ANNUAL REPORT 2019
ANNUAL REPORT
2020
Reimagining Aftersales
Reimagining Aftersales
ANNUAL REPORT 2020
Our appreciation
This year’s 2020 Annual Report is an opportunity to say thank you to our shareholders for your support during the year.
We would also like to thank our employees and our customers who have shown tremendous commitment, flexibility,
willingness and solidarity to ensure the best outcomes for all our stakeholders during a remarkably challenging time.
Thank you!
ABOUT INFOMEDIA LTD
Infomedia Ltd is an Australian-based technology solutions company that develops and supplies electronic parts catalogues,
service quoting software, data analytics and business insights for the aftersales parts and service sector of the global
automotive industry. The company was founded in 1987 and is headquartered in Sydney, Australia.
As a team and a business, we are committed to and governed by our core values:
Accelerate performance – we are action orientated
and always accountable to our customers
Drive innovation & service – our technology
leadership and data analytics insights empower our
customers to meet their key objectives
Navigate global & steer local – our customers benefit
from a unified approach with local execution
Have fun in the fast lane – we balance hard work
with a fun and vibrant workplace. While we missed
being together during much of this year, we have very
much enjoyed getting to know each other’s children,
pets, home lives and hometowns with our team of 400
(including 100 outsourced) spanning the globe
We continue our aspirational journey knowing that the success of our customers, our employees and our shareholders
will drive Infomedia’s success. We aspire:
• To be recognised as the market leading software
solutions and data analytics provider to global
automotive manufacturer aftersales
ANNUAL GENERAL MEETING
• To be admired by industry
• To be a great place to work
• To deliver consistent, superior shareholder returns
The Annual General Meeting of Infomedia will be held on Wednesday, 11 November 2020. The meeting will take place
virtually, owing to the ongoing COVID-19 pandemic. A formal Notice of Meeting will be released in October 2020.
GOVERNANCE REPORTING AND POLICY DISCLOSURE
Infomedia’s Financial Report for the 2020 financial year and previous years, including half-year reports, can be accessed
and viewed on our website at https://www.infomedia.com.au/investors/annual-and-half-year-reports.
Additional reporting, including Infomedia’s Corporate Governance Statement, Code of Conduct and key governance
policies can be a viewed on Infomedia’s website at: https://www.infomedia.com.au/investors/governance
Reimagining Aftersales
ANNUAL REPORT 2020
TABLE OF CONTENTS
Chairman & CEO Report
Reimagining Aftersales with Next Gen
Infomedia Ltd Board of Directors
Directors’ Report
Remuneration Report
Auditor’s Independence Declaration
FY20 Financial Report
Directors’ Declaration
Independent Auditor’s Report to Infomedia Ltd Shareholders
Shareholder Information
Corporate Directory
Financial Calendar
Glossary
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PLEASE CHOOSE ELECTRONIC & DIGITAL COMMUNICATIONS
Infomedia is a technology solutions company with a commitment to sustainability and the environment. We
encourage all stakeholders to download an electronic version of our publications instead of requesting printed
copies. Reports are available at https://www.infomedia.com.au/investors/annual-and-half-year-reports/.
If you have received a printed hard copy of Infomedia’s 2020 Annual Report, please contact Link Market Services at
www.linkmarketservices.com.au and elect to receive all future Annual Reports and registry communications
in electronic form. Thank you!
ABOUT THIS REPORT
Throughout Infomedia’s 2020 Annual Report, terms including ‘the Company’, ‘your Company’, ‘the Group’, and
‘Infomedia’ all refer to Infomedia Ltd ABN: 63 003 326 243. In addition, terms referring ‘the year’, ‘the financial year’
and ‘FY20’ all refer to the 12 months to 30 June 2020. All references to dollars are in Australian dollars (AUD) unless
stated otherwise.
Infomedia’s 2020 Annual Report was authorised for issue by the Board of Directors on 24 August 2020.
This 2020 Annual Report may contain forward looking statements. Please refer to page 88 for an explanation of
forward looking statements and the risks, uncertainties and assumptions to which they are subject.
© 2020 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.
infomedia.com.au 1
Chairman & CEO Report
ANNUAL REPORT 2020
Dear Shareholder,
ACCELERATING PERFORMANCE
On behalf of the Board of Infomedia Ltd we would like
to first express our gratitude to our shareholders for
your support in what has been a year of change, growth,
challenge, and opportunity. We acknowledge your backing
during this most remarkable 2020 financial year (FY20).
We would also like to acknowledge the difficulty and
uncertainty faced by our customers over the year.
Navigating the tightening and easing of COVID-19 related
restrictions at a time when the automotive industry was
already confronted by significant disruption, has been
extraordinary. We have appreciated the opportunity to
work with each of our customers to ensure both they and
Infomedia emerge in a stronger position.
Finally, we would also like to acknowledge the commitment
of our employees around the world. As a global team, we
have worked day and night together (and virtually), to
prioritise the immediate needs of our customers and ensure
the safety and security of each other.
To all of you, collectively our stakeholders, we remain
committed to delivering sustainable growth in our
business, providing solutions that drive success for our
customers and building a great place to work.
This year, even more so than in previous years, Infomedia’s
Board worked very closely together and that is again
reflected in a combined Chairman & CEO Report for the
2020 financial year.
The 2020 financial year will be remembered in Infomedia’s
history as a time of sustained performance and continued
investment in the future by building the next generation of
our core parts and service technology solutions, investing
in data and completing a successful $83.9 million capital raise.
The strategic decisions we have made in FY20 have been
intentionally bold to ensure Infomedia is well placed to
sustain growth into the future.
Although the future is uncertain in a macro economic
sense, Infomedia’s strategic direction and objectives to
be the leading software provider to the global automotive
aftersales market are clear. The disruptive trends facing
our industry and decline in new car sales are resulting in
an increased focus on leveraging technology in automotive
aftersales.
The 2020 financial year has been humbling. We were
pleased to deliver a result that was in line with expectations.
We welcomed the opportunity to support our customers
during a difficult time.
We refer to accelerating performance because it is a key
value that underpins our culture and informs our decisions.
We continue to drive our business for the long term, despite
the challenges and uncertainty we may face in the near term.
In the period July 2019 to January 2020, we completed the
Nissan global EPC roll-out and were negotiating several
opportunities across APAC and EMEA. Sales across the
Americas were also on the rise, under a reinvigorated
sales team.
In February, the world began to change with the spread
of COVID-19. Initially our EMEA office was reporting
difficulty engaging some customers due to increasing
travel restrictions. Border closures quickly followed across
the Americas and by the end of March, Infomedia had all
400 (including 100 outsourced) employees around the
world working from home around the clock to ensure our
customers were supported.
The strategic decisions we have made in
FY20 have been intentionally bold to ensure
Infomedia is well placed to sustain growth
into the future
The strong start to the year underpinned a good result
despite delayed revenue opportunities in the second half
of the year.
Infomedia’s earnings per share (EPS) increased 10% to
5.69 cents per share (cps) up from 5.19 cps in the previous
corresponding period (pcp).
Infomedia reported revenue of $94.6 million for the year,
an increase of 12% pcp.
Net profit after tax for the year was $18.6 million, an
increase of 15% pcp. EBITDA margins increased from
45% to 49% pcp.
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JONATHAN RUBINSZTEIN
CEO & Managing Director
BART VOGEL
Chairman
infomedia.com.au 3
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Chairman & CEO Report
ANNUAL REPORT 2020
Cash EBITDA, a key internal metric to identify the cash
impact of capitalised development costs in reported NPAT,
increased 11% to $21.3 million.
Infomedia declared a final dividend of 2.15 cps; a total
dividend of 4.30 cps for the 2020 financial year, an increase
of 10% pcp.
Infomedia is in a solid financial position with net current
assets of $98.0 million for the year. Cash and cash
equivalents of $103.9 million includes $83.9 million raised
from an institutional placement and share purchase plan
completed in May 2020.
We also took quick action to actively engage our global
customer base and identify opportunities to support
both auto manufacturers and dealers through the most
immediate difficulties between April and June 2020.
Across the business we increased our cadence of
communication and worked diligently to manage costs
and minimise cash impacts. In May 2020, we completed
a capital raise of $83.9 million from an institutional
placement and share purchase plan; a key initiative in
Infomedia’s protect and attack strategy.
PROTECT AND ATTACK: PRE-EMPTIVE FIVE PILLAR COVID-19 PANDEMIC RESPONSE
Protect Our Staff
& Customers
Defend the
Topline
Manage BAU
Manage
Costs & Cash
Attack
Not Only Protect
Global workforce
working remotely
with 60% on 80/20
flex schedules
Sales team
engagement intensified
to identify challenges
and provide solutions
Increased cadence
of virtual
communication
and collaboration
Focus on collections
and reduction in
discretionary spend
Position to fast-track
acquisitions,
customer growth
and upsell
It became apparent the rapid pace of change impacting our
customers provided further endorsement of our strategy
as automakers and dealers moved to protect the most
profitable area of their businesses, aftersales.
The decline in new car sales from COVID-19 related
restrictions provides a catalyst for further adoption
by auto manufacturers and dealers of technology
that improves productivity and enhances customer
relationships in aftersales.
As one of very few global technology companies,
specialising in both auto manufacturer parts and service
solutions, Infomedia is uniquely placed to capitalise on the
disruptive trends and significant challenges facing
the automotive industry.
The additional capital raised to fund future growth,
remains intact and will allow the company to fast-track
our growth strategy towards acquiring quality assets that
leverage our core solutions with enhanced technology,
access to new customers and entry into new geographies.
NAVIGATING GLOBAL & STEERING LOCAL
By late March, the management team with the full support
of the Board implemented a ‘protect and attack’ strategy
to ensure that we could protect the business and our
employees, provide support to our customers and also
position the business to take advantage of opportunities
as they emerged.
Our immediate concern was ensuring our employees were
safe and had the essential equipment necessary to work
from home. Approximately 60 per cent of the workforce
participated in 80/20 flex schedule work arrangements,
reducing work hours by roughly one day per week. The
remainder, largely our development team, worked on
building the next generation of our parts and service
product suites.
4 infomedia.com.au
We are reimagining aftersales with a focus on parts, service and data insights
solutions that proactively respond to the emerging trends
of a complex, fragmented industry
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Chairman & CEO Report
DRIVING INNOVATION AND SERVICE
We take an agile approach to strategy. Whether it is
innovation, investment, acquisition, or partnership we are
pursuing multiple opportunities within each of our core
products. Pandemic related restrictions and uncertainty
may delay our ability to fully execute in the near term, but
our strategy and commitment to innovation in aftersales
has not wavered.
Over the past few years, the level of investment in the
business has increased to underpin sustainable growth
into the future. To remain competitive and position
ourselves to take market share, we have continued to
invest in developing customer focussed, market leading
aftersales technology solutions capitalising on emerging
trends. The current environment of rapid change requires
all industries to reconsider planning and has presented an
opportunity for our customers to think differently about
their current aftersales processes.
We understand how declining new car sales, ever-
changing customer expectations and rapid technology
advancements are impacting our auto manufacturer
customers and their dealers. Disruption is changing the
customer experience, the operations of a dealership,
ownership structures and the interaction with the car itself
as a connected, autonomous, or electric vehicle.
These emerging trends, are resulting in an increased
focus by auto manufacturers and dealers on leveraging
technology in automotive aftersales. Infomedia’s global
parts, service and data insights solutions can increase
aftersales productivity and profitability, improve service
levels, and capture and retain deeper customer insight.
ANNUAL REPORT 2020
BUILDING THE NEXT GENERATION OF
AFTERSALES TECHNOLOGY
During FY20, Infomedia embarked one of the largest
development projects in the company’s history to build the
next generation (Next Gen) of our core Microcat electronic
parts catalogue (EPC) and Superservice solutions.
We have completely reimagined aftersales based
on feedback from our global auto manufacturer and
dealer customers to help make parts departments
more productive and more profitable with leading-edge
innovation and design.
Infomedia’s Next Gen technology complements the
automotive sales process, enabling a more personalised
customer experience and allowing the dealership to
capture data insights that are actionable, improve
productivity and increase aftersales.
The Next Gen EPC surpasses the functionality of our
competitors with innovation that moves beyond a siloed,
technical reference tool to an integrated parts selling
platform.
We have also been investing in data analytics. As one
of very few global software providers in both parts and
service, we are in a distinctive and enviable position to
leverage information and transaction data that is often
trapped in disparate, operational manufacturing and
dealership systems.
We believe connecting data silos remains an
under-exploited strategy for automakers. We have the
technology solutions to create opportunities to drive
better customer experiences, define success metrics
and grow aftersales profits by connecting information
to create additional, actionable insights.
CAPITALISING ON EMERGING TRENDS
Build the next generation of integrated parts and service platform
Drive global account strategy to extend brand position
Partner to expand market coverage and leverage assets into the wider automotive ecosystem
Acquire assets that give access to new customers, new geographies and increase technology footprint
Leverage VIN specific data assets to provide actionable insights to our global customers
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Chairman & CEO Report
The Next Gen EPC surpasses the functionality
of our competitors with innovation that
moves beyond a siloed, technical reference
tool to an integrated parts selling platform
SUCCESSFUL CAPITAL RAISE UNDERPINS
FUTURE GROWTH
Growth through acquisition is a key initiative in Infomedia’s
‘protect and attack’ strategy. In May 2020, Infomedia
completed an $83.9 million capital raise via an institutional
placement and share purchase plan (SPP).
We took proactive steps to ensure that both the
institutional placement and SPP were structured to
balance the best interests of Infomedia’s shareholders
and the long-term growth of the company.
Approximately 98% of Infomedia’s nearly five thousand
shareholders were eligible to take up at least their
pro rata entitlement at the same price as the institutional
placement.
The proceeds from the capital raise will expedite the
execution of Infomedia’s growth strategy, focussed
on enhancing core technology capabilities globally,
accessing new customers and increasing Infomedia’s
breadth and depth in key geographic markets. However,
COVID-19 related restrictions are slowing efforts to bring
international acquisitions to fruition.
GOVERNANCE
Infomedia’s Board is committed to achieving high
standards of professional conduct across all of Infomedia’s
operations. Our Corporate Code of Conduct is a guide for
our employees and sets expectations for performance and
managing responsibilities. Details of Infomedia’s corporate
governance framework and policies can be found on the
corporate governance section of Infomedia’s website:
https://www.infomedia.com.au/governance
ANNUAL REPORT 2020
OUTLOOK
The Board remains confident about Infomedia’s strategic
direction. Infomedia is well placed to emerge from the
challenges of FY20 in a much stronger position.
Customer engagement returned through June and July
and a backlog of dealer based and large manufacturer
contracted deals are expected to rollout and revenue late
in 2021. COVID-19 related restrictions are expected to delay
sales converting to revenue. Softer revenue growth than
experienced in recent periods is anticipated in the first
half of the 2021 financial year (1H21). Similarly, protracted
travel constraints are slowing efforts to bring international
acquisitions to fruition. Subject to restrictions easing,
growth in calendar 2021 should re-emerge at a faster pace.
As a result, Infomedia is not providing guidance but is
well positioned to sustain growth in the medium term.
The focus over the coming months will be pursuing
acquisitions, investment in core products, implementing
delayed rollouts, training and installations and continuing
contract negotiations delayed in the last quarter of the
2020 financial year.
ACKNOWLEDGEMENTS
The Board was delighted to welcome Kim Anderson as
a Non-Executive Director in June. Kim brings extensive
experience to the role and an excellent knowledge of both
the auto industry and technology. Kim will undoubtedly
make a positive and substantial contribution to Infomedia
into the future.
On behalf of the Board, we again say thank you to all
our stakeholders for your support, engagement, and
commitment during this extraordinary time. We are
committed to emerging from these changing events
in a stronger position together.
Bart Vogel
Chairman
Jonathan Rubinsztein
CEO & Managing Director
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Reimagining Aftersales with Next Gen
ANNUAL REPORT 2020
NEXT GEN
PARTS SELLING REIMAGINED
GLOBAL SEARCH
VEHICLE HISTORY
MOBILE FRIENDLY
INTUITIVE USER
INTERFACE
ACTIVE JOBS
In re-imagining the Next Gen EPC to help dealerships grow parts business,
we’ve delivered three new and exciting innovations:
1. Upgrade to core Microcat: improve the core EPC with very latest technology and features to simplify OEM parts
look up and parts ordering.
2. Solution Add-ons: to improve sales performance with Service data integration, EPC Analytics and purpose built EPC
Messaging App.
3. Microcat Platform: a platform approach that allows the OEM catalogue data to integrate with Collision and
Mechanical e-commerce solutions.
“
I would definitely recommend
the new Microcat EPC. I believe
it sets a new standard for Parts
Catalogues. It’s cutting-edge and
an essential tool for my team to
be more efficient and profitable.
It’s a real game changer.
“
Chris Earle
Parts Manager,
Patterson Cheney Group
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Customer Testimonial
ANNUAL REPORT 2020
“
Superservice provides a very
professional, consistent and
transparent customer
experience.
“
Braxton Johnson
General Manager,
Bell Lexus North Scottsdale
Bell Lexus North Scottsdale Improves Efficiency with Superservice
Bell Lexus North Scottsdale, a premier dealership in
Arizona and the #1 Lexus dealer in the USA for overall
service satisfaction, are reporting significant benefits
from implementing Superservice multipoint inspection
and quoting system in their Service Department.
Productivity and Accountability
Braxton Johnson, the General Manager, saw huge
improvements in productivity and performance. Before
Superservice, they were held back by the inefficiencies
of paper repair orders.
“There was no accountability, no tracking – the only
person with the info was the person holding the RO.
Superservice shattered all of the inefficiencies and
provides excellent accountability,” said Johnson.
Collaboration between Departments
His team uses Superservice primarily as a shop
management tool. “It gives us the ability to easily visualise
a vehicle throughout the entire service process using the
dashboard,” said Johnson. He believes this improves
productivity between the workshop and parts department,
by communicating and collaborating more efficiently.
Professional and Transparent
They also use Superservice as a customer-facing tool.
“It provides a very professional, consistent and
transparent customer experience. Customers really
appreciate when our staff add photos to support
additional repair quotes,” Mr Johnson said.
Outstanding Support from the Infomedia Team
One of the main reasons Johnson selected Superservice,
is the “ease of use” and the ability to customise and tailor
it to their specific needs. “Infomedia provides ease of
access to important people in the organisation that can
listen to their customers. The customisation of the system
to suit our process was really important, it made the
adoption of the system easy for our staff,” added Johnson.
“The onboarding experience was outstanding. The
Infomedia team supplied a sufficient number of trainers
for our large staff (12 advisors, 5 parts people and 30
technicians). They were very knowledgeable trainers and
stayed until we were ready to fly – which is very important,”
he concluded.
infomedia.com.au 9
Infomedia Ltd Board of Directors
Director’s Biographies
ANNUAL REPORT 2020
BART VOGEL BCom (Hons), FCA, FAICD
Independent Non-Executive Chairman
Mr Vogel was appointed to the
Infomedia Board of Directors on 31
August 2015 and was appointed as
Chairman on 1 October 2016. He serves
on the Remuneration, People & Culture
Committee and the Technology &
Innovation Committee.
Mr Vogel also serves as Chairman of
Invocare Limited (ASX:IVC) and is a
Non-Executive Director of Macquarie
Telecom Group Limited, (ASX:MAQ)
Communications Pty Ltd and the
Children’s Cancer Institute of Australia.
His executive career included CEO
roles with Asurion Australia, Lucent
Technologies (Australia and Asia
Pacific) and Computer Power Group.
Mr Vogel has more than 20 years’
experience 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
Mr Rubinsztein commenced as CEO
& Managing Director on the Board
of Infomedia in March 2016. He 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. Mr Rubinsztein is also on the
Advisory board of the Missionvale
charity based in Port Elizabeth, South
Africa, and a Director of Australian
based, not-for-profit ticketing
platform, Humanitix.
KIM ANDERSON BA, PGDip LISc., MAICD
Independent Non-Executive Director
Ms Anderson was appointed to
the Infomedia Board of Directors on
15 June 2020. She currently serves as
Chair of the Remuneration, People &
Culture Committee, with effect from
1 July 2020. She also serves as
a member of the Audit & Risk
Committee. Ms Anderson has more
than 30 years’ experience as a CEO
and senior executive in a range of
media companies including Southern
Star Entertainment, PBL and Ninemsn
and Reading Room Inc (bookstr.com)
of which she was CEO and founder.
Ms Anderson holds a Bachelor of
Arts from the University of Sydney
and a Graduate Diploma in Library
Information Science from UTS.
