Infomedia Annual Report 2010

Plain-text annual report

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Annual Report Table of Contents The theme of this year’s annual report is ‘the bottom line’ for the decade past. The double-underscore accounting symbol seen at the bottom of a column of ﬁ gures is meant to emphasise a result, outcome, or process. This year’s annual report presents the opportunity to look back on our ﬁ rst decade as a public company and our second decade as a specialist automotive software developer. In the narrative of this report, the executives take account of the Company’s achievements during the past decade and identify areas that could be improved in the decade ahead. The reports and dialogues herein show that Infomedia has in most ways been a quiet achiever which the Company’s investors and partners can be conﬁ dent in and proud to be part of. Results at a Glance Chairman’s Letter Accomplishments Beyond the Bits and Bytes CEO Report About Objective 1 About Objective 2 About Objective 3 About Objective 4 Microcat Parts Selling System 2020 Vision Ubiquitous Global Penetration Directors’ Overview Directors’ Report Auditor’s Independence Declaration Statement of Comprehensive Income Balance Sheet Cash Flow Statement Statement of Changes in Equity Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report Corporate Governance Additional Information Corporate Directory 3 4 7 8 10 12 14 16 18 20 21 22 32 33 34 35 36 37 75 76 78 84 85 © 2010 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. Results at a Glance Revenue* NPAT EBITDA † DPS Year Revenue* ($m) NPAT ($m) EBITDA ($m) DPS (c) 2000 21.1 7.7 12.6 2.7 2001 34.5 12.8 20.0 2.5 2002 43.8 13.4 20.9 2.75 2003 61.8 18.3 30.6 3.4 2004 69.6 20.7 35.7 3.8 2005 59.1 5.5 27.3 3.4 2006 55.6 18.1 25.8 11.0 2007 54.6 15.3 23.6 4.0 2008 2009 51.7 13.1 19.9 3.2 51.3 10.5 15.8 2.8 2010 50.5 11.3 18.1 2.4 * Revenue includes currency hedging gains/losses † Special dividend paid in 2006 infomedia.com.aU 3 “...Superservice Menus was immediately embraced by dealers...” Chairman’s Letter Fellow shareholders, We started this decade with our eyes set on It has been 20 years since the commencement of our achieving four key objectives: Electronic Parts Catalogue (EPC) work and 10 years 1. Expanding the number of customers we serve since the Company listed on the Australian Securities globally; Exchange. I would like to use this milestone to take stock of our results, as well as point to areas of focus for the years ahead. In 2000, the Company completed its ﬁ rst decade of being a specialist software developer and information publisher. Our ﬂ agship product, the Microcat® electronic parts selling system, survived its start-up phase with the generous support and encouragement of Ford around the world and 2. Expanding our core product offering with items that further extended our customers’ productivity gains; 3. Empowering our products with online connectivity via the Internet; and 4. Increasing our revenue, proﬁ t and shareholder value. several other great automakers in the Asia Paciﬁ c Over the past decade, the Company started well, but region. Microcat was a very innovative product that ended with work still to do. increased the productivity of parts personnel within dealerships and made EPC technology affordable to tens of thousands of dealers. daihatsu ford gm honda hyundai Isuzu jaguar kia land rover lexus mazda mercedes-benz mitsubishi subaru suzuki toyota Our licensing partners 1. Microcat subscriptions grew from 24,000 to 51,000, as we added new users globally for Daihatsu, Hyundai, Kia and Land Rover, and expanded coverage for Ford, Toyota and others. 2. Our second product success story, Superservice Menus®, was quickly embraced by dealers. Like Microcat, its value to them was obvious and measurable. Late in the decade, we broke new ground with the support of Toyota in the USA with the introduction of Auto PartsBridge®. Auto PartsBridge is a part of the Microcat PartsBridge™ suite of interactive online applications that is proving capable of materially increasing genuine parts sales and proﬁ tability. 3. The objective of extending our EPC products to the Internet has been more elusive. The Company has developed four Microcat Internet platforms (MARKET, LIVE.net, LIVE (browser) and PartsBridge) since 2001 and it will be early 4 infomedia.com.au Richard Graham Chairman in this new decade when we ﬁ nally crack that 2. Innovation is important to both the Company and nut. In contrast, Superservice Menus has made it its partners, and we will continue to hold it as successfully to the Internet, with six of its currently a worthy goal and core value. With Superservice 66 released implementations operating smoothly. Menus, we have conﬁ rmed that because of the 4. Revenue for the decade rose by 115%, while subscription numbers also grew 108%. But the Company didn’t see the incremental proﬁ t elasticity our modelling predicted. Net proﬁ t rose for the ﬁ rst half of the decade and then declined in the later half, due to higher development costs, amortisation of capitalised development and accelerated management costs. Dividends were paid to shareholders in every year across the decade as cash ﬂ ows and proﬁ ts permitted, even though overall market capitalisation declined. What have we learnt from these results and where will we improve? 1. Serving our licensees and users in the spirit of partnership and cooperation has built mutual Company’s value-adding to standard OEM data, dealers can make greater productivity strides and increase their service sales, proﬁ tability and customer satisfaction. Microcat PartsBridge shows much promise. As our innovations become more process oriented, the Company needs to lift its software engineering and architectural design disciplines accordingly. Keeping processes uniform across regions and OEMs allows us to produce each release on time and on budget. 3. Successful Internet product development needs to balance the certainty of traditional product design processes with the special needs of partners. We haven’t always had the optimal respect and special relationships. We understand balance of these recently, which has contributed that dealership sales productivity is an ever- to missed release schedules and higher costs. expanding goal and that increasingly OEMs (Original Equipment Manufacturers) need to interconnect with their dealers. As the Company moves forward, it will be more circumspect in terms of balancing being a trend setter with delivering well-architected product The Company will continue to build upon its good on time as promised. alliances and grow as our partners do. “innovation is important to both the Company and its partners.” infomedia.com.aU 5 Chairman’s Letter “I am optimistic about the outlook for the Company.” 4. Increasing expenditure on sales and development and translates them into powerful, reliable and doesn’t necessarily increase the output of either affordable productivity tools that work every day, in one if they are not working in sync. During the every language, in every place. decade, there was a shift in the Company from just being a self-sufﬁ cient software development company to seeking externally initiated development projects. I think that change may have had ramiﬁ cations that contributed to Lastly, I’d like to acknowledge our CEO of the past six years, Gary Martin, for the contributions he made to the Company during challenging times. Gary has represented the spirit and goodwill of the Company extended development times and budget overruns. to our OEM and dealership partners around the We are addressing this by returning to our roots. Sales and development will once again centre on expanding customer utilisation of our proven standard products. Focus on increasing new user world. He has done his utmost to further the mission and results of the Company. For all this, we are appreciative and wish him the very best as he leaves to pursue other ambitions. subscriptions will replace the more recent focus In closing, I’d like you to know that I am optimistic of increasing new one-off product development about the outlook for the Company. As we move or customisation projects. Since listing, the Company’s achievements have been positive in the areas of subscription growth, successful commercialisation of Superservice Menus and expansion of the OEM regions we serve. However, we haven’t yet met the goal of transitioning from DVD products to the Internet, which has affected promises to partners and our proﬁ tability. Recently, the Board has acted to bring about changes to remedy these shortcomings. into the Company’s third decade of software development, we continue to grow, to learn from and improve upon our performance, and contribute to our customers and shareholders. Infomedia is a company that can be relied upon to give our best to all. For these reasons and for the overall performance results that you will read about herein, I commend this Annual Report to you, and look forward to seeing you at the Annual General Meeting if you are able to attend in person. Our vision for the 2020 milestone is to see Sincerely Yours, Infomedia’s brands expand in use and recognition. Despite industry changes, economic changes or periodic commercial set-backs, we will strive for our products to become ubiquitous productivity tools in every automotive dealership in the world. To do that, we recognise that we have to be more than just a good supplier. We must be an outstanding partner Richard David Graham that understands our partners’ business needs Chairman of the Board 6 infomedia.com.au “We’ve focused on creating systems that empower our customers’ parts and service sales personnel.” Accomplishments Beyond the Bits and Bytes Infomedia develops specialised software systems Selling genuine parts and service proﬁ tably is that give our customers access to accurate parts achieved by having the right product, at the right and service information to help them grow their price, and sold by the right person. The Microcat suite sales and proﬁ ts. This is what we do, but does it tell of solutions, including Superservice Menus, helps all three of these “Ps”. It can quickly and accurately identify the part to ﬁ x a vehicle the ﬁ rst time, or it can quickly and proﬁ tably quote for a service job. With our products doing the detailed identiﬁ cation and quotation work, the sales personnel are freed up to devote more time to customer care and service. you why we do it? From day one, we’ve been driven to produce solutions that improve the efﬁ ciency and productivity of our customers’ businesses. We’ve aimed to develop software that is easy to use so that dealership personnel can increase the sales levels and proﬁ t margins of their parts and service businesses. We’ve focused on creating systems that empower our customers’ parts and service sales personnel. We aim to make their sales performance and results better by facilitating them handling their customers’ parts and service patronage more quickly, more accurately and more proﬁ tably than they could with any other set of tools. Infomedia’s systems give time back to dealerships so they can invest in building relationships with their customers and improve the sales experience for them. As technology partners, we empower our customers to sell in an increasingly competitive world where customer service expectations are increasing and product margins are stressed. This makes them more price competitive but still proﬁ table, more able to build customer loyalty and able to go home at the end of the day satisﬁ ed with their achievements. When we consider that our systems process more than one million transactions each day, we feel a sense of satisfaction and accomplishment that makes our own hard work worthwhile and us a company you can be proud of investing in. infomedia.com.aU 7 The Microcat parts selling system “I have been privileged to lead a team that is dedicated to serving our customers and shareholders around the world...” CEO Report As this report will be the last one I pen as the CEO, it Looking back on FY2010 for a moment, the affords me the chance to personally reﬂ ect. The theme Company’s reported sales revenue for the year was this year of reviewing our results over the past decade is appropriate. The six years of service I have offered as your CEO, and seven years before that as General Manager and Director of Sales and Marketing, have $45,300,000 which represents a 16.6% reduction over the previous corresponding period. Net proﬁ t after tax was $11,300,000. been a rewarding experience. I have been privileged to FY2010 saw difﬁ cult conditions in our traditional core lead a team that is dedicated to serving our customers EPC business, with a 20% decline, largely due to the and shareholders around the world in an intensely stronger Australian dollar and continued comparative competitive and challenging environment. effect of last year’s contract completions. In positive This year’s report covers our results in achieving the four key objectives outlined by our Chairman across the decade. While we have continuously strived to create shareholder value, we have faced some difﬁ culties along the way. Higher exchange rates, higher customer acquisition costs and strategic changes that brought with them higher business terms, we continued to sell into territories where our customers’ businesses are expanding, in particular Kia and Hyundai in Asia Paciﬁ c and Europe. In Europe, new Toyota markets in Greece, Portugal and Italy opened for Microcat LIVE, and Land Rover renewed its agreement with the Company for a further three years. In North America, Ford Export Operations and costs, have dampened returns through the decade. Global Growth Initiatives continued their association Changes to our technology development delayed with Infomedia with a further renewal. Also in North efforts to maximise returns for our customers and America, Auto PartsBridge launched commercially, the Company. However, these changes are paving with Toyota USA dealers servicing collision shops the way for future Company successes. across the country. Gary Martin interviewed at the 2010 NADA (National Automotive Dealers Association) Convention 8 infomedia.com.au “...licensees totalled 25 at the close of the financial year, covering dealers in over 160 countries.” Gary Martin CEO FY2011 Outlook The outlook for revenue growth in FY2011 is positive, with organic growth from existing business, as well as new opportunities for various Company solutions. Solid growth from Superservice Menus and Microcat PartsBridge is expected despite effects such as dealership consolidation causing a slight dampening effect on the Company’s EPC business relative to FY2010. During the past decade, our customers’ operating environments have changed and adapted to market conditions and emerging technologies. This of course means that Infomedia must continue to assess new ways of meeting customer needs, but always with the balanced view of returning value to its shareholders and satisfying the growing needs of customers. I believe Infomedia will achieve this and is set for another positive decade. Gary Martin CEO infomedia.com.aU 9 Superservice Menus continued to experience solid growth around the world. Revenue increased by 23% during FY2010, led by successful delivery of increased penetration from customers such as Kia and Hyundai globally and, more recently, the introduction of the solution for Jaguar Land Rover. Further increases were also achieved through combined selling efforts with our DMS (Dealer Management System) partners in Australia and New Zealand. New customers during the year included Jaguar Land Rover in the United Kingdom, Germany, and Spain, Kia Germany, Toyota New Zealand, Hyundai Canada, Isuzu United Kingdom, Suzuki Belgium, and Mitsubishi Sweden. Automaker licensees totalled 25, at the close of the ﬁ nancial year, covering dealers in over 160 countries. The positive expansion of Superservice Menus shows that this solution is doing what it was intended to: help dealerships grow their service department proﬁ tability. Our lubrication recommendations business in Asia Paciﬁ c expanded to several new customers in Australia including Hi Tec Oils, Phoenix Lubricants, Liqui Moly, National Lube and Penrite