INTEGRATED RESEARCH LIMITED - Annual Report 2021

Integrated Research Ltd > ABN 76 003 588 449 Level 9, 100 Pacific Highway, North Sydney NSW 2060 Australia t: +61 (2) 9966 1066 e: [email protected]

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19 August 2021

ASX Market Announcements Office Australian Securities Exchange Limited

Dear Sir/Madam

ASX Market Announcement

In accordance with the ASX Listing Rules, Integrated Research Limited (ASX: IRI) encloses for release to the market:

Appendix 4E, and
Financial Report for the year ended 30 June 2021.

By authority of the Board

David Purdue Company Secretary Integrated Research Limited ABN: 76 003 588 449

www.ir.com

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Appendix 4E

Full year report

Name of entity

Appendix 4E Full yearreport Name ofentity	Appendix 4E Full yearreport Name ofentity	Appendix 4E Full yearreport Name ofentity

INTEGRATED RESEARCH LIMITED
ABN	Reportingperiod (yearended) 30 June 2021	Previous corresponding period (yearended)
76 003 588 449	30 June 2021	30 June 2020

For announcement to the market Extracts from this report for announcement to the market

For announcement to themarket Extracts from this report for announcement tothe market
	A$000
Revenues from ordinary activities Down Profit before tax attributable to members Down Profit after tax attributable to members Down	29% to 78,493 70% to 9,307 67% to 7,935
Netprofit for theperiod attributable to members Down	67% to 7,935
Dividends(distributions) Amount per security		Franked amountper security
Final dividend Nil Previous corresponding period 3.75¢			N/A 100%
Dividends consist of no conduit foreign income. Record date for determining entitlements to the dividend Date the dividend is payable
			N/A

			N/A

NTA backing		June 2021	June 2020 cents
		cents

Net tangible asset backing per ordinarysecurity			31.11
		31.00

Brief explanation of directional and percentage changes to profit:

Refer accompanying Market Release.

Audit

This report is based on accounts that have been audited

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Integrated Research Limited and Controlled Entities ABN 76 003 588 449

ASX CODE IRI

Financial Report

For the year ended 30 June 2021

Contents	Page
Directors’ Report	3
Remuneration Report	17
Corporate Governance	30
Financial Statements	37
Notes to the Financial Statements	42
Directors’ Declaration	76
Independent Auditor's Report	77
Lead Auditor’s Independence Declaration	83

Directors’ Report

The Directors present their report together with the Financial Statements of Integrated Research Limited (“the consolidated entity”), being the Company and its controlled entities, for the year ended 30 June 2021 and the Auditor’s Report thereon.

Review of operations and activities

Principal activities

Integrated Research Limited’s (the "Company" or “IR”) principal activities are the design, development, implementation and sale of systems and applications management computer software for business‐critical computing, Unified Communication networks and Payment networks.

Group overview

Integrated Research has a long heritage of providing performance monitoring, diagnostics and management software solutions for business‐critical computing environments.

Since its establishment in 1988, the Company has provided its Prognosis products to a cross section of large organisations requiring high levels of computing performance and reliability.

Prognosis is an integrated suite of monitoring and management software, designed to give an organisation’s management and technical personnel operational insight into and optimise the operation of their HP NonStop, distributed system servers, Unified Communications ("UC"), and Payment environments and the business applications that run on these platforms.

Integrated Research has developed its Prognosis products around a fault‐tolerant, highly distributed software architecture, designed to achieve high levels of functionality, scalability and reliability with a low total cost of ownership.

Integrated Research services customers in more than 60 countries through direct sales offices in the USA, UK, Germany, Singapore and Australia, and via a global, channel‐driven distribution network. Integrated Research’s customer base consists of many of the world’s largest organisations and includes major stock exchanges, banks, credit card companies, telecommunications carriers, technology companies, service providers and manufacturers.

The Company generates its revenue from licence fees, recurring maintenance, testing solutions and professional services (formerly referred to as consulting). Revenue from the sale of licences where there are no post‐delivery obligations is recognised at the date of the delivery. Revenue from maintenance contracts is recognised rateably over the service agreement. Revenue from professional services and testing solution services is recognised over the period the services are delivered. The Company has recently expanded its product offering to Software as a Service ("SaaS") with the introduction of cloud‐based solutions. SaaS revenues are classified as subscription fees and are recognised rateably over the delivery period.

Review and results of operations

Overview

The Company reported $7.9 million in profit after tax on revenue of $78.5 million. The Company achieved a positive momentum shift in the second half of the financial year across all product lines but was insufficient to drive growth over the prior year. The first half result was disappointing with revenue of $34.1 million and a near breakeven profit result of $131,000. The second half, by contrast, delivered revenue of $44.4 million and profit after tax of $7.8 million. The on‐going global uncertainty around COVID‐19 and other geo‐political uncertainties saw typical sales cycles lengthen and some customers deferring purchasing decisions. Whilst these uncertainties remain, the stronger second half results would indicate they have lessened.

The strengthening Australian dollar during the year had a negative impact on the results in two ways. Firstly, the revaluation of foreign currency denominated assets resulted in unrealised losses of $1.9 million for the year. Secondly, the translation of offshore revenues at higher exchange rates lowering reported revenues. In constant currency, revenue for the year would have been $85.8 million compared to the reported revenue of $78.5 million. Removing the effects from both currency revaluation and currency translation would have seen profit after tax of $11.9 million compared to the reported result of $7.9 million.

Directors’ Report cont.

Revenue

Revenue for the year was $78.5 million, a decrease of 29% over 2020. Licence fees continue to be the largest revenue contributor. Licence fees decreased by 34% to $47.4 million. There are several factors for the decline in revenue. The pandemic had a significant impact on performance. The sales cadence was disrupted through limitations on travel, cancellation of trade shows and limited face to face meetings. The Company improved sales in the second half and has recently re‐organised sales and marketing activities to better suit the changed landscape. Customer buying patterns were restrained during the first half through budget constraints and reduction in commitment periods. The Company's maintenance retention rate for the year was 88% (2020: 93%). The number of new customers added over the 2021 financial year was 26 (2020: 38).

The following table presents Company revenues for each of the relevant product groups:

In thousands of AUD 2021	2020 % Change
Collaborate 44,000 Infrastructure 15,874 Transact 10,243 Professional services 8,376	59,818 (26%) 28,657 (45%) 13,808 (26%) 8,630 (3%)
Total revenue 78,493	110,913 (29%)

Collaborate revenue declined 26% over the prior year to $44.0 million. Work‐from‐home became a necessity as a result of the pandemic and accelerated organisations take‐up of cloud‐based collaboration platforms whilst assessing their on‐premise environment. This led to shorter contract terms, less capacity sales and in some situations non‐renewal of IR's on‐premise solutions. The fast‐tracked uptake of tools such as Microsoft Teams, Zoom, and Webex, in some cases gave little consideration to managing the performance of those platforms. During the 2021 financial year, the Company released cloud and hybrid solutions for each of these tools and have had some early wins, the largest with BT (British Telecom). Past this initial phase of implementations organisations more readily understand the mission‐critical of collaboration solutions and the complexity of delivering a seamless user experience. Customers are now seeking to optimise their cloud and hybrid environments and IR's solutions are tailored to meet their needs.

Infrastructure revenues decreased by 45% to $15.9 million due to a cyclical downswing exacerbated by lower capacity sales. Licence transactions sold during the year were closed on a multi‐year term basis with maturities ranging from three to five years.

Transact revenue decreased by 26% over the prior year to $10.2 million. Lower renewals and capacity sales were the primary drivers for the decline. The Company executed a US$1.4 million agreement during the year for Payment Analytics, a new SaaS based solution. The revenue will be recognised on a subscription basis in future periods.

The following table presents Company revenues for each of the relevant geographic segments in underlying natural currencies:

	2021	2020	% Change
Americas (USD’000)	40,798	50,258	(19%)
Asia Pacific (A$’000)	11,817	17,651	(33%)
Europe (£’000)	6,713	9,243	(27%)

Regional performance was down globally for reasons outlined in previous paragraphs. Trading conditions were particularly difficult in the first half of the financial year with some improvement experienced in the second half. A combination of new products and re‐ organisation of sales and marketing activities is anticipated to drive growth in underlying performance.

Directors’ Report cont.

Expenses

The following table presents the Company’s cost base compared to the preceding year:

The following table presents the Company’s cost base compared to the preceding year:
In thousands of AUD 2021	2020 % Change
Research and development expenses 19,101 Sales, professional services and marketing expenses 43,378 General and administration expenses 6,235	17,388 10% 54,560 (20%) 6,232 0%
Total expenses 68,714	78,180 (12%)

Total expenses were down 12% to $68.7 million reflective of tight cost control during the pandemic. Total staff numbers finished the year at 240 (2020: 266). Gross spending on research and development expenditure represents 27% of total revenue (2020: 20%):

20%):
In thousands of AUD	2021	2020	% Change
Gross research and development spending	21,255	22,518	(6%)
Capitalisation of development expenses	(11,985)	(13,962)	(14%)
Amortisation of capitalised expenses	9,831	8,832	11%
Net research and development expenses	19,101	17,388	10%
Gross spend as a % of revenue	27%	20%

Shareholder returns

Returns to shareholders were as follows:

Returns to shareholders were as follows:
	2021	2020	2019
Net profit ($’000)	$7,935	$24,054	$21,851
Basic EPS	4.61c	14.00c	12.72c
Dividends per share	Nil	7.25c	7.25c
Dividend franking percentage	N/A	100%	100%
Return on equity	10%	29%	31%

Directors’ Report cont.

Financial position

The following table presents key items from the consolidated statement of financial position:

In thousands of AUD	2021	2020
Assets
Cash and cash equivalents (current)	12,149	9,744
Trade and other receivables (current and non‐current)	79,511	87,252
Intangible assets (non‐current)	29,962	29,052
Liabilities
Borrowings (non‐current)	6,658	5,000
Deferred Revenue	16,387	22,323
Equity	83,342	82,522

The Company's end of year cash position was $12.1 million with $6.7 million of borrowings with the end of year net cash position of $5.5 million (June 20: $4.7 million).

The decrease in trade receivables was the result of lower sales during the year and the translation of US dollar denominated receivables at a higher exchange rate. The growth in intangible assets represents the investment in the Company's next generation Prognosis Cloud platform and related cloud‐based products. The platform is being amortised over a five‐year period; the cloud‐ based products are being amortised over a three‐year period.

The decrease in deferred revenue is driven by three factors: 1) lower volume in sales; 2) shorter contract duration; and 3) translation of US dollar denominated receivables at a higher exchange rate.

The consolidated statement of financial position presented at page 39 together with the accompanying notes provides further details.

Directors’ Report cont.

Outlook and Strategy for 2022

The global events over the past 18 months have transformed the world in ways none of us could have imagined. This prolonged, ongoing disruption has fundamentally and irreversibly changed the markets in which we operate, cementing new ways of working and living.

Workforces have become increasingly disparate and remote, migrating away from permanent offices and toward a blended hybrid working model. The shift to, and growth of, cloud‐based as‐a‐service (UCaaS and CCaaS[1] ) platforms has accelerated. Services like Microsoft Teams, Zoom, and Cisco Webex continue to experience rapid, exponential growth.

Transaction volumes have surged with the growing movement to cashless payments. New digital payment methods have flooded the market, driven by consumer demand for choice and flexibility in their purchasing options. Consumer buying behaviour is in flux, reflecting the enduring economic uncertainty brought about by the global pandemic.

The need for seamless collaboration and transaction user experiences is more critical than ever. Reliance on these technologies around the world has increased, as has user expectation – these platforms and services “just need to work”, there is no margin for error.

IR understands that delivering that seamless experience means the complexity our customers must deal with has grown exponentially. Our goal has always been to simplify complexity, by enabling mission critical monitoring, troubleshooting and business insights that our customers need to succeed. But more than that, IR aims to deliver innovation and flexibility as organisations around the world are tasked with navigating these uncertain times.

To remain successful, organisations must achieve a level of flexibility that allows them to be agile as market dynamics shift in unpredictable ways, and continue to deliver great experiences, interactions and connections.

With over 30 years of operation, IR understands this all too well and is well‐positioned to help our customers navigate their accelerated digital transformations and simplify the complexity that seems to grow day‐to‐day.

IR has embarked on a company‐wide transformation, transitioning the business to be SaaS‐ready, accelerating new customer acquisition and driving adoption. We see the transition as defined by three key phases: innovation, execution, and scale .

2021 was a year of product innovation , with a significant number of new products and enhancements delivered.

Last year, we launched our revolutionary hybrid cloud Prognosis platform, built with state‐of‐the‐art data collection, analysis, and visualization technologies, to facilitate the delivery of more comprehensive real‐time insights from the vast amount of data collected by mission critical systems every day.

In 2021, we extended the capabilities of the Prognosis Platform, porting Prognosis Edge to the Windows OS to enable us to support new payments switch types, build Direct Routing capabilities, and lay the groundwork for future Platform capabilities to be developed. We also added new security enhancements to the Prognosis Cloud and built a cloud alerting framework.

In the Collaborate space, we released support for three new platforms (Microsoft Teams, Zoom, Cisco Webex), and delivered several unique product enhancements to differentiate IR from competitors and vendor tools, including EQ360 – a unique visualization of user experience, cloud alerting, Avaya SBC and Avaya SIP Session Manager.

This innovation was a key factor in the closure of a significant strategic partnership with BT. IR was selected to monitor and manage user experience for Unified Communications delivered to multinational customers from BT’s new digital services platform, enabling end‐to‐end proactive experience and performance management.

These key strategic partnerships, combined with significant product innovation and a renewed customer‐centric focus saw IR bring on 24 new logos in the Collaborate space and build a strong new pipeline of opportunities to carry into 2022.

1 UCaaS – Unified Communications as a Service, CCaaS (Contact Center as a Service)

Directors’ Report cont.

In our Transact and Infrastructure product line, there was a strong focus on refining product strategy in response to especially volatile market conditions. We identified three key areas with the biggest potential for growth: card, real‐time and high value payments.

Aligned to these focus areas, we released a number of product innovations, including a beta version of the High Value Real‐Time Payments module and enhanced Business Insights Analytics for card payments, as well as support for new payment switch formats to allow us to further expand our reach.

ACI Worldwide and IR also extended their partnership, with ACI selecting IR Transact’s payment analytics capabilities to enrich the insights available as part of the ACI Omni‐Commerce solution.

IR anticipates customers’ business priorities evolving over the next five years, with greater demand for deep payments insights related to a broader range of user types, in addition to traditional system monitoring products. We believe IR’s focus on developing and promoting analytics capabilities is the key to unlocking future value and growth in the payments space.

2022 will see further product innovation, while also accelerating the execution phase of our transformation.

We will continue to develop our Prognosis hybrid cloud platform. We anticipate a rapid evolution of solutions, by building on the groundwork laid in 2021.

The coming year will see a focus enabling machine learning outcomes, as well as supporting API level integrations and adding new data sources for Transact and Collaborate product portfolios.

The outlook for the Collaborate solution suite is strong. In 2022 we expand on the foundation we have created. This product growth will serve to increase Collaborate’s depth of visibility, level of intelligence, and breadth of ecosystem, with customer focused added value.

In line with market demand, Collaborate will focus on enhancing support and insight for on‐premise telephony systems, PBXs and SBCs, on‐premise corporate networks along with cloud UCaaS solutions, end users devices, networks, and rooms, and proactive testing and analysis to find potential issues before they occur.

With the move to the cloud, IR has access to large data pools and new technologies that will be leveraged to provide a deeper level of insight than has previously been possible. IR will explore integration options with existing management tools, such as ITSM solutions (such as ServiceNow), and developing advanced analytics to provide deeper insights into user experience, adoption, and prediction of issues.

The strategic importance of payments within enterprises and banks has elevated during the pandemic. Payments insights now has a broader application across a business, and this is the key to unlocking future value and growth for IR.

In the wider payments space relating to High Value and Inter‐bank transactions, IR Transact continues the focus on expanding capabilities. The soon‐to‐be‐released High Value Payments solution will see IR’s product offering moving from vendor specific, to a generic standard, which will open‐up significant market opportunities.

The rapid roll out of domestic real‐time payments schemes is driving 24% annual market growth in real‐time payments volume to 2026[2] .As transaction volumes on these schemes grow, so does the demand for transaction monitoring and analytics tools that proactively identify system issues and provide real‐time insights enabling corrective action. IR is developing solutions for the growing sectors of High Value and Real‐Time account to account payments to capture opportunities within these growing global markets.

A key part of the execution phase of IR’s strategy for 2022 will be a significant shift in our go to market approach, as we transition to a subscription‐based pricing model. This new approach emphasizes net new customer growth, as well as driving the adoption of our products.

2 ACI/GlobalData’s Prime Time for Real‐Time report (March 2021)

Directors’ Report cont.

New customer acquisition will be driven by further investment in Sales Development Representatives (SDRs) and Business Development Managers (BDMs) across regions, taking a focused approach targeting key accounts, and supported by outbound marketing activities.

We are also expanding our Customer Success Manager team, whose focus is on driving the adoption of our products and ensuring our customers get value from our products, to support renewals and maximize customer lifetime value.

IR will also place greater investment in growing relationships and extending agreements with Managed Service Providers (MSPs) which account for close to 20% of the company’s revenue, as well as channel partners. But with more organisations turning to these avenues to help them manage the complexities of the new working world, this represents a significant opportunity for IR to capture additional market share.