Ms Anderson is currently a
Non-Executive Director of Carsales
(ASX:CAR), WPP AUNZ (ASX:WPP),
Marley Spoon AG (ASX:MMM), and
the Sax Institute, a national leader
in promoting the use of research
evidence in health policy. She is a
former Fellow of the University of
Sydney Senate.
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Infomedia Ltd Board of Directors
Director’s Biographies
ANNUAL REPORT 2020
PAUL BRANDLING, BSc (Hons), MAICD
Independent Non-Executive Director
CLYDE McCONAGHY BBus, MBA, FAICD
Independent Non-Executive Director
Mr Brandling was appointed to the
Infomedia Board of Directors on
1 October 2016. He serves as Chair
of the Technology & Innovation
Committee and is a member of the
Audit & Risk Committee.
Mr Brandling has over 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 automotive manufacturers
in both Europe and Australia. Mr
Brandling currently serves as
Chairman of Integrated Research Ltd
(ASX:IRI).
Mr McConaghy was appointed to
the Infomedia Board of Directors on
1 November 2013. Mr McConaghy
currently serves as member of the
of the Remuneration & Nominations
Committee and as a member of
the Audit & Risk Committee.
Mr McConaghy has over 20 years’
experience in the automotive and
related industries, as an executive
and board director of private and
public listed companies encompassing
automotive, technology, publishing
and media companies.
Mr McConaghy was a Director of
The Economist Intelligence Unit and
LSX-listed World Markets Research
Centre’s Automotive Divisions. He also
held several senior positions in BMW
Australia, including Dealer Network
Marketing Manager and National
Advertising Manager. He was also
Account Director for Nissan and Mobil
at Mojo MDA/ InTouch Marketing.
He is currently a Director of Serko Ltd
(ASX:SKO) and MindGardens
Neuroscience Network.
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. She serves as Chair
of the Audit & Risk Committee and
is a member of the Remuneration &
Nominations Committee.
Ms O’Driscoll has over 35 years of
business experience, having qualified
as a chartered accountant in Ireland
in 1984. She was CFO of Genworth
Australia from 2009 to 2012 and spent
over 13 years with Insurance Australia
Group in a range of roles following her
chartered accounting experience at
PwC and Deloitte.
Ms O’Driscoll also serves as Chairman
of FINEOS Corporation Holdings plc
(ASX:FCL), and as a Non-Executive
Director of Steadfast Group Limited
(ASX:SDF), Commonwealth Insurance
Limited and MDA National Insurance
Pty Ltd.
infomedia.com.au 11
Directors’ Report
ANNUAL REPORT 2020
The Directors present their report, together with the consolidated financial report of Infomedia Ltd (the ‘Company’) and
its subsidiaries (together referred to as ‘Infomedia’ or the ‘Group’) for the financial year ended 30 June 2020, along with
the independent auditor report.
Operating and financial review
Other Statutory Matters
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Company overview
Principal activities
Financial and operating overview
Business objectives and strategies
Outlook
Risks
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Remuneration Report – Audited
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Directors
Directorships of other listed companies
Meetings of Directors
Company secretaries
Significant changes in the state of affairs
Dividends
Subsequent events
Indemnification of and insurance of officers
Environmental regulation
Corporate governance
Share options
Performance rights
Share appreciation rights
Auditor
Non-audit services
Auditors’ independence declaration
Rounding of amounts
Information is only being included in the 2020 Annual Report to the extent it has been considered material and relevant to the understanding of
the financial performance and financial position of the Group.
A disclosure is considered material and relevant if, for example:
•
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the dollar amount is significant in size (quantitative factor);
the dollar amount is significant by nature (qualitative factor);
the Group’s results cannot be understood without the specific disclosure (qualitative factor);
it is critical to allow a user to understand the impact of significant changes in the group’s business during the period such as business
acquisitions (qualitative factor);
•
it relates to an aspect of the Group’s operations that is important to its future performance.
12 infomedia.com.au
Directors’ Report
Operating and Financial Review
ANNUAL REPORT 2020
COMPANY OVERVIEW
Infomedia Ltd is a global technology solutions company incorporated in New South Wales, Australia. The Company is
headquartered in Sydney (NSW Australia) with regional offices in Melbourne (VIC Australia), Cambridge (ENG United
Kingdom) and Detroit (MI USA), serving the company’s global automotive manufacturing and dealership customers all
around the world.
PRINCIPAL ACTIVITIES
During the 2020 financial year, the principal activities of Infomedia Ltd consisted of:
•
•
the 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 and provision of data analytics to assist automakers and dealers optimise operations,
grow sales and improve customer retention.
FINANCIAL AND OPERATING OVERVIEW
Infomedia reported revenue growth of 12% to $94.618 million for the year ended 30 June 2020 (FY20), compared with
revenue of $84.598 million in the prior financial year. Cash EBITDA, a key internal measure for the business, increased
11% to $21.251 from $19.111 million in the prior year. Net profit after tax (NPAT) was $18.556 million, up 15% from
$16.122 million.
Business engagement slowed from February 2020 as COVID-19 related restrictions were implemented around the world.
Strong revenue growth was reported in APAC from contract wins in core parts and service products and the completion
of the global Nissan EPC rollout. The EMEA region started the year with several advanced contract negotiations. The
Americas had a strong start to the second half of the financial year benefitting from changes implemented under a
reinvigorated sales team. COVID-19 related restrictions across the Americas impacted training and installations and
delayed new revenue in the second half of the financial year.
Infomedia responded quickly to the pandemic by implementing a ‘protect and attack’ strategy in March 2020 to protect
the business and employees, and support customers. Payment concessions and extensions were granted to some
customers on a case by case basis in each region.
A rapid and effective shift to work from home arrangements meant that the build, pilot and launch of Infomedia’s
Next Gen products were not delayed.
infomedia.com.au 13
Directors’ Report
Operating and Financial Review (Continued)
Revenue (a)
EBITDA (b)
Development costs capitalised
AASB 16 rent adjustment
Unrealised foreign currency exchange (gains)/losses
Cash EBITDA
NPAT
Earnings per share (cents)
Final dividend (cents)
Total annual dividend per share (cents)
(a) Revenue details
By geographical location (local currency)
Worldwide revenue (AUD)
Asia Pacific (AUD)
EMEA (EUR)
Americas (USD)
(b) Reconciliation of EBITDA to NPAT
EBITDA
Add /(Less)
Changes in contingent consideration
Net finance costs
Depreciation, amortisation and impairment
Income tax expense
NPAT
BUSINESS OBJECTIVES AND STRATEGIES
ANNUAL REPORT 2020
2019
Movement
$’000
84,598
38,041
(18,969)
-
39
19,111
16,122
5.19
2.15
3.90
12%
21%
16%
11%
15%
10%
10%
2019 Movement
’000
84,598
22,797
21,650
20,003
12%
27%
2%
(2%)
2019 Movement
$’000
38,041
4,262
(1,098)
(20,148)
(4,935)
16,122
21%
4%
15%
2020
$’000
94,618
46,049
(21,910)
(2,069)
(819)
21,251
18,556
5.69
2.15
4.30
2020
’000
94,618
29,029
22,071
19,693
2020
$’000
46,049
521
(733)
(20,858)
(6,423)
18,556
Infomedia is an Australian-based, global technology solutions company that develops business critical, VIN-specific,
aftersales electronic parts catalogues, service software, data analytics and business insights for the global automotive
industry. Infomedia is one of very few global providers of integrated parts and service software (SaaS) products to
global automotive manufacturers and their dealers.
The Company’s core parts and service, data analytics and business insights products support both the manufacturer
and dealer meet their key objectives to sell more automaker branded parts and retain customers to their brands through
competitive pricing and service. As a result of declining new car sales in recent years, auto manufacturers and dealers
are increasingly focussed on the most profitable segments of the value chain; growing genuine parts and service
aftersales and retaining customers to their brands from one purchase to the next.
Infomedia’s software is developed to specific requirements with original manufacturer genuine parts and service data
that is accurately priced and specific to each vehicle identification number (VIN). Our products are available in
29 languages and 186 countries and licensed direct to the manufacturer, the national sales company and the dealer.
Infomedia is governed by a set of core values and will continue to pursue its financial and strategic objectives to deliver
sustainable, long-term performance for Infomedia’s shareholders by leveraging our key assets. The challenges of the
last year have firmed our conviction and commitment to the strategic objectives outlined below and discussed in detail
in the Chairman & CEO Report.
14 infomedia.com.au
Directors’ Report
Operating and Financial Review (Continued)
ANNUAL REPORT 2020
Infomedia aims to be the leading software provider to the automotive aftersales market
Infomedia’s Core Values
Together we create success by:
Accelerating Performance
Driving Innovation & Service
Action orientated
and accountable
Technology leadership to
empower customers
Navigating Global,
Steering Local
A global approach with
local execution
Having Fun in the Fast Lane
Balance hard work with
a positive attitude
Our purpose is create sustainable success and opportunity
for our customers, our shareholders and our employees
Customers
Shareholders
We drive to make our
customers successful and
meet their key objectives
We deliver superior and
sustainable market returns
IFM Team
We create an inspiring and
innovative culture to attract
the best people and deliver
products that add value
We will deliver on our purpose by executing a strategy focussed in these core areas
Strengthen the Core
Expand our Core
Acquire
Global sales focus &
sustained investment
in our core parts,
service and data
insights products
Scale core to build
Automaker VIN
specific market
leadership
Continue to leverage
geographic reach
and invest in data
insights assets
Build on global sales
and marketing
excellence to target
new customers in
the automotive
ecosystem
Scale new functionality,
customer relationship
or market depth to be
first to market with
compelling product
infomedia.com.au 15
Directors’ Report
Operating and Financial Review (Continued)
ANNUAL REPORT 2020
OUTLOOK
The Board remains confident about Infomedia’s strategic direction. Infomedia is well placed to emerge from the
challenges of FY20 in a much stronger position.
Customer engagement returned through June and July and a backlog of dealer based and large manufacturer contracted
deals are expected to rollout and revenue late in 2021. COVID-19 related restrictions are expected to delay sales
converting to revenue. Softer revenue growth than experienced in recent periods is anticipated in the first half of the
2021 financial year (1H21). Similarly, protracted travel constraints are slowing efforts to bring international acquisitions
to fruition. Subject to restrictions easing, growth in calendar 2021 should re-emerge at a faster pace.
As a result, Infomedia is not providing guidance but is well positioned to sustain growth in the medium term. The focus
over the coming months will be pursuing acquisitions, investment in core products, implementing delayed rollouts,
training and installations and continuing contract negotiations delayed in the last quarter of the 2020 financial year.
RISKS
Infomedia is subject to risks which may have a material adverse effect on operating and financial performance.
The Group adopts a risk management process which is an integral part of the Group’s corporate governance structure,
and applies risk mitigation strategies where feasible. Despite best efforts, some risks remain outside Infomedia’s
control. Some of the key risks (in no particular order and non-exhaustively) include:
Risk
COVID-19
Description
Risk management strategies
• The COVID-19 ‘Coronavirus’
• Infomedia has supported loyal customers with various initiatives
to foster deeper, long-term, relationships
• Continued focus on Infomedia’s core solutions aimed at the
aftersales parts and servicing space. The after sales space has
potential to become a key revenue driver for OEM’s as new car
sales remain volatile for the foreseeable future
pandemic has led governments,
authorities and communities to
take actions to suppress infection
and provide financial support that
are unprecedented in recent history
• COVID-19 has, and continues to
have, broad scale macro-economic
impacts. The scale and extent of
these impacts, and the knock-on
effects for Infomedia’s business
continue to emerge and remain
uncertain
• New car sales have remained
volatile since the global spread of
the virus which may lead to financial
distress and/or consolidation
within the automotive industry
• Lower mileage on vehicles when
economic activity is restricted may
cause a temporary lower demand
for vehicle servicing and repairs
• Credit risk in the form of delayed or
non-payment by customers
Loss of key
licence
agreements
• Continued access to Original
• Management of key account relationships
Equipment Manufacturer (‘OEM’)
parts information is integral to
several of the Group’s product
lines
• Continued investment to sustain market leading products
• Customer centric design to identify and adapt solutions to meet
evolving customer requirements
16 infomedia.com.au
Directors’ Report
Operating and Financial Review (Continued)
ANNUAL REPORT 2020
• The relatively concentrated
• Global account management strategy
Loss of key
customers
automotive industry leads to
a degree of revenue
concentration
Competitive risk
• Risk from existing and
new market entrants
Product
obsolescence
or substitution
• Products do not keep pace with
developments in market needs
or technological advancements
• Competitors or OEMs may
develop superior products
• Continuing focus on diversifying Infomedia’s customer base 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 and intrinsic value propositions
• Leveraging accrued experience and capability in the sector with a
global reputation as a leading solutions provider in the parts and
service space
• Regional leaders charged with maintaining key relationships with
OEM clientele and maintaining detailed account management plans
• Close monitoring of market developments and direction and OEM
strategies
• Continued investment in research and development to sustain
market leading position
• Continuous upgrading of product platforms to meet technological
advancements
Product outages
caused by
software or
hardware errors
• Customer dissatisfaction with the
Company’s software products
which fail to facilitate their critical
business operations
• Real time monitoring of the Company’s software products and
online hosting environments to identify and correct errors
quickly
• Robust product design and quality assurance testing
• Customers cancel subscriptions
or switch to competitive solutions
Intellectual
property risk
Cyber risk,
privacy & data
sovereignty
• Protecting integrity of Infomedia’s
• Network and product security measures
data assets
• Monitoring to identify and limit unauthorised access
• Legal restraints
• Risk of targeted cyber-attack
• Information security management system certification aligned to
against Company assets
ISO27001
• Unauthorised access to or loss
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)
• Dedicated internal resources to monitor and address cyber and
information risks as and when they arise
• Measures and tools to detect and prevent unauthorised access to
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
• Internal compliance program including training for all employees
on relevant data security and privacy laws
People risk
• Loss of key executives
• Multiple touch points with key customers as part of relationship
• Loss of key customer relationships
management
Disputes and
Litigation
• Litigation and disputes arising in
the ordinary course of business
resulting in economic and
internal resource allocation cost
and damage to key relationships
with customers, suppliers or
other stakeholders
• Appropriate incentives and career development opportunities for
key executives and senior management
• Identification and management of high potential employees
• Engagement of appropriately skilled executives to identify and
mitigate legal and commercial risk
• Maintenance of an appropriate insurance program
infomedia.com.au 17
Directors’ Report
Operating and Financial Review (Continued)
ANNUAL REPORT 2020
Foreign
exchange risk
• A significant proportion of
• Keeping minimal net holdings of, and exposure to, currencies
other than the main operating currency (the Australian dollar).
This involves monitoring both revenues and expenses being
transacted in each currency
• Use of instruments to hedge or limit extreme movement in
exchange rates
Infomedia’s revenue is derived in
foreign currencies (primarily Euros
and USD). Adverse exchange rates
movements may have an adverse
impact on Infomedia’s future
reported financial performance.
• Use of hedging instruments to limit
downside risk may also limit upside
risk where a favourable exchange
rate movement occurs. This may
dampen economic performance
which might otherwise be
anticipated
General
market risk
• Market conditions may affect
• Whilst no Company specific mitigations are available for a
the value of Infomedia’s quoted
securities, regardless of its
operating performance
general market downturn led by macro-economic circumstances,
the Company adheres to continuous disclosure obligations to
keep shareholders informed of business impacts and strategies
to limit impact
Adverse
changes to, or
interpretations
of taxation laws
• Future changes in taxation laws
• Utilising external advisory services to review tax risks and advise
on tax related issues
• Improvements in internal capacity and capability to assess and
respond to taxation matters
in jurisdictions in which Infomedia
operates, including changes in
interpretation or application of
the law by the courts or taxation
authorities, may impact the future
tax liabilities of Infomedia
• Interpretation and the application
of certain aspects of tax legislation
are judgmental and authorities
may disagree with Infomedia’s
self-assessment
18 infomedia.com.au
Directors’ Report
Remuneration Report
ANNUAL REPORT 2020
The Directors present Infomedia’s Remuneration Report for the financial year ended 30 June 2020 (‘FY20’).
The Remuneration Report (‘Report’) is structured as follows:
Table 1 – Structure of Remuneration Report
Section
Details
1
2
3
4
5
6
7
8
9
KEY MANAGEMENT PERSONNEL (KMP)
REMUNERATION GOVERNANCE
INFOMEDIA’S PURPOSE AND STRATEGIC PRIORITIES
EXECUTIVE KMP REMUNERATION STRUCTURE AND PHILOSOPHY
EXECUTIVE KMP REMUNERATION DETAILS
NON-EXECUTIVE DIRECTOR REMUNERATION
NON-EXECUTIVE DIRECTORS’ REMUNERATION DETAILS
ADDITIONAL INFORMATION
LOOKING FORWARD TO FY21
1. KEY MANAGEMENT PERSONNEL (KMP)
This Report outlines Infomedia’s remuneration philosophy, framework and FY20 outcomes for all key management
personnel (‘KMP’), including all Non-Executive Directors and the Executive KMP (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 Infomedia.
The following persons were KMP during FY20:
Table 2 – Independent Non-Executive Directors
Current Directors
Bart Vogel
Kim Anderson
Paul Brandling
Clyde McConaghy
Anne O’Driscoll
Table 3 – Executive KMP
Current Executives
Jonathan Rubinsztein
Richard Leon
Date of appointment
31 August 2015
15 June 2020
1 October 2016
1 November 2013
15 December 2014
Role
CEO & Managing Director
CFO
Date of appointment
14 March 2016
29 March 2016
infomedia.com.au 19
Directors’ Report
Remuneration Report (Continued)
2. REMUNERATION GOVERNANCE
ANNUAL REPORT 2020
The Report has been prepared in accordance with the requirements of the Corporations Act 2001 and Accounting
Standard AASB 124 Related Party Disclosures. The term ‘remuneration’ as used in this Report has the same meaning as
‘compensation’ as defined in AASB 124.
Remuneration is a technical subject in the current regulatory and reporting environment. In writing this Report, the aim
is to present information in a way that is easily understood and aligned to legal reporting obligations.
Who is responsible
for presenting this
Remuneration Report?
Who are the members
of the Committee?
The Remuneration, People & Culture Committee (the ‘RPC Committee’ or the ‘Committee’) of the
Board presents this Remuneration Report on behalf of Infomedia Ltd (the ‘Company’).
The RPC Committee consists of three independent Non-Executive Directors. During the period to
30 June 2020 the Committee membership was comprised of Clyde McConaghy (Committee
Chairman), Anne O’Driscoll and Bart Vogel.
Committee membership
in FY21
The RPC Committee has been restructured with effect from 1 July 2020, with Kim Anderson
assuming the role of Chair of the Remuneration People & Culture Committee. Mr McConaghy
remains a member of the Committee.
What role does the
Committee play?
The Committee is responsible for providing advice and making recommendations to the Board on
a range of matters, including:
• Remuneration:
o remuneration policy and practices relevant to employees, including Executive KMP and
the Non-Executive Directors;
o the composition and quantum of remuneration, bonuses, incentives and any remuneration
outcomes relating to Executive KMP and other senior management personnel; and
o the Remuneration Report and processes supporting its preparation.
• People:
o formulation and review of policies and practices referable to Company employees;
o succession planning for the Company’s future leaders, talent pipeline and people
development processes to ensure growth and sustainability;
o executive leadership team appointments and development; and
o the health and wellbeing of employees.
• Culture:
o expansion and assessment of a culture of inclusion and diversity;
o people programs to develop and support a high-performing culture aligned with the
Company’s purpose and core values; and
o corporate governance processes relating to people.
The Committee operates in accordance with its charter, a copy of which is available on the
Company’s website at:
https://www.infomedia.com.au/investors/corporate-governance/remuneration-committee-charter/
a. External remuneration advisory services
The RPC Committee, subject to Board approval, directly engages with and considers market remuneration data from
external remuneration consultants as required. During the period the Committee engaged with Guerdon Associates to
review the Company’s long-term incentive structure for Executive KMP and Infomedia senior management personnel.
Effective in FY20 the Company has implemented a series of refinements to the Executive KMP remuneration framework
based on the results of the Guerdon review.
No remuneration recommendations as defined by the Corporations Act 2001 were provided by Guerdon Associates.
b. Prior year Remuneration Report – AGM outcome
The Company’s FY19 Remuneration Report was approved at the 2019 Annual General Meeting (‘AGM’) with 98.77% of
votes cast in favour of the resolution. No comments were made on the Remuneration Report at the meeting.
