Iress Ltd
Annual Report 2023

Plain-text annual report

Reset Refocus Build Annual Report 2023 We harness the power of technology to enable a smarter financial system that delivers more for everyone. Strategic Report ESG Financial Report 1 Our values Go Beyond We dream big and nothing is off the table. From our people, to our market‑leading ideas and how we connect with and deliver for our customers; a growth mindset is part of our fabric. Act Smart We act with integrity, ensuring there are no surprises. We use our collective knowledge to strive for excellence while delivering industry‑leading software and services that consistently impress our customers. Win Together We’re one team that has each other’s back. We bring our A‑game, take ownership and follow up; with our shareholders, customers and community always at heart. AGM details The AGM will be a hybrid event, with the option to attend online or in person on: Thursday 2 May 2024 11.30am AEST King & Wood Mallesons Level 27, 447 Collins Street Melbourne VIC 3000, Australia Acknowledgement of Country We pay our respects to the Traditional Owners of the lands where we work as well as across the lands through which we travel. We recognise Indigenous Peoples’ continuing connection to land, place, waters and community. We pay our respects to their cultures, Country, and elders past, present and emerging. Contents Strategic Report 2 2023 highlights 4 6 8 Business overview Letter from the CEO & Chair Our vision & strategy ESG Report Financial Report 10 Environmental, Social & Governance Report 14 Environmental 20 Social 36 Governance 40 Iress leadership 42 Board of Directors 44 Material business risks 46 Operating & Financial Review 50 Directors’ Report 52 Remuneration Report 82 Auditor’s Independence Declaration 83 Financial Statements 130 Directors’ Declaration 131 Independent Auditor’s Report 136 Shareholder information 137 Corporate directory Iress LimitedAnnual Report 2023 2 2023 Highlights Strategic Report 3 Financial Delivered at top end of revised guidance. Revenue up 2% on previous year, through growth in Superannuation and the UK. Operating revenue AUD (m) 2023 2022 $625.7m $615.6m +2% on 2022 Segment overview APAC Wealth Management APAC Trading & Market Data Superannuation UK Managed Portfolio – Other $94.7m $167.9m $626m Revenue $54.2m $130.4m $178.5m Shareholder Net Profit After Tax (NPAT) Earnings per share (EPS) Underlying EBITDA Innovation • Launched editorial and discussion platform, Advisely, to improve business efficiency amongst financial advisers. • Launched Iress FIX Hub, a cloud‑native financial information exchange platform. • Exploring opportunities in data & AI. People and culture Transformation A new remuneration model and an evolved performance framework has been launched in 2024 to drive growth, development and performance, and align the contribution of everyone to annual and quarterly objectives. Almost 12,000 ‘Long Weekend’ days were taken by our people globally in 2023. Iress’ ‘Long Weekend’ will be continued in 2024 – with the added flexibility of being able to take a ‘Long Weekend’ on your birthday. ESG • The Science Based Targets initiative approved Iress’ near‑term emissions reduction targets. • New emissions management system. • Initiation of Reflect Reconciliation Action Plan & working group. • Modern slavery risk identification & toolkit development. • UX Scholarship for two refugee women. Significant year of change, with announcement of refreshed strategy and clear actions to reset Iress’ cost and asset base, refocus on core businesses while managing non‑strategic businesses for value and innovating to build future growth. 1,900 people restructured to product‑led business units, with refreshed leadership team driving end‑to‑end accountability and improved performance. 15% reduction in headcount as at 31 December 2023 vs 31 December 2022. Total headcount reduction of 21% when MFA divestment included. Five‑year plans in place for business units with a focus on customers to further improve customer satisfaction scores. $50.5m (AUD) MFA business sold for $50.5m, and a clear program for divestments of Platforms and Mortgages businesses. (137.5m) 2023 (76.4c) 2023 2023 $128.3m Iress Impact 2022 $52.7m 2022 28.6c 2022 $146.4m Statutory loss attributable to non‑cash amortisation, depreciation, de‑recognition and impairment expense of $180.4m. This was notably impacted by an impairment of $130.2m on the UK goodwill carrying value which was written down in the first half of the year, as well as the de‑recognition of capitalised software intangible assets and one‑off expenses related to transformation. Iress Impact was established in 2017 to support charities, predominantly through fundraising and workplace giving. The guiding principles remain relevant today: facilitate, support and promote people engagement, while making a visible, reliable, and meaningful contribution to partner charities. 