058.ASX IAW Sept 25 2009 15.53 Full Year Statutory Accounts

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194
(ASX:IAW)
FinancialReport
Fortheyearended30June2009
ACN120394194
ContentstoFinancialReport
CorporateInformation.............................................................................................................1
DirectorsReport......................................................................................................................2
AuditorsIndependenceDeclaration.....................................................................................21
CorporateGovernanceStatement.........................................................................................22
BalanceSheet.........................................................................................................................30
IncomeStatement.................................................................................................................31
CashFlowStatement.............................................................................................................32
StatementofChangesinEquity.............................................................................................33
NotestotheFinancialStatements.........................................................................................35
DirectorsDeclaration............................................................................................................93
IndependentAuditReport.....................................................................................................94
ASXAdditionalInformation...................................................................................................96
ACN120394194
CorporateInformation
ABN20120394194
Directors
TheHonJohnDawkins,Chairman
AnneTregonning,NonexecutiveDirector
GraemeFowler,ManagingDirector/CEO
CompanySecretary
JeanMarieRudd
Registeredoffice
GroundFloor
201AdelaideTerrace
PerthWA6000
Principalplaceofbusiness
HeadOffice
Level22
1MarketStreet
SydneyNSW2000
Tel:(02)82636600
ShareRegister
ComputershareInvestorServicesPtyLimited
Level2
45StGeorgesTerrace
PerthWA6000
Tel:(08)93232000
IntegratedLegalHoldingsLimitedsharesarelistedontheAustralianStockExchange.
Solicitors
TalbotOlivier
Level8,WesfarmersHouse
40TheEsplanade
PerthWA6000
Bankers
NationalAustraliaBankLimited
100StGeorgesTerrace
PerthWA6000
Auditor
Ernst&Young
11MountsBayRoad
PerthWA6000
ACN120394194
DirectorsReport
Yourdirectorssubmittheirreportfortheyearended30June2009.
DIRECTORS
The names and details of the Companys directors in office during the financial year and until the
date of this report are as follows. Directors were in office for this entire period unless otherwise
stated.
Names,qualifications,experienceandspecialresponsibilities
TheHonJohnDawkins,AO,B.Ec(NonexecutiveChairman)
MrDawkinswasChairmanofLawCentralfromitsearlybeginningsinMarch2000untilMarch2006.
His other board appointments include Chair of the Retail Energy Market Company Ltd, Chair of
FortunaFundsManagementLtd,andDirectorofM&CSaatchiDirectPtyLtd.Forover10years,until
2005,heservedontheboardofSealcorpHoldings,nowAsgardWealthSolutions,andheisaformer
chairmanofEldersRuralBank.
MrDawkinshasconsultedtoseverallargeAustralianandoverseascompanies,theWorldBankand
the OECD. Until his retirement from politics in 1994 he served as a Minister in the Federal
Governmentfor10yearsandintheHouseofRepresentativesfor18years.
HeisagraduateinEconomicsfromtheUniversityofWesternAustralia,andhehasbeenawarded
honorary doctorates from The University of South Australia and the Queensland University of
Technology.
Duringthepastthreeyears,MrDawkinsservedasadirectorofthefollowinglistedcompanies:
MGMWirelessLtdappointed17August2008*
GeneticTechnologiesLtdappointed24November2004;resigned19November2008
*denotescurrentdirectorship
AnneTregonning,B.Com,FCA,GAICD(NonexecutiveDirector)
MsTregonninghasextensiveexperienceinfinanceandriskmanagementinbothpublicpracticeand
commerce. Senior positions previously held include General Manager Finance and Risk, Wealth
ManagementDivision,StGeorgeBank,DirectorGroupFinance,SealcorpHoldings(now ASGARD
WealthSolutions),andSeniorManagerCorporateBanking,BankWest.
Ms Tregonning is a nonexecutive director of Retail Energy Market Company Ltd and the Breast
Cancer Research Centre Western Australia. She is a past executive director of ASGARD Capital
ManagementLimited,apastStateChairmanoftheInstituteofCharteredAccountantsandmember
ofitsNationalCouncil,andapastdirectorofotherpubliccompanyandnotforprofit/professional
organisations.
Ms Tregonning is a graduate of The University of Western Australia, a Fellow of The Institute of

CharteredAccountantsandgraduateoftheAustralianInstituteofCompanyDirectors.
MsTregonningdidnothaveanydirectorshipsinotherlistedcompaniesduringthepastthreeyears.
ACN120394194
DirectorsReport(continued)
GraemeFowler,B.Bus,CPA,GAICD(ManagingDirector/CEO)
Mr Fowler was previously Chief Executive Officer of listed accounting and financial services
consolidator WHK Group Limited. He brings specific experience in the successful consolidation of
professionalservicesfirms.Hespentover15yearsinseniormanagementroleswiththeBTFinancial
GroupincludingGroupChiefFinancialOfficer,ChiefExecutiveOfficerofBTFundsManagementNZ,
andChiefExecutiveOfficerofBTPortfolioServices(includingBTWrap).
Mr Fowler is a business studies graduate of The University of Technology, Sydney, a Certified

PracticingAccountantandagraduateoftheAustralianInstituteofCompanyDirectors.
MrFowlerdidnothaveanydirectorshipsinotherlistedcompaniesduringthepastthreeyears.
Beneficialinterestsinthesharesofthecompanyandrelatedbodiescorporate
Asatthedateofthisreport,thebeneficialinterestsofthedirectorsinthesharesofIntegratedLegal
HoldingsLimitedwere:
Number
of
Ordinary
Shares
JDawkins
ATregonning
GFowler
1,626,398
300,000
2,710,200
COMPANYSECRETARY
JeanMarieRudd,B.Com,CA
Appointed:28August2008
MrsRuddisalsotheChiefFinancialOfficer(CFO)oftheIntegratedLegalHoldingsLimitedgroupof
companies.
Mrs Rudd was previously the Finance Director in Western Australia of national law firm, Minter
Ellison, bringing industryspecific experience to her roles with Integrated Legal Holdings Limited.
Mrs Rudd has over 18 years experience in CFO/Company Secretary roles including senior
managementroleswiththeHeytesburyGroupandThinkSmartLimited.
MrsRuddisagraduateofCurtinUniversity,Perth,andaCharteredAccountant.
DIVIDENDS
NodividendshavebeendeclaredorpaidfromprofitsoftheCompanyfortheyearended30June
2009.
PRINCIPALACTIVITIES
TheprincipalactivityoftheentitiesoftheconsolidatedGroupwastheprovisionoflegalservicesand
onlinelegaldocumentservicesinAustralia.
ACN120394194
OPERATINGANDFINANCIALREVIEW
GroupOverview
AdetailedreviewoftheoperationsoftheGroupduringthefinancialyear,itsfinancialpositionand
businessstrategiesandprospectsforfuturefinancialyearsissetoutbelow.
PerformanceIndicators
Management and the Board monitor the Groups overall performance, from the execution of its
strategic plan through to the performance of the Group against operating plans and financial
budgets.
The Board, together with management have identified key performance indicators (KPIs) that are
used to monitor performance. Directors receive the KPIs for review prior to each monthly Board
meetingallowingalldirectorstoactivelymonitortheGroupsperformance.
OperatingResultsfortheYear
Fortheyearended30June2009,theconsolidatedentitygeneratedanetprofitaftertaxof$593,875
(2008:$1,544,303).
Against the same period last year, earnings before interest, tax, impairment, depreciation and
amortisationdecreasedfromaprofitof$2,421,039toaprofitof$1,638,744.
Consolidated operating revenues of $16,946,221 were 59% higher than the previous year which
reported $10,688,441 operating revenues. Revenue from operating activities increased due to a
combinationoforganicgrowthandacquisitionsofnewmemberfirms.
As previously announced on 20 August 2009, a noncash impairment charge of $450,000 (2008:

$215,826)wasrecognisedagainstthecarryingvalueoftheLawCentralbusiness.
AfullcommentaryontheresultsforthereportingperiodiscontainedintheASXreleasedated31
August2009.
ShareholderReturns
TheCompanysreturntoshareholdersisasfollows:
2009
2008
Basicanddilutedprofitpershare(cents)
0.89
2.66
ReviewofFinancialCondition
LiquidityandCapitalResources
The consolidated Cash Flow Statement illustrates that there was a decrease in cash flow from
operating activities. Operating activities resulted in a net cash outflow of $1,652,745 (2008:
$1,119,431inflow).
ACN120394194
This decrease in comparison to 2008 is largely due to the funding of working capital for new
businessesduringtheinitialperiodpostacquisitionandthepaymentofmaidentaxliabilitiesduring
theyear.
Business acquisitions adversely impact cash resources as debtors and work in progress of the
acquiredlegalpracticesarenotpurchasedonacquisition.Cashresourcesarereinvestedbackinto
these businesses until working capital levels are built up to their preacquisition levels and the
acquiredbusinessesreturntoapositivecashflow.Inmanycasesthismaytakeaperiodofupto46
months.
ThematerialityoftheacquisitionsofArgyleLawyersinNovember2008andmdalawyersinMarch
2009 to the Integrated Legal Holdings Limited group is significant and there has been a negative
impactonoperatingcashflowsfortheyear.
DuringtheyeartheGroupalsopaid$1.3mforitsmaidenincometaxliabilityforthe2008financial
yeartogetherwiththefirstinstalment(prepayment)ofincometaxwithrespecttothe2009financial
year.Thus,inthefirstyearofmeetingtaxationobligations,thereareadditionaltaxpayments.This
hassignificantlyimpactedtheGroupsreportedoperatingcashflows.
This situation is unique to the first year in which tax is paid and will not be repeated. In future
periods,taxationpaymentswillbepaidonaquarterlybasisinadvance.
Cash flows used for investing activities amounted to $3,909,689 (2008: $6,736,530) of which
$3,731,403(2008:$6,652,695)relatestotheacquisitionofbusinessesduringtheyear.
Theseoutflowswerepartiallyoffsetbythereceiptof$1,723,000(2008:nil)indebtfundingbyway
offloatingbillsandfrom$476,372(2008:$232,057)receivedtofinanceequipmentacquisitionsand
annualprofessionalindemnityinsurancepremiums.
Finally,therewasacashoutflowof$1,411,065forthepaymentofthe2008finaldividend.
ThenettangibleassetbackingoftheGroupwas4.89centspershare(2008:11.71cents).
Assetandcapitalstructure
Debts:
Tradeandotherpayables
Interestbearingloansandborrowings
Less:Cashandcashequivalents
Netdebt/(cash)
Totalequity
Totalcapitalemployed
CONSOLIDATED
2009
2008
$
$
1,738,222
1,081,009
2,308,435 188,472
(600,694)
(5,626,766)
3,445,963
(4,357,285)
13,862,406
13,904,646
17,308,369
9,547,361
The level of gearing in the Company is within acceptable limits set by the directors given the
implicationsofthebusinessacquisitionsandpaymentoftaxliabilitiesduringtheyear.
ACN120394194
Shareissuesduringtheyear
TheCompanyhasissued5,807,858sharesduringtheyear:
4,142,857sharestothevendorsofArgyleLawyersPtyLtdinpartpaymentforacquisitionof
theCompanyon1November2008;
1,333,334 shares to the vendor of mda lawyers in part payment for acquisition of the
businesson13March2009;and
331,667sharestoemployeesundertheDeferredEmployeeSharePlan.
RiskManagement
TheGrouptakesaproactiveapproachtoriskmanagement.TheBoardisresponsibleforensuring
thatrisks,andalsoopportunities,areidentifiedonatimelybasisandthattheGroupsobjectivesand
activitiesarealignedwiththerisksandopportunitiesidentifiedbytheBoard.
TheGroupbelievesthatitiscrucialforallBoardmemberstobepartofthisprocess,andassuchthe
Board has not established a separate risk management committee. Instead subcommittees are
convenedasappropriateinresponsetoissuesandrisksidentifiedbytheBoardasawholeandthe
subcommitteefurtherexaminestheissueandreportsbacktotheBoard.
The Board has a number of mechanisms in place to ensure that managements objectives and
activitiesarealignedwiththerisksidentifiedbytheBoard.Theseincludethefollowing:
Implementation of Board approved budget and Board monitoring of progress against

