TUI Travel PLC : Annual Financial Report

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4 January 2013

TUI TRAVEL PLC

ANNUAL REPORT & ACCOUNTS

AND NOTICE OF 2013 ANNUAL GENERAL MEETING

TUI Travel PLC ("the Company") announces that its Annual General Meeting will be held on Thursday 7 February 2013 at 10.30am at the offices of Herbert Smith Freehills, Exchange House, Primrose Street, London EC2A 2EG. In connection with this, the following documents have been posted or made available to shareholders today:

· Notice of 2013 Annual General Meeting ("AGM Notice");

· Annual Report & Accounts for the year ended 30 September 2012 ("Annual Report & Accounts"); and

· Proxy Form for the 2013 Annual General Meeting.

In accordance with Listing Rule 9.6.1, copies of the AGM Notice and Annual Report & Accounts have also been submitted to the National Storage Mechanism website and will shortly be available for inspection at:www.hemscott.com/nsm.do.

The AGM notice and the Annual Report & Accounts are available on the Company's website:http://www.tuitravelplc.com/investors-media/shareholder-centre/annual-general-meeting

The appendices to this announcement contain additional information which has been extracted from the Annual Report & Accounts for the purposes of compliance with the Disclosure and Transparency Rules ("DTR") and should be read together with the Final Results Announcement, which can be downloaded from the Company's website:

http://www.tuitravelplc.com/investors-media/shareholder-centre/annual-general-meeting

This announcement should be read in conjunction with, and is not a substitute for, reading the full Annual Report & Accounts. Together these constitute the information required by DTR 6.3.5 which is required to be communicated to the media in full unedited text through a Regulatory Information Service.

APPENDICES

Appendix A: Directors' responsibilities statement

The following responsibility statement is repeated here solely for the purpose of complying with DTR 6.3.5. This statement relates to, and is extracted from, page 55 of the Annual Report & Accounts. Responsibility is for the full Annual Report & Accounts not the extracted information presented in this announcement or the Preliminary Results Announcement:

Each of the Directors, whose names and functions are listed on page51 confirm that, to the best of their knowledge:

· the Group financial statements, which have been prepared in accordance with IFRSs as adopted by the EU, give a true and fair view of the assets, liabilities, financial position and profit of the Group; and

· the Directors' Report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal risks and uncertainties that it faces.

The Directors also confirm that:

· so far as they are aware, there is no relevant audit information of which the Company's auditors are unaware; and

· they have taken all the steps that they ought to have taken as a Director in order to make themselves aware of any relevant audit information and to establish that the Company's auditors are aware of that information.

The Directors' Responsibilities Statement was approved by a duly authorised Committee of the Board of Directors on 3 December 2012 and signed on its behalf by William Waggott, Chief Financial Officer.

Appendix B: Principal Risks

A description of the principal risks that the Company faces is extracted from pages 23-27 of the Annual Report & Accounts:

