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INTEGRATEDLEGALHOLDINGSLIMITED

ACN120394194
(ASX:IAW)

FinancialReport
Fortheyearended30June2010

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

ContentstoFinancialReport

CorporateInformation.............................................................................................................1
DirectorsReport......................................................................................................................2
AuditorsIndependenceDeclaration.....................................................................................22
CorporateGovernanceStatement.........................................................................................23
ConsolidatedStatementofFinancialPosition.......................................................................32
ConsolidatedStatementofComprehensiveIncome.............................................................33
ConsolidatedStatementofCashFlows.................................................................................34
ConsolidatedStatementofChangesinEquity.......................................................................35
NotestotheFinancialStatements.........................................................................................36
DirectorsDeclaration............................................................................................................93
IndependentAuditReport.....................................................................................................94
ASXAdditionalInformation...................................................................................................96

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateInformation

ABN20120394194

Directors
TheHonJohnDawkins,Chairman
AnneTregonning,NonexecutiveDirector
GraemeFowler,ManagingDirector/ChiefExecutive

CompanySecretary
JeanMarieRudd

Registeredoffice
Level8,WesfarmersHouse
40TheEsplanade
PerthWA6000

Principalplaceofbusiness
HeadOffice
Level22
1MarketStreet
SydneyNSW2000
Tel:(02)82636600

ShareRegister
ComputershareInvestorServicesPtyLimited
Level2
45StGeorgesTerrace
PerthWA6000
Tel:(08)93232000

IntegratedLegalHoldingsLimitedsharesarelistedontheAustralianStockExchange.

Solicitors
TalbotOlivier

ArgyleLawyers
Level8,WesfarmersHouse

Level22
40TheEsplanade

1MarketStreet
PerthWA6000

SydneyNSW2000

Bankers
NationalAustraliaBankLimited
50StGeorgesTerrace
PerthWA6000

Auditor
Ernst&Young
11MountsBayRoad
PerthWA6000

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport

Yourdirectorssubmittheirreportfortheyearended30June2010.

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 Archer Exploration Ltd, TVET Australia Ltd and
Sovereign Gold Ltd and Director of M&C Saatchi Direct Pty Ltd. For over 10 years, until 2005, he
served on the board of Sealcorp Holdings, now Asgard Wealth Solutions, and he is a former
chairmanofEldersRuralBankanddirectorofRetailEnergyMarketCompanyLtd.

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:

MGMWirelessLtdappointed17August2009*
GeneticTechnologiesLtdappointed24November2004;resigned19November2009

*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.

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

GraemeFowler,B.Bus,CPA,GAICD(ManagingDirector/ChiefExecutive)
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,
and Chief Executive Officer of BT Portfolio Services (including BT Wrap) and has recently been
appointedaNonExecutiveDirectorofCountplusPtyLtd.

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

2,910,282
406,251
4,810,559

COMPANYSECRETARY
JeanMarieRudd,B.Com,CA
Appointed:28August2009

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 19 years experience in CFO/Company Secretary roles including senior
managementroleswiththeHeytesburyGroupandThinkSmartLimited.

MrsRuddisagraduateofCurtinUniversity,Perth,andaCharteredAccountant.

DIVIDENDS
On12August2010,thedirectorsdeclaredafullyfrankedfinaldividendof0.50centsperordinary
sharewitharecorddateof15October2010.

PRINCIPALACTIVITIES
TheprincipalactivityoftheentitiesoftheconsolidatedGroupwastheprovisionoflegalservicesand
onlinelegaldocumentservicesinAustralia.

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

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
Consolidated operating revenues of $23,874,988 were 41% higher than the previous year which
reported $16,946,221 operating revenues. Revenue from ordinary activities increased due to a
combinationoforganicgrowthandthefullyeareffectofnewmemberfirmacquisitions.

Fortheyearended30June2010,theconsolidatedentitygeneratedanetprofitaftertaxof$853,494
comparedtotheyearended30June2009of$593,875,anincreaseof44%.

Earningspersharefortheyearwere1.18centspershare,comparedto0.89centspershareforthe
yearended30June2009,anincreaseof33%.

TheDirectorsadvisethattheyarepleasedwiththefullyearresultsandwiththecontinuedstrategic
and operational progress that has been made during the period towards developing a robust
business model and in positioning the Group for future growth. Further, the results were an
improvedpositionontheyearended 30June2009,theCompanyhaving commenceditsrecovery
fromtheeffectsoftheGlobalFinancialCrisis(GFC).

AfullcommentaryontheresultsforthereportingperiodiscontainedintheASXreleasedated12
August2010.

ShareholderReturns
TheCompanysreturntoshareholdersisasfollows:

2010
2009
Basicanddilutedprofitpershare(cents)
1.18
0.89

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

ReviewofFinancialCondition

LiquidityandCapitalResources
The statement of cash flows illustrates that there was an increase in cash flow from operating
activities.Operatingactivitiesresultedinanetcashinflowof$1,448,161(2009:$1,652,745outflow).

Cash flows used for investing activities amounted to $802,129 (2009: $3,909,689) which related
entirelytothenetacquisitionofplantandequipmentduringtheyear(2009:$178,286).

Totalcashinflowsweresupplementedby$766,027(2009:$476,372)receivedtofinanceequipment
acquisitions and annual professional indemnity insurance premiums and $227,000 (2009:
$1,723,000) additional draw down of bank floating bill facilities early in the financial year. These
floatingbillloanswerereducedby$1,000,000inthesecondhalfofthefinancialyear.

Finally, there was a cash outflow of $131,122 (2009: $1,411,065) for the payment of the 2010
interimdividendandnetreceiptsof$1,559,452fromthecapitalraisinginApril/May2010.

ThenettangibleassetbackingoftheGroupwas6.54centspershare(2009:4.89cents)anincrease
of34%.

Assetandcapitalstructure

Netassets
Less:Cashandcashequivalentsnetofoverdrafts
Totalcapitalemployed

CONSOLIDATED
2010
2009
$
$
16,197,914
(1,948,949)
14,248,965

13,862,406
(465,875)
13,396,531

The level of gearing in the Company is within acceptable limits set by the directors given the
implicationsofthebusinessacquisitionsandpaymentoftaxliabilitiesduringtheyear.

Shareissuesduringtheyear
TheCompanyhasissued17,138,488shares(2009:5,807,858shares)duringtheyear:

40,000sharestoemployeesundertheDeferredEmployeesSharePlan(July2009);
353,488sharestoshareholdersunderthedividendreinvestmentplanforthe2010interim
dividend(April2010);
11,100,000sharestoinvestorsunderTranche1and2oftheSharePlacement(AprilandMay
2010);and
5,645,000sharestoshareholdersundertheSharePlacementPlan(April2010).

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

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.

SIGNIFICANTCHANGESINTHESTATEOFAFFAIRS
Therewerenosignificantchangesinthestateofaffairsduringtheyearended30June2010.

SIGNIFICANTEVENTSAFTERTHEREPORTINGDATE
Afullyfrankedfinaldividendof0.50centspersharewasdeclaredon12August2010witharecord
dateof15October2010andapaymentdateof5November2010.

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.

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

DIRECTORSMEETINGS
Thenumberofmeetingsofdirectors(includingmeetingsofcommitteesofdirectors)heldduringthe
yearandthenumberofmeetingsattendedbyeachdirectorwasasfollows:

DirectorsMeetings
AuditCommitteeMeetings

JDawkins
ATregonning
GFowler

Eligibleto
attend
11
11
11

Attended
11
11
11

Eligibleto
attend
6
6
6

Attended
4
6
6

Committeemembership
Asatthedateofthisreport,theCompanyhadanAuditCommitteeoftheBoardofDirectors.

The Audit Committee comprises all members of the Board of Directors and is chaired by Ms
Tregonning.

AUDITORINDEPENDENCEANDNONAUDITSERVICES
AcopyoftheauditorsindependencedeclarationreceivedbytheDirectorsinrelationtotheaudit
fortheyearisprovidedwiththisreportonpage22.

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
2010
2009
$
$
31,453
18,813
5,500
7,737
36,953
26,550

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)

Thisremunerationreportfortheyearended30June2010outlinestheremunerationarrangements
oftheCompanyandtheGroupinaccordancewiththerequirementsoftheCorporationsAct2001
anditsRegulations.Theinformationhasbeenauditedasrequiredbysection308(3C)oftheAct.

The remuneration report details the remuneration arrangements for key management personnel
(KMP) of the Group who are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the Company and the Group, directly or
indirectly, including any director (whether executive or otherwise) of the parent company, and
includesthefiveexecutivesintheParentandtheGroupreceivingthehighestremuneration.

For the purposes of this report, the term executive encompasses the Chief Executive, senior
executivesandthesecretaryoftheParentandtheGroup.

Theremunerationreportispresentedunderthefollowingsections:

1. Individualkeymanagementpersonneldisclosures
2. Boardoversightofremuneration
3. Nonexecutivedirectorremunerationarrangements
4. Executiveremunerationarrangements
5. Companyperformanceandthelinktoremuneration
6. Executivecontractualarrangements
7. Equityinstrumentsdisclosures

1. Individualkeymanagementpersonneldisclosures
DetailsofKMPincludingthetopfiveremuneratedexecutivesoftheParentandtheGroupareset
outbelow:

i) Directors
JDawkins
ATregonning
GFowler

ii) Executives
BTaylor
PBobbin
MDouglass
AIreland
BDavies
JMRudd

Chairman(nonexecutive)
NonExecutiveDirector
ManagingDirector/ChiefExecutive

ManagingPrincipal,TalbotOlivier
ManagingPrincipal,ArgyleLawyers
Principal,ArgyleLawyers
Principal,ArgyleLawyers
ManagingPrincipal,BrettDaviesLawyers
ChiefFinancialOfficer/CompanySecretary

TherewerenochangestoKMPafterthereportingdateandbeforethedatethefinancialreportwas
authorisedforissue.

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

2. Boardoversightofremuneration

Remunerationassessmentandapprovalprocess
TheBoardofDirectorsoftheCompanyisresponsiblefordeterminingandreviewingremuneration
arrangementsfortheBoardandexecutives.

TheBoardwillassesstheappropriatenessofthenatureandamountofremunerationofexecutives
on a periodic basis by reference to relevant employment market conditions, with the overall
objectiveofensuringmaximumstakeholderbenefitfromtheretentionofahighperformingdirector
andexecutiveteam.

Remunerationstrategy
The performance of the Company depends upon the quality of its directors and executives. To
prosper,theCompanymustattract,motivateandretainhighlyskilleddirectorsandexecutives(refer
GroupPerformanceonpage15).

Tothisend,theCompanyembodiesthefollowingprinciplesinitsremunerationframework:

Providecompetitiverewardstoattracthighcalibreexecutives;
Linkexecutiverewardtoshareholdervalue;
Haveaportionofexecutiveremunerationatrisk;and
Establishappropriate,demandingperformancehurdlesforvariableexecutiveremuneration.

Remunerationstructure
Inaccordancewithbestpracticecorporategovernance,thestructureofnonexecutivedirectorand
executiveremunerationisseparateanddistinct.

3. Nonexecutivedirectorremunerationarrangements

Remunerationpolicy
TheBoardseekstosetaggregateremunerationatalevelthatprovidestheCompanywiththeability
to attract and retain directors of the highest calibre, whilst incurring a cost that is acceptable to
shareholders.

The amount of aggregate remuneration sought to be approved by shareholders and the fee
structure is reviewed annually against fees paid to nonexecutive directors (NEDs) of comparable
companies. The Board may also consider advice from external consultants when undertaking the
annualreviewprocess.

TheGroupsConstitutionandtheASXListingRulesspecifythattheaggregateremunerationofNEDs
shallbedeterminedfromtimetotimebyageneralmeeting.Thecurrentaggregateremuneration
level for nonexecutive directors, as approved by shareholders, is $250,000 (2009: $250,000) per
annum.

TheBoardwillnotseekanyincreasefortheNEDpoolatthe2010AGM.

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

Structure
The remuneration of NEDs consists of directors fees and committee fees. NEDs do not receive
retirementbenefits,nordotheyparticipateinanyincentiveprograms.

EachNEDreceivesabasefeeof$45,000forbeingbothaDirectoroftheCompanyandmemberof
theAuditCommittee.Anadditionalfeeof$45,000isalsopaidiftheDirectoristheChairmanofthe
Boardand$18,000iftheDirectorisachairmanoftheAuditCommittee.

TheremunerationofNEDsforthefinancialyearisdetailedintable1onpage19ofthisreport.

4. Executiveremunerationarrangements

Remunerationlevelsandmix
TheGroupaimstorewardexecutiveswithalevelandmixofremunerationcommensuratewiththeir
positionandresponsibilitieswithintheGroupsoasto:

RewardexecutivesforGroup,subsidiaryandindividualperformanceagainst targetssetby
referencetoappropriatebenchmarks;
Aligntheinterestsofexecutiveswiththoseofshareholders;and
Ensuretotalremunerationiscompetitivebymarketstandards.

Structure
In determining the level and makeup of executive remuneration, the Board engages external
consultantsasneededtoprovideindependentadvice.

The Board has entered into a detailed contract of employment with the Managing Director/Chief
Executiveandotherexecutives.Detailsofthesecontractsareprovidedbelow.

Remunerationmayconsistofthefollowingkeyelements:

Fixedremuneration(basesalaryandsuperannuation)
Variableremuneration:
o Shorttermincentives(STI)
o Long term incentives (LTI) in the form of cash payments or share based payments
(equitysettled)

Fixedremuneration

Objective
FixedremunerationisreviewedannuallybytheBoard.TheprocessconsistsofareviewofCompany,
subsidiaryandindividualperformance,relevantcomparativeremunerationexternallyandinternally
and, where appropriate, external advice on policies and practices. As noted above, the Board has
accesstoexternaladviceindependentofmanagement.

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INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

Structure
Executives are given the opportunity to receive their fixed (primary) remuneration in a variety of
formsincludingcashandfringebenefitssuchasparking.Itisintendedthatthemannerofpayment
chosenwillbeoptimalfortherecipientwithoutcreatingunduecostfortheGroup.

Thefixedremunerationcomponentofexecutivesisdetailedintable1onpage19.

Variableremunerationshorttermincentives(STI)

Objective
TheobjectiveoftheSTIprogramistolinktheachievementoftheGroupsoperationaltargetswith
the remuneration received by the executives charged with meeting those targets. The total
potentialSTIavailableissetatalevelsoastoprovidesufficientincentivetotheexecutivetoachieve
theoperationaltargetsandsuchthatthecosttotheGroupisreasonableinthecircumstances.

Structure

ManagingDirector/ChiefExecutive
The Managing Director/Chief Executive is entitled to a maximum performance bonus of $160,000
(payableincash),subjecttotheachievementofspecificperformancetargetsfortheperiodfrom28
April2009to30June2010(26months).Ifachievementofperformancetargetsisnotsuccessfulby
that date, a lesser amount may be payable at the discretion of the Board, taking into account the
individualcircumstancescontributingtothenonachievementofthosetargets.

Performancetargetsareachievedwhen:

Accumulatedrevenueforthegroupis$40morgreater;and
Earningspersharegrowthof15%orgreaterabovetheforecastearningspershareforthe
2008financialyear.

ThesetargetsaremeasuredusingfinancialreportinginformationandreviewedbytheBoard.

Thetermsandconditionspertainingtothebonusareasfollows:

Both performance targets must be achieved at the same time for satisfaction of
performancecriteria,unlessdeterminedotherwisebytheBoard.
The bonus will vest upon achievement of targets on or before 30 June 2010 (providing
targetsachieved).
Anewbonusstructurewillbenegotiatedfromthetimeofpaymentofthisbonus.
Bonustobepaidincashand/orsharesatthediscretionoftheBoard.
Bonus payable within 30 days of satisfaction of performance criteria, as confirmed by the
Board.

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DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

MemberFirmPrincipals
Actual STI payments are granted to subsidiary member firms dependent 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.

TheSTIpaymentforasubsidiaryisthenallocatedbetweenPrincipalsofthatsubsidiarybasedonpre
determinedkeyperformanceindicators,includingfeeincomeattributabletoeachPrincipal.

STIpaymentsmaybeprepaidasacashbonus,uptoamaximumof40%oftheaccruedbonus,at
quarterly intervals during the financial year subject to satisfaction of member firm KPI targets.
Accruedbonusesthatremainunpaidatyearendaredeliveredasacashbonuswithin10daysafter
thereleaseoftheauditedfinancialstatementseachfinancialyear.

