Results and achievements at a glance
Continued financial growth
Sales revenue increased by 12.5 per cent to $69.6 million. Net profit after tax increased 12.9 per cent over the
previous financial year to $20.7 million.
Continued subscription growth
Subscriptions to our Electronic Catalogues Division products grew by 10.6 per cent to 51,524 units through
organic expansion in all markets.
Continued strong EBITDA margins
Our EBITDA margin (i.e. EBITDA/sales) for the year was 51.3 per cent, even after taking into account setup costs
associated with the creation of our European subsidiary in the fourth quarter.
Continued record R&D investment
Our investment into research and development was $3.6 million, as we continue to improve and expand
our portfolio of software products.
Continued employment expansion
Employee numbers increased by 19.9 per cent to 205 and arose mainly from the creation of the international
Customer Service Centre in Sydney, Australia, the European office in Cambridge, England, and production and
development personnel in all divisions.
Continued product commercialisation
The Data Management Division began to commercialise Superservice Menus™ in Australia. The
subscription results for the first 10 months of introduction exceeded the first 24 months of the original
introduction of Microcat®.
Continued good governance
The Committees of the Board, (Audit & Risk, Corporate Governance and Remuneration & Nomination)
determined the appropriate approaches to adopt in applying the ASX Good Corporate Governance and Best
Practice Recommendations to Infomedia’s circumstances.
Established IFM Europe Limited
From 1 July 2004 our wholly owned subsidiary, IFM Europe Limited, took over the obligations
previously performed by our European agent, positioning Infomedia to sell directly and support its
industry-leading products.
Established new headquarters
During the year Infomedia purchased, and relocated to, its new corporate headquarters at Frenchs Forest, NSW.
The new facility is expected to serve the growth of the Company for many years and will preserve the substantial
capital improvements required for the kind of work the Company performs.
Established international Customer Service Centre
Infomedia established its new international Customer Service Centre, concurrent with the opening of the
new headquarters. The Centre’s team of professional, multilingual staff currently serve European customers
during their local business hours.
www.infomedia.com.au
1
2
www.infomedia.com.au
chairman’s letter
Dear Fellow Shareholders,
I take pleasure in presenting your company’s Annual Report for
the 2004 financial year and commending it to you.
Infomedia has achieved its eighth consecutive year of revenue and
profit growth. Sales revenue increased by 12.5 per cent over FY2003
to $69.6 million. Net profit after tax increased by 12.9 per cent over
the previous financial year to $20.7 million.
Earnings per share rose by 12.7 per cent from 5.65¢ per share in FY2003
to 6.37¢ per share in FY2004. A fully franked dividend of 1.9¢ was paid
to shareholders of record at 7 September 2004. This, combined with
the earlier interim dividend declared on 24 February 2004 of 1.9¢,
brings the total franked dividend for the year to 3.8¢ per share.
You can review the financial performance in more detail in the
Audited Financial Report starting on page 18 of this Report and in
the Statement of Financial Performance.
It has been an active year on all fronts. The Electronic Catalogues
Division’s EPC subscriptions grew by 10.6 per cent from 46,580
subscriptions at the start of the year to 51,524 at 30 June 2004.
The Data Management Division began commercialising its new
Superservice Menus™ product which has received positive customer
reactions. The Business Systems Division revenues grew by 24.5 per
cent as the Australian dealer management system market continues
to consolidate toward two or three major providers.
Throughout the year, the Board has worked diligently to analyse
the approach to adopt in applying the ASX Corporate Governance
Council’s Principles of Good Corporate Governance and Best Practice
Recommendations in a way that is appropriate to Infomedia’s
particular circumstances. You’ll be pleased with the professionalism
with which the Directors have applied themselves to this task.
Details of our practices can be found commencing on page 64,
entitled Corporate Governance Statement.
There are many good people who make Infomedia the special
company that it is and who enable it to produce the results it has
for many years. However, like they say in the fine print, ‘previous
performance is no assurance of future performance’, as challenges
and challengers constantly seek their own advantage. That aside,
I can let you know that your Company’s staff, Management and
Directors are committed to its long term growth and viability, and
will do all that is in their power to achieve those objectives.
I hope to see you at the Annual General Meeting in October.
Respectfully Yours,
Richard David Graham
Chairman and CEO
www.infomedia.com.au
3
company profile
Infomedia Ltd provides specialised IT software solutions
and services to automotive associated businesses throughout
In early 2000, the Company began to supplement its organic
expansion with the acquisition of another Australian EPC maker,
the world and appliance whitegoods businesses
in the
Datateck Publishing Pty Ltd, who also brought content development
Asia Pacific region.
and strong automotive data analysis skills with them. Later that
The Company was established in Frenchs Forest (Sydney) in 1988 as
a distributor of computer products.
In 1990, Infomedia established a software development division
to create specialised electronic selling and cataloguing solutions,
incorporating multimedia and advanced programming technology.
“Infomedia is an innovator in automotive selling
solutions and is a market leader in EPC reliability,
performance and customer service.”
Infomedia’s new headquarters in Frenchs Forest
In late 1991, it introduced its first product, Microcat®. Since then,
year, Infomedia became a public company, listing its shares on the
Microcat has been the Company’s flagship product and has gone on
Australian Stock Exchange in August.
to become a leading electronic parts catalogue (EPC) for the global
automotive industry.
Further acquisitions followed over the subsequent years, providing
greater depth to our EPC core, while positioning the Company to
take advantage of further software supply opportunities within
“The Company’s flagship product, Microcat,
the same customer base. Two of these acquisitions took us into
has gone on to become a leading electronic parts
the pivotal centre of automotive dealership businesses – dealer
catalogue (EPC) for the global automotive industry.”
management systems – while another expanded our American EPC
market share.
In 1994, the Company sold its computer products distribution
business to Unisys, to exclusively focus on software development.
Currently our EPC products have achieved more than 51,000
subscriptions in 166 countries, and are published in 25 languages.
During the balance of the 1990s the Company continued to develop
The Company has a solid domestic business providing a range of
its methods and expertise in this genre of software, domestically at
information technology solutions associated with retail automotive,
first and then internationally from 1996.
vehicle servicing and appliance whitegoods businesses.
4
www.infomedia.com.au
www.infomedia.com.au
5
Subscribing countries
More than 51,000 subscribers in 166 countries benefit from Infomedia’s EPC products
Infomedia produces versions of its automotive EPC products for most
The combined market share of the Company’s AutoLedgers® and
leading automotive franchises in Australia, including Daihatsu, Ford,
Nova™ dealer management system (DMS) products, makes it a top
Holden, Honda, Hyundai, Isuzu, Mitsubishi, Suzuki and Toyota; and
domestic provider, a position that grew further last year.
its whitegoods EPC products serve Electrolux and Whirlpool traders
in Australia and New Zealand.
International versions of Microcat are produced for Daihatsu,
Ford, Hyundai, General Motors, Land Rover, Lexus, Saturn and
Toyota dealers. Around the world, Microcat is synonymous with
Our unique range of service data publications are compiled and
published by our Data Management Division. The Datateck
Lubrication & Tune-up Guide™, Service Information Publications®
(SIP®) and the Lubricant Recommendation Guides™ are used
throughout Australia by franchised dealers and independent repair
high quality, ‘industrial strength’ EPC solutions. Infomedia is an
garages alike.
innovator in automotive selling solutions and is a market leader in
EPC reliability, performance and customer service.
The Company has a
track record of continuous product
improvement and practical research and development. As a result,
its EPC products have remained at the forefront of the genre
and new product innovations, such as its Superservice Menus™,
AutoMotives® (CRM), and Microcat® LIVE™ add to the growth
momentum of its portfolio.
4
www.infomedia.com.au
www.infomedia.com.au
5
the year in review
Richard Graham
Chairman and CEO
Infomedia Ltd
During FY2004, Infomedia continued to mature as a public
company and in its business genre. I am pleased that our
which took over the activities previously performed by our former
European agent. IFM Europe will represent and support the
financial achievements were within the guidance provided at
international products of all our divisions. This is a very exciting
the beginning of the year. The results represent another year
prospect – one that we expect will enhance our goodwill with
of growth in both revenue and profit and are in line with our
current and new customers as only personal representation can do.
strategy of developing products that generate a steady recurring
revenue stream.
Company Director, Andrew Pattinson, took up the role of Managing
Director of IFM Europe and relocated with his family to England
Each division has contributed to the Company in terms of growing
earlier this year.
revenues, new product development and management maturity and
strength. All of this is certain to reflect well on our future results too.
One of the year’s major achievements was the formation of an
international Customer Service Centre, located at Frenchs Forest.
The Data Management Division is beginning to commercialise
This professional and multilingual team currently serve our European
its recent development of the Superservice Menus product, the
customers during their normal business hours.
release of which has been a milestone in the Company’s progress
this year.
“Each division has contributed to the Company in terms
of growing revenues, new product development and
management maturity and strength.”
Since their North American launch in 1999, our electronic parts
catalogue (EPC) products have been growing in acceptance
and reputation. I am especially encouraged by our results when
one takes into account that we came into a market with several
established and strong competitors.
Despite this competition, we have played a good game and have
The Business Systems Division’s AutoLedgers and Nova dealer
won acceptance, by both dealers and automakers alike, as good
management system (DMS) products continued to be accepted by
competitors who bring fresh life and quality to retail automotive
more and more domestic dealers, winning ground and a positive
IT. Our North American subscriptions grew by 15 per cent during
reputation against incumbent suppliers.
the financial year. We are confident that our North American EPC
business will continue to grow and our Superservice Menus products
We established our first overseas subsidiary, IFM Europe Limited,
will find similar acceptance.
Cambridge, England – home to IFM Europe Limited
6
www.infomedia.com.au
www.infomedia.com.au
7
Management continues to value the good and cordial relationships
with our Asian automaker licensors. Without a doubt, the trust and
goodwill that has developed between Asia’s leading automakers
and Infomedia during the past decade will continue to grow into
mutually beneficial endeavours. Our staff skills include fluency in
Chinese, Japanese and Korean and each year our understanding and
respect for the cultural distinctions of Asia grow greater.
In December 2003, the Company purchased new corporate
headquarters at Frenchs Forest, New South Wales, and relocated
to the property following fit-out in April. Our new headquarters
remove a number of environmental and occupational risks inherent
in our previous Narrabeen location, where the Company had
resided since 1995.
The international Customer Service Centre communicates
with customers and prospects across Europe
There is still immense potential yet to be tapped for specialist
customers in serving themselves, using our online EPC. This is a
automotive and appliance industry software solutions. A large share
breakthrough that represents immense potential to dealership
of the EPC market is still held by the car manufacturers, many of
subscribers to better serve their customers at a lower cost per
whom use cataloguing and service systems developed in-house, and
transaction and to do so ‘24/7’. As Microcat MARKET grows in
whitegoods cataloguing is often still based on paper or microfiche.
acceptance, its licensing model is expected to make a meaningful
So the Company continues to seek contracts with manufacturers
contribution to the Company’s revenues from FY2006 onward.
around the world for new catalogue data licenses.
“There is still immense potential yet to
be tapped for specialist automotive and
As we say in Australia, Infomedia has become a ‘tall poppy’ in
its field. From humble beginnings just 15 years ago, Microcat has
become a leading global EPC product.
appliance industry software solutions.”
With this distinction come challenges as well as accolades. In
Such in-house EPC systems generally do not exhibit the level of
flexibility of Infomedia’s products, nor do any of them provide a
multi-franchise solution so vital to dealership cost and productivity
performance. I believe the Company has considerable opportunity
to continue growing its market share in all regions.
In FY2004, some automakers began to accept that our products can
play a valuable role beyond their dealers and can bring self-service
parts interpretation to the dealers’ customers. In Europe, Ford and
Toyota became the first data providers to allow us to initially release
Microcat FRESH® to our customers’ customers on a limited basis.
particular, because of our transparency and well-run business, we
have begun to attract the attention of various challengers.
However, if we have done our job right, which I believe we have,
we’ve built a sound commercial and technological foundation;
we’ve invested in future product development; and we’ve nurtured
a business culture that is committed to creating a company ‘built to
last’. We cannot avoid the challengers and challenges, but we can
face them, we can address them and we can surpass them.
Microcat® MARKET™ (previously branded Microcat FRESH) initiates
Richard David Graham
a new era in parts commerce, where dealers will assist their trade
Chairman and CEO
6
www.infomedia.com.au
www.infomedia.com.au
7
financial review
Peter Adams
Chief Financial Officer
Infomedia Ltd
The 2004 financial year represents another year of positive
financial growth for the Company.
At the beginning of the year we announced an expected growth of
sales revenue and profits of between 10 and 15 per cent over the
previous corresponding year. I am pleased to confirm the actual sales
revenue and profit increase achieved is near the midpoint of that
guidance, at 12.5 per cent and 12.9 per cent respectively.
Subscriptions for our Electronic Catalogues Division products grew
by 10.6 per cent to 51,524 units, driven by new sales in the North
American market and the continuing rollout of Microcat to Toyota’s
European dealers. Subscription growth is one of the primary means
by which we measure our business as each subscription represents a
recurring unit of revenue.
Infomedia and Toyota staff visiting a
Microcat FRESH pilot customer in Sweden
The Company’s revenue has exposure to foreign currencies –
principally the US dollar and the Euro. We have historically entered
into foreign currency forward exchange contracts to manage our
exposure to currency fluctuations.
“Subscriptions for our ECD products grew by
10.6 per cent to 51,524 units, driven by new sales in
the North American market and the continuing rollout
of Microcat to Toyota’s European dealers.”
Infomedia has benefited over the last couple of financial years
Employee numbers have increased by 19.9 per cent over the year to
from a favourable currency hedge rate relative to the spot market.
205, with most of the increase arising in the fourth quarter from the
For the US dollar, our average hedge rate for FY2004 was below
creation of an international Customer Service Centre that operates
US57.5 cents (FY2003: US55 cents). We have taken out hedging for
from our new headquarters in Sydney, Australia, and our new
FY2005 at rates averaging US66.4 cents to the Australian dollar for a
European subsidiary in Cambridge, England. We anticipate that this
substantial portion of our US dollar revenue stream.
will add future synergies and reduce future costs overall.
Our EBITDA margin (i.e. EBITDA/sales) for the year was 51.3 per
I believe the most significant event for the Data Management
cent even after taking into account setup costs associated with the
Division during FY2004 was the successful launch of Superservice
creation of our own European subsidiary in the fourth quarter. Our
Menus in Australia. From a financial perspective, Superservice
EBITDA margins have now averaged around 50 per cent for the
Menus has a recurring revenue model similar to Microcat, where
last three financial years and demonstrate the Company’s ability to
dealers subscribe to the product on a monthly basis.
control costs over an increasing revenue base.
Cost control, however, has not been at the expense of the future.
with a string of new dealerships signing up for the AutoLedgers
Our annual investment into research and development was at a
and Nova DMS products. The competition for dealer management
record $3.6 million, as we continue to improve and expand our
systems is very strong and to win this new business is a credit to
Our Business Systems Division emerged during the FY2004 year
portfolio of software products in all divisions.
the quality of our products and the people behind them. Much of
the incremental recurring revenue from these new licenses will be
recognised during FY2005.
8
www.infomedia.com.au
www.infomedia.com.au
9
With a recurring revenue model, Superservice Menus has the potential to become as successful as Microcat
Our European financial business model faces some additional
• we will have greater accounts receivable administration and
challenges going
into FY2005. Historically,
the Company’s
collection exposure.
accounting processes have leveraged off third parties and, in some
cases, the automakers who have performed a centralised billing and
Helping to moderate these challenges will be:
collection function.
