ANNUAL REPORT
2017 TABLE OF CONTENTS
CHAIRMAN'S REPORT
OUR CORE VALUES
CEO'S REPORT
PRODUCT OVERVIEW
VOICE OF THE CUSTOMER
DIRECTORS’ BIOGRAPHIES
DIRECTORS’ REPORT
REMUNERATION REPORT – AUDITED
LEAD AUDITOR’S INDEPENDENCE DECLARATION
FINANCIAL REPORT
DIRECTORS’ DECLARATION
AUDIT REPORT
SHAREHOLDER INFORMATION
CORPORATE DIRECTORY
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ABN 63 003 326 243
© 2017 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
page 70 for an explanation of forward looking statements and the risks,
uncertainties and assumptions to which they are subject.
AR2017 CHAIRMAN’S
REPORT
Thank you for your support of Infomedia Ltd in the
2017 Financial Year.
The 2017 financial year was characterised by three
major themes. First, we lifted our engagement
with customers to a new level and delivered
strong momentum in new global sales. Second,
we accelerated the pace and scale of our product
development across all products to meet the needs of
our customers and the new sales contracts. Third, we
have continued to build the strong leadership team to
take this business forward in the years to come.
Infomedia remains focused on growth in its core
business, expanding our footprint in our three key
products in the three regions in which the Group
operates.
In the 2017 financial year, Infomedia secured
contract wins with its customers, global automakers
and their dealership partners, in each product, the
Electronic Parts Catalogue (EPC), Superservice
Menus™ and Superservice™ Triage™, across the
Asia-Pacific, Europe and the Americas.
We also welcomed a new global partnership with
Nissan Motors on the back of a competitive and
successful bid to build and supply an EPC to Nissan’s
global dealership network. Our existing relationship
with Nissan Europe, for the rollout of our Superservice
Menus™ and Superservice™ Triage™ products, also
expanded into new markets on the continent.
FY17 Performance
Infomedia’s results for the financial year ended 30
June 2017 (FY17) are in line with the Company’s
expectation of modest revenue growth and
managing costs to similar levels to the preceding
half financial year.
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AR2017
Infomedia reported revenue growth of $2.4m to
$70.5m for the 12 months to 30 June 2017, an
increase of 4% on the previous year (FY16: $68.1m)
although underlying revenue growth was stronger at
7% on a constant currency basis.
Net profit after tax (NPAT) was $12.0m, up 16%
(FY16: $10.3m), in line with our expectation to
maintain double digit growth on the prior year.
Infomedia’s financial position remains strong
with net current assets of $12.5m at 30 June 2017
(FY16: $13.2m) including cash and cash equivalents
of $13.3m (FY16: $14.7m).
Infomedia’s operating costs slightly decreased
in the year to $54.8m, down 1% (FY16: $55.3m).
Investment will continue as the company remains
committed to driving near term growth but also
investing in development and delivery to support
sustainable growth into the future.
Infomedia’s 2017 financial performance is the result
of a strategic focus on our core business, investing
in new product development to support current and
future growth and rigorous commercial decision
making by Infomedia’s management along with the
full support of the Board.
Infomedia will continue to invest in infrastructure
and resources to build a larger and more resilient
organisation. We also continue to invest in our
employees at the leadership and development level
and in the processes that stabilise our products and
support systems.
Infomedia’s online Electronic Parts Catalogue, Microcat® EPC, automatically updates to the latest automaker
(OEM) parts data to support growth in dealer part sales, productivity and customer satisfaction.
Infomedia’s Microcat® EPC platform is used by over 120,000 parts department professionals around the
world. Infomedia produces the flagship Microcat® EPC for manufacturers including Daihatsu, Fiat Chrysler,
Ford, Honda, Hyundai, KIA, Lexus, Nissan and Toyota.
AR2017
3
“Infomedia welcomed a new global partnership with Nissan Motors in FY17”
CHAIRMAN’S
REPORT
We are deliberately investing in tomorrow instead of
cost saving for today and improving the core of the
business to execute and realise growth. The renewed
customer engagement and significant sales contract
wins are direct outcomes of these investments.
Developing performance culture
Within the business, there has been an emphasis
during the year on developing a high performing and
customer centric culture.
Infomedia introduced a set of Core Values that
were defined by our employees. These Core Values
form the basis of discussions and decisions at every
level determining who we are, what we stand for in
principle and how we work together as a team.
Our aim is to empower our automotive partners by
improving their profitability and supporting their
customers’ service and brand experience.
As Infomedia continues to grow in the ever-evolving
global technology landscape, our Core Values will
guide Infomedia toward our objectives and the
objectives of our customers.
Infomedia’s Core Values are highlighted in detail on
the following page.
Looking ahead
Software as a service (SaaS) is a global growth
industry. The parts and service sectors of the global
automotive industry are also growing. We continue
to believe that we have the right model and we are
playing in the right arena.
We remain focused on sticking close to our core
business to capitalise on the assets and expertise
within our business. As a SaaS provider in a growing
industry, the opportunity to support the growth of
our customers and their brands remains strong.
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AR2017
Dividend
This time last year, the company indicated
the Dividend Policy was under review. Capital
management continues to be an ongoing and active
discussion for the Board. The dividend for the 2017
financial year of 2.9 cents per share fully franked
is at the lower end of the dividend payout ratio of
75%-85% of NPAT, reflecting our commitment to
retain capital for investment.
Acknowledgement
Infomedia’s management team, under the
leadership of Jonathan Rubinsztein has, made great
strides in ensuring Infomedia continues to provide
innovative, market leading software to the global
automotive industry today and into the future. A
concerted focus on leveraging our global presence
and large customer base has contributed to our
growth in the 2017 financial year.
Thank you to Jonathan, his team and all of
Infomedia’s dedicated employees around the world.
I’d also like to thank Anne O’Driscoll, Clyde
McConaghy, and Paul Brandling for their expertise
and systematic dedication to governance.
The Board looks forward to an exciting 2018
financial year ahead as the Company continues to
build on the momentum and achievements realised
this year.
Bart Vogel
Chairman
OUR CORE
VALUES
Together we create success by:
Accelerating Performance
We’re action orientated and always accountable
to our customers.
Driving Innovation & Service
Our technology leadership empowers
our customers.
Navigating Global, Steering Local
Our customers benefit from a unified Infomedia
approach with local execution.
Having Fun in the Fast Lane
We balance hard work with a fun and
vibrant workplace.
AR2017
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CEO’S
REPORT
It has been just over a year since I joined Infomedia
as CEO and most of that time has been focused on
getting to the core of our business, identifying it,
investing in it and improving our delivery.
The 2017 financial year was defined by strong sales
results, investment in product development and
building on our existing customer relationships to
deliver increased revenue in all regions.
Internally, we have concentrated on building a
culture around a core set of values highlighted by the
Chairman and illustrated on the preceding page.
Infomedia’s culture is built on the foundation of who
we are, what we stand for and how we work. Our
Core Values are central to the way we engage with
each other, our customers, our partners and our
shareholders.
Infomedia’s business is in three core products, our
Electronic Parts Catalogue (EPC), and our Superservice
Menus™ and Superservice™ Triage™ products.
Our ability to execute well is imperative to
realising that success. Our customers are central
to accomplishing this goal and we are committed
to developing a culture with a customer mindset,
aligning what we say and do at every level of our
organisation.
Since joining Infomedia in March 2016, the team and
I uncovered challenges due to a lack of investment.
We also see more opportunity than I initially
anticipated when joining Infomedia.
This time last year, I identified the areas that
we would focus on to address some of the
obstacles that arose from an extended period of
underinvestment.
Since then, we have invested in our future.
Investment in Infomedia has been critical to our
evolution and we will continue to invest in product
development and delivery capability to support
recurring revenue generation, meet current demand
and support future growth.
Our products deliver high quality, automaker original
data in a digital and user-friendly format that
improves the productivity and profitability of our
dealership customers.
I am pleased to say we are feeling positive about
progress so far.
Winning new business is the key driver by our
increased investment.
We create software solutions for our automaker
partners, the original equipment manufacturers,
that enable them to track original parts and service
levels globally, invaluable data that supports their
own focus on original parts sales, customer loyalty
and brand retention efforts.
During the year, we introduced new systems including
business management software, sales systems and
customer management tools. We are investing in new
functionality in our existing products and growing
business in Europe and the Americas. We are also
supporting further growth in Asia Pacific.
The opportunity within our current core products,
in the geographic regions that we operate and our
existing global relationships with original equipment
manufacturers, are enough to support what I believe
will become an Australian-based global success story.
We’ve invested in our global sales and marketing
initiatives to leverage our relationships with global
automakers. We’ve also devoted resources to our
commercial efforts to ensure an efficient and
competitive contract negotiation process.
6 AR2017
“The Nissan EPC contract win followed a global tender. It is significant in
size and signifies the competitiveness of Infomedia’s products globally.”
Microcat Live
Superservice Menus™
These initiatives are paying dividends.
FY17 Highlights
Infomedia has undergone change at every
level of the organisation and those changes
are resulting in progress. Revenue increased
7% on a constant currency basis in the 2017
financial year, meeting the expectations set by
management and announced to the market.
During the year, we announced the Company’s
largest global contract win with Nissan Motors to
deliver an EPC product for Nissan dealerships
around the world. The win, following a global
tender, is significant in size and signifies the
competitiveness of our products globally.
The Nissan rollout is scheduled to commence
early in the 2018 calendar year. Annualised
revenue from the Nissan EPC contract should
represent approximately 10 percent of FY16
revenue after complete installation across the
Nissan dealership network.
We have also extended our contract with Nissan
in Europe for our Superservice Menus™ and
Superservice™ Triage™ products to additional countries
not covered in the initial contract announced
mid-year 2015.
We continue to expand our reach with automakers not
previously using Infomedia’s products in Europe and
the Americas.
Announcing contract wins individually is limited to
large contracts that will have a material impact on
annual revenue. However, Infomedia has won additional
contracts during the 2017 financial year across product
and region and varying in size.
We have also introduced new senior executives to the
leadership team in the areas of IT, sales, operations
and legal.
Regional update
In the Asia Pacific, the team have done a terrific job
this year securing the global contract with Nissan for
a global EPC and signing several small contracts in
the region. In the period, we have seen some growth in
China for our Superservice products.
AR2017
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“I am very enthused by our acquisition of the CRM software product that will
become Microcat CRM.” – Jonathan Rubinsztein
CEO’S
REPORT
In the Americas, we have seen growth in our existing
relationships including KIA’s Customer Value
Innovation System (CVIS) and welcomed many
smaller contracts with new automaker relationships.
We also successfully launched the Superservice
products in Mexico.
In Europe, we are seeing growth in our products
with existing relationships including Mitsubishi
who has signed contracts for Superservice Menus™
in new markets in Europe. We have also secured
contracts for our Superservice™ Triage™ product
in new markets with existing and new automaker
relationships. The pilot programs and roll-out of our
initial Nissan Superservice Menus™ contract is on track.
Operational performance
FY17 revenue growth of $2.4m (4% pcp), or 7%
on a constant currency basis was in line with our
expectations and guidance.
During FY17, we adopted cash EBITDA as a key
performance measure to provide a transparent view
of the underlying level of activity and investment in our
products, particularly in a period where upfront cash
investment is critical to deliver future revenue growth.
Mergers & acquisitions
Since the end of the financial year, we completed
the acquisition of a CRM software product known
as FieldForce. This will be rebranded as Microcat
CRM and will extend our parts portfolio for our
customers. For a modest initial investment we have
acquired an Australian developed complementary
product which will support original parts sales for
both automakers and dealers worldwide.
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AR2017
Outlook
Looking ahead, the management and the Board
of Infomedia believe the Company will continue to
drive earnings growth at a similar rate to the 2017
financial year.
The product development decisions made in the
last year are an investment in future sustainable
growth. Infomedia will continue to invest in the
core business where ongoing growth opportunities
exist with our current and new customers. Further
growth may come via acquisition in areas close to
the core.
The outlook for FY18 is a financial year that will be
defined in two distinct halves. The remainder of the
2017 calendar year will recognise the completion of
a contract due to roll-off by the end of December
2017. The global Nissan EPC contract is on track to
start generating revenue in the first three months
of the 2018 calendar year with the full rollout due to
be completed in October 2018.
These combined events are expected to result in a
subdued first-half FY18 for the six months to the
end of December 2017 and a stronger second-half
for the six months ending 30 June 2018. Overall
for the 2018 financial year, Infomedia expects to
maintain underlying growth momentum for year on
year revenue and profitability.
Jonathan Rubinsztein
Chief Executive Officer
PRODUCT
OVERVIEW
Electronic Parts Catalogue
Trade Parts Ordering
Collision Parts Ordering
Wholesale Parts CRM
Digital Precision
Quoting
Digital Vehicle
Inspection
Self service booking
and quoting
Online service
history
Customer surveys
AR2017
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VOICE OF THE
CUSTOMER
“Having gone through a global competitive tender, we are very
excited to have selected Infomedia as our partner. We believe
that they have the best technology, people and organisation for
our global rollout, and we look forward to implementing their EPC
throughout our business to drive the business change needed to
get us on to a world leading platform.”
Mr Shigeru Narita, Nissan Global Executive
“Superservice has exceeded our expectations. It enables us to work smarter
and more efficiently, which builds sales and profitability. Just as importantly,
Superservice is an incredible customer service tool that builds trust
and relationships.”
Peter Lanzavecchia, President of Burns Hyundai & Burns Buick GMC.
“I can always count on Microcat to identify the right parts and give completely
accurate, up-to-date parts information. Microcat is the right EPC for us.”
Alan Vice, Parts Manager at Lucas Ford
10 AR2017
“Using Superservice has increased our parts and service sales 34% and our
dollars per RO (repair order) are up over 18%. Superservice is the best.”
Abe Razick & Adli Kakish, Co-Owners, Hyundai of Yuma, AZ
Fastest growing Hyundai dealership in America in 2015
“I’ve seen it all after 28 years in Parts. Microcat is the best EPC. It’s a tried and true
EPC that just doesn’t let us down.”