budget,includingtheestablishmentandmonitoringoffinancialKPIs;and
Theestablishmentofcommitteestoreportonspecificbusinessrisks.
ACN120394194
SIGNIFICANTCHANGESINTHESTATEOFAFFAIRS
Significantchangesinthestateofaffairsduringtheyearended30June2009areasfollows:
On1 November2008,theCompanyacquired,throughitswhollyownedsubsidiary,Argyle
LawyersPtyLtd,thelegalpracticeofTheArgylePartnership(nowtradingasArgyleLawyers)
refernote30.
On13March2009,theCompany,throughitswhollyownedsubsidiary,ArgyleLawyersPty
Ltd,acquiredthelegalpracticeofmdalawyersrefernote30.
SIGNIFICANTEVENTSAFTERTHEBALANCEDATE
Therewerenosignificanteventsafterthebalancedate.
LIKELYDEVELOPMENTSANDEXPECTEDRESULTS
IntegratedLegalHoldingsLimitedwillcontinuetoseekgrowthinrevenueandearningsthroughthe
acquisitionofadditionallawfirmsthroughoutAustralia.
ENVIRONMENTALREGULATION
The Groups operationsarenotsubjecttoanysignificant environmental,CommonwealthorState,
regulationsorlaws.
INDEMNIFICATIONANDINSURANCEOFDIRECTORSANDOFFICERS
Each of the directors and secretary of the Company has entered into a deed with the Company
wherebytheCompanyhasprovidedcertaincontractualrightsofaccesstobooksandrecordsofthe
Company to those directors and secretary and to effect and maintain insurance in respect of the
directorsandofficersliabilityandprovidecertainindemnitiestoeachofthedirectors,totheextent
permittedbysection199BoftheCorporationsAct2001.
The Company has put in place Prospectus Insurance and Directors and Officers Liability Insurance.
The contract prohibits the disclosure of the nature of the liability and/or the amount of the
premium.
ACN120394194
DIRECTORSMEETINGS
Thenumberofmeetingsofdirectors(includingmeetingsofcommitteesofdirectors)heldduringthe
yearandthenumberofmeetingsattendedbyeachdirectorwasasfollows:
DirectorsMeetings
Audit
Acquisition*
JDawkins
ATregonning
GFowler
Eligibleto
attend
10
10
10
Attended
10
10
10
Eligibleto
attend
9
9
9
Attended
7
9
9
Eligibleto
attend
5
5
5
Attended
5
5
5
*The members of the acquisition committee meet, as required, with formal matters being raised
duringBoardmeetings.Atameetingofthedirectorson18December2008aresolutionwasmade
todisbandtheAcquisitionCommitteeasitsfunctionsarenowbeingundertakenbytheBoard.
Committeemembership
Asatthedateofthisreport,theCompanyhadanAuditCommitteeoftheBoardofDirectors.
The Audit Committee comprises all members of the Board of Directors and is chaired by Ms
Tregonning.
AUDITORINDEPENDENCEANDNONAUDITSERVICES
AcopyoftheauditorsindependencedeclarationreceivedbytheDirectorsinrelationtotheaudit
fortheyearisprovidedwiththisreportonpage21.
NONAUDITSERVICES
Nonauditserviceswereprovidedbytheentitysauditor,Ernst&Young.Thedirectorsaresatisfied
thattheprovisionofnonauditservicesiscompatiblewiththegeneralstandardofindependencefor
auditors imposed by the Corporations Act 2001. The nature and scope of each type of nonaudit
serviceprovidedmeansthatauditorindependencewasnotcompromised.
Ernst&Youngreceivedorareduetoreceivethefollowingamountsfortheprovisionofnonaudit
services:
Taxcompliance
Taxationservices
CONSOLIDATED
2009
2008
$
$
18,813
9,470
7,737
32,853
26,550
42,323
PARENT
2009
2008
$
$
18,813
9,470
7,737
32,853
26,550
42,323
ACN120394194
REMUNERATIONREPORT(audited)
This remuneration report outlines the director and executive remuneration arrangements of the
CompanyandtheGroupinaccordancewiththerequirementsoftheCorporationsAct2001andits
Regulations. For the purposes of this report Key Management Personnel (KMP) of the Group are
definedasthosepersonshavingauthorityandresponsibilityforplanning,directingandcontrolling
the major activities of the Company and the Group, directly or indirectly, including any director
(whether executive or otherwise) of the parent company, and includes the five executives in the
ParentandtheGroupreceivingthehighestremuneration.
For the purposes of this report, the term executive encompasses the Chief Executive, senior
executivesandthesecretaryoftheParentandtheGroup.
Detailsofkeymanagementpersonnel(includingthefivehighestpaidexecutivesoftheCompany
andtheGroup):
i) Directors
JDawkins
ATregonning
GFowler
ii) Executives
BTaylor
PBobbin
BDavies
JMRudd
Chairman(nonexecutive)
Nonexecutivedirector
Managingdirector/CEO
Managingprincipal,TalbotOlivier
Managingprincipal,ArgyleLawyersappointed1November2008
Managingprincipal,BrettDaviesLawyers
Chieffinancialofficer
Companysecretaryappointed28August2008
There were no changes to KMP after reporting date and before the date the financial report was
authorisedforissue.
TheBoardofDirectorsoftheCompanyisresponsiblefordeterminingandreviewingremuneration
arrangementsfortheBoardandexecutives.
TheBoardwillassesstheappropriatenessofthenatureandamountofremunerationofexecutives
on a periodic basis by reference to relevant employment market conditions with the overall
objective of ensuring maximum stakeholder benefit from the retention of a high quality, high
performingBoardandexecutiveteam.
Remunerationphilosophy
The performance of the Company depends upon the quality of its directors and executives. To
prosper,theCompanymustattract,motivateandretainhighlyskilleddirectorsandexecutives(refer
GroupPerformanceonpage15).
Tothisend,theCompanyembodiesthefollowingprincipalsinitsremunerationframework:
Providecompetitiverewardstoattracthighcalibreexecutives;
Linkexecutiverewardtoshareholdervalue;
Haveaportionofexecutiveremunerationatrisk;and
Establishappropriate,demandingperformancehurdlesforvariableexecutiveremuneration.
ACN120394194
REMUNERATIONREPORT(audited)(continued)
Remunerationstructure
Inaccordancewithbestpracticecorporategovernance,thestructureofnonexecutivedirectorand
executiveremunerationisseparateanddistinct.
Nonexecutivedirectorremuneration
Objective
TheBoardseekstosetaggregateremunerationatalevelthatprovidestheCompanywiththeability
to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to
shareholders.
Structure
TheGroupsConstitutionandtheASXListingRulesspecifythattheaggregateremunerationofnon
executive directors shall be determined from time to time by a general meeting. The current
aggregateremunerationlevelfornonexecutivedirectors,asapprovedbyshareholders,is$250,000
(2008: $250,000) per annum. The next determination will be at the AGM to be held on 26
November2009whenshareholderswillbeaskedtoapprovetheaggregateremunerationfornon
executivedirectorsfortheyear.
The amount of aggregate remuneration sought to be approved by shareholders and the fee
structureisreviewedannually.TheBoardconsidersadvicefromexternalconsultantsaswellasthe
feespaidtononexecutivedirectorsofcomparablecompanieswhenundertakingtheannualreview
process.
Eachnonexecutivedirectorreceivesanagreed/contractedfeeforbeingadirector.
Nonexecutivedirectorsdonotreceiveretirementbenefits,nordotheyparticipateinanyincentive
programs.
Theremunerationofnonexecutivedirectorsforthefinancialyearisdetailedintable1onpage18
ofthisreport.
Executiveremuneration
Objective
TheGroupaimstorewardexecutiveswithalevelandmixofremunerationcommensuratewiththeir
positionandresponsibilitieswithintheGroupsoasto:
RewardexecutivesforGroup,subsidiaryandindividualperformanceagainst targetssetby
referencetoappropriatebenchmarks;
Aligntheinterestsofexecutiveswiththoseofshareholders;and
Ensuretotalremunerationiscompetitivebymarketstandards.
Structure
In determining the level and makeup of executive remuneration, the Board engages external
consultantsasneededtoprovideindependentadvice.
10
ACN120394194
TheBoardhasenteredintoadetailedcontractofemploymentwiththeManagingDirector/CEOand
otherexecutives.Detailsofthesecontractsareprovidedbelow.
Remunerationconsistsofthefollowingkeyelements:
Fixedremuneration(basesalaryandsuperannuation)
Variableremuneration:
o Shorttermincentives(STI)
o Longtermincentives(LTI)intheformofsharebasedpayments(equitysettled)
Fixedremuneration
Objective
FixedremunerationisreviewedannuallybytheBoard.TheprocessconsistsofareviewofCompany,
subsidiaryandindividualperformance,relevantcomparativeremunerationexternallyandinternally
and, where appropriate, external advice on policies and practices. As noted above, the Board has
accesstoexternaladviceindependentofmanagement.
Structure
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of
forms including cash and fringe benefits such as motor vehicles. It is intended that the manner of
paymentchosenwillbeoptimalfortherecipientwithoutcreatingunduecostfortheGroup.
Thefixedremunerationcomponentofexecutivesisdetailedintable1onpage18.
Variableremunerationshorttermincentives(STI)
Objective
TheobjectiveoftheSTIprogramistolinktheachievementoftheGroupsoperationaltargetswith
the remuneration received by the executives charged with meeting those targets. The total
potentialSTIavailableissetatalevelsoastoprovidesufficientincentivetotheexecutivetoachieve
theoperationaltargetsandsuchthatthecosttotheGroupisreasonableinthecircumstances.
Structure
ManagingDirector/CEO
The Managing Director/CEO is entitled to a maximum performance bonus of $160,000, subject to
theachievementofspecificperformancetargetsfortheperiodfrom28April2008to30June2010
(26months).Ifachievementofperformancetargetsisnotsuccessfulbythatdate,alesseramount
may be payable at the discretion of the Board, taking into account the individual circumstances
contributingtononachievementofthosetargets.
Performancetargetsareachievedwhen:
AccumulatedrevenuefortheGroupis$40morgreater;and
Earningspersharegrowthof15%orgreaterabovetheforecastearningspershareforthe
2008financialyear.
11
ACN120394194
ThesetargetsaremeasuredusingfinancialreportinginformationandreviewedbytheBoard.
Thetermsandconditionspertainingtothebonusareasfollows:
1. Bothperformancetargetsmustbeachievedatthesametimeforsatisfactionof
performancecriteria,unlessdeterminedotherwisebytheBoard.
2. Thebonuswillvestuponachievementoftargetsonorbefore30June2010(providing
targetsachieved).
3. Anewbonusstructure(betweentheCEOandBoard)willbenegotiatedfromtimeof
paymentofthisbonus.
4. Bonustobepaidincashand/orshares,atthediscretionoftheBoard.
5. Bonuspayablewithin30daysofsatisfactionofperformancecriteria,asconfirmedbythe
Board.
ManagingPrincipals
Actual STI payments are granted to subsidiary member firms depending on the extent to which
specific performance hurdles are met. The STI payments are calculated as a percentage of an
amount by which profitability of a subsidiary exceeds a pre determined profit hurdle for that
subsidiary.
ProfithurdlesareapprovedbytheBoardatthetimeofacquisitionofamemberfirm.
The STI payment for a subsidiary is then allocated between Principals of that subsidiary, including
theManagingPrincipal,basedonpredeterminedkeyperformanceindicators,includingfeeincome
attributabletoeachPrincipal.
STIpaymentsaredeliveredasacashbonuswithintwomonthsaftertheendofeachfinancialyear.
During the year, the STI payment structure for the Principals of Talbot Olivier, including the
ManagingPrincipal,wasrenegotiated,resultingintheperformanceperiodbeingalteredfromthe12
monthsended10August2009,tothe10.5monthsended30June2009.
For the 2009 financial year, the STI performance period for the Principals of Argyle Lawyers,
includingtheManagingPrincipal,wascalculatedfromtheacquisitiondateof1November2008to
theendofthefinancialyearon30June2009.
ChiefFinancialOfficer
The Chief Financial Officer is entitled to a maximum performance bonus of $10,000 (assessed and
payableinsixmonthlyinstalments),subjecttotheachievementofspecificperformancetargetsfor
the 12 months ending 31 August 2009. If achievement of performance targets is not successful a
lesseramountmaybe payableatthediscretionoftheManagingDirector,takingintoaccountthe
individualcircumstancescontributingtononachievementofthosetargets.
12
ACN120394194
Performance targets are achieved upon satisfaction of key deliverables involving the effective
implementationofinternalprocessesandschemes.
Thosekeydeliverablesrepresentkeydriversfortheshorttermsuccessofthebusinessandprovidea
framework for delivering long term value. Targets are measured using financial reporting
information and nonfinancial assessment by the Managing Director of implemented schemes and
processes.
STIbonusfor2009
TheBoardwillconsiderthequantumoftheperformancebonuspayableattheendofthe26month
performanceperiodorwhenmanagementaresatisfiedthatalltargetsaremet.
The maximum performance bonus achievable at the end of the 26 months is $160,000 and the
minimumisnil.Atreportingdate,nobonushasvestedorispayabletotheManagingDirector/CEO
underhisperformancebonusplan.
TherehavebeennoalterationstotheManagingDirectorsSTIbonusplanduringtheyear.
ManagingPrincipals
TheManagingDirectorassessestheSTIbonuspaymentsforasubsidiaryforsubsequentallocation
between Principals of that subsidiary, including the Managing Principal, based on pre determined
keyperformanceindicators,includingfeeincomeattributabletoeachPrincipal.
ThemaximumSTIcashbonusiscalculatedasapercentageofanamountbywhichprofitabilityofa
subsidiaryexceedsapredeterminedprofithurdleforthatsubsidiary.TheminimumSTIcashbonus
payableisnil.Theamountofthebonusachievedandvestedduringthe2009financialyearhasbeen
calculatedasfollows:
BTaylorManagingPrincipal,TalbotOlivier
BDaviesManagingPrincipal,BrettDaviesLawyers
PBobbinManagingPrincipal,ArgyleLawyers
2009
$
2008
$
17,006
15,093
Other than the alterations to the performance periods disclosed on page 12, there have been no
alterationstotheSTIbonusplanduringtheyear.
13
ACN120394194
The Managing Director will approve the STI bonus payments for the 12 months ending 31 August
2009.ThemaximumSTIcashbonusis$10,000andtheminimumisnil.Theamountofthebonus
thatvestedduringthe2009financialyearwas$7,833.Ofthistotal,$4,000waspaidduringthe2009
financialyearwiththeremaindertobepaidinSeptember2009.
Variableremunerationlongtermincentives(LTI)
TheLTIbenefitsaredeliveredonadiscretionarybasisbytheBoardintheformofordinarysharesin
theCompanyundertheDeferredEmployeesSharePlan.Suchgrantsareonlymadetoexecutives
who are able to influence the generation of shareholder wealth and thus have an impact on the
Groupsperformanceagainsttherelevantlongtermperformancehurdle.
75,000sharesweregrantedtotheChiefFinancialOfficeron1July2008withafairvalueof$0.11
per share on grant date and a total fair value of $8,250. The shares will vest in stages during the
threeyearperiodfromissuedate,ending30June2011,followingthesuccessfulachievementofthe
performance criteria specified below, and provided that the Chief Financial Officer remains in the
employment of the Company for each vesting period. Should the Chief Financial Officer cease
employmentpriortothisdate,unvestedshareswillbeforfeited.Performancecriteriaattachedto
thesharesareasfollows:
100%ofshareswillvestifcumulativegrowthintheCompanysearningspershareoverthe
threeyearsending30June2011is45%ormore;and
Shares will commence vesting after achieving 30% growth in the Companys earnings per
share.50%ofshareswillvestat30%growthinearningspershare,withanadditional5%of
sharesvestingforevery1.5%ofearningspersharegrowthabove30%.
Performancecriteriawillbemeasuredusingfinancialreportinginformation.
At30June2009,nosharesundertheLTIplanhavevested(2008:nil)orwereforfeited(2008:nil).
Executivesharetradingpolicy
TheCompanyhasinplaceasharetradingpolicywhichimposestradingrestrictionsonofficersand
employeesoftheCompanyanditsrelatedentitiesthatareconsideredtobeinpossessionofinside
information.
Executives and directors are prohibited from using derivatives or hedge instruments or otherwise
enteringintotransactions(includingmarginloans)thatoperateorareintendedtooperatetolimit
theeconomicriskofsecurityholdingsovervestedorunvestedsharesintheCompanywithoutthe
writtenpermissionoftheBoard.
14
ACN120394194
GroupPerformance
IntegratedLegalHoldingsLimitedsremunerationpolicyaimstoconnecttheremunerationreceived
byexecutiveswithearningsandthecreationofshareholderwealth.
GroupperformanceisreflectedinthemovementoftheGroupsearningspershare(EPS)overtime.
ThegraphbelowshowsIntegratedLegalHoldingsLimitedsbasicEPShistorysinceincorporationin
June2006:
10.00
0.00
(10.00)
(20.00)
(30.00)
(40.00)
(50.00)
(60.00)
(70.00)
EPS(cents)
(1)
(2)
(3)
EPS(cents)
Jun2007(1)
Jun2008(2)
Jun2009(3)
(65.50)
2.66
0.89
Fortheperiodfromincorporationon26June2006to30June2007
The2007EPSresultof65.50wasaffectedbythevaluationofsharesissuedtofoundationpartners
and supporters at a deemed value of 50 cents per share prior to listing of the Company and
acquisition of legal practices. The EPS improved in the 2008 financial year after listing in August
2007andthesubsequentacquisitionoffourlegalpracticesandaninformationtechnologybusiness.
Inthe2009financialyearanumberoffactorsinfluencedthereductionofEPS:
CorporateexpensesincreasedwiththefullyeareffectofthecostsofaManagingDirector
andChiefFinancialOfficer/CompanySecretary
The foundation member firms required investment during the period to ensure the firms
werebestplacedtotakeadvantageofthegrowthopportunitiesavailabletothem.
The prevailing economic conditions negatively affected revenues during the June quarter
against expectations and against the seasonally high revenues historically achieved during
thisperiod.
AspartoftheyearendreviewoftheCompanysfinancialposition,theDirectorsresolvedto
writeoffanumberofageddebtorbalanceswhichintheirviewhadbecomeunrecoverable
asaresultoftheeconomicenvironment.
The directors believe that the business model remains strong and the company is on target to
achieveitsobjectives.
15
ACN120394194
Employmentcontracts
ThereisanemploymentcontractinplacebetweenMrFowlerandIntegratedLegalHoldingsLimited
forMrFowlersappointmentasManagingDirector/CEOoftheCompany.Thecontractcommenced
on 28 April 2008 and continues indefinitely unless terminated according to the provisions of the
contract.
Mr Fowler receives fixed remuneration of $272,500 (2008: $272,500) per annum (inclusive of
superannuation).
Underthetermsofthecontract,MrFowlersdutiesinclude,butarenotlimitedto:
ImplementingthebusinessplanasdeterminedbytheCompany;
CarryingoutsuchlawfuldirectionsasgivenbytheCompany;and
Expandinganddevelopingthebusiness.
TheagreementmaybeterminatedwithoutnoticebyIntegratedLegalHoldingsLimitedif:
MrFowlercommitsaseriousbreachoftheagreement;
MrFowlercommitsanyactthatamountstoarepudiationoftheagreement;
MrFowlerengagesinseriousorwilfulmisconduct;or
Itispermittedforanyreasonunderrelevantlegislation.
The agreement may also be terminated by either party with 30 days notice in writing of
termination.
ManagingPrincipalsmemberfirms
BDavies,BrettDaviesLawyers
MrDaviesisemployedunderatwoyearfixedtermcontract,whichexpiredon12August2009.A
newemploymentcontractiscurrentlybeingnegotiated.MrDaviesispaidasalaryof$100,000per
annum(inclusiveofsuperannuation)andpotentiallyabonuspaidasanadditionalsalary(thebonus
payment is calculated at 20% of the amount by which the net profit after tax of the Managing
Principalslawfirmexceedstheunauditednetprofitaftertaxofthelawfirmforthe2009financial
year).
The employment contract can be terminated without notice if the employee commits a serious
breach of any provision of their contract, is unable to or is prohibited from holding a license to
practicelaw,commitsanyactthatamountstorepudiationofthecontractorengagesinseriousand
wilfulmisconduct.Aftertheconclusionofthetwoyearemploymentperiod,eitherpartymayalso
terminatetheemploymentcontractbygiving28daysnotice.
Mr Davies is also subject to strict confidentiality obligations regarding clients of the legal practice,
andisalsosubjecttosolicitationrestraintsforaperiodofuptotwoyearsaftertermination.
16
ACN120394194
BTaylor,TalbotOlivier
Duringthe2009financialyear,MrTaylorwasemployedunderatwoyearfixedtermcontractwhich
was due to expire on 12 August 2009. Mr Taylor was paid an annual salary of $100,000 (2008:
$100,000) per annum (inclusive of superannuation) and potentially an STI cash bonus as an
additionalsalary.
Thecurrentemploymentcontractceasedon30June2009followingnegotiationofnewemployment
arrangementswhichwillapplyfrom1July2009.Underthenewcontract,effectivefrom1July2009,
Mr Taylor is employed under a four year fixed term contract and continuing thereafter until
terminatedbyeitherpartywithsixmonthsnoticeinwritingoftermination(noticemaynotbegiven
before1January2013,beingsixmonthspriortothecompletionoftheinitialfouryearterm).Heis
also subject to strict confidentiality obligations and solicitation and competition restraints for a
periodof12monthsfollowingtermination.
PBobbin,ArgyleLawyers
Commencingfrom4November2008,MrBobbinisemployedunderafouryearfixedtermcontract
and continuing thereafter until terminated by either party with six months notice in writing of
termination (notice may not be given before 4 August 2012, being three months prior to the
completion of the initial four year term). Mr Bobbin is paid a salary of $400,000 per annum
(inclusive of superannuation) and potentially a bonus paid as an additional salary (the bonus
payment is calculated at a share of the Argyle Lawyers bonus pool, being a percentage of the
amountbywhich theauditednet profitbeforetax ofthe ManagingPrincipalslawfirmexceedsa
predeterminedprofithurdle).
The employment contract can be terminated without notice if the employee commits a serious
breach of any provision of their contract, is unable to or is prohibited from holding a license to
practicelaw,commitsanyactthatamountstorepudiationofthecontractorengagesinseriousand
wilfulmisconduct.MrBobbinisalsosubjecttostrictconfidentialityobligationsandsolicitationand
competitionrestraintsforaperiodof12monthsfollowingtermination.
ChiefFinancialOfficer/CompanySecretary
The Chief Financial Officer (CFO)/Company Secretary has a standard contract. Mrs Rudd receives
fixedremunerationof$160,000(2008:$140,000)perannum(inclusiveofsuperannuation).
TheCompanymayterminatetheemploymentagreementbyprovidingonemonthwrittennoticeor
providingpaymentinlieuofthenoticeperiod(basedonthefixedcomponentofremuneration).The
Companymayterminatethecontractatanytimewithoutnoticeifseriousmisconducthasoccurred.
Whereterminationwithcauseoccurs,theexecutiveisonlyentitledtothatportionofremuneration
thatisfixed,andonlyuptothedateoftermination.
The Chief Financial Officer contract contains standard obligations to perform the duties of an
employeewhichonewouldexpecttofindinastandardemploymentcontract.
ShareOptions
Unissuedshares
TheCompanyhasnotissuedanyoptionsduringtheyear.
17
ACN120394194
Remunerationofkeymanagementpersonnel(KMP)andthefourhighestpaidexecutivesoftheCompanyandtheGroup(2)
Table1:Remunerationfortheyearended30June2009
Post
Employment
Shortterm
Nonexecutivedirectors
JDawkinsChairman
ATregonning
Subtotalnonexecutivedirectors
Executivedirectors
GFowlerManagingDirector/CEO
Subtotalexecutivedirectors
Otherkeymanagementpersonnel
BTaylorManagingPrincipal,Talbot
Olivier
PBobbinManagingPrincipal,Argyle
Lawyer
BDaviesManagingPrincipal,Brett
DaviesLawyers
JMRuddChiefFinancial
Officer/CompanySecretary
SubtotalotherKMP
Total
Salary&Fees
CashBonus
Non
monetary
benefits
Sharebased
Payment
Longterm
Other
Super
annuation
LongService
benefits
Other
Benefits
$
Shares
Total
Performance
related
52,667
1,459
54,126
30,000
50,207
80,207
82,667
51,666
134,333
250,000
250,000
22,500
22,500
370
370
50,408
50,408
323,278
323,278
149,083
14,776
290
179,242
0%
0%
0%
8.4%
216,127
17,006
50,540
357
284,030
0%
91,743
8,257
308
100,308
0%
143,359
7,833
13,370
190
2,753
167,505
4.7%
600,312
904,438
24,839
24,839
86,943
189,650
1,145
1,515
50,408
2,753
715,992
1,173,603
(1)MrBobbinwasappointedasManagingPrincipalofArgyleLawyerson1November2008
(2)AllexecutivesoftheGroupandCompanyhavebeendisclosed
(3)Cashbonusesrelatingtothe2009yearwereallocatedtoMrBobbinin2010
18
ACN120394194
Remunerationofkeymanagementpersonnel(KMP)andthethreehighestpaidexecutivesoftheCompanyandtheGroup(5)
Table2:Remunerationfortheperiodended30June2008
Shortterm
Nonexecutivedirectors
JDawkinsChairman
ATregonning
Subtotalnonexecutivedirectors
Executivedirectors
THennManagingDirector(1)
GFowlerManagingDirector/CEO(2)
Subtotalexecutivedirectors
Otherkeymanagementpersonnel
BTaylorManagingPrincipal,Talbot
Olivier(3)(6)
BDaviesManagingPrincipal,Brett
DaviesLawyers(3)
JMRuddChiefFinancial
Officer/CompanySecretary(4)
SubtotalotherKMP
Total
Salary&Fees
CashBonus
Non
monetary
benefits
Post
Employment
Longterm
Sharebased
Payment
Other
Super
annuation
LongService
Benefits
Shares
Total
Performance
related
43,333
43,333
30,000
45,833
75,833
73,333
45,833
119,166
2,293
22,917
25,210
22,540
2,062
24,602
65
65
406,530
406,530
24,833
431,574
456,407
81,157
15,093
7,304
87
103,641
0%
0%
0%
0%
8%
73,793
6,641
277
80,711
0%
81,138
23,862
158
105,158
0%
236,088
304,631
15,093
15,093
37,807
138,242
522
587
406,530
283,510
865,083
(1)MrHennresignedasManagingDirectoron28April2008
(2)MrFowlerwasappointedManagingDirector/CEO28April2008
(3)MrTaylorandMrDavieswereappointedasManagingPrincipalsofTalbotOlivierandBrettDaviesLawyers,respectively,on10August2007
(4)MrsRuddwasappointedFinancialControlleron4September2007andChiefFinancialOfficer/CompanySecretaryon28August2008
(5)AllexecutivesoftheGroupandCompanyhavebeendisclosed
(6)Cashbonusesrelatingtothe2008financialyearwasallocatedtoMrTaylorin2009.
19
ACN120394194
Signedinaccordancewitharesolutionofthedirectors.
GFowler
ManagingDirector
Perth,25September2009
20
Auditor's Independence Declaration to the Directors of Integrated Legal

Holdings Limited
In relation to our audit of the financial report of Integrated Legal Holdings Limited for the financial year
ended 30 June 2009, to the best of my knowledge and belief, there have been no contraventions of the
auditor independence requirements of the Corporations Act 2001 or any applicable code of professional
conduct.
Ernst & Young
G H Meyerowitz
Partner
Perth
25 September 2009
Liability limited by a scheme approved

under Professional Standards Legislation
GHM:NR:ILH:037
ACN120394194
CorporateGovernanceStatement
The Board of Directors of Integrated Legal Holdings Limited is responsible for the corporate
governance of the Group. The Board guides and monitors the business and affairs of Integrated
LegalHoldingsLimitedonbehalfoftheshareholdersbywhomtheyareelectedandtowhotheyare
accountable.
The table below summarises the Companys compliance with the Corporate Governance Councils
Recommendations:
Recommendation
Principal1Laysolidfoundationsformanagementandoversight
Comply
Yes/No
Reference/
Explanation
1.1
CompaniesshouldestablishthefunctionsreservedtotheBoardandthose
delegatedtoseniorexecutivesanddisclosethosefunctions.
Yes
1.2
Companiesshoulddisclosetheprocessforevaluatingtheperformanceof
seniorexecutives.
Yes
1.3
Companiesshouldprovidetheinformationindicatedintheguidetoreporting
onPrincipal1.
Yes
Principal2StructuretheBoardtoaddvalue
2.1
AmajorityoftheBoardshouldbeindependentDirectors.
Yes
(a)
2.2
ThechairshouldbeanindependentDirector.
Yes
(a)
2.3
Therolesofchairandchiefexecutiveofficershouldnotbeexercisedbythe
sameindividual.
Yes
2.4
TheBoardshouldestablishanominationcommittee.
No
(b)
2.5
Companiesshoulddisclosetheprocessforevaluatingtheperformanceofthe
Board,itscommitteesandindividualDirectors.
Yes
2.6
onPrincipal2.
Yes
Principal3Promoteethicalandresponsibledecisionmaking
3.1
Companiesshouldestablishacodeofconductanddisclosethecodeora
summaryofthecodeasto:
ThepracticesnecessarytomaintainconfidenceintheCompanys
integrity.
Thepracticesnecessarytotakeintoaccounttheirlegalobligations
andthereasonableexpectationsoftheirstakeholders.
Theresponsibilityandaccountabilityofindividualsforreportingand
investigatingreportsofunethicalpractices.
Yes
3.2
CompaniesshouldestablishapolicyconcerningtradinginCompanysecurities
byDirectors,seniorexecutivesandemployees,anddisclosethepolicyora
summaryofthatpolicy.
Yes
3.3
onPrincipal3.
Yes
Principal4Safeguardintegrityinfinancialreporting
4.1
TheBoardshouldestablishanauditcommittee.
Yes
4.2
Theauditcommitteeshouldbestructuredsothatit:
ConsistsonlyofnonexecutiveDirectors
ConsistsofamajorityofindependentDirectors
Ischairedbyanindependentchair,whoisnotchairoftheBoard
Hasatleastthreemembers
No
(c)
4.3
Theauditcommitteeshouldhaveaformalcharter.
Yes
22
ACN120394194
CorporateGovernanceStatement(continued)
4.4
Recommendation
onPrincipal4.
Principal5Maketimelyandbalanceddisclosure
Comply
Yes/No
Reference/
Explanation
Yes
5.1
Companiesshouldestablishwrittenpoliciesdesignedtoensurecompliance
withASXlistingruledisclosurerequirementsandtoensureaccountabilityata
seniorexecutivelevelforthatcomplianceanddisclosethosepoliciesora
summaryofthosepolicies.
Yes
5.2
onPrincipal5.
Yes
Principal6Respecttherightsofshareholders
6.1
Companiesshoulddesignacommunicationspolicyforpromotingeffective
communicationwithshareholdersandencouragingtheirparticipationat
generalmeetingsanddisclosetheirpolicyorasummaryofthatpolicy.
Yes
6.2
onPrincipal6.
Yes
Principal7Recogniseandmanagerisk
7.1
Companiesshouldestablishpoliciesfortheoversightandmanagementof
materialbusinessrisksanddiscloseasummaryofthosepolicies.
Yes
7.2
TheBoardshouldrequiremanagementtodesignandimplementtherisk
managementandinternalcontrolsystemtomanagetheCompanysmaterial
businessrisksandreporttoitonwhetherthoserisksarebeingmanaged
effectively.TheBoardshoulddisclosethatmanagementhasreportedtoitas
totheeffectivenessoftheCompanysmanagementofthismaterialbusiness
risks.
Yes
7.3
TheBoardshoulddisclosewhetherithasreceivedassurancefromthechief
executiveofficer(orequivalent)andthechieffinancialofficer(orequivalent)
thatthedeclarationprovidedinaccordancewithsection295Aofthe
CorporationsActisfoundedonasoundsystemofriskmanagementand
internalcontrolandthatthesystemisoperatingeffectivelyinallmaterial
respectsinrelationtofinancialreportingrisks.
onPrincipal7.
Yes
Yes
7.4
Principal8Remuneratefairlyandresponsibly
8.1
TheBoardshouldestablisharemunerationcommittee.
No
(d)
8.2
CompaniesshouldclearlydistinguishthestructureofnonexecutiveDirectors
remunerationfromthatofexecutiveDirectorsandseniorexecutives.
Yes
8.3
onPrincipal8.
Yes
Integrated Legal Holdings Limiteds corporate governance practices were in place throughout the
yearended30June2009.ThefollowingarereferencenotestothePrincipalRecommendationtable:
a) Whilst both nonexecutive Directors of Integrated Legal Holdings Limited own shares in the
Company,theyareconsideredtobeindependentastheyareindependentofmanagementand
free from any business or other relationship that could materially interfere with or could
reasonably be perceived to materially interfere with the exercise of their unfettered and
independentjudgement.
23
ACN120394194
b) No formal nomination committee or procedures have been adopted for the identification,
appointmentandreviewoftheBoardmembership,buttheBoardiscommittedtoaninformal
assessment process, facilitated by the Chair in consultation with the Companys professional
advisors.
c) The audit committee membership includes an executive Director, being the Managing
Director/CEO. Inclusion of the Managing Director/CEO is required to satisfy the
recommendationthatthecommitteemustconsistofatleastthreemembers.
d) No formal remuneration committee has been appointed. The remuneration of an executive

