IRESS LIMITED - Annual Report 2011

22 February 2012

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The Manager Company Announcements Office Australian Stock Exchange Exchange Centre 20 Bridge Street SYDNEY NSW 2000

ELECTRONIC LODGEMENT

Dear Sir or Madam

IRESS 2011 Financial Results Report

Please find attached a results report relating to the company’s full year financial results for the financial year ending 31 December 2011.

Yours sincerely,

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Peter Ferguson Company Secretary

IRESS Market Technology Ltd A.B.N. 47 060 313 359

Corporate Office: Level 18, 385 Bourke Street Melbourne Vic Australia Tel: (03) 9018 5800 Fax (03) 9018 5844

Sydney Office: Suite 4, 14 Martin Place Sydney NSW Australia Tel: (02) 8273 7000 Fax: (02) 8273 7003

www.iress.com.au

IRESS

2011 FINANCIAL REPORT

IRESS FINANCIAL REPORT

BOARD OF DIRECTORS

P Dunai – Chairman A Walsh – Managing Director B Burdett J Seabrook J Cameron J Hayes

COMPANY SECRETARY

S Bland P Ferguson

REGISTERED OFFICE

Level 18, 385 Bourke Street Melbourne Vic 3000 Phone: (03) 9018 5800 Fax: (03) 9018 5844

DIRECTORS’ REPORT	2
AUDITOR’S INDEPENDENCE DECLARATION	26
CORPORATE GOVERNANCE STATEMENT	27
INDEPENDENT AUDITOR’S REPORT	38
DIRECTORS’ DECLARATION	40
STATEMENT OF COMPREHENSIVE INCOME	41
STATEMENT OF FINANCIAL POSITION	42
STATEMENT OF CHANGES IN EQUITY	43
STATEMENT OF CASH FLOWS	44
NOTES TO THE FINANCIAL STATEMENTS	45
SHAREHOLDER INFORMATION	102

SHARE REGISTRY

Link Market Services Limited Level 4, 333 Collins Street Melbourne Vic 3000

BANKERS

National Australia Bank Limited

AUDITORS

Deloitte Touche Tohmatsu

SOLICITORS

Mallesons Stephen Jaques

STOCK EXCHANGE LISTING

IRESS Market Technology Limited shares are quoted on the Australian Stock Exchange under the code IRE.

THE ANNUAL GENERAL MEETING

The Annual General Meeting of the Shareholders of IRESS Market Technology Limited will be held in the Board Room at Level 18, 385 Bourke Street, Melbourne 3000 on Thursday, 3 May 2012 at 11.30 a.m.

For full details and Proxy Form please refer to the separate document enclosed.

DIRECTORS’ REPORT

The Directors of IRESS Market Technology Limited submit herewith the annual financial report for the financial year ended 31 December 2011. In order to comply with the provisions of the Corporations Act 2001, the Directors report as follows.

BOARD OF DIRECTORS

NAME	PARTICULARS
Mr P Dunai	Chairman since May 2010, member of the Nomination and Remuneration Committee. Served as
	Managing Director of the Company from inception until retiring from that role in October 2009. A
	founding shareholder who joined the Board in 1993. He was Chairman of Nomination and
	Remuneration Committee until 5 May 2011.
Mr A Walsh	Managing Director. Founded XPLAN Technology Pty Ltd which was acquired in 2003 by the
	Company, and from 2003 managed the transition of XPLAN from an independent start-up
	organisation to a fully integrated material division of the Group until taking up his current role. He
	joined the Board in October 2009.
Mr J Killen (OAM)	Non–executive director, Chairman of the Audit Committee for part of the year. Joined the Board
	in 2000 and was Chairman of the Audit Committee from appointment through to his retirement
	from the Board on 5 May 2011.
Mr B Burdett	Non–executive director, member of the Audit Committee, joined the Board in 2006 and is also
	Chairman of Neurosciences Victoria Ltd, and a director of Investment Technology Group Inc, a
	New York Stock Exchange listed company.
Ms J Seabrook	Non–executive director, Lead Independent Director since May 2010, Chair of the Nomination and
	Remuneration Committee since 5 May 2011, and a member of the Audit Committee. She joined
	the Board in August 2008 and is also a special advisor to Gresham Partners Limited, a non-
	executive director of Iluka Resources Limited, Bank of Western Australia Ltd, Amcor Limited and
	the Export Finance and Insurance Corporation. She is also a member of the Federal
	Government's Takeovers Panel and ASIC’s external advisory group.
Mr J Cameron	Non-executive director, member of the Nomination and Remuneration Committee since 5 May
	2011, and member of the Audit Committee until 5 May 2011. He joined the Board in March 2010
	and is also a director of FIX Protocol Limited.
Mr J Hayes	Non–executive director, Chairman of the Audit Committee. Joined the Board on 10 June 2011,
	assuming Chair of the Audit Committee from this date. He is also a member of the Advisory
	Council of Comcover, a Federal Government Entity.

The above named Directors held office during and since the end of the financial year except for:

Mr J Killen (OAM) who retired from the board on 5 May 2011; and
Mr J Hayes who joined the board on 10 June 2011.

COMPANY SECRETARY

NAME	PARTICULARS
Mr S Bland	Chief Financial Officer and Company Secretary, joined the Company in 2001 and has
	held his current position since then. He is a nominee director for all wholly owned
	subsidiaries.
Mr P Ferguson	Group General Counsel and Company Secretary, joined the Company in June 2011.
	Since his appointment, he has assumed primary responsibility for Company Secretarial
	matters.

IRESS Market Technology Limited

DIRECTORS’ REPORT

PRINCIPAL ACTIVITIES

During the course of the year, the consolidated entity’s activities consisted of the provision of information, trading, compliance, order management, portfolio and financial planning systems and related tools. The principal clients comprise Australian, New Zealand, Canadian and South African domestic equity participants, and wealth management professionals in Australia, New Zealand and South Africa. In addition, the consolidated entity has emerging operations in Asia and recently established operations in the United Kingdom.

REVIEW OF OPERATIONS

In looking at the consolidated entity’s performance during 2011, the following are important themes:

Pursuit of medium term growth opportunities:
In January 2011, the Peresys operations were acquired, establishing IRESS Financial Market activities in South Africa. In addition to being a new and profitable business segment providing good growth opportunities, it does impact year on year comparisons for the consolidated entity;
Organic growth initiatives to establish IRESS services in Asia which commenced in 2010 continued in the current year. Significant progress in trialling of services and engagement with clients continued and was broadly in line with expectations. The financial investment of seeding this longer term opportunity continued in the current year and remains an important avenue for future growth; and
In a similar manner to our organic initiative in Asia, in November 2011 wealth management operations were commenced in the United Kingdom supported through securing a seed client arrangement with the largest retail distributor in the United Kingdom.
Economic Conditions:
In the broad 2011 was a tough year for the financial services sector, which generally translated into softer demand for new services, and some cancellations;
Despite this, opportunity and demand for our leading solutions in segments remained, most noticeably in expanded requirement for retail wealth management technology and services;
Failures by Minc Financial and MF Global impacted on the current year through lost recurring revenue as well as sizeable bad debts; and
Demand for skilled staff relevant to our business activities continues to remain high.
Conversion of off-shore results to Australian Dollars:
Group consolidated results for the year are impacted by appreciation of the Australian dollar, most noticeably in conversion of the results from our South African operations given the 22% decline in the South African Rand.

IRESS’ recurring subscription model continues to drive results and outlook.

During the year, the profitability of the consolidated entity was impacted by:

Australia & New Zealand Financial Markets - Revenue $108.9m. (2010: $104.5m) up 4.2%; segment profits $56.3m (2010: $58.9m) down 4.4%. Revenue growth was strongly associated with project deliveries in the commencing and final periods of the second half, driven by client preparation for multiple trading venues late in 2011. While revenue for our leading range of multi-markets products and services commenced once venue competition opened in October, its positive effect was impacted through the loss of MF Global and increased cancellations. While headcount did increase during 2011 (mainly in H2’2011), it was also impacted by the full year impact of the headcount increases late in H2’2010 which was largely to support project work associated with the move to multimarkets. The collapses of Minc Financial and MF Global resulted in a $0.519m bad debt expense. The combined impact of these resulted in a margin decline from 56.3% to 51.7%.
Canadian Financial Markets – Revenue $24.0m. (2010: $23.5m) up 2.0% (10.9% in CAD); segment profits $8.2m (2010: $7.8m) up 4.5% (13.5% in CAD). The segment produced good revenue growth in line with project completions, although its impact was somewhat lessened due to broader economic factors. Modest improvements in contribution from news, data and communication services combined with moderated growth in the operating cost base saw margins in CAD improve from 33.5% to 34.2%.

DIRECTORS’ REPORT

South African Financial Markets – Revenue $15.3m (ZAR 114.2m) (2010: nil); segment profits $5.5m (ZAR 41.8m) (2010: nil). The underlying entity making up this segment (Peresys (Pty) Ltd) was acquired with effect from 20 January 2011. This business has high levels of recurring revenues, some of which are linked to volume usage. Due to reduced trading volumes as experienced globally, this component of their revenues was negatively impacted. Revenue growth in H2’11 was up 20.4% in ZAR, supported in part from the part period in January missing from H1, a price increase in April as well as growth in subscription revenues. Cost growth associated with post acquisition changes, and some initiatives to support future growth resulted in H2 margins staying largely unchanged for H2’11 at 36.6% in ZAR.
Asian Financial Markets – Revenue $1.1m. (2010: $0.6m); segment loss $(1.5)m (2010: $(0.6)m). The segments results were impacted through the loss of MF Global in the second half, reducing revenues from a major client to the division as well as a bad debt of $0.262m.
Australia & New Zealand Wealth Management– Revenue $49.1m. (2010: $43.8m) up 12.2%; segment profits $20.3m (2010: $18.6m) up 8.7%. The business has continued to perform well, with revenues driven by transitional rollouts as well as solid organic growth across the broader client base. Demand for services continues to be driven by the efficiencies available through the suite of technology offerings. Growth in headcount to support the large number of migrations saw margins decline marginally from 42.6% to 41.3%.
South African Wealth Management – Revenue $6.0m. (2010: $7.1m) down 15.3% (6.3% in ZAR); segment profits $1.7m (2010: $2.5m) down 31.6% (23.9% in ZAR). The known loss of two clients (as announced with last year’s results) produced a financial outcome inconsistent with the level of activity and work performed on XPLAN rollouts and responding to client requirements and opportunities. With modest cost increases, margins decreased from 35.0% to 28.4%.
Asian Wealth Management – Revenue $0.2m (2010: $0.3m) down $0.1m and segment loss $(1.3)m (2010: loss $(1.1)m). The business continues to make progress in engaging clients and establishing solutions with seed clients across the broad spectrum of wealth management services in these markets. The cost base remained substantially unchanged from 2010.
United Kingdom Wealth Management – This operation was established in November 2011, and generated no revenue in the period, and a segment loss of $(0.1)m.

The reported net profit after tax was $41.3m, an 18.1% decrease on reported profits for the same period last year. Impacting on comparability of results for 2011 and 2010 are:

a primary factor in increased operating expenses in 2011 on 2010 was the 28.7% increase in group headcount across the year. In addition to the 93 staff introduced into the group through the acquisition of Peresys, headcount was increased in both financial markets and wealth management A&NZ to support client lead initiatives (approximately a further 35 staff), the other area of growth was staffing for financial market activities in Asia. Also very late in 2011 there were some new staff associated with setting up wealth management operations in the UK. Further 2011 wages and other related costs reflected the full year impact for the 58 additional staff added during 2010;
the increase in total direct staff costs before share based payments at 27.1% was in line with the movement in headcount. Short term incentives increased very slightly as a percentage of base wages, reflecting amongst other factors the enormous effort by many associated with very major projects across the group, most notably the multimarket implementation in Australia. Share based payments, which lag headcount movements, increased by 2.8%. Overall total employee related expenses increased by $15.635m or 24.4%;
customer data fees increased by 8.5% reflecting expanded data requirement, largely associated with the commencement of our financial markets South Africa operations;
communication and technology expenses increased by $1.270m or 13.6% reflecting in part expansion and upgrade to our networks, including in Asia and South Africa;
primarily as a direct result of the increased headcount, and the introduction of Peresys into the group results, facility related expenses increased by 28.1%. Office relocations in Brisbane, Perth and Singapore were also a factor;
during 2011 the group experienced two large bad debts (Minc Financial and MF Global) which together with an increase in the doubtful debts provision at Peresys, resulted in a net bad debt expense for the year of $0.882m. Until this year, bad debts of this magnitude were unprecedented for the consolidated entity. In 2010, given our negligible claims history, there was a write back in the bad debt provision which resulted in a credit of $0.722m in the Income Statement. In 2011 the bad debt expense was $0.882m, which represents a net movement year on year of $1.604m;

IRESS Market Technology Limited

DIRECTORS’ REPORT

depreciation and amortisation increased by $7.489m (49.6%) primarily due to recognition of new assets associated with the purchase of assets from Peresys and the subsequent purchase of Peresys, which collectively gave rise to assets such as computer software and referred to in management presentations as Strategic Charges;
net interest income decreased by $1.862m primarily from decreased average cash holdings during the year. In addition interest expense flowing from deferred consideration associated with the Peresys vendor earnout, resulted in a non-cash interest expense being recognised;
as previously flagged the effective income tax rate increased back to longer term levels at 31.3% from 25.6% in 2010. The change arose from concluding the previously observed overlap on tax deductions arising from the transition of share grants from performance rights to deferred shares; and
the collective impact of these changes was a decrease in basic EPS from 40.335 cents per share to 32.644 cents per share, a decrease of 19.1%.

CHANGES IN OPERATIONS DURING THE YEAR

During the course of the year, the operations of the consolidated entity were modified by the following changes:

Establishment of Financial Market operations in South Africa

Effective from 20 January 2011, IRESS Market Technology Limited (‘IRESS’) acquired Peresys (Pty) Ltd (‘Peresys’) and its subsidiaries. Shortly prior to this in a separate transaction, IRESS acquired all the computer software and registered intellectual property rights of Peresys (collectively the ‘transaction’).

Peresys is a South African based technology solutions provider to the financial markets, specialising in building and running FIX enabled connected trading communities across all asset classes, including equities, fixed interest and derivatives.

Peresys was acquired for an expected ZAR 375m (approximately AUD 56.1m). The transaction included an upfront cash payment of ZAR 340.5m (approximately AUD 51.0m) and performance based payments based around the growth of the business of up to ZAR 24.2m (approximately AUD 3.6m), most of which is payable at the end of three years. The total aggregate purchase price is capped at ZAR 364.7m (approximately AUD 54.6m). In addition, up to an additional ZAR 10m (approximately AUD 1.5m) is available to certain staff, with payment based on performance of the business over three years.

Establishment of Wealth Management operations in the United Kingdom

In November 2011, IRESS Market Technology Limited (‘IRESS’) announced the establishment of wealth management operations in the United Kingdom through a wholly owned UK subsidiary, IRESS Technology Limited (‘IRESS UK’). At the same time it was announced IRESS UK had been selected as the strategic supplier of wealth management advice technology to the largest distributor of retail financial advice in the UK. Supporting this new initiative the former Directors of leading financial services consultancy business were employed, after agreeing to wind down their consulting business.

As this is an organic entry into the UK, there were no upfront payments or acquisition related amounts. The arrangement with our seed client recognises their position in terms of future pricing of services, but there are no capital payment amounts involved. The arrangement with the new local management team, includes potential to participate in share grants assessed exclusively on the performance of the UK business over the medium term.

CHANGES IN STATE OF AFFAIRS

There were no other significant changes in the state of affairs of the consolidated entity other than that referred to in the financial statements or notes thereto.

DIRECTORS’ REPORT

SUBSEQUENT EVENTS

Other than as noted below, there has not been any other matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

FUTURE DEVELOPMENTS

Disclosure of information regarding likely developments in the operations of the consolidated entity in future financial years, and the expected results of those operations is likely to result in unreasonable prejudice to the consolidated entity. Accordingly, this information has not been disclosed in this report.

DIVIDENDS

In respect of the financial year ended 31 December 2010, the Directors recommended a final dividend of 24.0 cents per share franked to 66% at 30% corporate tax rate to be paid to the holders of fully paid ordinary shares on 31 March 2011. The record date to participate in the final dividend is 15 March 2011.

In addition, directors recommended a once off special unfranked dividend of 3.5 cents per share to be paid to the holders of fully paid ordinary shares on 31 March 2011.

In respect of the financial year ended 31 December 2011, an interim dividend of 14.0 cents per share franked to 90% at 30% corporate tax rate was paid to the holders of fully paid ordinary shares on 30 September 2011.

In respect of the financial year ended 31 December 2011, the Directors recommend a final dividend of 24.0 cents per share franked to 83% at 30% corporate tax rate to be paid to the holders of fully paid ordinary shares on 30 March 2012. The record date to participate in the final dividend is 16 March 2012.

DIRECTORS’ MEETINGS

The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member). During the financial year, 6 Board meetings, 5 Audit Committee meetings and 4 Nomination and Remuneration Committee meetings were held.

					NOMINATION AND	NOMINATION AND
					REMUNERATION
	BOARD OF	DIRECTORS	AUDIT COMMITTEE		COMMITTEE
	ELIGIBLE		ELIGIBLE		ELIGIBLE
DIRECTORS	TO ATTEND	ATTENDED	TO ATTEND	ATTENDED	TO ATTEND	ATTENDED
Mr P Dunai	6	6	–	–	4	4
Mr A Walsh	6	6	–	–	–	–
Mr J Killen	2	2	1	1	–	–
Mr B Burdett	6	6	5	5	–	–
Ms J Seabrook	6	6	5	5	4	4
Mr J Cameron	6	5	1	1	4	4
Mr J Hayes	4	4	4	4	–	–

IRESS Market Technology Limited

DIRECTORS’ REPORT

INDEMNIFICATION OF OFFICERS AND AUDITORS

During the year, the Company paid a premium in respect of a contract insuring each of the Directors of the Company (as named above), the Company Secretary and each of the Executive Officers of the Company and of any related body corporate against a liability or expense incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. In accordance with section 300(9) of the Corporations Act 2001 further details have not been disclosed due to confidentiality provisions in the insurance contract.

In addition, the Company has entered into a Deed of Indemnity which ensures that generally the Directors of the Company will incur no monetary loss as a result of defending actions taken against them as Directors. Certain actions are specifically excluded, for example, the incurring of penalties and fines which may be imposed in respect of breaches of the law.

The Company has not otherwise, during or since the end of the financial year, except to the extent permitted by the law, indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate against a liability incurred in their capacity as an officer or auditor.

AUDIT SERVICES

Details of amounts paid or payable to the auditor for audit services provided during the year by the auditor are outlined in Note 27 to the financial statements.

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration is included on page 26 of the full year financial statements.

ROUNDING OFF AMOUNTS

The Company is a company of the kind referred to in ASIC Class Order 98/0100, dated 10 July 1998, and in accordance with that Class Order, amounts in the Directors’ Report and the Financial Report are rounded off to the nearest thousand dollars.

AUDITED REMUNERATION REPORT

This Remuneration Report provides details of IRESS’ policy for determining the remuneration of directors and executives; the relationship between the policy and the performance of the company during the financial year; and the remuneration of board members and executives in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this report, Key Management Personnel of the group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the company and the group, directly or indirectly, including any director (whether executive or otherwise) of the parent company, and includes the five executives in the parent or the group receiving the highest remuneration.

DIRECTORS’ REPORT

RELATIONSHIP BETWEEN COMPANY PERFORMANCE AND REMUNERATION

The graph below outlines the relative share price performance of IRESS Market Technology Limited over the five years to December 2011, compared to the S&P/ASX 200 index. Over the five years the IRESS share price had decreased by 0.2% and the S&P/ASX 200 index had decreased by 28.5%. Further, during this period, IRESS has maintained its high dividend payout ratio, and the weighted average franking of dividends was 85.6%.

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160
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100
80
60
40
20
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IRESS S&P/ASX 200
Jan 07 Apr 07 Jul 07 Oct 07 Jan 08 Apr 08 Jul 08 Oct 08 Jan 09 Apr 09 Jul 09 Oct 09 Jan 10 Apr 10 Jul 10 Oct 10 Jan 11 Apr 11 Jul 11 Oct 11 Jan 12
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An analysis of company performance over the five years to December 2011 is set out in the table below.

	31
	DECEMBER	31 DECEMBER	31 DECEMBER	31 DECEMBER	31 DECEMBER
MEASURE (a)	2007	2008	2009	2010	2011
Share price	796.9¢	513.0¢	855.6¢	869.6¢	693.0¢
Change in share price	97.6¢	(283.9¢)	342.7¢	13.9¢	(176.6¢)
Change in share price (%)	14.0%	(35.6%)	66.8%	1.6%	(20.3%)
Volume weighted average
price for period	799.6¢	591.7¢	687.0¢	840.4¢	833.7¢
Basic earnings per share	21.904¢	29.622¢	34.784¢	40.335¢	32.644¢
Diluted earnings per share	21.176¢	28.795¢	34.175¢	40.016¢	32.589¢
Dividend per share (b)	26.0¢	31.0¢	34.0¢	38.0¢(c)	38.0¢
Weighted average franking
on ordinary dividends	100%	100%	100%	100%(c)	85.6%

IRESS Market Technology Limited

DIRECTORS’ REPORT

(a) The share price figures in the table for the four years ended 31 December 2010 have been adjusted to align with ASX adjustment factor arising from the special dividend paid 31 March 2011.
(b) Dividend per share calculated based on total of interim and final dividend rather than dividends actually paid in the year. The calculation excludes the impact of the 3.5¢ special dividend paid in March 2011.
(c) All dividends prior to the December 2010 final dividend were fully franked. The calculation 2010 has been adjusted to reflect value for the 3.5¢ special dividend paid in March 2011 as an increase to the franking percentage, rather than a heightened dividend per share.

As set out on pages 7 to 25 the Board has regard to a number of factors when setting the levels of fixed, short term and long term remuneration for the managing director and executives including financial performance, non-financial factors and strategic factors.

DIRECTORS AND KEY MANAGEMENT PERSONNEL DETAILS

This remuneration report includes information on the remuneration of:

the directors of IRESS Market Technology Limited, being:
Mr P Dunai (Chairman, Chairman of Nomination and Remuneration Committee until 5 May 2011);
Mr A Walsh (Managing Director)
Mr J Killen (Chairman of the Audit Committee, Non-executive Director; retired from the Board 5 May 2011);
Mr B Burdett (Non-executive Director);
Ms J Seabrook (Non-executive Director, Lead Independent Director, Chair of Nomination and Remuneration Committee since 5 May 2011);
Mr J Cameron (Non-executive Director); and
Mr J Hayes (Non-executive Director, appointed 10 June 2011, Chairman of the Audit Committee since 10 June 2011);
and other key management personnel being:
Mr S Bland (Chief Financial Officer and Company Secretary);
Mr J Davies (President & Chief Executive Officer, Financial Markets Canada);
Mr P Ferguson (Group General Counsel and Company Secretary);
Ms K Gross (General Manager, Products, Sales & Marketing); and
Mr D Walker (Chief Technical Officer).

