INTEGRATED RESEARCH LIMITED — Interim / Quarterly Report 2022

Feb 16, 2022

Integrated Research Ltd > ABN 76 003 588 449 Level 9, 100 Pacific Highway, North Sydney NSW 2060 Australia t: +61 (2) 9966 1066 e: info.ap@ir.com

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17 February 2022

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 4D, and

• Interim Financial Report for the half-year ended 31 December 2021.

By authority of the Board

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

www.ir.com

Integrated Research Limited Appendix 4D Half‐year Report

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Appendix 4D

Half‐year report

Name of entity

INTEGRATED RESEARCH LIMITED

Appendix 4D Half‐yearreport Name ofentity	Appendix 4D Half‐yearreport Name ofentity	Appendix 4D Half‐yearreport Name ofentity	Appendix 4D Half‐yearreport Name ofentity
INTEGRATED RESEARCH LIMITED
ABN		Reportingperiod (half‐yearended) 31 December 2021	Previous corresponding period (half‐yearended)
76 003 588 449		31 December 2021	31 December 2020

For announcement to the market

Extracts from this report for announcement to the market

				A$000
Revenues from ordinary activities	Down	5%	to	32,287
Profit/(loss) before tax attributable to members	Up	146%	to	635
Netprofit for theperiod attributable to members	Up	1286%	to	1,788
	Amount per		Franked amountper
Dividends(distributions)	security		security
Interim dividend	Nil			N/A
Previous corresponding period	Nil			N/A

Brief explanation of results

Please refer to page 2 ‘Review of Operations’ for an explanation of the results. This information should be read in conjunction with Integrated Research Limited 2021 Annual Report.

The information provided in this report contains all the information required by ASX Listing Rule 4.2A.

	December 2021	December 2020
NTA backing	Cents	Cents
Net tangible asset backing per ordinary security	32.48	25.94
	December 2021	December 2020
Dividends	$’000	$’000
No interim dividend has been declared for the currentperiod	Nil	Nil
Total dividendsprovided for orpaid	Nil	Nil

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INTEGRATED RESEARCH LIMITED AND CONTROLLED ENTITIES

FOR THE HALF‐YEAR ENDED

31 DECEMBER 2021

ABN: 76 003 588 449 ASX CODE: IRI

INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Table of Contents
Directors’ Report	1
Consolidated Interim Financial Report
Consolidated Statement of Comprehensive Income	4
Consolidated Statement of Financial Position	5
Consolidated Statement of Changes in Equity	6
Consolidated Statement of Cash Flows	7
Notes to the Consolidated Financial Statements	8
Directors’ Declaration	13
Auditor’s Independence Declaration	14
Independent Auditor’s Review Report	15

INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Directors’ Report

The Directors present their report together with the consolidated financial report for the half‐year ended 31 December 2021 and the review report thereon.

Directors

The Directors of Integrated Research Limited at any time during or since the end of the half‐year are:

Peter Lloyd – Independent Non‐Executive Director and Chairman John Ruthven – Managing Director and Chief Executive Officer Allan Brackin – Independent Non‐Executive Director Anne Myers – Independent Non‐Executive Director James Scott– Independent Non‐Executive Director

Garry Dinnie – Independent Non‐Executive Director (retired 31 October 2021)

Principal Activities

Integrated Research Limited’s 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.

Half‐Year Results

The following table summarises the key revenue, expense and profit results for the consolidated entity for the half‐year ended 31 December 2021 compared to the previous corresponding period:

nded 31 December 2021 compared to the previous corresponding perio	d:
			Change
In thousands of AUD	2021	2020	%
Revenue from licence fees	17,992	17,104	5%
Revenue from maintenance fees	7,828	10,287	(24%)
Revenue from subscription fees	518	125	314%
Revenue from testing solution services	2,249	2,385	(6%)
Revenue from professional services	3,700	4,210	(12%)
Total revenue	32,287	34,111	(5%)
Total expenses	(34,658)	(32,880)	5%
(Loss)/profit before finance income, other losses, and income tax	(2,371)	1,231	(293%)
Other gains/ (losses)1	2,208	(2,983)	(174%)
Finance income	798	366	118%
Profit/(loss) before tax	635	(1,386)	(146%)
Income tax benefit2	1,153	1,515	(24%)
Netprofit after incometax	1,788	129	1286%

