ANNUAL REPORT
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ANNUAL REPORT
TABLE OF CONTENTS
CHAIRMAN'S REPORT
CEO'S REPORT
CUSTOMER PERSPECTIVE
DIRECTORS’ BIOGRAPHIES
DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
LEAD AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL REPORT
DIRECTORS’ DECLARATION
AUDIT REPORT
SHAREHOLDER INFORMATION
CORPORATE DIRECTORY
ABN: 63 003 326 243
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IBC
© 2016 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.
This Annual Report may contain forward looking statements.
Please refer to inside back cover for an explanation of forward
looking statements and the risks, uncertainties and assumptions
to which they are subject.
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INFOMEDIA
ANNUAL REPORT
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CHAIRMAN’S REPORT
INFOMEDIA
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place to step up to these challenges
and drive future growth.
FY16 FINANCIAL RESULTS
Infomedia reported revenue for the
year ended 30 June 2016 of $68m,
an increase of 13% on the previous
corresponding period (pcp).
Net profit after tax (NPAT) was
$10.3m for the same period, down
22% ($13.2m pcp) mainly as a
result of accelerated investment
into sales and product delivery
capacity to meet increased demand.
The financial position of Infomedia
remains strong with net current
assets of $13.2m at 30 June 2016
($13.9m in the pcp) including cash
and cash equivalents of $14.7m
($16.1m in the pcp). Infomedia carries
no debt.
The company’s improvement in
revenue growth will continue to
evolve as the benefits of structural
changes flow through to the top line.
The FY16 results are reflective
of the change in management
and focus during the year. Sales
momentum was sustained across
each region at about 5% in local
currency terms while expenses
grew as we made necessary
investments to lay the foundations
for future growth in revenue
and profitability.
Infomedia’s Board declared a fully
franked final dividend of 1.0 cents
per share. During the financial year
ended 30 June 2016, an unfranked
dividend of 1.65 cents was paid.
The total dividend for FY16 was
2.65 cents per share which is
within the dividend payout range
of 75%-85% of NPAT.
APPOINTMENT OF NEW
CHIEF EXECUTIVE OFFICER
The Infomedia Board executed a
number of important decisions
during the year as highlighted at
last year’s AGM.
As I indicated then, the
appointment of a new Chief
Executive Officer (CEO) was
a priority and we appointed
Jonathan Rubinsztein to the role
of CEO & Managing Director in
January 2016.
Jonathan’s appointment followed
an operational review, which I
covered in some detail at our
last AGM. That review helped
frame the Board’s requirements
for Infomedia’s incoming CEO,
including extensive experience
running a technology company
with a strong sales background
and a proven track record in
growing a business.
Jonathan was the founding
partner, director and CEO
of Red Rock Consulting from
the late 1990s until 2016. Red
Rock Consulting, the largest
independent provider of Oracle
products and services in Australia
and New Zealand, grew to more
than $130 million in annual revenue
under Jonathan’s leadership.
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Dear Fellow Shareholders,
On behalf of the Board, I would
like to thank you for your support
of Infomedia Ltd in the 2015/2016
Financial Year (FY16).
During the year, your company has
continued down a path of change
as it evolves from its inception in
the late 1990’s, as a founder-led,
electronic parts catalogue (EPC)
publishing business, to that of a
global, publicly listed software as a
service (SaaS) company.
It was a pivotal year for Infomedia.
The Board decided that the
Company needed new leadership
and as I flagged at our Annual
General Meeting last November,
we required increased investment
to better manage the development
backlog. It was also disappointing
that Jaguar Land Rover (JLR)
decided not to renew its electronic
parts catalogue contract with us
beyond December 2017.
On the other hand, Infomedia
achieved a number of milestones
this year including the
appointment of new executive
management and renewals of
contracts with our partners in
the global automotive industry.
We were particularly pleased to
welcome a new customer, Nissan
Europe, to our world-leading
Superservice product suite and
we look forward to a long and
successful relationship with this
leading automaker.
Overall, I am pleased to report
that your Board strongly believes
that we now have the leadership in
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I am delighted that Non-Executive
Director Bart Vogel has been
appointed as Chairman. Bart’s
skills and experience will serve
Infomedia well as your Company
looks to its next stage of growth.
Bart joined the Infomedia Board
in August 2015 and is a member
of Infomedia’s Audit & Risk
Committee and Remuneration
& Nominations Committee.
Bart brings a depth of commercial
experience from a range of
sectors including technology
and automotive.
Bart is also a Non-Executive
Director of Macquarie Telecom
Group Limited (ASX:MAQ); BAI
Communications Ltd; and
The Children’s Cancer Institute
of Australia.
Infomedia’s Board is in the process
of appointing an additional Non-
Executive Director with a skill set
that will complement those of the
existing Directors.
I am leaving Infomedia feeling
positive about its future. I have
valued my involvement with the
Company. I have come to know
and appreciate the commitment
and passion of Infomedia’s
employees. The people and the
products are the heart of your
company and Infomedia has never
been in a better position to realise
its potential and deliver against its
commitment to growth.
I thank you for my time on the
Board and your continued support
of Infomedia. I would like to take
this opportunity to acknowledge
the support of my fellow Directors,
which I have appreciated. I leave
wishing the Board, the leadership
team and all Infomedia employees
every possible success.
Fran Hernon
Chairman
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“
Infomedia Ltd
announced
revenue for
the year ended
30 June 2016
of $68m, an
increase of 13%
“
In his short time at Infomedia,
Jonathan and his leadership team
have taken substantial steps in
driving Infomedia towards its
future growth as a SaaS company.
In May 2016, Jonathan completed
a full strategic review of
Infomedia’s operations and
organisational capabilities
culminating in a commitment to
improve in five key areas, which he
covers in some detail in the CEO
Report that follows.
The Infomedia Board is fully
supportive of these initiatives
and we are convinced that
they will result in the company
continuing to deliver strong
underlying revenue growth in
the high single digits, in line with
industry growth rates.
NEW CHIEF
FINANCIAL OFFICER
In March, Infomedia appointed
Richard Leon as Chief Financial
Officer (CFO). Richard brings
significant depth to the role
having previously been the CFO
of electronics design software
company Altium Ltd from 2008
to 2015. Prior to 2008, Richard
was the Regional Finance Director
Asia Pacific for US-listed MRO
Software, an IBM company.
Richard has made a positive
difference to Infomedia since joining.
BOARD RENEWAL
In November last year, I also indicated
that there would be a managed
transformation of Infomedia’s Board
of Directors as part of our succession
and renewal strategy.
Following the successful transition
to our new CEO and CFO, I
announced in August 2016 I would
resign from the Infomedia Board
effective 30 September 2016.
I am pleased the Company has
turned a corner and I am confident
the new leadership team will work
with the Board to build Infomedia
into a more profitable and
focussed organisation. I have been
honoured to serve on Infomedia’s
Board for more than 15 years, the
last two and a half as Chairman.
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CEO’S REPORT
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leading software providing
efficient parts data directly
from the manufacturer to the
dealer network. Increasingly, the
information that is built into our
EPC, is accessed immediately by
the parts and service managers
within dealerships via cloud
technology.
Infomedia’s Superservice software
improves the productivity and
profitability of the service
processes within a dealership. The
timely information and transparent
workflow provided to vehicle
owners gives them confidence in
the work being carried out.
Since joining Infomedia in the
second half of FY16, my focus has
been on improving the delivery of
our products to customers and
increasing sales capacity in the
regions in which we operate to
establish Infomedia as a business
that delivers longterm sustainable
growth for our shareholders.
OPERATIONAL PERFORMANCE
Since March, the leadership team
and I have been forging a new path
in the Company’s evolution with
the full support of the Board.
Historically, Infomedia was seen
as a publishing business providing
critical parts information to the
dealerships of global automakers.
Today, our parts and service
software is sold as a subscription
and distributed online. Our
products are recognised as
market leading amongst global
automakers and we are seeing
increased demand for our products
in all regions.
During the latter half of the
FY16, Infomedia took steps to
ensure that the foundations of
the business were steadied for
growth in order to pursue those
opportunities and meet demand.
In May, I outlined a number of
strategies to achieve our business
objectives over the next 12 months.
The five key areas we identified for
improvement in the 2017 financial
year (FY17) are:
1. Simplify the business
2. Drive sales performance
3. Prioritise delivery
4. Align culture to growth
5. Provide transparency
The first of these measures
saw the leadership team set
about reducing the complexities
in our business by simplifying
our structures, establishing
some consistent practices and
consolidating our processes.
As a result, we have centralised a
number of support functions and
integrated technology to improve
efficiencies. This has resulted
in improvements in our delivery
execution. These initiatives will
continue throughout FY17.
The second area of focus for
Infomedia’s leadership team was
driving sales performance. We have
reprioritised our efforts around two
core markets, parts and service,
within the global automotive
industry, to bring our organisation
closer to the customer.
The Company has elevated the
responsibility and accountability
for revenue growth to a wider
group of individuals beyond the
sales team. Key to driving sales
performance was the appointment
of Vice-Presidents of Product for
EPC, Superservice Menus and
Superservice Triage.
The product teams headed by
these individuals have clear
and measurable objectives to
ensure better results for our
customers and to leverage global
opportunities across regions.
We have a very strong pipeline
across all regions, the Americas,
Europe and Asia Pacific. We
continue to see the renewal of
existing contracts and we secured
several contract wins, including
Nissan Europe, which was the
largest in the period.
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I am pleased to deliver Infomedia
Ltd’s 2016 Financial Year Annual
Report, my first since joining the
company as CEO & Managing
Director in March 2016.
The 2016 Financial Year (FY16) was
a period of significant change for
Infomedia.
Infomedia is in an enviable position
with a track record of profits
and cash generation. Our market
capitalisation is around A$200
million. We are headquartered
in Sydney, Australia and produce
market leading parts and service
software for the global automotive
industry.
More than 80 percent of
Infomedia’s revenue is derived
outside of Australia from an
industry that exceeds US$2 trillion.
Infomedia’s products support the
needs of our customers, the global
automotive manufacturers, their
dealership networks and vehicle
owners. Our products use genuine
automaker data to empower parts
and service professionals with
precision identification of models,
parts and service information.
Infomedia’s technology is an
enabler that drives improvement in
dealership productivity, an increase
in sales in parts and service, and
growth in customer loyalty to the
manufacturer brand.
More than half of Infomedia’s
revenue flows from our electronic
parts catalogue (EPC) product.
Infomedia’s EPC is market
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ANNUAL REPORT
“
More than 80
percent of
Infomedia’s
revenue is
derived outside
of Australia…“
We have also expanded sales
coverage in Europe and the Asia
Pacific with industry partners.
Combined, these initiatives
support Infomedia to drive revenue
growth to be in line with the
industry growth rate of high single
digits for FY17. We believe this is
achievable despite the decision
by Jaguar Land Rover (JLR) not
to extend their contract for EPC
beyond December 2017.
As the rate of technology
accelerates, so too does
Infomedia’s need to ensure our
delivery systems can support the
present needs of our customers
and the demand of future
growth. We have prioritised our
approach to delivery and invested
in technology as a direct response
to customers wanting more
integration at a platform level.
Execution is pivotal to our ability to
deliver for our customers and as a
result the third area of focus for the
leadership team is to prioritise
delivery.
We have taken steps in the period
to scale our development to
deliver more efficiently and create
a more agile structure that is
aligned to delivery outcomes for our
customers. In June, we completed
and certified our integration with
Dealer Management System (DMS)
group Reynolds and Reynolds.
driven and values autonomy
and accountability. The revised
employee incentive scheme
introduced in July aligns individual
performance directly to the
longterm sustainable growth of
the Company with a focus on both
attracting and retaining skilled and
valued employees.
During the year, we also undertook
offshoring arrangements to
assist with non-critical activity
to efficiently work through a
development backlog. Infomedia
will continue to utilise offshoring
for some areas to accommodate
scaling up or down to meet
demand and realise opportunity.
The fourth area of focus for
Infomedia’s leadership team,
during the second half of FY16,
was to align our values to growth
and we introduced performance
measurement and accountability
at every level.
Infomedia’s leadership team has
taken a number of steps to create
a culture that is performance
These initiatives align with
and are governed by our fifth
objective which is to provide
better transparency. Through the
introduction of simple and aligned
structures, measures linking
growth and accountability, and
leadership change, we will continue
to improve how we communicate
with employees, partners,
customers and shareholders.
Beyond these initiatives, Infomedia
will look at a number of strategic
opportunities for further growth. As
part of our overall strategy, we may
consider new product enhancements,
leveraging existing intellectual
property, structures and processes,
or opportunities for acquisition.
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LEADERSHIP CHANGES
OUTLOOK
I would like to thank Infomedia’s
outgoing Chairman, Fran
Hernon, for her guidance and
support during the year. Fran has
performed remarkably in what
has at times been an unsettled
and challenging period. I would like
to thank Fran for the enormous
opportunity to drive leadership
at Infomedia. I am humbled
and unreservedly committed to
delivering growth for Infomedia’s
shareholders.
In March 2016, we welcomed
Richard Leon as Chief Financial
Officer. Richard brings nearly 10
years’ experience as a publicly
listed company CFO to Infomedia’s
leadership team. He is widely
well regarded and has made an
outstanding contribution in his
few short months in the role. I am
confident he will make a lasting
and positive contribution to
Infomedia in the years to come.
We estimate our revenue growth
rate for FY17 to be in the high
single digits, in line with our
assessment of the industry growth
rate. This is a modest improvement
over the last three years when
revenue growth was less than 5
percent year on year in real terms.
The Company will continue
to invest in the five key areas
outlined above to ensure long term
sustainable growth. Investment
levels will be carefully managed to
remain below the rate of revenue
growth and balanced against the
time lag that exists between a
contract win and realising the flow
to the first subscription level.
Demand for Infomedia’s products
is strong. We have demonstrated
our ability to continue to win
new contracts as evidenced with
the most recent and largest
contract win signed with Nissan
Europe. Further progress has been
delivered in completing integration
with our DMS partners and extending
partnerships in other areas.
INFOMEDIA
ANNUAL REPORT
We are also investing in market
leading product enhancements
within Superservice Menus and
Superservice Triage.
The leadership team is encouraged
with the progress made on the
Company’s delivery capability and
remains confident in our ability to
continue to deliver growth. There
are a number of opportunities in
the pipeline, though further work
is required in each of the five key
areas through the remainder
of FY17.
Beyond FY17, the Company will
continue to focus on organic
growth through new product
enhancements which should
increase our growth rate beyond
the industry growth rate and extend
our reach in the global industry.
Jonathan Rubinsztein
Chief Executive Officer
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TOYOTA OF GLENDORA BOOSTS
SERVICE PERFORMANCE
WITH SUPERSERVICE
Superservice increases productivity and service sales,
provides intuitive functionality and enhances customer
satisfaction for Toyota of Glendora, CA, USA.
Situated in the car-capital of sunny southern California, just down the
road from Los Angeles, Toyota of Glendora knows a lot about selling and
servicing automobiles. To optimise the efficiency and performance of
its service department, Toyota of Glendora chose Superservice Menus
Quoting and Inspection as its service management system. Toyota of
Glendora is a midsize, family-owned dealership that prides itself on
quality customer service and genuine client satisfaction. It has been
a Toyota President Award Winner for Excellence for 12 years.
“We switched to Superservice because our old system performed poorly
and didn’t give us the information we needed,” says Bob Lanyi, General
Manager of Toyota of Glendora. “Superservice is easy to use, it has
improved our service process and it provides valuable management
information. It’s made a huge difference. We’re selling 30%-45% of
recommended service.”
“The menu-driven system is really impressive,” continues Lanyi. “It
simplifies the process and helps our techs service our customers better.
They love it. For example, they can pre-pull all the necessary parts and
spend less time at the back counter. It recommends all the parts they
may need. And customers don’t have to wait as long for their multi-point
inspection (MPI), their estimates and to get their cars back. It saves
everyone a lot of time.”
With Superservice, we’re selling
“
30%-45%
of recommended service.
That’s a big increase that has a
real impact on our bottom line.
— Bob Lanyi, General Manager,
Toyota of Glendora, CA
“
BETTER DATA, BETTER INFORMATION, BETTER MANAGEMENT
“Another great feature is that Superservice utilizes real-time, direct
access VIN-specific manufacturer (OEM) data,” says Lanyi. “That’s
important because we get the most accurate, up-to-date information,
which prevents mistakes and keeps our service department running
smoothly. Superservice doesn’t just display data. It gives us management
information, and it does it in a clear, intuitive way.”
BUILDING RELATIONSHIPS
“There’s no doubt that Superservice is helping us grow customer
satisfaction and loyalty by making the service experience better,” says
Lanyi. “It’s simpler, faster and easier to understand. The relationship
we have with Infomedia helps a lot. They’ve gone the extra mile from
installation and training to ongoing support.”
THE BOTTOM LINE
“Superservice has become an invaluable part of our service department,”
says Lanyi. “We’ve increased our parts sales around 20%. We’re selling
30%-45% of recommended service. Our department is running more
smoothly and our productivity is up. It’s a great product that does
what it promises and a lot more.”
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VAN HORN HYUNDAI LEADS
THE WAY WITH SUPERSERVICE
Next-generation technology, powerful information management
features and easy-to-use functionality deliver success for
Van Horn Hyundai in Wisconsin, USA.
Van Horn Hyundai is a mid-America dealership that has been serving the
community in and around Fond du Lac, Wisconsin, for over half a century.
While traditional, family-owned values are the basis of the dealership,
Van Horn understands the importance of utilising cutting-edge
technology to optimally serve its customers, maintain excellent Hyundai
Service Index (HSI) ratings and staying ahead of the competition. That’s
why Van Horn chose Superservice for its fixed operations repair, quoting,
and electronic multi-point inspection (MPI) system.
“As we looked ahead, it was clear to us where the world is going, and
we wanted to stay ahead of the game,” says Chad Jaschob, Fixed Ops
Director, Van Horn Hyundai. “That’s one of the big reasons why we
decided to go with Superservice. It takes us to the next level in service
and parts management.”
“More and more of our customers are used to using tablets and other
mobile devices for just about everything,” continues Jaschob. “When we
pull up the MPIs on an iPad, show them photos and zoom in on details,
they get it. It’s cleaner, more understandable and very professional.
It also helps us successfully follow up on previously declined service,
which is boosting sales a lot.”