Oils. Valued partners, including BP (Australia), Caltex (Australia), Castrol (Australia and New Zealand), Chevron (New Zealand), Mobil (Australia and New Zealand) and Valvoline (Australia), all renewed their business with us during the year. About Objective 1 – Expanding the Number of Customers We Serve Globally “…Europe proved successful in allowing us to build new relationships and bring along newer products…” From 24,000 users of all our solutions in FY2000, which we opened in 2004. This more direct approach to 49,000 users in FY2006 and to more than 57,000 allowed us to get closer to our end-user customers. users in FY2010, we have established a strong Our change in Europe proved successful in allowing global user base. Over the last decade we won new us to build new relationships and bring along newer customers, lost a few, and renewed many valued products like Superservice Menus. We followed partnerships. RG: The afﬁ liation with Ford Europe in 1997 really set the foundation for our expansion efforts into the same course of evolving with the competitive environment when we established our Detroit ofﬁ ce to serve the North American market in 2005. this decade. By 2001 we had excellent partnerships GM: In 2006 Kia came on board, while by this stage with Ford, serving markets in Europe, Asia Paciﬁ c, GM had signalled its intention to tender for a single North America and Latin America. We were working global supplier. That resulted in a wind-down of globally with Hyundai and Land Rover and across our GM subscriptions by 2009, but I would like to regions with Toyota, Daewoo, General Motors (GM), think not forever. Despite this loss, the addition of Mitsubishi and others. The strategic acquisitions Kia increased the number of automaker partners of Datateck in 2000, and EDS Parts Imager in 2002, around the world using our parts systems to a total helped to advance our growth opportunities. of 15 (as at 2006). AC: The move to a competitive environment in MR: At this time we entered into a signiﬁ cant contract Europe established the need for our European ofﬁ ce, renewal phase with many of our data licensees. Superservice Menus for Mitsubishi 10 infomedia.com.au Richard Graham Chairman Gary Martin CEO Michael Roach Director Asia Pacific Alison Clinch Director of Marketing Countries where our products are used We were able to re-sign the majority of OEM FY2010 saw the renewal of parts solution contracts, licensees based on our history of reliable service including our agreement with Ford Europe and and results for their dealerships. By 2006, we also Ford Export and Growth, and lubrication database supplied Superservice Menus to nine automotive manufacturers in 20 countries. We had long known the ability of Superservice Menus to achieve better results for our customers, so it was pleasing to see contracts with Castrol, Caltex and Mobil in Australia and Mobil in New Zealand. We experienced further expansion into Toyota Europe markets with disc based Microcat LIVE. that translate into real business opportunities. Objective 1 – Outcomes: GM: By 2010, Kia joined Hyundai and Jaguar Land • Increased our subscription numbers by 108% Rover as global supporters of Superservice Menus. over the decade. The product delivered strong revenue growth, as evidenced by the 20% increase in FY2010 compared to FY2009. Notably, Kia Germany became the largest launch of Superservice Menus to date, with over 500 dealers immediately taking it up. The delivery of the online version of Superservice Menus to Hyundai Canada was also a signiﬁ cant achievement in North America. • Increased our automaker partnerships to 25 from 11. • Added users in 14 further countries to bring the total countries served to 160. • Expanded application production to 29 languages, ﬁ ve more than the start of the decade. Assessment: Accomplished and Continuing infomedia.com.aU 11 About Objective 2 – Expanding our Core Product Offering with Items that Further Extended our Customers’ Productivity Gains The decade started and ended with the Microcat parts selling system anchoring our offerings. During the term, the Company developed four new offerings that provided greater opportunities for its customers. Superservice Menus grew quickly, while the other three were ready before their markets were – Microcat MARKET, Microcat LIVE.net and Microcat PartsBridge. GM: We understood early in the decade that productivity and sales gains for our customers were not limited to just improving the dealership EPC. We entered the trade segment with Microcat FRESH™ in 2001, rebranding it Microcat MARKET in 2004. The product has since been subscribed to progressively in North America, Asia Paciﬁ c and Europe. The opportunity has not opened up as fast as we expected; however, we think this is about to change. AP: There are two important market drivers today that were not present earlier in the decade. The ﬁ rst is the popular growth in Internet selling in all areas of business; dealers and OEMs are coming to envision that online customer self-service parts sales can be a viable and proﬁ table way to extend revenue and customer loyalty. The second is that in some regions such as Europe, automakers are looking for a way to give controlled access to their genuine parts catalogues to third parties such as independent repairers. In both cases, Microcat MARKET can provide dealers and OEMs with the complete system to implement a self-serve retail marketplace, and the ﬁ ne access-control to ensure that third parties treat access to their information appropriately. We were looking for pronounced growth when we launched Microcat MARKET. While we are not yet where we thought we would be in terms of its subscriptions, automakers and franchised dealers Service job quotation has never been easier 12 infomedia.com.au Gary Martin CEO Andrew Pattinson Director of Operations and Global Solutions Warren Webermin Director of Global Sales and Business Development “Superservice Menus...is becoming a world leading category product” are increasingly seeing economic and customer GM: On the service side of dealerships, Superservice loyalty beneﬁ ts by supporting independent repairers Menus has grown in revenue and subscriptions with our online ordering tools. As they do, we are every year since its introduction mid-decade. It is making new subscription headway. becoming a world leading category product. The WW: Since 2007, the Company collaborated with Toyota (USA) to create a new and powerful parts sales and dealership productivity platform – Microcat PartsBridge (known as Auto PartsBridge in the USA). Microcat PartsBridge creates webbing that connects and binds independent crash estimating systems recent market launches with Jaguar Land Rover using the new online version really set the stage for growth. In FY2011 we will release our most powerful versions yet for Toyota and GM dealers in North America. I believe that, as an enabling business tool, it is becoming a must have IT ﬁ xture in dealerships. with Microcat’s precision parts interpretation, to Objective 2 – Outcomes: generate clean, efﬁ cient and quickly costed sales quotes. Microcat PartsBridge deﬁ nitely increases meaningful incremental sales volume for genuine OEM parts. Microcat PartsBridge has caught the attention of many automotive OEMs since its full-scale commercial launch in 2010. We are encouraged by that interest and our development and production • Created and launched four primary product innovations over the decade: Microcat MARKET, Microcat LIVE, Superservice Menus and Microcat PartsBridge. • Added depth to our product offerings while serving our core customer audience. • Added products that can potentially reach millions teams are evolving their processes to expand of users. our capacity to deliver what we think will be a big business pipeline for this decade. • Helped OEMs and dealers to be more productive, customer appealing and proﬁ table. Assessment: Accomplished and Continuing Microcat PartsBridge infomedia.com.aU 13 About Objective 3 – Empowering our Products with Online Connectivity via the Internet “...the Company has built confidence and learnt to stay true to its vision” The goal to expand Microcat’s leadership through might use this tool to get dealers into a bidding war online platform delivery has not yet been fully for parts sales. The Internet was also just beginning achieved. We started the decade with a vision to enter into Western dealerships. that was ahead of its time. Our multi-million dollar investment in online product development isn’t strongly reﬂ ected in the decade’s revenue results, however, we are conﬁ dent it will be in the near future. RG: In 2000, we held the Microcat Internet Workshop with associates from around the world. We considered the Internet was for B2B (Business to Business) and B2C (Business to Consumer) transactions. We decided to produce a simple to use, self-service Microcat that enabled our dealers to open up new levels of sales support to their trade and retail customers. The following year, we GM: In 2003, we turned our sights on evolving professional Microcat from DVD to online. There were issues of bandwidth availability, expense and reliability, from local Internet access providers, that led us to develop a hybrid model. We called it Microcat LIVE.net. It was a powerful application conceived to operate from the DVD alone, from the web alone, or anywhere in between, depending on the price and availability of an Internet connection. When Toyota Motors Europe launched Microcat LIVE.net in 2005, we anticipated transitioning all ﬁ rst-generation DVD products to Microcat LIVE within 18 months. debuted Microcat FRESH. There was great interest MR: The subsequent unique database structures from dealers, but there were great non-technical required for the hybrid took two further years to and accessibility challenges, too. OEMs were not create, and were nearing launch readiness in early ready to let non-dealers view their parts catalogue 2008. However, during that time the OEMs’ favour data. Some dealers were concerned that customers was shifting to a pure browser implementation. Microcat LIVE – Infomedia’s newest online parts ordering system for 2011 14 infomedia.com.au Richard Graham Chairman Gary Martin CEO Andrew Pattinson Director of Operations and Global Solutions Michael Roach Director Asia Pacific GM: Our development management advised that RG: The decade started with our clear vision to we could make the transition the OEMs were now extend the performance and delivery of our core asking for within 12 months. Accordingly, we did platforms with the power of being connected online not launch Microcat LIVE.net so as not to go to the to the world outside the dealership. It ended with effort and expense of launching one new product, the vision yet to be fully realised, but the Company only to launch its replacement a year later. However, is closing in on it. I am conﬁ dent in 2011 and 2012 the technology change presented unexpected Infomedia will ﬁ nd itself leading the way again in challenges, and the original estimate was too this arena and can be the clear category leader well ambitious. As a result, we have not yet reached our before our next decade review. destination, although it is in sight. Objective 3 – Outcomes: RG: We know that the challenges and delays have disappointed our Company and customers. We are working hard to catch up on our promises in 2010/11 and maintain our high level of trust and goodwill with our customers. AP: From this experience I think the Company has built conﬁ dence and learnt to stay true to its vision. Certainly, we must listen to the wishes and ideas of our partners, but we must own the role of designing solutions that work well across a large customer base for the long-term. By re-focusing on core global product designs, we will ensure that our solutions work affordably for all our users in every corner of the world, and proﬁ tably for our shareholders. • In 2001, Infomedia created a fully interpreting EPC solution on the Internet. • In 2005, Toyota in Europe launched the Microcat LIVE.net hybrid, which continues to serve customers today. • By 2008, Microcat LIVE.net was approaching readiness for global ﬁ eld trials, but was not released due to changing perceptions and expectations. • In 2009, a browser-only adaptation of Microcat LIVE launched in Mexico. The 2010 version has commenced ﬁ eld trials in Canada and the USA. Assessment: Work in Progress infomedia.com.aU 15 “A key reason we were able to grow our profit was that we focused on lean management principles and controlling waste.” About Objective 4 – Increasing our Revenue, Proﬁ t and Shareholder Value Across every year in the decade, Infomedia made GM: 2004 was a turning point in external terms. proﬁ t and delivered dividends to shareholders. Despite the record result, the transition to non- Early in the decade the Company experienced exclusive arrangements in Europe had commenced, solid growth. Since mid-decade, results have with both cost and sales implications. The softened. Revenue Compound Annual Growth Rate establishment of the European operation in 2004 (CAGR) for 2001–2004 was 34.8% and NPAT was to manage client relationships and to support 28.1%, compared to revenue CAGR for the period collection systems for customers expanded our cost 2005–2010 of -6.9%, while NPAT was -9.6%. The base. In 2005, we saw a decline in the number of trend was affected by higher Australian currency customers using Microcat for the ﬁ rst time. When repatriation rates, changes in our customer combined with a strong Australian dollar exchange proﬁ le, growth in sales and product development rate, revenue fell back under $60,000,000 with proﬁ t costs and one-off items. declining to $14,500,000. RG: The decade started positively. Multiple JP: In the ﬁ rst half of the decade, our revenue exposure consecutive years of double digit growth were to foreign currencies like the US dollar and the Euro driven by our ability to sign new licensees and dealer beneﬁ ted from more favourable currency rates. By customers while leveraging our core development 2005, higher Australian currency rates started to platform to release new versions of Microcat within have a dampening impact on our reported revenue short time frames, as well as by core acquisitions. and proﬁ t. Another major hurdle to growth was the In 2000, we had $21,700,000 in sales and $7,600,000 loss of the GMC data licences when it changed to an NPAT. By 2004, we had grown to $70,000,000 sales exclusive licensee contract. That wind-down started and $20,000,000 in NPAT. GM: Signiﬁ cant accelerators of growth stemmed from the Datateck acquisition, expanding our Ford and Toyota partnerships and signing new global Microcat agreements with Daihatsu, Hyundai and Land Rover. In mid-2002, the acquisition of to gather pace, and although we had brought other dealership revenue into the business in 2005 and were experiencing rapid growth in Superservice Menus subscriptions, we also had to factor in higher data licence costs through numerous renewals in Europe, North America and Asia Paciﬁ c. PartsImager in North America improved access to GM: We made the strategic decision to expand our General Motors. AP: A key reason we were able to grow our proﬁ t was that we focused on lean management principles and controlling waste. The early days of our business were tough and no-one ever saw the hard won successes as an excuse to over-spend. We business in North America and other regions in pursuit of stronger client relationships, and brought new talent into the sales and development area at an increasing cost to the business. While subscriptions moved positively, we had added signiﬁ cantly higher costs to the business compared to before 2005. have continuously reviewed our processes and kept While development work was intensive in delivering reﬁ ning them for the beneﬁ t of our shareholders, the Microcat LIVE.net products, more recently it customers and staff. re-focused to deliver work on the browser application 16 infomedia.com.au “...we remain without debt, while investing in our new product technologies” Richard Graham Chairman Gary Martin CEO Andrew Pattinson Director of Operations and Global Solutions Jonathan Pollard CFO transition strategy to protect current business. We