IVE GROUP LIMITED - Annual Report 2022

IVE Group Limited Annual Financial Report 2022

==> picture [114 x 55] intentionally omitted <==

ABN 62 606 252 644

APPENDIX 4E

YEAR ENDED 30 JUNE 2022

Results for announcement to the market

In accordance with the ASX Listing Rule 4.3, the board and management of IVE Group Limited has enclosed an Appendix 4E for the year ended 30 June 2022.

==> picture [485 x 100] intentionally omitted <==

----- Start of picture text -----

Results 30 June 2022 30 June 2021
$'000 $'000
Revenue from continuing operations Up 16% 758,976 656,457
Profit from ordinary activities after tax attributable Down 7% 26,932 29,060
to members
Net profit for the period attributable to members Down 7% 26,932 29,060
----- End of picture text -----

All comparisons are on a statutory basis unless stated

Refer to the attached Directors’ Report and Operating and Financial Review for commentary and explanation of results.

==> picture [65 x 35] intentionally omitted <==

IVE Group Limited Annual Financial Report 2022

==> picture [486 x 144] intentionally omitted <==

----- Start of picture text -----

Net tangible assets per security 30 June 2022 30 June 2021
Net tangible asset per security (cents) 34.3 32.1
Amount per Franked amount
Dividend amount per security
security cents per security cents
Final dividend for the year ended 30 June 2022
8.0 8.0
to be paid 13 October 2022
Interim dividend for the year ended 30 June 2022
8.5 8.5
paid 14 April 2022
----- End of picture text -----

Final dividend entitlement date: close of business 14 September 2022.

Audit report

The Independent Auditor’s Report provided by KPMG is included in the IVE Group Limited Financial Report for the year ended 30 June 2022.

Attachments

Financial Report for the year ended 30 June 2022 for IVE Group Limited.

Authorised for release by the IVE Group Limited Board.

IVE Group Limited Annual Financial Report 2022

IVE GROUP LIMITED ANNUAL FINANCIAL REPORT

ABN 62 606 252 644

YEAR ENDED 30 JUNE 2022

==> picture [65 x 35] intentionally omitted <==

IVE Group Limited Annual Financial Report 2022

Operating and financial review ...........................................5 Directors' report .........................................................................26 Lead auditor's independence declaration ...................50 Financial report contents ......................................................51 Consolidated financial statements ................................52 Notes to the consolidated financial statements ......56 Directors' declaration ........................................................... 102 Independent audit report .................................................... 103 ASX additional information ............................................... 108

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (OFR)

1. SUMMARY OF FINANCIAL PERFORMANCE

A strong uplift in financial performance following two years of unprecedented uncertainty and volatility

==> picture [482 x 243] intentionally omitted <==

----- Start of picture text -----

GROSS PROFIT
REVENUE EBITDA NPAT MARGIN
$759.0m $96.6m $33.1m 46.6%
↑15.6% on PCP ↑13.3% on PCP ↑66.1% on PCP 48.1% PCP
NET DEBT
EARNINGS
OPERATING FINAL DIVIDEND
PER SHARE
CASH FLOW
$76.8m
TO EBITDA 8.0c
23.1c
CASH ON HAND
↑71.1% on PCP PER SHARE
95%
$67.0m FULLY FRANKED
----- End of picture text -----

The underlying financial results are on a non IFRS basis and are not audited or reviewed

The underlying results are on a continuing operations basis, post AASB16 and exclude other income and non-operating items (refer reconciliation page 14)

Underlying results exclude net JobKeeper receipts in FY21

2. OUR VISION, PURPOSE AND VALUES

Our vision and purpose is to maintain and grow a highly respected, strong and sustainable business for all key stakeholders – our staff, our clients and our shareholders. Core to this is ensuring a value proposition that maintains its relevance to our clients’ ever evolving communications needs.

IVE unlocks value for our stakeholders through the powerful combination of our brand values that are the guiding principles of our behaviour – core to this is our 'one company philosophy'.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Values

==> picture [308 x 305] intentionally omitted <==

----- Start of picture text -----

As specialists, we We have a responsibility
collaborate to deliver to our clients, our
holistic customer focused shareholders and our
solutions for our clients. staff to be honest, upfront
Drawing on our combined and accountable. Every
skills, we partner with our moment matters, so we’re
clients in a flexible and always on point and ready
friendly manner to deliver to deliver reliable, effective
exceptional outcomes. marketing solutions.
Collaborative Accountable
Smart Passionate
We’re focused on leading We’re a dynamic business
the way with practical, full of genuine, passionate
progressive and innovative people – always at the
solutions. Always looking ready, to deliver more for
ahead and reading our clients. We believe in
the shifts in our sector, the work we do and the
we anticipate what’s benefits we provide. It’s
coming next and invest what drives us all to go
accordingly. further every day.
----- End of picture text -----

3. OUR INTEGRATED SERVICE OFFERING

Specialising in creative, data-driven communications, integrated marketing, production & distribution, we bring together the capabilities, specialists and technology needed to make customer connection seamless.

==> picture [482 x 244] intentionally omitted <==

Our offering is supported by robust integrated technology platforms that make complex marketing simpler for our clients.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

4. STRATEGY AND GROWTH

IVE commenced the evolution to a broader product and service offering late in the 1990’s, through a combination of organic growth initiatives and a disciplined acquisition program. Core to expediting the execution of our growth and ongoing diversification strategy was our decision to list on the ASX in December 2015. Strong free cash flow, combined with access to capital, has enabled the Company to successfully execute a transformational investment and growth program over recent years to further expand and strengthen our integrated communications offer to enhance long-term client relationships.

Our continued growth and diversification, and the convergence of technologies on the back of the digital revolution over the last decade, has coincided with a meaningful consolidation across the more traditional parts of the marketing communications sector. This has resulted in a more defined competitive landscape than ever before with a reduced number of competitors. IVE has led sector consolidation and innovation over the last 10 years and today is the largest and has the most diversified integrated marketing communications offer in the Australian market.

Core to the ongoing sustainability of the business is that the value proposition we take to market has always remained relevant by being closely aligned to our clients evolving marketing communications requirements.

The diversity of IVE’s value proposition places us in a strong position relative to a number of competitors across the sector. IVE does not have one headline competitor that has an equivalent breadth of offering, and we continue to hold leading market positions across the sub sectors in which we operate.

A clearly defined and well executed strategy has resulted in a resilient business with diversified revenue streams, well positioned to pursue growth initiatives.

Continuation of the Group’s long-term strategy to further diversify and grow revenue and earnings

A clearly defined and well executed strategy over the last 20 years has cemented IVE as the largest integrated marketing communications business in Australia, holding leading market positions across all sectors in which we operate.

Execution of our strategy has resulted in a diversified, resilient business supporting a consistently high dividend yield, and a strong balance sheet to pursue further growth opportunities.

Investment, expansion and growth since listing on the ASX in December 2015

The execution of our strategy has resulted in the compelling diverse value proposition IVE takes to market
Strong free cash flow since listing and access to capital has enabled the Company to execute a transformational investment program that has further expanded our diversified integrated marketing communications offer
IVE holds leading market positions across the marketing communications sector, has a strong and diverse client base, good revenue mix across a range of sectors, and has maintained stable margins
The Group has consistently generated strong cash flow
Five year track record of strong operating and free cash flow since FY18:
- Operating cash flow of $380m
- Free cash flow of $290m
- Delivered an average operating cash conversion to pre AASB16 EBITDA of 100%
The disciplined execution of our strategic investment program over the last 5 years has resulted in significant increases in both revenue and earnings, albeit FY20 and FY21 were COVID-19 impacted

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Market positioning

COVID-19 disruption has strengthened our market position in a number of key sectors:

No 1 provider in key sectors we operate in
IVE is considered an attractive counterparty given the diversity and power of our value proposition, geographical footprint and financial strength
The effects of COVID-19 have increased pressure on key competitors in some sectors. We are ideally positioned to take advantage of any opportunities

Revenue diversification

Execution of our strategy has resulted in the increased diversification of revenue streams and broader client relationships

Our long-term strategy of evolving our value proposition has resulted in well-diversified revenue streams across multiple sectors
IVE’s broad product and service offering has resulted in a large proportion of our clients engaging with us across multiple parts of our business
We have seen revenue bounce back across most parts of the business as the economy emerges from COVID-19
We are ideally positioned to capitalise on opportunities across multiple sectors to grow market share
The Company’s capacity to fund a range of organic and inorganic strategic initiatives will result in further diversification of revenues

Growth opportunities

We continue to organically grow the revenues and earnings on the strength of our integrated offer, world class operations, market position and competitive advantage.

Our strong balance sheet places us in a very good position to invest across a range of organic initiatives like Lasoo, together with attractive ‘bolt on’ and strategic acquisitions that may present.

In this regard, the Company has allocated $30-40m to invest in a range of earnings accretive opportunities as outlined below.

Complementary bolt-on acquisitions

We expect a number of ‘bolt on’ acquisition opportunities will present over the coming 12-24 months. We have a demonstrable track record over many years of successfully acquiring and integrating businesses at low multiples to unlock synergies and drive EPS uplift.

Packaging

We have previously communicated that the Company sees opportunities for both organic and acquisition growth in the packaging sector. Our near term focus is on finalising the strategy and plans to build our packaging capability over the coming two years. To this end, the Company has been working closely with an expert advisory firm over recent months to further develop and refine our strategy to move more aggressively into the packaging sector:

An in-depth analysis of the Australian packaging market and other packaging markets is now complete
This work has confirmed that IVE’s strategic imperative to grow our packaging offer is sound, and IVE should continue to actively seek an appropriate acquisition to expedite this strategy
The analysis also identified other packaging markets which strongly complement IVE’s key strengths, with the potential to further build out the breadth and depth of IVE’s offering to its diverse customer base

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Lasoo

A significant organic initiative has been the investment to upgrade our digital catalogue platform, Lasoo. In FY22, we invested $4.7m to completely rebuild and market test the Lasoo platform. The commentary following provides an overview of this important initiative.

IVE’s new eCommerce marketplace for retailers’ specials

Lasoo today – significant loyal consumer and retailer base despite limited functionality

Lasoo was established in 2007 and acquired by IVE in January 2020
The platform was historically positioned as a digital catalogue aggregation site
Offered as an adjunct (bundled service) to the printed catalogue
Minimal historical investment in functionality and marketing
Superficial and inefficient comparison of ‘specials’
No transactional capability: users redirected to retailers’ platforms
Generated only modest digital catalogue creation revenue for IVE
Lasoo has longstanding, loyal consumer and retailer support despite the limited functionality
Over 200,000 active users per month on average since 2016
23% of current users visit the site daily
8.6% of sessions result in a buy now click (demonstrating high purchase intent)
Many of Australia’s major retailers are active on the platform including ALDI, Chemist Warehouse, Woolworths, Coles, Big W, Target, Kmart, The Good Guys and Australia Post
We were unable to properly commercialise Lasoo given the limited historical functionality

Lasoo tomorrow – eCommerce marketplace for retailers’ specials

IVE identified a meaningful opportunity to transform Lasoo into a superior platform to drive a greatly enhanced online consumer experience and to deliver commercial upside to our extensive retail client base and to IVE
In FY22, the Group invested $4.7m to completely rebuild and market test the Lasoo platform
This investment provides an opportunity to commercialise and grow our already active user base on the back of
Game changing upgrade of functionality
Greatly improved product range, pricing visibility, search and comparison engine
Consumers ability to easily discover, compare and purchase specials from multiple retailers on the one platform in a single transaction
IVE revenue will be derived from multiple sources
- Existing digital catalogue creation and hosting revenue
Commission revenue via a fully integrated checkout capability
Other new revenue including:
- Lead conversion revenue for retailers not yet fully integrated
- Advertising and product boosting revenue via a scalable self-service retailer portal
- Data related revenue on a subscription basis
The new Lasoo platform will ‘go live’ mid-September 2022

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Lasoo launch - strong retailer support, best-in-class tech stack and CX, experienced team

Around 65 of Australia’s leading retailers across a broad range of sectors confirmed for launch (previous platform peak of 42)
30 new retailers
13 existing IVE (retailer) clients
15 additional retailers will join post-launch due to integration timing
Targeting further growth in retailer participation
As platform traffic increases and marketing drives heightened awareness
Cross-selling into IVE’s 200+ retailer clients not already on Lasoo
80% of retailers will have full eCommerce functionality at launch
20% of retailers will be on lead generation model (via click through to their own platforms) until integrated with eCommerce capability
Experienced team of 14 in place led by CEO, Rob Draper and Chief Product Officer, Matthew Paule, formerly of Domain Group
Consumer go-to-market campaign and staff costs will total $4m pre-tax in FY23
Scalable best-in-class tech stack built on Amazon Web Services

5. 2022 – YEAR IN REVIEW

Following two years of unprecedented uncertainty and volatility, and whilst not without its challenges, FY22 pleasingly resulted in revenues bouncing back significantly over the COVID-19 impacted FY21 year. Revenue growth combined with our recalibrated and tightly managed cost base, resulted in a strong uplift in both EBITDA and NPAT over PCP. The result was impacted by a slight reduction in gross profit margin over PCP primarily due to contractual timing differences of passing on paper price increases throughout the year.

Our financial and operational performance once again demonstrates IVE’s underlying solid fundamentals and continued resilience.

The Company met full year earnings guidance reporting NPAT of $33.1m, resulting in 71% growth in earnings per share (EPS) over PCP (excluding JobKeeper receipts in PCP).

Our committed workforce of circa 1,800 staff under the leadership of our CEO Matt Aitken, once again responded by coming together and committing to do whatever was required to ensure our high levels of client service were maintained. This was achieved through a hybrid of continuing operations across multiple production/service facilities and staff working remotely.

We undertook a number of strategic initiatives over the year including the acquisitions of Active Display Group (ADG) and AFI Branding Solutions (AFI) on 1 November 2022, the significant investment to consolidate a number of our Victorian businesses into our new Braeside precinct, and our strategic and meaningful investment in Lasoo.

Further, our balance sheet has continued to strengthen over the last two years which places the Company in a solid position to pursue a range of earnings accretive initiatives.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Customers and revenue

IVE continues to benefit from its differentiated value proposition and a loyal, strong and diversified customer base.

Retention

IVE provided continuity of service and supply to all customers throughout the year notwithstanding the ongoing impacts of the pandemic during H1 and supply chain challenges experienced throughout the majority of the year
Share of wallet growth across IVE’s 2,800 customers continues to yield meaningful results through selling more products and services to existing customers
Our client retention remains excellent with all key contracts renewed throughout FY22
There was no material client loss in FY22

Growth

Throughout FY22 IVE continued its focus on growing market-share through harnessing the power and uniqueness of IVE’s go-to-market proposition, in particular signing meaningful contracts with Nestle and News Limited
New business momentum across all parts of the business remains strong, and despite the pandemic and supply chain challenges $50m of new client revenue was transacted during FY22
The pipeline of opportunities is strong for FY23 with a number of key prospects well advanced in the sale cycle

Supply Chain

Global supply chain disruption for both raw materials and finished goods required close attention throughout the year.

Our strategic decision to increase inventory holdings places us in a strong competitive position to respond to client demands.

During the year we also benefited from clients moving revenue onshore from Asia, particularly across the retail display sector.

The Company remains well placed to manage this dynamic which is expected to continue for the foreseeable future, albeit we have seen an improvement in the stability of our supply chain over recent months.

Capital expenditure

The Company’s excellent operational footprint is the result of targeted investment over many years.

FY22 capital expenditure was $13.9m (excluding Lasoo investment), $3.8m relating to our Victorian site consolidation program and $3.7m relating to our digital printing fleet upgrade and expansion
Lasoo investment of $4.7m to transform existing digital catalogue aggregation platform into a new eCommerce enabled marketplace for retail 'specials'
FY23 capital expenditure is expected to be circa $14m

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Banking and liquidity

Dividends

Strong operating cash flow of $91.7m delivered a 95% operating cash conversion. The final dividend of 8 cents per share declared today results in a full year dividend of 16.5 cents per share fully franked, an uplift of 18% over PCP.

The Company’s dividend policy remains unchanged, targeting a full year payout ratio of 65-75% of underlying NPAT.

Net Debt

The Company’s balance sheet has significantly strengthened over the last two years on the back of continued strong cash flow.

Net debt at 30 June 2022 was $76.8m, down $60.3m from $137.1m at 30 June 2020. Cash at bank at 30 June 2022 was $67.0m, after repaying $35.0m of senior debt since August 2021. At 25 August 2022, undrawn facilities were $55.0m.

Net debt of 1.1x pre AASB16 EBITDA is well below the Company's stated target of 1.5x.

The strength of our balance sheet places IVE in a very good position to invest across a range of organic initiatives, together with a combination of opportunistic ‘bolt on’ acquisitions, or more strategic acquisitions to further broaden and diversify the Group’s revenue and earnings.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

6. REVIEW OF FINANCIAL PERFORMANCE

Basis of preparation

IVE’s Financial Report for FY2022 is presented in accordance with Australian Accounting Standards which comply with International Financial Reporting Standards (IFRS).

In this OFR, certain non-IFRS financial information (underlying) has also been included to allow investors to understand the underlying performance of IVE. The non-IFRS financial information relates to FY2022 and FY2021 results presented before the impact of certain non-operating items and on a continuing business basis, which allow for a direct comparison to FY2021. The Directors believe the non-IFRS underlying results better reflect the underlying operating performance and is consistent with prior year reporting, this differs from the IFRS presentation.

The non-IFRS underlying financial information has not been audited or reviewed.

Financial information in this OFR is expressed in millions and has been rounded to one decimal place. This differs from the Financial Report where numbers are expressed in thousands. As a result, some minor rounding discrepancies occur.

7. FINANCIAL RESULTS

IVE Group Financial Results – on an IFRS and underlying basis (underlying where noted)

==> picture [486 x 358] intentionally omitted <==

----- Start of picture text -----

FY2022 FY2021 Variance Variance
$m $m $m %
Revenue 759.0 656.5 102.5 15.6%
Gross Profit 353.7 316.0 37.7 11.9%
% of Revenue 46.6% 48.1% - -3.2%
Underlying EBITDA continuing operations (inc JobKeeper) 96.6 100.2 -3.6 -3.6%
Underlying EBITDA continuing operations (ex JobKeeper) 96.6 85.3 11.4 13.3%
EBITDA 90.5 95.6 -5.1 -5.4%
Depreciation and amortisation 42.0 47.2 -5.2 -11.1%
EBIT 48.5 48.4 0.1 0.2%
Net finance costs 9.1 12.1 -3.0 -24.4%
NPBT 39.3 36.3 3.1 8.5%
Income tax expense 12.4 12.1 0.3 2.6%
NPAT from continuing operations 26.9 24.2 2.8 11.4%
Discontinued Operations (NPAT) 0.0 4.8 -4.8 -100.0%
NPAT 26.9 29.0 -2.0 -7.1%
NPATA continuing operations 30.3 28.2 2.1 7.6%
Underlying NPAT continuing operations (inc JobKeeper) 33.1 30.2 2.9 9.5%
Underlying NPAT continuing operations (ex JobKeeper) 33.1 19.9 13.2 66.1%
Underlying NPATA continuing operations (inc JobKeeper) 36.4 34.1 2.3 6.9%
Underlying NPATA continuing operations (ex JobKeeper) 36.4 23.8 12.6 53.1%
----- End of picture text -----

The underlying financial results are on a non-IFRS basis and are not audited or reviewed The underlying results are on a continuing operations basis and exclude non-operating items

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Non-operating items excluded from underlying NPAT

==> picture [486 x 188] intentionally omitted <==

----- Start of picture text -----

IFRS to underlying NPAT reconciliation FY2022
$m
IFRS NPAT (continuing) 26.9
Restructure costs (site & acquisition relocation) 4.9
Acquisition costs 0.7
Software as a service (still in development stage) 1.7
Employee share issue 1.2
Others -0.3
Pre-tax non-operating items 8.2
Tax effect of adjustments 2.1
Underlying NPAT 33.1
----- End of picture text -----

All financial commentary is on a continuing operations basis in order for meaningful comparison with PCP

Revenue

Total revenue for the year ended FY22 was $759.0m, an increase of $102.5m or $656.5m on PCP. Circa $30m of the revenue increase includes eight months of revenue from ADG and AFI (acquired 1 November 2021). Revenue growth of 11.1% on PCP excluding ADG/AFI acquisitions reflects increased activity over COVID-19 impacted PCP, continued solid new business momentum and high levels of client retention.

Earnings

IFRS and underlying gross profit margin was 46.6% and compares to 48.1% in PCP. The reduction in gross profit (revenue less material cost of goods sold) margin over PCP is primarily due to contractual timing differences of passing on recent paper price increases as previously foreshadowed. We continue to build inventory levels to ensure no disruption to client service levels, and to place the business in a strong position to take advantage of growth opportunities. We are working closely with our clients to successfully manage flow-through price increases as a result of upward pressure on input costs.

The company’s margins have remained stable over time.

IFRS EBITDA of $90.5m compares to PCP of $95.6m with PCP including a $14.9m net benefit from JobKeeper.

Underlying EBITDA of $96.6m on a continuing operations basis compares to PCP of $85.3m (excluding JobKeeper) an increase of $11.4m (13.3%). Growth in EBITDA over PCP driven primarily by uplift in revenue, offset in part by contractual timing differences of passing on recent paper increases.

Depreciation and amortisation of $42.0m to PCP of $47.2m. Pre AASB16 depreciation (excluding amortisation) of $16.9m to PCP of $17.2m.

IFRS net finance costs of $9.1m compares to $12.1m PCP. Both periods impacted by financial asset valuation write down ($1.7m in FY22 and $2.6m in FY21). On an underlying basis (excluding the impacts of the financial asset valuation write down) net finance costs of $7.1m compares to PCP of $9.5m post AASB16 and on a pre AASB16 basis is $3.7m to PCP of $6.3m, reflecting the lower net debt position due to pay down of debt facility in the year.

IFRS NPAT of $26.9m to $24.2m PCP on a continuing operations basis noting PCP also includes JobKeeper benefits ($10.3m on an after-tax basis). Underlying NPAT of $33.1m compares to FY21 of $19.9m (excluding JobKeeper), growth of 66%, a strong result and a significant uplift on PCP reflecting much stronger activity across all areas of the business.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Earnings per share (EPS) on a IFRS basis 18.8 cps, on an underlying basis of 23.1 cps compares to PCP of 13.5 cps excluding JobKeeper and a 71.0% growth on PCP.

Non-operating items excluded from the underlying NPAT includes:

$4.9m for the relocation of 4 Victorian businesses to new Braeside precinct, including redundancies as a result of the ADG and AFI acquisitions and subsequent integration
$0.7m for acquisition costs related to ADG and AFI
$1.2m as previously communicated one-off employee share issue as a result of our employees' efforts and sacrifices made through the COVID-19 period
$1.7m software as a service computer expenses, relating to new system implementation, however excluded from underlying as MIS system is still in development stage
Other ($0.3m) includes loss on sale of fixed asset, financial asset write down more than offset by proceeds of contractual claim recovery in other income.

Net debt

==> picture [486 x 83] intentionally omitted <==

----- Start of picture text -----

FY2022 FY2021
Net debt
$m $m
Loans & borrowings – sub total 143.8 183.8
Less cash 67.0 106.5
Net debt 76.8 77.3
----- End of picture text -----*

Loans & borrowings are gross of facility establishment costs
Excludes right of use liabilities impacts from adopting AASB 16

Net debt at 30 June 2022 of $76.8m and compares to $77.3m PCP.

