145.ASX IAW Feb 28 2012 19.21 Half Yearly Report & Accounts

8/9/2019 145.ASX IAW Feb 28 2012 19.21 Half Yearly Report & Accounts

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INTEGRATEDLEGALHOLDINGSLIMITED

ACN120394194

ASXAppendix4D

RESULTSFORANNOUNCEMENTTOTHEMARKET

Currentreportingperiod: Halfyearended31December2011

Previouscorrespondingperiod: Halfyearended31December2010

EARNINGS

Percentage

change

UP(+)/DOWN()

Amount

$A

Revenuefromordinaryactivities +20% 16,275,847

Revenueandotherincomefromordinaryactivities +24% 16,924,541

Profitfromordinaryactivitiesaftertaxattributabletomembers +28% 970,123

Netprofitfortheperiodattributabletomembers +28% 970,123

DIVIDENDS

Amount

pershare

Frankedamount

pershare

at30%

2012Interimdividend

Correspondingperiod 0.30cents 0.30cents

EARNINGSPERSHARE

Percentagechange

UP(+)/DOWN()

31Dec2011

31Dec2010

Basicanddilutedearningspershare +12% 0.96 0.86

NETTANGIBLEASSETBACKING

Percentagechange

UP(+)/DOWN()

31Dec2011

31Dec2010

Nettangibleassetbackingpersecurity 40% 4.21 6.98

It isrecommended thattheAppendix 4D be read inconjunction with the annual report for theyear

ended 30 June 2011 and considered together with any public announcements made by Integrated

LegalHoldingsLimitedanditscontrolledentities(theGroup)duringthehalfyearended31December

2011inaccordancewiththecontinuousdisclosureobligationsundertheASXlistingrules.

Consolidated revenues and other income of $16,924,541 were 24% higher than the previous

corresponding halfyear period of $13,616,834 operating revenues. Revenue increased due to a

combinationoforganicandacquisitiongrowthduringtheperiod.

Thefollowingtablesummarisesresultsfortheperiod,thefullyear2011,andeachofthehalfyearsof

2011.

FirstHalf

2012

$m

FullYear

2011

$m

SecondHalf

2011

$m

FirstHalf

2011

$m

Revenueandotherincome 16.92 28.48 14.86 13.62

Netprofitaftertax 0.97 1.29 0.53 0.76

Earningspershare 0.96cents 1.41cents 0.55cents 0.86cents


2/29


ACN120394194

ASXAppendix4D

RESULTSFORANNOUNCEMENTTOTHEMARKET

AfullercommentaryontheresultsforthereportingperiodiscontainedintheASXrelease2012First

HalfResultsAnnouncement,dated28February2012.

TheGrouphasnotdeclaredaninterimdividendwithrespecttothefinancialyearended30June2012

(2011interimdividend:0.30cents). Giventheacquisitionactivityduringthefirsthalf,thepotentialfor

furtheracquisitionannouncementsinthe2ndhalf,andrecentlydeterioratedclientpaymentterms,the

Directorshaveresolvednottodeclareaninterimdividend.

Thegroupdoesnothaveanyinterestsinassociatesoutsidethegroup,nordoesithaveanyinterestin

jointventures.

Duringtheperiod,theGroup,throughitswhollyownedsubsidiaries,gainedcontrolofthefollowing

business:

EntityName Datecontrolgained

PLNLawyersPtyLtd

(incorporatingPLNAdvisoryVanuatuandPLNAdvisoryFiji)

1August2011


3/29


ACN120

394

194

(ASX:IAW)

HalfYearFinancialReport

forthehalfyearended31December2011


4/29


FINANCIALREPORTFORTHEHALF-YEARENDED

31DECEMBER2011

ACN120394194

Contents

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

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

Consolidatedstatementoffinancialposition.....................................................................................5

Consolidatedstatementofcomprehensiveincome...........................................................................6

Consolidatedstatementofcashflows................................................................................................7

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

Notesto

the

consolidated

financial

statements

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

9

Directorsdeclaration.......................................................................................................................22

Auditorsindependencedeclaration................................................................................................23

Independentauditorsreviewreport...............................................................................................24


5/29



31DECEMBER2011

ACN120394194

CorporateInformation

1

ABN20

120

394

194

Directors

TheHonJohnDawkins,Chairman

AnneTregonning,NonexecutiveDirector

GraemeFowler,ManagingDirector/ChiefExecutive

CompanySecretary

JeanMarieRudd

Registeredoffice

Level2

11MountsBayRoad

Perth WA 6000

Principalplaceofbusiness

HeadOffice

Level22

1MarketStreet

Sydney NSW 2000

Tel: (02)82636600

Share

Register

ComputershareInvestorServicesPtyLimited

Level2

45StGeorgesTerrace

Perth WA 6000

Tel: (08)93232000

IntegratedLegalHoldingsLimitedsharesarelistedontheAustralianStockExchange.

