Infomedia Annual Report 2012

Plain-text annual report

Ltd ABN 63 003 326 243 ANNUAL REPORT 2012 TABLE OF CONTENTS RESULTS AT A GLANCE CHAIRMAN’S LETTER CFO REPORT SUPERSERVICE STRATEGY SUPERSERVICE PRODUCTS DEVELOPMENT AND NETWORK SOLUTIONS CUSTOMER PERSPECTIVE DIRECTORS DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION STATEMENT OF COMPREHENSIVE INCOME STATEMENT OF FINANCIAL POSITION STATEMENT OF CASH FLOWS STATEMENT OF CHANGES IN EQUITY NOTES TO THE FINANCIAL STATEMENTS DIRECTORS’ DECLARATION INDEPENDENT AUDIT REPORT CORPORATE GOVERNANCE ADDITIONAL INFORMATION CORPORATE DIRECTORY 1 3 6 8 10 14 15 17 18 27 28 29 30 31 32 66 67 69 75 76 © 2012 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 Year Revenue* ($m) NPAT ($m) EBITDA ($m) DPS (¢) 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 21.1 7.7 12.6 2.7 34.5 12.8 20.0 2.5 43.8 13.4 20.9 2.75 61.8 18.3 30.6 3.4 69.6 20.7 35.7 3.8 59.1 5.5 27.3 3.4 55.6 18.1 25.8 11.0 54.6 15.3 23.6 4.0 51.7 13.1 20.0 3.2 51.3 10.5 15.9 2.8 2010 50.5 11.3 18.2 2.4 2011 48.9 10.0 18.8 2.4 2012 48.3 8.5 17.7 2.4 * Revenue includes currency hedging gains/losses INFOMEDIA.COM.AU 1. CHAIRMAN’S LETTER 2. INFOMEDIA.COM.AU CHAIRMAN’S LETTER “OUR SALES REVENUE GREW TO A TOTAL OF $45.7M AGAINST $44.1M FOR THE PREVIOUS FINANCIAL YEAR. THE INCREASE WAS DRIVEN BY GROWTH IN ALL PRODUCT LINES” FELLOW SHAREHOLDERS, THIS HAS BEEN A YEAR OF consumers direct access to the parts and service process, PROGRESS FOR OUR COMPANY. NOTWITHSTANDING we have expanded the deﬁ nition from “anywhere, any THE CHALLENGING GLOBAL ECONOMIC ENVIRONMENT, time” to “any way you want to work”. OUR PRODUCT SALES GREW, OUR ONLINE DELIVERY INFRASTRUCTURE AND SYSTEMS STRENGTHENED, WE GALVANIZED OUR BUSINESS WITH THE ACQUISITION OF DIFFERENT ASPECT SOFTWARE IN THE UK (DAS), AND WE RE-SIGNED MAJOR DATA LICENSE AGREEMENTS WITH GENERAL MOTORS, HYUNDAI MOBIS AND THE FORD MOTOR COMPANY. Last year I wrote to you about the One World mindset that many of our OE licensors have adopted for their aftersales operations. In the One World view, the OE customer experience is seamless no matter where in the world it takes place. I said this had been a long-held view of Infomedia and has inﬂ uenced the way we approached product development from the very beginning. The value of this as a business philosophy continues to be borne out as the business environment becomes ever more connected, 24/7, and interdependent. All of these elements are now coalescing into the redesign of our various applications and services into a new product family – Superservice. Later in this report, you will see how our creative teams have structured a strong product solution suite that dealers can operate as standalone components or integrate with other IT systems. Superservice is the ﬁ rst automotive ﬁ xed operations product-line of its kind that provides global uniformity for automakers in the key areas of electronic parts catalogue, service menus, vehicle health check, Our acquisition of DAS provided us with more product depth and an innovative suite of software products which have application to both the existing Infomedia customer base as well as new markets. With our One World approach to operations, DAS has already become integrated into the Infomedia company core, and is making important contributions and bringing new synergies to our product-line and European team. I am conﬁ dent it will positively impact our results in the years ahead. The renewals of our agreements with Hyundai MOBIS (Hyundai and KIA), General Motors and Ford point to the long and special relationships between these great companies and Infomedia. As we prepare for our 23rd year in automotive software leadership, we remain committed to contributing to their success, and to the success of all our customers, through the provision of our innovative, aff ordable, market leading solutions. online booking, and service history registration. In FY2013, Infomedia will release more OE product Superservice combines realtime data, interoperability, business analytics and more to give a consistent, intuitive user experience. There is nothing like it in the market. Already, we have clients across the globe processing service estimates on a common online platform and using our common online Electronic Parts Catalogue (EPC). Last year I wrote that our vision was to expand the depth implementations which are aimed directly at improving the sales and service experience with our One World approach in mind. These include Superservice for Chrysler, General Motors and Toyota in the USA, Microcat LIVE for Toyota in Great Britain, and more products for release in Russia, China and Latin America. I fully expect these to make a notable ﬁ nancial contribution. of our products and make them ubiquitous around the As you are aware, the majority of our revenues are world. By building solutions for the dealer that also allow denominated in US dollars or Euros, and despite our INFOMEDIA.COM.AU 3. CHAIRMAN’S LETTER active hedging approach, we still feel the impact of the As our online product usage accelerates and as our sales strong Australian dollar on our reported ﬁ nancial results. approach includes more site licenses and subscription AUD cash ﬂ ows from operations reduced from $11.3m (in packages, reporting our subscriptions under our previous the previous corresponding period) to $9.7m primarily single-unit methodology isn’t as informative as it once due to currency impacts and similarly, net proﬁ t was was. Consequently, we have devised a new approach reduced by $1.6m. that better represents our product subscription levels. However despite the forex handicap, our sales revenue At the bottom of the next page there are two charts. The grew to a total of $45.7m against $44.1m for the previous ﬁ rst is the single-unit subscription method as historically ﬁ nancial year. The increase was driven by growth in all reported from 2000 – 2011. The second shows our product-lines including $1.2m of sales obtained through new single-subscription-equivalents (SSE) approach the acquisition of DAS. All product-lines saw constant to reporting recurring subscriptions. 2011 ﬁ gures have currency sales growth during the 2012 ﬁ nancial year with been restated as SSE to allow for a meaningful 2011 revenue from Superservice products being the major – 2012 comparison. As a result you’ll see that we are contributor, increasing by $2.7m. now reporting that our total SSE subscriptions are over 4. INFOMEDIA.COM.AU CHAIRMAN’S LETTER 70,000 – an increase of 4,889 or 7.5% in FY2012. At the industry now wants. And, the recurring subscription individual product level, EPC subscriptions grew by 712 revenue model we pioneered 23 years ago is the and Superservice subscriptions grew by 4,177. I think preferred software licensing model of the industry today. this validates that the Company’s long-term product investment strategy is being realised. The investor market is also again recognising our fundamental ﬁ nancial strengths: no debt; year on year For the 13th year in succession the Directors issued underlying sales growth; great workforce; reliable dividends. The ﬁ nal fully franked dividend payment of 1.37 dividends, free cash ﬂ ow and the ability to acquire and cents, together with the fully franked interim dividend of absorb accretive acquisition opportunities. There’s 1.03 cents, resulted in a fully franked dividend of 2.4 cents no telling when the AUD will peak, but when it does for the full year. This payment is consistent with that paid the underlying economic growth performance of the in FY2011. company will become obvious. In August 2011 my fellow Directors and I were delighted For the year ahead we will continue to expand the depth to welcome Geoff Henderson back to the Infomedia of our product lines and the deployment of our entire Board. Geoff brings vast experience in the automotive Superservice Suite. We will build further interoperability industry through his many years as a senior executive at and greater business intelligence into our products as Ford Australia coupled with signiﬁ cant understanding of we do so. And we will continue to expand into the BRIC Infomedia. Geoff is Chair of the Audit, Risk and Corporate markets as well as Africa and the Middle East. Governance Committee, and I look forward to his valuable contribution in the years ahead. In closing I want to reaffi rm that Infomedia’s main goal is straightforward: to contribute to our customers’ success. I believe this year the market once again began to By so doing, we will continue our own success and deliver recognise the underlying investment values inherent in value to our shareholders. I commend this Annual Report Infomedia’s business, IP assets, management team and to you, and look forward to seeing you at the Annual overall IFM story. That resilience is even more evident General Meeting at our headquarters in Frenchs Forest now than it was 13 years ago when the company ﬁ rst on November 8th if you are able to attend in person. listed. We have withstood extraordinary global economic downturns and a massive foreign exchange handicap. Yet, today we are stronger, brighter and better placed than ever. We are ahead of our competitors in making the transition from disc to cloud based computing. We have made the move from being a disc-based application RICHARD GRAHAM provider to being a ‘Cloud’ based solution provider the Executive Chairman SINGLE SUBSCRIPTIONS SINGLE SUBSCRIPTION EQUIVALENTS 75,000 60,000 45,000 30,000 15,000 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 75,000 60,000 45,000 30,000 15,000 0 FY2011 FY2012 INFOMEDIA.COM.AU 5. CFO REPORT “DESPITE CHALLENGING GLOBAL ECONOMIC CONDITIONS, IN CONSTANT CURRENCY TERMS, OPERATIONAL PERFORMANCE IMPROVED BY $1.5M IN FY2012 OVER FY2011.” FOR THE 2012 FINANCIAL YEAR (FY2012) INFOMEDIA FY2011, there was an increase of $3.5m over FY2011 LTD (INFOMEDIA) ACHIEVED SALES REVENUE (SALES) Sales. $1.2m of these were derived from the acquisition. OF $45.7M AND NET PROFIT AFTER TAX (PROFIT) OF $8.5M. THIS COMPARES TO FINANCIAL YEAR 2011 (FY2011) WHERE SALES TOTALLED $44.1M AND PROFIT WAS $10.0M. OPERATING CASHFLOW DECREASED BY $1.6M TO $9.7M. Operational costs in constant currency increased $2.0m in FY2012 as the Company invested in hosting infrastructure to support increasing demand for its online products, worked on integrating the newly purchased subsidiary into its core business and also invested in As previously reported, a fully franked ﬁ nal dividend headcount to manage the growth in Sales. of 1.37 cents was paid to shareholders of record at 5 September 2012, bringing the total franked dividends for the year to 2.4 cents. This represents a payout ratio of 86% of Proﬁ t. At 30 June 2012, the Company remained It means despite challenging global economic conditions, in constant currency terms, operational performance improved by $1.5m in FY2012 over FY2011. debt free, with $6.6m in cash on the balance sheet. 2. THE IMPACT OF FOREIGN EXCHANGE RATES THE KEY DRIVERS In analysing the headline FY2012 Sales and Proﬁ t As with many exporters, the Company has borne the impacts of the escalating Australian dollar. Although the foreign currency theme has been a constant in analysing numbers compared with FY2011, the following three key our results in recent times, the impact on the FY2012 drivers stand out: results is again a signiﬁ cant factor. 1. Performance in the currency that the sale takes place in; The AUD strengthened on average a further 6% during 2. The impact of foreign exchange rates; and 3. Capitalisation and Amortisation of our Research & Development costs. 1. OPERATIONAL PERFORMANCE IN CONSTANT CURRENCY As primarily an exporter, the majority of the Company’s sales are made in US Dollars (USD) and Euros (EUR) with the remainder in Australian Dollars (AUD). Sales in the natural currencies of USD, EUR and AUD all increased during FY2012. The main driver of sales growth was an increase in revenue related to the Superservice product range. This comprised of Superservice Menus revenue growth which continues to be well received around the globe and Superservice Triage revenue that was derived from the acquisition of Diff erent Aspect Software Ltd (DAS) on 2 September 2011. Viewing Sales in constant currency terms i.e. translating the Sales into AUD at the FY2012 against both the USD and EUR. This was on the back of a 31% increase against the USD and a 22% increase against the EUR from FY2005 to FY2011. The Company maintains a hedging program that has seen positive hedging gains in both FY2011 and FY2012. However, despite this, the adverse foreign exchange impact translating overseas revenues consumed virtually all of the $3.5m constant currency sales growth mentioned in point 1 above. 3. R&D CAPITALISATION AND AMORTISATION The Company capitalises qualifying costs while a product is being developed. In some cases a product could be in development for a number of years and these costs build up and are held on the balance sheet. Once a product is released to the market for sale, the Company then releases those costs into the P&L in the form of amortisation over future periods. See note 2(k) to the Financial Report for further information on these same foreign currency rates as those that occurred in accounting policies. 6. INFOMEDIA.COM.AU CFO REPORT “LOOKING FORWARD, THE COMPANY ANTICIPATES FURTHER SALES AND SUBSCRIPTION GROWTH IN NATURAL CURRENCIES AND ALSO EXPECTS TO REPORT GROWTH IN ACTUAL AND REPORTED REVENUE.” The Company continued to invest in the development FY2011. The combined eff ect of those factors is a net of its next generation products during FY2012. Microcat reduction in proﬁ t of AUD$1.5m year on year. LIVE, Superservice Menus and the new Superservice Triage all received signiﬁ cant investment during the year THE YEAR AHEAD and capitalisation increased $1.2m. With the continued Looking forward, the Company anticipates further sales release of the new online products, the amortisation of and subscription growth in natural currencies and development costs increased. Also, the acquisition of DAS also expects to report growth in actual AUD reported during the year created an additional $1.6m of intangible revenue. The Company expects the continued strength assets that the Company commenced amortising during of the Australian dollar to dampen reported results the year. Consequently the total amortisation charge and camouﬂ age underlying growth. Signiﬁ cantly, an increased $0.9m compared with FY2011. PUTTING THE PIECES TOGETHER increase in the amortisation charge of approximately $2m is expected as we commercialise more products and continue to expense the intangible assets from the This ‘waterfall’ chart visually demonstrates how these acquisition. Accordingly, the Company has provided factors have impacted the results. guidance that it anticipates its 2013 ﬁ nancial year sales The chart starts on the left side with a bar representing the proﬁ t reported for FY2011. Then we see how sales growth adds $3.5m and operational cost increases off sets this by $2.0m in constant currencies. There is a $3.4m reduction due to the impact of foreign exchange rates on overseas revenues and a reduction in net expense of $0.2m due to the impact of capitalisation and revenue to be between $47m and $50m, and proﬁ t to be between $8m and $9m. amortisation. Changes in tax, interest and other non- operational items combine for a net $0.2m saving over JONATHAN POLLARD Chief Financial Offi cer INFOMEDIA.COM.AU 7. SUPERSERVICE – A STRATEGY FOR FUTURE GROWTH “OUR CORE BRAND PROMISE OF PROVIDING PRECISION TOOLS THAT INCREASE DEALERSHIP PRODUCTIVITY AND PROFITABILITY HAS BEEN THE FOUNDATION OF INFOMEDIA’S GLOBAL COMPETITIVE POSITIONING.” DURING THE LAST 12 MONTHS WE HAVE CONTINUED the main reasons for customers defecting from a brand TO EVOLVE OUR PRODUCT AND BRAND STRATEGY dealer to the aftermarket. WITH THE AIM OF STRENGTHENING INFOMEDIA’S LEADERSHIP POSITION IN THE MARKETPLACE. WHILE OUR CORE MICROCAT® AND SUPERSERVICE MENUS™ BRANDS HAVE CONTINUED TO ANCHOR OUR PRODUCT-LINE, WE CONTINUALLY EVALUATE EXTERNAL MARKET DRIVERS AND OUR OWN PRODUCT STRATEGIES TO ENSURE OUR SOLUTIONS REMAIN CUTTING EDGE, RELEVANT AND RESPONSIVE TO THE NEEDS OF AUTOMAKERS (OE), DISTRIBUTORS AND DEALERSHIPS. Our core brand promise of providing precision software tools that increase dealership productivity and proﬁ tability has been the foundation of Infomedia’s global competitive positioning. This brand promise is supported by extensive market knowledge, innovative IP, and easy to use software that enhances automation and relationship building to help create a great vehicle owner experience. Dealers are increasingly looking for solutions to give them an advantage against their aftermarket service and parts competitors. In today’s challenging economic environment, OE loyalty programs and refurbished waiting rooms with designer coff ee machines are simply not enough to deliver on customer expectations. Industry research points to a lack of transparency in service pricing and customer scepticism about service advice as In considering how to manage our product portfolio for the future, we researched the market to identify trends and analyse market segments where Infomedia’s core competencies could ﬁ ll new or latent dealer needs. From this we’ve gained insights into new and innovative ways to generate increased value beyond incremental growth. Our analysis has provided critical knowledge to create a stronger product direction that continues to build on the innovative heritage and goodwill of our company. That strategy is for our product-lines to work as a system of related solutions, which share a common technology platform and are interoperable. In Richard’s introduction he discussed our vision for product expansion and ubiquity; we’re now conﬁ dent we have the product strategy and technology platform to achieve this vision. We intuitively commenced on this path a few years ago by integrating our ﬂ agship Microcat® LIVE™ and Superservice Menus™ (SSM) products, allowing service and parts staff to transfer VIN and parts data from one product to the other, realising immediate and obvious productivity gains. Having achieved these synergies within our own products, we acquired Diff erent Aspect and incorporated several new solutions into our portfolio. The Superservice Triage™ vehicle health check (VHC) solution was of strategic importance, allowing us to integrate our Superservice Menus technology to create the most powerful VHC solution available today. This type of integration approach positions the Superservice solution suite as truly unique in a crowded marketplace where ‘me too’ products struggle to fulﬁ l the needs of the OE dealerships. The marketing framework for our solutions going forward is the Superservice™ brand; a clever mix of innovative technology and relationship building sales processes. Superservice is the commercial realisation of the Microcat.Network concept, promoting interoperability and 