MONASH IVF GROUP LIMITED — Annual Report 2022

Oct 9, 2022

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ANNUAL REPORT 2022

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Growing the future.

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

. Growing the future

For more than 50 years, Monash IVF Group has been at the forefront of reproductive care, partnering with world-leading fertility specialists and other highly skilled experts who share our passion for helping patients to achieve their family dreams.

With our help, more than 50,000 babies have been delivered to the world over the past 50+ years.

Today Monash IVF operates in every state of mainland Australia and in a growing number of South-East Asian locations. Our fertility specialists, nurses, scientists, sonologists, genetic counsellors, phlebotomists, ultrasound technicians, sonographers, donor and surrogacy experts and support teams provide holistic and integrated care and are passionate about supporting our patients no matter what stage of their fertility journey they are at.

Due to our patient-centred care and inclusive approach, clinician engagement, strong success rates, diverse service offerings and state-of-the-art technologies in our laboratories, Monash IVF Group is growing as the fertility partner of choice for a number of clinicians in Australia and abroad. With expertise in IVF, donor, genetic testing, counselling, surrogacy, menstrual health and other gynaecological issues (such as endometriosis and PCOS), patients can be rest assured that they are in safe hands as they navigate through their fertility journey.

We offer a full range of fertility and reproductive care services - from pre conception health assessments, genetic testing and counselling through to fertility treatment options and women’s ultrasound.

~~CONTENTS~~

Chairman’s Report	4		Auditor’s Independence Declaration	56
Managing Director & CEO’s Report	5		Corporate Governance	57
Financial Overview	6		Consolidated Statement of Proft or Loss and Other Income	71
Chief Financial Ofcer’s Report	7		Consolidated Statement of Financial Position	72
Our Strategy	8		Consolidated Statement of Changes in Equity	73
Our Pillars	9		Consolidated Statement of Cash Flows	74
Board of Directors	20		Directors’ Declaration	111
Management Team	22		Independent Auditor’s Report	112
Directors’ Report	23		Shareholder Information	116
Remuneration Report – Audited	38		Corporate Directory	118

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FINANCIAL OVERVIEW CFO REPORT OUR STRATEGY OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM FY22 FINANCIAL REPORT
Let’s be
brave
.
together
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Annual Report 2022 | 1

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

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GROWING THE FUTURE
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A Year in Review Total domestic Opened our 5clinic in Asia [th ]
stimulated cycles
New patient 15.09.22
domestic ↓0.3% Bali
stimulated cyles On FY21 (FY22; 9,783)
↑2.2%
On FY21 (FY22; 4,881)
New Patient
Registrations
increased by
↑4.0%
compared to FY21
Domestic
acquisitions
2
Total embryos
screened (PGT)
↑14.7%
On FY21 (FY22, 5,487)
Success rates
increased by
↑4.4%
since 2018
Employee
Engagement
Culture of
Success
61%
Average
patient NPS
score
+66
2 | Monash IVF Group
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2 | Monash IVF Group

FINANCIAL OVERVIEW CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Revenue $192.3m

↑ 4.7% on FY21

Underlying NPAT[1 ,3 ] $22.2m

↓ 4.7% on FY21

Underlying EBITDA[1 ]

$48.1m

↑ 0.8% on FY21

Underlying EBIT[1 ]

$33.4m

↓ 5.0% on FY21

Reported NPAT[3 ]

$18.5m

↓ 28.0% on FY21

31 New Domestic and International Fertility Specialists

joined Monash IVF Group in July 2021-August 2022 through recruitment, acquisitions and our internal training program.

1. Non-IFRS measure

2. Refer to page 26 for reconciliation of Reported EBITDA, EBIT and NPAT to Adjusted EBITDA, EBIT and NPAT

3. NPAT including minority interest

Annual Report 2022 | 3

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Chairman’s Report

In a year impacted by the ongoing COVID-19 pandemic, coupled with other global macro disruptions and challenges, Monash IVF Group delivered revenue growth of 4.7% and underlying NPAT of $22.2m. We successfully navigated multiple disruptors whilst maintaining our market focus and momentum. We have continued to make significant investments in doctor partnerships, clinical infrastructure, genetics and science, and our business is in a strong financial position to deliver sustainable long-term growth.

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Mr Richard Davis
INDEPENDENT
CHAIRMAN
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Strong underlying market dynamics remain unchanged despite a year of disruptions and short-term volatility.

In FY22 the Australian IVF market recorded a decrease in stimulated cycles of 1.1%, with Monash IVF Group performing ahead of market, recording market share growth of 20bp to 21.2%.

The extended COVID-19 lockdowns in 1H22 meant people were spending most of their time at home with their families, making it the ideal time to think about starting or expanding families. Pregnancy rates continued to increase, and IVF growth rates were strong during 1H22.

However, as COVID-19 became more widespread in the community in 2H22, the IVF industry faced significant disruptions from workforce shortages and patients being forced to delay treatment following COVID-19 infection. Furthermore, as international borders reopened, a strong urge to travel saw many Australians recommence travel and holidays.

This short-term lag in market growth in 2H22 does not reflect any changing consumer sentiment towards IVF, yet reflects short-term impacts of COVID-19.

The Australian IVF industry has experienced remarkable growth over the last three years, delivering a three-year CAGR (Compound Annual Growth Rate) in Stimulated Cycles of 7%.

Our Australian IVF business delivered a robust result in FY22, with stimulated cycles in line with FY21 and EBITDA growth of 6.9%. Performance was particularly strong in New South Wales, Queensland and South Australia.

Our ultrasound business was disrupted by COVID-19 and influenza during FY22. Volumes declined due to sonographer and workforce shortages, and reluctance of patients to attend healthcare settings. We are confident that this business will have strong tailwinds as the recent challenges subside.

Our Malaysian business has had a longer road to recovery post the initial COVID shutdowns with demand for IVF services restricted by reduced movement and travel and a weak economic environment. However, early signs of improvement were evident in 2H22 with a 23% increase in new patient consultations.

Despite some volatility in market growth in 2H22, underlying demand for IVF services remains strong and resilient.

Monash IVF’s ability to on-board and attract more fertility specialists and execute on compelling acquisitions reflects our leading reputation in the market for our best-in-class service model and compelling doctor value proposition, combined with the strength and engagement of our existing doctor group. Monash IVF Group is now considered the destination of choice for clinicians.

As we look towards FY23 and beyond, we remain confident that we have the right people, the right priorities and more importantly the commitment of our people to maintain a strong financial position and deliver shareholder value.

The Board and I would like to acknowledge and thank our people and clinicians for their dedicated commitment to the business, together with our patients and our shareholders for their ongoing support of Monash IVF Group.

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Mr Richard Davis Independent Chairman

4 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS MANAGEMENT TEAM FY22 FINANCIAL REPORT

Managing Director & CEO’s Report

During FY22 we made substantial progress towards achieving our Vision 2026. Through the resilience and agility of our people Monash IVF Group delivered a solid FY22 result, despite the disruptions thrown in our path. In FY22, Monash IVF delivered revenue of $192.3m with the performance of our Australian IVF operations remaining strong, partially offset by weaker performances from the Ultrasound and International businesses.

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Mr Michael Knaap
MANAGING DIRECTOR
& CEO
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The most exciting achievement in FY22 has been the significant ramp up in business development and investment in our business to drive future growth. This reflects our strong confidence in the IVF markets in Australia and South-East Asia, and the ability of our business model and leadership team to execute on this growth.

Key highlights of FY22 include:

• › Sustaining a higher than benchmark employee engagement demonstrating a “Culture of Success” for consecutive years.

• › Investing in doctor partnerships: In Australia, the addition of 9 new doctors through organic recruitment and two new domestic acquisitions were executed which will add a further 15 new doctors in 1H23. The ability of Monash IVF to attract new doctors is a strong endorsement of our best-in-class clinical offering and our collaborative approach to doctor partnerships;

• › Expanding domestic geographic footprint: Following our entry into the Western Australian and Cairns markets through the Pivet acquisition, Monash IVF Group will have the broadest footprint across Australia;

• › Investing in state-of-the-art clinical infrastructure: In FY22, we invested in new sites in Darwin and Penrith, and new flagship sites in Melbourne and the Gold Coast are expected to open in 2H23, with both sites including day surgeries;

• › Scientific leadership to improve pregnancy outcomes: Clinical

pregnancy rates per embryo transferred (women aged <43 years) continue to improve across the Group growing from 32.6% in CY18 to 37.0% in CY21;

• › Increasing presence in genetics: Appointment of four new clinical geneticists and the launch of our At Home Genetic Carrier Screening in November 2021;

• › South-East Asia expansion gaining momentum: Our new clinic opened in Singapore in April 2022 and a new clinic in Bali opened in September 2022, taking our total clinics in South-East Asia to five.

Resilience and commitment of our people

The strength of our people and culture has been further highlighted over the past two years as we all collectively navigated the new ways of working and gained overwhelming support for the implementation of critical COVID-safe practices such as vaccinations, ensured we kept our people, patients, and the community safe. This at times was further challenged as workforce shortages became a new consideration.

I would like to take this opportunity to thank all our people and clinicians for their outstanding commitment to Monash IVF during this challenging period.

Looking to FY23 and beyond

Despite the slowing in market growth in 2H22, we are confident the strong underlying industry dynamics are unchanged. Advanced maternal age, behavioural changes in the community to focus more on family, a favourable Government funding environment and access to broader service offerings is expected to underpin industry growth into the future.

Monash IVF Group is ideally positioned to continue to grow above market in FY23 and beyond driven by several factors, including: the 31 new doctors that have recently joined Monash IVF Group; the transformation of our Melbourne, Gold Coast and Brisbane clinics as they move to new state of the art facilities over the next 18 months; the momentum building in our South-East Asia expansion; and our increased presence in the rapidly growing area of genetics.

It is with the commitment of of our people, and the support of our clinicians and our shareholders that we will meet our Vision 2026 goal of being the most admired reproductive provider in the world.

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Mr Michael Knaap Managing Director & CEO

Annual Report 2022 | 5

ABOUT US YEAR IN REVIEW

CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Financial Overview

Revenue $192.3m ↑ 4.7% on FY21

Underlying EBITDA[ 1,2] $48.1m ↑ 0.8% on FY21

Underlying EBIT[ 1,2]

$33.4m ↓ 5.0% on FY21

FY22 Profit & Loss Overview

	FY22 Proft & Loss Overview
	Underlying ($m) Group Revenue	FY22 192.3	FY21 Restated4 183.6	% Change 4.7%
	Underlying EBITDA1, 2	48.1	47.8	0.8%
	Underlying EBIT1, 2	33.4	35.1	(5.0%)
	Underlying NPAT1, 2, 3 Reported ($m)	22.2	23.3	(4.7%)
	Reported EBITDA1 Depreciation & amortisation	43.2 (14.8)	51.2 (12.6)	(15.6%) 17.5%
	Reported EBIT	28.4	38.7	(26.6%)
	Net fnance costs	(2.1)	(2.5)	(16.0%)
	Reported Proft before tax	26.2	36.2	(27.6%)
	Income tax expense	(7.7)	(10.5)	(26.7%)
	Reported NPAT3	18.5	25.7	(28.0%)

1. Non-IFRS measure

2. Refer to page 26 for reconciliation of Reported EBITDA, EBIT and NPAT to Adjusted EBITDA, EBIT and NPAT

3. NPAT including minority interest

4. 30 June 2021 has been restated due to the IFRS Interpretations committee decision in relation to accounting for Software as a Service

Underlying NPAT[ 5,6,7]

$22.2m

↓ 4.7% on FY21

Reported EBITDA[ 5]

$43.2m

↓ 15.6% on FY21

Reported NPAT[ 7]

$18.5m ↓ 28.0% on FY21

FY22 Cash flow Overview

	FY22 Cash fow Overview
	($m)	FY22	FY21 Restated7	% Change
	Reported EBITDA	43.2	51.2	(15.6%)
	Movement in working capital	(1.5)	0.1	(1600%)
	Income taxes paid	(9.8)	(7.3)	(34.2%)
	Net operating cash fow (post tax)	31.9	44.0	(27.5%)
	Capital expenditure	(11.8)	(10.0)	(18.0%)
	Payments for businesses/minority interest Cash fow from investing activities	(3.4) (15.2)	(1.3) (11.2)	(161.5%) (35.7%)
	Free Cash fow5	16.7	32.8	(49.1%)
	Dividends paid	(16.8)	(13.1)	(28.2%)
	Interest on borrowings6	(0.6)	(0.7)	14.3%
	Payments of lease liabilities	(8.6)	(7.6)	(13.2%)
	Proceeds/(repayment) of borrowings Cash fow from fnancing activities Net cash fow movement	8.4 (17.7) (0.9)	(17.7) (39.1) (6.3)	147.5% 54.7% 85.7%
	Closing cash balance	7.9	8.8	(10.2%)

1. Free Cash Flow is Net Operating cash flow (post-tax) less Cash flow from investing activities

2. Including capitalised bank fees

3. 30 June 2021 has been restated due to IFRS Interpretations Committee decision in relation to accounting for Software as a Service

6 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

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Malik Jainudeen
CHIEF FINANCIAL OFFICER
& COMPANY SECRETARY
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Chief Financial Officer & Company Secretary's Report

Strong domestic IVF business performance in FY2022 as we plan and execute on future growth and see recovery in our ultrasound and international businesses.

Monash IVF Group’s domestic IVF business was a strong performer in a challenging environment, particularly in the 2nd half of FY2022. The domestic IVF business grew its revenue by $5.6m which was achieved from price increases of 2% to 3% across all state based markets and stimulated cycle market share growth in Queensland, South Australia and New South Wales. The Omicron COVID-19 subvariant adversely impacted the IVF business in Q3 whereby the Victorian IVF business was impacted by the temporary suspension of services in January 2022 that had a flow on effect in the following months. Most pleasingly and not withstanding this, the domestic IVF business was able to deliver and perform 9,783 stimulated cycles which was in line with the previous year. EBITDA in the domestic IVF business grew by 12.2% or $5.8m reflecting market share gains and price increases which were partly offset by $1.9m increase in medical malpractice insurance costs and $0.6m increase in labour due to high COVID-19 leave and staff isolation requirements impacting workforce utilisation.

The Ultrasound business had its challenges with Sydney impacted during Q1 when Sydney had elevated levels of COVID-19 whilst both Sydney and Melbourne were impacted by Omicron in Q3. Ultrasound scans declined by 8.0% as a result of Pandemic driven restrictions and capacity constraints. As Pandemic factors reduce, we expect to see improvement in performance which was evident in August 2022.

The International IVF business was also impacted by Pandemic related restrictions whereby stimulated cycles declined by 6.5% driven by volume declines in Kuala Lumpur which was partly offset by activity growth in Johor Bahru. Performance improved in the 2nd half in Kuala Lumpur where stimulated cycles declined by 3% compared to 9% in the first half. The pipeline is showing good signs of improvement in patient consultations suggesting activity growth in FY2023.

Overall, the Group delivered revenue growth of 4.7% whilst underlying EBITDA grew by 0.8% and underlying NPAT declined by 4.7%. Underlying EBITDA margin % in FY2022 was 25.0% and considering the disruptions experienced across the business during the year, the underlying EBITDA and underlying NPAT result was pleasing.

Our cash flow performance during the year was positive as pre-tax conversion of EBITDA to operating cash flow was 97% and free cash flow generation was $16.7m. Capital expenditure for the year was $11.8m which included completion and progress of key new clinic projects including Penrith, Darwin and Singapore IVF clinics. Building works also commenced on key IVF flagship clinics in Melbourne and the Gold Coast which will both include new day hospital revenue streams to complement our IVF businesses and improve patient experience.

The balance sheet is in a strong position to support execution of key growth initiatives including expectations for ~$45m of expenditure in FY23 related to acquisition payments and new IVF clinics. New clinics include completion of flagship clinics in Melbourne, Gold Coast, Brisbane and Bali and we are rolling out embryoscope technology. Following this expenditure, balance sheet capacity remains in-place to deliver on future organic and non-organic growth opportunities that may present. The Syndicated Debt Facility was extended during the year for a further 3 years to December 2024 with net debt of $2.1m at 30 June 2022. In addition, a $40m Accordion Facility is available for capital expenditure and acquisitions.

In closing, we are extremely excited by the growth initiatives in-place and prospects for future growth notwithstanding the current Pandemic environment. I’d like to thank all our stakeholders including employees, doctors and shareholders who collectively enable us to achieve our mission and business objectives.

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Malik Jainudeen Chief Financial Officer & Company Secretary

Annual Report 2022 | 7

YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

ABOUT US

Our Strategy

Vision 2026

continues to provide a clear pathway that enables us to build on our strategic pillars and to consistently achieve operational excellence across the Group.

The Vision 2026 Strategic Planning process conducted last year was extensive and fulsome, providing a clear pathway forward for Monash IVF Group. A year on, a strategic review process confirmed that our Vision 2026 Strategy remains largely unchanged, with only minor changes required in response to significant progress made over the last 12 months and in consideration to environmental/situational impacts.

OUR MISSION

We help bring life to the world.

~~VISION 2026~~

The most admired reproductive care provider in the world.

Best in class fertility solutions, diagnostics, genetics and pathology.

8 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM FY22 FINANCIAL REPORT

~~OUR PILLARS~~

Doctor Patient Scientific Partnerships Experience Leadership People Digital Brand & Engagement Transformation Marketing

International Expansion

Brand & Clinical Marketing Infrastructure

~~OUR OUTCOMES~~

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Engagement Local & International Market Leading Value Creation Patients, Doctors, People, Market Share Success Rates Regulators

OUR PRINCIPLES Care Commitment Communicate Collaborate Create

Annual Report 2022 | 9

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Doctor Partnerships

31 new doctors have joined Monash IVF Group[ 1] in Australia and South-East Asia, setting up a foundation for continued growth into FY23 and beyond.

Monash IVF Group has attracted 31 new doctors to join our teams in Victoria, New South Wales, Queensland, Western Australia, South Australia, Northern Territory and South-East Asia through acquisition, recruitment and our own internal training programs. We now have a total of 146 clinicians working in IVF and Women’s Ultrasound. The highlights for FY22 included Monash IVF establishing its presence in Western Australia with the acquisition of PIVET Medical Centre and its team of 9 clinicians and the opening of a new clinic in Singapore built around 4 experienced IVF Doctors.

Our clinicians, in collaboration with our scientists, have led the way in continuing to improve our success rates year-onyear. This has been achieved through meticulous continuous improvement and implementation of best clinical practice in all of our clinics in Australia and SouthEast Asia. We continue our investment program of installing Time-Lapse incubators across our clinics to improve embryo culture systems, and PIEZO ICSI technology to improve fertilisation rates in our science laboratories.

Our clinicians hold senior academic roles at numerous Universities and Institutes, as well as being active investigators on Medical Research Future Fund (MRFF) and National Health and Medical Research Council (NHMRC) grants, and clinical trial cohort studies. Collectively we remain at the cutting edge of reproductive healthcare.

A special mention also to our clinical and ultrasound teams who led our people to remain open throughout the pandemic to provide critical pregnancy scan services whilst public hospital services were unable to due to COVID response priorities.

A new research governance framework was implemented which includes a primary committee to oversee the introduction of new clinical practices and research at Monash IVF. This committee had its inaugural meeting in FY22 and is independently chaired by Professor Jock Findlay of the Hudson Institute of Medical Research. Through this, the Monash Research and Education Fund (MREF) distributed more than $400K of research grants to projects led by our clinicians, scientists and nurses.

Our Doctor engagement continues to show positive progress in aligning to our doctor value proposition. In FY22 we adjusted our engagement metrics to measure NPS (net promoter score) engagement through our clinicians recommendation as a place to practice and as a place to provide quality service to patients. In 2022 we recorded the highest NPS score, and a score well above industry benchmark in recommending Monash IVF Group to patients in providing quality service. We also retained a higher than industry benchmark NPS for recommending Monash IVF as a place to practice.

Monash IVF Group doctor partnerships are a cornerstone pillar of our strategic vision. We have a very clear strategy to continue to build upon our already elite clinical team by attracting the very best clinicians, both through acquisition and our own CREI training programs. Fundamental to achieving this will be continuing to invest in the very best science and clinical technology to ensure our patients have the best chance of success.

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Monash IVF as a place to practice.
1. July 2021-August 2022
31
new doctors
10 | Monash IVF Group
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FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Patient Experience

Continually focusing on our patient experience

Our patient care teams gain enormous satisfaction knowing they have helped someone start their family. They are also incredibly passionate about ensuring our patients receive the best possible support and affirming care during their treatment. This means they are continually identifying ways to reduce anxiety for our patients, improve the support we provide and remove any pain points or challenges they may experience.

• › Digitised various stages along the patient journey meaning patients can now complete these administrative processes quickly and easily.

• › Launched a new at home pre-carrier genetics test under the leadership of our Medical Director of Genetics, Dr Tristan Hardy. The test allows more patients to undertake critically important genetic testing from the convenience of their home.

• › We now offer holistic, integrated care from genetic testing to counselling, all the way through to fertility treatment options and even ultrasound services so we can support our patients every step of the way.

During FY22 we implemented a variety of initiatives to further evolve and improve our patient experience including:

• › Introduction of a variety of changes to our billing processes to provide greater transparency and understanding of our pricing.

• › Introduced regular nurse webinars to provide additional support to patients and allow them to contact and resolve questions about their treatment with nurses after hours.

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• › To support non native English speaking patients, a variety of key patient documents have been translated into Vietnamese and Mandarin. We continue to provide translation services to ensure that patients understand their treatment plan and journey.

• › To improve the affirming patient experience we provide to our patients, the organisation Pride was engaged to run a series of LGBTIQ+ training for our fertility specialists. We also ran this training for our employees and General Practitioners in the community.

• › Expanded the use of our patient companion handbook.

• › Opened new full service clinics in Darwin and Penrith providing locals access to best in class laboratory and scientific services without the need to travel.

OUR FY22 AVERAGE DOMESTIC PATIENT 66 NPS WAS

Annual Report 2022 | 11Annual Report 2022 | 11

ABOUT US

YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Scientific Leadership

Monash IVF Group invests in innovative technology and research to ensure that we continue to provide market leading success rates for our patients.

In FY22 the GSAC (comprised of the Scientific Director team: A/Prof Deirdre Zander-Fox, A/Prof Hassan Bakos, Dr Daniel Morgan, Dr Leanne Pacella-Ince, A/Prof Mark Green, and Ms Jean Scott) has continued to focus on further improving Monash IVF Group success rates across all our clinics by providing scientific excellence, a commitment to integrate new technologies and the translation of research outcomes to clinical practice.

Key highlights undertaken in FY22 include:

• › Further expansion of Embryoscope+ timelapse technology across the Monash IVF Group, with five additional incubators installed.

• › Successful NATA accreditation and implementation of automated semen analysis at three more Monash IVF Group pathology laboratories across Australia.

• › Initiation of the Monash IVF Group Research and Translation Executive Committee (RTEC) to identify and drive strategic research themes and provide research oversight.

• › Initiation of a multi-centre clinical trial in partnership with Memphasys (ASX: MEM) and the University of Newcastle to investigate the efficacy of a novel sperm separation device (FELIX) to improve fertilisation results and embryo quality and viability.

• › Submission and acceptance of >20 peer-reviewed publications and research abstracts by the GSAC, reinforcing our emphasis on sciencedriven patient care and outcomes.

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12 | Monash IVF Group
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FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

International Expansion

In FY22, Monash IVF Group further expanded in South-East Asia (SEA) building the total portfolio of clinics in the region to 5.

The Group opened a state of the art, full service, premium, highly strategic clinic in Singapore and completed construction of its Bali (Indonesia) clinic. Building on the Group’s highly respected reputation, Monash IVF added seven fertility specialists across its clinics in SEA and currently has a presence in five key cities. As a result of its continued expansion, the Group has a local regional leadership team focusing on critical functions to deliver its industry leading scientific and clinical capabilities and is geared for continued growth. Monash IVF Group is targeting SEA to contribute more than 25% of total Group stimulated cycles by FY2026 (9.9% in FY2022).

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Annual Report 2022 | 13

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

People Engagement

The Group is proud to be recognised in 2022 as one of 11 organisations who were newly awarded the WGEA Employer of Choice citation.

This was an important step for Monash IVF Group as we collaborated with our Diversity and Inclusion Council and together we continued to make good progress on our holistic diversity and inclusion agenda, with a key focus on gender diversity, LGBTIQ+ inclusion and reconciliation.

As we all continued to adjust in new ways of living and working, our people remained our highest priority. Our people engagement strategy focused on our people's health and wellbeing, acknowledging the challenges faced throughout the second year of the COVID 19 pandemic.

Launching of a new intranet platform has enabled the effective sharing of amazing stories across Monash IVF Group which recognises our people's contribution to the Group and allows for great everyday interaction amongst our people.

We continued to review our policies relating to flexible working and supported our teams to continue working in our clinics to meet the needs of our patients. A focus on professional development saw us launch our first inhouse mentoring program.

Our recent employee engagement survey confirmed the passion and pride our people have in our employer brand, which is the key driver in joining the organisation. The top reason for staying with Monash IVF Group was reported as being our commitment to our people demonstrated by career growth opportunities, personal development, relationships with teams and providing meaningful work. We are proud that, despite the challenges faced over the past 12 months, our engagement remains at its highest level and is recognised as a Culture of Success.

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14 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

ESG (Environment, Social & Governance)

Global challenges, such as climate risk, increased regulatory pressures, social and demographic shifts and privacy and data security concerns, represent new or increasing risks for organisations.

Through our existing Corporate Governance policies, our Strategic framework, Quality Policy and Code of Conduct, Monash IVF Group have demonstrated a strong commitment to responsible and ethical conduct.

As we progress our Vision 2026, Monash IVF Group have integrated ESG considerations into our decision making, including the following examples:

• › Improvements to our Clinical Infrastructure consider the environmental impact of our activities including measures such as NABERS (National Australian Built Environment Rating System) and the ability to locally source equipment and furnishings from ethical suppliers.

• › People Engagement activities have seen the establishment of a Diversity & Inclusion Council, tasked to create an affirming environment where staff feel comfortable to bring their whole self to work, and where a sense of belonging is fostered. This further allows Monash IVF Group to incorporate inclusive practices to our Patient Experience and Doctor Partnerships.

• › As we develop the Monash Way through robust Clinical Leadership, the focus on IVF Success Rates and evidence based medicine has been maintained, ensuring the best possible outcomes for our patients.

As this position matures, Monash IVF Group are now formalising and strengthening our approach to sustainability through a structured Environmental, Social and Governance (ESG) framework.

The establishment of an ESG committee, with Board representation, will ensure the implementation of a practical plan, embedded in our daily activities, to achieve tangible and material results. Establishing ESG Metrics ensures that we are creating long term value through strategies that incorporate environmental, social and governance dimensions.

Our evolving plan will consider the 17 Sustainable Development Goals identified by the United Nations and cover all aspects of our:

• › People, including promoting diversity and inclusion and workplace health and safety,

• › Service delivery, including the supply chain, partnerships and waste production and

• › Governance framework, including Corporate Governance, Corporate behaviour and business ethics and Risk Management.

• › Digital Transformation supports a paper-light approach to clinical operations and reduction in corporate travel.

Environmental

› Minimise adverse environmental impact

• › Eliminate use of toxic or hazardous materials

• › Renewable energy and clean technology

ESG Committee & Policy Statement

Social

• › Uphold Universal Declaration of Human Rights

• › Promote equality & diversity

• › Promote well-being and development of employees

• › Ethical supply chain

• › Reduce waste and consider recycling opportunities

Governance

• › Corporate Governance and reporting

• › Corporate Behaviour and business ethics

• › Risk-mitigation and management

Annual Report 2022 | 15

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Digital Transformation

The Hybrid Work Model will continue to be the norm for the next few years and our processes, systems and spaces are being redesigned to reflect the current reality.

We continue to invest in digital transformation to improve both our patient and staff experience. Our corporate and clinical spaces are being retrofitted to provide a smooth hot-desking experience, where staff can seamlessly roam between home, office or clinic where possible. This allows our people to provide patient care from anywhere, at any time.

We are – more than ever – adopting cloud-based solutions to further reduce the number of paper-based forms provided to our patients and to improve our internal processes.

We are focusing on continuing to strengthen our cybersecurity policies to protect our patient records and ensure business continuity in adverse times. We are also building our nextgeneration patient management systems, which will interlink all our business applications, such as our new Customer Relationship Management and Enterprise Resource Planning platforms.

We believe that consolidation on cloud-based platforms and focus on staff/patient experience will be key factors to support our projected business growth in the coming years.

16 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Brand and Marketing

As a purpose led organisation, we believe we have a role to play in creating a societal shift in how people think and behave in relation to their fertility.