The Company reported profit after tax of $1.8 million and revenue of $32.3 million for the half year ended 31 December 2021. The result represents a thirteen‐fold increase on the prior equivalent half. Strong revenue results from Asia Pacific (up 80%) and Europe (up 19%) were offset by revenue falls in the Americas (down 24%). Total Contract Value[3] (“TCV”) of $31.7 million was up 8% on the previous corresponding period noting that the first half was not a strong period for renewal business with the second half expected to be stronger. Of the TCV written in the current half, 38% was attributable to either new customers or new products sold to existing customers. There were 23 new customers added during the period. The Company’s cloud and hybrid solutions are gathering momentum with approximately 440,000 users on the platform, representing 424% growth since the start of the financial year.

1 Other gains/ (losses) comprise of currency revaluation gain of $0.8 million (2020: $3.0 million loss) and forgiveness of the US Paycheck Protection Program loan for $1.4 million (2020: nil) which has been recognised as grant income.

2 The effective income tax benefit rate is not 30% of pre‐tax profit due to permanent differences including estimates for the R&D tax incentives and non‐assessable grant income.

3 Total contract value means the total value of a revenue generating contract written in the period of performance less any residual value from a previous related contract. The value includes software licence and related maintenance, cloud, testing and consulting services.

1

INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Directors’ Report (continued)

Review of Operations

Revenue

Revenue for the reporting period was $32.3 million, a decrease of 5% over the previous corresponding period. The following table presents Company revenue for each of the relevant product groups:

In thousands of AUD	2021 2020 Change %
Collaborate Infrastructure Transact Professional Services Total revenue	19,677 20,100 (2%) 5,199 5,565 (7%) 3,711 4,236 (12%) 3,700 4,210 (12%)
	32,287 34,111 (5%)

The following table presents revenue in native currency by geographic segment:

	2021 2020 Change %
Americas (USD’000) Europe (£’000) Asia Pacific (A$’000)	13,528 17,873 (24%) 3,439 2,898 19% 7,389 4,100 80%

Expenses

The Company’s operating cost base increased by 5% to $34.7 million. The increase in operating expenses was driven by higher non‐cash expenses represented by higher amortisation charges from the Company’s capitalised development noting the release of new products off the new cloud platform in the prior period. Staff numbers at 31 December 2021 were 224 compared to 264 at 31 December 2020.

The following table represents an analysis of research and development:

In thousands of AUD	2021 2020
Gross research and developmentspending Capitalisation of development expenses Amortisation of capitalised expenses Net research and development expenses	11,074 10,148 (5,862) (6,173) 5,664 4,614
	10,876 8,589

Cashflow

Cash receipts from customers was $37.7 million for the reporting period with no debtor factoring. Cashflow from operating activities of $8.7 million continued to be the source of investing in innovation and development.

For the financial year ended 30 June 2021, as detailed in the Directors' Report for that financial year, no dividends were paid to the holders of fully paid ordinary shares.

Statement of Financial Position

At 31 December 2021, the Company held $14.9 million in cash (30 June 2021: $12.1 million). The $20 million bank debt facility was drawn to $5.6 million (30 June 2021: $5.3 million).

Outlook

The Company anticipates stronger second half results for the FY22 financial year based on licence renewals, gaining new sales traction on the cloud platform and a turnaround in performance from the Americas.

2

INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Directors’ Report (continued)

Interim Dividend

The Board did not declare an interim dividend. The assessment of future dividends will be made after the annual results are available.

Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001

The lead auditor’s independence declaration is set out on page 14 and forms part of the Directors' Report for the half‐year ended 31 December 2021.

Rounding off

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

Signed in accordance with a resolution of the Directors:

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Peter Lloyd John Ruthven Chairman Managing Director and Chief Executive Officer

Dated at North Sydney this 17[th] day of February 2022.

