Beyond International Annual Report 2022 Beyond International ANNUAL REPORT 2O22 BEYOND INTERNATIONAL ANNUAL REPORT 2022 3 2 Highway Thru Hell 4 CHAIRMAN’S REPORT 6 MANAGING DIRECTOR’S REPORT 14 CORPORATE GOVERNANCE STATEMENT 22 BOARD OF DIRECTORS 24 DIRECTORS’ REPORT 35 AUDITOR’S INDEPENDENCE DECLARATION 36 FINANCIAL STATEMENTS 84 DIRECTORS’ DECLARATION 85 INDEPENDENT AUDITOR’S REPORT 89 SHAREHOLDER INFORMATION 91 CORPORATE DIRECTORY BEYOND INTERNATIONAL ANNUAL REPORT 2022 5 4 MANAGING DIRECTOR’S REPORT 2022 CHAIRMAN’S REPORT On behalf of the Directors of Beyond International Limited (ASX:BYI) I am pleased to present this Annual Report and the improved results achieved in the financial year ending 30th June, 2022. After two difficult years dealing with the impact of Covid on all our operations and on our staff in Dublin, London, Los Angeles and Sydney the Directors were particularly pleased to deliver improved continuing operational EBITDA and Earnings Before interest and Tax (EBIT) and Earnings Per Share (EPS) anticipated in last year’s Annual Report. The Directors are also pleased with the integration of the TCB Media Rights Ltd acquisition completed in April 2020 into Beyond Rights and the US and UK TV production acquisitions completed later in 2020. All three operations have performed well and made significant contributions to the results of the Company. A detailed explanation of the factors effecting both the Beyond Rights and Beyond Productions operations is included in the Review of Results and the Managing Director’s Report contained in this Annual Report. The difficulties of managing a relatively small international company have been highlighted to all the Directors and staff during the last two years. This has prompted a number of internal discussions and strategic reviews. The general conclusion is that Beyond must significantly expand both of its business divisions by acquisition or Beyond itself should consider a merger with a similar but larger international company. The Directors expect to be in a position to report progress in these areas during the 2022-23 financial year. Finally, all the Directors would like to thank all our staff in all our offices for their dedication and efforts under often very difficult circumstances and too often in isolation working from home. These have been two extremely difficult years for everyone, and the Directors are very hopeful that we have seen the worse of Covid and we can all return to seeing each other on a regular basis. Ian Ingram Chairman 20th September, 2022 Back in the Groove BEYOND INTERNATIONAL ANNUAL REPORT 2022 7 6 MANAGING DIRECTOR’S REPORT 2022 MANAGING DIRECTOR’S REPORT FINAL REPORT FOR THE YEAR ENDED 30 JUNE 2022 This final report is provided to the Australian Securities Exchange (ASX) under ASX Listing Rule 4.3A This announcement has been authorised for release to the ASX by the Board of Beyond International Limited. Current Reporting Period: Financial year ended 30 June 2022 Previous Corresponding Period: Financial year ended 30 June 2021 APPENDIX 4E Name of Entity BEYOND INTERNATIONAL LIMITED ABN 65 003 174 409 Financial Year Ended 30 JUNE 2022 Previous Corresponding Reporting Period 30 JUNE 2021 RESULTS FOR ANNOUNCEMENT TO THE MARKET $’000 PERCENTAGE INCREASE / (DECREASE) OVER PREVIOUS CORRESPONDING PERIOD Revenue and other income from ordinary activities $93,056 (20.2%) Profit from ordinary activities after tax attributable to members $3,478 334.8% Net profit for the period attributable to members $3,478 334.8% Dividends (distributions) Amount per security Franked amount per security Interim Dividend 0.00 cents per share NIL Final Dividend 0.00 cents per share NIL PREVIOUS CORRESPONDING PERIOD Interim Dividend 0.00 cents per share NIL Final Dividend 0.00 cents per share NIL Record date for determining entitlements to the dividends (if any) N/A Brief explanation of any of the figures reported above necessary to enable the figures to be understood: Refer to release NTA BACKING CURRENT PERIOD PREVIOUS CORRESPONDING PERIOD Net tangible asset backing per ordinary security 37.8 cents 30.8 cents ASSOCIATES OR JOINT VENTURES Troppo Productions Pty Ltd 50% joint venture with EQ Media Production Pty Ltd Beyond May 30 50% Beyond LNBF 50% Troppo Productions Pty Ltd 50% Melodia Limited 33.33% Melodia (Australia) Pty Ltd 33.33% GB Media, Inc 10% DIVIDENDS $’000 Date the dividend is payable N/A Record date to determine entitlement to the dividend N/A Amount per security N/A Total dividend N/A Amount per security of foreign sourced dividend or distribution N/A Details of any dividend reinvestment plans in operation N/A The last date for receipt of an election notice for participation in any dividend reinvestment plans N/A BEYOND INTERNATIONAL LTD RELEASES FULL YEAR FINANCIAL RESULTS FOR THE YEAR ENDED 30 JUNE 2022 JUNE 2022 $ 000’S JUNE 2021 $ 000’S VARIANCE $ $ 000’S VARIANCE – FAV/(UNFAV) % Operating Revenue 92,240 114,497 (22,257) (19.4%) Other Income 816 2,165 (1,349) (62.3%) Total Revenue and Other Income 93,056 116,662 (23,606) (20.2%) Expenses - Cost of Sales (64,821) (88,508) 23,687 26.8% Expenses - Overheads (18,716) (18,793) 77 0.4% Total Expenses (83,537) (107,301) 23,764 22.1% EBITDA 9,519 9,361 158 1.7% Depreciation, Amortisation, Impairment and Write-down of Content Assets Expense (3,687) (5,935) 2,248 37.9% EBIT 5,832 3,426 2,406 70.2% Interest Expense (752) (425) (328) (77.3%) Profit Before Income Tax 5,080 3,001 2,078 69.3% Tax Expense (1,207) (981) (226) (23.1%) Profit After Income Tax 3,873 2,020 1,852 91.7% Discontinued Operations Held For Sale (548) (1,466) 918 62.6% Profit After Income Tax and before minority interests 3,325 555 2,770 499.2% Minority Interests 154 245 (91) (37.0%) Profit After Income Tax attributable to members 3,478 800 2,678 334.8% Additional Information EPS (cents per share) of Continuing Operations 6.56 3.69 2.86 77.4% Dividends per Share (cents) - - - - NTA (cents per share) 37.8 30.8 7.0 22.7% KEY POINTS • EBIT increased seventy per cent (70%) to $5,832,000 compared to the prior corresponding period of $3,426,000. • EBITDA increased marginally to $9,519,000 from $9,361,000. • Net Profit after Tax (before outside equity interests) of $3,325,000 is an improvement of $2,770,000 over the prior year result (2021: $555,000). • Total Operating Revenue for the twelve-month period decreased to $93,056,000 from $116,662,000, the operating revenue does not include revenue generated by 50% owned joint venture production companies that totalled over $20 million in the period. • The digital marketing business unit (Beyond D) reclassified as a discontinued operation – loss net of income tax $548,000. • Cash flows from operating activities $1,231,000 (2021: $2,708,000). • Cash at bank at 30 June 2022 $8,682,000 (2021: $6,442,000). BEYOND INTERNATIONAL ANNUAL REPORT 2022 9 8 MANAGING DIRECTOR’S REPORT 2022 MANAGING DIRECTOR’S REPORT EBIT $5,832,000 compared to $3,426,000 in the previous corresponding period. EBITDA $9,519,000, an increase of $158,000 on the previous corresponding period. Revenues declined by $23,606,000 to $93,056,000 compared to the 2021 financial year. EBIT was positively impacted by: * Production fees and recoveries from joint venture productions increasing. * Beyond Rights gross margin benefiting from sales of previously written off programs delivering 100% gross contribution. * An increase in copyright revenue. * Control of fixed and variable overhead expenses despite the end of Government Covid support in Australia and USA. * Reduction of foreign exchange losses. * The disposal of the digital marketing business. The digital marketing business (Beyond D) was sold in November 2021.Consequently the digital marketing business unit is classified as a discontinued operation. The operating results for the business unit have been eliminated from operating revenues and costs for both the 2022 and 2021 financial years. Revenue for the 5 months to November 2021 is $2,974,000 (2021: $4,954,000) EBITDA for the 5 months is a loss of $533,000 (2021: loss $1,964,000). From 1 April 2020 the Non-Executive Directors forfeited 100% of their Director’s fees, the CEO forfeited 20% of his salary package and all staff employed at 1 April 2020 agreed to reductions in their remuneration ranging between 5% and 20%. During the 2021 financial year 75% of the reduction was reinstated, with the final 25% reinstated on 1 August 2021 except for Directors, the CEO and three senior executives who were reinstated as at 1 October 2021. 30 JUN 2022 $ 000’S 30 JUN 2021 $ 000’S VARIANCE $ $ 000’S VARIANCE % REVENUE AND OTHER INCOME Productions & Copyright 52,833 71,986 (19,153) (26.6%) Distribution 39,788 43,799 (4,011) (9.2%) Home Entertainment 32 388 (356) (91.8%) Other Revenue 403 489 (86) (17.7%) Total Revenue 93,056 116,661 (23,606) (20.2%) Operating EBITDA before adjustments: Productions & Copyright 7,529 8,801 (1,271) (14.4%) Distribution 5,543 6,285 (742) (11.8%) Home Entertainment 35 28 7 24.8% Corporate (3,720) (3,978) 259 6.5% Foreign Exchange (Loss) / Gain 132 (1,131) 1,263 NMF Total Operating EBITDA before adjustments 9,520 10,005 (484) (4.8%) Operating EBIT before adjustments: Productions & Copyright 5,804 6,309 (505) (8.0%) Distribution 5,500 6,281 (781) (12.4%) Home Entertainment 35 28 7 24.8% Corporate (5,063) (5,367) 303 5.7% Foreign Exchange (Loss) / Gain 132 (1,131) 1,263 NMF Total Operating EBIT before adjustments: 6,409 6,121 287 4.7% Non Operating or Non Recurring Items: Productions & Copyright (312) (877) 565 64.4% Distribution (264) (1,818) 1,554 85.5% Discontinued operation - - - - EBIT 5,832 3,426 2,406 70.2% OVERVIEW OF RESULTS (continued) OVERVIEW OF RESULTS Matt Wright’s Wild Territory BEYOND INTERNATIONAL ANNUAL REPORT 2022 11 10 MANAGING DIRECTOR’S REPORT 2022 1. TELEVISION PRODUCTIONS AND COPYRIGHT SEGMENT (BEYOND PRODUCTION) Segment revenue decreased by $19,153,000 or 26.6% to $52,833,000 compared to the previous corresponding period. The decrease in revenue was driven by productions being delayed due to strict Covid-19 isolation rules and travel restrictions in force during the first half of the financial year. The segment EBIT prior to one- off items was $5,804,000 being 8% ($505,000) lower than the corresponding period in 2021 (prior to one-off adjustments). Impairments to equity investments in a few television series totalling $312,000 reduced EBIT to $5,492,000, $60,000 better than the$5,443,000 reported in the previous corresponding period. Key programs produced by Beyond for the US market in the financial year were: • My Lottery Dream Home Series 12 and Series 13 • No Recipe Road Trip with the Try Guys • EKO Cookshop Series • Back In The Groove The UK production business improved with commissions secured for the following programs: WoW That’s Amazing!, Mind Games and Outrageous Homes. Programs commissioned and in production in Australia for the world market in the 2022 financial year include Matt Wright’s Wild Territory for Netflix and Network Nine, On The Record for Stan and Beyond Rights, The Invisibles Series 2 for Disney+/National Geography, Animals Aboard for the Seven Network and Beyond Rights and John Farnham – Finding The Voice for Sony Pictures Releasing and the Seven Network. Programming produced or in production by Beyond TNC (a joint venture with the British production company TNC) include They All Came Out To Montreux, Memory Lane, Alien Time Capsule and The Birthday Party for worldwide distribution and Blitzed for Sky Arts in the UK. During the 2022 financial year, 115 hours of television commenced production (2021:125 hours). Commissioned • US commission 38 hours (2021: 63 hours) • Australian commission 64 hours (2021: 48 hours) • UK commission 13 hours (2021: 13 hours) Copyright revenues increased by $1,310,000 to $3,234,000. During the 2022 financial year, the Company received $400,000 in music publishing royalties and revenue from strong sales of the Deadly Women program catalogue. Licensing of MythBusters and Deadly Women contributed the majority of copyright revenues in the 2022 financial year. The Beyond production entities have a deep slate of projects in development and are actively working with US, UK, Australian and international broadcasters, and digital platforms to develop and produce new programs for the world market. 2. TELEVISION DISTRIBUTION SEGMENT (BEYOND RIGHTS) EBIT is $5,500,000 prior to one- off items, a decrease from the 2021 financial year of $781,000. Revenue decreased by $4,011,000 or 9.2% to $39,788,000 compared to $43,799,000 in the corresponding prior period. This decrease was largely due to delays in programs being acquired and delivered for international distribution. Impairment of producer advances $264,000 was booked in the current financial year compared to impairments of $1,151,000 in the 2021 financial year. Restructuring costs, including redundancies, of $667,000 were incurred in the prior period. In December 2021 a new London based CEO was recruited for the Beyond Rights business and the head of acquisitions role ceased. As such unbudgeted recruitment fees were incurred. During the year significant sales were achieved for existing long running returning series including Abandoned Engineering, Underground Worlds, Massive Engineering Mistakes, Highway Thru Hell Love It Or List It (Canada and UK versions), and Heavy Rescue 401. MythBusters, Deadly Women and Love It Or List It Australia, produced by Beyond Productions continue to perform well in the international market. Third party programs are primarily sourced from independent producers in the US, UK, Australia, and Canada. Product focus continues to be factual series, documentaries, family, and children’s programs as there is a steady demand for these genres from broadcasters throughout the world. The client base has expanded significantly during the past three years with the digital platforms (SVOD and AVOD) such as Discovery +, Paramount +, and You Tube rapidly becoming key revenue drivers for the Company’s programs. The Company has established a MythBusters FAST channel on the Samsung platform in the UK and will launch several FAST channels in the 2022/23 financial year using the Ottera platform. 3. HOME ENTERTAINMENT SEGMENT (BHE) Beyond earns a commission on sales of product made by Regency and booked revenues of $32,000 in the 2022 financial year. The net contribution of BHE after royalty payments and stock movements in the 2021 financial year was $35,000. 4. DIGITAL MARKETING SEGMENT (BEYONDD) Beyond D was disposed of on 29th November 2021 and has been classified as a discontinued operation in the 2022 annual accounts. The result of the business is still disclosed within the segment note. In the current financial year, the loss from the business unit net of tax was $548,000. 5. CORPORATE Corporate overheads reduced by $303,000 compared to the prior corresponding period. Cost reductions in professional fees and computer and software related costs and property costs contributed to this result. 6. INCOME TAX The underlying income tax for the 2022 financial year was $1,055,000. Including non-recoupable withholding taxes $120,000 from licensing receipts and US State tax of $32,000, the Company tax expense for the year is $1,207,000. My Lottery Dream Home BEYOND INTERNATIONAL ANNUAL REPORT 2022 13 12 ITEM SEGMENT JUNE 2022 JUNE 2021 MOVEMENT $ MOVEMENT % Realised gain / (loss) Distribution/TV (136,583) (466,143) 329,560 71% Unrealised gain / (loss) Distribution/TV 146,523 99,383 47,140 (47%) Realised (loss)/gain Production (284,800) (135,687) (149,112) (110%) Unrealised gain / (loss) Production 371,168 101,510 269,658 (266%) Realised gain / (loss) Other 8,952 (47,493) 56,445 119% Unrealised gain / (loss) Other 27,032 (682,871) 709,903 104% TOTAL FX GAIN / (LOSS) 132,291 (1,131,301) 1,263,593 (112%) MANAGING DIRECTOR’S REPORT 2022 8. DIVIDEND The Directors have determined that there will be no final dividend for the 2022 financial year. CONCLUSION AND OUTLOOK The Company is focusing its resources on two core areas of activity, production of content for existing and emerging platforms and the management and licensing of completed programming to platforms throughout the world. Beyond is well positioned to grow the production business through its established operations in the UK, USA, and Australia. In December 2021 a new CEO, with vast experience in the international content distribution industry, was appointed to lead Beyond Rights in London. Several changes to the operation of the business were initiated that promote efficiency, reduce friction, and control costs. During the first half of the financial year the Production segment was negatively impacted by the ongoing challenges of the Covid -19 pandemic which caused delays in program production schedules and order patterns from buyers. In addition, several major corporate consolidations in the market resulted in program commissioning decisions being deferred or firm program orders being cancelled. The second half of the financial year saw Covid restrictions ease in the UK, USA and Australia resulting in an uplift in production activity. Beyond’s US operation has four series in production, one pilot in production and three paid development agreements with broadcasters/ platforms. The UK business has three programs in production and in Australia there are four series in production. Beyond has achieved success in broadening its program genres to include relatively high-cost reality programs such as Pooch Perfect in the UK (for BBC) and USA (for ABC), and Back In The Groove (for HULU). As a result of the success of the first series of the scripted series Troppo (produced with EQ Media Group, Australian Broadcasting Corporation and AGC for the Freevee streaming platform) a second season is in paid development. The production budget for the second season, should it be commissioned, would be in excess of $20 million. This amount will not be included in Beyond’s operating revenue as the joint venture production company is 50% owned by Beyond. Beyond is also developing several original scripted series based on existing IP in conjunction with Beyond Rights. Beyond Rights is diversifying its revenue streams by the launch of its own FAST channels (free, ad supported streaming TV) and using its content to drive further increases in the YouTube channel revenues. The emerging market is scaling rapidly and is one Beyond is focused on by aggressively utilising its program catalogue. The retention of distribution rights from 3rd party producers is becoming more challenging for all distributors. Some of Beyond’s traditional customers hold back or control international program rights on programs that they acquire. However, there are signs that new opportunities will come forward in digital platforms that may allow for a greater degree of rights retention than has been available for the past few years, especially if the IP is owned by the Group. The Board is pleased that the Company achieved the goals it set management in terms of the EBIT of the business and will continue to work to improve the Company’s financial performance going forward for the benefit of its shareholders and stakeholders. The Board intends to return to paying regular dividends as from the 2023 financial year. Mikael Borglund CEO & Managing Director 29 August 2022 Days Like These 7. FOREIGN EXCHANGE – IMPACT ON RESULTS The Company has significant exposure to foreign exchange fluctuations in the television production and distribution operating segments with approximately 82% (2021: 84%) of Company revenues derived outside Australia. In the normal course, the Company only hedges production costs denominated in US$ that are to be received for services provided by the Australian production business. Foreign currency sales contracts entered by the television distribution segment (Beyond Rights) are not hedged. The total foreign exchange gain for FY2022 is $132,000 (2021: loss of $1,131,000). This gain is allocated to the operating segments as follows: BEYOND INTERNATIONAL ANNUAL REPORT 2022 15 14 CORPORATE GOVERNANCE STATEMENT 2022 CORPORATE GOVERNANCE STATEMENT RECOMMENDATION 1.1 - A LISTED ENTITY SHOULD DISCLOSE: (A) THE RESPECTIVE ROLES AND RESPONSIBILITIES OF ITS BOARD AND MANAGEMENT; AND (B) THOSE MATTERS EXPRESSLY RESERVED TO THE BOARD AND THOSE DELEGATED TO MANAGEMENT. The Board is ultimately accountable for the performance of the company and provides leadership and sets the strategic objectives of the company. It appoints all senior executives and assesses their performance on at least an annual basis. It is responsible for overseeing all corporate reporting systems, remuneration frameworks, governance issues, and stakeholder communications. Decisions reserved for the Board relate to those that have a fundamental impact on the company, such as material acquisitions and takeovers, dividends and buybacks, material profits upgrades and downgrades, and significant closures. Management is responsible for implementing the Board’s strategy, day-to-day operational aspects, and ensuring that all risks and performance issues are brought the Boards attention. They must operate within the risk and authorisation parameters set by the Board. RECOMMENDATION 1.2 - A LISTED ENTITY SHOULD: (A) UNDERTAKE APPROPRIATE CHECKS BEFORE APPOINTING A PERSON, OR PUTTING FORWARD TO SECURITY HOLDERS A CANDIDATE FOR ELECTION, AS A DIRECTOR; AND (B) PROVIDE SECURITY HOLDERS WITH ALL MATERIAL INFORMATION IN ITS POSSESSION RELEVANT TO A DECISION ON WHETHER OR NOT TO ELECT OR RE-ELECT A DIRECTOR. The company undertakes comprehensive reference checks prior to appointing a director or putting that person forward as a candidate to ensure that person is competent, experienced, and would not be impaired in any way from undertaking the duties of director. The company provides relevant information to shareholders for their consideration about the attributes of candidates together with whether the Board supports the appointment or re-election. RECOMMENDATION 1.3 - A LISTED ENTITY SHOULD HAVE A WRITTEN AGREEMENT WITH EACH DIRECTOR AND SENIOR EXECUTIVE SETTING OUT THE TERMS OF THEIR APPOINTMENT. The terms of the appointment of a non-executive director, executive directors and senior executives are agreed upon and set out in writing at the time of appointment. RECOMMENDATION 1.4 - THE COMPANY SECRETARY OF A LISTED ENTITY SHOULD BE ACCOUNTABLE DIRECTLY TO THE BOARD, THROUGH THE CHAIR, ON ALL MATTERS TO DO WITH THE PROPER FUNCTIONING OF THE BOARD. The Company Secretary reports directly to the Board through the Chairman and is accessible to all directors. RECOMMENDATION 1.5 - A LISTED ENTITY SHOULD (A) HAVE A DIVERSITY POLICY WHICH INCLUDES REQUIREMENTS FOR THE BOARD OR A RELEVANT COMMITTEE OF THE BOARD TO SET MEASURABLE OBJECTIVES FOR ACHIEVING GENDER DIVERSITY AND TO ASSESS ANNUALLY BOTH THE OBJECTIVES AND THE ENTITY’S PROGRESS IN ACHIEVING