Annual Report 2009
A Blue Ocean of Opportunities
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Table of Contents
Results at a Glance
Chairman’s Letter
Company Profile
CEO’s Report
Year in Review
S trong Management
Directors’ Report
Auditor’s Independence Declaration
Income S tatement
Balance Sheet
Cash Flow S tatement
Statement of Changes in Equity
Notes to the Financial S tatements
Directors’ Declaration
Independent Audit Report
Corporate Governance
Additional Information
Corporate Directory
© 2009 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.
2 infomedia.com.au
Sales Revenue
(in $millions)
NPAT
(in $millions)
EBITDA
(in $millions)
Results at a Glance
infomedia.com.au 3
infomedia.com.au 3
Chairman’s Letter
“Our diversification of solutions and customer segments
continues on-track, and solutions like Microcat MARKET
are experiencing encouraging growth…”
Dear Fellow Shareholders,
Much like the Australian economy, Infomedia was buoyed
by its sound foundation and material substance during the
economic upheavals – the so-called global financial crisis
(GFC) – of the past year. Except for the extraordinary uplift on
the Australian dollar exchange rate vis-à-vis our predominant
trading currencies, the GFC had little effect on our business
plan for the year.
Sales revenue of $51.3 million and normalised net profit
After Tax (NPAT) of $10.5 million were consistent with
our product development activities and the wind down of
General Motors subscription revenues that commenced in
August 2005. Your Board and management’s confidence in
the Company’s future was demonstrated by the declaration
of a 0.7 cents interim and 2.1 cents final dividend for the
year (a payout ratio of 83% of NPAT), and the Company’s
buy back campaign throughout the year that repurchased
14,701,578 shares on-market.
The Company’s positive cash flow model remains effective.
This year was the first in which the Company paid part of its
dividend unfranked; this was a result of both the strength
of the cash flow and the amortisation of previous years’
development capitalisation beginning to be reflected in the
Income Statement.
Our diversification of solutions and customer segments
continues on track, and solutions like Microcat® MARKET™ are
4 infomedia.com.au
Chairman’s Letter
“Going into FY2010, Superservice Menus enjoys a healthy
pipeline of new business prospects.”
beyond the dealership to serve their customers electronically.
In addition to better empowering our customers, the
re-invention to the web has created a more efficient
application development platform for the Company.
Building upon the FY2009 base that’s been stabilised in
terms of subscription wind downs, the coming to market
of our new technology solutions, and substantial forward
coverage on our foreign exchange exposure, FY2010 is
poised with potential. I am confident that we will see
meaningful growth across all segments in the next financial
year and beyond.
Thank you all for your continuing support of Infomedia and I
look forward to seeing you at the Annual General Meeting.
Richard David Graham
Chairman of the Board
experiencing encouraging growth, particularly throughout the
Asia Pacific and European regions. Staff and management are
committed to the Company being the leader in the provision
of self-serve ecommerce tools for genuine parts sales to the
important trade repairer segment. This segment is a vital
contributor to franchised dealer viability around the world.
During the coming year, we are releasing more trade repairer
solutions that are projected to deliver record revenues from
this segment.
Superservice Menus® continues to experience growth
around the world, with its revenue growing by 41% over
the previous year. Going into FY2010, Superservice Menus
enjoys a healthy pipeline of new business prospects. Land
Rover and Jaguar recently joined the growing number of
automakers who have licensed the use of their data for
us to create Superservice Menus for their dealers. It’s
great seeing our technology solutions continuing to be
recognised as making an important positive contribution to
the productivity, viability and customer loyalty of vehicle
dealers around the world.
After nearly two decades of providing our flagship and game
changing product, the Microcat® parts selling system, we
are now successfully replacing our DVD based solution with
a more powerful Internet based re-invention. Its significant
improvements have begun to provide our customers with
more frequent data and application updates, lowering their
cost of hardware platforms and providing links to reach out
infomedia.com.au 5
Company Profile
“It is more than just systems that make our service different.
It is the expertise of our people who stand behind them.”
Local Market
Information
Global Network
Language
Support
Software as
a Service
Data Quality
Improvement
Quality
Assurance
Comprehensive
Training
Dealership
Best Practice
At Infomedia, we’ve made it our business to ensure that
information flows as efficiently as possible through
the aftersales section of our customers’ business. Our suite
of parts and service data solutions has been developed
specifically for the purpose of improving parts and service
data performance.
Our systems help our automotive partners to sell billions of
dollars worth of parts every year. This is our core business.
We are proud of our spirit of innovation that has brought
these ideas to life, changing the way the industry operates.
over 56,000 users in over 160 countries around the world,
we are constantly improving our products to meet evolving
customer needs.
It is more than just systems that make our service different.
It is the expertise of our people who stand behind them. For
our customers this means a global network of local trainers
and support staff. With offices in Australia, China, North
America and Europe, and partners in Japan and Latin America,
we are where our customers are, when they need us, with
local knowledge on hand to help.
Over the years, our products have changed, and adapted, based
not only on technological advancements, but also on customer
needs. We take the time to get to know our customers. We
believe it is a crucial part of building lasting relationships.
With an unrivalled knowledgebase built on feedback from
Infomedia has a genuine desire to improve our customers’
business and a successful history to prove it. We know
transparency, reliability and accessibility are the keys to a
quality data solution. We believe they are also the keys to our
successful approach to business.
6 infomedia.com.au
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CEO’s Report
“...success can be achieved not by out-performing the
competition in the existing industry, but by being innovative
and creating a new market space or Blue Ocean, thereby
making the competition irrelevant.”
Infomedia,
A s Chief Executive Officer (CEO) of
I
acknowledge that we’ve faced our share of challenges
during the past financial year. The global financial crisis has
duri
affe
affected many companies around the world – and we have not
been immune to its impact. It’s not surprising that the force
bee
of the crisis has been so extreme, when we’ve witnessed
of t
som
some of the worst financial conditions many of us will ever
exp
experience in our lives, and in the lifespan of our companies.
Despite this climate, I am proud to say that as a Company,
Des
we’r
we’re doing well and that the future is bright. You will
notice the Blue Ocean theme throughout this year’s Annual
noti
Report, based on the idea that success can be achieved not
Rep
by o
by out-performing the competition in the existing industry,
but by being innovative and creating a new market space or
but
Blue Ocean, thereby making the competition irrelevant. Red
Blue
Oceans, on the other hand, are those market spaces that
Ocea
alre
already exist, and competition is fierce as companies try to
out-perform their rivals and get a greater portion of existing
out-
dem
demand and market share.
Our online presence opens more doors of opportunity for the
Company. Utilising the web allows us to service our customers
better by tailoring our solutions more to their current needs.
The new solutions are generating excitement
in the
marketplace and our customers are seeing the real value
the solutions add to their businesses – particularly in trying
times such as these.
Our business is to add value to our customers and create
productivity increases to everyone in the supply and service
chain – generating real improvements to the way our
customers do business and real improvements to their bottom
lines. By continuing to listen to our customers’ needs and
wants and delivering solutions that meet and exceed those
needs, we will uncover opportunities. Not only have we
cemented long term relationships with current customers, but
we’re also opening doors to new customers. Infomedia is set
to take advantage of the investment made in new technology
during the past year that will see the Company into the
unchartered waters of a Blue Ocean.
The Blue Ocean theme represents the Company’s
journey during the past financial year on its path
to convert our disc based products to online solutions. In
pursuing this, Infomedia has ventured into a new market
space by producing online selling systems and other
web service solutions that can deliver information and
intelligence to drive business performance.
Infomedia’s Shanghai Representative Office, China
Early in 2009, Infomedia’s Shanghai Representative Office
was established in China. The North Asia region presents
the Company with numerous growth opportunities in the
provision of aftersales information services and solutions.
Major automakers and suppliers are based in Shanghai and the
infomedia.com.au 7
CEO’s Report
“Sales revenue for Superservice Menus continues to
experience growth around the globe with an increase of
41% over last financial year...”
surrounding Yangtze River delta, so the location is a sound base
from which Infomedia can develop business in the region.
develop strategic industry relationships; begin promoting our
solutions; and investigate new product opportunities.
China’s domestic vehicle market continues to grow and while
the global financial crisis has had some impact, foreign
automakers such as Ford, General Motors (GM), Hyundai,
Toyota and the Volkswagen (VW) Group are continuing their
aggressive expansions into the Chinese market. Despite
economic conditions slowing growth, Chinese brands are keen
to continue their overseas expansion because it gives them a
good international brand image and therefore provides them
with a real marketing advantage as they become more than
just Chinese companies.
Shanghai, China
Infomedia’s vast global aftersales experience can provide
great support to the Chinese automakers as they embark on
long term market development strategies.
Infomedia’s Solutions Continue to Experience Growth
Despite conditions, sales increased around the globe for our
parts selling solutions. When added to the previously forecast
loss of GM Microcat® subscriptions, overall sales revenue
decreased by only 1% from last financial year. Sales revenue
for Superservice Menus® continues to experience growth
around the globe with an increase of 41% over last financial
year and was primarily driven by a number of launches in
Europe and the Asia Pacific region.
In Europe, Superservice Menus was launched to eight new
markets for Subaru (Denmark, Iceland, Ireland, Estonia,
Finland, Latvia, Lithuania and Sweden). The solution was
rolled out to Hyundai Spain and for Kia in Sweden, Denmark
and Italy. Two new automakers in Europe also signed on to
receive Superservice Menus – Isuzu for the United Kingdom
and Mitsubishi for Sweden.
Our first Shanghai office staff member, Waters Wang, has been
making many inroads into the region, developing a number of
contacts with automaker customers. His primary goals are to:
explore market potential for Infomedia’s solutions within China;
In Asia Pacific, Superservice Menus for Subaru Australia and
Suzuki QLD was launched to dealers and a number of new
Dealer Management System partners came on board for both
Australia and New Zealand.
8 infomedia.com.au
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CEO’s Report
“Growth is expected from both existing and new automaker
partners around the globe due to the release of the new
Microcat LIVE Plus parts selling solution.”
Microcat® MARKET™ has also experienced growth with an
overall revenue increase of 153% globally. Subscriptions for
Ford Europe increased by 30%, with Italy, Germany and France
the countries that experienced the most growth.
New Contracts Signed and Existing Contracts Renewed
The past financial year has seen a number of new contracts
signed and existing contracts renewed.
In Europe, agreements were signed with Kia to supply
Superservice Menus in further markets including: Austria,
Belgium, Germany, Ireland and Slovakia. In the Asia Pacific
region, Toyota Australia continued our long term partnership
with the renewal of Superservice Menus, as well as Microcat
MARKET and Microcat until the end of 2011. Honda Australia
also renewed its contract with us to supply Microcat to its
dealerships for another three years. Ford agreements for our
parts selling solutions were renewed around the globe with
Canada, Europe and the USA, extending our long standing
partnership with the Ford Motor Company.
Among our oil industry partners, Castrol Australia and BP
Australia renewed their agreements for two years for the
creation of the Lubricants Recommendation Database, whilst
Valvoline Australia renewed its service contract for three
years. A new business contract was signed with another
oil industry partner, Fuchs, to supply it with a Lubricants
Recommendation Database to CASE IH, New Holland and
BT Equipment.
The Year Ahead
Operational Outlook
Our investment in our new technology web services platform
has positioned the Company to take full advantage of new
opportunities in the coming financial year. The outlook is a
challenging, yet positive one for Infomedia.
Microcat® LIVE™ Plus for Toyota’s industrial equipment
division, Toyota Motor Handling, U.S.A. (TMHU) was launched
early in 2009 along with Microcat LIVE Plus for Ford Mexico.
We are currently releasing further versions of Microcat LIVE
Plus with current customers throughout North America.
infomedia.com.au 9
CEO’s Report
Growth is expected from both existing and new automaker
partners around the globe due to the release of this new
parts selling solution.
products, the Company expects the investment made in the
new web platform technology will give rise to new revenue
streams from existing and new markets.
The Company regards the year ahead for the global automotive
market as challenging, with many automakers continuing to
feel the effects of the global financial crisis. However, the
emergence of a new and revitalised automotive sector
will present many opportunities for Infomedia’s solutions.
Therefore, the previously issued net profit after tax guidance
for financial year 2010 of between $13,000,000 and
the Company’s
$14,000,000
expectations at this time.
remains consistent with
I’m confident it’s going to be a Blue Ocean year and I’m really
looking forward to working with all the Infomedia team to
realise our vision.
Superservice Menus revenue is forecast to continue to
increase during the next financial year. Early in 2010, the
solution will start migrating to a web platform as we launch
an online version of Superservice Menus to Jaguar and
Land Rover, the result of a recent three year agreement
to supply Superservice Menus to Jaguar and Land Rover
dealerships worldwide. The launch of Superservice Menus
to GM dealerships in North America is imminent, with further
automakers to follow.
The recent appointment of Warren Webermin to the role of
Director of Global Sales and New Business Development is a
positive step forward in the new business arena for Infomedia.
Warren brings extensive experience and skills to the position
and is responsible for directing business opportunities in
new markets whilst consolidating business opportunities in
current markets.
Financial Outlook
In the year ahead, the Company is releasing its new generation
products. While some releases will be web upgrades to existing
Gary Martin
Chief Executive Officer
10 infomedia.com.au
Year in Review
“...development can now occur around the clock, 24 hours a day.
When development ceases in the Asia Pacific region at the end of
the working day, it soon begins in the United States...”
Scrum Methodology Process
Impact of the Global Economy on Business
T urbulent is a term that many businesses would use to sum
up what has been happening in the global economy over
the past financial year. The global financial crisis has affected
most businesses in one way or another. Many are suffering
as a result of falling stock markets and the collapse of large
institutions, and are also experiencing lost revenue and,
inevitably, increased costs.
2009), Infomedia’s solutions will help enable dealerships
to reduce costs and increase productivity – contributing
positively to their bottom lines.
The Company has been able to leverage its global presence,
experience and reputation to add value for customers and it
continues to stand together with its automotive partners to
help them achieve greater efficiencies and make the most out
of every precious dollar earned… and spent.
The negative impact has particularly been felt in the global
automotive market. Like all businesses, dealerships have
been forced to cut costs to survive the storm and, in some
instances, this has meant some decline in subscriptions to
some of Infomedia’s solutions or, in the worst case scenario,
dealerships have closed altogether.
However, notwithstanding all the media reports and the
re-organisations happening within automakers globally, never
before has the wider automotive community been focused
so intently on keeping customers through professional and
efficient service. This is the area where Infomedia provides
maximum benefit to the users of our many parts and service
solutions and where our sales teams are working hard with
automakers as a value add partner.
New Solutions, New Ways of Development
With Infomedia’s disc based solutions migrating to the
Internet, new processes and procedures have been adopted in
order to produce the new solutions quickly and responsively.
Development of the Company’s solutions has traditionally
occurred in the Sydney and Melbourne offices. Within the
past year, however, a team of developers has been established
in the United States. Now, not only can the Company broaden
its skills and knowledge across continents, but software
development can also “follow the sun”. Not restricted to the
Asia Pacific daylight working hours, development can now occur
around the clock, 24 hours a day. When development ceases in
the Asia Pacific region at the end of the working day, it soon
begins in the United States when their day commences.
Infomedia continues to help dealerships achieve greater
efficiencies in their service and parts departments. With
service and parts department profits accounting for almost
100% of total dealership operating profits in North American
dealerships (National Automobile Dealers Association Data
New software development processes have also been
implemented and have improved the way that Infomedia’s
solutions are created. Scrum methodology and, as a part of this,
Agile development, are processes that are being used to deliver
the highest business value in the shortest amount of time.
infomedia.com.au 11
Year in Review
“All members of the Senior Management team contribute
to, and are committed to, Infomedia’s success.”
Scrum methodology is a framework for software development
that focuses on delivering business value that is repeatable,
measurable, adaptive, predictive and visible. Rather than
focusing on how software development is implemented,
the Scrum framework concentrates on how the project is
organised and planned. The process encourages the team
to take ownership of the project and improves its ability to
respond quickly to changing market needs by reducing stress
and wasted time. The method incorporates regular change
whilst protecting the project from uncontrolled change.