BETTER, MORE ACCURATE INFORMATION
“All of the service and repair information is preloaded and automatically
processed, so we don’t have to figure it out,” says Jaschob. “It’s not
only faster, but it also eliminates a lot of pricing issues. Customers like
and trust the complete cost breakdown, which makes it easier to get
sign-offs on repairs. A lot of times, we can share full inspection results
including photographic evidence and to-the-penny accurate pricing
through email, which is really nice.”
EASY TO USE, GREAT SUPPORT
“Our service advisors, parts counter people and techs really like it because
it’s so easy to use,” says Jaschob. “In addition to improving our workflow
the reports are good for identifying trends and tracking improvement.
And the Superservice installation and support team is excellent.
They are there when we need them and they get us quick answers,
though we really haven’t had to call on them much.”
THE BOTTOM LINE
“Superservice is absolutely worth getting,” says Jaschob. “It increases
business, shows professionalism to customers and it has helped us
maintain a top HSI rating. It’s an important part of how we are
making our service department better.”
“Superservice has
significantly
increased
our sales
on previously
declined service.
— Chad Jaschob, Fixed Ops Director,
Van Horn Hyundai, Fond du Lac, WI
“
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2016 FINANCIAL REPORT CONTENTS
FINANCIAL STATEMENTS
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
NOTES TO THE FINANCIAL STATEMENTS
About this report
Note 1. General information
Note 2. Critical accounting judgements, estimates and assumptions
Business performance
Note 3. Operating segments
Note 4. Earnings per share
Note 5. Dividends
Note 6. Taxation
Significant operating assets and liabilities
Note 7. Intangible assets
Note 8. Trade receivables
Capital and financial risk management matters
Note 9. Notes to the statement of changes in equity and reserves
Note 10. Risk management and financial instruments
Note 11. Contingencies
Note 12. Commitments
Note 13. Events after the reporting period
Group structure
Note 14. Subsidiaries
Additional information and disclosures required by Accounting Standards
Note 15. Profit and loss information
Note 16. Property, plant and equipment
Note 17. Current liabilities – provision for employee entitlements
Note 18. Share based remuneration
Note 19. Notes to the statement of cash flows
Note 20. Related party transactions
Note 21. Parent entity information
Note 22. Remuneration of auditors
Note 23. Other significant accounting policies
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Fran Hernon
Jonathan Rubinsztein
Clyde McConaghy
Anne O’Driscoll
Bart Vogel
FRAN HERNON MAICD
Independent Non-Executive Chairman
Fran Hernon joined the Infomedia Board of Directors in
June 2000 and was appointed Chairman of Infomedia in
February 2014. Ms Hernon served on the Remuneration &
Nominations Committee and also served the Board as Lead
Non-Executive Director for all governance matters.
Ms Hernon has extensive experience in media, publishing,
marketing and technology. She has held senior editorial
positions at News Ltd, Murdoch Magazines and the NRMA
and was a member of the executive team at Channel Ten
and Senior Account Manager, Group IT&T for the Insurance
Australia Group (ASX:IAG). Ms Hernon was Corporate
Affairs Manager for Nestlè in Australia for nine years.
CLYDE MCCONAGHY BBus, MBA, FAICD
Independent Non-Executive Director
Clyde McConaghy was appointed to the Infomedia Board
of Directors on 1 November 2013. Mr McConaghy serves as
chair of the Remuneration & Nominations Committee and as
a member of the Audit & Risk Committee.
Mr McConaghy has in excess of 15 years’ experience as a
senior international board director and executive of publicly
listed and private companies. His experience encompasses
both multinational and early stage companies, in the
technology, media and publishing, and venture capital
sectors. He also held a number of senior positions within
BMW Australia.
Mr McConaghy was a director in The Economist Intelligence
Unit in London and a founding director of World Markets
Research Centre Plc (LSX:WMRC), both including
Automotive industry analysis divisions. He is currently a
director of Serko (NZX:SKO). He is also Managing Director
of Optima Boards, a Board advisory firm for companies and
non-for-profit entities worldwide.
JONATHAN RUBINSZTEIN BCom (Hons), MBA, FAICD
Chief Executive Officer (CEO) & Managing Director
Jonathan Rubinsztein commenced his appointment as CEO
& Managing Director on the Board of Infomedia in March
2016. Mr Rubinsztein has a proven track record of leading
high performance teams in the technology sector.
Mr Rubinsztein was a founding partner, CEO and
shareholder of UXC Red Rock Consulting. He also served as
a founding Director of RockSolid SQL, a private technology
company specialising in automated data management
solutions. He has been involved in a number of Private Equity
Investments in the global technology sector and is also on
the Advisory board of the Missionvale charity based in Port
Elizabeth, South Africa.
Mr Rubinsztein has been a guest lecturer at the University
of Sydney Business School and a regular participant at TED
(Technology, Entertainment and Design) conferences. Mr
Rubinsztein was awarded the IT Professional of the Year
2013 (AIIA award NSW).
ANNE O’DRISCOLL FCA, GAICD, ANZIIF (Fellow)
Independent Non-Executive Director
Ms O’Driscoll was appointed to the Infomedia Board of
Directors on 15 December 2014. Ms O’Driscoll serves as chair
of the Audit & Risk Committee. Ms O’Driscoll has over 30
years of business experience, having qualified as a chartered
accountant in 1984. She was CFO of Genworth Australia
from 2009 to 2012 and spent over 13 years with Insurance
Australia Group (ASX:IAG).
Ms O’Driscoll is on the boards of Commonwealth Bank’s
(ASX:CBA) insurance subsidiaries (CommInsure), Steadfast
Group Limited (ASX:SDF) and MDA National Insurance Pty Ltd.
BART VOGEL BCOM (Hons), FCA, GAICD
Independent Non-Executive Director
Mr Vogel joined the Infomedia Board on 31 August 2015. He
serves on the Audit & Risk Committee and Remuneration &
Nominations Committee.
Mr Vogel is also a director of Macquarie Telecom Group
Limited (ASX:MAQ), BAI Communications Ltd and the
Children’s Cancer Institute Australia. He has had extensive
commercial experience from a range of sectors including
telecommunications, information technology and business
services. His executive career included CEO roles with
Asurion Australia and Lucent Technologies (Australia and
Asia Pacific), Computer Power Group, and over 20 years in
the management consulting industry as a partner with Bain
& Company, A.T. Kearney and Deloitte.
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INFOMEDIA ANNUAL REPORT Infomedia Ltd
Directors’ Report
The Directors present their report, together with the consolidated financial statements of Infomedia Ltd (referred to
hereafter as Infomedia or the Company) and its subsidiaries (Infomedia Group or the Group) for the financial year ended
30 June 2016, along with the auditor’s report.
DIRECTORS
The Directors of the Company at any time during or since the end of the financial year are listed below. Directors were in
office for the entire period unless otherwise stated.
Name
CHAIRMAN
Fran Hernon
CHIEF EXECUTIVE OFFICER & MANAGING DIRECTOR
Jonathan Rubinsztein
OTHER DIRECTORS
Clyde McConaghy
Anne O’Driscoll
Bart Vogel
FORMER DIRECTORS
Andrew Pattinson
Myer Herszberg
Date of appointment/resignation
Appointed 19 June 2000
Appointed 14 March 2016
Appointed 1 November 2013
Appointed 15 December 2014
Appointed 31 August 2015
Resigned 22 August 2015
Retired 31 August 2015
Directorships of other listed companies
Directorships of other listed companies held by the Directors in the three years preceding the end of the financial year are as follows:
Name
Fran Hernon
Jonathan Rubinsztein
Clyde McConaghy
Anne O’Driscoll
Bart Vogel
Company
None
None
Serko (NZX)
Period of directorship
Since 2014
Integrated Research (ASX)
From 2007 to 2014
Steadfast Group Limited
Macquarie Telecom Ltd
Sedgman Ltd
Since 2013
Since 2014
From 2014 to 2015
Particulars of the Directors’ qualifications and experience are set out under Board of Directors on page 13.
COMPANY SECRETARIES
Nick Georges BA, LLB
Mr Georges is a qualified lawyer, admitted to the Supreme Courts of Victoria in 1991 and New South Wales in 1999. Prior to
joining Infomedia in 1999, Mr Georges worked in general practice as a solicitor in Victoria and was an executive with Altium
Limited (ASX:ALU).
Daniel Wall BBA, LLB
Mr Wall is a lawyer, admitted to the Supreme Court of New South Wales and the High Court of Australia in 2007. He
gained experience across a range of practice areas including finance, corporate restructuring and insolvency, prior to joining
Infomedia in 2011. He also holds a Certificate in Governance Practice from the Governance Institute of Australia.
14
INFOMEDIA ANNUAL REPORT DIRECTORS’ MEETINGS
The number of Directors’ meetings (including committee meetings) and number of meetings attended by each of the
Directors of the Company during the financial year were as follows:
Board
Audit & Risk Committee
Remuneration &
Nominations Committee(b)
Eligible to
attend
Attended
Eligible to
attend
Attended
Eligible to
attend
Attended
13
13
11
13
4
2
2
13
13
13
11
13
4
1
2
-
5
3
5
-
-
2
5
-
5
3
5
-
-
2
4
-
3
4
-
-
1
4
4
-
3
4
-
-
1
Director
Fran Hernon
Anne O’Driscoll
Bart Vogel
Clyde McConaghy
Jonathan Rubinsztein
Andrew Pattinson
Myer Herszberg
Total meetings held
Table note
(a) The Audit & Risk Committee is chaired by Ms O’Driscoll.
(b) The Remuneration & Nominations Committee is chaired by Mr McConaghy.
PRINCIPAL ACTIVITIES
Infomedia Ltd is a global technology company, incorporated in New South Wales and listed on the Australian Securities
Exchange (ASX:IFM). The Company is headquartered in Sydney, Australia with regional offices in Australia, Europe and The
Americas, serving the Group’s customers across the world.
The principal activities of entities within the Group during the financial year were:
• development and supply of Software as a Service (SaaS) offerings, including electronic parts catalogues and service
quoting software systems, for the parts and service sectors of the global automotive industry; and
• information management, analysis and data creation for the domestic automotive and oil industries.
There have been no significant changes in the nature of these activities during the financial year.
OPERATING AND FINANCIAL REVIEW
All regions contributed to revenue growth resulting in reported revenue growing 12.8% to $68.087 million for the year ended
30 June 2016.
Net profit after tax (NPAT) resulted in $10.323 million a decline of 22% from the previous corresponding period as a result of
accelerated investment into product development and building sales and marketing teams. Further, one-off items as well as
hedging losses of $1.583 million contributed to the NPAT decline.
A summary of the results is shown below:
Revenue (a)
NPAT
Earnings per share (cents)
Dividend per share (cents), excluding special dividend
2016
$’000
68,087
10,323
3.33
2.65
2015
$’000
60,385
13,232
4.30
3.64
Movement
%
12.8
(22.0)
(22.5)
(27.2)
15
INFOMEDIA ANNUAL REPORT Directors’ Report continued
(a) Revenue details:
By geographical location
Asia Pacific
EMEA
Americas
Revenue
2016
$’000
15,749
30,297
22,041
68,087
2015
$’000
14,882
27,252
18,251
60,385
Movement
$’000
867
3,045
3,790
7,702
The financial position of the Group remains strong with net current assets of $13.213 million as at 30 June 2016 (2015: $13.919
million) including cash and cash equivalents of $14.748 million (2015: $16.092 million). The Group carries no debt.
Net cash from operations declined mainly due to increased investment in product development costs, investment in sales and
marketing, as well as costs associated with closing out hedge contracts.
BUSINESS OBJECTIVES, STRATEGY AND PROSPECTS
The following sections provide a broad overview of the Company’s objectives, strategies and progress for the financial year
ended 30 June 2016. The Company strives to balance an appropriate level of disclosure with protection of its legitimate
commercial interests and those of its customers. Accordingly, the Company does not disclose details regarding specific
operational goals and objectives as such disclosure would be prejudicial to the Company in terms of competitive positioning,
or where it would constitute a breach of the Company’s obligations of confidentiality to third parties. To the extent the
Company does not disclose specific details, it relies on the exception in section 299A(3) of the Corporations Act 2001.
A. BUSINESS OBJECTIVES
Infomedia is a Software as a Service (SaaS) provider to the parts and service sectors of the global automobile industry. Our
focus is assisting our global automotive partners to drive productivity and profitability through their distributor and dealer
channels (our customers).
The Company strives to deliver sustainable, long-term performance for our shareholders by focusing on core strategic plans
and objectives values including:
• Accelerating performance: Infomedia is a global organisation supporting global customers to drive efficiencies and increase
revenue in their own businesses. In doing so, Infomedia aims to meet anticipated increases in demand and develop highly
scalable networks to create market leading SaaS products and services for our partners, clients and customers.
• Driving innovation and service: Infomedia is committed to delivering innovative software products and services. We believe
investment into ongoing product research and development efforts is essential to remain abreast of the ever evolving
requirements of our customer base both in the immediate and the longer term. Innovation powers our service software and
assists our clients to serve their customers quickly and efficiently.
• Thinking global, acting local: Infomedia seeks to identify and capitalise on new and emerging trends. We have a strong
presence in North America, Europe and the Asian Pacific markets. We anticipate growth opportunities over the next
decade, as the rate of technology adoption increases, in new and emerging markets throughout Asia, the Middle East and
Latin and South America. Our diverse employee demographic enables Infomedia to engage with global customers at a local
level to both develop and maintain long standing relationships with approximately 40 global automakers and their partners
and dealers.
The Company seeks to leverage its current financial position while also delivering targeted growth in line with its medium
to longer term objectives. Growth is pursued in accordance with appropriate risk appetites and is balanced against ongoing
delivery of tangible shareholder returns.
16
INFOMEDIA ANNUAL REPORT B. STRATEGIES
In May 2016, the Company outlined a number of strategies relevant to achievement of its business objectives in the near
term, essentially the financial year ending 30 June 2017 (FY17), including:
Our commitment to change and growth
5 Point Plan
Progress
Outcome
Simplify the
business
Drive sales
performance
• Centralised support functions
• Laying solid foundation for future growth
• Integrated technology
• Area of continued focus throughout FY17
• Focus on two core markets, Parts and Service
• Strong pipeline across all three regions
within the global automotive industry
• Several contract wins including Nissan Europe
• Appointment of senior product teams with clear
and measurable objectives
• Expanding global sales coverage with additional
• Driving revenue growth to be in line with
industry growth rate of high single digits for
FY17
industry partners
• Area of continued focus throughout FY17
Prioritise delivery • Integration completed with a number of leading
• Scalable model
dealer management systems (DMS)
• Offshoring non-critical development activity
• Deployed end to end structure integration to
• Customer focused to support the productivity
and profitability of dealer and distributor
businesses
dealership platforms
• Increased development capacity, including
• Area of continued focus throughout FY17
offshoring activities
Align culture to
growth
• Revised structure to align product to customer
• Introduction of performance culture and clear
• Introduction of revised employee incentive
program linking accountability and performance to
sustainable growth
accountability at every level
• Management aligned around a new set of core
values
• Area of continued focus throughout FY17
• Build a high performance team
Provide
transparency
• Leadership change
• Steps taken to improve how we communicate with
employees, partners, customers and shareholders
• Ongoing commitment
• Clear strategy to engage with employees,
partners, customers and shareholders
Infomedia also identified a number of strategic opportunities for growth over the medium term, next two years, which included:
• organic growth through new product enhancements;
• adjacencies or leveraging existing information; and
• potential merger and acquisition opportunities.
17
INFOMEDIA ANNUAL REPORT Directors’ Report continued
C. REVIEW OF OPERATIONS
Since the appointment of a new Chief Executive Officer, Jonathan Rubinsztein, and new Chief Financial Officer, Richard
Leon, in March this financial year, Infomedia has been forging a new path in its evolution.
Historically, Infomedia marketed itself and was seen as a publishing business, providing critical parts information to the
dealers and distributors of global automakers to aid the service experiences of their customers.
As Infomedia grew, the technology that underpins its business also evolved. Today the parts and service products are sold as
SaaS offerings and are generally distributed via cloud technology. The products are recognised as market leading in content
and useability amongst global automakers. The Company’s products are tailored to each contract win. Every contract
requires modified data input and systems builds that are difficult to replicate.
The Company sees opportunity for Infomedia’s business as the demand for its products continues to grow. To meet this
demand required additional investment in sales capacity and product delivery capacity.
The Company’s new leadership team conducted a thorough review of all of Infomedia’s systems and processes. During the
second half of FY16, the Company took a number of steps to simplify its structures including centralising support functions
resulting in execution improvements. The Company has also prioritised its approach to delivery and invested in technology as a
direct response to customers wanting more integration at a platform level. Product managers have been appointed to support
sales performance and ensure better results for Infomedia customers and leverage global opportunities across regions.
Integration with Dealer Management Systems (DMS) is an integral part of the Company’s value proposition as a key
differentiator. During FY16, Infomedia completed integration with a number of leading DMS providers and has a program
of works to complete more. The Company has also signed reseller agreements in all regions with industry partners. Working
with these partners, Infomedia can extend its reach and expand its end to end service continuum for its customers.
The Company has increasingly focussed on aligning its offerings with its customers’ needs, and has concluded a number of
contract wins, most notably with Nissan Europe.
During FY16, Infomedia identified a need to enhance its delivery capabilities. As a result, the Company increased its development
capacity which included offshoring activities. This allowed it to better manage its development backlog. Infomedia will continue
to utilise offshoring for some areas to accommodate scaling up or down to meet demand and realise opportunity.
The Company has taken a number of steps to create a culture that is performance driven and values autonomy and
accountability. The Company introduced revised incentive arrangements for management that align individual performance
directly to the long term sustainable growth of Infomedia.
D. OUTLOOK
The Company believes that ongoing demand for the Company’s products will continue to deliver growth in revenue and profit
during FY17.
Infomedia estimates its revenue growth rate for FY17 to be in the high single digits in line with its assessment of the industry
growth rate. The key sensitivities to reported revenue growth are foreign exchange rates and the revenue impact of major
contract movements. This is a modest improvement on Infomedia’s year on year revenue growth over the last three years
that averaged less than 5% in real terms.
The Company will continue to invest in the five-point plan outlined above to ensure long term sustainable growth. Investment
levels will be managed carefully and at a lower rate than revenue growth to deliver improved margins in FY17 and beyond.
