012.ASX IAW Oct 31 2007 Full Year Statuary Accounts to 30 June 2007

8/9/2019 012.ASX IAW Oct 31 2007 Full Year Statuary Accounts to 30 June 2007

1/41

INTEGRATEDLEGALHOLDINGSLIMITED

ACN120394194

(ASX:IAW)

FinancialReport

Fortheperiodfromincorporationon

26June2006to30June2007

o

p

s

o

u

e

o

y


2/41


ACN120394194

Contents

Corporateinformation

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

1

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

Balancesheet.........................................................................................................................12

Incomestatement..................................................................................................................13

Cashflowstatement..............................................................................................................14

Statementofchangesinequity.............................................................................................15

Notestothefinancialstatements.........................................................................................16

Directorsdeclaration

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

35

Auditorsindependencedeclaration.....................................................................................36

Independentauditreport......................................................................................................37

ASXadditionalinformation....................................................................................................39

o

p

s

o

u

e

o

y


3/41


ACN

120

394

194

CorporateInformation

1

ABN20120394194

Directors

TheHonJohnDawkins,Chairman

AnneTregonning,NonexecutiveDirector

ThomasHenn,ManagingDirector

CompanySecretary

BrettDavies

Registeredoffice

GroundFloor

201Adelaide

Terrace

Perth WA 6000

Principalplaceofbusiness

GroundFloor

201AdelaideTerrace

Perth WA 6000

Tel:(08)94634343

ShareRegister

SecurityTransferRegistrarsPtyLtd

770Canning

Highway

Applecross WA 6153

Tel: (08)93152333

IntegratedLegalHoldingsLimitedsharesarelistedontheAustralianStockExchange.

Solicitors

SteinepreisPaganin

Level4,NextBuilding

16MilliganStreet

Perth WA 6000

Bankers

BankofWesternAustraliaLimited

108StGeorgesTerrace

Perth WA 6000

Auditors

Ernst&Young

11MountsBayRoad

Perth WA 6000

o

p

s

o

u

e

o

y


4/41


5/41


ACN120394194

DirectorsReport(continued)

3

ThomasHenn,FTIA,GAICD,MTax,MESC,LLB(Munich)LLB(UWA)(ManagingDirector)

Appointed:26June2006

MrHenn

practiced

as

a

lawyer

in

Munich,

before

emigrating

from

Germany

to

Australia

in

1993.

AfterfinishingalawdegreeinAustralia,MrHennpracticedinaBigFouraccountingfirmandalso

variouslawfirms. HeisapracticinglawyerandcurrentlyworksforBrettDaviesLawyers. MrHenn

hasalsoservedasaboardmemberofapublicunlistedcompany.

MrHennisagraduateofTheUniversityofMunichandholdsaMasterofTaxationandaBachelorof

LawsdegreefromTheUniversityofWesternAustralia.

He is a Graduate Member of the Australian Institute of Company Directors and a Fellow of the

TaxationInstituteofAustralia.

WarrenBlack,

B.Com,

LLB

(Hons)


Resigned:6October2006

Mr Black is a qualified lawyer and accountant with nearly 18 years experience in taxation and

business law. He worked for 10 years at the Australian Taxation Office and has worked for eight

yearsasalawyer.

MrBlackhasexpertise intheareasoftaxplanningandstructuring inAustraliaand internationally,

asset protection, commercial law, accounting and superannuation, and more recently, internet

marketing.HewontheMallesonsStephenJacquesprizeforhisHonoursthesisonIncomeTaxand

CapitalGainsTax.

HemalModi,BSc(SoftwareEng),Dip.IT,MCP


Resigned:6October2006

Hemal is the Systems Development Manager at Brett Davies Lawyers. He is currently pursuing his

Honours inComputerSciencefromCurtinUniversityofTechnologyandhe isalsoworkingtowards

MCSD(MicrosoftCertifiedSystemsDeveloper)Certification.

Beneficialinterestsinthesharesofthecompanyandrelatedbodiescorporate

Asatthedateofthisreport,thebeneficialinterestsofthedirectorsinthesharesofIntegratedLegal

HoldingsLimitedwere:

Numberof

Ordinary

Shares

JDawkins 1,626,398

ATregonning 300,000

THenn 140,000

o

p

s

o

u

e

o

y


6/41


ACN120394194


4

COMPANYSECRETARY

ThomasHenn,FTIA,GAICD,MTax,MESC,LLB(Munich)LLB(UWA)

MrHenn

resigned

as

company

secretary

on

29

August

2007.

He

remains

a

director

of

the

company.

BrettDavies,FTIA,BJuris,LLB,LLM,BA(Hons),DipEd,MBA

MrDavieswasappointedcompanysecretaryon29August2007.

MrDaviesistheprincipalofBrettDaviesLawyers,ataxationandsuperannuationspecialistlawfirm

which has operated since 1994. He holds four degrees including both a Master of Business

Administration and Master of Laws and he is currently completing his Doctorate parttime at the

UniversityofWesternAustralia.

MrDavieswasNationalChairoftheLawCouncilofAustralia'sLegalPracticeManagementGroup.He

waselected

by

his

peers

to

the

Law

Council's

Legal

Practice

Section

executive

and

he

sits

on

the

Council's Taxation SubCommittee. He is the Deputy Convenor of the Law Society of WA Legal

Management and Development Committee and sits on the State's Taxation Committee. His

committee memberships also extend to nonlegal organisations including Chairman of the Art

GalleryofWesternAustraliaFoundation,pastpresidentofTheFriendsoftheArtGalleryofWestern

AustraliaandpastPresidentofhislocalRotaryClub.

MrDaviesisaregularpublicspeakeronpropertyandtaxationandhaslecturedattheUniversityof

WesternSydneyandatCurtinUniversityinPerth.

He is a director of Tax Lawyers Services Australia Pty Ltd, Tax Lawyers Australia Pty Ltd, Fortuna

FundsManagement

Ltd,

Law

Central

Co

Pty

Ltd

and

the

Customer

Service

Institute

of

Australia

Ltd.

DIVIDENDS

Nodividendsweredeclaredorpaidduringtheperiod.

PRINCIPALACTIVITIES

Thecompanywasformedtoactasalegalpracticeholdingcompany,althoughduringtheperiodno

legalpracticeshadyetbeenacquired.

o

p

s

o

u

e

o

y


7/41


ACN120394194


5

OPERATINGANDFINANCIALREVIEW

GroupOverview

IntegratedLegalHoldingsLimitedwasincorporatedon26June2006.

Thecompanysbusinessstrategyistoacquireandownhighquality,profitablelawfirms. Underthis

model,IntegratedLegalHoldingsLimitedseekstodeliverinvestorsexcellentcapitalgrowthreturns

basedontheacquisitionof legalpracticesandsecureyieldbasedreturnsfromdividendpayments

ontheprofits.

During the period, the company moved to commence its listing on the Australian Stock Exchange

(ASX)throughtheissueofaProspectus,dated16May2007,forthepurposesofraising$12,000,000

in new equity. The company listed on 17 August 2007 and the offer was oversubscribed with

$12,416,660raised

as

a

result.

The

success

of

the

initial

public

offering

represents

an

endorsement

ofthecompanysbusinessmodelandstrategicplan.

IntegratedLegalHoldingsLimitedactsasaholdingcompanyforlawfirmswhichareacquiredeither

asstandaloneentitiesorastuckinsforexistinglawfirms. Acquiredlawfirmsassetsaresoldto

IntegratedLegalHoldingsLimitedforapaymentbasedonhistoricalrevenueandnetprofitaftertax

availabletoequitypartners. Whereacquiredasastandalonefirm,theacquiredlawfirmcontinues

topracticeunderitsownname,withthesamestaffandinitscurrentlocation.

Integrated Legal Holdings Limiteds intention is to support the growth of individual member

practices, both organically and by acquisition, and to provide each firm with the ability to achieve

strongpractice

and

profit

improvement

as

a

result

of

the

competitive

advantages

offered

as

part

of

aleadingnationalgroup.

PerformanceIndicators

ManagementandtheBoardmonitorthecompanysoverallperformance,fromtheexecutionofits

strategicplanthroughtotheperformanceofthecompanyagainstoperatingplans,financialbudgets

andkeyperformanceindicators(KPIs).