Agile software development is a part of Scrum methodology
and involves many cycles of short “sprints”. Evaluation of
what was achieved in the sprint occurs at the end of each
two week sprint cycle, and then a new scope is developed for
the following sprint cycle based on the previous cycle, and
so on. The benefit of this method is that work is continually
evaluated, and the risk of not delivering as required is
reduced. Because smaller portions of development are tackled
each time, updates can be implemented more regularly.
At Infomedia, these new ways of software development have
created an environment that promotes change and improvement
– elements that drive the Company forward, faster.
Strong Senior Management
In order for Infomedia to deliver its solutions and services
successfully, the Company needs a strong Senior Management
team to maximise every opportunity possible. Over the past
financial year, current members’ roles have been consolidated
and new roles have been created, strengthening the Senior
Management team while reinforcing the foundations of the
Company as a whole.
Two new Senior Managers have joined the team and bring
with them extensive skills and management experience in the
automotive industry. Early in 2009, Rob Whalley assumed the
role of Managing Director, IFM Europe. The position became
available when Andrew Pattinson relocated back to our Sydney
head office to assume the role of Director of Operations and
Global Solutions. Rob’s 30 years of experience in sales and
marketing within the automotive industry will add to our
solid foundation and provide strategic direction to the
Company’s European subsidiary. Rob’s focus will be on
developing new markets and increasing sales in Europe, the
Middle East and Africa.
More recently, Warren Webermin commenced in a newly
created role, as Director of Global Sales and New Business
Development. Warren has 25 years of management experience
in many areas including sales, operations, finance and strategic
planning. In Warren’s global role, he will be responsible
for identifying and managing growth opportunities in new
markets and working closely with the regional leaders to
ensure that all opportunities are maximised.
The Senior Management team is made up of regional managers
and functional managers, forming a matrix reporting structure
whereby the team works together closely to achieve the
Company’s goals. The functional managers are in charge of the
Company’s major disciplines globally and they are specialists
in their fields.
All members of the Senior Management team contribute to,
and are committed to, Infomedia’s success. They are focused on
working together and with the rest of the Company to deliver
on Infomedia’s vision whilst consolidating and expanding on
its firm foundations.
12 infomedia.com.au
12 infomedia.com.au
Strong Management
Gary Martin
Chief Executive Officer
Gary Martin joined the Company as International Sales Manager in 1998 and was appointed as General Manager, Electronic
Catalogues Division in August 2001. Mr Martin was appointed to the Board in 2004 and then to the position of Chief Executive
Officer in January 2005. Mr Martin has extensive experience in the automotive industry having held various positions at
automotive dealerships since 1987. 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.
Michael Bodner
Chief Information Officer
Dr Michael Bodner has almost 30 years’ experience across a number of high technology ventures. He has a Ph.D. in Theoretical
Physics and was one of the scientists assigned to the Apollo project at NASA. He has been a college professor, and then
entered the emerging microcomputer industry, in which he worked in a number of small and very large companies. After
several years at the Thomson Corporation, where he served as the Chief Technology Officer (CTO) and Senior Director of
Technology Strategy in Zurich, he returned to the US and entered the automotive information provider industry. Immediately
prior to joining Infomedia in May 2008 as Chief Information Officer, Dr Bodner worked for a leading software company in
the position of Vice President, Emerging Technologies and Global Architecture and Standards, and then as Acting Chief
Information Officer (CIO) responsible for development of the Company’s corporate technology strategy. During his career, Dr
Bodner has made significant contributions to the technology industry including a large number of methodologies, designs
and applications that have influenced the industry during its most expansive phase. Dr Bodner has published several books
and dozens of magazine articles, and is an experienced public speaker.
Alison Clinch
Director of Marketing
Alison Clinch has more than 15 years of experience in the field of marketing, having worked for a large Australian bank
for five years and, immediately prior to joining Infomedia in October 2003, she worked for an accounting software firm
for six years. All her roles have been marketing oriented, with a strong emphasis on technology, both as a product and as
an integrated marketing tool. Her particular areas of expertise are marketing, communications and brand management. Ms
Clinch has a Bachelor degree (Information Science – Computing) and a Masters of Business (Marketing).
Nick Georges
General Counsel and Company Secretary
Nick Georges is a qualified lawyer, admitted to the Supreme Courts of Victoria in 1991 and New South Wales in 1999.
Prior to joining Infomedia and becoming its General Counsel and Company Secretary in 1999, Mr Georges worked in general
practice as a solicitor in Victoria before moving to Sydney in 1995 to take up an executive role with an international software
development company, where he obtained extensive experience in the information technology industry.
infomedia.com.au 13
Strong Management
Andrew Pattinson
Director of Operations and Global Solutions
Andrew Pattinson joined Infomedia in April 1988 from the finance industry to work on the administration team and has since
held roles in many areas of the Company. Mr Pattinson ran the Production and Operations area of the business for six years prior
to taking on the Melbourne based role of General Manager, Data Management Division. In January 2002, he returned to Sydney
and accepted the role of Vice-CEO. Mr Pattinson relocated to the UK in April 2004 to open Infomedia’s European operations and
in February 2009 he returned to Australia to take up the position of Director of Operations and Global Solutions.
Jonathan Pollard
Chief Financial Officer
Jonathan Pollard is a chartered accountant and has over 10 years of financial experience in both European and Australian
companies. Mr Pollard joined Infomedia in July 2004 in the position of Finance Manager and in April 2008 was promoted to
the position of Acting Chief Financial Officer (CFO). Mr Pollard has extensive experience in financial reporting, management
accounting, audit and financial modelling. Before joining Infomedia, Mr Pollard held a position as a senior accountant with
an Australian software company, and prior to that a senior audit position with KPMG UK. Mr Pollard has a Bachelor of Science
degree (Mathematics).
Michael Roach
Director of Asia Pacific
Michael Roach joined Infomedia in 1979 in the field of electronic publishing. Mr Roach has held various positions during his tenure,
including Production Manager and Operations Manager, before he was promoted to General Manager of the Data Management
Division in 2002. He was then promoted to the position of General Manager of the Catalogues and Publishing Division in January
2005 and, in June this year, he was appointed Director of Asia Pacific. Mr Roach has extensive experience in the automotive
cataloguing industry. He is responsible for key relationships throughout Asia Pacific with automakers and suppliers.
Dan Stedem
Vice President, IFM North America
Dan Stedem has worked alongside Infomedia since 1999, when Microcat was first launched to Ford dealers in North America.
Since that time, he has been a subject matter expert, trainer, salesman and all-around customer support person. In February
2008, Mr Stedem was appointed Vice President Operations and subsequently promoted to Vice President, IFM North
America in June this year. Prior to his work with Infomedia, Mr Stedem spent over 25 years working in various positions
at Ford dealerships, leaving as General Manager with 15 President’s Awards for Customer Satisfaction during his tenure.
Mr Stedem has a Bachelor of Science degree from State University of New York.
14 infomedia.com.au
Strong Management
Warren Webermin
Director of Global Sales and New Business Development
Warren Webermin has 25 years of diverse management experience in many areas including sales, operations, finance, and
strategic planning. Prior to joining Infomedia in July 2009, Mr Webermin held several senior management positions including:
President of SPX Valley Forge, Vice President of Global Accounts for Snap-on Business Solutions and Vice President of
Business Development for TechTeam Global. Warren possesses excellent negotiation skills and has extensive experience in
business development and sales. Mr Webermin has a Bachelor of Business Administration degree and advanced degrees in
Computer Science, Liberal Arts and Psychology.
Rob Whalley
Managing Director, IFM Europe Limited
Rob Whalley joined Infomedia as Managing Director of IFM Europe in March 2009. Mr Whalley has more than 30 years of
experience in the automotive industry and a proven track record of business growth and strategic development, along
with a strong commitment to the delivery of high quality customer service. Prior to joining Infomedia, he was Managing
Director of MSX International for Northern Europe and prior to that Managing Director for Experian’s Automotive Division
with responsibilities both locally and globally as part of the Global Management Team. Mr Whalley has a Bachelor degree in
Management Sciences (Marketing and Finance).
Linda Williams
Human Resources Manager
Linda Williams joined Infomedia in November 2000. Ms Williams has extensive Human Resources (HR) management
experience in the corporate sector including banking and finance, hospitality, the Sydney Organising Committee for the
Olympic Games and information technology. Ms Williams has been responsible for the integration of staff from the three
acquisitions Infomedia has undertaken, the establishment of overseas offices, significant recruitment of new hires and
advice to Senior Management, on a range of HR issues. Ms Williams has obtained a Registered Nursing Certificate, a Human
Resources Certificate and an Advanced Diploma of Human Resources. Her expertise in human resources spans over 15 years
and includes recruitment, equal employment opportunity and employee relations. Ms Williams recently accepted a voluntary
Board Member position with the Northern Beaches Interchange.
infomedia.com.au 15
Directors’ Report
Your Directors submit their report for the year ended 30 June 2009.
DIRECTORS
Directors were in office from the beginning of the financial year until the date of this report, unless otherwise stated.
The names and details of the Directors of the Company in office during the financial year and until the date of this report are:
Richard Graham
Non-executive Chairman
Mr Richard Graham has held senior management positions in the American and Australian computer industry since 1977.
Mr Graham co-founded the Company in 1988 and was its Chairman and 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 2008.
Gary Martin
Chief Executive Officer
Gary Martin was promoted to the position of Chief Executive Officer on 1 January 2005. Mr Martin has extensive experience in
the automotive industry. He has been with Infomedia since 1998, when he joined the Company as International Sales Manager.
Mr Martin was appointed as General Manager, Electronic Catalogues Division in August 2001. Prior to joining Infomedia,
he had 12 years of experience at automotive dealerships, including as General Manager, Parts & 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.
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 Corporate Affairs Manager for Nestlé Australia Ltd.
Ms Hernon currently 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 and Nomination Committee.
Ms Hernon was last re-elected to the Board in October 2006.
16 infomedia.com.au
Directors’ Report
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 2008.
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 and 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 last re-elected to the Board in October 2007.
COMPANY SECRETARY
Nick Georges
General Counsel and Company Secretary
Nick Georges is a qualified lawyer, admitted to the Supreme Courts of Victoria in 1991 and New South Wales in 1999. Prior to
joining Infomedia and becoming its General Counsel and 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.
infomedia.com.au 17
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:
Wiser Equity Pty Limited
Yarragene Pty Limited
Wiser Centre Pty Limited
Richard Graham
Gary Martin
Frances Hernon
Andrew Moffat
Infomedia Ltd
Ordinary shares fully paid
Options over ordinary shares
100,277,501
23,421,589
1,000,000
926,559
607,590
5,000
-
-
-
-
-
1,000,000
-
-
Richard Graham is the sole Director and beneficial 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 five years, Andrew Moffat has been the non-executive Chairman of Pacific Star Network Limited. He is also an executive Director of Rubik
Financial 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 group were:
•
•
developer and supplier of Electronic Parts Catalogues and service quoting systems for the automotive industry globally; and
information management, analysis and creation for the domestic automotive and oil industries.
There have been no significant changes in the nature of those activities during the year.
EMPLOYEES
The Company employed 240 (2008: 213) full time employees as at 30 June 2009.
DIVIDENDS
Final dividends recommended:
On ordinary shares – final – franked at 0.7cents
Dividends paid in the year:
On ordinary shares – 2009 interim – fully franked
Final for the 2008 year:
On ordinary shares – as recommended in the 2008 report
18 infomedia.com.au
Cents
2.1
$’000
6,534
0.70
2,215
1.40
4,485
NET TANGIBLE ASSETS PER SECURITY
The Company’s net tangible assets per security are as follows:
Net tangible assets per share at 30 June 2009
Net tangible assets per share at 30 June 2008
REVIEW AND RESULTS OF OPERATIONS
Directors’ Report
Cents
2.8
3.5
The following table presents sales revenue and profit after tax. There were no non-recurring significant items during the 2008 or 2009 financial years:
Sales revenue – Catalogue & Publishing
Consolidated sales revenue
Profit after tax
CONSOLIDATED
2009
$’000
51,317
51,317
10,536
2008
$’000
51,731
51,731
13,066
The Company reports net profit after tax of $10,536,000 for the 2009 financial year which is within the range previously advised in its earnings guidance,
released to the market on 21 January 2009.
Electronic Parts Catalogue revenue declined by 4% to $45,042,000 and Superservice Menus® revenue grew by 41% to $3,628,000 over the previous
corresponding period. The reduction in Electronic Parts Catalogue revenue was primarily due to the cessation of the General Motors contract; this decline
was offset by growth in other markets. The increase in Superservice Menus was due to growth over a range of automakers in both Europe and Asia Pacific.
Revenues from other products increased 21% to $2,647,000.
Cash flows from operations reduced to $5,204,000 primarily due to the timing of royalty payments and increased headcount as the Company prepares new
products for release to market during the course of the 2010 financial year.
On 1 April 2008 the Company commenced a share buyback (on market within 10/12 limit). This was reinitiated on 8 April 2009. As at 30 June 2009 the
Company had repurchased 14,701,578 shares for a total consideration of $4,875,000. The balance sheet remains debt free with $8,005,000 cash on hand at
30 June 2009.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There has been no significant change in the state of affairs of the Company since the last Directors’ Report.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
There has been no matter or circumstance that has arisen since the end of the financial year that has significantly affected the operations of the Company,
the results of those operations, or the state of affairs of the Company.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
In the year ahead the Company is releasing its new generation products. While some releases will be web upgrades to existing products, the Company expects
the investment made in the new web platform technology will give rise to new revenue streams from existing and new markets.
The Company regards the year ahead for the global automotive market as challenging with many automakers continuing to feel the effects of the global
financial crisis. However, the emergence of a new and revitalised automotive sector will present many opportunities for Infomedia’s solutions. As such, the
previously issued net profit after tax guidance for financial year 2010 of between $13,000,000 and $14,000,000 remains consistent with the Company’s
expectations at this time.
infomedia.com.au 19
Directors’ Report
ENVIRONMENTAL REGULATION AND PERFORMANCE
The Company is not subject to any particular or significant environmental regulation under a law of the Commonwealth of Australia or of a State or Territory.
SHARE OPTIONS
Unissued shares
At the date of this report, there were 2,650,000 unissued ordinary shares under options. Refer to Note 23 of the financial statements for further details of
the options outstanding.
Shares issued as a result of the exercise of options
There were no shares issued as a result of the exercise of options during the year. Since the end of the financial year there have been no options exercised.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
During the year, the Company paid a premium in relation to insuring Directors and other officers against liability incurred in their capacity as a Director or
officer of the Company. The insurance contract specifically prohibits the disclosure of the nature of the policy and amount of premium paid.
REMUNERATION REPORT - AUDITED
This remuneration report outlines the Director and executive remuneration arrangements of the Company and the group in accordance with the requirements
of the Corporations Act 2001 and its regulations. For the purposes of this report, Key Management Personnel (KMP) of the Group are defined as those persons
having authority and responsibility for planning, directing and controlling the major activities of the Company and the group, directly or indirectly, including
any Director (whether executive or otherwise) of the parent company.
Details of Key Management Personnel
(i) Directors
Richard Graham
Gary Martin
Myer Herszberg
Frances Hernon
Andrew Moffat
(ii) Executives
Jonathan Pollard
Michael Bodner
Nick Georges
Andrew Pattinson*
Michael Roach
Non-executive Chairman
Chief Executive Officer
Non-executive Director
Non-executive Director
Non-executive Director
Chief Financial Officer
Chief Information Officer
Company Secretary and Legal Counsel
Director of Operations and Global Solutions
Director of Asia Pacific
*Resigned as Managing Director of IFM Europe and commenced as Director of Operations and Global Solutions for Infomedia Ltd on 9 March 2009.
20 infomedia.com.au
Directors’ Report
REMUNERATION REPORT - AUDITED (CONTINUED)
Compensation philosophy
The performance of the Company depends upon the quality of its Directors and executives. To prosper, the Company must attract, motivate and retain highly
skilled Directors and executives. To this end, the Company embodies the following principles in its compensation framework:
•
•
•
provide competitive rewards to attract high calibre executives;
link executive rewards to shareholder value; and
establish appropriate performance hurdles in relation to variable executive compensation.
