Infomedia Annual Report 2007

Plain-text annual report

Annual Report Contents Results at a Glance Chairman’s Letter Company Proﬁ le Regional Overview CEO Report People, Community and the Environment Directors’ Report Auditor’s 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 2 3 5 6 7 13 15 27 28 29 30 31 32 72 73 74 85 86 © 2007 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. 1 infomedia.com.au Results at a Glance Sales Revenue (in $ millions) NPAT (in $ millions) ‘07 ‘06 ‘05 ‘04 ‘03 ‘02 ‘01 ‘00 ‘07 ‘06 ‘05 ‘04 ‘03 ‘02 ‘01 ‘00 0 10 20 30 40 50 60 70 0 5 10 15 20 25 EBITDA (in $ millions) 0 10 20 30 40 Product Subscriptions EPCs Superservice Menus ‘07 ‘06 ‘05 ‘04 ‘03 ‘02 ‘01 ‘00 ‘000’s 60 50 40 30 20 10 0 ‘98 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 infomedia.com.au 2 Annual Report Chairman’s Letter Microcat and PartFinder grew by an impressive 11.4% overall...while Superservice Menus brought the Company’s total recurring subscription numbers to 55,779, an all time record. DEAR FELLOW SHAREHOLDERS, work coming from the newest branches I believe it is fair to characterise FY2007 of our tree. as having been a year of rejuvenation for I’m sure you have also been pleased by our the Company. This is borne out by: announcements of the many important (cid:129) Our continuing release of category leading new generation Electronic Parts Catalogue (EPC) applications to a broader range of customers; data licenses which have been renewed this year, and the many promising new li- censes that have also been entered into. Of particular note, the renewal of our licenses with Ford in the USA and Europe sees our (cid:129) Our record levels of product subscrip- positive support of Ford dealers continu- tions and of new product launches both ing towards its third decade. Our new data by country and by automakers; license with General Motors USA which (cid:129) Our development and release of a new subscription application genre, and; (cid:129) Our internal business streamlining. Microcat® and PartFinder® grew by impressive 11.4% overall, to a an record 53,165 Superservice MenusTM brought Company’s total recurring subscription subscriptions, while the allows us to develop Superservice Menus for its vast league of North American dealers is equally exciting. So too are the new engagements between Infomedia and Daihatsu, Hyundai and Kia around the world, which means that our Company now supplies Superservice Menus for nine automotive manufacturers in 20 countries. These new and renewed licenses, the new numbers to 55,779, an all-time record. generation of product invention, the wid- Our world-class EPC also expanded to ening of our customer base and the record support the commercial bus industry, subscription numbers have strengthened with the introduction of Microcat for our Company and its product brands, thus Temsa in Europe. reducing its economic risks. The Auto PartsBridgeTM system, tially developed for Toyota in the USA, ini- As projected, due to higher currency translations and subscription reductions represents a major new application tech- in our total General Motors (GM) USA nology from Infomedia’s latest generation numbers, revenue declined by 2.0% from of product inventors. This achievement $56.5 million in FY2006 to $55.4 million is destined to become an important in FY2007, and normalised Net Proﬁ t product for both the Company and the After Tax (NPAT) declined by 7.3% from automotive industry, and it is encourag- $16.5 million in FY2006 to $15.3 million ing to see such innovative and successful in FY2007. 3 infomedia.com.au Annual Report ...the renewal of our licenses with Ford in the USA and Europe sees our positive support of Ford dealers continuing towards its third decade. Chairman’s Letter The greater percentage decline between resources from our Dealer Management ing and Information Systems teams. revenue and NPAT is primarily a reﬂ ection System platforms, whose results after six Please take the time to have a visit. of three factors: the ﬁ rst being our higher years had not realised the expectations we investment this year in new product de- had for them. Accordingly, Management velopment, such as Auto PartsBridge and arranged the sale of the Business Systems more Superservice Menus country/au- Division to Reynolds & Reynolds Australia. In closing, I’d like you to know that I continue to be optimistic about the outlook for the Company. If you are like me, then you recognise tomaker versions, which we fully expect will make material contributions to the business beginning in FY2009; the second being our relatively ﬁ xed internal cost structure, especially in overseas subsidiar- ies; and ﬁ nally, the third being the impact of leasing our Corporate Headquarters since its sale in 2006. On all these mat- ters, I believe that our Management has a ﬁ rm grasp, and in the face of sustainable growth, they will work to the Company’s long term advantage. Also during the year, upon the retirement and take into account the swings of Mr Geoffrey Henderson, the Board and roundabouts of currency ef- took the opportunity to reconsider its own fects, such as those headwinds the structure. This resulted in the activities of Company has been pushing against the Remuneration & Nomination Commit- for several years. This perspective tee being re-absorbed into the whole of gives me added comfort and insight the Board, and the Corporate Governance into the underlying wellbeing of the Committee and the Audit & Risk Commit- Company when considered in con- tee being merged, with Mr Andrew Moffat junction with the progress I share as Chairman. Ms Fran Hernon, who was with you in this Report. Chairman of the Remuneration & Nomina- tion Committee, remains the lead Director In line with market expectation and on the Board for such matters. As a result despite the year on year reduction of of these changes, the Board has reduced NPAT, the fully-franked dividend of 4.0¢ from six Directors to ﬁ ve. For these reasons and for its overall performance that you will read about herein, I commend this Annual Report to you, and look forward to seeing you at the Annual General Meeting remained constant and within our payout policy. In addition, the Company paid a special dividend of 3.5¢ in October 2006. If you haven’t visited the Company if you are able to attend in person. website, www.infomedia.com.au in a while, you may not be aware that it, too, has had During the year, the Board supported a major rejuvenation that I believe makes Management’s recommendation to con- it much more informative and interesting solidate the Company’s focus onto our to customers and investors. Its clean fresh enabling-technology applications, thus look and much improved navigation de- releasing our ﬁ nancial and managerial sign were created in-house by our Market- Richard David Graham Chairman of the Board infomedia.com.au 4 Annual Report Company Proﬁ le 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 55,000 users from franchised dealers to 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 signiﬁ cant portion of the manufacturers’ parts data will change on a monthly basis. An ongoing monthly subscription with Infomedia ensures that customers receive and access the very latest parts information on CD-ROM, DVD-ROM or via the Internet. Timeline (cid:129) Software and peripherals importer and distributor Infomagic Australia Pty Ltd formed (1988) (cid:129) Acquisition of Datateck Publishing Pty Ltd and Online Computing Pty Ltd (cid:129) Microcat for GM North America, Hyundai USA, Toyota Europe and Toyota North America released (cid:129) Infomedia Ltd formed to add software development capability to Infomagic (1990) (cid:129) Listed on Australian Stock Exchange (cid:129) Microcat for Honda, Hyundai and Isuzu (cid:129) Microcat for Ford Australia released (1991) released in Australia (cid:129) PartFinder for GM/Holden released (1992) (cid:129) Microcat for Nissan Australia released (1995) (cid:129) Awarded NSW Exporter of the Year (Information & Communications Technology) (cid:129) Awarded Australian Exporter of the Year (Information & Communications Technology) 1988 –1996 1997–1999 2000 2001 2002 (cid:129) Microcat for Ford Europe and PartFinder for Suzuki Australia released (1997) (cid:129) Microcat for Mitsubishi Australia and Toyota Australia released (1998) (cid:129) Microcat for Daewoo Australia, Daihatsu Australia, Daihatsu Europe and Ford North America released (1999) (cid:129) PartFinder for Electrolux Australia released (1999) (cid:129) Microcat for Daihatsu Rest of World, Ford Asia Paciﬁ c, GM Asia Paciﬁ c, Hyundai Global and Land Rover Global released (cid:129) PartFinder for Electrolux New Zealand released 5 infomedia.com.au Annual Report Regional Overview Asia Paciﬁ c North & Latin America Europe & Rest of World (cid:129) Microcat LIVE for Toyota Germany released (cid:129) Superservice Menus for Mitsubishi Australia and Toyota Australia released (cid:129) Internet version of Lubrication & Tune-Up Guide released (cid:129) Awarded Australian Exporter of the Year Award (Information & Communications Technology) (cid:129) Awarded Australian Government Export Finance and Insurance Corporation Trailblazers award (cid:129) Auto PartsBridge for Toyota Motor Sales, US released (cid:129) Microcat for Temsa buses released (cid:129) Lubrication & Tune-Up Guide released on CD-ROM (Infomedia’s ﬁ rst customer in the bus segment) (cid:129) Microcat MARKET for Toyota Australia released (cid:129) Microcat MARKET for Ford Australia released (cid:129) Superservice Menus for Daihatsu UK and Hyundai Sweden released (cid:129) Established North American ofﬁ ce (cid:129) Superservice Menus for Daihatsu Austria, Hyundai Belgium, Hyundai Finland, Hyundai Luxembourg, Hyundai Netherlands, Hyundai Norway, Kia Australia and Kia UK released 2003 2004 2005 2006 2007 (cid:129) Microcat MARKET for Toyota Europe released (cid:129) Microcat for Isuzu (medium duty trucks) (cid:129) PartFinder for Whirlpool Australia released (cid:129) Superservice Menus for Daihatsu Australia, Daihatsu UK, Ford Australia, Holden Australia and Hyundai Australia released (cid:129) Established European ofﬁ ce and new corporate headquarters in Australia released in North America (cid:129) Microcat for Kia released worldwide (excluding China, Korea and USA) (cid:129) Microcat LIVE for Mazda Japan released (cid:129) Superservice Menus for Cadillac Corvette Europe, Daihatsu Germany and Subaru UK released (cid:129) Sale of the Company’s Business Systems Division infomedia.com.au 6 Annual Report CEO Report Superservice Menus subscription numbers grew by 56% to 2,614 over the previous corresponding period. AS CHIEF EXECUTIVE OFFICER OF INFOMEDIA LTD, I AM PROUD OF OUR ACHIEVEMENTS DURING THE PAST 12 MONTHS. I commend the commitment, initiative and focus the team has shown, resulting in the launch of a number of new products to new customers, as well as a successful renewal of existing agreements. These new product offerings and renewals position the Company well for the future. Our objectives in the past year have been to: (cid:129) Maintain focus on our core automotive business by delivering quality products; (cid:129) Renew our existing data licence Superservice Menus subscriptions continue to grow As reported last year, Superservice Menus continues to be received favourably by both new markets and new manufacturers. This past year has seen the release of Superservice Menus for Daihatsu Austria, Hyundai Belgium, Hyundai Finland, Hyundai Luxembourg, Hyundai Netherlands, Hyundai Norway, Kia Australia and Kia UK. Subscriptions across other markets and franchises also continue to grow. As at the end of the ﬁ nancial year, the Company now supplies Superservice Menus for nine automotive manufacturers in 20 countries. 2008 will see the ﬁ rst steps contracts so we have a commitment taken to deliver Superservice Menus into from our partners well into the future; the North American and Latin American (cid:129) Successfully deliver new technologies and products for existing customers; (cid:129) Explore opportunities in complementary segments; and (cid:129) Deliver returns for shareholders. Operational review Key operational highlights: (cid:129) Growth in Superservice Menus adoption; (cid:129) Development of Auto PartsBridge; (cid:129) Diversiﬁ cation into the bus segment; (cid:129) Renewal of a number of the Company’s key data licence contracts; (cid:129) Consolidation of the Company’s business. markets. We will commence sales to more countries and more automakers, adding to our recurring revenue stream. Superservice Menus is now used in Kia dealerships in Australia and the UK 7 infomedia.com.au Annual Report “I am excited about Auto PartsBridge and the opportunities it creates for Infomedia in this new market segment of the automotive industry. We’re delighted that Toyota has chosen Infomedia as their partner for this latest industry leading solution.” CEO Report (cid:10)(cid:156)(cid:213)(cid:152)(cid:204)(cid:192)(cid:136)(cid:105)(cid:195)(cid:202)(cid:220)(cid:136)(cid:204)(cid:133)(cid:202)(cid:45)(cid:213)(cid:171)(cid:105)(cid:192)(cid:195)(cid:105)(cid:192)(cid:219)(cid:136)(cid:86)(cid:105)(cid:202)(cid:31)(cid:105)(cid:152)(cid:213)(cid:195)(cid:202)(cid:143)(cid:62)(cid:213)(cid:152)(cid:86)(cid:133)(cid:105)(cid:96) Broadening our core product range This year saw the opportunity to increase the productivity tools on offer from Infomedia. The ﬁ rst opportunity was to create a version of the Company’s Microcat® Electronic Parts Catalogue (EPC) for the Temsa bus company. This product represented the Company’s ﬁ rst foray outside of the passenger vehicle segment while still remaining within the core automotive sector. Temsa is a Turkish bus manufacturer and produces 7% of all buses manufactured in Western Europe. The company has experienced year on year growth and is seeking to increase its Infomedia is now supplying Microcat to all dealers in the territories where Temsa buses are distributed and serviced (over 30 countries; predominantly within Europe). The second opportunity came via the development of a solution designed to link parts dealers with their collision repair customers. Discussions began in late 2005, and Infomedia was invited by Toyota Motor Sales (TMS), USA to participate in a quotation process to produce an online solution that would make it possible for parts dealers to transact with collision repairers. The result of our success in that process is Auto PartsBridgeTM. Infomedia since then has worked closely with Toyota, share of the bus manufacturing business. Toyota dealers and collision repairers Karl Krug (TMS) and Steve Fogarty (Infomedia) at the ﬁ rst Auto PartsBridge pilot dealership in the USA infomedia.com.au 8 Annual Report CEO Report “It was critical for Toyota to ﬁ nd a business partner who can help us provide this data in a way that offers the full value of the data, yet is simple for the shops to use and understand. What impressed us most about Infomedia was their dedication to understanding the end users and designing a system that is primarily built around the needs of the dealerships and collision centres.” Karl Krug – Senior Wholesale Collision Parts Administrator, Toyota Motor Sales, USA. 9 infomedia.com.au (cid:1)(cid:213)(cid:204)(cid:156)(cid:202)(cid:42)(cid:62)(cid:192)(cid:204)(cid:195)(cid:9)(cid:192)(cid:136)(cid:96)(cid:125)(cid:105)(cid:202)(cid:76)(cid:213)(cid:195)(cid:136)(cid:152)(cid:105)(cid:195)(cid:195)(cid:202)(cid:171)(cid:192)(cid:156)(cid:86)(cid:105)(cid:195)(cid:195)(cid:202)(cid:118)(cid:143)(cid:156)(cid:220) (cid:85)(cid:202)(cid:31)(cid:62)(cid:204)(cid:86)(cid:133)(cid:202)(cid:22)(cid:152)(cid:219)(cid:156)(cid:136)(cid:86)(cid:105)(cid:195)(cid:202)(cid:204)(cid:156)(cid:202)(cid:34)(cid:192)(cid:96)(cid:105)(cid:192)(cid:195) (cid:85)(cid:202)(cid:20)(cid:105)(cid:152)(cid:105)(cid:192)(cid:62)(cid:204)(cid:105)(cid:202)(cid:192)(cid:105)(cid:171)(cid:156)(cid:192)(cid:204)(cid:195) (cid:85)(cid:202)(cid:45)(cid:133)(cid:156)(cid:220)(cid:202)(cid:147)(cid:136)(cid:195)(cid:195)(cid:105)(cid:96)(cid:202)(cid:195)(cid:62)(cid:143)(cid:105)(cid:195)(cid:202)(cid:156)(cid:171)(cid:171)(cid:156)(cid:192)(cid:204)(cid:213)(cid:152)(cid:136)(cid:204)(cid:136)(cid:105)(cid:195) (cid:10)(cid:34)(cid:29)(cid:29)(cid:22)(cid:45)(cid:22)(cid:34)(cid:32) (cid:44)(cid:13)(cid:42)(cid:1)(cid:22)(cid:44)(cid:13)(cid:44) (cid:22)(cid:147)(cid:171)(cid:156)(cid:192)(cid:204)(cid:195) (cid:13)(cid:195)(cid:204)(cid:136)(cid:147)(cid:62)(cid:204)(cid:105) (cid:12)(cid:13)(cid:1)(cid:29)(cid:13)(cid:44) (cid:13)(cid:221)(cid:171)(cid:156)(cid:192)(cid:204)(cid:195) (cid:34)(cid:192)(cid:96)(cid:105)(cid:192) (cid:22)(cid:147)(cid:171)(cid:156)(cid:192)(cid:204)(cid:202)(cid:22)(cid:152)(cid:219)(cid:156)(cid:136)(cid:86)(cid:105)(cid:195) (cid:12)(cid:105)(cid:62)(cid:143)(cid:105)(cid:192)(cid:202)(cid:31)(cid:62)(cid:152)(cid:62)(cid:125)(cid:105)(cid:147)(cid:105)(cid:152)(cid:204) (cid:45)(cid:222)(cid:195)(cid:204)(cid:105)(cid:147)(cid:202)(cid:173)(cid:12)(cid:31)(cid:45)(cid:174) to develop and reﬁ ne Auto PartsBridge. The product introduces a new level of transparency regarding the parts required for a collision repair and helps Toyota dealerships provide higher quality service to their collision repair customers. At the same time, the system provides accurate parts data to the collision repairers to help them prepare estimates and improve their production processes. A pilot program for Auto PartsBridge commenced in April 2007 in selected markets across the United States and is proceeding positively. Ongoing commitment from partners This year saw the renewal of a number of key contracts that the Company holds with our automotive partners. The ﬁ rst contract to be renewed in this ﬁ nancial year was the Company’s contract with Land Rover. The renewed contract ensures the supply of Microcat to Land Rover dealers globally through to at least June 2010. Early in 2007, the Company renewed our agreement with Ford Canada, until 2009, which will also mark a 10 year relationship between the two companies. The renewal of our agreement with Ford Europe was testament to the regard in which the Microcat solution is held throughout the Ford European dealerships and its importance as an independent and mission critical business tool for professional parts sales. Competition in this marketplace has intensiﬁ ed in recent years; however, the Company remains conﬁ dent that we deliver products which assist dealers increasing sales and productivity. in The Company will also launch both Microcat® LIVETM and Microcat® MARKET TM during FY2008 and these Annual Report Microcat is used every day by over 53,000 subscribers, in more than 160 countries and in 28 languages. CEO Report products will be offered to all Ford dealers (cid:129) Superservice Menus subscription across Europe. Just before the close of this ﬁ nancial year Infomedia also renewed its data licence agreement with Ford North America through to 2010. The Company has a strong product advocate base within the numbers grew by 56% to 2,614 over the previous corresponding period. Subscription growth was driven primarily across European markets with particular emphasis on Daihatsu and Hyundai. USA and the dedicated team in the IFM (cid:129) Electronic Catalogue and Publishing North America ofﬁ ce continues to provide sales revenue increased by 3% to $53 outstanding service to our customers there. million over the equivalent prior period. Consolidation of the business This growth was impaired as a result of the rising strength of the Australian Late in 2006, the Company sold its Business dollar throughout the year. Systems Division, enabling the Company to focus on its key areas of expertise: developing and supplying Electronic Parts Catalogues and service quoting systems for the automotive industry globally; plus information creation and management for the domestic automotive and oil industries. Financial results In terms of ﬁ nancial results for 2007, the Company is pleased to report net proﬁ t after tax of $15.3 million. This ﬁ gure is within the guidance previously provided to the market in December 2006. Key highlights (cid:129) Consolidated sales revenue of $54.6 million only included ﬁ ve months of the Business Systems Division compared to the full 12 months of the comparative period following the sale of the division. The division was sold on 1 December 2006 for gross proceeds of $1.5 million. The absence of the Business Systems Division in the second half had little impact on reported proﬁ ts as this business was operating on a near breakeven basis. (cid:129) Cash ﬂ ows from operations remain strong with $14 million in cash (cid:129) Electronic Parts Catalogue subscription generation. Total dividend payments numbers grew by 11% to 53,165. This to shareholders over the 2007 subscription growth was driven ﬁ nancial year amounted to $24.4 primarily through the successful million. Notwithstanding these returns, worldwide launch into Kia markets the balance sheet remains in a strong coupled with organic growth within position with $15.7 million cash on the existing portfolio. hand at 30 June 2007. infomedia.com.au 10 Annual Report CEO Report Put simply, we turn data into meaningful information. Looking forward Operational outlook The coming year will see many releases of Microcat LIVE and Microcat MARKET globally. These exciting products will Infomedia regularly reviews our product gain traction in all markets and increase development approach, how we are the customer touch points with Infomedia. positioned to address future challenges, We are also conﬁ dent about the release and our capacity to respond to the of Auto PartsBridge for Toyota Motor changing needs of our customers. The Sales in the US and the beneﬁ ts it brings Company remains agile in its approach to the parts dealer and collision repairer and is committed to developing superior supply chain. products which deliver genuine value for our customers, and in turn, our Financial outlook shareholders. We have the people, In the year ahead, the Company will knowledge, infrastructure and commitment incorporate higher data licence costs and from our partners, to develop and deliver experience the previously communicated new products for existing customers as reduction in General Motors subscriptions well as future customers. in North America. Despite anticipated net Subscription History 11 infomedia.com.au Annual Report Commitment to delivering high quality, sought after products for our expanding customer base. CEO Report growth in software subscription volumes, In last year’s Annual Report I spoke about the projected strength of the Australian a Company of strength. Again this year, dollar during the course of the 2008 year I am proud of the achievements of our is likely to have a dampening affect on management and dedicated staff around reported proﬁ t. The recent successful contract renewals in Europe, North America and Asia Paciﬁ c, along with the positive reception of our new products, provide a solid platform for growth in subscription volumes. Further advances in EPC technology for both the franchised automotive dealer and the independent motor trade will create increased sales momentum and diversiﬁ cation of the Company’s customers and product portfolio over the medium term. The outlook for Superservice Menus remains strong, with continuing growth expected into 2008 and beyond. The Company continues to expand both domestically and internationally, with new automakers and organic growth from current releases. the world. Their commitment to delivering high quality, sought after products for our expanding customer base is why I am conﬁ dent that our foundations are solid, and our prospects are bright when looking beyond 2008. Your Company continues to expand its product portfolio and reputation for truly understanding what our customers need and translating that into tools that empower and enrich our customers’ daily work lives. Put simply, we turn data into meaningful information. I look forward to a year ahead that continues to develop great people and great products. Gary Martin Chief Executive Ofﬁ cer Infomedia staff provide outstanding service to our customers The Quality Assurance Team test all products every month ensuring a robust and reliable product infomedia.com.au 12 Annual Report People, Community and the Environment Prue Elvy Position: Instructional Designer, Education Services Qualiﬁ cations: Bachelor of Education, Certiﬁ cate IV in Workplace Assessment and Training, Masters in Adult Education (in progress) Length of service: 5 years “I have had the opportunity to be involved in the design and development of all the different training materials and courses Infomedia’s multi-lingual that educate global customers. My passion is adult learning and training so I enjoy supporting our trainers globally to ensure an effective, professional and consistent approach to training. I have a strong user focus and in my design I highlight the simplicity and consistency of Infomedia products through the 3-step model (identify a vehicle, select parts/ service, ﬁ nalise order/quote). I also like to promote the training department internally to ensure all employees are aware of what materials are available to support them in their roles.“ 13 infomedia.com.au Community Infomedia recognises that it is our responsibility as good corporate citizens to help strengthen the societies in which we live and work. We also understand that employees are attracted to companies who acknowledge this responsibility and allow them the opportunity to give something back to the community. Hence, this year we launched our own corporate volunteering program – an initiative that encourages employees to become involved in their communities, lending their voluntary support to programs that enrich the quality of life and opportunities for society. Infomedia’s corporate volunteering program was created as an extension of our existing program of ﬁ nancial support for community groups, and we have found that it provides many more beneﬁ ts over traditional donations such as cash. These include: (cid:129) positive visibility within the local community and enhanced relationships with community organisations and stakeholders; (cid:129) team building and enhanced employee morale as staff members work together on volunteering projects; and (cid:129) staff training via an appreciation of diversity with improved communication skills and social awareness. Speciﬁ cally, the program encourages Infomedia employees to volunteer eight hours of their work time per quarter to support selected local charities with whom we have developed close relationships. Initially, partnerships were created in the local community. In our North America ofﬁ ce we encouraged staff to generate their own ideas about which organisations to partner with. Australians and businesses are volunteering more than ever before, with around 70% of companies in Australia offering paid volunteer leave.1 Research also shows that the 35 – 44 age group volunteers more than any other age group.2 With the majority of Infomedia’s own staff falling within this age bracket, we are discovering that many of our employees are keen to take part in volunteering programs and report positive feelings of self worth and satisfaction after participating. They have also expressed their gratitude that the Company encouraged and supported this activity. As Lara Wasley, Human Resources Administration Assistant noted after volunteering for Meals on Wheels, “It does make you feel happier to know you work for a company that is prepared to go that extra mile and give back to the local community.” Lara Wasley, HR Administration Assistant volunteering for Meals on Wheels Annual Report It does make you feel happier to know you work for a company that is prepared to go that extra mile and give back to the local community. People, Community and the Environment We now advise of our corporate volunteering policy in our recruitment advertisements and have found that this has been a contributing factor for many applicants in applying for a job with Infomedia. Not only does our corporate volunteering program engage potential employees, but it generates a sense of pride and satisfaction in our workplace i– helping to increase employee morale and therefore retention. Environment Infomedia’s existing Supplementing commitment to the environment, an environmental strategy, entitled ‘Project Green’, was also established this year. in Encouraging staff to play a part environmental sustainability, Project Green creates positive change with responsible energy management, waste management, recycling and water conservation. Staff are reminded and educated about sustainable ofﬁ ce initiatives, for example: (cid:129) Energy – all equipment is switched off before leaving the ofﬁ ce and lights are turned off whenever a room is empty. ‘Lights off Planet on’ stickers are afﬁ xed distributing printed payroll receipts every two weeks, the receipts are now available as a downloadable PDF that is accessed from a secure website. Leave applications are also sent electronically from the website rather than via traditional paper based methods. This year’s Annual Report also represents Clinton Ennis Position: Development Team Leader of Rich Internet Applications Qualiﬁ cations: MCP (Microsoft Certiﬁ ed Professional) an effort to minimise the environmental Length of service: 8 years impact of our business. In line with the new legislation introduced in May 2007, Infomedia now only sends a paper copy of the Annual Report to shareholders who request one. All other shareholders receive notiﬁ cation of the Report’s availability online at the Infomedia website. This change represents a signiﬁ cantly lower use of paper and also savings to shareholders over the traditional method of printing and posting the Report. Shareholders is Infomedia “The most rewarding part of my career at its global business relationships. I’ve been fortunate enough to work and meet with end users, customers, partners and Infomedia staff all over the world with varying cultures and interesting personalities. It’s the people I work with that are the highlight of my daily work. Infomedia has a great infrastructure, allowing my team to keep pushing our technology implementations further ahead of IT in the automotive industry. My team builds Rich Internet Applications, bringing our ﬂ agship desktop software to the Internet in a distributed and connected environment and giving end users a Web 2.0 experience they expect from technology today.” infomedia.com.au 14 next to applicable light switches; can update their preference for how they (cid:129) Water – water is conserved by reporting leaks and turning off taps properly; (cid:129) Recycling – paper, glass and plastic recycling bins are appropriately labelled and located around the ofﬁ ce. receive the Annual Report at any time. To update your preference, visit: www.computershare.com.au/holderupdate/ifm 1. Volunteering Australia/Australia Cares. Corporate Volunteering Survey; 2006. A new online payroll system has also been introduced this year. Instead of 2. Giving Australia: Research on Philanthropy in Australia. www.volunteering.com.au Annual Report Directors’ Report YOUR DIRECTORS SUBMIT THEIR REPORT FOR THE YEAR ENDED 30 JUNE 2007. DIRECTORS Directors were in ofﬁ ce from the beginning of the ﬁ nancial year until the date of this report, unless otherwise stated. Geoffrey Henderson was a Non-executive Director and Chairman of the Corporate Governance Committee until his resignation on 28 February 2007. In June 2007, the Board resolved to appoint Frances Hernon to the Audit & Risk Committee and to subsequently merge that Committee and the Corporate Governance Committee into the Audit, Risk & Governance Committee. It was also resolved that the Board itself would re-absorb the Remuneration & Nomination Committee functions. These changes took effect from 1 July 2007, with the exception of Ms Hernon’s appointment to the Audit & Risk Committee (as it then was), which took effect on 25 June 2007. Refer to the Corporate Governance Statement for further details. The names and details of the Directors of the Company in ofﬁ ce during the ﬁ nancial year and until the date of this Report are: Names, Qualiﬁ cations, Experience and Special Responsibilities Richard Graham – Chairman of the Board 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 Managing Director/CEO from its establishment until he retired as CEO in December 2004. Since then, Mr Graham has continued as Chairman. Mr Graham was last re-elected to the Board in October 2005. Gary Martin – Chief Executive Ofﬁ cer Gary Martin was promoted to the position of Chief Executive Ofﬁ cer 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 & 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. 