174.ASX IAW Feb 27 2013 17.36 Half Yearly Report and Accounts

8/9/2019 174.ASX IAW Feb 27 2013 17.36 Half Yearly Report and Accounts

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ILH GROUP LIMITEDACN: 120 394 194

ASX Appendix 4D

RESULTS FOR ANNOUNCEMENT TO THE MARKET

Current reporting period: Half-year ended 31 December 2012

Previous corresponding period: Half-year ended 31 December 2011

EARNINGS

Percentage

change

UP(+)/DOWN(-)

Amount

$A

Revenue from ordinary activities flat 16,265,542

Profit from ordinary activities after tax

(before fair value adjustment at 31 December 2011refer

below)**

down 1% 414,362

Profit from ordinary activities after tax attributable to members down 57% 414,362Net profit for the period attributable to members down 57% 414,362

**Half Year Ended 31 December 2011

Reported profit from ordinary activities after tax reconciliation

Amount

$A

Reported Profit from ordinary activities after tax 970,123

Less: Other income from movement in fair value of financial liabilities (550,437)

Profit from ordinary activities after tax

(before fair value adjustment at 31 December 2011)^419,686

^The above measure is not a financial measure recognised by International Financial Reporting

Standards (IFRS). This measure has been inserted because it provides an understanding of theGroups underlying financial performance. The movement in fair value of financial liabilities

represents a non-cash and one-off accounting adjustment arising from an acquisition transaction in

2011, being a deferred consideration liability which was ultimately not payable.

It is recommended that the Appendix 4D be read in conjunction with the Companys ASX released

dated 27 February 2013 and all public announcements made by ILH Group Limited and its controlled

entities (the Group) during the half-year ended 31 December 2012 in accordance with the continuous

disclosure obligations under the ASX listing rules.

DIVIDENDS

Amount

per share

Franked

amountper share

at 30%

2013 interim dividend 0.20 cents 0.20 cents

Corresponding period - -

2012 final dividend 0.80 cents 0.80 cents

Record date for determining entitlements to the

2013 interim dividend12 April 2013

Payment date for the 2013 interim dividend 3 May 2013

The Company operates a dividend reinvestment plan (DRP). Further details are disclosed in the

interim dividend details section of this report.

DRP discount rate 5%

Last date for receipt of DRP election notices for the

2013 interim dividend26 April 2013


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ILH GROUP LIMITEDACN: 120 394 194

ASX Appendix 4D

RESULTS FOR ANNOUNCEMENT TO THE MARKET

NET TANGIBLE ASSET BACKING

31 Dec 2012

Amount

$

31 Dec 2011

Amount

$

Net tangible assets 4,399,620 4,296,354

Total number of shares on issue 110,167,612 102,034,515

Net tangible asset backing per security 3.99 4.21

The group does not have any interests in joint ventures outside the group.

During the period, the Group made an investment in the following business:

ENTITY NAME

Investment

Date

Rockwell Bates Pty Ltd

- 25% interest

- A further 24% interest (bringing total interest to 49%)

2 July 2012

1 November 2012


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ILH GROUP LIMITED

Financial Report

for the half year ended 31 December 2012

ILH Group Limited

ACN 120 394 194

(ASX: IAW)


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ILH Group LimitedFinancial Report

for the Half-Year Ended 31 December 2012 ACN: 120 394 194

Contents

Corporate information ....................................................................................................................... 1

Directors report................................................................................................................................. 2

Consolidated statement of financial position .................................................................................... 4

Consolidated statement of comprehensive income .......................................................................... 5

Consolidated statement of cash flows ............................................................................................... 6

Consolidated statement of changes in equity .................................................................................... 7

Notes to the consolidated financial statements ................................................................................ 8

Directors declaration....................................................................................................................... 21

Auditors independence declaration ................................................................................................ 22

Independent auditors review report ............................................................................................... 23


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1

Corporate Information

ABN 20 120 394 194

Directors

The Hon John DawkinsAO,Non-executiveChairman

Anne Tregonning, Non-executive Director

Graeme Fowler, Managing Director/Chief Executive

Company Secretary

Jean-Marie Rudd

Registered office

Level 211 Mounts Bay Road

Perth WA 6000

Principal place of business

Head Office

Level 22

1 Market Street

Sydney NSW 2000

Tel: (02) 8263 6600

Share RegisterComputershare Investor Services Pty Limited

Level 2

45 St Georges Terrace

Perth WA 6000

Tel: (08) 9323 2000

ILH Group Limited shares are listed on the Australian Stock Exchange.