Solicitors

TalbotOlivier ArgyleLawyers

Level8,WesfarmersHouse Level22

40The

Esplanade

1

Market

Street

Perth WA 6000 Sydney NSW 2000

Bankers

StGeorgeBank NationalAustraliaBankLimited

Level2,WestraliaPlaza 100StGeorgesTerrace

167StGeorgesTerrace PERTH WA 6000

Perth WA 6000

Auditor

Ernst&Young

11Mounts

Bay

Road

Perth WA 6000


6/29



31DECEMBER2011

ACN120394194

DirectorsReport

2

The

directors

of

Integrated

Legal

Holdings

Limited

(the

Company)

submit

the

halfyear

financial

reportforthehalfyearended31December2011.

DIRECTORS

ThenamesoftheCompanysdirectorsinofficeduringthehalfyearanduntilthedateofthisreport

aresetoutbelow. Directorswereinofficeforthisentireperiodunlessotherwisestated.

TheHonJohnDawkinsAO(NonexecutiveChairman)

AnneTregonning(NonexecutiveDirector)

GraemeFowler(ManagingDirector)

REVIEWANDRESULTSOFOPERATIONS

Consolidated revenues and other income of $16,924,541 were 24% higher than the previous

corresponding halfyear period of $13,616,834 operating revenues. Revenue increased due to a

combinationoforganicandacquisitiongrowthduringtheperiod.

Thefollowingtablesummarisesresultsfortheperiod,thefullyear2011,andeachofthehalfyears

of2011.

FirstHalf

2012$m

FullYear

2011$m

SecondHalf

2011$m

FirstHalf

2011$m

Revenueandotherincome 16.92 28.48 14.86 13.62

Netprofitaftertax 0.97 1.29 0.53 0.76

Earningspershare 0.96cents 1.41cents 0.55cents 0.86cents

A fuller commentary on the results for the reporting period is contained in the ASX release 2012

FirstHalfResultsAnnouncement,dated28February2012.

The Group has not declared an interim dividend with respect to the financial year ended 30 June

2012 (2011 interim dividend: 0.30 cents). Given the acquisition activity during the first half, the

potential

for

further

acquisition

announcements

in

the

2nd

half,

and

recently

deteriorated

client

paymentterms,theDirectorshaveresolvednottodeclareaninterimdividend.

ACQUISITIONOFPLNLAWYERSPTYLTD

InAugust2011theCompanyannouncedtheacquisitionofPLNLawyersPtyLtd(PLN)undertuckin

arrangementswiththeexistingmemberfirmArgyleLawyersPtyLtd(Argyle).

PLNisanestablishedandhighlyregardedSydneybasedcommerciallawfirm. PLNsmissionistobe

the leading provider of legal and business advisory services to corporations and international

institutions operating in the Pacific Region. PLNs clients include Australian, Asian, American and

European

based

companies

and

financial

institutions

with

business

interests

in

the

AsiaPacific

region.


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31DECEMBER2011

ACN120394194

DirectorsReport

3

PLNprovides

a

wide

range

of

legal

services

including

Corporate

and

Financial

Services,

Travel

and

Tourism,AviationIndustryservices,InfrastructureandDevelopment,Insurance,Insolvency,Mergers,

AcquisitionsandIPOs,MiningandPetroleum,TelecommunicationsandInformationTechnology.

PLNisthecentreofmanagementforthePacificLegalNetworkwhichwasestablishedin2002and

hasdevelopedkeyaffiliaterelationshipsinVanuatu,Fiji,PapuaNewGuinea,Samoa,NewZealand,

AmericanSamoa,Tonga,CookIslands,NewCaledonia,FrenchPolynesia,SolomonIslands,Hawaii,

theMarshallIslands,NorthernMarianaIslands,Palau,mainlandUSA,andacrossAsia. PacificLegal

Networkremainstheonlycoordinatedlegalandbusinessadvisoryserviceintheregion.

The firm consists of founder and Principal John Ridgway, Senior Associate Nitij Pal, and 4 lawyers,

witha

total

of

8

staff,

and

annual

fee

income

of

approximately

$2m.

PLNisanawardwinninglawfirmhavingwonthe2009NewSouthWalesExporteroftheYearAward

in a recognised services industry, and in August 2010 was namedjoint winner of the e.law Asia

PacificBoxBreakeroftheYearAward,whichrecognisesthosethinkingoutsidethesquaretomeet

legalbusinesschallenges.

PLN was tuckedin with existing member firm Argyle, with the combined firm having 6 Principals,

approximately40staffandannualfeeincomeofmorethan$10m.

PLNhasretaineditsbrand,butwilloperategoingforwardundertheArgylebusinessumbrella. The

tuck

in

arrangements

promise

a

sound

base

for

the

growth

and

expansion

of

the

PLN

brand

across

AsiaPacificandviatheILHmemberfirmsinAustralia.