Over the past few years our brand and marketing strategy has been focused on challenging societal norms, normalising infertility and assuring people they are not alone.

This year as we celebrate 50+ years in helping bring more than 50,000 babies into the world, we are working towards ensuring that the information and education we offer is affirming and inclusive and supports everyone who hopes to bring a family into the world, regardless of their race, age, gender or sexuality.

In FY22 this focus continued with our new One in Six advertising campaign proving extremely successful in educating people about the prevalence of infertility and driving new patient enquiries and incremental market share growth.

Education and support for GPs and other referring specialists has continued to be a significant focus, including partnering with RACGP to deliver education events across a broad range of fertility topics and conducting LGBTIQ+ training.

We have been thrilled to watch so many of our brave patients who appeared in the campaign go on to have beautiful families.

A greater focus on public relations during the last 12 months also resulted in a significant increase in media stories and showcased the positive role Monash IVF is playing in educating people about their reproductive health.

We continue to support our fertility specialists with various marketing initiatives, including patient and GP events, online content programs, advertising through digital channels and training on social media, public relations and Google reviews.

MARKETING DRIVERS OF GROWTH

› Brand Differentiation › Patient Acquisition › Lifecycle engagement › Marketing Effectiveness

OUTCOMES

Market share increases in the majority of our key markets.

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Annual Report 2022 | 17

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Clinical Infrastructure

Monash IVF Group has continued to invest in best-in-class clinical facilities and technology, setting the foundations for growth.

Monash IVF invested in a number of infrastructure projects over the past financial year. The highlight is the advanced stage build of our Cremorne Unit which will be the flagship of our Melbourne business. This facility will include a fully integrated day hospital and will provide a world class patient experience and leading success rates. We expect to be providing patient treatments from Cremorne in Q323.

Monash IVF also completed construction of two new IVF clinics. Our new Darwin clinic started treating patients in May and we have recently finished our new facility in Penrith, which will service our patients in the Western Sydney suburbs right into the Blue Mountains.

Already in development is our new Gold Coast clinic which will service this rapidly growing region and will also include a 2-theatre day hospital.

A number of other projects are in the design and planning phase and are expected to be completed during the next 12 months. This includes IVF units in Brisbane, Sunshine in Victoria and Albury. Monash IVF Group also has plans to construct ultrasound facilities to meet the growing demands for private scans and NIPT.

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18 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY OUR PILLARS OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

New Treatments

Monash IVF’s mission to help bring life to the world extends beyond treatment for infertility. Our expertise and innovative mindset are essential for navigating new areas of clinical care including genetics, donor treatment and elective fertility preservation.

Our genetics team led by Dr. Tristan Hardy (Medical Director) and Dr. Melody Menezes (Head Genetic Counsellor) continues to develop new approaches to care across the preconception, preimplantation and prenatal periods. In addition to establishing the first at-home genetic carrier screening program by an IVF unit in Australia, the laboratory has successfully undergone assessment by the National Association of Testing Authorities (NATA) to become a fullyfledged Category G Genetics Laboratory.

Preconception care is an emerging area of focus for Monash IVF, and our at-home genetic carrier screening program is a core pillar of this important time period.

Launching in late 2021, our expert team of genetic counsellors and scientists have supported couples and donor recipients to receive information about their reproductive health through our athome genetic carrier screening program. Identifying couples with a high chance of having a child with a significant medical condition allows access to our range of reproductive options including prenatal diagnosis through ultrasound units and preimplantation genetic testing (PGT) through our IVF units.

Donor recipients are another major group supported by the genetic counselling team. Our partnership with Fulgent Genetics to provide this testing allows individualised matching to donor profiles with maximum flexibility and allows them to make informed decisions about their chosen donor.

Our preimplantation genetic testing program continues to have significant growth and has supported couples with a single gene or chromosome condition to undergo treatment, which has been Medicare-supported since November 2021. PGT is a major area of focus in our research program, and we are actively developing new approaches to PGT to better serve our most complex cases, which are increasingly referred to our team for access to our scientific and clinical expertise.

Our non-invasive prenatal testing program continues to be a core service for our ultrasound clinics. Our expertise in this area has been recognised with members of our team being part of the global consortium for expanded NIPT and regularly presenting at national and international scientific meetings.

Advances in genetic testing will continue to deliver benefits to our patients and their families. We are optimistic about the future for genetic testing at Monash IVF and our mission to provide a truly world class experience across all aspects of care.

Annual Report 2022 | 19

ABOUT US

CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

YEAR IN REVIEW

GROWING THE FUTURE

Board of Directors

Mr Richard Davis

Independent Chairman

Mr Josef Czyzewski

Independent Non-executive Director

Mr Neil Broekhuizen

Independent Non-executive Director

Ms Catherine West

Independent Non-executive Director

Mr. Richard Davis joined the Group in June 2014 and is currently serving as a nonexecutive director of ASX listed companies, InvoCare Limited and Australian Vintage Limited (Chairman).

Richard worked for InvoCare for 20 years until 2008. For the majority of that time he held the position of CEO and managed the growth of that business through a number of ownership changes and over 20 acquisitions, including offshore in Singapore.

Prior to InvoCare Limited, Richard worked as an accounting partner of Bird Cameron. Richard holds a Bachelor of Economics from the University of Sydney.

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Mr. Josef Czyzewski joined the Group in June 2014 and has over 30 years of experience in senior finance positions and significant experience in the health industry. Josef has held the positions of CFO at Healthscope Limited, and more recently CFO/ General Manager Strategy and Development at Spotless Group Limited following its takeover by private equity interests in 2012.

Prior to that time, Josef had held various senior finance positions with BHP Billiton including VP Finance and Corporate Treasurer. He holds a Bachelor of Commerce from the University of Newcastle and is a Graduate Member of the Australian Institute of Company Directors.

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Ms Catherine West joined Monash IVF Group in September 2020. She has over 25 years of legal, business affairs and strategy experience in customer focused businesses in the media, entertainment, telecommunications and medical sectors in Australia, the UK and Europe.

Mr. Neil Broekhuizen is the Joint Chief Executive Officer of Ironbridge.

Neil has over 30 years experience in the finance industry, including 28 years in private equity with Investcorp and Bridgepoint in Europe and Ironbridge in Australia.

He has sat on the Ironbridge Investment Committee since inception.

Catherine is a non-executive director of ASX listed companies, Nine Entertainment and Peter Warren Automotive Group. She is a director of the Sydney Breast Cancer Foundation Limited, a director of the National Institute of Dramatic Art (NIDA) and the NIDA Foundation and is Chair of the Board of Governors of Wenona School.

He is the Independent Non-executive Chairman of Bravura Solutions.

Neil is qualified as a Chartered Accountant and holds a BSC (Eng) Honours degree from Imperial College, University of London.

Catherine holds a Bachelor of Laws (Hons) and a Bachelor of Economics from the University of Sydney. She is also a Graduate Member of the Australian Institute of Company Directors.

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20 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Ms Zita Peach

Independent Non-executive Director

Dr Richard Henshaw

Executive Director

Mr Michael Knaap

Managing Director & CEO

Ms Zita Peach has more than 30 years of commercial experience in the pharmaceutical, biotechnology, medical devices and health services industries, and has worked for major industry players such as Fresenius Kabi (Executive Vice President, Asia Pacific), CSL Limited (Vice President, Business Development) and Merck Sharp & Dohme (Commercial Director), the Australian subsidiary of Merck Inc.

Dr Richard Henshaw MD FRANZCOG FRCOG has practiced in the field of reproductive medicine since 1995.

Richard works as a Fertility Specialist for the Group. Richard has served on many national bodies, including RANZCOG Council, the IVF Medical Directors Group of Australia and New Zealand, and the Reproductive Technology Accreditation Committee.

Ms Peach is Chair of Pacific Smiles Group Limited and NonExecutive Director of ASX-listed Starpharma Holdings Limited. Ms Peach is a Fellow of the Australian Institute of Company Directors and a Fellow of the Australian Marketing Institute.

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Mr Michael Knaap was appointed to the role of Chief Executive Officer and Managing Director for Monash IVF Group on 15 April 2019.

Following his tenure as MVF Group's Chief Financial Officer and Company Secretary since August 2015, Michael was appointed to Interim CEO in October 2018.

Mr Knaap has nearly 20 years experience in executive positions with a strong operational, strategic and leadership background. Prior to joining MVF Group, Michael was with Patties Foods Limited where he held a number of executive positions over six years, including the role of Chief Financial Officer and Company Secretary.

He holds a Bachelor of Accounting from Monash University and is a Certified Practicing Accountant.

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Annual Report 2022 | 21

ABOUT US

CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

YEAR IN REVIEW

GROWING THE FUTURE

Management Team

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Fiona Allen Sarah Bollom Nicolette Curtis Denise Donati Tedd Fuell Chief Marketing Officer Regional donor Regional Manager VIC Fertility Solutions Chief Governance & & Surrogacy Manager Queensland Manager Risk Officer

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Anthony Gurney Hamish Hamilton Ben Howat General Manager Chief Operating Officer Regional Manager QLD of SUFW

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Malik Jainudeen Chief Financial Officer & Company Secretary

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Sloane Karlson General Manager Projects

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Jan Lagerwij May Q, Loke Peggy North Asia Managing Director Centre Manager Chief People & Culture KLFGC Officer

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Thierry Panthier Rebecca Redden Chief Information Regional Manager Officer SA & NT

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Prof Luk Rombauts A/Prof Deirdre Zander-Fox Group Medical Director Chief Scientific Officer

22 | Monash IVF Group

FINANCIAL OVERVIEW CFO REPORT

OUR STRATEGY OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Directors’ Report

for the year ended 30 June 2022

The Directors present their report together with the consolidated financial report of Monash IVF Group Limited ('the Group'), being the Company (Monash IVF Group Limited), its subsidiaries, and the Group's interest in associated entities as at and for the year ended 30 June 2022, and the auditor's report thereon.

Directors

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

Mr Richard Davis Mr Josef Czyzewski Ms Catherine West Ms Zita Peach Mr Neil Broekhuizen Dr Richard Henshaw Mr Michael Knaap

Principle activity

The Group is a leader in the field of human fertility services and is one of the leading providers of Assisted Reproductive Services (ARS) which is the most significant component of fertility care in Australia and Malaysia. ARS encompass a range of techniques used to assist patients experiencing infertility to achieve a clinical pregnancy. In addition, the Group is a significant provider of specialised women’s imaging services.

Operational and Financial Review

The Group reported Underlying NPAT of $22.2m[(1)(2)(6)] , as compared to $23.3m in pcp.

$m	FY2022	FY2021 (Restated) (7)	% Change
GroupRevenue	$192.3	$183.6	4.7%
UnderlyingEBITDA(1)(2)	$48.1	$47.8	0.8%
Underlying NPAT(1)(2)(6)	$22.2	$23.3	(4.7%)
ReportedEBITDA(1)(2)	$43.2	$51.2	(15.7%)
ReportedEBIT	$28.4	$38.7	(26.6%)
ReportedNPAT(6)	$18.5	$25.7	(28.0%)
EPS (cents)	4.7	6.5	(27.7%)
DPS (cents)	4.4	4.2	4.8%
	30 June 22	30 June 21
Net Debt(m)(3)	$2.1	($7.1)
Net Debt toEquityratio(4)	0.8%	(2.7%)
Return on Equity (pa.)(5)	8.2%	8.6%

(1) EBITDA and Underlying NPAT are non-IFRS measures

(2) Refer to earnings reconciliation on page 26 for Underlying vs Reported EBITDA, EBIT and NPAT. FY21 Reported EBITDA, EBIT and NPAT includes $5.1m (pre-tax) Job Keeper Subsidies benefit

(3) Debt less cash balances

• (4) Net debt to equity is debt divided by equity

(5) Return on equity is Underlying NPAT for the twelve-month period to 30 June 2022 divided by closing equity

(6) Attributable to ordinary shareholders and non-controlling interest

(7) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service

Annual Report 2022 | 23

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Directors’ Report continued

for the year ended 30 June 2022

Group Underlying Results

The Company delivered solid revenue growth of 4.7% to $192.3m revenue in FY2022. The growth was achieved as a result of domestic IVF business performance that delivered Assisted Reproductive Services (ARS) revenue growth of $5.6m or 3.6% driven by price increases of between 2% to 3% across all domestic IVF markets and market share[(1)] gains in Queensland, New South Wales and South Australia.

The Company achieved FY22 Underlying EBITDA[(3)] of $48.1m and an EBITDA[(3)] margin % of 25%. The domestic IVF business grew EBITDA[(3)] and Margin% which was offset by EBITDA[(3)] and Margin% decline in the Ultrasound and International IVF businesses. The Group experienced increased employee costs due to increased sick and personal leave and lower than usual utilisation of annual leave ($0.9m pretax impact). Performance was further impacted by $2.0m (pre-tax) increase in medical malpractice and directors & officers liability insurance.

Market share gains were achieved due to contribution from new fertility specialists attracted in the previous 12 months and positive investment in creative marketing campaigns. Stimulated cycles[(1)] in FY2022 were in-line with the prior comparative period although impacted by temporary suspension of IVF services in Victoria as a result of the surge in Omicron COVID-19 sub-variant during Q3FY2022. Omicron has had varied treatment deferral impact on all domestic IVF markets.

Implications of COVID-19 related lockdowns and penetration of COVID-19 cases has had a significant impact on our ultrasound clinics from a capacity, efficiency and short-term demand perspective. FY22 ultrasound scan volumes declined by 8% to 85,327, compared to FY21 and non-invasive pre-natal testing declined by 7% to 14,789. Patient activity reduced as a result of restrictions on elective surgery in Melbourne, staff shortages caused by high levels of sick and personal leave ($0.3m pre-tax impact) resulting in room/clinic closures, lower room capacity per day and patient hesitation to attend clinical settings.

The Company’s South-East Asian (SEA) expansion strategy continued during FY22 with the opening of a new Singapore IVF clinic that opened in May 2022 with four fertility specialists and is expected to perform approximately 200 stimulated cycles in the next twelve months. The Johor Bahru IVF clinic in Malaysia which was acquired during FY20 has returned to profitability in 2H22 following the re-opening of the international border between Singapore and eastern Malaysia. Investment and construction of an IVF clinic in Bali, Indonesia commenced in late FY22 and as a result, MVF will have five IVF clinics in SEA.

The Kuala Lumpur IVF clinic is showing signs of improvement as new patient consultations in 2H22 increased by 24% compared to the prior corresponding period. Stimulated Cycles in FY22 declined by 14% compared to FY21 but remained 5% above FY20 as the Malaysia economy is gradually recovering from COVID-19 restrictions and uncertainty whilst certain key industries continue to be impacted (tourism, gas and oil).

Underlying NPAT[(3)(4)] was $22.2m, ahead of the May 2022 Trading Update and $1.1m or 5% below pcp. Reported NPAT included a small number of underlying adjustments including non-organic acquisition costs, commissioning costs for new premises yet to commence operations and acquisition earn-out adjustments in accordance with AASB3. The effective tax rate for the year was 29.4% reflecting the 30% Australian corporate tax rate and Asian corporate tax rate that is between 17% and 24%.

(1) MBS items 13200/1

(2) MBS item 13202

(3) Underlying EBITDA and NPAT are non-IFRS measures

• (4) NPAT including minority interest

24 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Directors’ Report continued

for the year ended 30 June 2022

Segment analysis

		Australia			International	International
$m	FY2022	FY2021 (Restated)(3)	% change	FY2022	FY2021	% change
Revenue	182.1	172.9	5.3%	10.2	10.7	(4.7%)
UnderlyingEBIT(1)(2)(4)	30.6	31.5	(2.9%)	2.8	3.6	(22.2%)
Underlying NPAT(1)(2)(4)	20.2	20.8	(2.9%)	2.0	2.7	(25.9%)
ReportedNPAT	17.0	23.0	(26.1%)	1.5	2.7	(44.4%)

Australia

Australia revenue increased by $9.2m or 5.3% to $182.1m due to the following: $5.6m Domestic ARS revenue growth ($4.8m from 2-3% price increases across all domestic markets and $0.8m growth from market share gains in QLD, SA and NSW, partially offset by market share decline in VIC); $5.0m Day Surgery & Other revenue growth including volume growth in Sydney CBD, genetics income growth and revenue recognised for insurance recovery relating to Ni-PGT; partially offset by $1.4m decrease in revenue from Ultrasound business.

The Australia CGU achieved FY22 Underlying EBIT of $30.6m. The domestic IVF business was solid in growing EBIT and Margin% which was offset by EBIT and Margin% decline in the Ultrasound business due to disruptions from COVID-19 and influenza.

International

The International segment comprises of the Kuala Lumpur, Johor Bahru clinics and Singapore clinic which opened in May 2022. International Revenue decreased by $0.5m or 4.7% to $10.2m and stimulated cycles declined by 6.5% compared to pcp, due to weak macroeconomic conditions in Kuala Lumpur following COVID-19 restrictions, partially offset by positive volume contribution from the Johor Bahru. Underlying EBIT declined by $0.8m or 22.2% to $2.8m compared to pcp and Underlying NPAT declined by $0.7m or 25.9% to $2.0m compared to pcp.

(1) Non-IFRS measures

(2) Refer to earnings reconciliation on page 26 for Underlying vs Reported EBITDA, EBIT and NPAT

(3) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service.

(4) 30 June 2021 amounts have been restated due to business development and related costs relating to Asia, previously reported as part of the Australian segment. In FY22, these amounts have been reported as part of the individual segment, and the FY21 segment results reflect the reclassification of costs amounting to $583,311 from Australia.

Annual Report 2022 | 25

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Directors’ Report continued

for the year ended 30 June 2022

Earnings reconciliation

The table below provides a reconciliation of FY2022 Underlying EBIT and NPAT to the reported statutory metrics:

$m	EBITDA	EBIT	NPAT
Reported Statutory	**43.2 **	**28.4 **	18.5
Acquisition transactioncosts	2.1	2.1	1.5
Commissioning costs	2.5	2.5	2.2
Acquisition Earn-out fairvalue adjustment	0.4	0.4	0.4
Underlying	48.1	33.4	22.2

A total of $5.0m in pre-tax items are included in the reconciliation of Reported Statutory to Underlying, which fall under three main categories.

$2.1m relates to pre-tax acquisition related transaction costs including PIVET Medical Centre and ART Associates Queensland No.2 acquisitions. In addition, this includes further domestic and international business acquisitions that were pursued but discontinued.

$2.5m relates to pre-tax commissioning costs for new fertility clinics and day hospitals in Melbourne, Penrith, Gold Coast, Darwin and Singapore, including lease expenditure under IFRS 16 lease accounting.

$0.4m relates to an increase to AASB3 Business Combinations earn-out provision for increase to estimated purchase price payments to Fertility Solutions vendors as a result of stronger than anticipated performance during 1H22. Earn-out period ends at 30 June 2023.

FY21 included non-regular items that increased Reported EBITDA, EBIT and NPAT by $3.6m pre-tax and $$2.2m post-tax. FY21 pre-tax non-regular items related to $5.1m Job Keeper Subsidy benefit offset by $0.8m Sydney CBD fertility clinic commissioning costs and $0.7m earn-out fair value adjustment.

26 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Directors’ Report continued

for the year ended 30 June 2022

Statement of Financial Position and Capital Metrics

Balance Sheet $m	30 June 22	30 June 21 Restated(6)	% change
Cash and cash equivalents	7.9	8.8	(10.2%)
Othercurrentassets	17.7	13.7	29.2%
Current leaseliabilities	(7.1)	(5.8)	22.4%
Currentborrowings	-	(1.6)	(100.0%)
OtherCurrent liabilities	(31.0)	(33.6)	(7.7%)
Net working capital	(12.5)	(18.5)	(32.5%)
Borrowings	(9.8)	-	100.0%
Goodwill&Intangibles	258.9	259.3	(0.2%)
Rightofuse assets	64.7	42.4	52.6%
Lease liabilities	(60.3)	(38.5)	56.6%
Plant&Equipment	30.4	25.0	21.6%
Other assets/(liabilities)	(1.5)	(1.3)	15.4%
Net assets	**269.9 **	**268.4 **	0.6%
Capital Metrics	30 June 22	30 June 21 Restated(6)	+/-
Net Debt($m)(1)	2.1	(7.1)	9.2
Leverage Ratio(Net Debt/EBITDA(2)**) **	0.05x	(0.18x)	0.23x
Interest Cover(EBITDA(2) /Interest)	113.2x	55.7x	57.5x
Net Debt to EquityRatio(3)	0.8%	(2.7%)	3.5%
Return on Equity(4)	8.2%	8.6%	(0.4%)
Return on Assets(5)	5.8%	6.6%	(0.8%)

(1) Net debt is debt less cash balances (excluding capitalised bank fees)

(2) EBITDA is based on normalized EBITDA excluding AASB16 lease impact for covenant purposes as defined in the Syndicated Debt Facility Agreement. EBITDA is not an IFRS measure

(3) Net debt divided by equity at the balance date

(4) NPAT for the previous 12-month period divided by closing equity at the balance date

(5) NPAT for the previous 12-month period divided by closing assets at the balance date

(6) 30 June 2021 amounts have been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service.

Balance Sheet continues to be in a strong position with minimal Net Debt and supports the Company’s aggressive new clinical infrastructure commitments and plans in Melbourne, Gold Coast and Bali which complements completed infrastructure projects in Penrith, Darwin and Singapore. Anticipated capital expenditure in FY23 is ~$30m and committed acquisitions payments is expected to be ~$15m. Since April 2020 and to end of FY2023, the April 2020 Equity Raising enabled on-going trading during disruption caused by the Pandemic and also supports uninterrupted planned growth investments of ~$70m.

The $40m Syndicated Debt Facility was extended by 3 years to December 2024 and ability to raise further debt remains strong considering the strength of earnings and available headroom in key banking covenants. The key Net Leverage Ratio is 0.05x which is well within the 3.5x covenant requirement. The Interest Cover Ratio is 113.2x and well above the 3.0x covenant requirement.

Annual Report 2022 | 27

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Directors’ Report continued

for the year ended 30 June 2022

Statement of Cash Flows

Cash Flows $m	FY2022	FY2021 Restated(2)	Change %
EBITDA(1)(3)	43.2	51.2	(15.6%)
Movement in workingcapital	(1.5)	0.1	(1600.0%)
Income taxespaid	(9.8)	(7.3)	(34.2%)
Net operating cash flows(post-tax)	**31.9 **	**44.0 **	(27.5%)
Capitalexpenditure	(11.8)	(10.0)	(18.0%)
Payments for businesses	(3.4)	(1.3)	(161.5%)
Cash flows used in investing activities	(15.2)	(11.2)	(35.7%)
Free Cash flow(1)	16.7	32.8	(49.1%)
Dividends paid	(16.8)	(13.1)	(28.2%)
Interestonborrowings	(0.6)	(0.7)	14.3%
Payments of leaseliabilities	(8.6)	(7.6)	(13.2%)
Proceeds/(Repayment)of borrowings	8.4	(17.7)	147.5%
Cash flows used in financing activities	(17.7)	(39.1)	55.0%
Net cash flow movement	(0.9)	(6.3)	85.7%
Closing cash balance	7.9	8.8	(10.2%)

Free cash flow for FY22 was $16.7m with conversion of EBITDA to pre-tax operating cash flows of 97% compared to 100% in the prior comparative period. Capital expenditure for FY22 was $11.8m which included the new Penrith, Darwin and Singapore IVF clinics and building works commenced for the new Melbourne and Gold Coast IVF clinics which will include day hospital services. Payments for businesses included $1.3m in Fertility Solutions earn-out payments related to FY22 performance and $2.1m of acquisition transaction payments for executed and discontinued acquisitions during FY22.

Total dividend payments during FY22 comprised of the final FY21 fully franked dividend and the interim FY22 fully franked dividend. Payments of lease liabilities increased by $1.0m driven primarily by lease payments for new facilities including Melbourne, Penrith, Darwin and Singapore.

(1) EBITDA and Free Cash Flow are non-IFRS measures

(2) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service.

(3) FY21 EBITDA includes $5.1m Job Keeper Subsidy benefit

28 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM FY22 FINANCIAL REPORT

Directors’ Report continued

for the year ended 30 June 2022

Dividends

On 26 August 2022, a fully franked final FY2022 dividend of 2.2 cents per share was declared. The record date for the dividend is 9 September 2022 and the payment date for the dividend is 7 October 2022.

Commitments & Contingencies

As announced to the ASX on 23 December 2020, Monash IVF Group became aware that it and certain of its subsidiaries have been named as defendants in proceedings filed in the Supreme Court of Victoria in relation to, or in connection with, the Group’s non-invasive pre-implantation genetic screening technology (Ni-PGT or cell-free PGT-A). The proceedings filed makes a series of allegations against Monash IVF Group in relation to the Ni-PGT testing including those patients who had embryos classified as aneuploid as a result of Ni-PGT testing may have had embryos destroyed or did not proceed to embryo transfer. Ni-PGT testing was suspended in October 2020.

The Group has filed the defence in accordance with the Court’s directions. The Group has notified its insurers of the claim. The Group has provided for associated costs expected to be incurred in defending the claim. The claim does not specify an amount of damages and it is not currently possible to determine the ultimate impact of this claim, if any, on the Group.

Outlook

Whilst the ongoing COVID-19 Pandemic and macro uncertainty created volatility in the Australian IVF market in 2H22, the favourable underlying demand dynamics are unchanged. Advanced maternal age and access to broader service offerings (including donor, egg freezing and genetics) are expected to underpin long-term industry growth. The recent short-term weakness in the market is largely attributable to patients being forced to delay treatment post infection with COVID-19 or influenza, hesitancy to access healthcare services and macroeconomic uncertainty; with some uncertainty around how long this market disruption will continue for.

In FY2022, MVF made significant investments in future growth including recent acquisitions, attraction of new fertility specialists and further expansion into South East Asia. In addition, further ~$45m of capital expenditure investment and acquisition payments are anticipated to be made during FY2023 that will continue to drive future growth and improve service delivery.

The recent acquisitions of PIVET Medical Centre and ART Associates Queensland are expected to complete by end of September 2022 and will contribute to earnings growth in FY2023. Accordingly, subject to further adverse impact from the on-going Pandemic, we anticipate FY2023 Underlying[1] Net Profit After Tax to grow in-excess of 10% compared to FY2022.

(1) Underlying excludes certain non-regular items relating to acquisition costs, new clinic commissioning costs and AASB3 fair value adjustment

Annual Report 2022 | 29

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

GROWING THE FUTURE

Directors’ Report continued

for the year ended 30 June 2022

Business Strategies and Prospects for Future Financial Years

Monash IVF Group’s mission is to help bring life to the World by providing Best-in-Class fertility solutions to all, including diagnostics, genetics and pathology. This is supported by our Vision to be the most admired fertility solutions provider in the world by Patients, Doctors, our People and other industry stakeholders. Our Mission and Vision will be delivered through Our Pillars as illustrated below:

==> picture [433 x 232] intentionally omitted <==

Our Pillars are defined as follows below:

Patient experience - We are committed to providing best in class clinical care across the fertility and pregnancy journey; delivering through a patient experience that is empathetic, empowering and personalised.

Doctor partnership - We will develop mutually beneficial long term partnerships with our Doctors that benefits our patients through excellence in clinical care and to drive growth in our Doctors’ businesses.

Scientific leadership - Our focus in world-class research and science will deliver market leading success rates, innovative services and attract partnership opportunities.

Clinical infrastructure – Provide high quality, fit-for-purpose infrastructure to support our best in class offering through investing in new and existing facilities and businesses.

People engagement - Through passion, pride and capability our People are leading the way in helping bring life to the world.

Brand & marketing – Our brand and marketing conveys our leadership in reproductive health and develops strong brand salience through progressive, empathetic and empowering engagement with the Community, Patients and our People.

Digital transformation – Investing in next generation technology, platforms and systems to enhance interactions with our Patients, Doctors and People. Grow and diversify revenue streams through enhanced digital capabilities and partnerships.

International expansion - Export our expertise in fertility services to Asia and beyond through effective partnerships.

Our Pillars will drive achievement of Our Outcomes to Engage with our Key Stakeholders, continually improve our Patient outcomes, grow our market share and create value for our Key Stakeholders including Patients, Doctors, People and Shareholders.

30 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Directors’ Report continued

for the year ended 30 June 2022

Business risks

The Monash IVF Group continually considers the benefits of implementing a risk management framework, all of which contributes to the increased likelihood that the Group will be able to achieve its organisational objectives. Accordingly, the Group has a risk management framework and has implemented systematic processes for:

• Better identification of opportunities and threats;

• Prevention of potential risks from being realised;

• Reduction of the element of chance;

• Increased accountability and transparency for decisions;

• More effective allocation and use of resources;

• Improved incident management and reduction in loss and the cost of risk;

• Improved stakeholder confidence and trust;

• Improved compliance with relevant legislation and accreditation processes;

• Proactive rather than reactive management;

• Enhanced governance.

