116.ASX IAW Feb 25 2011 08.20 Half Yearly Report and Accounts

INTEGRATEDLEGALHOLDINGSLIMITED
ACN120394194
ASXAppendix4D
RESULTSFORANNOUNCEMENTTOTHEMARKET
Currentreportingperiod:
Previouscorrespondingperiod:
Halfyearended31December2010
EARNINGS
Percentage
change
UP(+)/DOWN()
Amount
$A
+18%
13,616,834
+96%
755,906
+96%
755,906
Amount
pershare
0.30cents
0.25cents
Frankedamount
pershareat30%
0.30cents
0.25cents
Revenuefromordinaryactivities
Profitfromordinaryactivitiesaftertaxattributable
tomembers
Netprofitfortheperiodattributabletomembers
DIVIDENDS
2011Interimdividend
Correspondingperiod
Recorddatefordeterminingentitlementstothe
2011interimdividend
Paymentdateforthe2011interimdividend
11April2011
2May2011
TheCompanyoperatesadividendreinvestmentplan(DRP).Furtherdetailsaredisclosedin
theinterimdividenddetailssectionofthisreport.
DRPdiscountrate
5%
LastdateforreceiptofDRPelectionnoticesforthe
2011interimdividend
18April2011
EARNINGSPERSHARE
Basicanddilutedearningspershare
NETTANGIBLEASSETBACKING
Nettangibleassetbackingper
security
Percentage
change
UP(+)/DOWN()
+54%
31Dec2010
0.86
31Dec2009
0.56
Percentage
change
UP(+)/DOWN()
31Dec2010
31Dec2009
+19%
6.98
5.87
ACN120394194
ASXAppendix4D
RESULTSFORANNOUNCEMENTTOTHEMARKET
Consolidated operating revenues of $13,616,834 were 18% higher than the previous
correspondinghalfyearperiodof$11,588,400operatingrevenues.Revenuefromordinary
activitiesincreasedduetoorganicgrowthwithinexistingmemberfirms.
Thefollowingtablesummarisesresultsfortheperiod,theFullYear2010,andeachofthe
halfyearsof2010.
RESULTSSUMMARY
FirstHalf
SecondHalf
FullYear
FirstHalf
2010
2010
2010
2011
$m
$m
$m
$m
Operatingrevenue
13.62
23.87
12.28
11.59
Netprofitaftertax
0.76
0.85
0.47
0.38
Earningspershare
0.86cents
1.18cents
0.62cents
0.56cents
Dividendpershare
0.30cents
0.75cents
0.50cents
0.25cents
Operatingcashinflows
1.03
1.45
1.26
0.19
Nettangibleassetbackingpershare
6.98cents
6.54cents
6.54cents
5.87cents
Debt/equityratio
8%
11%
11%
18%
Forthehalfyearended31December2010,theconsolidatedentitygeneratedanetprofit
after tax of $755,906 compared to a full year 2010 net profit after tax of $853,494,
$467,731forthehalfyearended30June2010andahalfyearended31December2009
netprofitaftertaxof$385,763.
Earningspersharefortheperiodwere0.86centspershare,comparedtotheyearended
30 June 2010 of 1.18 cents (30 June 2010 halfyear: 0.62 cents; 31 December 2009 half
year:0.56cents).
TheGrouphasdeclaredafullyfrankedinterimdividendof0.30centswithrespecttothe
financial year ended 30 June 2011 (2010 interim dividend: 0.25 cents). The dividend will
have a record date of 11 April 2011 and a payment date of 2 May 2011. The Group
operatesadividendreinvestmentplan.
Thegroupdoesnothaveanyinterestsinassociatesoutsidethegroup,nordoesithaveany
interestinjointventures.
Further information is included in the Directors Report within the HalfYear Financial
Report.
ACN120394194
(ASX:IAW)
HalfYearFinancialReport
forthehalfyearended31December2010
FINANCIALREPORTFORTHEHALFYEARENDED
31DECEMBER2010
ACN120394194
Contents
Corporateinformation.............................................................................................................1
Directorsreport......................................................................................................................2
Consolidatedstatementoffinancialposition..........................................................................6
Consolidatedstatementofcomprehensiveincome................................................................7
Consolidatedstatementofcashflows.....................................................................................8
Consolidatedstatementofchangesinequity.........................................................................9
Notestotheconsolidatedfinancialstatements....................................................................10
Directorsdeclaration............................................................................................................24
Auditorsindependencedeclaration.....................................................................................25
Independentauditorsreviewreport....................................................................................26
31DECEMBER2010
ACN120394194
CorporateInformation
ABN20120394194
Directors
TheHonJohnDawkins,Chairman
AnneTregonning,NonexecutiveDirector
GraemeFowler,ManagingDirector/ChiefExecutive
CompanySecretary
JeanMarieRudd
Registeredoffice
Level8,WesfarmersHouse
40TheEsplanade
PerthWA6000
Principalplaceofbusiness
HeadOffice
Level22
1MarketStreet
SydneyNSW2000
Tel:(02)82636600
ShareRegister
ComputershareInvestorServicesPtyLimited
Level2
45StGeorgesTerrace
PerthWA6000
Tel:(08)93232000
IntegratedLegalHoldingsLimitedsharesarelistedontheAustralianStockExchange.
Solicitors
TalbotOlivier
ArgyleLawyers
Level8,WesfarmersHouse
Level22
40TheEsplanade
1MarketStreet
PerthWA6000
SydneyNSW2000
Bankers
NationalAustraliaBankLimited
50StGeorgesTerrace
PerthWA6000
Auditor
Ernst&Young
11MountsBayRoad
PerthWA6000
31DECEMBER2010
ACN120394194
DirectorsReport
The directors of Integrated Legal Holdings Limited (the Company) submit the halfyear financial
reportforthehalfyearended31December2010.
DIRECTORS
ThenamesoftheCompanysdirectorsinofficeduringthehalfyearanduntilthedateofthisreport
aresetoutbelow.Directorswereinofficeforthisentireperiodunlessotherwisestated.
TheHonJohnDawkinsAO(NonexecutiveChairman)
AnneTregonning(NonexecutiveDirector)
GraemeFowler(ManagingDirector)
