020.asx iaw feb 29 2008 appendix 4d half yearly reports
TRANSCRIPT
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INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194
ASXAppendix4D
RESULTSFORANNOUNCEMENTTOTHEMARKET
Duringtheperiod,theGroup,throughitswhollyownedsubsidiaries,gainedcontrolofthe
followingbusinesses:
EntityName Datecontrolgained
TalbotOlivier 10August2007
BrettDaviesLawyers 10August2007
LawCentralCoPtyLtd 10August2007
PeterMarksSuccessionLawyers 19September2007
ShayneLeslie 28September2007
Thegroup
does
not
have
any
interests
in
associates
outside
the
group,
nor
does
it
have
any
interestinjointventures.
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INTEGRATEDLEGALHOLDINGSLIMITED
ACN120
394
194
(ASX:IAW)
HalfYearFinancialReport
forthehalfyearended31December2007
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
Contents
Corporateinformation.............................................................................................................1
Directorsreport......................................................................................................................2
Balancesheet...........................................................................................................................4
Incomestatement....................................................................................................................5
Cashflowstatement................................................................................................................6
Statementofchangesinequity...............................................................................................7
Notesto
and
forming
part
of
the
financial
report
...................................................................
8
Directorsdeclaration............................................................................................................25
Auditorsindependencedeclaration.....................................................................................26
Independentreviewreport....................................................................................................27
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
DirectorsReport
2
Thedirectors
of
Integrated
Legal
Holdings
Limited
(the
Company)
submit
the
interim
financial
report
forthehalfyearended31December2007.
DIRECTORS
Thenamesofthecompanysdirectorsinofficeduringthehalfyearanduntilthedateofthisreport
aresetoutbelow. Directorswereinofficeforthisentireperiodunlessotherwisestated.
TheHonJohnDawkinsAO(NonexecutiveChairman)
AnneTregonning(NonexecutiveDirector)
ThomasHenn(ManagingDirector)
REVIEWAND
RESULTS
OF
OPERATIONS
On17August2007,theCompanysuccessfullylistedontheAustralianStockExchange(ASX)byway
ofprospectusdated16May2007. Theofferwasoversubscribedand$12,416,660wasraisedasa
result. The success of the initial public offering represents an endorsement of the companys
businessmodelandstrategicplan.
Uponlisting,IntegratedLegalHoldingsLimited,throughitswhollyownedsubsidiaries,acquiredthe
legalpracticesofTalbotOlivierandBrettDaviesLawyers,andtheonlinelegaldocumentproduction
andserviceorganisationknownasLawCentralCoPtyLtd.
During
September
2007,
the
Company,
through
its
wholly
owned
subsidiary,
Talbot
Olivier
Pty
Ltd,
acquired two further practices which will be income accretive from their first year of acquisition
(botharedetailedinnote10).
Fortheperiodended31December2007,theconsolidatedentitygeneratedanetprofitaftertaxof
$895,412(2006:$16,509,998loss).
Against the same period last year, earnings before interest, tax, impairment, depreciation and
amortisation from continuing operations increased from a loss of $4,305,901 to a profit of
$1,412,509.
As
at
31
December
2007,
the
consolidated
cash
holdings
stood
at
$5,040,704.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
DirectorsReport(continued)
3
AUDITORSINDEPENDENCE
DECLARATION
Acopyoftheauditorsindependencedeclarationinrelationtotheauditforthehalfyearisprovided
withthisreportonpage26.
Signedinaccordancewitharesolutionofthedirectors.
THenn
Director
Perth,29February2008
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
BalanceSheet
4
Consolidated Parent
Note
Asat
31Dec2007
Asat
30Jun2007
$ $
ASSETS
CurrentAssets
Cashandcashequivalents 4 5,040,704 8,788,735
Tradeandotherreceivables 1,851,195
Capitalisedexpenditure 506,872
Workinprogress 765,001
TotalCurrent
Assets
7,656,900
9,295,607
NoncurrentAssets
Availableforsalefinancialassets 3,883
Plantandequipment 189,030
Goodwill 5 6,330,233
Intangibleassets 6 154,440
Deferredtaxassets 419,588
TotalNoncurrentAssets 7,097,174
TOTALASSETS 14,754,074 9,295,607
LIABILITIES
CurrentLiabilities
Tradeandotherpayables 910,403 9,295,402
Interestbearingloansandborrowings 20,693
Incometaxpayable 589,996
Provisions 155,980
TotalCurrentLiabilities 1,677,072 9,295,402
NoncurrentLiabilities
Interestbearingloansandborrowings 164,374
Provisions 62,017
TotalNon
current
Liabilities
226,391
TOTALLIABILITIES 1,903,463 9,295,402
NETASSETS 12,850,611 205
EQUITY
Contributedequity 7 30,678,545 18,723,452
Accumulatedlosses (17,827,835) (18,723,247)
Reserves (99)
TOTALEQUITY 12,850,611 205
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
IncomeStatement
5
Consolidated Parent
Note
Halfyear
ended
31Dec2007
Period
ended
31Dec2006
$ $
Professionalfeesrevenue 4,195,088
Interestrevenue 237,830
Otherrevenue 3 77,218
Totalrevenue 4,510,136
Occupancyexpenses
233,783
Salariesandemployeebenefitsexpenses 1,926,317 4,305,901*
Depreciationandamortisationexpenses 48,831
Impairmentlosses 215,826 12,204,097
Officeexpenses 594,759
Advertisingandmarketingexpenses 46,814
Otherexpenses 58,124
Interestexpenses 11,166
Profitbeforeincometax 1,374,516 (16,509,998)
Incometaxexpense 479,104
Profitafterincometax 895,412 (16,509,998)
Netprofit/(loss)
for
the
period
895,412
(16,509,998)
Basicanddilutedearnings/(loss)pershareforprofit
