044.ASX IAW Feb 27 2009 11.45 Half Year Report and Accounts

8/9/2019 044.ASX IAW Feb 27 2009 11.45 Half Year Report and Accounts

1/27

INTEGRATEDLEGALHOLDINGSLIMITED

ACN120394194

ASXAppendix4D

RESULTSFORANNOUNCEMENTTOTHEMARKET

Currentreportingperiod: Halfyearended31December2008

Previouscorrespondingperiod: Halfyearended31December2007

EARNINGS

Percentage

change

UP(+)/DOWN()

Amount

$A

Revenuefromordinaryactivities 68% 7,593,136

Profitfromordinaryactivitiesaftertaxattributable

tomembers

0.1% 896,703

Netprofitfortheperiodattributabletomembers 0.1% 896,703

DIVIDENDS

Amount

pershare

Frankedamount

pershareat30%

2008FinalDividendPaid 2.2cents 2.2cents

Correspondingperiod

NETTANGIBLEASSETBACKING

31Dec2008

31Dec2007

Nettangibleassetbackingpersecurity 7.36 10.02

Thepreviouscorrespondingperiodrelatestotheinitial4.5monthstradingoftheCompany

under public listing. The Company acquired the foundation businesses of Talbot Olivier,

BrettDaviesLawyersandLawCentralCoPtyLtdatthetimeofpubliclisting. TheDirectors

consider this initial trading period to be an abnormal period of trading reflecting the

integrationofacquiredbusinessesandestablishmentasalistedcompany.

Consolidated operating revenues of $7,593,136 were 68% higher than the previous

corresponding halfyear which reported $4,510,136 operating revenues. Revenue from

ordinary activities increased due to a combination of organic growth and acquisitions of

newmemberfirms.

Forthehalfyearended31December2008,theconsolidatedentitygeneratedanetprofit

after tax of $896,703 (12% of operating revenues) compared to the halfyear ended 31

December2007of$895,412(20%ofoperatingrevenues).

This result was in line with expectations, the Directors having previously advised that the

Company would require an element of investment in the 2008/09 year to ensure that

memberfirmsarebestplaced to take advantage of futuregrowthopportunitiesavailabletothem.


2/27


ACN120394194

ASXAppendix4D

RESULTSFORANNOUNCEMENTTOTHEMARKET

Inparticular,theCompanyscorporateexpenseshavenecessarilygrowninto2008/09. The

Company has made an important investment in senior management of the Company,

whomtheDirectorsbelievewillbeabletomanagetheCompanytoachievestronggrowth

intothefuture.

TheCompanynowhasafulltimeManagingDirectorbasedinSydney(effectiveMay2008)

as well as a Chief Financial Officer based in Perth (effective September 2007). Whilst we

anticipateaverysmallcorporateofficefortheCompanygoingforward,theeffectofthese

appointmentsmateriallyincreasesyearonyearcosts.

The Directors consider the current period to reflect a more normalised operating

profitabilityandmargin.

Earningspershare(weightedaverage)fortheperiodwere1.38centspershare,compared

totheyearended30June2008of2.66cents(31December2007halfyear:1.57cents).

The Company has maintained a strong balance sheet position, with cash holdings at 31

December 2008 of $2.25m ($5.63m at 30 June 2008), and a net tangible asset backing of

7.36centspershare(comparedwith11.71centspershareat30June2008).

DuringtheperiodtheCompanypaida2.2centspersharedividendwithrespecttotheyear

ended30June2008.

Further,theCompanyhasgrownstronglyandselectivelyexpandedduringtheperiod,with

theannouncementoftheacquisitionofitsfirsteastcoastlawfirm,TheArgylePartnership,

effective 1 November 2008, with annual revenue of approximately $6.5m. The business

wasacquiredthroughacombinationofcashandshares.

Duringthehalfyear,theGroupgainedcontrolofthefollowingentity:

EntityName Datecontrolgained

TheArgylePartnership Lawyers 1November2008

Thegroupdoesnothaveanyinterestsinassociatesoutsidethegroup,nordoesithaveany

interestinjointventures.


3/27


ACN120

394

194

(ASX:IAW)

HalfYearFinancialReport

forthehalfyearended31December2008


4/27


FINANCIALREPORTFORTHEHALF-YEARENDED

31DECEMBER2008

ACN120394194

Contents

Corporateinformation.............................................................................................................1

Directorsreport......................................................................................................................2

Consolidatedbalancesheet.....................................................................................................5

Consolidatedincomestatement..............................................................................................6

Consolidatedcashflowstatement..........................................................................................7

Consolidatedstatementofchangesinequity.........................................................................8

Notesto

and

forming

part

of

the

financial

report

...................................................................