ChiefFinancialOfficer
The Chief Financial Officer is entitled to a maximum performance bonus of $10,000 (assessed and
payableinsixmonthlyinstalments),subjecttotheachievementofspecificperformancetargetsfor
the 12 months ended 31 August 2010. If achievement of performance targets is not successful, a
lesseramountmaybe payableatthediscretionoftheManagingDirector,takingintoaccountthe
individualcircumstancescontributingtononachievementofthosetargets.

Performance targets are achieved upon satisfaction of key deliverables involving the realisation of
budgetednetprofitaftertaxandoperatingcashflowsforthe2010financialyear.

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.

STIawardsfor2010

ManagingDirector/ChiefExecutive
AfterconsiderationofperformanceagainstKPIs,theBoarddeterminedthattheamounttobepaid
totheManagingDirector/ChiefExecutivewouldbe$64,000,with60%ofSTIawardsbeingforfeited
duetoperformanceconditionsnotfullymet.Paymentwasaccruedat30June2010andpaidincash
duringAugust2010.

TherewerenoalterationstotheManagingDirectorsSTIbonusplanduringtheyear.

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DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

MemberFirmPrincipals
TheManagingDirectorassessestheSTIbonuspaymentsforasubsidiaryforsubsequentallocation
between Principals of that subsidiary based on pre determined key performance indicators,
including fee income attributable to each Principal, which is measured using financial reporting
information.

ThemaximumSTIcashbonusiscalculatedasapercentageofanamountbywhichprofitabilityofa
subsidiaryexceedsapredeterminedprofithurdleforthatsubsidiary.TheminimumSTIcashbonus
payableisnil.

Duringthe2010financialyear,thebonusachievedandvestedforMrTaylor,ManagingPrincipalof
TalbotOlivierwas$44,103(2009:nil),forMrDavies,ManagingPrincipalofBrettDaviesLawyerswas
nil(2009:nil),forMrBobbin,ManagingPrincipalofArgyleLawyerswas$300,000(2009:$17,006),
for Mr Douglass, Principal of Argyle Lawyers was $400,000 (2009: $17,006) and for Mr Ireland,
PrincipalofArgyleLawyerswas$50,000(2009:$17,006).

The bonuses achieved and vested during 2010 will be paid within 10 days after the release of the
2010AnnualReport.

TherehavebeennoalterationstotheSTIbonusplanduringtheyear.

ChiefFinancialOfficer
The Managing Director will approve the STI bonus payments for the 12 months ended 31 August
2010.ThemaximumSTIcashbonusis$10,000andtheminimumisnil.Asat30June2010,thishad
notyetbeenassessedandassuch,theawardhadnotyetvested.

$5,400(2009:$nil)ofSTIawardsinrespectofthesixmonthperiodended31August2009vested
duringthe2010financialyearwith10%forfeitedduetoperformanceconditionsnotbeingfullymet.
This was paid in October 2009. The maximum STI cash bonus achievable was $6,000 and the
minimumwasnil.

No STI awards (2009: $4,000) in respect of the six month period ended 28 February 2010 vested
during the 2010 financial year with 100% forfeited due to performance conditions not being fully
met.ThemaximumSTIcashbonusachievablewas$5,000andtheminimumwasnil.

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DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

Variableremunerationlongtermincentives(LTI)

ChiefFinancialOfficer
TheLTIbenefitsaredeliveredonadiscretionarybasisbytheBoardintheformofordinarysharesin
theCompanyundertheDeferredEmployeesSharePlan.Suchgrantsareonlymadetoexecutives
who are able to influence the generation of shareholder wealth and thus have an impact on the
Groupsperformanceagainsttherelevantlongtermperformancehurdle.

40,000sharesweregrantedtotheChiefFinancialOfficeron1July2009withafairvalueof$0.145
per share on grant date and a total fair value of $5,800. The shares will vest in stages during the
threeyearperiodfromissuedate,ended30June2012,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.
Performancecriteriaattachedtothesharesareasfollows:

100%ofshareswillvestifcumulativegrowthintheCompanysearningspershareoverthe
threeyearsended30June2012is45%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.

At30June2010,nosharesundertheLTIplanhavevested(2009:nil)orwereforfeited(2009:nil).

Executivesharetradingpolicy
TheCompanyhasinplaceasharetradingpolicywhichimposestradingrestrictionsonofficersand
employeesoftheCompanyanditsrelatedentitiesthatareconsideredtobeinpossessionofinside
information.

Executives and Directors are prohibited from using derivatives or hedge instruments or otherwise
enteringintotransactions(includingmarginloans)thatoperateorareintendedtooperatetolimit
theeconomicriskofsecurityholdingsovervestedorunvestedsharesintheCompanywithoutthe
writtenpermissionofthe Board.Thisismonitored bytheCompanySecretaryonamonthlybasis
through review of statements from ComputerShare Investor Services Pty Limited. Furthermore,
executivesandDirectorsarerequiredtodeclaretheirintentiontotradeinsharestotheCompany
Secretary,whichisthenpresentedtotheBoard.

14

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

5. Companyperformanceandthelinktoremuneration
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)

EPS(cents)

Jun2007 Jun2008
(65.50)

2.66

Jun2009

Jun2010

0.89

1.18

Fortheperiodfromincorporationon26June2006to30June2007

The2007EPSresultof65.50wasaffectedbythevaluationofsharesissuedtofoundationpartners
and supporters at a deemed value of 50 cents per share prior to listing of the Company and
acquisitionoflegalpractices.

The EPS improved in the 2008 financial year after listing in August 2007 and the subsequent
acquisitionoffourlegalpracticesandaninformationtechnologybusiness.

Inthe2009financialyearanumberoffactorsinfluencedthereductionofEPS.Corporateexpenses
increased with the full year effect of the costs of a Managing Director and Chief Financial
Officer/Company Secretary, the foundation member firms required additional investment to take
advantage of the growth opportunities available to them, the prevailing economic conditions
negativelyaffectedrevenues,andthedecisiontowriteoffanumberofageddebtorbalanceswhich
hadbecomeunrecoverableasaresultoftheeconomicenvironment.

The increase in EPS during the 2010 financial year represents the full year effect of prior year
businessacquisitionsandnormalisedtradingactivitiesacrosstheGroupandintheCorporateoffice.

The directors believe that the business model remains strong and the company is on target to
achieveitsobjectives.

15

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

6. Executivecontractualarrangements

ManagingDirector/ChiefExecutive
ThereisanemploymentcontractinplacebetweenMrFowlerandIntegratedLegalHoldingsLimited
forMrFowlersappointmentasManagingDirector/ChiefExecutiveoftheCompany.Thecontract
commenced on 28 April 2008 and continues indefinitely unless terminated according to the
provisionsofthecontract.

Mr Fowler receives fixed remuneration of $272,500 (2009: $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.

MemberFirmPrincipals

BDaviesManagingPrincipal,BrettDaviesLawyers
MrDavieswasemployedunderatwoyearfixedtermcontract,whichexpiredon12August2009.At
expiry of the original contract, an extension was agreed to 30 June 2010 at which point a new
employmentcontractwasnegotiated.

Mr Davies is paid a salary of $200,000 per annum (inclusive of superannuation), from 1 January
2010, and potentially a bonus paid as an additional salary (the bonus payment is calculated at a
percentage of the amount by which the audited net profit before tax of the Principals law firm
exceedsapredeterminedprofithurdle).

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
wilful misconduct. Either party may also terminate the employment contract by giving 28 days
notice.

Mr Davies is also subject to strict confidentiality obligations regarding clients of the legal practice,
andisalsosubjecttosolicitationrestraintsforaperiodofuptotwoyearsaftertermination.

16

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

BTaylorManagingPrincipal,TalbotOlivier
Mr Taylor is employed under a four year fixed term contract and continuing thereafter until
terminatedbyeitherpartywithsixmonthsnoticeinwritingoftermination(noticemaynotbegiven
before1January2013,beingsixmonthspriortothecompletionoftheinitialfouryearterm).

Mr Taylor is paid a salary of $400,000 per annum (inclusive of superannuation) and potentially a
bonuspaidasanadditionalsalary(thebonuspaymentiscalculatedasashareoftheTalbotOlivier
bonus pool, being a percentage of the amount by which the audited net profit before tax of the
Principalslawfirmexceedsapredeterminedprofithurdle).

The employment contract may 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.MrTaylorisalsosubjecttostrictconfidentialityobligationsandsolicitationand
competitionrestraintsforaperiodof12monthsfollowingtermination.

PBobbinManagingPrincipal,ArgyleLawyers
AIrelandandMDouglassPrincipals,ArgyleLawyers
Messrs Bobbin, Ireland and Douglass are employed under a four year fixed term contracts 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 for Messrs Bobbin and Ireland and
before13December2012forMrDouglass,beingthreemonthspriortothecompletionoftheinitial
fouryearterm).

Messrs Bobbin, Ireland and Douglass are paid a salary of $410,000 per annum (inclusive of
superannuation) and potentially a bonus paid as an additional salary (the bonus payment is
calculatedatashareoftheArgyleLawyersbonuspool,beingapercentageoftheamountbywhich
theauditednetprofitbeforetaxofthePrincipalslawfirmexceedsapredeterminedprofithurdle).

The employment contracts may be terminated without notice if the employees commit a serious
breachofanyprovisionoftheircontract,areunabletoorareprohibitedfromholdingalicenseto
practicelaw,commitsanyactthatamountstorepudiationofthecontractorengagesinseriousand
wilful misconduct. Messrs Bobbin, Ireland and Douglass are also subject to strict confidentiality
obligations and solicitation and competition restraints for a period of 12 months following
termination.

17

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

ChiefFinancialOfficer/CompanySecretary
The Chief Financial Officer/Company Secretary has a standard contract. Mrs Rudd receives fixed
remunerationof$160,000(2009:$160,000)perannum(inclusiveofsuperannuation).

TheCompanymayterminatetheemploymentagreementbyprovidingonemonthwrittennoticeor
providingpaymentinlieuofthenoticeperiod(basedonthefixedcomponentofremuneration).The
Companymayterminatethecontractatanytimewithoutnoticeifseriousmisconducthasoccurred.
Whereterminationwithcauseoccurs,theexecutiveisonlyentitledtothatportionofremuneration
thatisfixed,andonlyuptothedateoftermination.

MrsRuddscontractcontainsstandardobligationstoperformthedutiesofanemployeewhichone
wouldexpecttofindinastandardemploymentcontract.

7. Equityinstrumentsdisclosures

Unissuedshares
TheCompanyhasnotissuedanyoptionsduringtheyear.

18

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

Remunerationofkeymanagementpersonnel(KMP)andthefivehighestpaidexecutivesoftheCompanyandtheGroup
Table1:Remunerationfortheyearended30June2010

Salary&
Fees
$

Nonexecutivedirectors
JDawkinsChairman
ATregonning
Subtotalnonexecutivedirectors

Executivedirectors
GFowlerManagingDirector/Chief
Executive
Subtotalexecutivedirectors

Otherkeymanagementpersonnel
BTaylorManagingPrincipal,Talbot
Olivier(1)
PBobbinManagingPrincipal,Argyle
Lawyers(1)
MDouglassPrincipal,ArgyleLawyers(1)(2)
AIrelandPrincipal,ArgyleLawyers(1)(2)
BDaviesManagingPrincipal,BrettDavies
Lawyers
JMRuddChiefFinancialOfficer/Company
Secretary
SubtotalotherKMP
Total

Shortterm
Cash
Nonmonetary
Bonus
benefits
$

Other

Post
Employment
Super
annuation

67,000
42,376
109,376

30,000
24,999
54,999

270,833

64,000

24,375

270,833

64,000

385,539

44,103

360,000

300,000

370,000
360,000
129,969

Longterm
LongService
Other
(3)
benefits
Benefits
$
$

Sharebased
Payment
Shares

Total

Performance
related

97,000
67,375
164,375

467,702

0.0%
0.0%

13.7%

9.8%

1,372

107,122

24,375

1,372

107,122

14,461

5,353

467,702

449,456

49,999

665

710,664

42.2%

400,000
50,000

49,999
49,999
11,697

640
665

825,127
460,664
141,686

48.5%
10.9%
0.0%

157,030

5,400

14,312

858

4,685

182,285

3.0%

1,767,026
2,147,235

799,503
863,503

190,467
269,841

8,181
9,553

107,122

4,685
4,685

2,769,862
3,401,939

(1)Cashbonusesof$841,440accruedasat30June2010werepaidinthe2011financialyear.
(2)MrDouglassandMrIrelandbecameGroupexecutivesfrom1July2009.
(3)RelatestotheinterestfreecomponentofloanstoKMP(note27(c)).

19

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

REMUNERATIONREPORT(audited)(continued)

Remunerationofkeymanagementpersonnel(KMP)andthethreehighestpaidexecutivesoftheCompanyandtheGroup(1)
Table2:Remunerationfortheperiodended30June2009
Post
Employment

Shortterm

Nonexecutivedirectors
JDawkinsChairman
ATregonning
Subtotalnonexecutivedirectors

Executivedirectors
GFowlerManagingDirector/Chief
Executive
Subtotalexecutivedirectors

Otherkeymanagementpersonnel
BTaylorManagingPrincipal,Talbot
Olivier
PBobbinManagingPrincipal,Argyle
Lawyers(2)(3)
BDaviesManagingPrincipal,Brett
DaviesLawyers
JMRuddChiefFinancial
Officer/CompanySecretary
SubtotalotherKMP
Total

Salary&Fees

CashBonus

Non
monetary
benefits

Sharebased
Payment

Longterm

Other

Super
annuation

LongService
benefits

Other
(4)
Benefits
$

Shares

Total

Performance
related

0.0%
0.0%

0.0%

52,667
1,459
54,126

30,000
50,207
80,207

82,667
51,666
134,333

250,000

22,500

370

50,408

323,278

250,000

22,500

370

50,408

323,278

149,083

14,776

290

179,242

8.4%

216,127

17,006

50,540

357

284,030

0.0%

91,743

8,257

308

100,308

0.0%

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)AllexecutivesoftheGroupandCompanyhavebeendisclosed.
(2)MrBobbinwasappointedasManagingPrincipalofArgyleLawyerson1November2008.
(3)Cashbonusesaccruedat30June2009werepaidtoMrBobbininthe2010financialyear.
(4)RelatestotheinterestfreecomponentofloanstoKMP(note27(c)).

20

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsReport(continued)

Signedinaccordancewitharesolutionofthedirectors.

GFowler
ManagingDirector

Sydney,27September2010

21

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 2010, 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
27 September 2010

Liability limited by a scheme approved


under Professional Standards Legislation
GHM:NR:ILH:050

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateGovernanceStatement

The Board of Directors of Integrated Legal Holdings Limited is responsible for the corporate
governanceoftheGrouphavingregardtotheASXCorporateGovernanceCouncil(CGC)published
guidelinesaswellasitscorporategovernanceprincipalsandrecommendations.TheBoardguides
and monitors the business and affairs of Integrated Legal Holdings Limited on behalf of the
shareholdersbywhomtheyareelectedandtowhotheyareaccountable.

ThetablebelowsummarisestheCompanyscompliancewiththeCGCsrecommendations:

Recommendation

Principal1Laysolidfoundationsformanagementandoversight

Comply
Yes/No

ASXListing
Reference/
Rule/CGC
explanation recommendations

1.1

Companiesshouldestablishthefunctionsreservedtothe
Boardandthosedelegatedtoseniorexecutivesanddisclose
thosefunctions.

Yes

ASXCGC1.1

1.2

Companiesshoulddisclosetheprocessforevaluatingthe
performanceofseniorexecutives.

Yes

ASXCGC1.2

1.3

Companiesshouldprovidetheinformationindicatedinthe
guidetoreportingonPrincipal1.

Yes

ASXCGC1.3

Principal2StructuretheBoardtoaddvalue
2.1

AmajorityoftheBoardshouldbeindependentDirectors.

Yes

(a)

ASXCGC2.1

2.2

ThechairshouldbeanindependentDirector.

Yes

(a)

ASXCGC2.2

2.3

Therolesofchairandchiefexecutiveofficer(CEO)shouldnot
beexercisedbythesameindividual.

Yes

ASXCGC2.3

2.4

TheBoardshouldestablishanominationcommittee.