The risk management framework together with the risk assessments and mitigation strategies are regularly reviewed both individually and collectively by the Executive Team, the Audit and Risk Committee and the Board. A simple prioritisation system has been adopted to scale the relative importance of all the identified risks. From review of the Group’s key business, operational and financial risks, processes are in-place to reduce the inherent nature of these risks to an acceptable and manageable level. This includes high inherent risk presented by the COVID-19 Pandemic and is a key priority when managing risk. The Group considers the below as important risks that require continued management to ensure the Group meets its objectives.

COVID-19 Pandemic

COVID-19 and the risk of transmission of infection may impact Monash IVF’s operations in Australia and South-East Asia through the imposition of government and regulatory requirements (which can change over time), including suspension of elective surgery, recommendations to postpone treatment where possible and the need for social distancing impacting staff movement within the partner healthcare system and patient willingness to access services. Monash IVF is continually working with industry bodies, regulators and governments to understand and shape regulatory positions but these positions and related actions can impact Monash IVF operations in the future. Economic conditions during and post the Pandemic may adversely impact financial performance and market position. In addition, Monash IVF employees may come into close proximity with patients and other members of the public during the course of business, increasing risk of transmission and impact on workforce. While protocols have been established and are effective in responding to the risk of transmission, the workforce may be infected with COVID-19 or influenza resulting in disruption of operations and services whilst they are isolating and/or recovering.

Relationships with People in key roles, including clinicians

The relationships between Monash IVF Group, its People and Clinicians are key to our recruitment and retention strategies, ability to grow the businesses and replacement of retiring clinicians. The loss or disengagement of Clinicians or inability to attract new Clinicians to the organisation would likely impact the revenue and profitability of the organisation.

Annual Report 2022 | 31

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Directors’ Report continued

for the year ended 30 June 2022

Business risks (continued)

There are similar risks to the organisation relating to the departure or disengagement of the Executive and Leadership Teams and People in key roles, defined by regulatory requirements. Comprehensive training and development programs, competitive remuneration frameworks, commitment to patient centred care and opportunities to participate in world class research activities all contribute to attracting and retaining the very best talent in the Industry.

Change in Government funding arrangements for Assisted Reproductive Services

There is a risk that the Commonwealth Government will change the funding (including levels, conditions or eligibility requirements) it provides for Assisted Reproductive Services (ARS). Patients receive partial re-imbursement for ARS treatment through Commonwealth Government Programs, including the Medicare Benefit Schedule (MBS) and Extended Medicare Safety Net (EMSN). If the level of reimbursement were to be reduced or capped, Patients would face higher out-of-pocket expenses for ARS potentially reducing the demand for services provided by the Group. The Group is not aware of any changes to Commonwealth Government funding for ARS in the short to medium term.

Risk of increased competition

In each of the markets the Group operates in, there is a risk that:

• Existing competitors may undertake aggressive marketing and Patient acquisition campaigns, product innovation or price discounting;

• New market entrants may participate in the Sector and gain market share;

• Further growth in low cost offerings provided by competitors may reduce the Group’s market share;

• An increase in publicly provided ARS services may reduce the Group’s market share.

The Group continues to strategically position its ARS service as a specialised premium offering as a point of differentiation against low cost competitors. In addition, the Group has previously partnered with State based governments in the provision of publicly provided ARS services and will look to continue to partner with governments to provide greater access to ARS services to the community.

Occupational Health and Safety

Monash IVF employees are at risk of workplace accidents and incidents. In the event that a Monash IVF employee is injured in the course of their employment, Monash IVF may be liable for penalties or damages. This has the potential to harm both the reputation and financial performance of Monash IVF.

32 | Monash IVF Group

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CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Directors’ Report continued

for the year ended 30 June 2022

Information on Directors

Director	Experience
Mr Richard Davis Independent Chairman Member of Audit & Risk Management Committee Member of Remuneration & Nomination Committee	Mr. Richard Davis joined the Group in June 2014 and is currently serving as a non-executive director of ASX listed companies, InvoCare Limited and Australian Vintage Limited (Chairman). Richard worked for InvoCare for 20 years until 2008. For the majority of that time he held the position of CEO and managed the growth of that business through a number of ownership changes and over 20 acquisitions, including offshore in Singapore. Prior to InvoCare Limited, Richard worked as an accounting partner of Bird Cameron. Richard holds a Bachelor of Economics from the University of Sydney.
Mr Josef Czyzewski Independent Non-executive Director Chair of Audit & Risk Management Committee Member of Remuneration & Nomination Committee	Mr. Josef Czyzewski joined the Group in June 2014 and has over 30 years of experience in senior finance positions and significant experience in the health industry. Josef has held the positions of CFO at Healthscope Limited, and more recently CFO/General Manager Strategy and Development at Spotless Group Limited following its takeover by private equity interests in 2012. Prior to that time, Josef had held various senior finance positions with BHP Billiton including VP Finance and Corporate Treasurer. He holds a Bachelor of Commerce from the University of Newcastle and is a Graduate Member of the Australian Institute of Company Directors.
Mr Neil Broekhuizen Independent Non-executive Director Member of Audit & Risk Management Committee	Mr. Neil Broekhuizen is the Joint Chief Executive Officer of Ironbridge. Neil has over 30 years experience in the finance industry, including 28 years in private equity with Investcorp and Bridgepoint in Europe and Ironbridge in Australia. He has sat on the Ironbridge Investment Committee since inception. He is the Independent Non-executive Chairman of Bravura Solutions. Neil is qualified as a Chartered Accountant and holds a BSC (Eng) Honours degree from Imperial College, Universityof London.
Dr Richard Henshaw Executive Director	Dr Richard Henshaw MD FRANZCOG FRCOG has practiced in the field of reproductive medicine since 1995. Richard works as a Fertility Specialist for the Group. Richard has served on many national bodies, including RANZCOG Council, the IVF Medical Directors Group of Australia and New Zealand, and the Reproductive Technology Accreditation Committee.

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Directors’ Report continued for the year ended 30 June 2022

Director	Experience
Ms Catherine West Independent Non-executive Director Member of Remuneration & Nomination Committee	Ms Catherine West was appointed Non-executive Director to Monash IVF Group on 8 September 2020. She is an experienced ASX listed non-executive director and has over 25 years of legal, business affairs and strategy experience in customer focused businesses in the media, entertainment, telecommunications and medical sectors in Australia, the UK and Europe. Catherine is a non-executive director of ASX listed Nine Entertainment where she is Chair of the People and Remuneration Committee and a member of the Audit and Risk Committee. Catherine is also a non-executive director of Peter Warren Automotive Group where she is also Chair of the People and Remuneration Committee and a member of the Audit and Risk Committee. In addition, she is a director of the Sydney Breast Cancer Foundation Limited, a director of the NIDA Foundation, the National Institute of Dramatic Art and a Chair of the Board of Governors of Wenona School. She was previously on the Board of Southern Phone, a reginal telecommunications company, before its successful sale to AGL. Catherine was also on the Board of ASX listed Endeavour Group until April 2021. Catherine is also a consultant to the healthcare sector and to media companies internationally. Catherine holds a Bachelor of Laws (Hons) and a Bachelor of Economics from the University of Sydney. She is also a Graduate Member of the Australian Institute of Company Directors.
Ms Zita Peach Independent Non-executive Director Chair of Remuneration & Nomination Committee	Ms Zita Peach has more than 25 years of commercial experience in the pharmaceutical, biotechnology, medical devices and health services industries, and has worked for major industry players such as CSL Limited and Merck Sharp & Dohme, the Australian subsidiary of Merck Inc. Zita’s most recent executive position is Managing Director for Australia and New Zealand and Executive Vice President, South Asia Pacific for Fresenius Kabi, a leading provider of pharmaceutical products and medical devices to hospitals. Previously, Zita was Vice President, Business Development, for CSL Limited, a position she held for 10 years. Ms Peach currently serves on the Boards of ASX listed companies, Pacific Smiles Group Limited (Chair) and Starpharma Holdings Limited (Non-Executive Director). Ms Peach is a Fellow of the Australian Institute of Company Directors and a Fellow of the Australian Marketing Institute.

34 | Monash IVF Group

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CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Directors’ Report continued

for the year ended 30 June 2022

Director

Experience

Mr Michael Knaap Chief Executive Officer Managing Director

Mr Michael Knaap was appointed to the role of Chief Executive Officer and Managing Director for Monash IVF Group on 15 April 2019. Following his tenure as MVF Group’s Chief Financial Officer and Company Secretary since August 2015, Michael was appointed to Interim CEO in October 2018. Mr Knaap has nearly 30 years experience in executive positions with a strong financial, operational, strategic and leadership background in Healthcare and FMCG industries. Prior to joining MVF Group, Michael was with Patties Foods Limited where he held a number of executive positions over six years, including the role of Chief Financial Officer and Company Secretary. He holds a Bachelor of Accounting from Monash University and is a Certified Practicing Accountant.

Company Secretary

Mr Malik Jainudeen was appointed to the role of Monash IVF Group Chief Financial Officer and Company Secretary on 15 April 2019.

Malik joined Monash IVF Group in 2014 as a senior finance leader and has continued to progress his career with Monash IVF Group. Malik has more than 18 years experience in the finance sector including 10 years at KPMG as a Manager in Audit and Assurance where his client portfolio included ASX listed organisations Origin Energy Limited, AusNet Services and Dulux Group Limited. Malik was also the External Audit Manager for the Monash IVF Group for 6 years prior to its listing on the ASX in 2014.

Director Meetings

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

Member	Attended	EligibletoAttend
Mr Richard Davis(Chair)	21	21
MrJosefCzyzewski	21	21
Ms Catherine West	21	21
MsZitaPeach	21	21
MrNeil Broekhuizen	19	21
Dr Richard Henshaw	19	21
Mr.Michael Knaap	21	21

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Directors’ Report continued

for the year ended 30 June 2022

Committee meetings

	ARC	ARC	REM	REM
Member	Attended	Held	Attended	Held
Mr Richard Davis	4	4	5	5
MrJosefCzyzewski(ARC Chair)	4	4	5	5
Ms Zita Peach(REM Chair)	-	-	5	5
MsCatherine West	-	-	5	5
MrNeil Broekhuizen	3	4	-	-

Matters subsequent to the end of the financial year

On 18 May 2022, Monash IVF Group Limited announced entry into a binding sale agreement for the acquisition of PIVET Medical Centre (“PIVET”) which is a Perth, Western Australia and Cairns, Queensland provider of fertility services and has nine fertility specialists. Monash IVF is acquiring PIVET by way of an asset sale and purchase for initial up-front cash consideration of $9.4 million on a debt free basis, with the potential of additional earn out payments over a one to two year period from completion. The financial effects of this transaction has not be recognised at 30 June 2022. The operating results and assets and liabilities of the acquired Business will be consolidated from the completion date expected to be during FY2023, subject to certain conditions precedent.

On 1 July 2022, Monash IVF Group Limited announced the acquisition of ART Associates Queensland No.2 Pty Ltd (ART Associates Queensland) in Brisbane, Queensland. Monash IVF is acquiring ART Associates Queensland by way of an asset sale and purchase for initial cash consideration of $3.9m on a debt free basis, with the potential of additional earn out payments over a five to seven year period from completion. The financial effects of this transaction has not be recognised at 30 June 2022. The operating results and assets and liabilities of the acquired Business will be consolidated from the completion date expected to be during FY2023, subject to certain conditions precedent.

On 26 August 2022, a fully franked dividend of 2.2 cents per share was declared. The record date for the dividend is 9 September 2022 and the payment date for the dividend is 7 October 2022.

Except as disclosed 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 or 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 periods.

Environmental, Social and Governance

Global challenges, such as climate risk, increased regulatory pressures, social and demographic shifts and privacy and data security concerns, represent new or increasing risks for organisations.

Through our existing Corporate Governance policies, our Strategic framework, Quality Policy and Code of Conduct, Monash IVF Group has demonstrated a strong commitment to responsible and ethical conduct.

As we progress our Vision 2026, Monash IVF Group has integrated ESG considerations into its decision making, including the following examples:

36 | Monash IVF Group

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OUR STRATEGY OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Directors’ Report continued

for the year ended 30 June 2022

Environmental, Social and Governance (continued)

• Improvements to our Clinical Infrastructure consider the environmental impact of our activities including measures such as NABERS (National Australian Built Environment Rating System) and the ability to locally source equipment and furnishings from ethical suppliers;

• People Engagement activities have seen the establishment of a Diversity & Inclusion Council, tasked to create an affirming environment where staff feel comfortable to bring their whole self to work, and where a sense of belonging is fostered. This further allows Monash IVF Group to incorporate inclusive practices to our Patient Experience and Doctor Partnerships;

• As we develop the Monash Way through robust Clinical Leadership, the focus on ART Success Rates and evidence based medicine has been maintained, ensuring the best possible outcomes for our Patients;

• Digital Transformation supports a paper-light approach to clinical operations and reduction in corporate travel.

As this position matures, Monash IVF Group are now formalising and strengthening its approach to sustainability through a structured Environmental, Social and Governance (ESG) framework.

The establishment of an ESG committee, with Board representation, will ensure the implementation of a practical plan, embedded in our daily activities, to achieve tangible and material results. Establishing ESG Metrics ensures that we are creating long term value through strategies that incorporate environmental, social and governance dimensions.

Our evolving plan will consider the 17 Sustainable Development Goals identified by the United Nations and cover all aspects of our:

• People, including promoting diversity and inclusion and workplace health and safety;

• Service delivery, including the supply chain, partnerships and waste production and;

• Governance framework, including Corporate Governance, Corporate behaviour and business ethics and Risk Management.

Environmental regulations

The Group is not subject to any significant environmental regulations under Commonwealth or State legislation.

Likely developments

The Group remains committed, prudent and focused on profitably growing the Business through leveraging its scientific capabilities and scale across the clinic network both domestically and internationally.

Indemnification and insurance of officers and auditors

Since the end of the previous financial period, the Group has not indemnified or made a relevant agreement for indemnifying against a liability any person who is or has been an officer or auditor of the Group.

Annual Report 2022 | 37

ABOUT US YEAR IN REVIEW CHAIRMAN’S AND MANAGING DIRECTOR & CEO’S REPORT

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Remuneration Report (Audited)

for the year ended 30 June 2022

The Company’s Directors present the 2022 Remuneration Report prepared in accordance with Section 300A of the Corporations Act 2001 , for the Company and the Group for the year ending 30 June 2022 (“FY22”). The information provided in this Remuneration Report has been audited by KPMG as required by Section 308(3C) of the Corporations Act 2001 . The Remuneration Report forms part of the Directors’ Report.

The Remuneration Report outlines the remuneration strategies and arrangements for the Key Management Personnel (Executive KMP) who have authority and responsibility for planning, directing and controlling the activities of Monash IVF Group.

FY22 Highlights

FY22 marked another year of unpredictability yet once again, our People demonstrated notable resilience through the continued disruptions of the Pandemic. Our teams were faced with higher than usual absenteeism as our workforce responded to the department of health requirements to isolate if themselves or members of their family became unwell with COVID-19. Our teams applied significant flexibility to adapt to short term changes in our labour workforce. Despite this, across all Monash IVF Group locations, our People addressed the challenges they faced, adapting to the demands of COVID-19 and maintaining our priority of delivering quality patient care, supporting families, community and of course each other. This continued as we faced particularly demanding circumstances.

During FY22, our Vision 2026 strategic priorities and growth opportunities have made positive progress. Investment and growth opportunities have significantly advanced. This includes growing our capabilities to ensure we are well placed to deliver on our strategic pillars.

Despite the disruption that the Pandemic has placed on the Group, our Executive leadership team continue to drive a focus on our purpose and direction which has been a key priority throughout FY22 and continuing into FY23. The strength and continuity of the Executive team continues to be a priority for the Group, with no changes to KMP or Directors in FY22. The alignment of our remuneration structure to support the achievement of Vision 2026 and our approach to remuneration reflects the focus on outcomes that support the long-term sustainability of Monash IVF Group, value creation for Monash IVF Group’s key stakeholders, attraction and retention of our People and ultimately, helping our patients start or grow their family.

Linking remuneration outcomes with performance

In FY22 whilst having regard to the Group’s performance during FY21 and FY22, the following remuneration outcomes occurred in FY22:

• As highlighted in 2021 annual report, maximum remuneration (fixed and at-risk remuneration combined) for Executive KMP was adjusted following completion of a benchmarking process to comparable peers. The Board entered into the external benchmarking process to be informed on Executive remuneration at the time. This benchmarking considered organisations of comparable size and supported an outcome that total remuneration sat below industry benchmark (including roles and performance metrics). In FY22, the Board agreed to increase the total remuneration for the CEO, CFO and COO over time to bring these closer to comparable peers. Any adjustments to the CEO, CFO and COO maximum remuneration remains at or below the industry benchmark and supports internal promotions whilst ensuring Executive KMP are retained and appropriately incentivised to continue to deliver the Vision 2026 business strategy. Further adjustments may be considered and applied to the at-risk component to ensure greater comparability to peers. In FY23 the Total Fixed Remuneration for CEO, CFO and COO was 3% with adjustments to increase the At Risk component for the CEO to a maximum potential by15% (combined STI and LTI) and 10% for CFO and COO (combined STI & LTI).

• The FY22 STI gateway was achieved, being Scientific Success Rates. This measure continues to be most critical focus of the organisation and will remain as a STI gateway. The STI financial component was well below target with full year financial targets not achieved for Executive KMP, reflecting 2H22 financial outcomes impacted by the Pandemic disruption and unpredictable operating environment, whilst some non-financial measures were achieved between threshold and target.

38 | Monash IVF Group

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Remuneration Report (Audited) continued

for the year ended 30 June 2022

• The Earning Per Share (EPS) component of the FY2020 Performance Rights granted did not vest at 30 June 2020 due to performance in FY22.

• The Total Shareholder Return (TSR) on the FY19 Performance Rights granted did not vest during FY22 whilst the TSR component of the FY20 Performance Rights granted will be tested in September 2022.

• Following a review of the Incentive Plan structure, the FY23 plan will see a change to the LTI Plan which includes the Relative TSR peer group of ASX 300 Healthcare to exclude CSL. The STI plan for FY23 will include the opportunity for reward where performance exceeds target. A stretch target for financial measures being 110% aligned to a further 10% STI available.

Non-Executive Director remuneration arrangements in FY2022

Fees payable to Non-Executive Directors were reviewed regarding fee adjustments effective 1 July 2022 and 3% increase was applied to Director base or Committee fees. This increase is inclusive of the 0.5% increase to Superannuation Contribution effective 1 July 2022.

1.0 Remuneration Snapshot

1.1 Remuneration Governance

The Board is responsible for the oversight and decision making relating to all remuneration decisions. The Remuneration and Nomination Committee (Committee) enables the Board to discharge their governance responsibilities in all matters relating to remuneration and engagement of all Executive and Non-Executive. Under the Remuneration and Nomination Committee Charter, the Committee must have at least 3 members, the majority of whom (including the Chair) must be independent Directors and all of whom must be non-executive Directors.

The Committee is comprised of 4 independent Directors. Ms Zita Peach was appointed to Chair of the Committee on 23 June 2020. Mr Richard Davis, Mr Josef Czyzewski and Ms Catherine West are also members of the Committee.

During FY22, the Committee met 5 times with full attendance by all members. The Committee at times invites the CEO, CFO/Company Secretary, Chief People & Culture Officer and other non-executive directors (non-member of the Committee) to attend Committee meetings to assist in deliberations (excluding matters relating to their own employment).

From time to time, the Remuneration and Nomination Committee seeks independent external advice on the appropriateness of the remuneration framework and remuneration arrangements. No recommendations as defined in section 9B of the Corporations Act were received in FY22.

The Committee is responsible for reviewing and making recommendations to the Board in relation to:

• Group remuneration principles, strategy and practices;

• Non-executive director fee frameworks, policy regarding fee allocation, and fee pools sufficient for appropriate fee levels, Board renewal, Board roles, market practice, and director workload;

• Appointment of new directors, review of Board and Board committee membership and performance, Managing Director succession planning and the appointment of other Executives;

• Overall remuneration framework for Executives;

• Terms and conditions underpinning Executive & Doctor Service Agreements (ESA), including restraint and notice period;

• Eligibility for, and conditions of, incentive plans, including equity-based incentive plans;

• Remuneration packages for all Senior Executives including structure and incentives;

• Metrics and associated targets for Incentive plans;

• Terms and conditions associated with incentive plans including equity plan rules, escrow and other restrictions on disposal;

• Structure and quantum of Senior Executive termination payments;

• Treatment of outstanding incentives in case of cessation of employment;

• Exercise of malus or clawback if relevant to incentive plan payments.

The Remuneration and Nomination Committee are also responsible for monitoring and reporting to the Board:

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Remuneration Report (Audited) continued

for the year ended 30 June 2022

• Remuneration relative to industry benchmarks;

• Achievement of performance requirements for the payment of incentives;

• Succession Planning;

• Diversity, inclusion objectives and pay equity.

The Remuneration and Nomination Committee Charter is available on the Company’s website at Corporate Governance | Monash IVF Group. The Charter is reviewed annually. Further information on the Remuneration and Nomination Committee is provided in the Corporate Governance Statement in this Annual Report.

1.2 Principles of Remuneration Framework

Our longstanding and consistent approach to remuneration continues to meet our remuneration objectives and align with our principles. The following summarises these key principles that underpin the structure of Executive Remuneration arrangements across the Group.

	Remuneration Principles
Principle	Design and operational implications of Remuneration Framework
Aligned to organisations strategy and business priorities	▪ Remuneration framework will ensure alignment with the overall business strategy and ensure all policies and processes are observed to enable the attraction and retention of key personnel who create value for shareholders ▪ Operates in support of Our Principles and aligns to the organisations desired culture
Market Competitive	▪ Ensure employees including Executive KMP and management are rewarded fairly and competitively according to role accountability, market positioning, skills, experience and performance ▪ Remuneration decisions will be informed by utilising relevant market benchmarking
Rewards Performance	▪ Encompass long term and short-term variable performance elements for those who have the ability to impact overall organisation performance ▪ Short term and long-term remuneration incentives and outcomes ▪ Performance targets to be met for payment (at threshold or target) are set after considering previousperformance,forecast and budget
Simple and Transparent	▪ A simple, flexible, consistent and scalable remuneration framework is to be used across the organisation allowing for sustainable business growth ▪ The structure must be easily communicated and can reinforce the organisations mission, principles and culture
Effective Governance	▪ The Remuneration and Nomination Committee and Board will ensure that remuneration outcomes reflect both risk and performance and is reviewed regularly to ensure employees act ethically and responsibly ▪ Complywith all relevant legal and regulatory provisions
Alignment to Patient, People & Doctor Outcomes	▪ Ensure Patient, People and Doctor engagement outcomes remain a critical measure for all KMP and management relating to at-risk remuneration.

40 | Monash IVF Group

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CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM FY22 FINANCIAL REPORT

Remuneration Report (Audited) continued

for the year ended 30 June 2022

2.0 Remuneration Structure

2.1 Executive Remuneration Structure

Our Executive Remuneration structure is designed to attract, engage and retain a highly qualified and experienced group of Executives. Our remuneration is structured to align Executives to long term sustainable shareholder value through the execution of Vision 2026 by combining Total Fixed Remuneration, Short and Long-term incentives to form an overall Total Remuneration position.

The Board reviews the structure and effectiveness of the remuneration arrangements annually to ensure their alignment to business performance and strategy.

Purpose of each remuneration component	Purpose of each remuneration component	Purpose of each remuneration component
Total Fixed Remuneration (TFR)	Short Term Incentive (At Risk)	Long-Term Incentive (At Risk)
To attract and retain, paying competitively, reflecting the individual’s accountability, position requirements and experience. TFR is determined as base salary and inclusive of all standard leave provisions and superannuation guaranteed contributions.	Rewards performance for achieving stretch targets and further rewards the achievement of both financial and non- financial goals. Achievement is measured using an annual balanced scorecard of measures aligned to the organisations strategic vision and objectives.	Rewards and retains key contributors by creating alignment with long term shareholder interests and reward the creation of sustainable shareholder wealth.

No changes were made to the remuneration framework in FY22 for the CEO, CFO and COO with the framework continuing to retain these three components, with short-term incentives and long-term incentives at risk. The remuneration structure aligns the remuneration opportunity with the level of position accountability.

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2.2 Executive Remuneration Structure for FY22

The diagram below summarises the framework for FY22. The framework continues to be reviewed each year.

Alignment with Shareholder Performance Driven Market Competitive Remuneration Interests

Total Available Remuneration

Total Available Remuneration	Total Available Remuneration	Total Available Remuneration	Total Available Remuneration	Total Available Remuneration
	Total Fixed Remuneration (TFR) At Risk Remuneration TFR is determined on the basis of market rates (where applicable, the size and complexity of the role and the individual’s skill and experience relative to position requirements). TFR Comprises of: • Cash salary • Salary sacrifice items • Employer superannuation contributions in line with statutory regulations TFR levels are reviewed annually by the Committee through a process that considers market rates and individual experience in the position. TFR is also reviewed on promotion. There are no guaranteed increases in executive remuneration. Short Term Incentive (STI) • Balanced Scorecard Model that includes a Non-Financial Gateway (ANZARD Success Rate Average) • 70% financial Measure based on EPS performance • Non-financial Measures (30%) are linked to key strategic initiatives built around a balanced scorecard including but not limited to: • Engagement (People, Patient, Doctor) • Market Share growth • Scientific Success Rates • Doctor attraction • Non organic growth initiatives. Long Term Incentive Plan (LTI) • EPS growth hurdles based on predefined growth rates over a 3 year period (70%) • TSR hurdles based on Group’s relative TSR performance against ASX300 Healthcare Index (30%) • Comprise performance rights which vest in accordance with 3 year EPS growth and relative TSR above threshold performance requirements.

3.0 At Risk Remuneration Framework

At the beginning of each year the Remuneration and Nomination Committee determine a set of targets for the forthcoming year with reference to the strategic objectives and financial results from prior year. The Remuneration and Nomination Committee has the ability to subsequently adjust targets for any significant changes including but not limited to, significant events, capital structure, material acquisition or divestments, in accordance with any ASX Listing Rules if applicable.

The Board may exercise its discretion to make adjustments it considers appropriate in light of the purpose and intent of the incentive plan and the performance standards. This may include adjustments to ensure that the interests of the relevant participant are not , in the opinion of the board, materially prejudiced or advantaged relative to the position reasonably anticipated at the time of the assessment. No discretion was applied to any KMP Incentive outcomes for FY22.

The following table summarises the short-term incentive and long-term incentive reward components for certain KMP including the performance measures and delivery mechanism applicable for the performance period ended 30 June 2022.

42 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Remuneration Report (Audited) continued for the year ended 30 June 2022

3.0 At Risk Remuneration Framework (continued)

Short Term Incentive (at risk) Long Term Incentive (at risk)	Short Term Incentive (at risk) Long Term Incentive (at risk)
Incentive Opportunity	Threshold Target Threshold Target
Short and Long – Term Incentive opportunities are expressed as a percentage of TFR and refer to section 4.1
CEO	30% 100% 20% 100%
CFO	30% 100% 20% 100%
COO	30% 100% 20% 100%
Performance Measures	• STI scorecard KPIs include financial and non-financial measures • A non-financial gateway is in-place whereby no STI is payable if the Group’s clinical pregnancy rates (success rates) is below the ANZARD average • 70% of STI is based on the EPS financial measure. EPS may be adjusted for certain individual significant, non-regular, abnormal or unusual gains or losses • 30% of STI is based on qualitative non- financial measures which include Patient engagement, People engagement, doctor engagement, scientific success rates and domestic market share • Pro-rata payment of STI is made if achievement is between threshold and target • LTI KPIs are earnings per share growth (EPS)(70%) and Total Shareholder Return (TSR)(30%) • TSR measures returns made against the performance of a comparator group with hurdles based on predefined growth rates over a 3 year period • EPS compound annual growth rate (CAGR) provides a tangible measure of shareholder value with hurdles based on predefined growth rates over a 3 year period
Delivery Mechanisms	STI awards for the CEO, CFO and COO are paid as cash and subject to continued employment LTI awards are granted as performance rights, are subject to testing against the above performance measures and continued employment. The CEO, CFO and COO were not required to pay any money to be granted performance rights

3.1 FY22 Short Term Incentive

A non-financial gateway is in-place whereby no STI is payable if the Group’s clinical pregnancy rates (success rates) is below the ANZARD average for the period 1 July 2021 to 31 May 2022. This period is applicable due to the availability of pregnancy outcomes information at the time of reporting. The available ANZARD target average applicable is 39%. The Group’s clinical pregnancy rates for the period between July 2021 to May 2022 was 42.4% and accordingly, the non-financial gateway was achieved/not achieved.