The Company continues to see demand for its products, with the most recent and largest contract win signed with Nissan
Europe. Infomedia’s strong current pipeline is built upon its integrated, customer driven product roadmap that is expected to
result in new contract wins in FY17.
The Directors are encouraged with the progress made during FY16 which provides an improved foundation for future growth
and shareholder value.
18
INFOMEDIA ANNUAL REPORT RISKS
In seeking to achieve its strategic goals, Infomedia is subject to a number of risks which may adversely affect operating and
financial performance materially. The Company adopts a rigorous risk management process which is an integral part of
the Company’s corporate governance structure but some risks are outside Infomedia’s control. Some of the key risks (in no
particular order and non-exhaustively) include:
Risk
Description
Risk management strategies
Loss of
key licence
agreements
Loss of key
customers
• Continued access to Original Equipment
• Management of key account relationships
Manufacturer (OEM) parts information is
integral to several of the Company’s product lines
• Continued investment to sustain market leading
products
• Customer service focus, including working with
customers to modify offerings to meet their needs
• The relatively concentrated automotive industry
• Management of key account relationships
leads to a degree of revenue concentration
• Continuing focus on identification of new OEM
licence agreements to reduce concentration
• Participation in industry forums and other
marketing opportunities to ensure prominent
industry positioning
• Adding value to the customer solutions in order
to remain as a technology of choice.
Competitive risk
• Risk from existing and new market entrants
• Focus on client satisfaction via continuous
improvements in delivery of high-speed, high
uptime solutions with evolving feature sets with
intrinsic value propositions
• Leveraging accrued experience and capability in
the sector with a global reputation as a leading
solutions provider in the parts space
• Regional directors charged with maintaining key
relationships with OEM clientele and maintaining
a watching
Product
obsolescence or
substitution
Intellectual
property risk
• Products do not keep pace with developments in
market needs or technological advancements
• Close monitoring of market developments and
direction and OEM strategies
• Competitors or OEMs may develop superior
• Continued investment in research and
products
development to sustain market leading position
• Protecting data integrity and data privacy
• Network and product structuring and monitoring
to identify and limit unauthorised access
• Legal restraints
• Migration from disc based products
People risk
• Loss of key executives
• Multiple touch points with key customers as part
• Loss of key customer relationships
of relationship management
Back office
infrastructure
failure
• Back office facilities and systems inadequate
for the future development and needs of the
business
• Appropriate incentives and career development
opportunities for key executives and senior
management
• Identification and management of high potential
employees
• Close monitoring of current systems by
experienced programmers and users
• Investment in new financial and customer
management system
19
INFOMEDIA ANNUAL REPORT Directors’ Report continued
DIVIDENDS
Details of dividends paid or declared by the Company during FY16 are set out in Note 5.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Group during and since the financial year ended 30 June 2016.
SIGNIFICANT EVENTS SUBSEQUENT TO REPORTING DATE
Other than matters listed below, there have been no matters or circumstances that have significantly affected, or may
significantly affect the operations, results or state of affairs of the Group since the end of the financial year:
• the Board declared a final dividend of 1.00 cents per share, fully franked;
• the Company granted 2,254,369 performance rights and 5,750,000 share options as part of its long term incentive (LTI)
plan for the key management personnel, ie the Executive Team. The LTI represents an allocation for a member of the
Executive Team for FY17, and a three year allocation for the CEO and CFO spanning FY17, FY18 and FY19 performance
periods. Further details on the grants are provided in section G.II and G.III in the Remuneration Report.
CORPORATE GOVERNANCE
Infomedia strives to achieve compliance with the governance recommendations set out in the Corporate Governance
Principles and Recommendations 3rd Edition, published by the ASX Corporate Governance Council (the ASX Principles).
The Company addresses the ASX Principles in a manner consistent with its relative size and resourcing capabilities.
Infomedia’s latest Corporate Governance Statement was lodged with the ASX on the same date as this report and
is available on the Company’s website, http://www.infomedia.com.au/investors/corporate-governance/
ENVIRONMENTAL REGULATION
The Group’s operations are not subject to any particular and significant environmental regulation under a law of the
Commonwealth or of a State or Territory legislation.
SHARE OPTIONS
I. UNISSUED SHARES
At the date of this report, there were 6,626,667 unissued ordinary shares under options.
II. SHARES ISSUED AS A RESULT OF THE EXERCISE OF OPTIONS
There were 746,667 shares issued as a result of the exercise of options during the financial year.
Since the end of the financial year, there have been no options exercised.
INDEMNIFICATION AND INSURANCE OF OFFICERS
During the year the Company paid a premium in relation to insuring Directors and other officers against liability incurred
in their capacity as a Director or officer of the Company. The insurance contract specifically prohibits the disclosure of the
nature of the policy and amount of premium paid.
The terms of the Company’s Constitution require that the Company indemnify all Directors and officers, past and present,
against all liabilities to the extent permitted by law.
In addition to the Constitutional provisions, the Company has entered into deeds of access, insurance and indemnity, with
each Director and officer which contain rights of access to certain books and records of the Company relating to the period
in which they held office. Under the deed of access, insurance and indemnity, the Company indemnifies parties against all
liabilities to another person that may arise in connection with their position as a Director or an officer of the Company, or its
subsidiaries, to the maximum extent permitted by law. The deed stipulates that the Company will meet the full amount of
any such liabilities, including reasonable legal costs and expenses.
The Company may arrange and maintain Directors’ and Officers’ insurance for its Directors and officers to the extent
permitted by law. Under the deed of access, insurance and indemnity, the Company must obtain such insurance during each
Director’s and officer’s period of office and for a period of seven years after a Director or an officer ceases to hold office.
20
INFOMEDIA ANNUAL REPORT NON-AUDIT SERVICES
During the financial year $35,000 (2015: $29,465) were paid or payable to the auditor for non-audit services. Further details
are outlined in Note 22 to the financial statements.
The Directors, based on advice provided by resolution of the Audit & Risk Committee, are satisfied that the provision of non-
audit services during the financial year, by the auditor (or by another person or firm on the auditor's behalf), is compatible
with the general standard of independence for auditors imposed by the Corporations Act 2001 and are of the opinion that
these services do not compromise the external auditor’s independence for the following reasons:
• the non-audit services were reviewed and approved to ensure they do not impact the integrity and/or objectivity of the
auditor;
• the non-audit services do no undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants, as they did not involve directly reviewing or auditing the auditor’s own work, acting
in a management or decision making capacity for the Company, acting as an advocate for the Company or jointly sharing
risks and rewards; and
• the non-audit services were provided by persons other than the audit partner responsible for the preparation of the
Company’s accounts and the Directors are satisfied that BDO have implemented appropriate internal information barriers
as necessary to prevent a conflict of interest from arising.
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.
LEAD AUDITOR’S INDEPENDENCE DECLARATION
The Lead auditor’s independence declaration is set out on page 38 and forms part of the Directors’ report for the year ended
30 June 2016.
21
INFOMEDIA ANNUAL REPORT REMUNERATION REPORT – AUDITED
A. INTRODUCTION
The Directors present the Company’s Remuneration Report for the financial year ended 30 June 2016 (FY16). During the
latter part of FY16, the Company undertook a review of its existing Executive Incentive Plan and remuneration philosophies.
Following that review, the Company adjusted elements of its executive remuneration framework. Those changes are
effective from 1 July 2016 and represent a timely realignment of executive remuneration to the Company’s future strategies
and objectives. This year’s report is slightly longer than usual as, in addition to mandatory reporting requirements for
FY16, the Board of Directors has also provided commentary describing key revisions to the Company’s revised executive
remuneration framework, in the interests of transparency moving into FY17 and beyond. The revised executive remuneration
framework is provided in Section B of this report which relates to the Company’s remuneration philosophy.
This year, the Remuneration Report is structured as follows:
TABLE 1 – STRUCTURE OF REMUNERATION PEPORT
Section
Details
B
C
D
E
F
G
Remuneration governance
Executive remuneration structure
Executive remuneration details
Non-Executive Directors remuneration
Non-Executive Directors remuneration details
Additional information
KEY MANAGEMENT PERSONNEL
This report outlines Infomedia’s remuneration philosophy, framework and outcomes for FY16 for all key management
personnel (KMP), including all Non-Executive Directors and the Executive Team made up of the Chief Executive Officer
& Managing Director (CEO & Managing Director) and senior executives. KMP are those persons having authority and
responsibility for planning, directing and controlling the activities of the Company and the Group.
The following persons were KMP during FY16:
TABLE 2 – INDEPENDENT NON-EXECUTIVE DIRECTORS
Current Directors
Fran Hernon
Clyde McConaghy
Anne O’Driscoll
Bart Vogel
Clyde McConaghy is Chairman of the Remuneration & Nominations Committee.
Anne O’Driscoll is Chairman of Audit & Risk Committee.
Myer Herszberg retired on 31 August 2015.
TABLE 3 – SENIOR EXECUTIVE TEAM
Current executives
Role
Jonathan Rubinsztein
CEO & Managing Director
Date of appointment
19 June 2000
1 November 2013
15 December 2014
31 August 2015
Date of appointment
14 March 2016
29 March 2016
Richard Leon
Nick Georges
Chief Financial Officer (CFO)
Company Secretary and General Counsel
22 March 1999
Andrew Pattinson and Russel King, the former CEO & Managing Director and CFO, resigned on 22 August 2015 and 22 April
2016, respectively.
22
INFOMEDIA ANNUAL REPORT B. REMUNERATION GOVERNANCE
This report meets the remuneration reporting requirements of the Corporations Act 2001 and Accounting Standard AASB
124 Related Party Disclosures. The term remuneration used in this report has the same meaning as compensation as
prescribed in AASB 124.
Remuneration is a technical subject in the current regulatory and reporting environment. In writing this report, the Board’s
aim is to present information in a way which is easily understood whilst meeting legal reporting obligations.
I. REMUNERATION & NOMINATIONS COMMITTEE
The Remuneration & Nominations Committee (the Committee) of the Board is responsible for reviewing and determining
remuneration arrangements for the Non-Executive Directors and the Executive Team. The Committee is charged with
responsibility to assist and advise the Board to fulfil its responsibilities on matters relating to:
• the composition and quantum of compensation, bonuses, incentives and remuneration issues relating to KMP and other
senior management personnel;
• policies relating to remuneration, incentives and superannuation for all employees;
• remuneration of Non-Executive Directors; and
• other matters as required.
The Committee operates in accordance with its charter, a copy of which is available on the Company’s website.
II. REMUNERATION PHILOSOPHY
The performance of the Company relies upon the quality of its Directors and executives. The Company must attract,
motivate and retain skilled Directors and executives to deliver on key strategic goals. Compensation must be competitive and
appropriate for the results delivered. The Company’s remuneration framework aligns executive reward with achievement of
strategic objectives and shareholder returns.
The Company follows the core remuneration philosophies as summarised in the diagram below to drive shareholder value:
Market
Competitive
Awards:
to attract,
motivate &
retain talent
Performance
Metrics:
rewards linked
to strategic &
financial
outcomes
SHAREHOLDER
VALUE
Performance
Based
Remuneration:
to drive a high
performance
culture
Align & Link:
executive rewards
to shareholder
value
III. INVOLVEMENT OF EXTERNAL REMUNERATION ADVISORS
The Remuneration & Nominations Committee, subject to Board approval, directly engages with, and considers market
remuneration data from, external remuneration consultants as required. The data provided by remuneration consultants is
used as a guide for remuneration decisions in respect of the Executive Team. During FY16, Ernst & Young were engaged to
provide information and advice on:
• structure of the Short and Long Term Incentive packages of the Chief Executive Officer;
• valuation of the Long Term Incentives granted to the Chief Executive Officer and the Chief Financial Officer; and
• benchmarking of the Company’s revised Executive STI and LTI Plan structure and metrics (effective 1 July 2016) against like
ASX listed entities.
No remuneration recommendations as defined by the Corporations Act 2001 were provided by Ernst & Young.
23
INFOMEDIA ANNUAL REPORT REMUNERATION REPORT – AUDITED continued
IV. 2015 AGM – REMUNERATION REPORT
At the 2015 Annual General Meeting held in October 2015, no comments were made in relation to the Company’s
Remuneration Report. The Remuneration Report was passed with 89.17% of votes cast at the meeting in favour of the
adopting of the report.
V. REVISED EXECUTIVE INCENTIVE PLAN EFFECTIVE FROM 1 JULY 2016
The Company undertook a review of its remuneration philosophies and strengthened the link of executive remuneration
opportunities to the Company’s strategic goals and objectives. Following that review, the Board, acting on the advice of the
Remuneration & Nominations Committee, approved a number of refinements to the Company’s existing short term incentive
(STI) and long term incentive (LTI) Plans. The revised STI and LTI Plan rules represent an improvement in the following key areas:
• introduction of a robust gateway qualification for STI participation tied to achievement of budgeted net profit after tax (NPAT);
• improved performance metrics against which STI entitlements will be measured. The revised metrics are more aligned to
key growth drivers under a recurring subscription based sales model;
• alignment between the LTI metrics assigned to the CEO and CFO, and the broader Executive Team;
• introduction of stepped vesting opportunity for performance rights, as opposed to the cliff vesting conditions of the
outgoing LTI Plan whereby executives either received all or nothing based on a pre-determined EPS target.
The revised plan commenced effective from 1 July 2016 for FY17 and will form the basis of the Company’s FY17 Remuneration Report.
The Board believes that the revised performance metrics represent a timely overhaul of the Company’s executive
remuneration strategy in line with its transition towards a fresh set of objectives and strategies. In the interests of
transparency, the following table provides a bridge analysis between key terms of the existing Executive Incentive Plan
and the revised plan, including rationale underpinning the key changes.
TABLE 4 – EXECUTIVE REMUNERATION: KEY CHANGES FOR FY17
FY17 terms
No change.
Rationale
N/A
Executives entitled to an STI
opportunity, defined as a pre-
determined monetary amount.
No substantial change.
Element
FY16 terms
Fixed
remuneration
STI: Cash
bonus
As contractually agreed with
each executive, subject to
annual review
CEO and CFO: entitled to an
STI opportunity equivalent
to 30% of their total
remuneration package
Other members of Executive
Team: entitled to an STI
opportunity equivalent to 20%
of their total remuneration
package
STI:
Gateway to
participation
No gateway to participation
other than individual
performance metrics
The STI Plan will operate subject to
achievement against budgeted Group
NPAT.
Against those gateways, the STI Plan
will operate as follows (subject to
Board discretion):
Less than 95%
achievement
STI Plan does not
operate
Between 95%
and 99.9%
achievement
STI Plan
operates at 80%
Achievement of
100% or greater
STI Plan operates
at 100%
Gateways provide a cap to the
maximum STI potential based
on level of achievement of the
Group’s financial target and no
STI will be awarded if minimum
expected financial performance
is not met.
The Gateway relies on
achievement of measurements
(NPAT) which ensure executives
remain focussed both on
revenue growth and cost
control.
The Board retains discretion
to vary the gateway to avoid
executives being penalised
unfairly for circumstances
beyond their control.
24
INFOMEDIA ANNUAL REPORT Element
FY16 terms
FY17 terms
Rationale
STI: Individual
performance
metrics
All metrics have equal weight:
Metrics have different weight:
• achievement of budgeted
• achievement of Group budgeted
revenue
NPAT: 60% weighting
• achievement of personal
performance goals: 40% weighting
• achievement of budgeted
adjusted earnings before
interest, tax and depreciation
and amortisation (EBITDA)
• achievement of budgeted
NPAT
LTI in the
form of
performance
rights:
Performance
metrics
Previously aligned to a pre-
determined EPS measure set
three years in advance (eg EPS
target of 8.5 cents for FY17).
Vesting either occurred in full
on achievement, or lapsed in
full (cliff vesting).
Compound EPS growth of 10%-15%
over a three-year period for executive
tranches results in stepped vesting
of rights between 25% and 100%.
Baseline EPS will be taken at the time
of grant and applied as the testing
metric. The Board retains discretion
to adjust the EPS metric to account
for changes in gearing and other
anomalies.
The revised metrics represent
simplification and streamlining
of the STI measurements.
Alignment to NPAT ensures
continuing focus on both
revenue and cost.
The Company has also
introduced a weighting based
on personal performance goals
as assigned to the executive
each year. Achievement against
goals will be measured using
a weighted scoring system to
determine achievement.
Stepped vesting increases
the likelihood of executives
remaining engaged. Cliff vesting
on the other hand may act as
a disincentive, and may unfairly
penalise executives where the
target is narrowly missed.
LTI grants
Executives contractually
entitled to receive an LTI in
the form of performance
rights of up to 20% of their
total potential remuneration
package annually. Each grant
generally subject to a three
year vesting period.
The Executive Team (other than the
CEO and CFO) will be allocated
an annual LTI award based on
recommendation of the CEO and as
approved by the Board. As a general
guiding principle, Executives may receive
an award up to 20% of their total
potential remuneration package.
The revised scheme for the
Executive Team allows flexibility
to increase LTI awards for
outstanding executives who
have outperformed historically,
and who are expected to make
a significant contribution in the
future.
The CEO and CFO have received
three years’ worth of LTI grants (in a
combination of performance rights
and share options) in advance effective
from FY17 in accordance with their
service agreements. The grants cover
FY17, FY18 and FY19 performance
periods and represent 30% of their
total potential remuneration package.
The detailed terms of the grant will be
described in the FY17 Remuneration
Report and were disclosed to the ASX,
most recently on 8 August 2016.
No change.
Conditions relating to ongoing
service are standard as plans
are designed both to incentivise
and retain key employees.
Service
condition
Employees must generally
remain employed at for the
entire performance period to
participate in STI, and must
remain employed at the time
of vesting to receive LTI.
Similar changes in terms and conditions of the Executive Incentive Plan will be applied to the broader Performance and
Option Plan where other eligible employees are invited to participate. The Executive Team have authority to recommend who
may participate in the plan with oversight by the Remunerations & Nominations Committee.
The Company intends to acquire shares on market to satisfy any vested entitlements from the FY17 Executive Incentive Plan.
25
INFOMEDIA ANNUAL REPORT REMUNERATION REPORT – AUDITED continued
C. EXECUTIVE REMUNERATION STRUCTURE FY16
Infomedia aims to reward executives with a level and mix of remuneration commensurate with their position and
responsibilities within the Group, and their ability to influence shareholder value.