No

(b)

ASXCGC2.4

2.5

Companiesshoulddisclosetheprocessforevaluatingthe
performanceoftheBoard,itscommitteesandindividual
Directors.

Yes

ASXCGC2.5

2.6

Companiesshouldprovidetheinformationindicatedinthe
guidetoreportingonPrincipal2.

Yes

ASXCGC2.6

Principal3Promoteethicalandresponsibledecisionmaking
3.1

Companiesshouldestablishacodeofconductanddisclose
thecodeorasummaryofthecodeasto:

Thepracticesnecessarytomaintainconfidencein
theCompanysintegrity.

Thepracticesnecessarytotakeintoaccounttheir
legalobligationsandthereasonableexpectationsof
theirstakeholders.

Theresponsibilityandaccountabilityofindividuals
forreportingandinvestigatingreportsofunethical
practices.

Yes

ASXCGC3.1

3.2

Companiesshouldestablishapolicyconcerningtradingin
CompanysecuritiesbyDirectors,seniorexecutivesand
employees,anddisclosethepolicyorasummaryofthat
policy.

Yes

ASXCGC3.2

3.3

Companiesshouldprovidetheinformationindicatedinthe
guidetoreportingonPrincipal3.

Yes

ASXCGC3.3

23

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateGovernanceStatement(continued)

Recommendation

Principal4Safeguardintegrityinfinancialreporting

Comply
Yes/No

ASXListing
Reference/
Rule/CGC
explanation recommendations

4.1

TheBoardshouldestablishanauditcommittee.

Yes

ASXCGC4.1

4.2

Theauditcommitteeshouldbestructuredsothatit:

ConsistsonlyofnonexecutiveDirectors

ConsistsofamajorityofindependentDirectors

Ischairedbyanindependentchair,whoisnotchair
oftheBoard

Hasatleastthreemembers

No

(c)

ASXCGC4.2
ASXLR12.7

4.3

Theauditcommitteeshouldhaveaformalcharter.

Yes

ASXCGC4.3

4.4

Companiesshouldprovidetheinformationindicatedinthe
guidetoreportingonPrincipal4.

Yes

ASXCGC4.4

Principal5Maketimelyandbalanceddisclosure
5.1

Companiesshouldestablishwrittenpoliciesdesignedto
ensurecompliancewithASXListingRuledisclosure
requirementsandtoensureaccountabilityatasenior
executivelevelforthatcomplianceanddisclosethose
policiesorasummaryofthosepolicies.

Yes

ASXCGC5.1

5.2

Companiesshouldprovidetheinformationindicatedinthe
guidetoreportingonPrincipal5.

Yes

ASXCGC5.2

Principal6Respecttherightsofshareholders
6.1

Companiesshoulddesignacommunicationspolicyfor
promotingeffectivecommunicationwithshareholdersand
encouragingtheirparticipationatgeneralmeetingsand
disclosetheirpolicyorasummaryofthatpolicy.

Yes

ASXCGC6.1

6.2

Companiesshouldprovidetheinformationindicatedinthe
guidetoreportingonPrincipal6.

Yes

ASXCGC6.2

Principal7Recogniseandmanagerisk
7.1

Companiesshouldestablishpoliciesfortheoversightand
managementofmaterialbusinessrisksanddisclosea
summaryofthosepolicies.

Yes

ASXCGC7.1

7.2

TheBoardshouldrequiremanagementtodesignand
implementtheriskmanagementandinternalcontrolsystem
tomanagetheCompanysmaterialbusinessrisksandreport
toitonwhetherthoserisksarebeingmanagedeffectively.
TheBoardshoulddisclosethatmanagementhasreportedto
itastotheeffectivenessoftheCompanysmanagementof
thismaterialbusinessrisks.

Yes

ASXCGC7.2

7.3

TheBoardshoulddisclosewhetherithasreceivedassurance
fromtheCEO(orequivalent)andthechieffinancialofficer
(CFO)[orequivalent]thatthedeclarationprovidedin
accordancewithsection295AoftheCorporationsActis
foundedonasoundsystemofriskmanagementandinternal
controlandthatthesystemisoperatingeffectivelyinall
materialrespectsinrelationtofinancialreportingrisks.

Companiesshouldprovidetheinformationindicatedinthe
guidetoreportingonPrincipal7.

Yes

ASXCGC7.3

Yes

ASXCGC7.4

7.4

24

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateGovernanceStatement(continued)

Recommendation

Principal8Remuneratefairlyandresponsibly

Comply
Yes/No

ASXListing
Reference/
Rule/CGC
explanation recommendations

8.1

TheBoardshouldestablisharemunerationcommittee.

No

(d)

ASXCGC8.1

8.2

Companiesshouldclearlydistinguishthestructureofnon
executiveDirectorsremunerationfromthatofexecutive
Directorsandseniorexecutives.

Yes

ASXCGC8.2

8.3

Companiesshouldprovidetheinformationindicatedinthe
guidetoreportingonPrincipal8.

Yes

ASXCGC8.3

Integrated Legal Holdings Limiteds corporate governance practices were in place throughout the
yearended30June2010.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.

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/Chief Executive. Inclusion of the Managing Director/Chief Executive is required to
satisfytherecommendationthatthecommitteemustconsistofatleastthreemembers.

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

25

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateGovernanceStatement(continued)

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
Managing Director/Chief Executive and the executive management team. The Board ensures that
this team is appropriately qualified and experienced to discharge their responsibilities and has in
place procedures to assess the performance of the Managing Director/Chief Executive and the
executivemanagementteam.

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.

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.

26

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateGovernanceStatement(continued)

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.

There are procedures in place, agreed by the Board, to enable Directors in furtherance of their
dutiestoseekindependentprofessionaladviceattheCompanysexpense.

TheterminofficeheldbyeachDirectorinofficeatthedateofthisreportisasfollows:

Name
TerminOffice
JDawkins
3years,11months
ATregonning
3years,11months
GFowler
2years,4months

ForadditionaldetailsregardingBoardappointments,pleaserefertoourwebsite:

www.ilh.com.au

Performance
TheperformanceoftheBoardandkeyexecutivesisreviewedregularlyagainstbothmeasurableand
qualitativeindicators.

TheperformancecriteriaagainstwhichDirectorsandexecutivesareassessedarealignedwiththe
financialandnonfinancialobjectivesofIntegratedLegalHoldingsLimited.

Directorswhoseperformanceisconsistentlyunsatisfactorymaybeaskedtoretire.

27

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateGovernanceStatement(continued)

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).

RestrictedPersonsareprohibitedfromtradingintheCompanyssecuritieswithintwomonthsofa
halfyear or full year result announcement, being the end of February and the end of August,
respectively.

RestrictedPersonsarepermittedtobuyorsellCompanyshares:
betweentwoand30daysfollowingthereleaseoftheCompanyshalfyearfinancialresults;
and
fromtwodaysafterthereleaseoftheCompanyspreliminaryfullyearfinancialresultsuntil
30daysaftertheCompanysAnnualGeneralMeeting.

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.

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

28

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateGovernanceStatement(continued)

Qualificationsofauditcommitteemembers
The qualifications and experience of the audit committee members are noted in pages 23 of the
AnnualReport.

Risk
The Board 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.

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/ChiefExecutive,
including responsibility for the day to day design and implementation of the Companys risk
managementandinternalcontrolsystem.ManagementreportstotheBoardontheCompanyskey
risksandtheextenttowhichitbelievestheserisksarebeingadequatelymanaged.

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.

29

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateGovernanceStatement(continued)

Tothisend,comprehensivepracticesareinplacethataredirectedtowardsachievingthefollowing
objectivesinrelationtotherequirementsofPrincipal7:

EffectiveandefficientuseoftheCompanysresources
Compliancewithapplicablelawsandregulations
Preparationofreliablepublishedfinancialinformation

ChiefExecutiveandCFOcertification
Inaccordancewithsection295AoftheCorporationsAct,theChiefExecutiveandCFOhaveprovided
awrittenstatementtotheBoardthat:

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
control assurance from the Chief Executive and CFO can only be reasonable rather than absolute.
This is due to such factors as the need for judgement, the use of testing on a sample basis, the
inherent limitations in internal control and because much of the evidence available is persuasive
rather than conclusive and therefore is not and cannot be designed to detect all weaknesses in
controlprocedures.

Remuneration
ItistheCompanysobjectivetoprovidemaximumstakeholderbenefitfromtheretentionofahigh
quality Board and executive team by remunerating directors and key executives fairly and
appropriatelywithreferencetorelevantemploymentmarketconditions.Toassistinachievingthis
objective,theBoardlinksthenatureandamountofexecutivedirectorsandofficersremuneration
totheCompanysfinancialandoperationalperformance.

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.

30

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

CorporateGovernanceStatement(continued)

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
andtheCorporationsAct2001inAustralia.
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
answer any shareholder questions about the conduct of the audit and preparation of the audit
report.

31

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

ConsolidatedStatementofFinancialPosition
ASAT30JUNE2010

ASSETS
CurrentAssets
Cashandcashequivalents
Tradeandotherreceivables
Workinprogress
TotalCurrentAssets

NonCurrentAssets
Plantandequipment
Prepayments
Goodwill
Intangibleassets
Deferredtaxassets
Otherassets
TotalNonCurrentAssets
TOTALASSETS

LIABILITIES
CurrentLiabilities
Tradeandotherpayables
Interestbearingloansandborrowings
Incometaxpayable
Provisions
Otherliabilities
TotalCurrentLiabilities

NonCurrentLiabilities
Tradeandotherpayables
Interestbearingloansandborrowings
Provisions
Otherliabilities
TotalNonCurrentLiabilities
TOTALLIABILITIES
NETASSETS

EQUITY
IssuedCapital
AccumulatedLosses
Reserves
TOTALEQUITY

Note

11
12
13

14

15
16
8
17

18
19
8
20
21

18
19
20
21

22
23
24

CONSOLIDATED
2010
2009
$
$

2,151,449
600,694
7,538,870
5,616,233
1,353,354
1,370,212
11,043,673
7,587,139

1,181,314
691,360
29,230
63,016
10,470,600
10,372,263
65,340
100,980
101,089
464,147
2,642
2,677
11,850,215
11,694,443
22,893,888
19,281,582

3,317,157
1,738,222
1,573,325
1,244,330
177,524
157,011
687,057
459,466
279,933
200,000
6,034,996
3,799,029

75,107

260,913
1,064,105
197,350
177,620
127,608
378,422
660,978
1,620,147
6,695,974
5,419,176
16,197,914

13,862,406

32,160,426
(16,688,184)
725,672

30,504,813
(16,641,034)
(1,373)

16,197,914

13,862,406

TheaboveConsolidatedStatementofFinancialPositionshouldbereadinconjunctionwiththe
accompanyingnotes.
32

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

ConsolidatedStatementofComprehensiveIncome
FORTHEYEARENDED30JUNE2010

Professionalfees
Interestrevenue
Dividendsreceived
Otherrevenue
Totalrevenue

Occupancyexpenses
Salariesandemployeebenefitsexpenses
Depreciationandamortisationexpenses
Advertisingandmarketingexpenses
Administrativeexpenses
Otherexpenses
Financecosts
Sharebasedpaymentsexpense
Impairmentloss
Totalexpenses
Profitbeforeincometax
Incometaxexpense
Profitafterincometax

Note

7(a)

7(b)
7(c)

7(d)
7(e)

CONSOLIDATED
2010
2009
$
$
23,822,676
16,388,522
39,175
158,585
91
85
13,046
399,029
23,874,988
16,946,221

(2,114,280)
(1,619,855)
(16,149,830)
(10,167,466)
(343,759)
(189,496)
(222,928)
(209,481)
(2,889,908)
(2,602,316)
(742,175)
(534,936)
(160,597)
(57,148)
(19,243)
(14,838)

(450,000)
(22,642,720)
(15,845,536)
1,232,268
1,100,685
(378,774)
(506,810)
853,494
593,875

Netprofitfortheyear

853,494

593,875

Othercomprehensiveincome
Netgains/(losses)onavailableforsalefinancialassets
Othercomprehensiveincome/(losses)fortheyear,netoftax
Totalcomprehensiveincomefortheyear

(68)
(68)
853,426

112
112
593,987

1.18
1.18

0.89
0.89

Basicprofitpershare(cents)
Dilutedprofitpershare(cents)

10
10

TheaboveConsolidatedStatementofComprehensiveIncomeshouldbereadinconjunctionwith
theaccompanyingnotes.
33

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

ConsolidatedStatementofCashFlows
FORTHEYEARENDED30JUNE2010

Cashflowsfromoperatingactivities
Receiptsfromcustomers
Interestreceived
Dividendsreceived
Otherrevenue
Paymentstosuppliersandemployees
Interestandothercostsoffinancepaid
Incometaxreceived/(paid)
Netcashflowsfrom/(usedin)operatingactivities

Cashflowsfrominvestingactivities
Purchaseofplantandequipment
Proceedsfromthedisposalofplantandequipment
Paymentfortheacquisitionofbusinessesnetofcashacquired
Netcashflowsusedininvestingactivities

Cashflowsfromfinancingactivities
Proceedsfromloansreceived
Repaymentofborrowings
Dividendspaid
Proceedsfromissueofshares
Paymentsforshareissueexpenses
Netcashflowsfromfinancingactivities

Netincrease/(decrease)incashheld
Cashandcashequivalentsatthebeginningofthefinancialyear
Cashandcashequivalentsattheendofthefinancialyear

Note

25(a)

11

CONSOLIDATED
2010
2009
$
$

24,249,661
14,744,556
39,175
159,533
57
44
13,046
399,029
(22,800,109)
(15,623,518)
(92,984)
(23,832)
39,315
(1,308,557)
1,448,161
(1,652,745)

(807,265)
(180,612)
5,136
2,326

(3,731,403)
(802,129)
(3,909,689)

993,027
2,199,372
(1,584,315)
(386,764)
(131,122)
(1,411,065)
1,674,510

(115,058)

837,042
401,543

1,483,074
(5,160,891)
465,875
5,626,766
1,948,949

465,875

TheaboveConsolidatedStatementofCashFlowsshouldbereadinconjunctionwiththe
accompanyingnotes.
34

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

ConsolidatedStatementofChangesinEquity
FORTHEYEARENDED30JUNE2010

CONSOLIDATED

Balanceasat1July2008

Issued
Capital

Accumulated
Losses

Net
Unrealised
Gains/(Losses)
Reserve

29,729,975

(15,823,844)

13,904,646

593,875

112

112

593,987

Othercomprehensiveincome
Totalcomprehensiveincomeforthe
year
Transactionswithownersintheir
capacityasowners

593,875

112

Dividendspaid

(1,411,065)

Balanceasat30June2009

593,875

30,504,813

774,838

Issueofshares

Total
Equity

(1,485)

Profitfortheyear

General
Reserve

(1,411,065)

774,838

(1,373)

13,862,406

(16,641,034)

CONSOLIDATED

Balanceasat1July2009

Issued
Capital

Accumulated
Losses

Net
Unrealised
Gains/(Losses)
Reserve

30,504,813

(16,641,034)

Total
Equity

13,862,406

853,494

(68)

(68)

853,494

(68)

853,426

Profitfortheyear

Othercomprehensiveloss
Totalcomprehensiveincomeforthe
year
Transactionswithownersintheir
capacityasowners

Transfertogeneralreserve

(727,113)

727,113

Dividendspaid

(173,531)

(173,531)

19,243

19,243

Issueofshares

1,716,910

1,716,910

Transactioncostsonissueofshares
Incometaxonitemstakendirectlytoor
transferredfromequity

(115,058)

(115,058)

34,518

34,518

727,113

16,197,914

Sharebasedpayments

Balanceasat30June2010

32,160,426

853,494

(1,373)

General
Reserve

(16,688,184)

(1,441)

TheaboveConsolidatedStatementofChangesinEquityshouldbereadinconjunctionwiththe
accompanyingnotes.
35

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements
FORTHEYEARENDED30JUNE2010

1) CORPORATEINFORMATION
ThefinancialreportofIntegratedLegalHoldingsLimited(theCompany)fortheyearended30June
2010wasauthorisedforissueinaccordancewitharesolutionofdirectorson27September2010.