(Collectively, the above other key management personnel represent the ‘executives’.)

DIRECTORS’ REPORT

SHARE RIGHTS

SHARE RIGHTS GRANTED TO, AND VESTING IN, DIRECTORS AND EXECUTIVES

The following table sets out the share rights issued by the company to directors during the year, as well as the share rights which vested during the year to directors or a related body corporate of a director.

No share rights have been issued to directors or executives since the end of the year. No share rights granted to directors or executives have been cancelled during the year or since the end of the year. No rights that were granted in the year ended 2011 vested in 2011.

		SHARE RIGHTS GRANTED	SHARE RIGHTS VESTED
DIRECTORS	NOTE	DURING THE YEAR	DURING THE YEAR
Mr P Dunai	(a)	–	200,000
Mr A Walsh	(a)	300,000	56,000
	(b)	30,000	25,000

(a) Governed by the rules of the Employee Performance Rights Plan.

(b) Governed by the rules of the Employee Deferred Share Plan.

During the year, the following share rights were issued to executives and staff and the following share rights vested to executives or a related body corporate of theirs.

		DEFERRED
	PERFORMANCE	SHARES/DEFERRED SHARE
	RIGHTS GRANTED	RIGHTS GRANTED DURING	SHARE RIGHTS VESTED
EXECUTIVES	DURING THE YEAR (a)	THE YEAR (b)	DURING THE YEAR (c)
Mr S Bland	31,040	10,290	59,000
Mr J Davies (d)	15,430	10,010	33,000
Mr P Ferguson	–	–	–
Ms K Gross	28,520	10,070	44,500
Mr D Walker	32,710	10,290	54,000

(a) Governed by the rules of the Employee Performance Rights Plan.

(b) Governed by the rules of the Employee Deferred Share Plan and the Employee Deferred Share Rights Plan.

(d) Vested share rights may be unexercised.

The number of share rights which subsequently vest is dependent on a number of variables including the performance of the company. In accordance with the applicable share plan rules and where they were eligible to vest, all performance rights eligible for vesting in May 2011 and August 2011, issued in May 2008 and August 2008 respectively, vested.

Further details of the above performance rights, deferred shares and deferred share rights are set out in Notes 36 to 38 of the financial statements.

IRESS Market Technology Limited

DIRECTORS’ REPORT

SHARE RIGHTS EXERCISED BY DIRECTORS AND EXECUTIVES

During the financial year, the following vested share rights were exercised by the nominated person(s) and converted into ordinary shares in IRESS Market Technology Limited. With the exception of Mr Davies, no vested shares for directors or executives remain unexercised at 31 December 2011.

PERFORMANCE RIGHTS EXERCISED DURING	PERFORMANCE RIGHTS EXERCISED DURING	DEFERRED
		SHARES/DEFERRED SHARE	AGGREGATE
		RIGHTS EXERCISED	AMOUNT PAID
	THE YEAR (a)	DURING THE YEAR (b)	$
DIRECTORS Mr P Dunai 200,000 – 1 Mr A Walsh 56,000 25,000 1 EXECUTIVES Mr S Bland 46,000 13,000 1 Mr J Davies – – – Mr P Ferguson – – – Ms K Gross 33,000 11,500 1 Mr D Walker 42,000 12,000 1

(a) Governed by the Employee Performance Rights Plan. The exercise price was $1 in total for each series of performance rights exercised.

(b) Governed by the Employee Deferred Share Plan or the Employee Deferred Share Rights Plan as applicable.

Further details on the Employee Performance Rights Plan, the Employee Deferred Share Plan and the Employee Deferred Share Rights Plan are set out in Notes 36, 37 and 38 respectively.

DIRECTOR AND EXECUTIVE SHAREHOLDINGS

The following table sets out each director’s relevant interest held directly or through a related body corporate in shares, performance rights and deferred share rights of the Company at the date of this report, including where applicable, shares yet to be beneficially transferred/withdrawn by the respective director from the IRESS Employee Share Trust. There are no vested share rights which have not been exercised. Unvested performance rights and deferred shares may, subject to meeting performance hurdles, vest at some time in the future.

	FULLY PAID ORDINARY	UNVESTED PERFORMANCE	UNVESTED DEFERRED
DIRECTORS	SHARES	RIGHTS	SHARES
Mr P Dunai (a)	890,000	–	–
Mr A Walsh (a)	71,950	525,000	59,000
Mr B Burdett	100,000	–	–
Ms J Seabrook	20,000	–	–
Mr J Cameron	–	–	–
Mr J Hayes	4,600	–	–

(a) Some or all of these shares may still be subject to restrictions as set out in the share plan rules, and as such are currently held on trust for the respective director by the IRESS Market Technology Equity Plan Trust.

DIRECTORS’ REPORT

The following table sets out the relevant interest in shares, performance rights, deferred shares and deferred share rights of the Company for each executive held directly or through a related body corporate, at the date of this report including where applicable, shares yet to be beneficially transferred/withdrawn by the respective executive from the IRESS Employee Share Trust. There are no vested share rights which have not been exercised. Unvested performance rights and deferred shares may, subject to meeting performance hurdles, vest at some time in the future.

	FULLY PAID
	ORDINARY	UNVESTED	UNVESTED	UNVESTED
	SHARES	PERFORMANCE	DEFERRED	DEFERRED SHARE
EXECUTIVES	(a)(b)	RIGHTS	SHARES	RIGHTS
Mr S Bland	270,390	108,730	20,480	–
Mr J Davies	–	51,280	–	21,090
Mr P Ferguson	–	–	–	–
Ms K Gross	227,610	94,690	20,460	–
Mr D Walker	471,260	106,400	21,080	–

(a) Some or all of these shares may still be subject to restrictions as set out in the share plan rules, and as such are currently held on trust for the respective executive by the IRESS Market Technology Equity Plan Trust.
(b) Mr Davies holds 73,000 vested but unexercised share rights.

The balance of this remuneration report is set out under the following headings.

Policy and Structure:
Non-executive directors’ remuneration
Executive remuneration
Performance under share based incentive plans
Relationship between Company Performance and Remuneration
Specific Remuneration Details
Outline of Employment Contracts for the Managing Director and Executives

POLICY AND STRUCTURE

Non-executive directors’ remuneration

The company’s non-executive directors receive fees (including statutory superannuation) for their services plus the reimbursement of reasonable expenses. Non-executive directors’ fees are reviewed annually and are determined by the Board having regard for fees paid to non-executive directors of comparable companies, and where considered necessary the Board seeks external advice on this subject.

The Board aims to set the aggregate remuneration at a level which provides the ability for IRESS to attract and retain highly competent directors. The aggregate remuneration level is determined from time to time by shareholders in general meeting, in accordance with the company’s Constitution. The aggregate amount is then apportioned between the directors as agreed, taking into account market comparisons, the director’s responsibilities, and the time spent by the non-executive directors on IRESS matters. Non-executive directors do not receive performance-based bonuses. Fees paid to non-executive directors during 2011 were within the maximum aggregate limit of $600,000 per annum agreed to by shareholders at the Annual General Meeting held on 5 May 2010.

IRESS Market Technology Limited

DIRECTORS’ REPORT

At the end of the year the non-executive directors’ annualised fee structure was as follows.

ROLE	CURRENT FEE $ (a)
Chairman	163,500
Chairman of Audit Committee	92,375
Chair of Nominations and Remuneration Committee / Lead Independent Director	92,375
Non-executive directors	80,000

(a) Includes statutory superannuation contributions or salary in lieu of statutory superannuation contributions by the Company.

Directors may elect to take all or part of their fees in cash or additional superannuation contributions.

The Company initiated a non-executive director equity plan in April 2008, but it has remained dormant up to 31 December 2011.

There are no other schemes for retirement benefits for non-executive directors. This is consistent with Principle 9.3 of the Australian Stock Exchange (ASX) Corporate Governance Guidelines.

EXECUTIVE REMUNERATION

Philosophy

The overall objective of the Company’s approach to executive remuneration is to have practices and policies that will enable it to attract, retain, motivate and reward executives of the calibre required to be successful in terms of delivering long term returns to shareholders. Further, the Company’s practices will be legal, ethical and consistent with being a good corporate citizen. It will comply with remuneration disclosures required by law and will seek to maintain the highest standards of clarity and transparency in communications with shareholders.

The total remuneration package should comprise a base package which is both reasonable and market competitive. A significant component of executive remuneration should be an ‘at risk’ incentive award which provides an opportunity for the executive to receive superior remuneration when superior results are delivered.

At risk incentives are based on a mix of performance criteria for each executive, including total company performance, relevant divisional or business unit performance and the achievement of personal objectives from the performance appraisal process.

The at risk incentives should provide both short term benefits (to promote continuous increases in annual performance outcomes) and long term benefits (to promote sustained delivery of long term shareholder wealth).

The Company believes that the long term interests of executives and shareholders should be aligned and that such alignment is best achieved by executives having either direct equity in the Company or instruments whose value is ultimately determined by the Company’s share price over the medium to long term.

Fixed annual remuneration

The fixed remuneration consists of cash salary (‘Base’), benefits, and fringe benefits. In situations where it is consistent with the treatment of the broader employee base, the company will gross-up the amount in relation to benefits that do not qualify as company income tax deductions. The Company makes superannuation contributions on fixed remuneration amounts.

To ensure that fixed remuneration arrangements remain competitive, the fixed remuneration component of executive remuneration is reviewed annually based on performance and market data.

Benchmarking of executive remuneration is against executive remuneration practices for executive roles having similar scope, accountability and complexity to those being reviewed. Positions may be benchmarked against:

other positions within the Company so that internal relativities are maintained; and/or
roles situated in companies listed on the Australian Stock Exchange with market capitalisations similar to that of the Company’s and/or within an industry sector in which the Company has operations.

DIRECTORS’ REPORT

Short term incentive remuneration

The Company operates a short term bonus scheme to provide competitive performance based remuneration incentives to both executives and staff. Its objectives are to:

align the interests of the executives and staff with those of shareholders;
provide participants with an opportunity to be rewarded with at risk remuneration where superior performance outcomes are achieved over the measurement period; and
reflect a strong commitment towards attracting and retaining high performing executives and staff who are committed to the ongoing success of the Company.

Performance objectives are established for all executives and structured to reflect each executive’s potential impact on and contribution to the business. The performance objectives comprise elements of total company performance and individual performance and contain measures of financial, non-financial and strategic outcomes. Achievement of performance objectives would entitle an executive to a cash bonus.

Generally, bonus arrangements are capped at a maximum of 50% of Base, however when exceptional outcomes are delivered, or where warranted by special circumstances, it can exceed this amount.

All executive bonus amounts are determined based on the recommendation of the Managing Director, having regard to actual performance against the performance objectives. These recommendations are then put to the Nomination and Remuneration Committee for approval. In the Managing Director’s case, the review and recommendation is performed by the Nomination and Remuneration Committee, with recommendations put to the Board for approval (where the Managing Director does not vote).

Under the short term remuneration arrangements outlined above, the following bonuses for executive directors and executives were accrued during the year and paid in December 2011.

	MAXIMUM
	THAT COULD BE EARNED	% ACHIEVED	% NOT ACHIEVED
	% OF BASE	% OF BASE (b)	% OF BASE
Mr A Walsh	50	43	7
Mr S Bland	50	44	6
Mr J Davies (a)	–	34	–
Mr P Ferguson	30	19	11
Ms K Gross (a)	–	44	–
Mr D Walker (a)	–	45	–

(a) While not stipulated in their employment contracts, practice has been to adopt a bonus as a percentage of base salary cap of 50% except where there are special circumstances.

(b) Based on annualised monthly salary as at 31 December 2011.

For its Australian executives the Company makes superannuation contributions on bonus payments at the statutory rate or salary payments in lieu of superannuation, which is not included in the above bonus percentages.

IRESS Market Technology Limited

DIRECTORS’ REPORT

Longer term incentive remuneration

The Company currently operates the following long term incentive plans (the details of which are set out in Notes 36 to 38 of the financial statements):

Employee Performance Rights Plan;
Employee Deferred Share Plan; and
Employee Deferred Share Rights Plan.

(collectively ‘share rights’).

The decision to make an award of share rights is made periodically by the Board (usually annually). Individual participation is based on a number of factors including the strategic significance of the role and outcomes achieved; capacity to impact on strategic outcomes in terms of special achievements or requirements; future potential and succession planning requirements; and personal performance. Hedging of unvested share rights is prohibited.

Grants of performance rights under the Employee Performance Rights Plan have been made in May each year since the plan was first introduced in 2003. Performance Rights vest, subject to meeting performance criteria (outlined below) at the end of the three years.

The Employee Deferred Share Plan was introduced in April 2008. Deferred shares vest at the end of two years (or other periods specified in the offer).

The Employee Deferred Share Rights plan was introduced in April 2008. Deferred shares vest at the end of two years (or other periods specified in the offer).

The Peter Dunai Performance Rights Plan was introduced in May 2005, with the final rights granted under this plan vesting in 2010. References to this plan are included in the 2011 Annual Report only when dealing with comparative periods. For summary details on this plan refer to Note 36 of the 2010 Annual Report.

Following the introduction of the Deferred Share Plan and the Deferred Share Rights Plan, directors have indicated that it is their intention to largely limit future grants of performance rights to the managing director and executives.

Performance criteria - Performance Rights

The peer group of companies comprises the top 200 companies listed in the ASX/S&P 200 companies after excluding mining companies and listed property trusts. A peer company must have been in the ASX/S&P 200 companies for the entire performance period (i.e. new entrants and companies dropping out of the ASX/S&P 200 companies are excluded).

The Company’s ranking within that group of companies at the end of the relevant performance period determines the number of performance rights in the particular tranche that become exercisable (if any) on the following basis.

PERFORMANCE RANKING RANGE	NUMBER OF PERFORMANCE RIGHTS EXERCISABLE.
Below 50th percentile	No rights exercisable.
50th percentile	50% of the rights in the tranche available to be exercised.
51st percentile to 74th percentile	Rights available in the tranche available to be exercised will be determined on a
	pro–rata basis between 50% and 100% depending on the Company’s
	percentile performance ranking.
75th percentile or higher	100% of rights in the tranche available to be exercised.

DIRECTORS’ REPORT

Performance under share based incentive plans

The table below summarises the various share rights granted to Mr Peter Dunai, and the performance of the Company, as measured under the applicable plans rules. There were no new grants of share rights to Mr Dunai in 2011.

GRANT DATE	19 AUGUST 2008
Number of share rights granted	200,000
Applicable plan rules	Employee Performance Rights Plan
Total share rights cancelled	–
Fair value estimate at grant date (a)	$3.69
1st performance ranking date
Date	19 August 2011
Percentile ranking	Top quartile
Vested	200,000
Total vested and exercised	200,000
Total valid outstanding	–
Percentage vested	100%

(a) The value of performance rights at grant date set out in the tables above is based on the external valuation advice from PricewaterhouseCoopers Securities Limited. The valuation has been made using a Monte Carlo simulation option pricing model using standard option pricing inputs such as the underlying stock price, exercise price, expected dividends, expected risk free rates and expected share price volatility (refer Note 35 of the financial statements) as well as adjusting for the likelihood of achieving performance hurdles.

IRESS Market Technology Limited

DIRECTORS’ REPORT

The table below summarises the various share rights granted to Mr Andrew Walsh, and the performance of the Company, as measured under the applicable plans rules.

	7 MAY	7 MAY	7 MAY	7 MAY	7 MAY	9 MAY	9 MAY	9 MAY
GRANT DATE	2008	2009	2009	2010	2010	2011	2011	2011 (d)
Number of
share rights
granted	56,000	100,000	25,000	125,000	29,000	150,000	30,000	150,000
Applicable plan
rules (a)	EPRP	EPRP	DSP	EPRP	DSP	EPRP	DSP	EPRP
Total share
rights
cancelled	–	–	–	–	–	–	–	–
Fair value
estimate at
grant date (b)	$3.85	$3.90	$6.52	$5.68	$8.34	$5.87	$9.23	$5.79
Performance
ranking date
	7 May	7 May	9 May	7 May	7 May	7 May	7 May	7 May
Date	2011	2012	2011	2013	2012	2015	2013	2015
Percentile	Top		Top
ranking	quartile	–	quartile	–	–	–	–	–
Vested	56,000	–	25,000	–	–	–	–	–
Total vested
and exercised	56,000	–	25,000	–	–	–	–	–
Total valid
outstanding (c)	–	100,000	–	125,000	29,000	150,000	30,000	150,000
Percentage
vested	100%	–	100%	–	–	–	–	–

(a) EPRP denotes Employee Performance Rights Plan, DSP denotes Deferred Share Plan.

(b) Refer Note (a) on page 16.

(c) The quantum of performance rights ultimately vesting in the Managing Director is a function of the performance of the Company relative to its peer group.

(d) This series of performance rights has a three year measurement period commencing 7 May 2012.

DIRECTORS’ REPORT

The table below summarises the various performance rights granted to executives and staff, and the performance of the Company, as measured under the applicable plans rules.

GRANT DATE	7 MAY 2008	7 MAY 2009	7 MAY 2010	9 MAY 2011
Performance rights granted	235,000	199,000	252,650	267,640
Number of participants at grant date	7	6	13	13
Number of current participants	7	6	13	13
Total performance rights cancelled	–	–	–	–
Fair value estimate at grant date (a)	$3.85	$3.90	$5.68	$5.96
Performance ranking date	7 May 2011	7 May 2012	7 May 2013	7 May 2014
Ranking	Top quartile	–	–	–
Vested	235,000	–	–	–
Total vested and exercised	215,000	–	–	–
Total vested and not exercised	20,000	–	–	–
Total valid outstanding (b)	–	199,000	252,650	267,640
Percentage vested	100%	–	–	–

(a) Refer to note (a) on page 19.

(b) The quantum of performance rights ultimately vesting in executives and staff is a function of the performance of the Company relative to its peer group.

The table below summarises the various deferred shares granted to executives and staff and deferred share rights granted to staff.

RIGHT GRANTED	DEFERRED SHARES	DEFERRED SHARES	DEFERRED SHARES	DEFERRED SHARE	DEFERRED SHARE	RIGHTS
Grant date	7 May 2009	7 May 2010	7 May 2011	7 May 2009 7 May 2010		7 May	2011
Number granted	553,720	540,230	554,000	94,320	71,280	70,750
Number of participants at
grant date	168	220	244	18	17		20
Current number of participants	–	199	239	–	17		19
Total share rights cancelled	26,852	26,240	7,840	1,000	–		940
Fair value at grant date	$6.52	$8.34	$9.23	$6.00	$7.67		$8.49
Performance ranking date	9 May 2011	7 May 2012	7 May 2013	9 May 2011 7 May 2012		7 May	2013
Vested	526,868	1,980	–	93,320	–		–
Total vested and exercised	526,868	1,980	–	26,100	–		–
Total vested and not
exercised	–	–	–	67,220	–		–
Total valid outstanding	–	512,010	546,160	–	71,280	69,810
Percentage vested	100%	–	–	100%	–		–

IRESS Market Technology Limited

DIRECTORS’ REPORT

SPECIFIC REMUNERATION DETAILS

The following table discloses the remuneration of the Directors of the Company for the year ended 31 December 2011.

				POST	SHARE
	SHORT	TERM EMPLOYMENT		EMPLOYMENT	BASED
		BENEFITS		(a)	PAYMENTS
					EQUITY
					SETTLED
	SALARY &		NON-	SUPERANNUATI	SHARE
	FEES	BONUS	MONETARY	ON	RIGHTS	TOTAL
	$	$	$	$	$ (b)	$
EXECUTIVE DIRECTOR
Mr A Walsh	782,500	350,000	–	25,000	913,010	2,070,510
NON-EXECUTIVE DIRECTORS
Mr P Dunai	150,000	–	–	13,500	155,688	319,188
Mr J Killen (c)	35,312	–	–	3,178	–	38,490
Mr B Burdett	73,394	–	–	6,606	–	80,000
Ms J Seabrook	84,748	–	–	7,627	–	92,375
Mr J Cameron	73,394	–	–	6,606	–	80,000
Mr J Hayes (d)	47,263	–	–	4,254	–	51,517

(a) There were no other short term employee benefits, other pension or post employment benefits, other long term employee benefits, termination benefits or other share based payments paid to directors during the year.

(b) This expense is a function of both the value and duration of the instruments granted. The expense recognised in 2011 represents a combination of share grants made in 2011 and prior years.

(d) Appointed 10 June 2011.

DIRECTORS’ REPORT

The following table discloses the remuneration of the Directors of the Company for the year ended 31 December 2010.

	SHORT	TERM EMPLOYMENT	TERM EMPLOYMENT	POST	SHARE BASED
		BENEFITS		EMPLOYMENT (a)	PAYMENTS
					EQUITY
			NON-		SETTLED
	SALARY &		MONETAR	SUPERANNUATIO	SHARE
	FEES	BONUS	Y	N	RIGHTS	TOTAL
	$	$	$	$	$ (b)	$
EXECUTIVE DIRECTOR
Mr A Walsh	681,250	350,000	–	25,000	569,311	1,625,561
NON-EXECUTIVE DIRECTORS
Mr N Hamilton (c)	46,816	–	–	4,213	–	51,029
Mr P Dunai (d)	179,422	–	471	6,750	499,159	685,802
Mr J Killen	78,375	–	–	7,054	–	85,429
Mr B Burdett	67,875	–	–	6,109	–	73,984
Ms J Seabrook	74,767	–	–	6,729	–	81,496
Mr J Cameron (e)	54,300	–	–	4,887	–	59,187

(b) This expense is a function of both the value and duration of the instruments granted. The expense recognised in 2010 represents a combination of share grants made in 2010 and prior years.

(d) Excludes $112,939 in accrued leave entitlements paid to Mr Dunai following his transition to Chairman.

(e) Appointed 15 March 2010.

The following table discloses the remuneration of the five executives of the Company and the Consolidated Entity (other than the Managing Director) for the year ended 31 December 2011.