IR will increase investment in brand awareness and strategic messaging to amplify our voice and raise the awareness of the IR brand.

To this end, we will be investing more in support for these audiences. We will also commit additional resources to raising awareness, creating specific content, and improving website relevance, with the aim of helping existing service providers and partners sell IR’s solutions, as well as acquiring new customers in this space.

Looking to the future and supporting phase three of our transformation – scale – IR will be increasing investment in brand awareness and strategic messaging to position us as leaders in the markets we operate in, amplify our profile, and raise recognition of the IR brand.

IR is well positioned to deliver on the three phases of our strategic outlook – Innovation, Execution and Scale – by building on our innovation agenda, continuing momentum of product releases and enhances, and transform our go to market approach, to achieve our growth targets and transform IR.

Directors’ Report cont.

Directors

The Directors of the Company at any time during or since the end of the financial year are listed below:

Peter Lloyd, MAICD

Independent Non‐Executive Director and Chairman

Peter was appointed Director in July 2010 and elected Chairman in March 2021. He has over 40 years’ experience on computing technology, having worked for both computer hardware and software providers. For the past 35 years, Peter has been specifically involved in the provision of payments solutions for banks and financial institutions. He is currently the proprietor of The Grayrock Group Pty Ltd, a management consultancy company focusing on the payments industry. Peter is a Non‐Executive Director of privately held Taggle Pty Ltd. Peter’s current term will expire no later than the close of the 2022 Annual General Meeting.

Listed company Directorships held in the past three years other than listed above: FGO and ID8

John Ruthven

Managing Director and Chief Executive Officer

John joined IR in July 2019 as the Company's Chief Executive Officer and was appointed as Director in September 2019. Mr Ruthven is an internationally experienced software industry executive respected for his strategic approach and operational expertise across global enterprises. Mr Ruthven has over 20 years’ experience working in the technology industry with a proven track record of leadership and delivering strong profitable growth.

Most recently, Mr Ruthven was the Operating Officer – Global Sales at TechnologyOne. Prior to that he was President & Managing Director ANZ of SAP, SVP International Sales at Zuora Inc, and held various senior positions at CA Technologies and Computer Associates Inc. John has extensive international experience in the USA, Europe and Asia Pacific regions.

Listed company Directorships held in the past three years other than listed above: None.

Allan Brackin, BAppSc

Independent Non‐Executive Director

Allan was appointed a Director in February 2021. He is a seasoned non‐executive Director with entrepreneurial flair and over 35 years’ experience in the technology sector. He has a proven track record as a business builder and advisor, with experience in business strategy, sales and marketing, process re‐engineering, change management, financial management, M&A activity and governance. Allan is the former founder and CEO of AAG Technology Services, CEO and Managing Director of Volante Group Ltd, previously Chair of RPM Global Ltd, Chair of Opticomm Ltd, Chair of GBST Ltd, Chair of Sensera Limited and is currently a Non‐ Executive Director of ASX listed Sovereign Cloud Holdings Limited and 3P Learning Limited. Mr. Brackin has also worked with companies in the private sector and several not‐for‐profits in the capacities of Chair, Advisory Board member and/or Non‐Executive Director. Allan’s current term will expire no later than the close of the 2021 Annual General Meeting.

Allan is currently Chair of Integrated Research's Nomination & Remuneration Committee.

Listed company Directorships held in the past three years other than listed above: None.

Directors’ Report cont.

Garry Dinnie, BCom, FCA, FAICD, FAIM

Independent Non‐Executive Director and Chairman

Garry was appointed a Director in February 2013. He is a Director & Chair of the Audit & Risk Committee of CareFlight Limited, Australian Settlements Limited and a Director of a number of private companies. He is also the Chair or member of a number of Audit & Risk Committees of NSW public sector and private sector entities. He was previously a partner with Ernst & Young for 25 years specialising in audit, advisory and IT services. Garry’s current term will expire no later than the close of the 2022 Annual General Meeting.

Garry is currently Chair of Integrated Research's Audit & Risk Committee.

Listed company Directorships held in the past three years other than listed above: None.

Anne Myers, MBA, FAICD

Independent Non‐Executive Director

Anne was appointed a Director in July 2018. Ms. Myers has worked in the finance and technology industry for over 30 years with experience in business strategy, technology, digital innovation and operational functions. Anne is the former Chief Operating Officer and CIO of ING Direct Australia and has also acted in executive technology and business roles for QBE, Macquarie Bank and St George Bank. She is currently a Director of both Defence Bank Limited and United Way Australia Limited and has previously been a Council Member of the University of New England. Ms. Myers has also worked in the not‐for‐profit sector as CEO of United Way Australia, and was a member of the Industry Advisory Network for the University of Technology. Anne’s current term will expire no later than the close of the 2023 Annual General Meeting.

Anne is currently Chair of Integrated Research's Strategy Committee.

Listed company Directorships held in the past three years: None.

James Scott BEng Hons, GAICD, FIEAust CPEng EngExec Independent Non‐Executive Director

James was appointed a Director in May 2021. He is a seasoned professional with over 26 years’ experience in media and technology sector with industry and advisory businesses at a local and international level. Mr. Scott is currently an operational advisor to private equity firm, Liverpool Partners, is Chair of iNC Digital & MerchantWise a non‐executive director of software business Orbx and was previously non‐executive Chair of data & analytics business, Skyfii (ASX: SKF). James was previously Managing Director of Accenture Digital, a Partner in KPMG’s Advisory division and was the Chief Operating Officer of Seven Group Holdings (ASX:SVW). Mr. Scott was a founder and director of Imagine Broadband Limited and was a Director of WesTrac and Coates Hire during his time with Seven Group. James’s current term will expire no later than the close of the 2021 Annual General Meeting.

Listed company Directorships held in the past three years: None.

Company Secretary

David Purdue, BEc, MBA, Grad Dip CSP, FCA, FGIA, FCG, GAICD

David was appointed Company Secretary in July 2012. David was also the Company's Global Commercial Manager until his retirement in July 2016. Prior to this, David spent three years at Integrated Research’s Colorado office to manage the Americas finance operations. David is a Chartered Accountant and Chartered Secretary with over 30 years experience in both professional practice and industry.

Directors’ Report cont.

Resigning & Retiring Directors during the year

Paul Brandling, BSc Hons, MAICD

Independent Non‐Executive Director and Chairman

Paul resigned as Chairman and as a Director in March 2021. Paul served as Chairman since November 2018 and was a Director for six years. During various times of his Directorship, Paul served as Chair of the Strategy Committee, was a member of the Audit & Risk Committee, and was a member of the Nomination & Remuneration Committee.

Nick Abrahams, B Comm, LLB (Hons), MFA

Independent Non‐Executive Director

Nick retired as a Director in November 2020. Nick served on the Board for seven years and was a member of the Audit & Risk Committee during that time.

Results

The net profit of the consolidated entity for the 12 months ended 30 June 2021 after income tax expense was $7.9 million.

Dividends

Dividends paid or declared by the Company since the end of the previous financial year were:

				Cents Per share	Total Amount	Date of	Payment
					$’000
Final	2020	– Ordinary shares	100% franked	3.75	6,447	15	Oct 2020

Events subsequent to reporting date

There has been no transaction or event of a material or unusual nature that has arisen in the interval between the end of the financial year and the date of this report which is likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future financial years.

Future developments

Likely developments in the operations of the consolidated entity in future financial years and the expected results of those operations are referred to generally in the Review of Operations and Activities Report.

Further information on likely developments including expected results would be in the Directors’ opinion, result in unreasonable prejudice to the Company and has therefore not been included in this Report.

Directors and Company Secretary

Details of current Directors’ qualifications, experience and special responsibilities are set out on pages 10 to 11. Details of the company secretary and his qualifications are set out on page 11.

Directors’ Report cont.

Officers who were partners of the audit firm during the financial year

No officers of the Company were partners of the current audit firm during the financial year.

Directors’ meetings

The numbers of meetings of the Company’s board of Directors and of each board committee held during the year ended 30 June 2021, and the numbers of meetings attended by each Director were:

	Board	Meetings	Audit and Risk	Audit and Risk	Nomination and	Nomination and		Strategy
				Committee	Remuneration			Committee
				Meetings	Committee Meetings			Meetings
	A	B	A	B	A	B	A	B
Peter Lloyd	24	24	2	3	‐	‐	3	3
John Ruthven	23	23	‐	‐	‐	‐	‐	‐
Allan Brackin
	8	11	‐	‐	2	2	‐	‐
(from February 2021)
Garry Dinnie	24	24	4	4	8	8	‐	‐
Anne Myers	24	24	4	4	7	7	3	3
James Scott
	5	5	‐	‐	1	1	1	1
(from May 2021)
Paul Brandling	16	16	‐	‐	6	6	2	2
(until March 2021)
Nick Abrahams
	8	8	1	1	‐	‐	‐	‐
(until November 2020)

A. Number of meetings attended.

B. Number of meetings held during the time the Directors held office or was a member of the board or committee during the year.

State of affairs

In the opinion of the Directors there were no significant changes in the state of affairs of the consolidated entity that occurred during the financial year under review.

Environmental regulation

The consolidated entity’s operations are not subject to significant environmental regulations under either Commonwealth or State legislation.

Directors’ Report cont.

Directors’ interests

The relevant interest of each Director in the shares, options or performance rights over ordinary shares issued by the companies in the consolidated entity and other relevant bodies corporate, as notified by the Directors to the Australian Securities Exchange in accordance with S205G(1) of the Corporations Act 2001, at the date of this report is as follows:

Peter Lloyd John Ruthven Allan Brackin Garry Dinnie Anne Myers James Scott Paul Brandling (until March 2021)1 Nick Abrahams (until November 2020)1	Ordinary shares in Integrated Research	Options	Performance rights
	Directly held Beneficially held Total	Number of options	Number of rights
	‐ 27,000 27,000 20,000 ‐ ‐ ‐ 50,000 50,000 ‐ 14,000 14,000 17,000 ‐ 17,000 ‐ ‐ ‐ 14,234 29,568 43,802 ‐ 13,446 13,446	‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐	‐ 247,806 ‐ ‐ ‐ ‐ ‐ ‐

1Holding based on last day as Director

Share options and performance rights

Options and performance rights granted to Directors and key management personnel

During or since the end of the financial year, the Company granted performance rights for no consideration over unissued ordinary shares in Integrated Research Limited to the following named Directors and executive officers of the consolidated entity as part of their remuneration:

	Number of
	performance	Performance
	rights granted	hurdle	Exercise price	Expiry date
Directors
John Ruthven	95,368	Yes	Nil	Aug 2023

The performance rights were granted under the Integrated Research Performance Rights and Option Plan (established November 2011).

Directors’ Report cont.

Unissued shares under performance rights

Unissued ordinary shares of Integrated Research Limited under performance rights at the date of this report are as follows:

Performance Rights

Expiry date	Exercise price	Number of shares
Aug 2021	Nil	83,000
Oct 2021	Nil	110,750
Feb 2022	Nil	67,988
Aug 2022	Nil	333,894
Aug 2023	Nil	209,867
Total performance rights		805,499

Performance rights do not entitle the holder to participate in any share issue of the Company or any other body corporate.

Indemnification and insurance of officers and auditors

Indemnification

The Company has agreed to indemnify the Directors of the Company on a full indemnity basis to the full extent permitted by law, for all losses or liabilities incurred by the Director as an officer of the Company including, but not limited to, liability for negligence or for reasonable costs and expenses incurred, except where the liability arises out of conduct involving a lack of good faith.

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst &Young Australia, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment of this type has been made to Ernst & Young during or since the financial year.

Insurance

During the financial year Integrated Research Limited paid a premium to insure the Directors and executive officers of the consolidated entity and related bodies corporate.

The liabilities insured include costs and expenses that may be incurred in defending civil or criminal proceedings that may be brought against officers in their capacity as officers of the consolidated entity.

Remuneration report

The Company’s Remuneration Report, which forms part of this Directors’ Report, is on pages 17 to 29.

Corporate governance

A statement describing the Company’s main corporate governance practices in place throughout the financial year is on pages 30 to 36.

Directors’ Report cont.

Non‐audit services

During the year Ernst and Young, the Company’s auditor, has performed certain other services in addition to their statutory duties.

The board has considered the non‐audit services provided during the year by the auditor and in accordance with written advice provided by resolution of the Audit & Risk Committee, is satisfied that the provision of those non‐audit services during the year by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001 for the following reasons:

All non‐audit services were subject to the corporate governance procedures adopted by the Company and have been reviewed by the Audit & Risk Committee to ensure they do not impact the integrity and objectivity of the auditor, and
The non‐audit services provided do not undermine the general principles relating to auditor independence as set out in Professional Statement F1 Professional independence , as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision‐making capacity for the Company, acting as an advocate for the Company or jointly sharing risks and rewards.

A copy of the auditors’ independence declaration as required under Section 307C of the Corporations Act is on page 83 and forms part of the Directors’ Report.

Rounding of amounts to nearest thousand dollars

The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 and in accordance with that Class order, amounts in the Financial Statements and the Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated.

This report is made in accordance with a resolution of the Directors.

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Peter Lloyd Chairman

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John Ruthven Managing Director and Chief Executive Officer

Dated at North Sydney this 19th day of August 2021

Remuneration Report (audited)

1. Strategic priorities and link to remuneration objectives

The Company's remuneration strategy and remuneration framework are aligned with the Company's business strategy. Our remuneration framework is underpinned by our strategy to:

Drive innovation and research and development activities on new platforms, particularly cloud‐related platforms;
Focus on growing and consolidating our footprint in key geographical markets; and
Build strong and lasting alliances

The remuneration structures of the Company are designed to attract suitably qualified candidates, reward the achievement of strategic objectives, and achieve the broader outcome of creating strong value and returns to shareholders. These remuneration structures are competitively set based on the remuneration principles including:

Attract and retain top talented Key Management Personnel ("KMP")
Alignment between remuneration reward with business strategy and driving shareholders' value/return
Structure that is flexible in adapting to a changing environment
Fair and equitable remuneration framework

1. Relationship between remuneration and Company performance

In considering the Company’s performance and benefits for shareholder wealth, the Nomination and Remuneration Committee (the "Committee") has regard to the following indices in respect of the current financial year and the previous four financial years:

Three‐year selected financial indices of the Company

	2021	2020	2019
Licence fees ($’000)	47,359	72,098	62,774
Net profit after tax (NPAT) ($’000)	7,935	24,054	21,851
Dividends paid ($’000)	6,447	12,460	12,027
Closing share price	$1.95	$3.85	$3.30
Change in share price	($1.90)	$0.55	$0.19
Reported NPAT growth %	(67%)	10%	14%
Executive KMP remuneration1growth	(19%)	0%	(38%)

1Excluding termination payments

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Remuneration Report (audited) cont.

Two of the financial indices shown in the table above are Licence Fees and NPAT. The Committee considers these two financial performance metrics as Key Performance Indicators (KPIs) in setting the STI element of the KMP remuneration package.

The above charts show that the Executive KMP’s remuneration framework has decreased in the current year which is aligned with overall Company performance. The Committee considers that the above performance‐linked structure is generating the desired outcomes.

2. Persons included in the Remuneration Report

KMP, including Directors, have authority and responsibility for planning, directing and controlling the activities of the Company and the consolidated entity. The following were KMP of the Company at any time during the reporting period, and unless otherwise indicated were KMP for the entire period:

2.1. Executive KMP

As of the current year, the Committee assessed the Executive KMP to include the following executive roles.

Executive KMP	Role	Appointed
John Ruthven	Chief Executive Officer and Managing Director	July 2019 as Chief Executive Officer September 2019 as Managing Director
Peter Adams	Chief Financial Officer	March 2008
Matt Glasner	Chief Commercial Officer	January 2019 (until 30 June 2021)

The Chief Commercial Officer (CCO) role was made redundant on 30 June 2021 following a re‐organisation of the Company leadership structure. The remuneration of the Chief Commercial Officer has been included in this report together with the accrued termination payment associated with the restructure.

2.2. Independent Non‐Executive Directors

Directors	Role	Appointed
Peter Lloyd	Independent Non‐Executive Director and Chairman	Director from July 2010
		Chairman from March 2021
Garry Dinnie	Independent Non‐Executive Director	February 2013
Allan Brackin	Independent Non‐Executive Director	February 2021
Anne Myers	Independent Non‐Executive Director	July 2018
James Scott	Independent Non‐Executive Director	May 2021
Paul Brandling	Independent Non‐Executive Director and Chairman	Director from August 2015 (until March 2021)
		Chairman from November 2018
Nick Abrahams	Independent Non‐Executive Director	September 2014 (until November 2020)

Remuneration Report (audited) cont.

3. Executive remuneration

3.1. Remuneration framework

The remuneration framework set out below considers the capability and experience of the KMP, their ability to control business performance, and the Company’s performance.