The remuneration framework links rewards with the strategic goals and performance of the Group, and provides a market
competitive mix of both fixed and variable rewards. In determining the level and make-up of executive compensation, the
Company periodically engages with external consultants to provide independent remuneration advice, but more typically
conducts its own market salary review of similar companies to determine the level and make-up of executive compensation.
As noted in previous Annual Reports, the Board undertook a review of Infomedia’s approach to both executive and
non-executive remuneration in FY14, based on advice received from Mr. Ian Crichton of CRA Plan Managers Pty Ltd (Crichton
Review). This has been supplemented by advice from other recognised external specialists.
As noted above in this report, the Company has undertaken a comprehensive internal review of its STI and LTI structures and
has transitioned to those structures as of 1 July 2016.
I. FY16 REMUNERATION STRUCTURE OVERVIEW
The remuneration strategy is implemented via the following framework:
FIXED REMUNERATION
Base salary + superannuation
+ other benefits
+
VARIABLE REWARD
Short term incentive (Cash)
+ Long term incentive
(performance rights
and share options)
TOTAL REWARD POTENTIAL
=
Total potential
remuneration package
II. REMUNERATION STRUCTURE RATIONALE
The target remuneration mix is designed to balance reward for achievement of short term objectives and long term
strategies which, when combined, drive shareholder value. The at risk (or variable) remuneration components of the
Executive Team are set by reference to current market practices. The targeted remuneration mix for FY16 was:
• For the CEO and CFO: 40% fixed and 60% variable (at risk);
• For other members of Executive Team: 40% to 60% fixed and 40% variable (at risk).
CEO & CFO
40%
30%
30%
Other KMP
60%
20%
20%
Fixed remuneration
Short term incentive
Long term incentive
26
INFOMEDIA ANNUAL REPORT Table 5 provides a snapshot of the key elements comprising Executive Team remuneration and any relevant performance
hurdles (where applicable) and the FY16 outcome.
TABLE 5 – SNAPSHOT OF EXECUTIVE REMUNERATION STRUCTURE AND FY16 OUTCOME
Form of
remuneration
Purpose and
link to strategy
a. Fixed remuneration
Operation and outcome for FY16
Opportunity
Cash
salary and
superannuation
Attract, motivate and
retain high calibre
executives
Reviewed periodically by the Remuneration
& Nominations Committee and fixed for at
least 12 months. Decision influenced by:
Reflects individual
role, experience and
performance
• role, experience and performance;
• reference to comparative remuneration in
the market; and
• overall Company budget.
FY16 outcome
The Board approved an overall 2.5% increase
in fixed remuneration for the incumbent
Executive Team, reflecting current market
trend and their respective contributions.
Target at 40%
to 60% of
total potential
remuneration
package
Performance
metrics
Personal
objectives set
each year
Non-monetary
benefits
Attract, motivate and
retain high calibre
executives
Executive Team is provided with flexibility
to utilise salary packaging solutions such
as novated vehicle leasing and/or salary
sacrificing into superannuation.
N/A
b. Variable remuneration
FY16 outcome
No change from FY15.
STI
LTI
Recognises the
contributions and
achievements of the
Executive Team and
helps to attract and
retain talent
Provides opportunity
for the Executive
Team to acquire
ordinary shares in the
Company as a reward
for increasing EPS
over the longer term
and helps to attract
and retain talent
STI Plan is a cash bonus dependent upon
a combination of individual performance
objectives and Company objectives being met.
FY16 outcome
STI was awarded in the range of 5% to 74%
of fixed remuneration approved by Board.
Refer to Table 8 for details of STI awarded.
LTI Plan is in the form of performance
rights and share options dependent upon
a combination of individual performance
objectives and Company’s financial
objectives (eg EPS target) being met.
FY16 outcome
Refer to section III.b of the report for details
of LTI awarded based on the service
agreements of the CEO and CFO.
STI – Cash
bonus
Refer Table 7
below
LTI –
Performance
rights
N/A
Both STI and LTI
are discretionary,
performance
based, at
risk reward
arrangements.
The combined
total of STI and
LTI is targeted at
40% to 60% of
total potential
remuneration
package
27
INFOMEDIA ANNUAL REPORT REMUNERATION REPORT – AUDITED continued
Table 6 provides a breakdown of the three elements of the total remuneration for the current Executive Team, measured at
maximum level and FY16 actual. FY16 actual represents:
• Fixed remuneration – amount received in cash during the financial year;
• STI in the form of cash bonus – amount to be received in cash as approved by the Board in relation to the performance
period of FY16; and
• LTI in the form of performance rights and share options – zero value of performance rights and share options as no rights
or options vested during FY16.
TABLE 6 – MAXIMUM POTENTIAL AND FY16 ACTUAL REMUNERATION
Fixed remuneration
At risk
STI – cash bonus
LTI – performance rights
LTI – share options
Total at risk
Maximum potential
FY16 Actual
CEO and CFO
Other executives CEO and CFO
Other executives
40%
60%
30%
22%
8%
60%
100%
20%
20%
-%
40%
100%
40%
30%
-%
-%
30%
70%
60%
3%
-%
-%
3%
63%
III. REMUNERATION OUTCOME FOR FY16
The following sections provide further detail as to how the ‘at risk’ components (being STI and LTI) of the Executive Team
remuneration were determined, and how STI outcome is linked to overall Company performance.
a. Short term incentive
Details of the STI Plan are explained in Table 7 below.
TABLE 7 – KEY DETAILS OF THE STI PLAN FOR FY16
Why was the STI Plan
introduced?
The STI Plan is designed to recognise the contributions and achievements of the Executive
Team when financial results and individual performance objectives are achieved.
Who participates in the
STI Plan?
All members of the Executive Team participate in the STI Plan.
What form do the STI Plan
awards take?
100% in the form of cash bonus, normally calculated and approved by the Board in July and
generally paid following the release of annual audited results for the financial year.
What quantum of STI were
the participants eligible to
receive for FY16?
What performance metrics
applied and how were
FY16 STI entitlements
determined?
CEO and CFO: Eligible to receive an STI representing 30% of total potential reward,
pro-rated for the duration of their employment during FY16.
Other members of Executive Team: Eligible to receive an STI representing 20% of their total
potential reward.
For FY16, the following metrics applied to determine STI entitlements:
CEO and CFO:
Metric
Personal performance goals
assigned by the Board*
Relative
weighting
Performance
gateway: Payout ratios
Payout
FY16
100%
Performance goals met: 100%
100%
Other members of Executive Team:
Metric
Budgeted Group revenue
Budgeted adjusted EBITDA
Budgeted Group NPAT
Forecast Group Monthly
Recurring Revenue (MRR)
Relative
weighting
Performance
gateway: Payout ratios
25%
25%
25%
At 80% to 89% of target: 40%
At 90%-99% of target: 60%
At 100% of target: 100%
At >110% of target: 120%
25%
Target met or exceeded: 100%
Payout
FY16
60%
-%
-%
-%
* From FY17 the CEO and CFO performance metrics will align with the broader Executive Team.
28
INFOMEDIA ANNUAL REPORT Testing and approval of
performance measures
Rationale for choosing
performance measures
CEO and CFO: The Board, acting through the Remuneration & Nominations Committee,
conducted an assessment of the CEO and CFO relative to the performance goals to determine
the FY16 STI outcome for each of the CEO and CFO. The result of that review was approved by
the Board to arrive at the final STI payout ratio. More information on the rationale for choosing
the performance metrics is set out below in this table.
Other members of Executive Team: The performance measures were established by the Board
following the Crichton Review. The specific trigger points for each performance period are
recommended by the Remuneration & Nominations Committee and approved by the Board.
FY16 STI’s are payable based on the objective measurable targets identified above, with no
subjective elements applied.
CEO and CFO: The performance measures applicable to the CEO and CFO are reflective of
the personal performance goals and objectives identified by the Board on their appointment
in March 2016. On the basis that CEO and CFO joined the Company in the last quarter of
the financial year, their ability to impact the financial results of the Company was limited.
Accordingly, the Board set a number of personal performance goals and objectives aimed at
stabilising the business and setting a platform for growth in FY17 and beyond.
Other members of Executive Team: The objective financial measures applied to the incumbent
executives were implemented based on the Crichton Review conducted in FY14. The selected
metrics were chosen to directly align the executives’ interests with those of shareholders. The
metrics ensure accountability of the executives of key financial performance measures of the
Group. The specific measures are:
• Revenue: Ensures executives are incentivised to drive top line revenue growth;
• Adjusted EBITDA: Ensures executives are accountable for cost control measures. The
adjustment to exclude foreign exchange fluctuations and research and development
capitalisation ensures executives are not unfairly penalised for costs outside their direct control;
• NPAT: Ensures Executives interests are aligned with shareholders and encourages Executives
to exercise collective oversight over the entire spectrum of the Company’s profit & loss statement;
• Monthly Recurring Revenue (MRR): MRR is a key driver of Infomedia’s subscription based
business model, and sets the base for revenue in future periods. By aligning executives to
MRR, they are incentivised to drive sales throughout the entire performance period.
Forfeiture conditions
If a participant leaves the employment of the Company during any Performance Period, the STI
component is automatically forfeited unless the Board determines otherwise.
TABLE 8 – ACTUAL STI OUTCOMES FOR FY16
Jonathan Rubinsztein
Richard Leon
Nick Georges
Executive who ceased as KMP during the year:
Andrew Pattinson(a)
Russel King(a)
Table note
Maximum STI potential
FY 16 Actual STI outcome
(% of fixed pay)
(% of maximum
STI potential)
(% of fixed pay)
74%
74%
33%
74%
33%
100%
100%
15%
-%
-%
74%
74%
5%
-%
-%
($)
111,986
51,506
12,936
-
-
(a) For Andrew Pattinson and Russel King, the former CEO and CFO, who left the Company during FY16, no cash bonus was
paid to them in accordance with the Executive Incentive Plan’s terms and conditions.
b. Long term incentive
i. CEO and CFO
The Company entered into contractual arrangements with the incoming CEO and CFO during FY16 which included an
entitlement to participate in the Company’s LTI Plan. However, the final number of performance rights and share options
to be granted was dependent on the variable weighted average price (VWAP) of the Company’s ordinary shares during
the month ended 30 June 2016. Accordingly, the number of performance rights and share options could not be determined
and issued to the CEO and CFO until after the balance date, 30 June 2016. As required by the Accounting Standard AASB2
Share-based Payment, LTI are deemed to be granted to the CEO and CFO during FY16. Refer to section G.II and G.III for
further details of performance rights and share options granted.
29
INFOMEDIA ANNUAL REPORT
REMUNERATION REPORT – AUDITED continued
II. OTHER KMP
Based on the timing of the grants of LTI to the KMP, no LTI in the form of performance rights was granted during FY16.
Following commencement of the CEO during FY16, the Board, on the advice of the Remuneration & Nominations Committee,
revised the terms of the Company’s Executive Incentive Plan to ensure greater alignment between the LTI awards of the
CEO and those of the broader participants. The revised metrics will apply prospectively to LTI awards granted to Executives
from 1 July 2016.
The allocations of performance rights and share options are disclosed as subsequent events in Tables 15 and 16 in this report.
All outstanding historical performance rights and share options remain unaltered as a result of the review.
IV. SHAREHOLDING REQUIREMENTS
There is no specific policy requiring the Executive Team to hold any Infomedia’s ordinary shares. Table 17 provides details of
Infomedia’s ordinary shares held by the Executive Team during FY16.
V. HISTORICAL ANALYSIS OF FINANCIAL PERFORMANCE
The following table outlines the returns of the Group delivered to its shareholders.
TABLE 9 – KEY FINANCIAL PERFORMANCE INDICATORS
Regional revenue:
Asia Pacific
EMEA
Americas
Net profit after tax(a)
Earnings before interest and tax (EBIT)(a)
Earnings before interest, tax, depreciation
and amortisation (EBITDA)(a)
Earnings per share (cents)
Dividends per share (cents)
Share price at 30 June ($)
2012
$’000
12,349
21,129
12,199
8,461
11,087
2013
$’000
13,275
22,184
13,230
10,066
11,974
2014
$’000
13,863
27,161
16,119
12,279
15,406
2015
$’000
14,882
27,252
18,251
13,232
17,344
2016
$’000
15,749
30,297
22,041
10,323
12,550
17,654
20,104
24,598
25,024
20,897
2.79
2.40
0.20
3.32
2.82
0.47
4.02
3.78
0.75
4.30
3.89
1.20
3.33
2.65
0.69
(a) Reconciliation of net profit after tax per the consolidated statement of profit and loss and other comprehensive income
to EBIT and EBITDA
Net profit after tax
Interest
Tax
EBIT
Depreciation and amortisation expense
EBITDA
2012
$’000
8,461
(101)
2,727
11,087
6,567
17,654
2013
$’000
10,066
(76)
1,984
11,974
8,130
20,104
2014
$’000
12,279
(106)
3,233
15,406
9,192
24,598
2015
$’000
13,232
(123)
4,235
17,344
7,680
25,024
2016
$’000
10,323
(71)
2,298
12,550
8,347
20,897
30
INFOMEDIA ANNUAL REPORT D. EXECUTIVE REMUNERATION DETAILS
The table below provides remuneration details for Executive Team.
For an executive who was newly appointed during either financial year, the remuneration information provided in the table
below relates to the period from the date of their appointment as KMP to the year ended 30 June. Refer Table 2 above for a
listing of KMP who were appointed during the reporting period.
The table below also contains remuneration information of executives who resigned during the financial year from 1 July 2015
to the date of their resignation.
TABLE 10 – TOTAL EXECUTIVE REMUNERATION OF THE GROUP
Short term employment benefits
Post employment benefits
Other
long term
employment
benefits
Share based
payments
Total
Table note
(1)
(2)
(3)
(4)
(5)
(6)
Short term
incentive
Non-monetary
benefits
Super-
annuation
Termination
payments
Long service
leave accruals
(refer to
Table 11)
Performance
rights and
share options
Cash salary
and leave
accruals
$
$
$
$
$
Current Executive Team (including CEO & Managing Director):
Jonathan Rubinsztein, CEO & Managing Director, KMP since 14 March 2016
2016
162,037
111,986
Richard Leon, CFO, KMP since 29 March 2016
2016
72,039
51,506
-
-
7,692
5,124
Nick Georges, Company Secretary and General Counsel
2016
2015
228,130
230,761
12,936
-
-
-
22,503
21,972
Executives who ceased as key management personnel during FY16:
-
-
-
-
$
-
-
$
$
171,056
452,771
82,911
211,580
6,327
3,842
12,544
10,593
282,440
267,168
Andrew Pattinson, Former CEO & Managing Director, KMP until 22 August 2015
2016
2015
218,584
333,575
-
-
Russel King, Former CFO, KMP until 22 April 2016(b)
2016
2015
214,736
236,331
-
-
-
-
-
-
20,601
31,690
27,403
22,451
328,531
(8,048)
(13,600)
546,068
-
5,554
63,138
433,957
68,162
-
-
-
(10,899)
299,402
10,899
269,681
I. Footnote to Table 10
(a) During FY16, the Board critically re-assessed the definition of key management personnel as it applies to the operations
of the Infomedia Group to clarify which executives hold actual authority and responsibility for strategic planning, direction
and control of the activities of the Group. On the basis that each of the regions remain subject to the direction and
control of the Corporate team based in Infomedia’s head office, the Company determined that Michael Roach (Head of
Asia Pacific) and Karen Blunden (Head of Americas) will no longer be classified as the key management personnel of the
Group from 1 July 2015. They remain employed by the Group as senior management. For those executives who ceased to
be classified as KMP during the year ended 30 June 2016, their total FY15 remuneration was: Michael Roach $280,284;
and Karen Blunden $380,645.
(b) During FY16, Russel King also oversaw the day to day operations of the Company and directly reported to the Chairman
during the international search for the new CEO.
31
INFOMEDIA ANNUAL REPORT REMUNERATION REPORT – AUDITED continued
II. Table note
(1) Cash salary includes amounts paid in cash plus any salary sacrifice items. Annual leave accruals are determined in
accordance with Accounting Standard, AASB 119 Employee Benefits.
(2) The FY16 short term incentive was awarded and approved by the Board and will be paid in cash in September 2016.
(3) Superannuation contributions are paid in line with legislative requirements.
(4) Post termination payments were calculated and paid based on the terms of Andrew Pattinson’s and Russel King’s service
agreements as follows:
• Andrew Pattinson: 12 months of his fixed remuneration averaged over three years; and
• Russel King: 3 months of his fixed remuneration.
(5) Long service leave accruals are determined in accordance with Accounting Standard, AASB 119 Employee Benefits.
(6) The share based payments value in Table 10 above represents:
• Jonathan Rubinsztein and Richard Leon – the amount of LTI (in the form of performance rights and share options)
granted for the next three financial years commencing 1 July 2016 from the date of service agreements signed in
accordance with Accounting Standard, AASB 2 Share-based Payment. Further information is provided in section G.II and
G.III in this report;
• Nick Georges – the amount recognised for FY16 based on an allocation of performance rights granted in FY15; and
• Andrew Pattinson and Russel King – they ceased as KMP during FY16, the value of share based payments is negative
representing the lapsing of the unvested performance rights and share options in accordance with the terms and
conditions of the LTI Plan.
Table 11 – Breakdown of share based payments
Performance rights
Share options
Total share
based payments
$
$
$
Current Executive Team (including CEO & Managing Director):
Jonathan Rubinsztein, CEO & Managing Director, KMP since 14 March 2016
2016
141,618
29,438
171,056
Richard Leon, CFO, KMP since 29 March 2016
2016
Nick Georges, Company Secretary and General Counsel
2016
2015
Executives who ceased as key management personnel during FY16:
Andrew Pattinson, Former CEO & Managing Director, KMP until 22 August 2015
2016
2015
Russel King, Former CFO, KMP until 22 April 2016
2016
2015
E. NON-EXECUTIVE DIRECTORS’ REMUNERATION
I. STRUCTURE AND POLICY
68,925
13,986
82,911
12,544
9,408
-
1,185
12,544
10,593
(13,600)
13,600
(10,899)
10,899
-
(13,600)
49,538
63,138
-
-
(10,899)
10,899
Non-Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit and recommended for approval by
shareholders.
The Board has historically considered advice from external consultants as well as the fees paid to Non-Executive Directors of
comparable companies when undertaking a review process. Responsibility for reviewing and advising upon the Non-Executive
Director fees falls with the Remuneration & Nominations Committee.