• the continued organic growth from our EPC business;
“Our EBITDA margins have now averaged around
50 per cent for the last three financial years and
demonstrate the Company’s ability to control
costs over an increasing revenue base.”
While these processes remain as they were for most of our European
business, from 1 July 2004 Infomedia took direct responsibility
for billing our Ford subscribers across Europe, in many different
languages and currencies.
In FY2005, the Company will face new challenges:
• our revenues will be translated higher currency exchange
hedge rates;
• we will face new competition entering the European EPC
marketplace; and
• a stronger contribution from our Data Management Division and
its Superservice Menus products; and
• an
improving contribution
from our Business Systems
Division’s AutoLedgers and Nova products as they build on new
business successes and their growing market profile.
Peter Adams
Chief Financial Officer
8
www.infomedia.com.au
www.infomedia.com.au
9
electronic catalogues division
Gary Martin
General Manager
Electronic Catalogues Division
The Electronic Catalogues Division (ECD) develops and
licenses electronic parts and service catalogues to the
international automotive industry. It is presently the largest of
readying the European market for its launch during the first half of
the new financial year. Toyota and Ford dealers in Europe will be the
first dealers to experience the improved performance and potential
the three divisions.
of Microcat LIVE.
The Division’s core product, Microcat, has become a benchmark for
Totally reprogrammed using Microsoft’s .net technology, Microcat
electronic parts catalogues (EPCs) in its industry. It is an advanced
LIVE will deliver the long-awaited ability for dealers to receive
EPC that enables automotive dealers to increase efficiency, customer
‘interim updates’; that is to say, changes to the catalogue data that
satisfaction and parts sales.
may occur between the normal monthly DVD releases. However,
Microcat identifies the correct fitting part rapidly by matching
dealers can take this concept a step further by running the
application ‘live’ and accessing Infomedia’s realtime data servers
vehicle identification criteria to the application criteria for parts
via the Internet.
made by an automaker. The objective of this identification process
is to contribute to the vehicle being repaired quickly and accurately
Microcat LIVE also introduces numerous new functional features
by selling the right part the first time. It is a fast and accurate EPC that
that will empower all parts professionals to sell more quickly and
also offers effective integration with numerous dealership invoicing
more accurately.
and inventory control systems.
I look back on FY2004 as a year of opportunity and challenge,
Microcat LIVE. We anticipate that this will be completed during
where the collective effect has been the forging of a stronger and
FY2006. Once completed, the transition is expected to deliver
more competitively-enabled Electronic Catalogues Division.
savings to the Company by reducing costs to maintain, produce and
In time, all current versions of Microcat will be converted to
support our current technology.
EPC subscriptions continued to grow in all regions. There was a total
growth of 10.6 per cent or a net increase of 4,944 subscriptions
during the year. During much of the year the Division’s operational
objectives focused on: readying the new fortified versions of Microcat
LIVE and Microcat MARKET for release in the first half of FY2005;
planning for transitioning North American General Motors dealers
from PartsImager™ to a more feature-rich version of Microcat; dealing
with the unexpected changes in European and North American
representation; and preparing for the important transition from
exclusive to non-exclusive EPC supplier to European Ford dealers.
“Microcat LIVE is a dramatic evolution of
automotive EPC and will deliver the long-awaited
ability for dealers to receive ‘interim updates’.”
Microcat LIVE
Microcat LIVE is a dramatic evolution of automotive EPC, that is
a hybrid of traditional fixed-media (DVD-Rom) and online access.
Our developers have been evolving the complex behind-the-scenes
programming for LIVE, while our commercial teams have been
10
www.infomedia.com.au
www.infomedia.com.au
11
Microcat LIVE on DVD
Microcat MARKET
Microcat for North American General Motors dealers
For a number of years the Company has possessed a version of
During FY2004, members of our ECD development and product
Microcat suitable for use by dealers’ trade customers that would
management teams worked diligently to prepare for the first new
identify parts they need and allow them to order those parts
EPC offering in a decade for North American General Motors
from the dealer 24 hours a day, 7 days a week. We’ve called that
Microcat FRESH. Its use was generally restricted by our licensors
who wanted to feel more certain that parts e-commerce would
be received well by their dealers, especially after the negative
impression left in their minds as a result of the aggressive behaviour
of ‘parts aggregators’ and ‘parts exchange portals’ during the
heyday of the dot-com bubble.
“Microcat MARKET will deliver tangible productivity
and financial savings to both the dealership and its
customers, while extending ‘trading hours’ from
8am–5pm/Monday–Friday, to 24/7.”
However, after limited trials in Europe during FY2004, we will
commence a broader rollout of this technology in FY2005; initially
to European Toyota and Ford dealers and then to dealers in other
regions. Rebranded now as Microcat MARKET, this browser-based
system will allow a dealer to empower its customers to serve
The upgrade for GM customers from PartsImager to Microcat
has been a significant achievement
themselves, to select parts and place orders directly into the dealer’s
dealers. This new version of Microcat will upgrade all current
order processing system. Microcat MARKET will deliver tangible
PartsImager users, with greater features and less installation
productivity and financial savings to both the dealership and its
complexity. Infomedia developers regularly met with GM parts
customers, while extending ‘trading hours’ from 8am-5pm/Monday-
specialists to ensure that this version of Microcat achieved the higher
Friday, to ‘24/7’.
standards that dealers and automakers want from an EPC today.
Our teams learned a lot from the extensive dealer feedback received
during nearly six months of field trials. We created certain new
functionality for Microcat, as GM has some unique ways to utilise
their parts data that give their dealers added depth and accessibility.
The transition from PartsImager to Microcat commenced in August
2004 and is expected to conclude during Q3 FY2005. The transition
is being managed by our North American distributor, Automotive
Retail Group ADP-Dealer Services.
IFM Europe Limited
In October 2003, our European agent notified the Company that it
was exercising its option to terminate the agency agreement. The
termination notice caused us to immediately put plans into action to
replace the services that it had provided, plus those we anticipated
10
www.infomedia.com.au
www.infomedia.com.au
11
Microcat MARKET for Ford
electronic catalogues division
Gary Martin
General Manager
Electronic Catalogues Division
it to provide, post 1 July 2004, when Microcat for European Ford
North American distribution change
dealers entered into its competitive period.
During March 2004, we were informed by our distributor in the
Management formed a multi-disciplined taskforce to successfully
Americas, EDS, that its Automotive Retail Group (ARG) was going to
deal with the situation. As a result of this work, we amongst other
be acquired by ADP Inc., a large American IT company with significant
things: established a wholly owned subsidiary, IFM Europe Limited,
representation and influence in the automotive dealership market.
to be the body in situ to direct our European operations and to
liaise with our subscribers and licensors; contracted with European
collections specialists, Intrum Justitia, to support our finance team’s
expanded accounts receivable responsibilities; worked with Telstra
to establish an innovative and affordable system of pan-European
telecommunication links between our users and the Company;
and recruited, trained and outfitted a professional international
Customer Service Centre in Sydney – all of which was in place and
As ARG was a division that had serviced Infomedia and our EPC
distribution since August 2002, ADP invited the Company to assign
that agreement to it and hence become our new distributor. Our first
impression was that such a change would be positive for Microcat
distribution. During the next 12 weeks or so, we met with ADP
management to learn more about their company and to negotiate
a suitable assignment document. In August 2004, we executed the
operational by 1 July 2004.
assignment to ADP for the duration of the original term.
Training services
Infomedia’s online support resources already lead the EPC industry.
To provide an even better experience for our customers, we are now
raising the bar for EPC training.
Customer training is currently accessed in a number of ways,
including self-paced computer based training (CBT), video-on-
demand training, online interactive broadcast, and online user-
group sites that operate in local languages at appropriate local times
for dealership groups and individuals.
Initially, the video-on-demand training and online interactive
broadcasts will be provided to our European customers. To facilitate
this world-class service, we have built three small online video
training studios as part of our new international Customer Service
Centre at Frenchs Forest. The first of these went online in August
2004. A user can participate in an interactive broadcast through
their Internet browser. Participants can ask questions or give specific
examples of things they wish to understand.
We see training as an integral part of providing good customer
service and securing good customer satisfaction. It is yet another
feature that distinguishes Microcat from the competition.
Electronic Catalogues Division Production team
12
www.infomedia.com.au
Online training videos are created in house and delivered via the Internet for customers to access at any time
Opportunities and challenges
In terms of FY2005, it has its uncertainties particularly as they
ECD began to positively address its new opportunities and challenges
relate to the transition of the Ford Europe business from exclusive
in the FY2004 and will continue to do so during the FY2005 year.
to non-exclusive. At the time of this Report closing off for
“We see training as an integral part of providing
the level of subscription movement will be. However, I can say
good customer service and securing good customer
to you that whatever it may be, ECD will use that level to build a
typesetting (late-August 2004), it is still too early to gauge what
satisfaction. It is yet another feature that distinguishes
bigger market upon.
Microcat from the competition.”
We did so in direct and obvious ways referred to above, such as:
Aside from the temporary uncertainty associated with that
transition, I am confident that our other markets for subscriptions
contributing to the establishment of IFM Europe; readying the
will continue to grow.
new online Microcat products; and implementing a competitive
marketing strategy in the European Ford dealer arena.
Less obvious, however, was the maturing and cross-integration of
many ECD functions such as sales, marketing, brand management
and distribution, to begin to forge a united market-management
force for the products of all the Company’s divisions. To achieve this,
we have realigned resources in terms of staff responsibilities and we
have also revisited fundamentals such as packaging and branding to
Gary Martin
further strengthen the key Infomedia brands.
General Manager, Electronic Catalogues Division
www.infomedia.com.au
13
data management division
Michael Roach
General Manager
Data Management Division
The Data Management Division (DMD) researches, processes
and publishes technical repair-side data, illustrations and
documentation to facilitate more cost effective vehicle servicing
It was great to welcome Pennzoil to join the other 12 distributors
who use our LRG, PCLube™ and NetLube™ products. On several
occasions throughout the year, we were also able to assist a number
by automotive dealers and independent repairers.
of current customers by providing them with lubricant data to
support their entry into new vertical product streams.
As General Manager of DMD, I couldn’t be happier with the
prospects for the Division. DMD had a strong 16 per cent
revenue growth in FY2004, primarily through its traditional
print publications and analytical consultancy. A small part of the
growth came through the partial domestic introduction of our new
Superservice Menus product.
Before I report about that exciting new product, let me provide
you with an update about the publication and analysis side of
the business.
Publications
During the financial year we published the 43rd annual edition of
the Datateck Lubrication & Tune-up Guide (LTG). This 968-page
repair-side reference book is arguably the most widely-used guide of
its kind in Australia. The (calendar year) 2004 edition went on sale in
March and the first quarter sales of the guide are 107 per cent higher
than those of the 2003 edition, despite having a higher cover price.
Our analysts made several structural enhancements to the LTG
format, such as removing the older carburettor and distributor
2004 Lubrication & Tune-Up Guide™
sections and updating them with the newer electronic fuel injection
Partfinder® Whitegoods EPC
specifications and wheel alignment sections. Of course, all the new
model-year vehicles were added too.
DMD creates and publishes the Partfinder® EPC for the appliance
whitegoods industry. In FY2004, Whirlpool Australia Pty Ltd signed a
“During the year, we won regular contracts to
3-year agreement for Partfinder to be supplied to their agents in the
produce pricing, service and accessories
guides for Holden and Toyota.”
region. Whirlpool joins Electrolux in recognising and adopting the
many advantages of our Partfinder EPC solution for their Australian
and New Zealand appliance agents. I am confident that this product
segment will continue to provide growth impetus for the Division,
Our Lubricant Recommendation Guides™ (LRGs), which we
produce for Australia’s leading lubricant product distributors also
had a good year. The LRG is both a traditional (paper) and online
database publication where one can find each distributor’s correct
both domestically and overseas.
Analytical consulting
products for a range of machinery, including automobiles, jet skis,
Our automotive analyst section is well recognised for its ability
lawn mowers and chain-saws, to name a few. Our LRG is the data
to produce accurate data. During the year, we won contracts
source behind-the-scenes supporting the distributors’ product
to produce pricing, service and accessories guides for Holden
recommendation websites.
and Toyota.
14
www.infomedia.com.au
www.infomedia.com.au
15
We were awarded a parts cataloguing contract with Holden to
catalogue data for their SUP (import) vehicles such as Astra, Barina and
Vectra. Daewoo also awarded the Division with a parts cataloguing
contract which involves both the cataloguing of parts data as well
as supporting their dealer network with its parts enquiries. Like the
others, this area of our business continues to grow as a result of the
excellent service that DMD offers in the area of automotive research.
Superservice Menus
During FY2004, DMD launched a new and exciting application
called Superservice Menus, which has the potential to become as
widely used as Microcat, both domestically and internationally.
Superservice Menus provides accurate,
detailed service quotations in seconds
Superservice Menus
is a high-performance service quoting
and prospects, when they look at the product, that the menus are of
application that helps dealers provide an accurate, detailed,
high quality and have been prepared by experts.
competitive and profitable service quotation in seconds. It does
this by combining in-depth DMD service repair research, vehicle
identification information, and detailed repair checklists with its
Opportunities
unique interpretation application.
Since joining Infomedia in 2000, the Data Management Division
Within Australia, we currently produce Superservice Menus for Ford,
(Datateck) has been making modest but steady revenue growth in
our traditional and continuing endeavours of publications, analytical
Mitsubishi and Toyota dealerships, and are piloting the product with
consulting and whitegoods EPC.
Daihatsu and Hyundai dealers. Response from North American
and European interests for the product is also very encouraging
During the past two years, we have also invested skill and financial
and holds a lot of potential to make a material recurring revenue
resources into the development of the innovative Superservice
contribution in the coming years.
Menus and a small portfolio of other online resources. This dual
“Superservice Menus has the potential to
become as widely used as Microcat, both
domestically and internationally.”
approach of investing in the future, while realising the worth of
existing assets, is proving to be sound and shrewd leadership by our
senior management team and the Board.
Our staff in the Division are exceptionally committed to our success
and have delivered quality products, while under the pressure of
The substantial development work which is initially required to
tight timelines to meet specific commercial windows of opportunity.
create Superservice Menus for any given automotive franchise also
I can say personally that it is an honour to work with them. I believe
forms a significant barrier to entry. Our team of technical analysts
we will realise the potential of all our DMD products, especially
gathers information from six to eight different data sources, then
that potential which Superservice Menus holds in store.
analyses and processes it into individual service quotations, check-
sheets and invoicing detail. We have raised the bar even higher by
making the system multilingual and multi-franchise.
The other main element that sets us apart from would-be competitors
Michael Roach
is the quality of our work. It is immediately apparent to customers
General Manager, Data Management Division
14
www.infomedia.com.au
www.infomedia.com.au
15
business systems division
Damon Fieldgate
General Manager
Business Systems Division
Infomedia’s Business Systems Division (BSD) develops and
provides the comprehensive information and data processing
solutions required to operate and manage today’s complex full-
service automotive dealerships.
•
AutoLedgers is a powerful high-end DMS suitable for the largest to
medium-sized automotive dealerships. Its primary form of delivery
is via an online ASP method. It is a mature and proven system
that is continuously improved and serves all areas of dealership
business. A number of new features were added during FY2004
These systems, referred to as dealer management systems (DMS),
to keep pace with the changing needs of our clients and the
help account for all aspects of dealership operations and processes:
competitive nature of the market.
from inventory control to accounting statements; from vehicle sales
contract generation to customer relationship management; from
OEM reporting to service workshop scheduling.
•
Nova is also a very effective DMS that is primarily used by medium
to smaller dealerships in Australia, and as of FY2005, New Zealand.