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
From 1 July 2009, the Group has adopted all Australian Accounting Standards and Interpretations,
mandatory for annual reporting periods beginning on or after 1 July 2009. Adoption of these
standardsandinterpretationsdidnothaveaneffectonthefinancialpositionorperformanceofthe
Group,exceptforthefollowing:

AASB8OperatingSegments
ThestandardreplacesAASB114SegmentReportingandrequiresamanagementapproach
tobeusedforsegmentreportingandalsoreplacestherequirementtodetermineprimary
(business) and secondary (geographical) reporting segments of the Group. This approach
identifies operating segments by reference to internal reports that are evaluated regularly
bythechiefoperatingdecisionmakerindecidinghowtoallocateresourcesandinassessing
performance. The Group concluded that operating segments determined in accordance
withAASB8arethesameasthebusinesssegmentsreportedunderAASB114.

AASB101PresentationofFinancialStatements(Revised)
The revised statement separates owner and nonowner changes in equity and requires a
statement of comprehensive income to be prepared which discloses all changes in equity
during a period resulting from nonowner transactions. The Group has elected to present
comprehensiveincomeusingthesinglestatementapproach.

36

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements
FORTHEYEARENDED30JUNE2010

2)SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

AASB3BusinessCombinations(Revised)
The revised AASB 3 applies the acquisition method to account for business combinations.
Underthismethodallpaymentstopurchaseabusinessaretoberecordedatfairvalueat
theacquisitiondate,withcontingentpaymentsclassifiedasdebtsubsequentlyremeasured
through the statement of comprehensive income. There is a choice on an acquisition by
acquisition basis to measure the noncontrolling interest in the acquiree either at the fair
value or at the noncontrolling interests proportionate share of the acquirees net assets.
Acquisitionrelatedcostsareexpensedasincurred.However,thetransitionalprovisionsof
therevisedAASB3allowforcontingentpaymentsinrespectofacquisitionspriorto1July
2009toberemeasuredthroughgoodwill.TheGroupspolicyhasbeenamendedtoreflect
therevisedstandard.

AASB123(Revised)andAASB20076
TherevisedAASB123requirescapitalisationofborrowingcoststhataredirectlyattributable
to the acquisition, construction or production of a qualifying asset. The Groups previous
policy was to expense borrowing costs as they were incurred. In accordance with the
transitionalprovisionsoftheamendedAASB123,theGrouphasadoptedthestandardona
prospective basis. Therefore borrowing costs are capitalised on qualifying assets with a
commencement date on or after 1 July 2009. The Groups accounting policy has been
amendedtoreflecttherevisedstandard.

IAS 27 Consolidated and Separate Financial Statements Cost of an Investment in a


Subsidiary,JointlyControlledEntityorAssociate(Amendments)
ThereareanumberofchangesarisingfromtherevisionofAASB127relatingtochangesin
ownershipinterestinasubsidiarywithoutlossofcontrol,allocationoflossesofasubsidiary
andaccountingforthelossofcontrolofasubsidiary.Specificallyinrelationtoachangein
ownership interest of a subsidiary (that does not result in a loss of control) such a
transaction will be accounted for as an equity transaction. The Group has adopted this
accountingpolicyprospectivelyfrom1July2009.

AASB7FinancialInstruments:Disclosures(revised)
The amended standard requires additional disclosure about fair value measurement and
liquidity risk. Fair value measurements related to all financial instruments recognised and
measuredatfairvaluearetobedisclosedbysourceofinputsusingathreelevelhierarchy,
by class. The amendments also clarify the requirements for liquidity risk disclosures with
respecttoderivativetransactionsandassetsusedforliquiditymanagement.Thefairvalue
measurement disclosures are presented in note 4. The liquidity risk disclosures are not
significantlyimpactedbytheamendmentsandarealsopresentedinnote3.

AustralianAccountingStandardsandInterpretationsthathaverecentlybeenissuedoramendedbut
arenotyeteffectivehavenotbeenadoptedbytheGroupfortheannualreportingperiodended30
June2010.Theseareoutlinedinthefollowingtable.

37

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

b) Newaccountingstandardsandinterpretations(continued)

Reference

AASB20095

Title

FurtherAmendmentsto
AustralianAccountingStandards
arisingfromtheAnnual
ImprovementsProject

[AASB5,8,101,107,117,118,
136&139]

Summary

Application
dateof
standard

ImpactonGroupfinancialreport

Application
datefor
Group

TheamendmentstosomeStandardsresultinaccounting
changesforpresentation,recognitionormeasurement
purposes,whilesomeamendmentsthatrelateto
terminologyandeditorialchangesareexpectedtohaveno
orminimaleffectonaccountingexceptforthefollowing:

1January2010

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2010

TheamendmenttoAASB117removesthespecific
guidanceonclassifyinglandasaleasesothatonlythe
generalguidanceremains.Assessinglandleasesbasedon
thegeneralcriteriamayresultinmorelandleasesbeing
classifiedasfinanceleasesandifso,thetypeofassetwhich
istoberecorded(intangiblevs.property,plantand
equipment)needstobedetermined.
TheamendmenttoAASB101stipulatesthatthetermsofa
liabilitythatcouldresult,atanytime,initssettlementby
theissuanceofequityinstrumentsattheoptionofthe
counterpartydonotaffectitsclassification.
TheamendmenttoAASB107explicitlystatesthatonly
expenditurethatresultsinarecognisedassetcanbe
classifiedasacashflowfrominvestingactivities.
TheamendmenttoAASB118providesadditionalguidance
todeterminewhetheranentityisactingasaprincipaloras
anagent.Thefeaturesindicatinganentityisactingasa
principalarewhethertheentity:

hasprimaryresponsibilityforprovidingthe
goodsorservice;

hasinventoryrisk;

hasdiscretioninestablishingprices;

bearsthecreditrisk.

38

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

b) Newaccountingstandardsandinterpretations(continued)

Reference

AASB20095
(cont)

Title

FurtherAmendmentstoAustralian
AccountingStandardsarisingfrom
theAnnualImprovementsProject
[AASB5,8,101,107,117,118,136&
139]

Summary

Application
dateof
standard

TheamendmenttoAASB136clarifiesthatthelargestunit
permittedforallocatinggoodwillacquiredinabusiness
combinationistheoperatingsegment,asdefinedinIFRS8
beforeaggregationforreportingpurposes.

ImpactonGroupfinancialreport

Application
datefor
Group

ThemainchangetoAASB139clarifiesthataprepayment
optionisconsideredcloselyrelatedtothehostcontract
whentheexercisepriceofaprepaymentoption
reimbursesthelenderuptotheapproximatepresentvalue
oflostinterestfortheremainingtermofthehostcontract.
Theotherchangesclarifythescopeexemptionforbusiness
combinationcontractsandprovideclarificationinrelation
toaccountingforcashfl owhedges.

AASB20098

AmendmentstoAustralian
AccountingStandardsGroupCash
settledSharebasedPayment
Transactions[AASB2]

ThisStandardmakesamendmentstoAustralian
AccountingStandardAASB2SharebasedPaymentand
supersedesInterpretation8ScopeofAASB2and
Interpretation11AASB2CroupandTreasuryShare
Transactions.

1January2010

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2010

Theamendmentsclarifytheaccountingforgroupcash
settledsharebasedpaymenttransactionsintheseparate
orindividualfinancialstatementsoftheentityreceiving
thegoodsorserviceswhentheentityhasnoobligationto
settlethesharebasedpaymenttransaction.
TheamendmentsclarifythescopeofAASB2byrequiring
anentitythatreceivesgoodsorservicesinasharebased
paymentarrangementtoaccountforthosegoodsor
servicesnomatterwhichentityinthegroupsettlesthe
transaction,andnomatterwhetherthetransactionis
settledinsharesorcash.

39

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

b) Newaccountingstandardsandinterpretations(continued)

Reference

AASB200910

Title

AmendmentstoAustralian
AccountingStandardsClassification
ofRightsIssues[AASB132]

Summary

Application
dateof
standard

ImpactonGroupfinancialreport

Application
datefor
Group

Theamendmentprovidesrelieftoentitiesthatissuerights
inacurrencyotherthantheirfunctionalcurrency,from
treatingtherightsasderivativeswithfairvaluechanges
recordedinprofitorloss.Suchrightswillnowbeclassified
asequityinstrumentswhencertainconditionsaremet.

1February2010

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2010

40

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

b) Newaccountingstandardsandinterpretations(continued)

Reference

AASB9

Title

FinancialInstruments

Summary

AASB9includesrequirementsfortheclassificationand
measurementoffinancialassetsresultingfromthefirst
partofPhase1ofthelASB'sprojecttoreplaceIAS39
FinancialInstruments:RecognitionandMeasurement
(AASB139FinancialInstruments:Recognitionand
Measurement).

Application
dateof
standard

ImpactonGroupfinancialreport

Application
datefor
Group

1January2013

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2013

Theserequirementsimproveandsimplifytheapproachfor
classificationandmeasurementoffinancialassets
comparedwiththerequirementsofAASB139.Themain
changesfromAASB139aredescribedbelow.
(a)

Financialassetsareclassifiedbasedon(1)the
objectiveoftheentity'sbusinessmodelfor
managingthefinancialassets;(2)thecharacteristics
ofthecontractualcashflows.Thisreplacesthe
numerouscategoriesoffinancialassetsinAASB139,
eachofwhichhaditsownclassificationcriteria.

(b)

AASB9allowsanirrevocableelectiononinitial
recognitiontopresentgainsandlosseson
investmentsinequityinstrumentsthatarenotheld
fortradinginothercomprehensiveincome.
Dividendsinrespectoftheseinvestmentsthatarea
returnoninvestmentcanberecognisedinprofitor
lossandthereisnoimpairmentorrecyclingon
disposaloftheinstrument.

c)

Financialassetscanbedesignatedandmeasuredat
fairvaluethroughprofitorlossatinitialrecognition
ifdoingsoeliminatesorsignificantlyreducesa
measurementorrecognitioninconsistencythat
wouldarisefrommeasuringassetsorliabilities,or
recognisingthegainsandlossesonthem,on
differentbases.

41

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

b) Newaccountingstandardsandinterpretations(continued)

Reference

AASB200911

Title

AmendmentstoAustralian
AccountingStandardsarisingfrom
AASB9

Summary

Application
dateof
standard

ImpactonGroupfinancialreport

Application
datefor
Group

The revised Standard introduces a number of changes to


theaccountingforfinancialassets,themostsignificantof
whichincludes:

1January2013

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2013

[AASB1,3,4,5,7,101,102,108,112,
118,121,127,128,131,132,136,
139,1023&1038andInterpretations
10&12]

twocategoriesforfinancialassetsbeingamortised
costorfairvalue

removaloftherequirementtoseparate
embeddedderivativesinfinancialassets

strictrequirementstodeterminewhichfinancial
assetscanbeclassifiedasamortisedcostorfair
value.Financialassetscanonlybeclassifiedas
amortisedcostif(a)thecontractualcashflows
fromtheinstrumentrepresentprincipaland
interestand(b)theentity'spurposeforholding
theinstrumentistocollectthecontractualcash
flows

anoptionforinvestmentsinequityinstruments
whicharenotheldfortradingtorecognisefair
valuechangesthroughothercomprehensive
incomewithnoimpairmenttestingandno
recyclingthroughprofitorlossonderecognition

reclassificationsbetweenamortisedcostandfair
valuenolongerpermittedunlesstheentity's
businessmodelforholdingtheassetchanges

changestotheaccountingandadditional
disclosuresforequityinstrumentsclassifiedasfair
valuethroughothercomprehensiveincome

42

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

b) Newaccountingstandardsandinterpretations(continued)

Reference

AASB124
(Revised)

Title

RelatedPartyDisclosures
(December2009)

Summary

TherevisedAASB124simplifiesthedefinitionofarelated
party,clarifyingitsintendedmeaningandeliminating
inconsistenciesfromthedefinition,including:
(a)

thedefinitionnowidentifiesasubsidiaryandan
associatewiththesameinvestorasrelated
partiesofeachother;

(b)

entitiessignificantlyinfluencedbyonepersonand
entitiessignificantlyinfluencedbyaclose
memberofthefamilyofthatpersonareno
longerrelatedpartiesofeachother;and

(c)

thedefinitionnowidentifiesthat,whenevera
personorentityhasbothjointcontrolovera
secondentityandjointcontrolorsignificant
influenceoverathirdparty,thesecondand
thirdentitiesarerelatedtoeachother.

Application
dateof
standard

ImpactonGroupfinancialreport

Application
datefor
Group

1January2011

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2011

Apartialexemptionisalsoprovidedfromthedisclosure
requirementsforgovernmentrelatedentities.Entities
thatarerelatedbyvirtueofbeingcontrolledbythesame
governmentcanprovidereducedrelatedparty
disclosures.

43

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

b) Newaccountingstandardsandinterpretations(continued)

Reference

AASB200912

AASB20103

Title

Summary

AmendmentstoAustralian
AccountingStandards[AASBs5,8,
108,110,112,119,133,137,139,
1023&1031andInterpretations2,4,
16,1039&1052]

Thisamendmentmakesnumerouseditorialchangestoa
rangeofAustralianAccountingStandardsand
Interpretations.

AmendmentstoAustralian
AccountingStandardsarisingfrom
theAnnualImprovementsProject

Limitsthescopeofthemeasurementchoicesofnon
controllinginterestatproportionateshareofnetassetsin
theeventofliquidation.OthercomponentsofNCIare
measuredatfairvalue.

[AASB3,AASB7,AASB121,AASB128,
AASB131,AASB132&AASB139]

Application
dateof
standard

ImpactonGroupfinancialreport

Application
datefor
Group

1January2011

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2011

1July2010

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2010

Inparticular,itamendsAASB8OperatingSegmentsto
requireanentitytoexercisejudgementinassessing
whetheragovernmentandentitiesknowntobeunderthe
controlofthatgovernmentareconsideredasingle
customerforthepurposesofcertainoperatingsegment
disclosures.Italsomakesnumerouseditorialamendments
toarangeofAustralianAccountingStandardsand
Interpretations,includingamendmentstoreflectchanges
madetothetextofIFRSsbytheIASB.

Requiresanentity(inabusinesscombination)toaccountfor
thereplacementoftheacquiree'ssharebasedpayment
transactions(whetherobligedorvoluntarily),i.e.,split
betweenconsiderationandpostcombinationexpenses.
Clarifiesthatcontingentconsiderationfromabusiness
combinationthatoccurredbeforetheeffectivedateof
AASB3Revisedisnotrestated.
Eliminatestherequirementtorestatefinancialstatementsfor
areportingperiodwhensignificantinfluenceorjointcontrolis
lostandthereportingentityaccountsfortheremaining
investmentunderAASB139.Thisincludestheeffecton
accumulatedforeignexchangedifferencesonsuch
investments.

44

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

b) Newaccountingstandardsandinterpretations(continued)

Reference

AASB20104

Title

Summary

Application
dateof
standard

ImpactonGroupfinancialreport

Application
datefor
Group

FurtherAmendmentstoAustralian
AccountingStandardsarisingfrom
theAnnualImprovementsProject
[AASB1,AASB7,AASB101,AASB134
andInterpretation13]

Emphasisestheinteractionbetweenquantitativeand
qualitativeAASB7disclosuresandthenatureandextentof
risksassociatedwithfinancialinstruments.

1January2011

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2011

1July2010

TheGrouphasnotyetdeterminedtheimpactofthe
amendments,ifany.

1July2010

Clarifiesthatanentitywillpresentananalysisofother
comprehensiveincomeforeachcomponentofequity,
eitherinthestatementofchangesinequityorinthenotes
tothefinancialstatements.
Providesguidancetoillustratehowtoapplydisclosure
principlesinAASB134forsignificanteventsand
transactions
Clarifythatwhenthefairvalueofawardcreditsis
measuredbasedonthevalueoftheawardsforwhichthey
couldberedeemed,theamountofdiscountsorincentives
otherwisegrantedtocustomersnotparticipatinginthe
awardcreditscheme,istobetakenintoaccount.

Interpretation19

Interpretation19
ExtinguishingFinancial
LiabilitieswithEquity
Instruments

Thisinterpretationclarifiesthatequityinstrumentsissued
toacreditortoextinguishafinancialliabilityare
"considerationpaid"inaccordancewithparagraph41of
IAS39.Asaresult,thefinancialliabilityisderecognisedand
theequityinstrumentsissuedaretreatedasconsideration
paidtoextinguishthatfinancialliability.
Theinterpretationstatesthatequityinstrumentsissuedin
adebtforequityswapshouldbemeasuredatthefairvalue
oftheequityinstrumentsissued,ifthiscanbedetermined
reliably.Ifthefairvalueoftheequityinstrumentsissuedis
notreliablydeterminable,theequityinstrumentsshouldbe
measuredbyreferencetothefairvalueofthefinancial
liabilityextinguishedasofthedateofextinguishment.