Solicitors

Talbot Olivier Argyle Lawyers

Level 8, Wesfarmers House Level 22

40 The Esplanade 1 Market StreetPerth WA 6000 Sydney NSW 2000

Bankers

St George Bank National Australia Bank Limited

Level 2, Westralia Plaza 100 St Georges Terrace

167 St Georges Terrace PERTH WA 6000

Perth WA 6000

Auditor

Ernst & Young

11 Mounts Bay RoadPerth WA 6000


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2

Directors Report

The directors of ILH Group Limited (the Company) submit the half-year financial report for the half-year ended 31 December 2012.

DIRECTORS

The names of the Companys directors in office during the half-year and until the date of this report

are set out below. Directors were in office for this entire period unless otherwise stated.

The Hon John DawkinsAO(Non-executive Chairman)

Anne Tregonning (Non-executive Director)

Graeme Fowler (Managing Director)

REVIEW AND RESULTS OF OPERATIONS

Consolidated revenues of $16,265,542 were on par with the previous corresponding half-year period

of $16,275,847.

A fuller commentary on the results for the reporting period is contained in the ASX release 201 3

First Half Results Announcement, dated 27 February 2013.

The Group has declared a fully franked interim dividend of 0.20 cents with respect to the financial

year ended 30 June 2013 (2012 interim dividend: nil). The dividend will have a record date of 12

April 2013 and a payment date of 3 May 2013. The Company operates a dividend reinvestment planand further details are disclosed in note 14 of this report.

INVESTMENT IN ROCKWELL BATES PTY LTD

On 2 July 2012 the Company entered into a Share Purchase Agreement to acquire a 25% interest in

the Melbourne based legal practice of Rockwell Bates.

The consideration for the initial transaction is a combination of the issue of 3,152,958 shares at 9.5

cents per share and cash.

On 1 November 2012 the Company entered into a Share Purchase Agreement to acquire a further24% interest in the legal practice of Rockwell Bates, which has increased the total investment in this

business to 49%.

The consideration for the subsequent transaction is a combination of the issue of 3,026,842 shares at

9.5 cents per share and cash.

Deferred consideration is payable at each of 1 July 2013 and 1 July 2014 subject to the Rockwell

Bates business achieving agreed performance hurdles linked to net profit before tax results achieved

by the associate in each financial year. The fair value of the deferred consideration payable is

$371,898 as at 31 December 2012 based on management expectations.

The acquisition is structured with the usual ILH employment restraints and conditions, consistent

with the Companys disciplined acquisition model andstrict criteria.


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3

Directors Report (continued)

AUDITORSINDEPENDENCE DECLARATION

A copy of the auditors independence declaration in relation to the review for the half-year is

provided on page 22 and forms part of this report.

Signed in accordance with a resolution of the directors.

G Fowler

Managing Director

Perth, 27 February 2013


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The above Consolidated Statement of Financial Position should be read in conjunction with the

accompanying notes

4

Consolidated Statement of Financial Position

Consolidated Consolidated

Note

As at

31 Dec 2012

As at

30 June 2012

ASSETS $ $

Current assets

Cash and cash equivalents 5 1,526,268 1,312,035

Trade and other receivables 6 9,557,922 10,789,460

Work in progress 2,713,361 2,288,190

Income tax receivable 18,551 31,063

Total current assets 13,816,102 14,420,748

Non-current assets

Investment in an associate 15 2,814,675 -

Plant and equipment 1,172,105 1,342,820

Goodwill 7 14,590,139 14,590,139

Intangible assets 8 450,726 167,540

Available-for-sale financial assets 3,301 2,862

Total non-current assets 19,030,946 16,103,361

TOTAL ASSETS 32,847,048 30,524,109

LIABILITIES

Current liabilities

Trade and other payables 3,455,001 3,941,157

Interest bearing loans and borrowings 9 460,920 676,225

Provisions 977,638 1,074,147

Other liabilities 10 266,716 404,072

Total current liabilities 5,160,275 6,095,601

Non-current liabilities

Interest bearing loans and borrowings 9 7,428,636 4,794,054

Provisions 340,578 347,625

Deferred tax liabilities 188,443 106,733

Other liabilities 10 288,631 118,205

Total non-current liabilities 8,246,288 5,366,617TOTAL LIABILITIES 13,406,563 11,462,218

NET ASSETS 19,440,485 19,061,891

EQUITY

Issued capital 11 34,699,051 33,917,382

Accumulated losses (17,368,147) (17,368,147)

Reserves 12 2,109,581 2,512,656

TOTAL EQUITY 19,440,485 19,061,891


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The above Consolidated Statement of Comprehensive Income should be read in conjunction with

the accompanying notes.