Net debt was lower than guidance (provided on 22 June 2022) due to better than expected debtor collections in the month of June, a pleasing result given the Company’s targeted and foreshadowed increase in inventory holdings.

The reduction in the cash balance on PCP reflected:

$35.0m senior debt repaid in August 2021
Increase in working capital (circa $30m of additional inventory) due to targeted build of inventory levels.

At 30 June 2022, undrawn facilities were $35.0m and as at 25 August 2022, undrawn facilities were $55.0m following a further $20.0m debt repayment in July 2022.

In May 2022, the Company successfully renewed its syndicated senior debt facility for a further term of 4 years, with the maturity date extended to May 2026. The renewal process achieved improvements in both the terms and pricing of the facility. These favourable outcomes are reflective of IVE’s ongoing balance sheet strength, earnings quality, and our strong relationship with syndicate members.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Capital expenditure

==> picture [486 x 77] intentionally omitted <==

----- Start of picture text -----

FY2022
Group-wide targeted investment and maintenance 13.9
Lasoo investment 4.7
Total 18.6
----- End of picture text -----

Capital expenditure excludes addition of Braeside make good asset provision

Full year capital expenditure of $13.9m excluding Lasoo investment:

$3.8m relates to the Group’s Victorian site construction
$3.7m relates to digital print fleet upgrade and expansion.

Lasoo investment of $4.7m to provide a greatly enhanced and expanded Lasoo platform including user and consumer experience.

FY23 capital expenditure expected to be circa $14.0m.

Cash flow

==> picture [486 x 295] intentionally omitted <==

----- Start of picture text -----

Underlying IFRS
FY2022 FY2021
$m $m
EBITDA 96.6 90.5
Movement in NWC/non-cash items in EBITDA -4.9 -3.8
Operating cash flow 91.7 86.7
Capital expenditure (net) -15.5 -15.5
Payments for acquisitions & deferred consideration -5.0 -5.0
Net cash flow before financing and taxation 71.3 66.2
Tax -13.7 -11.8
Payments of bank loans (net) -39.2 -39.2
Payment of lease liabilities -29.1 -29.1
Payment of share buy back -0.2 -0.2
Dividends paid -22.2 -22.2
Interest paid -3.2 -3.2
Net cash flow -36.2 -39.4
Operating cash conversion to EBITDA 95% 96%
Free cash conversion to EBITDA 79% 79%
----- End of picture text -----

The underlying financial results are on a non-IFRS basis and are not audited or reviewed

The underlying results are on a continuing operations basis and exclude non-operating items

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Operating cash flow of $91.7m, with 95% operating cash conversion.

Disciplined management of working capital, including reduced debtor days over the period and strong collections, offset by targeted increase in inventory holdings due to supply chain volatility as previously noted.

Final dividend of 8.0 cents per share fully franked, up 14% from 7.0 cents PCP resulting in a full year dividend of 16.5 cents per share fully franked.

The company’s dividend policy remains unchanged, targeting a full year payout ratio of 65% to 75% of underlying NPAT.

Return on funds employed (ROFE) improved to 21% from 14% PCP on an underlying basis.

8. OUTLOOK AND GUIDANCE

The solid fundamentals of the business, combined with the strength of our balance sheet, place IVE in an ideal position to deliver growth over the year ahead.

As illustrated by the strength of our FY22 earnings, heightened operating leverage across the business has contributed to a significant uplift over FY21 performance, as existing client revenue rebounded post COVID-19 impacted FY21, combined with the benefit of new business
We remain optimistic that revenue momentum will continue in the near term
FY23 guidance*
underlying EBITDA of $105m excluding Lasoo as noted below
underlying NPAT of $36m excluding Lasoo as noted below
the Company’s dividend policy remains unchanged, targeting a full year payout ratio of 65-75% of underlying NPAT
restructure and acquisition costs expected to be significantly less than FY22
capital expenditure expected to be $14m
The Company has demonstrated its capacity to effectively manage our supply chain throughout a period of unprecedented volatility. Whilst we will maintain vigilance over our supply chain, it is encouraging to note that we are experiencing an improvement in the stability of our supply chain over recent months
• Initiatives
Complete the Victorian business relocations and final phase integrations of ADG and AFI by 30 September 2022
The successful launch of Lasoo in mid-September 2022
Finalise and communicate our strategy and plans to move into the packaging sector
The Company has allocated $30-40m of available capacity to drive earnings accretive growth opportunities
FY23 underlying EBITDA and NPAT targets exclude an expected $3.3m after-tax loss associated with Lasoo’s consumer go-to-market campaign and team buildout, and exclude any potential impact of the Ovato transaction.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

9. ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE

Over the last 12 months, we have continued to experience a meaningful increase in interest from our clients and investors regarding Environmental, Social and Governance (ESG) topics. At IVE, the Board has committed to taking concrete steps to understand, improve and report on our impacts in collaboration with our valued stakeholders.

We recognise the critical role of ESG in our long-term success and the responsibility we have to our people, customers, investors and wider stakeholders to do the right thing. We have a long history of adapting to change and acting responsibly. From this position of strength, we will be able to meet the needs of our stakeholders, address risks, leverage opportunities and remain a partner of choice.

During this year, we undertook a materiality assessment with a third-party to define our material ESG issues and inform the development of a robust and transparent sustainability framework. To define our material topics we engaged internal and external stakeholders, reviewed trends shaping the future risks and opportunities for our sector and referred to domestic and international sustainability best practices. We have finalized our material topics and in the following years, we will align our reporting to these key topics.

In addition to completing a materiality assessment, we measured our environmental impact across key topics such as waste, water and energy and are in the process of completing a carbon footprint. Over the coming year, we will finalise a strategic framework for sustainability action at IVE based on science and informed by our stakeholders and ambitions for sustainability leadership.

IVE has developed policies and solid positions on a range of ESG issues and these efforts are detailed in the following pages. We recognise this is a rapidly evolving landscape and there is much to do. So, we are embarking on a journey that will see us reduce the negative impacts of our operations and bolster the positive contribution we make to society.

As we continue to develop and evolve our approach, we welcome feedback and participation from our stakeholders and look forward to sharing our progress in future reporting and communications.

People and culture

Proudly inclusive, we believe we are an employer of choice across all the sectors in which we operate, continuing to attract and retain the best diversity of talent. Our IVE Care program is focused on ensuring and improving the wellbeing, diversity and inclusion, and health and safety of all our employees. We believe in ‘a better you, a better workplace’ for our people and for their families.

The residual impacts of the pandemic continued throughout FY22, and we wanted to acknowledge the fantastic efforts and contribution of all of our employees in successfully meeting these impacts and challenges.

The business has maintained a resolute focus on keeping our employees and their families safe, and our employees have been fantastic in this regard. Whether it was through working from home as required, social distancing, mask wearing or applying additional hygiene measures, every employee has been fantastic in helping us maintain a safe and healthy workplace across all sites.

The business has also maintained a close focus on workload impacts across FY22 due to the pandemic-related absences and more flexible work arrangements. Again, our employees have been fantastic in their co-operation to assist the business to successfully meet these challenges.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

==> picture [158 x 125] intentionally omitted <==

==> picture [158 x 124] intentionally omitted <==

==> picture [158 x 125] intentionally omitted <==

==> picture [158 x 124] intentionally omitted <==

==> picture [158 x 125] intentionally omitted <==

==> picture [158 x 124] intentionally omitted <==

==> picture [158 x 125] intentionally omitted <==

==> picture [158 x 124] intentionally omitted <==

==> picture [320 x 125] intentionally omitted <==

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

==> picture [313 x 225] intentionally omitted <==

----- Start of picture text -----

Diversity
& Inclusion
We come from many different nationalities,
backgrounds, experiences and lines of work. Our rich
diversity is at the centre of our success, and at the
heart of our evolution as Australia’s leading holistic
marketing company.
An inclusive working environment that embraces our unique differences and
diverse perspectives, brings greater creativity and innovation, leads to higher
wellbeing, productivity and engagement, and importantly, enables us to better reflect and relate to our customers. Diversity & Inclusion benefits us all. IVE is
committed to ensuring diversity and inclusion permeate all areas and levels of
our business, with every individual feeling included, safe and supported to express
themselves authentically.
In recognition and support of this, we have established IVE’s Diversity & Inclusion
Program, reinforcing our commitment to growing a diverse and inclusive organisational culture encompassing and benefiting all employees. For
additional information about IVE’s Diversity & Inclusion Program or to express
your interest in contributing and supporting upcoming diversity and inclusion
events and initiatives, please contact your manager or alternatively you may
forward your feedback to [email protected].
> Gender equality and inclusion
> Cultural and linguistic diversity
> Intergenerational and mature age
> Aboriginal and Torres Strait Islander Australians
> LGBTI
> Disability
16
Diversity & Inclusion.
----- End of picture text -----

==> picture [162 x 225] intentionally omitted <==

We are exceptionally proud of our people. Our IVE Care program aims to help our people, through recognition and support, to achieve their personal and professional goals. Designed to create an environment that embraces our diverse workforce, our employee wellbeing program provides our 1,800+ employees access to a wide range of benefits, including:

Health and wellbeing

Our Employee Assistance Program (EAP) helps employees resolve issues and challenges arising in the workplace or in their personal life in a positive way. The EAP provides access to independent, confidential counselling and advice from qualified and experienced psychologists, and allied health professionals. IVE also provides periodic onsite health assessments to help employees understand and increase awareness of their health.

Education, information programmes and health and wellbeing campaigns are also made available to assist employees in making changes for a healthier lifestyle. As a result of awareness initiatives, access to our EAP has increased by 50% over the past 18 months. Flu vaccinations were again offered across the IVE business during FY22. The business conducted an employee awareness initiative aligned to R U OK? Day.

Lifestyle benefits

IVE Rewards program provides our employees and their families the opportunity to stretch their dollar further through significant savings at all of their favourite retailers. Our employees spent more than $1.4m through this program across FY22, yielding savings of close to $90k.

Wealth and security

IVE have partnered with Bupa to provide a corporate health insurance offer with an employee discount on rates. In addition to receiving competitive premiums, the cover reduces the waiting periods for certain benefits and provides access to the Bupa Life Skills program. IVE has also made an additional superannuation fund choice available to employees via a key client partner.

Personal, family and community

Our Workplace Giving Program has been developed to build a stronger link between IVE Group and the community. We believe each of us has an important role to play in the broader community. We have designed this program around a number of great charity partners to provide employees with a simple and effective way to regularly donate from their pre-tax earnings.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Diversity and inclusion

We come from many different nationalities, backgrounds, experiences and lines of work. Our rich diversity is at the centre of our success, and at the heart of our evolution as Australia’s leading holistic marketing company.

An inclusive working environment that embraces our unique differences and diverse perspectives, brings greater creativity and innovation, leads to higher wellbeing, productivity and engagement, and importantly, enables us to better reflect and relate to our customers.

IVE Group is committed to ensuring diversity and inclusion permeates all areas and levels of our business, with every individual feeling included, safe and supported to express themselves authentically. In recognition and support of this, we have established IVE’s Diversity and Inclusion Program, reinforcing our commitment to growing a diverse and inclusive organisational culture encompassing and benefiting all employees.

Our Diversity and Inclusion program identifies six key areas of focus:

Gender equality and inclusion, Cultural and linguistic diversity, Intergenerational and mature age
Aboriginal and Torres Strait Islander Australians
LGBTIQ (lesbian, gay, bisexual, trans/transgender, intersex, queer)
Disability

In FY22 we ran a range of employee events related to Pride Week and International Women’s Day, R U OK? Day, Liptember and we again partnered with the Australian Network on Disability to participate in their ‘Stepping Into’ internship program.

Workplace health and safety (WH&S)

IVE Group is committed to providing a healthy and safe workplace for all of our employees, contractors, visitors and suppliers, through our ‘IVE Care’ program.

IVE Care embeds WH&S principles into everything that we do. Our WH&S commitments include:

Engagement programs to ensure that our people are involved in identifying, and enabling the solutions to WHS risks.
Empowering our people to make informed, effective, risk-based decisions through education, instruction and continual improvement models.
Using innovation and continual improvement pathways to consistently improve WHS performance.
Always seeking to set industry best approaches to critical risk management.
Achievement of our objectives, targets and actions through evidence-based decision-making.
Planning, implementation and evaluation of all activities for operational excellence.
Education through information, instruction, data and analytics.

We have a dedicated, full-time team continually enhancing our WH&S processes and amplifying awareness to ensure all of our people, across all of our locations, experience the best work conditions possible.

Sustainability and risk management

As the expectations on corporate responsibility increase, and as transparency becomes more prevalent, IVE recognises the need to act on sustainability and is committed to engaging and collaborating with our clients and investors to provide an ethical and sustainable partnership.

Through the ongoing assessment of our quality, information security, ethical and environmental practices, IVE continues to focus on being a responsible business that values what’s important to our customers. IVE’s accreditations continue to make us a preferred partner for many of our customers.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Quality assurance

==> picture [75 x 39] intentionally omitted <==

IVE understands the importance of quality management and has maintained certification to ISO 9001 in Quality Management for 20 years. This commitment to quality ensures we can provide superior products and services to our customers, measured in terms of performance, reliability and durability and returned in customer satisfaction and loyalty. We regularly receive positive and welcomed feedback from our clients and strive to continue to provide this level of excellence from marketing technology through to production and distribution.

Ethical sourcing and environmental management

==> picture [71 x 20] intentionally omitted <==

IVE Group continues to deliver a number of processes to ensure that we have a focus on improved sustainability and the ongoing protection of the environments that we source from, work in and supply.

IVE expects all our suppliers (companies and individuals who conduct business with any IVE Group business unit) to adhere to the same ethical values we uphold and as such has put in place controls to ensure that every supplier is assessed, complies to our values and standards, and meets and exceeds our delivery expectations. Through the blending of our best practices and our socially responsible supply base, we are able to achieve the optimal levels of cost efficiency, product/service effectiveness and product safety in a sustainable, inclusive and socially ethical manner.

IVE is an active member of Supplier Ethical Data Exchange (SEDEX). Supplier membership is highly regarded, and allows IVE to assess risk relating to labour standards, health and safety, environmental impact and provide supply chain visibility. We understand that ensuring good business practices is important to our clients, our employees, our shareholders and we support the introduction of the Australian Modern Slavery Act 2018.

We continue to hold accreditation with the Programme for the Endorsement of Forest Certification[®] (PEFC), which tracks forest-based products from sustainable sources to the final product. It demonstrates close monitoring of each step of the supply chain through independent auditing to ensure that unsustainable sources are excluded.

Additionally, certification of our fibre, paper and fibre-based product supply chains to Forest Stewardship Council[®] standards assure they are free from any direct or indirect involvement in activities that violate traditional and human rights in forestry operations, as required by the International Labour Organization (ILO) Convention 169.4.

Modern slavery involves the exploitation of human beings, and is completely unacceptable. IVE recognises that we have a responsibility to improve our understanding and mitigate the risks of it occurring within our operations and supply chains and have implemented controls to ensure the integrity of our suppliers Our outstanding credentials include ISO 14001 Environment certification and our focus remains on delivering our promise of continual improvement by establishing sustainability targets that reflect our commitment to our customers and the communities we work in.

==> picture [172 x 139] intentionally omitted <==

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

Paper

As the largest printer in Australia, IVE is a significant user of paper from sustainably managed forests. These sustainably run forests help prevent the land being sold and lost to non-forest use e.g. agriculture or infrastructure development.

The benefits of ‘forest land’ include prevention of soil erosion, improved water quality – fighting salinity, providing habitat for native birds and wildlife and reducing the use of fertiliser and chemicals. Forests are also an important source of CO2 capture, acting as a ‘carbon sink’ – taking more carbon dioxide out of the atmosphere than they produce.

The industry is a leading recycler as 87% of paper is recovered for recycling in Australia, a substantial increase from 28% in 1990. The majority of catalogues produced are recycled Recycling complements the need for virgin wood fibre, further supporting the growth in fibre-based packaging as an environmentally sustainable alternative to plastic.

Around 90% of our paper requirement is sourced offshore as the Australian paper we use is quite specific in nature. We source paper from North America, Scandinavia, Europe, and South East, UK, Italy, Canada, Switzerland, Malaysia, France, Belgium.

Though we have seen a proliferation of electronic screens across society, findings conclude that 74% of consumers prefer to read from paper than from screens and 71% enjoy the tactile nature of paper. Consumers also fundamentally believe that when sourced from sustainably managed forests, paper and print remain a sustainable way to communicate. (Source: “The Attractiveness and Sustainability of Paper and Print” – Two Sides survey July 2016.)

Data security

==> picture [75 x 38] intentionally omitted <==

IVE invests over $2 million dollars annually to ensure we maintain best in class data security certifications such as ISO 27001, PCI DSS (RoA) and IRAP, all of which are complex and provide a mature information security profile that supports our customer’s obligations and commitment to protecting their customers’ data.

In 2022, IVE completed a group wide full infrastructure upgrade which demonstrates our commitment to continual investment and improvement in the confidentiality, integrity and availability of our information systems and the future growth of our business.

Over the past 12-24 months IVE Group has invested significantly in enterprise grade software and hardware to advance our maturity in protecting the business from cyber security risks. We also have several key initiatives underway to uplift our capabilities through endpoint, email and internet protection.

We believe that IVE leads the way in providing robust and technologically advanced systems, with the highest security requirements giving our customers the assurance they require.

Risk Management Framework

==> picture [44 x 27] intentionally omitted <==

==> picture [31 x 24] intentionally omitted <==

==> picture [29 x 27] intentionally omitted <==

The purpose of the Risk Management Framework is to provide a mechanism for IVE to identify opportunities and challenges that could impact the business, understand the risk appetite, and ensure appropriate mitigations are in place.

Together with the senior executives, the Risk Register is reviewed on a quarterly basis to ensure that risk mitigation is in place for all identified risks, and includes recent events such as COVID-19, and economic impacts affecting sales and client demand and supply volatility.

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

In the last review conducted in June 2022, the following key risks were identified as being the most relevant to the business achieving its operational and financial targets:

==> picture [486 x 572] intentionally omitted <==

----- Start of picture text -----

Key Risk Description Risk Appetite Mitigation
Supply Supply Chain IVE will execute caution • Inputs readily available through
Chain Volatility when working with multitude of suppliers
Disruption to the suppliers of key inputs. • Ability to pass costs on to
availability of There is low risk appetite customers
key inputs and/ for non-supply or
cost increases. This is • Plan production in advance
or sustained price
increases. measured by lead times, • Use of larger, reputable suppliers
cost increases and
• Sourcing from alternative countries
supplier noncompliance
with SLAs. to avoid regional tensions in South
East Asia
• Increase inventory holdings
• Increases prices in other areas
of business to offset
• Absorb some increases to
protect channel
Environment Environmental, IVE will take a balanced • Government & ASX disclosures
Social, and approach to the risks & reporting
Governance (ESG) associated with climate
• ISO 14001 certification
Pressure from change. The level of risk
investors and due taken will be planned • Appropriate and up to date
to lack of disclosure for each risk event. This certification for all suppliers
and policy to will be measured by • Ongoing gathering of
support ESG. monitoring of production accreditations for IVEs responses
downtime due to
to RFPs
climate change events,
Government reporting on • Implementation of ESG strategy
enviroment/emissions and and workstreams with outsource
ASX disclosures. providers
Macro Pandemic IVE will take a balanced • Manage work from home for
Environment COVID-19 impacts approach to the risks employees' wherever possible/
on business/business associated with changes monitor employees health,
does not react fast in the macro environment. additional cleaning at sites,
enough/not manage The level of risk taken provide hand sanitiser and
staff health will be planned for each temperature checks, split shifts
impacts. risk event. This will be
measured by monitoring • Pandemic/BCP plans, identification
by employee health, of Key Customers/Suppliers/Staff
the revenue to budget & Functions, site redundancy, staff
in customer sectors, stand downs, revenue and cost
increased debtor days forecast management
forward bookings and
• Essential service support for clients/
economic indicators.
supply chain mitigation
• Only vaccinated staff, customers
and suppliers to attend IVE sites
• High level of staff vaccinations
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

OPERATING AND FINANCIAL REVIEW (CONT.)

==> picture [486 x 447] intentionally omitted <==

----- Start of picture text -----

Key Risk Description Risk Appetite Mitigation
People Labour Supply IVE will take a balanced • Salary Reviews
Limited skilled approach to the risks • Training & Development
human resources associated with retained
• Staff Benefits i.e. Shares Bonus, EAP
available and and attracting skilled
retainment of staff workers. Each instance • Succession Planning
due to increases in will be considered on its • Flexible Workplace
market demand and own merits to drive the
competitiveness. desired outcome. This will • Employer of Choice
be measured by turnover in • Career Progression Opportunities
specific skills and roles, exit • Appropriate Contract Labour
interviews and talent loss to
Suppliers
competitors.
Competitive Existing Competition IVE will take risks in • Monitor pricing in market
Environment Drives Down Margin response to competition e.g. Ovato/others
An existing and the competitive • Continuous conversations with
competitor environment that represents customers
undertakes an value for money in the
returns obtained for the • Driving consistent and high level
aggressive and
sustained price risk taken. customer service
discounting, This will be measured
marketing or through pricing and margin
product innovation pressures, talent and client
strategy. retention and competitor
mergers or failures.
Macro Macro-economic IVE will take a balanced • Ability to pass costs on to
Environment Macro-economic approach to the risks customers
changes disrupting associated with changes • Horizon scanning by executive
the Australian in the macro-economic
environment. The level of • Indicators in day-to-day figures
economy,
international trade risk taken will be planned i.e. increased debtor days
and key sectors for each risk event. This will • MGM and margin decreases
(i.e. retail or AusPost be measured by monitoring
services). Inflation, the revenue to budget in
energy and other customer sectors, increased
cost increases. debtor days forward
bookings and economic
indicators.
----- End of picture text -----

Additional information

IVE Group Ltd Level 3, 35 Clarence Street Sydney NSW 2000

For further information contact: Geoff Selig Darren Dunkley Executive Chairman Chief Financial Officer + 61 2 9089 8550 + 61 2 8020 4400

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT

For the year ended 30 June 2022

The directors present their report together with the consolidated financial statements of the Group comprising of IVE Group Limited (the Company), and its subsidiaries (the Group) for the financial year ended 30 June 2022 and the auditor’s report thereon.

Principal activities

The principal activities of the Group during the course of the financial year were:

Conceptual and creative design across print, mobile and interactive media;
Printing and distribution of catalogues, magazines, marketing and corporate communications materials and stationery;
Manufacturing of point-of-sale display material and large format banners for retail applications;
Personalised communications including marketing automation, marketing mail, publication mail, eCommunications, and multi-channel solutions;
Data analytics, customer experience strategy, and CRM; and
Outsourced communications solutions for large organisations including development of customised multi-channel management models covering creative and digital services, supply chain optimisation, inventory management, warehousing and logistics.

The Group services all major industry sectors in Australia including financial services, publishing, retail, communications, property, clubs and associations, not-for-profit, utilities, manufacturing, education and government.

Operating and financial review

The profit after tax of the Group for the year ended 30 June 2022 was $26,932 thousand (2021 Restated: $29,060 thousand). A review of operations and results of the Group for the year ended 30 June 2022 are set out in the Operating and Financial Review, which forms part of the Annual Financial Report.

Dividends

The directors have declared a final dividend of 8.0 Australian cents per share, fully franked, to be paid on 13 October 2022 to shareholders on the register at 14 September 2022.