Remuneration decisions
Ms Hernon, in her capacity as Lead Director for all matters that formerly fell within the ambit of the former Remuneration & Nomination 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. Ms Hernon, together with the non-executive members of the Board, assesses the appropriateness of the nature and amount of these emoluments
on a periodic basis by reference to relevant employment market conditions, with the overall objective of ensuring maximum stakeholder benefit from the
retention of a high quality Board and executive team.
Compensation structure
In accordance with best practice corporate governance recommendations, the structure of non-executive Director and Senior Executive compensation is
separate and distinct.
Non-executive Director compensation
Objective
The Board seeks to set aggregate compensation at a level which provides the Company with the ability to attract and retain Directors of appropriate calibre,
whilst incurring a cost which is acceptable to shareholders.
Structure
The Constitution and the 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 2009, non-executive Directors’ compensation totalled $309,341 (2008: $309,341)). The latest determination was at the Annual
General Meeting held on 30 October 2002, when shareholders approved a maximum aggregate compensation of $450,000 per year.
The Board has historically considered the advice from external consultants as well as the fees paid to non-executive Directors of comparable companies when
undertaking a review process.
Senior executive and Executive Director compensation
Objective
The Company aims to reward executives with a level and mix of compensation commensurate with their position and responsibilities within the Company and
so as to:
•
•
•
•
reward executives for Company and individual performance against targets set by reference to appropriate benchmarks;
align the interests of executives with those of shareholders;
link reward with the strategic goals and performance of the Company; and
ensure total compensation is competitive by market standards.
infomedia.com.au 21
Directors’ Report
REMUNERATION REPORT - AUDITED (CONTINUED)
Structure
In determining the level and make-up of executive compensation, the Board 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 fixed compensation and variable compensation (potential short term and long term incentives) is established for Key Management
Personnel (excluding the CEO and non-executive Directors) by the CEO in conjunction with the Lead Director (Ms Hernon) for all remuneration matters, and
in the case of the CEO, by the Chairman of the Board in conjunction with Ms Hernon. Other executive salaries are determined by the CEO with reference to
market conditions.
Fixed compensation
Objective
The level of fixed compensation is set so as to provide a base level of compensation which is both appropriate to the position and competitive in the
market. Fixed compensation is reviewed periodically by the CEO in conjunction with Ms Hernon 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 Ms Hernon. All other executive positions are reviewed
periodically by the CEO. As noted above, Ms Hernon has access to external advice independent of management.
Structure
Executives are given the opportunity to receive their fixed (primary) compensation in a variety of forms including cash or other designated employee expenditure
such as motor vehicles. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Company.
Variable compensation – Short Term Incentive (STI)
Objective
The objective of the short term incentive is to link the achievement of both individual performance and Company performance with the compensation received
by the executive.
Structure
The structure of the short term incentive is a cash bonus dependent upon a combination of individual performance objectives and Company objectives being
met. This reflects the Company wide practice of “Performance Planning 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 financial year (adjusted where necessary for
currency fluctuations).
These performance conditions were chosen, in the case of individual performance objectives, to promote and maintain the individual’s focus on their own
contribution to the Company’s strategic objectives through individual achievement in key result areas (KRAs) which include, for example, “leadership”,
“decision making”, “results” and “risk management”. In the case of Company objectives, budgetary performance conditions were chosen to promote and
maintain a collaborative, Company wide focus on the achievement of those targets.
In assessing whether an individual performance condition has been satisfied, pre-agreed Key Performance Indicators (KPIs) are used. In assessing whether
Company objectives have been satisfied, Board level pre-determined budgetary targets are used. These methods have been chosen to create clear and
measurable performance targets.
22 infomedia.com.au
Directors’ Report
REMUNERATION REPORT - AUDITED (CONTINUED)
Variable compensation – Long Term Incentive (LTI)
Objective
The objective of the LTI plan is to reward executives in a manner which aligns this element of compensation with the creation of shareholder wealth.
Therefore, grants are made to executives who are able to influence the generation of shareholder wealth and thus have a direct impact on the Company’s
performance against the relevant long term performance hurdle.
Structure
The structure of long term compensation is in the form of share options pursuant to the employee option and employee share plans. Performance hurdles have
been introduced for all share options issued after 31 December 2004 and are determined upon grant of those share options. These hurdles typically relate to
the Company’s share price reaching or exceeding a particular level. These methods were chosen to create clear and measurable performance expectations.
infomedia.com.au 23
Directors’ Report
REMUNERATION REPORT - AUDITED (CONTINUED)
Directors, Key Management Personnel and the five highest remunerated specified executives for the year ended 30 June 2009 and 30 June 2008:
Short term
Post
employment
Share based
payments
Long service
leave
Total
Percentage
performance
related
Salary and Fees
Bonus
Non monetary
benefits
Superannuation
Options
Other
$
$
$
$
$
$
$
115,000
300,000
56,300
56,250
56,250
288,952
304,169
190,000
190,000
172,784
1,729,705
115,000
290,000
56,300
56,250
56,250
303,658
207,254
177,500
174,869
158,748
42,704
37,500
-
105,000
-
-
-
49,377
66,928
36,000
29,125
43,512
329,942
-
102,400
-
-
-
-
51,300
22,300
25,000
21,689
22,280
-
-
-
-
-
-
65,578
16,031
-
-
-
81,609
-
-
-
-
-
25,405
-
-
-
12,231
3,629
-
1,676,033
244,969
41,265
10,350
27,000
5,067
5,062
5,062
26,006
-
17,100
17,100
15,504
128,251
10,350
26,100
5,067
5,062
5,062
27,329
13,353
15,975
15,525
-
-
3,375
127,198
-
34,524
-
-
-
1,960
19,616
3,360
8,634
6,930
75,024
-
22,571
-
-
-
-
1,716
5,328
3,150
-
2,000
-
34,765
-
5,000
-
-
-
4,667
-
3,333
3,167
1,500
125,350
471,524
61,367
61,312
61,312
436,540
406,744
249,793
248,026
240,230
17,667
2,362,198
-
5,000
-
-
-
14,073
-
2,850
3,200
-
-
-
125,350
446,071
61,367
61,312
61,312
370,465
273,623
223,953
221,744
192,668
70,613
40,875
25,123
2,149,353
%
-
22
-
-
-
11
16
14
12
18
-
20
-
-
-
-
10
15
11
-
-
-
2009 Financial Year:
Directors:
Richard Graham
Gary Martin
Myer Herszberg
Frances Hernon
Andrew Moffat
Executives:
Andrew Pattinson
Michael Bodner
Michael Roach
Nick Georges
Jonathan Pollard
2008 Financial Year:
Directors:
Richard Graham
Gary Martin
Myer Herszberg
Frances Hernon
Andrew Moffat
Executives:
Andrew Pattinson
Peter Adams*
Nick Georges
Michael Roach
Mark Kujacznski
Michael Bodner**
Jonathan Pollard***
* Resigned 31 March 2008.
** Appointed 1 May 2008.
*** Appointed 1 April 2008.
24 infomedia.com.au
Directors’ Report
REMUNERATION REPORT - AUDITED (CONTINUED)
Contract for services
The table and notes below summarise current executive employment contracts with the Company as at the date of this report:
Gary Martin
Nick Georges
Michael Bodner
Jonathan Pollard
Michael Roach
Andrew Pattinson
Commencement date
per latest contract
1 January 2008
1 January 2008
1 May 2008
1 October 2008
1 January 2009
1 February 2009
Duration
Notice period - Company
Notice period - executive
3 years
3 years
3 years
3 years
3 years
3 years
6 months*
6 months*
6 months**
3 months
3 months
3 months
6 months
6 months
6 months
3 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.
** 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.
Shares issued on exercise of compensation options (consolidated)
No options were exercised during the year.
Compensation options: Granted during the year ended 30 June 2009
Terms and Conditions for each Grant
Executives
Jonathan Pollard
Michael Roach
Andrew Pattinson
Total
Options issued
number
250,000
250,000
250,000
750,000
Grant date
1/10/2008
1/1/2009
1/2/2009
Fair value per option
at grant date ($)
Exercise price
per option ($)
0.061
0.032
0.031
0.37
0.29
0.29
Expiry date
31/10/2011
5/1/2012
5/2/2012
Compensation options: Vested during the year ended 30 June 2009
Terms and conditions for each grantVested
Options issued
number
Grant date
Fair value per option
at grant date ($)
Exercise price
per option ($)
Expiry date
Number
%
Directors
Gary Martin
Executives
Michael Bodner
Nick Georges
Jonathan Pollard
Michael Roach
Andrew Pattinson
Total
1,000,000
1/1/2008
500,000
250,000
250,000
250,000
250,000
2,500,000
1/5/2008
1/1/2008
1/10/2008
1/1/2009
1/2/2009
0.078
0.071
0.078
0.061
0.032
0.031
0.53
0.42
0.53
0.37
0.29
0.29
5/2/2011
333,333
33.3
13/5/2011
5/5/2011
31/10/2011
5/1/2012
5/2/2012
166,666
83,333
33.3
33.3
-
-
-
-
-
-
583,332
23.3
infomedia.com.au 25
Directors’ Report
REMUNERATION REPORT - AUDITED (CONTINUED)
Compensation options: Granted and vested during the year ended 30 June 2008
Terms and Conditions for each GrantVested
Options issued
number
Grant date
Fair value per option
at grant date ($)
Exercise price
per option ($)
Expiry date
Number
%
1,000,000
1/1/2008
500,000
250,000
1,750,000
1/5/2008
1/1/2008
0.078
0.071
0.078
0.53
0.42
0.53
5/2/2011
13/5/2011
5/5/2011
-
-
-
-
-
-
-
-
Directors
Gary Martin
Executives
Michael Bodner
Nick Georges
Total
DIRECTORS’ MEETINGS
The number of meetings of Directors (including meetings of committees of Directors) held during the year and the numbers of meetings attended by each
Director were as follows:
Committee meetings
Directors’ meetings
Audit, Risk & Governance
Number of meetings held:
Number of meetings attended:
Richard Graham
Gary Martin
Myer Herszberg
Frances Hernon
Andrew Moffat
9
9
9
8
9
9
2
-
-
1
2
2
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 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 financial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option
available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies.
CORPORATE GOVERNANCE
In recognising the need for high standards of corporate behaviour and accountability, the Directors of Infomedia Ltd support and have adhered to the
principles of good corporate governance. The Company’s corporate governance statement is in the annual report.
AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES
The Directors received an auditor’s independence declaration from the auditor of the Company (refer page 71).
26 infomedia.com.au
Directors’ Report
NON-AUDIT SERVICES
Ernst & Young provided tax consulting services totalling $18,540 during the financial year ended 30 June 2009. The Directors are satisfied that the provision
of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The nature and scope of
the non-audit service provided means that auditor independence was not compromised.
Signed in accordance with a resolution of the Directors.
Richard David Graham
Chairman
Sydney, 26 August 2009
infomedia.com.au 27
Auditor’s Independence Declaration to the Directors of Infomedia Limited
In relation to our audit of the financial report of Infomedia Limited for the financial year ended 30 June
2009, 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
Garry Wayling
Partner
26 August 2009
14
Liability limited by a scheme approved
under Professional Standards Legislation
Income Statement
YEAR ENDED 30 June 2009
Notes
CONSOLIDATED
INFOMEDIA LTD
Sales revenue
Finance revenue
Revenue
Cost of sales
Gross profit
Employee benefits expense
Depreciation and amortisation
Finance costs
Operating lease rental
Other expenses
Profit before income tax
Income tax expense
Profit after income tax
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Dividends per share – ordinary (cents per share)
2009
$’000
51,317
419
51,736
(22,107)
29,629
(9,306)
(3,442)
(61)
(1,373)
(2,674)
12,773
(2,237)
10,536
3.32
3.32
2.80
3(i)
3(ii)
3(iii)
4
5
5
6
2008
$’000
51,731
760
52,491
(19,477)
33,014
(8,061)
(3,985)
(107)
(1,038)
(3,151)
16,672
(3,606)
13,066
4.01
4.01
3.20
2009
$’000
45,227
404
45,631
(13,268)
32,363
(9,189)
(3,030)
(61)
(891)
(707)
18,485
(1,844)
16,641
2008
$’000
39,394
740
40,134
(11,489)
28,645
(7,334)
(3,492)
(107)
(531)
(1,765)
15,416
(3,302)
12,114
infomedia.com.au 29
Balance Sheet
AT 30 June 2009
Notes
CONSOLIDATED
INFOMEDIA LTD
21(b)
7
8
30
9
10
12
13
15
16
17
18
19
4
20
20
2009
$’000
8,005
4,396
54
1,983
4,252
386
-
19,076
-
1,837
1,720
24,976
28,533
47,609
3,605
2,400
-
458
-
6,463
1,108
4,534
5,642
12,105
35,504
12,863
4,265
18,376
35,504
2008
$’000
14,247
5,220
82
529
888
-
-
20,966
-
2,052
-
20,453
22,505
43,471
3,826
2,042
331
569
-
6,768
1,372
2,796
4,168
10,936
32,535
16,368
1,628
14,539
32,535
2009
$’000
7,274
3,006
54
1,904
4,252
268
113
16,871
248
1,548
1,720
24,976
28,492
45,363
2,754
2,153
-
212
-
5,119
1,050
4,534
5,584
10,703
34,660
12,863
4,128
17,669
34,660
2008
$’000
13,299
2,949
58
436
888
-
-
17,630
248
1,598
-
16,413
18,259
35,889
3,115
1,381
138
265
1,457
6,356
1,223
2,531
3,754
10,110
25,779
16,368
1,684
7,727
25,779
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Derivatives
Income tax receivable
Intercompany
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Other financial assets
Property, plant and equipment
Prepayments
Intangible assets and goodwill
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Provisions
Income tax payable
Deferred revenue
Intercompany
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Provisions
Deferred tax liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Reserves
Retained profits
TOTAL EQUITY
30 infomedia.com.au
Cash Flow Statement
YEAR ENDED 30 June 2009
Notes
CONSOLIDATED
INFOMEDIA LTD
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Income tax paid
NET CASH FLOWS FROM OPERATING ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisition of property, plant and equipment
Purchase of assets of wholly owned subsidiaries
Purchase of intellectual property
Dividends received from wholly owned subsidiaries
NET CASH FLOWS FROM/(USED IN) INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Share buy back payment
Dividends paid on ordinary shares
NET CASH FLOWS FROM/(USED IN) FINANCING ACTIVITIES
2009
$’000
52,073
(45,016)
419
(2,272)
5,204
(801)
-
(441)
-
(1,242)
(3,505)
(6,699)
(10,204)
21(a)
13
20
6
2008
$’000
53,597
(36,900)
760
(4,276)
13,181
(541)
-
-
-
(541)
(1,370)
(12,713)
(14,083)
2009
$’000
38,781
(34,094)
404
(2,044)
3,047
(521)
(4,621)
(441)
6,715
1,132
(3,505)
(6,699)
(10,204)
NET (DECREASE) IN CASH HELD
(6,242)
(1,443)
(6,025)
Add opening cash brought forward
CLOSING CASH CARRIED FORWARD
21(b)
14,247
8,005
15,690
14,247
13,299
7,274
2008
$’000
40,358
(22,483)
740
(4,271)
14,344
(506)
-
-
-
(506)
(1,370)
(12,713)
(14,083)
(245)
13,544
13,299
infomedia.com.au 31
Statement of Changes in Equity
YEAR ENDED 30 June 2009
CONSOLIDATED
Contributed equity
Retained earnings
Other reserves
At 1 July 2008
Profit for the year
Income/(expense) recognised directly in equity
– Exchange difference on translating foreign operations
Cashflow hedges
– Gain/(loss) taken to equity
– Transferred to income statement
Total income recognised directly in equity
Total income for the year
EQUITY TRANSACTIONS
Cost of share based payments
Share buy back
Dividends
At 30 June 2009
$’000
16,368
-
-
-
-
-
-
-
(3,505)
-
12,863
$’000
14,539
10,536
-
-
-
-
10,536
-
-
(6,699)
18,376
$’000
1,628
-
193
2,977
(626)
2,544
2,544
93
-
-
4,265
YEAR ENDED 30 June 2008
CONSOLIDATED
Contributed equity
Retained earnings
Other reserves
At 1 July 2007
Profit for the year
Income/(expense) recognised directly in equity
– Exchange difference on translating foreign operations
Cashflow hedges
– Gain/(loss) taken to equity
– Transferred to income statement
Total income/(expense) recognised directly in equity
Total income/(expense) for the year
EQUITY TRANSACTIONS
Cost of share based payments
Share buy back
Dividends
At 30 June 2008
$’000
17,738
-
-
-
-
-
-
-
(1,370)
-
16,368
$’000
14,186
13,066
-
-
-
-
13,066
-
-
(12,713)
14,539
$’000
978
-
(11)
626
-
615
615
35
-
-
1,628
Total
$’000
32,535
10,536
193
2,977
(626)
2,544
13,080
93
(3,505)
(6,699)
35,504
Total
$’000
32,902
13,066
(11)
626
-
615
13,681
35
(1,370)
(12,713)
32,535
32 infomedia.com.au
Statement of Changes in Equity
YEAR ENDED 30 June 2009
INFOMEDIA LTD
Contributed equity
Retained earnings
Other reserves
At 1 July 2008
Profit for the year
Income/(expense) recognised directly in equity
– Exchange difference on translating foreign operations
Cashflow hedges
– Gain/(loss) taken to equity
– Transferred to income statement
Total income/(expense) recognised directly in equity
Total income/(expense) for the year
EQUITY TRANSACTIONS
Cost of share based payments
Share buy back
Dividends
At 30 June 2009
$’000
16,368
-
-
-
-
-
-
-
(3,505)
-
12,863
$’000
7,727
16,641
-
-
-
-
16,641
-
-
(6,699)
17,669
$’000
1,684
-
-
2,977
(626)
2,351
2,351
93
-
-
4,128
YEAR ENDED 30 June 2008
INFOMEDIA LTD
Contributed equity
Retained earnings
Other reserves
At 1 July 2007
Profit for the year
Income/(expense) recognised directly in equity
– Exchange difference on translating foreign operations
Cashflow hedges
– Gain/(loss) taken to equity
– Transferred to income statement
Total income/(expense) recognised directly in equity
Total income/(expense) for the year
EQUITY TRANSACTIONS
Cost of share based payments
Share buy back
Dividends
At 30 June 2008
$’000
17,738
-
-
-
-
-
-
-
(1,370)
-
16,368
$’000
8,326
12,114
-
-
-
-
12,114
-
-
(12,713)
7,727
$’000
1,023
-
-
626
-
626
626
35
-
-
1,684
Total
$’000
25,779
16,641
-
2,977
(626)
2,351
18,992
93
(3,505)
(6,699)
34,660
Total
$’000
27,087
12,114
-
626
-
626
12,740
35
(1,370)
(12,713)
25,779
infomedia.com.au 33
Notes to the Financial Statements
30 June 2009
1. CORPORATE INFORMATION
The financial report of Infomedia Ltd for the year ended 30 June 2009 was authorised for issue in accordance with a resolution of the Directors on