Director will be decided by the Board, without the affected executive Director participating in
that decisionmaking process. The determination of an executive Directors remuneration will
bemadebytheBoardhavingregardtotheinputsandvaluetotheGroupofthecontributionsby
theexecutiveDirectorinconsultantwiththeCompanysprofessionaladvisors.
The total maximum remuneration of nonexecutive Directors is the subject of a shareholder

resolution in accordance with the Companys constitution, the Corporations Act and the ASX
listingrules,asapplicable.ThedeterminationofnonexecutiveDirectorsremunerationwithin
thatmaximumwillbemadebytheBoardhavingregardtotheinputsandvaluetotheGroupof
therespectivecontributionsbyeachnonexecutiveDirector.
Variouscorporategovernancepracticesarediscussedwithinthisstatement.Forfurtherinformation
on corporate governance policies adopted by Integrated Legal Holdings Limited, refer to The
Companyswebsite:
www.ilh.com.au
Boardfunctions
The Board seeks to identify the expectations of the shareholders, as well as other regulatory and
ethical expectations and obligations. In addition, the Board is responsible for identifying areas of
significantbusinessriskandensuringarrangementsareinplacetoadequatelymanagethoserisks.
To ensure that the Board is well equipped to discharge its responsibilities it has established
guidelinesforthenominationandselectionofdirectorsandfortheoperationoftheBoard.
TheresponsibilityfortheoperationandadministrationoftheGroupisdelegatedbytheBoardtothe
ManagingDirector/CEOandtheexecutivemanagementteam.TheBoardensuresthatthisteamis
appropriately qualified and experienced to discharge their responsibilities and has in place
procedurestoassesstheperformanceoftheCEOandtheexecutivemanagementteam.
Whilst at all times the Board retains full responsibility for guiding and monitoring the Group, in
dischargingitsstewardshipitmakesuseofsubcommittees.Specialistcommitteesareabletofocus
onaparticularresponsibilityandprovideinformedfeedbacktotheBoard.
To this end the Board has established an audit committee. The roles and responsibilities of this
committeearediscussedthroughoutthisCorporateGovernanceStatement.
24
ACN120394194
TheBoardisresponsibleforensuringthatmanagementsobjectivesandactivitiesarealignedwith
theexpectationsandriskidentifiedbytheBoard.TheBoardhasanumberofmechanismsinplace
toensurethisisachievedincluding:
Board approval of a strategic plan designed to meet stakeholders needs and manage
businessrisk;
Ongoingdevelopmentofthestrategicplanandapprovinginitiativesandstrategiesdesigned
toensurethecontinuedgrowthandsuccessoftheentity;and
Implementation of budgets by management and monitoring progress against budget via
the establishment and reporting of both financial and nonfinancial key performance
indicators.
OtherfunctionsreservedtotheBoardinclude:
Approvaloftheannualandhalfyearlyfinancialreports;
Approvingandmonitoringtheprogressofmajorcapitalexpenditure,capital management,
andacquisitionsanddivestitures;
Ensuringthatanysignificantrisksthatariseareidentified,assessed,appropriatelymanaged
andmonitored;and
Reportingtoshareholders.
StructureoftheBoard
Theskills,experienceandexpertiserelevanttothepositionofdirectorheldbyeachdirectorinoffice
at the date of the annual report is included in the Directors Report. Directors of Integrated Legal
HoldingsLimitedareconsideredtobeindependentwhentheyareindependentofmanagementand
free from any business or other relationship that could materially interfere with or could
reasonably be perceived to materially interfere with the exercise of their unfettered and
independentjudgement.
In the context of director independence, 'materiality' is considered from both the Group and
individual director perspective. The determination of materiality requires consideration of both
quantitative and qualitative elements. An item is presumed to be quantitatively immaterial if it is
equaltoorlessthan5%oftheappropriatebaseamount.Itispresumedtobematerial(unlessthere
isqualitativeevidencetothecontrary)ifitisequaltoorgreaterthan10%oftheappropriatebase
amount.
Qualitative factors considered include whether a relationship is strategically important, the

competitive landscape, the nature of the relationship and the contractual or other arrangements
governingitandotherfactorsthatpointtotheactualabilityofthedirectorinquestiontoshapethe
directionoftheGroupsloyalty.
In accordance with the definition of independence above, and the materiality thresholds set, the
followingdirectorsofIntegratedLegalHoldingsLimitedareconsideredtobeindependent:
Name
Position
JDawkins
Chairman,NonexecutiveDirector
ATregonning
NonexecutiveDirector
TheBoardrecognisestheCorporateGovernanceCouncilsrecommendationsthattheChairshould
beanindependentDirector.
25
ACN120394194
There are procedures in place, agreed by the Board, to enable Directors in furtherance of their
dutiestoseekindependentprofessionaladviceattheCompanysexpense.
TheterminofficeheldbyeachDirectorinofficeatthedateofthisreportisasfollows:
Name
TerminOffice
JDawkins
2years,11months
ATregonning
2years,11months
GFowler
1year,4months
ForadditionaldetailsregardingBoardappointments,pleaserefertoourwebsite:
www.ilh.com.au
Performance
TheperformanceoftheBoardandkeyexecutivesisreviewedregularlyagainstbothmeasurableand
qualitativeindicators.TheperformancecriteriaagainstwhichDirectorsandexecutivesareassessed
arealignedwiththefinancialandnonfinancialobjectivesofIntegratedLegalHoldingsLimited.
Directorswhoseperformanceisconsistentlyunsatisfactorymaybeaskedtoretire.
Tradingpolicy
UndertheCompanysShareTradingPolicyanexecutiveorDirectormustnottradeinanysecurities
oftheCompanyatanytimewhentheyareinpossessionofunpublished,pricesensitiveinformation
inrelationtothosesecurities.
Beforecommencingtotrade,anexecutivemustfirstobtaintheapprovaloftheCompanySecretary
todosoandaDirectormustfirstobtaintheapprovaloftheChairman.
AdditionalrestrictionsontradingintheCompanyssecuritiesapplytoDirectorsoftheCompany,all
executives reporting directly to the Managing Director and any other employees of the Company
considered appropriate by the Managing Director and Company Secretary from time to time
(RestrictedPersons).
Restricted Persons are prohibited from trading in the Companys securities during the following
designatedclosedperiods:
inthetwomonthsimmediatelyprecedingthereleaseoftheCompanyshalfyearfinancial
results;or
in the two months immediately preceding the release of the Companys full year financial
results.
In exceptional circumstances clearance may be given for a Restricted Person to sell (but not to
purchase) securities when they would otherwise be prohibited from doing so but not while there
exists any matter which constitutes unpublished pricesensitive information in relation to the
Companyssecurities.
AsrequiredbytheASXlistingrules,theCompanynotifiestheASXofanytransactionconductedby
DirectorsinthesecuritiesoftheCompany.
26
ACN120394194
Auditcommittee
The Board has established an audit committee, which operates under a charter approved by the
Board. It is the Boards responsibility to ensure that an effective internal control framework exists
withintheentity.Thisincludesinternalcontrolstodealwithboththeeffectivenessandefficiencyof
significant business processes, the safeguarding of assets, the maintenance of proper accounting
records,andthereliabilityoffinancialinformationaswellasnonfinancialconsiderationssuchasthe
benchmarkingofoperationalkeyperformanceindicators.TheBoardhasdelegatedresponsibilityfor
establishing and maintaining a framework of internal control and ethical standards to the audit
committee.
The committee also provides the Board with additional assurance regarding the reliability of
financialinformationforinclusioninthefinancialreports.
Themembersoftheauditcommitteeduringtheyearwere:
ATregonningChairman
JDawkins
GFowler
Qualificationsofauditcommitteemembers
MsTregonninghasextensiveexperienceinfinanceandriskmanagementinbothpublicpracticeand
commerceholdingdirectorshipsandseniorpositionsinseveralmajorcorporations.Sheisthepast
chairmanoftheInstituteofCharteredAccountantsinWesternAustraliaandmemberofitsNational
Council. Ms Tregonning is a graduate of The University of Western Australia, a Fellow of The
InstituteofCharteredAccountantsandGraduateoftheAustralianInstituteofCompanyDirectors.
MrDawkinsisagraduateinEconomicsfromtheUniversityofWesternAustraliaandhassignificant
experienceinthemanagementofcompanies,havingservedasdirectorofanumberofcorporations.
HehasconsultedtoseverallargeAustralianandoverseescompanies,theWorldBankandtheOECD.
Untilhisretirementfrompoliticsin1994heservedasaMinisterintheFederalGovernmentfor10
yearsandintheHouseofRepresentativesfor18years.
Mr Fowler was previously Chief Executive Officer of listed accounting and financial services
consolidatorWHKGroup Limited.Hespentover15yearsinseniormanagementroleswiththeBT
Financial Group including Group Chief Financial Officer, Chief Executive Officer of BT Funds
ManagementNZ,andChiefExecutiveOfficerofBTPortfolioServices(includingBTWrap).MrFowler
is a business studies graduate of The University of Technology, Sydney, a Certified Practicing
AccountantandagraduateoftheAustralianInstituteofCompanyDirectors.
Risk
The Board acknowledges the Revised Supplementary Guidance to Principal 7 issued by the ASX in
June 2008 and has continued its proactive approach to risk management. The identification and
effective management of risk, including calculated risktaking is viewed as an essential part of the
Companysapproachtocreatinglongtermshareholdervalue.
In recognition of this, the Board determines the Companys risk profile and is responsible for
overseeingandapprovingriskmanagementstrategyandpolicies,internalcomplianceandinternal
control.IndoingsotheBoardhastakentheviewthatitiscrucialforallBoardmemberstobeapart
ofthisprocessandassuch,hasnotestablishedaseparateriskmanagementcommittee.
27
ACN120394194
The Board oversees an annual assessment of the effectiveness of risk management and internal
compliance and control. The tasks of undertaking and assessing risk management and internal
controleffectivenessaredelegatedtomanagementthroughtheManagingDirector/CEO,including
responsibilityforthedaytodaydesignandimplementationoftheCompanysriskmanagementand
internal control system. Management reports to the Board on the Companys key risks and the
extenttowhichitbelievestheserisksarebeingadequatelymanaged.
The Board has a number of mechanisms in place to ensure that managements objectives and
activities are aligned with the risks identified by the Board. These include the implementation of
Board approved operating plans and budgets and Board monitoring of progress against these
budgets, including the establishment and monitoring of KPIs of both a financial and nonfinancial
nature.
As part of its duties, the Companys management conducts routine reviews with the objective of
providingassuranceon theadequacyoftheCompanysriskframeworkand the completenessand
accuracyofriskreportingbymanagement.
Tothisend,comprehensivepracticesareinplacethataredirectedtowardsachievingthefollowing
objectivesinrelationtotherequirementsofPrincipal7:
EffectiveandefficientuseoftheCompanysresources
Compliancewithapplicablelawsandregulations
Preparationofreliablepublishedfinancialinformation
CEOandCFOCertification
In accordance with section 295A of the Corporations Act, the Chief Executive Officer and Chief
FinancialOfficerhaveprovidedawrittenstatementtotheBoardthat:
TheirviewprovidedontheCompanysfinancialreportisfoundedonasoundsystemofrisk
management and internal compliance and control which implements the financial policies
adoptedbytheBoard;and
The Companys risk management and internal compliance and control system is operating
effectivelyinallmaterialrespects.
TheBoardagreeswiththeviewsoftheASXonthismatterandnotesthatduetoitsnature,internal
controlassurancefromtheCEOandCFOcanonlybereasonableratherthanabsolute.Thisisdueto
suchfactorsastheneedforjudgement,theuseoftestingonasamplebasis,theinherentlimitations
ininternalcontrolandbecausemuchoftheevidenceavailableispersuasiveratherthanconclusive
andthereforeisnotandcannotbedesignedtodetectallweaknessesincontrolprocedures.
Remuneration
ItistheCompanysobjectivetoprovidemaximumstakeholderbenefitfromtheretentionofahigh
quality Board and executive team by remunerating directors and key executives fairly and
appropriatelywithreferencetorelevantemploymentmarketconditions.Toassistinachievingthis
objective,theBoardlinksthenatureandamountofexecutivedirectorsandofficersremuneration
totheCompanysfinancialandoperationalperformance.
28
ACN120394194
Theexpectedoutcomesoftheremunerationstructureare:
Retentionandmotivationofkeyexecutives.
AttractionofhighqualitymanagementtotheCompany.
Performance incentives that allow executives to share in the success of Integrated Legal
HoldingsLimited.
For a full discussion of the Companys remuneration philosophy and framework and the
remuneration received by Directors and executives in the current period please refer to the
RemunerationReport,whichiscontainedwithintheDirectorsReport.
Thereisnoschemetoprovideretirementbenefitstononexecutivedirectors.
The Board is responsible for determining and reviewing compensation arrangements for the
Directorsthemselvesandtheexecutiveteam.
Shareholdercommunicationpolicy
Pursuant to Principal 6, Integrated Legal Holdings Limiteds objective is to promote effective
communicationwithitsshareholdersatalltimes.
IntegratedLegalHoldingsLimitediscommittedto:
Ensuring that shareholders and the financial markets are provided with full and timely
information about Integrated Legal Holdings Limiteds activities in a balanced and
understandableway.
Complying with continuous disclosure obligations contained in applicable ASX listing rules
andtheCorporationsActinAustralia.
Communicating effectively with its shareholders and making it easier for shareholders to
communicatewithIntegratedLegalHoldingsLimited.
To promote effective communication with shareholders and encourage effective participation at