OperatingResultsforthePeriod

Having successfully issued the Prospectus for the raising of $12,000,000 in equity, the period was

oneinwhichstrongfoundationswerelaidforthefuturegrowthofthecompany.

The companys net loss for the period after income tax is $18,723,247. The figure includes the

followingexpenses:

Sharebasedpaymentexpensesof$6,519,355pertainingtotheissueofsharesatadeemed

valueof50centspersharetodirectors,supportersandemployees;and

Impairment loss of $12,204,097 on the shares issued at a deemed value of 50 cents per

sharetovendorsofTalbotOlivierbusinessassets,BrettDaviesLawyersbusinessassetsand

LawCentralCoPtyLtdshareholders.

o

p

s

o

u

e

o

y


8/41


ACN120394194


OPERATINGANDFINANCIALREVIEW(continued)

6

ShareholderReturns

Thecompanysreturntoshareholdersisasfollows:

Basiclosspershare(cents) (64.5801)

Unfortunately,17August2007,thedateoflistingwasoneoftheworstintheprevioussevenyears

history of the market. The companys share price, which listed at 50 cents per share, steadily

declinedandiscurrentlytradingatapproximately25centspershare. Thedirectorsbelievethatthe

businessmodelsetoutintheProspectusremainsstrongandthecompanyisontargettoachieveits

objectives. Improvementinthesharepriceisanticipatedinthecomingyear.

Reviewof

Financial

Condition

LiquidityandCapitalResources

TheCashFlowStatementillustratesthereceiptof$8,788,530subscriptionmoniespriortolistingon

17August2007,representingthemajorityofthecashandcashequivalentsbalanceatthebalance

sheetdate. Thesefundsaresetasidefortheacquisitionoffoundationlawfirmsimmediatelyprior

tolisting,forcapitalraisingexpensesandforworkingcapitalforthecompanysacquisitionstrategy

goingforwardanddaytodayrunningexpenses.

Assetandcapitalstructure

Debts:

Interestbearingloansandborrowings

IPOapplication

monies

received

and

held

in

trust

8,788,735

Netdebt 8,788,735

Totalequity 205

Totalcapitalemployed $8,788,940

Shareissuesduringtheperiod

Thecompanyhasissued37,446,904sharessinceincorporation:

1shareissuedonincorporationofthecompanyon26June2006;

24,408,193shares issuedtovendorsofTalbotOlivierbusinessassets,BrettDaviesLawyers

businessassetsandLawCentralCoPtyLtdshareholderson29August2006;

8,611,802

shares

to

directors,

supporters

and

employees

of

the

company

on

29

August

2006;

606,398sharestodirectorsandemployeesofthecompanyon28February2007;and

3,820,510sharestosupportersofthecompanyon28February2007.

RiskManagement

Thecompanytakesaproactiveapproachtoriskmanagement.TheBoardisresponsibleforensuring

thatrisks,aswellasopportunities,areidentifiedonatimelybasisandthatthecompanysobjectives

andactivitiesarealignedwiththerisksandopportunities identifiedbytheBoard. Keyoperational

risksandtheirmanagementwillberecurringitemsfordeliberationatBoardmeetings.

Statementof

Compliance

This operating and financial review is based on the guidelines in The Group of 100 Incorporated

publicationGuidetotheReviewofOperationsandFinancialCondition.

o

p

s

o

u

e

o

y


9/41


ACN120394194


7

SIGNIFICANTCHANGESINTHESTATEOFAFFAIRS

Totalequityofthecompanyis$205. SeeNote9tothefinancialstatementsforfurtherinformation

onmovements

in

equity.

SIGNIFICANTEVENTSAFTERTHEBALANCEDATE

The company listed on the Australian Stock Exchange (ASX) on 17 August 2007. The initial public

offering (IPO) was for subscriptions of 24,000,000 ordinary shares at an issue price of 50 cents to

raise $12,000,000. The IPO was oversubscribed and the company exercised its right to accept

oversubscriptionsuptoafurther4,000,000.

Ultimately,24,833,320shareswereissuedat50centseach,raising$12,416,660.

Thecompany

also

made

an

offer

in

the

prospectus

to

shareholders

of

Law

Central

Co

Pty

Ltd

for

the

acquisition of 100% of the ordinary shares. Consideration for the offer was 0.10528 fully paid

ordinaryshares inIntegratedLegalHoldingsLimitedtogetherwithacashpaymentof$0.04736011

forevery1LawCentralCoPtyLtdshare. AllshareholdersofLawCentralCoPtyLtdagreedtothe

saleoftheirsharesandIntegratedLegalHoldingsLtdissued1,258,096sharestothoseshareholders.

Thefirsttwo lawfirmstojointhe IntegratedLegal HoldingsLimitedgroupwereTalbotOlivierand

BrettDaviesLawyers. Theacquisitionofthesepracticesoccurreduponcompletionofthe IPOand

receipt of subscription moneys under the IPO pursuant to the terms of an Option Deed that it

enteredintowiththeFoundationPartnersoftherelevantfirms.

Sincelisting

on

the

ASX,

the

company

has

acquired

two

further

law

firms

which

were

tucked

in

to

theTalbotOlivierbusiness:

1. PeterMarksSuccessionLawyerson19September2007;and

2. ShayneLeslieon28September2007.

Furtherdetailsoftheaboveacquisitionsaredisclosedinnote19ofthefinancialstatements.

LIKELYDEVELOPMENTSANDEXPECTEDRESULTS

IntegratedLegalHoldingsLimitedwillcontinuetoseekgrowthinrevenueandearningsthroughthe

acquisition of additional law firms in New South Wales, Victoria, the Australian Capital Territory,

Queenslandand

Western

Australia.

If

and

when

other

States

allow

non

lawyers

to

own

law

firms

andshareintheprofitsoflawfirms,thenthecompanywillpursueacquisitionsinthosejurisdictions

asopportunitiesarise.

SHAREOPTIONS

Unissuedshares

Asatthedateofthisreport,therewerenoordinarysharesunderoptions.

INDEMNIFICATIONANDINSURANCEOFDIRECTORSANDOFFICERS

Eachof

the

directors

of

the

company

will

enter

into

a

deed

with

the

company

whereby

the

company

has provided certain contractual rights of access to books and records of the company to those

directors and to effect and maintain insurance in respect of the directors and officers liability and

providecertainindemnitiestoeachofthedirectors,totheextentpermittedbylaw.

o

p

s

o

u

e

o

y


10/41


ACN120394194


REMUNERATIONREPORT

8

TheBoard

of

Directors

of

the

company

is

responsible

for

determining

and

reviewing

remuneration

arrangementsfortheBoardandexecutives.

TheBoardwillassesstheappropriatenessofthenatureandamountofremunerationofexecutives

on a periodic basis by reference to relevant employment market conditions with the overall

objective of ensuring maximum stakeholder benefit from the retention of a high quality, high

performingBoardandexecutiveteam.

Remunerationphilosophy

The performance of the company depends upon the quality of its directors and executives. To

prosper,thecompanymustattract,motivateandretainhighlyskilleddirectorsandexecutives.

Tothisend,thecompanyintendstoconsiderthefollowingprincipalsinitsremunerationframework:

Providecompetitiverewardstoattracthighcalibreexecutives;

Linkexecutiverewardtoshareholdervalue;

Haveaportionofexecutiveremunerationatrisk;and

Establishappropriate,demandingperformancehurdlesforvariableexecutiveremuneration.

Remunerationstructure

Inaccordancewithbestpracticecorporategovernance,thestructureofnonexecutivedirectorand

executiveremunerationisseparateanddistinct.

Nonexecutivedirectorremuneration

Objective

TheBoardseekstosetaggregateremunerationatalevelthatprovidesthecompanywiththeability

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

shareholders.

Structure

TheConstitutionandtheASXListingRulesspecifythattheaggregateremunerationofnonexecutive

directorsshallbedeterminedfromtimetotimebyageneralmeeting. Thefirstdeterminationwill

be at the AGM to be held on 30 November2007when shareholders will be asked toapprovethe

aggregateremuneration

for

non

executive

directors

for

the

period.

The amount of aggregate remuneration sought to be approved by shareholders and the fee

structurewillbereviewedannually. TheBoardconsidersadvicefromexternalconsultantsaswellas

the fees paid to nonexecutive directors of comparable companies when undertaking the annual

reviewprocess.

