Enterprise Products Partners Investor relations material Annual Report 2013

FY2013 Annual Report · Enterprise Products Partners Investor relations material

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Annual Report
2013
Empired Limited and its Controlled Entities
Annual Financial Report for the Year Ended 30th June 2013

ABN 81 090 503 843

CORPORATE DIRECTORY

DIRECTOR
Mel Ashton (Non-Executive Chairman)
Richard Bevan (Non-Executive Director)
John Bardwell (Non-Executive Director)
Russell Baskerville (Managing Director & CEO)

REGISTERED OFFICE

Level 13, Septimus Roe Square
256 Adelaide Terrace
Perth WA 6000

Telephone No: +618 9223 1234
Fax No: +618 9223 1230

COMPANY NUMBER

ACN: 090 503 843

COUNTRY OF INCORPORATION

Australia

COMPANY SECRETARY

Mark Waller

LEGAL ADVISERS

Jackson MacDonald
140 St Georges Terrace
PERTH WA 6000

AUDITORS

Grant Thornton Audit Pty Ltd
Level 1, 10 Kings Park Road
WEST PERTH WA 6005

SHARE REGISTER

Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Terrace
PERTH WA 6000

COUNTRY DOMICILE AND LEGAL FORM

Empired Limited is the parent entity and an Australian
Company limited by shares

ASX CODE

EPD

PRINCIPAL PLACES OF BUSINESS

PERTH
(Head Office)
Level 13, Septimus Roe Square
256 Adelaide Terrace
PERTH WA 6000
Telephone No: +618 9223 1234
Fax No: +618 9223 1230

(Conducive Pty Ltd)
Level 4, 110 William Street
PERTH WA 6000
Telephone No: +618 9211 4800
Fax No: +618 6267 8132

MELBOURNE
Level 5, 257 Collins Street
MELBOURNE VIC 3000
Telephone No: +613 8610 0700
Fax No: +613 8610 0701

BRISBANE
Level 9, 288 Edward Street
BRISBANE QLD 4000
Telephone No: +617 3831 3883

WEBSITE ADDRESS:
www.empired.com

CONTENTS

CORPORATE DIRECTORY

CORPORATE DIRECTORY
DIRECTORS’ REPORT
CORPORATE GOVERNANCE STATEMENT
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

NOTES TO THE FINANCIAL STATEMENTS

CORPORATE INFORMATION
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
REVENUES
EXPENSES
INCOME TAX
EARNINGS PER SHARE
CASH AND CASH EQUIVALENTS
TRADE AND OTHER RECEIVABLES (CURRENT)
WORK IN PROGRESS
OTHER CURRENT ASSETS
PROPERTY, PLANT AND EQUIPMENT
INTANGIBLE ASSETS
EMPLOYEE BENEFITS
TRADE AND OTHER PAYABLES (CURRENT)
BORROWINGS
PROVISIONS
RESERVES
ISSUED CAPITAL
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
FINANCIAL INSTRUMENTS
COMMITMENTS AND CONTINGENCIES
IMPAIRMENT TESTING OF GOODWILL
INVESTMENT IN CONTROLLED ENTITY
EVENTS AFTER THE REPORTING DATE
ACQUISITIONS
AUDITORS’ REMUNERATION
KEY MANAGEMENT PERSONNEL
DIVIDENDS

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.
29. PARENT ENTITY INFORMATION

DIRECTORS’ DECLARATION
AUDITOR’S INDEPENDENCE DECLARATION
INDEPENDENT AUDIT REPORT
SHAREHOLDING ANALYSIS

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12
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31

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33
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HIGHLIGHTS

( 1 )

CORPORATE DIRECTORY

Record Revenue of $48M up 8%

Outstanding Services Growth up 46% to $38 million

Record EBITDA of $4.4 million up 56%

Strong EBITDA margin expansion from 6% to 9%, a 56% increase

Solid cash conversion with Net Operating Cashflow of $5.5M, 125% of
EBITDA

Net Profit After Tax increased to $2.1 million up 68%

Earnings Per Share (fully diluted) up 38% to $0.0304

Declares final fully franked dividend of $0.005 per share

Secured multi-million dollar cloud contract, underpinning Empired's
“flexScale” Investment

Acquired Conducive Pty Ltd, accellerating our strategy, enhancing
our applications business and expanding the managed services
market we contest

Positioned to contest organic growth opportunities of over $150M in
FY14

Contract announcement imminent on a 'game changing' contract
with one of the largest resources companies in the world

Well placed to capitalise on acquisitive growth opportunities to
accelerate our strategy and growth objectives

Strategically positioned to thrive in a changing market place and
drive growth in all key measures over the coming years

(1) All financial results referred to in this commentary exclude $322,024 of one off acquisition transaction costs and include a full twelve month
contribution for the period 1 July 2012 to 30 June 2013 from Conducive Pty Ltd. Empired has full legal entitlement to all profits generated
from Conducive Pty Ltd for the twelve month period 1 July 2012 to 30 June 2013. Empired obtained management control of Conducive's
business operations on 1 July 2012 and legal ownership of Conducive Pty Ltd on 31 August 2012. AASB 127 of the Australian accounting standards
does not allow profits for the period 1 July 2012 to 31 August 2012 to be presented in the financial statements for the half year, these profits have
however been reflected in acquired assets and retained earnings.

UNDERLYING FINANCIAL PEFORMANCE

( 1 )

REVENUE
$48.2M

EBITDA
$4.38M

2010

2011

2012

2013

2010

2011

2012

2013

EPS (DILUTED)
$0.0304

NPAT
$2.14M

2010

2011

2012

2013

2010

2011

2012

2013

(1) All financial results referred to in this commentary exclude $322,024 of one off acquisition transaction costs and include a full twelve month
contribution for the period 1 July 2012 to 30 June 2013 from Conducive Pty Ltd. Empired has full legal entitlement to all profits generated from
Conducive Pty Ltd for the twelve month period 1 July 2012 to 30 June 2013. Empired obtained management control of Conducive's business
operations on 1 July 2012 and legal ownership of Conducive Pty Ltd on 31 August 2012. AASB 127 of the Australian accounting standards does not
allow profits for the period 1 July 2012 to 31 August 2012 to be presented in the financial statements for the half year, these profits have however been
reflected in acquired assets and retained earnings.

6
6

CHAIRMAN & CEO REVIEW

Dear Shareholder,

On behalf of your board of directors we are delighted
to say the previous twelve months has been perhaps
one of the most significant periods in Empired's
history. During the year we have evolved our business
maturity, enhanced the quality and extended the
range of our service offerings, we have strengthened
our sales team, focussed on large strategic deals and
we have made a number of strategic investments that
ensure our positioning in the market has never been
better.

The reported financial performance was Revenue of
$46.5M, EBITDA of $3.57M and NPAT of $1.55M.
This excludes the trading performance of Conducive
Pty Ltd in July and August. Empired had
management control and full entitlement and
benefit of Conducive Pty Ltd earnings through this
period and this has been adjusted in Empired's
retained earnings. Our underlying performance
discussed below includes these earnings and the one
off costs associated with the transaction. It is our view
that this more accurately represents Empired's FY13
underlying financial performance.

(1)

Our underlying financial performance during FY13
continued to deliver solid growth in all key metrics
with revenue up 8% to $48M and importantly
services revenue up 46%. EBITDA grew 56% to
$4.4M and net profit after tax was up 68% to $2.1M.
Earnings per share continued its consistent year on
year growth performance, delivering $0.0304 per
share (diluted) up 38% on the prior year.

(1)

Of particular note are the pleasing improvements in
operating margins and the ability for the underlying
business to generate strong cash conversion.
EBITDA margins grew by 56% from 5.8% in FY12 to
9.1% in FY13 with full year net operating cash flow of
$5.5M, an impressive result particularly in the
current economic climate.

The pleasing financial performance and the
company's track record of delivering earnings growth
and cash flow generation provides the board with
confidence in the future sustainability and growth in
earnings. The Board is pleased to commence the
payment of dividends and has declared a final fully
franked dividend of $0.005 per share. The dividend
payment represents a conservative payout ratio to
NPAT maintaining a strong position to fund growth
initiatives that we are confident will continue to drive
impressive shareholder returns whilst rewarding our
shareholders.

During turbulent and uncertain economic
conditions Empired's business model has continued
to prove its resilience through the defensive nature of
its revenue streams. With revenues currently
weighted 75% to WA and 56% to the mining sector
many may have expected pressure on our business
based on the softening of capital expenditure in these
areas. Contrary to this position and whilst many in
our sector had a difficult year Empired has prospered
with services revenue up some 46%. This is testament
to our strategy of focusing on core operational
business systems that are fundamental to our
customers day to day business performance.

These strategic, financial and operational results
continue to build on our reputation of delivering
market leading performance reliably year on year. We
are confident that FY14 will be no different and are
excited by what is shaping up to be another
transformational year as we continue to capitalise on
our strategic investments and exciting market
opportunities.

Russell Baskerville
Managing Director & CEO

CHAIRMAN & CEO REVIEW

A focus on business solutions

In today's business world, enterprises are under
continued pressure to drive operational efficiency
and improve organisational productivity, whilst
continuing to expand service offerings and enhance
their customer experience to deliver organisational
competitive advantage. The modern enterprise is
today turning to IT organisations to assist in meeting
these challenges through the development of
innovative technology solutions that deliver tangible,
measurable business outcomes.

This is driving a shift in the buying behaviour of
many organisations when procuring IT Services,
seeking the provision of highly customised and
tailored business solutions with quantified
deliverables and tangible business benefits, where
once they sought the provision of simply technical
expertise.

Empired is a relatively young IT organisation and has,
since inception, focused on IT business solutions and
not simply the supply of technical labour. As
traditional IT Services organisations attempt to shift
their service models, Empired is ahead of the game
and well placed to compete and win substantial
contracts with major enterprises in this evolving
environment.

To provide business solutions, Empired firmly
believes that you must have a sound understanding of
the industries in which you choose to specialise. For
some time now we have spoken about our investment
in developing our Energy and Natural Resources
(ENR) practice, we are delighted to reference our
recent nomination as preferred supplier on what will
be a game changing contract for Empired with one of
the world's largest iron ore producers. This is a great
example of our deep understanding of the ENR
industry allowing Empired to provide a genuine and
targeted IT business solution to not only compete but
win against some of the largest IT ser vices
organisations in the world.

During the year we recognised the opportunity to
extend our service offering to include application
development and software systems, which led to the
acquisition of Conducive Pty Ltd. This acquisition
has enhanced our ENR capability and considerably
broadened the market that Empired can contest.

The acquisition has been highly successful.
Culturally the business and people have integrated
very well with only 1 staff member out of 54 leaving in

the last 12 months. The acquisition has been a strong
contributor to profitability, meeting its targets and
was pivotal in securing the nomination as preferred
supplier on the major contract referred to above.

On the back of this success Empired will continue to
accelerate its services portfolio and business
solutions through strategic, targeted acquisitions.

We have also recognised the underlying trend in how
IT solutions are consumed with a marked shift
toward multi-tenanted cloud computing. Empired
invested in this trend early with the development of
its cloud platform “flexScale” provided out of two
data centres with redundancy and real time failover
between the facilities in Perth and Melbourne.

flexScale is a highly competitive, enterprise grade
facility and we are very pleased to acknowledge
Barrick Gold, the world's largest gold miner as our
anchor cloud computing client. Barrick Gold has
signed a multi-million dollar agreement to manage
their core Oracle financial systems for the Asia Pacific
region from Empired's “flexScale” cloud platform.

The initiatives and investments discussed
throughout this review provide your Board with
confidence that Empired is positioned to deliver
tangible business solutions that will enable our
organisation to thrive in a market of change and
opportunity.

Evolving our platform for delivery excellence &
operational performance

At our core, our human talent is our strongest asset.
During the year we continued to build the breadth
and depth of exceptional talent at all levels within our
organisation, we have worked hard to ensure our
culture and EPIC values are engrained in everything
we do and strive to provide an environment that
fosters initiative, innovation and growth.

As we continue to grow and become a larger more
mature business with ambitions to become a leading
Australian IT services organisation we must continue
to drive efficiency, productivity and scalable
platforms throughout our organisation. This will
ensure competitive high quality services, improved
margins and operational performance combined
with well managed and controlled growth. During
the year we delivered a range of enhanced
organisational processes and structured our business
operations to leverage our expanded range of service
offerings. This will ensure we can efficiently scale our

CHAIRMAN & CEO REVIEW

business whilst remaining competitive in the market.

We have recognised that customers increasingly want independent verification of service quality, and on top of our
existing ISO9000 certification, we are currently undertaking a program to achieve ISO20000 certification, the leading
quality standard in the delivery of operational IT services.

We have significantly enhanced our operational management services with the introduction of our National
Operations Centre. This facility is the heart of our Managed Services and, within a centralised location, provides state
of the art systems, processes and automation to monitor and manage our customers’ core operational business systems.
This facility not only provides a strong value proposition to our clients and a competitive advantage, it ensures
appropriate work load matching to resource levels, optimal utilisation of resources 24 hours a day and reduced labour
effort through automation of rudimentary tasks, all leading to a more efficient and productive environment that will
ultimately provide improved operating margins.

An investment has also been made in market leading, real time monitoring, alerting and management software
allowing our engineers to proactively monitor risks, system capacity and potential adverse events and to take action
prior to major incidents occurring within our clients’ core business systems. This will reduce major incidents and
outages for our clients, improve our service reputation and lead to reduced labour effort associated with the resolution
of these outages.

Finally we have continued to enhance our enterprise resource planning system (ERP) that provides Empired a single
source of truth across the entire organisation from lead to cash. This system provides thorough, accurate real time
information and reporting on operational and financial key business drivers. This platform ensures a reliable, proven
and scalable business system to integrate acquisitions and underpin substantial organic growth for many years to come.

We are confident the investments mentioned above ensure that Empired is well placed to continue to evolve its service
offerings in a competitive market place and execute on its growth ambitions in a profitable well managed environment.

Positioned for the future

We have discussed our vision to build a leading Australian IT Services organisation, underpinned by our EPIC values
and culture of initiative, innovation and growth to provide an exceptional customer experience and highly compelling
value proposition.

We have recognised that to take the next big step, which will include an expanded national presence, ongoing
maturing of our systems and processes and the ability to deliver exceptional solutions and customer experience to some
of the world's largest enterprises, we need great leadership and strong management. Over the past two years we have
invested heavily in attracting the very best talent. We now boast a highly experienced leadership group, a proven well
connected and successful business development team that are dedicated to delivering the next organisational
changingcontract and a solid operational management team.

EMPIRED EXECUTIVE TEAM

Russell Baskerville
Managing Director & CEO

Rob McCready
Chief Operating Officer

Mark Waller
Chief Financial Officer &
Company Secretary

EMPIRED EXECUTIVE TEAM

Together this 'A Team' is passionate about collectively driving Empired to be recognised as a major national force in
the Australian IT market place.This team has positioned Empired for an exciting period of strategic growth. During
FY13 we continued to grow our contracted revenue base providing an exceptional platform for growth into FY14.
Arguably more important investment in Fy13 is in positioning Empired to compete over the coming 12 months on
approximately $150M of new business. Success in securing a number of these major contracts will materially change
the level of our contracted recurring revenue and underpin our success for years to come. On this basis we expect an
exciting period of new contract announcements over the coming year.

We will accelerate the execution of our strategy through targeted, strategic acquisitions that will expand our services
portfolio, our geographic reach, the major enterprises we work with and the depth of our most important asset,
human talent. We have demonstrated great success in our execution and integration of acquisitions, with
Conducive Pty Ltd (fully integrated in all aspects during the year) positioned to double revenue nine months
following following completion and only one staff member leaving.

To support this team and our ambitious growth objectives we have invested in state of the art processes, automation
and operational delivery systems that will continue to be developed and enhanced to ensure that Empired has no
operational constraints to its growth ambitions and can deliver on its commitments in a low risk, predictable and
profitable manner.

We are confident that our planning and execution will help deliver another transformational and exciting year for
Empired and all its stakeholders!

We would like to thank our people for their conviction and passion in achieving excellence and striving tirelessly
toward Empired's goals.

Further, we extend our sincere appreciation to our shareholders who have demonstrated great support to Empired
and play a pivotal role in our success.

In closing, we would like to acknowledge our clients that trust Empired to consistently deliver reliable, high quality
services that enable their businesses every day. We thank you for this opportunity and provide our commitment in
striving to continue to meet and exceed your expectations.