The quantitative financial measure defined for the CEO, CFO and COO in FY22 were as follows:

Strategic Objective	Weighting	Measure	FY22 Outcome
Earnings per Share (EPS)	70%	EPS is considered the most relevant financial measure to further align variable incentives to shareholder value. EPS Target was set at FY22 Group Budget (7.18 cents per share normalised) and threshold set at 90% (6.46 cents per share normalised) of FY22 Group Budget.	Normalised EPS achieved was 5.74 cents per share and did not meet the 7.18 cents per share target. Accordingly, no payout of the EPS measure was made.

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STI Non – Financial

The qualitative non-financial measures defined for KMP in FY22 included the following:

Strategic Objective	Weighting	Measure	FY22 Outcome
Patient Engagement	5% (CEO, CFO, COO)	Deliver an ongoing improvement in Patient Engagement as measured by the patient Net Promoter Score (NPS) Survey targeting engagement improvements. Patient Engagement NPS was measured in the IVF and Ultrasound businesses separately.	Patient Engagement NPS achieved for the IVF business was above stretch target by +1.49. Payout for the Patient Engagement measure was 100%. The Patient Engagement NPS achieved for the Ultrasound business was +1.25 above stretch. Payout of Patient Engagement NPS was 100%.
People Engagement	5% (CEO, CFO, COO)	To foster a culture of Engagement with all Monash IVF Group employees as measured by annual employee Net Promoter Score (NPS) Survey targeting engagement improvements.	Employee Engagement Percentage achieved threshold target. Payout for the People Engagement measure was 30%.
Doctor Engagement	5% (CEO, CFO, COO)	Foster a culture of engagement with all Monash IVF Group Clinicians. This is measured by a clinician NPS Survey targeting engagement improvements.	Doctor Engagement is based on 2 x NPS results with 1 of these not meeting threshold and the second stretch target by +2.5. Payout of Doctor Engagement was 50%.
Scientific Success Rates	5% (CEO, CFO) 5% (COO)	Deliver a focused improvement in success rates in line with Your IVF success rate measure 4 (% implantation) ANZARD.	This improvement metric and based on YourIVF Measure 4 (% implantation), the Group result for KMP was not achieved due to outcome being marginally below threshold.
Domestic Market Growth	5% (CEO, CFO) 5% (COO)	Market share growth in all IVF Key markets. Market Share target was set at 22.6% for the period from July 2021 to June 2022 Threshold was set at 21.5%.	Market share for the period from July 2021 to June 2022 was below threshold and stretch target. Payout for the Market Share measure was 0%.
Acquisition Execution	5% (CEO & CFO)	In line with Vision 2026 and successfully growing the Monash IVF Group footprint, this measure relates to the completion of acquisitive transactions, with 2 being stretch and 1 at threshold.	Following the reported transactions completed in FY22 being ART Associates Queensland & Pivet Medical Centre, WA. Payout of this STI was 100%.
Dr. Acquisition (COO only)	5% (COO only)	Increased fertility specialists nationally through acquisition of new doctors and conversion of trainee doctors to fully contracted to support succession planning and growth. Target was set at 95 and threshold at 93.	As a result of 10 clinicians joining Monash IVF Group in FY22 this metric achieved above threshold by 3, therefore payout was at 86%

44 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

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for the year ended 30 June 2022

3.3 FY22 Long-term Incentive grant

The LTI plan is a performance rights plan with vesting rights dependent upon the satisfaction of pre-determined performance hurdles and continuous employment. LTI grants are made on a rolling annual basis to ensure Executives maintain a continuous focus on sustainable long-term growth and returns and provides an appropriate balance with shortterm incentives which are focussed on annual returns.

The terms and overview of the FY2022 LTI grant to KMP and other eligible employees, including the CEO, CFO and COO are summarised below.

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The LTI award opportunity is based on a percentage of the participant’s total fixed remuneration as at the grant date. The number of performance rights issued is determined by dividing the long-term incentive component of the participant’s fixed remuneration by the volume weighted average price of Monash IVF Group Limited shares traded on the Australian Stock Exchange over the 10 trading days immediately following the release of the FY2021 full-year results announcement. The VWAP applied to the FY2022 performance rights issue was $0.991.

Performance rights were granted in two tranches during FY2022, with each tranche subject to separate vesting conditions. Executives did not pay any money to be granted the performance rights and the expiry date of the rights will be on the fifth anniversary of their grant.

Details of the FY2022 LTI grant to KMP is set out below:

KMP	% of TFR	Performance Rights granted	Allocation	# of performance rights
Mr. Michael Knaap (CEO)	80%	EPS TSR	70% 30%	326,316 139,850
Mr. Malik Jainudeen (CFO)	40%	EPS TSR	70% 30%	97,895 41,955
Mr. Hamish Hamilton (COO)	40%	EPS TSR	70% 30%	97,895 41,955

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The performance periods and vesting schedules for the FY2022 performance rights are set out in the following table:

Performance Measure	Earnings per share
Performance Period	1 July 2021 to 30 June 2024
Performance	% of rights that will vest
Less than 10% per annum	0%
10% per annum	20%
Between 10% to 12% per annum	20% to 100% pro rata
Greater than 10% per annum	100%

Performance Measure	Relative TSR
Performance Period	11 days after FY2021 results announcement to 11 days after FY2024 results announcement
Performance	% of rights that will vest
Less than Index return	0%
Equal to index return	20%
Between Index return and Index return +5%	20% to 100% pro rata
Equal to or greater than Index return +5%	100%

The graduated vesting scale in the LTI plan was designed to minimise the likelihood of excessive risk taking as a performance threshold is approached. The Board believes this vesting framework strengthens the performance link over the long-term and accordingly encourages Executives to focus on long term performance. The Board also acknowledges that the value of certain strategic initiatives may take several years to deliver.

Further terms and conditions of the LTI plan are as follows:

• The invitations issued to eligible persons will include information such as award conditions and, upon acceptance of an invitation, the Board will grant awards in the name of the eligible person. Awards may not be transferred, assigned or otherwise dealt with except with the approval of the Board.

• Awards will only vest where the conditions advised to the participant by the Board have been satisfied. An unvested award will lapse in a number of circumstances, including where conditions are not satisfied within the relevant time period, or in the opinion of the Board, a participant has committed an act of fraud or misconduct or gross dereliction of duty. If a participant’s engagement with the Company (or one of its subsidiaries) terminates before an award has vested, the Board may determine the extent to which the unvested awards that have not lapsed will become vested awards or, if the award offer does not so provide and the Board does not decide otherwise, the unvested awards will automatically lapse.

• Awards are subject to malus and clawback conditions whereby the Board may, in its discretion, and subject to applicable laws, determine the performance rights or shares already allocated following the vesting or exercise of a performance right are forfeited, recovered or the conditions modified. The Board’s decision in regard to unfair benefits obtained by the participant is final and binding.

• Where there is a takeover bid or a scheme of arrangement proposed in relation to the Company, the Board may determine that the participant’s unvested awards will become vested awards. In such circumstances, the Board shall promptly notify each participant in writing that the awards have become vested awards, or that he or she may, within the time period specified in the notice and where applicable in accordance with the class or category of award, exercise such vested awards. A participant is not entitled to participate, in their capacity as holder of awards, in any new issue of shares in the Company, nor in any return of capital, buyback or other

46 | Monash IVF Group

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OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

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for the year ended 30 June 2022

distribution or payment to shareholders, unless the Board determines otherwise. In the event of a bonus issue or rights issue, the rights of the award will be altered in a manner (if any) determined by the Board, consistent with the ASX Listing Rules.

• In the event of any reorganisation of the issued ordinary capital of the Company before the exercise of an award, the number of shares attached to each award will be reorganised in the manner specified in the LTI plan and in accordance with the ASX Listing Rules or, if the manner is not specified, the Board will determine the reorganisation. In any event, the reorganisation will not result in any additional benefits being conferred on participants which are not conferred on shareholders of the Company.

• Participants who hold an award issued pursuant to the LTI plan have no rights to vote under the LTI award at meetings of the Company until that award has vested (and is exercised, if applicable) and the participant is the holder of a valid share in the Company. Shares acquired upon vesting of the award will, upon issue, rank equally in all respects with other shares.

• No award or share may be offered under the LTI plan if to do so would contravene the Corporations Act, the ASX Listing Rules or instruments of relief issued by ASIC from time to time.

4.0 Executive and Non-Executive Remuneration

4.1 KMP Remuneration

The respective total reward mix for KMP in FY22 is as follows, assuming business performance results in target vesting for STI and maximum grant value for LTI.

KMP		Fixed Pay	STI	LTI	At Risk
Mr. Michael Knaap		38.4%	30.8%	30.8%	61.6%
Mr. Malik Jainudeen		55.6%	22.2%	22.2%	44.4%
Mr. Hamish Hamilton		55.6%	22.2%	22.2%	44.4%
Dr. Richard Henshaw		100.0%	0.0%	0.0%	0.0%
KMP		Component	Commentary
Mr. Michael Knaap – Chief Executive Officer & Managing Director		TFR	1 July 2021 to 30 June 2022- $577,500 per annum
		STI	The CEO has the opportunity to earn an annual incentive of 60% of total fixed remuneration based on meeting certain defined criteria. The FY2022 STI criteria were subject to both financial (70%) and non-financial (30%) outcomes. STI is only applicable if the clinicalpregnancyrateis atorabovetheANZARD mean.
		LTI (performance rights)	466,166 performance rights were granted in FY2022 which is equivalent to 80% of TFR. These rights vest at the end of the 3 year performance period subject to meeting certain EPS and TSRoutcomes.
		Notice period	6months
		Term of Agreement	No Fixed Term

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KMP	Component	Commentary
Dr. Richard Henshaw (Executive Director)	TFR	$321,884 per annum Dr. Henshaw was the only doctor during FY2022 who served as a director. He was paid a salary for his clinician duties and medical leadershiproles.
	STI	Not eligible for aSTIpayment
	LTI (performance rights)	Not eligible for a LTI offer
	Notice period	6months
	Term of Agreement	No Fixed Term
KMP	Component	Commentary
Mr. Malik Jainudeen (Chief Financial Officer & Company Secretary)	TFR	1 July 2021 to 30 June 2022 - $346,500 per annum
	STI	The CFO has the opportunity to earn an annual incentive of 40% of total fixed remuneration based on meeting certain defined criteria. The FY2022 STI criteria were subject to both financial (70%) and non-financial (30%) outcomes. STI is only applicable if the clinicalpregnancyrateis atorabovetheANZARD mean.
	LTI (performance rights)	139,850 performance rights were granted in FY2022 which is equivalent to 40% of TFR. These rights vest at the end of the 3 year performance period subject to meeting certain EPS and TSRoutcomes.
	Notice period	3months
	Term of Agreement	No Fixed Term
KMP	Component	Commentary
Mr. Hamish Hamilton (Chief Operating Officer)	TFR	1 July 2021 to 30 June 2022 - $346,500 per annum
	STI	The COO has the opportunity to earn an annual incentive of 40% of total fixed remuneration based on meeting certain defined criteria. The FY2022 STI criteria were subject to both financial (70%) and non-financial (30%) outcomes. STI is only applicable if the clinical pregnancy rate is at or above the ANZARD mean.
	LTI (performance rights)	139,850 performance rights were granted in FY2022 which is equivalent to 40% of TFR. These rights vest at the end of the 3 year performance period subject to meeting certain EPS and TSR outcomes.
	Notice period	3months
	Term of Agreement	No Fixed Term

48 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

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for the year ended 30 June 2022

4.2 Non-Executive Director (NED) Remuneration Policy

Under the Constitution, the Directors decide the total amount paid to all Directors as remuneration for their services as Directors. However, under the ASX Listing Rules, the total amount paid to all Directors for their services must not exceed in aggregate in any financial year, the amount fixed by the Company in a general meeting. This amount has been fixed by the Company at $950,000. For the 2022 financial year, the fees payable to the current NEDs are $587,593 in aggregate reflecting a $27,789 increase compared to FY2021.

Role	2022	2021
	$	$
Fees
Chair	146,086	143,222
Other Non-Executive Directors	90,898	89,116
Additional Fees
Audit & Risk Committee – Chair	17,313	16,974
Audit & Risk Committee – Member	8,643	8,487
Remuneration & Nomination Committee – Chair	17,313	16,974
Remuneration & Nomination Committee – Member	8,643	8,487

5.0 Details of Remuneration for Key Management Personnel

5.1 Key Management Personnel (“KMP”)

KMP have authority and responsibility for planning, directing, and controlling the activities of the Group, directly or indirectly, including directors of the Company and other Executives. KMP comprise the directors of the Company and the senior Executives for the Group named in this report.

Name	Position	Period Covered Under this Report
Non-Executive Directors
Mr Richard Davis	Non-Executive Chairman	Full Financial Year
Mr Josef Czyzewski	Non-Executive Director	Full Financial Year
Mr Neil Broekhuizen	Non-Executive Director	Full Financial Year
Ms Zita Peach	Non-Executive Director	Full Financial Year
Ms Catherine West	Non-Executive Director	Full Financial Year
Name	Position	Period Covered Under this Report
Executive Directors
Mr Michael Knaap	Chief Executive Officer	Full Financial Year
Dr Richard Henshaw	Executive Director	Full Financial Year
Other KMP
Mr Malik Jainudeen	Chief Financial Officer	Full Financial Year
Mr Hamish Hamilton	Chief Operations Officer	Full Financial Year

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Short term employee benefits Post-employment benefits Share based payments			163,400	160,196	116,868	114,577	99,555	97,603	108,215	106,092	99,555	81,336	587,593	559,804		794,112	908,159	326,331	365,486	1,120,443	1,273,645
	Total $
	Rights $
			-	-	-	-	-	-	-	-	-	-	-	-		170,049	81,092	-	-	170,049	81,092
			-	-	-	-	-	-	-	-	-	-	-	-
	Termination benefits $															-	-	-	-	-	-
			-	-	-	-	-	-	-	-	-	-	-	-		-	-	-	-	-	-
	ther long-term benefits $
	O
			14,855	13,898	10,624	9,940	-	2,823	9,838	9,204	9,050	7,057	44,367	42,922		23,568	21,694	23,568	21,694	47,136	43,388
	Superannuation $
	Total $
			148,545	146,298	106,244	104,637	99,555	94,780	98,377	96,888	90,505	74,279	543,226	516,882		600,495	805,373	302,763	343,792	903,258	1,149,165
			-	-	-	-	-	-	-	-	-	-	-	-		-	-	-	-	-	-
	Other benefit $
			-	-	-	-	-	-	-	-	-	-	-	-		48,510	304,138	-	-	48,510	304,138
	STI Cash incentive $
			148,545	146,298	106,244	104,637	99,555	94,780	98,377	96,888	90,505	74,279	543,226	516,882		551,985	501,235	302,763	343,792	854,748	845,027
	Salary & Fees $
			2022	2021	2022	2021	2022	2021	2022	2021	2022	2021	2022	2021		2022	2021	2022	2021	2022	2021
		Non-Executive Directors	Mr Richard Davis		Mr Josef Czyzewski		Mr Neil Broekhuizen		Ms Zita Peach		Ms Catherine West		Total Non-Executive Directors		Executive Directors	Mr Michael Knaap		Dr Richard Henshaw		Total Executive Directors

50 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM FY22 FINANCIAL REPORT

Remuneration Report (Audited) continued

for the year ended 30 June 2022

Short term employee benefits Post-employment benefits Share based payments			408,454	463,281	400,712	429,801	809,166	893,082		2,517,202	2,726,531
	Total $
			43,690	18,405	36,901	14,979	80,591	33,384		250,640	114,476
	Rights $
				-	-	-	-	-		-	-
	Termination benefits $		-
			-	-	-	-	-	-		-	-
	ther long-term benefits $
	O
	Superannuation $
			23,568	21,236	23,568	21,368	47,136	42,604		138,639	128,914
	Total $
			341,196	423,640	340,243	393,454	681,439	817,094		2,127,923	2,483,141
				-	-	-	-	-		-	-
	Other benefit $		-
			19,404	126,655	18,451	96,575	37,855	223,230		86,365	527,368
	STI Cash incentive $
			321,792	296,985	321,792	296,879	643,584	593,864		2,041,558	1,955,773
	Salary & Fees $
		(KMP)	2022	2021	2022	2021	2022	2021		2022	2021
		Other Key Management Personnel	Mr Malik Jainudeen		Mr Hamish Hamilton		Total Other KMP Remuneration			Total KMP Remuneration

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	0.45	0.94	0.46	0.61	0.32	0.93	0.49			0.94	0.46	0.61	0.32	0.93	0.49		0.61	0.32	0.93	0.49
Fair Value per Security $
Balance of Unvested Equity 30 Jun 2022 Number	-	-	147,205	351,140	150,489	139,850	326,316			-	36,801	83,604	35,831	41,955	97,895		83,604	35,831	41,955	97,895		1,670,371
	(24,490)	(147,205)	-	-	-	-	-			(36,801)	-	-	-	-	-		-	-	-	-		(208,496)
Lapsed or Forfeited Number
Vested in FY22 Number	-	-	-	-	-	-	-			-	-	-	-	-	-		-	-	-	-		-
Granted in FY22 Number	-	-	-	-	-	139,850	326,316			-	-	-	-	41,955	97,895		-	-	41,955	97,895		745,866
	24,490	147,205	147,205	351,140	150,489	-	-			36,801	36,801	83,604	35,831	-	-		83,604	35,831	-	-		1,133,001
Balance of Unvested Equity 1 Jul 21 Number
erformance Period End Date	7 Sep 21	30 Jun 22	0 Aug 22	30 Jun 23	0 Aug 23	0 Sep 24	30 Jun 24			30 Jun 22	0 Aug 22	30 Jun 23	0 Aug 23	0 Sep 24	30 Jun 24		30 Jun 23	0 Aug 23	0 Sep 24	30 Jun 24
P			3		3	1					3		3	1				3	1
Grant Date	20 Dec 18	16 Oct 19	16 Oct 19	16 Oct 20	16 Oct 20	9 Nov 21	9 Nov 21			16 Oct 19	16 Oct 19	16 Oct 20	16 Oct 20	9 Nov 21	9 Nov 21		16 Oct 20	16 Oct 20	9 Nov 21	9 Nov 21
						1	1							1	1				1	1
urdles	TSR	EPS	TSR	EPS	TSR	TSR	EPS			EPS	TSR	EPS	TSR	TSR	EPS		EPS	TSR	TSR	EPS
H
Type	Rights	Rights	Rights	Rights	Rights	Rights	Rights			Rights	Rights	Rights	Rights	Rights	Rights		Rights	Rights	Rights	Rights
Name	Mr Michael Knaap									Mr Malik Jainudeen							Mr Hamish Hamilton

52 | Monash IVF Group

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CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Remuneration Report (Audited) continued

for the year ended 30 June 2022

5.0 Details of Remuneration for Key Management Personnel (continued)

5.2 Analysis of incentives included in remuneration

Details of the vesting profile of the STI cash incentives awarded as remuneration to each director of the Company and other KMP are detailed below:

	Cash Incentive (2022)	Cash Incentive (2022)	Cash Incentive (2022)	Cash Incentive (2021)	Cash Incentive (2021)	Cash Incentive (2021)
		% of Available Incentive			% of Available Incentive
	Payable and Paid	Payable and Paid	Not Payable	Paid	Paid	Not Paid
Executive Directors
Mr Michael Knaap	$48,510	14.0%	86.0%	$304,138	89.4%	10.6%
Dr Richard Henshaw	-	-	-	-	-	-
Other Key Management	Personnel
Mr Malik Jainudeen	$19,404	14.0%	86.0%	$126,655	89.8%	10.2%
Mr Hamish Hamilton	$18,451	13.3%	86.7%	$96,575	88.2%	11.8%

5.3 Loans to Key Management Personnel

No loans were issued to KMP during 2022.

5.4 Key Management Personnel Shareholdings

The following details Monash IVF Group ordinary shares held by Directors and KMP during 2022:

Name	Balance at start of year	Granted as remuneration	Net Change	Balance at end of year
Non-Executive Directors
Mr Richard Davis	182,067	-	-	182,067
Mr Josef Czyzewski	241,382	-	-	241,382
Mr Neil Broekhuizen	350,000	-	-	350,000
Ms Zita Peach	92,803	-	-	92,803
Ms Catherine West	37,100	-	-	37,100
Executive Directors
Mr Michael Knaap	150,655	-	-	150,655
Dr Richard Henshaw	1,358,842	-	-	1,358,842
Other Key Management Personnel
Mr Malik Jainudeen	19,231	-	-	19,231
Mr Hamish Hamilton	123,835	-	-	123,835
Total	2,555,915	-	-	2,555,915

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Remuneration Report (Audited) continued

6.0 Link to Group Performance

6.1 Group Performance

The revenue and earnings of the Group for the five years to 30 June 2022 are summarised below:

	2022	2021	2020	2019	2018
Measure	$’000	$’000	$’000	$’000	$’000
Revenue	192,294	183,605	145,417	151,980	150,638
UnderlyingEBITDA	48,145	47,749	34,797	37,815	38,109
Reported EBITDA	43,157	51,281	32,833	37,242	38,109
UnderlyingNPAT	22,232	23,418(2)	14,353	20,871	21,181
Reported NPAT	18,502	25,687(2)	11,726	19,852	21,181
STI Payable	16.7%	81.1%	24.1%	29.4%	0%
Total Shareholder Return(1)	21%	61%	-59%	34%	-35%
ClosingShare Price($)	0.94	0.85	0.53	1.40	1.08
Dividend Per Share(cents)	4.4	4.2	2.1	6.0	6.0
Earningsper Share(cents) (1)	4.7	6.5	4.6	8.4	9.1

During the period, Revenue, EBITDA, NPAT, TSR and EPS were key performance measures. EBITDA is a major component of the STI plans for KMP including the CEO, CFO and COO whilst TSR and EPS growth are long term metrics used to measure the CEO, CFO and COO’s remuneration via the Executive Long Term Incentive Plan. CEO, CFO and COO remuneration varies with the outcomes of these measures above a required threshold performance level.

• 1) The Net Profit after Tax, total shareholder return and earnings per share are not comparable for certain years due to the capital structure and discontinued operations.

• 2) The 30 June 2021 amounts have been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service.

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Directors’ Report continued

for the year ended 30 June 2022

Lead auditor’s independence declaration

The lead auditor’s independence declaration is set out on page 56 and forms part of the directors’ report for the year ended 30 June 2022.

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

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Richard Davis Michael Knaap Chairman Chief Executive Officer and Managing Director

Dated in Melbourne this 26th day of August 2022

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Lead Auditor’s In ence Declaration under depend Section 307C of the Corporations Act 2001

To the Directors of Monash IVF Group Limited

I declare that, to the best of my knowledge and belief, in relation to the audit of Monash IVF 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.

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KPMG

==> picture [91 x 39] intentionally omitted <==

Chris Sargent

Partner

Melbourne

26 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.

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Corporate Governance Statement

This statement, approved by the Board, reports on the Group’s key governance framework, principles and practices as at 30 June 2022. These principles and practices are subject to regular review and when necessary revised to reflect legislative changes or corporate governance best practice.

The Board of Directors is committed to maintaining the Group’s pre-eminent status as a leader in the fields of Assisted Reproductive Services (ARS) and specialist women’s imaging. This commitment will lead to sustainable growth and shareholder returns. The Board is a strong advocate of good corporate governance and its fulfilment of these practices and obligations will enhance the ability for shareholders to be appropriately rewarded.

Monash IVF Group Limited complies in all material respects with the fourth edition of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations. The details of this compliance and reasons for any non compliance are set out in this statement. A separate Appendix 4G has been lodged with the Australian Securities Exchange Limited (ASX).

Principle 1 Lay solid foundations for management and oversight

1.1 Roles and responsibilities of the Board and Management and delegation

The role of the Board is to oversee good governance practice in all aspects of the Group’s undertakings. This includes setting and approving the strategic direction of the Group and to guide and monitor Monash IVF Group management and its businesses in achieving their strategic objectives. The Board is committed to maximising performance through continued investment in all aspects of the business including research, education and innovation in clinical services to improve patient outcomes.

The Board is committed to a high standard of corporate governance practice and fosters a culture of compliance which values ethical behaviour, integrity, teamwork and respect for others.

The Monash IVF Group Limited Board Charter outlines the role and responsibilities of the Board along with direction on Board composition, structure and membership requirements. The Charter clearly outlines matters expressly reserved for the Board’s determination and those matters delegated to Management.

The Company’s Chief Executive Officer and Managing Director, Michael Knaap, has responsibility for day-to-day management of Monash IVF Group Limited in its entirety. Michael was previously the Chief Financial Officer and held the position of Interim Chief Executive Officer between October 2018 and April 2019. Michael was appointed to Chief Executive Officer and Managing Director on 15 April 2019 and is supported by the Executive Team which is responsible for implementation of Board directed strategies at an operational level.

The Monash IVF Group Limited Board Charter is available on the Monash IVF Group Limited website http://ir.monashivfgroup.com.au/Investor-Centre/?page=Corporate-Governance

1.2 and 1.3 Board and Senior Executive Appointments

In the event of a new appointment to a director or senior executive role, appropriate probity and integrity checks, such as experience, education, criminal record and bankruptcy history, are undertaken to ensure the individual has an appropriate background to hold the role with Monash IVF Group Limited. Should the role be for election of a director for the first time a comprehensive check of the candidates personal and professional history would occur including details of any other material directorships or non-executive roles.

With the exception of the Managing Director & CEO, one third of all eligible Directors, and any other Director who has held office for over three years since their last election, must retire in rotation at the Annual General Meeting (AGM). This is in accordance with the Company’s Constitution. A retiring Director holds office until the conclusion of the meeting at which he or she retires. They may stand for re-election by security holders at that meeting. The Board may appoint a new Director to fill a casual vacancy and that Director will hold office until the close of the next AGM, unless elected at that meeting.

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Principle 1 Lay solid foundations for management and oversight (continued)

The Board makes recommendations in respect of the election or re-election of each Director based on tenure, skills and experience of the Director in relation to Board composition. The Remuneration and Nomination Committee ensures that appropriate background checks take place for the appointment of a new Director. The details of those Directors who stand for re-election will be provided in the Notice of Meeting which is sent to security holders prior to the AGM. The Board provides security holders with all material information in its possession relevant to a decision on whether or not to elect or re-elect a director, in addition a statement by the Board as to whether it supports the election or re-election of the candidate and a summary of the reasons as to why the Board has taken this view. Additionally, each Director standing for re-election makes a short presentation to security holders at the meeting itself.

All Board members have a written agreement outlining the terms of their appointment clearly articulating the expectations, roles and responsibilities and remuneration of their role.

All employment agreements for senior executives clearly set out their terms of appointment, remuneration and requirements to adhere to company policies and procedures. Industry regulation and Company policy requires police checks for employees which are undertaken prior to commencement. Employment contracts require employees to disclose any offences that would result in an adverse police check.

1.4 Company Secretary

Mr Malik Jainudeen was appointed in the role of Company Secretary and Chief Financial Officer with Monash IVF Group Limited in April 2019. Malik’s role is to work closely with the Board and its committees to advise on governance matters and to oversee meeting protocols are adhered to including comprehensive minutes.

1.5 Diversity and Inclusion Policy

Monash IVF Group recognises that its business success is a reflection of the quality of its people and is proud of its strong diverse and inclusive workforce. The Company’s workforce is made up of individuals with a diverse set of skills, values, experiences, backgrounds and attributes including those gained on account of their gender, age, disability, ethnicity, marital or family status, religious or cultural background and sexual orientation. Monash IVF Group is committed to supporting and further developing this through attracting, engaging and retaining diverse talent as supported by a Diversity & Inclusion policy.

Monash IVF Group is a recognised employer under the Workplace Gender Equity Act 2012 and is compliant with the requirements of the Australian Government Workplace Gender Equity Agency. Monash IVF Group was awarded the Employer of Choice for Gender Equity Citation in March 2022 in recognition of the work undertaken in Gender Equity.

The breakdown of gender diversity at Monash IVF Group is listed below:

Organisational Level	Number of Women	% of Women	Target
Non-ExecutiveDirectors	2	40%	30%
SeniorManagement	12	48%	50%
Team Leader	74	90%	50%
TotalStaff(inc above)	768	92%

The Board recognises the high proportion of women in the workplace and acknowledges that this gender diversity is reflective of the nature of the organisation. The Remuneration and Nomination Committee sets measurable objectives to achieve gender diversity and Monash IVF Group achieves diversity above industry standard with 50% female representation of Executives reporting to the CEO. Board representation continues to be targeted at a minimum of 30% female representation. These measures were met during the year. Senior Management is defined as Executive Directors and Management personnel in operational leadership positions generally specific to state leadership teams.