	Fixed remuneration	Short‐term incentive (STI)	Long‐term incentive (LTI)
Description of	Base salary plus	The STI is an “at risk” bonus	The LTI is provided as either options
components	superannuation and any fringe	provided in the form of cash.	or performance rights over ordinary
	benefits such as motor vehicle		shares of the Company under the
	parking.		rules of the Integrated Research
			Performance Rights and Option Plan
			("IRPROP").
Objectives	To ensure that KMP	The measures are chosen as they	The IRPROP enables Company to
	remuneration is competitive in	directly align the individual KMP’s	offer performance rights or options
	the marketplace.	reward to the KPIs of the Company	to eligible employees to obtain
		and to its strategy and	Company's shares at no cost upon
		performance.	meeting certain performance
			conditions that reflect long‐term
			performance of the Company.
KPIs	N/A	The KPIs vary with position and	Total Shareholder Returns ("TSR")
		responsibility and are aligned with	was considered the most
		each respective year’s budget.	appropriate performance hurdle
		Financial KPIs include:	given its intrinsic link to creating
			shareholder wealth. Performance
		• NPAT • Licence revenue • Total revenue	hurdles are tested at each vesting date.
		In addition to the above, non‐
		financial KPIs exist and vary with
		the KMP position. Refer to section
		3.2 for further details.
Performance period	N/A	Annual	3 years for performance rights
Alignment to	Fixed remuneration is set to	Executive KMP are rewarded for	The ability of Executive KMP to
strategy	ensure the KMP's	delivering the Company's financial	exercise either options or
	remuneration is competitive in	performance based on NPAT,	performance rights is conditional on
	the marketplace to attract and	Licence fees or Total revenue KPIs.	the Company achieving certain TSR
	retain KMP with the necessary		performance hurdles over the
	skills and experience.	Executive KMP are also set	vesting period. This sets a link
	Remuneration levels are	appropriate non‐financial KPIs with	between the long‐term performance
	reviewed annually through a	appropriate stretch goals. KPIs are	of the Company and shareholder
	process that considers	aligned to strategic goals and	value.
	individual and overall	creation of shareholder value.
	performance of the Company.

Remuneration Report (audited) cont.

3.2. Short‐term incentives

The Committee is responsible for setting the KPIs for the Chief Executive Officer (CEO), and for approving the KPIs for the other Executive KMP who report to the CEO. The KPIs generally include measures relating to the Company and the individual, and include financial, people, customer and strategy. The measures are chosen as they directly align the individual KMP’s reward to the KPIs of the Company and its strategy and performance. At the end of the financial year, the Committee assesses the actual performance of the CEO against the KPIs set at the beginning of the financial year. A percentage of the predetermined maximum amounts for each KPI is awarded depending on results. The Committee recommends the cash incentive to be paid to the CEO for approval by the board. The maximum stretch overperformance for each KMP is limited to 125%. In order to achieve over‐performance of a particular KPI, a minimum of 85% of the NPAT target must be achieved.

CEO and Managing Director KPIs and 2021 performance outcome

Performance metrics	Payment eligibility criteria	2021 performance outcome/payout
Financial (60% weighting)
NPAT	Sliding scale based on meeting or exceeding certain target threshold
Licence revenue	Sliding scale based on meeting or exceeding certain target threshold
Total Revenue	Slidingscale based on meetingor exceedingcertain target threshold
Financialgoal achievement		0%
Non‐financial (40% weighting)
Strategic growth	Activity driven performance measurement
Employee engagement	Sliding scale based on meeting or exceeding certain target threshold
Customer NPS	Slidingscale based on meetingor exceedingcertain target threshold
Non‐Financialgoal achievement		37.5%
Total achievement		37.5%

CFO KPIs and 2021 performance outcome

Performance metrics	Payment eligibility criteria	2021 performance outcome/payout
Financial (40% weighting)
NPAT	Sliding scale based on meeting or exceeding certain target threshold
Licence revenue	Slidingscale based on meetingor exceedingcertain target threshold
Financialgoal achievement		0%
Non‐Financial (60% weighting)
Strategic growth	Activity driven performance measurement
Employee engagement	Sliding scale based on meeting or exceeding certain target threshold
Cash flow management	Sliding scale based on meeting or exceeding certain target threshold
Risk management	Activitydrivenperformance measurement
Non‐Financialgoal achievement		60%
Total achievement		60%

Remuneration Report (audited) cont.

CCO KPIs and 2021 performance outcome

Performance metrics	Payment eligibility criteria	2021 performance outcome/payout
Financial (75% weighting)
NPAT	Sliding scale based on meeting or exceeding certain target threshold
Licence Revenue	Sliding scale based on meeting or exceeding certain target threshold
Professional Services Revenue	Sliding scale based on meeting or exceeding certain target threshold
Total Revenue	Slidingscale based on meetingor exceedingcertain target threshold
Financialgoal achievement		0%
Non‐Financial (25% weighting)
Employee engagement	Sliding scale based on meeting or exceeding certain target threshold
Customer growth	Specified percentage per customer
Customer NPS	Slidingscale based on meetingor exceedingcertain target threshold
Non‐Financialgoal achievement		5%
Total achievement		5%

3.3. Long‐term incentive (LTI)

LTI remuneration at the Company is made up of Performance Rights under the IRPROP, which is made up of service conditions and varying performance conditions by KMP.

Feature	Description
Value	The value of the LTIs issued each year is typically set at 15% to 30%oftotal remuneration. It is determined each year in accordance with the IRPROP at the absolute discretion of the Board.
Entitlement	Each LTI entitles the performance rights to one Company share in the future, which will be exercised within the period specified by the Board in the Invitation Letter, for no consideration.
Performance period	The performance period of the LTIs is three years, starting from the grant date and extends for a three‐year period to a specific vesting date. Each KPI is assessed annually and at the end of the three‐year performance period. Annual performance rights are offered with performance measures as referenced below. From time to time performance rights are offered with a service only condition that may be required in particular circumstances. Performance rights with service only conditions were offered to the CFO upon his conclusion as Interim CEO. Performance rights with service only conditions were offered to the CEO upon his commencement with the Company. In relation to the CEO's LTI granted in 2021, their performance measures are presented below:
	Performance measures Performance period Testing period Company's relative TSR performance compared to Australian technology companies in the S&P/ASX All Technology Index (XTX) at the end of each year 3 years Annually

Remuneration Report (audited) cont.

3.4. Detail of executive remuneration and service conditions

Features	CEO and Managing Director	CFO	CCO
Fixed Remuneration	$550,000	$350,000	$475,000
Short Term Incentive	$250,000	$120,000	$250,000
Contract term	No specified end date	No specified end date	No specified end date
Termination notice by	6 months	3 months	3 months
Individual/Company
Employment termination	All unvested LTIs are forfeited	All unvested LTIs are forfeited	All unvested LTIs are forfeited

4. Non‐executive Director remuneration

4.1. Board and Committee Structure

The Board and Committees are structured as follows:

The Board and Committees are structured as follows:
Director Board	Audit & Risk Committee Nomination & Remuneration Committee Strategy Committee
Non‐Executive & Independent Directors Peter Lloyd (Chair) Allan Brackin  Garry Dinnie  Anne Myers  James Scott 	  (Chair) (Chair)   (Chair)  
Executive Director John Ruthven 

4.2. Non‐Executive Director fees

Directors’ fees cover all main Board activities and committee membership. Directors can elect to salary sacrifice their fees into superannuation. Non‐executive Directors do not receive performance‐related compensation or retirement benefits. The total remuneration pool for all Non‐executive Directors is not to exceed $850,000 per annum, which the Shareholders last voted upon at the Annual General Meeting in November 2020.

Non‐executive Director fees

Non‐executive Director fees
Board/Committee	Position	Per Position	Aggregate
Board	Fee for a Member	$90,000	$450,000
Board	Fee for role as Chair	$90,000	$90,000
Audit & Risk Committee	Fee for role as Chair	$10,000	$10,000
Nomination and Remuneration Committee	Fee for role as Chair	$10,000	$10,000
Strategy Committee	Fee for role as Chair	$10,000	$10,000
Total fees for Non‐executive Directors			$570,000

Remuneration Report (audited) cont.

5. Statutory remuneration

5.1. Directors’ and Executive KMP's remuneration

Details of the nature and amount of each major element of the remuneration of each of the KMP are reported below.

	<‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Short term‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐>	<‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Short term‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐>	<‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Short term‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐>	Post‐ employment	Long term	Share‐based payments	Other compensation		Proportion of remuneration	Proportion of remuneration
			Non‐cash	Superannuation	Long service	Value of	Termination
For the year ended 30	Salary & fees	Bonus	Benefits	Contribution	leave	rights1	Benefit	Total	Performance‐	Value of
June 2021(in AUD)	$	$	$	$	$	$	$	$	related	rights
Executive KMP
Peter Adams	328,306	72,000	‐	21,694	7,036	160,902	‐	589,938	12%	27%
Matt Glasner	453,306	12,500	‐	21,694	(7,986)	(56,506)	237,500	660,508	2%	(9%)
Directors
Executive
John Ruthven	528,306	93,750	‐	21,694	10,733	187,095	‐	841,578	11%	22%
Non‐executive
Peter Lloyd	127,469	‐	‐	12,110	‐	‐	‐	139,579	0%	0%
Allan Brackin	35,769	‐	‐	3,398	‐	‐	‐	39,167	0%	0%
Garry Dinnie	98,935	‐	‐	9,399	‐	‐	‐	108,334	0%	0%
Anne Myers	83,714	‐	‐	7,953	‐	‐	‐	91,667	0%	0%
James Scott	11,170	‐	‐	1,061	‐	‐	‐	12,231	0%	0%
Paul Brandling	123,288	‐	‐	11,712	‐	‐	‐	135,000	0%	0%
Nick Abrahams	33,055	‐	‐	3,140	‐	‐	‐	36,195	0%	0%
Total compensation	1,823,318	178,250	‐	113,855	9,783	291,491	237,500	2,654,197

1) The estimated value of performance rights is calculated at the date of grant using either the Black Scholes or Monte Carlo methodology.

2) Peter Lloyd received $17,117 for agreeing to be Chair of the Board in 2021 with a further $32,883 payable in 2022. No other Director appointed during the year received a payment for agreeing to hold the position.

Remuneration Report (audited) cont.

	<‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Short	term‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐>	term‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐>	Post‐ employment	Long term	Share‐based payments	Other compensation		Proportion of remuneration	Proportion of remuneration
			Non‐cash	Superannuation	Long service	Value of	Termination
For the year ended 30	Salary & fees	Bonus	Benefits	Contribution	leave	rights1	Benefit	Total	Performance‐	Value of
June 2020(in AUD)	$	$	$	$	$	$	$	$	related	rights
Executive KMP
Peter Adams3	328,926	110,584	3,399	21,003	7,735	183,183	‐	654,830	17%	28%
Matt Glasner	453,997	227,201	‐	21,003	11,708	49,121	‐	763,030	30%	6%
Directors
Executive
John Ruthven	518,825	215,952	‐	21,003	12,601	96,250	‐	864,631	25%	11%
Non‐executive
Paul Brandling	164,384	‐	‐	15,616	‐	‐	‐	180,000	0%	0%
Nick Abrahams	82,192	‐	‐	7,808	‐	‐	‐	90,000	0%	0%
Garry Dinnie	100,457	‐	‐	9,543	‐	‐	‐	110,000	0%	0%
Peter Lloyd	91,324	‐	‐	8,676	‐	‐	‐	100,000	0%	0%
Anne Myers	82,192	‐	‐	7,808	‐	‐	‐	90,000	0%	0%
Total compensation	1,822,297	553,737	3,399	112,460	32,044	328,554	‐	2,852,491

1) The estimated value of options and performance rights disclosed is calculated at the date of grant using the Black‐Scholes methodology, adjusted to consider the inability to exercise options during the vesting period.

2) No Director or executive appointed during the year received a payment as part of his or her consideration for agreeing to hold the position.

3) 'Salaries & fees' include remuneration for Interim CEO position held to 8 July 2019.

Remuneration Report (audited) cont.

6. Actual remuneration received ‐ Executive KMP

The table below reflects the actual remuneration received by the Executive KMP for the financial year ended 30 June 2021. The values presented below may differ from the statutory remuneration disclosed in section 5. The statutory disclosures are prepared on an accruals basis, in accordance with the Australian Accounting Standards, including share‐based payments valuation and accounting, which may not always represent what the Executive KMP have received, as some share based payments may not manifest if certain conditions are not met.

				Post‐			Other
	<‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐Short term‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐‐>			employment	Long term	LTI	compensation
						Value of
			Non‐cash	Superannuation	Long service	Performance	Termination
For the year ended 30	Salary & fees	Bonus1	Benefits	Contribution	leave	rights2	Benefit	Total
June 2021 (in AUD)	$	$	$	$	$	$	$	$
John Ruthven	528,421	93,750	‐	21,694	‐	‐	‐	643,865
Peter Adams	328,421	72,000	‐	21,694	‐	154,812	‐	576,927
Matt Glasner	453,421	12,500	‐	21,694	‐	‐	237,500	725,115

Notes

Bonus received or receivable for the financial year ended 30 June 2021.
Value of the performance rights is calculated based on the fair value of the vested rights at the vesting date.

Remuneration Report (audited) cont.

7. Additional statutory disclosures

7.1. Equity Instruments

All options refer to options over ordinary shares of Integrated Research Limited, which are exercisable on a one‐for‐one basis under the Employee Share Option Plan (ESOP). No options have been granted to named executives either during or since the end of the financial year. Performance rights granted as compensation are listed in the table below.

7.2. Analysis of rights over equity instruments granted as compensation

							Value yet to	vest or value
		Performance	rights granted					vested ($)
			Fair value	Percent	Percent	Financial year in
			per share	vested in	forfeited in year	which grant	Min	Max
	Number	Date	($)	year	(A)	expires	(B)	(C)
Executive KMP
John Ruthven	106,707	Nov‐19	2.87	‐	‐	2023	nil	305,715
	45,731	Nov‐19	2.87	‐	‐	2023	nil	131,019
	31,789	Nov‐20	1.07	‐	‐	2024	nil	33,982
	31,789	Nov‐20	1.51	‐	‐	2024	nil	47,874
	31,790	Nov‐20	1.80	‐	‐	2024	nil	57,222
Peter Adams	20,000	Sep‐17	3.18	100%	‐	2021	nil	63,558
	22,000	Sep‐18	2.27	‐	‐	2022	nil	49,823
	67,988	Jan‐19	2.29	‐	‐	2022	nil	155,418
	40,000	Feb‐19	2.28	100%	‐	2021	nil	91,352
	40,000	Aug‐19	2.48	‐	‐	2023	nil	99,200
	27,515	Sep‐19	2.80	‐	‐	2023	nil	77,097
Matt Glasner	22,000	Jan‐19	2.29	‐	100%	2022	nil	‐
	44,811	Sep‐19	2.80	‐	100%	2023	nil	‐

Notes:

(A) The percentage forfeited in the year represents the reduction from the maximum number of performance rights available to vest due to the performance hurdles not being achieved or due to the resignation of the executive.

(B) The minimum value of performance rights yet to vest is $nil as the executives may not achieve the required performance hurdles or may terminate their employment prior to vesting.

(C) The maximum values presented above are based on the values calculated using the Black‐Scholes methodology as applied in estimating the value of performance rights for employee benefit expense purposes.

Remuneration Report (audited) cont.

7.3. Performance rights over equity instruments granted as compensation

The movement during the reporting year in the number of performance rights over ordinary shares in the Company held, directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:

For the year ended 30 June 2021 Held at 1 July 2020 Granted as compensation Exercised Other changes	Held at 30 June 2021 Vested during the year Vested and exercised at 30 June 2021
Executive KMP Peter Adams 217,503 ‐ (60,000) ‐ John Ruthven 152,438 95,368 ‐ ‐ Matt Glasner 66,811 ‐ ‐ (66,811)
	157,503 60,000 60,000
	247,806 ‐ ‐
	‐ ‐ ‐

							Vested and
For the year ended	Held at	Granted as		Other	Held at	Vested during	exercised at 30
30 June 2020	1 July 2019	compensation	Exercised	changes	30 June 2020	the year	June 2020
Executive KMP
Peter Adams	149,988	67,515	‐	‐	217,503	‐	‐
John Ruthven	‐	152,438	‐	‐	152,438	‐	‐
Matt Glasner	22,000	44,811	‐	‐	66,811	‐	‐

Performance rights expire on the earlier of their expiry date or termination of the individual’s employment.

Remuneration Report (audited) cont.

7.4. Movement in shares

The movement during the reporting period in the number of ordinary shares in the Company held, directly, indirectly or beneficially, by each KMP, including their related parties, is as follows:

			Received on
			exercise of
For the year ended 30 June	Held at		performance	Other		Held at
2020	1 July 2020	Purchases	rights	changes	Sales	30 June 2021
Executive KMP
Peter Adams	10,000	14,900	60,000	‐	(69,900)	15,000
Directors
Executive
John Ruthven	‐	20,000	‐	‐	‐	20,000
Non‐executive
Peter Lloyd	27,000	‐	‐	‐	‐	27,000
Allan Brackin	‐	50,000	‐	‐	‐	50,000
Garry Dinnie	9,000	5,000	‐	‐	‐	14,000
Anne Myers	9,000	8,000	‐	‐	‐	17,000
Paul Brandling1	39,338	4,464	‐	‐	‐	43,802
Nick Abrahams1	13,446	‐	‐	‐	‐	13,446

1 'Held 30 June 2021' value represents holding on last day as Key Management Personnel

			Received on
			exercise of
For the year ended 30 June	Held at		performance	Other		Held at
2020	1 July 2019	Purchases	rights	changes	Sales	30 June 2020
Executive KMP
Peter Adams	10,000	‐	‐	‐	‐	10,000
Directors
Non‐executive
Paul Brandling	35,306	4,032	‐	‐	‐	39,338
Nick Abrahams	13,446	‐	‐	‐	‐	13,446
Garry Dinnie	9,000	‐	‐	‐	‐	9,000
Peter Lloyd	27,000	‐	‐	‐	‐	27,000
Anne Myers	‐	9,000	‐	‐	‐	9,000

Shareholdings at the date of the Directors’ Report for existing Key Management Personnel remain unchanged.