45

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

c) Basisofconsolidation
The consolidated financial statements comprise the financial statements of Integrated Legal
HoldingsLimitedanditssubsidiaries(asoutlinedinnote26(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 prior to 1 July 2009 is accounted for using the purchase method of
accounting. The purchase method of accounting involves allocating the cost of the business
combination to the fair value of the assets acquired and the liabilities and contingent liabilities
assumedatthedateofacquisition.

d) Businesscombinations
Theacquisitionmethodofaccountingisusedtoaccountforallbusinesscombinationsregardlessof
whetherequityinstrumentsorotherassetsareacquired.Costismeasuredasthefairvalueofthe
assetsgiven,sharesissuedorliabilitiesincurredorassumedatthedateofexchange.Costsdirectly
attributable to the combination are recognised as expenses in the statement of comprehensive
income.

Whereequityinstrumentsareissuedinabusinesscombination,thefairvalueoftheinstrumentsis
their published market price as at the date of exchange unless, in rare circumstances, it can be
demonstratedthatthepublishedpriceatthedateofexchangeisanunreliableindicatoroffairvalue
and that other evidence and valuation methods provide a more reliable measure of fair value.
Transactioncostsarisingontheissueofequityinstrumentsarerecogniseddirectlyinequity.

Exceptfornoncurrentassetsordisposalgroupsclassifiedasheldforsale(whicharemeasuredat
fair value less costs to sell), all identifiable assets acquired and liabilities and contingent liabilities
assumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate,
irrespective of the extent of any noncontrolling 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
theidentifiablenetassetsofthesubsidiary,thedifferenceisrecognisedasagaininthestatementof
comprehensiveincome,butonlyafterareassessmentoftheidentificationandmeasurementofthe
netassetsacquired.

46

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

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) Operatingsegments
Anoperatingsegmentisacomponentofanentitythatengagesinbusinessactivitiesfromwhichit
may earn revenues and incur expenses (including revenues and expenses relating to transactions
withothercomponentsofthesameentity),whoseoperatingresultsareregularlyreviewedbythe
entitys chief operating decision maker to make decisions about resources to be allocated to the
segmentandassessitsperformanceandforwhichdiscretefinancialinformationisavailable.This
includesstartupoperationswhichareyettoearnrevenues.Managementwillalsoconsiderother
factorsindeterminingoperatingsegmentssuchastheexistenceofalinemanagerandthelevelof
segmentinformationpresentedtotheBoardofDirectors.

Operatingsegmentshavebeenidentifiedbasedontheinformationprovidedtothechiefoperating
decisionmakersbeingtheexecutivemanagementteam.

The Group aggregates two or more operating segments when they have similar economic
characteristics,andthesegmentsaresimilarineachofthefollowingrespects:

Natureoftheproductsandservices;
Natureoftheproductionprocesses;
Typeorclassofcustomerfortheproductsandservices;
Methodsusedtodistributetheproductsorprovidetheservices;and,ifapplicable
Natureoftheregulatoryenvironment.

Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported
separately. However, an operating segment that does not meet the quantitative criteria is still
reportedseparatelywhereinformationaboutthesegmentwouldbeusefultousersofthefinancial
statements.

Informationaboutotherbusinessactivitiesandoperatingsegmentsthatarebelowthequantitative
criteriaarecombinedanddisclosedinaseparatecategoryforallothersegments.

f) Cashandcashequivalents
Cashandcashequivalentsinthestatementoffinancialpositioncomprisecashatbankandinhand
andshorttermdepositswithanoriginalmaturityofthreemonthsorlessthatarereadilyconvertible
toknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.

Forthepurposesofthestatementofcashflows,cashandcashequivalentsconsistofcashandcash
equivalents as defined above, net of outstanding bank overdrafts. Bank overdrafts are included
within current interestbearing loans and borrowings in current liabilities on the statement of
financialposition.

47

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

g) Tradeandotherreceivables
Trade receivables are initially recognised at the original fee amount. An estimate is made for
doubtfuldebtswhencollectionofthefullamountisnolongerprobable.Baddebtsareincludedin
the statement of comprehensive income when identified. The Groups standard terms for
settlementfortradereceivablesare30to60days.

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
workcompletedonmattersthatareinprogressatreportingdate.Costsincludebothvariableand
fixedcostsdirectlyrelatedtomatters.

Workinprogressisvaluedatnetrealisablevalueafterprovidingforanyforeseeablelosses.

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.

48

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

Availableforsalesecurities
Availableforsaleinvestmentsarethosenonderivativefinancialassets,principallyequitysecurities
thataredesignatedasavailableforsaleorarenotclassifiedasfinancialassetsatfairvaluethrough
profit or loss, loans and receivables, or held to maturity investments. After initial recognition
availableforsalesecuritiesaremeasuredatfairvaluewithgainsorlossesbeingrecognisedasother
comprehensive income/loss until the investment is derecognised or until the investment is
determinedtobeimpaired,atwhichtimethecumulativegainorlosspreviouslyreportedasother
comprehensiveincomeisrecognisedinprofitorloss.

Thefairvaluesofinvestmentsthatareactivelytradedinorganisedfinancialmarketsaredetermined
byreferencetoquotedmarketbidpricesatthecloseofbusinessonthereportingdate.

LoansandReceivables
Loansandreceivablesarenonderivativefinancialassetswithfixedordeterminablepaymentsthat
are not quoted in an active market. Such assets are carried at amortised cost using the effective
interestmethod.Gainsandlossesarerecognisedinthestatementofcomprehensiveincomewhen
theloansandreceivablesarederecognisedorimpaired,aswellasthroughtheamortisationprocess.

j) Plantandequipment
Plantandequipmentisstatedathistoricalcostlessaccumulateddepreciationandanyaccumulated
impairmentlosses.Suchcostincludestheacquisitioncostorcostofreplacingpartsthatareeligible
forcapitalisationwhenthecostofreplacingthepartisincurred.Allotherrepairsandmaintenance
arerecognisedinprofitorlossasincurred.

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,ateachreportingdate.

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.

49

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

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.

Operatingleasepaymentsarerecognisedasanexpenseinthestatementofcomprehensiveincome
onastraightlinebasisovertheleaseterm.Operatingleaseincentivesarerecognisedasaliability
whenreceivedandsubsequentlyreducedbyallocatingleasepaymentsbetweenrentalexpenseand
reductionoftheliability.

l) Impairmentofnonfinancialassetsotherthangoodwill
Otherassetsaretestedforimpairmentwhenevereventsorchangesincircumstancesindicatethat
thecarryingamountmaynotberecoverable.

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.

50

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

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
is not larger than an operating segment determined in accordance with AASB 8 Operating
Segments.

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.

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.

51

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

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
settlementoftheliabilityforatleast12monthsafterthereportingdate.

Borrowingcosts
Borrowing costs directly attributable to the acquisition, construction or production of a qualifying
asset(ieanassetthatnecessarilytakesasubstantialperiodoftimetogetreadyforitsintendeduse
orsale)arecapitalisedaspartofthecostofthatasset.Allotherborrowingcostsareexpensedin
theperiodtheyoccur.

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.

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
reimbursement is virtually certain. The expense relating to any provision is presented in the
statementofcomprehensiveincomenetofanyreimbursement.

Provisions are measured at the present value of management's best estimate of the expenditure
required to settle the present obligation at the reporting date. If the effect of the time value of
moneyismaterial,provisionsarediscountedusingacurrentpretaxratethatreflectsthetimevalue
of money and the risks specific to the liability. The increase in the provision resulting from the
passageoftimeisrecognisedinfinancecosts.

52

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

q) Employeebenefits
i) Wages,salaries,annualleaveandsickleave
Liabilities for wages and salaries, including nonmonetary benefits and annual leave due to be
settledwithin12monthsofthereportingdatearerecognisedinrespectofemployees'servicesup
to the reporting date. They are measured at the amounts due to be paid when the liabilities are
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.

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


equity,overtheperiodinwhichtheperformanceand/orserviceconditionsarefulfilled(thevesting
period),endedonthedateonwhichtherelevantemployeesbecomefullyentitledtotheaward(the
vestingdate).

53

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

At each subsequent reporting date until vesting, the cumulative charge to the statement of
comprehensiveincomeistheproductof:

i.
Thegrantdatefairvalueoftheaward;
ii.
Thecurrentbestestimateofthenumberofawardsthatwillvest,takingintoaccountsuch
factorsasthelikelihoodofemployeeturnoverduringthevestingperiodandthelikelihood
ofnonmarketperformanceconditionsbeingmet;and
iii.
Theexpiredportionofthevestingperiod.

Thechargetothestatementofcomprehensiveincomefortheperiodisthecumulativeamountas
calculated above less the amounts already charged in previous periods. There is a corresponding
entrytoequity.

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.

54

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

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
orsubstantivelyenactedbythereportingdate.

Deferredincometaxisprovidedonalltemporarydifferencesatthereportingdatebetweenthetax
basesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.

55

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

Deferredincometaxliabilitiesarerecognisedforalltaxabletemporarydifferencesexcept:

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.

Thecarryingamountofdeferredincometaxassetsisreviewedateachreportingdateandreduced
totheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailabletoallowallor
partofthedeferredincometaxassettobeutilised.

Deferredincometaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyto
theyearwhentheassetisrealisedortheliabilityissettled,basedontaxrates(andtaxlaws)that
havebeenenactedorsubstantivelyenactedatthereportingdate.

Deferredtaxassetsanddeferredtaxliabilitiesareoffsetonlyifalegallyenforceablerightexiststo
set off current tax assets against current tax liabilities and the deferred tax assets and liabilities
relatetothesametaxableentityandthesametaxationauthority.

Incometaxesrelatingtoitemsrecogniseddirectlyinequityarerecognisedinequityandnotinprofit
orloss.

56

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

Taxconsolidationlegislation
Integrated Legal Holdings Limited and its whollyowned Australian controlled entities have
implementedthetaxconsolidationlegislation.

Theheadentity,IntegratedLegalHoldingsLimitedandthecontrolledentitiesinthetaxconsolidated
groupcontinuetoaccountfortheirowncurrentanddeferredtaxamounts.TheGrouphasapplied
thegroupallocationapproachindeterminingtheappropriateamountofcurrenttaxesanddeferred
taxestoallocatetomembersofthetaxconsolidatedgroup.

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
fundingagreementaredisclosedinnote6(b)(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
receivablesorpayablesinthestatementoffinancialposition.

CashflowsareincludedinthestatementofcashflowsonagrossbasisandtheGSTcomponentof
cashflowsarisingfrominvestingandfinancingactivities,whichisrecoverablefrom,orpayableto,
thetaxationauthorityisclassifiedaspartofoperatingcashflows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payableto,thetaxationauthority.

57

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

2) SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES(continued)

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.

58

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

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.Thelevelofdebtisdisclosedinnote19.

At reporting date, the Group had the following mix of financial assets and liabilities exposed to
Australianvariableinterestraterisk:

Financialassets
Cashandcashequivalents

Financialliabilities
Bankoverdrafts
Bankloans

Netexposure

CONSOLIDATED
2010
2009
$
$

2,151,449
600,694

(202,500)
(134,819)
(950,000)
(1,723,000)
(1,152,500)
(1,857,819)
998,949
(1,257,125)

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
reportingdate.

59

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

3) FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES(continued)

At30June2010and30June2009,ifinterestrateshadmoved,asillustratedinthetablebelow,with
allothervariablesheldconstant,posttaxprofitandothercomprehensiveincomewouldhavebeen
affectedasfollows:

Judgementsofreasonablypossible
movements:

Consolidated
+0.5%(2009:+0.5%)
0.25%(2009:0.25%)

PostTaxProfit
Higher/(Lower)
2010
2009
$
$

645
12,450
(323)
(6,225)

OtherComprehensiveIncome
Higher/(Lower)
2010
2009
$
$

The movements in profit are due to higher/lower interest costs from variable rate debt and cash
balances.Thesensitivityislowerin2010duetoalowerexposuretointerestraterisk.

Managementconsiders+50basispointsand25basispointsasreasonablypossiblemovementfor
thenexttwelvemonthsbasedonmanagementsexpectationsoffutureinterestratemovements.

Creditrisk
CreditriskarisesfromthefinancialassetsoftheGroup,whichcomprisecashandcashequivalents,
tradeandotherreceivablesandworkinprogress.TheGroupsexposuretocreditriskarisesfrom
potentialdefaultofthecounterparty,withamaximumexposureequaltothecarryingamountof
theseinstruments.Exposureatreportingdateisaddressedineachapplicablenote.

TheGroupdoesnotholdanycreditderivativestooffsetitscreditexposure.

The Group manages its credit risk by trading with recognised, trustworthy third parties. In some
instancessecurityovertradereceivableshasbeenrequestedfromspecificclients(egmoniesheldin
trust,securityoverpropertyorbankguarantee),usuallydependentonthetypeoflegalworkbeing
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.

There are no significant concentrations of credit risk within the Group and financial instruments
includingcashandcashequivalentsarespreadbetweenreputablefinancialinstitutionstominimise
theriskofdefaultofcounterparties.

AnanalysisoftheGroupstradereceivablesisincludedinnote12.

60

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

3) FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES(continued)

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
basedontheconditionsexistingat30June2010.

TheremainingcontractualmaturitiesoftheGroupsfinancialliabilitiesare:

CONSOLIDATED

30June2010
Tradeandotherpayables
Financeleases/HPagreements(gross)
Insurancepremiumfundingfacilities
Bankloans(secured)
Interestexpensebankloans
Total

30June2009
Tradeandotherpayables
Financeleases/HPagreements(gross)
Insurancepremiumfundingfacilities
Bankloans(secured)
Interestexpensebankloans
Total

At
Call
$

6
months
$

612
months
$

3,317,157
106,331
236,113
950,000
14,433
4,624,035

1,738,222
39,264
289,598
100,000
34,239
2,201,323

15
years
$

105,807
7,901

113,707

39,264
24,179
623,000
21,722
708,165

Total
$

75,107
268,186

343,293

78,212

1,000,000
30,070
1,108,282

3,392,264
480,324
244,014
950,000
14,433
5,081,036

1,738,222
156,740
313,777
1,723,000
86,031
4,017,770

Liquidity risk is managed on the basis of the businesses needs and is overseen by senior
management.TheGroupmakesuseofdailyandmonthlycashflowanalysistoconsidertheGroups
overall liquidity risk and to monitor existing financial liabilities as well as effective controlling of
futurerisks.

61

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

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
onthestatementoffinancialposition.Deferredtaxassets,includingthosearisingfromunrecouped
taxlosses,capitallossesandtemporarydifferences,arerecognisedonlywhereitisconsideredmore
likelythannotthattheywillberecovered,whichisdependentonthegenerationofsufficientfuture
taxableprofits.

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
deferredtaxliabilitiesnotrecognisedonthestatementoffinancialpositionandtheamountofother
taxlossesandtemporarydifferencesnotyetrecognised.Insuchcircumstances,someorallofthe
carryingamountsofrecogniseddeferredtaxassetsandliabilitiesmayrequireadjustment,resulting
inacorrespondingcreditorchargetothestatementofcomprehensiveincome.

62

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

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.No
impairmentloss(2009:$450,000)wasrecognisedinthecurrentyear.Theassumptionsusedinthe
estimation of recoverable amount and the carrying amount of goodwill including a sensitivity
analysisarediscussedinnote15.

Sharebasedpaymenttransactions
TheGroupmeasuresthecostofequitysettledtransactionswithemployeesbyreferencetothefair
valueoftheequityinstrumentsatthedateatwhichtheyaregranted.Thefairvalueisdetermined
basedonthemarketpriceofanIntegratedLegalHoldingsLimitedshareatthegrantdate.

5) SEGMENTINFORMATION
TheGrouphasidentifieditsoperatingsegmentsbasedontheinternalmanagementreportingthatis
used by the executive management team (the chief operating decision maker) in assessing
performanceandallocatingresources.IntegratedLegalHoldingsLimitedsoperatingsegmentshave
been identified based on how the financial and operating results of the Group are monitored and
presentedinternallytotheexecutivemanagementteam.