9

Directorsdeclaration............................................................................................................20

Auditorsindependencedeclaration.....................................................................................21

Independentreviewreport....................................................................................................22


5/27



31DECEMBER2008

ACN120394194

CorporateInformation

1

ABN20

120

394

194

Directors

TheHonJohnDawkins,Chairman

AnneTregonning,NonexecutiveDirector

GraemeFowler,ManagingDirector

CompanySecretary

JeanMarieRudd

Registeredoffice

GroundFloor

201AdelaideTerrace

Perth WA 6000

Principalplaceofbusiness

HeadOffice

Level22

1MarketStreet

Sydney NSW 2000

Tel:(02)82636601

Share

Register

ComputershareInvestorServicesPtyLimited

Level2,45StGeorgesTerrace

Perth WA6000

Tel: (08)93232000

IntegratedLegalHoldingsLimitedsharesarelistedontheAustralianStockExchange.

Solicitors

TalbotOliver

Level8,WesfarmersHouse

40

The

Esplanade

Perth WA 6000

Bankers

NationalAustraliaBankLimited

50StGeorgesTerrace

Perth WA 6000

Auditors

Ernst&Young

11MountsBayRoad

Perth

WA

6000


6/27



31DECEMBER2008

ACN120394194

DirectorsReport

2

The

directors

of

Integrated

Legal

Holdings

Limited

(the

Company)

submit

the

halfyear

financial

reportforthehalfyearended31December2008.

DIRECTORS

ThenamesoftheCompanysdirectorsinofficeduringthehalfyearanduntilthedateofthisreport

aresetoutbelow. Directorswereinofficeforthisentireperiodunlessotherwisestated.

TheHonJohnDawkinsAO(NonexecutiveChairman)

AnneTregonning(NonexecutiveDirector)

GraemeFowler(ManagingDirector)

REVIEWAND

RESULTS

OF

OPERATIONS

The previous corresponding period relates to the initial 4.5 months trading of the Company under

public listing. The Company acquired the foundation businesses of Talbot Olivier, Brett Davies

LawyersandLawCentralCoPtyLtd atthetime of public listing. The Directorsconsiderthis initial

tradingperiodtobeanabnormalperiodoftradingreflectingtheintegrationofacquiredbusinesses

andestablishmentasalistedcompany.

Consolidated operating revenues of $7,593,136 were 68% higher than the previous corresponding

halfyearwhichreported$4,510,136operatingrevenues. Revenuefromordinaryactivitiesincreased

duetoacombinationoforganicgrowthandacquisitionsofnewmemberfirms.

Forthehalfyearended31December2008,theconsolidatedentitygeneratedanetprofitaftertax

of $896,703 (12% of operating revenues) compared to the halfyear ended 31 December 2007 of

$895,412(20%ofoperatingrevenues).

Thisresultwas in linewithexpectations,theDirectorshavingpreviouslyadvisedthattheCompany

wouldrequireanelementofinvestmentinthe2008/09yeartoensurethatmemberfirmsarebest

placedtotakeadvantageoffuturegrowthopportunitiesavailabletothem.

In particular, the Companys corporate expenses have necessarily grown into 2008/09. The

Company has made an important investment in senior management of the Company, whom the

Directors

believe

will

be

able

to

manage

the

Company

to

achieve

strong

growth

into

the

future.

TheCompanynowhasafulltimeManagingDirectorbasedinSydney(effectiveMay2008)aswellas

aChiefFinancialOfficerbasedinPerth(effectiveSeptember2007). Whilstweanticipateaverysmall

corporate office for the Company going forward, the effect of these appointments materially

increasesyearonyearcosts.

The Directors consider the current period to reflect a more normalised operating profitability and

margin.

Earnings per share (weighted average) for the period were 1.38 cents per share, compared to the

yearended30June2008of2.66cents(31December2007halfyear:1.57cents).


7/27



31DECEMBER2008

ACN120394194

DirectorsReport

3

TheCompany

has

maintained

a

strong

balance

sheet

position,

with

cash

holdings

at

31

December

2008of$2.25m($5.63mat30June2008),andanettangibleassetbackingof7.36centspershare

(comparedwith11.71centspershareat30June2008).

DuringtheperiodtheCompanypaida2.2centspersharedividendwithrespecttotheyearended

30June2008.

Further, the Company has grown strongly and selectively expanded during the period, with the

announcementoftheacquisitionofitsfirsteastcoastlawfirm,TheArgylePartnership(nowtrading

asArgyleLawyers),effective1November2008,withannualrevenueofapproximately$6.5m. The

businesswasacquiredthroughacombinationofcashandshares.

ArgyleLawyersisahighlyregardedcommerciallawfirmwithofficesinSydneyandMelbourne. This

strategically important acquisition for the Company is the first of its east coast expansion having

listedinAugust2007withPerthbasedfoundationbusinesses.

TheDirectorsbelievethattheeffectofthetransactionwillbemateriallypositiveintermsofearnings

pershare,andwillenhancetheCompanysgrowthprospects. Thefullrevenueandprofitimpactof

theacquisitionwillbeachievedfromthe2009/10financialyear.

Operatingcashflowsfortheperiodwere$0.36m,comparedwith$1.12mforthefullyear2007/08

(firsthalf2007/08$0.47m).

