Infomedia
Annual Report 06
s
t
n
e
t
n
o
C
Contents
Results at a Glance
Chairman’s Letter
Company Profile
History
CEO Report
CFO Report
Directors’ Report
Independence Declaration
Income Statement
Balance Sheet
Cash Flow Statement
Statement of Changes in Equity
Notes to the Financial Statements
Directors’ Declaration
Independent Audit Report
Corporate Governance Statement
Additional Information
Corporate Directory
01
02
04
05
06
10
12
24
25
26
27
28
29
82
83
84
96
97
© 2006 Infomedia Ltd. All rights reserved worldwide. This document may not be reproduced in whole or
in part without the express written permission of infomedia Ltd.
a
G
l
a
n
c
e
R
e
s
u
l
t
s
a
t
‘04
20.69
‘05
6.35
‘06
18.15
Results at a Glance1
Sales Revenue
(in $ millions)
‘04
69.57
‘03
61.81
NPAT
(in $ millions)
‘03
18.33
‘02
43.85
‘05
59.14
‘02
13.41
‘01
12.83
‘06
55.58
‘03
30.63
‘00
7.66
EBITDA
(in $ millions)
‘04
35.68
‘05
27.00
‘02
20.88
‘01
19.96
‘06
28.10
‘00
12.64
EPC Subscriptions
‘01
34.45
‘00
21.08
55,000
44,000
33,000
22,000
11,000
‘98
‘99
‘00
‘01
‘02
‘03
‘04
‘05
‘06
1 Chart data for FY2006 and FY2005 prepared under Australian equivalents to International Financing Reporting
Standards (AIFRS). Chart data for FY2004 and prior financial years prepared under Australian Generally
Accepted Accounting Principles (AGAAP).
infomedia.com.au 01
s
’
n
a
m
r
i
a
h
C
r
e
t
t
e
L
“...we will reap the benefi ts of new and organic
growth in our subscription product lines. I am
confi dent our teams around the world will build
upon our good qualities and strengthen our
relationships with users and licensors alike...”
Dear Fellow Shareholders,
This year I believe investors have
rediscovered the fundamental strengths
of the Infomedia business model –
mission critical subscription based
products
that
yield
strong
recurring revenue;
vertically integrated infrastructure
Product Subscriptions
that yields compound profi t margins;
In addition, by reviewing and right-sizing all Company
leading edge product development
that delivers new productivity
innovations to a familiar customer
base; and
a management team which creates
shareholder value by increasing
value for all stakeholders.
divisions, management and staff, led by our CEO,
Mr Gary Martin, we successfully established our
important North American operation without a
substantial increase in operating costs. You can
also read in his CEO Report of the many other
positive outcomes for the Company, including
new data licences that bode well for our growth
and sustainability.
This renewed recognition resulted
in a 29% year-on-year growth
in
market capitalisation. Shareholders
have witnessed time and again the
Company’s ability to bounce back from
The North American process also triggered the
growth of our fi nancial operations infrastructure
from being domestic to being global in its nature
and capabilities. The new system and procedures
cyclical and market changes which in
allow for the direct account management of nearly
the short term have challenged growth,
20,000 customers worldwide, in their own language
but have never halted its underlying
and currency. This is a commendable achievement
positive momentum.
performed by our whole fi nancial team, and headed
The Company’s FY2006 fi nancial
results and operational performance
bear this out. Total recurring revenue
subscriptions
increased by 4.3%,
normalised profi t after tax increased
by 7%, and even sales revenue would
have increased but for conversion
of our signifi cant export revenues at
higher Australian dollar rates over the
by our CFO, Mr Peter Adams.
As discussed at our last Annual General Meeting,
your Board embarked upon a fresh approach to
its capital management strategy, one which would
fi rstly increase the return on assets employed in
the business by releasing shareholder equity and
franking credits that were held in non-core capital
assets such as the Company’s real estate holdings,
previous year. Normal year-on-year
and secondly lifting the dividend payout policy by
franked dividends increased by 18%
approximately 60% to a payout range of 75% – 85%.
from 3.4¢ to 4.0¢.
Management completed a profi table campaign
infomedia.com.au 02
L
e
t
t
e
r
C
h
a
i
r
m
a
n
’
s
during the financial year that concluded in the sale
especially in terms of timing and the
and leaseback transaction of our Frenchs Forest
effects of world events, looking back
headquarters for $23 million, which not only realised
it’s fair to say that the Company does
$2.4 million in net profit, but enabled a significant
what it says it will do. That is due in
release of shareholder funds. Two special fully
no small part to the vision, integrity,
franked dividends of 3.5¢ each have been declared
and dedication of the Company’s
and paid to shareholders since this policy change
leadership and staff and to the trust
was implemented. Despite the change, your Board
expressed in your act of ownership.
and management have continued to investigate core
acquisition opportunities throughout the year.
No doubt FY2007 will continue to
present challenges of a similar nature
I would also like to take a moment to bring to
to those that we have seen in the past;
your attention the good and professional work the
that’s in the nature of being in a valued
Committee Chairpersons of your Board have done
market. However, we will reap the
during the past year to ensure Infomedia Ltd is a
benefits of new and organic growth in
model of good corporate governance. You’ll see in this
our subscription product lines. I am
Annual Report the significant expansion of corporate
confident our teams around the world
governance disclosure that comes about through the
will build upon our good qualities and
leadership of Mr Geoff Henderson, Chairman of the
strengthen our relationships with users
Corporate Governance Committee. As Chairperson of
and licensors alike as they continue to
the Remuneration & Nomination Committee, Ms Fran
identify and develop current and new
Hernon has diligently led the updating, benchmarking
market opportunities.
and harmonisation of all key policies involving
executive management and Board performance
evaluation and remuneration. Also, Mr Andrew
Moffat’s leadership of the Audit & Risk Committee
is reflected in the honest and transparent working
relationships between the Company’s auditors,
management and the Committee. Risk assessments
are regularly considered and evaluated. It would also
be appropriate to acknowledge, at this point, long
standing Non-executive Director, Mr Myer Herszberg,
for the contribution he brings as a member of these
committees as well as to the Board as a whole.
For these reasons and for its overall
performance, which you will read
about herein, you will see why I
continue to view Infomedia as a good
investment for both growth and yield.
I look forward to seeing you at the
Annual General Meeting and commend
this Annual Report to you.
For many years in this Report, I have expressed my
views on the future of our Company. And here again,
Richard David Graham
I reiterate my view that the future of Infomedia is
Chairman of the Board
positive. While projecting the future is always risky,
infomedia.com.au 03
y
n
a
p
m
o
C
e
l
i
f
o
r
P
Company Profile
Infomedia Ltd is a leading provider of information solutions to the post-sale parts and service
sector of the global automotive industry. The Company’s automotive products are subscribed to
by over 49,000 users from franchised dealers and independent auto dealers and independent
auto trade repairers. Infomedia’s Microcat® electronic parts catalogues, or EPCs, enable dealers
to perform the critical function of quickly and accurately identifying for sale replacement auto
parts manufactured by the world’s leading auto manufacturers – often referred to as “genuine”
or Original Equipment (OE) replacement parts. Infomedia also provides other high-value,
complementary products to the dealer and trade repairer market, including its Superservice
MenusTM for quick and accurate service quotations and other parts and service related data
products. The Company is also utilising its proprietary technology and process expertise to
introduce EPCs into other complex parts and service dependent industries, including the
whitegoods industry with its PartFinder® brand EPC.
The Company’s products are used every day by dealership staff in over 160 countries and in
28 languages and have a PC based user/client interface. There are thousands of parts in an
average car and a significant portion of the manufacturers’ parts data will change on a monthly
basis. An ongoing monthly subscription with Infomedia ensures that dealers receive and access
the very latest parts information on CD-ROM, DVD-ROM or via the Internet.
The Company’s proprietary production systems, which have been developed and continuously
evolved and improved for 16 years, provide the solid foundation that makes Microcat and its other
products so reliable in terms of content quality, operational performance and speed of delivery.
infomedia.com.au 04
i
H
s
t
o
r
y
History
infomedia.com.au 05
t
r
o
p
e
R
O
E
C
“The inclusion of Kia in Infomedia’s automotive
manufacturer line up brings to 15 the number of
automakers who depend on one of the Company’s
systems for their parts interpretation needs.”
The Year in Review
It is with pleasure that I provide to you this update on your Company’s achievements and
activities during the 2006 fi nancial year.
Key highlights from the last 12 months include:
Successful establishment of the Company’s North America operation
Creation of a focussed and dynamic Global Business Development team
Renewal of a number of the Company’s key data contracts
Successful launch of Microcat® Electronic Parts Catalogue (EPC) into new segment
of the automotive industry
Kia Motors chose Infomedia as their new global EPC solution partner
Further expansion of the Company’s leading edge product, Microcat® LIVE™
Continued rapid expansion of Superservice Menus™ through Europe
IFM North America Up, Running and Making Scores
During the year, the Company moved to direct representation in the North American market.
Prior to the establishment of the IFM North America operation, the Company’s activities
(including sales, marketing and customer support) were performed by third parties. The move
to direct representation has been received favourably by customers and automakers alike.
Employing Infomedia staff in the region has allowed the Company to deepen its understanding
of customers’ requirements and respond swiftly to opportunities to offer further products and
services from the Company’s line-up.
Led by Vice-President Mr Mark Kujacznski, the team in North America is to be commended on
the smooth transition. This has given the Company a solid foundation with which to continue the
growth in the United States, Canada and the Latin and South American markets.
Global Business Development Team Delivers Results
The new Global Business Development team was established from separately managed regional
teams to give further momentum to the Company’s growth strategies in the short and long term.
The team has actively pursued new data contracts and also sought out opportunities for expansion
of both existing and new products and market segments. Led by David Hawkins, the team was
successful in securing a multi year agreement with Mazda Motor Corporation, and also Isuzu
Motors America. In addition, existing contracts with Daihatsu, Electrolux, General Motors Holden,
Honda Australia, Hyundai and Mitsubishi Australia were extended for a further term.
infomedia.com.au 06
C
E
O
R
e
p
o
r
t
Towards the end of the year, the team secured a
Rollout of Microcat LIVE for Mazda
signifi cant win when they secured a three year
agreement to supply Kia Motors dealers around the
world with the Microcat EPC. The inclusion of Kia
in Infomedia’s automotive manufacturer line up
brings to 15 the number of automakers who rely
on one of the Company’s systems for their parts
interpretation needs.
After much anticipation, Microcat LIVE
for Mazda was launched to dealers in
Japan during the year. Japanese Ford
dealers have been using the Microcat
system since it was fi rst introduced in
Japan in 1999. With many Ford dealers
also servicing Mazda built vehicles,
The Microcat EPC replaces an existing in-house
Microcat LIVE for Mazda allows them
solution and the Company is confi dent that the
to use one system for all of their parts
product will support Kia parts dealers in growing
sales needs. In keeping with Mazda
their businesses and improving effi ciency, as it does
Corporation’s reputation for high
for more than 47,000 users worldwide.
quality vehicles, Infomedia assembled
a dedicated team who worked closely
Microcat Drives into Truck Segment with Isuzu
with the key Mazda personnel to deliver
This year, the Company made its successful move into
a high quality, high performance
the pure truck segment of the automotive industry.
EPC product.
With the launch of Microcat for Isuzu, the applicability
of the Company’s parts selling technology and
interpretation system was demonstrated for the fi rst
time in a segment outside of the passenger vehicle
segment. The successful launch and subscription
take up of the product has proven again that the
Expansion of Superservice
Menus through Europe
Superservice Menus has continued
its positive forward momentum by
demonstrating improved profi tability
combination of functionality, competitive pricing and
for service departments through
fl exible contract terms is an attractive proposition
consistent and accurate service
for industry stakeholders.
quotations. In the past fi nancial year,
Infomedia now supplies Microcat for Isuzu Trucks
infomedia.com.au 07
t
r
o
p
e
R
O
E
C
“The strong development work performed during
the past fi nancial year has delivered to the global
sales force, market ready, leading edge technology
solutions across the product portfolio.”
the product has been successfully
Company now supplies Superservice Menus for eight
launched
to an additional
three
automotive manufacturers in various regions.
automotive manufacturers, beginning
with Subaru UK. Towards the end
The Year Ahead
of the fi nancial year, Superservice
Management is buoyant about the growth prospects
Menus was also delivered to Cadillac
for the Company and the great products in the year
Corvette Europe dealers and Daihatsu
ahead. The strong development work performed
dealers in Germany. In all instances,
the implementation was aided by a
close working relationship between
Infomedia and each manufacturer.
This partnership approach is critical
during the past fi nancial year has delivered to the
global sales force, market ready, leading edge
technology solutions across the product portfolio.
Further Expansion of Superservice Menus
in ensuring the product is suitably
The rapid rise of Superservice Menus during FY2006
customised for each national market.
is expected to continue through FY2007. The 158%
rise this past fi nancial year was testimony to the
Superservice Menus also continued
genuine benefi ts the system delivers to users in
its positive growth performance within
the Australian market. Dealership
service departments are enjoying the
benefi ts of using Superservice Menus’
leading edge service quotation system
and processes. Sales to Daihatsu,
Ford, Holden, Hyundai, Mitsubishi
service workshops. The Company has a strong
pipeline for adding further manufacturers and
also strong sales momentum for the current eight
manufacturers in production today.
Microcat MARKET Extending Reach
to Other Complementary Segments
and Toyota dealers experienced solid
Microcat® MARKET™ is an online parts ordering
growth during the fi nancial year. The
system that provides 24/7 Internet connectivity
Infomedia’s Product Integration Workfl ow
infomedia.com.au 08
�����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������
C
E
O
R
e
p
o
r
t
Andrew Pattinson
Managing Director – IFM Europe
Michael Roach
General Manager –
EPC and Data Management
between independent auto trade repairers and their
Managing Director, Mr Andrew
genuine parts dealers. As a result of outstanding
Pattinson, continues to lead the
development work during the year, the system
team in IFM Europe. The Company’s
continues to evolve for new releases to automotive
European subsidiary has completed a
customers in both Australian and European markets.
stellar year of new product launches
Today the system is used by Toyota Australia dealers
for all of the Company’s systems.
and is soon to be released to other Australian
franchises. Within Europe, the system is used today
by Ford and Toyota dealers and will soon be utilised
by Daihatsu dealers throughout Germany.
A Company of Strength
FY2006 was a year where the management and
staff of Infomedia continued to grow as individuals
and as quality global leaders. The development
teams located in Sydney and Melbourne designed,
constructed and delivered new releases of our
market leading technologies and continued to
research and develop new process improvement
tools for the Company’s increasing global footprint of
customers. This solid platform allows the Company
to expand its online solutions through the delivery
of information utilising web services which allow for
a wider range of integration possibilities. General
Manager Mr Michael Roach and his team have
Mr Pattinson’s leadership in the
European market has delivered record
results, in particular for sales of
Superservice Menus. This region will
continue to grow revenue and profi ts
for the Company through current and
new product sales.
I would also like to commend your
Company’s Chief Financial Offi cer,
Mr Peter Adams, for his leadership
this past year. Peter and his team have
successfully
implemented a new
enterprise accounting and customer
management system. In addition to
this, the team successfully integrated
the newly established North American
office,
including
thousands of
additional customers into the debtor
portfolio. You will read more about the
Company’s solid fi nancial performance
further strengthened customer relationships around
within the CFO Report.
the globe and identifi ed further platforms for growth
in FY2007 and beyond.
I look forward to another successful
year ahead for your Company.
Mark Kujacznski
Vice President – IFM North America
Mr Roach is supported by his dedicated team of
managers and staff. In particular, the operational
management of Mr Michael Foster and Mr Peter
Petrovski has improved production processes while
at the same time reducing costs. Their efforts have
directly translated to leaner, more effi cient processes
Gary Martin
that will yield results within FY2007 and future periods.
Chief Executive Offi cer
infomedia.com.au 09
t
r
o
p
e
R
O
F
C
“Superservice Menus continued its positive
growth path during the 2006 fi nancial year
with a 158% increase to 1,671 subscribers.”
In the fi rst year of reporting under the
A fully franked fi nal dividend of two point one cents
new Australian equivalents
to
(2.1¢) was payable to shareholders of record at 22
International Financial Reporting
September 2006. This, combined with the earlier
Standards
(AIFRS),
the Company
achieved sales revenue of $55.6
million and net profi t after tax of $18.1
million. The Company’s results were
enhanced by the sale and leaseback
interim dividend declared in February, brings the
total franked dividend for the year to four cents (4.0¢)
and represents a payout ratio of 79% of normalised
profi t after tax.
of
the Frenchs Forest corporate
It was announced at the 2005 Annual General Meeting
headquarters, which occurred on 30
(AGM) the Board’s intention to realise non-core
June 2006. Gross proceeds for the
assets such as the Company’s real estate holdings
transaction were $23 million, with a
net profi t on sale of $2.4 million. After
taking into account taxation and other
transactional costs, the net impact
was to increase reported earnings
by $1.6 million.
to facilitate a release of built up shareholder value.
As a result of the recent sale and leaseback of the
Frenchs Forest corporate headquarters, a further
fully franked special dividend of three point fi ve
cents (3.5¢) was payable to shareholders of record
at 22 September 2006. This payment, taken together
After excluding the benefi t of the sale
with the fi rst special dividend paid in December 2005,
and leaseback transaction, profi t after
brings the total special dividend distribution since
tax from normal operations increased
the last AGM to seven cents (7.0¢).
by 7% to $16.5 million, which is at the
higher end of the guidance provided
earlier this year. The increase in profi t
was achieved through a combination
of cost control, lower depreciation
The Company may make a further franked special
dividend payment during the fi rst half of the 2007
fi nancial year. Such a payment will be dependent upon
further analysis of factors including remaining franking
and taxation benefits. While total
credits, cash reserves and residual retained earnings.
Company subscriptions grew by 4.3%
over the previous fi nancial year, sales
revenue declined by 6% as a result of
a stronger Australian dollar.
Cash fl ows from operations remain
strong, with $19.0 million in cash
generation. Total dividend payments to
shareholders over the 2006 fi nancial
year amounted to $23.1 million.
Notwithstanding these returns, the
balance sheet remains in a strong
Electronic Parts Catalogue subscription numbers
grew by 2.1% to 47,718 over the year. The fi rst half
of the year saw the successful transitioning from
a third party distributor in North America to direct
representation. More recently, the Company has
renewed data licences with Hyundai and signed a
signifi cant agreement with Kia Motors. Along with
the other renewals and agreements during FY2006,
the Company expects stronger growth of EPC
subscriptions during the upcoming fi nancial year.
position, with $26.0 million cash on
As anticipated, Superservice Menus™ continued
hand at 30 June 2006.
its positive growth path during the 2006 fi nancial
infomedia.com.au 10
C
F
O
R
e
p
o
r
t
year with a 158% increase to 1,671 subscriptions.
system, coupled together with the
Providing the system now for eight franchises in
Company’s highly skilled accounting
Europe and Asia Pacifi c, the Company expects to
and technology staff, has enhanced
begin sales throughout the Americas market during
communication with customers and
the upcoming year. The Company expects similar
facilitated collections from the widely
growth rates to those experienced during FY2006.
distributed customer base in both
On the cost side, the establishment of the Company’s
new North American offi ce in August 2005 was the
key driver for the budgeted head count increase
of 13% to fi nish the year at 230. The new offi ce
multiple currencies and languages.
This is exemplifi ed in the debtors days
sales measurement, which at 30 June
sat at a pleasing 44 days.
effectively replaced the variable cost of a third party
In summary, it is anticipated the
distributor. Research and development expenditure
2007 outlook will be characterised
for the Company was $4.5 million and refl ects the
by growth from new markets for both
continuing commitment to developing innovative
EPC and Superservice Menus
leading edge technology products.
products. This revenue growth, coupled
It should be noted that the Company’s operating
costs will increase in 2007 as the result of the sale
and leaseback transaction through the introduction
of corporate headquarter lease expenditure and the
absence of rental income from an adjacent site to
the headquarters.
with the Company’s strong balance
sheet,
should
facilitate
the
continuation of healthy shareholder
returns into the future.
It was encouraging to realise the benefi ts during the
year of the Company’s new enterprise accounting
Peter Adams
and customer management system. This new
Chief Financial Offi cer
Superservice Menus subscription growth
infomedia.com.au 11
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
DIRECTORS’ REPORT
Your Directors submit their Report for the year ended 30 June 2006.
DIRECTORS
The names and details of the Directors of the Company in office during the financial year and
until the date of this Report are:
Names, Qualifications, Experience and Special Responsibilities
Richard Graham
Chairman
Mr Richard Graham has held senior management positions
in the American and
Australian computer industry since 1977. Mr Graham co-founded the Company in 1988
and was its Chairman and CEO until his retirement in 2004. Since he retired as CEO
Mr Graham has continued as Non-executive Chairman.
Myer Herszberg
Non-executive Director
Myer Herszberg has been a Director of Infomedia since 1992. Mr Herszberg is the founder of
Melbourne’s Denman Audio chain and has extensive consumer electronics experience. He was active
in bringing home computers to Australia in the early 1980s and has also brought many other leading
edge electronic products to Australia. He also has extensive experience in the commercial property
market, and is active in a number of community service organisations. Mr Herszberg serves on
the Company’s Audit & Risk, Corporate Governance, and Remuneration & Nomination Committees.