15 infomedia.com.au Frances Hernon – Non-executive Director 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 the Corporate Affairs Manager for Nestlé Australia Ltd. Ms Hernon serves on the Audit, Risk & Governance Committee and also serves the Board as Lead Non-executive Director for all matters that formerly fell within the ambit of the Remuneration & Nomination Committee. Ms Hernon was last re-elected to the Board in October 2006. Myer Herszberg – Non-executive Director Myer Herszberg has been a Director of Infomedia since 1992. Mr Herszberg has extensive consumer electronics experience and was active in bringing home computers to Australia in the early 1980s, as well as many other leading edge electronic products. He also has extensive experience in the commercial property market, and is active in a number of community service organisations. Mr Herszberg currently serves on the Company’s Audit, Risk & Governance Committee. Mr Herszberg was last re-elected to the Board in October 2005. Andrew Moffat – Non-executive Director (Chairman of Audit, Risk & Governance 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. Mr Moffat was a Director of Equity Capital Markets & Advisory for BNP Paribas Equities (Australia) Limited with 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. His 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 qualiﬁ ed 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, where he obtained extensive experience in the information technology industry. Annual Report Directors’ Report infomedia.com.au 16 Annual Report Directors’ Report 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 Andrew Moffat 100,277,501 23,421,599 1,000,000 926,559 407,590 5,000 - - - - - 666,667 - - Richard Graham is the sole Director and beneﬁ cial shareholder of Wiser Equity 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 four 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 Ltd and an executive Director of Ausron Limited. PRINCIPAL ACTIVITIES Infomedia Ltd is a company limited by shares that is incorporated and domiciled in Australia. The principal activities during the year of entities within the consolidated entity were: (cid:129) developer and supplier of Electronic Parts Catalogues and service quoting systems for the automotive industry globally; (cid:129) information management, analysis and creation for the domestic automotive and oil industries; and (cid:129) 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, with the exception of the sale of the Company’s Business Systems Division on 1 December 2006, which was the division responsible for the provision of dealer management systems for the automotive industry. EMPLOYEES The Company employed 204 (2006: 230) full time employees as at 30 June 2007. 17 infomedia.com.au Annual Report Directors’ Report DIVIDENDS Final dividends recommended: On ordinary shares – ﬁ nal – fully franked Dividends paid in the year: On ordinary shares – 2007 interim – fully franked On ordinary shares – special – fully franked Cents $’000 2.10 6,845 1.90 3.50 6,194 11,391 Final for the 2006 year: On ordinary shares – as recommended in the 2006 report 2.10 6,836 NET TANGIBLE ASSETS PER SECURITY The Company’s net tangible assets per security are as follows: Net tangible assets per share at 30 June 2007 Net tangible assets per share at 30 June 2006 REVIEW AND RESULTS OF OPERATIONS Cents 4.8 7.5 The following table presents sales revenue and proﬁ t after tax after excluding non-recurring signiﬁ cant items: Sales revenue – Catalogue and Publishing Sales revenue – Business Systems (sold 1 December 2006) Consolidated sales revenue Reported proﬁ t after tax Adjustments: Sale and leaseback transaction after tax Proﬁ t after tax excluding sale and leaseback transaction and signiﬁ cant items CONSOLIDATED 2007 $’000 52,990 1,576 54,566 2006 $’000 51,635 3,942 55,577 15,294 18,146 - 15,294 (1,616) 16,530 The Company is pleased to report net proﬁ t after tax of $15,294,000 for the 2007 ﬁ nancial year, which is within the guidance previously provided to the market in December 2006. Electronic Parts Catalogue subscription numbers grew by 11% to 53,165 and Superservice Menus subscription numbers grew by 56% to 2,614 over the previous corresponding period. Electronic Parts Catalogue subscription growth was driven primarily through the successful worldwide launch into Kia markets, coupled with organic growth within the existing portfolio. Superservice Menu subscription growth was driven primarily across European markets, with particular emphasis on Daihatsu and Hyundai. infomedia.com.au 18 Annual Report Directors’ Report REVIEW AND RESULTS OF OPERATIONS (CONTINUED) Catalogue and Publishing sales revenue increased by 3% to $52,990,000 over the equivalent prior period. This growth was impaired as a result of the rising strength of the Australian dollar throughout the year. Consolidated sales revenue of $54,566,000 only included ﬁ ve months of the Business Systems Division compared to the full 12 months of the comparative period following the sale of the division. The division was sold on 1 December 2006 for gross proceeds of $1,500,000. The absence of the Business Systems Division in the second half had little impact on reported proﬁ ts, as this business was operating on a near breakeven basis. Cash ﬂ ows from operations remain strong, with $14,044,000 in cash generation. Total dividend payments to shareholders over the 2007 ﬁ nancial year amounted to $24,421,000. Notwithstanding these returns, the balance sheet remains in a strong position, with $15,690,000 cash on hand at 30 June 2007. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There has been no signiﬁ cant change in the state of affairs of the Company since the last Directors’ Report, with the exception of the sale of the Company’s Business Systems Division on 1 December 2006, which was the division responsible for the provision of dealer management systems for the automotive industry. SIGNIFICANT EVENTS AFTER THE BALANCE DATE 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. LIKELY DEVELOPMENTS AND EXPECTED RESULTS In the year ahead, the Company will incorporate higher data licence costs and experience the previously communicated reduction in General Motors subscriptions in North America. Despite anticipated net growth in software subscription volumes, the projected strength of the Australian dollar during the course of the 2008 year is likely to have a dampening affect on reported proﬁ t. The recent successful contract renewals in Europe, North America and Asia Paciﬁ c, along with the positive reception of our new products, provide a solid platform for growth in subscription volumes. Further advances in EPC technology for both the franchised automotive dealer and the independent motor trade will create increased sales momentum and diversiﬁ cation of the Company’s customers and product portfolio over the medium term. The outlook for Superservice Menus remains strong, with continuing growth expected into 2008 and beyond. The Company continues to expand both domestically and internationally, with new automakers and organic growth from current releases. ENVIRONMENTAL REGULATION AND PERFORMANCE The Company is not subject to any particular or signiﬁ cant 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 1,300,001 unissued ordinary shares under options. Refer to Note 24 of the ﬁ nancial statements for further details of the options outstanding. 19 infomedia.com.au Annual Report Directors’ Report Shares issued as a result of the exercise of options During the ﬁ nancial year, executives have exercised options to acquire 499,999 (2006: nil) fully paid ordinary shares in Infomedia Ltd at a weighted average price of $0.50. Since the end of the ﬁ nancial year, there have been no further options exercised. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS During the year, the Company paid a premium in relation to insuring Directors and other ofﬁ cers against liability incurred in their capacity as a Director or ofﬁ cer of the Company. The insurance contract speciﬁ cally 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. Infomedia Ltd has adopted the option available under the Corporation Regulations 2M.6.04 (as amended by the Corporation Amendments Regulation 2006 (No. 4)) which permits listed companies to transfer the remuneration disclosures required under AASB124 para Aus 25.4 – Aus 25.7.2 out of the Financial Report and into the Remuneration Report. The transferred AASB124 disclosures are subject to audit. Compensation philosophy (audited) 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: (cid:129) provide competitive rewards to attract high calibre executives; (cid:129) link executive rewards to shareholder value; (cid:129) 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 beneﬁ t 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 (audited) 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. infomedia.com.au 20 Annual Report Directors’ Report REMUNERATION REPORT (CONTINUED) Structure The Constitution and the Australian Securities Exchange (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 2007, non-executive Directors’ compensation totalled $350,136 (2006: $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 (audited) 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: (cid:129) reward executives for Company and individual performance against targets set by reference to appropriate benchmarks; (cid:129) align the interests of executives with those of shareholders; (cid:129) link reward with the strategic goals and performance of the Company; and (cid:129) 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 – Variable Compensation – Long Term Incentive (LTI). The actual proportion of ﬁ xed 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 ﬁ xed 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 21 infomedia.com.au Annual Report Directors’ Report Committee for the 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 ﬁ xed (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) (audited) 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 reﬂ ects the Company wide practice of ‘Performance Planning and 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 ﬁ nancial year (adjusted where necessary for currency ﬂ uctuations). 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 satisﬁ ed, pre-agreed key performance indicators (KPIs) are used. In assessing whether Company objectives have been satisﬁ ed, 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) (audited) 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 LTI grants are made to executives who are able to inﬂ uence 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 Plan and Employee Share Plan. 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 and measurable performance expectations. infomedia.com.au 22 Annual Report Directors’ Report REMUNERATION REPORT (CONTINUED) Speciﬁ ed Directors and ﬁ ve highest remunerated speciﬁ ed executives for the year ended 30 June 2007 and 30 June 2006 (audited) Short term Post employment Share based payments Long term Total Percentage performance related Superannuation Options Employee share plan Other $ % 2007 Financial Year Salary and Fees Bonus Directors Richard Graham 115,000 - Gary Martin 280,000 83,200 Non monetary beneﬁ ts - - - - - - - - - - 24,746 38,000 25,641 25,000 23,000 15,258 - 12,434 - - 56,300 56,250 56,250 37,427 314,276 190,742 182,692 167,215 165,000 118,019 280,000 42,000 42,000 42,000 42,000 305,523 190,742 170,290 153,558 170,186 - 63,000 - - - - - 38,000 12,500 14,000 - 1,556,318 127,500 - - - - - - 14,537 - - - 9,589 24,126 10,350 25,200 5,067 5,062 5,062 3,368 28,285 17,220 - 14,850 14,850 10,350 24,445 3,780 3,780 3,780 3,780 27,497 17,167 15,326 13,820 - 1,621,152 219,587 27,692 129,314 Myer Herszberg Frances Hernon Andrew Moffat Geoffrey Henderson Executives Andrew Pattinson Peter Adams Mark Kujacznski Michael Roach Nick Georges 2006 Financial Year Directors Richard Graham Gary Martin Myer Herszberg Geoffrey Henderson Frances Hernon Andrew Moffat Executives Andrew Pattinson Peter Adams Nick Georges Michael Roach Mark Kujacznski - 48,846 - - - - - 17,961 - 7,332 5,700 79,839 - 51,232 - - - - - 17,742 13,050 6,286 - - - - - - - - - - - - - - - - - - - 1,000 1,000 1,000 1,000 - - 125,350 3,267 440,513 - 30% - - - - 61,367 61,312 61,312 40,795 5,238 2,225 387,803 266,148 - 220,767 2,787 1,925 217,184 210,475 15,442 2,093,026 - 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 - - - - 6% 21% 12% 15% 14% - 27% - - - - - 21% 12% 11% - 123,725 88,310 4,000 15,130 1,939,109 Directors and Executives also represent Key Management Personnel as deﬁ ned by AASB124. 