Operatingcashflowsareadverselyaffectedbynewfirmacquisitions,asfundsfromoperationsare

investedinthebuildupofworkingcapital(debtorsandworkinprogress)postacquisitiontonormal

levels. The Company does not acquire debtors and work in progress as part of the acquisition.

Duringtheperiod,operatingcashflowswereadverselyaffectedbytheacquisitionofArgyleLawyers.

TheDirectorsarepleasedwiththeGroupsperformanceandthesignificantprogressthathasbeen

madeduringtheperiod.

TheDirectorsareoftheviewthattheCompany iswellplacedtocontinuegrowthbothorganically

and by acquisition by capitalising on the significant opportunity afforded by prevailing industry

issues,

including

succession

planning

and

availability

of

capital

to

fund

growth.

Long

term

competitiveadvantagecanbeachievedbytheCompanyinsupportingmemberfirmsindeveloping

scaletounderpinfuturegrowthandprofitability.


8/27



31DECEMBER2008

ACN120394194

DirectorsReport

4

AUDITORSINDEPENDENCE

DECLARATION

A copy of the auditors independence declaration in relation to the review for the halfyear is

providedwiththisreportonpage21.

Signedinaccordancewitharesolutionofthedirectors.

GFowler

ManagingDirector

Sydney,27February2009


9/27



31DECEMBER2008

ACN120394194

BalanceSheet

TheaboveconsolidatedBalanceSheetshouldbereadinconjunctionwiththeaccompanyingnotes.

5

Consolidated Consolidated

Note

Asat

31Dec2008

Asat

30June2008

$ $

ASSETS

CurrentAssets

Cashandcashequivalents 5 2,248,034 5,626,766

Tradeandotherreceivables 3,500,372 2,392,625

Prepayments 6 341,102 258,893

Workinprogress 1,463,436 1,084,352

TotalCurrent

Assets

7,552,944

9,362,636

NoncurrentAssets

Availableforsalefinancialassets 2,374 2,524

Plantandequipment 692,963 192,836

Goodwill 7 8,846,343 6,330,233

Intangibleassets 8 118,800 136,620

Deferredtaxassets 429,869 410,647

Prepayments 6 100,822

TotalNoncurrentAssets 10,191,171 7,072,860

TOTALASSETS 17,744,115 16,435,496

LIABILITIES

CurrentLiabilities

Tradeandotherpayables 1,387,977 1,081,009

Interestbearingloansandborrowings 137,481 169,764

Incometaxpayable 1,321,769 968,272

Provisions 455,174 173,111

TotalCurrentLiabilities 3,302,401 2,392,156

NoncurrentLiabilities


Provisions

158,245

119,986Otherliabilities 9 191,631

TotalNoncurrentLiabilities 464,089 138,694

TOTALLIABILITIES 3,766,490 2,530,850

NETASSETS 13,977,625 13,904,646

EQUITY

Contributedequity 10 30,317,493 29,729,975

Accumulatedlosses (16,338,206) (15,823,844)

Reserves (1,662) (1,485)

TOTALEQUITY 13,977,625 13,904,646


10/27



31DECEMBER2008

ACN120394194

IncomeStatement

TheaboveconsolidatedIncomeStatementshouldbereadinconjunctionwiththeaccompanying

notes.

6


Note

Halfyear

ended

31Dec2008

Halfyear

ended

31Dec2007

$ $

Professionalfeesrevenue 7,203,303 4,269,939

Interestrevenue 139,068 237,830

Otherrevenue 4 250,765 2,367

Totalrevenue 7,593,136 4,510,136

Occupancyexpenses

644,543

233,783

Salariesandemployeebenefitsexpenses 4,186,881 1,926,317

Depreciationandamortisationexpenses 74,235 48,831

Impairmentlosses 215,826

Officeexpenses 1,146,455 594,759

Advertisingandmarketingexpenses 149,086 46,814

Otherexpenses 84,487 58,124

Interestexpenses 12,477 11,166

Totalexpenses 6,298,164 3,135,620

Profitbeforeincometax 1,294,972 1,374,516

Incometaxexpense 398,269 479,104

Profitafter

income

tax

896,703

895,412

Netprofitfortheperiod 896,703 895,412

Basicanddilutedearningspershareforprofit

attributabletotheordinaryequityholderoftheparent 1.38 1.57


11/27



31DECEMBER2008

ACN120394194

CashFlowStatement

TheaboveconsolidatedCashFlowStatementshouldbereadinconjunctionwiththeaccompanying

notes.