5

Consolidated Statement of Comprehensive Income


Note

Half-year

ended

31 Dec 2012

Half-year

ended

31 Dec 2011

$ $

Professional fees revenue 16,265,542 16,275,847

Total revenue 16,265,542 16,275,847

Movement in fair value of financial liabilities - 550,437

Share of profit of an associate 15 94,452 -

Interest income 16,671 69,577

Dividends received 78 76

Other revenue 4 55,514 28,604

Other income 166,715 648,694

Occupancy expenses (1,391,663) (1,414,077)

Salaries and employee benefits expenses (11,106,292) (11,498,763)

Depreciation and amortisation expenses (283,737) (240,224)

Office expenses (2,098,420) (1,810,991)

Advertising and marketing expenses (335,682) (237,133)

Other expenses (317,653) (327,926)

Interest expenses (243,525) (166,939)

Share based payments expense 16 (28,089) (27,956)

Total expenses (15,805,061) (15,724,009)

Profit before income tax 627,196 1,200,532

Income tax expense (212,834) (230,409)

Profit after income tax 414,362 970,123

Net profit for the period 414,362 970,123

Other comprehensive income

Items that may be reclassified subsequently into profit

or loss:

Net gains/(losses) on available-for-sale financial assets 439 (654)

Other comprehensive income for the period, net of tax 439 (654)

Total comprehensive income for the period 414,801 969,469

Basic earnings per share (cents) 0.38 0.96

Diluted earnings per share (cents) 0.38 0.96


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The above Consolidated Statement of Cash Flows should be read in conjunction with the

accompanying notes.

6

Consolidated Statement of Cash Flows


Note

Half-year

ended

31 Dec 2012

Half-year

ended

31 Dec 2011

$ $

Cash flows from operating activities

Receipts from customers 18,538,271 15,753,614

Payments to suppliers and employees (17,390,642) (17,431,140)

Interest received 16,671 69,577

Dividends received 78 76

Sundry income 55,514 28,604

Interest and other costs of finance paid (205,221) (101,824)

Income tax paid

(114,196) (113,980)

Net cash flows from /(used in) operating activities 900,475 (1,795,073)

Cash flows from investing activities

Purchase of plant and equipment (95,439) (427,024)

Payment for intangible assets (338,500) -

Payment for the acquisition of businesses 15 (2,017,809) (1,253,614)

Proceeds from the disposal of plant and equipment 37,614 -

Net cash flows used in investing activities (2,414,134) (1,680,638)

Cash flows from financing activities

Payment for share issue expenses (14,720) (12,979)

Proceeds from borrowings 2,849,495 2,940,337

Repayments of borrowings (543,327) (489,304)

Payment of dividends (641,073) (448,735)

Net cash flows from financing activities 1,650,375 1,989,319

Net increase/(decrease) in cash held 136,716 (1,486,392)

Cash and cash equivalents at the beginning of the

period 1,279,636 2,435,615

Cash and cash equivalents at the end of the period 5 1,416,352 949,223


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The above Consolidated Statement of Changes in Equity should be read in conjunction with the

accompanying notes.

7

Consolidated Statement of Changes in Equity

CONSOLIDATED

Issued

Capital

Accumulated

Losses

Net

UnrealisedGains/

(Losses)

Reserve

General

Reserve

Total

Equity

$ $ $ $ $

At 1 July 2012 33,917,382 (17,368,147) (1,223) 2,513,879 19,061,891

Profit for the period -

-

-

414,362 414,362

Other comprehensive

income -

-

439 -

439

Total comprehensive

income for the period -

-

439 414,362 414,801

Transactions with owners intheir capacity as owners

Dividends paid -

-

-

(817,876) (817,876)

Shares issued 763,884 - - - 763,884

Transaction costs on share

issue (14,721) -

-

-

(14,721)