7.5. Other Transactions with KMP

Apart from the details disclosed in this note, no Director has entered into a material contract with the Company since the end of the previous financial year and there were no material contracts involving Directors’ interests existing at year end.

There were no other transactions between the KMP, or their personally related entities, and the Company.

Remuneration Report (audited) cont.

8. About this report

8.1. Basis for preparation of 2021 remuneration report

The information in this Remuneration Report has been prepared based on the requirements of the Corporations Act 2001 and applicable accounting standards. The Remuneration Report is designed to provide shareholders with a clear and detailed understanding of the Company's remuneration framework, and the link between our remuneration policies and Company performance. The Remuneration Report details the remuneration framework for the Company's KMP. This report has been audited.

8.2. Remuneration Governance

The Committee is responsible for developing the remuneration framework for IR's Executives and making recommendations related to remuneration to the Board. The Committee develops the remuneration philosophy and policies for Board approval.

The responsibilities of the Committee are outlined in their Charter, which is reviewed annually by the Board. The key responsibilities of the Committee include:

Advising the Board on IR’s policy for Executive and Director remuneration
Making recommendations to the Board on the remuneration arrangements for Executives and Directors to ensure they are aligned with IR’s vision and are set competitively to the market
Approving KMP terms of employment

In making recommendations to the Board, the Committee reviews the appropriateness of the nature and amount of remuneration to Executives and Non‐executive Directors on an annual basis. In carrying out its duties, the Committee can engage external advisors who are independent of management.

Corporate Governance Statement

This statement outlines the main corporate governance practices that were in place throughout the financial year, which comply with the ASX Corporate Governance Council recommendations, unless otherwise stated.

Board of Directors and its committees

Role of the board

The board’s primary role is the protection and enhancement of long‐term shareholder value.

To fulfil this role, the board is responsible for the overall corporate governance of the consolidated entity including evaluating and approving its strategic direction, approving and monitoring capital expenditure, setting remuneration, appointing, removing and creating succession policies for Directors and senior executives, establishing and monitoring the achievement of management goals and assessing the integrity of internal control and management information systems. It is also responsible for approving and monitoring financial and other reporting.

Board process

To assist in the execution of its responsibilities, the Board has established a number of board committees including a Nomination and Remuneration Committee, an Audit and Risk Committee and a Strategy Committee. These committees have written mandates and operating procedures, which are reviewed on a regular basis. The board has also established a framework for the management of the consolidated entity including board‐endorsed policies, a system of internal control, a business risk management process and the establishment of appropriate ethical standards.

The full board currently holds twelve scheduled meetings each year and any extraordinary meetings at such other times as may be necessary to address any specific matters that may arise.

The agenda for its meetings is prepared in conjunction with the chairman, chief executive officer and company secretary. Standing items include strategic matters for discussion, the CEO’s report, financial reports, key performance indicator reports and presentations by key executives and external industry experts. Board papers are circulated in advance. Directors have other opportunities, including visits to operations, for contact with a wider group of employees.

Director education

The consolidated entity follows an induction process to educate new Directors about the nature of the business, current issues, the corporate strategy and expectations of the consolidated entity concerning performance of Directors. In addition executives make regular presentations to the board to ensure its familiarity with operational matters. Directors are expected to access external continuing education opportunities to update and enhance their skills and knowledge.

Independent advice and access to company information

Each Director has the right of access to all relevant company information and to the company’s executives and, subject to prior consultation with the chairman, may seek independent professional advice from a suitably qualified adviser at the Company’s expense. A copy of the advice received by the Director is made available to all other members of the board.

Corporate Governance Statement cont.

Composition of the board

The names of the Directors of the company in office at the date of this report are set out on pages 10 to 11 of this report. Director profiles are also provided on the company's website: www.ir.com.

The company’s constitution provides for the board to consist of between three and twelve members. At 30 June 2021 the board members were comprised as follows:

Mr Peter Lloyd – Independent Non‐Executive Director (Chairman)
Mr John Ruthven – Chief Executive Officer and Managing Director
Mr Allan Brackin – Independent Non‐Executive Director
Mr Garry Dinnie – Independent Non‐Executive Director
Ms Anne Myers – Independent Non‐Executive Director
Mr James Scott – Independent Non‐Executive Director

At each Annual General Meeting one‐third of Directors, any Director who has held office for three years and any Director appointed by Directors in the preceding year must retire, then being eligible for re‐election. The CEO is not required to retire by rotation.

The composition of the board is reviewed on a regular basis to ensure that the board has the appropriate mix of expertise and experience. When a vacancy exists, through whatever cause, or where it is considered that the board would benefit from the services of a new Director with particular skills, the Nomination and Remuneration Committee, in conjunction with the board, determines the selection criteria for the position based on the skills deemed necessary for the board to best carry out its responsibilities. The committee then selects a panel of candidates and the board appoints the most suitable candidate who must stand for election at the next general meeting of shareholders.

The Company Secretary is accountable directly to the board, through the chair, on all matters to do with the proper functioning of the board.

Nomination and Remuneration Committee

The Nomination and Remuneration Committee has a documented charter, approved by the board. The Nomination and Remuneration Committee is a committee of the board of Directors and is empowered by the board to assist it in fulfilling its duties to shareholders and other stakeholders. In general, the committee has responsibility to: 1) ensure the company has appropriate remuneration policies designed to meet the needs of the company and to enhance corporate and individual performance and 2) review board performance, select and recommend new Directors to the board and implement actions for the retirement and re‐ election of Directors. The Nomination and Remuneration Committee Charter may be viewed on the company's website: www.ir.com.

Corporate Governance Statement cont.

Responsibilities Regarding Remuneration

The Committee reviews and makes recommendations to the board on:

The appointment, remuneration, performance objectives and evaluation of the chief executive officer.
The remuneration packages for senior executives.
The Company’s recruitment, retention and termination policies and procedures for senior executives.
Executive remuneration and incentive policies.
Policies on employee incentive plans, including equity incentive plans.
Superannuation arrangements.
The remuneration framework and policy for non‐executive Directors.
Remuneration levels are competitively set to attract and retain the most qualified and experienced Directors and senior executives. The Remuneration Committee obtains independent advice on the appropriateness of remuneration packages, given trends in comparative companies and industry surveys. Remuneration packages include a mix of fixed remuneration, performance‐based remuneration and equity‐based remuneration.

Responsibilities Regarding Nomination

The Committee develops and makes recommendations to the board on:

The CEO and senior executive succession planning.
The range of skills, experience and expertise needed on the board and the identification of the particular skills, experience and expertise that will best complement board effectiveness.
A plan for identifying, reviewing, assessing and enhancing Director competencies.
Board succession plans to maintain a balance of skills, experience and expertise on the board.
Evaluation of the board’s performance.
Appointment and removal of Directors.
Appropriate composition of committees.

The terms and conditions of the appointment of non‐executive Directors are set out in a letter of appointment, including expectations for attendance and preparation for all board meetings, expected time commitments, procedures when dealing with conflicts of interest, and the availability of independent professional advice.

The performance review of the Chief Executive Officer and the board was undertaken in the reporting period identifying both strengths and development actions. The performance review of other senior management was conducted by the Chief Executive Officer in the reporting period.

The members of the Nomination and Remuneration Committee during the year were:

Mr Allan Brackin – Independent Non‐Executive Director (Chair from 12 May 2021)
Mr Garry Dinnie – Independent Non‐Executive Director (Chair to 12 May 2021)
Mr James Scott – Independent Non‐Executive Director (member from 13 May 2021)
Mr Paul Brandling– Independent Non‐Executive Director (member to 20 March 2021)
Ms Anne Myers – Independent Non‐Executive Director (member to 12 May 2021)

A matrix of skills and diversity of the board as required by the ASX corporate governance recommendations is available on the Company’s website at www.ir.com.

The Nomination and Remuneration Committee meets at least twice a year and as required. The Committee met eight times during the year under review.

Corporate Governance Statement cont.

Audit and Risk Committee

The Audit and Risk Committee has a documented charter, approved by the board. The charter states that all members must be non‐executive Directors with a majority being independent. The chairman may not be the chairman of the board. The committee advises on the establishment and maintenance of a framework of risk management and internal control of the consolidated entity.

The members of the Audit and Risk Committee during the year were:

Mr Garry Dinnie – Independent Non‐Executive (Chair)
Mr Peter Lloyd – Independent Non‐Executive Director (from 15 October 2020)
Ms Anne Myers – Independent Non‐Executive Director
Mr Nick Abrahams – Independent Non‐Executive Director (to 25 November 2020)

During the year, the Audit and Risk Committee provided the Board with updates to the Company’s risk management register (with the Board approving this document).

The external auditor, Chief Executive Officer and Chief Financial Officer are invited to Audit and Risk Committee meetings at the discretion of the committee. The committee met four times during the year and committee members’ attendance record is disclosed in the table of Directors’ meetings on page 13.

The external auditor met with the Audit and Risk Committee/Board four times during the year, two of which included time without the presence of executive management. The Chief Executive Officer and the Chief Financial Officer declared in writing to the board that the company’s financial reports for the year ended 30 June 2021 comply with accounting standards and present a true and fair view, in all material respects, of the company’s financial condition and operational results.

The main responsibilities of the Audit and Risk Committee as set out in the charter include:

Serve as an independent party to monitor the financial reporting process and internal control systems.
Review the performance and independence of the external auditors and make recommendations to the board regarding the appointment or termination of the auditors.
Review the scope and cost of the annual audit, negotiating and recommending the fee for the annual audit to the board.
Review the external auditor’s management letter and responses by management.
Provide an avenue of communication between the auditors, management and the board.
Monitor compliance with all financial statutory requirements and regulations.
Review financial reports and other financial information distributed to shareholders so that they provide an accurate reflection of the financial health of the company.
Monitor corporate risk management and assessment processes, and the identification and management of strategic and operational risks.
Enquire of the auditors of any difficulties encountered during the audit, including any restrictions on the scope of their work, access to information or changes to the planned scope of the audit.

The Audit and Risk Committee reviews the performance of the external auditors on an annual basis and normally meets with them during the year as follows:

To discuss the external audit plans, identifying any significant changes in structure, operations, internal controls or accounting policies likely to impact the financial statements and to review the fees proposed for the audit work to be performed.

Corporate Governance Statement cont.

Prior to announcement of results:

To review the half‐year and preliminary final report prior to lodgement with the ASX, and any significant adjustments required as a result of the auditor’s findings.
To recommend the Board approval of these documents.
Review the results and findings of the auditor, the adequacy of accounting and financial controls, and to monitor the implementation of any recommendations made.

To finalise half‐year and annual reporting:

Review the draft financial report and recommend board approval of the financial report.
As required, to organise, review and report on any special reviews or investigations deemed necessary by the board.

Strategy Committee

The Strategy Committee has a documented charter, approved by the board and is responsible for reviewing strategy and recommending strategies to the board to enhance the company’s long‐term performance. The Board appoints a member of the committee to be chairman.

The members of the Strategy Committee during the year were:

Ms Anne Myers – Independent Non‐Executive (Chair from 13 May 2021)
Mr Peter Lloyd – Independent Non‐Executive (Chair to 12 May 2021)
Mr James Scott– Independent Non‐Executive Director (from 13 May 2021)
Mr Paul Brandling– Independent Non‐Executive Director (member to 20 March 2021)

The Strategy Committee is responsible for:

Reviewing and assisting in defining current strategy.
Assessing new strategic opportunities, including M&A proposals and intellectual property developments or acquisitions.
Staying close to the business challenges and monitor operational implementation of strategic plans.
Endorsing strategy and business cases for consideration by the full board.

The Committee met three times during the year under review.

Risk management

Under the Audit and Risk Charter, the Audit and Risk Committee reviews the status of business risks to the consolidated entity through integrated risk management programs ensuring risks are identified, assessed and appropriately managed and communicated to the board. The risk framework is reviewed annually to ensure risks are managed within the risk appetite set by the Board. Major business risks arise from such matters as actions by competitors, government policy changes and the impact of exchange rate movements. The Audit and Risk Committee Charter may be viewed on the company's website: www.ir.com.

Comprehensive policies and procedures are established such that:

Capital expenditure above a certain threshold requires board approval.
Financial exposures are controlled, including the use of derivative instruments.
Risks are identified and managed, including internal audit, privacy, insurances, business continuity and compliance.
Business transactions are properly authorised and executed.

The Chief Executive Officer and the Chief Financial Officer have declared, in writing to the board that the Company’s financial reports are founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board.

Corporate Governance Statement cont.

Internal control framework

The board is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities. The board has instigated the following internal control framework:

Financial reporting – Monthly actual results are reported against budgets approved by the Directors and revised forecasts for the year are prepared monthly.
Continuous disclosure – Identify matters that may have a material effect on the price of the Company’s securities, notify them to the ASX and post them to the Company’s website.
Quality and integrity of personnel – Formal appraisals are conducted at least annually for all employees.
Investment appraisals – Guidelines for capital expenditure include annual budgets, detailed appraisal and review procedures and levels of authority.

Internal Audit

The Company does not have an internal audit function but utilises its financial resources as needed to assist the board in ensuring compliance with internal controls.

Material Exposure to economic, environmental and social sustainability risks

Exposure to economic, environment and social sustainability risks for the Company are routinely examined through the risk management framework, overseen by the Audit and Risk Committee. The Company considers risk in the conduct of its operations and outlines exposure to specific economics and operating risk in the notes to the financial statements. With the exception of the current pandemic, there was no material exposure to environmental or social sustainability risks during the period.

Ethical standards

All Directors, managers and employees are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the consolidated entity. Every employee has a nominated supervisor to whom they may refer any issues arising from their employment.

Conflict of interest

Each Director must keep the board advised, on an ongoing basis, of any interest that could potentially conflict with those of the Company. Where the board considers that a significant conflict exists the Director concerned does not receive the relevant board papers and is not present at the meeting whilst the item is considered. The board has developed procedures to assist Directors to disclose potential conflicts of interest. Details of Director related entity transactions with the consolidated entity are set out in Remuneration report page 17 to 29.

Code of conduct

The consolidated entity has advised each Director, manager and employee that they must comply with the code of conduct. The code aligns behaviour of the board and management with the code of conduct by maintaining appropriate core values and objectives. The Code of Conduct may be viewed on the Company’s website and includes:

Responsibility to the community and fellow employees to act with honesty and integrity, and without prejudice.
Compliance with laws and regulations in all areas where the company operates, including employment opportunity, occupational health and safety, trade practices, fair dealing, privacy, drugs and alcohol, and the environment.
Dealing honestly with customers, suppliers and consultants.
Ensuring reports and other information are accurate and timely.
Proper use of company resources, avoidance of conflicts of interest and use of confidential or proprietary information.

Corporate Governance Statement cont.

Equal Employment Opportunity

The Company has a policy on Equal Employment Opportunity with the provision that commits to a workplace that is free of discrimination of all types. It is Company policy to hire, develop and promote individuals solely on the basis of merit and their ability to perform without prejudice to race, colour, creed, national origin, religion, gender, age, disability, sexual orientation, marital status, membership or non‐membership of a trade union, status of employment (whether full or part‐time) or any other factors prohibited by law. The board is satisfied that the Equal Employment Opportunity policy is sufficient without the need to further establish a separate policy on gender diversity as required by the ASX Corporate Governance Council recommendation.

Trading in company securities by Directors and employees

Directors and employees may acquire shares in the company, but are prohibited from dealing in company shares whilst in possession of price sensitive information, and except in the periods:

From 24 hours to 56 days after the release of the company’s half‐yearly results announcement.
From 24 hours to 56 days after release of the company’s annual results announcement.
Directors must obtain the approval of the Chairman of the board and notify the Company Secretary before they buy or sell shares in the company, subject to board veto. The company advises the ASX of any transactions conducted by Directors in shares in the company. The Company's Trading in Securities policy may be viewed on the Company's website: www.ir.com.

Participants in the Company’s Performance Rights program are specifically prohibited to hedge the exposure to the Integrated Research share price during the vesting period in respect of the unvested performance rights. For the purposes of this policy, hedging includes the entry into any transaction, arrangement or financial product which operates to limit the economic risk of a security holding In the Company and includes financial instruments such as equity swaps and contracts for differences.

Communication with shareholders

The board provides shareholders with information using a comprehensive continuous disclosure policy which includes identifying matters that may have a material effect on the price of the company’s securities, notifying them to the ASX, posting them on the Company’s website (www.ir.com), and issuing media releases. Disclosures under this policy are in addition to the periodic and other disclosures required under the ASX Listing Rules and the Corporations Act. More details of the policy are available on the Company’s website.

The Chief Executive Officer and the Chief Financial Officer are responsible for interpreting the Company’s policy and where necessary informing the board. The Company Secretary is responsible for all communication with the ASX.

The board encourages full participation of shareholders at the Annual General Meeting to ensure a high level of accountability and identification with the consolidated entity’s strategy and goals. Important issues are presented to the shareholders as single resolutions. The external auditor is requested to attend the Annual General Meetings to answer any questions concerning the audit and the content of the auditor’s report.

The shareholders are requested to vote on the appointment and aggregate remuneration of Directors, the granting of options and shares to Directors, the Remuneration Report and changes to the Constitution. Copies of the Constitution are available to any shareholder who requests it.