Total dividends of $22,191 thousand were declared and paid by the Company to members during the 2022 financial year. Further details on dividends are included in Note 23 of the Financial Report.

Significant changes in the state of affairs

In the opinion of the directors there were no other significant changes in the state of affairs of the Group that occurred during the financial year under review.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Information on Directors

The directors of the Company at any time during or since the end of the financial year are:

==> picture [486 x 485] intentionally omitted <==

----- Start of picture text -----

Director Experience, special responsibilities and other directorships
Geoff Bruce Selig Geoff has over 30 years' experience in the marketing communications sector.
Geoff was managing director of IVE Group prior to moving in to the role of
Executive Chairman
executive chairman following the Company’s listing on the ASX in December 2015.
Appointed:
Geoff is a director Caxton Group and Caxton Print Holdings, and also sits on
10 June 2015
the board of The Lysicrates Foundation. He was the State President of the NSW
Liberal Party from 2005-8.
Geoff holds a Bachelor of Economics from Macquarie University and is a member
of the Australian Institute of Company Directors.
Gavin Terence Bell Gavin is an experienced director, executive and lawyer. Gavin is currently a director
of Smartgroup Corporation Limited (ASX: SIQ) and Qantm Intellectual Property
Independent
Limited (ASX: QIP). Prior to becoming a director, Gavin was the CEO of global law
Non-executive
firm Herbert Smith Freehills. He was a partner in the firm for 25 years.
Director
Gavin holds a Bachelor of Law from the University of Sydney and a Master of
Appointed:
Business Administration from the AGSM, University of New South Wales.
25 November 2015
Committees: Chair of the Nomination & Remuneration Committee and Member of
the Audit, Risk & Compliance Committee
Sandra Margaret Sandra has a track record in driving customer-centred business transformation
Hook and transitioning traditional organisations in rapidly evolving environments.
A former Managing Director, CEO and CMO for some of Australia’s largest
Independent
media companies including News Limited, Foxtel, Federal Publishing Company,
Non-executive
Murdoch Magazines and Fairfax she brings more than 20 years’ experience as a
Director
non-executive director on listed, public and private companies and government
Appointed: bodies. Sandra is currently director of, MedAdvisor Ltd (ASX: MDR) ICollege
1 June 2016 Limited (ASX: ICT) CRC Fight Food Waste and the Sydney Harbour Foundation
Management Ltd.
Sandra is a graduate of the Australia Institute of Company Directors.
Committee : Member of the Nomination & Remuneration Committee
Paul Stephen Selig Paul’s career commenced in banking and treasury management before moving
into the print and marketing communications sector over 25 years ago. He has
Executive Director
been a director of the Company since 2012, and appointed to IVE Group Limited on
Appointed: its incorporation in 2015. Paul is an experienced director and investor having run
10 June 2015 the Caxton Group family office for over 15 years.
Paul is also a director of Caxton Group, Caxton Print Holdings and Caxton
Property Developments. He holds a Bachelor of Economics (Hons) from
Macquarie University.
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

==> picture [486 x 588] intentionally omitted <==

----- Start of picture text -----

Director Experience, special responsibilities and other directorships
James Scott James is an experienced company director, corporate adviser and investor.
Charles Todd He commenced his career in investment banking and has taken active roles
in a range of private and public companies. He was until recently Managing
Independent
Director of Wolseley Private Equity, an independent private equity firm he
Non-executive
co-founded in 1999.
Director
James is also a Non-Executive Director of three other ASX listed companies, HRL
Appointed:
Holdings Limited (ASX: HRL), Coventry Group Limited (ASX: CYG), and Bapcor
10 June 2015
Limited (ASX: BAP).
James holds a Bachelor of Commerce and a Bachelor of Laws from the University
of New South Wales, and a Graduate Diploma of Applied Finance from the
Financial Services Institute of Australasia (FINSIA), where he is a Fellow. He is
also a member of the Australian Institute of Company Directors.
Committees: Member of the Audit, Risk & Compliance Committee and Nomination
& Remuneration Committee
Catherine Cathy is an internationally experienced executive and non-executive director
Ann Aston across a diverse range of sectors including telecommunications, digital,
government and financial services. She has a broad commercial background with
Independent,
senior roles including CEO, CFO, marketing, strategy and digital business.
Non-executive
Director Cathy is currently a director of Macquarie Investment Management Ltd, IMB
Bank Ltd (Chair, Risk Committee) and Integrated Research Ltd (ASX: IRI; Chair,
Appointed:
Audit and Risk Committee). She was previously a director of Virtus Health Ltd
15 December 2020
(ASX: VRT) and Over The Wire Ltd (ASX: OTW) up to 27 June 2022.
Cathy holds a Bachelor of Economics from Macquarie University and a Master
of Commerce from the University of NSW. She is a Senior Fellow of the Financial
Services Institute of Australasia and a graduate of the Australian Institute of
Company Directors.
Committees: Chair of the Audit, Risk and Compliance Committee, Member of the
Nomination and Remuneration Committee.
Andrew Bird Andrew has extensive financial, operational and strategic experience acquired
from a 30-year executive career in consulting, strategy, digital and investment
Independent,
roles primarily in Australia.
Non-executive
Director Following the earlier part of his career in management consulting with Booz,
Allen and Hamilton, he joined CCH, a multi-national listed publishing company
Appointed:
and ran one of their business units in Australia. In 1997 Andrew co-founded Aspect
1 April 2022
Huntley. This business was acquired by Morningstar in 2006 and Andrew was
appointed CEO for Australia and New Zealand. In 2010 Andrew established
his own family investment firm with a focus on private equity and early-stage
investments in technology and information businesses.
Andrew is currently the Chair of Sharesight Limited and a Director of LegalVision
and Allette Systems.
Andrew holds a Bachelor of Arts from Williams College in Massachusetts, USA
and an MBA from INSEAD Business School in Fontainebleau, France.
Committee: Member of the Nomination & Remuneration Committee
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Company Secretaries

Sarah Prince

Sarah was appointed as joint Company Secretary on 25 November 2020. Sarah is an experienced Company Secretary and has worked with ASX-listed entities in the biotech, technology, managed funds, legal and mining and resources industries. Sarah holds a Bachelor of Arts, Bachelor of Laws and a Graduate Diploma of Applied Corporate Governance. Sarah is a member of The Governance Institute of Australia and is admitted as a Solicitor of the Supreme Court of New South Wales.

Darren Dunkley

Darren has been the Chief Financial Officer (CFO) of the Group since 2012, and has been with IVE for over 15 years. He has over 25 years of experience with a range of blue chip companies including Sharp Corporation, ANZ Banking Group Ltd and Nashua Australia. Darren has a Bachelor of Commerce majoring in Accounting and is a CPA.

Meetings of Directors

The number of directors’ meetings (including meetings of committees of directors) and number of meetings attended by each of the directors of the Company during the financial year are:

==> picture [486 x 188] intentionally omitted <==

----- Start of picture text -----

Audit, Risk & Nominations &
Other
Board Compliance Remuneration
Committees
Committee (ARCC) Committee (NRC)
Eligible Attended Eligible Attended Eligible Attended Eligible Attended
Geoff Selig 15 14 - - - - 2 2
Gavin Bell 15 15 4 4 3 3 - -
Sandra Hook 15 15 - - 3 3 - -
Paul Selig 15 15 - - - - -
James Todd 15 15 4 4 3 3 - -
Catherine Aston 15 15 4 4 - - 2 2
Andrew Bird 4 4 - - - - - -
----- End of picture text -----*

Andrew Bird was appointed as a director of the Company on 1 April 2022.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Directors’ interest and benefits

The relevant interests of each director in the shares of the Company as at the date of this report are disclosed in the Remuneration Report (on page 31).

Environmental regulation

The Group's operation is not subject to any significant environmental regulations under either Commonwealth or State legislation. However, the Board believes that the Group has adequate systems in place for the management of its environmental requirements and is not aware of any breach of those environmental requirements as they may apply to the Group during the period covered by this report.

Events subsequent to reporting date

On 10 August 2022 the Group announced it had entered into an Implementation Deed with the administrators of Ovato Limited under which the parties agree to progress good faith negotiations for signing of an asset sale agreement in which the Group may acquire certain business or assets of Ovato Limited, subject to clearance from the Australian Competition and Consumer Commission.

Aside from the above, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in future financial years.

Likely developments

Information about likely developments in the operations of the Group and the expected results of those operations in future financial years has not been included in this report because disclosure of the information would be likely to result in unreasonable prejudice to the Group.

Indemnification and insurance of officers

During the financial year, the Group paid a premium insuring the directors of the Group, the company secretaries, and executive officers to the extent permitted by the Corporations Act 2001.

The Group indemnified its directors and company secretaries to the extent permitted by law against a liability incurred.

Indemnification and insurance of auditor

During or since the end of the financial year the Group has not indemnified or made a relevant agreement to indemnify the auditor of the Group against a liability incurred as the auditor. In addition, the Group has not paid, or agreed to pay, a premium in respect of a contract insuring against a liability incurred by the auditor.

Insurance premiums

During the financial year the Company has paid premiums in respect of directors’ and officers’ liability insurance contracts for the year ended 30 June 2022. In addition, since the financial year, the Company paid or agreed to pay premiums in respect of such insurance contracts for the year ending 30 June 2023. Such insurance contracts insure against certain liability (subject to specific exclusions) for persons who are or have been directors or executive officers of the Company.

The directors have not included details of the nature of the liabilities covered or the amount of the premiums paid in respect of the directors’ and officers’ liability insurance contracts, as such disclosure is prohibited under the terms of the contract.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Remuneration Report (Audited)

Introduction

This Remuneration Report ( Report ), which has been audited, describes the Key Management Personnel ( KMP ) remuneration arrangements for the 12 months ended 30 June 2022 for IVE Group, in accordance with the Corporations Act 2001 (Cth) ( Corporations Act ) and its regulations.

The Report is designed to provide shareholders with an understanding of IVE Group’s remuneration philosophy and the link between this philosophy and IVE Group’s strategy and performance.

The Board is committed to having remuneration policies and practices which are designed to ensure remuneration is equitable, competitive and reasonable to attract and retain key talent who are critical to IVE Group’s business success, align with long-term interests of the Company and its shareholders, and to ensure that any incentives do not reward conduct that is contrary to the Company’s values or risk appetite. IVE Group will align remuneration to strategies and business objectives and provide a balance between fixed and variable rewards to ensure that rewards are given for performance. Remuneration structures are designed to be transparent to employees and other stakeholders and easily understood. In addition, the remuneration framework is designed to be acceptable to shareholders by being consistent with market practice and creating value for shareholders.

The 2022 financial year (FY22) saw the continuation of the economic, social and health impacts of the COVID-19 pandemic in addition to ongoing supply chain challenges. Our shareholders, employees and clients continued to be impacted, and market conditions remained challenging. In this context, the financial and non-financial performance of the Company during 2022 was strong.

The Board is mindful that the unprecedented impact of COVID-19 has affected IVE Group’s people in many different ways and are extremely proud of the manner in which its people rose to the challenges presented to continue to focus on delivering excellent service and products to its customers. In recognition, all staff, other than the Directors, were offered 500 shares in IVE Group for nil consideration in September 2021. These shares were offered in recognition of staff efforts and sacrifices during the COVID-19 pandemic.

This performance of the Company and the leadership shown by the leadership team is reflected in the remuneration outcomes for FY22. In the context of COVID-19 and other challenging macro factors the company performed very strongly during FY22.

The Company achieved an EBITDA result of $96.6m on an underlying basis post AASB16. This compares to FY21 EBITDA of $85.3m (excluding JobKeeper). This resulted in the target for the payment of the key financial component of the Short Term Incentive (STI) being achieved. Performance against non-financial performance measures and the overall performance of the company was also very strong. This resulted in the payment of 100% of the STI to each of the Executive Chairman, the CEO and the CFO.

The 2019 Long-Term Incentive (LTI) grant reached the end of its three-year vesting period on 30 June 2022. None of the relevant rights vested as the TSR and EPS performance conditions were not met. The EPS condition, in particular, was heavily influenced by the impact of the pandemic across the most of the vesting period.

At the 2021 Annual General Meeting, 97.59% of the shares voted at the meeting were cast in favour of the adoption of the Remuneration Report for the year ended 30 June 2021.

The Board will continue to review the effectiveness of the Company’s remuneration practices and to ensure they are appropriately benchmarked and they align with strategic performance objectives, to appropriately rewards its executives and deliver shareholder value.

The Board considers that the members of the Nomination and Remuneration Committee (NRC) possess the necessary expertise and independence to fulfil their responsibilities and are able to access independent experts in remuneration for advice should this be required. The governance processes in relation to remuneration are working effectively and the Board trusts that shareholders find this Report useful and informative.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

As outlined in the Operating and Financial Review, the FY22 financial performance continued to be impacted by the unprecedented global COVID-19 pandemic, in addition to ongoing global supply chain issues and inventory shortages. This is in the context of a competitive market and challenging macro-economic environment. The Board believes that the remuneration outcomes for the Executive KMP for the 2022 financial year reflect this and satisfy the goals of the remuneration framework.

The remuneration report contains the following sections:

Introduction
Persons covered by this Report
Overview of the remuneration framework for Executive KMPs
Linking reward and performance
Grant of Performance Share Rights and the Long-Term Incentive Plan
Non-Executive Director remuneration framework
Contractual arrangements with Executive KMPs
Details of remuneration for KMPs
Rights Granted to Executive KMP
Directors and Executive KMP shareholdings in IVE Group Limited
Other statutory disclosures

Who this report covers

This report covers Non-Executive Directors and Executive KMPs (collectively KMP) and includes:

==> picture [486 x 264] intentionally omitted <==

----- Start of picture text -----

Role
Non-Executive Directors
Gavin Bell Independent Non-Executive Director
Sandra Hook Independent Non-Executive Director
James Todd Independent Non-Executive Director
Catherine (Cathy) Aston Independent Non-Executive Director
Andrew Bird Independent Non-Executive Director
(appointed 1 April 2022)
Executive Key Management Personnel
Gavin Bell Independent Non-Executive Director
Sandra Hook Independent Non-Executive Director
James Todd Independent Non-Executive Director
Catherine (Cathy) Aston Independent Non-Executive Director
Andrew Bird Independent Non-Executive Director
(appointed 1 April 2022)
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Overview of IVE Group’s remuneration framework for Executive KMP

The objective of IVE Group’s remuneration philosophy is to ensure Executive KMP are rewarded for business performance and retained to continue to grow the business. The objectives underpinning the remuneration philosophy are that remuneration will:

Be competitive and reasonable to attract and retain key talent;
Align to IVE Group’s strategies and business objectives;
Provide a balance between fixed and variable rewards;
Be transparent and easily understood; and
Be acceptable to shareholders.

A key factor in IVE Group’s business success will be being able to attract and retain key talent and the remuneration framework has been designed to enable this.

Governance

IVE Group has established the NRC whose role is to assist the Board with its remuneration responsibilities, including reviewing and recommending to the Board for approval, arrangements for executives, Executive Directors and Non-Executive Directors. The NRC has three members, all of whom are independent, including an independent committee chair. The members of the NRC have appropriate qualifications and experience to enable the NRC to fulfil its role.

In addition, the Board has appointed Gavin Bell as the Lead Independent Director to fulfil the role of chair whenever the Executive Chairman is conflicted and to assist in reviewing the Executive Chairman’s performance as part of the Board performance evaluation process.

External remuneration consultants

The Terms of Reference for the NRC requires that any remuneration consultants engaged be appointed by the NRC. No remuneration consultants were engaged in FY22.

Any advice that may be received from remuneration consultants in future will be carefully considered by the NRC to ensure it is given free of undue influence by IVE Group executives.

Structure of Remuneration

The remuneration framework for Executive KMP includes both fixed and performance-based pay.

Fixed remuneration

Fixed remuneration is set using a combination of historical levels and sector comparisons. Fixed remuneration includes base pay, statutory contributions for superannuation and non-monetary benefits. Paying Executive KMP the right fixed remuneration is a key tool in attracting and retaining the best talent.

The NRC reviews the fixed remuneration of Executive KMP on an annual basis. Matt Aitken’s fixed remuneration was increased effective 1 July 2022 from $640,000 to $700,000 p.a. and Darren Dunkley’s fixed remuneration increased effective 1 April 2022 from $420,000 to $520,000 p.a. No other changes were made to the fixed remuneration for KMP during FY22. The NRC has determined that there will be no further changes to fixed remuneration for FY23.

Fixed remuneration is the major component of the Executive Chairman’s remuneration. Through his family arrangements, he has an interest in a substantial shareholding in the Company. This provides significant alignment with shareholders’ experience.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Short Term Incentive ( STI )

The NRC reviews the achievement of STI targets at the end of each year and sets STI targets for the following year. The STI is the main tool for rewarding the current year’s performance of the business.

In FY22, Executive KMP (excluding Paul Selig) were eligible to receive an STI payment of between 21% and 47% of fixed remuneration. The STI is a cash incentive payment and full payment is conditional on achievement of the following:

The key financial performance target for the Group, specifically, pro-forma Earnings before Interest, Tax, Depreciation and Amortisation ( EBITDA ) for the year in review;
Group level Workplace Health and Safety targets for the year in review;
Individual financial and non-financial performance targets relevant to the individual Executive KMP which includes strategic and other measurements. Individual measurements vary depending on the nature and specific strategic areas attributable to the Executive KMP to align with the IVE Group’s strategic objectives.

The Board determines the STI payment for Executive KMP by allocating a percentage weighting across the above measures. At the end of the financial year, the Board assesses the individual and collective performance against the STI measures and retains an overall discretion in relation to the assessment of performance, to take into account, for example, overall performance and any changes to priorities.

The percentage weightings across financial and non-financial targets, and the assessed performance achieved during FY22 for each of the KMP to whom an STI payment was made was as follows.

==> picture [486 x 126] intentionally omitted <==

----- Start of picture text -----

KMP Group EBITDA Individual Non-financial Total STI
target financial targets targets achieved
% % % % % %
Target Achieved Target Achieved Target Achieved
Geoff Selig 40.00 40.00 0.00 0.00 60.00 60.00 100.00 100.00%
Matt Aitken 40.00 40.00 0.00 0.00 60.00 60.00 100.00 100.00%
Darren Dunkley 40.00 40.00 17.00 17.00 43.00 43.00 100.00 100.00%
----- End of picture text -----

Non-financial KPIs for KMP

The non-financial performance measures for the Executive KMP were as follows:

• Geoff Selig, Executive Chairman Effective leadership of the Group and Board, lead culture survey and develop plan to address any identified issues, develop plan to increase diversity among senior and middle management, enhance investor relations, successful development and implementation of M&A growth strategy, establish ESG strategy and framework, successful launch and deployment of Lasoo and workplace health and safety performance.

Matt Aitken, Chief Executive Officer

Effective leadership of the business, lead culture survey and develop plan to address any identified issues, develop plan to increase diversity among senior and middle management, successful development and implementation of M&A growth strategy, establish ESG strategy and framework, successful launch and deployment of Lasoo and workplace health and safety performance.

Darren Dunkley, Chief Financial Officer

Effective leadership of Group financial oversight and reporting, enhance investor relations; successful development and implementation of M&A growth strategy, establish ESG strategy and framework, effective management of finance ERP projects and successful renegotiation of the banking facility and workplace health and safety performance.

The FY22 Actual STI and FY23 maximum STI amounts for Executive KMP are shown in the table on page 37.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

- Long Term Incentive (LTI)

The Board has established an LTI Plan as outlined in prior years’ Remuneration Reports and outlined in the section in this Report entitled ‘Share-based remuneration’. The LTI Plan was last approved by shareholders at IVE’s 2021 Annual General Meeting (AGM). The LTI Plan is largely used to reward long-term sustainable performance.

The LTI Plan facilitates the offer of Performance Share Rights ( Rights ) to key executives and the Rights vest and convert to ordinary shares on a one-for-one basis, subject to meeting specific performance conditions. The current performance conditions are:

relative total shareholder return ( TSR );
compound annual earnings per share growth based on NPAT ( EPS ) over a three-year Performance Period and there is no-retesting of performance hurdles

The LTI Plan, including the combination of TSR and EPS hurdles, has been designed commensurate with IVE Group’s long-term strategic objectives so that Executive KMP will only receive a substantial component of LTI when there has been strong absolute and relative performance.

The grant of Rights during FY22 to the Executive Chairman was approved by shareholders at the 2021 AGM.

The Board has the discretion to amend the future vesting terms and performance hurdles at the grant of each award of Rights to ensure that they are aligned to market practice and ensure the best outcome for IVE Group. The Board also has the discretion to change the LTI Plan and to determine whether LTI grants will be made in future years.

The Board makes changes to the level of LTI to grant each year based on reviews of total remuneration packages for executives. The NRC decided not increase the level of long-term incentives for FY23. They will remain in-line with the same quantum agreed in respect of FY19, FY20, FY21 and FY22. The NRC believe that the issue of long-term equity incentivises and aligns management’s remuneration with shareholders’ longer-term interests.

The staged approach to executive remuneration over recent years has led to the current level of executive remuneration which the Board feels is appropriate in the challenging and competitive sector in which the Group operates. All rewards, other than fixed remuneration, are subject to achieving the performance conditions outlined above.

Assessment of performance

Performance of Executive KMPs is assessed against the agreed non-financial and financial targets on a regular basis. Based on this assessment, the Executive Chairman will make a recommendation to the NRC for Board approval of the amount of STI and LTI to award (as applicable) to each KMP, other than the Executive Chairman. Recommendations in relation to the Executive Chairman are made by the chair of the NRC, for Board approval.

The NRC assesses the actual performance of IVE Group and the Executive Chairman against the agreed targets and recommends the amount of the STI and LTI (as applicable) to be paid for approval by the Board.

Executive KMP remuneration - paid, vested and targets

The table below presents the STI paid and LTI vested to Executive KMP during FY21 and FY22. Further detail on remuneration is included in the tables at the end of this Report.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

==> picture [486 x 225] intentionally omitted <==

----- Start of picture text -----

All in $ STI LTI – Number of Rights
Maximum Actual Granted Vested
Geoff Selig FY22 200,000 200,000 168,067 Not applicable
(3-year vesting)
FY21 200,000 170,000 384,615 Not applicable
(3-year vesting)
Matt Aitken FY22 300,000 300,000 168,067 Not applicable
(3-year vesting)
FY21 300,000 270,000 384,615 Not applicable
(3-year vesting)
Darren Dunkley FY22 180,000 180,000 126,050 Not applicable
(3-year vesting)
FY21 180,000 162,000 288,461 Not applicable
(3-year vesting)
----- End of picture text -----

Further detail on the value of the Rights granted is included in the tables at the end of this Report.

Proportions of fixed and variable remuneration

The Board and NRC consider annually the fixed remuneration and proportion of variable remuneration that is dependent on performance (“at risk”) for each Executive KMP. The relative proportions of fixed versus variable pay (as a percentage of total remuneration) received by Executive KMP during the past two financial periods and proposed for the next financial period are shown below. This chart shows the staged process the NRC has undertaken to increase the proportion of at risk remuneration.

