069.ASX IAW Feb 26 2010 11.09 Half Yearly Report and Accounts
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Transcript of 069.ASX IAW Feb 26 2010 11.09 Half Yearly Report and Accounts
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8/10/2019 069.ASX IAW Feb 26 2010 11.09 Half Yearly Report and Accounts
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INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194
ASXAppendix4D
RESULTSFORANNOUNCEMENTTOTHEMARKET
Currentreportingperiod: Halfyearended31December2009
Previouscorrespondingperiod: Halfyearended31December2008
EARNINGS
Percentage
change
UP(+)/DOWN()
Amount
$A
Revenuefromordinaryactivities +53% 11,588,400
Profitfromordinaryactivitiesaftertaxattributable
tomembers
21% 711,069
Netprofitfortheperiodattributabletomembers 21% 711,069
DIVIDENDS
Amount
pershare
Frankedamount
pershareat30%
2010Interimdividend 0.25cents 0.25cents
Correspondingperiod
Recorddate
for
determining
entitlements
to
the
2010interimdividend 10March2010
Paymentdateforthe2010interimdividend 9April2010
TheCompanyoperatesadividendreinvestmentplan(DRP). Furtherdetailsaredisclosedin
theinterimdividenddetailssectionofthisreport.
DRPdiscountrate 5%
LastdateforreceiptofDRPelectionnoticesforthe
2010interimdividend 24March2010
NETTANGIBLEASSETBACKING
31Dec2009
31Dec2008
Nettangibleassetbackingpersecurity 5.87 7.36
Consolidated operating revenues of $11,588,400 were 53% higher than the previous
correspondinghalfyearperiodof$7,593,136operatingrevenues. Revenuefromordinary
activities increased due to a combination of organic growth and acquisitions of new
memberfirms.
Inrespectof the previous comparative period, the Directorshavepreviously advisedthat
expenses
have
necessarily
increased
for
the
Company
during
the
period
reflecting
a
required change to Foundation Principals remuneration from the artificially low and non
competitive levels established at the time of public listing in August 2007, and from
increasesinWAmemberfirmpremisescostsfollowingbelowmarketrentarrangementsin
2008.
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INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194
ASXAppendix4D
RESULTSFORANNOUNCEMENTTOTHEMARKET
The Directors consider the current period to better reflect a more normalised operating
profitabilityandmargin.
Thefollowingtablesummarisesresultsfortheperiod,theFullYear2008/09,andeachof
thehalfyearsof2008/09.
RESULTSSUMMARY
FirstHalf
2009/10
$000s
FullYear
2008/09
$000s
SecondHalf
2008/09
$000s
FirstHalf
2008/09
$000s
OperatingRevenue 11,588 16,946 9,353 7,593
NetProfit(Loss)afterTax 711 594 (302) 896
Earnings(Loss)perShare 1.03cents 0.89cents (0.49)cents 1.38cents
DividendperShare 0.25cents Nil Nil Nil
OperatingCashFlows(Outflows) 190 (1,652)* (2,016)* 365
Gearing(Netdebt/Equity) 13% 12% 12% 0%
*Relatestofundingofworkingcapitalfornewacquisitions.
Forthehalfyearended31December2009,theconsolidatedentitygeneratedanetprofit
aftertaxof$711,069comparedtoanetlossaftertaxof$302,828forthehalfyearended
30June
2009,
a
full
year
2008/09
net
profit
after
tax
of
$593,875,
and
a
half
year
ended
31
December2008netprofitaftertaxof$896,703.
Earningspersharefortheperiodwere1.03centspershare,comparedtotheyearended
30June2009of0.89cents(30June2009halfyear:negative0.49cents;31December2008
halfyear:1.38cents).
TheGroup hasdeclared afully franked interimdividend of 0.25 centswith respect tothe
financialyearended30June2010. Thedividendwillhavearecorddateof10March2010
and a payment date of 9 April 2010. The Group operates a dividend reinvestment plan.
The Directors of Integrated Legal Holdings Limited have advised of their intended full
participationin
the
interim
dividend
reinvestment
plan.
During the period, the Company requested an amendment to its 2008 income tax return
arising from the tax treatment of work in progress. The amendment resulted in a tax
refund of $325,306, constituting a reversal of income tax expense previously disclosed in
theIncomeStatement.Thereversalhasdirectlyincreasedprofitabilityfortheperiod.
Thegroupdoesnothaveanyinterestsinassociatesoutsidethegroup,nordoesithaveany
interestinjointventures.
Further information is included in the Directors Report within the HalfYear Financial
Report.
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INTEGRATEDLEGALHOLDINGSLIMITED
ACN120
394
194
(ASX:IAW)
HalfYearFinancialReport
forthehalfyearended31December2009
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
Contents
Corporateinformation.............................................................................................................1
Directorsreport......................................................................................................................2
Consolidatedstatementoffinancialposition..........................................................................6
Consolidatedstatementofcomprehensiveincome................................................................7
Consolidatedstatementofchangesinequity.........................................................................8
Consolidatedstatementofcashflows.....................................................................................9
Notesto
and
forming
part
of
the
financial
report
.................................................................
10
Directorsdeclaration............................................................................................................24
Auditorsindependencedeclaration.....................................................................................25
Independentauditorsreviewreport....................................................................................26
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
CorporateInformation
1
ABN20
120
394
194
Directors
TheHonJohnDawkins,Chairman
AnneTregonning,NonexecutiveDirector
GraemeFowler,ManagingDirector
CompanySecretary
JeanMarieRudd
Registeredoffice
Level8,
Wesfarmers
House
40TheEsplanade
PerthWA6000
Principalplaceofbusiness
HeadOffice
Level22
1MarketStreet
SydneyNSW2000
Tel:(02)82636601
Share
Register
ComputershareInvestorServicesPtyLimited
Level2,45StGeorgesTerrace
PerthWA6000
Tel: (08)93232000
IntegratedLegalHoldingsLimitedsharesarelistedontheAustralianStockExchange.