Risk category	Nature and extent of risk	Current mitigation
STRATEGIC
Consumer Preferences & Desires Strategic drivers ? Content ? Brands & Distribution ? Technology ? Growth & Scale	Context Price, product and social media play a key part in the consumer's decision-making process. Consumers are increasingly turning online to research and book holidays and are moving towards booking nearer the time of travel. "Our direct distribution channels are central to the Group's continued growth. We have room to expand these in all our markets which will lead to improved margins and better results. The core contribution of our direct distribution comes from online channels." "At present we consider ourselves to be an online-driven Group, however, we can do more. The online drive continues across the Group from front-end customer interaction at the time of booking to back office functions." Risk We do not respond quickly enough to changes in consumer preferences and do not keep up with latest technological developments. Potential impact Our market positions come under pressure resulting in lower short to medium-term growth rates and reduced margins.	Group-wide · Our strategy emphasises our vision of being 'online-driven' and ensures we focus on providing our customers with an easy and inspiring online experience. We continue to develop and enhance the nature and mix of our distribution channels including increasing our participation in social media according to the preference of our customers encompassing the entire customer journey from dreaming and planning, through to experiencing and sharing. Tour Operator · We have implemented a distribution strategy tailored to the specific customer preferences and market dynamics of each of our source markets. We remain focused on our strategy of controlled distribution through which we will enhance our customer access and reduce costs. Within our Mainstream business we are now leveraging our new structure to enhance the portfolio of unique and exclusive products which will increase our competitive advantage, command a premium margin and attract greater customer loyalty. Within our Specialist business we have developed a strong brand portfolio of tailor-made products and services and will continue to look for specialist innovative products and attractive markets that cater for changing customer needs and that will provide future growth. · We are in the process of upgrading our web front-end reservation and finance systems across all source markets within our Mainstream Sector. These technology upgrades will provide our websites with new search functionalities, improved personalisation and richer content as well as enhanced mobile capability as our customers increasingly research and book their holidays on mobile devices. Our Specialist businesses have made good progress in consolidating their finance and reservation systems to leverage our scale across multiple brands and continue on their journey of standardisation while balancing the varied requirements of the different holiday experiences they offer. Online Accommodation · We have a wide and diverse range of hotel stock and our strategy focuses on increasing this further as we seek to provide our customers with a one-stop-shop for their accommodation needs. · We seek to ensure that both our Accommodation Wholesaler and Accommodation OTA businesses are supported by effective and efficient IT platforms. Within the Accommodation Wholesaler business our operational systems are being upgraded and updated in order to continue improving service delivery to global customers and in the Accommodation OTA business we have been investing, and continue to invest, in a new platform to support our growth strategy.
Business Improvement Opportunities Strategic drivers ? Content ? Brands & Distribution ? Technology ? Growth & Scale	Context The Group is heavily reliant on legacy systems, processes and structures which, in some cases, are outdated, complex and inefficient. "We have been successful in implementing Group-wide cost efficiency and business improvement programmes as we have done over previous years. The total savings made this year of these activities equates to £42m. The drive for operational efficiency is Group-wide." "Technology is an integral part of the direction we are heading in and as such, in March 2012, we appointed Mittu Sridhara as the Group's Chief Information Officer and member of the Group Management Board. The online drive continues across the Group from front-end customer interaction at the time of booking to back office functions." Risk We do not address successfully the legacy inefficiencies and complexities of our existing infrastructure. Potential Impact We incur higher costs due to inefficiencies, impacting our ability to optimise business performance and provide a value added service to our consumers.	