Share-based payments 28,090 -

-

-

28,090

Income tax on items taken

directly to or transferred

from equity 4,416 -

-

-

4,416

Balance as at

31 December 2012 34,699,051 (17,368,147) (784) 2,110,365 19,440,485

CONSOLIDATED

Issued

Capital

Accumulated

Losses

Net

Unrealised

Losses

Reserve

General

Reserve

Total

Equity

$ $ $ $ $

At 1 July 2011 33,397,152 (16,926,589) (649) 1,542,749 18,012,663

Profit for the period -

-

-

970,123 970,123

Other comprehensive loss -

-

(654) -

(654)

Total comprehensiveincome/(loss) for the period - - (654) 970,123 969,469

Transactions with owners in

their capacity as owners

Dividends paid - - - (586,435) (586,435)

Shares issued 487,700 - - - 487,700

Transaction costs on share

issue (12,980) -

-

-

(12,980)

Share-based payments 27,956 -

-

-

27,956

Balance as at

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


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Notes to the Consolidated Financial Statements

8

1) CORPORATE INFORMATION

The general purpose condensed financial report of ILH Group Limited (the Company) for the

half-year ended 31 December 2012 was authorised for issue in accordance with a resolution of

the Directors on 27 February 2013. ILH Group Limited is a company incorporated in Australia

and limited by shares, which are publicly traded on the Australian Stock Exchange (ASX). The

principal activity of the entities of the consolidated Group is the provision of legal services and

online legal document services in Australia.

2) BASIS OF PREPARATION AND ACCOUNTING POLICIES

a) Basis of preparation

This general purpose condensed financial report for the half-year ended 31 December 2012 hasbeen prepared in accordance with AASB 134 Interim Financial Reporting and the Corporations

Act 2001.

The half-year financial report does not include all notes of the type normally included within the

annual financial report and therefore cannot be expected to provide as full an understanding of

the financial performance, financial position and financing and investing activities of the

consolidated entity as the full financial report.

It is recommended that the half-year financial report be read in conjunction with the annual

report for the year ended 30 June 2012 and considered together with any public

announcements made by ILH Group Limited and its controlled entities (the Group) during thehalf-year ended 31 December 2012 in accordance with the continuous disclosure obligations

under theASX Listing Rules.

The half-year financial report is prepared in Australian dollars and on a historical cost basis,

except for available-for-sale investments, which have been measured at fair value.

For the purposes of preparing the half-year financial report, the half-year has been treated as a

discrete reporting period.

Significant accounting policies

Apart from the changes in accounting policy noted below, the accounting policies and methodsof computation are the same as those adopted in the most recent annual financial statements.

Changes in accounting policy

From 1 July 2012, the Group has adopted all Australian Accounting Standards and

Interpretations, mandatory for annual periods beginning on or after 1 July 2012. Adoption of

these standards and interpretations did not have an effect on the financial position or

performance of the Group.


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9

2) BASIS OF PREPARATION AND ACCOUNTING POLICIES (continued)

b) Basis of consolidation

The half-year consolidated financial statements comprise the financial statements of ILH Group

Limited and its subsidiaries as at 31 December 2012.

Subsidiaries are all those entities (including special purpose entities) over which the Group has

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

activities. The existence and effect of potential voting rights that are currently exercisable or

convertible are considered when assessing whether a group controls another entity.

The financial statements of the subsidiaries are prepared for the same reporting period as the

parent company, using consistent accounting policies.

In preparing the consolidated financial statements, all intercompany balances and transactions,

income and expenses and profit and losses resulting from intra-group transactions have been

eliminated in full.

Subsidiaries are fully consolidated from the date on which control is obtained by the Group and

cease to be consolidated from the date on which control is transferred out of the Group.

c) Investment in an associate

The Groups investment in its associate, an entity in which the Group has significant influence, is

accounted for using the equity method.

Under the equity method, the investment in the associate is initially recognised at cost. The

carrying amount of the investment is adjusted to recognise changes in the Groups share of net

assets of the associate since the acquisition date. Goodwill relating to the associate is included in

the carrying amount of the investment and is neither amortised nor individually tested for

impairment.

The statement of comprehensive income reflects the Groups share of the results of operations

of the associate. When there has been a change recognised directly in the equity of the

associate, the Group recognises its share of any changes, when applicable, in the statement of

changes in equity. Unrealised gains and losses resulting from transactions between the Groupand the associate are eliminated to the extent of the interest in the associate.

