Infomedia
Annual Report 2001

Plain-text annual report

I n f o m e d a i L t d 2 0 0 1 a n n u a l r e p o r t TM Ltd ABN 63 003 326 243 ABN 63 003 326 243 2001 annual report contents 1 2 4 6 12 32 35 36 40 63 64 65 Chairman’s Letter Results at a Glance Introduction Orientation Achievements - FY2001 Outlook - FY2002 FY2001 Audited Accounts Directors’ Report Financial Statements Audit Report Additional Information Corporate Directory Nimbus, a circle of light or radiance © 2001 Infomedia Ltd. All rights reserved worldwide. This document may not be reproduced in whole or in part without the express written permission of Infomedia Ltd. chairman’s letter 1st October 2001 Dear Shareholder, It is with pride that I present to you the 2001 Annual Report of Infomedia Ltd. In preparing this document, management has strived to provide a record of your Company's performance during the 2001 financial year, an insight into the work of the Company and an outlook for the year ahead. Through the following pages, I trust you will gain a better understanding of your Company - Infomedia Ltd. In the course of FY2001, Infomedia again achieved high double-digit revenue and after-tax profit growth. Company revenue increased 66.5% over FY2000 to $36.1 million. Net profit after tax increased 67.4% over the previous financial year to $12.8 million. Our electronic parts catalogue business grew 25% from 24,057 subscriptions to 30,201. In the audited accounts section, you can review in greater detail the financial performance of your Company. I view FY2001 as a formative year of growth, transformation and preparedness. Perhaps the most public event of the year was the Initial Public Offering in August. The IPO was received well by many investors and analysts who appreciated the good fundamentals of the Company and management. Throughout the year, it was business as usual for the core products. Six new data licences were signed for our Microcat® and Partfinder® electronic parts catalogues - the majority being in the international arena. Application and systems development continued on our Internet electronic parts catalogue (EPC) products making them arguably the most advanced and workable yet released. During the course of the year, our Data Management Division, Datateck Publishing Pty Ltd, smoothly integrated into the whole organisation and business culture. Division management established new contracts for its products and services. Finally, our acquisition of the business of On-line Computing Pty Ltd in December went smoothly. Division management there has commenced an exciting new development project that it believes will set a new and higher standard of performance and functionality for critical automotive dealer management systems. In the year ahead, we will continue to focus on commercialising our products and brand asset portfolios. The context for commercialisation will be the convergence of our technologies into automotive dealerships, both in co-operation with other IT providers and independently. We will see the maturing of our Application Service Provider (ASP) products and infrastructure. This ASP approach will allow the Company to provide its products as an 'information utility' to dealerships. The benefits to dealerships of this modern computing approach are clear, tangible and meaningful. By doing convergence groundwork now, we are establishing a sound platform for Company longevity and shareholder returns. In closing, let me invite you to consider the words "your Company" as a very genuine sentiment. Let me invite you to hold Infomedia not just as an investment, but also as a stand for excellence. Finally, let me invite you to care for Infomedia's success and engage in its achievement. On behalf of the Board of Directors, management and staff, I commend this Annual Report to you. Respectfully Yours, Richard David Graham Chairman and CEO www.infomedia.com.au 1 results at a glance $'000 110 99 88 77 66 55 44 33 22 11 0 $'000 2 www.infomedia.com.au Company revenue increased 66.5% over FY2000 to $36.1 million. Net profit after tax increased 67.4% over the previous financial year to $12.8 million. Both results represent the largest per annum dollar growth ever. HIGHEST ANNUAL RESULTS EVER Six new long-term data licences were signed for the Microcat and Partfinder electronic parts catalogues (EPC). All were in the international arena with special emphasis on Asia. SIX NEW DATA LICENCES New licensors included automakers Daewoo Australia, Ford Asia Pacific, General Motors Asia Pacific, Hyundai worldwide, TH!NK worldwide, plus whitegoods maker Electrolux in New Zealand. NEW LICENSORS Infomedia EPC product subscriptions grew by 25%, from 24,057 at the opening of the year, to 30,201 at the close of it. Data Management Division secured agreements with Holden, Hyundai and Toyota to provide various cataloguing and service products. ADMIRABLE SUBSCRIPTION GROWTH CONTENT MANAGEMENT AND DEVELOPMENT The business of On-line Computing Pty Ltd was acquired to provide an IT platform for the convergence of 'islands of technology' in Australasian automotive dealerships. Work commenced on a new generation DMS. STRATEGIC LONG-TERM PREPARATION The Systems department commenced infrastructure improvements to support the new Internet versions - Microcat FRESH™ and Microcat LIVE™. Early marketing activities began in the USA at NADA. INTERNET STRENGTH AND READINESS The 2001 edition of the Datateck® Lubrication & Tune-up Guide™ was published with paid advertising included for the first time in 39 years. Eight advertisers took out 29 different advertisements. NEW REVENUE FROM OLD ASSETS The Company organised into three functional divisions: Electronic Catalogues, Data Management and Online Business Systems. Divisional General Managers have profit and loss responsibilities. P & L ORIENTED BUSINESS DIVISIONS Senior management roles were expanded to increase the depth of management. New premises at Narrabeen (Sydney) and renovation of our Melbourne facilities cater for greater productivity and staffing numbers. MANAGEMENT AND PRODUCTIVITY GROWTH www.infomedia.com.au 3 introduction “Six new long-term data licences were signed, in the international arena, including Hyundai worldwide.” 4 www.infomedia.com.au This Annual Report will stand as the official record of your Company's achievements during the 2001 financial year. For new shareholders, we have reiterated in this introductory section some of the general background information about the Company to aid better understanding and analysis. We trust you will agree that the achievements set out in this report are those which contribute to the building of a successful public company - a company built to last. In the following pages, you will learn about the work, the achievements and near-term plans of the Company, its management and its staff. The sentiment of the 2001 financial year could best be expressed in the words GROWTH THROUGH PREPARATION. As a company seeking to maintain high growth, we have continued to build upon our product assets through acquisition and new product development. In identifying acquisition or product development initiatives, we seek clear product synergies with our core products and clear commercial leverage with our three areas of automotive business convergence - electronic productivity tools, data research and creation, and business management systems. We are very proud of our current products and our global market position; however, success stands still for no company. Times are changing, business is changing and technology is changing. You will see in the narrative and the financial sections of this report that your Company is making meaningful research and development investments to ensure the establishment of a sound product platform for Company longevity and shareholder returns. It is intended that the following pages will give you a strong sense of the ability, commitment and determination that the management and staff of Infomedia have, which are shown through their achievements. WELCOME TO THE 2001 ANNUAL REPORT OF INFOMEDIA LTD www.infomedia.com.au 5 orientation “Times are changing, business is changing, technology is changing. The Company’s new DMS will be an agent of change.” 6 www.infomedia.com.au Infomedia Ltd is an international business software and content development company that specialises in servicing the automotive trade worldwide. It is a global leader in the field of electronic parts catalogues (EPC) for the automotive industry. Infomedia's EPC products, Microcat and Partfinder, enable dealership sales and service personnel, as well as their customers, to swiftly and accurately determine the correct replacement parts for vehicles. With headquarters in Sydney Australia, Infomedia's impact in the automotive industry is felt in more than 100 countries and 22 languages around the world every month. The Automotive Industry The US$1 trillion per annum automotive industry is one of the largest global markets for EPC. It is serviced by a relatively small number of EPC suppliers. Producing an EPC in the automotive industry requires the co- operation of the vehicle manufacturers. They own the original data and licence its use to EPC suppliers. Infomedia has developed and maintained excellent relationships with its data licensors. The needs of automotive dealers drive the demand for EPC. After-sales service and repairs provide a significant proportion of an automotive dealer's income and profitability. Microcat and Partfinder provide a higher level of precision and are faster to use than paper or microfiche based catalogues. Dealers are able to identify the right replacement part the first time with a minimum of fuss. Industry developments, such as built-to-order vehicles, will increase the need for EPC as vehicle complexity increases. The Company Infomedia commenced business in January 1988 as Infomagic Australia Pty Limited, importing and distributing software and peripherals. However, management sought long-term success in the development and marketing of the Company's own products. Consequently, Infomedia acquired the complete intellectual property rights to an automotive EPC project called MicroCat in 1991 and after substantial development, launched it in Australia the following year. In October 1994, the Company sold its importation and distribution business and the Infomagic name and relaunched itself as Infomedia Australia Pty Limited. The business focused on further marketing and development of Microcat. July 1997 saw Microcat launched internationally when Ford Europe exclusively licenced its parts catalogues data to Infomedia for it to produce a multilingual version of Microcat for Ford Europe dealers. In 1999, Ford operations in Canada, Japan, Mexico and the USA granted Infomedia distribution or licensing rights to expand Microcat into these countries. In March 2000, Infomedia acquired Melbourne based Datateck Publishing Pty Ltd. Datateck owns the EPC, Partfinder, and a range of other complementary products such as printed and online oil and lubrication publications used by leading oil companies, petroleum product agents and consumers. Datateck also provides a variety of other data analysis and cataloguing services to the automotive industry. Infomedia's competitive advantage is partly a result of the business model that has been structured with the result that many labour and capital-intensive functions are undertaken with alliance partners, distributors or service agents. Sales, duplication and distribution of CD/DVD-ROMs and help desk services are some of the specific functions that are outsourced, thus reducing the engagement of capital and managerial resources required by Infomedia. Another important element of Infomedia's competitive advantage is the level of product value for customers, which is based on providing EPC for a reasonable monthly subscription price, without tying them to a long-term contract. The quality, affordability and user-friendly nature of our products mean that dealers rarely terminate their subscription. Importantly, a majority of Infomedia's monthly subscriptions are invoiced directly to vehicle manufacturers or their national distributors. As such, rather than receiving more that 30,000 individual subscription fees every month, Infomedia collects monthly payments from a small number of major companies. www.infomedia.com.au 7 orientation Functional Divisions During this financial year, the Company organised into three functional divisions and a central services group. The divisions were generally established along the lines of product expertise and locality. A staff of 19, from the Company's headquarters, provided central services for all divisions. These include Human Resources, Finance, Legal and Enterprise Systems. Electronic Catalogues Division Infomedia's core business today involves the production of the Microcat and Partfinder electronic parts catalogues. These systems are specialised business tools designed to make the selection and sale of replacement parts fast, easy and accurate. This division is based in Sydney. Its 45 staff include software developers, illustration analysts, data co- ordinators, international sales and marketing specialists, and production experts. General Manager, Gary Martin, who joined the Company in 1998, leads the division. Over the years, the division has become world renowned for its intuitive product design, feature innovations and delivery reliability. Its team has won several commerce and quality awards. Data Management Division Infomedia's Data Management Division provides a range of specialised data analysis and research services primarily to the automotive industry. These include a number of products and services to the automotive field such as, the Datateck Lubrication & Tune-up Guide, Holden Service Information Package, oil industry reference publications, original illustrations, and OE catalogue department outsourcing. This division is based in Melbourne. Its 29 staff includes software developers, data researchers and analysts, illustrators, business developers, product managers, and manufacturing/production experts. General Manager, Andrew Pattinson, who joined Infomedia in 1988, leads the division. It has an excellent reputation for handling vital and confidential cataloguing and service documentation for Australian automakers and the defence force. The dedicated team of analysts and illustrators have the experience and knowledge to support short- term special projects or take over an automaker's entire cataloguing activity. Online Business Systems Division The Company's newest division, Online Business Systems, the development of business management and accounting systems, electronic automotive trading networks and system integration for retail automotive dealerships. specialises in 8 www.infomedia.com.au Development for the division is based in Perth, while Sales & Marketing is housed in Sydney. The staff of 28 includes programmers, systems analysts, network specialists, and internal and field customer liaisons. General Manager, Michael Connor, who joined the Company in 2000, leads the division. The division specialises