THEM; (B) DISCLOSE THAT POLICY OR A SUMMARY OF IT; AND (C) DISCLOSE AS AT THE END OF EACH REPORTING PERIOD THE MEASURABLE OBJECTIVES FOR ACHIEVING GENDER DIVERSITY SET BY THE BOARD OR A RELEVANT COMMITTEE OF THE BOARD IN ACCORDANCE WITH THE ENTITY’S DIVERSITY POLICY AND ITS PROGRESS TOWARDS ACHIEVING THEM, AND EITHER: (1) THE RESPECTIVE PROPORTIONS OF MEN AND WOMEN ON THE BOARD, IN SENIOR EXECUTIVE POSITIONS AND ACROSS THE WHOLE ORGANISATION (INCLUDING HOW THE ENTITY HAS DEFINED “SENIOR EXECUTIVE” FOR THESE PURPOSES); OR (2) IF THE ENTITY IS A “RELEVANT EMPLOYER” UNDER THE WORKPLACE GENDER EQUALITY ACT, THE ENTITY’S MOST RECENT “GENDER EQUALITY INDICATORS”, AS DEFINED IN AND PUBLISHED UNDER THAT ACT. The company does not have a formal diversity policy. The company however undertakes to assess an individual’s credentials on their merit, with complete objectivity and without bias so that the company may attract, appoint and retain the best people to work within the company where all persons have equal opportunity. As at the date of this report, 47% of the organisation were women (53% men); and 44% of senior executive positions were occupied by women (56% men). For this purpose, the Board defines a senior executive as a person who makes, or participates in the making of, decisions that affect the whole BEYOND INTERNATIONAL LIMITED Corporate Governance Statement, 30 June 2022 This Corporate Governance Statement of Beyond International Limited (the ‘company’) has been prepared in accordance with the 4th Edition of the Australian Securities Exchange’s (‘ASX’) Corporate Governance Principles and Recommendations of the ASX Corporate Governance Council (‘ASX Principles and Recommendations’). The company’s ASX Appendix 4G, which is a checklist cross-referencing the ASX Principles and Recommendations to the relevant disclosures in either this statement, our website or Annual Report, is contained on our website at http://www.beyond.com.au/corporate/corporate-governance. This statement has been approved by the company’s Board of Directors (‘Board’) and is current as at 31 August 2022. The ASX Principles and Recommendations and the company’s response as to how and whether it follows those recommendations are set out below. Animals Aboard No Recipe Road Trip with the Try Guys BEYOND INTERNATIONAL ANNUAL REPORT 2022 17 16 or a substantial part of the business or has the capacity to affect significantly the company’s financial standing. This therefore includes all senior management and senior executive designated positions as well as senior specialised professionals. Beyond also discloses its performance against gender equality indicators in its Annual Report to the Workplace Gender Equality Agency. RECOMMENDATION 1.6 - A LISTED ENTITY SHOULD (A) HAVE AND DISCLOSE A PROCESS FOR PERIODICALLY EVALUATING THE PERFORMANCE OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS; AND (B) DISCLOSE, IN RELATION TO EACH REPORTING PERIOD, WHETHER A PERFORMANCE EVALUATION WAS UNDERTAKEN IN THE REPORTING PERIOD IN ACCORDANCE WITH THAT PROCESS. The company does not currently have a formal process for evaluating the performance of the Board, its committees or individual directors. The Board conducts an introspective annual discussion of its performance on a collective basis to identify general aspects of its performance that could be improved upon, and such analysis includes the roles played by each Board member. Such reviews therefore encapsulate collective discussion around the performance of individual Board members, their roles on specific projects during the financial year, and where relevant, how their role could be modified or suggestions for individual development or performance improvement for the future. Until such time as the company expands to justify an expansion of Board members, the Board is of the current opinion that such performance evaluation is suitable for the company. RECOMMENDATION 1.7 - A LISTED ENTITY SHOULD (A) HAVE AND DISCLOSE A PROCESS FOR PERIODICALLY EVALUATING THE PERFORMANCE OF ITS SENIOR EXECUTIVES; AND (B) DISCLOSE, IN RELATION TO EACH REPORTING PERIOD, WHETHER A PERFORMANCE EVALUATION WAS UNDERTAKEN IN THE REPORTING PERIOD IN ACCORDANCE WITH THAT PROCESS. The Board conducts an annual performance assessment of the CEO against agreed performance measures determined at the start of the year. The CEO undertakes the same assessments of senior executives. In assessing the performance of the individual, the review includes consideration of the senior executive’s function, individual targets, group targets, and the overall performance of the company. Such reviews are conducted during the first quarter of a new financial year. PRINCIPLE 2: STRUCTURE THE BOARD TO BE EFFECTIVE AND ADD VALUE RECOMMENDATION 2.1 - THE BOARD OF A LISTED ENTITY SHOULD: (A) HAVE A NOMINATION COMMITTEE WHICH: (1) HAS AT LEAST THREE MEMBERS, A MAJORITY OF WHOM ARE INDEPENDENT DIRECTORS; AND (2) IS CHAIRED BY AN INDEPENDENT DIRECTOR, AND DISCLOSE: (3) THE CHARTER OF THE COMMITTEE; (4) THE MEMBERS OF THE COMMITTEE; AND (5) AS AT THE END OF EACH REPORTING PERIOD, THE NUMBER OF TIMES THE COMMITTEE MET THROUGHOUT THE PERIOD AND THE INDIVIDUAL ATTENDANCES OF THE MEMBERS AT THOSE MEETINGS; OR (B) IF IT DOES NOT HAVE A NOMINATION COMMITTEE, DISCLOSE THAT FACT AND THE PROCESSES IT EMPLOYS TO ADDRESS BOARD SUCCESSION ISSUES AND TO ENSURE THAT THE BOARD HAS THE APPROPRIATE BALANCE OF SKILLS, KNOWLEDGE, EXPERIENCE, INDEPENDENCE AND DIVERSITY TO ENABLE IT TO DISCHARGE ITS DUTIES AND RESPONSIBILITIES EFFECTIVELY. The Board does not maintain a Nomination Committee as it is considered that the current size of the Board does not warrant the formal establishment of a separate committee. The Board therefore performs the function of such a committee which includes the identification of skills and competencies required for the Board and related committees, as well as nomination, selection and performance evaluation of non-executive directors. The Board does not actively manage succession planning and instead relies upon the Board’s extensive networking capabilities and/or executive recruitment firms to identify appropriate candidates when a Board vacancy occurs or when a vacancy is otherwise envisaged. Attributes of candidates put forward will be considered for ‘best-fit’ to the needs of the Board which are assessed at the time of the vacancy. RECOMMENDATION 2.2 - A LISTED ENTITY SHOULD HAVE AND DISCLOSE A BOARD SKILLS MATRIX SETTING OUT THE MIX OF SKILLS AND DIVERSITY THAT THE BOARD CURRENTLY HAS OR IS LOOKING TO ACHIEVE IN ITS MEMBERSHIP. The Board’s skills matrix indicates the mix of skills, experience and expertise that are considered necessary at Board level for optimal performance of the Board. The matrix reflects the Board’s objective to have an appropriate mix of industry and professional experience including skills such as leadership, governance, strategy, finance, risk, IT, HR, policy development, international business and customer relationship. External consultants may be brought in with specialist knowledge to address areas where this is an attribute deficiency in the Board. RECOMMENDATION 2.3 - A LISTED ENTITY SHOULD DISCLOSE: (A) THE NAMES OF THE DIRECTORS CONSIDERED BY THE BOARD TO BE INDEPENDENT DIRECTORS; (B) IF A DIRECTOR HAS AN INTEREST, POSITION, ASSOCIATION OR RELATIONSHIP OF THE TYPE DESCRIBED IN BOX 2.3 BUT THE BOARD IS OF THE OPINION THAT IT DOES NOT COMPROMISE THE INDEPENDENCE OF THE DIRECTOR, THE NATURE OF THE INTEREST, POSITION, ASSOCIATION OR RELATIONSHIP IN QUESTION AND AN EXPLANATION OF WHY THE BOARD IS OF THAT OPINION; AND (C) THE LENGTH OF SERVICE OF EACH DIRECTOR. Details of the Board of directors, their appointment dated, length of service as independence status is as follows: DIRECTOR’S NAME DATE APPOINTED LENGTH OF SERVICE AT REPORTING DATE INDEPENDENCE STATUS Ian Robertson 27 September 2005 15 years Independent Non- executive The Board may determine that a director is independent notwithstanding the existence of an interest, position, association or relationship of the kind identified in the examples listed under Recommendation 2.3 of the ASX Principles and Recommendations. RECOMMENDATION 2.4 - A MAJORITY OF THE BOARD OF A LISTED ENTITY SHOULD BE INDEPENDENT DIRECTORS. There are currently 4 members on the company’s Board. Having regard to the company’s response to Recommendation 2.3 above, the majority of the Board are not independent. The Board considers that the company is reliant upon the business relationships and interests that it has with the non-independent directors in order to achieve its objectives at this time. Until such time as the company is of a size that warrants the appointment of additional non-executive and independent directors, the Board is of the view that the absence of a majority of independent directors is not an impediment to its operations, shareholders or other stakeholders. RECOMMENDATION 2.5 - THE CHAIR OF THE BOARD OF A LISTED ENTITY SHOULD BE AN INDEPENDENT DIRECTOR AND, IN PARTICULAR, SHOULD NOT BE THE SAME PERSON AS THE CEO OF THE ENTITY. The roles of the Chair of the Board and Chief Executive Officer are separate. Ian Ingram is Chair of the Board and is not considered to be an independent director of the company. Mikael Borglund is the CEO. The Board acknowledges the ASX Recommendation that the Chair of the Board be an independent director, however the Board has formed the view that Mr Ingram is the most appropriate person to lead the Board given his experience and skills. RECOMMENDATION 2.6 - A LISTED ENTITY SHOULD HAVE A PROGRAM FOR INDUCTING NEW DIRECTORS AND PROVIDE APPROPRIATE PROFESSIONAL DEVELOPMENT OPPORTUNITIES FOR DIRECTORS TO DEVELOP AND MAINTAIN THE SKILLS AND KNOWLEDGE NEEDED TO PERFORM THEIR ROLE AS DIRECTORS EFFECTIVELY. New directors undertake an induction program coordinated by the Company Secretary that briefs and informs the director on all relevant aspects of the company’s operations and background. A director development program is also available to ensure that directors can enhance their skills and remain abreast of important developments. PRINCIPLE 3: INSTIL A CULTURE OF ACTING LAWFULLY, ETHICALLY AND RESPONSIBLY RECOMMENDATION 3.1 - A LISTED ENTITY SHOULD ARTICULATE AND DISCLOSE ITS VALUES. Beyond recognises the importance of honesty, integrity, and fairness in conducting its business, and is committed to increasing shareholder value in conjunction with fulfilling its responsibilities as a good corporate citizen. All Directors, managers and staff are expected to act with the utmost integrity and objectivity, striving at all times to enhance the reputation and performance of the Company. RECOMMENDATION 3.2: (A) HAVE AND DISCLOSE A CODE OF CONDUCT FOR ITS DIRECTORS, SENIOR EXECUTIVES AND EMPLOYEES; AND (B) ENSURE THAT THE BOARD OR ANY COMMITTEE OF THE BOARD IS INFORMED OF ANY MATERIAL BREACHES OF THIS POLICY. The company maintains a code of conduct for its directors, senior executives and employees. In summary, the code requires that each person act honestly, in good faith and in the best interests of the company; exercise a duty of care; use the powers of office in the best interests of the company and not for personal gain, declare any conflict of interest; safeguard company’s assets and information and not undertake any action that may jeopardise the reputation of company. The board is informed immediately in the event of any material breaches of the code of conduct. That code is available on the company’s website. RECOMMENDATION 3.3: (A) HAVE AND DISCLOSE A WHISTLE-BLOWER POLICY AND (B) ENSURE THAT THE BOARD OR ANY COMMITTEE OF THE BOARD IS INFORMED OF ANY MATERIAL BREACHES OF THIS POLICY. The Whistle-blower Policy emphasises that Beyond will not tolerate anyone being discouraged from speaking up or being adversely impacted because they have reported misconduct in accordance with the policy. The board is informed immediately in the event of any material breaches of the Whistle-blower Policy. The code is available on the Company’s website. RECOMMENDATION 3.4: (A) HAVE AND DISCLOSE AN ANTI-BRIBERY AND CORRUPTION POLICY AND (B) ENSURE THAT THE BOARD OR ANY COMMITTEE OF THE BOARD IS INFORMED OF ANY MATERIAL BREACHES OF THIS POLICY. Beyond has a policy that emphasises a strong culture of integrity and ethical conduct. The policy cover expectations on issues such as community engagement, political donations and participation, use of information and its security, , market disclosure, fraud, bribery, corruption and the avoidance of conflicts of interest. The board is informed immediately in the event of any breaches of the Anti-bribery and Corruption Policy. The code is available on the Company’s website. CORPORATE GOVERNANCE STATEMENT 2022 BEYOND INTERNATIONAL ANNUAL REPORT 2022 19 18 PRINCIPLE 4: SAFEGUARD THE INTEGRITY OF CORPORATE REPORTS RECOMMENDATION 4.1 - THE BOARD OF A LISTED ENTITY SHOULD: (A) HAVE AN AUDIT COMMITTEE WHICH: (1) HAS AT LEAST THREE MEMBERS, ALL OF WHOM ARE NON-EXECUTIVE DIRECTORS AND A MAJORITY OF WHOM ARE INDEPENDENT DIRECTORS; AND (2) IS CHAIRED BY AN INDEPENDENT DIRECTOR, WHO IS NOT THE CHAIR OF THE BOARD, AND DISCLOSE: (3) THE CHARTER OF THE COMMITTEE; (4) THE RELEVANT QUALIFICATIONS AND EXPERIENCE OF THE MEMBERS OF THE COMMITTEE; AND (5) IN RELATION TO EACH REPORTING PERIOD, THE NUMBER OF TIMES THE COMMITTEE MET THROUGHOUT THE PERIOD AND THE INDIVIDUAL ATTENDANCES OF THE MEMBERS AT THOSE MEETINGS; OR (B) IF IT DOES NOT HAVE AN AUDIT COMMITTEE, DISCLOSE THAT FACT AND THE PROCESSES IT EMPLOYS THAT INDEPENDENTLY VERIFY AND SAFEGUARD THE INTEGRITY OF ITS CORPORATE REPORTING, INCLUDING THE PROCESSES FOR THE APPOINTMENT AND REMOVAL OF THE EXTERNAL AUDITOR AND THE ROTATION OF THE AUDIT ENGAGEMENT PARTNER. The Board maintains a combined Audit and Risk Committee, the members of which are:- DIRECTOR’S NAME EXECUTIVE STATUS INDEPENDENCE STATUS Anthony Lee – Chair Non-Executive Not independent Ian Ingram Non-Executive Not independent The majority of the Committee members and the Chair are not independent. The current size of the Board does not allow for this recommendation to be met. Details of the qualifications and experience of the members of the Committee is detailed in the ‘Information of directors’ section of the Directors’ report. The Charter of the Committee is available at the company’s website. The number of Committee meetings held and attended by each member is disclosed in the ‘Meetings of directors’ section of the Directors’ report. RECOMMENDATION 4.2 - THE BOARD OF A LISTED ENTITY SHOULD, BEFORE IT APPROVES THE ENTITY’S FINANCIAL STATEMENTS FOR A FINANCIAL PERIOD, RECEIVE FROM ITS CEO AND CFO A DECLARATION THAT, IN THEIR OPINION, THE FINANCIAL RECORDS OF THE ENTITY HAVE BEEN PROPERLY MAINTAINED AND THAT THE FINANCIAL STATEMENTS COMPLY WITH THE APPROPRIATE ACCOUNTING STANDARDS AND GIVE A TRUE AND FAIR VIEW OF THE FINANCIAL POSITION AND PERFORMANCE OF THE ENTITY AND THAT THE OPINION HAS BEEN FORMED ON THE BASIS OF A SOUND SYSTEM OF RISK MANAGEMENT AND INTERNAL CONTROL WHICH IS OPERATING EFFECTIVELY. For the financial year ended 30 June 2021 and the half-year ended 31 December 2020, the company’s CEO and CFO provided the Board with the required declarations. RECOMMENDATION 4.3 - A LISTED ENTITY SHOULD DISCLOSE ITS PROCESS TO VERIFY THE INTEGRITY OF ANY PERIODIC CORPORATE REPORT IT RELEASES TO THE MARKET THAT IS NOT AUDITED OR REVIEWED BY AN EXTERNAL AUDITOR. Any periodic corporate report the Company releases to the market that is not audited is reviewed by the Finance Committee before being presented to the Board for approval to release. The Finance Committee consists of the Chairman, CEO and CFO and meet on a fortnightly basis. PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSURE RECOMMENDATION 5.1 - A LISTED ENTITY SHOULD HAVE AND DISCLOSE A WRITTEN POLICY FOR COMPLYING WITH ITS CONTINUOUS DISCLOSURE OBLIGATIONS UNDER LISTING RULE 3.1. The company maintains a written policy that outlines the responsibilities relating to the directors, officers and employees in complying with the company’s disclosure obligations. Where any such person is of any doubt as to whether they possess information that could be classified as market sensitive, they are required to notify the Company Secretary immediately in the first instance. The Company Secretary is required to consult with the CEO in relation to matters brought to his or her attention for potential announcement. Generally, the CEO is ultimately responsible for decisions relating to the making of market announcements. The Board is required to authorise announcements of significance to the company. No member of the company shall disclose market sensitive information to any person unless they have received acknowledgement from the ASX that the information has been released to the market. RECOMMENDATION 5.2 - A LISTED ENTITY SHOULD ENSURE THAT ITS BOARD RECEIVES COPIES OF ALL MATERIAL MARKET ANNOUNCEMENTS PROMPTLY AFTER THEY HAVE BEEN MADE. All material market announcements are required to be approved by the Board prior to their release. RECOMMENDATION 5.3 - A LISTED ENTITY THAT GIVES A NEW AND SUBSTANTIVE INVESTOR OR ANALYST PRESENTATION SHOULD RELEASE A COPY OF THE PRESENTATION MATERIALS ON THE ASX MARKET ANNOUNCEMENTS PLATFORM AHEAD OF THE PRESENTATION. The Company has not made presentations to any analysts nor to a new and substantive investor in the 2021 financial year. PRINCIPLE 6: RESPECT THE RIGHTS OF SECURITY HOLDERS RECOMMENDATION 6.1 - A LISTED ENTITY SHOULD PROVIDE INFORMATION ABOUT ITSELF AND ITS GOVERNANCE TO INVESTORS VIA ITS WEBSITE. The company maintains information in relation to governance documents, directors and senior executives, Board and committee charters, annual reports, ASX announcements and contact details on the company’s website. RECOMMENDATIONS 6.2 AND 6.3 A listed entity should design and implement an investor relations program to facilitate effective two-way communication with investors (6.2). A listed entity should disclose the policies and processes it has in place to facilitate and encourage participation at meetings of security holders (6.3). In order for the investors to gain a greater understanding of the company’s business and activities, the company schedules regular interactions between the CEO, CFO and/ or Managing Director where it engages with institutional and private investors, analysts and the financial media. These meetings are not held within a four-week blackout period in advance of the release of interim or full-year results. The company encourages shareholders to attend its AGM and to send in questions prior to the AGM so that they may be responded to during the meeting. It also encourages ad hoc enquiry via email which are responded to. Written transcripts of the meeting are made available on the company’s website. RECOMMENDATION 6.4 – A LISTED ENTITY SHOULD ENSURE THAT ALL SUBSTANTIVE RESOLUTIONS AT A MEETING OF SECURITY HOLDERS ARE DECIDED BY A POLL RATHER THAN BY A SHOW OF HANDS. As a result of the COVID-19 pandemic, and restrictions on travel and large gatherings, the Company conducted a “virtual” AGM in 2020, using technology to allow shareholders to ask questions in advance of the meeting, attend the meeting and to participate despite the restrictions. This meeting was held in accordance with Corporations Act 2001 guidelines for such events. A virtual AGM will be held in 2021. All resolutions at shareholder meetings are determined by poll. RECOMMENDATION 6.5 – A LISTED ENTITY SHOULD GIVE SECURITY HOLDERS THE OPTION TO RECEIVE COMMUNICATIONS FROM, AND SEND COMMUNICATIONS TO, THE ENTITY AND ITS SECURITY REGISTRY ELECTRONICALLY. The company engages its share registry to manage the majority of communications with shareholders. Shareholders are encouraged to receive correspondence from the company electronically, thereby facilitating a more effective, efficient and environmentally friendly communication mechanism with shareholders. Shareholders not already receiving information electronically can elect to do so through the share registry, Computershare Australia Limited at https://www-au.computershare.com/investor/?gcc=au PRINCIPLE 7: RECOGNISE AND MANAGE RISK RECOMMENDATIONS 7.1 & 7.2 The board of a listed entity should: (a) have a committee or committees to oversee risk, each of which: (1) has at least three members, a majority of whom are independent directors; and (2) is chaired by an independent director, and disclose: (3) the charter of the committee; (4) the members of the committee; and (5) as at the end of each reporting period, the number of times the committee met throughout the period and the individual attendances of the members at those meetings; or (b) if it does not have a risk committee or committees that satisfy (a) above, disclose that fact and the processes it employs for overseeing the entity’s risk management framework (7.1). The board or a committee of the board should: (a) review the entity’s risk management framework at least annually to satisfy itself that it continues to be sound; and (b) disclose, in relation to each reporting period, whether such a review has taken place (7.2). The Board maintains a combined Audit and Risk Committee. The members of the Committee are detailed in Recommendation 4.1 above. The charter of the Risk Committee can be found on the company’s website. The Audit and Risk Committee reviews the company’s risk management framework annually to ensure that it is still suitable to the company’s operations and objectives and that the company is operating within the risk parameters set by the Board. As a consequence of the last review undertaken for the year ended 30 June 2018, there were no significant recommendations made. The Board acknowledges that it has not followed the ASX Recommendations in relation to the number of members and independence due to the size of the Board. The company maintains internal controls which assist in managing enterprise risk, and these are reviewed as part of the scope of the external audit, with the auditor providing the Board with commentary on their effectiveness and the need for any additional controls. The Managing Director and CEO are responsible for monitoring operational risk, ensuring all relevant insurances are in place, and ensuring that all regulatory and compliance obligations of the company are satisfied. RECOMMENDATION 7.3 - A LISTED ENTITY SHOULD DISCLOSE: (A) IF IT HAS AN INTERNAL AUDIT FUNCTION, HOW THE FUNCTION IS STRUCTURED AND WHAT ROLE IT PERFORMS; OR (B) IF IT DOES NOT HAVE AN INTERNAL AUDIT FUNCTION, THAT FACT AND THE PROCESSES IT EMPLOYS FOR EVALUATING AND CONTINUALLY IMPROVING THE EFFECTIVENESS OF ITS RISK MANAGEMENT AND INTERNAL CONTROL PROCESSES. The company does not have a dedicated internal audit function. The responsibility for risk management and internal controls lies with both the Managing Director and CFO who continually monitor