REVIEWANDRESULTSOFOPERATIONS
Consolidatedoperatingrevenuesof$13,616,834were18%higherthanthepreviouscorresponding
halfyearperiodof$11,588,400operatingrevenues.Revenuefromordinaryactivitiesincreaseddue
toorganicgrowthwithinexistingmemberfirms.
Thefollowingtablesummarisesresultsfortheperiod,theFullYear2010,andeachofthehalfyears
of2010.
RESULTSSUMMARY
FirstHalf
SecondHalf
FullYear
FirstHalf
2010
2010
2010
2011
$m
$m
$m
$m
Operatingrevenue
13.62
23.87
12.28
11.59
Netprofitaftertax
0.76
0.85
0.47
0.38
Earningspershare
0.86cents
1.18cents
0.62cents
0.56cents
Dividendpershare
0.30cents
0.75cents
0.50cents
0.25cents
Operatingcashinflows
1.03
1.45
1.26
0.19
Nettangibleassetbackingpershare
6.98cents
6.54cents
6.54cents
5.87cents
Debt/equityratio
8%
11%
11%
18%
Forthehalfyearended31December2010,theconsolidatedentitygeneratedanetprofitaftertax
of $755,906 compared to a full year 2010 net profit after tax of $853,494, $467,731 for the half
yearended30June2010andahalfyearended31December2009netprofitaftertaxof$385,763.
Earningsper sharefortheperiodwere0.86centspershare,comparedtotheyearended30June
2010of1.18cents(30June2010halfyear:0.62cents;31December2009halfyear:0.56cents).
Operating cash flows for the period were positive at $1,029,230, compared with operating cash
inflowsof$1,448,173forthefullyear2010and$190,150forthe31December2009halfyear.
The Company has maintained a strong balance sheet with bank loans of $0.95m at 31 December
2010(30June2010:$0.95m;31December2009:$1.85m).Thisrepresentsadebttoequityratioof
8% (30 June 2010: 11%; 31 December 2009: 18%). The Companys existing working capital bank
facilityhasalimitofupto$3.15m.
31DECEMBER2010
ACN120394194
DirectorsReport
TheGrouphasdeclaredafullyfrankedinterimdividendof0.30centswithrespecttothefinancial
yearended30June2011(2010interimdividend:0.25cents).Thedividendwillhavearecorddateof
11April2011andapaymentdateof2May2011.TheGroupoperatesadividendreinvestmentplan.
The dividend policy of the Company is that dividends will be declared after consideration of the
performanceoftheCompanyincludingcashflowsandfutureinvestmentopportunities.
TheDirectorsarepleasedwiththefirsthalfresultsandwiththecontinuedstrategicandoperational
progressthathasbeenmade.
Theperiodwashighlightedbycontinuedstrongorganicgrowthgeneratedbythememberfirms.
ACQUISITIONOFWOJTOWICZKELLYLEGAL
InDecember2010theCompanyannouncedtheacquisitionof WojtowiczKellyLegal(WK)under
merger arrangements with the existing member firm Brett Davies Lawyers (incorporating Law
Central)(BDL).
WKisanestablishedandwellregardedPerthCBDbasedcommerciallawfirmdeliveringservicesto
commercial enterprises and private individuals predominantly in Western Australia, but also to
enterprisesbasedinSoutheastAsiawithAustralianinterests.
WK was established in 1994 and has developed a range of legal services including corporate and
commercial, property, litigation, family, migration advice, local government law and settlements
(conveyancing).
WKalsohasanofficeinRockinghamsouthofPerth,andarepresentativeofficeinSingapore.
ThefirmconsistsofthreePartners,GavanKelly,AnthonyQuaheandJohnWojtowicz,with40staff,
andannualfeeincomeofapproximately$5.3m.
WK will merge with existing member firm BDL, with the merged firm having four Principals,
approximately54staffandannualfeeincomeofmorethan$7.5m.
TheDirectorsexpectthetransactiontobemateriallyEPSpositiveinthe2012financialyearandwill
enhancetheCompanysgrowthprospects.
InaccordancewiththeCompanysacquisitionmodel,debtorsandworkinprogressarenotacquired
aspartoftheacquisition.Consequently,theDirectorsnotethattheCompanywillinvestfundsfrom
operations in the build up of working capital (including debtors and work in progress) to normal
levelspostacquisition.
OUTLOOK
TheDirectorsconsidertheCompanytobewellplacedforthefuture,inparticularnoting:
TheCompanyhasgoodbusinesseswithstrongmarketpositionsandgrowthprospects.
The Company is successfully building a strong culture of likeminded people with common
aspirationsforabovemarketgrowth,businessimprovementandworkingtogether.
3
31DECEMBER2010
ACN120394194
DirectorsReport
TheCompanyhasdemonstratedanabilitytoachievestrongandconsistentrevenuegrowth.
IntegratedLegalHoldingsLimitedwasnominatedthefastestgrowinglegalfirmbyfeeincomein
Australia in 2009 and the second fastest growing legal firm in 2010 (source: Australasian Legal
Business).Additionally,theGroupwasrankedfifthinBRWsThe2010FastStartersList.
OrganicandacquisitiongrowthopportunitiesfortheGroupandformemberfirms.
TheCompanyhasastrongbalancesheetandavailablefundingforfurtheracquisitions.
Scopeforbusinessperformanceimprovementinallmemberfirms,providinganopportunityfor
theCompanytoincreaseprofitabilityovertime.
Inparticular,anopportunityexiststoincreaseprofitabilitybyachievingincreasedscaleatbotha
Groupandmemberfirmlevel.
Atagrouplevelthismeanssecuringmorememberfirmstosharethefixedoverheadburdenof
Corporate.And,atamemberfirmlevel,thismeansachievingorganicandacquisitiongrowthto
utiliseexistingpremises,andtosharethemanagementandinfrastructurecoststhatthesefirms
nowhaveinplace.
TheDirectorsconsiderthatlongtermcompetitiveadvantagecanbeachievedbytheCompanyin
supportingmemberfirmsindevelopingscaletounderpinfuturegrowthandprofitability.
TheeffectivedeliveryoftheCompanysstatedstrategyofdevelopinganationalnetworkofleading
medium sized law firms will take time. The Company remains focused on incrementally and
selectivelybuyinggoodbusinesseswithlikemindedpeopleandworkingwiththemtowardsquality
andsustainablegrowthandimprovement.