Group-wide · We have progressed our ambition to strengthen our internal control environment through the rollout of the COSO control framework across the Group and we continue to implement business continuity management in our various businesses in order to build resilience into our operations. · We continue to drive stronger and more cost-effective relationships with our key service providers through better co-ordination of key procurement activities across the Group, better targeting of prepayments as well as closer scrutiny of the financial standing of our key partners and their achievement of required standards of customer service, Health & Safety and sustainable development. Tour Operator · We have consolidated our tour operator businesses in French Mainstream to create a single business and have repositioned our French airline as a scheduled carrier specialising in long-haul through delivery of the Corsairfly transformation project. Our strategy within German Mainstream is progressing and starting to deliver growth through differentiated and exclusive products. Our focus now is to use our new Mainstream structure to leverage scale in order to grow and consolidate our leading position within Europe. We review continuously areas where the efficiency of our operations can be improved without compromising on customer experience. · As mentioned under consumer preferences and desires we are in the process of upgrading our web front-end reservation and finance systems across all source markets with plans progressing well in our key source markets i.e. Germany and UK. This will deliver significant improvement in both the customer booking experience and back office process efficiencies and we continue to examine opportunities to further consolidate in our other source markets. Online Accommodation · Our scale is a key factor in driving our Online Accommodation business and in a price-driven environment with lower margins high volumes can be leveraged to gain competitive advantage. We are a firm leader in the Accommodation Wholesaler market and have a clear strategy of consolidating this position further by continuing to grow our existing destinations and accelerating our expansion into new markets. Within the Accommodation OTA market we are concentrating our growth strategy on attractive emerging markets which exhibit the highest growth potential in this segment. · Our IT transformation programme in both the Accommodation Wholesaler and Accommodation OTA businesses looks to improve overall competitiveness and to facilitate the rapid integration of new brands whether acquired or organically developed.
Emerging Markets, Acquisitions & Investments Strategic drivers ? Content ? Growth & Scale	Context The Group continues to look into new markets as the traditional Mainstream markets mature. Specialist businesses, accommodation online and the Emerging Markets represent a significant opportunity to participate in longer-term travel growth trends and have higher growth potential. "During the year, we consolidated our existing businesses (in Russia and CIS source market) into a single brand (TUI) featuring all destinations, establishing a strong platform for the future. The Sector now has close to 600,000 customers, up 15% on prior year." "We successfully entered the Brazilian market through the acquisition of MalaPronta.com in September 2012." Risk We do not maximise opportunities to deliver results in Emerging Markets because we have limited experience in these markets and/or we have difficulty in integrating operations and systems. Potential Impact Our potential long-term growth rates and margins are impacted with cash flows lower than anticipated and significant absorption of resource.	Group-wide · We have a team dedicated to exploring and evaluating our strategic options and growth opportunities worldwide through desktop and local research. Tour Operator · We have established a significant presence in the fast-growing Russian and the CIS markets as part of our longer-term growth strategy and these businesses are now starting to reach critical mass. We have also launched small tour operating businesses in the Indian and Chinese markets. Online Accommodation · We are concentrating our growth strategy on attractive emerging markets which exhibit the highest growth potential in this segment. AsiaRooms is now an established and growing Accommodation OTA brand in the Asia-Pacific region and we are expanding further in to the Americas and Asia with our Accommodation Wholesaler business. · We recently acquired MalaPronta.com, Brazil's fourth largest accommodation-only OTA which has given us a foothold into the fast-growing and lucrative Latin American (LATAM) market. We are now concentrating on our expansion into other attractive emerging markets which exhibit high growth potential and are accelerating our expansion plans with particular focus on Asia, Latin America and Africa.
OPERATIONAL
Global Financial Factors Strategic drivers ? Growth & Scale	Context The cross-border nature of trading exposes our business to fluctuations in exchange rates and complex tax laws. In addition a significant proportion of operating expenses are in relation to aircraft fuel which isalso subject to fluctuation. Pressure in the travel and tourism and banking sectors is set to continue due to the inherent risks within travel and tourism, the Eurozone debt crisis and the introduction of Basel III. "Over the last 12 months, Eurozone countries have had to come to grips with austerity measures placed on them by national governments, some more severe than others. We continue to monitor the developments across the region and do not expect this to have a major impact on our business. The good relationships we have with our suppliers and the flexibility in our business model means we are well positioned to deal with any eventuality." "We have recorded our largest underlying profit figure to date, despite the Eurozone crisis which led to a negative foreign exchange translation. We reviewed and approved the Group's overall taxation strategy during the year. This covered the key factors for the Group's overall tax position and forecasts for the future tax charge and cash taxes and we remain satisfied with our funding and liquidity position and have three main sources of long-term debt funding." Risk We do not manage adequately the volatility of exchange rates and fuel prices or other rising input costs; we face an increase in tax authorities taking a more strident tax approach in order to fund local fiscal deficits and we face difficulties in securing additional facilities, if needed and at a reasonable cost. Potential Impact We suffer increased costs which reduce demand resulting in lower revenue and/or margins. We face a negative impact on cash flow, lengthy tax litigation processes and possible reduction in Group's after-tax earnings.	