While it also supports all areas of a dealer’s business, its efficient
and compact design makes it easy for a dealership with limited
“DMS customer expectations of the software, the
local IT resources to operate reliably day after day. In FY2004,
services and the supplier are rising. Infomedia is well
the Nova development team completed version 10 of the system,
prepared to meet these changing expectations.”
which introduced a dynamic new graphical user interface.
BSD is a leader in domestic DMS sales and installations. Our
AutoLedgers and Nova brand systems have positive reputations
among their users. During FY2004 the Division contracted for new
dealership installations, up to the limit of its current installation
DMS customer expectations of the software, the services and
the supplier are rising. Infomedia is well prepared to meet these
changing expectations and, to some degree, is in fact driving them.
For example, we have set the commercial agenda by:
capacity, and experienced a growth of 25 per cent over FY2003.
•
publishing transparent subscription prices, which allow dealers to
In early FY2003 the Division commenced a process of changing
the way we had previously gone to market with our products. We
determine a precise price for DMS ‘subscriptions’ or ‘seats’, fully
inclusive of licensing, upgrades and support;
began to withdraw from selling computer hardware, third party
•
quickly incorporating new obligations imposed by their OEM or
software and telecoms facilities, and transitioned solely to selling
by changes in legislation, without an extra charge; and
and supporting its DMS software solutions. With the professional
aid of Infomedia’s corporate systems team we had, by the end
•
unbundling computer hardware and telecoms, while supporting
dealers to purchase them from a best-price supplier;
to mention just a few ways.
of FY2004, succeeded in making the withdrawal from non-core
activities and, in particular, telecoms provisioning. In the process, an
improved telecommunication strategy was implemented that gave
the dealers greater bandwidth at a lower cost. Doing so made our
core strategy of delivering our AutoLedgers DMS via online access
more affordable too.
Our annual revenue was reduced by approximately $750,000 as we
phased out these non-core activities. However, it boosted our focus
onto our core business of software development, sales and support
which, by the end of the financial year, had delivered net revenue
growth, greater customer satisfaction and less staff and management
distraction on low margin activities.
To give you a very broad understanding of where our AutoLedgers
and Nova systems are positioned, let me offer the following:
Infomedia’s Future Motors™ Showcase replicates the operational
structures of a dealership and showcases the entire Infomedia
product portfolio
16
www.infomedia.com.au
www.infomedia.com.au
17
On track
Building for the future – rising to the challenge
Even though Infomedia has only been involved with DMS since 2000,
A full-service automotive dealership is a complex, highly regulated
its acceptance, influence and reputation has grown remarkably in
and dynamic business. This
is true both domestically and
that short time to where we are one of the top providers in Australia.
internationally. While we believe that AutoLedgers and Nova are
We have seen a remarkable growth in acceptance of our DMS
the best Australian dealer management systems in their respective
products during the FY2004 year. So much so that at the time of
classes, we know that we cannot rest on our laurels.
writing, the FY2005 sales pipeline is already nearing our limit for
accepting new customers.
“One of the biggest influences on prospective
clients when considering a new system is the
opinion and experience of currently satisfied
customers – these are our best references.”
During the year, a number of influential dealers signed to make the
transition to one of our dealer management systems, including: AC
To that end, the Company makes a strong annual investment in
the continuous improvement of our current products, as well as
complete product renewal when it comes to developing the next
generation dealership management platform. Currently our team of
programmers, analysts and system designers are working on such a
next generation system which, in my opinion, will set a much higher
competitive bar for comprehensiveness, system performance and
ease of functionality than anything on offer today. This internationally
focused DMS will bring the power of online computing to dealers in
McGrath Group, Bradstreet Group, Essendon Nissan, Tony Leahey
many regions beyond our home shores.
Ford, and SunFord, to name just a few. Our new FY2004 DMS
subscribers are anticipated to add over 800 new ‘seats’ by the time
of their full installation.
Our business principles at BSD are simple:
1) Conduct our business affairs ethically;
In addition, many our of current DMS users began to subscribe
to a number of our new speciality extension products, such as
our AutoMotives customer/showroom management application,
our AutoTerm® point and click terminal emulator, and our
2) Add value to each customer’s business by delivering
innovative products and reliable services;
3) Nurture an environment of mutual respect and honest
new AutoDocs™ electronic stationery management system.
communication between our customers and our staff; and
Subscriptions to our range of Auto-extension products grew
significantly across the range.
4) Charge fair and transparent prices.
Because we can clearly see that the domestic demand for an
These simple principles, plus our great products, our professional
Infomedia dealer management system is on the rise, we have been
and committed staff and our satisfied customers, fill me with
actively recruiting and managing the development of an expanded
excitement for our potential and the future.
customer field support team. During the year we consolidated our
east and west coast helpdesks into a single operation. These human
resource commitments are making Infomedia’s DMS support stand
out at a time when other competitors are cutting back on customer
service activities.
We know that the way to increase our number of clients is to
provide superior products and exceptional customer support. One
of the biggest influences on prospective clients when considering
a new system is the opinion and experience of currently satisfied
customers – these are our best references.
Damon Fieldgate
General Manager, Business Systems Division
16
www.infomedia.com.au
www.infomedia.com.au
17
directors’
report
Directors were in office from the beginning of
Directors were in office from the beginning
the financial year until the date of this Report,
of the financial year until the date of
this report, unless otherwise stated.
unless otherwise stated.
Barry Ford
Non-executive Director
(Chairman of Audit &
Risk Committee)
Geoffrey Henderson
Non-executive Director
(Chairman of Corporate
Governance Committee)
Andrew Pattinson
Executive Director
Barry Ford was appointed to the Infomedia
Board of Directors on 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.
Mr Ford’s experience has been mainly in the
automotive industry and in food processing
and distribution. His core expertise is in
finance and manufacturing. Mr Ford also
serves on Infomedia’s Remuneration &
Nomination Committee.
Geoffrey Henderson was appointed to
Andrew Pattinson was appointed to the
the Infomedia Board of Directors on 25
Board of Directors on 31 October 2001.
February 2003. Mr Henderson is a qualified
He has played a leading role in Infomedia
accountant and has had an extensive
for over 16 years, with six of these as
career spanning positions in Australia, New
Director of Production and Operations in
Zealand, Europe and North America. He
Sydney and two years as General Manager
worked in a number of financial positions
of the Data Management Division in
for Olympic Tyres in Melbourne for
Melbourne. He moved back to Sydney
eight years and then for the Ford Motor
in January 2002 to take on the role of
Company for 30 years. During his time
Infomedia’s Vice-CEO and subsequently
with Ford, Mr Henderson worked not
relocated to the United Kingdom to become
only in the Finance Division but also held
Managing Director of IFM Europe Ltd.
senior positions in the Supply and Parts
and Service Divisions. Immediately prior to
his retirement from Ford, Mr Henderson
headed up the company’s Asia Pacific Parts
and Service operation which covered Ford’s
parts and service activities in 12 countries
including Japan, South Africa, China, India
and Australia. Mr Henderson also serves on
Infomedia’s Audit & Risk Committee.
18
18
www.infomedia.com.au
www.infomedia.com.au
www.infomedia.com.au
19
Frances Hernon
Non-executive Director
(Chairman of Remuneration
& Nomination Committee)
Richard Graham
Chairman and CEO
Myer Herszberg
Non-executive Director
Frances Hernon was appointed to the
Richard Graham has held senior
Myer Herszberg has been a Director of
Infomedia Board of Directors on 19 June
management positions in the American
Infomedia since 1992. Mr Herszberg is
2000. Ms Hernon has extensive experience
and Australian computer industry since
the founder of Melbourne’s Denman
in media, publishing, marketing and
1977. Mr Graham has been Managing
Audio chain and has extensive consumer
technology. She has held senior editorial
Director/CEO and Chairman of Infomedia
electronics experience. He was active in
positions at News Ltd and Murdoch
since 1988. His previous positions within
bringing home computers to Australia in
Magazines and was General Manager,
the technology arena include: Marketing
the early 1980s and has also brought many
Harrison Communications, Director
Director, ComputerLand Corp (USA)
other leading edge electronic products to
of Publicity at Channel Ten, Managing
– 1977; General Manager, ComputerLand
Australia. He has extensive experience in
Editor of the NRMA’s member magazine
Australia Pty Ltd – 1980; Founder/Managing
the commercial property market, and is
The Open Road, Manager, Business
Director of Wiser-Microsoft – 1982;
active in a number of community service
Communications for NRMA, and Senior
Founder/Managing Director of Osborne
organisations.
Account Manager, Group IT&T for the
Computers (Australia) – 1982 and Founder/
Mr Herszberg serves on the company’s
Insurance Australia Group (IAG). Ms
Managing Director of Telecorp Pty Ltd
Audit & Risk, Corporate Governance,
Hernon is currently Corporate Affairs
– 1985. His personal interests include
and Remuneration & Nomination
Manager for Nestlé Australia Ltd. Ms
matters of the environment, nutrition, civil
Committees.
Hernon also serves on Infomedia’s
liberties, and democratic process.
Corporate Governance Committee.
18
www.infomedia.com.au
www.infomedia.com.au
www.infomedia.com.au
19
19
directors’
report continued
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:
Infomedia Ltd
Ordinary Shares
Options over Ordinary
Wiser Laboratory Pty Limited
Yarragene Pty Limited
Andrew Pattinson
Wiser Centre Pty Limited
Richard Graham
Barry Ford
Frances Hernon
Geoffrey Henderson
fully paid
100,277,501
39,421,599
4,407,716
1,000,000
926,559
116,666
5,000
-
Shares
-
-
582,000
-
-
-
-
-
Richard Graham is the sole director and beneficial shareholder of Wiser Laboratory Pty Limited. Richard Graham is a director of Wiser Centre
Pty Limited, trustee for the Wiser Centre Pty Ltd Superannuation Fund (formerly Sidford Superannuation Fund). Myer Herszberg is a director and
major shareholder of Yarragene Pty Limited.
PRINCIPAL ACTIVITIES
Infomedia Ltd is a company limited by shares that is incorporated and domiciled in Australia.
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, whitegoods and oil industries; and
• the 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 205 (2003: 171) full time employees as at 30 June 2004.
DIVIDENDS
Dividends paid or declared during the year:
• Interim dividend - 1.9 cents per share - fully franked
• Final dividend - 1.9 cents per share - fully franked
NET TANGIBLE ASSETS PER SECURITY
The consolidated entity’s net tangible assets per security are as follows:
• Net tangible assets per share at 30 June 2004
• Net tangible assets per share at 30 June 2003
REVIEW AND RESULTS OF OPERATIONS
$’000
6,170
6,174
Cents
8.6
4.9
The consolidated entity experienced improvement in sales and profits over the prior year. Revenue from ordinary activities increased by 16.5%
and profit from ordinary activities after income tax expense increased by 12.9%.
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.
20
www.infomedia.com.au
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 anticipate the 2005 financial year will present some material challenges to the Company as it transitions from exclusive to non-
exclusive in its largest EPC market – European Ford dealers – and as higher currency exchange rates make a negative impact on the Company’s
revenues and profits.
The Directors also anticipate that partially offsetting this negative impact will be:
• continued expansion of subscription revenues for Infomedia’s products in selected regions;
• obtaining broad market acceptance of Infomedia’s Internet trading versions of Microcat; and
• improving performance from non-EPC divisions.
Whilst there are several uncertain factors at the time of filing this report which can affect the Company’s FY2005 revenue and profit potential,
the Directors think it would be prudent to anticipate that the year’s revenue and profits will decline rather than rise. The longer term outlook
for the Company remains positive and growth oriented.
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
At the date of this report, there were 6,908,000 unissued ordinary shares under options. Refer to notes 27 and 29 for further details. Upon
the recommendation of the Remuneration & Nomination Committee, following its review of ASX CGC Recommendation 9.3 relating to Non-
executive Director remuneration, during the 2004 financial year Geoffrey Henderson voluntarily surrendered 100,000 options.
Shares issued as a result of the exercise of options
During the financial year, employees have exercised the option to acquire 16,000 fully paid ordinary shares in Infomedia Ltd at a weighted
average exercise price of $0.88. Since the end of the financial year, no further options have been exercised.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the year the Company paid a premium in relation to insuring Directors and other officers against liability incurred in their capacity as a
Director or officer of the Company.
The insurance contract specifically prohibits the disclosure of the nature of the policy and amount of premium paid.
DIRECTORS’ AND OTHER OFFICERS’ EMOLUMENTS
The Remuneration & Nomination Committee of the Board of Directors is responsible for reviewing compensation arrangements for the
Directors and the executive team. The Remuneration & Nomination Committee assesses the appropriateness of the nature and amount of
these emoluments 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.
The nature and amount of executive directors’ and officers’ emoluments was determined with regard to a number of factors, including the
individual’s specific responsibilities and performance, market benchmarking, and the Company’s overall financial performance.
Details of the nature and amount of each element of the emolument of each Director of the Company and each of the five executive officers of
the Company receiving the highest emolument for the financial year are as follows:
www.infomedia.com.au
21
directors’
report continued
EMOLUMENTS OF DIRECTORS OF INFOMEDIA LTD
Annual Emoluments
Long Term Emoluments
Base fee
$
237,445
197,697
42,800
42,800
42,800
42,800
Bonus
$
18,000
-
-
-
-
-
Other
$
-
28,554
-
-
-
-
Andrew Pattinson
Richard Graham
Myer Herszberg
Barry Ford
Frances Hernon
Geoffrey Henderson
Options
Number
Granted
-
-
-
-
-
-
Amortised
Cost
$
33,760
-
-
-
-
-
Super-
annuation
$
21,033
17,635
3,875
3,875
3,875
3,875
EMOLUMENTS OF EXECUTIVES OF INFOMEDIA LTD
Annual Emoluments
Long Term Emoluments
Options
Base fee
$
158,304
147,616
145,104
140,929
108,114
Bonus
$
24,000
24,000
12,000
12,000
6,000
Other
$
1,497
19,650
-
-
-
Employee
Share Plan
Number
Granted
$
2,000
2,000
2,000
2,000
2,000
450,000
-
-
-
-
Amortised
Super-
Cost
$
8,149
33,760
5,220
33,760
3,480
annuation
$
13,947
13,113
12,816
12,519
9,619
Guy Bryant
Gary Martin
Peter Adams
Nick Georges
Michael Roach
(a) The category ‘Other’ includes the value of any non-cash benefits provided.
(b) The value attributed to the 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 a Black Scholes option pricing model which takes into account factors
such as the exercise price, the current level of volatility of the underlying share price, the dividend yield, share price at grant date, risk free
rate and the time to maturity of the option.
22
www.infomedia.com.au
DIRECTORS’ MEETINGS
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings
attended by each Director were as follows:
Directors’
Meetings
Audit & Risk
Corporate
Governance
Remuneration &
Nomination
Meetings of Committees
9
9
9
5
9
9
9
4
-
4
-
3
4
-
4
-
4
-
4
-
4
5
-
-
-
5
4
5
Number of meetings held:
Number of meetings attended:
Richard Graham
Geoffrey Henderson
Andrew Pattinson
Myer Herszberg
Barry Ford
Frances Hernon
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.
TAX CONSOLIDATION
Effective 1 July 2002, for the purposes of income taxation, Infomedia Ltd and its 100% owned Australian subsidiaries have formed a tax
consolidated group. Members of the group have entered into a tax sharing arrangement in order to allocate income tax expense to the wholly
owned subsidiaries on a pro-rata basis. In addition the agreement provides for the allocation of income tax liabilities between the entities should
the head entity default on its tax payment obligations.
CORPORATE GOVERNANCE
In recognising the need for high standards of corporate behaviour and accountability, the Directors of Infomedia Ltd support and have adhered
to the principles of corporate governance. The Company’s Corporate Governance Statement begins on page 64.