Consistent with this position, the outlook for the Group is positive and the Directors expect the
Companytoachieveearningspersharegrowthfor2011,providingreasonablebusinessconditions
continueforthesecondhalf.
31DECEMBER2010
ACN120394194
DirectorsReport
AUDITORSINDEPENDENCEDECLARATION
A copy of the auditors independence declaration in relation to the review for the halfyear is
providedonpage25andformspartofthisreport.
Signedinaccordancewitharesolutionofthedirectors.
GFowler
ManagingDirector
Perth,24February2011
31DECEMBER2010
ACN120394194
ConsolidatedStatementofFinancialPosition
ASSETS
Currentassets
Cashandcashequivalents
Tradeandotherreceivables
Workinprogress
Totalcurrentassets
Noncurrentassets
Plantandequipment
Prepayments
Goodwill
Intangibleassets
Deferredtaxassets
Availableforsalefinancialassets
Totalnoncurrentassets
TOTALASSETS
LIABILITIES
Currentliabilities
Tradeandotherpayables
Interestbearingloansandborrowings
Incometaxpayable
Provisions
Otherliabilities
Totalcurrentliabilities
Noncurrentliabilities
Tradeandotherpayables
Interestbearingloansandborrowings
Provisions
Otherliabilities
Totalnoncurrentliabilities
TOTALLIABILITIES
NETASSETS
EQUITY
Issuedcapital
Accumulatedlosses
Reserves
TOTALEQUITY
Note
5
6
7
8
10
10
11
12
Consolidated
Asat
31Dec2010
$
2,118,898
6,888,519
1,669,072
10,676,489
1,152,899
29,230
10,470,600
47,520
149,420
3,274
11,852,943
22,529,432
2,903,394
1,212,205
341,864
727,217
82,489
5,267,169
37,554
176,082
240,198
86,364
540,198
5,807,367
16,722,065
32,369,596
(16,612,239)
964,708
16,722,065
Consolidated
Asat
30June2010
$
2,151,449
7,538,870
1,353,354
11,043,673
1,181,314
29,230
10,470,600
65,340
101,089
2,642
11,850,215
22,893,888
3,317,157
1,573,325
177,524
687,057
279,933
6,034,996
75,107
260,913
197,350
127,608
660,978
6,695,974
16,197,914
32,160,426
(16,688,184)
725,672
16,197,914
TheaboveConsolidatedStatementofFinancialPositionshouldbereadinconjunctionwiththe
accompanyingnotes.
6
31DECEMBER2010
ACN120394194
ConsolidatedStatementofComprehensiveIncome
Note
Professionalfeesrevenue
Interestrevenue
Dividendsreceived
Otherrevenue
Totalrevenue
Occupancyexpenses
Salariesandemployeebenefitsexpenses
Depreciationandamortisationexpenses
Officeexpenses
Advertisingandmarketingexpenses
Otherexpenses
Interestexpenses
Sharebasedpaymentsexpense
Totalexpenses
Profitbeforeincometax
Incometaxexpense
Profitafterincometax
Netprofitfortheperiod
Othercomprehensiveincome
Netgains/(losses)onavailableforsalefinancialassets
Othercomprehensiveincomefortheperiod,netoftax
Totalcomprehensiveincomefortheperiod
Basicearningspershare(cents)
Dilutedearningspershare(cents)
16
Consolidated
Halfyear
ended
31Dec2010
$
Consolidated
Halfyear
ended
31Dec2009
$
13,537,017 11,566,053
78,756
11,996
72
50
989
10,301
13,616,834 11,588,400
(1,091,440) (1,054,668)
(8,716,908) (7,788,993)
(193,400)
(151,887)
(1,492,467) (1,769,227)
(160,364)
(118,382)
(774,690)
(36,192)
(55,198)
(87,360)
(17,844)
(9,702)
(12,502,311) (11,016,411)
1,114,523
571,989
(358,617)
(186,226)
755,906
385,763
755,906
385,763
631
102
756,537
385,865
756,537
385,865
0.86
0.86
0.56
0.56
TheaboveConsolidatedStatementofComprehensiveIncomeshouldbereadinconjunctionwith
theaccompanyingnotes.
7
31DECEMBER2010
ACN120394194
ConsolidatedStatementofCashFlows
Cashflowsfromoperatingactivities
Receiptsfromcustomers
Paymentstosuppliersandemployees
Interestreceived
Sundryincome
Interestandothercostsoffinancepaid
Incometax(paid)/refund
Netcashflowsfromoperatingactivities
Cashflowsfrominvestingactivities
Purchaseofplantandequipment
Proceedsfromthedisposalofplantandequipment
Netcashflowsusedininvestingactivities
Cashflowsfromfinancingactivities
Paymentforshareissueexpenses
Proceedsfromborrowings
Repaymentsofborrowings
Paymentofdividends
Netcashflows(usedin)/fromfinancingactivities
Netincrease/(decrease)incashheld
Cashandcashequivalentsatthebeginningofthe
period
Cashandcashequivalentsattheendoftheperiod
Consolidated
Halfyear
ended
31Dec2010
$
Note
Consolidated
Halfyear
ended
31Dec2009
$
15,171,446
(13,950,215)
78,756
1,061
(29,210)
(242,608)
1,029,230
(147,166)
-
(147,166)
(3,674)
-
(293,065)
(441,556)
(738,295)
143,769
11,408,374
(11,371,200)
11,996
10,337
(58,718)
189,361
190,150
1,948,949
2,092,718
465,875
178,338
(743,040)
3,150
(739,890)
(1,694)
674,664
(410,767)
262,203
(287,537)
TheaboveConsolidatedStatementofCashFlowsshouldbereadinconjunctionwiththe
accompanyingnotes.
8
31DECEMBER2010
ACN120394194
ConsolidatedStatementofChangesinEquity
CONSOLIDATED
At1July2009
Profitfortheperiod
Othercomprehensive
income
Totalcomprehensive
incomefortheperiod
Transactionswithowners
intheircapacityasowners
Transfertogeneralreserve
Transactioncostsonshare
issue
Sharebasedpayments
Balanceasat31December
2009
CONSOLIDATED
At1July2010
Profitfortheperiod
Othercomprehensive
income
Totalcomprehensive
incomefortheperiod
Transactionswithowners
intheircapacityasowners
Dividendspaid
Transfertogeneralreserve
Sharesissued
Transactioncostsonshare
issue
Sharebasedpayments
Balanceasat31December
2010
Issued
Capital
$
30,504,813
Net
Unrealised
Accumulated
GainsReserve
Losses
$
$
(16,641,034)
(1,373)
General
Reserve
$
Total
Equity
$
13,862,406
385,763
385,763
102
102
385,763
102
385,865
(1,694)
9,702
30,512,821
Issued
Capital
$
32,160,426
727,113
(1,694)
9,702
(1,271)
727,113
14,256,279
Net
Unrealised
Accumulated
GainsReserve
Losses
$
$
(16,688,184)
(1,441)
General
Reserve
$
727,113
Total
Equity
$
16,197,914
(727,113)
(16,982,282)
755,906
195,000
(3,674)
17,844
32,369,596
755,906
631
631
755,906
631
756,537
238,405