Your Board and management team look forward to delivering on what is sure to be an exciting year ahead!

Russell Baskerville

Mel Ashton

Greg Leach
Chief Technology Officer

Branden Dekenah
General Manager
Enterprise Applications

Brett Gresele
General Manager
Infrastructure Services

DIRECTORS’ REPORT

The directors present their report on the consolidated entity comprising Empired Limited (“the Company”) and its
controlled entities (“the Group”) for the year ended 30 June 2013.

The names of the Company's directors in office during the year and until the date of this report are as below.
Directors were in office for this entire period unless stated.

DIRECTOR

Name

Mel Ashton
Chairman

Age

Experience and special responsibilities

Mel is a Fellow of the Australian Institute of Company
Directors and a Fellow of the Institute of Chartered
Accountants in Australia and has over 30 years corporate
experience in a wide range of industries.

Other current directorships:

Gryphon Minerals Ltd
Renaissance Minerals Limited
Resource Development Group Limited
Venture Minerals Limited

DIRECTOR

Name

Age

Experience and special responsibilities

Russell Baskerville
Managing Director
& CEO

Mr Baskerville is an experienced business professional and has
worked in the IT industry for in excess of 15 years. He has
extensive knowledge in both the strategic growth and
development of technology businesses balanced by strong
commercial and corporate skills including strategy development
and execution, IPO's, capital raisings, divestments, mergers and
acquisitions.

Mr Baskerville has been the Managing Director of Empired for
seven years and has successfully listed the company on ASX and
made a number of successful acquisitions.

Mr Baskerville was previously a Non Executive of BigRedSky
Limited successfully developing and commercialising a SaaS
delivered eRecruitment tool prior to the company being acquired
by Thomson Reuters.

Previous directorships (last 3 years):

None.

DIRECTOR

Name

Richard Bevan
Non Executive Director

Age

Experience and special responsibilities

47 Mr. Bevan joined the board as a non-executive director on 31
January 2008 with corporate and senior management experience
including various directorship's and CEO/MD roles in ASX
listed and private companies. Richard brings experience in the
execution and integration of mergers, acquisitions and other
major corporate transactions.

Richard has been involved in a number of businesses in areas as
diverse as healthcare, construction and engineering, resources
and information services. Richard's roles within these businesses
have included strategic operational management, implementing
organic growth strategies, business integration and raising capital
in both public and private markets.

Other current directorships:

Cassini Resources Limited

Previous directorships (last 3 years):

Metals of Africa Limited

DIRECTOR

Name

Age

Experience and special responsibilities

John Bardwell
Non Executive Director

Mr Bardwell has had a long career in the financial services and
IT sectors through a variety of senior leadership positions.
Previous executive experience includes Head of IT Services at
Bankwest, Managed Services Director at Unisys West and more
recently as the General Manager of Delivery Services at
Empired Ltd prior to his appointment to the Board as a non
executive Director.

Through his own consulting practice, Mr Bardwell also
provides management consulting expertise to a broad range of
organisations in the financial services, IT and utilities sectors.

Mr Bardwell is also a Director of CommunityWest, a provider
of professional services to the aged healthcare sector across
Western Australia.

Mr Bardwell holds a Bachelor of Business and a Graduate
Diploma in Applied Finance and Investment. He is a Graduate
Member of the Australian Institute of Company Directors and
a Fellow of the Financial Services Institute of Australasia.

Previous directorships (last 3 years):

None

DIRECTORS’ REPORT

COMPANY SECRETARY

Name

Mark Waller
CFO & Company Secretary

Age

Experience and special responsibilities

34 Mr Waller has responsibility for ensuring the necessary
operational and financial processes and infrastructure are in place
to support the strategic direction and continued growth of
Empired. Mr Waller holds a degree in business from Curtin
University majoring in Accounting and Business Law and is a
Certified Practicing Accountant.

Mr Waller has worked in the Professional Services sector for
fifteen years and also brings experience from directorships with IT
companies involved in early stage development and
commercialisation to eventual sale to working for Ernst & Young.

Mr Waller was previously a Non Executive Director of BigRedSky
Limited successfully developing and commercialising a SaaS
delivered eRecruitment tool prior to the company being acquired
by Thomson Reuters.

Directors’ Meetings
The number of Directors meetings and the number of meetings attended by each Director during the year are:

Name of Director

Number of
meetings held
while a Director

Number of meetings attended
as a Director during the year
ended 30 June 2013

Russell Baskerville

Mel Ashton

Richard Bevan

John Bardwell

No of Audit or
Remuneration
Committee meetings
Attended during the
year ended 20 June
2013

Principal Activities

Dividends

The principal activity of the consolidated entity
during the year is the continued operation of its IT
services business resulting in the provision of services
covering software systems, consulting and
infrastructure design and deployment.

There were no significant changes in the nature of the
activities carried out during the year.

Significant changes in the state of affairs

On 31 August, 2012, Empired Limited acquired
100% of shares in Conducive Pty Ltd for $ 9,679,427

5,000,000 shares were issued during the year as part
of the purchase price to acquire Conducive Pty
Limited.

3,700,000 employee options were exercised during
the year.

Events subsequent to reporting date

There are no events to report subsequent to reporting
date.

Environmental Regulation

The consolidated entity's operations are not subject
to any significant environmental regulations under a
law of the Commonwealth or State or Territory in
Australia.

Financial Position

The net assets of the consolidated group have
increased by $3,926,953 from 30 June 2012 to
$15,178,951. This is largely due to the following
factors:

 The acquisition of Conducive Pty Ltd

 Proceeds from the exercise of options

Improved operating performance of the Group

During the past three financial years, the group has
invested in infrastructure to secure its long-term
success. In particular, strategic investments have been
made in growth by acquisition as well as expanding
investment in key business segments. The company's
holdings in associated companies and joint venture
entities have increased by $9,678,374 to $10,039,088.

The directors recommend that a final fully franked
dividend of 0.50 cents per share (2012: Nil),
amounting to $339,590, be recorded on 12
September, 2013 and paid to shareholders on 26
September 2013.

Operating Results for the Year

The net profit after tax from continuing operations
for the year for the consolidated entity is $ 1,549,840
(2012: $1,273,344). To refer to the operational results
within the chairman and CEO report.

Likely Developments

Except as detailed in the Chairman and Managing
Director's Review on pages 7 to 11, likely
developments, future prospects and business
strategies of the operations of the consolidated entity
and the expected results of those operations have not
been included in this report, as the directors believe,
on reasonable grounds, that the inclusion of such
information would be likely to result in unreasonable
prejudice to the consolidated entity.

Share Options and Performance Rights

Share Options and Performance Rights
Granted to Directors and Officers

Performance Rights were granted to the Managing
Director under the Long Term Incentive Plan
approved by shareholders at the AGM held on the
th29 of November 2012. Performance Rights were also
granted to Executive Officers under the Long Term
Incentive Plan. Information relating to this grant is at
note 13 to the financial statements.

Unissued Shares

At the date of this report, there were 3,050,000
unissued ordinary shares under options. Refer to
note 13 of the financial statements for more detail.
Option holders do not have any right, by virtue of the
option, to participate in any share issue of the
Company or any related body corporate or in the
interest issue of any other registered scheme.

DIRECTORS’ REPORT

Shares Issued as a result of the exercise of options

3,700,000 share options were exercised during the financial year, refer to note 18 for details.

Share issues during the year

5,000,000 shares were issued during the year as satisfaction of the purchase price of Conducive Pty Ltd, refer to
note 18 for details.

Auditor's Independence Declaration

The lead auditor's Independence Declaration for the year ended 30 June 2013 has been received and can be found
on page 79 of the financial report.

Non-Audit Services

There were no non-audit services provided by the entity's auditor, Grant Thornton Audit Pty Ltd (2012: nil).

The directors in accordance with the advice from the audit committee, is satisfied that no non-audit services were
provided during the year. The directors are satisfied of the external auditor's independence for the following
reasons:
 no non-audit services were provided during the year; and


in the event services were provided they would not compromise the general principles relating to auditor
independence in accordance with APES 110:Code of Ethics for Professional Accountants set by the
Accounting Professional and Ethical Standards Board.

Indemnities given and insurance premiums paid to auditors and officers

During the year, Empired Ltd paid a premium to insure officers of the Group. The officers of the Group covered by
the insurance policy include all directors.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be
brought against the officers in their capacity as officers of the Group, and any other payments arising from liabilities
incurred by the officers in connection with such proceedings, other than where such liabilities arise out of conduct
involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information
to gain advantage for themselves or someone else to cause detriment to the Group.

Details of the amount of the premium paid in respect of the insurance policies is not disclosed as such disclosure is
prohibited under the terms of the contract.

The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify any current or former officer or auditor of the Group against a liability incurred
as such by an officer or auditor.

Proceedings on behalf of the company

No person has applied for leave of court to bring proceedings on behalf of the company or intervene in any
proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company for all
or any part of those proceedings.

The company was not a party to any such proceedings during the year.

Remuneration Report (Audited)

This report outlines the remuneration arrangements
in place for directors and executives of Empired
Limited (the Company), prepared in accordance with
the Corporation Act 2001 and Corporations
Regulations 2001.

Remuneration Philosophy

The performance of the Company depends upon the
quality of its directors and executives. To prosper, the
Company must attract, motivate and retain highly
skilled directors and executives.

To this end, the Company embodies the following
principles in its remuneration framework:

 Provide competitive rewards to attract high

calibre executives;

 Link executive rewards to shareholder value;
 Have a portion of certain executive's
remuneration 'at risk', dependent upon
meeting pre-determined performance
benchmarks; and

 E s t a b l i s h a p p r o p r i a t e , d e m a n d i n g
performance hurdles for variable executive
remuneration.

Remuneration Committee

Due to the structure of the Board, a separate
remuneration committee is not considered to add
any efficiencies to the process of determining the
levels of remuneration for the Directors and key
executives. The Board considers that it is more
appropriate that it set aside time at Board meetings to
address matters that would normally fall to the
remuneration committee.

Remuneration Structure

In accordance with the best practice corporate
governance, the structure of non-executive directors
and executive remuneration is separate and distinct.

A. Non-executive director remuneration

Objective
The board seeks to set aggregate remuneration at a
level that provides the company with the ability to
attract and retain directors of the highest calibre,
whilst incurring a cost that is acceptable to
shareholders.

Structure
The constitution and the ASX Listing Rules specify
that the aggregate remuneration of non-executive
directors shall be determined from time by a general
meeting. An amount not exceeding the amount
determined is then divided between the directors as
when shareholders approved an aggregated
remuneration of $300,000 per year.

The amount of aggregated remuneration sought to be
approved by shareholders and the manner in which it
is apportioned amongst directors is reviewed from
time to time. The Board considers advice from
external consultants as well as the fees paid to non-
executive directors of comparable companies when
undertaking the annual review process.

The remuneration of non-executive directors (as
defined in AASB 124 Related Party Disclosures) for
the period ended 30 June 2013 is detailed in Table 1
of this report.

B. Executive remuneration

Objective
The company aims to reward executives with a level
and mix of remuneration commensurate with their
position and responsibilities within the company and
so as to:
 Reward executives for company, business unit and
individual performances against targets set by
reference to appropriate benchmarks;

 Align the interests of executives with those of

shareholders;

 Link rewards with the strategic goals and

performance of the Company; and

 Ensure total remuneration is competitive by

market standards.

Structure
In determining the level of remuneration paid to
senior executives of the company, the Board took into
a c c o u n t av a i l a b l e b e n ch m a rk s a n d p r i o r
performance.

Remuneration consists of the following key elements:
 Fixed Remuneration
 Variable Remuneration

- Short Term Incentive (STI); and
- Long Term Incentive (LTI).

The proportion of fixed remuneration and variable
remuneration (potential short term and long term
incentives) is established for each senior executive by

DIRECTORS’ REPORT

the Board. Table 1 below details the fixed and variable components (%) of the executives of the company.

Fixed Remuneration

Objective
Fixed remuneration is reviewed annually by the board. The process consists of a review of companywide,
business unit and individual performance, relevant comparative remuneration in the market and internally, and
where appropriate, external advice on policies and practices. As noted above, the Board has access to external
advice independent of management.

Structure
Senior executives are given the opportunity to receive their fixed (primary) remuneration in a variety of forms
including cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the
manner of payment chosen will be optimal for the recipient without creating undue cost for the group.

The fixed remuneration component of the company executives is detailed in Table 1.

Variable Remuneration - Short Term Incentive (STI)

Objective
The objective of the STI program is to link the achievement of the Group's operational targets with the
remuneration received by the executives charged with meeting those targets.

Structure
Actual STI payments granted to the company executives depend on the extent to which specific operating targets
set at the beginning of the financial year are met. The operational targets consist of a number of Key Performance
Indicators (KPIs) covering both financial and non-financial measures of performance. Typically included are
measures such as contribution to net profit after tax, customer service, risk management, and leadership/team
contribution.

Any STI payments are subject to the approval of the Board. Payments made are delivered as a cash bonus in the
following financial year. For the 2013 financial year 11% of the STI cash bonus has been paid to executives
(2012: 72%).

Variable Pay - Long Term Incentive (LTI)

Objective
The objective of the LTI plan is to reward senior executives in a manner that aligns this element of remuneration
with the creation of shareholder wealth.

As such, LTI grants are only made to executives who are able to influence the generation of shareholder wealth
and thus have a direct impact on the Group's performance against the relevant long term performance hurdle.

Structure
LTI grants to executives are delivered in the form of performance rights (2012: share options).

Table 2 below provides details of performance rights and options granted and the value of equity instruments
granted, exercised and lapsed during the year. The performance rights were issued free of charge. Each
performance right entitles the holder to subscribe for one fully paid ordinary share in the entity based on
achieving vesting conditions at a nil exercise price. For further details of the terms and conditions including the
service and performance criteria that must be met refer to note 13.

C. Service Agreements

Russell Baskerville - Managing Director & CEO
Terms of agreement - commenced 1 July 2005, until terminated by either party.
Salary - base $360,000 per annum with an additional STI cash bonus capped at $158,400 based
on achievement of targets set by the Board of directors and LTI bonus capped at $111,600.
Termination - three months written notice or three months remuneration in lieu.

Mel Ashton - Chairman
Terms of Agreement - appointed 21 December 2005, until terminated by either party.
Fee - fixed $75,000 per annum.

Richard Bevan - Non Executive Director
Terms of agreement - appointed 31 January 2005, until terminated by either party.
Fee - fixed $50,000 per annum.

John Bardwell - Non Executive Director
Terms of agreement - appointed 26 September 2011, until terminated by either party.
Fee - fixed $50,000 per annum.

Mark Waller - Company Secretary and Chief Financial Officer
Terms of Agreement - commenced 18 April 2005, until terminated by either party.
Salary - base $271,731 per annum with an additional STI cash bonus capped at $103,258 and LTI
bonus capped at $70,650
Termination - one month’s written notice or one month’s remuneration in lieu.

Rob McCready - Chief Operating Officer
Terms of Agreement - commenced 3 October 2011, until terminated by either party.
Salary - base $284,755 per annum with an additional STI cash bonus capped at $108,207 and LTI
bonus capped at $71,189.
Termination - one month’s written notice or one month’s remuneration in lieu.