the company’s internal and external risk environment. Necessary action is taken to protect the integrity of the company’s books and records including by way of design and implementation of internal controls, and CORPORATE GOVERNANCE STATEMENT 2022 BEYOND INTERNATIONAL ANNUAL REPORT 2022 21 20 to ensure operational efficiencies, mitigation of risks, and safeguard of company assets. RECOMMENDATION 7.4 - A LISTED ENTITY SHOULD DISCLOSE WHETHER IT HAS ANY MATERIAL EXPOSURE TO ECONOMIC, ENVIRONMENTAL AND SOCIAL SUSTAINABILITY RISKS AND, IF IT DOES, HOW IT MANAGES OR INTENDS TO MANAGE THOSE RISKS. Refer to the company’s Annual Report for disclosures relating to the company’s material business risks (including any material exposure to economic, environmental or social sustainability risks). Refer to commentary at Recommendations 7.1 and 7.2 for information on the company’s risk management framework. PRINCIPLE 8: REMUNERATE FAIRLY AND RESPONSIBLY RECOMMENDATION 8.1 - THE BOARD OF A LISTED ENTITY SHOULD: (A) HAVE A REMUNERATION COMMITTEE WHICH: (1) HAS AT LEAST THREE MEMBERS, A MAJORITY OF WHOM ARE INDEPENDENT DIRECTORS; AND (2) IS CHAIRED BY AN INDEPENDENT DIRECTOR, AND DISCLOSE: (3) THE CHARTER OF THE COMMITTEE; (4) THE MEMBERS OF THE COMMITTEE; AND (5) AS AT THE END OF EACH REPORTING PERIOD, THE NUMBER OF TIMES THE COMMITTEE MET THROUGHOUT THE PERIOD AND THE INDIVIDUAL ATTENDANCES OF THE MEMBERS AT THOSE MEETINGS; OR (B) IF IT DOES NOT HAVE A REMUNERATION COMMITTEE, DISCLOSE THAT FACT AND THE PROCESSES IT EMPLOYS FOR SETTING THE LEVEL AND COMPOSITION OF REMUNERATION FOR DIRECTORS AND SENIOR EXECUTIVES AND ENSURING THAT SUCH REMUNERATION IS APPROPRIATE AND NOT EXCESSIVE. The Board maintains a Remuneration Committee. The members of the Committee are detailed below. DIRECTOR’S NAME EXECUTIVE STATUS INDEPENDENCE STATUS Ian Robertson – Chair Non-Executive Independent Anthony Lee Non-Executive Not independent Ian Ingram Non-Executive Not independent Details of the qualifications and experience of the members of the Committee is detailed in the ‘Information of directors’ section of the Directors’ report. The Remuneration Committee oversees remuneration policy and monitors remuneration outcomes to promote the interests of shareholders by rewarding, motivating and retaining employees. The committee’s charter sets out the roles and responsibilities, composition and structure of the Committee and is available on the company’s website. The number of Committee meetings held and attended by each member is disclosed in the ‘Meetings of directors’ section of the Directors’ report. The Board acknowledges that it has not followed the ASX Recommendations in relation to the number of members and independence due to the size of the Board. RECOMMENDATION 8.2 - A LISTED ENTITY SHOULD SEPARATELY DISCLOSE ITS POLICIES AND PRACTICES REGARDING THE REMUNERATION OF NON-EXECUTIVE DIRECTORS AND THE REMUNERATION OF EXECUTIVE DIRECTORS AND OTHER SENIOR EXECUTIVES. Non-executive directors are remunerated by way of cash fees, superannuation contributions and non-cash benefits in lieu of fees. The level of remuneration reflects the anticipated time commitments and responsibilities of the position. Performance based incentives are not available to non-executive directors. Executive directors and other senior executives are remunerated using combinations of fixed and performance-based remuneration. Fees and salaries are set at levels reflecting market rates and performance-based remuneration is linked directly to specific performance targets that are aligned to both short and long term objectives. Further details in relation to the company’s remuneration policies are contained in the Remuneration Report, within the Directors’ report. RECOMMENDATION 8.3 - A LISTED ENTITY WHICH HAS AN EQUITY-BASED REMUNERATION SCHEME SHOULD: (A) HAVE A POLICY ON WHETHER PARTICIPANTS ARE PERMITTED TO ENTER INTO TRANSACTIONS (WHETHER THROUGH THE USE OF DERIVATIVES OR OTHERWISE) WHICH LIMIT THE ECONOMIC RISK OF PARTICIPATING IN THE SCHEME; AND (B) DISCLOSE THAT POLICY OR A SUMMARY OF IT The use of derivatives or other hedging arrangements for unvested securities of the company or vested securities of the company which are subject to escrow arrangements is prohibited. Where a director or other senior executive uses derivatives or other hedging arrangements over vested securities of the company, this will be disclosed. CORPORATE GOVERNANCE STATEMENT 2022 Deadly Kin BEYOND INTERNATIONAL ANNUAL REPORT 2022 23 22 BOARD OF DIRECTORS 2022 BOARD OF DIRECTORS IAN INGRAM CHAIRMAN BA, BSC (ECON) (HONS), BARRISTER AT LAW Mr Ingram was the founding Chairman of Beyond International Limited when it was formed in September 1986 and is currently the Non Executive Chairman. During his tenure, Beyond has emerged as one of the world’s leading film and television production, sales and distribution organisations. MIKAEL BORGLUND MANAGING DIRECTOR AND CEO BBUS, CA A founding director of Beyond International in 1984, Mikael Borglund became Managing Director of the Beyond International Limited Group of companies in 1991 having been responsible for production, international sales and finance. During an outstanding career in the film and television industry Mikael has executive produced a number of Australian award winning feature films including Kiss Or Kill (1996), Lantana (2001), and James Cameron’s Deepsea Challenge (2014). Mikael has been Executive Producer of hundreds of hours of television for broadcasters around the globe. His credits include a number of internationally successful shows including, MythBusters, Stingers, Good Guys/Bad Guys, Halifax Fp, James Cameron’s Deepsea Challenge, Motown Magic and the animated series Beat Bugs. A highly regarded member of the Australian film and television industry, Mikael was elected to the council of the Screen Producers Association of Australia (SPAA) in 1994, and appointed to the Board of the Australian Film Institute in 1997 – 2005. IAN ROBERTSON NON-EXECUTIVE DIRECTOR AO BCOM, LLB, FAICD A media and corporate lawyer who is the National Managing Partner of national law firm Holding Redlich and is the Managing Partner of the firm’s Sydney office. He is a former President of the Board of the Victorian Government screen agency Film Victoria, and the former Deputy Chair of the Australian Government film agency Screen Australia. ANTHONY HSIEN PIN LEE NON-EXECUTIVE DIRECTOR B.A. PRINCETON UNIVERSITY NEW JERSEY USA, MBA THE CHINESE UNIVERSITY OF HONG KONG Mr Lee is a private investor and a Director of Aberon Pty Limited, his investment company. Prior to moving to Sydney from Hong Kong in 1987, Mr Lee was a corporate finance executive with a leading British merchant bank. BEYOND INTERNATIONAL ANNUAL REPORT 2022 25 24 DIRECTORS’ REPORT 2022 TELEVISION PRODUCTIONS AND COPYRIGHT SEGMENT Television production revenue decreased by $19,153,000 or 24% to $52,833,000. The segment received $1,094,000 in Job Keeper support to 30 June 2021. In 2022 the net “copyright income” from the further exploitation of the programs by Beyond Distribution was $2,834,000 compared to $1,924,000 in 2021. Segment operating EBITDA for the 12-month period decreased to $7,529,000 (2021: $8,801,000). The television series produced for the US market during the year includes returning title, My Lottery Dream Home series 13. New commissions in the year include EKO Cookshop Series, No Recipe Road trip with the Try Guys and Back In The Groove and Players. UK commissioned productions were WoW That’s Amazing!, Mind Games and Outrageous Homes. Australian program commissions during the period include Matt Wright’s Wild Territory, On The Record, The Invisibles Series 2, Deadly Kin, MythBusters There Is Your Problem Series 2, Animals Aboard, John Farnham – Finding The Voice, Alien Time Capsule and The Birthday Party. TV AND FILM DISTRIBUTION SEGMENT (BEYOND RIGHTS) Segment revenue has decreased by $4,011,000 or 9% decrease to $39,788,000 compared to the corresponding 12-month period (2021: $43,799,000). The segment EBITDA for the twelve months was $5,543,000 compared to the corresponding 12-month period (2021: $6,285,000). Margin improved due to successful sales of titles previously written down generating 100% margin, delivering $1,700,000. During the year successful sales were achieved for in house produced series, which include Deadly Women, MythBusters and The Invisibles. The most successful third-party products sold were Abandoned Engineering, Underground Worlds, Massive Engineering Mistakes, Highway Thru Hell and Heavy Rescue 401. HOME ENTERTAINMENT SEGMENT (BHE) The BHE business was effectively closed in July 2020, with key licensing contracts novated to Regency Media. Beyond continues to earn a commission on sales of product sold by Regency and booked revenues of $32,000 in the 2022 financial year. The net contribution of BHE in the 2022 financial year was $35,000. Net contribution is impacted by the recovery of prior year stock writeback. DIGITAL MARKETING SEGMENT (BEYOND D) Beyond D has been disposed of in November 2021 and as such is reclassified as a discontinued business. Trading for Beyond D in the period to 29th November 2021 is a loss of $548,000 (net of tax). 7. SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS On the 29th November 2021 the Group sold the Beyond D division. 8. MATTERS SUBSEQUENT TO THE END OF THE FINANCIAL YEAR No matter or circumstance has arisen since 30 June 2022 that has significantly affected or may significantly affect the Group’s operations, the results of those operations or the Group’s state of affairs in future years. 9. LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS The Company is now set up to focus on two core activities: • The development and creation of media content in the English language from its production operations in the USA, UK and Australia; and • The distribution and licensing of completed media content to international markets. 1. DIRECTORS The names of Directors in office at any time during or since the end of the financial year are; IAN INGRAM – Non-Executive Chairman MIKAEL BORGLUND – Managing Director ANTHONY LEE – Non-Executive Director IAN ROBERTSON – Non-Executive Director Directors have been in office since the start of the financial year to the date of this report unless otherwise stated. 2. COMPANY SECRETARY The following person held the position of Company Secretary during and at the end of the financial year: Mr. Paul Wylie resigned as Company Secretary on 28 January 2022. Peter Fedele was appointed Company Secretary on 28 January 2022. Mr. Fedele is also the General Manager of Finance for the Group. 3.PRINCIPAL ACTIVITIES OF THE GROUP The principal activities of the group during the financial year were television program production and international sales of television programs. There was no significant change in those activities during the financial year. 4. OPERATING RESULTS The consolidated profit attributable to members of the Company for the financial year was $3,478,000 (2021: $800,000). 5. DIVIDENDS No dividends have been declared in relation to the 2022 financial year. 6. REVIEW OF OPERATIONS Revenue from continuing operations for the year was 19% lower than revenues for 2021 at $92,240,000 compared to $114,497,000. The result excludes the digital marketing business unit as this is disclosed separately as a discontinued operation. The result for the digital marketing division was a net loss after tax of $548,000. Net profit after tax before minority interests is $3,325,000 for the 2022 financial year – this compares favourably to after tax before minority interests of $555,000 reported for the 2021 financial year. Net cash flow from operating activities was $1,231,000 (2021: $2,708,000). Net cash increased by $4,695,000 in the 2022 financial year. This included net loan drawdowns of $4,909,000 in relation to specific productions including Wild Territory. The Group received $2,147,000 in Job Keeper support in the 2021 financial year. Beyond International Limited (ASX:BYI) is a leading international producer and manager of media content for distribution internationally by means of multiple platforms including AVOD, SVOD and broadcast. Beyond has two operating business segments – international media production and media rights management and distribution. Beyond is a leading international production company with more than 5,000 hours of global television produced to date. Based in Los Angeles, London and Sydney, its programs have won multiple Emmy Awards across several genres, with a focus on factual entertainment, premium documentary programs and drama series. Beyond is currently in production on its fourth original series with Netflix and new commissions with Hulu, Disney+ and National Geographic. Television series produced by Beyond include MythBusters, White Rabbit Project, My Lottery Dream Home, Pooch Perfect, Love It Or List It Australia, Deadly Women, Troppo and Halifax Retribution. Beyond’s international distribution business manages and markets an extensive program catalogue sourced from third party producers and inhouse production. The Company has a management team with vast experience in rights acquisition, management and exploitation. Beyond licenses programming to multiple platforms throughout the world including AVOD, SVOD and broadcast. The growth in direct-to-consumer internet distribution has led to an increase in demand for quality content across multiple platforms. The business is headquartered in Dublin, with offices in London and Sydney. This announcement is made pursuant to Listing Rule 4.1 & 3.1. All enquiries should be directed to: Mr Mikael Borglund. Managing Director, Beyond International Limited Telephone 02 9437 2000 or email investor_relations@beyond.com.au DIRECTORS’ REPORT ABOUT BEYOND YOUR DIRECTORS PRESENT THEIR REPORT ON THE COMPANY AND ITS CONTROLLED ENTITIES (“CONSOLIDATED ENTITY” OR “GROUP”) FOR THE FINANCIAL YEAR ENDED 30 JUNE 2022. BEYOND INTERNATIONAL ANNUAL REPORT 2022 27 26 Elizabeth DIRECTORS’ REPORT 2022 DIRECTOR QUALIFICATIONS & EXPERIENCE SPECIAL RESPONSIBILITIES DIRECTORS’ INTERESTS IN SHARES OF BEYOND INTERNATIONAL LIMITED IAN INGRAM BA, Bsc(Econ), Honours Barrister at Law Chairman of Winchester Investments Group Pty Ltd and Sealion Media Ltd as well as Chairman of various private venture capital and investment companies. Member of the Board since 1986. Chairman, member of the Audit Committee, member of the Remuneration Committee, and Chairman of the Nomination Committee. 19,550,000 direct/indirect MIKAEL BORGLUND B.Bus, CA Extensive management & finance experience. Former member of the board of the Australian Film Institute. Member of the Board since 1990. Managing Director, CEO and member of the Nomination Committee. 3,299,035 direct/indirect ANTHONY LEE BA, MBA Director of Aberon Pty Ltd, a private investment company, a substantial shareholder in the company. Member of the Board since 1990. Non-Executive Director, Chairman of the Audit Committee, member of the Remuneration Committee, and member of the Nomination Committee. 5,474,997 direct/indirect IAN ROBERTSON LL.B. BComm, FAICD A media and corporate lawyer who is the National Managing Partner of national law firm Holding Redlich and is the Managing Partner of the firm’s Sydney office. He is a former President of the Board of the Victorian Government screen agency Film Victoria, and the former Deputy Chair of the Australian Government film agency Screen Australia. Member of the Board since 2006. Non-Executive Director, Chairman of the Remuneration Committee and member of the Nomination Committee. 110,000 direct/indirect PETER FEDELE BA Acctg, CPA Extensive media finance experience with over 25 years in television production, advertising and distribution industries. General Manager, Finance Company Secretary. - The particulars of Directors’ interests in shares are as at the date of this report. No changes in Directors’ interests in shares has occurred from the year ended 30 June 2022. 10. INFORMATION ON DIRECTORS & COMPANY SECRETARY 12. INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS The Company has entered into agreements to indemnify all Directors of the Company named in section 1 of this report, and current and former executive officers of the Group, against all liabilities to persons (other than the Company or a related body corporate) which arise out of the performance of their normal duties as Director or executive officer, unless the liability relates to conduct involving a lack of good faith. The Group has agreed to indemnify the Directors and executive officers against all costs and expenses incurred in defending an action that falls within the scope of the indemnity and any resulting payments. The Group paid insurance premiums totalling $59,949 (2021: $54,690) in respect of Directors’ and officers’ liability insurance. The policy does not specify the premium of individual Directors and executive officers. The directors’ and officers’ liability insurance provides cover against all costs and expenses involved in defending legal actions, and any resulting payments arising from a liability to persons (other than the Company or a related body corporate) incurred in their position as Director or executive officer, unless the conduct involves a wilful breach of duty or an improper use of inside information or position to gain advantage. 11. DIRECTORS’ MEETINGS The numbers of meetings of the Company’s Board of Directors and of each Committee held during the financial year ended 30 June 2022, and the number of meetings attended by each Director was: BOARD OF DIRECTORS MEETINGS AUDIT COMMITTEE MEETINGS REMUNERATION COMMITTEE MEETINGS Director Number Eligible to Attend Number Attended Number Eligible to Attend Number Attended Number Eligible to Attend Number Attended I Ingram 9 9 2 2 1 1 M Borglund 9 9 - - - - A Lee 9 9 2 2 1 1 I Robertson 9 9 - - 1 1 BEYOND INTERNATIONAL ANNUAL REPORT 2022 29 28 DIRECTORS’ REPORT 2022 13. REMUNERATION REPORT (AUDITED) A) REMUNERATION POLICY The broad approach by the Group to remuneration is to ensure that remuneration packages: • properly reflect individual’s duties and responsibilities. • are competitive in attracting, retaining, and motivating staff of the highest quality; and • uphold the interests of shareholders. The remuneration policies adopted are considered to have contributed to the growth of the Group’s profits and shareholder benefit by aligning remuneration with the performance of the Group. B) REMUNERATION APPROACH – NON-EXECUTIVE DIRECTORS Non-Executive Directors are remunerated from a maximum aggregate amount of $350,000 per annum. Current rates effective 1 October 2013 paid to Non-Executive Directors are: Chairman $188,025 p.a. Non-Executive Director $50,000 p.a. Additional Duties Chairman of a board committee $10,000 p.a. Member of a board committee $5,000 p.a. The Board’s policy is to remunerate Non-Executive Directors at market rates from comparable companies having regard to the time commitments and responsibilities assumed. There are no termination payments to Non-Executive Directors on retirement from office other than payments relating to their accrued superannuation entitlements. Name Position Duration of Contract Period of Notice to Terminate the Contract M Borglund Managing Director No Fixed term Either party may terminate on twelve months’ notice J Luscombe General Manager – Productions & Senior Vice President No Fixed term Either party may terminate on twelve months’ notice P Tehan General Manager – Legal & Business Affairs No Fixed term One-month notice given by either party M Murphy1 Executive Director – Ireland No Fixed term Twelve weeks’ notice given by either party D Smyth1 Chief Executive Officer – Beyond Rights No Fixed term Six months’ notice given by either party P Fedele2 General Manager – Finance & Company Secretary No Fixed term Three months’ notice given by either party C) CONTRACTUAL ARRANGEMENTS – KEY MANAGEMENT PERSONNEL The contracts referred to are currently on foot and variously part performed as to the duration of them. The contracts are terminable by the Company in the event of serious misconduct or non-rectified breach. Only remuneration that is due but unpaid up to the date of termination and normal statutory benefits will be paid in these circumstances. 1. Mr. David Smyth was appointed Chief Executive Officer – Beyond Rights on 15 December 2021. 2. Mr. Peter Fedele was appointed General Manager – Finance and Company Secretary on 23 November 2021 2022 NAME SALARY & FEES* BONUS NON- MONETARY BENEFITS POST-EMPLOYMENT BENEFITS (SUPERANNUATION) OTHER LONG TERM BENEFITS (LEAVE) SHARE BASED PAYMENTS TOTAL SHARE BASED PAYMENTS % OF TOTAL M Borglund $777,035 $102,273 - $23,568 $74,126 - $977,002 0% I Ingram $176,273 - - - - - $176,273 0% A Lee $51,136 - - $5,114 - - $56,250 0% I Robertson $51,136 - - $5,114 - - $56,250 0% TOTAL $1,055,581 $102,273 - $33,796 $74,126 - $1,265,775 0% Mikael Borglund’s bonus as a percentage of his salary and fees is 13% (2021: 0%). * Reflects reduction in remuneration due to COVID-19 and final 25% reinstatement to 30 June 2022. 2021 NAME SALARY & FEES* BONUS NON- MONETARY BENEFITS POST-EMPLOYMENT BENEFITS (SUPERANNUATION) OTHER LONG TERM BENEFITS (LEAVE) SHARE BASED PAYMENTS TOTAL SHARE BASED PAYMENTS % OF TOTAL M Borglund $712,887 - - $21,694 $80,137 - $814,719 0% I Ingram $70,509 - - - - - $70,509 0% A Lee $20,548 - - $1,952 - - $22,500 0% I Robertson $20,548 - - $1,952 - - $22,500 0% TOTAL $824,492 - - $25,598 $80,137 - $930,228 0% *Reflects reduction in remuneration due to COVID-19 and 75% reinstatement to 30 June 2021. Mikael Borglund is the only Executive Director employed by Beyond International Limited. For the 2022 financial year the Group did exceed the annual Board approved budget by the set criteria and as such Mikael Borglund is entitled to a performance bonus. The bonus of $102,273 is accrued and will be paid in 2023 financial year. The maximum bonus that could have been achieved is 20% of the total salary package. During the 2021 financial year the Group did not exceed the budget by the set criteria and as such Mikael Borglund was not entitled to a performance bonus. DIRECTORS OF BEYOND INTERNATIONAL LIMITED D) KEY MANAGEMENT PERSONNEL REMUNERATION The Board undertakes an annual review of its performance and the performance of the Board Committees against goals set at the start of the financial year. Any performance related bonuses are available to executives of the Company and thus no bonuses are payable to Non-Executive Directors. Any performance related bonuses will be based on the divisional net profit before tax exceeding the annual budget approved by the Board by a minimum percentage and achieving pre-agreed KPI’s. Details of the nature and the remuneration of each Director of Beyond International Limited and each of the six executives with the greatest authority for the strategic direction and management of the Company and the Group are set out in the following tables. BEYOND INTERNATIONAL ANNUAL REPORT 2022 31 30 2022 NAME SALARY & FEES BONUS NON- MONE- TARY BENE- FITS POST- EMPLOYMENT BENEFITS (SUPER- ANNUATION) OTHER LONG TERM BENEFITS (LEAVE) TERMIN- ATION BENEFITS SHARE BASED PAY- MENTS TOTAL SHARE BASED PAYMENTS % OF TOTAL J Luscombe** $603,231 $303,000 - $23,568 $25,427 - - $955,226 0% K Llewellyn- Jones* $249,417 - - $12,172 ($16,832) $14,951 - $259,707 0% M Murphy** $264,703 - - $15,876 ($12,615) - - $267,964 0% D Smyth $227,443 - - $11,095 $4,916 - - $243,454 0% P Wylie** $144,986 - - $12,727 ($68,015) $38,726 - $128,425 0% P Tehan** $247,918 $32,307 - $23,568 $6,466 - - $310,259 0% P Fedele $121,154 $27,300 - $12,115 $41,517 - - $202,086 0% J Ward* $98,989 - - $9,876 $170 - - $109,035 0% TOTAL $1,957,841 $362,607 - $120,997 ($18,966) $53,676 - $2,476,155 0% * Resigned in June 2022. ** Reflects reduction in remuneration due to COVID-19 and final 25% reinstatement to 30 June 2022. 