7


Note

Halfyear

ended

31Dec2008

Halfyear

ended

31Dec2007

$ $

Cashflowsfromoperatingactivities

Receiptsfromcustomers 6,411,856 2,556,733

Paymentstosuppliersandemployees (6,397,647) (2,299,115)

Interestreceived 140,016 212,304

Rentreceived 108,597 818

Sundryincome

103,141

1,549

Interestandothercostsoffinancepaid (1,277) (5,220)

Netcashflowsfromoperatingactivities 364,686 467,069

Cashflowsfrominvestingactivities

Purchaseofplantandequipment (117,749) (9,950)

Proceedsfromthedisposalofplantandequipment 1,353 1,000

Paymentforavailableforsaleinvestments (3,982)

Paymentforacquisitionofbusinessesnetofcash

acquired (2,137,552) (6,652,695)

Netcashflowsusedininvestingactivities (2,253,948) (6,665,627)

Cashflowsfromfinancingactivities

Proceedsfromissueofshares 3,628,130

Paymentsforcapitalraisingcosts (944,763)

Proceedsfromborrowings 81,484

Repaymentsofborrowings (159,889) (18,175)

Paymentforthesettlementofliabilityassumedon

acquisitionofLawCentralCoPtyLtd (214,665)

Paymentofdividends (1,411,065)

Netcashflows(usedin)/fromfinancingactivities (1,489,470) 2,450,527

Netdecrease

in

cash

held

(3,378,732)

(3,748,031)

Cashandcashequivalentsatthebeginningofthe

period 5,626,766 8,788,735

Cashandcashequivalentsattheendoftheperiod 2,248,034 5,040,704


12/27



31DECEMBER2008

ACN120394194

StatementofChangesinEquity

TheaboveStatementofChangesinEquityshouldbereadinconjunctionwiththeaccompanying

notes.

8

CONSOLIDATED

Issued

Capital

Accumulated

Losses

Net

Unrealised

Gains

Reserve

Total

Equity

$ $ $ $

At1July2007 17,368,352 (17,368,147) 205

Netfairvaluelossesonavailablefor

saleinvestments (99) (99)

Totalincomeandexpenseforthe

periodrecogniseddirectlyinequity (99) (99)

Profitfortheperiod 895,412 895,412


period 895,412 (99) 895,313

Equitytransactions

Sharesissued 13,045,708 13,045,708

Transactioncostsonshareissue (1,514,575) (1,514,575)

Incometaxonitemstakendirectlytoor

transferredfromequity 423,960 423,960

Balanceasat31December2007 29,323,445 (16,472,735) (99) 12,850,611

CONSOLIDATED

Issued

Capital

Accumulated

Losses

Net

Unrealised

Gains

Reserve

Total

Equity

$ $ $ $

At1July2008 29,729,975 (15,823,844) (1,485) 13,904,646

Netfairvaluelossesonavailablefor

saleinvestments (177) (177)


periodrecogniseddirectlyinequity (177) (177)

Profitfor

the

period

896,703

896,703


period 896,703 (177) 896,526

Equitytransactions

Dividendspaid (1,411,065) (1,411,065)

Sharesissued 580,000 580,000

Sharebasedpayments 7,518 7,518

Balanceasat31December2008 30,317,493 (16,338,206) (1,662) 13,977,625


13/27



31DECEMBER2008

ACN120394194

NotestoandformingpartoftheFinancialReport

9

1)

CORPORATEINFORMATION

ThegeneralpurposecondensedfinancialreportofIntegratedLegalHoldingsLimited(theCompany)

forthehalfyearended31December2008wasauthorisedforissueinaccordancewitharesolution

oftheDirectorson26February2009. IntegratedLegalHoldingsLimitedisacompanyincorporated

inAustraliaandlimitedbyshares,whicharepubliclytradedontheAustralianStockExchange(ASX).

2)

SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES

The halfyear financial report does not include all notes of the type normally included within the

annualfinancialreportandthereforecannotbeexpectedtoprovideasfullanunderstandingofthe

financial performance, financial position and financing and investing activities of the consolidated

entityas

the

full

financial

report.

Itisrecommendedthatthehalfyearfinancialreportbereadinconjunctionwiththeannualreport

fortheyearended30June2008andconsideredtogetherwithanypublicannouncementsmadeby

IntegratedLegalHoldingsLimitedanditscontrolledentities(theGroup)duringthehalfyearended

31 December 2008 inaccordance with the continuousdisclosure obligations undertheASXListing

Rules.

a)

Basisofpreparation

This general purpose condensed financial report for the halfyear ended 31 December 2008 has

been prepared in accordance with AASB 134 InterimFinancialReporting and theCorporationsAct

2001.

Thehalfyearfinancialreport isprepared inAustraliandollarsandonahistoricalcostbasis,except

foravailableforsaleinvestments,whichhavebeenmeasuredatfairvalue.

For the purposes of preparing the halfyear financial report, the halfyear has been treated as a

discretereportingperiod.

b) Significantaccountingpolicies

Apart from the adoption of new accounting policies noted in note 2(d) below, the accounting

policies adopted are consistent with those disclosed in the annual financial report for the period

ended

30

June

2008

which

are

in

accordance

with

accounting

standards

in

place

at

that

date.

The

adoption of new and amending standards and interpretations mandatory for annual periods

beginning on or after 1 July 2008 does not have a significant impact on the financial performance

andpositionoftheGroup.

c)

Basisofconsolidation

The halfyear consolidated financial statements comprise the financial statements of Integrated

LegalHoldingsLimitedanditssubsidiariesasat31December2008.