over 21 million shares through its on-market share have also had to maintain the existing disc platform, buy-back program. resulting in an increase in operational costs without a corresponding increase in current business return. Objective 4 – Outcomes: A decline in transition costs has not yet commenced • Revenue including currency hedging grew from and has been slower than originally expected. $21,100,000 to peak at $69,600,000 in 2004 and AP: As a result of the heavy development spend that drop back to $50,500,000 by 2010. has not yet translated into new revenue opportunities • NPAT grew from $7,700,000 to $20,700,000 by or the release of new products for current customers, 2004 and back to $11,300,000 in 2010. we have looked very carefully at all areas of the business to get the most out of our resources. While the Global Financial Crisis (GFC) had implications for many industries including automotive and technology, we remain without debt while investing in our new product technologies. We now have to turn that investment of shareholder funds back into returns for the customers and shareholders who have supported our business for many years. RG: Shareholders are acutely aware of the decline in market capitalisation over the decade as the market interpreted our fundamental growth prospects as waning. During that same time, the Company declared 39.5 cents in dividends and re-purchased • Contributions from Superservice Menus, and multiple new and renewed Microcat data licences, were diluted in the second half of the decade by higher costs, a stronger Australian dollar, the loss of major revenue contributions from key OEM licences, and GFC uncertainties within the automotive industry. • Shareholder value has been affected by the reduction in market capitalisation. Assessment: Work in Progress infomedia.com.aU 17 Microcat Parts Selling System Infomedia’s design strategy has been to create a suite of productivity tools that are able to be operated singly or in unison, to produce a rich self-serve online selling platform that even dealerships new to technology can successfully operate and benefit from. for Automotive trades for DIY online self-serve for Collision industry trades Dealership Tool Box For online order management and processing · User portal · Order manager · DMSi Dealer Management System for order fulfilment and invoicing professional dealership service quotes professional dealership parts sales 18 infomedia.com.au Microcat Parts Selling System Stand-alone Modules or an Integrated system Microcat MARKET for DIY online self-serve Online order management and processing infomedia.com.aU 19 2020 Vision Ubiquitous Global Penetration Our vision for the 2020 milestone is to have ensure that their technological tools affordably Infomedia’s global brands expand in use and achieve their goals. recognition, so as to become ubiquitous productivity tools in every automotive dealership in the world. MR: Competition is strong between technology To achieve this, we will be more than just a good vendors looking to serve the genuine after-sales supplier. We will be an outstanding partner that industry. Today, many elements of the industry are understands our partners’ businesses and needs segmented. There is a growing need for tighter and translates them into powerful, reliable and integration and perhaps consolidation. I can affordable productivity tools that work every day, see many different automotive, technology and in every language, in every place. AP: We will continue to solve problems and create e-commerce companies seeking out opportunities for alliances and partnerships with us. By 2020, we will have strong industry alliances and be an even opportunities for our subscribers through easy-to- more valued industry partner. use technology. That’s how Microcat started; it’s how Superservice Menus started; and Microcat PartsBridge also. So while the times may change, there are always new issues that need to be resolved for automakers, their dealerships and their customers. That is our challenge and our opportunity to keep growing this business. MR: Come 2020, we will have continued to be relevant AP: Our ambition is to have customers, partners to our subscribers due to our understanding of their and allies who excitedly anticipate each new productivity and selling issues; whether they’re release of our technology. We will continue to have in parts, service, accessories, warranty, or any leading technology, and personnel who are bright other department in the dealership. We will have and committed. continued to broaden our way of thinking to make sure we maintain focus right across their business. We will have added new sources of business and process intelligence to the beneﬁ t of their whole sales value chain. In terms of our shareholders, I think that success will translate into continuing dividends, seeing the market value our shares rise upward, and returning the Company to the indexes. By 2020, we will have conﬁ rmed that we are a company built to lead, and RG: The next decade will see Infomedia providing built to last. solutions that give automakers and franchise dealers the front-of-mind technologies to make their consumers want to do more business with them. I think we will continue to see automakers reach out and partner with Infomedia in order to Our 2020 vision is for a ubiquitous presence in every automotive dealership in the world. 20 infomedia.com.au Directors’ Overview Richard Graham Non-executive Chairman Mr Richard 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 Ofﬁ cer Mr Gary Martin has been with Infomedia since 1998 and was promoted to the position of Chief Executive Ofﬁ cer on 1 January 2005. Mr Martin has extensive experience in the automotive industry and was elected to the Board in October 2004. Frances Hernon Non-executive Director Ms 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. Ms Hernon currently serves on the Audit, Risk and 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 2009. Myer Herszberg Non-executive Director Mr Myer Herszberg has been a Director of Infomedia since 1992. Mr Herszberg has extensive consumer electronics, commercial property and community service organisation experience. Mr Herszberg currently serves on the Company’s Audit, Risk and Governance Committee and was last re-elected to the Board in October 2008. Andrew Moffat Non-executive Director Mr Andrew Moffat was appointed to the Infomedia Board of Directors on 31 March 2005. Mr Moffat has extensive corporate and investment banking and strategic corporate advisory service experience. Mr Moffat is Chairman of Audit, Risk and Governance Committee and was last re-elected to the Board in October 2007. infomedia.com.aU 21 Directors’ Report INTERESTS IN THE SHARES AND OPTIONS OF THE COMPANY AND RELATED BODIES CORPORATE As at the date of this report, the interests of the Directors in the shares and options of the Company were: Infomedia Ltd Ordinary shares fully paid Options over ordinary shares Wiser Equity Pty Limited Yarragene Pty Limited Wiser Centre Pty Limited Richard Graham Gary Martin Andrew Moffat Frances Hernon 101,077,501 23,421,589 1,000,000 926,559 655,590 300,000 5,000 - - - - 1,000,000 - - Richard Graham is the sole Director and beneﬁ cial shareholder of Wiser Equity Pty Limited. Richard Graham is a Director of Wiser Centre Pty Limited, trustee for the Wiser Centre Pty Ltd Superannuation Fund. Myer Herszberg is a Director and major shareholder of Yarragene Pty Limited. DIRECTORSHIPS OF OTHER PUBLICLY LISTED ENTITIES During the past ﬁ ve years, Andrew Moffat has been the non-executive Director of Cash Converters Ltd. He is Chairman of Paciﬁ c Star Network Limited and also a non-executive Director of Rubik Financial Limited and itX Group 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 signiﬁ cant changes in the nature of those activities during the year. EMPLOYEES The company employed 225 (2009: 240) full-time employees as at 30 June 2010. DIVIDENDS Final dividends recommended: On ordinary shares – ﬁ nal – unfranked Dividends paid in the year: On ordinary shares – 2010 interim – unfranked Final for the 2009 year: On ordinary shares – as recommended in the 2009 report, franked at 0.7c 22 infomedia.com.au Cents $’000 1.2 3,644 1.2 2.1 3,729 6,534 Directors’ Report NET TANGIBLE ASSETS PER SECURITY The Company’s net tangible assets per security are as follows: Net tangible assets per share at 30 June 2010 Net tangible assets per share at 30 June 2009 REVIEW AND RESULTS OF OPERATIONS Cents 1.7 3.4 The following table presents sales revenue and proﬁ t after tax. There were no non-recurring signiﬁ cant items during the 2009 or 2010 ﬁ nancial years: Sales revenue Foreign exchange movement on hedges closed out during the period Proﬁ t after tax CONSOLIDATED 2010 $’000 45,339 5,181 50,520 11,336 2009 $’000 54,342 (3,024) 51,317 10,536 The Company reports net proﬁ t after tax of $11,336,000 for the 2010 ﬁ nancial year, which is within the range previously advised in its guidance, released to the market on 11 December 2009. The Company’s reported sales revenue for the year was $45,339,000, which represents a 16.6% reduction over the previous corresponding period. The major cause of the reduction in sales revenue was the strengthening of the Australian dollar over the 2010 ﬁ nancial year. As part of the Company’s foreign currency hedging program, favourable hedge translation rates were achieved. The effect of these, whilst not included in the sales revenue number, a signiﬁ cant positive impact on the net proﬁ t and is shown separately within the statutory accounts. In constant currency terms, revenue decreased by $2,900,000. The impact of a $3,900,000 revenue reduction from the conclusion of a previously disclosed data licence was offset by organic growth from Electronic Parts Catalogues, Superservice Menus® and the Company’s newest parts solution for the collision industry, Auto PartsBridge®. During the year, the Company signed a new extended lease on its headquarters in Sydney. The new lease led to provisions of approximately $900,000 pre-tax to be credited to the proﬁ t and loss account during the year. The Company also saw an improvement in its debtor position and consequently reduced its provision for doubtful debts by $283,000, which had the impact of increasing its pre-tax proﬁ t by the same amount. The net proﬁ t result included a tax adjustment of $488,000, down from the previous corresponding period of $1,067,000. This had the effect of increasing the Company’s effective tax rate from 17.5% in 2009 to 21.8% in 2010. The Company anticipates its 2011 effective tax rate to return closer to historical averages. Cash ﬂ ows from operations increased to $10,174,000, primarily due to the absence of an advanced royalty paid in 2009. During the year, the Company repurchased 6,694,918 shares for $1,732,000 under its buy back program. The Company is pleased to advise a ﬁ nal dividend payment of 1.2 cents unfranked which, together with the interim dividend of 1.2 cents and share buy back, reﬂ ects a payout ratio of 80% of net proﬁ t after tax reported for the full year. The record date infomedia.com.aU 23 Directors’ Report REVIEW AND RESULTS OF OPERATIONS (CONTINUED) to determine entitlements to the dividend distribution is 7 September 2010 and the date on which the dividend is payable is 21 September 2010. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There has been no signiﬁ cant change in the state of affairs of the Company since the last Directors’ Report. SIGNIFICANT EVENTS AFTER THE BALANCE DATE The Chief Executive Ofﬁ cer notiﬁ ed the Board that he will not be seeking to renew his service agreement when it expires on 31 December 2010. Other than this, there has been no matter or circumstance that has arisen since the end of the ﬁ nancial year that has signiﬁ cantly affected the operations of the Company, the results of those operations, or the state of affairs of the Company. LIKELY DEVELOPMENTS AND EXPECTED RESULTS In the year ahead, the Company expects to continue to release its Internet based products. The Company expects to continue increasing Superservice Menus revenue. ENVIRONMENTAL REGULATION AND PERFORMANCE The Company is not subject to any particular or signiﬁ cant environmental regulation under a law of the Commonwealth of Australia or of a State or Territory. SHARE OPTIONS Unissued shares At the date of this report, there were 2,150,000 unissued ordinary shares under options. Refer to Note 19 to the ﬁ nancial 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 ﬁ nancial 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 ofﬁ cers against liability incurred in their capacity as a Director or ofﬁ cer of the Company. The insurance contract speciﬁ cally prohibits the disclosure of the nature of the policy and amount of premium paid. REMUNERATION REPORT – 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 deﬁ ned 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. 24 infomedia.com.au Directors’ Report REMUNERATION REPORT – AUDITED (CONTINUED) Details of Key Management Personnel (i) Directors Richard Graham Non-executive Chairman Gary Martin Chief Executive Ofﬁ cer Myer Herszberg Non-executive Director Frances Hernon Non-executive Director Andrew Moffat Non-executive Director (ii) Executives Jonathan Pollard Chief Financial Ofﬁ cer Michael Bodner* Chief Information Ofﬁ cer Nick Georges Company Secretary and Legal Counsel Andrew Pattinson Director of Operations and Global Solutions Michael Roach Director of Sales and General Manager Asia Paciﬁ c *Resigned 31 May 2010. 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 fell within the former Remuneration and 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, asseses the appropriateness of the nature and amount of these emoluments on a periodic basis by reference to relevant employment market conditions, with the overall objective of ensuring maximum stakeholder beneﬁ t from the retention of a high quality Board and executive team. Compensation structure In accordance with best practice corporate governance recommendations, the structure of non-executive Director and Senior Executive compensation is separate and distinct. infomedia.com.aU 25 Directors’ Report REMUNERATION REPORT – AUDITED (CONTINUED) Non-executive Director compensation Objective The Board seeks to set aggregate compensation at a level which provides the Company with the ability to attract and retain Directors of appropriate calibre, whilst incurring a cost which is acceptable to shareholders. Structure The Constitution and the ASX (Australian Securities Exchange) 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 2010, non-executive Directors’ compensation totalled $309,341 (2009: $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. Structure In determining the level and make-up of executive compensation, the Remuneration Committee engages an external consultant from time to time to provide independent advice in the form of a written report detailing market levels of compensation for comparable executive roles. Compensation consists of the following key elements: • ﬁ xed compensation; • variable compensation – Short Term Incentive (STI); and • variable compensation – Long Term Incentive (LTI). The actual proportion of ﬁ xed compensation and variable compensation (potential short term and long term incentives) is established for Key Management Personnel (excluding the CEO and non-executive Directors) by the CEO in conjunction with the 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. 