attributabletotheordinaryequityholderoftheparent 1.57 (73.79)
*Relatestotheexpensingofsharebasedpaymentstodirectorsandcertainemployees.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
CashFlowStatement
6
Consolidated Parent
Note
Halfyear
ended
31Dec2007
Period
ended
31Dec2006
$ $
Cashflowsfromoperatingactivities
Receiptsfromcustomers 2,556,733
Paymentstosuppliersandemployees (2,299,115)
Interestreceived 212,304
Rentreceived 818
Sundryincome
1,549
Interestandothercostsoffinancepaid (5,220)
Netcashflowsfromoperatingactivities 467,069
Cashflowsfrominvestingactivities
Purchaseofplantandequipment (9,950)
Proceedsfromthedisposalofplantandequipment 1,000
Paymentforavailableforsaleinvestments (3,982)
Paymentforacquisitionofbusinessesnetofcash
acquired (6,652,695)
Netcashflowsusedininvestingactivities (6,665,627)
Cashflowsfromfinancingactivities
Proceedsfromissueofshares 3,628,130
Paymentsforcapitalraisingcosts (944,763)
Repaymentoffinanceleaseliabilities (18,175)
Paymentforthesettlementofliabilityassumedon
acquisitionofLawCentralCoPtyLtd (214,665)
Netcashflowsfromfinancingactivities 2,450,527
Netdecreaseincashheld (3,748,031)
Cashandcashequivalentsatthebeginningofthe
period
8,788,735
Cashandcashequivalentsattheendoftheperiod 5,040,704
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
StatementofChangesinEquity
7
PARENT
Issued
Capital
Accumulated
Losses
Total
Equity
$ $ $
At26June2006
Lossfortheperiod (16,509,998) (16,509,998)
Totalincomeandexpensefortheperiod (16,509,998) (16,509,998)
EquityTransactions:
Sharesissued
16,509,998
16,509,998
At31December2006 16,509,998 (16,509,998)
CONSOLIDATED
Issued
Capital
Accumulated
Losses
Net
Unrealised
Gains
Reserve
Total
Equity
$ $ $ $
At1July2007 18,723,452 (18,723,247) 205
Netfairvaluelossesonavailable
forsaleinvestments (99) (99)
Totalincomeandexpenseforthe
periodrecogniseddirectlyinequity (99) (99)
Profitfortheperiod 895,412 895,412
Totalincomeandexpenseforthe
period 895,412 (99) 895,313
EquityTransactions:
Sharesissued 13,045,708 13,045,708
Transactioncosts
on
share
issue
(1,090,615)
(1,090,615)
At31December2007 30,678,545 (17,827,835) (99) 12,850,611
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
NotestoandformingpartoftheFinancialReport
8
1)
CORPORATEINFORMATION
Thehalfyear financialreportof IntegratedLegalHoldingsLimited (theCompany) forthehalfyear
ended31December2007wasauthorisedforissueinaccordancewitharesolutionoftheDirectors
on29February2008. IntegratedLegalHoldingsLimitedisacompanyincorporatedinAustraliaand
limitedbyshares,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
fortheyearended30June2007andconsideredtogetherwithanypublicannouncementsmadeby
IntegratedLegalHoldingsLimitedanditscontrolledentities(theGroup)duringthehalfyearended
31December2007inaccordancewiththecontinuousdisclosureobligationsundertheCorporations
Act2001.
a)
Basisofpreparation
This general purpose condensed financial report for the halfyear ended 31 December 2007 has
been prepared inaccordancewithAASB134 InterimFinancialReportingand theCorporationsAct
2001.
Apart from the adoption of new accounting policies noted below, the accounting policies and
methodsofcomputationarethesameasthoseadoptedinthemostrecentannualfinancialreport.
Thehalfyearfinancialreport isprepared inAustraliandollarsandonahistoricalcostbasis,except
foravailableforsaleinvestments,whichhavebeenmeasuredatfairvalue.
For the purposes of preparing the halfyear financial report, the halfyear has been treated as a
discretereportingperiod.
b)
Significant
accounting
policies
Theaccountingpoliciesadoptedareconsistentwiththosedisclosedintheannualfinancialreportfor
theperiodended30June2007whichareinaccordancewithaccountingstandards inplaceatthat
date. The adoption of new and amending standards and interpretations mandatory for annual
periods beginning on or after 1 July 2007 did not have a significant impact on the financial
performanceandpositionoftheGroup.
c)
Basisofconsolidation
The halfyear consolidated financial statements comprise the financial statements of Integrated
LegalHoldingsLimitedanditssubsidiariesasat31December2007.
Subsidiariesareallthoseentities(includingspecialpurposeentities)overwhichtheGrouphasthe
power togovern the financialandoperating policiessoas toobtainbenefits from theiractivities.
Theexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleare
consideredwhenassessingwhetheragroupcontrolsanotherentity.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
NotestoandformingpartoftheFinancialReport
9
The
financial
statements
of
the
subsidiaries
are
prepared
for
the
same
reporting
period
as
theparentcompany,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.
d)
Businesscombinations
Thepurchase
method
of
accounting
is
used
to
account
for
all
business
combinations
regardless
of
whetherequity instrumentsorotherassetsareacquired.Cost ismeasuredasthefairvalueofthe
assets given, shares issued or liabilities incurred or assumed at the date of exchange plus costs
directly attributable to the combination. Where equity instruments are issued in a business
combination, the fair value of the instruments is their published market price as at the date of
exchange. Transaction costs arising on the issue of equity instruments are recognised directly in
equity.
Except fornoncurrentassetsordisposalgroupsclassifiedasheldforsale(whicharemeasuredat
fair value less costs to sell), all identifiable assets acquired and liabilities and contingent liabilities
assumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate.
The
excess
of
the
cost
of
the
business
combination
over
the
net
fair
value
of
the
Groups
share
of
the
identifiablenetassetsacquired isrecognisedasgoodwill. Ifthecostofacquisition is lessthanthe
Groupsshareofthenetfairvalueofthe identifiablenetassetsofthesubsidiary,thedifference is
recognisedasagainintheincomestatement,butonlyafterareassessmentoftheidentificationand
measurementofthenetassetsacquired.