DIRECTORS’ REPORT

Table 1: Directors’ and executives’ remuneration for the year ended 30 June 2013 & 30 June 2012

SHORT TERM
BENEFITS

POST
EMPLOYMENT

SALARY
& FEES

CASH
STI

SUPERANNUATION

LONGTERM
BENEFITS
(LTI)

EQUITY
OPTIONS

TOTAL

%
PERFORMANCE
RELATED

NON-EXECUTIVE DIRECTORS
M. Ashton
Chairman
R. Bevan
Non-Executive Director

2013
2012

75,000
75,000
45,872
45,872

J. Bardwell
Non-Executive Director
EXECUTIVE DIRECTORS
R. Baskerville
Chief Executive

KEY MANAGEMENT
M. Waller
Company Secretary &
Chief Financial Officer

2013
2012

50,000
131,393

2013
2012

360,000
360,000

2013
2012

269,045
219,625

R. McCready
Chief Operating Officer

2013
2012

260,753
182,433

-
-
-
-

-
-

-
60,000

20,000
69,800

20,000
90,000

-
-
4,128
4,128

-
-

24,455
19,766

23,468
16,419

-
-
-
-

-
-

75,000
75,000
50,000
50,000

50,000
131,393

37,612
-

397,612
420,000

28,406
-

28,406
48,000

341,906
309,191

332,627
336,852

-
-
-
-

-
-

9.46%
14.29%

14.16%
22.57%

14.55%
26.72%

Table 2: Options and Performance Rights granted as part of remuneration

GRANT
DATE

GRANT
NUMBER

AVERAGE VALUE
PER OPTION AT
GRANT DATE

VALUE OF
OPTIONS
GRANTED
DURING THE
YEAR

TOTAL VALUE OF
OPTIONS
GRANTED
DURING THE
YEAR

%
REMUNERATION
CONSISTING OF
OPTIONS FOR
THE YEAR

29/11/2012

10/04/2013
10/04/2013

2013
NON-EXECUTIVE DIRECTORS
M. Ashton
R. Bevan
J. Bardwell
EXECUTIVE DIRECTORS
R. Baskerville

KEY MANAGEMENT
M. Waller
R. McCready
2012
NON-EXECUTIVE DIRECTORS
M. Ashton
R. Bevan
J. Bardwell
EXECUTIVE DIRECTORS
R. Baskerville
KEY MANAGEMENT
M. Waller
R. McCready

-
-
-

-
21/02/2012

-
-
-

600,000

$0.40

37,612

9.46%

375,000
375,000

$0.505
$0.505

28,406
28,406

8.82%
9.09%

-
-
-

-
750,000

-
-
-

-
$0.064

-
-
-

-
48,000

-
14.25%

Directors' and Key Management Personnel Equity Holdings

The following table sets out each Directors (including their related parties) interest in shares and options of the
company as at the end of the financial year:
ORDINARY
SHARES

Ordinary
Shares

Options

Performance
Rights

DIRECTOR

Russell Baskerville

9,097,233

2,550,000

600,000

Mel Ashton

Richard Bevan

John Bardwell

KEY MANAGEMENT

Mark Waller

Rob McCready

4,099,904

500,000

1,343,070

200,000

1,150,000

750,000

375,000

Voting and comments made at the company's 2012 Annual General Meeting

Empired Limited received 100% of “yes” votes on its remuneration report for the 2012 financial year. The
company did not receive any specific feedback at the AGM on its remuneration report.

Signed in accordance with a resolution of directors.

Russell Baskerville
Managing Director
29th August 2013

Rob McCready
Chief Operating Officer

CORPORATE GOVERNANCE
STATEMENT

This statement outlines the main corporate
governance practices in place throughout the
financial year, which comply with the ASX Corporate
Governance Council's “Principals of Good
Cor porate Governance and Best Practice
Recommendations”, unless otherwise stated. The
C o m p a n y h a s f o l l o w e d e a c h o f t h e
Recommendations where the Board has considered
the practices appropriate, taking into account factors
such as size of the Company and Board, the resources
available, and the activities of the Company. The
corporate governance practices are reviewed regularly
and will continue to be developed and refined to
meet the needs of the Company and appropriate
practices.

The Company includes information about its
corporate governance practices on the Company's
website at www.empired.com including the Board
charter, the group's code of conduct and other
policies and procedures relating to the Board and its
responsibilities.

PRINCIPLE 1 – Lay solid foundations for
management and oversight.

Recommendation 1.1 - Companies should establish
the functions reserved to the Board and those
delegated to senior executives and disclose those
functions.

The Board has the responsibility for charting the
direction, strategies and financial objectives for the
Company and monitoring the compliance with
regulatory requirements and ethical standards of
those policies. In performing their responsibilities
the Board are guided by the objective of protecting
the rights and interest of shareholders.

The roles and responsibilities of the Board are set out
in the Board charter and this is available on the
Company website. The Board regularly reviews the
charter to ensure that it is appropriate to meet the
needs of the Company and the Board and to comply
with developing best practice standards.

Recommendation 1.2 – Companies should disclose
the process for evaluating the performance of senior
executives.

During the reporting year, executives including
executive directors were evaluated against Board
approved budgets and key performance indicators

which were approved by the Board as part of the
annual planning process.

PRINCIPLE 2 – Structure of the Board to add
value.

Recommendation 2.1 – A majority of the Board
should be independent directors.

The Board comprises of four directors who are
appointed to ensure that the Company is run in the
interest of the shareholders. Of those four directors,
two are independent. Russell Baskerville is an
executive director and is not classified as
independent. John Bardwell previously worked in
the executive management team of the Company and
has a substantial shareholding in the Company and is
not classified as independent. The Company has not
complied with this recommendation during the 2013
financial year. The names, skills, experience and
expertise of the directors of the Company in office at
the date of this report are located in the Directors'
report on pages12 to13.

In considering whether a Director is independent the
Board considers:



the criteria for assessing the independence of
a Director in the ASX Corporate Governance
Council's “Principles of Good Corporate
G o v e r n a n c e a n d B e s t P r o a c t i v e
recommendations”;
any information, facts or circumstances that
the Board considers relevant; and
any materiality thresholds, standards or
guidelines that the Board may adopt from
time to time.

Recommendation 2.2 – The chair should be an
independent director.

During 2013 the chairman of the Board of Directors
was Mr Mel Ashton. Mr Ashton meets the
independence criteria.

Recommendation 2.3 – The roles of chair and chief
executive officer should not be exercised by the
same individual.

The role of chairperson of the Board and the
Managing Director (CEO role) are not exercised by
the same person. Mr Baskerville is Managing
Director and Mr Ashton is Chairman of the Board.

CORPORATE GOVERNANCE
STATEMENT

Recommendation 2.4 – The Board should establish
a nomination committee.

interests. The code of conduct adopted is available on
the Company's website www.empired.com.

Recommendation 3.2 – Companies should
establish a policy concerning diversity and disclose
the policy or a summary of that policy. The policy
should include requirements for the board to
establish measurable objectives for achieving gender
diversity and for the board to assess annually both
the objectives and progress in achieving them.

The Company has a policy in place to:



ensure all employees are treated fairly and
with respect;
attract, develop and retain the right
employees;

 build an environment where all employees
can be successful without bias by race,
gender, religion, age, culture or lifestyle
choices;
ensure all employees are treated and
evaluated according to their ability,
qualifications and aptitude.



The Company's policy is reviewed, measured and
reported to the Board annually.

As at June 30, 2013 13% of the Company's workforce
was female. There are no females on the Board of
Empired and 18% of the Senior Management team
are female. The Board are committed to driving
diversity through the Company's workforce. The
Board's goal is to increase these figures annually
taking into account the adopted policy summarised
above.

PRINCIPLE 4 – Safeguard integrity of financial
reporting.

Recommendation 4.1 – The Board should establish
an audit committee.

The Board has an established Audit Committee.
The role of the Audit Committee is to ensure
independent oversight of the accounting functions
and internal controls of Empired and ensure the
objectivity of Empired's financial statements.

Currently no formal committee to the Board has
been established. The Board considers that given its
size and that only one member of the Board holds an
executive position in the Company, no efficiencies or
other benefits would be gained by establishing
separate committees.

The Board intends to reconsider the requirement for
and benefits of a separate committee as the
Company's operations grow and evolve.

Recommendation 2.5 – Companies should disclose
the process for evaluating the performance of the
Board, its committees and individual directors.

There is currently no formal process in place to
evaluate the performance of the Board, its
committees and individual directors. A review of
the performance of the Board and its directors is
undertaken by each director with respect to each
other and the performance of the Board itself.

The Board will reconsider the requirement for
appropriate measures of performance as the
company's operations grow and evolve.

PRINCIPLE 3 – Promote ethical and responsible
decision making.

Recommendation 3.1 – Companies should
establish a code of conduct and disclose the code or
a summary of the code as to:



the practices necessar y to maintain
confidence in the company's integrity,
the practices necessary to take into account
their legal obligations and the reasonable
expectations of stakeholders, and
the responsibility and accountability of
individuals for reporting and investigation
reports of unethical practices.

All directors, managers and employees are expected
to act with integrity and objectivity in their dealings
with people that they come in contact with during
their association with Empired Ltd. Such conduct is
considered integral to the primary objective of
working to enhance the Company's reputation and
shareholder value. The Company’s human resources
policies ensure that company assets are used
appropriately for business purposes, confidential
information is maintained as confidential and
parties act so as to no conflict with the Company's

Recommendation 4.2 – The audit committee
should be structured so that it:




consists only of non executive directors,
consists of a majority of independent
directors,
is chaired by an independent chair, who is
not chair of the Board, and
 has at least three members.



The Audit Committee consists of the full Board of
directors including Russell Baskerville who is an
executive director. The Chair of the Audit
Committee is also the Chair of the Board. The
Committee consists of four members. The Company
has no complied with this recommendation.

Recommendation 4.3 – The audit committee
should have a formal charter.

An audit committee charter has been established
setting out the role and responsibilities, composition
structure, membership requirements and the
manner in which the committee is to operate. This
charter is available on the Company website.

PRINCIPLE 5 – Make timely and balanced
disclosure.

Recommendation 5.1 – Companies should
establish written policies and procedures designed
to ensure compliance with ASX listing rule
d i s c l o s u r e r e q u i r e m e n t s a n d t o e n s u r e
accountability at senior management level for that
compliance and disclose of those policies or a
summary of those policies.

The responsibility for the overall communication has
been appointed to the Managing Director and
Company Secretary.

Empired Ltd is committed to:



ensuring that shareholders and the market
are provided with timely and balanced
information about its activities;
complying with the general and continuous
disclosure principals contained in ASX
Listing Rules and the Corporations Act 2001;
and
ensuring that all market participants have
equal opportunities to receive externally
available information issued by Empired.
The company's continuous disclosure policy is
available on the Company website.



PRINCIPLE 6 – Respect the rights of shareholders.

Recommendation 6.1 – Companies should design
and disclose a communications strategy to promote
effective communication with shareholders and
encourage effective participation at general
meetings and disclose their policy or a summary of
that policy.

The Board strongly believes in the importance of
effective communication with shareholders to ensure
their access to timely and relevant information.

The Company's website is regularly updated and
provides details of recent announcements to the
ASX, annual reports, and other significant
information on the Company. Procedures are in
place to review all information and to ensure all
relevant information is immediately released to the
market.

Shareholders are encouraged to attend the annual
general meeting, providing them with an opportunity
to question the Board and senior executives.

Empired has in place a written communications with
shareholders policy which is available on the
company website.

PRINCIPLE 7 – Recognise and manage risk.

Recommendation 7.1 – Companies should
establish policies for the oversight and management
of material business risks and disclose a summary of
those policies.

The Board acknowledges that it is responsible for the
overall internal control framework, but recognises
there is no effective internal control system that will
prevent all errors and irregularities.

The Company's risk management program is
available on the Company's website.

The effectiveness of the risk management program is
reviewed annually and updated accordingly.

Recommendation 7.2 – The Board should require management to design and implement the risk
management and internal control system to manage the Company's material business risks and report to it
on whether those risks are being managed to the effectiveness of the Company's management of its
material business risks.

A risk may be initiated by any employee to a member of the Empired management team. Senior management
are responsible for reviewing risks that have been escalated to them from an operational level. These risks are
reviewed monthly by the Board.

The Board also reviews recommendations made by the external auditors, and where appropriate ensures that
the Company puts in place controls and systems to manage these risks identified.

Recommendation 7.3 – The Board should disclose whether it has received assurance from the Chief
Executive Officer (or equivalent) and the Chief Financial Officer (or equivalent) that the declaration
provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk
management, and internal control and that the system is operating effectively in all material respects in
relation to financial reporting risks.

This recommendation was complied with for 2013.

PRINCIPLE 8 – Remunerate fairly and responsibly.

Recommendation 8.1 – The Board should establish a remuneration committee.

Due to the structure of the Board, a separate remuneration committee is not considered to add any efficiency
to the process of determining the levels of remuneration of the Directors and key executives. The Board
considers that is more appropriate that it set aside time at Board meetings to address such matter that would
normally fall to the remuneration committee.

Recommendation 8.2 – The remuneration committee should be structured such that it:

consists of a majority independent directors
is chaired by an independent chair



 has at least three members

Recommendation 8.3 – Companies should clearly distinguish the structure of non-executive directors'
remuneration from that of executive directors and senior executives.

Detailed information regarding the remuneration paid to directors and senior executives is set out in the
remuneration report.

Greg Leach
Chief Technology Officer

FINANCIAL STATEMENTS

CONSOLIDATED STATEMENT OF PROFIT OR
LOSS AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 30 JUNE 2013

NOTES

2012
$

NOTE

2013
$

2011
$

2012
$

Revenue
Cost of sale

Gross profit

Other income

Legal Expenses
Marketing expenses
Occupancy expenses
Finance costs
Employee benefits
Depreciation expenses
Other expenses
Profit before income tax

Income tax expense

Profit for the year

Other comprehensive income

Other comprehensive income for the period, net of
income tax

46,498,244
(33,565,921)

44,661,238
(33,215,998)

12,932,323

11,445,240

54,089

46,620

(98,241)
(73,370)
(1,076,390)
(473,289)
(6,315,657)
(1,203,607)
(1,767,097)
1,978,761

(28,375)
(57,706)
(1,160,772)
(257,229)
(5,785,185)
(633,292)
(1,851,577)
1,717,724

(428,921)

(444,380)

1,549,840

1,273,344

Total comprehensive income for the period

1,549,840

1,273,344

EARNINGS PER SHARE

2013

2012

Basic earnings per share

Diluted earnings per share

2.3640

2.2069

2.5876

2.2019

This Statement of Profit or Loss and other Comprehensive Income should be read in conjunction with the
accompanying notes.

CONSOLIDATED STATEMENT OF
FINANCIAL POSITION

AS AT 30 JUNE 2013

ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Work in progress
Other current assets
Total Current Assets

Non-Current Assets
Property, plant and equipment
Intangible assets
Deferred tax asset
Total non-current assets

TOTAL ASSETS

LIABILITIES
Current Liabilities
Trade and other payables
Borrowings
Provisions
Total Current Liabilities

Non-Current Liabilities
Borrowings
Provisions
Deferred tax liability
Total Non-Current Liabilities

TOTAL LIABILITIES

NET ASSETS

EQUITY
Issued capital
Reserves
Retained profits
TOTAL EQUITY

NOTE

2013
$

2012
$

7
8
9
10

11
12
5

14
15
16

15
16
5

18
17

2,085,913
5,841,882
1,601,992
1,199,811
10,729,598

7,999,000
11,661,706
865,400
20,526,106

1,393,716
9,765,075
1,419,211
270,675
12,848,677

4,088,348
4,170,958
470,968
8,730,274

31,255,704

21,578,951

7,182,271
1,874,360
1,214,823
10,271,454

4,010,807
172,374
1,622,118
5,805,299

7,596,850
511,416
1,054,363
9,162,629

554,095
95,346
514,928
1,164,369

16,076,753

10,326,998

15,178,951

11,251,953

8,779,678
461,126
5,938,147
15,178,951

6,456,310
407,336
4,388,307
11,251,953

This Statement of Financial Position should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF
CASH FLOWS

FOR THE YEAR ENDED 30 JUNE 2013

2011
2012
NOTES
$
$

Cash flows from operating activities
Receipts from Customers
Payments to suppliers and employees
Borrowing costs
Income tax paid
interest received
Net cash flows from /(used in) operating activites

Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of other assets
Net cash flows (used in) investing activities

Cash flows from financing activities
Proceeds from issue of shares
Repayment of borrowings
Repayment of finance lease liabilities
Proceeds from borrowings
Cash flows from financing activities

Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of period
Cash and equivalents at end of period

NOTE

2013
$

2012
$

50,144,238
(43,308,824)
(383,126)
(919,919)
54,762
5,587,131

40,845,904
(41,677,654)
(206,821)
(57,275)
44,470
(1,051,376)

(4,985,338)
(3,361,823)
(8,347,161)

(3,033,101)
(253,298)
(3,286,399)

1,073,368
(1,127,824)
(762,875)
4,269,558
3,452,227

692,197
1,393,716
2,085,913

3,606,994
(164,866)
(287,949)
1,191,782
4,345,961

8,186
1,385,530
1,393,716

This Statement of Cash Flows should be read in conjunction with the accompanying notes.