23 infomedia.com.au Annual Report Directors’ Report Contract for services (audited) The table and notes below summarise current executive employment contracts with the Company as at the date of this Report: Gary Martin Nick Georges Peter Adams Michael Roach Mark Kujacznski Commencement date per latest contract 1 January 2005 1 January 2005 1 January 2005 1 January 2005 22 August 2005 Duration 3 years 3 years 3 years 3 years 3 years Notice period – Company Notice period – executive 6 months* 6 months* 6 months* 3 months 3 months 6 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 during the year (audited) There were no options granted during the year. Shares issued on exercise of compensation options (Consolidated) (audited) 30 June 2007 Directors Gary Martin Executives Peter Adams Shares issued Number 333,333 166,666 Paid per share Unpaid per share $ 0.50 0.50 $ - - No options were exercised during the prior year by Key Management Personnel. infomedia.com.au 24 Annual Report Directors’ Report REMUNERATION REPORT (CONTINUED) Option holdings of Key Management Personnel (Consolidated) (audited) 30 June 2007 Balance at beginning of period 1 July 2006 Directors Gary Martin 1,000,000 Granted as compensation Options exercised Net change other Balance at end of period Vested at 30 June 2007 30 June 2007 Total Not exercisable Exercisable - - - - - (333,333) (166,666) - - (499,999) - - - - - 666,667 666,667 333,334 333,333 83,334 250,000 200,000 83,334 83,334 250,000 166,667 200,000 133,334 - 83,333 66,666 1,200,001 1,200,001 716,669 483,332 Granted as compensation Options exercised Net change other Balance at end of period Vested at 30 June 2006 30 June 2006 Total Not exercisable Exercisable 250,000 250,000 200,000 1,700,000 Balance at beginning of period 1 July 2005 - - - - - 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 Executives Peter Adams Nick Georges Michael Roach 30 June 2006 Directors Gary Martin Executives Peter Adams Nick Georges Michael Roach 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 Number of meetings held: Number of meetings attended: Richard Graham Gary Martin Geoffrey Henderson Myer Herszberg Frances Hernon Andrew Moffat 13 13 13 7 12 12 13 5 - - 4 4 1 5 2 - - 2 1 2 - Remuneration & Nomination 4 - - - 4 4 4 25 infomedia.com.au Annual Report Directors’ Report In June 2007, the Board resolved to appoint Ms Hernon to the Audit & Risk Committee and to subsequently merge that Committee and the Corporate Governance Committee into the Audit, Risk & Governance Committee. It was also resolved that the Board itself would re-absorb the Remuneration & Nomination Committee functions. These changes took effect from 1 July 2007, with the exception of Ms Hernon’s appointment to the Audit & Risk Committee (as it then was), which took effect on 25 June 2007. ROUNDING The amounts contained in this Report and in the ﬁ nancial 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 (refer page 26). NON-AUDIT SERVICES Ernst & Young did not provide any non-audit services during the ﬁ nancial year ended 30 June 2007. Signed in accordance with a resolution of the Directors. Richard David Graham Chairman Sydney, 22 August 2007 infomedia.com.au 26 Annual Report Independence Declaration 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 2007, 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 Ernst & Young Garry Wayling Partner Sydney, 22 August 2007 J K Haydon Partner Sydney Date: 23 August 2006 Liability limited by a scheme approved under Professional Standards Legislation 27 infomedia.com.au Annual Report Income Statement YEAR ENDED 30 June 2007 Notes CONSOLIDATED INFOMEDIA LTD Sales revenue Rental revenue Finance revenue Revenue Cost of sales Gross proﬁ t Other income Net proﬁ t/(loss) on sale of business Employee beneﬁ ts expense Depreciation and amortisation Finance costs Operating lease rental 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) 2007 $’000 42,967 - 778 43,745 (11,106) 32,639 - (76) (7,017) (3,016) (134) (533) (1,868) 19,995 (5,498) 14,497 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 2007 $’000 54,566 - 791 55,357 (17,448) 37,909 - 15 (8,374) (3,492) (134) (1,072) (4,119) 20,733 (5,439) 15,294 4.70 4.68 4.00 - 3(i) 3(ii) 22 3(iii) 3(iv) 4 5 5 6 6 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 infomedia.com.au 28 Annual Report Balance Sheet AT 30 June 2007 Notes CONSOLIDATED INFOMEDIA LTD 21(b) 7 8 31 9 10 12 13 4 15 16 17 18 19 4 20 20 2007 $’000 15,690 6,944 52 432 - 2006 $’000 26,021 6,751 84 544 229 2007 $’000 13,544 3,818 52 297 - 2006 $’000 25,089 4,409 71 448 229 23,118 33,629 17,711 30,246 - 335 2,817 17,139 1,443 21,734 44,852 2,482 - 2,284 2,272 506 7,544 1,706 2,700 4,406 11,950 32,902 17,738 978 14,186 32,902 - 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 1,623 583 2,222 13,465 1,250 19,143 36,854 1,752 - 1,612 2,228 254 5,846 1,568 2,353 3,921 9,767 27,087 17,738 1,023 8,326 27,087 451 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 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 29 infomedia.com.au Annual Report Cash Flow Statement YEAR ENDED 30 June 2007 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) 22 3(vi) 3(vi) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment Proceeds from sale of business 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 exercise of share options Proceeds from borrowings Repayment of borrowings Repayment of loan from controlled entity 2007 $’000 54,284 (35,448) 791 (3) (5,580) 14,044 (873) 1,169 - - - - 2006 $’000 54,522 (31,036) 268 (197) (4,528) 19,029 (1,625) - 23,000 (500) (2,096) - 2007 $’000 43,535 (25,438) 778 (3) (5,239) 13,633 (692) 185 - - - - 2006 $’000 46,229 (23,556) 1,164 (197) (4,528) 19,112 (1,121) - 1,750 - (2,096) (1) 296 18,779 (507) (1,468) 250 - (500) - - 8,000 (7,500) - 250 - (500) - - 8,000 (7,500) 21,250 Dividends paid on ordinary shares 6 (24,421) (23,108) (24,421) (23,108) NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES (24,671) (22,608) (24,671) (1,358) NET INCREASE/(DECREASE) IN CASH HELD (10,331) 15,200 (11,545) 16,286 Add opening cash brought forward 26,021 10,821 25,089 8,803 CLOSING CASH CARRIED FORWARD 21 (b) 15,690 26,021 13,544 25,089 infomedia.com.au 30 Annual Report Statement of Changes in Equity YEAR ENDED 30 June 2007 CONSOLIDATED Contributed equity Retained earnings Other reserves Total At 1 July 2006 Currency translation differences Proﬁ t for the year Cost of share based payments Exercise of options Equity dividends At 30 June 2007 $’000 17,488 - - - 250 - 17,738 $’000 23,313 - 15,294 - - (24,421) 14,186 $’000 1,010 (79) - 47 - - 978 $’000 41,811 (79) 15,294 47 250 (24,421) 32,902 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 YEAR ENDED 30 June 2007 At 1 July 2006 Proﬁ t for the year Exerercise of options Cost of share based payments Equity dividends At 30 June 2007 YEAR ENDED 30 June 2006 At 1 July 2005 Proﬁ t for the year Cost of share based payments Equity dividends At 30 June 2006 31 infomedia.com.au $’000 17,488 - - - - 17,488 $’000 28,275 - 18,146 - (23,108) 23,313 $’000 706 53 - 251 - 1,010 Contributed equity Retained earnings Other reserves INFOMEDIA LTD $’000 17,488 - 250 - - 17,738 $’000 18,250 14,497 - - (24,421) 8,326 $’000 976 - - 47 - 1,023 $’000 46,469 53 18,146 251 (23,108) 41,811 Total $’000 36,714 14,497 250 47 (24,421) 27,087 Contributed equity Retained earnings Other reserves Total INFOMEDIA LTD $’000 17,488 - - - 17,488 $’000 27,658 13,700 - (23,108) 18,250 $’000 725 - 251 - 976 $’000 45,871 13,700 251 (23,108) 36,714 Annual Report Notes to the Financial Statements 30 June 2007 1. CORPORATE INFORMATION The ﬁ nancial report of Infomedia Ltd for the year ended 30 June 2007 was authorised for issue in accordance with a resolution of the Directors on 22 August 2007. Infomedia Ltd is a company limited by shares incorporated in Australia whose shares are publicly traded on the Australian Securities 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 ﬁ nancial report is a general-purpose ﬁ nancial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The ﬁ nancial report has also been prepared on a historical cost basis, except for derivative ﬁ nancial instruments that have been measured at fair value. (b) Statement of compliance The ﬁ nancial report complies with Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the ﬁ nancial report, comprising the ﬁ nancial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). Certain Australian Accounting Standards and UIG interpretations have recently been issued or amended but are not yet effective. These Standards have not been adopted by the Company for the year ended 30 June 2007. The Directors have yet to ﬁ nalise their assessment of the impact of the new or amended standards (to the extent relevant to the Company). (c) Basis of consolidation The consolidated ﬁ nancial statements comprise the ﬁ nancial statements of Infomedia Ltd and its subsidiaries (the Company). The ﬁ nancial statements of subsidiaries are prepared for the same reporting period as for 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 proﬁ ts 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 ﬁ nancial statements include the results for the part of the reporting period during which Infomedia Ltd has control. (d) Signiﬁ cant accounting judgements, estimates and assumptions The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. infomedia.com.au 32 Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (d) Signiﬁ cant accounting judgements, estimates and assumptions (continued) The key estimates and assumptions that have a signiﬁ cant 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 indeﬁ nite useful lives are allocated. The assumptions used in this estimation of recoverable amount and the carrying amount of goodwill and intangibles with indeﬁ nite 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 24. (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. All currency exchange differences in the consolidated ﬁ nancial report are taken to the income statement. Derivative ﬁ nancial instruments The Company uses derivative ﬁ nancial instruments such as foreign currency contracts to hedge its risks associated with foreign currency ﬂ uctuations. Such derivative ﬁ nancial 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 proﬁ les. For derivatives that do not qualify for hedge accounting, any gains or losses arising from changes in fair value are taken directly to net proﬁ t or loss for the reporting period. Translation of ﬁ nancial reports of overseas operations Both the functional and the presentation currency of Infomedia Ltd and its Australian subsidiaries is Australian dollars ($A). 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. 33 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Foreign currencies (continued) The functional currencies of the overseas subsidiaries are as follows: IFM Europe Ltd IFM Germany GmbH Euros 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. (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 ﬂ ow 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 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 identiﬁ ed. (h) Investments and other ﬁ nancial assets Financial assets in the scope of AASB139 Financial Instruments: Recognition and Measurement are classiﬁ ed as either ﬁ nancial assets at fair value through proﬁ t 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 ﬁ nancial assets with ﬁ xed 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 proﬁ t or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Investments in Subsidiaries Investments in subsidiaries are recorded at cost. infomedia.com.au 34 Annual Report Notes to the Financial Statements 30 June 2007 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: (cid:129) Raw materials – purchase cost on a ﬁ rst-in-ﬁ rst-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 identiﬁ able 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 beneﬁ t 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: (cid:129) represents the lowest level within the Company at which the goodwill is monitored for internal management purposes; and (cid:129) is not larger than a segment based on either the Company’s primary or the Company’s secondary reporting format determined in accordance with AASB114 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. (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 35 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (k) Intangible assets (continued) 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 proﬁ ts in the year in which the expenditure is incurred. The useful lives of intangible assets are assessed to be either ﬁ nite or indeﬁ nite. Intangible assets with ﬁ nite 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 ﬁ nite useful life is reviewed at least at each ﬁ nancial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic beneﬁ ts 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 ﬁ nite lives is recognised in proﬁ t or loss in the expense category consistent with the function of the intangible asset. Intangible assets with indeﬁ nite 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 indeﬁ nite life is reviewed each reporting period to determine whether indeﬁ nite life assessment continues to be supportable. If not, the change in the useful life assessment from indeﬁ nite to ﬁ nite 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 beneﬁ ts, 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 beneﬁ ts from the related project commencing from the commercial release of the 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 proﬁ t or loss when the asset is derecognised. (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 infomedia.com.au 36 Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (l) Impairment of assets (continued) 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 inﬂ ows 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 ﬂ ows are discounted to their present value using a pre-tax discount rate that reﬂ ects current market assessments of the time value of money and the risks speciﬁ c 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 proﬁ t 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. Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows: Major depreciation periods are: 2007 2006 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 37 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (m) Property, plant and equipment (continued) The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each ﬁ nancial 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 ﬂ ows are discounted to their present value using a pre-tax discount rate that reﬂ ects current market assessments of the time value of money and the risks speciﬁ c to the asset. For an asset that does not generate largely independent cash inﬂ ows, 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 beneﬁ ts 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 proﬁ t 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 fulﬁ lment of the arrangement is dependent on the use of a speciﬁ c asset or assets and the arrangement conveys a right to use the asset. (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 beneﬁ ts of ownership of the leased asset are classiﬁ ed 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). infomedia.com.au 38 Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (o) Trade and other payables 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 ﬁ nancial 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. (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 outﬂ ow of resources embodying economic beneﬁ ts 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 ﬂ ows at a pre-tax rate that reﬂ ects current market assessments of the time value of money and, where appropriate, the risks speciﬁ c to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost. (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. Borrowing costs are recognised as an expense when incurred. (s) Contributed equity Ordinary shares are classiﬁ ed 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. 39 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (t) Revenue recognition Revenue is recognised to the extent that it is probable that the economic beneﬁ ts will ﬂ ow to the entity and the revenue can be reliably measured. The following speciﬁ c 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. 