Jared Martz, Parts Director, for Deery Brothers Ford-Lincoln
“We identified approximately £430 pounds per vehicle health check, of that
£430 we sold £185. It’s not just a question of securing ROI; it’s how big it will be.”
Andrew Christmas, Aftersales Manager, Marshall Volvo
“Parts sales are up 15 – 18% since using Microcat EPC, and that has a very
significant impact on our profitability.”
Danton Goulet, Parts Director for Zeigler Auto Group
AR2017
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2017 FINANCIAL REPORT CONTENTS
DIRECTORS’ BIOGRAPHIES
DIRECTORS' REPORT
REMUNERATION REPORT – AUDITED
LEAD AUDITOR’S INDEPENDENCE DECLARATION
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. Basis of preparation
Note 3. Critical accounting judgements, estimates and assumptions
Business performance
Note 4. Operating segments
Note 5. Earnings per share
Note 6. Equity - Dividends
Note 7. Income tax
Significant operating assets and liabilities
Note 8. Non-current assets - Intangibles
Note 9. Current assets - Trade and other receivables
Capital and financial risk management matters
Note 10. Equity – Issued capital and treasury shares held in trust
Note 11. Financial instruments
Note 12. Contingencies
Note 13. Commitments
Note 14. Events after the reporting period
Group structure
Note 15. Interests in subsidiaries
Additional information and disclosures required by Accounting Standards
Note 16. Revenue
Note 17. Expenses
Note 18. Share-based remuneration
Note 19. Reconciliation of profit after income tax to net cash from operating activities
Note 20. Related party transactions
Note 21. Key management personnel disclosures
Note 22. Parent entity information
Note 23. Remuneration of auditors
Note 24. Other accounting policies
DIRECTORS' DECLARATION
AUDIT REPORT
SHAREHOLDERS INFORMATION
CORPORATE DIRECTORY
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Bart Vogel
Jonathan Rubinsztein
Paul Brandling
Clyde McConaghy
Anne O’Driscoll
BART VOGEL BCom (Hons), FCA, GAICD
Independent Non-Executive Chairman
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, BAI Communications Ltd, Salmat Limited 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.
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).
PAUL BRANDLING, BSc Hons, MAICD
Independent Non-Executive Director
Paul Brandling was appointed to the Infomedia Board of
Directors on 1 October 2016. Mr Brandling has 30 years’
experience in the local and international technology sector.
He previously held the position of Vice President and
Managing Director of Hewlett-Packard South Pacific from
2002 to 2012. Prior to that time, Mr Brandling was Vice
President and Managing Director of Compaq South Pacific
between 2000 and 2002. Mr Brandling was also a member
of the International CEO Forum (Australia) from 2001 to
2012 and served as a Director of the Australian Information
Industry Association (AIIA) from 2002 to 2011.
Mr Brandling began his career as an engineer in the motor
industry working for major manufacturers in both Europe
and Australia.
Mr Brandling currently serves as a Non-Executive Director of
Integrated Research Ltd and Tesserent Limited. Previously
he also served as a Non-Executive Director of Amcom
Telecommunications Ltd and Vocus Communications Ltd.
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.
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, both including Automotive industry
analysis divisions. He is currently a director of Serko. He is
also Managing Director of Optima Boards, a Board advisory
firm for companies and non-for-profit entities worldwide.
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 35
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.
Ms O’Driscoll is on the boards of Commonwealth Bank’s
insurance subsidiaries (CommInsure), Steadfast Group
Limited and MDA National Insurance Pty Ltd.
AR2017
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DIRECTORS’ REPORT
The Directors present their report, together with the consolidated financial statements of Infomedia Ltd
(referred to hereafter as the ‘Company’) and its subsidiaries (‘Infomedia’ or the ‘Group’) for the financial year
ended 30 June 2017, along with the auditor’s report.
DIRECTORS
The following persons were directors of Infomedia Ltd during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Bart Vogel
Jonathan Rubinsztein
Paul Brandling
Clyde McConaghy
Anne O’Driscoll
Fran Hernon
Chairman & Independent Non-Executive Director
Managing Director & Chief Executive Officer
Independent Non-Executive Director (appointed 1 October 2016)
Independent Non-Executive Director
Independent Non-Executive Director
Independent Non-Executive Director (resigned 30 September 2016)
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
Bart Vogel
Jonathan Rubinsztein
Paul Brandling
Clyde McConaghy
Anne O’Driscoll
Company
Macquarie Telecom Ltd
Sedgman Ltd
Salmat Limited
None
Integrated Research Limited
Tesserent Limited
Vocus Communications Limited
Serko Limited (NZX)
Integrated Research Limited (ASX)
Steadfast Group Limited
Period of directorship
Since 2014
From 2014 to 2015
Since 2017
Since 2015
Since 2015
From 2015 to 2016
Since 2014
From 2007 to 2014
Since 2013
Particulars of the Directors’ qualifications and experience are set out under Board of Directors on page 13.
PRINCIPAL ACTIVITIES
Infomedia 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, the United Kingdom and the USA, serving the Group’s customers across the world.
During the financial year, the principal continuing activities of the consolidated entity consisted of:
• 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.
DIVIDENDS
Details of dividends paid or declared by the Company during the financial year ended 30 June 2017 are set out in Note 6.
OPERATING AND FINANCIAL REVIEW
Infomedia reported revenue growth of 4% to $70.474 million for the year ended 30 June 2017 (‘FY17’),
although underlying revenue growth was stronger at 7% on a constant currency basis. This modest growth is
line with guidance.
The Company’s net profit after tax (‘NPAT’) was $11.953 million, a 16% growth from the previous
corresponding period.
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Infomedia has adopted adjusted earnings before interest, tax, depreciation and amortisation “Cash EBITDA”
as another key performance measure along with profitability (NPAT). Cash EBITDA acknowledges the cash
impact of investing in development costs that are capitalised in reported NPAT. The Company believes Cash
EBITDA offers a more transparent view of the underlying level of activity and investment in products.
Reflecting the increased investment, the Company reported a decline of 10% in Cash EBITDA when compared
with the previous corresponding year ended 30 June 2016.
A summary of the results is shown below:
Revenue (a)
NPAT
EBITDA (b)
Development expenses capitalised
Cash EBITDA
Earnings per share (cents)
Dividend per share (cents), excluding special dividend
Special dividend per share (cents)
(a) Revenue details:
By geographical location (local currency)
Worldwide revenue (AUD)
Asia Pacific (AUD)
EMEA (EUR)
Americas (USD)
* Worldwide revenue grew 7% on constant currency basis.
(b) Reconciliation of EBITDA to NPAT
EBITDA
Finance income (interest)
Depreciation and amortisation expenses
Income tax expense
NPAT
2017
$’000
70,474
11,953
25,219
(13,715)
11,504
3.85
2.90
-
2017
’000
70,474
17,054
20,476
17,874
2017
$’000
25,219
36
(9,717)
(3,585)
11,953
2016
$’000
68,087
10,323
20,897
(8,054)
12,843
3.33
2.65
0.25
2016
’000
68,087
15,749
19,958
16,044
2016
$’000
20,897
71
(8,347)
(2,298)
10,323
Movement
%
4%
16%
21%
70%
(10%)
16%
9%
(100%)
Movement
%
4%*
8%
3%
11%
Movement
%
21%
16%
The 2017 financial year delivered some strong outcomes for Infomedia. The year was defined by strong sales
results, investment in product development and building on the existing customer relationships to deliver
increased revenue in all regions.
The Company remains focused on growth in the core business, expanding the footprint in the three key
products in the three regions in which the Group operates. Infomedia has delivered a positive momentum
in sales securing global and regional contract wins in FY17. To meet increased demand, the Company has
continued to invest in product development and delivery capability to reduce the time between contract wins
and recognising initial monthly recurring revenue.
The financial position of the Company remains strong with net current assets of $12.530 million as at
30 June 2017 (30 June 2016: $13.213 million) including cash and cash equivalents of $13.313 million
(30 June 2016: $14.748 million). The Company has no debt.
15
AR2017 DIRECTORS’ REPORT continued
BUSINESS OBJECTIVES, STRATEGY AND PROSPECTS
BUSINESS OBJECTIVES
Infomedia is a Software as a Service (‘SaaS’) provider to the parts and service sectors of the global automobile
industry. The Group’s focus is assisting the global automotive manufacturers drive productivity and profitability
through their distributor and dealer channels (Infomedia’s customers).
The Group strives to deliver sustainable, long-term performance for the 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 the customers’ 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 its partners, clients and customers.
• Driving innovation and service: Infomedia is committed to delivering innovative software products and
services. Investment into ongoing product research and development efforts is essential to remain abreast of
the ever-evolving requirements of the customer base both in the immediate and the longer term. Innovation
powers Infomedia’s service software and assists clients to serve their customers quickly and efficiently.
• Thinking global, acting local: Infomedia seeks to identify and capitalise on new and emerging trends. The
Group has a strong presence in North America, Europe and the Asian Pacific markets and anticipates 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. The Group’s 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.
Growth is pursued in accordance with appropriate risk appetites, and is balanced against ongoing delivery of
tangible shareholder returns.
STRATEGIES
Infomedia remains focused on growth in its three core products, Microcat Electronic Parts Catalogue (‘EPC’),
SuperserviceTM MenusTM and TriageTM products.
Investment in product development has been critical to progress. The Group will continue to invest to support
recurring revenue generation, meet current demand and underwrite future growth.
The Group is also looking to supplement the organic growth through new product enhancements, leveraging
existing information and evaluating opportunities in adjacent markets as well as smaller-scale merger and
acquisition opportunities close to the core of Infomedia’s business.
Internally, the Group has concentrated on building a culture around a core set of values. Infomedia’s culture
is built on the foundation of ‘who we are, what we stand for and how we work’. Infomedia’s core values are
central to ‘the way we engage with each other, our customers, our partners and our shareholders’.
OUTLOOK
Looking ahead, the Board and management of Infomedia believe the Company will continue to drive earnings
growth at a similar rate to FY17.
The product development decisions made in the last year are an investment in future sustainable growth.
Infomedia will continue to invest in the core business where ongoing growth opportunities with our current and
new customers exist. Further growth may come via acquisitions in areas close to its core operations that will
further Infomedia’s strategic objectives.
The 2018 financial year will be defined by two distinct halves. The remainder of the 2017 calendar year will
recognise the completion of a contract due to roll-off by the end of December 2017. The global Nissan EPC
contract is on-track to start generating revenue in the first three months of the 2018 calendar year with the
full rollout to be completed by October 2018.
These combined events are expected to result in a subdued first-half FY18 for the six months to the end of
December 2017 and a stronger second-half for the six months ending 30 June 2018. Overall for the 2018 financial
year, Infomedia expects to maintain underlying growth momentum for year on year revenue and profitability.
16
AR2017 RISKS
In seeking to achieve its strategic goals, Infomedia is subject to a number of risks which may have material
adverse effect on operating and financial performance. The Group adopts a rigorous risk management process
which is an integral part of the Group’s corporate governance structure, however some risks remain 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 Manufacturer
(‘OEM’) parts information
is integral to several of the
Group’s product lines
• The relatively concentrated
automotive industry leads
to a degree of revenue
concentration
Competitive
risk
• Risk from existing and new
market entrants
• Management of key account relationships
• Continued investment to sustain market leading products
• Customer service focus, including working with
customers to modify offerings to meet their needs
• Global accounts management receiving increased focus
• 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.
• 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
Product
outages caused
by software
or hardware
errors
• Products do not keep pace
• Close monitoring of market developments and direction
with developments in market
needs or technological
advancements
• Competitors or OEMs may
develop superior products
and OEM strategies
• Continued investment in research and development to
sustain market leading position
• Customer dissatisfaction
• Real time monitoring of the Company’s software
products and online hosting environments to identify
and correct errors quickly
with the Company’s
software products which
fail to facilitate their critical
business operations
• Customers cancel
subscriptions or switch to
competitive solutions
Intellectual
property risk
• Protecting data integrity and
• Network and product structuring and monitoring to
data privacy
identify and limit unauthorised access
• Legal restraints
• Migration from disc based products
Cyber risk,
privacy & data
sovereignty
• Risk of targeted cyber-attack
against Company assets
• Dedicated internal resources to monitor and address
cyber and information risks as and when they arise
• Unauthorised access to or loss
• Measures to detect and prevent unauthorised access to
of customer data including
personally identifiable data
• Increasingly onerous regulatory
environments governing use and
cross border transfer of data
(e.g. European General Data
Protection Regulation)
Company IT assets
• Robust redundancy measures allowing compromised
environments to be seamlessly severed and replaced
• Re-architecture of hosting environments to support
regulatory requirements relevant to customers
17
AR2017 DIRECTORS’ REPORT continued
Risk
Description
Risk management strategies
People risk
• Loss of key executives
• Multiple touch points with key customers as part of
• Loss of key customer
relationships
relationship management
• Appropriate incentives and career development
opportunities for key executives and senior management
• Identification and management of high potential employees
SIGNIFICANT CHANGES IN THE AFFAIRS
There were no significant changes in the state of affairs of the Group during the financial year.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
Other than matters listed below, there have been no matter or circumstance has arisen since 30 June 2017
that has significantly affected, or may significantly affect the Group’s operations, the results of those
operations, or the Group’s state of affairs in future financial years:
• the Board declared a final dividend of 1.20 cents per share, fully franked;
• on 25 August 2017, the Group completed the acquisition of a CRM software product for its customers.
ENVIRONMENTAL REGULATION
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
COMPANY SECRETARIES
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.
Mark Grodzicky BSc, LLB, appointed 3 July 2017
Mr Grodzicky joined Infomedia Ltd as General Counsel, leading the legal and company secretariat team for
Infomedia’s worldwide operations. Mr Grodzicky was also appointed an additional Company Secretary in July
2017. He holds degrees in Law and Science. Prior to joining Infomedia, Mr Grodzicky, over a 30 year career, held
general counsel and company secretarial roles with global IT companies including Wang, Sun Microsystems,
Digital Equipment, Compaq, HP, Getronics, UXC, CSC and DXC. Most recently, Mr Grodzicky was the
Commercial Director of CSC where he led a group of contract management negotiators and was also General
Counsel and Company Secretary of UXC Limited.