The Directors believe that PLN is a high quality business with strong growth prospects and will

provide both Argyle and ILH with a platform for future growth, in particular strengthening the

organisations commercial law service offerings, and providing new access to the Pacific and Asian

markets.

The Company expects to generate earnings improvements through cross referrals of client matter

opportunitiesaswellascostsynergiessuchaspremises.

The

Directors

expect

the

transaction

to

be

EPS

accretive

in

the

2012

financial

year

and

will

enhance

theCompanysgrowthprospects.


8/29



31DECEMBER2011

ACN120394194

DirectorsReport

4

AUDITORSINDEPENDENCE

DECLARATION

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

providedonpage24andformspartofthisreport.

Signedinaccordancewitharesolutionofthedirectors.

GFowler

ManagingDirector

Perth,28February2012


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31DECEMBER2011

ACN120394194

ConsolidatedStatementofFinancialPosition

TheaboveConsolidatedStatementofFinancialPositionshouldbereadinconjunctionwiththe

accompanyingnotes

5

Consolidated Consolidated

Note

Asat

31Dec2011

Asat

30June2011

ASSETS $ $

Currentassets

Cashandcashequivalents 5 1,091,733 2,460,760

Tradeandotherreceivables 6 9,343,167 7,826,873

Workinprogress 2,867,589 2,499,220

Incometaxreceivable 12,782

Totalcurrentassets 13,302,489 12,799,635

Noncurrentassets

Plantandequipment 1,387,202 1,170,294

Prepayments 14,614 14,614

Goodwill 7 14,590,139 12,900,557

Intangibleassets 8 11,880 29,700

Availableforsalefinancialassets 2,781 3,435

Totalnoncurrentassets 16,006,616 14,118,600

TOTALASSETS 29,309,105 26,918,235

LIABILITIES

Currentliabilities

Tradeandotherpayables 2,844,954 3,813,598

Interestbearingloansandborrowings 9 484,828 2,536,259

Incometaxpayable 54,725

Provisions 1,052,337 986,593

Otherliabilities 10 365,327 255,769

Totalcurrentliabilities 4,802,171 7,592,219

Noncurrentliabilities

Tradeandotherpayables 37,554

Interestbearingloansandborrowings 9 4,791,832 143,325

Provisions

386,841

306,092Deferredtaxliabilities 185,159 137,038

Otherliabilities 10 244,729 689,344

Totalnoncurrentliabilities 5,608,561 1,313,353

TOTALLIABILITIES 10,410,732 8,905,572

NETASSETS 18,898,373 18,012,663

EQUITY

Issuedcapital 11 33,899,828 33,397,152

Accumulatedlosses (16,926,589) (16,926,589)

Reserves 12 1,925,134 1,542,100

TOTALEQUITY

18,898,373

18,012,663


10/29



31DECEMBER2011

ACN120394194

ConsolidatedStatementofComprehensiveIncome

TheaboveConsolidatedStatementofComprehensiveIncomeshouldbereadinconjunctionwith

theaccompanyingnotes.

6


Note

Halfyear

ended

31Dec2011

Halfyear

ended

31Dec2010

$ $

Professionalfeesrevenue 16,275,847 13,537,017

Totalrevenue 16,275,847 13,537,017

Movementinfairvalueoffinancialliabilities 10 550,437

Interestincome 69,577 78,756

Dividendsreceived

76

72

Otherrevenue 4 28,604 989

Otherincome 648,694 79,817

Occupancyexpenses (1,414,077) (1,091,440)

Salariesandemployeebenefitsexpenses (11,498,763) (8,716,908)

Depreciationandamortisationexpenses (240,224) (193,400)

Officeexpenses (1,810,991) (1,492,467)

Advertisingandmarketingexpenses (237,133) (160,364)

Otherexpenses (327,926) (774,690)

Interestexpenses (166,939) (55,198)

Sharebased

payments

expense

15

(27,956)

(17,844)

Totalexpenses (15,724,009) (12,502,311)

Profitbeforeincometax 1,200,532 1,114,523

Incometaxexpense (230,409) (358,617)

Profitafterincometax 970,123 755,906

Netprofitfortheperiod 970,123 755,906

Othercomprehensiveincome

Netgains/(losses)onavailableforsalefinancialassets (654) 631

Othercomprehensiveincomefortheperiod,netoftax (654) 631

Totalcomprehensiveincomefortheperiod 969,469 756,537

Basicearningspershare(cents) 0.96 0.86

Dilutedearningspershare(cents) 0.96 0.86


11/29



31DECEMBER2011

ACN120394194

ConsolidatedStatementofCashFlows

TheaboveConsolidatedStatementofCashFlowsshouldbereadinconjunctionwiththe

accompanyingnotes.