Financial Statements

Contents	Contents	Page
Consolidated statement of comprehensive income		38
Consolidated statement of financial position		39
Consolidated statement of changes in equity		40
Consolidated statement of cash flows		41
Notes	to the financial statements	42
1.	Significant accounting policies	42
2.	Segment reporting	52
3.	Revenue from contracts with customers	54
4.	Expenditure	54
5.	Other gains and (losses)	55
6.	Finance income	55
7.	Auditors’ remuneration	55
8.	Income tax	56
9.	Earnings per share	56
10.	Cash and cash equivalents	57
11.	Trade and other receivables	57
12.	Other assets	58
13.	Other financial assets	59
14.	Property, plant and equipment	59
15.	Deferred tax assets and liabilities	60
16.	Intangible assets	61
17.	Goodwill	63
18.	Trade and other payables	63
19.	Employee benefits	63
20.	Provisions	65
21.	Lease assets and liabilities	65
22.	Other financial liabilities	67
23.	Capital and reserves	67
24.	Financial instruments	68
25.	Consolidated entities	73
26.	Reconciliation of cash flows from operating activities	73
27.	Key management personnel disclosures	74
28.	Related parties	74
29.	Parent entity disclosures	74
30.	Subsequent events	75

Consolidated statement of comprehensive income

For the year ended 30 June 2021

For the year ended 30 June 2021
In thousands of AUD Notes	Consolidated
	2021 2020
Revenue from contracts with customers Licence fees Maintenance fees Subscription fees Testing solution services Professional services	47,359 72,098 18,128 23,945 312 697 4,318 5,543 8,376 8,630
Total revenue 3	78,493 110,913
Expenditure Research and development expenses Sales, professional services and marketing expenses General and administration expenses	(19,101) (17,388) (43,378) (54,560) (6,235) (6,232)
Total expenditure 4	(68,714) (78,180)
Other gains and (losses) 5	(1,310) (1,868)
Profit before finance income and tax Finance income 6	8,469 30,865 838 606
Profit before tax Income tax expense 8	9,307 31,471 (1,372) (7,417)
Profit for the year Other comprehensive income Items that may be reclassified subsequently to profit Gain/(loss) on cash flow hedge taken to equity Foreign exchange translation differences	7,935 24,054 ‐ 51 (1,496) 337
Other comprehensive income	(1,496) 388
Total comprehensive income for the year	6,439 24,442
Profit attributable to: Members of Integrated Research Total comprehensive income attributable to: Members of Integrated Research Earnings per share attributable to members of Integrated Research: Basic earnings per share (AUD cents) 9 Diluted earnings per share (AUD cents) 9	7,935 24,054 6,439 24,442 4.61 14.00 4.60 13.94

The consolidated statement of comprehensive income is to be read in conjunction with the notes to the financial statements set out on pages 42 to 75.

Consolidated statement of financial position

As at 30 June 2021

In thousands of AUD Notes	Consolidated
	2021 2020
Current assets Cash and cash equivalents 10 Trade and other receivables 11 Current tax assets Other current assets 12	12,149 9,744 51,918 57,853 693 64 3,345 2,963
Total current assets	68,105 70,624
Non‐current assets Trade and other receivables 11 Other financial assets 13 Property, plant and equipment 14 Right‐of‐use assets 21 Deferred tax assets 15 Intangible assets 16 Other non‐current assets 12	27,593 29,399 175 236 1,255 1,883 6,003 6,367 1,183 1,404 29,962 29,052 799 872
Total non‐current assets	66,970 69,213
Total assets	135,075 139,837
Current liabilities Trade and other payables 18 Provisions 20 Income tax liabilities Deferred revenue Lease liabilities 21 Other financial liabilities 22	10,181 10,213 4,045 3,852 126 2,192 15,526 20,767 1,655 1,372 192 37
Total current liabilities	31,725 38,433
Non‐current liabilities Borrowings 24 Deferred tax liabilities 15 Provisions 20 Deferred revenue Lease liabilities 21 Other non‐current financial liabilities 22	6,658 5,000 7,044 6,450 665 713 861 1,556 4,767 5,142 13 21
Total non‐current liabilities	20,008 18,882
Total liabilities	51,733 57,315
Net assets	83,342 82,522
Equity Issued capital 23 Reserves 23 Retained earnings	1,667 1,667 4,411 5,079 77,264 75,776
Total equity	83,342 82,522

The consolidated statement of financial position is to be read in conjunction with the notes to the financial statements set out on pages 42 to 75.

Consolidated statement of changes in equity

For the year ended 30 June 2021

Consolidated				Employee
	Share	Hedging	Translation	benefit	Retained
In thousands of AUD	capital	reserve	reserve	reserve	earnings	Total
Balance at 1 July 2020	1,667	‐	830	4,249	75,776	82,522
Profit for the year	‐	‐	‐	‐	7,935	7,935
Other comprehensive income/(loss) for the year	‐	‐	(1,496)	‐	‐	(1,496)
Total comprehensive income/(loss) for the year	‐	‐	(1,496)	‐	7,935	6,439
Share based payments expense	‐	‐	‐	828	‐	828
Dividends to shareholders	‐	‐	‐	‐	(6,447)	(6,447)
Balance at 30 June 2021	1,667	‐	(666)	5,077	77,264	83,342

Consolidated				Employee
	Share	Hedging	Translation	benefit	Retained
In thousands of AUD	capital	reserve	reserve	reserve	earnings	Total
Balance at 1 July 2019	1,667	(51)	493	3,536	64,182	69,827
Profit for the year	‐	‐	‐	‐	24,054	24,054
Other comprehensive income for the	‐	51	337	‐	‐	388
year
Total comprehensive income for the	‐	51	337	‐	24,054	24,442
year
Share based payments expense	‐	‐	‐	713	‐	713
Dividends to shareholders	‐	‐	‐	‐	(12,460)	(12,460)
Balance at 30 June 2020	1,667	‐	830	4,249	75,776	82,522

The consolidated statement of changes in equity is to be read in conjunction with the notes to the financial statements set out on pages 42 to 75.

Consolidated statement of cash flows

For the year ended 30 June 2021

In thousands of AUD Notes	Consolidated
	2021 2020
Cash flows from operating activities Cash receipts from customers Proceeds from government grants Cash paid to suppliers and employees	78,807 96,369 626 ‐ (55,105) (66,024)
Cash generated from operations Income taxes paid	24,328 30,345 (3,252) (6,193)
Net cash provided by operating activities 26	21,076 24,152
Cash flows from investing activities Payments for capitalised development Payments for property, plant and equipment Payments for intangible asset Interest received	(11,985) (13,962) (257) (320) ‐ (922) 1,440 992
Net cash used in investing activities	(10,802) (14,212)
Cash flows from financing activities Proceeds from borrowings 24 Repayment of borrowings 24 Payment of principal portion of lease liabilities Interest payments Payment of dividend 23	14,450 14,000 (12,792) (9,000) (1,652) (1,872) (602) (386) (6,447) (12,460)
Net cash used in financing activities	(7,043) (9,718)
Net increase in cash and cash equivalents Cash and cash equivalents at 1 July Effects of exchange rate changes on cash	3,231 222 9,744 9,316 (826) 206
Cash and cash equivalents at 30 June 2021 10	12,149 9,744

The consolidated statement of cash flows is to be read in conjunction with the notes to the financial statements set out on pages 42 to 75.

Notes to the Financial Statements

For the year ended 30 June 2021

Note 1: Significant accounting policies

Integrated Research Limited (the “Company”) is a company domiciled in Australia. The financial report of the Company for the year ended 30 June 2021 comprises the Company and its subsidiaries (together referred to as the “consolidated entity”).

The financial report was authorised for issue by the Directors on 19 August 2021.

Integrated Research is a for‐profit Company limited by ordinary shares.

A. Statement of Compliance

The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting Standards and Interpretations and the Corporations Act 2001. Financial statements of the consolidated entity comply with International Financial Reporting Standards and interpretations adopted by the International Accounting Standards Board.

B. Basis of Preparation

The financial statements are presented in Australian dollars and are prepared on a going concern basis using historical cost, with the exception of derivatives, which are at fair value.

The company is of a kind referred to in ASIC Legislative Instrument 2016/191 and in accordance with that Class Order, amounts in the financial report and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated.

The preparation of financial statements in conformity with Australian Accounting Standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. 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 judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. These accounting policies have been consistently applied by each entity in the consolidated entity.

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.

New accounting standards and Interpretations

The accounting policies and methods of computation adopted in the preparation of the financial report are consistent with those adopted and disclosed in Integrated Research Limited's 2020 annual financial report, except for the adoption of the following new standards for the 2021 financial year.

Standard/Interpretation

Conceptual Framework for Financial Reporting

AASB 2019‐1 Amendments to AASs – References to the Conceptual Framework

AASB 2018‐7 Amendments to AASs – Definition of Material

AASB 2019‐5 Amendments to AASs – Disclosure of the Effect of New IFRS Standards Not Yet Issued in Australia

Notes to the Financial Statements

Note 1: Significant accounting policies (continued)

Standards and Interpretations issued not yet effective

At the date of authorisation of the financial report, a number of standards and Interpretations were in issue but not yet effective.

Initial application of the following Standards is not expected to materially affect any of the amounts recognised in the financial statements, but may change the disclosures made in relation to the consolidated entity’s financial statements:

	Effective for annual	Expected to be
	reporting periods	initially applied in the
Standard/Interpretation	beginning on or after	financial year ending
AASB 2020‐1 Amendments to AASs – Classification of Liabilities as Current or Non‐	1 Jan 2022	30 June 2023
current
AASB 2020‐3 Amendments to AASs – Annual Improvements 2018–2020 and Other Amendments	1 Jan 2022	30 June 2023
Reference to the Conceptual Framework – Amendments to IFRS 3	1 Jan 2022	30 June 2023
Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16	1 Jan 2022	30 June 2023
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37	1 Jan 2022	30 June 2023
IFRS 9 Financial Instruments – Fees in the ’10 per cent’ test for derecognition of financial liabilities	1 Jan 2022	30 June 2023

C. Basis of consolidation

Subsidiaries are entities controlled by the Company. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if and only if the Company has power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee). Exposure, or rights, to variable returns from its involvement with the investee, and the ability to use its power over the investee to affect its returns.

When the Company has less than a majority of the voting or similar rights of an investee, the Company considers all relevant facts and circumstances in assessing whether it has power over an investee including: the contractual arrangement with the other vote holders of the investee; rights arising from other contractual arrangements and the Company’s voting rights and potential voting rights.

The Company re‐assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the Company loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Company gains control until the date the Company ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Company and to the non‐controlling interests, even if this results in the non‐controlling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Company’s accounting policies. All intra‐group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Company are eliminated in full on consolidation.

Notes to the Financial Statements

Note 1: Significant accounting policies (continued)

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Company loses control over a subsidiary, it: de‐recognises the assets (including goodwill) and liabilities of the subsidiary; de‐ recognises the carrying amount of any non‐controlling interests; de‐recognises the cumulative translation differences recorded in equity; recognises the fair value of the consideration received; recognises the fair value of any investment retained; recognises any surplus or deficit in profit or loss; reclassifies the parent’s share of components previously recognised in OCI to profit or loss or retained earnings, as appropriate, as would be required if the Company had directly disposed of the related assets or liabilities.

D. Foreign currency

In preparing the financial statements of the individual entities' transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the year end date are translated to Australian dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss. Non‐monetary assets and liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate at the date of the transaction. Non‐monetary assets and liabilities denominated in foreign currencies that are stated at fair value are translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined.

On consolidation, the assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on consolidation are translated to Australian dollars at foreign exchange rates ruling at the year end date. The revenues and expenses of foreign operations are translated to Australian dollars at rates approximating the foreign exchange rates ruling at the dates of the transactions. Foreign exchange differences arising on retranslation are recognised directly in other comprehensive income and accumulated in the translation reserve.

E. Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:

i) in the principal market for the assets or liability; or

ii) in the absence of a principal market, in the most advantageous market for the asset or liability.

The principal or the most advantageous market must be accessible by the Company.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

A fair value measurement of a non‐financial asset takes into account a market participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

The Company uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as whole:

Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.

Notes to the Financial Statements

Note 1: Significant accounting policies (continued)

For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Company determines whether transfers have occurred between levels in the hierarchy by re‐assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

F. Derivative financial instruments

The consolidated entity uses derivative financial instruments to hedge its exposure to foreign exchange risks arising from operational activities. In accordance with its treasury policy, the consolidated entity does not hold or issue derivative financial instruments for trading purposes.

Derivative financial instruments are recognised initially at fair value. Subsequent to initial recognition, derivative financial instruments are stated at fair value. The gain or loss on remeasurement to fair value is recognised immediately in profit or loss. However, where derivatives qualify for hedge accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged.

The fair value of forward exchange contracts is their quoted market price at the year end date, being the present value of the quoted forward price.

G. Hedging

On entering into a hedging relationship, the consolidated entity normally designates and documents the hedge relationship and risk management objective and strategy for undertaking the hedge. The documentation includes identification of the hedging instrument, the hedged item or transaction, the nature of the risk being hedged and how the entity will assess the hedging instrument’s effectiveness in offsetting the exposure to changes in the item’s fair value or cash flows attributable to the hedged risk. Such hedges are expected to be highly effective in offsetting changes in fair value or cash flows and are assessed on an ongoing basis to determine that they actually have been highly effective throughout the financial reporting periods for which they are designated.

For cash flow hedges, the associated cumulative gain or loss is removed from equity and recognised in profit or loss in the same period or periods during which the hedged forecast transaction affects profit or loss. The ineffective part of any gain or loss is recognised immediately in the profit or loss.

Where financial instruments entered into by the Company are not designated as a hedging instrument the gain or loss is recognised immediately the profit and loss.

H. Property, plant and equipment

Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment losses (see accounting policy (M)). The cost of acquired assets includes (i) the initial estimate at the time of installation and during the period of use, when relevant, of the costs of dismantling and removing the items and restoring the site on which they are located, and (ii) changes in the measurement of existing liabilities recognised for these costs resulting from changes in the timing or outflow of resources required to settle the obligation or from changes in the discount rate.

Where parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items of property, plant and equipment.

Depreciation is provided on property, plant and equipment. Depreciation 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 annually, with the effect of any changes recognised on a prospective basis.

Notes to the Financial Statements

Note 1: Significant accounting policies (continued)

The following useful lives are used in the calculation of depreciation:

Leasehold improvements 6 to 10 years
Plant and equipment 4 to 8 years

I. Leases

The Company assesses at contract inception whether a contract is, or contains, a lease. The Company applies a single recognition and measurement approach for all leases, except for short term leases and low‐value assets. The Company recognises lease liabilities to make lease payments and right‐of‐use assets representing the right to use the underlying asset.

Right‐of‐use assets

The right‐of‐use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses. Right‐of‐use assets are depreciated on a straight‐line basis over the lease term.

Lease liabilities

At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in‐substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Company and payments of penalties for terminating a lease, if the lease term reflects the Company exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the in‐substance fixed lease payments or a change in the assessment to purchase the underlying asset.

Short‐term leases and leases of low‐value assets

The Company applies the short‐term lease recognition exemption to its short‐term leases (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low‐value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short‐term leases and leases of low‐value assets are recognised as expense on a straight‐line basis over the lease term.

Notes to the Financial Statements

Note 1: Significant accounting policies (continued)

J. Intangible Assets

Research and development

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss as incurred.

Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalised if the product or process is technically and commercially feasible and the consolidated entity has sufficient resources to complete development.

The useful lives of the capitalised assets are assessed as finite. The expenditure capitalised includes the cost of materials, direct labour and an appropriate proportion of overheads. Other development expenditure is recognised in profit or loss as an expense as incurred.

Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses (see accounting policy (M)).

Amortisation is charged to profit or loss on a straight‐line basis over the estimated useful life, but no more than three years, the exception being for the Company's next generation Prognosis Cloud platform which is amortised over five years.

Intellectual property

Intellectual property acquired from third parties is amortised over its estimated useful life, but no more than three years.

Computer software

Computer software is stated at cost and amortised on a straight‐line basis over a two and a half to three year period. SaaS arrangements are service contracts providing the Company with the right to access the cloud provider's application software over the contract period. Costs incurred to configure or customise, and the ongoing fees to obtain access to the cloud provider's application software, are recognised as operating expenses when the services are received.

Customer Relationships

Customer relationships are initially measured at fair value and amortised over the estimated useful life, but no more than five years.

K. Trade and other receivables

Trade and other receivables are stated at their amortised cost less expected credit losses. To measure the expected credit losses the utilises the simplified approach in calculating the expected credit loss and recognises a loss allowance based on a lifetime expected credit losses at each reporting date. The Company has established a provision matrix calculated based on the group historical credit loss experience adjusted for forward looking factors.

Trade receivables are written off when there is no reasonable expectation of recovery.

For the trade receivables with extended payment terms beyond twelve months, the receivable is initially recognised at fair value less transaction costs calculated by applying a discount to the contracted cash flows. The discount rate applied is based upon the corporate borrowing rate that would apply to the type of customer, taking into account the customers’ credit worthiness based on its size and jurisdiction.

L. Cash and cash equivalents

Cash and cash equivalents comprises cash balances and call deposits with an original maturity of three months or less.