Nick Georges BA, LLB, resigned 3 July 2017
Mr Georges is a 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.
MEETINGS OF DIRECTORS
The number of meetings of the Company’s Board of Directors (the Board) and of each Board committee held
during the year ended 30 June 2017, and the number of meetings attended by each director were:
Board
Attended
Held
Remuneration &
Nominations Committee
Held
Attended
Audit & Risk Committee
Held
Attended
Bart Vogel
Jonathan Rubinsztein
Clyde McConaghy
Anne O’Driscoll
Paul Brandling
Fran Hernon
12
12
11
12
8
4
12
12
12
12
8
4
4
-
4
-
2
2
4
-
4
-
2
2
4
-
4
4
-
-
4
-
4
4
-
-
Held: represents the number of meetings held during the time the director held office or was a member of the
relevant committee.
18
AR2017
REMUNERATION REPORT – AUDITED
Subsequent to 30 June 2017, the Company set up a new committee and changed the membership of the two
exisiting committees as follows:
• Audit & Risk Committee: Anne O’Driscoll (Chairman), Clyde McConaghy, Paul Brandling;
• Remuneration & Nominations Committee: Clyde McConaghy (Chairman), Anne O’Driscoll, Bart Vogel; and
• Technology & Innovation Committee: Paul Brandling (Chairman), Bart Vogel, Jonathan Rubinsztein.
REMUNERATION REPORT – AUDITED
A. INTRODUCTION
The Directors present the Company’s Remuneration Report for the financial year ended 30 June 2017 (FY17).
As noted in last year’s report, the Group undertook a review of its existing Executive Incentive Plan and
remuneration philosophy during FY16. Following that review, the Group adjusted elements of its executive
remuneration framework. Those changes were made effective from 1 July 2016 and represent a timely
realignment of executive remuneration to the Group’s future strategies and objectives.
The Remuneration Report is structured as follows:
TABLE 1 – STRUCTURE OF REMUNERATION REPORT
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 FY17 for all key
management personnel (‘KMP’), including all Non-Executive Directors and the KMP executives, being the Chief
Executive Officer & Managing Director (‘CEO & Managing Director’) and the Chief Financial Officer (‘CFO’).
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 FY17:
Table 2 – Independent Non-Executive Directors
Current Directors
Bart Vogel
Paul Brandling
Clyde McConaghy
Anne O’Driscoll
Date of appointment
31 August 2015
1 October 2016
1 November 2013
15 December 2014
Clyde McConaghy is Chairman of the Remuneration & Nominations Committee.
Anne O’Driscoll is Chairman of Audit & Risk Committee.
Fran Hernon, former independent Non-Executive Director, retired on 30 September 2016.
Table 3 – KMP executives
Current executives
Jonathan Rubinsztein
Richard Leon
B. REMUNERATION GOVERNANCE
Role
Date of appointment
CEO & Managing Director
CFO
14 March 2016
29 March 2016
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.
19
AR2017 REMUNERATION REPORT – AUDITED continued
I. REMUNERATION & NOMINATIONS COMMITTEE
The Remuneration & Nominations Committee of the Board is responsible for reviewing and determining
remuneration arrangements for the Non-Executive Directors and the KMP executives. 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 Group’s remuneration framework aligns executive reward with achievement of strategic objectives and
shareholder returns. The performance of the Group relies upon the quality of its Directors and executives.
The Group 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 Group 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 (‘Committee’), subject to Board approval, directly engages with
and considers market remuneration data from external remuneration consultants as required.
No external remuneration advice was procured during the period. However, the Committee referred to several
sources in order to remain informed on market developments.
IV. 2016 AGM – REMUNERATION REPORT
At the 2016 Annual General Meeting held in October 2016, no comments were made in relation to the Group’s
Remuneration Report. The Remuneration Report was passed with 84.3% of votes cast in favour of the
adopting of the report.
20
AR2017
C. EXECUTIVE REMUNERATION STRUCTURE
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 Group 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.
In the financial year ended 30 June 2016, the Group has undertaken a comprehensive internal review of its STI
and LTI structures and transitioned to a revised structure as of 1 July 2016.
I. 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 KMP executives are set by reference to current market practices. The targeted
remuneration mix for FY17 was 40% fixed and 60% at-risk.
REMUNERATION MIX – KMP EXECUTIVES
40%
30%
30%
Fixed
remuneration
Short term
incentive (STI)
Long term
incentive (LTI)
Table 4 provides a snapshot of the key elements comprising KMP executives remuneration and any relevant
performance hurdles (where applicable) and the FY17 outcome.
Table 4 – Snapshot of Executive remuneration structure and FY17 outcome
Form of
remuneration
Purpose and link
to strategy
Operation and
outcome for FY17
Opportunity
Performance
metrics
a. Fixed remuneration
Cash salary and
superannuation
Attract, motivate
and retain high
calibre executives
Reflects
individual role,
experience and
performance
Non-monetary
benefits
Attract, motivate
and retain high
calibre executives
Reviewed periodically by the
Remuneration & Nominations
Committee and fixed for at least
12 months. Decision influenced by:
role, experience and performance;
Target at 40%
to 60% of
total potential
remuneration
package
Personal
objectives set
each year
reference to comparative
remuneration in the market; and
overall Group budget.
FY17 outcome
In FY17, there was no change
in fixed remuneration for the
incumbent KMP executives.
KMP executives are provided
with flexibility to utilise salary
packaging solutions such as
novated vehicle leasing and/
or salary sacrificing into
superannuation.
N/A
21
AR2017 REMUNERATION REPORT – AUDITED continued
Form of
remuneration
Purpose and link to
strategy
Operation and
outcome for FY17
Opportunity
Performance
metrics
b. Variable remuneration
STI
LTI
Recognises the
contributions and
achievements of the
KMP executives and
helps to attract and
retain talent
Provides
opportunity for the
KMP executives to
acquire ordinary
shares in the Group
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 Group objectives being met.
FY17 outcome
STI was awarded at 71% of fixed
remuneration approved by Board.
Refer to Table 7 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 Group’s
financial objectives (e.g. EPS target)
being met.
FY17 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 6
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
Table 5 provides a breakdown of the three elements of the total remuneration for the current KMP executives,
measured at maximum level and FY17 and FY16 actual. FY17 and 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 the financial year; 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 FY17 and FY16. In FY16, an entitlement to three years’ worth of
LTI were granted to the KMP executives. The first potential vesting of LTI entitlements relating to the FY17
performance period will not occur until September 2017. Accordingly, any vested or exercised entitlements
will be reflected in the FY18 remuneration report.
Table 5 – Maximum potential and FY17 and FY16 actual remuneration
Maximum potential
FY17 Actual
FY16 Actual
Fixed remuneration
At-risk
STI – cash bonus
LTI – performance rights
LTI – share options
Total at-risk
40%
30%
22%
8%
60%
100%
40%
29%
-
-
29%
69%
40%
30%
-
-
30%
70%
III. REMUNERATION OUTCOME FOR FY17
The following sections provide further detail as to how the ‘at-risk’ components (being STI and LTI) of the KMP
executives remuneration were determined, and how STI outcome is linked to overall Group performance.
22
AR2017 a. Short term incentive
Details of the STI Plan are explained in Table 6 below.
TABLE 6 – KEY DETAILS OF THE STI PLAN FOR FY17
Why was the STI
Plan introduced?
The STI Plan is designed to recognise the contributions and achievements of the KMP
executives when financial results and individual performance objectives are achieved.
Who participates
in the STI Plan?
What form do the
STI Plan awards
take?
What quantum
of STI were the
participants eligible
to receive for FY17?
Is there an
STI Gateway?
What
performance
metrics applied
and how were FY17
STI entitlements
determined?
All members of the KMP executives participate in the STI Plan.
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.
Eligible to receive an STI representing 30% of total potential reward.
The Executive Incentive Plan Rules dictate baseline performance which must be
achieved to allow participation in the STI scheme. In FY17, KMP executives STI
payments were subject to the following qualifying gateway:
• Company achieves over 100% of budgeted NPAT: STI plan operates at 100%
• Company achieves between 95% and 100% of budgeted NPAT: STI plan operates at 80%
• Company achieves less than 95% of budgeted NPAT: STI plan does not operate
For FY17, the following metrics applied to determine STI entitlements:
Relative
weighting
40%
60%
Metric
Personal
performance
goals (Strategic
deliverables)
Achievement of
Budgeted Group
NPAT
Payout ratios
Exceeds expectation: 100%-120%
Above expectation: 80%-100%
Meets expectation: 60%-80%
Below expectation: 0%
>95% of target: 0%
At 95%-99.9%: 80%
At 100% or more: 100%
Payout FY17
90%
100%
How are
performance
measures tested
and approved?
The Board, acting through the Remuneration & Nominations Committee, assessed the
KMP executives relative to the performance goals to determine the FY17 STI outcome
for each of KMP executives. 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 in table 7 below.
What is the
rationale for
choosing the
performance
measures?
The performance measures applicable to the KMP executives are reflective of the
personal performance goals and objectives aimed at stabilising the business and
setting a platform for growth in FY17 and beyond.
NPAT: Net profit after tax is utilised to ensure that the KMP executives’ interests are
aligned with shareholders and encourages executives to exercise collective oversight
over the entire spectrum of the Group’s profit and loss statement.
What forfeiture
conditions apply?
If a participant leaves the employment of the Group during any Performance Period,
the STI component is automatically forfeited unless the Board determines otherwise.
TABLE 7 – ACTUAL STI OUTCOMES FOR FY17
Maximum STI potential FY
17 Actual STI outcome
Jonathan Rubinsztein
Richard Leon
(% of fixed pay)
(% of maximum
STI potential)
(% of fixed pay)
74%
74%
96%
96%
71%
71%
($)
360,000
192,000
23
AR2017 REMUNERATION REPORT – AUDITED continued
b. Long term incentive
The Group has contractual arrangements with the KMP executives which include an entitlement to participate
in the Group’s LTI Plan. The KMP executives received an entitlement to three years’ worth of LTI grants at
the time of their appointment in the 2016 financial year (in a combination of performance rights and share
options) in advance in accordance with their service agreements. The grants cover FY17, FY18 and FY19
performance periods and represent 30% of their annualised total potential remuneration package at that time.
Refer to section G.II, G.III and G.IV for further details of performance rights and share options granted.
IV. SHAREHOLDING REQUIREMENTS
There is no specific policy requiring the KMP executives to hold any Infomedia shares. Table 16 provides details
of Infomedia’s ordinary shares held by the KMP executives during FY17.
V. HISTORICAL ANALYSIS OF FINANCIAL PERFORMANCE
The following table outlines the returns of the Group delivered to its shareholders over the past five years:
Table 8 – Key financial performance indicators
Revenue
Net profit after tax
Earnings per share (cents)
Dividends per share, exclude
special dividend (cents)
Special dividend per share
(cents)
Share price at 30 June ($)
2013
$’000
48,689
10,066
3.32
2.82
-
0.47
2014
$’000
57,143
12,279
4.02
3.78
-
0.75
2015
$’000
60,385
13,232
4.30
3.64
0.25
1.20
2016
$’000
68,087
10,323
3.33
2.65
-
0.69
2017
$’000
70,474
11,953
3.85
2.90
-
0.73
D. EXECUTIVE REMUNERATION DETAILS
The table below provides remuneration details for KMP executives.
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 prior reporting period.
TABLE 9 – TOTAL KMP EXECUTIVES REMUNERATION
Short term employment benefits Post-employment benefits
Long term
benefits
Share based
payments
Total
Table
note
(1)
(2)
(3)
(4)
(5)
Cash salary
and leave
accruals
Short term
incentive
Non-
monetary
benefits
Super-
annuation
Termination
payments
Long service
leave
accruals
Performance
rights and
share options
(refer to
Table 10)
$
$
$
$
$
$
$
$
Current KMP executives:
Jonathan Rubinsztein, CEO & Managing Director, KMP since 14 March 2016
2017
2016
490,796
360,000
162,037
111,986
-
-
25,000
7,692
Richard Leon, CFO, KMP since 29 March 2016
2017
2016
263,683
192,000
72,039
51,506
-
-
19,605
5,124
-
-
-
-
10,492
405,304
1,291,592
-
171,056
452,771
5,237
-
226,487
707,012
82,911
211,580
24
AR2017 I. Footnote to Table 9
(a) The remuneration mix for the current KMP executives are:
• Jonathan Rubinsztein: 41% fixed and 59% at-risk (2016: 37% fixed and 63% at-risk); and
• Richard Leon: 41% fixed and 59% at-risk (2016: 36% fixed and 64% at-risk).
(b) During FY17, the Board re-assessed Nick Georges’ classification as KMP and determined that he was no
longer involved in strategic planning, direction and control of the activities of the Group. Effective from 1
July 2016, Nick Georges ceased as KMP, his total FY16 remuneration was $282,440.
(c) During FY16, Andrew Pattinson and Russel King ceased as KMP. Their total FY16 remuneration until the
date of ceasing as KMP was: Andrew Pattinson $546,068; and Russel King $299,402.
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 FY17 short term incentive was awarded and approved by the Board and will be paid in cash in
September 2017.
(3) Superannuation contributions are paid in line with legislative requirements.
(4) Long service leave accruals are determined in accordance with Accounting Standard, AASB 119 Employee Benefits.
(5) The share based payments value in Table 9 above represents the amount of LTI (in the form of performance
rights and share options) granted for the three financial years commencing 1 July 2016 from the date
of service agreements signed in accordance with Accounting Standard, AASB 2 Share-based Payments.
Further information is provided in section G.II and G.III in this report.