7


Note

Halfyear

ended

31Dec2011

Halfyear

ended

31Dec2010

$ $

Cashflowsfromoperatingactivities

Receiptsfromcustomers 15,753,614 15,171,446

Paymentstosuppliersandemployees (17,431,140) (13,950,215)

Interestreceived 69,577 78,756

Dividendsreceived 76 72

Sundryincome

28,604

989

Interestandothercostsoffinancepaid (101,824) (29,210)

Incometaxpaid (113,980) (242,608)

Netcashflows(usedin)/fromoperatingactivities (1,795,073) 1,029,230

Cashflowsfrominvestingactivities

Purchaseofplantandequipment (427,024) (147,166)

Paymentfortheacquisitionofbusinesses 14 (1,253,614) -

Proceedsfromthedisposalofplantandequipment - -

Netcashflowsusedininvestingactivities (1,680,638) (147,166)

Cashflows

from

financing

activities

Paymentforshareissueexpenses (12,979) (3,674)

Proceedsfromborrowings 2,940,337 -

Repaymentsofborrowings (489,304) (293,065)

Paymentofdividends (448,735) (441,556)

Netcashflows(usedin)/fromfinancingactivities 1,989,319 (738,295)

Netincrease/(decrease)incashheld (1,486,392) 143,769

Cashandcashequivalentsatthebeginningofthe

period 2,435,615 1,948,949

Cashandcashequivalentsattheendoftheperiod 5 949,223 2,092,718


12/29



31DECEMBER2011

ACN120394194

ConsolidatedStatementofChangesinEquity

TheaboveConsolidatedStatementofChangesinEquityshouldbereadinconjunctionwiththe

accompanyingnotes.

8

CONSOLIDATED

Issued

Capital

Accumulated

Losses

NetUnrealised

GainsReserve

General

Reserve

Total

Equity

$ $ $ $ $

At1July2010 32,160,426 (16,688,184) (1,441) 727,113 16,197,914

Profitfortheperiod 755,906 755,906

Othercomprehensive

income 631 631

Totalcomprehensive

incomefortheperiod 755,906 631 756,537

Transactionswith

owners

intheircapacityasowners

Dividendspaid (441,556) (441,556)

Transfertogeneralreserve (238,405) 238,405

Sharesissued 195,000 195,000

Transactioncostsonshare

issue (3,674) (3,674)

Sharebasedpayments 17,844 17,844

Balanceasat31December

2010 32,369,596 (16,612,239) (810) 965,518 16,722,065

CONSOLIDATED

Issued

Capital

Accumulated

Losses

Net

Unrealised

GainsReserve

General

Reserve

Total

Equity

$ $ $ $ $

At1July2011 33,397,152 (16,926,589) (649) 1,542,749 18,012,663

Profitfortheperiod 970,123 970,123

Othercomprehensiveloss (654) (654)

Totalcomprehensive

incomefortheperiod (654) 970,123 969,469

Transactionswith

owners

intheircapacityasowners

Dividendspaid (586,435) (586,435)

Sharesissued 487,700 487,700

Transactioncostsonshare

issue (12,980) (12,980)

Sharebasedpayments 27,956 27,956

Balanceasat31December

2011 33,899,828 (16,926,589) (1,303) 1,926,437 18,898,373


13/29



31DECEMBER2011

ACN120394194

NotestotheConsolidatedFinancialStatements

9

1)

CORPORATEINFORMATION

ThegeneralpurposecondensedfinancialreportofIntegratedLegalHoldingsLimited(theCompany)

forthehalfyearended31December2011wasauthorisedforissueinaccordancewitharesolution

oftheDirectorson28February2012. IntegratedLegalHoldingsLimitedisacompanyincorporated

inAustraliaandlimitedbyshares,whicharepubliclytradedontheAustralianStockExchange(ASX).

2) BASISOFPREPARATIONANDACCOUNTINGPOLICIES

Basisofpreparation

This

general

purpose

condensed

financial

report

for

the

halfyear

ended

31

December

2011

has

been prepared in accordance with AASB 134 InterimFinancialReporting and theCorporationsAct

2001.

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

entityasthefullfinancialreport.

Itisrecommendedthatthehalfyearfinancialreportbereadinconjunctionwiththeannualreport

fortheyearended30June2011andconsideredtogetherwithanypublicannouncementsmadeby

IntegratedLegal

Holdings

Limited

and

its

controlled

entities

(the

Group)

during

the

half

year

ended

31 December 2011 in accordance with the continuousdisclosure obligations undertheASXListing

Rules.

Thehalfyearfinancialreport isprepared inAustraliandollarsandonahistoricalcostbasis,except

foravailableforsaleinvestments,whichhavebeenmeasuredatfairvalue.

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

discretereportingperiod.

Significantaccountingpolicies

Apartfrom

the

changes

in

accounting

policy

noted

below,

the

accounting

policies

and

methods

of

computationarethesameasthoseadoptedinthemostrecentannualfinancialstatements.