Wheresettlementofanypartoftheconsideration isdeferred,theamountspayable in the future
are discounted to their present value as at the date of exchange. The discount rate used is the
entitys incrementalborrowingrate,beingtherateatwhichasimilarborrowingcouldbeobtained
fromanindependentfinancierundercomparabletermsandconditions.
e)
Trade
and
other
receivables
Trade receivables are initially recognised at the original fee amount. An estimate is made for
doubtfuldebtswhencollectionofthefullamountisnolongerprobable. Baddebtsareincludedin
the income statement when identified. The Groups standard terms for settlement for trade
receivablesare30days.
Collectabilityoftradereceivablesisreviewedonanongoingbasis. Individualdebtsthatareknown
tobeuncollectiblearewrittenoffwhenidentified. Anallowancefordoubtfuldebtsisraisedwhen
thereisobjectiveevidencethattheGroupwillnotbeabletocollectthedebt.
f)
Workinprogress
Work inprogress representscosts incurredand includesprofit recognised todateon thevalueof
workcompletedonmattersthatare inprogressatbalancedate. Costs includesbothvariableand
fixedcostsdirectlyrelatedtomatters.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
NotestoandformingpartoftheFinancialReport
10
Workin
progress
is
valued
at
net
realisable
value
after
providing
for
any
foreseeable
losses.
g)
Investmentsandotherfinancialassets
Financialassets inthescopeofAASB139FinancialInstruments:RecognitionandMeasurementare
classifiedaseitherfinancialassetsatfairvaluethroughprofitorloss,loansandreceivables,heldto
maturity investments or availableforsale financial assets. When financial assets are recognised
initially,theyaremeasuredatfairvalue,plus, inthecaseof investmentsnotatfairvaluethrough
profitor loss,directlyattributabletransactioncosts. TheGroupdeterminestheclassificationof its
financial assets upon initial recognition and, when allowed and appropriate, reevaluates this
designationateachfinancialyearend.
Allregular
way
purchases
and
sales
of
financial
assets
are
recognised
on
the
trade
date;
ie
the
date
that the Group commits to purchase the asset. Regular way purchases or sales are purchases or
sales of financial assets under contracts that require delivery of the assets within the period
establishedgenerallybyregulationorconventioninthemarketplace.
i) Availableforsaleinvestments
Availableforsale investments are those nonderivative financial assets that are designated as
availableforsaleorarenotclassifiedasfinancialassetsatfairvaluethroughprofitorloss,loansand
receivables,orheldtomaturityinvestments. Afterinitialrecognitionavailableforsaleinvestments
aremeasuredatfairvaluewithgainsorlossesbeingrecognisedasaseparatecomponentofequity
untilthe investment inderecognisedoruntilthe investment isdeterminetobe impaired,atwhich
time
the
cumulative
gain
or
loss
previously
reported
in
equity
is
recognised
in
profit
or
loss.
Thefairvaluesofinvestmentsthatareactivelytradedinorganisedfinancialmarketsaredetermined
byreference toquotedmarketbidpricesat thecloseofbusinesson thebalancesheetdate. For
investments with no active market, fair values are determined using valuation techniques. Such
techniques include: using recent arms length market transactions; reference to current market
valueofanotherinstrumentthatissubstantiallythesame;discountedcashflowanalysisandoption
pricing models making as much use of available and supportable market data as possible and
keepingjudgementalinputstoaminimum.
h)
Plantandequipment
Plant
and
equipment
is
stated
at
historical
cost
less
accumulated
depreciation
and
any
accumulated
impairment losses. Suchcostincludesthecostofreplacingpartsthatareeligibleforcapitalisation
whenthecostofreplacingthepartisincurred. Similarly,wheneachmajorinspectionisperformed,
itscostisrecognisedinthecarryingamountoftheplantandequipmentasareplacementonlyifitis
eligible for capitalisation. All other repairs and maintenance are recognised in profit or loss as
incurred.o
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
NotestoandformingpartoftheFinancialReport
11
Depreciationrates
used
for
each
class
of
assets
are
as
follows:
Classoffixedasset Useful
life
Depreciation
rates
Depreciation
method
Computerequipmentandsoftware 2 3years 33.3340.00% Straightline
Officeplantandequipment 310years 10.0033.33% Straightline
Officefurniture 315years 6.6733.33% Straightline
Leaseholdimprovements Shorterofusefullifeandremaining
periodofthelease
Straightline
Leasedequipment Termoflease Straightline
Motorvehicles 5years 20.00% Straightline
The assets residual values, useful lives and amortisation methods are reviewed, and adjusted if
appropriate,ateachbalancedate.
Anitemofplantandequipmentisderecognisedupondisposalorwhennofurtherfutureeconomic
benefitsareexpectedfromitsuseordisposal. Anygainorlossarisingonderecognitionoftheasset
(calculated as the difference between the net disposal proceeds and the carrying amount of the
asset)isincludedinprofitorlossintheyeartheassetisderecognised.
i)
Leases
Thedeterminationofwhetheranarrangement isorcontainsa lease isbasedon thesubstanceof
the
arrangement
and
requires
an
assessment
of
whether
the
fulfilment
of
the
arrangement
is
dependentontheuseofaspecificassetorassetsandthearrangementconveysarighttousethe
asset.
i) Groupasalessee
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to
ownershipofthe leased item,arecapitalisedat the inceptionof the leaseat the fairvalueofthe
leasedassetor,iflower,atthepresentvalueoftheminimumleasepayments. Leasepaymentsare
apportioned between the finance charges and reduction of the lease liability so as to achieve a
constantrateofinterestontheremainingbalanceoftheliability. Financechargesarerecognisedas
anexpenseinprofitorloss.
Capitalised leasedassetsaredepreciatedovertheshorteroftheestimateduseful lifeoftheasset
andthe leaseterm ifthere isnoreasonablecertaintythattheGroupwillobtainownershipbythe
endoftheleaseterm.