Monash IVF Group has in place a Flexible Work Arrangements policy to promote work/life balance and to accommodate family care in line with the operational requirements of the Business. During FY22, 36 employees have taken primary and secondary parental leave, utilising the Group’s generous parental leave policy. Flexible working arrangements either formally and informally are widely used across Monash IVF Group.

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Corporate Governance Statement continued

Principle 1 Lay solid foundations for management and oversight (continued)

The Diversity and Inclusion Policy is overseen by the Remuneration and Nomination Committee. The Committee has no executive powers with regard to its findings and recommendations however is responsible for monitoring, reviewing and reporting to the Board on the Company’s performance in respect to diversity in accordance with the Company’s Diversity and Inclusion Policy. The Board is committed to targeting a board composition aligned to its workforce and patient base over time.The Diversity Policy is available on the Monash IVF Group Limited website http://ir.monashivfgroup.com.au/Investor-Centre/?page=Corporate-Governance

Monash IVF Group is committed to providing a diverse and culturally inclusive work environment to ensure that all employees are valued and safe in their workplace. Monash IVF Group provides an Equal Employment Opportunity policy framework in relation to harassment, bullying, discrimination and grievance procedures. The policies are available to all employees via the Company intranet. The Group also offers an employee assistance program that provides a confidential counselling service to support employee wellbeing in the workplace. To ensure a full understanding of respectful workplace obligations, the organisation utilises a Learning Management System, an online learning management portal to manage and track the full compliance of all respectful workplace topics. Monash IVF Group continued their partnership with Pride in Diversity, a national not-for-profit employer support program for LGBTI workplaces and is specifically designed to assist employers and employees with all aspects of inclusion including awareness and education.

1.6 Director Performance Evaluation

The Remuneration and Nomination Committee Chair undertakes the process of performance reviews of the Board, its Committees and the Chairman. Objectives of the review are to ensure the Board adheres to ASX governance principles and to identify opportunities to improve the functioning of the Board as a whole. The focus is on the performance of the Board as a whole and, to a lesser extent, the Board committees. The Chairman performs individual appraisals on each director.

The annual review completed by Monash IVF Group Limited Board was undertaken in July 2022. It involved directors completing a confidential online questionnaire covering aspects outlined in the Board Charter. The results were aggregated and discussed by the Board to inform areas or opportunities for improvement.

1.7 Senior Executive Evaluations

Monash IVF Group Limited has an annual Performance Review Policy for all senior executives and managers as stated in the Board Charter. Senior executive and manager performance is reviewed by the CEO against KPIs which are both financial and non financial in nature. The performance evaluation process has been undertaken in accordance with this policy for the current financial year. The Remuneration and Nomination Committee has oversight of this process.

The Chairman of the Board performs the CEO performance review against annual key performance indicators. Michael Knaap’s performance was formally reviewed in July 2022 and recommendations as a result were taken to the Board. The Board oversees and monitors the key performance indicators and strategic plan for the Group which also allows the Board to monitor the performance of senior executives outside the annual review process.

Principle 2 Structure of the Board to be effective and add value

The Constitution of the Company provides that the number of Directors must at any time be no more than ten and no less than three members. The Monash IVF Group Limited Board currently consists of seven directors, five independent and two non independent members. The Board Charter prescribes that the Chair of the Board must be independent and the Board should consist of individuals who contribute a mix of skills and a diversity of professional backgrounds. Further information on the Board members is available in the Directors Report.

Monash IVF Group Limited believes the current Board of seven members adequately allows its members to carry out its responsibilities without unnecessarily debasing its effectiveness with an excessive number that can hinder individual engagement and involvement of Board members. To add efficiency to the Board, two committees are in-place; the Remuneration and Nomination Committee and the Audit and Risk Committee. The Board Charter prescribes that all committee members be Independent Directors.

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Corporate Governance Statement continued

Principle 2 Structure of the Board to be effective and add value (continued)

2.1 Remuneration and Nomination Committee

The Remuneration and Nomination Committee is governed by the Remuneration and Nomination Committee Charter as found on the Monash IVF Group Limited website at http://ir.monashivfgroup.com.au/Investor-Centre/?page=Corporate-Governance

The Remuneration and Nomination Committee consist of four independent Directors of the Board:

• Ms Zita Peach (Chair)

• Mr Richard Davis

• Mr Josef Czyzewski

• Ms Catherine West

The Committee met 5 times with all Committee members in attendance.

The Committee assists the Board by reviewing and making recommendations to the Board in relation to:

• the Company's remuneration policy;

• Board succession issues and planning;

• Board member and re-election of members to the Board and its committees;

• Director induction and continuing professional development programs for Directors;

• remuneration packages of senior executives;

• non-executive Directors and executive Directors, equity-based incentive plans and other employee benefit programs;

• Company superannuation arrangements;

• the Company's recruitment, retention and termination policies;

• succession plans of the CEO, senior executives and executive Directors;

• the process for the evaluation of the performance of the Board, its Board Committees and individual Directors;

• the review of the performance of senior executives;

• review of the Company's remuneration policies and packages; and

• the size and composition of the Board and strategies to address Board diversity and the Company's performance in respect of the Company's Diversity and Inclusion Policy, including whether there is any gender or other inappropriate bias in remuneration for Directors, senior executives or other employees.

2.2 Board Skill Matrix

On establishing the Board in 2014 the desirable skills, attributes and experience required was considered in searching for potential Board members. The below skill matrix outlines the Board of Director skill set during FY22:

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Corporate Governance Statement continued

Principle 2 Structure of the Board to be effective and to add value (continued)

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

Executive Leadership
Held an executive leadership position, publicly listed or large private multinational.
Expertise in engaging multiple stakeholders, and delivering sustainable success.
Strategic Direction Setting
Experience and track record in constructively reviewing, and challenging a plan of action
designed to achieve the long term goals of the organisation.
New Business Development
Background in business development that delivers long term value to the organisation.
Mergers and Acquisitions
Experience M&A including implementation advisory.
International Business Development
Knowledge and experience in overseas markets in which the company operates including
cultural, political, regulatory and business requirements.
Health Services
Successful experience in industry health and/or the health services sector.
Clinical/Medical Experience
Demonstrated experience and held a successful clinical position relevant to the organisation.
Accounting/Finance
Experience in financial accounting and reporting, corporate finance, risk and internal controls.
Regulatory / Government Relations
Legal background or experience in regulatory and public policy.
Experience in risk and mitigation principles
Technology
Expertise in digital technology, cyber security, digital marketing, social media.
Work, Health and Safety
Experience relating to health, safety, environment, social responsibility, and community.
Mr Richard Davis Mr Joe Czyzewski Ms Zita Peach Mr Neil Broekhuizen Dr Richard Henshaw Mr Michael Knaap Ms Catherine West
----- End of picture text -----

Monash IVF Group Limited believe the current Director skill set is adequate to ensure an appropriate and diverse mix of backgrounds, expertise, experience and qualifications exist to assist with being able to understand and effectively advice on Group strategy and growth.

2.3, 2.4 and 2.5 Board members, roles and independence

A summary of the Board members, their roles, independence and appointment dates are as follows:

Director	Position	Independent	Appointment Date
Mr Richard Davis	Independent Chairman	Yes	4/6/2014
Mr Josef Czyzewski	Independent non-executive Director	Yes	4/6/2014
Ms Zita Peach	Independent non-executive Director	Yes	12/10/2016
Mr Neil Broekhuizen	Independent non-executive Director	Yes	4/6/2014
Ms Catherine West	Independent non-executive Director	Yes	8/9/2020

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Corporate Governance Statement continued

Principle 2 Structure of the Board to be effective and to add value (continued)

Director	Position	Independent	Appointment Date
Mr Michael Knaap	CEO and Managing Director	No – CEO and Managing Director	15/4/2019
Dr Richard Henshaw	Executive Director	No – Fertility Specialist with Monash IVF Group Limited	30/4/2014

The Board Charter outlines that at least half of the Board should be independent directors, one of whom is the Chairman. A director is deemed to be “independent” if free of any business or other relationship with the Company that could materially interfere with, or could reasonably be perceived to interfere with, the exercise of unfettered and independent judgement.

The Board has assessed, using the criteria set out in the ASX Corporate Governance Principles and Recommendation, the independence of non-executive directors in light of their interests and relationships and considers at least half to be independent. The independence status and length of service of each director is outlined in the table above. The percentage of Board members considered independent was 71%.

Mr Richard Davis was appointed Monash IVF Group Limited Chairman in June 2014. He is a non-executive Independent Director. Mr Davis, in his role as Chair, provides leadership to the Board, advice and support to the CEO. The Chair of the Board is responsible for overseeing Board dynamics and ensuring all directors contribute effectively and constructively to Group meetings and strategic agendas.

2.6 Director Induction and Professional Development

Monash IVF Group Limited has a comprehensive induction process for Directors and senior executives. This induction includes meetings with senior management and staff to gain an understanding of the core business, strategy, financial, operational and risk management matters and factors relevant to the sectors and environments in which the Company operates as well as visits to laboratories and clinics to gain a more in depth understanding of the business.

The Chairman periodically reviews whether there is a need for Directors to undertake professional development to maintain the skills and knowledge needed to perform their role as Directors effectively. Directors are active in undertaking professional development opportunities for the purpose of development and maintenance of their skills. The Board and its Committees are provided with updates and information from both management and external experts on various topics relevant to the Company’s circumstances, including emerging business and governance issues relevant to the Company and material developments in laws and regulations. The Board and individual Directors attend at operational sites, meet staff in operations and receive presentations from management across the Group’s operations. Board members have been continuously informed via research papers and presentations, financial and business results and discussion involving market strategic initiatives contributing to the continued professional development of the Board.

Principle 3 Instill a culture of acting lawfully, ethically and responsibly

3.1 Organisational values

The Board and senior executives are firmly committed to ensuring that all employees observe high standards of lawful, ethical behaviour and conduct. Setting the cultural tone for the organisation, Monash IVF Group’s core values are as follows:

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Principle 3 Instill a culture of acting lawfully, ethically and responsibly (continued)

Our Principles

Care

Promotes a team environment that values, encourages and supports differences Genuinely cares about people Is available and ready to help Demonstrates real empathy with the joys and pains of others

Collaborate

Build strong formal and informal, internal and external networks across a variety of functions and locations Partners with others to achieve quality outcomes and share in the successes Values, calls upon and utilises the experience and expertise of others Shares information for the benefit of individual, team, clinic and or organisation

Communicate

Provides the information people need to know, to do their jobs and to feel valued as a member of the team, clinic and organisation Utilises different types of communication to deliver timely and meaningful messages Has the patience to hear people out

Commitment

Is dedicated to meeting the expectations and requirements of patients, clinicians and internal stakeholders Persists in accomplishing objects despite obstacles and setbacks Pushes self and others to achieve

Create

Challenges the traditional way of thinking and adopts change where required Shows initiative and can spot and seize opportunities Empowers others to bring creative ideas and suggestions to life

Monash IVF Group’s performance review process requires assessment of the extent to which personnel have demonstrated behaviour consistent with these values. The values also form the foundation for the monthly and annual employee CUDOS Awards, recognising and celebrating outstanding employee behaviour in line with these values.

The principles are provided with sufficient guidance to enable personnel to make decisions consistent with the Board’s risk appetite and core values.

3.2 Code of Conduct and whistleblower program

Monash IVF Group Limited recognises the need to observe the highest standards of corporate practice, business conduct and responsible decision making. Accordingly, the Board adheres to a formal Code of Conduct which outlines Monash IVF Group Limited policies on various matters including ethical conduct, business and personal conduct, compliance, privacy, security of information, financial integrity and conflicts of interest. This Code clearly states the standard of responsibility and ethical conduct expected of staff, directors or doctors engaged by the Company. The Code recognises the numerous legislative and compliance matters that affect the business.

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Corporate Governance Statement continued

Principle 3 Instill a culture of acting lawfully, ethically and responsibly (continued)

The Code of Conduct promotes ethical and responsible decision making by directors, contractors and employees. The Code also gives direction in the avoidance of conflicts of interest and mandates high standards of personal integrity, objectivity and honesty in the dealings of all Monash IVF Group Limited Board members and staff, detailing guidelines to ensure the highest standards are maintained. Monash IVF Group holds all staff to act according to this code to maintain standards in confidentiality and general behaviour. The code is provided to all staff as part of the Group induction process and compliance is reviewed regularly. The Board or Audit and Risk Management Committee are informed of any material breaches of the entity’s code of conduct.

3.3 Whistleblower policy

The Company has a Whistleblower policy which has been communicated to all Company personnel and published on the Company’s website.

The Whistleblower Policy promotes and supports the reporting of matters of concern and suspected wrongdoing, such as dishonest or fraudulent conduct, breaches of legislation and other conduct that may cause financial loss or be otherwise detrimental to its reputation or interests. The Policy sets out the approach to disclosure, investigation and reporting and outlines the protection to be afforded to those who report such conduct against reprisals, discrimination, harassment or other disadvantage resulting from their reports. All disclosures received under the Whistleblower Policy are reported to the Audit and Risk Management Committee with details of investigations completed.

Monash IVF Group Limited Code of Conduct policy and Whistle Blower policy can be found in full on our website under www.monashivfgroup.com.au/investor-centre/corporate-governance/

3.4 Anti-Bribery and Corruption policy

The Company has an Anti-Bribery and Corruption policy which has been communicated to all Company personnel and published on the Company’s website.

The Anti-Bribery and Corruption policy describes the standards of ethical conduct and behaviour required of all Individuals within the Monash IVF Group, noting that all representatives must act within the law and not engage in corrupt practices or acts of bribery that expose Monash IVF Group, its employees and clinical partners to the risks of prosecution, fines and imprisonment, as well as endangering Monash IVF Group’s reputation. Where these standards are not met, then appropriate disciplinary action may be taken. Monash IVF Group will apply a zero-tolerance approach to acts of bribery and/or corruption by any Individual or third-party representative. The Board or Audit and Risk Committee are informed of any material breaches of the entity’s Anti-Bribery and Corruption policy.

Monash IVF Group Limited Anti-Bribery and Corruption policy can be found in full on our website under - - www.monashivfgroup.com.au/investor centre/corporate governance/

Principle 4 Safeguard integrity in corporate reporting

4.1 Audit and Risk Management Committee

The Audit and Risk Management Committee for Monash IVF Group Limited are responsible for supervising the process of corporate governance, financial reporting and risk management, internal control, continuous disclosure, non-financial risk monitoring and external audit. The Committee’s role, as outlined in the Audit and Risk Management Committee Charter, is to monitor the Group’s compliance with laws and regulations and adherence to the Group Code of Conduct and to promote discussion with regard to risk between Board, management and the external auditor.

Monash IVF Group Limited engages the services of an external auditor; who’s independence and performance is monitored and reviewed by the Audit and Risk Management Committee. The external auditors and Audit & Risk Committee and Audit Chair met on a number of occasions independently of Management.

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Corporate Governance Statement continued

Principle 4 Safeguard integrity in corporate reporting (continued)

The Audit and Risk Management Committee consists of three non-executive Independent Directors with experience and qualifications in financial management as outlined in the Audit and Risk Management Committee Charter. Current members of the Committee are:

• Mr Josef Czyzewski (Chair)

• Mr Richard Davis

• Mr Neil Broekhuizen

The Committee met five times during the year.

Details of the Committee members’ experience and technical expertise are set out in the directors’ biographies which can be viewed on the Board of Directors pages in the latest Annual Report. The Audit and Risk Management Committee Charter is available on the Monash IVF Group Limited website at http://ir.monashivfgroup.com.au/Investor-Centre/?page=Corporate-Governance

4.2 Financial Statement Approval

Monash IVF Group Limited CEO and Managing Director, Mr Michael Knaap, and CFO, Mr Malik Jainudeen, reviewed and verified that the half year and full year reporting statements as listed in reports to the ASX and shareholders are true and accurate. A declaration to that effect has been signed by both to declare that the financial records have been entered and maintained as per the Corporations Act (2001) accounting standards and they give a fair and true view of the financial position and performance of Monash IVF Group Limited. Further a detailed questionnaire is completed by senior operational, administrative and financial management attesting to the validity and integrity of the processes that they control prior to the approval of the financial statements. These questionnaires are reviewed by the Audit and Risk Management Committee.

4.3 Process for verifying Periodic Corporate Reports

Monash IVF Group Limited is committed to providing security holders and other external stakeholders with timely, consistent and transparent corporate reporting. The process which is followed to verify the integrity of periodic corporate reports is tailored based on the nature of the relevant report, its subject matter and where it will be published. Monash IVF Group Limited seeks to adhere to the following general principles with respect to the preparation and verification of its corporate reporting:

• periodic corporate reports prepared by, or under the oversight of, the relevant subject matter expert for the area being reported on;

• the relevant report is in compliance with any applicable legislation or regulations;

• the relevant report reviewed (including any underlying data), with regard to ensuring it is not inaccurate, false, misleading or deceptive; and

• where required by law or by Monash IVF Group policy, relevant reports authorised for release by the appropriate approver required under that law or policy.

Consistent with these principles, the non-audited sections of the Annual Report and Corporate Governance Statement for the Reporting Period were prepared by the relevant subject matter experts and reviewed and verified by relevant senior executives and senior managers prior to Board approval. ASX announcements (other than administrative announcements) during the reporting period were also reviewed and approved in accordance with the Continuous Disclosure policy, which includes review by the Board, CEO and CFO prior to publication.

Principle 5 Make timely and balanced disclosure

5.1 Continuous Disclosure

Monash IVF Group Limited is committed to effective communication with its investors and the wider community. The Company strives to ensure that all Stakeholders, market participants, patients and the wider community are informed in a timely manner of its activities and performance in line with its Continuous Disclosure Policy.

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Corporate Governance Statement continued

Principle 5 Make timely and balanced disclosure (continued)

This policy complies with the continuous disclosure obligations under the Corporation Act (2001) and the ASX Listing Rules and as much as possible seeks to achieve and exceed best practice to promote investor confidence in Monash IVF Group Limited.

Continuous disclosure principles and requirements are well understood by the Monash IVF Group Limited Company Secretary and the Board of Directors and are in place to ensure all relevant information, especially of a sensitive nature, is made available in a timely manner. Any matters requiring disclosure are raised for consideration whenever necessary. The Monash IVF Group Limited website is structured to provide shareholders and the community with easy access to information.

5.2 and 5.3 Material market announcements and presentations

The Company Secretary ensures that the Board receives copies of all material market announcements promptly after they have been made and ensures that any new investor or analyst presentation is released on the ASX before the presentation is given. The Continuous Disclosure Policy can be found on the Monash IVF Group website at http://ir.monashivfgroup.com.au/Investor-Centre/?page=Corporate-Governance.

Principle 6 Respect the rights of security holders

6.1 Communication with Shareholders

Monash IVF Group Limited ensures shareholders are fully informed of its governance processes and are notified of any major developments affecting the Group. In line with the Monash IVF Group Limited Communication Policy the Company's website is considered to be the primary means to provide information to all stakeholders. It has been designed to enable information to be accessed in a clear and readily accessible manner including:

• Company information including Board members;

• A ‘Corporate Governance’ landing page with documents including the Company's codes, policies and charters;

• all announcements and releases to the ASX;

• copies of presentations to shareholders, institutional investors, brokers and analysts;

• any media or other releases;

• all notices of meetings and explanatory material;

• annual and half yearly reports;

• any other relevant information concerning non-confidential activities of the Company including business developments.

The Company website can be found at www.monashivfgroup.com.au where information can be clearly located under heading:

• Home – homepage with Company history and overview

• About – information on Our People, Collaborations and Career Opportunities

• Research and Innovation – lists current and published research and our scientific firsts.

6.2 Investor Relations

In addition to the Company website, there is a dedicated Investor Relations page found at - http://ir.monashivfgroup.com.au/Investor Centre/ which provides investors and shareholders with information on Monash IVF Group Limited Board members, Announcements, Corporate Governance documents, Results presentations and webcasts. The Investor Centre also acts as a portal for two way communication between the Company and investors with links to a ‘Contact Us’ page which allows individuals to email enquiries and also provides postal address and contact number to allow access to the Company. The Communication Policy can be located at: http://ir.monashivfgroup.com.au/Investor-Centre/?page=Corporate-Governance

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Corporate Governance Statement continued

Principle 6 Respect the rights of security holders (continued)

6.3 and 6.4 Attendance at Company meetings

As cited in the Monash IVF Group Limited Communications Policy, the Company encourages full participation of Shareholders at the Annual General Meeting which provides an excellent opportunity for the Company to provide information to its shareholders and to receive Shareholder feedback.

The next Annual General Meeting will be held on 11 November, 2022.

In the event Shareholders are not able to attend the meetings, questions can be directed to the Group for addressing at the Annual General Meeting and the presentations and webcasts are promptly added to the website. These can be found at http://ir.monashivfgroup.com.au/Investor-Centre/?page=Presentations-Webcasts

All resolutions put to the Annual General Meeting will be decided by way of a poll. Shareholders are also able to direct any questions via the Group’s share registry provider, Link Market Services.

6.5 Electronic Communication

The Company recognises that electronic communication is often a more efficient and more desired form of communication. Monash IVF Group Limited Communications Policy addresses this and accordingly Shareholders are given the option to communicate with the Company Share Registry electronically.

The Company's email system allows staff and stakeholders to communicate with ease with Management and staff of the Company. Doctors, employees and other stakeholders have access to this system and are encouraged to use it to improve the flow of information and communication generally.

• The Monash IVF Group Limited Communications Policy can be located at http://ir.monashivfgroup.com.au/Investor Centre/?page=Corporate-Governance

Principle 7 Recognise and Manage Risk

The Monash IVF Group Limited Board, primarily through the Audit and Risk Management Committee, reviews and manages risk areas for the Group. Refer to section 4.1 for further information.

7.1 Audit and Risk Committee

The identification and appropriate management of risks is an important priority for the Monash IVF Group Limited Board. ‘Risks’ are identified as any possible outcomes that could materially impact the Company's financial performance, assets, reputation, people or the environment.

Risk recognition and management are viewed by the Company as integral to its objectives of creating and maintaining shareholder value, and to the successful execution of the Company's strategies. The Audit and Risk Management Committee oversees and governs risk management strategy and policy, to monitor risk management and to establish procedures which seek to provide assurance that major business risks are identified, consistently assessed and appropriately addressed.

The Committee abides by the Audit and Risk Management Committee Charter to assist the Board in fulfilling its corporate governance and oversight responsibilities in actively identifying risks and developing appropriate mitigating actions. The Committee adheres to the Risk Management Policy for the business which highlights the risks relevant to Company operations and oversees that the entity is operating with due regard to the risk appetite set by the Board.

Monash IVF Group Limited’s Audit & Risk Management Committee Charter can be found on the website at: http://ir.monashivfgroup.com.au/Investor-Centre/?page=Corporate-Governance

This Charter prescribes that the Audit and Risk Management Committee consist of at least three Board Directors that are non-executive independent Directors.

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Corporate Governance Statement continued

Principle 7 Recognise and Manage Risk (continued)

7.2 Risk Management

Monash IVF Group provides a framework for risk management which supports the achievement of our strategic and operational objectives. We are committed to maintaining an organisational philosophy and culture which ensures that effective risk management is integrated into day to day activities.

The Group maintains a Risk Register that documents all identified risks, lists appropriate preventative actions to mitigate risks, reviews process of risk reduction and nominates responsible persons who take ownership of the risk strategy process. The Risk Register is reviewed by the Risk Owners, Leadership Teams and Executive Team help determine whether risks are still current, controls are effective and identify any emerging risks, which are then flagged to the Audit and Risk Management Committee. A review of Risk Management is undertaken annually.

Specialist software used to record adverse events and feedback ensures that exposures to risk are continually monitored to ensure they are adequately understood and managed. This system of reporting also allows for formal monitoring of patient safety, identification training needs and informs clinical policy decision making.

7.3 Internal Audit

Monash IVF Group Limited does not have a designated Internal Audit Function at present but the Group performs internal audit activities from a clinical and operational perspective to ensure compliance with various external accreditation requirements.

The CEO and CFO have key responsibilities in ensuring that internal controls are in place, operating effectively and reviewed for continual improvement. As part of the various accreditation and licencing processes undertaken by the business, key internal audit functions are undertaken. These audits are then made available to accreditation and licensing bodies. Certain financial internal controls are tested by KPMG as part of their financial statement audit procedures. The Group believes internal controls implemented such as segregation of duties, delegation processes, treasury controls and structured approval processes counter many risks. The Group will continue to assess whether an independent third party internal audit function or designated in-house internal audit function is required.

7.4 Risk Exposure

Monash IVF Group Limited provides assisted reproductive services in Australia and Malaysia and specialist women’s imaging services in Australia. The Group is committed to performing services in an open and transparent environment and in a manner that is honest and ethical. The Group embraces responsibility for corporate actions and encourages a positive impact on the environment and stakeholders including patients, employees, investors and the community.

Since its early pioneering days in assisted reproductive treatment, resulting in the first IVF pregnancy in 1973, Monash IVF Group Limited has played an important role in the local communities it serves and society at large. Its focus on evidenced based fertility care provides the opportunity to commit resources to scientific research, clinical teaching and training. The Group’s services are offered to all and do not discriminate, including nature and complexities of infertility.

From an ethical and social perspective, Monash IVF Group Limited and its subsidiary companies ensure national regulation and state legislation drives the standards of care to ensure it protects its patients, donors and any children born as a result of treatment provided by the Group.

All Monash IVF Group facilities meet the appropriate standards for accreditation including:

• Assisted reproductive treatment sites in Australia are accredited with the Reproductive Technology Accreditation Committee (RTAC) and the Group ensures appropriate documentation is held by sites,

• Doctors, nurses and scientists. This accreditation incorporates components covering ethics and safety in practice and management of adverse events.

• Day surgeries are accredited with National Safety and Quality Health Service (NSQHS) standards which ensure quality standards are consistent with an exceptional standard of care expected by consumers in health facilities.

• Diagnostic laboratories are accredited to ISO 15189 and relevant NPAAC Guidelines.

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Corporate Governance Statement continued

Principle 7 Recognise and Manage Risk (continued)

• Diagnostic imaging (ultrasound) facilities are accredited with the Department of Health Diagnostic Imaging Accreditation Scheme (DIAS).

• The Group’s Malaysian clinic whilst not legally requiring the same level of regulation, operates to the same standards having been externally accredited to the international RTAC standards.

The Group recognises that its staff and Doctors are instrumental to the success of the Organisation. Comprehensive recruitment, credentialing, induction, training and development programs are designed to attract and retain staff equipped to deliver outstanding customer care. Staff actively participate in the continual improvement of the Group’s internal policies and processes and are encouraged to participate in innovation and research.

The Monash IVF Group Workplace Health and Safety Policy framework covers policies on general safety in the workplace. Monash IVF Group Limited recognises protecting the environment is a critical issue and a key responsibility of the Business and corporate community. Monash IVF Group is an organisation that is not involved in manufacturing or resource extraction and hence it considers its environmental footprint to be small.

The Group adopts a philosophy of clinical excellence in an environment of safe and supportive service provision. No material environmental or social sustainability risks have been identified. The Group adopts the approach of a responsible corporate citizen with regard to the management of waste and hazardous materials. The Group is not a significant consumer of electricity, water or gas and accordingly, the opportunities for material reductions in utility consumption are limited.

The Quality Management System in place in each laboratory supports the review and monitoring of quality of product from suppliers. New consumables undergo a full quality screening process and products are thoroughly evaluated to review where and how products are manufactured before being used in the laboratories. All products are reviewed formally on an annual basis to ensure they maintain quality standards and informally on a day to day basis. Currently all Monash IVF Group clinics use predominantly products from the top two suppliers of laboratory products in Australia in order to maintain consistency in quality.

The Group takes cyber security and its potential consequences extremely seriously. The Group has comprehensive security arrangements in place to isolate attacks on its systems and ensure that attempted intrusions are identified and viruses are not spread across the Group’s network or systems. The Group’s IT systems operate safely and securely as demonstrated by a recent cyber-attack that failed to propagate through our systems. Our preventative controls isolated the attack to a comparatively small subset of system resources, while we hardened our firewall and email filtering to stop this and future attacks from coming through. Numerous levels of redundancy and backup are built into the IT systems providing a high degree of system availability and protection of data. The Group periodically engages an independent third party to review the Group’s cyber security risk. Recommendations from these reviews continue to be implemented and the Group continues to invest to further enhance cyber security measures in place.