The Groups share of profit or loss of an associate is shown on the face of the statement of

comprehensive income and represents profit or loss after tax and non-controlling interests in

the subsidiaries of the associate.

The financial statements of the associate are prepared for the same reporting period as the

Group. When necessary, adjustments are made to bring the accounting policies in line with

those of the Group.

After application of the equity method, the Group determines whether it is necessary torecognise an impairment loss on its investment in its associate. At each reporting date, the

Group determines whether there is objective evidence that the investment in the associate is

impaired. If there is such evidence, the Group calculates the amount of impairment as the


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10

difference between the recoverable amount of the associate and its carrying value, then

recognises the loss as Share of losses of an associate in the statement of comprehensiveincome.

Upon loss of significant influence over the associate, the Group measures and recognises any

retained investment at its fair value. Any difference between the carrying amount of the

associate upon loss of significant influence and the fair value of the retained investment and

proceeds from disposal is recognised in profit or loss.

3) SEGMENT INFORMATION

Operating segments

The accounting policies used by the Group in reporting segments internally are the same asthose contained in note 2 to the accounts. The ILH Group has identified its operating segments

based on the internal management reporting that is used by the executive management team

(the chief operating decision maker) in assessing performance and allocating resources.

ILH Group Limitedsoperating segments have been identified based on how the financial and

operating results of the Group are monitored and presented internally to the executive

management team. The reportable segments are based on aggregated operating segments

determined by the similarity of the products sold and the services provided, as these are the

sources of the Groups major risks and have the most effect on the rates of return.

Argyle Lawyers, Civic Legal, Signet Lawyers, Talbot Olivier and ILH Group Head Office Division are

operating segments within the legal services sector in the Australian market and have been

aggregated to one reportable segment given the similarity of the services provided, method in

which services are delivered, types of customers and regulatory environment.

As the Group is aggregated into one reportable segment, there are no inter-segment

transactions.


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11

4) OTHER REVENUE

Consolidated

Half-year

ended

31 Dec 2012

Consolidated

Half-year

ended

31 Dec 2011

$ $

Sundry income 55,514 28,604

5) CASH AND CASH EQUIVALENTS

Consolidated

At31 Dec 2012

Consolidated

At30 Jun 2012

$ $

Cash at bank and in hand 1,526,268 1,312,035

Consolidated

Half-year

ended

31 Dec 2012

Consolidated

Half-year

ended

31 Dec 2011

$ $

Reconciliation to statement of cash flows

For the purposes of the statement of cash flows, cash and cash

equivalents comprise the following at 31 December:

Cash at bank and in hand 1,522,518 1,087,538

Short-term deposits 3,750 4,195

Bank overdrafts (109,916) (142,510)

1,416,352 949,223

6) TRADE AND OTHER RECEIVABLES

ConsolidatedAt

31 Dec 2012

ConsolidatedAt

30 Jun 2012

CURRENT $ $

Trade receivables 9,304,178 10,293,039

Allowance for doubtful debts(a)

(492,021) (482,079)

8,812,157 9,810,960

Unbilled client disbursements (64,901) 16,357

Prepayments 729,919 882,464

Other receivables 80,747 79,679

9,557,922 10,789,460


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12

a) Allowance for doubtful debts

Trade receivables are non-interest bearing and are generally on 30-60 day terms. An allowance

for doubtful debts is recognised when there is objective evidence that an individual trade

receivable is impaired. Cumulative bad and doubtful debts of $182,514 (30 June 2012: $431,034

and 31 December 2011: $49,032) have been recognised by the Group as at 31 December 2012

which includes bad debts expense recognised of $172,572 (30 June 2012: $368,651 and 31

December 2011: $149,786). These amounts have been included in other expenses.

Movements in the allowance for doubtful debts were as follows:

Consolidated

At

31 Dec 2012

Consolidated

At

30 Jun 2012

$ $

Opening balance at the beginning of the period 482,079 419,696

Charge for the period 9,942 62,383

Closing balance at the end of the period 492,021 482,079

7) GOODWILL

Consolidated

At31 Dec 2012

Consolidated

At30 Jun 2012

Consolidated

At31 Dec 2011

$ $ $

Opening balance 14,590,139 12,900,557 12,900,557

Acquisition of subsidiary - 1,689,582 1,689,582

Closing balance 14,590,139 14,590,139 14,590,139

a) Description of the Groups goodwill

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

accumulated impairment losses. Goodwill is not amortised but is subject to impairment testingon an annual basis or whenever there is an indication of impairment.