Operatingleasepaymentsarerecognisedasanexpenseinthe incomestatementonastraightline
basisovertheleaseterm. Operatingleaseincentivesarerecognisedasaliabilitywhenreceivedand
subsequently reduced by allocating lease payments between rental expense and reduction of the
liability.
j)
Impairmentofnonfinancialassetsotherthangoodwill
Intangibleassets thathavean indefiniteuseful lifeare notsubject toamortisationandare tested
annuallyforimpairmentormorefrequentlyifeventsorchangesincircumstancesindicatethatthey
might be impaired. Other assets are tested for impairment whenever events or changes in
circumstancesindicatethatthecarryingamountmaynotberecoverable.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
NotestoandformingpartoftheFinancialReport
12
The
Group
conducts
an
annual
internal
review
of
asset
values,
which
is
used
as
a
source
ofinformation to assess for any indicators of impairment. External factors, such as changes in
expected future processes, technology and economic conditions, are also monitored to assess for
indicators of impairment. If any indication of impairment exists, an estimate of the assets
recoverableamountiscalculated.
An impairment loss isrecognisedfortheamountbywhichtheassetscarryingamountexceeds its
recoverableamount. Recoverableamountisthehigherofanassetsfairvaluelesscoststoselland
valueinuse. Forthepurposesofassessingimpairment,assetsaregroupedatthelowestlevelsfor
whichthereareseparatelyidentifiablecashinflowsthatarelargelyindependentofthecashinflows
from theotherassetsorgroupsofassets (cashgeneratingunits). Nonfinancialassetsother than
goodwill
that
suffered
impairment
are
tested
for
possible
reversal
of
the
impairment
whenevereventsorchangesincircumstancesindicatethattheimpairmentmayhavereversed.
k)
Goodwillandintangibles
Goodwill
Goodwillacquiredinabusinesscombinationisinitiallymeasuredatcostbeingtheexcessofthecost
of the business combination over the Groups interest in the net fair value of the acquirees
identifiableassets,liabilitiesandcontingentliabilities.
Followinginitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.
For
the
purposes
of
impairment
testing,
goodwill
acquired
in
a
business
combination
is,
from
the
acquisition date, allocated to each of the Groups cashgenerating units, or groups of cash
generatingunits,thatareexpectedtobenefitfromthesynergiesofthecombination,irrespectiveof
whetherotherassetsorliabilitiesoftheGroupareassignedtothoseunitsorgroupsofunits. Each
unitorgroupofunitstowhichthegoodwillissoallocated:
representsthelowestlevelwithintheGroupatwhichthegoodwillismonitoredforinternal
managementpurposes;and
isnotlargerthanasegmentbasedoneithertheGroupsprimaryortheGroupssecondary
reportingformatdeterminedinaccordancewithAASB114SegmentReporting.
Impairment isdeterminedbyassessingtherecoverableamountofthecashgeneratingunit(group
ofcashgeneratingunits),towhichthegoodwillrelates. Whentherecoverableamountofthecash
generatingunit(groupofcashgeneratingunits)islessthanthecarryingamount,animpairmentloss
isrecognised. Recoverableamountisthehigherofanassetsfairvaluelesscoststosellandvaluein
use. Whengoodwill formspartofa cashgeneratingunit (groupofcashgeneratingunits)and an
operationwithinthatunit isdisposedof,thegoodwillassociatedwiththeoperationdisposedof is
included inthecarryingamountoftheoperationwhendeterminingthegainor lossondisposalof
theoperation. Goodwilldisposedofinthismannerismeasuredbasedontherelativevaluesofthe
operationdisposedofandtheportionofthecashgeneratingunitretained.
Impairment
losses
recognised
for
goodwill
are
not
subsequently
reversed.
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INTEGRATEDLEGALHOLDINGSLIMITED
FINANCIALREPORTFORTHEHALF-YEARENDED
31DECEMBER2007
ACN120394194
NotestoandformingpartoftheFinancialReport
13
IntangiblesIntangible assets acquired separately or in a business combination are initially measured at cost.
Thecostofan intangibleassetacquiredinabusinesscombinationis itsfairvalueasatthedateof
acquisition. Following initialrecognition, intangibleassetsarecarriedatcost lessanyaccumulated
amortisation and any accumulated impairment losses. Internally generated intangible assets,
excludingcapitaliseddevelopmentcosts,arenotcapitalisedandexpenditureisrecognisedinprofit
orlossintheyearinwhichtheexpenditureisincurred.
Theuseful livesof intangibleassetsareassessedtobeeitherfiniteor indefinite. Intangibleassets
withfinite livesareamortisedovertheuseful lifeandtestedfor impairmentwheneverthere isan
indicationthattheintangibleassetmaybeimpaired. Theamortisationperiodandtheamortisation
methodfor
an
intangible
asset
with
afinite
useful
life
is
reviewed
at
least
at
each
financial
year
end.
Changes in the expected useful life or the expected pattern of consumption of future economic
benefitsembodiedintheassetareaccountedforprospectivelybychangingtheamortisationperiod
ormethod,asappropriate,whichisachangeinaccountingestimate. Theamortisationexpenseon
intangibleassetswith finite lives is recognised in profitor loss in theexpense categoryconsistent
withthefunctionoftheintangibleasset.
Intangibleassetswithindefiniteusefullivesaretestedforimpairmentannuallyeitherindividuallyor
atthecashgeneratingunitlevelconsistentwiththemethodologyoutlinedforgoodwillabove. Such
intangiblesarenotamortised. Theusefullifeofanintangibleassetwithanindefinitelifeisreviewed
eachreportingperiodtodeterminewhetherindefinitelifeassessmentcontinuestobesupportable.
If
not,
the
change
in
the
useful
life
assessment
from
indefinite
to
finite
is
accounted
for
as
a
change
inanaccountingestimateandisthusaccountedforonaprospectivebasis.