in, and provides the business software technology to, many of Australia's largest dealership enterprises including City Ford Sydney, Ford Retail Joint Venture in Perth, Kloster Group in Newcastle, Metro Group in Brisbane and Reg Hunt Group in Melbourne. Although specialising in large enterprises, the division's new time-share or Application Service Provider (ASP) approach brings its powerful systems easily within the reach of smaller dealerships too. The division's AuzCom™ network facilitates Internet used-car sales, dealer to automaker communications, dealer Internet access, secure transactions and remote maintenance for dealers across Australia. Flagship Product Infomedia's flagship product is the Microcat electronic parts selling system for the automotive industry. While Microcat is generally defined as an electronic parts catalogue, it is actually much more transaction oriented than the typical EPC. Microcat is a specialised business tool designed to make the selection and sale of replacement parts quick, easy and accurate. At the heart of Infomedia's products is a sophisticated parts analysis program. Microcat delivers information in a variety of user-friendly ways that have been developed with input from both vehicle manufacturers and dealership personnel. Infomedia's various EPC systems can operate on both local area networks or in stand-alone environments. They are currently provided on CD/DVD-ROM, either on a monthly or quarterly basis, and are designed to operate on Windows PC platforms. Each edition is easy to install and can be integrated with most of the leading dealer management systems. Microcat transfers its order-lists directly into the dealer's accounting system. This integration helps dealers to manage their inventory, order-entry process and debtors. To protect the Company's intellectual property from unauthorised use, Microcat employs a physical security device known as a 'dongle'. Each dongle has an individual serial number and is programmed by Infomedia to allow a user to install and operate a specific version of the Microcat system. It is difficult for dongle security to be thwarted because the device is a physical piece of hardware and not practical to replicate. These dongles are not sold to the subscribers. They remain the property of the Company and must be returned in the event of a subscription cancellation. If lost or stolen, the dongle is deactivated from accessing future releases of the system. Convergence Products Automotive dealerships around the world are unwittingly becoming information processing centres, overwhelmed with islands of information technology. In today's modern dealership, there are computer systems for accounting, service diagnostics, service manuals, warranty claiming, credit processing, office productivity applications, lead tracking, customer relationship management, Internet website, email and of course EPC. Each tends to stand alone. Each year, the IT budget increases, the system and telecommunication infrastructure expands and then later needs replacement. All the while, the traditional dealer principal feels anxious as their grasp on managing the business becomes dependent on computer gurus. It is the recognition of this condition that has led Infomedia management to realise that convergence of the many different IT specialities must occur in order to allow dealerships to make an orderly retreat from the digital complexities, but not from the digital benefits. The way that IT is delivered into dealerships is analogous to them running their own electricity generators to use lighting or digging wells to get a drink of water. They simply want the end result, not the production infrastructure. The acquisition last year of Datateck Publishing Pty Ltd and the business of On-line Computing Pty Ltd were strategic in the medium-term implementation of a platform for IT convergence for automotive dealerships. www.infomedia.com.au 9 orientation REVOLUTIONARY “The acquisition of Datateck and On-line were strategic in the implementation of a platform for IT convergence.” With the acquisition of the On-line business, the Company acquired one of the leading dealer With the acquisition of the On-line business, the Company acquired one of the leading dealer management systems (DMS) in Australia, and arguably, from a technical perspective, in the world. That system management systems (DMS) in Australia, and arguably, from a technical perspective, in the world. That system known as OLGA™ (Online General Accounting) is a mature high performance time-share system, whose great known as OLGA™ (Online General Accounting) is a mature high performance time-share system, whose great elasticity allows it to perform fluidly in some of the world's largest automotive dealerships, as well as some of elasticity allows it to perform fluidly in some of the world's largest automotive dealerships, as well as some of the smallest. the smallest. The acquisition of Datateck Publishing brought to the Company a team of high quality data analysts, The acquisition of Datateck Publishing brought to the Company a team of high quality data analysts, information products and tools that can be instrumental in re-engineering and managing disparate data information products and tools that can be instrumental in re-engineering and managing disparate data elements into more logical and centrally accessible formats. These digital elements of content are well suited to elements into more logical and centrally accessible formats. These digital elements of content are well suited to being published from a single point of IT convergence. being published from a single point of IT convergence. Together with our EPC assets and know-how, the Company has commenced a product development Together with our EPC assets and know-how, the Company has commenced a product development initiative to bring together our DMS and data management products into a single point of IT convergence initiative to bring together our DMS and data management products into a single point of IT convergence within the dealership, and provide that as a high power information utility or ASP service, either in co- within the dealership, and provide that as a high power information utility or ASP service, either in co- operation with other IT providers or independently. Management believes the Company’s new DMS will be a operation with other IT providers or independently. Management believes the Company’s new DMS will be a positive agent of change for automotive dealers. positive agent of change for automotive dealers. 10 www.infomedia.com.au Talent, Culture and Values Youth, strength, experience and commitment combined with seasoned business savvy and a strong corporate culture is what makes the Infomedia team so successful. The Company is organised into three divisions and a central services group. Each division is responsible for its own research, development, fabrication, sales and profit targets. Together, they share Executive, Finance, Human Resources, Legal, and Enterprise Systems. The nature of Infomedia's raw material resources is creative talent in the form of programmers, graphic artists, data analysts, production specialists, sales and marketing professionals, and executives. Staff and management are encouraged to be innovative, imaginative, analytical, action-oriented and communicative. These qualities address the core of our corporate culture. Personnel use this environment of creativity to invent the products and carry out the processes of the business with skill, enthusiasm and commitment. As a talent based organisation, Infomedia has built the enterprise on four basic tenets - product innovation, transaction simplicity, retention of revenue streams and personal integrity. The Company is committed to the pro-active development of young minds. To give expression to this commitment, the Company operates special development programs for younger people. At the end of FY2001, these programs had seven participants. Three of the Company's management staff have successfully emerged from such programs. Infomedia also has a scholarship program that encourages all staff to improve their skills and credentials. In the last financial year, more than half the staff availed themselves of this opportunity. Staff took up training opportunities in programming, personal development, management skills and office productivity. Infomedia has established an Employee Share Plan for full-time staff who have been with the Company one year or more. This year, 90% of staff members received grants of shares through their participation in the Plan. www.infomedia.com.au 11 achievements - fy2001 “Youth, commitment, business savvy and a strong corporate culture make Infomedia successful.” 12 www.infomedia.com.au Executive The charter of the Executive team is to establish and maintain an environment conducive to achieving the goals established for the Company by the Board of Directors. The team is responsible for empowering senior management with knowledge, strategic direction and resources to be able to achieve their divisions' optimum contribution to these goals. Throughout the year, the Executive led by Richard Graham CEO, had a dual focus. The first was to settle the Company into its new public responsibilities and persona. The second was to support the growth objectives of the Company in the near and longer terms. Product promotion and senior liaison activities took place on five continents. Acquisition and new product development work will transition into growth opportunities for FY2003 and beyond. The predominant achievements of the Executive team in FY2001 were: Facilitating senior management according to above charter (cid:1) Corporate governance and market activities (cid:1) Acquisition planning and negotiation International product promotion (cid:1) Corporate financial planning (cid:1) New product development Senior-level client liaison Initial Public Offering Development of the Executive team progressed well. The divisional general managers and senior managers of Human Resources, Finance, Legal, and Enterprise Systems grew in strength, adeptness and cohesion. Richard Graham joins European Microcat manager, Catherine Bolt, for the preview of the new Internet versions at NADA. www.infomedia.com.au 13 (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) achievements - fy2001 “New CFO Peter Adams was handed the lead from retiring Chief Accountant, John Peterson.” 14 www.infomedia.com.au Finance The Finance department secures, administers and develops the financial resources of the Company and is responsible for accounting, treasury and tax. the department expanded to meet the During the financial year, obligations and requirements of public company accounting and to handle the greater volume of work, which was a result of the March and December 2000 acquisitions. During the first half of the year, the department, led by John Peterson, Chief Accountant, met all its milestones and deadlines. In addition to the these normal accounting and statutory functions of the Company, milestones included the first annual audit and report as a public company. In the second half of the year, new CFO, Peter Adams, was handed the lead. The Finance department commenced and completed the integration of accounting activities for all three divisions under one roof. They also managed the preparation, review and approval of the FY2002 budget and the financial models of various acquisitions considered. The Finance team did a fine job handling the expanding daily workload of the business, as well as the many important special analytical, process and productivity improvement projects. Qtr.1 Qtr.2 Qtr.3 Qtr.4 A Distinguished Career After the close of the financial year, the Company said farewell to a dedicated and valued member of the team, when Chief Accountant, John Peterson, retired. John joined the Company in 1989 and was instrumental in maintaining sound accounting practices and audit procedures for the Company. As the Company grew, he guided the accounting procedures required to support a global enterprise. His humour and 'donut days' were always enjoyed too. All of us at the Company wish him happiness, good health and prosperity in his retirement. Thank you John, for your integrity, support and dedication to the Company over the years. www.infomedia.com.au 15 achievements - fy2001 “Acquisition analysis is one of the important roles performed by the Legal & Security team.” 16 www.infomedia.com.au Legal & Security The Legal & Security department develops, secures and administers the Company's contractual relationships as well as all aspects of its intellectual and physical property. The department is responsible for managing compliance with the Company's contractual and legislative obligations. Nick Georges, General Counsel and Company Secretary, leads the Legal & Security department. This year, the department dealt with a broad scope of initiatives including data licence negotiations, trademark and domain names protection, litigation management, real-estate portfolio management, employee share plans, acquisition analysis and negotiation, immigration sponsorship and of course IPO and ongoing Company compliance requirements. Acquiring worldwide trademarks is a vital function of this department because it helps to safeguard the Company's brands and protects customers from inadvertently purchasing or accessing inferior products from unauthorised sources. During the first quarter of the year, the department focused on the creation of new policies underpinned by legislation and regulations required to meet Infomedia's status as a public company. Acquisition of the business of On-line Computing Pty Ltd, and its subsequent integration into Infomedia Ltd, was the major responsibility for the Legal & Security department during the second quarter of the year. The smooth assimilation of the business was necessary to ensure uninterrupted service to On-line customers. During the second half of the year, the department negotiated and secured a number of new data licence and outsourcing agreements including Electrolux, Ford, General Motors, Hyundai, Land Rover and Toyota. In order to accommodate the substantial increase in staff numbers over the year and for anticipated 2003 growth, the department also secured additional real estate for Infomedia's business campus in Sydney. Qtr.1 Qtr.2 Qtr.3 Qtr.4 www.infomedia.com.au 17 achievements - fy2001 “From HR’s new induction program, new employees appreciate how their role fits into the Company.” 