3

INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Consolidated Statement of Comprehensive Income For the half‐year ended 31 December 2021 In thousands of AUD

Consolidated Statement of Comprehensive Income For the half‐year ended 31 December 2021 In thousands of AUD
Note	December 2021 December 2020
Continuing Operations Revenue from contracts with customers Licence fees Maintenance fees Subscription fees Testing solution services Professional services Total revenue 3 Expenditure: Research and development Sales, professional services and marketing expenses General and administration expenses Total expenditure Other gains and (losses) Loss before finance income and tax Finance income Profit/(loss) before tax Income tax benefit Profit for the period Other comprehensive income Items that may be reclassified subsequently to profit Foreign exchange translation differences Other comprehensive income/(loss) for the period Total comprehensive income/(loss) for the period Profit attributable to: Members of Integrated Research Total comprehensive income/(loss) attributable to: Members of Integrated Research Earnings per share attributable to members of Integrated Research Basic earnings per share to ordinary equity holders (AUD cents) 4 Diluted earnings per share to ordinary equity holders (AUD cents) 4	17,992 17,104 7,828 10,287 518 125 2,249 2,385 3,700 4,210
	32,287 34,111
	(10,876) (8,589) (20,867) (21,580) (2,915) (2,711)
	(34,658) (32,880)
	2,208 (2,983)
	(163) (1,752) 798 366
	635 (1,386)
	1,153 1,515
	1,788 129
	625 (1,976)
	625 (1,976)
	2,413 (1,847)
	1,788 129 2,413 (1,847) 1.04 0.08 1.03 0.07

The consolidated statement of comprehensive income is to be read in conjunction with the accompanying notes set out on pages 8 to 12.

4

INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Consolidated Statement of Financial Position For the half‐year ended 31 December 2021 In thousands of AUD

Consolidated Statement of Financial Position For the half‐year ended 31 December 2021 In thousands of AUD
	December 2021 June 2021
Current assets Cash and cash equivalents Trade and other receivables Current tax assets Other current assets Total current assets Non‐current assets Trade and other receivables Other financial assets Property, plant and equipment Right‐of‐use assets Deferred tax assets Intangible assets Other non‐current assets Total non‐current assets Total assets Currentliabilities Trade and other payables Provisions Income tax liabilities Deferred revenue Lease liabilities Other financial liabilities Total currentliabilities Non‐currentliabilities Borrowings Deferred tax liabilities Provisions Deferred revenue Lease liabilities Other financial liabilities Totalnon‐currentliabilities Totalliabilities Net assets Equity Issued capital Reserves Retained earnings Total equity attributable to members of Integrated Research	14,931 12,149 47,003 51,918 839 693 3,112 3,345
	65,885 68,105
	27,760 27,593 232 175 951 1,255 5,200 6,003 3,754 1,183 30,287 29,962 880 799
	69,064 66,970
	134,949 135,075
	8,092 10,181 3,710 4,045 ‐ 126 15,284 15,526 1,655 1,655 486 192
	29,227 31,725
	5,556 6,658 8,291 7,044 949 665 656 861 3,975 4,767 8 13
	19,435 20,008
	48,662 51,733
	86,287 83,342
	1,667 1,667 5,568 4,411 79,052 77,264
	86,287 83,342

The consolidated statement of financial position is to be read in conjunction with the accompanying notes set out on pages 8 to 12.

5

INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Consolidated Statement of Changes in Equity For the half‐year ended 31 December 2021 In thousands of AUD

Share Capital Translation Reserve	Employee Benefits Reserve Retained Earnings Total
Balance as at 1 July 2021 1,667 (666)	5,077 77,264 83,342
Profit for the period ‐ ‐	‐ 1,788 1,788
Other comprehensive (loss)/income ‐ 625	‐ ‐ 625
Total comprehensive (loss)/income for the period ‐ 625	‐ 1,788 2,413
Expensed employee options and performance rights ‐ ‐	532 ‐ 532
Payment of dividends ‐ ‐	‐ ‐ ‐
Balance at 31 December 2021 1,667 (41)	5,609 79,052 **86,287 **