Gains or losses arising from derecognition of an intangible asset are measured as the difference
betweenthenetdisposalproceedsandthecarryingamountoftheassetandarerecognisedinprofit
orlosswhentheassetisderecognised.
l) Interestbearingloansandborrowings
All loansandborrowingsare initiallyrecognisedatthefairvalueoftheconsiderationreceived less
directlyattributabletransactioncosts.
After
initial
recognition,
interest
bearing
loans
and
borrowings
are
subsequently
measured
at
amortisedcostusingtheeffectiveinterestmethod. Feespaidontheestablishmentofloanfacilities
thatareyieldrelatedareincludedaspartofthecarryingamountoftheloansandborrowings.
Borrowingsareclassifiedascurrent liabilitiesunlesstheGrouphasanunconditionalrighttodefer
settlementoftheliabilityforatleast12monthsafterthebalancesheetdate.
Borrowing
costs
Borrowingcostsarerecognisedasanexpensewhenincurred.
m)
Provisionsandemployeeleavebenefits
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.
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When
the
Group
expects
some
or
all
of
a
provision
to
be
reimbursed,
for
example
under
aninsurance contract, the reimbursement is recognised as a separate asset but only when the
reimbursementisvirtuallycertain. Theexpenserelatingtoanyprovisionispresentedintheincome
statementnetofanyreimbursement.
Provisions are measured at the present value of managements best estimate of the expenditure
requiredtosettlethepresentobligationatthebalancesheetdate. Iftheeffectofthetimevalueof
moneyismaterial,provisionsarediscountedusingacurrentpretaxratethatreflectsthetimevalue
of money and the risks specific to the liability. The increase in the provision resulting from the
passageoftimeisrecognisedinfinancecosts.
Employee
leave
benefitsi) Wages,salaries,annualleaveandsickleave
Liabilities forwagesandsalaries, includingnonmonetarybenefits, annual leaveandaccumulating
sickleaveexpectedtobesettledwithin12monthsofthereportingdatearerecognisedinrespectof
employeesservicesuptothereportingdate. Theyaremeasuredattheamountsexpectedtobe
paidwhentheliabilitiesaresettled. Liabilitiesfornonaccumulatingsickleavearerecognisedwhen
theleaveistakenandaremeasuredattheratespaidorpayable.
ii)
Longserviceleave
The liability for long service leave is recognised and measured as the present value of expected
futurepaymentstobemadeinrespectofservicesprovidedbyemployeesuptothereportingdate
using
the
projected
unit
credit
method.
Consideration
is
given
to
expected
future
wage
and
salary
levels,experienceofemployeedepartures,andperiodsofservice. Expected future paymentsare
discountedusingmarketyieldsatthereportingdateonnationalgovernmentbondswithtermsto
maturityandcurrenciesthatmatch,ascloselyaspossible,theestimatedfuturecashoutflows.
n)
Revenuerecognition
Revenueisrecognisedandmeasuredatthefairvalueoftheconsiderationreceivedorreceivableto
theextent itisprobablethattheeconomicbenefitswillflowtotheGroupandtherevenuecanbe
reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
i)
Rendering
of
services
Revenue from the provision of legal services is recognised on a stage of completion basis in the
periodinwhichthelegalserviceisprovidedandiscalculatedwithreferencetotheprofessionalstaff
hoursincurredoneachmatter.
ii)
Onlinelegalandnonlegaldocumentsandpublications
Revenuefromtheprovisionofonlinelegalandnonlegaldocumentsandpublicationsisrecognised
onanaccrualsbasisatthetimeofdeliveryofthedocumentstocustomers.
iii)
Subscriptionincome
Revenue frommembershipsgranting thesubscriberaccesstotheknowledgebaseofweekly legal
bulletins,onlinetools,calculatorsandservices isrecognisedonastraight linebasiswhichreflects
thetiming,natureandbenefitprovided. Allmembershipshaveasubscriptionperiodofeitherthree
ortwelvemonths.
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iv)
Interestincome
Revenue isrecognisedas interestaccruesusingtheeffective interestmethod. This isamethodof
calculating the amortised cost of a financial asset and allocating the interest income over the
relevantperiodusingtheeffective interestrate,which istheratethatexactlydiscountsestimated
futurecashreceiptsthroughtheexpectedlifeofthefinancialassettothenetcarryingamountofthe
financialasset.
v)
Dividends
RevenueisrecognisedwhentheGroupsrighttoreceivethepaymentisestablished.
vi)
Rentalrevenue
Rentalrevenue
from
investment
properties
is
accounted
for
on
astraight
line
basis
over
the
lease
term. Contingentrentalincomeisrecognizedasincomeintheperiodsinwhichitisearned. Lease
incentivesgrantedarerecognizedasanintegralpartofthetotalrentalincome.
o)
Incomeandothertaxes
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxation authorities based on the current period's
taxableincome.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenacted
orsubstantivelyenactedbythebalancesheetdate.
Deferredincometaxisprovidedonalltemporarydifferencesatthebalancesheetdatebetweenthe
tax
bases
of
assets
and
liabilities
and
their
carrying
amounts
for
financial
reporting
purposes.
Deferredincometaxliabilitiesarerecognisedforalltaxabletemporarydifferencesexcept:
whenthedeferredincometaxliabilityarisesfromtheinitialrecognitionofgoodwillorofan
assetorliabilityinatransactionthatisnotabusinesscombinationandthat,atthetimeof
thetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;or
when the taxable temporary difference is associated with investments in subsidiaries,
associates or interests injoint ventures, and the timing of the reversal of the temporary
differencecanbecontrolledanditisprobablethatthetemporarydifferencewillnotreverse
in
the
foreseeable
future.
Deferredincometaxassetsarerecognisedforalldeductibletemporarydifferences,carryforwardof
unusedtaxcreditsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbe
availableagainstwhich thedeductible temporarydifferencesand thecarryforwardofunused tax
creditsandunusedtaxlossescanbeutilised,except:
whenthedeferred incometaxassetrelatingtothedeductibletemporarydifferencearises
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
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future
and
taxable
profit
will
be
availableagainst
which
the
temporary
difference
can
be
utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and
reducedtotheextentthat it isno longerprobablethatsufficienttaxableprofitwillbeavailableto
allowallorpartofthedeferredincometaxassettobeutilised.