CONSOLIDATED STATEMENT OF
CHANGES IN EQUIT Y

FOR THE YEAR ENDED 30 JUNE 2013

Issued
capital
$

Retained
Earnings
$

Employee
Equity
Benefits
Reserve
$

Total
Equity
$

Balance at 30 June 2011

2,849,315

3,114,963

356,527

6,320,805

Total comprehensive income for the period

1,273,344

Exercise of options

Cost of share-based payments

Shares Issued during the year

Transaction Cost

152,887

3,600,000

(145,892)

1,273,344

152,887

50,809

3,600,000

(145,892)

Balance at 30 June 2012

6,456,310

4,388,307

407,336

11,251,953

Total comprehensive income for the period

1,549,840

Exercise of options

Cost of share-based payments

1,080,000

Shares issued during the year

1,250,000

Transaction cost

(6,632)

1,549,840

1,080,000

53,790

1,250,000

(6,632)

Balance at 30 June 2013

8,779,678

5,938,147

461,126

15,178,951

This Statement of Changes in Equity should be read in conjunction with accompanying notes.

Greg Leach
Chief Technology Officer

Mark Waller
Chief Financial Officer

NOTES TO THE FINANCIAL
STATEMENTS

( FO R T H E Y E A R E N D E D 3 0 J U N E 2 013 )

1. CORPORATE INFORMATION

2. SUMMARY OF SIGNIFICANT ACCOUNTING

The financial report of Empired Ltd for the year
ended 30 June 2013 was authorised for issue in
accordance with a resolution of the directors on 28
August 2013.

Empired Limited is a company limited by shares
incorporated in Australia. The financial report
includes the consolidated financial statements and
notes of Empired Limited and controlled entities.

POLICIES

(a) Basis of Preparation
The financial report is a general purpose financial
report, which has been prepared in accordance with
the requirements of the Corporations Act 2001,
Australian Accounting Standards, Australian
Accounting Interpretations and other authoritative
pronouncements of the Australian Accounting
Standards Board. The financial report has been
prepared on an accruals basis, and is based on
historical costs modified where applicable, by
measurement at fair value of selected non-current
assets, financial assets and financial liabilities.

The financial report is presented in Australian
dollars.

(b) Statement of compliance

The financial report complies with Australian
Accounting Standards, which include Australian
equivalents to International Financial Reporting
Standard ('AIFRS'). The financial report also
complies with International Financial Standards
('IFRS').

A u s t r a l i a n A c c o u n t i n g S t a n d a r d s a n d
Interpretations that have recently been issued or
amended but are not yet effective have not been
adopted by the Group for the annual reporting
period ended 30 June 2013. These are outlined in the
table below.

New Accounting Standards for Application in
Future Periods

The AASB has issued a number of new and amended
Accounting Standards and Interpretations that have
mandatory application dates for future reporting
period, some of which are relevant to the Group. The
Group has decided not to early adopt any of the new
and amended pronouncements. The Group's
a s s e s s m e n t o f t h e n e w a n d a m e n d e d
pronouncements that are relevant to the Group but
applicable in future reporting periods is set out
below:

 AASB 9: Financial Instruments (December 2010)
and AASB 2010-7: Amendments to Australia
Accounting Standards arising from AASB 9
(December 2010).

2. SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

(b) Statement of compliance (continued)

This standard is mandatorily applicable for annual
reporting periods commencing on or after 1 January
2013. However, AASB 2012-6 defers the application
date of AASB 9 from 1 January 2013 to 1 January
2015. AASB 9 introduces new requirements for the
classification and measurement of financial assets
and liabilities.

 AASB 10: Consolidated Financial Statements,
AASB 11: Joint Arrangements, AASB 12:
Disclosure of Interests in Other Entities, AASB
127: Separate Financial Statements (August 2011)
and AASB 128: Investments in Associates and
Joint Ventures (August 2011) (as amended by
AASB 2012-10: Amendments to Australian
Accounting Standards – Transition Guidance
and Other Amendments), and AASB 2011-7:
Amendments to Australian Accounting
Standards.

AASB 10 provides a revised definition of “control”
and additional application guidance so that a single
control model will apply to all investees. When
adopted, this Standard is not expected to
significantly impact the Group's financial statements.

AASB 11 requires joint arrangements to be classified
as either “joint operations” (where the parties that
have joint control of the arrangement have rights to
the assets and obligations for the liabilities) or “joint
ventures” (where the parties that have joint control of
the arrangement have rights to the net assets of the
arrangement). When adopted, this Standard is not
expected to significantly impact the Group's financial
statements.

AASB 12 contains the disclosure requirements
applicable to entities that hold an interest in a
subsidiary, joint venture, joint operation or associate.
AASB 12 also introduces the concept of a “structured
entity”, replacing the “special purpose entity: concept
currently used in Interpretation 112, and requires
specific disclosures in respect of any investments in
unconsolidated structured entities. When adopted,
this Standard will affect disclosures only and
therefore is not expected to significantly impact the
Group’s financial statements.

 AASB 13: Fair Value Measurement and AASB
2011-8: Amendments to Australian Accounting
Standards arising from AASB 2013 (applicable for
annual reporting periods commencing on or after
1 January 2013).

AASB 13 establishes a single source of guidance for
determining the fair value of assets and liabilities.
AASB 13 does not change when an entity is required
to use fair value, but rather, provides guidance on
how to determine fair value when fair value is
required or permitted by other Standards.

These Standards are expected to result in more
detailed fair value disclosures, but are not expected to
significant impact the amounts recognised in these
financial statements.

 AASB 2011-4: Amendments to Australian
Accounting Standards to Remove Individual Key
Management Personnel Disclosure Requirements
(applicable for annual reporting periods
beginning on or after 1 January 2013).

This Standard makes amendments to AASB 124
Related Party Disclosures to remove the individual
key management personnel (KMP) disclosure
requirements by Australia specific paragraphs.

When adopted, these amendments are unlikely to
have any significant impact on the financial
statements.

 AASB 119: Employee Benefits (September 2011)
and AASB 2011-10: Amendments to Australian
Accounting Standards arising from AASB 119
(September 2011) (applicable for annual
reporting periods beginning on or after 1 January
2013).

This Standard introduces a number of changes to
presentation and disclosure of a defined benefit plan.
AASB 119 also includes changes to the criteria for
determining when termination benefits should be
recognised as obligation.

The entity does not have any defined benefit plans.
Therefore, these amendments will have no
significant impact on the entity.

 AASB 2012-2: Amendments to Australian
Accounting Standards – Disclosures – Offsetting
Financial Assets and Financial Liabilities
(application for annual reporting periods
commencing on or after 1 January 2014).

NOTES TO THE FINANCIAL
STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(b) Statement of Compliance (continued)

This Standard amends the required disclosures in AASB 7 to include information that will enable users of an
entity's financial statements to evaluate the effect or potential effect of netting arrangments, including rights of set-
off associated with the entity's recognised financial assets and recognised financial liabilities, on the entity's
statement of financial position.

When adopted, there will be no impact on the entity as the entity does not have any netting arrangements in place.

 AASB 2012-5: Amendments to Australian Accounting Standards arising from Annual Improvements 2009-

2011 (applicable for annual reporting periods beginning on or after 1 January 2013).

These amendments are a consequence of the annual improvement process, which provides a vehicle for making
non-urgent but necessary amendments to Standards.

When these amendments are first adopted, this Standard is not expected to significantly impact the Group's
financial statements.

The consolidated financial statements comprise the financial statements of Empired Limited and its subsidiaries as
at 30 June each year ('the Group').

The financial statements of subsidiaries are prepared for the same reporting period as the parent company, using
consistent accounting policies.

Adjustments are made to bring into line any dissimilar accounting policies that may exist.

All intercompany balances and transactions, including unrealised profits arising from intra-group transactions,
have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.

Subsidiaries are consolidated from the date on which control is transferred to the group and cease to be
consolidated from the date on which control is transferred out of the Group.

Where there is loss of control of a subsidiary, the consolidated financial statements include the results for the part
of the reporting period during which Empired Limited has control.

Business Combinations

Business combinations occur where control over another business is obtained and results in the consolidation of
its assets and liabilities. All business combinations, including those involving entities under common control, are
accounted for by applying the purchase method.

The purchase method requires an acquirer of the business to be identified and the cost of the acquisition and fair
values of identifiable assets, liabilities and contingent liabilities to be determined at acquisition date, being the date
that control is obtained. Cost is determined as the aggregate of fair values of assets given, equity issued and
liabilities assumed in exchange for control together with costs directly attributable to the business combination.

Goodwill is recognised initially at the excess of cost over the acquirer's interest in the net fair value of the
identifiable assets, liabilities and contingent liabilities recognised. If the fair value of the acquirer's interests is
greater than cost, the surplus is immediately recognised in profit or loss.

2. SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

(d) Property, plant and equipment

Plant and equipment is stated at cost less
accumulated depreciation and any impairment in
value.

Depreciation is calculated on a diminishing value,
except computer software which is on a straight-line
basis, over the estimated useful life of the asset as
follows:

Buildings & Improvements DV

7.5 - 20 yrs

Leasehold Improvements

Furniture & Fittings

Computer Hardware

Computer Software

5 - 20 yrs

3 - 20 yrs

3 - 5 yrs

1 - 5 yrs

proceeds and the carrying amount of the item) is
included in the income statement in the period the
item is derecognised.

(e) Borrowing costs

Borrowing costs are recognised as an expense when
incurred except where incurred in relation to
qualifying assets where borrowing costs are
capitalised.

(f) Goodwill

Goodwill on acquisition is initially measured at cost
being the excess of the cost of the business
combination over the acquirer's interest in the net
fair value of the identifiable assets, liabilities and
contingent liabilities.

Following initial recognition, goodwill is measured at
cost less any accumulated impairment losses.

Impairment

Goodwill is not amortised.

The carrying values of plant and equipment are
reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be
recoverable.

For an asset that does not generate largely
independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the
asset belongs.

If any such indication exists and where the carrying
values exceed the estimated recoverable amount, the
assets or cash-generating units are written down to
their recoverable amount.

The recoverable amount of plant and equipment is
the greater of fair value less costs to sell and value in
use. In assessing value in use, the estimated future
cash flows are discounted to their present value
usinga pre-tax discount rate that reflects current
market assessments of the time value of money and
the risks specific to the asset.

Goodwill is reviewed for impairment, annually or
more frequently if events or changes in circumstances
indicate that the carrying value may be impaired.

As at the acquisition date, any goodwill acquired is
allocated to each of the cash-generating units
expected to benefit from the combination's synergies.

Impairment is determined by assessing the
recoverable amount of the cash-generating unit to
which the goodwill relates.

Where the recoverable amount of the cash-
generating unit is less than the carrying amount, an
impairment loss is recognised.

Where goodwill forms part of a cash-generating unit
and part of the operation within that unit is disposed
of, the goodwill associated with the operation
disposed of is included in the carrying amount of the
operation when determining the gain or loss on
disposal of the operation.

An item of property, plant and equipment is
derecognised upon disposal or when no future
economic benefits are expected to arise from the
continued used of the asset.

Goodwill disposed of in this circumstance is
measured on the basis of the relative values of the
operation disposed of and the portion of the cash-
generating unit retained.

Any gain or loss arising on de-recognition of the asset
(calculated as the difference between the net disposal

NOTES TO THE FINANCIAL
STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

on development along with appropriate portion of
relevant overheads

(g) Intangible Assets

Acquired both separately and from a business
combination.

Intangible assets acquired separately are capitalised at
cost. Following initial recognition, the cost model is
applied to the class of intangible assets.

Where amortisation is charged on assets with finite
lives, this expense is taken to the statement of
comprehensive income through the 'amortisation
expenses' line item.

Intangible assets, excluding development costs,
created within the business are not capitalised and
expenditure is charged against profits in the period in
which the expenditure is incurred.

Intangible assets are tested for impairment where an
indicator of impairment exists and in the case of
indefinite lived intangibles annually, either
individually or at the cash generating unit level.
Useful lives are also examined on an annual basis and
adjustments, where applicable, are made on a
prospective basis.

Research and Development Costs

Research costs are expensed as incurred.

Development expenditure incurred on an individual
project is carried for ward when its future
recoverability can be reasonably assured.

Following the initial recognition of the development
expenditure, the cost model is applied requiring the
asset to be carried at cost less any accumulated
amortisation and accumulated impairment losses.

Software

Costs incurred in developing software are capitalised
where future financial benefits can be reasonably be
assured. These costs include employee costs incurred

Amortisation is calculated on a straight-line basis
depending on the useful life of the asset.

Gains or losses arising from derecognition of an
intangible asset are measured as the difference
between the net disposal proceeds and the carrying
amount of the asset and are recognised on the
statement of comprehensive income when the asset is
derecognised.

(h) Impairment of non-financial assets

At each reporting date, the Group assesses whether
there is any indication that an asset may be impaired.
Where an indicator of impairment exists, the Group
makes a formal estimate of recoverable amount.
Where the carrying amount of an asset exceeds its
recoverable amount the asset is considered impaired
and is written down to its recoverable amount.

Recoverable amount is the greater of fair value less
costs to sell and value in use. It is determined for an
individual asset, unless the asset's value in use cannot
be estimated to be close to its fair value less costs to
sell and it does not generate cash inflows that are
largely independent of those from other assets or
groups of assets, in which case, the recoverable
amount is determined for the cash-generating unit to
which the asset belongs.

In assessing value in use, the estimated future cash
flows are discounted to their present value using a pre
tax discount rate that reflects current market
assessments of the time value of money and the risks
specific to the asset.

(i) Operating Segments

The Group adopted AASB 8 'Operating Segments'
with effect from 1 July 2009.

The Group has more than one reportable operating
segment identified by and used by the Chief
Executive Officer (chief operating decision maker) in
assessing the performance and determining the
allocation of resources. The Group however has
aggregated the segments in accordance with the
aggregation criteria of AASB 8. During the year the
Group had reliance on one customer whose revenues
represent 15.5% of the revenue of the Group.

2. SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

(j) Financial Instruments

Reconciliation and initial measurement

Financial assets and financial liabilities are
recognised when the entity becomes a party to the
contractual provisions to the instrument. For
financial assets, this is equivalent to the date that the
company commits itself to either the purchase or sale
of the asset (ie trading date accounting is adopted).

Financial instruments are initially measure at fair
value plus transaction costs, except where the
instrument is classified 'at fair value through profit or
loss', in which case transaction costs are expensed to
profit or loss immediately.

Classification and subsequent measurement

Financial instruments are subsequently measured at
either of fair value, amortised cost using the effective
interest rate method, or cost. Fair value represents
the amount for which an asset could be exchanged or
a liability settled, between knowledgeable, willing
parties. Where available, quoted prices in an active
market are used to determine fair value. In other
circumstances, valuation techniques are adopted.

Amortised cost is calculated as:
(a) the amount at which the financial asset or
financial liability is measured at initial
recognition;

(b) less principal repayments;
(c) plus or minus the cumulative amortisation of the
difference, if any, between the amount initially
recognised and the maturity amount calculated
using the effective interest method; and

(d) less any reduction for impairment.

The effective interest method is used to allocate
interest income or interest expense over the relevant
period and is equivalent to the rate that exactly
discounts estimated future cash payments or receipts
(including fees, transaction costs and other
premiums or discounts) through the expected life (or
when this cannot be reliably predicted, the
contractual term) of the financial instrument to the
net carrying amount of the financial asset or financial
liability. Revisions to expected future net cash flows
will necessitate an adjustment to the carrying value
with a consequential recognition of an income or
expense in profit or loss.

The Group does not designate any interests in
subsidiaries, associates or joint venture entities as
being subject to the requirements of accounting
standards specifically applicable to financial
instruments.

(i) Financial assets at fair value through profit or
loss

Financial assets are classified at 'fair value through
profit or loss' when they are either held for trading for
the purpose of short-term profit taking, derivatives
not held for hedging purposes, or when they are
designated as such to avoid an accounting mismatch
or to enable performance evaluation where a group of
financial assets is managed by key management
personnel on a fair value basis in accordance with a
documented risk management or investment
strategy. Such assets are subsequently measured at
fair value with changes in carrying value being
included in profit or loss.

(ii) Loans and receivables

Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are
not quoted in an active market and are subsequently
measured at amortised cost,
Loans and receivables are included in current assets,
except for those which are not expected to mature
within 12 months after the end of the reporting
period. (All other loans and receivables are classified
as non-current assets.)

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative
financial assets that have fixed maturities and fixed or
determinable payments, and it is the Group's
intention to hold these investments to maturity.
They are subsequently measured at amortised cost.
Held-to-maturity investments are included in non-
current assets, except for those which are expected to
mature within 12 months after the end of the
reporting period. (All other investments are
classified as current assets.)