(441,556)
195,000
(441,556)
(238,405)
(16,612,239)
(810)
(3,674)
17,844
965,518
16,722,065
TheaboveConsolidatedStatementofChangesinEquityshouldbereadinconjunctionwiththe
accompanyingnotes.
9
31DECEMBER2010
ACN120394194
NotestotheConsolidatedFinancialStatements
1) CORPORATEINFORMATION
ThegeneralpurposecondensedfinancialreportofIntegratedLegalHoldingsLimited(theCompany)
forthehalfyearended31December2010wasauthorisedforissueinaccordancewitharesolution
oftheDirectorson24February2011.IntegratedLegalHoldingsLimitedisacompanyincorporated
inAustraliaandlimitedbyshares,whicharepubliclytradedontheAustralianStockExchange(ASX).
2) BASISOFPREPARATIONANDACCOUNTINGPOLICIES
Basisofpreparation
This general purpose condensed financial report for the halfyear ended 31 December 2010 has
been prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations Act
2001.
The halfyear financial report does not include all notes of the type normally included within the
annualfinancialreportandthereforecannotbeexpectedtoprovideasfullanunderstandingofthe
financial performance, financial position and financing and investing activities of the consolidated
entityasthefullfinancialreport.
Itisrecommendedthatthehalfyearfinancialreportbereadinconjunctionwiththeannualreport
fortheyearended30June2010andconsideredtogetherwithanypublicannouncementsmadeby
IntegratedLegalHoldingsLimitedanditscontrolledentities(theGroup)duringthehalfyearended
31December2010inaccordancewiththecontinuousdisclosureobligationsundertheASXListing
Rules.
ThehalfyearfinancialreportispreparedinAustraliandollarsandonahistoricalcostbasis,except
foravailableforsaleinvestments,whichhavebeenmeasuredatfairvalue.
For the purposes of preparing the halfyear financial report, the halfyear has been treated as a
discretereportingperiod.
Significantaccountingpolicies
Apartfromthechangesinaccountingpolicynotedbelow,theaccountingpoliciesand methodsof
computationarethesameasthoseadoptedinthemostrecentannualfinancialstatements.
Changesinaccountingpolicy
From 1 July 2010, the Group has adopted all Australian Accounting Standards and Interpretations,
mandatoryforannualperiodsbeginningonorafter1July2010.Adoptionofthesestandardsand
interpretationsdidnothaveaneffectonthefinancialpositionorperformanceoftheGroup.
TheGrouphaselectednottoearlyadoptanynewstandardsoramendmentsthatareissuedbutnot
yeteffective.
Basisofconsolidation
The halfyear consolidated financial statements comprise the financial statements of Integrated
LegalHoldingsLimitedanditssubsidiariesasat31December2010.
10
31DECEMBER2010
ACN120394194
Subsidiariesareallthoseentities(includingspecialpurposeentities)overwhichtheGrouphasthe
power to govern the financial and operating policies so as to obtain benefits from their activities.
Theexistenceandeffectofpotentialvotingrightsthatarecurrentlyexercisableorconvertibleare
consideredwhenassessingwhetheragroupcontrolsanotherentity.
3) SEGMENTINFORMATION
Identificationofreportablesegments
TheGrouphasidentifieditsoperatingsegmentsbasedontheinternalreportsthatarereviewedand
used by the executive management team (the chief operating decision maker) in assessing
performanceandindeterminingtheallocationofresources.
The operating segments are identified by management based on how the financial and operating
resultsoftheGrouparemonitoredandpresentedinternallytotheexecutivemanagementteam.
Thereportablesegmentsareidentifiedbymanagementbasedonthenatureofthebusinessandthe
similarities of services provided, method of delivery and type of clients as the Groups risks and
returnsareaffectedpredominantlybydifferencesinlegalproductsandservicesperformed.
Theoperatingbusinessesareorganisedandmanagedseparatelyaccordingtothenatureofthelegal
productsandservicesprovided,witheachsegmentrepresentingastrategicbusinessunitthatoffers
differentlegalproductsandservesdifferentmarkets.
Thefollowingreportablesegmentshavebeenidentifiedbymanagement:
LegalServicesDivision
OperatoroflegalpracticesthroughoutAustralia
InformationTechnologyDivision
Provides an internet portal designed to provide easy access to a range of legal and other
documents tothelegalprofessionandpublicalikeandinformationaboutvariousareasof
law.
Accountingpoliciesandintersegmenttransactions
Theaccountingpoliciesusedbythe Groupinreportingsegmentsinternallyarethesame asthose
containedinnote1totheaccountsandinthepriorperiodexceptasdetailedbelow:
Intersegmentsales
Intersegmentsalesarerecognisedatcostwithnomarginbuiltintotheintersegmenttransactions,
andaimstoencourageintersegmentworkreferrals.
Unallocatedrevenueandassets
Corporateitemsarenotallocatedtooperatingsegmentsastheyarenotconsideredpartofthecore
operationsofanysegments.
11
31DECEMBER2010
ACN120394194
3)SEGMENTINFORMATION(continued)
Reportablesegments
The following table presents revenue and profit information for reportable segments for the half
yearsended31December2010and31December2009.
Information
Legal
Technology
Total
Services
$
$
$
Revenue
Professionalfees
13,116,222
420,795
13,537,017
Interestrevenue
40,501

