en t s 	 a 	 non 	 adjus ting 	 po s t	
b alanc e 	 shee t 	 e v en t 	 and 	 c ons equen tly 	 the 	 borr o wings 	 ha v e 	 all 	 been 	 clas sified 	 as 	 c urr en t 	 liabilitie s 	 as 	 at 	3 1 	 dec ember 	 2 011	 	
t he 	 r enego tiat ed 	 s yndic at ed 	 f acilitie s 	 t o t al 	 £7 0  0m 	 and 	 c ompris e 	 a 	 £3 7 5m 	 t erm 	 f acilit y 	 and 	 £3 25m 	 r e v olving 	 cr edit 	 and	
o v er dr aft 	 f acilit y 	 with 	 3 1 	 dec ember 	 2 014 	 mat urit y 	 dat e s  	 t he 	 t erm 	 lo an 	 p ar tially 	 amor tis e s 	 acr o s s 	 the 	 f acilit y 	 t erm 	 s ec urit y	 	
is 	 pr o vided 	 t o 	 the 	 deb t 	 pr o vider s 	 b y 	 w a y 	 o f 	 cr o s s 	 guar an t ee s 	 and 	 a 	 shar e 	 pledge 
a t 	 3 1 	 dec ember 	 2 011 	 £10  0m 	 2 010 	 £10  0m  	 o f 	 the 	 £ 6 5m 	 b ank 	 f acilit y 	 in 	 plac e 	 at 	 that 	 dat e 	 r emains 	 undr a wn	 	 	
															 annual report and accounts 2011
a cco u n t s 84
2 1	 de f err ed 	 t ax	 	 	 	 	 	 	 	 	 	
t he 	 mo v emen t 	 in 	 de f err ed 	 t ax 	 as s e t s 	 and 	 liabilitie s 	 during 	 the 	 y e ar  	 t aking 	 in t o 	 c onsider ation 	 the 	 o f f s e t ting 	 o f 	 b alanc e s 	 within	
the 	 s ame 	 t ax 	 juris diction 	 is 	 as 	 f ollo w s	 	 	 	 	 	 	 	 	
tax
tr ading	
l os ses
£m
short 	 t erm	
timing	
d i f f e r e n c e s	
£m
a c c eler at ed
ta x
depr eciation
£m
r e tir emen t
bene fit
obligations
£m
total
£m
a t 	 1 	 january 	 2 011 15 –  29 67 111
 cr edit  char ge 	 t o 	 inc ome 25 03 04 17  15
char ge 	 t o 	 equit y – – –  29 29
at 31 december 2011 40 03 33 79 155
										
t he 	 f ollo wing 	 is 	 the 	 analy sis 	 o f 	 the 	 c urr en t 	 de f err ed 	 t ax 	 b alanc e s	 	 	 	 	 	 	 	
2 011
	 £m
2 010
	 £m
de f err ed 	 t ax 	 as s e t 
de f err ed 	 t ax 	 t o 	 be 	 r ec o v er ed 	 aft er 	 mor e 	 than 	 one 	 y e ar 130 91
de f err ed 	 t ax 	 t o 	 be 	 r ec o v er ed 	 within 	 one 	 y e ar 25 20
 155 111
ne t 	 de f err ed 	 t ax 	 as s e t 155 111
de f err ed 	 t ax 	 as s e t 	 no t 	 r ec ognis ed 129 147
b as ed 	 on
t r ading 	 lo s s e s 	 and 	 non–tr ade 	 debit s 129 147
t he 	 de f err ed 	 t ax 	 as s e t 	 o f 	 £12 9m 	 which 	 has 	 no t 	 been 	 r ec ognis ed 	 r elat e s 	 t o 	 a 	 c ombination 	 o f 	 tr ading 	 t ax 	 lo s s e s 	 and	 	
non 	 tr ade 	 debit s 
during 	 the 	 y e ar  	 a 	 change 	 in 	 the 	 uk 	 c orpor ation 	 t ax 	 r at e 	 fr om 	 2 8  	 t o 	 2 6  	 e f f ectiv e 	 fr om 	 1 	 april 	 2 011 	 w as 	 sub s t an tiv ely	
enact ed 	 in 	 mar ch 	 2 011 	 a 	 fur ther 	 r eduction 	 t o 	 2 5  	 e f f ectiv e 	 fr om 	 1 	 april 	 2 012 	 w as 	 sub s t an tiv ely 	 enact ed 	 in 	 july 	 2 011 	 and 	 the	
r ele v an t 	 de f err ed 	 t ax 	 b alanc e s 	 ha v e 	 been 	 r e–me asur ed 	 ac c or dingly 	
in 	 addition 	 t o 	 the 	 change 	 in 	 r at e 	 o f 	 c orpor ation 	 t ax 	 dis clo s ed 	 abo v e  	 a 	 number 	 o f 	 fur ther 	 change s 	 t o 	 the 	 uk 	 c orpor ation 	 t ax	
s y s t em 	 w er e 	 announc ed 	 in 	 the 	 mar ch 	 2 011 	 uk 	 b udge t 	 s t at emen t  	 f ur ther 	 r eductions 	 t o 	 the 	 main 	 c orpor ation 	 t ax 	 r at e 	 ar e	
pr opo s ed 	 t o 	 r educ e 	 the 	 r at e 	 b y 	 1 	 per 	 annum 	 t o 	 2 3  	 b y 	 1 	 april 	 2 014  	 none 	 o f 	 the s e 	 r at e 	 r eductions 	 had 	 been 	 sub s t an tiv ely	
enact ed 	 at 	 the 	 b alanc e 	 shee t 	 dat e 	 and 	 ther e f or e  	 ar e 	 no t 	 included 	 in 	 the s e 	 financial 	 s t at emen t s 	 	 	 	 	
had 	 the 	 change 	 o f 	 r at e 	 t o 	 2 3  	 been 	 sub s t an tiv ely 	 enact ed 	 as 	 at 	 the 	 b alanc e 	 shee t 	 dat e  	 the 	 de f err ed 	 t ax 	 as s e t 	 included	 	
within 	 the 	 ac c oun t s 	 w ould 	 ha v e 	 been 	 r educ ed 	 b y 	 appr o ximat ely 	 £12m	 	 	 	 	 	 	
	 	
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 85
2 2	 pr o visions	 	 	 	 	 	 	 	 	 	
c ost
o f 	 change
pr o visions
other
pr o visions
total
pr o visions
2 011
£m
2 010
£m
2 011
£m
2 010
£m
2 011
£m
2 010
£m
a t 	 1 	 january	 08  01  37  47  45  48 
pr o vided 	 during 	 the 	 y e ar 14  09  –  –  14  09 
utilis ed 	 during 	 the 	 y e ar 10 02 07 10 17 12
at 31 december  12  08  30  37  42  45 
										
t he 	 pr o visions 	 ar e 	 e xpect ed 	 t o 	 be 	 utilis ed	 	 	 	 	
c ost
o f 	 change
pr o visions
other
pr o visions
total
pr o visions
2 011
£m
2 010
£m
2 011
£m
2 010
£m
2 011
£m
2 010
£m
	 w ithin 	 one 	 y e ar	 12  08  05  06  17  14 
	 gr e at er 	 than 	 one 	 y e ar	 – –  25  31  25  31 
 12  08  30  37  42  45 
										
a 	 c o s t 	 o f 	 change 	 pr o vision 	 o f 	 £1 4m 	 has 	 been 	 r ec ognis ed 	 during 	 the 	 y e ar 	 mainly 	 in 	 r elation 	 t o 	 r e s truct uring 	 within 	 the 	 ne w s	
oper ation 	 other 	 pr o visions 	 r elat e 	 t o 	 oner ous 	 le as e s 	 	 	 	 	 	 	 	 	
	 	 	
2 3 	 shar e 	 c apit al 	 and 	 pr emium	 	 	 	 	 	 	 	 	 	
number 	 o f	
shar e s
 thous ands 
or dinar y	
shar e s
£m
s h a r e	
pr emium	
£m
total
£m
a t 	 1 	 january 	 2 011 38336 192  1114  1306 
is sued 	 during 	 the 	 y e ar	 																																		 714 03  06  09 
at 31 december 2011 39050 195  1120  1315 
t he 	 t o t al 	 authoris ed 	 number 	 o f 	 or dinary 	 shar e s 	 is 	 63 	 million 	 shar e s 	 2 010 	 63 	 million 	 shar e s  	 with 	 a 	 p ar 	 v alue 	 o f 	 £ 0 50 	 per	
shar e 	 2 010 	 £ 0 50 	 per 	 shar e  	 all 	 is sued 	 shar e s 	 ar e 	 fully 	 p aid	 	 	 	 	 	 	 	
	
t he 	 gr oup 	 is sued 	 713  7 84 	 shar e s 	 during 	 the 	 y e ar 	 2 	 o f 	 the 	 t o t al 	 or dinary 	 shar e 	 c apit al 	 is sued 	 t o 	 be 	 held 	 f or 	 the 	 dis tribution	
o f 	 emplo y ee 	 lo y alt y 	 a w ar ds 	 	 	 	 	 	 	 	 	 annual report and accounts 2011
a cco u n t s 86
2 4 	 no t e s 	 t o 	 the 	 c ons olidat ed 	 s t at emen t 	 o f 	 c ash 	 flo w s	
								
2 011
£m
2 010
£m
continuing operations
oper ating 	 pr o fit 	 be f or e 	 e x c ep tional 	 it ems  150  144 
depr eciation 	 and 	 o ther 	 non–c ash 	 it ems 23  25 
oper ating 	 c ash 	 flo w s 	 be f or e 	 e x c ep tional 	 it ems 	 and 	 mo v emen t s 	 in 	 w orking 	 c apit al 173  169 
decr e as e 	 in 	 in v en t orie s 67  85 
decr e as e incr e as e  	 in 	 tr ade 	 and 	 o ther 	 r ec eiv able s 09  60
decr e as e  incr e as e 	 in 	 tr ade 	 and 	 o ther 	 p a y able s 71 11 
underlying cash generated by continuing operations 178  205 
litigation 	 mat t er s 112 35
c o s t s 	 o f 	 change 	 and 	 oner ous 	 pr oper t y 	 c o s t s 17 12
cash generated by continuing operations 49  158 
cash generatedused by discontinued operations 15  95
cash generated by operations 64  63 
analysis of movements in net debt
a t 	 1	 	
january	
2 011
£m
c ash	
fl ow
£m
	 a t 	 3 1	
dec ember
2 011
£m
c ash 	 and 	 c ash 	 equiv alen t s 	  no t e 	 18 76  71 05 
b ank 	 borr o wings 	  no t e 	 2 0 599 49  550
shor t 	 t erm 	 depo sit s 	  no t e 	 18 01  01 – 
net debt 522 23 545
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 87
2 5 	 c apit al 	 c ommitmen t s	 	 	 	 	 	 	 	 	 	
a t 	 3 1 	 dec ember 	 2 011 	 the 	 gr oup 	 had 	 no 	 c on tr act ed 	 f or 	 but 	 no t 	 pr o vided 	 c apit al 	 c ommitmen t s 	 2 010 	 nil	 	 	 	
														
2 6 		 oper ating 	 le as e 	 c ommitmen t s	 	 	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
oper ating 	 le as e 	 p a ymen t s 	 r ec ognis ed 	 in 	 the 	 inc ome 	 s t at emen t 	 f or 	 the 	 y e ar	 	 22  34 
										
a t 	 3 1 	 dec ember 	 the 	 gr oup 	 had 	 minimum 	 c ommitmen t s 	 in 	 r e spect 	 o f 	 non–c anc ellable 	 oper ating 	 le as e s 	 f or 	 le as ehold 	 buildings	
p a y able 	 as 	 f ollo w s	 	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
w ithin 	 one 	 y e ar 19 23
b e t w een 	 t w o 	 and 	 fiv e 	 y e ar s 62  88 
a ft er 	 fiv e 	 y e ar s 110  152 
 191  263 
										
2 7 	 c on tingen t 	 liabilitie s	 	 	 	 	 	 	 	 	 	
in 	 2 010  	 the 	 gr oup 	 had 	 a 	 100 	 holding 	 in 	 bo th 	 s c o t tish 	 media 	 gr oup 	 holdings  	 and 	 da wn 	 chorus 	 holdings  	 which 	 w er e	 	
unlimit ed 	 c omp anie s  	 b o th 	 c omp anie s 	 w er e 	 dis s olv ed 	 in 	 2 011
	
2 8 		 t r ans actions 	 with 	 r elat ed 	 p artie s
t her e 	 w er e 	 no 	 tr ans actions 	 with 	 an y 	 r elat ed 	 p ar tie s 	 during 	 the 	 y e ar 	 	 	 	 	 	 	
	 	
k e y 	 managemen t 	 per s onnel 	 ar e 	 deemed 	 t o 	 be 	 the 	 e x ec utiv e 	 and 	 non–e x ec utiv e 	 dir ect or s 	 o f 	 the 	 gr oup  	 as 	 the y 	 ha v e	 	
authorit y 	 and 	 r e sponsibilit y 	 f or 	 c on tr olling 	 the 	 gr oup ’ s 	 activitie s 	 	 	 	 	 	 	 	
	
k e y 	 managemen t 	 r emuner ation 	 is 	 de t ailed 	 as 	 f ollo w s	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
s alarie s 	 and 	 shor t –t erm 	 emplo y ee 	 bene fit s	 	 	 	 13  10 
t her e 	 ha v e 	 been 	 no 	 o ther 	 tr ans actions 	 with 	 k e y 	 managemen t 	 per s onnel 	 as 	 de fined 	 under 	 ia s 	 2 4 	 	 	 	
					 annual report and accounts 2011
a cco u n t s 88
2 9 	 r e tir emen t 	 bene fit 	 s cheme s
	
 defined contribution schemes
t h e 	 g r o u p 	 o p e r a t e s 	 t w o 	 m o n e y 	 p u r c h a s e 	 s c h e m e s  	 t h e 	 s t v 	 p e n s i o n 	 s c h e m e 	 a n d 	 t h e 	 p e a r l 	  	 d e a n 	 c i n e m a s 	 p e n s i o n 	 s c h e m e 	
f or 	 which 	 the 	 pension 	 c o s t 	 char ge 	 f or 	 the 	 y e ar 	 amoun t ed 	 t o 	 £ 0 6m 	 2 010 	 £ 0  4m 	 	 	 	 	 	
	 	 	
 defined benefit schemes
t he 	 gr oup 	 oper at e s 	 t w o 	 de fined 	 bene fit 	 pension 	 s cheme s  	 t he 	 s cheme s 	 ar e 	 trus t ee 	 adminis t er ed 	 and 	 the 	 s cheme s ’ 	 as s e t s 	 ar e 	
held 	 independen tly 	 o f 	 the 	 gr oup ’ s 	 financ e s  	 p ension 	 c o s t s 	 ar e 	 as s e s s ed 	 in 	 ac c or danc e 	 with 	 the 	 advic e 	 o f 	 an 	 independen t 	
pr o f e s sionally 	 qualified 	 act uary  	 	 	 	 	 	 	 	 	 	
									
t he 	 s cheme s 	 ar e 	 the 	 s c o t tish 	 and 	 gr ampian 	 t ele vision 	 r e tir emen t 	 b ene fit 	 s cheme 	 and 	 the 	 c aledonian 	 publishing 	 p ension 	
s cheme  	 t he y 	 ar e 	 clo s ed 	 s cheme s 	 and 	 ther e f or e 	 under 	 the 	 pr oject ed 	 unit 	 me thod 	 the 	 c urr en t 	 s ervic e 	 c o s t 	 will 	 incr e as e 	 as 	 the	
member s 	 o f 	 the 	 s cheme 	 appr o ach 	 r e tir emen t 	 	 	 	 	 	 	 	 	
a 	 full 	 act uarial 	 v aluation 	 o f 	 the 	 s cheme s 	 w as 	 c arried 	 out 	 at 	 1 	 january 	 2 009 	 and 	 updat ed 	 t o 	 3 1 	 dec ember 	 2 011 	 b y 	 a 	 qualified 	
independen t 	 act uary  		 t he 	 major 	 as sump tions 	 us ed 	 b y 	 the 	 act uary 	 w er e	 	 	 	 	 	
a t 	 3 1	
dec ember
2 011
a t 	 3 1	
dec ember
2 010
r at e 	 o f 	 incr e as e 	 in 	 s alarie s 100 100
r at e 	 o f 	 incr e as e 	 o f 	 pensions 	 in 	 p a ymen t 300 330
dis c oun t 	 r at e 495 555
in flation 	 300 330
										