Subsidiariesareallthoseentities(includingspecialpurposeentities)overwhichtheGrouphasthe

power to govern the financial and operating policies so as to obtain benefits from their activities.

Theexistence and effect of potential voting rights thatarecurrently exercisable orconvertible are

consideredwhenassessingwhetheragroupcontrolsanotherentity.


14/27



31DECEMBER2008

ACN120394194


10

d)

Sharebased

payment

transactions

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

directorsof

the

Group.

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,over

the

period

in

which

the

performance

and/or

service

conditions

are

fulfilled

(the

vesting

period), ending on the date on which the relevant employees become fully entitled to the award

(thevestingdate).

Ateachsubsequentreportingdateuntilvesting,thecumulativechargetothe incomestatement is

theproductof:

i.

Thegrantdatefairvalueoftheaward;

ii. Thecurrentbestestimateofthenumberofawardsthatwillvest,taking intoaccountsuch

factorsasthe likelihoodofemployeeturnoverduringthevestingperiodandthe likelihood

ofnonmarketperformanceconditionsbeingmet;and

iii.

The

expired

portion

of

the

vesting

period.

The charge to the income statement for the period is the cumulative amount as calculated above

lesstheamountsalreadychargedinpreviousperiods. Thereisacorrespondingentrytoequity.

EquitysettledawardsgrantedbyIntegratedLegalHoldingsLimitedtoemployeesofsubsidiariesare

recognised in the parents separate financial statements as an additional investment in the

subsidiarywithacorrespondingcredittoequity. Asaresult,theexpenserecognisedbyIntegrated

Legal Holdings Limited in relation to equitysettled awards onlyrepresents the expense associated

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


15/27



31DECEMBER2008

ACN120394194


11

condition

is

considered

to

vest

irrespective

of

whether

or

not

that

market

condition

is

fulfilled,providedthatallotherconditionsaresatisfied.

Iftheterms of an equitysettledawardaremodified,asa minimum an expense isrecognisedas if

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

originalaward,asdescribedinthepreviousparagraph.

3)

SEGMENTINFORMATION

TheGroupsprimarysegmentreportingformatisbusinesssegmentsastheGroupsrisksandreturns

areaffectedpredominantlybydifferencesinlegalproductsandservicesperformed.

Theoperatingbusinessesareorganisedandmanagedseparatelyaccordingtothenatureofthelegal

productsandservicesprovided,witheachsegmentrepresentingastrategicbusinessunitthatoffers

differentlegalproductsandservesdifferentmarkets.

TheLegalServicesdivisionisanoperatoroflegalpracticesthroughoutAustralia.

TheInformationTechnologydivisionprovidesaninternetportaldesignedtoprovideeasyaccesstoa

rangeof legalandotherdocumentstothe legalprofessionandpublicalikeand informationabout

variousareasoflaw.


16/27



31DECEMBER2008

ACN120394194


12

Businesssegments

Thefollowingtablepresentsrevenueandprofitinformationforbusinesssegmentsforthehalfyears

ended31December2008and31December2007.

Halfyearended31December2008

Legal

Services

$

Information

Technology

$

Total

$

Revenue

Professionalfees 6,827,259 376,044 7,203,303

Otherrevenue 247,597 3,108 250,705

Intersegmentrevenue 7,074,856 379,152 7,454,008

Unallocatedrevenue

139,128

Totalconsolidatedrevenue 7,593,136

Result

Segmentresult 1,715,780 104,177 1,819,957

Unallocatedexpenses (457,006)

Profitbeforetaxandfinancecosts 1,362,951

Financecosts (67,979)

Profitbeforeincometax 1,294,972

Incometaxexpense (398,269)

Netprofitafterincometax 896,703

Halfyearended31December2007

Legal

Services

$

Information

Technology

$

Total

$

Revenue

Professionalfees 3,965,344 304,595 4,269,939

Otherrevenue 2,367 2,367

Intersegmentrevenue 3,967,711 304,595 4,272,306

Unallocatedrevenue 237,830

Totalconsolidatedrevenue 4,510,136

Result

Segmentresult 1,398,767 142,563 1,541,330

Unallocatedexpenses (135,222)

Profitbeforetaxandfinancecosts 1,406,108

Financecosts (31,592)

Profitbeforeincometax 1,374,516

Incometaxexpense (479,104)

Netprofitafterincometax 895,412


17/27



31DECEMBER2008

ACN120394194


13

4)

OTHERREVENUE


Halfyear

ended

31Dec2008

Halfyear

ended

31Dec2007

$ $

Compensationreceivable 139,000

Rentalrevenue 108,597 818

Sundryincome 3,108 1,549

Dividendsreceived 60

250,765

2,367

5)

CASHANDCASHEQUIVALENTS


At

31Dec2008

At

30Jun2008

$ $

Forthepurposesofthehalfyearcashflowstatement,cashand

cashequivalentsarecomprisedofthefollowing:

Cashatbankandinhand 2,248,034 941,045

Shortterm

deposits

4,685,721

2,248,034 5,626,766

6)