	Share Capital Translation Reserve	Employee Benefits Reserve Retained Earnings Total
Balance as at 1 July 2020 Profit for the period Other comprehensive (loss)/income Total comprehensive (loss)/income for the period Expensed employee options and performance rights Payment of dividends Balance at 31 December 2020	1,667 830 ‐ ‐ ‐ (1,976)	4,249 75,776 82,522 ‐ 129 129 ‐ ‐ (1,976)
	‐ (1,976) ‐ ‐ ‐ ‐	‐ 129 (1,847) 457 ‐ 457 ‐ (6,447) (6,447)
	1,667 (1,146)	4,706 69,458 74,685

The consolidated statement of changes in equity is to be read in conjunction with the accompanying notes set out on pages 8 to 12.

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INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Consolidated Statement of Cash Flows For the half‐year ended 31 December 2021 In thousands of AUD

Consolidated Statement of Cash Flows For the half‐year ended 31 December 2021 In thousands of AUD
	December 2021 December 2020
Cash flows from operating activities Cash receipts from customers Cash paid to suppliers and employees Cash generated from operations Income taxes paid Net cash from operating activities Cash flows frominvesting activities Payments for capitalised development Payments for property, plant and equipment Interest received Net cash used in investing activities Cash flows from financing activities Proceeds from borrowings Repayment of borrowings Payment of lease liabilities Interest payments Payment of dividend Net cash used in financing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at 1 July Effects of exchange rate changes on cash Cash and cash equivalents at 31 December	37,723 42,354 (28,607) (28,319)
	9,116 14,035 (463) (2,780)
	8,653 11,255
	(5,862) (6,173) (60) (72) 940 605
	(4,982) (5,640)
	‐ 6,494 ‐ (5,000) (902) (851) (142) (240) ‐ (6,447)
	(1,044) (6,044)
	2,627 (429) 12,149 9,744 155 (1,144)
	14,931 8,171

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes set out on pages 8 to 12.

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INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Notes to the Consolidated Financial Statements

For the half‐year ended 31 December 2021 In thousands of AUD

Note 1. Significant accounting policies

a) Statement of Compliance

The half‐year financial report is a general purpose financial report prepared in accordance with the Corporations Act 2001 and AASB 134 Interim Financial Reporting. Compliance with AASB 134 ensures compliance with International Financial Reporting Standard IAS 34 Interim Financial Reporting. The half‐year report does not include notes of the type normally included in an annual financial report and should be read in conjunction with the most recent annual financial report.

b) Basis of Preparation

The interim financial report is prepared on the historical cost convention, with the exception of financial instruments for the purposes of cash flow hedges, which are at fair value. All amounts are presented in Australian dollars unless otherwise stated.

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

Integrated Research Limited is of a kind referred to in ASIC Legislative instrument 2016/191. In accordance with that Class Order, amounts in the financial report and Directors’ Report and the half‐year financial report have been rounded off to the nearest thousand dollars, unless otherwise indicated.

New accounting standards and interpretations

The accounting policies and methods of computation adopted in the preparation of the half‐year financial report are consistent with those adopted and disclosed in Integrated Research Limited's 2021 annual financial report, except for the adoption of new standards for the 2022 financial year. These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

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INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Note 2. Segment information

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

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.

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 Company’s accounting policies.