 mortality rate         
as sump tions 	 r egar ding 	 fut ur e 	 mor t alit y 	 e xperienc e 	 ar e 	 s e t 	 b as ed 	 on 	 advic e  	 published 	 s t atis tic s 	 and 	 e xperienc e 	 in 	 e ach 	 t errit ory 	
t he 	 a v er age 	 lif e 	 e xpect anc y 	 in 	 y e ar s 	 o f 	 a 	 pensioner 	 r e tiring 	 at 	 age 	 6 5 	 is 	 as 	 f ollo w s	 	 	 	 	
a t 	 3 1	
dec ember
2 011
years
a t 	 3 1	
dec ember
2 010
years
r e tiring 	 at 	 b alanc e 	 shee t 	 dat e
male 143 150
f emale 171 179
r e tiring 	 in 	 2 0 	 y e ar s
male 166 166
f emale 195 195
amount charged to operating profit
2011
£m
2 010
£m
c urr en t 	 s ervic e 	 c o s t 	 – 	 de fined 	 bene fit 17 24
										
t he 	 t o t al 	 amoun t 	 char ged 	 t o 	 pr o fit 	 fr om 	 oper ations 	 is 	 £23m 	 2 010 	 £28m  	 which 	 als o 	 include s 	 the 	 de fined 	 c on tribution 	
char ge 	 o f 	 £ 0 6m 	 2 010 	 £ 0  4m 
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 89
a ct uarial 	 gains 	 and 	 lo s s e s 	 ha v e 	 been 	 included 	 in 	 the 	 s t at emen t 	 o f 	 c ompr ehensiv e 	 inc ome 	 	 	 	 	
amount credited to net finance costs
a t 	 3 1	
dec ember
2 011
£m
a t 	 3 1	
dec ember
2 010
£m
expect ed 	 r e t urn 	 on 	 s cheme 	 as s e t s 168  160 
i n t e r est 	 c ost 155 156
 13  04 
amount recognised in consolidated statement of comprehensive income
2 011
£m
2 010
£m
a ct ual 	 r e t urn 	 le s s 	 e xpect ed 	 r e t urn 	 on 	 pension 	 as s e t s 56 132 
experienc e 	 gains 	 and 	 lo s s e s 07 34 
change s 	 in 	 as sump tions 72 75
 135 91 
									
t he 	 f air 	 v alue 	 o f 	 the 	 as s e t s 	 in 	 the 	 s cheme s  	 the 	 pr e s en t 	 v alue 	 o f 	 the 	 liabilitie s 	 in 	 the 	 s cheme s 	 and 	 the 	 e xpect ed 	 r at e 	 o f 	 r e t urn 	 at	
e ach 	 b alanc e 	 shee t 	 dat e 	 w as	 	 	 	 	 	 	 	 	
at
3 1 	 dec ember
2 011
£m
at
3 1 	 dec ember
2 010
£m
at
3 1 	 dec ember
2 009
£m
at
3 1 	 dec ember
2 008
£m
at
3 1 	 dec ember
20 0 7
£m
e quitie s 1294  1327  1229  1086  1432 
b onds 1347  1296  1209  1067  1219 
f air 	 v alue 	 o f 	 s cheme s ’ 	 as s e t s 2641  2623  2438  2153  2651 
pr e s en t 	 v alue 	 o f 	 de fined 	 bene fit 	 obligations 2950 2852 2798 2536 2791
de ficit 	 in 	 the 	 s cheme s 309 229 360 383 140
e quitie s 80 80 80 80 80
b onds 3050 4256 4557 3766 4461
									
a 	 r elat ed 	 o f f s e t ting 	 de f err ed 	 t ax 	 as s e t 	 o f 	 £7  9m 	 2 010 	 £ 6 7m  	 is 	 included 	 under 	 non–c urr en t 	 as s e t s  	 t her e f or e 	 the 	 ne t 	 pension	
s cheme 	 de ficit 	 amoun t s 	 t o 	 £2 3  0m 	 at 	 3 1 	 dec ember 	 2 011 	 £162m 	 at 	 3 1 	 dec ember 	 2 010	 	 	 	 	
	 	 	 	
t he 	 mo v emen t 	 in 	 the 	 aggr egat e 	 s cheme 	 de ficit s 	 during 	 the 	 y e ar 	 w as 	 princip ally 	 due 	 t o 	 the 	 r eduction 	 in 	 the 	 dis c oun t 	 r at e 	 	
t he 	 mo v emen t 	 in 	 the 	 f air 	 v alue 	 o f 	 the 	 s cheme s ’ 	 as s e t s 	 during 	 the 	 y e ar 	 is 	 sho wn 	 as 	 f ollo w s	 	 	 	 	
2 011
£m
2 010
£m
a t 	 1 	 january 2623  2438 
expect ed 	 r e t urn 	 on 	 plan 	 as s e t s 168  160 
a ct uarial 	 lo s s e s  gains 56 132 
emplo y er 	 c on tributions 58  60 
emplo y ee 	 c on tributions 01  01 
b ene fit s 	 p aid 	 fr om 	 plan 	 c omp an y 153 168
a t 	 3 1 	 dec ember	 2641  2623 
									 annual report and accounts 2011
a cco u n t s 90
2 9 	 r e tir emen t 	 bene fit 	 s cheme s 	continued
mo v emen t 	 in 	 the 	 de fined 	 bene fit 	 obligation 	 is 	 as 	 f ollo w s	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
a t 	 1 	 january 2852  2798 
c urr en t 	 s ervic e 	 c o s t 17  24 
i n t e r est 	 c ost 154  156 
c on tributions 	 fr om 	 plan 	 p ar ticip an t s 01  01 
a ct uarial 	 lo s s e s 79  41 
b ene fit s 	 p aid 	 fr om 	 plan c omp an y 153 168
a t 	 3 1 	 dec ember	 2950  2852 
t he 	 act ual 	 r e t urn 	 on 	 plan 	 as s e t s 	 f or 	 the 	 y e ar 	 w as 	 £112m 	 2 010 	 £2 9 2m 	 	 	 	 	 	
history of experience gains and losses
at
3 1 	 dec ember
2 011
at
3 1 	 dec ember
2 010
at
3 1 	 dec ember
2 009
at
3 1 	 dec ember
2 008
at
3 1 	 dec ember
20 0 7
dif f er enc e 	 be t w een 	 the 	 e xpect ed 	 and 	 act ual 	 r e t urn	 	
on 	 s cheme 	 as s e t s
amoun t 	 £m  55  132 211  582 82
p er c en t age 	 o f 	 s cheme 	 as s e t s 2 5 9 27 3
experienc e 	 gains 	 and 	 lo s s e s 	 on 	 s cheme 	 liabilitie s
amoun t 	 £m  07 34  17 280 329
p er c en t age 	 o f 	 the 	 pr e s en t 	 v alue 	 o f 	 s cheme 	 liabilitie s – 1 10 11 12
t o t a l 	 a m o u n t 	 r e c o g n i s e d 	 i n 	 s t a t e m e n t 	 o f 	 r e c o g n i s e d	 	
inc ome 	 and 	 e xpens e
amoun t 	 £m  135 91  80 302 247 
p er c en t age 	 o f 	 the 	 pr e s en t 	 v alue 	 o f 	 s cheme 	 liabilitie s 5 3 3 16 9
										
t he 	 e s timat ed 	 amoun t 	 o f 	 c on tributions 	 e xpect ed 	 t o 	 be 	 p aid 	 t o 	 the 	 s cheme s 	 during 	 2 012 	 is 	 £5 2m	 	 	 	
									
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 91
3 0 	 shar e–b as ed 	 p a ymen t s	 	 	 	 	 	 	 	 	 	
t he 	 long–t erm 	 inc en tiv e 	 plan 	 is 	 f or 	 e x ec utiv e 	 dir ect or s 	 and 	 o ther 	 s enior 	 e x ec utiv e s  		 t he 	 perf ormanc e 	 crit eria 	 f or 	 this	 	
s cheme 	 ar e 	 b as ed 	 on 	 a 	 c ombination 	 o f 	 e arnings 	 gr o wth 	 and 	 t o t al 	 shar eholder 	 r e t urn 	 and 	 as 	 such 	 ha v e 	 been 	 v alued 	 using	 	
bo th 	 b lack 	  	 s chole s 	 and 	 mon t e 	 c arlo 	 models 	 r e spectiv ely  	 	 	 	 	 	 	 	 	
	
p ar ticip an t s 	 in 	 the 	 2 009 	 l tip 	 ha v e 	 been 	 gr an t ed 	 unit s 	 which 	 ha v e 	 no 	 v alue 	 on 	 the 	 dat e 	 o f 	 gr an t 	 but 	 ha v e 	 the 	 po t en tial	 	
t o 	 c on v er t 	 in t o 	 nil–c o s t 	 op tions 	 	 	 	 	 	 	 	 	
3 1	 financial 	 ins trumen t s
	
 capital risk management
t he 	 gr oup ’ s 	 objectiv e s 	 when 	 managing 	 c apit al 	 ar e 	 t o 	 s af eguar d 	 the 	 gr oup ’ s 	 abilit y 	 t o 	 c on tinue 	 as 	 a 	 going 	 c onc ern 	 in 	 or der	 	
t o 	 pr o vide 	 r e t urns 	 f or 	 shar eholder s 	 and 	 bene fit s 	 f or 	 o ther 	 s t ak eholder s 	 and 	 t o 	 main t ain 	 an 	 op timal 	 c apit al 	 s truct ur e 	 t o 	 	
r educ e 	 the 	 c o s t 	 o f 	 c apit al	 	 	 	 	 	 	 	 	 	
										
t he 	 c apit al 	 s truct ur e 	 o f 	 the 	 c omp an y 	 c onsis t s 	 o f 	 deb t  	 which 	 include s 	 the 	 b ank 	 lo ans 	 dis clo s ed 	 in 	 no t e 	 2 0  	 c ash 	 and	 	
c ash 	 equiv alen t s 	 and 	 equit y 	 at tribut able 	 t o 	 equit y 	 holder s 	 o f 	 the 	 p ar en t  	 c omprising 	 is sued 	 shar e 	 c apit al 	 r e s erv e s 	 and	 	
r e t ained 	 e arnings 	 	 	 	 	 	 	 	 	 	 	
										
t he 	 gr oup 	 monit or s 	 c apit al 	 on 	 the 	 b asis 	 o f 	 the 	 ge aring 	 r atio  	 	 	 	 	 	 	 	 	
	 	
	 ge aring 	 r atio
t his 	 r atio 	 is 	 c alc ulat ed 	 as 	 ne t 	 deb t 	 divided 	 b y 	 t o t al 	 c apit al	 	 	 	 	 	 	 	
2 011
£m
2 010
£m
t o t al 	 borr o wings 	  no t e 	 2 0 550  599 
c ash 	 and 	 c ash 	 equiv alen t s	 05  77
ne t 	 deb t 555  522 
t o t al 	 equit y 297 198
t o t al 	 c apit al 258  324 
ge aring 	 r atio 215 161
											
c ash 	 and 	 c ash 	 equiv alen t s 	 include s 	 c ash 	 held 	 within 	 dis c on tinued 	 oper ations 	 and 	 shor t 	 t erm 	 depo sit s 	 	 	 	
										
	covenants										
t h e 	 g r o u p 	 i s 	 s u b j e c t 	 t o 	 t h r e e 	 fi n a n c i a l 	 c o v e n a n t s 	 i n 	 r e s p e c t 	 o f 	 i t s 	 c o m m i t t e d 	 b o r r o w i n g 	 f a c i l i t i e s 	 a t 	 t h e 	 b a l a n c e 	 s h e e t 	 d a t e 	 	
t he 	 t erms 	 o f 	 the 	 f acilit y 	 a gr eemen t 	 c on t ain 	 the 	 f ollo wing 	 c o v enan t s 	 i 	 the 	 r atio 	 o f 	 a v er age 	 ne t 	 deb t 	 t o 	 adjus t ed 	 e arnings	 	
pr e 	 e x c ep tional 	 be f or e 	 in t er e s t  	 t ax 	 depr eciation 	 and 	 amor tis ation 	 ebitd a  	 and 	 ii 	 the 	 r atio 	 o f 	 adjus t ed 	 ebitd a 	 t o 	 c ash	
in t er e s t  	 bo th 	 o f 	 which 	 ar e 	 t e s t ed 	 quar t erly  	 and 	 iii 	 the 	 r atio 	 o f 	 adjus t ed 	 ebitd a 	 t o 	 b alanc e 	 shee t 	 ne t 	 deb t 	 which 	 is 	 t e s t ed	
annually  	 t he 	 gr oup 	 c omplied 	 with 	 all 	 the 	 c o v enan t s 	 in 	 e ach 	 o f 	 the 	 t e s t 	 periods 	 t o 	 the 	 b alanc e 	 shee t 	 dat e 	 	 	 	
  annual report and accounts 2011
a cco u n t s 92
3 1	 financial 	 ins trumen t s 	continued									
 financial risk management objectives
t he 	 gr oup ’ s 	 activitie s 	 e xpo s e 	 it 	 t o 	 a 	 v arie t y 	 o f 	 financial 	 risk s 	 c urr enc y 	 risk 	 cr edit 	 risk 	 liquidit y 	 risk 	 and 	 c ash 	 flo w 	 in t er e s t 	 r at e 	
risk 	 t he 	 gr oup ’ s 	 o v er all 	 risk 	 managemen t 	 pr ogr amme 	 f oc us e s 	 on 	 the 	 unpr edict abilit y 	 o f 	 financial 	 mark e t s 	 and 	 s eek s 	 t o 	
minimis e 	 po t en tial 	 adv er s e 	 e f f ect s 	 on 	 the 	 gr oup ’ s 	 financial 	 perf ormanc e  		 t he 	 gr oup 	 us e s 	 deriv ativ e 	 financial 	 ins trumen t s 	 t o 	
hedge 	 c er t ain 	 risk 	 e xpo sur e s 	 	 	 	 	 	 	 	 	 	
										
risk 	 managemen t 	 is 	 c arried 	 out 	 b y 	 a 	 c en tr al 	 tr e asury 	 dep ar tmen t 	  gr oup 	 t r e asury  	 under 	 policie s 	 appr o v ed 	 b y 	 the 	 b o ar d 	 o f	
dir ect or s  		 gr oup 	 t r e asury 	 iden tifie s  	 e v aluat e s 	 and 	 hedge s 	 financial 	 risk s 	 in 	 clo s e 	 c o–oper ation 	 with 	 the 	 gr oup ’ s 	 oper ating 	
d i v i s i o n s  	 	 t h e 	 b o a r d 	 p r o v i d e s 	 w r i t t e n 	 p r i n c i p l e s 	 f o r 	 o v e r a l l 	 r i s k 	 m a n a g e m e n t  	 a s 	 w e l l 	 a s 	 w r i t t e n 	 p o l i c i e s 	 c o v e r i n g 	 s p e c i fi c	 	
ar e as  	 such 	 as 	 f or eign 	 e x change 	 risk 	 in t er e s t 	 r at e 	 risk 	 cr edit 	 risk 	 us e 	 o f 	 financial 	 ins trumen t s 	 and 	 in v e s ting 	 e x c e s s 	 liquidit y 	 	
								
 currency risk          
t he 	 gr oup 	 oper at e s 	 almo s t 	 wholly 	 within 	 the 	 uk 	 and 	 is 	 e xpo s ed 	 t o 	 minimal 	 f or eign 	 e x change 	 risk 		 f or eign 	 c urr enc y 	 e x change	
risk 	 aris e s 	 primarily 	 with 	 r e spect 	 t o 	 the 	 e ur o  	 us 	 dollar 	 and 	 the 	 s wis s 	 fr anc 	 f or eign 	 c urr enc y 	 e x change 	 risk 	 aris e s 	 fr om 	 fut ur e	
c ommer cial 	 tr ans actions 	 and 	 tr ade 	 as s e t s 	 and 	 liabilitie s 	 in 	 f or eign 	 c urr encie s  	 no 	 fur ther 	 activ e 	 managemen t 	 o f 	 c urr enc y 	 risk	 	
is 	 r equir ed	 	 	 	 	 	 	 	 	 	
										