generalmeetings,informationiscommunicatedtoshareholders:
ThroughthereleaseofinformationtothemarketviatheASX
ThroughthedistributionoftheannualreportandNoticesofAnnualGeneralMeeting
Throughshareholdermeetingsandinvestorrelationspresentations
Throughlettersandotherformsofcommunicationsdirectlytoshareholders
By posting relevant information on Integrated Legal Holdings Limiteds website
www.ilh.com.au
TheCompanyswebsitewww.ilh.com.auhasadedicatedsectionforthepurposesofpublishingall
importantCompanyinformationandrelevantannouncementsmadetothemarket.
The external auditors are required to attend the Annual General Meeting and are available to
answeranyshareholderquestionsabout the conductionof the auditandpreparationof theaudit
report.
29
ACN120394194
BalanceSheet
ASAT30JUNE2009
ASSETS
CurrentAssets
Cashandcashequivalents
Tradeandotherreceivables
Workinprogress
TotalCurrentAssets
NonCurrentAssets
Receivables
Plantandequipment
Prepayments
Goodwill
Intangibleassets
Investmentsinsubsidiaries
Deferredtaxassets
Otherassets
TotalNonCurrentAssets
TOTALASSETS
LIABILITIES
CurrentLiabilities
Incometaxpayable
Provisions
Otherliabilities
TotalCurrentLiabilities
NonCurrentLiabilities
Provisions
Otherliabilities
TotalNonCurrentLiabilities
TOTALLIABILITIES
NETASSETS
EQUITY
IssuedCapital
AccumulatedLosses
Reserves
TOTALEQUITY
Note
10
11
12
13
14
15
16
17
7
18
19
20
7
21
22
20
21
22
23
24
25
CONSOLIDATED
2009
2008
$
$
600,694
5,626,766
5,616,233
2,651,518
1,370,212
1,084,352
7,587,139
9,362,636
691,360
192,836
63,016
10,372,263
6,330,233
100,980
136,620
464,147
410,647
2,677
2,524
11,694,443
7,072,860
19,281,582
16,435,496
1,738,222
1,081,009
1,244,330
169,764
157,011
968,272
459,466
173,111
200,000
3,799,029
2,392,156
1,064,105
18,708
177,620
119,986
378,422
1,620,147
138,694
5,419,176
2,530,850
2009
$
PARENT
2008
$
547,437
107,370
654,807
10,330,517
5,023
63,016
2,070,000
712,888
297,357
2,677
13,481,478
14,136,285
222,161
723,000
157,011
23,410
1,125,582
1,000,000
819
1,000,819
2,126,401
3,544,723
22,847
3,567,570
5,572,639
3,184
2,520,000
712,886
357,817
2,524
9,169,050
12,736,620
146,611
968,272
10,501
1,125,384
223
223
1,125,607
13,862,406
13,904,646
12,009,884
11,611,013
30,504,813
(16,641,034)
(1,373)
29,729,975
(15,823,844)
(1,485)
30,504,813
(18,493,556)
(1,373)
29,729,975
(18,117,477)
(1,485)
13,862,406
13,904,646
12,009,884
11,611,013
TheaboveBalanceSheetshouldbereadinconjunctionwiththeaccompanyingnotes.
30
ACN120394194
IncomeStatement
FORTHEYEARENDED30JUNE2009
Professionalfees
Interestrevenue
Dividendsreceived
Otherrevenue
TotalRevenue
Occupancyexpenses
Salariesandemployeebenefits
expenses
Depreciationandamortisationexpenses
Advertisingandmarketingexpenses
Administrativeexpenses
Otherexpenses
Financecosts
Sharebasedpaymentsexpense
Impairmentloss
Totalexpenses
Profit/(loss)beforeincometax
Incometax(expense)/benefit
Profit/(loss)afterincometax
Note
6(a)
6(b)
6(c)
6(d)
6(e)
15(c)
CONSOLIDATED
2009
2008
$
$
16,388,522
10,175,930
158,585
429,609
85
49
399,029
82,853
16,946,221
10,688,441
(1,619,855)
(622,545)
PARENT
2009
2008
$
$
151,559
391,794
2,293,718
49
2,445,277
391,843
(75,148)
(26,258)
(10,167,466)
(189,496)
(209,481)
(2,602,316)
(534,936)
(57,148)
(14,838)
(450,000)
(15,845,536)
1,100,685
(506,810)
593,875
(5,031,511)
(122,799)
(122,592)
(1,495,523)
(159,092)
(25,029)
(406,530)
(215,826)
(8,201,447)
2,486,994
(942,691)
1,544,303
(663,216)
(1,569)
(2,152)
(497,879)
(30,537)
(23,061)
(2,753)
(450,000)
(1,746,315)
698,962
336,024
1,034,986
(332,628)
(314)
(4,164)
(379,498)
(617)
(66)
(406,530)
(96,164)
(1,246,239)
(854,396)
105,066
(749,330)
Netprofit/(loss)fortheyear
593,875
1,544,303
1,034,986
(749,330)
Basicprofit/(loss)pershare(cents)
Dilutedprofit/(loss)pershare(cents)
9
9
0.89
0.89
2.66
2.66
TheaboveIncomeStatementshouldbereadinconjunctionwiththeaccompanyingnotes.
31
ACN120394194
CashFlowStatement
Cashflowsfromoperatingactivities
Receiptsfromcustomers
Interestreceived
Dividendsreceived
Receiptsfromotherrevenue
Paymentstosuppliersandemployees
Interestandothercostsoffinance
Paid
Incometaxpaid
Netcashinflows/(outflows)from
operatingactivities
Cashflowsfrominvestingactivities
Purchaseofplantandequipment
Proceedsonthedisposalofplant
andequipment
Paymentforavailableforsale
investments
Paymentfortheacquisitionof
businessesnetofcashacquired
Netcashoutflowsfrominvestingactivities
Cashflowsfromfinancingactivities
Proceedsfromloansreceived
Repaymentofborrowings
Dividendspaid
Netloansadvancedtorelatedparties
Paymentforsettlementofliability
assumedonacquisitionofLawCentral
CoPtyLtd
Proceedsfromissueofshares
Paymentsforshareissueexpenses
Netcashinflows/(outflows)from
financingactivities
Netdecreaseincashheld
Cashandcashequivalentsatthe
beginningofthefinancialperiod
Cashandcashequivalentsattheendof
thefinancialperiod
Note
CONSOLIDATED
2009
2008
$
$
14,744,556
8,002,981
159,533
428,661
44
49
399,029
82,853
(15,623,518)
(7,303,805)
PARENT
2009
$
2008
$
167,016
2,293,677
(437,010)
376,337
49
(593,222)
(23,832)
(1,308,557)
(14,937)
(76,371)
(23,061)
(1,308,557)
26(a)
(1,652,745)
(180,612)
1,119,431
(80,826)
692,065
(3,408)
2,326
1,000
(4,009)
(6,652,695)
(6,736,530)
232,057
(182,689)
30
(3,731,403)
(3,909,689)
2,199,372
(386,764)
(1,411,065)
(214,665)
3,628,130
(1,007,703)
401,543
(5,160,891)
10
(3,408)
1,723,000
(1,411,065)
(3,997,878)
(66)
(216,902)
(3,498)
(4,009)
(2,700,000)
(2,707,507)
(4,940,030)
3,628,130
(1,007,703)
2,455,130
(3,161,969)
(3,685,943)
(2,997,286)
(2,319,603)
(5,244,012)
5,626,766
8,788,735
3,544,723
8,788,735
465,875
5,626,766
547,437
3,544,723
TheaboveCashFlowStatementshouldbereadinconjunctionwiththeaccompanyingnotes.
32
ACN120394194
StatementofChangesinEquity
CONSOLIDATED
Balanceasat1July2007
Issued
Capital
Accumulated
Losses
NetUnrealised
Gains/(Losses)
Reserve
Total
Equity
17,368,352
(17,368,147)
Netfairvaluelossesonavailableforsaleinvestments
Totalincomeandexpenserecognisedinequityfor
theyear
Profitfortheyear
1,544,303
Totalincomeandexpenserecognisedfortheyear
Issueofshares
205
(1,485)
(1,485)
(1,485)
1,544,303
(1,485)
(1,485)
1,544,303
1,542,818
13,045,708
13,045,708
406,530
406,530
Transactioncostsonshareissues
Incometaxonitemstakendirectlytoortransferred
fromequity
(1,514,575)
(1,514,575)
423,960
423,960
Balanceasat30June2008
29,729,975
(15,823,844)
(1,485)
13,904,646
Issued
Capital
Accumulated
Losses
NetUnrealised
Gains/(Losses)
Reserve
Total
Equity
Sharebasedpayment
CONSOLIDATED
Netfairvalueprofitsonavailableforsale
investments
theyear
29,729,975
(15,823,844)
(1,485)
13,904,646
112
112
112
112
Profitfortheyear
593,875
593,875
593,875
112
593,987
Dividendspaid
(1,411,065)
(1,411,065)
774,838
(1,373)
(13,862,406)
Issueofshares
774,838
30,504,813
(16,641,034)
TheaboveStatementofChangesinEquityshouldbereadinconjunctionwiththeaccompanying
notes.
33
ACN120394194
StatementofChangesinEquity
PARENT
Issued
Capital
Accumulated
Losses
NetUnrealised
Gains/(Losses)
Reserve
Total
Equity
17,368,352
(17,368,147)
Netfairvaluelossesonavailableforsaleinvestments
theyear
Lossfortheyear
(749,330)
Issueofshares
205
(1,485)
(1,485)
(1,485)
(749,330)
(1,485)
(1,485)
(749,330)
(750,815)
13,045,708
13,045,708
406,530
406,530
Transactioncostsonshareissues
Incometaxonitemstakendirectlytoortransferred
fromequity
(1,514,575)
(1,514,575)
423,960
423,960
29,729,975
(1,485)
11,611,013
Sharebasedpayment
(18,117,477)
PARENT
Netfairvalueprofitsonavailableforsale
investments
theyear
Issued
Capital
Accumulated
Losses
NetUnrealised
Gains/(Losses)
Reserve
Total
Equity
29,729,975
(18,117,477)
(1,485)
11,611,013
112
112
112
112
Profitfortheyear
1,034,986
1,034,986
1,034,986
112
1,035,098
Dividendspaid
(1,411,065)
(1,411,065)
774,838
(1,373)
12,009,884
Issueofshares
774,838
30,504,813
(18,493,556)
TheaboveStatementofChangesinEquityshouldbereadinconjunctionwiththeaccompanying
notes.
34
ACN120394194
NotestotheFinancialStatements
1) CORPORATEINFORMATION
ThefinancialreportofIntegratedLegalHoldingsLimited(theCompany)fortheyearended30June
2009wasauthorisedforissueinaccordancewitharesolutionofdirectorson25September2009.
Integrated Legal Holdings Limited (the parent) is a company limited by shares incorporated in
Australia whose shares are publicly traded on the Australian Stock Exchange. The company was
domiciledinAustralia.
The nature of the operations and principal activities of the Group are described in the Directors'
Report.
2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES
Basisofpreparation
The financial report is a general purpose financial report, which has been prepared in accordance
with the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board. The financial report
has also been prepared on a historical cost basis, except for availableforsale investments, which
havebeenmeasuredatfairvalue.
ThefinancialreportispresentedinAustraliandollars.
a) CompliancewithIFRS
The financial report complies with Australian Accounting Standards and International Financial
ReportingStandards(IFRS)asissuedbytheInternationalAccountingStandardsBoard.
b) Newaccountingstandardsandinterpretations
AustralianAccountingStandardsandInterpretationsthathaverecentlybeenissuedoramendedbut
arenotyeteffectivehavenotbeenadoptedbytheGroupfortheannualreportingperiodended30
June2009.Theseareoutlinedinthefollowingtable.
35
ACN120394194
NotestotheFinancialStatements(continued)
2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)
b) Newaccountingstandardsandinterpretations(continued)
Reference
Title
Summary
Application
dateof
standard
1January2009
AASB8andAASB
20073
OperatingSegmentsand
consequentialamendmentstoother
AustralianAccountingStandards
NewStandardreplacingAASB114SegmentReporting,
whichadoptsamanagementreportingapproachto
segmentreporting.
AASB123
(Revised)and
AASB20076
BorrowingCostsandconsequential
amendmentstootherAustralian
AccountingStandards
TheamendmentstoAASB123requirethatallborrowing
costsassociatedwithaqualifyingassetbecapitalised.
1January2009
AASB101
(Revised),AASB
20078andAASB
200710
PresentationofFinancialStatements
andconsequentialamendmentsto
otherAustralianAccounting
Standards
1January2009
AASB20081
AmendmentstoAustralian
AccountingStandardShare
basedpayments:Vesting
ConditionsandCancellations
Introducesastatementofcomprehensiveincome.Other
revisionsincludeimpactsonthepresentationofitemsin
thestatementofchangesinequity,newpresentation
requirementsforrestatementsorreclassificationsofitems
inthefinancialstatements,changesinthepresentation
requirementsfordividendsandchangestothetitlesofthe
financialstatements.
Theamendmentsclarifythedefinitionofvesting
conditions,introducingthetermnonvestingconditions
forconditionsotherthanvestingconditionsasspecifically
definedandprescribetheaccountingtreatmentofan
awardthatiseffectivelycancelledbecauseanonvesting
conditionisnotsatisfied.
1January2009
ImpactonGroup financialreport
AASB8isadisclosurestandardsoitwillhaveno
directimpactontheamountsincludedinthe
Groupsfinancialstatements.Theamendments
mayhaveanimpactontheGroupssegment
disclosures.
TheGrouphasnoqualifyingassetsandassuchthe
amendmentsarenotexpectedtohaveanyimpact
ontheGroup'sfinancialreport.
Theseamendmentsareonlyexpectedtoaffectthe
presentationoftheGroupsfinancialreportandwill
nothaveadirectimpactonthemeasurementand
recognitionofamountsdisclosedinthefinancial
report.TheGrouphasnotdeterminedatthisstage
whethertopresentasinglestatementof
comprehensiveincomeortwoseparatestatements.
TheGrouphasnotyetdeterminedtheextentofthe
impactoftheamendments,ifany.
Application
datefor
Group
1July2009
1July2009
1July2009
1July2009
36
ACN120394194
Reference
Title
AASB3(Revised)
BusinessCombinations
AASB127
(Revised)
ConsolidatedandSeparate
FinancialStatements
AASB20083
AccountingStandardsarisingfrom
AASB3andAASB127
Summary
Therevisedstandardintroducesanumberofchangesto
theaccountingforbusinesscombinations,themost
significantofwhichincludestherequirementtohaveto
expensetransactioncostsandachoiceforeachbusiness
combinationenteredintotomeasureanoncontrolling
interest(formerlyaminorityinterest)intheacquireeeither
atitsfairvalueoratitsproportionateinterestinthe
acquireesnetassets.Thischoicewilleffectivelyresultin
recognisinggoodwillrelatingto100%ofthebusiness
(applyingthefairvalueoption)orrecognisinggoodwill
relatingtothepercentageinterestacquired.Thechanges
applyprospectively.
Thereareanumberofchangesarisingfromtherevisionto
AASB127relatingtoachangesintheownershipinterestin
asubsidiarywithoutlossofcontrol,allocationoflossesofa
subsidiaryandaccountingforthelossofcontrolofa
subsidiaryspecificallyinrelationtoachangeinthe
ownershipinterestofasubsidiary(thatdoesnotresultin
lossofcontrol)suchatransactionwillbeaccountedforas
anequitytransaction.
Amendingstandardissuedasaconsequenceofrevisionsto
AASB3andAASB127.
Application
dateof
standard
1July2009
TheGroupmayenterintosomebusiness
combinationsduringthenextfinancialyear,at
whichpoint,acquisitionrelatedcostsmustbe
expensed.ThisisdifferenttotheGroupscurrent
policywhichissetoutinnote2(d).
Application
datefor
Group
1July2009
1July2009
IftheGroupchangesitsownershipinterestin
existingsubsidiariesinthefuture,thechangewill
beaccountedforasanequitytransaction.Thiswill
havenoimpactongoodwill,norwillitgiverisetoa
gainoralossintheGroupsincomestatement.
1July2009
1July2009
RefertoAASB3(Revised)andAASB127(Revised)
above.
1July2009
37
ACN120394194
Reference
Title
AASB20085
theAnnualImprovementsProject
AASB20086
FurtherAmendmentsto
arisingfromtheAnnual
ImprovementsProject
Summary
Theimprovementsprojectisanannualprojectthat
providesamechanismformakingnonurgent,but
necessary,amendmentstoIFRSs.TheIASBhasseparated
theamendmentsintotwoparts:PartIdealswithchanges
theIASBidentifiedresultinginaccountingchanges;PartII
dealswitheitherterminologyoreditorialamendmentsthat
theIASBbelieveswillhaveminimalimpact.
Thiswasthefirstomnibusofamendmentsissuedbythe
IASBarisingfromtheAnnualImprovementsProjectandit
isexpectedthatgoingforward,suchimprovementswillbe
issuedannuallytoremoveinconsistenciesandclarify
wordinginthestandards.
TheAASBissuedtheseamendmentsintwoseparate
amendingstandards;onedealingwiththeaccounting
changeseffectivefrom1January2009andtheother
dealingwithamendmentstoAASB5,whichwillbe
applicablefrom1July2009[referbelowAASB20086].
Thiswasthesecondomnibusofamendmentsissuedbythe
IASBarisingfromtheAnnualImprovementsProject.
RefertoAASB20085aboveformoredetails
Application
dateof
standard
1January2009
1July2009
Application
datefor
Group
1July2009
1July2009
38
ACN120394194
Reference
AASB20087
Title
AccountingStandardsCostofan
InvestmentinaSubsidiary,Jointly
ControlledEntityorAssociate
Summary
ThemainamendmentsofrelevancetoAustralianentities
arethosemadetoAASB127deletingthecostmethod
andrequiringalldividendsfromasubsidiary,jointly
controlledentityorassociatetoberecognisedinprofitor
lossinanentitysseparatefinancialstatements(ieparent
companyaccounts).Thedistinctionbetweenpreand
postacquisitionprofitsisnolongerrequired.However,
thepaymentofsuchdividendsrequirestheentityto
considerwhetherthereisanindicatorofimpairment.
AASB127hasalsobeenamendedtoeffectivelyallowthe
costofaninvestmentinasubsidiary,inlimited
reorganisations,tobebasedonthepreviouscarrying
amountofthesubsidiary(thatis,shareofequity)rather
thanitsfairvalue.
Application
dateof
standard
1January 2009
Application
datefor
Group
1July2009
39
ACN120394194
Reference
AASB20092
Title
AccountingStandardsImproving
DisclosuresaboutFinancial
Instruments[AASB4,AASB7,
AASB1023&AASB1038]
Summary
ThemainamendmenttoAASB7requiresfairvalue
measurementstobedisclosedbythesourceofinputs,
usingthefollowingthreelevelhierarchy:
quotedprices(unadjusted)inactivemarketsfor
identicalassetsorliabilities(Level1);
inputsotherthanquotedpricesincludedin
Level1thatareobservablefortheassetor
liability,eitherdirectly(asprices)orindirectly
(derivedfromprices)(Level2);and
inputsfortheassetorliabilitythatarenot
basedonobservablemarketdata(unobservable
inputs)(Level3).
TheseamendmentsarisefromtheissuanceofImproving
DisclosuresaboutFinancialInstruments(Amendmentsto
IFRS7)bytheIASBinMarch2009.
TheamendmentstoAASB4,AASB1023andAASB1037
compriseeditorialchangesresultingfromtheamendments
toAASB7.
Application
dateof
standard
Annualreporting
periodsbeginning
onorafter1
January2009that
endonorafter30
April2009.
Application
datefor
Group
1July2009
40
ACN120394194
Reference
Title
AASB20094
theAnnualImprovementsProject
[AASB2andAASB138andAASB
Interpretations9&16]
AASB20095
FurtherAmendmentsto
arisingfromtheAnnual
ImprovementsProject
[AASB5,8,101,107,117,118,
136&139]
Summary
TheamendmentstosomeStandardsresultinaccounting
changesforpresentation,recognitionormeasurement
purposes,whilesomeamendmentsthatrelateto
terminologyandeditorialchangesareexpectedtohaveno
orminimaleffectonaccounting.
TheseamendmentsarisefromtheissuanceoftheIASs
ImprovementstoIFRSs.Theamendmentspertainingto
IFRS5,8IAS1,7,17,36and39havebeenissuedin
AustraliaasAASB20095(referbelow).
TheamendmentstosomeStandardsresultinaccounting
changesforpresentation,recognitionormeasurement
purposes,whilesomeamendmentsthatrelateto
terminologyandeditorialchangesareexpectedtohaveno
orminimaleffectonaccounting.
ThemainamendmentofrelevancetoAustralianentitiesis
thatmadetoAASB117byremovingthespecificguidance
onclassifyinglandasaleasesothatonlythegeneral
guidanceremains.Assessinglandleasesbasedonthe
generalcriteriamayresultinmorelandleasesbeing
classifiedasfinanceleasesandifso,thetypeofasset
whichistoberecorded(intangiblevproperty,plantand
equipment)needstobedetermined.
TheseamendmentsarisefromtheissuanceoftheIASBs
ImprovementstotheIFRSs.TheAASBhasissuedthe
amendmentstoIFRS2,IAS38,IFRIC9asAASB20094
(referabove).
Application
dateof
standard
1July2009
1January2010
Application
datefor
Group
1July2009
1July2010
41
ACN120394194
Reference
AASB2009Y
Amendmentsto
International
Financial
Reporting
Standards
Title
AccountingStandards
[AASB5,7,107,112,136&139
andInterpretation17]
AmendmentstoIFRS2
Summary
Thesecompriseeditorialamendmentsandareexpectedto
havenomajorimpactontherequirementsoftheamended
pronouncements.
Theamendmentsclarifytheaccountingforgroupcash
settledsharebasedpaymenttransactions,inparticular:
thescopeofAASB2;and
theinteractionbetweenIFRS2andother
standards.
Anentitythatreceivesgoodsorservicesinasharebased
paymentarrangementmustaccountforthosegoodsor
servicesnomatterwhichentityinthegroupsettlesthe
transaction,andnomatterwhetherthetransactionis
settledinsharesorcash.
AgrouphasthesamemeaningasinIAS27Consolidated
andSeparateFinancialStatements,thatis,itincludesonly
aparentanditssubsidiaries.
Theamendmentsalsoincorporateguidancepreviously
includedinIFRIC8ScopeofIFRS2andIFRIC11IFRS2
GroupandTreasuryShareTransactions.Asaresult,IFRIC8
andIFRIC11havebeenwithdrawn.
Application
dateof
standard
1July2009
1January2010
Application
datefor
Group
1July2009
1July2010
42
ACN120394194
c) Basisofconsolidation
The consolidated financial statements comprise the financial statements of Integrated Legal
HoldingsLimitedanditssubsidiaries(asoutlinedinnote27(a))asat30Juneeachyear(theGroup).
SubsidiariesareallthoseentitiesoverwhichtheGrouphasthepowertogovernthefinancialand
operatingpoliciessoastoobtainbenefitsfromtheiractivities.Theexistenceandeffectofpotential
votingrightsthatarecurrentlyexercisableorconvertibleareconsideredwhenassessingwhethera
groupcontrolsanotherentity.
The financial statements of the subsidiaries are prepared for the same reporting period as the
parentcompany,usingconsistentaccountingpolicies.
In preparing the consolidated financial statements, all intercompany balances and transactions,
income and expenses and profit and losses resulting from intragroup transactions have been
eliminatedinfull.
Subsidiaries are fully consolidated from the date on which control is obtained by the Group and
ceasetobeconsolidatedfromthedateonwhichcontrolistransferredoutoftheGroup.
The acquisition of subsidiaries is accounted for using the purchase method of accounting. The
purchasemethodofaccountinginvolvesallocatingthecostofthebusinesscombinationtothefair
value of the assets acquired and the liabilities and contingent liabilities assumed at the date of
acquisition.
d) Businesscombinations
Thepurchasemethodofaccountingisusedtoaccountforallbusinesscombinationsregardlessof
whetherequityinstrumentsorotherassetsareacquired.Costismeasuredasthefairvalueofthe
assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs
directly attributable to the combination. Where equity instruments are issued in a business
combination, the fair value of the instruments is their published market price as at the date of
exchangeunless,inrarecircumstances,itcanbedemonstratedthatthepublishedpriceatthedate
ofexchangeisanunreliableindicatoroffairvalueandthatotherevidenceandvaluationmethods
provide a more reliable measure of fair value. Transaction costs arising on the issue of equity
instrumentsarerecogniseddirectlyinequity.
Exceptfornoncurrentassetsordisposalgroupsclassifiedasheldforsale(whicharemeasuredat
fair value less costs to sell), all identifiable assets acquired and liabilities and contingent liabilities
assumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate,
irrespective of the extent of any minority interest. The excess of the cost of the business
combination over the net fair value of the Groups share of the identifiable net assets acquired is
recognisedasgoodwill.IfthecostofacquisitionislessthantheGroupsshareofthenetfairvalueof
the identifiable net assets of the subsidiary, the difference is recognised as a gain in the income
statement, but only after a reassessment of the identification and measurement of the net assets
acquired.
43
ACN120394194
Where settlement of any part of the consideration is deferred, the amounts payable in the future
are discounted to their present value as at the date of exchange. The discount rate used is the
entitysincrementalborrowingrate,beingtherateatwhichasimilarborrowingcouldbeobtained
fromanindependentfinancierundercomparabletermsandconditions.
e) Segmentreporting
A business segment is a distinguishable component of the entity that is engaged in providing
productsorservicesthataresubjecttorisksandreturnsthataredifferenttothoseofotherbusiness
segments.Ageographicalsegmentisadistinguishablecomponentoftheentitythatisengagedin
providingproductsorserviceswithinaparticulareconomicenvironmentandissubjecttorisksand
returnsthataredifferentthanthoseofsegmentsoperatinginothereconomicenvironments.
f) Cashandcashequivalents
Cashandcashequivalentsinthebalancesheetcomprisecashatbankandinhandandshortterm
deposits with an original maturity of three months or less that are readily convertible to known
amountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.
For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash
equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are included
withincurrentinterestbearingloansandborrowingsincurrentliabilitiesontheBalanceSheet.
g) Tradeandotherreceivables
Trade receivables are initially recognised at the original fee amount. An estimate is made for
doubtfuldebtswhencollectionofthefullamountisnolongerprobable.Baddebtsareincludedin
the income statement when identified. The Groups standard terms for settlement for trade
receivablesare30to60days.
Collectabilityoftradereceivablesisreviewedonanongoingbasis.Individualdebtsthatareknown
to be uncollectible are written off when identified. An impairment allowance is recognised when
thereisobjectiveevidencethattheGroupwillnotbeabletocollectthedebt.
Financial difficulties of the debtor, default payments or debts more than 90 days overdue are
consideredobjectiveevidenceofimpairment.Theamountoftheimpairmentlossisthereceivable
carryingamountcomparedtothevalueofestimatedfuturecashflows.
Theabovepolicyappliestointercompanyreceivables.Intercompanyreceivablesarerepayableon
demand.
h) Workinprogress
Work in progress represents costs incurred and includes profit recognised to date on the value of
work completed on matters that are in progress at balance date. Costs include both variable and
fixedcostsdirectlyrelatedtomatters.
Workinprogressisvaluedatnetrealisablevalueafterprovidingforanyforeseeablelosses.
44
ACN120394194
i) Investmentsandotherfinancialassets
Investments and financial assets in the scope of AASB 139 Financial Instruments: Recognition and
Measurementarecategorisedaseitherfinancialassetsatfairvaluethroughprofitorloss,loansand
receivables, heldtomaturity investments, or availableforsale financial assets. The Group
determines the classification of its financial assets upon initial recognition and, when allowed and
appropriate,reevaluatesthisdesignationateachfinancialyearend.
When financial assets are recognised initially, they are measured at fair value, plus, in the case of
assetsnotatfairvaluethroughprofitorloss,directlyattributabletransactioncosts.
RecognitionandDerecognition
Allregularwaypurchasesandsalesoffinancialassetsarerecognisedonthetradedateiethedate
thattheGroupcommitstopurchasetheasset.Regularwaypurchasesorsalesarepurchasesorsales
offinancialassetsundercontractsthatrequiredeliveryoftheassetswithintheperiodestablished
generallybyregulationorconventioninthemarketplace.
Availableforsalesecurities
Availableforsaleinvestmentsarethosenonderivativefinancialassets,principallyequitysecurities
thataredesignatedasavailableforsaleorarenotclassifiedasfinancialassetsatfairvaluethrough
profit or loss, loans and receivables, or held to maturity investments. After initial recognition
availablefor sale securities are measured at fair value with gains or losses being recognised as a
separate component of equity until the investment is derecognised or until the investment is
determinedtobeimpaired,atwhichtimethecumulativegainorlosspreviouslyreportedinequityis
recognisedinprofitorloss.
Thefairvaluesofinvestmentsthatareactivelytradedinorganisedfinancialmarketsaredetermined
byreferencetoquotedmarketbidpricesatthecloseofbusinessonthebalancesheetdate.
LoansandReceivables
Loansandreceivablesarenonderivativefinancialassetswithfixedordeterminablepaymentsthat
are not quoted in an active market. Such assets are carried at amortised cost using the effective
interestmethod.Gainsandlossesarerecognisedinprofitandlosswhentheloansandreceivables
arederecognisedorimpaired,aswellasthroughtheamortisationprocess.
j) Plantandequipment
Plantandequipmentisstatedathistoricalcostlessaccumulateddepreciationandanyaccumulated
impairmentlosses.Suchcostincludestheacquisitioncostorcostofreplacingpartsthatareeligible
forcapitalisationwhenthecostofreplacingthepartisincurred.Allotherrepairsandmaintenance
arerecognisedinprofitorlossasincurred.
45
ACN120394194
Depreciationratesusedforeachclassofassetsareasfollows:
Classoffixedasset
Plantandequipment
Leasedequipment
Useful
life
310years
Depreciation
rates
10.0033.33%
Termoflease
Depreciation
method
Straightline
Straightline
The assets residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate,ateachbalancedate.
Derecognition
Anitemofplantandequipmentisderecognisedupondisposalorwhennofurtherfutureeconomic
benefitsareexpectedfromitsuseordisposal.
Anygainorlossarisingonderecognitionoftheasset(calculatedasthedifferencebetweenthenet
disposalproceedsandthecarryingamountoftheasset)isincludedinprofitorlossintheyearthe
assetisderecognised.
k) Leases
The determination of whether an arrangement is or contains a lease is based on the substance of
the arrangement and requires an assessment of whether the fulfilment of the arrangement is
dependentontheuseofaspecificassetorassetsandthearrangementconveysarighttousethe
asset.
Groupasalessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to
ownership of the leased item, are capitalised at the inception of the lease at the fair value of the
leasedassetor,iflower,atthepresentvalueoftheminimumleasepayments.Leasepaymentsare
apportioned between the finance charges and reduction of the lease liability so as to achieve a
constantrateofinterestontheremainingbalanceoftheliability.Financechargesarerecognisedas
anexpenseinprofitorloss.
Capitalisedleasedassetsaredepreciatedovertheshorteroftheestimatedusefullifeoftheasset
andtheleasetermifthereisnoreasonablecertaintythattheGroupwillobtainownershipbythe
endoftheleaseterm.
Operatingleasepaymentsarerecognisedasanexpenseintheincomestatementonastraightline
basisovertheleaseterm.Operatingleaseincentivesarerecognisedasaliabilitywhenreceivedand
subsequently reduced by allocating lease payments between rental expense and reduction of the
liability.
l) Impairmentofnonfinancialassetsotherthangoodwill
Otherassetsaretestedforimpairmentwhenevereventsorchangesincircumstancesindicatethat
thecarryingamountmaynotberecoverable.
46
ACN120394194
The Group conducts an annual internal review of asset values, which is used as a source of
information to assess for any indicators of impairment. External factors, such as changes in
expectedfutureprocessesandeconomicconditions,arealsomonitoredtoassessforindicatorsof
impairment.Ifanyindicationofimpairmentexists,anestimateoftheassetsrecoverableamountis
calculated.
Animpairmentlossisrecognisedfortheamountbywhichtheassetscarryingamountexceedsits
recoverableamount.Recoverableamountisthehigherofanassetsfairvaluelesscoststoselland
valueinuse.Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsfor
whichthereareseparatelyidentifiablecashinflowsthatarelargelyindependentofthecashinflows
from the other assets orgroups of assets (cash generating units). Nonfinancial assets other than
goodwill that suffered impairment are tested for possible reversal of the impairment whenever
eventsorchangesincircumstancesindicatethattheimpairmentmayhavereversed.
m) Goodwillandintangibles
Goodwill
Goodwillacquiredinabusinesscombinationisinitiallymeasuredatcostbeingtheexcessofthecost
of the business combination over the Groups interest in the net fair value of the acquiree's
identifiableassets,liabilitiesandcontingentliabilities.
Followinginitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.
For the purpose of impairment testing, goodwill acquired in a business combination is, from the
acquisitiondate,allocatedtoeachoftheGroupscashgeneratingunits,orgroupsofcashgenerating
units,thatareexpectedtobenefitfromthesynergiesofthecombination,irrespectiveofwhether
other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or
groupofunitstowhichthegoodwillissoallocated:
representsthelowestlevelwithintheGroupatwhichthegoodwillismonitoredforinternal
managementpurposes;and
isnotlargerthanasegmentbasedoneithertheGroupsprimaryortheGroupssecondary
reportingformatdeterminedinaccordancewithAASB114SegmentReporting.
Impairmentisdeterminedbyassessingtherecoverableamountofthecashgeneratingunit(groupof
cash generating units), to which the goodwill relates. When the recoverable amount of the cash
generatingunit(groupofcashgeneratingunits)islessthanthecarryingamount,animpairmentloss
isrecognised.Whengoodwillformspartofacashgeneratingunit(groupofcashgeneratingunits)
andanoperationwithinthatunitisdisposedof,thegoodwillassociatedwiththeoperationdisposed
ofisincludedinthecarryingamountoftheoperationwhendeterminingthegainorlossondisposal
oftheoperation.Goodwilldisposedofinthismannerismeasuredbasedontherelativevaluesof
theoperationdisposedofandtheportionofthecashgeneratingunitretained.
Impairmentlossesrecognisedforgoodwillarenotsubsequentlyreversed.
47
ACN120394194
Intangibles
Intangibleassetsacquiredseparatelyorinabusinesscombinationareinitiallymeasuredatcost.The
cost of an intangible asset acquired in a business combination is its fair value as at the date of
acquisition.Followinginitialrecognition,intangible assetsarecarriedat cost lessanyaccumulated
amortisationandanyaccumulatedimpairmentlosses.
The useful lives of intangible assets are assessed to be either finite or indefinite. Intangible assets
withfinitelivesareamortisedovertheusefullifeandtestedforimpairmentwheneverthereisan
indicationthattheintangibleassetmaybeimpaired.Theamortisationperiodandtheamortisation
method for an intangible asset with a finite useful life are reviewed at least at each financial year
end.Changesintheexpectedusefullifeortheexpectedpatternofconsumptionoffutureeconomic
benefitsembodiedintheassetareaccountedforprospectivelybychangingtheamortisationperiod
ormethod,asappropriate,whichisachangeinaccountingestimate.Theamortisationexpenseon
intangible assets with finite lives is recognised in profit or loss in the expense category consistent
withthefunctionoftheintangibleasset.
Gains or losses arising from derecognition of an intangible asset are measured as the difference
betweenthenetdisposalproceedsandthecarryingamountoftheassetandarerecognisedinprofit
orlosswhentheassetisderecognised.
n) Tradeandotherpayables
Tradepayablesandotherpayablesarecarriedatamortisedcost.However,duetotheirshortterm
nature, they are not discounted. They represent liabilities for goods and services provided to the
Group prior to the end of the financial year that are unpaid and arise when the Group becomes
obliged to make future payments in respect of the purchase of these goods and services. The
amountsareunsecuredandareusuallypaidwithin30daysofrecognition.
o) Interestbearingloansandborrowings
Allloansandborrowingsareinitiallyrecognisedatthefairvalueoftheconsiderationreceivedless
directlyattributabletransactioncosts.
After initial recognition, interestbearing loans and borrowings are subsequently measured at
amortisedcostusingtheeffectiveinterestmethod.Feespaidontheestablishmentofloanfacilities
thatareyieldrelatedareincludedaspartofthecarryingamountoftheloansandborrowings.
BorrowingsareclassifiedascurrentliabilitiesunlesstheGrouphasanunconditionalrighttodefer
settlementoftheliabilityforatleast12monthsafterthebalancesheetdate.
Borrowingcosts
Borrowingcostsarerecognisedasanexpensewhenincurred.
p) Provisions
ProvisionsarerecognisedwhentheGrouphasapresentobligation(legalorconstructive)asaresult
of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the
obligation.
48
ACN120394194
When the Group expects some or all of a provision to be reimbursed, for example under an
insurance contract, the reimbursement is recognised as a separate asset but only when the
reimbursementisvirtuallycertain.Theexpenserelatingtoanyprovisionispresentedintheincome
statementnetofanyreimbursement.
Provisions are measured at the present value of management's best estimate of the expenditure
requiredtosettlethepresentobligationatthebalancesheetdate.Iftheeffectofthetimevalueof
moneyismaterial,provisionsarediscountedusingacurrentpretaxratethatreflectsthetimevalue
of money and the risks specific to the liability. The increase in the provision resulting from the
passageoftimeisrecognisedinfinancecosts.
q) Employeebenefits
i) Wages,salaries,annualleaveandsickleave
Liabilitiesforwagesandsalaries,includingnonmonetarybenefitsandannualleaveexpectedtobe
settledwithin12monthsofthereportingdatearerecognisedinrespectofemployees'servicesup
tothereportingdate.Theyaremeasuredattheamountsexpectedtobepaidwhentheliabilitiesare
settled. Expenses for nonaccumulating sick leave are recognised when the leave is taken and are
measuredattheratespaidorpayable.
ii) Longserviceleave
The liability for long service leave is recognised and measured as the present value of expected
futurepaymentstobemadeinrespectofservicesprovidedbyemployeesuptothereportingdate.
Consideration is given to expected future wage and salary levels, experience of employee
departures,andperiodsofservice.Expectedfuturepaymentsarediscountedusingmarketyieldsat
thereportingdateonnationalgovernmentbondswithtermstomaturityandcurrenciesthatmatch,
ascloselyaspossible,theestimatedfuturecashoutflows.
r) Sharebasedpaymenttransactions
i) Equitysettledtransactions
TheGroupprovidesbenefitstoitsemployees(includingkeymanagementpersonnel)intheformof
sharebased payments, whereby employees render services in exchange for shares or rights over
shares(equitysettledtransactions).
Therearecurrentlytwoplansinplacetoprovidethesebenefits:
TaxExemptEmployeeSharePlan(TEESP),whichprovidesbenefitstoalleligibleemployees;
and
Deferred Employee Share Plan (DESP), which provides benefits to key employees and
directorsoftheGroup.
The cost of these equitysettled transactions with employees is measured by reference to the fair
valueoftheequityinstrumentsatthedateatwhichtheyaregranted.Thefairvalueisdetermined
byreferencetothemarketpriceofthesharesonthedateofgrant.
In valuing equitysettled transactions, no account is taken of any vesting conditions, other than
conditionslinkedtothepriceofthesharesofIntegratedLegalHoldingsLimited(marketconditions)
ifapplicable.
49
ACN120394194
The cost of equitysettled transactions is recognised, together with a corresponding increase in