Nonexecutivedirectorsdonotparticipateinanyincentiveprograms.

o

p

s

o

u

e

o

y


11/41


ACN120394194


REMUNERATIONREPORT

9

Executiveremuneration

Objective

Thecompanyaimstorewardexecutiveswitha levelandmixofremunerationcommensuratewith

theirpositionandresponsibilitieswithinthecompanysoasto:

Reward executives for company, business unit and individual performance against targets

setbyreferencetoappropriatebenchmarks;

Aligntheinterestsofexecutiveswiththoseofshareholders;and

Ensuretotalremunerationiscompetitivebymarketstandards.

Structure

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

consultantsas

needed

to

provide

independent

advice.

ThecompanyhasenteredintoacontractofemploymentwiththeManagingDirector.

Employmentcontracts

ManagingDirector

There isanemploymentcontractinplacebetweenMrHennandIntegratedLegalHoldingsLimited

forMrHennsappointmentasManagingDirectorofthecompany. Thecontractwassignedon31

October2006andcommencesfrom1July2007.Thetermofthecontractis12months. Afterthat

timeitisthensubjecttonegotiationbetweentheparties. TheappointmentasManagingDirectoris

subjecttoaprobationaryperiodofthreemonthsduringwhichtimeeitherIntegratedLegalHoldings

Limitedor

Mr

Henn

may

terminate

the

employment

without

reason

on

two

days

notice.

Underthetermsofthecontract,MrHennsdutiesinclude,butarenotlimitedto:

Implementingthebusinessplanasdeterminedbythecompany;

Carryingoutsuchlawfuldirectionsasgivenbythecompany;and

Expandinganddevelopingthebusiness.

TheagreementmaybeterminatedwithoutnoticebyIntegratedLegalHoldingsLimitedif:

MrHenncommitsaseriousbreachoftheagreement;

MrHenncommitsanyactthatamountstoarepudiationoftheagreement;

MrHennengagesinseriousorwilfulmisconduct;or

It

is

permitted

by

theWorkplace

Relations

Act

1996

and

for

any

reason

under

that

legislation.

RemunerationofKeyManagementPersonnel

Duringtheperiod,thefollowingshareswereissuedtodirectorsasremuneration:

Director

Numberof

OrdinaryShares* $

JDawkins 1,626,398 813,199

ATregonning 300,000 150,000

THenn 139,999 70,000

WBlack

10,000

5,000

HModi 40,000 20,000*Thesesharesaresubjectto24monthsvoluntaryescrowrestrictionfrom17August2007,whichisthedatethecompany

listedontheASX.

o

p

s

o

u

e

o

y


12/41


ACN120394194


10

DIRECTORSMEETINGS

Thenumberofmeetingsofdirectors(includingmeetingsofcommitteesofdirectors)heldduringthe

periodand

the

number

of

meetings

attended

by

each

director

was

as

follows:

Directors

MeetingsEligibleto

attend

Attended

THenn 17 17

WBlack 11 11

HModi 11 11

JDawkins 7 7

ATregonning 7 7

Committeemembership

On29August2007,anAuditCommitteeandanAcquisitionCommitteeoftheBoardofDirectorswas

established. Membersappointedtothecommitteesareasfollows:

AuditCommittee AcquisitionCommittee

ATregonning Chairman BDaviesChairman

JDawkins ATregonning

THenn JDawkins

THenn

AUDITORINDEPENDENCEANDNONAUDITSERVICES

Acopyoftheauditorsindependencedeclarationinrelationtotheauditfortheperiodisprovided

withthisreportonpage38.

NONAUDITSERVICES

Thefollowingnonauditserviceswereprovidedbytheentitysauditor,Ernst&Young. Thedirectors

are satisfied that the provision of nonaudit services is compatible with the general standard of

independence for auditors imposed by theCorporationsAct2001. The nature and scope of each

typeofnonauditserviceprovidedmeansthatauditorindependencewasnotcompromised.

Ernst&Youngreceivedorareduetoreceivethefollowingamountsfortheprovisionofnonaudit

services:

Preparation of the Independent Accountants Report

containedintheProspectusdocument. $145,067

o

p

s

o

u

e

o

y


13/41


ACN120394194


11

Signedinaccordancewitharesolutionofthedirectors.

THenn

Director

Perth,30October2007

o

p

s

o

u

e

o

y


14/41


ACN120394194

BalanceSheet

ASAT30JUNE2007

Theabovebalancesheetshouldbereadinconjunctionwiththeaccompanyingnotes.

12

Note

2007

$

ASSETS

CurrentAssets

Cashandcashequivalents 5 8,788,735

Capitalisedexpenditure 6 506,872

Totalcurrentassets 9,295,607

TOTALASSETS 9,295,607

LIABILITIES

CurrentLiabilities

Tradeand

other

payables

7

9,295,402

TotalCurrentLiabilities 9,295,402

TOTALLIABILITIES 9,295,402

NETASSETS 205

EQUITY

Issuedcapital 9 18,723,452

Accumulatedlosses 10 (18,723,247)

TOTALEQUITY 205

o

p

s

o

u

e

o

y


15/41


ACN120394194

IncomeStatement

FORTHEPERIODFROMINCORPORATIONON26JUNE2006TO30JUNE2007

Theaboveincomestatementshouldbereadinconjunctionwiththeaccompanyingnotes.

13

Note

2007

$

Interestrevenue 205

Impairmentloss 12 (12,204,097)

Sharebasedpaymentsexpense (6,519,355)

Lossbeforeincometax (18,723,247)

Incometaxexpense 8

Lossafterincometax (18,723,247)

Netlossfortheperiod (18,723,247)

Basiclosspershare(cents) 11 (64.5801)

o

p

s

o

u

e

o

y


16/41


ACN120394194

CashFlowStatement


Theabovecashflowstatementshouldbereadinconjunctionwiththeaccompanyingnotes.

14

Note

2007

$

Cashflowsfromoperatingactivities

Interestreceived 205

Netcashflowsfromoperatingactivities 205

Cashflowsfrominvestingactivities

Netcashflowsfrominvestingactivities

Cashflowsfromfinancingactivities

Proceedsfromissueofshares 8,788,530

Proceedsfromloansreceived 506,872Paymentsforshareissueexpenses (506,872)

Netcashflowsfromfinancingactivities 8,788,530

Netincreaseincashheld 8,788,735

Cashatthebeginningofthefinancialperiod

Cashandcashequivalentsattheendofthefinancialperiod 5 8,788,735

o

p

s

o

u

e

o

y


17/41


ACN120394194

StatementofChangesinEquity


Theabovestatementofchangesinequityshouldbereadinconjunctionwiththeaccompanying

notes.

15

Issued

Capital

Accumulated

Losses

Total

Equity

$ $ $

At26June2006

Lossfortheperiod (18,723,247) (18,723,247)

Issueofshares 18,723,452 18,723,452

At30June2007 18,723,452 (18,723,247) 205

o

p

s

o

u

e

o

y


18/41


ACN120394194

NotestotheFinancialStatements


16

1)

CORPORATEINFORMATION

The financial report of Integrated Legal Holdings Limited (the company) for the period from

incorporation on 26 June 2006 to 30 June 2007 was authorised for issue in accordance with a

resolutionofdirectorson30October2007.

TheCompanyisacompanylimitedbysharesincorporatedinAustraliawhosesharesareunlistedas

atthereportingdate.ThecompanyisdomiciledinAustraliaandwasincorporatedon26June2006

andthisperiodrepresentsthefirstreportingperiodforthecompany. Thefinancialreporttherefore

doesnotincludecomparativeinformation.

ThenatureoftheoperationsandprincipalactivitiesofthecompanyaredescribedintheDirectors'

Report.

2)

SUMMARYOFSIGNIFICANTACCOUNTINGPOLICIES

a)

Basisofpreparation

The financial report is a general purpose financial report, which has been prepared in accordance

with the requirements of the CorporationsAct 2001 and Australian Accounting Standards. The

financialreporthasalsobeenpreparedonahistoricalcostbasis.