t he 	 gr oup 	 has 	 minimal 	 e xpo sur e 	 t o 	 f or eign 	 e x change 	 risk 	 and 	 it 	 is 	 gr oup 	 polic y 	 t o 	 ensur e 	 that 	 all 	 mat erial 	 p a ymen t s 	 or 	 r ec eip t s	
ar e 	 fully 	 hedged 	 a t 	 3 1 	 dec ember 	 2 011 	 the 	 gr oup 	 had 	 no 	 f orw ar d 	 f or eign 	 e x change 	 c on tr act s 	 in 	 plac e 	 2 010 	 nil	 	 	
							
credit risk
c r e d i t 	 r i s k 	 i s 	 t h e 	 r i s k 	 o f 	 l o s s e s 	 d u e 	 t o 	 t h e 	 f a i l u r e 	 o f 	 t h e 	 g r o u p ’ s 	 c u s t o m e r s 	 t o 	 m e e t 	 t h e i r 	 p a y m e n t 	 o b l i g a t i o n s 	 t o w a r d s 	 t h e 	 g r o u p 	
t he 	 gr oup 	 has 	 no 	 signific an t 	 c onc en tr ation 	 o f 	 cr edit 	 risk 	 it 	 has 	 policie s 	 in 	 plac e 	 t o 	 ensur e 	 that 	 s ale s 	 ar e 	 made 	 t o 	 c us t omer s 	
with 	 an 	 appr opriat e 	 cr edit 	 his t ory  	 independen t 	 cr edit 	 r atings 	 ar e 	 s ough t 	 f or 	 all 	 po t en tial 	 c us t omer s 	 and 	 b as ed 	 on 	 the 	 out c ome	
o f 	 the 	 f eedb ack 	 fr om 	 the 	 r atings 	 agenc y 	 a 	 judgemen t 	 is 	 made 	 on 	 the 	 appr opriat e 	 le v el 	 o f 	 cr edit 	 t o 	 be 	 giv en 	 deriv ativ e	
tr ans action 	 c oun t erp ar tie s 	 ar e 	 limit ed 	 t o 	 high–cr edit –qualit y 	 financial 	 ins tit utions 
 liquidity risk
liquidit y 	 risk 	 is 	 the 	 risk 	 that 	 the 	 gr oup 	 will 	 be 	 unable 	 t o 	 mee t 	 it s 	 p a ymen t 	 obligations  	 pruden t 	 liquidit y 	 managemen t 	 implie s	
main t aining 	 suf ficien t 	 c ash 	 and 	 mark e t able 	 s ec uritie s  	 the 	 a v ailabilit y 	 o f 	 funding 	 thr ough 	 an 	 adequat e 	 amoun t 	 o f 	 c ommit t ed 	
cr edit 	 f acilitie s 	 and 	 the 	 abilit y 	 t o 	 clo s e 	 out 	 mark e t 	 po sitions  	 due 	 t o 	 the 	 nat ur e 	 o f 	 the 	 underlying 	 busine s s  	 gr oup 	 t r e asury	 	
aims 	 t o 	 main t ain 	 fle xibilit y 	 in 	 funding 	 b y 	 k eeping 	 c ommit t ed 	 cr edit 	 line s 	 a v ailable 	
managemen t 	 monit or s 	 r olling 	 f or ec as t s 	 o f 	 the 	 gr oup ’ s 	 liquidit y 	 r e s erv e 	  c ompris e s 	 o f 	 the 	 undr a wn 	 borr o wing 	 f acilit y 	  no t e 	 2 0	
a n d 	 c a s h 	 a n d 	 c a s h 	 e q u i v a l e n t s 	  n o t e 	 1 8   	 o n 	 t h e 	 b a s i s 	 o f 	 e x p e c t e d 	 c a s h 	 fl o w  	 t h i s 	 i s 	 g e n e r a l l y 	 c a r r i e d 	 o u t 	 a t 	 a 	 g r o u p 	 l e v e l 	 	
in 	 addition 	 the 	 gr oup ’ s 	 liquidit y 	 managemen t 	 polic y 	 include s 	 pr ojecting 	 c ash 	 flo w s 	 and 	 c onsidering 	 the 	 le v el 	 o f 	 liquid 	 as s e t s 	
n e c e s s a r y 	 t o 	 m e e t 	 t h e s e  	 m o n i t o r i n g 	 b a l a n c e 	 s h e e t 	 l i q u i d i t y 	 r a t i o s 	 a g a i n s t 	 i n t e r n a l 	 t a r g e t s 	 a n d 	 b a n k 	 f a c i l i t y 	 r e q u i r e m e n t s 	 	
and 	 main t aining 	 deb t 	 financing 	 plans 
no t e s 	 t o 	 the 	 financial 	 s t at emen t s
continued 93
cash flow interest rate risk
as 	 the 	 gr oup 	 has 	 no 	 signific an t 	 in t er e s t 	 be aring 	 as s e t s  	 the 	 gr oup ’ s 	 inc ome 	 and 	 oper ating 	 c ash 	 flo w s 	 ar e 	 sub s t an tially 	
independen t 	 o f 	 change s 	 in 	 mark e t 	 in t er e s t 	 r at e s 
t he 	 gr oup ’ s 	 in t er e s t 	 r at e 	 risk 	 aris e s 	 fr om 	 long–t erm 	 borr o wings  	 b orr o wings 	 is sued 	 at 	 shor t 	 t erm 	 fix ed 	 r at e s 	 e xpo s e 	 the 	 gr oup 	
t o 	 c ash 	 flo w 	 in t er e s t 	 r at e 	 risk 	 gr oup 	 polic y 	 is 	 t o 	 main t ain 	 be t w een 	 40 	 and 	 60 	 o f 	 it s 	 borr o wings 	 in 	 fix ed 	 r at e 	 ins trumen t s 
a 	 mon thly 	 s ensitivit y 	 analy sis 	 is 	 c arried 	 out  	 and 	 on 	 the 	 le v el 	 o f 	 borr o wings 	 o f 	 the 	 gr oup 	 at 	 3 1 	 dec ember 	 2 011 	 a 	 mo v emen t 	 o f	
0 2 5  	 in 	 in t er e s t 	 r at e s 	 w ould 	 change 	 the 	 le v el 	 o f 	 in t er e s t 	 p aid 	 in 	 the 	 y e ar 	 b y 	 – 	 £ 0  1m 	 2 010 	 £ 0  1m 
t he 	 gr oup 	 manage s 	 it s 	 c ash 	 flo w 	 in t er e s t 	 r at e 	 risk 	 b y 	 using 	 flo ating–t o–fix ed 	 in t er e s t 	 r at e 	 s w ap s  	 s uch 	 in t er e s t 	 r at e 	 s w ap s 	 	
ha v e 	 the 	 ec onomic 	 e f f ect 	 o f 	 c on v er ting 	 borr o wing 	 fr om 	 flo ating 	 r at e s 	 t o 	 fix ed 	 r at e s  		 gener ally  	 the 	 gr oup 	 r ais e s 	 long 	 t erm 	
borr o wings 	 at 	 flo ating 	 r at e s 	 and 	 s w ap s 	 them 	 in t o 	 fix ed 	 r at e s 	 that 	 ar e 	 lo w er 	 than 	 tho s e 	 a v ailable 	 if 	 the 	 gr oup 	 borr o w ed 	 	
at 	 fix ed 	 r at e 	 dir ectly  	 under 	 the 	 in t er e s t 	 r at e 	 s w ap s  	 the 	 gr oup 	 agr ee s 	 with 	 o ther 	 p ar tie s 	 t o 	 e x change  	 at 	 specific 	 in t erv als 	
 mainly 	 quar t erly  	 the 	 dif f er enc e 	 be t w een 	 fix ed 	 c on tr act 	 r at e s 	 and 	 flo ating 	 r at e 	 in t er e s t 	 amoun t s 	 c alc ulat ed 	 b y 	 r e f er enc e 	 	
t o 	 the 	 agr eed 	 no tional 	 princip al 	 amoun t s  	 an 	 in t er e s t 	 r at e 	 s w ap 	 w as 	 en t er ed 	 in t o 	 on 	 7 	 f ebruary 	 2 012 	 f or 	 a 	 period 	 o f 	 2 	 y e ar s 
 embedded derivatives
in 	 ac c or danc e 	 with 	 ia s 	 3 9  	 financial 	 ins trumen t s 	 r ec ognition 	 and 	 me asur emen t  	 the 	 gr oup 	 has 	 r e vie w ed 	 an y 	 c on tr act s	 	
f or 	 embedded 	 deriv ativ e s 	 that 	 ar e 	 r equir ed 	 t o 	 be 	 s ep ar at ely 	 ac c oun t ed 	 f or 	 if 	 the y 	 do 	 no t 	 mee t 	 c er t ain 	 r equir emen t s 	 s e t	 	
out 	 in 	 the 	 s t andar d 	 t he 	 gr oup 	 had 	 no 	 such 	 embedded 	 deriv ativ e s 	 during 	 the 	 y e ar  annual report and accounts 2011
a cco u n t s 94
w e 	 ha v e 	 audit ed 	 the 	 p ar en t 	 c omp an y 	 financial 	 s t at emen t s 	 o f 	 s tv 	 gr oup 	 plc 	 f or 	 the 	 y e ar 	 ended 	 3 1 	 dec ember 	 2 011 	 which 	 c ompris e 	
the 	 b alanc e 	 shee t  	 s t at emen t 	 o f 	 t o t al 	 r ec ognis ed 	 gains 	 and 	 lo s s e s 	 and 	 the 	 r elat ed 	 no t e s  	 t he 	 financial 	 r epor ting 	 fr ame w ork 	 that 	 has 	
been 	 applied 	 in 	 their 	 pr ep ar ation 	 is 	 applic able 	 la w 	 and 	 unit ed 	 kingdom 	 a c c oun ting 	 s t andar ds 	 unit ed 	 kingdom 	 gener ally 	 a c c ep t ed	
a c c oun ting 	 pr actic e 	 	 	 	 	 	 	 	 	 	 	 	
r e spectiv e 	 r e sponsibilitie s 	 o f 	 dir ect or s 	 and 	 audit or s	 	 	 	 	 	 	 	 	
as 	 e xplained 	 mor e 	 fully 	 in 	 the 	 s t at emen t 	 o f 	 dir ect or s ’ 	 r e sponsibilitie s 	 s e t 	 out 	 on 	 p age 	 2 9  	 the 	 dir ect or s 	 ar e 	 r e sponsible 	 f or 	 the	
pr ep ar ation 	 o f 	 the 	 p ar en t 	 c omp an y 	 financial 	 s t at emen t s 	 and 	 f or 	 being 	 s atis fied 	 that 	 the y 	 giv e 	 a 	true 	 and 	 f air 	 vie w  	 our 	 r e sponsibilit y	
is 	 t o 	 audit 	 and 	 e xpr e s s 	 an 	 opinion 	 on 	 the 	 p ar en t 	 c omp an y 	 financial 	 s t at emen t s 	 in 	 ac c or danc e 	 with 	 applic able 	 la w 	 and 	 in t ernational 	
s t andar ds 	 on 	 a uditing 	 uk 	 and 	 ir eland 	 t ho s e 	 s t andar ds 	 r equir e 	 us 	 t o 	 c omply 	 with 	 the 	 a uditing 	 pr actic e s 	 b o ar d’ s 	 e thic al 	 s t andar ds	
for	auditors		 											
													
t his 	 r epor t  	 including 	 the 	 opinions  	 has 	 been 	 pr ep ar ed 	 f or 	 and 	 only 	 f or 	 the 	 c omp an y’ s 	 member s 	 as 	 a 	 body 	 in 	 ac c or danc e 	 with	
chap t er 	 3 	 o f 	 p ar t 	 16 	 o f 	 the 	 c omp anie s 	 a ct 	 2 006 	 and 	 f or 	 no 	 o ther 	 purpo s e  	 w e 	 do 	 no t  	 in 	 giving 	 the s e 	 opinions  	 ac c ep t 	 or 	 as sume	
r e sponsibilit y 	 f or 	 an y 	 o ther 	 purpo s e 	 or 	 t o 	 an y 	 o ther 	 per s on 	 t o 	 whom 	 this 	 r epor t 	 is 	 sho wn 	 or 	 in t o 	 who s e 	 hands 	 it 	 ma y 	 c ome 	 s a v e	
wher e 	 e xpr e s sly 	 agr eed 	 b y 	 our 	 prior 	 c ons en t 	 in 	 writing	 	 	 	 	 	 	 	 	
s c ope 	 o f 	 the 	 audit 	 o f 	 the 	 financial 	 s t at emen t s	 	 	 	 	 	 	 	 	 	
an 	 audit 	 in v olv e s 	 ob t aining 	 e videnc e 	 about 	 the 	 amoun t s 	 and 	 dis clo sur e s 	 in 	 the 	 financial 	 s t at emen t s 	 suf ficien t 	 t o 	 giv e 	 r e as onable 	
as sur anc e 	 that 	 the 	 financial 	 s t at emen t s 	 ar e 	 fr ee 	 fr om 	 mat erial 	 mis s t at emen t  	 whe ther 	 c aus ed 	 b y 	 fr aud 	 or 	 err or  	 t his 	 include s 	 an 	
as s e s smen t 	 o f  	 whe ther 	 the 	 ac c oun ting 	 policie s 	 ar e 	 appr opriat e 	 t o 	 the 	 p ar en t 	 c omp an y’ s 	 cir c ums t anc e s 	 and 	 ha v e 	 been 	 c onsis t en tly	
applied 	 and 	 adequat ely 	 dis clo s ed 	 the 	 r e as onablene s s 	 o f 	 signific an t 	 ac c oun ting 	 e s timat e s 	 made 	 b y 	 the 	 dir ect or s 	and 	 the 	 o v er all	
pr e s en t ation 	 o f 	 the 	 financial 	 s t at emen t s  	 in 	 addition 	 w e 	 r e ad 	 all 	 the 	 financial 	 and 	 non–financial 	 in f ormation 	 in 	 the 	 annual 	 r epor t 	 t o 	
iden tif y 	 mat erial 	 inc onsis t encie s 	 with 	 the 	 audit ed 	 financial 	 s t at emen t s  	 if 	 w e 	 bec ome 	 a w ar e 	 o f 	 an y 	 app ar en t 	 mat erial 	 mis s t at emen t s 	
or 	 inc onsis t encie s 	 w e 	 c onsider 	 the 	 implic ations 	 f or 	 our 	 r epor t 	 	 	 	 	 	 	 	
	 	 	 	
opinion 	 on 	 financial 	 s t at emen t s 	 	 	 	 	 	 	 	 	 	 	 	
in 	 our 	 opinion 	 the 	 p ar en t 	 c omp an y 	 financial 	 s t at emen t s 	 	 	 	 	 	 	 	 	 	
•	 giv e 	 a 	 true 	 and 	 f air 	 vie w 	 o f 	 the 	 s t at e 	 o f 	 the 	 c omp an y’ s 	 af f air s 	 as 	 at 	 3 1 	 dec ember 	 2 011	 	 	 	 	 	
•	 ha v e 	 been 	 pr operly 	 pr ep ar ed 	 in 	 ac c or danc e 	 with 	 unit ed 	 kingdom 	 gener ally 	 a c c ep t ed 	 a c c oun ting 	 pr actic e 	 and 	 	 	 	
• 	 h a v e 	 b e e n 	 p r e p a r e d 	 i n 	 a c c o r d a n c e 	 w i t h 	 t h e 	 r e q u i r e m e n t s 	 o f 	 t h e 	 c o m p a n i e s 	 a c t 	 2 0 0 6 	
												
s tv 	 gr oup 	 plc 	 c omp an y 	 financial 	 s t at emen t s
independent auditors’ report to the members of stv group plc 95
opinion 	 on 	 o ther 	 mat t er s 	 pr e s cribed 	 b y 	 the 	 c omp anie s 	 a ct 	 2 006 	 	 	 	 	 	 	 	 	
in 	 our 	 opinion 	 	 	 	 	 	 	 	 	 	 	 	 	
•	 	 the 	 p ar t 	 o f 	 the 	 r emuner ation 	 c ommit t ee 	 r epor t 	 t o 	 be 	 audit ed 	 has 	 been 	 pr operly 	 pr ep ar ed 	 in 	 ac c or danc e 	 with 	 the	 	
c omp anie s 	 a ct 	 2 006 	 and 	 	 	 	 	 	 	 	 	 	 	
•	 	 the 	 in f ormation 	 giv en 	 in 	 the 	 dir ect or s ’ 	 r epor t 	 f or 	 the 	 financial 	 y e ar 	 f or 	 which 	 the 	 p ar en t 	 c omp an y 	 financial 	 s t at emen t s 	 	
ar e 	 pr ep ar ed 	 is 	 c onsis t en t 	 with 	 the 	 p ar en t 	 c omp an y 	 financial 	 s t at emen t s  	 	 	 	 	 	 	 	
		 			