As shown below, no changes are proposed to Executive KMP remuneration for FY23 following the assessment of performance, other than the increase to the CEO’s fixed remuneration effective 1 July 2022. There were also no changes during FY22 other than increases to the FY21 STI of the CEO and the CFO which were designed to incentivise performance in what remains an uncertain period, and an increase to the CFO’s fixed remuneration.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

==> picture [486 x 163] intentionally omitted <==

----- Start of picture text -----

All in $ Fixed Remuneration [1] STI LTI
FY21 FY22 FY23 FY21 FY22 FY23 FY21 FY22 FY23
Actual Actual Agreed Actual Actual Maximum Grant Grant Grant [2]
Geoff
952,000 952,000 952,000 170,000 200,000 200,000 200,000 200,000 200,000 [3]
Selig
Matt
640,000 640,810 700,000 270,000 300,000 300,000 200,000 200,000 200,000
Aitken [6]
Darren
420,000 450,483 520,000 162,000 180,000 180,000 150,000 150,000 150,000
Dunkley
Paul
330,000 330,000 330,000 0 0 0 N/A N/A N/A
Selig [4]
----- End of picture text -----

1 Fixed remuneration includes superannuation.

2 LTI grant is the $ value of the grant approved by the Board.

3 FY23 LTI grant for Geoff Selig is subject to shareholder approval.

4 Due to the specific nature of his role, Paul Selig does not participate in the LTI Plan.

The Board uses a fair value method to determine the value of performance rights issued under the LTI Plan, which was last approved by shareholders in 2021. This is consistent with the required accounting treatment of rights and the basis on which the KMP remuneration arrangements were agreed. The Board recognises that some stakeholders advocate the use of the face value method to determine the value of performance rights. A face value approach does not take into account the risk that rights may not vest and that the rights are not entitled to dividends. In a year where there is no change to remuneration arrangements and no LTI award vested, a move to a face value approach would effectively reduce the Executive KMP’s remuneration.

The Executive KMPs’ remuneration arrangements were agreed assuming a fair value approach. The FY23 LTI will again use a fair valuation calculation to determine the quantity of performance rights to be granted to Executive KMP. Given the significant volatility in the Company’s share price since March 2020 to the date of this report as a result of the COVID-19 pandemic, the Board agreed that the measurement date for the fair valuation report will be based on the volume weighted average price of the 20 trading days following the release of the Company’s full year 2022 results, as was done in 2020 and 2021. The Board believes that this will allow the market to absorb the full year results and align the fair valuation closer to the date of grant, noting that a different valuation methodology is applied per AASB 2 share-based payments.

If a face value method were used, the FY22 LTI grant for each of the Executive KMP would be as indicated in the table below. The number of performance rights to be granted under the FY23 LTI will be determined and reported in the 2023 remuneration report.

==> picture [485 x 108] intentionally omitted <==

----- Start of picture text -----

FY22 Fair Value FY22 Face Value [1]
(No. of rights) (No. of rights)
Geoff Selig 168,067 137,931
Matt Aitken 168,067 137,931
Darren Dunkley 126,050 103,448
Paul Selig 0 N/A
----- End of picture text -----

1 Based on the closing share price on 1 July 2021 of $1.45 per share.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

How reward is linked to performance

Performance indicators and link to performance

Notwithstanding the impacts of the unprecedented COVID-19 pandemic during the 2020, 2021 and 2022 financial years, IVE Group’s financial performance has been strong since listing on the ASX in December 2015. Performance of the business is reflected in the outcome of the variable components to the remuneration framework:

full STI payments are only made if Executive KMP meet agreed financial and non-financial targets for the year in review (and the FY20 STI payment was suspended due to the impact of COVID-19); and
LTI grants only vest if IVE Group achieves the targets set for TSR and EPS over a three-year performance period.

Performance rights granted to KMP in 2018 under the FY19 LTI reached their vesting date during FY22. Of these, NIL performance rights granted to KMP vested and 359,475 unvested performance rights lapsed in accordance with the IVE Group Equity Incentive Plan rules as set out below:

==> picture [487 x 185] intentionally omitted <==

----- Start of picture text -----

Total LTI 60% of 40% of Vested Lapsed
Grant FY19 Performance Performance
Share Rights Share Rights
Earnings Per Relative
Share Target Total
(EPS) Shareholder
Return (TSR)
Geoff Selig 130,718 78,431 52,287 0 130,718
Matt Aitken 130,718 78,431 52,287 0 130,718
Darren Dunkley 98,039 58,823 39,216 0 98,039
Paul Selig N/A N/A N/A N/A N/A
359,475 215,685 143,790 0 359,475
----- End of picture text -----

The relevant performance conditions were as follows:

==> picture [486 x 194] intentionally omitted <==

----- Start of picture text -----

60% of Performance Share Rights 40% of Performance Share Rights
Earnings Per Share Target (EPS) Relative Total Shareholder Return (TSR)
EPS Target 7.75% Performance Granted Vested
Share Rights
Company ranks below Nil
50th percentile
Less than 90% of target Nil Company ranks at the 50%
achieved 50th percentile
90-99% of target 80% Company ranks Straight line vesting
achieved between the 50th and
75th percentile
Target achieved or 100% Company ranks at or 100%
exceeded above 75th percentile
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Accumulated pro-forma EPS growth over the three-year vesting period between FY19 to FY21 was less than 90% of the EPS Target. Accordingly, none of the EPS tranche of performance rights vested.

IVE Group was ranked as 14 (43.48 percentile) compared to the relevant FY19 LTI peer group as at 30 June 2022. Accordingly, none of the TSR tranche of performance rights vested.

Unvested rights were forfeited in accordance with the LTI plan rules.

Key financial metrics over the last five years are shown below:

==> picture [449 x 235] intentionally omitted <==

----- Start of picture text -----

FY22 Pre FY22 Post
FY18 FY19 [3] FY20 [2] FY21
AASB16 AASB16
Revenue ($m) 695.4 723.6 677.4 656.7 759.0 759.0
EBITDA ($m) 73.2 82.0 57.3 59.3 75.1 96.6
Net profit after 32.4 33.0 18.5 19.9 33.4 33.1
tax ($m)
Dividend
payment (cents 15.5 16.3 0.0 14.0 16.5 16.5
per share)
Dividend
71% 71% 0% 67% 72% 72%
payout ratio [4]
Share price +0.162 (0.23) (1.26) +0.655 +0.28 +0.28
change ($) [1]
EPS (NPAT) 0.227 0.228 0.125 0.135 0.231 0.231
EPS (NPATA) 0.252 0.253 0.152 0.162 0.254 0.254
----- End of picture text -----

The above results are prepared on an underlying continuing business basis, pre AASB16, FY22 are also presented on a post AASB16 basis. Underlying continuing business basis results exclude all non-operating items (including JobKeeper). This better reflects the underlying operating performance and is consistent with guidance.

1 Calculated as close price on 30 June for the applicable year.

2 FY20 revenue, EBITDA and NPAT have been updated on a continuing business basis i.e. excluding TeleFundraising for FY21 comparative purposes.

3 FY19 & prior years revenue, EBITDA, NPAT and EPS have not been adjusted for TeleFundraising divestment in FY21.

4 FY21 dividend payout ratio is based on underlying NPAT including JobKeeper.

Grant of Performance Share Rights

During the year, the Company made offers of Rights under the LTI Plan to the Senior Leadership Team with clear performance measures.

On 25 November 2021, offers were made granting 823,526 performance rights under the Senior Leadership Team Plan. Of these, 168,067 were granted to Geoff Selig for which approval for the issue was obtained under ASX Listing Rule 10.14 at the 2021 Annual General Meeting. These Rights vest following the release of the FY24 financial results if specified performance conditions are met during the Performance Period which is 1 July 2021 to 30 June 2024.

In total there were 3,355,195 unvested Rights at 30 June 2022 from the FY20, FY21 and FY22 offers.

There were no offers of options during the year and there are no unvested options.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

The terms of the Equity Incentive Plan which provide the framework under which the LTI grants were made in FY18, FY19, FY20, FY21 are as follows:

==> picture [486 x 488] intentionally omitted <==

----- Start of picture text -----

Feature Terms of the IVE Group Equity Incentive Plan
Type of security Performance Share Rights which are an entitlement to receive fully paid ordinary
IVE Group Limited shares (as traded on the ASX) on a one-for-one basis.
Valuation The number of Performance Share Rights for each KMP is calculated by dividing the
allocated value of the LTI award for that KMP by the fair value of a Performance
Share Right. The fair value is calculated using a Monte Carlo simulation approach
for the Awards subject to the Relative TSR condition and a risk neutral assumption
is used the value the Awards subject to the EPS condition.
For the Executive Chairman and Managing Director (if applicable), the LTI grant,
as recommended by the Board, will be submitted for approval by shareholders at
the relevant Annual General Meeting, as required by the ASX Listing Rules.
Performance Period The Performance Period is the three-year period 1 July to 30 June inclusive.
Performance The number of Performance Share Rights that may vest will be determined
Conditions by reference to:
• Earnings Per Share ( EPS ) compound annual growth over the Performance
Period. EPS growth will be calculated as IVE Group’s underlying Net Profit After
Tax adjusted for amortisation of customer contracts ( NPATA ) divided by the
undiluted weighted average shares on issue throughout the Performance Period,
using the following formula:
Year 3 EPS
EPS CAGR = [3] ( ————————––– ) — 1
Year 0 EPS
(Benchmark 1); and
• Relative Total Shareholder Return ( TSR ) performance of the Company in
comparison to similar companies in a peer group determined by the Board. The
peer group for the FY20 offer is the ASX Small Ordinaries Index. The TSR of each
company will be measured from the start of the Performance Period to the end
of the Performance Period (Benchmark 2),
(collectively the Performance Conditions ).
Together Benchmark 1 and Benchmark 2 comprise the total Performance
Conditions but act independently relative to their specific target component of
60% and 40% of Performance Share Rights, respectively.
Re-testing There is no re-testing. Any unvested LTI after the test at the end of the
Performance Period will lapse immediately.
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

==> picture [486 x 385] intentionally omitted <==

----- Start of picture text -----

Feature Terms of the IVE Group Equity Incentive Plan
Forfeiture All Rights will lapse if the participant elects to cease employment with IVE Group
prior to the Conversion Date (being the date that Performance Share Rights
convert to shares).
Rights will immediately lapse if the participant is dismissed or removed from office
as an employee for any reason which entitles IVE Group to dismiss the participant
without notice or if the participant acts fraudulently, dishonestly or in breach of
their obligations to the Company.
The only exception to the lapse of rights if for a Good Leaver reason detailed
below:
• Any unvested Rights will not lapse if the participant’s employment with IVE
Group ceases due to death, ill-health, total permanent disability or sale of the
business in which they are employed.
• Rights for employees who cease employment due to death will vest in full upon
cessation.
• Rights for other good leavers will remain on foot and will be tested against the
Performance Conditions as at the Vesting Date, vesting on a pro-rata basis.
The Board has discretion to allow vesting for other reasons, such as retirement or
redundancy.
Clawback The Board has broad “clawback” powers if, amongst other things, the participant
has acted fraudulently or dishonestly, engaged in gross misconduct or has acted
in a manner that has brought the Company into disrepute, or there is a material
financial mis-statement, or the Company is required or entitled under law or
company policy to reclaim remuneration from the participant, or the participant’s
entitlements vest as a result of the fraud, dishonesty or breach of obligations of
any other person and the Board is of the opinion that the incentives would not
have otherwise vested.
----- End of picture text -----

The terms of offer made under the IVE Group Equity Incentive Plan were amended slightly in FY22 with regards to Benchmark 1. Benchmark 1 for the FY22 offer was determined as follows:

Earnings Per Share ( EPS ) compound annual growth over the Performance Period. EPS growth will be calculated as IVE Group’s underlying Net Profit After Tax ( NPAT ) divided by the undiluted weighted average shares on issue throughout the Performance Period, using the following formula:

Year 3 EPS EPS CAGR =[3] ( ————————––– ) — 1 Year 0 EPS

TSR Peer Group for FY22 Offer

As with FY21, the peer group for FY22 differed to previous years where the Board sought to include similar companies and, in addition to their size, considered characteristics such as being a direct competitor, operating in a similar industry or sector, generating revenue in Australia only, being exposed to domestic economic conditions including consumer spending and marketing spend.

Due to changes in the market and the lack of material numbers of useful comparator companies, the peer group chosen for the FY 2022 grant are the companies who are included in the ASX Small Ordinaries Index at the commencement of the performance period, being 1 July 2021.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Non-Executive Director Remuneration

Non-Executive Directors enter into service agreements through letters of appointment which are not subject to a fixed term. Non-Executive Directors receive a fee for their contribution as Directors. Fees are determined with reference to the demands of the role and the responsibilities carried out by Directors. The fee setting process also takes into account market levels, the need to attract high quality Directors and the size and complexity of the Company.

Directors receive fees for their role as members of the Board and, where applicable, for additional responsibilities. Non-Executive Directors do not receive additional fees for being a Chair or member of a Board Committee. Non-Executive Directors do not receive any variable or performance-based remuneration. Where Directors are required to provide additional services, these are paid on a fixed fee basis or determined on an hourly basis depending on the nature of the service. There were no additional services provided in FY22 by Non-Executive Directors.

During FY22, the Board did not increase fees paid to Non-Executive Directors. It should also be noted in FY2020 the Non-Executive Directors agreed to a temporary fee reduction of 50% applying to the three months ended 30 June 2020, as a result of COVID-19. An increase of $5,000 per Non-Executive director has been approved for FY23 and will be reflected in the 2023 Remuneration Report. The annual fees provided to Non-Executive Directors for FY22 are shown below (inclusive of superannuation):

==> picture [270 x 53] intentionally omitted <==

----- Start of picture text -----

Chair fee Non-Executive Director fee
(effective since 1 July 2018)
N/A as Executive Chairman $105,000
----- End of picture text -----

The total Non-Executive Director fee pool has a maximum value of $1 million per annum. The total amount paid to Non-Executive directors in FY22 was $446,250, being 44.6% of the approved fee pool. There is no intent to seek approval to increase the Non-Executive Director fee pool at the 2022 AGM.

Non-Executive Directors do not receive fees that are contingent on performance, shares in return for their services, retirements benefits (other than statutory superannuation) or termination benefits.

Executive Directors are not remunerated separately for acting as Directors.

Directors are not required under the Constitution or any other Board policy to hold any shares in IVE Group. The remuneration paid to Non-Executive Directors is detailed in the tables later in this Report.

Contractual arrangements with Executive KMPs

Remuneration and other conditions of employment are set out in the Executive KMPs employment contracts. The key elements of these employment contracts are summarised below

==> picture [483 x 183] intentionally omitted <==

----- Start of picture text -----

Name: Geoff Selig
Title: Executive Chairman
Terms of Agreement: No fixed term – subject to termination provisions detailed below
Details: Annual remuneration includes cash salary, superannuation and non-cash benefits
Incentives – eligible to participate in short-term incentive and equity
remuneration plans
Termination: Termination – 12 months written notice (except in certain circumstances, such as
where committed any breach or material neglect of the material terms of his
contract of employment, or any act of serious or wilful misconduct) by Company
or employee.
All payments on termination will be subject to the termination benefits cap under
the Corporations Act 2001 in the absence of shareholder approval.
Post-employment - 12 months restraint provisions
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

==> picture [483 x 563] intentionally omitted <==

----- Start of picture text -----

Name: Paul Selig
Title: Executive Director
Terms of Agreement: No fixed term – subject to termination provisions detailed below
Details: Annual remuneration includes cash salary, superannuation and non-cash benefits
Incentives – discretionary bonus
Termination: Termination – 3 months written notice (except in certain circumstances, such as
where committed any breach or material neglect of the material terms of his
contract of employment, or any act of serious or wilful misconduct) by Company
or employee.
All payments on termination will be subject to the termination benefits cap under
the Corporations Act 2001 in the absence of shareholder approval.
Post-employment - 12 months restraint provisions.
Name: Matt Aitken
Title: Chief Executive Officer (appointed 5 August 2019)
Terms of Agreement: Chief Operating Officer (ceased 5 August 2019)
Details: No fixed term – subject to termination provisions detailed below
Annual remuneration includes cash salary, superannuation and non-cash benefits
Incentives – eligible to participate in short-term incentive and equity remuneration plans
Termination: Termination – 9 months written notice (except in certain circumstances, such as
where committed any breach or material neglect of the material terms of his
contract of employment, or any act of serious or wilful misconduct) by Company
or employee.
All payments on termination will be subject to the termination benefits cap under
the Corporations Act 2001 in the absence of shareholder approval.
Post-employment - 3 months restraint provisions.
Redundancy: 6 months’ pay in circumstance where employment is terminated due to redundancy.
Name: Darren Dunkley
Title: Chief Financial Officer
Terms of Agreement: No fixed term – subject to termination provisions detailed below
Details: Annual remuneration includes cash salary, superannuation and non-cash benefits
Incentives – eligible to participate in short-term incentive and equity remuneration
plans
Termination: Termination – 6 months written notice (except in certain circumstances, such as
where committed any breach or material neglect of the material terms of his
contract of employment, or any act of serious or wilful misconduct) by Company
or employee.
All payments on termination will be subject to the termination benefits cap under
the Corporations Act 2001 in the absence of shareholder approval.
Post-employment - 3 months restraint provisions.
Redundancy: 6 months’ pay in circumstance where employment is terminated due to redundancy.
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Details of Remuneration

The table below provides remuneration prepared for on a statutory basis for directors and Executive KMPs year ended 30 June 2022 (except as noted below)

==> picture [481 x 501] intentionally omitted <==

----- Start of picture text -----

Fixed Remuneration Variable
Remuneration
Name Year Cash, Super- Other Short-term Fair value Total Total Percentage
salary annuation long-term incentive of LTI performance performance
and fees [3] benefits award [4] related related
Executive
Directors
Geoff 2022 928,432 23,568 15,505 200,000 63,263 1,230,768 263,263 21.4%
Selig
2021 930,306 21,694 15,505 170,000 58,556 1,196,061 228,556 19.1%
Paul 2022 306,432 23,568 - - - 330,000 - 0.0%
Selig
2021 308,306 21,694 - - - 330,000 - 0.0%
Non-executive
Directors
Gavin 2022 105,000 - - - - 105,000 - 0.0%
Bell
2021 105,000 - - - - 105,000 - 0.0%
Carole 2022 - - - - - 0 - 0.0%
Campbell [1]
2021 38,479 3,656 - - - 42,135 - 0.0%
Sandra 2022 95,455 9,546 - - - 105,000 - 0.0%
Hook
2021 95,890 9,110 - - - 105,000 - 0.0%
James 2022 95,455 9,546 - - - 105,000 - 0.0%
Todd
2021 95,890 9,118 - - - 105,008 - 0.0%
Cathy 2022 95,455 9,546 - - - 105,000 - 0.0%
Aston [2]
2021 51,989 4,939 - - - 56,928 - 0.0%
Andrew
2022 23,864 2,386 - - - 26,250 - 0.0%
Bird [3]
2021 - - - - - - - 0.0%
Other
Executive KMP
Matt
2022 617,242 23,568 10,273 300,000 63,263 1,014,346 363,263 35.8%
Aitken
2021 618,306 21,694 10,273 270,000 60,041 980,314 330,041 33.7%
Darren
2022 426,915 23,568 8,244 180,000 45,367 684,094 225,367 32.9%
Dunkley
2021 403,131 21,694 6,638 162,000 45,155 638,618 207,155 32.4%
----- End of picture text -----

1 Carole Campbell resigned effective 25 November 2020.

2 Cathy Aston was appointed as a director on 15 December 2020.

3 Andrew Bird was appointed as a director on 1 April 2022.

4 Cash, salary and fees includes annual leave and long service leave.

5 Fair value of LTI reflects accounting impacts during period, NIL shares actually vested/paid.

6 Matt Aitken and Darren Dunkley each received 500 shares (fair value $810) on 23 September 2021 for NIL consideration as part of a rewards scheme offered to all IVE Group employees, other than executive directors.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Rights granted to Executive KMP

FY22

==> picture [484 x 555] intentionally omitted <==

----- Start of picture text -----

KMP Number of Vesting Grant date Fair value at Expiry date
rights granted conditions grant date
in FY22
Geoff 168,067 Relative TSR 10 December $200,000 After vesting
Selig and Compound 2021 following
annual EPS release of FY24
growth over financial results.
3 years Any unvested
Rights expire
Matt 168,067 Relative TSR 10 December $200,000 After vesting
Aitken and Compound 2021 following
annual EPS release of FY24
growth over financial results
3 years Any unvested
Rights expire
Darren 126,050 Relative TSR 10 December $150,000 After vesting
Dunkley and Compound 2021 following
annual EPS release of FY24
growth over financial results
3 years Any unvested
Rights expire
FY21
KMP Number of Vesting Grant date Fair value at Expiry date
rights granted conditions grant date
in FY21
Geoff 384,615 Relative TSR 25 November $200,000 After vesting
Selig and Compound 2020 following
annual EPS release of FY23
growth over financial results
3 years Any unvested
Rights expire
Matt 384,615 Relative TSR 25 November $200,000 After vesting
Aitken and Compound 2020 following
annual EPS release of FY23
growth over financial results
3 years Any unvested
Rights expire
Darren 288,261 Relative TSR 25 November $150,000 After vesting
Dunkley and Compound 2020 following
annual EPS release of FY23
growth over financial results
3 years Any unvested
Rights expire
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

FY20

==> picture [484 x 281] intentionally omitted <==

----- Start of picture text -----

KMP Number of Vesting Grant date Fair value at Expiry date
rights granted conditions grant date
in FY20
Geoff 147,058 Relative TSR 27 November $200,000 After vesting
Selig and Compound 2019 following
annual EPS release of FY22
growth over financial results
3 years Any unvested
Rights expire
Matt 147,058 Relative TSR 27 November $200,000 After vesting
Aitken and Compound 2019 following
annual EPS release of FY22
growth over financial results
3 years Any unvested
Rights expire
Darren 110,294 Relative TSR 27 November $150,000 After vesting
Dunkley and Compound 2019 following
annual EPS release of FY22
growth over financial results
3 years Any unvested
Rights expire
----- End of picture text -----

FY19

Performance rights granted to KMP under the FY19 LTI vested during FY22. Of these, nil performance rights vested and 359,475 unvested performance rights lapsed in accordance with the IVE Group Equity Incentive Plan rules.

==> picture [484 x 278] intentionally omitted <==

----- Start of picture text -----

KMP Number Vesting Grant date Fair value Expiry date Lapse
of rights conditions at grant
granted in date
FY19
Geoff 130,718 Relative TSR 21 November $200,000 130,718 60,810
Selig and Compound 2018 unvested unvested
annual EPS performance performance
growth over rights are rights lapsed
3 years expected to
lapse.
Matt 130,718 Relative TSR 21 November $200,000 130,718 50,675
Aitken and Compound 2018 unvested unvested
annual EPS performance performance
growth over rights are rights lapsed
3 years expected to
lapse
Darren 98,039 Relative TSR 21 November $150,000 98,039 98,039
Dunkley and Compound 2018 unvested unvested
annual EPS performance performance
growth over rights are rights are
3 years expected to expected to
lapse lapse
----- End of picture text -----

In total there were 1,924,085 unvested Rights at 30 June 2022 relating to KMP.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Director and Executive KMP Shareholding

The table below provides the number of shares in IVE Group Limited held by each Director and Executive KMP during the period, including their related parties:

==> picture [483 x 373] intentionally omitted <==

----- Start of picture text -----

Balance at Shares Shares Shares Balance at
30 June 2021 received acquired disposed 30 June 2021
during the
period on
exercise of
Performance
Share Rights
Executive Directors
- - -
Geoff Selig, 12,867,263 12,867,263
Executive
Chairman [1]
- - -
Paul Selig [1] 12,910,231 12,910,231
Non-Executive Directors
Gavin Bell 122,697 - - - 122,697
Sandra Hook 12,919 - - - 12,919
James Todd 122,336 - - - 122,336
- - -
Cathy Aston 5,000 5,000
Andrew Bird [2] 379,701 - - - 379,701
Executive KMP
Darren Dunkley, 52,270 - 500 25,000 27,770
CFO and
Company
Secretary
Matt Aitken, Chief 7,032 - 500 - 7,532
Executive Officer
----- End of picture text -----

1 Geoff Selig and Paul Selig are each beneficiaries of the Selig Family Trust No. 5, the trustee of which holds 12,860,231 shares.