TheGroupsreportablesegmentsareidentifiedbymanagementbasedonthenatureofthebusiness
andthesimilaritiesofservicesprovided,methodofdeliveryandtypeofclientsastheGroupsrisks
andreturnsareaffectedpredominantlybydifferencesinlegalproductsandservicesperformed.

Theoperatingbusinessesareorganisedandmanagedseparatelyaccordingtothenatureofthelegal
productsandservicesprovided,witheachsegmentrepresentingastrategicbusinessunitthatoffers
differentlegalproductsandservesdifferentmarkets.

Thefollowingreportablesegmentshavebeenidentifiedbymanagement:

LegalServicesDivision
OperatoroflegalpracticesthroughoutAustralia

InformationTechnologyDivision
Provides an internet portal designed to provide easy access to a range of legal and other
documentstothelegalprofessionandpublicalikeandinformationaboutvariousareasoflaw.

63

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

5) SEGMENTINFORMATION(continued)

Theaccountingpoliciesusedbythe Groupinreportingsegmentsinternallyarethesame asthose


containedinnote1totheaccounts,exceptforthefollowing:

Intersegmentsales
Intersegmentsalesarerecognisedatcostwithnomarginbuiltintotheintersegmenttransactions,
andaimstoencourageintersegmentworkreferrals.

Unallocatedrevenueandassets
Corporateitemsarenotallocatedtooperatingsegmentsastheyarenotconsideredpartofthecore
operationsofanysegments.

The following tables present revenue and profit information for operating segments for the years
ended30June2010and30June2009.

Yearended30June2010
Revenue
Professionalfees
Interestrevenue
Otherrevenue:
Advertisingrevenue
Sundryrevenue
Totalsegmentrevenue
Unallocatedrevenue:
Interestreceived
Dividendsreceived
Totalunallocatedrevenue
Intersegmentelimination
Totalrevenueperstatementofcomprehensive
income

Result
Segmentprofit
Unallocateditems:
Interestrevenue
Salariesandemployeebenefitsexpenses
Administrativeexpenses
Otherunallocateditems
Totalunallocateditems
Profitbeforetaxandfinancecosts
Financecosts
Profitbeforeincometax
Incometaxexpense
Netprofitafterincometax

Legal
Services
$

Information
Technology
$

22,980,838
11,890

3,699
22,996,427

841,838

7,372
1,975
851,185

2,427,771

290,200

Total
$

23,822,676
11,890

7,372
5,674
23,847,612

27,285
91
27,376

23,874,988

2,717,971

27,285
(860,664)
(407,209)
(84,518)
(1,325,106)
1,392,865
(160,597)
1,232,268
(378,774)
853,494

64

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

5) SEGMENTINFORMATION(continued)

Yearended30June2009
Revenue
Professionalfees
Interestrevenue
Otherrevenue:
Rentalrevenue
Compensationreceivable
Advertisingrevenue
Sundryrevenue
Intersegmentrevenue
Totalsegmentrevenue
Unallocatedrevenue:
Interestreceived
Dividendsreceived
Totalunallocatedrevenue
Intersegmentelimination
Totalrevenueperstatementofcomprehensive
income

Result
Segmentprofit
Unallocateditems:
Interestrevenue
Salariesandemployeebenefitsexpenses
Administrativeexpenses
Impairmentloss
Otherunallocateditems
Totalunallocateditems
Profitbeforetaxandfinancecosts
Financecosts
Profitbeforeincometax
Incometaxexpense
Netprofitafterincometax

Legal
Services
$

Information
Technology
$

15,604,767
3,801

251,931
139,000

1,497
14,110
16,015,106

783,755
3,182

5,342
1,259

793,538

2,533,798

223,979

Total
$

16,388,522
6,983

251,931
139,000
5,342
2,756
14,110
16,808,644

151,602
85
151,687
(14,110)
16,946,221

2,757,777

151,602
(663,216)
(379,498)
(450,000)
(258,832)
(1,599,944)
1,157,833
(57,148)
1,100,685
(506,810)
593,875

65

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

5) SEGMENTINFORMATION(continued)

Totalassetshaveincreasedby19%sincethelastannualreport.Segmentassetsfortheyearsended
30June2010and30June2009areasfollows:

Asat30June2010
Segmentassets
Segmentoperatingassets
Unallocatedassets:
Cashandcashequivalents
Deferredtaxassets
Prepayments
Investmentinassociates
Availableforsalefinancialassets
Plantandequipment
Totalunallocatedassets
Intersegmenteliminations
Totalassetsperstatementoffinancialposition

Legal
Services
$

Information
Technology
$

18,476,679

Total
$

2,157,378

20,634,057

2,134,217
214,582
42,523
712,888
2,642
3,735
3,110,587
(850,756)
22,893,888

Asat30June2009
Segmentassets
Segmentoperatingassets
Unallocatedassets:
Cashandcashequivalents
Deferredtaxassets
Prepayments
Investmentinassociates
Availableforsalefinancialassets
Plantandequipment
Totalunallocatedassets
Intersegmenteliminations
Totalassetsperstatementoffinancialposition

Legal
Services
$

Information
Technology
$

16,108,199

Total
$

2,166,143

18,274,342

547,437
297,357
170,386
712,888
2,677
5,023
1,735,768
(728,528)
19,281,582

66

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

5) SEGMENTINFORMATION(continued)

Segmentliabilitiesfortheyearsended30June2010and30June2009areasfollows:

Asat30June2010
Segmentliabilities
Segmentoperatingliabilities
Unallocatedliabilities:
Tradeandotherpayables
Interestbearingloansandborrowings
Incometaxpayable
Provisions
Totalunallocatedliabilities
Intersegmenteliminations
Totalliabilitiesperstatementoffinancialposition

Legal
Services
$

Information
Technology
$

16,806,395

Total
$

137,679

16,944,074

131,386
1,921,081
177,524
10,964
2,240,955
(12,489,055)
6,695,974

Asat30June2009
Segmentliabilities
Segmentoperatingliabilities
Unallocatedliabilities:
Tradeandotherpayables
Interestbearingloansandborrowings
Incometaxpayable
Provisions
Totalunallocatedliabilities
Intersegmenteliminations
Totalliabilitiesperstatementoffinancialposition

Legal
Services
$

Information
Technology
$

14,412,321

Total
$

150,192

14,562,513

222,161
2,646,591
157,011
24,229
3,049,992
(12,193,329)
5,419,176

67

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

6) PARENTENTITYINFORMATION

a) InformationrelatingtoIntegratedLegalHoldingsLimited:
2010
$

Currentassets
Totalassets
Currentliabilities
Totalliabilities
Issuedcapital
Accumulatedlosses
Generalreserve
Netlossesonavailableforsaleassets
Totalshareholdersequity

Profitoftheparententity
Totalcomprehensiveincomeoftheparententity

2,187,052
16,575,762
1,281,884
2,251,267
32,160,426
(18,561,603)
727,113
(1,441)
14,324,495

832,598
832,530

2009
$

654,807
14,136,285
1,125,582
2,126,401
30,504,813
(18,493,556)

(1,373)
12,009,884

1,034,986
1,035,098

b) Guaranteesenteredintobytheparententityinrelationtothedebtsofitssubsidiaries:

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).

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.

68

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

6)PARENTENTITYINFORMATION(continued)

Taxconsolidationcontributions/(distributions)
Integrated Legal Holdings Limited has recognised the following amounts as taxconsolidation
contributionadjustments.

PARENT
2010
$

2009
$

TotalincreasetotaxpayableofIntegratedLegalHoldingsLimited

902,133

893,780

TotalincreasetointercompanyassetsofIntegratedLegalHoldingsLimited

902,133

893,780

7) REVENUEANDEXPENSES

a)

CONSOLIDATED
2010
2009
$
$

251,931
13,046
147,098
13,046
399,029

14,848,185
1,301,645
16,149,830

8,840,917
1,326,549
10,167,466

305,209

2,910
35,640
343,759

151,427

2,429
35,640
189,496

Otherexpenses
Authorroyaltyfees
Donations
Consultingfees
Badanddoubtfuldebts
Bankfees
Otherexpenses

81,773

242,591
274,365
137,687
5,759
742,175

76,816
9,220
2,139
359,678
65,225
21,858
534,936

Financecosts
Interestotherentities
Interestaccretion

146,458
14,139
160,597

48,839
8,309
57,148

Otherrevenue
Rentreceived
Sundryincome

b)

Salariesandemployeebenefitsexpense
Salariesandwagesexpense
Superannuationexpense

c)

Depreciationandamortisationexpenses
Depreciationofplantandequipment
Amortisationof:

Equipmentunderfinancelease

Identifiedintangibles

d)

e)

69

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

8) INCOMETAX

a)

Incometaxexpense
Themajorcomponentsofincometaxexpenseare:
Statementofcomprehensiveincome
Currentincometax
Currentincometaxcharge
Adjustmentinrespectofcurrentincometaxofpreviousyears
Deferredincometax
Relatingtooriginationandreversaloftemporarydifferences
Adjustmentinrespectofdeferredincometaxofpreviousyears
Incometaxexpensereportedinthestatementofcomprehensiveincome

CONSOLIDATED
2010
2009
$
$

364,220
503,409
(383,022)
(6,112)

(9,237)
3,401
406,813
6,112
378,774
506,810

b)

c)

Amountschargedorcrediteddirectlytoequity
Deferredincometaxrelatedtoitemscharged/(credited)directlytoequity
Capitalraisingcosts

Numericalreconciliationbetweenaggregatetaxexpenserecognisedin
thestatementofcomprehensiveincomeandtaxexpensecalculatedper
thestatutoryincometaxrate
Areconciliationbetweentaxexpenseandtheproductofaccountingprofit
beforeincometaxmultipliedbytheGroupsapplicableincometaxrateisas
follows:
Accountingprofitbeforetax
Totalaccountingprofitbeforeincometax

AttheParentEntitysstatutoryincometaxrateof30%(2009:30%)
Adjustmentsinrespectofincometaxofpreviousyears
Entertainment
Impairmentloss
Interestaccretion
Sharebasedpaymentsexpense
Investmentallowance
Borrowingcosts
Other
Aggregateincometaxexpense

(34,518)
(34,518)

1,232,268
1,232,268

1,100,685
1,100,685

369,680
23,791
21,251

4,242
5,773
(43,656)
(2,307)

378,774

330,206

38,770
135,000

4,451
(1,368)

(249)
506,810

70

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

8)INCOMETAX(continued)

CONSOLIDATED

Recogniseddeferredtaxassetsandliabilities
Openingbalance
Acquisitions
(Charged)/creditedtoincome
Chargedtoequity
Otherpayments/(receipts)
ClosingBalance

d)

2010

2010

2009

2009

$
Current
Income
Tax

$
Current
Income
Tax

Deferred
IncomeTax

Deferred
IncomeTax

(157,011)

464,147

(968,272)

410,647

18,802

(397,576)
34,518

63,013

(497,297)

(9,513)

1,308,558

(177,524)

101,089

(157,011)

464,147

378,774

506,810

628,799

611,125

(527,710)

(146,978)

101,089

464,147

(39,315)

Taxexpense/(benefit)instatementof
comprehensiveincome
Amountsrecognisedinthestatementof
financialposition:
Deferredtaxasset
Deferredtaxliability

Deferredincometaxasat30June2010relatestothefollowing:
CONSOLIDATED
i) Deferredtaxassets
Employeeprovisions:
Annualleave
Longserviceleave
Doubtfuldebts
Prepayments
Amortisationintangibleassets
Leaseliabilities
Accruedauditfees
Unpaidsuperannuation
Leaseincentive
Capitalraisingcosts
Grossdeferredtaxassets
Setoffofdeferredtaxliabilities
Netdeferredtaxassets

ii)

Deferredtaxliabilities
Workinprogress
Plantandequipment
Deferredconsiderationprovisions
Identifiedintangibleatacquisition
Leasedassets
Prepayments
Grossdeferredtaxliabilities
Setoffofdeferredtaxassets
Netdeferredtaxliabilities

STATEMENTOF
FINANCIALPOSITION
2010
2009
$
$

162,451
106,632
102,871
84,494
39,902
31,452
3,783

18,682
1,218
2,394
70,737
32,755
5,857
4,728
63,029
87,776
178,951
242,212
628,799
611,125
(527,710)
101,089

406,006
1,088

19,604
1,670
99,342
527,710

(146,978)
464,147

1,088
4,249
48,976
2,543
90,122
146,978

(527,710)

(146,978)

At30June2010,therearenounrecognisedtemporarydifferences.
71

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

9) DIVIDENDSDECLARED

a) Unrecognisedamounts
Dividendsonordinaryshares:
Finalfrankeddividendfor2010:0.5centspershare
(2009:nil)

CONSOLIDATED
2010
$

2009
$

432,423

b) Frankingcreditbalance
Theamountoffrankingcreditsavailableforthesubsequentfinancialyear
are:
Frankingaccountbalanceasattheendofthefinancialyearat30%(2009:
30%)
Netfrankingcreditsthatarosefromthepaymentofincometaxpayable
andrefundsreceivedduringthefinancialyear
Franking credits that will arise from the payment of dividends as at the
endofthefinancialyear
Franking credits that will arise from the receipt of dividends recognised
receivablesatthereportingdate
Theamountoffrankingcreditsavailableforfuturereportingperiods

Impactonthefrankingaccountofdividendsproposedordeclaredbefore
the financial report was authorised for issued but not recognised as a
distributiontoequityholdersduringtheperiod

PARENT
2010
$

2009
$

590,224

703,870

177,524

157,011

767,748

860,881

(185,324)
582,424

860,881

c) Taxrates
Thetaxrateatwhichpaiddividendshavebeenfrankedis30%(2009:30%).

Dividendsproposedwillbefrankedattherateof30%(2009:30%).

72

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

10) EARNINGSPERSHARE
Thefollowingreflectstheincomeusedinthebasicanddilutedearningspersharecomputations:

a) Earningsusedincalculatingearningspershare
Forbasicanddilutedearningspershare:
Netprofitattributabletoordinaryequityholdersoftheparent

b) Weightedaveragenumberofshares
Weightedaveragenumberofordinarysharesforbasicanddilutedearningspershare

CONSOLIDATED
2010
2009
$
$

853,494
593,875

2010
2009
No.
No.
72,253,529

66,860,219

No instruments (eg share options) existed at reporting date which could potentially dilute basic
earningspershareineitheroftheperiodspresented.

Therehavebeennotransactionsinvolvingordinarysharesorpotentialordinarysharesthatwould
significantly change the number of ordinary shares or potential ordinary shares outstanding
betweenthereportingdateandthedateofcompletionofthesefinancialstatements.

11) CASHANDCASHEQUIVALENTS

Cashatbankandinhand

CONSOLIDATED
2010
2009
$
$

2,151,449

600,694

Cashatbankearnsinterestatfloatingratesbasedondailybankdepositrates.Thecarryingamounts
ofcashandcashequivalentsapproximatesfairvalue.

Reconciliationtostatementofcashflows
Forthepurposesofthestatementofcashflows,cashandcashequivalents
comprisethefollowingat30June:

Cashatbankandinhand
Shorttermdeposits
Bankoverdrafts(note20)

CONSOLIDATED
2010
2009
$
$

2,151,449

(202,500)
1,948,949

600,694

(134,819)
465,875

73

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

12) TRADEANDOTHERRECEIVABLES

Tradereceivables
Allowanceforimpairmentloss(a)

Unbilledclientdisbursements
Prepayments
Otherreceivables
Carryingamountoftradeandotherreceivables

CONSOLIDATED
2010
2009
$
$
6,854,442
4,862,586
(133,006)
(104,839)
6,721,436
4,757,747
190,847
139,019
589,361
651,276
37,226
68,191
7,538,870
5,616,233

a) Allowanceforimpairmentloss
Tradereceivablesarenoninterestbearingandaregenerallyon3060dayterms.Anallowancefor
impairmentlossisrecognisedwhenthereisobjectiveevidencethatanindividualtradereceivableis
impaired. An impairment lossof $274,365 (2009:$359,678) has been recognised by the Group in
thecurrentyearwhichincludesbaddebtsexpenserecognisedof$246,197(2009:$267,796).These
amountshavebeenincludedinotherexpenses.