500 volunteering hours $266k (AUD) donated 86 charities supported Iress LimitedESGFinancial ReportAnnual Report 2023Strategic Report 4 Strategic Report ESG Financial Report 5 Business overview Iress is a leading technology company, designing and developing software and services for the financial services industry. Iress operates across Asia Pacific, the United Kingdom & Europe, Africa and North America. Our people and locations across the globe 1,900 People 52 North America 623 UK & Europe 164 Africa 1,061 Asia Pacific Software and clients Our clients range from small retail to large institutional businesses across the financial services industry. Our technology sits at the centre of our clients’ businesses, supporting their core operations with essential infrastructure and functionality, helping them to deliver to their clients, members and customers. 3.2b in trade orders processed in Australia annually Financial advice Trading and market data Investment management Superannuation Mortgages $A45trn+ in trade volumes annually in Australia 38,000 Australian Xplan users 3m+ Super member accounts Software Integrated financial advice software including: • client management • business automation • portfolio data • research Global market data and trading software including: • market data • trading interfaces • order and execution management • smart order routing • FIX services • portfolio management Global investment management and trading software including: • portfolio management • order and execution management services • FIX services • analytical tools • connectivity Superannuation administration software including: • fund registry • digital member portal Clients • Institutional and independent advisory • Institutional sell‑side brokers • Retail brokers • Online brokers • financial planning tools • scaled advice journeys • digital client solutions • data‑driven compliance and analytics • regulatory obligations management • securities lending • analytical tools • algorithmic trading • market making • CFD clearing • post trade solutions • trading and market data APIs Integrated software solution including: • market data • order management • portfolio management • client relationship management • wealth management • Investment managers • Investment platforms • Fund managers • Private client advisers and managers • Wealth managers • Retail platforms • digital advice solutions • fund administration services • Superannuation funds Multi-channel mortgage sales and origination software including: • automated workflow • application processing • connectivity Mortgage intermediary software including: • mortgage comparison • mortgage advice • lender connectivity • Mortgage lenders • Mortgage intermediaries Life and pensions Insurance and pension sourcing software including: • quoting • comparison • application processing • Institutional and independent advisory • Mortgage intermediaries Iress LimitedAnnual Report 20236 Letter from the CEO & Chair 2023 was a year of significant change for Iress, with the appointment of a new Management Team, the launch of a refreshed strategy and the start of a comprehensive transformation program aimed at unlocking the significant earning potential of our core businesses. Strategy and transformation program Iress has for many years enjoyed strong market positions in systemically important financial markets software verticals, generating high‑quality recurring revenues. However, over time the company had become too complex, made acquisitions that did not consistently meet financial or operational hurdles and had taken its eye off customer experience, while carrying an unsustainably high cost base. The Board reviewed this position and decided that a significant transformation would be required. This commenced with the appointment of a new CEO and Managing Director in Marcus Price in October 2022. Financial results Iress reported revenue of $625.7m in 2023, up 2% on the previous year with growth in our Superannuation and UK businesses, offset by a decline in revenue following the sale of the Managed Fund Administration (MFA) business in October. Underlying EBITDA, Iress’ current headline measure of performance, came in at the top end of the revised guidance set out at the half year but was 12% down on FY22 at $128.3m. This was primarily a cost story where inflationary pressures were a key factor in higher salaries and third‑party input costs. In response, Iress undertook significant restructuring initiatives, to trim its cost base. In early 2023 the Board and Management Team undertook a thorough review of the business. This resulted in the articulation of an updated strategy and clear actions to reset Iress’ cost and asset base, refocus on core businesses, manage