Notes to the Financial Statements

Note 1: Significant accounting policies (continued)

M. Impairment

The carrying amounts of the consolidated entity’s assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Refer to Note 1 (U) for Goodwill impairment considerations.

For intangible assets that are not yet available for use, the recoverable amount is estimated at each year end date.

An impairment loss is recognised whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognised in profit or loss unless the asset has previously been revalued, in which case the impairment loss is recognised as a reversal to the extent of that previous revaluation with any excess recognised through profit or loss.

The recoverable amount of other assets is the greater of their 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 their risk specific to the asset. For an asset that does not generate largely independent cash inflows, the recoverable amount is determined for the cash‐generating unit to which the asset belongs.

N. Employee benefits

Superannuation

Obligations for contributions to defined contribution pension plans are recognised as an expense in profit or loss as incurred. There are no defined benefit plans in operation.

Long‐term service benefits

The consolidated entity’s net obligation in respect of long‐term service benefits, other than pension plans, is the amount of future benefit that employees have earned in return for their service in the current and prior periods. The obligation is calculated using expected future increases in wage and salary rates including related on‐costs and expected settlement dates, and is discounted using the rates attached to the high quality corporate bond rate at the year end date which have maturity dates approximating to the terms of the consolidated entity’s obligations.

Share‐based payment transactions

The performance rights programmes allow the consolidated entity’s employees to acquire shares of the Company. The fair value of performance rights granted are recognised as an employee expense with a corresponding increase in equity. The fair value is measured at grant date and spread over the period during which the employees become unconditionally entitled to the performance rights. The fair value of the instrument granted is measured using a Black‐Scholes methodology, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options or performance rights that are expected to vest.

Wages, salaries, annual leave, and non‐monetary benefits

Liabilities for employee benefits for wages, salaries and annual leave represent present obligations resulting from employees’ services provided to the year end date, calculated at undiscounted amounts based on remuneration wage and salary rates that the consolidated entity expects to pay as at the year end date.

O. Provisions

A provision is recognised in the statement of financial position when the consolidated entity has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows at a pre‐tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.

Notes to the Financial Statements

Note 1: Significant accounting policies (continued)

Employee benefits

Provisions for employee benefits include liabilities for annual leave and long service leave and are measured at the amounts expected to be paid when the liabilities are settled.

Make good

The make good provision is for leases undertaken by the Company. For each provision raised a corresponding asset has been recognised and is amortised over the shorter of the term of the lease or the useful life of the asset.

P. Trade and other payables

Trade and other payables are stated at their amortised cost.

Q. Revenue

Revenue from contracts with customers is recognised either at a point in time (licence fees) or over time (maintenance, SaaS, testing solutions and professional services fees), regardless of when payment is received. Amounts disclosed as revenue are net of agency commissions and discounts. Where the Company bundles the products or services, the transaction price is allocated to each performance obligation based on the proportionate stand‐alone selling prices.

Licence fees are recognised on delivery of the licence key, where the Company's contracts with customers provide the right to use the Company's intellectual property. As such, the Company's performance obligation is satisfied at the point in time which the customer receives the licence key.

Maintenance fees are recognised on a monthly basis over the term of the service agreement, which may range between one to five years. Services provided to customers under maintenance contracts include technical support and supply of software upgrades.

Subscription fees are recognised on a monthly basis over the term of the service agreement which may range between one to five years. The Company's contracts with customers provide a right of access to the Company's intellectual property (hosted on the Company's cloud environment) for the duration of the term of the contract.

Testing solutions services revenues are recognised either rateably over a service period or as services are rendered. Testing services relate to the provision of services to performing testing of customer environments.

Professional services are revenues recognised as the services are rendered, typically in accordance with the achievement of contract milestones or hours expended. Professional services include implementation and configuration services for licenced software.

Unsatisfied performance obligations are disclosed as deferred revenue on the consolidated statement of financial position. Where the Company has a multiyear non‐cancellable contractual commitment but does not expect to satisfy the performance obligation within twelve months, no deferred revenue or trade receivable is recognised.

The Company typically provides multi‐year payment terms to customers ranging between one to five years. For such contracts with customers, the transaction price is discounted using a rate that would be reflected in a separate financing transaction between the Company and the customer. This amount is recognised rateably as finance income over the payment period.

Directly related contract costs in obtaining the customer contracts are expensed unless they are incremental to obtaining the contract and the Company expects to recover those costs. These costs are recognised as contract assets and amortised over the life of the contract they relate to. The incremental costs in obtaining customer contracts for the Company relate to specified commissions paid to employees which meet the criteria of directly related contract costs.

No revenue is recognised if there are significant uncertainties regarding the recovery of the transaction price, the costs incurred or to be incurred cannot be measured reliably or there is a risk of return.

Notes to the Financial Statements

Note 1: Significant accounting policies (continued)

R. Financing income

Financing income comprises interest receivable on funds invested and the financing component of the sale of licences, less interest payable on borrowings.

S. Income tax

Income tax on the profit or loss for the periods presented comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the year end date, and any adjustment to tax payable in respect of previous years.

Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the year end date.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Additional dividend franking deficit tax that arises from the distribution of dividends are recognised at the same time as the liability to pay the related dividend.

T. Goods and Services Tax

Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), or similar taxes, except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable or payable is included as a current asset or liability in the statement of financial position.

Cash flows are included in the statement of cash flows on a gross basis. The GST components of cash flows arising from investing and financing activities, which are recoverable or payable are classified as operating cash flows.

U. Business Combination and Goodwill

Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of the consideration transferred at acquisition date measured at fair value. Any contingent consideration to be transferred by the acquirer will be recognised at fair value at the acquisition date. Changes in the fair value of the contingent consideration are recognised in the Statement of Comprehensive Income.

Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred over the net identifiable assets acquired and liabilities assumed. Goodwill is tested annually for impairment. Acquisition‐related costs are expensed as incurred and included in administrative expenses.

V. Grant income

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed.

Notes to the Financial Statements

Note 1: Significant accounting policies (continued)

W. Significant accounting judgements, estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:

Intangible assets ‐ Development

An intangible asset arising from development expenditure on an internal project is recognised only when the consolidated entity can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. Following the initial recognition of the development expenditure, the cost model is applied requiring the asset to be carried at cost less any accumulated amortisation and accumulated impairment losses. Any expenditure capitalised is amortised over the period of expected benefits from the related project commencing from the commercial release of the project. The carrying value of an intangible asset arising from development expenditure is tested for impairment annually when the asset is not yet available for use or more frequently when an indication of impairment arises during the reporting period.

Intangible assets – Goodwill

Goodwill acquired from business acquisitions is initially measured at cost. Goodwill is tested annually for impairment or earlier if changes in circumstances indicate a potential impairment, the impairment policy is explained in note 1(M). The impairment testing requires judgements over future cashflow streams and assumptions used in the calculations.

Share based payment transactions

The consolidated entity measures the cost of equity‐settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using either a Black‐Scholes or Monte Carlo methodology and applying management determined probability factors relating to non‐market vesting conditions.

Provision for expected credit losses of trade and other receivables

The Company uses a provision matrix to calculate the expected credit loss for trade and other receivables. The provision rates are based on the days overdue and differ by geography. The provision matrix is based on the historical default experience for the Company and adjusted for forward‐looking information and includes the use of macroeconomic information where appropriate. The determination of the provision rates is considered a significant estimate as it is sensitive to change in circumstances and of forecast of economic conditions. The expected credit loss also may not be representative of the customers' actual default in the future.

Income Tax

The Company regularly assesses the adequacy of income tax provisions having regard to the differing tax rules and regulations applicable in the various jurisdictions in which the Company operates. Due to the complexities of tax rules and regulations in numerous jurisdictions, matters such as the availability and timing of tax deductions and the application of the arm’s length principle to cross‐border transactions often require significant judgements and assumptions to be made. Deferred tax assets are recognised for deductible temporary differences and tax losses to the extent that it is probable that future taxable profits will be available to utilise those temporary differences and tax losses. Significant judgement is required by the Company to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits.

Notes to the Financial Statements

Note 2. Segment reporting

The Chief Operating Decision Maker (CODM), being the Chief Executive Officer, reviews a variety of information, including profit, on the performance of Prognosis solution across the group for the purpose of resource allocation.

The principal geographical regions are The Americas – Operating from the United States with responsibility for the countries in North, Central and South America, Europe – operating from the United Kingdom and Germany with responsibility for the countries in Europe, Asia Pacific – operating from Australia and Singapore with responsibility for the countries in the rest of the world, and Corporate Australia – with responsibility for research and development and corporate head office functions of the Company. Inter‐ segment pricing is determined on an arm’s length basis.

Segment profit represents the profit earned by each segment without allocation of investment revenue and income tax expense.

Information regarding these geographic segments is presented below. The accounting policies of the reportable segments are the same as the Group’s accounting policies.

Notes to the Financial Statements

Note 2. Segment reporting (continued)

In thousands of AUD	Americas Europe Asia Pacific Corporate Australia1 Eliminations Consolidated
	2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020
Sales to customers outside the consolidated entity Inter‐segment revenue Total segment revenue	54,509 75,786 12,167 17,476 11,817 17,651 ‐ ‐ ‐ 78,493 110,913 ‐ ‐ ‐ ‐ ‐ ‐ 38,430 58,134 (38,430) (58,134) ‐ ‐ 54,509 75,786 12,167 17,476 11,817 17,651 38,430 58,134 (38,430) (58,134) 78,493 110,913
Total revenue	78,493 110,913
Segment results (before finance income and tax) Results from operating activities Financing income Income tax expense	1,641 2,276 305 458 352 615 6,173 27,516 ‐ ‐ 8,470 30,865 8,470 30,865 837 606 (1,372) (7,417)
Profit for the year	7,935 24,054
Capital additions2 Depreciation and amortisation expenditure	1,580 675 4 619 3 149 75 7,114 ‐ ‐ 1,662 8,557 591 960 235 270 286 198 12,315 10,630 ‐ ‐ 13,426 12,058

	Americas (USD)	Americas (USD)	Europe (GBP)	Europe (GBP)
In local currency3	2021	2020	2021	2020
Sales to customers outside the consolidated entity	40,798	50,258	6,713	9,243
Inter‐segment sales	‐	‐	‐	‐
Total segment revenue	40,798	50,258	6,713	9,243
Segment results	1,224	1,517	168	245

1 Corporate Australia includes both the research and development, hedging and corporate head office functions of Integrated Research Limited.

2 Excludes internal development costs capitalised but includes third party assets acquired. Additions also include right‐of‐use assets.

3 Segment results represented in local currencies.

Notes to the Financial Statements

Note 3. Revenue from contracts with customers

Information regarding the disaggregation of the Company’s revenues from contracts with customers is presented below.

In thousands of AUD	Consolidated
	2021 2020
Timing of Revenue Recognition: At a point in time Over time	47,359 72,098 31,134 38,815
Total Revenue from contracts with customers	78,493 110,913
Type of product Group Collaborate Infrastructure Transact Professional services	44,000 59,818 15,874 28,657 10,243 13,808 8,376 8,630
Total Revenue	78,493 110,913

The transaction price allocated to the remaining performance obligations (unsatisfied or partially unsatisfied), which are not included above, is $8,441,000 (2020: $15,169,000) as at 30 June and is expected to be recognised as revenue in two to five years. This amount relates to contracts with customers where the Company has a multi‐year non‐cancellable contractual commitment but does not expect to satisfy the performance obligation within twelve months, and no deferred revenue or trade receivable is recognised.

Note 4. Expenditure

Total expenditure includes:

In thousands of AUD	Consolidated
	2021 2020
Employee benefits expense: Defined contribution plans Equity settled share‐based payments Other employee benefits	2,880 2,974 824 671 50,442 56,823
Depreciation and amortisation Expected credit loss provision expense	54,146 60,468 13,427 12,058 277 899

Notes to the Financial Statements

Note 5. Other gains and (losses)

Note 5. Other gains and (losses)
In thousands of AUD Note	Consolidated
	2021 2020
Loss on sale of financial assets 24 Currency exchange gains/(losses) Grant income ‐ JobKeeper	‐ (861) (1,936) (1,007) 626 ‐
	(1,310) (1,868)

The Company participated in the Australian Federal Government's JobKeeper program during the 2021 Financial Year recognising amounts received as grant income with $333,000 relating to capitalised development in the consolidated statement of financial position. The purpose of this program was to assist businesses during the COVID‐19 pandemic by covering a proportion of employee salaries and wages based on defined eligibility criteria.

Note 6. Finance income

In thousands of AUD	Consolidated 2021 2020
Interest income Interest on borrowings Interest on lease liability	1,440 992 (359) (176) (243) (210)
	838 606

Note 7. Auditors’ remuneration

In AUD	Consolidated 2021 2020
Fees to Ernst & Young (Australia) Fees for auditing the consolidated financial report of the Company and auditing the statutory financial reports of any controlled entities Fees for other services ‐ Tax compliance ‐ Other compliance Total fees to Ernst & Young (Australia) Fees to other overseas member firms of Ernst & Young (Australia) Fees for other services ‐ Tax compliance Total fees to overseas member firms of Ernst & Young (Australia) Total auditor's remuneration	244,924 233,669 83,821 48,000 3,605 ‐ 332,350 281,669 131,930 100,684 131,930 100,684 464,280 382,353

In AUD

Consolidated
2021
2020

Fees to Ernst & Young (Australia)
Fees for auditing the consolidated financial report of the Company and auditing the
statutory financial reports of any controlled entities
Fees for other services
‐ Tax compliance
‐ Other compliance
Total fees to Ernst & Young (Australia)
Fees to other overseas member firms of Ernst & Young (Australia)
Fees for other services
‐ Tax compliance
Total fees to overseas member firms of Ernst & Young (Australia)
Total auditor's remuneration

244,924
233,669
83,821
48,000
3,605
‐
332,350
281,669
131,930
100,684
131,930
100,684
464,280
382,353

Notes to the Financial Statements

Note 8. Income tax

Recognised in profit for the year

In thousands of AUD Note	Consolidated
	2021 2020
Current income tax: Current income tax charge Adjustments in respect of current income tax of previous year	2,207 8,222 (20) (310)
	2,187 7,912
Deferred tax: Relating to origination and reversal of temporary differences 15	(815) (495)
Total income tax expense in profit and loss	1,372 7,417

Numerical reconciliation between income tax expense and profit before tax

In thousands of AUD	Consolidated
	2021 2020
Profit before tax	9,307 31,471
Income tax using the domestic corporate tax rate of 30% Increase in income tax expense due to: Non‐deductible expenses Effect of tax rates in foreign jurisdictions Other Decrease in income tax expense due to: R&D tax incentive Prior year adjustments	2,791 9,441 204 182 30 (261) ‐ (213) (1,633) (1,422) (20) (310)
Income tax expense	1,372 7,417

Note 9. Earnings per share

The calculation of basic and diluted earnings per share at 30 June 2021 was based on the profit attributable to ordinary shareholders of $7,935,000 (2020: $24,054,000); a weighted number of ordinary shares outstanding during the year ended 30 June 2021 of 172,116,418 (2020: 171,860,753); and a weighted number of ordinary shares (diluted) outstanding during the year ended 30 June 2021 of 172,603,668 (2020: 172,529,700), calculated as follows:

In thousands of AUD	Consolidated
	2021 2020
Profit for the year	7,935 24,054

Notes to the Financial Statements

Note 9. Earnings per share (continued)

Weighted average number of shares used as the denominator

Number	Consolidated
	2021 2020
Number for basic earnings per share: Ordinary shares Effect of employee share plans on issue Number for diluted earnings per share Basic earnings per share (AUD cents)	172,116,418 171,860,753 487,250 668,947 172,603,668 172,529,700 4.61 14.00
Diluted earnings per share (AUD cents)	4.60 13.94

Note 10. Cash and cash equivalents

In thousands of AUD	Consolidated
	2021 2020
Cash at bank and on hand	12,149 9,744

Note 11. Trade and other receivables

Current

In thousands of AUD	Consolidated
	2021 2020
Trade debtors Less: Allowance for expected credit losses	53,082 59,898 (1,336) (2,217)
	51,746 57,681
GST receivable	172 172
	51,918 57,853

Non‐current

In thousands of AUD	Consolidated
	2021 2020
Trade debtors	27,593 29,399

The Company provides customers of good credit worthiness extended payment plans over the committed term of the licence contract ranging between one to five years. For customers not on extended payment plans the credit period on sales range from 30 to 90 days.

Notes to the Financial Statements

Note 11. Trade and other receivables (continued)

Ageing of past due but not impaired:

In thousands of AUD Note	Consolidated
	2021 2020
Past due 30 days Past due 60 days Past due 90 days	1,422 1,584 830 1,851 3,357 5,995
Total 24	5,609 9,430

The movement in the allowance for expected credit losses in respect of trade receivables is detailed below:

In thousands of AUD	Consolidated
	2021 2020
Balance at beginning of year Amounts written off during the year (Decrease)/increase in provision	2,217 1,417 (1,158) (99) 277 899
Balance end of year	1,336 2,217

The Company has used the following criteria to assess the allowance loss for expected credit losses shown above:

historical default experience;
macroeconomic factors specific to the geography of the customer;
an individual account by account specific risk assessment based on past credit history; and
any prior knowledge of debtor insolvency or other credit risk.

Included in the Company’s trade receivable balance are debtors which are 90 days past due at the reporting date which the Company has not provided for as there has been no significant change in credit quality and the consolidated entity believes that the amounts are still recoverable. The Company does not hold any collateral over these balances.