26 infomedia.com.au Directors’ Report REMUNERATION REPORT – AUDITED (CONTINUED) Fixed compensation Objective The level of ﬁ xed compensation is set so as to provide a base level of compensation which is both appropriate to the position and competitive in the market. Fixed compensation is reviewed periodically by the CEO in conjunction with 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 on the previous page, Ms Hernon has access to external advice independent of management. Structure Executives are given the opportunity to receive their ﬁ xed (primary) compensation in a variety of forms including cash or other designated employee expenditure such as motor vehicles. It is intended that the manner of payment chosen will be optimal for the recipient without creating undue cost for the Company. Variable compensation – Short Term Incentive (STI) Objective The objective of short term compensation is to link the achievement of both individual performance and Company performance with the compensation received by the executive. Structure The structure of short term compensation is a cash bonus dependent upon a combination of individual performance objectives and Company objectives being met. This reﬂ ects the Company-wide practice of “Performance Planning and Review” (PPR) procedures. Individual performance objectives centre on key focus areas. Company objectives include achieving budgetary targets that are set at the commencement of the ﬁ nancial year (adjusted where necessary for currency ﬂ uctuations). These performance conditions were chosen, in the case of individual performance objectives, to promote and maintain the individual’s focus on their own contribution to the Company’s strategic objectives through individual achievement in key result areas (KRAs) which include, for example, “leadership”, “decision making”, “results” and “risk management”. In the case of Company objectives, budgetary performance conditions were chosen to promote and maintain a collaborative, Company-wide focus on the achievement of those targets. In assessing whether an individual performance condition has been satisﬁ ed, pre-agreed Key Performance Indicators (KPIs) are used. In assessing whether Company objectives have been satisﬁ ed, Board level pre-determined budgetary targets are used. These methods have been chosen to create clear and measurable performance targets. Variable compensation – Long Term Incentive (LTI) 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. Hence, LTI grants are made to executives who are able to inﬂ uence the generation of shareholder wealth and thus have a direct impact on the Company’s performance against the relevant long term performance hurdle. Structure The structure of long term compensation is in the form of share options pursuant to the employee option 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 27 Directors’ Report REMUNERATION REPORT – AUDITED (CONTINUED) Key Management Personnel and the ﬁ ve highest remunerated speciﬁ ed executives for the year ended 30 June 2010 and 30 June 2009 Short term Post- employment Share based payments Long service leave Termination payments Total Percentage performance related 2010 ﬁ nancial year: Salary and fees Bonus Non- monetary beneﬁ ts Superannuation Options $ $ $ $ $ $ $ $ 10,350 - - 27,000 14,976 5,000 Directors: Richard Graham 115,000 - Gary Martin 300,000 60,000 Myer Herszberg Frances Hernon Andrew Moffat Executives: 56,300 56,250 56,250 - - - Andrew Pattinson 280,000 36,800 - - - - - - 5,067 5,062 5,062 25,200 Michael Bodner* 240,038 - 13,840 - Michael Roach 200,000 32,000 Nick Georges 190,000 29,975 Jonathan Pollard 180,000 21,600 - - - 18,000 17,100 16,200 1,673,838 180,375 13,840 129,041 2009 ﬁ nancial year: Directors: Richard Graham 115,000 - Gary Martin 300,000 105,000 Myer Herszberg Frances Hernon Andrew Moffat Executives: 56,300 56,250 56,250 - - - - - - - - 10,350 27,000 5,067 5,062 5,062 Andrew Pattinson 288,952 49,377 65,578 26,006 Michael Bodner 304,169 66,928 16,031 - Michael Roach 190,000 36,000 Nick Georges 190,000 29,125 Jonathan Pollard 172,784 43,512 - - - 17,100 17,100 15,504 - - - - - - 130,930 - - - 125,350 406,976 61,367 61,312 61,312 350,296 393,578 256,819 243,986 225,042 130,930 2,186,038 125,350 471,524 61,367 61,312 61,312 436,540 406,744 249,793 248,026 240,230 - - - 3,629 8,770 3,486 3,744 5,442 40,047 - - - 4,667 - 3,333 3,167 1,800 17,967 - - 34,524 5,000 - - - 1,960 19,616 3,360 8,634 6,930 - - - 4,667 - 3,333 3,167 1,500 1,729,705 329,942 81,609 128,251 75,024 17,667 2,362,198 *Resigned 31 May 2010. 28 infomedia.com.au % - 15 - - - 10 - 12 12 10 - 22 - - - 11 16 14 12 18 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: Commencement date per latest contract Gary Martin** Nick Georges 1 January 2008 1 January 2008 Jonathan Pollard 1 October 2008 Michael Roach 1 January 2009 Andrew Pattinson 1 February 2009 Duration Notice period – Company Notice period – executive 3 years 3 years 3 years 3 years 3 years 6 months* 6 months* 3 months 3 months 3 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. ** As per the ASX announcement on 5 July 2010, Gary Martin notiﬁ ed the Board that he will not be seeking to renew his service agreement when it expires on 31 December 2010. Shares issued on exercise of compensation options (consolidated) No options were exercised during the year. Compensation options: Granted during the year ended 30 June 2010 No options were granted during the year. Compensation options: Vested during the year ended 30 June 2010 Terms and conditions for each grant Vested Options issued number Grant date Fair value per option at grant date ($) Exercise price per option ($) Expiry date Number % Directors Gary Martin Executives 1,000,000 1/1/2008 0.078 Nick Georges Jonathan Pollard Michael Roach 250,000 250,000 250,000 Andrew Pattinson 250,000 Total 2,000,000 1/1/2008 1/10/2008 1/1/2009 1/2/2009 0.078 0.061 0.032 0.031 0.53 0.53 0.37 0.29 0.29 5/2/2011 666,666 66.6% 5/2/2011 166,666 66.6% 31/10/2011 83,333 33.3% 5/1/2012 83,333 33.3% 5/2/2012 83,333 33.3% 1,083,331 54.2% infomedia.com.aU 29 Directors’ Report REMUNERATION REPORT – AUDITED (CONTINUED) Compensation options: Granted and vested during the year ended 30 June 2009 Terms and conditions for each Grant Vested Options issued number Grant date Fair value per option at grant date ($) Exercise price per option ($) Expiry date Number % Directors Gary Martin 1,000,000 1/1/2008 0.078 0.53 5/2/2011 333,333 33.3% Executives Michael Bodner* 500,000 1/5/2008 Nick Georges 250,000 1/1/2008 Jonathan Pollard 250,000 1/10/2008 Michael Roach 250,000 Andrew Pattinson 250,000 Total 2,500,000 1/1/2009 1/2/2009 *Options expired on resignation 31 May 2010. DIRECTORS’ MEETINGS 0.071 0.078 0.061 0.032 0.031 0.42 0.53 0.37 0.29 0.29 13/4/2011 166,666 33.3% 5/2/2011 83,333 33.3% 31/10/2011 5/1/2012 5/2/2012 - - - - - - 583,332 23.3% The number of meetings of Directors (including meetings of committees of Directors) held during the year and the number of meetings attended by each Director were as follows: Directors’ Meetings Audit, Risk and Governance Committee Meetings 8 8 8 6 7 8 3 - - 3 3 3 Number of meetings held: Number of meetings attended: Richard Graham Gary Martin Myer Herszberg Frances Hernon Andrew Moffat ROUNDING The amounts contained in this report and in the ﬁ nancial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under ASIC (Australian Securities and Investment Commission) Class Order 98/0100. The Company is an entity to which the Class Order applies. 30 infomedia.com.au Directors’ Report AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES The Directors received an auditor’s independence declaration from the auditor of the Company (refer to page 32). NON-AUDIT SERVICES Ernst & Young provided corporate advisory consulting services totaling $47,825 during the ﬁ nancial year ended 30 June 2010. The Directors are satisﬁ ed 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, 24 August 2010 infomedia.com.aU 31 Auditor’s Independence Declaration to the Directors of Infomedia Ltd In relation to our audit of the financial report of Infomedia Ltd for the financial year ended 30 June 2010, to the best of my knowledge and belief, there have been no contraventions of the auditor independence requirements of the Corporations Act 2001 or any applicable code of professional conduct. Ernst & Young J K Haydon Partner 24 August 2010 32 infomedia.com.au 14 Liability limited by a scheme approved under Professional Standards Legislation Statement of Comprehensive Income YEAR ENDED 30 June 2010 Notes CONSOLIDATED Sales revenue Foreign exchange movement on hedges closed out during the period Cost of sales Gross proﬁ t Finance revenue Employee beneﬁ ts expense Depreciation and amortisation Finance costs Operating lease rental Other income/(expenses) Proﬁ t before income tax Income tax expense Proﬁ t after income tax Other comprehensive income Foreign currency translation differences for foreign operations Effective cash ﬂ ow hedges movement recognised in equity Ineffective cash ﬂ ow hedges gain/(loss) recognised in the proﬁ t and loss Other comprehensive income/(expense) for the period, net of tax Total comprehensive income for the period Basic earnings per share (cents per share) Diluted earnings per share (cents per share) Dividends per share – ordinary (cents per share) 2010 $’000 45,339 5,181 50,520 3(i) (21,904) 28,616 103 (10,705) (3,745) (36) (1,167) 1,431 14,497 (3,161) 11,336 (290) (857) - (1,147) 10,189 3.66 3.66 2.40 3(ii) 3(iii) 4 5 5 6 2009 $’000 54,341 (3,024) 51,317 (22,107) 29,210 419 (9,306) (3,442) (61) (1,373) (2,674) 12,773 (2,237) 10,536 192 2,351 - 2,543 13,079 3.32 3.32 2.80 infomedia.com.aU 33 Balance Sheet At 30 June 2010 Notes CONSOLIDATED 17(b) 7 8 26 9 10 12 13 14 15 4 16 16 2010 $’000 5,789 4,160 56 2,507 3,028 - 2009 $’000 8,005 4,396 54 1,983 4,252 386 15,540 19,076 1,305 751 28,696 30,752 46,292 3,738 2,000 626 481 6,845 306 5,400 5,706 12,551 33,741 11,131 3,161 19,449 33,741 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 CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Prepayments Derivatives Income tax receivable TOTAL CURRENT ASSETS NON-CURRENT 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 TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Provisions Deferred tax liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity Reserves Retained proﬁ ts TOTAL EQUITY 34 infomedia.com.au Cash Flow Statement YEAR ENDED 30 June 2010 Notes CONSOLIDATED CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Income tax paid 2010 $’000 51,294 (40,348) 103 (875) NET CASH FLOWS FROM OPERATING ACTIVITIES 17 (a) 10,174 CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment Purchase of intellectual property NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Share buy back payment Dividends paid on ordinary shares NET CASH FLOWS USED IN FINANCING ACTIVITIES 10 16 6 (395) - (395) (1,732) (10,263) (11,995) 2009 $’000 52,073 (45,016) 419 (2,272) 5,204 (801) (441) (1,242) (3,505) (6,699) (10,204) NET (DECREASE) IN CASH HELD (2,216) (6,242) Add opening cash brought forward CLOSING CASH CARRIED FORWARD 17 (b) 8,005 5,789 14,247 8,005 infomedia.com.aU 35 Statement of Changes in Equity YEAR ENDED 30 June 2010 CONSOLIDATED Contributed equity Retained earnings Employee equity beneﬁ ts reserve Cash ﬂ ow hedge reserve Foreign currency translation reserve $’000 12,863 - - - - (1,732) $’000 18,376 11,336 - 11,336 - - - (10,263) $’000 1,152 - - - 43 - - $’000 2,976 - (857) (857) - - - $’000 137 - (290) (290) - - - Total $’000 35,504 11,336 (1,147) 10,189 43 (1,732) (10,263) 11,131 19,449 1,195 2,119 (153) 33,741 At 1 July 2009 Proﬁ t for the period Other comprehensive income Total comprehensive income for the year Share based payments Share buy back Equity dividends At 30 June 2010 YEAR ENDED 30 June 2009 CONSOLIDATED Contributed equity Retained earnings Employee equity beneﬁ ts reserve Cash ﬂ ow hedge reserve Foreign currency translation reserve At 1 July 2008 Proﬁ t for the period Other comprehensive income $’000 16,368 - - $’000 14,539 10,536 - Total comprehensive income for the year 16,368 10,536 Share based payments Share buy back Equity dividends At 30 June 2009 - (3,505) - 12,863 - - (6,699) 18,376 $’000 1,058 - - - 94 - - $’000 $’000 625 - 2,351 2,351 - - - (55) - 192 192 - - - 1,152 2,976 137 Total $’000 32,535 10,536 2,543 13,079 94 (3,505) (6,699) 35,504 36 infomedia.com.au Notes to the Financial Statements 30 June 2010 1. CORPORATE INFORMATION The ﬁ nancial report of Infomedia Ltd for the year ended 30 June 2010 was authorised for issue in accordance with a resolution of the Directors on 24 August 2010. 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 ﬁ nancial report is a general-purpose ﬁ nancial report, which has been prepared in accordance with the requirements of the Corporations Act 2001 and Australian Accounting Standards. The ﬁ nancial report has also been prepared on a historical cost basis, except for derivative ﬁ nancial instruments which have been measured at fair value. (b) Statement of compliance This ﬁ nancial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board. This ﬁ nancial report also complies with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. As a result of the Corporate Reporting Reform Act 2010, effective for 30 June 2010 year-end ﬁ nancial reporting, the Company is relieved of the requirement to present ﬁ nancial statements for both the parent entity and the consolidated entity. A summary of the parent entity ﬁ nancial information has been disclosed in Note 28 to the ﬁ nancial statements. The accounting policies adopted are consistent with those of the previous ﬁ nancial year except as follows: The group has adopted the following new and amended Australia Accounting Standards and AASB Interpretations as of 1 January 2010: • AASB 7 Financial Instruments: Disclosures effective 1 January 2009; • AASB 8 Operating Segments effective 1 January 2009; and • AASB 101 Presentation of Financial Statements (revised 2007) effective 1 January 2009. Other new/revised standards and interpretations applicable for the year commencing 1 July 2009 have been reviewed and it has been determined that those new/revised standards and interpretations do not have a material effect on the measurement and recording of items in the balance sheet and the statement of comprehensive income. 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 ﬁ nancial statements comprise the ﬁ nancial statements of Infomedia Ltd and its subsidiaries (“the Company”). The ﬁ nancial statements of subsidiaries are prepared for the same reporting period as those of the parent company, using infomedia.com.aU 37 Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. All intercompany balances and transactions, including unrealised proﬁ ts arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered. Subsidiaries are consolidated from the date on which control is transferred to the Company and cease to be consolidated from the date on which control is transferred out of the Company. Where there is loss of control of a subsidiary, the consolidated ﬁ nancial statements include the results for the part of the reporting period during which Infomedia Ltd has control. (d) Signiﬁ cant accounting judgments, estimates and assumptions Signiﬁ cant 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 signiﬁ cant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are: • Impairment of goodwill The Company determines whether goodwill is impaired at least on an annual basis. This requires an estimation of the recoverable amount of the cash-generating units to which the goodwill and intangibles with indeﬁ nite useful lives are allocated. The assumptions used in this estimation of recoverable amount and the carrying amount of goodwill and intangibles with indeﬁ nite useful lives are discussed in Note 10. • 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 19. • Research and development Development costs are only capitalised by the Company 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. Translation of foreign currency transactions Transactions in foreign currencies of the Company are converted to local currency at the rate of exchange ruling at the date of the transaction. Amounts payable to and by the Company that are outstanding at the balance date and are denominated in foreign currencies have been converted to local currency using rates of exchange ruling at the end of the reporting period. All currency exchange differences in the consolidated ﬁ nancial report are taken to the statement of comprehensive income. Translation of ﬁ nancial reports of overseas operations Both the functional and the presentation currency of Infomedia Ltd and its Australian subsidiaries is Australian dollars (A$). Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. 