non‑strategic businesses for value and pave the way to innovate to build future growth. Iress reported a statutory net loss after tax of $137.5m, in large part due to non‑cash impairments and accelerated amortisation of intangible assets which included the $130.2m write down on the carrying value of UK goodwill. Non‑operating and significant items also increased to $57.8m, largely related to transformation activities. The company’s transformation program, which is set to complete at the end of FY24, will see Iress emerge with a more efficient cost base, stronger balance sheet and greater capacity to reinvest in its core products with innovation powering new growth verticals. Iress renewed its leadership team during the year, and an organisation‑wide restructure brought our people closer to our customers. The company is now structured across four divisions, with three core businesses and a managed portfolio aimed at managing assets for value, with the proceeds of divestments to be used principally to retire debt. We are executing our transformation plan well and remain confident we’re on the right path towards operating with significantly improved metrics and transparency. A number of transformation initiatives were brought forward in the second half of 2023, delivering early improvements at the cost and revenue lines. The new structure is also delivering on our objective of delivering more value to our customers. Our leadership team is now firmly in the driver’s seat, with each of our businesses working to five‑year plans and accountability resting with divisional CEOs. We still have much work to do but remain on track to conclude the transformation program by the end of 2024 with benefits to continue into FY25 and beyond. The significant differences between the Group’s headline Underlying EBITDA measure and the statutory NPAT result relate to non‑cash amortisation, depreciation and impairment expenses, and the Group’s non‑operating and significant items during the year. As part of Iress’ commitment to improve transparency made at the time of announcing the transformation program in April, a new headline financial reporting measure will be adopted from 2024. Adjusted EBITDA will replace Underlying EBITDA as the preferred business performance measure, which has a prescriptive and narrower classification of excluded items from the statutory audit. This brings Iress more in line with contemporary peers and market practice. Cost reset and people matters Iress made the difficult but necessary decision to reduce headcount by approximately 15% in 2023 to restore profitability and improve efficiency. The company has built a strong culture over many years. Recognising that workforce reductions can carry risk through disruption, Management took a considered approach to minimise impacts on the company’s people and its customers. Your Board and Management team elected to take this action based on the view that, over time, a sustainable Iress will be better for both its employees and for its customers. 7 In 2023, the company used the proceeds of asset sales to decrease its leverage ratio and retire debt. Further, Iress took the prudent decision to suspend its interim and final dividends to prioritise its deleveraging efforts. We expect to continually assess when conditions are appropriate to commence paying dividends again. Outlook Success through transformation is not a linear process however the fruits of this program are beginning to be seen with all key milestones for 2023 achieved by the year’s end. The transformation program will complete by the end of FY24 with some remaining costs to be incurred in FY25. The result will see Iress with improved operating margins, greater transparency, more customer focus, and a stronger balance sheet as non‑core assets are sold. Thank you We would like to acknowledge the extremely hard work by Iress’ employees in resetting this business for future success. We would also like to thank the Iress Board who have been fully supportive of the transformation process and engaged at heightened levels during the year. We conclude by thanking our shareholders for their patience during a necessary reset this year. We look forward with optimism. Roger Sharp Chair Marcus Price Managing Director & Chief Executive Officer Reflecting the shift in Iress’ expectations of its own performance, we have reset the company’s compensation structure based on performance metrics that reflect the customer and shareholder experience. We are acutely conscious of the need to shift to a performance‑based culture, which the new incentive structure reflects. Fixed equity entitlements have been replaced with cash STIs, with entitlement to be driven by performance against meaningful outcomes. Responding to shareholder and customer perspectives Iress’ shareholders expect improved