8. INFOMEDIA.COM.AU SUPERSERVICE – A STRATEGY FOR FUTURE GROWTH business ﬂ exibility with products that support the users in exception. Dealerships must react quickly to serve and the way they want to work. We are using this brand-mark retain the new generation of shoppers. They need to springboard into new and evolving opportunities and to be where their customers are – online and mobile. growth segments within the global automotive industry. Superservice supports these trends. Our solutions As our technology continues to evolve we will position deliver value beyond a dealership’s four walls, extending Superservice as the preferred aftersales solution suite convenience, accurate information and self-service for dealerships around the globe. directly to their customers. In terms of messaging, we have chosen a tone that In the following pages I am proud to share our new is understood and supported by dealers globally. marketing collateral for the Superservice suite. This work Superservice is a powerful set of aftersales solutions represents part of the launch kit for Superservice in the that can integrate with other IT systems or operate stand US and Asia Paciﬁ c markets. The kit speaks directly to alone; supporting each dealer to create processes that the needs and desires of the dealerships – building suit their business environment. The Superservice suite trust, performance and proﬁ ts. The new integrated brand takes dealerships beyond data and technical function, platform includes a new logo, iconography for each delivering accurate information and selling processes that product in the suite, updated photography and visual promote customer engagement and trust. Information is assets, a new multi-language website and User Interface delivered in a way that dealerships and their customers that any dealership can access 24/7 with product want it. Superservice helps position dealership staff as information, dealer training, videos and pricing. (Visit valued problem-solvers in the eyes of the customer. www.Superservice.com) It improves productivity within dealerships, provides greater control over the selling process and increases customer retention. I’m conﬁ dent that introducing the new Superservice branded suite of products will make a signiﬁ cant and positive impact on the way dealerships empower their Underpinning the Superservice framework is product staff and interact with their customers. I believe it will technology that enables Infomedia to build distinctive also provide sustained business growth opportunities products and capabilities by reusing core assets across for Infomedia. the product range. These core assets are a key to Infomedia’s competitive strategy. They include design architecture, proprietary production systems, source code, online infrastructure and considerable localisation expertise. Uniform architecture enables Infomedia to eff ectively develop new product solutions to increase our market penetration. The Internet has revolutionised how people purchase goods and services and dealership customers are no PETER PETROVSKI Director of Product Strategy menus™ Precision Service Quoting triage™ Multi-point Inspection insight™ Real-time CSI Survey connect™ Online Booking and Quotation register™ OE Service History EPC™ Microcat LIVE® OE Parts Catalog INFOMEDIA.COM.AU 9. SUPERSERVICE – A STRATEGY FOR FUTURE GROWTH G E N U I N E S E R V I C E A D V A N TA G E SERVICE SOLUTIONS THAT BUILD TRUST, PERFORMANCE AND PROFITS. solution overview WE ALL KNOW SERVICE EXCELLENCE, IS CRITICALLY IMPORTANT TO THE PROFITABILITY OF A DEALERSHIP. GENUINE DEALERSHIP SERVICE OPERATIONS AND SERVICE ADVISORS are under constant pressure to provide superior service, beat the competitive landscape, and increase productivity, proﬁ tability and customer retention. That’s why Superservice™ was developed. TO MAKE A LASTING DIFFERENCE, superior service needs to be more than just perception – it needs to be reality. Superservice is the value advantage that helps OE Aftersales teams advance their performance and economic goals to a new level. It will change what you believed was possible to achieve with your current resources. Superservice gives genuine OE dealers a distinctive and powerful advantage. It provides a robust suite of targeted information tools that can standalone or interconnect to empower the entire service chain process. Superservice is an ingenious marriage of information technology and customer sales psychology that is making a considerable diff erence for thousands of dealers around the world. WITH HIGHLY ACCURATE OE INFORMATION AND INTUITIVE USER INTERFACES, Superservice is a set of precision sales empowerment tools that build certainty and trust inside and outside the dealership, improving customer retention in an increasingly competitive and cost-conscious world. SUPERSERVICE INTEGRATED SOLUTIONS ARE SIMPLE TO USE and provide the critical information dealers need to do their job quickly and effi ciently, while leaving customers feeling better informed, charged fairly and delighted with their dealer relationship. Superservice strengthens the service advisor’s value, productivity and professional esteem in the eyes of the service customer, and helps management with better front-of-shop customer engagement and back-of-shop operational performance and metrics. ROVIDE: OUR ONLINE TOOLS PROVIDE: ■ Precision Service Quoting ■ Multi-point Inspection (with real-time costing) ■ Self-service Appointment Booking and Quoting ■ CSI Surveying ■ Lost Business Recovery ■ Service Sales Statistics ■ OE Parts Identiﬁ cation nnnnn aaaaandndndndnd dddddetetetetetaiaiaiaiailllll All with true OE VIN precision and detail IF YOU FEEL THERE IS MORE POTENTIAL IN YOUR BUSINESS THAN YOU’RE GETTING TODAY if you believe that accuracy, certainty and transparency are what your service customers value; if you think your service processes have productivity gains to be made; and if you believe you could win back lost business if you had a more eff ective way to manage it, then your dealership is ready for Superservice. Superservice Menus™ – VIN-speciﬁ c Precision Quoting spares customers and service advisors the frustration and hassle caused by quoting mistakes for service and repair operations. VIN-precise OE Menus free staff to quote and sell with conﬁ dence, creating customer certainty and trust, giving customers a sense of control, improving customer satisfaction and helping to maintain proﬁ t margins, all while increasing sales of genuine parts and labor. Superservice Triage™ – Tablet-based OE multi-point inspection (eMPI) that builds service revenue and customer trust by engaging customers in the service quotation process, providing an OE and VIN-speciﬁ c check-sheet process and instantaneous pricing of identiﬁ ed work – labor, parts and sundries. Triage’s statistics and reporting suite increases insights to improve sales techniques, recover deferred or lost work, develop service marketing campaigns and assess personnel performance. Superservice Insight™ – A user-friendly, tablet-based customer survey tool that processes feedback while it is being given. Instantaneous feedback gives management the opportunity to remedy an adverse opinion before the customer leaves the dealership, resulting in higher CSI scores. Insight’s unlimited survey capacity allows marketing-oriented departments to gain a range of customer views. In-built CSI analytics gives Ops management better information for business decisions and staff assessment. Superservice Connect™ – An online appointment system that integrates transparently into a dealership’s current website. Connect provides customer convenience and dealership productivity. Instead of waiting for business hours to call and conﬁ rm an appointment, customers simply log on at their convenience and choose an available time that suits their schedule. When they identify a standard service or repair for the appointment, Connect can also give them a VIN-precise quote. Superservice Register™ – A secure online database that records the comprehensive service and repair history for OE vehicles. Register provides dealerships and vehicle owners secure and trusted information about the service history of vehicles. This assists dealerships in automating accurate service advice and analytics. It also enhances the resale value of customers’ vehicles by making service histories transportable. Superservice EPC™ – An online OE electronic parts catalog that provides fast and accurate VIN-based interpretation. EPC has powerful search functions and an intuitive, user-friendly interface that helps boost ﬁ xed operations’ effi ciency and proﬁ tability. It can operate as a standalone POS for counter sales or seamlessly integrate with other Superservice tools to facilitate automated parts identiﬁ cation and pricing, so you can provide even faster, more effi cient customer service. (Not currently available for GM.) Now launching Superservice for: SERVICE AND PARTS SALES SOLUTION SUITE SUPER SERVICE IS MORE THAN PERCEPTION – IT’S REALITY. It’s a better, more productive, more proﬁ table way of doing business. It’s win–win. It’s a direct path to future sales. 10. INFOMEDIA.COM.AU SUPERSERVICE – A STRATEGY FOR FUTURE GROWTH G E N U I N E S E R V I C E A D VA N TA G E PRECISION ESTIMATING RETAINS CUSTOMERS AND SELLS SERVICE LOSING CUSTOMERS TO THE AFTERMARKET, IS NO LONGER INEVITABLE. WHEN A SERVICE QUOTE AND A SERVICE INVOICE DON’T MATCH, it erodes customer trust and dealership proﬁ tability. It contributes to the high fall-off of customer service retention rates that are accepted as “normal” after the second or third year of vehicle ownership. THE SUPERSERVICE™ QUOTING ADVANTAGE Superservice Menus™ is the professional online OE licensed system whose service quotation process enhances service customer retention and staff productivity. It off ers a service edge to OE dealers by signiﬁ cantly improving customer satisfaction, and increasing sales of genuine parts and labor. It does this by addressing three essential fundamentals of a successful service quotation process: Accuracy, Certainty and Trust. OVERCOMING THE CHALLENGE OF TIME Accurately detailed, professionally presented and competitively priced service estimates and quotations are essential to increasing service customer retention rates, as well as ensuring that you reach your service proﬁ t targets. But doing that takes more time than most service advisors have – or their time-challenged customers are willing to give. That’s why we created Superservice Menus – a powerful online program that helps your service team generate precise, genuine VIN-speciﬁ c service quotes that include parts, labor, ﬂ uids, shop supplies and pricing – fast. CONFIDENCE, CERTAINTY AND CONTROL Superservice Menus is the premier precision quoting system for OE dealer service and repair operations globally. It presents information in plain, easy-to-understand language that deepens customers’ understanding and gives them a sense of being in control in an otherwise unfamiliar situation. Your estimates can be provided in English, Spanish or French Canadian to suit your customers’ needs. The competitively priced quote is detailed and shows them exactly what they will receive and pay for. Superservice Menus’ intuitive design, its depth of accurate OE speciﬁ c information and its customer sales psychology reinforces customer trust and builds dealership service proﬁ tability, quote after quote. The use of wireless tablet computers adds to the friendliness and convenience of customers’ service experience. Your staff can also use their existing desktop computers to easily enter information directly into the online system. Everything about the suite of Superservice™ solutions, including Menus, provides accuracy you and your customers can count on, consistent process controls that are easy for staff to use, and online operation that makes them fast, hassle-free and aff ordable to operate. PRECISION SERVICE QUOTING INTINTINTINTINTEGREGREGREGREGRATEATEATEATEATEDDDDD INTEGRATED Superservice Menus covers all scheduled service maintenance operations and over 300 popular repair operations for models dating back 10 years. The list of repairs has been carefully researched and prepared. Operation details are presented in an easy-to-view format with ﬂ exibility for dealer editing if required. All aspects of the job are included. The consistent operation codes and descriptions are easy to remember across all models. Its 3-step approach is very easy to use, highly intuitive and can be put to use within minutes of the initial setup. It is accessible online 24/7. There is no special hardware or software to install or maintain in the dealership - it’s ready to use anywhere, anytime - on-site or remotely. Dealers of any size can have it up and running quickly, and at an aff ordable cost. Superservice Menus integrates with leading DMS systems. It also integrates with other Superservice tools including Superservice Triage™ (eMPI) and Superservice Insight™ (eCSI). This allows dealers to create their own unique and powerful service-selling processes – processes that can leverage their local OE service advantage into even greater sales and greater customer satisfaction. AFFORDABLE WINNING ADVANTAGE Dealership Management love Superservice Menus because it boosts employee productivity, provides precision estimates that increase service sales and proﬁ ts, and builds customer satisfaction, loyalty and retention. Service Advisors love it because it increases their billable throughput and enhances their professional esteem in the eyes of their customers. And customers love Superservice Menus because it makes estimates clear and dependable. It helps them see genuine OE service as an investment in their vehicle, not an expense. All told, that is a winning service advantage. If you believe you can increase service customer loyalty by delivering a service experience that starts by providing accuracy, certainty and value; if you believe your service business has greater potential for growth and proﬁ t; and if you are serious about beating customer attrition to the aftermarket, then Superservice Menus is for you! Now launching Superservice Menus for: ACCURATE, DETAILED, PROFESSIONALLY PRESENTED and competitively priced service quotations are essential in increasing service customer retention rates. INFOMEDIA.COM.AU 11. SUPERSERVICE – A STRATEGY FOR FUTURE GROWTH G E N U I N E S E R V I C E A D VA N TA G E HEALTH CHECKS MAXIMIZE CUSTOMER SATISFACTION AND PROFITS EVERY VEHICLE THAT ENTERS YOUR SHOP, FOR ONE REPAIR WILL OFTEN NEED ANOTHER. IF A SERVICE CUSTOMER IS CALLED WITH ADDITIONAL REPAIR RECOMMENDATIONS AFTER THEIR CAR IS ON THE LIFT, they feel vulnerable, get frustrated and mark down their satisfaction even if the service was necessary and carried out well. They can feel they are not in control or are being taken advantage of. YOUR COMPETITIVE EDGE – Superservice Triage™ is an online service selling solution that maximizes upsell service acceptance and increases customer satisfaction. It merges precision OE information, service advisor multi-point inspection, and customer sales psychology to transform the service sales process. It fosters customer involvement, awareness and aaaa sesesesensnsnsnsee e e ofofofof ““““bebebebeinininingggg inininin cccconononontrtrttrolololo oooof f f f ththththe e ee sisisisitutututtuatatattatioioioioion,n,n,n,n,”””” frfrfrfrfromomomomom wwwwwhihihihihichchchchch ttttthhhhh a sense of “being in control of the situation,” from which they can make ininininfofofoformrmrmrmedededed ddddececececisisisisioioioionsnsnsns aaaaboboboboutututut ttttheheheheiriririr vvvvvehehehehehiciciciciclelelelele’s’s’s’ss sssssererererervivivivivicicicicicingngngngng.. informed decisions about their vehicle’s servicing. CUSTOMERS’ INVOLVEMENT AND CUSTOMERS’ INVOLVEMENT CERTAINTY IN THE INSPECT CERTAINTY IN THE INSPECTION PROCESS INSTILLS TRUST and conﬁ dence in their INSTILLS TRUST anananananddddd cococococonﬁnﬁnﬁnﬁnﬁddddd seseseseservrvrvrvrviciciciciceeeee adadadadadvivivivivisososososor.rr.r.r. TTTTThihihihihiss s ss leleleleleadadadadadssss tototototo service advisor. This leads to larger service ororororordededededer rr rr auauauauauthththththorororororizizizizizatatatatatioioioioionsnsnsnsns ooooonnnnn thththththeeeee order authorizations on the spot, and whwhwhwhwhenenenenen ffffololololollololololoweweweweweddddd upupupupup lllllatatatatatererererer... SuSuSuSuSu when followed up later. Superservice TrTrTrTrTriaiaiaiaiagegegegege aaaaaddddddddddrererereessssssssssesesesess ttttthrhrhrhrhreeeeeeeeee eeeeesssss Triage addresses three essential buyer prprprprprererererereqeqeqeqequiuiuiuiuisisisisisitetetetetes:s:s:s:s: IIIIInfnfnfnfnfororororormamamamamatititititiononononon prerequisites: Information, Involvement ananananddddd CoCoCoCoContntntn rorororol.l.ll and Control. Camera functionality allows documentation CamCamCamCameraeraeraera fufufufunctnctnctnctionionionionalialialiality ty ty ty allallallallowsowsowsows dddd of of of of reprepreprepairairairairs ts ts ts to bo bo bo be pe pe pe perferferferformormormormed.ed.ed.ed. of repairs to be performed. PRECISION, PROCESS, AND PARTICIPATION Superservice Triage enables service advisors to identify, record, and track speciﬁ c service lane diagnoses and instantly deliver an easy- to-understand report to the customer. The process begins with the technician conducting an OE and VIN-speciﬁ c multi-point vehicle inspection – a “triage.” Using an easy-to-use tablet computer, the inspection can be performed in minutes. When Triage is integrated with Superservice Menus™, parts, labor, ﬂ uids, shop supplies, and pricing are instantly available. This creates a powerful information selling advantage that maximizes immediate repair order acceptances and authorizations. THE FAST INSPECTION AND REPORTING PROCESS means the service advisor can immediately discuss the identiﬁ ed repairs with their customers. They can discuss the reasoning or consequences of doing the repairs now rather than later. If a customer isn’t able to stay for the inspection, the triage report can be emailed to them. In either case, the service advisor provides customers with an informative, fully detailed, and professionally presented report, which forms the basis of any follow-up discussions. The report can be provided in English, Spanish or French Canadian to suit the customers’ needs. Now launching Superservice Triage for: INFORMATION FOR GREATER PROFITABILITY AND PRODUCTIVITY Superservice Triage provides instantaneous and comprehensive analytics that signiﬁ cantly improve service sales closing. When used as intended, it has a proven track record of increasing revenue, proﬁ tability and customer satisfaction ratings. It makes personnel more productive and service advisors more eff ective. It monitors, tracks and reports on identiﬁ ed work, immediate customer acceptances, and follow-up acceptances. Its easy-to-use performance appraisal reports help service management increase parts and