	SHORT	TERM EMPLOYMENT	TERM EMPLOYMENT	POST	SHARE BASED
		BENEFITS		EMPLOYMENT (a)	PAYMENTS
					EQUITY
					SETTLED
	SALARY &		NON-	SUPERANNUATIO	SHARE
	FEES	BONUS	MONETARY	N	RIGHTS	TOTAL
	$	$	$	$	$ (b)	$
Mr S Bland	350,315	162,000	1,523	25,000	268,066	806,904
Mr J Davies (c)	386,107	132,217	9,509	2,925	168,245	699,003
Mr P Ferguson	127,385	45,000	–	15,515	–	187,900
Ms K Gross	296,385	155,000	1,321	28,585	240,446	721,737
Mr D Walker	365,393	170,000	1,523	25,000	264,596	826,512

(a) There were no prescribed or other benefits paid to executives during the year.

IRESS Market Technology Limited

DIRECTORS’ REPORT

(b) This expense is a function of both the value and duration of the instruments granted. The expense recognised in 2011 represents a combination of share grants made in 2011 and prior years.
(c) Where applicable remuneration details have been converted to Australian dollars at the weighted average exchange rate.
(d) This figure reflects the total remuneration received by Mr Ferguson since joining the company on 21 June 2011.

DIRECTORS’ REPORT

The following table discloses the remuneration of the seven executives of the Company and the Consolidated Entity (other than the Managing Director) for the year ended 31 December 2010.

				POST	SHARE
				EMPLOYMENT	BASED
	SHORT TERM	EMPLOYMENT	BENEFITS	(a)	PAYMENTS
					EQUITY
			NON-		SETTLED
	SALARY &		MONETAR		SHARE
	FEES	BONUS	Y	SUPERANNUATIO	RIGHTS	TOTAL
	$	$	$	N $	$ (b)	$
Mr S Bland	326,161	133,000	1,455	25,259	273,225	759,100
Mr J Davies (c)	360,964	127,483	8,237	2,749	168,514	667,947
Ms K Gross	246,880	114,000	1,164	26,962	227,311	616,317
Mr A Rudy	220,740	83,000	1,455	26,962	170,587	502,744
Mr J Rudy	210,940	85,000	1,455	26,635	181,689	505,719
Mr D Walker	321,230	132,000	1,455	26,380	260,177	741,242
Ms T Vigilante	271,717	88,000	–	26,380	109,023	495,120

(a) There were no prescribed or other benefits paid to executives during the year.

(b) This expense is a function of both the value and duration of the instruments granted. The expense recognised in 2010 represents a combination of share grants made in 2010 and prior years.

(c) Where applicable, Mr Davies’ remuneration details have been converted to Australian dollars at the weighted average exchange rate.

IRESS Market Technology Limited

DIRECTORS’ REPORT

Share rights granted, exercised or lapsed in favour of the Managing Director and executives or a related body corporate of theirs during the financial year ended 31 December 2011 were as follows.

		VALUE OF SHARE		VALUE OF SHARE
	% OF	BASED	VALUE OF SHARE	BASED
	REMUNERATION	CONSIDERATION	BASED	CONSIDERATION AT
	CONSISTING OF	GRANTED DURING	CONSIDERATION	LAPSE DATE, WHERE
	SHARE BASED	THE YEAR AT GRANT	EXERCISED DURING	LAPSED DURING
	CONSIDERATION	DATE	THE YEAR	THE YEAR
	(a)	$ (b)	$ (c)	$
DIRECTORS
Mr P Dunai	(d)	–	738,000	–
Mr A Walsh	44	2,025,900	378,600	–
EXECUTIVES
Mr S Bland	33	279,975	261,860	–
Mr J Davies	24	176,948	155,000	–
Mr P Ferguson	–	–	–	–
Ms K Gross	33	262,925	202,030	–
Mr D Walker	32	289,928	239,940	–

(a) This figure is calculated on the value of share rights included in remuneration for the year ended 31 December 2011 as a percentage of the total value of all remuneration received in that same year.

(b) External valuation advice from PricewaterhouseCoopers Securities Limited has been used to determine the value of the performance rights. The valuation has been made using a Monte Carlo simulation option pricing model using standard option pricing inputs such as the underlying stock price, exercise price, expected dividends, expected risk free interest rates and expected share price volatility. In addition, the likely achievement of performance hurdles of the share rights have been taken into account.

(c) Figures in this column are calculated by multiplying the number of share rights exercised by directors and executives during the year by the share price prevailing on the date share rights were exercised, notwithstanding that the underlying shares may not be beneficially held by the respective director or executive as the shares may not have been withdrawn from the IRESS Employee Share Trust.

(d) Share grants vesting in Mr Dunai primarily pertain to his prior role as Managing Director. In this light it would be inconsistent to include an assessment of grants vesting in the current year relative to his current fees as a Director.

DIRECTORS’ REPORT

Share Rights granted, exercised or lapsed in favour of the Managing Director and executives or a related body corporate of theirs during the financial year ended 31 December 2010 were as follows.

				VALUE OF SHARE
		VALUE OF SHARE		BASED
	% OF	BASED	VALUE OF SHARE	CONSIDERATION AT
	REMUNERATION	CONSIDERATION	BASED	LAPSE DATE,
	CONSISTING OF	GRANTED DURING	CONSIDERATION	WHERE LAPSED
	SHARE BASED	THE YEAR AT	EXERCISED DURING	DURING
	CONSIDERATION	GRANT DATE	THE YEAR	THE YEAR
	(a)	$ (b)	$ (c)	$
DIRECTORS
Mr P Dunai	(d)	–	5,499,188	–
Mr A Walsh	35	951,860	591,723	–
EXECUTIVES
Mr S Bland	36	264,984	511,993	–
Mr J Davies	25	188,702	–	–
Ms K Gross	37	246,658	401,237	–
Mr A Rudy	34	164,982	361,956	–
Mr J Rudy	36	194,978	357,786	–
Mr D Walker	35	269,988	503,653	–
Ms T Vigilante	22	159,989	227,515	–

(a) This figure is calculated on the value of share rights included in remuneration for the year ended 31 December 2010 as a percentage of the total value of all remuneration received in that same year.

IRESS Market Technology Limited

DIRECTORS’ REPORT

OUTLINE OF EMPLOYMENT CONTRACTS FOR THE MANAGING DIRECTOR AND EXECUTIVES

Contractual terms for most executives are similar but do vary on occasions. Details of the general contractual terms for executives (Mr S Bland, Mr J Davies, Ms K Gross, Mr P Ferguson and Mr D Walker) are as follows.

CRITERION	PARTICULARS
Length of contract	Open ended
Notice period	Not less than 3 months (a)
Fixed remuneration	The fixed remuneration component consists of salary, statutory employer
	superannuation or retirement scheme contributions and benefits (comprising health
	insurance). Any fringe benefit tax liability in respect to benefits is borne by the
	employing entity. (b)
Incentive arrangements	Eligible to participate in the employing entity’s short term incentive arrangements.
	Eligible to participate in the Company’s long term incentive arrangements.
Resignation	Employment may be terminated by giving written notice of same for the period
	specified in the Notice Period of the contract.
	If resignation occurs during the year, then there is no entitlement to any bonus or long
	term incentives which have not vested, unless otherwise determined by the Board.
Retirement	There are no financial entitlements due from the employing entity on the retirement of
	an executive.
	Directors do have a discretion to make ex-gratia payments, for example if retirement
	were to occur during the year, then directors may elect to make a pro-rata award under
	any applicable bonus or incentive plan, based on performance up to the date of
	retirement.
Termination on notice by the	The employing entity may terminate the employment agreement by providing written
employing entity	notice of same for the period specified in the Notice Period of the contract, or payment
	in lieu of the notice period.
	If termination occurs during the year then a pro-rata award will be made for any
	applicable bonus or incentive plan, based on performance up to the date of termination.
Redundancy	If the employing entity terminates employment for reasons of bona fide redundancy, a
	severance payment will be made. The quantum will be at the Board’s discretion taking
	account of such matters as statutory requirements, the executive’s contribution,
	position and length of service.
	If redundancy occurs during the year then a pro-rata award will be made for any
	applicable bonus or incentive plan, based on performance up to the date of termination.
Income protection insurance	The Company currently has Income Protection Insurance cover for all Australian
	domiciled staff covering the period from 2 years after the applicable incident until that
	staff member turns 65. Australian domiciled executives are included in this policy.
Termination for serious	The employing entity may terminate the employment agreement at any time without
misconduct	notice and the executive will only be entitled to accrued leave entitlements.
Termination and share grants	Depending on the circumstances, directors may choose to exercise their discretion in
	relation to share grants. Any such discretion would be assessed on a case by case
	basis.

(a) Mr Davies has a six week notice period

(b) In November 2011, Mr Bland moved to six weeks annual leave entitlement

DIRECTORS’ REPORT

Details of the contractual terms for the Managing Director are broadly the same as set out for executives in the above table. Key points of difference are as follows.

CRITERION	PARTICULARS
Length of contract	Open ended.
Position	Managing Director.
Notice period	Not less than six months.
Incentive arrangements	Eligible to participate in the company’s short term incentive arrangements.
	Eligible to participate in the Employee Performance Rights Plan, Employee
	Deferred Share Plan, Employee Deferred Share Rights Plan or any replacement or
	supplementary plan.
Restraint	A restraint arrangement exists during Mr Walsh’s employment and for a period of
	six months post his employment.
Termination and share grants	Depending on the circumstances, directors may choose to exercise their discretion
	in relation to share grants. Any such discretion would be assessed on a case by
	case basis.

Signed in accordance with a resolution of the Directors made pursuant to s.298(2) of the Corporations Act 2001.

On behalf of the Directors

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Mr A Walsh Managing Director

MELBOURNE, 22 February 2012

IRESS Market Technology Limited

AUDITORS INDEPENDENCE DECLARATION

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Deloitte Touche Tohmatsu A.B.N. 74 490 121 060

550 Bourke Street Melbourne VIC 3000 PO Box 78 Melbourne VIC 3001 Australia

The Board of Directors IRESS Market Technology Limited Level 18, 385 Bourke St MELBOURNE VIC 3000

DX 10307SSE Tel: +61 (0) 3 9671 7000 Fax: +61 (0) 3 9671 7001 www.deloitte.com.au

22 February 2012

Dear Board Members

Independence Declaration: IRESS Market Technology Limited

In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following declaration of independence to the directors of IRESS Market Technology Limited.

As lead audit partner for the audit of the financial statements of IRESS Market Technology Limited for the financial year ended 31 December 2011, I declare that to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

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DELOITTE TOUCHE TOHMATSU

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Sneza Pelusi

Partner

Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Touche Tohmatsu

CORPORATE GOVERNANCE STATEMENT

CORPORATE GOVERNANCE

The Board of IRESS Market Technology Limited is committed to the Principles of Good Corporate Governance & Best Practice Recommendations issued by the ASX Corporate Governance Council. In those few cases where the Board has exercised its discretion to adopt a different approach, it does so because it believes this is in the best interests of shareholders, as explained in the material set forth below.

		CORPORATE
		GOVERNANCE
		STATEMENT
PRINCIPLE	DESCRIPTION	REFERENCE	STATUS
Principle 1	Lay solid foundations for management and oversight
	Companies should establish and disclose the roles and
	responsibilities of board and management.
1.1	Companies should establish the functions reserved to the board	1 Board Charter	Comply
	and those delegated to senior executives and disclose those
	functions.
1.2	Companies should disclose the process for evaluating the	1.2	Comply
	performance of senior executives.
1.3	Companies should provide the information indicated in the Guide	4, 5 & Directors’	Comply
	to reporting on Principle 1.	Biographies &
		Directors’ Report
Principle 2	Structure the board to add value
	Companies should have a board of an effective composition, size
	and commitment to adequately discharge its responsibilities and
	duties.
2.1	A majority of the board should be independent directors.	4.3	Comply
2.2	The chair should be an independent director.	4.3, 4.4, 4.5,	Not comply
		Lead Independent
		Director Charter
2.3	The roles of chair and chief executive officer should not be	4.3	Comply
	exercised by the same individual.
2.4	The board should establish a nomination committee.	9.1, Nomination &	Comply
		Remuneration
		Committee Charter
2.5	Companies should disclose the process for evaluating the	11.1	Comply
	performance of the board, its committees and individual
	directors.
2.6	Companies should provide the information indicated in the Guide	4.1, 4.2, 4.3	Comply
	to reporting on Principle 2.	& Directors’
		Biographies &
		Directors’ Report

IRESS Market Technology Limited

CORPORATE GOVERNANCE STATEMENT

		CORPORATE
		GOVERNANCE
		STATEMENT
PRINCIPLE	DESCRIPTION	REFERENCE	STATUS
Principle 3	Promote ethical and responsible decision-making
	Companies should actively promote ethical and responsible
	decision-making.
3.1	Companies should establish a code of conduct and disclose the	2	Comply
	code or a summary of the code as to:
	 the practices necessary to maintain confidence in the
	company’s integrity;
	 the practices necessary to take into account their legal
	obligations and the reasonable expectations of their
	stakeholders;
	 the responsibility and accountability of individuals for
	reporting and investigating reports of unethical
	practices.
3.2	Companies should establish a policy concerning diversity and	2.5, 2.6	Not comply
	disclose the policy or a summary of that policy. The policy should
	include requirements for the board to establish measurable
	objectives for achieving gender diversity and for the board to
	assess annually both the objectives and progress in achieving
	them.
3.3	Companies should disclose in each annual report the measurable	2.5, 2.6, 2.7	Not comply
	objectives for achieving gender diversity set by the board in
	accordance with the diversity policy and progress towards
	achieving them.
3.4	Companies should disclose in each annual report the proportion	2.7	Comply
	of women employees in the whole organisation, women in senior
	executive positions and women on the board.
3.5	Companies should provide the information indicated in the Guide	2, 13	Comply
	to reporting on Principle 3.
Principle 4	Safeguard integrity in financial reporting
	Companies should have a structure to independently verify and
	safeguard the integrity of their financial reporting.
4.1	The board should establish an audit committee.	10	Comply
4.2	The audit committee should be structured so that it:	10.1, Audit	Comply
	 consists only of non-executive directors;	Committee Charter
	 consists of a majority of independent directors;
	 is chaired by an independent chair, who is not chair of
	the board;
	 has at least three members.
4.3	The audit committee should have a formal charter.	9.1	Comply
4.4	Companies should provide the information indicated in the Guide	10 & Directors’	Comply
	to reporting on Principle 4.	Biographies &
		Directors’ Report

CORPORATE GOVERNANCE STATEMENT

		CORPORATE
		GOVERNANCE
		STATEMENT
PRINCIPLE	DESCRIPTION	REFERENCE	STATUS
Principle 5	Make timely and balanced disclosure
	Companies should promote timely and balanced disclosure of all
	material matters concerning the company.
5.1	Companies should establish written policies designed to ensure	12	Comply
	compliance with ASX Listing Rule disclosure requirements and to
	ensure accountability at a senior executive level for that
	compliance and disclose those policies or a summary of those
	policies.
5.2	Companies should provide the information indicated in the Guide	12	Comply
	to reporting on Principle 5.
Principle 6	Respect the rights of shareholders
	Companies should respect the rights of shareholders and
	facilitate the effective exercise of those rights.
6.1	Companies should design a communications policy for promoting	12.2, 12.3	Comply
	effective communication with shareholders and encouraging their
	participation at general meetings and disclose their policy or a
	summary of that policy.
6.2	Companies should provide the information indicated in the Guide	12, 14	Comply
	to reporting on Principle 6.
Principle 7	Recognise and manage risk
	Companies should establish a sound system of risk oversight and
	management and internal control.
7.1	Companies should establish policies for the oversight and	3.2	Comply
	management of material business risks and disclose a summary
	of those policies.
7.2	The board should require management to design and implement	3.3, 3.4, 3.5	Comply
	the risk management and internal control system to manage the
	company’s material business risks and report to it on whether
	those risks are being managed effectively. The board should
	disclose that management has reported to it as to the
	effectiveness of the company’s management of its material
	business risks.
7.3	The board should disclose whether it has received assurance	3.6	Comply
	from the chief executive officer (or equivalent) and the chief
	financial officer (or equivalent) that the declaration provided in
	accordance with section 295A of the Corporations Act is founded
	on a sound system of risk management and internal control and
	that the system is operating effectively in all material respects in
	relation to financial reporting risks.
7.4	Companies should provide the information indicated in the Guide	3	Comply
	to reporting on Principle 7.

IRESS Market Technology Limited

CORPORATE GOVERNANCE STATEMENT

		CORPORATE
		GOVERNANCE
		STATEMENT
PRINCIPLE	DESCRIPTION	REFERENCE	STATUS
Principle 8	Remunerate fairly and responsibly
	Companies should ensure that the level and composition of
	remuneration is sufficient and reasonable and that its relationship
	to performance is clear.
8.1	The board should establish a remuneration committee.	9.1, 11,	Comply
		Nomination and
		Remuneration
		Committee Charter
8.2	The remuneration committee should be structured so that it:	11.4, 11.5, 11.6	Comply
	 consists of a majority of independent directors;	Lead Independent Director Charter
	 is chaired by an independent director; and
	 has at least three members.
8.3	Companies should clearly distinguish the structure of non-	7, Directors’ Report	Comply
	executive directors’ remuneration from that of executive directors
	and senior executives.
8.4	Companies should provide the information indicated in the Guide	7, 9, 11	Comply
	to reporting on Principle 8.	& Directors’ Report

CORPORATE GOVERNANCE STATEMENT

INTRODUCTION

IRESS’ Board works under a set of well–established corporate governance policies that reinforce the responsibilities of all directors in accordance with the requirements of the Corporations Act 2001 and the Australian Stock Exchange (ASX). In addition, many of the governance elements are enshrined in the Company’s Constitution. In addition, in December 2011 the Board adopted a revised Board Charter, which is intended to supplement the description of the Board’s responsibilities as set forth in the Constitution.

The Company’s policies and corporate governance practices are reviewed annually and will continue to be developed and refined to meet the needs of the Company and best practice.

This Corporate Governance Statement outlines the key aspects and mechanisms of IRESS’ governance framework, which have been established, and kept under review, by the Board. Copies of or summaries of the charters under which the Board and Board committees operate and other relevant information referred to in this Corporate Governance Statement are available on IRESS’ website http://www.iress.com.

1 BOARD RESPONSIBILITIES

1.1 The Board has ultimate responsibility to set strategy and policy for the business and affairs of the Company and its subsidiaries for the benefit of the shareholders after having considered regulatory matters and other ethical expectations and obligations. The Board is accountable to shareholders for the performance of the Group.
1.2 The Board’s responsibilities and functions include, to:
review and approve corporate strategies, budgets, plans and policies developed by management and evaluate performance of the Group against those strategies and business plans in order to:
- monitor the performance of functions delegated to the executive team including the progress of major capital expenditure, capital management, acquisitions, divestitures and strategic commitments; and
- assess the suitability of the Company’s overall strategies, business plans and resource allocation;
appoint a Managing Director for the ongoing management of the business and execution of its strategies;
regularly evaluate the performance of the Managing Director and senior management and ensure appropriate executive succession planning is conducted;
monitor financial and business results (including the audit process) to understand at all times the financial position of the Group;
ensure regulatory compliance and maintain adequate risk management processes;
report to shareholders; and
implement a culture of compliance with the highest legal and ethical standards and business practices.
1.3 In carrying out its duties, the Board meets regularly to discuss matters relevant to the Company, with additional meetings held as required to address specific issues.
1.4 The Board delegates management of the Company’s resources to the executive team under the leadership of the Managing Director. Any powers not specifically reserved for the Board are deemed to have been delegated to the executive team.

2 ETHICAL STANDARDS AND DIVERSITY

2.1 The Company is committed to upholding high legal, moral and ethical standards in all of its corporate activities and has adopted a Code of Ethics, which aims to strengthen its ethical climate and provide basic guidelines for situations in which ethical issues arise. The Code of Ethics applies to directors, executives, management and employees, and sets standards for ethical behaviour and business practice beyond complying with the law, and is based on the key principles whereby the Company:
strives to do business with customers and suppliers of sound business character and reputation;
strives to maintain the highest standard of ethical behaviour in business dealings and to behave with integrity in all dealings with customers, shareholders, government, employees, suppliers and the community;

IRESS Market Technology Limited

CORPORATE GOVERNANCE STATEMENT

does not knowingly support any public or private organisation which espouses discriminatory policies or practices; and
expects all employees to perform their duties with honesty, truthfulness and integrity.
2.2 It is the policy of the Company to comply with the letter and spirit of all applicable laws, including those relating to employment, discrimination, health, safety, trade practices and securities. The Company has also developed procedures to ensure that employees are aware of and discharge their obligations under relevant privacy laws in their handling of information provided to the Group.
2.3 No director, officer, executive or manager of the Company has authority to violate any law or to direct another employee or any other person to violate any law on behalf of the Company.
2.4 The Company’s ethical practices and procedures are reviewed regularly, and processes are in place to promote and communicate these policies within the Company.
2.5 The Board notes that the ASX Corporate Governance Council’s recommendations include a recommendation that the Company should adopt a formal policy in relation to diversity.
2.6 The Company has a broad and diverse employee base across several international jurisdictions. The Board informally monitors diversity but has not adopted a formal policy. The informal monitoring entails considering diversity under a broad definition, including gender diversity, across the Group not only at the Board and executive levels, but also across the general staff base. While the Board continues to observe no indicators of biases, or impediments to diversity, it does not intend to adopt a more formalised process.
2.7 As at 31 December 2011 approximately 33% of the aggregate employment base of the Company were women, and comprised 1 director (out of a total of 6), 2 senior managers (out of a total of 14) and 215 staff (out of a total of 641). The Board believes that these statistics suggest that its approach of informally monitoring gender diversity has produced satisfactory results.

3 RISK MANAGEMENT

3.1 All business activities contain an element of risk. IRESS’ philosophy toward risk is to identify the risks in advance, determine potential risk mitigation strategies, assess the risk in terms of the risk/reward equation and then determine how to proceed. Calculated risk taking is viewed as an essential part of the IRESS’ approach to creating long term shareholder value.
3.2 For the purposes of assisting investors to better understand the nature of the risks faced by the Company, the Board has prepared a list of operational risks as part of the Principle 7 disclosures. However the Board notes that this does not necessarily represent an exhaustive list and that it may be subject to change based on underlying market events.

The key areas of risk faced by IRESS include operational risk – relating to internal processes or external events, contractual risk – relating to performance requirements in our contractual engagements, key staff risk, and competitor risk and financial/economic risk. Several of these risks are inherent in the nature of the business and are managed operationally on a day-to-day basis. Appropriate policies and procedures are in place to oversee and manage these risks, and are periodically reviewed by management and the results communicated to the Board.