TABLE 10 – BREAKDOWN OF SHARE BASED PAYMENTS
Performance rights
Share options
Total share based
payments
$
$
$
Current KMP executives:
Jonathan Rubinsztein, CEO & Managing Director, KMP since 14 March 2016
2017
2016
Richard Leon, CFO, KMP since 29 March 2016
2017
2016
E. NON-EXECUTIVE DIRECTORS’ REMUNERATION
I. STRUCTURE AND POLICY
335,554
141,618
188,282
68,925
69,750
29,438
38,205
13,986
405,304
171,056
226,487
82,911
Non-Executive Directors’ fees are determined within an aggregate Directors’ fee pool limit. The aggregate fee
pool limit is approved by shareholders.
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 current service agreements with Non-Executive Directors provide for statutory superannuation
contributions and no incentive or termination payments.
Directors may also be reimbursed for travel and other expenses incurred in attending to the Group’s affairs.
At the Annual General Meeting (‘AGM’) held on 3 November 2016, the shareholders approved an increase in
the maximum aggregate Directors’ fee pool from $450,000 to $550,000 per annum. The Constitution of
the Company, as revised by special resolution at the AGM, now states that superannuation contributions are
included from the director fee cap, consistent with governance practice and the ASX Listing Rules.
25
AR2017
REMUNERATION REPORT – AUDITED continued
Table 11 – Infomedia’s Board or committee annual fee (exclusive of superannuation)
Board/Committee
Board
Role
Chairman
Non-Executive Directors
Audit & Risk Committee
Chairman
Remuneration & Nominations Committee
Chairman
F. NON-EXECUTIVE DIRECTORS’ REMUNERATION DETAILS
$
175,000
75,000
15,000
15,000
The table below provides remuneration details for the Non-Executive Directors on the Company’s Board.
Paul Brandling was appointed as a Non-Executive Director from 1 October 2016. The remuneration information
provided in the table below relates to the period from the date of his appointment to the year ended 30 June 2017.
The table below also contains remuneration information of Fran Hernon who retired during the financial year.
Fran Hernon held her position from 1 July 2016 until 30 September 2016.
TABLE 12 – TOTAL NON-EXECUTIVE DIRECTORS REMUNERATION OF THE GROUP
Current Non-Executive Directors:
Bart Vogel, Director since 31 August 2015
2017
2016
Paul Brandling, Director since 1 October 2016
2017
Clyde McConaghy
2017
2016
Anne O’Driscoll
2017
2016
Non-Executive Directors ceased as KMP during FY17:
Fran Hernon, Director until 30 September 2016
2017
2016
Short term
Employment
benefits
Board and
committee fees
Post employment
benefits
Superannuation
Total
$
$
$
150,000
57,043
56,250
90,000
78,216
90,000
78,216
43,750
145,230
14,250
5,419
5,344
8,550
7,431
8,550
7,431
4,156
13,797
164,250
62,462
61,594
98,550
85,647
98,550
85,647
47,906
159,027
SHAREHOLDING REQUIREMENTS
There is no specific policy requiring the Non-Executive Directors to hold any Infomedia shares.
Table 16 provides details of Infomedia’s shares held by the Non-Executive Directors during FY17.
G. ADDITIONAL INFORMATION
I. EXECUTIVE SERVICE AGREEMENTS
Infomedia has service agreements with KMP executives. The service agreements outline the components
of remuneration paid to KMP executives. The service agreements do not require the Group 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 KMP executives’ service agreements. The executive service
agreements do not provide for any termination payments, other than payment in lieu of notice by the Group.
26
AR2017 Table 13 – Key terms of executive service agreements
Commencement
date of latest
contract
Duration
Notice period
– Group
Notice period
– Employee
14 March 2016
Continuing
6 months
6 months
Name
Jonathan
Rubinsztein
Richard Leon 29 March 2016
Continuing
3 months
3 months
Termination
payment in lieu
of notice
6 months fixed
remuneration
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
b. Termination in other situations
The Group may immediately terminate the KMP executives’ service agreements without notice, or any
payment in lieu of notice, in certain circumstances as stated in the agreements, including any material breach
incapable of remedy, conduct which has a material adverse effect on the Group’s reputation, or if the executive
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.
II. PERFORMANCE RIGHTS
LTI in the form of performance rights were granted to the KMP executives during FY17. 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 the KMP executives at 30 June 2016 and
30 June 2017.
Table 14 – Movement in performance rights
Name
Current KMP executives:
Jonathan
Rubinsztein
Richard Leon
Table note
Rights held at
30 June 2016
Rights
granted
during FY17
Rights
exercised
during FY17(a)
Rights lapsed
during FY17
Rights held
at 30 June
2017(a)
Number
Number
Number
Number
Number
-
-
-
1,418,067
756,302
2,174,369
-
-
-
-
-
-
1,418,067
756,302
2,174,369
(a) In accordance with the terms of the LTI Plan, unvested performance rights will automatically lapse upon
cessation of employment with the Group.
III. SHARE OPTIONS
The Group provides the KMP executives with the opportunity to subscribe for ordinary shares in the Company
through the Performance Rights and Option Plan. As noted earlier, the KMP executives were granted rights and
options covering the three financial years ending 30 June 2019 as part of their appointment in 2016. Further
details of the share options are disclosed in the share based remuneration note to the financial statements.
The table below provides the number of share options held by members of the KMP executives at 30 June 2016
and 30 June 2017.
27
AR2017 REMUNERATION REPORT – AUDITED continued
Table 15 – Movement in share options
Options
held at
30 June
2016
Name
Current KMP executives:
Options
granted
during FY17
Options
exercised
during FY17
Options
lapsed
during FY17
Options held
at 30 June
2017
Options
vested during
FY17
Options
vested and
exercisable
at 30 June
2017
Number
Number
Number
Number
Number
Jonathan
Rubinsztein
Richard Leon
-
-
-
3,750,000
2,000,000
5,750,000
-
-
-
-
-
-
3,750,000
2,000,000
5,750,000
-
-
-
-
-
-
IV. VALUATION OF PERFORMANCE RIGHTS AND SHARE OPTIONS
The table below details the fair value of the performance rights and share options issued affecting
remuneration of KMP executives in the previous, current or future reporting periods:
Description
Recipient
Grant date
Vesting date
Fair value at grant date
($)
FY16 Performance rights
CEO
29 January 2016
FY16 Performance rights
CFO
17 February 2016
30 June 2017 to
30 June 2019
30 June 2017 to
30 June 2019
FY16 Share options
FY16 Share options
CEO
CFO
29 January 2016
30 June 2019
17 February 2016
30 June 2019
0.53-0.57
0.53-0.57
0.07
0.07
V. KEY TERMS OF PERFORMANCE RIGHTS AND SHARE OPTIONS
Key terms relate to all performance rights (‘rights’) and share options (‘options’) granted:
• the rights and options granted to CEO and CFO are deemed to be granted on the date when their service
agreements were signed;
• the rights and options are granted for nil consideration;
• the vesting conditions of the rights and options are conditional on continuous employment and meeting
performance hurdles as below:
o rights – Company Annual Growth Rate target: Compound earnings per share (‘EPS’) Growth percentage
above FY16 EPS;
o options – the Company share price exceeds the exercise price of 92.2 cents;
• when vesting:
o rights – each right will be converted into one Infomedia ordinary share for nil consideration;
o options – each option will be converted into one Infomedia ordinary share by paying an exercise price of
92.2 cents;
• the rights will vest in three equal tranches after on, two and three years from the grant date. For any
unvested rights tested before 30 June 2019, retesting will be performed each year until the last testing date
on 30 June 2019.
VI. LOANS TO KMP
There were no loans at the beginning or at the end of the financial year ended 30 June 2017 to the KMP. No loans
were made available during FY17 to the KMP.
VII. SHAREHOLDINGS OF DIRECTORS AND THE KMP EXECUTIVES
Table 16 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 indirectly by related parties of KMP.
28
AR2017
Table 16 – Movement of shareholding interests of Directors and the other KMP executive
Name
Balance
at 30 June
2016
Grant as
compen-
sation
Exercise
of share
options
Exercise of
perform-
ance rights
Net other
changes
Total
shares held
at 30 June
2017(b)
Shares held
indirectly
at 30 June
2017(a),(b)
Number
Number
Number
Number
Number
Number
Number
Non-Executive Directors:
Bart Vogel
Paul Brandling(c)
Clyde McConaghy
Anne O’Driscoll
152,000
-
12,000
45,000
Current KMP executives:
Jonathan
Rubinsztein
Richard Leon
500,000
119,000
-
-
-
-
-
-
-
-
-
-
-
-
Director who ceased as key management personnel during FY17:
Fran Hernon(d)
28,300
-
-
Footnote to Table 16
-
-
-
-
-
-
-
148,000
300,000
300,000
144,020
144,020
144,020
68,000
-
-
-
80,000
45,000
-
45,000
500,000
500,000
119,000
119,000
1,250
-
-
(a) Shares held indirectly are included in the column headed Total shares held at 30 June 2017. 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 indirectly also represented the relevant interest in the listed
securities, being ordinary shares of the Group, 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) Paul Brandling became KMP from 1 October 2016.
(d) Individual shareholdings information is provided until the date of cessation as KMP.
VIII. KMP AND OTHER RELATED PARTY TRANSACTIONS
During the year, there were no related party transactions with KMP and KMP related parties other than those
disclosed in this report.
THIS CONCLUDES THE REMUNERATION REPORT, WHICH HAS BEEN AUDITED.
SHARE OPTIONS
At the date of this report, there are 5,750,000 options issued in respect of ordinary shares of Infomedia Ltd.
No person entitled to exercise the options had or has any right by virtue of the option to participate in any
share issue of the Company or of any other body corporate.
SHARES ISSUED ON THE EXERCISE OF OPTIONS
There were 836,667 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.
PERFORMANCE RIGHTS
At the date of this report, there are 3,757,154 performance rights issued in respect of ordinary shares of
Infomedia Ltd.
SHARES ISSUED ON THE EXERCISE OF PERFORMANCE RIGHTS
There were no ordinary shares of Infomedia Ltd issued on the exercise of performance rights during the year
ended 30 June 2017 and up to the date of this report.
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the Directors and executives of the Company for costs incurred, in their
capacity as a Director or executive, for which they may be held personally liable, except where there is a lack of
good faith.
29
AR2017
DIRECTORS’ REPORT continued
During the financial year, the Company paid a premium in respect of a contract to insure the Directors
and executives of the Company against a liability to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
AUDITOR
Deloitte Touche Tohmatsu continues in office in accordance with section 327C of the Corporations Act 2001.
NON-AUDIT SERVICES
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year
by the auditor are outlined in Note 23 to the financial statements.
The Directors 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.
The Directors are of the opinion that the services as disclosed in Note 23 to the financial statements do not
compromise the external auditor’s independence requirements of the Corporations Act 2001 for the
following reasons:
• all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and
objectivity of the auditor; and
• none of the services undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards
Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making
capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards.
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001
is set out immediately after this directors’ 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/
ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to ‘rounding-off’.
Amounts in this report have been rounded off in accordance with that Corporations Instrument to the nearest
thousand dollars, or in certain cases, the nearest dollar.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
On behalf of the directors
Bart Vogel
Chairman
28 August 2017
30
AR2017
CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2017
Note
Consolidated
2017
$’000
2016
$’000
16
70,474
68,087
36
71
17
7
(13,980)
(22,846)
(18,002)
(144)
15,538
(3,585)
(16,124)
(21,292)
(17,897)
(224)
12,621
(2,298)
REVENUE
Finance income
EXPENSES
Research and development expenses
Sales and marketing expenses
General and administration expenses
Net foreign currency translation losses
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable to the owners of
Infomedia Ltd
11,953
10,323
OTHER COMPREHENSIVE INCOME/(LOSS)
Items that may be reclassified subsequently to profit or loss
Net change in the fair value of cash flow hedges taken to equity, net of tax
Foreign currency translation
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income for the year attributable to the owners of
Infomedia Ltd
(158)
(367)
(525)
548
237
785
11,428
11,108
Cents
Cents
Basic earnings per share
Diluted earnings per share
5
5
3.85
3.83
3.33
3.31
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
32
AR2017
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2017
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Derivative financial instruments - forward exchange contracts
Income tax refund due
Prepayments
Total current assets
NON-CURRENT ASSETS
Property, plant and equipment
Intangibles
Total non-current assets
Total assets
LIABILITIES
CURRENT LIABILITIES
Trade payables
Other payables
Employee benefits
Deferred revenue
Total current liabilities
NON-CURRENT LIABILITIES
Deferred tax
Employee benefits
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Treasury shares held in trust
Foreign currency reserve
Share-based payments reserve
Cash flow hedge reserve
Retained profits
Total equity
Note
Consolidated
2017
$’000
2016
$’000
9
7
8
7
10
10
13,313
7,826
-
2,175
1,529
14,748
6,295
250
870
958
24,843
23,121
2,634
39,530
42,164
2,373
34,783
37,156
67,007
60,277
2,150
6,025
3,146
992
12,313
4,415
423
4,838
693
4,952
2,938
1,325
9,908
5,684
527
6,211
17,151
16,119
49,856
44,158
12,923
(602)
905
3,499
(10)
33,141
12,449
-
1,272
711
148
29,578
49,856
44,158
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
33
AR2017
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2017
Treasury
shares
held in
trust
$’000
Foreign
currency
reserve
$’000
Share-
based
payments
reserve
$’000
Share
capital
$’000
Cash flow
hedge Retained
profits
$’000
reserve
$’000
Total
equity
$’000
Consolidated – 2016
Balance at 1 July 2015
12,074
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-based payments
Share options exercised
Dividends paid (Note 6)
-
-
-
-
375
-
Balance at 30 June 2016
12,449
Consolidated – 2017
Balance at 1 July 2016
12,449
Profit after income tax
expense for the year
Other comprehensive loss for
the year, net of tax
Total comprehensive income/
(loss) for the year
TRANSACTIONS WITH
OWNERS IN THEIR
CAPACITY AS OWNERS:
Share-based payments
Tax effect related to
share-based payments
Share options exercised
Purchase of treasury shares
Dividends paid (Note 6)
-
-
-
-
-
474
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(602)
-
1,035
720
(400)
30,400
43,829
-
237
237
-
-
-
-
-
-
(9)
-
-
-
10,323
10,323
548
-
785
548
10,323
11,108
-
-
-
-
-
(9)
375
(11,145)
(11,145)
1,272
711
148
29,578
44,158
1,272
711
148
29,578
44,158
-
(367)
(367)
-
-
-
-
11,953
11,953
(158)
-
(525)
(158)
11,953
11,428
-
-
-
-
-
812
1,976
-
-
-
-
-
-
-
-
-
-
-
-
812
1,976
474
(602)
(8,390)
(8,390)
Balance at 30 June 2017
12,923
(602)
905
3,499
(10)
33,141
49,856
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
34
AR2017
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2017
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Balance at 1 July 2015
12,074
1,035
720
(400)
30,400
43,829
Payments to suppliers and employees
Interest received
Income taxes paid
Note
Consolidated
2017
$’000
2016
$’000
70,048
(44,039)
65,208
(41,483)
26,009
23,725
36
71
(4,183)
(4,753)
Balance at 30 June 2016
12,449
1,272
711
148
29,578
44,158
Net cash used in investing activities
(14,779)
(9,617)
Net cash from operating activities
19
21,862
19,043
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for property, plant and equipment
Payments for development costs capitalised
Proceeds from disposal of property, plant and equipment
(1,768)
(13,146)
135
(1,898)
(7,719)
-
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of share options
Payments for purchase of treasury shares
Dividends paid
-
11,953
11,953
Net cash used in financing activities
(158)
(525)
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
10
6
474
(602)
375
-
(8,390)
(11,145)
(8,518)
(10,770)
(1,435)
14,748
(1,344)
16,092
Cash and cash equivalents at the end of the financial year
13,313
14,748
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Treasury
shares
held in
Share-
Foreign
based
Cash flow
Share
capital
$’000
currency
payments
hedge Retained
trust
reserve
$’000
$’000
reserve
$’000
reserve
$’000
profits
$’000
Total
equity
$’000
Consolidated – 2016
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-based payments
Share options exercised
375
Dividends paid (Note 6)
Consolidated – 2017
Profit after income tax
expense for the year
Other comprehensive loss for
the year, net of tax
Total comprehensive income/
(loss) for the year
TRANSACTIONS WITH
OWNERS IN THEIR
CAPACITY AS OWNERS:
Share-based payments
Tax effect related to
share-based payments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
237
237
-
-
-
-
-
-
-
-
-
-
(367)
(367)
-
-
-
-
-
(9)
-
-
-
-
-
-
812
1,976
-
10,323
10,323
548
785
548
10,323
11,108
-
-
-
(9)
375
(11,145)
(11,145)
(158)
11,953
11,428
-
-
-
-
-
812
1,976
474
(602)
(8,390)
(8,390)
-
-
-
-
-
-
-
-
Share options exercised
474
Purchase of treasury shares
(602)
Dividends paid (Note 6)
Balance at 30 June 2017
12,923
(602)
905
3,499
(10)
33,141
49,856
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.