Group-wide · Our policy is to ensure hedging cover for fuel and foreign currency is taken out ahead of source market customer booking profiles in order to provide certainty of input costs when planning pricing and capacity. · We track closely the foreign exchange and fuel markets to ensure the most up-to-date market intelligence and we monitor continuously the appropriateness of our hedging policies. · We have developed, and continue to maintain, high quality relationships with tax authorities and are in regular communication to keep them abreast of the commercial reality of our business operations. Where appropriate, we minimise uncertainty through recording of provisions to reflect potential tax exposures. · We review our funding and liquidity position and continue to ensure our key facilities are refinanced well ahead of maturity. We have three main sources of debt funding; including external bank revolving syndicated credit facilities totalling £970m which mature in June 2015 and are used to manage the seasonality of the Group's cash flows and liquidity, a £350m convertible bond (due October 2014) issued in October 2009, and a £400m convertible bond (due April 2017) issued in April 2010. · We have developed, and continue to maintain, high quality relationships with the Group's key financiers and monitor compliance actively with the covenants contained within our financing facilities.
Economic Environment Strategic drivers ? Content ? Distribution ? Growth & Scale	Context Spending on travel and tourism is discretionary and price sensitive. The economic outlook remains uncertain with different source markets at different points in the recovery cycle. Consumers are also waiting longer to book their trips in order to assess their financial situation. "Whilst the uncertain economic environment has had an effect on consumer travel spending habits, demand for leisure travel remains strong." "Overall, the Group has expanded its unique holidays portfolio (this is our differentiated and exclusive products combined) which books earlier and provides higher margins for our businesses." "We are able to take advantage of our scale and technological developments to offer our customers a wide variety of choice at very competitive prices. We have the market-leading position in Accommodation Wholesale and continue to invest in our own Accommodation Online Travel Agent (OTA) business." Risk We do not respond successfully to changes in consumer demand and/or the consumer preference for late booking. Potential Impact Our short-term growth rates and margins are lower than anticipated.	Group-wide · We are working across our Mainstream Sector to ensure our unique holidays and distribution channels are aligned closely with the aspirations and preferences of our customers to drive more benign business conditions (see Consumer Preferences & Desires risk). We also ensure that we exploit the flexibility and resilience of our business model and the functionality of sophisticated capacity and yield management systems to the fullest extent. Through their active management we can ensure that capacity is aligned very closely to forecasts in order to protect margins and profit growth. Within our overall accommodation online business, the model involves minimum commitment or risk and operates extremely well in relation to the latest market.
Talent Management Strategic drivers ? People	Context The Group's success depends on its ability to retain key management and it relies on having good relations with its colleagues. "Our results are reflective of our resilient and flexible business with the right strategy for the market and a large number of colleagues who care about our customers, who are passionate about our leisure travel experiences and can plan, implement and deliver growth." Risk We are unable to attract and retain talent, build future leadership capability and maintain the commitment and trust of our employees. Potential Impact We do not maximise on our operating results and financial performance.	Group-wide · We assess continuously our current capability against that required to maximise current and future shareholder value. · We have ensured succession plans are in place for all identified business critical roles, in particular emergency successors for all source market and Sector board roles, and these plans are reviewed every six months. · Our succession planning for senior management appointments was reviewed during the year by the Nomination Committee, as was the broader issue of talent management across the Group. · Our talent management priorities are overseen on an ongoing basis by the Capability Committee which assesses the strength of the talent pool relative to the needs of the business. It uses inputs from a number of sources such as the Group Risk Management Committee to inform those priorities and take the necessary action to deliver the balance of skills, knowledge and experience required to deliver the business strategy. · We use our Group-wide leadership framework to develop and recruit all senior roles and to drive high levels of pride and engagement. · This year we conducted competency testing, in conjunction with Korn Ferry, of our key finance management which enabled us to assess the adequacy of the skill-set of individual finance managers as well as the competency of the finance community within key businesses and across the Group as a whole. We also launched our Finance Academy to drive up levels of financial maturity within our various businesses which has been very well received by our employees. · We continue to invest in international and tailored graduate programmes and more generally in the training and development of our people to ensure they have the right skills. This is further supported by the introduction of centres of excellence to enable the sharing of best practice so that skills are not limited to one source market. · This year we refreshed the performance and talent management guidelines and have continued to drive high performance and engagement through our performance review, development plans and career planning process.