Changesinaccountingpolicy

From 1 July 2011, the Group has adopted all Australian Accounting Standards and Interpretations,

mandatoryforannualperiodsbeginningonorafter1July2011. Adoptionofthesestandardsand

interpretationsdidnothaveaneffectonthefinancialpositionorperformanceoftheGroup.

Basisofconsolidation

The halfyear consolidated financial statements comprise the financial statements of Integrated

LegalHoldingsLimitedanditssubsidiariesasat31December2011.

Subsidiariesareallthoseentities(includingspecialpurposeentities)overwhichtheGrouphasthe

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


14/29



31DECEMBER2011

ACN120394194


10

Theexistence

and

effect

of

potential

voting

rights

that

are

currently

exercisable

or

convertible

are

consideredwhenassessingwhetheragroupcontrolsanotherentity.

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

ceaseto

be

consolidated

from

the

date

on

which

control

is

transferred

out

of

the

Group.

3)

SEGMENTINFORMATION

Operatingsegments

The accounting policiesused bythe Group in reporting segments internally are the same as those

containedinnote2totheaccounts.TheIntegratedLegalHoldingsGrouphasidentifieditsoperating

segmentsbasedonthe internalmanagementreportingthat isusedbytheexecutivemanagement

team(thechiefoperatingdecisionmaker)inassessingperformanceandallocatingresources.

IntegratedLegalHoldingsoperatingsegmentshavebeenidentifiedbasedonhowthefinancialand

operatingresultsoftheGrouparemonitoredandpresentedinternallytotheexecutivemanagement

team. The reportable segments are based on aggregated operating segments determined by the

similarity of the products sold and the services provided, as these are the sources of the Groups

majorrisksandhavethemosteffectontheratesofreturn.

Fortheyearended30June2011,managementidentifiedaLegalServicesDivisionandInformation

TechnologyDivisionasoperatingsegments.Changestohowthefinancialandoperatingresultsof

theGrouparemonitoredandpresentedinternallyduringthehalfyearended31December2011

haveresulted

in

these

Divisions

being

dissolved

and

the

Group

is

now

segmented

into

one

reportablesegment.

ArgyleLawyers,CivicLegal,SignetLawyers,TalbotOlivierandIntegratedLegalHoldingsHeadOffice

Division areoperating segmentswithinthe legal servicessector inthe Australianmarket andhave

beenaggregatedtoonereportablesegmentgiventhesimilarityoftheservicesprovided,methodin

whichservicesaredelivered,typesofcustomersandregulatoryenvironment.

AstheGroupisaggregatedintoonereportablesegment,therearenointersegmenttransactions.


15/29



31DECEMBER2011

ACN120394194


11

4)

OTHERREVENUE


Halfyear

ended

31Dec2011

Halfyear

ended

31Dec2010

$ $

Sundryincome 28,604 989

5) CASHANDCASHEQUIVALENTS


At31Dec2011

At

30Jun2011

$ $

Cashatbankandinhand 1,091,733 2,460,760


Halfyear

ended

31Dec2011

Halfyear

ended

31Dec2010

$ $

Reconciliation

to

statement

of

cash

flows

Forthepurposesofthestatementofcashflows,cashandcash

equivalentscomprisethefollowingat31December:

Cashatbankandinhand 1,087,538 2,118,898

Shorttermdeposits 4,195

Bankoverdrafts (142,510) (26,180)

949,223 2,092,718

6) TRADEANDOTHERRECEIVABLES

Consolidated

Consolidated

At

31Dec2011

At

30Jun2011

CURRENT $ $

Tradereceivables 9,078,502 7,042,390

Allowanceforimpairmentloss(a) (318,942) (419,696)

8,759,560 6,622,694

Unbilledclientdisbursements (138,757) 235,537

Prepayments 692,758 942,059

Otherreceivables 29,606 26,583

9,343,167

7,826,873


16/29



31DECEMBER2011

ACN120394194


12

a)

Allowancefor

impairment

loss

Trade receivables are generally noninterest bearing and are generally on 3060 day terms. An

allowance for impairment loss is recognised when there is objective evidence that an individual

trade receivable is impaired. An impairment loss of $49,032 (30 June 2011: $930,772 and 31

December2010:$551,497)hasbeenrecognisedbytheGroupinthecurrentperiodwhich includes

bad debts expense recognised of $149,786 (30 June 2011: $644,082 and 31 December 2010:

$172,485)andadoubtfuldebtexpense/(writeback)of($100,754)(30June2011:$286,690and31

December 2010: $379,012). These amounts have been recognised in the statement of

comprehensiveincomeinthelineitemotherexpenses.