Mr Herszberg was last re-elected to the Board in October 2005.
Frances Hernon
Non-executive Director (Chairman of Remuneration & Nomination Committee)
Frances Hernon was appointed to the Infomedia Board of Directors on 19 June 2000. Ms Hernon
has extensive experience in media, publishing, marketing and technology. She has held senior
editorial positions at News Ltd and Murdoch Magazines and was General Manager, Harrison
Communications, Director of Publicity at Channel Ten, Managing Editor of the NRMA’s
member magazine The Open Road, Manager, Business Communications for NRMA, and Senior
Account Manager, Group IT&T for the Insurance Australia Group (IAG). Ms Hernon is currently
Corporate Affairs Manager for Nestlé Australia Ltd. She also serves on Infomedia’s Corporate
Governance Committee. Ms Hernon was last re-elected to the Board in October 2004.
Geoffrey Henderson
Non-executive Director (Chairman of Corporate Governance Committee)
Geoffrey Henderson was appointed to the Infomedia Board of Directors on 25 February 2003.
Mr Henderson is a qualified accountant and has had an extensive career, spanning positions
in Australia, New Zealand, Europe and North America. He worked in a number of financial
positions for Olympic Tyres in Melbourne for eight years and then for the Ford Motor Company
for 30 years. During his time with Ford, Mr Henderson worked not only in the Finance Division,
but also held 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. Mr Henderson was elected to the Board in October 2004.
infomedia.com.au 12
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
Gary Martin
Chief Executive Officer
Gary Martin was promoted to the position of Chief Executive Officer on 1 January 2005. Mr
Martin has extensive experience in the automotive industry. He has been with Infomedia since
1998, when he joined the Company as International Sales Manager. Mr Martin was appointed
as General Manager, Electronic Catalogues Division in August 2001. Prior to joining Infomedia,
he had 12 years of experience at automotive dealerships, including as General Manager, Parts
and Accessories of a large multi-franchised dealership group. In his time with Ford dealers,
Mr Martin was awarded the Ford Management Excellence Award in four consecutive years and
participated on various Automaker committees.
Mr Martin was elected to the Board in October 2004.
Andrew Moffat
Non-executive Director (Chairman of Audit & Risk Committee)
Andrew Moffat was appointed to the Infomedia Board of Directors on 31 March 2005. Mr Moffat
has more than 20 years of corporate and investment banking experience and is the sole
principal of Cowoso Capital Pty Ltd, a company providing strategic corporate advisory services.
Prior to establishing Cowoso Capital Pty Ltd, Andrew was a Director of Equity Capital Markets
& Advisory for BNP Paribas Equities (Australia) Limited where he took principal responsibility
for mergers and acquisition advisory services and a range of equity capital raising mandates
including placements, initial public offerings, rights issues and dividend reinvestment plan
underwritings. Andrew’s corporate banking experience was gained whilst working in the United
Kingdom and Australia with Standard Chartered Bank Group, National Westminster Banking
Group and BNP Paribas.
Mr Moffat was elected to the Board in October 2005.
COMPANY SECRETARY
Nick Georges
General Counsel & Company Secretary
Nick Georges is a qualified lawyer, admitted to the Supreme Courts of Victoria in 1991 and
New South Wales in 1999. Prior to joining Infomedia and becoming its General Counsel &
Company Secretary in 1999, Mr Georges worked in general practice as a solicitor in Victoria
before moving to Sydney to take up an executive role with Altium Limited (previously known as
Protel International Pty Ltd), where he obtained extensive experience in the information
technology industry.
Mr Georges acted as alternate Director for Mr Herszberg at one Board meeting during the year.
infomedia.com.au 13
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
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 fully paid
Options over Ordinary Shares
Wiser Equity Pty Limited
Yarragene Pty Limited
Wiser Centre Pty Limited
Richard Graham
Gary Martin
Frances Hernon
Geoffrey Henderson
Andrew Moffat
100,277,501
39,421,599
1,000,000
926,559
74,257
5,000
-
-
-
-
-
-
1,000,000
-
-
-
Richard Graham is the sole Director and benefi cial shareholder of Wiser Equity Pty Limited
(formerly “Wiser Laboratory Pty Limited”). Richard Graham is a Director of Wiser Centre Pty
Limited, trustee for the Wiser Centre Pty Ltd Superannuation Fund. Myer Herszberg is a Director
and major shareholder of Yarragene Pty Limited.
Directorships of other publicly listed entities
During the past three years, Andrew Moffat has been the non-executive chairman of Pacifi c Star
Network Limited. He is also a non-executive Director of Cash Converters International Limited
since February 2006.
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 and service quoting systems for the
automotive industry globally;
information management, analysis and creation for the domestic automotive and oil
industries; and
the provision of dealer management systems for the automotive industry.
There have been no signifi cant changes in the nature of those activities during the year.
EMPLOYEES
The company employed 230 (2005: 203) full time employees as at 30 June 2006.
infomedia.com.au
14
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
DIVIDENDS
Final dividends recommended:
On ordinary shares – fi nal – fully franked
On ordinary shares – special – fully franked
Dividends paid in the year:
Cents
$’000
2.10
3.50
6,835
11,391
On ordinary shares – 2006 interim – fully franked
On ordinary shares – special – fully franked
1.90
3.50
6,184
11,391
Final for the 2005 year:
On ordinary shares – as recommended in the 2005 report
1.70
5,533
NET TANGIBLE ASSETS PER SECURITY
The Company’s net tangible assets per security are as follows:
Net tangible assets per share at 30 June 2006
Net tangible assets per share at 30 June 2005
Cents
7.5
10.0
REVIEW AND RESULTS OF OPERATIONS
The following table presents sales revenue and profi t after tax after excluding non-recurring
signifi cant items:
Sales revenue
Reported profi t after tax
Adjustments:
Sale and leaseback transaction after tax
Signifi cant items in FY2005 (refer Note 3(viii) in notes)
Profi t after tax excluding sale and leaseback transaction and
signifi cant items
CONSOLIDATED
2006
$’000
55,577
2005
$’000
59,137
18,146
6,347
(1,616)
-
16,530
-
9,108
15,455
The Company achieved a 186% increase in reported earnings over the equivalent prior year to
$18,146,000. The Company’s fi nancial results were enhanced by the sale and leaseback of the Frenchs
Forest corporate headquarters, which occurred on 30 June 2006. Gross proceeds for the transaction
were $23,000,000, with a net profi t on sale of $2,432,000. After taking into account taxation and other
transactional costs, the net impact was to increase reported earnings by $1,616,000.
After excluding the benefi t of the sale and leaseback transaction, profi t after tax from normal
operations increased by 7% to $16,530,000. This increase in profi t was achieved through a
infomedia.com.au
15
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
combination of cost control, lower depreciation and taxation benefits. Sales revenue declined by
6%, primarily as a result of adverse movements in currency exchange rates.
Electronic Parts Catalogue subscription numbers grew by 2.1% to 47,718 over the year.
Superservice Menus subscription numbers grew by 158% to 1,671 over the year.
The Company successfully commenced its own distributor operations in North America during the year.
Cash flows from operations remain strong with $19,029,000 in cash generation. Total dividend
payments to shareholders over the 2006 financial year amounted to $23,108,000. Notwithstanding
these returns, the balance sheet remains in a strong position with $26,021,000 cash on hand at
30 June 2006.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There has been no significant change in the state of affairs of the Company since the last
Directors’ Report.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
There has been no matter or circumstance that has arisen since the end of the financial year
that has significantly affected the operations of the Company, the results of those operations, or
the state of affairs of the Company.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Directors anticipate stronger growth from the Electronic Parts Catalogue (EPC) subscriber
base with a focus on new markets including Isuzu, Kia and Mazda. It is anticipated that further
changes in the EPC competitive landscape could provide further opportunity for growth over the
next 12 to 24 months.
The outlook for Superservice Menus remains strong, with a firm pipeline for 2007. It is anticipated
that similar Superservice Menus growth rates to the 2006 year will continue over the coming
year, with growth anticipated both locally and abroad.
As the bulk of the Company’s revenues are export in nature, the Company’s results can be
influenced either favourably or unfavourably by movements in currency exchange rates. Refer
Notes 30 and 31 for more information.
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company 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 1,950,000 unissued ordinary shares under options. Refer
to Note 23 of the financial statements for further details of the options outstanding.
infomedia.com.au
16
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
Shares Issued as a Result of the Exercise of Options
There were no options exercised by the employees during the year ended 30 June 2006.
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.
REMUNERATION REPORT
This report outlines the remuneration arrangements in place for Directors and executives of
the Company.
Compensation Philosophy
The performance of the Company depends upon the quality of its Directors and executives. To
prosper, the Company must attract, motivate and retain highly skilled Directors and executives.
To this end, the Company embodies the following principles in its compensation framework:
Provide competitive rewards to attract high calibre executives.
Link executive rewards to shareholder value.
Establish appropriate performance hurdles in relation to variable executive compensation.
Remuneration Committee
The Remuneration & Nomination Committee (Remuneration Committee) of the Board of Directors
is responsible for recommending to the Board the Company’s remuneration and compensation
policy arrangements for all Key Management Personnel. The Remuneration 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.
Compensation Structure
In accordance with best practice corporate governance recommendations, the structure of non-
executive Director and senior executive compensation is separate and distinct.
Non-executive Director Compensation
Objective
The Board seeks to set aggregate compensation at a level which provides the Company with
the ability to attract and retain Directors of appropriate calibre, whilst incurring a cost which is
acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-
executive Directors shall be determined from time to time by a general meeting. An amount
infomedia.com.au
17
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
not exceeding the amount determined is then available between the Directors as appropriate
(for the year ending 30 June 2006, Non-executive Directors’ compensation totalled $311,489).
The latest determination was at the Annual General Meeting held on 30 October 2002, when
shareholders approved a maximum aggregate compensation of $450,000 per year.
The Board has historically considered the advice from external consultants, as well as the fees
paid to non-executive Directors of comparable companies when undertaking a review process.
Senior Executive and Executive Director Compensation
Objective
The Company aims to reward executives with a level and mix of compensation commensurate
with their position and responsibilities within the Company and so as to:
reward executives for Company and individual performance against targets set by reference
to appropriate benchmarks;
align the interests of executives with those of shareholders;
link reward with the strategic goals and performance of the Company; and
ensure total compensation is competitive by market standards.
Structure
In determining the level and make-up of executive compensation, the Remuneration Committee
engages an external consultant from time to time to provide independent advice in the form of a
written report detailing market levels of compensation for comparable executive roles.
Compensation consists of the following key elements:
- Fixed Compensation
- Variable Compensation
- Short Term Incentive (STI); and
- Long Term Incentive (LTI).
The actual proportion of fixed compensation and variable compensation (potential short term
and long term incentives) is established for Key Management Personnel (excluding the CEO and
non-executive Directors) by the CEO in conjunction with the Remuneration Committee, and in the
case of the CEO, by the Chairman of the Board in conjunction with the Remuneration Committee.
Other executive salaries are determined by the CEO with reference to market conditions.
Fixed Compensation
Objective
The level of fixed compensation is set so as to provide a base level of compensation which is
both appropriate to the position and competitive in the market. Fixed compensation is reviewed
periodically by the CEO in conjunction with the Remuneration Committee for Key Management
Personnel (excluding the CEO and non-executive Directors), and in the case of the CEO, by the
Chairman of the Board in conjunction with the Remuneration Committee. All other executive
infomedia.com.au
18
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
positions are reviewed periodically by the CEO. As noted above, the Committee has access to
external advice independent of management.
Structure
Executives are given the opportunity to receive their fixed (primary) compensation in a variety of
forms, including cash or other designated employee expenditure such as motor vehicles. It is
intended that the manner of payment chosen will be optimal for the recipient without creating
undue cost for the Company.
Variable Compensation – Short Term Incentive (STI)
Objective
The objective of short term compensation is to link the achievement of both individual
performance and Company performance with the compensation received by the executive.
Structure
The structure of short term compensation is a cash bonus dependent upon a combination of individual
performance objectives and Company objectives being met. This reflects the Company wide practice
of ‘Performance Planning & Review’ (PPR) procedures. Individual performance objectives centre
on key focus areas. Company objectives include achieving budgetary targets that are set at the
commencement of the financial year (adjusted where necessary for currency fluctuations).
These performance conditions were chosen, in the case of individual performance objectives,
to promote and maintain the individual’s focus on their own contribution to the Company’s
strategic objectives through individual achievement in key result areas (KRAs) which include,
for example, ‘leadership’, ‘decision making’, ‘results’ and ‘risk management’. In the case of
Company objectives, budgetary performance conditions were chosen to promote and maintain
a collaborative, Company wide focus on the achievement of those targets.
In assessing whether an individual performance condition has been satisfied, pre-agreed key
performance indicators (KPIs) are used. In assessing whether Company objectives have been
satisfied, Board level pre-determined budgetary targets are used. These methods have been
chosen to create clear and measurable performance targets.
Variable Compensation – Long Term Incentive (LTI)
Objective
The objective of the LTI plan is to reward executives in a manner which aligns this element
of compensation with the creation of shareholder wealth. As such LTI, grants are made to
executives, who are able to influence the generation of shareholder wealth and thus have a direct
impact on the Company’s performance against the relevant long term performance hurdle.
Structure
The structure of long term compensation is in the form of share options pursuant to the employee
option and employee share plans. Performance hurdles have been introduced for all share options
infomedia.com.au
19
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
issued after 31 December 2004 and are determined upon grant of those share options. These hurdles typically relate to the Company’s share
price reaching or exceeding a particular level. These methods were chosen to create clear and measurable performance expectations.
Specifi ed Directors and Five Highest Remunerated Specifi ed Executives for the Year Ended 30 June 2006 and 30 June 2005
Short term
Post
employment
Share based
payments
Long
term
Total
Total
performance
related
Salary
and fees
Bonus
Non
monetary
benefi ts
Superannuation
Options
Employee
share
plan
Other
$
%
2006 Financial Year:
Directors:
Richard Graham
118,019
-
Gary Martin
280,000
63,000
Myer Herszberg
Geoffrey Henderson
Frances Hernon
Andrew Moffat
Executives:
42,000
42,000
42,000
42,000
Andrew Pattinson
305,523
-
-
-
-
-
Peter Adams
190,742
38,000
Nick Georges
170,290
12,500
Michael Roach
153,558
14,000
-
-
-
-
-
-
14,537
-
-
-
Mark Kujacznski
170,186
-
9,589
10,350
24,445
3,780
3,780
3,780
3,780
27,497
17,167
15,326
13,820
-
-
51,232
-
-
-
-
-
17,742
13,050
6,286
-
-
-
-
-
-
-
1,000
1,000
1,000
1,000
-
-
3,267
-
-
-
-
5,092
2,225
1,987
2,559
-
128,369
421,944
45,780
45,780
45,780
45,780
353,649
266,876
214,153
191,223
179,775
1,556,318
127,500
24,126
123,725
88,310
4,000
15,130
1,939,109
2005 Financial Year:
Directors:
Richard Graham1
257,751
100,000
37,982
Andrew Pattinson
331,069
-
Gary Martin
247,436
35,200
Myer Herszberg
Geoffrey Henderson
Frances Hernon
Barry Ford
Andrew Moffat
Executives:
Guy Bryant2
Peter Adams
Nick Georges
Michael Roach
Damon Fieldgate
42,000
42,000
42,000
31,338
10,823
232,191
192,548
155,543
135,742
131,238
-
-
-
-
-
-
-
-
-
-
-
-
10,000
32,800
10,000
10,000
10,957
3,548
-
-
-
-
13,815
29,796
24,445
3,780
3,780
3,780
2,997
974
16,676
19,255
13,910
11,705
11,617
-
30,997
30,997
-
1,000
1,000
3,200
5,518
2,887
-
-
-
-
-
30,364
4,793
30,997
3,196
-
-
-
-
-
-
2,000
2,000
2,000
2,000
2,000
-
-
-
-
-
2,159
2,246
1,815
2,262
2,187
412,748
398,380
341,965
45,780
45,780
45,780
34,335
11,797
296,938
253,642
214,265
164,905
157,999
1,851,679
208,957
41,530
156,530
131,344
12,000
22,274
2,424,314
1. Salary and fees for Richard Graham includes $120,118 of leave entitlements paid upon resignation as Chief Executive Offi cer effective 31 December 2004.
2. Salary and fees for Guy Bryant includes $45,500 in termination benefi ts in 2005.
infomedia.com.au
20
-
27%
-
-
-
-
-
21%
12%
11%
-
24%
8%
19%
-
-
-
-
-
14%
15%
19%
8%
7%
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
Compensation by Category: Key Management Personnel
CONSOLIDATED
INFOMEDIA LTD
2006
$
2005
$
2006
$
2005
$
1,707,944
2,056,666
1,040,551
1,579,855
123,725
15,130
-
92,310
156,530
22,274
45,500
143,344
82,408
7,479
-
84,024
115,029
14,494
45,500
106,151
1,939,109
2,424,314
1,214,462
1,861,029
Short term
Post employment
Other long term
Termination benefi ts
Share based payments
Contract for Services
The table and notes below summarise current executive employment contracts with the Company
as at the date of this Report:
Commencement date
Notice period
Notice period
per latest contract
Duration
– Company
- Executive
Gary Martin
1 January 2005
Andrew Pattinson
5 April 2004
Nick Georges
1 January 2005
Peter Adams
1 January 2005
Michael Roach
1 January 2005
Mark Kujacznski
22 August 2005
3 years
3 years
3 years
3 years
3 years
3 years
6 months*
3 months
6 months*
6 months*
3 months
3 months
6 months
3 months
6 months
6 months
3 months
3 months
The Company may terminate each of the contracts at any time without notice if serious misconduct
has occurred. Options that have not yet vested upon termination will be forfeited.
* In the event of redundancy, in addition to six months notice, the Company will provide the individual with a severance
payment equivalent to three weeks’ base salary for each completed year of continuous service with the Company provided
however, that the minimum severance payment will be 26 weeks’ base salary and the maximum severance payment will
not exceed 52 weeks’ base salary.
Compensation Options: Granted and Vested during the Year
During the fi nancial year options were granted as equity compensation benefi ts under the long
term incentive plan to certain Key Management Personnel as disclosed below. No share options
have been granted to the non-executive members of the Board of Directors under this scheme.
The options were issued free of charge. Each option entitles the holder to subscribe for one fully
paid ordinary share in the Company at an exercise price equal to the strike price of the shares on
the date of grant. The options vest at various hurdle rates dependent upon the share price of the
Company. If this increase is not met by the last available exercise date, the options are forfeited.
The contractual life of each option granted is up to three years.
infomedia.com.au
21
’
s
r
o
t
c
e
r
i
D
t
r
o
p
e
R
Vested
Granted
Terms and conditions for each grant
30 June 2006
Number
Number
Grant date
Fair value per
option at grant
date (cents)
Exercise price
per option
(cents)
Expiry date
First exercise
date
Last exercise
date
Directors
Gary Martin
333,333
1,000,000
27 Oct 2005
8.4
50.0
5 Feb 2008
5 Jan 2006
5 Feb 2008
Executives
Peter Adams
Nick Georges
83,333
83,333
250,000
250,000
8 Jul 2005
6 Oct 2005
Michael Roach
-
200,000
16 Dec 2005
499,999
1,700,000
There were no options granted in the 2005 Financial Year.
There were no options granted in the 2005 Financial Year.
10.3
8.1
8.9
50.0
48.0
49.0
5 Feb 2008
5 Jan 2006
5 Feb 2008
5 Feb 2008
5 Jan 2006
5 Feb 2008
16 Jan 2009
16 Dec 2005
16 Jan 2009
Shares Issued on Exercise of Compensation Options (Consolidated)
No options were exercised during the year by Key Management Personnel.
Option Holdings of Key Management Personnel (Consolidated)
Balance at
beginning
of period
Granted as
compensation
Options
exercised
Net change
other
Balance at
end of period
Vested at 30 June 2006
30 June 2006
1 July 2005
30 June 2006
Total
Not
exercisable
Exercisable
Directors
Gary Martin
Executives
Peter Adams
Nick Georges
Michael Roach
-
-
-
-
-
1,000,000
250,000
250,000
200,000
1,700,000
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
666,667
333,333
250,000
250,000
200,000
250,000
250,000
200,000
166,667
166,667
200,000
83,333
83,333
-
1,700,000
1,700,000
1,200,001
499,999
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
Committee meetings
Audit & Risk
Corporate
Governance
Remuneration
& Nomination
Number of meetings held:
Number of meetings attended:
Richard Graham
Gary Martin
Geoffrey Henderson
Myer Herszberg
Frances Hernon
Andrew Moffat
Nick Georges (Alternate)
12
12
11
12
11
10
12
1
infomedia.com.au
22
4
-
-
4
2
-
4
-
4
-
-
4
3
4
-
-
2
-
-
-
2
2
2
-
R
e
p
o
r
t
D
i
r
e
c
t
o
r
s
’
ROUNDING
The amounts contained in this Report and in the financial report have been rounded to the
nearest $1,000 (where rounding is applicable) under the option available to the Company under
ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies.