equity,overtheperiodinwhichtheperformanceand/orserviceconditionsarefulfilled(thevesting
period), ending on the date on which the relevant employees become fully entitled to the award
(thevestingdate).
Ateachsubsequentreportingdateuntilvesting,thecumulativechargetotheincomestatementis
theproductof:
i.
Thegrantdatefairvalueoftheaward;
ii.
Thecurrentbestestimateofthenumberofawardsthatwillvest,takingintoaccountsuch
factorsasthelikelihoodofemployeeturnoverduringthevestingperiodandthelikelihood
ofnonmarketperformanceconditionsbeingmet;and
iii.
Theexpiredportionofthevestingperiod.
The charge to the income statement for the period is the cumulative amount as calculated above
lesstheamountsalreadychargedinpreviousperiods.Thereisacorrespondingentrytoequity.
EquitysettledawardsgrantedbyIntegratedLegalHoldingsLimitedtoemployeesofsubsidiariesare
recognised in the parents separate financial statements as an additional investment in the
subsidiarywithacorrespondingcredittoequity.Asaresult,theexpenserecognisedbyIntegrated
LegalHoldingsLimited inrelationtoequitysettledawardsonlyrepresentstheexpenseassociated
withgrantstoemployeesoftheparent.TheexpenserecognisedbytheGroupisthetotalexpense
associatedwithallsuchawards.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or
fewer awards vest than were originally anticipated to do so. Any award subject to a market
condition is considered to vest irrespective of whether or not that market condition is fulfilled,
providedthatallotherconditionsaresatisfied.
Ifthetermsofanequitysettledawardaremodified,asaminimumanexpenseisrecognisedasif
the terms had not been modified. An additional expense is recognised for any modification that
increasesthetotalfairvalueofthesharebasedpaymentarrangement,orisotherwisebeneficialto
theemployee,asmeasuredatthedateofmodification.
Ifanequitysettledawardiscancelled,itistreatedasifithadvestedonthedateofcancellation,and
anyexpensenotyetrecognisedfortheawardisrecognisedimmediately.However,ifanewaward
issubstitutedforthecancelledawardanddesignatedasareplacementawardonthedatethatitis
granted, the cancelled and new award are treated as if they were a modification of the original
award,asdescribedinthepreviousparagraph.
s) Contributedequity
Ordinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnew
sharesoroptionsareshowninequityasadeduction,netoftax,fromtheproceeds.
50
ACN120394194
t) Revenuerecognition
Revenueisrecognisedandmeasuredatthefairvalueoftheconsiderationreceivedorreceivableto
theextentitisprobablethattheeconomicbenefitswillflowtotheGroupandtherevenuecanbe
reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
i) Renderingofservices
Revenuefromtheprovisionoflegalservicesisrecognisedonanaccrualbasisintheperiodinwhich
thelegalserviceisprovidedandiscalculatedwithreferencetotheprofessionalstaffhoursincurred
oneachmatter.
ii) Onlinelegalandnonlegaldocumentsandpublications
Revenuefromtheprovisionofonlinelegalandnonlegaldocumentsandpublicationsisrecognised
onanaccrualsbasisatthetimeofdeliveryofthedocumentstocustomers.
iii) Subscriptionincome
Revenue from memberships granting the subscriber access to the knowledge base of weekly legal
bulletins,onlinetools,calculatorsandservicesisrecognisedonastraightlinebasiswhichreflects
thetiming,natureandbenefitprovided.Allmembershipshaveasubscriptionperiodofeitherthree
ortwelvemonths.
iv) Interestrevenue
Revenueisrecognisedasinterestaccruesusingtheeffectiveinterestmethod.Thisisamethodof
calculating the amortised cost of a financial asset and allocating the interest revenue over the
relevantperiodusingtheeffectiveinterestrate,whichistheratethatexactlydiscountsestimated
futurecashreceiptsthroughtheexpectedlifeofthefinancialassettothenetcarryingamountofthe
financialasset.
v) Dividends
RevenueisrecognisedwhentheGroupsrighttoreceivethepaymentisestablished.
vi) Rentalrevenue
Rentalrevenuefrominvestment propertiesisaccountedforonastraightlinebasisoverthelease
term.Contingentrentalincomeisrecognisedasincomeintheperiodsinwhichitisearned.Lease
incentivesgrantedarerecognisedasanintegralpartofthetotalrentalincome.
u) Incomeandothertaxes
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities based on the current period's
taxableincome.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenacted
orsubstantivelyenactedbythebalancesheetdate.
Deferredincometaxisprovidedonalltemporarydifferencesatthebalancesheetdatebetweenthe
taxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.
Deferredincometaxliabilitiesarerecognisedforalltaxabletemporarydifferencesexcept:
51
ACN120394194
whenthedeferredincometaxliabilityarisesfromtheinitialrecognitionofgoodwillorofan
assetorliabilityinatransactionthatisnotabusinesscombinationandthat,atthetimeof
thetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;or
when the taxable temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, and the timing of the reversal of the temporary
differencecanbecontrolledanditisprobablethatthetemporarydifferencewillnotreverse
intheforeseeablefuture.
Deferredincometaxassetsarerecognisedforalldeductibletemporarydifferences,carryforwardof
unusedtaxcreditsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbe
available against which the deductible temporary differences and the carryforward of unused tax
creditsandunusedtaxlossescanbeutilised,except:
whenthedeferredincometaxassetrelatingtothedeductibletemporarydifferencearises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxableprofitorloss;or
when the deductible temporary difference is associated with investments in subsidiaries,
associatesorinterestsinjointventures,inwhichcaseadeferredtaxassetisonlyrecognised
totheextentthatitisprobablethatthetemporarydifferencewillreverseintheforeseeable
future and taxable profit will be available against which the temporary difference can be
utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailableto
allowallorpartofthedeferredincometaxassettobeutilised.
Deferredincometaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyto
theyearwhentheassetisrealisedortheliabilityissettled,basedontaxrates(andtaxlaws)that
havebeenenactedorsubstantivelyenactedatthebalancesheetdate.
Deferredtaxassetsanddeferredtaxliabilitiesareoffsetonlyifalegallyenforceablerightexiststo
set off current tax assets against current tax liabilities and the deferred tax assets and liabilities
relatetothesametaxableentityandthesametaxationauthority.
Incometaxesrelatingtoitemsrecogniseddirectlyinequityarerecognisedinequityandnotinprofit
orloss.
Taxconsolidationlegislation
Integrated Legal Holdings Limited and its whollyowned Australian controlled entities have
implementedthetaxconsolidationlegislation.
Theheadentity,IntegratedLegalHoldingsLimitedandthecontrolledentitiesinthetaxconsolidated
groupcontinuetoaccountfortheirowncurrentanddeferredtaxamounts.TheGrouphasapplied
thegroupallocationapproachindeterminingtheappropriateamountofcurrenttaxesanddeferred
taxestoallocatetomembersofthetaxconsolidatedgroup.
52
ACN120394194
In addition to its own current and deferred tax amounts, Integrated Legal Holdings Limited also
recognisesthecurrenttaxliabilities(orassets)andthedeferredtaxassetsarisingfromunusedtax
lossesandunusedtaxcreditsassumedfromcontrolledentitiesinthetaxconsolidatedgroup.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognisedasamountsreceivablefromorpayabletootherentitiesintheGroup.Detailsofthetax
fundingagreementaredisclosedinnote7(e)(i).
Any difference between the amounts assumed and amounts receivable or payable under the tax
funding agreement are recognised as a contribution to (or distribution form) whollyowned tax
consolidatedentities.
Othertaxes
Revenues,expensesandassetsarerecognisednetoftheamountofGSTexcept:
when the GST incurred on a purchase of goods and services is not recoverable from the
taxationauthority,inwhichcasetheGSTisrecognisedaspartofthecostofacquisitionof
theassetoraspartoftheexpenseitemasapplicable;and
receivablesandpayables,whicharestatedwiththeamountofGSTincluded.
ThenetamountofGSTrecoverablefrom,orpayableto,thetaxationauthorityisincludedaspartof
receivablesorpayablesinthebalancesheet.
CashflowsareincludedintheCashFlowStatementonagrossbasisandtheGSTcomponentofcash
flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxationauthorityisclassifiedaspartofoperatingcashflows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payableto,thetaxationauthority.
v) Earningspershare
Basicearningspershareiscalculatedasnetprofitattributabletomembersoftheparent,adjusted
to exclude any costs of servicing equity (other than dividends), divided by the weighted average
numberofordinaryshares,adjustedforanybonuselement.
Diluted earnings per share is calculated as net profit attributable to members of the company,
adjusted for costs of servicing equity (other than dividends) divided by the weighted average
numberofordinarysharesanddilutivepotentialordinaryshares,adjustedforanybonuselement.
53
ACN120394194
3) FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES
The Groups principal financial instruments comprise receivables, payables, bank loans and
overdrafts,financeleasesandcash.
TheGroupmanagesitsexposuretokeyfinancialrisks,includinginterestrateriskinaccordancewith
theGroupsfinancialriskmanagementpolicy.Theobjectiveofthepolicyistosupportthedelivery
oftheGroupsfinancialtargetswhilstprotectingfuturefinancialsecurity.
The main risks arising from the Groups financial instruments are interest rate risk, credit risk and
liquidityrisk.TheGroupusesdifferentmethodstomeasureandmanagedifferenttypesofrisksto
which it is exposed. These include monitoring levels of exposure to interest rate risk and
assessmentsofmarketforecastsforinterestrates.Ageinganalysesandmonitoringofspecificcredit
allowances are undertaken to manage credit risk, and liquidity risk is monitored through the
developmentoffuturerollingcashflowforecasts.
TheBoardreviewsandagreespoliciesformanagingeachoftheserisksassummarisedbelow.
RiskExposuresandResponses
Interestraterisk
TheGroupsexposuretomarketinterestratesrelatesprimarilytotheGroupscashandshortand
longtermdebtobligations,withafloatinginterestrate.Thelevelofdebtisdisclosedinnote20.
At balance date, the Group had the following mix of financial assets and liabilities exposed to
Australianvariableinterestraterisk:
Financialassets
Cashandcashequivalents
Financialliabilities
Bankoverdrafts
Bankloans
Netexposure
Consolidated
2009
2008
$
$
600,694
5,626,766
(134,819)
(1,723,000)
(1,857,819)
(1,257,125)
5,626,766
Parent
2009
$
547,437
(1,723,000)
(1,723,000)
(1,175,563)
2008
$
3,544,723
3,544,723
TheGroupregularlyanalysesitsinterestrateexposuretoensurethatthebestreturnsareachieved
while balancing the long term and short term cash flow requirements for the Groups business
strategies. Within this analysis, consideration is given to the Groups future cash requirements,
alternativecashdepositinganddebtfundingfacilitiesandthemixoffixedandvariableinterestrates
onbankbalances.TheBoardofDirectorsoverseethemanagementofcashfundsbymanagement
andinvestmentopportunitiesthroughtheacquisitionoflawfirms.
The following sensitivity analysis is based on the interest rate risk exposures in existence at the
balancesheetdate.
54
ACN120394194
3) FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES(continued)
At30June2009and30June2008,ifinterestrateshadmoved,asillustratedinthetablebelow,with
allothervariablesheldconstant,posttaxprofitandequitywouldhavebeenaffectedasfollows:
Judgementsofreasonablypossible
movements:
Consolidated
+0.5%(2008:+0.5%)
0.25%(2008:0.5%)
Parent
+0.5%(2008:+0.5%)
0.25%(2008:0.5%)
PostTaxProfit
Higher/(Lower)
2009
2008
$
$
12,450
28,134
(6,225)
(28,134)
7,449
17,724
(3,724)
(17,724)
Equity
Higher/(Lower)
2009
2008
$
$
Therateappliedin2009islowerthanthatappliedin2008duetochangingmarketconditionsand
managementexpectations.
The movements in profit are due to higher/lower interest costs from variable rate debt and cash
balances. The sensitivity is lower in 2009 is due to lower interest revenue as a result of lower
variableratecashbalancesheldascomparedto2008,togetherwithhigherinterestexpensesasa
resultoftheinitialdrawdownofvariabledebtfundingtowardsthelatterpartoftheyear.
Managementconsiders+50basispointsand25basispointsasreasonablypossiblemovementfor
thenexttwelvemonthsbasedonmanagementsexpectationsoffutureinterestratemovements.
Creditrisk
CreditriskarisesfromthefinancialassetsoftheGroup,whichcomprisecashandcashequivalents,
tradeandotherreceivablesandworkinprogress.TheGroupsexposuretocreditriskarisesfrom
potentialdefaultofthecounterparty,withamaximumexposureequaltothecarryingamountof
theseinstruments.Exposureatbalancedateisaddressedineachapplicablenote.
TheGroupdoesnotholdanycreditderivativestooffsetitscreditexposure.
The Group manages its credit risk by trading with recognised, trustworthy third parties. In some
instancessecurityovertradereceivableshasbeenrequestedfromspecificclients(egmoniesheldin
trust,securityoverpropertyorbankguarantee),usuallydependingonthetypeoflegalworkbeing
undertaken, as an added measure to guarantee payment in the event of an unsuccessful legal
outcomeoraprotractedmatter.
It is the Groups policy that all clients who wish to trade on credit terms are subject to credit
verificationproceduresincludinganassessmentoftheirindependentcreditrating,financialposition
andpastexperienceonacasebycasebasis.
Inaddition,receivablebalancesaremonitoredonanongoingbasiswiththeresultthattheGroups
exposuretobaddebtsisnotsignificant.
55
ACN120394194
3) FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES(continued)
TherearenosignificantconcentrationsofcreditriskwithintheGroupandfinancialinstrumentsare
spreadbetweenreputablefinancialinstitutionstominimisetheriskofdefaultofcounterparties.
AnanalysisoftheGroupstradereceivablesisincludedinnote11.
Liquidityrisk
TheGroupsobjectiveistomaintainadequateliquiditytomeettheoperatingrequirementsofthe
businessandtofacilitatetheGroupsongoingacquisitionplans.
The table below reflects all contractually fixed amounts for settlement, repayments and interest
resultingfromrecognisedfinancialliabilities.Undiscountedcashflowsfortherespectiveupcoming
fiscal years are presented. Cash flows for financial liabilities without fixed amount or timing are
basedontheconditionsexistingat30June2009.
TheremainingcontractualmaturitiesoftheGroupsandparententitysfinancialliabilitiesare:
At
Call
$
CONSOLIDATED
30June2009
Financeleases/HPagreements(gross)
Insurancepremiumfundingfacilities
Bankloans(secured)
Interestexpensebankloans
Total
30June2008
Financeleases/HPagreements(gross)
Insurancepremiumfundingfacilities
Total
6
months
$
612
months
$
15
years
$
1,738,222
39,264
289,598
100,000
34,239
2,201,323
1,081,009
11,573
168,051
1,260,633
39,264
24,179
623,000
21,722
708,165
2,293
2,293
Total
$
78,212
1,000,000
30,070
1,108,282
8,425
8,425
1,738,222
156,740
313,777
1,723,000
86,031
4,017,770
1,081,009
22,291
168,051
1,271,351
PARENT
30June2009
Bankloans(secured)
Interestexpensebankloans
Total
30June2008
Total
At
Call
$
6
months
$
612
months
$
222,161
100,000
34,239
356,400
146,611
146,611
15
years
$
623,000
21,722
644,722
Total
$
1,000,000
30,070
1,030,070
222,161
1,723,000
86,031
2,031,192
146,611
146,611
Liquidity risk is managed on the basis of the businesses needs and is overseen by senior
management.TheGroupmakesuseofmonthlycashflowanalysistoconsidertheGroupsoverall
liquidityriskandtomonitorexistingfinancialliabilitiesaswellaseffectivecontrollingoffuturerisks.
56
ACN120394194
4) SIGNIFICANTACCOUNTINGJUDGEMENTS,ESTIMATESANDASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates
and assumptions that affect the reported amounts in the financial statements. Management
continually evaluates its judgements and estimates in relation to assets, liabilities, contingent
liabilities, revenue and expenses. Management bases its judgements and estimates on historical
experienceandonother variousfactorsitbelievestobereasonableunder the circumstances,the
result of which forms the basis of the carrying values of assets and liabilities that are not readily
apparent from other sources. Actual results may differ from these estimates under different
assumptionsandconditions.
Management has identified the following critical accounting policies for which significant
judgements,estimatesandassumptionsaremade.Actualresultsmaydifferfromtheseestimates
under different assumptions and conditions and may materially affect financial results or the
financialpositionreportedinfutureperiods.
Further details of the nature of these assumptions and conditions may be found in the relevant
notestothefinancialstatements.
i) Significantaccountingjudgements
Recoveryofdeferredtaxassets
Deferredtaxassetsarerecognisedfordeductibletemporarydifferencesasmanagementconsiders
thatitisprobablethatfuturetaxableprofitswillbeavailabletoutilisethosetemporarydifferences.
Taxation
The Groups accounting policy for taxation requires managements judgement as to the types of
arrangementsconsideredtobeataxonincomeincontrasttoanoperatingcost.Judgementisalso
requiredinassessingwhetherdeferredtaxassetsandcertaindeferredtaxliabilitiesarerecognised
on the balance sheet. Deferred tax assets, including those arising from unrecouped tax losses,
capitallossesandtemporarydifferences,arerecognisedonlywhereitisconsideredmorelikelythan
not that they will be recovered, which is dependent on the generation of sufficient future taxable
profits.
Assumptionsaboutthegenerationoffuturetaxableprofitsdependonmanagementsestimatesof
future cash flows. These depend on estimates of future operating revenue, operating costs,
restoration costs, capital expenditure, dividends and other capital management transactions.
Judgementsarealsorequiredabouttheapplicationofincometaxlegislation.Thesejudgementsand
assumptions are subject to risk and uncertainty, hence there is a possibility that changes in
circumstances will alter expectations, which may impact the amount of deferred tax assets and
deferredtaxliabilitiesnotrecognisedonthebalancesheetandtheamountofothertaxlossesand
temporary differences not yet recognised. In such circumstances, some or all of the carrying
amounts of recognised deferred tax assets and liabilities may require adjustment, resulting in a
correspondingcreditorchargetotheincomestatement.
57
ACN120394194
4) SIGNIFICANTACCOUNTINGJUDGEMENTS,ESTIMATESANDASSUMPTIONS(continued)
ii) Significantaccountingestimatesandassumptions
Impairmentofgoodwill
The Group determines whether goodwill is impaired at least on an annual basis. This requires an
estimation of the recoverable amount of the cash generating units, using a value in use or fair
valuelesscoststoselldiscountedcashflowmethodology,towhichthegoodwillisallocated.An
impairmentlossof$450,000(2008:$215,826)wasrecognisedinthecurrentyear.Theassumptions
used in the estimation of recoverable amount and the carrying amount of goodwill including a
sensitivityanalysisarediscussedinnote15.
Sharebasedpaymenttransactions
TheGroupmeasuresthecostofequitysettledtransactionswithemployeesbyreferencetothefair
valueoftheequityinstrumentsatthedateatwhichtheyaregranted.Thefairvalueisdetermined
basedonthemarketpriceofanIntegratedLegalHoldingsLimitedshareatthegrantdate.
5) SEGMENTINFORMATION
TheGroupsprimarysegmentreportingformatisbusinesssegmentsastheGroupsrisksandreturns
areaffectedpredominantlybydifferencesinlegalproductsandservicesperformed.
Abusinesssegmentisadistinguishablecomponentoftheentitythatisengagedinprovidinglegal
products or services that are subject to risks and returns that are different to those of the other
operatingbusinesssegments.ManagementhasassessedthattheGroupoperatesintwobusiness
segments,beinglegalservicesandinformationtechnology.
A geographical segment is a distinguishable component of the entity that is engaged in providing