2021 NAME SALARY & FEES BONUS NON- MONE- TARY BENE- FITS POST- EMPLOYMENT BENEFITS (SUPER- ANNUATION) OTHER LONG TERM BENEFITS (LEAVE) TERMIN- ATION BENEFITS SHARE BASED PAY- MENTS TOTAL SHARE BASED PAYMENTS % OF TOTAL J Luscombe $552,477 $482,600 - $21,694 $25,455 - - $1,082,226 0% K Llewellyn- Jones $339,372 - - $10,827 $16,832 - - $367,030 0% M Murphy * $305,057 - - $17,859 $11,649 - - $334,565 0% P Wylie * $260,373 - - $21,694 $24,580 - - $306,647 0% P Tehan * $237,523 - - $21,632 $267 - - $259,422 0% J Ward * $220,392 - - $20,860 ($3,063) - - $238,189 0% TOTAL $1,915,195 $482,600 - $114,566 $75,718 - - $2,588,079 0% * Reflects reduction in remuneration due to COVID-19 and 75% reinstatement to 30 June 2021. EXECUTIVE OFFICERS’ REMUNERATION The bonus paid to John Luscombe in the financial year as a percentage of his salary and fees is 50% (2021: 87%). The bonus calculation is a percentage of the net proceeds received by the Company from relevant programs initiated by Luscombe and for which he performed the duties of Executive Producer. Luscombe is entitled to a performance bonus of $303,000 which is accrued in the 2022 accounts and will be paid in the 2023 financial year. There is no CAP to this bonus as it is essentially a commission on sales. During the 2022 financial year, the Group exceed the annual Board approved budget by the set criteria. As such Peter Tehan and Peter Fedele are eligible for a performance bonus under the terms of their employment agreements. The bonus of $32,307 for Peter Tehan and $27,300 for Peter Fedele has been accrued in the accounts for the 2022 financial year and will be paid following approval by the remuneration committee in 2023 the financial year. The maximum bonus that could have been achieved by the KMP is 20% of the total salary package. In the 2021 financial year the budget criteria were not met and consequently those executives were not entitled to this bonus. DIRECTORS’ REPORT 2022 2022 ENTITY OPENING BALANCE 1.07.2021 NO. ACQUIRED (ON MKT) NO. ACQUIRED (OFF MKT) NO. ACQUIRED (ESS) NO. DISPOSED BALANCE 30.06.2022 J Luscombe 273,478 - - - - 273,478 P Tehan 75,000 - - - - 75,000 D Smyth M Murphy - - - - - - P Fedele - - - - - - TOTAL 348,478 - - - - 348,478 2021 ENTITY OPENING BALANCE 01.07.2020 NO. ACQUIRED (ON MKT) NO. ACQUIRED (OFF MKT) NO. ACQUIRED (ESS) NO. DISPOSED BALANCE 30.06.2021 J Luscombe 273,478 - - - - 273,478 P Tehan 75,000 - - - - 75,000 P Wylie 2,000 20,000 - - - 22,000 K Llewellyn- Jones - - - - - - M Murphy - - - - - - J Ward - - - - - - TOTAL 350,478 20,000 - - - 370,478 EXECUTIVE OFFICERS’ SHAREHOLDINGS The Angels – Kicking Down The Door BEYOND INTERNATIONAL ANNUAL REPORT 2022 33 32 DIRECTORS’ REPORT 2022 TRANSACTIONS WITH OTHER RELATED PARTIES J Luscombe is a director of Ryzara Pty Ltd. The company has received payments for services rendered by J Luscombe during the year. These fees are included as part of the Executive Remuneration disclosed in Note 34 and the Director’s Report. VOTING AND COMMENTS MADE AT THE COMPANY’S 2021 ANNUAL GENERAL MEETING (AGM) The company received 99.1% of “for” votes in relation to its remuneration report for the year ended 30 June 2021. The company did not receive any specific feedback at the AGM regarding its remuneration policy. BEYOND INTERNATIONAL EMPLOYEE SHARE PLAN The Board has adopted an employee share plan (note 31) under which employees and Directors of the Group may subscribe for shares in the Company using funds loaned to them by the Group. The Board has also adopted a share plan on substantially the same terms for consultants of the Group (Consultant Plan). The purpose of the Employee Share Plan is to: • Assist in the retention and motivation of employees and Directors of the Group by providing them with a greater opportunity to participate as shareholders in the success of the group; and • create a culture of share ownership amongst the employees of the Group. The employee share plan was approved by shareholders at the Company’s extraordinary general meeting on 12th April 2006. 2,587,500 shares were originally issued under the Employee Share Plan to eligible employees and Directors and the Group has entered into loan agreements with participants to provide the funds necessary to subscribe for those shares. Shares have been issued in accordance with the Employee Share Plan rules. There are 1,525,000 shares still subject to the Employee Share Plan. Under the Employee Share Plan rules the Board of the Group has the power to decide which full time or permanent part-time employees and Directors of the Group will participate in the Employee Share Plan and the number of shares offered to each participant. The number of shares offered to be issued under the Employee Share Plan and Consultants Plan in a five-year period must not exceed 5% of the total number of issued shares at the time of the offer, disregarding certain share issues. The shares granted under the Employee Share Plan may be subject to any restrictions the Board considers appropriate and the Board may implement any procedure the Board considers appropriate to restrict the disposal of shares acquired under the Employee Share Plan. The Board also has the power to vary or terminate the Employee Share Plan at any time, subject to the ASX Listing Rules and the Corporations Act 2001. Below are the key financial indicators for the previous 5 years. EBIT 000s NET PROFIT/(LOSS) 000s EPS (CENTS PER SHARE) NTA (CENTS PER SHARE) TOTAL EQUITY 000s DIVIDENDS (CENTS PER SHARE) 2018 354 (707) (1.15) 42.67 30,919 0.00 2019 (1,577) (2,774) (4.52) 38.00 27,993 0.00 2020 (6,332) (6,394) (10.42) 28.40 21,048 0.00 2021 3,426 800 1.30 30.78 21,086 0.00 2022 5,832 3,478 5.67 37.77 24,563 0.00 This concludes the remuneration report that has been audited. 14. TOTAL NUMBER OF EMPLOYEES The total number of fulltime equivalent employees employed by the Group at 30 June 2022 was 94 as compared with 119 at 30 June 2021. 15. SHARES UNDER OPTION At the date of this report, there are no un-issued ordinary shares of Beyond International Limited under option. 16. SHARES REDEEMED UNDER THE EMPLOYEE SHARE PLAN No shares have been redeemed from the Beyond International Limited employee share plan during or since the end of the financial year. No further shares have been approved by the Board of Directors under this plan. 17. ENVIRONMENTAL REGULATIONS The Group has assessed whether there are any particular or significant environmental regulations which apply to it and has determined that there are none. 18. CORPORATE GOVERNANCE STATEMENT Please see the following URL of the company website page where the statement is located. http://www.beyond.com.au/corporate/ corporate-governance 19. ROUNDING OF AMOUNTS The Group is of a kind referred to in ASIC Corporations (Rounding in Financial Director’s Report) Instrument 2016/191, issued by the Australian Securities and Investment Commission, relating to the “rounding off” of amounts in the report. Amounts in the financial report have been rounded off in accordance with that Legislative instrument to the nearest thousand dollars, or in certain cases, to the nearest dollar. 20. PROCEEDINGS ON BEHALF OF COMPANY No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year. 21. NON AUDIT SERVICES During the year BDO, the Company’s auditor, delivered tax services. The following fees for non-audit services were paid/payable to BDO and other BDO Network firms per note 5(c) during the year ended 30 June 2022: Tax compliance services $83,318 Other assurance services $9,500 When considering BDO to provide additional services the Board considers the non-audit services provided to ensure it is satisfied that the provision of these non-audit services by the auditor is compatible with and will not compromise the auditor independence requirements of the Corporations Act 2001. It ensures that: • All non-audit services are reviewed and approved by the Audit Committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and • Non-audit services provided do not undermine the general principles relating to audit in a management or decision-making capacity for the Company, acting as an advocate for the Company, or jointly sharing risks and rewards. 22. AUDITORS’ INDEPENDENCE DECLARATION A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is included on page 28 of the Directors’ Report. AUDITOR DETAILS BDO Audit Pty Ltd continues in office in accordance with section 327 of the Corporations Act 2001. This report is made in accordance with a resolution of the Board of Directors. For and on behalf of the Board Mikael Borglund Managing Director 29 August 2022 Sydney BEYOND INTERNATIONAL ANNUAL REPORT 2022 35 Hushabye Lullabye 34 Level 11, 1 Margaret St Sydney NSW 2000 Australia Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. DECLARATION OF INDEPENDENCE BY JOHN BRESOLIN TO THE DIRECTORS OF BEYOND INTERNATIONAL LIMITED As lead auditor of Beyond International Limited for the year ended 30 June 2022, I declare that, to the best of my knowledge and belief, there have been: 1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and 2. No contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Beyond International Limited and the entities it controlled during the financial year. John Bresolin Director BDO Audit Pty Ltd Sydney 29 August 2022 28 AUDITOR’S INDEPENDENCE DECLARATION DIRECTORS’ REPORT 2022 MythBusters There’s Your Problem BEYOND INTERNATIONAL ANNUAL REPORT 2022 37 36 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2022 CONSOLIDATED ENTITY NOTES 2022 2021 $000’S $000'S Revenue from continuing operations 5 (a) 92,240 114,497 Other income 5 (a) 816 2,165 Royalty expense 24,075 29,519 Production costs 40,746 58,963 Home entertainment direct costs - 25 Administration costs 3,949 3,878 Employee benefits expense 14,525 13,207 Finance costs 5 (b) 752 425 Provisions 242 576 Depreciation, amortisation, impairment and write-down of content assets expense 5 (b) 3,687 5,935 Net foreign exchange loss 5 (b) - 1,131 Profit before income tax from continuing operations 5 (b) 5,080 3,001 Income tax expense 6 (a) (1,207) (981) Profit after income tax for the year from continuing operations 3,873 2,020 Loss from discontinued operations, net of tax 27 (548) (1,466) Profit after income tax for the period 3,325 555 Other comprehensive income Items that may be reclassified subsequently to profit or loss: Foreign currency translation 153 (517) Other comprehensive income/(loss) for the year, net of tax 153 (517) Total comprehensive income for the year 3,478 38 Profit is attributable to: Owners of Beyond International Limited 3,479 800 Non-controlling interest (154) (245) 3,325 555 Total comprehensive income for the year is attributable to: Owners of Beyond International Limited – continuing operations 4,180 1,749 Owners of Beyond International Limited – discontinued operations, net of tax (548) (1,466) Non-controlling interest (154) (245) 3,478 38 Earnings per share attributable to the owners of Beyond International Limited Cents Cents Basic and diluted earnings per share from continuing operations 7 6.56 3.69 Basic and diluted earnings per share 7 5.67 1.30 Loss per share from discontinued operations (0.89) (2.40) The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. FINANCIAL STATEMENTS 2022 CONSOLIDATED ENTITY NOTES 2022 2021 $000’S $000'S ASSETS RESTATED* CURRENT ASSETS Cash and cash equivalents 9 8,682 6,442 Trade and other receivables 10 31,061 29,303 Current tax receivables 239 511 Inventories 11 336 410 Other current assets 12 20,473 20,381 60,791 57,047 Assets of disposal group classified as held for sale 28 - 1,679 TOTAL CURRENT ASSETS 60,791 58,726 NON-CURRENT ASSETS Trade and other receivables 10 6,650 1,975 Property plant and equipment 14 812 697 Right-of-use assets 15 987 1,534 Intangible assets 16 407 664 Deferred tax assets 6(c) 3,150 3,259 Other non-current assets 12 7,569 8,280 TOTAL NON-CURRENT ASSETS 19,575 16,410 TOTAL ASSETS 80,366 75,137 LIABILITIES CURRENT LIABILITIES Trade and other payables 17 6,844 7,670 Employee benefits 18 3,966 3,790 Current tax liabilities 6(d) 385 404 Other financial liabilities 19 1,397 255 Lease liabilities 21 1,014 1,010 Other current liabilities 20 30,922 30,547 Borrowings 22 8,676 6,966 53,204 50,642 Liabilities directly associated with assets classified as held for sale 28 - 1,178 TOTAL CURRENT LIABILITIES 53,204 51,821 NON-CURRENT LIABILITIES Deferred tax liabilities 6(c) 1,604 1,234 Employee benefits 18 175 158 Lease liabilities 21 131 772 Other non-current liabilities 20 689 67 TOTAL NON-CURRENT LIABILITIES 2,599 2,231 TOTAL LIABILITIES 55,803 54,050 NET ASSETS 24,563 21,086 * refer note 3 for details regarding comparative financial information being reclassed. The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022 FINANCIAL STATEMENTS BEYOND INTERNATIONAL ANNUAL REPORT 2022 39 38 CONSOLIDATED ENTITY NOTES 2022 2021 $000’S $000'S CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of GST) 93,582 107,816 Payments to suppliers and employees (inclusive of GST) (91,281) (106,284) Receipts from government grants - 2,158 Interest received 5(a) 1 23 Finance costs paid (752) (435) Income tax paid (net of refunds) (318) (571) Net cash (used in)/provided by operating activities 8(a) 1,231 2,708 CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment 14 (440) (309) Investment in websites and databases 16 (54) (103) Proceeds from disposal of property, plant and equipment (19) - Payments for investments and joint venture 304 (462) Payments for purchase of business, net of cash acquired - 2,455 Investments in development projects (800) (1,032) Net cash flows provided by/(used in) in investing activities (1,008) 549 CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 11,826 2,913 Repayments of borrowings (6,325) (8,748) Lease principal repayments (1,029) (1,663) Net cash flows provided by/(used in) financing activities 4,472 (7,498) Net increase/(decrease) in cash held 4,695 (4,241) Cash and cash equivalents at the beginning of the financial period 3,942 8,183 Cash and cash equivalents at the end of the financial period 8,637 3,942 Reclassification of bank overdraft 45 2,694 Cash and cash equivalents classified as held for sale 28 - (194) 9 8,682 6,442 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2022 FINANCIAL STATEMENTS 2022 ISSUED CAPITAL RESERVES ACCUMULATED LOSSES TOTAL NON- CONTROLLING INTERESTS TOTAL EQUITY CONSOLIDATED ENTITY $000'S $000’S $000'S $000'S $000'S $000'S Balance at 01 July 2021 34,018 (1,153) (12,194) 20,670 415 21,085 Profit for the year - - 3,479 3,479 (154) 3,325 Other comprehensive income for the year, net of tax - 153 - 153 - 153 Total comprehensive income for the year - 153 3,479 3,632 (154) 3,478 Transactions with owners in their capacity as owners: Minority interest losses transferred on cessation of operations - - (257) (257) 257 - Balance at 30 June 2022 34,018 (1,000) (8,972) 24,045 518 24,563 Balance at 01 July 2020 34,018 (623) (12,647) 20,748 300 21,048 Profit for the year - - 800 800 (245) 555 Other comprehensive income/(loss) for the year, net of tax - (517) - (517) - (517) Other movements in reserves - (13) 13 - - - Total comprehensive income/(loss) for the year - (530) 813 283 (245) 38 Transactions with owners in their capacity as owners: Minority interest losses transferred on cessation of operations - - (360) (360) 360 - Balance at 30 June 2021 34,018 (1,153) (12,194) 20,670 415 21,086 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2022 CONSOLIDATED ENTITY NOTES 2022 2021 $000’S $000'S EQUITY RESTATED* CURRENT EQUITY Issued capital 23 34,018 34,018 Reserves 24 (1,000) (1,153) Accumulated losses (8,972) (12,194) Non-controlling interests 25 518 415 TOTAL EQUITY 24,563 21,086 * refer note 3 for details regarding comparative financial information being reclassed. The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2022 (continued) BEYOND INTERNATIONAL ANNUAL REPORT 2022 41 40 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2022 1. REPORTING ENTITY Beyond International Limited is a company limited by shares, incorporated and domiciled in Australia and whose shares are publicly traded on the Australian Securities Exchange. The financial report covers the consolidated entity of Beyond International Limited and its controlled entities (the Consolidated Entity and/ or the Group) as at and for the year ended 30 June 2022. The financial report of Beyond International Limited for the year ended 30 June 2022 was authorised for issue in accordance with a resolution of the Board of Directors on 25 August 2022. 2. STATEMENT OF COMPLIANCE The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001, as appropriate for for-profit oriented entities. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards, as issued by the International Accounting Standards Board (IASB). 3. SIGNIFICANT ACCOUNTING POLICIES This section sets out the significant accounting policies upon which the financial statements are prepared as a whole. Specific accounting policies are described in their respective notes to the financial statements. This section also shows information on new accounting standards, amendments and interpretations, and whether they are effective in the current or later years. The accounting policies have been consistently applied to all periods presented in these financial statements, unless otherwise stated. BASIS OF PREPARATION The financial report has been prepared on an accruals basis and is based on historical costs, except where stated. The Consolidated Entity has not adopted a policy of revaluing its non-current assets on a regular basis. Non-current assets are revalued from time to time as considered appropriate by the directors and are not stated at amounts in excess of their recoverable amounts. These financial statements are presented in Australian dollars, which is Beyond International Limited’s functional and presentation currency. ROUNDING The Consolidated Entity is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Report) Instrument 2016/191 and in accordance with that Corporations Instrument, amounts in the directors’ report and the financial statements are rounded off to the nearest thousand, or in certain cases, the nearest dollar. BASIS OF CONSOLIDATION The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Beyond International Limited (‘company’ or ‘parent entity’) as at 30 June 2022 and the results of all subsidiaries for the year then ended. Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity controls an entity when the Consolidated Entity 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 Consolidated Entity. They are de-consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between entities in the Consolidated Entity are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Consolidated Entity. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest, without the loss of control, is accounted for as an equity transaction, where the difference between the consideration transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable to the parent. Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and other comprehensive income, statement of financial position and statement of changes in equity of the Consolidated Entity. Losses incurred by the Consolidated Entity are attributed to non-controlling interest in full, even if that results in a deficit balance until the point at which the operations of the minority interest ceases. Any residual balance is then subsequently reclassified to the retained earnings. Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Consolidated Entity recognises the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in profit or loss. A list of controlled entities is contained in Note 32 to the financial statements. Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity. FOREIGN OPERATIONS Transactions denominated in a foreign currency are converted to Australian currency at the exchange rate at the date of the transaction. Foreign currency receivables and payables at the reporting date are translated at exchange rates at the reporting date. Exchange gains and losses are brought to account in determining the profit or loss for the year. Exchange gains and losses arising on forward foreign exchange contracts entered into as hedges of specific commitments are deferred and included in the determination of the amounts at which the transactions are brought to account. Specific hedging is undertaken in order to avoid or minimise possible adverse financial effects of movements in foreign exchange rates. If the hedging transaction is terminated prior to its maturity date and the hedged transaction is still expected to occur, deferral of any gains and losses which arose prior to termination continues, and those gains and losses are included in the measurement of the hedged transaction. In those circumstances where a hedging transaction is terminated prior to maturity because the hedged transaction is no longer expected to occur, any previous deferred gains or losses are recognised in the Statement of Profit or Loss and Other Comprehensive Income at the date of termination. All exchange gains and losses relating to other hedge transactions are brought to account in the Statement of Financial Position in the same period as the exchange differences on the items covered by the hedge transactions. Costs on such contracts are expensed as incurred. Exchange gains and losses on the other hedge transactions entered into as hedges of general commitments are brought to account in the Statement of Profit or Loss and Other Comprehensive Income in the financial year in which the exchange rate changes. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Assets and liabilities of overseas controlled entities and branches are translated at exchange rates existing at the reporting date and the exchange gain or loss arising on translation is carried directly to a foreign currency translation reserve. GOODS AND SERVICES TAX (“GST”) AND VALUE ADDED TAX (“VAT”) Revenues, expenses and assets are recognised net of the amount of GST, except when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable. Receivables and payables in the Statement of Financial Position are shown inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of Financial Position. Cash flows are presented in the Statement of Cash Flows on a gross basis and the GST component of cash flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority. USE OF JUDGEMENTS AND ESTIMATES The Directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group. Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the consolidated entity based on known information. This consideration extends to the nature of the products and services offered, customers, supply chain, staffing and geographic regions in which the consolidated entity operates. Sections within this financial report whereby estimates and judgments have a material impact are as follows: • Expected credit losses detailed in Note 10. • Net realisable value of inventory detailed in Note 11. • The recoverability of distribution advances detailed in Note 12. • The recoverability of capitalised development costs detailed in Note 12. • The recoverability of capitalised production costs detailed in Note 12. • The recoverability of investments in productions and 3rd party copyrights detailed in Note 12. • The recoverability of deferred tax assets as detailed in Note 6. • The valuation of right-of-use-assets and the lease liability values as detailed in Note 15 and 21. • The valuation of employee benefits in Note 18. • Uncertain tax positions in Note 6. NEW STANDARDS AND INTERPRETATIONS The Consolidated Entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period. Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted. The following Accounting Standards and Interpretations are most relevant to the Consolidated Entity: • References to Conceptual Framework (Amendments to AASB 3). • Disclosure of Accounting Policies (Amendments to AASB 101 and AASB Practice Statement 2). • Definition of Accounting Estimates (Amendments to AASB 108). • Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to AASB 112). GOING CONCERN The financial report has been prepared on the going concern basis, which contemplates continuity of normal business activities and the realisation of assets and the discharge of liabilities in the normal course of business. The Directors believe that there are reasonable grounds to conclude that the Group will continue as a going concern, after consideration of the following factors: • As at 30 June 2022, the Group reported net current assets of $7,587,000 (2021: $6,906,000) and cash and cash equivalents of $8,682,000 (2021: $6,442,000); • Management have prepared forecasts for the year ending 30 June 2023 which indicate that the Group can continue to pay its debts as and when they become due and payable for at least the twelve months from the date of authorisation of this report; Accordingly, the directors believe the Group will be able to continue as a going concern and that it is appropriate to adopt the going concern basis of preparation of the consolidated financial report. RECLASSIFICATION OF COMPARATIVES Comparative figures have been adjusted to conform to changes in presentation for the current financial year. NOTES TO THE FINANCIAL STATEMENTS 2022 BEYOND INTERNATIONAL ANNUAL REPORT 2022 43 42 NOTES TO THE FINANCIAL STATEMENTS 2022 4. OPERATING SEGMENTS Management, as the chief operating decision maker, has determined the operating segments based on the reports reviewed by the Board that are used to make strategic decisions. The Board considers the business on a global basis in the following four operating divisions: 1. TV PRODUCTION AND COPYRIGHT Production of television programming and ownership of television product copyright. 2. FILM AND TELEVISION DISTRIBUTION International distribution of television programmes and feature films. 3. HOME ENTERTAINMENT Distribution in Australia and New Zealand of DVDs. 4. DIGITAL MARKETING Online search optimisation, website creation, development and performance and online media sales in Australia and New Zealand. This segment has been discontinued (Note 28). CORPORATE BENEFIT/(EXPENSE) Includes the parent entity, centralised administrative support services to the group comprising legal and business affairs, finance and human resources, in addition to internet development. None of these activities constitute a separately reportable business segment. GEOGRAPHICAL SEGMENTS Although the Consolidated Entity’s divisions are managed on a global basis they operate in four main geographical areas: AUSTRALIA The home country of the parent entity. The areas of operation include all core business segments. NORTH AMERICA A portion of the group’s production, film and television sales are generated from North America, with production offices in Los Angeles. EUROPE Substantial film and television distribution proceeds are derived from European markets. The group’s head office for multinational activities is located in Dublin. This office is responsible for production and development, and for the acquisition and international sales of all television programmes and feature films. The Dublin office manages the direct sales and marketing activities of the office located in London, which represents the second overseas sales office base. REST OF WORLD The Rest of World comprises all other territories from which film and television distribution income is derived including the Middle East, Asia, and Latin America. REPORTED 2021 MOVEMENT RECLASSIFIED 2021 BALANCE SHEET (EXTRACT) $000'S $000’S $000'S Trade and other receivables 30,545 (1,241) 29,303 Trade and other payables 8,911 (1,241) 7,670 This reclassification had no impact on the reported results or the financial performance of the Group. OPERATING SEGMENT TV PRODUCTION & COPYRIGHT FILM & TELEVISION DISTRIBUTION HOME ENTERTAINMENT DIGITAL MARKETING* OTHER & INTER SEGMENT ELIMINATIONS CONSOLIDATION 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S REVENUE External revenues excluding fx, interest 52,421 70,500 39,788 43,692 32 305 2,746 4,486 - - 94,987 118,982 Other income 412 1,486 - 107 - 83 228 468 267 465 907 2,610 Other segments 10,017 5,226 - - - - - - (10,017) (5,226) - - Total revenue 62,850 77,212 39,788 43,799 32 388 2,974 4,954 (9,750) (4,761) 95,894 121,592 Result before fx, interest and D&A 7,529 8,801 5,543 5,618 35 28 (533) (1,964) (3,696) (3,978) 8,879 8,505 Depreciation, amortisation and write-down of content assets (2,037) (3,368) (307) (1,155) - - (39) (94) (1,343) (1,412) (3,726) (6,029) Gain on bargain purchase - - - - - - - - - - - - Impairment of assets - - - - - - - - - - - - Result before interest, fx & other unallocated expenses 5,492 5,433 5,236 4,463 35 28 (572) (2,058) (5,039) (5,390) 5,153 2,476 Net interest expense (752) (411) Foreign exchange gain /(loss) 132 (1,131) Profit/(loss) before income tax 4,533 934 Income tax (expense)/benefit (1,209) (379) Profit/(loss) after income tax 3,325 555 Non-controlling interest portion of the profit/(loss) 154 245 Profit/(loss) for the year 3,479 800 *This segment has been discontinued (Note 27) CORRECTION OF ERROR IN CALCULATING PROVISION During the preparation of the financial statements for the current year, a reclassification between categories of current assets and current liabilities were performed in order to correct an error in elimination of intercompany balances. The details of reclassification have been noted in the table below. 4. OPERATING SEGMENTS (continued) 3. SIGNIFICANT ACCOUNTING POLICIES (continued) BEYOND INTERNATIONAL ANNUAL REPORT 2022 45 44 4. OPERATING SEGMENTS (continued) NOTES TO THE FINANCIAL STATEMENTS 2022 GEOGRAPHICAL INFORMATION SEGMENT REVENUES FROM EXTERNAL CUSTOMERS CARRYING AMOUNT OF SEGMENT ASSETS ACQUISITION OF NON CURRENT SEGMENT ASSETS 2022 2021 2022 2021 2022 2021 $000'S $000'S $000'S $000'S $000'S $000'S Australia 18,068 18,159 42,201 41,332 440 302 North America 50,714 64,268 7,847 2,910 - 3 Europe 18,211 27,695 29,118 31,661 3 0 Rest of World 7,994 8,860 1,200 476 13 4 94,987 118,982 80,366 76,379 456 309 OPERATING SEGMENT TV PRODUCTION & COPYRIGHT FILM & TELEVISION DISTRIBUTION HOME ENTERTAINMENT DIGITAL MARKETING OTHER & INTER SEGMENT ELIMINATIONS CONSOLIDATION 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S ASSETS Segment assets 50,265 38,436 33,205 34,061 601 451 - 1,198 (43,261) (37,832) 40,810 36,314 Deferred tax assets & other non-current assets 3,150 3,259 Corporate assets 36,406 36,806 Total assets 80,366 76,379 LIABILITIES Segment liabilities 28,595 20,190 21,559 23,866 977 993 - 1,178 (10,212) (1,571) 40,920 44,656 Deferred tax liabilities 1,604 1,234 Corporate liabilities 13,279 9,403 Total liabilities 55,803 55,293 Other Capital expenditure 334 226 - - - 2 - - 122 81 456 309 Other non cash expenses 763 1,728 417 680 - 116 - - 49 (653) 1,229 1,871 Impairment of assets - - - - - - - - - - - - Notes to and forming part of the segment information (a) Accounting policies Segment revenues, expenses, assets and liabilities are those that are directly attributable to a segment and the relevant portion that can be allocated to the segment on a reasonable basis. Segment assets include all assets used by a segment and consist primarily of operating cash, receivables, inventories, capitalised production and development costs, investments, distribution advances, inventories, property, plant and equipment and goodwill and other intangible assets, net of any related provisions. While most of these assets can be directly attributable to individual segments, the carrying amounts of certain assets used jointly by segments are allocated based on reasonable estimates of usage. Segment liabilities consist primarily of trade and other creditors, producers share payable, bills of exchange and employee entitlements. (b) Other segments Segment revenues, expenses and results include transfers between segments. Such transfers are priced on an “arm’s length” basis and are eliminated on consolidation. (c) Major customers Included in each segment revenue total is revenue from customers in excess of 10% of total segment revenue. Total revenues relating to these customers are $51m (2021: $64m) within the TV Production & Copyright. There were no major customers exceeding 10% of total segment revenue for Film & Television distribution segments (2021: $0.3m), Home Entertainment segment and the Digital Marketing segment (2021: $1.3m). Love It or List It UK John Farnham – Finding the Voice BEYOND INTERNATIONAL ANNUAL REPORT 2022 47 46 5. REVENUES AND EXPENSES 5. REVENUES AND EXPENSES (continued) CONSOLIDATED ENTITY 2022 2021 $000'S $000'S (a) Revenue and other income from continuing operations Revenue Sales revenue 90,499 113,201 Royalty revenue 1,741 1,296 92,240 114,497 Other income Net realised/unrealised foreign currency translation gains 132 - Management service fees 122 28 External interest 1 23 Gain on the sale of property, plant and equipment 2 2 Other Items 560 2,112 Total revenue and other income 93,057 116,662 Recognition and measurement Revenue from operating activities represents revenue earned from TV Productions & Copyright sales, Film & Television distribution, Home Entertainment sales, digital marketing sales and royalty revenue. Revenue is recognised when the Group transfers control over a good or a service to a customer either at a point in time or over time. The following specific recognition criteria must also be met before revenue is recognised: Revenue for TV Production and Copyright services are recognised over time as the production services are provided to the customer. Each customer contract for TV Production and Copyright services are unique to the customer and it has been determined that there is no alternative use of the production services to the Group. Under the TV Production and Copyright contracts with customers, the Group have an enforceable right to payment for the work completed to date. The input method for determining the amount of revenue to be recognised is assessed based on the costs incurred, which depicts the Group’s transferring of the control of the production to the customer. Revenue for Film & Television Distribution services are recognised at a point in time when the Broadcaster is able to exploit the distribution rights and when the IP rights have been delivered. Both internal and external title IP rights are delivered to the customer by episode. Royalty revenue is recognised at a point in time, being once the revenue can be accurately estimated. Revenue for Home Entertainment is recognised at the point in time when the goods have been accepted as delivered to the customer. For the consignment arrangements, revenue is recognised when the goods have been sold by the retailer to the end-customer. Revenue for Digital Marketing services are recognised over time as the services are provided to the customer. The stage of completion for determining the amount of revenue to recognise is assessed based on either the costs incurred or the time elapsed, depending on which method best depicts the Group’s transferring of the control to the customer. Where amounts are invoiced before revenue is earned, a deferred revenue liability is brought to account. These contract liabilities reflect the consideration received in respect of unsatisfied performance obligations. Other income includes jobkeeper government grant of $Nil (2021: $1,679,000). There are no unfulfilled conditions or other contingencies attached to these grants. Digital Marketing received $Nil (2021: $468,000) in jobkeeper government grants which are included in discontinued operations. NOTES TO THE FINANCIAL STATEMENTS 2022 Disaggregation of revenue from contracts with customers The group derives revenue from the transfer of goods and services over time and at a point in time in the following major product lines and geographical regions: TV PRODUCTION & COPYRIGHT FILM & TELEVISION DISTRIBUTION HOME ENTERTAINMENT DIGITAL MARKETING OTHER & INTER SEGMENT ELIMINATIONS CONSOLIDATION 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 GEOGRAPHICAL REGIONS $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S $000'S Australia 12,967 12,337 5,520 5,190 31 305 - - (2,238) - 16,280 17,832 North America 38,516 52,290 12,198 11,978 - - - - - - 50,714 64,268 Europe 3,176 5,873 15,035 21,822 - - - - - - 18,211 27,695 Rest of World - - 7,035 4,702 - - - - - - 7,035 4,702 54,659 70,500 39,788 43,692 31 305 - - (2,238) - 92,240 114,497 Timing of Revenue Recognition Goods transferred at a point in time - - 39,788 43,692 31 305 - - - - 39,819 43,997 Services transferred over time 54,659 70,500 - - - - - - (2,238) - 52,421 70,500 54,659 70,500 39,788 43,692 31 305 - - (2,238) - 92,240 114,497 Alien Time Capsule BEYOND INTERNATIONAL ANNUAL REPORT 2022 49 48 NOTES TO THE FINANCIAL STATEMENTS 2022 6. INCOME TAX EXPENSE CONSOLIDATED ENTITY 2022 2021 $000'S $000'S (a) The components of tax expense comprise: Current income tax (512) (742) Deferred income tax (479) 675 Withholding tax 120 114 Adjustments in respect of current income tax of previous years 564 155 Tax losses not brought to account 1,482 161 Other 32 16 Income tax expense reported in the Statement of Profit or Loss and Other Comprehensive Income 1,207 379 Continuing and discontinuing operations: (1,207) (981) Income tax expense/(benefit) from continuing operations - 602 Income tax benefit from discontinuing operations (1,207) (379) (b) The prima facie tax on profit before income tax is reconciled to the income tax expense as follows: Profit before income tax 5,080 3,001 Loss before income tax from discontinued operations (548) (2,068) Profit/(loss) before income tax 4,532 933 Prima facie tax payable on loss from ordinary activities before income tax at 30% (2021: 30%) 1,360 280 Tax effect of : - Other non-assessable/deductible items (710) (929) 650 (649) Tax effect of : - Adjustments in respect of current income tax of previous years 564 155 - Tax losses not brought to account 1,482 161 - Effect of lower tax rate on overseas income (1,441) 619 - Other (199) (38) Add: Withholding tax expense 120 114 Add: US State tax 32 16 Income tax expense 1,207 378 CONSOLIDATED ENTITY 2022 2021 $000'S $000'S (b) Profit / (loss) from continuing operations before tax includes the following: Bad and doubtful debts - Trade receivables written off during the period 2 148 - Trade receivables movement in provision (Note 10) 10 10 12 158 Rental expense on operating leases - Expenses relating to short-term leases - - - Variable payments not included in the measurement of lease liabilities 199 240 - Expenses relating to leases of low-value assets, excluding short term leases of low-value assets 47 52 246 291 Finance costs - Interest expense on borrowings 633 253 - Interest expense on lease liabilities 119 171 752 425 Loss on disposal of asset - - Depreciation, amortisation and write-down of content assets - Property, plant and equipment assets (Note 14) 336 422 - Right-of-use assets (Note 15) 920 1,370 - Distribution advances (Note 12) 264 1,151 - Capitalised production costs (Note 12) 1,108 787 - Intangible assets (Note 16) 311 485 - Investment in productions (Note 12) 461 877 - Capitalised development costs (Note 12) 285 843 3,687 5,935 Total Depreciation, amortisation, impairment expense and write-down of content assets expense 3,687 5,935 Foreign exchange loss Other realised/unrealised foreign currency translation losses - 1,131 - 1,131 Superannuation guarantee expense 776 678 (c) Auditors' Remuneration $ $ Remuneration of the auditor and their related network firms of the parent entity and its controlled entities for: - Audit or review of the financial report * 387,805 363,925 - Other assurance services 9,500 - - Tax compliance services 83,318 75,258 CONSOLIDATED ENTITY 2022 2021 $000'S $000'S (c) Auditors' Remuneration (continued) $ $ Remuneration of network firms for: - Tax compliance services 36,527 13,890 Remuneration of other auditors of subsidiaries for: - Audit or review of the financial report 92,068 40,750 - Other assurance services 38,931 51,313 - Tax compliance services 14,678 12,646 *The BDO entity performing the audit of the Group transitioned from BDO East Coast Partnership to BDO Audit Pty Ltd on 4 August 2020. The 2021 disclosures include amounts received by BDO East Coast Partnership, BDO Audit Pty Ltd and their respective related entities. 5. REVENUES AND EXPENSES (continued) 5. REVENUES AND EXPENSES (continued) BEYOND INTERNATIONAL ANNUAL REPORT 2022 51 50 Recognition and measurement (continued) Deferred tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses. Deferred tax assets and liabilities are ascertained based on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred tax assets also arise where amounts have been fully expensed but future deductions are available. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at the reporting date. Their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to offset current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Tax Consolidation Beyond International Limited and its wholly owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidated regime. Each entity in the group recognises its own current and deferred tax assets, except for any deferred tax assets resulting from unused tax losses and tax credits, which are immediately assumed by the head entity, being Beyond International Limited. The current tax liability for each group entity is then subsequently assumed by the parent entity. The tax consolidated group has entered into a tax funding arrangement whereby each company in the group contributes to the income tax payable by the group in proportion to their contribution to the group’s taxable income. Pursuant to the funding arrangement, transfers of tax losses or tax liabilities are assumed by the head entity through intercompany loans. Uncertain Tax position The Group has applied Interpretation AASB 23 Uncertainty over income tax treatment. Interpretation 23 sets out how to determine the accounting tax position when there is uncertainty over income tax treatments. The Interpretation requires an entity to: • Determine whether uncertain tax positions are assessed separately or as a group, and • Assess whether it is probable that a tax authority will accept an uncertain tax treatment used, or proposed to be used, by an entity in its income tax filings. – If yes, the Group should determine its accounting tax position consistently with the tax treatment used or planned to be used in its income tax filings. – If no, the Group should reflect the effect of uncertainty in determining its accounting tax position using either the most likely amount or the expected value method. Management regularly review the transactions with other Beyond related entities and engage tax specialists where required to assess the appropriate tax treatment. Whilst some judgement is required, management are not currently aware of any uncertain tax treatment that would result in a material liability at the reporting date. Additionally, the Group believes that its accruals for tax liabilities are adequate for all open tax years based on its assessment of interpretations of tax law and prior experience. NOTES TO THE FINANCIAL STATEMENTS 2022 6. INCOME TAX EXPENSE (continued) CONSOLIDATED ENTITY 2022 2021 $000'S $000'S (c) Deferred Tax Deferred tax liabilities Distribution guarantees and unrecouped program expenses (1,745) (2,171) Capitalised production costs and other expenses (2,155) (2,740) Offset deferred tax liabilities against deferred tax assets 2,296 3,677 (1,604) (1,234) Deferred tax assets Provisions and accruals 2,388 2,922 Tax losses 3,058 4,014 Offset deferred tax liabilities against deferred tax assets (2,296) (3,677) 3,150 3,259 Net deferred tax assets/(liabilities) 1,546 2,025 Movements: Opening balance 2,025 2,282 Additions from business combinations (note 27) - (63) Assets held for sale (note 28) - 481 Credited to profit or loss (479) (675) Closing Balance 1,546 2,025 (d) Liabilities Current Income tax (385) (404) The above is a current provision for income tax payable by the parent and subsidiaries of the Consolidated Entity. Recognition and measurement In accordance with the details below, deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to offset current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. The Group has recognised tax losses as shown above only to the extent that recoupment is considered probable at the reporting date or where these losses offset deferred tax liabilities. The Australian tax group has unrecognised tax losses available totalling $31,249,482 (2021: $27,099,947). The benefits of these unrecognised tax losses will only be realised if certain conditions are met, including: • The group derives future assessable income of a nature and amount sufficient to enable the benefits from the deductions for the losses to be realised; • The group continues to comply with the conditions for deductibility imposed by the law; • The losses are available under the continuity of ownership or same business tests; • No changes in tax legislation adversely affect the company in realising the benefit from the deductions for the losses. Movement in deferred tax assets and deferred tax liabilities has gone through the Statement of Profit or Loss and Other Comprehensive Income. The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable. Current income tax expense charged to the profit or loss is the tax payable on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at the reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (or recovered from) the relevant tax authority. 