Balance at 1 July 2016
12,449
1,272
711
148
29,578
44,158
35
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. GENERAL INFORMATION
The financial statements cover Infomedia Ltd as a Group consisting of Infomedia Ltd and the entities it
controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which
is Infomedia Ltd’s functional and presentation currency.
Infomedia Ltd is a listed public company limited by shares, incorporated and domiciled in Australia. Its
registered office and principal place of business is:
For the year ended 30 June 2017
3 Minna Close
Belrose, Sydney NSW 2085
A description of the nature of the Group’s operations and its principal activities are included in the directors’
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 August
2017. The directors have the power to amend and reissue the financial statements.
Consistent with prior year, the information contained in this year’s financial report has been structured to
facilitate greater understanding for the reader. The flow of information is grouped as follows:
• critical accounting judgements, estimates and assumptions – Note 3;
• key financial performance of the Group – Notes 4 to 7;
• significant operating assets and liabilities – Notes 8 to 9;
• capital and financial risk management matters – Notes 10 to 14;
• group structure – Note 15; and
• additional information and disclosures required by Accounting Standards – Notes 16 to 24.
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 24.
NOTE 2. BASIS OF PREPARATION
These general purpose financial statements have been prepared in accordance with Australian Accounting
Standards and Interpretations issued by the AASB and the Corporations Act 2001, as appropriate for
for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board.
The accounting policies adopted in the preparation of the financial statements have been consistently applied
to all the years presented, unless otherwise stated.
NEW OR AMENDED ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTED
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting period. The
adoption of these Accounting Standards and Interpretations did not have any significant impact on the
financial performance or position of the Group.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
HISTORICAL COST CONVENTION
The financial statements have been prepared under the historical cost convention, except for, where applicable,
financial assets and liabilities at fair value through profit or loss.
CRITICAL ACCOUNTING ESTIMATES
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the Group’s accounting policies.
The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates
are significant to the financial statements, are disclosed in Note 3.
36
AR2017
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Infomedia Ltd
(‘Company’ or ‘parent entity’) as at 30 June 2017 and the results of all subsidiaries for the year then ended.
Infomedia Ltd and its subsidiaries together are referred to in these financial statements as the ‘Group’.
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when
the Group 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 to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the Group. They are de-consolidated from the
date that control ceases.
RECLASSIFICATION OF COMPARATIVES
Certain prior period comparative information has been revised in this financial report to conform with the
current period’s presentation. The reclassifications are:
• expenditure by function presented on the face of the consolidated statement of profit or loss is based on the
current structure of the business;
• realised foreign currency gain/loss on hedge contracts is included in general and administration expenses; and
• payments for development expenses capitalised is included in cash flows from investing activities.
ROUNDING OF AMOUNTS
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports)
Instrument 2016/191, issued by the Australian Securities and Investments Commission, relating to ‘rounding-
off’. Amounts in this report have been rounded off in accordance with that Corporations Instrument to the
nearest thousand dollars, or in certain cases, the nearest dollar.
NOTE 3. 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 will seldom equal 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) within the next
financial year are discussed below.
RESEARCH AND DEVELOPMENT
Research and development expenses incurred relate to works provided by third parties and internal salaries
and on-costs of employees.
Research costs are expensed in the period in which they are incurred.
Development costs are capitalised when it is probable that the project will be a success considering its
commercial and technical feasibility, and the costs can be measured reliably.
The key judgements relate to:
• determining the portion of the internal salary and on-costs that are directly attributable to development of
the Group’s product suite and software; and
• identifying and assessing the technical feasibility of completing the intangible asset and generating future
economic benefits.
An impairment loss is recognised if the carrying amount of the development asset exceeds its recoverable amount.
The Group determines the estimated useful lives for the capitalised development costs. The useful lives could
change significantly as a result of technical innovations or some other event. The amortisation charge will
increase where the useful lives are less than previously estimated lives, or technically obsolete or items no
longer in use will be written off or written down.
37
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
For the year ended 30 June 2017
NOTE 3. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS continued
GOODWILL
Goodwill is assessed annually for impairment or when there is an evidence of impairment.
The recoverable amounts of goodwill of the relevant reportable segments have been determined based on
value-in-use calculations. These calculations require the use of assumptions, including estimated discount
rates based on the current cost of capital and growth rates of the estimated future cash flows.
INCOME TAX
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required
in determining the provision for income tax. There are many transactions and calculations undertaken during
the ordinary course of business for which the ultimate tax determination is uncertain. The Group recognises
liabilities for anticipated tax based on the Group’s current understanding of the relevant tax regulations.
Where the final tax outcome of these matters is different from the carrying amounts, such differences will
impact the current and deferred tax provisions in the period in which such determination is made.
NOTE 4. OPERATING SEGMENTS
IDENTIFICATION OF REPORTABLE SEGMENTS
The Group is organised into three reportable segments:
• Asia Pacific;
• Europe, Middle East and Africa (‘EMEA’); and
• Americas, representing the combined North America and Latin & South America regions.
These reportable segments are based on the internal reports that are reviewed and used by the Chief Executive
Officer & Managing Director (who is identified as the Chief Operating Decision Maker (‘CODM’)) in assessing
performance and in determining the allocation of resources. There is no aggregation of reportable segments.
The reportable 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 CODM reviews earnings before interest and tax (‘EBIT’). The accounting policies adopted for internal
reporting to the CODM are consistent with those adopted in the financial statements.
MAJOR CUSTOMERS
The Group has many customers to which it provides products. There is no significant reliance on any single customer.
REPORTABLE SEGMENT INFORMATION
Consolidated - 2017
Revenue
Asia Pacific
$’000
EMEA
$’000
Americas Unallocated
$’000
$’000
Total
$’000
Revenue from external customers
17,054
29,649
23,771
-
-
-
17,054
29,649
23,771
-
36
36
70,474
36
70,510
13,661
22,749
9,071
(29,979)
15,502
-
-
-
36
36
15,538
(3,585)
11,953
Profit/(loss) before income tax expense
13,661
22,749
9,071
(29,943)
Income tax expense
Profit after income tax expense
38
Finance income
Total revenue
EBIT
Finance income
AR2017
Finance income
Total revenue
EBIT
Finance income
Consolidated - 2016
Revenue
Asia Pacific
$’000
EMEA
$’000
Americas Unallocated
$’000
$’000
Total
$’000
Revenue from to external customers
15,749
30,297
22,041
-
-
-
15,749
30,297
22,041
11,953
22,263
8,626
(30,292)
12,550
-
-
-
71
-
71
71
68,087
71
68,158
71
12,621
(2,298)
10,323
Profit/(loss) before income tax expense
11,953
22,263
8,626
(30,221)
Income tax expense
Profit after income tax expense
Unallocated EBIT
Unallocated EBIT is represented by the following costs:
Research and development expenses
General and administration expenses
NOTE 5. EARNINGS PER SHARE
Consolidated
2017
$’000
13,980
15,999
2016
$’000
16,124
14,168
29,979
30,292
Consolidated
2017
$’000
2016
$’000
Profit after income tax attributable to the owners of Infomedia Ltd
11,953
10,323
Basic earnings per share
Diluted earnings per share
Weighted average number of ordinary shares issued
Weighted average number of treasury shares held in trust
Weighted average number of ordinary shares used in calculating basic earnings
per share
Adjustments for calculation of diluted earnings per share:
Share options and performance rights
Cents
Cents
3.85
3.83
3.33
3.31
Number
‘000
Number
‘000
310,531
309,644
(136)
-
310,395
309,644
1,573
2,061
Weighted average number of ordinary shares used in calculating diluted earnings
per share
311,968
311,705
39
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
For the year ended 30 June 2017
NOTE 5. EARNINGS PER SHARE continued
ACCOUNTING POLICY FOR EARNINGS PER SHARE
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Infomedia Ltd by
the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus
elements in ordinary shares issued during the financial year and excluding treasury shares.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take
into account the after income tax effect of interest and other financing costs associated with dilutive potential
ordinary shares and the weighted average number of shares assumed to have been issued at no consideration
received in relation to dilutive potential ordinary shares.
NOTE 6. EQUITY - DIVIDENDS
DIVIDENDS
Dividends paid during the financial year were as follows:
Interim dividend for the year ended 30 June 2017 (2016: 30 June 2016) of 1.70
cents fully franked (2016: 1.65 cents unfranked) per ordinary share
Final dividend for the year ended 30 June 2016 (2016: 30 June 2015) of 1.00 cents
unfranked (2016: 1.70 cents unfranked) per ordinary share
Special dividend of 0.25 cents fully franked per ordinary share
Consolidated
2017
$’000
2016
$’000
5,287
5,115
3,103
-
5,257
773
8,390
11,145
On 28 August 2017, the directors declared a final dividend of 1.20 cents per share, fully franked, to be paid on
6 October 2017. As this occurred after the reporting date, the dividends declared have not been recognised in
this financial report.
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.
The Company’s DRP will operate by purchasing shares on market. No discount will be applied. Election notices for
participation in the DRP in relation to this final dividend must be received by 5 September 2017.
FRANKING CREDITS
Consolidated
2017
$’000
2016
$’000
Franking credits available for subsequent financial years based on a tax rate of 30%
4,350
3,124
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 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.
ACCOUNTING POLICY FOR DIVIDENDS
Dividends are recognised when declared during the financial year.
40
AR2017
NOTE 7. INCOME TAX
INCOME TAX EXPENSE
Current tax
Movement in deferred tax
Adjustments for current tax of prior periods
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Increase in deferred tax assets
Increase in deferred tax liabilities
Consolidated
2017
$’000
2016
$’000
2,837
695
53
3,585
(803)
1,498
2,488
(35)
(155)
2,298
(248)
213
Movement in deferred tax
695
(35)
Numerical reconciliation of income tax expense and tax at the statutory rate
Profit before income tax expense
Tax at the statutory tax rate of 30%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Additional research and development deduction
Effects of foreign tax rates difference
Share-based payments trust contributions
Income tax paid in China
Non-deductible expenses
Adjustments for current tax of prior periods
Income tax expense
Amounts charged/(credited) directly to equity
Deferred tax assets
Deferred tax liabilities
15,538
12,621
4,661
3,786
(1,196)
5
(308)
-
370
3,532
53
(1,386)
-
-
9
44
2,453
(155)
3,585
2,298
Consolidated
2017
$’000
2016
$’000
(1,976)
12
(1,964)
-
236
236
41
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
NOTE 7. INCOME TAX continued
For the year ended 30 June 2017
Consolidated
2017
$’000
2016
$’000
1,951
1,976
(4)
4
(3,927)
1,070
-
198
(120)
(1,148)
-
-
803
1,976
1,148
(3,927)
248
-
900
(1,148)
-
-
Consolidated
2017
$’000
2016
$’000
-
8,169
173
(3,927)
75
6,757
-
(1,148)
4,415
5,684
5,684
1,498
12
1,148
(3,927)
5,483
213
236
900
(1,148)
4,415
5,684
Consolidated
2017
$’000
2016
$’000
2,175
870
DEFERRED TAX ASSET
Deferred tax asset comprises temporary differences attributable to:
Provisions
Share-based payments
Other payables
Currency exchange
Offset against deferred tax liabilities
Movements:
Credited to profit or loss
Credited to equity
Reversal of offset against deferred tax liabilities
Offset against deferred tax liabilities
Closing balance
DEFERRED TAX LIABILITY
Deferred tax liability comprises temporary differences attributable to:
Derivatives
Deferred development costs
Share-based payment trust contributions
Offset against deferred tax assets
Deferred tax liability
Movements:
Opening balance
Charged to profit or loss
Charged to equity
Reversal of offset against deferred tax assets
Offset against deferred tax assets
Closing balance
INCOME TAX REFUND DUE
Income tax refund due
42
AR2017
ACCOUNTING POLICY FOR INCOME TAX
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based
on the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and
liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior
periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting
date. Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable
profits will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current
tax assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate
to the same taxable authority on either the same taxable entity or different taxable entities which intend to
settle simultaneously.