26 August 2009.
Infomedia Ltd is a company limited by shares incorporated and domiciled 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 financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and
Australian Accounting Standards. The financial report has also been prepared on a historical cost basis, except for derivative financial instruments that have
been measured at fair value.
(b) Statement of compliance
This financial report complied with Australian Accounting Standards as issued by the Australian Accounting Standards Board. This financial report also
complied with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
New/revised standards and interpretations applicable for the year commencing 1 July 2008 have been reviewed and it was determined that changes were not
required to the existing accounting policies adopted by Infomedia Ltd. Certain Australian Accounting Standards and interpretations have recently been issued
or amended but are not yet effective and have not been adopted by Infomedia Ltd for the current reporting period. The Directors have not yet assessed the
impact of these new or amended standards (to the extent relevant to Infomedia Ltd) and interpretations.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of Infomedia Ltd and its subsidiaries (“the Company”). The financial statements of
subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. Adjustments are made to bring into line any
dissimilar accounting policies that may exist. All inter-company balances and transactions, including unrealised profits arising from intra-group transactions,
have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered. Subsidiaries are consolidated from the date on which control is
transferred to the Company and cease to be consolidated from the date on which control is transferred out of the Company. Where there is loss of control of a
subsidiary, the consolidated financial statements include the results for the part of the reporting period during which Infomedia Ltd has control.
(d) Significant accounting judgements, estimates and assumptions
Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual
reporting period are:
•
Impairment of goodwill
The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash-
generating units to which the goodwill and intangibles with indefinite useful lives are allocated. The assumptions used in this estimation of recoverable
amount and the carrying amount of goodwill and intangibles with indefinite useful lives are discussed in Note 14.
•
Share based payment transactions
The Company measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which
they are granted. The fair value is determined by an external valuer using a binomial model, using the assumptions detailed in Note 23.
34 infomedia.com.au
Notes to the Financial Statements
30 June 2009
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
•
Research and development
Development costs are only capitalised by the group when it can be demonstrated that the technical feasibility of completing the intangible asset is valid so
that the asset will be available for use or sale.
(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 financial report are taken to the income statement.
Translation of financial reports of overseas operations
Both the functional and 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.
The functional currency of the overseas subsidiaries is as follows:
IFM Europe Ltd Euros
IFM Germany GmbH 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 flow statement, cash includes cash on hand and in banks, and money market investments readily convertible to cash within three
months, net of outstanding bank overdrafts.
(g) Trade and other receivables
Trade receivables, which generally have 30-60 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts.
An allowance for doubtful debts is made when there is objective evidence that the Company will not be able to collect the debts. Bad debts are written off
when identified.
infomedia.com.au 35
Notes to the Financial Statements
30 June 2009
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(h) Investments and other financial assets
Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classified as either financial assets at fair value through
profit or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. For the Company, the relevant category
is listed below:
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are carried
at amortised cost using the effective interest method. Gains and losses are recognised in profit or loss when the loans and receivables are derecognised or
impaired, as well as through the amortisation process.
Investments in subsidiaries
Investments in subsidiaries are recorded at cost.
(i) Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition are accounted for as follows:
•
Raw materials – purchase cost on a first-in-first-out basis
(j) Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Company’s interest
in the net fair value of the acquiree’s identifiable assets, liabilities and contingent liabilities.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s
cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other
assets or liabilities of the Company are assigned to those units or groups of units.
Each unit or group of units to which the goodwill is so allocated:
•
•
represents the lowest level within the Company at which the goodwill is monitored for internal management purposes; and
is not larger than a segment based on either the Company’s primary or the Company’s secondary reporting format determined in accordance with
AASB 114 Segment Reporting.
Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates.
When the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised.
When goodwill forms part of a cash-generating unit (group of cash-generating units) and an operation within that unit is disposed of, the goodwill associated
with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill
disposed of in this manner is measured based on the relative values of the operation disposed of and the portion of the cash-generating unit retained.
Impairment losses recognised for goodwill are not subsequently reversed.
36 infomedia.com.au
Notes to the Financial Statements
30 June 2009
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(k) Intangible assets
Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an intangible asset acquired in a business
combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation
and any accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure
is charged against profits in the year in which the expenditure is incurred.
Research and development costs are expensed as incurred. The relevant costs are capitalised and an intangible asset for development expenditure on an
internal project is recognised only when the Company can demonstrate the technical feasibility of completing the intangible asset so that it will be available
for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of
resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development.
Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated
amortisation and accumulated impairment losses. Any expenditure so capitalised is amortised over the period of expected benefits from the related project
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 profit or loss when the asset is derecognised.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets with finite lives are amortised over the useful life and
assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method
for an intangible asset with a finite useful life is reviewed at least at each financial year end. Changes in the expected useful life or the expected pattern
of consumption of future economic benefits embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, which
is a change in accounting estimate. The amortisation expense on intangible assets with finite lives is recognised in profit or loss in the expense category
consistent with the function of the intangible asset.
Intangible assets with indefinite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangibles are
not amortised. The useful life of an intangible asset with an indefinite life is reviewed each reporting period to determine whether indefinite life assessment
continues to be supportable. If not, the change in the useful life assessment from indefinite to finite is accounted for as a change in an accounting estimate
and is thus accounted for on a prospective basis.
(l) Impairment of assets
The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual
impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher
of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely
independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the
asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds
its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in those
expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is
treated as a revaluation decrease).
infomedia.com.au 37
Notes to the Financial Statements
30 June 2009
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or
may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed (with the exception of
goodwill) only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If
that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would
have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss
unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is
adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.
(m) Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
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:
2009
2008
Leasehold improvements:
5 to 20 years
5 to 20 years
Other plant and equipment:
3 to 15 years
3 to 15 years
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end.
(i) Impairment
The carrying values of property, plant and equipment are reviewed for impairment at each reporting date, with the recoverable amount being estimated when
events or changes in circumstances indicate that the carrying value may be impaired.
The recoverable amount of property, plant and equipment is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money
and the risks specific to the asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for the cash-generating unit to which the asset
belongs, unless the asset’s value in use can be estimated to be close to its fair value.
An impairment exists when the carrying value of an asset or cash-generating unit exceeds its estimated recoverable amount. The asset or cash-generating
unit is then written down to its recoverable amount.
(ii) Derecognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset)
is included in profit or loss in the year the asset is derecognised.
(n) Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires an assessment of whether the
fulfilment of the arrangement is dependent on the use of a specific asset or assets and the arrangement conveys a right to use the asset.
38 infomedia.com.au
Notes to the Financial Statements
30 June 2009
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(i) Company as a lessee
Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term. Lease incentives are recognised
in the income statement as an integral part of the total lease expense.
(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
financial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services.
(p) Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of
resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where the Company expects some or all of a provision to be reimbursed, for example, under an insurance contract, the reimbursement is recognised as a separate
asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost.
(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) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
(s) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The
following specific recognition criteria must also be met before revenue is recognised:
Subscriptions
Subscription revenue is recognised when the copyright article has passed to the buyer with related support revenue being recognised over the service period.
Where the copyright article and related support revenue are inseparable then the revenue is recognised over the service period.
Interest
Control of a right to receive consideration for the provision of, or investment in, assets has been attained.
(t) Cost of 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.
infomedia.com.au 39
Notes to the Financial Statements
30 June 2009
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(u) Derivative financial instruments and hedging
Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative.
Any gains or losses arising from changes in the fair value of derivatives, except for those that qualify as cash flow hedges, are taken directly to profit or loss
for the year.
The fair value of forward currency contracts are calculated by reference to current forward exchange rates for contracts with similar maturity profiles.
For the purpose of hedge accounting, hedges are classified as cash flow hedges when they hedge the exposure to variability in cash flows that is attributable
either to a particular risk associated with a recognised asset or liability or to a forecast transaction. Infomedia Ltd currently has cash flow hedges attributable
to future foreign currency sales.
Cash flow hedges
Cash flow hedges are hedges of the group’s exposure to variability in cash flows that is attributable to a particular risk associated with anticipated future
sales that could affect profit or loss. The effective portion of the gain or loss on the hedging instrument is recognised directly in equity, while the ineffective
portion is recognised in profit or loss.
Amounts taken to equity are transferred out of equity and included in the measurement of the hedged transaction when the forecast transaction occurs.
The group tests each of the designated cash flow hedges for effectiveness on a monthly basis both retrospectively and prospectively using the “matched
terms” principle.
At each balance date, hedge effectiveness is measured in the first instance by determining whether there have been any changes to these “matched terms”.
When there have been no changes to these “matched terms”, the hedge is considered to be highly effective. Where there has been a change to these terms,
effectiveness is measured using the hypothetical derivative method.
The parent entity (Infomedia Ltd) sells software to its wholly owned subsidiaries (i.e. IFM North America Inc and IFM Europe Ltd). Sales to IFM North America
Inc are denominated in USD. Sales to IFM Europe Ltd are denominated in Euros. Sales to these wholly owned subsidiaries (“distributors”) are immediately
on-sold to customers in the same currency. There is no inventory held by the subsidiaries with the exception of fulfilling new first time through orders. First
time through orders will not be hedged. The group hedges foreign exchange exposure on intra-group sales as this exposure affects consolidated profit when
the sale is made to the external customer.
(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 financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business
combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the
reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future.
40 infomedia.com.au
Notes to the Financial Statements
30 June 2009
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent
that it is probable that taxable profit will be available against which the deductible temporary differences and the carry-forward of unused tax credits and
unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a
deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable
profit will be available against which the temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has become probable that future
taxable profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
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 is determined as if the company is a stand-alone taxpayer but modified 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 profits.
(w) Other taxes
Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST) except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of
the cost of acquisition of the asset or as part of the expense item as applicable; and
•
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet.
Cash flows are included in the cash flow statement on a gross basis and the GST component of cash flows arising from investing and financing activities, which
is recoverable from, or payable to, the taxation authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
infomedia.com.au 41
Notes to the Financial Statements
30 June 2009
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(x) Employee leave benefits
(i) Wages, salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled within 12 months of the reporting date are
recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the
liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable.
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to
be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience
of employee departures, and period of service. Expected future payments are discounted using market yields at the reporting date on national government
bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash flows.
(y) Share based payment transactions
The Company provides benefits to employees in the form of share based payment transactions, whereby employees render services in exchange for shares or
options over shares (“equity-settled transactions”).
There are currently two plans in place to provide these benefits:
(i) the Employee Share Plan (ESP), and
(ii) the Employee Option Plan (EOP).
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value
is determined by an external valuer using a binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Infomedia
Ltd (“market conditions”).
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions
are fulfilled, ending on the date on which the relevant employees become fully entitled to the option (“vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period
has expired and (ii) the number of options that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is formed based on the best
available information at balance date. No adjustment is made for the likelihood of market performance conditions being met as the effect of these conditions
is included in the determination of fair value at grant date.
Where the terms of an equity-settled option are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an
expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled option is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the option is
recognised immediately. However, if a new option is substituted for the cancelled option, and designated as a replacement option on the date that it is granted,
the cancelled and new option are treated as if they were a modification of the original option, as described in the previous paragraph.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the computation of earnings per share.
42 infomedia.com.au
Notes to the Financial Statements
30 June 2009
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
(z) Earnings per share
Basic earnings per share is determined by dividing the profit attributed to members of the parent after related income tax expense by the weighted average
number of ordinary shares outstanding during the financial year.
Diluted earnings per share is calculated as net profit attributable to members, adjusted for:
•
•
•
cost of servicing equity (other than dividends);
the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and
other non-discretionary changes in revenue or expenses during the period that would result from the dilution of potential ordinary shares;
divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.
infomedia.com.au 43
Notes to the Financial Statements
30 June 2009
Notes
CONSOLIDATED
INFOMEDIA LTD
3. EXPENSES
(i) Cost of sales
Direct wages
Other
Total cost of sales
(ii) Employee benefit expense
Salaries and wages (including on-costs)
Share based payment expense
Total employee benefit expense
(iii) Depreciation and amortisation
Depreciation of non-current assets:
– Leasehold improvements
– Office equipment
– Furniture and fittings
– 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
(iv) Research and development costs
Total research and development costs incurred during the period
Less: development costs deferred
Net research and development costs expensed
2009
$’000
13,829
8,278
22,107
9,213
93
9,306
132
624
24
218
998
607
1,837
2,444
3,442
10,880
(6,526)
4,354
23
13
2008
$’000
11,090
8,387
19,477
8,026
35
8,061
132
845
27
302
1,306
698
1,981
2,679
3,985
9,575
(5,993)
3,582
2009
$’000
7,206
6,062
13,268
9,096
93
9,189
113
506
14
218
851
607
1,572
2,179
3,030
2008
$’000
4,275
7,214
11,489
7,299
35
7,334
103
715
10
302
1,130
698
1,664
2,362
3,492
10,016
(5,800)
4,216
8,746
(5,310)
3,436
44 infomedia.com.au
Notes to the Financial Statements
30 June 2009
4. INCOME TAX
The major components of income tax expense are:
Income statement
Current income tax
Current income tax charge
Adjustments in respect of current income tax of previous years.