Solicitors
TalbotOlivier
Level8,WesfarmersHouse
40
The
Esplanade
PerthWA6000
Bankers
NationalAustraliaBankLimited
100StGeorgesTerrace
PerthWA6000
Auditors
Ernst&Young
11MountsBayRoad
Perth
WA
6000
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
DirectorsReport
2
The
directors
of
Integrated
Legal
Holdings
Limited
(the
Company)
submit
the
halfyear
financial
reportforthehalfyearended31December2009.
DIRECTORS
ThenamesoftheCompanysdirectorsinofficeduringthehalfyearanduntilthedateofthisreport
aresetoutbelow. Directorswereinofficeforthisentireperiodunlessotherwisestated.
TheHonJohnDawkinsAO(NonexecutiveChairman)
AnneTregonning(NonexecutiveDirector)
GraemeFowler(ManagingDirector)
REVIEWAND
RESULTS
OF
OPERATIONS
Consolidatedoperatingrevenuesof$11,588,400were53%higherthanthepreviouscorresponding
halfyearperiodof$7,593,136operatingrevenues. Revenuefromordinaryactivities increaseddue
toacombinationoforganicgrowthandacquisitionsofnewmemberfirms.
Forthehalfyearended31December2009,theconsolidatedentitygeneratedanetprofitaftertax
of$711,069comparedtoanetlossaftertaxof$302,828forthehalfyearended30June2009,a
fullyear2008/09netprofitaftertaxof$593,875,andahalfyearended31December2008netprofit
aftertaxof$896,703.
Earnings per share for the period were1.03 centspershare, compared to the year ended 30 June
2009
of
0.89
cents
(30
June
2009
half
year:
negative
0.49
cents;
31
December
2008
half
year:
1.38
cents).
Operating cash flows for the period were positive at $190,142, compared with operating cash
outflows (negative) for the full year 2008/09 (as the working capital requirements of new
acquisitionswereabsorbed).
RESULTSSUMMARY
FirstHalf
2009/10
$000s
FullYear
2008/09
$000s
SecondHalf
2008/09
$000s
FirstHalf
2008/09
$000s
OperatingRevenue
11,588
16,946
9,353
7,593
NetProfit(Loss)afterTax 711 594 (302) 896
Earnings(Loss)perShare 1.03cents 0.89cents (0.49)cents 1.38cents
DividendperShare 0.25cents Nil Nil Nil
OperatingCashFlows(Outflows) 190 (1,652)* (2,016)* 365
Gearing(Netdebt/Equity) 13% 12% 12% 0%
*Relatestofundingofworkingcapitalfornewacquisitions.
Inrespectofthepreviouscomparativeperiods,theDirectorshavepreviouslyadvisedthatexpenses
have necessarily increased for the Company during the period, reflecting a required change to
FoundationPrincipalsremunerationfromtheartificiallylowandnoncompetitivelevelsestablished
atthe
time
of
public
listing
in
August
2007,
and
an
increase
in
WA
premises
rental
following
below
marketrentin2008.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
DirectorsReport
3
TheDirectors
consider
the
current
period
to
better
reflect
a
more
normalised
operating
profitability
andmargin.
The Company has maintained a strong balance sheet with bank loans of $1.85m at 31 December
2009. Thisrepresentsagearing levelof12%. TheCompanysexistingworkingcapitalbankfacility
hasalimitofupto$3.35m.
Duringtheperiod,theCompanyrequestedanamendmenttoits2008incometaxreturnarisingfrom
the tax treatment of work in progress. The amendment resulted in a tax refund of $325,306,
constituting a reversal of income tax expense previously disclosed in the Income Statement. The
reversalhasdirectlyincreasedprofitabilityfortheperiod.
The Group hasdeclared a fullyfranked interimdividendof0.25cents with respect tothe financial
year ended30 June 2010. The dividendwill have a record date of 10 March 2010 and a payment
dateof9April2010. TheGroupoperatesadividendreinvestmentplan. TheDirectorsofIntegrated
Legal Holdings Limited have advised of their intended full participation in the interim dividend
reinvestmentplan.
TheDirectorsarepleasedwiththefirsthalfresultsandwiththecontinuedoperationalprogressthat
hasbeenmade.
Theperiodwashighlightedbyoperationalconsolidation,followingthestrongorganicandacquisition
growth
experienced
by
the
Company
over
the
previous
18
months.
The
Companys
acquisitions
in
2009wereverylargerelativetotheexistingbusiness.
TheDirectorsarepleasedtoreportthatthese2009acquisitionsareperformingwell.
TheArgyleLawyersbusinessinSydneyandMelbourne,andthemdalawyerstuckinacquisition,are
proving to be good businesses. Growth in Argyle Lawyers has been solid including several high
quality new staff appointments in the first half. This includes the return of former Argyle Lawyers
PartnerandInsolvencyandCorporateRecoverylawyer,MarkPetrucco.
TheDirectorsalsoreportthattheCompanyhasexperiencedsomeimprovedperformanceinitsLaw
Central
business,
following
the
significant
drop
in
demand
for
services
in
the
2008/09
financial
year
asaresultoftheGlobalFinancialCrisis(GFC).
LawCentralisaninternetbasedcustomisedlegaldocumentpublishingandinformationservice.
The effects of the GFC did however continue for the Company during the period. Conditions
remained challenging in parts ofthe business and some services werebehindexpectations for the
firsthalf,andthishascontinuedintotheearlymonthsofthesecondhalf.
Our Perth businesses in particular underperformed against expectations in some service lines and
thiswilltempertheCompanysperformanceinthe2009/10year.
Wearealsocontinuingtoexperiencesomebaddebtsfromclientbankruptcies,andsuspectthismay
continueforawhilelonger.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
DirectorsReport
4
OUTLOOKTheDirectors notetheirexpectation of continuedoperational improvementfrommember firms in
theperiodsahead.
In particular, the Directors believe that there is significant room for improvement in cash flow
managementinmemberfirmswhichwouldhavetheeffectofloweringthecarryingvalueofworkin
progressanddebtors,andincreasingcashresources.