3.3 The Board is responsible for approving the Company’s risk management strategy and policies including the overall internal control framework. In considering the internal control framework the Board considers no cost effective internal control system will preclude all errors and irregularities. To assist in discharging this responsibility, the Board has instigated an approach that can be described under the following five headings.
Financial reporting – there is a comprehensive budgeting system with an annual budget approved by the directors. Monthly actual results are reported against budget or an alternative benchmark (where considered appropriate) and revised internal forecasts for the year are prepared regularly. Procedures are also in place to ensure that disclosure obligations are reviewed and information is reported to the ASX in accordance with Continuous Disclosure Requirements.
Quality and integrity of personnel – the Company’s human resource related policies and procedures are directed towards achieving the highest levels of service and integrity.
External advice – the Company engages external experts, particularly in the areas of legal, tax and valuation matters to support management in performing their duties.

CORPORATE GOVERNANCE STATEMENT

Operating controls – procedures including information systems controls are appropriately documented. Exception and corrective action reports highlight any departures from these procedures.
Functional specialty reporting – at various times (for example pre and/or post an acquisition), the Board may request additional ad-hoc information to address a particular area of concern or risk.
3.4 The tasks of undertaking and assessing risk management and internal control effectiveness are delegated to management through the Managing Director, the CFO and the Group General Counsel, including responsibility for the day to day design and implementation of the Company's risk management and internal control system. Management reports to the Board on the Company’s key risks and the extent to which it believes these risks are being adequately managed. The reporting on risk by management is a periodic agenda item at Board meetings.
3.5 In accordance with section 295A of the Corporations Act, the Managing Director and CFO have provided a written statement to the Board that:
their view provided on the Company's financial report is founded on a sound system of risk management and internal compliance and control which implements the financial policies adopted by the Board;
the Company's risk management and internal compliance and control system is operating effectively in all material respects.

Internal control assurance letters are completed by the key management personnel of all significant business units, as well as by finance managers, in support of these written statements.

3.6 The Board notes that due to its nature, internal control assurance from the Managing Director and CFO can only be reasonable rather than absolute. This is due to such factors as the need for judgement, the use of testing on a sample basis, the inherent limitations in internal control and because much of the evidence available is persuasive rather than conclusive and therefore is not and cannot be designed to detect all weaknesses in control procedures.

4 BOARD COMPOSITION

4.1 The Board’s policy is that there should be a majority of independent, non–executive directors to ensure that Board discussions or decisions have the benefit of predominantly outside views and experience, and that the majority of directors are free from interests and influences that may create a conflict with their duty to the Company. Maintaining a balance of experience and skills is an important factor in Board composition. Details of each director are set out on page 2.
4.2 The Board has adopted the definition of independence set out in the Corporate Governance Principles and Recommendations released by the ASX Corporate Governance Council in August 2007. The Board has developed guidelines to determine materiality thresholds for the purposes of that definition. Broadly speaking, these guidelines seek to determine whether the director is generally free of any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company.
4.3 The Company currently has six directors, one of whom is an Executive Director (the Managing Director). The remaining five directors are non–executive. With the exception of the Chairman, all non-executive directors are ‘independent’.
4.4 The Board notes that the ASX Corporate Governance Council’s recommendations include a recommendation that the Chairman be an independent director. As noted in 4.3 above, although he is Chairman of the Board, Mr Dunai is not an independent director.
4.5 The Board believes it is important that Mr Dunai remains actively engaged with the Company and that this requirement is best met by him holding the position of Chairman. The Board is also of the view it is capable of making, and does make, independent decisions with regard to the best interests of the Company notwithstanding that the Chairman is not independent. As an additional measure, Ms Seabrook holds the position of Lead Independent Director, with a clear charter to act as a point of reference and coordination where there is, or it is perceived there may be, a conflict for the Chair (refer item 8 of this Corporate Governance Statement).
4.6 In the opinion of the Board, the present composition fairly represents the interests of all shareholders in the Company.

IRESS Market Technology Limited

CORPORATE GOVERNANCE STATEMENT

5 BOARD ACCESS TO INFORMATION AND INDEPENDENT ADVICE

5.1 All directors have unrestricted access to all employees of the group and, subject to the law, access to all Company records and information held by group employees and external advisers. The Board receives regular detailed financial and operational reports from senior management.
5.2 Any director can seek independent professional advice at the Company’s expense in the furtherance of his or her duties, subject to prior discussion with the Chairman. If this occurs, the Chairman must notify the other directors of the approach, with any resulting advice received to be generally circulated to all directors.

6 APPOINTMENT TERM AND OTHER DIRECTORSHIPS

6.1 In accordance with the Company’s constitution, all directors other than the Managing Director are required to seek re–election at least once in every three years on a rotating basis.
6.2 In order to ensure that composition of the Board will change over time, the Board has a general policy that non– executive directors should not serve for a period exceeding 12 years, and that the Chairman should not serve in that role for more than 10 years.
6.3 Directors are required continually to evaluate the number of Boards on which they serve to ensure that each can be given the time and attention required to fulfil their duties and responsibilities. Directors are required to seek approval from the Chairman prior to accepting an invitation to become a director of any corporation.

7 REMUNERATION

7.1 Non–executive directors are paid an annual fee within a fixed amount approved for all non–executive directors by shareholders. The total aggregate annual amount approved for the Company is currently $600,000 per annum, which was set in 2010.
7.2 The Company does not pay retirement benefits to directors.
7.3 For information relating to the consolidated entity’s remuneration practices, and details relating to directors’ and executives’ remuneration during the financial year, see the Audited Remuneration Report which starts on page 11, and is incorporated into this corporate governance statement by reference.
7.4 No additional fees were paid to directors for serving on sub–committees during the period. As members of management, executive directors, when appointed, do not receive any additional directors’ fee.
7.5 The fees paid to directors take into account what is paid by comparable companies and what is necessary to attract high–calibre people to consider Board appointment. In line with general industry practice, the Board reviews its remuneration strategies in relation to non–executive directors from time to time.
7.6 Further details regarding the remuneration paid to directors and senior executives of the Company and the group are set out in the Directors’ Report on pages 7 to 25.
7.7 Subject to the restriction that persons may not deal in any securities when they are in possession of price–sensitive information, directors and employees generally may only buy or sell the Company’s shares in the periods immediately following the release of the Company’s half–year and full year results and Annual General Meeting. At all times, directors dealing in the Company’s shares must obtain prior approval from the Chairman.
7.8 The relevant interests of each director in the share capital of the Company at the date of this report, as notified to the ASX pursuant to the Listing Rules and section 205G of the Corporations Act 2001, are set out on page 11 in the Directors’ Report.

8 CONFLICT OF INTEREST AND LEAD INDEPENDENT DIRECTOR

8.1 In order to ensure that any interests of a director in a particular matter to be considered by the Board are brought to the attention of all the directors, the Company has developed protocols consistent with obligations imposed by the Corporations Act 2001 and the Listing Rules, to require each director to disclose any contracts, offices held, interests in transactions and other directorships which may involve any potential conflict. Appropriate procedures have been adopted to ensure that, where the possibility of a material conflict arises, relevant information is not

CORPORATE GOVERNANCE STATEMENT

provided to the director, and the director does not participate in discussion on the particular issue, or vote in respect of the matter at the meeting where the matter is considered.

8.2 Concurrent with Mr Dunai assuming the role of Chairman, Ms Seabrook assumed the role of Lead Independent Director. This appointment became effective on 5 May 2010.
8.3 The role of the Lead Independent Director is to provide a point of reference and coordination where there is, or it is perceived there may be, a conflict for the Chair where the Chair is not an independent director.

9 BOARD COMMITTEES

9.1 The Board has two standing committees, namely the Audit Committee and a Nomination and Remuneration Committee. The Company has adopted an Audit Committee Charter and a Nomination and Remuneration Charter to define the tasks and responsibilities delegated to these committees.
9.2 The Board periodically reviews the Audit Committee and Nomination and Remuneration Committee Charters. The Audit Committee Charter was updated in October 2011.
9.3 The Board also delegates specific functions to ad hoc committees of directors on an ‘as needs’ basis. The powers delegated to these committees are set out in Board resolutions. Senior executives attend Board and committee meetings by invitation, whenever particular matters arise that require management presentations or participation.

10 ACCOUNTABILITY AND AUDIT

10.1 The members of the Audit Committee during the year were all non–executive directors and comprised:
Mr J Killen (Chair) (retired 5 May 2011);
Mr J Hayes (Chair) (appointed 10 June 2011)
Mr B Burdett;
Ms J Seabrook; and
Mr J Cameron (retired from Audit Committee 5 May 2011).
10.2 Members of the Audit Committee are financially literate and the Board is of the opinion that the members of the committee possess sufficient financial expertise and knowledge of the industry in which the Company operates. Details of the qualifications of the Audit Committee members are included in the Directors’ Report on page 7.
10.3 The Audit Committee reviews the financial statements, adequacy of financial controls and the annual external audit arrangements. It monitors the controls and financial reporting systems, applicable Company policies, national and international accounting standards and other regulatory or statutory requirements.
10.4 The Committee also liaises with the Company’s external auditors, reviews the scope of their activities, their remuneration and independence, and advises the Board on their appointment and removal. It is Board policy that the lead external audit partner and review partner are each rotated periodically.
10.5 The Chief Financial Officer, other relevant Company officers (as required) and the lead external audit partner participate at meetings of the Audit Committee.
10.6 The Board has adopted a policy that the Company’s external auditor shall not provide non–audit services that may detract from the external auditor’s independence and impartiality or be perceived as doing so. Any other services provided by the external auditor are reviewed on a case by case basis and must be approved by the Audit Committee in advance.

11 NOMINATION AND REMUNERATION

11.1 The Nomination and Remuneration Charter provides for periodic review of the structure and performance of the Board, Board committees and individual directors and a framework for changes when necessary. This includes identifying suitable candidates for appointment as non–executive directors. The Charter also addresses matters such as succession and senior executive compensation policy, including short and long–term incentive plans and the Company’s recruitment, retention and termination policies.

IRESS Market Technology Limited

CORPORATE GOVERNANCE STATEMENT

11.2 The Charter provides for directors to access the services of independent professional advisers to assist in the search for high–calibre people at all levels and ensure that the terms and conditions offered by the Company are competitive with those offered by comparable companies.
11.3 The members of the Nomination and Remuneration Committee are:
Ms J Seabrook (Chair);
Mr P Dunai; and
Mr J Cameron.

12 CONTINUOUS DISCLOSURE

12.1 The Board has a disclosure policy and procedures in place which are designed to ensure that information reported to the ASX is in accordance with the continuous disclosure requirements of its Listing Rules. The Board regularly reviews the Company’s compliance with its continuous disclosure obligations. The Company Secretary is responsible for coordinating disclosure of information to the ASX, the Australian Securities and Investments Commission and shareholders.
12.2 In addition to the Company’s obligations to disclose information to the ASX and to distribute information to shareholders, the Company publishes annual and half–year reports, media releases, and other relevant publications on its website, at www.iress.com
12.3 The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and discussion of the Group’s strategy and goals. The Company invites the external auditor to attend the Annual General Meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the auditor’s report.

13 SECURITIES DEALINGS

13.1 The Board’s policy concerning trading in Company securities precludes directors, executives and employees from dealing in the Company’s securities except during three defined approved trading windows. Dealing in shares outside these periods is prohibited without prior approval from the Board, the Managing Director or the Company Secretary. In the case of directors, prior approval from the Chairman is required for all dealings in the Company’s securities.

The approved trading windows are for the four weeks after:

one day following the announcement of the half-year and full year results (as the case may be); and
one day following the holding of the annual general meeting.
13.2 All directors, executives and employees are prohibited from trading the Company’s securities at any time if they possess price-sensitive information not available to the market and which could reasonably be expected to influence the market. At no time may directors, executives and employees may not engage in short term dealings in the Company’s shares.
13.3 Hedging of unvested share rights is also prohibited. The Board’s view is that any share-right participant who enters into such schemes on the unvested component of their rights would be in breach of the terms and conditions of the grant, and the Board would exercise its right to cancel any of these hedged share rights.
13.4 As required by the ASX listing rules, the Company notifies the ASX of any transaction conducted by directors in the securities of the Company.
13.5 At the end of 2010, pursuant to changes in the ASX listing rules, the Company announced its Securities Trading Policy applying to Key Management Personnel. This policy is broadly consistent with the internal policies on dealing in the Company’s securities, albeit with some incremental restrictions and obligations on the non-director members in this group.

CORPORATE GOVERNANCE STATEMENT

14 ADDITIONAL CORPORATE GOVERNANCE INFORMATION

14.1 The corporate governance section of the Company’s website contains various material relating to corporate governance, including the Board Charter, Sub-committee Charters, Code of Ethics, Lead Independent Director Charter, Securities Trading Policy applying to Key Management Personnel and other information. The link to the corporate governance section of the Company’s website is www.iress.com/en/company_profile/ corporate_governance.html.

IRESS Market Technology Limited

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IRESS MARKET TECHNOLOGY LTD

Deloitte Touche Tohmatsu A.B.N. 74 490 121 060

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550 Bourke Street Melbourne VIC 3000 PO Box 78 Melbourne VIC 3001 Australia

DX 10307SSE Tel: +61 (0) 3 9671 7000 Fax: +61 (0) 3 9671 7001

We have audited the accompanying financial report of IRESS Market Technology Limited, which comprises the Statement of Financial Position as at 31 December 2011, and the Statement of Comprehensive Income, Statement of Cash Flows and Statement of Changes in Equity for the year ended on that date, a summary of significant accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year as set out on pages 41 to 101.

DIRECTORS’ RESPONSIBILITY FOR THE FINANCIAL REPORT

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with AASB 101 ‘Presentation of Financial Statements’, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the consolidated financial statements and notes comply with International Financial Reporting Standards.

AUDITOR’S RESPONSIBILITY

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Liability limited by a scheme approved under Professional Standards Legislation

Member of Deloitte Touche Tohmatsu

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF IRESS MARKET TECHNOLOGY LTD

AUDITOR’S INDEPENDENCE DECLARATION

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of IRESS Market Technology Limited, would be in the same terms if given to the directors as at the time of this auditor’s report.

AUDITOR’S OPINION ON THE FINANCIAL REPORT

In our opinion:

(a) the financial report of IRESS Market Technology Limited is in accordance with the Corporations Act 2001, including:
i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2011 and of its performance for the year ended on that date; and
ii) complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.

REPORT ON THE REMUNERATION REPORT

We have audited the Remuneration Report included in pages 7 to 25 of the Directors’ Report for the year ended 31 December 2011. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report based on our audit conducted in accordance with Australian Auditing Standards.

AUDITOR’S OPINION

In our opinion the Remuneration Report of IRESS Market Technology Limited for the year ended 31 December 2011, complies with Section 300A of the Corporations Act 2001.

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DELOITTE TOUCHE TOHMATSU

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Sneza Pelusi

Partner

Chartered Accountants

MELBOURNE, 22 February 2012

IRESS Market Technology Limited

DIRECTORS DECLARATION

The directors declare that:

(a) in the directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable;
(b) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the consolidated entity;
(c) in the directors’ opinion, the financial statements and notes thereto are in accordance with International Financial Reporting Standards issued by the International Accounting Standards Board; and
(d) the directors have been given the declarations required by s.295A of the Corporations Act 2001

Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001.

On behalf of the Directors

==> picture [147 x 58] intentionally omitted <==

Mr A Walsh Managing Director

MELBOURNE, 22 February 2012

STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2011

NOTE Revenue from ordinary activities 2 Customer data fees Communication and other technology expenses Employee related expenses 3 Other expenses including administration expenses Facilities rent Bad and doubtful debts Business acquisition and restructure expenses Profit before depreciation, amortisation, interest and income tax expense 2 Depreciation and amortisation expense Profit before interest and income tax expense Interest revenue Interest expense Net interest 2 Profit before income tax expense Income tax expense 4 Profit attributable to the members of the parent entity Other comprehensive income Exchange differences arising on translation of foreign operations Total comprehensive income for the period EARNINGS PER SHARE 5 Basic earnings per share (cents per share) Diluted earnings per share (cents per share) Notes to the financial statements are included on pages 45 to 101.	CONSOLIDATED
	2011 $’000 2010 $’000
	204,758 179,585 (21,885) (20,170) (10,579) (9,309) (79,725) (64,090) (6,540) (4,752) (3,188) (2,489) (882) 722 (793) (15)
	81,166 79,482
	(22,587) (15,098)
	58,579 64,384
	1,795 3,488 (214) (45)
	1,581 3,443
	60,160 67,827
	(18,819) (17,348)
	41,341 50,479
	– – (5,754) (342)
	35,587 50,137
	32.644 40.335 32.589 40.016

IRESS Market Technology Limited

BALANCE SHEET AS AT 31 DECEMBER 2011

NOTE CURRENT ASSETS Cash and cash equivalent assets Trade receivables 6 Other receivables 6 Current tax receivables 4 Other financial assets 7 Total current assets NON–CURRENT ASSETS Plant and equipment 8 Computer software 9 Goodwill 10 Intangibles 10 Deferred tax assets 11 Other financial assets 12 Total non–current assets Total assets CURRENT LIABILITIES Trade payables 13 Other payables 13 Current tax payables 14 Provisions 15 Total current liabilities NON–CURRENT LIABILITIES Provisions 16 Deferred tax liabilities 4 Total non–current liabilities Total liabilities Net assets EQUITY Issued capital 17 Reserves 18 Retained earnings 19 Total equity	CONSOLIDATED
	2011 $’000 2010 $’000
	48,925 99,063 12,104 10,025 3,817 1,463 1,791 1,650 668 280
	67,305 112,481
	6,773 4,068 39,369 16,175 40,137 31,234 4,707 1,540 11,120 6,263 46 50
	102,152 59,330
	169,457 171,811
	10,175 6,646 6,025 6,614 10,250 11,041 3,927 2,910
	30,377 27,211
	9,802 5,554 1,426 1,431
	11,228 6,985
	41,605 34,196
	127,852 137,615
	75,898 75,898 29,124 27,788 22,830 33,929
	127,852 137,615

Notes to the financial statements are included on pages 45 to 101.

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2011

2011 Opening balance Profit for the year Increase/(decrease) in translation reserve arising on translation of foreign operations Total comprehensive income for the year Issue of share capital Cost of share-based payments Equity dividends Closing balance 2010 Opening balance Profit for the year Increase/(decrease) in translation reserve arising on translation of foreign operations Total comprehensive income for the year Issue of share capital Cost of share-based payments Equity dividends Closing balance	CONSOLIDATED
	ISSUED CAPITAL $’000 RETAINED EARNINGS $’000 SHARE BASED PAYMENTS RESERVE $’000 FOREIGN CURRENCY TRANSLATIO N RESERVE $’000 TOTAL $’000
	75,898 33,929 32,094 (4,306) 137,615 – 41,341 – – 41,341 – – – (5,754) (5,754)
	– 41,341 – (5,754) 35,587
	– – – – – – – 7,090 – 7,090 – (52,440) – – (52,440)
	75,898 22,830 39,184 (10,060) 127,852
	75,898 27,093 25,194 (3,964) 124,221 – 50,479 – – 50,479 – – – (342) (342)
	– 50,479 – (342) 50,137
	– – – – – – – 6,900 – 6,900 – (43,643) – – (43,643)
	75,898 33,929 32,094 (4,306) 137,615

Notes to the financial statements are included on pages 45 to 101.

STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2011

NOTE CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers Payments to suppliers Payments to employees Interest and bill discounts received Interest paid Income tax paid Net cash provided by operating activities 22 CASH FLOWS FROM INVESTING ACTIVITIES Payment for plant and equipment Payment for software from Peresys 23 Payment for acquisition of subsidiaries 24 Proceeds from/(payment for) investment in listed companies Proceeds from sale of plant and equipment Dividends received Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issues of equity securities Dividends paid Net cash used in financing activities Net increase/(decrease) in cash held Cash at the beginning of the financial year Effects of exchange rate changes on the balance of cash held in foreign currencies Cash at the end of the financial year	CONSOLIDATED
	INFLOWS (OUTFLOWS)
	2011 $’000 2010 $’000
	218,584 192,313 (62,513) (50,080) (71,363) (56,746) 1,696 3,467 (214) – (31,474) (13,398)
	54,716 75,556
	(7,129) (3,783) (39,335) – (3,412) (1,799) 5 5 26 – 91 69
	(49,754) (5,508)
	– – (52,438) (43,644)
	(52,438) (43,644)
	(47,476) 26,404
	99,063 73,225 (2,662) (566)
	48,925 99,063

Notes to the financial statements are included on pages 45 to 101.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

1 SUMMARY OF ACCOUNTING POLICIES

STATEMENT OF COMPLIANCE

The financial report is a general purpose financial report which has been prepared in accordance with the Corporations Act 2001, Accounting Standards and Interpretations, and complies with other requirements of the law. Accounting Standards include Australian equivalents to International Financial Reporting Standards (‘Australian Accounting Standards). Compliance with the Australian Accounting Standards ensures that the financial statements and notes of the consolidated entity comply with International Financial Reporting Standards (‘IFRS’).

The financial statements were authorised for issue by the directors on 22 February 2012.

BASIS OF PREPARATION

The financial report has been prepared on the basis of historical cost. Cost is based on the fair values of the consideration given in exchange for assets.

In the application of Australian Accounting Standards management is required to make judgments, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

Judgments made by management in the application of Australian Accounting Standards that have significant effects on the financial statements and estimates with a significant risk of material adjustments in the next year are disclosed, where applicable, in the relevant notes to the financial statements.

Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that the substance of the underlying transactions or other events is reported.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The following significant accounting policies have been adopted in the preparation and presentation of the financial report.

(a) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash in banks and short term, highly liquid investments in money market instruments that are readily convertible to known amounts of cash. Bank overdrafts are shown within borrowings in current liabilities in the statement of financial position.

(b) Employee benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave and long service leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of short term employee benefits are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of services provided by employees up to the reporting date.

Contributions to defined contribution superannuation plans are expensed when incurred.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

(c) Financial assets

Investments are recognised and derecognised on trade date where purchase or sale of an investment is under a contract whose terms require delivery of the investment within the timeframe established by the market concerned, and are initially measured at fair value, net of transaction costs.

Subsequent to initial recognition, investments in subsidiaries are measured at cost. Subsequent to initial recognition, investments in jointly controlled entities are accounted for under the equity method in the consolidated financial statements and the cost method in the company financial statements.

Loans and receivables

Trade receivables, loans, and other receivables are recorded at amortised cost less impairment.

(d) Foreign currency

Foreign currency transactions

All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was determined.

Exchange differences are recognised in profit or loss in the period in which they arise except that:

exchange differences which relate to assets under construction for future productive use are included in the cost of those assets where they are regarded as an adjustment to interest costs on foreign currency borrowings; and
exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned or likely to occur, which form part of the net investment in a foreign operation, are recognised in the foreign currency translation reserve in the consolidated financial statements and recognised in profit or loss on disposal of the net investment.