3. INFOMEDIA’S PURPOSE AND STRATEGIC PRIORITIES
The Company’s core values, key strategies and purpose, articulated in the graph set out on page 15, are key
considerations when designing and implementing the executive remuneration framework.
20 infomedia.com.au
Directors’ Report
Remuneration Report (Continued)
ANNUAL REPORT 2020
4. EXECUTIVE KMP REMUNERATION STRUCTURE AND PHILOSOPHY
Infomedia’s remuneration framework aligns executive reward with the achievement of strategic objectives and
shareholder returns. The performance of the Company relies upon the quality of its Directors and executives to lead the
organisation. The Company must attract, motivate and retain skilled Directors and executives to deliver on key strategic
goals. Compensation must be competitive and appropriate for the results delivered. During the reporting period the
Company applied the following philosophy when setting its remuneration framework.
Table 4 – Executive KMP remuneration structure
Fixed remuneration
At risk remuneration
Total potential remuneration
Element
Fixed annual remuneration Short term incentive (‘STI’)
Long term incentive (‘LTI’)
Indicative total
potential Executive
KMP remuneration
mix(a)
40% of Total remuneration
package
30% of Total remuneration
package
30% of Total remuneration package
Performance
conditions
Base level of reward set
around the Australian
market median using
external benchmark data.
Set in the context of the
relative skills, experience
and responsibility assigned.
Link to strategy
Fixed remuneration is set at
market levels to attract and
retain individuals with the
necessary skills, experience
and talent to pursue
strategic goals.
At risk remuneration linked to a
combination of Infomedia’s overall
financial performance gateways and
individual performance goals.
Financial measures include Cash
EBITDA and Group Revenue growth.
Non-financial measures include
specific strategic objectives
relating to regional operations,
merger and acquisitions and
enhancing the depth, strength and
cohesion of the executive team.
Executive KMP rewarded subject
to delivery of Company financial
performance in the form of ‘STI
Gateways’ which in FY20 were linked
to Cash EBITDA performance and
Group Revenue growth.
Executive KMP are set appropriate
key performance indicators (‘KPI’)
and objectives which are both
financial and non-financial in nature,
including appropriate stretch goals.
KPIs are aligned to strategic goals
and creation of shareholder value.
STIs are useful to reward in year
performance and achievement
of goals linked to short and
medium-term strategic objectives.
Share Appreciation Rights
options (‘SARs’) and Performance
rights (‘Rights’): Vesting after
three years, subject to
achievement of performance
hurdles aligned to compound
annual growth rate (‘CAGR’) in
earnings per share (‘EPS’) targets
determined by the Board.
At the time each LTI offer is made,
executives can elect to accept
either SARs, Rights or a combina-
tion of both.
The LTI ensures alignment
between the long-term
performance of the Company and
creation of shareholder value.
LTI acts as a valuable part of the
remuneration mix to retain key
talent and to reward executives
for performance over an extended
period.
The SARs encourage delivery
of capital appreciation over the
period, whilst the Rights encourage
greater focus on total shareholder
returns.
The intrinsic value of the SARs
and the Rights granted to
Executive KMP increases or
decreases depending on the
Company’s trading share price.
More information See section 4.a below
See section 4.c below
See section 4.d below
Footnote to Table 4
(a) The remuneration mix applies in respect of maximum potential remuneration or the ‘total remuneration package’. The remuneration mix is
indicative of the overall philosophy and varies slightly between remuneration elements for the Executive KMP. Where this is so, it has been
noted in Table 5 and Table 6 below summarising the terms of engagement for each Executive KMP, including the monetary amounts attaching
to each element.
infomedia.com.au 21
Directors’ Report
Remuneration Report (Continued)
a. Employment terms
Table 5 – Employment terms of CEO & Managing Director
Term
Service
commence date
Conditions
14 March 2016
Contract duration
Ongoing with no specified end date
ANNUAL REPORT 2020
Remuneration
package
Jonathan Rubinsztein’s FY20 total potential remuneration package was $1,500,000 made up of the
following components:
Fixed remuneration
$535,000 per annum inclusive of superannuation, representing 36% of total potential remuneration.
STI
$0 to $395,000 based on performance and payable in cash, representing 26% of total potential
remuneration.
LTI
LTI opportunity of $570,000 per annum, representing 38% of total potential remuneration. The LTI
is conferred in the form of Share Appreciation Rights (‘SARs’) and/or Performance Rights (‘Rights’),
as elected by the Executive.
826,086 SARs were issued to Mr Rubinsztein in FY20, such grant being approved by shareholders
at the Company’s 2019 Annual General Meeting. The SARs vest following release of the Company’s
FY22 results, subject to attainment of performance hurdles linked to compound annual growth in
earnings per share over the performance period. Further details about the LTI, including LTI vesting
outcomes for FY20 are described below in section 4.d.ii and 4.d.iii.
Six months written notice; or
One month if the Company materially diminishes the executive’s duties without consent or directs
the executive not to perform work for a period greater than six months. In this circumstance the
executive is entitled to redundancy entitlements as outlined below.
The Company may immediately terminate the service agreement without notice, or any payment in
lieu of notice in certain circumstances including material breach, conduct having a material adverse
effect on the Company’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. Entitlements will be paid until the date of termination only.
Six months written notice or six months payment in lieu of notice (or a combination of notice and
payment in lieu of notice).
In addition to notice, the executive is entitled to 12 months fixed annual remuneration inclusive of
any statutory redundancy payments plus any accrued but unpaid STI and LTI or other incentive to
which the executive would have been entitled, had the executive remained employed to the end of
the relevant notice period.
12 months non-compete and non-solicitation.
Not permitted without written consent of the Board.
Termination by
executive
Termination by
Company for cause
Termination by
Company (other)
Redundancy
entitlements
Post-employment
restraints
External
directorships
22 infomedia.com.au
Directors’ Report
Remuneration Report (Continued)
Table 6 – Employment terms of CFO
Term
Service
commence date
Conditions
29 March 2016
ANNUAL REPORT 2020
Contract duration
Ongoing with no specified end date
Remuneration
package
Richard Leon’s FY20 total potential remuneration was $835,502 made up of the following components:
Fixed remuneration
$329,702 per annum inclusive of superannuation, representing 39% of total potential remuneration.
STI
$0 to $205,800 based on performance and payable in cash, representing 25% of total potential
remuneration.
LTI
LTI opportunity of $300,000 per annum, representing 36% of total potential remuneration. The LTI
is conferred in the form of Share Appreciation Rights (‘SARs’) and/or Performance Rights (‘Rights’),
as elected by the Executive.
434,782 Share Appreciation Rights were issued to Mr Leon in FY20, such grant being approved by
shareholders at the Company’s 2019 Annual General Meeting. The SARs vest following release of
the Company’s FY22 results, subject to attainment of performance hurdles linked to compound
annual growth in earnings per share over the performance period. Further details about the LTI,
including LTI vesting outcomes for the FY20 are described below in section 4.d.ii and 4.d.iii.
Three months written notice.
The Company may immediately terminate the service agreement without notice, or any payment in
lieu of notice in certain circumstances including material breach, conduct having a material
adverse effect on the Company’s reputation, or if the executive commits an act justifying termination
at common law, becomes bankrupt or is absent from work for more than three months in any
12-month period without approval. Entitlements will be paid until the date of termination only.
Three months written notice or three months payment in lieu of notice (or a combination of notice
and payment in lieu of notice).
In addition to notice, the executive is entitled to 12 months fixed annual remuneration inclusive of
any statutory redundancy payments.
12 months non-compete and non-solicitation.
Not permitted without written consent of the CEO.
Termination by
executive
Termination by
Company for cause
Termination by
Company (other)
Redundancy
entitlements
Post-employment
restraints
External
directorships
infomedia.com.au 23
Directors’ Report
Remuneration Report (Continued)
ANNUAL REPORT 2020
b. Company performance
Table 7 outlines Infomedia’s performance delivered over the past five years.
Table 7 – Key financial performance indicators
Revenue ($’000)
Net profit after tax ($’000)
EBITDA ($’000)
Cash EBITDA ($’000)
Earnings per share (‘EPS’) (cents)
Dividends per share, excluding
special dividend (cents)
Share price at 30 June ($)
2020
94,618
18,556
46,049
21,251
5.69
4.30
$1.72
2019
84,598
16,122
38,041
19,111
5.19
3.90
1.70
2018
72,935
12,897
29,050
10,477
4.16
3.10
0.96
2017
70,474
11,953
25,219
11,652
3.85
2.90
0.73
2016
68,087
10,323
20,897
n/a
3.33
2.65
0.69
Infomedia has adopted adjusted earnings before interest, tax, depreciation and amortisation (‘Cash EBITDA’) as a key
measure for the FY20 STI Gateway for Executive KMP and also as a core KPI for the Executive KMP.
Cash EBITDA acknowledges the cash impact of investing in development costs that are capitalised.
The Company believes Cash EBITDA offers a more transparent view of the underlying level of activity and investment in
products. By stripping out the financial impact of capitalised development costs, Cash EBITDA gives a clearer indication
of the actual cash operating costs incurred during the financial year. Accordingly, management are directly measured
and accountable for their management of costs which translates into improved bottom line results for shareholders in
current (improved EBITDA) or future periods (via reduced future amortisation expenses), depending on the actual timing
and accounting treatment of capitalised development costs actually incurred during the financial year.
The reconciliation of NPAT to Cash EBITDA is provided in Table 8 below. As Cash EBITDA was introduced as a new
financial measure from 2017 onwards, no comparatives are provided for FY16.
Table 8 – Reconciliation of NPAT to Cash EBITDA
NPAT(a)
Add/(less):
Changes in contingent
consideration(a)
Net finance costs/(income) (a)
Depreciation, amortisation
and impairment(a)
Income tax expense
EBITDA(a)
Development
expenses capitalised
AASB 16 rent adjustment
Unrealised foreign currency
translation gains/(losses)
Cash EBITDA(a)
Footnote to Table 8
2020
$’000
18,556
(521)
733
20,858
6,423
46,049
(21,910)
(2,069)
(819)
21,251
2019
$’000
16,122
(4,262)
1,098
20,148
4,935
38,041
2018
$’000
12,897
-
564
12,824
2,765
29,050
(18,969)
(18,463)
-
39
19,111
-
(110)
10,477
2017
$’000
11,953
-
(36)
9,717
3,585
(13,715)
-
148
11,652
(a) In accordance with remuneration governance principles, and where applicable, the Company applies underlying performance measures
which exclude non-trading income and expenses in determining the vesting outcomes for variable remuneration components. During the
period, the Company reassessed the contingent consideration referable to the Microcat CRM acquisition, resulting in a net change to NPAT
of $0.521 million via a reduction in contingent consideration previously provided for.
24 infomedia.com.au
Directors’ Report
Remuneration Report (Continued)
c. Short term incentive outcomes
Table 9 – KPIs and FY20 performance outcomes for the CEO & Managing Director and the CFO
ANNUAL REPORT 2020
Performance metrics
Weighting Payout ratios
CEO & Managing Director KPIs and FY20 performance outcome
Financial
Cash EBITDA targets
Group Revenue growth
Non-financial(c)
60%
Where targets are met or exceeded:
Sliding scale payment between 75%-125%(a)
Sliding scale payment between 80%-120%(a)
Where targets are not met: 0%
Strategic growth projects
40%
Regional development projects
Operational projects to strengthen
the management team
Total
100%
CFO KPIs and FY20 performance outcome
Where targets are met or exceeded:
Sliding scale payment between 60%-120%(a)
Where targets are not met: 0%
Financial
Cash EBITDA targets
Group Revenue growth
Non-financial(c)
Strategic growth projects
40%
Operational projects
Total
100%
Footnote to Table 9
60%
Where targets are met or exceeded:
Sliding scale payment between 75%-125%(a)
Sliding scale payment between 80%-120%(a)
Targets not met: 0%
Where targets are met or exceeded:
Sliding scale payment between 60%-120%(a)
Where targets are not met: 0%
FY20 performance
outcome/payout ratio(b)
Partially met
75%
100%
Partially met
81%
85%
Partially met
75%
100%
Partially met
68%
80%
(a) Stretch targets apply to financial objectives only. Despite the stretch targets, the total maximum potential STI achievement is capped at
100% of the CEO & Managing Director’s and the CFO’s STI opportunity of $395,000 and $205,800 per annum respectively.
(b) Group Revenue growth targets were achieved at 101% and Cash EBITDA targets were achieved at 90%, the latter falling below the gateway
qualification of 92% of targeted Cash EBITDA. After consideration of the relative performance of the Company during the period, the
Board elected to apply positive discretion in determining STI outcomes, lifting achievement of Group Revenue to 102% of target and Cash
EBITDA to 92% of target. However, noting the application of accelerator payments in respect of Group Revenue outcomes above 100%
achievement, the Board also exercised negative discretion to scale back accelerator payments to 0%.
More specifically, the adjustments applied in determining STI outcomes took the following matters into account:
(i)
inclusion of foregone revenue attributable to temporary COVID-19 related discount relief extended to some customers. This discretion
was applied on the basis that management have secured the relevant recurring revenue streams which will benefit shareholders in
future periods, and which would have otherwise been realised in FY20, but for the unforeseen impact of COVID-19. This adjustment
resulted in Group Revenue achievement of 102% which would ordinarily result in an STI payout of 110% of target, however as noted
above, the Board elected to wind the accelerator payment back to 0%; and
(ii) reversal of cost savings realised from implementation of the Company’s ‘80/20 flex schedule’, applicable to a limited cohort of
Infomedia employees during the relevant period of April, May and June 2020. The ‘80/20 flex schedule’ arrangements involved a
20% reduction in working hours for a portion of Infomedia staff in response to business disruption and uncertainty arising from the
COVID-19 pandemic.
(c) The scope of disclosure made regarding Executive KMP performance targets is limited as the Board has formed the view that disclosure of
further detail would result in unreasonable prejudice to the entity by signalling key strategies to competitors, suppliers and/or customers,
thereby strengthening those parties’ position relative to the Company.
infomedia.com.au 25
Directors’ Report
Remuneration Report (Continued)
Table 10 – Executive KMP FY20 STI outcome
ANNUAL REPORT 2020
Executive KMP
Jonathan Rubinsztein
Richard Leon
Maximum STI
potential
$
395,000
205,800
Actual STI Awarded
$
Actual STI awarded
as % of maximum
STI potential
%
STI forfeited as %
of maximum STI
potential
%
335,750
163,611
85%
80%
15%
20%
d. Long term incentive
i. Long term incentive framework FY20
Key purpose
Who participates?
How was the current
Executive KMP LTI
program devised?
How does the revised
LTI scheme differ from
the former scheme?
Why was EPS chosen
as the relevant
performance hurdle
for the LTI scheme?
What governance
mechanisms does the
Company have in place
regarding LTI and
trading in shares
generally?
Does the Company
impose a minimum
shareholding
requirement?
The purpose of the LTI program is to link Executive KMP performance with long term shareholder
wealth creation. The details of the FY20 Executive
Executive KMP participate in the scheme described in this Remuneration Report. Other senior
management in the Company are also eligible to participate in the scheme.
The Executive KMP LTI program was devised in consultation with external remuneration
consultants in 2019 to replace the Company’s former LTI framework which was implemented
in 2016.
The former LTI model utilised a combination of Performance Options and Performance Rights,
issued in advance for a three-year period. The revised program has reverted to a series of
rolling annual grants with a three-year performance period in line with broadly accepted market
practice. The revised program also has the added advantages of (i) providing greater optionality
to Executives by allowing them to elect the form in which their LTI Award Opportunity is
allocated; and (ii) replacing traditional Performance Options with Share Appreciation Rights
(‘SARs’). SARs provide similar leverage to a traditional Performance Option, however eliminating
the requirement for the Executive to pay a ‘strike’ price at exercise.
Earnings per share (‘EPS’) is directly linked to shareholder value creation. It encourages
management to grow top line revenue while maintaining adequate cost controls to deliver
strong net profit after tax results. The compounding nature of the metric year on year provides a
rigorous metric and a sound growth proposition for shareholders.
Share Trading Policy:
The Company maintains a formal Share Trading Policy. The policy prohibits trading based on insider
information and limits the ability of Restricted Persons to trade in Infomedia shares to several
short trading windows following the release of half year and full year financial results and following
the Annual General Meeting. The policy also prohibits short term or speculative trading.
Prohibition against hedging:
Additionally, the Company’s Equity Plan Rules prohibit Plan participants from entering into
hedging arrangements to limit the risk of their unvested LTI component.
The Company encourages its senior management to hold shares in the Company, however it
does not impose any requirement on Executive KMP to hold a minimum quantity of Infomedia
shares at any time. Refer Table 18 showing the shareholdings of Executive KMP during FY20.
26 infomedia.com.au
Directors’ Report
Remuneration Report (Continued)
ANNUAL REPORT 2020
Key term summary of the FY20 LTI scheme
Performance rights (‘Rights’)
Share appreciation rights (‘SARs’)
Election of LTI vehicle
Executives were provided an opportunity to select the apportionment of their ‘LTI Award Opportunity’
between Rights and SARs by taking 100% Rights, 50% in Rights and 50% in SARs, or 100% in SARs
Terms of issue
Rights are granted to the Executive KMP for
nil consideration.
SARs are granted to the Executive KMP for nil
consideration.
The number of Rights to be granted in FY20
was determined using a ten-day Volume
Weighted Average Price (VWAP) calculation
on the Company’s share price following
release of the FY19 results to determine a
‘Reference Price’. The ‘LTI Award Opportunity’
referable to the Rights is divided by the
Reference Price to determine the number of
Rights to be granted to the Executive KMP.
The Rights are granted pursuant to the terms
of the Company’s ongoing Equity Plan Rules
(as amended from time to time).
Vesting of the Rights is subject to the perfor-
mance measures as described below.
The Board retains a discretion to cash settle
any vested LTI instead of using shares.
The Executive KMP did not elect to receive
any of their LTI Award Opportunity in the form
of Rights in FY20.
The number of SARs to be allocated was
determined using a Cox-Ross Rubinstein lattice
valuation model, applying the estimated value
of the SARs, as determined by an independent
qualified valuer. The number of SARs allocated
was calculated by dividing the ‘LTI Award
Opportunity’ referable to the SARs by their
estimated fair value.
The SARs are issued pursuant to the terms of the
Company’s ongoing Equity Plan Rules
(as amended from time to time).
Vesting of the SARs is subject to the performance
measures as described below.
The Board retains a discretion to cash settle any
vested LTI instead of using shares.
Both the Executive KMP elected to receive 100%
of their LTI Award Opportunity in the form of
SARs in FY20.
The Rights and SARs granted for FY20 will be tested over a performance period spanning 1 July
2019 to 30 June 2022. Vesting is subject to the attainment of the performance measures and the
continued employment of the Executive KMP until the vesting date. The Rights and SARs will be
tested for vesting following release of the Company’s audited accounts for the year ending 30
June 2022 (‘FY22’). Unvested Rights and SARs will lapse and be forfeited if the performance
measures are not met. Executive KMP may exercise vested Rights and SARs up to 6 years after
the date of grant. After that time, unexercised Rights and SARs will lapse and be forfeited.
Rights and SARs will vest subject to the performance measure: compound annual growth (‘CAGR’)
on earnings per share (‘EPS’) based on FY19 EPS of 5.14 cents, representing statutory EPS adjusted
for the purposes of determining LTI outcomes in 2019 to exclude various non-trading items.
The plan provides for Board discretion to adjust statutory results for non-trading items.
CAGR above FY19
Adjusted EPS of 5.14 cents
Below 10% CAGR
At 10% CAGR
Between 10% and 15% CAGR
% of Rights or SARs that vest
0%
25%
Straight line pro-rata vesting
between 25% and 100%
At or above 15% CAGR
100%
Performance period,
vesting and expiry dates
Performance measures
infomedia.com.au 27
Directors’ Report
Remuneration Report (Continued)
Rights on vesting and
exercise
Each vested Right entitles the Executive KMP
upon exercise to receive the following:
• One Infomedia fully paid ordinary share
(‘Share’); and
• Additional Shares equal in value to dividends
received on Shares between the date of
grant and exercise. The additional Shares
are calculated as the number of Shares
that would have been acquired if dividends
as announced to the ASX between the date
of grant and exercise had been paid and
reinvested in Shares, based on the closing
price of the Share at the ex-div date during
the period from grant to exercise. Fractions
of Shares will be rounded down to the
nearest whole number and no residual
positive balance carried forward.