TheDirectorsconsidertheCompanytobewellplacedforthefuture,inparticularnoting:
TheCompanyhasgoodbusinesseswithstrongmarketpositionsandgrowthprospects.
The Company is successfully building a strong culture of likeminded people with common
aspirationsforabovemarketgrowth,businessimprovementandworkingtogether.
The Company has demonstrated an ability to achieve strong and consistent revenue growth.
IntegratedLegalHoldingsLimitedwasnominatedthefastestgrowinglegalfirmbyfeeincomein
Australiain2009byAustralasianLegalBusiness(December2009).
Scopeforbusinessperformanceimprovementinallmemberfirms,providinganopportunityfor
theCompanytoincreaseprofitabilityovertime.
Organicand
acquisition
growth
opportunities
for
the
Group
and
for
member
firms.
Opportunitytoincreaseprofitabilitybyachievingincreasedscale:
- Atagrouplevelthismeanssecuringadditionalmemberfirmstosharethefixedoverheadof
Corporate;and
- At amember firm level, thismeansachieving organicand acquisition growth to more fully
utiliseexistingpremises,andtoshareinfrastructurecostsofthefirms.
Law firm revenue isgenerally not recurring in nature and demand in certain services, business
and
locations
will
fluctuate
over
time.
The
Group
is
currently
reliant
on
a
small
number
of
businesses and as such can be exposed to the underperformance of any one of them. The
creationofamorediversifiedportfolioofbusinessesbytheCompanyovertimewillultimately
havetheeffectofprovidingimprovedearningsconsistency.
The Directors advise that the delivery of the Companys stated strategy of developing a national
network of leading medium sized law firms will take time. The Company remains focused on
incrementallyandselectivelybuyinggoodbusinesses,andworkingwiththemtowardsabovemarket
growth,businessimprovementandGroupsynergies.
Progress for the Company has been slowed by the economic events of the last two years, but the
Directorsbelieve
the
Company
has
made
progress
and
has
good
medium
to
longer
term
prospects.
The Directors have previously advised that they expect Company revenue for 2009/10 of at least
$21m,andgrowthinNetProfitafterTaxandearningspershare.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
DirectorsReport
5
TheDirectors
are
of
the
view
that
the
Company
is
well
placed
to
continue
growth
both
organically
and by acquisition by capitalising on the significant opportunity afforded by prevailing industry
issues. Longterm competitiveadvantage canbeachieved bytheCompany insupportingmember
firmsindevelopingscaletounderpinfuturegrowthandprofitability.
The Directors are confident in the longer term outlook of the Company given the strength and
underlyingqualityoftheexistingmemberfirms,thesignificantpotentialtogroworganically,andthe
opportunities for selective acquisition growth as part of the strategy of developing a national
networkoflegalservicesbusinesses.
AUDITORSINDEPENDENCE
DECLARATION
A copy of the auditors independence declaration in relation to the review for the halfyear is
providedwiththisreportonpage25.
Signedinaccordancewitharesolutionofthedirectors.
GFowler
ManagingDirector
Perth,25February2010
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
StatementofFinancialPosition
TheaboveconsolidatedStatementofFinancialPositionshouldbereadinconjunctionwiththe
accompanyingnotes.
6
Consolidated Consolidated
Note
Asat
31Dec2009
Asat
30June2009
ASSETS $ $
Currentassets
Cashandcashequivalents 5 249,796 600,694
Tradeandotherreceivables 5,446,927 4,964,957
Prepayments 6 473,099 651,276
Workinprogress 2,195,555 1,370,212
Totalcurrentassets 8,365,377 7,587,139
Noncurrentassets
Availableforsalefinancialassets 2,794 2,677
Plantandequipment 1,297,182 691,360
Goodwill 7 10,421,239 10,372,263
Intangibleassets 8 83,160 100,980
Deferredtaxassets 315,575 464,147
Prepayments 6 56,456 63,016
Totalnoncurrentassets 12,176,406 11,694,443
TOTALASSETS 20,541,783 19,281,582
LIABILITIES
Currentliabilities
Tradeandotherpayables 2,010,310 1,738,222
Interestbearingloansandborrowings 9 1,329,168 1,244,330
Incometaxpayable 58,720 157,011
Provisions 491,886 459,466
Otherliabilities 10 426,811 200,000
Totalcurrentliabilities 4,316,895 3,799,029
Noncurrentliabilities
Tradeandotherpayables 75,107
Interestbearing
loans
and
borrowings
9
1,208,443
1,064,105
Provisions 190,901 177,620
Otherliabilities 10 168,852 378,422
Totalnoncurrentliabilities 1,643,303 1,620,147
TOTALLIABILITIES 5,960,198 5,419,176
NETASSETS 14,581,585 13,862,406
EQUITY
Contributedequity 11 30,512,821 30,504,813
Accumulatedlosses (16,657,078) (16,641,034)
Reserves 12 725,842 (1,373)
TOTALEQUITY
14,581,585
13,862,406
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
StatementofComprehensiveIncome
TheaboveconsolidatedStatementofComprehensiveIncomeshouldbereadinconjunctionwiththe
accompanyingnotes.
7
Consolidated Consolidated
Note
Halfyear
ended
31Dec2009
Halfyear
ended
31Dec2008
$ $
Professionalfeesrevenue 11,566,053 7,203,303
Interestrevenue 11,996 139,068
Otherrevenue 4 10,351 250,765
Totalrevenue 11,588,400 7,593,136
Occupancyexpenses
1,054,668
644,543
Salariesandemployeebenefitsexpenses 7,798,695 4,186,881
Depreciationandamortisationexpenses 151,887 74,235
Officeexpenses 1,769,227 1,146,455
Advertisingandmarketingexpenses 118,382 149,086
Otherexpenses 36,192 84,487
Interestexpenses 87,360 12,477
Totalexpenses 11,016,411 6,298,164
Profitbeforeincometax 571,989 1,294,972
Incometaxexpense/(benefit) (139,080) 398,269
Profitafterincometax 711,069 896,703
Netprofit
for
the
period
711,069
896,703
Othercomprehensiveincome
Netgains/(losses)onavailableforsalefinancialassets 102 (177)
Othercomprehensiveincomefortheperiod,netoftax 711,171 896,526
Totalcomprehensiveincomefortheperiod 711,171 896,526
Basicanddilutedearningspershareforprofit
attributabletotheordinaryequityholderoftheparent 1.03 1.38
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
StatementofChangesinEquity
TheaboveconsolidatedStatementofChangesinEquityshouldbereadinconjunctionwiththe
accompanyingnotes.