mat t er s 	 on 	 which 	 w e 	 ar e 	 r equir ed 	 t o 	 r eport 	 b y 	 e x c ep tion 	 	 	 	 	 	 	 	 	 	
w e 	 h a v e 	 n o t h i n g 	 t o 	 r e p o r t 	 i n 	 r e s p e c t 	 o f 	 t h e 	 f o l l o w i n g 	 m a t t e r s 	 w h e r e 	 t h e 	 c o m p a n i e s 	 a c t 	 2 0 0 6 	 r e q u i r e s 	 u s 	 t o 	 r e p o r t 	 t o 	 y o u 	 i f 	 	
in 	 our 	 opinion 	 	 	 	 	 	 	 	 	 	 	 	 	
•	 	 adequat e 	 ac c oun ting 	 r ec or ds 	 ha v e 	 no t 	 been 	 k ep t 	 b y 	 the 	 p ar en t 	 c omp an y  	 or 	 r e t urns 	 adequat e 	 f or 	 our 	 audit 	 ha v e 	 no t 	 been	
r ec eiv ed 	 fr om 	 br anche s 	 no t 	 visit ed 	 b y 	 us 	 or 	 	 	 	 	 	 	 	 	
•	 	 the 	 p ar en t 	 c omp an y 	 financial 	 s t at emen t s 	 and 	 the 	 p ar t 	 o f 	 the 	 r emuner ation 	 c ommit t ee 	 r epor t 	 t o 	 be 	 audit ed 	 ar e 	 no t 	 	
in 	 agr eemen t 	 with 	 the 	 ac c oun ting 	 r ec or ds 	 and 	 r e t urns 	 or 	 	 	 	 	 	 	 	 	
•	 	 c er t ain 	 dis clo sur e s 	 o f 	 dir ect or s ’ 	 r emuner ation 	 specified 	 b y 	 la w 	 ar e 	 no t 	 made 	 or 	 	 	 	 	
•	 	 w e 	 ha v e 	 no t 	 r ec eiv ed 	 all 	 the 	 in f ormation 	 and 	 e xplanations 	 w e 	 r equir e 	 f or 	 our 	 audit 	 	 	 	 	 	
		 				
other 	 mat t er 	 	 	 	 	 	 	 	 	 	 	 	 	
w e 	 ha v e 	 r epor t ed 	 s ep ar at ely 	 on 	 the 	 c ons olidat ed 	 financial 	 s t at emen t s 	 o f 	 s tv 	 gr oup 	 plc 	f or 	 the 	 y e ar 	 ended 	 3 1 	 dec ember 	 2 011	 	
													
alan 	 w ils on 	  s enior 	 s t at ut or y 	 a udit or 
f or 	 and 	 on 	 behalf 	 o f 	 pric e w at erhous ec ooper s 	 llp
char t er ed 	 a c c oun t an t s 	 and 	 s t at ut ory 	 a udit or s
glas go w
2 3 	 f ebruary 	 2 012 annual report and accounts 2011
a cco u n t s 96
n o te
2 011
£m
2 010
£m
fix ed 	 as s e t s
in v e s tmen t s 2 273  273 
c urr en t 	 as s e t s
deb t or s	
– 	 due 	 within 	 one 	 y e ar 3 401  780 
– 	 due 	 aft er 	 one 	 y e ar 3 1211  1112 
c ash 	 at 	 b ank 	 and 	 in 	 hand 04  01 
c ash 	 in 	 es cr o w –  01 
 1616  1894 
cr edit or s 	 amoun t s 	 f alling 	 due 	 within 	 one 	 y e ar
other 	 cr edit or s 4 103 318
b ank 	 lo ans 5 550 50
 653 368
ne t 	 c urr en t 	 as s e t s 963  1526 
t o t al 	 as s e t s 	 le s s 	 c urr en t 	 liabilitie s 1236  1799 
cr edit or s 	 amoun t s 	 f alling 	 due 	 aft er 	 mor e 	 than 	 one 	 y e ar
b ank 	 lo ans 5 –  549
net assets excluding pension liability 1236  1250 
p ension 	 liabilit y 8 106 107
ne t 	 as s e t s 	 including 	 pension 	 liabilit y 1130  1143 
c apit al 	 and 	 r e s er v e s
c alled 	 up 	 shar e 	 c apit al 6 195  192 
shar e 	 pr emium 	 ac c oun t 6 1120  1114 
pr o fit 	 and 	 lo s s 	 r e s erv e s 6 191 171
other 	 r e s erv e 6 06  08 
t o t al 	 equit y 	 shar eholder s ’ 	 funds 1130  1143 
t he 	 ac c omp an ying 	 no t e s 	 ar e 	 an 	 in t egr al 	 p ar t 	 o f 	 this 	 b alanc e 	 shee t 	 	 	 	 	 	 	 	
	
t he 	 c omp an y 	 has 	 elect ed 	 t o 	 t ak e 	 the 	 e x emp tion 	 under 	 s ection 	 408 	 o f 	 the 	 c omp anie s 	 a ct 	 2 006 	 t o 	 no t 	 pr e s en t 	 the 	 p ar en t 	 c omp an y	
pr o fit 	 and 	 lo s s 	 ac c oun t  	 t he 	 pr o fit 	 f or 	 the 	p ar en t 	 c omp an y 	 f or 	 the 	 y e ar 	 w as 	 £nil 	 2 010 	 lo s s 	 £16 1m 	 	 	 	 	
				
t he 	 financial 	 s t at emen t s 	 on 	 p age s 	 9 4 	 t o 	 10 3 	 w er e 	 appr o v ed 	 b y 	 the 	 b o ar d 	 on 	 2 3 	 f ebruary 	 2 012 	 and 	 w er e 	 signed 	 on 	 it s 	 behalf 	 b y	 	
r ob 	 w oodw ar d	 geor ge 	 w at t
dir ect or	 	 dir ect or
c omp an y 	 b alanc e 	 shee t
at 31 december 2011 97
	
n o te
2 011
£m
2 010
£m
pr o fit lo s s  	 f or 	 the 	 financial 	 y e ar 	 – 161
unr e alis ed 	 gain 	 on 	 s ale 	 o f 	 in v e s tmen t 7 – 171
a ct uarial 	 lo s s 17 – 
de f err ed 	 t ax 	 cr edit 02  – 
t o t al 	 r ec ognis ed 	 lo s s e s  gains 	 in 	 the 	 y e ar 15 10
s t at emen t 	 o f 	 t o t al 	 r ec ognis ed 	 gains 	 and 	 l o s s e s
f or the year ended 31 december 2011 annual report and accounts 2011
a cco u n t s 98
1	 a c c oun ting 	 policie s
 accounting convention and basis of preparation
t he 	 s ep ar at e 	 financial 	 s t at emen t s 	 o f 	 the 	 c omp an y 	 ar e 	 pr e s en t ed 	 as 	 r equir ed 	 b y 	 the 	 c omp anie s 	 a ct 	 2 006 	 t he 	 s ep ar at e 	
financial 	 s t at emen t s 	 ha v e 	 been 	 pr ep ar ed 	 in 	 ac c or danc e 	 with 	 all 	 applic able 	 uk 	 a c c oun ting 	 s t andar ds 	 and 	 ha v e 	 been 	 pr ep ar ed 	
c onsis t en tly 	 fr om 	 y e ar 	 t o 	 y e ar  	 under 	 the 	 his t oric al 	 c o s t 	 c on v en tion 	 in 	 ac c or danc e 	 with 	 applic able 	 ac c oun ting 	 s t andar ds	 	
on 	 a 	 going 	 c onc ern 	 b asis 	 	 	 	 	 	 	 	 	 	 	
												
 basis of consolidation           
as 	 permit t ed 	 under 	 s ection 	 408 	 o f 	 the 	 c omp anie s 	 a ct 	 2 006 	 no 	 s ep ar at e 	 inc ome 	 s t at emen t 	 f or 	 the 	 holding 	 c omp an y 	 is	
p r e s e n t e d  	 t h e 	 c o n s o l i d a t e d 	 fi n a n c i a l 	 s t a t e m e n t s 	 a s 	 p r e s e n t e d 	 w i t h i n 	 t h e 	 a n n u a l 	 r e p o r t 	 i n c l u d e 	 t h e 	 r e s u l t s 	 o f 	 s t v 	 g r o u p 	 p l c 	
the 	 holding 	 c omp an y  	 and 	 all 	 o f 	 it s 	 sub sidiarie s 	 and 	 as s ociat ed 	 under t akings 	 up 	 t o 	 3 1 	 dec ember 	 2 011	 	 	 	
							
 going concern           
t he 	 dir ect or s 	 ha v e  	 at 	 the 	 time 	 o f 	 appr o ving 	 the 	 financial 	 s t at emen t s  	 a 	 r e as onable 	 e xpect ation 	 that 	 the 	 c omp an y 	 and 	 the 	
gr oup 	 ha v e 	 adequat e 	 r e s our c e s 	 t o 	 c on tinue 	 in 	 oper ational 	 e xis t enc e 	 f or 	 the 	 f or e s ee able 	 fut ur e  	 t hus 	 the y 	 c on tinue 	 t o 	 adop t	
the 	 going 	 c onc ern 	 b asis 	 o f 	 ac c oun ting 	 in 	 pr ep aring 	 the 	 financial 	 s t at emen t s  	 f ur ther 	 de t ail 	 is 	 c on t ained 	 in 	 the 	 p erf ormanc e 	
r e vie w 	 on 	 p age 	 2 9 	 	 	 	 	 	 	 	 	 	 	
												
 cash flow statement           
a 	 c ash 	 flo w 	 s t at emen t 	 has 	 no t 	 been 	 included 	 within 	 the s e 	 financial 	 s t at emen t s 	 in 	 ac c or danc e 	 with 	 the 	 e x emp tion 	 a v ailable 	
within 	 frs 	 1 	 r e vis ed	 	 	 	 	 	 	 	 	 	 	
												
 investments           
fix ed 	 as s e t 	 in v e s tmen t s 	 ar e 	 s t at ed 	 at 	 c o s t  	 le s s 	 an y 	 pr o vision 	 f or 	 imp airmen t 	 	 	 	 	 	
	 	 	 	
 impairment           
as s e t s 	 that 	 ar e 	 subject 	 t o 	 amor tis ation 	 or 	 depr eciation 	 ar e 	 r e vie w ed 	 f or 	 imp airmen t 	 whene v er 	 e v en t s 	 or 	 change s 	 in	
cir c ums t anc e s 	 indic at e 	 that 	 the 	 c arrying 	 amoun t 	 ma y 	 no t 	 be 	 r ec o v er able  	 an 	 imp airmen t 	 lo s s 	 is 	 r ec ognis ed 	 in 	 the 	 pr o fit 	 	
and 	 lo s s 	 ac c oun t 	 f or 	 the 	 amoun t 	 b y 	 which 	 the 	 as s e t ’ s 	 c arrying 	 v alue 	 e x c eeds 	 it s 	 r ec o v er able 	 amoun t  	 	 	 	 	
							
 share–based payments           
t he 	 gr oup 	 is sue s 	 equit y –s e t tled 	 shar e–b as ed 	 p a ymen t s 	 t o 	 c er t ain 	 emplo y ee s  	 e quit y –s e t tled 	 shar e–b as ed 	 p a ymen t s 	 ar e	
me asur ed 	 at 	 f air 	 v alue 	 o f 	 the 	 equit y 	 ins trumen t s 	 at 	 the 	 gr an t 	 dat e  	 t he 	 f air 	 v alue 	 e x clude s 	 the 	 e f f ect 	 o f 	 non 	 mark e t –b as ed	
v e s ting 	 c onditions  	 	 	 	 	 	 	 	 	 	 	 	
												
t he 	 f air 	 v alue 	 de t ermined 	 at 	 the 	 gr an t 	 dat e 	 o f 	 the 	 equit y –s e t tled 	 shar e–b as ed 	 p a ymen t s 	 is 	 e xpens ed 	 on 	 a 	 s tr aigh t –line 	 b asis	
o v er 	 the 	 v e s ting 	 period 	 b as ed 	 on 	 the 	 gr oup ’ s 	 e s timat e 	 o f 	 equit y 	 ins trumen t s 	 that 	 will 	 e v en t ually 	 v e s t  	 a t 	 e ach 	 b alanc e 	 shee t	
dat e  	 the 	 gr oup 	 r e vis e s 	 it s 	 e s timat e 	 o f 	 the 	 number 	 o f 	 equit y 	 ins trumen t s 	 e xpect ed 	 t o 	 v e s t 	 as 	 a 	 r e sult 	 o f 	 the 	 e f f ect 	 o f 	 non	
mark e t –b as ed 	 v e s ting 	 c onditions  	 t he 	 imp act 	 o f 	 the 	 r e vision 	 o f 	 the 	 original 	 e s timat e s  	 if 	 an y  	 is 	 r ec ognis ed 	 in 	 pr o fit 	 and 	 lo s s 	
such 	 that 	 the 	 c umulativ e 	 e xpens e 	 r e flect s 	 the 	 r e vis ed 	 e s timat e  	 with 	 a 	 c orr e sponding 	 adjus tmen t 	 t o 	 the 	 equit y –s e t tled 	
emplo y ee 	 bene fit s 	 r e s erv e 	 	 	 	 	 	 	 	 	 	 	
												
f air 	 v alue 	 is 	 me asur ed 	 b y 	 us e 	 o f 	 the 	 b lack 	  	 s chole s 	 model 	 or 	 mon t e 	 c arlo 	 model 	 as 	 r ele v an t  	 t he 	 e xpect ed 	 liv e s 	 us ed 	 in 	 the	
model 	 ha v e 	 been 	 adjus t ed 	 b as ed 	 on 	 managemen t ’ s 	 be s t 	 e s timat e  	 f or 	 the 	 e f f ect s 	 o f 	 non–tr ans f er abilit y  	 e x er cis e 	 r e s trictions	
and 	 beha viour al 	 c onsider ations 	 	 	 	 	 	 	 	 	 	 	
					
f ull 	 dis clo sur e 	 o f 	 shar e 	 b as ed 	 p a ymen t 	 a w ar ds 	 is 	 pr o vided 	 within 	 the 	 gr oup 	 financial 	 s t at emen t s 	 	 	 	
							
 
no t e s 	 t o 	 the 	 c omp an y 	 financial 	 s t at emen t s
for the year ended 31 december 2011 99
 dividends           
t he 	 liabilit y 	 f or 	 final 	 dividends 	 is 	 r ec or ded 	 when 	 the 	 dividends 	 ar e 	 appr o v ed 	 b y 	 the 	 c omp an y’ s 	 shar eholder s 	 	 	
							
f or 	 in t erim 	 dividends  	 the 	 liabilit y 	 is 	 r ec or ded 	 when 	 the 	 dividends 	 ar e 	 p aid	 	 	 	 	 	 	
 taxation           
c urr en t 	 t ax 	 is 	 pr o vided 	 at 	 amoun t s 	 e xpect ed 	 t o 	 be 	 p aid 	  or 	 r ec o v er ed 	 using 	 the 	 t ax 	 r at e s 	 enact ed 	 or 	 sub s t an tially 	 enact ed	 	
b y 	 the 	 b alanc e 	 shee t 	 dat e  	 	 	 	 	 	 	 	 	 	 	 	
												
d e f e r r e d 	 t a x a t i o n 	 i s 	 p r o v i d e d 	 i n 	 f u l l 	 o n 	 t i m i n g 	 d i f f e r e n c e s 	 t h a t 	 r e s u l t 	 i n 	 a n 	 o b l i g a t i o n 	 a t 	 t h e 	 b a l a n c e 	 s h e e t 	 d a t e 	 t o 	 p a y 	 m o r e 	 t a x 	
o r 	 a 	 r i g h t 	 t o 	 p a y 	 l e s s 	 t a x  	 a t 	 a 	 f u t u r e 	 d a t e  	 a t 	 r a t e s 	 e x p e c t e d 	 t o 	 a p p l y 	 w h e n 	 t h e y 	 c r y s t a l l i s e 	 b a s e d 	 o n 	 c u r r e n t 	 t a x 	 r a t e s 	 a n d 	 l a w 	
t iming 	 dif f er enc e s 	 aris e 	 fr om 	 the 	 inclusion 	 o f 	 it ems 	 o f 	 inc ome 	 and 	 e xpendit ur e 	 in 	 t ax 	 c omput ations 	 in 	 periods 	 dif f er en t 	 fr om	
tho s e 	 in 	 which 	 the y 	 ar e 	 included 	 in 	 the 	 financial 	 s t at emen t s  	 de f err ed 	 t ax 	 as s e t s 	 and 	 liabilitie s 	 ar e 	 no t 	 dis c oun t ed	 	 	
								