Deferred income tax
Relating to origination and reversal of temporary differences
Income tax expense reported in the income statement
A reconciliation between tax expense and the product of accounting
profit before income tax multiplied by the Company’s applicable income tax rate is
as follows:
Accounting profit before income tax
At the Company’s statutory income tax rate of 30% (2008: 30%)
Adjustments in respect of dividend payments from within the tax consolidated group
Adjustments in respect of income 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
CONSOLIDATED
INFOMEDIA LTD
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2,576
(1,067)
728
2,237
12,773
3,832
-
(1,185)
(592)
182
-
2,237
3,286
(952)
1,272
3,606
16,672
5,002
-
(952)
(560)
116
-
3,606
1,871
(1,020)
993
1,844
18,485
5,545
(2,015)
(1,230)
(591)
171
(36)
1,844
3,057
(915)
1,160
3,302
15,416
4,625
-
(915)
(509)
101
-
3,302
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 the recognition criteria set out in the accounting policy for income taxes. Allocations under the tax funding
agreement are made after the finalisation 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 45
Notes to the Financial Statements
30 June 2009
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
CONSOLIDATED
Deferred tax assets
Allowance for doubtful debts
Other payables
Employee entitlement provisions
Other provisions
Currency exchange
Gross deferred income tax assets
Deferred tax income/(expense)
PARENT
Deferred tax liabilities
Prepayments
Derivatives
Property, plant and equipment
Deferred development costs
Intellectual property
Currency exchange
PARENT
Deferred tax assets
Allowance for doubtful debts
Other payables
Employee entitlement provisions
Other provisions
Currency exchange
Deferred tax income/(expense)
46 infomedia.com.au
BALANCE SHEET
INCOME STATEMENT
2009
$’000
2008
$’000
2009
$’000
2008
$’000
-
(1,276)
-
(4,805)
(125)
-
(6,206)
148
207
625
346
346
-
(267)
(90)
(3,399)
(175)
(6)
(3,937)
48
92
540
408
53
1,672
1,141
-
(1,275)
-
(4,806)
(125)
-
-
(267)
(90)
(2,941)
(175)
-
(6,206)
(3,473)
148
207
625
346
346
1,672
43
64
374
408
53
942
-
-
(90)
1,406
(50)
(6)
(100)
(115)
(85)
62
(294)
728
-
-
(90)
1,864
(50)
(105)
(143)
(252)
62
(293)
993
(1)
-
(30)
1,204
(209)
6
29
24
11
157
81
1,272
(2)
-
(30)
1,094
(209)
-
32
42
15
157
61
1,160
Notes to the Financial Statements
30 June 2009
5. EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing net profit for the year attributable to ordinary equity holders of the parent by the weighted average number of
ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net profit 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 reflects the income and share data used in the total operations basic and diluted earnings per share computations:
Net profit attributable to equity holders from continuing operations
Weighted average number of ordinary shares for basic earnings per share
Effect of dilution:
Share options
Adjusted weighted average number of ordinary shares for diluted earnings per share
CONSOLIDATED
2009
$’000
10,536
2008
$’000
13,066
Number of shares
Number of shares
317,723,325
325,818,373
57,416
-
317,780,741
325,818,373
Since the reporting date, prior to the completion of these financial statements, the Company has repurchased a further 121,104 shares through its buy back program at a
weighted average price of 29.80 cents per share.
Total equivalent shares outstanding on out-of-the-money options that were not dilutive for the respective periods but could potentially dilute earnings per share in the future
were 2,150,000 (2008: 1,450,000).
30 June 2009
CONSOLIDATED
INFOMEDIA LTD
6. DIVIDENDS PROPOSED OR PAID
(a) Dividends paid during the year:
Franked interim dividend – 0.7 cents (2008: 1.8 cents) per share
Prior year final franked dividend – 1.4 cents (2008: 2.1 cents) per share
Rounding
Total dividends paid during the year
(b) Dividends proposed and not recognised as a liability:
Final dividend – 2.1 cents per share, franked at 0.7 cents.
(2008: 1.4 cents, fully franked)
(c) Franking credit balance:
The amount of franking credits available for the subsequent financial year are:
– franking account balance as at the end of the financial year
– franking debits that will arise from the receipt of income tax refundable as
i at the end of the financial year
2009
$’000
2,215
4,485
(1)
6,699
2008
$’000
5,867
6,845
1
12,713
2009
$’000
2,215
4,485
(1)
6,699
2008
$’000
5,867
6,845
1
12,713
6,534
4,485
6,534
4,485
113
(113)
-
940
137
1,077
The tax rate at which paid dividends have been franked is 30% (2008: 30%). Dividends proposed will be franked at the rate of 30% (2008: 30%).
infomedia.com.au 47
Notes to the Financial Statements
30 June 2009
CONSOLIDATED
INFOMEDIA LTD
7. TRADE AND OTHER RECEIVABLES (CURRENT)
Trade debtors
Allowance for impairment loss (a)
Other debtors
(a) Allowance for impairment loss
2009
$’000
4,945
(644)
4,301
95
4,396
2008
$’000
5,048
(272)
4,776
444
5,220
2009
$’000
3,471
(494)
2,977
29
3,006
2008
$’000
2,705
(145)
2,560
389
2,949
Trade receivables are non-interest bearing and are generally on 30-60 day terms. A provision for impairment loss is recognised when there is objective evidence that an
individual trade receivable is impaired. An impairment loss/(profit) of $742,000 (2008: $(62,000)) has been recognised by the group and $426,000 (2008: $(108,000))
by the Company in the current year. These amounts have been included in the other expenses item. No individual amount within the impairment allowance is material.
The amount of the allowance/impairment loss is recognised as the difference between the carrying amount of the debtor and the estimated future cash flows expected
to be received from the relevant debtors.
Movements in the provision for impairment loss were as follows:
At 1 July
Charge for the year
Foreign exchange translation
Amounts written off
At 30 June
At 30 June the aging analysis of trade receivables is as follows:
272
742
(17)
(353)
644
488
(62)
(10)
(144)
272
145
426
(4)
(73)
494
252
(108)
4
(3)
145
Total
4,945
3,471
5,048
2,705
2009
2008
Consolidated
Infomedia Ltd
Consolidated
Infomedia Ltd
* Not impaired (NI).
Considered impaired (CI).
0-60 days NI*
0-60 days CI*
61-120 days NI*
61-120 days CI*
121+ days NI*
121+ days CI*
3,732
2,441
4,309
2,249
270
236
64
28
516
471
136
69
137
67
73
6
53
65
247
242
237
191
135
111
48 infomedia.com.au
Notes to the Financial Statements
30 June 2009
Notes
CONSOLIDATED
INFOMEDIA LTD
8. INVENTORIES
Raw materials
At cost
Total inventories at the lower of cost and net
realisable value
9. INTERCOMPANY (CURRENT)
Wholly owned controlled entities
10. OTHER FINANCIAL ASSETS (NON-CURRENT)
Investments in controlled entities
11
2009
$’000
2008
$’000
2009
$’000
2008
$’000
54
54
-
-
-
-
82
82
-
-
-
-
54
54
113
113
248
248
58
58
-
-
248
248
11. INTERESTS IN CONTROLLED ENTITIES
Name
IFM Europe Ltd
– ordinary shares
Infomedia Investments Pty Ltd**
Country of
incorporation
Percentage of equity
interest held by the
Company (directly
or indirectly)
2009
%
United Kingdom
100
247
247
– ordinary shares – nil (2008:$2)
Australia
100
Datateck Publishing Pty Ltd***
– ordinary shares – $4
AutoConsulting Pty Ltd**
Australia
100
– ordinary shares – nil (2008:$1)
Australia
100
IFM North America Inc
– ordinary shares
United States
of America
IFM Germany GmbH*
Germany
100
100
*
Investment is held by IFM Europe Ltd.
** Entity was deregistered on 3 April 2009.
*** Infomedia Ltd purchased the assets of Datateck Publishing Pty Ltd on 28 February 2009 for their book value of $4,884,000.
-
-
-
1
-
-
-
-
1
-
248
248
infomedia.com.au 49
CONSOLIDATED
INFOMEDIA LTD
2009
$’000
2008
$’000
2009
$’000
2008
$’000
950
(644)
306
6,702
(5,493)
1,209
272
(131)
141
3,021
(2,840)
181
10,945
(9,108)
1,837
944
(512)
432
6,036
(4,890)
1,146
275
(116)
159
2,938
(2,623)
315
10,193
(8,141)
2,052
928
(642)
286
6,281
(5,316)
965
225
(109)
116
3,021
(2,840)
181
10,455
(8,907)
1,548
518
(205)
313
4,932
(4,036)
896
140
(66)
74
2,938
(2,623)
315
8,528
(6,930)
1,598
Notes to the Financial Statements
30 June 2009
12. PROPERTY, PLANT AND EQUIPMENT
(a)
Leasehold improvements
At cost
Accumulated amortisation
Office equipment
At cost
Accumulated depreciation
Furniture and fittings
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
50 infomedia.com.au
Notes to the Financial Statements
30 June 2009
12. PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
(b) Reconciliation of property, plant and equipment carrying values
CONSOLIDATED
INFOMEDIA LTD
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Leasehold improvements
Carrying amount – opening balance
Transfer of assets
Additions
Disposals
Depreciation
Carrying amount – closing balance
Office equipment
Carrying amount – opening balance
Transfer of assets
Additions
Disposals/Write-off
Depreciation
Carrying amount – closing balance
Furniture and fittings
Carrying amount – opening balance
Transfer of assets
Additions
Disposals
Depreciation
Carrying amount – closing balance
Plant and equipment
Carrying amount – opening balance
Additions
Depreciation
Carrying amount – closing balance
432
-
6
-
(132)
306
1,146
-
703
(16)
(624)
1,209
159
-
8
(2)
(24)
141
315
84
(218)
181
564
-
-
-
(132)
432
1,600
-
391
-
(845)
1,146
173
-
13
-
(27)
159
480
137
(302)
315
313
83
3
-
(113)
286
896
144
431
-
(506)
965
74
53
3
-
(14)
116
315
84
(218)
181
414
-
2
-
(103)
313
1,262
-
349
-
(715)
896
66
-
18
-
(10)
74
480
137
(302)
315
infomedia.com.au 51
Notes to the Financial Statements
30 June 2009
CONSOLIDATED
INFOMEDIA LTD
Development
costs1
Intellectual
property2
Goodwill 2
$’000
$’000
$’000
Total
$’000
Development
costs1
Intellectual
property2
Goodwill 2
$’000
$’000
$’000
Total
$’000
13. INTANGIBLE ASSETS AND GOODWILL
At 1 July 2008
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
Year ended 30 June 2009
At 1 July 2008, net of accumulated
amortisation and impairment
Purchase from wholly owned subsidiary
Additions
Amortisation
At 30 June 2009, net of accumulated
amortisation and impairment
At 30 June 2009
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
15,457
(4,128)
11,329
2,096
(1,513)
583
8,541
-
8,541
26,094
(5,641)
20,453
13,423
(3,619)
9,804
2,096
(1,513)
583
11,329
-
6,526
(1,837)
583
-
441
(607)
8,541
20,453
-
-
-
-
6,967
(2,444)
9,804
1,986
5,800
(1,572)
583
-
441
(607)
6,026
-
6,026
6,026
2,515
-
-
21,545
(5,132)
16,413
16,413
4,501
6,241
(2,179)
16,018
417
8,541
24,976
16,018
417
8,541
24,976
21,983
(5,965)
16,018
2,537
(2,120)
417
8,541
-
8,541
33,061
(8,085)
24,976
21,209
(5,191)
16,018
2,537
(2,120)
417
8,541
-
8,541
32,287
(7,311)
24,976
1. Internally generated.
2. Purchased as part of business/territory acquisition.
Development costs that meet the recognition criteria as an intangible asset have been capitalised at cost. This intangible asset has been assessed as having a finite 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 three years.
52 infomedia.com.au
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
9,464
(2,147)
7,317
7,317
5,993
(1,981)
2,096
(815)
1,281
1,281
-
(698)
8,541
-
8,541
8,541
-
-
20,101
(2,962)
17,139
8,114
(1,956)
6,158
17,139
5,993
(2,679)
6,158
5,310
(1,664)
2,096
(815)
1,281
1,281
-
(698)
6,026
-
6,026
6,026
-
-
16,236
(2,771)
13,465
13,465
5,310
(2,362)
11,329
583
8,541
20,453
9,804
583
6,026
16,413
15,457
(4,128)
11,329
2,096
(1,513)
583
8,541
-
8,541
26,094
(5,641)
20,453
13,423
(3,619)
9,804
2,096
(1,513)
583
6,026
-
6,026
21,545
(5,132)
16,413
13. INTANGIBLE ASSETS AND GOODWILL
(CONTINUED)
At 1 July 2007
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
Year ended 30 June 2008
At 1 July 2007, net of accumulated
amortisation and impairment
Additions – development
Amortisation
At 30 June 2008, net of accumulated
amortisation and impairment
At 30 June 2008
Cost (gross carrying amount)
Accumulated amortisation
Net carrying amount
14. IMPAIRMENT TESTING OF GOODWILL
Goodwill acquired through business combinations or territory acquisition have been allocated to four individual cash-generating units, each of which is a reportable segment
(refer Note 28) for impairment testing as follows:
•
•
•
•
Asia Pacific
Europe
North America
Latin and South America
The recoverable amount of each cash-generating unit has been determined based on a value in use calculation using cash flow projections as at 30 June 2009 based on financial
budgets approved by the Board for the 2010 financial year extrapolated for a five year period on the basis of 5% growth together with a terminal value.
The pre-tax discount rate applied to cash flow projections is 14% (2008: 14%). The discount rate reflects management’s estimate of the time value of money and the rates
specific to the unit.
Carrying amount of goodwill allocated to each of the cash-generating units is as follows:
CONSOLIDATED
Carrying amount of goodwill
PARENT
Carrying amount of goodwill
Asia Pacific
$’000
1,759
Europe
$’000
3,973
North America
Latin and
South America
$’000
2,001
$’000
808
2009
$’000
8,541
Total
2008
$’000
8,541
8,541
6,026
infomedia.com.au 53
Notes to the Financial Statements
14. IMPAIRMENT TESTING OF GOODWILL (CONTINUED)
Key assumptions used in value in use calculations:
The following describes each key assumption on which management has based its cash flow projections when determining the value in use of its cash-generating units:
•
•
•
•
•
the Company will continue to have access to the data supply from automakers over the budgeted period;
the Company will not experience any substantial adverse movements in currency exchange rates;
the Company’s research and development program will ensure that the current suite of products remain leading edge;
the Company is able to maintain its current gross margins; and
the discount rates estimated by management are reflective of the time value of money.
Sensitivity to changes in assumptions:
Growth rate assumptions – Management notes if negative growth rates are applied to revenues, by 5% over the five year period, this still yields a recoverable amount to be
above its carrying amount.
Discount rate assumptions – Management recognises that the time value of money may vary from what has been estimated. Management notes that applying a discount rate
of double the current rate still yields the recoverable amount to be above its carrying amount.
Foreign exchange rate assumptions – Management notes that applying an AUD/USD exchange rate of $1.00 and an AUD/EUR exchange rate of $0.75 still yields the recoverable
amount to be above its carrying amount.
30 June 2009
Notes
CONSOLIDATED
INFOMEDIA LTD
2009
$’000
686
2,919
3,605
2,135
265
2,400
458
458
-
-
2008
$’000
796
3,030
3,826
1,803
239
2,042
569
569
-
-
2009
$’000
384
2,370
2,754
1,888
265
2,153
212
212
-
-
2008
$’000
592
2,523
3,115
1,142
239
1,381
265
265
1,457
1,457
15. TRADE AND OTHER PAYABLES (CURRENT)
Trade creditors
Other creditors
(a) Trade creditors are non-interest bearing and are normally settled on
30 day terms.
Due to the short term nature of these payables, their carrying value is
assumed to approximate their fair value.