32
INFOMEDIA ANNUAL REPORT II. BOARD AND COMMITTEE FEES
Independent Non-Executive Director remuneration consists of three elements:
• Board fees;
• Committee chair fees; and
• superannuation which is paid in line with legislative requirements.
The Non-Executive Directors do not participate in any incentive programs.
Directors may also be reimbursed for travel and other expenses incurred in attending to the Company’s affairs.
At the Annual General Meeting held on 30 October 2002, the shareholders approved the maximum aggregate Directors’
fee pool of $450,000 per annum. The Constitution of the Company, as approved by shareholders in 2002, states that
superannuation contributions are excluded from the director fee cap, consistent with governance practice and ASX Listing
Rules at that time. The Company intends to revise the terms of its Constitution to bring it in line with modern governance
practice and regulatory requirements, and to place those revisions, together with a revised Director fee cap, before
shareholders at the 2016 Annual General Meeting.
Table 12 – Infomedia’s Board or committee annual fee (exclusive of superannuation)
Board/Committee
Board
Role
Chairman
Non-Executive Directors
Audit & Risk Committee
Remuneration & Nominations Committee
Chairman
Chairman
From
1 January 2016
Prior to
1 January 2016
$
175,000
75,000
15,000
15,000
$
115,000
56,250
10,000
10,000
F. NON-EXECUTIVE DIRECTORS’ REMUNERATION DETAILS
The table below provides remuneration details for the Non-Executive Directors on the Company’s Board.
Bart Vogel was appointed Non-Executive Director from 31 August 2015. The remuneration information provided in the table
below relates to the period from the date of his appointment to the year ended 30 June 2016.
The table below also contains remuneration information of Myer Herszberg who retired during the financial year.
Mr Herszberg held his position from 1 July 2015 until 31 August 2015.
TABLE 13 – TOTAL NON-EXECUTIVE DIRECTORS REMUNERATION OF THE GROUP
Current Non-Executive Directors:
Fran Hernon
2016
2015
Clyde McConaghy
2016
2015
Anne O’Driscoll
2016
2015
Bart Vogel, Director since 31 August 2015
2016
Non-Executive Directors ceased as KMP during FY16:
Myer Herszberg, Director until 31 August 2015
2016
2015
Short term
Employment benefits
Post employ-
ment benefits
Board and committee fees Superannuation
$
$
145,230
115,000
78,216
66,250
78,216
36,947
13,797
10,925
7,431
6,294
7,431
3,510
Total
$
159,027
125,925
85,647
72,544
85,647
40,457
57,043
5,419
62,462
8,661
56,300
823
5,348
9,484
61,648
33
INFOMEDIA ANNUAL REPORT REMUNERATION REPORT – AUDITED continued
SHAREHOLDING REQUIREMENTS
There is no specific policy requiring the Non-Executive Directors to hold any ordinary shares in Infomedia.
Table 17 provides details of Infomedia’s ordinary shares held by the Non-Executive Directors during FY16.
G. ADDITIONAL INFORMATION
I. EXECUTIVE SERVICE AGREEMENTS
Infomedia has executive service agreements with KMP. The executive service agreements outline the components of
remuneration paid to executives. The executive service agreements do not require the Company to increase base salary, pay a
short term incentive or offer a long term incentive in any given year.
The table below contains the key terms of the Executive Team’s service agreements. The executive service agreements do not
provide for any termination payments, other than payment in lieu of notice by the Company.
Table 14 – Key terms of executive service agreements
Name
Commencement date
of latest contract
Duration
Notice period
– Company
Notice period
– Employee
Termination payment
in lieu of notice
Jonathan Rubinsztein 14 March 2016
Continuing
6 months
6 months
6 months fixed remuneration
Richard Leon
Nick Georges
29 March 2016
Continuing
3 months
3 months
3 months fixed remuneration
15 January 2015
3 years
3 months
3 months
3 months fixed remuneration
Termination payments may include the payment of amounts owing pursuant to an industrial instrument as permitted by the
Corporations Act 2001.
a. Redundancy entitlements
Name
Redundancy at instance of Company
Jonathan Rubinsztein
12 months’ fixed pay payable following the notice period, plus accrued and unpaid STI and LTI
entitled, if remained employed to the end of the relevant notice period.
Richard Leon
12 months’ fixed pay payable following the notice period.
Nick Georges
Statutory entitlements, unless effected in consequence of a takeover, merger of amalgamation,
in which case 3 weeks’ base salary for each full year of service, capped at 12 months’ base salary.
b. Termination in other situations
The Company may immediately terminate the Executive Agreements without notice, or any payment in lieu of notice, in the
following circumstances:
Name
Cause
Jonathan Rubinsztein
Material breach incapable of remedy, conduct which has a material adverse effect on the
Company’s reputation, commits an act justifying termination at common law, becomes bankrupt
or is absent from work for more than three months in any 12-month period without approval.
Richard Leon
Material breach incapable of remedy, conduct which has a material adverse effect on the
Company’s reputation, commits an act justifying termination at common law, becomes bankrupt
or is absent from work for more than three months in any 12-month period without approval.
Nick Georges
Engages in misconduct, becomes bankrupt or commits a serious or persistent material breach
incapable of remedy.
34
INFOMEDIA ANNUAL REPORT II. PERFORMANCE RIGHTS
LTI in the form of performance rights were granted to KMP during the financial year ended 30 June 2015. During FY16, no
performance rights were granted. Further details of the performance rights are disclosed in Note 18 Share based remuneration.
The table below provides the number of performance rights held by members of the Executive Team at 30 June 2015 and 30
June 2016.
Table 15 – Movement in performance rights
Name
Rights held at
30 June 2015
Rights granted
during FY16
Rights exercised
during FY16(a)
Rights lapsed
during FY16(b)
Rights held at
30 June 2016(a)
Number
Number
Number
Number
Number
Current Executive Team (including CEO & Managing Director):
Jonathan Rubinsztein(c)
Richard Leon(c)
Nick Georges(d)
-
-
73,165
Executives who ceased as key management personnel during FY16:
Andrew Pattinson
Russel King
Table note
105,763
84,755
263,683
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(105,763)
(84,755)
(190,518)
-
-
73,165
-
-
73,165
(a) The performance rights held by the Executive Team at the beginning of FY16 will be tested for vesting on 1 October 2017
and therefore no performance rights vested, are exercisable or were exercised during FY16 and as at 30 June 2016.
(b) In accordance with the terms of the LTI Plan, performance rights will automatically lapse upon termination of
employment with the Company. Andrew Pattinson and Russel King both resigned during FY16.
(c) Subsequent to the end of the financial year ended 30 June 2016, 1,418,067 and 756,302 performance rights have been
issued to Jonathan Rubinsztein and Richard Leon, respectively, in accordance with their service agreements as part of
their LTI. The performance rights issued were for the performance period for the year ending 30 June 2017, 2018 and 2019
(ie FY17, FY18 and FY19), respectively. These performance rights represent three years’ LTI award. The terms of these LTI
entitlements have been disclosed to the ASX and will be disclosed in full as part of the Company’s FY17 Remuneration
Report.
(d) Subsequent to the end of the financial year ended 30 June 2016, 80,000 performance rights have been granted to Nick
Georges. The performance rights are granted for the performance period spanning FY17 to FY19 and will be tested for
vesting on 1 October 2019 by comparing FY16 EPS against FY19 EPS metrics. The terms of these LTI entitlements will be
disclosed in full as part of the Company’s FY17 Remuneration Report.
III. SHARE OPTIONS
The Company provides the Executive Team with the opportunity to subscribe for ordinary shares in the Company through the
Performance Rights and Option Plan. Share options are generally granted to eligible executives on an annual basis. Further
details of the share options are disclosed in the share based remuneration note to the financial statements. During FY16, no
share options were granted to the Executive Team.
The table below provides the number of share options held by members of the Executive Team at 30 June 2015 and 30 June 2016.
Table 16 – Movement in share options
Name
Options held at
30 June 2015
Options
granted
during FY16
Options
exercised
during FY16(a)
Options
lapsed during
FY16(a)
Options
held at
30 June 2016
Options
vested during
FY16(a)
Options vested
& exercisable
at 30 June 2016
Number
Number
Number
Number
Number
Current Executive Team (including CEO & Managing Director):
Jonathan Rubinsztein(b)
Richard Leon(b)
Nick Georges
-
-
-
-
-
-
-
-
-
-
-
-
Executives who ceased as key management personnel during FY16:
Andrew Pattinson(a)
750,000
Russel King
-
750,000
-
-
-
(500,000)
(250,000)
-
-
(500,000)
(250,000)
-
-
-
-
-
-
-
-
-
250,000
-
250,000
-
-
-
-
-
35
INFOMEDIA ANNUAL REPORT REMUNERATION REPORT – AUDITED continued
Table note
(a) As approved by the Board, 250,000 share options held by Andrew Pattinson vested on 27 September 2015 following his
resignation. Mr Pattinson exercised all vested share options (500,000) on 27 November 2015. The remaining 250,000
unvested share options lapsed in accordance with the terms of the Performance Rights and Option Plan. The exercise
price for these share options is $0.565 per share option.
(b) Subsequent to the end of the financial year ended 30 June 2016, 3,750,000 and 2,000,000 share options have been
issued to Jonathan Rubinsztein and Richard Leon, respectively, in accordance with their service agreements as part of
their LTI. The share options issued were for the performance period for FY17, FY18 and FY19, respectively. These share
options represent three years’ LTI award.
IV. LOANS TO EXECUTIVE
There were no loans at the beginning or at the end of the financial year ended 30 June 2016 to the Executive Team. No loans
were made available during FY16 to the Executive Team.
V. SHAREHOLDINGS OF NON-EXECUTIVE DIRECTORS AND THE EXECUTIVE TEAM
Table 17 below summarises the movement in holdings of Infomedia ordinary shares during the year and the balance at the
end of the financial year both in total and held nominally by related parties of Non-Executive Directors and the Executive Team.
Table 17 – Movement of shareholding interests of Non-Executive Directors in accordance with section 205G of the
Corporations Act 2001 and the Executive Team – FY16
Name
Balance at
30 June 2015
Number
Grant as
compen-
sation
Number
Exercise of
share options
Exercise of
performance
rights
Net other
changes
Total shares
held at 30
June 2016
Shares held
nominally
at 30 June
2016(a)
Number
Number
Number
Number
Number
Non-Executive Directors:
Fran Hernon
Clyde McConaghy
Anne O’Driscoll
Bart Vogel
5,000
-
15,000
-
-
-
-
-
Current Executive Team (including CEO & Managing Directors):
Jonathan Rubinsztein(c)
Richard Leon(c)
Nick Georges
-
-
100,000
-
-
-
-
-
-
-
-
-
-
Director and executives who ceased as key management personnel during FY16:
Myer Herszberg(d)
Andrew Pattinson(d)
Russel King(d)
Footnote to Table 17
15,010
2,747,567
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23,300
12,000
30,000
28,300
12,000
45,000
-
-
45,000
152,000
152,000
152,000
500,000
500,000
500,000
119,000
119,000
119,000
-
-
-
-
100,000
100,000
15,010
15,010
2,747,567
-
-
-
(a) Shares held nominally are included in the column headed Total shares held at 30 June 2016. Total shares are held directly
by the KMP and indirectly by the KMP’s related parties, inclusive of domestic partner, dependants and entities controlled,
jointly controlled or significantly influenced by the KMP.
(b) For the Directors, total shares held directly and nominally also represented the relevant interest in the listed securities,
being ordinary shares of the Company, as notified by the Directors to the ASX in accordance with section 205G(1) of the
Corporations Act 2001, at the date of this Directors’ Report.
(c) Jonathan Rubinsztein and Richard Leon became KMP from 14 March 2016 and 29 March 2016, respectively.
(d) Individual shareholdings information is provided until the date when they ceased as KMP of the Company.
VI. KMP AND OTHER RELATED PARTY TRANSACTIONS
During the year, there was not any related party transactions with KMP and KMP related parties other than those disclosed
in this report.
36
INFOMEDIA ANNUAL REPORT ROUNDING
The Group is of the kind referred to in the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
dated 24 March 2016. In accordance with that instrument, amounts in the Directors’ report and financial report have been
rounded to the nearest thousand dollars, unless otherwise stated.
Signed at Sydney on 29 August 2016 in accordance with a resolution of the Directors.
Fran Hernon
Chairman
37
INFOMEDIA ANNUAL REPORT Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
DECLARATION OF INDEPENDENCE BY GRANT SAXON TO THE DIRECTORS OF INFOMEDIA LTD
As lead auditor of Infomedia Ltd for the year ended 30 June 2016, I declare that, to the best of my
knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Infomedia Ltd and the entities it controlled during the year.
Grant Saxon
Partner
BDO East Coast Partnership
Sydney, 29 August 2016
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.
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 30 June 2016
REVENUE
EXPENDITURE
Research and development expenses
Sales and marketing expenses
General and administration expenses
Total expenditure
OTHER INCOME AND EXPENSES
Finance income
Foreign currency translation gains/(losses)
Profit before tax
Income tax expense
Profit after tax for the year
OTHER COMPREHENSIVE INCOME
Items that may be reclassified subsequently to profit or loss
Net movement in foreign currency translation reserve for foreign operations
Effective cash flow hedges gains/(losses) taken to equity
Income tax (expense)/benefit on other comprehensive income
Other comprehensive income/(loss) for the period, net of tax
Total comprehensive income for the year, net of tax
EARNINGS PER SHARE
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
Note
3
15
6
4
4
2016
$’000
68,087
(15,232)
(20,466)
(18,032)
(53,730)
71
(1,807)
12,621
(2,298)
10,323
237
784
(236)
785
11,108
3.33
3.31
2015
$’000
60,385
(13,838)
(16,278)
(13,177)
(43,293)
123
252
17,467
(4,235)
13,232
253
(865)
141
(471)
12,761
4.30
4.29
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
notes to the financial statements.
39
INFOMEDIA ANNUAL REPORT Consolidated Statement of Financial Position
As at 30 June 2016
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade receivables
Other receivables
Income tax recoverable
Prepayments
Derivatives
Total current assets
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets – Capitalised development costs
Intangible assets – Goodwill
Total non-current assets
Total assets
LIABILITIES
CURRENT LIABILITIES
Trade payables
Other payables
Derivatives
Income tax payable
Provision for employee entitlements
Deferred revenue
Total current liabilities
NON-CURRENT LIABILITIES
Provision for employee entitlements
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Foreign currency translation reserve
Share based payments reserve
Cash flow hedge reserve
Retained earnings
Total equity
Note
19
8
16
7
7
17
6
9
2016
$’000
14,748
6,281
14
870
958
250
23,121
2,373
22,416
12,367
37,156
60,277
693
4,482
-
-
2,938
1,795
9,908
527
5,684
6,211
16,119
44,158
12,449
1,272
711
148
29,578
44,158
2015
$’000
16,092
5,031
34
-
1,599
-
22,756
1,055
21,808
12,990
35,853
58,609
623
2,812
533
1,579
2,801
489
8,837
460
5,483
5,943
14,780
43,829
12,074
1,035
720
(400)
30,400
43,829
The above consolidated statement of financial position should be read in conjunction with the notes to the financial statements.
40
INFOMEDIA ANNUAL REPORT Consolidated Statement of Changes in Equity
For the year ended 30 June 2016
Equity attributable to owners of Infomedia Ltd
Total equity
Foreign
currency
translation
reserve
Share
based
payments
reserve
Cash flow
hedge
reserve
Retained
earnings
$’000
$’000
$’000
$’000
$’000
Share
capital
$’000
2016
Balance at 1 July 2015
12,074
1,035
720
(400)
30,400
43,829
Profit after income tax expense for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income for the year
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS:
Share options exercised
Share based payments
Dividends declared and paid
-
-
-
375
-
-
-
237
237
-
-
-
Balance at 30 June 2016
12,449
1,272
2015
Balance at 1 July 2014
11,476
Profit after income tax expense for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income for the year
TRANSACTIONS WITH OWNERS IN
THEIR CAPACITY AS OWNERS:
Share options exercised
Share based payments
Dividends declared and paid
-
-
-
598
-
-
782
-
253
253
-
-
-
Balance at 30 June 2015
12,074
1,035
-
-
-
-
(9)
-
711
463
-
-
-
-
257
-
720
-
10,323
10,323
548
548
-
10,323
785
11,108
-
-
-
148
324
-
(724)
(724)
-
-
(11,145)
29,578
28,944
13,232
-
13,232
375
(9)
(11,145)
44,158
41,989
13,232
(471)
12,761
-
-
-
-
-
598
257
(11,776)
(11,776)
(400)
30,400
43,829
The above consolidated statement of changes in equity should be read in conjunction with the notes to the financial statements.
41
INFOMEDIA ANNUAL REPORT Consolidated Statement of Cash Flows
For the year ended 30 June 2016
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Income taxes paid
Net cash from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Net cash used in investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of share options
Dividends paid to owners of Infomedia Ltd
Net cash from financing activities
Net changes in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Cash and cash equivalents at the end of the financial year
Note
19
9
5
19
2016
$’000
65,208
(49,202)
71
(4,753)
11,324
(1,898)
(1,898)
375
(11,145)
(10,770)
(1,344)
16,092
14,748
2015
$’000
62,371
(42,752)
123
(3,469)
16,273
(413)
(413)
598
(11,776)
(11,178)
4,682
11,410
16,092
The above consolidated statement of cash flows should be read in conjunction with the notes to the financial statements.
42
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements
For the year ended 30 June 2016
NOTE 1. GENERAL INFORMATION
This general purpose financial report is for the year ended 30 June 2016 and comprises the consolidated financial statements
for Infomedia Ltd (Infomedia or the Company) and its subsidiaries (Infomedia Group or the Group). These financial
statements are presented in Australian dollars, which is Infomedia’s functional and presentation currency.
The Company is a for-profit listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is 3, Minna Close, Belrose, Sydney NSW 2085.
A description of the nature of the Group’s operations and its principal activities is included in the Directors’ report, which is
not part of the financial report.
This general purpose financial report was authorised for issue by the Board on 29 August 2016.
This year’s financial report is re-ordered and re-written to aid improvement in communication. The flow of information is
grouped as follows:
• critical accounting judgements, estimates and assumptions – Note 2;
• key financial performance of the Group – Notes 3 to 6;
• significant operating assets and liabilities – Notes 7 to 8;
• capital and financial risk management matters – Notes 9 to 13;
• group structure – Note 14; and
• additional information and disclosures required by Accounting Standards – Notes 15 to 23.