NOTE 8. NON-CURRENT ASSETS - INTANGIBLES
Goodwill
Capitalised development costs
Less: Accumulated amortisation
Consolidated
2017
$’000
2016
$’000
12,237
12,367
43,837
(16,544)
27,293
36,848
(14,432)
22,416
39,530
34,783
43
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
NOTE 8. NON-CURRENT ASSETS - INTANGIBLES continued
RECONCILIATIONS
Reconciliations of the written down values at the beginning and end of the current and previous financial year
are set out below:
For the year ended 30 June 2017
Consolidated
Balance at 1 July 2015
Additions
Revaluation on cost (foreign exchange movements)
Revaluation on amortisation
Disposal - cost
Disposal - accumulated depreciation
Amortisation expense
Balance at 30 June 2016
Additions
Revaluation on cost (foreign exchange movements)
Revaluation on amortisation
Disposal - cost
Disposal - accumulated amortisation
Impairment of assets - cost
Impairment of assets - accumulated amortisation
Amortisation expense
Balance at 30 June 2017
Capitalised
development
costs**
$’000
Goodwill*
$’000
Total
$’000
34,798
8,054
(525)
222
21,808
8,054
-
-
(34,198)
(34,198)
34,198
(7,446)
22,416
13,715
-
-
(6,174)
6,174
(553)
189
34,198
(7,766)
34,783
13,715
(65)
(22)
(6,174)
6,174
(553)
189
12,990
-
(525)
222
-
-
(320)
12,367
-
(65)
(22)
-
-
-
-
(43)
(8,474)
(8,517)
12,237
27,293
39,530
* 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 fully amortised during FY17 and are included as goodwill for disclosure
purposes. The intellectual property and other intangibles have finite life and are amortised over four to
five years.
** The cost and accumulated amortisation associated with capitalised development costs that have $Nil
carrying value and are no longer in use have been eliminated from the reconciliation in both current and
prior financial years.
IMPAIRMENT TESTING
The Group performed impairment testing for all goodwill on an annual basis and intangibles (capitalised
development costs) which had impairment indicators.
Capitalised development costs
An impairment loss of $0.364 million was recognised for the year ended 30 June 2017 (2016: no impairment
provision). The impairment loss arose from the regular review of capitalised development costs. Management
determined to write off all items with net written down value below $1,000 and any projects which were
cancelled in FY17.
44
AR2017
Goodwill
Goodwill acquired through business combinations or territory acquisition has been allocated to a reportable
segment (refer Note 3) for impairment testing as follows:
Asia Pacific
EMEA
Americas
Consolidated
2017
$’000
2,777
5,837
3,623
2016
$’000
2,796
5,878
3,650
12,237
12,324
The total goodwill in the table above does not include intellectual property and other intangibles acquired
through business/territory acquisitions.
Impairment assessment
The methodology used in the impairment testing is value in use – a discounted cash flow model, based on
a five year projection from the approved budget for the year ending 30 June 2018 (‘FY18’) of the tested
segments with a terminal value.
Key assumptions are those to which the recoverable amount of reportable segment is most sensitive.
The following key assumptions were used in the discounted cash flow model for the different reportable
segments:
• growth rates applied based on the FY18 budget applied are 5% to 10% for Asia Pacific, 1% to 5% for EMEA
and 5% to 10% for Americas;
• terminal growth rates applied are 2.5% for Asia Pacific and Americas and 1% for EMEA;
• post tax weighted average cost of capital applied is 11.5% for Asia Pacific, 10.5% for EMEA and 10.8% for
Americas;
• Exchange rates used in the cash flow projections for foreign operations are: AUD/USD exchange rate - $0.75
and AUD/EUR exchange rate - $0.67.
As at 30 June 2017, the recoverable amount of net assets of the Group is greater than the carrying value of the
assets and therefore, the goodwill and other indefinite life intangible assets is not considered to be impaired.
The following describes each key assumption on which management has based its cash flow projections when
determining the value in use of its reportable segments:
• the Group will continue to have access to the data supply from automakers over the projection period;
• the Group will not experience any substantial adverse movements in currency exchange rates;
• the Group’s research and development program will ensure that the current suite of products remains
leading edge; and
• the Group is able to maintain its current gross margins.
No reasonable possible change in assumptions would result in the recoverable amount of a reportable
segment being materially less than the carrying value.
ACCOUNTING POLICY FOR INTANGIBLE ASSETS
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually
for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired,
and is carried at cost less accumulated impairment losses. Impairment losses on goodwill are taken to profit or
loss and are not subsequently reversed if the related asset subsequently increases in value.
45
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
For the year ended 30 June 2017
NOTE 8. NON-CURRENT ASSETS - INTANGIBLES continued
Capitalised development costs
Research costs are expensed in the period in which they are incurred. Capitalised development costs represent
the up-front costs of developing new products or enhancing existing products to meet customer needs.
Development costs are capitalised when it is probable that the project will be a success considering its
commercial and technical feasibility; the Group is able to use or sell the asset; the Group has sufficient resources
and intent to complete the development; and its costs can be measured reliably. Capitalised development costs
are amortised on a straight-line basis over the period of their expected benefit, being their finite life of 4 years.
NOTE 9. CURRENT ASSETS - TRADE AND OTHER RECEIVABLES
Trade receivables
Less: Provision for impairment of receivables
Other receivables
IMPAIRMENT OF RECEIVABLES
The aging of the impaired receivables provided for above are as follows:
0 to 60 days overdue
Over 60 days overdue
Consolidated
2017
$’000
7,880
(396)
7,484
342
2016
$’000
6,679
(398)
6,281
14
7,826
6,295
Consolidated
2017
$’000
2016
$’000
-
396
396
109
289
398
PAST DUE BUT NOT IMPAIRED
Customers with balances past due but without provision for impairment of receivables amount to
$1.764 million as at 30 June 2017 (2016: $1.785 million).
The Group did not consider credit risk on the aggregate balances after reviewing the credit terms of customers
based on recent collection practices.
The aging of the past due but not impaired receivables are as follows:
0 to 60 days overdue
Over 60 days overdue
Consolidated
2017
$’000
1,108
656
1,764
2016
$’000
1,551
234
1,785
ACCOUNTING POLICY FOR TRADE AND OTHER RECEIVABLES
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any provision for impairment. Trade receivables are generally due for settlement
within 30 to 60 days.
46
AR2017
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectable
are written off by reducing the carrying amount directly. A provision for impairment of trade receivables is
raised when there is objective evidence that the Group will not be able to collect all amounts due according to
the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganisation and default or delinquency in payments (more than 60 days
overdue) are considered indicators that the trade receivable may be impaired. The amount of the impairment
allowance is the difference between the asset’s carrying amount and the present value of estimated future
cash flows, discounted at the original effective interest rate. Cash flows relating to short-term receivables are
not discounted as the effect of discounting is immaterial.
NOTE 10. EQUITY - ISSUED CAPITAL AND TREASURY SHARES HELD IN TRUST
Ordinary shares - fully paid
Treasury shares held in trust - fully paid
MOVEMENTS IN ORDINARY SHARE CAPITAL
Details
Balance
Share options exercised
Balance
Share options exercised
Balance
Date
1 July 2015
30 June 2016
30 June 2017
MOVEMENTS IN TREASURY SHARES HELD IN TRUST
Details
Balance
Balance
Purchase of treasury shares
Balance
Date
1 July 2015
30 June 2016
30 June 2017
Parent
2017
Shares
‘000
310,824
(841)
2016
Shares
‘000
309,987
-
2017
2016
$’000
$’000
12,923
(602)
12,449
-
309,983
309,987
12,321
12,449
Issue price
$0.50
$0.57
Acquisition
cost
$0.72
Shares
‘000
309,240
747
309,987
837
310,824
Shares
‘000
-
-
(841)
(841)
$’000
12,074
375
12,449
474
12,923
$’000
-
-
(602)
(602)
ORDINARY SHARES
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company
in proportion to the number of shares held, taking into account amounts paid on those shares. The fully paid
ordinary shares have no par value and the Company does not have a limited amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a
poll each share shall have one vote.
47
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
For the year ended 30 June 2017
NOTE 10. EQUITY - ISSUED CAPITAL AND TREASURY SHARES HELD IN TRUST continued
TREASURY SHARES HELD IN TRUST
Treasury shares are ordinary shares of Infomedia bought on market by the trustee (a wholly owned subsidiary
of the Group) of the Employee Performance Rights and Option Plan for meeting future obligations under that
plan when performance rights and share options vest and shares are allocated to participants.
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.
The capital risk management policy remains unchanged from the 2016 Annual Report.
ACCOUNTING POLICY FOR ISSUED CAPITAL
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
NOTE 11. FINANCIAL INSTRUMENTS
FINANCIAL RISK MANAGEMENT OBJECTIVES
The Group’s activities expose it to a variety of financial risks: market risk (including foreign currency risk and
interest rate risk), credit risk and liquidity risk.
Risk management is carried out by senior finance executives (‘finance’) under policies approved by the Board of
Directors (‘the Board’). These policies include identification and analysis of the risk exposure of the Group and
appropriate procedures, controls and risk limits. Finance identifies, evaluates and hedges financial risks where
appropriate. Finance reports to the Board on a regular basis.
The Group uses derivative financial instruments, zero cost collar contracts to hedge certain risk exposures.
Derivatives are exclusively used for hedging purposes, i.e. not as trading or other speculative instruments.
The Group uses different methods to measure different types of risks to which it is exposed. These methods
include sensitivity analysis in the case of foreign exchange, aging analysis for credit risk.
MARKET RISK
Foreign currency risk
The Group operates and trades in three major economic currency regions (Asia Pacific, Europe, Middle
East and Africa (EMEA) and Americas including North America and Latin & South Americas), as a result,
exposures to exchange rate fluctuations arise. These exposures mainly arise from the subscriptions of the
Group’s products and to a lesser extent the associated cost 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 in extreme situations by entering into zero cost collar contracts under an
approved hedging policy.
In addition to the transactional sale of products, 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).
As at 30 June 2017, there are no outstanding derivative financial instruments in place.
At 30 June 2017, the carrying value of foreign currency denominated cash and cash equivalents are as follows:
48
AR2017
US Dollar
Euro
Consolidated
2017
$’000
5,831
2,896
8,727
2016
$’000
3,841
5,961
9,802
The Group had cash denominated in foreign currencies of $8.727 million as at 30 June 2017 (30 June 2016:
$9.802 million). Based on this exposure, had the Australian dollar weakened by 15%/strengthened by 10%
(30 June 2016: weakened by 15%/strengthened by 10%) against these foreign currencies with all other
variables held constant, the Group’s profit after tax for the year would have been $0.916 million higher/$0.611
million lower (30 June 2016: $0.799 million higher/$0.411 million lower) and equity would have been $0.916
million higher/$0.611 million lower (30 June 2016: $0.799 million higher/$0.411 million lower). The percentage
change is the expected overall volatility of the significant currencies, based on management’s assessment of
reasonable possible fluctuations. The actual foreign exchange loss for the year ended 30 June 2017 was $0.144
million (30 June 2016: loss of $0.224 million).
Interest rate risk
The Group is not exposed to any significant interest rate risk. As at the reporting date, the Group had the
following variable rate cash and cash equivalents:
Consolidated
Cash at bank
Cash on Deposit
2017
2016
Weighted
average
interest rate
%
-
0.82%
Weighted
average
interest rate
%
-
1.30%
Balance
$’000
9,919
3,394
13,313
Balance
$’000
11,442
3,306
14,748
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 and trade and other receivables.
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.
49
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
For the year ended 30 June 2017
NOTE 11. FINANCIAL INSTRUMENTS continued
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 aging analysis as disclosed in Note 9 shows that majority of the
Group’s trade receivables are within the normal credit term and the receivables impairment loss is immaterial.
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 and no borrowings, the Group does not have fixed or contracted
payments at balance date other than operating leases. 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.
The Group’s financial instruments exposed to interest rate and liquidity risk are:
• cash and cash equivalents, minimal exposure to interest rate risk;
• 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 2017, the Group has a total of cash and cash equivalents and trade and other receivables of
$21.139 million (2016: $21.043 million) to meet its future cash outflows of trade and other payables of
$8.175 million (2016: $5.645 million) when due for payment.
FAIR VALUE OF FINANCIAL INSTRUMENTS
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
NOTE 12. CONTINGENCIES
There were no contingent assets or contingent liabilities as at 30 June 2017 and 30 June 2016.
NOTE 13. COMMITMENTS
Contracted non-cancellable leases for property committed at the reporting date but not recognised as
liabilities or payables are provided below.
Consolidated
LEASE COMMITMENTS - OPERATING
Within one year
One to five years
More than five years
Sublease income to be received
2017
$’000
2016
$’000
2,079
6,851
956
9,886
1,764
7,115
2,519
11,398
(1,438)
(1,500)
Operating lease commitments are for office accommodation both in Australia and abroad.