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13

8) INTANGIBLE ASSETS

a) Reconciliation of carrying amounts at the beginning and end of the period

Consolidated

At

31 Dec 2012

Consolidated

At

30 Jun 2012

Consolidated

At

31 Dec 2011

$ $ $

Opening balance

(net of accumulated amortisation) 167,540 29,700 29,700

Capitalisation of IT development costs 338,500 167,540 -

Amortisation (55,314) (29,700) (17,820)

Closing balance

(net of accumulated amortisation) 450,726 167,540 11,880

Consolidated

At

31 Dec 2012

Consolidated

At

30 Jun 2012

Consolidated

At

31 Dec 2011

$ $ $

Cost (gross carrying amount) 506,040 330,794 163,254

Accumulated amortisation (55,314) (163,254) (151,374)

Net carrying amount at the end of the period 450,726 167,540 11,880

b) Description of the Groups identified intangible assets

Intangible assets represent the costs associated with IT development for Law Central in the 2012

financial year.

The asset relating to the capitalisation of IT development costs (including website, IT platform

and document development) will commence amortisation over its useful life as it becomes

available for use. This intangible asset was first amortised during the period ended 31 December

2012. The intangible asset has been assessed as having a finite life and is amortised using the

straight line method over three years. The amortisation has been recognised in the statement ofcomprehensive income in the line item depreciation and amortisation expense.


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15

11)ISSUED CAPITAL

a) Ordinary shares

Consolidated

31 Dec 2012Consolidated

30 Jun 2012Consolidated

31 Dec 2012Consolidated

30 Jun 2012

Shares Shares $ $

Fully paid shares 108,304,112 100,543,515 34,553,822 33,800,242

Partly paid shares(1) 1,863,500 1,491,000 145,229 129,589

Forfeited shares held in trust(2) - (300,000) - (12,449)

110,167,612 101,734,515 34,699,051 33,917,382

(1) Shares issued under the Deferred Employee Share Plan that vest over three years (note 16).

(2) Shares issued but forfeited under the Deferred Employee Share Plan, held in trust (note 16).

b) Movements in ordinary share capital

CONSOLIDATED Shares $

Opening balance as at 1 July 2012 101,734,515 33,917,382

Issue of shares at 9.5 cents per share to vendors of Rockwell

Bates for a 25% interest in the business on 2 July 2012 3,152,958 299,531

Issue of shares at 9.5 cents per share to vendors of Rockwell

Bates for a further 24% interest in the business on 1 November

2012 3,026,842 287,550

Issue of shares under the Deferred Employee Share Plan

(refer note 16) 372,500 28,089

Issue of shares under the Dividend Reinvestment Plan 1,880,797 176,803

Costs associated with issuing shares - (14,720)

Income tax on items taken directly to or transferred from equity - 4,416

Balance as at 31 December 2012 110,167,612 34,699,051

CONSOLIDATED Shares $

Opening balance as at 1 July 2011 97,164,328 33,397,152

Issue of shares under the Deferred Employee Share Plan (refer

note 15) 574,783 27,956

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

in part satisfaction of consideration payable on 1 August 2011 3,043,478 350,000

Issue of shares under the Dividend Reinvestment Plan 1,251,926 137,700

Costs associated with issuing shares - (12,980)

Balance as at 31 December 2011 102,034,515 33,899,828


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16

12)RESERVES

At

31 Dec 2012

At

30 Jun 2012

$ $

Accumulated losses on available-for-sale financial assets(a)

(784) (1,223)

General reserve(b) 2,110,365 2,513,879

2,109,581 2,512,656

a) Net unrealised losses reserve

This reserve records movements in the fair value of available-for-sale financial assets.

b) General reserve

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

establishment of a General Reserve.

During the period, no transfers were made to the General Reserve from Accumulated Losses (31

December 2011: nil). Trading profits of $414,362 (31 December 2011: $970,123) were

recognised in the General Reserve and $817,876 (31 December 2011: $586,435) dividends paid.

13)CONTINGENT LIABILITIES AND CONTINGENT ASSETS

Other than the deferred consideration arrangement in relation to the investment in Rockwell Bates

Pty Ltd (refer note 15), there are no contingent liabilities or assets as at 31 December 2012.