PREPAYMENTS


At

31Dec2008

At

30Jun2008

CURRENT $ $

UnsecuredLoanGFowler(1) 75,712

Otherprepayments

265,390

258,893

341,102 258,893

NONCURRENT

UnsecuredLoanGFowler(1) 100,822

100,822


18/27



31DECEMBER2008

ACN120394194


14

(1)

Underthe

terms

of

his

employment

contract,

Mr

Fowler

(Managing

Director)

was

provided

withaninterestfreeloanof$189,036pertainingtothetaxliabilityofsharesintheCompany

issuedonhisappointment.Thetermsoftheloanareasfollows:

the loanwillbeforgiven ifMrFowlerremainsemployedbytheCompanyforat least3

yearsfromthedateofcommencementofemployment;

50%oftheloanwillbewaivedifMrFowlerterminateshisemploymentwithin23years;

and

0%oftheloanwillbewaivedifMrFowlerterminateshisemploymentwithin2years.

TheCompanywillmeetanyFBTobligationsarisingfromthistransaction.

This loan has been assessed as prepaid employee benefits in accordance with AASB 119

EmployeeBenefits.

The

amortisation

of

the

balance

has

been

recognised

in

the

Income

Statementinthelineitemsalariesandemployeebenefitsexpenses.

7) GOODWILL

Consolidated Consolidated Consolidated

At

31Dec2008

At

30Jun2008

At

31Dec2007

$ $ $

Openingbalance 6,330,233

Additions(note12) 2,516,110 6,546,059 6,546,059

Impairment (215,826) (215,826)

Closingbalance 8,846,343 6,330,233 6,330,233

a) DescriptionoftheGroupsgoodwill

After initial recognition, goodwill acquired in a business combination is measured at cost less any

accumulated impairment losses. Goodwill isnotamortisedbut issubjectto impairmenttestingon

anannualbasisorwheneverthereisanindicationofimpairment.

8)

INTANGIBLEASSETS

Consolidated Consolidated Consolidated

At

31

Dec

2008

At

30

Jun

2008

At

31

Dec

2007

$ $ $

Openingbalance 136,620

Additions 163,254 163,254

AmortisationExpense (17,820) (26,634) (8,814)

Closingbalance 118,800 136,620 154,440

a)

DescriptionoftheGroupsotherintangibleassets

Otherintangiblesrepresentthevalueofleasedpremisesacquiredupontheacquisitionofthe legal

practiceofPeterMarkson19September2007andiscarriedatcostlessaccumulatedamortisation.

Thisintangible

asset

has

been

assessed

as

having

a

finite

life

and

is

amortised

using

the

straight

line

methodovertheremainingtermofthe lease. Theamortistionhasbeenrecognised inthe income

statementinthelineitemdepreciationandamortisationexpenses.


19/27



31DECEMBER2008

ACN120394194


15

9)

OTHERNON

CURRENT

LIABILITIES


At

31Dec2008

At

30Jun2008

$ $

Deferredconsiderationpayable(1) 79,526

Leaseincentiveobligation(2) 112,105

191,631

(1)

DeferredconsiderationpayableontheacquisitionofTheArgylePartnership Lawyers(refer

note12)

(2)

Operating lease incentives are recognised as a liability when received and subsequently

reducedbyallocating leasepaymentsbetweenrentalexpenseandreductionoftheliability

toensurerentalexpenseisrecognisedonastraightlinebasisovertheleaseterm. Nolease

paymentsweremadeforthehalfyearended31December2008.

10)

ISSUEDCAPITAL

a)

Ordinaryshares

Consolidated Consolidated Consolidated Consolidated

31Dec2008 30Jun2008 31Dec2008 30Jun2008

Shares Shares $ $

Fullypaidshares 67,681,177 63,538,320 30,264,538 29,729,975

Partlypaidshares(1) 398,334 7,518

68,079,511 63,538,320 30,272,056 29,729,975

(1) DeferredEmployeeSharePlan Informationrelatingtotheemployeeshareplan, including

detailsofsharesissuedundertheschemeissetoutinnote13.

b)

Movementsinordinarysharecapital

Consolidated Shares $

Openingbalance

at

1

July

2007

34,736,704

17,368,352

Issueofsharestosubscribersofinitialpublicofferingon

17August2007at50centspershare 24,833,320 12,416,660

IssueofsharestoshareholdersofLawCentralCoPtyLtd

atadeemedvalueof50centspershareaspartofthe

considerationfortheacquisitionofthecompany 1,258,096 629,048

Costsassociatedwiththecapitalraising (1,514,575)

Incometax

benefit

on

items

taken

directly

to

equity

capitalraisingcosts 423,960

Balanceasat31December2007 60,828,120 29,323,445


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31DECEMBER2008

ACN120394194


16

Consolidated

Shares

$

Openingbalanceasat1July2008 63,538,320 29,729,975

Issueofsharesat14centspershareon4November2008

tothevendorsofTheArgylePartnership Lawyers 4,142,857 580,000

IssueofsharesundertheDeferredEmployeeSharePlan

(refernote13) 398,334 7,518

Balanceasat31December2008 68,079,511 30,317,493

11)

CONTINGENTLIABILITIESANDCONTINGENTASSETS

Therearenocontingentliabilitiesorassetsasat31December2008.