Unrecognised deferred income tax assets are reassessed at each balance sheet date and are
recognised to the extent that it has become probable that future taxable profit will allow the
deferredtaxassettoberecovered.
Deferredincome
tax
assets
and
liabilities
are
measured
at
the
tax
rates
that
are
expected
to
apply
to
theyearwhentheasset isrealisedorthe liability issettled,basedontaxrates(andtax laws)that
havebeenenactedorsubstantivelyenactedatthebalancesheetdate.
Incometaxesrelatingtoitemsrecogniseddirectlyinequityarerecognisedinequityandnotinprofit
orloss.
Deferredtaxassetsanddeferredtax liabilitiesareoffsetonly ifa legallyenforceablerightexiststo
set off current tax assets against current tax liabilities and the deferred tax assets and liabilities
relatetothesametaxableentityandthesametaxationauthority.
Tax
consolidation
legislation
Integrated Legal Holdings Limited and its whollyowned Australian controlled entities have
implementedthetaxconsolidationlegislationasof10August2007.
Theheadentity,IntegratedLegalHoldingsLimitedandthecontrolledentitiesinthetaxconsolidated
groupcontinuetoaccountfortheirowncurrentanddeferredtaxamounts. TheGrouphasapplied
thegroupallocationapproachindeterminingtheappropriateamountofcurrenttaxesanddeferred
taxestoallocatetomembersofthetaxconsolidatedgroup.
In addition to its own current and deferred tax amounts, Integrated Legal Holdings Limited also
recognisesthecurrenttax liabilities(orassets)andthedeferredtaxassetsarisingfromunusedtax
losses
and
unused
tax
credits
assumed
from
controlled
entities
in
the
tax
consolidated
group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognisedasamountsreceivablefromorpayabletootherentitiesintheGroup.
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.
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Other
taxesRevenues,expensesandassetsarerecognisednetoftheamountofGSTexcept:
when the GST incurred on a purchase of goods and services is not recoverable from the
taxationauthority, inwhichcasetheGST isrecognisedaspartofthecostofacquisitionof
theassetoraspartoftheexpenseitemasapplicable;and
receivablesandpayables,whicharestatedwiththeamountofGSTincluded.
ThenetamountofGSTrecoverablefrom,orpayableto,thetaxationauthorityisincludedaspartof
receivablesorpayablesinthebalancesheet.
CashflowsareincludedintheCashFlowStatementonagrossbasisandtheGSTcomponentofcash
flows arising from investing and financing activities, which is recoverable from, or payable to, the
taxationauthorityisclassifiedaspartofoperatingcashflows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or
payableto,thetaxationauthority.
3)
OTHERREVENUE
Consolidated Parent
Halfyear
ended
31Dec2007Period
ended
31Dec2006
$ $
Rentalrevenue 818
Disbursementsincome 74,851
Sundryincome 1,549
77,218
4)
CASHANDCASHEQUIVALENTS
Consolidated
ParentAt
31Dec2007
At
30Jun2007
$ $
Forthepurposesofthehalfyearcashflowstatement,cashand
cashequivalentsarecomprisedofthefollowing:
Cashatbankandinhand 639,898
Shorttermdeposits 4,400,806 8,788,735
5,040,704 8,788,735
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a)
Descriptionsof
the
Groups
other
intangible
assets
Otherintangiblesrepresentthevalueofleasedpremisesacquiredupontheacquisitionofthe legal
practice of Peter Marks (see note 10) and is carried at cost less accumulated amortisation. This
intangible asset has been assessed as having a finite life and is amortised using the straight line
methodovertheremainingtermofthe lease. Theamortistionhasbeenrecognised inthe income
statementinthelineitemdepreciationandamortisationexpenses.
7) ISSUEDCAPITAL
a) Ordinaryshares
Consolidated Parent
31Dec
2007
30
Jun
2007
$ $
63,538,320ordinaryfullypaidshares 30,678,545 18,723,452
b)
Movementsinordinarysharecapital
Consolidated Shares $
Openingbalanceat1July2007 37,446,904 18,723,452
Issueofsharesatavalueof50centspershare
on17August2007:
Share
issue
for
initial
public
offering
Sharesissuedforacquisitionofsubsidiary
24,833,3201,258,096
12,416,660629,048
Capitalraisingcosts,netofrelatedincometaxbenefits (1,090,615)
Balanceat31December2007 63,538,320 30,678,545
Effective1July1998,theCorporations legislationabolishedtheconceptsofauthorisedcapitaland
parvalueshares. Accordingly,thecompanydoesnothaveauthorisedcapitalorparvalueinrespect
ofitsissuedcapital.
Fullypaidordinarysharescarryonevotepershareandcarrytherighttodividends.
8)
SEGMENTINFORMATION
The company operates predominantly in one business and geographical segment, being the
identification,acquisitionand integrationof lawfirmsand informationtechnologyorganisationsto
provideanetworkedservicetoclients.
9)
CONTINGENTLIABILITIESANDCONTINGENTASSETS
Therearenocontingentliabilitiesorassetsasat31December2007.
10)
BUSINESSCOMBINATIONS
Accountingforthefollowingacquisitionofbusinessesremainsprovisionallydeterminedbecauseall
circumstancesandfactorsaffectingfairvaluesoftheidentifiablenetassetsacquiredhaveyettobe
finalisedattheendoftheperiod.
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Thefactors
contributing
to
goodwill
recognised
relate
to
the
synergies
existing
within
the
acquired
businessesanditscombinedprofessionalworkforce.