2 Andrew Bird was appointed as a Director of the Company on 1 April 2022. Holdings under ‘Balance at 30 June 2021’ are the holdings as at the date of appointment as set out in the Initial Director’s Interest Notice lodged with ASX on 1 April 2022.

3 Matt Aitken and Darren Dunkley each received 500 shares on 23 September 2021 for NIL consideration as part of a rewards scheme offered to all IVE Group employees, other than executive directors.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Loans to directors and executives

No loans were made to directors and executives of IVE Group including their close family and entities related to them during the year.

Shares under option

There were no unissued ordinary shares of IVE Group under option outstanding at the date of this report.

Shares under performance rights

There were no unissued ordinary shares of IVE Group under Rights outstanding at the date of this report.

Shares issued on the exercise of options

There were no ordinary shares of IVE Group Limited issued on the exercise of options during the year ended 30 June 2022 and up to the date of this report.

Shares issued on the exercise of Performance Share Rights

Nil rights vested during the year and nil shares were issued on exercise of Rights during the year.

This concludes the remuneration report, which has been audited.

IVE Group Limited Annual Financial Report 2022

DIRECTORS’ REPORT (CONT.)

For the year ended 30 June 2022

Non-audit services

During the year, KPMG, the Group’s auditor has performed certain other services in addition to its statutory duties. The Board has considered the non-audit services provided during the year by the auditor, and, in accordance with the advice received from the Audit Committee, is satisfied that:

the non-audit services provided during the financial year by KPMG as the external auditor were compatible with the general standard of independence for auditors imposed by the Act; and
any non-audit services provided during the financial year by KPMG as the external auditor did not compromise the auditor independence requirements of the Corporations Act 2001 (Cth) for the following reasons:
a) all non-audit services are subject to corporate governance procedures adopted by the Group and have been reviewed by those charged with governance throughout the year to ensure they do not impact the integrity and objectivity of the auditor; and
b) the nature of the services provided do not undermine the general principles relating to audit independence in accordance with APES 110: Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Group, acting as an advocate to the Group or jointly sharing the risks and rewards.”Details of the amounts paid to the auditor of the Group, KPMG, for audit and non-audit services provided during the year are set out in Note 31 of the Financial Report.

Lead auditor’s independence declaration

The Lead auditor’s independence declaration is set out on page 50 and forms part of the directors’ report for the financial year ended 30 June 2022.

Rounding off

The Group is of a kind referred to in ASIC Corporations Instrument 2016/191 dated 24 March 2016 and in accordance with that Instrument, amounts in the consolidated financial statements and 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:

==> picture [115 x 52] intentionally omitted <==

Geoff Selig Director

Dated at Sydney this 25th day of August 2022

IVE Group Limited Annual Financial Report 2022

==> picture [90 x 67] intentionally omitted <==

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

To the Directors of IVE Group Limited

I declare that, to the best of my knowledge and belief, in relation to the audit of IVE Group Limited for the financial year ended 30 June 2022 there have been:

i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
ii. no contraventions of any applicable code of professional conduct in relation to the audit

==> picture [80 x 37] intentionally omitted <==

==> picture [109 x 42] intentionally omitted <==

KPMG

Daniel Camilleri Partner

Sydney

25 August 2022

KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a scheme approved under Professional Standards Legislation.

IVE Group Limited Annual Financial Report 2022

FINANCIAL REPORT

Consolidated Financial Statements

Consolidated statement of profit or loss and other comprehensive income .....................................................52 Consolidated statement of financial position....................................................................................................................53 Consolidated statement of changes in equity....................................................................................................................54 Consolidated statement of cash flows ..................................................................................................................................55 Notes to the Consolidated Financial Statements

1.	Reporting entity ..........................................................................................................................................................................56
2.	Basis of preparation .................................................................................................................................................................56
3.	Significant accounting policies ...........................................................................................................................................57
4.	Revenue ............................................................................................................................................................................................70
5.	Other income ................................................................................................................................................................................70
6.	Personnel expenses ....................................................................................................................................................................70
7.	Expenses ..........................................................................................................................................................................................71
8.	Net finance costs .........................................................................................................................................................................71
9.	Taxes ..................................................................................................................................................................................................71
10.	Cash and cash equivalents ..................................................................................................................................................74
11.	Trade and other receivables .................................................................................................................................................75
12.	Inventories ......................................................................................................................................................................................75
13.	Property, plant and equipment ..........................................................................................................................................76
14.	Leases...............................................................................................................................................................................................77
15.	Intangible assets and goodwill ..........................................................................................................................................79
16.	Other assets ..................................................................................................................................................................................80
17.	Trade and other payables.....................................................................................................................................................80
18.	Loans and borrowings ..............................................................................................................................................................81
19.	Employee benefits ......................................................................................................................................................................81
20.	Provisions ........................................................................................................................................................................................82
21.	Other liabilities ...........................................................................................................................................................................82
22.	Share-based payments ..........................................................................................................................................................83
23.	Capital and reserves ................................................................................................................................................................84
24.	Earnings per share .....................................................................................................................................................................85
25.	Acquisitions ...................................................................................................................................................................................86
26.	Operating segments .................................................................................................................................................................87
27.	Financial risk management and financial instruments ........................................................................................87
28.	Capital commitments ..............................................................................................................................................................94
29.	Related parties............................................................................................................................................................................94
30.	Group entities ...............................................................................................................................................................................95
31.	Parent entity disclosure ..........................................................................................................................................................96
32.	Subsequent events .....................................................................................................................................................................96
33.	Auditor’s remuneration ............................................................................................................................................................97
34.	Deed of cross guarantee .........................................................................................................................................................97
35.	Discontinued operations .......................................................................................................................................................100
Directors’ declaration ...................................................................................................................................................................102
Independent audit report to the members of IVE Group Limited .............................................................................103

IVE Group Limited Annual Financial Report 2022

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 30 June 2022

==> picture [486 x 616] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Note 2022 2021
Restated
Continuing operations
Revenue 4 758,976 656,457
Cost of sales (405,276) (340,465)
Gross profit 353,700 315,992
Other income 5 3,014 724
Production expenses (172,293) (147,224)
Administrative expenses (127,732) (115,602)
Other expenses (8,177) (5,432)
Results from operating activities 48,512 48,458
Finance income 56 517
Finance costs (9,218) (12,644)
Net finance costs 8 (9,162) (12,127)
Profit before tax 39,350 36,331
Income tax expense 9 (12,418) (12,076)
Profit from continuing operations 26,932 24,255
Discontinued operation
Profit from discontinued operation, net of tax 35 - 4,805
Profit for the year 26,932 29,060
Other comprehensive income
Items that are or may be reclassified to profit or loss
Cash flow hedges – effective portion of changes in 26 (361)
fair value (net of tax)
Cash flow hedges – reclassified to profit or loss 317 493
(net of tax)
Net exchange differences on translation of foreign 134 -
operations
Total other comprehensive income 477 132
Total comprehensive income for the year 27,409 29,192
Profit attributable to:
Owners of the Company 26,932 29,060
Profit for the year 26,932 29,060
Total comprehensive income attributable to:
Owners of the Company 27,409 29,192
Total comprehensive income for the year 27,409 29,192
Earnings per share
Basic earnings per share (dollars) 24 0.19 0.20
Diluted earnings per share (dollars) 24 0.19 0.20
Basic earnings per share (dollars) – 24 0.19 0.17
continuing operations
Diluted earnings per share (dollars) – 24 0.19 0.17
continuing operations
----- End of picture text -----*

*Refer to Note 3(s) for restatement.

The notes on pages 56 to 101 are an integral part of these consolidated financial statements.

IVE Group Limited Annual Financial Report 2022

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2022

==> picture [486 x 611] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Note 2022 2021
Restated
Assets
Cash and cash equivalents 10 67,035 106,474
Trade and other receivables 11 113,781 100,408
Inventories 12 74,164 43,844
Prepayments 5,489 4,174
Financial asset - 1,762
Other current assets 16 4,638 1,703
Total current assets 265,107 258,365
Deferred tax assets 9 17,151 15,233
Trade and other receivables 11 307 -
Property, plant and equipment 13 100,088 100,122
Right of use assets 14 105,917 96,228
Intangible assets and goodwill 15 133,293 130,178
Other non-current assets 16 2,554 -
Total non-current assets 359,310 341,761
Total assets 624,417 600,126
Liabilities
Trade and other payables 17 124,373 91,719
Lease liabilities 32,367 27,937
Loans and borrowings 18 3,764 2,791
Employee benefits 19 24,411 18,850
Current tax payable 5,730 3,283
Other current liabilities 21 15,349 8,485
Total current liabilities 205,994 153,065
Loans and borrowings 18 130,201 167,044
Lease liabilities 92,349 91,823
Employee benefits 19 6,714 6,568
Provisions 20 5,376 4,745
Other non-current liabilities 21 1,211 854
Total non-current liabilities 235,851 271,034
Total liabilities 441,845 424,099
Net assets 182,572 176,027
Equity
Share capital 23 148,878 149,066
Reserves 23 1,807 (185)
Retained earnings 31,887 27,146
Total equity 182,572 176,027
----- End of picture text -----*

*Refer to Note 3(s) for restatement.

The notes on pages 56 to 101 are an integral part of these consolidated financial statements.

IVE Group Limited Annual Financial Report 2022

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 30 June 2022

==> picture [485 x 592] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Note Share Share- Reserves Retained Total
capital based earnings equity
payment
reserve
Balance reported at 1 July 2020 156,502 198 (780) 8,582 164,502
- - -
Opening restatement (214) (214)
Balance at 1 July 2020 (restated) 156,502 198 (780) 8,368 164,288
Total comprehensive income for the year
- - -
Profit for the year (restated) 29,060 29,060
Other comprehensive income - - 132 - 132
Total comprehensive income for the year - - 132 29,060 29,192
Transactions with owners of
the Company
Performance share rights 22 - 265 - - 265
Share buy back 23 (7,436) - - - (7,436)
Dividends to owners of the Company 23 - - - (10,282) (10,282)
Total transactions with owners of (7,436) 265 - (10,282) (17,453)
the Company
Balance at 30 June 2021 (restated) 149,066 463 (648) 27,146 176,027
Balance reported at 1 July 2021 149,066 463 (648) 27,146 176,027
(restated)
Total comprehensive income for
the year
- - -
Profit for the year 26,932 26,932
Other comprehensive income - - 477 - 477
Total comprehensive income for - - 477 26,932 27,409
the year
Transactions with owners of the
Company
Performance share rights 22 - 297 - - 297
Employee share issue 22 - 1,218 - - 1,218
Share buy back 23 (188) - - (188)
Dividends to owners of the Company 23 - - - (22,191) (22,191)
Total transactions with owners of -
(188) 1,515 (22,191) (20,864)
the Company
Balance at 30 June 2022 148,878 1,978 (171) 31,887 182,572
----- End of picture text -----

*Refer to Note 3(s) for restatement.

The notes on pages 56 to 101 are an integral part of these consolidated financial statements.

IVE Group Limited Annual Financial Report 2022

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 30 June 2022

==> picture [486 x 552] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Note 2022 2021
Restated
Cash flows from operating activities
Cash receipts from customers 825,845 728,932
Cash paid to suppliers and employees (734,495) (619,462)
Cash generated from operating activities 91,350 109,470
Interest received 56 202
Interest paid (3,215) (8,878)
Income tax paid (11,821) (12,064)
-
JobKeeper Payment received 21,521
Payment of acquisition costs (416) (403)
Payment of restructure costs (4,278) (3,683)
Net cash from operating activities 10 71,676 106,165
Cash flows from investing activities
Proceeds from sale of property, plant and 263 651
equipment
Acquisition of property, plant and equipment
(15,743) (9,082)
and intangible assets
Acquisitions of businesses (net of cash and 25 (4,960) (1,855)
transactions costs)
Net proceeds on disposal of business 35 - 15,165
(net of cash and transactions costs)
Acquisition of financial asset (including -
(5,354)
transactions costs)
Net cash used in investing activities (20,440) (475)
Cash flows from financing activities
Proceeds from bank loans 15,000 -
Repayment of loans and borrowings (53,336) (3,234)
-
Transaction costs on refinancing bank loans (820)
Dividends paid (22,191) (10,282)
Payment of lease liabilities (29,081) (29,904)
Share buy back (net of transaction costs) (188) (7,436)
Net cash used in financing activities (90,616) (50,856)
Net (decrease)/increase in cash and cash
(39,380) 54,834
equivalents
Effects of foreign currency translation (59) -
Cash and cash equivalents at beginning of year 106,474 51,640
Cash and cash equivalents at end of year 67,035 106,474
----- End of picture text -----*

*Refer to Note 3(s) for restatement.

The notes on pages 56 to 101 are an integral part of these consolidated financial statements.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 30 June 2022

1. Reporting entity

IVE Group Limited (the ultimate parent entity or the Company) is a company domiciled in Australia. Its registered address is Level 3, 35 Clarence Street, Sydney NSW 2000.

This consolidated financial report as at and for the year ended 30 June 2022 comprises the Company and its subsidiaries (IVE or Group).

The Group is a for-profit entity. The Group is primary involved in:

Conceptual and creative design across print, mobile and interactive media;
Printing and distribution of catalogues, magazines, marketing and corporate communications materials and stationery;
Manufacturing of point of sale display material and large format banners for retail applications;
Personalised communications including marketing automation, marketing mail, publication mail, eCommunications, and multi-channel solutions;
Data analytics, customer experience strategy, and CRM; and
Outsourced communications solutions for large organisations including development of customised multi-channel management models covering creative and digital services, supply chain optimisation, inventory management, warehousing and logistics.

2. Basis of preparation

(a) Statement of compliance

The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with International Financial Reporting Standards (IFRSs) adopted by the International Accounting Standards Board (IASB).

The consolidated financial statements were authorised for issue by the Board of Directors on 25 August 2022. Details of the Group’s accounting policies is included in Note 3.

(b) Functional and presentation currency

These consolidated financial statements are presented in Australian dollars, which is the Company’s functional currency.

The Company is of a kind referred to in ASIC Corporations Instrument 2016/191 dated 24 March 2016, and in accordance with that Instrument, all financial information presented in Australian dollars has been rounded to the nearest thousand unless otherwise stated. Where applicable certain comparative figures have been reclassified to align with current period presentation.

(c) Use of estimates and judgements

In preparing these consolidated financial statements, management has made judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates.

The significant judgements made by management in applying the Group's accounting policies and the key sources of estimation uncertainty were the same as those that applied to the consolidated financial statements for the year ended 30 June 2021.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

2. Basis of preparation (cont.)

(c) Use of estimates and judgements (cont.)

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised prospectively.

(i) Judgements

Information about judgements made in applying the Group’s accounting policies that have the most significant effects on the amounts recognised in the consolidated financial statements is included in the following notes:

Note 3(e) & (f) – estimation of useful lives of assets
Note 3(j) – provisions
Note 27 – Level 2 and 3 fair values of equity securities, and forward exchange contracts; and
Note 14 – lease term: whether the Group is reasonably certain to exercise extension options.

(ii) Assumptions and estimation uncertainties

Information about assumptions and estimation uncertainties that have a significant risk of resulting in a material adjustment in the year ending 30 June 2022 is included in the following notes:

Note 3(h)(ii) & 15 – impairment testing for cash generating units containing goodwill
Note 25 – acquisitions: fair value measured on a provisional basis; and
Note 27 – measurement of Expected Credit Loss (ECL) allowance on trade receivables.

Measurement of fair values

When measuring the fair value of an asset or a liability, the Group uses market observable data if possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in the valuation techniques as follows:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (ie. as prices) or indirectly (ie. derived from prices).
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

3. Significant accounting policies

The accounting policies set out below have been applied consistently during the period presented in these consolidated financial statements, and have been applied consistently by all entities in the Group, except for the adoption of new accounting standards (see Note 3(s)).

(a) Basis of consolidation

(i) Business combinations

The Group accounts for business combinations using the acquisition method when control is transferred to the Group. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except those related to the issue of debt or equity securities.

The consideration transferred does not include amounts related to the settlement of pre-exiting relationships. Such amounts are generally recognised in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition, with subsequent changes in the fair value of the contingent consideration recognised in profit or loss.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(a) Business consolidations (cont.)

(ii) Subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

(iii) Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses arising from intragroup transactions, are eliminated in preparing the consolidated financial statements.

(b) Foreign currency

Foreign currency transactions

Transactions in foreign currencies are translated to the functional currency of the Group (Australian dollars) at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated to the functional currency at the exchange rate at the reporting date.

Foreign currency differences arising on retranslation are recognised in profit or loss.

(c) Financial instruments

(i) Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument.

A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus, for an item not at fair value through profit and loss (FVTPL), transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

(ii) Classification and subsequent measurement

The Group classifies its financial instruments in the following measurement categories: at amortised cost, at fair value through profit and loss (FVTPL) and at fair value through other comprehensive income (FVOCI).

Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL:

It is held within a business model whose objective is to hold assets to collect contractual cash flows; and
Its contractual terms give rise on a specified dates to cash flow that are solely payments of principal and interest on the principal amount outstanding.

A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL:

It is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
Its contractual terms give rise on specified dates to cash flow that are solely payments of principal and interest on the principal amount outstanding.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(c) Financial instruments (cont.)

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis.

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financial assets. On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise.

Financial assets at amortised costs

These assets are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Financial liabilities – Classification, subsequent measurement and gains and losses

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in profit and loss. Other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

(iii) Derecognition

Financial assets

The Group derecognises a financial asset when the contractual rights to the cash flows from the financial asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of ownership of the financial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognised in its statement of financial position but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.

Financial liabilities

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

(iv) Offsetting

Financial asset and financial liabilities are offset and the net amount presented in the statement of financial position when, and only when the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(c) Financial instruments (cont.)

(v) Derivative financial instruments and hedge accounting

Derivative financial instruments and hedge accounting

The Group holds derivative financial instruments to hedge its foreign currency and interest rate risk exposures. Embedded derivatives are separated from the host contract and accounted for separately if the host contract is not a financial asset and certain criteria are met.

Derivatives are initially measured at fair value. Subsequent to initial recognition, derivatives are measured at fair value, and changes therein are generally recognised in profit or loss.

The Group designates certain derivatives as hedging instruments to hedge the variability in cash flows associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates.

At inception of designated hedging relationships, the Group documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedging instrument, including whether the changes in cash flows of the hedged item and hedging instrument are expected to offset each other.

Cash flow hedges

When a derivative is designated as a cash flow hedging instrument, the effective portion of changes in the fair value of the derivative is recognised in OCI and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognised in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis, from inception of the hedge. Any ineffective portion of changes in the fair value of the derivative is recognised immediately in profit or loss.

The Group designates only the change in fair value of the spot element of forward exchange contracts as the hedging instrument in cash flow hedging relationships. The change in fair value of the forward element of forward exchange contracts (‘forward points’) is separately accounted for as a cost of hedging and recognised in a cost of hedging reserve within equity.

When the hedged forecast transaction subsequently results in the recognition of a non-financial item such as inventory, the amount accumulated in the hedging reserve and the cost of hedging reserve is included directly in the initial cost of the non-financial item when it is recognised.

For all other hedged forecast transactions, the amount accumulated in the hedging reserve and the cost of hedging reserve is reclassified to profit or loss in the same period or periods during which the hedged expected future cash flows affect profit or loss.

If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is terminated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in the hedging reserve remains in equity until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-financial item’s cost on its initial recognition or, for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss.

If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedging reserve and the cost of hedging reserve are immediately reclassified to profit or loss.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(d) Share capital

Ordinary shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

(e) Property, plant and equipment

(i) Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.

Cost includes expenditure that is directly attributable to the acquisition of the asset. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When 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.

Any gains and losses on disposal of an item of property, plant and equipment (calculated as the difference between the net proceeds from disposal and the carrying amount of the item) are recognised in profit or loss.

(ii) Subsequent costs

Subsequent expenditure is capitalised only when it is probable that the future economic benefits associated with the expenditure will flow to the Group. Ongoing repairs and maintenance are expensed as incurred.

(iii) Depreciation

Items of property, plant and equipment are depreciated from the date that they are installed and are ready for use, or in respect of internally constructed assets, from the date that the asset is completed and ready for use.

Depreciation is calculated to write off the cost of property, plant and equipment less their estimated residual values using the straight-line basis over their estimated useful lives. Depreciation is generally recognised in profit or loss, unless the amount is included in the carrying amount of another asset. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term.

The estimated useful lives for the current year of significant items of property, plant and equipment are as follows:

•	leasehold improvements	shorter of lease term and life of asset
•	plant and equipment	3–20 years
•	fixtures and fittings	5–10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(f) Intangible assets and goodwill

(i) Goodwill

Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(f) Intangible assets and goodwill (cont.)

(ii) Other intangible assets

Intangible assets that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and accumulated impairment losses.

(iii) Subsequent expenditure

Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

(iv) Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognised in profit or loss. Goodwill is not amortised.

The estimated useful lives are as follows:

computer software 3–4 years
• customer relationships 5–9 years

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

(g) Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the first-in, first-out principle. In the case of manufactured inventories and work in progress, cost includes an appropriate share of production overheads based on normal operating capacity.

(h) Impairment

(i) Non-derivative financial assets

The Group recognises loss allowances for expected credit loss (ECL) on financial assets measured at amortised costs.

The Group measures loss allowance at an amount equal to lifetime ECL.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment including forward-looking information.

The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 90 days past due.

The Group considers a financial asset to be in default when the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held).

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument.

The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(h) Impairment (cont.)

(i) Non-derivative financial assets (cont.)

Measurement of ECLs

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present values of all cash shortfalls (ie. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive).

ECLs are discounted at the effective interest rate of the financial asset.

Credit-impaired financial assets

At each reporting date, the Group assesses whether financial assets carried at amortised cost are creditimpaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial assets have occurred.

Evidence that a financial asset is credit-impaired includes the following observable data:

A breach of contract such as a default or being more than 90 days past due;
It is probable that the debtor will enter bankruptcy or other financial reorganisation.

Presentation of allowance for ECL in the statement of financial position

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets.

Write-off

The gross carrying amount of a financial asset is written off when the Group has no reasonable expectation of recovering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment with respect to the timing and amount of write-off based on whether there is a reasonable expectation of recovery. The Group expects no significant recovery from the amount written off. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

(ii) Non-financial assets

The carrying amounts of the Group’s non-financial assets, other than inventories and deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.

For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or cashgenerating unit (CGU). Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination.

The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present value using a post-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its estimated recoverable amount.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(h) Impairment (cont.)

(ii) Non-financial assets (cont.)

Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the CGU (group of CGUs), and then to reduce the carrying amounts of the other assets in the CGU (group of CGUs) on a pro rata basis.

An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

(i) Employee benefits

(i) Defined contribution plans

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

(ii) Other long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss in the period in which they arise.