Note 12. Other assets

Current

In thousands of AUD	Consolidated
	2021 2020
Other prepayments Contract assets Fair value of assets – forward foreign exchange contracts	2,299 1,821 799 941 247 201
Total	3,345 2,963

Notes to the Financial Statements

Note 12. Other assets (continued)

Non‐current

In thousands of AUD	Consolidated
	2021 2020
Contract assets	799 872
Total	799 872

Note 13. Other financial assets

Note 13. Other financial assets
In thousands of AUD	Consolidated
	2021 2020
Deposits	175 236

The carrying amount of other financial assets is a reasonable approximation of their fair value.

Note 14. Property, plant and equipment

Plant and equipment In thousands of AUD	Consolidated
	2021 2020
At cost Accumulated depreciation	5,702 6,517 (4,880) (5,147)
	822 1,370

Leasehold improvements In thousands of AUD	Consolidated
	2021 2020
At cost Accumulated depreciation	3,299 3,464 (2,866) (2,951)
	433 513

Total property, plant and equipment In thousands of AUD	Consolidated
	2021 2020
At cost Accumulated depreciation	9,001 9,981 (7,746) (8,098)
Total written down amount	1,255 1,883

Notes to the Financial Statements

Note 14. Property, plant and equipment (continued)

Plant and Equipment In thousands of AUD	Consolidated
	2021 2020
Carrying amount at start of year Additions Disposals Effects of foreign currency exchange Depreciation expense	1,370 1,880 116 200 ‐ (9) (29) 25 (635) (726)
Carrying amount at end of year	822 1,370
Leasehold Improvements In thousands of AUD	Consolidated
	2021 2020
Carrying amount at start of year Additions Effects of foreign currency exchange Depreciation expense	513 751 58 21 (14) 3 (124) (262)
Carrying amount at end of year	433 513

Note 15. Deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

Consolidated In thousands of AUD	Assets Liabilities Net
	2021 2020 2021 2020 2021 2020
Intangible assets Trade and other payables Employee benefits Provisions Other current liabilities Unrealised foreign exchange gain	‐ 130 7,879 7,338 (7,879) (7,208) 435 391 ‐ ‐ 435 391 1,082 1,018 ‐ ‐ 1,082 1,018 431 790 ‐ ‐ 431 790 646 403 718 502 (72) (99) 142 62 ‐ ‐ 142 62
Deferred tax assets/(liabilities) Set off of deferred tax asset	2,736 2,794 8,597 7,840 (5,861) (5,046) (1,553) (1,390) (1,553) (1,390) ‐ ‐
Net deferred tax assets/(liabilities)	1,183 1,404 7,044 6,450 (5,861) (5,046)

Notes to the Financial Statements

Note 15. Deferred tax assets and liabilities (continued)

Movement in temporary differences during the year:

For year ended 30 June 2021 In thousands of AUD	Consolidated
	Balance 1 July 20 Recognised in income Recognised in equity Balance 30 June 21
Intangible assets Trade and other payables Employee benefits Provisions Other current liabilities Unrealised foreign exchange gain	(7,208) (671) ‐ (7,879)
	391 44 ‐ 435
	1,018 64 ‐ 1,082
	790 (359) ‐ 431
	(99) 27 ‐ (72)
	62 80 ‐ 142
	(5,046) (815) ‐ (5,861)

For year ended 30 June 2020 In thousands of AUD	Consolidated
	Balance 1 July 19 Recognised in income Recognised in equity Balance 30 June 20
Intangible assets Trade and other payables Employee benefits Provisions Other current liabilities Unrealised foreign exchange gain	(5,799) (1,409) ‐ (7,208) 268 123 ‐ 391 730 288 ‐ 1,018 420 370 ‐ 790 628 (727) ‐ (99) (798) 860 ‐ 62
	(4,551) (495) ‐ (5,046)

Note 16. Intangible assets

The balance of capitalised intangible assets comprises:

Consolidated

Cost
	Software	Third party		Customer
In thousands of AUD	development	software	Goodwill	Relationships	Total
Balance at 1 July 2019	40,178	1,473	3,524	859	46,034
Fully amortised & offset	(7,934)	‐	‐	‐	(7,934)
Internally developed	13,962	‐	‐	‐	13,962
Purchased	‐	930	‐	‐	930
Effects of foreign currency exchange	‐	5	104	23	132
Balance at 30 June 2020	46,206	2,408	3,628	882	53,124

Notes to the Financial Statements

Note 16. Intangible assets (continued)

	Software	Third party		Customer
In thousands of AUD	development	software	Goodwill	Relationships	Total
Balance at 1 July 2020	46,206	2,408	3,628	882	53,124
Fully amortised & offset	(5,587)	(118)	‐	(800)	(6,505)
Internally developed	11,985	‐	‐	‐	11,985
Purchased	‐	36	‐	‐	36
Effects of foreign currency exchange	‐	(42)	(338)	(82)	(462)
Balance at 30 June 2021	52,604	2,284	3,290	‐	58,178

Amortisation
	Software	Third party		Customer
In thousands of AUD	development	software	Goodwill	Relationships	Total
Balance at 1 July 2019	20,939	1,308	‐	686	22,933
Fully amortised & offset	(7,934)	‐	‐	‐	(7,934)
Amortisation for year	8,832	41	‐	178	9,051
Effects of foreign currency exchange	‐	4	‐	18	22
Balance at 30 June 2020	21,837	1,353	‐	882	24,072
Balance at 1 July 2020	21,837	1,353	‐	882	24,072
Fully amortised & offset	(5,587)	(118)	‐	(800)	(6,505)
Amortisation for year	9,738	1,034	‐	‐	10,772
Effects of foreign currency exchange	‐	(41)	‐	(82)	(123)
Balance at 30 June 2021	25,988	2,228	‐	‐	28,216

Carrying amounts	Software	Third party		Customer
In thousands of AUD	development	software	Goodwill	Relationship	Total
Balance at 30 June 2020	24,369	1,055	3,628	‐	29,052
Balance at 30 June 2021	26,616	56	3,290	‐	29,962

Notes to the Financial Statements

Note 17. Goodwill

Goodwill arose on the acquisition of IQ Services business in the year ending 30 June 2016. Management has identified the Group as the cash generating unit (the Prognosis CGU) to which goodwill is allocated for impairment testing. Management performs its annual impairment testing at least annually. The carrying value of goodwill at 30 June 2021 is $3,290,000 (2020: $3,628,000). A reconciliation of the movement in goodwill is included in Note 16.

The recoverable amount of the Prognosis CGU has been determined using a value in use approach. The value in use has been based on the following key assumptions:

1. Cash flow forecasts

The cash flow forecasts are based upon a Board approved 2022 budget and management projections for the subsequent four years of the Prognosis CGU.

2. Discount rate

Discount rate of 11% (2020: 11%) applied for value in use calculation is based on the post‐tax weighted average cost of capital applicable to the Prognosis CGU.

3. Terminal value

The terminal growth rate after the five‐year projection period has been calculated using a growth rate of 3% (2020: 3%) which is determined by Management based on their assessment of expected long term annual growth for the software industry.

The value in use does not indicate any impairment is required at 30 June 2021.

Management believe that a reasonable change in any of the above key assumptions would not cause the carrying values to exceed their recoverable amounts.

Note 18. Trade and other payables

Note 18. Trade and other payables
In thousands of AUD	Consolidated
	2021 2020
Trade and other creditors	10,181 10,213

The average credit period on trade and other payables is 30 days.

Note 19. Employee benefits

Current

In thousands of AUD	Consolidated
	2021 2020
Liability for annual leave Liability for long service leave	2,721 2,746 1,324 1,106
	4,045 3,852

Non‐current

In thousands of AUD	Consolidated
	2021 2020
Liability for long service leave	199 190

Notes to the Financial Statements

Note 19. Employee benefits (continued)

Pension plans

Employees of the consolidated entity accumulate pension benefits through statutory contributions by the entities in the consolidated entity as required by the laws of the jurisdictions in which they operate, supplemented by individual contributions.

Share based payments

Performance Rights

On 21 November 2011, the consolidated entity established the Integrated Research Performance Rights and Options Plan (IRPROP). The plan enables the Company to offer performance rights to eligible employees to obtain shares in Integrated Research at no cost contingent upon performance conditions being met. The performance conditions include either a service period with performance components or a service period with either a net after tax profit hurdle or a total shareholder return (TSR) hurdle. The performance rights are automatically exercised into shares upon the performance conditions being met. The following performance rights were granted during the period:

Grant Date	Number of Rights	Earliest Vesting Date	Expiry date
Sep‐20	134,410	Jul 2023	Aug 2023
Nov‐20	31,789	Jul 2023	Aug 2023
Nov‐20	31,789	Jul 2023	Aug 2023
Nov‐20	31,790	Jul 2023	Aug 2023

The fair value of the performance rights including assumptions used are as follows:

Grant date	Sep 2020	Nov 2020	Nov 2020	Nov 2020
Fair value at measurement date	$3.395	$1.069	$1.506	$1.800
Share price	$3.60	$3.62	$3.62	$3.62
Exercise price	nil	nil	nil	nil
Expected volatility	50%	49%	49%	49%
Contractual life (expressed in days)	1,070	1,009	1,009	1,009
Expected dividends	2.00%	2.00%	2.00%	2.00%
Risk‐free interest rate (based on 3 year treasury bonds)	0.11%	0.11%	0.11%	0.11%
Testing date	N/A	June 2021	June 2022	June 2023
Model Used	Black Scholes	Monte Carlo	Monte Carlo	Monte Carlo

The fair values of services received in return for performance rights granted to employees is measured by reference to the fair value of share options granted.

During the year ended 30 June 2021, the consolidated entity recognised an expense through profit of $824,000 related to the fair value of performance rights (2020: $671,000).

Notes to the Financial Statements

Note 19. Employee benefits (continued)

The following table provides the movement in performance rights during the year:

The following table provides the movement in performance rights during the year:
In thousands of performance rights	2021	2020	2019
Outstanding at the beginning of the year	1,054	791	1,000
Forfeited during the year	(124)	(141)	(474)
Exercised during the year	(354)	‐	(180)
Granted during the year	230	404	445
Outstanding at the end of the year	806	1,054	791
Exercisable at the end of the year (vested)	‐	‐	‐

Note 20. Provisions

Current

In thousands of AUD Note	Consolidated
	2021 2020
Employee benefits 19	4,045 3,852

Non‐current

In thousands of AUD Note	Consolidated
	2021 2020
Employee benefits 19 Lease make good	199 190 466 523
	665 713

Note 21. Lease assets and liabilities

The Company has lease contracts for office space and equipment used In operations, with terms ranging from 1 to 5 years. The company's obligations under Its leases are secured by the lessor's title to the leased assets.

The lease liabilities were discounted at the incremental borrowing rates as at 1 July 2020. The incremental borrowing rates for the portfolio of leases were between 3% and 4%. Finance income decreased by $242,000 (2020: $210,000) relating to the interest expense on lease liabilities recognised.

Notes to the Financial Statements

Note 21. Lease assets and liabilities (continued)

Right‐of‐use assets

Office premises In thousands of AUD	Consolidated
	2021 2020
At cost Accumulated depreciation	8,705 8,386 (2,702) (2,019)
	6,003 6,367
Office premises In thousands of AUD	Consolidated
	2021 2020
Carrying amount at start of year On adoption of AASB 16 Addition during the year Effects of foreign currency exchange Depreciation expense	6,367 ‐ ‐ 2,147 1,555 6,204 (23) 35 (1,896) (2,019)
Carrying amount at end of year	6,003 6,367

Current lease liabilities

In thousands of AUD	Consolidated
	2021 2020
Lease liabilities	1,655 1,372
	1.655 1,372

Non‐current lease liabilities

In thousands of AUD	Consolidated
	2021 2020
Lease liabilities	4,767 5,142
	4,767 5,142

Contractual undiscounted cash outflows used to calculate lease liability

In thousands of AUD	Consolidated
	2021 2020
Less than one year Between one and five years Greater than five years	1,660 1,579 5,210 5,460 ‐ ‐
	6,870 7,039

Notes to the Financial Statements

Note 22. Other financial liabilities

Current

In thousands of AUD	Consolidated
	2021 2020
Fair value of hedge liabilities ‐ forward foreign exchange contracts	192 37
	192 37

Non‐Current

In thousands of AUD	Consolidated
	2021 2020
Other creditors	13 21
	13 21

Note 23. Capital and reserves

Share capital

In thousands of shares	Ordinary shares
	2021 2020
On issue 1 July Issued against employee performance right exercised	171,861 171,861 354 ‐
On issue 30 June	172,215 171,861

The company does not have authorised capital or par value in respect of its issued shares.

The holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per share at meetings of the Company. All shares rank equally with regard to the Company’s residual assets.

Hedging reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to hedged transactions that have not yet occurred.

Translation reserve

The translation reserve comprises all foreign exchange differences arising from the translation of the financial statements of foreign operations where their functional currency is different to the presentation currency of the consolidated entity, as well as from the translation of liabilities that hedge the consolidated entity’s net investment in a foreign subsidiary.

Notes to the Financial Statements

Note 23. Capital and reserves (continued)

Employee benefit reserve

The employee benefit reserve arises on the grant of either share options or performance rights to employees under the Integrated Research Performance Rights and Option Plan (established November 2011) or the Employee Share Option Plan (established October 2000). Refer to note 19 for further details.

Dividends

Dividends recognised in the current year by the company are:

In thousands of AUD Cents per share	Total amount Franked/ unfranked Date of payment
2021 Final 2020 3.75 Total amount 2020 Final 2019 3.75 Interim 2020 3.5 Total amount
	6,447 100% franked
	6,447 6,445 100% franked 15 Oct 2019 6,015 100% franked 17 Apr 2020 12,460

No dividends were declared for the 2021 financial year.

Franking account disclosure:

In thousands of AUD	Company
	2021 2020
Adjusted franking account balance Impact on franking account balance of dividends not recognised	7,764 8,503 ‐ (2,762)

Note 24. Financial instruments

Capital risk management

The consolidated entity manages its capital to ensure that controlled entities will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of treasury management.

The capital structure of the consolidated entity consists of cash and cash equivalents and equity attributable to equity holders of the company, comprising issued capital, reserves, and retained earnings as disclosed in Notes 10 and 23 respectively.

Notes to the Financial Statements

Note 23. Financial instruments (continued)

Borrowings

The Company has a $20 million multicurrency revolving cash advance facility with an expiry date of 31 July 2023 at which point all outstanding cash advances must be repaid. The primary purpose of the facility is to fund working capital requirements. There was $5.3 million drawn under the facility at 30 June 2021 (2020: $5 million).

The facility is secured by a General Security Agreement with a deed of cross guarantee including the parent entity, Integrated Research UK Limited, and Integrated Research Inc. The facility is also subject to certain debt covenants including a leverage ratio, interest cover ratio and capitalisation ratio. The Company met all the covenant requirements at 30 June 2021. Interest is variable, linked to Bank Bill Swap Bid Rate (BBSY), plus a margin.

During the 2021 financial year, the Company applied for and received US $1.0 million in borrowing as part of the US Paycheck Protection Program (PPP). The proceeds of the loan are to be used for certain operational costs, namely payroll and benefits, but can also be used towards rent and utilities. The intention of the loan program is for borrowers to use the funds for the approved purposes and subsequently seek loan forgiveness, which can be sought when the loan proceeds have been used. The U.S. Small Business Administration (SBA), the government agency in charge of administering the loan program, will review the loan forgiveness application by the Company to determine if forgiveness will be fully or partially granted. Factors that contribute to forgiveness include confirming funds were used for approved purposes and that employee and compensation levels were maintained.

At 30 June 2021 the amount received as part of the PPP is recognised at fair value using Level 2 inputs as non‐current borrowings. The Company anticipates its loan forgiveness application to be determined during the 2022 financial year at which point the amount received will be recognised as grant income. Any amount not forgiven will have a maturity date of five years from initial receipt with interest charged at 1%.

Bank Guarantee Facility

The Company has a $1,200,000 bank guarantee facility. The primary purpose of the facility is to provide bank guarantees to the Company’s landlord pursuant to contractual lease arrangements. At 30 June 2021, the total value of bank guarantees provided was $1,110,000 (2020: $1,110,000). The facility terminates on 31 December 2026.

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 1 to the financial statements.

Financial risk management objectives

The Board of Directors has overall responsibility for the establishment and oversight of the consolidated entity’s financial management framework. The Board has an established Audit and Risk Committee, which is responsible for developing and monitoring the consolidated entity’s financial management policies. The Committee provides regular reports to the Board of Directors on its activities.

The Audit and Risk Committee oversees how Management monitors compliance with risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks. The main risks arising from the consolidated entity’s financial instruments are currency risk, credit risk, liquidity risk and cash flow interest rate risk.

The consolidated entity seeks to minimise the effects of these risks, where deemed appropriate, by using derivative financial instruments to hedge these risk exposures. The use of financial derivatives is governed by the consolidated entity’s policies on foreign exchange risk, credit risk, the use of financial derivatives and non‐derivative financial instruments, and the investment of excess liquidity. The consolidated entity does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

Notes to the Financial Statements

Note 24. Financial instruments (continued)

Market risk

The consolidated entity’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates and cash flow interest rate risks. The consolidated entity enters into foreign exchange forward contracts to hedge the exchange rate risk arising from transactions not recorded in an entity’s functional currency.