Foreign operations

On consolidation, the assets and liabilities of the consolidated entity’s overseas operations are translated at exchange rates prevailing at the reporting date. Income and expense items are translated at the average exchange rates for the period unless exchange rates fluctuate significantly. Exchange differences arising, if any, are recognised in the foreign currency translation reserve, and recognised in profit or loss on disposal of the foreign operation.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity on or after the date of transition to Australian Accounting Standards are treated as assets and liabilities of the foreign entity and translated at exchange rates prevailing at the reporting date.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

(e) Goods and services tax

Revenues, expenses and assets are recognised net of the amount of goods and services tax (‘GST’), except:

where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
for receivables and payables which are recognised inclusive of GST.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables.

Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(f) Goodwill

Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cashgenerating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

(g) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax

Deferred tax is accounted for using the comprehensive statement of financial position liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and joint ventures except where the consolidated entity is able to control the reversal of the temporary differences and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realised or settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/Group intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the Statement of Comprehensive Income, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill or excess.

Tax consolidation

The company and all its wholly-owned Australian resident entities are part of a tax-consolidated group under Australian Taxation Law. IRESS Market Technology Limited is the head entity in the tax-consolidated group. Tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the taxconsolidated group using the ‘stand alone taxpayer’ approach. Current tax liabilities and assets and deferred tax assets arising from unused tax losses and tax credits of the members of the tax-consolidated group are recognised by the company (as head entity in the tax-consolidated group).

Due to the existence of a tax funding arrangement between the entities in the tax consolidated group, amounts are recognised as payable to or receivable by the company and each member of the group in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the tax consolidated group in accordance with the arrangement. Further information about the tax funding arrangement is detailed in Note 4 to the financial statements. Where the tax contribution amount recognised by each member of the tax consolidated group for a particular period is different to the aggregate of the current tax liability or asset and any deferred tax asset arising from unused tax losses and tax credits in respect of that period, the difference is recognised as a contribution from (or distribution to) equity participants.

(h) Intangible assets

Intangible assets acquired in a business combination

All potential intangible assets acquired in a business combination are identified and recognised separately from goodwill where they satisfy the definition of an intangible asset and their fair value can be measured reliably.

Amortisation is provided on identifiable intangibles and is calculated on a straight line basis so as to write off the net cost of each asset over its expected useful life to its estimated residual value.

The following estimated useful lives are used in the calculation of amortisation of identifiable intangibles.

Computer software 1 year to 5 years

 Customer list 2 years to 3 years

Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in Profit or Loss when the asset is derecognised.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

(i) Business combinations

Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration for each acquisition is measured at the aggregate of the fair values (at the date of exchange) of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred.

Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments.

All other subsequent changes in the fair value of contingent consideration classified as an asset or liability are accounted for in accordance with relevant Standards.

The acquiree’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition under AASB 3 “Business Combinations” are recognised at their fair value at the acquisition date.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the consolidated entity reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date

(j)

Impairment of assets

At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually and whenever there is an indication that the asset may be impaired.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.

Goodwill is tested for impairment annually and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed.

(k) Leases

Operating lease payments are recognised as an expense on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

In the event that lease incentives are received to enter into operating leases, such incentives are recognised as a liability. The aggregate benefits of incentives are recognised as a reduction of rental expense on a straight-line basis, except where another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

(l) Payables

Trade payables and other accounts payable are recognised when the consolidated entity becomes obliged to make future payments resulting from the purchase of goods and services.

(m) Principles of consolidation

The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the consolidated entity, being the company (the parent entity) and its subsidiaries as defined in AASB 127 ‘Consolidated and Separate Financial Statements’. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. If, after reassessment, the fair values of the identifiable net assets acquired exceed the cost of acquisition, the deficiency is credited to profit and loss in the period of acquisition.

The consolidated financial statements include the information and results of each subsidiary from the date on which the company obtains control and until such time as the company ceases to control such entity.

In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the consolidated entity are eliminated in full.

(n) Plant and equipment

Plant and equipment and leasehold improvements are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on plant and equipment and is calculated on a straight line basis so as to write off the net cost of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.

Useful life

The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period.

The following estimated useful lives are used in the calculation of depreciation.

	Leasehold improvements	3 years
	Computer equipment	3 years
	Furniture and fittings	3 years
	Office equipment	3 years

(o) Provisions

Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Dividends

A provision is only recognised for dividends when they have been declared, determined or publicly recommended by the directors.

(p) Revenue recognition

Rendering of services

Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances.

Revenue from a contract to provide services is recognised by reference to the stage of completion of the contract. The stage of completion of the contract is determined by reference to the proportion of the term of the delivery of services that has expired.

Dividend and interest revenue

Dividend revenue is recognised on a receivable basis. Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.

(q) Share based payments

Equity settled share based payments are measured at fair value at the date of grant. Fair value is measured using a Monte Carlo simulation model. The expected life used in the model has been adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straightline basis over the vesting period, based on the consolidated entity’s estimate of shares that will eventually vest.

The share based payments expense arising from the share rights plans (refer Notes 36 to 38) operated by IRESS, are considered equity settled share based payment transactions in which IRESS receives goods or services as consideration for equity instruments of IRESS.

(r) Computer software development expenditure

Where the underlying intellectual property rights are owned by the consolidated entity, all expenses incurred on computer software development are expensed as incurred. Computer software acquired through an acquisition, or expenses incurred for licensed third party software are capitalised and amortised over the useful life or licence term as applicable.

(s) Financial instruments issued

Debt and equity instruments

Debt and equity instruments are classified as either liabilities or as equity in accordance with the substance of the contractual arrangement.

Transaction costs on the issue of equity instruments

Transaction costs arising on the issue of equity instruments are recognised directly in equity as a reduction of the proceeds of the equity instruments to which the costs relate. Transaction costs are the costs that are incurred directly in connection with the issue of those equity instruments and which would not have been incurred had those instruments not been issued.

Interest and dividends

Interest and dividends are classified as expenses or as distributions of profit consistent with the statement of financial position classification of the related debt or equity instruments or component parts of compound instruments.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

(t) Adoption of new and revised Accounting Standards

In the current year the Consolidated Entity has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board (the AASB) that are relevant to its operations and effective for annual reporting periods beginning on 1 January 2011.

The adoption of all new and revised Standards and Interpretations did not affect the amounts reported for the current or prior periods. In addition, the new and revised Standards and Interpretations have not had a material impact and not resulted in change to the Consolidated Entity’s presentation of or disclosure in these financial statements.

At the date of authorisation of the financial report, the following Standards and Interpretations were on issue but not yet effective:

AASB 9 ‘Financial Instruments’ (December 2009), AASB 2009-11 ‘Amendments to Australian Accounting Standards arising from AASB 9’
AASB 9 ‘Financial Instruments’ (December 2010), AASB 2010-7 ‘Amendments to Australian Accounting Standards arising from AASB 9 (December 2010)’
AASB 10 ‘Consolidated Financial Statements’
AASB 11 ‘Joint Arrangements’
AASB 12 ‘Disclosure of Interests in Other Entities’
AASB 13 ‘Fair Value Measurement’ and related AASB 2011-8 ‘Amendments to Australian Accounting Standards arising from AASB 13’
AASB 119 ‘Employee Benefits’ (2011), AASB 2011-10 ‘Amendments to Australian Accounting Standards arising from AASB 119’ (2011) and AASB 2011-11 ‘Amendments to AASB 119 (September 2011) arising from Reduced Disclosure Requirements’
AASB 127 ‘Separate Financial Statements’ (2011)
AASB 128 ‘Investments in Associates and Joint Ventures’ (2011)
AASB 1053 ‘Application of Tiers of Australian Accounting Standards’ and AASB 2010-2 ‘Amendments to Australian Accounting Standards arising from Reduced Disclosure Requirements’

Applies to annual reporting periods beginning on or after 1 January 2013

Applies on a modified retrospective basis to annual reporting periods beginning on or after 1 January 2013

Applies to annual reporting periods beginning on or after 1 January 2013

Applies to annual reporting periods beginning on or after 1 July 2013 but may be early adopted for annual reporting period beginning on or after 1 July 2009

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

 AASB 1054 ‘Australian Additional Disclosures’, AASB 2011-1 ‘Amendments to Australian Accounting Standards arising from the TransTasman Convergence Project’ and AASB 2011-2 ‘Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project – Reduced Disclosure Requirements’

 AASB 2010-6 ‘Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets’

AASB 2010-8 ‘Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets’
AASB 2011-4 ‘Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements’

 AASB 2011-6 ‘Amendments to Australian Accounting Standards – Extending Relief from Consolidation, the Equity Method and Proportionate Consolidation – Reduced Disclosure Requirements’

AASB 2011-7 ‘Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements standards’
AASB 2011-9 ‘Amendments to Australian Accounting Standards - Presentation of Items of Other Comprehensive Income’

AASB 1054 - Applies to annual reporting periods beginning on or after 1 July 2011

AASB 2011-1 - Applies to annual reporting periods beginning on or after 1 July 2011

AASB 2011-2 - Applies to annual reporting periods beginning on or after 1 July 2013

Applies to annual periods beginning on or after 1 July 2011

Applicable to annual periods beginning on or after 1 January 2012

Applicable to annual reporting periods beginning on or after 1 July 2013

Applies to annual reporting periods beginning on or after 1 July 2013

Applicable to annual reporting periods beginning on or after 1 July 2012, with early adoption permitted

The Directors have not assessed the impact of the adoption of these Standards and Interpretations in future periods on the financial statements of the consolidated entity.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

CONSOLIDATED	CONSOLIDATED
2011	2010
$’000	$’000

2 PROFIT BEFORE INCOME TAX EXPENSES

Profit before income tax expense includes the following items of revenue and expense.

2 PROFIT BEFORE INCOME TAX EXPENSES Profit before income tax expense includes the following items of revenue and expense.	2011 $’000 2010 $’000
REVENUE Sales revenue Rendering of services Other revenue Interest revenue Total revenues from ordinary activities EXPENSES Net transfers to/(from) bad and doubtful debts provisions arising from Other entities Depreciation of non–current assets Plant and equipment Amortisation of non–current assets Computer software Other intangibles Operating lease rental expenses Minimum lease payments Interest Expense (a) Net foreign exchange (gain)/loss Sales of assets in the ordinary course of business have given rise to the following (profits)/losses Plant and equipment	204,526 179,811 232 (226)
	204,758 179,585
	1,795 3,488
	206,553 183,073
	882 (722) 2,931 3,798 18,018 11,034 1,638 266 4,277 3,555 214 45 575 321 (6) (3)

(a) Includes $0.207m (2010: nil) non-cash interest expense recognised on deferred consideration payable on the Peresys transaction.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

3 EMPLOYEE RELATED EXPENSES Employee related expenses can be broken down as follows Total monetary based expense (a) Share based payment expense (b) Total employee related expense	CONSOLIDATED
	2011 $’000 2010 $’000
	72,635 57,190 7,090 6,900
	79,725 64,090

(a) Total monetary based expense comprises salary and fees, bonuses, superannuation and other benefits. Contributions to superannuation and similar post employment arrangements amounted to $4.350m (2010: $3.468m) for the consolidated entity.

(b) Expense recognised in accordance with AASB 2 ‘Share Based Payment’. This expense is a function of both the value and duration of the instruments granted. The expense recognised in 2011 represents a combination of share grants made in 2011 and in prior years.

4 INCOME TAX

INCOME TAX RECOGNISED IN PROFIT OR LOSS

4 INCOME TAX INCOME TAX RECOGNISED IN PROFIT OR LOSS
TAX EXPENSE COMPRISES Current tax expense/(income) Adjustments recognised in the current year in relation to the current tax of prior years Effect of changes in tax rates and laws Deferred tax expense/(income) relating to the origination and reversal of temporary differences Effect of different tax rates Total tax expense The prima facie income tax expense on pre-tax accounting profit from operations reconciles to the income tax expense in the financial statements as follows. Profit from continuing operations Income tax expense calculated at 30% Non deductible expenses / non assessable income Deductible share based payment expenses not previously recognised Effect of different tax rates Effect on deferred tax balances due to the change in income tax rate from 32% to 28.5% on our Canadian operations Effect on deferred tax balances due to the change in income tax rate from 30% to 28% on our New Zealand operations (Over)/under provision of income tax in previous year Income tax expense	20,859 19,373 (87) 119 426 18 (3,033) (1,969) 654 (193)
	18,819 17,348
	60,160 67,827 18,048 20,348 978 767 (1,200) (3,711) 654 (193) 425 18 1 – (87) 119
	18,819 17,348

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period.

INCOME TAX RECOGNISED DIRECTLY IN EQUITY

During both the current and prior periods no current or deferred amounts were charged directly to equity.

CURRENT TAX ASSETS AND LIABILITIES

CURRENT TAX ASSETS AND LIABILITIES
CURRENT TAX ASSETS Tax refund receivable attributable to Entities in the tax-consolidated group Other entities CURRENT TAX PAYABLES Income tax payable attributable to Parent entity Other entities DEFERRED TAX BALANCES DEFERRED TAX ASSETS COMPRISE Tax losses - revenue Temporary differences DEFERRED TAX LIABILITIES COMPRISE Temporary differences	CONSOLIDATED
	2011 $’000 2010 $’000
	1,731 1,600 60 50
	1,791 1,650
	(6,740) (9,617) (3,510) (1,424)
	(10,250) (11,041)
	(8,459) (9,391)
	4,379 2,530 6,741 3,733
	11,120 6,263
	(1,426) (1,431)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Deferred tax assets/(liabilities) arise from the following.

2011 GROSS DEFERRED TAX LIABILITIES Other financial assets Sundry receivables GROSS DEFERRED TAX ASSETS Doubtful debts Other financial assets Plant and equipment Payables Provisions Other liabilities 2010 GROSS DEFERRED TAX LIABILITIES Other financial assets Sundry receivables GROSS DEFERRED TAX ASSETS Doubtful debts Other financial assets Plant and equipment Payables Provisions Other liabilities	CONSOLIDATED
	OPENING BALANCE $000 CHARGED TO INCOME $000 CHARGED TO EQUITY $000 ACQUISITIO NS/DISPOSA LS $000 EXCHANGE DIFFERENC ES $000 CHANGES IN TAX RATE $000 CLOSING BALANCE $000
	(1,392) (1) – (27) – (1) (1,421) (39) 34 – – – – (5)
	(1,431) 33 – (27) – (1) (1,426)
	320 (152) – 17 – (8) 177 1,204 233 – – – – 1,437 516 2,860 – – – (90) 3,286 336 245 – 136 – (131) 586 944 109 – 89 – (89) 1,053 413 (295) – 84 – – 202
	3,733 3,000 – 326 – (318) 6,741
	(3,080) 1,688 – – – – (1,392) (33) (6) – – – – (39)
	(3,113) 1,682 – – – – (1,431)
	494 (174) – – – – 320 2,540 (1,336) – – – – 1,204 (1,442) 1,972 – – – (14) 516 336 – – – – – 336 1,284 (340) – – – – 944 237 176 – – – – 413
	3,449 298 – – – (14) 3,733

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

UNRECOGNISED DEFERRED TAX BALANCES

There are no deferred tax assets which have not been brought to account as assets.

TAX CONSOLIDATION

(a) Relevance of Tax Consolidation to the Consolidated Entity

The company and its wholly-owned Australian resident entities have formed a tax-consolidated group with effect from 14 March 2003 and are therefore taxed as a single entity from that date. The head entity within the taxconsolidated group is IRESS Market Technology Limited. The members of the tax-consolidated group are identified at Note 30. The tax consolidated group does not include the IRESS Market Technology Equity Plan Trust.

(b) Nature of Tax Funding Arrangements and Tax Sharing Agreements

Refer to accounting policy Note 1(g).

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

5 EARNINGS PER SHARE

5 EARNINGS PER SHARE
Basic earnings per share Diluted earnings per share BASIC EARNINGS PER SHARE The earnings and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows. Earnings used in the calculation of basic earnings per share reconciles to profit attributable to the members of the parent entity in the statement of comprehensive income $ Weighted average number of ordinary shares (a) No.	2011 CENTS PER SHARE 2010 CENTS PER SHARE
	32.644 40.335 32.589 40.016
	2011 ’000 2010 ’000
	41,341 50,479 126,642 125,148

(a) Performance rights issued by the company are considered to be potential ordinary shares and are therefore excluded from the weighted average number of ordinary shares used in the calculation of basic earnings per share. Where dilutive, potential ordinary shares are included in the calculation of diluted earnings per share.

DILUTED EARNINGS PER SHARE

The earnings and weighted average number of ordinary shares used in the
calculation of diluted earnings per share are as follows.
Earnings used in the calculation of diluted earnings per share reconciles to
profit attributable to the members of the parent entity in the statement of
comprehensive income	$	41,341	50,479
Weighted average number of ordinary shares (refer to footnote (a) above)	No.	126,856	126,147
Weighted average number of ordinary shares used in the calculation of
diluted earnings per share reconciles to the weighted average number of
ordinary shares used in the calculation of basic earnings per share as
follows.
Weighted average number of ordinary shares used in the calculation of
basic EPS	No.	126,642	125,148
Shares deemed to be issued for no consideration in respect of performance
rights (i.e. the dilutive impact of performance rights in existence during the
year that were exercisable at below the weighted average market price) (a)	No.	214,012	998,945
Weighted average number of converted, lapsed, or cancelled potential
ordinary shares used in the calculation of diluted earnings per share	No.	–	–
Right to purchase ordinary shares pursuant to the employee share scheme

(a) The dilutive impact of future vestings of granted performance rights has been derived assuming the relative ranking of IRESS to its peer group as measured at 31 December 2011 continues at that level through to the final vesting date for the applicable performance right.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

6 CURRENT RECEIVABLES Trade receivables Allowance for doubtful debts Sundry receivables and prepayments MOVEMENT IN THE ALLOWANCE FOR DOUBTFUL DEBTS Opening balance Additions Provision acquired through business combination Amounts written off as uncollectible Provision reversed Closing balance	CONSOLIDATED
	2011 $’000 2010 $’000
	12,731 10,883 (627) (858)
	12,104 10,025
	3,817 1,463
	3,817 1,463
	858 1,703 573 – 62 – (866) (94) – (751)
	627 858

The consolidated entity’s policy requires customers to pay within 30 days from date of invoice. All credit and recovery risks associated with trade receivables have been provided for in the statement of financial position. The provision in respect of trade and sundry receivables is determined with regard for historical write-offs and specifically identified customers. Other balances in other receivables do not contain impaired assets and are not past due.

An analysis of trade receivables as at 31 December 2011 showing receivables ‘past due but not impaired’ and receivables ‘considered impaired’ is as follows.

0 – 30 days 31 – 60 days 61 – 90 days 91+ days Total	CONSOLIDATED PDNI (a) 2011 $ 2010 $ 8,430 7,117 2,390 1,721 761 482 523 705 12,104 10,025	CONSOLIDATED CI (b)
		2011 $ 2010 $
		144 137 10 76 41 14 432 631
		627 858

(a) PDNI – past due not impaired. (b) CI – considered impaired.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

7 OTHER CURRENT FINANCIAL ASSETS

Other assets

CONSOLIDATED	CONSOLIDATED
2011	2010
$’000	$’000
668	280

8 PLANT AND EQUIPMENT CONSOLIDATED 2011

CONSOLIDATED 2011
GROSS CARRYING AMOUNT (COST) Balance at beginning of financial year Additions Additions through business combination Net foreign currency exchange differences Disposals Balance at end of financial year ACCUMULATED DEPRECIATION Balance at beginning of financial year Disposals Net foreign currency exchange differences Depreciation expense Balance at end of financial year NET BOOK VALUE At 31 December 2011	LEASEHOL D IMPROVE- MENTS $’000 FURNITURE & FITTINGS $’000 COMPUTER EQUIPMEN T $’000 OFFICE EQUIPMEN T $’000 TOTAL $’000
	6,209 1,642 13,573 278 21,702 576 209 4,808 18 5,611 8 34 156 13 211 (60) (76) (461) (18) (615) (83) (108) (905) (31) (1,127)
	6,650 1,701 17,171 260 25,782
	(5,574) (1,497) (10,376) (187) (17,634) 82 104 899 30 1,115 33 62 332 14 441 (324) (121) (2,430) (56) (2,931)
	(5,783) (1,452) (11,575) (199) (19,009)
	867 249 5,596 61 6,773

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

CONSOLIDATED 2010

CONSOLIDATED 2010
GROSS CARRYING AMOUNT (COST) Balance at beginning of financial year Additions Additions through business combination Net foreign currency exchange differences Disposals Balance at end of financial year ACCUMULATED DEPRECIATION Balance at beginning of financial year Disposals Net foreign currency exchange differences Depreciation expense Balance at end of financial year NET BOOK VALUE At 31 December 2010	LEASEHOL D IMPROVE- MENTS $’000 FURNITURE & FITTINGS $’000 COMPUTER EQUIPMEN T $’000 OFFICE EQUIPMEN T $’000 TOTAL $’000
	6,198 1,622 11,028 260 19,108 24 26 2,680 15 2,745 2 – 12 3 17 (15) (6) (84) – (105) – – (63) – (63)
	6,209 1,642 13,573 278 21,702
	(4,173) (1,100) (8,574) (117) (13,964) – – 60 – 60 8 4 58 (2) 68 (1,409) (401) (1,920) (68) (3,798)
	(5,574) (1,497) (10,376) (187) (17,634)
	635 145 3,197 91 4,068

Aggregate depreciation allocated, whether recognised as an expense or capitalised as part of the carrying amount of other assets during the year. Leasehold improvements Furniture and fittings Computer equipment Office equipment	CONSOLIDATED
	2011 $’000 2010 $’000
	324 1,409 121 401 2,430 1,920 56 68
	2,931 3,798

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

9 COMPUTER SOFTWARE GROSS CARRYING AMOUNT (COST) Balance at beginning of financial year Additions (a) Additions through business combination (Note 23) Net foreign currency exchange differences Adjustment – short term software licence (b) Adjustment – fully written down software (c) Disposals Balance at end of financial year ACCUMULATED AMORTISATION Balance at beginning of financial year Adjustment – short term software licence (b) Adjustment – fully written down software (c) Disposals Net foreign currency exchange differences Amortisation expense Balance at end of financial year NET BOOK VALUE At 31 December Aggregate amortisation allocated, whether recognised as an expense or capitalised as part of the carrying amount of other assets during the year	CONSOLIDATED
	2011 $’000 2010 $’000
	78,348 78,235 41,052 1,748 64 158 (587) (128) (1,221) (1,299) – – (306) (366)
	117,350 78,348
	(62,173) (52,932) 1,221 1,299 – – 305 366 684 128 (18,018) (11,034)
	(77,981) (62,173)
	39,369 16,175 18,018 11,034

(a) Primarily made up of software acquired from Peresys (Proprietary) Limited for $39.335 (refer Note 23)

(b) Short-lived third party software licence written down.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

10 GOODWILL AND INTANGIBLES

GOODWILL GROSS CARRYING AMOUNT

10 GOODWILL AND INTANGIBLES GOODWILL GROSS CARRYING AMOUNT
Balance at beginning of the financial year Additional amounts recognised from business combinations occurring during the period Purchase price adjustment Effect of foreign currency exchange differences Balance at end of financial year There are no accumulated impairment losses. ALLOCATION OF GOODWILL TO CASH GENERATING UNITS	CONSOLIDATED
	2011 $’000 2010 $’000
	31,234 29,722 12,896 1,985 – (292) (3,993) (181)
	40,137 31,234

Goodwill has been allocated for impairment testing purposes to the following cash generating units; Financial Markets – Canada, Financial Markets – South Africa, Wealth Management – Australia & New Zealand, Wealth Management – South Africa and Wealth Management – Asia.