ThefinancialreportispresentedinAustraliandollars.

b)

Statementof

compliance

The financial report complies with Australian Accounting Standards, which include Australian

equivalents to International Financial Reporting Standards ("AIFRS"). The financial report also

complieswithInternationalFinancialReportingStandards("IFRS").

In the current period, the company has adopted all of the new and revised Standards and

Interpretations issued by the Australian Accounting Standards Board (the AASB) and the Urgent

IssueGroupthatarerelevanttoitsoperationsandeffectiveforannualreportingperiodsbeginning

on1July2005. TheadoptionofthesenewandrevisedStandardsandInterpretationsdidnothave

anyeffectonthefinancialpositionorperformanceofthecompany.

AustralianAccounting

Standards

and

Interpretations

that

have

recently

been

issued

or

amended

but

arenotyeteffectivehavenotbeenadoptedbythecompanyfortheannualreportingperiodending

30June2007. Theseareoutlinedinthefollowingtable.

o

p

s

o

u

e

o

y


19/41


ACN120394194

NotestotheFinancialStatements(continued)FORTHEPERIODFROMINCORPORATIONON26JUNE2006TO30JUNE2007

17

Reference Title Summary Application

dateof

standard*

Impactoncompany

financialreport

Application

datefor

company*

AASB

200510

Amendmentsto


Standards[AASB132,

AASB101,AASB114,

AASB117,AASB133,

AASB139,AASB1,AASB

4,AASB1023&AASB

1038]

Amendmentsarisefrom

thereleaseinAugust

2005ofAASB7Financial

Instruments:Disclosures

1January

2007

AASB7isadisclosure

standardsowillhaveno

directimpactonthe

amountsincludedinthe

companysfinancial

statements.However,the

amendmentswillresultin

changestothefinancial

instrumentdisclosures

includedinthecompanys

financialreport.

1July2007

AASB

20071

Amendmentsto


Standardsarisingfrom

AASBInterpretation11[AASB2]

Amendingstandard

issuedasaconsequence

ofAASBInterpretation

11GroupandTreasuryShareTransactions.

1March 2007 Thisisconsistentwiththe

companysexisting

accountingpoliciesforshare

basedpaymentssowillhavenoimpact.

1July2007

AASB

20073

Amendmentsto



AASB8[AASB5,AASB6,

AASB102,AASB107,

AASB119,AASB127,

AASB134,AASB136,

AASB1023&AASB1038]

Amendingstandard


ofAASB8Operating

Segments

1January

2009

AASB8isadisclosure


directimpactonthe


companysfinancial

statements.Howeverthe

newstandardmayhavean

impactonthesegment

disclosuresincludedinthe

companysfinancialreport.

1July2009

AASB

20074

Amendmentsto


StandardsarisingfromED

151and

Other

Amendments

Thestandardisaresult

oftheAASBdecision

that,inprinciple,all

accountingpolicy

optionscurrently

existinginIFRSshould

beincludedinthe

Australianequivalentsto

IFRSandtheadditional

Australiandisclosures

shouldbeeliminated,

otherthanthose

consideredparticularly

relevantinthe

Australianreporting

environment.

1July2007 Asthecompanydoesnot

anticipatechanginganyofits

accountingpolicychoicesas

aresult

of

the

issue

of

AASB

20074thisstandardwill

havenoimpactonthe


companysfinancial

statements.

Changestodisclosure

requirementswillhaveno

directimpactonthe


companysfinancial

statements.Howeverthe

newstandardmayhavean

impactonthedisclosures

includedin

the

companys

financialreport.

1July2007

AASB

20076

Amendmentsto



AASB123[AASB1,AASB

101,AASB107,AASB111,

AASB116&AASB138and

Interpretations1&12]

Amendingstandard


ofAASB123(revised)

BorrowingCosts.

1January

2009

Asthecompanydoesnot

currentlyconstructor

produceanyqualifying

assetswhicharefinancedby

borrowingstherevised

standardwillhaveno

impact.

1July2009

AASB

20077

Amendmentsto


Standards[AASB1,AASB

2,AASB4,AASB5,AASB

107&AASB128]

Amendingstandard


ofAASB20074.

1July2007 RefertoAASB20074above. 1July2007

AASB7 FinancialInstruments:

Disclosures.

Newstandardreplacing

disclosurerequirements

ofAASB132.

1January

2007

RefertoAASB200510

above.

1July2007

o

p

s

o

u

e

o

y


20/41


ACN120394194


18

Reference Title Summary Application

dateof

standard*

Impactoncompany

financialreport

Application

datefor

company*

AASB8 OperatingSegments Thisnewstandardwill

replaceAASB114

SegmentReportingand

adoptsamanagement

approachtosegment

reporting.

1January

2009

RefertoAASB20073above. 1July2009

AASB101

(revised

October

2006)

PresentationofFinancial

Statements

Manyofthedisclosures

frompreviousGAAPand

alloftheguidancefrom

previousGAAParenot

carriedforwardinthe

October2006versionof

AASB101.Therevised

standardincludessome

textfromIAS1thatisnotintheexistingAASB

101andhasfewer

additionalAustralian

disclosurerequirements

thantheexistingAASB

101.

1January

2007

AASB101isadisclosure


directimpactonthe


companysfinancial

statements.However,the

revisedstandardmayresult

inchangestothedisclosures

includedinthecompanysfinancialreport.

1July 2007

AASB123

(revisedJune

2007)

BorrowingCosts AASB123previously

permittedentitiesto

choosebetween

expensingallborrowing

costsandcapitalising

thosethatwere

attributabletothe

acquisition,construction

orproduction

of

a

qualifyingasset.The

revisedversionofAASB

123requiresborrowing

coststobecapitalisedif

theyaredirectly

attributabletothe

acquisition,construction

orproductionofa

qualifyingasset.

1January

2009

RefertoAASB20076above. 1July2009

AASB

Interpretation

10

InterimFinancial

ReportingandImpairment

Addressesan

inconsistencybetween

AASB134Interim

FinancialReportingand

theimpairment

requirementsrelating

to

goodwillinAASB136

ImpairmentofAssets

andequityinstruments

classifiedasavailablefor

saleinAASB139

FinancialInstruments:

Recognitionand

Measurement

1November

2006

Theprohibitionsonreversing

impairmentlossesinAASB

136andAASB139totake

precedenceoverthemore

generalstatementinAASB

134that

interim

reporting

is

notexpectedtohaveany

impactonthecompanys

financialreport.

1July2007

AASB

Interpretation

11

GroupandTreasuryShare

Transactions

Specifiesthatashare

basedpayment

transactioninwhichan

entityreceivesservices

asconsiderationforits

ownequityinstruments

shallbe

accounted

for

as

equitysettled.

1March 2007 RefertoAASB20071above. 1July2007

*designatesthebeginningoftheapplicableannualreportingperiod

o

p

s

o

u

e

o

y


21/41


ACN120394194


19

c)

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

exchangeunless,inrarecircumstances,itcanbedemonstratedthatthepublishedpriceatthedate

ofexchange isanunreliable indicatoroffairvalueandthatotherevidenceandvaluationmethods

provide a more reliable measure of fair value. Transaction costs arising on the issue of equity

instrumentsarerecogniseddirectlyinequity.

Except for noncurrentassetsor disposalgroupsclassifiedasheldforsale(whichare measured at

fairvalue

less

costs

to

sell),

all

identifiable

assets

acquired

and

liabilities

and

contingent

liabilities

assumedinabusinesscombinationaremeasuredinitiallyattheirfairvaluesattheacquisitiondate,

irrespective of the extent of any minority interest. The excess of the cost of the business

combinationoverthenetfairvalueofthecompanysshareoftheidentifiablenetassetsacquiredis

recognisedasgoodwill.Ifthecostofacquisitionislessthanthecompanysshareofthenetfairvalue

ofthe identifiablenetassetsofthesubsidiary,thedifference isrecognisedasagain inthe income

statement, but only after a reassessment of the identification and measurement of the net assets

acquired.