Price payable
by upon grant
Exercise price
ANNUAL REPORT 2020
Each vested SAR entitles the Executive KMP to
receive the benefit of share price growth over
the period between grant and exercise. Upon
exercise Executive KMP receive such number of
Shares as determined by the following calculation:
((SAR End Price-Reference Price)
× Number of SARs)
(SAR End Price)
= Number of Shares vested
Where:
• SAR End Price means the 5-day Volume
Weighted Average Price (VWAP) of the Company’s
shares up to the day of exercise; and
• Reference Price means the 10-day VWAP
calculation on the Company’s share price
following release of the FY19 results.
The Reference Price in relation to SARs
issued in 2019 was $2.1415.
Nil
Nil
Post vesting disposal
restrictions
Shares received by KMP under the LTI scheme are not subject to specific post vesting disposal
restrictions other than those set out in the Company’s Securities Trading Policy.
Malus & Clawback
Dividend and
voting rights
The LTI scheme is subject to malus provisions entitling the Board, at its discretion, to pursue
remedies where the participant has engaged in (among other things) fraud, dishonesty or gross
misconduct. Remedies include the ability to suspend, reduce or extinguish outstanding
entitlements in appropriate circumstances.
No dividend or voting entitlements are attached to the Rights. Upon vesting the recipient
becomes entitled to receive accrued dividends between the time of grant and the time of vesting
as additional Shares, as described above in this table. Following vesting and exercise,
the recipient receives Shares with ordinary voting right and
dividend entitlements.
ii. Summary of outstanding KMP LTI
The following KMP LTI are outstanding at the end of the period. They key terms of the LTI are summarised at 4.d.i above.
Performance
period & LTI
Vehicle
2019 SARs
2019-2022
Testing events Financial Performance hurdle
Strike price
Performance
outcome
Vesting
%
Holding
Lock
After release
of FY22
accounts
25% vesting at 10% CAGR above FY19
EPS with straight line pro rata
vesting up to 100% vesting at
15% CAGR above FY19 EPS
0% vesting if less than 10%
CAGR achieved
n/a
n/a
n/a
n/a
28 infomedia.com.au
Directors’ Report
Remuneration Report (Continued)
iii. LTI outcomes by Executive KMP
Table 11 – Movement in Rights and Options
ANNUAL REPORT 2020
Executive KMP
2016 Rights
Jonathan Rubinsztein
Richard Leon
2016 Options
Jonathan Rubinsztein
Richard Leon
2019 Share
Appreciation Rights
Jonathan Rubinsztein
Richard Leon
Number held at
1 July 2019
Number granted
during FY20
Number vested
and exercised
during FY20(b)(r)
Number lapsed
during FY20
Number held at
30 June 2020
706,671
376,891
1,083,562
3,750,000
2,000,000
5,750,000
-
-
-
-
-
-
-
-
826,086
434,782
1,260,868
(706,671)
(376,891)
(1,083,562)
(3,750,000)
(2,000,000)
(5,750,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
826,086
434,782
1,260,868
iv. LTI outcomes – fair value and maximum value to be recognised from grant date
Fair value
per Rights/
Options
($)
Number of
Rights/Options
granted
Performance
Period
Maximum value
to be recognised
from grant date
($)
Grant date
Executive KMP
2016 Rights
Jonathan Rubinsztein
29 January 2016
0.53-0.57
1,418,067
Richard Leon
17 February 2016
0.53-0.57
756,302
30 June 2017 to 30
June 2019
30 June 2017 to 30
June 2019
2016 Options
Jonathan Rubinsztein
Richard Leon
2019 Share
Appreciation Rights
29 January 2016
17 February 2016
Jonathan Rubinsztein
15 November 2019
Richard Leon
15 November 2019
i. Footnote to Table 11
0.07
0.07
0.65(b)
0.65(b)
3,750,000
2,000,000
30 June 2019
30 June 2019
826,086
434,782
1 July 2019 to 30
June 2022
1 July 2019 to 30
June 2022
774,600
413,600
279,000
149,000
570,000
300,000
(a) Long Term Incentives in the form of Performance Rights and Performance Options, granted to the Executive KMP in 2016, were tested for
vesting following release of the Company’s FY19 results. The applicable performance hurdles required attainment of 15% compound annual
growth rate in earnings per share (EPS) when comparing FY16 EPS (3.33 cents) to FY19 EPS.
(b) During FY19, the Company reassessed the Microcat CRM acquisition which resulted in a net increase in NPAT of $0.165 million, represented
by a $4.262 million reduction in the quantum of future contingent acquisition consideration previously provided for; offset by a $3.367
million impairment against the Microcat CRM goodwill and a $0.730 million adjustment to finance costs on the contingent consideration.
In line with remuneration governance principles, and as noted on page 22 of the 2019 Annual Report, the Company adjusted the final
FY19 EPS outcome to exclude the non-trading items associated with the reassessment of the Microcat CRM acquisition in determining
LTI vesting outcomes. This resulted in an adjusted EPS of 5.14 cents per share compared to a reported 5.19 cents per share. Despite the
adjustment, the vesting hurdles were met in full.
(c) 50% of shares realised from the vested Performance Options, and 100% of shares realised from vested Performance Rights, remain subject
to holding locks as described in section 8.a below.
(d) The Fair Value of the Share Appreciation Rights granted during the period is determined as at the grant date in accordance with the
applicable accounting standard (AASB 2 Share-Based Payments). The Fair Value noted in this table differs to the ‘Estimated Fair Value’ of
69 cents which was used to determine the award allocation numbers prior to the grant date. The discrepancy is attributable to the timing
difference between the award calculation and the date of actual grant of the awards to the recipients.
infomedia.com.au 29
Directors’ Report
Remuneration Report (Continued)
5. EXECUTIVE KMP REMUNERATION DETAILS
ANNUAL REPORT 2020
This section presents Executive KMP remuneration from two different perspectives. The first is the statutory disclosure
basis, calculated and presented in accordance with statutory and Accounting Standard requirements. The second basis
replaces the movement in the estimated value of share-based payments to which the Executive KMP became entitled
during the year. It also removes movement in leave accruals. Whilst this is referred to as actual received, it should be
noted that a portion of the relevant share-based payments are subject to holding locks (see section 8.a below) and all
payments are stated before applicable income tax.
a. Executive KMP remuneration outcomes in FY20 – Statutory basis
Table 12 below discloses the remuneration for Executive KMP calculated in accordance with statutory requirements and
Accounting Standards. Refer to table note underneath Table 12 for the relevant statutory and accounting requirements.
Table 12 – Total Executive KMP remuneration - Statutory basis
Short term employment benefits
Post-employment
benefits
Long term
benefits
Sharebased
payments
Total
Table note
(1)
Cash salary and
leave accruals
(2)
Short
term
incentive
Non-
monetary
benefits
(3)
Super-
annuation
Termination
payments
$
$
Jonathan Rubinsztein
2020
507,419(b)
2019
531,469
Richard Leon
2020
2019
287,836(b)
328,640
i. Footnote to Table 12
335,750
395,000
163,611
205,800
$
-
-
-
-
$
25,000
25,000
21,002
20,531
$
-
-
-
-
(4)
Long
service
leave
accruals
(5)
Rights,
Options &
SARs (refer
to Table 13)
$
$
$
7,506
2,070
4,505
1,229
231,617
1,107,292
340,279
1,293,818
119,695
182,794
596,649
738,994
(a) The remuneration mix for the Executive KMP based on the remuneration details in Table 12 above are:
(i) Mr Rubinsztein: 49% fixed and 51% at-risk (2019: 43% fixed and 57% at-risk); and
(ii) Mr Leon: 53% fixed and 47% at-risk (2019: 47% fixed and 53% at-risk).
(b) Cash salary and leave accruals shows a reduction compared to the prior corresponding period owing to the application of the Company’s
80/20 flex scheduling in response to the COVID-19 pandemic. The Executive KMP utilised accrued annual leave balances at a rate of four
days per calendar month in April, May and June 2020.
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 FY20 short term incentive has been approved by the Board and will be paid in cash in September 2020.
(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 12 above represents the value of LTI in accordance with Accounting Standard, AASB 2 Share-
based Payments. The values relate to Performance Options and Performance Rights granted to the executive KMP in 2016, together with
Share Appreciation Rights granted to Executive KMP in November 2019. A breakdown of the relative values is set out in Table 13 below.
Table 13 – Breakdown of share-based payments
Performance rights
$
Share options
$
Share appreciation
rights
$
Total share based
payments
$
12,319
270,529
5,093
144,589
40,313
69,750
20,399
38,205
178,985
-
94,203
-
231,617
340,279
119,695
182,794
Jonathan Rubinsztein
2020
2019
Richard Leon
2020
2019
30 infomedia.com.au
Directors’ Report
Remuneration Report (Continued)
ANNUAL REPORT 2020
b. Executive KMP remuneration outcomes in FY20 – Actual received
Table 14 discloses the cash and other benefits, being amounts actually received by the Executive KMP as distinct from
the technical accounting expense. Accordingly, this table does not align with the statutory remuneration outcomes
calculated in accordance with Accounting Standards in Table 12 above.
The actual remuneration received by the Executive KMP in Table 14 below represents:
• cash received/receivable amount for FY20 – cash salary, short term incentive – cash bonus and superannuation; and
• the market value of Performance Options and Performance Rights that vested and which were converted to shares
during FY20. The market value represents the variable weighted average price of Infomedia shares in the four weeks
following release of the Company’s FY19 annual results on 19 August 2019 (FY18 annual results: 15 August 2018). This
period has been selected as it gives a fair indication of the value attributed by the market assessing the performance
of the Company, and by implication the Executive KMP, based on the corresponding financial year’s annual results. The
VWAP over the period was $2.16 (2019: $1.26). Whilst this is referred to as actual received, it should be noted that:
o the Performance Options and Performance Rights which vested in August 2019 were granted to the recipients in
2016 and represented LTI awards referable to the years 2016-2019 inclusive. No new additional LTI were granted to
the Executive KMP between 1 July 2016 and 30 June 2019;
o a portion of the relevant share-based payments are subject to holding locks (refer section 8.a below).
o the value of shares realised from the exercise of Performance Options have been adjusted to recognise the value
received by the KMP after the payment of a 92.2 cent exercise price per Option by the Executive KMP to the Company.
o all payments are stated before applicable income tax.
Table 14 – Total Executive KMP remuneration - Actual pre-tax remuneration received
Short term employment benefits
Post-employment
benefits
Long term
benefits
Share-based
payments(c)
Total
Cash salary(a)
Short term
incentive
Non-
monetary
benefits
Super
-annuation
Termination
payments
Long service
leave
accruals
Performance
rights
vested and
exercised
Performance
Options
vested and
exercised
$
$
$
$
Jonathan Rubinsztein
2020
2019
510,000
395,000
510,000
329,325
Richard Leon
2020
2019
308,700
205,800
308,700
159,640
Footnote to Table 14
-
-
-
-
25,000
25,000
21,002
20,531
$
-
-
-
-
$
-
-
-
-
$
$
1,526,409 4,642,500(b) 7,098,909(b)
301,917
-
1,166,242
814,085 2,476,000(b)
3,825,587(b)
161,023
-
649,894
(a) The remuneration mix for the Executive KMP based on the actual remuneration received details in Table 14 above are:
(i) Jonathan Rubinsztein: 8% fixed and 92% at-risk (2019: 46% fixed and 54% at-risk); and
(ii) Richard Leon: 9% fixed and 91% at-risk (2019: 51% fixed and 49% at-risk).
(b) Calculation of share-based payments is based on a point in time average of the Company share price as described in the commentary
above Table 14. The Performance Options and Performance Rights which vested in August 2019 were granted to the recipients in 2016 and
represented LTI awards referable to the years 2016-2019 inclusive. The grant to the Managing Director and CEO was retrospectively approved
by shareholders at the Company’s 2018 Annual General Meeting. The value of shares realised from the exercise of Performance Options has
been adjusted to offset the payment of a 92.2 cent exercise price per Option by the Executive, to the Company, representing payments of
$3.46m and $1.84m by Mr Rubinsztein and Mr Leon, respectively.
(c) No additional LTI were granted to the Executive KMP between 1 July 2016 and 30 June 2019. A portion of the relevant share-based payments
are subject to holding locks (refer section 8.a below for details).
(d) This table reflects the actual cash remuneration received during the financial year. Comparatives have been adjusted accordingly.
infomedia.com.au 31
Directors’ Report
Remuneration Report (Continued)
6. NON-EXECUTIVE DIRECTOR REMUNERATION
a. Board and committee structure
ANNUAL REPORT 2020
As at the date of this Report, Infomedia’s Board and Committees are structured as follows:
Table 15 – Board and committee composition
Board
Audit and Risk
Committee
Independent
& Non–
Executive
Bart Vogel
Kim Anderson
Paul Brandling
Clyde McConaghy
Anne O’Driscoll
Executive
Jonathan
Rubinsztein
Chairman
3
3
3
3
3
3
3
3
Chair
-
b. Remuneration structure and governance principles
Remuneration,
People and
Culture Committee
3
Technology and
Innovation
Committee
3
Chair
-
3
3
-
-
Chair
-
-
3
Nominations
Committee
Chair
3
3
3
3
-
Remuneration
structure
Non-Executive Directors are remunerated in the form of Board fees, Committee chair fees and
superannuation paid in line with legislative requirements. See Table 16 below for further details.
Fees payable are fixed in accordance with formal agreements held between the Non-Executive
Directors and the Company (subject to periodic increases) and are paid from an aggregate fee pool
limit of $850,000, as approved by shareholders in 2019.
Directors may also be reimbursed for travel and other expenses incurred in attending to the affairs
of the Company.
The Company does not impose any requirement on Non-Executive Directors to hold a minimum
quantity of Infomedia shares at any time. Refer Table 18 showing the shareholdings of the
Non-Executive Directors during FY20.
Does the Company
impose a minimum
shareholding
requirement?
The following table outlines annualised Non-Executive Director fee structure for the Board and its sub-committees as at
30 June 2020. The quoted fees are inclusive statutory superannuation contributions.
Table 16 – Non-Executive Director Fees (inclusive of superannuation)
Board/Committee
Board
Role
Chairman
Non-Executive Director
Audit & Risk Committee
Remuneration & Nominations Committee
Technology & Innovation Committee
Chair fee
Chair fee
Chair fee
Per role
$
196,000
88,500
15,000
15,000
15,000
Total
Total
$
196,000
354,000
15,000
15,000
15,000
595,000
32 infomedia.com.au
Directors’ Report
Remuneration Report (Continued)
ANNUAL REPORT 2020
7. NON-EXECUTIVE DIRECTORS’ REMUNERATION DETAILS
Table 17 below provides remuneration details for the Non-Executive Directors on the Company’s Board:
Table 17 – Total Non-Executive Director remuneration
Short term
employment
benefits
Board and
committee fees
Post-
employment
benefits
Superannuation
Total(a)
$
$
$
170,045
178,995
3,730
-
89,795
96,017
89,795
94,521
89,795
94,521
16,155
17,005
354
-
8,530
7,483
8,530
8,979
8,530
8,979
186,200
196,000
4,084
-
98,325
103,500
98,325
103,500
98,325
103,500
Bart Vogel
2020
2019
Kim Anderson(b)
2020
2019
Paul Brandling
2020
2019
Clyde McConaghy
2020
2019
Anne O’Driscoll
2020
2019
Footnote to Table 17
(a) Total remuneration actually earned in the period is reduced on account of the non-executive directors participating in a voluntary 20%
reduction in their directors’ fees for the months of April, May and June 2020 in response to the COVID-19 pandemic and its potential impact
on the Company. Director fees reverted to 100% from 1 July 2020.
(b) Ms Anderson commenced as a Non-Executive Director on 15 June 2020.
8. ADDITIONAL INFORMATION
a. Key terms of Rights and Options vested and exercised during FY20
The key terms described below relate to all Performance Rights and Performance Options granted to the Executive KMP
in prior years which vested and were exercised during the period. These terms do not relate to the outstanding SARs and
Rights described in section 4.d.i and 4.d.ii above.
•
•
•
the Rights and Options granted to the Executive KMP are deemed, for accounting purposes, to have been granted on
the date when their service agreements were signed;
the Rights and Options were granted for nil consideration;
the vesting conditions of the Rights and Options are conditional on continuous employment and meeting performance
hurdles based on Compound Annual Growth Rate in the Company’s earnings per share;
• 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
per option;
infomedia.com.au 33
Directors’ Report
Remuneration Report (Continued)
• holding lock for vested Rights and Options:
ANNUAL REPORT 2020
o Rights – subject to a holding lock until release of audited accounts for the year ending 30 June 2021;
o Options – 50% of exercised Options subject to a holding lock until release of audited accounts for the year ending
30 June 2020.
Additional information relating to these long term incentives is set out in Note 17 to the financial statements.
b. Loans to KMP
There were no loans at the beginning or at the end of the financial year ended 30 June 2020 to the KMP. No loans were
made available to KMP during FY20.
c. Shareholdings of Non-Executive Directors and the Executive KMP
Table 18 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 the KMP.
Table 18 – Movement of shareholding interests of KMP in accordance with section 205G of the Corporations Act 2001
Balance at
30 June 2019
Grant as
compen-
sation
Exercise
of share
options
Exercise of
performance
rights
Net other
changes
Total shares
held directly
and indirectly at
30 June 2020(a)
450,000
209,809
80,000
100,000
1,266,172
498,411
-
-
-
-
-
-
-
-
-
-
-
-
-
-
70,000
13,333
666
20,000
520,000
223,142
80,666
120,000
3,750,000
2,000,000
706,671
(2,409,776)
376,891
20,000
3,313,067
2,895,302
Name
Non-Executive Directors
Bart Vogel
Paul Brandling
Clyde McConaghy
Anne O’Driscoll
Executive KMP
Jonathan Rubinsztein
Richard Leon
Footnote to Table 16
(a) Shares held indirectly are included in the column headed Total shares held at 30 June 2020. Total shares are held directly by the KMP
and/or indirectly by the KMP’s related parties, inclusive of domestic partner, dependents and entities controlled, jointly controlled or
significantly influenced by the KMP.
9. LOOKING FORWARD TO FY21
The Company has deferred its annual salary review for all KMP due to the uncertain impacts of COVID-19. The Board
will continue to monitor and, if appropriate, review performance hurdles relevant to existing ‘at risk’ remuneration
components, taking into account market and sector wide impacts of COVID-19.
This concludes the Remuneration Report, which has been audited.
34 infomedia.com.au
Directors’ Report
Other Statutory Matters
DIRECTORS
ANNUAL REPORT 2020
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:
Name
Bart Vogel
Role
Chairman & Independent Non-Executive Director
Jonathan Rubinsztein
Chief Executive Officer & Managing Director
Kim Anderson
Paul Brandling
Independent Non-Executive Director (appointed 15 June 2020)
Independent Non-Executive Director
Clyde McConaghy
Independent Non-Executive Director
Anne O’Driscoll
Independent Non-Executive Director
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
Company
Period of directorship
InvoCare Ltd (ASX:IVC)
Since 2017
Macquarie Telecom Ltd (ASX:MAQ)
Since 2014
Salmat Limited (ASX:SLM)
From 2017 to 2019
Jonathan Rubinsztein
None
Kim Anderson
Carsales.com Ltd (ASX:CAR)
Marley Spoon AG (ASX:MMM)
WPP AUNZ Limited (ASX:WPP)
Since 2010
Since 2018
Since 2010
Paul Brandling
Integrated Research Limited (ASX:IRI)
Since 2015
Tesserent Limited (ASX:TNT)
From 2015 to 2017
Clyde McConaghy
Serko Limited (ASX:SKO)
Since 2014
Anne O’Driscoll
FINEOS Corporation plc (ASX:FCL)
Since 2019
Steadfast Group Limited (ASX:SDF)
Since 2013
Particulars of the Directors’ qualifications and experience are set out on pages 10 and 11.
infomedia.com.au 35
Directors’ Report
Other Statutory Matters (Continued)
MEETINGS OF DIRECTORS
ANNUAL REPORT 2020
The table below sets out the number of meetings of the Company’s Board of Directors (the ‘Board’) and each Board
committee held during the year ended 30 June 2020, and the number of meetings attended by each director
as a member:
Board
Audit & Risk
Committee
Remuneration,
People & Culture
Committee
Technology
& Innovation
Committee1
Nominations
Committee
Capital Raising
Sub-
Committee2
H3
14
14
1
14
14
14
A4
14
14
1
14
14
14
H
-
-
-
4
4
4
A
-
-
-
4
4
4
H
4
-
-
-
4
4
A
4
-
-
-
4
4
H
2
2
-
2
-
-
A
2
2
-
2
-
-
H
1
-
-
1
1
1
A
1
-
-
1
1
1
H
2
2
-
-
-
2
A
2
2
-
-
-
2
Bart Vogel
Jonathan
Rubinsztein
Kim
Anderson
Paul
Brandling
Clyde
McConaghy
Anne
O’Driscoll
Table Notes:
1. The Technology & Innovations Committee met twice during the period which stands outside the express terms of its charter. During the
period the Company has been engaged in critical product upgrades to bring forward the next generation of its product suite to meet looming
retirement of Adobe Flash™ technology (‘NextGen’ project). Given the criticality of the project to the business, the Board has temporarily
re-assumed responsibility and oversight for matters otherwise delegated to the Technology & Innovation Committee (TIC). The TIC will
resume its ordinary meeting cadence following completion of the NextGen project.