In accordance with AASB136 ‘Impairment of Assets’, impairment testing was completed as at 31 December 2011 and no impairment of goodwill was indicated.

The carrying amount of goodwill allocated to cash generating units that are significant individually or in aggregate is as follows:

follows:
Financial Markets – Canada (a) (b) Financial Markets – South Africa (a) (c) Wealth Management – Australia & New Zealand (a) Wealth Management – South Africa (a) (b) Wealth Management – Asia (a) (b) Balance at end of financial year	CONSOLIDATED
	2011 $’000 2010 $’000
	8,155 8,680 10,493 – 15,179 15,179 4,403 5,390 1,907 1,985
	40,137 31,234

(a) refer Note 25 for a description of the operations of these cash generating units

(b) movement represents only net exchange rate differences arising during the period.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

IMPAIRMENT TESTING ASSUMPTIONS

The following assumptions were adopted in the assessment of indicators of impairment as at 31 December 2011 for each of the cash generating units; importantly these assumptions do not seek to represent directors’ valuations of these businesses, and there is an inherent level of conservatism in the assumptions adopted:

The recoverable amount of the cash generating unit has been determined based on a value in use calculation using monthly cash flow projections based on the budgets approved by management for the twelve months ending 31 December 2012, the monthly cashflows for the subsequent four years (‘projection period’), and a terminal value at the end of the projection period.
Zero revenue growth is assumed during the projection period.
Wages, operating costs and depreciation (as a proxy for capital expenditure) are assumed to grow on a partially fixed, partially variable basis with revenue.
A terminal annual growth factor of 2% is assumed.
A discount rate of 15% has been assumed.
Where applicable the exchange rate prevailing as at 31 December 2011 is assumed to continue.

For the Financial Markets – South Africa cash generating unit, the above assumptions were adopted, together with a notional charge to the cash generating unit for use of intellectual property (Software) formerly owned by Peresys (Pty) Ltd, and now owned by the ultimate parent entity.

For the Wealth Management – Asia cash generating unit, the above assumptions were adopted, together with a period of revenue growth during the projection period.

INTANGIBLES GROSS CARRYING AMOUNT

The movement in the intangibles balance represents the addition of intangibles resulting from a business combination (refer Note 24) and amortisation of these assets in accordance with their anticipated useful lives (refer Note 2).

11 DEFERRED TAX ASSETS Temporary differences attributable to Parent entity Entities in the tax consolidated group (Note 30) Other entities (a) Tax losses – other entities	CONSOLIDATED
	2011 $’000 2010 $’000
	5,504 5,135 1,344 (1,153) (107) (249) 4,379 2,530
	11,120 6,263

(a) Wholly owned subsidiaries that are not entities in the tax consolidated group.

12 OTHER NON-CURRENT FINANCIAL ASSETS

Investment in shares at fair value 46 50

Investment in shares represents numerous minimum shareholding parcels in ASX listed stapled securities and property trusts held for the purposes of managing IRESS’ capture and recording of corporate actions in these securities.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

13 CURRENT PAYABLES Trade payables Sundry creditors and accruals Trade payables and other creditors are non-interest bearing liabilities. The consolidated entity generally processes trade creditor payments in accordance with the supplier’s trading terms. 14 CURRENT TAX PAYABLES Income tax payable attributable to Parent entity Other entities	CONSOLIDATED
	2011 $’000 2010 $’000
	10,175 6,646
	10,175 6,646
	6,025 6,614
	6,025 6,614
	6,740 9,617 3,510 1,424
	10,250 11,041

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

15 CURRENT PROVISIONS Employee benefits (Note 26) Dividends Restructuring and termination costs Provision for additional payment arising on the acquisition of subsidiaries DIVIDENDS Opening balance Additional provisions recognised Reductions arising from payments/other sacrifices of future economic benefits Closing balance (a) RESTRUCTURING AND TERMINATION COSTS Opening balance Additional provisions recognised Reductions arising from payments/other sacrifices of future economic benefits Closing balance PROVISION FOR ADDITIONAL PAYMENT ARISING ON THE ACQUISITION OF SUBSIDIARIES Opening balance Reductions arising from payments/other sacrifices of future economic benefits Closing balance	CONSOLIDATED
	2011 $’000 2010 $’000
	3,487 2,736 41 39 300 36 99 99
	3,927 2,910
	39 40 52,440 43,643 (52,438) (43,644)
	41 39
	36 145 264 – – (109)
	300 36
	99 391 – (292)
	99 99

(a) The provision for dividends represents the aggregate amount of dividends declared, determined or publicly recommended on or before the reporting date, which remain undistributed at the reporting date, regardless of the extent to which they are expected to be paid in cash. At 31 December 2011, the balance represents unpresented dividend cheques.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

16 NON-CURRENT PROVISIONS Employee benefits (Note 26) Provision for third party software licence Provision for additional payment arising on the acquisition of subsidiaries PROVISION FOR ADDITIONAL PAYMENT ARISING ON THE ACQUISITION OF SUBSIDIARIES Opening balance Provision for additional payment arising on the acquisition of subsidiaries Reductions arising from payments/other sacrifices of future economic benefits Non-cash interest expense Net foreign currency exchange difference Closing balance	CONSOLIDATED
	2011 $’000 2010 $’000
	3,891 2,175 3,379 3,379 2,532 –
	9,802 5,554
	– – 3,872 – (1,010) – 207 – (537) –
	2,532 –

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

17 ISSUED CAPITAL ISSUED CAPITAL 127,036,010 fully paid ordinary shares (2010: 126,018,142) FULLY PAID ORDINARY SHARE CAPITAL Balance at beginning of financial year Issue of shares to IRESS Market Technology Equity Plan Trust (’Trust’) pursuant to share plans (a) Balance at end of financial year	2011 NO. ‘000 $’000 126,018 75,898 1,018 – 127,036 75,898	CONSOLIDATED 2011 $’000 2010 $’000 75,898 75,898 2010 NO. ‘000 $’000 123,812 75,898 2,206 – 126,018 75,898

(a) Additional issued capital arising from the issue of these shares in the years ended 31 December 2011 and 31 December 2010 amounted to $26 and $134 respectively.

PERFORMANCE RIGHTS

Performance rights have been granted to the Managing Director, executives and employees of the Consolidated Entity. These performance rights will vest over time subject to satisfying the criteria set out in the relevant performance rights plan rules. Once vested, the holder of the performance right is required to pay $1 per series to exercise the performance right (refer Notes 36 and 37).

Performance rights granted to Mr Peter Dunai vested in August 2011. Mr Dunai is currently Chairman but at the time of grant was Managing Director. In accordance with the plan rules Mr Dunai was required to pay $1 to exercise these performance rights.

Pursuant to performance rights granted in prior years which vested during the year, 334,548 shares (491,000 shares less 156,452 treasury shares) were subscribed for by the Trust.

DEFERRED SHARES

Pursuant to deferred shares granted to the Managing Director, executives and employees (refer Note 37) during the year which have not yet vested, 590,000 new shares were subscribed for by the Trust.

DEFERRED SHARE RIGHTS

Pursuant to deferred share rights granted in prior years which vested during the year, 93,320 shares were subscribed for by the Trust.

Following cancellations of share rights granted to employees, as at 31 December 2011, the Trust holds 23,200 treasury shares.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

18 RESERVES RESERVES COMPRISE Share based payments reserve Foreign currency translation reserve MOVEMENTS IN SHARE BASED PAYMENTS RESERVES Balance at beginning of financial year Share based payments expense Balance at end of financial year The share based payment reserve arises on recognition of the share based payment expense following the grant of share rights to employees (including the Managing Director) under the applicable share rights plan. MOVEMENTS IN FOREIGN CURRENCY TRANSLATION RESERVES Balance at beginning of financial year Translation of foreign operations Balance at end of financial year Exchange differences relating to foreign currency monetary items forming part of the net investment in a foreign operation, and the translation of foreign operations, are brought to account by entries made directly to the foreign currency translation reserve, as described in Note 1(d). 19 RETAINED EARNINGS Balance at beginning of financial year Net profit attributable to members of the parent entity Dividends provided for or paid Balance at end of financial year	CONSOLIDATED
	2011 $’000 2010 $’000
	39,184 32,094 (10,060) (4,306)
	29,124 27,788
	32,094 25,194 7,090 6,900
	39,184 32,094
	(4,306) (3,964) (5,754) (342)
	(10,060) (4,306)
	33,929 27,093 41,341 50,479 (52,440) (43,643)
	22,830 33,929

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

20 PARENT ENTITY DISCLOSURE

20 PARENT ENTITY DISCLOSURE
FINANCIAL POSITION ASSETS Current assets Non current assets Total assets LIABILITIES Current liabilities Non current liabilities Total liabilities EQUITY Issued capital Retained earnings Share based payments reserve Foreign currency translation reserve Total Equity FINANCIAL PERFORMANCE Profit for the year Total comprehensive income CONTINGENT LIABILITIES The parent entity has given a letter of support to guarantee that the following wholly owned subsidiaries will meet their debts as and when they fall due. The total liabilities of the wholly owned subsidiaries (excluding amounts owed to the parent entity) are: IRESS Data Pty Ltd IRESS Market Technology (NZ) Limited IRESS Asia Holdings Ltd IRESS Market Technology (Singapore) Pte Ltd IRESS Technology Limited	COMPANY
	2011 $’000 2010 $’000
	96,254 139,451 78,961 35,175
	175,215 174,626
	15,691 20,298 10,485 7,592
	26,176 27,890
	75,898 75,898 33,957 38,744 39,184 32,094 – –
	149,039 146,736
	35,204 44,511
	35,204 44,511
	– – 242 1,201 – – – – – – 242 1,201

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

21 DIVIDENDS

21 DIVIDENDS
FULLY PAID ORDINARY SHARES Recognised amounts Interim dividend Final dividend (b) Special dividend unfranked Unrecognised amounts Final dividend Special dividend unfranked	31 DECEMBER 2011 31 DECEMBER 2010
	CENTS PER SHARE	TOTAL $’000 CENTS PER SHARE	TOTAL $’000
	14.0 (a) 24.0 (c) 3.5 24.0 (e) –	17,785 14.0 (b) 30,244 21.0 (d) 4,411 – 52,440 30,489 24.0 (c) – 3.5 30,489	17,642 26,001 –
			43,643
			30,244 4,411
			34,655

(a) Franked to 90% at a 30% tax rate.

(b) Fully franked at a 30% tax rate.

(d) This relates to the dividend paid based on the prior year’s results. Where applicable, amounts provided have been amended to reflect the actual dividend paid.

(e) Franked to 83% at a 30% tax rate. The estimated value of the 2011 final dividend (that will be declared subsequent to 31 December 2011) has been calculated based on 127,036,010 ordinary shares, comprising shares on issue as at 31 December 2011.

Adjusted franking account balance (a)	COMPANY
	2011 $’000 2010 $’000
	10,859 4,196

(a) The franking account balance is maintained on a tax paid basis in accordance with the simplified dividend system. It has not been adjusted for the unrecognised partially franked final dividend above.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

22 NOTES TO THE STATEMENT OF CASH FLOWS RECONCILIATION OF CASH For the purposes of the statement of cash flows, cash includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial year as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows Cash RECONCILIATION OF PROFIT ATTRIBUTABLE TO MEMBERS OF THE PARENT ENTITY TO NET CASH FLOWS FROM OPERATING ACTIVITIES Profit for the period (Profit)/loss on sale of non–current assets Depreciation and amortisation of non–current assets Doubtful debts expense Net foreign exchange (gain) / loss Equity settled share based payments Increase/(decrease) in deferred tax balances Changes in net assets and liabilities, net of effect of acquisitions (Increase)/decrease in assets current trade receivables other current assets Increase/(decrease) in liabilities current trade payables other non–current liabilities other provisions current tax liability Net cash from operating activities
	CONSOLIDATED
	2011 $’000 2010 $’000
	48,925 99,063
	41,341 50,479 (6) (3) 22,587 15,098 881 (722) 575 321 7,090 6,900 (4,862) (1,971) (4,424) (2,549) (13,199) (354) 2,940 2,132 1,717 85 1,017 134 (941) 6,006
	54,716 75,556

SUBSIDIARIES ACQUIRED DURING THE YEAR

During the year, the consolidated entity acquired some subsidiaries (refer Note 24). The net outflow on acquisition was $3.412m.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

23 ACQUISITION OF SOFTWARE

On 18 January 2011, IRESS Market Technology Limited acquired software from Peresys (Proprietary) Ltd. The software was acquired for ZAR 264.000m (AUD 39.335m), which is considered to be fair value.

24 ACQUISITION OF BUSINESSES

PERESYS (PROPRIETARY) LTD

On 20 January 2011, IRESS Market Technology Limited acquired 100% of Peresys (Proprietary) Ltd (‘Peresys’). Peresys is a South African based technology solutions provider to the financial markets, specialising in building and running FIX enabled connected trading communities across all asset classes, including equities, fixed interest and derivatives.

Peresys was acquired for ZAR 66.209m (AUD 9.706m). The transaction included an upfront cash payment of ZAR 39.155m (AUD 5.834m), short term deferred consideration of ZAR 7.296m (AUD 1.044m) and performance based payments based around the growth of the business of up to ZAR 19.758m (AUD 2.828m), most of which is payable at the end of three years.

In addition, up to an additional ZAR 10.000m (AUD 1.464m) is available to certain staff, with payment based on performance of the business over three years.

Details on the assets and liabilities acquired are as follows.

performance of the business over three years. Details on the assets and liabilities acquired are as follows.
FAIR VALUE OF NET ASSETS ACQUIRED	TOTAL FAIR VALUE RECOGNISED ON ACQUISITION $’000
CURRENT ASSETS Cash and cash equivalent assets Receivables NON-CURRENT ASSETS Plant and equipment Customer list Deferred tax assets CURRENT LIABILITIES Payables Current tax liabilities Provisions NON-CURRENT LIABILITIES Provisions Fair value of identifiable assets acquired Goodwill arising on acquisition Purchase price	3,432 1,337 275 5,659 299 (2,270) (10,138) (318) (1,466)
	(3,190)
	12,896
	9,706

Other than for the customer list recognised, there were no fair value adjustments to the net book value of the assets acquired.

In its acquisition of Peresys, IRESS Market Technology Limited paid a premium to the fair value of the net assets acquired. Goodwill was recognised on this acquisition, as other possible classes of intangible assets did not meet the

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

criteria for recognition as at the date of acquisition. Goodwill represents, amongst other things, the anticipated future earnings capacity of the assets acquired.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Since acquisition, Peresys has contributed revenue of AUD 15.320m to the Consolidated Entity. Had this business combination been effected at 1 January 2011, the revenue of the Consolidated Entity from continuing operations would have been AUD 205.149m, and the profit for the full year from continuing operations would have been AUD 41.470m.

In determining the ‘pro-forma’ revenue and profit of the Consolidated Entity had Peresys been acquired at the beginning of the current reporting period, the directors have evenly apportioned the revenue and profit of Peresys over this period on the basis of there being no abnormal items within those results.

CONTINGENT LIABILITIES AND CAPITAL COMMITMENTS

Notwithstanding the funding support letter described below, the Directors are of the opinion that there is no change to the Consolidated Entity’s contingent liabilities or capital commitments arising from the Peresys acquisition.

As part of the transaction documents a Funding Support Letter was required to indemnify the former Peresys directors. The document requires the consolidated entity to meet certain future obligations of Peresys crystallised in the transaction.

The following table sets out the cash flow impact of the Peresys acquisition.

transaction. The following table sets out the cash flow impact of the Peresys acquisition.
Total consideration Provision for second payment (a) Cash paid Cash and cash equivalent balances acquired Net cash flow on acquisition date	TOTAL COST OF ACQUISITION $’000
	9,706 (2,862)
	6,844
	(3,432)
	3,412

(a) Includes $0.537m foreign currency movement and $0.207 non-cash interest expense.

25 SEGMENT INF0RMATION

The consolidated entity operates in two areas – Financial Markets and Wealth Management. Any transactions directly between segments are charged on an arm’s length basis.

FINANCIAL MARKET SERVICES

The consolidated entity’s financial market services division provides information, trading, compliance, order management, portfolio systems and related tools to cash equity participants in Australia, New Zealand, Canada and Asia. During the period the consolidated entity, through the acquisition of Peresys (refer Note 24), commenced operations in South Africa.

On 20 January 2011, IRESS Market Technology Limited acquired Peresys (Pty) Ltd (‘Peresys’) and its subsidiaries. Peresys provides technology solutions to the financial markets in South Africa.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

WEALTH MANAGEMENT SERVICES

In this division the consolidated entity provides financial planning systems and related tools to wealth management professionals located in Australia, New Zealand, South Africa and Asia. In addition this segment recently established operations in the United Kingdom.

SEGMENT REVENUES

SEGMENT REVENUES
FINANCIAL MARKETS Australia & New Zealand Canada South Africa Asia Total financial markets WEALTH MANAGEMENT Australia & New Zealand South Africa Asia United Kingdom Total wealth management Total of all segments Interest revenue Eliminations Unallocated Consolidated	EXTERNAL SALES 2011 $’000 2010 $’000 108,919 104,538 23,954 23,488 15,320 – 1,061 613 149,254 128,639 49,122 43,783 5,991 7,072 159 317 – – 55,272 51,172 204,526 179,811	TOTAL
		2011 $’000 2010 $’000
		108,919 104,538 23,954 23,488 15,320 – 1,061 613
		149,254 128,639
		49,122 43,783 5,991 7,072 159 317 – –
		55,272 51,172
		204,526 179,811
		1,795 3,488 – – 232 (226)
		206,553 183,073

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

SEGMENT PROFITS

SEGMENT PROFITS
FINANCIAL MARKETS Australia & New Zealand Canada South Africa Asia Total financial markets WEALTH MANAGEMENT Australia & New Zealand South Africa Asia United Kingdom Total wealth management services Total of all segments Share based payment expense (Refer Note 3 (b)) Other contribution Earnings before interest, taxes, depreciation and amortisation Depreciation and amortisation expense Interest (a) Profit before income tax expense Income tax expense Profit attributable to the members of the parent entity	2011 $’000 2010 $’000
	56,289 58,904 8,197 7,843 5,543 – (1,454) (586)
	68,575 66,161
	20,289 18,636 1,689 2,468 (1,320) (1,121) (119) –
	20,539 19,983
	89,114 86,144
	(7,090) (6,900) (858) 239
	81,166 79,483
	(22,587) (15,098) 1,581 3,442
	60,160 67,827
	(18,819) (17,348)
	41,341 50,479

(a) Includes $0.207m (2010: nil) non-cash interest expense recognised on deferred consideration payable on the Peresys transaction, and other sundry contribution of $0.006m (2010: $0.003m).

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

SEGMENT ASSETS AND INFORMATION

Australia & New Zealand Canada South Africa Asia United Kingdom Total consolidated	2011 $’000 CASH RECEIVABLE S PAYABLES 38,113 9,031 (8,745) 1,817 1,738 (901) 8,729 1,312 (474) 266 23 (55) – – – 48,925 12,104 (10,175)	2010 $’000
		CASH RECEIVABLE S PAYABLES
		90,868 7,329 (5,367) 1,275 1,906 (993) 6,771 552 (246) 149 238 (40) – – –
		99,063 10,025 (6,646)

OTHER SEGMENT INFORMATION

OTHER SEGMENT INFORMATION
DEPRECIATION & AMORTISATION Australia & New Zealand Canada South Africa Asia United Kingdom Total ADDITIONS TO PLANT AND EQUIPMENT Australia & New Zealand Canada South Africa Asia United Kingdom Total ADDITIONS TO SOFTWARE Australia & New Zealand (a) Canada South Africa Asia United Kingdom Total	CONSOLIDATED
	2011 $’000 2010 $’000
	19,893 13,898 577 673 1,980 455 137 72 – –
	22,587 15,098
	4,113 1,870 557 752 552 49 389 74 – –
	5,611 2,745
	40,991 1,745 – – 29 – 32 161 – –
	41,052 1,906

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

(a) Primarily made up of software acquired from Peresys (Proprietary) Limited for $39.335m (refer Note 23)

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

ADDITIONS TO PLANT AND EQUIPMENT THROUGH BUSINESS COMBINATIONS Australia & New Zealand Canada South Africa Asia United Kingdom Total TOTAL NON CURRENT ASSETS Australia & New Zealand Canada South Africa Asia United Kingdom Total 26 EMPLOYEE BENEFITS THE AGGREGATE EMPLOYEE BENEFIT LIABILITY RECOGNISED AND INCLUDED IN THE FINANCIAL STATEMENTS IS AS FOLLOWS Provision for employee benefits Current (Note 15) Non–current (Note 16)	CONSOLIDATED
	2011 $’000 2010 $’000
	– – – – 211 – – 17 – –
	211 17
	71,409 41,116 9,613 10,280 18,818 5,805 2,312 2,129 – –
	102,152 59,330
	3,487 2,736 3,891 2,175
	7,378 4,911

Number of employees (full time equivalent basis) and directors at end of the financial year, excluding staff on maternity leave or other unpaid leave.	2011 NO. 2010 NO.
	659 512

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

27 REMUNERATION OF AUDITORS Auditor of the parent entity (a) Related practice of parent entity auditor (b)	CONSOLIDATED
	2011 $ 2010 $
	225,000 257,700 44,859 19,159
	269,859 276,859

(a) The auditor of IRESS Market Technology Limited is Deloitte Touche Tohmatsu.