Movementsintheallowanceforimpairmentlosswereasfollows:

Consolidated

ConsolidatedAt

31Dec2011

At

30Jun2011

$ $

Openingbalanceatthebeginningoftheperiod 419,696 133,006

Chargefortheperiod (100,754) 286,690

Closingbalanceattheendoftheperiod 318,942 419,696

7) GOODWILL

Consolidated Consolidated Consolidated

At31Dec2011 At30Jun2011 At31Dec2010

$ $ $

Openingbalance 12,900,557 10,470,600 10,470,600

Acquisitionofsubsidiary(note14) 1,689,582 2,417,757

Other(1) 12,200

Closingbalance 14,590,139 12,900,557 10,470,600

i)

RelatestotheacquisitionofTheArgylePartnership.

b)

DescriptionoftheGroupsgoodwill

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

accumulated impairment losses. Goodwill isnotamortisedbut issubjectto impairmenttestingon

anannualbasisorwheneverthereisanindicationofimpairment.


17/29



31DECEMBER2011

ACN120394194


13

8)

INTANGIBLEASSETS

a)

Reconciliationofcarryingamountsatthebeginningandendoftheperiod


At

31Dec2011

At

30Jun2011

At

31Dec2010

$ $ $

Openingbalance

(netofaccumulatedamortisation) 29,700 65,340 65,340

Amortisation (17,820) (35,640) (17,820)

Closingbalance

(netofaccumulatedamortisation) 11,880 29,700 47,520


At

31Dec2011

At

30Jun2011

At

31Dec2010

$ $ $

Cost(grosscarryingamount) 163,254 163,254 163,254

Accumulatedamortisation (151,374) (133,554) (115,734)

Netcarryingamountattheendoftheperiod 11,880 29,700 47,520

b) DescriptionoftheGroupsidentifiedintangibleassets

Intangibleassetsrepresentthevalueof leasedpremisesacquiredupontheacquisitionofthe legal

practice of Peter Marks in the 30 June 2008 financial year and is carried at cost less accumulated

amortisation. This intangibleassethasbeenassessedashavingafinite lifeand isamortisedusing

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

amortisationexpenses.


18/29



31DECEMBER2011

ACN120394194


14

9)

INTERESTBEARING

LOANS

AND

BORROWINGS


At

31Dec2011

At

30Jun2011

CURRENT $ $

Bankoverdraft 142,510 25,145

Obligationsunderfinanceleasesandhirepurchasecontracts 208,044 174,869

Insurancepremiumfunding(unsecured) 134,274 386,245

Bankloan(secured) 1,950,000

484,828 2,536,259

NONCURRENT

Obligationsunderfinanceleasesandhirepurchasecontracts 243,095 143,325

Bankloan(secured) 4,548,737

4,791,832 143,325

ThebankloanissecuredovertheassetsofIntegratedLegalHoldingsanditscontrolledentities. The

newfacilityisaCommercialBillAcceptancewithafacilitylimitof$7.0mexpiringinDecember2014.

Thishasbeendrawndownby$4.5mat31December2011.


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31DECEMBER2011

ACN120394194


15

10)

OTHERLIABILITIES


At

31Dec2011

At

30Jun2011

$ $

CURRENT

Deferredconsiderationpayable(1) 240,908 125,000

Contingentconsiderationobligation(2) 19,666 48,280

Leaseincentiveobligation(3) 104,753 82,489

365,327 255,769

NONCURRENT

Contingentconsiderationobligation(2) 522,255

Leaseincentiveobligation(3)

244,729 167,089

244,729 689,344

(1) DeferredconsiderationpayableontheacquisitionofPLNLawyers(seenote14)(2011: deferredconsiderationpayable

ontheacquisitionofWojtowiczKellyLegal)

(2) ContingentconsiderationpayableontheacquisitionofWojtowiczKellyLegal.

FinancialLiabilityforthecontingentconsiderationasof30June2011 522,255

Interestaccretionforthehalfyearto31December2011 28,182

Fairvalueadjustmentat31December2011 (550,437)

Closingbalanceat31December2011

(3) Operating lease incentivesarerecognised as a liabilitywhen received and subsequently reduced by allocating lease

paymentsbetweenrentalexpenseandreductionofthe liabilitytoensurerentalexpense isrecognisedonastraight

linebasisovertheleaseterm.

11)

ISSUEDCAPITAL

a)

Ordinaryshares


Consolidated 31Dec2011 30Jun2011 31Dec2011 30Jun2011

Shares Shares $ $

Fullypaidshares 100,203,515 95,908,111 33,796,377 33,321,656

Partlypaidshares(1) 1,831,000 1,256,217 103,451 75,496

Forfeitedsharesheldintrust(2)

102,034,515 97,164,328 33,899,828 33,397,152

(1)SharesissuedundertheDeferredEmployeeSharePlanthatvestoverthreeyears(note15).

(2)SharesissuedbutforfeitedundertheDeferredEmployeeSharePlan,heldintrust(note15).