Political Volatility, Natural Catastrophes and Outbreaks Strategic drivers ? Content ? Growth & Scale	Context Providers of holiday and travel services are exposed to the inherent risk of domestic and/or international incidents affecting some of the countries/destinations within its operations. "2012 has been a record year for our business. We are pleased to be reporting a 4% increase in underlying operating profit for the full year to £490m (2011: £471m). This is even more impressive against a backdrop of global economic uncertainty, political turmoil, weak consumer sentiment, the Eurozone crisis and natural catastrophes." Risk We are not able to respond efficiently and effectively to large scale events. Potential Impact We suffer significant operational disruption in our source markets and destinations leading to significant losses (holiday cancellations, repatriation of customers) and a general decline in consumer demand and increase in our insurance premiums.	Group-wide · Our business model is based on having a balanced destination mix to minimise concentration and having flexible supplier agreements in order to enable capacity to be switched as required. · We have strong relationships with local tourism bodies, travel and aviation industry associations and monitor actively the political situation in volatile destinations and act upon security intelligence advice as it is received. · We seek continuously to minimise the impact of any negative events in our source markets and destinations should they occur by ensuring the effective execution of our established incident management and emergency response plans and the deployment of our experienced leadership teams to support and repatriate stranded customers. · We promote the benefits of travelling with a recognised and leading tour operator to increase consumer confidence throughout source markets.
COMPLIANCE
Regulatory Environment Strategic drivers ? Content ? Growth & Scale	Context Industries in which the Group operates are highly regulated, particularly in relation to consumer protection, aviation and the environment. "As a global organisation, we feel the impact of government regulation in all of the markets in which we operate. Some of our activities, such as those undertaken by our airline, are heavily regulated. Our focus is always to work with governments to bring forward legislation that is fit for purpose, is no more burdensome on industry than it needs to be and does not discriminate between different business models." "Our Sustainable Holidays Plan is a major step forward for TUI Travel in our journey towards providing special travel experiences whilst minimising environmental impact, respecting the culture and people in destinations and bringing real economic benefit to local communities." Risk We do not establish an effective system of internal control to ensure we operate in compliance with all legal and regulatory requirements. Potential Impact We suffer negative impact which damages our reputation and incurs higher costs.	Group-wide · We continue to address issues affecting the industry and our customers through our skilled public affairs team who work closely with governments and regulators to ensure our position is communicated clearly and understood. · We believe we have taken appropriate action and established appropriate monitoring controls to minimise the impact of the recent ruling by the European Court on delayed flights. · We are committed to developing more sustainable holidays and to reducing the environmental impact at each stage of our customer's journey. We have a dedicated sustainable development team who support the Group and work closely with business management (see our Sustainable Development section). · We are focused on delivering our carbon management strategy through commitment to reducing TUI Travel's airlines' per revenue passenger carbon emissions by 6% by 2013/2014 (against a baseline of 2007/08 - see our Sustainable Development section). · We have submitted TUI Travel's annual 2011 airline data, which has been externally assured, to the relevant authorities in line with the EU Emission Trading Scheme (see our Sustainable Development section). · Our decentralised structure for Health & Safety management enables our source markets to focus on specific risks in the context of their bespoke operating and legal environments while ensuring appropriate oversight at Group level. · We have rolled out a comprehensive Anti-Bribery & Corruption training programme across the Group in order to raise awareness of the provisions of the Bribery Act 2010 with the intent of preventing bribery and corruption in the countries in which we operate. We monitor the adequacy and effectiveness of the procedures and measures established including legal compliance self-certification twice a year by our businesses across the Group.