CORPORATE GOVERNANCE
In recognising the need for high standards of corporate behaviour and accountability, the Directors
of Infomedia Ltd support and have adhered to the principles of good corporate governance. The
Company’s corporate governance statement is after the independent audit report.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The Directors received an auditor’s independence declaration from the auditor of the Company.
This declaration can be found on the following page.
NON-AUDIT SERVICES
Ernst & Young did not provide any non-audit services during the financial year ended
30 June 2006.
Signed in accordance with a resolution of the Directors.
Richard David Graham
Chairman of the Board
Sydney, 23 August 2006
infomedia.com.au
23
e
c
n
e
d
n
e
p
e
d
n
I
n
o
i
t
a
r
a
l
c
e
D
Auditor’s Independence Declaration to the Directors of Infomedia Ltd
In relation to our audit of the fi nancial report of Infomedia Ltd for the fi nancial year ended
30 June 2006, to the best of my knowledge and belief, there have been no contraventions
of the auditor independence requirements of the Corporations Act 2001 or any applicable
code of professional conduct.
Ernst & Young
J K Haydon
Partner
Sydney
Date: 23 August 2006
Liability limited by a scheme approved
under Professional Standards Legislation
infomedia.com.au
24
S
t
a
t
e
m
e
n
t
I
n
c
o
m
e
INCOME STATEMENT
YEAR ENDED 30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
Sales revenue
Rental revenue
Finance revenue
Revenue
Cost of sales
Gross profi t
Other income
Employee benefi ts expense
Depreciation and amortisation
Decrement in value of non-current assets
Finance costs
Legal costs incurred in enforcement of contractual rights
Non-cancellable surplus lease space on other locations
Operating lease rental
Foreign currency exchange loss
Other expenses
Profi t before income tax
Income tax expense
Profi t after income tax
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Dividends per share – ordinary (cents per share)
Dividends per share – special (cents per share)
2006
$’000
46,112
-
1,164
47,276
(13,436)
33,840
677
(6,851)
(2,689)
-
(197)
-
-
(912)
-
(5,302)
18,566
(4,866)
13,700
2005
$’000
52,628
-
1,216
53,844
(14,541)
39,303
2,489
(8,703)
(4,041)
(12,782)
(97)
(1,227)
(178)
(1,162)
(426)
(4,548)
8,628
(2,917)
5,711
2006
$’000
55,577
646
268
56,491
(17,472)
39,019
2,892
(8,009)
(3,355)
-
(197)
-
-
(534)
-
(5,002)
24,814
(6,668)
18,146
5.58
5.57
4.00
7.00
3(i)
3(ii)
3(iii)
3(iv)
3(v)
4
5
5
6
6
2005
$’000
59,137
618
272
60,027
(17,404)
42,623
2,682
(9,914)
(4,669)
(12,782)
(97)
(1,227)
(178)
(667)
(450)
(5,600)
9,721
(3,374)
6,347
1.95
1.95
3.40
-
infomedia.com.au
25
t
e
e
h
S
e
c
n
a
l
a
B
BALANCE SHEET
AT 30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
2006
$’000
26,021
6,751
84
544
229
2005
$’000
10,821
6,042
88
540
-
2006
$’000
25,089
4,409
71
448
229
2005
$’000
8,803
4,607
44
434
-
33,629
17,491
30,246
13,888
-
804
4,066
17,375
1,790
24,035
57,664
3,974
500
2,711
3,451
816
11,452
2,339
2,062
4,401
15,853
41,811
17,488
1,010
23,313
41,811
-
1,260
22,582
13,656
988
38,486
55,977
3,640
-
1,971
1,215
810
7,636
534
1,338
1,872
9,508
46,469
17,488
706
28,275
46,469
451
1,052
3,402
12,754
1,592
19,251
49,497
2,988
500
2,001
3,126
405
9,020
2,187
1,576
3,763
12,783
36,714
17,488
976
18,250
36,714
22,043
1,507
5,263
9,683
779
39,275
53,163
2,994
-
1,294
1,080
367
5,735
460
1,097
1,557
7,292
45,871
17,488
725
27,658
45,871
7
8
31
9
10
12
13
4
15
16
17
18
19
4
20
20
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Derivatives
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Intercompany
Other fi nancial assets
Property, plant and equipment
Intangible assets and goodwill
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Interest bearing loans and borrowings
Provisions
Income tax payable
Deferred revenue
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profi ts
TOTAL EQUITY
infomedia.com.au
26
S
t
a
t
e
m
e
n
t
C
a
s
h
F
l
o
w
CASH FLOW STATEMENT
YEAR ENDED 30 June 2006
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
21 (a)
CASH FLOWS FROM INVESTING ACTIVITIES
2006
$’000
54,522
(31,036)
268
(197)
(4,528)
19,029
2005
$’000
64,097
(38,065)
272
(97)
(6,332)
19,875
2006
$’000
46,229
(23,556)
1,164
(197)
(4,528)
19,112
2005
$’000
48,754
(23,518)
1,216
(97)
(6,332)
20,023
Acquisition of property, plant and equipment
(1,625)
(1,801)
(1,121)
(1,679)
3(vi)
3(vi)
Proceeds from sale of property, plant and equipment including
property held for resale
Non refundable payment for capital works
Purchase of intellectual property
Purchase of shares in controlled entity
NET CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings
Repayment of borrowings
Repayment of loan from controlled entity
Dividends paid on ordinary shares
6
NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
23,000
(500)
(2,096)
-
18,779
8,000
(7,500)
-
(23,108)
(22,608)
1,734
-
-
-
(67)
1,000
(5,173)
-
(11,701)
(15,874)
1,750
-
(2,096)
(1)
(1,468)
8,000
(7,500)
21,250
(23,108)
(1,358)
-
-
-
-
(1,679)
1,000
(5,173)
-
(11,701)
(15,874)
NET INCREASE IN CASH HELD
15,200
3,934
16,286
2,470
Add opening cash brought forward
10,821
6,887
8,803
6,333
CLOSING CASH CARRIED FORWARD
21 (b)
26,021
10,821
25,089
8,803
infomedia.com.au
27
f
o
t
n
e
m
e
t
a
t
S
y
t
i
u
q
E
n
i
s
e
g
n
a
h
C
STATEMENT OF CHANGES IN EQUITY
YEAR ENDED 30 June 2006
CONSOLIDATED
Contributed equity
Retained earnings
Other reserves
Total
At 1 July 2005
Currency translation differences
Profi t for the year
Cost of share based payments
Equity dividends
At 30 June 2006
$’000
17,488
-
-
-
-
17,488
$’000
28,275
-
18,146
-
(23,108)
23,313
$’000
706
53
-
251
-
1,010
$’000
46,469
53
18,146
251
(23,108)
41,811
YEAR ENDED 30 June 2005
CONSOLIDATED
Contributed equity
Retained earnings
Other reserves
Total
At 1 July 2004
Currency translation differences
Profi t for the year
Cost of share based payments
Equity dividends
At 30 June 2005
$’000
17,488
-
-
-
-
17,488
$’000
33,629
-
6,347
-
(11,701)
28,275
$’000
404
(28)
-
330
-
706
YEAR ENDED 30 June 2006
INFOMEDIA LTD
At 1 July 2005
Profi t for the year
Cost of share based payments
Equity dividends
At 30 June 2006
Contributed equity
Retained earnings
Other reserves
$’000
17,488
-
-
-
17,488
$’000
27,658
13,700
-
(23,108)
18,250
$’000
725
-
251
-
976
YEAR ENDED 30 June 2005
INFOMEDIA LTD
$’000
51,521
(28)
6,347
330
(11,701)
46,469
Total
$’000
45,871
13,700
251
(23,108)
36,714
Contributed equity
Retained earnings
Other reserves
Total
$’000
17,488
-
-
-
17,488
$’000
33,648
5,711
-
(11,701)
27,658
$’000
395
-
330
-
725
$’000
51,531
5,711
330
(11,701)
45,871
At 1 July 2004
Profi t for the year
Cost of share based payments
Equity dividends
At 30 June 2005
infomedia.com.au
28
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
NOTES TO THE FINANCIAL STATEMENTS
30 June 2006
1. CORPORATE INFORMATION
The financial report of Infomedia Ltd for the year ended 30 June 2006 was authorised for issue
in accordance with a resolution of the Directors on 23 August 2006.
Infomedia Ltd is a company limited by shares incorporated in Australia whose shares are
publicly traded on the Australian Stock Exchange.
The nature of the operations and principal activities of the Company are described in the
Directors’ Report.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance
with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The
financial report has also been prepared on a historical cost basis, except for derivative financial
instruments that have been measured at fair value.
The carrying values of recognised assets and liabilities that are hedged with fair value hedges are
adjusted to record changes in the fair values attributable to the risks that are being hedged.
(b) Statement of compliance
The financial report complies with Australian Accounting Standards, which include Australian
equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS
ensures that the financial report, comprising the financial statements and notes thereto,
complies with International Financial Reporting Standards (IFRS).
This is the first annual financial report prepared based on AIFRS and comparatives for the
year ended 30 June 2005 have been restated accordingly except for the adoption of AASB 132:
Financial Instruments: Disclosure and Presentation and AASB 139: Financial Instruments:
Recognition and Measurement. Reconciliations of AIFRS equity and profit for 30 June 2005 to
the balances reported in the 30 June 2005 financial report are detailed in Note 25.
The following Australian Accounting Standards have recently been issued or amended and are
applicable to the Company in future periods but are not yet effective and have not been adopted
for the annual reporting year ended 30 June 2006:
infomedia.com.au
29
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
AASB/UIG Amendment
Affected Standard(s)
Nature of change to
accounting policy
Application date of
standard*
Application date
for Company
2005-1
2005-4
AASB 139: Financial Instruments: Recognition and
Measurement
AASB 139: Financial Instruments: Recognition and
Measurement, AASB 132: Financial Instruments:
Disclosure and Presentation, AASB 1: First-time
Adoption of AIFRS, AASB 1023: General Insurance
Contracts and AASB 1038: Life Insurance Contracts
2005-6
AASB 3: Business Combinations
2005-9
2005-10
AASB 4: Insurance Contracts, AASB 1023: General
Insurance Contracts, AASB 139: Financial Instruments:
Recognition and Measurement and AASB 132:
Financial Instruments: Disclosure and Presentation
AASB 132: Financial Instruments: Disclosure and
Presentation, AASB 101: Presentation of Financial
Statements, AASB 114: Segment Reporting, AASB 117:
Leases, AASB 133: Earnings per Share, AASB 139:
Financial Instruments: Recognition and Measurement,
AASB 1: First-time Adoption of AIFRS, AASB 4:
Insurance Contracts, AASB 1023: General Insurance
Contracts and AASB 1038: Life Insurance Contracts
No change to accounting
policy required.
Therefore no impact.
No change to accounting
policy required.
Therefore no impact.
No change to accounting
policy required.
Therefore no impact.
No change to accounting
policy required.
Therefore no impact.
No change to accounting
policy required.
Therefore no impact.
1 January 2006
1 July 2006
1 January 2006
1 July 2006
1 January 2006
1 July 2006
1 January 2006
1 July 2006
1 January 2007
1 July 2007
2006-1
AASB 121: The Effects of Change in Foreign Currency Rates
New standard
AASB 7: Financial Instruments: Disclosures
UIG4
UIG8
UIG9
UIG 4: Determining whether an Arrangement contains
a Lease
UIG 8: Scope of AASB 2
UIG 9: Reassessment of Embedded Derivatives
No change to accounting
policy required.
Therefore no impact.
No change to accounting
policy required.
Therefore no impact.
No change to accounting
policy required.
Therefore no impact.
No change to accounting
policy required.
Therefore no impact.
No change to accounting
policy required.
Therefore no impact.
1 January 2006
1 July 2006
1 January 2007
1 July 2007
1 January 2006
1 July 2006
1 May 2006
1 July 2006
1 June 2006
1 July 2006
* Application date is for the annual reporting periods beginning on or after the date shown in the above table.
infomedia.com.au
30
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of Infomedia Ltd and
its subsidiaries (‘the Company’). The financial statements of subsidiaries are prepared for the
same reporting period as the parent company, using consistent accounting policies. Adjustments
are made to bring into line any dissimilar accounting policies that may exist. All intercompany
balances and transactions, including unrealised profits arising from intra-group transactions,
have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered.
Subsidiaries are consolidated from the date on which control is transferred to the Company
and cease to be consolidated from the date on which control is transferred out of the Company.
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 Infomedia Ltd has control.
(d) Significant accounting judgements, estimates and assumptions
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates
and assumptions of future events. The key estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of certain assets and liabilities
within the next annual reporting period are:
Impairment of goodwill
The Company determines whether goodwill is impaired at least on an annual basis. This requires
an estimation of the recoverable amount of the cash generating units to which the goodwill and
intangibles with indefinite useful lives are allocated. The assumptions used in this estimation of
recoverable amount and the carrying amount of goodwill and intangibles with indefinite useful
lives are discussed in Note 14.
Share based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to the
fair value of the equity instruments at the date at which they are granted. The fair value is determined
by an external valuer using a binomial model, using the assumptions detailed in Note 23.
(e) Foreign currencies
Translation of foreign currency transactions
Transactions in foreign currencies of the Company are converted to local currency at the rate of
exchange ruling at the date of the transaction.
Amounts payable to and by the Company 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 reporting period.
infomedia.com.au
31
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Derivative financial instruments
The Company uses derivative financial instruments such as foreign currency contracts to hedge
its risks associated with foreign currency fluctuations. Such derivative financial instruments are
stated at fair value. The fair value of forward exchange contracts is calculated by reference to
current forward exchange rates for contracts with similar maturity profiles.
For the purposes of hedge accounting, hedges are classified as cash flow hedges where
they hedge exposure to variability in cash flows that is either attributable to a particular risk
associated with a recognised asset or liability or a forecasted transaction.
For cash flow hedges, the gains or losses that are recognised in equity are transferred to the
income statement in the same reporting period in which the hedged firm commitment affects
the net profit and loss, for example when the future sale actually occurs.
For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes
in fair value are taken directly to net profit or loss for the reporting period.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated or exercised,
or no longer qualifies for hedge accounting. At that point in time, any cumulative gain or loss on the
hedging instrument recognised in equity is kept in equity until the forecasted transaction occurs.
If a hedged transaction is no longer expected to occur, the net cumulative gain or loss recognised
in equity is transferred to net profit or loss for the reporting period.
Translation of financial reports of overseas operations
Both the functional and presentation currency of Infomedia Ltd and its Australian subsidiaries
is Australian dollars (A$).
All differences in the consolidated financial report are taken to the income statement.
Non-monetary items that are measured in terms of historical cost in a foreign currency are
translated using the exchange rate as at the date of the initial transaction.
The functional currency of the overseas subsidiaries is as follows:
IFM Europe Ltd
Euros
IFM North America Inc United States Dollars (USD)
As at the reporting date the assets and liabilities of these overseas subsidiaries are translated
into the presentation currency of Infomedia Ltd at the rate of exchange ruling at the balance
sheet date and the income statements are translated at the weighted average exchange rates
for the period.
The exchange differences arising on the retranslation are taken directly to a separate component
of equity.
infomedia.com.au
32
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(f) Cash and cash equivalents
Cash on hand and in banks and short term deposits are stated at nominal values.
For the purposes of the Cash Flow Statement, cash includes cash on hand and in banks, and
money market investments readily convertible to cash within three months, net of outstanding
bank overdrafts.
(g) Trade and other receivables
The Company has elected to apply the option available under AASB 1 of adopting AASB 132 and
AASB 139 from 1 July 2005. Outlined below are the relevant accounting policies for trade and
other receivables applicable for the years ended 30 June 2006 and 30 June 2005.
Accounting policies applicable for the year ended 30 June 2006
Trade receivables, which generally have 30-60 day terms, are recognised and carried at original
invoice amount less an allowance for any uncollectible amounts.
An allowance for doubtful debts is made when there is objective evidence that the Company will
not be able to collect the debts. Bad debts are written off when identified.
Accounting policies applicable for the year ended 30 June 2005
Trade receivables were recognised and carried at original invoice amount less a provision for any
uncollectible debts. An estimate for doubtful debts was made when collection of the full amount
was no longer probable. Bad debts were written off as incurred.
(h) Investments and other financial assets
The Company has elected to apply the option available under AASB 1 of adopting AASB 132 and
AASB 139 from 1 July 2005. Outlined below are the relevant accounting policies for investments
and other financial assets applicable for the years ended 30 June 2006 and 30 June 2005.
Accounting policies applicable for the year ended 30 June 2006
Financial assets in the scope of AASB 139: Financial Instruments: Recognition and Measurement
are classified as either financial assets at fair value through profit or loss, loans and receivables,
held-to-maturity investments or available-for-sale investments, as appropriate. For the
Company the relevant category is listed below:
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. Such assets are carried at amortised cost using the
effective interest method. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, as well as through the amortisation process.
Accounting policies applicable for the year ended 30 June 2005
All non-current investments are held at the lower of cost and recoverable amount.
infomedia.com.au
33
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Inventories
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.
(j) Goodwill
Goodwill acquired in a business combination is initially measured at cost, being the excess of
the cost of the business combination over the Company’s interest in the net fair value of the
acquiree’s identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisition date, allocated to each of the Company’s cash generating units, or groups of cash
generating units, that are expected to benefit from the synergies of the combination, irrespective of
whether other assets or liabilities of the Company are assigned to those units or groups of units.
Each unit or group of units to which the goodwill is so allocated:
represents the lowest level within the Company at which the goodwill is monitored for
internal management purposes; and
is not larger than a segment based on either the Company’s primary or the Company’s
secondary reporting format determined in accordance with AASB 114: Segment Reporting.
Impairment is determined by assessing the recoverable amount of the cash generating unit
(group of cash generating units), to which the goodwill relates. When the recoverable amount of
the cash generating unit (group of cash generating units) is less than the carrying amount, an
impairment loss is recognised. When goodwill forms part of a cash generating unit (group of
cash generating units) and an operation within that unit is disposed of, the goodwill associated
with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is
measured based on the relative values of the operation disposed of and the portion of the cash
generating unit retained.
Impairment losses recognised for goodwill are not subsequently reversed.
infomedia.com.au
34
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k) Intangible assets
Intangible assets acquired separately or in a business combination are initially measured at
cost. The cost of an intangible asset acquired in a business combination is its fair value as at
the date of acquisition. Following initial recognition, intangible assets are carried at cost less
any accumulated amortisation and any accumulated impairment losses. Internally generated
intangible assets, excluding capitalised development costs, are not capitalised and expenditure
is charged against profits in the year in which the expenditure is incurred.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible
assets with finite lives are amortised over the useful life and assessed for impairment whenever
there is an indication that the intangible asset may be impaired. The amortisation period and
the amortisation method for an intangible asset with a finite useful life is reviewed at least
at each financial year-end. Changes in the expected useful life or the expected pattern of
consumption of future economic benefits embodied in the asset are accounted for by changing
the amortisation period or method, as appropriate, which is a change in accounting estimate.
The amortisation expense on intangible assets with finite lives is recognised in profit or loss in
the expense category consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives are tested for impairment annually, either
individually or at the cash generating unit level. Such intangibles are not amortised. The useful
life of an intangible asset with an indefinite life is reviewed each reporting period to determine
whether indefinite life assessment continues to be supportable. If not, the change in the useful
life assessment from indefinite to finite is accounted for as a change in an accounting estimate
and is thus accounted for on a prospective basis.
Research and development costs
Research costs are expensed as incurred. An intangible asset arising from development
expenditure on an internal project is recognised only when the Company can demonstrate the
technical feasibility of completing the intangible asset so that it will be available for use or sale,
its intention to complete and its ability to use or sell the asset, how the asset will generate future
economic benefits, the availability of resources to complete the development and the ability to
measure reliably the expenditure attributable to the intangible asset during its development.
Following the initial recognition of the development expenditure, the cost model is applied
requiring the asset to be carried at cost less any accumulated amortisation and accumulated
impairment losses. Any expenditure so capitalised is amortised over the period of expected
benefits from the related project.
The carrying value of an intangible asset arising from development expenditure is tested for
impairment annually when the asset is not yet available for use, or more frequently when an
indication of impairment arises during the reporting period.
Gains or losses arising from derecognition of an intangible asset are measured as the difference
between the net disposal proceeds and the carrying amount of the asset and are recognised in
profit or loss when the asset is derecognised.
infomedia.com.au
35
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(l) Impairment of assets
The Company assesses at each reporting date whether there is an indication that an asset
may be impaired. If any such indication exists, or when annual impairment testing for an asset
is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s
recoverable amount is the higher of its fair value less costs to sell and its value in use and
is determined for an individual asset, unless the asset does not generate cash inflows that
are largely independent of those from other assets or groups of assets and the asset’s value
in use cannot be estimated to be close to its fair value. In such cases, the asset is tested for
impairment as part of the cash generating unit to which it belongs. When the carrying amount of
an asset or cash generating unit exceeds its recoverable amount, the asset or cash generating
unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of
money and the risks specific to the asset. Impairment losses relating to continuing operations
are recognised in those expense categories consistent with the function of the impaired asset
unless the asset is carried at revalued amount (in which case the impairment loss is treated as
a revaluation decrease).