18 www.infomedia.com.au Human Resources The Human Resources department is responsible for ensuring the most effective utilisation of the organisation's staff resources. This is achieved by developing appropriate policies with respect to recruitment and selection, employee relations, remuneration management, training and staff well-being. Infomedia experienced rapid personnel growth during the financial year from new positions created to handle the Company's increasing business and through business acquisition. HR, led by Linda Scott, worked with divisional management to develop reporting structures to match the Company's growing workforce The HR team met with management and staff from all divisions, encouraging open communication regarding HR matters and to nurture common Company values and market philosophies. Through the IPO and Employee Share Plan, Infomedia supports direct ownership of the Company by all permanent employees, giving them a personal interest in its success. More than 75% of staff participate in the Company as direct shareholders. As shareholders in the Company, staff strive to provide domestic and international customers with the best possible products and the highest level of quality and service. Feedback provided by new recruits cites the Employee Share Plan as a significant factor in their decision to join Infomedia. To help new staff gain an overall understanding of the Infomedia business, HR launched a new induction program in March. The program enables new staff members to meet with managers from all areas of the business and gain an insight into the functions and responsibilities of each division. New employees appreciate how their role fits into the Company structure. Infomedia's annual 'kick off' day took place in January. This event provided an opportunity for staff from Melbourne, Perth and Sydney to come together, discuss and align with the Company vision and goals for the year and develop a strong team spirit. The sharing of ideas in a fun and relaxed atmosphere helps to create a motivated and dedicated team that is happy to go the extra mile for the Company's customers. Throughout the year, the HR team supported the process of immigration for new staff wanting to make Australia their home. In addition, the Education Scholarship Program continued for a fourth year, providing all employees with funding for their further career development. www.infomedia.com.au 19 achievements - fy2001 “Our distributors and agents focus on building our business in Europe, North America and Asia.” 20 www.infomedia.com.au Sales & Marketing The Sales & Marketing departments manage the successful and profitable commercialisation of the Company's intellectual property, products and services. The departments are responsible for developing, implementing and monitoring sales and marketing activities around the world. ELECTRONIC CATALOGUES Throughout the year, the Electronic Catalogue Division's Sales & Marketing teams, led by Gary Martin and Bruce Rayment respectively, focused with our distributors on building growth and permanence to our business in Europe, North America and Asia. Q1 commenced with a workshop, near Sydney, for data licensors from North America, Europe and Asia. It provided a forum to preview and discuss Infomedia's Internet EPC strategy, which was received well by the participants. Beginning in Q2, several promotional activities were implemented in North America to grow Microcat subscriptions. These included a successful seminar and direct mail campaign targeted at prospective Microcat users who were using competitive EPC products. The campaigns emphasised Microcat's excellent functionality and the system's ability to increase dealer productivity and profitability. Throughout the year, the departments were involved in negotiations with potential data licensors to produce new versions of Microcat. The work led to data licence agreements being awarded during the financial year from Daewoo (Australia), Ford (Asia Pacific), General Motors (Asia Pacific), Hyundai (worldwide) and TH!NK (worldwide). Land Rover awarded the Company a global data licence shortly after the year-end close. Early in Q3 the teams released Microcat for Daewoo in Australia. Take-up was nearly 100% of Daewoo dealers in the first month. At the same time, the new Internet products, Microcat FRESH and Microcat LIVE, were demonstrated for the first time at the National Automobile Dealers Association convention in Las Vegas. The demonstrations were of great interest to both customers and competitors. During the last quarter, the teams were closely focused on preparing for the European launch of Microcat for Hyundai. This involved the design and production of multilingual product literature, presentation of distributor seminars and the securing of initial orders from the Hyundai dealer network. Qtr.1 Qtr.2 Qtr.3 Qtr.4 www.infomedia.com.au 21 achievements - fy2001 DATA MANAGEMENT Throughout the year, the Data Management Division's team worked with local vehicle makers to support their cataloguing and service publication needs with the division's extensive experience in data management and technical illustration. As a result, the division was awarded outsourcing agreements with Holden Australia, Hyundai Australia and Toyota Australia. In Q2, the 39th edition of the Datateck Lubrication & Tune-up Guide was released to the automotive trade. The publication boasted a new look and larger circulation. For the first time, the Guide offered subscribers regular updates via the Internet. Advertising was also introduced to the Guide to help maintain a modest cover price and add a new dimension to its content for automotive technicians. The launch was supported by a print media and direct mail campaign titled 'Your Essential Reference Tool'. In Q3, the first international version of Partfinder for Holden Commodore was exported to Holden dealers in the Middle East, South America and Africa. The division exhibited at the Australian Automotive Trade Fair where on the Infomedia stand visitors browsed through the Datateck Lubrication & Tune-up Guide. The exhibition also provided an opportunity to gather market comments regarding Partfinder IMT ™, an electronic parts catalogue specifically designed to meet the needs of Australian smash repairers and workshop technicians. Feedback on the products was encouraging and many customers ordered copies of the Guide. During the fourth quarter, Partfinder for Electrolux Home Products was released to whitegoods parts distributors and service agents across New Zealand. Partfinder-Quiktrak® II, as it is known, enables distributors and service agents to quickly and easily identify the correct parts required for appliance repair, and provide their customers with accurate repair quotes. Distributors and service agents in Australia also received an upgraded version of Partfinder-Quiktrak II. Subscriptions approached the 1,000-unit milestone by the end of the financial year. Qtr.1 Qtr.2 Qtr.3 Qtr.4 22 www.infomedia.com.au ONLINE BUSINESS SYSTEMS Since becoming part of Infomedia in December, the Online Business Systems Division customer liaison teams have focused on smoothing its operational transition for existing customers and simplifying the commercial model to be offered in their new go-to-market strategy. Led by General Manager, Michael Connor, the division worked towards the expansion of its customer base in Australia and opening up channels to expand into the Asia Pacific region. To help support this growth, the division strengthened its network and operational facilities and established new customer service procedures. Division management also recognised the need to establish an overall sales and marketing strategy to get our On-line ownership recognised by Australian dealers. Marketing collateral and position papers were put together, which were used in customer visits and presentations. A direct mail campaign was launched to begin to get Infomedia recognised as a leading supplier of DMS and related services. the division analysed potential During the last half of the year, modifications to its traditional business model. Division management concluded to provide customers with a new acquisition choice. That choice allows customers to now subscribe to either of our dealer management systems via cost effective time-sharing (or as it is currently known, ASP). This allows dealers to effectively run their dealership's DMS and other applications, without the upfront costs of purchasing servers and software licences. This new commercial approach also provides dealership managers with greater budget certainty by eliminating the ongoing separate costs for upgrades, help desk, maintenance, security and specialist staff. Previously, customers' predominate choice was to purchase outright the division's DMS hardware and software, and set up an internal systems infrastructure of their own. In Q4, the Australian Automobile Dealers Association convention provided an opportunity for dealers around Australia to preview an alpha version of AutoLedgers being developed by the division. AutoLedgers opened the eyes of many dealers. They could see how convergence of the different 'islands of technology' operating within their dealerships could coalesce into a new generation DMS, saving them money and management headache. The Sales & Marketing team closed FY2001 preparing a product launch plan for AutoLedgers' spring debut. Each department of the division got focused on its own set of objectives to support the emergence of AutoLedgers, the Company's next generation dealer management system, into regional prominence. Qtr.3 Qtr.4 www.infomedia.com.au 23 achievements - fy2001 “The team implemented management procedures to handle increased workloads and ensure delivery.” 24 www.infomedia.com.au Development The Development departments of the divisions create and maintain the Company's software products, software manufacturing tools, image processing tools and software data. The departments are also responsible for the warehousing of client data and the pre-processing of the data for product assembly. During the 2001 financial year, the Development departments experienced a significant increase in activity. Each division had product enhancement activities to keep Infomedia's products in the competitive lead. They also worked intensely on new product creation for the emerging online era of business. The Electronic Catalogues Division's development team implemented several new product management procedures to handle the increased workloads and ensure the delivery of high quality products on time. A new data-object tracking facility was introduced to monitor the flow of data through the department's processing steps, thus helping to better support new launch activities. In Melbourne, the development team, led by Rosie Chatfield was engaged in inventing the technical model upon which Partfinder IMT would sit. It then carried on with full prototype implementation of the nation's first EPC for automotive mechanical trades, which utilises genuine automaker data and illustrations. The Sydney Applications and Data Centre teams, led respectively by Justin Sher and Simon Forwood, provided the Company with four new versions of Microcat early in the new calendar year: a full production version of Microcat for Daewoo Australia, and pilot versions for Ford Asia Pacific, General Motors Asia Pacific and Hyundai worldwide. The teams also broke new ground with their creation of Microcat in several new Asian languages including Chinese, Thai and Vietnamese. The Melbourne division's programmers and analysts developed a new genre of product called SIP (Service Information Package) for Holden Australia and Toyota. Other members of the team created the New Zealand version of Partfinder-Quiktrak II for the whitegoods manufacturer Electrolux and also a comprehensive service manual for the Mercedes medium recovery vehicle used by the Australian Defence Force. Development commenced in Q3 to create the next generation dealer management system, AutoLedgers. Our Perth development team created a specification to fast track this initiative by extensively utilising our existing backend code assets and cross-pollinating development with the Company's two other development centres in Sydney and Melbourne. This lateral approach produced, in just four months, an alpha version of the new system that was demonstrated at the AADA convention in June. Throughout the year, work progressed by our Communications team, led by Luke Thompson, on the development of Microcat FRESH and Microcat LIVE. These are significant initiatives involving the creation of new servers, client applications, production processes, online administrative tools and telecomputing infrastructure. www.infomedia.com.au 25 achievements - fy2001 “Our Help Desk “Our Help Desk agents assist agents assist customers by giving customers by giving a helping hand a helping hand and friendly advice and friendly advice whenever it is whenever it is called for.” called for.” 26 www.infomedia.com.au Production & Operations The Production & Operations departments manage the product assembly, process control, manufacturing and distribution processes that reliably manufacture and deliver the Company's products around the world each month. The Sydney and Melbourne teams, led by Michael Foster and Mike Roach respectively, now produce 26 separate versions of Microcat and Partfinder on more than 60,000 CD/DVD-ROMs each month. Their teams also create additional industry information tools such as OEM Pricing and SIP publications on CD-ROM as well as oil and service publications in paper, CD-ROM and online versions. Their graphic artists also create thousands of original technical illustrations. Illustration Analyst staff processed tens of thousands of illustrations this year in support of new product releases for Daewoo, Ford, General Motors, Holden, Hyundai, TH!NK and Toyota. Throughout the year, all the teams worked on the Internet release of Microcat FRESH. By Q4, the Production team finalised a pilot CD for European Hyundai dealers. A pilot CD enables dealerships to trial the EPC system to experience first- hand how the new product can increase their productivity, before making the decision to subscribe. Two teams, Training and Multimedia, were incorporated into Sydney Productions & Operations, during the year. The Training team is responsible for educational support material for the Company's products; training manuals; interactive educational products; and help files. The Multimedia team is responsible for creating the graphics, audio and video images incorporated into many of Infomedia's products. Projects during the year included training videos for Microcat 1-2-3®, as well as an interactive sample Microcat CD for Ford North American dealers. Both teams produced multilingual educational material for each new product launched. Production staff also prepared for the launch of the Microcat CBT. This CD-ROM provides service personnel in dealerships across Europe with a range of interactive training modules to help them gain the maximum potential from the new Microcat Service enhancements. The Quality Assurance teams employ automated testing tools and methodologies. QA Manager, Tony Magnus, and his team validate that products meet their standards before release. The range of tests performed includes platform, regression and end-user. Only products of quality are despatched, enabling our customers to achieve optimum efficiency in their daily work. Important ambassadors to our customers are our Help Desk agents who handle customer enquiries and calls for support. Operating from nine centres around the world, the agents assist customers to maximise their productivity returns from our products by giving a helping hand and friendly advice whenever it is called for. www.infomedia.com.au 27 achievements - fy2001 “The 39th edition of the Datateck Lubrication & Tune-up Guide boasted a new look and updates via the Internet.” 