The Company has provided a bank performance guarantee to a maximum value of $1.231 million
(2016: $1.231 million) relating to the lease commitments on its corporate headquarters.
50
AR2017
NOTE 14. EVENTS AFTER THE REPORTING PERIOD
Apart from the matters listed below, no other matter or circumstance has arisen since 30 June 2017 that has
significantly affected, or may significantly affect the Group’s operations, the results of those operations, or the
Group’s state of affairs in future financial years:
• the Board declared a final dividend of 1.20 cents per share, fully franked, refer to Note 6 for further details; and
• on 25 August 2017, the Group completed the acquisition of a CRM software product for its customers.
NOTE 15. INTERESTS IN SUBSIDIARIES
The consolidated financial statements incorporate the assets, liabilities and results of the following
subsidiaries in accordance with the accounting policy described and the end of each relevant note and Note 24:
Name
IFM Europe Ltd
IFM Americas Inc.
IFM Germany GmbH*
IFM China (WOFE)
Principal place of business /
Country of incorporation
United Kingdom
USA
Germany
China
* The entity was liquidated and de-registered during FY17.
NOTE 16. REVENUE
Subscription revenue
Ownership interest
2016
2017
%
%
100%
100%
-
100%
100%
100%
100%
100%
Consolidated
2017
$’000
2016
$’000
70,474
68,087
ACCOUNTING POLICY FOR 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.
Subscription revenue
The Group’s recurring revenue is through subscription. Subscription revenue is recognised when customers
are licensed to access the software and/or the database. Subscription revenue together with related support
revenue (if any) is recognised over the service period.
51
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
NOTE 17. EXPENSES
For the year ended 30 June 2017
Profit before income tax includes the following specific expenses:
DEPRECIATION, AMORTISATION AND IMPAIRMENT
Depreciation
Amortisation
Impairment
Total depreciation, amortisation and impairment
NET FOREIGN EXCHANGE LOSS
Cash flow hedges (gain)/loss
Net foreign exchange loss
RENTAL EXPENSE RELATING TO OPERATING LEASES
Minimum lease payments
SUPERANNUATION EXPENSE
Defined contribution superannuation expense
SHARE-BASED PAYMENTS EXPENSE
Share-based payments expense
EMPLOYEE BENEFITS EXPENSE EXCLUDING SUPERANNUATION
Employee benefits expense excluding superannuation
RESEARCH AND DEVELOPMENT EXPENSES
Total research and development costs incurred during the financial year
Amortisation of deferred development costs
Impairment on capitalised development costs
Less: development costs capitalised
Net research and development costs expensed
ACCOUNTING POLICIES
Consolidated
2017
$’000
2016
$’000
836
8,517
364
9,717
(346)
144
(202)
580
7,767
-
8,347
1,583
224
1,807
2,066
2,712
1,888
1,669
812
(9)
30,959
31,194
18,857
8,474
364
(13,715)
16,732
7,446
-
(8,054)
13,980
16,124
Foreign currency translation
The financial statements are presented in Australian dollars, which is Infomedia Ltd’s functional and
presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at financial year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates
at the reporting date. The revenue and expenses of foreign operations are translated into Australian dollars
using the average exchange rates, which approximate the rates at the dates of the transactions, for the
period. All resulting foreign exchange differences are recognised in other comprehensive income through the
foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is
disposed of.
52
AR2017
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the
arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent on the
use of a specific asset or assets and the arrangement conveys a right to use the asset.
A distinction is made between finance leases, which effectively transfer from the lessor to the lessee
substantially all the risks and benefits incidental to the ownership of leased assets, and operating leases,
under which the lessor effectively retains substantially all such risks and benefits.
Operating lease payments, net of any incentives received from the lessor, are charged to profit or loss on a
straight-line basis over the term of the lease.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled wholly within 12 months of the reporting date are measured at the amounts expected
to be paid when the liabilities are settled.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date is measured at the present value of expected future payments to be made in respect of services
provided by employees up to the reporting date using the projected unit credit method. Consideration is given
to expected future wage and salary levels, experience of employee departures and periods of service. Expected
future payments are discounted using market yields at the reporting date on corporate bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
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 Group, and provide greater incentive to have broader involvement and
participation in the Group beyond their immediate role. Equity participation also assists the Group to attract
and retain skilled and experienced 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 Group’s half
year and annual result announcements, unless Board express approval is obtained.
The Group 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.
53
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
For the year ended 30 June 2017
NOTE 18. SHARE-BASED REMUNERATION continued
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 Group’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 Group provides eligible employees (including the key management personnel but excluding non-executive
directors) 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.
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 conditions 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 participants; and
• if the vesting conditions are not met then the Rights automatically lapse unless a retesting event was
specified in the original grant.
The following performance hurdles and vesting scales apply to the outstanding Rights on issue during the
financial year:
Rights granted on 1 October 2014
• Testing date: 1 August 2017
• Rights tested on testing date: 100% - if unvested, Rights lapsed as performance hurdle not met
• Performance hurdle: Earnings per shares (EPS) target of 8.5 cents to be achieved in FY17
• Vesting scale: Maximum – 120% when EPS exceeds EPS target by 10%; Minimum – nil if EPS target is not met
Rights granted on 13 October 2015
• Testing date: 1 October 2016; 1 October 2017 and 1 October 2018
• Rights tested on testing date: 50% on 1 October 2016 and retest unvested Rights on 1 October 2017 and test
remaining 50% plus any unvested Rights on 1 October 2018
• Performance hurdle: EBIT growth target
• Vesting scale: Maximum – EBIT growth target of 5% for rights tested on 1 October 2016; EBIT growth target
of 10% for rights tested on 1 October 2017; and EBIT growth target of 15% for rights tested on 1 October 2018.
54
AR2017
Rights granted on 1 July 2016 (CEO and CFO only)
• Grant dates: 29 January 2016 and 17 February 2016 (being signing dates of service agreements) are deemed
grant date for CEO and CFO, respectively;
• Testing date: Tranche 1: 33% of Rights measured over 1 July 2016-30 June 2017; 33% of Rights measured over
1 July 2017-30 June 2018; 33% of Rights measured over 1 July 2018-30 June 2019;
• Rights retested on testing date: Tranche 2: Rights measured over 1 July 2017-30 June 2019 (final testing for
unvested Rights);
• Performance hurdle: Company Annual Growth Rate (‘CAGR’) target: Compound EPS Growth percentage
above FY16 EPS;
• Vesting scale: Maximum – Below 10% CAGR: Nil; At 10% CAGR: 25%; Between 10% and 15% CAGR: straight
line pro-rata vesting between 25%-100%; At or above 15% CAGR: 100%;
• Post vesting disposal restrictions: Shares acquired upon vesting of Rights can only be disposed following the
announcement of the audited results for the year ended 2021.
Rights granted on 1 July 2016 (other participants)
• Testing date: 1 October 2019;
• Rights tested on testing date: 100% - if unvested, Rights lapse
• Performance hurdle: Company Annual Growth Rate (‘CAGR’) target: Compound EPS Growth percentage
above FY16 EPS
• Vesting scale: Maximum – Below 10% CAGR: Nil; At 10% CAGR: 25%; Between 10% and 15% CAGR: straight
line pro-rata vesting between 25%-100%; At or above 15% CAGR: 100%
The fair value of the Rights granted under the Executive Incentive Plan is estimated as at the grant date using a
Monte-Carlo Simulation model taking into account the term and conditions upon which the Rights were granted.
The following information relates to the Rights issued under the Executive Incentive Plan:
2017
Grant date
Expiry date at grant date
Balance at
Fair value the start of
the year
Granted
Exercised
Lapsed
01/10/2014 01/08/2017
13/10/2015 01/10/2018
29/01/2016 01/10/2019
17/02/2016 01/10/2019
01/07/2016 01/10/2019
$1.15
$0.75
$0.53-$0.57
$0.53-$0.57
$0.48
424,184
760,000
-
-
-
1,184,184
-
-
1,418,067
756,302
716,766
2,891,135
-
-
-
-
-
-
-
(125,000)
-
-
-
(125,000)
2016
Grant date
Expiry date at grant date
Balance at
Fair value the start of
the year
Granted
Exercised
Lapsed
Balance at
the end of
the year
424,184
635,000
1,418,067
756,302
716,766
3,950,319
Balance at
the end of
the year
01/10/2014 01/08/2017
13/10/2015 01/10/2018
$1.15
$0.75
614,702
-
614,702
-
826,000
826,000
-
-
-
(190,518)
(66,000)
(256,518)
424,184
760,000
1,184,184
No Rights are vested and exercisable as at 30 June 2017 (2016: Nil). However, 724,790 Rights are expected to
become exercisable during FY18 based on the growth of 15.6% in EPS achieved in FY17
Long term incentive – Options (CEO and CFO only)
The Company provides CEO and CFO with the opportunity to subscribe for ordinary shares in the form of
Options in the Company through the Performance Rights and Option Plan.
55
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
For the year ended 30 June 2017
NOTE 18. SHARE-BASED REMUNERATION continued
The key terms of the Options are:
• options granted during FY17: the grant dates of 29 January 2016 and 17 February 2016 (being signing dates
of service agreements) are deemed grant date for CEO and CFO, respectively;
• granted for nil issue consideration;
• each Option entitles the participants to subscribe for one Infomedia ordinary share;
• Options will become exercisable when the Company’s share price exceed the exercise price of 92.2 cents;
• Options may not be exercised prior to the release of the Company’s audited results for the year ending 30
June 2019;
• 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
• post vesting disposal restrictions: 50% of shares following the exercise of the Options subject to a disposal
restriction until after the release of the Company’s audited results for the year ending 30 June 2021.
The fair value of the Options granted under the Executive Incentive Plan is estimated as at the grant date
using a Monte-Carlo Simulation model taking into account the term and conditions upon which the Options
were granted.
The following information relates to the Options issued under the Executive Incentive Plan:
2017
Grant date
Expiry date at grant date
Balance at
Fair value the start of
the year
Granted
Exercised
Lapsed
Balance at
the end of
the year
29/01/2016 01/10/2019
17/02/2016 01/10/2019
$0.07
$0.07
-
-
-
3,750,000
2,000,000
5,750,000
-
-
-
-
-
-
3,750,000
2,000,000
5,750,000
No Options are vested and exercisable as at 30 June 2017.
EMPLOYEE SHARE OPTIONS PLAN
The Group 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.
56
AR2017
Options granted on 27 September 2013
• Vesting dates: the options were to vest in 3 equal tranches. 1/3 of the options vest on 27 September 2014,
27 September 2015 and 27 September 2016 respectively
• Exercise price: $0.565
• Performance hurdles: 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: 31 October 2016
Options granted on 16 December 2013
• Vesting dates: the options were to vest in 3 equal tranches. 1/3 of the options vest on 16 December 2014,
16 December 2015 and 16 December 2016 respectively
• Exercise price: $0.565
• Performance hurdles: 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: 31 December 2016
The following information relates to the Options issued under the Employee Share Option Plan:
2017
Grant date
Expiry date at grant date
Balance at
Fair value the start of
the year
Granted
Exercised
Lapsed
Balance at
the end of
the year
16/12/2013
31/12/2016
$0.30
876,667
876,667
-
-
(836,667)
(836,667)
(40,000)
(40,000)
-
-
Weighted average exercise price
$0.57
$0.00
$0.57
$0.57
$0.00
2016
Grant date
Expiry date at grant date
Balance at
Fair value the start of
the year
Granted
Exercised
Lapsed
Balance at
the end of
the year
13/03/2013 01/02/2016
31/10/2015
27/09/2013
31/12/2016
16/12/2013
$0.21
$0.30
$0.30
160,000
750,000
1,043,334
1,953,334
-
-
-
-
(160,000)
(500,000)
(86,667)
(746,667)
-
(250,000)
(80,000)
(330,000)
-
-
876,667
876,667
Weighted average exercise price
$0.55
$0.00
$0.51
$0.57
$0.57
ACCOUNTING POLICY FOR SHARE-BASED PAYMENTS
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, options over shares or rights that are provided to employees
in exchange for the rendering of services.
The cost of equity-settled transactions is measured at fair value on grant date. Fair value is independently
determined using a pricing model that takes into account the exercise price, the term of the option, the impact
of dilution, the share price at grant date and expected price volatility of the underlying share, the expected
dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions
that do not determine whether the Group receives the services that entitle the employees to receive payment.
No account is taken of any other vesting conditions.
The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the
vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at
each reporting date less amounts already recognised in previous periods.
57
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
NOTE 19. RECONCILIATION OF PROFIT AFTER INCOME TAX
TO NET CASH FROM OPERATING ACTIVITIES
For the year ended 30 June 2017
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Impairment of intangibles
Net loss on disposal of property, plant and equipment
Share-based payments
Foreign exchange differences
Loss on hedging instruments
Change in operating assets and liabilities:
Increase in trade and other receivables
Decrease in derivative assets
Decrease/(increase) in prepayments
Increase in trade and other payables
Decrease in provision for income tax
Increase/(decrease) in deferred tax liabilities
Increase in employee benefits
Increase in deferred revenue
Consolidated
2017
$’000
2016
$’000
11,953
10,323
9,353
364
4
812
(144)
-
(1,531)
92
(571)
2,393
(1,305)
707
104
(369)
8,347
-
-
(9)
-
1
(692)
-
641
1,405
(2,449)
(34)
204
1,306
Net cash from operating activities
21,862
19,043
NOTE 20. RELATED PARTY TRANSACTIONS
PARENT ENTITY
Infomedia Ltd is the parent entity.
SUBSIDIARIES
Interests in subsidiaries are set out in Note 15.
KEY MANAGEMENT PERSONNEL
Disclosures relating to key management personnel are set out in Note 21 and the remuneration report included
in the directors’ report.
TRANSACTIONS WITH RELATED PARTIES
There were no transactions with related parties during the current and previous financial year.
RECEIVABLE FROM AND PAYABLE TO RELATED PARTIES
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
LOANS TO/FROM RELATED PARTIES
There were no loans to or from related parties at the current and previous reporting date.