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 ﬁ nancial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except: (cid:129) 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 proﬁ t nor taxable proﬁ t or loss; or (cid:129) 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 that taxable proﬁ t will be available against which the deductible temporary infomedia.com.au 40 Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (v) Income tax (continued) differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except: (cid:129) 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 proﬁ t nor taxable proﬁ t or loss; or (cid:129) 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 proﬁ t 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 sufﬁ cient taxable proﬁ t 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 proﬁ t 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 proﬁ t or loss. 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. The tax consolidated current tax liability and other deferred tax assets are required to be allocated to the members of the tax consolidated group in accordance with UIG 1052. The group uses a group allocation method for this purpose where the allocated current tax payable, deferred tax assets and other tax credits for each member of the tax consolidated group are determined as if the company is a stand-alone taxpayer but modiﬁ ed as necessary to recognise membership of a tax consolidated group. Recognition of amounts allocated to members of the tax consolidated group has regard to the tax consolidated group’s future tax proﬁ ts. (w) Other taxes Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST) except: (cid:129) 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 (cid:129) 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. 41 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (w) Other taxes (continued) Cash ﬂ ows are included in the cash ﬂ ow statement on a gross basis and the GST component of cash ﬂ ows arising from investing and ﬁ nancing activities, which is recoverable from, or payable to, the taxation authority is classiﬁ ed as operating cash ﬂ ows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. (x) Employee leave beneﬁ ts (i) Wages, salaries and annual leave Liabilities for wages and salaries, including non-monetary beneﬁ ts, 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 beneﬁ ts 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 ﬂ ows. (y) Share based payment transactions The Company provides beneﬁ ts 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 beneﬁ ts: (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’). infomedia.com.au 42 Annual Report Notes to the Financial Statements 30 June 2007 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (y) Share based payment transactions (continued) The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulﬁ lled, 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 reﬂ ects (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 modiﬁ ed, as a minimum an expense is recognised as if the terms had not been modiﬁ ed. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modiﬁ cation, as measured at the date of modiﬁ cation. 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 modiﬁ cation of the original option, as described in the previous paragraph. The dilutive effect, if any, of outstanding options is reﬂ ected as additional share dilution in the computation of earnings per share. (z) Earnings per share Basic earnings per share is determined by dividing the proﬁ t attributed to members of the parent after related income tax expense by the weighted average number of ordinary shares outstanding during the ﬁ nancial year. Diluted earnings per share is calculated as net proﬁ t attributable to members, adjusted for: (cid:129) cost of servicing equity (other than dividends); (cid:129) the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and (cid:129) 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. 43 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 Notes CONSOLIDATED INFOMEDIA LTD 3.REVENUE AND EXPENSES (i) Cost of sales Direct wages Other Total cost of sales (ii) Other income Net gain on disposal of property, plant and equipment including property held for resale Unrealised gain on forward foreign currency exchange contracts Fair value change on derivatives Total other income (iii) Employee beneﬁ t expense Salaries and wages (including on-costs) 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 3(vi) 31 2007 $’000 11,642 5,806 17,448 - - - - 8,327 47 8,374 - 180 1,140 42 219 1,581 744 1,167 1,911 3,492 2006 $’000 10,922 6,550 17,472 2,432 231 229 2,892 7,758 251 8,009 333 531 1,135 55 389 2,443 283 629 912 3,355 2007 $’000 6,015 5,091 11,106 - - - - 6,970 47 7,017 - 121 993 26 219 1,359 681 976 1,657 3,016 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 infomedia.com.au 44 Annual Report Notes to the Financial Statements 30 June 2007 Notes CONSOLIDATED INFOMEDIA LTD 3.REVENUE AND EXPENSES (continued) (v) Research and development costs Total research and development costs incurred during the period Less: development costs deferred Net research and development costs expensed (vi) Proﬁ t on sale of assets Gross proceeds from the sale of property, plant and equipment 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 Net book value of assets disposed Gross proﬁ t on sale of assets Non-cancellable surplus lease space and other non-recoverable lease incentives on corporate headquarters Net proﬁ t on sale of assets 13 12 12 12 12 2007 $’000 5,182 (3,235) 1,947 - - - - - - - - - - - 2006 $’000 4,510 (2,221) 2,289 23,000 (500) 22,500 (16,644) (1,309) (29) (218) (18,200) 4,300 (1,868) 2,432 2007 $’000 2006 $’000 4,629 (2,682) 1,947 - - - - - - - - - - - 3,680 (1,424) 2,256 1,750 - 1,750 - (1,309) (29) (218) (1,556) 194 - 194 45 infomedia.com.au Annual Report Notes to the Financial Statements CONSOLIDATED INFOMEDIA LTD 2007 $’000 2006 $’000 2007 $’000 2006 $’000 4,853 (84) (315) 985 5,439 20,733 6,220 (84) (315) (388) 145 (139) 5,439 5,469 (327) - 1,526 6,668 24,814 7,444 (327) - (660) 211 - 6,668 4,497 (118) - 1,119 5,498 19,995 5,999 (118) - (347) 138 (174) 5,498 3,799 (225) - 1,292 4,866 18,566 5,570 (225) - (601) 122 - 4,866 30 June 2007 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 Adjustments in respect of capital gains 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% (2006: 30%) Adjustments in respect of current income tax of previous years Adjustments in respect of capital gains tax of previous years Additional research and development deduction Expenditure not allowable for income tax purposes Other Income tax expense reported in the income statement 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. 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. Members of the tax consolidated group have also entered into a tax funding agreement. The tax funding agreement provides for the funding of allocated tax liabilities, tax losses and foreign tax credits for the current period based on recognition, applying the recognition criteria set out in the accounting policy for 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 Annual Report Notes to the Financial Statements 30 June 2007 4. INCOME TAX (CONTINUED) Deferred income tax Deferred income tax at 30 June relates to the following: CONSOLIDATED Deferred tax liabilities Prepayments Derivatives Property plant and equipment Deferred development costs Intellectual property Currency exchange 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 expense PARENT Deferred tax liabilities Prepayments Derivatives Property plant and equipment Deferred development costs Intellectual property Currency exchange Deferred tax assets Allowance for doubtful debts Copyright intellectual property Other payables Employee entitlement provisions Other provisions Currency exchange Deferred tax expense 47 infomedia.com.au BALANCE SHEET INCOME STATEMENT 2007 $’000 2006 $’000 2007 $’000 2006 $’000 (1) - (120) (2,195) (384) - (2,700) 77 - 116 551 565 134 (8) (69) (150) (1,574) (243) (18) (2,062) 75 176 97 710 732 - 1,443 1,790 (2) - (120) (1,847) (384) - (2,353) 75 - 107 389 565 114 (5) (69) (150) (1,335) - (17) (1,576) 69 176 91 524 732 - 1,250 1,592 (7) (69) (30) 621 141 (18) (2) 176 (19) 159 167 (134) 985 (3) (69) (30) 512 384 (17) (6) 176 (16) 135 167 (114) 1,119 8 69 150 477 2 18 (94) 176 15 47 681 (23) 1,526 5 69 150 238 - 17 (100) 176 28 51 681 (23) 1,292 Annual Report Notes to the Financial Statements 30 June 2007 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 CONSOLIDATED 2007 $’000 15,294 2006 $’000 18,146 Number of shares Number of shares 325,693,490 325,456,844 - 899,919 14,729 132,313 Adjusted weighted average number of ordinary shares for diluted earnings per share 326,593,409 325,603,886 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 Annual Report Notes to the Financial Statements 30 June 2007 CONSOLIDATED INFOMEDIA LTD 6. DIVIDENDS PROPOSED OR PAID (a) Dividends paid during the year Franked interim dividend – 1.9 cents (2006: 1.9 cents) per share Prior year ﬁ nal franked dividend – 2.1 cents (2006: 1.7 cents) per share Special dividend – 3.5 cents (2006: 3.5 cents) per share Total dividends paid during the year (b) Dividends proposed and not recognised as a liability Final franked dividend – 2.1 cents (2006: 2.1 cents) per share Special franked dividend – nil (2006: 3.5 cents) 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 taxipayable as iiiat the end of the ﬁ nancial year The tax rate at which paid dividends have been franked is 30% (2006: 30%). Dividends proposed will be franked at the rate of 30% (2006: 30%). 7. TRADE AND OTHER RECEIVABLES (CURRENT) Trade debtors Allowance for doubtful debts Other debtors 2007 $’000 6,194 6,836 11,391 24,421 6,845 - 6,845 2006 $’000 6,184 5,533 11,391 23,108 6,836 11,391 18,227 6,850 (487) 6,363 581 6,944 6,707 (480) 6,227 524 6,751 2007 $’000 2006 $’000 6,194 6,836 11,391 24,421 6,845 - 6,845 1,135 2,228 3,363 3,553 (250) 3,303 515 3,818 6,184 5,533 11,391 23,108 6,836 11,391 18,227 6,362 3,126 9,488 4,180 (228) 3,952 457 4,409 (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. 49 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 Notes CONSOLIDATED INFOMEDIA LTD 2007 $’000 2006 $’000 2007 $’000 2006 $’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 11 Other receivables 11. INTERESTS IN CONTROLLED ENTITIES Name Country of incorporation Percentage of equity interest held by the Company (directly or indirectly) IFM Europe Ltd – ordinary shares United Kingdom Infomedia Investments Pty Ltd 2007 % 100 – ordinary shares – $2 only Australia 100 Datateck Publishing Pty Ltd – ordinary shares – $4 only Australia 100 AutoConsulting Pty Ltd – ordinary shares – $1 only Australia 100 IFM North America Inc – ordinary shares United States of America IFM Germany GmbH* Germany 100 100 2006 % 100 100 100 100 100 - * Investment is held by IFM Europe Ltd. 52 52 - - - 335 335 84 84 - - - 804 804 52 52 1,623 1,623 248 335 583 71 71 451 451 248 804 1,052 247 247 - - - 1 - - - - 1 - 248 248 infomedia.com.au 50 Annual Report Notes to the Financial Statements 30 June 2007 CONSOLIDATED INFOMEDIA LTD 2007 $’000 944 (380) 564 5,675 (4,075) 1,600 266 (93) 173 2,800 (2,320) 480 9,685 (6,868) 2,817 2006 $’000 1,286 (369) 917 6,925 (4,616) 2,309 334 (119) 215 2,597 (1,972) 625 11,142 (7,076) 4,066 2007 $’000 515 (101) 414 4,583 (3,321) 1,262 123 (57) 66 2,800 (2,320) 480 8,021 (5,799) 2,222 2006 $’000 915 (148) 767 5,834 (3,943) 1,891 212 (93) 119 2,597 (1,972) 625 9,558 (6,156) 3,402 12. PROPERTY, PLANT AND EQUIPMENT Leasehold improvements At cost Accumulated amortisation Ofﬁ ce equipment At cost Accumulated depreciation Furniture and ﬁ ttings At cost Accumulated depreciation Plant and equipment At cost Accumulated depreciation Total property, plant and equipment At cost Accumulated depreciation and amortisation Total written down amount 51 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 CONSOLIDATED INFOMEDIA LTD 2007 $’000 2006 $’000 2007 $’000 2006 $’000 12. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) (b) Reconciliation of property, plant and equipment carrying values Freehold land and buildings Carrying amount – opening balance Disposals Depreciation Carrying amount – closing balance Leasehold Improvements Carrying amount – opening balance Additions Disposals Depreciation Carrying amount – closing balance Ofﬁ ce equipment Carrying amount – opening balance Additions Disposals 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 Depreciation Carrying amount – closing balance - - - - 917 81 (254) (180) 564 2,309 686 (255) (1,140) 1,600 215 31 (31) (42) 173 625 74 (219) 480 16,976 (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 - - - - 767 15 (247) (121) 414 1,891 602 (238) (993) 1,262 119 - (27) (26) 66 625 74 (219) 480 - - - - 2,039 524 (1,309) (487) 767 1,957 969 (29) (1,006) 1,891 378 3 (218) (44) 119 889 125 (389) 625 infomedia.com.au 52 13. INTANGIBLE ASSETS AND GOODWILL At 1 July 2006 Cost (gross carrying amount) Accumulated amortisation Net carrying amount Year ended 30 June 2007 At 1 July 2006, net of accumulated amortisation and impairment Disposals – Business Systems assets Other movements Amortisation At 30 June 2007, net of accumulated amortisation and impairment At 30 June 2007 Annual Report Notes to the Financial Statements 30 June 2007 CONSOLIDATED INFOMEDIA LTD Development costs1 Intellectual property2 Goodwill2 Total Development costs1 Intellectual property2 Goodwill2 Total $’000 $’000 $’000 $’000 $’000 $’000 $’000 $’000 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 Additions – internal development 3, 235 - - 3,235 5,249 3,289 8,837 17,375 - - (1,167) (950) (314) (744) (296) (1,246) - - (314) (1,911) 4,452 2,682 - - (976) 2,276 6,026 12,754 - - (314) (681) - - - - 2,682 - (314) (1,657) 7,317 1,281 8,541 17,139 6,158 1,281 6,026 13,465 Cost (gross carrying amount) Accumulated amortisation Net carrying amount 9,464 (2,147) 7,317 2,096 (815) 1,281 8,541 - 8,541 20,101 (2,962) 17,139 8,114 (1,956) 6,158 2,096 (815) 1,281 6,026 - 6,026 16,236 (2,771) 13,465 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 commencing from the commercial release of the project. 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. 53 infomedia.com.au Annual Report Notes to the Financial Statements CONSOLIDATED INFOMEDIA LTD Development costs Intellectual property Goodwill $’000 $’000 $’000 Total $’000 Development costs Intellectual property Goodwill $’000 $’000 $’000 Total $’000 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) 5,249 3,289 8,837 17,375 4,452 2,276 6,026 12,754 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 13. INTANGIBLE ASSETS AND GOODWILL (CONTINUED) 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 amortisation and impairment Additions – internal development Purchased intellectual property Amortisation At 30 June 2006, net of accumulated amortisation and impairment At 30 June 2006 Cost (gross carrying amount) Accumulated amortisation Net carrying amount infomedia.com.au 54 Annual Report Notes to the Financial Statements 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: (cid:129) Electronic Catalogue and Publishing cash generating unit; (cid:129) 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 pre-tax discount rate applied to cash ﬂ ow projections is 14% (2006: 14%), covering a ﬁ ve year period. The discount rates reﬂ ect management’s estimate of the time value of money and the risks speciﬁ c to the unit. In determining the discount rate for the unit, regard has been given to the yield on a government bond. Business Systems (NOVA product group) cash generating unit There is no carrying value at 30 June 2007 for Business Systems due to its sale on 1 December 2006. For the 2006 ﬁ nancial year, 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 pre-tax discount rate applied to cash ﬂ ow projections was 14% covering a ﬁ ve year period. Carrying amount of goodwill allocated to each of the cash generating units is as follows: Catalogue and Publishing Business Systems (NOVA product group) Total CONSOLIDATED Carrying amount of goodwill PARENT 2007 $’000 8,541 2006 $’000 8,541 Carrying amount of goodwill 6,026 6,026 Key assumptions used in value in use calculations for 30 June 2007 and 30 June 2006 2007 $’000 - - 2006 $’000 296 2007 $’000 8,541 2006 $’000 8,837 - 6,026 6,026 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: (cid:129) the Company will continue to have access to the data supply from automakers over the budgeted period; (cid:129) the Company will not experience any substantial adverse movements in currency exchange rates; and (cid:129) the Company’s research and development program will ensure that the current suite of products remains leading edge. With regard to the assessment of the value in use of the Electronic Catalogue and Publishing cash generating unit, management believes that no reasonably possible change in any of the above key assumptions would cause the carrying value of the unit to materially exceed its recoverable amount. 