28 www.infomedia.com.au New Product Portfolio During the year, the Company developed several new products across all divisions. Some of these are already generating revenue for the Company and others are still under development and will be launched in the coming year. Microcat® FRESH™ Microcat FRESH is a breakthrough in Internet EPC. Microcat FRESH uses HTML to deliver its data and graphics to users through standard dial-up Internet connections. For the first time, dealers can offer a self-serve method for key customers to purchase genuine parts from them, via the Internet. This special 3-Step implementation of Microcat allows automotive trade or fleet customers to quickly and easily select and order parts. All orders go to the dealer via email or directly into their DMS. Customers receive confirmation from the dealer electronically too. Both the dealer and customer make real productivity gains and time savings using FRESH. Partfinder - Quiktrak® II Partfinder - Quiktrak II is an EPC for whitegood repairers and distributors. It has made repair quoting and parts ordering faster and more accurate. Quiktrak II contains original Electrolux Home Products images, parts information and pricing. Brands include Chef, Dishlex, Email, Hoover, Kelvinator, Simpson and Westinghouse. Partfinder-Quiktrak II is seen by Electrolux Home Products as a key business tool in their parts and service operations. It allows its users to have access to parts information for over 15,000 models including cookers, dishwashers, dryers, fridges and washing machines, all of which until recently, were stored and distributed as paper manuals. Partfinder- Quiktrak II provides its users with a simple way of identifying, selecting and electronically transferring orders to their parts supplier. www.infomedia.com.au 29 achievements - fy2001 Microcat 1-2-3® Dealers have long wanted to provide Microcat directly to their key customers and with Microcat 1-2-3 they can. Microcat 1-2-3 is the first step that Infomedia has taken to support the European B2B channel. Microcat 1-2-3 is a new version of Microcat for the automotive trade to conduct self- serve parts interpretation. By following Microcat's simple three-step interpretation process, smash and mechanical workshops repairers easily interpret and order genuine parts electronically from their supplying dealer. The first version of Microcat 1-2- 3 contains genuine OEM parts data and is being used by trade customers of Ford dealers in the UK. Microcat Service The upgraded service functionality for Microcat was developed in FY2001 and takes Microcat to a new level of features and performance. Amongst the new features are: a service graphic index, a vehicle specific service price list, service menu pricing, flat rate pricing, and vehicle specific checklists. Infomedia works with OEMs and specialist service data providers to collate the necessary data to support these functions. This allows dealership service advisors to quickly quote a price for a service operation, such as replacing a radiator, at the press of a couple of buttons. The price includes the cost of labour, genuine parts and any associated fluids or environmental charges. Once a vehicle identification number or VIN is entered, Microcat automatically sets the model specifications, lists all applicable service and maintenance operations and prices all parts for that particular vehicle. 30 www.infomedia.com.au Microcat CBT The Microcat CBT is an interactive Computer- Based-Training product designed to enable dealership personnel to effectively use the new service functionality in Microcat. It comprises three high quality modules, taking the user from logging- on to the system, through to intermediate operations. The training guides users through how to: log-on, set up dealer details, identify a vehicle, use the service graphic index and send an order to the user's dealer management system. Users can complete the training topics and modules at their own pace, leaving and returning to topics at any time. AutoLedgers™ AutoLedgers will be the next generation in dealer management systems with its smart graphical user interface, real-time online delivery into dealerships and reduced total cost of ownership over traditional systems. AutoLedgers is the first collaboration between Infomedia's Online Business Systems Division and the Company's Sydney and Melbourne development teams. AutoLedgers is a sophisticated and innovative approach, which treats the DMS as an information utility. This means a dealer just 'plugs' their PC into a data socket and out comes their accounts, inventory, vehicle sales information and much more. We call this an 'information utility', because the applications just flow into the dealership the same way its electricity, telephone and water services do. Like those utilities, they can just pay for what they use. www.infomedia.com.au 31 outlook - fy2002 “The main platform for Infomedia’s growth strategy in FY2002 will continue to be its EPC products.” 32 www.infomedia.com.au Infomedia's growth outlook for FY2002 is strong. The Board has provided guidance that it expects revenue in the year to 30 June 2002 to be in the range of $49 million to $58 million. Similarly, profit after tax is forecast to grow and be in the range of $16 million to $19 million. Due to its recurrent revenue structure, the Company is on track to achieve substantial growth. The main platform for Infomedia's domestic and international growth strategy in FY2002 will continue to be its EPC and SIP products. The Company intends to increase its subscriber base by: launching new versions of Microcat for data licences entered into toward the end of the 2001 financial year; achieving deeper penetration of products in the existing customer base, especially in service departments; completing more vehicle manufacturer data licence agreements and producing new versions of Microcat and SIPs; completing agreements to allow Infomedia's licenced products to be used by non-franchised users such as fleets, insurance assessors and independent repairers; completing agreements to expand the presence of existing data licences into new territories; and (cid:1) marketing ancillary products directly to dealers in association with the Company's agents. Acquisitions The second platform for growth is through selective acquisitions, which can increase the breadth of Infomedia's data licence agreements, introduce new EPC, SIP or DMS subscribers, or provide core intellectual property and products. Infomedia expects that it will continue to acquire other organisations and intellectual property, both domestically and internationally, to complement its business. In making acquisitions, Infomedia will seek: intellectual property associated with new and enabling technologies: a) applicable to automotive business tools (products that will assist Infomedia to further serve its subscriber and distribution network) or b) extending Infomedia's product suite into new-targeted industries; data licence agreements not presently represented; and/or additional EPC, SIP or DMS product subscriber agreements. Leading the convergence of dealership information technology Automotive dealerships are great users of IT application solutions. Unfortunately, to date there has been little progress made to bring together the many diverse 'islands of information technology' that are provided by the many suppliers to dealerships. As a result, dealership IT costs and complexities are escalating. Help is needed in the form of a solution that brings all of these necessary applications to a single point of convergence. The Online Business Systems Division is developing such a point of convergence known as AutoLedgers. Throughout this 2002 financial year, this division, in conjunction with our Electronic Catalogues and Data Management divisions will be perfecting this product, which it is anticipated will assume a position of great responsibility and opportunity for dealers around Australia. While management anticipates AutoLedgers to be taken up by some dealerships during FY2002, it believes the contribution will become material in FY2003 and beyond. New industries for Microcat and Partfinder Although Infomedia developed its EPC products specifically for the automotive industry, the systems are equally relevant to any industry that manufactures or distributes merchandise which is defined by models, is repairable, has many replaceable parts and is supported by a significant number of decentralised repair outlets. While Infomedia is keenly focused on the global automotive industry, the Company also produces a whitegoods version of Partfinder for some Australian and New Zealand whitegoods manufactured and distributed by Electrolux Home Products. Infomedia will continue to develop this market towards its full potential in the years ahead. www.infomedia.com.au 33 (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) outlook - fy2002 A company built to last This next year will see continued growth in market share for Infomedia's key products of Microcat, Partfinder and the Online Dealer Management System. New products and services will be released as well. Traditional publishing projects and outsourcing engagements will augment the data management solutions offered on CD/DVD-ROM. Furthermore, the next generation of Infomedia products and services are in development. Some of these will be in the market in the coming year. While it is the Company's general policy to retain strict confidentiality about commercially sensitive product development information, it will provide shareholders non-sensitive updates about new developments in its intra-year reports and releases. As the Company makes acquisitions, it will do so in a way that builds upon our strengths, and represents good value for money. It is intended that acquisitions should add revenue, products and experienced personnel to the Company. It is expected that some acquisitions may require resources for them to reach greater potentials as an Infomedia initiative. Today, Infomedia views the Internet as an unregulated public utility that will, over time, mature into a reliable telecommunications facility for business. However, just like the telephone and facsimile, it will be the quality and effectiveness of the business applications traversing the facility that will win and keep customers, and not the mere existence of the facility. When Infomedia formally releases its EPC products and services via the Internet, they will be commercially effective, technically reliable and profitably implemented. Infomedia's listing last year on the ASX was a significant commitment toward the construction of a new Australian based information sciences company. The completion of Infomedia's first year as a public company is the beginning of the next phase of material business growth and product development. Infomedia's management team has been committed for more than a decade to create a company built to last the test of time and it remains, for you our shareholders, fully engaged in that commitment. 34 www.infomedia.com.au fy2001 audited accounts www.infomedia.com.au 35 directors’ report Your FY2001 Directors From left to right: Ian Joicey, Myer Herszberg, Fran Hernon, Richard Graham and Barry Ford. Your Directors submit their report for the year ended 30 June 2001. The names and details of the Directors of the Company in office during the financial year and until the date of this report are: Richard David Graham, Chairman and CEO Richard Graham has held senior management positions in the American and Australian computer industry since 1977. Mr Graham has been Managing Director of Infomedia since 1988. He commenced his technology career at ComputerLand Corp (USA) and ComputerLand Australia Pty Ltd, where he held the positions of Marketing Director and General Manager respectively. In 1982 he founded Wiser-Microsoft, Microsoft's first full service distributor in Australia. Barry Raymond Ford, Non-Executive Director (Chairman of Audit & Corporate Governance Committee) Barry Ford was appointed to the Infomedia Board of Directors on the 19 June 2000. Mr Ford was Director of Finance and Chief Financial Officer of Goodman Fielder Ltd from 1997 to 1999 and has sat on a number of boards, including the Island Food Company and Yallourn Energy where he was Chairman of the Audit Committee. Mr Ford held various financial management positions at General Motors Corporation between 1964 and 1989 including Director, Overseas Financial Planning & Analysis at GM Corp USA from 1984 to 1986 and Director of Finance and Strategic Planning at General Motors-Holden from 1987 to 1989. Frances Mary Hernon, Non-Executive Director (Chairman of Remuneration Committee) Fran Hernon was appointed to the Infomedia Board of Directors on the 19 June 2000. Ms Hernon has a background in publishing. She has held various senior editorial and publicity positions at Channel 10, the Sunday Telegraph and New Woman magazine. Since joining the NRMA in 1993 as Managing Editor of Open Road magazine she has held several senior positions including Manager of Business Communications (design and production of NRMA's printed and online customer communication) and most recently, Manager of Account Services for NRMA Information Services. Myer Herszberg, Non-Executive Director Myer Herszberg has been a Director of Infomedia since 1992. Mr Herszberg has extensive consumer electronics experience and was active in bringing home computers to Australia in the early 1980s. As founder and proprietor of Melbourne's Denman Audio chain 25 years ago, he has also brought many leading edge electronic products to Australia. Ian Michael Joicey, Executive Director Ian Joicey was appointed to the Infomedia Board of Directors on 24 November 2000. Mr Joicey was the first staff programmer on the Microcat project. In 1993, Mr. Joicey became Programming Manager and then later Technology Director. He led the development of one of the first Australian e-commerce systems, InfoExpress and under his direction the Company developed more capable versions of its Microcat products for Australia, Europe and North America. Directors were in office from the beginning of the financial year until the date of this report, unless otherwise stated. Linda Sue Graham-McCann was an Executive Director until her resignation on 24 November 2000. 