Where settlement of any part of the consideration is deferred, the amounts payable in the future

are discounted to their present value as at the date of exchange. The discount rate used is the

entitysincremental

borrowing

rate,

being

the

rate

at

which

a

similar

borrowing

could

be

obtained

fromanindependentfinancierundercomparabletermsandconditions.

d) Segmentreporting

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

productsorservicesthataresubjecttorisksandreturnsthataredifferenttothoseofotherbusiness

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

providingproductsorserviceswithinaparticulareconomicenvironmentandissubjecttorisksand

returnsthataredifferentthanthoseofsegmentsoperatinginothereconomicenvironments.

e)

Cashandcashequivalents

Cash

and

cash

equivalents

in

the

balance

sheet

comprises

shortterm

deposits

with

an

original

maturityofthreemonthsor lessthatarereadilyconvertibletoknownamountsofcashandwhich

aresubjecttoaninsignificantriskofchangesinvalue.

For the purposes of the Cash Flow Statement, cash and cash equivalents consist of cash and cash

equivalentsasdefinedabove.

f)

Tradeandotherpayables

Tradepayablesandotherpayablesarecarriedatamortisedcost.Theyrepresentliabilitiesforgoods

andservicesprovidedtothecompanypriortotheendofthefinancialyearthatareunpaidandarise

whenthecompanybecomesobligedtomakefuturepayments inrespectofthepurchaseofthese

goodsand

services.

The

amounts

are

unsecured

and

are

usually

paid

within

30

days

of

recognition.

o

p

s

o

u

e

o

y


22/41


ACN120394194


20

g)

Sharebasedpaymenttransactions

Equitysettled

transactions

Thecompanymeasuresthecostofequitysettledtransactionswiththedirectorsandsupportersby

reference to the fair value of the equity instruments, being shares in the company, at the date at

whichtheyaregranted. Thefairvaluehasbeenbasedontheproposedlistingpriceof50centsper

sharewhichwasdeterminedinconsultationwithexternaladvisors.

h)

ContributedequityandIPOcosts

Ordinarysharesareclassifiedasequity. CostsassociatedwiththeIPOprocess,includingcorporate

advisory, legal and accounting fees are recognised as an asset to the extent the IPO will proceed.

UponthesuccessfullistingontheASX,thecostswillbeoffsetagainsttheequityraisedaspartofthe

capitalraisingprocess(refernote19 eventsafterthebalancesheetdate).

i) Incomeandothertaxes

Current tax assets and liabilities for the current and prior periods are measured at the amount

expected to be recovered from or paid to the taxation authorities based on the current period's

taxableincome.Thetaxratesandtaxlawsusedtocomputetheamountarethosethatareenacted

orsubstantivelyenactedbythebalancesheetdate.

Deferredincometaxisprovidedonalltemporarydifferencesatthebalancesheetdatebetweenthe

taxbasesofassetsandliabilitiesandtheircarryingamountsforfinancialreportingpurposes.

Deferredincometaxliabilitiesarerecognisedforalltaxabletemporarydifferencesexcept:

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

intheforeseeablefuture.

Deferredincometaxassetsarerecognisedforalldeductibletemporarydifferences,carryforwardof

unusedtaxcreditsandunusedtaxlosses,totheextentthatitisprobablethattaxableprofitwillbe

availableagainst

which

the

deductible

temporary

differences

and

the

carry

forward

of

unused

tax

creditsandunusedtaxlossescanbeutilised,except:

when thedeferred 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

future and taxable profit will be available against which the temporary difference can be

utilised.

o

p

s

o

u

e

o

y


23/41


ACN120394194


21

The carrying amount of deferred income tax assets is reviewed at each balance sheet date and

reducedto

the

extent

that

it

is

no

longer

probable

that

sufficient

taxable

profit

will

be

available

to

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.

Deferredincometaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplyto

theyearwhentheasset isrealisedorthe liability issettled,basedontaxrates(andtax laws)that

havebeenenactedorsubstantivelyenactedatthebalancesheetdate.

Incometaxes

relating

to

items

recognised

directly

in

equity

are

recognised

in

equity

and

not

in

profit

orloss.

Deferredtaxassetsanddeferredtax liabilitiesareoffsetonly ifa legallyenforceablerightexiststo

set off current tax assets against current tax liabilities and the deferred tax assets and liabilities

relatetothesametaxableentityandthesametaxationauthority.

Othertaxes

Revenues,expensesandassetsarerecognisednetoftheamountofGSTexcept:

when the GST incurred on a purchase of goods and services is not recoverable from the

taxationauthority,

in

which

case

the

GST

is

recognised

as

part

of

the

cost

of

acquisition

of

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.

j)

Losspershare

Basicearningspershareiscalculatedasnetprofitattributabletomembersofthecompany,divided

bytheweightedaveragenumberofordinarysharesoutstandingduringtheperiod.

There were no dilutive or potentially dilutive shares for the period and therefore diluted loss per

shareneednotbedisclosed.

o

p

s

o

u

e

o

y


24/41


ACN120394194


22

3)

FINANCIALRISKMANAGEMENTOBJECTIVESANDPOLICIES

The

proceeds

of

the

public

capital

raising

will

provide

sufficient

capital

resources

to

enable

the

companytoachieveitsinitialbusinessobjectivestomaintainahealthyworkingcapitalbalanceand

tofundfutureacquisitionsoflawfirms.

4)

SIGNIFICANTACCOUNTINGJUDGEMENTS,ESTIMATESANDASSUMPTIONS

i)

Valuationofsharebasedpayment

Thecompanymeasuresthecostofequitysettledtransactionswiththedirectorsandsupportersby

reference to the fair value of the equity instruments, being shares in the company, at the date at

which they are granted. The fair value is determined by sponsors and external advisors with

referencetotheproposedlistingpriceforthecompanyinAugust2007.

ii) Impairmentofoptionstoacquirelawfirms

An impairment loss of $12,204,097 was recognised during the period in respect of the companys

financial assets, being the option to acquire the respective legal entities from the foundation

shareholders. Thevalueoftheimpairmentwasrecognisedasthedifferencebetweenthefairvalue

ofthesharesissuedforthefinancialasset,andtheconsiderationsreceivedorreceivableonissue.

5)

CURRENTASSETSCASHANDCASHEQUIVALENTS

2007

$

Moneymarketdeposit 8,788,735

8,788,735

Money market deposits are made for varying periods, depending on the immediate cash

requirementsofthecompany,areatcallandearninterestattherespectivemoneymarketdeposit

rates. This amount represents IPO application monies received and held in trust prior to the

companys listing with the ASX. In the event that the companys listing was unsuccessful, the

application monies above would need to be returned to applicants in full as soon as practicable

(refernote19 eventsafterthebalancesheetdate).

2007

$

Reconciliation of net cash inflow from operations to loss for the

period:

Netcashinflowfromoperations 205

Noncashitems

Sharebasedpayments (6,519,355)

Impairmentloss (12,204,097)

Lossfortheperiod (18,723,247)

o

p

s

o

u

e

o

y


25/41


ACN120394194


23

6)

CURRENTASSETS CAPITALISEDEXPENDITURE

2007

$

Capitalisedexpenditure 506,872

Capitalised expenditure represents share issue costs that will be shown in equity as a deduction

from the proceeds in the event of a successful capital raising (refer note 19 events after the

balancesheetdate).

7)

CURRENTLIABILITIESTRADEANDOTHERPAYABLES

2007

$

Otherpayables (a) 8,788,530

LoanfromLawCentralCoPtyLtd (b) 506,872

Totaltradeandotherpayables 9,295,402

a)

Otherpayables

Other payables are nontrade and noninterest bearing. The amount relates to IPO application

moniesreceivedandheldintrustpriortolistingwiththeASXon17August2007. Intheeventthat

thecompanyslistingwasunsuccessful,theapplicationmoniesabovewouldneedtobereturnedto

applicantsinfullassoonaspracticable(refernote19 eventsafterthebalancesheetdate).

b)

Loansfrom

Law

Central

Co

Pty

Ltd

During the period, a loan of $506,872 was made from Law Central Co Pty Ltd pertaining to costs

associatedwiththecapitalraising. Theloanisatcallandinterestisnotpayable.