8
CONSOLIDATED
Issued
Capital
Accumulated
Losses
Net
Unrealised
GainsReserve
General
Reserve
Total
Equity
$ $ $ $ $
At1July2008 29,729,975 (15,823,844) (1,485) 13,904,646
Profitfortheperiod 896,703 896,703
Othercomprehensive
income (177) (177)
Totalcomprehensive
incomefortheperiod 896,703 (177) 896,526
Transactionswithowners
intheircapacityasowners
Sharesissued (1,411,065) (1,411,065)
Transactioncostsonshare
issue 580,000 580,000
Sharebasedpayments 7,518 7,518
Balanceasat31December
2008 30,317,493 (16,338,206) (1,662) 13,977,625
CONSOLIDATED
Issued
Capital
Accumulated
Losses
Net
Unrealised
GainsReserve
General
Reserve
Total
Equity
$ $ $ $ $
At1July2009 30,504,813 (16,641,034) (1,373) 13,862,406
Profitfortheperiod 711,069 711,069
Othercomprehensive
income 102 102
Totalcomprehensive
incomefortheperiod 711,069 102 711,171
Transactionswithowners
intheircapacityasowners
Transfertogeneralreserve (727,113) 727,113
Transactioncostsonshare
issue (1,694) (1,694)
Sharebasedpayments 9,702 9,702
Balanceasat31December
2009 30,512,821 (16,657,078) (1,271) 727,113 14,581,585
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
CashFlowStatement
TheaboveconsolidatedCashFlowStatementshouldbereadinconjunctionwiththeaccompanying
notes.
9
Consolidated Consolidated
Note
Halfyear
ended
31Dec2009
Halfyear
ended
31Dec2008
$ $
Cashflowsfromoperatingactivities
Receiptsfromcustomers 11,408,374 6,411,856
Paymentstosuppliersandemployees (11,371,200) (6,397,647)
Interestreceived 11,996 140,016
Rentreceived 108,597
Sundryincome
10,337
103,141
Interestandothercostsoffinancepaid (58,718) (1,277)
Incometaxrefund 189,361
Netcashflowsfromoperatingactivities 190,150 364,686
Cashflowsfrominvestingactivities
Purchaseofplantandequipment (743,040) (117,749)
Proceedsfromthedisposalofplantandequipment 3,150 1,353
Paymentforacquisitionofbusinessesnetofcash
acquired 15 (2,137,552)
Netcashflowsusedininvestingactivities (739,890) (2,253,948)
Cashflowsfromfinancingactivities
Paymentforshareissueexpenses (1,694)
Proceedsfromborrowings 674,664 81,484
Repaymentsofborrowings (410,767) (159,889)
Paymentofdividends (1,411,065)
Netcashflows(usedin)/fromfinancingactivities 262,203 (1,489,470)
Netdecreaseincashheld (287,537) (3,378,732)
Cashandcashequivalentsatthebeginningofthe
period 465,875 5,626,766
Cashand
cash
equivalents
at
the
end
of
the
period
5
178,338
2,248,034
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
10
1)
CORPORATEINFORMATION
ThegeneralpurposecondensedfinancialreportofIntegratedLegalHoldingsLimited(theCompany)
forthehalfyearended31December2009wasauthorisedforissueinaccordancewitharesolution
oftheDirectorson25February2009. IntegratedLegalHoldingsLimitedisacompanyincorporated
inAustraliaandlimitedbyshares,whicharepubliclytradedontheAustralianStockExchange(ASX).
2)
SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES
The halfyear financial report does not include all notes of the type normally included within the
annualfinancialreportandthereforecannotbeexpectedtoprovideasfullanunderstandingofthe
financial performance, financial position and financing and investing activities of the consolidated
entityas
the
full
financial
report.
Itisrecommendedthatthehalfyearfinancialreportbereadinconjunctionwiththeannualreport
fortheyearended30June2009andconsideredtogetherwithanypublicannouncementsmadeby
IntegratedLegalHoldingsLimitedanditscontrolledentities(theGroup)duringthehalfyearended
31 December 2009 inaccordance with the continuousdisclosure obligations undertheASXListing
Rules.
a)
Basisofpreparation
This general purpose condensed financial report for the halfyear ended 31 December 2009 has
been prepared in accordance with AASB 134 InterimFinancialReporting and the CorporationsAct
2001.
Thehalfyearfinancialreport isprepared inAustraliandollarsandonahistoricalcostbasis,except
foravailableforsaleinvestments,whichhavebeenmeasuredatfairvalue.
For the purposes of preparing the halfyear financial report, the halfyear has been treated as a
discretereportingperiod.
b) Significantaccountingpolicies
Apart from the changes in accounting policy noted below, the accountingpolicies and methods of
computationarethesameasthoseadoptedinthemostrecentannualfinancialstatements.
c) Changesinaccountingpolicy
From 1 July 2009, the Group has adopted all Australian Accounting Standards and Interpretations,
mandatoryforannualperiodsbeginningonorafter1July2009. Adoptionofthesestandardsand
interpretationsdidnothaveaneffectonthefinancialpositionorperformanceoftheGroup,except
forthefollowing:
AASB8OperatingSegments
ThestandardreplacesAASB114SegmentReportingandrequiresamanagementapproach
tobe used for segmentreporting andalsoreplacestherequirement todetermineprimary
(business) and secondary (geographical) reporting segments of the Group. This approach
identifies
operating
segments
by
reference
to
internal
reports
that
are
evaluated
regularly
bythechiefoperatingdecisionmakerindecidinghowtoallocateresourcesandinassessing
performance. TheGroupconcludedthattheoperatingsegmentsdeterminedinaccordance
withAASB8arethesameasthebusinesssegmentsreportedunderAASB114.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
11
AASB101
Presentation
of
Financial
Statements
(revised)
The revised standard separates owner and nonowner changes in equity and requires a
statement of comprehensive income to be prepared which discloses all changes in equity
during a period resulting from nonowner transactions. The Group has elected to present
comprehensiveincomeusingthesinglestatementapproach.