38 infomedia.com.au Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The functional currencies of the overseas subsidiaries are 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. (e) Cash and cash equivalents Cash on hand and in banks and short term deposits are stated at nominal values. For the purposes of the cash ﬂ ow statement, cash includes cash on hand and in banks, and money market investments readily convertible to cash within three months, net of outstanding bank overdrafts. (f) Trade and other receivables Trade receivables, which generally have 30-60 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that the Company will not be able to collect the debts. Bad debts are written off when identiﬁ ed. (g) Investments and other ﬁ nancial assets Financial assets in the scope of AASB 139 Financial Instruments: Recognition and Measurement are classiﬁ ed as either ﬁ nancial assets at fair value through proﬁ t or loss, loans and receivables, held-to-maturity investments, or available-for-sale investments, as appropriate. For the Company, the relevant categories are listed below: Loans and receivables Loans and receivables are non-derivative ﬁ nancial assets with ﬁ xed or determinable payments that are not quoted in an active market. Such assets are carried at amortised cost using the effective interest method. Gains and losses are recognised in proﬁ t or loss when the loans and receivables are derecognised or impaired, as well as through the amortisation process. Investments in subsidiaries Investments in subsidiaries are recorded at cost. (h) 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 ﬁ rst-in-ﬁ rst-out basis. infomedia.com.aU 39 Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (i) Goodwill Goodwill acquired in a business combination is initially measured at cost, being the excess of the cost of the business combination over the Company’s interest in the net fair value of the acquiree’s identiﬁ able assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash-generating units, or groups of cash-generating units, that are expected to beneﬁ t from the synergies of the combination, irrespective of whether other assets or liabilities of the Company are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated: • 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. (j) 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 proﬁ ts in the year in which the expenditure is incurred. Research costs are expensed as incurred. Development 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 beneﬁ ts, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied, requiring the asset to be carried at cost less any accumulated 40 infomedia.com.au Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) amortisation and accumulated impairment losses. Any expenditure so capitalised is amortised over the period of expected beneﬁ ts from the related project commencing from the commercial release of the project. The carrying value of an intangible asset arising from development expenditure is tested for impairment annually when the asset is not yet available for use or more frequently when an indication of impairment arises during the reporting period. Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in proﬁ t or loss when the asset is derecognised. The useful lives of intangible assets are assessed to be either ﬁ nite or indeﬁ nite. Intangible assets with ﬁ nite lives are amortised over the useful life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a ﬁ nite useful life are reviewed at least at each ﬁ nancial year end. Changes in the expected useful life or the expected pattern of consumption of future economic beneﬁ ts embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with ﬁ nite lives is recognised in proﬁ t or loss in the expense category consistent with the function of the intangible asset. Intangible assets with indeﬁ nite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indeﬁ nite life is reviewed each reporting period to determine whether indeﬁ nite life assessment continues to be supportable. If not, the change in the useful life assessment from indeﬁ nite to ﬁ nite is accounted for as a change in an accounting estimate and is thus accounted for on a prospective basis. (k) 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 inﬂ ows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases, the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash ﬂ ows are discounted to their present value using a pre-tax discount rate that reﬂ ects current market assessments of the time value of money and the risks speciﬁ c to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed (with the exception of goodwill) only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that infomedia.com.aU 41 Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in proﬁ t or loss unless the asset is carried at revalued amount (in which case the reversal is treated as a revaluation increase). After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. (l) 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: Leasehold improvements: 5 to 20 years 5 to 20 years Other plant and equipment: 3 to 15 years 3 to 15 years 2010 2009 The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each ﬁ nancial year end. (i) Derecognition and disposal An item of property, plant and equipment is derecognised upon disposal or when no further future economic beneﬁ ts are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in proﬁ t or loss in the year in which the asset is derecognised. (m) Leases Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term. Lease incentives are recognised in the statement of comprehensive income as an integral part of the total lease expense. (n) Trade and other payables Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Company prior to the end of the ﬁ nancial year that are unpaid and arise when the Company becomes obliged to make future payments in respect of the purchase of these goods and services. (o) Provisions Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outﬂ ow of resources embodying economic beneﬁ ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Company expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. 42 infomedia.com.au Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) If the effect of the time value of money is material, provisions are determined by discounting the expected future cash ﬂ ows at a pre-tax rate that reﬂ ects current market assessments of the time value of money and, where appropriate, the risks speciﬁ c to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost. (p) 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. (q) Contributed equity Ordinary shares are classiﬁ ed as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (r) Revenue recognition Revenue is recognised to the extent that it is probable that the economic beneﬁ ts will ﬂ ow to the entity and the revenue can be reliably measured. The following speciﬁ c recognition criteria must also be met before revenue is recognised: Subscriptions Subscription revenue is recognised when the copyright article has passed to the buyer with related support revenue being recognised over the service period. Where the copyright article and related support revenue are inseparable, then the revenue is recognised over the service period. Interest Control of a right to receive consideration for the provision of, or investment in, assets has been attained. (s) 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. (t) Derivative ﬁ nancial instruments and hedging Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. Derivative ﬁ nancial instruments are measured at fair value. Any gains or losses arising from changes in the fair value of derivatives, except for those that qualify as cash ﬂ ow hedges, are taken directly to proﬁ t or loss for the year. The fair value of forward currency contracts is calculated by reference to current forward exchange rates for contracts with similar maturity proﬁ les. For the purpose of hedge accounting, hedges are classiﬁ ed as cash ﬂ ow hedges when they hedge the exposure to variability in cash ﬂ ows 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 ﬂ ow hedges attributable to future foreign currency sales. infomedia.com.aU 43 Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Cash ﬂ ow hedges Cash ﬂ ow hedges are hedges of the Company’s exposure to variability in cash ﬂ ows that is attributable to a particular risk associated with anticipated future sales that could affect proﬁ t 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 proﬁ t 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 Company tests each of the designated cash ﬂ ow 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 ﬁ rst 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 fulﬁ lling new ﬁ rst-time through orders. First-time through orders will not be hedged. The Company hedges foreign exchange exposure on intra-Company sales as this exposure affects consolidated proﬁ t when the sale is made to the external customer. (u) Income tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date. Deferred income tax is provided on all temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for ﬁ nancial reporting purposes. Deferred income tax liabilities are recognised for all taxable temporary differences except: • when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting proﬁ t nor taxable proﬁ t or loss; or • when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable proﬁ t will be available against which the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except: 44 infomedia.com.au Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) • when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting proﬁ t nor taxable proﬁ t or loss; or • when the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable proﬁ t will be available against which the temporary difference can be utilised. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date. Income taxes relating to items recognised directly in equity are recognised in equity and not in proﬁ t or loss. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. The tax consolidated current tax liability and other deferred tax assets are required to be allocated to the members of the tax consolidated group in accordance with UIG 1052. The Company uses a group allocation method for this purpose where the allocated current tax payable, deferred tax assets and other tax credits for each member of the tax consolidated group are determined as if the Company is a stand-alone taxpayer but modiﬁ ed as necessary to recognise membership of a tax consolidated group. Recognition of amounts allocated to members of the tax consolidated group has regard to the tax consolidated group’s future tax proﬁ ts. (v) 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 ﬂ ows are included in the cash ﬂ ow statement on a gross basis and the GST component of cash ﬂ ows arising from investing and ﬁ nancing activities, which is recoverable from, or payable to, the taxation authority is classiﬁ ed as operating cash ﬂ ows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. (w) Employee leave beneﬁ ts (i) Wages, salaries and annual leave Liabilities for wages and salaries, including non-monetary beneﬁ ts and annual leave expected to be settled within 12 months of the reporting date, are recognised in other payables in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. infomedia.com.aU 45 Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (ii) Long service leave The liability for long service leave is recognised in the provision for employee beneﬁ ts and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures, and period of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated future cash ﬂ ows. (iii) Post-employment and termination beneﬁ ts A superannuation expense at 9% of salaries is recognised on a straight-line basis. Termination beneﬁ ts are recognised at the point of being incurred where relevant. (x) Share based payment transactions The Company provides beneﬁ ts to employees in the form of share based payment transactions, whereby employees render services in exchange for shares or options over shares (“equity-settled transactions”). There are currently two plans in place to provide these beneﬁ ts: (i) the Employee Share Plan (ESP); and (ii) the Employee Option Plan (EOP). The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an external valuer using a binomial model. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Infomedia Ltd (“market conditions”). The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulﬁ lled, ending on the date on which the relevant employees become fully entitled to the option (“vesting date”). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reﬂ ects (i) the extent to which the vesting period has expired and (ii) the number of options that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of market performance conditions being met, as the effect of these conditions is included in the determination of fair value at grant date. Where the terms of an equity-settled transaction are modiﬁ ed, as a minimum an expense is recognised as if the terms had not been modiﬁ ed. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modiﬁ cation, as measured at the date of modiﬁ cation. Where an equity-settled transaction is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the transaction is recognised immediately. However, if a new transaction is substituted for the cancelled transaction, and designated as a replacement transaction on the date that it is granted, the cancelled and new transaction are treated as if they were a modiﬁ cation of the original transaction, as described in the previous paragraph. 46 infomedia.com.au Notes to the Financial Statements 30 June 2010 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The dilutive effect, if any, of outstanding options is reﬂ ected as additional share dilution in the computation of earnings per share. (y) Earnings per share Basic earnings per share is determined by dividing the proﬁ t attributable to members of the parent entity after related income tax expense by the weighted average number of ordinary shares outstanding during the ﬁ nancial year. Diluted earnings per share is calculated as net proﬁ t attributable to members, adjusted for: • • 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 47 Notes to the Financial Statements 30 June 2010 Notes CONSOLIDATED 2010 $’000 13,413 8,491 21,904 10,662 43 10,705 106 510 30 131 777 147 2,821 2,968 3,745 9,683 (6,688) 2,995 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 3. EXPENSES (i) Cost of sales Direct wages Other Total cost of sales (ii) Employee beneﬁ t expense Salaries and wages (including on-costs) Share based payment expense Total employee beneﬁ t expense (iii) Depreciation and amortisation Depreciation of non-current assets: - Leasehold improvements - Ofﬁ ce equipment - Furniture and ﬁ ttings - Plant and equipment Total depreciation of non-current assets Amortisation of non-current assets - Intellectual property - Deferred development costs Total amortisation of non-current assets Total depreciation and amortisation 19 (iv) Research and development costs Total research and development costs incurred during the period Less: development costs deferred 10 Net research and development costs expensed 48 infomedia.com.au Notes to the Financial Statements 30 June 2010 4. INCOME TAX The major components of income tax expense are: Statement of comprehensive income 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 statement of comprehensive income CONSOLIDATED 2010 $’000 2009 $’000 2,415 (488) 1,234 3,161 2,576 (1,067) 728 2,237 A reconciliation between tax expense and the product of accounting proﬁ t before income tax multiplied by the Company’s applicable income tax rate is as follows: Accounting proﬁ t before income tax 14,497 12,773 At the Company’s statutory income tax rate of 30% (2009: 30%) Adjustments in respect of income tax of previous years Additional research and development deduction Expenditure not allowable for income tax purposes Income tax expense reported in the statement of comprehensive income Tax consolidation 4,349 (677) (596) 85 3,161 3,832 (1,185) (592) 182 2,237 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 ﬁ nalisation of the group’s income tax return. The allocation of taxes under the tax funding agreement is recognised as an increase/decrease in the subsidiaries’ intercompany accounts with the tax consolidated group head company, Infomedia Ltd. infomedia.com.aU 49 Notes to the Financial Statements 30 June 2010 4. INCOME TAX (CONTINUED) Deferred income tax Deferred income tax at 30 June relates to the following: BALANCE SHEET STATEMENT OF COMPREHENSIVE INCOME 2010 $’000 2009 $’000 2010 $’000 2009 $’000 Consolidated Deferred tax liabilities Derivatives Property, plant and equipment Deferred development costs Intellectual property Other 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) 5. EARNINGS PER SHARE (908) - (5,965) (81) (78) (7,032) 46 145 737 461 243 (1,276) - (4,805) (125) - (6,206) 148 207 625 346 346 1,632 1,672 - - 1,160 (44) 78 102 62 (112) (115) 103 1,234 - (90) 1,406 (50) (6) (100) (115) (85) 62 (294) 728 Basic earnings per share amounts are calculated by dividing net proﬁ t for the year attributable to ordinary equity holders of the parent entity by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net proﬁ t attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year (adjusted for the effects of dilutive options). The following reﬂ ects the income and share data used in the total operations basic and diluted earnings per share computations: Net proﬁ t attributable to equity holders from continuing operations Weighted average number of ordinary shares for basic earnings per share Effect of dilution: CONSOLIDATED 2010 $’000 11,336 2009 $’000 10,536 Number of shares 309,754,267 Number of shares 317,723,325 Share options Adjusted weighted average number of ordinary shares for diluted earnings per share 24,417 309,778,684 57,416 317,780,741 Since the reporting date, prior to the completion of these ﬁ nancial statements, the Company has repurchased a further 1,117,182 shares through its buy back program at a weighted average price of 25.85 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 1,650,000 (2009: 2,150,000). 