8)

INCOMETAX

2007

Themajorcomponentsofincometaxare: $

IncomeStatement

Currentincometax

Currentincome

tax

charge

Currentincometaxbenefitnotrecognised

Deferredincometax

Relatingtooriginationandreversaloftemporarydifferences

Deferredincometaxnotrecognisedduetothecurrentincometaxbenefit

Areconciliationbetweentaxexpenseandtheproductofaccountinglossbefore

incometaxmultipliedbythecompany'sapplicableincometaxrateisasfollows:

Accountinglossbeforeincometax (18,723,247)

Atthestatutoryincometaxrateof30% (5,616,974)

Nondeductible

expenses

5,616,974

Incometaxexpensereportedintheincomestatement

o

p

s

o

u

e

o

y


26/41


ACN120394194


24

9)

ISSUEDCAPITAL

a)

Ordinaryshares

2007

$

37,446,904ordinaryfullypaidshares 18,723,452

b) Movementsinordinarysharecapital

Shares $

Openingbalanceat26June2006

Issuedonincorporation 1 1

Issue of shares at a deemed value of 50 cents per

share to vendors of Talbot Olivier Business Assets,

BrettDaviesLawyersBusinessAssets,LawCentralCo

PtyLtdshareholderson29August2006 24,408,193 12,204,096


shareon29August2006sharebasedpayments

Todirectors

Tosupporters

1,529,999

7,081,803

764,999

3,590,902


shareon28February2007sharebasedpayments

Todirectors

Tosupporters

586,398

20,000

293,199

10,000


shareon28February2007sharebasedpayments

Tosupporters 3,820,510 1,910,255

Balanceat

30

June

2007

37,446,904 18,723,452

Effective1July1998,theCorporations legislationabolishedtheconceptsofauthorisedcapitaland

parvalueshares. Accordingly,thecompanydoesnothaveauthorisedcapitalorparvalueinrespect

ofitsissuedcapital.

Fullypaidordinarysharescarryonevotepershareandcarrytherighttodividends.

o

p

s

o

u

e

o

y


27/41


ACN120394194


25

10)

ACCUMULATEDLOSSES

2007

$

Accumulatedlosses (18,723,247)

Balanceat26June2006

Lossfortheperiod* (18,723,247)

Balanceat30June2007 (18,723,247)

*Includedinthelossfortheperiodwerethefollowing:

a)

Impairmentloss

of

$12,204,097

on

the

shares

issued

at

a

deemed

value

of

50

cents

per

share

to

vendorsofTalbotOlivierBusinessAssets,BrettDaviesLawyersBusinessAssetsandLawCentral

CoPtyLtdshareholderson29August2006(refernote12);

b) Sharebasedpaymentexpenseof$4,305,901 sharesissuedatadeemedvalueof50centsper

sharetodirectorsandsupporterson29August2006;and

c)

Share based payment expense of $2,213,454 shares issued at deemed value of 50 cents per

sharetodirectorsandsupporterson28February2007.

11)

LOSSPER

SHARE

2007

$

Lossusedincalculatingbasiclosspershare (18,723,247)

Weighted average number of ordinary shares used in the calculation of

basiclosspershare 28,992,300

Effectofdilutivesecurities:

Therewerenodilutiveorpotentialdilutivesharesfortheperiod.

12)IMPAIRMENTLOSSES

Optiontoacquirelawfirms

On29August2006thevendorsoftheTalbotOlivierbusinessassets,BrettDaviesLawyersbusiness

assets and Law Central Co Pty Ltd shareholders received 24,408,193 shares for a consideration of

$0.000001pershare. Onissuedate,thedeemedvalueoftheseshareswere50centspershareor

$12,204,097intotal.

Theissueofthesesharesprovidedthecompanywiththeoptiontopurchasethelawfirmsfromthe

vendors. TheoptionrepresentsafinancialassetasdefinedunderAASB139FinancialInstruments:

Recognitionand

Measurement

and

the

$12,204,097

represents

the

option

premium

paid.

The

optiontosecuretherighttoacquirethelawfirmdidnotresultinanyfinancialbenefitintheformof

areductioninthesalepriceofthelawfirms.

o

p

s

o

u

e

o

y


28/41


ACN120394194


26

Thedifference

between

the

consideration

paid

and

the

deemed

value

has

been

fully

expensed

as

an

impairmentlossduringtheperiod.

13)

SEGMENTINFORMATION

The company operates predominantly in one business and geographical segment, being the

identification,acquisitionand integrationof lawfirmsand informationtechnologyorganisationsto

provideanetworkedservicetoclients.

14)

CONTINGENTLIABILITY

Thereare

no

material

contingent

liabilities

of

the

company

at

the

reporting

date.

15)

SHAREBASEDPAYMENTPLANS

EmployeeShareOptionPlan

The company has established an employee share option plan (ESOP) on 5 October 2006 and the

objectiveoftheESOPistoassistintherecruitment,reward,retentionandmotivationofemployees

ofthecompany.

Consideration

Eachoption

will

be

issued

free

of

charge.

Exerciseprice

TheexercisepriceforemployeeoptionsgrantedundertheESOPwillbethepricefixedbytheBoard

priortothegrantoftheemployeeoptionandshallnotbelessthantheweightedaveragesaleprice

of shares sold on the ASX during the five business days prior to the issue date of the employee

optionsorsuchotherperiodasdeterminedbytheBoard(initsdiscretion).

Exerciserestrictions

TheoptionsgrantedundertheESOPmaybesubjecttosuchotherrestrictionsnexerciseasmaybe

fixedbythedirectorspriortothegrantoftheemployeeoptionsincluding,withoutlimitation,length

of

service

by

the

employee

and

threshold

prices

at

which

shares

are

traded

on

the

ASX.

Anyrestrictionssoimposedbythedirectorswillbesetoutontheemployeeoptioncertificate.

Participationinrightsissuesandbonusissues

Theemployee optionsgrantedundertheESOP do notgiveany right toparticipate in dividendsor

rightsissuesuntilsharesareallottedpursuanttotheexerciseoftherelevantemployeeoption. The

numberofshares issuedontheexerciseoftheemployeeoptionswillbeadjustedforbonus issues

madepriortotheexerciseoftheemployeeoptions.

Eligibility

Under the ESOP, the directors may invite employees to participate in the ESOP and receive

employee

options.

An

employee

may

receive

the

employee

options

or

nominate

a

relative

orassociate to receive the employee options. The plan is open to directors of the company or its

subsidiaries.

o

p

s

o

u

e

o

y


29/41


ACN120394194


27

Termof

employee

options

TheemployeeoptionsgrantedundertheESOPhaveatermspecifiedonthefaceofeachcertificate.

Restrictionsontransfer

Employeeoptionsarenottransferrable.

NooptionswereissuedundertheESOPduringtheperiod.

EmployeeSharePlan

Thecompanyestablishedanemployeeshareplan(Plan)on5October2006.

Planshares

Thecompanymay makeanoffertoeligible employeestoparticipate inthePlanandborrowfrom

thecompanyonthe loanterms(whichformpartofthetermsofthePlan)fromtimetotime in its

discretion. Thetermsofsuchanoffershallbedeterminedbythecompanyandbespecifiedinthe

offertoeligibleemployees.

Eligibleemployees

Eligibleemployees includeadirectorofthecompanyor itssubsidiaries,anemployee,aconsultant

oranemployeeofaconsultantofthecompanyoritssubsidiaries.

Issueprice

EachPlan

share

will

be

issued

at

an

issue

price

determined

by

the

Board,

provided

that

the

issue

price is not less than the market price of the companys shares, being the weighted average sale

priceofordinarysharessoldthroughtheASXonthefivetradingdayspriortotheproposeddateof

theoffermadeunderthePlan.

AcquisitionofPlanshares

UponreceiptbythecompanyofanapplicationforPlanshares(inresponsetoanoffermade),the

companymustdeterminetomakealoantotheparticipantonthetermsofanamountequaltothe

issuepricemultipliedbythenumberofPlansharesappliedforand,uponsuchdeterminationbeing

made,aloanagreementshallarisebetweenthecompanyandtheparticipantwithoutfurtheraction

being required. The company must make such a loan and apply the moneys so lent towards

paymentto

the

company

of

the

issue

price

of

the

Plan

shares,

which

Plan

shares

will

be

credited

as

fully paid shares in the capital of the company, and the company will issue and allot those Plan

sharestotheparticipant.