14)INTERIM DIVIDEND

Amount per Share 0.20 cents

Amount franked Fully franked at 30% tax rate

Record date to determine entitlements to the dividend 12 April 2013

Date the interim dividend is payable 3 May 2013

a) Dividend Reinvestment Plan

The Company operates a dividend reinvestment plan (DRP) which offers eligible shareholders the

opportunity to reinvest all or part of their dividends in additional shares in the Group.

The shares are issued at a price derived by applying a 5% discount to the volume weighted average

market price of shares (on an ex-dividend basis) during the five trading days immediately preceding

and inclusive of the record date.

The last date for receipt of an election notice for participation in the DRP with respect to the above

interim dividend is 26 April 2013.


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17

15)INVESTMENT IN AN ASSOCIATE

Investment in Rockwell Bates Pty Ltd

On 2 July 2012 the Company entered into a Share Purchase Agreement to acquire a 25% interest in

the Melbourne based legal practice of Rockwell Bates.

Under that agreement, the investment would be increased to 49% over the next two years.

On 1 November 2012, the planned increased investment was accelerated with the acquisition of an

additional 24% interest in the business.

The consideration for the initial transaction was a combination of the issue of 3.15m shares at 9.5cents per share and cash. The consideration for the subsequent transaction was a combination of

the issue of 3.03m shares at 9.5 cents per share and cash.

Deferred consideration is payable at each of 1 July 2013 and 1 July 2014 subject to the Rockwell

Bates business achieving agreed performance hurdles linked to net profit before tax results achieved

by the associate in each financial year. The fair value of the deferred consideration payable is

$371,898 as at 31 December 2012 based on management expectations.

The acquisition is structured with the usual ILH employment restraints and conditions, consistent

with the Companys disciplined acquisition model and strict criteria.

The Directors of ILH Group Limited consider Rockwell Bates to be a quality business with strong

growth prospects and will provide ILH Group Limited with a platform for further growth, in particular

strengthening the organisations corporate and commercial law services offering, and providing new

access to industries and clients in the Australian and Asian markets.

The carrying value of the investment as at 31 December 2012 is $2,814,675 and includes the Groups

share of the associates after tax profit for the period of $94,452(25% investment 2 July 2012 to 31

October 2012, then 49% investment 1 November 2012 to 31 December 2012).


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16)SHARE-BASED PAYMENTS

a) Recognised share based payments expense

The expense recognised for employee services received during the half-year is shown in the

table below:

Consolidated

31 Dec 2012

Consolidated

31 Dec 2011

$ $

Expense arising from equity-settled share based

transactions 28,089 27,956

b) Types of share based payment plans

Tax exempt employee share plan (TEESP)

All employees are eligible to participate in the TEESP if they meet the following criteria:

i. They have an adjusted taxable income of less than $180,000 per annum;

ii. They are a permanent full-time or permanent part-time employee of the Group;

iii. They have met the probation period under the terms of their employment contract;

iv. They are at least 18 years of age; and

v.

They are an Australian resident for tax purposes.

Employees who participate in the TEESP can nominate to contribute up to $1,000 per annum

from their pre-tax wages or salary by way of an effective salary sacrifice towards acquiring fully

paid ordinary shares in the Company.

In accordance with the rules of the TEESP, shares acquired under the plan must not be

withdrawn or otherwise dealt with, commencing from the date the employee acquires a

beneficial interest in those shares until the earliest of the date that:

i. Is three years after the acquisition date; or

ii.

The employee ceases to be an employee of the Group.

The rules of the TEESP do not contain any provisions that could result in an employee forfeiting

ownership of shares under the plan.


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16)SHARE-BASED PAYMENTS (continued)

b) Types of share based payment plans (continued)

Deferred employee share plan (DESP)

Shares are granted to key employees and directors of the Group. The DESP is designed to align

participants interests with those of shareholders by increasing the value of the Companys

shares.

Employees are eligible to participate in the DESP if they meet the following criteria:

i.

They are a permanent full-time or permanent part-time employee of the Group;ii. They have met the probation period under the terms of their employment contract;

iii. They are at least 18 years of age; and

iv. They are an Australian resident for tax purposes.