AASB3BusinessCombinations(revised)
The revised AASB 3 applies the acquisition method to account for business combinations.
Under thismethodallpaymentstopurchaseabusinessaretoberecordedatfairvalueat
theacquisitiondate,withcontingentpaymentsclassifiedasdebtsubsequentlyremeasured
throughthe income statement. There is a choice on an acquisitionby acquisition basisto
measurethe
non
controlling
interest
in
the
acquiree
either
at
the
fair
value
or
at
the
non
controlling interests proportionate share of the acquirees net assets. The Groups policy
hasbeenamendedtofacilitatetheadoptionofthisstandardprospectively. Thetransitional
provisions of the revised AASB 3 allows for contingent payments in respect of previous
acquisitionstoberemeasuredthroughgoodwill.
TheGrouphaselectednottoearlyadoptanynewstandardsoramendmentsthatareissuedbynot
yeteffective.
d)
Basisofconsolidation
The halfyear consolidated financial statements comprise the financial statements of Integrated
LegalHoldings
Limited
and
its
subsidiaries
as
at
31
December
2009.
Subsidiariesareallthoseentities(includingspecialpurposeentities)overwhichtheGrouphasthe
power to govern the financial and operating policies so as to obtain benefits from their activities.
Theexistence and effect of potential voting rights thatarecurrently exercisable orconvertible are
consideredwhenassessingwhetheragroupcontrolsanotherentity.
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FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
12
3)
SEGMENTINFORMATION
TheGrouphasidentifieditsoperatingsegmentsbasedontheinternalmanagementreportingthatis
used by the executive management team (the chief operating decision maker) in assessing
performanceandallocatingresources. IntegratedLegalHoldingsLimitedsoperatingsegmentshave
been identified based on how the financial and operating results of the Group are monitored and
presentedinternallytotheexecutivemanagementteam.
TheGroupsreportablesegmentsareidentifiedbymanagementbasedonthenatureofthebusiness
andthesimilaritiesofservicesprovided,methodofdeliveryandtypeofclientsastheGroupsrisks
andreturnsareaffectedpredominantlybydifferencesinlegalproductsandservicesperformed.
Theoperating
businesses
are
organised
and
managed
separately
according
to
the
nature
of
the
legal
productsandservicesprovided,witheachsegmentrepresentingastrategicbusinessunitthatoffers
differentlegalproductsandservesdifferentmarkets.
Thefollowingreportablesegmentshavebeenidentifiedbymanagement:
LegalServicesDivision
OperatoroflegalpracticesthroughoutAustralia
InformationTechnologyDivision
Provides an internet portal designed to provide easy access to a range of legal and other
documentsto
the
legal
profession
and
public
alike
and
information
about
various
areas
of
law.
The accounting policiesused bythe Group in reporting segments internally are the same as those
containedinnote1totheaccounts,exceptforthefollowing:
Intersegmentsales
Intersegmentsalesarerecognisedatcostwithnomarginbuiltintotheintersegmenttransactions,
andaimstoencourageintersegmentworkreferrals.
Unallocatedrevenueandassets
Corporate
items
are
not
allocated
to
operating
segments
as
they
are
not
considered
part
of
the
core
operationsofanysegments.
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FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
13
Businesssegments
Thefollowingtablepresentsrevenueandprofitinformationforbusinesssegmentsforthehalfyears
ended31December2009and31December2008.
Halfyearended31December2009
Legal
Services
$
Information
Technology
$
Total
$
Revenue
Professionalfees 11,176,517 389,536 11,566,053
Otherrevenue 1,480 9,347 10,827
Intersegmentrevenue 5,765 5,765
Totalsegment
revenue
11,183,762 398,883
11,582,645
Unallocatedrevenue:
Interestreceived 11,470
Dividendsreceived 50
Totalunallocatedrevenue 11,520
Intersegmentelimination (5,765)
Totalrevenueperstatementof
comprehensiveincome 11,588,400
Result
Segmentresult 1,191,118 110,045 1,301,163
Unallocateditems:
Salariesandemployeebenefits
expenses (406,361)
Officeexpenses (238,379)
Otherunallocateditems 2,926
Totalunallocateditems (641,814)
Profitbeforetaxandfinancecosts 659,349
Financecosts (87,360)
Profitbeforeincometax 571,989
Incometaxbenefit 139,080
Netprofitafterincometax 711,069
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
14
Halfyearended31December2008
Legal
Services
$
Information
Technology
$
Total
$
Revenue
Professionalfees 6,827,259 376,044 7,203,303
Otherrevenue:
Rentalrevenue 108,597 108,597
Compensationreceivable 139,000 139,000
Advertisingrevenue 3,108 3,108
Intersegmentrevenue 18,994 18,994
Totalsegment
revenue
7,093,850 379,152
7,473,002
Unallocatedrevenue:
Interestrevenue 139,068
Dividendsreceived 60
Totalunallocatedrevenue 139,128
Intersegmentelimination (18,994)
Totalrevenueperstatementof
comprehensiveincome 7,593,136
Result
Segmentresult 1,715,780 104,177 1,819,957
Unallocateditems:
Interestrevenue 139,068
Salariesandemployeebenefits
expenses (332,921)
Officeexpenses (254,969)
Otherunallocateditems (8,184)
Totalunallocateditems (457,006)
Profitbeforetaxandfinancecosts 1,362,951
Financecosts (67,979)
Profitbeforeincometax 1,294,972
Incometaxexpense (398,269)
Netprofit
after
income
tax
896,703
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
15
Totalassets
have
increased
by
5.2%
since
the
last
annual
report.