36 www.infomedia.com.au INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE As at the date of this report, the interests of the Directors in the shares and options of the Company were: Wiser Laboratory Pty Limited Rentamobile Pty Limited Yarragene Pty Limited Ian Joicey Wiser Centre Pty Limited Richard Graham Myer Herszberg Barry Ford Fran Hernon INFOMEDIA LTD ORDINARY SHARES FULLY PAID 100,277,501 28,577,154 45,844,445 15,238,080 1,000,000 617,706 - 116,666 5,000 OPTIONS OVER ORDINARY SHARES - - - - - 450,000 450,000 133,334 200,000 Richard Graham is the sole director and beneficial shareholder of Wiser Laboratory Pty Limited. Richard Graham and Linda Graham- McCann are Directors of Wiser Centre Pty Limited, trustee for the Wiser Centre Superannuation Fund. Myer Herszberg is a Director and major shareholder of Rentamobile Pty Limited and Yarragene Pty Limited. PRINCIPAL ACTIVITIES The principal activities during the year of entities within the consolidated entity were: developer and supplier of electronic parts catalogues for the automotive industry globally; information management, analysis and creation for the domestic automotive and oil industries; and provision of dealer management systems for the automotive industry. There have been no significant changes in the nature of those activities during the year. EMPLOYEES The consolidated entity employed 121 fulltime employees as at 30 June 2001. EARNINGS PER SHARE Basic earnings per share Diluted earnings per share Cents 4.1 4.0 The number of ordinary shares on issue used in the calculation of basic and dilutive earnings is 316,247,239 and 317,721,774 respectively. DIVIDENDS Dividends paid or declared during the year: Interim dividend - 1.0 cents per share - fully franked Final dividend - 1.5 cents per share - fully franked $'000 3,193 4,804 REVIEW AND RESULTS OF OPERATIONS Financial The consolidated entity experienced significant improvement in both sales and profits over the prior year. Operating revenue increased by 66% and operating profit before tax increased by 59%. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There has been no significant change in the state of affairs of the Company since the last Directors’ report. SIGNIFICANT EVENTS AFTER THE BALANCE DATE There has been no matter or circumstance that has arisen since the end of the financial year, that has significantly affected, the operations of the Company, the results of those operations, or the state of affairs of the Company. LIKELY DEVELOPMENTS AND EXPECTED RESULTS The Directors foresee that the 2002 financial year will be a period of managed growth of its traditional business and maximising the integration success of its acquisitions made. The most significant area for change will be in: continued expansion of subscription revenues for Infomedia's products; continued development of Infomedia's software including delivery via the Internet; and organisation of an enhanced product range arising from the acquisition of new businesses. It was anticipated that the 2002 financial year would show continued improvement in profits. www.infomedia.com.au 37 (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) (cid:1) directors’ report ENVIRONMENTAL REGULATION AND PERFORMANCE The consolidated entity is not subject to any particular or significant environmental regulation under a law of the Commonwealth of Australia or of a State or Territory. SHARE OPTIONS Unissued Shares No options were granted to directors during the financial year ended 30 June 2001. At the date of this report, there were 3,792,584 options. The option holders include but are not limited to Directors, Richard Graham, Myer Herszberg, Barry Ford and Fran Hernon. Mr Ford and Ms Hernon may exercise their options in three equal tranches after each anniversary of their engagement by the Company and prior to 28 June 2003. Mr Graham and Mr Herszberg may exercise their options at any time after 19 June 2001 and prior to 19 June 2003. Refer to notes 26 and 31 to the Financial Statements for further details. Selective Share Plan At the date of this report, 6,980,083 shares have been offered to selected persons pursuant to the Selective Share Plan with 1,544,269 shares remaining to be offered. The consideration for each share offered is nil unless otherwise determined by the Directors. Refer to note 26 for further details. All Selective Share Plan shares allotted during the financial year ended 30 June 2001 were made in accordance with the plan and pursuant to the Initial Public Offering (IPO) document dated 14 July 2000. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS During or since the financial year, the Company has paid premiums in respect of a contract insuring all the directors of Infomedia Ltd against costs incurred in defending proceedings for conduct involving: (a) a willful breach of duty; or (b) a contravention of Sections 182 or 183 of the Corporations Act; as permitted by section 199B of the Corporations Act. The total amount of insurance contract premiums paid was $50,190. This amount has not been included in Directors' Remuneration. DIRECTORS' AND OTHER OFFICERS' EMOLUMENTS The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for the directors and the executive team. The Remuneration Committee assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality Board and executive team. To assist in achieving these objectives, the Remuneration Committee links the nature and amount of Executive Directors' and Officers' emoluments to the Company's financial and operational performance. Details of the nature and amount of each element of the emolument of each director of the Company and the consolidated entity: EMOLUMENTS OF DIRECTORS OF INFOMEDIA LTD ANNUAL EMOLUMENTS LONG-TERM EMOLUMENTS Selective Share Plan (pursuant to IPO) Cost to Company $ - - - - - - $ 673,300 269,319 605,970 - - - No. 308,853 123,541 277,968 - - - Base Fees Other (a) Superannuation Richard Graham Ian Joicey Linda Graham-McCann Myer Herszberg Barry Ford Fran Hernon $ 190,303 156,830 80,836 40,000 40,000 40,000 $ 16,155 - - - - - $ 19,508 12,268 5,933 3,200 3,200 3,200 38 www.infomedia.com.au EMOLUMENTS OF EXECUTIVES OF INFOMEDIA LTD ANNUAL EMOLUMENTS LONG-TERM EMOLUMENTS Base fees $ 107,457 107,252 95,223 76,442 75,472 Other (a) $ 17,471 - 11,321 - - Superannuation Selective Share Plan (pursuant to IPO) and Employee Share Plan Options granted (c) $ 8,529 8,505 6,793 6,075 6,019 No. 62,322 1,483,048 - 278,520 552 Cost to Company $ - - - - - Market value (b) 135,659 2,965,992 - 606,970 1,000 No. $ - - - - - - - - 600,000 314,000 Andrew Pattinson Gary Martin Frank Cirillo Nick Georges Michael Connor (a) The category 'Other' includes the value of any non-cash benefits provided. (b) The value attributed to the selective share plan and employee share plan is calculated as the total number of shares allotted multiplied by the weighted average market price of the five trading days on the Australian Stock Exchange preceding first date of offer. (c) Options granted as part of remuneration have been valued using an option pricing model which takes into account factors such as the exercise price, the current level of volatility of the underlying share price and the time to maturity of the option. There was no cost to the Company in issuing the options. DIRECTORS' MEETINGS The number of meetings of directors (including meetings of committees to which they were members) held during the year and the number of meetings attended by each director were as follows: MEETINGS OF COMMITTEES Richard Graham Ian Joicey Linda Graham-McCann Myer Herszberg Barry Ford Fran Hernon Directors' meetings 11 6 5 11 11 11 Audit & Corporate Governance - - 2 2 3 3 Remuneration - - - 1 1 1 ROUNDING The amounts contained in this report and in the financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies. CORPORATE GOVERNANCE In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of Infomedia Ltd support and have adhered to the principles of corporate governance. As at the date of this report, the Company had an Audit & Corporate Governance Committee and a Remuneration Committee of the Board of Directors. The Audit & Corporate Governance and Remuneration Committees were established on 19 June 2000. Prior to this, such matters were dealt with by the full Board. The members of the Audit & Corporate Governance and Remuneration Committees are Barry Ford, Fran Hernon and Myer Herszberg. Signed in accordance with a resolution of the Directors. Richard David Graham Chairman Sydney, 28 August 2001 www.infomedia.com.au 39 statement of financial performance YEAR ENDED 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD Revenue from ordinary activities Expenses from ordinary activities excluding borrowing costs expense Borrowing costs expense Profit from ordinary activities before income tax expense Income tax expense relating to ordinary activities Profit from ordinary activities after income tax expense Total revenues, expenses and valuation adjustments attributable to Infomedia Ltd and recognised directly in equity Total changes in equity other than those resulting from transactions with owners as owners 2(i) 2(ii) 2(iii) 3 5 2001 $’000 2000 $’000 2001 $’000 2000 $’000 36,123 21,696 31,555 20,605 (16,747) (84) 19,292 (6,467) (9,445) (131) 12,120 (4,457) (13,209) (18) 18,328 (6,049) (8,607) (39) 11,959 (4,326) 12,825 7,663 12,279 7,633 - - - - 12,825 7,663 12,279 7,633 40 www.infomedia.com.au statement of financial position AT 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD CURRENT ASSETS Cash on hand Receivables Inventories Other TOTAL CURRENT ASSETS NON-CURRENT ASSETS Receivables Investments Property, plant and equipment Intangible assets Deferred research & development costs Deferred tax assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Payables Interest-bearing liabilities Provisions excluding tax liabilities Provision for income tax Deferred revenue TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Interest-bearing liabilities Provisions TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Retained profits TOTAL EQUITY 2001 $’000 16,852 7,798 185 695 25,530 - - 2,789 6,270 1,778 337 11,174 2000 $’000 1,243 3,287 115 2,299 6,944 - - 2,117 4,265 - 248 6,630 2001 $’000 15,951 6,432 20 125 22,528 5,144 - 2,281 2,442 1,778 235 11,880 2000 $’000 363 2,607 - 1,920 4,890 5,635 - 1,916 - - 164 7,715 36,704 13,574 34,408 12,605 1,991 101 5,732 1,395 1,112 10,331 85 1,072 1,157 2,248 5,051 576 1,564 389 9,828 40 312 352 11,488 10,180 1,658 101 5,426 1,082 351 8,618 85 1,066 1,151 9,769 25,216 3,394 24,639 17,474 7,742 25,216 480 2,914 3,394 17,474 7,165 24,639 2,123 5,051 273 1,437 - 8,884 40 317 357 9,241 3,364 480 2,884 3,364 6 7 8 9 10 12 13 14 15 16 17 18 19 20 21 22 5 www.infomedia.com.au 41 statement of cash flows YEAR ENDED 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Borrowing costs Income tax paid Goods and services tax paid NET CASH FLOWS FROM OPERATING ACTIVITIES 24 (a) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment Proceeds from sale of investments Purchase of business Purchase of options Cash acquired in purchase of business NET CASH FLOWS/(USED IN) INVESTING ACTIVITIES 24 (d) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of ordinary shares Proceeds from exercise of options from related parties Advances-related parties Repayments of advances-related parties Borrowings-other Repayment of borrowings Dividends paid on ordinary shares Finance lease principal NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES 31 2001 $’000 31,526 (17,761) 912 (85) (5,951) (468) 2000 $’000 20,850 (8,702) 192 (131) (4,736) - 2001 $’000 27,694 (14,790) 922 (18) (5,696) (386) 2000 $’000 19,749 (8,292) 189 (39) (4,713) - 8,173 7,473 7,726 6,894 (1,092) - (2,170) - - (1,444) 236 (5,121) (100) 113 (666) - (2,170) - - (1,131) 236 - (100) - (3,262) (6,316) (2,836) (995) 19,000 67 - - - (5,000) (3,193) (176) - 19,000 - - (240) 240 5,000 (308) (8,722) (37) 67 - - - (5,000) (3,193) (176) - (5,862) 240 5,000 (308) (8,722) (37) 10,698 (4,067) 10,698 (9,689) NET (DECREASE)/INCREASE IN CASH HELD 15,609 (2,910) 15,588 (3,790) Add opening cash brought forward CLOSING CASH CARRIED FORWARD 24 (b) 1,243 16,852 4,153 1,243 363 15,951 4,153 363 42 www.infomedia.com.au notes to financial statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Basis of accounting The financial statements have been prepared in accordance with the historical cost convention. The financial report is a general purpose financial report which has been prepared in accordance with the requirements of the Corporations Act which includes applicable Accounting Standards. Other mandatory professional reporting requirements (Urgent Issues Group Consensus Views) have also been complied with. (b) Changes in accounting policies The accounting policies adopted are consistent with those of the previous year. (c) Principles of consolidation The consolidated financial statements are those of the consolidated entity, comprising Infomedia Ltd (the parent entity) and all entities which Infomedia Ltd controlled from time to time during the year and at balance date. Information from the financial statements of subsidiaries is included from the date the parent company obtains control until such time as control ceases. 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 the parent company has control. Subsidiary acquisitions are accounted for using the purchase method of accounting. The financial statements of subsidiaries are prepared for the same reporting period as the parent entity, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies which may exist. All intercompany balances and transactions, including recognised profits arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered. (d) Foreign currencies Translation of foreign currency transactions Transactions in foreign currencies of entities within the consolidated entity are converted to local currency at the rate of exchange ruling at the date of the transaction. Amounts payable to and by the entities within the consolidated entity that are outstanding at balance date and are denominated in foreign currencies have been converted to local currency using rates of exchange ruling at the end of the financial year. Except for certain specific hedges and hedges of foreign currency operations, all resulting exchange differences arising on settlement or re- statement are brought to account in determining the profit or loss for the financial year, and transaction costs, premiums and discounts on forward currency contracts are deferred and amortised over the life of the contract. Forward exchange contracts The consolidated entity enters into forward exchange contracts where it agrees to sell specified amounts of foreign currencies in the future at a predetermined exchange rate. The objective is to match the contract with anticipated future cash flows from sales and purchases in foreign currencies, to protect the consolidated entity against the possibility of loss from future exchange rate fluctuations. The forward exchange contracts are usually for no longer than 12 to 24 months. Forward exchange contracts are recognised at the date the contract is entered. Exchange gains or losses on forward exchange contracts are charged to the profit and loss except those relating to hedges of specific commitments which are deferred and included in the measurement of the sale or purchase. (e) Cash and cash equivalents Cash on hand and in banks and short-term deposits are stated at nominal values. For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within 2 working days, net of outstanding bank overdrafts. (f) Trade and other