Movementsintheallowanceforimpairmentlosswereasfollows:

Openingbalanceatthebeginningoftheyear
Chargefortheyear
Closingbalanceattheendoftheyear

CONSOLIDATED
2010
2009
$
$
104,839
12,957
28,167
91,882
133,006
104,839

Asat30June2010,theaginganalysisoftradereceivablesisasfollows:

2010

Consolidated

2009

Consolidated

*PDNIpastduenotimpaired

Total
6,854,442
4,862,586

030
days

3160
days

6190
Days
PDNI*

3,424,020

932,785

399,106

2,245,394

739,220

389,147

6190
Days
CI*

+91
Days
PDNI*

+91
Days
CI*

1,965,525

133,006

1,383,986

104,839

CIconsideredimpaired

Receivables past due but not considered impaired are $2,364,631 (2009: $1,786,090). Each
operatingunithasbeenindirectcontactwiththerelevantdebtorandissatisfiedthatpaymentwill
bereceivedinfull.

Otherbalanceswithintradeandotherreceivablesdonotcontainimpairedassetsandarenotpast
due.Itisexpectedthattheseotherbalanceswillbereceivedwhendue.

Unbilled client disbursements are incurred only where sufficient assets are in trust or subject to
recovery.Assuch,noimpairmentissuesarenoted.

b) Fairvalueandcreditrisk
Duetotheshorttermnatureofthesereceivables,theircarryingvalueisassumedtoapproximate
theirfairvalue.

Themaximumexposuretocreditriskisthecarryingvalueofreceivables.
74

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

13) WORKINPROGRESS

Workinprogress

CONSOLIDATED
2010
2009
$
$

1,353,354

1,370,212

Allowanceforrecoverableamount
Workinprogressisvaluedatitsnetrealisablevalueafterprovidingforanyforeseeablelossesthat
havebeencalculatedusinghistoricaldata.

14) PLANTANDEQUIPMENT

Reconciliationofcarryingamountsatthebeginningandendoftheperiod

Plantand
equipment
$

CONSOLIDATED
Leased
equipment
$

Yearended30June2010
Balanceasat1July2009netofaccumulateddepreciation
Additions
Disposals
Depreciationchargefortheyear
Balanceasat30June2010netofaccumulateddepreciation

Total
$

682,882
807,265
(9,192)
(305,209)
1,175,746

8,478

(2,910)
5,568

691,360
807,265
(9,192)
(308,119)
1,181,314

Asat30June2010
Cost
Accumulateddepreciation
Netcarryingamount

1,709,621
(533,875)
1,175,746

10,907
(5,339)
5,568

1,720,528
(539,214)
1,181,314

Plantand
equipment
$

CONSOLIDATED
Leased
equipment
$

Yearended30June2009
Balanceasat1July2008netofaccumulateddepreciation
Additions
Acquisitionofsubsidiary
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

75

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

15) GOODWILL

a) Reconciliationofcarryingamountsatthebeginningandendoftheperiod

Yearended30June2010
Balanceasat1July2009netofaccumulatedimpairment
Acquisitionofsubsidiary
Deferredconsiderationachieved(note29)
Impairment
Balanceasat30June2010netofaccumulatedimpairment

CONSOLIDATED
2010
2009
$
$

10,372,263
6,330,233

4,492,030
98,337

(450,000)
10,470,600
10,372,263

Asat30June2010
Cost(grosscarryingamount)
Accumulatedimpairment
Netcarryingamount

11,136,426
(665,826)
10,470,600

11,038,089
(665,826)
10,372,263

(b)DescriptionoftheGroupsgoodwill
After initial recognition, goodwill acquired in a business combination is measured at cost less any
accumulatedimpairmentlosses.Goodwillisnotamortisedbutissubjecttoimpairmenttestingon
anannualbasisorwheneverthereisanindicationofimpairment(refertosection(c)ofthisnote).

(c)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
fairvaluelesscoststosellcalculationusingcashflowprojectionsasat30June2010thatisbasedon
financial budgets approved by the Board covering a fiveyear period. This method calculates the
bestestimatethatanindependentthirdpartywouldpaytopurchasethecashgeneratingunitless
applicablesellingcostsatthereportingdate.Thevaluationisbasedoncashflowprojectionsusing
assumptions that represent managements best estimate of the range of business and economic
conditionsatthistime.

ThevaluationshavebeenreviewedandapprovedbytheBoard.

76

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

Thevalueinuseandfairvaluelesscoststosellvaluationsarecomparedtothenetcarryingamount
of goodwill recognised in the accounts. If the calculated recoverable amount exceeds the net
carryingamount,noimpairmentlossisrecorded.

(ii)Keyassumptionsusedinrecoverablevaluecalculations
Thekeyassumptionsmadebymanagementindeterminingtherecoverablevalueinclude:

Yearended30June2010
Goodwillrecognised

Argyle
Lawyers

Brett
Davies
Lawyers

Talbot
Oliver

Law
Central

$4,590,367

$704,000

$3,106,233

$2,070,000

Pretaxnominaldiscountrate
Growthinfees2011
Growthinfees20122015

Yearended30June2009
Goodwillrecognised

17.0%
18.0%
5.0%

$4,492,030

17.0%
16.0%
5.0%

$704,000

17.0%
21.0%
5.0%

$3,106,233

17.0%
16.0%
5.0%

$2,070,000

Pretaxnominaldiscountrate
Growthinfees2010
Growthinfees20112014

17.5%
20.6%
5.0%

17.5%
25.0%
5.0%

17.5%
20.5%
5.0%

17.5%
18.0%
5.4%

Discountrate
The discountrateappliedof17.0%(2009:17.5%)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
WithregardstotheassessmentofthevalueinuseoftheArgyleLawyers,BrettDaviesLawyersand
Talbot Olivier and the fair value less costs to sell of the Law Central cash generating units,
managementconsiderthatnoreasonablypossiblechangeinanyofthekeyassumptionsin(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
analysisperformedintherecoverablevaluecalculationswherebymanagementassessedtheresults
oftheGroupnotmeetingfeerevenuegrowthtargetsandapplyingthehighestreasonablypossible
discountrates.

77

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

16) INTANGIBLEASSETS

a) Reconciliationofcarryingamountsatthebeginningandendoftheperiod

Openingbalanceasnetofaccumulatedamortisation
Amortisation
Closingbalancenetofaccumulatedamortisation

Cost(grosscarryingamount)
Accumulatedamortisation
Netcarryingamountattheendofthefinancialyear

CONSOLIDATED
2010
2009
$
$
100,980
136,620
(35,640)
(35,640)
65,340
100,980

163,254
(97,914)
65,340

163,254
(62,274)
100,980

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
recognised in the statement of comprehensive income in the line item depreciation and
amortisationexpense.

17) OTHERNONCURRENTASSETS

Availableforsalefinancialassets
Sharesinlistedsecuritiesatfairvalue

CONSOLIDATED
2010
2009
$
$

2,642
2,677
2,642
2,677

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.

78

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

18) TRADEANDOTHERPAYABLES

Current
Tradepayables
Otherpayablesandaccruals

NonCurrent
Tradepayables

CONSOLIDATED
2010
2009
$
$
719,856
279,882
2,597,301
1,458,340
3,317,157
1,738,222

75,107
75,107

a) Fairvalue
Duetotheshorttermnatureofthesepayables,theircarryingvalueisassumedtoapproximatetheir
fairvalue.

b) Interestrateandliquidityrisk
Informationregardinginterestrateandliquidityriskexposureissetoutinnote3.

19) INTERESTBEARINGLOANSANDBORROWINGS

Current
Bankoverdraft
Obligationsunderfinanceleasesandhirepurchasecontracts(note30(i))
Insurancepremiumfunding(unsecured)
Bankloan(secured)

NonCurrent
Obligationsunderfinanceleasesandhirepurchasecontracts(note30(i))
Loanrelatedparty(unsecured)
Bankloan(secured)

CONSOLIDATED
2010
2009
$
$

202,500
134,819
176,811
72,734
244,014
313,777
950,000
723,000
1,573,325
1,244,330

260,913

260,913

63,555
550
1,000,000
1,064,105

The carrying amount of the Groups current and noncurrent borrowings approximate their fair
value.Detailsregardingliquidityriskaredisclosedinnote3.

79

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

19)INTERESTBEARINGLOANSANDBORROWINGS(continued)

a) Assetspledgedassecurity
The carrying amounts of assets pledged as security for current and noncurrent interest bearing
liabilitiesare:

Financelease
Leasedofficeequipment(note30(i))
Totalassetspledgedassecurity

CONSOLIDATED
2010
2009
$
$

5,568
8,478
5,568
8,478

Inaddition,the$950,000bankloanissecuredbyafixedandfloatingchargeoverthetotalassetsof
thegroup.

b) Defaultsandbreaches
Duringtheyeartherewerenodefaultsorbreachesonanyoftheloans.

20) PROVISIONS

Current
Longserviceleave
Annualleave

NonCurrent
Longserviceleave

CONSOLIDATED
2010
2009
$
$

145,554
104,027
541,503
355,439
687,057
459,466

197,350
197,350

177,620
177,620

21) OTHERLIABILITIES

Current
Deferredconsiderationpayable(1)
Leaseincentiveobligation(2)

NonCurrent
(1)
Deferredconsiderationpayable
(2)
Leaseincentiveobligation

CONSOLIDATED
2010
2009
$
$

197,444
200,000
82,489

279,933
200,000

127,608
127,608

85,837
292,585
378,422

(1)DeferredconsiderationpayableontheacquisitionofTheArgylePartnership(seenote29)
(2) Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease
paymentsbetweenrentalexpenseandreductionoftheliabilitytoensurerentalexpenseisrecognisedonastraight
linebasisovertheleaseterm.

80

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

22) ISSUEDCAPITAL

Consolidated
Consolidated
Consolidated

2010
2009
2010

Shares
Shares
$
Fullypaidshares
86,139,666
69,081,178
32,126,345
Partlypaidshares(1)
371,667
331,667
34,081
(2)
(26,667)
(66,667)

Forfeitedsharesheldintrust

86,484,666
69,346,178
32,160,426
(1)SharesissuedundertheDeferredEmployeeSharePlanthatvestoverthreeyears(note28).
(2)SharesissuedbutforfeitedundertheDeferredEmployeeSharePlan,heldintrust(note28).

Consolidated
2009
$
30,489,975
14,838

30,504,813

Fullypaidordinarysharescarryonevotepershareandcarrytherighttodividends.Theshareshave
noparvalue.

Movementinordinarysharesonissue:

Shares

Openingbalanceasat1July2008

63,538,320

29,729,975

4,142,857

580,000

IssueofsharesundertheDeferredEmployeeSharePlan

398,334

17,666

SharesforfeitedundertheDeferredEmployeeSharePlan

(66,667)

(2,828)

1,333,334

180,000

Balanceasat30June2009

69,346,178

30,504,813

Shares

Openingbalanceasat1July2009

69,346,178

30,504,813

7,000,000

700,000

353,488

42,410

IssuesofsharesunderSharePlacement(Tranche2)on12May2010

4,100,000

410,000

IssuesofsharesunderSharePurchasePlanon26May2010

5,645,000

564,500

(80,540)

40,000

19,243

86,484,666

32,160,426

Issueofsharesat14centspersharetovendorsofTheArgylePartnershipLawyers
on4November2009

Issueofsharesat13.5centspersharetovendorofmdalawyerson13March2010

IssueofsharesunderSharePlacement(Tranche1)on8April2010
IssuesofsharesunderDividendReinvestmentPlanon9April2010

Costsassociatedwiththecapitalraising,netoftax
IssueofsharesundertheDeferredEmployeeSharePlan
Balanceasat30June2010

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
shareholdersequityasdisclosedinthestatementoffinancialposition.

Inordertomaintainoradjustthecapitalstructure,theGroupmayadjusttheamountofdividends
paidtoshareholdersandincreaseordecreasetheGroupsdebt,subjecttothecapitalrequirements
oftheGroupsoperationsatthetime.

81

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

22)ISSUEDCAPITAL(continued)

During the year, the Directors paid an interim dividend of $173,532 (2009: nil) of which $131,113
was paid in cash and the balance of $42,419 was issued as ordinary shares under the Companys
dividend reinvestment plan. The Directors have declared a final dividend of 0.50 cents per share
($432,423)forthe2010financialyear(2009:nil).Thedividendreinvestmentplanwillnotbeoffered
forthisdividend.

TheGroupmonitorscapitalonthebasisofthegearingratio.ThelevelofgearingintheCompanyis
withintheacceptablelimitssetbytheDirectorsgiventheimplicationsofthebusinessacquisitions
andpaymentoftaxliabilitiesduringtheyear.

23) ACCUMULATEDLOSSES

Accumulatedlosses

Balanceatbeginningofyear
Netprofitfortheyear
Dividendspaid
Transfertogeneralreserve(note24)
Balanceatendoftheyear

Consolidated
2010
2009
$
$

(16,688,184)

(16,641,034)
853,494
(173,531)
(727,113)
(16,688,184)

(16,641,034)

(15,823,844)
593,875
(1,411,065)

(16,641,034)

24) RESERVES

Netgains/(losses)onavailableforsalefinancialassets
Generalreserve
Balanceatendoftheyear

Consolidated
2010
2009
$
$
(1,441)
(1,373)
727,113

725,672
(1,373)

Netunrealisedgainsreserve
Thisreserverecordsmovementsinthefairvalueofavailableforsalefinancialassets.

Generalreserve
Due to accumulated losses incurred prior to the listing of the company on 17 August 2007, the
Directors resolved to isolate profits derived from trading activities since listing through the
establishmentofaGeneralReserve.

Duringtheperiod,$727,113,representingtradingprofitsto30June2009lessdividendspaid,was
transferredtotheGeneralReservefromAccumulatedLosses.

82

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

24)RESERVES(continued)

AccumulatedlossesincurredpriortolistingoftheCompanyandcommencementoftradingactivities
arosefromthefollowingtransactions:

(a) impairmentlossesincurredonsharesissuedtovendorsofTalbotOlivierBusinessAssets,Brett
DaviesLawyersBusinessAssetsandLawCentralCoPtyLtdshareholderson29August2006;and

(b) Share based payments expenses for shares issued at a deemed value of 50 cents per share to
directorsandsupporterson29August2006and28February2007.

83

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

25) CASHFLOWRECONCILIATION

a) Reconciliationofnetprofitaftertaxtonetcashflowsfromoperations
Netprofit
Adjustmentsfor:
Dividendsreceivedasshares(DRP)
Depreciationandamortisationexpenses
Impairmentlosses
Sharebasedpaymentsexpense

Changesinassetsandliabilities:
(Increase)/decreaseintradeandotherreceivables
(Increase)/decreaseinworkinprogress
(Increase)/decreaseinnetdeferredtaxassets
(Increase)/decreaseinprepayments
(Increase)/decreaseinavailableforsaleassets
Increase/(decrease)intradeandotherpayables
Increase/(decrease)inincometaxpayable
Increase/(decrease)inprovisions
Netcashfrom/(usedin)operatingactivities

b)

CONSOLIDATED
2010
2009
$
$

853,494
593,875

(34)
(41)
343,759
189,496

450,000
19,243
14,838

(1,860,722)
(2,245,095)
16,858
(285,860)
363,058
17,313
95,701
(334,753)
35
(153)
1,348,935
650,950
20,513
(811,261)
247,321
107,946
1,448,161
(1,652,745)

Noncashfinancingandinvestingactivities
Settlementofsubsidiarypurchasewithshares

760,000

26) RELATEDPARTIES
a) Subsidiaries
TheconsolidatedfinancialstatementsincludethefinancialstatementsofIntegratedLegalHoldings
Limitedandthesubsidiarieslistedinthefollowingtable:

Name
ArgyleLawyersPtyLtd
TaxLawyersAustraliaPtyLtd
TalbotOlivierPtyLtd
LawCentralCoPtyLtd

Countryof
Incorporation
Australia
Australia
Australia
Australia

%EQUITYINTEREST
2010
2009
100%
100%
100%
100%
100%
100%
100%
100%

INVESTMENT
2010
2009
2
2
1
1
1
1
712,884
712,884
712,888
712,888

b) Ultimateparent
IntegratedLegalHoldingsLimitedistheultimateAustralianparententityandtheultimateparentof
theGroup.