Economic risk continues to be potentially material to Monash IVF Group Limited. Our services in Australia are indirectly funded to a significant extent by the Australian Federal Government through the Medicare Benefit Schedule and Extended Medicare Safety Net. Any change to the funding arrangements could lead to a reduction in revenue affecting financial performance and sustainability of the Group. Market contraction and changes to market dynamics can significantly affect business outcomes and is a risk for the Group. Market competitiveness has heightened in recent years with the introduction of low cost providers. One area where Monash IVF Group Limited has been integral in leading the industry has been in advocating for governing bodies to be more transparent in reporting outcomes of treatments to allow patients to be better informed before commencing treatment. Tightening industry standards on consistency of data gathering, outcome reporting and transparency of results to the community will lead to improved outcomes for patients and the industry generally.

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Corporate Governance Statement continued

Principle 8 Remunerate fairly and responsibly

8.1 Remuneration and Nomination Committee

As outlined above under ‘Structure the Board to add value’ Monash IVF Group Limited has a combined Remuneration and Nomination Committee which assists the Board with discharging its responsibilities to Shareholders with regard to developing and monitoring remuneration policies and practices for Directors, Senior Executives and employees.

The Committee works under the guidance of the Remuneration and Nomination Committee Charter and Remuneration Policy. All members of the Committee are non-executive independent Directors.

Details of the Committee members’ experience and technical expertise are set out in the directors’ biographies which can be viewed on the Board of Directors pages in the latest Annual Report. Details of the number of times the Committee met throughout the period and individual attendances of the members can be viewed in the Directors Report in the latest Annual Report.

8.2 Remuneration of executive and non-executive directors

Under the guidance of the Remuneration and Nomination Committee and the Remuneration Policy the Monash IVF Group Limited Board has established a framework for remuneration that is designed to ensure consistent and reasonable remuneration policies and practices are observed which optimise the attraction and retention of directors and management and fairly rewards Directors and senior management for positive performance.

Monash IVF Group Limited remuneration practices for Executive appointments are expanded on in the Remuneration Report. The Monash IVF Group Limited Remuneration Policy can be found on the Group website at: http://ir.monashivfgroup.com.au/Investor-Centre/?page=Corporate-Governance

8.3 Equity Based remuneration

The Board may award incentive payments to the CEO, CFO and Senior Executives in the form of equity. The Corporations Act prohibits key management personnel (or closely-related parties) of an ASX-listed Australian company from entering into an arrangement that would limit their exposure to an element of their remuneration subject to a holding lock. Equity-based awards are made on the condition that Corporations Act requirements are complied with.

Directors and officers cannot buy and sell securities when in possession of price sensitive information and during at minimum the following periods, referred to as Prohibited Periods:

• the period from the end of the Company’s financial year (30 June) until the announcement of the Company’s full year results to the ASX; the period from the end of the Company’s half year (31 December) until the announcement of the Company’s half year results to the ASX.

Approval from the Chair is required prior to any transacting in shares contemplated by directors and Managing Director, and approval from the Managing Director for any transacting contemplated by the CFO and Company Secretary.

A copy of the Securities Trading Policy is available on the Company’s website. Directors and senior executives are not permitted to hedge their exposure to Company securities. Employees, directors and senior executives are not permitted to use Company securities as collateral in any financial transaction, including margin loan arrangements.

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Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the year ended 30 June 2022

		Consolidated	Consolidated
	Note	2022	2021
		$’000	$’000
			Restated(2)
Revenue from services		192,294	183,605
Employee benefits expense(1)		(66,877)	(55,765)
Clinician fees		(33,621)	(32,673)
Raw materials and consumables used		(19,787)	(19,893)
IT and communications expense		(4,464)	(4,179)
Depreciation expense	2.4,2.5	(12,354)	(10,703)
Amortisation expense	2.6	(2,434)	(1,854)
Property expense		(5,525)	(3,820)
Marketing and advertising expense		(6,434)	(6,387)
Professional and other fees		(7,509)	(3,814)
Other expenses		(4,920)	(5,866)
Operating profit		28,369	38,651
Net finance costs	4.4	(2,147)	(2,451)
Profit before tax		26,222	36,200
Income tax expense	1.5	(7,720)	(10,513)
Netprofit after tax for theyear		18,502	25,687
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
Exchange difference on translation of foreign operations		(194)	(233)
Other comprehensive income/(loss) for theyear, net of tax		(194)	(233)
Total comprehensive income for theyear		18,308	25,454
Profit attributable to:
Owners of the Company		18,406	25,330
Non-controllinginterests		96	357
Profit for the year		18,502	25,687
Total comprehensive income attributable to:
Owners of the Company		18,212	25,097
Non-controllinginterests		96	357
Total comprehensive income for theyear		18,308	25,454
Earnings per share
Basic earnings per share (cents)	1.4	4.7	6.5
Diluted earningsper share(cents)	1.4	4.7	6.5

(1) FY2021 Includes JobKeeper Subsidy impact of $5.06m (refer note 1.1).

(2) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

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Consolidated Statement of Financial Position

for the year ended 30 June 2022

	Consolidated
	Note 2022 2021
	$’000 $’000 Restated(1)
	Current assets Cash and cash equivalents 4.5 7,874 8,761 Trade and other receivables 2.1 12,516 9,523 Inventory 2.2 5,254 4,217
	Total current assets 25,644 22,501
	Non current assets Equity accounted investment 1,052 942 Trade and other receivables 2.1 169 460 Plant and equipment 2.4 30,394 24,940 Right of use assets 2.5 64,666 42,350 Intangible assets 2.6 258,893 259,273
	Total non current assets 355,174 327,965
	Total assets 380,818 350,466
	Current liabilities Trade and other payables 2.3 19,237 18,559 Borrowings 4.3 - 1,629 Lease liabilities 7,131 5,840 Current tax liabilities 457 3,137 Contingent consideration 483 1,205 Employee benefits 3.1 10,867 10,710
	Total current liabilities 38,175 41,080
	Non current liabilities Borrowings 4.3 9,764 - Lease liabilities 60,335 38,519 Contingent consideration 488 628 Employee benefits 3.1 1,432 1,239 Deferred tax liability 1.5 731 558
	Total non current liabilities 72,750 40,944
	Total liabilities 110,925 82,024
	Net assets 269,893 268,442
	Equity Share capital 4.1 506,786 506,786 Reserves (136,796) (136,874) Profits reserve 60,662 59,009 Retained earnings (162,735) (162,735)
	Total equity attributable to Owners of the Company 267,917 266,186
	Non-controllinginterests 1,976 2,256
	Total equity 269,893 268,442

(1) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

The consolidated statement of financial position should be read in conjunction with the accompanying notes.

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Consolidated Statement of Changes in Equity

for the year ended 30 June 2022

Total equity $’000 251,371 25,764 (233)	25,531	137 (8,597)	268,442	268,442 18,502 (194)	18,308	272 (17,129)	269,893	(1)The other equity reserve represents the difference between the Issued Capital in Healthbridge Enterprises Pty Ltd and the consideration paid to acquire Healthbridge Enterprises Pty Ltd on 26 June 2014. (2)The profits reserve comprises the transfer of net profit for the period and characterises profits available for distributions as dividends in future periods. (3)Other reserves includes share based payments and foreign currency translation. (4)$376K dividend declared and paid to non controlling interest holders in KL Fertility. (5)30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2). The consolidated statement of changes in equity should be read in conjunction with the accompanying notes. (6)Dividends paid in FY2022 includes the FY22 interim dividend and the deferred FY21 final dividend paid in October 2021.
Non- controlling interest $’000 2,314 357 -	357	- (415)	2,256	2,256 96 -	96	- (376)(4)	1,976
Total $’000 249,057 25,407 (233)	25,174	137 (8,182)	266,186	266,186 18,406 (194)	18,212	272 (16,753)	267,917
Other reserves (3) $’000 33 - (233)	(233)	137 -	(63)	(63) - (194)	(194)	272 -	Consolidated balance at 30 June 2022 506,786 (136,811) 60,662 (162,735) 15
Retained earnings $’000 (162,735) - -	-	- -	(162,735)	(162,735) - -	-	- -
Profits reserve (2)(5) $’000 41,784 25,407 -	25,407	- (8,182)	59,009	59,009 18,406 -	18,406	- (16,753)
Other equity reserve (1) $’000 (136,811) - -	-	- -	(136,811)	(136,811) - -	-	- -
Contributed equity $’000 506,786 - -	-	- -	506,786	506,786 - -	-	- -
Consolidated balance at 30 June 2020(5) Profit for the period Total other comprehensive income/(loss)	Total other comprehensive income for the period	Transactions with owners in their capacity as owners directly in equity Share-based payment transactions Dividends paid	Consolidated balance at 30 June 2021	Consolidated balance at 30 June 2021(5) Profit for the period Total other comprehensive income/(loss)	Total other comprehensive income for the period	Transactions with owners in their capacity as owners directly in equity Share-based payment transactions Dividends paid(6)

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Consolidated Statement of Cash Flows

for the year ended 30 June 2022

	Consolidated
	Note 2022 2021
	$’000 $’000 Restated (1)
	Cash flows from operating activities Receipts from customers 190,684 183,067 JobKeeper Subsidy receipts - 7,406 Payments to suppliers and employees (149,963) (139,224)
	Cash generated from operations 41,720 51,249 Income taxespaid (9,831) (7,270)
	Net cash flowsgenerated from operating activities 4.5 31,889 43,979
	Cash flows from investing activities Payments for plant and equipment and intangible assets (11,763) (9,958) Payments for business acquisitions(includingtransactions costs) (3,399) (1,254)
	Net cash flows used in investing activities (15,162) (11,212)
	Cash flows from financing activities Proceeds of borrowings 26,500 11,000 Repayment of borrowings (18,129) (28,650) Interest paid on borrowings (613) (725) Payments of lease liabilities (8,634) (7,569) Dividendspaid 1.3 (16,753) (13,134)
	Net cash flows used in financing activities (17,629) (39,078)
	Total cash flows from activities (902) (6,311)
	Cash and cash equivalents at the beginning of the year 8,761 15,072 Effects of exchange rate changes on foreign currency cash flows and cash balances 15 -
	Cash and cash equivalents at end of theyear 4.5 7,874 8,761

(1) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

The consolidated statement of cash flows should be read in conjunction with the accompanying notes.

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Notes to the Consolidated Financial Statements

for the year ended 30 June 2022

Contents

Contents
Section 1: Our financial performance 1.1 Revenue and Expenses 1.2 Operating segments 1.3 Dividends 1.4 Earnings per share 1.5 Taxation	Section 2: Our operating asset base 2.1 Trade and other receivables 2.2 Inventory 2.3 Trade and other payables 2.4 Plant and equipment 2.5 Right of Use Assets 2.6 Intangible assets
Section 3: Our people 3.1 Employee benefits 3.2 Share-based payments 3.3 Key management personnel	Section 4: Our funding structure 4.1 Share capital and reserves 4.2 Financial risk management 4.3 Borrowings 4.4 Net finance costs 4.5 Cash and cash equivalents
Section 5: Our business portfolio 5.1 Controlled entities 5.2 Investments accounted for using the equity method 5.3 Parent entity 5.4 Deed of cross guarantee	Section 6: Other disclosures 6.1 Auditors’ remuneration 6.2 Comparative Balances 6.3 Events occurring after the reporting period 6.4 Commitment and contingencies 6.5 Reporting entity 6.6 Basis of preparation 6.7 New standards and interpretations

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Notes to the Consolidated Financial Statements continued for the year ended 30 June 2022

Section 1

Our Financial Performance

This section provides information that is most relevant to understanding the financial performance of the Group during the financial year and, where relevant, the accounting policies applied and the critical judgements and estimates made.

1.4 Earnings per Share

1.1 Revenue and Expenses 1.2 Operating Segments 1.5 Taxation 1.3 Dividends

1.1 Revenue and Expenses

Revenue recognition

Revenue is recognised when performance obligations have been satisfied, recovery of the consideration is probable and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the consideration received or receivable.

Rendering of services

Revenue from rendering of services is recognised on completion of services provided. Revenue is recognised when the customer has consumed the benefits of the service, whether on completion of a medical procedure, on supply of drugs, or on completion of analytical tests. If payments received from patients exceed the revenue recognised, the difference is recognised as deferred revenue.

Deferred revenue

Fees for fertility treatment paid in advance of performing the service are recognised as deferred revenue until the time the service is rendered to the customer when the fees are recognised as revenue.

Government grants

Grants from the government are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants relating to costs are recognised in comprehensive income over the period necessary to match them with the costs that they are intended to compensate.

In March 2020, the Australian Government announced the introduction of JobKeeper, an economic response package to the Coronavirus pandemic. Under the JobKeeper grant, businesses impacted by the Coronavirus were able to access a subsidy from the Government to continue paying their employees. Employers who have turnover under $1 billion were eligible for the subsidy if their turnover reduces by more than 30 per cent relative to the comparable prior year period for at least a month between April and September 2020. The COVID-19 impact on the group turnover in April 2020 resulted in a greater than 30% reduction compared to April 2019 due to the temporary suspension of IVF procedures requiring hospitalisation between 25 March and 27 April 2020 in Australia. Accordingly, the Group was eligible to claim a fortnightly payment of $1,500 per eligible employee from 30 March 2020 to 30 September 2020.

JobKeeper payments receivable from the ATO are recognised by a ‘for profit’ entity as a government grant as the payment is a wage subsidy provided by the Government with the objective of keeping the organisation connected with the economy and their workers during the COVID-19 pandemic period between April and September 2020. The related amounts paid to employees are recognised as employee benefit expenses. The JobKeeper payment is recognised only when there is reasonable assurance that the organisation will comply with the conditions and that the grant will be received. The income is recognised in profit and loss matching the employee salary expense which is what the grant was intended to compensate.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

1.1 Revenue and Expenses (continued)

As a government grant, there is an accounting policy choice whereby the organisation presents the grant income gross from the expense or net of the related expense. The grant income has been disclosed net of the related employee expense as the subsidy support was used to fund existing employee wages during the period.

The grant amount recognised in employee benefits expense is $0.0m (FY21: $5.7m).

1.2 Operating segments

The Group determines and presents operating segments based on information that internally is provided to and used by the Chief Executive Officer, who is the Group’s Chief Operating Decision Maker (CODM). An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. The financial results of each operating segment are regularly reviewed by the Group’s Chief Executive Officer in order to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the Chief Executive Officer include items directly attributable to a segment, as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets, head office expenses and income tax assets and liabilities. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and intangible assets other than goodwill.

The basis of inter-segmental transfers is market pricing. Results are calculated before consideration of net borrowing costs and tax expense.

Identification of reportable operating segments

The two geographic segments being Australia and International reflect Monash IVF Group’s reporting structure to the CODM. Monash IVF Group considers that the two geographic segments are appropriate for segment reporting purposes under AASB 8 “ Operating Segments ”. These segments comprise the following operations:

• Monash IVF Group Australia: provider of Assisted Reproductive Services, Ultrasound and other related services.

• Monash IVF Group International: provider of Assisted Reproductive Services in South East Asia.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

Segment results

	Monash IVF	Monash IVF	Total
	Group Australia	Group
		International
2022	$’000	$’000	$’000
**Total revenue –external **	182,098	10,196	192,294
Underlying EBIT(before non-recurring items)(1)	30,578	2,831	33,409
Acquisition costs(1)	(2,142)	-	(2,142)
Commissioning costs(1)	(1,855)	(648)	(2,503)
Fertility Solutions EarnOut(1)	(395)	-	(395)
Reported EBIT	26,186	**2,183 **	28,369
Net finance costs	(2,110)	(37)	(2,147)
Profitbefore income tax expense	24,076	2,146	26,222
Income tax expense	(7,062)	(658)	(7,720)
Profit for theyear	17,014	1,488	18,502
Depreciationand amortisationexpense	(14,073)	(715)	(14,788)
Segment assets	365,305	15,513	380,818
Acquisition of plant and equipment and intangibles	11,759	499	12,258
Segment liabilities	104,235	6,690	110,925

	Monash IVF	Monash IVF	Total
	Group	Group
	Australia	International
2021(Restated) (3)(4)	$’000	$’000	$’000
Total revenue – external	172,902	10,703	183,605
Underlying EBIT(before non-recurring items)(2)	31,456	3,663	35,119
Proceeds from JobKeeper(2)	5,058	-	5,058
Fertility Solutions Earn Out(2)	(678)	-	(678)
Sydney CBD clinic premise costs(2)	(848)	-	(848)
Reported EBIT	34,988	3,663	38,651
Net finance costs	(2,350)	(101)	(2,451)
Profit before income tax expense	32,638	3,562	36,200
Income tax expense	(9,652)	(861)	(10,513)
Profit for theyear	22,986	2,701	25,687
Depreciation and amortisation expense	(11,917)	(640)	(12,557)
Segment assets	336,543	13,923	350,466
Acquisition of plant and equipment and intangibles	9,916	117	10,033
Segment liabilities	79,124	2,900	82,024

(1) Non-regular items include transaction costs on acquisition opportunities ($2,141,934 pre-tax), commission costs including lease expenditures ($2,502,703 pre-tax) and Fertility Solutions Earn Out Fair Value adjustment ($395,306).

(2) Non-regular items include JobKeeper Subsidy impact ($5,058,000 pre-tax), Sydney CBD activity ($848,000 pre-tax), and Fertility Solutions Earn Out Fair Value adjustment ($678,000).

(3) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

(4) 30 June 2021 amounts have been restated due to business development and related costs relating to Asia, previously reported as part of the Australian segment. In FY22, these amounts have been reported as part of the individual segment, and the FY21 segment results reflect the reclassification of costs amounting to $583,311 from Australia.

78 | Monash IVF Group

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CFO REPORT

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MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

1.3 Dividends

Dividends during the year	Franking	Payment Date	Per share (cents)	2022 $’000	2021 $’000
Interim dividend in respect of the current financial year	Fully franked	4 April 2022	2.2	8,571	8,182
					-
Final dividend in respect of	Fully franked	8 October 2021	2.1	8,182
the prior financial year
Total			4.3	16,753	8,182
Current liability – Dividend payable				-	4,952
Paid in cash during the year				16,753	13,134
Dividend franking account
Amount of franking credits available at 30 June to shareholders for subsequent financialyears				11,010	11,998

Monash IVF Group’s dividend policy is to target a payout ratio of between 60% and 70% of Statutory NPAT. The level of payout ratio is expected to vary between periods depending on general operating conditions, operating cashflow and profit, funding, strategic growth opportunities and availability of franking credits.

Subsequent to 30 June 2022, the Board has declared a fully franked 2022 final dividend of 2.2 cents per share. Total dividend declared for FY22 is 4.4 cents. The aggregate amount of the proposed dividend expected to be paid out of retained profits at 30 June 2022, but not recognised as a liability at year end is $8,571,966.

1.4 Earnings per share

	2022	2021
Earnings per share	Cents per share	Cents per share
		(Restated) (2)
Basic earnings per share	4.7	6.5
Diluted earningsper share	4.7	6.5
	2022	2022
Profit attributable to ordinary shareholders	$’000	$’000 (Restated) (2)
Profit after income tax attributable to the ordinary shareholders used in calculating basic and diluted earnings per share	18,406	25,330
	2022	2021
Weighted average number of shares	Number	Number
Weighted average number of ordinary shares used in calculating basic earningsper share	389,634,840	389,634,840
Adjustments for calculation of diluted earnings per share (1)	1,908,165	1,309,892
Weighted average number of ordinary shares used in calculating diluted earningsper share	391,543,005	390,944,732

(1) The calculation of the weighted average number of shares has been adjusted for the effect of share based rights granted from the date of issue. Refer to Section 3.2 for further details.

(2) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

1.4 Earnings per share (continued)

Basic earnings per share

The calculation of basic earnings per share has been based on profit attributable to ordinary shareholders and weighted average number of ordinary shares outstanding.

Diluted earnings per share

The calculation of diluted earnings per share has been based on profit attributable to ordinary shareholders and weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential ordinary shares.

1.5 Taxation

Income Tax expense

	2022	2021
	$’000	$’000
		Restated (1)
Current tax	7,782	11,319
Deferred tax	(305)	(894)
Under/(over) provided inprioryear	243	88
Total income tax expense	7,720	10,513
Numerical reconciliation of income tax expense to prima facie tax
payable
Profit before income tax expense	26,222	36,200
Tax at the Australian tax rate of 30% (2021: 30%)	7,867	10,860
Tax effect of amounts which are not deductible in calculating taxable
income:
Effect of tax rates in foreign jurisdiction	(129)	(256)
Research and development	(250)	(250)
Other items	(11)	71
Under/(over) provision ofpreviousyear	243	88
Income tax expense	7,720	10,513

(1) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or to items recognised directly in equity or in other comprehensive income (OCI). Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date.

80 | Monash IVF Group

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FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued for the year ended 30 June 2022

30 June 2022 Deferred tax asset Deferred tax liability - (1,276) - (5,733) - - 1,087 - 803 - 621 - 3,767 -	(7,009)	6,278	(731)
	6,278	(6,278)	-
Recognised directly in equity - - - 132 - - -	132	-	- -
Recognised in profit or loss (743) - - 221 208 31 (22)	(305)	-
30 June 2021 Restated (1) Deferred tax asset Deferred tax liability - (533) - (5,733) - - 734 - 595 - 590 - 3,789 -	(6,266)	5,708	(558)
	5,708	(5,708)	-
Recognised in profit or loss Recognised directly in equity (225) - - 211(1) 494 - - (111) (40) - 13 - 651 -	100	-	Net tax assets/(liabilities) - (1,551) - -
	893	-
1 July 2020 Restated (1) Deferred tax asset Deferred tax liability - (308) - (5,944) - (494) 845 - 635 - 577 - 3,138 -	(6,746)	5,195
	5,195	(5,195)
$’000 Plant and equipment Intangible assets Receivables Other Leases Trade payables and provisions Employee benefits	Tax (liabilities)/assets before set off	Set off tax

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

1.5 Taxation (continued)

Recognition and Measurement

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 the following temporary differences:

• 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, and differences relating to investments in subsidiaries and associates and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future.

• In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Offsetting deferred tax

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 income 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 assets and liabilities will be realised simultaneously.

Tax consolidation

Monash IVF Group Limited and its wholly Australian owned controlled entities are part of a tax consolidation group under Australian taxation law. Monash IVF Group Limited is the head entity in the tax-consolidated group. Entities within the tax consolidated group have entered into a tax funding arrangement and a tax sharing agreement with the head entity. Under the terms of the tax funding arrangement, Monash IVF Group Limited and each of the entities in the tax consolidated group have agreed to pay (or receive) a tax equivalent payment to (or from) the head entity, based on the current tax liability or current tax asset of the entity.

Key estimate and judgement: Key estimate and judgement: Recovery of deferred tax assets Income taxes A deferred tax asset is recognised to the extent that it The Group is subject to income taxes in Australia and is probable that future taxable profits will be jurisdictions where it has foreign operations. available against which the temporary difference can Judgement is required in determining the worldwide be utilised. Deferred tax assets are reviewed at each provision for income taxes and in assessing whether reporting date and are reduced to the extent that it is deferred tax balances are recognised on the statement no longer probable that the related tax benefit will be of financial position. Changes in circumstances will realised. alter expectations, which may impact the amount of provision for income taxes and deferred tax balances recognised.

82 | Monash IVF Group

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BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

Section 2 Our Operating Asset Base

This section provides information relating to the Group’s Operating Base, highlighting the primary
operating assets used and liabilities incurred to support the Group’s operating activities.
2.1 Trade and other receivables 2.4 Plant and equipment
2.2 Inventory 2.5 Right of use of assets
2.3 Trade and other payables 2.6 Intangible assets

2.1 Trade and other receivables

	2022	2021
	$’000	$’000
Current
Trade receivables	5,067	5,030
Provision for expected credit losses	(846)	(831)
Net trade receivables	4,221	4,199
Other debtors	2,290	731
Accrued income	559	328
Prepayments	4,063	2,942
GST receivable	1,383	1,323
Total current trade and other receivables	12,516	9,523
Non current
Other debtors	169	460

Provision for expected credit losses

The consolidated entity has recognised an expense of $15,000 (2021: $84,000) in profit or loss in respect of impairment of receivables for the year ended 30 June 2022. The increase in provision for expected credit losses during the year was predominately driven to reflect counterparties that have been impacted by the current economic environment.

Trade receivables

Trade receivables are recognised initially at fair value and subsequently measured at amortised costs using the effective interest method less provision for expected credit losses. A financial asset (including trade receivables) not classified as at fair value through profit or loss is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. AASB 9 replaced the ‘incurred loss model’ in AASB 139 with an ‘expected credit loss’ (ECL) model. Loss allowances for trade receivables are measured at an amount equal to 12 month ECLs. 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, debtor ageing and credit assessment including forward-looking information.

Credit Risk

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

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

2.1 Trade and other receivables (continued)

Patient fees for most treatments are received in advance and recognised as deferred revenue if the procedure is yet to be performed. This reduces the risk of non-collectability. Outstanding receivables predominantly relate to amounts owing from Medicare and storage fee patient accounts. Payment reminder notices are issued to patients with outstanding balances at 30, 60 and 90 days. After which, collection of this debt may be handled by a collection agency. The Group does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the Group.

Prepayments

Payments made for the receiving of goods or services rendered in future years are recognised as a prepayment.

2.2 Inventory

	2022	2021
	$’000	$’000
Consumables – at cost	5,254	4,217
Total inventory	5,254	4,217

Inventories are recorded using the FIFO method and are valued at the lower of cost and net realisable value. Inventories include medical supplies to be consumed in providing future patient services.

2.3 Trade and other payables

	2022	2021
	$’000	$’000
Current
Trade payables	3,340	2,245
Accrued expenses	7,238	9,019
Deferred revenue	8,659	7,295
Total trade and otherpayables	19,237	18,559

Trade and other payables are carried at amortised cost and are not discounted. These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts are unsecured and are paid in accordance with vendor terms.

2.4 Plant and equipment

	2022	2021
	$’000	$’000
Cost
Opening balance at 1 July	68,202	58,169
Additions	10,203	10,033
Closing balance at 30 June	78,405	68,202
Accumulated depreciation and impairment losses
Opening balance at 1 July	(43,262)	(39,058)
Depreciation for theyear	(4,749)	(4,204)
Closing balance at 30 June	(48,011)	(43,262)
Carrying amount
At 1 July (Opening balance)	24,940	19,111
At 30 June(Closing balance)	30,394	24,940

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FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued for the year ended 30 June 2022

2.4 Plant and equipment (continued)

Capital commitments

Expenditure contracted for but not recognised as liabilities:

	2022	2021
	$’000	$’000
Capitalplant and equipment	13,598(1)	613(1)

(1) Capital plant and equipment includes the new Melbourne, Darwin, Penrith, Brisbane, Bali and Gold Coast fertility clinic and day hospital projects in development.

Items of plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring the site on which they are located and capitalised borrowing costs. When parts of an item of plant and equipment have different useful lives, they are accounted for as separate items (major components) of plant and equipment.

Gains and losses on disposal of an item of plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of plant and equipment and are recognised on a net basis within “other income” in profit or loss. The cost of replacing part of an item of plant and equipment is recognised in the carrying amount of the item if it is probable that the future economic benefits embodied with the part will flow to the Group and its cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the dayto-day servicing of the plant and equipment are recognised in profit or loss as incurred.

Key estimate and judgement:

Depreciation

The Group’s plant and equipment are depreciated over their useful economic lives between 2-10 years.

Depreciation methods, useful lives and residual values are reviewed at each reporting date. Depreciation is recognised in profit or loss on a straight line basis over the estimated useful lives of each part of an item of plant and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset.

2.5 Right of Use Assets

Leases as lessee

$’000		2022
	Buildings	Equipment	Total
Cost
Opening balance at 1 July	68,322	1,770	70,092
Additions / modifications	30,394	-	30,394
Disposals	(1,479)	-	(1,479)
Closing balance at 30 June	97,237	1,770	99,007
Accumulated depreciation
Opening balance at 1 July	(27,171)	(571)	(27,742)
Depreciation for the year	(7,429)	(176)	(7,605)
Disposals	1,006	-	1,006
Closing balance at 30 June	(33,594)	(747)	(34,341)
Carrying amount
At 1 July (Opening balance)	41,151	1,199	42,350
At 30 June(Closing balance)	63,643	1,023	64,666

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

2.5 Right of Use Assets (continued)

$’000		2021
	Buildings	Equipment	Total
Cost
Opening balance at 1 July	57,705	1,770	59,475
Additions / modifications	12,397	-	12,397
Disposals	(1,780)	-	(1,780)
Closing balance at 30 June	68,322	1,770	70,092
Accumulated depreciation
Opening balance at 1 July	(22,566)	(395)	(22,961)
Depreciation for the year	(6,323)	(176)	(6,499)
Disposals	1,718	-	1,718
Closing balance at 30 June	(27,171)	(571)	(27,742)
Carrying amount
At 1 July (Opening balance)	35,139	1,375	36,514
At 30 June(Closing balance)	41,151	1,199	42,350

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost less any accumulated depreciation and impairment losses 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 the interest rate implicit in the lease, or if the rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.