12)

BUSINESSCOMBINATIONS

Acquisition

of

The

Argyle

Partnership

Lawyers

(provisional

calculation)

On4November2008,IntegratedLegalHoldingsLimited,throughitswhollyownedsubsidiary,Argyle

LawyersPtyLtd,acquiredthelegalpracticeofTheArgylePartnership Lawyers. Thetransactionis

effective from 1 November 2008. Since acquisition, the business commenced trading under the

name,ArgyleLawyers.

Theconsiderationfortheacquisitionwasacombinationofcashplus4,142,857shares issuedat14

cents per share (based on the quoted price of shares of Integrated Legal Holdings Limited at

completiondate)andissubjecttosignificantemploymentrestraintsandconditions. Partofthecash

component will be deferred until the end of the 2010 financial year and is subject to financial

performanceinthatyear. Thecashcomponentofthepurchaseconsiderationhasbeenfundedfrom

surpluscashreserves.

Accountingforthebusinessacquisitionremainsprovisionallydeterminedbecauseallcircumstances

andfactorsaffectingfairvaluesoftheidentifiablenetassetsacquiredhaveyettobefinalisedatthe

endoftheperiod.


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31DECEMBER2008

ACN120394194


17

Thefollowing

constitutes

the

provisional

calculation

of

the

consideration

given

and

the

fair

value

of

netassetsacquired:$

Consideration

Cash 2,050,000

Deferredcashconsideration 79,526

Directcostsrelatingtotheacquisition 87,552

Totalcashconsideration 2,217,078

Sharesissuedatfairvalue 580,000

Totalacquisitioncost 2,797,078

Fair

Value

$

Carrying

Amount

$Netassetsacquired

Assets

Plantandequipment 454,741 454,741

Prepayments 107,350 107,350

Securitybond 2,720 2,720

Netdeferredtaxasset 63,993

Totalassetsacquired 628,804 564,811

Liabilities

Provisionforemployeeentitlements 216,836 216,836


Totalliabilitiesacquired 347,836 347,836

Netassetsacquired 280,968 216,975

Goodwillonacquisition 2,516,110

Thefactorscontributingtogoodwillrecognisedrelatetothesynergiesexistingwithintheacquired

businessanditscombinedprofessionalworkforce.

Fromthedateofacquisition,ArgyleLawyershascontributed$19,701tothenetprofitaftertaxof

theGroup.

Asthefinancial informationofArgyleLawyerspriortoacquisitionwasnotprepared inaccordance

withAustralianAccountingStandardsandsignificantpostacquisitionrestructuringhasoccurred,itis

impracticable for the Group to disclose the total revenue and profit for the combined entity as

thoughthe

acquisition

had

taken

place

at

the

beginning

of

the

period.

$

Thecashoutflowonacquisitionisasfollows:

Netcashacquiredwiththebusiness

Cashpaid 2,137,552

Netconsolidatedcashoutflow 2,137,552


22/27



31DECEMBER2008

ACN120394194


18

13)

SHAREBASED

PAYMENTS

Recognisedsharebasedpaymentexpenses

Theexpenserecognisedforemployeeservicesreceivedduringtheyearisshowninthetablebelow:


31Dec2008 31Dec2007

$ $

Expensearisingfromequitysettledsharebasedtransactions 7,518

Typesofsharebasedpaymentplans

Taxexemptemployeeshareplan(TEESP)

AllemployeesareeligibletoparticipateintheTEESPiftheymeetthefollowingcriteria:

i. TheyareapermanentfulltimeorpermanentparttimeemployeeoftheGroup;

ii.

Theyhavemettheprobationperiodunderthetermsoftheiremploymentcontract;

iii.

Theyareatleast18yearsofage;and

iv. TheyareanAustralianresidentfortaxpurposes.

Employeeswhoparticipate intheTEESPcannominatetocontributeupto$1,000perannumfrom

their pretax wages or salary by way of an effective salary sacrifice towards acquiring fully paid

ordinarysharesintheCompany.

InaccordancewiththerulesoftheTEESP,sharesacquiredundertheplanmustnotbewithdrawnor

otherwise dealt with, commencing from the date the employee acquires a beneficial interest in

thosesharesuntiltheearliestofthedatethat:

i. Isthreeyearsaftertheacquisitiondate;or

ii. TheemployeeceasestobeanemployeeoftheGroup.

The rules of the TEESP do not contain any provisions that could result in an employee forfeiting

ownershipofsharesundertheplan.

Deferredemployee

share

plan

(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.

Underthe

DESP,

senior

employees

are

invited

to

receive

fully

paid

ordinary

shares

in

the

Company

subject to the achievement of a number of key performance indicators such as contribution to

earningspersharefortheGroup.