2. The Capital Raising Sub-Committee was established during the Company’s capital raising project to provide rapid response and to exercise
oversight of the capital raising project on behalf of the Board. In addition to the two formal meetings noted, the Committee provided
additional ad-hoc support and exercised governance oversight at critical points in the capital raising process.
3. ‘H’: represents the number of meetings held during the time the relevant Director held office or was a member of the relevant committee.
4. ‘A’: represents the number of meetings attended by the Director as a member.
COMPANY SECRETARIES
Daniel Wall BBA, LLB
Mr Wall is a lawyer admitted to practice in the Supreme Court of New South Wales and the High Court of Australia. Prior
to joining Infomedia he gained experience across a range of areas including commercial litigation, finance and corporate
insolvency and restructuring. He also holds a certificate in Governance Practice from the Governance Institute of Australia.
Mark Grodzicky BSc, LLB
Mr Grodzicky is General Counsel and joint Company Secretary. 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.
SIGNIFICANT CHANGES IN THE AFFAIRS
During the period the company conducted a capital raising via an institutional placement followed by a share purchase
plan for retail shareholders. A total of $83.9 million was raised with the proceeds of the capital raising to be directed
toward the execution of the Company’s growth strategy.
36 infomedia.com.au
Directors’ Report
Other Statutory Matters (Continued)
DIVIDENDS
ANNUAL REPORT 2020
Details of dividends paid or declared by the Company during the financial year ended 30 June 2020 are set out in note 3
to the financial statements.
MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR
On 24 August 2020, the Board declared a final 70% franked dividend of 2.15 cents per share.
The impact of COVID-19 is ongoing and while it has not had a significant detrimental effect on the Group up to 30 June 2020, it is
not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly changing
and is dependent on measures imposed by the Australian Government and other countries, such as maintaining social
distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 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.
INDEMNITY AND INSURANCE OF OFFICERS
To the extent permitted by law, the Company has indemnified the Directors and executives of the Company for liability,
damages and expenses incurred, in their capacity as a Director or an executive, for which they may be held personally liable,
except where there is a lack of good faith.
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.
ENVIRONMENTAL REGULATION
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
CORPORATE GOVERNANCE
Infomedia strives to achieve compliance with the governance recommendations set out in the Fourth Edition of the Corporate
Governance Principles and Recommendations, 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 at: http://www.infomedia.com.au/governance
SHARES ISSUED ON THE EXERCISE OF PERFORMANCE OPTIONS
During the period, 5,546,280 new fully paid ordinary shares were issued upon exercise of performance options with a strike
price of 92.2 cents per option. No other options have been exercised between 30 June 2020 and the date of this report.
SHARES ISSUED ON THE EXERCISE OF PERFORMANCE RIGHTS
During the period, 372,466 new fully paid ordinary shares were issued upon exercise of performance rights. No strike price was
payable in respect of the performance rights. No other performance rights have been exercised between 30 June 2020 and the
date of this report.
PERFORMANCE OPTIONS
There are no outstanding share options issued in respect of ordinary shares of Infomedia Ltd.
PERFORMANCE RIGHTS
As at the date of this report, 1,820,647 performance rights remain on issue in respect of ordinary shares of Infomedia Ltd.
Further information about the performance rights is set out in note 17 to the financial statements.
SHARE APPRECIATION RIGHTS
As at the date of this report, 2,418,182 Share Appreciation Rights (SARs) remain on issue in respect of ordinary shares of
Infomedia Ltd. Further information about the SARs is set out in note 17 to the financial statements.
AUDITOR
Deloitte Touche Tohmatsu continues in office in accordance with section 327 of the Corporations Act 2001.
infomedia.com.au 37
Directors’ Report
Other Statutory Matters (Continued)
ANNUAL REPORT 2020
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 21 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 21 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.
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
24 August 2020
38 infomedia.com.au
Deloitte Touche Tohmatsu
ABN 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
DX: 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7021
www.deloitte.com.au
The Board of Directors
Infomedia Ltd
3 Minna Close
Belrose, Sydney NSW 2085
24 August 2020
Dear Board Members
Auditor’s Independence Declaration to Infomedia Ltd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the
following declaration of independence to the Directors of Infomedia Ltd.
As lead audit partner for the audit of the financial report of Infomedia Ltd for the year ended
30 June 2020, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i) the auditor independence requirements of the Corporations Act 2001 in relation
to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Pooja Patel
Partner
Chartered Accountants
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
infomedia.com.au 39
ANNUAL REPORT 2020
FY20 Financial Report
TABLE OF CONTENTS:
Page
Financial statements
42
43
44
45
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
Page
Notes - Key performance metrics
Highlights
46
47
48
49
51
Note 1. Operating segments
Note 2. Earnings per share
Note 3. Equity - dividends
Note 4. Income and expenses
Note 5. Income tax
• Infomedia reported revenue of $94.6 million for
the year, an increase of 12% in the previous
corresponding period (pcp).
• Net profit after tax for the year was $18.6 million,
an increase of 15% pcp. EBITDA margins increased
from 45% to 49% pcp.
• Earnings per share increased 10% to 5.69 cents per
share (cps) up from 5.19 cps pcp.
Page
Notes - Significant operating assets and liabilities
Highlights
54
57
58
61
Note 6. Non-current assets - intangibles
Note 7. Current assets – trade and other receivables
• Capitalised development costs, net of amortisation,
increased by $5.9 million during the financial year.
Note 8. Leases
Note 9. Current liabilities – contract liabilities
• The Group recognised right-of-use assets of
$6.4 million and lease liabilities of $7.0 million
on the adoption of AASB 16 Leases, effective
1 July 2019.
40 infomedia.com.au
FY20 Financial Report
ANNUAL REPORT 2020
Page
Notes - Group’s capital and risks
Highlights
61
62
63
65
65
Note 10. Promissory note
Note 11. Equity – issued capital and treasury shares held
in trust
Note 12. Financial instruments
Note 13. Contingencies and commitments
• The Group is in a strong financial position with net
current assets of $98.0 million. Cash and cash
equivalents of $103.9 million include $83.9 million
raised via an institutional placement and share
purchase plan completed in May.
• Infomedia declared a final 70% franked dividend of
Note 14. Events after the reporting period
2.15 cps.
Page
Notes - Business portfolio
66
68
Note 15. Business combinations
Note 16. Interests in subsidiaries
Highlights
• The Group settled $1.2 million of Nidasu contingent
consideration on the achievement of the first
earn-out target.
Page
Notes - Other disclosures
69
74
75
75
76
76
Note 17. Share-based remuneration
Note 18. Cash flow information
Note 19. Key management personnel disclosures
Note 20. Parent entity information
Note 21. Remuneration of auditors
Note 22. Basis of preparation and other accounting policies
infomedia.com.au 41
FY20 Financial Report
Infomedia Ltd
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue
Expenses
Research and development expenses
Sales and marketing expenses
General and administration expenses
Total expenses
Operating profit
Other income
Net finance costs
Net foreign currency exchange gain
Profit before income tax expense
Income tax expense
Profit after income tax expense for the year attributable to the owners of Infomedia
Ltd
Other comprehensive (loss)/income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive (loss)/income for the year, net of tax
Note
4
4
4
4
4
5
ANNUAL REPORT 2020
Consolidated
2019
$'000
2020
$'000
94,618
84,598
(20,057)
(25,590)
(24,699)
(70,346)
(18,258)
(25,376)
(23,116)
(66,750)
24,272
17,848
521
(733)
919
4,268
(1,098)
39
24,979
21,057
(6,423)
(4,935)
18,556
16,122
(724)
(724)
424
424
Total comprehensive income for the year attributable to the owners of Infomedia Ltd
17,832
16,546
Basic earnings per share
Diluted earnings per share
Cents
Cents
2
2
5.69
5.67
5.19
5.13
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes
42 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Consolidated statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Prepayments
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangibles
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Promissory note
Lease liabilities
Provision for income tax
Provisions
Employee benefits
Contingent consideration
Total current liabilities
Non-current liabilities
Promissory note
Lease liabilities
Deferred tax
Provisions
Employee benefits
Contingent consideration
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Treasury shares held in trust
Foreign currency reserve
Share-based payments reserve
Retained profits
Total equity
ANNUAL REPORT 2020
Note
Consolidated
2019
$'000
2020
$'000
7
8
6
9
10
8
5
15
10
8
5
15
11
11
103,919
12,055
2,337
118,311
1,556
4,494
67,898
73,948
15,534
9,340
1,460
26,334
1,531
-
64,355
65,886
192,259
92,220
7,540
1,520
104
1,889
3,504
-
4,131
1,669
20,357
743
3,136
10,820
473
348
2,080
17,600
7,934
1,728
-
-
2,145
216
3,447
1,655
17,125
-
-
6,526
1,019
365
3,120
11,030
37,957
28,155
154,302
64,065
103,192
-
1,365
2,280
47,465
14,790
(1,230)
2,089
5,826
42,590
154,302
64,065
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
infomedia.com.au 43
FY20 Financial Report
Infomedia Ltd
Consolidated statement of changes in equity
For the year ended 30 June 2020
ANNUAL REPORT 2020
Consolidated
Share
capital
$'000
Treasury
shares held
in trust
$'000
Foreign
currency
reserve
$'000
Share-based
payments
reserve
$'000
Retained
profits
$'000
Total equity
$'000
Balance at 1 July 2018
12,923
(978)
1,665
3,328
37,290
54,228
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:
Contributions of equity, net of
transaction costs (note 11) Share-
based payments
Tax effect related to share-based
payments
Shares allocated to employees on
vesting of equity instruments
Purchase of treasury shares Prior
year adjustment for make good
expenses
Dividends paid (note 3)
-
-
-
1,867
-
-
-
-
-
-
-
-
-
-
-
-
269
(521)
-
-
-
424
424
-
-
-
-
-
-
-
-
-
-
16,122
16,122
-
424
16,122
16,546
-
1,048
1,719
(269)
-
-
-
-
-
-
1,867
1,048
1,719
-
(521)
-
-
(102)
(10,720)
(102)
(10,720)
Balance at 30 June 2019
14,790
(1,230)
2,089
5,826
42,590
64,065
Consolidated
Share
capital
$'000
Treasury
shares held
in trust
$'000
Foreign
currency
reserve
$'000
Share-based
payments
reserve
$'000
Retained
profits
$'000
Total equity
$'000
Balance at 1 July 2019
14,790
(1,230)
2,089
5,826
42,590
64,065
Profit after income tax expense for
the year
Other comprehensive loss for the
year, net of tax
Total comprehensive (loss)/
income for the year
Transactions with owners in
their capacity as owners:
Contributions of equity, net of
transaction costs (note 11) Share-
based payments
Tax effect related to equity
movements
Shares allocated to employees on
vesting of equity instruments
Dividends paid (note 3)
-
-
-
88,100
-
302
-
-
-
-
-
-
-
-
1,230
-
-
(724)
(724)
-
-
-
-
-
-
-
-
18,556
18,556
-
(724)
18,556
17,832
-
1,044
(3,547)
(1,043)
-
-
-
-
-
(13,681)
88,100
1,044
(3,245)
187
(13,681)
Balance at 30 June 2020
103,192
-
1,365
2,280
47,465
154,302
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
44 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Consolidated statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and other finance costs paid
Income taxes paid
ANNUAL REPORT 2020
Note
Consolidated
2019
$'000
2020
$'000
93,947
(51,314)
84,548
(45,849)
42,633
76
(179)
(3,822)
38,699
39
-
(309)
Net cash from operating activities
18
38,708
38,429
Cash flows from investing activities
Payment for purchase of business, net of cash acquired
Payment for purchase of subsidiary, net of cash acquired
Payments for prior period's business acquisition
Payments for property, plant and equipment
Payments for intangibles
Payments for development costs capitalised
Net cash used in investing activities
Cash flows from financing activities
Proceeds from promissory note
Proceeds on exercise of executive options
Proceeds from the issue of shares (net of transaction costs)
Payments for purchase of treasury shares
Dividends paid
Repayment of lease liabilities, excluding the financing component
Net cash from/(used in) financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on balances of cash held in foreign currencies
Cash and cash equivalents at the end of the financial year
15
6
10
3
8
-
-
(850)
(808)
-
(21,910)
(466)
(5,436)
-
(328)
(49)
(18,971)
(23,568)
(25,250)
847
5,301
82,624
(63)
(13,681)
(1,950)
-
-
-
(521)
(10,720)
-
73,078
(11,241)
88,218
15,534
167
1,938
13,282
314
103,919
15,534
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
infomedia.com.au 45
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 1. 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, Central and South America.
ANNUAL REPORT 2020
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 products are sold. Discrete financial information
about each of these operating segments is reported to the Board of Directors regularly.
The CODM reviews earnings before interest, tax, depreciation and amortisation (‘EBITDA’). 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 contract.
Reportable segment information
Consolidated - 2020
Revenue
Total revenue
Total revenue
EBITDA
Changes in contingent consideration
Net finance costs
Depreciation, amortisation and impairment
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Asia Pacific
$'000
EMEA
$'000
Americas Unallocated
$'000
$'000
Total
$'000
29,029
29,029
23,452
521
(9)
(95)
23,869
36,346
36,346
29,387
-
(9)
(108)
29,270
29,243
29,243
15,934
-
(19)
(171)
15,744
-
-
(22,724)
-
(696)
(20,484)
(43,904)
94,618
94,618
46,049
521
(733)
(20,858)
24,979
(6,423)
18,556
Australia and the United States of America are the only individual countries from which the Group derives material revenues. In the
current year, the Group derived revenue of $18.385 million from the United States of America (2019: $18.973 million) and $18.060
million from Australia (2019: $16.325 million). $67.110 million (2019: $57.817 million) of the Group’s non-current assets are
located in Australia.
The Group has adopted Accounting Standard AASB 16 Leases for the year ended 30 June 2020 using the modified retrospective
approach and as such the comparatives have not been restated.
46 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 1. Operating segments (continued)
ANNUAL REPORT 2020
Consolidated - 2019
Revenue
Total revenue
Other income
Total revenue
EBITDA
Changes in contingent consideration
Net finance costs
Depreciation, amortisation and impairment
Profit/(loss) before income tax expense
Income tax expense
Profit after income tax expense
Note 2. Earnings per share
Asia Pacific
$'000
EMEA
$'000
Americas Unallocated
$'000
$'000
Total
$'000
22,797
6
22,803
19,450
-
-
-
19,450
34,264
-
34,264
27,578
-
-
-
27,578
27,537
-
27,537
12,934
-
-
-
12,934
-
-
-
(21,921)
4,262
(1,098)
(20,148)
(38,905)
84,598
6
84,604
38,041
4,262
(1,098)
(20,148)
21,057
(4,935)
16,122
Consolidated
2019
$'000
2020
$'000
Profit after income tax attributable to the owners of Infomedia Ltd
18,556
16,122
Basic earnings per share
Diluted earnings per share
Weighted average number of ordinary shares used in calculating basic earnings per share:
Weighted average number of ordinary shares issued
Weighted average number of treasury shares held in trust
Cents
Cents
5.69
5.67
5.19
5.13
Number
Number
326,471,494
(177,325)
311,806,000
(1,267,000)
326,294,169
310,539,000
Number
Number
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
ª
326,294,169
310,539,000
913,684
4,524,000
⁽
⁾
327,207,853
315,063,000
The weighted average number of ordinary shares or dilutive potential ordinary shares is calculated by taking into account the period
from the issue date of the shares to the reporting date unless otherwise stated as below.
infomedia.com.au 47
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 2. Earnings per share (continued)
ANNUAL REPORT 2020
(a)
(b)
Infomedia operates share-based payments arrangements in the form of a long term incentive plan. Eligible employees receive
long term incentives in the form of performance rights, performance options and/or share appreciation rights. The long-term
incentives vest subject to attainment of specified performance conditions being met over the performance period. Vested
entitlements may be exercised and are generally settled by share based payment in the form of ordinary fully paid Infomedia
shares, unless otherwise determined by the Board. Further details of the long-term incentives currently on issue are set out in
note 17 below. Additional details about long-term incentives issued to Executive KMP are set out in the Company’s
remuneration report.
Infomedia acquired Microcat CRM™ and Nidasu Pty Limited during the financial year ended 30 June 2018 and 2019,
respectively. Any potential contingent consideration to be settled in the future will be partly in the form of Infomedia ordinary
shares. As at both 30 June 2019 and 2020, the contingent consideration liability recognised on the statement of financial
position has not been included as dilutive potential ordinary shares in the diluted earnings per share calculation. The contingent
consideration liability as at 30 June 2020 only relates to Nidasu Pty Limited.
Accounting policy for earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Infomedia by the weighted average number
of ordinary shares outstanding during the financial year, adjusted for any bonus elements in ordinary shares issued during the
financial year and excluding treasury shares.
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 3. Equity - dividends
Dividends paid during the financial year were as follows:
Interim dividend for the year ended 30 June 2020 of 2.15 cents of which 1.505 cents was franked
(2019: 1.75 cents fully franked) per ordinary share
Final dividend for the year ended 30 June 2019 of 2.15 cents unfranked (2018: 1.70 cents fully
franked) per ordinary share
Consolidated
2019
$'000
2020
$'000
6,844
6,837
5,449
5,271
13,681
10,720
On 24 August 2020, the directors declared a final dividend of 2.15 cents per share, 70% franked, to be paid on 17 September 2020.
As this occurred after the reporting date, the dividends declared have not been recognised in these financial statements and will be
recognised in future financial statements.
The Company’s Dividend Reinvestment Plan ('DRP') was suspended on 31 October 2019.
Franking credits
Consolidated
2019
$'000
2020
$'000
Franking credits available for subsequent financial years based on a tax rate of 30%
5,355
2,474
The franking credit balance includes:
●
●
●
franking credits that will arise from the payment of the amount of the provision for income tax at the reporting date;
any 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.
48 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 4. Income and expenses
Profit before income tax includes the following specific income and expenses:
Revenue
Subscriptions revenue
Development and other ancillary service revenue
ANNUAL REPORT 2020
Consolidated
2019
$'000
2020
$'000
91,277
3,341
94,618
82,204
2,394
84,598
The disaggregation of revenue shown above is by nature of revenue. Refer to the revenue recognition policy below.
Other income
Changes in contingent consideration
Other
Net finance costs
Finance income
Finance costs excluding interest and finance charges on lease liabilities
Interest and finance charges paid/payable on lease liabilities
Depreciation, amortisation and impairment
Depreciation - property, plant and equipment
Depreciation - right-of-use assets
Amortisation
Impairment
Net foreign currency exchange gain
Net foreign exchange gains/(losses) - unrealised
Net foreign exchange gains/(losses) - realised
Leases expense
Minimum operating lease payments (AASB 117)
Short-term lease payments
Employee benefits expense
Employee benefits expense excluding superannuation
Defined contribution superannuation expense
Share-based payments expense
Research and development expenses
Total research and development costs incurred during the financial year
Amortisation of deferred development costs
Less: development costs capitalised
521
-
521
154
(708)
(179)
(733)
(518)
(1,973)
(18,367)
-
(20,858)
819
100
919
-
(31)
(31)
(39,166)
(2,389)
(1,044)
(42,599)
(26,044)
(15,923)
21,910
(20,057)
4,262
6
4,268
38
(1,136)
-
(1,098)
(524)
-
(16,257)
(3,367)
(20,148)
(39)
78
39
(2,230)
-
(2,230)
(35,272)
(2,299)
(1,048)
(38,619)
(22,429)
(14,798)
18,969
(18,258)
infomedia.com.au 49
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 4. Income and expenses (continued)
Accounting policies
Revenue recognition
ANNUAL REPORT 2020
The Group derives the majority of its revenue from recurring ‘software as a service’ subscriptions, where customers are licensed to
access and use software and associated support services.