labor sales. Reports are easy to interpret and allow comparison between current performance and previous time periods. They can be based on various sales metrics including: • Number of Inspection Reports Created • Sales and Conversion Rates • Dollars Identiﬁ ed and Sold • Jobs Sold on Follow-Up • Advisor Performance • Technician Performance • Percentages Sold / Declined / Deferred • Averages Sold by Advisor / Tech / Customer • Lost Sales AN’TN’TN’T’T SESESESELLLLLLLL SERSERSERSERVICVICVICVICE TE TE TE THATHATHATHAT ISISISISN’TN’TN’TN T YOU CAN’T SELL SERVICE THAT ISN’T IDENTIFIED OR FOLLOWED-UP Superservice Triage is speciﬁ cally designed for the job of repair identiﬁ cation and sales closure. Customers will often ﬁ nd reasons to defer recommended repairs on the day of service, but with Superservice Triage the revenue opportunity is not lost. Superservice Triage stores and organizes deferred work so customers can be contacted at a future date for follow-up. Service advisors are empowered to make follow-up calls with conﬁ dence, knowing the customer has received a professional inspection report detailing safety and performance related repairs. The courteous and timely contact demonstrates care and concern before potential issues become a safety or more costly ﬁ nancial burden to the customer. The follow-up process helps to build customer-relationships while maximizing revenue opportunities that would otherwise be lost to the competition. IMMEDIATELY GROW PROFITS, PRODUCTIVITY AND SATISFACTION With Superservice Triage, there is no wasted time or lost productivity. It generates a color-coded inspection report that’s clear and easy to understand, and helps engage customers in the service process. It is helpful in identifying additional service requirements, and provides information to help the service advisor show customers why doing service today can save them money and avoid stress later. Superservice Triage provides compelling information that increases the chances of closing service sales, improving customer retention, and increasing ROI. There is no special hardware or software to install or maintain in the dealership – it’s ready to use anywhere, anytime – on-site or remotely. Dealers of any size can have it up and running quickly, at an aff ordable cost. THE SUPERSERVICE TRIAGE ADVANTAGE BEFORE SUPERSERVICE TRIAGE WITH SUPERSERVICE TRIAGE ■ Slow, manual paper or DMS-based inspection checklists (cid:2) Specialized Triage inspection system – professional, fast and easy to use ■ Customer experience and relationship isn’t the focus (cid:2) Engages customer in the inspection process, to create certainty and trust ■ Low value of identiﬁ ed work per inspection (cid:2) Increased parts & labor sales per Triage inspection ■ Low sales conversion rates ■ Manual pricing of parts & labor ■ Low productivity process (cid:2) Better closing techniques – maximize ROI (cid:2) Automatic pricing of identiﬁ ed work – parts, labor, ﬂ uids, supplies and surcharges (cid:2) Improved accountability for advisors and technicians ■ Low completion rate of identiﬁ ed work (cid:2) Frequently high authorization and completion rate of identiﬁ ed work ■ Process doesn’t provide consistent user experience (cid:2) Disciplined and professional approach for every RO ■ No easy way to analyze inspection and sales performance (cid:2) Real-time performance reporting on eff ectiveness of inspections and advisors ■ Diffi cult to manage work not immediately authorized (cid:2) Manages follow-up of deferred work for future sales follow-up 12. INFOMEDIA.COM.AU VEHICLE HEALTH CHECK SUPERSERVICE – A STRATEGY FOR FUTURE GROWTH G E N U I N E S E R V I C E A D VA N TA G E SURVEY SOLUTIONS FOR CUSTOMER FEEDBACK AND IMPROVED RETENTION HEARING CUSTOMER COMPLIMENTS MAKES YOU FEEL GOOD, HEARING THEIR CRITICISMS MAKES YOU MONEY. MOST CUSTOMERS DON’T PROACTIVELY COMPLAIN ABOUT SERVICE EXPERIENCES THAT DON’T MEET THEIR EXPECTATIONS – they just go somewhere else next time. You can no longer rely on a smile or a polite word to mean customers are satisﬁ ed. Without an unbiased and eff ective method to hear the customer’s voice, you are essentially deaf to it. INCREASING CUSTOMER RETENTION Superservice InsightTM is a customer-friendly tablet computer based survey solution that processes customer’s experience feedback as it is given. Instant feedback gives management the opportunity to remedy adverse customer opinion before they leave the dealership, resulting in higher CSI scores. Insight’s unlimited survey capacity allows marketing-oriented departments to gain a range of customer views. In-built CSI analytics gives management better information for business planning and improvement. Documenting customer satisfaction before the transaction is closed out is an act of reaffi rming the value placed on the relationship, and acknowledging the customer’s control in it. Superservice Insight facilitates key relationship building blocks: Listening, Acknowledgement and Appreciation. CUSTOMER SATISFACTION ADVANTAGE Superservice Insight helps engage customers to do what they love to do – give their opinions – and do it in a way that can be tailored to the service operation they just undertook. Friendly and eff ective feedback collection is the ﬁ rst step in monetizing the customer’s voice. Customers want to be heard and know that their remarks – positive or negative – were listened to by someone who cares. When they are critical, they want to know their next experience will improve. With Insight, customers provide answers to the service experience questions you want to track. This generally occurs while the customer is in the dealership to collect the vehicle. Superservice Insight can alert a nominated manager or supervisor of strongly critical feedback as soon as the customer has put it into the tablet. This allows the manager to approach the customer with concern to improve their experience before leaving the dealership. That has the obvious beneﬁ t of showing them that their satisfaction is the priority. It also increases the likelihood that comments entered into a subsequent CSI survey conducted by the OE or into an online forum will be more positive. Now launching Superservice Insight for: REAL-TIME CUSTOMER SATISFACTION SURVEY CUSCUSCUSCUSTOMTOMTOMTOMERERERER VOIVOIVOIVOICECECECE U– U– U USESESESE ITITITIT OROROROR LOSLOSLOSLOSE IE IE IE ITTTT CUSTOMER VOICE – USE IT OR LOSE IT Traditional manual and ad hoc ways of trying to hear the “voice of the customer” through exit surveys tend, by their nature, to be short term, patchy and ineff ective. Rarely is there suffi cient time and resources in the dealership to analyze printed surveys and verbal comments. Without good processing and analysis, the customer “feedback gold” doesn’t get mined. Superservice Insight eliminates all those traditional shortcomings and provides actionable intelligence about your customers’ needs. It has been designed speciﬁ cally for the motor trade. It is ﬂ exible and eff ective in dealers of all sizes, all regions and varying marketing capabilities. Customer surveys can be conducted in English, Spanish, and French Canadian, so that language is not a barrier to hearing the customer’s voice. Superservice Insight is customizable. It can be tailored to the customer, vehicle or the type of service. Its administrative center provides all the tools to: • Create Custom Surveys • Modify Surveys • Manage Survey Inventory • Manage Survey Use • Store and Export Data • Analyze Feedback, and • Print from a Comprehensive Suite of Reports There is no special hardware or software to install or maintain in the dealership – it’s ready to use anywhere, anytime – on-site or remotely. Dealers of any size can have it up and running quickly, and at an aff ordable price. YOU CAN’T FIX A PROBLEM YOU DON’T KNOW ABOUT The modern dealership is a complex business with many people who engage with its customers. Even with the best personnel, it can happen that a customer can have a sub-optimal experience. Superservice Insight’s tablet-based surveys give management immediate intelligence into the customers’ service experience. Their perceptions – whether good or critical – are available and stored as they are given. As those results are analyzed, management will see the dealership through the eyes of their customers. They will learn of staff and processes that are valued by the customer, as well as those that need improvement or change. MEASURING AND MAINTAINING SATISFACTION Dealers love Superservice Insight because it gives them a competitive advantage and an edge. It helps increase customer retention by providing real-time, actionable information that can be used to improve service levels. By supplying speciﬁ c customer information, it can also reveal missed sales and service opportunities. Superservice Insight empowers your staff , improves accountability and control and can dramatically improve dealer and salesperson CSI rating in OE assessments, which can lead to bigger bonuses, rebates, franchise renewal and even better vehicle selection. If you believe there is gold that can be mined from customer feedback; if you believe that dealership staff and processes would beneﬁ t from seeing the business through the eyes of your customers; and if you believe that your customer retention can be longer by demonstrating that you listen, acknowledge and appreciate your customers’ voice, then Superservice Insight is for you! INFOMEDIA.COM.AU 13. DEVELOPMENT AND NETWORK SOLUTIONS “THE ONLINE APPLICATIONS HAVE BEEN DEVELOPED TO PROVIDE THE BEST POSSIBLE USER EXPERIENCE.” INFOMEDIA PRODUCTS HAVE ALWAYS BEEN KNOWN At Infomedia we know that mastering these challenges FOR SPEED, EASE OF USE AND ACCURACY. will allow us to deliver on our core promises of speed, Over the years Infomedia programmers have made many innovations to the products in order to stay true to these core promises. One example of a product optimisation we developed for the DVD world was the technique of storing a part illustration immediately alongside the ease of use and accuracy. Our Superservice products have been developed to provide the best possible user experience. Ergonomic product design and consideration for usability are at the forefront of every development program at Infomedia. data about that part. This development ensured that the We have implemented a number of optimisations which optical DVD reading head would not have to move far to have been designed to improve dealership productivity access both the image and data for any given part. Less and assist with the selling process. These improvements movement resulted in fast loading times. include automating manual processes and reducing the Now with our products in the cloud, our expertise has shifted to support our vision for the Superservice suite, from consistent and intuitive user experiences, to new and innovative ways of providing added value including realtime business analytics. When we went online we wanted to safeguard and deliver on the expectations our customers have of our products. This meant adapting and becoming masters of online application design and delivery. On the surface our online applications deliver the beneﬁ ts our customers have always expected, number of keystrokes or clicks required to complete common operations. We have enhanced processing performance, ensuring that all part and operation searches complete within set benchmarks. The hosting infrastructure has also been upgraded to ensure that we can scale predictably with demand and cope with peak load without any slowdown. Finally, a global team of IT specialists monitors every aspect of the applications in real time to ensure an exceptional experience for all customers. but behind the scenes this has required a dramatic The end result is a suite of online products tuned to meet technology overhaul. the needs of dealerships worldwide. The online world presents a new set of challenges for any developer of productivity software. Customers expect fast and immediate access to online data 24 hours a day, but not all Internet infrastructure is designed with this ideal in mind. In principle the openness of the internet allows Nicolas Fogg anyone anywhere to serve content to a global audience. Director of Global I.T. & Development In practice, ensuring a very high level of performance and reliability requires a signiﬁ cant technical capability. 14. INFOMEDIA.COM.AU CUSTOMER PERSPECTIVE “I would say Superservice Triage is a proﬁ t generator.” HEXAGON BMW INCREASES SALES BY 12% THANKS TO SUPERSERVICE TRIAGE “I’ve always found the product good – that’s pretty much guaranteed.” “I think it’s (Superservice Triage) fundamental to our everyday use.” THE COMPANY: Hexagon BMW THE SERVICE MANAGER: David Sheldrake Aftersales Director • In the industry for 32 years • 24 years in service management Installing Superservice Triage in the dealership four years ago has made a signiﬁ cant diff erence to Hexagon BMW. In the ﬁ rst year of implementation, their overall bottom line and proﬁ ts grew, and the dealership experienced growth of at least 10% – 12% in sales. “I would say Superservice Triage is a proﬁ t generator. You sell more. It’s not just labour sales, it’s also parts and tyres, and it helps us sell across a number of departments,” says David Sheldrake, Aftersales Director at Hexagon BMW. Before Superservice Triage, the dealership did not have a formal process of identifying sales opportunities. Now, they are able to identify sales opportunities for every vehicle that comes into the business. “The system allows us to look at what we are able to sell from that opportunity, obviously for the day itself, but also for the customers’ subsequent visits.” He adds that customers have reacted very positively towards Superservice Triage because it is so easy to understand, interactive, and provides pricing estimates up front. “The concept of red, amber and THE CHALLENGES: green makes it easy to understand which work needs to be done now, • Identifying sales opportunities for and which work needs to be done in the near future.” every vehicle that comes into the dealership. Thanks to Superservice Triage, the dealership and the staff are now much more organised. “It has really brought a whole process into our • Identifying future sales dealership that we didn’t have. Before, it was very much hit and miss,” opportunities for the customers’ Sheldrake explains. Now, the system only has to be ﬁ lled out once for subsequent visits. THE SOLUTION: Superservice Triage THE RESULTS: • Labour sales grew at least 10%-12% • The dealership now has a proper selling process, making it more effi cient, productive and professional. notiﬁ cations to be automatically sent to the right people in the right departments, resulting in increased effi ciency and professionalism within the dealership. Sheldrake also reports an increase in staff productivity since the introduction of Triage. The reporting feature allows Sheldrake to keep track of the progress of his technicians and service advisors. From a sales point of view, he can view what, and how much, a service advisor sells. For technicians, he is able to determine the progress of each technician, and uses the reports to improve technician performance through reviews and appraisals. Sheldrake is not only a huge fan of the product, he also loves the customer service and support provided by Infomedia. “I’ve always found the product good - that’s pretty much guaranteed. But one of the fundamental things is the ﬂ exibility and ability to evolve the product around individual business needs. Things develop and things evolve, it’s great that we can be associated with a company that understands this, and is prepared to build products around our needs.” “I’ve recommended this system to a number of colleagues within the BMW network, and they’ve subsequently taken the system on. I think it’s fundamental to our everyday use.” INFOMEDIA.COM.AU 15. CUSTOMER PERSPECTIVE THIS HOLDEN SERVICE MANAGER COULDN’T LIVE WITHOUT SUPERSERVICE MENUS “I would describe Superservice Menus as ‘easy to use’.” Ian Williams, the Service Manager of Canobolas Holden had only been working at his current dealership for three days when he rang up Infomedia representative, Alan Hilder, to request installation of Superservice Menus. Williams is a huge supporter of the product. He’s run Superservice Menus in most of the dealerships he’s worked in. “I started using the product in 2002 – so for about 10 or 11 years now, and I’ve installed it in ﬁ ve diff erent dealerships. The fact is, I just wouldn’t work without it.” “Superservice Menus is very important to the dealership. I think it is a must for every business for accurate quoting.” THE COMPANY: Canobolas Holden, NSW The accuracy of Superservice Menus is one of the reasons he loves the product. “At this stage, I’ve never really seen another good system. I’ve THE SERVICE MANAGER: Ian Williams found that in every dealership that I’ve worked in, their quoting was very • In the industry for 30 years inaccurate. Some of them were guessing, some of them were going off the DMS system, and they could be between $10 and $100 off per • Service manager for 24 years quote, which soon adds up.” “I ﬁ nd that Superservice Menus is always correct and spot on. My favourite thing about Superservice Menus is being able to use the VIN and rego numbers, and always having the right data come up.” “It makes things very easy. It certainly saves us a lot of time because there’s no bobbling around books for prices or trying to look up codes in the system,” says Williams. Apart from accuracy, Williams explains that he would pick Superservice Menus over other products because it is so user friendly. “In just three words, I would describe Superservice Menus as ‘easy to use’. You don’t really need any training. I could teach someone how to use it in about two minutes – it’s that simple.” After training his staff on how to use Superservice Menus, Williams can see how much the technicians enjoy using it. “Once it’s in a dealership, they don’t want to take it back out. They refuse!” “Superservice Menus is very important to the dealership. I think it is a must for every business for accurate quoting. If they haven’t got a system for quoting, then they really need it.” “I’ve had a good run, and I wouldn’t hesitate to recommend Superservice Menus to anyone. It’s easy, it’s practical, you can run it on any system, and I’m very happy with it,” says Williams. THE CHALLENGES: • Dealership was using a DMS system that was hard to use, had wrong data, and produced inaccurate quotes. • Technicians were guessing prices and/or using a manual system that was ineffi cient and cumbersome. THE SOLUTION: Superservice Menus THE RESULTS: • The dealership now has an accurate and consistent quoting system. • The quoting process is quick, effi cient and improves staff productivity. 