An assessment is also made at each reporting date as to whether there is any indication that
previously recognised impairment losses may no longer exist or may have decreased. If such
indication exists, the recoverable amount is estimated. A previously recognised impairment loss
is reversed (with the exception of goodwill) only if there has been a change in the estimates used
to determine the asset’s recoverable amount since the last impairment loss was recognised. If
that is the case, the carrying amount of the asset is increased to its recoverable amount. That
increased amount cannot exceed the carrying amount that would have been determined, net of
depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal
is recognised in profit or loss unless the asset is carried at revalued amount, in which case the
reversal is treated as a revaluation increase. After such a reversal, the depreciation charge is
adjusted in future periods to allocate the asset’s revised carrying amount, less any residual
value, on a systematic basis over its remaining useful life.
(m) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any
accumulated impairment losses. Such cost includes the cost of replacing parts that are eligible
for capitalisation when the cost of replacing the parts is incurred. Similarly, when each major
inspection is performed, its cost is recognised in the carrying amount of the plant and equipment
as a replacement only if it is eligible for capitalisation.
Land and buildings are measured at cost less accumulated depreciation on buildings and less
any impairment losses recognised.
infomedia.com.au
36
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets
as follows:
Major depreciation periods are:
2006
2005
Freehold buildings:
40 years
40 years
Leasehold improvements:
5 to 20 years
5 to 20 years
Other plant and equipment:
3 to 15 years
3 to 15 years
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate, at each financial year end.
(i) Impairment
The carrying values of property, plant and equipment are reviewed for impairment at each
reporting date, with the recoverable amount being estimated when events or changes in
circumstances indicate that the carrying value may be impaired.
The recoverable amount of property, plant and equipment is the higher of fair value less costs to
sell and value in use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is
determined for the cash generating unit to which the asset belongs, unless the asset’s value in
use can be estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or cash generating units exceeds its
estimated recoverable amount. The asset or cash generating unit is then written down to its
recoverable amount.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further
future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the
net disposal proceeds and the carrying amount of the asset) is included in profit or loss in the
year the asset is derecognised.
(n) Leases
The determination of whether an arrangement is or contains a lease is based on the substance
of the arrangement and requires an assessment of whether the fulfilment of the arrangement
is dependent on the use of a specific asset or assets and the arrangement conveys a right to
use the asset.
infomedia.com.au
37
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Company as a lessee
Operating lease payments are recognised as an expense in the income statement on a straight-
line basis over the lease term. Lease incentives are recognised in the income statement as an
integral part of the total lease expense.
(ii) Company as a lessor
Leases in which the Company retains substantially all the risks and benefits of ownership of
the leased asset are classified as operating leases. Initial direct costs incurred in negotiating
an operating lease are added to the carrying amount of the leased asset and recognised as an
expense over the lease term on the same basis as rental income (i.e. on a straight-line basis).
(o) Trade and other payables
The Company has elected to apply the option available under AASB 1 of adopting AASB 132 and
AASB 139 from 1 July 2005. Outlined below are the relevant accounting policies for trade and
other payables applicable for the years ended 30 June 2006 and 30 June 2005.
Accounting policies applicable for the year ended 30 June 2006
Trade payables and other payables are carried at amortised costs and represent liabilities for
goods and services provided to the Company prior to the end of the financial year that are
unpaid and arise when the Company becomes obliged to make future payments in respect of
the purchase of these goods and services.
Accounting policies applicable for the year ended 30 June 2005
Trade payables and other payables 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 Company.
(p) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as
a result of a past event, it is probable that an outflow of resources embodying economic benefits
will be required to settle the obligation and a reliable estimate can be made of the amount of
the obligation.
Where the Company expects some or all of a provision to be reimbursed, for example under an
insurance contract, the reimbursement is recognised as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any provision is presented in the
income statement net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the
expected future cash flows at a pre-tax rate that reflects current market assessments of the
time value of money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised
as a borrowing cost.
infomedia.com.au
38
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(q) Deferred revenue
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.
(r) Interest bearing loans and borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received
less directly attributable transaction costs.
After initial recognition, interest bearing loans and borrowings are subsequently measured at
amortised cost using the effective interest method.
Gains and losses are recognised in profit or loss when the liabilities are derecognised.
(s) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of
new shares or options are shown in equity as a deduction, net of tax, from the proceeds.
(t) 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.
(u) Cost of sales
Cost of sales includes the direct cost of raw materials, direct salary and wages, and agency
costs associated with the manufacture and distribution of the product.
(v) Income tax
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws
used to compute the amount are those that are enacted or substantively enacted by the balance
sheet date.
infomedia.com.au
39
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred income tax is provided on all temporary differences at the balance sheet date between the
tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
when the deferred income tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and that, at the time of
the transaction, affects neither the accounting profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not reverse
in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-
forward of unused tax assets and unused tax losses, to the extent that it is probable thattaxable
profit will be available against which the deductible temporary differences and the carry-forward
of unused tax credits and unused tax losses can be utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, in which case a deferred tax asset is only recognised
to the extent that it is probable that the temporary difference will reverse in the foreseeable
future and taxable profit will be available against which the temporary difference can
be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available
to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are
recognised to the extent that it has become probable that future taxable profit will allow the
deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to
apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in
profit or loss.
infomedia.com.au
40
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right
exists to set off current tax assets against current tax liabilities and the deferred tax assets and
liabilities relate to the same taxable entity and the same taxation authority.
(w) Other taxes
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax
(GST) except:
when the GST incurred on a purchase of goods and services is not recoverable from the
taxation authority, in which case the GST is recognised as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
receivables and payables, which 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 balance sheet.
Cash flows are included in the Cash Flow Statement 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.
(x) Employee leave benefits
(i) Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected
to be settled within 12 months of the reporting date are recognised in other payables in respect of
employees’ services up to the reporting date. They are measured at the amounts expected to be
paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised
when the leave is taken and are measured at the rates paid or payable.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and
measured as the present value of expected future payments to be made in respect of services
provided by employees up to the reporting date using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee
departures, and period of service. Expected future payments are discounted using market yields
at the reporting date on national government bonds with terms to maturity and currencies that
match, as closely as possible, the estimated future cash flows.
infomedia.com.au
41
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(y) Share based payment transactions
The Company provides benefits to employees in the form of share based payment transactions,
whereby employees render services in exchange for shares or options over shares (equity-
settled transactions).
There are currently two plans in place to provide these benefits:
(i) the Employee Share Plan (ESP); and
(ii) the Employee Option Plan (EOP).
The cost of these equity-settled transactions with employees is measured by reference to the
fair value at the date at which they are granted. The fair value is determined by an external
valuer using a binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other
than conditions linked to the price of the shares of Infomedia Ltd (‘market conditions’).
The cost of equity-settled transactions is recognised, together with a corresponding increase in
equity, over the period in which the performance conditions are fulfilled, ending on the date on
which the relevant employees become fully entitled to the option (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until
vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number
of options that, in the opinion of the Directors of the Company, will ultimately vest. This opinion
is formed based on the best available information at balance date. No adjustment is made for
the likelihood of market performance conditions being met, as the effect of these conditions is
included in the determination of fair value at grant date.
Where the terms of an equity-settled option are modified, as a minimum an expense is recognised as
if the terms had not been modified. In addition, an expense is recognised for any increase in the value
of the transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled option is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised for the option is recognised immediately.
However, if a new option is substituted for the cancelled option, and designated as a replacement
option on the date that it is granted, the cancelled and new option are treated as if they were a
modification of the original option, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of earnings per share.
The Company has applied the exemptions of AASB 1: First-time Adoption of Australian
Equivalents to International Financial Reporting Standards in respect of equity-settled options
and has applied AASB 2: Share based Payments only to equity instruments granted after 7
November 2002 that had not vested on or before 1 January 2005.
infomedia.com.au
42
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(z) Earnings per share
Basic earnings per share is determined by dividing the profit attributed to members of the
parent after related income tax expense by the weighted average number of ordinary shares
outstanding during the financial year.
Diluted earnings per share 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.
infomedia.com.au
43
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
3. REVENUE AND EXPENSES
(i) Cost of sales
Direct wages
Other
Total cost of sales
(ii) Other income
2006
$’000
10,922
6,550
17,472
Net gain on disposal of property, plant and equipment including
iiiproperty held for resale
3(vi)
2,432
Unrealised gain on forward foreign currency exchange contracts
Fair value change on derivatives
Proceeds from settlement of legal claim
Total other income
(iii) Employee benefi t expense
Salaries and wages (including on-costs)
31
3(viii)
Redundancies and associated costs
3(viii)
Share based payment expense
Total employee benefi t expense
(iv) Depreciation and amortisation
Depreciation of non-current assets:
- Buildings
- Leasehold improvements
- Offi ce equipment
- Furniture and fi ttings
- Plant and equipment
Total depreciation of non-current assets
Amortisation of non-current assets
- Intellectual property
- Deferred development costs
Total amortisation of non-current assets
Total depreciation and amortisation
(v) Decrement in value of non-current assets
- Development
- Goodwill
- Intellectual property
Total decrement in value of non-current assets
3(viii)
infomedia.com.au
44
231
229
-
2,892
7,758
-
251
8,009
333
531
1,135
55
389
2,443
283
629
912
3,355
-
-
-
-
2005
$’000
7,832
9,572
17,404
193
-
-
2,489
2,682
9,109
475
330
9,914
345
495
998
46
354
2,238
1,702
729
2,431
4,669
812
381
11,589
12,782
2006
$’000
6,009
7,427
13,436
194
254
229
-
677
6,600
-
251
6,851
-
487
1,006
44
389
1,926
134
629
763
2,689
-
-
-
-
2005
$’000
6,377
8,164
14,541
-
-
-
2,489
2,489
7,898
475
330
8,703
-
455
908
43
354
1,760
1,552
729
2,281
4,041
812
381
11,589
12,782
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
2006
$’000
2005
$’000
2006
$’000
2005
$’000
S
t
a
t
e
m
e
n
t
s
3. REVENUE AND EXPENSES (CONTINUED)
(vi) Profi t on sale of assets
Gross proceeds from the sale of property, plant and equipment
Gross proceeds from the sale of property held for resale
Non-refundable payment for capital works
Net proceeds from the sale of assets
Net book value of assets disposed:
Freehold land and buildings
Leasehold improvements
Offi ce equipment
Furniture and fi ttings
Property held for resale
Net book value of assets disposed
Gross profi t on sale of assets
12
12
12
12
Non-cancellable surplus lease space and other non recoverable
lease incentives on corporate headquarters
Net profi t on sale of assets
(vii) Research & development costs
Total research & development costs incurred during the period
Less: development costs deferred
13
Net research and development costs expensed
(viii) Net signifi cant items
Signifi cant items charged to profi t before income tax:
Decrement in value of non-current assets
Legal costs incurred in enforcement of contractual rights
Redundancies and associated costs
Non-cancellable surplus lease space
Less:
Signifi cant items credited to profi t:
Proceeds from settlement of legal claims
Net signifi cant items charged to profi t before tax
Tax effect on signifi cant items
Net signifi cant items charged to profi t after tax
23,000
-
(500)
22,500
(16,644)
(1,309)
(29)
(218)
-
(18,200)
4,300
(1,868)
2,432
4,510
(2,221)
2,289
-
-
-
-
-
-
-
-
-
1,734
-
1,734
-
-
-
-
(1,541)
(1,541)
193
-
193
3,482
(1,490)
1,992
12,782
1,227
475
178
(2,489)
12,173
(3,065)
9,108
1,750
-
1,750
-
(1,309)
(29)
(218)
-
(1,556)
194
-
194
3,680
(1,424)
2,256
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3,482
(1,490)
1,992
12,782
1,227
475
178
(2,489)
12,173
(3,065)
9,108
infomedia.com.au
45
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
2006
$’000
2005
$’000
2006
$’000
2005
$’000
4. INCOME TAX
The major components of income tax expense are:
Income statement
Current income tax:
Current income tax charge
Adjustments in respect of current income tax of previous years.
Deferred income tax:
Relating to origination and reversal of temporary differences
Income tax expense reported in the income statement
A reconciliation between tax expense and the product of accounting
profi t before income tax multiplied by the Company’s applicable
income tax rate is as follows:
Accounting profi t before income tax
At the Company’s statutory income tax rate of 30% (2005: 30%)
Adjustments in respect of current income tax of previous years
Additional research and development deduction
Decrement in value of non-current assets
Expenditure not allowable for income tax purposes
Other
5,469
(327)
1,526
6,668
24,814
7,444
(327)
(660)
-
211
-
5,649
(248)
(2,027)
3,374
9,721
2,916
(248)
(283)
607
318
64
3,799
(225)
1,292
4,866
18,566
5,570
(225)
(601)
-
122
-
Income tax expense reported in the income statement
6,668
3,374
4,866
5,529
(205)
(2,407)
2,917
8,628
2,588
(205)
(283)
607
210
-
2,917
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. At the balance date, the possibility of default is remote.
Tax effect accounting by members of the tax consolidated group
Members of the tax consolidated group have entered into a tax funding agreement. The tax funding
agreement provides for the allocation of current taxes to members of the tax consolidated group,
while deferred taxes are allocated to members of the tax consolidated group in accordance with
the principles of AASB 112: Income Taxes. Allocations under the tax funding agreement are
made after the fi nalisation of the group’s income tax return. The allocation of taxes under the
tax funding agreement is recognised as an increase/decrease in the subsidiaries’ intercompany
accounts with the tax consolidated group head company, Infomedia Ltd.
infomedia.com.au
46
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
Notes
BALANCE SHEET
INCOME STATEMENT
4. INCOME TAX (CONTINUED)
Deferred income tax
Deferred income tax at 30 June relates to the
following:
2006
$’000
2005
$’000
2006
$’000
2005
$’000
CONSOLIDATED
Deferred tax liabilities
Prepayments
Derivatives
Property, plant and equipment
Deferred development costs
Intellectual property
Currency exchange
CONSOLIDATED
Deferred tax assets
Allowance for doubtful debts
Copyright intellectual property
Other payables
Employee entitlement provisions
Other provisions
Currency exchange
Gross deferred income tax assets
Deferred tax income/(expense)
PARENT
Deferred tax liabilities
Prepayments
Derivatives
Property, plant and equipment
Deferred development costs
Intellectual property
Currency exchange
PARENT
Deferred tax assets
Allowance for doubtful debts
Copyright intellectual property
Other payables
Employee entitlement provisions
Other provisions
Currency exchange
Deferred tax income/(expense)
(8)
(69)
(150)
(1,574)
(243)
(18)
(2,062)
75
176
97
710
732
-
1,790
(5)
(69)
(150)
(1,335)
-
(17)
(1,576)
69
176
91
524
732
-
1,592
-
-
-
(1,097)
(241)
-
(1,338)
169
-
82
663
51
23
988
-
-
-
(1,097)
-
-
(1,097)
169
-
63
473
51
23
779
8
69
150
477
2
18
(94)
176
15
47
681
(23)
-
-
-
(15)
(2,195)
(56)
127
-
(186)
224
51
23
1,526
(2,027)
5
69
150
238
-
17
(100)
176
28
51
681
(23)
-
-
-
(15)
(2,436)
(56)
127
-
(200)
99
51
23
1,292
(2,407)
infomedia.com.au
47
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
5. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profi t for the year attributable
to ordinary equity holders of the parent by the weighted average number of ordinary shares
outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profi t attributable to
ordinary shareholders by the weighted average number of ordinary shares outstanding during
the year (adjusted for the effects of dilutive options).
The following refl ects the income and share data used in the total operations basic and diluted
earnings per share computations:
Net profi t attributable to equity holders from continuing operations
Weighted average number of ordinary shares for basic earnings per share
Effect of dilution:
Employee share plans
Share options
Notes
CONSOLIDATED
2006
$’000
18,146
2005
$’000
6,347
Number of shares
Number of shares
325,456,844
325,037,011
14,729
132,313
7,416
1,198
Adjusted weighted average number of ordinary shares for diluted earnings per share
325,603,886
325,045,625
There have been no other transactions involving ordinary shares or potential ordinary shares
since the reporting date and before the completion of these fi nancial statements.
infomedia.com.au
48
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
2006
$’000
2005
$’000
2006
$’000
2005
$’000
6. DIVIDENDS PROPOSED OR PAID
(a) Dividends paid during the year:
Franked interim dividend – 1.90 cents (2005:1.70) per share
6,184
5,527
6,184
5,527
Prior year fi nal franked dividend – 1.70 cents (2005: 1.90 cents)
per share
Special dividend – 3.50 cents per share
Total dividends paid during the year
(b) Dividends proposed and not recognised as a liability:
Final franked dividend – 2.10 cents (2005: 1.70) per share
Special franked dividend – 3.50 cents (2005: Nil) per share
(c) Franking credit balance:
The amount of franking credits available for the subsequent
fi nancial year are:
–
–
franking account balance as at the end of the fi nancial year
franking credits that will arise from the payment of income tax
payable as at the end of the fi nancial year
The tax rate at which paid dividends have been franked is 30% (2005: 30%).
Dividends proposed will be franked at the rate of 30% (2005: 30%).
7. TRADE AND OTHER RECEIVABLES (CURRENT)
Trade debtors (a)
Allowance for doubtful debts
Other debtors
5,533
11,391
23,108
6,835
11,391
18,226
6,174
-
11,701
5,533
-
5,533
5,533
11,391
23,108
6,835
11,391
18,226
6,174
-
11,701
5,533
-
5,533
6,362
11,730
3,126
9,488
1,080
12,810
6,707
(480)
6,227
524
6,751
6,464
(877)
5,587
455
6,042
4,180
(228)
3,952
457
4,409
4,717
(562)
4,155
452
4,607
(a) Trade debtors are non-interest bearing and are generally on 30-60 day terms. An allowance for doubtful
debts is made when there is objective evidence that a trade debtor is impaired. The amount of the allowance/
impairment loss is recognised as the difference between the carrying amount of the debtor and the estimated
future cash fl ows expected to be received from the relevant debtors.