40,501
Otherrevenue:
Advertisingrevenue

989
989
Intersegmentrevenue

Totalsegmentrevenue
13,156,723
421,784
13,578,507
Unallocatedrevenue:
Interestreceived
38,255
Dividendsreceived
72
Totalunallocatedrevenue
38,327
Intersegmentelimination
Totalrevenueperstatementof
comprehensiveincome
13,616,834
Result
Segmentresult
1,804,293
133,203
1,937,496
Reconciliationofsegmentnetprofitbeforetax
tonetprofitaftertax
Incometaxexpenseat30%(2009:30%)
(358,617)
Unallocateditems:
Interestrevenue
38,255
Salariesandemployeebenefits
expenses
(465,639)
Administrativeexpenses
(304,109)
Otherunallocateditems
(36,282)
Financecosts
(55,198)
Netprofitaftertaxperthestatementof
comprehensiveincome
755,906
12
31DECEMBER2010
ACN120394194
Total assets have decreased by 3% since the last annual report. Segment assets for the halfyear
ended31December2010areasfollows:
Information
Legal
Technology
Total
Services
$
$
$
Asat31December2010
Segmentassets
Segmentoperatingassets
19,008,828
2,144,635
21,153,463
Unallocatedassets:
2,066,246
Deferredtaxassets
131,863
Prepayments
40,558
Investmentinassociates
4
3,274
Plantandequipment
3,901
Totalunallocatedassets
2,245,846
Intersegmenteliminations
(869,877)
Totalassetsperstatementoffinancialposition
22,529,432
Totalassetsforthehalfyearended31December2010hadnotmateriallychangedfromthe30June
2010annualreportandthereforecomparativesforsegmentassetshavenotbeenprovided.
13
31DECEMBER2010
ACN120394194
Revenue
Professionalfees
Interestrevenue
Otherrevenue:
Advertisingrevenue
Sundryrevenue
Intersegmentrevenue
Totalsegmentrevenue
Unallocatedrevenue:
Interestreceived
Dividendsreceived
Totalunallocatedrevenue
Intersegmentelimination
Totalrevenueperstatementof
comprehensiveincome
Result
Segmentresult
Reconciliationofsegmentnetprofitbeforetax
tonetprofitaftertax
Incometaxexpenseat30%(2008:30%)
Unallocateditems:
Salariesandemployeebenefits
expenses
Officeexpenses
Otherunallocateditems
Financecosts
Netprofitaftertaxperthestatementof
comprehensiveincome
Segmentassets
Segmentoperatingassets
Unallocatedassets:
Deferredtaxassets
Prepayments
Investmentinassociates
Plantandequipment
Totalunallocatedassets
Intersegmenteliminations
Totalassetsperstatementoffinancialposition
Information
Technology
$
Legal
Services
$
Total
$
389,536

7,372
1,975

398,883
11,176,517
526
954
5,765
11,183,762
11,566,053
526
7,372
2,929
5,765
11,582,645
11,470
50
11,520
(5,765)
11,588,400
110,045
1,191,118
1,301,163
(186,226)
(406,361)
(238,379)
2,926
(87,360)
385,763
17,843,553
2,155,205
19,998,758
176,256
245,740
118,723
712,888
2,794
4,161
1,260,562
(717,537)
20,541,783
14
31DECEMBER2010
ACN120394194
4) OTHERREVENUE
Sundryincome
5) CASHANDCASHEQUIVALENTS
Cashatbankandinhand
Consolidated
Halfyear
ended
31Dec2010
$
Consolidated
Halfyear
ended
31Dec2009
$
989
Consolidated
At
31Dec2010
$
10,301
Consolidated
At
30Jun2010
$
2,118,898
2,151,449
Reconciliationtostatementofcashflows
Forthepurposesofthestatementofcashflows,cashandcash
equivalentscomprisethefollowingat31December:
Cashatbankandinhand
Bankoverdrafts
6) TRADEANDOTHERRECEIVABLES
CURRENT
Tradereceivables
Allowanceforimpairmentloss(a)
Unbilledclientdisbursements
Prepayments
Otherreceivables
Consolidated
Halfyear
ended
31Dec2010
$
Consolidated
Halfyear
ended
31Dec2009
$
2,118,898
(26,180)
2,092,718
Consolidated
At
31Dec2010
$
6,573,069
(512,018)
6,061,051
257,942
548,150
21,376
6,888,519
249,796
(71,458)
178,338
Consolidated
At
30Jun2010
$
6,854,442
(133,006)
6,721,436
190,847
589,361
37,226
7,538,870
15
31DECEMBER2010
ACN120394194
a) Allowanceforimpairmentloss
Trade receivables are generally noninterest bearing and are generally on 3060 day terms. An
allowance for impairment loss is recognised when there is objective evidence that an individual
trade receivable is impaired. An impairment loss of $551,497 (30 June 2010: $274,365 and 31
December2009:$159,851)hasbeenrecognisedbytheGroupinthecurrentperiodwhichincludes
bad debts expense recognised of $172,485 (30 June 2010: $246,197 and 31 December 2009:
$47,241).Theseamountshavebeenrecognisedinthestatementofcomprehensiveincomeinthe
lineitemotherexpenses.
Movementsintheallowanceforimpairmentlosswereasfollows:
Consolidated
Consolidated
At
31Dec2010
$
133,006
379,012
512,018
Openingbalanceatthebeginningoftheperiod
Chargefortheperiod
Closingbalanceattheendoftheperiod
7) GOODWILL
Openingbalance
Acquisitionofsubsidiary
Deferredconsideration
Closingbalance
Consolidated
At
31Dec2010
$
10,470,600
10,470,600
Consolidated
At
30Jun2010
$
10,372,263