receivables Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectable debts. An estimate for doubtful debts is made when collection is no longer probable. Bad debts are written-off as incurred. Receivables from related parties are recognised and carried at the nominal amount due. Interest is taken up as income on an accrual basis. (g) Investments All non-current investments are carried at the lower of cost and recoverable amount. (h) Inventories Manufacturing Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows: (cid:1) raw materials - purchase cost on a first-in-first-out basis; and (cid:1) work-in-progress - cost of direct labour and materials. www.infomedia.com.au 43 (cid:1) (cid:1) notes to financial statements 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES continued from previous page (i) Recoverable Amount Non-current assets are not carried at an amount above their recoverable amount, and where carrying values exceed this recoverable amount assets are written down. (j) Property, plant and equipment Cost and valuation Property, plant and equipment are carried at cost. Depreciation Depreciation is provided on a straight line basis on all property, plant and equipment, other than freehold land. 2001 Major depreciation periods are: 40 years Freehold buildings Leasehold improvements 6 years 3 to 15 years Plant and equipment 3 years Plant and equipment under lease 2000 40 years 6 years 3 to 15 years 3 years (k) Leases Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and benefits incidental to ownership. Operating leases The minimum lease payments of operating leases, where the lessor effectively retains substantially all of the risks and benefits of ownership of the leased item, are recognised as an expense on a straight line basis. Contingent rentals are recognised as an expense in the financial year in which they are incurred. Finance leases Leases which effectively transfer substantially all of the risks and benefits incidental to ownership of the leased item to the group are recognised at the present value of the minimum lease payments and disclosed as property, plant and equipment under lease. A lease liability of equal value is also recognised. Capitalised lease assets are depreciated over the estimated useful life of the assets. Minimum lease payments are allocated between interest expense and reduction of the lease liability with the interest expense calculated using the interest rate implicit in the lease and charged directly to profit and loss. The cost of improvements to or on leasehold property is recognised, disclosed as leasehold improvements, and depreciated over the unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter. (l) Intangibles Goodwill Goodwill represents the excess of the purchase consideration over the fair value of identifiable net assets acquired at the time of acquisition of a business or shares in a controlled entity. Goodwill is amortised by the straight line method over the period during which benefits are expected to be received. This is taken as being 10 years. Intellectual property Intellectual property relates to copyright over a key product and is amortised over its useful life, being 10 years. (m) Trade and other payables Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the consideration to be paid in the future for goods and services received, whether or not billed to the consolidated entity. Payables to related parties are carried at the principal amount. Interest, when charged by the lender, is recognised as an expense on an accrual basis. (n) Revenue in advance Certain contracts allow annual subscriptions to be invoiced in advance. The components of revenue relating to the subscription period beyond balance date are recorded as a liability. (o) Loans and borrowings All loans are measured at the principal amount. Interest is charged as an expense as it accrues. Finance lease liability is determined in accordance with the requirements of AASB 1008: Leases. 44 www.infomedia.com.au (p) Share capital Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received. (q) Revenue recognition Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Subscriptions Subscription revenue is recognised when title of licence has passed to the buyer with related support revenue being recognised over the service period. Where title of licence and related support revenue are inseparable then the revenue is recognised over the service period. Interest Control of a right to receive consideration for the provision of, or investment in, assets has been attained. (r) Income tax Tax-effect accounting is applied using the liability method whereby income tax is regarded as an expense and is calculated on the accounting profit after allowing for permanent differences. To the extent timing differences occur between the time items are recognised in the financial statements and when items are taken into account in determining taxable income, the net related taxation benefit or liability, calculated at current rates, is disclosed as a future income tax benefit or a provision for deferred income tax. The net future income tax benefit relating to tax losses and timing differences is not carried forward as an asset unless the benefit is virtually certain of being realised. The income tax expense for the year is calculated using the 34% tax rate, however the deferred tax balances have been adjusted for the decreased corporate tax rate of 30% for the tax year 2001-02. The adjustment recognises that reversal of timing differences will occur within the 2001-02 or later income tax year, at which time tax will be attributed at a lower rate. The corresponding adjustment has been charged to income tax expense. (s) Employee entitlements Provision is made for employee entitlement benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave, sick leave and long service leave. Liabilities arising in respect of wages and salaries, annual leave, sick leave and any other employee entitlements expected to be settled within twelve months of the reporting date are measured at their nominal amounts. All other employee entitlement liabilities are measured at the present value of the estimated future cash outflow to be made in respect of services provided by employees up to the reporting date. In determining the present value of future cash outflows, the interest rates attaching to government guaranteed securities which have terms to maturity approximating the terms of the related liability are used. Employee entitlements expenses and revenues arising in respect of the following categories: (cid:1) wages and salaries, non-monetary benefits, annual leave, long service leave, sick leave and other leave entitlements; and (cid:1) other types of employee entitlements; are charged against profits on a net basis in their respective categories. The value of the employee share scheme described in note 26 is not being charged as an employee entitlement expense. In respect of the consolidated entity's accumulated benefits superannuation plans, any contributions made to the superannuation funds by entities within the consolidated entity are charged against profits when due. (t) Research and development costs Research and development costs are expensed as incurred, except where the future benefits are recoverable beyond any reasonable doubt. When research and development costs are deferred such costs are amortised over future periods on a basis related to expected future benefits. Unamortised costs are reviewed at each balance date to determine the amount (if any) that is no longer recoverable and any amount identified is written off. (u) Basic earnings per share Basic earnings per share is determined by dividing the profit from ordinary activities after related income tax expense by the weighted average number of ordinary shares outstanding during the financial year. Diluted earnings per share is determined by dividing the profit from ordinary activities after related income tax expense adjusted for the effect of earnings on potential ordinary shares, by the weighted average number of ordinary shares (both issued and potentially dilutive) outstanding during the financial year. www.infomedia.com.au 45 (cid:1) (cid:1) notes to financial statements 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 $’000 2000 $’000 2001 $’000 2000 $’000 2. PROFIT FROM ORDINARY ACTIVITIES Profit from ordinary activities before income tax expense includes the following revenues and expenses whose disclosure is relevant in explaining the financial performance of the entity: (i) Revenues from ordinary activities Sales revenue Interest revenue - wholly owned group - directors and director related entities - other persons/corporations Total interest revenue Foreign currency exchange gain Proceeds from sale of non current assets Other revenue Revenues from ordinary activities (ii) Expenses from ordinary activities excluding borrowing costs Cost of goods sold Salaries & wages (including on-costs) Depreciation of non-current assets - Buildings - Plant & equipment - Plant & equipment under lease - Leasehold improvements Total depreciation of non-current assets Amortisation of non-current assets - goodwill - intellectual property - deferred research and development costs Total amortisation of non-current assets Research & development Bad and doubtful debts Operating lease rental Book value on disposal of non-current assets Other expenses Expenses from ordinary activities excluding borrowing costs (iii) Borrowing costs Interest expense - other corporations Finance charges - lease liability Borrowing costs 34,452 21,083 29,875 19,982 - - 912 912 577 - 182 36,123 7,183 7,150 6 696 38 41 781 472 117 122 711 - 86 275 - 561 16,747 66 18 84 - 2 190 192 47 236 138 21,696 4,260 2,871 6 372 73 20 471 110 - - 110 615 - 133 139 846 9,445 120 11 131 35 - 887 922 577 - 181 31,555 6,137 5,844 6 593 38 27 664 35 117 122 274 - 36 173 - 81 13,209 - 18 18 13 2 187 202 47 236 138 20,605 3,949 2,676 6 369 59 20 454 - - - - 615 - 109 139 665 8,607 28 11 39 46 www.infomedia.com.au 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 $’000 2000 $’000 2001 $’000 2000 $’000 6,559 19 15 - 2 200 (162) (27) (49) (12) (78) 6,467 4,804 3,193 - 7,997 4,363 12 11 4 2 39 - - (49) 76 (1) 4,457 - - 8,722 8,722 3. INCOME TAX The prima facie tax on operating profit differs from the income tax provided in the financial statements as follows: Prima facie tax on operating profit Tax effect of permanent differences Legal expense Entertainment Other items (net) Depreciation of buildings Amortisation of intangible assets Additional research and development deduction Intellectual property - copyright deduction (Over)/under provision of previous year Adjustment to deferred tax balances Amount attributable to change in income tax rate Income tax expense attributable to operating profit 4. DIVIDENDS PROPOSED OR PAID (a) Dividends proposed Franked dividends (1.5 cents per share) (b) Dividends paid during the year Franked interim dividend (1.0 cents per share) (c) Previous financial year Franked dividend - ordinary The tax rate at which dividends were franked is 34% (2000: 36%) The amount of franking credits available for the subsequent financial year are: - franking account balance as at the end of the financial year - franking credits that will arise from the payment of income tax payable as at the end of the financial year - franking debits that will arise from the payment of dividends as at the end of the financial year 5. RETAINED PROFITS Balance at the beginning of the year Profit from ordinary activities after income tax expense Total available for appropriation Dividends provided for or paid Balance at the end of the year 2,914 12,825 15,739 (7,997) 7,742 3,973 7,663 11,636 (8,722) 2,914 6,232 19 15 - 2 51 (162) (27) 24 (12) (93) 6,049 4,804 3,193 - 7,997 4,305 12 11 4 2 - - - (49) 46 (5) 4,326 - - 8,722 8,722 7,866 2 2,100 (4,804) 5,162 2,883 12,279 15,162 (7,997) 7,165 2,554 - 2,556 3,973 7,633 11,606 (8,722) 2,884 www.infomedia.com.au 47 notes to financial statements 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 6. RECEIVABLES (CURRENT) Trade debtors Provision for doubtful debts Other debtors Amounts other than trade debts receivable from related parties: Directors and Director-related entities 31 (a) Australian dollar equivalent of amounts receivable in foreign currencies not effectively hedged: New Zealand dollars (b) Terms and conditions relating to the above financial instruments: (i) Credit sales are on terms up to 30 days. (ii) Details of the terms and conditions of related party receivables are set out in Note 31. 7. INVENTORIES (CURRENT) Raw materials At cost Work in progress At cost Total inventories at the lower of cost and net realisable value 8. OTHER CURRENT ASSETS Prepayments Deposit paid on property (a) Prepayments at 30 June 2000 included costs of listing on the Australian Stock Exchange. (b) Infomedia Investments Pty Ltd has entered into a contract for the acquisition of two properties with a total purchase price of $1,890,000. The balance of the purchase price of $1,585,000 has not been brought to account, as the completion of the contract did not occur until 12 July 2001. The details of this commitment are detailed at Note 25. 