infomedia.com.au
49
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
2006
$’000
2005
$’000
2006
$’000
2005
$’000
8. INVENTORIES
Raw materials
At cost
Total Inventories at the lower of cost and net realisable value
9. INTERCOMPANY (NON-CURRENT)
Wholly-owned controlled entities
10. OTHER FINANCIAL ASSETS
(NON-CURRENT)
Investments in controlled entities
Other receivables
84
84
-
-
-
804
804
88
88
-
-
-
1,260
1,260
71
71
451
451
248
804
1,052
44
44
22,043
22,043
247
1,260
1,507
11
11. INTERESTS IN CONTROLLED ENTITIES
Name
Country of
Percentage of equity interest
incorporation
held by the Company
2006
%
2005
%
IFM Europe Ltd
- ordinary shares
United
Kingdom
Infomedia Investments Pty Ltd
- ordinary shares - $2 only
Australia
Datateck Publishing Pty Ltd
- ordinary shares - $4 only
Australia
AutoConsulting Pty Ltd
- ordinary shares - $1 only
Australia
IFM North America Inc
- ordinary shares
United States
of America
100
100
100
100
100
100
100
100
100
100
infomedia.com.au
50
247
247
-
-
-
1
248
-
-
-
-
247
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
2006
$’000
2005
$’000
2004
$’000
2006
$’000
2005
$’000
2004
$’000
12. PROPERTY, PLANT AND EQUIPMENT
N
o
t
e
s
t
o
t
h
e
Freehold land and buildings
At cost
Accumulated depreciation
Leasehold improvements
At cost
Accumulated amortisation
Total land and buildings
Offi ce equipment
At cost
Accumulated depreciation
Furniture and fi ttings
At cost
Accumulated depreciation
Plant and equipment
At cost
Accumulated depreciation
-
-
-
1,286
(369)
917
917
6,925
(4,616)
2,309
334
(119)
215
2,597
(1,972)
625
-
-
-
915
(148)
767
767
5,834
(3,943)
1,891
212
(93)
119
17,531
(555)
16,976
3,039
(901)
2,138
17,531
(210)
17,321
2,664
(419)
2,245
19,114
19,566
4,691
(2,582)
2,109
471
(121)
350
5,772
(3,580)
2,192
554
(167)
387
2,512
(1,623)
889
2,325
2,597
(1,324)
(1,972)
1,001
625
-
-
-
2,764
(725)
2,039
2,039
4,995
(3,038)
1,957
529
(151)
378
2,512
(1,623)
889
-
-
-
2,391
(283)
2,108
2,108
4,024
(2,130)
1,894
449
(108)
341
2,325
(1,324)
1,001
Total plant and equipment
3,149
3,468
3,460
2,635
3,224
3,236
Total property, plant and equipment
At cost
Accumulated depreciation and amortisation
Total written down amount
11,142
(7,076)
4,066
29,408
(6,826)
22,582
27,682
(4,656)
23,026
9,558
(6,156)
3,402
10,800
(5,537)
5,263
9,189
(3,845)
5,344
infomedia.com.au
51
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
CONSOLIDATED
INFOMEDIA LTD
2006
$’000
2005
$’000
2004
$’000
2006
$’000
2005
$’000
2004
$’000
12. PROPERTY, PLANT AND EQUIPMENT
(CONTINUED)
Reconciliation of property, plant and equipment
carrying values;
Freehold land and buildings
Carrying amount – opening balance
16,976
17,321
-
(16,644)
-
(332)
-
2,138
619
(1,309)
-
(531)
917
2,192
1,281
(29)
(1,135)
2,309
387
101
(218)
(55)
215
889
125
-
(389)
625
-
-
-
(345)
16,976
2,245
388
-
-
(495)
2,138
2,109
1,081
-
(998)
2,192
350
83
-
(46)
387
1,001
249
(7)
(354)
889
Additions
Disposals
Transfers to property held for resale
Depreciation
Carrying amount – closing balance
Leasehold Improvements
Carrying amount – opening balance
Additions
Disposals
Transfers to property held for resale
Depreciation
Carrying amount – closing balance
Offi ce equipment
Carrying amount – opening balance
Additions
iiDisposals
Depreciation
Carrying amount – closing balance
Furniture and fi ttings
Carrying amount – opening balance
Additions
Disposals
Depreciation
Carrying amount – closing balance
Plant and equipment
Carrying amount – opening balance
Additions
Disposals
Depreciation
Carrying amount – closing balance
infomedia.com.au
52
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
-
-
-
-
-
-
2,039
524
(1,309)
-
(487)
767
1,957
969
(29)
(1,006)
1,891
378
3
(218)
(44)
119
889
125
-
(389)
625
-
-
-
-
-
-
2,108
386
-
-
(455)
2,039
1,894
971
-
(908)
1,957
341
80
-
(43)
378
1,001
242
-
(354)
889
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
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
CONSOLIDATED
INFOMEDIA LTD
Development
Intellectual
Development
Intellectual
costs1
Property2
Goodwill2
Total
costs1
Property2
Goodwill2
Total
$’000
$’000
$’000
$’000
$000
$’000
$’000
$’000
13. INTANGIBLE ASSETS
iiiiiiAND GOODWILL
At 1 July 2005
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
Year ended 30 June 2006
At 1 July 2005, net of accumulated
iiiamortisation and impairment
Additions – internal development
Purchased intellectual property
Impairment
Amortisation
At 30 June 2006, net of accumulated
4,008
(351)
3,657
3,657
2,221
-
-
(629)
1,500
(338)
1,162
8,837
-
8,837
14,345
(689)
13,656
1,162
8,837
13,656
-
2,410
-
(283)
-
-
-
-
2,221
2,410
-
(912)
4,008
(351)
3,657
3,657
1,424
-
-
(629)
-
-
-
-
-
2,410
-
(134)
6,026
10,034
-
6,026
(351)
9,683
6,026
-
-
-
-
9,683
1,424
2,410
-
(763)
iiiamortisation and impairment
5,249
3,289
8,837
17,375
4,452
2,276
6,026
12,754
At 30 June 2006
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
6,229
(980)
5,249
3,910
(621)
3,289
8,837
-
8,837
18,976
(1,601)
17,375
5,432
(980)
4,452
2,410
(134)
2,276
6,026
-
6,026
13,868
(1,114)
12,754
1. Internally generated.
2. Purchased as part of business/territory acquisition.
Development costs have been capitalised at cost. This intangible asset has been assessed as having a fi nite
life and is amortised using the straight-line method over a period not exceeding four years. If an impairment
indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that
the recoverable amount is lower than the carrying amount.
Intellectual property includes intangible assets acquired through business or territory acquisition and relates
primarily to copyright and software code over key products. Intellectual property is amortised over its useful
life, being 10 years.
As from 1 July 2005, goodwill is no longer amortised but is now subject to annual impairment testing (see Note 14).
infomedia.com.au
53
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
13. INTANGIBLE ASSETS AND
iiiiiiGOODWILL (CONTINUED)
At 1 July 2004
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
Year ended 30 June 2005
At 1 July 2004, net of accumulated
iiiamortisation and impairment
Additions – internal development
Purchased intellectual property
Impairment
Amortisation
At 30 June 2005, net of accumulated
CONSOLIDATED
INFOMEDIA LTD
Development
Intellectual
Development
Intellectual
costs
Property
Goodwill
Total
costs
Property
Goodwill
Total
$’000
$’000
$’000
$’000
$000
$’000
$’000
$’000
5,648
(1,940)
3,708
18,019
(3,566)
14,453
9,218
-
9,218
32,885
(5,506)
27,379
5,648
(1,940)
3,708
16,519
(3,378)
13,141
6,407
-
6,407
28,574
(5,318)
23,256
13,141
6,407
-
-
(11,589)
(1,552)
-
-
-
-
23,256
1,490
-
-
-
(381)
(12,782)
-
(2,281)
6,026
9,683
6,026
10,034
-
6,026
(351)
9,683
3,708
1,490
-
(812)
(729)
14,453
9,218
-
-
(11,589)
(1,702)
-
-
(381)
-
27,379
1,490
-
(12,782)
(2,431)
3,708
1,490
-
(812)
(729)
iiiamortisation and impairment
3,657
1,162
8,837
13,656
3,657
At 30 June 2005
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
4,008
(351)
3,657
1,500
(338)
1,162
8,837
-
8,837
14,345
(689)
13,656
4,008
(351)
3,657
Intangible assets that had a net zero carrying value at the end of the 2005 fi nancial year, where the expected
future use of those assets was considered highly unlikely, have been written out by crediting the gross carrying
amount and debiting the accumulated amortisation.
infomedia.com.au
54
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
14. IMPAIRMENT TESTING OF GOODWILL AND INTANGIBLES WITH INDEFINITE LIVES
Goodwill acquired through business combinations has been allocated to two individual cash generating units
for impairment testing as follows:
Electronic Catalogue & Publishing cash generating unit
Business Systems (NOVA product group) cash generating unit
Electronic Catalogue and Publishing cash generating unit
The recoverable amount of the Electronic Catalogue and Publishing cash generating unit has been determined
based on a value in use calculation using cash fl ow projections based on fi nancial budgets approved by senior
management.
The discount rate applied to cash fl ow projections is 14% (2005: 14%) covering a fi ve year period.
Business Systems (NOVA product group) cash generating unit
The recoverable amount of the Business Systems (NOVA product group) cash generating unit has also been
determined based on a value in use calculation using cash fl ow projections based on fi nancial budgets approved
by senior management.
The discount rate applied to cash fl ow projections is 14% (2005: 14%) covering a fi ve year period
Carrying amount of goodwill allocated to each of the cash generating units is as follows:
CONSOLIDATED
Electronic Catalogue
Business Systems
and Publishing
(NOVA product group)
Total
2006
$’000
8,541
2005
$’000
8,541
2006
$’000
296
2005
$’000
296
2006
$’000
8,837
2005
$’000
8,837
Carrying amount of goodwill
PARENT
Carrying amount of goodwill
6,026
6,026
-
-
6,026
6,026
Key assumptions used in value in use calculations for 30 June 2006 and 30 June 2005
The following describes each key assumption on which management has based its cash fl ow projections when
determining the value in use of its cash generating units:
the Company will continue to have access to the data supply from automakers over the budgeted period;
the Company will not experience any substantial adverse movements in currency exchange rates; and
the Company’s research and development program will ensure that the current suite of products remains
leading edge.
infomedia.com.au
55
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
15(a)
2006
$’000
1,131
2,843
3,974
2005
$’000
1,598
2,042
3,640
2006
$’000
565
2,423
2,988
2005
$’000
1,113
1,881
2,994
16(a)
500
500
-
-
500
500
-
-
15. TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors
Other creditors
(a) Trade creditors are non-interest bearing and are normally
settled on 30 day terms.
16. INTEREST BEARING LOANS AND BORROWINGS
(CURRENT)
Bank loans
(a) iiThe bank loan drawings have been made under a multi-
currency cash advance facility. The drawings at balance date are
denominated in Australian dollars. The USD13 million facility
terminates in August 2008 (refer also Notes 21(c), 22(c) and 31).
17. PROVISIONS (CURRENT)
Employee entitlements
Provision for non-cancellable surplus lease space and other lease
incentives
19(a)
18. DEFERRED REVENUE (CURRENT)
Revenue in advance
2,063
1,971
1,353
648
2,711
816
816
-
1,971
810
810
648
2,001
405
405
1,294
-
1,294
367
367
infomedia.com.au
56
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
19(a)
19(b)
17
19. PROVISIONS (NON-CURRENT)
Employee entitlements
Provision for non-cancellable surplus lease space and other lease
iiiiiincentives
Make good provision
(a) Movement in non-cancellable surplus lease space and other
iiiiiilease incentives provision:
Carrying amount at the beginning of the year
Arising during the year
Utilised
Carrying amount at the end of the year
Current
Non-current
The provision for non-cancellable lease space and other lease
incentives has been made pursuant to the lease obligations under
contract to the extent that no future benefi ts are anticipated.
(b) Movement in make good provision:
Carrying amount at the beginning of the year
Arising during the year
Carrying amount at the end of the year
The provision for make good has been made pursuant to the
Company’s obligation to restore leased premises to original
condition at the end of the lease term.
2006
$’000
545
1,294
500
2,339
178
1,868
(104)
1,942
648
1,294
1,942
-
500
500
2005
$’000
356
178
-
534
-
178
-
178
-
178
178
-
-
-
2006
$’000
393
1,294
500
2,187
178
1,868
(104)
1,942
648
1,294
1,942
-
500
500
2005
$’000
282
178
-
460
-
178
-
178
-
178
178
-
-
-
infomedia.com.au
57
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
20. CONTRIBUTED EQUITY AND RESERVES
Ordinary shares
2006
$’000
17,488
17,488
2005
$’000
17,488
17,488
2006
$’000
17,488
17,488
2005
$’000
17,488
17,488
Effective 1 July 1998, the Corporations legislation in place abolished the concepts of authorised capital and par
value shares. Accordingly, the Parent does not have authorised capital nor par value in respect of its issued shares.
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
Movement in ordinary shares on issue
At 1 July 2004
Employee Share Plan issuance – 15/7/2004
Employee Share Plan issuance – 20/1/2005
At 1 July 2005
Employee Share Plan issuance – 18/7/2005
At 30 June 2006
Employee Option Plan
Notes
Number
$’000
23
23
23
324,762,959
17,488
192,816
200,430
-
-
325,156,205
17,488
315,368
-
325,471,573
17,488
A total of 1,700,000 options were issued to eligible employees during the year at an average exercise price of $0.50.
Refer to Note 23.
30 June 2006
Movement in ordinary shares on issue
At 1 July 2004
Currency translation differences
Share based payments
At 30 June 2005
Currency translation differences
Share based payments
At 30 June 2006
Nature and purpose of reserves
Employee equity benefi ts reserve
Notes
CONSOLIDATED
Employee equity
Foreign currency
benefi ts reserve
translation reserve
$’000
$’000
395
-
330
725
-
251
976
9
(28)
-
(19)
53
-
34
INFOMEDIA LTD
Employee equity
benefi ts reserve
$’000
395
-
330
725
-
251
976
Total
$’000
404
(28)
330
706
53
251
1,010
This reserve is used to record the value of equity benefi ts provided to employees and Directors as part of their
compensation. Refer to Note 23 for further details.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of
the fi nancial statements of foreign subsidiaries. It is also used to record the effect of hedging net investments
in foreign operations.
infomedia.com.au
58
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
S
t
a
t
e
m
e
n
t
s
21. STATEMENT OF CASH FLOWS
(a) Reconciliation of profi t after tax to the net cash fl ows from
operations
Profi t from ordinary activities after income tax expense
Depreciation of non-current assets
Amortisation of non-current assets
Amortisation of employee options
Decrement in value of non-current assets
Gross profi t on sale of property, plant and equipment
including property held for resale
Changes in assets and liabilities
(Increase)/decrease in trade and other debtors
(Increase)/decrease in inventories
(Increase)/decrease in prepayments
(Increase)/decrease in future income tax benefi t
(Increase)/decrease in deferred development costs
Decrease/(increase) in trade and other creditors
Decrease/(increase) in allowance for doubtful debts
Decrease/(increase) in provision for employee entitlements
Decrease/(increase) in other provisions
Decrease/(increase) in income tax payable
Decrease/(increase) in deferred income tax liability
Decrease/(increase) in revenue in advance
Net cash fl ow from operating activities
(b) Reconciliation of cash
Cash balance comprises:
– cash at bank
– cash on deposit
(c) Financing facilities available
At reporting date, the following fi nancing facilities had been
negotiated and were available:
Total facilities:
2006
$’000
18,146
2,443
912
251
-
(4,300)
(31)
4
(4)
(803)
(2,221)
21
(399)
178
1,868
2,236
721
7
19,029
25,853
168
26,021
2005
$’000
6,347
2,238
2,431
330
12,782
(193)
595
7
(176)
(240)
(1,489)
(1,463)
737
483
178
(458)
(2,267)
33
19,875
2006
$’000
13,700
1,926
763
251
-
(194)
2,475
(29)
(14)
(813)
(1,424)
(320)
(332)
66
1,868
673
478
38
19,112
2005
$’000
5,711
1,760
2,281
330
12,782
-
2,685
24
(106)
(101)
(1,489)
(1,719)
422
330
178
(593)
(2,508)
36
20,023
8,189
2,632
10,821
25,079
10
25,089
6,171
2,632
8,803
USD13 million multi-currency cash advance facility
17,580
17,060
17,580
17,060
Facilities used at reporting date:
Bank loans
Facilities unused at reporting date:
Bank loans
500
-
500
-
17,080
17,060
17,080
17,060
infomedia.com.au
59
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
2006
$’000
2005
$’000
2006
$’000
2005
$’000
22. COMMITMENTS AND CONTINGENCIES
(a) Lease expenditure commitments
Operating leases (non-cancellable):
Minimum lease payments
– not later than one year
– later than one year and not later than fi ve years
– aggregate operating lease expenditure contracted for at balance date
1,657
4,483
6,140
505
117
622
1,199
3,453
4,652
334
117
451
Operating lease commitments are for offi ce accommodation both in Australia and abroad.
(b) Performance bank guarantee
Infomedia Ltd has a performance bank guarantee to a maximum value of $700,000 relating to the lease
commitments of its corporate headquarters.
(c)
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).
23. SHARE BASED PAYMENT PLANS
Employee Option Plan
The Employee Option Plan entitles the Company to offer ‘eligible employees’ options to subscribe for shares
in the Company. Options will be granted at a nil issue price unless otherwise determined by the Directors of
the Company and each option enables the holder to subscribe for one share. The exercise price for the options
granted will be as specifi ed on the option certifi cate or, if not specifi ed, the volume weighted average price for
shares of the Company for the fi ve days’ trading immediately before the day on which the options were granted.
The options may be exercised in accordance with the date determined by the 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
2006
2005
Number of
options
Weighted
average
exercise price
Number of
options
Weighted
average
exercise price
23(a)
23(b)
23(c)
23(d)
727,000
1,700,000
(477,000)
-
1,950,000
$0.73
$0.50
$0.73
-
$0.52
6,908,000
100,000
(6,281,000)
-
727,000
$0.86
$0.67
$0.88
-
$0.73
Balance at beginning of year
– granted
– forfeited
– exercised
Balance at end of year
infomedia.com.au
60
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
23. SHARE BASED PAYMENT PLANS (CONTINUED)
(a) Options held at the beginning of the reporting period
The following table summarises information about options held by employees at 1 July 2005
Number of options
Grant date
Earliest vesting
date
Expiry date
477,000
150,000
100,000
1/7/2002
24/5/2004
20/9/2004
1/7/2004
24/5/2005
20/9/2005
1/8/2005
31/5/2007
20/9/2007
Weighted
average
exercise price
$0.73
$0.75
$0.67
(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
Grant date
Earliest vesting
date
Expiry date
250,000
1,000,000
250,000
200,000
8/7/2005
27/10/2005
6/10/2005
5/1/2006
5/1/2006
5/1/2006
5/2/2008
5/2/2008
5/2/2008
16/12/2005
16/12/2006
16/1/2009
Weighted
average
exercise price
$0.50
$0.50
$0.48
$0.49
(c) Options exercised during the reporting period
There were no options exercised during the year ended 30 June 2006.
(d) Options held at the end of the reporting period
The following table summarises information about options held by employees at 30 June 2006.
Number of options
Grant date
Earliest vesting
date
Expiry date
Weighted
average
exercise price
150,000
100,000
250,000
1,000,000
250,000
200,000
24/5/2004
20/9/2004
8/7/2005
27/10/2005
6/10/2005
24/5/2005
20/9/2005
5/1/2006
5/1/2006
5/1/2006
31/5/2007
20/9/2007
5/2/2008
5/2/2008
5/2/2008
16/12/2005
16/12/2006
16/1/2009
$0.75
$0.67
$0.50
$0.50
$0.48
$0.49
(e) Other details re options
The weighted average fair value of options granted during the year was $0.087.
The fair value of the equity-settled options granted under the option plan is estimated as at the grant date using
a binomial model taking into account the term and conditions upon which the options were granted.
The following table lists the inputs to the model used for the year.
Dividend yield (%)
Expected volatility (%)
Risk free rate (%)
Option exercise price
Weighted average share price at grant date
2006
6.8%
37.9%
5.4%
$0.50
$0.50
2005
5.0%
31%
5.4%
$0.67
$0.67
infomedia.com.au
61
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
23. SHARE BASED PAYMENT PLANS (CONTINUED)
Employee Share Plan
The Company provides employees, not including Directors, the opportunity to acquire shares in the Company.
The scheme applies to employees with at least 12 months service and provides that offers be made to at least
75% of the persons employed by the Company for at least 12 months and not more than twice in each fi nancial
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 benefi cial interest in more than 5% of the Company or who control
or may cast more than 5% of the maximum votes at a general meeting of the Company. The total number of
shares issued pursuant to the Employee Share Plan at the date of this Report is 1,488,912 (2005: 1,488,912). The
following table lists the number of shares issued by tranche since the inception of the plan.
Date of issue
Number of shares
Rounded unit
Value of tranche
price $
$’000
5/2/2001
5/10/2001
21/1/2002
19/7/2002
6/2/2003
21/7/2003
23/1/2004
15/7/2004
20/1/2005
18/7/2005
Total
60,168
64,872
74,765
125,280
130,986
169,644
154,583
192,816
200,430
315,368
1,488,912
1.81
1.57
1.27
0.77
0.87
0.79
0.93
0.75
0.76
0.50
109
102
95
96
114
134
144
145
153
158
1,250
24. PENSIONS AND OTHER POST-EMPLOYMENT PLANS
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 2006 were 9% (2005: 9%) of employees’ wages and salaries, which
are legally enforceable in Australia. The superannuation plans provide accumulation benefi ts.
25. TRANSITION TO AIFRS
For all periods up to and including the year ended 30 June 2005, the Company prepared its fi nancial statements
in accordance with Australian Generally Accepted Accounting Principles (AGAAP). These annual fi nancial
statements for the year ended 30 June 2006 are the fi rst the Company is required to prepare in accordance with
Australian equivalents to International Financial Reporting Standards (AIFRS).
Accordingly, the Company has prepared fi nancial statements that comply with AIFRS applicable for periods
beginning on or after 1 January 2005 and the signifi cant accounting policies meeting those requirements are
described in Note 2. In preparing these fi nancial statements, the Company has started from an opening balance
sheet as at 1 July 2004, the Company’s date of transition to AIFRS, and made those changes in accounting
policies and other restatements required by AASB 1: First-time Adoption of AIFRS.
This note explains the principal adjustments made by the Company in restating its AGAAP balance sheet as at
1 July 2004 and its previously published AGAAP fi nancial statements for the year ended 30 June 2005.
Exemptions applied
AASB 1 allows fi rst-time adopters certain exemptions from the general requirement to apply AIFRS retrospectively.
The Company has taken the following exemptions:
Comparative information for fi nancial instruments is prepared in accordance with AGAAP and the Company
has adopted AASB 132: Financial Instruments: Disclosure and Presentation and AASB 139: Financial
Instruments: Recognition and Measurement from 1 July 2005.
infomedia.com.au
62
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
25. TRANSITION TO AIFRS (CONTINUED)
AASB 2: Share based Payment has not been applied to any equity instruments that were granted on or
before 7 November 2002, nor has it been applied to equity instruments granted after 7 November 2002 that
vested before 1 January 2005.
Explanation of material adjustments to the cash fl ow statement
There are no material differences between the cash fl ow statement presented under AIFRS and the cash fl ow
statement presented under previous AGAAP.