legal products or services within a particular economic environment and is subject to risk and
returns that are different than those of segments operating in other economic environments.
ManagementhasassessedthattheGroupoperatesinonegeographicalsegment,beingAustralia.
Theoperatingbusinessesareorganisedandmanagedseparatelyaccordingtothenatureofthelegal
productsandservicesprovided,witheachsegmentrepresentingastrategicbusinessunitthatoffers
differentlegalproductsandservesdifferentmarkets.
TheLegalServicesdivisionisanoperatoroflegalpracticesthroughoutAustralia.
TheInformationTechnologydivisionprovidesaninternetportaldesignedtoprovideeasyaccesstoa
rangeoflegalandotherdocumentstothelegalprofessionandpublicalikeandinformationabout
variousareasoflaw.
Transferpricesbetweenbusinesssegmentsaresetonanarmslengthbasisinamannersimilarto
transactions with third parties. Segment revenue, segment expense and segment result include
transfersbetweenbusinesssegments.Thosetransfersareeliminatedonconsolidation.
58
ACN120394194
5) SEGMENTINFORMATION(continued)
The following tables present revenue and profit information and certain asset and liability
informationregardingbusinesssegments.
Yearended30June2009
Revenue
Professionalfees
Interestrevenue
Otherrevenue
Totalsegmentrevenue
Unallocatedrevenue
Totalconsolidatedrevenue
Result
Segmentresultsbeforeimpairmentlosses
Impairmentlosses
Segmentresults
Unallocatedexpenses
Profitbeforetaxandfinancecosts
Financecosts
Incometaxexpense
Assetsandliabilities
Segmentassets
Intersegmentelimination
Unallocatedassets
Totalassets
Segmentliabilities
Unallocatedliabilities
Totalliabilities
Othersegmentinformation
Capitalexpenditure(a)
Depreciationandamortisation
Impairmentlosses
Othernoncashexpenses
Legal
Services
$
15,604,767
3,801
392,556
16,001,124
2,893,430
2,893,430
16,087,218
(14,110)
14,386,590
(11,251,194)
146,991
(173,876)
(126,828)
Information
Technology
$
783,755
3,182
6,601
793,538
241,979
(450,000)
(208,021)
3,089,734
(923,591)
150,192
14,110
28,149
(15,620)
(450,000)
Total
$
16,388,522
6,983
399,157
16,794,662
151,559
16,946,221
3,135,409
(450,000)
2,685,409
(1,527,576)
1,157,833
(57,148)
1,100,685
(506,810)
593,875
19,176,952
(937,701)
1,042,331
19,281,582
14,536,782
(11,237,084)
2,119,478
5,419,176
175,140
(189,496)
(450,000)
(126,828)
59
ACN120394194
Yearended30June2009
Cashflowinformation
Netcashinflows/(outflows)fromoperatingactivities
Unallocatednetcashoutflowsfromoperating
activities
Totalconsolidatednetcashoutflowsfrom
operatingactivities
Netcashinflows/(outflows)frominvestingactivities
Unallocatednetcashoutflowsfrominvesting
activities
investingactivities
Netcashinflowsfromfinancingactivities
Unallocatednetcashinflowsfromfinancing
activities
Totalconsolidatednetcashinflowsfromfinancing
activities
Legal
Services
$
Information
Technology
$
Total
$
(1,213,279)
8,340
(b)
(1,204,939)
692,065
(1,139,871)
(4,636,694)
(27,523)
(1,652,745)
(4,664,217)
(3,408)
757,936
4,884,773
(1,188,047)
(3,909,689)
3,696,726
(3,685,943)
390,760
401,543
a)
b)
TocomplywiththerequirementsofAASB114.57,theGrouphasincludedthecostofsegmentassetsacquiredbywayofbusiness
combinations.
For the purpose of reconciling total cash flows to the cash flow statement, this column also includes unallocated cash flows that
relatetounallocatedrevenues,expenses,assetsandliabilities.
60
ACN120394194
Yearended30June2008
Revenue
Professionalfees
Interestrevenue
Otherrevenue
Intersegmentrevenue
Totalsegmentrevenue
Unallocatedrevenue
Totalconsolidatedrevenue
Result
Segmentresultsbeforeimpairmentlosses
Impairmentlosses
Segmentresults
Unallocatedexpenses
Profitbeforetaxandfinancecosts
Financecosts
Incometaxexpense
Assetsandliabilities
Segmentassets
Unallocatedassets
Totalassets
Segmentliabilities
Unallocatedliabilities
Totalliabilities
Othersegmentinformation
Capitalexpenditure(a)
Depreciationandamortisation
Impairmentlosses
Othernoncashexpenses
Legal
Services
$
9,384,972
10,540
82,662
9,478,174
3,241,357
(119,662)
3,121,695
8,682,775
(19,767)
6,653,596
(4,433,158)
242,809
(105,944)
(215,826)
1,064,599
Information
Technology
$
790,958
27,275
191
818,424
390,536
(96,164)
294,372
1,321,396
344,056
(19,767)
6,520
(16,855)
(3,295)
Total
$
10,175,930
37,815
82,853
10,296,598
391,843
10,688,441
3,631,893
(215,826)
3,416,067
(904,044)
2,512,023
(25,029)
2,486,994
(942,691)
1,544,303
10,004,171
(19,767)
6,451,092
16,435,496
6,997,652
(4,452,925)
(13,877)
2,530,850
249,329
(122,799)
(215,826)
1,061,304
61
ACN120394194
Yearended30June2008
Cashflowinformation
Netcashinflowsfromoperatingactivities
Unallocatednetcashoutflowsfromoperating
activities
Totalconsolidatednetcashinflowsfromoperating
activities
Netcashinflows/(outflows)frominvestingactivities
Unallocatednetcashoutflowsfrominvesting
activities
investingactivities
Netcashinflowsfromfinancingactivities
Unallocatednetcashoutflowsfromfinancing
activities
financingactivities
a)
b)
Legal
Services
$
Information
Technology
$
Total
$
528,878
735,337
(b)
1,264,215
(216,902)
72,118
(4,150,388)
214,432
1,119,431
(3,935,956)
(2,707,507)
(93,067)
4,465,780
288,004
(6,736,530)
4,753,784
(2,319,603)
20,949
2,455,130
TocomplywiththerequirementsofAASB114.57,theGrouphasincludedthecostofsegmentassetsacquiredbywayofbusiness
combinations.
For the purpose of reconciling total cash flows to the cash flow statement, this column also includes unallocated cash flows that
relatetounallocatedrevenues,expenses,assetsandliabilities.
62
ACN120394194
6) REVENUEANDEXPENSES
a)
Otherrevenue
Rentreceived
Sundryincome
CONSOLIDATED
2009
2008
$
$
251,931
81,157
147,098
1,696
399,029
82,853
PARENT
2009
$
2008
$
b)
Salariesandemployeebenefitsexpense
Salariesandwagesexpense
Superannuationexpense
8,840,917
1,326,549
10,167,466
4,468,969
562,542
5,031,511
613,583
49,633
663,216
306,273
26,355
332,628
151,427
2,429
35,640
189,496
92,951
3,214
26,634
122,799
1,569
1,569
314
314
76,816
9,220
2,139
359,678
65,225
21,858
534,936
82,694
16,111
34,033
26,254
159,092
5,000
25,392
145
30,537
428
189
617
48,839
8,309
57,148
25,029
25,029
23,061
23,061
66
66
c)
Depreciationofplantandequipment
Amortisationof:
Equipmentunderfinancelease
Identifiedintangibles
d)
Otherexpenses
Authorroyaltyfees
Donations
Debtcollectionfees
Badanddoubtfuldebts
Bankfees
Otherexpenses
e)
Financecosts
Interestotherentities
Interestaccretion
63
ACN120394194
7) INCOMETAX
a) Incometaxexpense
Themajorcomponentsofincometaxexpense
are:
IncomeStatement
Currentincometax
Currentincometaxcharge/(benefit)
Adjustmentinrespectofcurrentincometax
ofpreviousyears
Deferredincometax
Relatingtooriginationandreversalof
temporarydifferences
Adjustmentinrespectofdeferredincome
taxofpreviousyears
Incometaxexpense/(benefit)reportedin
theincomestatement
CONSOLIDATED
2009
2008
$
$
503,409
(6,112)
PARENT
963,670
2009
$
2008
$
(390,372)
(171,209)
(6,112)
3,401
(20,979)
54,348
6,112
6,112
506,810
942,691
(336,024)
(105,066)
(302,311)
(302,311)
(302,311)
(302,311)
1,100,685
1,100,685
2,486,994
2,486,994
698,962
698,962
(854,396)
(854,396)
330,206
746,098
209,689
(256,319)
38,770
135,000
4,451
(1,368)
(249)
506,810
4,898
4,988
64,748
121,959
942,691
6,550
135,000
(688,089)
826
(336,024)
445
28,849
121,959
(105,066)
66,143
b)
Amountschargedorcrediteddirectlyto
equity
Deferredincometaxrelatedtoitemscharged
(credited)directlytoequity
Capitalraisingcosts
c) Numericalreconciliationbetween
aggregatetaxexpenserecognisedinthe
incomestatementandtaxexpense
calculatedperthestatutoryincometax
rate
Areconciliationbetweentaxexpenseand
theproductofaccountingprofitbefore
incometaxmultipliedbytheGroups
applicableincometaxrateisasfollows:
Accountingprofit/(loss)beforetax
Totalaccountingprofit/(loss)beforeincometax
AttheParentEntitysstatutoryincometax
rateof30%(2008:30%)
Adjustmentsinrespectofcurrentincome
taxofpreviousyears
Entertainment
Fringebenefitstax
Impairmentloss
Intercompanydividend
Investmentallowance
Other
Aggregateincometaxexpense/(benefit)
64
ACN120394194
7)INCOMETAX(continued)
CONSOLIDATED
d)
Recogniseddeferredtaxassets
andliabilities
Openingbalance
Acquisitions
Chargedtoincome
Chargedtoequity
Otherpayments
Taxconsolidationcontributions
ClosingBalance
Taxexpense/(benefit)inincome
statement
Amountsrecognisedinthe
balancesheet:
Deferredtaxasset
Deferredtaxliability
PARENT
2009
2009
2008
2008
2009
2009
2008
2008
$
Current
Income
Tax
$
Deferred
Income
Tax
$
Current
Income
Tax
$
Deferred
Income
Tax
$
Current
Income
Tax
$
Deferred
Income
Tax
$
Current
Income
Tax
$
Deferred
Income
Tax
(968,272)
410,647
(968,272)
357,817
(80,972)
(34,292)
(963,670)
20,979
423,960
423,960
1,308,557
(1,139,481)
76,370
396,484
63,013
(9,513)
(497,297)
1,308,558
(60,460)
(893,780)
(157,011)
464,147
(968,272)
410,647
(157,011)
297,357
506,810
942,691
611,125
459,653
(146,978)
464,147
171,209
(968,272)
357,817
(336,024)
297,357
357,817
(49,006)
410,647
297,357
357,817
Deferredincometaxasat30June2009relatestothefollowing:
CONSOLIDATED
i) Deferredtaxassets
Employeeprovisions:
Annualleave
Longserviceleave
Doubtfuldebts
Amortisationintangibleassets
Leasedassets
Accruedauditfees
Unpaidsuperannuation
Leaseincentive
Capitalraisingcosts
Grossdeferredtaxassets
Setoffofdeferredtaxliabilities
Netdeferredtaxassets
(66,143)
BALANCESHEET
2009
$
2008
$
106,632
84,494
31,452
18,682
2,394
32,755
4,728
87,776
242,212
611,125
(146,978)
464,147
46,367
41,563
3,887
7,990
460
20,394
5,906
333,086
459,653
(49,006)
410,647
65
(105,066)
ACN120394194
ii)
BALANCESHEET
2009
$
Deferredtaxliabilities
Plantandequipment
Deferredconsiderationprovisions
Identifiedintangibleatacquisition
Ownedassetsatacquisition(resetunderACA)
Leasedassets
Prepayments
Grossdeferredtaxliabilities
Setoffofdeferredtaxassets
Netdeferredtaxliabilities
2008
$
1,088
4,249
48,976
2,543
90,122
146,978
(146,978)
48,976
30
49,006
(49,006)
Deferredincometaxasat30June2009relatestothefollowing:
PARENT
Deferredtaxassets
Employeeprovisions:
Annualleave
Longserviceleave
Accruedauditfees
Unpaidsuperannuation
Prepayments
Capitalraisingcosts
Grossdeferredtaxliabilities
Setoffofdeferredtaxliabilities
Netdeferredtaxassets
BALANCESHEET
2009
$
2008
$
7,023
246
32,755
15,121
242,212
297,357
297,357
3,150
67
20,394
1,120
333,086
357,817
357,817
e) Taxconsolidation
i) Membersofthetaxconsolidatedgroupandthetaxsharingarrangement
Integrated Legal Holdings Limited and its subsidiaries have formed a tax consolidated Group.
IntegratedLegalHoldingsLimitedistheheadentityofthetaxconsolidatedGroup.Membersofthe
Group have entered into a tax funding agreement that provides for the allocation of income tax
liabilities between the entities should the head entity default on its tax payment obligations. No
amountshavebeenrecognisedinthefinancialstatementsinrespectofthisagreementonthebasis
thatthepossibilityofdefaultisremote.
ii) Taxeffectaccountingbymembersofthetaxconsolidatedgroup
MeasurementmethodadoptedunderUIG1052TaxConsolidationAccounting
The head entity and the controlled entities in the tax consolidated Group continue to account for
theirowncurrentanddeferredtaxamounts.TheGrouphasappliedthegroupallocationapproach
indeterminingtheappropriateamountofcurrenttaxesanddeferredtaxestoallocatetomembers
of the tax consolidated Group. The current and deferred tax amounts of the members of the
consolidatedGrouparerecognisedbytheCompany(asheadentityinthetaxconsolidatedGroup).
66
ACN120394194
Natureofthetaxfundingagreement
MembersofthetaxconsolidatedGrouphaveenteredintoataxfundingagreement.Amountsare
recognisedaspayable to orreceivableby theCompanyandeachmemberofthetaxconsolidated
Groupinrelationtothetaxcontributionamountspaidorpayablebetweentheparententityandthe
other members of the tax consolidated Group in accordance with this agreement. Where the tax
contribution amount recognised by each member of the tax consolidated Group for a particular
period is different to the aggregate of the current tax liability or asset and any deferred tax asset
arisingfromunusedtaxlossesandtaxcreditsinrespectofthatperiod,thedistributionisrecognised
asacontributionfrom(ordistributedto)equityparticipants.
Taxconsolidationcontributions/(distributions)
Integrated Legal Holdings Limited has recognised the following amounts as taxconsolidation
contributionadjustments.
TotalincreasetotaxpayableofIntegratedLegalHoldingsLimited
Total increase to intercompany assets of Integrated Legal Holdings
Limited
PARENT
2009
$
893,780
2008
$
1,139,481
893,780
1,139,481
8) DIVIDENDSDECLARED
a) Unrecognisedamounts
Dividendsonordinaryshares:
Finalfrankeddividendfor2009:nil
(2008:2.2centspershare)
CONSOLIDATED
2009
2008
$
$
PARENT
2009
$
1,397,843
2008
$
1,397,843
b) Frankingcreditbalance
The amount of franking credits available for the subsequent financial
year:
Franking account balance as at the end of theprevious financial year at
30%(2008:30%)
Franking credits that arose from the payment of income tax payable
duringthefinancialyear
Frankingcreditsthatwillarisefromthepaymentofincometaxpayableat
theendofthefinancialyear
Franking debits that will arise from the payment of dividends as at the
endofthefinancialyear
PARENT
2009
$
2008
$
625,289
1,308,557
76,370
157,011
968,272
2,090,857
(419,353)
625,289
67
ACN120394194
9) EARNINGSPERSHARE
Thefollowingreflectstheincomeusedinthebasicanddilutedearningspersharecomputations:
a) Earningsusedincalculatingearningspershare
Forbasicanddilutedearningspershare:
Netprofitattributabletoordinaryequityholdersoftheparent
b) Weightedaveragenumberofshares
Weighted average number of ordinary shares for basic and diluted
earningspershare
CONSOLIDATED
2009
$
2008
$
593,875
2009
No.
1,544,303
2008
No.
66,860,219
58,012,296
Noinstruments(egshareoptions)existedatbalancesheetdatewhichcouldpotentiallydilutebasic
earningspershareineitheroftheperiodspresented.
Therehavebeennotransactionsinvolvingordinarysharesorpotentialordinarysharesthatwould
significantly change the number of ordinary shares or potential ordinary shares outstanding
betweenthereportingdateandthedateofcompletionofthesefinancialstatements.
10) CASHANDCASHEQUIVALENTS
Cashatbankandinhand
Shorttermdeposits
CONSOLIDATED
2009
2008
$
$
600,694
941,045
4,685,721
600,694
5,626,766
PARENT
2009
2008
$
$
547,437
40,642
3,504,081
547,437
3,544,723
Cashatbankearnsinterestatfloatingratesbasedondailybankdepositrates.Thecarryingamounts
ofcashandcashequivalentsapproximatesfairvalue.
Reconciliationtocashflowstatement
Forthepurposesofthecashflow
statement,cashandcashequivalents
comprisethefollowingat30June:
Cashatbankandinhand
Shorttermdeposits
Bankoverdrafts(note20)
CONSOLIDATED
2009
2008
$
$
600,694
(134,819)
465,875
941,045
4,685,721
5,626,766
PARENT
2009
$
547,437
547,437
2008
$
40,642
3,504,081
3,544,723
68
ACN120394194
11) TRADEANDOTHERRECEIVABLES
Tradereceivables
Allowanceforimpairmentloss(a)
Unbilledclientdisbursements
Prepayments
Interestreceivable
Otherreceivables
Carryingamountoftradeandother
receivables
CONSOLIDATED
2009
2008
$
$
4,862,586
2,275,812
(104,839)
(12,957)
4,757,747
2,262,855
139,019
91,419
651,276
258,893
36,266
68,191
2,085
5,616,233
PARENT
2009
2008
$
$
107,370
7,390
14,509
948
2,651,518
107,370
22,847
a) Allowanceforimpairmentloss
Tradereceivablesarenoninterestbearingandaregenerallyon3060dayterms.Anallowancefor
impairmentlossisrecognisedwhenthereisobjectiveevidencethatanindividualtradereceivableis
impaired.Animpairmentlossof$359,678(2008:$16,111)hasbeenrecognisedbytheGroupinthe
current year which includes bad debts expense recognised of $267,796 (2008: $3,154). These
amountshavebeenincludedinotherexpenses.
Movementsintheallowanceforimpairmentlosswereasfollows:
Openingbalanceatthebeginningoftheyear
Chargefortheyear
Closingbalanceattheendoftheyear
CONSOLIDATED
2009
2008
$
$
12,957
91,882
12,957
104,839
12,957
PARENT
2009
$
2008
$
Asat30June2009,theaginganalysisoftradereceivablesisasfollows:
2009
Consolidated
2009
Parent
2008
Consolidated
2008
Parent
*PDNIpastduenotimpaired
Total
4,862,586
3160
days
6190
Days
PDNI*
2,245,394
739,220
389,147
1,383,986
030
days
6190
Days
CI*
+91
Days
PDNI*
2,275,812
1,094,502
413,385
176,972
+91
Days
CI*
577,996
104,839
12,957
CIconsideredimpaired
Receivables past due but not considered impaired are: Consolidated $1,786,090 (2008: $754,968).
Eachoperatingunithasbeenindirectcontactwiththerelevantdebtorandissatisfiedthatpayment
willbereceivedinfull.
Otherbalanceswithintradeandotherreceivablesdonotcontainimpairedassetsandarenotpast
due.Itisexpectedthattheseotherbalanceswillbereceivedwhendue.
69
ACN120394194
11)TRADEANDOTHERRECEIVABLES(continued)
b) Fairvalueandcreditrisk
Duetotheshorttermnatureofthesereceivables,theircarryingvalueisassumedtoapproximate
theirfairvalue.
Themaximumexposuretocreditriskisthefairvalueofreceivables.
12) WORKINPROGRESS
Workinprogress
CONSOLIDATED
2009
2008
$
$
1,370,212
PARENT
2009
$
1,084,352
2008
$
Allowanceforrecoverableamount
Workinprogressisvaluedatitsnetrealisablevalueafterprovidingforanyforeseeablelossesthat
havebeencalculatedusinghistoricaldata.
13) NONCURRENTRECEIVABLES
Loanstowhollyownedsubsidiaries
CONSOLIDATED
2009
2008
$
$
PARENT
2009
$
10,330,517
2008
$
5,572,639
Relatedpartyreceivables
Loans to wholly owned subsidiaries are not interest bearing and are eliminated on consolidation.
Theparentcompanydoesnotexpecttorecalltheloanwithinthenext12months.
70
ACN120394194
14) PLANTANDEQUIPMENT
Reconciliationofcarryingamountsatthebeginningandendoftheperiod
Plantand
equipment
$
CONSOLIDATED
Leased
equipment
$
Yearended30June2009
Balanceasat1July2008netofaccumulateddepreciation
Additions
Acquisitionofsubsidiary(note30)
Disposals
Depreciationchargefortheyear
Balanceasat30June2009netofaccumulateddepreciation
Total
$
182,891
180,612
474,665
(3,859)
(151,427)
682,882
9,945
962
(2,429)
8,478
192,836
181,574
474,665
(3,859)
(153,856)
691,360
Asat30June2009
Cost
Accumulateddepreciation
Netcarryingamount
911,224
(228,342)
682,882
10,907
(2,429)
8,478
922,131
(230,771)
691,360
Plantand
equipment
$
CONSOLIDATED
Leased
equipment
$
Yearended30June2008
Additions
Disposals
Total
$
80,826
196,215
(1,199)
(92,951)
182,891
13,159
(3,214)
9,945
80,826
209,374
(1,199)
(96,165)
192,836
Asat30June2008
Cost
Netcarryingamount
275,842
(92,951)
182,891
13,159
(3,214)
9,945
289,001
(96,165)
192,836
71
ACN120394194
14) PLANTANDEQUIPMENT(continued)
Plantand
equipment
$
Yearended30June2009
Balanceasat1July2008netofaccumulateddepreciation
Additions
3,184
3,408
(1,569)
5,023
Asat30June2009
Cost
Netcarryingamount
6,906
(1,883)
5,023
PARENT
Leased
equipment
$
Total
$
3,184
3,408
(1,569)
5,023
6,906
(1,883)
5,023
Plantand
equipment
$
Yearended30June2008
Additions
3,498
(314)
3,184
Asat30June2008
Cost
Netcarryingamount
3,498
(314)
3,184
PARENT
Leased
equipment
$
Total
$
3,498
(314)
3,184
3,498
(314)
3,184
72
ACN120394194
15) GOODWILL
a) Reconciliationofcarryingamountsatthebeginningandendoftheperiod
Yearended30June2008
Balanceasat26June2006netofaccumulatedimpairment
Impairment
CONSOLIDATED
2008
$
6,546,059
(215,826)
6,330,233
Asat30June2008
Cost(grosscarryingamount)
Accumulatedimpairment
Netcarryingamount
6,546,059
(215,826)
6,330,233
Yearended30June2009
Balanceasat1July2008netofaccumulatedimpairment
Impairment
CONSOLIDATED
2009
$
6,330,233
4,492,030
(450,000)
10,372,263
Asat30June2009
Accumulatedimpairment
Netcarryingamount
11,038,089
(665,826)
10,372,263
PARENT
2008
$
2,616,164
(96,164)
2,520,000
2,616,164
(96,164)
2,520,000
PARENT
2009
$
2,520,000
(450,000)
2,070,000
2,616,164
(546,164)
2,070,000
(b)DescriptionoftheGroupsgoodwill
After initial recognition, goodwill acquired in a business combination is measured at cost less any
accumulatedimpairmentlosses.Goodwillisnotamortisedbutissubjecttoimpairmenttestingon
anannualbasisorwheneverthereisanindicationofimpairment(refertosection(d)ofthisnote).
(c)Impairmentlossesrecognised
An impairment loss of $450,000 on goodwill was recognised in the 2009 financial year (2008:
$215,826).TheimpairedgoodwillrelatedtoLawCentralCoPtyLtd.Theimpairmentlosshasbeen
recognisedintheIncomeStatementinthelineitemimpairmentloss.
TheimpairmentchargereflectsthesignificantchangeineconomicconditionssincetheCompanys
acquisitionofLawCentralinAugust2007,whichhasresultedinadeclineintherelativevalueofthe
business.
73
ACN120394194
15)GOODWILL(continued)
Operating revenue of Law Central fell below historical levels during the 2008/09 financial year
impactedbyreduceddemandinlinewiththebroadereconomicenvironment.
TheLawCentralCoPtyLtdcashgeneratingunitisincludedintheinformationtechnologysegment.
(d)Impairmenttestsforgoodwillwithindefiniteusefullives
(i)Descriptionofthecashgeneratingunitsandotherrelevantinformation
Goodwill acquired through business combinations has been allocated to four individual cash
generatingunitsforimpairmenttestingasfollows:
TalbotOliviercashgeneratingunit(legalservicesreportablesegmentrefernote5);
BrettDaviesLawyerscashgeneratingunit(legalservicesreportablesegmentrefernote5);
LawCentralcashgeneratingunit (informationtechnologyreportablesegmentrefernote
5);and
ArgyleLawyerscashgeneratingunit(legalservicesreportablesegmentrefernote5).
Therecoverableamountsofthecashgeneratingunits,excludingLawCentral,havebeendetermined
based on a value in use calculation using cash flow projections as at 30 June that is based on a
discountedcashflowmethodology.
TherecoverableamountoftheLawCentralcashgeneratingunithasbeendeterminedbasedonthe
fairvaluelesscoststosellcalculationusingcashflowprojectionsasat30June2009thatisbasedon
financial budgets approved by the Board covering a fiveyear period. This method calculates the
bestestimatethatanindependentthirdpartywouldpaytopurchasethecashgeneratingunitless
applicablesellingcostsatthebalancesheetdate.Thevaluationisbasedoncashflowprojections
using assumptions that represent managements best estimate of the range of business and
economicconditionsatthistime.
ThevaluationshavebeenreviewedandapprovedbytheBoard.
Thevalueinuseandfairvaluelesscoststosellvaluationsarecomparedtothenetcarryingamount
of goodwill recognised in the accounts. If the calculated recoverable amount exceeds the net
carryingamount,noimpairmentlossisrecorded.
74
ACN120394194
(ii)Keyassumptionsusedinrecoverablevaluecalculations
Thekeyassumptionsmadebymanagementindeterminingtherecoverablevalueinclude:
Yearended30June2009
Goodwillrecognised
Pretaxnominaldiscountrate
Growthinfees2010
Growthinfees20112014
Yearended30June2008
Goodwillrecognised
Pretaxnominaldiscountrate
Growthinfees20092013
Talbot
Oliver
$3,106,233
17.5%
20.5%
5.0%
$3,106,233
18.5%
8.0%
Brett
Davies
Lawyers
$704,000
17.5%
25.0%
5.0%
$704,000
18.5%
8.0%
Law
Central
$2,070,000
17.5%
18.0%
5.4%
$2,520,000
18.5%
8.0%
Argyle
Lawyers
$4,492,030
17.5%
20.6%
5.0%
$4,492,030
18.5%
8.0%
Discountrate
The discountrateappliedof17.5%(2008:18.5%)iscalculated usingtheweightedaveragecostof
capitalmethodandreflectsmanagement'sestimateofthetimevalueofmoneyandrisksspecificto
the cash generating units. This is the benchmark used by management to assess operating
performanceandtoevaluatefutureinvestmentproposals.
Growthinfees
The forecast growth in fees is calculated on historical fees adjusted for budgeted fee increases,
anticipatedinflationandfeegrowthtobegeneratedfromtheclientbaseinlinewithmarkettrends.
(iii)Sensitivitytochangesinassumptions
WithregardstotheassessmentofthevalueinuseoftheTalbotOlivier,BrettDaviesLawyersand
ArgyleLawyerscashgeneratingunits,managementconsiderthatnoreasonablypossiblechangein
any of the key assumptions in (ii) above would significantly erode the headroom calculated and
cause the carrying value of the cash generating units to exceed its recoverable amount. This
assurance has been obtained by the analysis performed in the recoverable value calculations
whereby management assessed the results of the Group not meeting fee revenue growth targets
andapplyingthehighestreasonablypossiblediscountrates.
WithregardstotheassessmentofthefairvaluelesscoststoselloftheLawCentralcashgenerating
unit,reasonablypossiblechangesinkeyassumptionsin(ii)abovecouldcausethecarryingvalueof
the unit to exceed its recoverable amount. This is discussed below. At 30 June 2009, the actual
recoverable amount for the Law Central cash generating unit agrees to its carrying amount of
$2,070,000(2008:$2,520,000).
75
ACN120394194
Theimplicationsofthekeyassumptionsontherecoverableamountarediscussedbelow:
Discountrates
Management recognises that actual time value of money may vary to what they have
estimated.However,managementconsidersthediscountrateappliedinthefairvalueless
costs to sell model to be conservative and do not consider a higher discount rate to be
reasonablypossible.
Growthinfees
Management recognises that market conditions have a significant impact on growth rate
assumptions. The effect of changing market conditions could yield a reasonably possible
alternativetotheestimatedlongtermgrowthrateof5.4%withrespecttotheLawCentral
cashgeneratingunit.ShouldmarketconditionsresultintheGroupbeingunabletoachieve
thisgrowthtarget,theLawCentralcashgeneratingunitsfairvaluelesscoststosellmaybe
reducedtolessthanitscarryingvalue.
16) INTANGIBLEASSETS
a) Reconciliationofcarryingamountsatthebeginningandendoftheperiod
Yearended30June2009
Balanceasat1July2008netofaccumulatedamortisation
Amortisation
Balanceasat30June2009netofaccumulatedamortisation
Asat30June2009
Accumulatedamortisation
Netcarryingamount
Yearended30June2008
Acquisitionofbusiness(note30)
Amortisation
Asat30June2008
Accumulatedamortisation
Netcarryingamount
CONSOLIDATED
2009
$
136,620
(35,640)
100,980
163,254
(62,274)
100,980
PARENT
2009
$
CONSOLIDATED
2008
$
163,254
(26,634)
136,620
163,254
(26,634)
136,620
PARENT
2008
$
76
ACN120394194
16)INTANGIBLEASSETS(continued)
b) DescriptionoftheGroupsidentifiedintangibleassets
Intangibleassetsrepresentthevalueofleasedpremisesacquiredupontheacquisitionofthelegal
practice of Peter Marks in the 30 June 2008 financial year and is carried at cost less accumulated
amortisation.Thisintangibleassethasbeenassessedashavingafinitelifeandisamortisedusing
the straight line method over the remaining term of the lease. The amortisation has been
recognisedintheIncomeStatementinthelineitemdepreciationandamortisationexpense.
17) INVESTMENTSINSUBSIDIARIES
Unlisted
1ordinaryshareheldinTalbotOlivier
PtyLtdtradingasTalbotOlivieratcost
1ordinaryshareheldinTaxLawyers
AustraliaPtyLtdtradingasBrettDavies
Lawyersatcost
57,010,000ordinarysharesheldinLaw
CentralCoPtyLtdatcost
2ordinarysharesheldinArgyleLawyers
PtyLtd
CONSOLIDATED
2009
2008
$
$
PARENT
2009
$
2008
$
712,884
712,884
2
712,888
712,886
18) OTHERNONCURRENTASSETS
Availableforsalefinancialassets
Sharesinlistedsecuritiesatfairvalue
CONSOLIDATED
2009
2008
$
$
2,677
2,524
2,677
2,524
PARENT
2009
$
2,677
2,677
2008
$
2,524
2,524
Availableforsale investments consist of investments in ordinary shares. The fair value of listed
availableforsale investments has been determined directly by reference to published price
quotationsinanactivemarket.
77
ACN120394194
19) TRADEANDOTHERPAYABLES
Tradepayables
Otherpayablesandaccruals
CONSOLIDATED
2009
2008
$
$
279,882
859,110
1,458,340
221,899
1,738,222
1,081,009
PARENT
2009
2008
$
$
22,756
78,629
199,405
67,982
222,161
146,611
a) Fairvalue
Duetotheshorttermnatureofthesepayables,theircarryingvalueisassumedtoapproximatetheir
fairvalue.
b) Interestrateandliquidityrisk
Informationregardinginterestrateandliquidityriskexposureissetoutinnote3.
20) INTERESTBEARINGLOANSANDBORROWINGS
Current
Bankoverdraft
Obligationsunderfinanceleasesandhire
purchasecontracts(note31(i))
Insurancepremiumfunding(unsecured)
Bankloan(secured)
CONSOLIDATED
2009
2008
$
$
134,819
72,734
313,777
723,000
1,244,330
NonCurrent
Obligationsunderfinanceleasesandhire
purchasecontracts(note31(i))
Loanrelatedparty(unsecured)(note27)
Bankloan(secured)
PARENT
2009
$
2008
$
1,713
168,051
169,764
723,000
723,000
63,555
550
1,000,000
1,064,105
18,708
18,708
1,000,000
1,000,000
The carrying amount of the Groups current and noncurrent borrowings approximate their fair
value.Detailsregardingliquidityriskisdisclosedinnote3.
a) Assetspledgedassecurity
The carrying amounts of assets pledged as security for current and noncurrent interest bearing
liabilitiesare:
Financelease
Leasedofficeequipment(note31(i))
Totalassetspledgedassecurity
CONSOLIDATED
2009
2008
$
$
8,478
27,821
8,478
27,821
PARENT
2009
$
2008
$
Inaddition,the$1,723,000bankloanissecuredbyafixedandfloatingchargeoverthetotalassets
ofthegroup.
78
ACN120394194
20)INTERESTBEARINGLOANSANDBORROWINGS(continued)
b) Defaultsandbreaches
Duringtheyeartherewerenodefaultsorbreachesonanyoftheloans.
21) PROVISIONS
Current
Longserviceleave
Annualleave
NonCurrent
Longserviceleave
CONSOLIDATED
2009
2008
$
$
104,027
18,555
355,439
154,556
459,466
173,111
177,620
177,620
PARENT
2009
$
2008
$
23,410
23,410
10,501
10,501
819
819
223
223
119,986
119,986
22) OTHERLIABILITIES
Current
Deferredconsiderationpayable(1)
NonCurrent
Deferredconsiderationpayable(2)
Leaseincentiveobligation(3)
CONSOLIDATED
2009
2008
$
$
200,000
85,837
292,585
378,422
PARENT
2009
$
2008
$
(1)Deferredconsiderationpayableontheacquisitionmdalawyers(seenote30)
(2)DeferredconsiderationpayableontheacquisitionofTheArgylePartnershipLawyers(seenote30)
(3) Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease
paymentsbetweenrentalexpenseandreductionoftheliabilitytoensurerentalexpenseisrecognisedonastraightline
basisovertheleaseterm.
79
ACN120394194
23) ISSUEDCAPITAL
Ordinaryshares:
69,014,511(2008:63,538,320)ordinary
fullypaidshares
331,667(2008:nil)ordinarypartlypaid
shares(1)
69,346,178(2008:63,538,320)ordinary
shares
(1)DeferredEmployeeSharePlan(note29)
CONSOLIDATED
2009
2008
$
$
30,489,975
14,838
30,504,813
PARENT
2009
$
29,729,975
30,489,975
14,838
29,729,975
30,504,813
2008
$
29,729,975
29,729,975
Fullypaidordinarysharescarryonevotepershareandcarrytherighttodividends.Theshareshave
noparvalue.
Movementinordinarysharesonissue:
Openingbalanceat1July2007
Issueofsharestosubscribersofinitialpublicofferingon17August2008at50centsper
share
IssueofsharestoshareholdersofLawCentralCoPtyLtdatadeemedvalueof50cents
pershareaspartoftheconsiderationfortheacquisitionofthecompany
Issueofsharesatamarketvalueof15centspersharetoGFowleron21April2009on
hisappointmentasManagingDirector/CEOoftheCompanysharebasedpayments
Costsassociatedwiththecapitalraising
Incometaxoncapitalraisingcoststakendirectlytoequity
Shares
34,736,704
$
17,368,352
24,833,320
12,416,660
1,258,096
629,048
2,710,200
63,538,320
406,530
(1,514,575)
423,960
29,729,975
Shares
63,538,320
$
29,729,975
4,142,857
331,667
1,333,334
69,346,178
580,000
14,838
180,000
30,504,813
Openingbalanceat1July2008
Issueofsharesat14centspersharetovendorsofTheArgylePartnershipLawyerson
4November2008
IssueofsharesundertheDeferredEmployeesSharePlan
Issueofsharesat13.5centspersharetovendorofmdalawyerson13March2009
80
ACN120394194
23)ISSUEDCAPITAL(continued)
a) Capitalmanagement
TheGroupsobjectiveswhenmanagingcapitalaretosafeguardtheGroupsabilitytocontinueasa
going concern, in order to provide returns to shareholders, and to maintain an optimal capital
structure to allow the Group to pursue its future acquisition activities. Capital is comprised of
shareholdersequityasdisclosedintheBalanceSheet.
Inordertomaintainoradjustthecapitalstructure,theGroupmayadjusttheamountofdividends
paidtoshareholdersandincreaseordecreasetheGroupsdebt,subjecttothecapitalrequirements
oftheGroupsoperationsatthetime.
The Directors have not declared a final dividend for the 2009 financial year (2008: 2.2 cents per
share).
TheGroupmonitorscapitalonthebasisofthegearingratio.ThelevelofgearingintheCompanyis
withintheacceptablelimitssetbytheDirectorsgiventheimplicationsofthebusinessacquisitions
andpaymentoftaxliabilitiesduringtheyear.
24) ACCUMULATEDLOSSES
AccumulatedLosses
CONSOLIDATED
2009
2008
$
$
PARENT
(16,641,034)
(15,823,884)
(18,493,556)
(18,117,477)
Balanceatthebeginningoftheyear
Dividendspaid
Balanceatendoftheyear
(15,823,844)
593,875
(1,411,065)
(16,641,034)
(17,368,147)
1,544,303
(15,823,884)
(18,117,477)
1,034,986
(1,411,065)
(18,493,556)
(17,368,147)
(749,330)
(18,117,477)
2009
$
2008
$
25) RESERVES
Netunrealisedgainsreserve:
Netunrealisedlossonavailableforsale
investments
CONSOLIDATED
2009
2008
$
$
(1,373)
(1,485)
PARENT
2009
$
(1,373)
2008
$
(1,485)
Netunrealisedgainsreserve
Thisreserverecordsmovementsinthefairvalueofavailableforsalefinancialassets.
81
ACN120394194
26) CASHFLOWRECONCILIATION
a)
Reconciliationofnetprofit/(loss)after
taxtonetcashflowsfromoperations
Netprofit/(loss)
Adjustmentsfor:
Dividendsreceivedasshares(DRP)
Impairmentlosses
Changesinassetsandliabilities:
(Increase)/decreaseintradeandother
receivables
(Increase)/decreaseinworkinprogress
(Increase)/decreaseinnetdeferredtax
assets
Increase/(decrease)inprepayments
Increase/(decrease)inavailableforsale
assets
Increase/(decrease)intradeandother
payables
Increase/(decrease)inincometaxpayable
Increase/(decrease)inprovisions
Netcashfrom/(usedin)operating
activities
CONSOLIDATED
2009
2008
$
$
PARENT
2009
$
2008
$
593,875
(41)
189,496
450,000
14,838
1,544,303
122,799
215,826
406,530
1,034,986
(41)
1,569
450,000
2,753
(749,330)
314
96,164
406,530
(2,245,095)
(285,860)
(1,475,449)
(884,352)
(84,523)
(22,847)
17,313
(334,753)
(20,979)
60,460
(147,539)
66,143
(153)
(153)
650,950
(811,261)
107,946
374,106
887,300
(50,653)
172,309
(811,261)
13,505
146,610
(171,210)
10,724
(1,652,745)
1,119,431
692,065
(216,902)
760,000
629,048
760,000
629,048
b)
Noncashfinancingandinvesting
activities
Settlementofsubsidiarypurchasewith
shares(note30)
27) RELATEDPARTIES
a) Subsidiaries
TheconsolidatedfinancialstatementsincludethefinancialstatementsofIntegratedLegalHoldings
Limitedandthesubsidiarieslistedinthefollowingtable:
Name
TalbotOlivierPtyLtd
TaxLawyersAustraliaPtyLtd
LawCentralCoPtyLtd
ArgyleLawyersPtyLtd
Countryof
Incorporation
Australia
Australia
Australia
Australia
%EQUITYINTEREST
2009
2008
100%
100%
100%
100%
100%
100%
100%
INVESTMENT
2009
2008
1
1
1
1
712,884
712,884
2
712,888
712,886
b) Ultimateparent
IntegratedLegalHoldingsLimitedistheultimateAustralianparententityandtheultimateparentof
theGroup.
82
ACN120394194
27)RELATEDPARTIES(continued)
c) Keymanagementpersonnel
DetailsrelatingtoKMP,includingremunerationpaid,areincludedinnote28.
d) Transactionswithrelatedparties
The following table provides the total amount of transactions that were entered into with related
parties for the relevant financial year (for information regarding outstanding balances on related
partypayablesatyearend,refertonote20):
RelatedParty
CONSOLIDATED
Subsidiaries:
BrettDaviesLawyerslegaladviceforLawCentral
LawCentrallegaladvicefromBrettDavies
Associates:
BrettDaviestradingasBrettDaviesLawyers
Reimbursementowingtopreacquisitionbusiness
DaviesServiceTrustoperatingleaserelatingto
premisesoccupiedbyBrettDaviesLawyers,Law
CentralandIntegratedLegalHoldingsLtd.
2009
2008
2009
2008
Other
Transactions
withRelated
Parties
$
Purchases
from
Related
Parties
$
Salesto
Related
Parties
$
68,660
62,582
68,660
62,582
2009
2008
2009
2008
550
116,282
87,704
RelatedParty
PARENT
Subsidiaries:
BrettDaviesLawyerslegaladvice
TalbotOlivierlegalservicesinrelationtonew
businessacquisitions
ArgyleLawyerslegalservicesinrelationtonew
businessacquisitions
2009
2008
Purchases
from
Related
Parties
$
Salesto
Related
Parties
$
2,530
4,400
Other
Transactions
withRelated
Parties
$
2009
2008
118,501
2009
2008
4,306
83
ACN120394194
27)RELATEDPARTIES(continued)
Termsandconditionsoftransactionswithrelatedparties
Sales to and purchases from related parties are made in arms length transactions both at normal
marketpricesandonnormalcommercialterms.
Termsandconditionsofthetaxfundingarrangementaresetoutinnote7(e)(i).
Outstandingbalancesatyearendareunsecured,interestfreeandsettlementoccursincash.
28) KEYMANAGEMENTPERSONNEL
a) CompensationofKeyManagementPersonnel
Shorttermemployeebenefits
Postemploymentbenefits
Otherlongtermbenefits
Sharebasedpayment
2009
$
2008
$
929,277
189,650
51,923
2,753
1,173,603
319,724
138,242
587
406,530
865,083
b) ShareholdingsofKeyManagementPersonnel
OrdinarysharesheldinIntegratedLegalHoldingsLimited:
Balance
1July2008
Directors
JDawkins
ATregonning
GFowler
PBobbin
(4)
JMRudd
1,626,398
300,000
2,710,200
2,710,200
(1)(2)(3)
Executives
BDavies
Balance
30June2009
300,000
BTaylor
NetChange
Other
1,626,398
Total
Grantedas
Remuneration
3,068,340
3,068,340
7,562,916
7,562,916
1,807,727
1,807,727
27,500
75,000
102,500
15,295,354
75,000
1,807,727
17,178,081
(1)MrBobbinwasappointedasManagingprincipalofArgyleLawyerson1November2008.
(2)1,696,429shareswereacquiredasvendorofTheArgylePartnershipLawyers;theremaining111,298shareswereacquiredonmarket
byMrBobbin.
(3)1,696,429sharesaresubjectto36monthvoluntaryescrowrestrictionfrom4November2008.
(4)AcquiredundertheDeferredEmployeeSharePlan(note29).
84
ACN120394194
28)KEYMANAGEMENTPERSONNEL(continued)
Balance
1July2007
Directors
JDawkins(4)
(4)
ATregonning
THenn
Grantedas
Remuneration
(1)(4)
(4)
GFowler
1,626,398
300,000
300,000
140,000
(140,000)
Executives
Balance
30June2008
1,626,398
(2)(4)
NetChange
Other
2,710,200
2,710,200
BTaylor
3,068,340
3,068,340
BDavies
(2)(4)
7,562,916
7,562,916
27,500
27,500
2,710,200
10,518,756
15,295,354
(3)
JMRudd
Total
2,066,398
(1)MrHennresignedasManagingDirectoron28April2008.
(2)MrTaylorandMrDavieswereappointedasManagingPrincipalson10August2007.
(3)MrsRuddcommencedemploymenton4September2007.
(4)Thesesharesaresubjectto24monthvoluntaryescrowrestrictionfrom17August2007,whichisthedatetheCompanylistedonthe
ASX.
c) OthertransactionswithKeyManagementPersonnelandtheirrelatedparties
LeaseofBusinessPremises
The Companys corporate office, Brett Davies Lawyers and Law Central Co Pty Ltd share business
premisesat201AdelaideTerrace,Perth.ThesepremisesareleasedfromTheDaviesServiceTrust,
anentitythatiscontrolledbyMrDavies,ManagingprincipalofBrettDaviesLawyers.Monthlylease
rentalsforeachoftheseentitieshavebeencalculatedatcommercialmarketrates.
AmountsrecognisedatthereportingdateinrelationtoothertransactionswithKMP:
Revenueandexpenses
Rentpaid
2009
$
116,282
2008
$
87,704
85
ACN120394194
29) SHAREBASEDPAYMENTPLANS
a) Recognisedsharebasedpaymentexpenses
Theexpenserecognisedforemployeeservicesreceivedduringtheyearisshowninthetablebelow:
Expensearisingfromequitysettled
sharebasedpaymenttransactions
CONSOLIDATED
2009
2008
$
$
14,838
406,530
PARENT
2009
$
2,753
2008
$
406,530
The sharebased payment plans are described below. There have been no cancellations or
modificationstoanyoftheplansduringtheyear.
b) Typesofsharebasedpaymentplans
Taxexemptemployeeshareplan(TEESP)
AllemployeesareeligibletoparticipateintheTEESPiftheymeetthefollowingcriteria:
i.
TheyareapermanentfulltimeorpermanentparttimeemployeeoftheGroup;
ii.
Theyhavemettheprobationperiodunderthetermsoftheiremploymentcontract;
iii.
Theyareatleast18yearsofage;and
iv.
TheyareanAustralianresidentfortaxpurposes.
EmployeeswhoparticipateintheTEESPcannominatetocontributeupto$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
ownershipofsharesundertheplan.
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.
TheyareanAustralianresidentfortaxpurposes.
86
ACN120394194
29)SHAREBASEDPAYMENTPLANS(continued)
UndertheDESP,thefairvalueofthesharesissetatthemarketpriceofthesharesonthedateof
grant.
Whenaparticipantceasesemploymentpriortothevestingoftheirshares,thesharesareforfeited
in full or in part, depending on the terms of award of those shares. In the event of a change of
control, the performance period end date will be brought forward to the date of the change of
controlandawardswillvestsubjecttoperformanceoverthisshortenedperiod.
Thevestingperiodofeachshareisthreeyears.Therearenocashsettlementalternatives.
c) SummaryofsharesgrantedunderTEESPandDESParrangements
The following table illustrates the number of and movements in shares granted during the period
undertheTEESPandtheDESP:
TEESP:
Openingbalanceasat1July2008
Grantedduringtheyear(1)
Closingbalanceasat30June2009
DESP:
Openingbalanceasat1July2008
Grantedduringtheyear
Closingbalanceasat30June2009
CONSOLIDATED
2009
2008
No
No
PARENT
2009
No
2008
No
255,842
255,842
255,842
255,842
331,667
331,667
331,667
331,667
(1)SharesgrantedundertheTESParepurchasedonmarketatgrantdateandimmediatelytransferredtotheemployee.
d) Weightedaverageremainingcontractuallife
Theweightedaverageremainingcontractuallifeasat30June2009forthesharesissuedduringthe
yearundertheDESPis2.13years(2008:nil).
e) Weightedaveragefairvalue
TheweightedaveragefairvalueofsharesgrantedduringtheyearundertheTEESPwas15.8cents
(2008:nil).
Theweightedaveragefairvalueofsharesgranted during theyearunderthe DESPwas16.0cents