(iii) Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

(iv) Share-based payment transactions

The grant-date fair value of equity-settled share-based payment awards granted to employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with market and nonvesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

(j) Provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, 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 the risks specific to the liability. The unwinding of the discount is recognised as finance cost.

(i) Restructuring

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. Future operating losses are not provided for.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(j) Provisions (cont.)

(i) Restructuring (cont.)

Make good provision

A make good provision is recognised when the Group enters into a lease contract that requires the property to be returned to the lessor in its original condition. The provision is based on the expected future cost of the refurbishment discounted to reflect current market assessments.

(k) Revenue from contracts with customers

Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue over-time, or at a point in time.

Recognising of revenue over-time

Revenue is recognised on the rendering of these services relating to print management, communications, creative and digital services, supply chain optimisation, inventory management, warehousing and logistics in proportion to the stage of completion of the transaction at the reporting date. The stage of completion is assessed based on surveys of work performed.

Recognising of revenue at a point in time

The Group recognises revenue relating to print production and distribution when it transfers control over a good or service to a customer. Customers obtain control when the goods are delivered to and have been accepted. Invoices are generated at that point in time. Invoices are usually payable within 30 days.

(l) Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contracts conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

(i) As a lessee

At commencement or on modification of a contract that contains a lease component, the Group allocates the consideration in the contracts to each lease component on the basis of its relative stand-alone prices.

The Group recognises a right-of-use asset and lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case, the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(l) Leases (cont.)

(i) As a lessee (cont.)

The Group determines its incremental borrowing rate by obtaining interest rates for classes of leased assets and lease terms from external financing sources.

Lease payments included in the measurement of the lease liability comprise the following:

fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date;
amounts expected to be payable under a residual value guarantee; and
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.

The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group’s changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment.

When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

Short-term leases and leases of low-value assets

The Group has elected to not recognise right-of-use assets and liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises lease payments associated with these leases as an expense on a straight-line basis over the lease term.

(ii) As a lessor

At inception or on modification of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of their relative stand-alone prices.

When the Group acts as a lessor, it determines at lease inception whether such lease is a finance lease or an operating lease.

To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.

When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sub-lease separately. It assesses the lease classification of a sub-lease with reference to the right-of-use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short-term lease to which the Group applies the exemption described above, then it classifies the sub-lease as an operating lease.

If an arrangement contains lease and non-lease components, then the Group applies AASB 15 to allocate the consideration in the contract.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(m) Finance income and finance costs

Finance income comprises net gain on financial assets at FVTPL and interest income on funds invested. Interest income is recognised as it accrues in profit or loss, using the effective interest method.

Finance costs comprise net loss on financial assets at FVTPL, and interest expense on borrowings. Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in profit or loss using the effective interest method.

Foreign currency gains and losses are reported on a net basis as either finance income or finance cost depending on whether foreign currency movements are in a net gain or net loss position.

(n) Government grants

The Group recognised a conditional government grant relating to the JobKeeper Payment scheme in the consolidated statement of profit or loss as a credit to wages and salaries when the grant become a receivable.

(o) Income tax

Income Tax expense comprises current and deferred tax. Current and deferred tax are recognised in profit or loss except to the extent that it relates to items recognised directly in equity or in other comprehensive income.

(i) Current tax

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

(ii) Deferred tax

Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for:

temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss; or
temporary differences related to investments in associates to the extent that the Company is able to control the timing of the reversal of the temporary differences and it is probable that they will not reverse in the foreseeable future, and
taxable temporary differences arising on the initial recognition of goodwill.

The measurement of deferred tax reflects the tax consequences that would follow the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(o) Income tax (cont.)

(iii) Tax exposures

In determining the amount of current and deferred tax the Group takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact tax expense in the period that such a determination is made.

(iv) Tax consolidation

IVE Group Limited and its wholly owned Australian controlled entities formed a tax consolidated group on 16 December 2015. As a consequence, these entities are taxed as a single entity and the deferred tax asset and liabilities of these entities are offset in the consolidated financial statements.

(p) Good and services tax (GST)

Revenue, expenses and assets are recognised net of the amount of GST, 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 an item of expense. Receivables and payables are shown inclusive of GST.

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

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(q) Earnings per share

The Group presents basic and diluted earnings per share data for its ordinary shares. Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the year, adjusted for own shares held. Diluted earnings per share is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible notes and share options granted to employees.

(r) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. It has been determined the Board of Directors is the chief operating decision maker, as they are ultimately responsible for allocating resources and assessing performance.

(s) Adoption of new accounting standards and interpretations

The Group has adopted all new and amended Australian Accounting Standards and Australian Accounting Standards Board (AASB) interpretations that are mandatory for the current reporting period and relevant to the Group. With the exception of the IFRIC decision on Configuration or Customisation Costs in a Cloud Computing Arrangement (see below) adoption of these standards and interpretations has not resulted in any material changes to the Group’s year-end financial report.

Configuration or Customisation Costs in a Cloud Computing Arrangement

In April 2021, the International Financial Reporting Standards Interpretations Committee (IFRIC) issued a final agenda decision, ‘Configuration or Customisation costs in a Cloud Computing Arrangement’. The decision discusses whether configuration or customisation expenditure relating to cloud computing arrangements is able to be recognised as an intangible asset and if not, over what time period the expenditure is expensed.

The Group's accounting policy has historically been to capitalise all costs related to cloud computing arrangements as intangible assets in the Statement of Financial Position. The adoption of this agenda decision has resulted in the recognition of these intangible assets as an expense for year ended 30 June 2022 of $1,701 thousand (for the year ended 30 June 2021 of $421 thousand, net of tax), and an adjustment to opening retained earnings of $214 thousand as at 1 July 2020.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

3. Significant accounting policies (cont.)

(s) Adoption of new accounting standards and interpretations (cont.)

The following tables presents the impact of the 1 July 2021 restatement on the comparative information presented in for the prior year ending 30 June 2021.

==> picture [487 x 441] intentionally omitted <==

----- Start of picture text -----

Consolidated Statement of As previously Cloud As restated
Financial Position reported computing
as at 30 June 2021 adjustment
Intangible assets 131,085 (907) 130,178
Deferred tax assets 14,961 272 15,233
Other net assets 30,616 - 30,616
Net asset 176,662 (635) 176,027
-
Share capital 149,066 149,066
Reserves (185) - (185)
Retained earnings 27,781 (635) 27,146
Total equity 176,662 (635) 176,027
Consolidated Statement of As previously Cloud As restated
Financial Position reported computing
as at 30 June 2021 adjustment
Other expenses (4,831) (601) (5,432)
Results from operating activities 49,059 (601) 48,458
Profit before tax 36,932 (601) 36,331
Income tax expense (12,256) 180 (12,076)
Profit from continuing operations 24,676 (421) 24,255
Profit for the year 29,481 (421) 29,060
Total comprehensive income for the year 29,613 (421) 29,192
Earnings per share
Basic earnings per share (dollars) 0.20 - 0.20
Diluted earnings per share (dollars) 0.20 - 0.20
Basic earnings per share (dollars) – 0.17 - 0.17
continuing operations
Diluted earnings per share (dollars) – 0.17 - 0.17
continuing operations
----- End of picture text -----

The impact on 1 July 2020 intangible assets was a decrease of $306 thousand, deferred tax was increased by $92 thousand with the net impact being a reduction on 1 July 2020 retained earnings of $214 thousand.

(t) New standards and interpretations not yet adopted

There are no new or amended standards and interpretations that are expected to have a significant impact on the Group’s consolidated financial statements.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

4. Revenue

The Group’s operations and main revenue streams are those described in Note 1. The tables below provide information on the Group’s revenue and contract balances derived from contracts with customers.

(a) Disaggregation of revenue

==> picture [486 x 76] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Products and services transferred at a point in time 707,057 608,816
Services transferred over time 51,919 47,641
758,976 656,457
----- End of picture text -----

(b) Contract balances

==> picture [486 x 87] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Receivables, which are included in
116,742 101,530
‘Trade and other receivables’
Contract assets 3,491 1,056
Contract liabilities 13,888 8,263
----- End of picture text -----

Contract liabilities of $8,263 thousand as at 30 June 2021 has been recognised as revenue in the year ending 30 June 2022. Contract liabilities of $13,888 thousand as at 30 June 2022 will be recognised as revenue during the year ending 30 June 2023.

5. Other income

==> picture [486 x 40] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Other income 3,014 724
----- End of picture text -----

Other income in 2022 mainly relates to a contractual claim recovery (2021: nil)

6. Personnel expenses

==> picture [486 x 95] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Wages and salaries 184,180 153,239
Contributions to defined contribution plans 13,806 12,468
Share-based payment expense 1,540 265
199,526 165,972
----- End of picture text -----

As the JobKeeper Payment scheme has ended, no amount was credited to wages and salaries for the year ending 30 June 2022 (30 June 2021: $16,241 thousand). Refer Note 3(n).

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

7. Expenses

Included in the consolidated statement of profit or loss and other comprehensive income:

==> picture [486 x 132] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Notes 2022 2021
Depreciation and amortisation 41,984 47,271
Acquisition and transaction costs 741 973
Restructuring costs 4,278 3,190
Make good expenses 711 96
Software for service 1,701 421
Loss on disposal of property, plant and equipment 746 439
----- End of picture text -----

8. Net finance costs

==> picture [486 x 188] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Interest income 56 202
Derivative net change in fair value - 315
Finance income 56 517
Interest expense (7,420) (9,508)
Financial assets net change in fair value (1,762) (3,100)
Net foreign exchange losses (24) (36)
-
Derivative net change in fair value (12)
Finance costs (9,218) (12,644)
Net finance costs (9,162) (12,127)
----- End of picture text -----

9. Taxes

==> picture [486 x 162] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2021
2022
Restated
Current tax expense
Current year 14,350 12,110
Changes in estimates related to prior years (82) (173)
14,268 11,937
Deferred tax expense
Origination and reversal of temporary differences (1,850) 139
Total tax expense 12,418 12,076
----- End of picture text -----*

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

9. Taxes (cont.)

Numerical reconciliation between tax expense and pre-tax accounting profit

==> picture [486 x 164] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Restated
Profit (loss) before tax 39,350 36,331
Tax using the Company’s domestic
11,805 10,899
tax rate of 30%
(Non-assessable income)/non-deductible
693 1,198
expenses – (net)
Changes in estimates related to prior years (82) (173)
Other items (net) 2 152
12,418 12,076
----- End of picture text -----*

Recognised deferred tax assets and liabilities

Deferred tax assets and liabilities are attributable to the following:

==> picture [485 x 242] intentionally omitted <==

----- Start of picture text -----

Assets Liabilities Net
In thousands of AUD 2022 2021 2022 2021 2022 2021
- -
Property, plant and equipment (307) (484) (307) (484)
- -
Right-of-use assets (26,895) (23,440) (26,895) (23,440)
Inventories - - (1,723) (1,342) (1,723) (1,342)
- -
Intangible assets (3,593) (4,341) (3,593) (4,341)
Lease liabilities 34,775 32,061 - - 34,775 32,061
- -
Employee benefits 11,056 9,148 11,056 9,148
Provisions 2,881 2,371 - - 2,881 2,371
Other items 957 1,260 - - 957 1,260
Tax assets/(liabilities) 49,669 44,840 (32,518) (29,607) 17,151 15,233
- -
Set off of tax (32,518) (29,607) 32,518 29,607
Net deferred tax assets 17,151 15,233 - - 17,151 15,233
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

9. Taxes (cont.)

Movement in temporary differences during the year

==> picture [486 x 231] intentionally omitted <==

----- Start of picture text -----

2022 Balance Disposal of Acquisition Recognised Recognised Balance
In thousands of AUD 1 July 2021 discontinued through in equity in profit 30 June 2022
operation business or loss
combination
Property, plant (484) - - - 177 (307)
and equipment
- - -
Right-of-use assets (23,440) (3,455) (26,895)
Inventories (1,342) - 61 - (442) (1,723)
- -
Intangible assets (4,341) (780) 1,528 (3,593)
Lease liabilities 32,061 - - - 2,714 34,775
Employee benefits 9,148 - 874 - 1,034 11,056
Provisions 2,371 - 64 - 446 2,882
Other items 1,260 - - (152) (152) 956
15,233 - 220 (152) 1,850 17,151
----- End of picture text -----

==> picture [486 x 231] intentionally omitted <==

----- Start of picture text -----

2021 1 July 2020 Disposal of Acquisition Recognised Recognised Balance
In thousands of AUD Restated discontinued through in equity in profit 30 June 2021
operation business or loss
combination
Property, plant - -
1,353 (2) (1,835) (484)
and equipment
- - -
Right-of-use assets (29,146) 5,706 (23,440)
Inventories (1,510) - - - 168 (1,342)
Intangible assets (5,842) 143 - - 1,358 (4,341)
Lease liabilities 38,442 - - - (6,381) 32,061
Employee benefits 8,040 (211) 112 - 1,207 9,148
Provisions 2,338 - - - 33 2,371
Other items 1,712 - - (57) (395) 1,260
15,387 (70) 112 (57) (139) 15,233
----- End of picture text -----*

Refer to Note 3(s) for further details.

The gross amount of capital losses for which no deferred tax asset is recognised is nil (2021: $2,064 thousand).

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

10. Cash and cash equivalents

==> picture [486 x 87] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Bank balances 67,029 106,468
Petty cash 6 6
Cash and cash equivalents in the
67,035 106,474
statement of cash flows
----- End of picture text -----

Reconciliation of cash flows from operating activities

==> picture [486 x 470] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Restated
Profit (loss) from continuing operations 26,932 24,255
Profit (loss) from discontinued operations - 628
Non-cash items
Depreciation, amortisation and impairment 41,984 47,271
Share based payment expense 1,540 265
Derivative net change in fair value 12 (315)
Interest expense 4,205 630
Financial assets net change in fair value 1,762 3,100
Income tax expense 12,418 12,076
Other income and expenses (net) 264 607
Loss on disposal of property, plant 746 439
and equipment
Cash items
Acquisition in investing activities 325 570
90,188 89,526
Change in trade and other receivables (12,043) 735
Change in inventories (26,871) 12,461
Change in current assets (885) 1,773
Change in prepayment (1,188) (520)
Change in trade and other payables 32,013 13,178
Change in provisions and employee benefits 2,283 1,076
Cash generated from operating activities 83,497 118,229
Income tax paid (11,821) (12,064)
Net cash from operating activities 71,676 106,165
----- End of picture text -----*

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

11. Trade and other receivables

==> picture [486 x 188] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Current
Trade receivables 116,742 101,530
Allowance for impairment (3,124) (2,008)
113,618 99,522
Derivative receivable - 315
Lease and other receivables 163 571
113,781 100,408
Non-current
Lease receivables 307 -
----- End of picture text -----

12. Inventories

==> picture [486 x 133] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Finished goods 6,087 3,368
Work in progress 17,103 13,578
Raw materials 52,982 28,198
76,172 45,144
Allowance for inventory obsolescence (2,008) (1,300)
74,164 43,844
----- End of picture text -----

During the year, raw materials, consumables and changes in finished goods and work in progress recognised as cost of sales amounted to $405,276 thousand (2021: $340,465 thousand).

During 2022 financial year an analysis of aged inventory and previous write-offs was performed which resulted in an increase in provision amounting to $708 thousand (2021: $340 thousand).

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

13. Property, plant and equipment

==> picture [487 x 492] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Leasehold Plant and Capital Land Fixtures Total
improvements equipment work in and and
progress buildings fittings
Cost
-
Balance at 1 July 2020 19,971 147,243 1,404 2,211 170,829
Acquisitions through - - - -
2,000 2,000
business combination
Additions 1,926 3,646 - - 110 5,682
Transfer within PPE - 97 (97) - - -
- - - -
Disposals (920) (920)
Balance at 30 June 2021 21,897 150,066 1,307 2,000 2,321 177,591
Balance at 1 July 2021 21,897 150,066 1,307 2,000 2,321 177,591
Acquisitions through - - - -
2,772 2,772
business combination
Additions 3,255 8,188 486 - 328 12,257
- - -
Disposals (1,246) (319) (1,565)
Balance at 30 June 2022 23,906 160,707 1,793 2,000 2,649 191,055
Depreciation and impairment losses
Balance at 1 July 2020 6,912 55,856 - - 929 63,697
Depreciation for the year 2,027 12,103 - - 144 14,274
- - - -
Disposals (502) (502)
Balance at 30 June 2021 8,939 67,457 - - 1,073 77,469
- -
Balance at 1 July 2021 8,939 67,457 1,073 77,469
Depreciation for the year 1,869 12,092 - 25 142 14,128
- - -
Disposals (497) (133) (630)
Balance at 30 June 2022 10,311 79,416 25 1,215 90,967
Carrying amounts
At 1 July 2021 12,958 82,609 1,307 2,000 1,248 100,122
At 30 June 2022 13,595 81,291 1,793 1,975 1,434 100,088
----- End of picture text -----

Security

At 30 June 2022 the carrying amount of total assets less the written down value of finance leased assets were held as security for bank facilities.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

14. Leases

A. Leases as lessee

The Group leases warehouses and factory facilities. The leases typically run up to a period of 10 years, with an option to renew the lease after that date. Lease payments are renegotiated periodically to reflect market rentals. Some leases provide for additional rent payments that are based on changes in local price indices. These leases were entered into many years ago as combined leases of land and buildings.

The Group also leases production equipment under a number of leases with contract terms of one to five years.

The Group leases IT equipment with contract terms of one to three years. These leases are short-term and/or leases of low-value items. The Group has elected not to recognise right-of-use assets and lease liabilities for these leases.

Information about leases for which the Group is a leasee is presented below.

(i) Right-of-use assets

The carrying amounts of right-of-use assets are as below.

==> picture [486 x 240] intentionally omitted <==

----- Start of picture text -----

Property, plant and equipment
In thousands of AUD Property Production Total
equipment
Balance as at 1 July 2020 91,882 23,666 115,548
Depreciation charge for the year (18,513) (7,448) (25,961)
Additions/modifications to right-of-use assets 3,370 3,464 6,834
-
Disposals of right-of–use assets (193) (193)
Balance as at 30 June 2021 76,546 19,682 96,228
Balance as at 1 July 2021 76,546 19,682 96,228
Depreciation charge for the year (18,002) (3,417) (21,419)
Acquisitions through business combination 596 - 596
Additions/modifications to right-of-use assets 31,202 29 31,231
-
Disposals of right-of–use assets (719) (719)
Balance as at 30 June 2022 89,623 16,294 105,917
----- End of picture text -----

(ii) Amounts recognised in profit or loss

==> picture [486 x 114] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Interest on lease liabilities 3,798 4,293
Income from sub-leasing right-of-use assets 136 134
Expenses relating to short-term leases 228 134
Expenses relating to leases of low-value
assets, excluding short-term leases of 690 829
low-value assets
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

14. Leases (cont.)

(iii) Amounts recognised in statement of cash flows

==> picture [486 x 40] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Total cash outflow for leases 29,081 29,904
----- End of picture text -----

(iv) Extension options

Some property leases contain extension options exercisable before the end of the non-cancellable contract period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable only by the Group and not by the lessors. The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options. The Group reassesses whether it is reasonably certain to exercise the options if there is significant event or changes in circumstances within its control.

B. Leases as lessor

The Group leases out some its leased properties. All leases are classified as operating leases from a lessor perspective with the exception of a sub-lease, which the Group classified as a finance sub-lease.

(i) Finance lease

During the year, the Group recognised $12 thousand interest income on lease receivables (2021: nil).

The following table sets out the maturity analysis of lease receivables, showing the undiscounted lease payments to be received after the reporting date.

==> picture [486 x 95] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Less than one year 163 -
Total undiscounted lease receivable 490 -
-
Unearned finance income (20)
Net investment in the lease 470 -
----- End of picture text -----

(ii) Operating lease

The Group has classified some sub-leased property as operating leases, because they do not transfer substantially all of the risks and rewards incidental to the ownership of the assets.

Rental income recognised by the Group during the year was $137 thousand (2021: $134 thousand).

The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date.

==> picture [486 x 85] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Less than one year 68 86
Between one to five years 159 155
More than five years - -
Total 227 241
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

15. Intangible assets and goodwill

==> picture [483 x 510] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Note Goodwill Computer Capital Customer Total
software work in relationships
restated progress
restated
Cost
Balance at 1 July 2020 156,678 16,058 2,890 36,269 211,895
- - -
Opening restatement (306) (306)
Balance at 1 July 2020
156,678 16,058 2,584 36,269 211,589
(restated)
-
Disposal (9,984) (487) (1,115) (11,586)
Transfer to/(from) computer - - -
2,056 (2,056)
software
Other additions - 3,400 - - 3,400
Balance at 30 June 2021 146,694 21,027 528 35,154 203,403
Balance at 1 July 2021 146,694 21,027 528 35,154 203,403
Acquisition 684 229 - 2,600 3,513
- - -
Disposal (74) (74)
Transfer to/(from) computer - 265 (265) - -
software
Other additions - 1,159 4,952 - 6,111
Balance at 30 June 2022 147,378 22,606 5,215 37,754 212,953
Amortisation and
impairment losses
-
Balance at 1 July 2020 40,000 10,600 16,226 66,826
- - -
Disposal (637) (637)
Amortisation for the year - 3,110 - 3,926 7,036
Balance at 30 June 2021 40,000 13,710 - 19,515 73,225
-
Balance at 1 July 2021 40,000 13,710 19,515 73,225
Amortisation for the year - 3,046 - 3,390 6,436
Balance at 30 June 2022 40,000 16,756 - 22,905 79,661
Carrying amounts
At 1 July 2021 106,694 7,317 528 15,639 130,178
At 30 June 2022 107,378 5,850 5,216 14,849 133,293
----- End of picture text -----*

*Refer to Note 3(s) for further details.

No impairment losses in relation to goodwill have been recognised in the year ended 30 June 2022 (2021 nil).

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

15. Intangible assets and goodwill (cont.)

Impairment testing for cash-generating units containing goodwill

The Group completes impairment testing for eight CGUs. The goodwill allocated to six CGUs included in the ‘Production & Distribution (group of CGUs)’ is not significant and has been grouped for disclosure purposes as the key assumptions are the same. The carrying amount of any goodwill summarised by operating division is set out below:

==> picture [486 x 88] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Production (Franklin WEB CGU) 29,141 29,141
Production & Distribution (group of CGUs) 39,731 39,047
Data-Driven Communications (group of CGUs) 38,506 38,506
107,378 106,694
----- End of picture text -----

Goodwill impairment test is performed by applying value in use calculations. The calculations for all CGU’s use nominal cash flow projections based on FY23 budgeted EBITDA approved by the Board. The EBITDA has been developed using past experience and industry knowledge. A pre-tax WACC rate has been used based on the size and nature of each CGU. Also, a nominal growth allowance in the 5 year and terminal growth cash flow projections has been made in determining management’s estimate of the long-term compound EBITDA of each CGU. The WACC and growth rates are:

==> picture [486 x 95] intentionally omitted <==

----- Start of picture text -----

WACC rate Growth rate
(pre-tax nominal)
Production (Franklin WEB CGU) 11.8% (2021:10.1%) 1% (2021:1%)
12.1% to 13.7% 1% to 2%
Production & Distribution (group of CGUs)
(2021:9.9% to 11.8%) (2021:1% to 2%)
Data-Driven Communications 15.4% (2021:12.8%) 2% (2021:2%)
----- End of picture text -----

There are no reasonable possible changes in assumptions that would give rise to impairment.