16. PROVISIONS (CURRENT)
Employee benefits
Provision for non-cancellable surplus lease space and other lease incentives
15(a)
19(c)
19(a)
17. DEFERRED REVENUE (CURRENT)
Revenue in advance
18. INTERCOMPANY (CURRENT)
Wholly owned controlled entities
54 infomedia.com.au
Notes to the Financial Statements
30 June 2009
Notes
CONSOLIDATED
INFOMEDIA LTD
19. PROVISIONS (NON-CURRENT)
Employee benefits
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
iiiiiincentives provision:
Carrying amount at the beginning of the year
Utilised
Discount rate adjustment
Carrying amount at the end of the year
Current
Non-current
The provision for non-cancellable lease space and other lease incentives
has been made pursuant to the lease obligations under contract to the
extent that no future benefits 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.
(c) Movement in employee benefit provision:
Carrying amount at the beginning of the year
Utilised
Arising during the year
Carrying amount at the end of the year
Current
Non-current
16
16
2009
$’000
254
354
500
1,108
858
(300)
61
619
265
354
619
500
-
500
2,056
(1,869)
2,202
2,389
2,135
254
2,389
2008
$’000
253
619
500
1,372
1,385
(634)
107
858
239
619
858
500
-
500
2,105
(1,483)
1,434
2,056
1,803
253
2,056
2009
$’000
196
354
500
1,050
858
(300)
61
619
265
354
619
500
-
500
1,246
(1,233)
2,071
2,084
1,888
196
2,084
2008
$’000
104
619
500
1,223
1,385
(634)
107
858
239
619
858
500
-
500
1,295
(1,217)
1,168
1,246
1,142
104
1,246
infomedia.com.au 55
Notes to the Financial Statements
30 June 2009
CONSOLIDATED
INFOMEDIA LTD
20. CONTRIBUTED EQUITY AND RESERVES
Ordinary shares
2009
$’000
12,863
12,863
2008
$’000
16,368
16,368
2009
$’000
12,863
12,863
2008
$’000
16,368
16,368
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 or 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 2007
Shares repurchased
At 30 June 2008
Shares repurchased
At 30 June 2009
Number
$’000
325,971,572
(3,597,966)
322,373,606
(11,103,612)
311,269,994
17,738
(1,370)
16,368
(3,505)
12,863
On 1 April 2008, the Company commenced a share buy back (on market within 10/12 limit). This was reinitiated on 1 April 2009. As at 30 June 2009 the Company had
repurchased 14,701,578 shares for a total consideration of $4,875,000.
Capital management
When managing capital, the Company’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and benefits for
other stakeholders.
Subject to the Company’s financial position and future financial performance, the Company’s current dividend policy is to distribute in the order of 75-85% of profit after tax.
During the 2009 financial year, the Company paid dividends of $6.7 million (2008: $12.7 million).
The Company has no current plans to issue further shares on the market but intends to further reduce the capital structure through its share buy back policy.
Employee Option Plan
There were 900,000 (2008: 1,750,000) options issued during the current year at an average exercise price of $0.33 (2008: $0.50).
30 June 2009
CONSOLIDATED
Employee equity
benefits reserve
Foreign currency
translation reserve
Derivatives
reserve
Movement in reserves:
At 1 July 2007
Currency translation differences
Share based payments
Derivatives marked to market
At 30 June 2008
Currency translation differences
Share based payments
Derivatives marked to market
At 30 June 2009
$’000
1,023
-
35
-
1,058
-
93
-
1,151
$’000
$’000
(45)
(11)
-
-
(56)
193
-
-
137
-
-
626
626
-
-
2,351
2,977
INFOMEDIA LTD
Employee equity
benefits reserve
Derivatives
reserve
$’000
1,023
-
35
-
1,058
-
93
-
1,151
$’000
-
-
-
626
626
-
-
2,351
2,977
Total
$’000
978
(11)
35
626
1,628
193
93
2,351
4,265
Total
$’000
1,023
-
35
626
1,684
-
93
2,351
4,128
56 infomedia.com.au
Notes to the Financial Statements
20. CONTRIBUTED EQUITY AND RESERVES (CONTINUED)
Nature and purpose of reserves
Employee equity benefits reserve
This reserve is used to record the value of equity benefits provided to employees and Directors as part of their compensation. Refer to Note 23 for further details.
Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. It is also used
to record the effect of hedging net investments in foreign operations.
Derivatives reserve
The derivatives reserve is used to record the mark to market valuation of forward currency contracts at the balance sheet date that are considered effective hedges.
30 June 2009
CONSOLIDATED
INFOMEDIA LTD
21. STATEMENT OF CASH FLOWS
(a) Reconciliation of profit after tax to the net cash flows from operations
Profit from ordinary activities after income tax expense
Depreciation of non-current assets
Amortisation of non-current assets
Amortisation of employee options
Write-off of property, plant, and equipment
Other
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 benefit
(Increase)/decrease in deferred development costs
Increase/(decrease) in trade and other creditors
Increase/(decrease) in allowance for doubtful debts
Increase/(decrease) in provision for employee entitlements
Increase/(decrease) in other provisions
Increase/(decrease) in income tax payable
Increase/(decrease) in deferred income tax liability
Increase/(decrease) in revenue in advance
Net cash flow from operating activities
(b) Reconciliation of cash
Cash balance comprises:
– cash at bank
– cash on deposit
(c) Financing facilities available
At reporting date, the following financing facilities had been
negotiated and were available:
Total facilities:
USD13 million multi-currency cash advance facility
Facilities used at reporting date:
Facilities unused at reporting date:
2009
$’000
10,536
998
2,444
93
18
(5)
645
28
(3,174)
(531)
(6,526)
(221)
371
(239)
333
(717)
1,262
(111)
5,204
2008
$’000
13,066
1,306
2,679
35
-
5
2,264
(30)
(97)
302
(5,993)
1,344
(215)
(49)
(527)
(1,942)
970
63
13,181
2009
$’000
16,641
851
2,179
93
-
(5)
(7,166)
22
(3,178)
(552)
(5,800)
(703)
349
(294)
333
(448)
973
(248)
3,047
2008
$’000
12,114
1,130
2,362
35
-
5
4,391
(6)
(139)
308
(5,310)
1,363
(105)
(49)
(528)
(2,091)
853
11
14,344
928
7,077
8,005
2,959
11,288
14,247
197
7,077
7,274
2,231
11,068
13,299
-
-
-
13,537
-
13,537
-
-
-
13,537
-
13,537
infomedia.com.au 57
Notes to the Financial Statements
30 June 2009
CONSOLIDATED
INFOMEDIA LTD
22. COMMITMENTS AND CONTINGENCIES
(a) Lease expenditure commitments
Operating leases (non-cancellable):
Minimum lease payments
– not later than one year
– later than one year and not later than five years
– aggregate operating lease expenditure contracted for at balance date
2009
$’000
1,446
1,261
2,707
2008
$’000
1,102
2,802
3,904
2009
$’000
1,243
1,261
2,504
2008
$’000
667
2,344
3,011
Operating lease commitments are for office 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.
23. SHARE BASED PAYMENT PLANS
Employee Option Plan
The Employee Option Plan entitles the Company to offer “eligible employees” options to subscribe for shares in the Company. Options will be granted at a nil issue price unless
otherwise determined by the Directors of the Company and each option enables the holder to subscribe for one share. The exercise price for the options granted will be as
specified on the option certificate or, if not specified, the volume weighted average price for shares of the Company for the five days trading immediately before the day on which
the options were granted. The options may be exercised in accordance with the date determined by the 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:
Balance at beginning of year
- granted
- expired
- exercised
Balance at end of year
Notes
23(a)
23(b)
23(c)
23(d)
23(e)
2009
2008
Number of options
Weighted average
exercise price
Number of options
Weighted average
exercise price
1,950,000
900,000
(200,000)
-
2,650,000
$0.50
$0.33
$0.49
-
$0.44
1,300,001
1,750,000
(1,100,001)
-
1,950,000
$0.51
$0.50
$0.43
-
$0.50
(a) Options held at the beginning of the year:
The following table summarises information about options held by employees at 1 July 2008.
Number of options
200,000
1,000,000
250,000
500,000
Grant date
16/12/2005
1/1/2008
1/1/2008
1/5/2008
Earliest vesting date
16/12/2006
5/1/2009
5/1/2009
1/5/2009
(b) Options granted during the year:
The following table summarises information about options granted during the year.
Number of options
150,000
250,000
250,000
250,000
Grant date
1/07/2008
1/10/2008
1/1/2009
1/2/2009
Earliest vesting date
1/07/2009
5/10/2009
5/1/2010
5/2/2010
58 infomedia.com.au
Expiry date
16/1/2009
5/2/2011
5/5/2011
13/5/2011
Expiry date
5/11/2011
5/10/2011
5/1/2012
5/2/2012
Weighted average exercise price
$0.49
$0.53
$0.53
$0.42
Weighted average exercise price
$0.38
$0.37
$0.29
$0.29
Notes to the Financial Statements
23. SHARE BASED PAYMENT PLANS (CONTINUED)
(c) Options expired during the year:
The following table summarises information about options expired during the year.
Number of options
200,000
Grant date
16/12/2005
Earliest vesting date
16/12/2006
Expiry date
16/1/2009
Weighted average exercise price
$0.49
(d) Options exercised during the year:
There were no options exercised during the year.
(e) Options held at the end of the year:
The following table summarises information about options held by employees at 30 June 2009.
Number of options
1,000,000
250,000
500,000
150,000
250,000
250,000
250,000
Grant date
1/1/2008
1/1/2008
1/5/2008
1/7/2008
1/10/2008
1/1/2009
1/2/2009
Earliest vesting date
5/1/2009
5/1/2009
1/5/2009
1/7/2009
5/10/2009
5/1/2010
5/2/2010
Expiry date
5/2/2011
5/5/2011
13/5/2011
5/11/2011
5/10/2011
5/1/2012
5/2/2012
Weighted average exercise price
$0.53
$0.53
$0.42
$0.38
$0.37
$0.29
$0.29
(e) Other details regarding options:
The weighted average fair value of options granted during the year was $0.045 (2008: $0.076).
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
Granted
1/7/2008
7.5%
37%
6.75%
$0.38
$0.38
Granted
1/10/2008
7.5%
35%
5.14%
$0.37
$0.38
Granted
1/1/2009
10.0%
35%
3.21%
$0.29
$0.29
Granted
1/2/2009
10.0%
35%
2.84%
$0.29
$0.29
The expense recognised for employee services received during the year is shown in the table below:
Expense arising from equity-settled share based payment transactions
CONSOLIDATED
INFOMEDIA LTD
2009
$’000
93
2008
$’000
35
2009
$’000
93
2008
$’000
35
infomedia.com.au 59
Notes to the Financial Statements
24. PENSIONS AND OTHER POST-EMPLOYMENT PLANS
Superannuation commitments
Contributions are made by the Company in accordance with the relevant statutory requirements. Contributions by the Company for the year ended 30 June 2009 were 9%
(2008: 9%) of employees’ wages and salaries which are legally enforceable in Australia. The superannuation plans provide accumulation benefits.
25. KEY MANAGEMENT PERSONNEL DISCLOSURES
(a) Compensation of Key Management Personnel
(i) Compensation by category: Key Management Personnel
Short term
Post employment
Other long term
Share based payments
CONSOLIDATED
INFOMEDIA LTD
2009
$
1,857,458
102,710
17,667
75,024
2008
$
1,769,599
127,198
25,123
34,765
2009
$
1,201,899
102,710
17,667
55,408
2008
$
1,371,923
99,869
11,050
32,765
2,052,859
1,956,685
1,377,684
1,515,607
(b) Option holdings of Key Management Personnel (Consolidated)
30 June 2009
Balance at
beginning of period
Granted as
compensation
Options exercised
Expired
Directors
Gary Martin
Executives
Michael Bodner
Nick Georges
Michael Roach
Andrew Pattinson
Jonathan Pollard
1 July 2008
1,000,000
500,000
250,000
200,000
-
-
1,950,000
-
-
-
250,000
250,000
250,000
750,000
-
-
-
-
-
-
-
Balance at
end of period
30 June 2009
Vested at 30 June 2009
Total
Not exercisable
Exercisable
1,000,000
1,000,000
666,667
333,333
500,000
250,000
250,000
250,000
250,000
500,000
250,000
250,000
250,000
250,000
333,333
166,667
250,000
250,000
250,000
166,667
83,333
-
-
-
-
-
-
(200,000)
-
-
(200,000)
2,500,000
2,500,000
1,916,667
583,333
30 June 2008
Balance at
beginning of period
Granted as
compensation
Options exercised Net change other
Balance at
end of period
30 June 2008
Vested at 30 June 2008
Total
Not exercisable
Exercisable
-
-
-
-
-
-
(666,667)
1,000,000
1,000,000
1,000,000
-
500,000
500,000
500,000
(83,334)
(250,000)
-
-
250,000
200,000
-
250,000
200,000
-
250,000
200,000
(1,000,001)
1,950,000
1,950,000
1,950,000
-
-
-
-
-
-
Directors
Gary Martin
Executives
Michael Bodner
Peter Adams*
Nick Georges
Michael Roach
1 July 2007
666,667
1,000,000
-
500,000
83,334
250,000
200,000
-
250,000
-
1,200,001
1,750,000
* Resigned 31 March 2008.
60 infomedia.com.au
Notes to the Financial Statements
25. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED)
(c) Shareholdings of Key Management Personnel
30 June 2009
Number of shares held in Infomedia Ltd
Balance
30 June 2008
Granted as
compensation
On exercise
of options
Net change other
Directors
Richard Graham
Myer Herszberg
Gary Martin
Frances Hernon
Executives
Andrew Pattinson
Nick Georges
Michael Roach
Jonathan Pollard
Total
102,204,060
23,421,589
507,590
5,000
2,447,567
24,421
18,721
1,996
128,630,944
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance
30 June 2009
102,204,060
23,421,589
607,590
5,000
2,447,567
24,421
18,721
1,996
-
-
100,000
-
-
-
-
-
100,000
128,730,944
30 June 2008
Number of shares held in Infomedia Ltd
Balance
1 July 2007
Granted as
compensation
On exercise
of options
Net change
other
Balance
30 June 2008
Directors
Richard Graham
Myer Herszberg
Gary Martin
Frances Hernon
Executives
Andrew Pattinson
Peter Adams*
Nick Georges
Michael Roach
Jonathan Pollard**
Total
* Resigned 31 March 2008.
** Appointed 1 April 2008.
102,204,060
23,421,589
407,590
5,000
2,447,567
100,000
24,421
18,721
1,996
128,630,944
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100,000
-
-
(60,000)
-
-
-
102,204,060
23,421,589
507,590
5,000
2,447,567
40,000
24,421
18,721
1,996
40,000
128,670,944
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 received financial consulting services from Cowoso Capital Pty Limited, a company in which Andrew Moffat is a Director. The total consulting services paid for
the year ended 30 June 2009 of $17,060 (2008: $nil) were on normal commercial terms.
infomedia.com.au 61
Notes to the Financial Statements
26. AUDITOR’S REMUNERATION
Amounts received or due and receivable by the auditor of
Infomedia Ltd for:
– an audit or review of the financial report of the entity and any
other entity in the consolidated entity
– other services in relation to the entity and any other entity in
the consolidated entity
27. RELATED PARTY DISCLOSURES
Ultimate parent
Infomedia Ltd is the ultimate Australian parent company.
Wholly owned group transactions
CONSOLIDATED
INFOMEDIA LTD
2009
$
2008
$
2009
$
2008
$
194,428
199,250
167,328
172,150
18,540
212,968
-
199,250
18,540
185,868
-
172,150
(a) An unsecured, interest free loan of $nil (2008: $5,002) remains owing from IFM Germany GmbH to Infomedia Ltd.
(b) An unsecured, interest free loan of $nil (2008: $3,131,065) remains owing to Infomedia Investments Pty Limited from Infomedia Ltd.
(c) An unsecured, interest free loan of $nil (2008: $3,202,370) 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 $nil (2008: $386,219) remains owing from AutoConsulting Pty Limited to Infomedia Ltd. The loan is repayable in seven days upon demand.
(e) An unsecured, trade receivable of $620,116 (2008: $2,455,113) remains owing to IFM Europe Ltd from Infomedia Ltd.