98,337
10,470,600
At
30Jun2010
$
104,839
28,167
133,006
Consolidated
At
31Dec2009
$
10,372,263
48,976
10,421,239
a) DescriptionoftheGroupsgoodwill
After initial recognition, goodwill acquired in a business combination is measured at cost less any
accumulatedimpairmentlosses.Goodwillisnotamortisedbutissubjecttoimpairmenttestingon
anannualbasisorwheneverthereisanindicationofimpairment.
16
31DECEMBER2010
ACN120394194
8) INTANGIBLEASSETS
a) Reconciliationofcarryingamountsatthebeginningandendoftheperiod
Consolidated
Consolidated
Openingbalance
(netofaccumulatedamortisation)
Amortisation
Closingbalance
(netofaccumulatedamortisation)
At
31Dec2010
$
At
30Jun2010
$
Consolidated
At
31Dec2009
$
65,340
(17,820)
100,980
(35,640)
136,620
(53,460)
47,520
65,340
83,160
Cost(grosscarryingamount)
Accumulatedamortisation
Netcarryingamountattheendoftheperiod
Consolidated
At
31Dec2010
$
Consolidated
At
30Jun2010
$
Consolidated
At
31Dec2009
$
163,254
(115,734)
163,254
(97,914)
163,254
(80,094)
47,520
65,340
83,160
b) DescriptionoftheGroupsidentifiedintangibleassets
Intangibleassetsrepresentthevalueofleasedpremisesacquiredupontheacquisitionofthelegal
practice of Peter Marks in the 30 June 2008 financial year and is carried at cost less accumulated
amortisation.Thisintangibleassethasbeenassessedashavingafinitelifeandisamortisedusing
the straight line method over the remaining term of the lease. The amortisation has been
recognised in the statement of comprehensive income in the line item depreciation and
amortisationexpenses.
9) INTERESTBEARINGLOANSANDBORROWINGS
Consolidated
Consolidated
CURRENT
Bankoverdraft
Obligationsunderfinanceleasesandhirepurchasecontracts
Insurancepremiumfunding(unsecured)
Bankloan(secured)
NONCURRENT
Obligationsunderfinanceleasesandhirepurchasecontracts
At
31Dec2010
$
At
30Jun2010
$
26,180
167,649
68,376
950,000
1,212,205
202,500
176,811
244,014
950,000
1,573,325
176,082
260,913
17
31DECEMBER2010
ACN120394194
10) OTHERLIABILITIES
Consolidated
At
31Dec2010
$
CURRENT
Deferredconsiderationpayable
Leaseincentiveobligation(1)
NONCURRENT
Leaseincentiveobligation(1)
Consolidated
At
30Jun2010
$

82,489
82,489
197,444
82,489
279,933
86,364
127,608
(1) Operating lease incentives are recognised as a liability when received and subsequently reduced by allocating lease
paymentsbetweenrentalexpenseandreductionoftheliabilitytoensurerentalexpenseisrecognisedonastraight
linebasisovertheleaseterm.
11) ISSUEDCAPITAL
a) Ordinaryshares
Fullypaidshares
Partlypaidshares(1)
Forfeitedsharesheldintrust(2)
Consolidated
31Dec2010
Shares
88,037,999
856,217
88,894,216
Consolidated
30Jun2010
Shares
86,139,666
371,667
(26,667)
86,484,666
Consolidated
31Dec2010
$
32,317,671
51,925

32,369,596
Consolidated
30Jun2010
$
32,126,345
34,081

32,160,426
(1)SharesissuedundertheDeferredEmployeeSharePlanthatvestoverthreeyears(note16).
(2)SharesissuedbutforfeitedundertheDeferredEmployeeSharePlan,heldintrust(note16).
b) Movementsinordinarysharecapital
Consolidated
Openingbalanceasat1July2010
Shares
86,484,666
32,160,426
IssueofsharesundertheDeferredEmployeeSharePlan
(refernote16)
484,550
17,844
Issue of shares at 10 cents per share to vendors of The

Argyle Partnership Lawyers in final satisfaction of
deferredconsiderationpayableon22September2010
1,800,000
180,000
Issue of shares at 12 cents per share in part satisfaction