The lease liability is subsequently increased by the interest cost on the lease liability and decreased by the lease payment made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the lease liabilities and right-of-use assets recognised.

The Group leases property and equipment. The leases typically run for a period of between one to ten years, with an option to renew the lease after this date. Lease payments are renegotiated at periods to reflect market rentals. The Group has elected not to recognise right of use assets and lease liabilities for short term and/or low value assets such as IT and office equipment.

	2022	2021
	$’000	$’000
Amounts recognised in profit and loss
Depreciation on right of use assets	7,605	6,499
Interest on lease liabilities	1,720	1,386
Expenses relating to low value assets	73	89
Amounts recognised in statement of cash flows
Payments of lease liabilities	8,634	7,569

86 | Monash IVF Group

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FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

2.5 Right of Use Assets (continued)

Extension options

Some leases contain extension options exercisable by the Group up to one year before the end of the noncancellable contract period. Where practicable, the Group seeks to include extension options in new leases to provide operational flexibility. The extension options held are exercisable 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 a significant event or significant changes in circumstances within its control. The Group has estimated that the potential future lease payments, should it exercise the extension option, would result in an increase in lease liability of $5.9 million.

2.6 Intangible assets

$’000	Goodwill	Software	Trademark	Total
2022
Net book value
Balance at 1 July 2021(1)	233,169	6,259	19,845	259,273
Additions	-	2,054	-	2,054
Amortisation expense	-	(2,434)	-	(2,434)
Balance at 30 June 2022	233,169	5,879	19,845	258,893
At 30 June 2022
Cost	233,169	14,093	19,845	267,107
Accumulated amortisation and impairment losses	-	(8,214)	-	(8,214)
Balance at 30 June 2022	233,169	5,879	19,845	258,893
2021
Net book value
Balance at 1 July 2020	233,169	8,113	19,845	261,127
Amortisation expense	-	(1,854)	-	(1,854)
Balance at 30 June 2021(1)	233,169	6,259	19,845	259,273
At 30 June 2021
Cost	233,169	12,039	19,845	267,060
Accumulated amortisation and impairment losses	-	(5,780)	-	(7,787)
Balance at 30 June 2021(1)	233,169	6,259	19,845	259,273

(1) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

Software

Software has a finite useful life and is carried at cost less accumulated amortisation and impairment losses. The cost of system development, including purchased software, is capitalised and amortised over the estimated useful life, being three to eight years. Amortisation methods, useful lives and residual values are reviewed at each financial year end and adjusted if appropriate.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

2.6 Intangible assets (continued)

Software-as-a-Service (SaaS) arrangements

SaaS arrangements are service contracts providing the Group with the right to access the cloud provider’s application software over the contract period. As such, the Group does not receive a software intangible asset at the contract commencement date.

The following outlines the accounting treatment of costs incurred in relation to SaaS arrangements:

• Costs recognised as an operating expense over the term of the service contract include fees for use of application software and customization costs.

• Costs recognised as an operating expense as the service is received include configuration costs, data conversion and migration costs, testing costs and training costs.

• Costs incurred for the development of software code that enhance or modifies or creates additional capability to an existing on premise system, and meets the definition of and recognition criteria for an intangible asset are recognized as intangible software assets.

Trademark

Trademarks are reported at historical cost less impairment. Trademarks have an indefinite useful life where there is no expiry and no foreseeable limit on the period of time over which these assets are expected to contribute to the cash flows of the Group. Similar to goodwill, these are tested for impairment annually.

Goodwill

Goodwill on consolidation represents the excess of the cost of an acquisition over the fair value of the Group’s share of net identifiable assets of the acquired entities at the date of acquisition. Goodwill on the acquisition of subsidiaries is included in intangible assets. Goodwill is measured at cost less accumulated impairment losses. Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired.

Impairment testing

Goodwill and other indefinite life intangible assets become impaired when their carrying value exceeds their recoverable amount. Recoverable amount is the greater of fair value less costs to sell or value in use. In determining the recoverable amount, judgments and assumptions are made in the determination of likely net sale proceeds or in the determination of future cash flows which support a value in use. Specifically, with respect to future cash flows, judgments are made in respect to the quantum of those future cash flows and the discount rates (cost of capital and debt) applied to determining the net present value of these future cash flows.

The carrying amounts of the Group’s non financial 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. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows of other assets or groups of assets (the ‘cash-generating’ units). The recoverable amount of an asset or cash-generating unit (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 pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.

An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. 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 and then to reduce the carrying amount of the other assets in the CGU (group of CGUs) on a pro rata basis. 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 and amortisation, if no impairment loss had been recognised.

88 | Monash IVF Group

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BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

2.6 Intangible assets (continued)

The following CGUs were tested for impairment during the year:

	2022	2021
	$’000	$’000
Goodwill and trademark allocated to:
Australia	219,030	219,030
Ultrasound	28,232	28,232
International	5,752	5,752
	253,014	253,014

Impairment testing assumptions

The recoverable amount of a CGU is based on value-in-use calculations. The following key assumptions were utilised for the impairment testing:

• The respective discount rate was a pre-tax measure based on the rate of 10 year Government bonds issued by the Australian and Malaysian Government respectively in the relevant market, adjusted for a risk premium to reflect the increased risk of investing in equities generally and the systemic risk of the specific CGU. A pretax discount rate of 10.5% (FY21: 10.4%) for the Australian CGU, 10.5% (FY21: 10.4%) for the Ultrasound CGU and 11.5% (FY21: 11.1%) for the International CGU was applied in determining the recoverable amount. The discount rate and related risk factors also had regard to the current COVID-19 environment.

• Cash flow forecasts are based on the Board-approved FY23 budget, projected for four years plus a terminal value. The FY23 budget reflects management’s best estimate of forecast operating performance having regard to the IVF markets in Australia and Malaysia, anticipated ultrasound activity as the business emerges from COVID-19 impacted operational challenges and economic uncertainties during and post the COVID-19 pandemic.

• A long-term growth rate into perpetuity of 3.0% (FY21: 2.5%) has been determined based on an assessment of historical growth rates, expectations of future growth rates and market specific dynamics.

Impact of possible changes in key assumptions

All CGU’s in the Group have been tested for impairment and have met their required hurdle rates to support the current carrying values. Any reasonable possible change to relevant assumptions and inputs would not result in the recoverable amount being lower than the carrying amount, noting that recovery of the Ultrasound CGU to historical levels of activity is a key input in the Group’s assessment..

Result of Impairment testing

The recoverable amount of all CGU’s are deemed recoverable.

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Notes to the Consolidated Financial Statements continued for the year ended 30 June 2022

Section 3 Our People

This section provides financial insight into employee reward and recognition for creating a high performance culture and the Group’s ability to attract and retain talent. This section is to be read in conjunction with the Remuneration Report, as set out in the Directors Report.

3.1 Employee benefits 3.3 Key management personnel

3.2 Share-based payments

3.1 Employee benefits

	2022	2021
	$’000	$’000
Current liability
Long service leave	5,305	5,483
Annual leave	5,562	5,227
Total current employee benefits	10,867	10,710
Non current liability
Longservice leave	1,432	1,239
Total non current employee benefits	1,432	1,239
Total employee benefitsprovision	12,299	11,949

Provision for employee benefits

Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits are expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefits are measured at their present value of the estimated future cash outflow to be made in respect of services provided by the employees up to the reporting date. The discount rate is the yield at the reporting date on corporate bonds issued by the relevant markets that have maturity dates approximating the terms of the Group’s obligations.

3.2 Share-based payments

Senior executives’ long-term incentive plan

The Group will provide benefits to certain employees in the form of share-based payment options and/or performance rights. The fair values of these instruments granted under the plans are recognized as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognized over the period during which the employee becomes unconditionally entitled to the instruments.

Fair value is measured at grant date using a combination of Binomial tree and Monte-Carlo Simulation models, for the respective performance hurdles. The valuation was performed by an independent valuer which models the future security price.

The fair value of the instruments granted excludes the impact of any non-market vesting conditions. Non-market vesting conditions are included in assumptions about the number of instruments that are expected to become exercisable. At each reporting date, the entity revises its estimate of the number of instruments that are expected to become exercisable.

The employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in profit and loss with a corresponding adjustment to equity.

Under the Company’s Long Term Incentive (“LTI”) Plan, awards constituting share appreciation rights, performance rights or options, or any different class or category of award on such terms as the Board determines, may be offered to eligible persons selected by the Directors. Key management personnel and other senior management are eligible to participate under the LTI Program.

90 | Monash IVF Group

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CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

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FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued for the year ended 30 June 2022

3.2 Share-based payments (continued)

The senior executive LTI are performance rights plans with vesting rights dependent upon the satisfaction of predefined performance hurdles and continuous employment. Current performance hurdles are based on achievement of pre-defined Earning Per Share (“EPS”) Hurdle and a Total Shareholder Return (“TSR”) Hurdle over a three year performance period. The Board may amend the performance hurdles or specify a different performance hurdle(s) if it considers it necessary. For further detail on the specific LTI plans, refer to the Remuneration Report.

Long term incentive program (equity settled)

A description of the equity plans applicable during the year are described below:

Grant date	Vesting conditions
(2022 Plan) 19 November 2021	EPS - Subject to meeting certain EPS hurdles and 3 year service period to 30 June 2024 TSR - Subject to Total Shareholder Return hurdles and a 3 year service period to the 11th tradingdayafter the FY24 results announcement
(2021 Plan) 16 October 2020	EPS - Subject to meeting certain EPS hurdles and 3 year service period to 30 June 2023 TSR - Subject to Total Shareholder Return hurdles and a 3 year service period to the 11th tradingdayafter the FY23 results announcement
(2020 Plan) 16 October 2019	EPS - Subject to meeting certain EPS hurdles and 3 year service period to 30 June 2022 TSR - Subject to Total Shareholder Return hurdles and a 3 year service period to the 11th tradingdayafter the FY22 results announcement
(2019 Plan) 20 December 2018	EPS - Subject to meeting certain EPS hurdles and 3 year service period to 30 June 2021 TSR - Subject to Total Shareholder Return hurdles and a 3 year service period to the 11th tradingdayafter the FY21 results announcement

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Notes to the Consolidated Financial Statements continued for the year ended 30 June 2022

3.2 Share-based payments (continued)

Key estimate and judgement: Share-based payments

As a result of the combination of non-market (EPS) and market (TSR) vesting conditions, the fair value of the share rights plan has been measured using Binomial tree and Monte Carlo simulation respectively. The inputs used in the measurement of the fair values at grant date of the equity-settled share based payment plans were as follows:

	2022	2021	2020	2019
Fair value at grant date (EPS condition)	$0.93	$0.61	$0.94	$1.00
Fair value at grant date (TSR condition)	$0.49	$0.32	$0.46	$0.45
Share price at grant date	$0.93	$0.62	$0.94	$1.00
Expected volatility – Monash IVF	40%	40%	35%	30%
Expected volatility – ASX 300 Healthcare Index	16%	16%	15%	15%
Expected life (years)	6	6	6	6
Expected dividends	0.00%	0.00%	6.0%	6.0%
Risk free interest rate (based on government bonds)	0.95%	0.13%	0.83%	1.88%

Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price, particularly over the historical period commensurate with the expected term. The expected term of the instruments has been based on historical experience and general instrument holder behavior.

Reconciliation of outstanding performance rights

The number of performance rights under the company’s long-term incentive plan were as follows:

2022 Grant Date	Expiry Date	Balance at 1July 2021	Granted during the year	Lapsed during the year	Forfeited during the year	Vested during the year	Balance at 30 June 2022
20 Dec 2018	30 June 2021	40,359	-	(40,359)1	-	-	-
16 Oct 2019	30 June 2022	368,012	-	(184,006)2	-	-	184,006
16 Oct 2020	30 June 2023	901,521	-	-	(45,281)3	-	856,240
19 Nov 2021	30 June 2024	-	917,992	-	(50,073)	-	867,919
		1,309,892	917,992	(224,365)	(95,354)	-	1,908,165

(1) TSR vesting conditions for performance rights granted in FY19 were not satisfied therefore these rights lapsed.

(2) EPS vesting conditions for performance rights granted in FY20 were not satisfied therefore these rights lapsed.

(3) Forfeited due to not satisfying service conditions.

2021 Grant Date	Expiry Date	Balance at 1July 2020	Granted during the year	Lapsed during the year	Forfeited during the year	Vested during the year	Balance at 30 June 2021
29 Jan 2018	30 June 2020	47,605	-	(47,605)1	-	-	-
20 Dec 2018	30 June 2021	134,531	-	(94,172)2	-	-	40,359
16 Oct 2019	30 June 2022	368,012	-	-	-	-	368,012
16 Oct 2020	30 June 2023	-	901,521	-	-	-	901,521
		550,148	901,521	(141,777)	-	-	1,309,892

(1) TSR vesting conditions for performance rights granted in FY18 were not satisfied therefore these rights lapsed.

(2) EPS vesting conditions for performance rights granted in FY19 were not satisfied therefore these rights lapsed

92 | Monash IVF Group

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CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

3.3 Key management personnel

	2022	2021
Compensation	$	$
Short-term employee benefits	2,127,923	2,483,141
Post-employment benefits	138,639	128,914
Share-basedpayments	250,640	114,476
Total key managementpersonnel compensation	2,517,202	2,726,531

For further information on key management personnel refer to the Remuneration Report.

Transactions with key management personnel and related parties

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

Section 4

Our Funding Structure

This section provides information relating to the Group’s capital structure and its exposure to financial risk, how they affect the Group’s financial position and performance, and how the risks are managed.

The Directors determine the appropriate capital structure of Monash IVF, specifically how much is raised from the shareholders (equity) and how much is borrowed from financial institutions (debt) in order to finance the current and future activities of the Group. The Directors review the Group’s capital structure regularly and do so in the context of the Group’s ability to continue as a going concern, to invest in opportunities that grow the business and enhance shareholder value.

4.1	Share capital and reserves	4.4 Net finance costs
4.2	Financial risk management	4.5 Cash and cash equivalents
4.3	Borrowings

4.1 Share capital and reserves

	Number of shares $’000
Openingbalance at 1 July2021	389,634,840 506,786
Closingbalance at 30 June 2022	389,634,840 506,786

Ordinary shares

Ordinary shares are classified as share capital. Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. Ordinary shares entitle the holder to one vote, either in person or by proxy, at a meeting of the Company.

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

Capital management

The Group’s policy is to maintain a strong capital base so as to maintain investor and market confidence and to sustain future growth of the business. Management monitors the return on capital as well as the level of dividends to ordinary shareholders. The Board of Directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital structure. In order to maintain an optimal capital structure, the Group may amend the amount of dividends declared and paid, return capital to shareholders or increase borrowings or equity to fund growth and future acquisitions.

Other equity reserve

The other equity reserve represents the difference between the issued capital in Healthbridge Enterprises Pty Ltd and Monash IVF Group Ltd on 26 June 2014, being the date Monash IVF Group Ltd acquired Healthbridge Enterprises Pty Ltd.

Profits reserve

The profits reserve comprises the transfer of net profit for the period and characterises profits available for distribution as dividends in future periods.

94 | Monash IVF Group

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FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

4.1 Share capital and reserves (continued)

Share option reserve

Share option reserve represents the grant-date fair value of equity-settled share-based payment awards granted to employees, which is generally recognised as an expense, with corresponding increase in equity over the vesting period of the awards.

Hedge reserve

The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments related to highly probable forecast transactions. The hedging reserve is used to record gains or losses on derivatives that are designated and qualify as cash flow hedges and that are recognised in OCI. Amounts are reclassified to profit or loss when the associated hedged transaction affects profit or loss.

Foreign currency translation reserve

The translation reserve comprises all foreign currency differences arising from the translation of the financial statements of foreign operations.

Escrow arrangements

The following ordinary shareholders have entered into voluntary escrow arrangements in relation to certain ordinary shares they hold in Monash IVF Group Ltd. An ‘escrow’ is a restriction on sale, disposal, or encumbering of, or certain other dealings in respect of, the Shares concerned for the period of the escrow, subject to exceptions set out in the escrow arrangement.

30 June 2022 30 June 2021	30 June 2022 30 June 2021
Number of shares subject to escrow (m) Escrowed shares (as a % of shares on issue Number of shares subject to escrow (m)	Escrowed shares (as a % of shares on issue) Escrowed shares
Doctors(1) (2) 13.8 3.5% 14.3 SydneyUltrasound for Women(3) 1.2 0.3% 1.2	3.7% 0.3%
Total 15.0 3.8% 15.5	4.0%

(1) FY22 Includes 1.0m shares subject to escrow held by Richard Henshaw (Executive Director) (FY21:1.0m shares)

(2) Doctors

The escrow applied to a pre-IPO Doctor was calculated by reference to the aggregate value of that person’s prereorganisation equity interests in Healthbridge Enterprises Pty Ltd as follows:

Shares equivalent to 10% of a Doctor’s interest prior to the re-organisation were held in short-term escrow, with 3.33% released each year from escrow on the first trading day in Shares following the Company’s FY15, FY16 and FY17 financial results announcements to the ASX. This concluded the release of the pre-IPO doctor short-term escrow.

Shares held in long-term escrow are subject to the following conditions:

1. Shares equivalent to 20% of a Doctor’s interest prior to the re-organisation will be released when the Doctor reaches the age of 63. These shares may be otherwise released from escrow in the following circumstances:

2. for Doctors who were aged 63 or older at the time of re-organisation or who turned 63 within two years of Completion, these shares can be released from escrow from June 2016; or

3. where a Doctor becomes a ‘relocated leaver’ (as described below), these Shares can be released from escrow five years after the date that they become a ‘relocated leaver’; or

4. where a Doctor dies or leaves the Group as a result of becoming permanently disabled or seriously disabled, these shares can be released from escrow on the date of the relevant occurrence (as resolved by the Board acting reasonably); or

5. if the Board determines to release the shares from escrow earlier.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

4.1 Share capital and reserves (continued)

1. Shares equivalent to 20% of a Doctor’s interest prior to re-organisation can be released from escrow:

2. on retirement by the Doctor from the ARS industry (provided a Doctor must have used their best endeavours to transition their practice to another Doctor to the satisfaction of the Board); or

3. if the Doctor becomes a ‘good leaver’ or a ‘relocated leaver’ (as described below); or

4. five years after the Doctor leaves Monash IVF Group in other circumstances.

Doctors will be able to sell any non-escrowed Shares at any time, subject to complying with insider trading restrictions and the Group’s Securities Trading Policy.

The escrow arrangements describe the circumstances in which a Doctor is a ‘good leaver’ or a ‘relocated leaver’ in the following manner:

• (a) A Doctor is a ‘good leaver’ where:

• they leave the Group as a result of death, serious disability or permanent incapacity through ill health (as determined by the Group’s Board, acting reasonably); or

• they or the Group terminates the Doctor’s contract in specific circumstances; or

The Board determines, in its discretion, that the Doctor is a ‘good leaver’.

• (b) A Doctor is a ‘relocated leaver’ if they terminate their contract and the Board is satisfied that:

  • the Doctor genuinely intends to relocate permanently to a place which is more than 100 km from any clinic operated by the Group or any of its subsidiaries; and

  • the Doctor also intends to provide Assisted Reproductive Services in the place the Doctor is relocating to; and

  • the Doctor has used their best endeavours to transition their practice to another Doctor at the Group.

• (3) Escrow for Sydney Ultrasound for Women (SUFW)

All shares issued to the vendors of SUFW are escrowed such that 53.3% of the shares issued were escrowed until the first trading day after the release of the FY16 results. 3.3% were escrowed until the first trading day after the release of the FY17 results and 3.3% are escrowed until the first trading day after the release of the FY18 results. The remaining 40.1% is subject to escrow and is consistent with the Doctors above in points 1 and 2. Doctors will be able to sell any non-escrowed Shares at any time, subject to complying with insider trading restrictions and the Group’s Securities Trading Policy. The escrow arrangements describing the circumstances in which a SUFW Doctor is a ‘good leaver’ or a ‘relocated leaver’ is the same as described above.

4.2 Financial risk management

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

• Liquidity risk;

• Foreign exchange risk;

• Interest risk; and

• Market risk.

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

96 | Monash IVF Group

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OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

4.2 Financial risk management (continued)

Risk management policies are in place 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’s activities. The Group, through its recruitment, training and management standards and procedures, aims to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

Liquidity risk

Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The group manages this risk through the following mechanisms:

• Preparing forward-looking financial analysis in relation to its operational, investing and financing activities;

• Monitoring undrawn credit facilities;

• Obtaining funding from a variety of sources;

• Maintaining a reputable credit profile;

• Managing credit risk related to financial assets;

• Only investing surplus cash with major financial institutions; and

• Comparing the maturity profile of financial liabilities with the realisation profile of financial assets.

The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of netting arrangements, subject to the Group meeting future undertakings.

	Carrying	Total	Within 1	1-5 years	Over
	amount	Contractual	year		5 years
		cash flows
2022	$’000	$’000	$’000	$’000	$’000
Non-derivative financial
liabilities
Secured bank loans	10,000	(10,970)	-	(10,970)	-
Trade and other payables	19,237	(19,237)	(19,237)	-	-
Lease liabilities	67,466	(72,830)	(8,630)	(32,438)	(31,762)
Contingent consideration	971	(971)	(483)	(488)	-
	97,674	(104,008)	(28,350)	(43,896)	(31,762)
	Carrying	Total	Within 1 year	1-5 years	Over 5
	amount	Contractual			years
		cash flows
2021	$’000	$’000	$’000	$’000	$’000
Non-derivative financial
liabilities
Secured bank loans	1,629	(1,629)	(1,629)	-	-
Trade and other payables	18,559	(18,559)	(18,559)	-	-
Lease liabilities	44,359	(48,704)	(6,412)	(27,321)	(14,971)
Contingent consideration	1,833	(1,833)	(1,205)	(628)	-
	66,380	(70,725)	(27,805)	(27,949)	(14,971)

Foreign exchange risk

The Group is not exposed to material levels of foreign currency risk at the reporting date or during the financial year.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

4.2 Financial risk management (continued)

Interest rate risk

The consolidated entity’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable rates expose the consolidated entity to interest rate risk. Interest rate risk may be managed using a mix of floating rate debt and fixed rate instruments. Interest rate swaps may be used to mitigate interest rate risk on floating rate debt. Interest rate swaps are not entered into for trading purposes and are not classified as held for trading.

The interest rate profile of the Group’s interest-bearing financial instruments as reported to management of the Group is as follows including the impact of hedging instruments:

	2022	2021
	$’000	$’000
Fixed rate instruments
Financial assets	967	1,754
Financial liabilities	(67,466)	(44,359)
	(66,499)	(42,605)
Variable rate instruments
Financial assets	6,752	7,007
Financial liabilities	(9,764)	(1,629)
	(3,012)	5,378

Cash flow sensitivity analysis for variable rate instruments

A reasonable possible change of a 100 basis points in interest rates at the reporting date would have increased /(decreased) equity and profit or loss by $30,120 (FY21: $53,780). This assumes that all other variables remain constant.

Market risk – Operational risk

The Group is exposed to legislative and/or Government policy changes to funding for IVF and related healthcare services which may impact patient out-of-pocket costs resulting in potentially higher or lower demand.

4.3 Borrowings

Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. Where there is an unconditional right to defer settlement of the liability for at least twelve months after the reporting date, the loans and borrowings are classified as non-current.

Total loan facilities available to the Group in Australian dollars

	2022	2022		2021
$’000	Limit		Utilised	Limit	Utilised
Syndicated Debt facility	40,000		10,000	40,000	500
Working capital facility(2)	10,000		-	5,000	1,129
Accordion facility(1)	40,000		-	40,000	-
Total loan facilities	90,000		10,000	85,000	1,629
Borrowings
Borrowings			10,000		1,629
Capitalised finance facilityfees			(236)		-
**Total borrowings **			9,764		1,629

(1) An un-committed $40m accordion facility for acquisition and capital expenditure purposes.

(2) In December 2021, the Group increased the size of its working capital facility to $10m.

98 | Monash IVF Group

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CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

4.3 Borrowings (continued)

In December 2021, the Group amended and extended the syndicated debt facility, working capital facility and accordion facility with a maturity date of December 2024. The banking facilities are secured via a first ranking security over substantially all of the Group’s entities. The Group is subject to certain financial undertakings under the banking facilities. As at 30 June 2022, the Group is compliant with its financial undertakings.

As at 30 June 2022, the Group had $3,488,999 of bank guarantees in place (FY21: $3,165,022).

Reconciliation of movements of liabilities arising from financing activities

	Balance	Additions	Principal	Other	Balance at
$’000	at 1 July		repayments		30 June
	2021				2022
Loans	1,629	26,500	(18,129)	(236)(1)	9,764
Lease liabilities	44,359	31,790	(8,683)	-	67,466
Total interest bearing loans and borrowings	45,988	58,290	(26,812)	(236)	77,230

(1) Capitalised bank fees following amendment and extension to the Syndicated Debt Facility.

Recognition and measurement

Derivative financial instruments, including hedge accounting

The Group may hold derivative financial instruments to hedge certain floating interest rate exposures. On initial designation of the hedge, the Group formally documents the relationship between the hedging instruments and hedging items, including the risk management objectives and strategy in undertaking the hedge transaction, together with the methods that will be used to assess the effectiveness of hedging relationship. The Group makes an assessment, both at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging instruments are expected to be “highly effective” in offsetting the change in the cash flows of the respective hedged items during the period for which the hedge is designated, and whether the actual results of each hedge are within a range of 80-125 percent. For a cash flow hedge of a forecast transaction, the transaction should be highly probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported profit or loss.

Derivatives are recognised initially at fair value; attributed transaction costs are recognised in profit or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value and changes to therein are accounted for as described below. All derivative financial instruments are valued using unadjusted quoted prices in active markets for identical assets or liabilities.