Signed in accordance with a resolution of the Directors.
Richard David Graham
Chairman
Sydney, 25 August 2004
www.infomedia.com.au
23
statement of
financial performance
Year Ended 30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
2004
$’000
2003
$’000
2004
$’000
2003
$’000
Revenue from ordinary activities
Expenses from ordinary activities excluding borrowing costs
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
2(i)
2(ii)
2(iii)
3
5
73,005
(42,994)
62,652
(36,067)
68,817
(38,361)
60,584
(33,730)
(283)
(348)
(283)
(348)
29,728
(9,042)
26,237
(7,912)
30,173
(9,074)
26,506
(7,888)
20,686
18,325
21,099
18,618
Net exchange difference on translation of financial statements of
foreign controlled entity
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
9
9
-
-
-
-
-
-
20,695
18,325
21,099
18,618
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Franked dividends per share (cents per share)
23
23
4
6.37
6.36
3.80
5.65
5.65
3.40
24
www.infomedia.com.au
www.infomedia.com.au
25
statement of
financial position
At 30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
CURRENT ASSETS
Cash
Receivables
Inventories
Property held for resale
Other
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Receivables - wholly owned group
Investments
Property, plant and equipment
Intangible assets
Deferred research and 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 excluding tax liabilities
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profits
TOTAL EQUITY
2004
$’000
6,887
9,389
95
1,534
364
2003
$’000
19,352
9,313
106
-
540
2004
$’000
6,333
8,565
68
-
328
2003
$’000
19,001
8,807
86
-
529
18,269
29,311
15,294
28,423
-
-
23,026
23,671
3,708
748
51,153
69,422
5,103
-
1,140
1,673
1,503
9,419
4,173
704
3,605
8,482
17,901
51,521
-
-
7,082
27,265
2,748
1,206
38,301
67,612
3,823
2,384
963
1,176
5,304
13,650
8,128
680
2,004
10,812
24,462
43,150
23,180
247
5,344
19,547
3,708
678
52,704
67,998
4,713
-
950
1,673
1,057
8,393
4,173
296
3,605
8,074
16,467
51,531
6,742
-
4,602
22,520
2,748
1,040
37,652
66,075
3,693
2,384
808
1,155
4,820
12,860
8,128
354
1,977
10,459
23,319
42,756
17,488
17,474
17,488
17,474
9
34,024
51,521
-
25,676
43,150
-
34,043
51,531
-
25,282
42,756
6
7
8
9
10
12
13
14
15
16
17
18
19
20
21
22
5
5
24
www.infomedia.com.au
www.infomedia.com.au
25
statement of
cash flows
Year Ended 30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Borrowing costs
Income 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 property, plant and equipment
Purchase of EDS PartsImager catalogue business
Purchase of Australian Windows Publishing business
Purchase of VM Computer Services business
Purchase of shares in controlled entity
NET CASH FLOWS USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Repayment of borrowings
Loan to controlled entity for property purchase
Dividends paid on ordinary shares
Proceeds from exercise of options by employees
Finance lease principal
NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
NET (DECREASE)/INCREASE IN CASH HELD
Add opening cash brought forward
CLOSING CASH CARRIED FORWARD
24 (b)
2004
$’000
2003
$’000
2004
$’000
2003
$’000
67,616
(36,879)
428
(283)
(4,441)
26,441
(21,101)
2,515
-
-
-
-
60,551
(30,463)
723
(348)
(7,225)
23,238
(1,332)
-
(22,076)
(596)
(1,583)
63,771
(32,592)
410
(283)
(4,384)
26,922
(3,262)
1,770
-
-
-
-
(247)
58,256
(29,692)
845
(348)
(7,204)
21,857
(1,296)
-
(22,076)
(596)
-
-
(18,586)
(25,587)
(1,739)
(23,968)
7,000
(14,982)
-
21,779
(9,074)
-
(12,338)
(9,730)
-
(59)
7,000
(14,982)
(17,531)
(12,338)
14
(14)
2,916
(37,851)
567
18,785
19,352
(12,668)
19,001
6,333
14
(14)
(20,320)
(12,465)
19,352
6,887
21,779
(9,074)
-
(9,730)
-
(59)
2,916
805
18,196
19,001
26
www.infomedia.com.au
www.infomedia.com.au
27
notes to the financial
statements
30 June 2004
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 2001 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 economic 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 unrealised 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 the 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.
26
www.infomedia.com.au
www.infomedia.com.au
27
notes to the financial
statements continued
30 June 2004
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
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.
Translation of financial reports of overseas operations
All overseas operations are deemed self-sustaining, as each is financially and operationally independent of Infomedia Ltd.
The financial reports of overseas operations are translated using the current rate method and any exchange differences are taken directly
to the foreign currency translation reserve.
(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 two 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:
• Raw materials - purchase cost on a first-in-first-out basis; and
• Work-in-progress - cost of direct labour and materials.
(i) Property held for resale
Freehold property and other assets held for resale are held are valued at the lower of cost and net realisable value.
(j) 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.
28
www.infomedia.com.au
www.infomedia.com.au
29
(k) 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.
Major depreciation periods are:
Freehold buildings:
Leasehold improvements:
Plant and equipment:
Plant and equipment under lease:
(l) Leases
2004
40 years
5 to 20 years
3 to 15 years
3 years
2003
40 years
5 to 20 years
3 to 15 years
3 years
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 amortised over the
unexpired period of the lease or the estimated useful lives of the improvements, whichever is the shorter.
(m) 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 and software codes over key products. Intellectual property is amortised over its useful life,
being 10 years.
(n) 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.
28
www.infomedia.com.au
www.infomedia.com.au
29
notes to the financial
statements continued
30 June 2004
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(o) Provisions
Provisions are recognised when the economic entity has a legal, equitable or constructive obligation to make a future sacrifice of economic
benefits to other entities as a result of past transactions or other past events, it is probable that a future sacrifice of economic benefits will be
required and a reliable estimate can be made of the amount of the obligation.
A provision for dividends is not recognised as a liability unless the dividends are declared, determined or publicly recommended on or
before the reporting date.
(p) 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.
(q) 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.
(r) 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.
(s) 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 the copyright article has passed to the buyer with related support revenue being recognised
over the service period. Where the copyright article 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.
(t) Cost of goods sold
Cost of goods sold includes the direct cost of raw materials and agency costs associated with the manufacture and distribution of
the product.
(u) Taxes
Income taxes
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 is not carried forward as an asset unless the benefit is virtually certain of being realised.
30
www.infomedia.com.au
www.infomedia.com.au
31
Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
• where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is
recognised as part of the acquisition of the asset or as part of the expense item as applicable; and
• receivables and payables are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the
Statement of Financial Position.
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and
financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
Tax consolidation
Members of the group have entered into a tax sharing arrangement in order to allocate income tax expense to the wholly owned
subsidiaries on a pro-rata basis. In addition the agreement provides for the allocation of income tax liabilities between the entities should
the head entity default on its tax payment obligations.
(v) 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 and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee entitlements expected to be settled within 12
months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when
the liability is settled. 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 bonds 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:
• wages and salaries, non-monetary benefits, annual leave, long service leave and other leave entitlements; and
• other types of employee entitlements
are charged against profits on a net basis in their respective categories.
The value of shares issued under the employee share scheme described in note 27 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.
(w) 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.
30
www.infomedia.com.au
www.infomedia.com.au
31
notes to the financial
statements continued
30 June 2004
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(x) 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 EPS is calculated as net profit attributable to members, adjusted for:
• cost of servicing equity (other than dividends);
• the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
• other non-discretionary changes in revenue or expenses during the period that would result from the dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
32
www.infomedia.com.au
www.infomedia.com.au
33
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
2004
$’000
2003
$’000
2004
$’000
2003
$’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
- other persons/corporations
Total interest revenue
Gross proceeds on sale of non current assets
Foreign currency exchange gain
Other revenue
Revenues from ordinary activities
(ii) Expenses from ordinary activities excluding borrowing costs
Cost of goods sold
Salaries and wages (including on-costs)
Depreciation of non-current assets
- Buildings
- Leasehold improvements
- Office equipment
- Furniture and fittings
- Plant and equipment
- Plant and equipment under lease
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
Net book value of non-current assets disposed
Management fee paid to controlled entities
Bad and doubtful debts
Operating lease rental
Foreign currency exchange loss
Foreign currency contract costs amortised
Costs incurred in establishing European operations
Industrial relations dispute resolution including legal costs
Costs incurred for non-renewal of overseas distribution services
Costs incurred for defending an international trademark
Other expenses
Expenses from ordinary activities
69,567
61,813
65,715
59,623
-
428
428
2,515
193
302
73,005
14,604
15,191
267
571
1,022
68
293
-
-
723
723
-
-
116
62,652
12,647
12,478
62
96
935
70
243
6
726
411
1,137
1,770
195
-
68,817
13,980
12,291
5
531
904
64
293
-
141
704
845
-
-
116
60,584
12,306
10,438
7
55
815
67
243
6
2,221
1,412
1,797
1,194
1,276
1,829
771
3,876
1,893
-
103
563
-
345
487
-
-
-
1,129
1,492
732
3,353
-
-
66
606
291
374
-
206
909
282
805
1,679
771
3,255
1,214
1,097
103
903
-
345
-
-
-
-
684
1,455
732
2,871
-
1,097
65
684
291
374
-
206
909
282
3,711
42,994
3,443
36,067
3,376
38,361
3,013
33,730
32
www.infomedia.com.au
www.infomedia.com.au
33
notes to the financial
statements continued
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
2004
$’000
2003
$’000
2004
$’000
2003
$’000
2. PROFIT FROM ORDINARY ACTIVITIES
(CONTINUED)
(iii) Borrowing costs
Interest expense - other corporations
Finance charges - lease liability
Borrowing costs
(iv) Profit on sale of non current assets
Gross proceeds from the sale of non current assets
Net book value of non-current assets disposed
Profit on sale of non-current assets
(v) Research & Development Costs
(included within item 2(ii) above)
Total research and development costs incurred during the period
Less: research and development costs deferred
Net research and development costs expensed
14
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
Non-deductible depreciation
Amortisation of intangible assets
Additional research and development deduction
Intellectual property - copyright deduction
Other
Over provision of previous year
Income tax expense attributable to operating profit
283
-
283
2,515
(1,893)
622
3,551
(1,731)
1,820
8,918
152
35
80
470
(421)
(24)
(2)
(166)
9,042
346
2
348
-
-
-
283
-
283
1,770
(1,214)
556
346
2
348
-
-
-
2,091
(977)
1,114
3,551
(1,731)
1,820
2,091
(977)
1,114
7,871
9,052
7,951
44
28
2
399
(159)
(24)
-
(249)
7,912
152
32
2
319
(421)
(24)
-
(38)
9,074
44
25
2
267
(159)
(24)
-
(218)
7,888
34
www.infomedia.com.au
www.infomedia.com.au
35
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
4. DIVIDENDS PROPOSED OR PAID
(a) Dividends paid during the year
Franked interim - 1.90 cents (2003:1.50) per share
Final franked dividend - (2003: 1.90 cents)
Total dividends paid during the year
(b) Dividends proposed and not recognised as a liability:
Final franked dividend - 1.90 cents (2003: 1.90) per share
The tax rate at which dividends were franked is 30%
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
iiiiiiipayable as at the end of the financial year
The tax rate at which paid dividends have been franked is 30%
(2003: 30%). Dividends proposed will be franked at the rate of
30% (2003: 30%).
5. RETAINED PROFITS AND RESERVES
(a) Retained profits
Balance at the beginning of the year
Profit from ordinary activities after income tax expense
Adjustment arising from adoption of revised accounting standard:
AASB1044: Provisions, Contingent Liabilities and Contingent Assets
Total available for appropriation
Dividends provided for or paid
Balance at the end of the year
2004
$’000
6,170
6,168
12,338
2003
$’000
4,866
4,864
9,730
2004
$’000
6,170
6,168
12,338
2003
$’000
4,866
4,864
9,730
6,174
6,168
6,174
6,168
9,216
5,340
1,673
10,889
1,155
6,495
25,676
20,686
-
46,362
(12,338)
34,024
12,217
18,325
4,864
35,406
(9,730)
25,676
25,282
21,099
-
46,381
(12,338)
34,043
11,530
18,618
4,864
35,012
(9,730)
25,282
34
www.infomedia.com.au
www.infomedia.com.au
35
notes to the financial
statements continued
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
2004
$’000
2003
$’000
2004
$’000
2003
$’000
5. RETAINED PROFITS AND RESERVES
(CONTINUED)
(b) Foreign currency translation reserve
(i) Nature and purpose of reserve
The foreign currency translation reserve is used to record
exchange differences arising from the translation of the
financial statements of self-sustaining operations.
(ii) Movement in reserve
Balance at the beginning of the year
Gain on translation of overseas controlled entity
Balance at end of the year
6. RECEIVABLES (CURRENT)
Trade debtors
Provision for doubtful debts
Other debtors
Net foreign currency forward contracts receivable
(a) Terms and conditions relating to the above
financial instruments are set out in Note 33.
7. INVENTORIES (CURRENT)
Raw materials
At cost
Total inventories at the lower of cost and net realisable value
8. OTHER CURRENT ASSETS
Prepayments
9. RECEIVABLES (NON-CURRENT)
Wholly owned group
- subsidiary entities
-
9
9
8,486
(140)
8,346
278
765
9,389
95
95
364
364
-
-
-
6,240
(49)
6,191
127
2,995
9,313
106
106
540
540
-
-
-
7,653
(140)
7,513
287
765
8,565
68
68
328
328
-
-
-
5,736
(49)
5,687
125
2,995
8,807
86
86
529
529
31
-
-
23,180
6,742
36
www.infomedia.com.au
www.infomedia.com.au
37
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
2004
$’000
2003
$’000
2004
$’000
2003
$’000
10. INVESTMENTS (NON-CURRENT)
Investments at cost comprise:
Controlled entities - unlisted
Total investments in balance sheet
11
-
-
-
-
11. INTERESTS IN SUBSIDIARIES
Name
Country of
Percentage of equity interest
incorporation
held by the consolidated entity
IFM Europe Ltd
- ordinary shares
Infomedia
Investments Pty Ltd
United
Kingdom
- ordinary shares - $2 only
Australia
Datateck Publishing Pty Ltd
- ordinary shares - $4 only
Australia
AutoConsulting Pty Ltd
- ordinary shares - $1 only
Australia
2004
%
2003
%
100
100
100
100
-
100
100
100
247
247
247
-
-
-
247
-
-
-
-
-
-
-
36
www.infomedia.com.au
www.infomedia.com.au
37
notes to the financial
statements continued
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
2004
$’000
17,531
(210)
17,321
2,664
(419)
2,245
19,566
4,691
(2,582)
2,109
471
(121)
350
2,325
(1,324)
1,001
-
-
-
3,460
27,682
(4,656)
23,026
2003
$’000
2,860
(119)
2,741
1,367
(301)
1,066
3,807
4,291
(2,241)
2,050
592
(221)
371
1,899
(1,045)
854
165
(165)
-
3,275
11,174
(4,092)
7,082
2004
$’000
-
-
-
2,391
(283)
2,108
2,108
4,024
(2,130)
1,894
449
(108)
341
2,325
(1,324)
1,001
-
-
-
3,236
9,189
(3,845)
5,344
2003
$’000
647
(31)
616
1,115
(205)
910
1,526
3,817
(1,907)
1,910
571
(213)
358
1,847
(1,039)
808
165
(165)
-
3,076
8,161
(3,559)
4,602
12. PROPERTY, PLANT AND EQUIPMENT
Freehold land and buildings
At cost
Provision for depreciation
Leasehold improvements
At cost
Provision for amortisation
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 amortisation
Total plant and equipment
Total property, plant and equipment
At cost
Provision for depreciation and amortisation
Total written down amount
(a) Valuations
The fair values of freehold land and buildings have been determined
by reference to an independent valuation performed on a market value
basis being the estimated amounts for which an asset should exchange
on the date of valuation between a willing buyer and a willing seller in
an arms length transaction after proper marketing, wherein the parties
had each acted knowledgeably, prudently and without compulsion.