t he 	 t ax ation 	 liabilitie s 	 o f 	 c er t ain 	 gr oup 	 c omp anie s 	 ar e 	 r educ ed 	 wholly 	 or 	 in 	 p ar t 	 b y 	 lo s s e s 	 surr ender ed 	 b y 	 o ther	 	
gr oup 	 c omp anie s  	 t he 	 t ax 	 bene fit s 	 arising 	 fr om 	 gr oup 	 r elie f 	 ar e 	 r ec ognis ed 	 in 	 the 	 ac c oun t s 	 o f 	 the 	 surr endering 	 	
and 	 r ecipien t 	 c omp anie s 		 	 	 	 	 	 	 	 	 	
					
 bank borrowings         
in t er e s t –be aring 	 b ank 	 lo ans 	 and 	 o v er dr aft s 	 ar e 	 initially 	 r ec or ded 	 at 	 the 	 pr oc eeds 	 r ec eiv ed 	 ne t 	 o f 	 dir ect 	 is sue 	 c o s t s  	 t he y 	 ar e	
sub s equen tly 	 me asur ed 	 at 	 amor tis ed 	 c o s t 	 using 	 the 	 e f f ectiv e 	 in t er e s t 	 r at e  	 financ e 	 c o s t s  	 including 	 pr emiums 	 p a y able 	 on	
s e t tlemen t 	 or 	 r edemp tion 	 and 	 dir ect 	 is sue 	 c o s t s  	 ar e 	 ac c oun t ed 	 f or 	 on 	 an 	 ac cruals 	 b asis 	 t o 	 the 	 inc ome 	 s t at emen t 	 and 	 ar e	 	
added 	 t o 	 the 	 c arrying 	 amoun t 	 o f 	 the 	 ins trumen t 	 t o 	 the 	 e xt en t 	 that 	 the y 	 ar e 	 no t 	 s e t tled 	 in 	 the 	 period 	 in 	 which 	 the y 	 aris e 	 	
							
 pension costs         
e m p l o y e e s 	 o f 	 t h e 	 c o m p a n y 	 a r e 	 e l i g i b l e 	 f o r 	 m e m b e r s h i p 	 o f 	 t h e 	 m a i n 	 r e t i r e m e n t 	 b e n e fi t s 	 s c h e m e s 	 o p e r a t e d 	 b y 	 s t v 	 g r o u p 	 p l c 	
f or 	 the 	 de fined 	 bene fit 	 s cheme  	 as s e t s 	 ar e 	 me asur ed 	 at 	 f air 	 v alue  	 p ension 	 s cheme 	 liabilitie s 	 ar e 	 me asur ed 	 on 	 an 	 act uarial 	
b asis 	 using 	 a 	 pr oject ed 	 unit 	 me thod 	 and 	 dis c oun t ed 	 at 	 the 	 c urr en t 	 r at e 	 o f 	 r e t urn 	 on 	 a 	 high 	 qualit y 	 c orpor at e 	 bond 	 o f 	 equiv alen t	
t erm 	 and 	 c urr enc y 	 t o 	 the 	 s cheme ’ s 	 liabilitie s  	 t he 	 incr e as e 	 in 	 the 	 pr e s en t 	 v alue 	 o f 	 the 	 liabilitie s 	 o f 	 the 	 de fined 	 bene fit 	 pension 	
s cheme 	 e xpect ed 	 t o 	 aris e 	 fr om 	 emplo y ee 	 s ervic e 	 in 	 the 	 period 	 is 	 char ged 	 t o 	 oper ating 	 pr o fit  	 t he 	 e xpect ed 	 r e t urn 	 on 	 the 	
s cheme ’ s 	 as s e t s 	 and 	 the 	 incr e as e 	 during 	 the 	 period 	 in 	 the 	 pr e s en t 	 v alue 	 o f 	 the 	 s cheme ’ s 	 liabilitie s 	 arising 	 fr om 	 the 	 p as s age	 	
o f 	 time 	 ar e 	 included 	 in 	 ne t 	 in t er e s t 	 p a y able 	 and 	 similar 	 char ge s  	 a ct uarial 	 gains 	 and 	 lo s s e s 	 ar e 	 r ec ognis ed 	 in 	 the 	 s t at emen t	 	
o f 	 r ec ognis ed 	 gains 	 and 	 lo s s e s  	 	 	 	 	 	 	 	 	 	
									
f or 	 de fined 	 c on tribution 	 s cheme s 	 the 	 amoun t 	 char ged 	 t o 	 the 	 pr o fit 	 and 	 lo s s 	 ac c oun t 	 is 	 the 	 c on tributions 	 p a y able 	 in 	 the 	 y e ar 	 	
											
2	 in v e s tmen t s
£m
cost
a t 	 1 	 january 	 and 	 3 1 	 dec ember 	 2 011 273
provisions for impairment
a t 	 1 	 january 	 and 	 3 1 	 dec ember 	 2 011 – 
net book value at 31 december 2010 and 2011 273
	
  annual report and accounts 2011
a cco u n t s 100
2	 in v e s tmen t s 	continued
 subsidiary undertakings
t h e 	 d i r e c t o r s 	 c o n s i d e r 	 t h a t 	 t o 	 g i v e 	 f u l l 	 p a r t i c u l a r s 	 o f 	 a l l 	 s u b s i d i a r y 	 u n d e r t a k i n g s 	 w o u l d 	 l e a d 	 t o 	 a 	 s t a t e m e n t 	 o f 	 e x c e s s i v e 	 l e n g t h 	
t he 	 f ollo wing 	 in f ormation 	 r elat e s 	 t o 	 the 	 sub sidiary 	 under t akings 	 who s e 	 r e sult s 	 or 	 financial 	 po sition 	 in 	 the 	 opinion 	 o f 	 the 	
dir ect or s  	 princip ally 	 af f ect 	 the 	 r e sult s 	 o f 	 the 	 gr oup	 	 	 	 	 	 	 	
under t aking
c oun try 	 o f 	 inc orpor ation 	 or
r egis tr ation 	 and 	 oper ation princip al 	 activit y
s tv 	 c en tr al 	 limit ed s c o tland t ele vision 	 br o adc as ting
s tv 	 nor th 	 limit ed s c o tland t ele vision 	 br o adc as ting
s t v 	 p r o d u c t i o n s 	 l i m i t e d	 s c o tland pr ogr amme 	 pr oduction
s olutions  t v 	 l t d s c o tland t ele vision 	 t echnic al 	 f acilitie s
ginger 	 t ele vision 	 pr oductions 	 limit ed england pr ogr amme 	 pr oduction
	
none 	 o f 	 the 	 abo v e 	 in v e s tmen t s 	 ar e 	 held 	 dir ectly 	 b y 	 s tv 	 gr oup 	 plc 	 t he 	 in v e s tmen t s 	 ar e 	 s t at ed 	 in 	 the 	 b alanc e 	 shee t 	 at 	 c o s t	 	
le s s 	 amoun t s 	 writ t en 	 o f f 	 f or 	 imp airmen t 	 in 	 v alue  	 all 	 shar e s 	 ar e 	 or dinary 	 shar e s  	 all 	 o f 	 the 	 abo v e 	 in v e s tmen t s 	 ar e 	 100	
shar eholdings 	 within 	 the 	 gr oup 	 	 	 	 	 	 	 	 	
 dividends
t he 	 c omp an y 	 r ec eiv ed 	 dividends 	 o f 	 £nil 	 in 	 the 	 y e ar 	 2 010 	 £2 5  0m 	 	 	 	 	 	 	
	 	
3 	 deb t or s
2 011
£m
2 010
£m
due within one year
amoun t s 	 o w ed 	 b y 	 gr oup 	 under t akings 390  772 
pr ep a ymen t s 	 and 	 ac crued 	 inc ome 11  08 
 401  780 
due after one year
amoun t s 	 o w ed 	 b y 	 gr oup 	 under t akings 1164  1067 
pr ep a ymen t s 	 and 	 ac crued 	 inc ome 47  45 
 1211  1112 
i n c l u d e d 	 w i t h i n 	 a m o u n t s 	 o w e d 	 b y 	 g r o u p 	 u n d e r t a k i n g s 	 d u e 	 a f t e r 	 o n e 	 y e a r 	 i s 	 a 	 l o a n 	 o f 	 £ 1 0 0  0 m 	 t o 	 a 	 s u b s i d i a r y 	 u n d e r t a k i n g 	
in t er e s t 	 on 	 the 	 lo an 	 ac crue s 	 at 	 a 	 r at e 	 o f 	 9 	 and 	 is 	 p a y able 	 fr om 	 1 	 april 	 2 010  	 in t er e s t 	 ac crued 	 is 	 c apit alis ed 	 and 	 added 	 t o 	 the	
princip al 	 amoun t  	 in t er e s t 	 will 	 als o 	 ac crue 	 on 	 in t er e s t 	 which 	 is 	 c apit alis ed 	 in 	 this 	 w a y  	 t he 	 lo an 	 is 	 r ep a y able 	 on 	 3 1 	 mar ch 	 2 0 2 0 	 	
						
all 	 r emaining 	 amoun t s 	 o w ed 	 b y 	 gr oup 	 under t akings 	 ar e 	 uns ec ur ed 	 in t er e s t 	 fr ee 	 and 	 ha v e 	 no 	 fix ed 	 dat e 	 o f 	 r ep a ymen t 	 	
						
4 	 cr edit or s 	 amoun t s 	 f alling 	 due 	 within 	 one 	 y e ar
2 011
£m
2 010
£m
t r ade 	 cr edit or s 	 and 	 ac cruals 03  09 
amoun t s 	 due 	 t o 	 sub sidiary 	 under t akings 100  309 
 103  318 
amoun t s 	 due 	 t o 	 gr oup 	 under t akings 	 ar e 	 uns ec ur ed 	 in t er e s t 	 fr ee 	 and 	 ha v e 	 no 	 fix ed 	 dat e 	 o f 	 r ep a ymen t 	 	 	 	
	 	 	 	
no t e s 	 t o 	 the 	 c omp an y 	 financial 	 s t at emen t s
continued 101
5 	 b ank 	 lo ans
2 011
£m
2 010
£m
b ank 	 lo ans 550  599 
t he 	 borr o wings 	 ar e 	 r ep a y able 	 as 	 f ollo w s
expiring 	 within 	 1 	 y e ar 550  50 
expiring 	 in 	 2 	 t o 	 5 	 y e ar s –  549 
 550  599 
	
all 	 undr a wn 	 c ommit t ed 	 borr o wing 	 f acilitie s 	 ar e 	 r ep a y able 	 within 	 one 	 y e ar 	 2 010 	 t w o 	 t o 	 fiv e 	 y e ar s 	 	 	 	
	 	 	 	
t he 	 dir ect or s 	 c onsider 	 that 	 the 	 v alue 	 o f 	 c urr en t 	 borr o wings 	 appr o ximat e 	 their 	 f air 	 v alue 	 	 	 	 	
	 	 	
t he 	 e f f ectiv e 	 in t er e s t 	 r at e s 	 w er e 	 as 	 f ollo w s	 	 	 	 	 	 	 	
2 011

2 010

b ank 	 lo ans 	  flo ating	 	 	 	 55  40 
a t 	 3 1 	 dec ember 	 2 011 	 the 	 c omp an y 	 had 	 b ank 	 f acilitie s 	 in 	 plac e 	 t o t alling 	 £ 6 5  0m 	 c onsis ting 	 o f 	 a 	 £5 5  0m 	 t erm 	 f acilit y 	 and 	 a	
£10  0m 	 r e v olving 	 cr edit 	 and 	 o v er dr aft 	 f acilit y  	 t he 	 f acilitie s 	 w er e 	 due 	 t o 	 e xpir e 	 on 	 3 1 	 dec ember 	 2 012 	 in 	 s ep t ember 	 2 011 	 the	
c omp an y 	 c ommenc ed 	 dis c us sions 	 with 	 lender s 	 t o 	 amend 	 the 	 f acilit y 	 and 	 on 	 2 0 	 january 	 2 012 	 the 	 r ene w al 	 o f 	 the 	 f acilit y 	 w as	
agr eed 	 under 	 ia s 	 1 	  r e vis ed 	 p ar a 	 7 4  	 r enego tiation 	 o f 	 the 	 b ank 	 f acilitie s 	 on 	 2 0 	 january 	 2 012 	 r epr e s en t s 	 a 	 non 	 adjus ting 	 po s t	
b alanc e 	 shee t 	 e v en t 	 and 	 c ons equen tly 	 the 	 borr o wings 	 ha v e 	 all 	 been 	 clas sified 	 as 	 c urr en t 	 liabilitie s 	 as 	 at 	3 1 	 dec ember 	 2 011	 	
t he 	 r enego tiat ed 	 s yndic at ed 	 f acilitie s 	 t o t al 	 £7 0  0m 	 and 	 c ompris e 	 a 	 £3 7 5m 	 t erm 	 f acilit y 	 and 	 £3 25m 	 r e v olving 	 cr edit 	 and	
o v er dr aft 	 f acilit y 	 with 	 3 1 	 dec ember 	 2 014 	 mat urit y 	 dat e s  	 t he 	 t erm 	 lo an 	 p ar tially 	 amor tis e s 	 acr o s s 	 the 	 f acilit y 	 t erm 	 s ec urit y	 	
is 	 pr o vided 	 t o 	 the 	 deb t 	 pr o vider s 	 b y 	 w a y 	 o f 	 cr o s s 	 guar an t ee s 	 and 	 a 	 shar e 	 pledge 	 	
6	 r e s er v e s 	 and 	 mo v emen t s 	 in 	 shar eholder s ’ 	 funds
	
s h a r e	
c apit al
£m
s h a r e	
pr emium
£m
p rofi t
	 a n d 	 l o s s	
r ese rv es	
£m
other	 	
r ese rv e
£m
total
£m
a t 	 1 	 january 	 2 011 192  1114  171 08  1143 
own 	 shar e s 	 ac quir ed 	 and 	 is sued 03  06  09 – –
a ct uarial 	 lo s s – – 17 – 17
de f err ed 	 t ax 	 ther eon – – 02 – 02 
e quit y 	 s e t tled 	 shar e 	 b as ed 	 p a ymen t s – – – 02 02
own 	 shar e s 	 a w ar ded – –  04 –  04 
a t 	 3 1 	 dec ember 	 2 011 195  1120  191 06  1130 
	
included 	 within 	 pr o fit 	 and 	 lo s s 	 r e s erv e s 	 is 	 an 	 unr e alis ed 	 amoun t 	 o f 	 £17  1m	 	 	 	 	 	 	
	 	
t he 	 c omp an y 	 included 	 the 	 c aledonian 	 pension 	 s cheme 	 de ficit 	 f or 	 the 	 fir s t 	 time 	 in 	 2 010 	 f ollo wing 	 an 	 agr eemen t 	 in 	 principle 	 f or 	
it 	 t o 	 be 	 guar an t or 	 f or 	 the 	 s cheme  	 t he 	 s cheme 	 has 	 been 	 within 	 the 	 gr oup 	 in 	 prior 	 y e ar s 	 and 	 ther e f or e 	 the 	 his t oric 	 in f ormation	
is 	 included 	 belo w 	  no t e 	 8	 	 	 	 	 	 	 	 	 	 	
						 annual report and accounts 2011
a cco u n t s 102
7 	 t r ans actions 	 with 	 r elat ed 	 p artie s	 	 	 	 	 	 	 	 	 	
t her e 	 w er e 	 no 	 tr ans actions 	 with 	 an y 	 r elat ed 	 p ar tie s 	 during 	 the 	 y e ar 	 o ther 	 than 	 tho s e 	 e x emp t 	 fr om 	 dis clo sur e 	 under 	 frs 	 8	 	
							