16. Other assets

==> picture [486 x 151] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Current
Contract assets 3,491 1,056
Other assets 1,147 647
4,638 1,703
Non-current
Contract assets 2,554 -
-
2,554
----- End of picture text -----

17. Trade and other payables

==> picture [486 x 96] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Current
Trade payables 88,717 64,909
Accrued expenses 35,656 26,810
124,373 91,719
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

18. Loans and borrowings

==> picture [486 x 133] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Current
Equipment finance 3,764 2,791
Non-current
Bank loan 124,214 159,424
Equipment finance 5,987 7,620
130,201 167,044
----- End of picture text -----

Bank loan

As at 30 June 2022, the amended Syndicated Facilities Agreement has a carrying amount of $124,214 thousand and face value of $125,000 thousand (2021: carrying amount of $159,424 thousand and face value of $160,000 thousand). During the year, the Group refinanced these facilities at an interest rate of BBSY plus a margin, and maturity date of 6th May 2026. The Group was in compliance with all loan covenants as at 30 June 2022.

19. Employee benefits

==> picture [486 x 151] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Current
Liability for long service leave 11,499 8,931
Liability for annual leave 12,912 9,919
24,411 18,850
Non-current
Liability for long service leave 6,714 6,568
31,125 25,418
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

20. Provisions

==> picture [486 x 152] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Make good
Balance at 1 July 2021 4,745
Provisions made during the year 1,337
Provisions reversed during the year (706)
Balance at 30 June 2022 5,376
Current -
Non-current 5,376
5,376
----- End of picture text -----

Refer to Note 3(j) on the nature of the provision.

21. Other liabilities

==> picture [486 x 188] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Current
Contract liabilities 13,888 8,263
-
Contingent consideration 1,063
Forward exchange contracts used for hedging 398 222
15,349 8,485
Non-current
Contingent consideration 575 -
Forward exchange contracts used for hedging 636 854
1,211 854
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

22. Share-based payments

During the year ended 30 June 2022, the company granted Performance Share Rights (Rights) under the Equity Incentive Plan (EIP). The Rights are an entitlement to receive fully paid ordinary IVE Group Limited Shares on a one-for-one basis. Further details on the Rights are described below.

==> picture [486 x 387] intentionally omitted <==

----- Start of picture text -----

Type of arrangement Senior Leadership Team Award
Date of grant 23 November 2021
Number granted 823,526
Contractual life 3 years and 2 months
Vesting conditions The Rights are subject to the following
Performance Conditions: sixty percent of the
Rights are referenced against achieving Earnings
Per Share Target (EPS), and forty percent
are referenced against achieving Relative
Shareholder Return (TSR) target.
The performance period is 1 July 2021 to 30 June
2024 inclusive. The vesting date is expected to
be on or soon after the approval of IVE’s 2024
Annual Financial Report.
Weighted average fair value $1.19
Valuation methodology The EPS target was calculated using a
risk-neutral assumption, whereas the
TSR target has been valued using a
Monte Carlo simulation approach.
Holders of performance share rights are not
Expected dividend
entitled to receive dividends prior to vesting.
Other key valuation assumptions
Share price at valuation date $1.6509
Expected volatility 52%
Risk free interest rate 0.15%
Dividend yield 7.82%
----- End of picture text -----

Share rights issued to Directors required shareholder approval. This occurred at the Group’s 2021 Annual General Meeting.

During the year, 824 thousand Rights were granted (2021: 1,885 thousand), 530 thousand lapsed (2021: 159 thousand), and 3,355 thousand remain outstanding (2021: 3,061 thousand). The total expense relating to the Rights granted was $298 thousand (for the year ended 30 June 2021: $265 thousand).

The company also issued 751,996 shares to employees with a value of $1,218 thousand (2021: nil), and cash settled with a value of $25 thousand (2021: nil).

These expenses are included in Note 6 of the consolidated financial statements.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

23. Capital and reserves

==> picture [486 x 296] intentionally omitted <==

----- Start of picture text -----

Issued and paid up capital (In thousands of AUD) 2022 2021
143,508,948 (June 2021: 142,756,952) ordinary 148,878 149,066
shares fully paid
Movement in ordinary share capital
Date Details Number of Issue Total
shares price $’000
1-Jul-20 Opening balance 148,207,285 156,502
21 December 2020 to Share buyback (5,450,333) highest (7,436)
30 June 21 (including transaction price paid:
costs) $1.59 /
lowest
price paid
$1.23
30-Jun-21 Closing balance 142,756,952 149,066
1-Jul-21 Opening balance 142,756,952 149,066
1-Jul-21 Share buyback - (188)
(including transaction
costs)
-
23-Sep-21 Employee share issue 751,996
30-Jun-22 Closing balance 143,508,948 148,878
----- End of picture text -----*

*Included in the number of share buyback during the year were 83,697 shares that were bought on 30 June 2021, but cancelled on 2 July 2021. As at 30 June 2021, 142,840,649 shares were on issue.

Dividends

On 25 August 2022, the directors have declared a fully franked dividend of 8.0 cents per share to be paid on 13 October 2022 to shareholders on the register at 14 September 2022. The final dividend payout is $11,481 thousand (2021: $9,993 thousand). A liability has not been recognised as the dividend was declared after the reporting date.

The following dividends were declared and paid during the year ended 30 June 2022:

==> picture [486 x 108] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Cents per Total Date of
share amount payment
2022
Final 2021 ordinary 7.0 9,993 14 October 2021
Interim 2022 ordinary 8.5 12,198 14 April 2022
Total amount 22,191
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

23. Capital and reserves (cont.)

On 14 October 2021 a dividend of 7 cents per share (100% franked) was declared and paid by the directors. The dividend was paid out of opening retained profits and profits earned up to that date.

On 14 April 2022 a further dividend of 8.5 cents per share (100% franked) was declared and paid by the directors. The dividend was paid out of opening retained profits and profits earned up to that date.

The following dividends were declared and paid during the year ended 30 June 2021:

==> picture [486 x 140] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Cents per Total Date of
share amount payment
2021 7.0 10,282 15 April 2021
Interim 2021 ordinary
Dividend franking account
In thousands of AUD 2022 2021
Amount of franking credits available to 18,310 16,441
shareholders of IVE Group Limited for
subsequent financial years
----- End of picture text -----

The ability to utilise the franking credits is dependent upon the ability to declare dividends.

Reserves

Included within reserves are the fair value of hedged derivative instruments, and foreign currency translation reserve balances.

24. Earnings per share

==> picture [486 x 285] intentionally omitted <==

----- Start of picture text -----

In dollars 2022 2021
Restated
Basic earnings per share 0.19 0.20
Diluted earnings per share 0.19 0.20
Basic earnings per share – continuing operations 0.19 0.17
Diluted earnings per share – continuing operations 0.19 0.17
In thousands
Earnings
Profit after income tax attributable to owners of the company 26,932 29,060
used in calculating basic and diluted earnings per share
Profit after income tax attributable to owners of the company 26,932 24,255
used in calculating basic and diluted earnings
per share – continuing operations
Weighted average number of ordinary shares
Weighted average number of ordinary shares used in calculating 143,336 146,851
basic earnings per share
Weighted average number of ordinary shares used in calculating 145,057 147,734
diluted earnings per share
----- End of picture text -----*

*Refer to Note 3(s) for further details.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

25. Acquisitions

On 31 October 2021, IVE acquired selected assets of Active Display Group’s (ADG) retail display and 3PL business, and 100% shares in fabric printing business of AFI Branding Solutions Pty Ltd (AFI). These acquisitions further strengthen IVE’s product offerings to its customers. IVE is in the process of integrating these businesses into its Production & Distribution business units.

The following summarises the major classes of consideration transferred, and the provisionally recognised amounts of assets acquired and liabilities assumed at the acquisition date:

==> picture [486 x 363] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD ADG AFI Total
Consideration transferred
Initial cash paid 3,500 1,738 5,238
-
Completion cash adjustment received (603) (603)
-
Contingent consideration 1,638 1,638
2,897 3,376 6,273
Identifiable assets acquired and liabilities assumed
Trade and other receivables - 869 869
Inventories 1,343 2,106 3,449
Prepayments 58 69 127
Other current assets - 31 31
Property, plant and equipment 1,442 1,330 2,772
Right of use asset - 596 596
Intangible asset 2,300 529 2,829
Deferred tax assets/(liabilities) 52 168 220
Trade and other payables (319) (1,335) (1,654)
Employee benefits (2,257) (657) (2,914)
Provisions (80) (60) (140)
-
Lease Liability (596) (596)
2,539 3,050 5,589
Goodwill on acquisition 358 326 684
----- End of picture text -----*

*The completion adjustment includes working capital and balance sheet date adjustments. These adjustments are made in the ordinary course of a transaction to reflect the difference between normalised expectations around balance sheet items at the time of signing and actual balances on transaction completion.

As part of the consideration transferred, contingent consideration is expected to be payable. The Group has made a best estimate of the amount of consideration payable for the acquisition where there is a variable purchase price based on future revenue performance. Based on past and expected performance the Group assumes that the acquirees will meet the future revenue target. Any variation at time of settlement will be recognised as an expense or income.

Management have measured the assets and liabilities acquired at fair value. The fair value of property, plant and equipment, deferred tax assets has been measured on a provisional basis pending the completion of a final valuation. If new information obtained within one year from the acquisition date about facts and circumstances that existed at the acquisition date identifies adjustments to the above amounts, or any additional provisions that existed at the acquisition date, then the accounting for the acquisition will be revised.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

25. Acquisitions (cont.)

The goodwill is attributable to the future profitability of the acquisitions and the synergies expected to arise within the Group. None of the goodwill recognised is expected to be deductible for tax purposes.

As these businesses are being integrated into IVE the profit before tax contribution from these acquisitions are indistinguishable from existing business unit results. On this basis a disclosure of profit before tax is impracticable. The total revenue since acquisition is $30,011 thousand. Individually these businesses are considered immaterial.

If this acquisition had occurred from beginning of the reporting period the combined Group revenue would have been estimated at $775,725 thousand. The Group has not estimated the profit before tax for the reasons provided above.

Acquisition-related costs totalling $325 thousand has been included in Other expenses in the Group’s consolidated statement of profit or loss and other comprehensive income.

26. Operating segments

The Group has identified one operating segment (whole of business) based on the internal reports that are reviewed and used by the Board (Chief Operating Decision Maker or ‘CODM’) in assessing performance and in determining the allocation of resources. The Board reviews the internal report on a monthly basis.

The key measure of performance used by the CODM to assess performance is earnings before interest, tax, depreciation and amortisation (EBITDA).

A reconciliation of the reportable segment's EBITDA to profit before income tax expense is shown below. Profit and loss, total assets and liabilities for the reportable segment is consistent with the primary statements included in this consolidated interim financial report.

==> picture [486 x 106] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Restated
EBITDA 90,496 95,729
Depreciation, amortisation and impairment (41,984) (47,271)
Net finance costs (9,162) (12,127)
Profit (loss) before income tax 39,350 36,331
----- End of picture text -----*

*Refer to Note 3(s) for restatement.

27. Financial risk management and financial instruments

Overview

The Group has exposure to the following risks from its use of financial instruments:

a. credit risk
b. liquidity risk
c. market risk

This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk, and the Group's management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

27. Financial risk management and financial instruments (cont.)

Risk management framework

The Company's board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. The CFO is responsible for developing and monitoring the Group’s risk management policies. He reports regularly to the Board of Directors on its activities.

The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group Audit & Risk Committee oversees how management monitors compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

Exposure to credit risk

The carrying amount of financial assets represents the maximum credit exposure. The maximum exposure to credit risk at the reporting date was:

==> picture [486 x 151] intentionally omitted <==

----- Start of picture text -----

Carrying amounts
In thousands of AUD Note 2022 2021
Cash and cash equivalents 10 67,035 106,474
Trade and other receivables 11 116,742 101,530
Derivative receivable 11 - 315
Lease and other receivables 11 470 571
Contract assets 16 6,045 1,056
190,292 209,946
----- End of picture text -----

Trade, lease and other receivables, and contract assets

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated the industry under the current economic environment. Additional allowances have been made for this uncertainty.

The Group has no significant concentrations of credit risk. The Group has policies in place to ensure that sales of services are made to customers with an appropriate credit history based on enquiries through the Group’s Finance department. Ongoing customer credit performance is monitored on a regular basis.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

27. Financial risk management and financial instruments (cont.)

Trade, lease and other receivables, and contract assets (cont.)

The aging of the trade, lease and other receivables and contract assets at the end of the reporting period that were not impaired was as follows:

==> picture [486 x 132] intentionally omitted <==

----- Start of picture text -----

Carrying amounts
In thousands of AUD 2022 2021
Neither past due nor impaired 76,952 61,401
Past due 1–30 days 28,973 27,405
Past due 31–90 days 10,485 10,527
Past due 91 days and over 6,848 3,824
123,257 103,157
----- End of picture text -----

The movement in the allowance for impairment in respect of receivables during the year was as follows:

==> picture [486 x 123] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Balance at beginning of the year 2,008 2,220
Assumed in a business combination in 34 -
current year
Impairment loss recognised 1,257 524
Amounts written off (175) (736)
Balance at end of year 3,124 2,008
----- End of picture text -----

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group manages working capital and forecasts cash flow to meet its financial obligations.

The Group at 30 June 2022 had undrawn facility of $35,000 thousand (2021: $30,000 thousand) for general corporate and working capital purpose. On 7 July 2022, the Group repaid $20,000 thousand of the bank loan increasing the undrawn facility to $55,000 thousand. The facility will mature on 6th April 2026.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

27. Financial risk management and financial instruments (cont.)

Liquidity risk (cont.)

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include estimated interest payments:

==> picture [487 x 451] intentionally omitted <==

----- Start of picture text -----

30 June 2022 Contractual cash flows
In thousands of AUD Carrying Total 12 mths 1–5 More than
amount or less years 5 years
Non-derivative financial liabilities
- -
Trade and other payable 124,373 124,373 124,373
Lease liabilities 124,716 146,450 32,367 87,165 26,918
-
Equipment finance 9,751 10,451 3,764 6,832
Bank loans 124,214 141,368 4,267 137,101 -
383,054 422,642 164,771 231,098 26,918
Derivative financial liabilities
Forward exchange contracts used 1,034 1,034 398 636 -
for hedging
1,034 1,034 398 636 -
30 June 2021 Contractual cash flows
In thousands of AUD Carrying Total 12 mths 1–5 More than
amount or less years 5 years
Non-derivative financial liabilities
- -
Trade and other payable 91,719 91,719 91,719
Lease liabilities 119,760 129,725 27,937 92,723 9,065
-
Equipment finance 10,411 11,051 3,194 7,857
Bank loans 159,424 168,414 3,056 165,358 -
381,314 400,909 125,906 265,938 9,065
Derivative financial liabilities
Forward exchange contracts used 1,076 1,076 222 854 -
for hedging
1,076 1,076 222 854 -
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

27. Financial risk management and financial instruments (cont.)

Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, equity prices and interest rates will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

Currency risk

The Group is exposed to currency risk to the extent that there is a mismatch between the currencies in which purchases are denominated and the respective functional currencies of Group entities. The functional currency of the Group is the Australian dollar (AUD). The currencies in which these transactions are primarily denominated are Euro, US dollars and AUD.

During the year, 3% (2021: 3%) of total group purchases were made in foreign currencies. The Group has used forward exchange contracts to hedge its currency risk, most with a maturity of less than one year from the reporting date. These forward exchange contracts have been designated as a cash flow hedge, and have $13 thousand fair value at the reporting date (2021: zero fair value). The Group has performed effectiveness testing and recognised the full fair value amount net of deferred tax $9 thousand in other comprehensive income (2021: nil). Based on the results of the test no in-effectiveness has been recognised in the profit or loss.

Exposure to currency risk

The summary quantitative data about the Group’s exposure to currency risk as reported to the management of the Group is as follows:

==> picture [485 x 114] intentionally omitted <==

----- Start of picture text -----

As at 30 June 2022 As at 30 June 2021
In thousands of AUD Euro NZD Euro USD
- -
Equipment finance loan 8,808 12,144
Next three months forecast purchases 392 676 - 1
Forward exchange contracts (9,200) (676) (12,144) (1)
- - - -
Net exposure
----- End of picture text -----

Sensitivity analysis

The impact of exchange rate movements on profit is subject to other variables including movement in market prices. The impact of exchange rate movements on profit and loss is not material.

Interest rate risk

The Group has the ability to enter into interest rate swap contracts to minimise its variable interest exposure on bank loans. As at 30 June 2022, no interest rate swap contracts were outstanding, hence $124,214 thousand of the carrying amount of the bank loan is exposed to variable rates (2021: $94,424 thousand).

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

27. Financial risk management and financial instruments (cont.)

Exposure to interest rate risk

At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:

==> picture [486 x 243] intentionally omitted <==

----- Start of picture text -----

Carrying amounts
In thousands of AUD 2021 2020
Fixed rate instruments
Financial liabilities – leases liabilities (124,716) (119,760)
Financial liabilities – equipment finance (2,623) (10,411)
-
Effect of interest rate swaps – notional amount 65,000
(127,339) (65,171)
Variable rate instruments
Financial assets – bank balances 67,035 106,474
Financial liabilities – bank loans (124,214) (160,000)
-
Financial liabilities – equipment finance (7,128)
-
Effect of interest rate swaps – notional amount 65,000
(64,307) 11,474
----- End of picture text -----

Fair value sensitivity analysis for fixed rate instruments

The Group accounts for any fixed rate financial assets and liabilities at fair value through profit or loss.

Cash flow sensitivity analysis for variable rate instruments

A change of 10 basis points in interest rates at the reporting date would have increased (decreased) profit or loss by $65 thousand (2021: $11 thousand). This analysis assumes that all other variables, in particular foreign currency rates, remain constant. The analysis is performed on the same basis as 2021.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

27. Financial risk management and financial instruments (cont.)

Measurement of fair values

The table below gives information on the valuation technique and unobservable inputs of financial assets or liabilities categorised as a Level 2 and 3 in the fair value hierarchy.

==> picture [486 x 298] intentionally omitted <==

----- Start of picture text -----

Type Valuation technique Significant Relationship between the fair value
unobservable and unobservable inputs
inputs
Financial asset The valuation is based The Group’s The unobservable inputs are applied
(level 2) on market share price of economic as a fixed percentage discount to the
the investee after taking interest, and fair value.
into account the Group’s lack of voting
economic interest, and rights and
lack of voting rights marketability.
and marketability.
Forward The fair value is Not applicable Not applicable
exchange determined using
contracts quoted forward
(level 2) exchange rates
and present value
of estimated future
cash flow based on
observable yield curves.
Contingent The fair value is Forecast If the applicable performance
consideration calculated based on revenue growth targets for the acquisition is higher
(level 3) the acquired business of $14,000 or lower than expected by 10%, then
achieving future thousand. the contingent consideration value
revenue target. will be increased or decreased by
approximately $0.2 million.
----- End of picture text -----

Fair values versus carrying amounts

As at the reporting date, the carrying value of other financial assets and liabilities as at the end of the financial year are considered to approximate their fair value.

Capital management

The primary objective of the Group's capital management is to maintain a strong capital base through cash flow management in order to sustain future development of the business and maximise shareholder value. There were no changes in the Group's approach to capital management during the year. The Group is subject to externally imposed capital requirements (being financial loan covenants – refer to Note 18).

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

28. Capital commitments

As at 30 June 2022, the Group has $6,163 thousand commitment to purchase plant and equipment (2021: $950 thousand).

29. Related parties

Key management personnel compensation

Key management personnel compensation comprised the following:

==> picture [486 x 103] intentionally omitted <==

----- Start of picture text -----

In AUD 2022 2021
Short-term employee benefits 3,374,249 3,249,298
Post-employee benefits 125,295 113,598
Share-based payments 171,893 163,752
Other long-term benefits 34,022 32,416
3,705,459 3,559,065
----- End of picture text -----

Related party transactions and outstanding balances

==> picture [486 x 62] intentionally omitted <==

----- Start of picture text -----

Transaction value Transaction value
In AUD year ended year ended
30 June 2022 30 June 2021
Caxton Property Developments Pty Ltd – sales 5,885 3,606
----- End of picture text -----

There are no outstanding receivables or payables with related parties.

Paul Selig (director of the Company), holds positions in Caxton Property Developments Pty Ltd that results in him having control or significant influence over the financial or operating policies of this entity.

During the year ending 30 June 2022, the Group sold goods and services to Caxton Property Developments Pty Ltd.

The terms and conditions of the transactions above were no more favourable than those available, or which might reasonably be expected to be available, on similar transactions to other third parties on an arm’s length basis.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

30. Group entities

==> picture [485 x 447] intentionally omitted <==

----- Start of picture text -----

Ownership interest
Ultimate parent entity 2022 2021
IVE Group Limited % %
Controlled entities
Caxton Print Group Holdings Pty Limited 100 100
Caxton Print Group Pty Limited 100 100
IVE Group Australia Pty Limited 100 100
IVE Group Victoria Pty Limited 100 100
Task 2 Pty Limited 100 100
Pareto Fundraising Pty Limited 100 100
James Bennett & Associates Pty Limited 100 100
IVE Employment (Australia) Pty Limited 100 100
IVE Employment (Victoria) Pty Limited 100 100
Taverners No. 13 Pty Limited 100 100
AIW Printing (Aust) Pty Limited 100 100
AIW Printing Unit Trust 100 100
IVE Group Asia Limited 100 100
Guangzhou IVE Trading Company Limited 100 100
SEMA Holdings Pty Ltd 100 100
SEMA Infrastructure Pty Ltd 100 100
SEMA Operations Pty Ltd 100 100
John W Gage & Co Pty Ltd 100 100
IVE Distribution Pty Ltd 100 100
Lasoo Pty Ltd 100 100
Reach Media New Zealand Limited 100 100
IVE Group Limited Employee Share Trust 100 100
AFI Branding Solutions Pty Ltd 100 -
----- End of picture text -----

All entities are incorporated in Australia except for: IVE Group Asia Limited (incorporated in Hong Kong, China), Guangzhou IVE Trading Company Limited (incorporated in China), and Reach Media New Zealand Limited (incorporated in New Zealand).

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

31. Parent entity disclosures

As at, and throughout, the financial year ending 30 June 2021 the parent entity of the Group was IVE Group Limited.

==> picture [486 x 260] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Result of parent entity
Profit/(loss) for the year (1,220) (0.2)
- -
Other comprehensive income
Total comprehensive income for the year (1,220) (0.2)
Financial position of parent entity at year/period end
Current assets 94 574
Total assets 25,446 47,887
Current liabilities 110 171
Total liabilities 110 171
Total equity of the parent entity comprising of:
Share capital 280,191 280,378
Equity reserve (147,880) (146,662)
Accumulated losses (net of dividend paid) (109,411) (86,000)
Total equity 25,336 47,716
----- End of picture text -----

IVE Group Limited was incorporated on 10 June 2015, but did not undertake any trading activities until its listing (IPO) on the Australian Stock Exchange (ASX) on 16 December 2015 where it also contemporaneously acquired Caxton Print Group Holdings Pty Ltd (CPGH).

An internal restructure took place resulting in IVE Group Limited becoming the holding company of CPGH. The Directors elected to account for the restructure as a capital re-organisation rather than a business combination. In the Directors' judgement, the continuation of the existing accounting values is consistent with the accounting that would have occurred if the assets and liabilities had already been in a structure suitable to IPO and most appropriately reflects the substance of the internal restructure. As such, the consolidated financial statements of the new IVE Group have been presented as a continuation of the pre- existing accounting values of assets and liabilities in CPGH's financial statements.