The Group generates revenue through the following streams of revenue:
●
●
●
subscriptions to the Group’s software products, comprising over 95% of total revenue;
software development services to tailor off-the-shelf software solutions for specific use or functionality requirements or
integration with customers’ systems; and
ancillary services in the form of software installation and training.
Each of the above services delivered to customers are considered separate performance obligations even though, in practice, they
may be governed by a single legal contract with the customer.
Revenue recognition for each of the above revenue streams are as follows:
●
Subscriptions revenue:
˃ Customers are typically invoiced monthly, quarterly or yearly based on the terms in the contract with customers, and
consideration is payable when invoiced. The consideration received for quarterly or yearly invoices is recognised as
contract liabilities.
˃ Revenue is then recognised ratably over the life of the subscription agreement beginning when the customer first has access
to the software.
˃ Revenue is calculated based on the number of subscriptions used and fee per subscription, or as a negotiated package for
large customers.
●
Software development services:
˃ The software development services are typically invoiced as defined in the contract with the customers. Revenue is
recognised over time as services are delivered or in accordance with the terms of the service arrangement.
˃ Revenue is calculated based on time and/or external supplier costs.
●
Ancillary services:
˃ The ancillary services are software installation and training and are invoiced as defined in the contract with the
customers.
˃ Revenue is recognised either at a point in time or over time depending on how the terms of the service arrangements are
satisfied.
Foreign currency translation
The financial statements are presented in Australian dollars, which is Infomedia's functional and presentation currency.
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.
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 monthly 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.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in
which they are incurred.
50 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 4. Income and expenses (continued)
Short-term employee benefits
ANNUAL REPORT 2020
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.
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 high quality corporate bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
Note 5. Income tax
Income tax expense
Current tax
Deferred tax - current year
Prior year unders / (overs)
Aggregate income tax expense
Deferred tax included in income tax expense comprises:
Increase in deferred tax assets
Increase in deferred tax liabilities
Deferred tax - current year
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
Changes in contingent consideration
Impairment of goodwill
Non-deductible expenses
Prior year unders / (overs)
Income tax expense
Consolidated
2019
$'000
2020
$'000
4,855
1,049
519
6,423
(275)
1,324
1,049
4,545
436
(46)
4,935
(519)
955
436
24,979
21,057
7,494
6,317
(1,519)
(70)
(156)
-
155
5,904
519
6,423
(1,476)
3
(1,278)
1,010
405
4,981
(46)
4,935
infomedia.com.au 51
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 5. Income tax (continued)
Amounts charged/(credited) directly to equity
Deferred tax assets
Deferred tax asset
Deferred tax asset comprises temporary differences attributable to:
Provisions
Capital raising transaction costs
Share-based payments
Other payables
Foreign currency exchange
Offset against deferred tax liabilities
Deferred tax asset
Movements:
Opening balance
Credited to profit or loss
(Charged) / 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:
Deferred development costs
Property, plant and equipment
Prepayments
Share-based payment trust contributions
Intangible assets
Offset against deferred tax assets
Deferred tax liability
Movements:
Opening balance
Charged to profit or loss
Additions through business combinations
Reversal of offset against deferred tax assets
Offset against deferred tax assets
Closing balance
52 infomedia.com.au
ANNUAL REPORT 2020
Consolidated
2019
$'000
2020
$'000
3,245
(1,719)
Consolidated
2019
$'000
2020
$'000
2,746
300
371
-
(71)
(3,346)
2,201
-
3,917
4
194
(6,316)
-
-
-
275
(3,245)
6,316
(3,346)
-
519
1,719
4,078
(6,316)
-
-
Consolidated
2019
$'000
2020
$'000
13,373
78
30
(253)
938
(3,346)
11,573
-
-
(17)
1,286
(6,316)
10,820
6,526
6,526
1,324
-
6,316
(3,346)
7,088
955
721
4,078
(6,316)
10,820
6,526
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 5. Income tax (continued)
Provision for income tax
Provision for income tax
Critical accounting judgements, estimates and assumptions
ANNUAL REPORT 2020
Consolidated
2019
$'000
2020
$'000
3,504
2,145
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, for example, research and development claims. 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.
The Company has made claims under the research and development tax incentive provided by the Australian Government (R&D
incentive). The R&D incentive is claimed by way of self-assessment by the Company.
In recent times there has been a heightened level of audit activity on claims previously submitted under the R&D incentive. The
Company’s 2016 R&D claim has been under review with AusIndustry since July 2019. In March 2020, the Company received formal
notification from AusIndustry that in their opinion certain R&D activities were ineligible R&D activities and, therefore, would not qualify
for the R&D tax offset for the 2016 income year.
The potential exposure to the Group for the 2016 income year is tax of $0.780 million and interest of approximately $0.300 million to
30 June 2020. The Company and its tax advisors are of the opinion that the R&D tax incentive claims with respect to the 2016 year
can be substantiated and, therefore, have not provided for the potential exposure. The Company requested an Internal Review by
AusIndustry of the negative finding and this process is underway. The Company submitted additional information to AusIndustry on 17
August 2020 to address the concerns raised.
Interpretation 23 Uncertainty over Income Tax
The Group has adopted Interpretation 23 from 1 July 2019. The interpretation clarifies how to apply the recognition and measurement
requirements of AASB 112 ‘Income Taxes’ in circumstances where uncertain tax treatments exists. The interpretation requires: the
Group to determine whether each uncertain tax treatment should be treated separately or together, based on which approach better
predicts the resolution of the uncertainty; the Group to consider whether it is probable that a taxation authority will accept an uncertain
tax treatment; and if the Group concludes that it is not probable that the taxation authority will accept an uncertain tax treatment, it
shall reflect the effect of uncertainty in determining the related taxable profit (tax loss), tax bases, unused tax losses, unused tax
credits or tax rates, measuring the tax uncertainty based on either the most likely amount or the expected value.
In making the assessment it is assumed that a taxation authority will examine amounts it has a right to examine and have full
knowledge of all related information when making those examinations. Interpretation 23 was adopted using the modified retrospective
approach and as such comparatives have not been restated. There was no impact of adoption on opening retained profits as at 1 July
2019.
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.
infomedia.com.au 53
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 5. Income tax (continued)
ANNUAL REPORT 2020
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 6. Non-current assets - intangibles
Goodwill
Less: Impairment write down
Capitalised development costs
Less: Accumulated amortisation
Software systems - at valuation
Less: Accumulated amortisation
Customer relationships - at valuation
Less: Accumulated amortisation
Brand names - at valuation
Reconciliations
Consolidated
2019
$'000
2020
$'000
17,461
-
17,461
103,161
(58,579)
44,582
8,309
(4,357)
3,952
1,894
(705)
1,189
20,828
(3,367)
17,461
81,172
(42,577)
38,595
8,309
(2,233)
6,076
1,894
(385)
1,509
714
714
67,898
64,355
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Additions
Additions through business
combinations (note 15)
Impairment of assets
Amortisation expense
Balance at 30 June 2019
Additions
Amortisation expense
Capitalised
development
costs
$'000
Goodwill
$'000
Software
Customer
systems relationships
$'000
$'000
Brand
names
$'000
15,604
-
5,224
(3,367)
-
17,461
-
-
34,424
18,969
-
-
(14,798)
38,595
21,910
(15,923)
3,310
49
3,928
-
(1,211)
6,076
-
(2,124)
355
-
1,402
-
(248)
1,509
-
(320)
Total
$'000
53,693
19,018
11,268
(3,367)
(16,257)
64,355
21,910
(18,367)
67,898
-
-
714
-
-
714
-
-
714
Balance at 30 June 2020
17,461
44,582
3,952
1,189
54 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 6. Non-current assets - intangibles (continued)
Impairment testing
ANNUAL REPORT 2020
The Group performed impairment testing for goodwill on an annual basis and other intangibles where there are indicators of
impairment.
Goodwill acquired through business combinations or territory acquisition has been allocated to a reportable segment (refer note 1) for
impairment testing as follows:
Asia Pacific
EMEA
Americas
Impairment assessment
Consolidated
2019
$'000
2020
$'000
8,001
5,837
3,623
8,001
5,837
3,623
17,461
17,461
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 plan for the year ending 30 June 2021 (‘FY21’). Key assumptions are those to which the recoverable amount of each
reportable segment are 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 FY21 plan applied were 6% to 14% (2019: 6% to 22%) for Asia Pacific, 3% to 8% (2019: 3% to
11%) for EMEA, 3% to 6% (2019: 3% to 5%) for Americas and CRM (2019: 0%);
terminal growth rate applied for all reportable segments was 1.5% (2019: 1.5%);
post-tax weighted average cost of capital applied was 11% (2019: 11.0%) for Asia Pacific, 10.5% (2019: 10.5%) for EMEA, 10.5%
(2019: 10.5%) for Americas and CRM (2019: 18.0%); and
exchange rates used in the cash flow projections for foreign operations were: AUD/USD exchange rate $0.67 (2019: $0.70) and
AUD/EUR exchange rate $0.61 (2019: $0.62).
As at 30 June 2020, the value in use of net assets of the Group was greater than the carrying value of the assets and therefore
goodwill was not considered to be impaired for all reportable segments. All goodwill associated with CRM was impaired in FY19 by
$3.367 million. CRM is being monitored within the Asia Pacific reportable segment in FY20.
Critical accounting judgements, estimates and assumptions - COVID-19
Judgement has been exercised in considering the impacts that the COVID-19 has had, or may have, on the Group and FY21
outlook. This consideration extends to the nature of the products and services offered, customers, the inherent uncertainty in the
timing of new incremental revenue, the global workforce and the lockdown restrictions and economic conditions of the geographic
regions in which the Group operates.
The following describes each key assumption on which management had based its cash flow projections when determining the
value-in-use of its cash generating units:
●
●
●
●
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 competitive; and
the Group is able to maintain its current gross margins.
Sensitivity – Asia Pacific, EMEA and Americas
No reasonable change in assumptions would result in the recoverable amount being materially less than the carrying value for any
reportable segments.
Intangible assets other than goodwill
There were no indicators of impairment during the year ended 30 June 2020 and 30 June 2019.
infomedia.com.au 55
FY20 Financial Report
ANNUAL REPORT 2020
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 6. Non-current assets - intangibles (continued)
Critical accounting judgements, estimates and assumptions - goodwill
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.
Critical accounting judgements, estimates and assumptions - 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.
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.
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 estimated
finite useful life of four to five years.
Software systems
Software systems acquired in a business combination are amortised on a straight-line basis over the period of their expected benefit,
being their estimated finite useful life of four to five years.
Customer relationships
Customer relationships acquired in a business combination are amortised on a straight-line basis over the period of their expected
benefit, being their estimated finite useful life of three to nine years.
Brand names
Brand names acquired in a business combination are capitalised as an asset. The brand is recognised as having an infinite useful life
as there is no foreseeable limit to the period over which the brand is expected to generate cash flows. The brand names are carried at
cost less accumulated impairment losses.
56 infomedia.com.au
FY20 Financial Report
ANNUAL REPORT 2020
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 6. Non-current assets - intangibles (continued)
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 (a) an asset's fair value less costs of disposal; and (b) 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 cash-
generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to form a cash-
generating unit.
Note 7. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Allowance for expected credit losses
The ageing of the impaired receivables provided for above are as follows.
Consolidated
Not overdue
0 to 30 days overdue
30 to 60 days overdue
Over 60 days overdue
Expected credit loss rate
2019
%
2020
%
0.22%
6.81%
7.39%
10.75%
0.20%
0.20%
0.40%
16.40%
Movements in the allowance for expected credit losses are as follows:
Opening balance
Additional provisions recognised
Receivables written off during the year as uncollectable
Closing balance
Consolidated
2019
$'000
2020
$'000
12,035
(498)
11,537
9,277
(350)
8,927
518
413
12,055
9,340
Carrying amount
2019
$'000
2020
$'000
Allowance for expected credit
losses
2019
$'000
2020
$'000
6,308
1,953
1,634
2,140
12,035
4,926
1,692
619
2,040
9,277
14
133
121
230
498
10
3
2
335
350
Consolidated
2019
$'000
2020
$'000
350
148
-
498
414
-
(64)
350
infomedia.com.au 57
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
ANNUAL REPORT 2020
Note 7. Current assets - trade and other receivables (continued)
Critical accounting judgements, estimates and assumptions - allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime
expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit loss rate for
each group. These assumptions include recent sales experience, historical collection rates, the impact of the COVID-19 and forward-
looking information that is available. The allowance for expected credit losses is calculated based on the information available at the
time of preparation. The actual credit losses in future years may be higher or lower.
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.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss allowance.
To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Note 8. Leases
The Group adopted AASB 16 Leases on 1 July 2019 using the ‘modified retrospective’ approach with no restatement of comparatives
for the 2019 reporting period, as permitted under the specific transitional provisions in the standard. The reclassifications and
adjustments arising from the new leasing rules are, therefore, recognised in the opening balance sheet on 1 July 2019. There was no
impact on opening retained profits at 1 July 2019 following the adoption of AASB 16.
On adoption of AASB 16, the Group recognised lease liabilities in relation to property leases which had previously been classified as
‘operating leases’ under the principles of AASB 117 Leases. These liabilities were measured at the present value of the remaining
lease payments, discounted using the Group’s incremental borrowing rates as of 1 July 2019. The weighted average incremental
borrowing rate applied to the lease liabilities on 1 July 2019 was 3.05%.
The associated right-of-use assets were measured at an amount equal to the lease liability, adjusted by the amount of any deferred
incentives relating to that lease as at the transition date.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases (with terms of 12
months or less) and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
When adopting AASB 16 from 1 July 2019, the Group has applied the following practical expedients:
●
●
●
●
accounting for leases with a remaining lease term of 12 months as at 1 July 2019 as short-term leases;
excluding any initial direct costs from the measurement of right-of-use assets;
using hindsight in determining the lease term when the contract contains options to extend or terminate the lease; and
not apply AASB 16 to contracts that were not previously identified as containing a lease.
Assets
Non-current right-of-use assets
Liabilities
Current lease liabilities
Non-current lease liabilities
The net impact on retained profits on 1 July 2019 was Nil.
58 infomedia.com.au
1-Jul-19
$'000
6,422
(1,996)
(4,979)
(6,975)
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 8. Leases (continued)
ANNUAL REPORT 2020
The following table reconciles the Group’s operating lease commitments as at 30 June 2019 to the lease liabilities recognised upon
transition on 1 July 2019:
Operating lease commitments (net of sublease income) as at 30 June 2019
Commitments related to outgoings and similar service costs
Commitments related to short-term leases and leases of low-value assets
Impact of discounting
Lease agreements and/or renewals executed during the year
Other
Lease liabilities as at 1 July 2019
8(a). Lease liabilities
Current
Non-current
Reconciliation
A reconciliation of lease liabilities at the beginning and end of the current financial year is set out below:
Recognised on adoption of AASB 16
Lease payments (AASB 16 rent adjustment)
Interest charges
Exchange differences
Balance at 30 June 2020
1-Jul-19
$'000
7,460
(989)
(76)
(369)
903
46
6,975
Consolidated
2019
$'000
2020
$'000
1,889
3,136
5,025
-
-
-
$'000
6,975
(2,069)
179
(60)
5,025
Future lease payments in relation to lease liabilities as at 30 June 2020 are disclosed in note 12.
Interest and finance charges paid/payable on lease liabilities are disclosed in note 4.
On 12 February 2020, the Company signed a new lease agreement to replace its existing office premises in Melbourne. The lease is
for a term of 5 years at an initial rent charge of $272,800 per annum, with options for renewal. The Company will occupy this premises
after the June 2020 year-end.
Critical accounting judgements, estimates and assumptions - Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement is
exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying asset will
be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be included in the lease term.
In determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension option, or not
to exercise a termination option, are considered at the lease commencement date. Factors considered may include the importance of
the asset to the Group's operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties;
existence of significant leasehold improvements; and the costs and disruption to replace the asset. The Group reassesses whether it
is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or significant
change in circumstances.
infomedia.com.au 59
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 8. Leases (continued)
ANNUAL REPORT 2020
Critical accounting judgements, estimates and assumptions - Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to discount future
lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the
Group estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the right-of-
use asset, with similar terms, security and economic environment.
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present value of
the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or, if that rate cannot
be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under residual value guarantees,
exercise price of a purchase option when the exercise of the option is reasonably certain to occur, and any anticipated termination
penalties. The variable lease payments that do not depend on an index or a rate are expensed in the period in which they are
incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured if there is
a change in the following: future lease payments arising from a change in an index or a rate used; residual guarantee; lease term;
certainty of a purchase option and termination penalties. When a lease liability is remeasured, an adjustment is made to the
corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
8(b). Right-of-use assets
Right-of-use assets
Less: Accumulated depreciation
Consolidated
2019
$'000
2020
$'000
6,463
(1,969)
4,494
-
-
-
The Group leases buildings for its offices under agreements of between 1 to 5 years with, in some cases, options to extend. The
leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
Reconciliation
A reconciliation of the written down values at the beginning and end of the current financial year is set out below:
Additions on adoption of AASB 16
Exchange differences
Depreciation
Balance at 30 June 2020
Accounting policy for right-of-use assets
Land and
buildings
$'000
6,422
45
(1,973)
4,494
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which comprises
the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the commencement date net
of any lease incentives received, any initial direct costs incurred, and, except where included in the cost of inventories, an estimate of
costs expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful life of the
asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the lease term, the
depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of
lease liabilities.
60 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 8. Leases (continued)
ANNUAL REPORT 2020
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms of 12
months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as incurred.
Note 9. Current liabilities - contract liabilities
Contract liabilities
Reconciliation
A reconciliation of the contract liabilities values at the beginning and end of the current and
previous financial year is set out below:
Opening balance
Billings in advance
Material right liability
Transfer to revenue - included in the opening balance
Transfer to revenue - performance obligations satisfied in the current financial period
Foreign currency translation differences
Closing balance
Unsatisfied performance obligations
Consolidated
2019
$'000
2020
$'000
1,520
1,728
1,728
6,285
231
(1,728)
(4,993)
(3)
1,131
5,935
-
(1,131)
(4,212)
5
1,520
1,728
The aggregate amount of the contract liabilities allocated to the performance obligations that are unsatisfied at 30 June 2020 was
$1.520 million (2019: $1.728 million) and is expected to be recognised as revenue in future periods as follows:
Within 6 months
6 to 12 months
Consolidated
2019
$'000
2020
$'000
662
858
1,520
1,415
313
1,728
Accounting policy for contract liabilities
Contract liabilities represent the Group's obligation to transfer services to a customer and are recognised when a customer pays
consideration, or when the Group recognises a receivable to reflect its unconditional right to consideration (whichever is earlier)
before the Group has transferred the services to the customer.
Note 10. Promissory note
Current
Non-current
Consolidated
2019
$'000
2020
$'000
104
743
847
-
-
-
On 22 June 2020, the Group received funds under the US Small Business Administration Paycheck Protection Program ('PPP')
established by the Coronavirus Aid, Relief and Economic Security ('CARES') Act.
infomedia.com.au 61
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 10. Promissory note (continued)
ANNUAL REPORT 2020
The promissory note matures on 1 June 2025 and the Group is liable to repay the principal amount in equal instalments (commencing
6 months from the funding date) together with interest at a rate of 1% per annum.
The proceeds are being used toward permitted payroll, rent and other utility costs and, therefore, may be eligible for forgiveness (i.e.
not repayable) under the terms of the CARES Act should an application be submitted and approved.
Accounting policy for borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are
subsequently measured at amortised cost using the effective interest method.
Note 11. Equity - issued capital and treasury shares held in trust
2020
Shares
2019
Shares
Consolidated
2019
$'000
2020
$'000
Ordinary shares - fully paid
Treasury shares held in trust - fully paid
374,457,626
-
312,426,494
(1,287,282)
103,192
-
14,790
(1,230)
374,457,626
311,139,212
103,192
13,560
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
Shares for part settlement of purchase of a business
Shares for part settlement of purchase of a subsidiary
1 July 2018
5 September 2018
31 December 2019
310,823,521
385,582
1,217,391
Balance
Shares issued to executives upon vesting of options
and/or performance rights
Shares issued to executives upon vesting of options
and/or performance rights
Shares for part settlement of purchase of a subsidiary
Institutional placement
Share purchase plan
Share issue transaction costs (net of tax)
30 June 2019
312,426,494
19 August 2019
5,546,280
1 October 2019
23 March 2020
28 April 2020
27 May 2020
372,466
195,528
46,606,449
9,310,409
-
$1.21
$1.15
$0.92
$0.00
$1.86
$1.50
$1.50
-
12,923
467
1,400
14,790
5,114
-
364
69,910
13,966
(952)
Balance
30 June 2020
374,457,626
103,192
Movements in treasury shares held in trust
Details
Balance
Purchase of treasury shares
Disposal of treasury shares
Balance
Purchase of treasury shares
Disposal of treasury shares
Date
1 July 2018
30 June 2019
Shares
Acquisition
price
(1,254,142)
(399,158)
366,018
(1,287,282)
(30,917)
1,318,199
$1.30
$0.73
$2.04
$0.98
Balance
30 June 2020
-
$'000
(978)
(521)
269
(1,230)
(63)
1,293
-
62 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
ANNUAL REPORT 2020
Note 11. Equity - issued capital and treasury shares held in trust (continued)
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. Each member represented at a general meeting, whether in person or
by proxy, shall have one vote on a show of hands. Each share carries one vote upon a poll.