8	 r e tir emen t 	 bene fit 	 s cheme s
t he 	 c omp an y 	 oper at e s 	 a 	 de fined 	 bene fit 	 pension 	 s cheme  	 t he 	 s cheme 	 is 	 trus t ee 	 adminis t er ed 	 and 	 the 	 s cheme ’ s 	 as s e t s 	 ar e 	
held 	 independen tly 	 o f 	 the 	 c omp an y’ s 	 financ e s  	 p ension 	 c o s t s 	 ar e 	 as s e s s ed 	 in 	 ac c or danc e 	 with 	 the 	 advic e 	 o f 	 an 	 independen t 	
pr o f e s sionally 	 qualified 	 act uary  	 	 	 	 	 	 	 	 	 	
									
t he 	 s cheme 	 is 	 the 	 c aledonian 	 publishing 	 p ension 	 s cheme 	 and 	 is 	 a 	 clo s ed 	 s cheme 	 ther e f or e 	 under 	 the 	 pr oject ed 	 unit 	 me thod	
the 	 c urr en t 	 s ervic e 	 c o s t 	 will 	 incr e as e 	 as 	 the 	 member s 	 o f 	 the 	 s cheme 	 appr o ach 	 r e tir emen t 	 	 	 	 	
	 	 	 	
a 	 full 	 act uarial 	 v aluation 	 o f 	 the 	 s cheme 	 w as 	 c arried 	 out 	 at 	 1 	 january 	 2 009 	 and 	 updat ed 	 t o 	 3 1 	 dec ember 	 2 011 	 b y 	 a 	 qualified 	
independen t 	 act uary  	 t he 	 major 	 as sump tions 	 us ed 	 b y 	 the 	 act uary 	 w er e	 	 	 	 	 	 	
a t 	 3 1	
dec ember
2 011
a t 	 3 1	
dec ember
2 010
dis c oun t 	 r at e 495 555
in flation 	 300 330
										
 mortality rate         
as sump tions 	 r egar ding 	 fut ur e 	 mor t alit y 	 e xperienc e 	 ar e 	 s e t 	 b as ed 	 on 	 advic e  	 published 	 s t atis tic s 	 and 	 e xperienc e 	 in 	 e ach 	 t errit ory 	 	
t he 	 a v er age 	 lif e 	 e xpect anc y 	 in 	 y e ar s 	 o f 	 a 	 pensioner 	 r e tiring 	 at 	 age 	 6 5 	 is 	 as 	 f ollo w s	 	 	 	
a t 	 3 1	
dec ember
2 011
years
a t 	 3 1	
dec ember
2 010
years
r e tiring 	 at 	 b alanc e 	 shee t 	 dat e
male 132 146
f emale 160 175
r e tiring 	 in 	 2 0 	 y e ar s
male 154 154
f emale 183 183
							
no t e s 	 t o 	 the 	 c omp an y 	 financial 	 s t at emen t s
continued 103
t he 	 f air 	 v alue 	 o f 	 the 	 as s e t s 	 in 	 the 	 s cheme  	 the 	 pr e s en t 	 v alue 	 o f 	 the 	 liabilitie s 	 in 	 the 	 s cheme 	 and 	 the 	 e xpect ed 	 r at e 	 o f 	 r e t urn 	 at	
e ach 	 b alanc e 	 shee t 	 dat e 	 w as	 	 	 	 	 	 	 	 	
at
3 1 	 dec ember
2 011
£m
at
3 1 	 dec ember
2 010
£m
at
3 1 	 dec ember
2 009
£m
at
3 1 	 dec ember
2 008
£m
at
3 1 	 dec ember
20 0 7
£m
e quitie s 531  555  523  486  655 
b onds 552  533  502  468  535 
f air 	 v alue 	 o f 	 s cheme  s 	 as s e t s 1083  1088  1025  954  1190 
pr e s en t 	 v alue 	 o f 	 de fined 	 bene fit 	 obligations 1224 1234 1227 1070 1178
de ficit  surplus 	 in 	 the 	 s cheme 141 146 202 116 12 
e quitie s 80 80 80 80 80
b onds 3050 4256 4557 3766 4461
									
a 	 r elat ed 	 o f f s e t ting 	 de f err ed 	 t ax 	 as s e t 	 o f 	 £3 5m 	 2 010 	 £3  9m  	 is 	 included 	 under 	 fix ed 	 as s e t s  	 t her e f or e 	 the 	 ne t 	 pension 	 s cheme 	
de ficit 	 amoun t s 	 t o 	 £10 6m 	 at 	 3 1 	 dec ember 	 2 011 	 2 010 	 £10  7m 	 	 	 	 	 	
	 	 	 	
 history of experience gains and losses         
at
3 1 	 dec ember
2 011
at
3 1 	 dec ember
2 010
at
3 1 	 dec ember
2 009
at
3 1 	 dec ember
2 008
at
3 1 	 dec ember
20 0 7
difference between the expected and actual return on  
scheme assets
amoun t 	 £m  24  56 79 257  21 
p er c en t age 	 o f 	 s cheme 	 as s e t s 2 5 8 27 2
experience gains and losses on scheme liabilities
amoun t 	 £m  06  07  29  09 138
p er c en t age 	 o f 	 the 	 pr e s en t 	 v alue 	 o f 	 s cheme 	 liabilitie s 1 1 2 1 12
t otal amount recognised in statement of recognised  
gains and losses
amoun t 	 £m  17 48  93 152 116 
p er c en t age 	 o f 	 the 	 pr e s en t 	 v alue 	 o f 	 s cheme 	 liabilitie s 1 4 8 14 10 104
annual report and accounts 2011
a cco u n t s
ifrs
20 0 7
£m
2 008
£m
2 009
£m
2 010
£m
2 011
£m
r e sult s
r e v enue
c on tinuing 	 oper ations 1203  1112  903  1048  1020 
dis c on tinued 	 oper ations 650  333  199  69  – 
 1853  1445  1102  1117  1020 
pr o fit 	 fr om 	 oper ations 	 be f or e 	 e x c ep tional 	 it ems
c on tinuing 	 oper ations 111  132  92  144  150 
dis c on tinued 	 oper ations 90  15 – – –
 201  147  92  144  150 
pr o fit 	 on 	 or dinary 	 activitie s 	 be f or e 	 t ax ation 	 and 	 e x c ep tional 	 it ems 81  128  55  125  140 
a ss e t s	
non–c urr en t 	 as s e t s 285  347  321  291  329 
c urr en t 	 as s e t s 882  799  842  699  538 
as s e t s 	 clas sified 	 as 	 held 	 f or 	 s ale 796  188  121 – –
t o t al 	 as s e t s 1963  1334  1284  990  867 
e quit y 	 and 	 liabilitie s
c urr en t 	 liabilitie s 346  325  1008  354  823 
non–c urr en t 	 liabilitie s 785  961  383  834  341 
liabilitie s 	 dir ectly 	 as s ociat ed 	 with 	 as s e t s 	 held 	 f or 	 s ale 195  219  212 – –
e quit y 635  171 319 198 297
minorit y 	 in t er e s t s 02 – – – –
t o t al 	 equit y 	 and 	 liabilitie s 1963  1334  1284  990  867 
k e y 	 s t atis tic s
e arnings 	 per 	 or dinary 	 shar e 		 – 	 b asic 420p 257p 137p 343p 380p
	 	 	 – 	 dilut ed 420p 257p 137p 329p 361p
dividends 	 per 	 or dinary 	 shar e – – – – –
 		 t he 	 2 00 7 	 e arnings 	 per 	 or dinary 	 shar e 	 ha v e 	 been 	 r e s t at ed 	 f or 	 the 	 1 	 f or 	 2 0 	 shar e 	 c ons olidation 	 which 	 t ook 	 plac e 	 in 	 2 008	 	
t he 	 2 010 	 e arnings 	 per 	 or dinary 	 shar e 	 figur e s 	 ha v e 	 been 	 r e s t at ed 	 t o 	 e x clude 	 or dinary 	 shar e s 	 held 	 b y 	 the 	 emplo y ee 	 shar e 	 t rus t 	
fr om 	 the 	 w eigh t ed 	 a v er age 	 number 	 o f 	 or dinary 	 shar e s 	 c alc ulation	 	 	 	 	 	 	 	
fiv e 	 y e ar 	 s ummar y
f or the year ended 31 december 2011 shareholder information
registrars
capita registrars 
the registry 34 beckenham road 
beckenham kent br3 4tu 
t el 0871 664 0300 
t el overseas 44 20 8639 3399 
f ax 44 0 1484 600 911 
email ssdcapitaregistrarscom 
website wwwcapitashareportalcom
independent auditors
pricewaterhousecoopers llp 
chartered accountants and statutory auditors  
141 bothwell street 
glasgow g2 7eq
solicitors
herbert smith llp 
exchange house 
primrose street 
london ec2a 2hs
burness llp 
120 bothwell street 
glasgow g2 7jl
principal bankers
bank of scotland plc
stockbrokers
peel hunt 
moor house 
120 london wall 
london ec2y 5et
secretary and registered office
jane e a t ames 
stv group plc 
pacific quay 
glasgow g51 1pq 
t el 0141 300 307 4 
email janetamesstvtv
company registration number 
sc203873
annual report on internet
the 2011 annual report of stv group plc including the  
financial statements is available at wwwstvplctv
annual report and accounts 2011
shareholders 105 106
annual report and accounts 2011
shareholders
amalgamation of accounts
shareholders who receive duplicate sets of company mailings because they have multiple accounts should write to the registrars  
to have the accounts amalgamated
investor relations
for investor enquiries please contact 
kirstin stevenson 
pr manager 
stv group plc 
pacific quay 
glasgow g51 1pq 
t el 0141 300 3670 
email kirstinstevensonstvtv
share price information
the share price of stv group plc is published in most newspapers and also in the united kingdom on ceefax and t eletext the 
current price of the company’s shares delayed by up to 15 minutes can be obtained from the company’s website wwwstvplctv
individual savings accounts isas
the company has maxi and mini isas which offer united kingdom resident shareholders a simple low–cost and tax–efficient way  
to invest in the company’s shares full details and an application form are available from stocktrade a division of brewin dolphin 
securities limited on 0131 240 0441
dividend reinvestment plan
stv group plc operates a dividend reinvestment plan to provide united kingdom shareholders with a facility to invest cash 
dividends by purchasing further stv group plc shares further details are available from the registrar on 0871 664 0381
y our shareholding
y ou can check your shareholding at any time by visiting the registrar’s website at 
wwwcapitashareportalcom
capita share dealing services
capita offer a quick and easy share dealing service to buy or sell stv group plc shares an online telephone dealing facility is 
available providing stv group plc shareholders with an easy to access and simple to use service there is no need to pre–register 
and there are no complicated forms to fill in the online and telephone dealing services allow you to trade “real time” at a known 
price which will be given to you at the time you give your instruction for further information on this service or to buy and sell 
shares please contact wwwcapitadealcom online dealing 0871 664 0454 telephone dealing
 calls cost 10p per minute plus network extras lines are open 830am–530pm monday to friday
 calls cost 10p per minute plus network extras lines are open 8am–430pm monday to friday 
shareholder information
continued 107
this information is important and requires your immediate attention 
if you are in any doubt as to the action you should take you should seek your own advice from a stockbroker  bank 
manager  solicitor  accountant or other independent professional adviser 
if you have sold or transferred all of your shares please pass this document together with the accompanying documents  
to the purchaser or transferee or to the person who arranged the sale or transfer so they can pass these documents  
to the person who now holds the shares 
the agm is an important opportunity for all shareholders to express their views by asking questions of the directors and voting  
on the resolutions 
the directors consider that each of the proposals detailed in the notice of annual general meeting will be of benefit to and are  
in the best interests of the company and the shareholders as whole the directors therefore unanimously recommend that the 
shareholders vote in favour of the resolutions as the directors intend to do in respect of their own holdings of shares in the 
company
notice is hereby given that the annual general meeting of the company will be held at pacific quay glasgow g51 1pq on  
wednesday 18 april 2012 at 11 am for the purpose of considering the resolutions below
resolutions 1 to 8 inclusive will be proposed as ordinary resolutions and resolutions 9 to 12 inclusive shall be proposed as  
special resolutions 
ordinary resolutions
1  t o consider and adopt the annual accounts of the company for the financial year ended 31 december 2011 which includes  
the report by the directors the remuneration report by the directors and the report by the auditors on the annual accounts 
and the auditable part of the remuneration report
2 t o approve the report by the directors on remuneration for the financial year ended 31 december 2011
  the remuneration report by the directors which may be found on pages 48 to 58 gives details of the directors’ remuneration 
for the year ended 31 december 2011 and sets out the company’s overall policy on directors’ remuneration during the year  
  as required by the directors’ remuneration report regulations 2002 the company’s auditors pricewaterhousecoopers llp  
have audited those parts of the report capable of being audited
3 t o elect genevieve shore as a director of the company
  genevieve shore is standing for election following her appointment as a non–executive director on 1 march 2012 the articles  
of association require that a director appointed by the board since the last annual general meeting should retire at the next 
annual general meeting and stand for election to the board in order to give shareholders a chance to confirm the appointment               
  biographical details of genevieve shore can be found on page 39 and the board confirms that she meets the independence 
criteria as set out in b11 of the uk corporate governance code
notice of annual general meeting annual report and accounts 2011
shareholders 108
notice of annual general meeting
continued
4 t o re–elect george watt as a director of the company 
  the articles of association require that every year a proportion of our directors retire and that all directors have to stand for 
re–election on the third anniversary of their election or re–election this gives you the chance to confirm their appointments
  biographical details of george watt can be found on page 36 and following formal performance evaluation mr watt’s 
performance is considered to be effective and demonstrates commitment to the role
5 t o re–elect david shearer as a director of the company 
  the articles of association require that every year a proportion of our directors retire and that all directors have to stand for 
re–election on the third anniversary of their election or re–election this gives you the chance to confirm their appointments
  biographical details of david shearer can be found on page 36 and the board confirms that he meets the independence criteria 
as set out in b11 of the uk corporate governance code following formal performance evaluation mr shearer’s performance 
continues to be effective and to demonstrate commitment to the role
6 t o re–elect michael jackson as a director of the company 
  the articles of association require that every year a proportion of our directors retire and that all directors have to stand for 
re–election on the third anniversary of their election or re–election this gives you the chance to confirm their appointments
   biographical details of michael jackson can be found on page 36 and the board confirms that he meets the independence 
criteria as set out in b11 of the uk corporate governance code following formal performance evaluation mr jackson’s 
performance continues to be effective and to demonstrate commitment to the role
7   t o re–appoint pricewaterhousecoopers llp as the auditors of the company to hold office until the conclusion of the next 
general meeting at which accounts are laid and to authorise the audit committee to fix the remuneration of the auditors
8  t o grant the directors authority to allot shares
 we will be asking you to vote on the following ordinary resolution
  “that for the purpose of section 551 of the companies act 2006 the “ act” the directors be and are hereby generally and 
unconditionally authorised to exercise all the powers of the company to allot equity securities within the meaning of section 
560 of the act up to an aggregate nominal amount of £6508370 provided that this authority shall expire at the conclusion  
of the next annual general meeting of the company after the passing of the resolution save that the company may before  
such expiry make an offer or agreement which would or might require equity securities to be allotted after such expiry and  
the directors may allot equity securities pursuant to any such offer or agreement as if the authority conferred by this resolution 
had not expired and further
 