Significant accounting policies applied are provided at the end of each note, where appropriate.
Other significant accounting policies and the new and revised accounting standards not applicable for the financial year are
provided in Note 23.
A. STATEMENT OF COMPLIANCE
This financial report has been prepared in accordance with the Corporations Act 2001, Australian Accounting Standards and
other authoritative pronouncements of the Australian Accounting Standards Board, as appropriate for for-profit oriented
entities and the Australian Securities Exchange (ASX) Listing Rules.
International Financial Reporting Standards (IFRS) refer to the overall framework of standards and pronouncements
approved by the International Accounting Standards Board. IFRS forms the basis of the Australian Accounting Standards.
This financial report of the Group complies with IFRS.
B. BASIS OF PREPARATION OF THE FINANCIAL REPORT
The accounting policies adopted in the preparation of this financial report have been applied consistently by all entities
in the Group and are the same as those applied for the previous reporting period unless otherwise noted. These financial
statements have been prepared under the historical cost convention, modified, where applicable, by the measurement at fair
value of certain non-current assets, financial assets and financial liabilities.
I. Changes in accounting polices
The Company has adopted all of the new recognition and measurement requirements, revised or amending Accounting
Standards and Interpretations issued by the Australian Accounting Standards Board that are mandatory for the year ended
30 June 2016. The Company has early adopted a revised Australian Accounting Standard applicable for the current reporting
period. Adoption of this standard has not had any material effect on the financial position or performance of the Group.
Title
Description
Note
Accounting Standards early adopted for the financial year ended 30 June 2016
AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 101
(i)
Table note
(i) These changes only impact disclosure in the financial statements.
II. Reclassification of comparatives
There were no material changes in prior year comparative information in this financial report to conform with the current
period’s presentation.
III. Rounding
The Group is of the kind referred to in the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
dated 24 March 2016, amounts in this financial report have been rounded to the nearest thousand dollars, unless otherwise stated.
43
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
C. PRINCIPLES OF CONSOLIDATION
I. Subsidiaries
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The
financial statements of subsidiaries are included in the consolidated financial statements of the Group from the date on
which control commences until the date on which control ceases.
II. Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses arising from intra-group transactions, are
eliminated in full.
NOTE 2. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates and assumptions that affect
the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in relation
to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates and assumptions
on historical experience and on other various factors, including expectations of future events management believes to be
reasonable under the circumstances. The resulting accounting judgements and estimates may differ from the related actual
results. The judgements, estimates and assumptions that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities (refer to the respective notes) during the year ended 30 June 2016 are discussed below.
A. GOODWILL
Goodwill is assessed annually for impairment or when there is an evidence of impairment.
The recoverable amount of goodwill is estimated using discounted cash flow analysis of the relevant cash generating unit
(CGU) deducting the carrying amount of the identifiable net assets of the CGU. Key assumptions used in the calculation of
recoverable amounts are the discount rates, terminal value growth rates and EBITDA growth rates.
B. INTANGIBLE ASSETS
The carrying amounts of intangible assets with finite lives are reviewed at each reporting date to determine whether there
is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated on the same
basis as goodwill above.
An impairment loss is recognised if the carrying amount of the intangible asset exceeds its recoverable amount.
C. ESTIMATION OF USEFUL LIVES OF ASSETS
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations
or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously
estimated lives. Assets that became technically obsolete or non-strategic assets that have been abandoned or sold will be
written off or written down.
D. 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.
E. RESEARCH AND 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 and that the asset is expected to generate future economic benefits.
NOTE 3. OPERATING SEGMENTS
A. IDENTIFICATION OF REPORTABLE SEGMENTS
The Group has identified its operating segments based on the internal reports that are reviewed and used by the CEO &
Managing Director (identified as the chief operating decision makers or CODM) in assessing performance and in determining
the allocation of resources.
The reportable/business segments identified are from a geographic perspective and the three segments are:
• Asia Pacific;
• Europe, Middle East and Africa (EMEA); and
• Americas represents the combined North America and Latin & South America segments.
The operating segments are identified by management based on the region in which the product is sold. Discrete financial
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 effect on the rates of return.
44
INFOMEDIA ANNUAL REPORT B. MAJOR CUSTOMERS
The Group has many customers to which it provides products. There is no significant reliance on any single customer.
C. FINANCIAL INFORMATION OF REPORTABLE SEGMENTS
Note
Asia Pacific
$’000
EMEA
$’000
Americas
$’000
Unallocated*
$’000
15,749
15,749
12,223
30,297
30,297
22,041
22,041
-
-
23,709
12,324
(35,706)
2016
Revenue
Total revenue
Segment contribution
Finance income
Profit before tax
Income tax expense
6
Profit after tax for the year
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Capital expenditure
Amortisation
Depreciation
2015
Revenue
Total revenue
Segment result
Finance income
Profit before tax
Income tax expense
6
Profit after tax for the year
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Capital expenditure
Amortisation
Depreciation
80
80
-
-
-
-
-
Note
Asia Pacific
$’000
14,882
14,882
11,214
-
11,214
62
62
-
-
-
-
-
71
53,551
53,551
13,235
13,235
1,358
7,447
376
1,565
1,565
902
902
519
-
97
Americas
$’000
Corporate
$’000
18,251
18,251
12,168
-
12,168
726
726
466
466
80
-
52
-
-
(28,401)
123
(28,278)
49,805
49,805
13,446
13,446
301
6,613
476
5,081
5,081
1,982
1,982
21
320
107
EMEA
$’000
27,252
27,252
22,363
-
22,363
8,016
8,016
868
868
32
440
99
Total
$’000
68,087
68,087
12,550
71
12,621
(2,298)
10,323
60,277
60,277
16,119
16,119
1,898
7,767
580
Total
$’000
60,385
60,385
17,344
123
17,467
(4,235)
13,232
58,609
58,609
14,780
14,780
413
7,053
627
* Unallocated represents costs, all assets and all liabilities not directly attributable to the business segments. The types of
unallocated costs are changed in FY16 and comparatives are not reclassified:
45
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
Unallocated costs:
Research and development expenses
Sales and marketing expenses
General and administration expenses
Cash flow hedges losses
2016
$’000
15,232
5,909
12,982
1,583
35,706
2015
$’000
14,458
5,453
7,936
554
28,401
D. ACCOUNTING POLICY APPLIED – REVENUE RECOGNITION
Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be reliably
measured. Revenue is measured at the fair value of the consideration received or receivable.
The Group’s recurring revenue is through subscription. Subscription revenue is recognised when the copyright article has
passed to the customer 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.
NOTE 4. EARNINGS PER SHARE
A. REPORTING PERIOD VALUE
Basic earnings per share
Diluted earnings per share
(a)/(b)
(a)/(c)
2016
cents
3.33
3.31
2016
$’000
2015
cents
4.30
4.29
2015
$’000
B. EARNINGS USED IN CALCULATING EARNINGS PER SHARE
Profit after tax
(a)
10,323
13,232
C. RECONCILIATION OF WEIGHTED AVERAGE NUMBER OF SHARES
USED IN CALCULATING EARNINGS PER SHARE
Weighted average number of ordinary shares used in calculating basic
earnings per share
Dilutive effect of:
Share options and performance rights
2015
Number in ‘000 Number in ‘000
2016
(b)
309,644
307,468
2,061
986
Weighted average number of ordinary shares used in calculating
diluted earnings per share
(c)
311,705
308,454
The weighted average number of ordinary shares or dilutive potential ordinary shares is calculated by taking into account the
period from the issue date of the shares to the reporting date.
46
INFOMEDIA ANNUAL REPORT NOTE 5. DIVIDENDS
A. DIVIDENDS ON ORDINARY SHARES
2016
2016 Interim dividend
2015 Final dividend
2015 Special dividend
2015
2015 Interim dividend
2014 Final dividend
Cents per share
Total amount
$’000
Payment date
Tax rate for
franking credit
Percentage
franked
1.65
1.70
0.25
3.60
1.94
1.89
3.83
5,115
5,257
18 March 2016
15 September 2015
773
15 September 2015
11,145
5,975
5,801
11,776
18 March 2015
17 September 2014
30%
30%
30%
30%
30%
-%
-%
100%
-%
100%
It is standard practice that the Board declares the dividend for a period after the relevant reporting date. A dividend is
not accrued for until it is declared and so the dividends for a period are generally recognised and measured in the financial
reporting period following the period to which the dividends relate.
B. DIVIDEND POLICY
The Company intends to target a dividend pay-out ratio in the range of 75% to 85% of net profit after tax attributable to
shareholders of the Company. The actual pay-out ratio in the year ended 30 June 2016 was 80% (2015: 84%, excluding the
special dividend declared) including the final dividend for the respective financial year declared after the reporting date.
C. DIVIDEND REINVESTMENT
During the financial year ended 30 June 2016, the Company launched a Dividend Reinvestment Plan (DRP) that allows equity
holders to elect to receive their dividend entitlement in the form of the Company’s ordinary shares. The price of DRP shares is
the average share market price, less a discount if any (determined by the directors) calculated over the pricing period (which
is at least five trading days) as determined by the directors for each dividend payment date.
D. DIVIDEND NOT RECOGNISED AT REPORTING DATE
On 29 August 2016, the Board resolved to pay the following dividend. As this occurred after the reporting date, the dividends
declared have not been recognised in this financial report.
2016
Cents per share Total amount
$’000
Expected
payment date
Tax rate for
franking credit
Percentage franked
2016 Final dividend
1.00
3,100
22 September 2016
30%
100%
The Company’s DRP will operate by acquiring shares on market to participants with an issue price per share of the average
market price as defined by the DRP terms with no discount applied and a record date of 5 September 2016. The last election
notice for participation in the DRP in relation to this final dividend is 6 September 2016.
E. FRANKING CREDITS
Franking account balance at reporting date at 30%
Franking credits to arise from payment of income tax payable
Franking credits available for future reporting periods
Franking account impact of dividends declared before issuance of financial report
but not recognised at reporting date
Franking credits available for subsequent financial periods based on a tax rate of 30%
2016
$’000
5,331
(878)
4,453
(1,329)
3,124
2015
$’000
749
1,541
2,290
(331)
1,959
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
• franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date;
• franking debits that will arise from the payment of dividends not recognised as a liability at the reporting date; and
• franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
47
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
NOTE 6. TAXATION
A. INCOME TAX EXPENSE
Profit before tax
Income tax expense at statutory tax rate of 30%
Tax effect of amounts which are not (deductible)/taxable in calculating taxable income:
Additional research and development deduction
Income tax paid in China
Non-deductible expenses
Over/(under) provision for income tax of prior periods
Income tax expense
B. MAJOR COMPONENTS OF INCOME TAX EXPENSE
Current tax
Movement in deferred tax assets
Movement in deferred tax liabilities
Adjustments for current tax of prior periods
C. INCOME TAX ON ITEMS RECOGNISED DIRECTLY IN EQUITY
Cash flow hedges
D. DEFERRED TAX LIABILITIES
I. Composition
Derivatives
Deferred development costs
II. Movements
Balance at the beginning of the financial year
Add: reversal of offset against deferred tax assets
Gross balance at the beginning of the financial year
Credited to profit or loss
Credited to equity
Balance at the end of the financial year before offset
Less: offset against deferred tax assets
Balance at the end of the financial year
E. DEFERRED TAX ASSETS
I. Composition
Provisions
Other payables
Currency exchange
II. Movements
Balance at the beginning of the financial year
Add: reversal of offset against deferred tax liabilities
Gross balance at the beginning of the financial year
Credited to profit or loss
Balance at the end of the financial year before offset
Less: offset against deferred tax liabilities
Balance at the end of the financial year
48
2016
$’000
12,621
3,786
(1,386)
9
44
2,453
(155)
2,298
2,488
(248)
213
(155)
2,298
223
223
(75)
(6,757)
(6,832)
(5,483)
(900)
(6,383)
(213)
(236)
(6,832)
1,148
(5,684)
1,070
198
(120)
1,148
-
900
900
248
1,148
(1,148)
-
2015
$’000
17,467
5,240
(1,347)
32
278
4,203
32
4,235
4,075
122
6
32
4,235
(310)
(310)
160
(6,543)
(6,383)
(5,496)
(1,022)
(6,518)
(6)
141
(6,383)
900
(5,483)
1,002
(34)
(68)
900
-
1,022
1,022
(122)
900
(900)
-
INFOMEDIA ANNUAL REPORT F. ACCOUNTING POLICY APPLIED
Income tax expense for a reporting year comprises current and deferred tax.
Current tax expense is the expected tax payable on the taxable income for the year, using tax rates for each jurisdiction,
and any adjustment to tax payable in respect of previous financial periods.
Deferred tax assets and liabilities are recognised using the balance sheet method for temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes except
for temporary differences relating to the initial recognition of goodwill.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of
assets and liabilities, using tax rates enacted or substantively enacted at reporting date. Deferred tax assets are recognised
only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same
taxation authority.
NOTE 7. INTANGIBLE ASSETS
2016
A. COMPOSITION
At cost
Accumulated amortisation
B. MOVEMENTS
Balance at 1 July 2015
Additions
Amortisation
Revaluation on cost (foreign exchange movements)
Revaluation on amortisation
Capitalised
development costs
$’000
Goodwill*
$’000
71,046
(48,630)
22,416
21,808
8,054
(7,446)
-
-
17,330
(4,963)
12,367
12,990
-
(320)
(525)
222
Balance at 30 June 2016, net of accumulated amortisation and impairment
22,416
12,367
2015
C. COMPOSITION
At cost
Accumulated amortisation
D. MOVEMENTS
Balance at 1 July 2014
Additions
Amortisation
Revaluation on cost (foreign exchange movements)
Revaluation on amortisation
62,992
(41,184)
21,808
21,264
7,157
(6,613)
-
-
17,330
(4,340)
12,990
13,058
-
(440)
533
(161)
Balance at 30 June 2015, net of accumulated amortisation and impairment
21,808
12,990
E. AMORTISATION RATES
4 years
4 to 5 years
* Goodwill was acquired through business/territory acquisition. The balance in the table above includes intellectual property
related to copyright and software coded over key products and other identifiable intangibles. The gross and written down
value of the separately identified intellectual property and other intangibles are immaterial and are included as goodwill for
disclosure purposes. The intellectual property and other intangibles have finite life and are amortised over 4 to 5 years.
49
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
F. ACCOUNTING POLICIES APPLIED
I. Capitalised development costs
Except for capitalised development costs, internally generated intangible assets are not capitalised and expenditure is
charged against profits 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 recognised on an internal project
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;
• its ability to use or sell the asset;
• the asset will generate future economic benefits;
• the availability of resources to complete the development; and
• the ability to measure reliably the expenditure attributable to the intangible asset during its development.
Capitalised development costs represent the up-front costs of developing new products or enhancing existing products to
meet customer needs. These up-front development costs are capitalised until such time as the applicable product is released
to market. At that point, the capitalised development cost is amortised over a four year period on a straight line basis, being
the estimated useful life. Capitalised development costs are also subject to a periodic impairment review to ensure that
amounts are recoverable in future periods.
II. Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business
combination over the Company’s interest in the net fair value of the acquiree’s identifiable assets, liabilities and contingent
liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired. Impairment losses recognised for goodwill are not subsequently reversed.
G. IMPAIRMENT TESTING OF GOODWILL
The Group performed impairment testing for all goodwill on an annual basis and intangibles (capitalised development costs) which
had impairment indicators. There was no impairment provision for the year ended 30 June 2016 (2015: no impairment provision).
Goodwill acquired through business combinations or territory acquisition has been allocated to individual cash generating
units (CGU), each of which is a reportable segment (refer Note 3) for impairment testing as follows:
• Asia Pacific;
• Europe, Middle East & Africa (EMEA); and
• Americas.
I. Goodwill allocated to each CGU
Goodwill as at 30 June 2015
Foreign exchange movements
Goodwill as at 30 June 2016
Asia Pacific
$’000
2,866
(70)
2,796
EMEA
$’000
6,023
(145)
5,878
Americas
$’000
3,740
(90)
3,650
Total
$’000
12,629
(305)
12,324
The total goodwill in the table above does not include intellectual property and other intangibles acquired through business/
territory acquisitions.
50
INFOMEDIA ANNUAL REPORT II. Impairment assessment
The methodology used in the impairment testing is value in use – a discounted cash flow model, based on a five year
projection on the approved budget of the tested cash generating units with a terminal value.
The following table sets out the key assumptions for the value in use model.
Discount rates(a)
Revenue growth rate(b) – one year to five years extrapolation
AUD/USD exchange rate(c)
AUD/EUR exchange rate(c)
2016
2015
14% per annum 14% per annum
5% per annum
5% per annum
$0.73
$0.66
$0.84
$0.70
(a) The discount rate reflects management’s estimate of the cost of capital.
(b) The Group has estimated a conservative growth of 5% per annum for the financial years between 2016 and 2021 based
on forecast projections.
(c) These exchange rates are used in the cash flow projects for foreign operations.
The following describes each key assumption on which management has based its cash flow projections when determining
the value in use of its cash generating units:
•
•
•
•
the Company will continue to have access to the data supply from automakers over the budgeted period;
the Company will not experience any substantial adverse movements in currency exchange rates;
the Company’s research and development program will ensure that the current suite of products remain leading edge; and
the Company is able to maintain its current gross margins.
No reasonable possible change in assumptions would result in the recoverable amount of a CGU being materially less than
the carrying value.
NOTE 8. TRADE RECEIVABLES
A. BALANCE AT REPORTING DATE
Trade debtors
Provision for impairment loss
B. AGING ANALYSIS OF TRADE RECEIVABLES
0-60 days – not impaired
0-60 days – considered impaired
Over 60 days – not impaired
Over 60 days – considered impaired
Total trade debtors
Allowance for impairment
% of total trade
debtors
84.4%
1.6%
9.7%
4.3%
100.0%
6.0%
2016
$’000
5,637
109
647
286
6,679
(398)
6,281
2015
$’000
5,185
(154)
5,031
% of total trade
debtors
87.3%
0.2%
9.7%
2.8%
100.0%
3.0%
2016
$’000
6,679
(398)
6,281
2015
$’000
4,529
11
502
143
5,185
(154)
5,031
C. ACCOUNTING POLICIES APPLIED
Trade and other receivables are initially recognised based on the invoiced amount to customers. After initial recognition,
provision is made for matters that may lead to non-collection.