16. INFOMEDIA.COM.AU DIRECTORS invest are managed eff ectively and Henderson headed up the company’s honestly. Corporate governance Asia Paciﬁ c Parts and Service provides the framework for ethical operation which covered Ford’s parts leadership, sustainable business and service activities in 12 countries strategies and reliable ﬁ nancial including Japan, South Africa, China, statements. It is about assessing and India and Australia. Mr Henderson also mitigating risks such that performance serves as the chairman of Infomedia’s is optimised. It is not a tick the box Audit & Risk Committee. Mr Henderson was elected to the Board in November 2011. approach but rather must strike the right balance between vigilance and cost effi ciency. Simply put, good corporate governance equals good business.” Ms Hernon has been a Director since 2000 and was last re-elected to the Board in 2011. Her strengths are in the areas of publishing, marketing and technology. RICHARD GRAHAM Executive Chairman “Corporate governance is a solemn trusteeship held on behalf of each and every stakeholder of the Company. It’s about ﬁ duciary trust and it’s about subject matter competence. It’s about the Now, and it’s about the Future. It’s GEOFFREY HENDERSON about Balance, and it’s about Edgy. Non-Executive Director Shareholders aren’t looking for seat- Mr Henderson is a qualiﬁ ed accountant and has had an extensive career spanning positions in Australia, New Zealand, Europe and North America. He worked in a number of ﬁ nancial positions for Olympic Tyres in Melbourne for eight years and then for the Ford Motor Company for 30 warmers or box tickers. They want real people like themselves looking after their interest as they would do themselves. They want Directors who know the diff erence between governance and management; because only by knowing the diff erence can they get the best from each.” years. During his time with Ford, Mr Mr Graham has been a Director Henderson worked not only in the since 1988 and was last re-elected Finance Division but also held senior to the Board in October 2008. His positions in the Supply and Parts strengths are in the areas of business MYER HERSZBERG Non-Executive Director “The role of corporate governance is to protect all shareholders equally, regardless of the size of their shareholding. As directors, we have a responsibility to act on behalf of, and try to create wealth for, all our shareholders. At Infomedia we are fortunate to have a long-standing team who have delivered consistent returns whilst continually seeking out new products and ideas to grow the business. This team has all the shareholders’ interests at heart and, I would suggest, has the balance right.” Mr Herszberg has been a Director since 1992 and was last re-elected to the Board in 2010. His strengths are in the areas of business development, electronics and real-estate. FRANCES HERNON Non-Executive Director “Shareholders are entitled to expect and Service Divisions. Immediately development, technology, innovation that the companies in which they prior to his retirement from Ford, Mr and organisation. INFOMEDIA.COM.AU 17. DIRECTORS’ REPORT Interests in the shares and options of the Company and related bodies corporate As at the date of this report, the interests of the Directors in the shares and options of the Company were: Wiser Equity Pty Limited Yarragene Pty Limited Yarragene Pty Ltd atf Yenzick Trust Rentamobile Pty Ltd Wiser Centre Pty Limited Richard Graham Frances Hernon Geoff rey Henderson Infomedia Ltd Ordinary Shares fully paid 101,464,342 23,421,589 10 15,000 1,000,000 926,559 5,000 0 Options over Ordinary Shares - - - - - - - - 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 and Rentamobile Pty Ltd. 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 231 (2011: 212) full time employees as at 30 June 2012. DIVIDENDS Final dividends recommended: On ordinary shares – ﬁ nal – fully franked 1.37 4,155 Cents $’000 Dividends paid in the year: On ordinary shares – 2012 interim – fully franked 1.03 3,124 Final for the 2011 year: On ordinary shares – as recommended in the 2011 report, fully franked 1.2 3,639 NET TANGIBLE ASSETS PER SECURITY The Company’s net tangible assets per security are as follows: · Net tangible assets per share at 30 June 2012 · Net tangible assets per share at 30 June 2011 Cents 0.7 2.2 18. INFOMEDIA.COM.AU REVIEW AND RESULTS OF OPERATIONS The following table presents sales revenue and proﬁ t after tax. There were no non-recurring signiﬁ cant items during the 2012 or 2011 ﬁ nancial years: DIRECTORS’ REPORT Sales revenue Foreign exchange movement on hedges closed out during the period Proﬁ t after tax CONSOLIDATED 2012 $’000 45,677 2,620 48,297 8,461 2011 $’000 44,093 4,821 48,914 10,039 The Company reports net proﬁ t after tax (NPAT) of $8,461,000 which is at the upper end of the previously advised guidance. Sales revenue was $45.7m against $44.1m for the previous ﬁ nancial year. The increase was driven by growth of all product lines including $1.2m of sales obtained through the acquisition of Diff erent Aspect Software Ltd earlier in the year. In constant currency terms, sales revenue rose by $3.5m and operating costs increased $2.0m. The impact of foreign currency translations was signiﬁ cant and net proﬁ t was reduced by $1.6m. All products lines saw constant currency sales growth during the 2012 ﬁ nancial year with revenue from Superservice being the major contributor, increasing by $2.7m. Cash ﬂ ows from operations reduced from $11.3m (in the previous corresponding period) to $9.7m primarily due to currency impacts. The Company is pleased to announce a fully franked ﬁ nal dividend payment of 1.37 cents. This, together with the fully franked interim dividend of 1.03 cents, results in a fully franked dividend of 2.4 cents for the full year. The record date to determine entitlements to the dividend distribution is 5 September 2012 and the date on which the dividend is payable is 19 September 2012. With regards to FY 2013, the Company advises that it expects both constant currency and actual sales revenue growth. Accordingly, the Company provides guidance that it anticipates its 2013 ﬁ nancial year sales revenue to be between $47m and $50m. However, increased amortisation of approximately $2m due to the continued release of its next generation products coupled with the relative strength of the Australian dollar, results in forecasted net proﬁ t after tax of between $8m and $9m. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS There has been no signiﬁ cant change in the state of aff airs of the Company since the last Directors’ Report. SIGNIFICANT EVENTS AFTER THE BALANCE DATE There has been no matter or circumstance that has arisen since the end of the ﬁ nancial year that has signiﬁ cantly aff ected the operations of the Company, the results of those operations, or the state of aff airs 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™ 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 5,470,000 unissued ordinary shares under options. Refer to Note 19 of 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. INFOMEDIA.COM.AU 19. DIRECTORS’ REPORT 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. Details of Key Management Personnel (i) Directors Richard Graham Executive Chairman Frances Hernon Non-executive Director Myer Herszberg Non-executive Director Geoff rey Henderson Non-executive Director* (ii) Executives Karen Blunden Director of Global Business Development and Sales Nick Georges Company Secretary and Legal Counsel Andrew Pattinson Director of Global Solution and Systems Jonathan Pollard Chief Financial Offi cer Michael Roach Director of Global Operations and General Manager Asia Paciﬁ c *Appointed 25 August 2011 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 formally fell within the former Remuneration & Nomination Committee of the Board of Directors is responsible for recommending to the Board the Company’s remuneration and compensation policy arrangements for all Key Management Personnel. Ms. Hernon, together with the non-executive members of the Board assess the appropriateness of the nature and amount of these emoluments on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder beneﬁ t from the retention of a high quality board and executive team. Compensation Structure In accordance with best practice corporate governance recommendations, the structure of non-executive Director and senior executive compensation is separate and distinct. Non-executive Director Compensation 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. 20. INFOMEDIA.COM.AU DIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED) – AUDITED Structure The Constitution and the ASX Listing Rules specify that the aggregate compensation of non-executive Directors shall be determined from time to time by a general meeting. An amount not exceeding the amount determined is then available between the Directors as appropriate (for the year ending 30 June 2012 non-executive Directors’ compensation totalled $301,560 (2011: $270,529). The latest determination was at the Annual General Meeting held on 30 October 2002 when shareholders approved a maximum aggregate compensation of $450,000 per year. The Board has historically considered the advice from external consultants as well as the fees paid to non-executive Directors of comparable companies when undertaking a review process. Senior Executive and Executive Director Compensation Objective The Company aims to reward executives with a level and mix of compensation commensurate with their position and responsibilities within the Company and so as to: • reward executives for Company and individual performance against targets set by reference to appropriate benchmarks; • align the interests of executives with those of shareholders; • link reward with the strategic goals and performance of the Company; and • ensure total compensation is competitive by market standards. Structure In determining the level and make-up of executive compensation, the Remuneration Committee engages an external consultant from time to time to provide independent advice in the form of a written report detailing market levels of compensation for comparable executive roles. Compensation consists of the following key elements: • Fixed Compensation; • Variable Compensation - Short Term Incentive (‘STI’); and • 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. 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 is competitive in the market. Fixed compensation is reviewed periodically by the CEO or Executive Chairman 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 or Executive Chairman. As noted above, 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. INFOMEDIA.COM.AU 21. DIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED) - AUDITED 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 & 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. As such 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. 22. INFOMEDIA.COM.AU DIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED) - AUDITED Key Management Personnel and the ﬁ ve highest remunerated speciﬁ ed executives for the year ended 30 June 2012 and 30 June 2011. Short-Term Post- Employment Share Based Payments Long Service leave Termination payments Total Percentage Performance Related Percentage Attributable to Options 2012 Financial Year: Salary & Fees Bonus Non Monetary Beneﬁ ts Superannuation Options $ $ $ $ $ $ $ $ % % Directors: Richard Graham 115,000 Myer Herszberg 56,300 Frances Hernon 56,250 Geoff Henderson^ 49,111 Executives: - - - - - - - - 10,350 5,067 5,062 4,420 - - - - Karen Blunden 208,155 47,121 707 - 8,871 - - - - - Nick Georges 202,000 32,595 Andrew Pattinson 285,769 46,261 Jonathan Pollard 228,462 37,182 Michael Roach 204,795 33,169 - - - - 18,808 6,983 3,367 25,719 20,562 18,519 7,473 7,394 7,409 4,867 2,730 3,533 1,405,842 196,328 707 108,507 38,130 14,497 2011 Financial Year: Directors: Richard Graham 115,000 Myer Herszberg Frances Hernon Gary Martin** 56,300 56,250 50,000 Andrew Moff at*** 20,553 Executives: - - - - - - - - - - Karen Blunden**** 128,956 24,653 718 Nick Georges 190,000 33,250 Andrew Pattinson 280,000 39,200 Jonathan Pollard 208,889 36,000 Michael Roach 200,000 28,000 - - - - 10,350 5,067 5,062 4,500 1,947 - 17,126 25,200 18,800 18,000 1,305,947 161,103 718 106,052 15,206 **Resigned 31 August 2010 ***Resigned 05 November 2010 ****Appointed 21 November 2010 ^Appointed 25August 2011 4,230 833 101,538 - - - - - - - 5,175 1,056 1,589 1,644 1,512 - - 3,167 4,667 2,100 3,333 14,100 101,538 1,704,665 - - - - - - - - - - - - - - - - - - - 125,350 61,367 61,312 53,531 264,854 263,753 370,089 296,330 267,425 1,764,011 125,350 61,367 61,312 161,102 22,500 159,501 244,599 350,656 267,433 250,845 - - - - 18% 12% 12% 13% 12% - - - - - 15% 14% 11% 13% 11% - - - - 3% 3% 2% 2% 3% - - - - - 3% 0% 0% 1% 1% The amounts above are based on individual contracts with each person. The proportion of remuneration that is based on performance is dependent on their individual achievement of KPI’s. INFOMEDIA.COM.AU 23. DIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED) - AUDITED 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 Nick Georges 15 January 2012 Jonathan Pollard 15 January 2012 Michael Roach 15 January 2012 Andrew Pattinson 15 January 2012 Karen Blunden 21 November 2010 Duration Notice Period - Company Notice Period - Executive 3 years 3 years 3 years 3 years 3 years 3 months 3 months 3 months 3 months 3 months 3 months 3 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. Shares issued on exercise of compensation options (Consolidated) No options were exercised during the year. Compensation options: Granted during the year 30 June 2012 Executives Options Issued No. Grant date Terms and Conditions for each Grant Fair value per option at grant date ($) Exercise price per option ($) Andrew Pattinson Nick Georges Michael Roach Jonathan Pollard Total 450,000 450,000 450,000 450,000 1,800,000 15/01/2012 15/01/2012 15/01/2012 15/01/2012 0.050 0.050 0.050 0.050 0.19 0.19 0.19 0.19 Expiry date 14/03/2015 14/03/2015 14/03/2015 14/03/2015 Compensation options: Vested during the year 30 June 2012 Executives Options Issued No. Andrew Pattinson 450,000 Nick Georges Michael Roach Karen Blunden 450,000 450,000 250,000 Jonathan Pollard 450,000 Total 2,050,000 Terms and Conditions for each Grant Vested Grant date 15/01/2012 15/01/2012 15/01/2012 21/11/2010 15/01/2012 Fair value per option at grant date ($) Exercise price per option ($) 0.050 0.050 0.050 0.058 0.050 0.19 0.19 0.19 0.245 0.19 Expiry date No. % 14/03/2015 14/03/2015 14/03/2015 - - - 0.0% 0.0% 0.0% 20/12/2013 83,333 33.0% 14/03/2015 - 83,333 0.0% 4.1% 24. INFOMEDIA.COM.AU DIRECTORS’ REPORT REMUNERATION REPORT (CONTINUED) – AUDITED Compensation options: Granted during the year 30 June 2011 Executives Options Issued No. Grant date Terms and Conditions for each Grant Fair value per option at grant date ($) Exercise price per option ($) Expiry date Karen Blunden 250,000 21/11/2010 0.058 0.245 20/12/2013 Compensation options: Vested during the year 30 June 2011 Executives Options Issued No. Grant date Fair value per option at grant date ($) Exercise price per option ($) Expiry date No. % Terms and Conditions for each Grant Vested Jonathan Pollard 250,000 01/10/2008 Michael Roach 250,000 01/01/2009 Andrew Pattinson 250,000 01/02/2009 Karen Blunden 250,000 21/11/2010 Total 1,000,000 0.061 0.032 0.031 0.058 0.37 0.29 0.29 31/10/2011 166,667 66.6% 05/01/2012 166,667 66.6% 05/02/2012 166,667 66.6% 0.245 20/12/2013 - 0.0% 500,001 50.0% Additional information Executive rewards are linked to the creation of shareholder value by providing incentives that positively impact the earnings of the company. The earnings of the consolidated entity for the ﬁ ve years to 30 June 2012 are summarised below: 2008 $’000 2009 $’000 2010 $’000 2011 $’000 2012 $’000 EBITDA EBIT 20,004 15,857 18,175 18,788 16,019 12,415 14,430 13,172 Proﬁ t after income tax 13,066 10,536 11,336 10,039 17,653 11,087 8,461 The factors that are considered to aff ect total shareholders return (‘TSR’) are summarised below: 2008 2009 2010 2011 2012 $’000 $’000 $’000 $’000 $’000 Dividends per share (cents) Share price at ﬁ nancial year end (cents) 3.2 37.0 2.8 30.0 2.4 28.0 2.4 22.0 2.4 20.0 This concludes the remuneration report, which has been audited. INFOMEDIA.COM.AU 25. DIRECTORS’ REPORT DIRECTORS’ MEETINGS The number of meetings of Directors (including meetings of committees of Directors) held during the year and the numbers of meetings attended by each Director were as follows: Committee Meetings Directors’ Meetings Audit, Risk & Governance Number of meetings held: Number of meetings attended: Richard Graham Myer Herszberg Frances Hernon Geoff rey Henderson* 9 9 8 8 7 4 - 2 4 3 *Appointed 25/08/2011 ROUNDING The amounts contained in this report and in the ﬁ nancial report have been rounded to the nearest $1,000 (where rounding is applicable) under the option available to the Company under ASIC Class Order 98/0100. The Company is an entity to which the Class Order applies. NON-AUDIT SERVICES Details of the amounts paid or payable to the auditor for non-audit services provided during the ﬁ nancial year by the auditor are outlined in note 22 to the ﬁ nancial statements. The directors are satisﬁ ed that the provision of non-audit services during the ﬁ nancial year, by the auditor (or by another person or ﬁ rm on the auditor’s behalf), is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The directors are of the opinion that the services as disclosed in note 42 to the ﬁ nancial statements do not compromise the external auditor’s independence for the following reasons: all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor, and none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the company, acting as advocate for the company or jointly sharing economic risks and rewards. AUDITOR INDEPENDENCE The Directors received an auditor’s independence declaration from the auditor of the Company (refer page 27). Signed in accordance with a resolution of the Directors. Richard David Graham Chairman Sydney, 23 August 2012 26. INFOMEDIA.COM.AU Tel: 61 2 9251 4100 Fax: 61 2 9240 9821 www.bdo.com.au Level 10, 1 Margaret St Sydney NSW 2000 Australia DECLARATION OF INDEPENDENCE BY GRANT SAXON TO THE DIRECTORS OF INFOMEDIA LIMITED As lead auditor of Infomedia Limited for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been no contraventions of: • • the auditor independence requirements of the Corporations Act 2001 in relation to the audit; or any applicable code of professional conduct in relation to the audit. This declaration is in respect Infomedia Limited and the entities it controlled during the year. Grant Saxon Partner BDO East Coast Partnership Sydney 23 August 2012 BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania. 14 STATEMENT OF COMPREHENSIVE INCOME YEAR ENDED 30 June 2012 Notes CONSOLIDATED 2012 $’000 45,677 2,620 48,297 3(i) (19,278) 3(ii) 3(iii) 3(iv) 29,019 151 (10,674) (6,567) (50) (1,197) 6,396 (5,890) 11,188 4 (2,727) 8,461 (192) (978) (1,170) 7,291 2.79 2.79 2.40 2011 $’000 44,093 4,821 48,914 (19,769) 29,145 184 (8,944) (5,616) - (1,246) 5,245 (5,412) 13,356 (3,317) 10,039 141 (656) (515) 9,524 3.31 3.31 2.40 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 Capitalisation of Research & Development costs Other expenses Proﬁ t before income tax Income tax expense Proﬁ t after income tax Other comprehensive income Foreign currency translation diff erences for foreign operations Eff ective cashﬂ ow hedges movement recognised in equity Other comprehensive 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) 5 5 6 28. INFOMEDIA.COM.AU STATEMENT OF FINANCIAL POSITION AT 30 June 2012 Notes CONSOLIDATED CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Prepayments Derivatives TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment 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 17(b) 7 8 26 9 10 12 13 14 15 4 16 16 2012 $’000 6,646 4,033 7 1,015 693 12,394 1,389 34,106 35,495 47,889 2,901 1,812 835 564 6,112 425 5,107 5,532 11,644 2011 $’000 8,820 4,044 48 2,517 2,091 17,520 1,408 28,875 30,283 47,803 2,667 1,770 1,525 356 6,318 395 5,425 5,820 12,138 36,245 35,665 10,798 337 25,110 36,245 10,798 2,661 22,206 35,665 INFOMEDIA.COM.AU 29. STATEMENT OF CASH FLOWS YEAR ENDED 30 June 2012 Notes CONSOLIDATED CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers and employees Interest received Interest paid Income tax paid NET CASH FLOWS FROM OPERATING ACTIVITIES 17 (a) CASH FLOWS FROM INVESTING ACTIVITIES Acquisition of property, plant and equipment Payment for purchase of business, net of cash acquired NET CASH FLOWS USED IN INVESTING ACTIVITIES CASH FLOWS FROM FINANCING ACTIVITIES Share buy back payment Dividends paid on ordinary shares Proceeds of borrowings Repayment of borrowings NET CASH FLOWS USED IN FINANCING ACTIVITIES NET INCREASE/(DECREASE) IN CASH HELD Add opening cash brought forward 16 6 CLOSING CASH CARRIED FORWARD 17 (b) 2012 $’000 48,250 (35,464) 151 (50) (3,148) 9,739 (534) (4,616) (5,150) - (6,763) 3,748 (3,748) (6,763) (2,174) 8,820 6,646 2011 $’000 49,459 (36,171) 184 - (2,152) 11,320 (674) - (674) (333) (7,282) - - (7,615) 3,031 5,789 8,820 30. INFOMEDIA.COM.AU STATEMENT OF CHANGES IN EQUITY YEAR ENDED 30 June 2012 CONSOLIDATED Contributed equity Retained earnings Employee equity beneﬁ ts reserve Cashﬂ ow hedge reserve At 1 July 2011 Proﬁ t for the year Other comprehensive income Total comprehensive income for the year Transfer Share based payments Equity dividends At 30 June 2012 $’000 $’000 10,798 22,206 $’000 1,210 - - - - - - 8,461 - 8,461 1,206 - (6,763) 10,798 25,110 - - - (1,206) 52 - 56 Foreign currency translation reserve Total $’000 $’000 (12) - (192) (192) - - - 35,665 8,461 (1,170) 7,291 - 52 (6,763) $’000 1,463 - (978) (978) - - - 485 (204) 36,245 YEAR ENDED 30 June 2011 CONSOLIDATED Contributed equity Retained earnings Employee equity beneﬁ ts reserve Cashﬂ ow hedge reserve Foreign currency translation reserve Total $’000 $’000 $’000 $’000 $’000 $’000 At 1 July 2010 Proﬁ t for the year Other comprehensive income Total comprehensive income for the year Share based payments Share buy back Equity dividends At 30 June 2011 11,131 - - - - (333) 19,449 10,039 - 10,039 - - - (7,282) 1,195 - - - 15 - - 2,119 - (656) (656) - - - (153) - 141 141 - - - 33,741 10,039 (515) 9,524 15 (333) (7,282) 10,798 22,206 1,210 1,463 (12) 35,665 INFOMEDIA.COM.AU 31. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 1. CORPORATE INFORMATION The ﬁ nancial report of Infomedia Ltd for the year ended 30 June 2012 was authorised for issue in accordance with a resolution of the Directors on 23 August 2012. Infomedia Ltd is a company limited by shares incorporated and domiciled in Australia whose shares are publicly traded on the Australian stock exchange (ASX:IFM). 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 and Interpretations as appropriate for proﬁ t oriented entities. The ﬁ nancial report has also been prepared on an historical cost basis, except for derivative ﬁ nancial instruments that 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. New/revised standards and interpretations applicable for the year commencing 1 July 2012 have been reviewed and it has been determined that those new/revised standards and interpretations do not have a material eff ect on the measurement and recording of items in the balance sheet and statement of comprehensive income. Certain Australian Accounting Standards and interpretations have recently been issued or amended but are not yet eff ective 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 the parent company, using consistent accounting policies. Adjustments are made to bring into line any dissimilar accounting policies that may exist. All intercompany balances and transactions, including unrealised proﬁ ts arising from intra-group transactions, have been eliminated in full. Unrealised losses are eliminated unless costs cannot be recovered. Subsidiaries are consolidated from the date on which control is transferred to the Company and cease to be consolidated from the date on which control is transferred out of the Company. Where there is loss of control of a subsidiary, the consolidated ﬁ nancial statements include the results for the part of the reporting period during which Infomedia Ltd has control. (d) Signiﬁ cant accounting 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 11. • 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 & Development Development costs are only capitalised by the Group when it is assessed that the technical feasibility of completing the intangible asset is valid so that the asset will be available for use or sale. Refer to note 2(k) for further discussion. 32. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (e) Foreign currency translation 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 diff erences in the consolidated ﬁ nancial report are taken to the income statement. Translation of ﬁ nancial reports of overseas operations Both the functional and presentation currency of Infomedia Ltd is Australian dollars (A$). Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction. The functional currency of the overseas subsidiaries is as follows: IFM Europe Ltd IFM Germany GmbH Euros Euros IFM North America Inc United States Dollars (USD) Diff erent Aspect Software Ltd Great British Pounds (GBP) 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 diff erences arising on the retranslation are taken directly to a separate component of equity. (f) Cash and cash equivalents Cash on hand and in banks and short-term deposits are stated at nominal values. For the purposes of the Statement of Cash Flows, cash includes cash on hand and in banks, and money market investments readily convertible to cash within three months, net of outstanding bank overdrafts. (g) Trade and other receivables Trade receivables, which generally have 30-60 day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that the Company will not be able to collect the debts. Bad debts are written off when identiﬁ ed. (h) Investments and other ﬁ nancial assets Financial assets in the scope of 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 eff ective 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. (i) Inventories Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for as follows: • Raw materials – purchase cost on a ﬁ rst-in-ﬁ rst-out basis INFOMEDIA.COM.AU 33. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) ( j) Goodwill Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business combination over the Company’s interest in the net fair value of the acquiree’s identiﬁ able assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Company’s cash-generating units, or groups of cash generating units, that are expected to beneﬁ t from the synergies of the combination, irrespective of whether other assets or liabilities of the Company are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated: • 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 8 Operating Segments. Impairment is determined by assessing the recoverable amount of the cash-generating unit (group of cash-generating units), to which the goodwill relates. When the recoverable amount of the cash-generating unit (group of cash-generating units) is less than the carrying amount, an impairment loss is recognised. When goodwill forms part of a cash-generating unit (group of cash-generating units) and an operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this manner is measured based on the relative values of the operation disposed of and the portion of the cash generating unit retained. Impairment losses recognised for goodwill are not subsequently reversed. (k) Intangible assets Intangible assets acquired separately or in a business combination are initially measured at cost. The cost of an intangible asset acquired in a business combination is its fair value as at the date of acquisition. Following initial recognition, intangible assets 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 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 diff erence 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 is reviewed at least at each ﬁ nancial year-end. Changes in the expected useful life or the expected pattern of consumption of future economic beneﬁ ts embodied in the asset are accounted for by changing the amortisation period or method, as appropriate, which is a change in accounting estimate. The amortisation expense on intangible assets with ﬁ nite lives is recognised in proﬁ t or loss in the expense category consistent with the function of the intangible asset. Intangible assets with indeﬁ nite useful lives are tested for impairment annually either individually or at the cash-generating unit level. Such intangibles are not amortised. The useful life of an intangible asset with an indeﬁ nite life is reviewed 34. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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. (l) Impairment of assets The Company assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Company makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inﬂ ows that are largely independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash- generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash ﬂ ows are discounted to their present value using a pre-tax discount rate that reﬂ ects current market assessments of the time value of money and the risks speciﬁ c to the asset. Impairment losses relating to continuing operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is treated as a revaluation decrease). An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed (with the exception of goodwill) only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in proﬁ t or loss unless the asset is carried at revalued amount, in which case the reversal is treated as a revaluation increase. After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. (m) Property, plant and equipment Property, plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses. 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: 2012 2011 Leasehold improvements: 5 to 20 years 5 to 20 years Other plant and equipment: 3 to 15 years 3 to 15 years The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each 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 diff erence between the net disposal proceeds and the carrying amount of the asset) is included in proﬁ t or loss in the year the asset is derecognised. (n) Leases Operating lease payments are recognised as an expense in the income statement on a straight-line basis over the lease term. Lease incentives are recognised in the income statement as an integral part of the total lease expense. (o) Trade and other payables Trade payables and other payables are carried at amortised costs and represent liabilities for goods and services provided to the Company prior to the end of the 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. INFOMEDIA.COM.AU 35. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) (p) Provisions Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outﬂ ow of resources embodying economic beneﬁ ts will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where discounting is used, the increase in the provision due to the passage of time is recognised as a borrowing cost. (q) Deferred revenue Certain contracts allow annual subscriptions to be invoiced in advance. The components of revenue relating to the subscription period beyond balance date are recorded as a liability. (r) Contributed equity Ordinary shares are 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. (s) 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. (t) Cost of sales Cost of sales includes the direct cost of raw materials, direct salary and wages, and agency costs associated with the manufacture and distribution of the product. (u) 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 are calculated by reference to current forward exchange rates for contacts 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 highly probable forecast transaction. Infomedia Limited currently has cash ﬂ ow hedges attributable to highly probable future foreign currency sales. Cash ﬂ ow hedges Cash ﬂ ow hedges are hedges of the Group’s exposure to variability in cash ﬂ ows that is attributable to a particular risk associated with anticipated future sales that could aff ect proﬁ t or loss. The eff ective portion of the gain or loss on the hedging instrument is recognised directly in equity, while the ineff ective 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 Group tests each of the designated cash ﬂ ow hedges for eff ectiveness on a monthly basis both retrospectively and prospectively using the “matched terms” principle. At each balance date, hedge eff ectiveness 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 eff ective. Where there has been a change to these terms, eff ectiveness is measured using the hypothetical derivative method. 36. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 Group hedges foreign exchange exposure on intra-group sales as this exposure aff ects consolidated proﬁ t when the sale is made to the external customer. (v) Income tax Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date. Deferred income tax is provided on all temporary diff erences 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 diff erences 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, aff ects neither the accounting proﬁ t nor taxable proﬁ t or loss; or • when the taxable temporary diff erence is associated with investments in subsidiaries, associates or interests in joint ventures, and the timing of the reversal of the temporary diff erence can be controlled and it is probable that the temporary diff erence will not reverse in the foreseeable future. Deferred income tax assets are recognised for all deductible temporary diff erences, 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 diff erences and the carry-forward of unused tax credits and unused tax losses can be utilised, except: • when the deferred income tax asset relating to the deductible temporary diff erence 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, aff ects neither the accounting proﬁ t nor taxable proﬁ t or loss; or • when the deductible temporary diff erence 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 diff erence will reverse in the foreseeable future and taxable proﬁ t will be available against which the temporary diff erence 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 off set 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 Interpretation 1052 – Tax Consolidation Accounting. The group uses a group allocation method for this purpose where the allocated current tax payable, deferred tax assets and other tax credits for each member of the tax consolidated group is determined as if the company is a stand-alone taxpayer but 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 groups future tax proﬁ ts. (w) Other taxes Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (“GST”) except: • when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and • receivables and payables, which are stated with the amount of GST included. INFOMEDIA.COM.AU 37. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 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 Flow 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 are classiﬁ ed as operating cash ﬂ ows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. (x) Employee leave beneﬁ ts (i) Wages, salaries and annual leave Liabilities for wages and salaries, including non-monetary beneﬁ ts, and annual leave expected to be settled within 12 months of the reporting date are recognised in other payables and current provisions respectively in respect of employees’ services up to the reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or payable. (ii) Long service leave The liability for long service leave is recognised in the provision for employee beneﬁ ts and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. 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 cashﬂ 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. (y) Share-based payment transactions The Company provides beneﬁ ts to employees in the form of share-based payment transactions, whereby employees render services in exchange for shares or options over shares (‘equity-settled transactions’). There are currently two plans in place to provide these beneﬁ ts: (i) the Employee Share Plan (ESP), and (ii) the Employee Option Plan (EOP). The cost of these equity-settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by an external valuer using a binomial model. In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Infomedia Ltd (‘market conditions’). 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 eff ect of these conditions is included in the determination of fair value at grant date. Where the terms of an equity-settled option are modiﬁ ed, as a minimum an expense is recognised as if the terms had not been modiﬁ ed. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modiﬁ cation, as measured at the date of modiﬁ cation. Where an equity-settled option is cancelled, it is treated as if it had vested on the date of cancellation, and any expense not yet recognised for the option is recognised immediately. However, if a new option is substituted for the cancelled option, and designated as a replacement option on the date that it is granted, the cancelled and new option are treated as if they were a modiﬁ cation of the original option, as described in the previous paragraph. 38. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The dilutive eff ect, if any, of outstanding options is reﬂ ected as additional share dilution in the computation of earnings per share. (z) Earnings per share Basic earnings per share is determined by dividing the proﬁ t attributed to members of the parent after related income tax expense by the weighted average number of ordinary shares outstanding during the ﬁ nancial year. Diluted earnings per share is calculated as net proﬁ t attributable to members, adjusted for: • • • cost of servicing equity (other than dividends); the after tax eff ect 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. (aa) Business combinations The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other assets are acquired. The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree’s identiﬁ able net assets. All acquisition costs are expensed as incurred to proﬁ t or loss. On the acquisition of a business, the consolidated entity assesses the ﬁ nancial assets acquired and liabilities assumed for appropriate classiﬁ cation and designation in accordance with the contractual terms, economic conditions, the consolidated entity’s operating or accounting policies and other pertinent conditions in existence at the acquisition-date. Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest in the acquiree at the acquisition-date fair value and the diff erence between the fair value and the previous carrying amount is recognised in proﬁ t or loss. Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the fair value of contingent consideration classiﬁ ed as an asset or liability is recognised in proﬁ t or loss. Contingent consideration classiﬁ ed as equity is not remeasured and its subsequent settlement is accounted for within equity. The diff erence between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identiﬁ able net assets acquired, being a bargain purchase to the acquirer, the diff erence is recognised as a gain directly in proﬁ t or loss by the acquirer on the acquisition-date, but only after a reassessment of the identiﬁ cation and measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer’s previously held equity interest in the acquirer. Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value. INFOMEDIA.COM.AU 39. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 Notes CONSOLIDATED 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 & development costs Total research & development costs incurred during the period Less: development costs deferred 10 Net research and development costs expensed 2012 $’000 12,000 7,278 19,278 10,622 52 10,674 5 431 44 91 571 421 5,575 5,996 6,567 11,081 (6,396) 4,685 2011 $’000 12,307 7,462 19,769 8,929 15 8,944 30 368 40 112 550 147 4,919 5,066 5,616 9,312 (5,245) 4,067 40. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 4. INCOME TAX Notes CONSOLIDATED 2012 $’000 2011 $’000 The major components of income tax expense are: Income statement Current income tax Current income tax charge Adjustments in respect of current income tax of previous years. Deferred income tax Relating to origination and reversal of temporary diff erences Income tax expense reported in the income statement (b) Disclosure of tax eff ects relating to each component of other comprehensive income Movement in cash ﬂ ow hedges 2,809 (183) 101 2,727 (419) (419) 3,089 (78) 306 3,317 (281) (281) 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 11,189 13,356 At the Company’s statutory income tax rate of 30% (2011: 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 income statement 3,357 (158) (531) 59 2,727 4,007 (153) (606) 69 3,317 INFOMEDIA.COM.AU 41. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 4. INCOME TAX (CONTINUED) Deferred income tax Deferred income tax at 30 June relates to the following: Notes STATEMENT OF FINANCIAL POSITION INCOME STATEMENT 2012 $’000 2011 $’000 2012 $’000 2011 $’000 CONSOLIDATED Deferred tax liabilities Derivatives Deferred development costs Intellectual property Other (208) (6,310) - - (627) (6,065) (37) - Gross deferred income tax liabilities (6,518) (6,729) 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) 27 91 616 418 259 1,411 19 115 495 420 255 1,304 - 245 (37) - (8) 24 (121) 2 (4) 101 - 100 (44) (78) 27 30 242 41 (12) 306 Net deferred income tax liabilities (5,107) (5,425) 5. EARNINGS PER SHARE Basic earnings per share amounts are calculated by dividing net proﬁ t for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted earnings per share amounts are calculated by dividing the net proﬁ t attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year (adjusted for the eff ects of dilutive options). The following reﬂ ects the income and share data used in the total operations basic and diluted earnings per share computations: 30 June 2012 Notes CONSOLIDATED Net proﬁ t attributable to equity holders from continuing operations 2012 $’000 8,461 2011 $’000 10,039 Number of shares Number of shares Weighted average number of ordinary shares for basic earnings per share 303,276,855 303,483,292 Eff ect of dilution: Share options 347,329 - Adjusted weighted average number of ordinary shares for diluted earnings per share 303,624,184 303,483,292 Since the reporting date, prior to the completion of these ﬁ nancial statements, the company has not repurchased any further shares through its buy back program. 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 250,000 (2011: 1,000,000) 42. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 Notes CONSOLIDATED 6. DIVIDENDS PROPOSED OR PAID (a) Dividends paid during the year: Interim dividend – 1.03 cents fully franked (2011: 1.2 cents fully franked) per share Prior year ﬁ nal dividend – 1.2 cents unfranked (2011: 1.2 cents, unfranked) per share Total dividends paid during the year (b) Dividends proposed and not recognised as a liability: Final dividend – 1.37 cents fully franked. (2011: 1.2 cents, fully franked) per share (c) Franking credit balance: – – The amount of franking credits available for the subsequent ﬁ nancial year are: franking account balance as at the end of the ﬁ nancial year franking credits that will arise from the payment of income tax payable as at the end of the ﬁ nancial year If fully franked, the tax rate on dividends is 30% (2011: 30%). 2012 $’000 2011 $’000 3,124 3,639 6,763 3,641 3,641 7,282 4,155 3,639 927 685 1,612 716 1,647 2,363 30 June 2012 CONSOLIDATED 7. TRADE AND OTHER RECEIVABLES (CURRENT) Trade debtors Allowance for impairment loss (a) Other debtors (a) Allowance for impairment loss 2012 $’000 4,203 (210) 3,993 40 4,033 2011 $’000 4,133 (136) 3,997 47 4,044 Trade receivables are non-interest bearing and are generally on 30-60 day terms. A provision for impairment loss is recognised when there is objective evidence that an individual trade receivable is impaired. An impairment loss of $121,000 (2011: $41,000 loss) has been recognised by the group in the current year. These amounts have been included in the other expenses item. The amount of the allowance/impairment loss is recognised as the diff erence between the carrying amount of the debtor and the estimated future cash ﬂ ows expected to be received from the relevant debtors. Movements in the provision for impairment loss were as follows: At 1 July Charge/(release) for the year Foreign exchange translation Amounts written off At 30 June 136 121 (10) (37) 210 218 41 7 (130) 136 At 30 June the aging analysis of trade receivables is as follows: Total 0-60 days NI* 0-60 days CI* 61-120 days NI* 61-120 days CI* 121+ days NI* 121+ days CI* 2012 Consolidated ($’000) 4,203 2011 Consolidated ($’000) 4,133 3,652 3,630 36 42 281 310 30 30 76 57 128 64 * Not impaired (NI) Considered impaired (CI) All trade receivables over 60 days are considered past due. INFOMEDIA.COM.AU 43. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 8. INVENTORIES Raw materials At cost Total inventories at the lower of cost and net realisable value Notes CONSOLIDATED 2012 $’000 7 7 2011 $’000 48 48 30 June 2012 Notes CONSOLIDATED 9. PROPERTY, PLANT & 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 2012 $’000 434 (407) 27 7,871 (6,784) 1,087 399 (237) 162 3,287 (3,174) 113 11,991 (10,602) 1,389 2011 $’000 428 (402) 26 7,336 (6,308) 1,028 380 (193) 187 3,251 (3,084) 167 11,395 (9,987) 1,408 44. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 9. PROPERTY, PLANT & EQUIPMENT (CONTINUED) (b) Reconciliation of property, plant and equipment carrying values CONSOLIDATED 2012 $’000 2011 $’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 26 6 - (5) 27 1,028 492 (2) (431) 1,087 187 19 - (44) 162 167 37 (91) 113 1,408 554 (2) (571) 1,389 55 - - (29) 26 842 561 (6) (369) 1,028 242 - (15) (40) 187 166 113 (112) 167 1,305 674 (21) (550) 1,408 INFOMEDIA.COM.AU 45. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 CONSOLIDATED 10. INTANGIBLE ASSETS AND GOODWILL $000 $’000 $’000 $’000 Development costs1 Intellectual Property2 Other Intangibles2 Goodwill 2 At 1 July 2011 Cost (gross carrying amount) Accumulated amortisation Net carrying amount Year ended 30 June 2012 At 1 July 2011, net of accumulated amortisation and impairment Additional amounts recognised from purchase of subsidiary occurring during the year (note 27) Additions Amortisation At 30 June 2012, net of accumulated amortisation and impairment At 30 June 2012 Cost (gross carrying amount) Accumulated amortisation Net carrying amount 33,916 (13,705) 20,211 2,537 (2,414) 123 20,211 123 - 6,396 (5,575) 21,032 40,312 (19,280) 21,032 578 - (242) 459 3,115 (2,656) 459 1. Internally generated 2. Purchased as part of business/territory acquisition - - - - 1,071 - (179) 892 1,071 (179) 892 Total $’000 44,994 (16,119) 28,875 8,541 - 8,541 8,541 28,875 3,182 - - 4,831 6,396 (5,996) 11,723 34,106 11,723 - 11,723 56,221 (22,115) 34,106 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 3 years. 46. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 CONSOLIDATED Development costs Intellectual Property Other Intan- gibles Goodwill $000 $’000 $’000 $’000 10. INTANGIBLE ASSETS AND GOODWILL (CONTINUED) At 1 July 2010 Cost (gross carrying amount) Accumulated amortisation Net carrying amount Year ended 30 June 2011 At 1 July 2010, net of accumulated amortisation and impairment Additions Amortisation At 30 June 2011, net of accumulated amortisation and impairment At 30 June 2011 Cost (gross carrying amount) Accumulated amortisation Net carrying amount 28,671 (8,786) 19,885 19,885 5,245 (4,919) 20,211 33,916 (13,705) 20,211 2,537 (2,267) 270 270 - (147) 123 2,537 (2,414) 123 - - - - - - - - - - Total $’000 39,749 (11,053) 28,696 28,696 5,245 (5,066) 8,541 - 8,541 8,541 - - 8,541 28,875 8,541 - 8,541 44,994 (16,119) 28,875 INFOMEDIA.COM.AU 47. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 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 note 24) for impairment testing as follows: • Asia Paciﬁ c; • Europe; • North America; and • 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 2012 based on ﬁ nancial budgets approved by The Board for the 2013 ﬁ nancial year extrapolated for a ﬁ ve year period on the basis of 5% growth together with a terminal value. The discount rate applied to cash ﬂ ow projections is 14% (2011: 14%). The discount rate reﬂ ects management 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, Middle East & Africa North America Latin and South America CONSOLIDATED Carrying amount of goodwill 2011 Movement Carrying amount of goodwill 2012 $’000 1,938 722 2,660 $’000 4,074 1,518 5,592 $’000 $’000 1,954 728 2,682 575 214 789 Total $’000 8,541 3,182 11,723 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 remain 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; and • Management has used an AUD/USD exchange rate of $1.03 and an AUD/EUR exchange rate of $0.81 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 to be above its carrying amount. Discount rate assumptions – Management recognises that the time value of money may vary from what they have estimated. Management notes that applying a discount rate of double the current rate still yields the recoverable amount to be above its carrying amount. Foreign exchange rate assumptions – Management notes that applying an AUD/USD exchange rate of $1.20 and an AUD/ EUR exchange rate of $0.85 still yields the recoverable amount to be above its carrying amount. 48. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 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 14. DEFERRED REVENUE (CURRENT) Revenue in advance 15. PROVISIONS (NON-CURRENT) Employee beneﬁ ts (a) 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 12(a) 2012 $’000 467 2,434 2,901 2011 $’000 326 2,341 2,667 15(a) 1,812 1,812 1,770 1,770 564 356 425 395 2,165 (1,320) 1,392 2,237 1,812 425 2,237 2,306 (1,512) 1,371 2,165 1,770 395 2,165 13 INFOMEDIA.COM.AU 49 NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 Notes CONSOLIDATED 16. CONTRIBUTED EQUITY AND RESERVES Ordinary shares 2012 $’000 10,798 10,798 2011 $’000 10,798 10,798 Fully paid ordinary shares carry one vote per share and carry the right to dividends. Movement in ordinary shares on issue: At 1 July 2010 Shares repurchased At 30 June 2011 Shares repurchased At 30 June 2012 Notes Number $’000 304,575,076 (1,298,221) 303,276,855 - 11,131 (333) 10,798 - 303,276,855 10,798 On 1 April 2008 the company commenced a share buy back (on market within 10/12 limit). This was reinitiated on 1 April 2009, 1 April 2010 and 1 April 2011. As at 30 June 2012 the company had repurchased 22,694,717 shares for a total consideration of $6,939,000. Capital management When managing capital, the company’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to shareholders and 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 2012 ﬁ nancial year, the company paid dividends of $6.8 million (2011: $7.3 million). The company has no current plans to issue further shares on the market but may further reduce the capital structure through its share buy back program. 50. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 16. CONTRIBUTED EQUITY AND RESERVES (CONTINUED) Employee Option Plan There were 5,220,000 (2010: 250,000) options issued during the current year at an average exercise price of $0.19 (2010: $0.245). 30 June 2012 CONSOLIDATED Employee equity beneﬁ ts reserve Foreign currency translation reserve Cashﬂ ow hedge reserve $’000 $’000 $’000 Movement in reserves: At 1 July 2011 Currency translation diff erences Share based payments Derivatives marked to market At 30 June 2011 Currency translation diff erences Share based payments Transfer to retained proﬁ t Derivatives marked to market At 30 June 2012 Nature and purpose of reserves Employee equity beneﬁ ts reserve 1,195 - 15 - 1,210 - 52 (1,206) - 56 (153) 141 - - (12) (192) - - - (204) 2,119 - - (656) 1,463 - - - (978) 485 Total $’000 3,161 141 15 (656) 2,661 (192) 52 (1,206) (978) 337 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 diff erences arising from the translation of the ﬁ nancial statements of foreign subsidiaries. It is also used to record the eff ect of hedging net investments in foreign operations. Cashﬂ ow hedge reserve The derivatives reserve is used to record the mark to market valuation of forward currency contracts at the balance sheet date that are considered eff ective hedges. INFOMEDIA.COM.AU 51. NOTES TO THE FINANCIAL STATEMENTS 30 June 2012 Notes CONSOLIDATED 17. STATEMENT OF CASH FLOWS (a) Reconciliation of proﬁ t after tax to the net cash ﬂ ows from operations Proﬁ t from ordinary activities after income tax expense Depreciation of non-current assets Amortisation of non-current assets Amortisation of employee options Disposal of property, plant, and equipment 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 2012 $’000 8,461 570 5,996 52 2 (41) 48 1,535 (6,396) (107) 74 72 - (662) 202 (67) 9,739 2011 $’000 10,039 550 5,066 15 21 339 8 740 (5,245) (1,070) (82) (141) - 898 306 (124) 11,320 1,999 4,647 6,646 2,478 6,342 8,820 30 June 2012 Notes CONSOLIDATED 18. COMMITMENTS & CONTINGENCIES (a) Lease expenditure commitments Operating leases (non-cancellable): Minimum lease payments – not later than one year – later than one year and not later than ﬁ ve years – later than ﬁ ve years – aggregate operating lease expenditure contracted for at balance date 2012 $’000 2011 $’000 1,197 4,099 - 5,296 1,118 4,598 620 6,336 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 $508,000 (2011: $700,000) relating to the lease commitments of its corporate headquarters. 52. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 19. SHARE BASED PAYMENT PLANS Employee Option Plan The Employee Option Plan entitles the Company to off er ‘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 2012 2011 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) 1,000,000 5,220,000 (750,000) - 5,470,000 $0.30 $0.19 $0.32 - $0.19 2,150,000 250,000 (1,400,000) - 1,000,000 $0.45 $0.245 $0.51 - $0.30 (a) Options held at the beginning of the year: The following table summarises information about options held by employees at 1 July 2011 Number of options Grant date Earliest vesting date Expiry date Weighted average exercise price 250,000 250,000 250,000 250,000 1/02/2009 1/02/2010 5/02/2012 1/01/2009 1/10/2008 1/01/2010 1/10/2009 5/01/2012 31/10/2011 $0.29 $0.29 $0.37 21/11/2010 20/12/2011 20/12/2013 $0.245 (b) Options granted during the year: The following table summarises information about options granted during the year. Number of options Grant date Earliest vesting date Expiry date Weighted average exercise price 1,800,000 3,420,000 15/01/2012 15/01/2013 14/03/2015 30/05/2012 30/05/2013 30/05/2015 $0.19 $0.19 (c) Options expired during the year: The following table summarises information about options expired during the year. Number of options 250,000 250,000 250,000 Grant date Earliest vesting date Expiry date Weighted average exercise price 1/02/2009 1/02/2010 05/02/2012 1/01/2009 1/01/2010 05/01/2012 1/10/2008 1/10/2009 30/10/2011 $0.29 $0.29 $0.37 INFOMEDIA.COM.AU 53. NOTES TO THE FINANCIAL STATEMENTS (d) Options exercised during the year: There were no options exercised during the year. (e) Options held at the end of the year: The following table summarises information about options held by employees at 30 June 2012: Number of options 250,000 1,800,000 3,420,000 Grant date Earliest vesting date Expiry date Weighted average exercise price 21/11/2010 20/12/2011 20/12/2013 $0.245 15/01/2012 15/01/2013 14/03/2015 30/05/2012 30/05/2013 30/05/2015 $0.19 $0.19 (e) Other details regarding options: The weighted average fair value of options granted during the year was $0.04 (2011: $0.058). The fair value of the equity-settled options granted under the option plan is estimated as at the grant date using a binomial model taking into account the term and conditions upon which the options were granted. The following table lists the inputs to the model used for the year: Granted 21/11/2010 Granted 15/01/2012 Granted 30/05/2012 Dividend yield (%) Expected volatility (%) Risk free rate (%) Option exercise price Weighted average share price at grant date 7.5% 44% 5.59% $0.245 $0.245 10.0% 41% 3.95% $0.19 $0.19 10.0% 39% 3.08% $0.19 $0.19 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 2012 $’000 52 2011 $’000 15 Contributions are made by the Company in accordance with the relevant statutory requirements. Contributions by the Company for the year ended 30 June 2012 were 9% (2011: 9%) of employee’s wages and salaries which are legally enforceable in Australia. The superannuation plans provide accumulation beneﬁ ts. 54. 