The fair value of land and buildings at the valuation date, being 7 June
2004, was $17,500,000.
38
www.infomedia.com.au
www.infomedia.com.au
39
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
12. PROPERTY, PLANT AND EQUIPMENT
(CONTINUED)
2004
$’000
2003
$’000
2004
$’000
2003
$’000
(b) Reconciliation of property, plant
and equipment carrying values
Freehold land and buildings
Carrying amount - opening balance
Additions
Disposals
Transfer to property held for resale
Depreciation
Carrying amount - closing balance
Leasehold Improvements
Carrying amount - opening balance
Additions
Disposals
Transfer to property held for resale
Depreciation
Carrying amount - closing balance
Office equipment
Carrying amount - opening balance
Additions
Additions through acquisition of business
Depreciation
Carrying amount - closing balance
Furniture and fittings
Carrying amount - opening balance
Additions
Additions through acquisition of business
Depreciation
Carrying amount - closing balance
Plant and equipment
Carrying amount - opening balance
Additions
Additions through acquisition of business
Disposals
Depreciation
Carrying amount - closing balance
Plant and equipment under lease
Carrying amount - opening balance
Depreciation
Carrying amount - closing balance
2,741
17,531
(1,247)
(1,437)
(267)
17,321
1,066
1,945
(98)
(97)
(571)
2,245
2,050
1,081
-
(1,022)
2,109
371
47
-
(68)
350
854
498
-
(58)
(293)
1,001
-
-
-
2,803
-
-
-
(62)
2,741
1,019
143
-
-
(96)
1,066
2,197
705
83
(935)
2,050
368
66
7
(70)
371
496
420
181
-
(243)
854
6
(6)
-
616
-
(611)
-
(5)
-
910
1,827
(98)
-
(531)
2,108
1,910
888
-
(904)
1,894
358
47
-
(64)
341
808
498
-
(12)
(293)
1,001
-
-
-
623
-
-
-
(7)
616
822
143
-
-
(55)
910
1,986
671
68
(815)
1,910
360
63
2
(67)
358
450
420
181
-
(243)
808
6
(6)
-
38
www.infomedia.com.au
www.infomedia.com.au
39
notes to the financial
statements continued
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
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 and 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 are set out in note 33.
2004
$’000
12,680
(3,462)
9,218
18,019
(3,566)
14,453
23,671
3,917
1,731
5,648
(1,940)
3,708
748
748
2,038
3,065
5,103
2003
$’000
12,812
(2,207)
10,605
18,469
(1,809)
16,660
27,265
2,940
977
3,917
(1,169)
2,748
1,206
1,206
1,137
2,686
3,823
2004
$’000
7,968
(1,562)
6,406
16,519
(3,378)
13,141
19,547
3,917
1,731
5,648
(1,940)
3,708
678
678
1,961
2,752
4,713
2003
$’000
8,101
(778)
7,323
16,969
(1,772)
15,197
22,520
2,940
977
3,917
(1,169)
2,748
1,040
1,040
1,120
2,573
3,693
40
www.infomedia.com.au
www.infomedia.com.au
41
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
17. INTEREST-BEARING LIABILITIES (CURRENT)
Bank loans
Lease liability
18. PROVISIONS EXCLUDING TAX LIABILITIES
(CURRENT)
Employee entitlements
19. DEFERRED REVENUE (CURRENT)
Revenue in advance
Deferred gain on foreign currency forward contracts
20. INTEREST-BEARING LIABILITIES
(NON-CURRENT)
Bank loans
Terms and conditions relating to the above financial instruments:
(i) The bank loan drawings have been made pursuant to a multi-
currency cash advance facility and are partially denominated in US
dollars. The facility terminates in August 2005 and is provided on
the condition of interlocking guarantees between the parent entity
and its controlled entities (the guarantors). All outstanding US dollar
denominated debt has been hedged at reporting date.
21. PROVISIONS EXCLUDING TAX
LIABILITIES (NON-CURRENT)
Employee entitlements
2004
$’000
-
-
-
1,140
1,140
777
726
1,503
4,173
4,173
2003
$’000
2,370
14
2,384
963
963
697
4,607
5,304
8,128
8,128
2004
$’000
-
-
-
950
950
726
331
1,057
4,173
4,173
2003
$’000
2,370
14
2,384
808
808
213
4,607
4,820
8,128
8,128
27
20(i)
27
704
704
680
680
296
296
354
354
40
www.infomedia.com.au
www.infomedia.com.au
41
notes to the financial
statements continued
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
22. CONTRIBUTED EQUITY
Issued and paid up capital
- shares fully paid 324,762,959 (2003: 324,422,732)
Movement in shares on issue
Beginning of the financial year
Issued during the financial year:
- Selective Share Plan
- Employee Share Plan
- Conversion of employee options
End of the financial year
(a) Employee Option Plan
2004
$’000
17,488
17,488
2003
$’000
17,474
17,474
2004
$’000
17,488
17,488
2003
$’000
17,474
17,474
2004
2003
Number of
shares
Number of
$’000
shares
$’000
324,422,732
17,474
323,734,073
17,474
27
27
-
324,227
16,000
-
-
14
432,393
256,266
-
-
-
-
324,762,959
17,488
324,422,732
17,474
A total of 550,000 options were issued to eligible employees during the year at an average exercise price of $0.76. Refer to Note 27.
(b) Terms and conditions of contributed equity
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the company, to participate in the proceeds
from the sale of all surplus assets in proportion to the number and amounts paid up on shares held. Ordinary shares entitle their holder to
one vote, either in person or by proxy, at a meeting of the company.
23. EARNINGS PER SHARE
The following reflects the income and share data used in the
calculations of basic and diluted earnings per share:
Earnings used in calculating basic and diluted earnings per share
Weighted average number of ordinary shares used in calculating
basic earnings per share
Effect of dilutive securities:
Share options
Employee share plan shares
Selective share plan shares
2004
$’000
20,686
2004
2003
$’000
18,325
2003
No. of shares
No. of shares
324,666,639
324,335,454
372,599
94,216
-
49,875
83,725
3,554
Adjusted weighted average number of ordinary shares used in
calculating diluted earnings per share
325,133,454
324,472,608
42
www.infomedia.com.au
www.infomedia.com.au
43
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
24. STATEMENT OF CASH FLOWS
(a) Reconciliation of 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 from sale of non current assets
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 flow from operating activities
(b) Reconciliation of cash
Cash balance comprises:
- cash on hand
- cash on deposit
(c) Financing facilities available
At reporting date, the following financing facilities had been nego-
tiated and were available:
Total Facilities:
USD13Million multi-currency cash advance facility
Less: amortised portion
Facility available before utilisation
Facilities used at reporting date:
Bank loans
Facilities unused at reporting date:
Bank loans
2004
$’000
2003
$’000
2004
$’000
2003
$’000
20,686
2,221
3,876
91
(622)
(2,254)
(1,731)
806
201
497
1,601
458
521
10
80
18,325
1,412
3,353
4
-
(1,378)
(977)
1,919
349
151
1,220
(585)
(372)
(36)
(147)
21,099
1,797
3,255
91
(556)
(851)
(1,731)
545
84
517
1,628
362
546
18
118
18,618
1,194
2,871
4
-
(2,259)
(977)
2,025
310
52
1,195
(567)
(377)
(39)
(193)
26,441
23,238
26,922
21,857
4,832
2,055
6,887
2,292
17,060
19,352
4,278
2,055
6,333
1,941
17,060
19,001
18,832
-
18,832
19,496
4,872
14,624
18,832
-
18,832
19,496
4,872
14,624
4,173
10,498
4,173
10,498
14,659
4,126
14,659
4,126
42
www.infomedia.com.au
www.infomedia.com.au
43
notes to the financial
statements continued
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
25. BUSINESSES ACQUIRED
(a) Australian Windows Publishing business
On 1 July 2002, Infomedia acquired the business of Australian
Windows Publishing Pty Limited. The components of the
2004
$’000
2003
$’000
2004
$’000
2003
$’000
acquisition were:
Consideration paid:
Prepaid option fee
Cash
Net assets acquired:
Inventory
Plant and equipment
Intellectual property including software code
Goodwill arising from acquisition
Total net assets acquired
(b) EDS PartsImager catalogue business
On 28 August 2002, Infomedia acquired the EDS PartsImager
catalogue business. The components of the acquisition were:
Consideration paid:
Cash
Net Assets Acquired:
Intellectual property including software code
Plant and equipment
Goodwill arising from acquisition
Total net assets acquired
(c) VM Computer Services business
On 31 March 2003, AutoConsulting Pty Ltd (a wholly owned con-
trolled entity) acquired the VM Computer Services dealer manage-
ment system business. The components of the acquisition were:
Consideration paid:
Cash
Net Assets Acquired:
Inventory
Plant and equipment
Intellectual property including software code
Goodwill arising from acquisition
Creditors
Provisions
Revenue in advance
Total net assets acquired
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60
596
656
4
70
450
132
656
22,076
14,519
181
7,376
22,076
1,583
5
20
1,500
336
(2)
(38)
(238)
1,583
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
60
596
656
4
70
450
132
656
22,076
14,519
181
7,376
22,076
-
-
-
-
-
-
-
-
-
44
www.infomedia.com.au
www.infomedia.com.au
45
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
26. EXPENDITURE COMMITMENTS
(a) 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
17
- aggregate finance lease expenditure contracted for at balance date
(b) Assets which are the subject of finance leases include
computer hardware and equipment.
(c) Operating leases have an average lease term of two years
(2003: two years). Assets which are the subject of operating
leases include office space.
2004
$’000
2003
$’000
2004
$’000
2003
$’000
540
625
476
987
1,165
1,463
-
-
-
-
-
-
-
15
-
15
(1)
14
14
14
337
500
837
-
-
-
-
-
-
-
355
839
1,194
15
-
15
(1)
14
14
14
44
www.infomedia.com.au
www.infomedia.com.au
45
notes to the financial
statements continued
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
27. EMPLOYEE ENTITLEMENTS AND
SUPERANNUATION COMMITMENTS
Employee Entitlements
The aggregate employee entitlement liability is comprised of:
Provisions (current)
Provisions (non-current)
Employee Option Plan
2004
$’000
2003
$’000
2004
$’000
2003
$’000
18
21
1,140
704
1,844
963
680
1,643
950
296
1,246
808
354
1,162
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 Op-
tions may be exercised in accordance with the date determined by the Board, which must be within four years of the option being granted.
Information with respect to the number of options granted under the employee share incentive scheme is as follows:
Notes
2004
2003
Balance at beginning of year
- granted
- forfeited
- exercised
Balance at end of year
Number of
options
27(a)
27(b)
27(c)
27(d)
8,891,583
550,000
(2,517,583)
(16,000)
6,908,000
Weighted
average
exercise
price
$1.07
$0.76
$1.57
$0.88
$0.86
Number of
options
3,840,584
6,619,000
(1,568,001)
-
8,891,583
(a) Options held at the beginning of the reporting period:
The following table summarises information about options held by employees at 1 July 2003
Number of options
54,333
431,750
450,000
1,288,500
18,000
30,000
5,949,000
570,000
100,000
Grant date
Earliest
vesting date
Expiry date
20/4/2001
20/4/2001
20/4/2001
23/4/2001
8/10/2001
23/3/2002
20/4/2004
18/12/2001
20/4/2004
16/4/2002
20/4/2004
26/3/2002
20/4/2004
8/10/2002
8/10/2004
12/11/2001
12/11/2002
12/11/2004
5/7/2002
1/7/2002
26/3/2004
20/5/2005
1/7/2004
1/8/2005
25/2/2002
25/2/2004
25/4/2006
Weighted
average
exercise
price
$1.47
$0.87
$1.18
-
$1.07
Weighted
average
exercise
price
$2.00
$1.80
$1.73
$1.59
$1.29
$1.43
$0.88
$0.73
$1.00
46
www.infomedia.com.au
www.infomedia.com.au
47
(b) Options granted during the reporting period:
The following table summarises information about options granted by Infomedia Ltd to employees during the year
Number of
options
100,000
450,000
Earliest
Grant date
vesting date
Expiry date
Weighted
average
exercise price
5/1/2004
5/1/2005
24/5/2004
24/5/2005
5/7/2007
31/5/2007
$0.83
$0.75
(c) Options exercised during the reporting period:
The following table summarises information about options exercised by employees during the year ended 30 June 2004:
Number of
options
Grant date
Exercise
Date
Expiry date
Weighted
average
exercise price
Proceeds
from shares
issued
Number of
shares
issued
Issue date
Fair value
of shares
issued
16,000
5/7/2002
4/8/2003
20/5/2005
$0.88
$14,080
16,000
18/8/2003
$16,320
Fair value of shares issued during the reporting period is estimated to be the market price of shares of Infomedia Ltd on the ASX as at the close
of trading on their respective issue dates.
There were no options exercised during the year ended 30 June 2003.
(d) Options held at the end of the reporting period:
The following table summarises information about options held by employees at 30 June 2004
Number of
options
18,000
30,000
5,933,000
477,000
450,000
Employee Share Plan
Earliest
Grant date
vesting date
Expiry date
8/10/2001
8/10/2002
8/10/2004
12/11/2001
12/11/2002
12/11/2004
5/7/2002
1/7/2002
26/3/2004
20/5/2005
1/7/2004
1/8/2005
24/5/2004
24/5/2005
31/5/2007
Weighted
average
exercise price
$1.29
$1.43
$0.88
$0.73
$0.75
The Company provides employees, not including Directors, the opportunity to acquire shares in the Company. The scheme applies to em-
ployees 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
twelve months and not more than twice in each financial year. Each 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 Board. Shares may not be offered to employees who are
ineligible, being employees with legal or beneficial interest in more than 5% of the Company or who control or may cast more than 5% of the
max imum 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 973,114 (2003: 625,715). The following table lists the number of shares issued by tranche since the inception of the plan:
Date of Issue
5/2/2001
5/10/2001
21/1/2002
19/7/2002
6/2/2003
21/7/2003
23/1/2004
15/7/2004
Total
Number of
shares
Rounded unit
price $
Value of
tranche $’000
60,168
64,872
74,765
125,280
130,986
169,644
154,583
192,816
973,114
1.81
1.57
1.27
0.77
0.87
0.79
0.93
0.75
109
102
95
96
114
134
144
145
939
46
www.infomedia.com.au
www.infomedia.com.au
47
notes to the financial
statements continued
30 June 2004
27. EMPLOYEE ENTITLEMENTS AND SUPERANNUATION COMMITMENTS (CONTINUED)
Selective Share Plan
Under the Selective Share Plan (SSP) and pursuant to the IPO, the Company has offered shares to selected persons on set offer dates. The par-
ticipants are limited to 17 individuals named in the schedule to the SSP. As at the date of this report all shares under the plan have been issued.
The consideration for each share offered was $nil. The set offer dates are provided below.
Date
3 July 2002
Number of shares
Status
432,393
Issued during the 2003 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 2004 were 9% (2003: 9%) of employee’s wages and salaries which are legally enforceable in Australia. The superannuation
plans provide accumulation benefits.