(b) Remuneration paid to international associates of Deloitte Touche Tohmatsu Australia located in Canada, New Zealand, South Africa, Singapore, Hong Kong and Ireland.

There were no amounts paid/payable to the auditor for non-audit services.

28 CONTINGENT LIABILITIES

The Directors are of the opinion that there are no other contingent liabilities that need to be disclosed at the reporting date.

29 LEASES

LEASING ARRANGEMENTS

Operating leases relate to office facilities with lease terms of between 2 to 10 years. The consolidated entity does not have an option to purchase the leased asset at the expiry of the lease period. Melbourne, Sydney, Brisbane and Perth office lease arrangements are supported by bank guarantees. At 31 December 2011, the total rental bank guarantees in place amounted to $2,610,953 (2010: $2,415,539) .

office lease arrangements are supported by bank guarantees. At 31 December 2011, the place amounted to $2,610,953 (2010: $2,415,539).	total rental bank guarantees in
NON-CANCELLABLE OPERATING LEASES Not longer than 1 year Longer than 1 year and not longer than 5 years	CONSOLIDATED
	2011 $’000 2010 $’000
	4,200 3,783 10,679 10,356
	14,879 14,139

In respect of non-cancellable operating leases, the following liabilities have been recognised.

MAKE GOOD PROVISIONS
Current	327	164
Non-current	–	–

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

30 SUBSIDIARIES

30 SUBSIDIARIES
NAME OF ENTITY COUNTRY OF INCORPORATION / PRINCIPAL ACTIVITY	OWNERSHIP INTEREST
	2011 % 2010 %
Parent entity IRESS Market Technology Limited (a) Australia Subsidiaries IRESS Market Technology (NZ) Limited (c) New Zealand / Provision of sales and related services to users of IRESS technologies in New Zealand IRESS Wealth Management Pty Ltd (b) Australia / Provision of financial planning technology and related services IRESS Canada Holdings Limited Canada / Holding company IRESS Data Pty Ltd (b) (c) Australia / Data procurement IRESS Asia Holdings Limited (c) Hong Kong / Provision of financial market and financial planning technology and related services IRESS Market Technology (Singapore) Pte Ltd (c) Singapore / Provision of financial market and financial planning technology and related services IRESS South Africa (Australia) Pty Ltd (b) Australia / Software licensing company Peresys (Proprietary) Ltd (d) South Africa / Provision of financial market technology and related services IRESS Technology Limited (c) (e) United Kingdom / Provision of financial market and financial planning technology and related services	100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 – 100 –

(a) IRESS Market Technology Limited is the head entity within the tax consolidated group.

(b) This company and its Australian subsidiaries (if any) are members of the tax consolidated group.

(d) Acquired 20 January 2011.

(e) Established 23 September 2011.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

In relation to its Australian and New Zealand wealth management operations, IRESS Wealth Management Pty Ltd holds the following controlled entities.

the following controlled entities.
NAME OF BUSINESS ACQUIRED / INCORPORATED COUNTRY OF INCORPORATION / PRINCIPAL ACTIVITY	OWNERSHIP INTEREST
	2011 % 2010 %
PlanTech Holdings Pty Ltd Australia / Holding company for PlanTech companies below PlanTech Consulting Group Pty Ltd Australia / Provider of risk (life insurance) information and PlanTech’s financial planning services Planning Resources Group Pty Ltd Australia / No active operations, currently receives small amount of passive income associated with former PlanTech business VisiPlan Pty Ltd Australia / Provision of financial planning technology and related services TransActive Systems Pty Ltd Australia / Provision of mortgage information and related services Dealer Management Systems Pty Ltd Australia / Provision of financial planning technology and related services FundData Pty Ltd Australia / Provision of financial planning technology and related services	100 100 100 100 100 100 100 100 100 100 100 100 100 100

In relation to its South African wealth management operations, IRESS Wealth Management Pty Ltd holds the following controlled entities

controlled entities
NAME OF BUSINESS ACQUIRED / INCORPORATED COUNTRY OF INCORPORATION / PRINCIPAL ACTIVITY	OWNERSHIP INTEREST
	2011 % 2010 %
IRESS Spotlight Wealth Management Solutions (RSA) Pty Ltd Australia / Provision of financial planning technology and related services Spotlight Wealth Management (Pty) Ltd South Africa / Provision of financial planning technology and related services Advicenet Advisory Services (Pty) Ltd South Africa / Provision of financial planning technology and related services IRESS Wealth Management (RSA) (Proprietary) Limited South Africa / Dormant	100 100 100 100 100 100 100 100

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

IRESS Canada Holdings Limited holds the following controlled entities. NAME OF BUSINESS ACQUIRED / INCORPORATED COUNTRY OF INCORPORATION / PRINCIPAL ACTIVITY	OWNERSHIP INTEREST
	2011 % 2010 %
IRESS (Ontario) Limited Canada / Holding company KTG Technologies Corp. Canada / Dormant IRESS Market Technology Canada LP Canada / Provision of financial market technology and related services IRESS (LP) Holdings Corp. Canada / General partner to IRESS Market Technology Canada LP	100 100 100 100 100 100 100 100

IRESS Market Technology (Singapore) Pte Ltd holds the following controlled entity. NAME OF BUSINESS ACQUIRED / INCORPORATED COUNTRY OF INCORPORATION / PRINCIPAL ACTIVITY	OWNERSHIP INTEREST
	2011 % 2010 %
Sentryi Pte Ltd (a) Singapore / Provision of financial market and financial planning technology and related services	100 100

(a) Subsidiary provided with a letter of support IRESS Market Technology (Singapore) Pte Ltd with consent from Parent entity

Peresys (Proprietary) Ltd holds the following controlled entities. NAME OF BUSINESS ACQUIRED / INCORPORATED COUNTRY OF INCORPORATION / PRINCIPAL ACTIVITY	OWNERSHIP INTEREST
	2011 % 2010 %
Peresys Derivatives (Proprietary) Ltd South Africa / Dormant Peresys Software Limited Ireland / Provision of services to Peresys (Proprietary) Ltd	100 – 100 –

Within the IRESS group there are unsecured funding arrangements in place.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

31 SUBSEQUENT EVENTS

There has not been any other matter or circumstance, other than that referred to in the financial statements or notes thereto, that has arisen since the end of the financial year, that has significantly affected, or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in future financial years.

32 FINANCIAL INSTRUMENTS

Capital Risk Management

The consolidated entity manages its capital to ensure that entities in the consolidated entity will be able to continue as going concerns while maximising the return to stakeholders through the optimisation of the debt and equity balance. The consolidated entity’s overall strategy remains unchanged from 2010.

The capital structure of the consolidated entity consists of net cash (cash and cash equivalents), and equity (comprising issued capital, reserves and retained earnings as detailed in notes 17 to 19).

The consolidated entity is not subject to any externally imposed capital requirements.

The directors review the capital structure of the consolidated entity on a periodic basis.

Financial Risk Factors

The company and consolidated entity undertakes transactions in a limited range of financial instruments including cash assets and receivables.

These transactions and activities result in exposure to a number of financial risks, including market risk (interest rate risk, foreign currency risk), credit risk, and liquidity risk. These financial risks are managed such to mitigate inappropriate volatility of financial performance and maintain an optimal capital structure that provides returns for shareholders, provides benefits for other stakeholders and an appropriate cost of capital.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Details of foreign currency risk, liquidity risk, interest rate risk, credit risk and fair values are detailed below.

(a) Foreign Currency Risk

i) Impact on Australian dollar equivalent reported earnings

Entities within the Consolidated Entity transact in their local currencies, which differ from the Consolidated Entity’s presentation currency of Australian Dollars. Whilst a movement in these local currencies when compared with the Australian Dollar does not impact underlying profit or loss (as differences are recognised in comprehensive income through the foreign currency translation reserve), movements do impact on the Australian Dollar equivalent reported earnings. These movements therefore impact on the perceived performance of the company when viewed in Australian Dollars.

To assist users in understanding the impact exchange rate movements had on reported revenues from the year ended 31 December 2011 and 31 December 2010, the financial performance of business units (as set out in Note 25) can be viewed as follows:

TOTAL SEGMENT REVENUES FINANCIAL MARKETS Australia & New Zealand Canada South Africa Asia Total financial markets WEALTH MANAGEMENT Australia & New Zealand South Africa Asia United Kingdom Total wealth management Total of all segments	LC (a) LOCAL CURRENCY (b)	TOTAL (AUD) (c)
	2011 ‘000 2010 ‘000	2011 ‘000 2010 ‘000
	AUD 108,919 104,538 CAD 24,606 22,189 ZAR 114,210 – AUD 1,061 613 AUD 49,122 43,783 ZAR 44,323 47,327 AUD 159 317 GBP – –	108,919 104,538 23,954 23,488 15,320 –- 1,061 613
		149,254 128,639
		49,122 43,783 5,991 7,072 159 317 – –-
		55,272 51,172
		204,526 179,811

(a) LC is the local currency unit for the segment used in management accounts. New Zealand results not reported separately and instead are converted to AUD in management accounts. For the company’s Asia operations, the two primary underlying currencies are SGD and HKD, but these are not reported separately in management accounts and instead are converted to AUD

(b) These are the segment revenues as reflected in management accounts.
(c) Reported segment revenues as reflected in Note 25.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

ii) Impact on Profit or Loss

Foreign currency risk refers to the risk that the value of a recognised asset or liability, or the future value of a foreign currency denominated income stream, will fluctuate due to changes in foreign currency rates.

The immediate exposure of the company to foreign currency risk arises primarily from loans to wholly owned foreign subsidiaries. These investments can give rise to realised and unrealised gains and losses in the company due to loans to subsidiaries with the following currencies, Canadian dollar, New Zealand dollar, South African rand, Singapore dollar, Hong Kong dollar and the Pound Sterling.

NET SUBSIDIARY INTERCOMPANY BALANCES BY CURRENCY	TOTAL LOCAL CURRENCY
	2011 ‘000 2010 ‘000
Payable / (receivable) by parent company AUD NZD CAD ZAR SGD HKD GBP	(49,299) (44,660) 319 1,551 (4,796) (3,773) (31,950) – (3,042) (5,369) (3,484) (2,324) (50) –

The consolidated entity does not hedge the effect of the exchange rate movements on these loans. These loans are interest bearing (refer Note 33).

The carrying value of the company’s intercompany receivables or payables is based on the prevailing exchange rates at year end and unrealised gains and losses arise from movements in the subsidiaries’ local currency.

The effect of a change in the exchange rate on unrealised gains/losses and reported financial performance is as follows.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

MOVEMENT IN EXCHANGE RATE TO AUD	COMPANY UNREALISED GAIN/(LOSS)
	2011 AUD ‘000 2010 AUD ‘000
Strengthened by NZD cent Weakened by NZD cent Strengthened by CAD cent Weakened by CAD cent Strengthened by ZAR rand Weakened by ZAR rand Strengthened by SGD cent Weakened by SGD cent Strengthened by HKD cent Weakened by HKD cent Strengthened by GBP penny Weakened by GBP penny	(2) (9) 2 9 43 39 (44) (39) 5 – (5) – 17 35 (18) (35) 1 – (1) – 1 – (1) –

The primary currency risk for subsidiaries of the consolidated entity is the underlying local currency for that subsidiary. In assessing foreign currency risk management, the emerging businesses segments (Financial Markets in Asia, and Wealth Management in Asia and United Kingdom) are anticipated to be net borrowers in local currency from the company until these businesses reach a level of scale. Thereafter they should be net generators of cash in local currency. The remaining business segments are already net generators of cash in local currency.

The company does not currently hedge the impact of changes in foreign currency rates on the value of future cashflows from its foreign subsidiaries. A material enduring change in relative exchange rates could have a significant effect on the Australian dollar equivalent value of these operations.

The consolidated entity regularly reassesses market conditions, the financial risk, the terms of these loans, and the appropriateness of mitigating exposure using hedges such to optimise return on capital.

During the month of January 2011, the company entered into a cashflow hedge in the form of two forward foreign currency contracts directly associated with the amounts payable to Peresys (Proprietary) Ltd and its shareholders. These forward contracts had terms of 15 and 10 days respectively, and were 100% effective. No other forward contracts were entered into during the year, and there are no open foreign currency contracts at 31 December 2011 (2010: nil).

(b) Liquidity Risk

Liquidity risk includes the risk that, as a result of deficiencies in managing operational liquidity, the company has insufficient funds to settle a transaction; or it is forced to sell financial assets at a value less than what they are worth.

The consolidated entity’s liquidity is regularly monitored. The consolidated entity’s financial liabilities comprise trade payables and other creditors, which are non-interest bearing liabilities. Refer to note 14 for details regarding contractual maturity.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

IRESS currently has surplus funds invested in highly liquid instruments. The consolidated entity as at 31 December 2011 does not hold any standing debt facilities (2010: nil). The consolidated entity expects to meet its obligations from a combination of existing cash reserves, operating cashflows and the proceeds of maturing financial assets.

(c) Interest Rate Risk

The cash of the consolidated entity comprises highly liquid deposits that earn interest at a variable rate.

Sensitivity of cash deposits to movements in the interest rate can be demonstrated using assumptions that are not necessarily relevant to the future financial position of the company, and assuming a constant deposit amount based on 31 December 2011 year end balances. The effect of a change in the interest rate, interest income and reported financial performance is as follows:

reported financial performance is as follows:
	CONSOLIDATED
MOVEMENT IN INTEREST RATE	$’000
1%	489

The consolidated entity regularly reassesses market conditions, the financial risk, and the terms of deposits so as to optimise return on capital.

(d) Credit Risk

Credit risk refers to the risk a counterparty will default on its contractual obligations resulting in a financial loss to the consolidated entity. The consolidated entity (other than in relation to loans with wholly owned subsidiaries) does not have any significant credit risk to any single counterparty or group of counterparties having similar characteristics.

The company has a material exposure through receivables to clients in the financial services and wealth management industries. The company actively manages this exposure.

Credit risk on cash and cash equivalent instruments is limited because the counterparties are banks with high credit ratings assigned by international credit rating agencies.

The carrying amount of financial assets recorded in the financial report, net of any allowances for losses, represents the consolidated entity’s maximum exposure to credit risk without taking account of the value of any collateral or other security obtained.

(e) Fair Value

The carrying amount of financial assets and financial liabilities for the company and consolidated entity recorded in the financial statements represents their respective net fair values, determined in accordance with the accounting policies disclosed in Note 1 to the financial statements.

33 RELATED PARTY DISCLOSURES

(a) Equity Interests in Related Parties

Details of the percentage of ordinary shares held in subsidiaries are disclosed in Note 30 to the financial statements.

(b) Key Management Personnel Disclosures

Details of key management personnel disclosures are set out in Note 34 to the financial statements.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

(c) Transactions within the Wholly Owned Group

The wholly owned group includes:

the ultimate parent entity in the wholly owned group; and
wholly owned subsidiaries.

The ultimate parent entity in the wholly owned group is IRESS Market Technology Limited.

All loans advanced to and payable to subsidiaries are unsecured and subordinate to other liabilities.

During the financial year, the consolidated entity recognised a net receivable of $1,614,961 (2010: $1,699,300) from its wholly owned subsidiaries for their taxes consolidated for the current period.

The company has a series of arrangements with subsidiaries which support the basis on which charges between entities are made.

(d) Transactions with Other Related Parties

During the year, Spotlight Wealth Management (Pty) Ltd rented premises at commercial rates from Spotlight House (Pty) Ltd, an entity associated with Mr P Moretonas, an employee of Spotlight Wealth Management (Pty) Ltd. The amount paid was $161,322 (2010: $144,771).

(e) Transactions with ASX Limited

ASX Limited (‘ASX’) owns 23,750,001 of the ordinary shares in IRESS. ASX is a major supplier of Australian equity market data to IRESS.

All transactions with ASX are conducted on a full arm’s length basis.

Total fees paid to ASX for Australian equity and related market data and associated services in 2011 were $12,194,966 (2010: $11,822,525). Depending on the particular data set or service being subscribed for, these fees are typically based on either:

a per user royalty type charge; or
a fixed annual amount.

IRESS, as a listed entity on the Australian Stock Exchange, pays ASX listing and other related fees at the scheduled rate.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

34 DIRECTORS AND KEY MANAGEMENT PERSONNEL DISCLOSURES

(a) Directors and key management personnel

The directors of IRESS Market Technology Limited were:

Mr P Dunai (Chairman, Chairman of Nomination and Remuneration Committee until 5 May 2011);
Mr A Walsh (Managing Director)
Mr J Killen (Chairman of the Audit Committee, Non-executive Director; retired from the Board 5 May 2011);
Mr B Burdett (Non-executive Director);
Ms J Seabrook (Non-executive Director, Lead Independent Director, Chair of Nomination and Remuneration Committee since 5 May 2011);
Mr J Cameron (Non-executive Director); and
Mr J Hayes (Non-executive Director, appointed 10 June 2011, Chairman of the Audit Committee since 10 June 2011);

The executives of the IRESS Market Technology Limited consolidated entity during the year were:

Mr S Bland (Chief Financial Officer and Company Secretary);
Mr J Davies (President & Chief Executive Officer, Financial Markets Canada);
Mr P Ferguson (Group General Counsel and Company Secretary);
Ms K Gross (General Manager, Products, Sales & Marketing); and
Mr D Walker (Chief Technical Officer).

The Nomination and Remuneration Committee, in accordance with the Company’s Nomination and Remuneration Charter reviews the remuneration packages of all directors and executives on an annual basis. Remuneration packages are reviewed and adjusted by a performance factor to reflect changes in the performance of the Company.

The non-executive directors are appointed in accordance with the Company’s constitution, with directors required to stand for re-election every three years. No termination payments arise should a non executive director resign, retire or fail to be re-elected. Termination payments would arise should directors elect to terminate this arrangement prior to expiry. Generally, the minimum notice period for any executive is three months, and the maximum is six months. Except for termination payments arising from the circumstances outlined below, payments arising at the discretion of the board, or payments in lieu of notice, no termination payments are payable to executives. Further details on employment terms for executives are set out on pages 24 and 25.

Contractual terms associated with the employment of the Managing Director and executives could, in certain circumstances, give rise to additional future payments particularly with regard to situations involving redundancy or termination without cause.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

The aggregate compensation of the key management personnel of the consolidated entity and the company is set out below.

out below.
Short term employee benefits Post-employment benefits Other long term benefits Termination benefits Share-based payment	CONSOLIDATED
	2011 $’000 (a) 2010 $’000
	3,800,289 4,269,612 163,795 247,069 – – – – 2,010,051 2,458,997
	5,974,135 6,975,678

(a) There were 11 key management personnel in 2011, some of whom have a part year of service (2010:14).

(b) Director and key management personnel equity holdings

Fully paid ordinary shares issued by IRESS Market Technology Limited to directors and key management personnel or to a related party of them

			RECEIVED ON
			EXERCISING
		GRANTED AS	OF			BALANCE
	OPENING	COMPENSATI	SHARE	NET OTHER	CLOSING	HELD
	BALANCE	ON	RIGHTS	CHANGE	BALANCE	NOMINALLY
2011	NO.	NO.	NO. (a)	NO.	NO.	NO.
DIRECTORS
Mr P Dunai	690,000	–	200,000	–	890,000	–
Mr A Walsh	70,950	–	81,000	(80,000)	71,950	–
Mr J Killen (b)	77,500	–	–	–	–	–
Mr B Burdett	100,000	–	–	–	100,000	–
Ms J Seabrook	20,000	–	–	–	20,000	–
Mr J Cameron	–	–	–	–	–	–
Mr J Hayes	–	–	–	4,600	4,600	–
EXECUTIVES
Mr S Bland	220,390	–	59,000	(9,000)	270,390	–
Mr J Davies (c)	–	–	–	–	–	–
Mr P Ferguson	–	–	–	–	–	–
Ms K Gross	183,110	–	44,500	–	227,610	–
Mr D Walker	417,260	–	54,000	–	471,260	–

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Fully paid ordinary shares issued by IRESS Market Technology Limited to directors and key management personnel or to a related party of them

			RECEIVED
			ON
		EXERCISING
		GRANTED AS	OF			BALANCE
	OPENING	COMPENSATIO	SHARE	NET OTHER	CLOSING	HELD
	BALANCE	N	RIGHTS	CHANGE	BALANCE	NOMINALLY
2010	NO.	NO.	NO. (a)	NO.	NO.	NO.
DIRECTORS
Mr N Hamilton	100,000	–	–	–	100,000	–
Mr P Dunai	30,625	–	659,375	–	690,000	–
Mr A Walsh	–	–	70,950	–	70,950	–
Mr J Killen	77,500	–	–	–	77,500	–
Mr B Burdett	80,000	–	–	20,000	100,000	–
Ms J Seabrook	20,000	–	–	–	20,000	–
Mr J Cameron	–	–	–	–	–	–
EXECUTIVES
Mr S Bland	170,500	–	61,390	(11,500)	220,390	–
Mr J Davies (c)	60,000	–	–	(60,000)	–	–
Ms K Gross	135,000	–	48,110	–	183,110	–
Mr A Rudy	5,000	–	43,400	(48,400)	–	–
Mr J Rudy	–	–	42,900	(42,900)	–	–
Mr D Walker	366,400	–	60,390	(9,530)	417,260	–
Ms T Vigilante	–	–	27,280	–	27,280	–

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Performance Rights issued by IRESS Market Technology Limited to directors and key management personnel, or to a related party of them

	OPENING			CLOSING
	UNVESTED	GRANTED AS	VESTED DURING	UNVESTED
	BALANCE	COMPENSATION	THE PERIOD	BALANCE
	NO.	NO.	NO. (b)	NO.
2011
DIRECTORS (a)
Mr P Dunai	200,000	–	(200,000)	–
Mr A Walsh	281,000	300,000	(56,000)	525,000
EXECUTIVES
Mr S Bland	123,690	31,040	(46,000)	108,730
Mr J Davies	55,850	15,430	(20,000)	51,280
Mr P Ferguson	–	–	–	–
Ms K Gross	99,170	28,520	(33,000)	94,690
Mr D Walker	115,690	32,710	(42,000)	106,400
2010
DIRECTORS (a)
Mr P Dunai	759,375	–	(559,375)	200,000
Mr A Walsh	207,950	125,000	(51,950)	281,000
EXECUTIVES
Mr S Bland	138,390	31,690	(46,390)	123,690
Mr J Davies	65,000	15,850	(25,000)	55,850
Ms K Gross	108,110	28,170	(37,110)	99,170
Mr A Rudy	88,400	19,370	(33,400)	74,370
Mr J Rudy	89,400	23,770	(33,400)	79,770
Mr D Walker	130,390	31,690	(46,390)	115,690
Ms T Vigilante	9,280	17,610	(9,280)	17,610

(a) During the year, other than as noted above, there were no outstanding performance rights issued to directors or a related party of them.