If during the period the Group sold or reclassified
more than an insignificant amount of the held-to-
maturity investments before maturity, the entire held-
to-maturity investments category would be tainted
and reclassified as available-for-sale.

NOTES TO THE FINANCIAL
STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING

three months or less.

POLICIES (continued)

(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative
financial assets that are either not suitable to be
classified into other categories of financial assets due
to their nature, or they are designated as such by
management. They comprise investments in the
equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
Available-for-sale financial assets are included in non-
current assets, except those which are expected to
mature within 12 months after the end of the
reporting period. (All other financial assets are
classified as current assets.)

(v) Financial liabilities

Non-derivative financial liabilities (excluding
financial guarantees) are subsequently measured at
amortised cost.

For the purposes of the statement of cash flows, cash
and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding
bank overdrafts.

(m) Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at
cost, being the fair value of the consideration received
net of issue costs associated with the borrowing.

After initial recognition, interest-bearing loans and
borrowings are subsequently measured at amortised
cost using the effective interest method. Amortised
cost is calculated by taking into account any issue
costs, and any discount or premium on settlement.

Gains and losses are recognised in the statement of
comprehensive income when the liabilities are
derecognised and as well as through the amortisation
process.

Impairment

(n) Provisions

Provisions are recognised when the Group has a
present obligation (legal or constructive) as a result of
a past event, it is probable that an outflow of
resources embodying economic benefits will be
required to settle the obligation and a reliable
estimate can be made of the amount of the
obligation.

Where the Group expects some or all of a provision
to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a
separate asset but only when the reimbursement is
virtually certain. The expense relating to any
provision is presented in the income statement net of
any reimbursement.

If the effect of the time value of money is material,
provisions are determined by discounting the
expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value
of money and, where appropriate, the risks specific to
the liability. Where discounting is used, the increase
in the provision due to the passage of time is
recognised as a finance cost.

At the end of each reporting period, the Group
assesses whether there is objective evidence that a
financial instrument has been impaired. In the case
of available-for-sale financial instruments, a
significant or prolonged decline in the value of the
instrument is considered to determine whether an
impairment has arisen. Impairment losses are
recognised in the statement of comprehensive
income

(k) Trade and other receivables

Trade receivables, which generally have 30-45 day
terms, are recognised and carried at original invoice
amount less an allowance for any uncollectible
amounts.

An impairment provision is recognised when there is
objective evidence that the Group will not be able to
collect the receivable. Bad debts are written off when
identified.

(l) Cash and cash equivalents

Cash and short-term deposits in the statement of
financial position comprise cash at bank and in hand
and short-term deposits with an original maturity of

2. SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (continued)

(o) Employee benefits

(i) Wages, salaries, annual leave and sick leave

Liabilities for wages and salaries, including non-
monetary benefits, and annual leave expected to be
settled within 12 months of the reporting date are
recognised in other payables in respect of employee's
services up to reporting date. They are measured at
the amounts expected to be paid when the liabilities
are settled. Liabilities for sick leave are recognised
when the leave is taken and are measured at the rates
paid or payable.

(ii) Long service leave provision

The liability for long service leave is recognised in the
provision for employee benefits and measured as the
present value of expected future payments to be made
in respect of services provided by employees up to the
reporting date using the projected unit credit
method. Consideration is given to expected future
wage and salary levels, experience of employee
departures, and periods of service. Expected future
payments are discounted using market yields at the
reporting date on national government bonds with
terms to maturity and currencies that match, as
closely as possible, the estimated future cash
outflows.

(p) Share-based payment transactions

The Group provides to employees (including
directors) of the Group in the form of share-based
payment transactions, whereby employees render
services in exchange for shares or rights over shares
('equity-settled transactions').

There are currently three plans in place to provide
these benefits:

(i) The Executive Share Option Plan (ESOP1),
which provides benefits to directors and senior
executives.

(ii) Performance Rights Plan which provides benefits

to senior executives.

The cost of these equity-settled transactions with
employees is measured by reference to the fair value

at the date at which they are granted. The fair value is
determined using a Black Scholes model. Further
details are given in note 13.

The cost of equity-settled transactions is recognised,
together with a corresponding increase in equity, over
the period in which the performance conditions are
fulfilled, ending on the date on which the relevant
employees become fully entitled to the award ('vesting
date').

The cumulative expense recognised for equity-settled
transactions at each reporting date until vesting date
reflects (i) the extent to which the vesting period has
expired and (ii) the number of awards that, in the
opinion of the directors of the Group, will ultimately
vest. This opinion is formed based on the best
available information at reporting date. No
adjustment is made for the likelihood of market
performance conditions being met as the effect of
these conditions is included in the determination of
fair value at grant date.

Where the terms of an equity-settled award are
modified, as a minimum an expense is recognised as
if the terms had not been modified. In addition, an
expense is recognised for any increase in the value of
the transaction as a result of the modification, as
measured at the date of modification.

Where an equity-settled award is cancelled, it is
treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is
recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as
a replacement award on the date that it is granted, the
cancelled and new award are treated as if they were a
modification of the original award, as described in
the previous paragraph.

The dilutive effect, if any, of outstanding options is
ref lected as additional share dilution in the
computation of earnings per share (see note 6).

(q) Leases

Finance leases, which transfer to the Group
substantially all the risks and benefits incidental to
ownership of the leased item, are capitalised at the
inception of the lease at the fair value of the leased
property or, if lower, at the present value of the
minimum lease payments.

NOTES TO THE FINANCIAL
STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING

(s) Foreign currency transactions

POLICIES (continued)

(q) Leases (continued)

Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining
balance of the liability. Finance charges are charged
directly against income.

Capitalised leased assets are depreciated over the
shorter of the estimated useful life of the asset or the
lease term.

Leases where the lessor retains substantially all the
risks and benefits of ownership of the asset are
classified as operating leases. Initial direct costs
incurred in negotiating an operating lease are added
to the carrying amount of the leased asset and
recognised over the lease term on the same bases as
the lease income. Operating lease payments are
recognised as an expense in the statement of
comprehensive income on a straight-line basis over
the lease term.

(r) Revenue

Revenue is recognised to the extent that it is probable
that the economic benefits will flow to the Group
and the revenue can be reliably measured. The
following specific recognition criteria must also be
met before revenue is recognised:

Rendering of services
Revenue from the provision of services is recognised
when the service has been provided.

Maintenance, Hosting and Support fees
Revenue from maintenance, hosting and support is
recognised and bought to account over the time it is
earned. Unexpired revenue is recorded as unearned
income.

Interest received
Revenue is recognised as the interest accrues (using
the effective interest method, which is the ratethat
exactly discounts estimated future cash receipts
through the expected life of the financial instrument)
to the net carrying amount of the financial asset.

Foreign currency transactions are translated into
functional currency using the exchange rates
prevailing at the date of the transaction.

Foreign Exchange differences arising on the
translation of monetary items are recognised in the
statement of comprehensive income.

(t) Income tax

Deferred income tax is provided on all temporary
differences at the reporting date between the tax
bases of assets and liabilities and their carrying
amounts for the financial reporting purposes.

Deferred income tax liabilities are recognised for all
taxable temporary differences:



except where the deferred income tax liability
arises from the initial recognition of an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss; and

in respect of taxable temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, except
where the timing of the reversal of the temporary
differences can be controlled and it is probable
that the temporary differences will not reverse in
the foreseeable future.

Deferred income tax assets are recognised for all
deductible temporary differences, carry-forward of
unused tax assets and unused tax losses, to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences,
and the carry-forward of unused tax assets and
unused tax losses can be utilised:



except where the deferred income tax asset
relating to the deductible temporary differences
arises from the initial recognition of an asset or
liability in a transaction that is not a business
combination and, at the time of the transaction,
affects neither the accounting profit nor taxable
profit or loss; and

in respect of deductible temporary differences
associated with investments in subsidiaries,
associates and interests in joint ventures, deferred
tax assets are only recognised to the extent that it is

2. SUMMARY OF SIGNIFICANT ACCOUNTING

the taxation authority.

POLICIES (continued)

(t) Income tax (continued)

probable that the temporary differences will reverse
in the foreseeable future and taxable profit will be
available against which the temporary differences can
be utilised.

The carrying amount of deferred income tax assets is
reviewed at each reporting date and reduced to the
extent that it is no longer probable that sufficient
taxable profit will be available to allow all or part of
the deferred income tax asset to be utilised.

Deferred income tax assets and liabilities are
measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at the
reporting date.

Income taxes relating to items recognised directly in
equity are recognised in equity and not in the
statement of comprehensive income.

(u) Other taxes

Revenues, expenses and assets are recognised net of
the amount of GST except:

 where the GST incurred on a purchase of goods
and services is not recoverable from the taxation
authority, in which case the GST is recognised as
part of the cost of acquisition of the asset or as part
of the expense item as applicable; and

(v) Significant accounting judgements,

estimates and assumptions

Estimates and judgements are continually evaluated
and are based on historical experience and other
factors, including expectations of future events that
may have a financial impact on the entity and that are
believed to be reasonable under the circumstances.

Critical accounting estimates and assumptions

The Group makes estimates and assumptions
concerning the future. The estimates and
assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets
and liabilities within the next financial year are
discussed opposite.

The Group tests annually whether goodwill has
suffered any impairment, in accordance with the
accounting policies.

(i) Impairment of goodwill and intangibles with
indefinite useful lives

The group determines whether goodwill and
intangibles with indefinite useful lives are impaired at
least on an annual basis. This requires an estimation
of the recoverable amount of the cash-generating unit
to which the goodwill and intangibles with indefinite
useful lives are allocated. The assumptions used in
this estimation of recoverable amount and carrying
amount of goodwill and intangibles with indefinite
useful lives are discussed in note 22.



receivables and payables are stated with the
amount of GST included.

(ii) Share based payments

The net amount of GST recoverable from, or payable
to, the taxation authority is included as part of
receivables or payables in the statement of financial
position.

Cash flows are included in the statement of cash
flows on a gross basis and the GST component of
cash flows arising from investing and financing
activities, which is recoverable from, or payable to,
the taxation authority are classified as operating cash
flows.

Commitments and contingencies are disclosed net of
the amount of GST recoverable from, or payable to,

The consolidated entity measures the cost of equity-
settled transactions with employees by reference to
the fair value of the equity instruments at the date at
which they are granted. The fair value is determined
by using Black-Scholes model taking into account the
terms and conditions upon which the instruments
were granted. The accounting estimates and
assumptions relating to equity-settled share-based
payments would have no impact on the carrying
amounts of assets and liabilities within the next
annual reporting period but may impact profit or loss
and equity.

NOTES TO THE FINANCIAL
STATEMENTS

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)

(iii) Long service leave provision

The liability for long service leave is recognised and measured at the present value of the estimated future cash flows
to be made in respect of all employees at the reporting date. In determining the present value of the liability,
estimates of attrition rates and pay increases through promotion and inflation have been taken into account.

(iv) Estimation of useful lives of assets

The consolidated entity determines the estimated useful lives and related depreciation and amortisation charges
for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a
result of technical innovations or some other event. The depreciation and amortisation charge will increase where
the useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been
abandoned or sold will be written off or written down.

3. REVENUES

Sales Revenue
Sales

Other Revenue
Interest
Foreign Exchange gain
Insurance Claim

Gain on interest swap

Total Revenue

4. EXPENSES

Profit before income tax includes the following expenses:

Operating Lease Rentals

Minimum Lease payments

Other Expenses
Insurance
Travel
Administration
Other

Total Other Expenses

5. INCOME TAX

(a) Income tax expense

The major components of income tax expense are:

Current income tax payable

Deferred income tax relating to origination

and reversal of temporary differences

Adjustments

Income tax expense reported in statement of comprehensive
income

2013
$

2012
$

46,498,244

44,661,238

53,618
-
278

193
54,089
46,552,333

2013
$

11,486
11,486

138,459
426,577
518,414
672,151
1,755,601

1,767,097

44,470
2,150
-

-
46,620
44,707,858

2012
$

11,496
11,496

156,594
352,669
842,567
488,251
1,840,081

1,851,577

2013
$

2012
$

245,410

785,105

(356,184)

208,200

(9,230)

428,921

444,380

NOTES TO THE FINANCIAL
STATEMENTS

5. INCOME TAX (continued)

(b) Amounts charged (credited) directly to equity

Capital Raising transaction costs

Deferred tax assets recognised on acquisition

Deferred tax liabilities recognised on acquisition

(c) Numerical Reconciliation between aggregate tax expense
recognised in the comprehensive income statement and tax
expense calculated per the statutory income tax rate

Prima facie tax on operating profit calculated at 30% (2012: 30%)

Add Tax effect of:

Non-deductible Expenses

Other non-deductible expenses

R&D 40% non-refundable offset

Over/Under provision of tax prior years

2013
$

(2,843)

(77,860)

8,354
(72,349)

2012
$

(62,526)

-
(62,526)

2013
$

2012
$

593,629

515,318

375,031

111,567

63,302

(272,907)

(500,041)

(3,368)

(9,230)

Aggregate income tax expense

428,921

444,380

5. INCOME TAX (Continued)

(d) Recognised deferred tax assets and liabilities

Deferred income tax balances at 30 June relate to the following:

(i) Deferred tax liabilities
Prepaid expenses
Fixed assets
Work in progress
Accrued interest
Gross deferred tax liabilities

(ii) Deferred tax assets
Provisions
Equity raising costs
Borrowing costs
s40-880 costs
R&D Tax Offsets
Gross deferred assets

(e) Tax consolidation

2013
$

2012
$

-
1,141,076
480,598
444
1,622,118

(10,897)
(78,268)
(425,763)
-
(514,928)

583,139
39,789
20,662
5,334
216,476
865,400

410,590
50,021
10,356
-
-
470,967

Effective 1 July 2002, for the purposes of income taxation, Empired Limited and its 100% subsidiaries formed
a tax consolidated group. The head entity of the consolidated group is Empired Limited.

The head entity is responsible for tax liabilities of the group. Intra group transactions are ignored for tax
purposes and there is a single return lodged on behalf of the group.

Empired Limited formally notified the Australian Taxation Office of its adoption of the tax consolidation
regime upon lodgement of its 30 June 2003 consolidated tax return.

There was a tax funding agreement formalised at 30 June 2003. Under this tax funding agreement Empired
Limited is responsible for the tax liabilities of the group.

6. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary
equity holders of the parent by the weighted average number of ordinary shares outstanding during the year.

Diluted earnings per share amounts are calculated by dividing net profit attributable to ordinary equity holders
of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted
average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary
shares into ordinary shares.

NOTES TO THE FINANCIAL
STATEMENTS

6. EARNINGS PER SHARE (continued)

The following represents the income and share data used in the basic and diluted earnings per share computations:

2013
$

2012
$

Net profit attributable to ordinary equity holders of the parent

1,549,840

1,273,344

2013
Thousands

2012
Thousands

Weighted average number of ordinary shares for basic earnings per share 65,561 49,210

Effect of dilution:
Share options 4,665 8,620

Weighted average number of ordinary shares adjusted for the effect of dilution 70,226 57,830

7. CASH AND CASH EQUIVALENTS

(i) Reconciliation of Cash

For the purposes of the statement of cash flows, cash includes cash on hand and cash in banks. Cash at the end of
the year as shown in the statement of cash flows is reconciled to the related items in the statement of financial
position as follows:

Cash at bank and in hand
Term Deposit

Note

(a)

2013
$

2012
$

1,650,890
435,023

860,113
533,603

2,085,913

1,393,716

(a) - The effective interest rate on the short term deposits was 4.57% (2012: 5.31%).

7. CASH AND CASH EQUIVALENTS (continued)

(ii) Financing facilities available

At reporting date the following facilities were available:

Bank overdraft facility

Loan facility

Note

2013
$
2,963,029

2012
$
3,388,000

(b)

3,652,000

6,615,029

3,388,000

The overdraft facility availability is based on 50% of the Company's debtor book at the end of month, and has
an upper limit of $4,000,000.

(b) - A floating charge over the assets of the consolidated group has been provided for certain debts. Refer to
note 15 for further details.