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 2012 $ 1,602,877 108,507 14,497 - 38,130 1,764,011 2011 $ 1,467,768 106,053 14,100 101,538 15,206 1,704,665 (b) Option holdings of Key Management Personnel (Consolidated) 30 June 2012 Balance at beginning of period 1 July 2011 Granted as compensation Options exercised Expired Balance at end of period 30 June 2012 Vested at 30 June 2012 Total Not exercisable Exercisable Executives Karen Blunden 250,000 - Nick Georges - 450,000 Michael Roach 250,000 450,000 Andrew Pattinson 250,000 450,000 Jonathan Pollard 250,000 450,000 1,000,000 1,800,000 Granted as compensation Options exercised Balance at beginning of period 1 July 2010 30 June 2011 Directors Gary Martin** 1,000,000 - Executives Karen Blunden*** - 250,000 Nick Georges Michael Roach 250,000 250,000 Andrew Pattinson 250,000 Jonathan Pollard 250,000 - - - - 2,000,000 250,000 ** Resigned 31 August 2010 *** Appointed 21 November 2010 - - - - - - - - - - - - - - - 250,000 450,000 (250,000) 450,000 (250,000) 450,000 (250,000) 450,000 83,333 83,333 - - - - - - - - (750,000) 2,050,000 83,333 83,333 - - - - - - Net change other Balance at end of period 30 June 2011 Vested at 30 June 2011 Total Not exercisable Exercisable (1,000,000) - - - 250,000 (250,000) - - - - 250,000 250,000 250,000 - - 166,667 166,667 166,667 - - - 166,667 166,667 166,667 (1,250,000) 1,000,000 500,001 500,001 - - - - - - - INFOMEDIA.COM.AU 55. NOTES TO THE FINANCIAL STATEMENTS 21. KEY MANAGEMENT PERSONNEL DISCLOSURES (CONTINUED) (c) Shareholdings of Key Management Personnel 30 June 2012 Number of shares held in Infomedia Ltd Balance 30 June 2011 Granted as compensation On exercise of options Net change other Balance 30 June 2012 Directors Richard Graham Myer Herszberg Geoff Henderson* Frances Hernon Executives Andrew Pattinson Nick Georges Michael Roach Jonathan Pollard Karen Blunden Total *Appointed 25/08/11 30 June 2011 Number of shares held in Infomedia Ltd Directors Richard Graham Myer Herszberg Gary Martin* Frances Hernon Andrew Moff at** Executives Andrew Pattinson Nick Georges Michael Roach Jonathan Pollard Karen Blunden*** Total * Resigned 31/8/10 ** Resigned 5/11/10 ***Appointed 21/11/10 103,390,901 23,421,589 - 5,000 2,447,567 24,421 18,721 1,996 - 129,310,195 - - - - - - - - - - - - - - - - - - - - - 103,390,901 15,010 23,436,599 - - - - - - - - 5,000 2,447,567 24,421 18,721 1,996 - 15,010 129,325,205 Balance 1 July 2010 Granted as compensation On exercise of options Net change other Balance 30 June 2011 103,004,060 23,421,589 655,590 5,000 300,000 2,447,567 24,421 18,721 1,996 - 129,878,944 - - - - - - - - - - - - - - - - - - - - - - 386,841 103,390,901 - 23,421,589 (655,590) - (300,000) - - - - - - 5,000 - 2,447,567 24,421 18,721 1,996 - (568,749) 129,310,195 All equity transactions with key management personnel other than those arising from the exercise of compensation options and compensation shares have been entered into under terms and conditions no more favourable than those the entity would have adopted if dealing at arm’s length. (d) Loans to Key Management Personnel There were no loans at the beginning or the end of the reporting period to key management personnel. No loans were made available during the reporting period to key management personnel. 56. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 22. AUDITORS’ REMUNERATION Amounts received or due and receivable by the auditors of Infomedia Ltd: BDO East Coast Partnership/PKF East Coast Practice – an audit or review of the ﬁ nancial report of the entity and any other entity in the consolidated entity – Non-audit services Ernst & Young – an audit or review of the ﬁ nancial report of the entity and any other entity in the consolidated entity CONSOLIDATED 2012 $ 2011 $ 121,800 72,700 - - - - - 159,650 194,500 159,650 23. RELATED PARTY DISCLOSURES Ultimate Parent Infomedia Ltd is the ultimate Australian parent company Wholly-owned group transactions (a) An unsecured, trade receivable of $483,736 (2011: $270,693) remains owing to IFM Europe Ltd from Infomedia Ltd. (b) An unsecured, trade receivable of $859,545 (2011: $1,520,419) remains owing from IFM North America Inc. to Infomedia Ltd. (c) An unsecured, trade receivable of $18,919 (2011: $nil) remains owing to Diff erent Aspect Software Ltd. from Infomedia Ltd. (d) During the year Infomedia Ltd received $15,485,980 (2011: $15,475,220) from IFM Europe Ltd for intra-group sales. (e) During the year Infomedia Ltd received $6,145,616 (2011: $7,113,411) from IFM North America Inc. for intra-group sales (f) During the year IFM Europe paid $466,317 (2010: $483,820) 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 34.10% of the ordinary shares in Infomedia Ltd (2011: 34.10%). INFOMEDIA.COM.AU 57. NOTES TO THE FINANCIAL STATEMENTS 24. SEGMENT INFORMATION 30 June 2012 Notes Asia Paciﬁ c Europe North America Latin & South America Corporate Total $’000 $’000 $’000 $’000 $’000 $’000 Business Segments REVENUE Sales revenue Consolidated revenue Segment result Finance revenue Finance cost 12,350 21,129 9,665 2,533 - 45,677 45,677 9,809 17,358 7,159 2,028 (25,266) 11,088 - - - - - - - - 150 (50) Consolidated proﬁ t before income tax 9,809 17,358 7,159 2,028 (25,166) 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 - - - - - 2,902 42 881 310 22 - 18 16 - 72 - - - - - 58. INFOMEDIA.COM.AU 150 (50) 11,188 (2,727) 8,461 2,944 44,945 47,889 1,191 10,453 11,644 - - 498 536 5,996 480 5,996 570 NOTES TO THE FINANCIAL STATEMENTS 24. SEGMENT INFORMATION (CONTINUED) 30 June 2011 Notes Asia Paciﬁ c Europe North America Latin & South America Corporate Total $’000 $’000 $’000 $’000 $’000 $’000 Business Segments REVENUE Sales revenue Consolidated revenue Segment result Finance revenue 11,837 19,847 9,880 2,529 - 8,740 15,028 6,292 2,054 (18,942) - - - - 184 Consolidated proﬁ t before income tax 8,740 15,028 6,292 2,054 (18,758) 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 - - - - - 1,759 897 611 219 - - 7 - - 77 - - - - - 44,093 44,093 13,172 184 13,356 (3,317) 10,039 2,656 45,147 47,803 830 11,308 12,138 - - 674 674 5,066 466 5,066 550 Identiﬁ cation of reportable segments The group 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 Group’s major risks and have the most eff ect of the rates of return. Accounting policies and inter-segment transactions The accounting policies used by the Group in reporting segments internally are the same as those contained in note 2 to the accounts and in the prior period. The group accounting policies for segments are applied to the respective segments up to the segment result level. Major customers The Group has many customers to which it provides products. There is no signiﬁ cant reliance on any single customer. INFOMEDIA.COM.AU 59. 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 and range forward 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 $6,646,000 (2011: $8,820,000) with a ﬂ oating interest rate. The Company’s policy is to accept the ﬂ oating interest rate risk with both its cash holdings and bank loans. Cash is held primarily with leading Australian banks for periods not exceeding 30 days, as such any reasonably expected change in interest rates (+/- 1%) would not have a signiﬁ cant impact on post tax proﬁ t or other comprehensive income. (b) Foreign currency risk The Company has transactional currency exposures. These exposures mainly arise from the transactional sale of products and to a lesser extent the associated cost of sales component relating to these products. As the Company’s product off erings are typically made on a recurring monthly subscription basis, there is a relatively high degree of reliability in estimating a proportion of future cashﬂ ow exposures. Approximately 40% of the Company’s sales are denominated in United States Dollars and 40% are denominated in Euros (measured using the spot foreign exchange rates in existence in the current ﬁ nancial year). The Company seeks to mitigate exposure to movements in these currencies by entering into forward exchange derivative contracts under an approved hedging policy. As a result of the Company’s investment in both its European and United States subsidiaries, the Company’s statement of ﬁ nancial position can be aff ected by movements in both the Euro and United States dollar against the Australian dollar. At 30 June, the Group had the following exposure to US$ foreign currency that is not designated in cash ﬂ ow hedges: Financial Assets Cash and cash equivalents Derivatives CONSOLIDATED 2012 $’000 15 160 175 2011 $’000 811 1,406 2,217 60. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) At 30 June, the Group had the following exposure to EUR foreign currency that is not designated in cash ﬂ ow hedges: Financial Assets Cash and cash equivalents Derivatives CONSOLIDATED 2012 $’000 2011 $’000 374 536 910 1,013 605 1,618 The following sensitivity is based on the foreign currency risk exposures in existence at the balance date: At 30 June, 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 aff ected as follows: Judgments of reasonably possible movements: Post tax proﬁ t Higher/(Lower) Total equity Higher/(Lower) 2012 $’000 2011 $’000 (1) 2 (23) 46 (51) 100 (64) 125 2012 $’000 482 (928) 401 (762) 2011 $’000 578 (575) 529 (1,004) Consolidated AUD/USD +10% AUD/USD – 15% AUD/EUR +10% AUD/EUR – 15% Management believe 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 receivables is spread broadly across three automotive groups - manufacturers, distributors and dealerships. Receivable balances are monitored on an ongoing basis with the result that the Company’s exposure to bad debts is not 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 Group’s policy to securitise its trade and other receivables. (d) Price risk There are no items on the statement of ﬁ nancial position as at 30 June 2012 that are subject price risk. INFOMEDIA.COM.AU 61. 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 statement of ﬁ nancial position 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 date other than with respect of 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 statement of ﬁ nancial position 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: CONSOLIDATED YEAR ENDED 30 JUNE 2012 Less than one year $’000 Two to ﬁ ve years $’000 Greater than ﬁ ve years $’000 Weighted average eff ective interest rate % Floating rate Cash and cash equivalents Trade and other receivables Trade and other payables 6,646 4,033 (2,901) - - - - - - 3.0 - - CONSOLIDATED YEAR ENDED 30 JUNE 2011 Less than one year $’000 Two to ﬁ ve years $’000 Greater than ﬁ ve years $’000 Weighted average eff ective interest rate % Floating rate Cash and cash equivalents Trade and other receivables Trade and other payables 8,820 4,044 (2,667) - - - - - - 3.2 - - Interest on cash and cash equivalents classiﬁ ed as ﬂ oating rate is repriced at intervals of less than one year. Interest on ﬁ nancial instruments classiﬁ ed as ﬁ xed rate is ﬁ xed until maturity of the instrument. The other ﬁ nancial instruments of the Group that are not included in the above tables are non-interest bearing and are therefore not subject to interest rate risk. 62. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 25. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (CONTINUED) (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 2012. CONSOLIDATED Maturity Company buys Company sells Exchange rate Company sells United States Dollars (USD) Less than one year Company sells Euros (E) Less than one year $A’000 7,738 $A’000 7,130 USD’000 7,600 E’000 5,240 0.982 0.735 The mark to market valuation of these contracts at 30 June 2012 was $699,000 which is booked directly in equity. The following table summarises the range forward contracts on hand at 30 June 2012. Maturity Company sells Floor rate Ceiling rate CONSOLIDATED Less than one year Less than one year USD’000 3,975 700 0.8825 0.8800 1.100 0.9900 The mark to market valuation of these range forwards at 30 June 2012 was a loss of $6,000 which is booked directly in equity. Derivative contracts The following table summarises the forward exchange contracts on hand at 30 June 2011. CONSOLIDATED Maturity Company buys Company sells Exchange rate Company sells United States Dollars (USD) Less than one year Company sells Euros (E) Less than one year Company sells Euros (E) Greater than one year and not greater than two years $A’000 7,585 $A’000 8,396 $A’000 1,420 USD’000 6,361 E’000 5,665 E’000 1,000 0.839 0.675 0.704 The mark to market valuation of these contracts at 30 June 2011 was $2,055,000, which is booked directly in equity. Maturity Company sells Floor rate Ceiling rate USD’000 Greater than one year and not greater than two years 3,975 0.8825 1.100 CONSOLIDATED The mark to market valuation of these range forwards at 30 June 2011 was $36,000 which has been included in the Statement of Comprehensive Income as Other Income. INFOMEDIA.COM.AU 63. 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 Trade and other creditors 27. ACQUISITION OF SUBSIDIARY Carrying Amount Fair Value 2012 $’000 6,646 4,033 693 2011 $’000 8,820 4,044 2,091 2012 $’000 6,646 4,033 693 2011 $’000 8,820 4,044 2,091 2,901 2,667 2,901 2,667 On 2 September 2011, Infomedia Ltd acquired 100% of the share capital of Diff erent Aspect Software Ltd for $4,719,000 in cash. Diff erent Aspect Software Ltd is a UK based software developer specialising in the provision of IT application solutions to the automotive industry. As a result of the acquisition, the group is expected to further improve its off erings of software products in the automotive space. Goodwill of $3,182,000 arising from the acquisition is attributable to the assembled workforce and potential for cost saving synergies and cross selling opportunities. None of the goodwill recognised is expected to be deductible for income tax purposes. The following table summarises the consideration paid for Diff erent Aspect Software Ltd, the fair value of assets acquired and liabilities assumed at the acquisition date. Consideration at 2 September 2011 Cash Total consideration transferred 4,719 4,719 Recognised amounts of identiﬁ able assets acquired and liabilities assumed Cash and cash equivalents Property, plant and equipment Inventories Trade and other receivables Intellectual property Other intangibles Trade and other payables Deferred revenue Deferred tax liability Provision for tax Total identiﬁ able net assets Goodwill Total 103 19 5 246 578 1,071 (339) (275) 100 29 1,537 3,182 4,719 Acquisition-related costs of $158,000 are included in Other expenses in the consolidated income statement for the year ended 30 June 2012. The revenue included in the consolidated statement of comprehensive income since 2 September 2011 contributed by Diff erent Aspect Software Ltd was $1.2m. Diff erent Aspect Software Ltd contributed proﬁ t $214,000 over the same period. Had the acquisition of Diff erent Aspect Software Ltd been eff ected at 1 July 2011, management estimates revenue of the group for the 12 months ended 30 June 2012 would have been $1.45m and the proﬁ t would have been $250,000. 64. INFOMEDIA.COM.AU NOTES TO THE FINANCIAL STATEMENTS 28. SUBSEQUENT EVENTS There has been no matter or circumstance that has arisen since the end of the ﬁ nancial year that has signiﬁ cantly aff ected the operations of the Company, the results of those operations, or the state of aff airs of the Company. 29. PARENT ENTITY INFORMATION Current assets Total assets Current liabilities Total liabilities Contributed equity Retained earnings Employee equity beneﬁ t reserve Cashﬂ ow hedge reserve Total shareholders’ equity Proﬁ t or loss of the parent entity Total comprehensive income of the parent entity 30. INTERESTS IN CONTROLLED ENTITIES Parent Entity 2012 2011 $’000 9,601 45,411 4,873 10,453 10,798 23,619 56 485 34,958 7,273 6,295 $’000 14,532 46,079 4,961 10,709 10,798 21,899 1,210 1,463 35,370 10,014 9,358 Name Country of incorporation Percentage of equity interest held by the Company (directly or indirectly) Parent entity IFM Europe Ltd - ordinary shares United Kingdom Diff erent Aspect Software Ltd** - ordinary shares United Kingdom IFM North America Inc - ordinary shares IFM Germany GmbH* United States of America 2012 % 100 100 100 2011 % 100 - 100 - ordinary shares Germany 100 100 2012 $ 247 4,719 1 - 4,967 2011 $ 247 - 1 - 248 * Investment is held by IFM Europe Ltd. ** Entity was purchased on 2 September 2011 INFOMEDIA.COM.AU 65. 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 2012 and of their 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 (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. (d) 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 ending 30 June 2012. On behalf of the Board RICHARD DAVID GRAHAM Chairman Sydney 23 August 2012 66. INFOMEDIA.COM.AU Tel: 61 2 9251 4100 Fax: 61 2 9240 9821 www.bdo.com.au Level 10, 1 Margaret St Sydney NSW 2000 Australia INDEPENDENT AUDITOR’S REPORT To the members of Infomedia Limited Report on the Financial Report We have audited the accompanying financial report of Infomedia Limited, which comprises the statement of financial position as at 30 June 2012, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, 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 of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 2(b), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with International Financial Reporting Standards. 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. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance about 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 the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the company’s preparation of the financial report that gives a true and fair view 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 company’s internal control. 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. BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than Tasmania. 57 Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of Infomedia Limited, would be in the same terms if given to the directors as at the time of this auditor’s report. Opinion In our opinion: (a) the financial report of Infomedia Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Act 2001; and (b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 2(b). Report on the Remuneration Report We have audited the Remuneration Report included in pages 7 to12 of the directors’ report for the year ended 30 June 2012. 