of2010Principalprofitshareentitlement
125,000
15,000
(3,674)
88,894,216
32,369,596
Costsassociatedwithissuingshares
Balanceasat31December2010
18
31DECEMBER2010
ACN120394194
Consolidated
Openingbalanceasat1July2009
Costsassociatedwithissuingshares
IssueofsharesundertheDeferredEmployeeSharePlan
(refernote16)
Balanceasat31December2009
12) RESERVES
Netgains/(losses)onavailableforsalefinancialassets(a)
Generalreserve(b)
Shares
69,346,178
30,504,813
66,667
69,412,845
9,702
30,512,821
Consolidated
At
31Dec2010
$
(810)
965,518
964,708
(1,694)
Consolidated
At
30Jun2010
$
(1,441)
727,113
725,672
a) Netunrealisedgainsreserve
Thisreserverecordsmovementsinthefairvalueofavailableforsalefinancialassets.
b) Generalreserve
Due to accumulated losses incurred prior to the listing of the company on 17 August 2007, the
Directors resolved to isolate profits derived from trading activities since listing through the
establishmentofaGeneralReserve.
During the period, $238,405, representing trading profits for the year ended 30 June 2010 less
dividendspaid,wastransferredtotheGeneralReservefromAccumulatedLosses.
AccumulatedlossesincurredpriortolistingoftheCompanyandcommencementoftradingactivities
arosefromthefollowingtransactions:
(a) impairmentlossesincurredonsharesissuedtovendorsofTalbotOlivierBusinessAssets,Brett
DaviesLawyersBusinessAssetsandLawCentralCoPtyLtdshareholderson29August2006;and
(b) Share based payments expenses for shares issued at a deemed value of 50 cents per share to
directorsandsupporterson29August2006and28February2007.
13) CONTINGENTLIABILITIESANDCONTINGENTASSETS
Therearenocontingentliabilitiesorassetsasat31December2010.
19
31DECEMBER2010
ACN120394194
14) SUBSEQUENTEVENTS
a) AcquisitionoflegalpracticeofWojtowiczKellyLegal
On1February2011theCompanyacquiredthelegalpracticeofWojtowiczKellyLegal(incorporating
CivicLegal,theSimpsonKellyGroup,GibsonTovey&Associates,AllPropertyConveyancingandJan
Simpson Settlements) under merger arrangements with the existing member firm Tax Lawyers
AustraliaPtyLtdtradingasBrettDaviesLawyers.
The merged business will trade as Civic Legal. The four Principals (Anthony Quahe, Brett Davies,
Gavan Kelly, and John Wojtowicz), all of whom are committed to growing the merged business
withintheIntegratedGroup,willactastheseniormanagementteamforthebusiness.
Underthemergerplans,theCompanysexistingBDLbusinesswillberelocatedandintegratedinto
thenearbyofficesofWojtowiczKellyLegal.
TheDirectorsexpectthetransactiontobemateriallyEPSpositiveinthe2012financialyearandwill
enhancetheCompanysgrowthprospects.
The consideration for the transaction is a combination of the issue of 5.7m shares on 1 February
2011 and an upfront cash payment of $924,000 (funded from surplus cash reserves). $125,000 in
deferredcashconsiderationispayableinJuly2011.
Additionally, under the merger agreement, a maximum of $600,000 and minimum of nil in
contingent cash consideration may be payable in September 2013 subject to the merged business
achieving agreed profitability (NPBT) targets in the financial years ended 2012 and 2013. The
contingentconsiderationwillbesettledincashorsharesatthediscretionoftheBoard.
TheDirectorsconsiderthatthecontingentconsiderationwillsupportandfosteraunitedPrincipal
group environment for the merged firm, by incentivising teamwork in the realisation of merger
revenueandcostsynergies.
The contingent consideration has been formulated using Integrated Legal Holdings Limiteds
minimumexpectationsasabase(iethedeferredconsiderationisonlypayableonoutperformance
abovetheseminimumexpectations).
Furthermore, any contingent consideration will only be payable following the achievement of
minimumexpectedlockup(WIPanddebtors)performancebythefirm.
Theacquisitionisstructuredwithsignificantemploymentconstraintsandconditions,consistentwith
theCompanysdisciplinedacquisitionmodelandstrictcriteria.
Atthedateofthisreport,initialaccountingforthebusinessacquisitionhasnotyetbeendetermined
withthefairvalueassessmentoftheidentifiedassetsandliabilitiesacquiredatacquisitionandthe
estimateofthefairvalueofthecontingentconsiderationtobefinalised.Asaresult,itisnotpossible
todisclosethefairvalueoftheidentifiedassetsandliabilitiesthatwillberecognisedat1February
2011, the acquisition date, fair value of consideration transferred or to calculate the value of
goodwill.
20
31DECEMBER2010
ACN120394194
b) Interimdividend
The directors have declared an interim dividend in respect of the year ended 30 June 2011, as
discussedinnote15.
15) INTERIMDIVIDENDDETAILS
Amountpershare
0.30cents
Amountfranked
Fullyfrankedata30%taxrate
Recorddatetodetermineentitlementstothedividend
11April2011
Datetheinterimdividendispayable
2May2011
DividendReinvestmentPlan
The Company operates a dividend reinvestment plan (DRP) which offers eligible shareholders the
opportunitytoreinvestallorpartoftheirdividendsinadditionalsharesintheGroup.TheShares
areissuedata5%discounttotheweightedaveragemarketpriceofsharessoldontheASXduringa
period of 10 trading days (rounded to the nearest half cent), with the period commencing on the
secondtradingdayafterthedividendrecorddate.
ThelastdateforreceiptofanelectionnoticeforparticipationintheDRPwithrespecttotheabove
interimdividendis18April2011.
16) SHAREBASEDPAYMENTS
a) Recognisedsharebasedpaymentsexpense
The expense recognised for employee services received during the halfyear is shown in the table
below:
Consolidated
Consolidated
31Dec2010
31Dec2009
$
$
Expensearisingfromequitysettledsharebasedtransactions
17,844
9,702
b) Typesofsharebasedpaymentplans
Taxexemptemployeeshareplan(TEESP)
AllemployeesareeligibletoparticipateintheTEESPiftheymeetthefollowingcriteria:
i.
TheyareapermanentfulltimeorpermanentparttimeemployeeoftheGroup;
ii.
Theyhavemettheprobationperiodunderthetermsoftheiremploymentcontract;
iii.
Theyareatleast18yearsofage;and
iv.
TheyareanAustralianresidentfortaxpurposes.
21
31DECEMBER2010
ACN120394194
EmployeeswhoparticipateintheTEESPcannominatetocontributeupto$1,000perannumfrom
their pretax wages or salary by way of an effective salary sacrifice towards acquiring fully paid
ordinarysharesintheCompany.
InaccordancewiththerulesoftheTEESP,sharesacquiredundertheplanmustnotbewithdrawnor
otherwise dealt with, commencing from the date the employee acquires a beneficial interest in
thosesharesuntiltheearliestofthedatethat:
i.
Isthreeyearsaftertheacquisitiondate;or
ii.
TheemployeeceasestobeanemployeeoftheGroup.
The rules of the TEESP do not contain any provisions that could result in an employee forfeiting
ownershipofsharesundertheplan.
Deferredemployeeshareplan(DESP)
Shares are granted to key employees and directors of the Group. The DESP is designed to align
participantsinterestswiththoseofshareholdersbyincreasingthevalueoftheCompanysshares.
EmployeesareeligibletoparticipateintheDESPiftheymeetthefollowingcriteria:
i.
TheyareapermanentfulltimeorpermanentparttimeemployeeoftheGroup;
ii.
Theyhavemettheprobationperiodunderthetermsoftheiremploymentcontract;
iii.
Theyareatleast18yearsofage;and
iv.
TheyareanAustralianresidentfortaxpurposes.
UndertheDESP,senioremployeesareinvitedtoreceivefullypaidordinarysharesintheCompany
subject to the achievement of a number of key performance indicators such as contribution to
earningspersharefortheGroup.
SharesmayeitherbeacquiredonmarketbytheGrouporissuedbytheParent.Duringthehalfyear
ended31December2010,484,550shares(30June2010:40,000shares)weregrantedbytheParent
withthecostbeingexpensedoveravestingperiodofthreeyears.Thefairvalueofthesharesisset
atthemarketpriceofthesharesonthedateofgrant.Theimpactontheprofitandlossforthehalf
yearended31December2010is$17,844(31December2009:$9,702).
Whenaparticipantceasesemploymentpriortothevestingoftheirshares,thesharesareforfeited
in full unless otherwise determined by the Board. In the event of a change of control, the
performance period end date will be brought forward to the date of the change of control and
awardswillvestsubjecttoperformanceoverthisshortenedperiod.
Therearenocashsettlementalternatives.
22
31DECEMBER2010
ACN120394194
c) SummaryofsharesgrantedunderTEESPandDESParrangements
NosharesweregrantedundertheTEESPduringthehalfyearended31December2010.
The following table illustrates the number of and movements in shares granted during the period
undertheTEESPandtheDESP:
Consolidated
Consolidated
31Dec2010
31Dec2009
No.
No.
TEESP:
Openingbalanceat1July
252,672
255,842
(1)