Balance sheet refl ecting reconciliation of adjustments to AIFRS as at 1 July 2004:
Notes
CONSOLIDATED
INFOMEDIA LTD
AGAAP
AIFRS
impact
AIFRS
AGAAP
AIFRS
impact
6,887
9,389
95
1,534
364
18,269
-
-
23,026
27,379
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
17,488
9
34,024
51,521
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
395
(395)
-
6,887
9,389
95
1,534
364
6,333
8,565
68
-
328
18,269
15,294
-
-
23,026
27,379
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
17,488
404
33,629
51,521
23,180
247
5,344
23,255
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
17,488
-
34,043
51,531
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
395
(395)
-
A
A
AIFRS
6,333
8,565
68
-
328
15,294
23,180
247
5,344
23,255
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
17,488
395
33,648
51,531
infomedia.com.au
63
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Property held for resale
Other
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Inter-company
Other fi nancial assets
Property, plant and equipment
Intangible assets and goodwill
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Income tax payable
Deferred revenue
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Interest bearing liabilities
Provisions
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profi ts
TOTAL EQUITY
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
25. TRANSITION TO AIFRS (CONTINUED)
Balance sheet refl ecting reconciliation of adjustments to AIFRS as at 30 June 2005:
Notes
CONSOLIDATED
INFOMEDIA LTD
AGAAP
AIFRS
impact
AIFRS
AGAAP
AIFRS
impact
AIFRS
B,C
10,821
6,042
88
540
17,491
1,260
-
22,582
12,448
988
37,278
54,769
3,640
1,971
1,215
810
7,636
534
1,338
1,872
9,508
-
-
-
-
-
-
-
-
1,208
-
1,208
1,208
-
-
-
-
-
-
-
-
-
10,821
6,042
88
540
8,803
4,607
44
434
17,491
13,888
1,260
23,303
-
22,582
13,656
988
38,486
55,977
3,640
1,971
1,215
810
7,636
534
1,338
1,872
9,508
247
5,263
8,946
779
38,538
52,426
2,994
1,294
1,080
367
5,735
460
1,097
1,557
7,292
-
-
-
-
-
-
-
-
737
-
737
737
-
-
-
-
-
-
-
-
-
8,803
4,607
44
434
13,888
23,303
247
5,263
9,683
779
39,275
53,163
2,994
1,294
1,080
367
5,735
460
1,097
1,557
7,292
45,261
1,208
46,469
45,134
737
45,871
A
A,B,C
17,488
(19)
27,792
45,261
-
725
483
1,208
17,488
17,488
706
28,275
46,469
-
27,646
45,134
-
725
12
737
17,488
725
27,658
45,871
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Receivables
Investments
Property, plant and equipment
Intangible assets and goodwill
Deferred tax assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Income tax payable
Deferred revenue
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profi ts
TOTAL EQUITY
infomedia.com.au
64
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
25. TRANSITION TO AIFRS (CONTINUED)
Income statement for the year ended 30 June 2005:
YEAR ENDED 30 June 2005
Notes
CONSOLIDATED
INFOMEDIA LTD
Sales revenue
Rental income
Interest revenue
Cost of sales
Gross profi t
Other income
Employee benefi ts expense
Depreciation and amortisation
Decrement in value of non-current assets
A
B
C
Finance costs
Other expenses
Profi t before income tax expense
Income tax expense
Profi t after income tax expense
AGAAP
$’000
59,137
618
272
60,027
(17,404)
42,623
2,682
(9,584)
(5,907)
(12,752)
(97)
(8,122)
8,843
(3,374)
5,469
AIFRS
impact
$’000
-
-
-
-
-
-
-
(330)
1,238
(30)
-
-
878
-
878
AIFRS
$’000
AGAAP
$’000
59,137
52,628
618
272
60,027
(17,404)
42,623
2,682
(9,914)
(4,669)
-
255
52,883
(14,541)
38,342
2,489
(8,373)
(4,808)
(12,782)
(12,752)
(97)
(8,122)
9,721
(3,374)
6,347
(97)
(6,580)
8,221
(2,917)
5,304
AIFRS
impact
$’000
-
-
-
-
-
-
-
(330)
767
(30)
-
-
407
-
407
AIFRS
$’000
52,628
-
255
52,883
(14,541)
38,342
2,489
(8,703)
(4,041)
(12,782)
(97)
(6,580)
8,628
(2,917)
5,711
Impact of adopting AIFRS
Outlined below are the areas impacted by adoption of AIFRS, including the fi nancial impact on equity and profi t.
(A) Under AASB 2: Share based Payments, the Company has recognised the fair value of options granted to
employees as remuneration as an expense on a pro-rata basis over the vesting period in the income statement
with a corresponding adjustment to equity. This standard extends to other forms of equity based remuneration
such as Infomedia’s Employee Share Plan. Share based payment costs were not recognised under AGAAP.
(B) Goodwill is not amortised under AASB 3: Business Combinations, but was amortised under AGAAP.
(C) Under AASB 136: Impairment of Assets the recoverable amount of an asset is determined as the higher of
net selling price and value in use. The asset base subject to impairment testing under AIFRS is higher than
AGAAP due to the non-amortisation of goodwill. The result is that the impairment writedown for FY2005 is
higher by $30,000 under AIFRS.
infomedia.com.au
65
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
26. DIRECTOR AND EXECUTIVE DISCLOSURES
(a) Details of Key Management Personnel
(i) DIRECTORS
Richard Graham1
Gary Martin2
Chairman
Chief Executive Officer
Barry Ford (resigned 31 March 2005)
Non-executive Director
Myer Herszberg
Non-executive Director
Geoffrey Henderson
Non-executive Director
Frances Hernon
Non-executive Director
Andrew Moffat (appointed 31 March 2005)
Non-executive Director
(ii) EXECUTIVES
Andrew Pattinson3
Peter Adams
Nick Georges
Michael Roach
Managing Director – IFM Europe Ltd
Chief Financial Officer
Company Secretary, Legal Counsel and Alternate Director
General Manager – Electronic Catalogues and Data Management
Mark Kujacznski4
Vice President – IFM North America Inc
1. Retired from the position of Chief Executive Officer effective 31 December 2004.
2. Appointed as an Executive Director on 31 October 2004 and promoted to the position of Chief Executive Officer
effective 1 January 2005.
3. Resigned as a Director of Infomedia Ltd on 31 October 2004. Continues in capacity as an executive.
4. Commenced employment on 22 August 2005.
(b) Compensation of Key Management Personnel
(i) COMPENSATION PHILOSOPHY
The performance of the Company depends upon the quality of its Directors and executives. To prosper, the
Company must attract, motivate and retain highly skilled Directors and executives. To this end, the Company
embodies the following principles in its compensation framework:
Provide competitive rewards to attract high calibre executives.
Link executive rewards to shareholder value.
Establish appropriate performance hurdles in relation to variable executive compensation.
Remuneration Committee
The Remuneration & Nomination Committee (Remuneration Committee) of the Board of Directors is responsible
for recommending to the Board the Company’s remuneration and compensation policy arrangements for all
Key Management Personnel. The Remuneration 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.
infomedia.com.au
66
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
26. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)
Compensation structure
In accordance with best practice corporate governance recommendations, the structure of non-executive
Director and senior executive compensation is separate and distinct.
Non-executive Director compensation
Objective
The Board seeks to set aggregate compensation at a level which provides the Company with the ability to attract
and retain Directors of appropriate calibre, whilst incurring a cost which is acceptable to shareholders.
Structure
The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive Directors
shall be determined from time to time by a general meeting. An amount not exceeding the amount determined
is then available between the Directors as appropriate (for the year ended 30 June 2006, Non-executive
Directors’ compensation totalled $311,489). The latest determination was at the Annual General Meeting held
on 30 October 2002, when shareholders approved a maximum aggregate compensation of $450,000 per year.
The Board has historically considered the advice from external consultants, as well as the fees paid to non-
executive Directors of comparable companies when undertaking a review process.
Senior Executive and Executive Director compensation
Objective
The Company aims to reward executives with a level and mix of compensation commensurate with their position
and responsibilities within the Company and so as to:
reward executives for Company and individual performance against targets set by reference to appropriate
benchmarks;
align the interests of executives with those of shareholders;
link reward with the strategic goals and performance of the Company; and
ensure total compensation is competitive by market standards.
Structure
In determining the level and make-up of executive compensation, the Remuneration Committee engages an
external consultant from time to time to provide independent advice in the form of a written report detailing
market levels of compensation for comparable executive roles.
Compensation consists of the following key elements:
- Fixed Compensation
- Variable Compensation
- Short Term Incentive (STI); and
- Long Term Incentive (LTI).
The actual proportion of fixed compensation and variable compensation (potential short term and long term
incentives) is established for Key Management Personnel (excluding the CEO and non-executive Directors) by
the CEO in conjunction with the Remuneration Committee, and in the case of the CEO, by the Chairman of the
Board in conjunction with the Remuneration Committee. Other executive salaries are determined by the CEO
with reference to market conditions.
infomedia.com.au
67
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
26. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)
Fixed Compensation
Objective
The level of fixed compensation is set so as to provide a base level of compensation which is both appropriate
to the position and competitive in the market. Fixed compensation is reviewed periodically by the CEO
in conjunction with the Remuneration Committee for Key Management Personnel (excluding the CEO and
non-executive Directors), and in the case of the CEO, by the Chairman of the Board in conjunction with the
Remuneration Committee. All other executive positions are reviewed periodically by the CEO. As noted above,
the Committee has access to external advice independent of management.
Structure
Executives are given the opportunity to receive their fixed (primary) compensation in a variety of forms, including
cash or other designated employee expenditure such as motor vehicles. It is intended that the manner of
payment chosen will be optimal for the recipient without creating undue cost for the Company.
Variable Compensation – Short Term Incentive (STI)
Objective
The objective of short term compensation is to link the achievement of both individual performance and
Company performance with the compensation received by the executive.
Structure
The structure of short term compensation is a cash bonus dependent upon a combination of individual
performance objectives and Company objectives being met. This reflects the Company wide practice of
‘Performance Planning & Review’ (PPR) procedures. Individual performance objectives centre around key
focus areas. Company objectives include achieving budgetary targets that are set at the commencement of the
financial year (adjusted where necessary for currency fluctuations).
These performance conditions were chosen, in the case of individual performance objectives, to promote
and maintain the individual’s focus on their own contribution to the Company’s strategic objectives through
individual achievement in key result areas (KRAs) which include, for example, ‘leadership’, ‘decision making’,
‘results’ and ‘risk management’. In the case of Company objectives, budgetary performance conditions were
chosen to promote and maintain a collaborative, Company wide focus on the achievement of those targets.
In assessing whether an individual performance condition has been satisfied, pre-agreed key performance
indicators (KPIs) are used. In assessing whether Company objectives have been satisfied, Board level pre-
determined budgetary targets are used. These methods have been chosen to create clear and measurable
performance targets.
Variable Compensation – Long Term Incentive (LTI)
Objective
The objective of the LTI plan is to reward executives in a manner which aligns this element of compensation
with the creation of shareholder wealth. As such, LTI grants are made to executives who are able to influence
the generation of shareholder wealth and thus have a direct impact on the Company’s performance against the
relevant long term performance hurdle.
Structure
The structure of long term compensation is in the form of share options pursuant to the employee option
and employee share plans. Performance hurdles have been introduced for all share options issued after
31 December 2004 and are determined upon grant of those share options. These hurdles typically relate to the
Company’s share price reaching or exceeding a particular level. These methods were chosen to create clear
infomedia.com.au
68
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
26. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)
(ii) COMPENSATION OF KEY MANAGEMENT PERSONNEL FOR THE YEAR ENDED 30 JUNE 2006 AND
30 JUNE 2005
Short term
Post
employment
Share based payments
Long term
Total
Total
performance
related
Salary
and fees
Bonus
Non
monetary
benefi ts
Superannuation
Options
Employee
share plan
Other
$
%
2006 Financial Year:
DIRECTORS:
N
o
t
e
s
t
o
t
h
e
Richard Graham
118,019
-
Gary Martin
280,000
63,000
Myer Herszberg
Geoffrey Henderson
Frances Hernon
Andrew Moffat
EXECUTIVES:
42,000
42,000
42,000
42,000
Andrew Pattinson
305,523
-
-
-
-
-
Peter Adams
Nick Georges
190,742
38,000
170,290
12,500
Michael Roach
153,558
14,000
-
-
-
-
-
-
14,537
-
-
-
Mark Kujacznski
170,186
-
9,589
10,350
24,445
3,780
3,780
3,780
3,780
27,497
17,167
15,326
13,820
-
-
51,232
-
-
-
-
-
17,742
13,050
6,286
-
-
-
-
-
-
-
1,000
1,000
1,000
1,000
-
-
3,267
-
-
-
-
5,092
2,225
1,987
2,559
-
128,369
421,944
45,780
45,780
45,780
45,780
353,649
266,876
214,153
191,223
179,775
1,556,318
127,500
24,126
123,725
88,310
4,000
15,130
1,939,109
2005 Financial Year1:
DIRECTORS:
Richard Graham2
257,751
100,000
37,982
Andrew Pattinson
331,069
-
Gary Martin
247,436
35,200
Myer Herszberg
Geoffrey Henderson
Frances Hernon
Barry Ford
Andrew Moffat
EXECUTIVES:
Peter Adams
Nick Georges
42,000
42,000
42,000
31,338
10,823
-
-
-
-
-
192,548
32,800
155,543
10,000
Michael Roach
135,742
10,000
-
-
-
-
-
-
-
-
-
-
13,815
29,796
24,445
3,780
3,780
3,780
2,997
974
19,255
13,910
11,705
1,488,250
188,000
37,982
128,237
100,980
-
30,997
30,997
-
1,000
1,000
-
-
-
-
-
4,793
30,997
3,196
-
-
-
-
-
2,000
2,000
2,000
8,000
3,200
5,518
2,887
-
-
-
-
-
2,246
1,815
2,262
412,748
398,380
341,965
45,780
45,780
45,780
34,335
11,797
253,642
214,265
164,905
17,928
1,969,377
-
27%
-
-
-
-
-
21%
12%
11%
-
24%
8%
19%
-
-
-
-
-
15%
19%
8%
1. Group totals for 2005 are not the same as disclosed in the 2005 report as different individuals and different
components were disclosed in the 2005 fi nancial report.
2. Salary and fees for Richard Graham includes $120,118 of leave entitlements paid upon resignation as Chief
Executive Offi cer effective 31 December 2004.
infomedia.com.au
69
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
26. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)
(iii) COMPENSATION BY CATEGORY: KEY MANAGEMENT PERSONNEL
Short term
Post employment
Other Long term
Termination benefi ts
CONSOLIDATED
INFOMEDIA LTD
2006
$
2005
$
2006
$
2005
$
1,707,944
1,714,232
1,040,551
1,237,421
123,725
15,130
-
128,237
17,928
-
82,408
7,479
-
84,024
86,736
10,148
-
71,787
Share based Payments
92,310
108,980
1,939,109
1,969,377
1,214,462
1,406,092
(iv) Contract for services
The table and notes below summarise current executive employment contracts with the Company as at the
date of this report:
Commencement
date per latest
contract
Gary Martin
1 January 2005
Andrew Pattinson
5 April 2004
Nick Georges
1 January 2005
Peter Adams
1 January 2005
Michael Roach
1 January 2005
Mark Kujacznski
22 August 2005
Duration
3 years
3 years
3 years
3 years
3 years
3 years
Notice period
– Company
Notice period
- Executive
6 months*
3 months
6 months*
6 months*
3 months
3 months
6 months
3 months
6 months
6 months
3 months
3 months
The Company may terminate each of the contracts at any time without notice if serious misconduct has
occurred. Options that have not yet vested upon termination will be forfeited.
* In the event of redundancy, in addition to six months notice, the Company will provide the individual with a
severance payment equivalent to three weeks’ base salary for each completed year of continuous service with
the Company provided, however, that the minimum severance payment will be 26 weeks’ base salary and the
maximum severance payment will not exceed 52 weeks’ base salary.
infomedia.com.au
70
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
26. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)
(c) Compensation options: Granted and vested during the year (consolidated)
During the fi nancial year options were granted as equity compensation benefi ts under the long term incentive
plan to certain Key Management Personnel as disclosed above. No share options have been granted to the
non-executive members of the Board of Directors under this scheme. The options were issued free of charge.
Each option entitles the holder to subscribe for one fully paid ordinary share in the entity at an exercise price
equal to the strike price of the shares on the date of grant. The options vest at various hurdle rates dependent
upon the share price of the Company. If this increase is not met by the last available exercise date, the options
are forfeited. The contractual life of each option granted is approximately three years.
Vested
Granted
Terms and conditions for each grant
30 June 2006
Number
Number
Grant date
Directors
Fair value
per option at
grant date
(cents)
Exercise
price per
option
(cents)
Expiry date
First Exercise date
Last Exercise date
Gary Martin
333,333
1,000,000
27 Oct 2005
8.4
50.0
5 Feb 2008
5 Jan 2006
5 Feb 2008
Executives
Peter Adams
83,333
250,000
8 Jul 2005
Nick Georges
83,333
250,000
6 Oct 2005
Michael Roach
-
200,000
16 Dec 2005
10.3
8.1
8.9
50.0
48.0
49.0
5 Feb 2008
5 Feb 2008
5 Jan 2006
5 Jan 2006
5 Feb 2008
5 Feb 2008
16 Jan 2009
16 Dec 2005
16 Jan 2009
499,999
1,700,000
There were no options granted in the 2005 Financial Year.
(d) Shares issued on exercise of compensation options (consolidated)
No options were exercised during the year by Key Management Personnel.
(e) Option holdings of Key Management Personnel (consolidated)
Balance at
beginning of
period
Granted as
compensation
Options
exercised
Net change
other
Balance at
end of period
30 June 2006
1 July 2005
30 June 2006
Total
Vested at 30 June 2006
Not
exercisable
Exercisable
Directors
Gary Martin
Executives
Peter Adams
Nick Georges
Michael Roach
-
-
-
-
-
1,000,000
250,000
250,000
200,000
1,700,000
-
-
-
-
-
-
-
-
-
-
1,000,000
1,000,000
666,667
333,333
250,000
250,000
200,000
250,000
250,000
200,000
166,667
166,667
200,000
83,333
83,333
-
1,700,000
1,700,000
1,200,001
499,999
infomedia.com.au
71
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
26. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)
Balance at
beginning of
period
Granted as
compensation
Options
exercised
Net change
other
Balance at
end of period
30 June 2005
1 July 2004
30 June 2005
Total
Vested at 30 June 2005
Not
exercisable
Exercisable
Directors
Gary Martin
Andrew Pattinson
Executives
Nick Georges
Peter Adams
Michael Roach
582,000
582,000
582,000
90,000
60,000
1,896,000
(f) Shareholdings of Key Management Personnel
-
-
-
-
-
-
-
-
-
-
-
-
(582,000)
(582,000)
(582,000)
(90,000)
(60,000)
(1,896,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
30 June 2006
Number of shares held in Infomedia Ltd
1 July 2005
compensation
options
Net change other
30 June 2006
Balance
Granted as
On exercise of
Balance
Directors
Richard Graham
Myer Herszberg
Gary Martin
Frances Hernon
Executives
Andrew Pattinson
Nick Georges
Michael Roach
Peter Adams
Total
102,204,060
39,421,599
74,257
5,000
2,545,571
22,425
16,725
9,425
144,299,062
-
-
-
-
1,996
1,996
1,996
1,996
7,984
-
-
-
-
-
-
-
-
-
-
-
-
-
102,204,060
39,421,599
74,257
5,000
(100,000)
2,447,567
-
-
-
24,421
18,721
11,421
(100,000)
144,207,046
infomedia.com.au
72
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
26. DIRECTOR AND EXECUTIVE DISCLOSURES (CONTINUED)
30 June 2005
Number of shares held in Infomedia Ltd
1 July 2004
compensation
options
Net change other
30 June 2005
Balance
Granted as
On exercise of
Balance
Directors
Richard Graham
Myer Herszberg
Gary Martin
Frances Hernon
Executives
Andrew Pattinson
Nick Georges
Michael Roach
Peter Adams
Total
102,204,060
39,421,599
707,918
5,000
4,407,716
16,776
9,276
6,776
-
-
1,339
-
1,310
2,649
2,649
2,649
146,779,121
10,596
-
-
-
-
-
-
-
-
-
-
-
(635,000)
-
102,204,060
39,421,599
74,257
5,000
(1,863,455)
2,545,571
3,000
4,800
-
22,425
16,725
9,425
(2,490,655)
144,299,062
All equity transactions with Key Management Personnel other than those arising from the exercise of
compensation options and compensation shares have been entered into under terms and conditions no more
favourable than those the entity would have adopted if dealing at arm’s length.
(g) Loans to Key Management Personnel
There were no loans at the beginning or the end of the reporting period to Key Management Personnel. No
loans were made available during the reporting period to Key Management Personnel.
(h) Other transactions and balances with Key Management Personnel (including related entities)
(i) Infomedia Ltd previously rented offi ce space from Wiser Equity Pty Limited (formerly Wiser Laboratory Pty
Limited), a company in which Richard Graham is a Director. A lease termination payment of $170,000 was made
on 9 August 2005 to Wiser Equity Pty Limited to relinquish the Company from its future lease commitments as
the space was no longer used.
(ii) Infomedia Ltd rents offi ce space from Richard Graham. The total rent payments for the year ended 30 June
2006 of $176,898 (2005: $168,144) were on commercial terms.