Appendix C: Related party transactions

The following description of related party transactions of the Company is extracted from pages 140 to 142 of the Annual Report & Accounts:

Apart from with its own subsidiaries which are included in the consolidated financial statements, the Group, in carrying out its ordinary business activities, maintained direct and indirect relationships with related parties including consolidated or related companies of its ultimate parent company, TUI AG. These companies either purchased or delivered services to companies in the Group.

Shareholder loan

A shareholder loan was advanced to the Company by TUI AG on 13 July 2011, in respect of acquiring Magic Life. The loan bore interest at EURIBOR plus a margin of 2.75% per annum. The principal element of the loan at 30 September 2011, excluding interest, was ?30m. In accordance with the repayment schedule, the loan was fully repaid by 30 September 2012.

Convertible bond

In April 2010, the Company issued a £400m fixed rate 4.9% convertible bond, of which Antium Finance Ltd, an independent special purpose company, subscribed for 50%. TUI AG entered into a forward purchase agreement with Antium Finance Ltd for these £200m convertible bonds, in order to prevent dilution of its majority shareholding. TUI AG is entitled to receive the interest coupon on these bonds and to repurchase these bonds by July 2014 at the latest.

Trademark Licence Agreement

The Trademark Licence Agreement incorporates trademark licences granted from TUI AG to members of the TUI Tourism Group in relation to TUI Tourism's use of the TUI name and logo and other trademarks from within TUI AG's portfolio of trademarks used in the former TUI Tourism's business. Licence fees payable under each licence are an annual fee equal to 0.02 percent of the average annual gross turnover of the relevant licensee under the relevant trademarks measured over a three year period. Total licence fees charged for the year ended 30 September 2012 were £3m (2011: £3m). Each licence's standard terms are for five years with an option for the relevant licensee to extend for a further five years on the same terms.

Hotel Framework Agreement

TUI Deutschland has signed an exclusivity agreement with TUI AG's Robinson hotel portfolio. Under the terms of the agreement, TUI Deutschland paid ?8m in the financial year ended 30 September 2012 and must pay ?10m in the financial year ending 30 September 2013 and ?12m per year thereafter. The contract also contains performance related elements linked to occupancy rates under which either more can be paid or refunds received.

Details of transactions with related parties and balances outstanding at the balance sheet date are set out in the tables below:

	Income		Expenses (including interest)
	Year ended 30 September 2012 £m	Year ended 30 September 2011 £m	Year ended 30 September 2012 £m	Restated Year ended 30 September 2011 £m
Related party
Ultimate parent TUI AG	7	6	6	34
Hotel and resort subsidiaries of TUI AG	8	11	332	319
Other subsidiaries of TUI AG	4	-	2	-
Joint ventures and associates of TUI AG	13	10	73	74
Joint ventures of the Group	47	27	75	82
Associates of the Group	17	15	24	32
Total	96	69	512	541

Income earned from TUI AG includes airline revenue of £3m (2011: £4m) and recharges of administrative costs of £3m (2011: £3m).

Income earned from hotels and resort subsidiaries of TUI AG, joint ventures and associates of TUI AG and joint ventures of the Group includes accommodation and destination services provided by the Group to the related entities. The income relating to the Group's joint ventures includes £35m (2011: £25m) from Togebi Holdings Limited, the Group's joint venture in Russia, and its subsidiaries.

Income received from associates of the Group principally represents aircraft sublease income from Sunwing, as detailed in Note 7.

Expenses paid to TUI AG includes interest expense of £2m (2011: £4m). The remaining expenses paid to TUI AG of £4m (2011: £30m) relates to aircraft lease costs and licence fees.

In addition to the amounts disclosed above, £10m (2011: £10m) of the interest payable in the year in respect of the Group's convertible bonds has been paid to Antium Finance Ltd, a special purpose company which purchased £200m of the Group's 4.9% convertible bond. TUI AG remains entitled to receive the interest on these bonds from Antium Finance Ltd.