58
AR2017
NOTE 21. KEY MANAGEMENT PERSONNEL DISCLOSURES
COMPENSATION
The aggregate compensation made to 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 benefits
Share-based payments
NOTE 22. PARENT ENTITY INFORMATION
Set out below is the supplementary information about the parent entity.
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
Profit after income tax
Total comprehensive income
STATEMENT OF FINANCIAL POSITION
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital and treasury shares held in trust
Cash flow hedge reserve
Share-based payments reserve
Retained profits
Total equity
Consolidated
2017
$
2016
$
1,736,479
85,455
15,729
-
631,791
1,439,320
118,224
(1,721)
396,693
242,012
2,469,454
2,194,528
Parent
2017
$’000
7,284
7,284
2016
$’000
12,623
13,173
Parent
2017
$’000
2016
$’000
21,674
15,813
60,955
56,760
9,720
6,211
14,546
12,352
12,923
(10)
3,499
29,997
12,451
148
711
31,098
46,409
44,408
GUARANTEES ENTERED INTO BY THE PARENT ENTITY IN RELATION TO THE DEBTS OF ITS SUBSIDIARIES
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2017 and 30 June 2016.
59
AR2017
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
For the year ended 30 June 2017
NOTE 22. PARENT ENTITY INFORMATION continued
CONTINGENT LIABILITIES
Other than the following guarantee, there were no contingent liabilities as at 30 June 2017:
The parent entity has provided a bank performance guarantee to a maximum value of $1.231 million
(2016: $1.231 million) relating to the lease commitments on its corporate headquarters.
CAPITAL COMMITMENTS - PROPERTY, PLANT AND EQUIPMENT
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2017 and 30 June 2016.
SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in Note 24,
except for the following:
• Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
• Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may
be an indicator of an impairment of the investment.
NOTE 23. REMUNERATION OF AUDITORS
During the financial year the following fees were paid or payable for services provided by Deloitte Touche
Tohmatsu, the auditor of the Company:
AUDIT SERVICES - DELOITTE TOUCHE TOHMATSU (2016: BDO)
Audit or review of the financial statements
OTHER SERVICES - DELOITTE TOUCHE TOHMATSU (2016: BDO)
Taxation compliance and advisory services
Other assurance services
Consolidated
2017
$
2016
$
198,000
117,417
-
-
-
25,000
10,000
35,000
198,000
152,417
NOTE 24. OTHER ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-
term, highly liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
TRADE AND OTHER PAYABLES
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and
are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
CURRENT AND NON-CURRENT CLASSIFICATION
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in
the Group’s normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised
within 12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from
being exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets
are classified as non-current.
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A liability is classified as current when: it is either expected to be settled in the Group’s normal operating
cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting
period; or there is no unconditional right to defer the settlement of the liability for at least 12 months after the
reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are
tested annually for impairment, or more frequently if events or changes in circumstances indicate that they
might be impaired. Other non-financial assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for
the amount by which the asset’s carrying amount exceeds its recoverable amount.
Recoverable amount is the higher of an asset’s fair value less costs of disposal and value-in-use. The value-in-
use is the present value of the estimated future cash flows relating to the asset using a pre-tax discount rate
specific to the asset or reportable segments to which the asset belongs. Assets that do not have independent
cash flows are grouped together to form a reportable segment.
RESERVES
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements
of foreign operations to Australian dollars.
Cash flow hedge reserve
The reserve is used to recognise the effective portion of the gain or loss of cash flow hedge instruments that is
determined to be an effective hedge.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees as part of their remuneration.
NEW ACCOUNTING STANDARDS AND INTERPRETATIONS NOT YET MANDATORY OR EARLY ADOPTED
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not
yet mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2017.
The Group’s assessment of the impact of these new or amended Accounting Standards and Interpretations,
most relevant to the Group, are set out below.
AASB 9 Financial Instruments
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard
replaces all previous versions of AASB 9 and completes the project to replace IAS 39 ‘Financial Instruments:
Recognition and Measurement’. AASB 9 introduces new classification and measurement models for financial
assets. A financial asset shall be measured at amortised cost, if it is held within a business model whose objective
is to hold assets in order to collect contractual cash flows, which arise on specified dates and solely principal
and interest. All other financial instrument assets are to be classified and measured at fair value through profit
or loss unless the entity makes an irrevocable election on initial recognition to present gains and losses on
equity instruments (that are not held-for-trading) in other comprehensive income (‘OCI’). New simpler hedge
accounting requirements are intended to more closely align the accounting treatment with the risk management
activities of the entity. New impairment requirements will use an ‘expected credit loss’ (‘ECL’) model to recognise
an allowance. Impairment will be measured under a 12-month ECL method unless the credit risk on a financial
instrument has increased significantly since initial recognition in which case the lifetime ECL method is adopted.
The standard introduces additional new disclosures. The Group will adopt this standard from 1 July 2018. It is
expected that application of this standard will not have significant financial impact on the basis that:
• the financial assets only consist of cash and cash equivalents and trade and other receivables;
• the financial liabilities only consist of trade and other payables;
• there are no financial instruments such as zero cost collar contracts outstanding at reporting date;
• both financial assets and liabilities do not carry any financing component as at 30 June 2017; and
• all the financial assets and liabilities carrying values are close to fair value.
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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS continued
For the year ended 30 June 2017
NOTE 24. OTHER ACCOUNTING POLICIES continued
AASB 15 Revenue from Contracts with Customers
This standard is applicable to annual reporting periods beginning on or after 1 January 2018. The standard
provides a single standard for revenue recognition. The core principle of the standard is that an entity will
recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard
will require: contracts (either written, verbal or implied) to be identified, together with the separate performance
obligations within the contract; determine the transaction price, adjusted for the time value of money excluding
credit risk; allocation of the transaction price to the separate performance obligations on a basis of relative
stand-alone selling price of each distinct good or service, or estimation approach if no distinct observable prices
exist; and recognition of revenue when each performance obligation is satisfied. Credit risk will be presented
separately as an expense rather than adjusted to revenue. For goods, the performance obligation would be
satisfied when the customer obtains control of the goods. For services, the performance obligation is satisfied
when the service has been provided, typically for promises to transfer services to customers. For performance
obligations satisfied over time, an entity would select an appropriate measure of progress to determine how
much revenue should be recognised as the performance obligation is satisfied. Contracts with customers will be
presented in an entity’s statement of financial position as a contract liability, a contract asset, or a receivable,
depending on the relationship between the entity’s performance and the customer’s payment. Sufficient
quantitative and qualitative disclosure is required to enable users to understand the contracts with customers;
the significant judgements made in applying the guidance to those contracts; and any assets recognised from
the costs to obtain or fulfil a contract with a customer. The Group will adopt this standard from 1 July 2018.
The Group’s revenue is primarily through subscription. Subscription revenue is recognised when customers are
licensed to access the software and/or the database with related support revenue (if any) being recognised
over the service period. In FY17, the Group has made a preliminary analysis of the types on revenue and support
revenue. The Group is currently undertaking a comprehensive review of the implementation impacts of AASB 15.
The Group has not yet reached a determination as to the impacts of this accounting standard.
AASB 16 Leases
This standard is applicable to annual reporting periods beginning on or after 1 January 2019. Under the new
standard, a lessee is in essence required to: (a) recognise all right of use assets and lease liabilities, with the
exception of short term (under 12 months) and low value leases, on the balance sheet. The liability is initially
measured at the present value of future lease payments for the lease term. This includes variable lease
payments that depend on an index or rate but excludes other variable lease payments. The right of use asset
reflects the lease liability, initial direct costs, any lease payments made before the commencement date of the
lease, less any lease incentives and, where applicable, provision for dismantling and restoration. (b) recognise
depreciation of right of use assets and interest on lease liabilities in the income statement over the lease term.
(c) separate the total amount of cash paid into a principal portion (presented within financing activities) and
interest portion (which the Group presents in operating activities) in the cash flow statement. This standard
will have an impact on the Group’s earnings and shareholders’ funds at transition and in future years. It must
be implemented retrospectively, either with the restatement of comparatives or with the cumulative impact
of application recognised as at 1 January 2019 under the modified retrospective approach. AASB 16 contains
a number of practical expedients, one of which permits the classification of existing contracts as leases under
current accounting standards to be carried over to AASB 16. Under the modified retrospective approach, on a
lease-by-lease basis, the right of use of an asset may be deemed to be equivalent to the liability at transition
or calculated retrospectively as at inception of the lease. Under AASB 16 the present value of the Group’s
operating lease commitments as defined under the new standard, excluding low value leases and short
term leases, will be shown as right of use assets and as lease liabilities on the balance sheet. Information on
the undiscounted amount of the Group’s operating lease commitments under AASB 16, the current leasing
standard, is disclosed in Note 13. The Group is considering the available options for transition. To date, work
has focused on the identification of the provisions of the standard which will most impact the Group. In the
next financial year, work on the detailed review of contracts and financial reporting impacts will commence.
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DIRECTORS’ DECLARATION
For the year ended 30 June 2017
In the directors’ opinion:
• the attached financial statements and notes comply with the Corporations Act 2001, the Accounting
Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
• the attached financial statements and notes comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board as described in Note 2 to the financial statements;
• the attached financial statements and notes give a true and fair view of the Group’s financial position as at
30 June 2017 and of its performance for the financial year ended on that date; 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 declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations
Act 2001.
On behalf of the directors
Bart Vogel
Chairman
28 August 2017
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SHAREHOLDER INFORMATION
As at 18 August 2017
The following information is presented in compliance with ASX Listing Rules 4.10 (as relevant).
The information is current as at 18 August 2017.
1. Number of shareholders
As at 18 August 2017 there were 5,419 shareholders holding a total of 310,823,521 fully paid ordinary shares.
2. Distribution of quoted equity securities & small holdings
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
Securities
345,152
5,477,732
8,772,887
54,696,109
241,531,641
310,823,521
The number of holders holding less than a marketable parcel is 250.
3. Top 20 shareholders
Name
J P Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
HSBC Custody Nominees (Australia) Limited
Bell Potter Nominees Ltd (BB NOMINEES A/C)
BNP Paribas Nominees Pty Ltd (AGENCY LENDING DRP A/C)
National Nominees Limited
Brispot Nominees Pty Ltd (HOUSE HEAD NOMINEE A/C)
BNP Paribas Nominees Pty Ltd (DRP)
AMP Life Limited
Bond Street Custodians Limited (MACQUARIE SMALLER CO’S A/C)
RBC Investor Services Australia Nominees Pty Limited (BKCUST A/C)
BNP Paribas Nominees Pty Ltd (HUB24 Custodial Serv Ltd DRP)
Mr Peter Alexander Brown
Pacific Custodians Pty Limited
Anacacia Pty Limited (WATTLE FUND A/C)
Warbont Nominees Pty Limited (UNPAID ENTREPOT A/C)
Citicorp Nominees Pty Limited (COLONIAL FIRST STATE INV A/C)
Invia Custodian Pty Limited (SELECTCOR A/C)
Bond Street Custodians Ltd (MACQ AUS EMERGING COMPANIES)
Escor Equities Consolidated Pty Ltd
Ms Gail Gorham
Total
%
No. of holders
0.11
1.76
2.82
17.60
77.71
100.00
Number held
56,136,114
39,296,392
33,811,508
26,404,709
17,542,225
10,853,335
7,566,657
7,392,036
3,839,352
3,114,402
2,875,192
1,369,165
1,350,000
1,317,297
1,313,673
1,111,014
895,657
654,431
625,902
600,000
600,000
564
1,800
1,080
1,837
138
5,419
%
18.06%
12.64%
10.88%
8.50%
5.64%
3.49%
2.43%
2.38%
1.24%
1.00%
0.93%
0.44%
0.43%
0.42%
0.42%
0.36%
0.29%
0.21%
0.20%
0.19%
0.19%
218,669,061
70.34%
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AR2017 4. Substantial shareholders
The following information is extracted from substantial shareholder notices received by the Company
Shareholder
Number of shares
Voting power
Date of last notice
Viburnum Funds Pty Ltd ACN 126 348 990
41,967,578
13.50%
21 February 2017
Spheria Asset Management Pty Limited
ACN 611 081 326
TOTAL
17,127,262
64,588,319
5.51%
19.01%
25 July 2017
5. Unquoted equity securities
Unquoted share options
Employees
Directors
Unquoted performance rights
Employees
Directors
6. Voting rights
Number on issue Number of holders
5,750,000
-
3,757,154
-
2
-
28
-
Fully Paid Ordinary Shares: On a show of hands every member present at a meeting in person or by proxy shall
have one vote and upon a poll shall have one vote for each share represented.
Unquoted share options and performance rights: No voting rights apply unless and until the unquoted
securities are converted to Fully Paid Ordinary Shares.
7. Share buy-back
Infomedia Ltd does not have a current on-market buy-back in operation.
8. Shares purchased on-market
During the reporting period 841,403 shares were purchased on-market at an average price of 72 cents per
share for the purpose of satisfying the entitlements of the holders of options or other rights to acquire
Infomedia securities in future periods, as granted under an employee incentive scheme.
9. Corporate Governance Statement
Infomedia’s 2017 Corporate Governance Statement is available on the Company’s website
http://www.infomedia.com.au/investors/corporate-governance/
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AR2017 CORPORATE DIRECTORY
INFOMEDIA LTD (ASX:IFM)
ABN 63 003 326 243
DIRECTORS
Bart Vogel – Non-Executive Chairman
Jonathan Rubinsztein – CEO & Managing Director
Paul Brandling
Clyde McConaghy
Anne O’Driscoll
COMPANY SECRETARIES
Daniel Wall
Mark Grodzicky
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
Link Market Services
Level 12, 680 George Street,
Sydney, NSW, 2000
Telephone
+61 1300 554 474
Email
registrars@linkmarketservices.com.au
Website
http://www.linkmarketservices.com.au/
AUDITORS
Deloitte Touche Tohmatsu
Grosvenor Place
225 George 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.
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