Segment
assets
for
the
half
year
ended31December2009areasfollows:
Asat31December2009
Legal
Services
$
Information
Technology
$
Total
$
Segmentassets
Segmentoperatingassets 17,843,553 2,155,205 19,998,758
Unallocatedassets:
Cashandcashequivalents 176,256
Deferredtaxassets 245,740
Prepayments 118,723
Investmentin
associates
712,888
Availableforsalefinancialassets 2,794
Plantandequipment 4,161
Totalunallocatedassets 1,260,562
Intersegmenteliminations (717,537)
Totalassetsfromcontinuingoperations
perbalancesheet 20,541,783
Asat30June2009
Legal
Services
$
Information
Technology
$
Total
$
Segmentassets
Segmentoperatingassets 16,108,199 2,166,143 18,274,342
Unallocatedassets:
Cashandcashequivalents 547,437
Deferredtaxassets 297,357
Prepayments 170,386
Investmentinassociates 712,888
Availableforsalefinancialassets 2,677
Plantandequipment 5,023
Totalunallocatedassets 1,735,768
Intersegmenteliminations (728,528)
Totalassets
from
continuing
operations
perbalancesheet 19,281,582
4)
OTHERREVENUE
Consolidated Consolidated
Halfyear
ended
31Dec2009
Halfyear
ended
31Dec2008
$ $
Compensationreceivable 139,000
Rentalrevenue 108,597
Sundryincome 10,301 3,108
Dividendsreceived 50 60
10,351 250,765
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
16
5)
CASHAND
CASH
EQUIVALENTS
Consolidated Consolidated
At
31Dec2009
At
30Jun2009
$ $
Cashatbankandinhand 249,796 600,694
Consolidated Consolidated
At
31Dec2009
At
30Jun2009
$ $
ReconciliationtocashflowstatementForthepurposesofthecashflowstatement,cashandcash
equivalentscomprisethefollowingat31December:
Cashatbankandinhand 249,796 600,694
Bankoverdrafts (71,458) (134,819)
178,338 465,875
6)
PREPAYMENTS
Consolidated Consolidated
At31Dec2009
At
30Jun2009
CURRENT $ $
UnsecuredLoanGFowler(1) 75,612 75,612
Otherprepayments 397,487 575,664
473,099 651,276
NONCURRENT
UnsecuredLoanGFowler(1) 56,456 63,016
(1) Underthetermsofhisemploymentcontract,MrFowler(ManagingDirector)wasprovided
with an interestfree loan of $189,036 in October 2008 pertaining to the tax liability of
sharesintheCompanyissuedonhisappointment.Thetermsoftheloanareasfollows:
the loanwillbeforgiven ifMrFowlerremainsemployedbytheCompanyforat least3
yearsfromthedateofcommencementofemployment;
50%oftheloanwillbewaivedifMrFowlerterminateshisemploymentwithin23years;
and
0%oftheloanwillbewaivedifMrFowlerterminateshisemploymentwithin2years.
TheCompanywillmeetanyFBTobligationsarisingfromthistransaction.
This loan has been assessed as prepaid employee benefits in accordance with AASB 119
EmployeeBenefits. TheamortisationofthebalancehasbeenrecognisedintheStatementof
comprehensiveincomeinthelineitemsalariesandemployeebenefitsexpenses.
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FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
17
7)
GOODWILL
Consolidated Consolidated Consolidated
At
31Dec2009
At
30Jun2009
At
31Dec2008
$ $ $
Openingbalance 10,372,263 6,330,233 6,330,233
Additions(note16) 48,976 4,492,030 2,516,110
Impairment (450,000)
Closingbalance 10,421,239 10,372,263 8,846,343
a)
Descriptionof
the
Groups
goodwill
After initial recognition, goodwill acquired in a business combination is measured at cost less any
accumulated impairment losses. Goodwill isnotamortisedbut issubjectto impairmenttestingon
anannualbasisorwheneverthereisanindicationofimpairment.
8)
INTANGIBLEASSETS
Consolidated Consolidated Consolidated
At
31Dec2009
At
30Jun2009
At
31Dec2008
$ $ $
Openingbalance
136,620 136,620
136,620
Additions
AmortisationExpense (53,460) (35,640) (17,820)
Closingbalance 83,160 100,980 118,800
a)
DescriptionoftheGroupsotherintangibleassets
Otherintangiblesrepresentthevalueofleasedpremisesacquiredupontheacquisitionofthe legal
practiceofPeterMarkson19September2007andiscarriedatcostlessaccumulatedamortisation.
Thisintangibleassethasbeenassessedashavingafinitelifeandisamortisedusingthestraightline
method over the remaining term of the lease. The amortisation has been recognised in the
statement
of
comprehensive
income
in
the
line
item
depreciation
and
amortisation
expenses.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
18
9)
INTERESTBEARING
LOANS
AND
BORROWINGS
Consolidated Consolidated
At
31Dec2009
At
30Jun2009
$ $
CURRENT
Bankoverdraft 71,458 134,819
Obligationsunderfinanceleasesandhirepurchasecontracts 174,845 72,734
Insurancepremiumfunding(unsecured) 82,865 313,777
Bankloan(secured) 1,000,000 723,000
1,329,168
1,244,330
NONCURRENT
Obligationsunderfinanceleasesandhirepurchasecontracts 358,443 63,555
Loanrelatedparty(unsecured) 550
Bankloan(secured) 850,000 1,000,000
1,208,443 1,064,105
10)
OTHERNONCURRENTLIABILITIES
Consolidated
Consolidated
At
31Dec2009
At
30Jun2009
$ $
CURRENT
Deferredconsiderationpayable(1)
344,322 200,000
Leaseincentiveobligation(2) 82,489
426,811 200,000
NONCURRENT
Deferredconsiderationpayable(1) 85,837
Leaseincentiveobligation(2) 168,852 292,585
168,852 378,422
(1) Deferredconsideration payableonthe acquisition ofThe ArgylePartnership Lawyersand
mdalawyers(refernote16)
(2)
Operating lease incentives are recognised as a liability when received and subsequently
reducedbyallocating leasepaymentsbetweenrentalexpenseandreductionoftheliability
toensurerentalexpenseisrecognisedonastraightlinebasisovertheleaseterm.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
19
11)
ISSUEDCAPITAL
a)
Ordinaryshares
Consolidated Consolidated Consolidated Consolidated
31Dec2009 30Jun2009 31Dec2009 30Jun2009
Shares Shares $ $
Fullypaidshares 69,014,511 69,014,511 30,488,281 30,489,975
Partlypaidshares(1) 371,667 331,667 24,540 14,838
Forfeitedsharesheldintrust(1) 26,667
69,412,845 69,346,178 30,512,821 30,504,813
(1)
DeferredEmployeeSharePlan Informationrelatingtotheemployeeshareplan, including
detailsof
shares
issued
under
the
scheme
is
set
out
in
note
17.