Treasury shares held in trust
Treasury shares are ordinary shares of the Company purchased on market by the trustee of the Infomedia Employee Share Scheme
Trust. The treasury shares are held on trust for the purpose of meeting future obligations in connection with the Company’s long term
employee incentive scheme. Trust shares are allocated or transferred to recipients upon vesting and exercise of long-term
incentives. Further details about the Company’s long term incentives are set out in note 17 to these financial statements.
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 Australian Securities Exchange, 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.
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 12. 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 the identification and analysis of both the risk exposure of the Group as well as the 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 and
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; and
Americas, including North, Central and South America); and as a result, exposures to exchange rate fluctuations arise. These
exposures mainly arise from the subscriptions for the Group’s products and to a lesser extent the associated costs 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'), with a corresponding impact to the foreign currency reserve in equity.
As at 30 June 2020, there are no outstanding derivative financial instruments.
infomedia.com.au 63
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 12. Financial instruments (continued)
At 30 June 2020, the carrying value of foreign currency denominated cash and cash equivalents are as follows:
ANNUAL REPORT 2020
US Dollar
Euro
Consolidated
2019
$'000
2020
$'000
6,092
10,575
6,574
4,264
16,667
10,838
The Group had cash denominated in foreign currencies of $16.667 million as at 30 June 2020 (2019: 10.838 million). Based on this
exposure, had the Australian dollar weakened by 15%/strengthened by 10% (2019: 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 $1.750 million
higher/$1.167 million lower (2019: $1.138 million higher/$0.759 million lower) and equity would have been $1.750 million
higher/$1.167 million lower (2019: $1.138 million higher/$0.759 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 gain for the year ended 30 June 2020 was $0.919 million (30 June
2019: gain of $0.039 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
Credit risk
Weighted
average
interest rate
%
-
1.07%
2020
2019
Weighted
average
interest rate
%
-
0.99%
Balance
$'000
19,296
84,623
103,919
Balance
$'000
12,827
2,707
15,534
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 Group’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 Group’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 relatively low with automotive manufacturers being the exception.
Since the Group trades only with recognised third parties, collateral is not requested nor is it the Group’s policy to securitise its trade
and other receivables. The ageing analysis as disclosed in note 7 shows that majority of the Group’s trade receivables are within the
normal credit term and the receivables impairment loss is immaterial.
64 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 12. Financial instruments (continued)
ANNUAL REPORT 2020
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through the use
of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative across all
customers of the Group based on recent sales experience, historical collection rates and forward-looking information that is available.
As disclosed in note 7, due to COVID-19, the calculation of expected credit losses has been revised as at 30 June 2020 and rates
have increased in each category of overdue receivables.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include the failure
of a debtor to engage in a repayment plan and a failure to make contractual payments for a period greater than 1 year even with
active debt collection activities.
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 with no borrowings other than the promissory note (refer note 10), the Group does not
have fixed or contractual payments at the reporting date other than leases and contingent consideration.
Contingent consideration may be payable over the next 1.5 years with 70% in cash and 30% in Infomedia's ordinary shares. The
amount to be paid are determined by:
●
the revenue and profit before tax of Nidasu Pty Limited over the three year period from date of acquisition.
The remaining contractual maturity of the Group’s other financial liabilities are as stated in the statement of financial position and are
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;
lease liabilities are interest bearing, there is no exposure to interest rate risk on the basis that the interest rate is fixed and the
remaining contractual maturities of leases including principal and interest payments are: within 1 year $1.889 million; between 1
and 2 years $1.924 million; between 2 and 3 years $1.212 million; between 3 and 4 years $Nil; between 4 and 5 years $Nil; and
greater than 5 years $Nil;
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 2020, the Group has a total of cash and cash equivalents and trade and other receivables of $115.974 million
(2019: $24.874 million) to meet its future cash outflows of trade and other payables of $7.540 million (2019: $7.934 million) when
due for payment.
Note 13. Contingencies and commitments
Operating lease commitments were disclosed under the requirements of AASB 117 Leases. AASB 117 was superseded by AASB 16
Leases effective 1 July 2019. Operating leases commitments are no longer disclosed under AASB 16.
The Company has provided the following bank performance guarantees:
●
●
In respect of its corporate headquarters lease - a maximum value of $0.722 million (2019: $0.722 million).
In respect its Melbourne office lease - a maximum value of $0.186 million (2019: Nil). This is a new lease agreement to replace its
existing office space in Melbourne. The Company only expects to occupy the premises in the 2021 financial year.
Note 14. Events after the reporting period
On 24 August 2020, the Board declared a final 70% franked dividend of 2.15 cents per share.
The impact of COVID-19 is ongoing and while it has not had a significant detrimental effect on the Group up to 30 June 2020, it is not
practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly changing and is
dependent on measures imposed by the Australian Government and other countries, such as maintaining social distancing
requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 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.
infomedia.com.au 65
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 15. Business combinations
ANNUAL REPORT 2020
Acquisition of Nidasu Pty Limited - For the year ended 30 June 2019
On 13 December 2018, the Group acquired 100% of the ordinary shares of Nidasu Pty Limited. Nidasu is the leading provider of data
analytics to automakers and dealerships throughout Australia. The monthly subscription business model is highly complementary to
Infomedia’s software as a service (‘SaaS’) recurring revenue business. It represents a key step in building Infomedia’s data strategy
and presents a significant opportunity to access new customers and leverage Infomedia’s data business globally. As at 30 June 2019,
the acquisition of Nidasu is based on final purchase price accounting. None of the goodwill is expected to be deductible for tax
purposes.
The fair values (as determined at acquisition date using an independent expert) of identifiable assets and liabilities in relation to this
acquisition are listed in the tables below and were final as at 30 June 2019.
Identifiable intangible assets – software systems
Identifiable intangible assets – customer relationships
Identifiable intangible assets - brand names
Cash and cash equivalents
Working capital
Deferred tax
Net assets acquired
Goodwill
Acquisition-date fair value of the total consideration transferred
Representing:
Cash paid to vendor
Infomedia Ltd shares issued to vendor
Contingent consideration*
Acquisition-date value of the total consideration transferred
Acquisition costs expensed to profit or loss
Fair value
$'000
3,928
1,402
714
164
182
(721)
5,669
5,224
10,893
5,600
1,400
3,893
10,893
56
*
Pursuant to the Share Purchase Agreement, some of the consideration will be settled based on future years’ actual financial
performance of the acquired business determined on contractual terms and thus was recognised as contingent consideration by
the Group. Refer to fair value measurement section below for further details of fair value of the contingent consideration.
Accounting policy for business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments or other
assets are acquired.
The consideration is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities
incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree. For each
business combination, the non-controlling interest in the acquiree is measured at either fair value or at the proportionate share of the
acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or accounting
policies and other pertinent conditions in existence at the acquisition-date.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent changes in the
fair value of the contingent consideration classified as an asset or liability are recognised in profit or loss. Contingent consideration
classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
66 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 15. Business combinations (continued)
ANNUAL REPORT 2020
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest in the
acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the acquiree is
recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value of the identifiable net
assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the
acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of the net assets acquired, the
non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's previously held equity interest in the
acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional amounts
recognised and also recognises additional assets or liabilities during the measurement period, based on new information obtained
about the facts and circumstances that existed at the acquisition-date. The measurement period ends on either the earlier of (i) 12
months from the date of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
Fair value measurement - contingent consideration
Fair value hierarchy
The following tables detail the Group's assets and liabilities, measured or disclosed at fair value, using a three level hierarchy, based
on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement
date;
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly;
and
Level 3: Unobservable inputs for the asset or liability.
The Group's only financial instrument measured at fair value as at 30 June 2020 is contingent consideration (2019: contingent
consideration).
Consolidated 2020
Liabilities
Contingent consideration - current
Contingent consideration - non-current
Consolidated - 2019
Liabilities
Contingent consideration - current
Contingent consideration - non-current
Level 1
$'000
Level 2
$'000
Level 3
$'000
-
-
-
-
-
-
1,669
2,080
3,749
Level 1
$'000
Level 2
$'000
Level 3
$'000
-
-
-
-
-
-
1,655
3,120
4,775
Valuation techniques for fair value measurements categorised within level 2 and level 3
The contingent consideration arose on business combinations (refer to earlier sections within this note). The fair value was
determined using an independent expert and is estimated based on a multiple of forecast profit before tax or net profit after tax of the
acquired business over a three year period, subject to clawback. Any settlement of contingent consideration will be in the form of cash
and Infomedia’s ordinary shares split in accordance with the corresponding Agreements. Any variation at the time of settlement will be
recognised as income or expense in profit or loss.
infomedia.com.au 67
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 15. Business combinations (continued)
ANNUAL REPORT 2020
Critical accounting judgements, estimates and assumptions - fair value of financial instruments
The Group’s contingent consideration liability is measured at fair value at the end of each reporting period. The information provided
below is about how the fair value of this financial liability is determined, including the valuation technique and inputs used.
●
●
●
●
Fair value hierarchy: level 3;
Valuation technique: the fair value is calculated based on a multiple of forecast net profit before tax or net profit after tax of the
business over a three year period, subject to clawback;
Significant unobservable inputs: forecast net profit of the business and the discount rate; and
Relationship of unobservable inputs to fair value: the estimated fair value would increase/decrease if the forecast net profit or
discount rate were higher/lower.
Level 3 liabilities
Movements in level 3 liabilities during the current and previous financial year are set out below:
Opening balance at 1 July
Contingent consideration acquired in business combination
Settlement during the financial year
Release of finance costs during the financial year
Changes in contingent consideration through profit and loss
2020
$'000
4,775
-
(1,213)
708
(521)
2019
$'000
4,941
3,893
(933)
1,136
(4,262)
Closing balance at 30 June
3,749
4,775
Sensitivity analysis on fair value of contingent consideration
The carrying value of contingent consideration at 30 June 2020 might be impacted by the changes in discount rate or the forecast net
profit before tax of Nidasu Pty Limited. The impact to the carrying value for the following unobservable inputs is as follows:
●
●
Discount rate - a 100 basis points increase/decrease in the discount rate would decrease/increase the contingent consideration
by $0.033 million (2019: $0.056 million and $0.057 million respectively).
Profitability, adjustments on profit before tax - a 5% increase/decrease in the profitability would increase/decrease the contingent
consideration by $0.352 million (2019: $0.420 million).
Note 16. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described at the end of each relevant notes:
Name
IFM Europe Limited
IFM Americas Inc.
IFM China (WOFE)
Nidasu Pty Limited
Infomedia Ltd is the parent entity of the Group.
Transactions with related parties
Principal place of business /
Country of incorporation
United Kingdom
USA
China
Australia
Ownership interest
2020
2019
%
%
100%
100%
100%
100%
100%
100%
100%
100%
There were no transactions with related parties during the current or 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.
68 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 16. Interests in subsidiaries (continued)
Loans to/from related parties
ANNUAL REPORT 2020
There were no loans to or from related parties at the current and previous reporting date.
Note 17. Share-based remuneration
The ultimate objective of share-based remuneration is to incentivise and align executives with delivery of long-term 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 for senior employees 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 either issuing new ordinary shares in the Company or
acquiring ordinary shares of the Company on market. Alternatively, the Board retains a discretion to settle the arrangements by cash
in appropriate circumstances. The arrangements are governed by the terms of the Company’s Equity Plan Rules.
Trading in the Company’s ordinary shares awarded under the share-based remuneration arrangements is governed by the
Company’s Securities 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. Certain employees designated by the Company are restricted from
trading shares outside a defined set of three trading windows per annum which coincide with the Company’s half and full year
reporting, and the Annual General Meeting. Trading outside these specified windows is prohibited unless Board express approval is
obtained.
Executive incentive plan
The Executive Incentive Plan ('the Plan') forms an integral part of the Group’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 performance
rights ('Rights'),share options ('Options') and/or share appreciation rights (‘SARs’). The Board, based on recommendations from the
Remuneration, People and Culture Committee, approves the participation of each individual ('participant') in the Plan. All Rights,
Options and SARs are issued by Infomedia.
Long term incentive – Performance rights
The Board approves the issue of Rights to eligible employees. The following general terms relate to Rights currently on issue:
●
●
●
●
●
●
●
●
Rights are granted for nil consideration;
The vesting conditions of the Rights are not market related and are 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
Equity Plan Rules;
For Rights issued prior to 2019, participants do not receive dividends until the Rights are exercised and converted into shares.
Rights issued from 2019 onward do not receive dividends, however they carry a right to receive additional shares upon vesting,
equivalent to the value of dividends paid between the grant date and vesting date;
No voting rights are attached to the Rights until the Rights are exercised and converted into fully paid ordinary shares;
Before vesting, the Board will determine the number of Rights to vest based on the outcome of the performance hurdles;
Upon vesting, each Right converts into one Infomedia ordinary share for nil consideration upon exercise by the participants; and
If the vesting conditions are not met then the Rights automatically lapse.
infomedia.com.au 69
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 17. Share-based remuneration (continued)
ANNUAL REPORT 2020
The following performance hurdles and vesting scales apply to the outstanding Rights on issue during the financial year:
Rights granted during the financial year ended 30 June 2017 (CEO and CFO only)
●
●
●
●
●
●
●
Grant dates: 29 January 2016 and 17 February 2016 (being signing dates of service agreements) are deemed grant date for the
CEO and CFO, respectively;
Testing date: Tranche 1: 33% of Rights measured over 1 July 2016-30 June 2017; Tranche 2: 33% of Rights measured over 1
July 2017-30 June 2018; Tranche 3: 33% of Rights measured over 1 July 2018-30 June 2019;
Rights retested on testing date: Tranche 1: Fully vested in FY18, no retesting is required; Tranche 2: Rights measured over 1
July 2017-30 June 2019 (final testing for unvested Rights). 50.5% vesting in FY19;
Performance hurdle: Compound Annual Growth Rate (‘CAGR’) target: Compound EPS Growth percentage above FY16 EPS;
Vesting scale: 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 financial year ending 2021; and
All Rights issued in connection with this plan vested, and were exercised, on 19 August 2019.
Rights granted during the financial year ended 30 June 2017 (other participants)
●
●
●
●
●
Testing date: 1 October 2019;
Rights will be tested for vesting on the testing date. Any unvested Rights will lapse;
Performance hurdle: CAGR target: Compound EPS Growth percentage above FY16 EPS; and
Vesting scale: 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%.
All Rights issued in connection with this tranche vested and were exercised on 1 October 2019.
Rights granted during the financial year ended 30 June 2018
●
●
●
●
●
Testing date: 1 October 2020;
Rights will be tested for vesting on the testing date. Any unvested Rights will lapse;
Performance hurdle: CAGR target: Compound EPS Growth percentage above FY17 EPS;
Vesting scale: 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%; and
The Board has elected to apply discretion in determining the vesting outcome to exclude non-trading income & expenses and the
shares issued in connection with the Placement and Share Purchase Plan in calculating the three-year EPS CAGR.
Rights granted during the financial year ended 30 June 2019
●
●
●
●
Testing date: following release of the Company’s audited FY21 results;
Rights will be tested for vesting and any unvested Rights will lapse;
Performance hurdle: CAGR target: Compound EPS Growth percentage above FY18 EPS; and
Vesting scale: 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%.
Rights granted during the financial year ended 30 June 2020
●
●
●
●
Testing date: Upon release of the Company’s audited FY22 results;
Rights tested on testing date: 100% - if unvested, Rights lapse. Vested Rights may be exercised up to six years after the grant
date;
Performance hurdle: CAGR target: Compound EPS Growth percentage above FY19 EPS; and
Vesting scale: 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 is estimated as at the grant date by reference to the share price in accordance with the applicable
accounting standard (AASB 2 Share-Based Payments).
70 infomedia.com.au
FY20 Financial Report
ANNUAL REPORT 2020
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 17. Share-based remuneration (continued)
The following information relates to the Rights issued under the Plan:
2020
Grant date
Expiry date
01/10/2019
01/10/2019
01/10/2019
01/10/2020
01/10/2021
14/11/2025
29/01/2016
17/02/2016
01/07/2016
04/10/2017
26/11/2018
15/11/2019
2019
Grant date
Expiry date
13/10/2015
29/01/2016
17/02/2016
01/07/2016
04/10/2017
26/11/2018
01/10/2018
01/10/2019
01/10/2019
01/10/2019
01/10/2020
01/10/2021
Fair value
at grant date
Balance at
the start of
the year
$0.53-$0.57
$0.53-$0.57
$0.48
$0.67
$1.00
$2.09
706,671
376,891
403,383
882,578
876,072
-
3,245,595
Fair value
at grant date
Balance at
the start of
the year
$0.75
$0.53-$0.57
$0.53-$0.57
$0.48
$0.67
$1.00
529,000
945,378
504,202
403,383
882,578
-
3,264,541
Granted
Exercised
Lapsed
-
-
-
-
-
61,997
61,997
(706,671)
(376,891)
(403,383)
-
-
-
(1,486,945)
-
-
-
-
-
-
-
Granted
Exercised
Lapsed
-
-
-
-
-
876,072
876,072
-
(238,707)
(127,311)
-
-
-
(366,018)
(529,000)
-
-
-
-
-
(529,000)
Balance at
the end of
the year
-
-
-
882,578
876,072
61,997
1,820,647
Balance at
the end of
the year
-
706,671
376,891
403,383
882,578
876,072
3,245,595
During the year ended 30 June 2020, 1,486,945 Rights vested and were exercised (2019: 366,018). The value attributable to these
Rights at vesting was $2.17 per Right (2019: $1.26 per Right). The value represents the blended variable weighted average price of
Infomedia shares in the four weeks from the vesting dates.
Long term incentive – Share options (CEO and CFO only)
The Group provided the 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.
The key terms of the Options are:
●
●
●
●
●
●
●
Options issued during FY17: the grant dates of 29 January 2016 and 17 February 2016 are the deemed grant date for CEO and
CFO, respectively, reflecting the dates of entering into their services agreements;
Granted for nil issue consideration;
An exercise price of 92.2 cents per option applies;
Each Option entitles the participants to subscribe for one Infomedia ordinary share;
Options will become exercisable when the Company’s share price exceeds 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 either transfer existing shares or issue new ordinary
●
shares to satisfy the allocation; and
The following post vesting disposal restrictions apply: 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 2020
The fair value of the Options granted under the 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.
infomedia.com.au 71
FY20 Financial Report
ANNUAL REPORT 2020
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 17. Share-based remuneration (continued)
The following information relates to the Options issued under the Plan:
2020
Grant date
Expiry date
Fair value
at grant date
29/01/2016
17/02/2016
29/01/2020
17/02/2020
$0.07
$0.07
2019
Grant date
Expiry date
Fair value
at grant date
29/01/2016
17/02/2016
29/01/2020
17/02/2020
$0.07
$0.07
Balance at
the start of
the year
3,750,000
2,000,000
5,750,000
Balance at
the start of
the year
3,750,000
2,000,000
5,750,000
Granted
Exercised
Lapsed
Balance at
the end of
the year
-
-
-
(3,750,000)
(2,000,000)
(5,750,000)
-
-
-
-
-
-
Granted
Exercised
Lapsed
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
3,750,000
2,000,000
5,750,000
During the year ended 30 June 2020 5,750,000 Options vested and were exercised (2019: nil). The value attributable to these Options
at vesting was $2.16 per Option. The value represents the variable weighted average price of Infomedia shares in the four weeks from
the vesting date. An exercise price of 92.2 cents per option was paid by the option holders to the Company at the time of exercise.
No Options were vested and exercisable as at 30 June 2020 (2019: None).