(iii) Reconciliation of net cash flows from operating activities to operating profit after income tax

Operating profit after income tax
Depreciation
Option Plan Expense

Changes in assets and liabilities net of effects of purchases and
disposals of controlled entities:
(Increase)/Decrease in receivables
Decrease in other assets
(Increase)/decrease in prepayments
Increase/(decrease) in creditors
Increase/(decrease) in other creditors
Increase/(decrease) in accrued liabilities
Increase/(decrease) in unearned income
Decrease in income tax payable
Increase in provision for employee entitlements

2013
$

1,549,840
1,203,607
53,790

3,923,097
(182,781)
(88,648)
(1,390,640)
135,188
(847,954)
(94,419)
919,919
406,132

2012
$

1,273,344
633,292
50,810

(3,809,552)
-
(7,583)
1,483,195
(757,482)
308,833
(5,782)
(236,396)
15,945

Net cash from operating activities

5,587,131

(1,051,376)

(iv) Non-cash investing and financing activities

Acquisition of plant and equipment by means of finance lease

4,158,765

1,012,967

NOTES TO THE FINANCIAL
STATEMENTS

7. CASH AND CASH EQUIVALENTS (continued)

(v) Acquisition of Entities

Refer note 25

(vi) Credit Standby Arrangements with Banks

Refer note 15

8. TRADE AND OTHER RECEIVABLES

Trade receivables

2013
$

2012
$

5,841,882

9,765,075

Trade receivables are non-interest bearing and are generally on 30-day terms. (For further details on credit risk, refer
to note 19). A provision for impairment is recognised when there is objective evidence that an individual trade is
impaired. These amounts have been included in the other expenses item. There are no balances within trade and
other receivables that contain assets that are impaired and are past due. It is expected these balances will be received
when due. Impaired assets are provided for in full.

9. WORK IN PROGRESS

Work in progress at cost

2013
$

2012
$

1,601,992

1,419,211

10. OTHER CURRENT ASSETS

Current
Prepayments
Provision for income tax

11. PROPERTY, PLANT AND EQUIPMENT

Lease Improvements

At cost
Accumulated depreciation
Total Lease Improvements

Computer Hardware

At cost
Accumulated depreciation
Total Computer Hardware

Computer Software

At cost
Accumulated depreciation
Total Computer Software

Equipment & Fittings

At cost
Accumulated depreciation
Total Equipment & Fittings

Total Plant and Equipment

2013
$

357,209
842,602
1,199,811

2012
$

270,675
-
270,675

567,742
(129,495)
438,247

247,315
(72,712)
174,603

6,675,152
(1,474,198)
5,200,954

3,757,898
(903,104)
2,854,794

3,422,648
(1,254,119)
2,168,529

1,838,844
(840,350)
998,494

332,298
(141,028)
191,270

169,938
(109,481)
60,457

7,999,000

4,088,348

NOTES TO THE FINANCIAL
STATEMENTS

11. PROPERTY, PLANT AND EQUIPMENT (continued)

2013

Lease
Improvement
$

Computer
Hardware
$

Computer
Software
$

Equipment
& Fittings
$

Total
$

Gross carrying amount
Balance 1 July 2012
Additions
Acquisitions through business combination
Disposals
Balance 30 June 2013

247,315
320,427
-
-
567,742

3,757,899
2,871,742
45,511
-
6,675,151

1,838,844
1,364,589
219,215
-
3,422,649

6,013,996
169,938
4,688,557
131,799
296,781
32,055
(1,494)
(1,494)
332,298 10,997,840

Depreciation and impairment
Balance as at 1 July 2012
Disposals
Depreciation
Balance 30 June 2013

(72,712)
-
(56,783)
(129,495)

(903,104)
-
(571,093)
(1,474,198)

(840,350)
-
(413,770)
(1,254,119)

(109,481)
627
(32,174)
(141,028)

(1,925,647)
627
(1,073,820)
(2,998,840)

Carrying amount 30 June 2013

438,247

5,200,954

2,168,529

191,270

7,999,000

2012

Lease
Improvement
$

Computer
Hardware
$

Computer
Software
$

Equipment
& Fittings
$

Total
$

Gross carrying amount
Balance 1 July 2011
Additions
Acquisitions through business combination
Disposals
Balance 30 June 2012

247,315
-
-
-
247,315

1,533,518
2,224,381
-
-
3,757,899

990,900
847,945
-
-
1,838,844

161,883
8,296
-
(241)
169,938

2,933,615
3,080,621
-
(241)
6,013,996

Depreciation and impairment
Balance as at 1 July 2011
Disposals
Depreciation
Balance 30 June 2012

(29,062)
-
(43,651)
(72,712)

(715,906)
-
(187,198)
(903,104)

(510,621)
-
(329,729)
(840,350)

(101,298)
132
(8,315)
(109,481)

(1,356,886)
132
(568,893)
(1,925,648)

Carrying amount 30 June 2012

174,603

2,854,794

998,494

60,457

4,088,348

12. INTANGIBLE ASSETS

Goodwill
Cost
Accumulated impaired losses
Net carrying value

Software
Cost
Accumulated impaired losses
Amortisation charge
Net carrying value

Other

Cost

Accumulated impaired losses

Amortisation charge

Net carrying value

Total intangibles

2013
$

2012
$

11,296,386
-
11,296,386

3,948,764
-
3,948,764

310,096
-
(158,503)
151,593

249,303

(35,576)

213,727

286,484
-
(64,290)
222,194

11,661,706

4,170,958

Goodwill assumptions have been detailed within note 22. No impairment was recorded.

During the financial year intangibles allocated as “other” were recognised as part of the acquisition of Conducive
Pty Ltd. Refer to note 25 Acquisitions for more information.

NOTES TO THE FINANCIAL
STATEMENTS

12. INTANGIBLE ASSETS (continued)

Year end 30 June 2012
Balance at the beginning of year
Additions
Disposals
Amortisation charge
Impairment losses
Closing value at 30 June 2012

Year end 30 June 2013
Balance at the beginning of year
Additions
Disposals
Amortisation charge
Impairment losses

Goodwill

Software

Other

Total

3,948,764
-
-
-
-
3,948,764

3,948,764
7,347,622
-
-
-

29,685
256,799
-
(64,290)
-
222,194

222,194
23,611
-
(94,212)
-

-
-
-
-
-
-

-
249,303
-
(35,576)
-

3,978,449
256,799
-
(64,290)
-
4,170,958

4,170,958
7,620,536
-
(129,788)
-

Closing value at 30 June 2013

11,296,386

151,593

213,727

11,661,706

Intangible assets, other than goodwill, have finite lives and are required to be amortised over their expected lives.
Goodwill has an infinite life.

13 . EMPLOYEE BENEFITS

(a) Empired employee share option plan

The Group has an employee share options plan (ESOP2) for the granting of non-transferable options to employees
and senior executives to assist in motivating and retaining employees.

Options issued under the ESOP2 will vest on the sooner of one of the following conditions being satisfied:
(i) on the second anniversary, one third of the grant of options;
(ii) on the third anniversary, two thirds of the grant of options;
(iii) on the fourth anniversary, all of the grant of options; or
(iv) a takeover offer or bid in respect of Empired shares is made in accordance with the Corporations Act and the
Board recommends that shareholders accept the offer.

Other relevant terms and conditions applicable to options granted under the ESOP2 include:
(a) any vested options that are unexercised on the fifth anniversary of their grant date will expire; and
(b) upon exercise, options will be settled in ordinary shares of Empired Limited on the basis of one share for each
option exercised.

No options were granted to employees during the financial year.

13 . EMPLOYEE BENEFITS (continued)

The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of share options
issued under the ESOP2.

Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year

2013
No.

374,671
-
(74,671)
(300,000)
-
-

2013
WAEP

$0.22
-
$0.30
$0.20
-
-

2012
No.

1,306,748
-
-
(39,070)
(893,007)
374,671

2012
WAEP

$0.272
-
-
$0.30
$0.31
$0.22

Exercisable at the end of the year

374,671

$0.22

The weighted average contractual life for the share options outstanding as at 30 June 2013 is nil years (2012: 0.34
years).

Share options issued under the ESOP2 and outstanding at the end of the year have the following exercise prices:

Expiry Date

1 August 2012
26 November 2012
Total

Exercise
Price

$0.30
$0.20

2013
No.

-
-

2012
No.

74,671
300,000
374,671

(b) Empired executive share option plan

The Group has an executive share option plan (ESOP1) for the granting of options to certain directors and
senior executives to assist in motivating and retaining executives.

Options issued under the ESOP1 will vest on the sooner of one of the following conditions being satisfied:
(i)
(ii)
and the Board recommends that shareholders accept the offer.

on the second anniversary of the grant of the options;
a takeover offer or bid in respect of Empired shares is made in accordance with the Corporations Act

Other relevant terms and conditions applicable to options granted under the ESOP1 include:

 upon exercise, options will be settled in ordinary shares of Empired Limited.

any vested options that are unexercised on the third anniversary of their grant date will expire; and

NOTES TO THE FINANCIAL
STATEMENTS

13. EMPLOYEE BENEFITS (continued)

The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of share options
issued under the ESOP1:

Outstanding at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Expired during the year
Outstanding at the end of the year

2013
No.

6,450,000
-
-
(3,400,000)
-
3,050,000

2013
WAEP

$0.319
-
-
$0.30
-
$0.351

2012
No.

7,950,000
1,250,000
(500,000)
(589,999)
(1,660,001)
6,450,000

2012
WAEP

$0.31
$0.40
$0.40
$0.239
$0.314
$0.324

Exercisable at the end of the year

2,550,000

$0.341

4,200,000

$0.319

As at 30 June 2013 there were 3,050,000 options over ordinary shares with an average exercise price of $ 0.351 each,
exercisable upon meeting the conditions outlined above and until their expiry dates as set out in the table below.

The weighted average contractual life for the share options outstanding as at 30 June 2013 is 1.29 years (2012: 0.87
years).

Share options issued under the ESOP1 and outstanding at the end of the year have the following average exercise
prices:

1 December 2014
26 November 2012
12 January 2014
20 February 2015
20 February 2016
20 February 2017
Total

Exercise
Price

2013
No.

2012
No.

$0.40
$0.30
$0.30
$0.40
$0.40
$0.40

800,000
-
1,500,000
250,000
250,000
250,000
3,050,000

800,000
3,400,000
1,500,000
250,000
250,000
250,000
6,450,000

13 . EMPLOYEE BENEFITS (continued)

c) Empired purchaser share option plan

Empired Limited issued share options as part of the acquisition of the Quadrant Group. Details of the options granted
can be found below.

Outstanding at the beginning of the year
Expired during the year
Outstanding at the end of the year

Exercisable at the end of the year

2013
No.

2013
WAEP

2012
No.

2012
WAEP

-
-
-

100,000
(100,000)
-

$0.30
$0.30
-

There are no outstanding share options under this plan at 30 June 2013. The fair value of the options are
estimated at the date of grant using a Black Scholes model.

Empired sales executive share option plan

The following table illustrates the number (No.) and weighted average exercise prices (WAEP) of share
options issued under the ESOP3.

Outstanding at the beginning of the year
Forfeited during the year
Outstanding at the end of the year

Exercisable at the end of the year

2013
No.

200,000
(200,000)
-

2013
WAEP

$0.30
$0.30
-

2012
No.

2,450,000
(2,250,000)
200,000

2012
WAEP

$0.30
$0.30
$0.30

As at 30 June 2013 there were nil options under this plan.

Share options issued under the ESOP3 and outstanding at the end of the year have the following average
exercise prices:le illustrates the number (No.) and weighted average exercise prices (WAEP) of share options
issued under the ESOP3.

Expiry Date

1 December 2014
Total

Exercise
Price

$0.30

2013
No.

-
-

2012
No.

200,000
200,000

e) The total expense relating to ESOP in 2013 was $ 53,790 (2012: $ 50,810)

NOTES TO THE FINANCIAL
STATEMENTS

f) Empired Performance Rights Plan

During 2013 certain employees were eligible to participate in the Company's Performance Rights Plan. Each
performance right granted under this plan is subject to both performance criteria based on absolute EPS and a
vesting period. Unvested performance rights lapse on the employee's termination, subject to Board discretion.
Each performance right has nil consideration, with each performance right converting to one ordinary share
subject to the satisfaction of the performance criteria. The performance rights are unquoted and non-
transferrable. There are voting and dividend rights attached to the shares once converted, but not the
performance rights.

Performance rights and weighted average exercise prices are as follows for the reporting periods presented:

Outstanding at 1 July 2012

Granted

Forfeited

Exercised

Expired

Outstanding at 30 June 2013

Exercisable at 30 June 2013

Performance Rights
Plan

Number of
Shares

Weighted average exercise
price ($)

1,350,000

The weighted average share price at the date of exercise was $0.00 (no exercises in 2013).

13. EMPLOYEE BENEFITS (continued)

f) Empired Performance Rights Plan (continued)

The fair values of the performance rights plan granted were determined using a variation of the binomial
option pricing model that takes into account factors specific to the share incentive plans, such as the vesting
period. The performance condition related to the performance rights plan, being a market condition, has been
incorporated into the measurement by means of actuarial modelling. The following principal assumptions
were used in the valuation:

Grant date

Vesting period ends

Share price at date of grant

Volatility

Option life

Dividend yield

Risk free investment rate

Fair value at grant date

Exercisable from / to

Issue 1

Issue 2

29/11/2012

01/07/2012

10/04/2013

01/07/2016

$0.395

40%

2 - 4 yrs

3.15

$37,612

$0.500

40%

2 - 4 yrs

3.28

$56,812

Weighted average remaining contractual life

1.67 years

The underlying expected volatility was determined by reference to historical data of the Company's shares over
a period of time. No special features inherent to the options granted were incorporated into measurement of
fair value.

NOTES TO THE FINANCIAL
STATEMENTS

14. TRADE AND OTHER PAYABLES (CURRENT)

Trade payables
Superannuation payable
GST payable
PAYG payable
Accrued liabilities
Credit cards payable
Other
Unearned Revenue

Deferred vendor payment (note 25)

Included in the above are aggregate amounts payable
to the following related parties:

2013
$

2,049,658
520,101
711,125
800,897
774,987
38,572
135,817
408,114

1,743,000

7,182,271

2012
$

3,440,298
387,569
659,892
856,357
1,586,442
49,869
113,890
502,533

7,596,850

Owing to directors and director related entities

44,458

95,200

Trade payables are non-interest bearing and are normally settled on 30-day terms.

The net of GST payable and GST receivable and Superannuation payable and is remitted to the appropriate body on
a quarterly basis. PAYG payable is remitted to the appropriate body on a monthly basis.

15 . BORROWINGS

Current
Obligations under finance leases and hire purchase contracts
Obligations under premium funding contracts
Obligations under bank loan

Non-current
Obligations under finance leases and hire purchase contracts
Obligations under bank loan

Obligations under vendor payments

2013
$

749,494
88,586
1,036,280
1,874,360

802,675
1,299,132

1,909,000

4,010,807

2012
$

377,990
133,426
-
511,416

554,095
-

554,095

15 . BORROWINGS (continued)

Hire Purchase Contracts

Hire purchase contract maturity ranges from January 2013 to March 2016. Leased assets are held as security.

Finance facilities available

At reporting date, the following financing facilities
had been negotiated and were available:
Total facilities:
Facilities used at reporting date
Bank loan

Facilities unused at reporting date

2013
$

2012
$

9,987,412

3,388,000

(2,335,412)

7,652,000

3,388,000

A bank overdraft facility was established in December 2008. The facility is reviewed on an annual basis with
financial covenants of EBITDA and net tangible assets tested quarterly. The loan facility availability is based on
50% of the Company's debtor book at the end of month, and has an upper limit of $ 4,000,000.

The Bank of Western Australia holds a fixed floating charge over company assets. Maximum prospective
liability set out in the charge is ten million dollars.

16. PROVISIONS

Year end 30 June 2012
Balance at the beginning of the year
Additional provisions
Amounts used
Closing value at 30 June 2013

Annual
Leave

Long
Service
Leave

Income
Tax

Total

802,723
4,401,198
(4,076,731)
1,127,190

178,342
378,947
(297,282)
260,007

168,644
-
(168,644)
-

1,149,709
4,780,145
(4,542,657)
1,387,197

NOTES TO THE FINANCIAL
STATEMENTS

16. PROVISIONS (continued)

Analysis of total provisions

Current
Provision for Annual leave
Provision for Long Service leave
Provision for Income Tax

Non-Current
Provision for Long Service leave

17. RESERVES

Options reserve

2013
$

1,127,190
87,633
-
1,214,823

2013
$

172,374
172,374

2012
$

802,723
82,996
168,644
1,054,363

2012
$

95,346
95,346

The company has three share option schemes under which options to subscribe for the company's shares have been
granted to certain executives and employees (refer note 13). The employee equity benefits reserve is used to record
the value of equity benefits provided to employees and directors as part of their remuneration.