(f) An unsecured, trade receivable of $733,565 (2008: $536,003) remains owing from IFM North America Inc. to Infomedia Ltd.
(g) During the year, a management fee of $nil (2008: $480,000) was paid to Datateck Publishing Pty Limited by Infomedia Ltd.
(h) During the year, Infomedia Ltd received $18,562,696 (2008: $13,543,755) from IFM Europe Ltd for intra-group sales.
(i) During the year, IFM Europe Ltd received $nil (2008: $432,071) from Infomedia Ltd for intra-group distribution services.
(j) During the year, Infomedia Ltd received $9,165,428 (2008: $8,973,238) from IFM North America Inc. for intra-group sales.
(k) During the year, IFM North America Inc received $nil (2008: $501,370) from Infomedia Ltd for intra-group distribution services.
(l) During the year, IFM Europe paid $728,553 (2008: $534,304) to IFM Germany GmbH for intra-group distribution services.
Entity with deemed significant influence over the Company
Wiser Equity Pty Limited, a company in which Richard Graham is a Director, owns 32.2% of the ordinary shares in Infomedia Ltd (2008: 31.1%).
62 infomedia.com.au
Notes to the Financial Statements
Distributors
Corporate
Eliminations
Total
Notes
Asia Pacific
Europe
$’000
$’000
North
America
$’000
Latin & South
America
Asia Pacific
$’000
$’000
$’000
$’000
10,564
23,875
12,022
4,856
40,540
(40,540)
51,317
419
51,736
(539)
513
(898)
175
19,879
(6,715)
12,415
28. SEGMENT INFORMATION
30 June 2009
Business segments
REVENUE
Segment revenue
Finance revenue
Consolidated revenue
Segment result
Finance revenue
Finance costs
Consolidated profit before income tax
Income tax expense
4
Consolidated profit after income tax
Assets
Segment assets
Unallocated assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Amortisation
Depreciation
CASH FLOW INFORMATION
1,759
6,416
2,895
808
-
-
-
92
909
1,292
31
-
17
232
-
58
-
-
-
-
-
-
538
2,444
831
Net cash flow from operating activities
(447)
529
(840)
175
5,787
Net unallocated cash flow from operating activities
Net cash flow from operating activities
Net cash flow from investing activities
Net unallocated cash flow from investing activities
Net cash flow from investing activities
Net cash flow from financing activities
Net unallocated cash flow from financing activities
Net cash flow from financing activities
-
-
(31)
(232)
-
-
-
-
(538)
-
419
(61)
12,773
(2,237)
10,536
11,878
35,731
47,609
2,201
9,904
12,105
801
2,444
998
5,204
-
5,204
(801)
(441)
(1,242)
-
(10,204)
(10,204)
-
-
-
-
-
-
-
-
infomedia.com.au 63
Notes to the Financial Statements
28. SEGMENT INFORMATION (CONTINUED)
30 June 2008
Business segments
REVENUE
Segment revenue
Finance revenue
Consolidated revenue
Segment result
Finance revenue
Finance costs
Distributors
Corporate
Eliminations
Total
NOTES
Asia Pacific
Europe
$’000
$’000
North
America
$’000
Latin & South
America
Asia Pacific
$’000
$’000
$’000
$’000
12,022
21,042
14,336
3,669
39,504
(38,842)
16
146
201
87
15,569
-
Consolidated profit before income tax
Income tax expense
4
Consolidated profit after income tax
Assets
Segment assets
Unallocated assets
Total assets
Liabilities
Segment liabilities
Unallocated liabilities
Total liabilities
Capital expenditure
Amortisation
Depreciation
CASH FLOW INFORMATION
Net cash flow from operating activities
Net unallocated cash flow from operating activities
Net cash flow from operating activities
Net cash flow from investing activities
Net unallocated cash flow from investing activities
Net cash flow from investing activities
Net cash flow from financing activities
Net unallocated cash flow from financing activities
Net cash flow from financing activities
64 infomedia.com.au
1,759
5,713
2,629
808
-
-
527
2,679
1,234
-
-
-
-
-
748
353
2
-
19
12
-
28
-
-
25
41
-
-
165
230
87
12,658
(2)
(12)
-
-
-
-
(527)
-
51,731
760
52,491
16,019
760
(107)
16,672
(3,606)
13,066
10,909
34,454
45,363
1,101
9,602
10,703
541
2,679
1,306
13,181
-
13,181
(541)
-
(541)
-
(14,083)
(14,083)
-
-
-
-
-
-
-
-
Notes to the Financial Statements
28. SEGMENT INFORMATION (CONTINUED)
Segment products and locations
On 1 December 2006, Infomedia sold its Business Systems division to an unrelated third party. The sale of this division made reporting by product segment less meaningful.
Consequently, management has defined geography to be its primary reporting segment commencing 1 July 2007. The comparative figures have been restated accordingly.
Secondary segment information is reported in a distributor and corporate classification. The corporate function designs and owns the intellectual property of the products as
well as manages head office functions for the group. The distributors perform the distribution functions for the group. The distributors purchase the products from corporate
and mark the prices up for resale to customers.
Segment accounting policies
Transfer prices between business segments are set on an arm’s length basis in a manner similar to transactions with third parties. Segment revenue and segment result include
transfer between business segments. These transfers are eliminated on consolidation.
Segment accounting polices are the same as the Company’s accounting policies described in Note 2. The geographical segment revenue is classified according to customer
destination as opposed to the billing source. Geographical assets have been classified according to location of the asset.
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Company’s principal financial instruments, other than derivatives, comprise cash and short term deposits.
The Company has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The Company also enters
into derivative transactions through forward currency contracts. The purpose is to manage the currency risks arising from the Company’s operations. It is, and has been
throughout the period under review, the Company’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Company’s financial
instruments are cash flow interest rate risk, liquidity risk, foreign currency risk and credit risk.
Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses
are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2 to the financial statements.
Market risk
Cash flow interest rate risk
The Company’s exposure to the risk of changes in market interest rates relates solely to the Company’s cash holding of $8,005,000 (2008: $14,247,000) with a floating interest rate.
The Company’s policy is to accept the floating interest rate risk with both its cash holdings and bank loans. Cash is held primarily with leading Australian banks for periods not
exceeding 30 days, as such any reasonably expected change in interest rates (+/- 1%) would not have a significant impact on post tax profit or equity.
Foreign currency risk
The Company has transactional currency exposures. These exposures mainly arise from the transactional sale of products and to a lesser extent the associated cost of sales
component relating to these products. As the Company’s product offerings are typically made on a recurring monthly subscription basis, there is a relatively high degree of
reliability in estimating a proportion of future cash flow exposures. Approximately half of the Company’s sales are denominated in United States dollars and around one-third
of the Company’s sales are denominated in Euro. The Company seeks to mitigate exposure to movements in these currencies by entering into forward exchange derivative
contracts under an approved hedging policy.
As a result of the Company’s recent investment in both its European and United States subsidiaries, the Company’s balance sheet can be affected by movements in both the
Euro and United States dollar against the Australian dollar.
At 30 June 2009, the group had the following exposure to US$ foreign currency that is not designated in cash flow hedges:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other assets
Financial liabilities
Trade and other payables
Other liabilities
Net exposure
Consolidated
Parent
2009
$’000
116
1,864
-
1,980
368
152
520
1,460
2008
$’000
1,031
1,404
-
2,435
938
233
1,171
1,264
2009
$’000
116
2,598
-
2,714
368
152
520
2,194
2008
$’000
1,031
1,940
-
2,971
938
233
1,171
1,800
infomedia.com.au 65
Notes to the Financial Statements
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
At 30 June 2009, the group had the following exposure to EUR foreign currency that is not designated in cash flow hedges:
Financial assets
Cash and cash equivalents
Trade and other receivables
Other assets
Financial liabilities
Trade and other payables
Other liabilities
Net exposure
Consolidated
Parent
2009
$’000
68
-
-
68
377
-
377
(309)
2008
$’000
1,007
-
-
1,007
294
-
294
713
2009
$’000
68
-
-
68
997
-
997
(929)
2008
$’000
1,007
-
-
1,007
2,749
-
2,749
(1,742)
The following sensitivity is based on the foreign currency risk exposures in existence at the balance sheet date:
At 30 June 2009, had the Australian dollar moved, as illustrated in the table below, with all other variables held constant, post tax profit and total equity would have been
affected as follows:
Judgements of reasonably possible movements:
Consolidated
AUD/USD +25%
AUD/USD – 25%
AUD/EUR +15%
AUD/EUR – 15%
Parent
AUD/USD +25%
AUD/USD – 25%
AUD/EUR +15%
AUD/EUR – 15%
Post tax profit
Higher/(Lower)
2009
$’000
(548)
685
85
(98)
(548)
685
85
(98)
2008
$’000
(115)
189
111
(183)
(115)
189
111
(183)
Total equity
Higher/(Lower)
2009
$’000
2008
$’000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Management believes the balance date risk exposures are representative of the risk exposure inherent in the financial instruments.
Credit risk
The Company’s credit risk with regard to accounts receivables is spread broadly across three automotive groups – manufacturers, distributors and dealerships. Receivable
balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not significant. As the products typically have a monthly life cycle and
are priced on a relatively low subscription price, the concentration of credit risk is typically low with automotive manufacturers being the exception.
With respect to credit risk arising from the other financial assets of the Company, which comprise cash and cash equivalents, available-for-sale financial assets and certain derivative
instruments, the Company’s exposure to credit risk arises from default of the counter party, with a maximum exposure equal to the carrying amount of these instruments.
Since the Company trades only with recognised third parties, there is no requirement for collateral.
Price risk
There are no items on the balance sheet as at 30 June 2009 that are subject price risk.
66 infomedia.com.au
Notes to the Financial Statements
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Liquidity risk
The Company’s exposure to liquidity risk is minimal given the relative strength of the balance sheet and cash flows from operations.
Given the nature of the Company’s operations and no borrowings, the Company does not have fixed or contracted payments at balances date other than with respect of its cash
flow hedges which are disclosed at Note 31. Consequently, the remaining contractual maturity of the group’s and parent entity’s financial liabilities is as stated in the balance
sheet and is less than 60 days. Deferred revenue requires no cash outflow.
Liquidity and interest rate risk
The following table sets out the carrying amount, by maturity, of the financial instruments exposed to interest rate or liquidity risk:
CONSOLIDATED
PARENT
YEAR ENDED 30 JUNE 2009
Less than
one year
Two to
five years
Greater than
five years
$’000
$’000
$’000
Weighted
average effective
interest rate %
Less than
one year
Two to
five years
Greater than
five years
$’000
$’000
$’000
Weighted
average effective
interest rate %
Floating rate
Cash and cash equivalents
Interest bearing liabilities
Trade and other payables
8,005
-
(3,605)
-
-
-
-
-
-
2.7
-
-
7,274
-
(2,754)
-
-
-
-
-
-
2.9
-
-
CONSOLIDATED
PARENT
YEAR ENDED 30 JUNE 2008
Less than
one year
Two to
five years
Greater than
five years
$’000
$’000
$’000
Weighted
average effective
interest rate %
Less than
one year
Two to
five years
Greater than
five years
$’000
$’000
$’000
Weighted
average effective
interest rate %
Floating rate
Cash and cash equivalents
14,247
Interest bearing liabilities
-
Trade and other payables
(3,826)
-
-
-
-
-
-
6.1
-
-
13,299
-
(3,115)
-
-
-
-
-
-
6.1
-
-
Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. Interest on financial instruments classified as fixed rate is fixed until
maturity of the instrument. The other financial instruments of the group and parent that are not included in the above tables are non-interest bearing and are therefore not
subject to interest rate risk.
infomedia.com.au 67
Notes to the Financial Statements
29. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED)
Derivative contracts
The following table summarises the forward exchange contracts on hand at 30 June 2009.
Maturity
Company buys
Company sells
Exchange rate
Company buys
Company sells
Exchange rate
CONSOLIDATED
PARENT
Company sells United States dollars (USD)
Quarter 1 2010 financial year
Quarter 2 2010 financial year
Quarter 3 2010 financial year
Quarter 4 2010 financial year
Company sells Euros (E)
Quarter 1 2010 financial year
Quarter 2 2010 financial year
Quarter 3 2010 financial year
Quarter 4 2010 financial year
Company sells United States dollars (USD)
Quarter 1 2011 financial year
Quarter 2 2011 financial year
Quarter 3 2011 financial year
Quarter 4 2011 financial year
Company sells Euros (E)
Quarter 1 2011 financial year
Quarter 2 2011 financial year
Quarter 3 2011 financial year
Quarter 4 2011 financial year
$A’000
2,910
3,246
3,521
3,804
$A’000
3,035
3,393
3,400
3,252
$A’000
3,603
2,586
2,959
919
$A’000
1,112
1,118
1,125
1,131
USD’000
2,238
2,243
2,363
2,462
E’000
1,650
1,750
1,720
1,640
USD’000
2,500
1,743
2,100
600
E’000
600
600
600
600
0.7691
0.6910
0.6711
0.6472
0.5437
0.5157
0.5058
0.5043
0.6939
0.6742
0.7095
0.6532
0.5395
0.5365
0.5334
0.5304
$A’000
2,910
3,246
3,521
3,804
$A’000
3,035
3,393
3,400
3,252
$A’000
3,603
2,586
2,959
919
$A’000
1,112
1,118
1,125
1,131
USD’000
2,238
2,243
2,363
2,462
E’000
1,650
1,750
1,720
1,640
USD’000
2,500
1,743
2,100
600
E’000
600
600
600
600
0.7691
0.6910
0.6711
0.6472
0.5437
0.5157
0.5058
0.5043
0.6939
0.6742
0.7095
0.6532
0.5395
0.5365
0.5334
0.5304
The mark to market valuation of these contracts at 30 June 2009 was $4,252,000, which is booked directly in equity.
Derivative contracts
The following table summarises the forward exchange contracts on hand at 30 June 2008.
Maturity
Company buys
Company sells
Exchange rate
Company buys
Company sells
Exchange rate
CONSOLIDATED
PARENT
Company sells United States dollars (USD)
Quarter 1 2009 financial year
Quarter 2 2009 financial year
Quarter 3 2009 financial year
Quarter 4 2009 financial year
Company sells Euros (E)
Quarter 1 2009 financial year
Quarter 2 2009 financial year
Quarter 3 2009 financial year
Quarter 4 2009 financial year
$A’000
2,892
1,987
1,656
1,747
$A’000
3,503
2,621
1,735
1,489
USD’000
2,500
1,700
1,425
1,533
E’000
2,060
1,544
1,006
872
0.8645
0.8556
0.8605
0.8775
0.5881
0.5891
0.5798
0.5856
$A’000
2,892
1,987
1,656
1,747
$A’000
3,503
2,621
1,735
1,489
USD’000
2,500
1,700
1,425
1,533
E’000
2,060
1,544
1,006
872
0.8645
0.8556
0.8605
0.8775
0.5881
0.5891
0.5798
0.5856
The mark to market valuation of these contracts at 30 June 2008 was $894,000, $888,000 of which considered effectively hedged and booked directly in equity with $6,000
booked to profit and loss.
68 infomedia.com.au
Notes to the Financial Statements
30. FINANCIAL INSTRUMENTS
Fair values
Set out below is a comparison by category of carrying amounts and fair values of all of the Company’s financial instruments recognised in the financial statements. The fair
values of derivatives have been calculated by discounting the expected future cash flows at prevailing interest rates.