financial returns, while customers seek an improved product and service experience. We increased our focus on customer experience in 2023, and saw a marked improvement in customer sentiment. We also increased our engagement with shareholders; with new investors bought in and some existing shareholders beginning to rotate off the register. Transparency is at the core of the new Iress. A common refrain from shareholders is that the company’s financial metrics have not always been clear enough. We are taking steps to reframe our financial metrics and are on track to produce a clearer and simpler set of accounts from FY24. Innovation and growth The company’s transformation program is expected to restore Iress’ core businesses to their desired level of focus and profitability. However, it will not render them future proof. Innovation is required to reimagine the future for our clients and to kickstart improved growth for Iress. As Iress began to remediate its core products in 2023 the company also began a new innovation cycle; aimed at evaluating growth vectors based on Iress’ core competencies in Australia and internationally. This will step up during 2024 and accelerate over time. Environmental, Social & Governance Despite the company’s urgent focus on transformation during 2023 we continued to prioritise corporate responsibility with ongoing work in a range of areas; most notably Modern Slavery, where we completed a risk assessment of our supply chain, and Environment where the Science Based Targets initiative (SBTi) approved our near‑term emissions reductions targets. Iress has committed to reduce absolute scope 1 and 2 greenhouse gas (GHG) emissions by 69.3% by 2030 from a 2019 base year, as well as reducing absolute scope 3 GHG emissions 27.5% within the same timeframe. Capital management and dividends At the half year, the company committed to sharing a new capital management plan, which has now been announced. This plan provides a clear statement of policy in relation to financial leverage, and provides a framework for balancing profits, capital reinvestment and dividends. Iress LimitedESGFinancial ReportAnnual Report 2023Strategic Report8 Our vision & strategy An update on our refreshed strategy & transformation In April 2023 Iress announced a refreshed corporate strategy aimed at driving long‑term sustainable growth, benefiting Iress’ shareholders, clients and people. Following this, Management developed detailed Business Unit strategies, and a five‑year plan (to FY27). Iress’ financial goal is to consistently achieve ‘Rule of 40’ returns for shareholders and build new businesses that achieve ‘Rule of 40’ returns. The refreshed strategy is underpinned by three pillars – reset, refocus and build – which together provide the opportunity and potential to transform Iress. To execute against this refreshed strategy, Iress established a Transformation program and roadmap, with the governance, rigour and discipline required to steer the business towards its financial goal. Supported by specialist transformation experts and an internal Transformation Office, Iress has demonstrated considerable improvements in reducing costs, streamlining operations and laying the foundations for organic earnings growth. Reset Refocus Build 1 2 3 4 5 6 Structure for accountability and improved performance Reset the cost and asset base Focus on the core Manage portfolio for value Finish technology uplift Build new businesses Iress has a disciplined and rigorous transformation plan to execute the strategy Transformation Governance Transformation Roadmap Iress Board Governance Executive Transformation Steering Committee Transformation Execution Transformation Office Team Execution Teams 2023 2024 Iress Strategy Transformation H1 Corporate Strategy Business Unit Strategy Transformation Office Established H2 5 Year Plan Execute 6 Strategic Priorities H1 H2 Structure for Accountability & Performance Leadership team appointed New structure & scorecards Execute capability improvements in core business areas Costs and assets Cost-out exercise Optimise business in new structure Focus on strong core markets Manage portfolio for value Finalise technology uplift Innovate and build Business unit plans Uplift core technology & customer experience Commence portfolio separation Commence MFA/Platforms divestment process Realise value in international businesses Finalise transition to platform architecture and cloud optimisation program Establish Iress Innovations Embed innovation discipline & new growth opportunities 9 Manage portfolio for value 2023, Iress sold its MFA business for $50.5m. The Platform business is currently in an active sales process. The UK Mortgages business has also been announced for divestment. Simultaneously, efforts are continuing to separate the UK, South Africa and Canada businesses from