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31DECEMBER2008

ACN120394194


19

Sharesmay

either

be

acquired

on

market

by

the

Group

or

issued

by

the

Parent.

During

the

half

year

ended31December2008,398,334shareswereissuedbytheParentwiththecostbeingexpensed

overavesting period of three years. Thefairvalueofthe shares isset atthe marketprice of the

sharesonthedateofgrant. Theimpactontheprofitandlossforthehalfyearended31December

2008is$7,518(2008:nil).

Whenaparticipantceasesemploymentpriortothevestingoftheirshares,thesharesareforfeited

in full unless otherwise determined by the Board. In the event of a change of control, the

performance period end date will be brought forward to the date of the change of control and

awardswillvestsubjecttoperformanceoverthisshortenedperiod.

Thereare

no

cash

settlement

alternatives.

SummaryofsharesgrantedunderTEESPandDESParrangements

NosharesweregrantedundertheTEESPduringthehalfyearended31December.

The following table illustrates the number of and movements in shares granted during the period

undertheDESP:


31Dec2008 30Jun2008

No. No.

Openingbalanceat1July2008

Grantedduring

the

period

398,334

Closingbalanceasat31December2008 398,334

Weightedaverageremainingvestingperiod

Theweightedaverageremainingvestingperiodasat31December2008forthesharesissuedduring

theperiodis2.63years(30June2008:nil).

Weightedaveragefairvalue

Theweightedaveragefairvalueofsharesgrantedduringtheperiodwas16cents(30June2008:nil).


24/27



31DECEMBER2008

ACN120394194

DirectorsDeclaration

20

InaccordancewitharesolutionoftheDirectorsofIntegratedLegalHoldingsLimited,Istatethat:

Intheopinionofthedirectors:

a.

Thefinancialstatementsandnotestothefinancialstatementsoftheconsolidatedentity

areinaccordancewiththeCorporationsAct2001,including:

i. givingatrueandfairviewoftheconsolidatedentitysfinancialpositionasat31

December2008andtheperformanceforthehalfyearendedonthatdate;

ii.

complying

with

Australian

Accounting

Standard

AASB

134Interim

Financial

ReportingandtheCorporationsRegulations2001;and

b. Therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebts

asandwhentheybecomedueandpayable.

ThisdeclarationismadeinaccordancewitharesolutionoftheDirectors.

OnbehalfoftheBoard,

GFowler

Director

Sydney,27February2009


25/27

Liability limited by a scheme approved

under Professional Standards LegislationGHM:NR:ILH:031

Auditors Independence Declaration to the Directors of Integrated Legal

Holdings Limited

In relation to our review of the financial report of Integrated Legal Holdings Limited for the half-year

ended 31 December 2008, to the best of my knowledge and belief, there have been no contraventions of

the auditor independence requirements of the Corporations Act 2001or any applicable code of

professional conduct.

Ernst & Young

G H Meyerowitz

Partner

Perth

27 February 2009


26/27

Liability limited by a scheme approved

under Professional Standards LegislationGHM:NR:ILH:030

To the members of Integrated Legal Holdings Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Integrated Legal Holdings Limited, which

comprises the balance sheet as at 31 December 2008, and the income statement, statement of changes in

equity and cash flow statement for the half-year ended on that date, other selected explanatory notes and

the directors declaration of the consolidated entity comprising the company and the entities it controlled

at the half-year end or from time to time during the half-year.

Directors Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation and fair presentation of the half-year

financial report in accordance with 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 half-year financial report that is

free from material misstatement, whether due to fraud or error; selecting and applying appropriate

accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditors Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We

conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of

Interim and other Financial Reports Performed by the Independent Auditor of the Entity , in order to state

whether, on the basis of the procedures described, we have become aware of any matter that makes usbelieve that the financial report is not in accordance with the Corporations Act 2001including: giving a

true and fair view of the consolidated entitys financial position as at 31 December 2008 and its

performance for the half-year ended on that date; and complying with Accounting Standard AASB 134

Interim Financial Reportingand the Corporations Regulations 2001. As the auditor of Integrated Legal

Holdings Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply

with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for

financial and accounting matters, and applying analytical and other review procedures. A review is

substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and

consequently does not enable us to obtain assurance that we would become aware of all significant matters

that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

In conducting our review, we have complied with the independence requirements of the Corporations Act

2001. We have given to the directors of the Company a written Auditors Independence Declaration, a

copy of which is included in the financial report.


27/27

Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe

that the half-year financial report of Integrated Legal Holdings Limited is not in accordance with the

Corporations Act 2001, including:

i giving a true and fair view of the consolidated entitys financial position as at 31 December 2008

and of its performance for the half-year ended on that date; and

ii complying with Accounting Standard AASB 134 Interim Financial Reportingand the Corporations

Regulations 2001.

Ernst & Young

G H Meyerowitz

Partner

Perth

27 February 2009

Documents

044.ASX IAW Feb 27 2009 11.45 Half Year Report and Accounts