Expenses relating to hotels and resort subsidiaries of TUI AG, joint ventures and associates of TUI AG and joint ventures and associates of the Group relates to travel related services, primarily made up of accommodation and destination services costs.

Related party receivables

	30 September 2012			30 September 2011
	Current assets £m	Non-current assets £m	Total assets £m	Current assets £m	Non-current assets £m	Total assets £m
Related party
Subsidiaries of TUI AG	11	-	11	5	-	5
Joint ventures and associates of TUI AG	5	-	5	8	-	8
Joint ventures of the Group	30	34	64	33	-	33
Associates of the Group	6	-	6	2	-	2
Total	52	34	86	48	-	48

Receivables due from related parties are reported in Note 16. Amounts owed from subsidiaries of TUI AG of £11m (2011: £5m) are in respect ofcurrent trade and other receivables.

Amounts owed by joint ventures of the Group that are due after more than one year of £34m (2011: £nil) include a loan of US$12m, equating to£7m (2011: £nil) from TUI Travel Holdings Limited, a direct subsidiary of the Company, to Togebi Holdings Limited. This loan is unsecured, bears interest at a rate of 7% and is repayable by February 2017. The remaining balance due after more than one year principally comprises hotel prepayments made to the Atlantica Leisure Group of companies.

Amounts owed by joint ventures that are due within one year of £30m (2011: £33m) include accommodation costs due from Togebi Holdings Limited and its subsidiaries of £16m (2011: £14m), which were non interest bearing balances. The remaining balance due within one year principally comprises current hotel prepayments made to the Atlantica Leisure Group of companies.

Related party payables

	30 September 2012			30 September 2011
	Current liabilities £m	Non-current liabilities £m	Total liabilities £m	Current liabilities £m	Non-current liabilities £m	Total liabilities £m
Related party
Ultimate parent TUI AG	8	-	8	45	-	45
Hotel and resort subsidiaries of TUI AG	45	-	45	37	-	37
Other subsidiaries of TUI AG	-	-	-	2	-	2
Joint ventures and associates of TUI AG	19	-	19	13	-	13
Joint ventures of the Group	10	11	21	11	10	21
Associates of the Group	12	-	12	17	-	17
Total	94	11	105	125	10	135

Payables outstanding from related parties are reported in Notes 19, 20 and 22.

The above balances exclude £200m (nominal value) of the Group's convertible bonds 4.9% April 2017 which have been sold to Antium Finance Ltd. TUI AG is entitled to receive the interest coupon on these bonds and to repurchase these bonds byJuly 2014at the latest. Further details of the convertible bonds are given in Note 19. Included within the amount payable to TUI AG of £8m (2011: £45m) is a shareholder loan of £nil (2011: £26m).

Amounts owed to joint ventures of the Group due after more than one year includes a US$15m loan, equating to £10m (2011: £10m), to TUI Travel Holdings Limited, from Borublita Holdings Limited, a subsidiary of Togebi Holdings Limited. The loan is unsecured, bears interest at a rate of 5% plus USD 12 month LIBOR and is conditionally repayable in September 2016.

Amounts payable to hotels and resorts of TUI AG and joint ventures and associates of TUI AG are in respect of current trade payables primarily associated with accommodation and destination services costs.

Details on interest rate and liquidity risks in respect of balances with related parties are included in Notes 25(E) and 25(F) respectively.

Key management compensation

In accordance with IAS 24, key management functions within the Group (the GMB and the Directors of the Company) were related parties whose remuneration had to be listed separately. The compensation paid in respect of key management personnel (including Directors) was as follows:

	Year ended 30 September 2012 £m	Year ended 30 September 2011 £m
Short term employee benefits	9	8
Termination benefits	1	1
Post-retirement benefits	1	2
Share-based payments	9	10
Total	20	21

Details of Directors' remuneration are given in the Remuneration report.

This information is provided by RNS

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