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. Opinion In our opinion, the Remuneration Report of Infomedia Limited for the year ended 30 June 2012 complies with section 300A of the Corporations Act 2001. BDO East Coast Partnership Grant Saxon Partner Sydney, 23 August 2012 58 CORPORATE GOVERNANCE INFOMEDIA LTD CORPORATE GOVERNANCE STATEMENT FY2012 OVERVIEW Infomedia’s adoption of ‘best practice’ Corporate Governance Principles Infomedia continually strives to ensure an acceptable level of compliance with the voluntary governance principles set out in the ‘Corporate Governance Principles and Recommendations 2nd Edition with 2010 Amendments‘ published by the Australian Stock Exchange’s (ASX) Corporate Governance Committee (the ASX Principles). The ASX Principles are a voluntary code and compliance is not mandatory. Infomedia strives to meet the ASX Principles in a manner consistent with the resources, size and operational scope of the Company. To the extent that Infomedia is non- compliant with particular elements of the voluntary framework, the Company embraces the “If not, why not?” principle, and provides explanatory materials relating to those compliance discrepancies. ASX – Corporate Governance Principles PRINCIPLE 1 Lay solid foundations for management and oversight PRINCIPLE 2 Structure the Board to add value PRINCIPLE 8 Remunerate fairly and responsibly PRINCIPLE 7 Recognise and manage risk ASX CORPORATE GOVERNANCE PRINCIPLES PRINCIPLE 3 Promote ethical and responsible decision making PRINCIPLE 6 Respect the rights of shareholders PRINCIPLE 4 Safeguard integrity in ﬁnancial reporting PRINCIPLE 5 Make timely and balanced disclosures The ASX Principles provide a standard platform from which Infomedia implements and maintains a range of charters, policies and procedures applicable to the Company (the Policies). Infomedia’s Policies seek to instil and entrench the values, standards and behaviours required to ensure transparency, effi cient resource allocation and protection of stakeholder interests. Further information about the Policies is available at http://www.infomedia.com.au/?Page=CorporateGovernance CORPORATE GOVERNANCE STATEMENT 1. PARTIAL NON-COMPLIANCE WITH THE ASX PRINCIPLES –“IF NOT, WHY NOT?” As a voluntary set of guidelines, compliance with the ASX Principles is not mandatory. In order to encourage participation, and in recognition of the fact that the resources and operating environments vary between participants, the ASX Principles provide organisations with the ﬂ exibility to comply in full or in part. This ﬂ exibility is tempered by the adoption of the “If not, why not?” principle, encouraging the Company to provide reasons for non- compliance with particular parts of the ASX Principles. INFOMEDIA.COM.AU 69. CORPORATE GOVERNANCE Whilst Infomedia strives to meet the ASX Principles, it does so in a manner consistent with the resources available to it, and within the context of its operating environment. During FY2012, Infomedia was non-compliant with several of the ASX Principles. The following sections contain commentary on the areas of both compliance and non-compliance, and provide relevant commentary in accordance with the “If not, why not?” framework. 2. THE BOARD, SUB-COMMITTEES AND SENIOR MANAGEMENT 2.1 Composition and structure of the Board The composition and size of Board has been primarily shaped by Infomedia’s Constitution. Relevantly, the Constitution provides that: (a) the Company must maintain a minimum of three and a maximum of seven directors; (b) 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, retiring directors may off er themselves for re-election. Careful consideration is given to the contribution each director is able to make both individually and collectively. There is strong emphasis on promoting, among other attributes, an appropriate mix of complementary skills, independence, expertise, business knowledge and executive and non-executive participation. As noted in the Directors’ Report, Mr Geoff rey Henderson was elected to the position of Non-Executive Director during FY2012. Mr Henderson’s appointment has signiﬁ cantly contributed to the depth of industry speciﬁ c knowledge and experience of the Board, and imparts further independence to its operation. Following the appointment of Mr Henderson, the Infomedia Board is comprised of four Directors. The details of each Director’s name, terms of offi ce, committee memberships, meeting attendance records, skills experience and expertise, appear in the Directors’ Report. 2.2 Independence of the Chair Following the resignation of the Chief Executive Offi cer on 31 August 2010, Mr Richard Graham, after a six-year absence from the Company’s executive, resumed the duties of the Chief Executive Offi cer in his role as Executive Chairman. Mr Graham assumed this duty in addition to his continuing role as Chairman of the Board. Mr Graham also remains the Company’s largest shareholder. For the reasons outlined above, the Company does not comply with: (a) ASX Principle 2.2 - The chair should be an independent Director; and (b) ASX Principle 2.3 - The roles of the chair and the chief executive offi cer should not be exercised by the same individual. 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 given his wealth of experience. Additionally, the Board derives comfort from: (a) the Board Charter permitting Board members to elect a non-executive Director to chair informal meetings of non- executive Directors; and (b) the ability of the Directors to seek independent professional advice, made available at the expense of the Company. 2.3 Independence of the Board ASX Principle 2.1 calls for the majority of the Board to be independent, non-executive Directors. As currently comprised, the Board has three non-executive Directors in the form of Ms Frances Hernon, Mr Geoff rey Henderson and Mr Myer Herszberg. Whilst Ms Hernon and Mr Henderson meet the criteria for independence, Mr Herszberg’s independence is technically compromised by his standing as a substantial shareholder of the Company. Accordingly, the Company does not technically comply with ASX Principle 2.1. However, in light of the relevant quantitative and qualitative considerations, the Board considers Mr Herszberg to be operating with independence and objectivity, notwithstanding his shareholding in the Company. 70. INFOMEDIA.COM.AU CORPORATE GOVERNANCE The independence of the Board is subject to continual evaluation. 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. 2.4 Establishment of nomination and remuneration committees The ASX Principles recommend that the Board should establish: (a) a nominations committee for the examination of selection, recruitment and succession practices of the Company (ASX Principle 2.4); and (b) a remuneration committee to focus on remuneration policies (ASX Principle 8.1). The Board has assumed responsibility for remuneration and nomination since July 2007. Given the relative size and resources available to the Company, the Board is of the view that neither a nominations nor a remuneration committee would add any signiﬁ cant corporate governance value for the following reasons: (a) given the size and structure of the Board, there is little effi ciency to be derived from sub-committees other than the Audit, Risk & Governance Committee (Audit Committee); (b) ultimate responsibility for nominations and remuneration rests with the Board whether or not a nomination or remuneration sub-committee is established; (c) (d) the Board has processes in place to raise issues relating to nomination and remuneration in the form of regular reporting by senior management (including detailed reports from the Human Resources Manager) on such matters; and the Company maintains a formal 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 has formalised a policy for the nomination and induction of Directors (Director Nomination and Induction Policy), a summary of which is available on the Company website. 2.5 Board charter and responsibilities A formal charter documenting the appropriate division between the responsibilities of the Board and management has been in place since July 2004. The Charter mandates the Board’s focus on the following key matters: (a) developing the Company’s overall objectives; (b) developing and mandating strategies to achieve Company objectives; (c) setting overall policy framework within which the business of the Company is conducted; and (d) ensuring that the Company operates with integrity and in accordance with good management and governance practices. A summary of the Charter of the Board is available on the Company’s website. 2.6 Audit, Risk & Governance Committee Please refer to section 3.1 below for a report on the activities of the Audit Committee. 3. ETHICAL BUSINESS CONDUCT 3.1 Infomedia’s Code of Conduct Since its inception, Infomedia has placed emphasis on personal integrity, mutual respect and ethical business practices as core values (Core Values). The Company’s dedication to these Core Values was formalised by the introduction of a formal Code of Conduct in 2004. The Code was further reﬁ ned under the guidance of the Corporate Governance Committee during FY2006 to: (a) strengthen formal resolution strategies for intra-organisational disputes; and (b) provide clearer reporting guidelines with regard to compliance mechanisms. The Infomedia Code of Conduct strengthens the Company’s commitment to the Core Values by articulating and formally entrenching positive cultural values within the Company, and by providing guidance on dealings with various stakeholders. A summary of the Code of Conduct is available on the Company’s website. INFOMEDIA.COM.AU 71. CORPORATE GOVERNANCE 3.2 Workplace Diversity The Company has historically dedicated itself to principles of equality and diversity within the workplace, and remains steadfastly committed to that goal. The Company has consistently achieved annual accreditation from the Department of Equal Opportunity for Women in the Workplace for over a decade. Given the relative size and resourcing of the Company, it did not maintain formal measurable objectives or policies relating to diversity during the reporting period, therefore placing it outside of technical compliance with ASX Principles 3.2 and 3.3. In accordance with ASX Principle 3.4, the following proportional split of employees was recorded as at 31 March 2012: Category Directors Key Management Personnel Females Males Total 1 (25%) 1 (20%) 3 (75%) 4 (80%) 4 5 Employees 33 (17.5%) 156 (82.5%) 189 4. FINANCIAL REPORTING, AUDIT, GOVERNANCE AND RISK MANAGEMENT 4.1 The Audit, Risk & Governance Committee Infomedia has maintained an Audit Committee in various forms since the year 2000. The current Audit Committee continued to meet throughout FY2012. During FY2012, Ms Hernon vacated the role as Chairperson of the Committee. This role was ﬁ lled by Mr Geoff rey Henderson. The current composition of the Audit Committee meets all of the requirements contained in ASX Principle 4.2 on the basis that it: (a) consists only of non-executive directors; (b) consists of a majority of independent directors; (c) is chaired by an independent chair, who is not the chair of the board; and (d) has at least three members. The objectives of the Committee are clearly deﬁ ned within the Audit Committee’s Charter. A summary of the Audit Committee Charter is available via the Company’s website. 4.2 Independent auditors The current Audit Committee acknowledges the importance of external auditor independence and the rotation of not only responsible audit partners but also audit ﬁ rms. The appointment of BDO as auditors during FY2012, after many years of admirable service from the Company’s previous auditors, Ernst & Young, represents a commitment towards this objective. Additionally, the Committee has formalised procedures for the rotation of responsible audit partners from BDO on a regular basis. 4.3 Financial reporting obligations The Company’s ﬁ nancial reporting obligations for FY2012 were fulﬁ lled in accordance with applicable legal and accounting requirements. For further information, please refer to 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 Executive Chairman and the Chief Financial Offi cer have provided the Board with the necessary certiﬁ cations required pursuant to the Corporations Act 2001 (Cth) and the ASX Principles. 4.4 Risk Management Upon the recommendation of the Audit Committee, the Board adopted the Risk Management Policy in July 2004. Following a review by the Audit and Risk Committee during FY2006, a recommendation was made to the Board to adopt a revised Risk Management Policy and a Risk Management Plan. The revised plans promoted the establishment and implementation of a more eff ective and appropriate risk management framework for the Company. 72. INFOMEDIA.COM.AU CORPORATE GOVERNANCE The revised Risk Management Policy allocates oversight responsibility to the Board and the Audit 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. During the reporting period, both the Audit Committee and the Board received periodic presentations from management regarding strategies and procedures implemented by the Company to mitigate against signiﬁ cant risks to the business. In particular, the Audit Committee and the Board supervised the development of a formal Disaster Recovery Plan during FY2012 to ensure timely and accurate recovery of data and operations following an un-expected, sudden interruption to the normal operating environment. 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. 5. MARKET DISCLOSURE & SHAREHOLDER RIGHTS 5.1 Market disclosure During FY2004, the Board adopted a Market Disclosure Policy, developed in accordance with the ASX Principles. Internal reviews of the Market Disclosure Policy indicate that both the continuous and periodic reporting obligations imposed under the ASX Listing Rules, and the Company’s internal procedures, are well understood by senior management. Infomedia remains committed to providing relevant, timely and accurate information to the market regarding ﬁ nancial information, performance, ownership and governance. A summary of the Market Disclosure Policy can be found on the Company’s website. 5.2 Communicating with shareholders Through a series of initiatives, Infomedia continues to demonstrate its commitment to promoting eff ective communication with all shareholders. The Company continues to embrace and develop its online content delivery for shareholders via the Company website where the following documents are located: • • • • • • • this Corporate Governance Statement; summaries of the various corporate governance charters, policies and guidelines; annual, and half yearly reports; a synopsis of the Infomedia business model; media releases, achievements, share price information; relevant notices relating to members’ meetings; and the Company’s July 2000 Prospectus. Infomedia has considered and adopted, as appropriate to its circumstances, the various methods of electronic communications contemplated by the ASX Principles. 5.3 Shareholder participation Shareholder participation at general meetings is always encouraged. As usual, Infomedia’s independent auditor, BDO, will be present during the FY2012 Annual General Meeting, and will be available to answer shareholder questions at that time. 6. EXECUTIVE & NON-EXECUTIVE REMUNERATION 6.1 Infomedia’s remuneration and performance review policies Upon recommendation of the then Remuneration and Nomination Committee, the Board adopted a Remuneration and Performance Evaluation Policy (Remuneration Policy) for Directors and senior executives in July 2004. The Remuneration 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. Further, it aims to provide a framework for structuring total remuneration that: (a) facilitates both the short and long term growth and success of the Company; (b) implements a mixture of ﬁ xed, performance and equity based incentives; (c) is competitive with the market place; and INFOMEDIA.COM.AU 73. CORPORATE GOVERNANCE (d) which is demonstrably linked to the Company’s overall performance. The Company also has two equity based incentive plans: (a) an Employee Option Plan, applicable to certain eligible employees, including senior executives and executive Directors; and (b) 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 suspend the Employee Share Plan indeﬁ nitely. Further details of senior executive remuneration under the Employee Option Plan is included in the Remuneration Report. 6.2 Remuneration dichotomy – Executive versus Non-Executive The Remuneration Policy (refer paragraph 6.1 above) was formulated with regard to the best practice measures contained in the commentary to Principle 8 of the ASX Principles. The range of remuneration incentives available* to Executive and Non-Executive Directors and staff is summarised in the table below: Components of Executive Director Remuneration Components of Non-Executive Director Remuneration Components of Senior Executive and Staff Remuneration • Directors’ fees • Directors’ fees • Salary • Statutory Superannuation • Statutory Superannuation • Statutory Superannuation contributions • Incentive payments* • Share options* • Retirement beneﬁ ts* contributions contributions • Bonuses* • Share options* • Commissions* * Note – the listed incentives for each category are at the discretion of the Board. Diff ering combinations of remuneration and incentives are off ered on a case by case basis. 74. INFOMEDIA.COM.AU Top 20 Holdings as at 17-09-2012 Holder Name WISER EQUITY PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED YARRAGENE PTY LTD CITICORP NOMINEES PTY LIMITED EQUITAS NOMINEES PTY LIMITED <2874398 A/C> MR ANDREW PATTINSON SPANDOU INVESTMENTS PTY LTD NATIONAL NOMINEES LIMITED WISER EQUITY PTY LTD J P MORGAN NOMINEES AUSTRALIA LIMITED APPLIED SENSORS PTY LTD MR DAVID LEROY BOYLES MR PETER ALEXANDER BROWN THE EDUCATIONAL ADVANTAGE PTY LTD WISER CENTRE PTY LTD MR RICHARD GRAHAM ABN AMRO CLEARING SYDNEY NOMINEES PTY LTD 127 VICTORIA PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED-GSCO ECA SPORRAN LEAN PTY LTD Total IC ADDITIONAL INFORMATION Balance at 17-09-2012 % 100,277,501 26,752,933 23,421,589 10,166,280 2,586,599 2,447,567 2,400,000 1,315,323 1,186,841 1,175,401 1,000,000 1,000,000 1,000,000 1,000,000 1,000,000 926,559 821,391 700,000 651,000 649,828 180,478,812 303,276,855 33.065 8.821 7.723 3.352 0.853 0.807 0.791 0.434 0.391 0.388 0.330 0.330 0.330 0.330 0.330 0.306 0.271 0.231 0.215 0.214 59.512 Analysis of Holdings as at 17-09-2012 Security Classes Fully Paid Ordinary Shares Holdings Ranges Holders 1-1,000 1,001-5,000 5,001-10,000 10,001-100,000 100,001-9,999,999,999 Totals 367 1,607 1,106 2,085 216 5,381 Total Units 290,679 5,118,161 9,275,718 67,902,941 220,689,356 303,276,855 % 0.096 1.688 3.058 22.390 72.768 100.000 INFOMEDIA.COM.AU 75. CORPORATE DIRECTORY 357 Warringah Road Frenchs Forest NSW 2086 ABN 63 003 326 243 +61 (02) 9454 1500 +61 (02) 9454 1844 infomedia.com.au Richard Graham Geoff rey Henderson Frances Hernon Myer Herszberg Nick Georges Jonathan Pollard 357 Warringah Road Frenchs Forest NSW 2086 BDO Australia Level 10, 1 Margaret Street Sydney NSW 2000 Boardroom Pty Ltd Level 7, 207 Kent Street Sydney NSW 2000 Thomsons Lawyers Level 25 Australia Square Tower 264 George Street Sydney NSW 2000 Infomedia Ltd Telephone: Facsimile: Internet: Directors Company Secretary Chief Financial Offi cer Registered Offi ce Auditor Share Registry Lawyers 76. INFOMEDIA.COM.AU NOTES

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