6. INCOME TAX EXPENSE (continued) BEYOND INTERNATIONAL ANNUAL REPORT 2022 53 52 NOTES TO THE FINANCIAL STATEMENTS 2022 CONSOLIDATED ENTITY 2022 2021 $000'S $000'S (Increase)/decrease in trade and other receivables (3,774) 546 Decrease in inventory 75 280 (Increase) in other assets (963) (4,693) Decrease/(increase) in net deferred tax assets and liabilities 889 (192) (Decrease)/increase in trade and other creditors (2,971) 474 Increase/(decrease) in other liabilities 1,872 (1,276) (Decrease)/increase in provisions (385) 492 Cash flow from operations 1,231 2,708 (b) Financing facilities available At reporting date, the following financing facilities had been negotiated and were available Secured multi option facility Used at reporting date * 942 3,589 Unused at reporting date 2,954 522 Total facility 3,896 4,111 *The amount of the facility used at reporting date is for bank guarantees on various building leases held by the Group The multi option facility may be drawn at any time and may be terminated by the bank on demand. The interest rate on the facility is the commercial base rate of 6.81% at 30 June 2022 (5.56% at 30 June 2021). Bank Bill Business Loan facility (formerly Bill acceptance/discount facility) Used at reporting date * 8,533 4,000 Unused at reporting date 1,400 - Total facility 9,933 4,000 * The amount of the facility used at reporting date is for funding production offsets The bank bill business loan facility (formerly bill acceptance/discount facility) may be drawn at any time and may be terminated by the bank on demand. The interest rate on the facility is the discount base rate of 4.19% at 30 June 2022 (1.96% at 30 June 2021). The facilities are secured by certain covenants on the Consolidated Entity that these financial conditions are met - a) Gross debt less cash and cash equivalents divided by EBITDA cannot exceed 2 times. b) Interest Cover Ratio is to be greater than or equal to 5x Comerica Revolving Loan Facility Used at reporting date * 1,397 - Unused at reporting date 13,106 - Total facility 14,503 - The revolving loan facility (USD$10m) may be drawn at any time and may be terminated by the bank on demand. The interest rate on the facility is elected by Beyond, at a per annum rate equal to: (A) 3% (the “LIBOR Margin”) plus the greater of (1) the LIBO Rate (or applicable successor rate reasonably acceptable to Comerica) for interest periods one month, two months or three months and (2) one-half of one percent, or (B) 2.5% plus the Base Rate. Interest will be payable monthly in arrears. * The amount of the facility used at reporting date is for funding Netflix pre-sales and production offsets CONSOLIDATED ENTITY 2022 2021 $000'S $000'S (a) Reconciliation of cash flows from operations with net profit after income tax Profit/(loss) after income tax 3,325 555 Adjustment for non-cash flow in loss: Depreciation, amortisation, impairment and write-down of content assets expense 3,687 6,029 Net (loss)/gain on sale of property, plant and equipment - (2) Unrealised foreign exchange loss/(gain) (545) 482 Make good provision (3) 14 Discontinued operation 24 - CONSOLIDATED ENTITY 2022 2021 CENTS PER SHARE CENTS PER SHARE Basic and diluted earnings/(losses) per share from continuing operations 6.56 3.69 Basic and diluted earnings/(losses) per share 5.67 1.30 Loss per share from discontinued operations (0.89) (2.39) The following reflects the income and share data used in the basic and diluted earnings per share computations. CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Net profit/(loss) attributable to ordinary equity holders (used in calculating basic earning and diluted per share) from continuing operations 4,027 2,266 Net loss attributable to ordinary equity holders (used in calculating basic earning and diluted per share) from discontinued operation (548) (1,466) Net profit/(loss) attributable to ordinary equity holders (used in calculating basic earning and diluted per share) 3,479 800 Number Number Weighted average number of ordinary shares in calculating basic earnings and diluted per share 61,336,968 61,336,968 Recognition and measurement Basic earnings per share is calculated as net profit attributable to members of the parent, adjusted to exclude any costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element. Diluted earnings per share is calculated as net profit attributable to members of the parent, adjusted for: • costs of servicing equity (other than dividends) and preference share dividends; • the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and • other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element. 7. EARNINGS PER SHARE 8. CASH FLOW INFORMATION (continued) 8. CASH FLOW INFORMATION BEYOND INTERNATIONAL ANNUAL REPORT 2022 55 54 NOTES TO THE FINANCIAL STATEMENTS 2022 CONSOLIDATED ENTITY 2022 2021 $000'S $000’S Ageing of debtors Gross Provision Gross Provision Not past due 30,110 - 26,990 - Past due 0-90 days 5,129 - 2,330 - Past due 91-180 days - - 224 - Past due 180+ days 2,176 (229) 1,434 (219) 37,415 (229) 30,978 (219) CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Reconciliation of provision for expected credit loss Opening balance (219) (209) Additional provision recognised (1,047) (1,069) Re-classified to non-current assets held for sale (note 28) - 1,031 Utilised 1,037 28 Closing balance (229) (219) Recognition and measurement Trade receivables are recognised and carried at original invoice amount less an allowance for any uncollectable amounts or expected credit losses. The following specific recognition criteria must also be met before a receivable is recognised: Production debtors - receivables are recognised as they are due for settlement, within a term of no more than 30 days. Licensing debtors - receivable is recognised once a licence agreement is signed by both parties and the programme is able to be delivered. Payment terms are usually based upon signature, delivery and acceptance. In certain contracts instalment payments may extend over the term of the licence agreement. The group applies the AASB 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. Bad debts are written off when they are identified. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The expected loss rates are based on the payment profiles of sales over a period of 36 month before the beginning of the reporting period and the corresponding historical credit losses experienced within this period. The historical loss rates are adjusted to reflect current and forward looking information on macroeconomic factors affecting the ability of the customers to settle the receivables. The group has identified the GDP annual growth rate and the unemployment rate of the regions in which it sells its goods and services to be the most relevant factors, and accordingly adjusts the historical loss rates based on expected changes in these factors. The consolidated entity has increased its monitoring of debt recovery as there is an increased probability of customers delaying payment or being unable to pay, due to the Coronavirus (COVID-19) pandemic. As a result, the amount of expected credit losses has increased since the previous corresponding period. A default event is defined when a debtor becomes past due. On becoming past due 0-30 days, a reminder email is sent and followed up with a phone call. If the default moves into the next bracket of 31-60 days past due, the sales executive makes contact with the customer. If the default moves into the 61-90 days, a final email is sent and the details are passed onto the lawyers. Once it moves into the 91+ bracket, the account is placed on hold and management will discuss if the amount should be written-off. CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Cash on hand 22 9 Cash at bank 8,660 6,433 8,682 6,442 CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Current Trade receivables 30,766 29,003 Other receivables 524 520 Provision for expected credit losses (229) (219) 31,061 29,303 Non-current Trade receivables 6,650 1,975 6,650 1,975 8. CASH FLOW INFORMATION (continued) 10. TRADE AND OTHER RECEIVABLES 10. TRADE AND OTHER RECEIVABLES (continued) 9. CASH AND CASH EQUIVALENTS CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Secured credit card facilities Used at reporting date 107 102 Unused at reporting date 93 98 Total facility 200 200 Secured equipment loan facility Unused at reporting date 500 500 Total facility 500 500 The interest rate on the facility is determined on usage as at the time. As no facility is being used no rate is applicable. Amount of Assets Pledged as Security Fixed and floating charge over assets 80,366 75,137 Total assets pledged as security 80,366 75,137 Recognition and measurement Cash and short-term deposits in the Statement of Financial Position comprise cash at bank and in hand and short term deposits with an original maturity of three months or less. Cash and Cash equivalents has an element of restricted cash totalling $63,000 (2021: $67,000). For the purposes of the Statement of Cash Flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts. BEYOND INTERNATIONAL ANNUAL REPORT 2022 57 56 NOTES TO THE FINANCIAL STATEMENTS 2022 CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Current DVD Stock – finished goods at net realisable value 327 398 Stock footage – at cost 9 12 336 410 Recognition and measurement Inventories are measured at the lower of cost and net realisable value. Inventories represent stock TV footage and DVD stock at cost. As the footage is used, it will be included within the production cost of the programme. Costs of purchasing inventory are determined after deducting rebates and discounts. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs to make the sale. Inventories sold on consignment remain in the financial statements as stock on hand until sold to the end customer. Costs are assigned to an individual item of inventory on the basis of weighed average costs. During the year, the Group did not recognise any impairment charge to inventory. CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Current Capitalised development costs 4,807 4,080 Less: deferred revenue (1,766) (1,553) 3,041 2,527 Distribution advances 14,422 14,569 Capitalised production costs 1,916 2,845 Prepayments 1,094 440 3,010 3,285 20,473 20,381 Non-current Capitalised production costs 4,385 4,329 Investment in productions and 3rd party copyright 3,184 3,951 7,569 8,280 11. INVENTORIES 12. OTHER ASSETS (continued) 12. OTHER ASSETS Recognition and measurement Capitalised development costs Costs of developing new programme concepts, which the Directors believe are probable of being recovered from future revenues, are capitalised. Capitalised costs are costed into the production or are written off in the event that the programme does not proceed. These costs are classified as current assets as the costs of developing new programmes are expected to be realised within one year. The 2022 accounts includes an amount of $285,000 (2021: $843,000) that was expensed during the year . Capitalised production costs Television production costs are capitalised and written down to their net realisable value on a title-by-title basis. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs to make the sale. Forecast sales revenues are reviewed regularly and the write-off of the asset is recognised as a write-down of content assets as disclosed in note 5(b). Where doubt exists as to the ability to recover the expenditure from future sales, the amounts in doubt is provided for in the year in which the assessment is made. The 2022 accounts includes an amount of $1,108,000 (2021: $787,000) that was expensed during the year. The estimates relating to future licencing revenues of each production are re-assessed each financial year and amounts that are not expected to be recouped within 12 months have been reclassified as non-current. Capitalised production costs are disclosed in the accounts net of any cash progress payments received on projects. Where such progress payments exceed these costs the net amounts are disclosed as deferred revenue. Distribution advances Distribution advances for television and feature film distribution rights, are capitalised at cost as paid. Distribution advances are written down to their net realisable values on a title-by-title basis. Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and estimated costs to make the sale. Distribution advances for various titles were written down to their net realisable value resulting in a write-down for the year of $264,000 (2021: $1,151,000). Prepayments Amounts paid in advance are recorded at cost and are subsequently expensed based on the actual month of expenditure. Investment in productions and 3rd party copyright The Group has invested in the rights to receive future revenue streams from 3rd party produced programs, and will be recouped from future sales. Investment in productions for various titles were written down to their net realisable value resulting in a write-down for the year of $461,000 (2021: $877,000). BEYOND INTERNATIONAL ANNUAL REPORT 2022 59 58 CONSOLIDATED ENTITY PLANT & EQUIPMENT TOTAL $000'S $000'S Year ended 30 June 2022 Balance at 01 July 2021 697 697 Additions 456 456 Disposal (5) (5) Depreciation charge for the year (336) (336) Carrying amount at 30 June 2022 812 812 As at 01 July 2021 Cost 11,779 11,779 Accumulated depreciation and impairment (11,082) (11,082) Net carrying amount 697 697 As at 30 June 2022 Cost 12,122 12,122 Accumulated depreciation and impairment (11,310) (11,310) Net carrying amount 812 812 Year ended 30 June 2021 Balance at 01 July 2020 820 820 Additions 309 309 Additions from business combinations 13 13 Disposal (8) (8) Revaluations (15) (15) Depreciation charge for the year (422) (422) Carrying amount at 30 June 2021 697 697 As at 01 July 2020 Cost 11,539 11,539 Accumulated depreciation and impairment (10,719) (10,719) Net carrying amount 820 820 As at 30 June 2021 Cost 11,779 11,779 Accumulated depreciation and impairment (11,082) (11,082) Net carrying amount 697 697 Recognition and measurement Property, plant and equipment are measured at historical cost less accumulated depreciation and impairment loss. The expected useful lives are 3 to 10 years. The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each financial year end. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the Statement of Profit or Loss and Other Comprehensive Income. Depreciation and Amortisation Depreciation on property, plant and equipment is calculated on a straight line basis to write off the net cost over its expected useful life to the Consolidated Entity. Estimates of the remaining useful lives are made on a regular basis for all assets, with annual reassessment for major items. NOTES TO THE FINANCIAL STATEMENTS 2022 Fair value of financial instruments not measured at fair value on a recurring basis The following financial instruments are not measured at fair value in the statement of financial position. These had the following fair values: CONSOLIDATED ENTITY 2022 2021 CARRYING AMOUNT FAIR VALUE CARRYING AMOUNT FAIR VALUE $000'S $000'S $000'S $000'S NON-CURRENT ASSETS Trade and other receivables 6,650 6,157 1,975 1,829 6,650 6,157 1,975 1,829 NON-CURRENT LIABILITIES Other non-current liabilities 689 638 67 62 689 638 67 62 Recognition and measurement The fair values of the trade and other receivables and other non-current liabilities above are included in the level 2 category and have been determined in accordance with generally accepted pricing models based on a discounted cash flow analysis, with the most significant input being a discount of 8% to determine fair value. Due to their short-term nature, the carrying amounts of cash and cash equivalents, current trade and other receivables, current trade and other payables and borrowings are assumed to approximate their fair value. Available-for-sale Financial Assets Shares held in a listed entity are classified as being available-for-sale. These assets were initially recorded at cost and at each reporting date are revalued to fair value. Gains and losses arising from changes in fair value are recognised directly in the investments revaluation reserve unless there is a prolonged or significant decline, upon which the loss is recognised in the Statement of Profit or Loss and Other Comprehensive Income. The classification of items within this category depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. Derivative Financial Instruments From time to time, the Consolidated Entity enters into forward foreign exchange agreements and foreign currency options on production contracts in order to manage its exposure to foreign exchange rate risks. Exchange contracts are brought to account as explained in note 3. 13. FINANCIAL ASSETS AND LIABILITIES Refer to note 33 for further information on financial instruments. 14. PROPERTY, PLANT AND EQUIPMENT BEYOND INTERNATIONAL ANNUAL REPORT 2022 61 60 NOTES TO THE FINANCIAL STATEMENTS 2022 CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Patents and Licenses – at cost 862 862 Less: Amortisation and impairment (569) (281) 293 581 Websites and Databases - at cost 462 408 Less: Accumulated amortisation and impairment (348) (325) 114 83 Goodwill – at cost 3,470 3,470 Accumulated amortisation and impairment (3,470) (3,470) - - 407 664 Reconciliations Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out below: CONSOLIDATED ENTITY GOODWILL WEBSITES AND DATABASES PATENTS AND LICENSES TOTAL $'000 $'000 $'000 $'000 Balance at 01 July 2020 - 194 - 194 Additions - - 862 862 Amortisation charge - 93 - 93 Impairment charge - (204) (281) (485) Balance at 30 June 2021 - 83 581 664 Additions - 54 - 54 Amortisation charge - (23) (288) (311) Balance at 30 June 2022 - 114 293 407 Recognition and measurement Intangible assets, other than goodwill, have finite useful lives. The current amortisation charges for intangible assets are included under depreciation and amortisation expense per the Statement of Profit or Loss and Other Comprehensive Income. If an impairment indication arises, the recoverable amount is estimated and an impairment loss is recognised to the extent that the recoverable amount is lower than the carrying amount. Goodwill Goodwill acquired and goodwill on consolidation are initially recorded at the amount by which the purchase price for a business or for an ownership interest in a controlled entity exceeds the fair value attributed to its net assets at date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill as an indefinite life asset, is tested annually for impairment and carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. (continued next page) CONSOLIDATED ENTITY PROPERTY EQUIPMENT TOTAL $000'S $000'S $000'S Year ended 30 June 2022 Balance at 01 July 2021 1,511 24 1,534 Modification 228 - 228 Additions 164 - 164 Depreciation charge for the year (911) (10) (920) Exchange adjustment (19) - (19) Carrying amount at 30 June 2022 972 14 987 As at 01 July 2021 Cost 4,840 50 4,890 Accumulated depreciation (3,329) (26) (3,356) Net carrying amount 1,511 24 1,534 As at 30 June 2022 Cost 4,967 50 5,017 Accumulated depreciation (3,994) (36) (4,030) Net carrying amount 972 14 987 Recognition and measurement The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability (resulting in lease modifications). 15. RIGHT-OF-USE ASSETS 16. INTANGIBLE ASSETS BEYOND INTERNATIONAL ANNUAL REPORT 2022 63 62 NOTES TO THE FINANCIAL STATEMENTS 2022 CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Current (unsecured) Trade payables 789 449 Other creditors and accruals 6,055 7,221 6,844 7,670 Recognition and measurement These amounts represent liabilities for goods and services provided to the Consolidated Entity prior to the end of the financial year and which are unpaid. These amounts are unsecured and are usually paid within 30 days of recognition. Credit terms on trade payables vary between business units and range from 7 days to 90 days. Contractual maturities of trade and other payables have been disclosed in Note 33. 16. INTANGIBLE ASSETS (continued) 17. TRADE AND OTHER PAYABLES Recognition and measurement (continued) Patents and licenses Patents and licenses are recognised at cost of acquisition. Patents and licenses have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their useful life, which is between 2 and 20 years. Websites and Databases Websites and Databases are recognised at cost. Websites and Databases are amortised over their useful life, which is 3 years, on a straight line basis. CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Current Provision for annual leave and long service leave 3,966 3,790 3,966 3,790 Non-current Provision for long service leave 175 158 175 158 Total employee benefits 4,140 3,948 Annual leave obligations accounted for as current and expected to be settled after 12 months 976 875 976 875 Recognition and measurement Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be settled within 12 months of the reporting date are recognised in current liabilities in respect of employees’ services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled. 18. EMPLOYEE BENEFITS Recognition and measurement (continued) The current provision for employee benefits includes accrued annual leave and long service leave. For long service leave, it covers all unconditional entitlements where employees have completed the required period of service. The entire amount of the annual leave provision is presented as current, since the consolidated entity does not have an unconditional right to defer settlement for any of these obligations. However, based on past experience, the consolidated entity does not expect all employees to take the full amount of accrued leave or require payment within the next 12 months. Other long-term employee benefits The liability for long service leave not expected to be settled within 12 months of the reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer settlement of the liability. The liability is measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows. Defined contribution superannuation expense Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred. 18. EMPLOYEE BENEFITS (continued) CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Current 1,397 255 Total other financial liabilities 1,397 255 In 2019, a 51% owned special purpose entity, Beyond Lonehand Pty Ltd and its 100% owned subsidiary Halifax Retribution Production 1 Pty Ltd, took out a limited recourse facility to fund production on Halifax Retribution. As at 30 June 2022, the facility drawn down was $Nil (2021: $255,000). The facility is secured by the intellectual property created by the production. To the extent that there are insufficient sales of the finished program in territories excluding Australia and New Zealand (Rest of World Sales), Beyond Entertainment Limited (BEL) has provided a guarantee for 50% of the loan advanced and secured against Rest of World Sales. In 2022, a 100% owned special purpose entity, Beyond RLOC, took out a revolving loan facility to fund production of a number of productions. The facility is secured by the Post Digital and Visual Effects and Producer offset receivables as well as pre-sale revenues from streaming services. As at 30 June 2022, the facility drawn down was $1,397,000 in respect of the production of Matt Wright’s Wild Territory which was picked up by Netflix (2021: $Nil). Recognition and measurement Amounts were originally recognised at the fair value of the consideration received. They are subsequently measured at amortised cost using the effective interest method with the liability reduced when amounts are received from the debtor. 