28. CONTINGENT LIABILITIES
(a) Interlocking Guarantees
The bank loan drawings have been made pursuant to a multi-currency cash advance facility. The facility has been provided on the condition of
interlocking guarantees between the Parent entity and its controlled entities (the guarantors).
29. DIRECTOR AND EXECUTIVE DISCLOSURES
(a) Details of Specified Directors and Specified Executives
(i) Specified directors
Richard Graham
Andrew Pattinson
Barry Ford
Myer Herszberg
Geoffrey Henderson
Frances Hernon
(ii) Specified executives
Gary Martin
Guy Bryant
Peter Adams
Nick Georges
Michael Roach
Chairman and Chief Executive Officer
Managing Director - IFM Europe Ltd
Non-executive Director
Non-executive Director
Non-executive Director
Non-executive Director
General Manager - Electronic Catalogues Division
Director of Technology
Chief Financial Officer
Company Secretary and General Counsel
General Manager - Data Management Division
48
www.infomedia.com.au
www.infomedia.com.au
49
notes to the financial
statements continued
29. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)
(b) Remuneration of Specified Directors and Specified Executives
The Remuneration & Nomination Committee of the Board of Directors is responsible for reviewing compensation arrangements for the
directors and the executive team. The Remuneration & Nomination Committee assesses the appropriateness of the nature and amount of these
emoluments 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.
The nature and amount of executive directors’ and officers’ emoluments was determined with regard to a number of factors, including the
individual’s specific responsibilities and performance, market benchmarking, and the Company’s overall financial performance.
Each executive director and officer has an employment contract with the company. The contracts provide a notice period not exceeding six
months. At the date of this report, the employment contract with the Chief Executive Officer was subject to renewal.
Primary
Cash
bonus
18,000
-
-
-
-
-
18,000
-
24,000
24,000
12,000
12,000
6,000
Salary &
fees
237,445
197,697
42,800
42,800
42,800
42,800
606,342
474,082
147,616
158,304
140,929
145,104
108,114
Post emp-
loyment
Equity
Total
Non monetary
Super-
benefits
annuation
Options
Employee/
Selective
share plan
-
28,554
-
-
-
-
28,554
9,210
19,650
1,497
-
-
-
21,033
17,635
3,875
3,875
3,875
3,875
33,760
-
-
-
-
-
54,168
44,384
33,760
39,747
13,113
13,947
12,519
12,816
9,619
33,760
8,149
33,760
5,220
3,480
-
-
-
-
-
-
-
296,498
2,000
2,000
2,000
2,000
2,000
310,238
243,886
46,675
46,675
46,675
46,675
740,824
863,921
240,139
207,897
201,208
177,140
129,213
700,067
642,380
78,000
-
21,147
11,668
62,014
46,675
84,369
77,960
10,000
9,000
955,597
787,683
Specified Directors
Andrew Pattinson
Richard Graham
Barry Ford
Myer Herszberg
Geoffrey Henderson
Frances Hernon
Total Remuneration:
Specified Directors
2004
2003
Specified Executives
Gary Martin
Guy Bryant
Nick Georges
Peter Adams
Michael Roach
Total Remuneration:
Specified Executives
2004
2003
48
www.infomedia.com.au
www.infomedia.com.au
49
notes to the financial
statements continued
30 June 2004
29. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)
(c) Remuneration options: Granted and vested during the year
During the financial year options were granted as equity compensation benefits to certain specified directors and certain specified executives
as disclosed below. The options were issued free of charge. The options may only be exercised one year after grant date and expire three years
from grant date. The options granted vest proportionately over a three year period.
Terms & Conditions for Each Grant
Specified Directors
Andrew Pattinson
Specified Executives
Gary Martin
Nick Georges
Guy Bryant
Peter Adams
Michael Roach
Vested
number
388,000
388,000
388,000
60,000
60,000
40,000
Granted
during the
Value per
option at
Exercise
price per
First exercise
Last exercise
year - number Grant date
grant date ($)
share ($)
date
date
450,000
24/5/2004
0.19
0.75
24/5/2005
31/5/07
(d) Shares issued on exercise of remuneration options
No options were exercised during the year by either specified directors or specified executives.
(e) Option holdings of specified directors and specified executives
Balance at
beginning
of period
1 July 2003
648,000
100,000
648,000
648,000
540,000
189,750
90,000
Specified Directors
Andrew Pattinson
Geoffrey Henderson
Specified Executives
Gary Martin
Nick Georges
Guy Bryant
Peter Adams
Michael Roach
-
-
-
-
450,000
-
-
2,863,750
450,000
Granted as
Options
Net change
Remuneration
Exercised
other
Balance
at end of
period
Vested at 30 June 2004
30 June 2004
Total
Not
exercisable
Exercisable
-
-
-
-
-
-
-
-
(66,000)
(100,000)
582,000
388,000
-
-
(66,000)
(66,000)
(450,000)
(99,750)
(30,000)
582,000
582,000
540,000
90,000
60,000
388,000
388,000
60,000
60,000
40,000
(877,750)
2,436,000
1,324,000
-
-
-
-
-
-
-
-
388,000
-
388,000
388,000
60,000
60,000
40,000
1,324,000
50
www.infomedia.com.au
www.infomedia.com.au
51
(f) Shareholdings of Specified Directors and Specified Executives
Shares held in Infomedia Ltd (number)
Specified Directors
Richard Graham
Myer Herszberg
Andrew Pattinson
Barry Ford
Frances Hernon
Geoffrey Henderson
Specified Executives
Gary Martin
Nick Georges
Michael Roach
Peter Adams
Guy Bryant
Total
Balance 1
July 2003
Granted as
remuneration
On exercise
of options
Net change
other
Balance 30
June 2004
102,204,060
39,421,599
4,407,716
116,666
5,000
-
1,685,538
274,845
6,929
15,929
2,454
-
-
-
-
-
-
2,347
2,347
2,347
2,347
2,347
148,140,736
11,735
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(979,967)
(260,416)
-
(11,500)
-
102,204,060
39,421,599
4,407,716
116,666
5,000
-
707,918
16,776
9,276
6,776
4,801
(1,251,883)
146,900,588
All equity transactions with specified directors and specified executives other than those arising from the exercise of remuneration options and
remuneration shares have been entered into under terms and conditions no more favourable than those the entity would have adopted if deal-
ing at arm’s length.
(g) Loans to specified directors and specified executives
There were no loans at the beginning or the end of the reporting period to specified directors and specified executives. No loans were made
available during the reporting period to specified directors or specified executives.
(h) Other transactions and balances with specified directors and specified executives
(i) 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 2004 of $256,044 (2003: $277,999) were on commercial terms.
(ii) Infomedia Ltd rents office space from Richard Graham. The total rent payments for the year ended 30 June 2004 of $163,382
(2003: $171,713) were on commercial terms.
(iii) Infomedia Ltd rents office space to Wiser Laboratory Pty Limited, a company in which Richard Graham is a director. The total rent
receipts for the year ended 30 June 2004 of $8,600 (2003: $10,053) were on commercial terms.
50
www.infomedia.com.au
www.infomedia.com.au
51
notes to the financial
statements continued
30 June 2004
Notes
CONSOLIDATED
INFOMEDIA LTD
2004
2003
2004
2003
$
$
$
$
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
143,000
130,000
113,050
110,500
- other services in relation to the entity and any other entity in the
consolidated entity
41,077
184,077
145,645
275,645
41,077
154,127
123,322
233,822
31. RELATED PARTY DISCLOSURES
Ultimate Parent
Infomedia Ltd is the ultimate Australian parent company
Wholly owned group transactions
(a) An unsecured, interest bearing loan of $18,987,298 (2003: $2,283,970) remains owing from Infomedia Investments Pty Limited to
Infomedia Ltd. Interest is charged at commercial rates.
(b) An unsecured, interest free loan of $146,818 was repaid to Infomedia Investments Pty Limited by Infomedia Ltd.
(c) An unsecured, interest free loan of $2,753,338 (2003: $2,840,933) remains owing from Datateck Publishing Pty Limited to Infomedia Ltd.
The loan is repayable in seven days upon demand.
(d) An unsecured, interest free loan of $1,350,873 (2003: $1,763,423) remains owing from AutoConsulting Pty Limited to Infomedia Ltd.
The loan is repayable in seven days upon demand.
(d) An unsecured, interest free loan of $104,304 (2003: $nil) remains owing from IFM Europe Ltd to Infomedia Ltd. The loan is repayable in
seven days upon demand.
(e) During the year a management fee of $1,097,484 (2003: $1,097,484) was paid to Datateck Publishing Pty Limited by Infomedia Ltd.
52
www.infomedia.com.au
www.infomedia.com.au
53
30 June 2004
32. SEGMENT INFORMATION
PRIMARY SEGMENT
Business segments
REVENUE
Sales revenue
Other revenue
Intersegment revenue
Total segment revenue
Unallocated revenue:
Interest revenue
Proceeds from sale of non current assets
Total consolidated revenue
RESULTS
Segment result
Unallocated items:
Interest revenue
Borrowing costs
Consolidated entity profit from ordinary activities before
income tax expense
Income tax expense
Consolidated entity profit from ordinary activities after income
tax expense
ASSETS
Segment assets
Unallocated assets:
Cash
Total assets
LIABILITIES
Segment liabilities
Other segment information:
2(i)
3
Electronic
Catalogue
Other
Division
Divisions
Eliminations
Notes
$’000
$’000
$’000
Total
$’000
62,868
495
-
63,363
6,699
-
717
7,416
-
-
(717)
(717)
69,567
495
-
70,062
428
2,515
73,005
32,091
(2,508)
-
29,583
428
(283)
29,728
(9,042)
20,686
62,535
6,887
69,422
17,901
21,101
2,221
3,876
-
-
-
-
-
55,879
6,656
16,724
1,177
Acquisition of property, plant and equipment, intangible assets
and other non-current assets
20,569
532
Depreciation
Amortisation
2(ii)
2(ii)
1,597
2,824
624
1,052
52
www.infomedia.com.au
www.infomedia.com.au
53
Other
Divisions
$’000
Eliminations
$’000
Total
$’000
5,074
-
660
5,734
-
-
(660)
(660)
61,813
116
-
61,929
723
62,652
28,192
(2,330)
-
25,862
notes to the financial
statements continued
30 June 2003
32. SEGMENT INFORMATION (CONTINUED)
PRIMARY SEGMENT
Business segments
REVENUE
Sales revenue
Other revenue
Intersegment revenue
Total segment revenue
Unallocated revenue:
Interest revenue
Notes
Electronic
Catalogue
Division
$’000
56,739
116
-
56,855
Total consolidated revenue
2(i)
RESULTS
Segment result
Unallocated items:
Interest revenue
Borrowing costs
Consolidated entity profit from ordinary activities before income
tax expense
3
Income tax expense
Consolidated entity profit from ordinary activities after income tax
expense
ASSETS
Segment assets
Unallocated assets:
Cash
Total assets
LIABILITIES
Segment liabilities
Other segment information:
Acquisition of property, plant and equipment, intangible assets
and other non-current assets
Depreciation
Amortisation
54
www.infomedia.com.au
41,376
6,884
23,105
1,357
23,571
2,016
2(ii)
2(ii)
901
2,445
511
908
723
(348)
26,237
7,912
18,325
48,260
19,352
67,612
24,462
25,587
1,412
3,353
-
-
-
-
-
www.infomedia.com.au
55
SECONDARY SEGMENT
While the products of the consolidated entity are used globally, the Company has only one material distinguishable geographical segment, Australia.
Segment products and locations
The consolidated entity’s operating divisions are organised and managed separately according to the nature of the products and the services
they provide, with each segment offering different products. Infomedia’s core business 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.
Included within ‘other divisions’ are the Data Management and Business Systems divisions. Data Management provides a range of specialised
data analysis and research services primarily to the automotive industry. Business Systems specialises in the development of business
management and accounting systems, electronic automotive trading networks and system integration for retail automotive dealerships.
All products are sourced from Australia.
Segment accounting policies
The group generally accounts for intersegment sales and transfers as if the sales or transfers were to third parties at current market prices.
Segment accounting polices are the same as the consolidated entity’s accounting policies described in Note 1. During the financial year, there
were no changes in segment accounting policies that had a material effect on the segment information.
54
www.infomedia.com.au
www.infomedia.com.au
55
notes to the financial
statements continued
30 June 2004
33. FINANCIAL INSTRUMENTS
33 (a) Interest rate risk
The consolidated entity’s exposure to interest rate risks and the effective interest rates of financial assets and financial liabilities at the balance
date are as follows:
Fixed interest rate maturing in:
Financial Instruments
Floating interest rate
1 year or less
Over 1 to 5 years More than 5 years
2004
$’000
2003
$’000
2004
$’000
2003
$’000
2004
$’000
2003
$’000
2004
$’000
2003
$’000
(i) Financial Assets
Cash
Receivables - trade
Net foreign currency
forward contracts
Total financial assets
(ii) Financial liabilities
6,887
19,352
-
-
-
-
6,887
19,352
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
14
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,370
4,173
8,128
2,384
4,173
8,128
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Trade and other creditors
-
Bank loans
Finance lease liability
4,173
10,498
-
-
Interest rate cap
(4,173)
(10,498)
Total financial liabilities
-
-
56
www.infomedia.com.au
www.infomedia.com.au
57
Non-interest
bearing
Total carrying
amount as per the
balance sheet
Weighted average
effective
interest rate
2004
$’000
2003
$’000
2004
$’000
2003
$’000
2004
2003
%
%
(i) Financial Assets
Cash
-
-
6,887
19,352
4.25
4.30
Receivables - trade
8,346
6,191
8,346
6,191
Net foreign currency
forward contracts
Total financial assets
(ii) Financial liabilities
765
2,995
765
2,995
9,111
9,186
15,998
28,538
N/A
N/A
N/A
N/A
Trade and other creditors
5,103
3,823
5,103
3,823
N/A
N/A
Bank loans
Finance lease liability
Interest rate cap
-
-
-
-
-
-
4,173
10,498
3.64
2.08
-
-
14
-
N/A
8.26
2.68
2.68
Total financial liabilities
5,103
3,823
9,276
14,335
56
www.infomedia.com.au
www.infomedia.com.au
57
notes to the financial
statements continued
30 June 2004
33. FINANCIAL INSTRUMENTS (CONTINUED)
33(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,
I both recognised at balance date, are as follows:
Recognised Financial
Balance Sheet
Accounting Policies
Terms and Conditions
Instruments
Notes
(i) Financial Assets
Receivables - trade
6
Trade receivables are carried at nominal amounts due less
Credit sales are on terms up to 30
any provision for doubtful debts. A provision for doubtful
days.
debts is recognised when collection of the full nominal
amount is no longer possible.
Unlisted shares
10,11
Unlisted shares are carried at the lower of cost or
The unlisted shares held at balance
recoverable amount. Dividend income is recognised
date are ordinary shares.
when dividends are declared by the investee.
(ii) Financial Liabilities
Trade and other
16
Liabilities are recognised for amounts to be paid in the
Trade liabilities are normally settled
creditors
Finance lease
liability
(iii) Equity
future for goods ad services received, whether or not
in 30 day terms.
billed to the Company.
17,20
The lease liability is accounted for in accordance with
As at balance date, the Company
AASB 1008.
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.
Ordinary shares
22
Ordinary share capital is recognised at the fair value of
Details of shares issued at balance
the consideration received by the Company.
date are set out in note 22.
(iv) Derivatives
Forward exchange
34(d)
The consolidated entity enters into forward exchange
contracts
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 deferred and
included in the measurement of specific commitments
which are deferred and included in the measurement
of the sale or purchase.
33 (c) Net fair values
All financial assets and financial liabilities have been recognised at the balance date at their net fair values. There were no unrecognised finan-
cial assets or financial liabilities at the balance date.