(2008:nil).
87
ACN120394194
30) BUSINESSCOMBINATIONS
AcquisitionofArgyleLawyers
On4November2008,IntegratedLegalHoldingsLimited,throughitswhollyownedsubsidiary,Argyle
LawyersPtyLtd,acquiredthelegalpracticeofTheArgylePartnership.Thetransactioniseffective
from1November2008.
The consideration for the acquisition was a combination of cash plus 4,142,857 Integrated Legal
Holdings Ltd shares issued at 14 cents and is subject to significant employment restraints and
conditions. Part of the cash component will be deferred until 30 June 2010 and is subject to
financial performance in that year. The cash component of the purchase consideration has been
fundedfromsurpluscashreserves.
Accountingforthebusinessacquisitionremainsprovisionallydeterminedbecauseallcircumstances
andfactorsaffectingfairvaluesoftheidentifiablenetassetsacquiredhaveyettobefinalisedatthe
endoftheperiod.
Thefollowingconstitutestheprovisionalcalculationoftheconsiderationgivenandthefairvalueof
netassetsacquired:
Consideration
Cash
Deferredcashconsideration
Costsassociatedwithacquisition
Totalcashconsideration
Sharesissuedasconsideration
Totalacquisitioncost
Netassetsacquired
Assets
Plantandequipment
Prepayments
Securitybond
Deferredtaxasset
Totalassetsacquired
Liabilities
Deferredtaxliability
Provisions
Totalliabilitiesacquired
Netassetsacquired
Goodwillonacquisition
Fair
Value
$
454,741
107,350
2,720
65,051
629,862
7,800
131,000
216,835
355,635
274,227
2,523,218
2,050,000
77,528
89,917
2,217,445
580,000
2,797,445
Carrying
Amount
$
454,741
107,350
2,720
65,051
629,862
7,800
131,000
216,835
355,635
274,227
Fromthedateofacquisition,ArgyleLawyershascontributed$35,092tothenetprofitbeforetaxof
theGroup.
88
ACN120394194
30)BUSINESSCOMBINATIONS(continued)
AsthefinancialinformationofArgyleLawyerspriortoacquisitionwasnotpreparedinaccordance
withAustralianAccountingStandards,itisimpracticablefortheGrouptodisclosethetotalrevenue
andprofitforthecombinedentityasthoughtheacquisitionhadtakenplaceatthebeginningofthe
period.
Thecashoutflowonacquisitionisasfollows:
$
Netcashacquiredwiththebusiness