(b) Retired 5 May 2011

(c) Upon vesting, performance rights are exercisable. With the exception of Mr Davies, all performance rights which vested during the relevant year were exercised prior to the year end in both 2011 and 2010.

Details of the terms and conditions of the Employee Performance Rights plan are set out in Note 36.

No amounts remain outstanding on performance rights exercised during the year.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Deferred shares /deferred share rights issued by IRESS Market Technology Limited to directors and key management personnel, or to a related party of them (a)

	OPENING		VESTED	CLOSING
	UNVESTED	GRANTED AS	DURING THE	UNVESTED
	BALANCE	COMPENSATION	PERIOD	BALANCE
	NO.	NO.	NO.	NO.
2011
DIRECTORS
Mr P Dunai	–	–	–	–
Mr A Walsh	54,000	30,000	(25,000)	59,000
EXECUTIVES
Mr S Bland	23,190	10,290	(13,000)	20,480
Mr J Davies	24,080	10,010	(13,000)	21,090
Mr P Ferguson	–	–	–	–
Ms K Gross	21,890	10,070	(11,500)	20,460
Mr D Walker	22,790	10,290	(12,000)	21,080
2010
DIRECTORS
Mr P Dunai	100,000	–	(100,000)	–
Mr A Walsh	44,000	29,000	(19,000)	54,000
EXECUTIVES
Mr S Bland	28,000	10,190	(15,000)	23,190
Mr J Davies	28,000	11,080	(15,000)	24,080
Ms K Gross	22,500	10,390	(11,000)	21,890
Mr A Rudy	18,000	6,590	(10,000)	14,590
Mr J Rudy	18,500	7,190	(9,500)	16,190
Mr D Walker	26,000	10,790	(14,000)	22,790
Ms T Vigilante	31,000	7,190	(18,000)	20,190

(a) During the year, other than as noted above, there were no outstanding deferred shares or deferred share rights issued to directors or a related party of them. With the exception of Mr Davies, directors and executives receive deferred shares.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

(c) Other transactions with Directors and key management personnel

During the year, there were no transactions with directors or key management personnel or their related parties other than transactions associated with the director’s or key management personnel’s compensation or equity holdings, which impacted on profit from ordinary activities before income tax, assets or liabilities.

35 SHARE BASED PAYMENTS

To assist in the attraction, retention and motivation of employees, the Company operates the following share based payment plans:

the Employee Performance Rights Plan;
the Employee Deferred Share Plan; and
the Employee Deferred Share Rights Plan.

Summaries of the rules governing the above plans are set out in Notes 36 to 38 respectively.

The per unit fair value of share rights granted to directors, executives and staff during the financial year has been derived based on the external valuation advice from PricewaterhouseCoopers Securities Limited. The valuation has been made using a Monte Carlo simulation option pricing model using standard option pricing inputs such as the underlying stock price, exercise price, expected dividends, expected risk free rates and expected share price volatility. In addition, the likely achievement of performance hurdles of the share rights (where applicable) has been taken into account.

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Set out below are the fair values of share rights (which were derived by PricewaterhouseCoopers Securities Limited) and the key inputs used in the pricing model, which were available during the year.

the year.
		SHARE
		PRICE ON				RISK-FREE	KEY			INDICATIVE
		GRANT		EXPECTED	DIVIDEND	INTEREST	PERFORMAN			VESTING	VALID
	GRANT	DATE	FAIR VALUE	VOLATILITY	YIELD	RATE	CE MEASURE	INTERIM	TERM	31/12/11	OUTSTANDING
SERIES (a)	DATE	$	$	%	%	%	(b)	VESTING	MONTHS	% (c)	31/12/11
May 2008 PR	7/5/08	6.26	3.85	35	4.3	6.4	A	No	36	100	–
Aug 2008 PR	19/8/08	6.15	3.69	35	4.3	5.7	A	No	36	100	–
May 2009 PR	7/5/09	6.52	3.90	35	4.3	3.9	A	No	36	77	299,000
May 2009 DSR	7/5/09	6.52	6.00	35	4.3	3.6	B	No	24	100	–
May 2009 DS	7/5/09	6.52	6.52	N / A	N / A	N / A	B	No	24	100	–
May 2010 PR	7/5/10	8.34	5.68	35	4.3	5.0	A	No	36	56	377,650
May 2010 DSR	7/5/10	8.34	7.67	35	4.3	4.7	B	No	24	100	71,280
May 2010 DS	7/5/10	8.34	8.34	N / A	N / A	N / A	B	No	24	100	561,570
May 2011*4 PR	9/5/11	9.23	5.79	30	4.3	5.2	A	No	48	–	150,000
May 2011*3 PR	9/5/11	9.23	5.87	30	4.3	5.2	A	No	48	–	150,000
May 2011 PR	9/5/11	9.23	5.96	30	4.3	5.2	A	No	36	–	267,640
May 2011 DSR	9/5/11	9.23	8.49	30	4.3	5.1	B	No	24	–	69,810
May 2011 DS	9/5/11	9.23	9.23	N/A	N/A	N/A	B	No	24	–	576,160

(a) PR refer Note 36, DS refer Note 37, DSR refer Note 38.

(b) A denotes series is benchmarked on modified ASX200 index, B denotes series is measured on ongoing employment and acceptable performance.

(c) Indicative vesting has been calculated based on ranking relative to the benchmark as at 31 December 2011. Actual vesting will be determined based on performance at the end of the vesting period. Deferred shares and deferred share rights are assumed to fully vest for this analysis.

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

The following table summarises movements in not-fully-vested share rights in place during the year.

		UNVESTED 1/1/11
		OR GRANTED
		DURING THE			UNVESTED
		YEAR	VESTED	CANCELLED	31/12/11
HOLDER	INCENTIVE PLAN	’000	’000	’000	’000
Director – P Dunai	August 2008 PR	200	(200)	–	–
Director – A Walsh	May 2008 PR	56	(56)	–	–
	May 2009 PR	100	–	–	100
	May 2009 DS	25	(25)	–	–
	May 2010 PR	125	–	–	125
	May 2010 DS	29	–	–	29
	May 2011*4 PR	150	–	–	150
	May 2011*3 PR	150	–	–	150
	May 2011 DS	30	–	–	30
Executives	May 2008 PR	141	(141)	–	–
	May 2009 PR	146	–	–	146
	May 2009 DSR	13	(13)	–	–
	May 2009 DS	37	(37)	–	–
	May 2010 PR	107	–	–	107
	May 2010 DSR	11	–	–	11
	May 2010 DS	31	–	–	31
	May 2011 PR	108	–	–	108
	May 2011 DSR	10	–	–	10
	May 2011 DS	31	–	–	31
Staff	May 2008 PR	94	(94)	–	–
	May 2009 PR	53	–	–	53
	May 2009 DSR	80	(80)	–	–
	May 2009 DS	498	(490)	(8)	–
	May 2010 PR	146	–	–	146
	May 2010 DSR	60	–	–	60
	May 2010 DS	501	(2)	(19)	480
	May 2011 PR	160	–	–	160
	May 2011 DSR	61	–	(1)	60
	May 2011 DS	523	–	(8)	515

100

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

The following table sets out the share rights of directors, executives and staff exercised during the year and the weighted average share price prevailing on the date of exercise.

INCENTIVE PLAN (a)	2011 QUANTITY WEIGHTED AVERAGE SHARE PRICE ($) – – – – 15,000 9.07 8,000 9.07 271,000 9.20 200,000 8.15 16,500 9.22 26,100 8.65 – – 551,868 9.20 1,980 7.91	2010
		QUANTITY WEIGHTED AVERAGE SHARE PRICE ($)
May 2005 PDPR May 2006 PDPR May 2006 PR May 2007 PR May 2008 PR August 2008 PR May 2008 DSR May 2009 DSR May 2008 DS May 2009 DS May 2010 DS		300,000 8.19 259,375 8.19 24,000 7.88 848,802 8.08 – – – – 40,000 8.72 – – 807,430 8.34 – – – –

(a) Calculated as the weighted average closing share price on the date(s) the share rights were exercised during the year.

36 SUMMARY OF THE EMPLOYEE PERFORMANCE RIGHTS PLAN

On 7 May 2003, the IRESS Employee Performance Rights Plan (the PR Plan) was established to assist in the attraction, retention and motivation of employees of the Company. This plan was modified on 26 March 2008 following the creation of the IRESS Market Technology Equity Plan Trust (the Trust).

The key terms of the PR Plan are set out below.

GENERAL RULES

(a) The PR Plan is open to full–time and part–time employees of an entity in the IRESS group.
(b) The Board will determine the quantum of performance rights issued under the PR Plan.
(c) The total number of unvested performance rights together with all other shares outstanding under the various employee share plans, must not exceed 5% of the total number of issued shares in that class at the time of the offer.
(d) The PR Plan will be administered by the trustee in accordance with the instructions of the Board. The Board may make further rules for the operation of the PR Plan which are consistent with the PR Plan.
(e) The PR Plan provides for the possibility of accelerated vesting of performance rights upon the occurrence of a specified ‘event’ (such as a takeover is made for the Company, a scheme of arrangement is proposed or the Company is wound up).
(f) Performance rights lapse in certain circumstances, including where:
i) the performance criteria have not been satisfied within the required time period;
ii) vested performance rights expire; or
iii) an employee or consultant ceases their employment with the Company. Refer to i) below for further details.

101

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

(g) Where an employee leaves the Company, other than for a qualifying reason, all unvested rights lapse. Where an employee leaves the Company as a result of a qualifying reason, performance rights granted in the last six months lapse but remaining unvested rights vest on a pro–rata basis having regard to the period which has elapsed between the issue of the performance rights to the employee and the employee leaving the Company. Finally, where in the Board's view there are special circumstances under which it would be unfair not to allocate shares or the cash equivalent to a departing employee, the Board has the capacity to make such an allocation of shares or cash.
(h) The quantum of performance rights issued to an employee under the PR Plan are modified in accordance with standard industry adjustments to reflect:
i) a bonus issue; or
ii) a reconstruction of the Company’s issued capital.
(i) Performance rights will not be quoted on the ASX, however upon issuance of shares in accordance with the PR Plan rules, the Company will immediately apply for quotation of those shares on the ASX.
(j) The exercise price for a performance right holder to subscribe for and be allotted, credited as fully paid, shares arising under the Plan, is $1, irrespective of the number of performance rights exercised on the applicable day. The $1 fee is payable each time a performance right holder subscribes for shares under the Plan.
(k) During the ‘restriction period’, any share provided on the exercise of a performance right is held on trust by the trustee. In addition to other restrictions the Board considers necessary to give effect to the restrictions, it may place a holding lock on these shares.
(l) Shares may be withdrawn from the Trust upon the submission and approval of a valid ‘withdrawal notice’.

PERFORMANCE CRITERIA

The following performance criteria shall apply to performance rights issued under the PR Plan.

Performance ranking

The Company’s performance ranking for a performance period is determined by reference to the total shareholder return of the Company during the performance period as compared to the total shareholder return for each company in a peer group of companies. The peer group of companies comprises the top 200 companies listed in the ASX/S&P 200 companies after excluding mining companies and listed property trusts. A peer company must have been in the ASX/S&P 200 companies for the entire performance period (i.e. new entrants and companies dropping out of the ASX/S&P 200 companies are excluded). The Company’s ranking within that group of companies at the end of the relevant performance period determines the number of performance rights in the particular tranche that become exercisable (if any) on the following basis.

PERFORMANCE RANKING RANGE	NUMBER OF PERFORMANCE RIGHTS EXERCISABLE.
Below 50th percentile	No rights exercisable.
50th percentile	50% of the rights in the tranche available to be exercised.
	Rights available in the tranche available to be exercised will be
	determined on a pro–rata basis between 50% and 100% depending on
51st percentile to 74th percentile	the Company’s percentile performance ranking.
75th percentile or higher	100% of rights in the tranche available to be exercised.

Total shareholder return in respect of a company in a performance period, is the increase in the value of a shareholder’s investment in that company during the performance period, on the basis that all dividends and other returns grossed up for franking credits, are immediately reinvested in the Company, at the closing price for the shares on the payment date of the dividend or other return.

Tranches

Performance rights granted in 2005 and subsequent years become available for exercise at the end of the third year based on the Company’s performance ranking for the performance period.

102

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Performance rights granted in prior periods were eligible for exercise in tranches over three years.

103

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

Performance period

For performance rights granted in 2005 and subsequent years the performance period is the period commencing on the commencement date and ending three years after the commencement date.

TERMS OF THE RIGHTS

(a) Rights may be exercised during a two year period from the date on which they become exercisable and to the extent they are not exercised within that period they will lapse.
(b) Should the performance criteria not be met in the performance period for that series, the Company’s ranking will be retested on a monthly basis for up to 6 months after the end of the performance period for that series.

37 SUMMARY OF THE EMPLOYEE DEFERRED SHARE PLAN

On 26 March 2008, the IRESS Employee Share Plan (the Deferred Share Plan) was established. The Deferred Share plan is broadly similar in operation to the Employee Performance Rights Plan outlined in Note 36.

Key areas of difference are as follows.

GENERAL RULES

(a) No exercise price is payable for a deferred share holder to subscribe for and be allotted, credited as fully paid, shares arising under the Plan;
(b) Participants are eligible to receive dividends and vote during the vesting period; and
(c) The vesting term and performance criteria are stipulated in the individual offering.

VESTING TERM AND CRITERIA

Deferred shares granted in May 2008, 2009 and 2010 have a two year vesting period, and performance criteria requiring satisfactory individual performance during the vesting period. There is no benchmarking against an external peer group of companies with graduated vesting based on relative ranking, as is the case for performance rights.

38 SUMMARY OF THE EMPLOYEE DEFERRED SHARE RIGHTS PLAN

On 26 March 2008, the IRESS Employee Deferred Share Rights Plan (the Deferred Share Rights Plan) was established. The Deferred Share Rights plan is very similar in operation to the Deferred Share Plan outlined in Note 37.

Key areas of difference are as follows.

GENERAL RULES

(a) Participants are not eligible to receive dividends or vote during the vesting period.

VESTING TERM AND CRITERIA

Deferred shares rights granted in May 2008, 2009 and 2010 have a two year vesting period, and performance criteria requiring satisfactory individual performance during the vesting period. As with deferred shares, there is no benchmarking against an external peer group of companies or graduated vesting based on relative ranking, as is the case for performance rights.

104

IRESS Market Technology Limited

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2011

39 SUMMARY OF THE IRESS NON-EXECUTIVE DIRECTOR SHARE PLAN

The IRESS Non-Executive Directors share plan (‘NED Plan’) was established following the Company’s Annual General Meeting in May 2008. As at 31 December 2011, and at the date of this report, no shares have been issued under the NED plan. The key terms of the NED Plan are set out below.

GENERAL RULES

(a) Participation in the NED Share Plan is voluntary.
(b) The maximum proportion of a participating non-executive director’s remuneration which may be provided in the form of shares is 50%.
(c) It is currently proposed that shares will be allocated to participants for prescribed periods (either quarterly or halfyearly) and in advance. If a participating director ceases to hold office during this period he or she will forfeit a pro rata portion of shares for that period.
(d) Once allocated, the shares will be held in trust on behalf of participating directors in accordance with the terms of the NED Share Plan until the earlier of:
i) a prescribed period from the date of allocation;
ii) cessation of office; or
iii) the occurrence of a specified ‘event’ (such as a takeover is made for the Company, a scheme of arrangement is proposed or the Company is wound up).
(e) During this period, participating directors will not be able to sell or otherwise deal in the shares.
(f) While the shares are held on trust, participating directors will be entitled to dividends and voting rights and may enjoy other rights accruing to the shares in common with other shareholders (e.g. rights to participate in bonus and rights issues).
(g) If shares are not able to be provided to a participating director for any reason (e.g. because of legal impediments applicable at the time), cash will be provided instead.

105

SHAREHOLDER INFORMATION

The following information reflects shareholdings at 31 January 2012.

DISTRIBUTION OF MEMBERS AND THEIR HOLDINGS

SIZE OF HOLDING	NUMBER OF ORDINARY SHAREHOLDERS SHARES NUMBER OF PERFORMANCE RIGHTS HOLDERS NUMBER OF DEFERRED SHARE HOLDERS NUMBER OF DEFERRED SHARE RIGHTS HOLDERS
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,00 – 100,000 100,001 and over Total	2,296 1,297,654 – 54 4 3,034 7,685,923 – 117 3 623 4,605,210 – 41 7 343 7,820,068 11 27 6 33 105,627,155 3 – –
	6,329 127,036,010 14 239 20

Number of shareholders with less than a marketable parcel 107

ORDINARY SHARE CAPITAL

127,036,010 fully paid ordinary shares are held by 6,329 shareholders
All issued ordinary shares carry one vote per share held

SHARE RIGHTS

1,244,290 performance rights held by 14 individual holders
1,117,170 deferred share held by 239 individual holders
141,090 deferred shares rights held by 20 individual holders
Only deferred shares carry a right to vote

TREASURY SHARES

23,200 treasury shares
Treasury shares have the right to vote and would be voted in accordance with the recommendation of the directors

106

IRESS Market Technology Limited

SHAREHOLDER INFORMATION

SUBSTANTIAL SHAREHOLDERS

SUBSTANTIAL SHAREHOLDERS
ORDINARY SHAREHOLDERS	FULLY PAID
	NUMBER PERCENTAGE
ASX Limited Hyperion Asset Management Limited Commonwealth Bank Group BlackRock Investment Management (Australia) Limited Total	23,750,001 18.70% 15,349,992 12.08% 7,223,772 5.69% 6,577,657 5.18%
	52,901,422 41.65%

TWENTY LARGEST SHAREHOLDERS OF QUOTED EQUITY SECURITIES

ORDINARY SHAREHOLDERS

FULLY PAID

NUMBER
PERCENTAGE

ASX Ltd
JP Morgan Nominees Australia Limited
National Nominees Limited
HSBC Custody Nominees (Australia) Limited
Citicorp Nominees Pty Limited
Pacific Custodians Pty Limited
Cogent Nominees Pty Limited
JP Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
Australian Foundation Investment Company Limited
Mirrabooka Investments Limited
UBS Wealth Management Australia Nominees Pty Ltd
M F Custodians Ltd
Argo Investments Limited
Navigator Australia Ltd
AMP Life Limited
Nulis Nominees (Australia) Limited
SmallCo Investment Manager Ltd
Invia Custodian Pty Limited
CS Fourth Nominees Pty Ltd

23,750,001
18.70%
22,382,448
17.62%
16,213,817
12.76%
14,222,487
11.20%
8,019,556
6.31%
4,472,330
3.52%
2,501,226
1.97%
2,213,516
1.74%
1,719,782
1.35%
1,655,291
1.30%
1,070,000
0.84%
870,047
0.68%
860,991
0.68%
791,884
0.62%
733,521
0.58%
412,635
0.32%
371,391
0.29%
367,086
0.29%
363,250
0.29%
339,270
0.27%

107

AUSTRALIA

ASIA

CANADA

NEW ZEALAND EUROPE - AFRICA

Email | [email protected] Web | www.iress.com

AI assistant

IRESS LIMITED — Annual Report 2011

65141_rns_2012-02-21_3a920d2d-133f-40bf-8116-e00c6d517a47.pdf

22 February 2012

ELECTRONIC LODGEMENT

IRESS 2011 Financial Results Report

2011 FINANCIAL REPORT

BOARD OF DIRECTORS

COMPANY SECRETARY

REGISTERED OFFICE

SHARE REGISTRY

BANKERS

AUDITORS

SOLICITORS

STOCK EXCHANGE LISTING

THE ANNUAL GENERAL MEETING

BOARD OF DIRECTORS

COMPANY SECRETARY

PRINCIPAL ACTIVITIES

REVIEW OF OPERATIONS

DIRECTORS’ REPORT

CHANGES IN OPERATIONS DURING THE YEAR

Establishment of Financial Market operations in South Africa

Establishment of Wealth Management operations in the United Kingdom

CHANGES IN STATE OF AFFAIRS

DIRECTORS’ REPORT

SUBSEQUENT EVENTS

FUTURE DEVELOPMENTS

DIVIDENDS

DIRECTORS’ MEETINGS

INDEMNIFICATION OF OFFICERS AND AUDITORS

AUDIT SERVICES

AUDITOR’S INDEPENDENCE DECLARATION

ROUNDING OFF AMOUNTS

AUDITED REMUNERATION REPORT

DIRECTORS’ REPORT

RELATIONSHIP BETWEEN COMPANY PERFORMANCE AND REMUNERATION

DIRECTORS AND KEY MANAGEMENT PERSONNEL DETAILS

SHARE RIGHTS

SHARE RIGHTS GRANTED TO, AND VESTING IN, DIRECTORS AND EXECUTIVES

SHARE RIGHTS EXERCISED BY DIRECTORS AND EXECUTIVES

DIRECTOR AND EXECUTIVE SHAREHOLDINGS

DIRECTORS’ REPORT

POLICY AND STRUCTURE

Non-executive directors’ remuneration

EXECUTIVE REMUNERATION

Philosophy

Fixed annual remuneration

DIRECTORS’ REPORT

Short term incentive remuneration

Longer term incentive remuneration

Performance criteria - Performance Rights

DIRECTORS’ REPORT

Performance under share based incentive plans

DIRECTORS’ REPORT

SPECIFIC REMUNERATION DETAILS

DIRECTORS’ REPORT

DIRECTORS’ REPORT

DIRECTORS’ REPORT

OUTLINE OF EMPLOYMENT CONTRACTS FOR THE MANAGING DIRECTOR AND EXECUTIVES

DIRECTORS’ REPORT

Independence Declaration: IRESS Market Technology Limited

CORPORATE GOVERNANCE

INTRODUCTION

1 BOARD RESPONSIBILITIES

2 ETHICAL STANDARDS AND DIVERSITY

3 RISK MANAGEMENT

CORPORATE GOVERNANCE STATEMENT

4 BOARD COMPOSITION

5 BOARD ACCESS TO INFORMATION AND INDEPENDENT ADVICE

6 APPOINTMENT TERM AND OTHER DIRECTORSHIPS

7 REMUNERATION

8 CONFLICT OF INTEREST AND LEAD INDEPENDENT DIRECTOR

CORPORATE GOVERNANCE STATEMENT

9 BOARD COMMITTEES

10 ACCOUNTABILITY AND AUDIT

11 NOMINATION AND REMUNERATION

12 CONTINUOUS DISCLOSURE

13 SECURITIES DEALINGS

CORPORATE GOVERNANCE STATEMENT

IRESS LIMITED Annual Report 2011