58
www.infomedia.com.au
www.infomedia.com.au
59
33 (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
ac count 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
$765,000 (2003: $2,995,000).
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;
- subscribers must sign a standard user agreement, accepting terms and conditions.
34. IMPACT OF ADOPTING AASB EQUIVALENTS TO IASB STANDARDS
Infomedia Ltd has commenced transitioning its accounting policies and financial reporting from current Australian Standards to Australian
equivalents of International Financial Reporting Standards (IFRS). The company has allocated internal resources and engaged expert
consultants to perform diagnostics and conduct impact assessments to isolate key areas that will be impacted by the transition to IFRS. As
a result of these procedures, Infomedia has graded impact areas as either high, medium or low and has established dedicated project teams
to address each of the areas in order of priority as represented by the gradings. As Infomedia has a 30 June year end, priority has been
given to considering the preparation of an opening balance sheet in accordance with AASB equivalents to IFRS as at 1 July 2004. This will
form the basis of accounting for Australian equivalents of IFRS in the future, and is required when Infomedia prepares its first fully IFRS
compliant financial report for the year ended 30 June 2006. Set out below are the key areas where accounting policies will change and
may have an impact on the financial report of Infomedia. At this stage the company has not been able to reliably quantify the impacts on
the financial report.
Hedge Accounting
Under AASB 139 Financial Instruments: Recognition and Measurement in order to achieve a qualifying hedge, the entity is required to meet
the following criteria:
- Identified the type of hedge - fair value or cash flow;
- Identify the hedged item or transaction;
- Identify the nature of the risk being hedged;
- Identify the hedging instrument;
- Demonstrate that the hedge has and will continue to be highly effective; and
- Document the hedging relationship, including the risk management objectives and strategy for undertaking the hedge and how effec-
tiveness will be tested.
This will result in a change in the entity’s current accounting policy which applies hedge accounting to its sales revenue under forward
foreign exchange contracts. The contracts are specific hedges and will be separately identified and documented in accordance with
the requirements of IAS 39. Under the new policy hedge accounting will require mark to market valuations with the movements directly
recorded in an equity reserve.
58
www.infomedia.com.au
www.infomedia.com.au
59
notes to the financial
statements continued
30 June 2004
34. IMPACT OF ADOPTING AASB EQUIVALENTS TO IASB STANDARDS (CONTINUED)
Goodwill
Under the Australian equivalent to IFRS 3 Business Combinations goodwill will no longer be able to be amortised but instead will be subject
to annual impairment testing. This will result in a change in the Group’s current accounting policy which amortises goodwill over its useful life
but not exceeding 10 years. Under the new policy, amortisation will no longer be charged, but goodwill will be written down to the extent it is
impaired. Reliable estimation of the future financial effects of this change in accounting policy is impracticable because the conditions under
which impairment will be assessed are not yet known.
Impairment of assets
Under the Australian equivalent to IAS 36 Impairment of Assets the recoverable amount of an asset is determined as the higher of net selling
price and value in use. This will result in a change in the Group’s current accounting policy which determines the recoverable amount of an
asset on the basis of discounted cash flows. Under the new standard there are more stringent tests that increase the risk that impairment of as-
sets may occur and potentially lead to future write-downs.
Share based payments
Under AASB 2 Share based Payments, the company will be required to determine the fair value of options issued to employees as
remuneration and recognise an expense in the Statement of Financial Performance. This standard is not limited to options and also extends
to other forms of equity based remuneration such as Infomedia’s Employee Share Plan. It applies to all share-based payments issued after 7
November 2002 which have not vested as at 1 January 2005. Estimation of the future financial effects of this change in accounting policy is
impracticable as the details of future equity based remuneration plans are unknown.
Only 450,000 options have been issued after 7 November 2002 and remain outstanding at balance date. The notional expense to 30 June
2004 pertaining to these options is $3,000 and will reduce opening retained earnings upon transition.
The value of shares issued under the employee share plan after 7 November 2002 to balance date and not recorded as an expense was
$392,000 and will reduce opening retained earnings upon transition.
60
www.infomedia.com.au
directors’
declaration
In accordance with a resolution of the Directors of Infomedia Ltd, I state that:
(1) 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 2001,
including:
(i) giving a true and fair view of the Company’s and consolidated entity’s financial position as at 30 June 2004 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, 25 August 2004
60
www.infomedia.com.au
www.infomedia.com.au
61
audit report
Independent audit report to members of Infomedia Ltd
Matters relating to the Electronic Presentation of the Audited Financial Report
This audit report relates to the fi nancial report of Infomedia Ltd (the company) for the year ended 30 June 2004 included on the
company’s web site. The company’s directors are responsible for the integrity of the company’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 fi nancial report to confi rm the information included in the audited fi nancial report
presented on the web site.
Scope
The fi nancial report and directors’ responsibility
The fi nancial report comprises the statement of fi nancial position, statement of fi nancial performance, statement of cash fl ows,
accompanying notes to the fi nancial statements, and the directors’ declaration for Infomedia Ltd (the company) and the consolidated
entity, for the year ended 30 June 2004. The consolidated entity comprises both the company and the entities it controlled during
that year.
The directors of the company are responsible for preparing a fi nancial report that gives a true and fair view of the fi nancial position
and performance of the company and the consolidated entity, and that complies with Accounting Standards in Australia, in accordance
with the Corporations Act 2001. This includes responsibility for the maintenance of adequate accounting records and internal controls
that are designed to prevent and detect fraud and error, and for the accounting policies and accounting estimates inherent in the
fi nancial report.
Audit approach
We conducted an independent audit of the fi nancial report in order to express an opinion on it to the members of the company. Our
audit was conducted in accordance with Australian Auditing Standards in order to provide reasonable assurance as to whether the
fi nancial report is free of material misstatement. The nature of an audit is infl uenced by factors such as the use of professional
judgement, selective testing, the inherent limitations of internal control, and the availability of persuasive rather than conclusive
evidence. Therefore, an audit cannot guarantee that all material misstatements have been detected.
We performed procedures to assess whether in all material respects the fi nancial report presents fairly, in accordance with the
Corporations Act 2001, including compliance with Accounting Standards in Australia, and other mandatory fi nancial reporting
requirements in Australia, a view which is consistent with our understanding of the company’s and the consolidated entity’s fi nancial
position, and of their performance as represented by the results of their operations and cash fl ows.
We formed our audit opinion on the basis of these procedures, which included:
· examining, on a test basis, information to provide evidence supporting the amounts and disclosures in the fi nancial
report, and
· assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of signifi cant
accounting estimates made by the directors.
62
www.infomedia.com.au
www.infomedia.com.au
63
While we considered the effectiveness of management’s internal controls over fi nancial reporting when determining the nature and
extent of our procedures, our audit was not designed to provide assurance on internal controls.
We performed procedures to assess whether the substance of business transactions was accurately refl ected in the fi nancial report.
These and our other procedures did not include consideration or judgement of the appropriateness or reasonableness of the business
plans or strategies adopted by the directors and management of the company.
Independence
We are independent of the company, and have met the independence requirements of Australian professional ethical pronouncements
and the Corporations Act 2001. In addition to our audit of the fi nancial report, we were engaged to undertake the services disclosed in
the notes to the fi nancial statements. The provision of these services has not impaired our independence.
Audit opinion
In our opinion, the fi nancial report of Infomedia Ltd is in accordance with:
(a) the Corporations Act 2001, including:
(i) giving a true and fair view of the fi nancial position of Infomedia Ltd and the consolidated entity at 30 June 2004 and of their
performance for the year ended on that date; and
(ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001; and
(b) other mandatory fi nancial reporting requirements in Australia.
Ernst & Young
J K Haydon
Partner
Sydney, 25 August 2004
www.infomedia.com.au
63
corporate
governance
CORPORATE GOVERNANCE STATEMENT
Introduction
Infomedia Ltd is committed to good corporate governance that enhances effectiveness and ensures an appropriate degree of
accountability and transparency to shareholders and other stakeholders.
This statement, which is current as at 25 August 2004, addresses the approach adopted by the Company to the ASX Corporate Governance
Council’s Principles of Good Corporate Governance and Best Practice Recommendations1.
The Board first began its consideration of the ASX Corporate Governance Guidelines during the course of the 2003 financial year. To aid the
review process the Board has made adjustments to the structure of its Committees so that they now comprise the Audit & Risk Committee, the
Remuneration & Nomination Committee and the Corporate Governance Committee. Each Committee is presently chaired by an Independent
Director with its membership determined by the Board on the basis of greatest expertise in the areas of relevance to each Committee.
Background details and meeting attendance records during financial year 2004 for members of each of the Audit & Risk, Remuneration & Nomination
and Corporate Governance Committees are set out on page 23 of the Directors’ Report.
The Board and its Committees endorse the ‘if not, why not?’ framework adopted by the ASX Corporate Governance Council. Throughout the
reporting year the Board has, upon the recommendation of the appropriate Committee, progressively updated existing charters, policies and
procedures and also adopted additional charters, policies and procedures where deemed necessary. Together these documents support the ASX
CGC Principles in a manner which the Board believes is appropriate to Infomedia’s circumstances.
Summaries of these various charters, policies and procedures will be progressively added to Infomedia’s website during the course of this year.
In considering the ASX CGC Recommendations, the Board and relevant Committees took as an overriding imperative the development and
articulation of appropriate charters, policies and procedures having regard to, among others, those factors identified in the ASX CGC Commentary
as relevant.
Of such factors, Infomedia’s size was important and, as suggested in the ASX CGC Commentary, in prioritising, a high level, top down approach
was adopted. Consequently, the various procedures and policies considered appropriate by Infomedia are at differing stages of development and
organisational implementation as permitted by its resources and as discussed in more detail below. Each of the Board’s Committees recognises
the intent of the ASX CGC Corporate Governance Guidelines and in financial year 2005 will continue the process of considering the way relevant
ASX CGC Recommendations should be applied in light of Infomedia’s particular circumstances.
A series of corporate governance and legal information sessions are planned for financial year 2005. These are aimed at providing organisation-
wide education about the existence, purpose and operating framework of the corporate governance initiatives, including the Company’s Code of
Conduct, Risk Management Policy, Market Disclosure Policy and policy for Share Trading by Company Directors, Officers and Employees.
The material set out in this Corporate Governance Statement has been prepared in accordance with the ASX Listing Rules and, in particular, ASX
CGC Recommendations 2.5, 3.3, 4.5, 5.2, 7.1 and 9.5. Unless otherwise indicated, the ASX CGC Recommendations were in place for the whole
financial year.
64
www.infomedia.com.au
ASX CGC Principle 1 – Lay solid foundations for management and oversight
Recognise and publish the respective roles and responsibilities of board and management
ASX CGC Principle 2 – Structure the Board to add value
Have a board of an effective composition, size and commitment to
adequately discharge its responsibilities and duties
ASX CGC Principle 8 – Encourage enhanced performance
Fairly review and actively encourage enhanced board and management effectiveness
ASX CGC Principle 9 – Remunerate fairly and responsibly
Ensure that the level and composition of remuneration is sufficient and reasonable and
that its relationship to corporate and individual performance is defined
The Company’s Constitution requires a minimum of three and a maximum of seven Directors, of whom at least two must ordinarily be resident
in Australia. Under the Company’s Constitution one third of the Directors, and any other Director not in such one third who has held office for
three years or more, other than the Chief Executive Officer, must retire by rotation each year. If eligible, the retiring Directors may offer themselves
for re-election.
The Infomedia Board comprises six Directors and details of the names, terms of office, committee memberships, meeting attendance record,
skills, experience and expertise of each, along with photographs, appear in the Directors’ Report on pages 18 and 19.
Since listing on the ASX CGC in August 2000 in particular, the composition and size of the Infomedia Board has been shaped by its Constitution
and the contribution Directors are able to make, both individually and collectively. An emphasis has, and through the interaction of the Board and
the Remuneration & Nomination Committee, will continue to be, placed on promoting, among other attributes, an appropriate mix of relevant
skills, independence, expertise, business knowledge and executive and non-executive participation.
ASX CGC Recommendation 1.1
A formal Charter of the Board of Directors was adopted in early July 2004 following careful and considered deliberation by both the Corporate
Governance Committee and the Board itself. As noted in the introduction above, the priority was to document an appropriate division of Board
and Management responsibilities.
The Board’s focus is on the Company’s objectives, determining the strategy for achieving those objectives and setting the overall policy framework
within which the business of the Company is conducted whilst ensuring that the Company operates in accordance with good management and
governance practices.
The Corporate Governance Committee was established to support the Board in the areas not covered by Audit & Risk and Remuneration &
Nomination Committees. The members of the Corporate Governance Committee are Geoffrey Henderson (Chair), Myer Herszberg and Frances
Hernon. Each is a Non-executive Director.
www.infomedia.com.au
65
corporate
governance continued
ASX CGC Recommendation 2.1
Traditionally, the Board has applied an executive director/non-executive director classification to its members. Following the appointment
of Geoffrey Henderson as an additional Non-executive Director in February 2003, the Infomedia Board has comprised four Non-executive
Directors and two Executive Directors.
Three of the Company’s Directors, Barry Ford, Frances Hernon and Geoffrey Henderson, clearly meet an objective assessment of quantitative,
qualitative and cumulative criteria for independence. A fourth Non-executive Director, Myer Herszberg, whilst being a major shareholder is
considered by the Board, having regard to quantitative, qualitative and cumulative criteria, to operate independently and objectively. As a result
the Board believes it comprises a majority of independent directors and so complies with ASX CGC Recommendation 2.1.
This independence will be reviewed periodically by the Board to ensure its continued good practice in this area. Ultimately, however, the Board
accepts that its members remain in office upon the vote of the Company’s shareholders and that they may elect members to the Board regardless
of their standing, independent or otherwise. In order to facilitate the discharge of their duties, including in respect of independent decision-
making, the Board confirmed in April 2004 its policy for Directors obtaining independent professional advice at the expense of the Company.
ASX CGC Recommendation 2.2 and ASX CGC Recommendation 2.3
The Board has considered the appropriateness for Infomedia of appointing an independent Chairman and, in consequence, splitting the role of
Chairman and Chief Executive Officer as proposed by ASX CGC Recommendations 2.2 and 2.3.
The Board is of the view that its independence as a whole is not compromised by the appointment of Richard Graham as Chairman and as Chief
Executive Officer and that it is in the best interests of the Company to retain the current structure.
The Board believes that at this time, in its stage of growth, Infomedia is best served by keeping a strong focus on the development and implementation
of strategic platforms. It believes that Richard Graham’s industry knowledge, both technological and automotive, uniquely positions him for the kind
of strategic thinking required of the Chairman and, that as its founder, his thorough understanding of the Company’s business from its inception
through its continued market and product expansion, positions him well for the day to day stewardship of the Company.
ASX CGC Recommendation 2.4 and ASX CGC Recommendation 9.2
The members of the Remuneration & Nomination Committee are Frances Hernon (Chair), Myer Herszberg and Barry Ford. Each is a Non-
executive Director. Upon the recommendation of the Remuneration & Nomination Committee, in April 2004 the Board adopted an amended
Remuneration & Nomination Committee Charter. During the reporting period the Remuneration & Nomination Committee also began
reconsidering and then formalising a policy for the appointment of directors and the procedures for their selection. The Committee intends
recommending both the policy and the procedures to the Board for consideration and adoption in the first six months of financial year 2005 and
will then make a summary of them available on the Infomedia website shortly thereafter.
ASX CGC Recommendation 8.1 and ASX CGC Recommendation 9.1
Upon recommendation of the Remuneration & Nomination Committee a Remuneration and Performance Evaluation Policy for Directors and
Senior Executives was adopted by the Board in July 2004.