Accordingly, the other equity reserve represents the difference between the fair value of the share capital at the date of the IPO and historical book values of the assets and liabilities of the Group.

32 Subsequent events

Aside from the above, there have been no other events subsequent to balance date which would have a material effect on the Group's consolidated financial statements at 30 June 2022.

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

33. Auditors' remuneration

==> picture [486 x 188] intentionally omitted <==

----- Start of picture text -----

In AUD 2022 2021
Audit services
Auditors of the Company – KPMG
Audit and review of financial reports 403,415 391,460
403,415 391,460
Other services
Auditors of the Company – KPMG
Taxation services 114,300 116,829
Transaction services - 90,950
114,300 207,779
----- End of picture text -----

34. Deed of cross guarantee

Pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785 the wholly-owned subsidiaries listed below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and directors’ reports.

It is a condition of the Instrument that IVE Group Limited (the Company) and each of the subsidiaries enter into a Deed of Cross Guarantee. The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The subsidiaries have also given similar guarantees in the event that the Company is wound up.

The Company and its subsidiaries amended its Deed of Cross Guarantee on 18 February 2022. The subsidiaries subject to the Deed are:

a. Caxton Print Group Holdings Pty Limited
b. IVE Group Australia Pty Limited
c. IVE Group Victoria Pty Limited
d. Caxton Print Group Pty Limited
e. Task 2 Pty Limited
f. Pareto Fundraising Pty Limited
m. SEMA Infrastructure Pty Limited
n. SEMA Operations Pty Limited
o. John W. Gage & Co Pty Limited
p. IVE Distribution Pty Limited
q. Lasoo Pty Limited
r. AFI Branding Solutions Pty Limited
g. James Bennett & Associates Pty Limited
h. IVE Employment (Australia) Pty Limited
i. IVE Employment (Victoria) Pty Limited
j. Taverners No. 13 Pty Limited
k. AIW Printing (Aust) Pty Limited
l. SEMA Holdings Pty Limited

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

34. Deed of cross guarantee (cont.)

The following consolidated statement of profit or loss and other comprehensive income and consolidated statement of financial position, comprising the Company and controlled entities, which are a party to the Deed, after eliminating all transactions between parties to the Deed of Cross Guarantee, for the year ended 30 June 2022, are:

Consolidated statement of profit or loss and other comprehensive income

For the year ended 30 June 2022

==> picture [486 x 356] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Restated
Continuing operations
Revenue 738,543 639,009
Results from operating activities 47,700 48,444
Finance income 56 517
Finance costs (9,218) (12,644)
Net finance costs (9,162) (12,127)
Profit before tax 38,538 36,317
Income tax expense (12,417) (12,254)
Profit from continuing operations 26,121 24,063
Discontinued operation
-
Profit from discontinued operation, net of tax 4,177
Profit for the year 26,121 28,240
Cash flow hedges 343 132
Total other comprehensive income 26,464 28,372
Reconciliation of movement in retained earnings
Balance reported at 1 July 2021 26,860 8,902
Profit for the year 26,121 28,240
Dividends to owners of the Company (22,191) (10,282)
Balance at 30 June 2022 30,790 26,860
----- End of picture text -----*

IVE Group Limited Annual Financial Report 2022

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

34. Deed of cross guarantee (cont.)

Consolidated statement of financial position

As at 30 June 2022

Assets

==> picture [486 x 610] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Restated
Assets
Cash and cash equivalents 64,579 105,718
Trade and other receivables 110,330 97,839
Inventories 74,157 43,829
Prepayments 5,053 3,435
Financial asset - 1,762
Other current assets 4,499 1,703
Total current assets 258,618 254,286
Deferred tax assets 17,151 15,233
Trade and other receivables 2,200 2,127
Property, plant and equipment 99,816 99,875
Right of use assets 103,651 93,539
Intangible assets and goodwill 132,680 129,282
Other non-current assets 2,554 -
Total non-current assets 358,052 340,056
Total assets 616,670 594,342
Liabilities
Trade and other payables 120,864 89,046
Lease liabilities 31,575 27,157
Loans and borrowings 3,764 2,791
Employee benefits 24,411 18,850
Current tax payable 5,736 3,289
Other current liabilities 15,349 8,485
Total current liabilities 201,699 149,618
Loans and borrowings 130,201 167,044
Lease liabilities 90,090 89,857
Employee benefits 6,714 6,568
Provisions 5,280 4,660
Other non-current liabilities 1,211 854
Total non-current liabilities 233,496 268,983
Total liabilities 435,195 418,601
Net assets 181,475 175,741
Equity
Share capital 148,878 149,066
Reserves 1,807 (185)
Retained earnings 30,790 26,860
Total equity 181,475 175,741
----- End of picture text -----*

IVE Group Limited Annual Financial Report 2022

100

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

35. Discontinued operation

On 30 October 2020, the Group sold its Tele-fundraising business (Pareto Phone Pty Ltd).

(i) Results of discontinued operation

==> picture [486 x 208] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Note 2022 2021
Revenue - 4,695
Cost of sales - (109)
Gross profit 4,586
-
Production expenses (1,649)
-
Administrative expenses (2,033)
Results from operating activities - 904
Finance income -
-
Net gain on sale of discontinued operation 4,177
- -
Profit before tax
-
Income tax expense (276)
-
Profit from discontinued operations 4,805
----- End of picture text -----

The profit from the discontinued operation during 2021 of $4,805 thousand was attributable entirely to the owners of the Company.

(ii) Cash flows from discontinued operation

==> picture [486 x 58] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD 2022 2021
Net cash from operating activities - 628
-
Net cash from investing activities 15,165
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

101

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (CONT.)

For the year ended 30 June 2022

35. Discontinued operation (cont.)

(iii) Net gain on sale of discontinued operation (Tele-fundraising)

==> picture [486 x 355] intentionally omitted <==

----- Start of picture text -----

In thousands of AUD Total
Consideration received
Initial cash received 16,500
Completion adjustment paid (250)
16,250
Assets and liabilities disposed
Cash (467)
Receivables (1,134)
Prepayment (102)
Deferred tax assets (70)
Other assets (98)
Property, plant and equipment (213)
Intangible asset (10,949)
Trade creditors 229
Employee benefits 1,302
Provisions 44
(11,454)
Costs incurred (619)
Gain on sale of sale of discontinued operation 4,177
----- End of picture text -----*

IVE Group Limited Annual Financial Report 2022

102

IVE Group Limited DIRECTORS’ DECLARATION

1 In the opinion of the directors of IVE Group Limited (the Company):
(a) the consolidated financial statements and notes, set out on pages 52 to 101, are in accordance with the Corporations Act 2001, including:
- (i) giving a true and fair view of the Group's financial position as at 30 June 2022 and of its performance for the financial year ended on that date; and
- (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.
2 There are reasonable grounds to believe that the Company and the group entities identified in Note 28 will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those group entities (refer Note 32) pursuant to ASIC Corporations (Wholly owned Companies) Instrument 2016/785.
3 The directors draw attention to Note 2 to the consolidated financial statements, which includes a statement of compliance with International Financial Reporting Standards.

Signed in accordance with a resolution of directors.

==> picture [81 x 37] intentionally omitted <==

Geoff Selig Director

Dated at Sydney this 25th day of August 2022

IVE Group Limited Annual Financial Report 2022

103

==> picture [95 x 71] intentionally omitted <==

Independent Auditor’s Report

To the shareholders of IVE Group Limited

Report on the audit of the Financial Report

Opinion

We have audited the Financial Report of IVE Group Limited (the Company).

In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001 , including:

giving a true and fair view of the Group ’s financial position as at 30 June 2022 and of its financial performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001 .

The Financial Report comprises:

Consolidated statement of financial position as at 30 June 2022;
Consolidated statement of profit or loss and other comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended;
Notes including a summary of significant accounting policies
Directors’ Declaration.

The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year.

Basis for opinion

We conducted our audit in accordance with Australian Auditing Standards . We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

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 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 fulfilled our other ethical responsibilities in accordance with these requirements.

IVE Group Limited Annual Financial Report 2022

104

==> picture [62 x 47] intentionally omitted <==

Key Audit Matters

Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period.

This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter.

Assessment of carrying value of goodwill

Refer to Note 15 to the Financial Report (Goodwill: $107m)

The key audit matter How the matter was addressed in our audit A key audit matter for us was the Group’s Our procedures included: annual testing of goodwill for impairment, given • We considered the Group’s determination of
the size of the balance (being 17% of total its CGUs based on our understanding of the
assets) and the higher estimation uncertainty Group’s business, and how independent cash
driven by current economic conditions. Certain inflows were generated against the
conditions impacting the Group increased the requirements of the accounting standards;
judgement applied by us when evaluating the evidence available. We focussed on the • We analysed the Group’s internal reporting to significant forward-looking assumptions the assess their monitoring and management of Group applied in its value in use models, activities, and the consistency of the allocation including: of goodwill to CGUs; • Assessment of the Cash Generating Units • We considered the appropriateness and (CGUs). The Group had several operating application of the value in use method applied businesses and product lines, as well as by the Group to perform the annual test of acquisitions during the year, necessitating goodwill for impairment against the our consideration of the Group’s requirements of the accounting standards; determination of CGUs, based on the • We assessed the integrity of the value in use
smallest group of assets that generate models used, including the accuracy of the
largely independent cash inflows; underlying calculation formulas;
• Forecast operating cash flows, capital • We compared the Group’s cash flow forecasts,
expenditure, growth rates and terminal including capital expenditure, contained in the
growth rates – the Group has experienced value in use models to the Board approved
continuing competitive market conditions budget and strategy;
due to technological change and digital disruption in the printing industry. These • We assessed the accuracy of previous Group conditions increase the possibility of forecasts to inform our evaluation of forecasts goodwill being impaired, plus the risk of incorporated in the models. We noted previous inaccurate forecasts or a significantly wider trends of competitive market conditions and range of possible outcomes for us to how they impacted the business; consider; • We assessed the Group’s underlying
• Discount rates – these are complicated in methodology and documentation for the nature and vary according to the conditions allocation of corporate costs to the forecast and environment the specific CGU is cash flows contained in the value in use subject to from time to time. models, for consistency with our understanding of the business and the criteria
The Group uses complex models to perform its in the accounting standards;

The Group uses complex models to perform its annual testing of goodwill for impairment. The

IVE Group Limited Annual Financial Report 2022

105

==> picture [62 x 46] intentionally omitted <==

models are largely manually developed, use adjusted historical performance, and a range of internal and external sources as inputs to the assumptions. The Group has not always met prior forecasts, raising our concern for reliability of current forecasts. Complex modelling, particularly those containing judgemental allocation of corporate assets and costs to CGUs, using forward-looking assumptions tends to be prone to greater risk for potential bias, error and inconsistent application. These conditions necessitate additional scrutiny by us, in particular to address the objectivity of sources used for assumptions, and their consistent application.

Given the nature of these judgements, we involved our valuation specialists and senior staff with experience in the industry and the Group’s business in assessing this key audit matter.

We considered the sensitivity of the models by varying key assumptions, such as forecast operating cash flows, forecast growth rates, terminal growth rates and discount rates, within a reasonably possible range. We considered the interdependencies of key assumptions when performing the sensitivity analysis and what the Group considers to be reasonably possible. We did this to identify those CGUs at higher risk of impairment and those assumptions at higher risk of bias or inconsistency in application and to focus our further procedures;
We challenged the Group’s significant forecast cash flow and growth assumptions in light of the expected continuation of inflationary pressures in the economy in addition to continued competitive market conditions and digital disruption. We applied increased scepticism to forecasts in the areas where previous forecasts were not achieved. We compared forecast growth rates and terminal growth rates to authoritative published studies of industry trends and expectations and considered differences for the Group’s operations. We used our knowledge of the Group, business and customers, and our industry experience;
Working with our valuation specialists we checked the consistency of the growth rates to the Group’s revised plans and our experience regarding the feasibility of these in the printing industry and economic environment in which it operates;
We assessed the impact of technology and market changes on the Group’s key assumptions, specifically the continued market for catalogues and other printed materials as a marketing and communications tool, for indicators of bias and inconsistent application, using our industry knowledge and information published by reputable sources;
Working with our valuation specialists we independently developed a discount rate range considered comparable using publicly available market data for comparable entities, adjusted by risk factors specific to the Group and the industry it operates in; and
We assessed the disclosures in the financial report using our understanding obtained from

IVE Group Limited Annual Financial Report 2022

106

==> picture [62 x 46] intentionally omitted <==

our testing and against the requirements of the accounting standards.

Other Information

Other Information is financial and non-financial information in IVE Group Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information.

The Other Information we obtained prior to the date of this Auditor’s Report was the Operating and Financial Review, Director’s Report and Remuneration Report. The Financial performance, Business highlights, Board of Director’s, Year in Review, Chair’s review report and CEO review report are expected to be made available to us after the date of the Auditor's Report.

Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not and will not express an audit opinion or 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. In doing so, we 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.

We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report.

Responsibilities of the Directors for the Financial Report

The Directors are responsible for:

preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and
assessing the Group and Company’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.

IVE Group Limited Annual Financial Report 2022

107

==> picture [62 x 46] intentionally omitted <==

Auditor’s responsibilities for the audit of the Financial Report

Our objective is:

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 Australian Auditing Standards will always detect a material misstatement when it exists.

Misstatements can arise from fraud or error. They 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 the Financial Report.

A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at:

https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.This description forms part of our Auditor’s Report.

Report on the Remuneration Report

Opinion

In our opinion, the Remuneration Report of IVE Group Limited for the year ended 30 June 2022, complies with Section 300A of the Corporations Act 2001 .

Directors’ 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 responsibilities

We have audited the Remuneration Report included in pages 31 to 48 of the Directors’ report for the year ended 30 June 2022.

Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards .

==> picture [81 x 38] intentionally omitted <==

==> picture [109 x 43] intentionally omitted <==

KPMG

Daniel Camilleri Partner

Sydney

25 August 2022

IVE Group Limited Annual Financial Report 2022

108

ASX ADDITIONAL INFORMATION

Additional information required by the Australian Securities Exchange (ASX) and not disclosed elsewhere in the Annual Report is set out below. The shareholder information below is correct as at 26 July 2022.

IVE Group Limited shares are traded on the ASX under the code ‘IGL’.

Share registry Registered office Principal Place of Business Link Market Services Level 3, 35 Clarence Street Building B, Level 12, 680 George Street Sydney NSW 2000 350-374 Parramatta Road Sydney NSW 2000 Phone: +61 2 8020 4400 Homebush NSW 2140 Phone: +61 1300 554 474 Phone: +61 2 8020 4400

Substantial shareholders of ordinary shares (as reported to the ASX)

==> picture [486 x 99] intentionally omitted <==

----- Start of picture text -----

Name Number of % Date of notice
Shares Held to ASX
Caxton Print Holdings Pty Ltd as 11,210,231 8.02% 5 September 2017
trustee for the Selig Family Trust
Anthony Young 10,216,605 7.1% 27 May 2022
Ryan Young 10,118,488 7.0% 6 June 2022
----- End of picture text -----

Distribution of shareholders and shareholdings – ordinary shares

There are 143,508,948 ordinary shares on issue held by 3,726 shareholders.

==> picture [487 x 145] intentionally omitted <==

----- Start of picture text -----

Range Ordinary Shares % No. of %
holders
1 to 1,000 315,372 0.22 587 15.75
1,001 to 5,000 3,303,280 2.30 1,165 31.27
5,001 to 10,000 5,137,042 3.58 643 17.26
10,001 to 100,000 35,861,598 24.99 1,193 32.02
100,001 and over 98,891,656 68.91 138 3.70
Total 143,508,948 100.00 3,726 100.00
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

109

ASX ADDITIONAL INFORMATION (CONT.)

Distribution of performance right holders and holdings – performance share rights (unlisted)

There are 3,555,195 unlisted performance share rights on issue that have been issued under an employee share plan. These are held by 7 employees.

==> picture [486 x 615] intentionally omitted <==

----- Start of picture text -----

Range Performance % No. of %
Share Rights holders
- - - -
1 to 1,000
- - - -
1,001 to 5,000
- - - -
5,001 to 10,000
- - - -
10,001 to 100,000
100,001 and over 3,555,195 100.00 7 100.00
Total 3,555,195 100.00 7 100.00
Unmarketable parcels
The number of shareholders holding less than a marketable parcel of ordinary shares is 108 for 3,242
shares, based on IVE’s closing share price of $1.49, on 26 July 2022.
Twenty largest shareholders
Rank Name No. shares %
1 CAXTON PRINT HOLDINGS PTY LTD (GROUPED HOLDINGS) 12,860,231 8.96
2 CITICORP NOMINEES PTY LIMITED 9,310,082 6.49
3 BNP PARIBAS NOMS PTY LTD 8,656,856 6.03
4 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 7,397,177 5.15
5 NATIONAL NOMINEES LIMITED 5,435,774 3.79
6 RYLELAGE PTY LTD 5,088,708 3.55
7 STRATEGIC VALUE PTY LTD 4,826,716 3.36
8 J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 3,409,854 2.38
8 MR STEPHEN CRAIG JERMYN 3,000,000 2.09
9 SCJ PTY LIMITED 3,000,000 2.09
10 EXLDATA PTY LTD 2,507,195 1.75
11 STRATEGIC VALUE PTY LIMITED 2,166,292 1.51
CENTRAL MUTUAL (INVESTMENTS) PTY LTD 12 1,287,580 0.90\
(INV) A/C>
13 BNP PARIBAS NOMS(NZ) LTD 1,185,908 0.83
14 MR TREVOR READ 970,259 0.68
15 UBS NOMINEES PTY LTD 785,825 0.55
JOHN BARNES FOUNDATION LIMITED 16 754,291 0.53\
FOUNDATION A/C>
17 MR MIKE FEGELSON 700,000 0.49
18 DOROTHY PRODUCTIONS PTY LTD 681,995 0.48
19 PACIFIC CUSTODIANS PTY LIMITED 671,000 0.47
20 EXLDATA PTY LTD 657,008 0.46
Total 75,352,751 52.51
Balance of register 68,156,197 47.49
Grand total 143,508,948 100.00
----- End of picture text -----

IVE Group Limited Annual Financial Report 2022

110

ASX ADDITIONAL INFORMATION (CONT.)

On-Market Buy Back

There is no current on-market buy back.

Voting rights

The voting rights attached to ordinary shares are set out below:

On a show of hands every member present at a meeting in person or by proxy shall have one vote, and upon a poll, one vote for each fully paid share held.

Holders of performance rights do not have voting rights on the performance rights held by them.

Voluntary escrow

There were no ordinary shares held in a voluntary escrow arrangement as at 26 July 2022.

Stock Exchange Listing

IVE Group securities are only listed on the ASX.

Corporate Governance Statement

The Board is responsible for the overall corporate governance of IVE Group Limited, including adopting appropriate policies and procedures designed to ensure that the IVE Group is properly managed to protect and enhance Shareholder interests.

The Board monitors the operational and financial position and performance of IVE and oversees its business strategy, including approving the strategic goals of IVE. The Board is committed to maximising performance, generating appropriate levels of Shareholder value and financial return, and sustaining the growth and success of IVE.

In conducting business with these objectives, the Board is committed to ensuring that IVE is properly managed to protect and enhance Shareholder interests, and that IVE, its Directors, officers and employees operate in an appropriate environment of corporate governance. Accordingly, the Board has created a framework for managing IVE, including adopting relevant internal controls, risk management processes and corporate governance policies and practices, which it believes are appropriate for IVE’s business and that are designed to promote the responsible management and conduct of IVE.

Details of IVE’s key governance policies and the charters for the Board and each of its committees are available on IVE’s website at http://investors.ivegroup.com.au/Investor-Centre/?page=corporate-governance.

The Corporate Governance Statement reports against the 4th edition of the ASX Corporate Governance Council’s Principles and Recommendations (ASX Principles) and the practices detailed in the Corporate Governance Statement are current as at 25 August 2022. It has been approved by the Board and is available on the IVE website under Investors at http://investors.ivegroup.com.au/investorcentre/?page=corporate-governance.

AI assistant

IVE GROUP LIMITED — Annual Report 2022

65109_rns_2022-08-24_5a9f43ed-73bb-4570-935a-0f07967c78ed.pdf

ABN 62 606 252 644

APPENDIX 4E

YEAR ENDED 30 JUNE 2022

Company Information

Results for announcement to the market

Audit report

Attachments

IVE GROUP LIMITED ANNUAL FINANCIAL REPORT

CONTENTS

OPERATING AND FINANCIAL REVIEW (OFR)

1. SUMMARY OF FINANCIAL PERFORMANCE

2. OUR VISION, PURPOSE AND VALUES

OPERATING AND FINANCIAL REVIEW (CONT.)

Values

3. OUR INTEGRATED SERVICE OFFERING

OPERATING AND FINANCIAL REVIEW (CONT.)

4. STRATEGY AND GROWTH

Continuation of the Group’s long-term strategy to further diversify and grow revenue and earnings

Investment, expansion and growth since listing on the ASX in December 2015

OPERATING AND FINANCIAL REVIEW (CONT.)

Market positioning

Revenue diversification

Growth opportunities

Complementary bolt-on acquisitions

Packaging

OPERATING AND FINANCIAL REVIEW (CONT.)

Lasoo

IVE’s new eCommerce marketplace for retailers’ specials

Lasoo today – significant loyal consumer and retailer base despite limited functionality

Lasoo tomorrow – eCommerce marketplace for retailers’ specials

OPERATING AND FINANCIAL REVIEW (CONT.)

Lasoo launch - strong retailer support, best-in-class tech stack and CX, experienced team

5. 2022 – YEAR IN REVIEW

OPERATING AND FINANCIAL REVIEW (CONT.)

Customers and revenue

Retention

Growth

Supply Chain

Capital expenditure

OPERATING AND FINANCIAL REVIEW (CONT.)

Banking and liquidity

Dividends

Net Debt

OPERATING AND FINANCIAL REVIEW (CONT.)

6. REVIEW OF FINANCIAL PERFORMANCE

Basis of preparation

7. FINANCIAL RESULTS

IVE Group Financial Results – on an IFRS and underlying basis (underlying where noted)

OPERATING AND FINANCIAL REVIEW (CONT.)

Non-operating items excluded from underlying NPAT

Revenue

Earnings

OPERATING AND FINANCIAL REVIEW (CONT.)

Net debt

OPERATING AND FINANCIAL REVIEW (CONT.)

Capital expenditure

Cash flow

OPERATING AND FINANCIAL REVIEW (CONT.)

8. OUTLOOK AND GUIDANCE

The solid fundamentals of the business, combined with the strength of our balance sheet, place IVE in an ideal position to deliver growth over the year ahead.

OPERATING AND FINANCIAL REVIEW (CONT.)

9. ENVIRONMENTAL, SOCIAL AND CORPORATE GOVERNANCE

People and culture

OPERATING AND FINANCIAL REVIEW (CONT.)

OPERATING AND FINANCIAL REVIEW (CONT.)

Health and wellbeing

Lifestyle benefits

Wealth and security

Personal, family and community

OPERATING AND FINANCIAL REVIEW (CONT.)

Diversity and inclusion

Workplace health and safety (WH&S)

Sustainability and risk management

OPERATING AND FINANCIAL REVIEW (CONT.)

Quality assurance

Ethical sourcing and environmental management

OPERATING AND FINANCIAL REVIEW (CONT.)

IVE GROUP LIMITED Annual Report 2022