19. OTHER FINANCIAL LIABILITIES BEYOND INTERNATIONAL ANNUAL REPORT 2022 65 64 NOTES TO THE FINANCIAL STATEMENTS 2022 CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Current Unsecured liabilities Deferred revenue 8,630 5,619 GST payable 93 96 Producer share payable 22,105 24,736 Other 94 96 30,922 30,547 Non-current Unsecured liabilities Producer share payable 689 67 689 67 Recognition and measurement The Producers Share Payable balance represents liabilities for the amounts due to producers contracted under licensing and distribution sales, which are paid on collection of the revenue receivable. 20. OTHER LIABILITIES CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Current 1,014 1,010 Non-current 131 772 Total lease liabilities 1,145 1,782 LESS THAN 6 MONTHS 6 MONTHS TO 1 YEAR 1 TO 5 YEARS 5+ YEARS TOTAL $000’S $000’S $000’S $000’S $000’S Lease payments 568 494 146 - 1,208 Finance charges (32) (14) (17) - (63) Net present values 2022 536 480 129 - 1,145 Lease payments 538 564 799 - 1,901 Finance charges (55) (38) (26) - (119) Net present values 2021 483 527 772 - 1,782 Recognition and measurement The lease liability is initially measured at the present value of fixed lease payments that are not yet paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Variable lease payments are only included in measuring the lease liability if they depend on a rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Subsequently, 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 the market rate. 21. LEASE LIABILITIES CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Current Secured liabilities Bank overdraft 45 2,694 Loan – St George, Macquarie Bank 8,631 4,272 8,676 6,966 Recognition and measurement Borrowings are initially valued at fair value of the consideration received net of transaction costs. They are subsequently measured at amortised cost using the effective interest method. Borrowing Costs Borrowing costs are recognised as an expense when incurred. Borrowing costs include: • Interest on bank overdraft and short-term and long-term borrowings; and • Finance lease charges. 22. BORROWINGS CONSOLIDATED ENTITY 2022 2021 $000'S $000'S (a) Share Capital 61,336,968 ordinary shares – fully paid (2021: 61,336,968) 34,018 34,018 The company has authorised capital amounting to 100,000,000 ordinary shares of no par value. 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. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. (b) Share Options On 1 May 1998 at an extraordinary general meeting shareholders approved the establishment of the Beyond Employee Share Option Plan. Under the plan any options on issue are cancellable at the Directors discretion upon an option holder ceasing to be an employee. (c) Employee Share Plan On 21 April 2006, a total of 962,500 shares were issued under the employee plan to eligible employees and directors, and the company has entered into limited non-recourse loan agreements with participants to provide the funds necessary to subscribe for those shares. Shares were issued in accordance with the Employee Plan rules (refer note 31). On 7 December 2009 and 11 March 2010, a total of 1,625,000 shares were issued under the employee plan to eligible employees and directors, and the company has entered into limited non-recourse loan agreements with participants to provide the funds necessary to subscribe for those shares. Shares were issued in accordance with the Employee Plan rules (refer note 31). 23. ISSUED CAPITAL BEYOND INTERNATIONAL ANNUAL REPORT 2022 67 66 NOTES TO THE FINANCIAL STATEMENTS 2022 Employee Share Plan Benefit Reserve The employee share plan benefit reserve records items recognised as expenses on valuation of employee share options. Foreign Currency Translation Reserve Exchange differences on translation of the foreign controlled entities are recognised in other comprehensive income and accumulated in a separate reserve within equity. CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Interest in: Accumulated profits 518 415 518 415 24. RESERVES 25. NON-CONTROLLING INTEREST No dividend was paid or declared during the year ended 30 June 2022 (2021: $nil) CONSOLIDATED ENTITY 2022 2021 $000'S $000'S Net franking credits available based on a tax rate of 30% (2021: 30%) 446 446 The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for: (a) franking credits that will arise from the payment of the current tax liability (b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date (c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date (d) franking credits that may be prevented from being distributed in subsequent financial years. 26. DIVIDENDS Beyond D Pty Ltd was a wholly owned subsidiary of the Group, with the principal activity of digital marketing. Following a strategic review carried out during the 2021 financial year, management concluded that the segment no longer fitted into the long term goals of the Group as it was a business segment that no longer complemented the two core strategies of television production and distribution. The associated assets and liabilities were consequently presented as held for sale at fair value in the 2021 financial year (See Note 28) and the disposal group was available for immediate sale within the next 12 months. On 29 November 2021 Beyond International Limited sold its 100% interest in Beyond D Pty Ltd and Beyond D (NZ) Limited which are the only operations presented as discontinued operations in the 2022 financial year results. The post-tax loss on disposal of discontinued operations was determined as follows: 27. DISCONTINUED OPERATIONS 27. DISCONTINUED OPERATIONS (continued) 2022 2021 $000'S $000'S Cash consideration received 50 - Other consideration 196 Total consideration received 246 - Cash disposed of (133) - Net cash inflow on disposal of discontinued operation 112 - Net assets disposed (other than cash): Trade and other receivables (1,579) - Other assets (20) - Property plant and equipment (12) - Right-of-use assets (49) - Deferred tax assets (481) - Trade and other payables 1,052 - Employee benefits 630 - Lease liabilities 61 - (398) Pre-tax loss on disposal of discontinued operation (286) - Loss on disposal of discontinued operation (286) - Result of discontinued operations Revenue 2,746 4,486 Other income 228 468 Expenses other than finance costs (3,234) (7,011) Finance costs (2) 10 Tax (expense)/credit - 602 Loss on selling of discontinued operations after tax (286) - Loss for the year (548) (1,446) Statement of cash flows The statement of cash flows includes the following amounts relating to discontinued operations: Operating activities (18) (989) Financing activities (43) 949 Net cash from discontinued operations (61) (40) BEYOND INTERNATIONAL ANNUAL REPORT 2022 69 68 NOTES TO THE FINANCIAL STATEMENTS 2022 28. ASSETS AND LIABILITIES CLASSIFIED AS HELD FOR SALE Assets and liabilities held for sale The following major classes of assets and liabilities relating to Beyond D operations (See Note 27) were classified as held for sale in the consolidated statement of financial position on 30 June 2021: CONSOLIDATED ENTITY DIGITAL MARKETING $000'S Cash and cash equivalents 194 Trade and other receivables 869 Other assets 43 Property plant and equipment 15 Right-of-use assets 78 Deferred tax assets 481 Assets held for sale 1,679 Trade and other payables (503) Employee benefits (578) Lease liabilities (97) Liabilities held for sale (1,178) (i) Financial performance information 2021 $000'S Revenue 4,486 Other income 468 Digital marketing direct costs 4,032 Administration costs 1,386 Employee benefits expense 1,430 Finance costs 10 Provisions 69 Depreciation, amortisation, impairment and write-down of content assets expense 94 Loss before income tax (2,067) Income tax benefit 602 Loss after income tax for the year (1,466) (ii) Cash flow information Net cash used in operating activities (989) Net cash provided by financing activities 949 Net (decrease)/increase in cash and cash equivalent from discontinued operations (40) Recognition and measurement A discontinued operation is a component of the consolidated entity that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co-ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately on the face of the statement of profit or loss and other comprehensive income. Troppo Massive Engineering Mistakes BEYOND INTERNATIONAL ANNUAL REPORT 2022 71 70 NOTES TO THE FINANCIAL STATEMENTS 2022 CONSOLIDATED ENTITY 2022 2021 $000'S $000'S (i) DISTRIBUTION GUARANTEE COMMITMENTS In the course of the Consolidated Entity’s feature film, television and Home Entertainment businesses, commitments to pay distribution guarantees and advances of minimum proceeds from sales have been made to producers at reporting date but not recognised in the financial statements: Not later than one year Distribution Guarantee 4,146 3,714 Home Entertainment Advances - 128 Later than one year but not later than five years Distribution Guarantee 33 198 4,179 4,040 The above commitments to pay distribution guarantees have been entered into in the normal course of business. 30. COMMITMENTS 31. SHARE BASED PAYMENTS (continued) General Employee Share Loan Plan (continued) The loans were made based on the greater of market value of the shares on allotment date and $0.645 (Dec 09 - 2010 plan), $0.75 (Mar 10 - 2010 plan) & $0.60 (2006 plan). As the loans are non-recourse, the value of the loans are not recognised as an asset, and the corresponding share value is not recorded in equity. The total of the Plan Shares are included in Issued Capital at note 23(a). Notwithstanding any other provision of the Plan, each Participant has a legal and beneficial interest in the Shares issued to him or her and is at all times absolutely entitled to those Plan Shares, except that any dealings with those Shares by the Participant may be restricted in accordance with the plan rules. Plan Shares rank equally with all existing Shares from the date of issue in respect of all rights issues, bonus issues, dividends and other distributions to, or entitlements of, holders of existing Shares where the record date for such corporate actions is after the relevant Plan Shares are issued. On termination, the Participant may elect to pay the loan or transfer all of their Plan Shares back to the Company, subject to requirements of the Corporations Act. If the Participant transfers the shares back to the Company, the Company may: i) transfer the Plan Shares for the issue price to a person nominated by the Company; or ii) procure a broker to sell all or any of the Plan Shares on-market. Share movements in the plan as follows: NUMBER OF SHARES CHANGE IN EQUITY VALUE $000'S Outstanding at the beginning of year 1,525,000 Redemption of shares under the employee share plan - - Exercisable at year end 1,525,000 - The Plan Shares issued as part of the 2010 Plan required that Participants could only deal with the shares on a pro-rata basis for a 3 year period. During this period, the Company accounted for the Plan Shares as if they were options. The grant fair value of the shares was amortised across the vesting period as follows: VESTING PERIOD AMORTISATION $ 11 March 2010 to 30 June 2010 15,587 Financial year ending 30 June 2011 66,718 Financial year ending 30 June 2012 66,718 Financial year ending 30 June 2013 47,602 The grant fair value of the 2010 plan was calculated by using the Black Scholes option pricing model applying the following inputs: Weighted average exercise price $0.75 Weighted average life of the option 3 Underlying share price $0.75 Expected share price volatility (i) 30% Risk free interest rate 5.00% Expected dividend rate 6.00% Weighted average fair value price $0.10 (i) Expected share price volatility has been estimated based on the historical volatility of the Company’s share price. General Employee Share Loan Plan The Board has adopted an employee share plan under which employees and Directors of the Consolidated Entity may subscribe for shares in the Company using funds loaned to them by the Consolidated Entity. The Board has also adopted a share plan on substantially the same terms for consultants of the Consolidated Entity (Consultant Plan). The purpose of the Employee Plan is to: (a) assist in the retention and motivation of employees and Directors of the Consolidated Entity by providing them with a greater opportunity to participate as shareholders in the success of the Consolidated Entity; and (b) create a culture of share ownership amongst the employees of the Consolidated Entity. There have been three issues of shares under the Employee Share plan as follows: – On 21 April 2006, 962,500 shares were issued under the Employee Plan to eligible employees and Directors of Beyond International Limited and its controlled entities. 600,000 of these shares remain redeemable at 30 June 2022. – On 7 December 2009, 300,000 shares were issued under the Employee Plan to eligible employees and Directors of Beyond International Limited and it’s controlled entities. 200,000 of these shares remain redeemable at 30 June 2022. – On 11 March 2010, 1,325,000 shares were issued under the Employee Plan to eligible employees and Directors of Beyond International Limited and it’s controlled entities. 725,000 of these shares remain redeemable at 30 June 2022. In all cases the company entered into limited non-recourse loan agreements to provide participants the funds necessary to subscribe for those shares. Shares were issued in accordance with the Employee Plan rules. 31. SHARE BASED PAYMENTS The consolidated entity has $565,000 contingent assets as at 30 June 2022 (2021: $nil). This is in respect of a pending insurance claim to recover some production budget overages caused by events outside the Group’s control. The consolidated entity has given bank guarantees as at 30 June 2022 of $895,000 (2021: $895,000) to its landlord. 29. CONTINGENT ASSETS AND LIABILITIES BEYOND INTERNATIONAL ANNUAL REPORT 2022 73 72 NAME OF ENTITY COUNTRY OF FORMATION OR INCORPORATION BEYOND INTERNATIONAL LIMITED DIRECT INTEREST IN ORDINARY SHARES 2022 % 2021 % Controlled entities of Beyond Properties Pty Ltd Beyond Pty Ltd Australia 100 100 Beyond International Group Inc USA 100 100 The Two Thousand Unit Trust * Australia 100 100 * The corporate trustee of the trust is Beyond Properties Pty Ltd Controlled entities of Beyond International Group Inc Beyond Productions Inc USA 100 100 Controlled entities of Beyond Entertainment Holdings Ltd Beyond Rights Ltd Ireland 100 100 Beyond Rights Distribution Ltd Ireland 100 100 Beyond Media Rights Ltd Ireland 100 100 Controlled entity of Beyond Rights Distribution Ltd HL Beyond Ltd Ireland 100 100 Wild Weather Pty Ltd Australia 100 100 Controlled entities of Beyond Rights Ltd Beyond Distribution (UK) Limited United Kingdom 100 100 Beyond Rights Ltd United Kingdom 100 100 Beyond TNC Ltd Ireland 51 51 Controlled entities of Beyond Media Rights Ltd Beyond Screen Productions Ltd United Kingdom 100 100 Beyond OZ Pty Ltd Australia 100 100 Beyond RLOC Pty Ltd Australia 100 - Controlled entities of Beyond Screen Productions Ltd Beyond Screen North Ltd United Kingdom 100 100 Controlled entities of Beyond OZ Pty Ltd Days Like these S1 Pty Ltd Australia 100 100 Dark Mountain Productions Pty Ltd Australia 100 100 Finding the Voice Pty Ltd Australia 100 - Animals Aboard Pty Ltd Australia 100 - Controlled entities of Beyond RLOC Pty Ltd Beyond BMC Pty Ltd Australia 100 - Controlled entities of Beyond BMC Pty Ltd Wild Territory Pty Ltd Australia 100 - NOTES TO THE FINANCIAL STATEMENTS 2022 NAME OF ENTITY COUNTRY OF FORMATION OR INCORPORATION BEYOND INTERNATIONAL LIMITED DIRECT INTEREST IN ORDINARY SHARES 2022 % 2021 % (a) Controlled entities consolidated Ultimate parent entity Beyond International Limited Australia Controlled entities of Beyond International Limited: Beyond Films Ltd Australia 100 100 Beyond Television Group Pty Ltd Australia 100 100 Beyond Television Pty Ltd Australia 26 26 Beyond Entertainment Pty Ltd Australia 100 100 Beyond Simpson le Mesurier Pty Ltd Australia 51 51 Liberty & Beyond Pty Ltd Australia 51 51 Beyond Imagination Pty Ltd Australia 51 51 Beyond Miall Kershaw Pty Ltd Australia 51 51 Pacific & Beyond Pty Ltd Australia 51 51 Beyond Screen Productions Pty Ltd Australia 100 100 Beyond Home Entertainment Pty Ltd Australia 100 100 Beyond Entertainment Holdings Ltd Ireland 100 100 Beyond D Pty Ltd Australia - 100 Beyond West Pty Ltd Australia 100 100 Controlled entities of Beyond Entertainment Pty Ltd: Mullion Creek and Beyond (partnership) Australia 51 51 Equus Film Productions Pty Ltd Australia 51 51 BTVUS Pty Ltd Australia 100 100 Clandestine Beyond Pty Ltd Australia 51 51 Blue Rocket Beyond Pty Ltd Australia 51 51 Beyond Lone Hand Pty Ltd Australia 51 51 Beyond Hogg Pty Ltd Australia 51 51 Controlled entities of Liberty & Beyond Pty Ltd: Liberty & Beyond Productions Pty Ltd Australia 100 100 Controlled entities of Beyond Television Group Pty Ltd Beyond Television Pty Ltd Australia 74 74 Controlled entities of Beyond Television Pty Ltd Beyond Properties Pty Ltd Australia 100 100 Beyond Productions Pty Ltd Australia 100 100 Beyond Distribution Pty Ltd Australia 100 100 32. GROUP STRUCTURE 32. GROUP STRUCTURE (continued) BEYOND INTERNATIONAL ANNUAL REPORT 2022 75 74 (i) Capital Risk Management The Consolidated Entity manages its capital to ensure that entities in the group will be able to continue as a going concern while maximising the return to stakeholders. The Consolidated Entity’s strategy remains unchanged from 2021. The capital structure of the group consists of cash and equity attributable to the equity holders of the parent entity, comprising issued capital, reserves and retained earnings. The Consolidated Entity operates globally, primarily through subsidiary companies established in the markets in which the group trades. The consolidated entity is subject to certain financing arrangements covenants and meeting these are given priority in all capital risk management decisions. For further details on these financing arrangements, refer to Note 22. Operating cash flows are used to make the routine outflows of tax and dividends. (ii) Market Risk The Consolidated Entity’s activities expose it primarily to the financial risks of changes in foreign currency exchange rates (refer Note 33 (iii)). (iii) Foreign Currency Risk Management The Consolidated Entity undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate fluctuations arise. Derivative financial instruments are used by the Consolidated Entity to hedge exposure to exchange rate risk associated with foreign currency trade receivables. Mark-to-market gains on derivative financial instruments used by the economic entity are recognised in the financial statements. Transactions for hedging purposes are undertaken without the use of collateral as only reputable institutions with sound financial positions are dealt with. Foreign currency sensitivity analysis The Consolidated Entity is mainly exposed to US dollars (USD), Euro (EUR), Great British Pound (GBP) and New Zealand Dollars (NZD). The carrying amount of the foreign currency denominated financial assets and liabilities at the reporting date is as follows: 2022 2021 CONSOLIDATED ENTITY FINANCIAL ASSETS FINANCIAL LIABILITIES FINANCIAL ASSETS FINANCIAL LIABILITIES $000'S $000'S $000'S $000'S US Dollars 6,824 (3,685) 8,173 (1,602) Euro 305 (1,646) 3,083 (523) Great British Pound 10,557 (2,837) 11,261 (989) New Zealand Dollars 5 73 6 27 Other (16) (2) 464 - 17,675 (8,098) 22,986 (3,086) NOTES TO THE FINANCIAL STATEMENTS 2022 NAME OF ENTITY COUNTRY OF FORMATION OR INCORPORATION BEYOND INTERNATIONAL LIMITED DIRECT INTEREST IN ORDINARY SHARES 2022 % 2021 % Controlled entities of Beyond Home Entertainment Pty Ltd Magna Home Entertainment Pty Ltd Australia 100 100 Controlled entities of Magna Home Entertainment Pty Ltd Magna Home Entertainment (NZ) Ltd New Zealand 100 100 Controlled entities of Beyond D Pty Ltd Beyond D (NZ) Ltd New Zealand - 100 Controlled entities of Beyond TNC Ltd Beyond TNC (UK) Ltd United Kingdom 100 100 Beyond TNC (Australia) Pty Ltd Australia 100 100 Controlled entities of Beyond TNC (Australia) Pty Ltd Memory Lane 1 Pty Ltd Australia 100 100 Memory Lane 2 Pty Ltd Australia 100 100 Blitzed 1 Pty Ltd Australia 100 100 They all came down to Montreux Pty Ltd Australia 100 100 Birthday Party Pty Ltd Australia 100 - Alien Time Capsule Pty Ltd Australia 100 - Controlled entities of BTVUS Pty Ltd B U.S.A. Holdings, Inc USA 100 100 Controlled entities of B U.S.A. Holdings, Inc Move It or List It, LLC USA 100 100 11:11 US, LLC USA 100 100 Controlled entities of Clandestine Beyond Pty Ltd Pulse Productions S01 Pty Ltd Australia 100 100 Controlled entities of Blue Rocket Beyond Pty Ltd Dumbots S01 Pty Ltd Australia 100 100 Controlled entities of Beyond Lone Hand Pty Ltd Halifax Retribution Production 1 Pty Ltd Australia 100 100 Controlled entities of Beyond Hogg Pty Ltd On the Record Pty Ltd Australia 100 100 (b) Joint venture/associates Beyond LNBF Pty Ltd Australia 50 - Troppo Productions Pty Ltd Australia 50 50 Beyond May30 Pty Ltd Australia 50 50 33. FINANCIAL RISK MANAGEMENT 32. GROUP STRUCTURE (continued) 32. GROUP