9. RECEIVABLES (NON-CURRENT) Wholly-owned group - subsidiary entities 10. INVESTMENTS (NON-CURRENT) Investments at cost comprise: Controlled entities - unlisted Total investments 31 11 48 www.infomedia.com.au 59 126 185 149 546 695 - - - 2001 $’000 7,573 (86) 7,487 194 117 7,798 2000 $’000 3,003 - 3,003 260 24 3,287 2001 $’000 6,157 (36) 6,121 194 117 6,432 22 22 21 21 13 13 18 97 115 1,990 309 2,299 20 - 20 125 - 125 2000 $’000 2,332 - 2,332 251 24 2,607 8 8 - - - 1,920 - 1,920 - - - 5,144 5,635 $6 only $6 only $6 only $6 only 30 JUNE 2001 CONSOLIDATED INFOMEDIA LTD 11. INTERESTS IN SUBSIDIARIES 2001 $’000 2000 $’000 2001 $’000 2000 $’000 Infomedia Investments Pty Limited Ordinary shares Datateck Publishing Pty Limited Ordinary shares Country of incorporation % of equity interest held by the consolidated entity 2001 2000 % % Australia 100 100 $2 only $2 only Australia 100 100 $4 only $6 only $4 only $6 only 12. PROPERTY, PLANT AND EQUIPMENT Freehold land and buildings At cost Provision for depreciation Leasehold improvements At cost Provision for depreciation Total land and buildings Office equipment At cost Provision for depreciation Furniture & fittings At cost Provision for depreciation Plant and equipment At cost Provision for depreciation Plant and equipment under lease At cost Provision for depreciation Total plant and equipment Total property, plant and equipment At cost Provision for depreciation Total written down amount Continued next page 647 (18) 629 500 (115) 385 1,014 1,807 (632) 1,175 211 (94) 117 1,073 (618) 455 198 (170) 28 1,775 4,436 (1,647) 2,789 647 (12) 635 158 (74) 84 719 717 (247) 470 189 (45) 144 1,073 (355) 718 198 (132) 66 1,398 2,982 (865) 2,117 647 (18) 629 248 (100) 148 777 1,478 (521) 957 201 (91) 110 1,021 (612) 409 198 (170) 28 1,504 3,793 (1,512) 2,281 647 (12) 635 151 (73) 78 713 557 (247) 310 189 (45) 144 1,021 (338) 683 198 (132) 66 1,203 2,763 (847) 1,916 www.infomedia.com.au 49 notes to financial statements 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 $’000 2000 $’000 2001 $’000 2000 $’000 12. PROPERTY, PLANT AND EQUIPMENT continued from previous page (a) Assets pledged as security The Company's bank holds a mortgage over freehold land and buildings. Lease liabilities are secured by a charge over the leased assets. (b) Reconciliation of property, plant and equipment carrying values: Freehold land and buildings Carrying amount - opening balance Depreciation Carrying amount - closing balance Leasehold Improvements Carrying amount - opening balance Additions Depreciation Carrying amount - closing balance Office equipment Carrying amount - opening balance Additions Additions through acquisition of business Depreciation Carrying amount - closing balance Furniture & fittings Carrying amount - opening balance Additions Additions through acquisition of business Depreciation Carrying amount - closing balance Plant and equipment Carrying amount - opening balance Depreciation Carrying amount - closing balance Plant and equipment under lease Carrying amount - opening balance Depreciation Carrying amount - closing balance 50 www.infomedia.com.au 635 (6) 629 84 342 (41) 385 470 735 355 (385) 1,175 144 14 8 (49) 117 718 (263) 455 66 (38) 28 635 (6) 629 78 97 (27) 148 310 566 355 (274) 957 144 4 8 (46) 110 683 (274) 409 66 (38) 28 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 $’000 4,968 (581) 4,387 2,000 (117) 1,883 6,270 - 1,900 1,900 (122) 1,778 337 337 1,390 601 1,991 2000 $’000 4,375 (110) 4,265 - - - 4,265 - - - - - 248 248 1,053 1,195 2,248 2001 $’000 593 (34) 559 2,000 (117) 1,883 2,442 - 1,900 1,900 (122) 1,778 235 235 1,361 297 1,658 2000 $’000 - - - - - - - - - - - - 164 164 965 1,158 2,123 25 101 - 101 51 5,000 5,051 101 - 101 51 5,000 5,051 13. INTANGIBLE ASSETS Goodwill - at cost Accumulated amortisation Intellectual property - at cost Accumulated amortisation 14. DEFERRED RESEARCH AND DEVELOPMENT COSTS Balance at beginning of year Research & development costs incurred during the year and deferred Accumulated amortisation Balance at end of year 15. DEFERRED TAX ASSETS Future income tax benefit 16. PAYABLES (CURRENT) Trade creditors Other creditors (a) Terms and conditions relating to the above financial instruments: (i) Trade liabilities are normally settled on 30 day terms. 17. INTEREST-BEARING LIABILITIES (CURRENT) Lease liability Borrowings secured by mortgage - commercial bills (b) Terms and conditions relating to the above financial instruments (i) Finance leases have an average lease term of 3 years with the option to purchase the asset at the completion of the lease term for the asset's residual value. The average discount rate implicit in the leases is 8%, (2000: 8%). Lease liabilities are secured by a charge over the leased assets. www.infomedia.com.au 51 notes to financial statements 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 $’000 4,804 622 5,426 351 351 85 85 131 935 1,066 17,474 17,474 2000 $’000 - 273 273 - - 40 40 65 252 317 480 480 2001 $’000 4,804 928 5,732 1,112 1,112 85 85 147 925 1,072 17,474 17,474 $'000 480 16,927 - - 67 17,474 2000 $’000 - 576 576 389 389 40 40 65 247 312 480 480 Number 296,499,190 19,000,000 4,663,683 60,168 66,666 320,289,707 18. PROVISIONS EXCLUDING TAX LIABILITIES (CURRENT) Provision for dividends Employee entitlements 19. DEFERRED REVENUE (CURRENT) Revenue in advance 20. INTEREST-BEARING LIABILITIES (NON-CURRENT) Lease liability (b) Terms and conditions relating to the above financial instruments: (i) Finance leases have an average lease term of 3 years with the option to purchase the asset at the completion of the lease term for the asset's residual value. The average discount rate implicit in the leases is 8%, (2000: 8%). Lease liabilities are secured by a charge over the leased assets. 21. PROVISIONS (NON-CURRENT) Employee entitlements Deferred income tax 22. CONTRIBUTED EQUITY Issued and paid up capital - 320,289,707 shares fully paid (2000: 296,499,190) 26 25 26 MOVEMENT IN SHARES ON ISSUE Beginning of the financial year Issued during the financial year: - Initial Public Offering - Selective Share Plan - Employee Share Plan - Options Exercised by directors End of the financial year 22(a) 26 26 31 (a) Initial Public Offering On 16 August 2000, 19,000,000 shares were issued at $1.00 each pursuant to the Initial Public Offering document dated 14 July 2000. A total of $2,073,000 in costs associated with the offering was recorded directly against equity. (b) Employee Option Plan A total of 1,270,750 options were issued to eligible employees during the year at an average exercise price of $1.79. 52 www.infomedia.com.au 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 2000 2001 2000 23. EARNINGS PER SHARE Basic earnings per share (cents per share) Diluted earnings per share (cents per share) Weighted average number of ordinary shares on issue used in the calculation of basic earnings per share Cents per share Cents per share 4.1 4.0 N/A* N/A* 316,247,239 N/A* * The consolidated entity was not a disclosing entity in 2000 and the comparatives for the full-year earnings per share are not shown. 24. STATEMENT OF CASH FLOWS $’000 $’000 $’000 $’000 (a) Reconciliation of the operating profit after tax to the net cash flows from operations Profit from ordinary activities after income tax expense Depreciation of non-current assets Amortisation of non-current assets Provision for doubtful debts Net (profit)/loss on sale of investments Changes in assets and liabilities Trade receivables and other debtors Deferred research and development costs Trade and other creditors Provision for employee entitlements Tax provision Deferred income tax liability Future income tax benefit Prepayments Inventories Revenue in Advance Net cash flows from operating activities (b) Reconciliation of cash Cash balance comprises: - cash on hand - cash on deposit (c) Financing facilities available At balance date, the following financing facilities had been negotiated and were available: Total facilities - commercial bills Facilities used at balance date Facilities unused at balance date Continued next page 12,825 781 711 86 - (4,596) (1,900) (704) 116 (170) 677 20 (178) (55) 560 8,173 1,667 15,185 16,852 7,663 471 110 - (97) (79) - 1,206 256 (323) 224 (179) (1,906) 55 72 7,473 1,243 - 1,243 12,279 664 274 36 - (3,372) (1,900) (913) 97 (355) 683 37 14 (6) 188 7,726 766 15,185 15,951 7,633 454 - - (97) (234) - 1,260 183 (451) 228 (164) (1,918) - - 6,894 363 - 363 - - - 6,000 (5,000) 1,000 - - - 6,000 (5,000) 1,000 www.infomedia.com.au 53 notes to financial statements 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 $’000 2000 $’000 2001 $’000 2000 $’000 24. STATEMENT OF CASH FLOWS continued from previous page (d) Purchase of business On 1 December 2000, the parent entity acquired the business of On-line Computing Pty Ltd. Details of the acquisition are: Consideration: Cash paid to vendor Acquisition costs and stamp duty paid Total consideration Represented by: Plant and equipment Intellectual property Other assets Total assets acquired Trade creditors Hire purchase and lease liabilities Provision for employee entitlement Revenue in advance Total liabilities acquired Net assets acquired at fair value Goodwill arising on acquisition Total consideration $'000 2,005 165 2,170 363 2,000 163 2,526 (199) (271) (317) (162) (949) 1,577 593 2,170 54 www.infomedia.com.au 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 $’000 2000 $’000 2001 $’000 2000 $’000 25. EXPENDITURE COMMITMENTS (a) Capital expenditure commitments Estimated capital expenditure contracted for at balance date but not provided for - payable not later than one year - property 1,585 1,090 - - (b) Lease expenditure commitments (i) Operating leases (non-cancellable): Minimum lease payments - not later than one year - later than one year and not later than five years - aggregate operating lease expenditure contracted for at balance date (ii) Finance leases: - not later than one year - later than one year and not later than five years - total minimum lease payments - future finance charges - lease liability - current liability - non-current liability - aggregate finance lease expenditure contracted 17 20 for at balance date 188 44 232 111 87 198 (12) 186 101 85 186 213 258 471 56 41 97 (6) 91 51 40 91 135 36 171 111 87 198 (12) 186 101 85 186 132 137 269 56 41 97 (6) 91 51 40 91 (c) Assets which are the subject of finance leases include computer hardware and equipment. (d) Operating leases have an average lease term of 3 years. Assets which are the subject of operating leases include office space. 26. EMPLOYEE ENTITLEMENTS AND SUPERANNUATION COMMITMENTS Employee Entitlements The aggregate employee entitlement liability is comprised of: Provisions (current) Provisions (non-current) 18 21 928 147 1,075 576 65 641 622 131 753 273 65 338 Continued next page www.infomedia.com.au 55 notes to financial statements 26. EMPLOYEE ENTITLEMENTS AND SUPERANNUATION COMMITMENTS Continued from previous page Employee Option Plan The Employee Option Plan entitles the Company to offer 'eligible employees' options to subscribe for shares in the Company. Options will be granted at a nil issue price unless otherwise determined by the directors of the Company and each Option enables the holder to subscribe for one Share. The exercise price for the Options granted will be as specified on the option certificate or, if not specified, the volume weighted average price for Shares of the Company for the five days trading immediately before the day on which the options were granted. The Options may be exercised in accordance with the date determined by the Company, which must be within three years of the option being granted. The total number of Options issued at the date of this report is 3,792,584 (2000: 1,300,000). Employee Share Plan The Company provides employees, not including Directors, the opportunity to acquire shares in the Company. The scheme applies to employees with at least 12 months service and provides that offers be made to at least 75% of the persons employed by the Company for at least 36 months and not more than twice in each financial year. The offer to each employee cannot exceed a market value of $1,000. The consideration for each share offered will be nil unless otherwise determined by the Directors. Shares may not be offered to employees who are ineligible, being employees with a legal or beneficial interest in more than 5% of the Company or that they control or may cast more than 5% of the maximum votes at a general meeting of the Company. The total number of shares issued pursuant to the Employee Share Plan at the date of this report is 60,168. Selective Share Plan Under the Selective Share Plan (SSP) and pursuant to the IPO, the Company will offer shares to selected persons on set offer dates. The participants are limited to 17 individuals named in the schedule to the SSP. As at the date of this report the remaining number of shares to be offered is 1,544,269. The consideration for each share offered will be nil unless otherwise determined by the Directors. The set offer dates are provided below. Date 1 September 2000 30 March 2001 3 July 2001 30 March 2002 3 July 2002 Number of shares 3,675,352 988,331 2,316,400 988,331 555,938 Status Issued during the 2001 financial year Issued during the 2001 financial year Issued during the 2002 financial year Superannuation Commitments Contributions are made by the Company in accordance with the relevant statutory requirements. Contributions by the Company for the year ended 30 June 2001 were 8% (2000: 7%) of employee's wages and salaries which are legally enforceable in Australia. The superannuation plans provide accumulation benefits. 27. CONTINGENT LIABILITIES (a) Floating Charge The assets of the Company are used as security for the Company's liabilities to its bank. During the year the commercial bills were repaid. The security is still in place covering foreign currency contracts. (b) Bank Guarantee A bank guarantee for $10,350 pertaining to leased premises remains on hand at 30 June 2001. 56 www.infomedia.com.au 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 $ 2000 $ 2001 $ 2000 $ 28. REMUNERATION OF DIRECTORS Income paid or payable, or otherwise made available, in respect of the financial year, to all directors of each entity in the consolidated entity, directly or indirectly, by the entities of which they are directors or any related party: Income paid or payable, or otherwise made available, in respect of the financial year, to all directors of Infomedia Ltd, directly or indirectly, from the entity or any related party: The number of directors of Infomedia Ltd whose income (including superannuation contributions) fell within the following bands is: $0 - $9,999 $40,000 - $49,999 $80,000 - $89,999 $90,000 - $99,999 $150,000 - $159,999 $160,000 - $169,999 $220,000 - $229,999 In the opinion of directors, remuneration paid to directors is considered reasonable. Directors' remuneration is determined on the basis of cost to the Company. It therefore excludes any offerings of equity instruments. 