Foreign currency risk management

The consolidated entity undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign exchange contracts.

The carrying amount of the consolidated entity’s foreign currency denominated monetary assets and monetary liabilities at the reporting date that are denominated in a currency that is different to the functional currency of the respective entities undertaking the transactions is as follows:

In thousands of AUD	Consolidated
	Liabilities Assets
	2021 2020 2021 2020
US Dollar Sterling Euro	1,644 1,788 5,343 9,973 ‐ ‐ 94 14 ‐ ‐ 3,243 3,085

Foreign currency sensitivity

At 30 June 2021, if the US Dollar, Sterling or Euro weakened or strengthened against the Australian dollar by the percentage shown, with all other variables held constant, net profit for the year would increase (decrease) by the following based on the change in the exchange rate against the Australian dollar.

In thousands of AUD	Consolidated
	Net profit before tax Equity
	2021 2020 2021 2020
US Dollar Sterling Euro	411 909 411 909 10 2 10 2 360 343 360 343

Change in currency (i) – 10% decrease

In thousands of AUD	Consolidated
	Net profit before tax Equity
	2021 2020 2021 2020
US Dollar Sterling Euro	(336) (744) (336) (744) (9) (1) (9) (1) (295) (280) (295) (280)

Change in currency (i) – 10% increase

Notes to the Financial Statements

Note 24. Financial instruments (continued)

The sensitivity analysis has been based on the sensitivity rates used when reporting foreign currency risk internally to key management personnel and represents management’s assessment of the possible change in foreign exchange rates based on historical volatility.

In addition to the above, there is also an A$34.9 million (2021: A$38.6 million) intercompany receivable in the parent entity at 30 June, denominated in US dollars, that eliminates on consolidation. The gain or loss on revaluation of the intercompany balance to Australian dollars is not eliminated and is therefore carried through to the consolidated profit and loss. A 10% decrease in the Australian dollar against the US dollar would result in a A$3.8 million (2021: A$4.3 million) increase to net profit before tax and equity, whilst a 10% increase would result in a A$3.2 million (2020: A$3.5 million) decrease to net profit before tax and equity.

In management’s opinion, the sensitivity analysis is not fully representative of the inherent foreign exchange risk as the year end exposure does not necessarily reflect the exposure during the course of the year. The consolidated entity includes certain subsidiaries whose functional currencies are different to the consolidated entity presentation currency. The main operating entities outside of Australia are based in the United States, the United Kingdom, Germany and Singapore. As stated in the consolidated entity’s accounting policies per Note 1, on consolidation the assets and liabilities of these entities are translated into Australian dollars at exchange rates prevailing at the year end date. The income and expenses of these entities is translated at the average exchange rates for the year. Exchange differences arising are classified as equity and are transferred to a foreign exchange translation reserve. The consolidated entity’s future reported profits could therefore be impacted by changes in rates of exchange between the Australian Dollar and United States Dollar, UK Sterling, Euro and Singapore Dollar each.

Forward foreign exchange contracts

The consolidated entity is exposed to foreign currency risk on sales and purchases that are denominated in a currency other than the AUD. The currencies giving rise to this risk are primarily United States Dollar, UK Sterling and the Euro.

The consolidated entity uses forward exchange contracts to hedge its foreign currency risk. The forward exchange contracts have maturities of less than two years after the year end date.

The consolidated entity classifies its forward exchange contracts hedging forecasted transactions as cash flow hedges and measures them at fair value. The following table details the forward foreign currency contracts outstanding as at reporting date:

Outstanding contracts	Average Exchange Rate	Foreign Currency	Contract Value	Fair Value
	2021 2020	2021 FC’000 2020 FC’000	2021 A$’000 2020 A$’000	2021 A$’000 2020 A$’000
Consolidated Sell US Dollar Less than 3 months 3 to 6 months 6 to 9 months 9 to 12 months Sell Euros Less than 3 months 3 to 6 months Sell Sterling Less than 3 months	0.72 0.68 0.76 0.68 0.78 0.68 0.78 0.68 ‐ 0.61 ‐ 0.60 ‐ 0.55	4,000 4,250 2,750 2,000 1,700 2,500 1,500 2,000 ‐ 50 ‐ 50 ‐ 50	5,572 6,296 3,620 2,918 2,194 3,677 1,935 2,924 ‐ 83 ‐ 83 ‐ 92	233 43 (50) (24) (75) (1) (68) (19) ‐ ‐ ‐ ‐ ‐ ‐
				40 (1)

Notes to the Financial Statements

Note 24. Financial instruments (continued)

These hedge assets and liabilities are classified as a level 2 fair value measurement, being derived from inputs provided from financial institutions, rather than quoted prices that are observable for the asset either directly (i.e. as prices) or indirectly (i.e. derived from prices). The fair value measurement of the over the counter forward contact would not qualify as Level 1 as there is not a quoted price for the actual contract, even though data used to value the contract may be derived entirely from active foreign‐ exchange and interest‐rate market.

Credit risk management

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the consolidated entity. The consolidated entity has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.

Trade receivables consist of a large number of customers, spread across diverse industries and geographical areas. The largest single counterparty balance with any one customer at 30 June 2021 was $8.0 million (2020: $12.1 million). Ongoing credit evaluation is performed on the financial condition of accounts.

The Company has a program available to sell selected account receivable balances to a third party without recourse. The purpose of the program is to manage credit risk and improve working capital. During the year ended 30 June 2021 no debtors were sold. During the previous financial year $8.5 million debtors were sold at a cost of $861,000. The Company continues to bear maintenance support obligations to the end customers which are carried as a liability in the deferred revenue account of the Company’s balance sheet of $1.4 million (2020: $2.6 million).

The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit ratings assigned by international credit‐rating agencies.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the board of Directors, who have built an appropriate liquidity risk management framework for the management of the consolidated entity’s short, medium and long‐term funding and liquidity management requirements.

The consolidated entity manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.

All creditor and other payables shown in Note 18 and Note 22 for both 2021 and 2020 carry no interest obligation.

Fair value of financial instruments

The carrying value of financial assets and financial liabilities of the consolidated entity is a reasonable approximation of their fair value.

For non‐current trade debtors Integrated Research has considered a discount rate to recognise the net present value of the debtors. Level 3 inputs have been considered including corporate borrowing rates, size of the customer and jurisdiction of the customer. A discounted cashflow model was used to derive the fair value. The range of discount rates was between 3.5% to 5.5%. The carrying value of non‐current trade debtors for 2020 and 2021 of the consolidated entity was a reasonable approximation of their fair value.

Notes to the Financial Statements

Note 25. Consolidated entities

Note 25. Consolidated entities
	Country of incorporation Ownership interest
	2021 2020
Parent entity: Integrated Research Limited Subsidiaries of Integrated Research Limited: Integrated Research Inc Integrated Research Singapore Pte Limited Integrated Research UK Limited Subsidiaries of Integrated Research UK Limited: Integrated Research Germany GmbH	Australia USA 100% 100% Singapore 100% 100% UK 100% 100% Germany 100% 100%

Note 26. Reconciliation of cash flows from operating activities

In thousands of AUD	Consolidated
	2021 2020
Profit for the year Depreciation and amortisation Provision for expected credit loss Interest received Interest paid Share‐based payments expense Net exchange differences Change in operating assets and liabilities: (Increase)/decrease in trade debtors (Increase)/decrease in future income tax benefit (Increase)/decrease in other operating assets Increase/(decrease) in trade and other payables Increase/(decrease) in other operating liabilities Increase/(decrease) in provision for income taxes payable Increase/(decrease) in provision for deferred income taxes Increase/(decrease) in other provisions	7,935 24,054 13,427 12,058 (881) 800 (1,440) (992) 602 386 824 671 672 (558) 7,741 (14,485) (408) 40 (248) (11,443) (32) 416 (5,789) 11,393 (2,066) 554 594 613 145 645
Net cash from operating activities	21,076 24,152

Notes to the Financial Statements

Note 27. Key management personnel disclosures

Key management personnel compensation

The key management personnel compensation are as follows:

In thousands of AUD	Consolidated
	2021 2020
Short‐term benefits Post‐employment benefits Long term benefit Equity compensation benefits Termination benefits	2,001,568 2,379,433 9,783 112,460 113,855 32,044 291,491 328,554 237,500 ‐
	2,654,197 2,852,491

Apart from the details disclosed in this note, no Director has entered into a material contract with the consolidated entity since the end of the previous financial year and there were no material contracts involving Directors’ interests existing at year end.

Note 28. Related parties

At 30 June 2021 Mr Steve Killelea, the founder of IR, owned either directly or indirectly 30.3% of the Company (2020: 39.0%). A related entity of Mr Killelea provided consulting services totaling $100,000 in the year ended 30 June 2021 (2020: $100,000).

Note 29. Parent entity disclosures

Financial Position

Financial Position
In thousands of AUD	Parent Entity
	2021 2020
Assets Current assets Non‐current assets	61,103 64,391 31,785 30,424
Total Assets	92,888 94,815
Liabilities Current Liabilities Non‐current liabilities	15,777 19,383 12,218 11,498
Total Liabilities	27,995 30,881
Net Assets	64,893 63,934
Equity Issued Capital Employee benefits Reserve Hedging reserve Retained Earnings	1,667 1,667 5,073 4,249 ‐ ‐ 58,153 58,018
Total Equity	64,893 63,934

Notes to the Financial Statements

Note 29. Parent entity disclosures (continued)

Financial Performance

In thousands of AUD	Parent Entity
	2021 2020
Profit for the year Other comprehensive income	6,271 21,251 ‐ 51
Total comprehensive income	6,271 21,302

Investments in subsidiaries are included at cost.

Note 30. Subsequent events

Directors’ Declaration

In accordance with a resolution of the Directors of Integrated Research Limited, we state that:

In the opinion of the Directors:
a) the financial statements and notes of Integrated Research Limited for the financial year ended 30 June 2021 are in accordance with the Corporations Act 2001, including:
i) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2021 and of its performance for the year ended on that date; and
ii) complying with Accounting Standards and the Corporations Regulations 2001;
b) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1; and
c) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
This declaration has been made after receiving the declarations required to be made to the Directors by the chief executive officer and chief financial officer in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2020.

This declaration is made in accordance with a resolution of the Directors.

Dated at North Sydney this 19th day of August 2021.

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Peter Lloyd

Chairman

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John Ruthven

Managing Director and Chief Executive Officer

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Ernst & Young Tel: +61 2 9248 5555 200 George Street Fax: +61 2 9248 5959 Sydney NSW 2000 Australia ey.com/au GPO Box 2646 Sydney NSW 2001

Independent Auditor's Report to the Members of Integrated Research Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Integrated Research Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2021, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2021 and of its consolidated financial performance for the year ended on that date; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

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

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Repor t section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report.

Revenue recognition for multiple-element arrangements

Why significant How our audit addressed the key audit matter The majority of the Group’s sales contracts Our audit procedures included the following: involve multiple-element arrangements, for ► Assessed the appropriateness of the Group’s example a single software sales transaction that revenue recognition accounting policies relating to combines the delivery of a software license and multi-element arrangements in compliance with rendering of maintenance and other professional AASB15 Revenue from contracts with customers. services. ► For a sample of contracts, assessed the Group’s identification and separation of each element and
Revenue recognition for multiple-element the allocation of total contract revenue to each arrangements was considered to be a key audit element in the multiple-element arrangements. matter due to the complexity of the multi► For a sample of contracts, we assessed whether element contracts and the judgment required to the revenue recognition criteria of each element allocate the revenue amongst respective in the multiple-element arrangements had been contracted activities. met which included the determination of whether the control associated with the relevant licensed
Note 1 to the financial statements details the software passed to the customer in the reporting period.

Note 1 to the financial statements details the Group’s revenue streams and the associated accounting policies.

For a sample of contracts, we tested the allocation of revenue related to the multiple elements to individual element sales and historical pricing arrangements.

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Recoverability of long-term trade debtors

Why significant

How our audit addressed the key audit matter

Approximately 59% of the total assets of the Group are represented by trade debtors of which $27.6m is classified as non-current as outlined in Note 11 to the financial statements.

Due to the significance of outstanding long-term receivables relative to total assets and the judgements required to assess their recoverability, this was considered a key audit matter.

Our audit procedures included the following:

Considered the extent to which significant trade debtors including prior year receivables that are due, had been collected subsequent to year end.
Considered the ageing of outstanding trade debtor balances over their credit terms and assessed the adequacy of the provisions recorded, including considering management’s assessment of COVID - 19 impacts on expected trade debtor recoverability. Evaluated the relevant assumptions made by the Group taking account of the Group's historical collections.
Reviewed the disclosures in the financial report relating to long-term trade debtors.

Capitalised software development costs

Why significant

How our audit addressed the key audit matter

As set out in Note 16 of the Financial Report, the Our audit procedures included the following: Group capitalises costs related to the ► Assessed the Group’s capitalisation policy for development of software products. Capitalised software development costs for compliance with software development costs are amortised over AASB138 Intangible assets. the economic life of the asset, which is ► Assessed the operating effectiveness of controls considered to be three years. related to the capitalisation of software development costs.
A net carrying amount of $26.6m of capitalised ► For a sample of capitalised software software development costs is recorded at 30 development costs, determined whether costs June 2021, as shown in note 16 to the financial were appropriately supported, authorised and statements. Given the value of these balances, attributed to the development activities. the significant level of expenditure during the ► Assessed the appropriateness of the year and the judgement required when amortisation periods attributable to capitalised determining whether costs should be capitalised, software development costs by taking into the useful lives, and recoverability of capitalised consideration the economic life of the software software development costs, this was considered and the terms of customer contracts. to be a key audit matter. ► Determined whether amortisation charges were correctly calculated.
► Evaluated the Group’s assessment for the indicators of impairment of capitalised software development costs.
► Considered the disclosures in the financial report relating to capitalised software development costs.

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Information Other than the Financial Report and Auditor’s Report Thereon

The directors are responsible for the other information. The other information comprises the information included in the Company’s 2021 Annual Report, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

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Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report for the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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Report on the Audit of the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 17 to 29 of the directors' report for the year ended 30 June 2021.

In our opinion, the Remuneration Report of Integrated Research Limited for the year ended 30 June 2021, complies with section 300A of the Corporations Act 2001.

Responsibilities

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.

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Ernst & Young

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Julian M. O’Brien Partner Sydney 19 August 2021

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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Ernst & Young 200 George Street Sydney NSW 2000 Australia GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555 Fax: +61 2 9248 5959 ey.com/au

Auditor’s Independence Declaration to the Directors of Integrated Research Limited

As lead auditor for the audit of the financial report of Integrated Research Limited for the financial year ended 30 June 2021, I declare to the best of my knowledge and belief, there have been:

a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
b. No contraventions of any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Integrated Research Limited and the entities it controlled during the financial year.

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Ernst & Young

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Julian M. O’Brien Partner 19 August 2021

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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INTEGRATED RESEARCH LIMITED — Annual Report 2021

65142_rns_2021-08-18_5aab6409-c9fa-41cf-9e97-99d79549376c.pdf

ASX Market Announcement

Appendix 4E

Brief explanation of directional and percentage changes to profit:

Audit

Financial Report

Directors’ Report

Review of operations and activities

Principal activities

Group overview

Review and results of operations

Overview

Revenue

Expenses

Shareholder returns

Financial position

Outlook and Strategy for 2022

Directors

Peter Lloyd, MAICD

Independent Non‐Executive Director and Chairman

John Ruthven

Managing Director and Chief Executive Officer

Allan Brackin, BAppSc

Independent Non‐Executive Director

Garry Dinnie, BCom, FCA, FAICD, FAIM

Independent Non‐Executive Director and Chairman

Anne Myers, MBA, FAICD

Independent Non‐Executive Director

James Scott BEng Hons, GAICD, FIEAust CPEng EngExec Independent Non‐Executive Director

Company Secretary

David Purdue, BEc, MBA, Grad Dip CSP, FCA, FGIA, FCG, GAICD

Resigning & Retiring Directors during the year

Paul Brandling, BSc Hons, MAICD

Independent Non‐Executive Director and Chairman

Nick Abrahams, B Comm, LLB (Hons), MFA

Independent Non‐Executive Director

Results

Dividends

Events subsequent to reporting date

Future developments

Directors and Company Secretary

Officers who were partners of the audit firm during the financial year

Directors’ meetings

A. Number of meetings attended.

State of affairs

Environmental regulation

Directors’ interests

Share options and performance rights

Options and performance rights granted to Directors and key management personnel

Unissued shares under performance rights

Performance Rights

Indemnification and insurance of officers and auditors

Indemnification

Insurance

Remuneration report

Corporate governance

Non‐audit services

Rounding of amounts to nearest thousand dollars

Remuneration Report (audited)

1. Strategic priorities and link to remuneration objectives

1. Relationship between remuneration and Company performance

2. Persons included in the Remuneration Report

2.1. Executive KMP

2.2. Independent Non‐Executive Directors

3. Executive remuneration

3.1. Remuneration framework

3.2. Short‐term incentives

3.3. Long‐term incentive (LTI)

3.4. Detail of executive remuneration and service conditions

4. Non‐executive Director remuneration

4.1. Board and Committee Structure

4.2. Non‐Executive Director fees

Non‐executive Director fees

5. Statutory remuneration

5.1. Directors’ and Executive KMP's remuneration

Remuneration Report (audited) cont.

6. Actual remuneration received ‐ Executive KMP

Notes

INTEGRATED RESEARCH LIMITED Annual Report 2021