50 infomedia.com.au Notes to the Financial Statements 30 June 2010 CONSOLIDATED 6. DIVIDENDS PROPOSED OR PAID (a) Dividends paid during the year: Interim dividend – 1.2 cents unfranked (2009: 0.7 cents fully franked) per share Prior year ﬁ nal dividend – 2.1 cents, franked at 0.7 cents (2009: 1.4 cents fully franked) per share Rounding Total dividends paid during the year (b) Dividends proposed and not recognised as a liability: Final dividend – 1.2 cents per share, unfranked. (2009: 2.1 cents, franked at 0.7 cents) (c) Franking credit balance: The amount of franking credits available for the subsequent ﬁ nancial year are: – franking account balance as at the end of the ﬁ nancial year – franking credits/(debits) that will arise from the payment/(receipt) of income tax payable/ (receivable) as at the end of the ﬁ nancial year 2010 $’000 3,729 6,534 - 10,263 3,644 92 864 956 If fully franked, the tax rate on dividends is 30% (2009: 30%). 30 June 2010 CONSOLIDATED 7. TRADE AND OTHER RECEIVABLES (CURRENT) Trade debtors Allowance for impairment loss (a) Other debtors (a) Allowance for impairment loss 2010 $’000 4,330 (218) 4,112 48 4,160 2009 $’000 2,215 4,485 (1) 6,699 6,534 113 (113) - 2009 $’000 4,945 (644) 4,301 95 4,396 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 gain of $283,000 (2009: $742,000 loss) has been recognised by the Company in the current year. These amounts have been included in the other expenses item. The amount of the allowance/impairment loss is recognised as the difference between the carrying amount of the debtor and the estimated future cash ﬂ ows expected to be received from the relevant debtors. Movements in the provision for impairment loss were as follows: At 1 July Charge/(release) for the year Foreign exchange translation Amounts written off At 30 June 644 (283) (16) (127) 218 272 742 (17) (353) 644 At 30 June, the aging analysis of trade receivables is as follows: Total 0-60 days NI* 0-60 days CI* 61-120 days NI* 61-120 days CI* 121+ days NI* 121+ days CI* 2010 Consolidated ($’000) 4,330 2009 Consolidated ($’000) 4,945 3,714 3,732 22 270 188 516 13 137 210 53 183 237 * Not impaired (NI). Considered impaired (CI). infomedia.com.aU 51 Notes to the Financial Statements 30 June 2010 CONSOLIDATED 2010 $’000 56 56 2009 $’000 54 54 CONSOLIDATED 2010 $’000 2009 $’000 428 (373) 55 6,845 (6,003) 842 403 (161) 242 3,137 (2,971) 166 10,813 (9,508) 1,305 950 (644) 306 6,702 (5,493) 1,209 272 (131) 141 3,021 (2,840) 181 10,945 (9,108) 1,837 8. INVENTORIES Raw materials At cost Total inventories at the lower of cost and net realisable value 30 June 2010 9. PROPERTY, PLANT AND EQUIPMENT (a) Leasehold improvements At cost Accumulated amortisation Ofﬁ ce equipment At cost Accumulated depreciation Furniture and ﬁ ttings At cost Accumulated depreciation Plant and equipment At cost Accumulated depreciation Total property, plant and equipment At cost Accumulated depreciation and amortisation Total written down amount 52 infomedia.com.au Notes to the Financial Statements 30 June 2010 9. PROPERTY, PLANT AND EQUIPMENT (CONTINUED) (b) Reconciliation of property, plant and equipment carrying values CONSOLIDATED 2010 $’000 2009 $’000 Leasehold Improvements Carrying amount – opening balance Additions Disposals Depreciation Carrying amount – closing balance Ofﬁ ce equipment Carrying amount – opening balance Additions Disposals Depreciation Carrying amount – closing balance Furniture and ﬁ ttings Carrying amount – opening balance Additions Disposals Depreciation Carrying amount – closing balance Plant and equipment Carrying amount – opening balance Additions Depreciation Carrying amount – closing balance Total property, plant and equipment Carrying amount – opening balance Additions Disposals Depreciation Carrying amount – closing balance 306 - (145) (106) 55 1,209 148 (5) (510) 842 141 131 - (30) 242 181 116 (131) 166 1,837 395 (150) (777) 1,305 432 6 - (132) 306 1,146 703 (16) (624) 1,209 159 8 (2) (24) 141 315 84 (218) 181 2,052 801 (18) (998) 1,837 infomedia.com.aU 53 Notes to the Financial Statements 30 June 2010 CONSOLIDATED Development costs1 Intellectual property2 Goodwill 2 Total $’000 $’000 $’000 $’000 21,983 (5,965) 16,018 16,018 6,688 (2,821) 19,885 28,671 (8,786) 19,885 2,537 (2,120) 417 417 - (147) 270 2,537 (2,267) 270 8,541 - 8,541 8,541 - - 8,541 8,541 - 8,541 33,061 (8,085) 24,976 24,976 6,688 (2,968) 28,696 39,749 (11,053) 28,696 10. INTANGIBLE ASSETS AND GOODWILL At 1 July 2009 Cost (gross carrying amount) Accumulated amortisation Net carrying amount Year ended 30 June 2010 At 1 July 2009, net of accumulated amortisation and impairment Additions Amortisation At 30 June 2010, net of accumulated amortisation and impairment At 30 June 2010 Cost (gross carrying amount) Accumulated amortisation Net carrying amount 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 ﬁ nite life and is amortised using the straight-line method over a period not exceeding four years commencing from the commercial release of the project. If an impairment indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying amount. Intellectual property includes intangible assets acquired through business or territory acquisition and relates primarily to copyright and software code over key products. Intellectual property is amortised over its useful life, being three years. 54 infomedia.com.au Notes to the Financial Statements 30 June 2010 CONSOLIDATED Development costs Intellectual Property Goodwill Total $’000 $’000 $’000 $’000 10. INTANGIBLE ASSETS AND GOODWILL (CONTINUED) At 1 July 2008 Cost (gross carrying amount) Accumulated amortisation Net carrying amount Year ended 30 June 2009 15,457 (4,128) 11,329 At 1 July 2008, net of accumulated amortisation and impairment 11,329 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 - 6,526 (1,837) 16,018 21,983 (5,965) 16,018 2,096 (1,513) 583 583 - 441 (607) 417 2,537 (2,120) 417 8,541 - 8,541 8,541 - - - 8,541 8,541 - 8,541 26,094 (5,641) 20,453 20,453 - 6,967 (2,444) 24,976 33,061 (8,085) 24,976 infomedia.com.aU 55 Notes to the Financial Statements 11. 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 to Note 24) for impairment testing as follows: • Asia Paciﬁ c; • 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 ﬂ ow projections as at 30 June 2010 based on ﬁ nancial budgets approved by the Board for the 2011 ﬁ nancial year extrapolated for a ﬁ ve year period on the basis of 5% growth together with a terminal value. The pre-tax discount rate applied to cash ﬂ ow projections is 14% (2009: 14%). The discount rate reﬂ ects management’s estimate of the time value of money and the rates speciﬁ c to the unit. Carrying amount of goodwill allocated to each of the cash-generating units is as follows: Asia Paciﬁ c Europe $’000 1,938 $’000 4,074 North America $’000 1,954 Latin and South America $’000 575 2010 $’000 8,541 CONSOLIDATED Carrying amount of goodwill Total 2009 $’000 8,541 Key assumptions used in value-in-use calculations The following describes each key assumption on which management has based its cash ﬂ ow projections when determining the value in use of its cash-generating units: • • • • • the Company will continue to have access to the data supply from automakers over the budgeted period; the Company will not experience any substantial adverse movements in currency exchange rates; the Company’s research and development program will ensure that the current suite of products remains leading edge; the Company is able to maintain its current gross margins; and the discount rates estimated by management are reﬂ ective of the time value of money. Management has used an AUD/USD exchange rate of $0.92 and an AUD/EUR exchange rate of $0.67 in its cash ﬂ ow projections. Sensitivity to changes in assumptions Growth rate assumptions – Management notes if negative growth rates are applied to revenues; by 5% over the ﬁ ve year period, this still yields a recoverable amount above the carrying amount. Discount rate assumptions – Management recognises that the time value of money may vary from what it has estimated. Management notes that applying a discount rate of double the current rate still yields a recoverable amount above the 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 a recoverable amount above the carrying amount. 56 infomedia.com.au Notes to the Financial Statements 30 June 2010 Notes CONSOLIDATED 12. 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. 13. PROVISIONS (CURRENT) Employee beneﬁ ts Provision for non-cancellable surplus lease space and other lease incentives 14. DEFERRED REVENUE (CURRENT) Revenue in advance 12(a) 15(c) 15(a) 2010 $’000 1,027 2,711 3,738 2,000 - 2,000 481 481 2009 $’000 686 2,919 3,605 2,135 265 2,400 458 458 infomedia.com.aU 57 Notes to the Financial Statements 30 June 2010 Notes CONSOLIDATED 15. PROVISIONS (NON-CURRENT) Employee beneﬁ ts Provision for non-cancellable surplus lease space and other lease incentives Make good provision 15(a) 15(b) (a) Movement in non-cancellable surplus lease space and other lease incentives provision Carrying amount at the beginning of the year Utilised Reversal of provision due to new lease and revision of terms 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 beneﬁ ts are anticipated. (b) Movement in make good provision Carrying amount at the beginning of the year Arising during the year Reversal of provision due to new lease and revision of terms 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 beneﬁ t 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 58 infomedia.com.au 13 13 2010 $’000 306 - - 306 619 (226) (422) 29 - - - - 500 - (500) - 2,389 (1,798) 1,715 2,306 2,000 306 2,306 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 Notes to the Financial Statements 30 June 2010 CONSOLIDATED 16. CONTRIBUTED EQUITY AND RESERVES Ordinary shares 2010 $’000 11,131 11,131 2009 $’000 12,863 12,863 Fully paid ordinary shares carry one vote per share and carry the right to dividends. Movement in ordinary shares on issue: At 1 July 2008 Shares repurchased At 30 June 2009 Shares repurchased At 30 June 2010 Number $’000 322,373,606 (11,103,612) 311,269,994 (6,694,918) 304,575,076 16,368 (3,505) 12,863 (1,732) 11,131 On 1 April 2008, the Company commenced a share buy back (on market within 10/12 limit). This was re-initiated on 1 April 2009. As at 30 June 2010, the Company had repurchased 21,396,496 shares for a total consideration of $6,607,000. Capital management When managing capital, the Company’s objective is to ensure that the entity continues as a going concern, as well as to maintain optimal returns to shareholders and beneﬁ ts for other stakeholders. Subject to the Company’s ﬁ nancial position and future ﬁ nancial performance, the Company’s current dividend policy is to distribute in the order of 75-85% of proﬁ t after tax. During the 2010 ﬁ nancial year, the Company paid dividends of $10,300,000 (2009: $6,700,000). 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. infomedia.com.aU 59 Notes to the Financial Statements 16. CONTRIBUTED EQUITY AND RESERVES (CONTINUED) Employee Option Plan There were nil (2009: 900,000) options issued during the current year at an average exercise price of $nil (2009: $0.33). 30 June 2010 CONSOLIDATED Employee equity beneﬁ ts reserve Foreign currency translation reserve Cash ﬂ ow hedge reserve Movement in reserves At 1 July 2008 Currency translation differences Share based payments Derivatives marked to market At 30 June 2009 Currency translation differences Share based payments Derivatives marked to market At 30 June 2010 Nature and purpose of reserves Employee equity beneﬁ ts reserve $’000 1,058 - 94 - 1,152 - 43 - 1,195 $’000 (56) 193 - - 137 (290) - - (153) $’000 625 - - 2,351 2,976 - - (857) 2,119 Total $’000 1,627 193 94 2,351 4,265 (290) 43 (857) 3,161 This reserve is used to record the value of equity beneﬁ ts provided to employees and Directors as part of their compensation. Refer to Note 19 for further details. Foreign currency translation reserve The foreign currency translation reserve is used to record exchange differences arising from the translation of the ﬁ nancial statements of foreign subsidiaries. It is also used to record the effect of hedging net investments in foreign operations. Cash ﬂ ow hedge reserve The derivatives reserve is used to record the mark to market valuation of forward currency contracts at the balance sheet date which are considered effective hedges. 60 infomedia.com.au Notes to the Financial Statements 30 June 2010 CONSOLIDATED 17. CASH FLOW STATEMENT (a) Reconciliation of proﬁ t after tax to the net cash ﬂ ows from operations Proﬁ t from ordinary activities after income tax expense Depreciation of non-current assets Amortisation of non-current assets Amortisation of employee options Disposal 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 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 ﬂ ow from operating activities (b) Reconciliation of cash Cash balance comprises: – cash at bank – cash on deposit 2010 $’000 11,336 777 2,968 43 150 - 371 (3) 446 (6,688) 134 (426) (83) (1,121) 1,013 1,234 23 10,174 2009 $’000 10,536 998 2,444 93 18 (5) 645 28 (3,174) (6,526) (221) 371 (239) 336 (717) 728 (111) 5,204 898 4,891 5,789 928 7,077 8,005 infomedia.com.aU 61 Notes to the Financial Statements 30 June 2010 18. COMMITMENTS AND CONTINGENCIES (a) Lease expenditure commitments Operating leases (non-cancellable): Minimum lease payments – not later than one year – later than one year and not later than ﬁ ve years – later than ﬁ ve years – aggregate operating lease expenditure contracted for at balance date CONSOLIDATED 2010 $’000 2009 $’000 1,207 3,556 1,301 6,064 1,446 1,261 - 2,707 Operating lease commitments are for ofﬁ ce accommodation both in Australia and abroad. (b) Performance bank guarantee Infomedia Ltd has a performance bank guarantee to a maximum value of $700,000 (2009: $700,000) relating to the lease commitments of its corporate headquarters. 