STRUCTURE (continued) NAME OF ENTITY COUNTRY OF FORMATION OR INCORPORATION BEYOND INTERNATIONAL LIMITED DIRECT INTEREST IN ORDINARY SHARES 2022 % 2021 % (c) Associates Melodia Ltd Ireland 33.3 33.3 Melodia (Australia) Pty Ltd Australia 33.3 33.3 GB Media Development, Inc USA 10 10 BEYOND INTERNATIONAL ANNUAL REPORT 2022 77 76 NOTES TO THE FINANCIAL STATEMENTS 2022 33. FINANCIAL RISK MANAGEMENT (continued) 33. FINANCIAL RISK MANAGEMENT (continued) Liquidity and interest risk tables The following tables detail the Consolidated Entity’s remaining contractual maturity for it’s financial liabilities. CONSOLIDATED ENTITY NOTES AVERAGE INTEREST RATE % LESS THAN 6 MONTHS $000'S 6 MONTHS TO 1 YEAR $000'S 1 TO 5 YEARS $000'S 5+ YEARS $000'S TOTAL OUTFLOWS $000'S CARRYING AMOUNT $000'S 2022 Financial liabilities Trade & other payables 16 - 6,844 - - - 6,844 6,844 Other financial liabilities 19 5.29% 1,397 - - - 1,397 1,397 Lease liabilities 21 8.58% 568 494 146 - 1,208 1,208 Producer share payable 20 - 11,053 11,053 689 - 22,794 22,794 Other payables 20 - 187 - - - 187 187 Borrowings 22 4.26% 8,676 - - - 8,676 8,676 Total financial liabilities 28,725 11,547 835 - 41,108 41,106 2021 Financial liabilities Trade & other payables 16 - 7,670 - - - 7,670 7,670 Other financial liabilities 19 6.48% 255 - - - 255 255 Lease liabilities 21 7.14% 538 564 799 - 1,901 1,901 Producer share payable 20 - 12,368 12,368 67 - 24,803 24,803 Other payables 20 - 191 - - - 191 191 Borrowings 22 3.29% 6,966 - - - 6,966 6,966 Total financial liabilities 27,989 12,933 866 - 41,787 41,787 (vi) Credit Risk Exposures Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Consolidated Entity. The consolidated entity has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the risk of financial loss from defaults. This information is supplied by credit rating agencies and, if not available, the Consolidated Entity uses publicly available financial information to assess the credit-worthiness. Trade receivables consist of a large number of customers, spread across diverse geographical areas. Ongoing reviews are conducted of accounts receivable balances. The Consolidated Entity does not have significant credit risk exposure to any single counterparty. The credit risk on liquid funds and derivative financial instruments is limited because the counterparties are banks with high credit-ratings assigned by international credit-rating agencies. The credit risk on financial assets of the Consolidated Entity which are recognised on the Statement of Financial Position is generally the carrying amount, net of any provisions for doubtful debts. (vii) Price Risk The Consolidated Entity is marginally exposed to equity price risk arising from the equity investments classified as available-for-sale assets in Note 12(a). Equity investments are held for strategic rather than trading purposes. The Consolidated Entity does not actively trade in this investment. The following table details the Consolidated Entity’s sensitivity to a 10% increase and decrease in the Australian dollar against the relevant foreign currencies. A sensitivity rate of 10% is considered reasonable based on exchange rate fluctuations over the past 12 months. The sensitivity analysis includes only outstanding foreign currency financial assets and liabilities and adjusts their translation at the period end for a 10% change in foreign currency rates. CONSOLIDATED ENTITY 2022 2021 10% INCREASE 10% DECREASE 10% INCREASE 10% DECREASE $000'S $000'S $000'S $000'S Profit/(loss) (2,343) 2,864 (2,120) 2,591 (2,343) 2,864 (2,120) 2,591 Forward foreign exchange contracts It is the policy of the Consolidated Entity to enter into forward foreign exchange contracts from time to time, to cover specific production foreign currency receipts. The Consolidated Entity does not enter into derivative financial instruments for speculative purposes. There were no forward foreign exchange contracts entered into in 2022 (2021: Nil). (iv) Interest Rate Risk Management The Consolidated Entity’s exposure to interest rate risk is minimal. The Consolidated Entity’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note, per below. The average effective interest rate on cash at bank was 3.97% (2021: 0.01%). The average effective interest rate on borrowings was 4.26% (2021: 3.45%). Interest rate sensitivity analysis The sensitivity analysis below have been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A sensitivity analysis of 50 basis points is considered reasonable based on interest rate fluctuations over the past 12 months. At reporting date, if interest rates had been 50 points higher or lower and all other variables were held constant, net interest received from cash held by the Consolidated Entity would move by $24,008 (2021: $50,224). At reporting date, if interest rates on borrowings had been 50 points higher or lower and all other variables were held constant, net interest payable from borrowings held by the Consolidated Entity would move by $25,833 (2021: $16,217). (v) Liquidity Risk Management Ultimate responsibility for liquidity risk management rests with the Board of Directors, who have built an appropriate liquidity risk management framework for the management of the Consolidated Entity’s short, medium and long-term funding and liquidity management requirements. This framework is not formally documented. The Consolidated Entity manages liquidity risk by maintaining adequate reserves and banking facilities by continuously monitoring forecast and actual cash flows. Included in note 8(b) is a listing of additional undrawn facilities that the Consolidated Entity has at its disposal to further reduce liquidity risk. BEYOND INTERNATIONAL ANNUAL REPORT 2022 79 78 Abandoned Americana Directors The following persons were directors of Beyond International Limited during the financial year: Chairman Ian Ingram Executive directors Mikael Borglund – Managing Director Non-executive directors Anthony Lee Ian Robertson Executives (other than directors) with the greatest authority for strategic direction and management The following persons were the executives with the greatest authority for the strategic directions and management of the Consolidated Entity (“specified executives”) during the financial year. Name Position Employer K Llewellyn-Jones CEO, Beyond Distribution Business Division* Beyond Rights Ltd David Smyth CEO, Beyond Distribution Business Division** Beyond Rights Ltd J Luscombe General Manager – Productions & Executive Vice President Beyond Television Group Pty Ltd M Murphy Executive Director – Ireland Beyond Entertainment Ltd P Tehan General Manager – Legal & Business Affairs Beyond Television Group Pty Ltd P Wylie General Manager – Finance & Company Secretary*** Beyond Television Group Pty Ltd P Fedele General Manager – Finance & Company Secretary**** Beyond Television Group Pty Ltd J Ward General Manager – Beyond D***** Beyond D Pty Ltd * For part of the financial year until 28 February 2022 ** For part of the financial year from 13 December 2021 *** For part of the financial year until 13 January 2022 **** For part of the financial year from 23 November 2021 ***** For part of the financial year until 29 November 2022 Information on key management personnel compensation is disclosed below and in the Directors’ Report. (i) REMUNERATION The aggregate compensation made to directors and other members of key management personnel of the consolidated entity is set out below: CONSOLIDATED ENTITY 2022 2021 $ $ Short-term employee benefits 3,478,301 3,222,288 Post-employment benefits 154,792 140,164 Long-term benefits 55,160 155,855 Termination benefits 53,676 - 3,741,929 3,518,307 NOTES TO THE FINANCIAL STATEMENTS 2022 33. FINANCIAL RISK MANAGEMENT (continued) 34. KEY MANAGEMENT PERSONNEL COMPENSATION (viii) Equity price sensitivity analysis At the reporting date, any reasonable change in the price of the equity instrument would have been immaterial to the consolidated entity’s financial position. (ix) Fair Value of Financial Instruments The fair value of cash and cash equivalents and non-interest bearing monetary financial assets and liabilities approximates their carrying values. A discount rate of 8% (2021: 8%) has been applied to all non-current receivables & payables to determine fair value. The fair value of other monetary financial assets and liabilities is based upon market prices where a market exists or by discounting the expected future cash flows by the current interest rates for assets and liabilities with similar risk profiles. For forward exchange contracts the fair value is taken to be the unrealised gain or loss as at the date of the report calculated by reference to the current forward rates for similar contracts. CARRYING AMOUNT NET FAIR VALUE 2022 2021 2022 2021 $000'S $000'S $000'S $000'S Financial assets Cash and cash equivalents 8,682 6,442 8,682 6,442 Loans and receivables 37,711 31,279 37,218 31,132 46,393 37,721 45,900 37,574 Financial liabilities, at amortised cost Trade and other payables 6,844 7,670 6,844 7,670 Other payables 187 191 187 191 Producer share payable 22,794 24,803 22,743 24,798 Borrowings 8,676 6,966 8,676 6,724 Other financial liabilities 1,397 255 1,397 255 39,898 39,886 39,848 39,639 BEYOND INTERNATIONAL ANNUAL REPORT 2022 81 80 (i) CONTROLLING ENTITIES Beyond International Limited is the ultimate parent entity in the wholly-owned group comprising the Company and its wholly-owned controlled entities which are disclosed in note 32. (ii) KEY MANAGEMENT PERSONNEL Disclosures relating to key management personnel are set out in Note 34 and the remuneration report in the directors’ report. Loans to key management personnel There were no outstanding loans as at 30 June 2022 or at any point during the year (2021: $nil). Equity transactions with directors and their director-related entities The aggregate number of equity instruments acquired or disposed of by directors of the Consolidated Entity and their director-related entities during the year were: 2022 2021 NUMBER NUMBER Acquisitions Ordinary shares 104,182 - Disposals Ordinary shares - - The aggregate number of equity instruments held by directors of the Consolidated Entity and their director- related entities at balance date were: NUMBER Issuing entity Class of equity instruments Beyond International Limited Ordinary shares 28,434,032 28,223,005 Options over ordinary shares - - (iii) TRANSACTIONS WITH ENTITIES IN THE WHOLLY-OWNED GROUP Beyond International Limited is the ultimate parent entity in the wholly-owned group comprising the Company and its wholly-owned controlled entities. The Company advanced and repaid loans, received loans, provided management services, received dividends and charged rent to other entities in the wholly-owned group during the current and previous financial years. With the exception of loans advanced free of interest to wholly-owned subsidiaries, these transactions were on commercial terms and conditions. Such loans are repayable on demand. J Luscombe is a director of Ryzara Pty Ltd. The company has received payments for services rendered by J Luscombe during the year. These fees are included as part of the Executive Remuneration disclosed in note 34 and the Directors Report. (iv) TRANSACTIONS WITHIN THE WHOLLY OWNED GROUP Due to the nature of the operations of the Consolidated Entity, normal operating transactions take place between subsidiaries within the group. These are all at arms length and are eliminated on consolidation. NOTES TO THE FINANCIAL STATEMENTS 2022 (ii) SHAREHOLDINGS Number of Shares held by Directors and Specified Executives, including their personally related parties 2022 PARENT ENTITY DIRECTORS BALANCE 1.07.21 RECEIVED AS REMUNERATION OPTIONS EXERCISED NET CHANGE OTHER * BALANCE 30.6.22 M Borglund 3,223,076 - - 75,959 3,299,035 I Ingram 19,521,777 - - 28,223 19,550,000 A Lee 5,474,997 - - - 5,474,997 I Robertson 110,000 - - - 110,000 Total 28,329,850 - - 104,182 28,434,032 SPECIFIED EXECUTIVES BALANCE 1.07.21 RECEIVED AS REMUNERATION OPTIONS EXERCISED NET CHANGE OTHER * BALANCE 30.6.22 J Luscombe 273,478 - - - 273,478 P Tehan 75,000 - - - 75,000 P Wylie - - - - - K Llewellyn-Jones - - - - - M Murphy - - - - - J Ward - - - - - P Fedele - - - - - D Smyth - - - - - Total 348,478 - - - 348,478 2021 PARENT ENTITY DIRECTORS BALANCE 1.07.20 RECEIVED AS REMUNERATION OPTIONS EXERCISED NET CHANGE OTHER * BALANCE 30.6.21 M Borglund 3,150,949 - - 72,127 3,223,076 I Ingram 19,487,059 - - 34,718 19,521,777 A Lee 5,474,997 - - - 5,474,997 I Robertson 110,000 - - - 110,000 Total 28,223,005 - - 106,845 28,329,850 SPECIFIED EXECUTIVES BALANCE 1.07.20 RECEIVED AS REMUNERATION OPTIONS EXERCISED NET CHANGE OTHER * BALANCE 30.6.21 J Luscombe 273,478 - - - 273,478 P Tehan 75,000 - - - 75,000 P Wylie 2,000 - - 20,000 22,000 K Llewellyn-Jones - - - - - M Murphy - - - - - J Ward - - - - - Total 350,478 - - 20,000 370,478 * Net Change Other refers to shares purchased or sold during the financial year 34. KEY MANAGEMENT PERSONNEL COMPENSATION (continued) 35. RELATED PARTIES BEYOND INTERNATIONAL ANNUAL REPORT 2022 83 82 37. SUBSEQUENT EVENTS 38. COMPANY DETAILS NOTES TO THE FINANCIAL STATEMENTS 2022 The following information relates to the parent entity Beyond International Ltd. The information presented has been prepared using accounting policies that are consistent with those of the Consolidated Entity. PARENT ENTITY 2022 2021 $000'S $000'S Statement of financial position Current assets 1,269 473 Non-current assets 50,907 33,121 Total assets 52,176 33,594 Current liabilities 11,347 7,906 Non-current liabilities 7 1,882 Total liabilities 11,354 9,789 Contributed equity 34,018 34,018 Reserves 341 341 Accumulated losses 6,464 (10,552) Total equity 40,823 23,807 Total comprehensive income/(loss) for the year 17,017 16,822 Contingent Assets and Liabilities The parent entity has given a bank guarantee as at 30 June 2022 of $895,000 (2021: $895,000) to its landlord. No matter or circumstance has arisen since 30 June 2022 that has significantly affected or may significantly affect the Group’s operations, the results of those operations or the Group’s state of affairs in future years. The registered office & principal place of business of the company is : Beyond International Limited 109 Reserve Rd Artarmon, NSW 2064 Australia 36. PARENT ENTITY Loot BEYOND INTERNATIONAL ANNUAL REPORT 2022 85 84 DIRECTORS’ DECLARATION 2022 DIRECTORS’ DECLARATION INDEPENDENT AUDITOR’S REPORT Level 11, 1 Margaret St Sydney NSW 2000 Australia Tel: +61 2 9251 4100 Fax: +61 2 9240 9821 www.bdo.com.au BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme approved under Professional Standards Legislation. INDEPENDENT AUDITOR'S REPORT To the members of Beyond International Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Beyond International Limited (the Company) and its subsidiaries (the Group), which comprises the consolidated statement of financial position as at 30 June 2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial report, including a summary of significant accounting policies and the directors’ declaration. In our opinion the accompanying financial report of the Group, is in accordance with the Corporations Act 2001, including: (i) 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 (ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were 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 these matters. 71 BEYOND INTERNATIONAL LIMITED AND ITS CONTROLLED ENTITIES ABN 65 003 174 409 DIRECTORS’ DECLARATION In the directors’ opinion: • the attached financial statements and notes thereto comply with the Corporations Act 2001, the Australian Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; • the attached financial statements and notes thereto comply with International Financial Reporting Standards as issued by the International Accounting Standards Board as described in the financial statements; • the attached financial statements and notes thereto give a true and fair view of the consolidated entity’s financial position as at 30 June 2022 and of its performance for the financial year ended on that date; • there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable; and The directors have been given the declarations required by Section 295A of the Corporations Act 2001. Signed in accordance with a resolution of the directors made pursuant to section 295(5) of the Corporations Act 2001. On behalf of the directors Mikael Borglund Managing Director 29 August 2022 Sydney BEYOND INTERNATIONAL ANNUAL REPORT 2022 87 86 INDEPENDENT AUDITOR’S REPORT 2022 INDEPENDENT AUDITOR’S REPORT Responsibilities of the directors for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or has no realistic alternative but to do so. Auditor’s responsibilities for the audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) 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 on the Remuneration Report We have audited the Remuneration Report included in the directors’ report under the heading ‘Remuneration Report’ for the year ended 30 June 2022. In our opinion, the Remuneration Report of Beyond International Limited, for the year ended 30 June 2022, complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. BDO Audit Pty Ltd John Bresolin Director 29 August 2022 73 Valuation of other assets Key audit matter How the matter was addressed in our audit As at 30 June 2022, the Group recognised other assets of $28,042,000 which included capitalised production costs of $6,574,000, capitalised development costs of $2,768,000, distribution advances of $14,442,000 and investments in productions and 3rd party copyright of $3,184,000 as disclosed in Note 12. Due to the judgements and estimates applied by management in forecasting future sales to support the carrying value of these assets along with the significance of the balance in the Consolidated Statement of Financial Position, we considered this area to be a key audit matter. Our audit procedures for assessing the carrying value of the Group’s other assets included, but were not limited to, the following: • Performing a detailed analysis of the costs capitalised during the period in relation to specific titles, including an assessment of the inputs and estimates applied. • Assessing the recoverability of these assets through a review of management’s forecast of sales projections in comparison to the historical sales performance of specific titles and current licensing terms in place with third party distributors. • Performing detailed testing in respect to licensing and production contracts to validate actual sales incurred to date. • Assessing whether the recognition, recoupment and write-down of these assets was in accordance with Australian Accounting Standards. • Assessing the adequacy of the disclosures included in Note 12 in relation to these assets. Other information The directors are responsible for the other information. The other information comprises the information contained in the Directors’ Report (excluding the audited Remuneration Report section) for the year ended 30 June 2022, but does not include the financial report and our auditor’s report thereon, which we obtained prior to the date of this auditor’s report, and the Annual Report to Shareholders, which is expected to be made available to us after that date. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. 72 BEYOND INTERNATIONAL ANNUAL REPORT 2022 89 88 RANK HOLDER UNITS % OF UNITS 2021 MOVEMENT 1 WINCHESTER INVESTMENTS GROUP PTY LIMITED 19,550,000 31.87% 19,521,777 28,223 2 FREMANTLEMEDIA OVERSEAS LIMITED 11,948,422 19.48% 11,948,422 - 3 MUTUAL TRUST PTY LTD 5,350,592 8.72% 5,350,592 - 4 MS IRENE YUN LIEN LEE 2,654,034 4.33% 2,654,034 - 5 WILVESTOR LIMITED 2,531,111 4.13% 2,531,111 - 6 WILGRIST NOMINEES LIMITED 2,416,224 3.94% 2,416,224 - 7 AXPHON PTY LIMITED2,287,265 3.73% 2,257,559 29,706 8 ALLAN DALE HOLDINGS PTY LTD 1,899,177 3.10% 1,803,197 95,980 9 MR RAYMOND DAVID DRESDNER + MRS ANN SIMONE DRESDNER 1,615,050 2.63% 1,615,050 - 10 NOMITOR LIMITED 1,581,751 2.58% 1,581,751 - 11 MR MIKAEL BORGLUND 1,011,770 1.65% 1,011,770 - 12 A & C GAL INVESTMENTS PTY LTD 928,000 1.51% 928,000 - 13 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED 911,910 1.49% 914,910 (3,000) 14 SOURCE INCORPORATED 559,016 0.91% 559,016 - 15 DIXSON TRUST PTY LIMITED 546,820 0.89% 546,820 - 16 DEBOURS PTY LIMITED 529,031 0.86% 529,031 - 17 G CHAN PENSION PTY LTD 179,538 0.29% 179,538 - 18 CITICORP NOMINEES PTY LIMITED 179,382 0.29% 179,382 - 19 BNP PARIBAS NOMINEES PTY LTD 171,929 0.28% 198,829 (26,900) 20 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2 156,984 0.26% 156,984 - Totals: Top 20 holders of ISSUED CAPITAL 57,008,006 92.94% 56,883,997 92.74% Total Remaining Holders Balance 4,328,962 7.06% 4,452,971 7.26% DISTRIBUTION OF EQUITY SECURITIES RANGE TOTAL HOLDERS 1 - 1,000 221 1 1000 1,001 TO 5,000 115 1001 5000 5,001 TO 10,000 43 5001 10000 10,001 - 100,000 97 10001 100000 100,001 - 9,999,999,999 23 100001 9999999999 Total 499 There were 222 holders of less than a marketable parcel of shares SHAREHOLDER INFORMATION SHAREHOLDER INFORMATION 2022 End of the Rope BEYOND INTERNATIONAL ANNUAL REPORT 2022 91 90 CORPORATE DIRECTORY 2022 DIRECTORS Ian Ingram Chairman of Directors 109 Reserve Road Artarmon NSW 2064 Mikael Borglund Managing Director 109 Reserve Road Artarmon NSW 2064 Anthony Lee Non-Executive Director 109 Reserve Road Artarmon NSW 2064 Ian Robertson Non-Executive Director 109 Reserve Road Artarmon NSW 2064 OFFICERS Mikael Borglund Chief Executive Officer Peter Fedele Company Secretary OFFICES Sydney 109 Reserve Road Artarmon NSW 2064 Australia Telephone: +61 (0) 2 9437 2000 Facsimile: +61 (0) 2 9437 2181 www.beyond.com.au Dublin 78 Merrion Square South Dublin 2 Ireland Telephone: +353 (0) 1 614 6270 Facsimile: +353 (0) 1 639 4944 London 3rd Floor, 167 Wardour Street London, W1F 8WP United Kingdom Telephone: +44 (0) 20 7323 3444 Facsimile: +44 (0) 20 7580 6479 Los Angeles 10555 Jefferson Boulevard, Suite A Culver City, CA 90232 USA Telephone: +1 (310) 237 6279 AUDITOR / ACCOUNTANT / ADVISORS BDO Audit Pty Ltd Chartered Accountants Level 11, 1 Margaret Street Sydney NSW 2000 Australia BANKERS St George Bank Level 12, 55 Market Street Sydney NSW 2000 Australia Bank of Ireland Colvill House Talbot Street Dublin 1 Ireland Coutts 440 Strand London, WC2R 0QS United Kingdom Comerica Bank 2000 Avenue of the Stars, Suite 210 | Los Angeles, CA 90067 USA SOLICITORS Addisons Level 12, 60 Carrington Street Sydney NSW 2000 Australia Holding Redlich Level 65, MLC Centre 19 Martin Place Sydney NSW 2000 Australia Gipson Hoffman & Pancione 1901 Avenue of the Stars Suite 1100 Los Angeles, CA 90067 USA SHARE REGISTRY Computershare Investor Services Pty Ltd Level 3, 60 Carrington Street Sydney NSW 2000 Australia Telephone: 1300 855 080 CORPORATE DIRECTORY Best of Britain by the Sea BEYOND INTERNATIONAL ANNUAL REPORT www.beyond.com.au