Transferredtodepartedemployeesduringtheperiod
Closingbalanceasat31December
252,672
255,842
DESP:
Openingbalanceat1July
Grantedduringtheperiod
Closingbalanceasat31December
371,667
484,550
856,217
331,667
40,000
371,667
(1) Shares are transferred out of an employee trust into the employees name on termination of
employment.
d) Weightedaverageremainingvestingperiod
Theweightedaverageremainingvestingperiodasat31December2010forthesharesissuedis1.73
years(30June2010:1.23years).
e) Weightedaveragefairvalue
Theweightedaveragefairvalueofsharesgrantedduringtheperiodwas12.4cents(30June2010:
15.5cents).
23
31DECEMBER2010
ACN120394194
DirectorsDeclaration
InaccordancewitharesolutionoftheDirectorsofIntegratedLegalHoldingsLimited,Istatethat:
Intheopinionofthedirectors:
a. Thefinancialstatementsandnotesoftheconsolidatedentityareinaccordancewiththe
CorporationsAct2001,including:
i. Givingatrueandfairviewoftheconsolidatedentitysfinancialpositionasat31
December2010andtheperformanceforthehalfyearendedonthatdateofthe
consolidatedentity
ii. ComplyingwithAccountingStandardAASB134InterimFinancialReportingand
theCorporationsRegulations2001
b. Therearereasonablegroundstobelievethatthecompanywillbeabletopayitsdebts
asandwhentheybecomedueandpayable.
OnbehalfoftheBoard
GFowler
Director
Perth,24February2011
24
Auditor's Independence Declaration to the Directors of Integrated Legal

Holdings Limited
In relation to our review of the financial report of Integrated Legal Holdings Limited for the half-year ended
31 December 2010, 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
24 February 2011
Liability limited by a scheme approved

under Professional Standards Legislation
GHM:NR:ILH057
To the members of Integrated Legal Holdings Limited
Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Integrated Legal Holdings Limited (the
company), which comprises the consolidated statement of financial position as at 31 December 2010,
and the consolidated statement of comprehensive income, consolidated statement of changes in equity
and consolidated statement of cash flows for the half-year ended on that date, other selected explanatory
notes and the directors declaration of the consolidated entity comprising the company and the entities it
controlled at the half-year end or from time to time during the half-year.
Directors Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation of the half-year financial report that gives
a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001.
The directors are also responsible for such internal controls that the directors determine are necessary to
enable the preparation of the half-year financial report that is free from material misstatement, whether
due to fraud or error.
Auditors Responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of
Interim and other Financial Reports Performed by the Independent Auditor of the Entity, in order to state
whether, on the basis of the procedures described, we have become aware of any matter that makes us
believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a
true and fair view of the consolidated entitys financial position as at 31 December 2010 and its
performance for the half-year ended on that date; and complying with Accounting Standard AASB 134
Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of Integrated Legal
Holdings Limited and the entities it controlled during the half-year, ASRE 2410 requires that we comply
with the ethical requirements relevant to the audit of the annual financial report.
A review of a half-year financial report consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act
2001. We have given to the directors of the company a written Auditors Independence Declaration a copy
of which is included in the Directors Report.
Liability limited by a scheme approved

under Professional Standards Legislation
GHM:NR:ILH056
Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe
that the half-year financial report of Integrated Legal Holdings Limited is not in accordance with:
a.
the Corporations Act 2001, including:

i)
giving a true and fair view of the consolidated entitys financial position as at 31 December
2010 and of its performance for the half-year ended on that date; and
ii)
complying with Accounting Standard AASB 134 Interim Financial Reporting and the
Corporations Regulations 2001.
Ernst & Young
G H Meyerowitz
Partner
Perth
24 February 2011
GHM:NR:ILH056

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INTEGRATEDLEGALHOLDINGSLIMITED

Issue of shares at 10 cents per share to vendors of The

Issue of shares at 12 cents per share in part satisfaction

Auditor's Independence Declaration to the Directors of Integrated Legal

Ernst & Young

Liability limited by a scheme approved

To the members of Integrated Legal Holdings Limited

Report on the Half-Year Financial Report

Directors Responsibility for the Half-Year Financial Report

Liability limited by a scheme approved

the Corporations Act 2001, including:

Ernst & Young

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