62 infomedia.com.au Notes to the Financial Statements 19. SHARE BASED PAYMENT PLANS Employee Option Plan The Employee Option Plan entitles the Company to offer “eligible employees” options to subscribe for shares in the Company. Options will be granted at a nil issue price unless otherwise determined by the Directors of the Company, and each option enables the holder to subscribe for one share. The exercise price for the options granted will be as speciﬁ ed on the option certiﬁ cate or, if not speciﬁ ed, the volume weighted average price for shares of the Company for the ﬁ ve days trading immediately before the day on which the options were granted. The options may be exercised in accordance with the date determined by the Board, which must be within four years of the option being granted. Information with respect to the number of options granted under the employee share incentive scheme is as follows: Notes 2010 2009 Number of options Weighted average exercise price Number of options Weighted average exercise price Balance at beginning of year – granted – expired – exercised Balance at end of year 19(a) 19(b) 19(c) 19(d) 19(e) 2,650,000 - (500,000) - 2,150,000 0.44 - 0.42 - 0.45 1,950,000 900,000 (200,000) - 2,650,000 $0.50 $0.33 $0.49 - $0.44 (a) Options held at the beginning of the year The following table summarises information about options held by employees at 1 July 2009. Number of options Grant date Earliest vesting date Expiry date Weighted average exercise price 1,000,000 250,000 250,000 250,000 500,000 250,000 150,000 1/01/2008 1/02/2009 1/01/2008 1/01/2009 1/05/2008 1/10/2008 1/07/2008 1/01/2009 1/02/2010 1/01/2009 1/01/2010 1/05/2009 1/10/2009 1/07/2009 5/02/2011 5/02/2012 5/02/2011 5/01/2012 13/04/2011 31/10/2011 5/11/2011 $0.53 $0.29 $0.53 $0.29 $0.42 $0.37 $0.38 (b) Options granted during the year There were no options granted during the year. (c) Options expired during the year The following table summarises information about options expired during the year. Number of options Grant date Earliest vesting date Expiry date Weighted average exercise price 500,000 1/05/2008 1/05/2009 13/04/2011 $0.42 (d) Options exercised during the year There were no options exercised during the year. infomedia.com.aU 63 Notes to the Financial Statements 19. SHARE BASED PAYMENT PLANS (CONTINUED) (e) Options held at the end of the year The following table summarises information about options held by employees at 30 June 2010. Number of options Grant date Earliest vesting date Expiry date Weighted average exercise price 1,000,000 250,000 250,000 250,000 250,000 150,000 1/01/2008 1/02/2009 1/01/2008 1/01/2009 1/10/2008 1/07/2008 1/01/2009 1/02/2010 1/01/2009 1/01/2010 1/10/2009 1/07/2009 5/02/2011 5/02/2012 5/02/2011 5/01/2012 31/10/2011 5/11/2011 $0.53 $0.29 $0.53 $0.29 $0.37 $0.38 (f) Other details regarding options The weighted average fair value of options granted during the year was $nil (2009: $0.045). The fair value of the equity-settled transactions 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 Granted 1/10/2008 Granted 1/01/2009 Granted 1/02/2009 7.5% 37% 6.75% $0.38 $0.38 7.5% 35% 5.14% $0.37 $0.38 10.0% 35% 3.21% $0.29 $0.29 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 20. PENSIONS AND OTHER POST-EMPLOYMENT PLANS Superannuation commitments CONSOLIDATED 2010 $’000 43 2009 $’000 93 Contributions are made by the Company in accordance with the relevant statutory requirements. Contributions by the Company for the year ended 30 June 2010 were 9% (2009: 9%) of employees’ wages and salaries. These contributions are legally enforceable in Australia. The superannuation plans provide accumulation beneﬁ ts. 64 infomedia.com.au Notes to the Financial Statements 21. KEY MANAGEMENT PERSONNEL DISCLOSURES (a) Compensation of Key Management Personnel (i) Compensation by Category: Key Management Personnel Short term Post employment Other long term Termination beneﬁ ts Share based payments CONSOLIDATED 2010 $ 2009 $ 1,868,053 2,141,256 129,041 17,967 130,930 40,047 128,251 17,667 - 75,024 2,186,038 2,362,198 (b) Option holdings of Key Management Personnel (consolidated) 30 June 2010 Balance at beginning of period Granted as compensation Options exercised Expired Balance at end of period Vested at 30 June 2010 Directors Gary Martin Executives Michael Bodner* Nick Georges Michael Roach Andrew Pattinson Jonathan Pollard 1 July 2009 1,000,000 500,000 250,000 250,000 250,000 250,000 2,500,000 30 June 2010 Total Not exercisable Exercisable - 1,000,000 1,000,000 333,334 666,666 (500,000) - - - - - - - - 250,000 250,000 83,334 166,666 250,000 250,000 250,000 250,000 250,000 250,000 166,667 166,667 166,667 83,333 83,333 83,333 (500,000) 2,000,000 2,000,000 916,669 1,083,331 - - - - - - - - - - - - - - 30 June 2009 Balance at beginning of period Granted as compensation Options exercised Net change other Balance at end of period Vested at 30 June 2009 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 * Resigned 31 May 2010. - - - 250,000 250,000 250,000 750,000 30 June 2009 Total Not exercisable Exercisable - - - - - - - - - - (200,000) - - 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) 2,500,000 2,500,000 1,916,667 583,333 infomedia.com.aU 65 Notes to the Financial Statements 21. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED) (c) Shareholdings of Key Management Personnel 30 June 2010 Number of shares held in Infomedia Ltd Balance 1 July 2009 Granted as compensation On exercise of options Net change other Balance 30 June 2010 Directors Richard Graham Myer Herszberg Gary Martin Frances Hernon Andrew Moffat Executives Andrew Pattinson Nick Georges Michael Roach Jonathan Pollard Total 30 June 2009 Number of shares held in Infomedia Ltd Directors Richard Graham Myer Herszberg Gary Martin Frances Hernon Executives Andrew Pattinson Nick Georges Michael Roach Jonathan Pollard Total 102,204,060 23,421,589 607,590 5,000 - 2,447,567 24,421 18,721 1,996 128,730,944 - - - - - - - - - - - - - - - - - - - - 798,527 103,002,587 - 23,421,589 48,000 - 300,000 - - - - 655,590 5,000 300,000 2,447,567 24,421 18,721 1,996 1,146,527 129,877,471 Balance 1 July 2008 Granted as compensation On exercise of options Net change other Balance 30 June 2009 102,204,060 23,421,589 507,590 5,000 2,447,567 24,421 18,721 1,996 128,630,944 - - - - - - - - - - - - - - - - - - - - 100,000 - - - - - 102,204,060 23,421,589 607,590 5,000 2,447,567 24,421 18,721 1,996 100,000 128,730,944 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. 66 infomedia.com.au Notes to the Financial Statements 21. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED) (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 ﬁ nancial consulting services from Cowoso Capital Pty Limited in the prior year, a company in which Andrew Moffat is a Director. The total consulting services paid for the year ended 30 June 2010 of $nil (2009: $17,600) were on normal commercial terms. 22. AUDITOR’S REMUNERATION CONSOLIDATED 2010 $ 2009 $ 180,250 194,428 47,825 228,075 18,540 212,968 Amounts received or due and receivable by the auditor of Infomedia Ltd for: – an audit or review of the ﬁ nancial report of the entity and any other entity in the consolidated entity – corporate advisory consulting services in relation to the entity and any other entity in the consolidated entity 23. RELATED PARTY DISCLOSURES Ultimate parent Infomedia Ltd is the ultimate Australian parent company. Wholly owned group transactions (a) An unsecured trade receivable of $481,545 (2009: $620,116) remains owing to IFM Europe Ltd from Infomedia Ltd. (b) An unsecured trade receivable of $1,650,603 (2009: $733,565) remains owing from IFM North America Inc to Infomedia Ltd. (c) During the year, Infomedia Ltd received $16,817,282 (2009: $18,562,696) from IFM Europe Ltd for intra-group sales. (d) During the year, Infomedia Ltd received $7,467,452 (2009: $9,165,428) from IFM North America Inc for intra-group sales. (e) During the year, IFM Europe paid $547,159 (2009: $728,553) to IFM Germany GmbH for intra-group distribution services. Entity with deemed signiﬁ cant inﬂ uence over the Company Wiser Equity Pty Limited, a company in which Richard Graham is a Director, owns 33.82% of the ordinary shares in Infomedia Ltd (2009: 32.2%). infomedia.com.aU 67 Notes to the Financial Statements 24. SEGMENT INFORMATION 30 June 2010 Notes Asia Paciﬁ c Europe North America Latin and South America Corporate Total $’000 $’000 $’000 $’000 $’000 $’000 Business segments Revenue Sales revenue Consolidated revenue Segment result Finance revenue Finance costs 10,285 21,627 10,374 3,053 - 45,339 45,339 6,796 16,221 5,955 2,329 (16,871) 14,430 - - - - - - - - 103 (36) Consolidated proﬁ t before income tax 6,796 16,221 5,955 2,329 (16,804) Income tax expense 4 Consolidated proﬁ t after income tax - - - - 56 2,166 (512) 788 457 - - 10 228 - 87 - - - - - Assets Segment assets Unallocated assets Total assets Liabilities Segment liabilities Unallocated liabilities Total liabilities Capital expenditure Amortisation Depreciation 68 infomedia.com.au 103 (36) 14,497 (3,161) 11,336 1,654 44,638 46,292 1,245 11,306 12,551 - - 167 395 2,968 247 2,968 400 Notes to the Financial Statements 24. SEGMENT INFORMATION (CONTINUED) 30 June 2009 Notes Asia Paciﬁ c Europe North America Latin and South America Corporate Total $’000 $’000 $’000 $’000 $’000 $’000 Business segments Revenue Sales revenue Consolidated revenue Segment result Finance revenue Finance costs 11,187 25,282 12,731 5,141 - 54,341 54,341 5,359 20,116 8,123 3,878 (25,061) 12,415 - - 9 - - - - - 410 (61) Consolidated proﬁ t before income tax 5,359 20,125 8,123 3,878 (24,712) Income tax expense 4 Consolidated proﬁ t after income tax Assets Segment assets Unallocated assets Total assets Liabilities Segment liabilities Unallocated liabilities Total liabilities Capital expenditure Amortisation Depreciation - - - - 92 6,416 2,895 909 1,292 31 - 17 232 - 58 - - - - - 419 (61) 12,773 (2,237) 10,536 9,311 38,298 47,609 2,201 9,904 12,105 - - 538 801 2,444 831 2,444 998 Identiﬁ cation of reportable segments The Company has identiﬁ ed its operating segments based on the internal reports that are reviewed and used by the Board of Directors (the chief operating decision makers) in assessing performance and in determining the allocation of resources. The operating segments are identiﬁ ed by management based on the region in which the product is sold. Discrete ﬁ nancial information about each of these operating businesses is reported to the Board of Directors regularly. The reportable segments are based on aggregated operating segments determined by the similarity of the products produced and sold, as these are the sources of the Company’s major risks and have the most effect of the rates of return. Accounting policies and inter-segment transactions The accounting policies used by the Company in reporting segments internally are the same as those contained in Note 2 to the accounts and in the prior period. The Company accounting policies for segments are applied to the respective segments up to the segment result level. Major customers The Company has many customers to which it provides products. There is no signiﬁ cant reliance on any single customer. infomedia.com.aU 69 Notes to the Financial Statements 25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES The Company’s principal ﬁ nancial instruments, other than derivatives, comprise cash and short term deposits. The Company has various other ﬁ nancial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. The Company also enters into derivative transactions through forward currency contracts. The purpose is to manage the currency risks arising from the Company’s operations. It is, and has been throughout the period under review, the Company’s policy that no trading in ﬁ nancial instruments shall be undertaken. The main risks arising from the Company’s ﬁ nancial instruments are cash ﬂ ow interest rate risk, liquidity risk, foreign currency risk and credit risk. Details of the signiﬁ cant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of ﬁ nancial asset, ﬁ nancial liability and equity instrument are disclosed in Note 2 to the ﬁ nancial statements. (a) 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 $5,789,000 (2009: $8,005,000) with a ﬂ oating interest rate. The Company’s policy is to accept the ﬂ oating interest rate risk with both its cash holdings and bank loans. Cash is held primarily with leading Australian banks for periods not exceeding 30 days, hence any reasonably expected change in interest rates (+/- 1%) would not have a signiﬁ cant impact on post-tax proﬁ t or other comprehensive income. (b) Foreign currency risk The Company has transactional currency exposures. These exposures mainly arise from the transactional sale of products and to a lesser extent the associated cost of sales component relating to these products. As the Company’s product offerings are typically made on a recurring monthly subscription basis, there is a relatively high degree of reliability in estimating a proportion of future cash ﬂ ow exposures. Approximately half of the Company’s sales are denominated in United States dollars and around one third of the Company’s sales are denominated in Euros. The Company seeks to mitigate exposure to movements in these currencies by entering into forward exchange derivative contracts under an approved hedging policy. As a result of the Company’s recent investment in both its European and United States subsidiaries, the Company’s balance sheet can be affected by movements in both the Euro and the United States dollar against the Australian dollar. At 30 June 2010, the Company had the following exposure to US$ foreign currency which is not designated in cash ﬂ ow hedges: Consolidated 2010 $’000 11 1,585 1,596 2009 $’000 116 (2,860) 2,744 Financial assets Cash and cash equivalents Derivatives 70 infomedia.com.au Notes to the Financial Statements 25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) At 30 June 2010, the Company had the following exposure to EUR foreign currency which is not designated in cash ﬂ ow hedges: Financial assets Cash and cash equivalents Derivatives Consolidated 2010 $’000 3 1,284 1,287 2009 $’000 47 (1,323) (1,276) The following sensitivity is based on the foreign currency risk exposures in existence at the balance sheet date: At 30 June 2010, had the Australian dollar moved, as illustrated in the table below, with all other variables held constant, post-tax proﬁ t and total equity would have been affected as follows: Consolidated AUD/USD +10% AUD/USD –15% AUD/EUR +10% AUD/EUR –15% Post-tax proﬁ t Higher/(Lower) Total equity Higher/(Lower) 2010 $’000 (1) 2 - - 2009 $’000 (10) 20 (4) 8 2010 $’000 979 (1,486) 651 (1,286) 2009 $’000 1,408 (2,437) 1,011 (2,035) Management believes the balance date risk exposures are representative of the risk exposure inherent in the ﬁ nancial instruments. (c) Credit risk The Company’s credit risk with regard to accounts receivable is spread broadly across three automotive groups – manufacturers, distributors and dealerships. Receivable balances are monitored on an ongoing basis, with the result that the Company’s exposure to bad debts is not signiﬁ cant. As the products typically have a monthly life cycle and are priced on a relatively low subscription price, the concentration of credit risk is typically low, with automotive manufacturers being the exception. With respect to credit risk arising from the other ﬁ nancial assets of the Company, which comprise cash and cash equivalents, 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, collateral is not requested nor is it the Company’s policy to securitise its trade and other receivables. (d) Price risk There are no items on the balance sheet as at 30 June 2010 that are subject price risk. infomedia.com.aU 71 Notes to the Financial Statements 25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (e) Liquidity risk The Company’s exposure to liquidity risk is minimal given the relative strength of the balance sheet and cash ﬂ ows from operations. Given the nature of the Company’s operations, and no borrowings, the Company does not have ﬁ xed or contracted payments at balance sheet date other than with respect to its cash ﬂ ow hedges which are disclosed below. Consequently, the remaining contractual maturity of the group entity’s ﬁ nancial liabilities is as stated in the balance sheet and is less than 60 days. Deferred revenue requires no cash outﬂ ow. Liquidity and interest rate risk The following table sets out the carrying amount, by maturity, of the ﬁ nancial instruments exposed to interest rate or liquidity risk: YEAR ENDED 30 JUNE 2010 Floating rate Cash and cash equivalents Trade and other receivables Trade and other payables YEAR ENDED 30 JUNE 2009 Floating rate Cash and cash equivalents Trade and other