032.ASX IAW Sept 25 2008 Full Year Statuary Accounts

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    INTEGRATED LEGAL HOLDINGS LIMITED ACN 120 394 194

    (ASX: IAW)

    Annual Report For the year ended 30 June 2008

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    INTEGRATED LEGAL HOLDINGS LIMITED ACN 120 394 194

    Corporate Information

    ABN 20 120 394 194

    Directors The Hon John Dawkins, Chairman Anne Tregonning, Nonexecutive Director Graeme Fowler, Managing Director/CEO

    Company Secretary Jean Marie Rudd

    Registered office Ground Floor 201 Adelaide Terrace Perth WA 6000

    Principal place of business Head Office Level 5, Edgecliff Centre 233 New South Head Road Edgecliff NSW 2027 Tel: (02) 9362 3734

    Share Register Computershare Investor Services Pty Limited Level 2 45 St Georges Terrace Perth WA 6000 Tel: (08) 9323 2000

    Integrated Legal Holdings Limited shares are listed on the Australian Stock Exchange.

    Solicitors Talbot Olivier Level 8, Wesfarmers House 40 The Esplanade Perth WA 6000

    Bankers National Australia Bank Limited 50 St Georges Terrace Perth WA 6000

    Auditors Ernst & Young 11 Mounts Bay Road

    Perth WA 6000

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    INTEGRATED LEGAL HOLDINGS LIMITED ACN 120 394 194

    Contents

    Chairman and Managing Directors Report ............................................................................. 1

    Directors Report ...................................................................................................................... 8

    Auditors Independence Declaration ..................................................................................... 26

    Corporate Governance Statement ......................................................................................... 27

    Financial Report ..................................................................................................................... 34

    ASX Additional Information ................................................................................................... 90

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    INTEGRATED LEGAL HOLDINGS LIMITED ACN 120 394 194

    Chairman and Managing Directors Report (continued)

    2

    The company has achieved a strong Balance Sheet position, with cash holdings at 30 June 2008 of $5.63m ($5.04m 31 December 2007), and a net tangible asset backing of 11.71 cents per share, (compared with 10.02 cents per share at 31 December 2007).

    Operating cash flows strengthened during the 2nd half, with $1.12m received for the period since inception.

    The company has grown strongly and selectively expanded during the period, with the announcement of 2 tuck in acquisitions. Annualised revenue of these acquisitions was approximately $1.05m.

    The Directors are of the view that the company is well placed to continue growth both organically and by acquisition by capitalising on the significant opportunity afforded by prevailing industry issues, including succession planning and availability of capital to fund growth. Longterm competitive advantage can be achieved by the company in supporting member firms in developing scale to underpin future growth and profitability.

    The Directors note that they have appointed a new Managing Director for the company effective May 2008. Mr. Graeme Fowler is based in Sydney and was previously Chief Executive Officer of listed accounting and financial services consolidator WHK Group Limited.

    Since commencing with the company, Mr Fowler has in conjunction with the Board undertaken a review of the operations of the company with a view to refining the companys strategy and business model in order to appropriately position the company for achieving strong and consistent future growth in earnings and dividends.

    The Directors are pleased with the Groups performance and the significant progress that has been made during its initial year as a publicly listed company.

    Consistent with this position, the Directors believe the outlook for the Group for 2008/09 is strong and expect growth in operating revenue, net profit after tax and earnings per share.

    2. Full Year Profit Summary

    Net profit after tax for the period ended 30 June 2008 was $1.54m. The result was achieved on total operating revenue of $10.69m.

    Earnings per share were 2.66 cents for the period. o

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    INTEGRATED LEGAL HOLDINGS LIMITED ACN 120 394 194

    Chairman and Managing Directors Report (continued)

    3

    2007/08 (10.5 months) $m

    Revenue Fee Income Other Income Operating Revenue

    10.17 0.51 10.69

    EBITDAI* 2.84 As a % of operating revenue

    Impairment Losses

    26.6%

    0.21 Amortisation Expenses 0.03 Depreciation 0.09 Lease, HP and Interest 0.03 Tax 0.94

    Net Profit After Tax As a % of operating revenue

    1.54 14.4%

    Earnings per Share (weighted average)

    2.66

    *EBITDAI = Earnings before Interest, Tax, Depreciation, Amortisation and Impairment.

    3. Final and Full Year Dividend

    The Directors are pleased to announce a dividend of 2.2 cents per share fully franked (at a 30% tax rate) for the period to 30 June 2008.

    The dividend is in accordance with the companys announcement in October 2007, and is as a result of the companys strong earnings result and cash position. The 2.2 cent dividend represents a pro rata of the announced 2.5 cent dividend policy, on the basis of the shortened initial trading period (10.5 months).

    The dividend of 2.2 cents is payable on 7th November 2008, with the record date for determining entitlements to the dividend being 17 th October 2008.

    The Directors have revised the dividend policy of the company and in future periods dividends will be declared after consideration of the performance of the company and future investment opportunities. Additionally, the Directors advise their intention to declare an interim dividend following release of the companys half year financial results.

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    INTEGRATED LEGAL HOLDINGS LIMITED ACN 120 394 194

    Chairman and Managing Directors Report (continued)

    4

    4. Full Year Profit Analysis and Performance Review

    The companys two divisions performed well during the period.

    2007/08 (10.5 months) $m

    Fee Income - Legal Services

    As a % of operating revenue - IT Services

    As a % of operating revenue

    9.38 92.2% 0.79 7.8%

    Total Fee Income 10.17

    Total Net Contribution from firms* As a % of operating revenue

    3.61 35.5%

    *Net Contribution = Net profit from member firms before tax, interest, depreciation, amortisation and impairment

    The total net contribution from member firms was $3.61m for the period, with a margin of 35.5% of fee income.

    The Directors are particularly pleased with the performance of member firms given that this was the initial period of the member firms as part of the company.

    Legal Services Division

    The Legal Services Division incorporates the businesses of Talbot Olivier and Brett Davies Lawyers.

    Talbot Olivier operates in commercial law, litigation, and insurance, predominantly in the Perth area, and targets commercial clients in the mid market segment.

    Brett Davies Lawyers is a specialist superannuation, taxation and estate planning firm, with predominantly accountant and financial planning clients across Australia.

    The companys strategy is to develop a national network of leading law firms in the capital cities and other key centres across Australia, with a view to the growth and improvement of these businesses, as well as the development of cross referral processes and scale advantage opportunities.

    The company will look to the acquisition of a series of medium sized commercial law firms, as well as a number of specialist law firms in areas such as superannuation, tax and estate planning, and employment law, which will look to leverage member firm relationships in these growth segments.

    The Directors are of the view that the legal services industry is currently influenced by a number of issues which provide an opportunity to develop and grow a network of leading medium