the same as the	Company’s accounti	ng policies.
	**Americas4 **	Europe	Asia Pacific	Corporate Australia1	Eliminations	Consolidated
In thousands of AUD	2021 2020	2021 2020	2021 2020	2021 2020	2021 2020	2021 2020
	18,504 24,732 ‐ ‐	6,394 5,279 ‐ ‐	7,389 4,100 ‐ ‐	‐ ‐ 12,553 14,163	‐ ‐ (12,553) (14,163)	32,287 34,111 ‐ ‐
Continuing operations
Sales to customers outside the consolidated entity
Inter‐segment revenue
Total segment revenue	18,504 24,732	6,394 5,279	7,389 4,100	12,553 14,163	(12,553) (14,163)	32,287 34,111
Segment (loss)/profit (before finance income and tax)	1,958 850	174 152	439 136	(2,734) (2,890)	‐ ‐	(163) (1,752)
Financing income (interest received)	‐ ‐	‐ ‐	‐ ‐	‐	‐ ‐	798 366 1,153 1,515
Income tax benefit
Profit for the half‐ year						1,788 129
Capital additions2	15 1,534	4 4	110 75	13 68	‐ ‐	142 1,681
Depreciation and amortisation expenses	242 334	108 147	118 145	6,417 5,556	‐ ‐	6,885 6,182

	Americas4 (USD) Europe (UK Sterling)
In local currency3 Sales to customers outside the consolidated entity Inter‐segment sales Total segment revenue Segment Profit	2021 2020 2021 2020
	13,528 17,873 3,439 2,898 ‐ ‐ ‐ ‐
	13,528 17,873 3,439 2,898
	1,402 616 94 84

1 Corporate Australia includes 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. 3 Segment results represented in local currencies.

4 Americas segment profit is inclusive of grant income recognised on the forgiveness of the US Paycheck Protection Program loan for USD $1.0 million or AUD $1.4 million (2020: nil).

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INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Note 3. Revenue from contracts with customers

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

	Consolidated Consolidated
In thousands of AUD	December 2021 December 2020
Timing of revenue recognition At a point in time Over time Total Revenue from contracts with customers Type of product group Collaborate Infrastructure Transact Professional Services Total revenue	17,992 17,104 14,295 17,007
	32,287 34,111
	19,677 20,100 5,199 5,565 3,711 4,236 3,700 4,210
	32,287 34,111

Note 4. Earnings per Share

Basic earnings per share

The calculation of basic earnings per share for the half‐year ended 31 December 2021 was based on the profit attributable to ordinary shareholders of $1,788,000 (half‐year ended 31 December 2020: $129,000) and a weighted average number of ordinary shares outstanding during the half‐year ended 31 December 2021 of 172,334,138 (half‐year ended 31 December 2020 of 172,030,086).

Diluted earnings per share

The calculation of diluted earnings per share for the half‐year ended 31 December 2021 was based on the profit attributable to ordinary shareholders of $1,788,000 (half‐year ended 31 December 2020: $129,000) and a weighted average number of ordinary shares outstanding during the half‐year ended 31 December 2021 of 172,852,323 (half‐year ended 31 December 2020: 172,541,197).

Note 5. Employee Equity benefits

Performance Rights and Options Plan – November 2011

The consolidated entity has a performance rights and options plan that enables Integrated Research Limited to offer performance rights and options to eligible employees to obtain shares in Integrated Research Limited contingent upon performance conditions being met. The performance conditions may be a service period only or a service period and either a net profit after tax or total shareholder return hurdle. The performance rights are automatically exercised into shares upon the performance conditions being met at zero cost. Options are exercisable by employees after the vesting date but before the expiry date (which is five years from the grant date) at their exercise price. The following instruments were granted during the period:

	Grant Date Type Quantity Exercise price Expiry date

Grant Date	Type	Quantity	Exercise price	Expiry date
January 2019	Performance rights	67,988	‐	March 2022
August 2019	Performance rights	40,000	‐	September 2022
September 2019	Performance rights	141,456	‐	September 2022
November 2019	Performance rights	152,438	‐	September 2022
September 2020	Performance rights	99,251	‐	August 2023
November 2020	Performance rights	95,368	‐	August 2023

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INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Note 5. Employee Equity benefits (continued)

During the period, the following performance rights were exercised into ordinary shares for nil consideration.

Grant Date	Number of Rights	Expiry date
September 2018	83,000	September 2021
December 2018	136,000	November 2021

Note 6. Financial Instruments

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 option and forward exchange contracts to hedge its foreign currency risk. The option and forward exchange contracts have maturities of less than two years after the reporting date.