b)
Movementsinordinarysharecapital
Consolidated Shares $
Openingbalanceasat1July2008 63,538,320 29,729,975
Issueofsharesat14centspershareon4November2008
tothevendorsofTheArgylePartnership Lawyers 4,142,857 580,000
Issueof
shares
under
the
Deferred
Employee
Share
Plan
(refernote17) 398,334 7,518
Balanceasat31December2008 68,079,511 30,317,493
Consolidated Shares $
Openingbalanceasat1July2009 69,346,178 30,504,813
Costsassociatedwithissuingshares (1,694)
IssueofsharesundertheDeferredEmployeeSharePlan
(refernote
17)
66,667
9,702
Balanceasat31December2009 69,412,845 30,512,821
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
20
12)
RESERVES
Consolidated Consolidated
At
31Dec2009
At
30Jun2009
$ $
Netgains/(losses)onavailableforsalefinancialassets (1,271) (1,373)
Generalreserve(1) 727,113
725,842 (1,373)
(1)
Duetoaccumulated losses incurredpriortothe listingofthecompanyon17August2007,
theDirectorsresolvedto isolateprofitsderivedfromtradingactivitiessince listingthrough
theestablishmentofaGeneralReserve.
During the period, $727,113, representing trading profits to 30 June 2009 less dividends
paid,wastransferredtotheGeneralReservefromAccumulatedLosses.
AccumulatedlossesincurredpriortolistingoftheCompanyandcommencementoftrading
activitiesarosefromthefollowingtransactions:
(a)
impairment losses incurred on shares issued to vendors of Talbot Olivier
Business Assets, Brett Davies Lawyers Business Assets and Law Central Co Pty
Ltdshareholderson29August2006;and
(b)
Sharebasedpaymentsexpensesforsharesissuedatadeemedvalueof50cents
persharetodirectorsandsupporterson29August2006and28February2007.
13)
CONTINGENTLIABILITIESANDCONTINGENTASSETS
Therearenocontingentliabilitiesorassetsasat31December2009.
14)
SUBSEQUENTEVENTS
Other than the declaration of an interim dividend, as discussed in note 15, there were no events
occurringsubsequent
to
balance
date
that
have
had,
or
will
have,
a
significant
effect
on
the
Group.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
21
15)
INTERIMDIVIDEND
DETAILS
[to
be
confirmed]
Amountpershare 0.25cents
Amountfranked Fullyfrankedata30%taxrate
Recorddatetodetermineentitlementstothedividend 10March2010
Datetheinterimdividendispayable 9April 2010
DividendReinvestmentPlan
The Company operates a dividend reinvestment plan (DRP) which offers eligible shareholders the
opportunitytoreinvestallorpartoftheirdividends inadditionalshares intheGroup. TheShares
areissuedata5%discounttotheweightedaveragemarketpriceofsharessoldontheASXduringa
periodof
10
trading
days
(rounded
to
the
nearest
half
cent),
with
the
period
commencing
on
the
secondtradingdayafterthedividendrecorddate.
ThelastdateforreceiptofanelectionnoticeforparticipationintheDRPwithrespecttotheabove
interimdividendis24March2010.
16)
BUSINESSCOMBINATIONS
Acquisition
of
Argyle
Lawyers
On4November2008,IntegratedLegalHoldingsLimited,throughitswhollyownedsubsidiary,Argyle
LawyersPtyLtd,acquiredthelegalpracticeofTheArgylePartnership. Thetransactionwaseffective
from
1
November
2008.
Sincetheendofthepreviousfinancialyear,thefinancialperformanceoftheacquiredbusinesshas
exceededexpectationsandtheamountpayableasdeferredconsiderationinrelationtothebusiness
combinationhas increasedby$48,976. Thischange inestimatehas increasedthetotalacquisition
cost,resultinginacorrespondingincreaseingoodwill(refernote7).
Forfulldetailsofthebusinesscombinationaffected,pleaserefertotheannualreportfortheyear
ended30June2009.
17)
SHARE
BASED
PAYMENTS
Recognisedsharebasedpaymentexpenses
Theexpenserecognisedforemployeeservicesreceivedduringtheyearisshowninthetablebelow:
Consolidated Consolidated
31Dec2009 31Dec2008
$ $
Expensearisingfromequitysettledsharebasedtransactions 9,702 7,518
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
22
Typesof
share
based
payment
plans
Taxexemptemployeeshareplan(TEESP)
AllemployeesareeligibletoparticipateintheTEESPiftheymeetthefollowingcriteria:
i.
TheyareapermanentfulltimeorpermanentparttimeemployeeoftheGroup;
ii.
Theyhavemettheprobationperiodunderthetermsoftheiremploymentcontract;
iii.
Theyareatleast18yearsofage;and
iv. TheyareanAustralianresidentfortaxpurposes.
Employeeswhoparticipate intheTEESPcannominatetocontributeupto$1,000perannumfrom
their
pretax
wages
or
salary
by
way
of
an
effective
salary
sacrifice
towards
acquiring
fully
paid
ordinarysharesintheCompany.
InaccordancewiththerulesoftheTEESP,sharesacquiredundertheplanmustnotbewithdrawnor
otherwise dealt with, commencing from the date the employee acquires a beneficial interest in
thosesharesuntiltheearliestofthedatethat:
i. Isthreeyearsaftertheacquisitiondate;or
ii.