55 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 Notes CONSOLIDATED INFOMEDIA LTD 15. TRADE AND OTHER PAYABLES (CURRENT) Trade creditors Other creditors 15(a) 2007 $’000 443 2,039 2,482 2006 $’000 1,131 2,843 3,974 2007 $’000 139 1,613 1,752 2006 $’000 565 2,423 2,988 (a) Trade creditors are non-interest bearing and are normally settled on 30 day terms. 16. INTEREST BEARING LOANS AND BORROWINGS iiiii(CURRENT) iiiii Bank loans (a) The 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), 23(c) and 31). 16(a) - - 500 500 - - 500 500 17. PROVISIONS (CURRENT) Employee beneﬁ ts Provision for non-cancellable surplus lease space and other lease incentives 19(a) 18. DEFERRED REVENUE (CURRENT) Revenue in advance 1,790 494 2,284 506 506 2,063 648 2,711 816 816 1,118 494 1,612 254 254 1,353 648 2,001 405 405 infomedia.com.au 56 Annual Report Notes to the Financial Statements 30 June 2007 Notes CONSOLIDATED INFOMEDIA LTD 19. PROVISIONS (NON-CURRENT) Employee beneﬁ ts Provision for non-cancellable surplus lease space and other lease incentives Make good provision 19(a) 19(b) (a) Movement in non-cancellable surplus lease space and other lease incentives provision: Carrying amount at the beginning of the year Arising during the year Utilised Discount rate adjustment Carrying amount at the end of the year Current Non-current 17 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 estimated pursuant to the Company’s obligation to restore leased premises to original condition at the end of the lease term. 2007 $’000 315 891 500 1,706 1,942 - (688) 131 1,385 494 891 1,385 500 - 500 2006 $’000 545 1,294 500 2,339 178 1,868 (104) - 1,942 648 1,294 1,942 - 500 500 2007 $’000 177 891 500 1,568 1,942 - (688) 131 1,385 494 891 1,385 500 - 500 2006 $’000 393 1,294 500 2,187 178 1,868 (104) - 1,942 648 1,294 1,942 - 500 500 57 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 CONSOLIDATED INFOMEDIA LTD 20. CONTRIBUTED EQUITY AND RESERVES Ordinary shares 2007 $’000 17,738 17,738 2006 $’000 17,488 17,488 2007 $’000 17,738 17,738 2006 $’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 2005 Employee Share Plan issuance At 30 June 2006 Employee options exercised At 30 June 2007 Employee Option Plan Notes Number $’000 24 24 325,156,205 315,368 325,471,573 499,999 325,971,572 17,488 - 17,488 250 17,738 There were no options issued during the current year. A total of 1,700,000 options were issued to eligible employees during the prior year at an average exercise price of $0.50. Refer to Note 24. 30 June 2007 Movement in reserves At 1 July 2005 Currency translation differences Share based payments At 30 June 2006 Currency translation differences Share based payments At 30 June 2007 Nature and purpose of reserves Employee equity beneﬁ ts reserve CONSOLIDATED Employee equity beneﬁ ts reserve Foreign currency translation reserve $’000 $’000 725 - 251 976 - 47 1,023 (19) 53 - 34 (79) - (45) Total $’000 706 53 251 1,010 (79) 47 978 INFOMEDIA LTD Employee equity beneﬁ ts reserve $’000 725 - 251 976 - 47 1,023 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 24 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 Annual Report Notes to the Financial Statements 30 June 2007 CONSOLIDATED INFOMEDIA LTD 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 Net (proﬁ t)/loss on sale of business 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 2007 $’000 15,294 1,581 1,911 47 (15) - 415 32 97 348 (3,235) (1,168) 8 (505) (270) (1,180) 639 45 14,044 4,404 11,286 15,690 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 2007 $’000 14,497 1,359 1,657 47 76 - (1,279) 20 144 341 (2,682) (917) 23 (485) (270) 476 777 (151) 13,633 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 3,116 10,428 13,544 25,079 10 25,089 (c) Financing facilities available At reporting date, the following ﬁ nancing facilities had been negotiated and were available: Total facilities USD13 million multi-currency cash advance facility 15,350 17,580 15,350 17,580 Facilities used at reporting date Bank loans Facilities unused at reporting date Bank loans - 500 - 500 15,350 17,080 15,350 17,080 59 infomedia.com.au Annual Report Notes to the Financial Statements 30 June 2007 22. SALE OF BUSINESS CONSOLIDATED INFOMEDIA LTD 2007 $’000 2006 $’000 2007 $’000 2006 $’000 On 1 December 2006, Infomedia sold its Business Systems Division to an unrelated third party. The components of the disposal were: Gross consideration Net working capital adjustments Cash proceeds Net book value of assets and liabilities disposed: – Plant and equipment – Intangible assets – Other net liabilities Total net assets disposed Net proﬁ t on sale of business 23. COMMITMENTS & 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 1,500 (331) 1,169 540 1,245 (631) 1,154 15 1,540 4,093 5,633 - - - - - - - - 150 35 185 512 - (251) 261 (76) - - - - - - - - 1,657 4,483 6,140 1,098 3,463 4,561 1,199 3,453 4,652 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). infomedia.com.au 60 Annual Report Notes to the Financial Statements 24. 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 2007 2006 Number of options Weighted average exercise price Number of options Weighted average exercise price Balance at beginning of year – granted – forfeited – exercised Balance at end of year 24(a) 24(b) 24(c) 24(d) 1,950,000 - (150,000) (499,999) 1,300,001 $0.52 - $0.75 $0.50 $0.51 727,000 1,700,000 (477,000) - 1,950,000 $0.73 $0.50 $0.73 - $0.52 (a) Options held at the beginning of the year The following table summarises information about options held by employees at 1 July 2006: Number of options 150,000 100,000 250,000 1,000,000 250,000 200,000 Grant date 24/5/2004 20/9/2004 8/7/2005 27/10/2005 6/10/2005 16/12/2005 Earliest vesting date 24/5/2005 20/9/2005 5/1/2006 5/1/2006 5/1/2006 Expiry date 31/5/2007 20/9/2007 5/2/2008 5/2/2008 5/2/2008 16/12/2006 16/1/2009 Weighted average exercise price $0.75 $0.67 $0.50 $0.50 $0.48 $0.49 (b) Options granted during the year There were no options granted during the year ended 30 June 2007. (c) Options exercised during the year The following table summarises information about options exercised by employees during the year: Number of options exercised 499,999 Weighted average exercise price Weighted average share price at date of exercise $0.50 $0.79 61 infomedia.com.au Annual Report Notes to the Financial Statements 24. SHARE BASED PAYMENT PLANS (CONTINUED) (d) Options held at the end of the year The following table summarises information about options held by employees at 30 June 2007: Number of options Grant date Earliest vesting date Expiry date 100,000 83,334 666,667 250,000 200,000 20/9/2004 8/7/2005 27/10/2005 6/10/2005 16/12/2005 20/9/2005 20/9/2007 5/1/2006 5/1/2006 5/1/2006 5/2/2008 5/2/2008 5/2/2008 16/12/2006 16/1/2009 Weighted average exercise price $0.67 $0.50 $0.50 $0.48 $0.49 (e) Other details regarding options The weighted average fair value of options granted during the prior year was $0.087 (there were no options granted during the current year). 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 25. PENSIONS AND OTHER POST-EMPLOYMENT PLANS Superannuation Commitments 2007 2006 n/a n/a n/a n/a n/a 6.8% 37.9% 5.4% $0.50 $0.50 Contributions are made by the Company in accordance with the relevant statutory requirements. Contributions by the Company for the year ended 30 June 2007 were 9% (2006: 9%) of employees’ wages and salaries, which are legally enforceable in Australia. The superannuation plans provide accumulation beneﬁ ts. infomedia.com.au 62 Annual Report Notes to the Financial Statements 26. KEY MANAGEMENT PERSONNEL DISCLOSURES Infomedia Ltd has adopted the option available under the Corporation Regulations 2M.6.04 (as amended by the Corporation Amendments Regulation 2006 (No. 4)) which permits listed companies to transfer the remuneration disclosures required under AASB124 para Aus 25.4 – Aus 25.7.2 out of the Financial Report and into the Remuneration Report. The transferred AASB124 disclosures are subject to audit. (a) Details of Key Management Personnel (i) Directors Richard Graham Gary Martin Myer Herszberg Chairman Chief Executive Ofﬁ cer Non-executive Director Geoffrey Henderson (resigned 28 February 2007) Non-executive Director Frances Hernon Andrew Moffat (ii) Executives Andrew Pattinson Peter Adams Mark Kujacznski Michael Roach Nick Georges Non-executive Director Non-executive Director Managing Director – IFM Europe Ltd Chief Financial Ofﬁ cer Vice President – IFM North America Inc General Manager – Electronic Catalogue and Data Management Company Secretary and Legal Counsel (b) Compensation of Key Management Personnel (i) Compensation by Category: Key Management Personnel CONSOLIDATED INFOMEDIA LTD 2007 $ 2006 $ 2007 $ 2006 $ 1,868,431 1,707,944 1,101,169 1,040,551 129,314 15,442 - 79,839 123,725 15,130 - 92,310 86,179 7,417 - 72,507 82,408 7,479 - 84,024 2,093,026 1,939,109 1,267,272 1,214,462 Short term Post employment Other long term Termination beneﬁ ts Share based payments 63 infomedia.com.au Annual Report Notes to the Financial Statements 26. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED) (c) Shareholdings of Key Management Personnel 30 June 2007 Number of shares held in Infomedia Ltd Balance 30 June 2006 Granted as compensation On exercise of options Net change other Balance 30 June 2007 Directors Richard Graham Myer Herszberg Gary Martin Frances Hernon Executives Andrew Pattinson Peter Adams Nick Georges Michael Roach Total 30 June 2006 Number of shares held in Infomedia Ltd 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 2,447,567 11,421 24,421 18,721 144,207,046 - - - - - - - - - - - 333,333 - - - 102,204,060 (16,000,000) 23,421,599 - - - 407,590 5,000 2,447,567 100,000 24,421 18,721 166,666 (78,087) - - - - 499,999 (16,078,087) 128,628,958 Balance 1 July 2005 Granted as compensation On exercise of options Net change other Balance 30 June 2006 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 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. (d) 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. (e) 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 of 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. infomedia.com.au 64 Annual Report Notes to the Financial Statements 26. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED) (e) Other transactions and balances with Key Management Personnel (including related entities) (continued) (ii) Infomedia Ltd rented ofﬁ ce space from Richard Graham. The total rent payments for the year ended 30 June 2007 of $79,209 (2006: $176,898) were on commercial terms. (iii) Infomedia Ltd received ﬁ nancial consulting services from Cowoso Capital Pty Limited, a company of which Andrew Moffat is a Director. The total consulting services paid for the year ended 30 June 2007 of $57,500 (2006: $12,500) were on commercial terms. 30 June 2007 CONSOLIDATED INFOMEDIA LTD 2007 $ 2006 $ 2007 $ 2006 $ 27. AUDITOR’S REMUNERATION Amounts received or due and receivable by the auditor of Infomedia Ltd for: – an audit or review of the ﬁ nancial report of the entity and any other entity in the consolidated entity 191,900 183,350 165,850 158,350 – other services in relation to the entity and any other entity in the consolidated entity - - - 191,900 183,350 165,850 - 158,350 28. RELATED PARTY DISCLOSURES Ultimate parent Infomedia Ltd is the ultimate Australian parent company. Wholly-owned group transactions (a) An unsecured, interest free loan of $5,002 (2006: $Nil) remains owing from IFM Germany GmbH to Infomedia Ltd. (b) An unsecured, interest free loan of $3,131,065 (2006: $2,793,213) remains owing to Infomedia Investments Pty Limited from Infomedia Ltd. (c) An unsecured, interest free loan of $2,767,113 (2006: $2,126,248) 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 $386,219 (2006: $987,913) 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 $59,810 (2006: $1,013,333) remains owing from IFM Europe Ltd to Infomedia Ltd. (f) An unsecured, interest free loan of $1,535,477 (2006: $1,143,345) remains owing from IFM North America Inc. to Infomedia Ltd. (g) During the year a management fee of $480,000 (2006: $480,000) was paid to Datateck Publishing Pty Limited by Infomedia Ltd. (h) During the year, Infomedia Ltd received $13,117,364 (2006: $7,004,846) from IFM Europe Ltd for intra-group sales. (i) During the year, Datateck Publishing Pty Limited received $746,110 (2006: $279,441) from IFM Europe Ltd for intra-group sales. (j) During the year, IFM Europe Ltd received $565,934 (2006: $1,571,822) from Infomedia Ltd for intra-group distribution services. (k) During the year, Infomedia Ltd received $10,363,329 (2006: $8,827,526) from IFM North America Inc. for intra-group sales. (l) During the year, IFM North America Inc. received $554,699 (2006: $813,558) from Infomedia Ltd for intra-group distribution services. (m) During the year, IFM Europe paid $398,384 (2006: $nil) to IFM Germany GmbH for intra-group distribution services. Entity with deemed signiﬁ cant inﬂ uence over the Company Wiser Equity Pty Limited, a company of which Richard Graham is a Director, owns 30.8% of the ordinary shares in Infomedia Ltd (2006: 30.8%). 