Under the DESP, senior employees are invited to receive fully paid ordinary shares in the

Company subject to the achievement of a number of key performance indicators such as

contribution to earnings per share for the Group.

Shares may either be acquired on-market by the Group or issued by the Parent. During the half-

year ended 31 December 2012, 372,500 shares (30 June 2012: 574,783 shares) were granted by

the Parent with the cost being expensed over a vesting period of three years. The fair value ofthe shares is set at the market price of the shares on the date of grant. The impact on the profit

and loss for the half-year ended 31 December 2012 is $28,089 (31 December 2011: $27,956).

When a participant ceases employment prior to the vesting of their shares, the shares are

forfeited 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 awards will vest subject to performance over this shortened period.

There are no cash settlement alternatives.


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16)SHARE-BASED PAYMENTS (continued)

c) Summary of shares granted under TEESP and DESP arrangements

No shares were granted under the TEESP during the half-year ended 31 December 2012.

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

period under the TEESP and the DESP:

Consolidated

31 Dec 2012

Consolidated

31 Dec 2011

No. No.

TEESP:Opening balance at 1 July 252,672 252,672

Transferred to departed employees during the period(1) - -

Closing balance as at 31 December 252,672 252,672

DESP:

Opening balance at 1 July 1,491,000 1,256,217

Granted during the period 372,500 574,783

Closing balance as at 31 December 1,863,500 1,831,000

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

d) Weighted average remaining vesting period

The weighted average remaining vesting period as at 31 December 2012 for the shares issued

under the DESP is 1.15 years (30 June 2012: 1.20 years).

e) Weighted average fair value

As at 31 December 2012, the weighted average fair value of shares granted under the DESP was

12.0 cents (30 June 2012: 11.8 cents).

17)SUBSEQUENT EVENTS

Other than the declaration of an interim dividend, as discussed in note 14, there were no events

occurring subsequent to balance date that have, or will have, a significant effect on the Group.


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Directors Declaration

In accordance with a resolution of the Directors of ILH Group Limited, I state that:

In the opinion of the directors:

a. The financial statements and notes of the consolidated entity are in accordance with the

Corporations Act 2001, including:

i. Giving a true and fair view of the consolidated entitys financial position as at 31

December 2012 and the performance for the half-year ended on that date of the

consolidated entity

ii.

Complying with Accounting Standard AASB 134 Interim Financial Reportingandthe Corporations Regulations 2001

b. There are reasonable grounds to believe that the company will be able to pay its debts

as and when they become due and payable.

On behalf of the Board

G Fowler

Director

Perth, 27 February 2013


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Liability limited by a scheme approved

under Professional Standards LegislationTD-PB-ILH-016

Auditor's Independence Declaration to the Directors of ILH Group Limited

In relation to our review of the financial report of ILH Group Limited for the half-year ended 31 December

2012, to the best of my knowledge and belief, there have been no contraventions of the auditor

independence requirements of the Corporations Act 2001or any applicable code of professional conduct.

Ernst & Young

T G Dachs

Partner

Perth

27 February 2013


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Liability limited by a scheme approved

under Professional Standards LegislationTD-PB-ILH-015

To the members of ILH Group Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of ILH Group Limited, which comprises the

statement of financial position as at 31 December 2012, the statement of comprehensive income,

statement of changes in equityand statement of cash flows for the half-yearended on that date, notes

comprising a summary of significant accounting policies and other explanatory information, and the

directors declaration of the consolidated entity comprising the company and the entities it controlled at

the half-year end or from time to time during the half-year.

Directors Responsibility for the Half-Year 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

2001and for such internal controls as 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-yearfinancial report based on our review. We

conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review

of a Financial Report Performed by the Independent Auditor of the Entity, in order to 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 2001including: giving a true and fair view

of the consolidated entitys financial position as at 31 December 2012 and its performance for the half-yearended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting

and the Corporations Regulations 2001. As the auditor of ILH Group 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.


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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe

that the half-year financial report of ILH Group Limited is not in accordance with the Corporations Act

2001, including:

a) giving a true and fair view of the consolidated entitys financial position as at 31 December 2012 and

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

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

Regulations 2001.

Ernst & Young

T G Dachs

Partner

Perth

27 February 2013

174.ASX IAW Feb 27 2013 17.36 Half Yearly Report and Accounts

Documents

Transcript of 174.ASX IAW Feb 27 2013 17.36 Half Yearly Report and Accounts