Cashpaid
2,139,917
Netconsolidatedcashoutflow
2,139,917
Mdalawyers
On13March2009,IntegratedLegalHoldingsLimited,throughitswhollyownedsubsidiary,Argyle
LawyersPtyLtd,acquiredthelegalpracticeofmdalawyers.Thisacquisitionwasmergedintothe
existingpracticeofArgyleLawyers.
The consideration for the acquisition was a combination of cash plus 1,333,334 Integrated Legal
Holdings Ltd shares issued at 13.5 cents and the acquisition is subject to significant employment
restraints and conditions. Part of the cash component will be deferred until March 2010 and is
subject to financial performance in the first twelve months following acquisition. The cash
componentofthepurchaseconsiderationhasbeenfundedfromsurpluscashreserves.
Thefollowingconstitutestheprovisionalcalculationoftheconsiderationgivenandthefairvalueof
netassetsacquired:
Consideration
Cash
Deferredcashconsideration
Costsassociatedwithacquisition
Totalcashconsideration
Sharesissuedasconsideration
Totalacquisitioncost
Netassetsacquired
Assets
Plantandequipment
Prepayments
Deferredtaxasset
Totalassetsacquired
Liabilities
Provisions
Totalliabilitiesacquired
Netassetsacquired
Goodwillonacquisition
Fair
Value
$
19,924
13,296
5,762
38,982
17,101
19,207
36,308
2,674
1,968,812
1,500,000
200,000
91,486
1,791,486
180,000
1,971,486
Carrying
Amount
$
19,924
13,296
5,762
38,982
17,101
19,207
36,308
2,674
89
ACN120394194
30)BUSINESSCOMBINATIONS(continued)
Accountingforthebusinessacquisitionremainsprovisionallydeterminedbecauseallcircumstances
andfactorsaffectingfairvaluesoftheidentifiablenetassetsacquiredhaveyettobefinalisedatthe
endoftheperiod.
TheacquireescontributiontothenetprofitoftheGroupcannotbedeterminedasthisbusinesshas
been incorporated into the Argyle Lawyers business, and it is impracticable to disclose the total
revenue and profit for the combined entity as though the acquisition had taken place at the
beginningoftheperiod.
Thecashoutflowonacquisitionisasfollows:
$
Netcashacquiredwiththebusiness

Cashpaid
1,591,486
Netconsolidatedcashoutflow
1,591,486
31) EXPENDITURECOMMITMENTS
i) Leasingcommitments
OperatingleasecommitmentsGroupaslessee
TheGrouphasenteredintooperatingleasesfortherentalofofficespaceatitsvariouscommercial
premises.Thesenoncancellableleaseshaveremainingtermsofbetween2to8years.Theleases
haverenewaloptions.Renewalsareattheoptionofthespecificentitythatholdsthelease.
Futureminimumrentalspayableundernoncancellableoperatingleasesasat30Juneareasfollows:
Withinoneyear
Afteroneyearbutnotmorethanfiveyears
Aftermorethanfiveyears
Totalminimumleasepayments
CONSOLIDATED
2009
2008
$
$
1,924,734
457,637
6,537,841
1,804,788
4,254,879
2,146,872
12,717,454
4,409,297
PARENT
2009
$
2008
$
90
ACN120394194
31)EXPENDITURECOMMITMENTS(continued)
FinanceleaseandhirepurchasecommitmentsGroupaslessee
TheGrouphasfinanceleasesandhirepurchasecontractsforvariousitemsofplantandequipment
withacarryingamountof$97,367(2008:$20,127).Thesecontractsexpirewithin1to4years.The
leaseshavetermsofrenewalandpurchaseoptions.Renewalsareattheoptionofthespecificentity
thatholdsthelease.
Withinoneyear
Totalminimumleasepayments
Lessamountsrepresentingfinancecharges
Presentvalueofminimumleasepayments
CONSOLIDATED
2009
2008
$
$
78,528
13,866
78,212
8,425
156,740
22,291
(20,451)
(1,870)
136,289
20,421
Includedinthefinancialstatementsas:
Currentinterestbearingloansand
borrowings(note20)
Noncurrentinterestbearingloansand
borrowings(note20)
Totalinterestbearingloansandborrowings
CONSOLIDATED
2009
2008
$
$
PARENT
2009
$
2008
$
PARENT
2009
$
2008
$
72,734
1,713
63,555
136,289
18,708
20,421
ii) Plantandequipmentrentalcommitments
TheGrouphascontractualobligationsfortherentalofplantandequipment.Therentalagreements
expirewithin1and3yearsandhavepurchaseoptionsonexpiry.Rentalcommitmentscontracted
foratbalancedatebutnotrecognisedasliabilitiesareasfollows:
Withinoneyear
Totalminimumrentalpayments
CONSOLIDATED
2009
2008
$
$
107,345
179,101
74,280
190,689
181,625
369,790
CONSOLIDATED
2009
2008
$
$
PARENT
2009
$
2008
$
iii) Remunerationcommitments
Commitmentsforthepaymentofsalaries
andotherremunerationunderlongterm
employmentcontractsinexistenceatthe
reportingdatebutnotrecognisedas
liabilities,payable:
Withinoneyear
4,440,335
10,442,163
14,882,498
472,500
294,966
767,466
PARENT
2009
$
272,500
225,466
497,966
2008
$
272,500
272,500
545,000
91
ACN120394194
31)EXPENDITURECOMMITMENTS(continued)
Amounts disclosed as remuneration commitments include commitments arising from the service
contractsofdirectorsandexecutivesreferredtointheRemunerationReportoftheDirectorsReport
thatarenotrecognisedasliabilitiesandarenotincludedinthecompensationofKMP.
32) CONTINGENCIES
Crossguarantees
Pursuant to Class Order 98/1418, relief has been granted to Talbot Olivier Pty Ltd, Tax Lawyers
AustraliaPtyLtd,ArgyleLawyersPtyLtdandLawCentralCoPtyLtdfromtheCorporationsAct2001
requirementsforpreparation,auditandlodgementoftheirfinancialreports.
As a condition of the Class Order, Integrated Legal Holdings Limited, Talbot Olivier Pty Ltd, Tax
LawyersAustraliaPtyLtd,ArgyleLawyersPtyLtdandLawCentralCoPtyLtdenteredintoaDeedof
CrossGuarantee.TheeffectofthedeedisthatIntegratedLegalHoldingsLimitedhasguaranteedto
payanydeficiencyintheeventofwindingupofeithercontrolledentityoriftheydonotmeettheir
obligationsunderthetermsofoverdrafts,loans,leasesorotherliabilitiessubjecttotheguarantee.
The controlled entities have also given a similar guarantee in the event that Integrated Legal
Holdings Limited is wound up or if it does not meet its obligations under the terms of overdrafts,
loans,leasesorotherliabilitiessubjecttotheguarantee.
The consolidated income statement and balance sheet of the Group represent the financial
performanceandpositionoftheentitiesthataremembersoftheClosedGroup.
33) AUDITORSREMUNERATION
TheauditorofIntegratedLegalHoldingsLimitedisErnst&Young.
Amounts received or due and receivable by Ernst &

Young(Australia)for:
anauditorreviewofthefinancialreportof
thecompany
otherservicesinrelationtothecompany
o Taxcompliance
o Taxationservices
AmountsreceivedordueandreceivablebynonErnst
&Young(Australia)firmsfor:
otherservicesinrelationtothecompany
o Specialauditsrequiredbyregulators
o Taxationservices
CONSOLIDATED
2009
2008
$
$
PARENT
2009
$
2008
$
243,161
18,813
7,737
269,711
243,730
9,470
32,853
286,053
243,161
18,813
7,737
269,711
243,730
9,470
32,853
286,053
17,838
1,366
19,204
288,915
6,313
2,144
8,457
294,510
269,711
507
507
286,560
92
ACN120394194
DirectorsDeclaration
InaccordancewitharesolutionofthedirectorsofIntegratedLegalHoldingsLimited,Istatethat:
1. Intheopinionofthedirectors:
a. Thefinancialstatements,notesandtheadditionaldisclosuresincludedinthedirectors
reportdesignatedasaudited,oftheCompanyandconsolidatedentityareinaccordance
withtheCorporationsAct2001,including:
i. givingatrueandfairviewoftheCompanysandconsolidatedentitysfinancial
positionasat30June2009andoftheirperformancefortheyearendedonthat
date;and
ii. complyingwithAccountingStandardsandCorporationsRegulations2001;and
b. therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebts
asandwhentheybecomedueandpayable.
2. This declaration has been made after receiving the declarations required to be made to the
directors in accordance with section 295A of the Corporations Act 2001 for the financial year
ended30June2009.
Intheopinionofthe directors,asatthedateofthisdeclaration,therearereasonablegroundsto
believe that the members of the closed group comprising the Company and its controlled entities
will be able to meet any obligations or liabilities to which they are or may become subject to by
virtueofthedeedofcrossguaranteereferredtoinnote32.
OnbehalfoftheBoard.
GFowler
ManagingDirector
Perth,25September2009
93
Independent audit report to members of Integrated Legal Holdings

Limited
Report on the Financial Report
We have audited the accompanying financial report of Integrated Legal Holdings Limited, which comprises
the balance sheet as at 30 June 2009, and the income statement, statement of changes in equity and
cash flow statement for the year ended on that date, a summary of significant accounting policies, other
explanatory notes and the directors declaration of the consolidated entity comprising the company and
the entities it controlled at the years end or from time to time during the financial year.
Directors Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial
report in accordance with the Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining
internal controls relevant to the preparation and fair presentation of the 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. In Note 2(a), the
directors also state that the financial report, comprising the financial statements and notes, complies with
International Financial Reporting Standards as issued by the International Accounting Standards Board.
Auditors Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on our judgment, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, we consider internal controls relevant to the entitys preparation and fair presentation of
the financial report 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 entitys internal controls. An audit
also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the directors, as well as evaluating the overall presentation of the financial
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Independence
In conducting our audit we have met 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. In addition to our audit of the financial report, we were engaged to
undertake the services disclosed in the notes to the financial statements. The provision of these services
has not impaired our independence.
Liability limited by a scheme approved

under Professional Standards Legislation
GHM:NR:ILH:036
Auditors Opinion
In our opinion:
1.
2.
the financial report of Integrated Legal Holdings Limited is in accordance with the Corporations
Act 2001, including:
i
giving a true and fair view of the financial position of Integrated Legal Holdings Limited
and the consolidated entity at 30 June 2009 and of their performance for the year ended
on that date; and
ii
complying with Australian Accounting Standards (including the Australian Accounting

Interpretations) and the Corporations Regulations 2001.
the financial report also complies with International Financial Reporting Standards as issued by
the International Accounting Standards Board.
Report on the Remuneration Report

We have audited the Remuneration Report included in pages 9 to 19 of the directors report for the year
ended 30 June 2009. 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.
Auditors Opinion
In our opinion the Remuneration Report of Integrated Legal Holdings Limited for the year ended 30 June
2009, complies with section 300A of the Corporations Act 2001.
Ernst & Young
G H Meyerowitz
Partner
Perth
25 September 2009
GHM:NR:ILH:036
ACN120394194
ASXAdditionalInformation
AdditionalinformationrequiredbytheAustralianStockExchangeLimitedandnotshownelsewhere
inthisreportisasfollows.Theinformationiscurrentasat31August2009.
a) Distributionofequitysecurities
Ordinarysharecapital
69,412,845fullypaidordinarysharesareheldby931individualshareholders.
Allissuedordinarysharescarryonevotepershareandcarrytherightstodividends.
Thenumbersofshareholdersbysizeofholdingare:
11,000
5
1,0015000
157
5,00110,000
246
10,001100,000
455
100,001andover
68
931
Holdinglessthanamarketableparcel
19
b) Substantialshareholders
Ordinaryshareholders
FullyPaid
Number
Percentage
DaviesSuperannuationFund
7,555,416
10.93
c) 20largestholdersofquotedequitysecurities
Ordinaryshareholders
DaviesSuperannuationFund
KordicFamilyTrust
JPOlivier
SkinnerFamilyTrust
SandsFamilyTrust
CatelliPorterFamilyTrust
HemeryFamilyTrust
TaylorFamilyTrust
FowlerSuperannuationFund
BobbinEdPtyLtd
AloaPtyLimited
JSDawkins
BBWhitford
DouglassSuperannuationFund
BJMaguire
TheHemerySuperannuationFund
TheTaylorSuperannuationFund
BradleyMaguireSuperannuationFund
SandsSuperannuationFund
GHGFowler
FullyPaid
Number
7,555,416
3,144,340
3,068,340
2,480,000
2,268,340
2,191,672
2,000,349
2,000,349
2,000,000
1,696,429
1,696,428
1,626,398
1,500,000
1,333,334
1,319,125
1,067,991
1,067,991
1,000,000
800,000
710,200
40,526,702
Percentage
10.93
4.55
4.44
3.59
3.28
3.17
2.89
2.89
2.89
2.45
2.45
2.35
2.17
1.93
1.91
1.54
1.54
1.45
1.16
1.03
58.61
96

058.ASX IAW Sept 25 2009 15.53 Full Year Statutory Accounts

Uploaded by

Document Information

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

058.ASX IAW Sept 25 2009 15.53 Full Year Statutory Accounts

Uploaded by

Copyright:

Available Formats

INTEGRATEDLEGALHOLDINGSLIMITED

Ms Tregonning is a graduate of The University of Western Australia, a Fellow of The Institute of

Mr Fowler is a business studies graduate of The University of Technology, Sydney, a Certified

As previously announced on 20 August 2009, a noncash impairment charge of $450,000 (2008:

Implementation of Board approved budget and Board monitoring of progress against

Auditor's Independence Declaration to the Directors of Integrated Legal

Ernst & Young

Liability limited by a scheme approved

d) No formal remuneration committee has been appointed. The remuneration of an executive

The total maximum remuneration of nonexecutive Directors is the subject of a shareholder

Qualitative factors considered include whether a relationship is strategically important, the

To promote effective communication with shareholders and encourage effective participation at

The cost of equitysettled transactions is recognised, together with a corresponding increase in

A geographical segment is a distinguishable component of the entity that is engaged in providing

Theweightedaveragefairvalueofsharesgranted during theyearunderthe DESPwas16.0cents

Amounts received or due and receivable by Ernst &

Independent audit report to members of Integrated Legal Holdings

Directors Responsibility for the Financial Report

Liability limited by a scheme approved

complying with Australian Accounting Standards (including the Australian Accounting

Report on the Remuneration Report

Ernst & Young

You might also like