65 infomedia.com.au Annual Report Notes to the Financial Statements 29. SEGMENT INFORMATION (a) Primary segment 30 June 2007 Business Segments REVENUE Sales revenue Rental income Total segment revenue Unallocated revenue: Finance revenue Total consolidated revenue Segment result Unallocated items: Finance revenue Finance costs Notes Catalogue and Publishing Business Systems* $’000 52,990 - 52,990 $’000 1,576 - 1,576 20,019 57 Consolidated proﬁ t before income tax Income tax expense 4 Consolidated proﬁ t after income tax ASSETS Segment assets Unallocated assets: Cash Total assets LIABILITIES Segment liabilities Other segment information: Capital expenditure Depreciation Amortisation 29,162 11,950 873 1,479 1,848 3(iv) 3(iv) - - - 102 63 Total $’000 54,566 - 54,566 791 55,357 20,076 791 (134) 20,733 (5,439) 15,294 29,162 15,690 44,852 11,950 873 1,581 1,911 * The Business Systems Division was sold on 1 December 2006 for $1,500,000 (refer Note 22). As a result, the segment result shown above represents ﬁ ve months of trading only. infomedia.com.au 66 Annual Report Notes to the Financial Statements 29. SEGMENT INFORMATION (CONTINUED) (a) Primary segment (continued) 30 June 2006 Business Segments REVENUE Sales revenue Rental income Total segment revenue Unallocated revenue: Finance revenue Total consolidated revenue Segment result Unallocated items: Finance revenue Finance costs Notes Catalogue and Publishing Business Systems $’000 51,635 646 52,281 $’000 3,942 - 3,942 24,634 109 Consolidated proﬁ t before income tax Income tax expense 4 Consolidated proﬁ t after income tax 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 67 infomedia.com.au 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) 103 294 150 1,625 2,443 912 Annual Report Notes to the Financial Statements 29. SEGMENT INFORMATION (CONTINUED) (b) Secondary Segment 30 June 2007 Geographical segments REVENUE Segment revenue Unallocated revenue: Finance revenue Total consolidated revenue ASSETS Segment assets Unallocated assets: Cash Total assets Capital expenditure 30 June 2006 Geographical segments REVENUE Segment revenue Unallocated revenue: Finance revenue Rental income Total consolidated revenue ASSETS Segment assets Unallocated assets: Cash Total assets Capital expenditure Europe $’000 North America Asia Paciﬁ c Latin and South America $’000 $’000 $’000 Total $’000 20,511 16,343 13,870 3,842 54,566 1,345 1,480 26,337 8 4 861 - - Europe $’000 North America Asia Paciﬁ c $’000 $’000 Latin & South America $’000 18,437 17,876 15,779 3,485 556 1,514 29,573 19 211 1,395 - - 791 55,357 29,162 15,690 44,852 873 Total $’000 55,577 268 646 56,491 31,643 26,021 57,664 1,625 (c) 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. infomedia.com.au 68 Annual Report Notes to the Financial Statements 29. SEGMENT INFORMATION (CONTINUED) (d) 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. The geographical segment revenue is classiﬁ ed according to customer destination as opposed to the billing source. This classiﬁ cation represents a change in presentation from the prior years with the 2006 comparative ﬁ gures restated accordingly. The change in classiﬁ cation has been driven by enhancements to internal management reporting. Geographical assets have been classiﬁ ed according to location of the asset. The Asia Paciﬁ c disclosures include corporate assets. 30. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Company’s principal ﬁ nancial instruments, other than derivatives, comprise bank loans, cash and short term deposits. The main purpose of these ﬁ nancial instruments is to raise ﬁ nance for the Company’s operations. The Company has various other ﬁ nancial 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 ﬁ nancial instruments shall be undertaken. The main risks arising from the Company’s ﬁ nancial instruments are cash ﬂ ow interest rate risk, liquidity risk, foreign currency risk and credit risk. Details of the signiﬁ cant 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 ﬁ nancial asset, ﬁ nancial liability and equity instrument are disclosed in Note 2 to the ﬁ nancial statements. Cash ﬂ ow 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 ﬂ oating interest rate. The Company’s policy is to accept the ﬂ oating 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 ﬂ oating 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 ﬂ ow 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 Euro. The Company seeks to mitigate exposure to movements in these currencies by entering into forward exchange derivative contracts periodically. As a result of the Company’s recent investment in both its European and its United States subsidiaries, the Company’s balance sheet can be affected by movements in both the Euro and the 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 receivable 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 signiﬁ cant. 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 ﬁ nancial assets of the Company, which comprise cash and cash equivalents, available-for-sale ﬁ nancial 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 ﬂ ows from operations. 69 infomedia.com.au Annual Report Notes to the Financial Statements 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 (non-current) Financial liabilities Trade payables Interest bearing loans and borrowings Off balance sheet Contingencies PARENT Financial assets Cash and cash equivalents Trade receivables Forward currency contracts Intercompany Other ﬁ nancial assets (non-current)1 Financial liabilities Trade payables Interest bearing loans and borrowings Off balance sheet Contingencies Carrying amount Fair value 2007 $’000 15,690 6,363 - 335 2,482 - - 2006 $’000 26,021 6,227 229 804 3,974 500 2007 $’000 15,690 6,363 - 335 2,482 - 2006 $’000 26,021 6,227 229 804 3,974 500 - 700 700 Carrying amount Fair value 2007 $’000 13,544 3,303 - 1,623 583 1,752 - - 2006 $’000 25,089 3,952 229 451 1,052 2,988 500 2007 $’000 13,544 3,303 - 1,623 6,150 1,752 - 2006 $’000 25,089 3,952 229 451 5,901 2,988 500 - 700 700 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 70 Annual Report Notes to the Financial Statements 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 2007 CONSOLIDATED PARENT Less than one year Two to ﬁ ve years Greater than ﬁ ve years Less than one year Two to ﬁ ve years Greater than ﬁ ve years Weighted average effective interest rate % Weighted average effective interest rate % Floating rate $’000 $’000 $’000 $’000 $’000 $’000 Cash and cash equivalents Interest bearing liabilities 15,690 - - - - - 5.7 - 13,544 - Year ended 30 June 2006 CONSOLIDATED - - 5.7 - - - PARENT Less than one year Two to ﬁ ve years Greater than ﬁ ve years Less than one year Two to ﬁ ve years Greater than ﬁ ve years Weighted average effective interest rate % Weighted average effective interest rate % Floating rate Cash and cash equivalents Interest bearing liabilities $’000 $’000 $’000 $’000 $’000 $’000 26,021 (500) - - - - 5.7 6.3 25,089 (500) - - - - 5.7 6.3 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. Derivative contracts There were no derivative contracts on hand at 30 June 2007. The following table summarises the forward exchange contracts on hand at 30 June 2006: Maturity Company buys Company sells Exchange rate Company buys Company sells Exchange rate CONSOLIDATED PARENT Company sells United States Dollars (USD) 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 $A’000 1,392 2,087 - - $A’000 3,077 3,248 3,248 3,248 USD’000 1,000 1,500 - - E ’000 1,775 1,875 1,875 1,875 The mark to market valuation of these contracts at 30 June 2006 was $229,000. 32. SUBSEQUENT EVENTS 0.7186 0.7186 - - 0.5768 0.5773 0.5773 0.5773 $A’000 1,392 2,087 - - $A’000 3,077 3,248 3,248 3,248 USD’000 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 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. 71 infomedia.com.au Annual Report 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 ﬁ nancial statements and notes and all the additional disclosures included in the Directors’ Report designated as audited, of the Company and the consolidated entity are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Company’s and the consolidated entity’s ﬁ nancial position as at 30 June 2007 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 ﬁ nancial period ended 30 June 2007. On behalf of the Board Richard David Graham Chairman Sydney, 22 August 2007 infomedia.com.au 72 Independent audit report to members of Infomedia Ltd We have audited the accompanying ﬁ nancial report of Infomedia Ltd (the company) and the consolidated entity, which comprises the balance sheet as at 30 June 2007, and the income statement, statement of changes in equity and cash ﬂ ow statement for the year ended on that date, a summary of signiﬁ cant accounting policies, other explanatory notes and the Directors’ declaration. The company has disclosed information as required by paragraphs Aus 25.4 to Aus 25.7.2 of Accounting Standard 124 Related Party Disclosures (“remuneration disclosures”), under the heading “Remuneration Report” on pages 20 to 25 of the Directors’ Report, as permitted by Corporations Regulation 2M.6.04. Directors’ Responsibility for the Financial Report The Directors of the company are responsible for the preparation and fair presentation of the ﬁ nancial report in accordance with the Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the ﬁ nancial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 2, the Directors also state that the ﬁ nancial report, comprising the ﬁ nancial statements and notes complies, with International Financial Reporting Standards. The Directors are also responsible for the remuneration disclosures contained in the Directors’ Report. Auditor’s Responsibility Our responsibility is to express an opinion on the ﬁ nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the ﬁ nancial report is free from material misstatement and that the remuneration disclosures comply with Accounting Standard AASB 124 Related Party Disclosures. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁ nancial report. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the ﬁ nancial report, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the preparation and fair presentation of the ﬁ nancial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the ﬁ nancial report. We believe that the audit evidence we have obtained is sufﬁ cient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit we have met the independence requirements of 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. Auditor’s Opinion In our opinion: 1. the ﬁ nancial report of Infomedia Ltd is in accordance with: (a) the Corporations Act 2001, including: (i) giving a true and fair view of the ﬁ nancial position of Infomedia Ltd and the consolidated entity at 30 June 2007 and of their performance for the year ended on that date; and (ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations); and (b) other mandatory ﬁ nancial reporting requirements in Australia. 2. the ﬁ nancial report also complies with International Financial Reporting Standards as disclosed in Note 2. 3. the remuneration disclosures that are contained on pages 20 to 25 of the Directors’ Report comply with Accounting Standard AASB 124 Related Party Disclosures. Ernst & Young Garry Wayling Partner Sydney, 22 August 2007 73 infomedia.com.au Liability limited by a scheme approved under Professional Standards Legislation. Annual Report Corporate Governance HOW TO READ THIS CORPORATE GOVERNANCE STATEMENT This Corporate Governance Statement is divided into the following sections: (cid:129) an introduction, providing an overview of Infomedia’s approach to corporate governance; (cid:129) changes to the composition of the Board of Directors and Committees during FY2007; (cid:129) a discussion of major corporate governance initiatives during the reporting period; (cid:129) a discussion of the major areas where Infomedia Ltd reports under the ‘if not, why not?’ obligation; and (cid:129) a subject based commentary on Infomedia Ltd’s approach to the ASX CorporateGovernance 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 reﬂ ect the actions taken by the Company since its last annual report. By way of background, the Board ﬁ rst began its consideration of the ASX Corporate Governance Council Guidelines during the course of the 2003 ﬁ nancial year. To aid the review process, the Board made initial adjustments to the structure of its Committees so that they comprised the Corporate Governance Committee, the Audit & Risk Committee and the Remuneration & Nomination Committee. Each Committee was 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 FY2007 for members of each of the Corporate Governance, Audit & Risk and Remuneration & Nomination Committees are set out in the Directors’ Report. The Board continues to endorse the ‘if not, why not?’ framework adopted by the ASX Corporate Governance Council. However, in the last quarter of FY2007, almost exactly three years after the Company initially began implementing relevant ASX CGC Recommendations, the Board requested that the Remuneration & Nomination Committee revisit the question of how the Company could best maintain its corporate governance practices in ways that are, given the level of implementation reached, pragmatic and appropriate to its size and available resources. These adjustments are discussed in more detail in the section headed ‘Changes to the Composition of the Board of Directors and Committees’ below. 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 were in place for the whole ﬁ nancial year. CHANGES TO THE COMPOSITION OF THE BOARD OF DIRECTORS AND COMMITTEES In early 2007 the Company announced that Mr Geoffrey Henderson had tendered notice of his intention to resign, due to overseas family commitments, as a Non-executive Director of the Board with effect from 28 February 2007. Mr Henderson had served on the Board of Directors since February 2003 and occupied several Board Committee positions, including Chairman of the Corporate Governance Committee. The Company then commenced searching for a suitably qualiﬁ ed replacement, and in the infomedia.com.au 74 Annual Report Corporate Governance interim, Mr Richard Graham was appointed as acting Chair of the Corporate Governance Committee. In June 2007, upon the recommendation of the Remuneration & Nomination Committee, the Board approved a number of changes to the structure, composition and responsibilities of the Board itself and its Committees. The Board canvassed various options regarding Board and Committee composition, function and responsibility. After some discussion, which focussed on the importance of the audit aspect of the Audit & Risk Committee’s work and which also noted the ﬁ rm establishment of the Company’s corporate governance charters, policies and practices, the option of amalgamating the Audit & Risk Committee and the Corporate Governance Committee emerged with strong support. The Board also approved the re-absorption of the remuneration and nomination functions, with the Board to utilise the support of Ms Frances Hernon as Lead Non-executive Director for all matters that formerly fell within the ambit of the Remuneration & Nomination Committee. To coincide with the Company’s ﬁ nancial year and reporting obligations, these changes took effect from 1 July 2007, with the exception of Ms Hernon’s appointment to the Audit & Risk Committee, which was effective from 25 June 2007. The re-named ‘Audit, Risk & Governance Committee’ comprises: (cid:129) Andrew Moffat (Chair); (cid:129) Myer Herszberg; and (cid:129) Frances Hernon. At that same June 2007 meeting, the Board also resolved to suspend its search for a suitably qualified replacement for Mr Henderson. Given their effective date, these changes will be the subject of further discussion in the FY2008 Corporate Governance Statement. 