TheemployeeceasestobeanemployeeoftheGroup.
The rules of the TEESP do not contain any provisions that could result in an employee forfeiting
ownership
of
shares
under
the
plan.
Deferredemployeeshareplan(DESP)
Shares are granted to key employees and directors of the Group. The DESP is designed to align
participantsinterestswiththoseofshareholdersbyincreasingthevalueoftheCompanysshares.
EmployeesareeligibletoparticipateintheDESPiftheymeetthefollowingcriteria:
i. TheyareapermanentfulltimeorpermanentparttimeemployeeoftheGroup;
ii. Theyhavemettheprobationperiodunderthetermsoftheiremploymentcontract;
iii.
Theyareatleast18yearsofage;and
iv.
They
are
an
Australian
resident
for
tax
purposes.
UndertheDESP,senioremployeesareinvitedtoreceivefullypaidordinaryshares intheCompany
subject to the achievement of a number of key performance indicators such as contribution to
earningspersharefortheGroup.
SharesmayeitherbeacquiredonmarketbytheGrouporissuedbytheParent. Duringthehalfyear
ended31December2009,noshares(30June2009:398,334shares)wereissuedbytheParentwith
thecostbeingexpensedoveravestingperiodofthreeyears. Thefairvalueoftheshares issetat
themarketpriceofthesharesonthedateofgrant. Theimpactontheprofitandlossforthehalf
yearended31December2009is$9,702(31December2008:$7,518).
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
NotestoandformingpartoftheFinancialReport
23
Whena
participant
ceases
employment
prior
to
the
vesting
of
their
shares,
the
shares
are
forfeited
in full unless otherwise determined by the Board. In the event of a change of control, the
performance period end date will be brought forward to the date of the change of control and
awardswillvestsubjecttoperformanceoverthisshortenedperiod.
Therearenocashsettlementalternatives.
SummaryofsharesgrantedunderTEESPandDESParrangements
NosharesweregrantedundertheTEESPduringthehalfyearended31December2009.
The following table illustrates the number of and movements in shares granted during the period
underthe
DESP:
Consolidated Consolidated
31Dec2009 30Jun2009
No. No.
Openingbalanceat1July2009 398,334
Grantedduringtheperiod 40,000 398,334
Forfeitedduringtheperiod (66,667)
Forfeitedsharesheldintrust 26,667
Closingbalanceasat31December2009 398,334 398,334
Weightedaverage
remaining
vesting
period
Theweightedaverageremainingvestingperiodasat31December2009forthesharesissuedis1.72
years(30June2009:2.13years).
Weightedaveragefairvalue
Theweightedaveragefairvalueofsharesgrantedduringtheperiodwas14.5cents(30June2009:
15.8cents).
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2009
ACN120394194
DirectorsDeclaration
24
InaccordancewitharesolutionoftheDirectorsofIntegratedLegalHoldingsLimited,Istatethat:
Intheopinionofthedirectors:
a.
Thefinancialstatementsandnotestothefinancialstatementsoftheconsolidatedentity
areinaccordancewiththeCorporationsAct2001,including:
i. givingatrueandfairviewoftheconsolidatedentitysfinancialpositionasat31
December2009andtheperformanceforthehalfyearendedonthatdate;
ii.
complying
with
Australian
Accounting
Standard
AASB
134
Interim
FinancialReportingandtheCorporationsRegulations2001;and
b. Therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebts
asandwhentheybecomedueandpayable.
ThisdeclarationismadeinaccordancewitharesolutionoftheDirectors.
OnbehalfoftheBoard,
GFowler
Director
Perth,25February2010
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Liability limited by a scheme approved
under Professional Standards LegislationGHM:NR:ILH:043
Auditor's Independence Declaration to the Directors of Integrated Legal
Holdings Limited
In relation to our review of the financial report of Integrated Legal Holdings Limited for the half-year ended
31 December 2009, to the best of my knowledge and belief, there have been no contraventions of the
auditor independence requirements of the Corporations Act 2001or any applicable code of professional
conduct.
Ernst & Young
G H Meyerowitz
Partner
Perth
25 February 2010
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Liability limited by a scheme approved
under Professional Standards LegislationGHM:NR:ILH:042
To the members of Integrated Legal Holdings Limited
Report on the Half-Year Financial Report
We have reviewed the accompanying half-year financial report of Integrated Legal Holdings Limited, which
comprises the statement of financial position as at 31 December 2009, and the statement of
comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended
on that date, other selected explanatory notes and the directors declaration of the consolidated entity
comprising the company and the entities it controlled at the half-year end or from time to time during the
half-year.
Directors Responsibility for the Half-Year Financial Report
The directors of the company are responsible for the preparation and fair presentation of the half-yearfinancial report in accordance with Australian Accounting Standards (including the Australian Accounting
Interpretations), the Corporations Act 2001. This responsibility includes establishing and maintaining
internal controls relevant to the preparation and fair presentation of the half-year financial report that is
free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances.
Auditors Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 R eview of
Interim and other Financial Reports Performed by the Independent Auditor of the Entity, in order to state
whether, on the basis of the procedures described, we have become aware of any matter that makes us
believe that the financial report is not in accordance with the Corporations Act 2001including: giving atrue and fair view of the consolidated entitys financial position as at 31 December 2009 and its
performance for the half-year ended on that date; and complying with Accounting Standard AASB 134
Interim Financial Reporting, the Corporations Regulations 2001. As the auditor of Integrated Legal
Holdings Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply
with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditors Independence Declaration a copy
of which is included in the Directors Report.
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Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe
that the half-year financial report of Integrated Legal Holdings Limited is not in accordance with:
a. the Corporations Act 2001, including:
i) giving a true and fair view of the consolidated entitys financial position as at 31 December
2009 and of its performance for the half-year ended on that date; and
ii) complying with Accounting Standard AASB 134 Interim Financial Reportingand the
Corporations Regulations 2001.
Ernst & Young
G H Meyerowitz
Partner
Perth
25 February 2010