receivables Trade and other payables Less than one year Two to ﬁ ve years Greater than ﬁ ve years Weighted average effective interest rate CONSOLIDATED $’000 $’000 $’000 5,789 4,160 (3,738) - - - - - - CONSOLIDATED % 3.7 - - Less than one year Two to ﬁ ve years Greater than ﬁ ve years Weighted average effective interest rate $’000 8,005 4,396 (3,605) $’000 $’000 - - - - - - % 2.7 - - Interest on ﬁ nancial instruments classiﬁ ed as ﬂ oating rate is repriced at intervals of less than one year. Interest on ﬁ nancial instruments classiﬁ ed as ﬁ xed rate is ﬁ xed until maturity of the instrument. The other ﬁ nancial instruments of the Company that are not included in the above tables are non-interest bearing and are therefore not subject to interest rate risk. 72 infomedia.com.au Notes to the Financial Statements (f) Fair value Derivative instruments use valuation techniques other than quoted prices in active markets, with only observable market inputs for the asset or liability, either directly (as prices) or indirectly (derived from prices) to determine the fair value of foreign exchange contracts. Derivative contracts The following table summarises the forward exchange contracts on hand at 30 June 2010. Maturity Company buys Company sells Exchange rate CONSOLIDATED Company sells United States dollars (USD) Less than one year Company sells Euros (E) Less than one year Company sells United States dollars (USD) Greater than one year and not greater than two years Company sells Euros (E) Greater than one year and not greater than two years $A’000 10,700 $A’000 8,909 $A’000 4,258 $A’000 2,714 USD’000 7,443 E’000 5,280 USD’000 3,401 E’000 1,700 0.696 0.593 0.799 0.626 The mark to market valuation of these contracts at 30 June 2010 was $3,028,000, which is booked directly in equity. The following table summarises the forward exchange contracts on hand at 30 June 2009. Maturity Company buys Company sells Exchange rate CONSOLIDATED Company sells United States dollars (USD) Less than one year Company sells Euros (E) Less than one year Company sells United States dollars (USD) Greater than one year and not greater than two years Company sells Euros (E) Greater than one year and not greater than two years $A’000 13,481 $A’000 13,080 $A’000 10,067 $A’000 4,486 USD’000 9,306 E’000 6,760 USD’000 6,943 E’000 2,400 0.690 0.517 0.690 0.535 infomedia.com.aU 73 Notes to the Financial Statements 26. FINANCIAL INSTRUMENTS Fair values Set out below is a comparison by category of carrying amounts and fair values of all of the Company’s ﬁ nancial instruments recognised in the ﬁ nancial statements. The fair values of derivatives have been calculated by discounting the expected future cash ﬂ ows at prevailing interest rates. CONSOLIDATED Financial assets Cash and cash equivalents Trade and other debtors Derivatives Financial liabilities Carrying amount Fair value 2010 $’000 5,789 7,418 3,028 2009 $’000 8,005 8,100 4,252 2010 $’000 5,789 7,418 3,028 2009 $’000 8,005 8,100 4,252 Trade and other creditors 3,738 3,605 3,738 3,605 27. SUBSEQUENT EVENTS Gary Martin notiﬁ ed the Board that he will not be seeking to renew his service agreement when it expires on 31 December 2010. Other than this, there has been no matter or circumstance that has arisen since the end of the ﬁ nancial year that has signiﬁ cantly affected the operations of the Company, the results of those operations, or the state of affairs of the Company. 28. PARENT ENTITY INFORMATION Parent Entity 2010 $’000 13,154 44,923 5,674 11,307 11,131 19,171 1,195 2,119 33,616 11,765 10,908 2009 $’000 16,871 45,363 5,119 10,703 12,863 17,669 1,151 2,977 34,660 16,641 18,992 Current assets Total assets Current liabilities Total liabilities Contributed equity Retained earnings Employee equity beneﬁ t reserve Cash ﬂ ow hedge reserve Total shareholders’ equity Proﬁ t or loss of the parent entity Total comprehensive income of the parent entity 74 infomedia.com.au Directors’ Declaration DIRECTORS’ DECLARATION In accordance with a resolution of the Directors of Infomedia Limited, I state that: In the opinion of the Directors: (a) the ﬁ nancial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s ﬁ nancial position as at 30 June 2010 and of its performance for the year ended on that date; and (ii) complying with Accounting Standards and the Corporations Regulations 2001; and (b) the ﬁ nancial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 2b; and (c) there are reasonable grounds to believe that the consolidated entity will be able to pay its debts as and when they become due and payable. This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the ﬁ nancial year ended 30 June 2010. On behalf of the Board Richard David Graham Chairman Sydney 24 August 2010 infomedia.com.aU 75 Independent auditor’s report to the members of Infomedia Ltd Report on the Financial Report We have audited the accompanying financial report of Infomedia Ltd, which comprises the balance sheet as at 30 June 2010, and the statement of comprehensive income, 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 on page 14 of the directors’ report. In addition to our audit of the financial report, we were engaged to undertake the services disclosed in the notes to the financial statements. The provision of these services has not impaired our independence. 32 76 infomedia.com.au 56 Liability limited by a scheme approved under Professional Standards Legislation Auditor’s Opinion In our opinion: 1. the financial report of Infomedia Ltd is in accordance with the Corporations Act 2001, including: i) ii) giving a true and fair view of the consolidated entity’s financial position at 30 June 2010 and of its 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 2010. 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 Ltd for the year ended 30 June 2010, complies with section 300A of the Corporations Act 2001. Ernst & Young J K Haydon Partner Sydney 24 August 2010 57 infomedia.com.aU 77 Corporate Governance Overview This Corporate Governance Statement, which is current as at the date of the Directors’ Report, has been updated to reﬂ ect 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 (CGC) Corporate Governance Principles and Recommendations 2nd Edition (“Governance Principles”). Unless otherwise indicated, the measures taken were in place for the whole ﬁ nancial year. Corporate governance review The Company has in place charters, policies and procedures in support of the Governance Principles. During the reporting year, the Board remains satisﬁ ed that the Company’s corporate governance practices are consistent with the spirit and intent of the Governance Principles. “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 ofﬁ cer should not be exercised by the same individual The Board currently comprises four non-executive Directors and one executive Director. The role of Chairman and Chief Executive Ofﬁ cer has been split since 31 December 2004. Despite having retired within the past six 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 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 Ofﬁ cer, is also not considered by the Board as independent. However, two of the Company’s continuing Directors, Ms Hernon and Mr Andrew Moffat, meet the criteria for independence. A third non-executive Director, Mr Myer Herszberg, whilst being a major shareholder, is considered by the Board, having regard to the quantitative, qualitative and cumulative criteria, to operate independently and objectively. The Board is of the view that good, or sound, leadership and judgment 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 ofﬁ ce upon the vote of the Company’s shareholders and that they may elect members to the Board regardless of their standing, independent or otherwise. 78 infomedia.com.au Corporate Governance In order to facilitate the discharge of their duties, including in respect of independent decision making, the Board conﬁ rmed in April 2004 its policy for Directors obtaining independent professional advice at the expense of the Company. COMMENTARY The Board and senior management – structure and remuneration ASX CGC Principle 1 – Lay solid foundations for management and oversight Establish and disclose the respective roles and responsibilities of board and management ASX CGC Principle 2 – Structure the board to add value Have a board of an effective composition, size and commitment to adequately discharge its responsibilities and duties ASX CGC Principle 8 – Remunerate fairly and responsibly Ensure that the level and composition of remuneration is sufﬁ cient 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 ofﬁ ce for three years or more, other than the Chief Executive Ofﬁ cer, must retire by rotation each year. If eligible, the retiring Directors may offer themselves for re-election. The Infomedia Board currently comprises ﬁ ve Directors and details of their names, terms of ofﬁ ce, committee memberships, meeting attendance records, skills, experience and expertise, 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. The emphasis has been 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. infomedia.com.aU 79 Corporate Governance ASX CGC Recommendation 2.4 – Establish a nomination committee ASX CGC Recommendation 8.1 – Establish a remuneration committee Since July 2007, the Board has re-assumed 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 and 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 and 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 and 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 and 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 individuals, the Chairman of the Board and the senior executives, and aims to provide a framework for structuring total remuneration that will facilitate both short and long term growth and success of the Company which is competitive with the market place and which 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 indeﬁ nitely 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 beneﬁ ts and nor do they currently participate in any of the Company’s incentive arrangements. Non-executive Directors have previously received options, but this practice was 80 infomedia.com.au Corporate Governance 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 Recommendation 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 reﬁ ned during FY2006, primarily to formalise guidelines for the resolution of internal grievances. The soundings conducted as part of the review process served to promote greater awareness and use of enhanced procedures for seeking guidance where areas of concern exist, for the management of grievance issues and for the notiﬁ cation of matters which potentially involve a compliance or business risk element. 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, Ofﬁ cers and Employees was originally established in October 2001 and was reviewed, amended and adopted by the Infomedia Board in April 2004, upon the recommendation of the 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, Ofﬁ cers and Employees was adopted by the Board and a summary was placed on the Company’s website. Financial reporting and risk management ASX CGC Principle 4 – Safeguard integrity in ﬁ nancial reporting. Have a structure to independently verify and safeguard the integrity of the company’s ﬁ nancial reporting ASX CGC 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 a majority of independent directors; is chaired by an independent chair who is not the chair of the board; has at least three members infomedia.com.aU 81 Corporate Governance 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 and Governance Committee is of “...sufﬁ cient size, independence and technical expertise to discharge its mandate effectively”. As noted in the discussion about ASX CGC Recommendation 2.1 above, although traditionally the Board has applied an executive Director/non-executive Director classiﬁ cation to its membership, the Board believes that the Audit, Risk and Governance Committee’s members meet an objective assessment of quantitative and qualitative criteria for independence. Therefore, the Committee meets the requirements for an independent Chairman and a majority of independent Directors under ASX CGC Recommendation 4.2. A summary of the Audit, Risk and Governance Committee’s Charter can be found on the Company’s website. The current Audit, Risk and 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 FY2010. 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 and Risk Committee, the Board adopted the Risk Management Policy in July 2004. During the FY2006 reporting period, the then Audit and 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 and Governance Committee, whilst the establishment of risk management procedures, compliance and control rests with the Chief Executive Ofﬁ cer, Chief Financial Ofﬁ cer and senior executives and, at a daily operating level, with departmental managers, line managers and individuals as part of regular business conduct. 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 ofﬁ cer (or equivalent) and the chief ﬁ nancial ofﬁ cer (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 ﬁ nancial reporting risks 82 infomedia.com.au Corporate Governance The Company’s ﬁ nancial reporting obligations for FY2010 have been fulﬁ lled, as they have in previous years, in accordance with applicable legal and accounting requirements: see the ﬁ nancial statements and notes contained in the Directors’ Report and the Independent Audit Report. Having acted in accordance with the Risk Management Policy and Risk Management Plan, the Chief Executive Ofﬁ cer and the Chief Financial Ofﬁ cer have provided the Board with the necessary certiﬁ cations 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 ﬁ nal quarter of FY2006. The review concluded that both the continuous and periodic reporting obligations imposed under the ASX Listing Rules, and the Company’s internal procedures in respect of them, were well understood by Senior Management. 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 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 2010 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 83 Additional Information Top 20 holdings as at 3 September 2010 Holder name WISER EQUITY PTY LTD YARRAGENE PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED AUSTRALIAN REWARD INVESTMENT ALLIANCE CITICORP NOMINEES PTY LIMITED NATIONAL NOMINEES LIMITED MR ANDREW PATTINSON J P MORGAN NOMINEES AUSTRALIA LIMITED BOND STREET CUSTODIANS LIMITED (OFFICIUM SPECIAL SITUAT A/C) TOM HADLEY ENTERPRISES PTY LTD MR PETER ALEXANDER BROWN MR DAVID CLYDE TULLOCH WISER CENTRE PTY LTD (WISER CENTRE P/L S/F A/C) MR RICHARD GRAHAM MR NOEL D’SOUZA WAUCHOPE & KILGOUR PTY LTD 127 VICTORIA PTY LTD MR PETER PAUL RAUCHFUSS & MRS PATRICIA RAUCHFUSS SPORRAN LEAN PTY LTD (SPORRAN LEAN S/F A/C) APPLIED SENSORS PTY LTD (MULLIGAN PENSION FUND A/C) Analysis of holdings as at 3 September 2010 Total 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 84 infomedia.com.au Balance at 03-09-2010 % 101,077,501 23,421,589 14,618,573 3,212,898 3,059,220 2,808,836 2,447,567 1,701,686 1,663,693 1,500,000 1,000,000 1,000,000 1,000,000 926,559 707,784 543,000 523,645 510,000 506,970 500,000 164,729,521 303,407,894 33.314 7.719 4.818 1.059 1.008 0.926 0.807 0.561 0.548 0.494 0.330 0.330 0.330 0.305 0.233 0.179 0.173 0.168 0.167 0.165 54.293 Holders Total units % 409 2,058 1,488 2,721 216 6,892 328,028 6,602,100 12,462,584 84,086,260 199,928,922 0.108 2.176 4.108 27.714 65.894 303,407,894 100.000 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 Ofﬁ cer and Executive Director Frances Hernon Myer Herszberg Andrew Moffat Company Secretary Nick Georges Chief Financial Ofﬁ cer Jonathan Pollard Registered Ofﬁ ce 357 Warringah Road Frenchs Forest NSW Australia 2086 Auditor Ernst & Young Ernst & Young Centre 680 George Street Sydney NSW 2000 Share Registry Computershare Registry Services Pty Ltd GPO Box 7045 Sydney NSW 1115 Lawyers Thomson Playford Lawyers Level 25 Australia Square Tower 264 George Street Sydney NSW 2000 Infomedia and Microcat are registered trademarks, and LIVE, MARKET, 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 85 Notes 86 infomedia.com.au 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

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