  that the directors be and are hereby generally and unconditionally authorised to exercise all the powers of the company to  
allot equity securities within the meaning of section 560 of the act in connection with a rights issue in favour of ordinary 
shareholders of the company where the equity securities respectively attributable to the interests of all ordinary shareholders 
are proportionate as nearly as may be to the respective number of ordinary shares held by them in the company or in favour 
of the holders of other equity securities as required by the rights of those securities up to an aggregate nominal amount of 
£6508370 provided that this authority shall expire on the date of the next annual general meeting of the company after  
the passing of the resolution but so that the directors may at any time prior to such expiry make an offer or agreement which 
would or might require equity securities to be allotted after such expiry and the directors may allot equity securities pursuant  
to any such offer or agreement as if the authority conferred by this resolution had not expired” 109
  the directors require the authority of shareholders to allot the company’s shares and the first part of this resolution extends for 
a further year the general authority for the directors to allot a limited number of ordinary shares 130167 40 shares representing 
one third of the ordinary issued share capital at 22 february 2012 excluding treasury shares none of which are held by the 
company to provide the flexibility to take advantage of business opportunities as they arise the second part of this resolution 
allows the directors to allot a limited number of ordinary shares 130167 40 shares representing one third of the ordinary issued 
share capital at 22 february 2012 excluding treasury shares none of which are held by the company pursuant to a fully 
pre–emptive rights issue of the company the authority will terminate at the next annual general meeting of the company 
which must be held no later than 30 june 2013 the directors do not have any present intention of exercising this authority 
except to satisfy awards of shares under the company’s employee share schemes and no issue of ordinary shares will be  
made which would effectively alter control of the company without the prior approval of the company in general meeting  
the directors confirm that if this further authority were utilised during the year  they intend to follow the guidance of the 
association of british insurers and would all stand for re–election at the next agm
special resolutions
9 t o dis–apply statutory pre–emption rights
 we will be asking you to vote on the following special resolution
  “that subject to the passing of resolution 8 the directors be and are hereby empowered pursuant to section 570 of the act to 
allot equity securities within the meaning of section 560 of the act for cash pursuant to the authority conferred by resolution 
8 as if section 561 of the act did not apply to any such allotment provided that this power shall be limited to 
 a  the allotment of equity securities in connection with a rights issue open offer or other offer of securities in favour of  
the holders of the ordinary shares of 50p each in the capital of the company where the equity securities respectively 
attributable to the interest of all such holders are proportionate as nearly as may be to the respective number of ordinary 
shares held by them subject to such exclusions or other arrangements as the directors may deem necessary or expedient in 
relation to fractional entitlements or legal or practical problems arising under the laws or requirements of any recognised 
regulatory body or any stock exchange or otherwise in any territory and
  b  the allotment of equity securities otherwise than pursuant to sub–paragraph a above having in the case of ordinary 
shares as defined in section 560 of the act a nominal value or  in the case of other securities giving the right to subscribe 
or convert into ordinary shares having a nominal value not exceeding in the aggregate £97 6255
  the authority shall expire on the conclusion of the next annual general meeting of the company after the passing of this 
resolution save that the company may before such expiry make an offer or agreement which would or might require equity 
securities to be allotted after such expiry and the directors may allot equity securities pursuant to any such offer or agreement 
as if the authority conferred by this resolution had not expired”
  when ordinary shares are issued for cash they normally have to be offered in the first instance to existing holders of ordinary 
shares in proportion to their respective shareholdings this resolution extends for a further year the authority granted to the 
directors to allot a limited number of ordinary shares 1952511 shares representing 5 of the ordinary issued share capital at 
22 february 2012 other than to existing shareholders in proportion to their existing shareholdings this again is to provide 
directors with the flexibility to take advantage of business opportunities as they arise the authority will terminate at the next 
annual general meeting which must be held no later than 30 june 2013 no issue of ordinary shares will be made which would 
effectively alter control of the company without the prior approval of the company in general meeting the board also confirms 
that no more than 7 5 of the issued share capital would be issued on a non pre–emptive basis in any three–year period  annual report and accounts 2011
shareholders 110
notice of annual general meeting 
continued
10 t o purchase the company’s own shares
 we will be asking you to vote on the following special resolution
  “that the company be and is hereby generally and unconditionally authorised pursuant to section 701 of the act to make 
market purchases as defined in section 693a of the act of ordinary shares of 50p each in the capital of the company 
“shares” and the directors be and are hereby generally and unconditionally authorised to exercise all the powers of the 
company to purchase the shares provided that
 a the nominal value of maximum number of shares acquired pursuant to this authority shall not exceed £1952511
 b the minimum price which may be paid by the company for a share purchased pursuant to this authority shall be 50p
 c  the maximum price which may be paid by the company for a share purchased pursuant to this authority shall not be more 
than the higher of i 5 above the average of the middle market quotations for a share derived from the london stock 
exchange daily official list for the five business days immediately preceding the day on which such share is purchased and 
ii the price stipulated by article 51 of the buy–back and stabilisation regulation ec22732003 and 
 d  unless renewed the authority conferred by this resolution shall expire on the earlier of the conclusion of the next annual 
general meeting of the company after the passing of this resolution and the expiry of 12 months from the date of passing 
this resolution save that the company may before such expiry make a contract to purchase which will or may be executed 
wholly or partly after the expiry of such authority and the company may make a purchase of such shares after such expiry 
pursuant to such contract” 
  this resolution seeks the authority of shareholders to allow the company to purchase its own shares the authority sought 
extends to 3905022 shares representing 10 of the ordinary issued share capital in issue at 22 february 2012 the maximum 
price which may be paid amounts to not more than 5 above the average of the middle market quotations of the company’s 
shares for the five business days immediately preceding the date of purchase the power will only be used if the board is 
satisfied that it will be in the best interests of shareholders generally 
  in exercising the authority to purchase the company’s shares the directors intend to cancel any shares purchased but may 
however  treat the shares that have been bought back as held in treasury and to the extent that any such shares are held in 
treasury earnings per share will only be increased on a temporary basis until such time as the shares are resold out of treasury 
stock
  as at 22 february 2012 warrants and options to subscribe for 1041590 of the company’s shares were outstanding representing 
267 of the ordinary shares in issue at 22 february 2012 excluding treasury shares held by the company and 296 of the 
ordinary shares in the company excluding treasury shares held by the company following the exercise in full of this authority 
to purchase shares 111
11 t o allow general meetings to be held on 14 days notice
 we will be asking you to vote on the following special resolution
  “that the company be entitled to hold general meetings of the shareholders of the company with the exception of  
annual general meetings on the provision of 14 clear days notice to the company’s shareholders” 
  the companies act following the implementation of the eu shareholder rights directive permits the holding of general 
meetings on 14 days notice provided a special resolution is passed at the company’s annual general meeting approving  
this notice period 
12 t o reduce the share premium account of the company
 we will be asking you to vote on the following special resolution
  “that the share premium account of the company be reduced by £100m from £1120m as at 31 december 2011 to £120m” 
  in order to enable the company to pay dividends in the future the board is seeking approval for the share premium account  
of the company to be reduced by £100m shareholders are therefore invited to pass the above resolution the reduction of  
the company’s share premium account subject to confirmation by the court will allow the distributable reserves of the 
company to be increased by £100m
  under the act the company is only permitted to pay dividends from its accumulated profit and loss account this account  
is a reserve contained in its balance sheet prescribed by law details of this account and the company’s other reserves are  
set out on page 96
  the directors believe that the company’s dividend policy should be dictated by its cash resources financial position and the 
prospects of the company as a whole it should not be impeded by the size of the company’s accumulated profit and loss 
account which is a technical accounting reserve if it is otherwise appropriate to pay dividends accordingly the directors believe 
that the company should now restructure its balance sheet by reducing its share premium account by £100m since these are 
not reserves which are available for distribution by way of cash dividends to shareholders as a result of this reduction the 
company’s accumulated profit and loss account which as stated above is available for distribution will be increased by £100m 
and will ensure that the company has the capacity to re–commence the payment of dividends should the board consider  
it appropriate to do so in the future
  the proposed reduction will have no effect on the rights attaching to the ordinary shares or on the net assets of the company 
and is made to facilitate the payment of dividends in the future 
   annual report and accounts 2011
shareholders 112
in order to make the reduction of the company’s share premium account effective it will be necessary to seek the confirmation of 
the court in seeking this confirmation the company will be required to give such undertakings or other form of creditor protection 
as the court may require for the protection of the company’s creditors at the effective date the directors intend to seek the 
consent of the company’s main creditors and the board is confident that these consents will be obtained in order for the share 
premium account reduction then to become effective the court order confirming the cancellation must be filed with companies 
house usually two to three days after the date of the hearing therefore if approved by shareholders the court’s confirmation is 
expected to be granted in the second quarter of 2012
the board believes that the proposed reduction of the company’s share premium account in accordance with this resolution  
is in the best interests of the company and its shareholders accordingly the board recommends shareholders to vote in favour  
of this resolution as they intend to do in respect of their own beneficial holdings of ordinary shares representing approximately  
109 of the present issued share capital of the company 
  
by order of the board
jane e a t ames
company secretary
stv group plc
pacific quay
glasgow g51 1pq
22 february 2012
 
notes
1  information regarding the meeting including the information required by section 311a of the companies act 2006 is available 
from the investor centre at wwwstvplctv 
2  members are entitled to appoint a proxy to exercise all or any of their rights to attend and to speak and vote on their behalf at 
the meeting a shareholder may appoint more than one proxy in relation to the annual general meeting provided that each 
proxy is appointed to exercise the rights attached to a different share or shares held by that shareholder  a proxy need not be  
a shareholder of the company  a proxy form which may be used to make such appointment and give proxy instructions 
accompanies this notice if you do not have a proxy form and believe that you should have one or if you require additional 
forms please contact capita registrars on 0871 664 0300 or ssdcapitaregistrarscom calls cost 10p per minute plus network 
extras lines are open 830am to 530pm monday to friday alternatively you may appoint a proxy electronically at www
capitashareportalcom please see the notes to the form of proxy for further details
3  t o be valid any proxy form or other instrument appointing a proxy must be received by post or online or during normal 
business hours only by hand at capita registrars the registry 34 beckenham road beckenham kent br3 4tu no later than 
1100am on 16 april 2012 or 48 hours before the time of any adjournment of the meeting
4  the return of a completed proxy form in writing or online or any crest proxy instruction as described in paragraph 10 below 
will not prevent a shareholder attending the annual general meeting and voting in person if heshe wishes to do so
5  any person to whom this notice is sent who is a person nominated under section 146 of the companies act 2006 to enjoy 
information rights a “nominated person” may under an agreement between himher and the shareholder by whom heshe 
was nominated have a right to be appointed or to have someone else appointed as a proxy for the annual general meeting  
if a nominated person has no such proxy appointment right or does not wish to exercise it heshe may under any such 
agreement have a right to give instructions to the shareholder as to the exercise of voting rights
notice of annual general meeting 
continued 113
6  the statement of the rights of shareholders in relation to the appointment of proxies in paragraphs 2 and 3 above does not 
apply to nominated persons the rights described in these paragraphs can only be exercised by shareholders of the company
7   t o be entitled to attend and vote at the annual general meeting and for the purpose of the determination by the company  
of the votes they may cast shareholders must be registered in the register of members of the company at 6pm on the date 
two days before the meeting or  in the event of any adjournment at 6pm on the date which is two days before the time of the 
adjourned meeting changes to the register of members after the relevant deadline shall be disregarded in determining the 
rights of any person to attend and vote at the meeting
8  as at 22 february 2012 being the last business day prior to the publication of this notice the company’s issued share capital 
consists of 39050220 ordinary shares of 50p each carrying one vote each therefore the total voting rights in the company 
as at 22 february 2012 are 39050220
9  crest members who wish to appoint a proxy or proxies through the crest electronic proxy appointment service may do so by 
using the procedures described in the crest manual crest personal members or other crest sponsored members and those 
crest members who have appointed a service providers should refer to their crest sponsor or voting service providers 
who will be able to take the appropriate action on their behalf
10  in order for a proxy appointment or instruction made using the crest service to be valid the appropriate crest message  
“a crest proxy instruction” must be properly authenticated in accordance with euroclear uk and ireland “eui” 
specifications and must contain the information required for such instruction as described in the crest manual the message 
regardless of whether it constitutes the appointment of a proxy or is an amendment to the instruction given to a previously 
appointed proxy must in order to be valid be transmitted so as to be received by the company’s registrars capita registrars 
idra10 by 1100am on 16 april 2012 or 48 hours before the time of any adjournment of the meeting for this purpose the time 
of receipt will be taken to be the time as determined by the timestamp applied to the message by the crest application host 
from which the issuer’s agent is able to retrieve the message by enquiry to crest in the manner prescribed by crest  after  
this time any change of instructions to proxies appointed through crest should be communicated to the appointee through 
other means
11  crest members and where applicable their crest sponsors or voting service providers should note that eui does not make 
available special procedures in crest for any particular message normal system timings and limitations will therefore apply  
in relation to the input of crest proxy instructions it is the responsibility of the crest member concerned to take or  if the 
crest member is a crest personal member  or sponsored member  or has appointed a voting service provider  to procure  
that his crest sponsor or voting service providers takes such action as shall be necessary to ensure that a message is 
transmitted by means of the crest system by any particular time in this connection crest members and where applicable 
their crest sponsors or voting system providers are referred in particular  to those sections of the crest manual concerning 
practical limitations of the crest system and timings
12  the company may treat as invalid a crest proxy instruction in the circumstances set out in regulation 355a of the 
uncertificated securities regulations 2001
13  under section 319a of the companies act 2006 the company must answer any question asked which relates to the business 
being dealt with at the meeting unless
 •  answering the question would interfere unduly with the preparation for the meeting or involve the disclosure of  
confidential information
 •  the answer has already been given on a website in the form of an answer to a question or
 • it is undesirable in the interests of the company or the good order of the meeting that the question be answered annual report and accounts 2011
shareholders 114
14  shareholders should note that it is possible that pursuant to requests made by shareholders of the company under section 527 
of the companies act 2006 the company may be required to publish on a website a statement setting out any matter relating 
to i the audit of the company’s accounts including the auditor’s report and the conduct of the audit that are to be laid before 
the annual general meeting or ii any circumstance connected with an auditor of the company ceasing to hold office since the 
previous meeting at which annual accounts and reports were laid in accordance with section 437 of the companies act 2006 
the company may not require the shareholders requesting any such website publication to pay its expenses in complying with 
sections 527 or 528 of the companies act 2006 where the company is required to place a statement on a website under 
section 527 of the companies act 2006 it must forward the statement to the company’s auditor not later than the time when  
it makes the statement available on the website the business which may be dealt with at the annual general meeting includes 
any statement that the company has been required under section 527 of the companies act 2006 to publish on a website
15  members satisfying the thresholds in section 338 of the companies act 2006 may require the company to give to members  
of the company entitled to receive notice of the annual general meeting notice of a resolution which those members intend to 
move and which may properly be moved at the annual general meeting a resolution may properly be moved at the annual 
general meeting unless i it would if passed be ineffective whether by reason of any inconsistency with any enactment or  
the company’s constitution or otherwise ii it is defamatory of any person or iii it is frivolous or vexatious the business 
which may be dealt with at the annual general meeting includes a resolution circulated pursuant to this right a request made 
pursuant to this right may be in hard copy or electronic form must identify the resolution of which notice is to be given must  
be authenticated by the persons making it and must be received by the company not later than 6 weeks before the date of  
the annual general meeting
16  members satisfying the thresholds in section 338a of the companies act 2006 may request the company to include in the 
business to be dealt with at the annual general meeting any matter other than a proposed resolution which may properly  
be included in the business at the annual general meeting a matter may properly be included in the business at the annual 
general meeting unless i it is defamatory of any person or ii it is frivolous or vexatious a request made pursuant to this right 
may be in hard copy or electronic form must identify the matter to be included in the business must be accompanied by a 
statement setting out the grounds for the request must be authenticated by the persons making it and must be received  
by the company not later than 6 weeks before the date of the annual general meeting
17   a corporation which is a member can appoint one or more corporate representatives who may exercise on its behalf all its 
powers as a member provided that no more than one corporate representative exercises powers over the same share
18  except as provided above members who have general queries about the annual general meeting should call our shareholder 
helpline on 0871 664 0300
 y ou may not use any electronic address provided either
 • in this notice of annual general meeting or
 •  any related document including the chairman’s letter and proxy form to communicate with the company for any  
purposes other than those expressly stated
notice of annual general meeting 
continued annual report and accounts 2011
directors’ report – business review 
directors’ report
 business review
01 highlights of 2011
02 our business at a glance
04 chairman’s statement
06  building tomorrow’s stv  
– a conversation with rob woodward  
and charles mcghee
10 chief executive’s review 
 – consumer
16 – production
20 corporate social responsibility
27 performance review
30 kpis 20102011
32 kpis 20122015
34 principal risks and uncertainties
 corporate governance
36 board of directors 
38 corporate governance report
48 remuneration committee report
accounts
60  stv group plc consolidated financial statements 
– independent auditors’ report 
62 consolidated income statement
62  consolidated statement  
of comprehensive income
63 consolidated balance sheet
64  consolidated statement of changes in equity
65  consolidated statement of cash flows
66 notes to the financial statements
94  stv group plc company financial statements 
– independent auditors’ report
96 company balance sheet
97 statement of t otal recognised gains and losses
98  notes to the company financial statements
104  five y ear summary
shareholders
105 shareholder information
107 notice of meeting
highlights of 2011
 pre exceptional
ebitda million