AcquisitionofTalbotOlivier
On11 January2006, thecompany (through itsagent,LawCentralCoPtyLtd)and the foundation
partnersofTalbotOlivierenteredintoanOptionAgreementwherebyanoptionwasgrantedtothe
company,exercisablethroughitswhollyownedsubsidiaryTalbotOlivierPtyLtd,toacquire100%of
theTalbotOlivierbusinessassets. Thisagreementwassubsequentlyvariedbyanagreementdated
19September2006andwas furtheramendedbyagreementsbetweenthesamepartiesdated12
March2007and15May2007.
Theoption
was
exercised
on
10
August
2007
and
the
purchase
price
agreed
to
be
paid
in
cash
upon
theexerciseoftheoptionwas$3,194,648.
TalbotOlivierPtyLtd,tradingasTalbotOlivier,wasincorporatedon10August2007andisawholly
ownedsubsidiaryofIntegratedLegalHoldingsLimited.
Thefollowingconstitutesthecalculationoftheconsiderationgivenandthefairvalueofnetassets
acquiredinTalbotOlivier:$
Consideration
Cash 3,194,648
Directcostsrelatingtotheacquisition 167,394
Totalcash
consideration
3,362,042
Totalacquisitioncost 3,362,042
Fair
Value
$
Carrying
Amount
$
Netassetsacquired
Assets
Plantandequipment 130,866 130,866
Workinprogress 200,000 200,000
Prepayments 164,079 164,079
Totalassetsacquired 494,945 494,945
Liabilities
Provisionforinsurancepremium 134,136 134,136
Totalliabilitiesacquired 134,136 134,136
Netassetsacquired 360,809 360,809
Goodwillonacquisition 3,001,233
Fromthedateofacquisition,TalbotOlivierhascontributed$977,572tothenetprofitaftertaxof
theGroup.
If the combination had taken place at the beginning of the year, the profit from continuing
operations for the Group would have been $1,144,133 and revenue from continuing operations
wouldhavebeen$5,604,590.
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$
Thecashoutflowonacquisitionisasfollows:
Netcashacquiredwiththebusiness
Cashpaid 3,194,648
Netconsolidatedcashoutflow 3,194,648
BrettDaviesLawyers
On30March2007,thecompany(throughitsagent,LawCentralCoPtyLtd)andBrettDavies,owner
oftheBrettDaviesLawyersbusinessassets,enteredintoanOptionAgreementwherebyanoption
wasgranted
to
the
company,
exercisable
through
its
wholly
owned
subsidiary
Tax
Lawyers
Australia
PtyLtd,toacquire100%oftheBrettDaviesLawyersbusinessassets.
Theoptionwasexercisedon10August2007andthepurchasepriceagreedtobepaidincashupon
theexerciseoftheoptionwas$804,000.
TaxLawyersAustraliaPtyLtd,tradingasBrettDaviesLawyers,was incorporatedon8August2007
andisawhollyownedsubsidiaryofIntegratedLegalHoldingsLimited.
Thefollowingconstitutesthecalculationoftheconsiderationgivenandthefairvalueofnetassets
acquiredinBrettDaviesLawyers:
$
Consideration
Cash 804,000
Directcostsrelatingtotheacquisition 37,116
Totalcashconsideration 841,116
Totalacquisitioncost 841,116
Fair
Value
$
Carrying
Amount
$
Netassetsacquired
Assets
Plantandequipment 17,454 17,454
Totalassetsacquired 17,454 17,454
Netassetsacquired 17,454 17,454
Goodwillonacquisition 823,662
Thegoodwilldisclosedabove,beingtheexcessofthecostoftheacquisitionovertheidentifiablenet
assetsacquired,isnotfullysupportedbytheresultsofindependentvaluationsandhasbeenwritten
down to the independent valuationamountof$704,000. The impairmentexpense thathasbeen
recognisedintheincomestatementis$119,662.
Fromthedateofacquisition,BrettDaviesLawyershasincurredalossof$53,494. Thislossincludes
theimpairmentexpenseof$119,662.
If
the
combination
had
taken
place
at
the
beginning
of
the
year,
the
profit
from
continuing
operationsfortheGroupwouldhavebeen$929,435andrevenuefromcontinuingoperationswould
havebeen$4,652,359.
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$Thecashoutflowonacquisitionisasfollows:
Netcashacquiredwiththebusiness
Cashpaid 804,000
Netconsolidatedcashoutflow 804,000
AcquisitionofLawCentralCoPtyLtd
UnderthetermsoftheProspectusdated16May2007,thecompanyofferedtoacquire100%ofthe
fullypaidordinaryshares inthecapitalofLawCentralCoPtyLtd. Theofferwasconditionalupon
theacceptanceoftheofferbyatleast90%oftheLawCentralCoPtyLtdshareholdersby15August
2007.
Thisconditionwassatisfiedinfulland100%oftheLawCentralCoPtyLtdshareholdersacceptedthe
offer.
The consideration offered by Integrated Legal Holdings Limited was 0.105028 fully paid ordinary
sharesinthecompanytogetherwithacashpaymentof$0.04736011forevery1LawCentralCoPty
Ltdshare. Settlementtookplaceon10August2007and IntegratedLegalHoldingsLimited issued
1,258,096sharesinthecompanyandpaid$2,700,000incashtothevendors.
Thefollowingconstitutesthecalculationoftheconsiderationgivenandthefairvalueofnetassets
acquiredin
Law
Central
Co
Pty
Ltd:
$
Consideration
Cash 2,700,000
Totalcashconsideration 2,700,000
Sharesissuedatfairvalue 629,048
Totalacquisitioncost 3,329,048
Fair
Value
$
Carrying
Amount
$
Netassetsacquired
Assets
Cash
and
cash
equivalents
220,953
220,953
Tradeandotherreceivables 995,879 995,879
Property,plantandequipment 37,173 37,173
Deferredtaxassets 14,684 14,684
1,268,689 1,268,689
Liabilities
Tradeandotherpayables 200,031 200,031
Interestbearingloansandborrowings 15,060 15,060
Incometaxpayable 80,972 80,972
Provisions 259,742 259,742
Totalliabilitiesacquired 555,805 555,805
Netassetsacquired 712,884 712,884
Goodwillonacquisition 2,616,164
Thegoodwilldisclosedabove,beingtheexcessofthecostoftheacquisitionovertheidentifiablenet
assetsacquired,isnotfullysupportedbytheresultsofindependentvaluationsandhasbeenwritten
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downto
the
independent
valuation
amount
of
$2,520,000.
