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
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