4.4 Net Finance Costs

	2022	2021
	$’000	$’000
Finance income
Interest income	4	1
Finance costs
Interest expense	377	725
Amortisation of borrowing costs(1)	54	341
Interest on lease liabilities	1,720	1,386
Total finance costs	2,151	2,452
Net finance costs	2,147	2,451

(1) Includes interest and amortisation of ancillary costs incurred in connection with the arrangement of borrowings.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

4.5 Cash and cash equivalents

	2022	2021
	$’000	$’000
Cash at bank	6,907	7,007
Short-term bank deposits	967	1,754
Total cash and cash equivalents	7,874	8,761
Reconciliation of profit after income tax to net	2022	2021
cash inflow from operating activities	$’000	$’000
		Restated (1)
Profit for theperiod	18,502	25,687
Adjustments:
Depreciation and amortisation	14,788	12,557
Net finance cost included in financing activities	427	1,065
Provision for Fertility Solutions Earn-out	395	678
Provision for expected credit losses	15	84
Acquisition,Lease Accountingand Other	3,191	649
Operating profit before changes in working capital and provisions	37,318	40,720
Change in net operating assets and liabilities
(Increase)/decrease in trade and other receivables	(2,702)	640
(Increase)/decrease in inventory	(1,037)	(268)
Increase/(decrease) in trade and other payables	678	(2,140)
Increase/(decrease) in provisions and employee benefits	350	1,470
Increase/(decrease)in income and deferred taxes	(2,718)	3,557
Net cash from operating activities	31,889	43,979

(1) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

100 | Monash IVF Group

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BOARD OF DIRECTORS MANAGEMENT TEAM FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

Section 5 Our Business Portfolio This section provides further insight into the legal structure and group of subsidiary companies. 5.1 Controlled entities 5.3 Parent equity 5.2 Investments accounted for using the equity 5.4 Deed of cross guarantee method

5.1 Controlled entities

Parent entity	Place of business/country	Place of business/country	Place of business/country
Monash IVF Group Limited			Australia
Controlled entities	Place of business	Ownership interest
	/country	2022	2021
Healthbridge Enterprises Pty Ltd	Australia	100% 100%
Monash IVF Group Acquisitions Pty Ltd	Australia	100% 100%
Healthbridge IVF Holdings Pty Ltd	Australia	100% 100%
Healthbridge Shared Services Pty Ltd	Australia	100% 100%
Healthbridge Repromed Pty Ltd	Australia	100% 100%
Repromed Finance Pty Ltd	Australia	100% 100%
Repromed Holdings Pty Ltd	Australia	100% 100%
Repromed NZ Holding Pty Ltd	Australia	100% 100%
Repromed Australia Pty Ltd	Australia	100% 100%
Adelaide Fertility Centre Pty Ltd	Australia	100% 100%
Monash IVF Holdings Pty Ltd	Australia	100% 100%
Monash IVF Finance Pty Ltd	Australia	100% 100%
Monash IVF Pty Ltd	Australia	100% 100%
Monash Reproductive Pathology and Genetics Pty Ltd	Australia	100% 100%
Monash Ultrasound Pty Ltd	Australia	100% 100%
Monash IVF Auchenflower Pty Ltd	Australia	100% 100%
Yoncat Pty Ltd	Australia	100% 100%
My IVF Pty Ltd	Australia	100% 100%
ACN 169 060 495 Pty Ltd	Australia	100% 100%
Palantrou Pty Ltd	Australia	100% 100%
ACN 166 701 819 Pty Ltd	Australia	100% 100%
ACN 166 702 487 Pty Ltd	Australia	100% 100%
KL Fertility & Gynaecology Centre Sdn. Bhd.	Malaysia	90% 90%
KL Fertility Daycare Sdn. Bhd.	Malaysia	100% 100%
Sydney Ultrasound for Women Partnership	Australia	100% 100%
Ultrasonic Diagnostic Services Trust No.2	Australia	100% 100%
ACN 604 384 661 Pty Ltd	Australia	100% 100%
Ultrasonic Diagnostic Services Pty Ltd	Australia	100% 100%
Fertility Australia Pty Ltd	Australia	100% 100%
Fertility Australia Trust	Australia	100% 100%
MVF Sunshine Coast Pty Ltd	Australia	100% 100%
Hobart IVF Pty Ltd	Australia	57.4% 57.4%

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Notes to the Consolidated Financial Statements continued for the year ended 30 June 2022

5.1 Controlled entities (continued)

Controlled entities	Place of business	Ownership interest	Ownership interest
	/country	2022	2021
Gold Coast Ultrasound for Women Pty Ltd	Australia	51%	51%
Monash IVF Asia Pte Ltd	Singapore	90%	90%
Monash IVF South Malaysia Pte Ltd	Malaysia	62%	62%
Pt Mitra Kasih Medikatama	Indonesia	54%	-%

5.2 Investments accounted for using the equity method

	Principal	Ownership Interest	Ownership Interest	Share of Net Profit/Loss	Share of Net Profit/Loss
	Activity		%	$’000
Name of company		2022	2021	2022	2021
Compass Fertility	Fertility Services	25%	25%	243	55
Pt Mitra Bryan Indonesia	Fertility Services	37%	37%	634	600

5.3 Parent entity

As at 30 June 2022 and throughout the financial year ending on that date, the parent company of the Group was Monash IVF Group Limited.

	2022	2021
Results of parent entity	$’000	$’000
		Restated (1)
Profit after tax	15,470	13,977
Other comprehensive income	-	-
Total comprehensive income	15,470	13,977
Financial position of parent entity at year end
Current assets	-	-
Total assets	528,184*	527,537*
Current liabilities	1,294	6,006
Total liabilities	8,441	6,511
Net assets	519,743	521,026
Total equity of the parent entity comprising of:
Share capital	506,786	506,786
Retained earnings	12,957	14,240
Total equity	519,743	521,026

*Includes Intercompany balances with its subsidiaries, as at 30 June 2022, these balances are not expected to be settled within twelve months.

(1) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

Expenditure contracted for but not recognised as liabilities

Parent Entity	2022	2021
	$’000	$’000
Capitalplant and equipment	13,598	613

Parent entity guarantees in respect of the debts of its subsidiaries

The parent entity has entered into a Deed of cross guarantee with the effect that the Company guarantees debts in respect of certain subsidiaries.

102 | Monash IVF Group

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CFO REPORT

OUR STRATEGY

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BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

5.4 Deed of cross guarantee

The below listed entities are parties to a Deed of cross guarantee under which each company guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report and directors’ report under ASIC Corporations (Wholly Owned Companies) Instrument 2016/785 issued by the Australian Securities and Investments Commission.

The below companies represent the parties to the Deed of cross guarantee (‘closed group’):

• Monash IVF Group Ltd

• Monash IVF Group Acquisition Pty Ltd

• Healthbridge Enterprises Pty Ltd

• Healthbridge Shared Services Pty Ltd

• Healthbridge IVF Holdings Pty Ltd

• Healthbridge Repromed Pty Ltd

• ACN 169060495 Pty Ltd

• ACN 166701819 Pty Ltd

• My IVF Pty Ltd

• Monash IVF Holdings Pty Ltd

• Palantrou Pty Ltd

• ACN 166702487 Pty Ltd

• Repromed Finance Pty Ltd

• Monash IVF Finance Pty Ltd

• Repromed Holdings Pty Ltd

• Monash IVF Pty Ltd

• Repromed Australia Pty Ltd

• Repromed NZ Holding Pty Ltd

• Monash Ultrasound Pty Ltd

• Monash Reproductive Pathology & Genetics Pty Ltd

• Monash IVF Auchenflower Pty Ltd

• Yoncat Pty Ltd

• Adelaide Fertility Centre Pty Ltd

• Sydney Ultrasound for Women Partnership

• Ultrasonic Diagnostic Services Trust No. 2

• ACN 604384661 Pty Ltd

• Ultrasonic Diagnostic Services Pty Ltd

• Fertility Australia Pty Ltd

• Fertility Australia Trust

• MVF Sunshine Coast Pty Ltd

An extract of the consolidated statement of comprehensive income and consolidated statement of financial position, comprising the Company and controlled entities which are party to the Deed of cross guarantee, after eliminating all transactions between parties to the Deed of cross guarantee is set out as follows:

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

5.4 Deed of cross guarantee (continued)

	2022	2021
Extract of the statement of profit or loss and other comprehensive income	$’000	$’000
		Restated (1)
Profit before tax	24,128	28,868
Income tax expense	(6,840)	(9,351)
Netprofit after tax	17,288	19,517
Summary of movements in retained earnings
Opening balance at 1 July	(106,582)	(117,917)
Profit for the period	17,288	19,517
Dividendspaid/declared	(16,753)	(8,182)
Closing balance at 30 June	(106,047)	(106,582)
Statement of financial position
Current assets
Cash and cash equivalents	5,200	5,629
Trade and other receivables	11,956	8,931
Inventory	5,015	4,038
Total current assets	22,171	18,598
Non current assets
Investment in subsidiaries	12,967	13,174
Trade and other receivables	100	778
Plant and equipment	28,401	23,187
Right of use assets	61,372	42,321
Deferred tax asset	11,211	11,251
Intangible assets	252,746	253,521
Total non current assets	366,797	344,232
Total assets	388,968	362,830
Current liabilities
Trade and other payables	26,061	25,562
Borrowings	-	1,629
Lease liabilities	6,023	5,749
Current tax payable	457	3,021
Contingent consideration	483	1,205
Employee benefits	10,853	10,695
Total current liabilities	43,877	47,861
Non current liabilities
Borrowings	9,764	-
Lease liabilities	58,134	38,519
Deferred tax liability	11,836	11,674
Contingent consideration	488	628
Employee benefits	1,401	1,215
Total non current liabilities	81,623	52,036
Total liabilities	125,500	99,897
Net assets	263,468	262,933
Equity
Contributed equity	506,786	506,786
Reserves	(137,271)	(137,271)
Retained earnings	(106,047)	(106,582)
Total equity	263,468	262,933

As at 30 June 2022, the Deed of cross guarantee Group has a net current asset deficiency of $21,706,000 (FY21: $29,263,000). Refer to the basis of preparation note in relation to going concern considerations.

(1) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service (refer to note 6.2).

104 | Monash IVF Group

FINANCIAL OVERVIEW

CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

Section 6
Other disclosures
6.1 Auditors’ remuneration	6.5 Reporting entity
6.2 Comparative Balances	6.6 Basis of preparation
6.3 Events occurring after the reporting period	6.7 New standards and interpretations
6.4 Commitment and contingencies

6.1 Auditors’ remuneration

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit firms:

	2022	2021
	$	$
Audit services - KPMG
Audit and review of financial statements	295,000	273,500
Other services - KPMG
Taxation services	134,750	128,650
Other auditors (Non KPMG)
Audit and review of financial statements	22,339	10,600
Total services	452,089	412,750

6.2 Comparative Balances

In April 2021, the International Financial Reporting Standards Interpretations Committee (IFRS IC) issued two final agenda decisions which impact Software-as-a-Service (SaaS) arrangements:

• Customer’s right to receive access to the supplier’s software hosted on the cloud (March 2019) – this decision considers whether a customer receives a software asset at the contract commencement date or a service over the contract term.

• Configuration or customisation costs in a cloud computing arrangement (April 2021) – this decision discusses whether configuration or customisation expenditure relating to SaaS arrangements can be recognised as an intangible asset and if not, over the period the expenditure is expensed.

The Group’s accounting policy has historically been to capitalise all costs related to SaaS arrangements as intangible assets in the Statement of Financial Position. The adoption of the above agenda decisions has resulted in a reclassification of these intangible assets to either a prepaid asset in the Statement of Financial Position and/or recognition as an expense in the Statement of Comprehensive Income, impacting both the current and/or prior periods presented.

As a result, Monash IVF has amended its accounting policy to align with the IFRS IC agenda decision and retrospectively adjusted these intangible assets in the statement of financial position. The impact of this change in accounting policy for the comparative reporting period and the beginning of the earliest period presented is shown below. All adjustments outlined below relates to the Australian segment.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

6.2 Comparative Balances (continued)

Consolidated statement of financial position

Consolidated statement of financial position
1 July 2021	Reported	Adjusted	Restated
	$’000	$’000	$’000
Assets	$’0
Intangible asset	259,976	(703)	259,273
Net deferred tax liability	(769)	211	(558)
Total Assets	259,207	(492)	258,715
Equity
Profit reserves	59,501	(492)	59,009
Total Equity	59,501	**(492) **	59,009
1 July 2020	Reported	Adjusted	Restated
	$’000	$’000	$’000
Assets
Intangible asset	262,165	(1,073)	261,092
Net deferred tax liability	(1,551)	322	(1,229)
Total Assets	260,614	(751)	259,863
Equity
Profit reserves	42,535	(751)	41,784
Total Equity	42,535	(751)	41,784

Consolidated statement of comprehensive income

Period ended 30 June 2021	Reported	Adjusted	Restated
	$’000	$’000	$’000
IT and communications expense	(4,104)	(75)	(4,179)
Amortisation expense	(2,189)	335	(1,854)
Profit before tax	35,940	260	36,200
Income tax expenses	(10,435)	(78)	(10,513)
Profit for theperiod	25,505	182	25,687
Total comprehensive income for theyear	25,272	182	25,454
Earnings per share
Basic	6.5		6.5
Diluted	6.4		6.5

Consolidated statement of cashflows

Consolidated statement of cashflows
Period ended 30 June 2021	Reported	Adjusted	Restated
	$’000	$’000	$’000
Payments to suppliers and employees	(139,149)	(75)	(139,224)
Net cash from operation activities	44,054	(75)	43,979
Payments for property, plant and equipment	(10,033)	75	(9,958)
andintangibles
Net cash from investing activities	(11,287)	75	(11,212)

106 | Monash IVF Group

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CFO REPORT

OUR STRATEGY

OUR PILLARS

BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued for the year ended 30 June 2022

6.3 Events occurring after the reporting period

On 18 May 2022, Monash IVF Group Limited announced entry into a binding sale agreement for the acquisition of PIVET Medical Centre (“PIVET”) which is a Perth, Western Australia and Cairns, Queensland provider of fertility services and has nine fertility specialists. Monash IVF is acquiring PIVET by way of an asset sale and purchase for initial up-front cash consideration of $9.4 million on a debt free basis, with the potential of additional earn out payments over a one to two year period from completion. The financial effects of this transaction has not be recognised at 30 June 2022. The operating results and assets and liabilities of the acquired Business will be consolidated from the completion date expected to be during FY2023, subject to certain conditions precedent.

On 1 July 2022, Monash IVF Group Limited announced the acquisition of ART Associates Queensland No.2 Pty Ltd (ART Associates Queensland) in Brisbane, Queensland. Monash IVF is acquiring ART Associates Queensland by way of an asset sale and purchase for initial cash consideration of $3.9m on a debt free basis, with the potential of additional earn out payments over a five to seven year period from completion. The financial effects of this transaction has not be recognised at 30 June 2022. The operating results and assets and liabilities of the acquired Business will be consolidated from the completion date expected to be during FY2023, subject to certain conditions precedent.

On 26 August 2022, a fully franked final dividend of 2.2 cents per share was declared. The record date for the dividend is 9 September 2022 and the payment date for the dividend is 7 October 2022.

Except as disclosed 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 or 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 periods.

6.4 Commitment and contingencies

As announced to the ASX on 23 December 2020, Monash IVF Group became aware that it and certain of its subsidiaries have been named as defendants in proceedings filed in the Supreme Court of Victoria in relation to, or in connection with, the Group’s non-invasive pre-implantation genetic screening technology (Ni-PGT or cell-free PGT-A). The proceedings filed makes a series of allegations against Monash IVF Group in relation to the Ni-PGT testing including those patients who had embryos classified as aneuploid as a result of Ni-PGT testing may have had embryos destroyed or did not proceed to embryo transfer. Ni-PGT testing was suspended in October 2020.

The Group has filed the defence in accordance with the Court’s directions. The Group has notified its insurers of the claim. The Group has provided for associated costs expected to be incurred in defending the claim. The claim does not specify an amount of damages and it is not currently possible to determine the ultimate impact of this claim, if any, on the Group.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

6.5 Reporting entity

Monash IVF Group Ltd (the ‘Company’) is a for profit company primarily involved in the area of assisted reproductive services and the provision of specialist women’s imaging services. Monash IVF Group Ltd was incorporated on 30 April 2014. The Company is incorporated in Australia and listed on the Australian Stock Exchange. Its registered office is at Level 1, 21-31 Goodwood Street, Richmond, Victoria and is limited by shares. The consolidated financial statements comprise the Company and its controlled entities (collectively ‘the consolidated entity’, ‘Monash Group’ or ‘Group’).

6.6 Basis of preparation

Statement of compliance

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

The consolidated financial statements were approved by the Board of Directors on 26 August 2022.

Functional and presentation currency

The consolidated financial statements are presented in Australian dollars, which is the functional and presentational currency of the Company and the majority of the Group. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Rounding of amounts

The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 issued by the Australian Securities and Investments Commission (ASIC), relating to the rounding of amounts in the consolidated financial statements. Amounts in the consolidated financial statements have been rounded off in accordance with that legislative instrument to the nearest thousand, unless specifically stated to be otherwise.

Basis of consolidation

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Monash IVF Group Ltd as at 30 June 2022 and the results of all subsidiaries for the year then ended. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group until the date on which control ceases. The acquisition method of accounting is used to account for business combinations by the Group. Intra-group balances and transactions, arising from intra-group transactions are eliminated at consolidation.

Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net assets at the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

The Group’s interests in equity-accounted investees comprise interests in associates. Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. Interests in associates and the joint venture are accounted for using the equity method. They are initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and OCI of equity accounted investees, until the date on which significant influence ceases.

108 | Monash IVF Group

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FY22 FINANCIAL REPORT

Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

6.6 Basis of preparation (continued)

Basis of measurement

The financial report has been prepared on an accrual basis and is based on historical cost (unless otherwise stated), except for derivative financial instruments and contingent consideration assumed in a business combination, which have been measured at fair value.

Foreign currency translation

Transactions in foreign currencies are translated at foreign exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective interest and payments during the period, and the amortised costs in foreign currency translated at the exchange rate at the end of the reporting period. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the fair value was determined. Non-monetary items that are measured in terms of historical costs in a foreign currency are translated using the exchange rate at the date of transaction.

Foreign operations

The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated to Australian dollars at exchange rates at the reporting date. The income and expenses of foreign operations are translated to Australian dollars at exchange rates at the dates of the transactions. Foreign currency differences are recognised in other comprehensive income (OCI), and presented in the foreign currency translation reserve (translation reserve) in equity.

Use of estimates and judgements

The preparation of the consolidated financial statements in conformity with AASBs requires management to make 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. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimates are revised and in any future periods affected. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below:

(i) Estimated recoverable amount of goodwill and other non-current assets

The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy for intangible assets. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets or groups of assets (cash generating units, or CGUs). Refer to Note 2.6 for further details on impairment testing.

(ii) Provision for ECL on receivables

The Group calculates the doubtful debts provision under the ECL model. The Group assesses credit losses based on the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic environment. Measurement of ECL allowance for trade receivables is disclosed in Note 2.1.

(iii) 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 post-tax discount 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 a finance cost.

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Notes to the Consolidated Financial Statements continued

for the year ended 30 June 2022

6.6 Basis of preparation (continued)

(iv) Deferred consideration

The measurement of deferred consideration requires management to estimate the amount likely to be paid in the future. This requires the exercise of judgement, in particular where the amounts is payable is dependent to the future financial performance of the business that has been acquired.

(v) Leases

The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which significantly affects the lease liabilities and right-of-use assets recognised.

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

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 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-ofuse asset has been reduced to zero.

Going concern

As at 30 June 2022, the group has a net current asset deficiency of $12,531,000 (FY21: $18,579,000). The Directors consider that there are reasonable grounds to believe the Group will be able to pay its debts as and when they fall due based on forecast operating cash flows which indicate that cash reserves are sufficient to fund operations, the availability of committed but undrawn external debt facilities, and given certain current liabilities such as employee entitlements and deferred revenue will not be fully settled in the short term to cause a liquidity shortfall.

The Directors have considered forecast cash flow scenarios for at least the twelve month period from the date of approval of these financial statements. As a result, the Directors consider that the Group is able to pay its debts as and when they are due and these financial statements can be prepared on a going concern basis.

6.7 New standards and interpretations

A number of new standards are effective for annual periods beginning after 1 July 2022 and earlier applications permitted; however, the Group has not early adopted the new or amended standards in preparing these consolidated financial statements. The following new and amended standards are not expected to have a significant impact on the Group’s consolidated financial statements:

• Reference to Conceptual Framework (Amendments to AASB 3)

• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to AASB 116)

• Classification of Liabilities as Current or Non-current (Amendments to AASB 101)

• Recognising deferred tax on leases (Amendments to AASB 112)

110 | Monash IVF Group

FINANCIAL OVERVIEW CFO REPORT OUR STRATEGY OUR PILLARS BOARD OF DIRECTORS MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Directors’ Declaration

for the year ended 30 June 2021

1. In the opinion of the Directors of Monash IVF Group Ltd (the ‘Company’):

2. (a) the Consolidated Financial Statements and Notes set out on pages 75 to 110 and the Remuneration Report on pages 38 to 54 in the Directors’ Report, 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, the Corporations Regulations 2001 ; and

3. (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.

4. There are reasonable grounds to believe that the Company and the Group entities identified in Note 5.1 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 pursuant to ASIC Corporations (Wholly Owned Companies) Instrument 2016/785.

5. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 by the Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2022.

6. The Directors draw attention to page 108 to the Consolidated Financial Statements, which include a Statement of Compliance with International Financial Reporting Standards.

Signed in accordance with a resolution of the Directors:

Dated in Melbourne and Sydney, 26th day of August 2022

==> picture [64 x 45] intentionally omitted <==

Mr. Richard Davis Chairman

==> picture [108 x 40] intentionally omitted <==

Mr. Michael Knaap Chief Executive Officer and Managing Director

26 August 2022

26 August 2022

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Ind ent Auditor’s R ort epend ep

To the shareholders of Monash IVF Group Limited

Report on the audit of the Financial Report

Opinion

We have audited the Financial Report of Monash IVF 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.

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.

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FY22 FINANCIAL REPORT

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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.

Recoverable value of goodwill ($233.2 million)

Refer to Note 2.6 to the Financial Report

• The key audit matter How the matter was addressed in our audit At 30 June 2022 the Group’s balance sheet heet Our procedures included: generating unitsincludesincludes goodwill(CGUs)contained within– Australia,(CGUs)contained within– Australia,contained within– Australia,– Australia, Australia, Internationalthreethree cash • We considered the appropriateness of the and Ultrasound. Group’s value in use methodology to perform the annual test of goodwill for impairment against the

• A key audit matter for us was the Group’s annual requirements of the accounting standards. oftestingthetestingthethe balanceof goodwill(beingforof goodwill(beingfor(beingforfor impairment,61%61% of totalgiven theassets)given theassets)assets) sizeand and • We assessed the integrity of the value in use the extent of judgement involved. We focusedocused models used, including the accuracy of the on the significant forward-looking assumptions ssumptions umptions ptions ions underlying calculation formulas. the Group applied in its value in use models,odels, • We compared the forecast cash flows contained including: in the value in use models to Board approved forecasts.

At 30 June 2022 the Group’s balance sheet heet generating unitsincludesincludes goodwill(CGUs)contained within– Australia,(CGUs)contained within– Australia,contained within– Australia,– Australia, Australia, Internationalthreethree cash and Ultrasound.

A key audit matter for us was the Group’s annual oftestingthetestingthethe balanceof goodwill(beingforof goodwill(beingfor(beingforfor impairment,61%61% of totalgiven theassets)given theassets)assets) sizeand and the extent of judgement involved. We focusedocused on the significant forward-looking assumptions ssumptions umptions ptions ions the Group applied in its value in use models,odels, including:

• Forecast cash flows, growth rates and terminal growth rates in light of market conditions impacting each CGU and continued economic uncertainties during and post the COVID-19 pandemic. These conditions impact our consideration of forecasting risk; and

• We assessed the accuracy of previous Group forecasts to inform our evaluation of forecasts included in the models.

• We assessed the Group’s underlying methodology and documentation for the allocation of corporate costs and corporate assets to each CGU, for consistency with our understanding of the business and the criteria in the accounting standards.

• Discount rates, which vary according to the conditions and environment the specific CGU is subject to from time to time.

The models are largely manually developed, use adjusted historical performance and a range of internal and external sources as inputs to the assumptions. Modelling using forward-looking assumptions tends to be prone to greater risk for potential bias, error and inconsistent application. Where the Group has not met prior year forecasts in relation to a specific CGU we factor this into our assessment of forecast assumptions. These conditions necessitate additional scrutiny by us, in particular to address the objectivity of sources used for assumptions, and their consistent application.

• We considered the sensitivity of the models by varying key assumptions, such as forecast cash flows, growth rates and discount rates, within a reasonably possible range. We did this to identify those assumptions at higher risk of bias or inconsistency in application and to identify those CGUs at higher risk of impairment and to focus our further procedures.

• We challenged the Group’s forecast cash flow and growth assumptions in light of the expected continuation of uncertainties arising from the COVID-19 pandemic, with a particular focus on the Ultrasound CGU. We used our knowledge of the Group, business and patients and our industry experience.

We involved valuation specialists to supplement our senior audit team members in assessing this key audit matter.

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• Working with our valuation specialists, we: - independently developed a comparable discount rate range from publicly available market data for comparable entities and adjusted by specific risk factors to the Group and the industry it operates in;

• • independently assessed the growth rates based on the industry in which the Group operates and current economic environment; and
• • compared the implied multiples for comparable entities to the implied multiples from the Group’s value in use models.

• • We assessed the disclosures in the financial report using our understanding obtained from our testing and against the requirements of the accounting standards.

Other Information

Other Information is financial and non-financial information in Monash IVF 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 Director’s Report (including the Remuneration Report), Appendix 4E and Corporate Governance Statement. The Chairman’s Report, Managing Director & CEO’s Report, Financial Overview, Chief Financial Officer’s Report and Shareholder Information 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

• assessing the Group and Company’s ability to continue as a going concern and whether the use

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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.

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 Monash IVF 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 within 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 .

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KPMG

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Chris Sargent

Partner

Melbourne

26 August 2022

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Shareholder Information

Additional information required under ASX Listing Rule 4.10 and not shown elsewhere in this Annual Report is as follows. This information is current as at 28 September 2022.

Distribution of Shareholders – Ordinary Shareholders

	No of	Ordinary	% of
Size of Holding	Shareholders	Shares	issued
			**Capital **
1 to 1000	1,637	1,050,422	.27%
1001 to 5000	2,712	7,339,590	1.88%
5001 to 10000	1,055	8,211,474	2.11%
10001 to 100000	1,363	38,002,542	9.75%
100001 and Over	120	335,030,812	85.99%
Total	6,887	389,634,840	100.00%

The number of security investors holding less than a marketable parcel of 562 securities ($.890 on 28/9/2022) is 707 and they hold 249,499 securities.

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OUR STRATEGY

OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM

FY22 FINANCIAL REPORT

Shareholder Information continued

20 Largest Shareholders – Ordinary Shareholders

		No. of fully	% of issued
Rank	Name	paid shares	Capital
1	CITICORP NOMINEES PTY LIMITED	69,209,123	17.76%
2	J P MORGAN NOMINEES AUSTRALIA PTY LIMITED	58,147,730	14.92%
3	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED	49,121,083	12.61%
4	NATIONAL NOMINEES LIMITED	46,751,322	12.00%
5	ARGO INVESTMENTS LIMITED	19,982,646	5.13%
6	WASHINGTON H SOUL PATTISON AND COMPANY LIMITED	14,083,474	3.61%
7	BNP PARIBAS NOMS PTY LTD	8,213,289	2.11%
8	UBS NOMINEES PTY LTD	6,028,740	1.55%
9	BUTTONWOOD NOMINEES PTY LTD	6,021,948	1.55%
10	BNP PARIBAS NOMINEES PTY LTD	5,749,429	1.48%
11	HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2	4,144,480	1.06%
12	NEWECONOMY COM AU NOMINEES PTY LIMITED <900	3,916,085	1.01%
	ACCOUNT>
13	PACIFIC CUSTODIANS PTY LIMTED	2,474,369	.64%
14	IPPOLITI PTY LTD	2,011,336	.52%
15	BRISPOT NOMINEES PTY LTD	1,718,621	.44%
16	BNP PARIBAS NOMINEES PTY LTD <IB AU NOMS RETAIL CLIENT	1,682,086	.43%
	DRP>
17	MR PRASHANT NADKARNI	1,461,484	.38%
18	VOLLENHOVEN INVESTMENT PTY LTD <VOLLENHOVEN FAMILY	1,447,787	.37%
	A/C>
19	MCLACHLAN FUTURE FUND PTY LTD	1,385,944	.36%
20	ONG ADMINISTRATION PTY LTD	1,201,906	.31%
Total	for Top 20	304,752,882	78.21%
Total	other investors	84,881,958	21.79%
Grand Total		389,634,840	100.00%

Substantial Shareholders

As at 28 September 2022, the following details the names of substantial shareholders in Monash IVF Group Limited and the number of shares held, as disclosed in substantial holding notices given to the Company:

		No. of fully	% of issued
Rank	Name	paid shares	Capital
1	ALLAN GRAY AUSTRALIA PTY LTD	33,269,101	8.54%
2	CHALLENGER LIMITED	23,442,314	6.02%
3	ARGO INVESTMENTS LIMITED	19,982,646	5.13%

Voting Rights

In accordance with the Constitution, each member present at a meeting (whether in person, by proxy, by power of attorney or by a duly authorised representative), upon a poll, shall have one vote for each fully paid ordinary share.

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Corporate Directory

Stock Exchange Listing

The shares of Monash IVF Group are listed by ASX Ltd on the Australian Securities Exchange trading under “MVF”.

Auditor

KPMG Australia Tower Two, Collins Square 727 Collins Street Docklands VIC 3008

T +61 (0)3 9288 5555

Directors

Mr Richard Davis – Chairman

Mr Neil Broekhuizen

Mr Josef Czyzewski Dr Richard Henshaw Mr Michael Knaap Ms Zita Peach Ms Catherine West

Corporate Office

Pelaco Building 1 Level 1 21-31 Goodwood Street Richmond VIC 3121

T +61 (0)3 9420 8235

Website

www.monashivfgroup.com.au

Mr Malik Jainudeen – Company Secretary

Share Registry

Link Market Services Tower 4, 727 Collins Street Melbourne VIC 3008 T 1300 554 474

Legal

Clayton Utz 1 Bligh Street Sydney NSW 2000 T +61 (0)2 9353 4000

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OUR PILLARS BOARD OF DIRECTORS

MANAGEMENT TEAM FY22 FINANCIAL REPORT

2022 Annual General Meeting

Friday 11 November at 2pm

KPMG

Tower Two, Collins Square 727 Collins Street Melbourne VIC 3008

• Level 36

• Meeting room 36.12 (MCG)

Virtual Meeting

The online platform for the AGM can be accessed at - https://meetings.linkgroup.com/MVF22

monashivfgroup.com.au