CONSOLIDATED
Financial assets
Cash and cash equivalents
Trade and other debtors
Derivatives
Financial liabilities
Trade and other creditors
Interest bearing loans and borrowings
PARENT
Financial assets
Cash and cash equivalents
Trade and other debtors
Derivatives
Intercompany
Other financial assets (non-current)1
Financial liabilities
Trade and other creditors
Intercompany
Interest bearing loans and borrowings
Carrying Amount
Fair Value
2009
$’000
8,005
8,100
4,252
3,605
-
Carrying Amount
2009
$’000
7,274
6,630
4,252
113
248
2,754
-
-
2008
$’000
14,247
5,220
888
3,826
-
2008
$’000
13,299
2,949
888
-
248
3,115
1,457
-
Fair Value
2009
$’000
8,005
8,100
4,252
3,605
-
2009
$’000
7,274
6,630
4,252
113
1,092
2,754
-
-
2008
$’000
14,247
5,220
888
3,826
-
2008
$’000
13,299
2,949
888
-
7,004
3,115
1,457
-
1. Other financial 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.
31. SUBSEQUENT EVENTS
There has been no matter or circumstance that has arisen since the end of the financial year that has significantly affected the operations of the Company, the results of those
operations, or the state of affairs of the Company.
infomedia.com.au 69
Director’s Declaration
In accordance with a resolution of the Directors of Infomedia Ltd, I state that:
In the opinion of the Directors:
(a) The financial statements and notes of the Company and the consolidated entities are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s and consolidated entities’ financial position as at 30 June 2009 and of their performance for the year
ended on that date; and
(ii) complying with Accounting Standards and the 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.
(c) This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations
Act 2001 for the financial year ended 30 June 2009.
On behalf of the Board
Richard David Graham
Chairman
Sydney
26 August 2009
70 infomedia.com.au
Independent auditor’s report to the members of Infomedia Limited
Report on the Financial Report
We have audited the accompanying financial report of Infomedia Limited, which comprises the balance
sheet as at 30 June 2009, and the income statement, statement of changes in equity and cash flow
statement for the year ended on that date, a summary of significant accounting policies, other explanatory
notes and the directors’ declaration of the consolidated entity comprising the company and the entities it
controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation and fair presentation of the financial
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 financial 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 financial report, comprising the financial statements and notes, complies with
International Financial Reporting Standards as issued by the International Accounting Standards Board.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. 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 financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on our judgment, including the assessment of the risks of
material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, we consider internal controls relevant to the entity’s preparation and fair presentation of the
financial 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 entity’s 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 financial report.
We believe that the audit evidence we have obtained is sufficient 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 in the directors’ report.
62
Liability limited by a scheme approved
under Professional Standards Legislation
Auditor’s Opinion
In our opinion:
1.
the financial report of Infomedia Limited is in accordance with the Corporations Act 2001,
including:
i
ii
giving a true and fair view of the financial position of Infomedia Limited and the consolidated
entity at 30 June 2009 and of their performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Regulations 2001.
2.
the financial report also complies with International Financial Reporting Standards as issued by the
International Accounting Standards Board.
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2009. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is
to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
Auditor’s Opinion
In our opinion the Remuneration Report of Infomedia Limited for the year ended 30 June 2009, complies
with section 300A of the Corporations Act 2001.
Ernst & Young
Garry Wayling
Partner
Sydney
26 August 2009
Corporate Governance
Overview
This Corporate Governance Statement, which is current as at the date of the Directors’ Report, has been updated to reflect the actions taken by the
Company since its last annual report. The commentary that follows has been prepared in accordance with the ASX Listing Rules and, in particular, the various
“Guide(s) to reporting...” included in the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (Revised Principles and
Recommendations). Unless otherwise indicated, the measures taken were in place for the whole financial year.
Corporate governance review
The Company has in place charters, policies and procedures in support of the Revised Principles and Recommendations. During the reporting year, the
Board remains satisfied that the Company’s corporate governance practices are consistent with the spirit and intent of the Revised Principles and
Recommendations.
“If not, why not?”
ASX CGC Recommendation 2.1 – A majority of the board should be independent directors
ASX CGC Recommendation 2.2 – The chair should be an independent director
ASX CGC Recommendation 2.3 – The roles of chair and chief executive officer should not be exercised by the same individual
The Board currently comprises of four Non-executive Directors and one Executive Director.
The role of Chairman and Chief Executive Officer has been split since 31 December 2004. Despite having retired within the past five years as an executive
Mr Richard Graham remains the Company’s largest shareholder and is, therefore, not considered by the Board as an independent Chairman. Accordingly, the
Company does not fully 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. In addition, the
Board Charter permits board members to 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 Officer, is also not considered by the Board as independent. However, two of the Company’s continuing
Directors, Ms Hernon and Mr Andrew Moffat, meet the objective 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 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. 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. Ultimately, however, the Board accepts that its members remain in office upon the vote of the
Company’s shareholders and that they may elect members to the Board regardless of their standing, independent or otherwise.
In order to facilitate the discharge of their duties, including in respect of independent decision making, the Board confirmed in April 2004 its policy for
Directors obtaining independent professional advice at the expense of the Company.
COMMENTARY
The Board and senior management – structure and remuneration
ASX CGC Principle 1 – Lay solid foundations for management and oversight
Recognise and publish the respective roles and responsibilities of board and management
ASX CGC Principle 2 – Structure the board to add value
Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties
infomedia.com.au 73
Corporate Governance
ASX CGC Principle 8 – Remunerate fairly and responsibly
Ensure that the level and composition of remuneration is sufficient and reasonable and that its relationship to performance is clear
The Company’s Constitution requires a minimum of three and a maximum of seven Directors, of whom at least two must ordinarily be resident in Australia.
Under the Company’s Constitution, one third of the Directors, and any other Director not in such one third who has held office for three years or more, other
than the Chief Executive Officer, must retire by rotation each year. If eligible, the retiring Directors may offer themselves for re-election.
The Infomedia Board currently comprises five Directors and details of the names, terms of office, committee memberships, meeting attendance record, skills,
experience and expertise of each, along with photographs, appear in the Directors’ Report.
Since listing on the ASX in August 2000 in particular, the composition and size of the Infomedia Board has been shaped by its Constitution and the contribution
Directors are able to make, both individually and collectively. An emphasis has been, and through the interaction of the Board and the Lead Non-executive
Director for all matters that formerly fell within the ambit of the Remuneration & Nomination Committee, will continue to be, placed on promoting, among
other attributes, an appropriate mix of relevant skills, independence, expertise, business knowledge and executive and non-executive participation.
ASX CGC Recommendation 1.1 – Establish the functions reserved to the board and those delegated to management and disclose those functions
A formal Charter of the Board of Directors was adopted in early July 2004, following careful and considered deliberation by both the then 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. A summary
of the Charter of the Board can be found on the Company’s website.
ASX CGC Recommendation 2.1 – A majority of the board should be independent directors
ASX CGC Recommendation 2.2 – The chairperson should be an independent director
ASX CGC Recommendation 2.3 – The roles of chairperson and chief executive should not be exercised by the same individual
Commentary on these three ASX CGC Recommendations is found under the heading “If not, why not?” above.
ASX CGC Recommendation 2.4 – Establish a nomination committee and
ASX CGC Recommendation 8.1 – Establish a remuneration committee
Since July 2007 the Board has reassumed the functions of remuneration and nomination and appointed a Lead Non-executive Director for all matters that
formerly fell within the ambit of the Remuneration & Nomination Committee.
The Lead Non-executive Director 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 Lead Non-executive Director are considered by the Board and, where a new appointment has
been made, put to the shareholders at the next annual general meeting.
The Company has formalised a policy for the nomination and induction of Directors (Director Nomination & Induction Policy), a summary of which is available
on Infomedia’s website.
The Company no longer complies with ASX CGC Recommendations 2.4 and 8.1 that it should establish remuneration and nomination committees. Nevertheless,
the Board is of the view that given its size and available resources the appointment of a Lead Non-executive Director for all matters that formerly fell within
the ambit of its Remuneration & Nomination Committee is a better utilisation of its resources.
ASX CGC Recommendation 8.3 – Provide the information indicated in the Guide to reporting on Principle 8
Upon recommendation of the then Remuneration & Nomination Committee, a Remuneration and Performance Evaluation Policy for Directors and Senior
Executives was adopted by the Board in July 2004. The Policy outlines the criteria for assessing the performance of the Board as a whole, the Directors as
74 infomedia.com.au
Corporate Governance
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.
The Company also 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. In June 2005, the Board resolved to indefinitely suspend the
Employee Share Plan. Further detail of senior executive remuneration under the Employee Option Plan is included in the Remuneration Report.
ASX CGC Recommendation 8.2 – Clearly distinguish the structure of non-executive directors’ remuneration from that of executive directors and
senior management
In formulating the Remuneration and Performance Evaluation Policy for Directors and Senior Executives, regard was had to both market practice and to the
then best practice guidance provided in the ASX CGC Commentary.
In contrast to Executive Directors, Non-executive Directors are remunerated by way of fees and statutory superannuation contributions only: they do not
receive any additional retirement benefits and nor do they currently participate in any of the Company’s incentive arrangements. Non-executive Directors have
previously received options, but this practice was reconsidered with the introduction of the Remuneration and Performance Evaluation Policy for Directors and
Senior Executives in FY2004. The Board will continue to monitor this issue as it subscribes to the view 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.
Business conduct
ASX CGC Principle 3 – Promote ethical and responsible decision making
Actively promote ethical and responsible decision making
ASX CGC Recommendation 3.1 – Establish a code of conduct and disclose the code or a summary of the code
A formal Code of Conduct was adopted in April 2004 following careful and considered deliberation by both the then 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. 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 then Corporate Governance Committee, the Code of Conduct was refined 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 notification of matters which potentially
involve a compliance or business risk element. A summary of the Code of Conduct can be found on the Company’s website.
ASX CGC Recommendation 3.2 – Establish a policy concerning trading in company securities by directors, senior executives and employees, and disclose the
policy or a summary of the policy
A formal Policy on Share Trading by Company Directors, Officers and Employees was originally established in October 2001 and was reviewed, amended and
adopted by the Infomedia Board in April 2004, upon the recommendation of the then Corporate Governance Committee. It was further reviewed in the last
quarter of FY2006 and more recently in May 2008. On 29 May 2008, a revised Policy on Securities Trading by Company Directors, Officers and Employees was
adopted by the Board and a summary was placed on the Company’s website.
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Corporate Governance
Financial reporting and risk management
ASX CGC Principle 4 – Safeguard integrity in financial reporting. Have a structure to independently verify and safeguard the integrity of the company’s
financial reporting
ASX CGC Recommendation 4.1 – Establish an audit committee
ASX CGC Recommendation 4.2 – The audit committee should be structured so that it: consists only of non-executive directors; consists of majority of
independent directors; is chaired by an independent chair who is not the chair of the board; has at least three members
During this reporting period, Infomedia complied with the ASX CGC Recommendations accompanying ASX CGC Principle 4.2, relating to audit committee
composition, operation and responsibility.
ASX CGC Recommendation 4.3 – The audit committee should have a formal charter
ASX CGC Recommendation 4.3 – Provide the information indicated in the Guide to reporting on Principle 4
Infomedia originally established an audit committee prior to its listing on the ASX in August 2000. The Board continues to believe that the Company’s Audit,
Risk & Governance Committee is of “...sufficient size, independence and technical expertise to discharge its mandate effectively”. As noted in the discussion
around ASX CGC Recommendation 2.1 above, although traditionally the Board has applied an Executive Director/Non-executive Director classification to
its membership, the Board believes that the Audit, Risk & Governance Committee’s members meet an objective assessment of quantitative and qualitative
criteria for independence. As such the Committee meets the requirements for an independent Chairman and a majority of independent Directors under ASX
CGC Recommendation 4.2. A summary of the Audit, Risk & Governance Committee’s Charter can be found on the Company’s website.
The current Audit, Risk & Governance Committee acknowledges the importance of external auditor independence and has formalised procedures for the
rotation of engagement partners. The Company’s external auditor’s engagement partner was last rotated in FY2007.
ASX CGC Principle 7 – Recognise and manage risk. Establish a sound system of risk oversight and management and internal control
ASX CGC Recommendation 7.1 – The board or appropriate committee should establish policies on risk oversight and management
Upon the recommendation of the then Audit & Risk Committee, the Board adopted the Risk Management Policy in July 2004. During the FY2006 reporting
period, the then 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 & Governance Committee whilst the establishment
of risk management procedures, compliance and control rests with the Chief Executive Officer, Chief Financial Officer and Senior Executives and, at a daily
operating level, with departmental managers, line managers and individuals as part of regular business conduct.
A summary of the Company’s Risk Management Policy is available on the Company’s website, however, given the commercially sensitive nature of its content,
details of the Company’s Risk Management Plan have not been made public.
ASX CGC Recommendation 7.2 – Require management to design and implement the risk management and internal control system to manage the company’s
material business risks and report to it on whether those risks are being managed effectively. The board should disclose that management has reported to it
as to the effectiveness of the company’s management of its material business risks
ASX CGC Recommendation 7.3 – Disclose whether it has received assurances from the chief executive officer (or equivalent) and the chief financial officer
(or equivalent) that the declaration provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and
internal control and that the system is operating effectively in all material respects in relation to financial reporting risks
The Company’s financial reporting obligations for FY2009 have been fulfilled, as they have in previous years, in accordance with applicable legal and accounting
requirements: see the financial statements and notes contained in the Directors’ Report and the independent Audit Report.
76 infomedia.com.au
Corporate Governance
Having acted in accordance with the Risk Management Policy and Risk Management Plan, the Chief Executive Officer and the Chief Financial Officer have
provided the Board with the necessary certifications under ASX CGC Recommendation 7.3 and the Corporations Act.
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
ASX CGC Recommendation 5.2 – Provide the information indicated in the Guide to reporting on Principle 5
A Market Disclosure Policy was adopted by the Board in April 2004 following careful and considered deliberation by both the then 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 then Corporate Governance Committee as part of its review calendar in the final quarter of FY2006.
The review concluded that both the continuous and periodic reporting obligations imposed under the ASX Listing Rules, and the Company’s internal procedures in
respect of them, were well understood by Senior Management. A summary of the Market Disclosure Policy can be found on the Company’s website.
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 – Provide the information in the Guide to reporting on Principle 6
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 2009 Notice of Annual General Meeting and Explanatory Statement are
all available.
Infomedia has considered and adopted as appropriate to its circumstances, the various means of using electronic communications effectively as described in
the commentary following 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.
infomedia.com.au 77
Top 20 holdings as at 2 September 2009
Balance at 02-09-2009
100,277,501
23,421,589
10,353,567
8,809,532
2,447,567
2,032,910
2,000,000
1,700,229
1,000,000
1,000,000
934,417
926,559
800,000
607,590
500,000
500,000
500,000
451,500
450,000
424,202
%
32.226
7.527
3.327
2.831
0.787
0.653
0.643
0.546
0.321
0.321
0.300
0.298
0.257
0.195
0.161
0.161
0.161
0.145
0.145
0.136
Holders
434
2,302
1,739
3,151
213
7,857
Total Units
354,059
7,378,157
14,570,055
94,484,793
194,381,826
311,168,890
%
0.114
2.371
4.682
30.364
62.468
100.000
Additional Information
Holder name
WISER EQUITY PTY LTD
YARRAGENE PTY LTD
J P MORGAN NOMINEES AUSTRALIA LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR ANDREW PATTINSON
CITICORP NOMINEES PTY LIMITED
TOM HADLEY ENTERPRISES PTY LTD
NATIONAL NOMINEES LIMITED
MR PETER ALEXANDER BROWN
WISER CENTRE PTY LTD
BRAZIL FARMING PTY LTD
MR RICHARD GRAHAM
MR JOHN KENDALL PERRETT
MR GARY JOHN MARTIN
APPLIED SENSORS PTY LTD
CS FOURTH NOMINEES PTY LTD
WOODCLIFF SUPER PTY LTD
MR TERENCE HOFFMAN & MRS DORIS MARIE HOFFMAN
GATTEGNO SUPERANNUATION PTY LTD
A G & H A FIELDING PTY LTD
Analysis of holdings as at 2 September 2009
Security classes
Fully paid ordinary shares
Holdings ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
78 infomedia.com.au
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
Gary Martin – Chief Executive Officer and Executive Director
Frances Hernon
Myer Herszberg
Andrew Moffat
Company Secretary
Nick Georges
Chief Financial Officer
Jonathan Pollard
Registered Office
357 Warringah Road
Frenchs Forest NSW Australia 2086
Auditors
Share Registry
Lawyers
Ernst & Young
Ernst & Young Centre
680 George Street
Sydney NSW 2000
Computershare Registry Services Pty Ltd
GPO Box 7045
Sydney NSW 1115
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 79