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31DECEMBER2011

ACN120394194


16

Movementsin

ordinary

share

capital

Consolidated Shares $

Openingbalanceasat1July2011 97,164,328 33,397,152

IssueofsharesundertheDeferredEmployeeSharePlan(refer

note15) 574,783 27,956

Issue of shares at 11.5 cents per share to vendors of PLN

Lawyers in part satisfaction of consideration payable on 1

August2011 3,043,478 350,000

IssueofsharesundertheDividendReinvestmentPlan 1,251,926 137,700

Costsassociatedwithissuingshares (12,980)

Balanceasat31December2011 102,034,515 33,899,828

Consolidated Shares $

Openingbalanceasat1July2010 86,484,666 32,160,426

IssueofsharesundertheDeferredEmployeeSharePlan(refer

note15) 484,550 17,844

Issueofsharesat10centspersharetovendorsofTheArgyle

Partnership Lawyers in final satisfaction of deferred

considerationpayableon22September2010 1,800,000 180,000

Issue of shares at 12 cents per share in part satisfaction of

2010Principalprofitshareentitlement 125,000 15,000

Costsassociatedwithissuingshares (3,674)

Balanceasat31December2010 88,894,216 32,369,596


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31DECEMBER2011

ACN120394194


17

12)

RESERVES


At

31Dec2011

At

30Jun2011

$ $

Netlossesonavailableforsalefinancialassets(a) (1,303) (649)

Generalreserve(b) 1,926,437 1,542,749

1,925,134 1,542,100

a)

Netunrealisedgainsreserve

Thisreserverecordsmovementsinthefairvalueofavailableforsalefinancialassets.

b) 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,$Nil,representingtradingprofitsfortheyearended30June2011lessdividends

paid, was transferred to the General Reserve from Accumulated Losses (31 December 2010:

$238,405).

13)

CONTINGENTLIABILITIESANDCONTINGENTASSETSTherearenocontingentliabilitiesorassetsasat31December2011.


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31DECEMBER2011

ACN120394194


18

14)

BUSINESSCOMBINATIONS

Acquisition

of

PLN

Lawyers

Pty

Ltd

Effective 1 August 2011, Integrated Legal Holdings Limited acquired the legal business of PLN

LawyersPtyLtdundertuckinarrangementswiththeexistingmemberfirmArgyleLawyersPtyLtd.

TheacquisitionsupportstheCompanysbusinessstrategytoidentifyqualitylegalbusinessestojoin

theGroupthroughacquisition,andsupportthesebusinessesaspartofanetworktowardsabove

marketgrowth,improvedbusinessperformanceandGroupsynergies.

Theconsideration

for

the

acquisition

was

a

combination

of

cash

plus

3,043,478

shares

at

11.5

cents

pershare,and includesadeferredcashcomponentpayable inSeptember2012subjecttothePLN

businessachievingrevenueandprofitabilitytargetsfortheperiodto30June2012. Theacquisition

is structured with significant employment restraints and conditions. The cash component of the

purchaseconsiderationhasbeenfundedfromsurpluscashreserves.

Thefollowingconstitutestheprovisionalcalculationoftheconsiderationgivenandthefairvalueof

netassetsacquired:

$

Consideration

Cash 1,100,000

Deferredcash

consideration

232,653

Totalcashconsideration 1,332,653

Sharesissuedatfairvalue 350,000

Totalacquisitioncost 1,682,653

Fair

Value

$

Carrying

Amount

$

Netassetsacquired

Assets

Plantandequipment 34,860 34,860

Accumulateddepreciation (22,573) (22,573)

Netdeferred

tax

asset

6,005

Totalassetsacquired 18,292 12,287

Liabilities

Provisionforemployeeentitlements 20,017 20,017

Netdeferredtaxliability 5,204

Totalliabilitiesacquired 25,221 20,017

Netliabilitiesacquired (6,969) (7,730)

Goodwillonacquisition 1,689,582

As

the

integration

of

the

business

is

still

occurring,

the

fair

value

of

net

assets

acquired

remains

provisionallydetermined.


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31DECEMBER2011

ACN120394194


19

Theacquirees

contribution

to

the

net

profit

of

the

Group

cannot

be

determined

as

this

business

has

been incorporated into Argyles business, and it is impracticable to disclose the total revenue and

profit for the combined entity as though the acquisition had taken place at the beginning of the

period.

$

Cash outflows during the period ended 31 December 2011 relate to acquisitions

wereasfollows:

PLNLawyersPtyLtd(1August2011)

Cashconsideration 1,100,000

WojtowiczKellyLegal(1February2011)

Deferredcash

consideration

153,614

Netconsolidatedcashoutflow 1,253,614

15)

SHAREBASEDPAYMENTS

a) Recognisedsharebasedpaymentsexpense

The expense recognised for employee services received during the halfyear is shown in the table

below:


31Dec

2011

31

Dec

2010

$ $

Expensearisingfromequitysettledsharebasedtransactions 27,956 17,844

b)

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.