These receivables are generally due for settlement within 30 to 60 days. Collectability of trade receivables is reviewed on an
ongoing basis.
The Group has considered the collectability and recoverability of trade receivables. An allowance for impairment loss has been
made for the estimated irrecoverable trade receivable amounts arising from the past, determined by reference to past default.
51
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
NOTE 9. NOTES TO THE STATEMENT OF CHANGES IN EQUITY AND RESERVES
2016
2015
2016
2015
Number of
shares in ’000
Number of
shares in ’000
$’000
$’000
A. SHARE CAPITAL
Reconciliation of movements
Balance at the beginning of the financial year
Share options exercised
Balance at the end of the financial year
309,240
747
309,987
306,767
2,473
309,240
12,074
375
12,449
11,476
598
12,074
Fully paid ordinary shares carry one vote per share and carry the right to dividends.
B. CAPITAL RISK MANAGEMENT
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that it can
continue its listing on the ASX, provide returns for shareholders and benefits for other stakeholders.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares and take on borrowings.
C. NATURE AND PURPOSE OF RESERVES
I. Foreign currency translation reserve
The foreign currency translation reserve records the foreign currency differences from the translation of the financial
information of foreign operations that have a functional currency other than Australian dollars. It is also used to record the
effect of hedging net investments in foreign operations.
II. Share based payments reserve
The share based payments reserve is used to recognise the fair value at grant date of equity settled share based
remuneration provided to employees.
III. Cash flow hedge reserve
The cash flow hedge reserve is used to record the mark to market valuation of forward foreign currency contracts at the
balance sheet date that are considered effective hedges.
NOTE 10. RISK MANAGEMENT AND FINANCIAL INSTRUMENTS
A. FINANCIAL RISK MANAGEMENT OBJECTIVES
The finance division manages the funding, liquidity and financial risks of the group. It operates and trades in three major
economic currency regions, as a result, exposures to exchange rate fluctuations arise. Exchange rate exposures are managed
utilising direct forward and range forward contracts to hedge the exchange rate risk arising from cross-border trade flows
and foreign income.
The group does not enter into or trade financial instruments for speculative purposes.
B. MARKET RISKS – INTEREST RISK
Cash and cash equivalents includes cash at bank, deposits held at call with financial institutions that are readily convertible
to known amounts of cash. This includes cash held by the subsidiaries for business operations/operating expenses purposes.
As at the reporting date, the Group had the following variable rate bank accounts.
2016
2015
Weighted average
interest rate
Balance
Weighted average
interest rate
%
-%
1.30%
$’000
11,442
3,306
14,748
%
-%
1.30%
Balance
$’000
8,432
7,660
16,092
Cash at bank
Cash on deposit
Cash and cash equivalents
An increase/decrease in interest rates of one hundred (2015: one hundred) basis points would have an adverse/favourable
effect on profit after tax of $0.023 million (2015: adverse/favourable effect of $0.053 million) per annum.
The basis point change is based on the expected volatility of interest rates using market data, historical trends over prior
years and the Group’s ongoing relationships with financial institutions.
52
INFOMEDIA ANNUAL REPORT C. FOREIGN CURRENCY RISK
The Group has transactional foreign 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 Group’s product offerings
are typically made on a recurring monthly subscription basis, there is a relatively high degree of reliability in estimating a
proportion of future net cash flow exposures. The Group 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 Group’s investment in both its European and United States subsidiaries, the Group’s statement of financial
position can be affected by movements in both the Euro (EUR) and United States dollar (USD) against the Australian dollar (AUD).
At 30 June, the Group had the following exposure to foreign currency which was held in bank:
Cash and cash equivalents – local currency (in thousands)
US$2,852
US$1,574
2016
2015
2016
€3,993
2015
€3,506
Cash and cash equivalents – Australian dollar (in thousands)
A$3,841
A$2,040
A$5,961
A$5,062
USD exposure
EUR exposure
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
profit and total equity would have been affected as follows.
Estimates of reasonably possible movements:
Currency
AUD/USD
AUD/USD
AUD/EUR
AUD/EUR
Post tax profit
Higher/(lower)
Total equityii
Higher/(lower)
Movement
+10%
-15%
+10%
-15%
2016
$’000
(139)
271
(272)
528
2015
$’000
(72)
141
(117)
228
2016
€’000
(139)
271
(272)
528
2015
€’000
(72)
141
(117)
228
Management believes the balance date risk exposures are representative of the risk exposure inherent in the financial instruments.
D. CREDIT RISK
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The maximum exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net
of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial
statements.
Credit risk of the Group mainly arises from cash and cash equivalents, trade and other receivables and certain derivative
instruments.
The cash and cash equivalents are placed with major banks in those countries where the Group operates and therefore the
credit risk is minimal.
The Company’s credit risk with regard to trade receivables is spread broadly across three automotive groups - manufacturers,
distributors and dealerships. Receivable balances are monitored on an ongoing basis with the result that the Company’s
exposure to bad debts is not significant. As the products typically have a monthly life cycle and are priced on a relatively low
subscription price, the concentration of credit risk is typically low with automotive manufacturers being the exception.
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. The ageing analysis as disclosed in Note 8 shows that majority of the Group’s
trade receivables are within the normal credit term and the receivables impairment loss is immaterial.
E. LIQUIDITY RISK
The Group’s exposure to liquidity risk is minimal given the relative strength of the statement of financial position and cash
flows from operations.
Given the nature of the Group’s operations, operating leases and no borrowings, the Group does not have fixed or contracted
payments at balance date other than with respect of its cash flow hedges which are disclosed below. Consequently the
remaining contractual maturity of the Group’s financial liabilities is as stated in the statement of financial position and is
less than 60 days. Deferred revenue requires no cash outflow.
53
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
The Group’s financial instruments exposed to interest rate and liquidity risk are:
• cash and cash equivalents, refer to section B above for further details;
• trade and other receivables and trade and other payables are non-interest bearing and with credit terms of 30 to 60 days;
and
• as at 30 June 2016, the Group has a total of cash and cash equivalents and trade and other receivables of $21.043 million
(2015: $21.157 million) to meet its future cash outflows of trade and other payables of $5.175 million (2015: $3.435 million)
when due for payment.
F. DERIVATIVES
The following table summarises the forward exchange contracts on hand at reporting date.
2016
Foreign exchange contracts – AUD/USD
Maturity within one year
Foreign exchange contracts – AUD/EUR
Maturity within one year
2015
Foreign exchange contracts – AUD/USD
Maturity within one year
Foreign exchange contracts – AUD/EUR
Maturity within one year
Maturity over one year
Company buys
Company sells
Exchange rate
A$’000
5,694
A$’000
5,685
A$’000
11,651
A$’000
11,134
298
US$’000
4,135
€’000
3,660
US$’000
9,375
€’000
7,500
200
0.726
0.644
0.805
0.674
0.671
The mark to market valuation of these contracts at 30 June 2016 was a net gain of $0.250 million (2015: a net loss of $0.533
million) which is booked directly in equity. The net gain/loss is recognised as assets/liabilities on the face of the statement of
financial position.
Subsequent to reporting date, the Group entered into another form of derivatives, being zero cost collar/range forward
contracts, to mitigate foreign currency exchange risk. The Group terminated all foreign exchange contracts with a small gain.
G. FAIR VALUES
The carrying amounts and estimated fair values of all the Group’s financial instruments recognised in the financial
statements are materially the same. The fair value of the financial instruments is determined as follows:
• Cash – the carrying amount is fair value due to the asset’s liquid nature.
• Receivables/payables – due to the short-term nature of these financial rights and obligations, carrying amounts are
estimated to represent fair values.
• Derivatives – the fair values of derivatives have been calculated by discounting the expected future cash flows at prevailing
interest rates. As market rates are observable they are classified as Level 2.
I. Fair value hierarchy
For all fair value measurements and disclosures, the Group uses the following to categorise the method used:
• Level 1: the fair value is calculated using quoted prices in active markets.
• Level 2: the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (as prices) or indirectly (derived from prices).
• Level 3: the fair value is estimated using inputs for the asset or liability that are not based on observable market data.
II. Valuation techniques used to derive Level 2 fair values
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. The fair value is calculated by reference to forward exchange market rates at reporting date for
contracts with similar maturity profiles.
III. Transfers
During the year ended 30 June 2016, there were no transfers of derivatives between levels 1 and 2 of the fair value hierarchy.
There were also no transfers into or out of level 3 during the period.
54
INFOMEDIA ANNUAL REPORT NOTE 11. CONTINGENCIES
There were no contingent assets or contingent liabilities as at 30 June 2016.
NOTE 12. COMMITMENTS
Contracted non-cancellable leases for property, plant and equipment committed at the reporting date but not recognised as
liabilities or payables are provided below.
OPERATING LEASE COMMITMENTS
Within one year
One to five years
Over five years
2016
$’000
1,660
6,115
2,124
9,899
2015
$’000
1,358
1,419
-
2,777
Operating lease commitments are for office accommodation both in Australia and abroad.
Infomedia has provided a performance bank guarantee to a maximum value of $0.722 million (2015: $0.508 million) relating
to the lease commitments of its corporate headquarters.
NOTE 13. EVENTS AFTER THE REPORTING PERIOD
Other than matters listed below, there have been no matters or circumstances that have significantly affected, or may
significantly affect the operations, results or state of affairs of the Group since the end of the financial year.
A. FINAL DIVIDEND
On 29 August 2016, the Board declared a final dividend for 2016 of 1.00 cents per share, fully franked. The dividend will be
paid on 22 September 2016.
B. LTI GRANTS
On 8 August 2016, the Company granted 2,254,369 performance rights and 5,750,000 share options as part of its long term
incentive (LTI) plan for key management personnel, ie the Executive Team. The LTI represents an allocation for a member of
the Executive Team for FY17, and a three year allocation for the CEO and CFO spanning FY17, FY18 and FY19 performance
periods. Further details on the grants are provided in section G.II and G.III in the Remuneration Report.
NOTE 14. SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the parent entity and the following
subsidiaries.
A. PARENT ENTITY
Infomedia Ltd
B. SUBSIDIARIES
IFM Europe Ltd
Class of shares
Country of
incorporation
Australia
Ordinary shares
United Kingdom
Different Aspect Software Ltd*
Ordinary shares
United Kingdom
IFM Americas Inc.
IFM Germany GmbH
IFM China (WOFE)
Ordinary shares
USA
Ordinary shares
Germany
Ordinary shares
China
* The entity was de-registered during FY16.
2016
%
100.0
-
100.0
100.0
100.0
2015
%
100.0
100.0
100.0
100.0
100.0
55
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
NOTE 15. PROFIT AND LOSS INFORMATION
This provides further information about individual items recognised in
the statement of profit or loss and other comprehensive income:
A. RESEARCH AND DEVELOPMENT COSTS
Total research and development costs incurred during the financial year
Amortisation of deferred development costs
Less: development costs capitalised
Net research and development costs expensed
B. EMPLOYEE BENEFITS
Employee benefits expense
Contributions to defined contribution superannuation funds
Share based payments
C. RENTAL EXPENSE RELATING TO OPERATING LEASES
Minimum lease payments
D. DEPRECIATION AND AMORTISATION
Depreciation expense
Amortisation expense
E. FOREIGN CURRENCY TRANSLATION GAINS/(LOSSES)
Unrealised/realised foreign currency translation gains/(losses)
Cash flow hedges losses
F. ACCOUNTING POLICIES APPLIED
I. Leases
2016
$’000
2015
$’000
15,840
7,446
(8,054)
15,232
31,194
1,669
(9)
2,712
580
7,767
(224)
(1,583)
(1,807)
14,382
6,613
(7,157)
13,838
25,108
1,544
257
1,477
627
7,053
806
(554)
252
Payments made under operating leases are expensed on a straight-line basis over the term of the lease. Lease incentives
relating to operating lease are recognised as a liability and classified as other payables. The other payables are subsequently
decreased through reduction of lease expenses in the profit or loss on a straight line basis over the period of the lease.
II. Employee benefits
a. Short term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, and annual leave expected to be settled wholly before
12 months after the end of the reporting period in which the employees render the related services. They are measured
at the amounts expected to be paid when the liabilities are settled. Related on-costs such as superannuation, workers’
compensation and payroll tax are also included in the liability.
b. Long service leave and annual leave
The liability for long service leave and annual leave are those not expected to be settled wholly before 12 months after the
end of the reporting period. They are 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 periods of service. Expected future payments are discounted using Australian
Government bond rates with terms to maturity that match, as closely as possible, the estimated future cash outflows.
Related on-costs such as superannuation, workers’ compensation and payroll tax are also included in the liability.
c. Post-employment and termination benefits
Superannuation contributions in accordance with the legislative requirements are recognised on a straight line basis.
Termination benefits are recognised at the point of being incurred where relevant.
56
INFOMEDIA ANNUAL REPORT NOTE 16. PROPERTY, PLANT AND EQUIPMENT
2016
Cost
Accumulated depreciation
2015
Cost
Accumulated depreciation
Leasehold
improvements
Furniture and
fittings
Office
equipment
Plant and
equipment
$’000
$’000
$’000
$’000
1,260
(495)
765
497
(446)
51
760
(451)
309
494
(401)
93
10,209
(8,918)
1,291
9,380
(8,493)
887
3,340
(3,332)
8
3,340
(3,316)
24
Total
$’000
15,569
(13,196)
2,373
13,711
(12,656)
1,055
DEPRECIATION RATES
5 to 7 years
5 to 10 years
5 years
3 to 15 years
NOTE 17. CURRENT LIABILITIES – PROVISION FOR EMPLOYEE ENTITLEMENTS
$1.375 million (2015: $1.050 million) of total provision for employee entitlements, classified as current liabilities, is expected
to be settled within 12 months from the reporting date.
NOTE 18. SHARE BASED REMUNERATION
The ultimate objective of share based remuneration is to align the participants with delivery of shareholder value. Long term
incentives, with appropriate performance hurdles, align participants to the longer term strategies, goals and objectives of
the Company, and provide greater incentive to have broader involvement and participation in the Company beyond their
immediate role. Equity participation also assists the Company to attract and retain skilled and experience senior employees.
The obligations under share based payment arrangements are settled by issuing new ordinary shares in the Company, or
acquiring ordinary shares of the Company on market.
Trading in the Company’s ordinary shares awarded under the share based remuneration arrangements is governed by the
Company’s Share Trading Policy. The policy restricts employees from trading in the Company’s shares when they are in a
position to be aware, or are aware, of price sensitive information. The policy also implements blackout periods which prohibit
trading in the Company’s shares in the lead up to the Company’s half year and annual result announcements, unless Board
express approval is obtained.
The Company has the following types of share based remuneration arrangements provided to employees, each arrangement
has different purposes:
• Executive Incentive Plan – under which offers of Share Options (Options) and/or Performance Rights (Rights) may be made
to Executive Team of the Company; and
• Employee Performance Rights and Option Plan – under which Options and/or Rights may be made to eligible employees of
the Company.
Both arrangements are governed by the terms of the Company’s Performance Rights and Option Plan Rules. The Executive
Incentive Plan is also supplemented by the Executive Incentive Plan Rules.
A. EXECUTIVE INCENTIVE PLAN
The Board of Directors first approved the Executive Incentive Plan in the financial year ended 30 June 2015. Effective from 1
July 2016, the Executive Incentive Plan has been amended by the Board as part of a review into the Company’s remuneration
objectives and philosophies, as noted in the Remuneration Report. The Executive Incentive Plan is an integral part of the
Company’s remuneration policy.
The Company provides eligible employees (including the key management personnel) with the opportunity to receive short
term incentives in the form of annual cash bonuses and long term incentives in the form of Options and/or Rights. The Board,
based on recommendations from the Remuneration & Nominations Committee, approves the participation of each individual
(participants) in the plan.
57
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
Long term incentive – Performance rights
The Board approves the issue of Rights to eligible employees. The following general terms relate to all Rights currently on issue:
• Rights are granted for nil consideration;
• the vesting condition of the Rights is not market related and is conditional on meeting the performance hurdles described below;
• participants must remain employed at any relevant vesting and/or exercise date, subject to limited exceptions contained in
the plan rules;
• participants do not receive dividends and do not have voting rights until the rights are exercised and converted into shares;
• before vesting, the Board will determine the number of Rights to vest based on the outcome of the performance hurdles;
• when vesting, each Right will be converted into one Infomedia ordinary share per Right for nil consideration upon exercise by
the participant; and
• if the vesting conditions are not met then the Rights automatically lapse unless a retesting event is specified.
The following performance hurdles and vesting scales apply to the outstanding Rights on issue during the financial year:
Date of grant
Testing date
Rights tested on testing date Performance hurdle Vesting scale
1 October 2014
1 August 2017
100% - unvested Rights lapse Earnings per shares
(EPS) target of
8.5 cents to be
achieved in FY17
Maximum – 120% when EPS
exceeds EPS target by 10%
Minimum – nil if EPS target is
not met
13 October 2015
1 October 2016
50%
EBIT growth target
EBIT growth of 5%
1 October 2017
Retest unvested Rights
EBIT growth target
EBIT growth of 10%
1 October 2018
Remaining 50% plus any
unvested Rights
EBIT growth target
EBIT growth of 15%
The following information relates to the Rights issued under the Executive Incentive Plan:
Fair value at
grant date
$
Rights on
issue at 1 July
Number
Rights granted
during the year
Number
Rights exercised
during the year
Number
Rights lapsed
during the year
Number
Number of
rights at 30 June
On issue
Exercisable
2016
GRANT DATE
1 October 2014
13 October 2015
2015
GRANT DATE
1.150
0.750
614,702
-
-
826,000
614,702
826,000
1 October 2014
1.150
-
-
614,702
614,702
No rights are vested and exercisable as at 30 June 2016 (2015: Nil).
-
-
-
-
-
(190,518)
424,184
(66,000)
760,000
(256,518)
1,184,184
-
-
614,702
614,702
-
-
-
-
-
58
INFOMEDIA ANNUAL REPORT B. EMPLOYEE SHARE OPTIONS PLAN
The Company provides eligible employees (including the key management personnel) with the opportunity to subscribe for
ordinary shares in the form of Options in the Company through the Performance Rights and Option Plan.