84

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

c) Keymanagementpersonnel
DetailsrelatingtoKMP,includingremunerationpaid,areincludedinnote27.

d) Transactionswithrelatedparties
The following table provides the total amount of transactions that were entered into with related
partiesfortherelevantfinancialyear:

RelatedParty
CONSOLIDATED
Associates:
BrettDaviestradingasBrettDaviesLawyers
Reimbursementowingtopreacquisitionbusiness

DaviesServiceTrust
operatingleaserelatingtopremisesoccupiedby
BrettDaviesLawyersandLawCentral

MarkDouglasstradingasmdalawyers
Deferredconsiderationonacquisitionofbusiness(1)

PeterBobbinandAndrewIreland
Deferredconsiderationpayableonacquisitionof
TheArgylePartnershipLawyers(2)

2010
2009

Other
Transactions
withRelated
Parties
$

Purchases
from
Related
Parties
$

Salesto
Related
Parties
$

550

170,635
116,282

200,000

111,607

2009

(1)Deferredconsiderationaccruedinthe2009financialyearwaspaidinthe2010financialyear.
(2)Deferredconsiderationwasaccruedateachreportingdateandispayableinthe2011financialyear.

85,837

2010
2009

2010
2009

2010

Termsandconditionsoftransactionswithrelatedparties
Sales to and purchases from related parties are made in arms length transactions both at normal
marketpricesandonnormalcommercialterms.

Outstandingbalancesatyearendareunsecured,interestfreeandsettlementoccursincash.

27) KEYMANAGEMENTPERSONNEL

a) CompensationofKeyManagementPersonnel

Shorttermemployeebenefits
Postemploymentbenefits
Otherlongtermbenefits
Sharebasedpayment

2010
$
3,010,738
269,841
116,675
4,685
3,401,939

2009
$
929,277
189,650
51,923
2,753
1,173,603

85

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

27)KEYMANAGEMENTPERSONNEL(continued)

b) ShareholdingsofKeyManagementPersonnel
OrdinarysharesheldinIntegratedLegalHoldingsLimited:
Balance
1July2009

New
KMP(7)

Grantedas
Remuneration(6)

Balance
30June
2010

NetChange
Other

Directors

JDawkins

1,626,398

33,884

1,000,000

250,000

2,910,282

300,000

6,251

100,000

2,710,200

57,359

ATregonning
GFowler

Share
Placement&
SharePurchase
Plan

Dividend
Reinvestment
Plan

406,251

2,000,000

43,000

4,810,559

Executives

6,341

3,074,681

1,300,000

391,357

3,544,768

(1)

BTaylor

3,068,340

1,807,727

MDouglass

1,333,334

1,333,334

(4)
AIreland

1,696,428

40,000

1,736,428

157,562

100,000

7,820,478

293,073

690,698

25,929,854

(2)

PBobbin
(3)

(5)

BDavies

7,562,916

JMRudd
Total

45,684

102,500

40,000

573

150,000

17,178,081

3,029,762

40,000

301,313

4,690,000

(1)1,022,780sharesaresubjecttovoluntaryescrowrestrictionuntil16August2011.
(2)565,477sharesaresubjecttovoluntaryescrowrestrictionuntil4November2010and565,476sharesaresubjecttovoluntaryescrow
restrictionuntil4November2011.
(3)888,889sharesaresubjecttovoluntaryescrowrestrictionuntil4November2010
(4)565,476sharesaresubjecttovoluntaryescrowrestrictionuntil4November2010and565,476sharesaresubjecttovoluntaryescrow
restrictionuntil4November2011.
(5)2,518,472sharesaresubjecttovoluntaryescrowrestrictionuntil16August2011.
(6)AcquiredundertheDeferredEmployeeSharePlan(note28).
(7)MDouglassandAIrelandbecomeKMPsfrom1July2009.

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) 1,696,429 shares were acquired as vendor of The Argyle Partnership Lawyers; the remaining 111,298 shares were acquired on
marketbyMrBobbin.
(3)1,696,429sharesaresubjectto36monthvoluntaryescrowrestrictionfrom4November2008.
(4)AcquiredundertheDeferredEmployeeSharePlan(note28).

86

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

27)KEYMANAGEMENTPERSONNEL(continued)

c) OthertransactionswithKeyManagementPersonnelandtheirrelatedparties

LeaseofBusinessPremises
BrettDaviesLawyersandLawCentralCoPtyLtdsharebusinesspremisesat201AdelaideTerrace,
Perth.ThesepremisesareleasedfromTheDaviesServiceTrust,anentitythatiscontrolledbyMr
Davies,ManagingPrincipalofBrettDaviesLawyers.Monthlyleaserentalsforeachoftheseentities
havebeencalculatedatcommercialmarketrates.

AmountsrecognisedatthereportingdateinrelationtoothertransactionswithKMP:

Revenueandexpenses
Rentpaid

2010
$

170,635
170,635

2009
$

116,282
116,282

LoanstoKeyManagementPersonnel
Underthetermsofhisemploymentcontract,MrFowler(ManagingDirector)wasprovidedwithan
interestfreeloanof$189,036pertainingtothetaxliabilityofsharesintheCompanyissuedonhis
appointmentinApril2008.Thetermsoftheloanareasfollows:

theloanwillbeforgivenifMrFowlerremainsemployedbytheCompanyforatleast3
yearsfromthedateofcommencementofemployment;
50%oftheloanwillbewaivedifMrFowlerterminateshisemploymentwithin23years;
and
0%oftheloanwillbewaivedifMrFowlerterminateshisemploymentwithin2years.

TheCompanywillmeetanyFBTobligationsarisingfromthistransaction.

ThisloanhasbeenassessedasprepaidemployeebenefitsinaccordancewithAASB119Employee
Benefits.Amortisationexpenseof$107,122(2009:$50,408)hasbeenrecognisedinthestatement
ofcomprehensiveincomeinthelineitemsalariesandemployeebenefitsexpenses.

87

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

28) SHAREBASEDPAYMENTPLANS
a) Recognisedsharebasedpaymentexpenses
Theexpenserecognisedforemployeeservicesreceivedduringtheyearisshowninthetablebelow:

Expensearisingfromequitysettledsharebasedpaymenttransactions

CONSOLIDATED
2010
2009
$
$
19,243
14,838

The sharebased payment plans are described below. There have been no cancellations or
modificationstoanyoftheplansduringtheyear.

c) 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.

88

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

28)SHAREBASEDPAYMENTPLANS(continued)

UndertheDESP,thefairvalueofthesharesissetatthemarketpriceofthesharesonthedateof
grant.

Whenaparticipantceasesemploymentpriortothevestingoftheirshares,thesharesareforfeited
in full or in part, depended 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.

d) SummaryofsharesgrantedunderTEESPandDESParrangements
The following table illustrates the number of and movements in shares granted during the period
undertheTEESPandtheDESP:

TEESP:
Openingbalanceasat1July2009
Grantedduringtheyear(1)
Transferredtodepartedemployeesduringtheyear(2)
Closingbalanceasat30June2010

DESP:
Openingbalanceasat1July2009
Grantedduringtheyear
Forfeitedduringtheyear(3)
Closingbalanceasat30June2010

CONSOLIDATED
2010
2009
No
No

255,842

(3,170)
252,672

255,842

255,842

331,667
40,000

371,667

398,334
(66,667)
331,667

(1)SharesgrantedundertheTEESParepurchasedonmarketatgrantdateandimmediatelytransferredtotheemployee.
(2)Sharesaretransferredoutofanemployeetrustintotheemployeesnameonterminationofemployment.
(3)SharesforfeitedareheldintrustwithnilvaluerecognisedbytheGroup.

e) Weightedaverageremainingcontractuallife
Theweightedaverageremainingcontractuallifeasat30June2010forthesharesissuedunderthe
DESPis1.23years(2009:2.13years).

f) Weightedaveragefairvalue
Asat30June2010,theweightedaveragefairvalueofsharesgrantedundertheDESPwas15.5cents
(2009:15.8cents).

89

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

29) BUSINESSCOMBINATIONS

AcquisitionofArgyleLawyers
On4November2008,IntegratedLegalHoldingsLimited,throughitswhollyownedsubsidiary,Argyle
LawyersPtyLtd,acquiredthelegalpracticeofTheArgylePartnership.Thetransactioniseffective
from1November2008.

Sincetheendofthepreviousfinancialyear,thefinancialperformanceoftheacquiredbusinesshas
exceededexpectationsandtheamountpayableasdeferredconsiderationinrelationtothebusiness
combinationhasincreasedby$98,337.Thischangeinestimatehasincreasedthetotalacquisition
cost,resultinginacorrespondingincreaseingoodwill.

Forfulldetailsofthebusinesscombinationaffected,pleaserefertotheannualreportfortheyear
ended30June2009.

30) EXPENDITURECOMMITMENTS

i) Leasingcommitments

OperatingleasecommitmentsGroupaslessee
TheGrouphasenteredintooperatingleasesfortherentalofofficespaceatitsvariouscommercial
premises.Thesenoncancellableleaseshaveremainingtermsofbetween2to8years.Theleases
haverenewaloptions.Renewalsareattheoptionofthespecificentitythatholdsthelease.

Futureminimumrentalspayableundernoncancellableoperatingleasesasat30June2010areas
follows:

Withinoneyear
Afteroneyearbutnotmorethanfiveyears
Aftermorethanfiveyears
Totalminimumleasepayments

CONSOLIDATED
2010
2009
$
$
1,973,067
1,924,734
5,791,879
6,537,841
3,133,815
4,254,879
10,898,761
12,717,454

FinanceleaseandhirepurchasecommitmentsGroupaslessee
TheGrouphasfinanceleasesandhirepurchasecontractsforvariousitemsofplantandequipment
withacarryingamountof$458,625(2009:$97,367).Thesecontractsexpirewithin1to4years.The
leaseshavetermsofrenewalandpurchaseoptions.Renewalsareattheoptionofthespecificentity
thatholdsthelease.

Withinoneyear
Afteroneyearbutnotmorethanfiveyears
Totalminimumleasepayments
Lessamountsrepresentingfinancecharges
Presentvalueofminimumleasepayments

CONSOLIDATED
2010
2009
$
$
215,919
78,528
268,187
78,212
484,106
156,740
(46,382)
(20,451)
437,724
136,289

90

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

30)EXPENDITURECOMMITMENTS(continued)

Includedinthefinancialstatementsas:
Currentinterestbearingloansandborrowings(note19)
Noncurrentinterestbearingloansandborrowings(note19)
Totalinterestbearingloansandborrowings

CONSOLIDATED
2010
2009
$
$

176,811
72,734
260,913
63,555
437,724
136,289

ii) Plantandequipmentrentalcommitments
TheGrouphascontractualobligationsfortherentalofplantandequipment.Therentalagreements
expirewithin1and3yearsandhavepurchaseoptionsonexpiry.Rentalcommitmentscontracted
foratreportingdatebutnotrecognisedasliabilitiesareasfollows:

Withinoneyear
Afteroneyearbutnotmorethanfiveyears
Aftermorethanfiveyears
Totalminimumrentalpayments

CONSOLIDATED
2010
2009
$
$
63,142
107,345
11,138
74,280

74,280
181,625

CONSOLIDATED
2010
2009
$
$

4,315,079
6,694,457

11,009,536

iii) Remunerationcommitments

Commitmentsforthepaymentofsalariesandotherremunerationunderlong
termemploymentcontractsinexistenceatthereportingdatebutnot
recognisedasliabilities,payable:
Withinoneyear
Afteroneyearbutnotmorethanfiveyears
Aftermorethanfiveyears

4,440,335
10,442,163

14,882,498

Amounts disclosed as remuneration commitments include commitments arising from the service
contractsofdirectorsandexecutivesreferredtointheRemunerationReportoftheDirectorsReport
that are not recognised as liabilities and are not included in the compensation of KMP for the
currentperiod.

91

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

NotestotheFinancialStatements(continued)
FORTHEYEARENDED30JUNE2010

31) 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.

ThestatementofcomprehensiveincomeandstatementoffinancialpositionoftheGrouprepresent
thefinancialperformanceandpositionoftheentitiesthataremembersoftheClosedGroup.

32) AUDITORSREMUNERATION
TheauditorofIntegratedLegalHoldingsLimitedisErnst&Young.

AmountsreceivedordueandreceivablebyErnst&Young(Australia)for:

anauditorreviewofthefinancialreportofthecompany
otherservicesinrelationtothecompany
o Taxcompliance
o Taxationservices

AmountsreceivedordueandreceivablebynonErnst&Young(Australia)firmsfor:

otherservicesinrelationtothecompany
o Specialauditsrequiredbyregulators
o Taxationservices

CONSOLIDATED
2010
2009
$
$

136,397
243,161

31,453
18,813
5,500
7,737
173,350
269,711

22,727
17,838

1,366
22,727
19,204
196,077
288,915

33) EVENTSAFTERREPORTINGDATE
On 12 August 2010, the Directors declared a fully franked final dividend with respect to the year
ended30June2010of0.50centspershare,witharecorddateof15October2010andapayment
dateof5November2010.Thetotalamountofthedividendis$432,423.

92

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

DirectorsDeclaration

InaccordancewitharesolutionofthedirectorsofIntegratedLegalHoldingsLimited,Istatethat:

1. Intheopinionofthedirectors:

a. Thefinancialstatements,notesandtheadditionaldisclosuresincludedinthedirectors
report designated as audited, of the consolidated entity are in accordance with the
CorporationsAct2001,including:

i. givingatrueandfairviewoftheconsolidatedentitysfinancialpositionasat30
June2010andofitsperformancefortheyearendedonthatdate;and

ii. complyingwithAccountingStandardsandCorporationsRegulations2001;and

b. the financial statements and notes also comply with International Financial Reporting
Standardsasdisclosedinnote2(a).

c. therearereasonablegroundstobelievethattheconsolidatedentitywillbeabletopay
itsdebtsasandwhentheybecomedueandpayable.

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
ended30June2010.

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

Sydney,27September2010

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 statement of financial position as at 30 June 2010, and the statement of comprehensive income,
statement of changes in equity and statement of cash flows 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, 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:049

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 the consolidated entity at 30 June
2010 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 8 to 20 of the directors report for the year
ended 30 June 2010. 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
2010, complies with section 300A of the Corporations Act 2001.

Ernst & Young

G H Meyerowitz
Partner
Perth
27 September 2010

GHM:NR:ILH:049

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194

ASXAdditionalInformation

AdditionalinformationrequiredbytheAustralianStockExchangeLimitedandnotshownelsewhere
inthisreportisasfollows.Theinformationiscurrentasat31August2010.

a) Distributionofequitysecurities
Ordinarysharecapital
86,511,333fullypaidordinarysharesareheldby866individualshareholders.

Allissuedordinarysharescarryonevotepershareandcarrytherightstodividends.

Thenumbersofshareholdersbysizeofholdingare:

11,000
9
1,0015000
123
5,00110,000
187
10,001100,000
455
100,001andover
92

866
Holdinglessthanamarketableparcel
0

b) Substantialshareholders
Ordinaryshareholders
FullyPaid

Number
Percentage
BKDavies
7,820,478
9.07
BJMaguire
5,820,552
6.75
GHGFowler
4,810,559
5.58

18,451,589
21.40

c) 20largestholdersofquotedequitysecurities
Ordinaryshareholders

LegalAustraliaPtyLtd<DaviesSuperFundA/c>
BJMaguire
JPOlivier
BobbinEdPtyLtd
GHGFowler
YearsPtyLtd<KordicFamilyNo1A/c>
RBCDexiaInvestorServicesAustraliaNomineesPtyLimited<BKCUSTA/c>
DR&GSands<SandsFamilyA/cNo2>
ACatelli&GPorter<Catelli/PorterSuperfundA/c>
GH&LPFowler<FowlerSuperFundA/c>
SP&EMSkinner<SkinnerSuperFundA/c>
AnglerfishPtyLtd<TheHemeryFamilyA/c>
BrendalisPtyLtd<TaylorFamilyA/c>
AloaPtyLimited
ABNAmroClearingSydneyNomineesPtyLtd<CustodianA/c>
JSDawkins
BBWhitford
MC&AJDouglass<DouglassSuperFundA/c>
JS&MADawkins<DawkinsSuperfundA/c>
AustralianShareFinancePtyLtd<BradleyMaguireSuperFundA/c>

FullyPaid
Number
7,812,821
4,670,552
3,068,340
2,881,772
2,724,996
2,645,465
2,500,000
2,268,340
2,191,672
2,070,250
2,055,000
2,000,349
2,000,349
1,736,428
1,677,310
1,660,282
1,500,000
1,333,334
1,250,000
1,150,000

Percentage
9.06
5.42
3.56
3.34
3.16
3.07
2.90
2.63
2.54
2.40
2.38
2.32
2.32
2.01
1.94
1.92
1.74
1.55
1.45
1.33

49,197,260

57.04

96