The
impairment
expense
that
has
been
recognisedintheincomestatementis$96,164.
Fromthedateofacquisition,LawCentralCoPtyLtdhascontributed$95,048tothenetprofitofthe
Group.
If the combination had taken place at the beginning of the year, the profit from continuing
operationsfortheGroupwouldhavebeen$891,714andrevenuefromcontinuingoperationswould
havebeen$4,611,480.
$
Thecash
outflow
on
acquisition
is
as
follows:
Netcashacquiredwiththebusiness 220,953
Cashpaid 2,700,000
Netconsolidatedcashoutflow 2,479,047
PeterMarksSuccessionLawyers
On 19 September 2007, the company, through its wholly owned subsidiary Talbot Olivier Pty Ltd,
acquired 100% of the legal practice of the late Peter Marks trading as Peter Marks Succession
Lawyers. Thisacquisition wasmerged into theexistingpracticeofTalbotOlivier. Theacquisition
promotes the companys business strategy which encourages acquired practices to enhance their
owngrowth
aspirations
via
the
acquisition
of
complementary
practices.
The assets purchased include goodwill and business assets excluding all work in progress and
outstandingdebtors.
Thefollowingconstitutesthecalculationoftheconsiderationgivenandthefairvalueofnetassets
acquiredinthepracticeofPeterMarksSuccessionLawyers:$
Consideration
Cash 50,000
Deferredcashconsideration 75,000
Totalcashconsideration 125,000
Totalacquisition
cost
125,000
Fair
Value
$
Carrying
Amount
$
Netassetsacquired
Assets
Plantandequipment 10,722 10,722
Intangibleassets 163,254 163,254
Totalassetsacquired 173,976 173,976
Liabilities
Deferredtaxliability 48,976 48,976
Totalliabilitiesacquired 48,976 48,976
Netassetsacquired 125,000 125,000
Goodwillonacquisition
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Itis
impracticable
to
disclose
Peter
Marks
Succession
Lawyers
profit
and
revenue
from
continuing
operations for the Group prior to acquisition as the information is not available. The acquirees
contribution to the net profit of the Group cannot be determined as this business has been
incorporatedintotheTalbotOlivierbusiness.
$
Thecashoutflowonacquisitionisasfollows:
Netcashacquiredwiththebusiness
Cashpaid 125,000
Netconsolidatedcashoutflow 125,000
ShayneLeslie
On28September2007, thecompany, through itswhollyownedsubsidiary,TalbotOlivierPtyLtd,
acquiredthelegalpracticeofShayneLeslie. Thisacquisitionwasmergedintotheexistingpracticeof
TalbotOlivier.
Theconsiderationforthepurchaseiscashonly.
Thefollowingconstitutesthecalculationoftheconsiderationgivenandthefairvalueofnetassets
acquiredinthepracticeofShayneLeslie:$
Consideration
Cash 50,000Directcostsrelatingtotheacquisition 55,000
Totalcashconsideration 105,000
Totalacquisitioncost 105,000
Fair
Value
$
Carrying
Amount
$
Netassetsacquired
Goodwillonacquisition 105,000
ItisimpracticabletodiscloseShayneLesliesprofitandrevenuefromcontinuingoperationsforthe
Groupprior
to
acquisition
as
the
information
is
not
available.
The
acquirees
contribution
to
the
net
profit of the Group cannot be determined as this business has been incorporated into the Talbot
Olivierbusiness.
$
Thecashoutflowonacquisitionisasfollows:
Netcashacquiredwiththebusiness
Cashpaid 50,000
Netconsolidatedcashoutflow 50,000
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GHM:NR:ILH:016 26
Liability limited by a scheme approved under
Professional Standards Legislation.
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 ended31 December 2007, to the best of my knowledge and belief, there have been no contraventions of theauditor independence requirements of the Corporations Act 2001 or any applicable code of professional
conduct.
Ernst & Young
G H MeyerowitzPartnerPerth
29 February 2008
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GHM:NR:ILH:015 27
Liability limited by a scheme approved under
Professional Standards Legislation.
To the members of Integrated Legal Holdings Limited
Report on the Condensed Half-Year Financial Report
We have reviewed the accompanying half-year condensed financial report of Integrated Legal HoldingsLimited, which comprises the consolidated balance sheet as at 31 December 2007, and the consolidated
income statement, consolidated statement of changes in equity and consolidated cash flow statement for thehalf-year ended on that date, other selected explanatory notes and the Directors Declaration of theconsolidated entity comprising the company and the entities it controlled at the half-year end or from timeto time during the half-year.
Directors Responsibility for the Half- Year Financial Report
The directors of the company are responsible for the preparation and fair presentation of the half-yearfinancial report in accordance with Australian Accounting Standards (including the Australian AccountingInterpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaininginternal 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 accountingpolicies; 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) 2410Review of an Interim 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 2001 including: giving a trueand fair view of the consolidated entitys financial position as at 31 December 2007 and its performance for
the half-year ended on that date; and complying with Accounting Standard AASB 134 InterimFinancialReporting and the Corporations Regulations 2001 and other mandatory financial reporting requirements inAustralia. 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 annualfinancial 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 issubstantially less in scope than an audit conducted in accordance with Australian Auditing Standards andconsequently does not enable us to obtain assurance that we would become aware of all significant mattersthat 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 copyof which is included in the financial report.
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Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believethat the interim 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 December2007 and of its performance for the half-year ended on that date; and
(ii) complying with Accounting Standard AASB 134 Interim Financial Reporting and theCorporations Regulations 2001.
Ernst & Young
G H MeyerowitzPartnerPerth
29 February 2008
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