(iii) Infomedia Ltd received fi nancial consulting services from Cowoso Capital Pty Limited, a company in which
Andrew Moffat is a Director. The total consulting services paid for the year ended 30 June 2006 of $12,500 (2005:
$15,250) were on commercial terms.
infomedia.com.au
73
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30 June 2006
Notes
CONSOLIDATED
INFOMEDIA LTD
2006
$
2005
$
2006
$
2005
$
27. AUDITOR’S REMUNERATION
Amounts received or due and receivable by the auditors of
Infomedia Ltd for:
– an audit or review of the fi nancial report of the entity and
any other entity in the consolidated entity
183,350
170,075
158,350
152,675
– other services in relation to the entity and any other entity
in the consolidated entity
-
183,350
20,280
190,355
-
158,350
20,280
172,955
28. RELATED PARTY DISCLOSURES
Ultimate Parent
Infomedia Ltd is the ultimate Australian parent company
Wholly-owned group transactions
(a) An unsecured, interest bearing loan of $Nil (2005: $17,137,486) remains owing from Infomedia Investments
Pty Limited to Infomedia Ltd. Interest is charged at commercial rates.
(b) An unsecured, interest free loan of $2,793,213 (2005: $Nil) remains owing to Infomedia Investments Pty
Limited from Infomedia Ltd.
(c) An unsecured, interest free loan of $2,126,248 (2005: $2,217,581) 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 $987,913 (2005: $1,231,967) remains owing from AutoConsulting Pty
Limited to Infomedia Ltd. The loan is repayable in seven days upon demand.
(e) An unsecured, interest free loan of $1,013,333 (2005: $1,456,912) remains owing to IFM Europe Ltd from
Infomedia Ltd.
(f) An unsecured, interest free loan of $1,143,345 (2005: $Nil) remains owing from IFM North America Inc. to
Infomedia Ltd.
(g) During the year a management fee of $480,000 (2005: $917,484) was paid to Datateck Publishing Pty
Limited by Infomedia Ltd.
(h) During the year Infomedia Ltd received $7,004,846 from IFM Europe Ltd for intra-group sales.
(i) During the year Datateck Publishing Pty Limited received $279,441 from IFM Europe Ltd for intra-group sales.
(j) During the year IFM Europe Ltd received $1,571,822 from Infomedia Ltd for intra-group distribution services.
(k) During the year Infomedia Ltd received $8,827,526 from IFM North America Inc. for intra-group sales.
(l) During the year IFM North America Inc. received $813,558 from Infomedia Ltd for intra-group distribution
services.
Entity with deemed signifi cant infl uence over the Company
Wiser Equity Pty Limited, a company in which Richard Graham is a Director, owns 30.8% of the ordinary shares
in Infomedia Ltd (2005: 30.8%).
infomedia.com.au
74
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
29. SEGMENT INFORMATION
PRIMARY SEGMENT
30 June 2006
Business segments
Notes
Catalogue and Publishing
Business Systems
$’000
51,635
646
52,281
$’000
3,942
-
3,942
24,634
109
REVENUE
Sales revenue
Rental income
Total segment revenue
Unallocated revenue:
Finance revenue
Total consolidated revenue
Segment result
Unallocated items:
Finance revenue
Finance costs
Consolidated profi t before income tax
Income tax expense
4
Consolidated profi t after income tax
S
t
a
t
e
m
e
n
t
s
Total
$’000
55,577
646
56,223
268
56,491
24,743
268
(197)
24,814
(6,668)
18,146
ASSETS
Segment assets
Unallocated assets:
Cash
Total assets
LIABILITIES
Segment liabilities
Other segment information:
Capital expenditure
Depreciation
Amortisation
Decrement in value of non-current assets
28,889
2,754
31,643
26,021
57,664
14,754
1,099
15,853
1,522
2,149
762
-
3(iv)
3(iv)
3(v)
103
294
150
-
1,625
2,443
912
-
infomedia.com.au
75
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
29. SEGMENT INFORMATION (CONTINUED)
30 June 2005
Business segments
Notes
Catalogue and Publishing
Business Systems
$’000
55,086
618
55,704
$’000
4,051
-
4,051
14,013
(4,467)
REVENUE
Sales revenue
Rental income
Total segment revenue
Unallocated revenue:
Finance revenue
Total consolidated revenue
RESULTS
Segment result
Unallocated items:
Finance revenue
Finance costs
Consolidated profi t before income tax
Income tax expense
4
Consolidated profi t after income tax
Total
$’000
59,137
618
59,755
272
60,027
9,546
272
(97)
9,721
(3,374)
6,347
ASSETS
Segment assets
Unallocated assets:
Cash
Total assets
LIABILITIES
Segment liabilities
Other segment information:
Capital expenditure
Depreciation
Amortisation
Decrement in value of non-current assets
infomedia.com.au
76
42,209
2,947
45,156
10,821
55,977
8,153
1,355
9,508
1,703
1,842
2,095
10,405
3(iv)
3(iv)
3(v)
98
396
336
2,377
1,801
2,238
2,431
12,782
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
29. SEGMENT INFORMATION (CONTINUED)
SECONDARY SEGMENT
30 June 2006
Geographical segments
Notes
Australia
Europe
North America
Eliminations
$’000
$’000
$’000
$’000
Total
$’000
Segment revenue
(a)
51,642
10,765
13,061
(18,977)
56,491
Segment assets
54,844
1,027
1,793
Capital expenditure
1,395
19
211
30 June 2005
-
-
Geographical segments
Notes
Australia
Europe
North America
Eliminations
$’000
$’000
$’000
$’000
57,664
1,625
Total
$’000
Segment revenue
(a)
58,071
13,113
Segment assets
53,589
2,388
Capital expenditure
1,762
39
-
-
-
(11,157)
60,027
-
-
55,977
1,801
(a) While the products of the Company are used globally, the Company has three distinguishable geographical
segments, Australia, Europe and North America. The geographic segmental revenue is classifi ed according to
the originating billing source as opposed to customer destination.
Segment products and locations
The Company’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 Partfi nder Electronic Parts Catalogues and the Superservice Menus
service quoting system. These systems are specialised business tools designed to make the selection and sale
of replacement parts fast, easy and accurate.
All products are sourced from Australia.
Segment accounting policies
The Company 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 Company’s accounting policies described in Note 2. During
the fi nancial year, there were no changes in segment accounting policies that had a material effect on the
segment information.
infomedia.com.au
77
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s principal financial instruments, other than derivatives, comprise bank loans, cash and short
term deposits.
The main purpose of these financial instruments is to raise finance for the Company’s operations. The Company
has various other financial assets and liabilities such as trade receivables and trade payables, which arise
directly from its operations. The Company also enters into derivative transactions through forward currency
contracts. The purpose is to manage the currency risks arising from the Company’s operations. It is, and has
been throughout the period under review, the Company’s policy that no trading in financial instruments shall
be undertaken. The main risks arising from the Company’s financial instruments are cash flow interest rate
risk, liquidity risk, foreign currency risk and credit risk.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class of
financial asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements.
Cash flow interest rate risk
The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s cash
holdings with a floating interest rate.
The Company’s policy is to accept the floating interest rate risk with both its cash holdings and bank loans.
Cash is held primarily with leading Australian banks for periods not exceeding 30 days. Bank loans are drawn
with varying bill maturities ranging from 30 to 180 days accepting the floating rate of interest.
Foreign currency risk
The Company has transactional currency exposures. These exposures mainly arise from the transactional sale
of products and, to a lesser extent, the associated cost of sales component relating to these products. As the
Company’s product offerings are typically made on a recurring monthly subscription basis, there is a relatively
high degree of reliability in estimating a proportion of future cash flow exposures. Approximately half of the
Company’s sales are denominated in United States Dollars and around one-third of the Company’s sales are
denominated in Euros. The Company seeks to mitigate exposure to movements in these currencies by entering
into forward exchange derivative contracts. Typically the forward exchange coverage will seek to cover between
0% to 100% of underlying exposures over a 12 month horizon. The forward currency contracts must be in the
same currency as the hedged item.
As a result of the Company’s recent investment in both its European and United States subsidiaries, the
Company’s balance sheet can be affected by movements in both the Euro and United States Dollar against
the Australian Dollar. As the net earnings from these operations are repatriated back to Australia on a regular
basis, the Company does not seek to hedge this exposure.
Credit risk
The Company’s credit risk with regard to accounts receivables is spread broadly across three automotive groups
– manufacturers, distributors and dealerships. Receivable balances are monitored on an ongoing basis with the
result that the Company’s exposure to bad debts is not significant. As the products typically have a monthly life
cycle and are priced on a relatively low subscription price, the concentration of credit risk is typically low with
automotive manufacturers being the exception.
With respect to credit risk arising from the other financial assets of the Company, which comprise cash
and cash equivalents, available-for-sale financial assets and certain derivative instruments, the Company’s
exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying
amount of these instruments.
Since the Company trades only with recognised third parties, there is no requirement for collateral.
Liquidity risk
The Company’s exposure to liquidity risk is minimal, given the relative strength of the balance sheet and strong
cash flows from operations.
infomedia.com.au
78
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
31. FINANCIAL INSTRUMENTS
Fair values
Set out below is a comparison by category of carrying amounts and fair values of all of the Company’s fi nancial
instruments recognised in the fi nancial statements. The fair values of derivatives have been calculated by
discounting the expected future cash fl ows at prevailing interest rates.
CONSOLIDATED
Financial assets
Cash and cash equivalents
Trade receivables
Forward currency contracts
Other fi nancial assets
ii(non-current)
Financial liabilities
Carrying amount
Fair value
2006
$’000
26,021
6,227
229
2005
$’000
10,821
5,587
-
2006
$’000
26,021
6,227
229
2005
$’000
10,821
5,587
-
804
1,260
804
1,260
Trade payables
3,974
3,640
3,974
3,640
Interest-bearing loans and
iiborrowings
Off balance sheet
Contingencies
500
-
-
-
500
700
Carrying amount
Fair value
PARENT
Financial assets
Cash and cash equivalents
Trade receivables
Forward currency contracts
Intercompany
Other fi nancial assets
ii(non-current)1
Financial liabilities
2006
$’000
25,089
3,952
229
451
1,052
2005
$’000
8,803
4,155
-
22,043
1,507
2006
$’000
25,089
3,952
229
451
5,901
-
-
2005
$’000
8,803
4,155
-
22,043
1,858
Trade payables
2,988
2,994
2,988
2,994
Interest-bearing loans and
iiborrowings
Off balance sheet
Contingencies
500
-
-
-
500
700
-
-
1. Other fi nancial assets for the parent entity include investment in wholly-owned subsidiaries. The fair value of
the underlying net assets of the subsidiaries is higher than the carrying amount in the parent entity accounts.
Contingencies
The Company and certain controlled entities have potential fi nancial liabilities that may arise from certain
contingencies disclosed in Note 22. As explained in that note, no material losses are anticipated in respect of
any of those contingencies and the fair value disclosed above is the Directors’ estimate of amounts that would
be payable by the Company as consideration of the assumption of those contingencies by another party.
infomedia.com.au
79
e
h
t
o
t
s
e
t
o
N
s
t
n
e
m
e
t
a
t
S
i
l
a
c
n
a
n
F
i
31. FINANCIAL INSTRUMENTS (CONTINUED)
Interest rate risk
The following table sets out the carrying amount, by maturity, of the fi nancial instruments exposed to interest
rate risk.
YEAR ENDED 30 JUNE 2006
CONSOLIDATED
PARENT
Less than one
year
Two to fi ve
years
Greater than
fi ve years
$’000
$’000
$’000
Weighted
average
effective
interest
rate %
Less than
one year
Two to fi ve
years
$’000
$’000
Greater than
fi ve years
$’000
Weighted
average
effective
interest
rate %
Floating rate
Cash and cash equivalents
26,021
Interest-bearing liabilities
(500)
-
-
-
-
5.7%
6.3%
25,089
(500)
-
-
-
-
5.7%
6.3%
YEAR ENDED 30 JUNE 2005
CONSOLIDATED
PARENT
Less than one
year
Two to fi ve
years
Greater than
fi ve years
$’000
$’000
$’000
Weighted
average
effective
interest
rate %
Less than
one year
Two to fi ve
years
$’000
$’000
Greater than
fi ve years
$’000
Weighted
average
effective
interest
rate %
Floating rate
Cash and cash equivalents
10,821
Interest-bearing liabilities
-
-
-
-
-
5.0%
-
8,803
-
-
-
-
-
5.0%
-
Interest on fi nancial instruments classifi ed as fl oating rate is repriced at intervals of less than one year. Interest
on fi nancial instruments classifi ed as fi xed rate is fi xed until maturity of the instrument. The other fi nancial
instruments of the Group and Parent that are not included in the above tables are non-interest bearing and are
therefore not subject to interest rate risk.
infomedia.com.au
80
N
o
t
e
s
t
o
t
h
e
i
F
n
a
n
c
a
l
i
S
t
a
t
e
m
e
n
t
s
31. FINANCIAL INSTRUMENTS (CONTINUED)
Derivative contracts
The following table summarises the forward exchange contracts outstanding at 30 June 2006.
Maturity
Company
buys
Company
sells
Exchange
rate
Company
buys
Company
sells
Exchange
rate
Company sells United States Dollars (USD)
$A’000
USD’000
$A’000
USD’000
CONSOLIDATED
PARENT
Quarter 1 2007 fi nancial year
Quarter 2 2007 fi nancial year
Quarter 3 2007 fi nancial year
Quarter 4 2007 fi nancial year
Company sells Euros (E)
Quarter 1 2007 fi nancial year
Quarter 2 2007 fi nancial year
Quarter 3 2007 fi nancial year
Quarter 4 2007 fi nancial year
1,392
2,087
-
-
$A’000
3,077
3,248
3,248
3,248
1,000
1,500
-
-
E ’000
1,775
1,875
1,875
1,875
0.7186
0.7186
-
-
0.5768
0.5773
0.5773
0.5773
1,392
2,087
-
-
$A’000
3,077
3,248
3,248
3,248
1,000
1,500
-
-
E ’000
1,775
1,875
1,875
1,875
0.7186
0.7186
-
-
0.5768
0.5773
0.5773
0.5773
The mark to market valuation of these outstanding contracts is $229,000.
32. SUBSEQUENT EVENTS
There has been no matter or circumstance that has arisen since the end of the fi nancial year that has signifi cantly
affected the operations of the Company, the results of those operations, or the state of affairs of the Company.
infomedia.com.au
81
’
s
r
o
t
c
e
r
i
D
n
o
i
t
a
r
a
l
c
e
D
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 2006 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.
(2) This declaration has been made after receiving the declarations required to be made to the
Directors in accordance with section 295A of the Corporations Act 2001 for the financial
period ended 30 June 2006.
On behalf of the Board
Richard David Graham
Chairman
Sydney, 23 August 2006
infomedia.com.au
82
Independent audit report to members of Infomedia Ltd
Scope
The financial report and Directors’ responsibility
The financial report comprises the balance sheet, income statement, statement of changes in equity, statement of cash flows, accompanying notes to the financial
statements, and the Directors’ declaration for Infomedia Ltd (the company) and the consolidated entity, for the year ended 30 June 2006. 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 financial report that gives a true and fair view of the financial 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 financial report.
Audit approach
We conducted an independent audit of the financial 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 financial report is free of material misstatement. The nature of an audit
is influenced 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 financial report presents fairly, in accordance with the Corporations Act 2001, including compliance
with Accounting Standards in Australia, and other mandatory financial reporting requirements in Australia, a view which is consistent with our understanding of the
company’s and the consolidated entity’s financial position, and of their performance as represented by the results of their operations and cash flows.
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 financial report, and
• assessing the appropriateness of the accounting policies and disclosures used and the reasonableness of significant accounting estimates made by the Directors.
While we considered the effectiveness of management’s internal controls over financial 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 reflected in the financial 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 the consolidated entity, and have met the independence requirements of Australian professional ethical pronouncements
and the Corporations Act 2001. We have given to the Directors of the company a written Auditor’s Independence Declaration, a copy of which is included after the
Directors’ Report.
Audit opinion
In our opinion, the financial report of Infomedia Ltd is in accordance with:
(a) the Corporations Act 2001, including:
(i) giving a true and fair view of the financial position of Infomedia Ltd and the consolidated entity at 30 June 2006 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 financial reporting requirements in Australia.
Ernst & Young
J K Haydon
Partner
Sydney, 23 August 2006
Liability limited by a scheme approved
under Professional Standards Legislation
infomedia.com.au
83
e
t
a
r
o
p
r
o
C
e
c
n
a
n
r
e
v
o
G
“Infomedia Ltd remains committed to corporate
governance practices that are compatible with
the Company’s age and size, that enhance
effectiveness and which ensure an appropriate
degree of accountability and transparency to
shareholders and other stakeholders.”
Corporate Governance Committee (Chair)
Geoffrey Henderson –
Corporate Governance Statement
How to Read this Corporate Governance Statement
This Corporate Governance Statement is divided into the following sections:
an introduction, providing an overview of Infomedia’s approach to corporate governance;
a discussion of major corporate governance initiatives during the reporting period;
a discussion of the areas where Infomedia Ltd reports under the ‘if not, why not?’ obligation;
and
a subject based commentary on Infomedia Ltd’s approach to the ASX Corporate Governance
Council Guidelines.
Introduction
This Corporate Governance Statement, which is current as at the date of the Directors’ Report,
addresses the approach adopted by the Company to the ASX Corporate Governance Council’s
Principles of Good Corporate Governance and Best Practice Recommendations1 and has been
updated to reflect the actions taken by the Company since its last annual report.
By way of background, the Board first began its consideration of the ASX Corporate Governance
Council Guidelines during the course of the 2003 financial year. To aid the review process,
the Board made adjustments to the structure of its Committees so that they comprise the
Corporate Governance Committee, the Audit & Risk Committee and the Remuneration &
Nomination Committee. Each Committee continues to be 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 FY2006 for members of each of the
Corporate Governance, Audit & Risk and Remuneration & Nomination Committees are set out
in the Directors’ Report.
The Board and its committees endorse the ‘if not, why not?’ framework adopted by the ASX
Corporate Governance Council (CGC) and in FY2006 the Company continued applying the
relevant ASX CGC Recommendations to Infomedia’s particular circumstances. In their approach
to the ASX CGC Recommendations, the Board and relevant committees continue to develop the
Company’s corporate governance practices in ways which are both pragmatic and appropriate to
its age and size. In allocating resources and prioritising tasks, the high level, top down approach
also continues. Consequently, the various procedures and policies considered appropriate by
Infomedia continue at differing stages of development and organisational implementation, as
permitted by its resources.
The material set out in this Corporate Governance Statement has been prepared in accordance
with the ASX Listing Rules and, in particular, the various ‘Guide(s) to reporting...’ included in
the ASX CGC Recommendations. Unless otherwise indicated, the ASX CGC Recommendations
infomedia.com.au
84
G
o
v
e
r
n
a
n
c
e
C
o
r
p
o
r
a
t
e
were in place for the whole financial year. In addition, as a result of suggestions for enhanced
reporting made in recent corporate governance literature2, some slight format and other
changes, such as the introduction of additional content designed to assist the reader in locating
the information contained within it, have been introduced.
Major Corporate Governance Initiatives
During the reporting year, the Board continued, through the appropriate committee, to monitor
the charters, policies and procedures adopted by the Company in support of the ASX CGC
Principles and remains satisfied that the Company’s corporate governance practices are
consistent with the spirit and intent of the ASX Corporate Governance Council Guidelines. The
Company continues, as it has since 2004, to engage a part time external consultant whose
primary role is to facilitate the Company’s corporate governance initiatives.
In FY2006 the Corporate Governance Committee entrenched the rolling review process it had
introduced in FY2005, under which the Company’s various corporate governance documents,
and in particular the various policies, are reviewed and refined. Briefly, the process involves:
selecting a corporate governance document and taking a ‘snapshot’ of its effectiveness
by examining, through sounding a randomly selected representative sample of employees,
how well the existence, purpose and operating framework of that corporate governance
document is understood;
reporting the outcome of the sounding process to the Corporate Governance Committee,
along with any recommendations; and
Senior Management implementing those recommendations adopted (for example,
publishing summary documents,
increasing employee awareness through further
education sessions, improving access to corporate governance documents by establishing
a governance page on the Company’s intranet and including certain governance documents
in employee induction packages).
A number of policies were reviewed in accordance with this process, including the Share Trading
Policy, the Code of Conduct and the Market Disclosure Policy, and where appropriate, were also
refined. As a separate exercise, the Audit & Risk Committee Charter was amended to reflect the
policy and procedure adopted by the Board for the selection and appointment of the Company’s
external auditor and for the rotation of external audit engagement partners.
In yet another exercise, representatives from both the Audit & Risk Committee and the
Corporate Governance Committee worked together with Senior Management to develop a
question and answer assessment document that examined the effectiveness of Infomedia’s risk
management initiatives. Once completed, the question and answer assessment bridged the
gap between the FY2006 Risk Management Plan and the FY2007 Risk Management Plan. The
question and answer assessment and the FY2007 Risk Management Plan, along with the annual
risk management review cycle, were considered and, as appropriate, approved by both the Audit
& Risk Committee and the Board in June and July 2006 (respectively).
infomedia.com.au
85
e
t
a
r
o
p
r
o
C
e
c
n
a
n
r
e
v
o
G
In May 2006, Infomedia voluntarily took part in the UTS – Centre for Corporate Governance
Research Project on The changing roles and responsibilities of company boards and directors.