The consolidated entity classifies its option and forward exchange contracts hedging forecasted transactions as cash flow hedges and measures them at fair value. The following table details the option and 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
	FX Forwards Sell US Dollar Less than 3 months 3 to 6 months 6 to 9 months 9 to 12 months 12 to 15 months Sell Euros 3 to 6 months Sell Sterling 3 to 6 months FX Options Put US Dollar 6 to 9 months 9 to 12 months Call US Dollar 6 to 9 months 9 to 12 months				(148) 350 (135) 354 (103) 261 (32) ‐ 9 ‐ 8 ‐ 5 ‐ (23) ‐ (31) ‐ 49 ‐ 32 ‐
		0.75 0.72 0.76 0.72 0.76 0.72 0.74 ‐	3,700 3,750 2,500 3,750 1,500 2,500 1,000 ‐	4,949 5,203 3,307 5,205 1,962 3,493 1,344 ‐
		0.73 ‐	500 ‐	699 ‐
		0.62 ‐ 0.53 ‐ 0.67 ‐ 0.70 ‐ 0.75 ‐ 0.75 ‐	200 ‐ 400 ‐ 2,000 ‐ 1,000 ‐ 2,000 ‐ 1,000 ‐	321 ‐ 750 ‐ 3,008 ‐ 1,429 ‐ 2,685 ‐ 1,335 ‐
					(369) 965

These hedge assets and liabilities are classified as a level 2 fair value measurement, being derived from inputs provided from financial institutes, 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 contract 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.

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INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Note 6. Financial Instruments (continued)

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.

Financial assets

For non‐current trade debtors Integrated Research Limited 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 7.5%.

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 31 December 2021 was $8.9 million (June 2021: $8 million). Ongoing credit evaluation is performed on the financial condition of accounts.

The Company has a program to sell selected account receivable balances to a third party without recourse. There were no sales of accounts receivables during the current or prior comparative reporting period. 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 $1.2 million (June 2021: $1.4 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.

Note 7. Subsequent events

There were no events after the interim balance sheet date which are expected to have a material effect on the consolidated entity’s financial position.

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INTEGRATED RESEARCH LIMITED HALF‐YEAR ENDED 31 DECEMBER 2021

Directors’ Declaration

In accordance with a resolution of the directors of Integrated Research Limited:

In the opinion of the directors:

• a) The financial statements and notes of Integrated Research Limited for the half‐year ended 31 December 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 31 December 2021 and of its performance for the half‐year ended on that date; and

• (ii) Complying with Accounting Standards and the Corporations Regulations 2001.

• b) There are reasonable grounds to believe that Integrated Research Limited will be able to pay its debts as and when they become due and payable.

Dated at North Sydney this 17[th] day of February 2022.

On behalf of the Directors

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Peter Lloyd Chairman

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

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

As lead auditor for the review of Integrated Research Limited for the half-year ended 31 December 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 review ;

• b) no contraventions of any applicable code of professional conduct in relation to the review; and

• c) No non-audit services provided that contravene 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 period.

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Ernst & Young

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Julian M. O’Brien Partner

17 February 2022

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

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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 Review Report to the Members of Integrated Research Limited

Report on the Half-Year Financial Report

Conclusion

We have reviewed the accompanying half-year financial report of Integrated Research Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 31 December 2021, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration.

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of the Group does not comply with the Corporations Act 2001 , including:

• a. Giving a true and fair view of the consolidated financial position of the Group as at 31 December 2021 and of its consolidated financial performance for the half-year ended on that date; and

• b. Complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

Basis for conclusion

We conducted our review in accordance with ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity (ASRE 2410). Our responsibilities are further described in the Auditor’s responsibilities for the review of the half-year 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 annual financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

Directors’ Responsibilities for the Half-Year Financial Report

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

Auditor’s Responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. ASRE 2410 requires us to conclude whether we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including giving a true and fair view of the Group’s financial position as at 31 December 2021 and its performance for the half-year ended on that date, and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 .

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A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

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

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Ernst & Young

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Julian M. O’Brien Partner Sydney

17 February 2022

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

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