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 satisﬁ ed that the Company’s corporate governance practices are consistent with the spirit and intent of the ASX Corporate Governance Council Guidelines. The Company continued, as it had 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 reﬁ ned. Brieﬂ y, the process involves: (cid:129) 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; (cid:129) reporting the outcome of the sounding process to the Corporate Governance Committee, along with any recommendations; and 75 infomedia.com.au Annual Report Corporate Governance (cid:129) 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 website and including certain governance documents in employee induction packages). The Performance Evaluation and Remuneration Policy is currently being reviewed in accordance with this process. In a separate exercise, the Audit & Risk Committee and Board Charters are also in the process of being amended to reﬂ ect the changes to the Board and Committee structures noted above. As with last year, once again representatives from both the Audit & Risk Committee and the Corporate Governance Committee worked together with Senior Management to examine the effectiveness of Infomedia’s risk management initiatives. This process once again bridged the gap between the FY2007 Risk Management Plan and the FY2008 Risk Management Plan. The FY2008 Risk Management Plan was considered and, as appropriate, approved by both the Audit & Risk Committee and the Board in June and August 2007 (respectively). In May 2006, the Remuneration & Nomination Committee, with some assistance from external consultants, turned its attention to establishing the framework for the ﬁ rst formal ‘whole of Board’ review. At the 23 August 2006 Board meeting, the Chair of the Remuneration & Nomination Committee, Ms Hernon, provided an overview of the key ﬁ ndings – the major one being that the Board regarded itself as meeting needs/performing well in most areas. In December 2006, the Remuneration & Nomination Committee reported more formally to the Board, identifying areas for improvement and suggested actions for improved performance. A number of the recommendations contained in the Remuneration & Nomination Committee’s report have already been adopted, including: (cid:129) (cid:129) scheduling dedicated Board sessions to further develop strategy and people; and formalising the Company’s director development program through Australian Institute of Company Directors (AICD) memberships and continuing director education. At its 24 and 25 May 2006 meeting, the Board considered recommendations from the Remuneration & Nomination Committee regarding changes to the remuneration of the Company’s Non-executive Directors. The Remuneration & Nomination Committee’s recommendations were based around independent external advice and survey data which revealed increases in both individual Non-executive Director fees and maximum Non-executive Director fee pools. Data in respect of non-executive directors included that: (i) for the companies with smaller market capitalisation, median total remuneration for non-executive directors was around $67,000 and for their non-executive chair around $120,000; and (ii) the medium fee level per committee membership was approximately $8,750 whilst for chairing a committee it was approximately $15,000. At that meeting, the Board acknowledged that the increased time commitments and responsibilities of Non-executive Directors, coupled with the fact that Non-executive Director remuneration had not been reviewed for a number of years, rendered an upward remuneration review appropriate. Further benchmarking was then obtained and in late July 2006 the Board approved, with effect from 1 July, an increase in Non-executive Director remuneration, more detail in respect of which may be found in the Directors’ Report. 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. infomedia.com.au 76 Annual Report Corporate Governance ‘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 and ASX CGC Recommendation 2.3 – The roles of chairperson and chief executive should not be exercised by the same individual Traditionally, the Board has applied an Executive Director/Non-executive Director classiﬁ cation to its members. Until the resignation of Mr Henderson as a Non-executive Director in February 2007, the Infomedia Board comprised ﬁ ve Non-executive Directors and one Executive Director. Since then the Board has comprised four Non-executive Directors and one Executive Director. The role of Chairman and Chief Executive Ofﬁ cer has, as contemplated by ASX CGC Recommendation 2.3, been split since 31 December 2004. However, having retired within the past three years as an executive, Mr 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 Mr 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 Mr 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. Mr Gary Martin, in his role as Director and Chief Executive Ofﬁ cer, is also not considered by the Board as independent. However, two of the Company’s continuing Directors, Ms Hernon and Mr Andrew Moffat, meet an objective assessment of quantitative and qualitative criteria for independence. A third Non-executive Director, Mr 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 ﬁ rmly 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 publicly listed company. The Board’s approach ﬁ nds support in this view in other corporate governance commentary, including in the observations of the Royal Commissioner, Mr Justice Owen, who in his ofﬁ cial 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 ﬂ exibility ought to be maintained to enable corporations to be structured in a way that best suits their circumstances”. 77 infomedia.com.au Annual Report Corporate Governance 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 ofﬁ ce 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 conﬁ rmed 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 sufﬁ cient and reasonable and that its relationship to corporate and individual performance is deﬁ ned 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 ofﬁ ce for three years or more, other than the Chief Executive Ofﬁ cer, must retire by rotation each year. If eligible, the retiring Directors may offer themselves for re-election. The Infomedia Board currently comprises ﬁ ve Directors and details of the names, terms of ofﬁ ce, 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, placed on promoting, among other attributes, an appropriate mix of relevant skills, independence, expertise, business knowledge and executive and non-executive participation. Changes to the Board and Committee composition impacting FY2008 are discussed under the heading ‘Changes to the Composition of the Board of Directors and Committees’ above. infomedia.com.au 78 Annual Report Corporate Governance 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. 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 following the introduction of the ASX Corporate Governance Council’s Principles of Good Corporate Governance and Best Practice Recommendations to support the Board in the areas not covered by the Audit & Risk and Remuneration & Nomination Committees. 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 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 then made available on the Infomedia website. 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 Mr Martin and Mr Moffat were inducted as Directors of Infomedia under the guidance of the Remuneration & Nomination Committee and in accordance with the Director Nomination & Induction Policy. ASX CGC Recommendation 8.1 – Disclose the process for performance evaluation of the board, its committees and individual directors and key executives ASX CGC Recommendation 9.1 – Provide disclosure in relation to the company’s remuneration policies to enable investors to understand (i) the costs and beneﬁ ts of those policies and (ii) the link between remuneration paid to directors and key executives and corporate performance 79 infomedia.com.au Annual Report Corporate Governance Upon recommendation of the Remuneration & Nomination Committee, a Remuneration & 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 this and the preceding 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 beneﬁ ts 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 Company will continue to monitor the issue as it 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 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 indeﬁ nitely 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 Corporations Act and/or the ASX Listing Rules. Further detail of senior executive remuneration under these plans is included in the Remuneration Report. infomedia.com.au 80 Annual Report Corporate Governance 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 ofﬁ cer and any other key executives as to: 3.1.1 the practices necessary to maintain the conﬁ dence 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. Under the direction of the Corporate Governance Committee, the Code of Conduct was reﬁ ned during FY2006, primarily to formalise guidelines for the resolution of internal grievances. The soundings conducted as part of the review process served to promote greater awareness and use of enhanced procedures for seeking guidance where areas of concern exist, for the management of grievance issues and for the notiﬁ cation 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 Ofﬁ cer in FY2006. The ‘face to face’ approach was designed to alleviate any concerns employees may have had regarding loss of entitlements or beneﬁ ts. The presentations were both well attended and warmly received, particularly in light of the negative publicity surrounding the introduction of the legislation. In FY2006, Infomedia voluntarily took part in the University of Technology, Sydney (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 ﬁ nalising its June 2006 Interim Report, the Corporate Governance Committee sought out Infomedia speciﬁ c feedback from the UTS Centre for Corporate Governance regarding the perceived effectiveness of its corporate governance initiatives. 81 infomedia.com.au Annual Report Corporate Governance ASX CGC Recommendation 3.2 – Disclose the policy concerning trading in company securities by directors, ofﬁ cers and employees A formal Policy on Share Trading by Company Directors, Ofﬁ cers 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 FY2005. In July 2005, a revised Policy on Securities Trading by Company Directors, Ofﬁ cers and Employees was adopted by the Board and a summary was placed on the Company’s website. Financial Reporting and Risk Management ASX CGC Principle 4 – Safeguard integrity in ﬁ nancial reporting Have a structure to independently verify and safeguard the integrity of the company’s ﬁ nancial reporting ASX CGC Principle 7 – Recognise and manage risk Establish a sound system of risk oversight and management and internal control During this reporting period Infomedia complied with the ASX CGC Recommendations accompanying ASX CGC Principle 4, relating to audit committee composition, operation and responsibility. Following Mr Henderson’s resignation, the Board appointed Ms Hernon to the Audit & Risk Committee. ASX CGC Recommendation 4.1 – Require the chief executive ofﬁ cer and the chief ﬁ nancial ofﬁ cer to state in writing to the board that the company’s ﬁ nancial reports present a true and fair view, in all material respects, of the company’s ﬁ nancial condition and operational results and are in accordance with relevant accounting standards and ASX CGC Recommendation 7.2 – The chief executive ofﬁ cer (or equivalent) and the chief ﬁ nancial ofﬁ cer (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 ﬁ nancial statements) is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board 7.2.2 the company’s risk management and internal compliance and control system is operating efﬁ ciently and effectively in all material respects The Company’s ﬁ nancial reporting obligations for FY2007 have been fulﬁ lled, as they have in previous years, in accordance with applicable legal and accounting requirements: see the ﬁ nancial 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 Ofﬁ cer and the Chief Financial Ofﬁ cer have provided to the Board the certiﬁ cations under ASX CGC Recommendation 7.2 and in turn, the certiﬁ cations 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; infomedia.com.au 82 Annual Report Corporate Governance • 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. The Board continues to ﬁ rmly believe the Audit & Risk Committee is of ‘...sufﬁ cient 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 classiﬁ cation to its membership, the Board believes that the Audit & Risk Committee’s members meet an objective assessment of quantitative and qualitative criteria for independence. Therefore, 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 FY2005. In response to both legislative change and to the ASX CGC Commentary, in 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 and during FY2006 the Committee recommended, and the Board approved, formalised procedures, and made a summary of them available on the Infomedia website. The Audit & Risk Committee acknowledges the importance of external auditor independence. The Company’s external auditor’s engagement partner was rotated in FY2007. 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 FY2006 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 Ofﬁ cer, Chief Financial Ofﬁ cer 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 FY2007 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. 83 infomedia.com.au Annual Report Corporate Governance 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 ﬁ nal 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 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 FY2007 Notice of Annual General Meeting and Explanatory Statement are all available. The Australian Government recently introduced legislation allowing the default option for receiving annual reports to be via a company’s website. Shareholders will now receive timely, cost effective and more environmentally friendly online annual reports, unless they speciﬁ cally request a printed copy. Infomedia 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, iiMarch 2003. infomedia.com.au 84 Annual Report Additional Information TOP 20 HOLDERS OF SHARES AS AT 30 AUGUST 2007 Name WISER EQUITY PTY LTD J P MORGAN NOMINEES AUSTRALIA LIMITED YARRAGENE PTY LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED ANZ NOMINEES LIMITED CASH INCOME A/C NATIONAL NOMINEES LIMITED CITICORP NOMINEES PTY LIMITED MR ANDREW PATTINSON BIG BEAR ENTERPRISES PTY LTD TOM HADLEY ENTERPRISES PTY LTD WISER CENTRE PTY LTD WISER CENTRE P/L S/F A/C MR RICHARD GRAHAM MR YET KWONG CHIANG MRS HO YUK LIN CHIANG AUSTRALIAN REWARD INVESTMENT ALLIANCE MR JOHN KENDALL PERRETT BRAZIL FARMING PTY LTD WOODCLIFF SUPER PTY LTD GOLD HOLDINGS PTY LTD GOLD HOLDINGS P/L S/F A/C MR GARY JOHN MARTIN APPLIED SENSORS PTY LTD MULLIGAN PENSION FUND A/C Shares % of Total Rank 100,277,501 30.76 24,461,938 23,421,599 10,123,644 7,764,947 5,579,807 3,503,614 2,447,567 2,000,000 1,000,000 1,000,000 926,559 847,225 835,895 740,000 600,000 500,000 486,000 407,590 400,000 7.50 7.19 3.11 2.38 1.71 1.07 0.75 0.61 0.31 0.31 0.28 0.26 0.26 0.23 0.18 0.15 0.15 0.13 0.12 1 2 3 4 5 6 7 8 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 RANGE OF SHARES AS AT 30 AUGUST 2007 Shareholders Shares held % of total 530 2685 2079 3216 156 8666 439,237 8,714,817 17,325,139 90,156,516 209,335,863 325,971,572 0.13 2.67 5.31 27.66 64.23 100 As at 30 August 2007 there were 171 shareholders holding less than a marketable parcel of shares (minimum parcel $500.00) 85 infomedia.com.au Annual Report 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 Gary Martin – Chief Executive Ofﬁ cer and Executive Director Andrew Moffat – Non-executive Director COMPANY OFFICERS Nick Georges – Company Secretary Peter Adams – Chief Financial Ofﬁ cer AUDITOR 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 Infomedia, Microcat and PartFinder are registered trademarks, and LIVE, MARKET, Auto PartsBridge 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 86

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