Long term incentive – Share Appreciation Rights (SARs)
The Board approves the issue of SARs to eligible employees. The following general terms relate to SARs currently on issue:
●
●
●
●
●
●
●
SARs reward executives for the growth in Infomedia’s share price between the date of grant and the date of exercise;
SARs are granted for nil issue consideration;
SARs are tested over a three-year performance period and vest proportionally based on the relevant vesting and performance
criteria for each grant;
SARs which do not vest on the relevant testing date automatically lapse. Vested SARs may be exercised up to six years after
the grant date;
Upon exercise, the recipient is entitled to receive, for nil consideration, fully paid ordinary shares in Infomedia which are
equivalent to the growth in Infomedia’s share price over the ‘Reference Price’ calculated for that particular grant, multiplied by
the number of vested SARs. The share price must exceed the Reference Price at the time of exercise;
The ‘Reference Price’ is determined by calculating the variable weighted average share price of Infomedia shares over a Board
specified period, following the release of the Company’s Annual Results (as applicable in the relevant year the SARs are
issued); and
Participants must remain employed at any relevant vesting date, subject to limited exceptions contained in the Plan rules.
SARs granted during the financial year ended 30 June 2020
●
●
●
●
●
●
Grant date: 15 November 2019
Testing date: Upon release of the Company’s audited FY22 results;
Vested SARs may be exercised up to six years after the grant date;
Performance hurdle: CAGR target: Compound EPS Growth percentage above FY19 EPS;
Vesting scale: 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%;
Each vested SAR entitles the Executive KMP to receive the benefit of share price growth over the period between grant and
exercise. Upon exercise Executive KMP receive such number of Shares as determined by the following calculation:
Where:
SAR End Price means the 5-day Volume Weighted Average Price of the Company’s shares up to the day of exercise; and
●
● Reference Price means the 10-day VWAP calculation on the Company’s share price following release of the FY19 results.
The Reference Price in relation to SARs issued in 2019 was $2.1415.
72 infomedia.com.au
32
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 17. Share-based remuneration (continued)
ANNUAL REPORT 2020
The fair value estimate of the SARs granted under the Plan as at the grant date is based on Cox-Ross-Rubinstein binomial lattice
methodology taking into account the term and conditions upon which the SARs were granted.
The estimated value inputs and assumptions used are listed in the table below:
Assumptions
Value
Reference price
Share price
Grant date
Vesting date
Term to expiry
Risk-free rate of interest
Dividend yield
Volatility
$2.1415
$2.0900
15 November 2019
30 June 2022
5.83 years
0.96%
1.87%
38.6%
The risk-free rate of interest represents the 5.83-year zero-coupon interest rate yield at the grant date. Expected volatility was
determined by calculating the annualised standard deviation of the log change in the daily close price of Infomedia's shares over 6
years.
The following information relates to the SARs issued under the Plan.
2020
Grant date
Expiry date
Fair value per
SAR at grant
date
Balance at the
start of the
year
Granted
Exercised
Balance at the
end of the
year
Lapsed
15/11/2019
14/11/2025
$0.65
-
-
2,418,182
2,418,182
-
-
-
-
2,418,182
2,418,182
2019
Grant date
Expiry date
Fair value per
SAR at grant
date
Balance at the
start of the
year
Granted
Exercised
Balance at the
end of the
year
Lapsed
-
-
-
-
-
-
-
-
-
-
-
-
-
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 other vesting conditions have been taken into account.
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.
The total expense for the period arising from equity settled share-based payment transactions is included in note 4.
33
infomedia.com.au 73
FY20 Financial Report
ANNUAL REPORT 2020
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 18. Cash flow information
Reconciliation of profit after income tax to net cash from operating activities
Profit after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Impairment of intangibles
Share-based payments
Foreign exchange differences
Capitalised development costs
Non-cash finance costs
Revaluation of contingent consideration
Change in operating assets and liabilities:
(Increase)/decrease in trade and other receivables
Decrease/(increase) in prepayments
Increase in trade and other payables
Increase/(decrease) in contract liabilities
Increase in provision for income tax
Increase/(decrease) in other provisions
Increase/(decrease) in employee benefits
Increase in deferred tax liabilities
Consolidated
2019
$'000
2020
$'000
18,556
16,122
20,858
-
1,044
(822)
-
708
(521)
(2,807)
(877)
(374)
(208)
1,355
11
667
1,118
16,781
3,367
1,048
113
(754)
1,136
(4,262)
(1,305)
131
1,004
597
2,685
(54)
249
1,571
Net cash from operating activities
38,708
38,429
Non-cash investing and financing activities
During the financial year ended 30 June 2020, Infomedia issued $0.364 million ordinary shares (2019: $1.867 million) as part
payment for purchase of a subsidiary and a business.
Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2018
Balance at 30 June 2019
Recognition of lease liabilities on 1 July 2019 on adoption of AASB 16
Net cash from financing activities
Balance at 30 June 2020
Lease
liabilities
$'000
-
-
6,975
(1,950)
5,025
Loan
$'000
-
-
-
847
847
Total
$'000
-
-
6,975
(1,103)
5,872
74 infomedia.com.au
FY20 Financial Report
ANNUAL REPORT 2020
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 19. 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
Share-based payments
Note 20. 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
Share-based payments reserve
Retained profits
Total equity
Consolidated
2019
$
2020
$
1,737,776
88,101
12,011
351,312
1,924,963
87,977
3,299
523,073
2,189,200
2,539,312
2020
$'000
Parent
2019
$'000
17,352
16,031
17,352
16,031
2020
$'000
Parent
2019
$'000
111,437
21,007
181,748
85,140
17,988
13,051
32,946
24,078
103,192
2,280
43,330
14,790
6,612
39,660
148,802
61,062
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 2020 and 30 June 2019.
infomedia.com.au 75
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
Note 20. Parent entity information (continued)
Contingent liabilities
ANNUAL REPORT 2020
Other than the guarantee below, there were no unrecognised contingent liabilities as at 30 June 2020 and 30 June 2019.
The parent entity has provided bank performance guarantees to a maximum value of $0.908 million (2019: $0.722 million) relating to
the lease commitments on its corporate headquarters and other premises.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 23, 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 21. 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, and unrelated firms:
Deloitte and related network firms
Audit or review of financial reports:
- Group base fee
- Group other fees
Other services:
- Tax compliance services
Other auditors and their related network firms
Audit or review of financial reports:
- Subsidiaries
Other services:
- Tax compliance services
Consolidated
2019
$
2020
$
250,000
50,000
300,000
161,000
12,500
173,500
79,408
44,776
379,408
218,276
20,716
21,738
1,522
1,734
22,238
23,472
Note 22. Basis of preparation and other accounting policies
Infomedia Ltd is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered office and principal
place of business is:
3 Minna Close
Belrose, Sydney NSW 2085
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is not part of
the financial statements.
76 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
ANNUAL REPORT 2020
Note 22. Basis of preparation and other accounting policies (continued)
The financial statements were authorised for issue, in accordance with a resolution of directors, on 24 August 2020. The directors
have the power to amend and reissue the financial statements.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('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.
The financial statements are presented in Australian dollars, which is Infomedia Ltd's functional and presentation currency.
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.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
Interpretation 23 Uncertainty over Income Tax
Refer to note 5 for detailed analysis on the adoption of Interpretation 23 Uncertainty over Income Tax.
AASB 16 Leases
Refer to note 8 for detailed analysis on the adoption of AASB 16 Leases.
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.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Infomedia as at 30 June 2019 and the
results of all subsidiaries for the year then ended.
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.
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.
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.
infomedia.com.au 77
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
ANNUAL REPORT 2020
Note 22. Basis of preparation and other accounting policies (continued)
Trade and other payables
Trade and other payables 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.
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.
Investments and other financial assets
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either
amortised cost or fair value depending on their classification. Classification is determined based on both the business model within
which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is
being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the Group has
transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation of recovering part or all of a
financial asset, it's carrying value is written off.
Financial assets at amortised cost
A financial asset is measured at amortised cost only if both of the following conditions are met: (i) it is held within a business model
whose objective is to hold assets in order to collect contractual cash flows; and (ii) the contractual terms of the financial asset
represent contractual cash flows that are solely payments of principal and interest.
Impairment of financial assets
The Group recognises a loss allowance for expected credit losses on financial assets which are either measured at amortised cost or
fair value through other comprehensive income. The measurement of the loss allowance depends upon the Group's assessment at
the end of each reporting period as to whether the financial instrument's credit risk has increased significantly since initial recognition,
based on reasonable and supportable information that is available, without undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit loss
allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default event
that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined that credit
risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of expected
credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash shortfalls over the life of
the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised in
other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance reduces the
asset's carrying value with a corresponding expense through profit or loss.
Financial costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in the period in
which they are incurred.
78 infomedia.com.au
FY20 Financial Report
Infomedia Ltd
Notes to the consolidated financial statements
30 June 2020
ANNUAL REPORT 2020
Note 22. Basis of preparation and other accounting policies (continued)
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.
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 2020. 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.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and early adoption
is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new guidance on measurement
that affects several Accounting Standards. Where the Group has relied on the existing framework in determining its accounting
policies for transactions, events or conditions that are not otherwise dealt with under the Australian Accounting Standards, the Group
may need to review such policies under the revised framework. At this time, the application of the Conceptual Framework is not
expected to have a material impact on the Group's financial statements.
infomedia.com.au 79
Directors’ Declaration
In the directors' opinion:
ANNUAL REPORT 2020
●
●
●
●
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 21 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 2020 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
24 August 2020
80 infomedia.com.au
Deloitte Touche Tohmatsu
A.B.N. 74 490 121 060
Grosvenor Place
225 George Street
Sydney NSW 2000
PO Box N250 Grosvenor Place
Sydney NSW 1220 Australia
DX 10307SSE
Tel: +61 (0) 2 9322 7000
Fax: +61 (0) 2 9322 7001
www.deloitte.com.au
Independent Auditor’s Report to the members of
Infomedia Ltd.
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Infomedia Ltd (the “Company”) and its subsidiaries (the
“Entity”) which comprises the consolidated statement of financial position as at 30 June 2020, the
consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then ended,
and notes to the financial statements, including a summary of significant accounting policies and
other explanatory information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Entity is in accordance with the Corporations
Act 2001, including:
(i)
giving a true and fair view of the Entity’s financial position as at 30 June 2020 and of its
financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Entity in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance
with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of the Company, would be in the same terms if given to the directors as
at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report for the current period. These matters were addressed in the
context of our audit of the financial report as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Liability limited by a scheme approved under Professional Standards Legislation.
Member of Deloitte Asia Pacific Limited and the Deloitte Network.
infomedia.com.au 81
Key Audit Matter
Capitalised labour development costs
As at 30 June 2020, the Entity’s carrying
value of the product and software
development costs capitalised as
intangibles totalled $44.6m of which
$21.9m is attributable to capitalisation in
the current financial year as disclosed in
Note 6.
Judgement is involved in determining the
quantum of labour costs directly attributable
to develop the Entity’s product suite and
software.
Contingent Consideration
As at 30 June 2020, the Entity has an
contingent consideration liability of $3.7m
which relates to its acquisition of Nidasu in
FY19.
Payments will be made to the seller if agreed
net profit hurdles are met in future periods.
Judgment is involved in forecasting these
cash flows and the discount rate applied in
calculating the best estimate of the amount
expected to settle the obligation.
How the scope of our audit responded to the
Key Audit Matter
Our procedures included, but were not limited to:
• Holding discussions with department
heads involved in product development to
understand the basis and rationale for
capitalising labour costs associated with
key projects;
•
Testing on a sample basis, capitalised
labour costs through reviewing timesheets
and holding discussions with staff
members outside the finance department;
• Assessing whether that all eligible
employees are included and ineligible
employees are excluded in the
calculations, where appropriate;
• Challenging management’s key
assumptions in the labour capitalisation
calculation and estimated useful life; and
•
Testing the mathematical accuracy of
management’s labour capitalisation
schedule.
We also assessed the appropriateness of the
disclosure in Note 6 to the financial statements.
Our procedures included, but were not limited to:
• Assessing management's contingent
consideration calculations against the net
profit hurdle stipulated in the signed share
purchase agreement;
• Challenging the reasonableness of key
assumptions included in the forecast cash
flows including:
o Comparing historical budget
forecasts against actual results;
o Comparing forecast growth to
business plans approved by the
Board; and
o Performing sensitivity analysis on
the revenue growth assumptions
to assess the impact on the
forecasted cash flow.
• Recalculating the interest expense related
to the net present value of contingent
consideration;
•
Testing the mathematical accuracy of
management’s contingent consideration
calculation; and
• Assessing the accuracy of the
classification of current and non-current
contingent consideration liability disclosed.
We also assessed the appropriateness of the
disclosure in Note 15 to the financial statements.
82 infomedia.com.au
Research and development (‘R&D’) tax
incentive
The Company’s self-assessed R&D tax
incentive during the 2020 financial year was
$7.1m.
Under review is the Entity’s 2016 R&D claim,
AusIndustry is of the opinion that a portion
the Entity’s 2016 R&D claims related to
activities that were ‘ineligible R&D activities’
which would not be eligible for R&D tax
incentive. The potential exposure to the
Company for the 2016 income year is is tax
of $0.78m and interest of approximately
$0.3m to 30 June 2020.
The Company has appointed an external
tax expert and on the 17th of August 2020
submissions
has made
to AusIndustry in support of the R&D
tax incentive claims made with respect to
the 2016 financial year.
the necessary
Our procedures included, but were not limited to:
•
•
•
•
Assessing the professional competence,
objectivity and experience of
management’s external tax expert;
Engaging in discussions with
management’s external expert with our
internal R&D tax experts to assess the
appropriateness of management’s
assessment and proposed submission
relating to the 2016 claim under review;
Reading, understanding and challenging
the proposed submissions made by
management to substantiate eligibility of
research and development expenditures to
AusIndustry; and
Evaluating the appropriateness of
implementation of the relevant tax
regulation and Interpretation 23 –
Uncertainty over Income Tax Treatments
with respect to research and development
expenditure tax credits.
We also assessed the appropriateness of the
disclosure relating to this matter in Note 5 to the
financial statements.
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Entity’s annual report for the year ended 30 June 2020, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If,
based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of
the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Entity
to continue as a going concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to liquidate the Entity or to
cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
infomedia.com.au 83
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk
of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as
intentional omissions,
involve collusion,
fraud may
misrepresentations, or the override of internal control.
forgery,
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Entity’s internal control.
•
•
•
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Entity’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial
report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Entity to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 19 to 34 of the Directors’ Report for
the year ended 30 June 2020.
In our opinion, the Remuneration Report of Infomedia Ltd, for the year ended 30 June 2020, complies
with section 300A of the Corporations Act 2001.
84 infomedia.com.au
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
DELOITTE TOUCHE TOHMATSU
Pooja Patel
Partner
Chartered Accountants
Sydney, 24 August 2020
infomedia.com.au 85
Shareholder Information
ANNUAL REPORT 2020
Shareholder information – as at 14 August 2020
The following information is presented in compliance with ASX Listing Rules 4.10 (as relevant). The information is
current as at 14 August 2020.
1. NUMBER OF SHAREHOLDERS
As at 14 August 2020 there were 5,610 shareholders holding a total of 374,457,626 fully paid ordinary shares
2. DISTRIBUTION OF QUOTED EQUITY SECURITIES & SMALL HOLDINGS
Range
100,001 and Over
10,001 to 100,000
5,001 to 10,000
1,001 to 5,000
1 to 1,000
Total
Unmarketable Parcels
Fully Paid Ordinary Shares
%
No. of holders
319,529,078
41,257,512
7,268,774
5,783,719
618,543
85.31
11.04
1.94
1.55
0.16
374,457,626
100.00
11,708
0.00
107
1,419
925
2,075
1,084
5,610
199
%
1.91
25.29
16.49
36.99
19.32
100.00
3.55
3. TOP 20 REGISTERED SHAREHOLDERS
Rank
Name
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
CITICORP NOMINEES PTY LIMITED
BELL POTTER NOMINEES LTD
BNP PARIBAS NOMINEES PTY LTD
BNP PARIBAS NOMS PTY LTD
PACIFIC CUSTODIANS PTY LIMITED
INVIA CUSTODIAN PTY LIMITED
MR JONATHAN RUBINSZTEIN
MIRRABOOKA INVESTMENTS LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR RICHARD LEON
NATIONAL NOMINEES LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
POWERWRAP LIMITED
CITICORP NOMINEES PTY LIMITED
MR PETER ALEXANDER BROWN
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
20
JONATHAN LEONARD SCHARRER
14 Aug 2020
%IC
108,230,116
28.90
56,951,523
28,747,588
28,113,092
25,478,884
13,940,973
8,285,318
5,142,752
3,649,841
3,313,067
3,130,008
2,904,184
2,895,302
1,910,982
1,903,016
1,816,066
1,576,587
1,350,000
1,319,149
1,059,689
15.21
7.68
7.51
6.80
3.72
2.21
1.37
0.97
0.88
0.84
0.78
0.77
0.51
0.51
0.48
0.42
0.36
0.35
0.28
Total
301,718,137
80.57
86 infomedia.com.au
Shareholder Information
4. SUBSTANTIAL SHAREHOLDERS
ANNUAL REPORT 2020
The share balances in this table are extracted from substantial shareholder notices received by the Company.
Rank
Shareholder
1
2
3
4
Viburnum Funds Pty Ltd ACN 126 348 990
Selector Funds Management Limited ACN 102 756 347
Wilson Asset Management Group
Eley Griffiths Group Pty Limited ACN 102 271 812
Number of
shares
40,937,728
29,777,167
24,034,732
18,686,853
Voting Power
Date of last notice
10.93%
8.15%
6.42%
5.12%
30.62%
5 June 2020
29 April 2020
5 June 2020
20 May 2020
Total
5. UNQUOTED EQUITY SECURITIES
Unquoted Share Appreciation Rights
Number on issue
Number of holders
Employees
Directors
Unquoted Performance Rights
Employees
Directors
6. ESCROWED SECURITIES
Class
Fully Paid Ordinary Shares
Fully Paid Ordinary Shares
7. VOTING RIGHTS
2,418,182
-
1,820,647
-
Number
608,696
195,528
24
-
28
-
Escrow End Date
13 December 2021
31 March 2022
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 Appreciation Rights and Performance Rights: No voting rights apply unless and until the unquoted
securities are converted to Fully Paid Ordinary Shares.
8. SHARE BUY-BACK
Infomedia Ltd does not have a current on-market buy-back in operation.
9.
SHARES PURCHASED ON-MARKET
During the reporting period 30,917 shares were purchased on-market to satisfy vested share options or performance
rights granted in connection with employee incentive schemes. The average purchase price was $2.04 per share.
10. CORPORATE GOVERNANCE STATEMENT
Infomedia’s 2020 Corporate Governance Statement may be found by visiting http://www.infomedia.com.au/governance
infomedia.com.au 87
Additional Information
CORPORATE DIRECTORY
INFOMEDIA LTD (ASX:IFM)
ABN 63 003 326 243
DIRECTORS
Bart Vogel – Non-Executive Chairman
Jonathan Rubinsztein – CEO & Managing Director
Kim Anderson
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
ANNUAL REPORT 2020
ANNUAL GENERAL MEETING 2020
The 2020 Annual General Meeting of Infomedia will
be held on Wednesday, 11 November. The meeting will
take place virtually, owing to the ongoing COVID-19
pandemic. A formal Notice of Meeting will be released
in October.
FINANCIAL CALENDAR (2021)
FINANCIAL HALF YEAR END
31 December 2020
FINANCIAL HALF YEAR
RESULTS ANNOUNCEMENT
25 February 2021*
FINANCIAL YEAR END
30 June 2021
FINANCIAL YEAR END
RESULTS ANNOUNCEMENT
24 August 2021*
ANNUAL GENERAL MEETING
16 November 2021*
* Please note dates are subject to change. Any changes will be
published via a notice to the Australian Securities Exchange (ASX).
GLOSSARY
APAC
Cash EBITDA
cps
FY20
EBITDA
EMEA
NPAT
OEM
pcp
SaaS
VIN
Sales region covering the area of
the Asia Pacific
Cash earnings; identifies the cash
impact of investing in development
costs that are capitalised. Cash EBITDA
is a key internal metric for Infomedia
Cents per share
The financial year from 1 July 2019 to
30 June 2020
Earnings before interest, tax,
depreciation and amortisation
Sales region covering the area of
Europe, Middle East and Africa
Net profit after tax
Original equipment manufacturer
Previous corresponding period
Software as a Service
Vehicle identification number
All statements other than statements of historical fact included within this report, 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 report 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.