18. ISSUED CAPITAL

Ordinary Shares

Issued and fully paid

Movement in ordinary shares on issue

At 1 July 2011

Issue of shares

Conversion of options

At 30 June 2012

Issue of shares

Conversion of options

At 30 June 2013

2013
$

2012
$

8,779,678

6,456,310

No.

46,588,980

12,000,000

629,069

59,218,049

5,000,000

3,700,000

67,918,049

Value $

2,849,315

3,454,108

152,887

6,456,310

1,248,018

1,075,350

8,779,678

18. ISSUED CAPITAL (continued)

Movement in ordinary shares on issue

At beginning of the reporting period

4 April 2012

8 May 2012

31 August 2012

Conversion of options

21 July 2011

26 July 2011

23 November 2011

8 December 2011

19 December 2011

22 February 2012

23 February 2012

21 November 2012

23 November 2012

26 November 2012

2013
No.

2012
No.

59,218,409

46,588,980

5,000,000

7,000,000

100,000

200,000

3,400,000

180,000

120,000

83,333

40,000

166,666

17,724

21,346

At end of the reporting period

67,918,049

59,218,049

Ordinary shares entitle the holder to participate in dividends, and carry one vote per share. These shares
have no par value.

On 31 August, 2012, the company issued 5,000,000 shares at $ 0.23 each to the vendors of Conducive Pty
Ltd as part of the acquisition value

Capital Management

Management controls the capital of the Group in order to maintain a sustainable debt to equity ratio,
generate long-term shareholder value and ensure that the Group can fund its operations and continue as a
going concern.

The Group's debt and capital include ordinary share capital, convertible performance rights and employee
options, supported by financial assets.

There are no externally imposed capital requirements, except for the covenant on the bank overdraft
referred to in note 15.

NOTES TO THE FINANCIAL
STATEMENTS

18. ISSUED CAPITAL (continued)

Management effectively manages the Group's capital by assessing the Group's financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the management
of debt levels, distributions to shareholders and share issues.

There have been no changes in the strategy adopted by management to control the capital of the Group since the
prior year. The gearing ratios for the years ended 30 June 2013 and 30 June 2012 are as follows:

Total Borrowings

Less cash and cash equivalents

Net Debt

Total Equity

Total Capital

Gearing ratio

Consolidated
Group
2013
$

Consolidated
Group
2012
$

3,976,167

(2,085,913)

1,890,254

8,779,678

10,669,932

1,065,511

(1,393,716)

6,456,310

17.72%

Note

7(i)

19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group's principal financial instruments consist of bank loans and hire purchase contracts, cash, short
term deposits, trade receivables, trade payables, loans and hire purchases.

The main purpose of the financial liabilities is to raise finance for the Group's operations.

The Group has various other financial instruments such as trade debtors and trade creditors, which arise
directly from its operations.

It is, and has been throughout the period under review, the Group's policy that no trading in financial
instruments shall be undertaken.

The main risks arising from the Group's financial instruments are interest rate risk, liquidity risk, foreign
currency risk and credit risk. The board reviews and agrees policies for managing each of these risks and they are
summarised below.

Market risk



Interest rate risk

Exposure to market interest rates is limited to the Company's cash balances. Cash balances are disclosed at
note 7.

Cash at bank accounts attract a variable average interest rate of 1.13% (2012: 2.50%) based on the cash
balance at year end. Cash on deposit attracts a variable average interest rate of 4.40% (2012: 5.20%) at the
end of the year.

At 30 June 2013, if interest rates had changed by +/- 1% from the year end rates above, after tax profits
would have been $9,119 (2012: $7,764) lower/higher.

The company entered into a loan to acquire Conducive Pty Limited on 20 August 2012. To protect against
the risk of adverse interest rate movements the company entered into a swap contract to fix interest at
6.65% per annum.

Finance leases and hire purchase agreements entered into are purchased at fixed interest rates.

The Company constantly monitors its interest rate exposure.

 Foreign currency risk

The Group's exposure to foreign currency risk is minimal. Trade debtor and trade creditor transactions
may be entered into in foreign currency and fluctuations in these currencies may have a minor impact on
the Company's financial results.

The exchange rates are closely monitored within the Company.

 Commodity price risk

The Group's exposure to price risk is minimal.

Credit risk

The Group trades only with recognised, creditworthy third parties.

NOTES TO THE FINANCIAL
STATEMENTS

19. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)

It is the Group policy that all customers who wish to trade on credit terms are subject to credit verification
procedures. Customers that fail to meet the Group's creditworthiness may transact with the group only on a
prepayment basis.

In addition, receivable balances are monitored on an ongoing basis with the result that the Group's exposure to
bad debts is not significant.

For transactions that are not denominated in the measurement currency of the relevant operating unit, the
Group does not offer credit terms without the specific approval of the Head of Credit Control.

With respect to credit risk arising from the other financial assets of the Group, which comprise cash and cash
equivalents, available-for-sale financial assets and certain derivative instruments, the Group's exposure to credit
risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these
instruments.

 Exposure to credit risk

The Group's maximum exposure to credit risk at the report date was:

Trade and other Receivables (note 8)

2013
$

5,841,882

The aging of the Group's non-impaired trade receivables at reporting date was:

Non past due

Past due 0-30 days

Past due 31-60 days

Past due 60 days

2013
$

3,700,799

1,081,865

475,043

584,175

5,841,882

2012
$

9,765,075

2012
$

7,522,217

478,660

439,283

1,324,915

9,765,075

The group expects to be able to recover all outstanding debts that have not been provided for impairment.

Liquidity risk

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of
bank overdrafts and hire purchase contracts.

The Group manages liquidity risk by forecasting and monitoring cash flows on a continuing basis.

20. FINANCIAL INSTRUMENTS

The fair value of financial assets and liabilities is considered to approximate their carrying values.

The tables below reflect the undiscounted contractual settlement terms for financial instruments of a fixed
period of maturity, as well as management's expectations of the settlement period for all other financial
instruments. As such, the amounts may not reconcile to the statement of financial position.

Interest rate risk

Exposure to interest rate risks on financial assets and liabilities are summarised as follows:

2013

Floating
Interest
Rate

Fixed
Interest
Rate
1 year or
less

Fixed
Interest
Rate
Over 1 to
5 years

Non-
interest
bearing

Carrying
amount
as per
balance
sheet

Weighted
average
effective
interest
rate

2013
$

2013

i) Financial Assets
Term deposit
Term deposit
Term deposit
Cash
Loans and receivables

-
-
-

1,650,640

-
43,570
391,453
-
-

Total financial assets

1,650,640

435,023

ii) Financial Liabilities - at amortised cost
Overdraft Facility

Accounts Payable

Hire Purchase

Short term loans

Bank Loan
Total financial liabilities

2,335,412
2,335,412

-
-
-
-
-

-
-
-

250
5,841,882

-
43,570
391,453
1,650,890
5,841,882

5,842,132

7,927,795

2,049,658

749,494

802,675

88,586

838,080

802,675

2,049,658

1,552,169

88,586

2,335,412
6,025,825

(iii) The aging of the Group’s trade payables at reporting date was:

Not past due
Past due 0 - 30 days
Past due 31 - 60 days
Past due 60 days

-
4.95%
4.56%
-
-

8.45%

5.94%

7.65%

2013
$

1,878,495
178,252
-
(7,089)

2,049,658

NOTES TO THE FINANCIAL
STATEMENTS

20. FINANCIAL INSTRUMENTS (continued)

2012

Floating
Interest
Rate

Fixed
Interest
Rate
1 year or
less

Fixed
Interest
Rate
Over 1 to
5 years

Non-
interest
bearing

Carrying
amount as
per
balance
sheet

Weighted
average
effective
interest
rate

2012
$

2012

i) Financial Assets
Term deposit
Term deposit
Term deposit
Cash
Loans and receivables

Total financial assets

-
-
-
859,863
-

-
142,150
391,453
-
-

859,863

533,603

ii) Financial Liabilities - at amortised cost
Overdraft Facility

Accounts Payable

Hire Purchase

Short term loans

Total financial liabilities

-
-
-
-
-

-
-

250
9,765,075

-
142,150
391,453
860,113
9,765,075

9,765,325

11,158,791

3,440,298

5.06%
5.56%

-
-

377,990

554,095

133,426

932,085

133,426

11.13%

6.87%

511,416

554,095

3,440,298

4,505,809

iii) The aging of the Group’s trade payables at 30 June 2012:

Not past due
Past due 0 - 30 days

Past due 31 - 60 days
Past due 60 days

2012
$

2,043,128
675,503

12,046
709,621
3,440,298

21. COMMITMENTS AND CONTINGENCIES

No contingent assets or liabilities as at 30 June 2013.

Commitments for Expenditure

A. Hire Purchase
The consolidated entity has various computer equipment on hire purchase
arrangements. The lease is for a period of 35 months.

Not later than one year
Later than one year but not later than five years
Less: unexpired charges

Hire Purchase
Current
Non Current
Total Hire Purchase

B. Loan Repayments
The consolidated entity has borrowed the necessary funds from CGU to
finance insurance. The terms of the loans are for 10 months each.

Not later than one year
Later than one year but not later than five years
Less: unexpired charges

Loan Repayments
Current
Non Current
Total loan repayments

C. Operating Leases

2013
$

2012
$

849,463
843,852
(141,146)
1,552,169

749,494
802,675
1,552,169

93,845
-
(5,259)
88,586

88,586
-
88,586

449,918
598,848
(116,681)
932,085

377,990
554,095
932,085

142,668
-
(9,242)
133,426

133,426
-
133,426

Office premises are leased under non-cancellable operating leases for periods as follows:

Location

Level 13, 256 Adelaide Terrace, Perth
Level 4, 110 William Street
Level 5, 257 Collins Street

State

WA
WA
VIC

Terms

Expires 31 October 2015
Expires 31 October 2015
Expires 30 November 2019

NOTES TO THE FINANCIAL
STATEMENTS

21. COMMITMENTS AND CONTINGENCIES (Continued)

C. Operating Leases (continued)

No contingent assets or liabilities as at 30 June 2013.

Minimum lease payments under non-cancellable operating leases according to
the time expected to elapse to the expected date of payment:

Not later than one year
Later than one year but not later than five years

The company has in place bank guarantees in relation to rental premises at 256
Adelaide Terrace, Perth and 110 William Street, Perth.

256 Adelaide Terrace, Perth
110 William Street, Perth

31 Queens Street, Melbourne

Maximum amount the bank may call

22. IMPAIRMENT TESTING OF GOODWILL

2013
$

2012
$

987,424
2,312,621

739,950
1,473,511

3,300,045

2,213,461

366,428
40,000

406,428

366,428
-

132,000

498,428

Goodwill acquired through business combinations (refer note 12) has been allocated to the cash generating
units for impairment testing. The recoverable amount of each of the cash generating units has been determined
based on a value in use calculation. Value in use is calculated based on the present value of cash flow projections
covering a five-year period.

The discount rate applied to cash flow projections is 10.70% (2012: 11.20%) using a 3% growth rate (2012:
5.4%) that is the same as the average growth rate for the IT Infrastructure Services market sector.

Sensitivity analysis calculated on changes in assumptions did not indicate any impairment.

Carrying amount of goodwill

There is no impairment loss in the current or prior period.

2013
$

2012
$

11,293,386

3,948,764

23. INVESTMENT IN CONTROLLED ENTITY

Other Financial Assets

Country of
Incorporation

% Equity Interest
2012
2013
%
%

Investment ($)

2013
$

2012
$

Tusk Technologies Pty Ltd
Conducive Pty Ltd

Australia
Australia

100
100

100
-

359,661
9,679,427

360,714
-

10,039,088

360,714

The balance of the Tusk Technologies Pty Ltd loan as at 30 June 2013 is $ 351,651. This loan is unsecured does not
bear interest and is not repayable in the next 12 months.

The balance of the Conducive Pty Ltd loan as at 30 June 2013 is $ 2,078,243. This loan is unsecured does not bear
interest and is not repayable in the next 12 months.

Other than this related party loan there are no other related party transactions requiring disclosure.

24. EVENTS AFTER REPORTING DATE

There were not events to note between the close of the financial year and the date of release of this report.

NOTES TO THE FINANCIAL
STATEMENTS

25. ACQUISITIONS

On the 31st of August 2012 Empired Limited ("Empired") acquired 100% of the shares in Conducive Pty Ltd
("Conducive") for $9,679,427. The purchase price is satisfied through the issue of 5 million fully paid ordinary
Empired shares plus $4.78 million in cash on completion. Total consideration includes two milestone cash
payments of $1.74 million and $1.91 million that will be made on 31 July 2013 and 31 July 2014 respectively, subject
to performance criteria being met.

The acquisition of Conducive has impacted the consolidated accounts from 31 August 2012. The purchase
agreement entitled Empired to the profits for the period 1 July 2012 to 31 August 2012. The profit for the period of
$336K is not recorded in the consolidated profit and loss, but has been taken into account within the calculation of
net identifiable assets.

The acquisition had the following effect on the consolidated entity's assets and liabilities:

Fair Value
$

1,415,604
1,084,835
333,369

43,570

76,965
77,860

(356,821)

(307,457)

(8,354)

(277,070)
2,082,501

6,839
242,464
249,303

7,347,623

9,679,427

322,024

Net Tangible assets acquired
Cash
Receivables
Work in progress

Other assets

Property, plant & equipment
Deferred tax assets

Trade and other payables

Employee liabilities

Deferred tax liabilities

Provisions

Other identifiable assets acquired
Non-complete Clause
Customer relationship

Goodwill

Net Assets Acquired

Acquisition costs expensed to profit & loss

25. ACQUISITIONS (continued)

Cash used to acquire business, net of cash acquired:

Acquisition date fair value of total consideration

Less:

Cash and cash equivalents
Shares issued as consideration

Deferred payments

Net cash used

Consolidated
2013 $

9,679,427

(1,415,604)
(1,250,000)

(3,652,000)

3,361,823

The below payments below are payable on the 31 of July 2013 and 31 of July 2014, subject to performance criteria
and are financed by the Company's bankers. The conditions were met for the 2013 financial year and the payment
was made by the Company's bankers on the 31 of July 2013.

Deferred vendor payments (Current)

Deferred vendor Payment

Deferred vendor payments (Non Current)

Deferred vendor Payment

26. AUDITORS’ REMUNERATION

2013
$

2012
$

1,743,000
1,743,000

2013
$

2012
$

1,909,000
1,909,000

-
-

2013
$

2012
$

Amounts received or due and receivable by auditors or the parent entity:



an audit or review of the financial report of the entity and any other entity in the
consolidated entity

113,647

59,036

 other services in relation to the entity and any other entity in the consolidated entity:
- Tax compliance

- Special audits required as part of bank covenants

113,647

59,036

NOTES TO THE FINANCIAL
STATEMENTS

27. KEY MANAGEMENT PERSONNEL

(a) Directors

The following persons were directors of Empired Limited during the financial year:

M Ashton
J Bardwell

R Bevan
R Baskerville

(b) Other key management personnel

The following persons also had authority and responsibility for planning, directing and controlling the
activities of the Group during the financial year:

M Waller
R McCready Chief Operating Officer

Chief Financial Officer and Company Secretary

Information regarding key management personnel compensation for the year ended 30 June 2013 is provided in
the remuneration section of the directors' report on pages 17 to 21.