This involved the General Counsel/Company Secretary participating in a one on one interview
during which Infomedia’s response was canvassed to some 42 questions drawn largely from
the 10 principles and 28 recommendations which comprise the ASX Corporate Governance
Council Guidelines. This involvement allowed the Company to demonstrate its willingness to be
a part of the wider corporate governance community and provided an invaluable opportunity to
undertake a self-assessment of the corporate governance work it had done to date. In addition,
as the UTS – Centre for Corporate Governance Research Project moved toward finalising its
June 2006 Interim Report3, the Corporate Governance Committee sought out Infomedia specific
feedback from the UTS Centre for Corporate Governance regarding the perceived effectiveness
of its corporate governance initiatives.
Also in May 2006 the Remuneration & Nomination Committee, with some assistance from
external consultants, turned its attention to establishing the framework for the first formal
‘whole of Board’ review. The self-assessment, which utilises individual survey responses, is
being conducted with the purpose of:
obtaining a consensus view on how effectively the Board is operating by assessing its
performance around a range of key issues;
identifying opportunities for enhancing the Board’s performance;
generating recommendations/actions for
improving the Board’s effectiveness by
reference to ‘best practice’; and
introducing a process which can be expanded upon in subsequent reporting years (by, for
example, providing data to benchmark against and by establishing a methodology which
can later be applied to the Board’s committees and its individual Directors).
In July 2006, each Director was asked to complete a self-assessment survey and in August
2006 the individual Directors’ assessments of effectiveness of various Board matters were
benchmarked against the importance of the issue, creating a gap analysis report. It is intended
that this report be presented to the Board at a subsequent meeting in 2006.
The summaries of the Company’s various charters, policies and procedures included on Infomedia’s
website have been updated as required by the Board and committees’ ongoing review process.
Management information sessions with specific presentations on risk management and
corporate governance were also conducted during the financial year.
‘If Not, Why Not?’
ASX CGC Recommendation 2.1 – A majority of the board should be independent directors
ASX CGC Recommendation 2.2 – The chairperson should be an independent director
ASX CGC Recommendation 2.3 – The roles of chairperson and chief executive should not be
exercised by the same individual
infomedia.com.au
86
G
o
v
e
r
n
a
n
c
e
C
o
r
p
o
r
a
t
e
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 then comprised four Non-executive Directors and two
Executive Directors until 31 December 2004. The ratio of Executive to Non-executive Directors then
altered when Richard Graham, who continues as Non-executive Chairman, retired as Chief Executive
Officer. Since then the Board has comprised five Non-executive Directors and one Executive Director.
As a result of the changes noted above, the role of Chairman and Chief Executive Officer has, as
contemplated by ASX CGC Recommendation 2.3, been split since 31 December 2004. However,
having recently retired as an executive, Richard Graham is not considered by the Board
as an independent Chairman. Accordingly, the Company does not comply with ASX CGC
Recommendation 2.2 that the chairperson be an independent director. Nevertheless, the Board
remains of the view that its independence as a whole is not compromised and that it is in
the best interests of the Company for Richard Graham to continue as Chairman. The Board
believes that during this 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. As suggested in the commentary accompanying
ASX CGC Recommendation 2.2, under the Board Charter, Board members may elect a lead
Non-executive Director to chair informal discussion meetings of Non-executive Directors. To
date, the Non-executive Directors have not had occasion to follow this course.
Gary Martin, in his role as Executive Director, is also not considered by the Board as independent.
However, three of the Company’s Directors, Frances Hernon, Geoffrey Henderson and Andrew
Moffat, meet an objective assessment of quantitative and qualitative criteria for independence. A
fourth Non-executive Director, Myer Herszberg, whilst being a major shareholder, is considered
by the Board, having regard to the quantitative, qualitative and cumulative criteria, to operate
independently and objectively.
The Board is firmly of the view that good, or sound, leadership and judgement and ethical practice
are driven by the culture of an organisation, not process. Infomedia has long had a strong and
well developed informal culture of corporate governance and compliance. Originally grounded in
proprietary company roots, this culture has now become more formalised as is appropriate for a
public company.
The Board’s approach finds support in this view in other corporate governance commentary,
including in the observations the Royal Commissioner, Mr Justice Owen, who in his official
report into the collapse of HIH stated that the critical issue is not so much whether, on objective
criteria, the director is independent but rather whether he or she is subjectively capable of
exercising independent judgement. Mr Justice Owen also said that “...I am not convinced that
a mandatory requirement for boards to have a majority of non-executive directors is either
necessary or desirable. In most cases it will be desirable (assuming the non-executive directors
are truly independent) but flexibility ought to be maintained to enable corporations to be
structured in a way that best suits their circumstances”.
infomedia.com.au
87
e
t
a
r
o
p
r
o
C
e
c
n
a
n
r
e
v
o
G
“An emphasis has been placed on promoting, among
other attributes, an appropriate mix of relevant skills,
independence, expertise, business knowledge and
executive and non-executive participation.”
Remuneration & Nomination Committee (Chair)
Frances Hernon –
Accordingly, the Board believes it comprises a majority of independent Directors and so complies
with ASX CGC Recommendation 2.1.
This independence will continue to 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.
Commentary
The Board and Senior Management – Structure and Remuneration
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.
Since listing on the ASX 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 been, 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.
infomedia.com.au
88
G
o
v
e
r
n
a
n
c
e
C
o
r
p
o
r
a
t
e
ASX CGC Recommendation 1.1 – Formalise and disclose the functions reserved to the board and
those delegated to management
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 the 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.
ASX CGC Recommendation 2.1 – A majority of the board should be independent directors
ASX CGC Recommendation 2.2 – The chairperson should be an independent director and
ASX CGC Recommendation 2.3 – The roles of chairperson and chief executive should not be
exercised by the same individual
Commentary on these three ASX CGC Recommendations is found under the heading “If Not,
Why Not?” above.
ASX CGC Recommendation 2.4 – The board should establish a nomination committee and
ASX CGC Recommendation 9.2 – The board should establish a remuneration committee
The members of the Remuneration & Nomination Committee are Frances Hernon (Chair), Myer
Herszberg and Andrew Moffat. 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.
The Remuneration & Nomination Committee and the Board, as appropriate, consider all Board
nominees, having regard to both the nominee’s individual merits and overall Board composition.
In each case the recommendations of the Remuneration & Nomination Committee are then
endorsed by the Board and then by shareholders upon the recommendation of the Board.
The Remuneration & Nomination Committee formalised a policy for the nomination and
induction of Directors, which was adopted by the Board in early July 2005. A summary of the
Director Nomination & Induction Policy was made available on the Infomedia website thereafter.
In preparing the Director Nomination & Induction Policy, regard was had to the ASX CGC
Commentary accompanying ASX CGC Recommendation 8.1 and, in particular, the suggestions
for an induction program. Both Gary Martin and Andrew Moffat were inducted as Directors of
Infomedia under the guidance of the Remuneration & Nomination Committee and in accordance
with the Director Nomination & Induction Policy.
infomedia.com.au
89
e
t
a
r
o
p
r
o
C
e
c
n
a
n
r
e
v
o
G
ASX CGC Recommendation 8.1 – Disclose the process for performance evaluation of the board,
its committees and individual directors and key executives and
ASX CGC Recommendation 9.1 – Provide disclosure in relation to the company’s remuneration
policies to enable investors to understand (i) the costs and benefits of those policies and (ii) the
link between remuneration paid to directors and key executives and corporate performance
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. 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 as discussed
more fully in the Remuneration Report included within the Directors’ Report. In preparing the
remuneration information contained in the Remuneration Report, regard was had to the ASX CGC
Commentary accompanying ASX CGC Recommendation 9.1 and, in particular, the suggestions
for disclosure in box 9.1. Commentary on the work undertaken during the reporting period by
the Remuneration & Nomination Committee regarding a ‘whole of board’ self-assessment is
found under the heading “Major Corporate Governance Initiatives” above.
ASX CGC Recommendation 9.3 – Clearly distinguish the structure of non-executive directors’
remuneration from that of executives
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.
In contrast to Executive Directors, Non-executive Directors are remunerated by way of fees
and statutory superannuation contributions only: 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 in FY2004, 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.
ASX CGC Recommendation 9.4 – Ensure that the payment of equity based executive remuneration
is made in accordance with thresholds set in plans approved by shareholders
The Company has two equity based incentive plans: an Employee Option Plan, applicable to
certain eligible employees, including senior executives and Executive Directors and an Employee
Share Plan, applicable to all permanent employees of one or more years of service, including
infomedia.com.au
90
G
o
v
e
r
n
a
n
c
e
C
o
r
p
o
r
a
t
e
senior executives but excluding both Executive and Non-executive Directors. These plans were
established prior to Infomedia’s listing in August 2000 in accordance with both the Corporations
Act and the ASX Listing Rules and were disclosed in the 14 July 2000 prospectus. As a result
of the altered accounting treatment required under the Australian equivalents to International
Financial Reporting Standards, in June 2005 the Board resolved to indefinitely suspend the
Employee Share Plan with effect immediately following the scheduled July 2005 allocation.
Given this background, there is no present intention to obtain shareholder approval of the
Employee Option Plan (or, if re-activated, the Employee Share Plan) as proposed by ASX CGC
Recommendation 9.4 unless otherwise required by the ASX Listing Rules.
Further details of senior executive remuneration under these plans is included in the
Remuneration Report.
Business Conduct
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 – Establish a code of conduct to guide the directors, the chief
executive officer and any other key executives as to:
3.1.1 the practices necessary to maintain the confidence in the company’s integrity
3.1.2 the responsibility and accountability of individuals for reporting and investigating reports
of unethical practices and
ASX CGC Recommendation 10.1 – Establish a code of conduct to guide compliance with legal
and other obligations to legitimate stakeholders
A formal Code of Conduct was adopted in April 2004 following careful and considered deliberation
by both the Corporate Governance 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 guiding dealings with
all non-shareholder stakeholders.
As noted above, under the direction of the Corporate Governance Committee, a number of
policy document reviews occurred during the financial year. As part of the process the Code of
Conduct was refined, primarily to formalise guidelines for the resolution of internal grievances.
The soundings conducted as part of the review process served to promote greater awareness
infomedia.com.au
91
e
t
a
r
o
p
r
o
C
e
c
n
a
n
r
e
v
o
G
“During the last reporting period the Audit &
Risk Committee reviewed the policy closely and
recommended that the Board adopt a revised Risk
Management Policy and a Risk Management Plan
which would better promote the establishment and
implementation of an effective and appropriate risk
management framework for the Company.”
Andrew Moffat – Audit & Risk Committee (Chair)
and use of enhanced procedures for seeking guidance where areas of concern exist, for the
management of grievance issues and for the notification of matters which potentially involve a
compliance or business risk element.
The implications of the Work Choices legislation for Infomedia’s employees were the subject of
an Australia wide joint presentation by the Human Resources Manager and the Chief Executive
Officer in June 2006. The ‘face to face’ approach was designed to alleviate any concerns
employees may have had regarding loss of entitlements or benefits. The presentations were both
well attended and warmly received, particularly in light of the negative publicity surrounding the
introduction of the legislation.
ASX CGC Recommendation 3.2 – Disclose the policy concerning trading in company securities
by directors, officers and employees
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. It was further
reviewed by the Corporate Governance Committee as part of its review calendar and, in turn
by the Board, in the last quarter of FY2006. In July 2005, a revised Policy on Securities Trading
by Company Directors, Officers and Employees was adopted by the Board and a summary was
placed on the Company’s website shortly thereafter.
Financial Reporting and Risk Management
ASX CGC Principle 4 – Safeguard integrity in financial reporting
Have a structure to independently verify and safeguard the integrity of the company’s
financial reporting
ASX CGC Principle 7 – Recognise and manage risk
Establish a sound system of risk oversight and management and internal control
Infomedia fully complied throughout this reporting period with the ASX CGC Recommendations
accompanying ASX CGC Principle 4, relating to audit committee composition, operation
and responsibility.
ASX CGC Recommendation 4.1 – Require the chief executive officer and the chief financial officer
to state in writing to the board that the company’s financial reports present a true and fair view,
in all material respects, of the company’s financial condition and operational results and are in
accordance with relevant accounting standards and
ASX CGC Recommendation 7.2 – The chief executive officer (or equivalent) and the chief financial
officer (or equivalent) should state to the board in writing that:
7.2.1 the statement given in accordance with best practice recommendation 4.1 (the integrity of
financial statements) is founded on a sound system of risk management and internal compliance
and control which implements the policies adopted by the board
infomedia.com.au
92
G
o
v
e
r
n
a
n
c
e
C
o
r
p
o
r
a
t
e
7.2.2 the company’s risk management and internal compliance and control system is operating
efficiently and effectively in all material respects
The Company’s financial reporting obligations for FY2006 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 and the independent Audit Report.
Having acted in accordance with the Board endorsed revised Risk Management Policy and Board
endorsed Risk Management Plan, the Chief Executive Officer and the Chief Financial Officer have
provided to the Board the certifications under ASX CGC Recommendation 7.2 and in turn, the
certifications under ASX CGC Recommendation 4.1. and the Corporations Act.
ASX CGC Recommendation 4.2 – The board should establish an audit committee
ASX CGC Recommendation 4.3 – Structure the audit committee so that it consists of only
non-executive directors;
a majority of independent directors;
an independent chairperson, who is not chairperson of the board; and
at least three members.
ASX CGC Recommendation 4.4 – The audit committee should have a formal charter
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 Andrew Moffat
(Chair), Myer Herszberg and Geoffrey Henderson. Each is a Non-executive Director.
The Board continues to firmly believe 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 Andrew Moffat, Myer Herszberg and Geoffrey Henderson meet an objective
assessment of quantitative and qualitative criteria for independence. As such the Committee
meets the requirements for an independent Chairman and a majority of independent Directors
under ASX CGC Recommendation 4.3.
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 by
both the Audit & Risk Committee and the Board itself. Consistent with the Company’s policy, a
summary of the Charter was placed on the Company’s website during the first half of FY2005.
The Audit & Risk Committee acknowledges the importance of external auditor independence.
The Company’s external auditor’s engagement partner was rotated in FY2002. In response to
both legislative change and to the ASX CGC Commentary, in the last quarter of FY2004 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. As noted above, the
infomedia.com.au
93
e
t
a
r
o
p
r
o
C
e
c
n
a
n
r
e
v
o
G
Committee recommended, and the Board approved, formalised procedures during FY2006, and
made a summary of them available on the Infomedia website shortly thereafter.
ASX CGC Recommendation 7.1 – The board or appropriate committee should establish policies
on risk oversight and management
Upon the recommendation of the Audit & Risk Committee, the Board adopted the Risk
Management Policy in July 2004. During the last reporting period, the Audit & Risk Committee
reviewed it closely and recommended that the Board adopt a revised Risk Management Policy
and a Risk Management Plan which would better promote the establishment and implementation
of an effective and appropriate risk management framework for the Company.
The revised Risk Management Policy allocates oversight responsibility to the Board and the
Audit & Risk Committee whilst the establishment of risk management procedures, compliance
and control rests with the Chief Executive Officer, Chief Financial Officer and Senior Executives
and, at a daily operating level, with departmental managers, line managers and individuals as
part of regular business conduct.
Work undertaken during FY2006 examining the effectiveness of Infomedia’s risk management
initiatives is discussed under the heading “Major Corporate Governance Initiatives” above.
A summary of the Company’s Risk Management Policy is available on the Company’s website,
however, given the strategic nature of its content, the Board does not feel it is appropriate for
details of the Company’s Risk Management Plan to be made publicly available as contemplated
by the guidance accompanying ASX CGC Recommendation 7.3.
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 – Establish written policies and procedures designed to ensure
compliance with ASX Listing Rule disclosure requirements and to ensure accountability at a
senior management level for that compliance
A Market Disclosure Policy was adopted by the Board in April 2004 following careful and
considered deliberation 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.
A review of the Market Disclosure Policy was conducted by the Corporate Governance Committee
as part of its review calendar in the final quarter of FY2006. The review concluded that both the
continuous and periodic reporting obligations imposed under the ASX Listing Rules, and the
Company’s internal procedures in respect of them, were well understood by Senior Management.
Shareholders
ASX CGC Principle 6 – Respect the rights of the shareholders
Respect the rights of shareholders and facilitate the effective exercise of those rights
infomedia.com.au
94
G
o
v
e
r
n
a
n
c
e
C
o
r
p
o
r
a
t
e
ASX CGC Recommendation 6.1 – Design and disclose a communications strategy to promote
effective communication with shareholders and encourage effective participation at general
meetings and
ASX CGC Recommendation 6.2 – Request the external auditor to attend the annual general
meeting and be available to answer shareholder questions about the audit
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, summaries
of the various corporate governance charters, policies and guidelines, annual, half yearly and
quarterly reports, a synopsis of the Infomedia business model, media releases, achievements,
share price information and the July 2000 prospectus, along with the FY2006 Notice of Annual
General Meeting and Explanatory Statement are all available.
Infomedia continues to monitor 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 permitted
by the regulatory environment or which its share registry, or any other provider, introduces in
response to ASX CGC Recommendations 6.1 and 6.2.
Infomedia also acknowledges, and has considered and adopted 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, will attend the Annual General Meeting and be available to answer shareholder
questions.
1 The ASX Corporate Governance Council Guidelines containing the ASX CGC Principles, the ASX CGC
Recommendations and the ASX CGC Commentary, March 2003.
2 For example, ASX, Corporate Governance (Market Research Project), Final March 2006, page 9 and ASX
– 2005 Analysis of corporate governance practice disclosure May 2006, page 6.
3 UTS Centre for Corporate Governance et al, Interim Report, June 2006.
infomedia.com.au
95
l
a
n
o
i
t
i
d
d
A
n
o
i
t
a
m
r
o
f
n
I
Additional Information
Top 20 holders of shares as at 31 August 2006
Shares
% of Total
Rank
Name
WISER EQUITY PTY LIMITED
YARRAGENE PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
WESTPAC CUSTODIANS
CITICORP NOMINEES PTY LIMITED
ANZ NOMINEES LIMITED
NATIONAL NOMINEES LIMITED
ANZ NOMINEES LIMITED CASH INCOME A/C
MR ANDREW PATTINSON
WOODROSS NOMINEES PTY LTD
BIG BEAR ENTERPRISES PTY LTD
ANZ NOMINEES LIMITED
TOM HADLEY ENTERPRISES PTY LTD
100,277,501
39,421,599
17,011,248
8,809,603
4,472,651
4,051,295
2,956,147
2,464,379
2,447,567
2,208,000
2,000,000
1,403,458
1,250,000
WARBONT NOMINEES PTY LTD UNPAID ENTREPOT A/C
1,000,000
WISER CENTRE PTY LTD
RICHARD GRAHAM
MR YET-KWONG CHIANG MRS HO YUK LIN CHIANG
PORTFOLIO MANAGEMENT PTY LTD
AUSTRALIAN REWARD INVESTMENT ALLIANCE
AUSTIE DEVELOPMENTS PTY LTD
1,000,000
926,559
635,342
625,000
588,151
500,000
Range of shares as at 31 August 2006
30.81
12.11
5.23
2.71
1.37
1.24
0.91
0.76
0.75
0.68
0.61
0.43
0.38
0.31
0.31
0.28
0.20
0.19
0.18
0.15
1
2
3
4
5
6
8
7
9
10
11
12
13
14
15
16
17
18
19
20
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
Total
Shareholders
Shares held
% of total
446
2,623
2,232
3,015
132
8,448
369,501
8,703,583
18,666,680
83,856,217
213,875,592
325,471,573
0.11
2.67
5.74
25.76
65.72
100
As at 31 August 2006 there were 96 shareholders holding less than a marketable parcel of shares
(minimum parcel $500.00)
infomedia.com.au
96
D
i
r
e
c
t
o
r
y
C
o
r
p
o
r
a
t
e
Corporate Directory
Infomedia Ltd
357 Warringah Road
Frenchs Forest NSW 2086
ABN 63 003 326 243
Telephone: (02) 9454 1500
Facsimile: (02) 9454 1844
Internet: infomedia.com.au
Directors
Richard Graham – Chairman of the Board
Myer Herszberg – Non-executive Director
Frances Hernon – Non-executive Director
Geoffrey Henderson – Non-executive Director
Gary Martin – Chief Executive Officer and Executive Director
Andrew Moffat – Non-executive Director
Company officers
Nick Georges – Company Secretary
Peter Adams – Chief Financial Officer
Auditors
Ernst & Young
Ernst & Young Centre
680 George Street
Sydney NSW 2000
Share registry
Computershare Registry Services Pty Ltd
GPO Box 7045
Sydney NSW 1115
Lawyers
Thomson Playford Lawyers
Level 25 Australia Square Tower
264 George Street
Sydney NSW 2000
AutoLedgers, Infomedia, Microcat and PartsImager are registered trademarks, and LIVE, MARKET, NOVA 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.
infomedia.com.au
97
s
e
t
o
N
NOTES
infomedia.com.au
98