611,432 263,504 611,432 263,504 Number - 3 1 - - 1 1 Number 3 - - 1 1 - - Number - 3 1 - - 1 1 Number 3 - - 1 1 - - www.infomedia.com.au 57 notes to financial statements 30 JUNE 2001 NOTES CONSOLIDATED INFOMEDIA LTD 2001 $ 2000 $ 2001 $ 2000 $ 29. REMUNERATION OF EXECUTIVES Remuneration received or due and receivable by executive officers of the consolidated entity whose remuneration is $100,000 or more, from entities in the consolidated entity or a related party, in connection with the management of the affairs of the entities in the consolidated entity whether as an executive or otherwise: Remuneration received or due and receivable by executive officers of the company whose remuneration is $100,000 or more, from the company or any related party, in connection with the management of the affairs of the company whether as an executive or otherwise: The number of executives of Infomedia Ltd whose income (including superannuation contributions) fell within the following bands is: $110,000 - $119,999 $260,000 - $269,999 $390,000 - $399,999 $430,000 - $439,999 $680,000 - $689,999 $690,000 - $699,999 $890,000 - $899,999 $3,080,000 - $3,089,999 Remuneration of executives includes shares allotted under the Selective Share Plan and pursuant to the IPO. 6,580,601 Number 1 1 1 1 1 1 1 1 6,198,149 Number - - 1 1 1 1 1 1 30. AUDITORS' REMUNERATION $ $ $ $ Amounts received or due and receivable by the auditors of Infomedia Ltd for: - an audit or review of the financial report of the entity and any other entity in the consolidated entity 70,000 35,000 53,500 21,000 - other services in relation to the entity and any other entity in the consolidated entity 154,374 224,374 380,401 415,401 154,374 207,874 334,256 355,256 58 www.infomedia.com.au 31. RELATED PARTY DISCLOSURES Directors The Directors of Infomedia Ltd during the financial year were: Richard Graham; Myer Herszberg; Ian Joicey (appointed 24 November 2000); Linda Graham-McCann (resigned 24 November 2000); Barry Ford and Fran Hernon. Wholly-owned group transactions (a) A loan of $593,697 (2000: $322,322) remains owing from Infomedia Investments Pty Limited. Interest is charged at the commercial borrowing rate published by Westpac Bank. (b) An unsecured, interest free loan of $4,550,064 (2000: $5,312,331) remains owing from Datateck Publishing Pty Limited by Infomedia Ltd. The loan is repayable in seven days upon demand. Director and Director-related entity transactions (a) Infomedia Ltd rents office space from Wiser Laboratory Pty Limited, a company in which Richard Graham is a director. The total rent payments for the year ended 30 June 2001 of $90,000 (2000: $101,770) were on commercial terms. (b) An amount of $116,768 (2000: $24,191) is owed by Wiser Laboratory Pty Limited, Yarragene Pty Limited and Rentamobile Pty Limited, companies associated with Richard Graham and Myer Herszberg, pursuant to an indemnification agreement. Equity instruments of Directors and Director-related entities (a) Interests in the equity instruments of entities in the consolidated entity held by Directors of the reporting entity and their Director- related entities at balance date, being the number of instruments held are: INFOMEDIA LTD Ordinary Shares Fully Paid Options Over Ordinary Shares Remaining Entitlement Shares Under Selective Share Plan 2001 2000 2001 2000 2001 2000 Wiser Laboratory Pty Limited Wiser Centre Pty Limited Rentamobile Pty Limited Yarragene Pty Limited Richard Graham Myer Herszberg Ian Joicey Fran Hernon Barry Ford Total 100,277,501 1,000,000 28,577,154 45,844,445 308,853 - 15,114,539 5,000 116,666 191,244,158 146,396,475 - 44,969,044 72,148,136 - - 14,990,998 - - 278,504,653 - - - - 450,000 450,000 - 200,000 133,334 1,233,334 - - - - 450,000 450,000 - 200,000 200,000 1,300,000 - - - - 617,707 - 247,082 - - 864,789 - - - - 926,560 - 370,623 - - 1,297,183 (b) Movements in Directors and Director-related entity equity holdings: (i) Pursuant to the Company's Initial Public Offering (IPO) dated 14 July 2000, Wiser Laboratory Pty Limited disposed of 30,118,974 shares at $1.00 per share. On 20 October 2000, Wiser Laboratory Pty Limited disposed of 16,000,000 shares at a price of $2.10 per share. (ii) Pursuant to the Company's Initial Public Offering (IPO) dated 14 July 2000, Wiser Centre Pty Limited acquired 1,000,000 shares at $1.00 per share. (iii) Pursuant to the Company's IPO, Rentamobile Pty Limited disposed of 9,251,890 shares at $1.00 per share. On 20 October 2000, Rentamobile Pty Limited disposed of 7,140,000 shares at a price of $2.10 per share. (iv) Pursuant to the Company's IPO, Yarragene Pty Limited disposed of 14,843,691 shares at $1.00 per share. On 20 October 2000, Yarragene Pty Limited disposed of 11,460,000 shares at a price of $2.10 per share. (v) Richard Graham acquired 308,853 shares on 1 September 2000 in accordance with the Selective Share Plan (SSP) for no consideration. Ian Joicey acquired 123,541 shares on 1 September 2000 in accordance with the SSP for no consideration. (vi) (vii) Fran Hernon acquired 5,000 shares under the Company's IPO at $1.00 per share. (viii) Barry Ford acquired 50,000 shares under the Company's IPO at $1.00 per share. Barry Ford acquired a further 66,666 shares on 5 June 2001 through the exercise of 66,666 options for a consideration of $1.00 per share. 32. SEGMENT INFORMATION The consolidated entity operates predominately in one industry - information technology for the automotive and allied industries, particularly exemplified in the development and distribution of electronic parts catalogues, dealership management systems and data management services. While the products of the consolidated entity are used globally, sales originate from one geographical segment, Australia. www.infomedia.com.au 59 notes to financial statements 33. FINANCIAL INSTRUMENTS (a) Interest rate risk The consolidated entity's exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities, both recognised and unrecognised at the balance date, are as follows: Financial Instruments (i) Financial Assets Cash Receivables - trade Total financial assets (ii) Financial Liabilities Commercial bill Trade and other creditors Finance lease liability Total financial liabilities Floating interest rate 1 year or less Fixed interest rate maturing in: Over 1 to 5 years More than 5 years 2001 $'000 2000 $'000 2001 $'000 2000 $'000 2001 $'000 2000 $'000 2001 $'000 2000 $'000 16,852 - 16,852 1,243 - 1,243 - - - - 5,000 - - 5,000 - - - - 101 101 - - - - - 51 51 - - - - 85 85 - - - - - 40 40 - - - - - - - - - - - - - - (b) Terms, conditions and accounting policies (i)The consolidated entity's policies, including the terms and conditions of each class of financial asset, financial liability and equity instrument, both recognised and unrecognised at balance date, are as follows: RECOGNISED FINANCIAL INSTRUMENTS BALANCE SHEET NOTES ACCOUNTING POLICIES (i) Financial Assets Receivables - trade Unlisted Shares (ii) Financial Liabilities Trade and other creditors 6 10,11 16 Trade receivables are carried at nominal amounts due less any provision for doubtful debts. A provision for doubtful debts is recognised when collection of the full nominal amount is no longer possible. Unlisted shares are carried at the lower of cost or recoverable amount. Dividend income is recognised when dividends are declared by the investee. Liabilities are recognised for amounts to be paid in the future for goods ad services received, whether or not billed to the Company. Finance lease liability 17,20 The lease liability is accounted for in accordance with AASB 1008. (iii) Equity Ordinary Shares (iv) Derivatives 22 Ordinary share capital is recognised at the fair value of the consideration received by the Company. Forward Exchange Contracts 33(d) The consolidated entity enters into forward exchange contracts where it agrees to sell specified amounts of foreign currencies in the future at a predetermined rate. The objective is to protect the consolidated entity against the possibility of loss from future exchange rate fluctuations. The forward exchange contracts are charged to the profit and loss except those relating to hedges of specific commitments which are included in the measurement of the sale or purchase. 60 www.infomedia.com.au Financial Instruments (i) Financial Assets Cash Receivables - trade Total financial assets 2001 $'000 - 7,487 7,487 (ii) Financial Liabilities Commercial bill Trade and other creditors Finance lease liability Total financial liabilities - 1,991 - 1,991 TERMS AND CONDITIONS Credit sales are on terms up to 30 days. The unlisted shares held at balance date are ordinary shares. Trade liabilities are normally settled in 30 day terms. As at balance date, the Company had an average finance lease term of three years. The average discount rate implicit in the lease is 8%. The security over finance leases is disclosed in notes 17 and 20. Details of shares issued at balance date are set out in note 22. N/A - not applicable for non-interest bearing financial instruments. Non-interest bearing Total carrying amount as per the balance sheet Weighted average effective interest rate 2000 $'000 - 3,003 3,003 - 2,248 - 2,248 2001 $'000 2000 $'000 16,852 7,487 24,339 - 1,991 186 2,177 1,243 3,003 4,246 5,000 2,248 91 7,339 2001 % 4.56 N/A - - N/A 8.1 - 2000 % 5.07 N/A - 7.64 N/A 8.0 - (c) Net fair values The aggregate net fair value of financial assets and financial liabilities, both recognised and unrecognised, at balance date are not significantly different from their carrying amount in the balance sheet. (d) Credit risk exposure The consolidated entity's maximum exposures to credit risk at balance date in relation to each class of recognised financial assets, other than derivatives, is the carrying amount of those assets as indicated in the balance sheet. The maximum credit risk does not take into account the value of any collateral or other security held, in the event other entities/parties fail to perform their obligations under the financial instruments in question. In relation to derivative financial instruments, whether recognised or unrecognised, credit risk arises from the potential failure of counterparties to meet their obligations under the contract or arrangement. The consolidated entity's maximum credit risk exposure in relation to these is as follows: forward exchange contracts - the full amount of the currency it will be required to pay or purchase when settling the forward exchange contract, should the counterparty not pay the currency it is committed to deliver to the company. At balance date the net amount was $5,956,558 (2000: $1,242,010). Concentrations of credit risk A majority of the consolidated entity's electronic cataloguing sales are invoiced directly to vehicle manufacturers or their national distributors. Consequently, rather than the consolidated entity collecting individual sales subscriptions from individual subscribers, it receives monthly payments from a small number of credible companies. - - - Credit risk in trade receivables is managed in the following ways: credit sales are on terms up to 30 days; an agent acts on the company's behalf in foreign locations; and subscribers must sign a standard user agreement, accepting terms and conditions. 34. ECONOMIC DEPENDENCY A large proportion of the consolidated entity's sales are to the one vehicle manufacturer, Ford-Werke AG. www.infomedia.com.au 61 directors’ declaration In accordance with a resolution of the directors of Infomedia Ltd, I state that: In the opinion of the directors: (a) The financial statements and notes of the Company and of the consolidated entity are in accordance with the Corporations Act, including: (i) giving a true and fair view of the Company's and consolidated entity's financial position as at 30 June 2001 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards and Corporations Regulations 2001; and (b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. On behalf of the Board Richard David Graham Chairman Sydney, 28 August 2001 62 www.infomedia.com.au audit report INDEPENDENT AUDIT REPORT To the members of Infomedia Ltd Matters relating to the Electronic Presentation of the Audited Financial Report This audit report relates to the financial report of Infomedia Ltd for the year ended 30 June 2001 included on Infomedia Ltd’s web site. The company’s directors are responsible for the integrity of the Infomedia Ltd’s web site. The audit report refers only to the statements named below. 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. Scope We have audited the financial report of Infomedia Ltd for the financial year ended 30 June 2001, as set out on pages 40 to 62, including the Directors' Declaration. The financial report includes the financial statements of Infomedia Ltd, and the consolidated financial statements of the consolidated entity comprising the Company and the entities it controlled at year's end or from time to time during the financial year. The Company's directors are responsible for the financial report. We have conducted an independent audit of the financial report in order to express an opinion on it to the members of the Company. Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable assurance whether the financial report is free of material misstatement. Our procedures included examination, on a test basis, of evidence supporting the amounts and other disclosures in the financial report, and the evaluation of accounting policies and significant accounting estimates. These procedures have been undertaken to form an opinion whether, in all material respects, the financial report is presented fairly in accordance with Accounting Standards, other mandatory professional reporting requirements and statutory requirements, in Australia, so as to present a view which is consistent with our understanding of the Company's and the consolidated entity's financial position and performance as represented by the results of their operations and their cash flows. The audit opinion expressed in this report has been formed on the above basis. Audit Opinion In our opinion, the financial report of Infomedia Ltd is in accordance with: (a) the Corporations Act including: (i) giving a true and fair view of the Company's and the consolidated entity's financial position as at 30 June 2001 and of their performance for the year ended on that date; and (ii) complying with Accounting Standards and the Corporations Regulations 2001; and (b) other mandatory professional reporting requirements. Ernst & Young E A Lang Partner Sydney, 28 August 2001 www.infomedia.com.au 63 additional information TOP TWENTY SHAREHOLDERS AS AT 4 SEPTEMBER 2001 NAME SHARES % OF ISSUED CAPITAL RANK Wiser Laboratory Pty Limited Yarragene Pty Limited Citicorp Nominees Pty Limited Chase Manhattan Nominees Limited Rentamobile Pty Limited Mr Ian Joicey National Nominees Limited Commonwealth Custodial SServices Limited Westpac Custodian Nominees Limited Mr Andrew Pattinson Perpetual Trustees Nominees Limited Colonial Investment Services Limited Bond Street Custodians Limited JP Morgan Custodial Services Pty Limited Mr Gary Martin Queensland Investment Corporation Cogent Nominees Pty Limited Equity Trustees Limited ANZ Nominees Limited Wiser Centre Pty Limited 100,277,501 45,844,445 34,798,144 29,073,395 28,577,154 15,238,080 9,091,454 6,935,197 5,562,139 4,344,758 2.994,701 1,956,052 1,715,280 1,711,959 1,483,048 1,378,594 1,188,501 1.117,962 1,115,576 1,000,000 31.09 14.21 10.79 9.01 8.86 4.72 2.82 2.15 1.72 1.35 0.93 0.61 0.53 0.53 0.46 0.43 0.37 0.35 0.35 0.31 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 INFOMEDIA LTD - RANGE OF SHARES AS AT 4 SEPTEMBER 2001 RANGE HOLDERS UNITS % OF ISSUED CAPITAL 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - Over Total 196 652 200 216 68 1,353 143,271 2,122,212 1,734,958 6,702,351 311,843,145 322,545,937 0.04 0.66 0.54 2.08 96.68 100 64 www.infomedia.com.au corporate directory INFOMEDIA LTD Registered Head Office 1300 Pittwater Road Narrabeen NSW 2101 Telephone: (02) 9913 4700 Facsimile: (02) 9970 8833 Internet: www.infomedia.com.au DIRECTORS Mr Richard Graham, Chairman and CEO Mr Barry Ford, Non-executive Director Ms Fran Hernon, Non-executive Director Mr Myer Herszberg, Non-executive Director Mr Ian Joicey, Executive Director COMPANY OFFICERS Mr Nick Georges, Company Secretary Mr Peter Adams, Chief Financial Officer AUDITORS Ernst & Young The Ernst & Young Building 321 Kent Street Sydney NSW 2000 SHARE REGISTRY Computershare Registry Services Pty Limited GPO Box 7045 Sydney NSW 1115 LAWYERS Cowley Hearne Level 10 60 Miller Street North Sydney NSW 2060 Microcat, Partfinder, Datateck, and Microcat 1-2-3 are registered trademarks, and FRESH, LIVE, Lubrication & Tune-up Guide, SIP, AuzCom, OLGA, AutoLedgers, InfoCentre, DataVision, IMT, and the 'parts rainbow device' all trademarks of Infomedia Ltd for its business processes and software and documentation products. www.infomedia.com.au 65 I n f o m e d a i L t d 2 0 0 1 a n n u a l r e p o r t ABN 63 003 326 243 2001 annual report 

Continue reading text version or see original annual report in PDF format above