66
www.infomedia.com.au
The Policy clearly outlines the criteria for assessing the performance of the Board as a whole, the Directors as individuals, the Chairman of
the Board and the Senior Executives, and aims to provide a framework for structuring total remuneration that will facilitate both the short and
long term growth and success of the Company, that is competitive with the market place and that is demonstrably linked to the Company’s
overall performance.
It is anticipated that from financial year 2005 onwards the annual performance evaluation process will be conducted in accordance with the
Remuneration and Performance Evaluation Policy for Directors and Senior Executives.
During this reporting period and in the process of developing the Remuneration and Performance Evaluation Policy for Directors and Senior
Executives, the Remuneration & Nomination Committee, in conjunction with Infomedia’s Human Resources Manager, reviewed the Company’s
remuneration and performance evaluation practices. The Committee made use of independent surveys commissioned from external specialist
organisations, and also utilised external market evidence to make recommendations with respect to the Senior Executives’ financial year 2005
salary packages.
In assessing remuneration levels of Non-executive Directors, regard was had to a number of factors including benchmarked industry practice
and the assumption of additional Committee responsibilities. In assessing remuneration levels of Executive Directors and other Senior Executives,
regard was had to a number of factors, including the individual’s specific responsibilities and performance, market benchmarking and the
Company’s overall performance. In preparing the remuneration information contained on pages 48 and 49 of the Directors’ Report, regard was
had to the ASX CGC Commentary accompanying ASX CGC Recommendation 9.1 and, in particular, the suggestions for disclosure.
ASX CGC Recommendation 9.3
In formulating the Remuneration and Performance Evaluation Policy for Directors and Senior Executives, regard was had to both market practice
and to the best practice guidance provided in the ASX CGC Commentary accompanying ASX CGC Recommendation 9.3.
Non-executive Directors are remunerated by way of fees and statutory superannuation contributions: they do not receive any additional
retirement benefits and nor do they currently participate in any of the Company’s incentive arrangements. Non-executive Directors have
previously received options, but this practice was reconsidered with the introduction of the Remuneration and Performance Evaluation Policy for
Directors and Senior Executives, as a result of Remuneration & Nomination Committee discussion on ASX CGC Recommendation 9.3 and the
accompanying ASX CGC Commentary. The Remuneration & Nomination Committee and in turn the Board will continue to monitor the issue as
each recognises that for smaller companies option-based remuneration may be an appropriate method of remunerating non-executive directors
when accompanied by an appropriate framework and proper disclosure.
Geoffrey Henderson had received 100,000 options upon his appointment as a Non-executive Director on 25 February 2003 and voluntarily
relinquished these on 4 June 2004.
ASX CGC Recommendation 9.4
The Company currently has two equity-based incentive plans: an Employee Option Plan applicable to certain eligible employees, including Senior
Executives and an Employee Share Plan, applicable to all permanent employees of one or more years of service, including Senior Executives but
excluding Executive Directors. These plans were established prior to Infomedia’s listing in August 2000. They were disclosed in the 14 July 2000
prospectus and operate in accordance with both the Corporations Act and the ASX Listing Rules.
www.infomedia.com.au
67
corporate
governance continued
Given this background, there is no present intention to obtain shareholder approval ahead of the issue of further securities under the Employee Option
Plan or the Employee Share Plan as proposed by ASX CGC Recommendation 9.4.
Further details of Senior Executive remuneration under these plans is included in the information contained on pages 22 and 50-51 of the
Directors’ Report.
ASX CGC Principle 3 – Promote ethical and responsible decision making
Actively promote ethical and responsible decision making
ASX CGC Principle 10 – Recognise the legitimate interests of stakeholders
Recognise legal and other obligations to all legitimate stakeholders
ASX CGC Recommendation 3.1 and ASX CGC Recommendation 10.1
A formal Code of Conduct was adopted in April 2004 following careful and considered deliberation during the financial year by both the Audit
& Risk Committee and the Board itself.
The Infomedia Code of Conduct applies to all Infomedia personnel including Directors, Senior Executives and employees and was developed
having regard to the ASX CGC Commentary accompanying ASX CGC Recommendations 3.1 and 10.1. Whilst Infomedia has long held and
emphasised personal integrity, respect and ethical business practices as core tenets, the Infomedia Code of Conduct strengthens the Company’s
commitment to them by further articulating the cultural values which permeate the Company and better informing its interactions with all non-
shareholder stakeholders.
Included in the series of corporate governance and legal information sessions planned for financial year 2005, will be sessions focusing on the
existence, purpose and operating framework of the Code of Conduct. A key aim is to promote greater awareness and use of enhanced procedures
for seeking guidance where areas of concern exist and for the notification of matters which potentially involve a compliance or business risk
element.
ASX CGC Recommendation 3.2
A formal Policy on Share Trading by Company Directors, Officers and Employees was originally established in October 2001 and was reviewed,
amended and adopted by the Infomedia Board in April 2004, upon the recommendation of the Corporate Governance Committee.
Principle 4 – Safeguard integrity in financial reporting
Have a structure to independently verify and safeguard the integrity of the company’s financial reporting
Principle 7 – Recognise and manage risk
Establish a sound system of risk oversight and management and internal control
Infomedia was required, by virtue of its inclusion in the S&P/ASX CGC All Ordinaries Index at the beginning of financial year 2004 to fully
comply throughout this reporting period with the ASX CGC Recommendations accompanying ASX CGC Principle 4, relating to audit committee
composition, operation and responsibility.
68
www.infomedia.com.au
ASX CGC Recommendation 4.1 and ASX CGC Recommendation 7.2
The Company’s financial reporting obligations for year 2004 have been fulfilled, as they have in previous years, in accordance with applicable legal
and accounting requirements: see the financial statements and notes contained in the Directors’ Report commencing on page 18 and the Independent
Audit Report appearing on page 62. Additionally, in response to ASX CGC Principle 7 external advisors recently commenced work on identifying,
reviewing, and where necessary documenting the finance area’s risk controls. At the date of this statement that process is not yet complete.
Against this background, and given also the stage of the Company’s development and the associated difficulties in identifying future risk along with
the inherent time and resource commitment involved in establishing and operating an effective risk management framework, the Chief Executive
Officer and the Chief Financial Officer do not regard it as appropriate that they provide the certifications under ASX CGC Recommendation 7.2
and in turn, the certification under ASX CGC Recommendation 4.1.
It is intended that the Audit & Risk and Corporate Governance Committees will continue to forge the development of the Company’s risk
management and internal control framework, so that next year the Chief Executive Officer and the Chief Financial Officer will be better placed
to provide the certifications proposed by ASX CGC Recommendation 7.2 and the certification required (as it then will be) by the Corporations
Act equivalent of ASX CGC Recommendation 4.1.
ASX CGC Recommendation 4.2, ASX CGC Recommendation 4.3 and ASX CGC Recommendation 4.4, ASX CGC Principle 7
Infomedia originally established an Audit Committee prior to its listing on the ASX in August 2000. Today it is known as the Audit & Risk
Committee and its members are Barry Ford (Chair), Myer Herszberg and Geoffrey Henderson. Each is a Non-executive Director.
The Board firmly believes the Audit & Risk Committee is of ‘…sufficient size, independence and technical expertise to discharge its mandate
effectively’. As noted in the discussion around ASX CGC Recommendation 2.1 above, although traditionally the Board has applied an executive
director/non-executive director classification to its membership, the Board believes that Barry Ford, Myer Herszberg and Geoffrey Henderson
meet an objective assessment of quantitative, qualitative and cumulative criteria for independence. As such the Committee meets the
requirements for an independent Chairman and a majority of independent directors.
A formal Audit & Risk Committee Charter was originally adopted in 2000 and an amended version approved by the Board in April 2004 following
careful and considered deliberation during the financial year by both the Audit & Risk Committee and the Board itself.
The Audit & Risk Committee acknowledges the importance of external auditor independence. The Company’s external auditor’s engagement
partner was rotated in financial year 2002. In response to both legislative change and to the ASX CGC Commentary, in the last quarter of financial
year 2004 the Audit & Risk Committee began reconsidering the policy for the selection and appointment of the Company’s external auditor and
the rotation of engagement partners. The Committee intends recommending formalised procedures to the Board for consideration and adoption
during financial year 2005, and will then make a summary of them available on the Infomedia website shortly thereafter.
ASX CGC Recommendation 7.1
Upon the recommendation of the Audit & Risk Committee, the Board adopted the Risk Management Policy in July 2004 following careful and
considered deliberation during the financial year by both the Audit & Risk Committee and the Board itself.
The Risk Management Policy allocates oversight responsibility to the Audit & Risk Committee whilst the establishment of risk management procedures,
compliance and control rests with Senior Executives and, at a daily operating level, with individuals as part of regular business conduct.
www.infomedia.com.au
69
corporate
governance continued
During the reporting period Senior Executives oversaw assessments of the Company’s current risk management and control practices and
discussed with the Audit & Risk Committee the process for further developing them in line with ASX CGC Principle 7.
Throughout financial year 2005 work will continue on updating and enhancing the Company’s existing gap analysis, risk analysis and risk profile.
As noted above, work recently commenced on reviewing, and where necessary documenting the finance area’s risk controls. Other priorities
identified by the gap analysis and risk profile will also be addressed in turn. With appropriate assistance from the Corporate Governance
Committee, the outcomes of these actions will be used to assist in testing internal controls and by the Audit & Risk Committee in discharging its
oversight and assessment functions.
ASX CGC Principle 5 – Make timely and balanced disclosure
Promote timely and balanced disclosure of all material matters concerning the company
ASX CGC Recommendation 5.1
A Market Disclosure Policy was adopted by the Board in April 2004 following careful and considered deliberation during the financial year by both
the Corporate Governance Committee and the Board itself.
The Market Disclosure Policy was developed having regard to the ASX CGC Commentary and suggested content accompanying ASX CGC
Recommendation 5.1.
ASX CGC Principle 6 – Respect the rights of the shareholders
Respect the rights of shareholders and facilitate the effective exercise of those rights
ASX CGC Recommendation 6. 1 and ASX CGC Recommendation 6.2
Through a series of initiatives Infomedia continues to demonstrate its commitment to promoting effective communication with all shareholders.
Such initiatives include the continued development of the Company website, where this Corporate Governance Statement, annual, half yearly
and quarterly reports, a synopsis of the Infomedia business model, media releases, achievements, share price information and the July 2000
prospectus, are available.
Infomedia is looking closely at how it might best and most cost effectively introduce e-communications to shareholders, and in the process, save
paper and assist in preserving the environment. Infomedia will carefully consider any e-communication initiative its share registry, or any other
provider, introduces in response to ASX CGC Recommendations 6.1 and 6.2.
Infomedia also acknowledges, and will consider and adopt as appropriate to its circumstances, the Guidelines for notices of meeting included in
the ASX CGC Commentary accompanying ASX CGC Recommendation 6.1.
Shareholder participation at general meetings is encouraged and Infomedia’s auditor, Ernst & Young, attends the annual general meeting and is
available to answer shareholder questions.
(Footnotes)
1 The ASX Corporate Governance Guidelines containing the ASX CGC Principles, the ASX CGC Recommendations and the ASX CGC Commentary
70
www.infomedia.com.au
additional
information
Top 20 shareholders as at 25 August 2004
Entity/Name
Shares
% of total
Rank
Wiser Laboratory Pty Ltd
Yarragene Pty Ltd
Westpac Custodian Nominees Ltd
RBC Global Services Australia Nominees Pty Ltd
JP Morgan Nominees Pty Ltd
Citicorp Nominees Pty Ltd
National Nominees Ltd
Mr Andrew Pattinson
Perpetual Trustee Company Limited
ANZ Nominees
Government Superannuation Office
Niako Investments Pty Ltd
The University of Melbourne
Wiser Centre Pty Ltd
Mr Richard Graham
HSBC Custody Nominees (Australia) Ltd
Victorian Workcover Authority
Mr Gary Martin
Mr Dan Salazar
Hot Springs Pty Ltd
Infomedia Ltd – Range of shares as at 25 August 2004
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,000 +
Escrowed
TOTAL
100,277,501
39,421,599
35,989,252
30,125,227
24,832,929
18,992,267
16,192,090
4,407,716
4,013,000
3,421,515
2,075,085
1,345,106
1,058,465
1,000,000
926,559
889,277
725,800
709,257
641,248
500,000
30.86
12.13
11.08
9.27
7.64
5.84
4.98
1.36
1.23
1.05
0.64
0.41
0.33
0.31
0.29
0.27
0.22
0.22
0.20
0.15
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Shareholders
Shares Held
% of Total
373
1,182
669
766
67
281,974
3,808,817
5,511,469
19,127,942
295,392,036
833,537
0.09
1.17
1.70
5.89
90.89
0.26
3,057
324,955,775
100.00
As at 25 August 2004 there were 137 shareholders holding less than a marketable parcel of 500 ordinary shares.
www.infomedia.com.au
71
corporate
directory
Infomedia Ltd
373 Warringah Road
Frenchs Forest NSW 2086
ABN 63 003 326 243
Telephone: (02) 9454 1500
Facsimile: (02) 9454 1844
Internet: www.infomedia.com.au
Directors
Richard Graham – Chairman and CEO
Andrew Pattinson – Executive Director and Managing Director, IFM Europe Limited
Barry Ford – Non-executive Director
Frances Hernon – Non-executive Director
Geoffrey Henderson – Non-executive Director
Myer Herszberg – Non-executive Director
Company officers
Nick Georges – Company Secretary
Peter Adams – Chief Financial Officer
Auditors
Ernst & Young
The Ernst & Young Building
321 Kent Street
Sydney NSW 2000
Share registry
Computershare Registry Services Pty Ltd
GPO Box 7045
Sydney NSW 1115
Lawyers
Cowley Hearne Lawyers Pty Limited
Level 10
60 Miller Street
North Sydney NSW 2060
72
www.infomedia.com.au
photographic
index
Page 2
Shae Condon, Infomedia Receptionist
and HR Administration Assistant
Page 4
Infomedia headquarters – Frenchs Forest, Australia
Page 6
IFM Europe Limited office – Cambridge, England
Page 7
Mikael Klockseth, Infomedia Customer Service Specialist
Page 8
Paul Waters, IFM Europe Client Manager at Toyota
dealership in Sweden
Page 12
Dan O’Shea, Infomedia Production Assistant
Page 13
Stephanie Maréchal, Infomedia Customer Service Specialist
Page 16
Infomedia Business Systems Division staff
demonstrating AutoLedgers
Page 18-19
Infomedia Board of Directors FY2004
Page 73
Michael Johnson, Infomedia Graphic Designer
and Courtney Sloane, Infomedia Marketing Assistant
AutoMotives, AutoLedgers, AutoTerm, Infomedia, Microcat, Microcat FRESH, Partfinder, and SIP are registered trademarks, and AutoDocs, AutoOffice, Datateck, Future Motors,
LIVE, Lubricant Recommendation Guides, Lubrication & Tune-up Guide, MARKET, NetLube, Nova, PartsImager, PCLube, Service Information Publications and SuperService
Menus are all trademarks of Infomedia Ltd for its business processes, software and documentation products. All other trademarks are the property of their respective owners.
AutoMotives, AutoLedgers, AutoTerm, Infomedia, Microcat, Microcat FRESH, Partfinder, and SIP are registered trademarks, and AutoDocs, AutoOffice, Datateck, Future Motors,
LIVE, Lubricant Recommendation Guides, Lubrication & Tune-up Guide, MARKET, NetLube, Nova, PartsImager, PCLube, Service Information Publications and SuperService
Menus are all trademarks of Infomedia Ltd for its business processes, software and documentation products. All other trademarks are the property of their respective owners.