The key terms of the Options are:
• granted for nil issue consideration, unless otherwise determined by the Board;
• each Option entitles the participants to subscribe for one Infomedia ordinary share;
• Options generally vest in three equal tranches over a three-year period, subject to the achievement of performance hurdles.
Any un-exercised Options shall lapse on the expiry date;
• participants must remain employed at any relevant vesting and/or exercise date, subject to limited exceptions contained in
the plan rules;
• when Options are exercised by participants, the Company has discretion to transfer existing shares, or to issue new
ordinary shares to satisfy the allocation; and
• the Options on issue during the financial year were subject to the following additional performance hurdles and vesting scales:
Date of grant Vesting dates
Options available
for vesting
Exercise
price
Performance hurdles
for all Options
12 March 2013 15 January 2014
1/3 of the original grant
28 cents
27 September
2013
16 December
2013
15 January 2015
1/3 of the original grant
15 January 2016
1/3 of the original grant
27 September 2014
1/3 of the original grant
56.5 cents
27 September 2015
1/3 of the original grant
27 September 2016
1/3 of the original grant
15 December 2014
1/3 of the original grant
56.5 cents
15 December 2015
1/3 of the original grant
15 December 2016
1/3 of the original grant
The 5-day variable weighted
average price of the
Company’s share price
must exceed the strike price
immediately prior to exercise
as follows:
• 10% for tranche 1;
• 20% for tranche 2; and
• 30% for tranche 3.
Expiry date
1 February
2016
31 October
2016
31 December
2016
The following information relates to the share options issued under the Employee Share Options Plan:
Fair value at
grant date
Options on
issue at 1 July
Options
granted
during the
year
Options
exercised
during the
year
Options
lapsed during
the year
Number of
Options at
30 June
$
Number
Number
Number
Number
On issue
Exercisable
2016
GRANT DATE
12 March 2013
27 September 2013
16 December 2013
2015
GRANT DATE
0.210
0.295
0.295
160,000
750,000
1,043,334
1,953,334
15 January 2012
0.058
900,000
30 May 2012
12 March 2013
27 September 2013
16 December 2013
0.040
1,320,000
0.210
0.295
0.295
240,000
750,000
1,420,000
4,630,000
-
-
-
-
-
-
-
-
-
-
(160,000)
(500,000)
(250,000)
-
-
(86,667)
(80,000)
(746,667)
(330,000)
876,667
876,667
(750,000)
(150,000)
(1,320,000)
(80,000)
-
-
-
-
-
-
160,000
40,000
750,000
250,000
(323,332)
(53,334)
1,043,334
150,000
(2,473,332)
(203,334)
1,953,334
440,000
-
-
-
-
-
-
No Options were granted in the financial year ended 30 June 2016 (2015: Nil).
The fair value of the Options granted under the Employee Share Options 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.
59
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
F. ACCOUNTING POLICIES APPLIED
The fair value of share based payments is recognised as an expense on a straight line basis over the vesting period, with a
corresponding increase in equity. The fair value is calculated on grant date as the fair value of each share granted multiplied
by the number of shares expected to eventually vest. The fair value of the share based payments is based on the market price
of the shares, dividend entitlements, and market vesting conditions (e.g. share price related performance criteria) upon which
the shares were granted. Non-market vesting conditions (e.g. service conditions) are taken into account by adjusting the
number of shares which will eventually vest and are not taken into account in the determination of the grant date fair value.
On a cumulative basis, no expense is recognised for shares granted that do not vest due to a non-market vesting condition
not being satisfied.
NOTE 19. NOTES TO THE STATEMENT OF CASH FLOWS
A. COMPOSITION OF CASH AND CASH EQUIVALENTS
Cash at bank
Cash on deposit
B. RECONCILIATION OF PROFIT AFTER TAX TO NET CASH FROM OPERATING ACTIVITIES
Profit after tax for the year
Adjustments for
Depreciation expense
Amortisation expense
Share based payments
(Gains)/losses on hedging instruments
Change in operating assets and liabilities
Change in trade and other receivables
Change in prepayments
Change in capitalised development costs
Change in intangible assets
Change in trade and other payables
Change in income tax payable
Change in deferred tax liabilities
Change in deferred revenue
Change in provision for employee entitlements
Net cash from operating activities
2016
$’000
11,442
3,306
14,748
2015
$’000
8,432
7,660
16,092
10,323
13,232
580
7,767
(9)
1
(692)
641
(8,054)
-
1,740
(2,449)
(34)
1,306
204
11,324
627
7,053
257
(28)
1,350
(733)
(7,157)
(372)
896
428
285
11
424
16,273
C. SIGNIFICANT NON-CASH TRANSACTIONS IN RELATION TO INVESTING AND FINANCING ACTIVITIES
During the financial year ended 30 June 2015 and 2016, there were no non-cash transactions relating to investing and
financing activities.
60
INFOMEDIA ANNUAL REPORT NOTE 20. RELATED PARTY TRANSACTIONS
A. KEY MANAGEMENT PERSONNEL COMPENSATION
The aggregate remuneration received/receivable by the Directors and other members of key management personnel of the
Group is set out below.
Short term employee benefits
Post-employment benefits
Long term benefits
Termination payments
Share based payments
2016
$
1,439,320
118,224
(1,721)
396,693
242,012
2,194,528
2015
$
1,881,535
177,089
13,428
-
108,803
2,180,855
B. TRANSACTIONS WITH SUBSIDIARIES
All transactions that have occurred among the subsidiaries within the Group have been eliminated for consolidation purposes.
NOTE 21. PARENT ENTITY INFORMATION
The financial information provided in the table below is only for Infomedia Ltd, the parent entity of the Group.
A. STATEMENT OF COMPREHENSIVE INCOME
Profit/(loss) after income tax
Total comprehensive income
B. STATEMENT OF FINANCIAL POSITION
Current assets
Total assets
Current liabilities
Total liabilities
Equity
Share capital
Reserves
Retained earnings
Total equity
2016
$’000
13,173
12,623
15,813
56,760
6,211
12,352
12,451
859
31,098
44,408
2015
$’000
13,580
14,305
15,519
54,929
7,580
13,465
12,074
318
29,072
41,464
C. SIGNIFICANT ACCOUNTING POLICIES APPLIED
The accounting policies of the parent entity are consistent with those of the Group, except for Investments in subsidiaries
which are accounted for at cost, less any impairment. Dividends received are recognised as income by the parent entity and
its receipt may be an indicator of an impairment of the investment.
D. GOING CONCERN
The parent entity financial statements have been prepared on a going concern basis.
E. GUARANTEES ENTERED INTO BY THE PARENT ENTITY IN RELATION TO THE DEBTS OF ITS SUBSIDIARIES
The parent entity has no guarantees in relation to the debts or other forms finance of its subsidiaries as at 30 June 2016 and
30 June 2015.
F. CONTINGENT ASSETS/LIABILITIES
Other than the following guarantee, there were no contingent assets and contingent liabilities as at 30 June 2016:
The parent entity has provided a performance bank guarantee to a maximum value of $0.722 million (2015: $0.508 million)
relating to the lease commitments of its corporate headquarters.
G. CAPITAL COMMITMENTS
The parent entity has no capital commitments as at 30 June 2016 and 30 June 2015.
61
INFOMEDIA ANNUAL REPORT Notes to the Financial Statements continued
For the year ended 30 June 2016
NOTE 22. REMUNERATION OF AUDITORS
A. AUDIT AND REVIEW SERVICES
Audit or review of the financial statements
B. SERVICES OTHER THAN AUDIT AND REVIEW OF FINANCIAL STATEMENTS
Taxation compliance and advisory services
Other assurance services
2016
$
2015
$
117,417
108,000
25,000
10,000
152,417
25,000
4,465
137,465
NOTE 23. OTHER SIGNIFICANT ACCOUNTING POLICIES
A. TRADE AND OTHER PAYABLES
These amounts represent payable on invoiced amounts and liabilities for goods and services provided to the Group prior to
the end of the financial period and which are unpaid. The amounts are unsecured and are usually paid within 30 days
of recognition.
B. DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING
Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. Derivative
financial 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 flow hedges, are
taken directly to profit or loss for the year.
Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is recognised directly in equity, while the ineffective
portion is recognised in profit or loss.
Amounts taken to equity are transferred out of equity and included in the measurement of the hedged transaction when the
forecast transaction occurs. The Group tests each of the designated cash flow hedges for effectiveness on a monthly basis
both retrospectively and prospectively using the matched terms principle.
At each balance date, hedge effectiveness is measured in the first instance by determining whether there have been any changes
to these matched terms. When there have been no changes to these matched terms, the hedge is considered to be highly
effective. Where there has been a change to these terms, effectiveness is measured using the hypothetical derivative method.
C. FOREIGN CURRENCY
I. Foreign currency transactions
Transactions denominated in foreign currencies are translated into the functional currency of the operation using the
spot exchange rates at the date of the transaction. Foreign currency monetary assets and liabilities at balance date are
translated into the functional currency using the spot exchange rates current on that date.
The resulting differences on monetary items are recognised as exchange gains or losses in the financial year in which the
exchange rates difference arises. Foreign currency non-monetary assets and liabilities that are measured in terms of
historical cost are translated using the exchange rates at the date of the transaction.
Foreign currency non-monetary assets and liabilities that are stated at fair value are translated using exchange rates at the
dates the fair value was determined. Where a non-monetary asset is classified as an available-for sale financial asset, the
gain or loss is recognised in other comprehensive income.
II. Financial reports of foreign operations
The assets and liabilities of foreign operations are translated to Australian dollars at exchange rates at the reporting date.
The income and expenses of foreign operations are translated at rates approximating the foreign exchange rates ruling at
the dates of the transactions. Foreign exchange differences arising on translation are recognised in other comprehensive
income and presented in the foreign currency translation reserve.
62
INFOMEDIA ANNUAL REPORT D. AUSTRALIAN ACCOUNTING STANDARDS ISSUED AND NOT YET EFFECTIVE
The Company has early adopted and applied a revised Accounting Standard AASB 2015-2, Amendments to Australian
Accounting Standards – Disclosure Initiative: Amendments to AASB 101, which is not yet mandatory for the year ended 30
June 2016.
New, revised or amending Accounting Standards and Interpretations will be adopted by the Company in the operating year
commencing 1 July after the effective date of these standards and interpretations as set out in the table below.
Title
Description
Effective date
Operating year
Note
AASB 15
Revenue from Contracts with Customers
1 January 2018
30 June 2019
AASB 2014-5
Amendments to Australian Accounting Standards
arising from AASB 15
AASB 2015-8
Amendments to Australian Accounting Standards
arising – Effective Date of AASB 15
AASB 9
Financial Instruments
AASB 2014-7
Amendments to Australian Accounting Standards arising
from AASB 9 (December 2014)
AASB 2014-8
Amendments to Australian Accounting Standards arising
from AASB 9 (December 2014) – Application of AASB 9
(December 2009) and AASB 9 (December 2010)
1 January 2018
30 June 2019
(i)
(i)
1 January 2018
30 June 2019
(ii)
1 January 2018
30 June 2019
1 January 2018
30 June 2019
(iii)
(iii)
1 January 2018
30 June 2019
(iii)
AASB 16
Leases
1 January 2019
30 June 2020
(i)
Table note
(i) The financial impact of these changes is yet to be assessed by the Group.
(ii) Implementation of AASB 15 has been changed from 1 January 2017 to 1 January 2018.
(iii) The financial impact of these changes is yet to be assessed by the Group and these changes are not expected to have a
significant financial impact, if any.
63
INFOMEDIA ANNUAL REPORT Directors’ declaration
In the opinion of the Directors of Infomedia Ltd (the Company):
• the consolidated financial statements and notes 1 to 23, including all the remuneration disclosures that are contained in
the Remuneration Report of the Directors’ Report, are in accordance with the Corporations Act 2001, including:
- giving a true and fair view of the financial position of the Group as at 30 June 2016 and of its performance for the year
ended on that date; and
- complying with Australian Accounting Standards (including Australian Interpretations) and the Corporations
Regulations 2001; and
• the financial report also complies with International Financial Reporting Standards as disclosed in Note 1; and
• there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and
payable.
The Directors have been given the declaration required by section 295A of the Corporations Act 2001 from the Chief
Executive Officer and Chief Financial Officer for the financial year ended 30 June 2016.
Signed at Sydney on 29 August 2016 in accordance with a resolution of the Directors.
Fran Hernon
Chairman
64
INFOMEDIA ANNUAL REPORT
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
INDEPENDENT AUDITOR’S REPORT
To the members of Infomedia Ltd
Report on the Financial Report
We have audited the accompanying financial report of Infomedia Ltd, which comprises the
consolidated statement of financial position as at 30 June 2016, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated 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 1, 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.
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 Ltd, 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 Ltd 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 2016
and of its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in
Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 22 to 36 of the directors’ report for the
year ended 30 June 2016. 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 Ltd for the year ended 30 June 2016 complies
with section 300A of the Corporations Act 2001.
BDO East Coast Partnership
Grant Saxon
Partner
Sydney, 29 August 2016
Shareholder information
As at 23 August 2016
1. ORDINARY SHARE CAPITAL
There were 6,084 shareholders holding a total of 309,986,854 fully paid ordinary shares.
2. DISTRIBUTION OF SHAREHOLDERS AND SHAREHOLDINGS
Range
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001 and above
Total
Number of holders
Number of shares % of issued capital
616
1,991
1,243
2,081
147
6,078
402,018
6,203,580
10,195,117
62,402,683
230,783,456
309,986,854
0.13
2.00
3.29
20.13
74.45
100.00
The number of shareholders holding less than a marketable parcel is 276.
3. TOP 20 SHAREHOLDERS
Name
J P Morgan Nominees Australia Limited
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
National Nominees Limited
Bell Potter Nominees Ltd
BNP Paribas Nominees Pty Ltd
BNP Paribas Noms Pty Ltd
Brispot Nominees Pty Ltd
RBC Investor Services Australia Nominees Pty Limited
RBC Investor Services Australia Pty Limited
RBC Investor Services Australia Nominees Pty Limited
UBS Nominees Pty Ltd
Anacacia Pty Limited
Pershing Australia Nominees Pty Ltd
Citicorp Nominees Pty Limited
Mr Peter Alexander Brown
AMP Life Limited
Bond Street Custodians Limited
CS Fourth Nominees Pty Limited
Escor Equities Consolidated Pty Ltd
Total
4. SUBSTANTIAL SHAREHOLDERS
Number of shares % of issued capital
58,460,756
28,596,764
24,895,761
22,032,746
11,961,107
11,933,023
10,549,973
7,407,557
7,379,956
4,716,251
4,518,488
2,365,094
1,960,085
1,828,736
1,353,859
1,350,000
1,253,385
1,243,232
994,890
800,000
205,601,663
18.86%
9.23%
8.03%
7.11%
3.86%
3.85%
3.40%
2.39%
2.38%
1.52%
1.46%
0.76%
0.63%
0.59%
0.44%
0.44%
0.40%
0.40%
0.32%
0.26%
66.33%
The following information is extracted from substantial shareholder notices received by the Company.
Name
Viburnum Funds Pty Ltd
Commonwealth Bank of Australia
Greencape Capital Pty Ltd
Total
Number of shares % of issued capital
28,581,829
19,656,479
16,350,011
64,588,319
9.22
6.34
5.28
20.84
67
INFOMEDIA ANNUAL REPORT Shareholder information continued
As at 23 August 2016
5. UNQUOTED EQUITY SECURITIES
Unquoted share options
Employees
Non-Executive Directors
Unquoted performance rights
Employees
Non-Executive Directors
6. VOTING RIGHTS
Fully paid ordinary shares
Number of shares
Number of holders
6,626,667
-
4,075,319
-
11
-
31
-
The voting rights are governed by the Company’s constitution. Shareholders are entitled to vote in person or by proxy at any
meeting of shareholders of the Company on :
• a show of hands – one vote per shareholder; and
• a poll – one vote for each share.
Unquoted share options and performance rights
Unquoted share options and performance rights carry no voting rights.
7. SHARE BUY-BACK
Infomedia does not have a current on-market buy-back in operation.
68
INFOMEDIA ANNUAL REPORT CORPORATE DIRECTORY
INFOMEDIA LTD (ASX:IFM)
ABN 63 003 326 243
DIRECTORS
Fran Hernon – Non-Executive Chairman
Jonathan Rubinsztein – CEO & Managing Director
Clyde McConaghy
Anne O’Driscoll
Bart Vogel
COMPANY SECRETARIES
Nick Georges
Daniel Wall
CHIEF FINANCIAL OFFICER
Richard Leon
REGISTERED OFFICE
Address
3 Minna Close
Belrose Sydney NSW 2085
Telephone
+61 2 9454 1500
Website
www.infomedia.com.au
SHARE REGISTRY
Boardroom Pty Ltd
Grosvenor Place, Level 12, 225 George Street,
Sydney, NSW, 2000
Telephone
Within Australia: 1300 737 760
International: +61 29290 9600
Email
enquiries@boardroomlimited.com.au
Website
http://www.boardroomlimited.com.au/index.php
AUDITORS
BDO Australia
Level 10, 1 Margaret Street
Sydney NSW 2000
All statements other than statements of historical fact included within this presentation, including statements regarding
future goals and objectives of Infomedia, are forward-looking statements. Forward-looking statements can be identified
by such words as ’looking forward’, ‘anticipate’, ‘believe’, ‘could’, ‘estimate’, ‘expect’, ‘future’, ‘intend’, ‘may’, ‘opportunity’, ‘plan’,
‘potential’, ‘project’, ‘seek’, ‘will’ and other similar words. Future looking statements involve risks and uncertainties. These
statements are based on an assessment of present economic and operating conditions, and based on assumptions and
estimations regarding future conditions, events and actions. Such statements do not guarantee future performance, involve
risk, and uncertainty. Factors such as these are beyond the control of the company, its directors and management and could
cause Infomedia’s actual results to differ materially from the results expressed in these statements. The Company does not
give any assurance that the results, performance or achievements expresses or implied by the forward-looking statements
contained in this presentation will actually occur. Investors are cautioned not to place reliance on these forward-looking
statements. Infomedia will where required by applicable law and stock exchange listing requirements, revise forward-looking
statements or publish prospective financial information in the future. Whilst all care has been exercised in the preparation
of these materials they are not warranted as free from error. Investors should rely on the Company’s published statutory
accounts when forming any investment decisions.