£17 4m  
2010 £169m 
3
investment in new local media services
delivering uk’s most comprehensive  
news service
designed and produced by t ayburn annual report and accounts 2011 stv group plc
company registration number sc203873
the digital stv
annual report and accounts 2011
the stv appeal 2012 is here  
visit www stv tv  appeal to see how you can help
in producing this report we have chosen production 
methods which aim to minimise the impact on our 
environment the papers chosen – revive 5050 gloss  
and revive 100 uncoated contain 50 and 100 recycled 
fibre respectively and are certified in accordance with the 
fsc forest stewardship council both the paper mill and 
printer involved in this production are environmentally 
accredited with iso 14001
stv group plc
pacific quay
glasgow g51 1pq
t el 0141 300 3000
wwwstvtv


Summary:
 richard findlay
chairman
“ our commitment to delivering 
high quality public service 
content in innovative ways 
continues to enable us to 
strengthen our relevance and 
connection with audiences” 
	 f or 	 financial 	 updat e s 	 	
on 	 s tv 	 visit 	wwwstvplctv
annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 04
chairman’s statement
the company has delivered a robust financial performance  
in a year that has been dominated by the challenges of the 
macroeconomic environment and the associated impact on 
consumer confidence we continue to implement rigid cost 
control whilst investing in key growth areas to innovate in 
content production and engage with consumers across 
multiplatforms 
our results in 2011 demonstrate the increasingly robust  
position of the company and that actions taken in recent years 
to scale the business appropriately are improving underlying 
profitability despite a slight reduction in turnover  
market leader in scotland 
profit before tax and exceptional items is £140m and earnings 
before exceptional items tax depreciation and amortisation  
is £17 4m national airtime revenues performed in line with 
expectations down 3 at £67 9m the regional airtime revenue 
market was weaker reflecting the impact of the downturn on  
the scottish economy and ended down 13 at £129m we do 
however  continue to be the market leader in the scottish 
market and in 2011 we have consolidated our leading edge 
position through our targeted and strategic investment in the 
key digital initiative stv local as this platform is developed 
with the launch of further sites we are providing opportunities 
for a new portfolio of advertisers and commercial partners to 
reach their target markets in a cost effective way 
at the beginning of 2011 we made carefully considered 
organisational changes which have successfully positioned  
the company as a consumer focused content business and of 
course all our services are now delivered via digital platforms 
broadcast online and mobile these services offer our audiences 
various ways in which to connect with us while at the same time 
delivering solutions for advertisers and commercial partners 
diversifying our content offering 
our content business – stv productions – has continued to 
broaden its activities across genres and extend the customer 
base it supplies during 2011 working with a wider range of 
broadcasters than ever before including a significant pipeline  
of programmes from the bbc the business enters 2012  
with a strong portfolio of commissions across a wide range  
of channels 
in april we announced the cessation of legal actions with  
itv plc and itv network and the establishment of a settlement 
agreement which has served to clarify a number of the 
differences between the parties we continue to work with itv 
under existing networking agreements and in december we 
confirmed the financial details of the agreement reached with 
itv whereby we will pay £108m over 18 months all of which is 
provided for within our banking facilities and will be partly offset 
by opt out programme savings in the future we believe there  05
are better ways of arranging the current network agreements 
and hope that within the improved atmosphere a consensus  
on this will be reached very soon 
our commitment to delivering high quality public service 
content in innovative ways continues to enable us to strengthen 
our relevance and connection with audiences we have made 
significant enhancements to our service during 2011 with the 
introduction of new programmes delivered across our various 
platforms investment in new technology allows us to deliver  
a more relevant news service to audiences across scotland  
we now provide the most locally focused news and current 
affairs tv services in the uk and we are achieving increased 
audience share and engagement in response this important 
development differentiates stv from many of our competitors 
at a time when commercial pressures are causing them to 
significantly reduce their commitments and ambitions in  
this area 
as a leading provider of locally focused services we welcome 
the government’s decision to proceed with the introduction  
of local television services and we are participating in the 
consultation exercise to determine the process through which 
licences will be awarded we believe that such services will  
by their very nature be financially fragile and that the key  
to the success of these licences in scotland will be to ensure 
that they are complementary to the existing comprehensive 
service provided by stv  
digital is in our dna 
our digital and online strategy is now firmly embedded across 
stv and this has transformed from being a new business 
venture to a deep rooted core business activity  we have 
delivered a strong performance against our digital kpis and 
achieved significant year on year revenue growth of 69  
as we continue to leverage our investment in content across  
all platforms i am confident that we will continue to deliver 
further growth and create value across our entire inventory  
our strategy is underpinned by a culture of innovation and  
in 2011 we have launched a number of new services and 
introduced new opportunities to grow transactional revenues 
in addition to our strong public service ethos we are committed 
to being a good corporate citizen and to give something back  
to the communities we serve in 2011 we launched the inaugural 
stv appeal a major charity run in partnership with the hunter 
foundation initially to support children and young people 
affected by poverty in scotland working closely with six major 
scottish charities we raised over £12m – including generous 
financial support from the scottish government  to underpin 
local projects all across scotland we have confirmed our long 
term commitment to the stv appeal and planning is now 
underway for the 2012 appeal which will continue to focus  
on youth poverty in scotland 
during 2012 the secretary of state will begin to consider the 
position of the channel 3 licences which will expire at the end of 
2014 we continue to engage with ofcom and the government 
on this matter and believe that the underlying strength of our 
business the extent of our connection with our audiences the 
significant positive impact the company makes to the creative 
industries sector in scotland and our strong commitment to the 
delivery of high quality public service content at a local regional 
and national level all serve to demonstrate our unrivalled 
credentials to continue to hold the licences for stv central  
and stv north in the long term 
a clear strategy for growth
in our 2011 interim trading update i confirmed our longterm 
strategic vision to be a consumer focused business which will 
generate over onethird of its earnings from non broadcast 
activities by 2015 through the significant progress already 
achieved this year coupled with our track record in delivery  
of our commitments and targets evidenced by achieving or 
exceeding the majority of our kpi targets and a supportive 
board and highly capable leadership team and staff i am 
confident that we will deliver this goal 
with a clear strategy for growth mapped out a strong and 
focused team delivering on our targets an exciting pipeline  
of programmes both from ourselves and others together with 
our strong news performance locally regionally and nationally 
2012 looks to be another busy and exciting year for stv 
all this would not be possible without our dedicated staff  
and management team led by our chief executive officer   
rob woodward my thanks to them and to my board  
colleagues for their achievements over the last year 
richard findlay
chairman annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 06
chief executive’s review
b uilding 	 t omorr o w’ s 	 s tv
a conversation with rob woodward 
and charles mcghee on how 
innovation will deliver performance  
in the changing media landscape
the imposing structure of glasgow university shimmers in  
the winter sun as stv’s chief executive rob woodward takes  
in the spectacular view across the clyde from the company’s 
pacific quay headquarters “y ou soon won’t be able to see  
that” he points out as scotland’s new national arena takes 
shape next to the secc 
the impressive ultramodern addition to glasgow’s skyline  
will eventually eclipse the view of the ancient university but 
nothing is obscuring woodward’s vision for stv as he reflects 
enthusiastically on a year of progress in the face of tough 
trading conditions and against a backdrop of rapid and radical 
change in the media landscape
“we’re definitely very pleased with the performance of the 
company” he says allowing himself a faint smile of approval 
“we’ve increased our underlying operating profit level year  
on year by 4 and underlying earnings per share have 
increased by 11 those are pretty strong indicators in terms  
of the actions that we continue to take as a management  
team of our ability to weather any storm in the external 
advertising market”
weathering storms has been a regular feature of stv’s voyage 
in recent years – and perhaps even inspired the decision to give 
their popular weather presenter  sean batty his own show – but 
few would question that the company has emerged stronger  
leaner and fitter from the experience
for example stv knew it would suffer from the advertising 
downturn in the last quarter of 2011 but flagged it to the market 
early and dealt with it effectively  settling its longrunning legal 
dispute with the itv network last year also sent a strong signal 
that stv was back on track although the company will have to 
shoulder the £18 million settlement costs over the next few 
years it removed a major financial uncertainty and together 
with the new banking deal announced before christmas gives 
woodward and his team the stability they need to execute their 
strategic plans for the future 
“we were delighted to reach the settlement with itv ” said 
woodward “what we are focusing on now is agreeing a 
longerterm working relationship there remains a strong 
opportunity to have a simplified and more commercial 
relationship which would allow us to continue to get sovereign 
access to itv1 programmes in our territory and that’s what 
we’re striving to agree”
will such an agreement mean an end to dropping itv 
blockbusters such as the first series of downton abbey 
woodward insisted however that “blockbusters” tend to be 
defined retrospectively “downton abbey did end up being  
an absolute blockbuster and that’s why we reversed our 
decision but i would argue strongly – based on audience 
feedback and looking at audience numbers – that the balance 
we’re now achieving feels appropriate
“we will still opt out of some itv programming but by and  
large we will take most of itv’s peaktime schedule and from 
time to time insert some of our own programming which is 
what we have been doing consistently over the last three years”
the itv relationship will also be dependent of course on the 
outcome of the new commercial broadcasting licensing round 
ofcom begins consultations this year on the 2014 renewals but 
the stv chief executive remains confident about the renewal  
or extension of stv’s licences as well as a refreshed and 
flourishing future association with itv  the persistent rumours 
that stv together with its northern ireland equivalent utv 
would ultimately be swallowed by the itv behemoth appear 
finally to have receded particularly with the political climate 
increasingly favouring the local incumbents
 “we are confident about our position” says a buoyant 
woodward “we continue to put content at the heart of the 
company we have overdelivered on most if not all of our 
licence obligations and have been consistent in our commitment 
to provide more not less public service in terms of the licence 
renewal process – given our performance and commitments 
– we believe we are in a very strong position and that gives us 
confidence in continuing the ongoing negotiations with itv ”
as if to underline the point he returns to the company’s 
performance figures rattling off targets successfully met in  07
rob woodward
chief executive in 
conversation with 
charles mcghee
“ we continue to put content at the heart  
of the business we have overdelivered  
on licence obligations and have been 
consistent in our commitment to provide 
more public service content” annual 	 r epor t 	 and 	 a c c oun t s 	 2 011
directors’ report – business review 08
quickfire succession “we’ve ended up performing extremely 
well against our set of operational kpis in particular  i’d point 
you towards our digital business we only just missed one digital 
revenue kpi by £200k and we set a pretty stiff target and 
digital margin was only narrowly missed due to investment in stv 
local we’ve increased revenues by 69 and any business which 
grows its revenues to this extent is clearly performing well” 
while accepting the impressive growth may have been from  
a low base woodward insists “we’ve created this business  
from scratch and we are now getting around three million 
unique visitors to our site every month – and that’s continuing  
to grow that’s nearly a 40 uplift in usage year on year   
people are flocking to these services
“the next milestone is to get more people to come for longer   
to explore more to spend more and to increase the overall  
level of engagement”
t o help reach that milestone stv has enlisted the help of 
experian the global information services group and one of  
the world’s leading credit reference agencies the company 
collects detailed information on businesses and individuals 
including lifestyle data and woodward hopes the link with 
experian will help stv acquire a more intimate understanding  
of its customers
“we are moving away from talking about audiences – where  
we basically knew very little – to a world where we talk about 
consumers” he said “in this world a direct relationship between 
the media company and the end consumer is fundamental so 
we are using developments online to enable us to capture data 
and build a relationship literally with the individual 
“i believe this will be very powerful for stv  it will enable us  
to offer advertisers a combination of mass market coverage 
which is clearly what television has been so strong at over  
the years but in conjunction with highlytargeted marketing  
and advertising and it’s that combination which will make  
us distinctive” 
stv’s distinctive digital offering also includes local of course 
and last year stv local – an online community news and 
information service – was rolled out with high expectation 
although that momentum has slowed a little to allow stv  
to reconfigure its service to better meet the differing needs  
of scotland’s larger towns and cities and rural communities  
the commitment remains solid 
“we are 100 committed to stv local” said woodward “it’s 
innovative nobody else is providing a similar level of service 
and in around a month’s time we will launch completely 
revamped sites to cover glasgow and edinburgh as well as 
continuing the rollout across the country the target is to cover 
80 of scotland we believe what we’ve come up with will build 
on our success to date and take stv local to the next level”
other local developments could also be on the horizon the stv 
chief stressed that “local media excites us” and confirmed they 
are watching closely the uk government’s plans for local 
commercial tv although glasgow and edinburgh will be among 
the first 20 uk locations to get licences the stv chief believes 
that until the government publishes its detailed proposals it is 
too early to assess the full business potential 
meanwhile alongside local and digital stv also wants to be 
distinctive in content one of the main pillars of its growth 
strategy for 2012 a strategy which includes a target to deliver 
33 of total earnings from nonbroadcast activities by the end 
of 2015 this includes selling content to other broadcasters 
through stv productions and there’s a slight tinge of regret in 
woodward’s voice as he admits the company would have liked to 
have shown more progress in this area he quickly counters any 
sense of disappointment however  by pointing out stv 
productions has been “transformed” 
“this was a business that was around 80 reliant on deliveries 
to the itv network we’ve now grown a business where we’re 
selling and producing programming for the bbc for itv and  
for channel 4 we also have a joint venture established in the  
us and produced our first programme commission perez hilton 
for itv2 last year  so if i look at the pipeline for content then  
we have a lot to give us cause for strong confidence”
chief executive’s review
b uilding 	 t omorr o w’ s 	 s tv 	 c on tinued
we are moving away from talking 
about audiences to a world  
where we talk about consumers 09
and as if on cue the stv boss suddenly reveals “we will 
shortly be confirming a new twoyear deal with the bbc  
to produce another four series of antiques road t rip”  
but woodward wants to do more much more right across  
the spectrum whether it’s breaking new ground with 
productions like f ast freddie the festive special for itv   
or resurrecting old favourites such as scottish passport 
he is also pleased with the ratings for stv’s new nightly  
news programme scotland t onight which he claims has  
quickly established an audience double that of bbc rival 
newsnight scotland its success is in sharp contrast to the 
shortlived weekly version of the magazine programme  
the hour “it just didn’t produce the audience we were 
expecting” said woodward 
one factor which has prevented stv productions from  
reaching its full potential is stv’s unfulfilled ambition  
to obtain independent producer status says woodward  
“it is costing jobs in scotland and it has an overall negative 
impact on the strength of the scottish creative sector   
it’s something we will continue to campaign for ”
as an independent producer  stv would be eligible to bid for 
more commissions from the bbc at present they are excluded 
from tendering for the 25 of bbc commissions which are 
ringfenced for independents any bbc work stv currently  
bids for therefore has to be won in open competition against  
the independents – and the bbc itself 
“with independent producer status our ability to sell to the  
bbc would be hugely enhanced” adds woodward “and that  
is why we feel so strongly about it”
he also feels strongly that governments – at westminster and 
holyrood – could do much more to support the creative 
industries woodward argues forcefully that only two countries 
in europe – germany and the uk – do not provide any form of 
fiscal incentive for television production companies 
and he points out that even in “free economies such as the 
united states” a considerable amount of support is available 
“my argument is that i believe there is an opportunity for 
scotland to become a strong creative hub that is recognised  
on a world stage i think we have the talent here in scotland  
but unless there is some kind of fiscal incentive my prediction  
is that it is unlikely to happen”
in the absence of such incentives however  stv has been 
pursuing alternative options including successful strategic 
partnerships within scotland’s creative industry sector  these 
have included projects such as scotland’s greatest album  
with the scottish sun and real radio and the stv appeal  
with the hunter foundation other collaborations will almost 
certainly follow 
woodward was delighted at the success of the stv appeal 
which raised £12 million for 48 children’s charity projects in 
scotland and confirmed it will be repeated this year in aid of the 
same cause but he pointed out “it wasn’t just about the money 
it was also about us being able to highlight the simply horrific 
story of child poverty in scotland t o be able to shine a light on 
initiatives which are really making a difference to me was just  
as important as the £12 million”
the appeal topped a period of positive progress and helped  
the company end its year on a high prompting the tonguein
cheek suggestion that there is ‘life after t aggart’ for stv  
to which woodward responded intriguingly “t aggart isn’t 
necessarily dead we continue to look at innovative ways  
of bringing that back”
memo to ds jackie reid “the body’s probably hidden in that 
fancy new building across the clyde check it out”
media consultant charles mcghee is a former editor  
of the herald and evening times newspapers