(d) Option holdings of directors and executives

The movement during the reporting period in the number of options over ordinary shares in Empired Limited
held, directly, indirectly or beneficially, by each of the key management person, including their related parties, is
as follows:

Balance at
beginning of
period
01-Jul-2012

Granted as
Remuneration

Options
Execised

Net
Change
Other

Balance at
end of
period
30-Jun-2013

Not Vested
& Not
Exercisable

Vested &
Exercisable

30 June 2013
Directors
R. Baskerville

M. Ashton
R. Bevan
J. Bardwell

Executives
M. Waller

R. McCready
Total

2,550,000

600,000
250,000
500,000

1,150,000

750,000
5,800,000

-
-
-

-
-

(2,550,000)

(600,000)
(250,000)

-
(3,400,000)

-
-
-

-
-

-
-
500,000

1,150,000

750,000
2,400,000

-
-
-

500,000
500,000

-
-
500,000

1,150,000

250,000
1,900,000

27. KEY MANAGEMENT PERSONNEL (continued)

(d) Option holdings of directors and executives (continued)

Balance at
beginning
of period
01-Jul-2012

Granted as
Remuneration

Options
Exercised

Net
Change
Other

Balance at
end of
period
30-Jun-2012

Not Vested
& Not
Exercisable

Vested &
Exercisable

30 June 2012
Directors
R. Baskerville
M. Ashton
R. Bevan
J. Bardwell

Executives
M. Waller
R. McCready
Total

2,850,000
1,000,000
500,000
500,000

1,464,038
-
6,314,038

-
-
-
-

-
(166,666)
-
-

(300,000)
(233,334)
(250,000)
-

2,550,000
600,000
250,000
500,000

-
-
-
500,000

2,550,000
600,000
250,000
-

(292,692)
-
750,000
-
750,000 (188,012) (1,076,026)

(21,346)
-

1,150,000
750,000
5,800,000

750,000
750,000
2,000,000

400,000
-
3,800,000

(e) Shareholdings of Directors and Executives

Shares held in Empired Limited:

30 June
2013

Balance
01-Jul-2013
Ord

Pref Ord

Granted as
Remuneration

Directors
R. Baskerville 9,013,233
341,666
M. Ashton

R. Bevan

J. Bardwell

4,099,904

Total

13,454,803

-
-

On Exercise of
Options

Ord

Pref

Net Change Other

Ord

Pref

Balance
30-June-2013
Pref

Ord

-
-

84,000
(341,666)

(257,666)

-
-

9,097,233
-

4,099,904

13,197,137

-
-

Pref

-
-

Balance
01-Jul-2011

Granted as
Remuneration

On Exercise of
Options

Net Change Other

Balance
30-June-2012

Ord

Pref

Ord

Pref

Ord

Pref

Ord

Pref

Ord

Pref

30 June
2012

Directors

R. Baskerville 9,013,233

M. Ashton

175,000

R. Bevan

J. Bardwell

4,000,000

Total

13,188,233

166,666

99,904

9,013,233

341,666

4,099,904

13,454,803

NOTES TO THE FINANCIAL
STATEMENTS

27. KEY MANAGEMENT PERSONNEL (continued)

(e) Shareholdings of Directors and Executives (continued)

All equity transactions with directors and other than those arising from the exercise of remuneration options
have been entered into under terms and conditions no more favourable than those the entity would have
adopted if dealing at arm's length.

2013
30 June

Balance
01-Jul-2012
Ord

Pref

Granted as
Remuneration
Pref

Ord

On Exercise of
Options

Net Change Other

Ord

Pref

Ord

Pref

Balance
30-June-2013
Pref
Ord

Specified Executives
M. Waller

1,702,070

R.McCready

200,000

Total

1,902,070

(359,000)

1,343,070

200,000

(359,000)

- 1,543,070

30 June 2012

Balance
01-Jul-2011
Ord

Pref

Granted as
Remuneration
Ord

Pref

On Exercise of
Options

Ord

Pref

Net Change Other

Ord

Pref

Balance
30-June-2012
Pref
Ord

Specified Executives
M. Waller
R.McCready

1,950,724
-

Total

1,950,724

-
-

28. DIVIDENDS

-
-

21,346

-
-

(270,000)
200,000

(70,000)

-
-

1,702,070
200,000

1,902,070

-
-

(a) Distributions paid

2013 final franked dividend of 0.50 cents (2012: 0 cents)

Interim franked dividend of nil cents (2012: 0 cents)

(b) Franking Credit Balance
Balance of franking account at year end at 30% available to the shareholders of
Empired Limited for subsequent financial years

The franked dividends paid during the year were franked at the tax rate of 30%.

2013
$

2012
$

339,590

1,256,192

142,994

29. PARENT ENTITY INFORMATION

As at, and throughout, the financial year ended 30 June 2013, the parent entity of the Group was Empired
Limited.

Statement of financial position
Current assets
Total assets
Current liabilities
Total liabilities

Issued capital

Employee equity reserve

Retained profits
Total Equity

Statement of comprehensive income
Profit for year
Other comprehensive income
Total comprehensive income

2013
$

7,858,330
26,434,228
9,142,255
14,898,524

8,779,678

461,126

2,679,932
11,920,736

2013
$

158,582
-
158,582

2012
$

13,170,876
20,197,993
9,296,975
10,812,996

6,456,310

407,336

2,521,351
9,384,997

2012
$

1,273,344
-
1,273,344

Parent entity contingent liability disclosure has been referenced at note 21.

DIRECTORS’ DECLARATION

The directors of the company declare that

the financial statements and notes, are in accordance with the Corporations Act 2001 and:

a. comply with Accounting Standards; and

b. give a true and fair view of the financial position as at 30 June 2013 and of the
performance for the year ended on that date of the company and consolidated
group;

the Chief Executive Officer and Chief Financial Officer have each declared that:

a. the financial records of the company for the financial year have been properly

maintained in accordance with s286 of the Corporations Act 2001;

b. the financial statements and notes for the financial year comply with the

Accounting Standards; and

c. the financial statements and notes for the financial year give a true and fair

view;

in their opinion there are reasonable grounds to believe that the company will be able to
pay its debts as and when they become due and payable.

This declaration is made in accordance with a resolution of the Board of Directors.

On behalf of the Board

Russell Baskerville
Managing Director
29th August 2013

Branden Dekenah
General Manager, Enterprise Applications
78

Grant Thornton Audit Pty Ltd
ACN 130 913 594

10 Kings Park Road
West Perth WA 6005
PO Box 570
West Perth WA 6872

T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au

Auditor’s Independence Declaration
To the Directors of Empired Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead
auditor for the audit of Empired Limited for the year ended 30 June 2013, I declare that, to
the best of my knowledge and belief, there have been:

no contraventions of the auditor independence requirements of the Corporations Act
2001 in relation to the audit; and

no contraventions of any applicable code of professional conduct in relation to the
audit.

GRANT THORNTON AUDIT PTY LTD
Chartered Accountants

C A Becker
Partner - Audit & Assurance

Perth, 28 August 2013

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the context requires. Grant
Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are delivered
by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and are not liable for one another’s acts or omissions. In the Australian context
only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton
Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current scheme applies.

Grant Thornton Audit Pty Ltd
ACN 130 913 594

10 Kings Park Road
West Perth WA 6005
PO Box 570
West Perth WA 6872

T +61 8 9480 2000
F +61 8 9322 7787
E info.wa@au.gt.com
W www.grantthornton.com.au

Independent Auditor’s Report
To the Members of Empired Limited

Report on the financial report
We have audited the accompanying financial report of Empired Limited (the ‘Company’),
which comprises the consolidated statement of financial position as at 30 June 2013, the
consolidated statement of profit or loss and other comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash flows for the year then
ended, notes comprising a summary of significant accounting policies and other explanatory
information and the directors’ declaration of the consolidated entity comprising the
Company and the entities it controlled at the year’s end or from time to time during the
financial year.

Directors’ responsibility for the financial report
The Directors of the Company are responsible for the preparation of the financial report
that gives a true and fair view in accordance with Australian Accounting Standards and the
Corporations Act 2001. The Directors’ responsibility also includes such internal control as
the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error. The Directors also state, in the notes to the financial report, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, the financial
statements comply with International Financial Reporting Standards.

Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We
conducted our audit in accordance with Australian Auditing Standards. Those standards
require us to comply with relevant ethical requirements relating to audit engagements and
plan and perform the audit to obtain reasonable assurance whether the financial report is
free from material misstatement.

‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients and/or refers to one or more member firms, as the
context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm
is a separate legal entity. Services are delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one another and
are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to Grant Thornton Australia Limited ABN 41 127 556 389 and its
Australian subsidiaries and related entities. GTIL is not an Australian related entity to Grant Thornton Australia Limited.

Liability limited by a scheme approved under Professional Standards Legislation. Liability is limited in those States where a current
scheme applies.

An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s
judgement, including the assessment of the risks of material misstatement of the financial
report, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the
Company’s preparation of the financial report that gives a true and fair view in order to
design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the Company’s internal control. An audit
also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the
overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide
a basis for our audit opinion.

Electronic presentation of audited financial report
This auditor’s report relates to the financial report of Empired Limited and its controlled
entities for the year ended 30 June 2013 included on the Company’s web site. The
Company’s Directors are responsible for the integrity of its web site. We have not been
engaged to report on the integrity of the Company’s web site. The auditor’s report refers
only to the statements named above. It does not provide an opinion on any other
information which may have been hyperlinked to/from these statements. If users of this
report are concerned with the inherent risks arising from electronic data communications
they are advised to refer to the hard copy of the audited financial report to confirm the
information included in the audited financial report presented on this web site.

Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001.

Auditor’s opinion
In our opinion:

the financial report of Empired Limited is in accordance with the Corporations Act
2001, including:

giving a true and fair view of the consolidated entity’s financial position as at 30
June 2013 and of its performance for the year ended on that date;

complying with Australian Accounting Standards and the Corporations
Regulations 2001; and

the financial report also complies with International Financial Reporting Standards as
disclosed in the notes to the financial statements.

Report on the remuneration report
We have audited the remuneration report included in pages 17 to 21 of the directors’ report
for the year ended 30 June 2013. The Directors of the Company are responsible for the
preparation and presentation of the remuneration report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration
report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report
In our opinion, the remuneration report of Empired Limited for the year ended 30 June
2013, complies with section 300A of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD
Chartered Accountants

C A Becker
Partner - Audit & Assurance

Perth, 28 August 2013

Brett Gresele
G.M. Infrastructure Services

SHAREHOLDING ANALYSIS

In accordance with Listing Rule 4.10 of the Australia Stock Exchange Limited, the Directors provide the
following shareholding information which was applicable as at 30th June 2013.

A. DISTRIBUTION OF SHAREHOLDING

SIZE OF SHAREHOLDING

NUMBER OF SHAREHOLDERS

1 - 1,000
1,001 - 5,000

5,001 - 10,000

10,001 - 100,000
100,001- MAX

TOTAL

10
48

190
80

382

0.01
0.21

0.66

9.96
89.16

100.00

B. SUBSTANTIAL SHAREHOLDERS

The following are registered by the Company as substantial shareholders, having declared a relevant interest
in the number of voting shares shown adjacent as at the date of giving the notice.

SHAREHOLDER

NUMBER

Baskerville Investments Pty Ltd

7,450,059

Mr. John Bardwell

Mr. Gregory Leach

4,099,904

3,544,225

10.97

6.04

5.22

SHAREHOLDING ANALYSIS

C. TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest shareholders are:

NAME

Number of
Shares Held

Baskerville Investments Pty Ltd (Baskerville Family Account)

7,430,059 10.94

Aust Executor Trustees Sa Ltd (Tea Custodians Limited)

Zero Nominees Pty Ltd

Nagivator Australia Ltd (MLC Investment Sett A/c)

Mr Gregory David Leach

RBC Investor Services Australia

Mr. John Alexander Bardwell

Mr. David John Cawthorn

Mr. Branden Wayne Dekenah

Mrs Kym Garreffa

Ms Kristy Christophersen

Mr. David William Hedge

Uniplex Constructions Pty Ltd

Mr John Alexander Bardwell & Mrs Paola Bardwell

Ice Cold Investments Pty Ltd

Mr. Stuart Mark Strickland

Three Zebras Pty Ltd

TT Nicholas Pty Ltd

Westrade Resources Pty Ltd

Mr Kevin Peter Flynn

4,421,491

4,050,000

3,554,115

3,544,225

3,435,157

3,000,000

1,500,000

1,350,000

1,256,167

1,200,000

1,166,707

1,099,904

1,000,000

800,000

762,732

6.51

5.96

5.23

5.22

5.06

4.42

2.21

1.99

1.85

1.77

1.72

1.62

1.47

1.18

1.12

Total

43,770,557 64.45

The twenty members holding the largest number of shares together held a total of 64.45% of issued
capital.

D. ISSUED CAPITAL

(i) Ordinary Shares

The fully paid issued capital of the company consisted of 67,918,049 shares held by 382 shareholders.

 Each share entitles the holder to one vote.

 The number of shareholdings held in less than marketable parcels is 7.

(ii) Unquoted Equity



The options issued under the company share options plans consisted of 3,050,000 options.

1,350,000 performance rights were issued under the company’s LTI Plan.

Options do not have any voting rights.

E. ON-MARKET BUY-BACK

There is no current on-market buy-back.

F. COMPANY SECRETARY

The Company Secretary is Mr Mark Waller

G. REGISTERED OFFICE

The registered office of Empired Ltd is:

Level 13, Septimus Roe Square
256 Adelaide Terrace
Perth WA 6000
Telephone +61 8 9223 1234

H. OTHER OFFICES

The other offices are:

Level 5
257 Collins Street
Melbourne VIC 3000
Telephone + 61 3 8610 0700

Level 4
110 Williams Street
Perth WA 6000
Telephone + 61 8 9223 1234

Level 9, 288 Edward Street
Brisbane, QLD 4000
Telephone +617 3831 3883

Greg Leach
Chief Technology Officer

OTHER INFORMATION FOR SHAREHOLDERS

SHARE REGISTRY ENQUIRIES

Shareholders who wish to approach the Company on any
matter related to their shareholding should contact the
Computershare Investor Centre in Melbourne:

The Registrar
Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Terrace
Perth WA 6000
Telephone +61 8 9323 2000
Facsimile +61 8 9323 2033

Website www-au.computershare.com/investor

ANNUAL GENERAL MEETING

The 2013 Annual General Meeting of Empired Limited will
be held in the:

The Melbourne Hotel
942 Hay Street, Perth WA 6000
at 10am on Friday, 22 November 2013

Formal notice of the meeting will be circulated to
shareholders separate to this report.

STOCK EXCHANGE LISTING

Empired Limited shares are listed on the Australian Stock
Exchange

. The home exchange is Perth.

(ASX:EPD)

All shares are recorded on the principal share register of
Empired Limited, held by Computershare Investor
Services Pty Limited at the following street address:

Computershare Investor Services Pty Ltd
Level 2, 45 St Georges Terrace
Perth WA

In accordance with Listing Rule 4.10 of the Australian
Stock Exchange Limited, the Directors provide the
following information not elsewhere disclosed in this
report.

SHAREHOLDER COMMUNICATIONS

The Board of Directors aims to ensure that shareholders
are informed of all major developments affecting the
Company's state of affairs. Information is communicated
to shareholder as follows:

– The annual report is distributed to shareholders who elect
to receive the document. A copy of the full annual report is
available free of charge, upon request, from the Company.
The Board ensures that the annual report includes relevant
information about the operation of the Company during
the year, changes in the state of affairs of the Company and
details of future developments, in addition to the other
disclosures required by the Corporations Act;

– The half-year report contains summarised ﬁnancial
information and a review of the operations of the
Company during the period. The half-year ﬁnancial
report is prepared in accordance with the requirements of
Accounting Standards and the Corporations Act, and is
lodged with the Australian Securities and Investments
Commission and the Australian Stock Exchange; and

www.empired.com

is
The Company's internet website at
–
regularly updated and provides details of recent material
announcements by the Company to the stock exchange,
annual reports and general information on the Company
and its business. The Board encourages full participation of
shareholders at the Annual General Meeting to ensure a
high level of accountability and identiﬁcation with the
Company's strategy and goals. Important issues are
presented to the shareholders as single resolutions.

INTERNET ACCESS TO INFORMATION

Empired maintains a comprehensive Investor Relations
section on its website at
www.empired.com/Investors/

You can also access comprehensive information about
security holdings at the Computershare Investor Centre at
www-au.computershare.com/investor/

By registering with Computershare's free Investor Centre
service you can enjoy direct access to a range of functions
to manage your personal investment details. You can create
and manage your own portfolio of investments, check your
security holding details, display the current value of your
holdings and amend your details online.

Changes to your shareholder details, such as a change of
name or address, or notiﬁcation of your tax ﬁle number or
direct credit of dividend advice can be made by printing out
the forms you need, ﬁlling them in and sending the changes
back to the Computershare Investor Centre.

Ajesh Raithatha
Financial Controller

PERTH
Level 13, Septimus Roe Square
256 Adelaide Terrace
PERTH WA 6000
Telephone No: +618 9223 1234
Fax No: +618 9223 1230

MELBOURNE
Level 5, Collins Street,
MELBOURNE VIC 3000
Telephone No: +613 8610 0700
Fax No: +613 8610 0701