RightsinrespectofPlanshares

Aparticipantwill,fromthedatethePlansharesare issuedandallotted,bethe legalownerofthe

Plan shares issued orallottedunder thePlan,subjecttotheprovisionsofthe loan agreementand

the terms of the loan agreement while the advance made under the loan agreement remains

outstanding,bebindingupontheparticipantinrespectofhisorherPlanshares.

o

p

s

o

u

e

o

y


30/41


ACN120394194


28

Restrictionontransfer

A

participant

may

only

dispose

of

or

grant

an

encumbrance

over

a

Plan

share

as

set

out

in

the

followingtableorasotherwisedeterminedbythedirectorsatthetimeofissueasfollows:

Within1yearofissuedate 33.3% of Plan shares may be

disposedoforencumbered

Within2yearsofissuedate 66.6% of Plan shares may be


After2yearsofissuedate 100% of Plan shares may be


Firstrightofrefusal

Until

the

loan

to

the

participant

is

repaid,

the

participant

grants

to

the

company

a

right

of

first

refusal over the participants Plan shares the subject of the loan which must be exercised by the

companywithin24hoursoftheparticipantsoffer.

Righttoparticipateinbonusissuesandentitlementissues

HoldersofPlansharesshallbeentitledtoparticipateinbonusissuesandentitlementissuesmadeby

thecompanyonthesamebasisasotherissuedfullypaidordinarysharesinthecompanyfromthe

dateofissue.

Termsofloan

Insummary,thetermsoftheloanmadetoaparticipantinthePlanareasfollows:

a)

Theborrowercanrepaythebalanceoutstandingontheadvanceatanytime;

b)

The borrower is entitled to all dividends declared and paid on the Plan shares but will be

deemedbyhisorherconfirmationsetoutintheapplicationforPlansharestohaveirrevocably

directed the company to pay and the company to receive and apply those dividends towards

repaymentoftheadvancemade;

c)

The borrower must repay the outstanding balance of the advance to the company within 30

daysoftheterminationoftheemploymentoftheeligibleemployeetowhomtheoriginaloffer

wasmade;

d)

Wheretheborrowerceasestobeemployedbythecompanyorasubsidiaryandtheaggregate

marketpriceofthesamenumberofsharesinthecompanyasthenumberofPlansharesheldby

theborrower

is,

upon

the

date

of

cessation,

less

than

the

outstanding

advance

owed

by

the

borrowerinrespectofsuchPlanshares,themaximumliabilityinrespectoftheadvanceshallbe

thelesseroftheamountoftheadvancethenowingandthemarketvalueofthePlanshares. In

that event the borrower authorises the company secretaryto sell the Plan shares asagentfor

theborrowerandapplythenetproceedsofsaleinfullsatisfactionoftheadvance;and

e)

Theloanisinterestfree.

NoshareswereissuedunderthePlanduringtheperiod.

Foundationsharesissuedon29August2006and28February2007,asnotedinnote9,arenotpart

oftheESP.

o

p

s

o

u

e

o

y


31/41


32/41


ACN120394194


30

17)

FAIRVALUE

AND

INTEREST

RATE

RISK

a)

Fairvalues

Allassetsand liabilitiesrecognised inthebalancesheet,whethertheyarecarriedatcostoratfair

value, are recognised at amounts that represent a reasonable approximation of fair value unless

otherwisestatedintheapplicablenotes.

b)

Interestraterisk

Interestrateriskrepresentstheriskthatthevalueofafinancialinstrumentwillfluctuateasaresult

of changes in market interest rates. The exposure of the company to interest rate risk and the

effectiveweightedaverageinterestrateforclassesoffinancialassetsissetoutbelow.

Weighted

average

effective

interestrate

Periodended30June

2007


33/41


ACN120394194


31

ii)

Acquiredlegalfirms

TalbotOlivier

On 11 January 2006, the company (through its agent, Law Central Co Pty Ltd) and the foundation

partnersofTalbotOlivierenteredintoanOptionAgreementwherebyanoptionwasgrantedtothe

company, exercisable through its wholly owned subsidiary Talbot Olivier Pty Ltd, to acquire the

TalbotOlivierbusinessassets. Thisagreementwassubsequentlyvariedbyanagreementdated19

September 2006 and was further amended by agreements between the same parties dated 12

March2007and15May2007.

Theoptionwasexercisedon10August2007andthepurchasepriceagreedtobepaidincashupon

theexerciseoftheoptionwas$3,194,648.

TalbotOlivier

Pty

Ltd,

trading

as

Talbot

Olivier,

was

incorporated

on

10

August

2007

and

is

a

wholly

ownedsubsidiaryofIntegratedLegalHoldingsLimited.

Thefollowingconstitutesthecalculationoftheconsiderationgivenandthefairvalueofnetassets

acquiredinTalbotOliver:$

Consideration

Cash 3,194,648

Deferredcashconsideration

Costsassociatedwithacquisition 166,294

Totalcashconsideration 3,360,942

Sharesissuedasconsideration

Totalacquisitioncost 3,360,942

Fair

Value

$

Carrying

Amount

$

Netassetsacquired

Assets

Plantandequipment 174,169 174,169

Workinprogress 200,000 200,000

Otherassets

Totalassetsacquired 374,169 374,169

Netassetsacquired 374,169 374,169

Goodwillonacquisition 2,986,773

Astheintegrationofthebusinessisstilloccurringtheremaybesomemovementintheprovisional

calculation.

BrettDaviesLawyers

On30March2007,thecompany(throughitsagent,LawCentralCoPtyLtd)andBrettDavies,owner

oftheBrettDaviesLawyersbusinessassets,enteredintoanOptionAgreementwherebyanoption

wasgrantedtothecompany,exercisablethroughitswhollyownedsubsidiaryTaxLawyersAustralia

PtyLtd,toacquiretheBrettDaviesLawyersbusinessassets.

Theoptionwasexercisedon10August2007andthepurchasepriceagreedtobepaidincashupon

the

exercise

of

the

option

was

$804,000.

o

p

s

o

u

e

o

y


34/41


ACN120394194


32

TaxLawyersAustraliaPtyLtd,tradingasBrettDaviesLawyers,was incorporatedon8August2007

andis

a

wholly

owned

subsidiary

of

Integrated

Legal

Holdings

Limited.


acquiredinBrettDaviesLawyers:$

Consideration

Cash 804,000


Costsassociatedwithacquisition 37,116

Totalcashconsideration 841,116


Totalacquisitioncost 841,116

Fair

Value

$

Carrying

Amount

$

Netassetsacquired

Assets




Goodwillonacquisition 822,440

Thegoodwilldisclosedabove,beingtheexcessofthecostoftheacquisitionovertheidentifiablenet

assetsacquired,isnotfullysupportedbyfutureearningsandwillbewrittendownto$704,000. The

impairmentexpense

that

will

be

recognised

post

acquisition

is

$118,440.


calculation.

PeterMarksSuccessionLawyers

On 19 September 2007, the company, through its wholly owned subsidiary Talbot Oliver Pty Ltd,

acquiredthelegalpracticeofthelatePeterMarkstradingasPeterMarksSuccessionLawyers. This

acquisition was merged into the existing practice of Talbot Olivier. The acquisition promotes the

companys business strategy which encourages acquired practices to enhance their own growth

aspirationsviatheacquisitionofcomplementarypractices.

The assets purchased include goodwill and business assets excluding all work in progress and

outstandingdebtors.

o

p

s

o

u

e

o

y


35/41


ACN120394194


33


acquiredin

the

practice

of

Peter

Marks

Succession

Lawyers:

$

Consideration

Cash 50,000

Deferredcashconsideration 75,000

Costsassociatedwithacquisition




Fair

Value

$

Carrying

Amount

$

Netassets

acquired

Assets






calculation.

ShayneLeslie

On 28 September 2007, the company, through its wholly owned subsidiary, Talbot Olivier Pty Ltd,

acquiredthe

legal

practice

of

Shayne

Leslie.

This

acquisition

was

merged

into

the

existing

practice

of

TalbotOlivier.