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31DECEMBER2011

ACN120394194


20

Inaccordance

with

the

rules

of

the

TEESP,

shares

acquired

under

the

plan

must

not

be

withdrawn

or

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)

Sharesare

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.

UndertheDESP,senioremployeesare invitedtoreceivefullypaidordinaryshares intheCompany

subject

to

the

achievement

of

a

number

of

key

performance

indicators

such

as

contribution

to

earningspersharefortheGroup.

SharesmayeitherbeacquiredonmarketbytheGrouporissuedbytheParent. Duringthehalfyear

ended 31 December 2011, 574,783 shares (30 June 2011: 484,550 shares) were granted by the

Parent with the cost being expensed over a vesting period of three years. The fair value of the

sharesissetatthemarketpriceofthesharesonthedateofgrant. Theimpactontheprofitandloss

forthehalfyearended31December2011is$27,956(31December2010:$17,844).

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.

Therearenocashsettlementalternatives.


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31DECEMBER2011

ACN120394194


21

c)

Summaryof

shares

granted

under

TEESP

and

DESP

arrangements

NosharesweregrantedundertheTEESPduringthehalfyearended31December2011.

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

undertheTEESPandtheDESP:


31Dec2011 31Dec2010

No. No.

TEESP:

Openingbalanceat1July 252,672 252,672

Transferred

to

departed

employees

during

the

period

(1)

Closingbalanceasat31December 252,672 252,672

DESP:

Openingbalanceat1July 1,256,217 371,667

Grantedduringtheperiod 574,783 484,550

Closingbalanceasat31December 1,831,000 856,217

(1) Shares are transferred out of an employee trust into the employees name on termination of

employment.

d)

Weightedaverageremainingvestingperiod

Theweightedaverageremainingvestingperiodasat31December2011forthesharesissuedunder

theDESPis1.68years(30June2011:1.66years).

e)

Weightedaveragefairvalue

Asat31December2011,theweightedaveragefairvalueofsharesgrantedundertheDESPwas10.9

cents(30June2011:11.7cents).


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31DECEMBER2011

ACN120394194

DirectorsDeclaration

22

InaccordancewitharesolutionoftheDirectorsofIntegratedLegalHoldingsLimited,Istatethat:

Intheopinionofthedirectors:

a.

Thefinancialstatementsandnotesoftheconsolidatedentityareinaccordancewiththe

CorporationsAct2001,including:

i. Givingatrueandfairviewoftheconsolidatedentitysfinancialpositionasat31

December2011andtheperformanceforthehalfyearendedonthatdateofthe

consolidatedentity

ii. ComplyingwithAccountingStandardAASB134 InterimFinancialReportingand

theCorporationsRegulations2001

b.

Therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebts

asandwhentheybecomedueandpayable.

OnbehalfoftheBoard

GFowler

Director

Perth,28February2012


27/29

Liability limited by a scheme approved

under Professional Standards LegislationTD:SS:ILH:004

Auditor's Independence Declaration to the Directors of Integrated LegalHoldings Limited

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

ended 31 December 2011, 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

T G Dachs

Partner

Perth

28 February 2012


28/29

Liability limited by a scheme approved

under Professional Standards LegislationTD;SS:ILH:005

To the members of Integrated Legal Holdings Limited

Report on the Half-Year Condensed Financial Report

We have reviewed the accompanying half-year condensed financial report of Integrated Legal Holdings

Limited, which comprises the statement of financial position as at 31 December 2011, the condensed

statement of comprehensive income, condensed statement of changes in equity and statement of cash

flows for the half-yearended on that date, notes comprising a statement of significant accounting policies

and other explanatory information, 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 Condensed Financial Report

The directorsof the company are responsible for the preparation of the half-year condensed financial

report that gives a true and fair view in accordance with Australian Accounting Standards and the

Corporations Act 2001and for such internal controls as the directors determine are necessary to enable

the preparation of the half-year condensed financial report that is free from material misstatement,

whether due to fraud or error.

Auditors Responsibility

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

review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE

2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to statewhether, on the basis of the procedures described, we have become aware of any matter that makes us

believe that the financial report is not in accordance with the Corporations Act 2001including: giving a

true and fair view of the consolidated entitys financial position as at 31 December 2011 and its

performance for the half-yearended 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 condensedfinancial 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.


29/29

2

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 condensed financial report of Integrated Legal Holdings Limited is not in

accordance with the Corporations Act 2001, including:

a) giving a true and fair view of the consolidated entitys financial position as at 31 December 2011 and

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

b) complying with Accounting Standard AASB 134 Interim Financial Reportingand the Corporations

Regulations 2001.

Ernst & Young

T G Dachs

Partner

Perth

28 February 2012

Documents

145.ASX IAW Feb 28 2012 19.21 Half Yearly Report & Accounts