Theconsiderationforthepurchaseisacombinationofcashandshares. Thecashcomponentwillbe

fundedfromgroupworkingcapital. Thesharecomponentispayableprogressivelyoverthreeyears,

subjecttoperformancecriteriabeingmet.


acquiredinthepracticeofShayneLeslie:$

Consideration

Cash 50,000

Deferredcashconsideration Costsassociatedwithacquisition


Sharesissuedasconsideration 250,000


Fair

Value

$

Carrying

Amount

$

Netassetsacquired


Asthe

integration

of

the

business

is

still

occurring

there

may

be

some

movement

in

the

provisional

calculation.

o

p

s

o

u

e

o

y


36/41


ACN120394194


34

iii)

AcquisitionofLawCentralCoPtyLtd

Underthe

terms

of

the

Prospectus

dated

16

May

2007,

the

company

offered

to

acquire

100%

of

the

fullypaidordinaryshares inthecapital ofLawCentralCoPtyLtd. Theofferwasconditionalupon

theacceptanceoftheofferbyatleast90%oftheLawCentralCoPtyLtdshareholdersby15August

2007.

Thisconditionwassatisfiedinfulland100%oftheLawCentralCoPtyLtdshareholdersacceptedthe

offer.

The consideration offered by Integrated Legal Holdings Limited was 0.105028 fully paid ordinary

sharesinthecompanytogetherwithacashpaymentof$0.04736011forevery1LawCentralCoPty

Ltd share. Settlement took place on 10 August 2007 and Integrated Legal Holdings Limited issued

1,258,096shares

in

the

company

and

paid

$2,700,000

in

cash

to

the

vendors.


acquiredinLawCentralCoPtyLtd:$

Consideration 2,700,000

Cash


Costsassociatedwithacquisition

Totalcashconsideration 2,700,000

Sharesissuedasconsideration 629,048

Totalacquisitioncost 3,329,048

Fair

Value

$

Carrying

Amount

$

Netassetsacquired

Assets


Unlistedentities 32,500 32,500

Cash 133,154 133,154

Tradereceivables 531,909 531,909

Otherassets 506,872 506,872

Totalassetsacquired 1,227,549 1,227,549

Liabilities

TradePayables

60,860

60,860

Provisions 92,256 92,256

Totalliabilitiesacquired 153,116 153,116

Netassetsacquired 1,074,433 1,074,433

Goodwillonacquisition 2,254,615


calculation.

o

p

s

o

u

e

o

y


37/41


ACN120394194

DirectorsDeclaration

35

InaccordancewitharesolutionofthedirectorsofIntegratedLegalHoldingsLimited,Istatethat:

1.

Intheopinionofthedirectors:

a. The financial statements and notes to the financial statements of the company are in

accordancewiththeCorporationsAct2001,including:

i.

givingatrueandfairviewofthecompanysfinancialpositionasat30June2007

andofitsperformancefortheperiodendedonthatdate;and

ii.

complying with Australian Accounting Standards and Corporations Regulations

2001;and

b. therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebtsas

andwhentheybecomedueandpayable.

2.

This declaration has been made after receiving the declarations required to be made to the

directors in accordance with section 295A of the CorporationsAct 2001 for the period from

incorporationon26June2006to30June2007.

Signedinaccordancewitharesolutionofthedirectors.

THenn

Director

Perth,30

October

2007

o

p

s

o

u

e

o

y


38/41

36

Auditors Independence Declaration to the Directors of Integrated Legal Holdings Limited

In relation to our audit of the financial report of Integrated Legal Holdings Limited for the period

from the date of incorporation on 26 June 2006 to 30 June 2007, to the best of my knowledge and

belief, there have been no contraventions of the auditor independence requirements of the

Corporations Act 2001 or any applicable code of professional conduct.

Ernst & Young

G H Meyerowitz

Partner

Perth

30 October 2007

Liability limited by a scheme approved underProfessional Standards Legislation.

o

p

s

o

u

e

o

y


39/41

37

Independent auditors report to the members of Integrated Legal Holdings Limited

We have audited the accompanying financial report of Integrated Legal Holdings Limited (the

company) which comprises the balance sheet as at 30 June 2007 and the income statement, statement

of changes in equity and cash flow statement from the date of incorporation on 26 June 2006 to the

period ended on 30 June 2007, a summary of significant accounting policies, other explanatory notes

and the Directors Declaration.

Directors Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial

report in accordance with the Australian Accounting Standards (including the Australian Accounting

Interpretations) and the Corporations Act 2001. This responsibility includes establishing andmaintaining internal controls relevant to the preparation and fair presentation of the financial report

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

appropriate accounting policies; and making accounting estimates that are reasonable in the

circumstances. In Note 2, the directors also state that the financial report, comprising the financial

statements and notes, complies with International Financial Reporting Standards. The directors are

also responsible for the remuneration disclosures contained in the Directors Report .

Auditors Responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted

our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we

comply with relevant ethical requirements relating to audit engagements and plan and perform theaudit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures

in the financial report. The procedures selected depend on our judgment, including the assessment of

the risks of material misstatement of the financial report, whether due to fraud or error. In making

those risk assessments, we consider internal controls relevant to the entitys preparation and fair

presentation of the financial report in order to design audit procedures that are appropriate in the

circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entitys

internal controls. An audit also includes evaluating the appropriateness of accounting policies used

and the reasonableness of accounting estimates made by the directors, as well as evaluating the

overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis

for our audit opinion.

Independence

In conducting our audit we have met the independence requirements of the Corporations Act 2001.

We have given to the directors of the company a written Auditors Independence Declaration, a copy

of which is included in the financial report. In addition to our audit of the financial report and the

remuneration disclosures, we were engaged to undertake the services disclosed in the notes to the

financial statements. The provision of these services has not impaired our independence.

Liability limited by a scheme approved under

Professional Standards Legislation.

o

p

s

o

u

e

o

y


40/41

38

Auditors Opinion

In our opinion:

1. the financial report of Integrated Legal Holdings Limited is in accordance with the

Corporations Act 2001, including:(i) giving a true and fair view of the financial position of Integrated Legal Holdings

Limited at 30 June 2007 and of its performance from the period from the date of

incorporation on 26 June 2006 to the period ended on 30 June 2007; and

(ii) complying with Australian Accounting Standards (including the Australian

Accounting Interpretations) and the Corporations Regulations 2001; and

2. the financial report also complies with International Financial Reporting Standards as

disclosed in Note 2.

Ernst & Young

G H Meyerowitz

Partner

Perth

30 October 2007

o

p

s

o

u

e

o

y


41/41


ACN120394194

ASXAdditionalInformation

AdditionalinformationrequiredbytheAustralianStockExchangeLimitedandnotshownelsewhere

inthis

report

is

as

follows.

The

information

is

current

as

at

16

October

2007.

a)

Distributionofequitysecurities

Ordinarysharecapital

63,538,320fullypaidordinarysharesareheldby1,015individualshareholders.

Allissuedordinarysharescarryonevotepershareandcarrytherightstodividends.

Thenumbersofshareholdersbysizeofholdingare:

Fullypaid

Ordinary

shares

1

1,000

4

1,0015000 170

5,00110,000 315

10,001100,000 480

100,001andover 46

1,015

Holdinglessthanamarketableparcel 17

b)

Substantialshareholders

Ordinaryshareholders FullyPaid

Number Percentage

DaviesSuperannuationFund 7,497,082 11.80

c)

20largestholdersofquotedequitysecuritiesOrdinaryshareholders FullyPaid

Number Percentage

DaviesSuperannuationFund 7,497,082 11.80

KordicFamilyTrust 3,068,340 4.83

JPOlivier 3,068,340 4.83

TaylorFamilyTrust 3,068,340 4.83

HemeryFamilyTrust 3,068,340 4.83

SkinnerFamilyTrust 3,028,340 4.77

BKDavies 2,710,200 4.27

Sands

Family

Trust

2,268,340

3.57

CatelliPorterFamilyTrust 2,191,672 3.45

JSDawkins 1,626,398 2.56

BBWhitford 1,605,280 2.53

SKaifeng 1,205,000 1.90

MLCITrust 1,110,000 1.75

SandsSuperannuationFund 800,000 1.26

BJMaguire 610,000 0.96

GKPhilipson 510,560 0.80

ANZNomineesLtdCashIncomeTrust 315,700 0.50

RGHarris 305,280 0.48

ZQLiang 284,000 0.45

FengFamilyTrust 270,000 0.42

38,611,212 60.79

o

p

s

o

u

e

o

y

012.ASX IAW Oct 31 2007 Full Year Statuary Accounts to 30 June 2007

Documents

Transcript of 012.ASX IAW Oct 31 2007 Full Year Statuary Accounts to 30 June 2007