Iress’ core operations to provide optionality. Build: Set the foundation for greater long term growth Finish technology uplift Iress’ technology uplift program is well advanced, delivering on our commitment to deliver increased value to customers through technology modernisation and enhanced user interfaces. The technology uplift program is on track to be complete in the first quarter of 2024. Build new businesses To drive Iress towards new growth, an Innovations team was formed to explore new revenue opportunities. During FY23 this team was focused on Data and AI initiatives and delivered proofs of concept to be further progressed in FY24. Innovation A greater culture of innovation is being embedded across the organisation, supporting each Business Unit to identify new opportunities that create meaningful value for our clients and the industries they operate in. Transformation progress Iress has made solid progress against its transformation objectives. Reset: Create a performance-driven structure Structure for accountability and improved performance In July 2023, Iress completed a company‑wide restructure focused on improving accountability, performance and customer focus. This resulted in the formation of dedicated business units – APAC Wealth Management, APAC Trading & Market Data, Superannuation and Managed Portfolio. A refreshed and global leadership team has transitioned all Iress people to the new structure, and implemented a new performance and remuneration framework to underpin Iress’ delivery of its vision. Reset the cost and asset base Arresting growth in the cost base was a focus in FY23, with several cost initiatives executed to remove more than $47m in annualised gross costs from the business. This included a 21% reduction in gross headcount along with several additional cost optimisation initiatives (15% excluding the divestment of the Managed Fund Administration [MFA] business). The divestment of non‑strategic assets allowed for capital to be used for debt retirement – namely from the sale of the MFA business. Refocus: Strengthen the core business franchise, manage the full portfolio for value Refocus the core Iress’ core businesses (APAC Wealth, APAC Trading & Market Data and Superannuation) have each developed five‑year strategic business plans, with a focus on improving efficiency, organic growth and unlocking value for customers. Customer Experience During FY23 a dedicated Customer Experience team was established to support all business units in delivering enhanced value to customers, and to enable them to understand their feedback to enable improvements to Iress’ products and services. A global client survey was conducted in September 2023 and the insights from this are being applied to the transformation roadmap. Iress LimitedESGFinancial ReportAnnual Report 2023Strategic Report10 Strategic Report ESG Financial Report 11 Environmental, Social & Governance Report Iress takes an active approach towards a sustainable natural environment and support for people and communities. About the ESG report The environmental, social & governance (ESG) sections of this report provide an overview of Iress Limited and its subsidiaries’ (‘Iress’) for the period 1 January 2023 to 31 December 2023 prepared in accordance with the GRI Standards. External assurance has not been undertaken for this report. Iress LimitedAnnual Report 202312 ESG 13 Environmental, Social & Governance Report Environmental, Social, Governance & Iress Impact Through stakeholder consultation, we developed a comprehensive 2025 environmental and social impact strategy that takes a structured approach to create genuine outcomes. The Iress Impact framework focuses on causes aligned with Iress’ business and communities. We recognise our key impacts as: • energy consumption through operations and suppliers • e‑waste management • diversity and inclusion • human rights including modern slavery. To address these key impacts, our environmental and social impact strategy: • aligns stakeholder expectations, commitment and builds trust • establishes structured, consistent implementation • quantifies and tracks impact. Our 2025 environmental and social impact roadmap centres on four key pillars: Through Iress Impact, we are committed to making a visible, reliable, and meaningful contribution to partner charities that align with the United Nations Sustainable Development (SDG) goals of: Quality education (SDG 4) Decent work (SDG 8) Partnership for the goals (SDG 17) Social ntal e m n o vir n E Prospering community People wellbeing Supporting aligned causes Great place to work • Quality education • Decent work • Enabling charitable services • Diversity & inclusion • Human rights Healthy environment Sustainable consumption • Emissions management & climate change • E-waste Environmental & social impact at Iress Responsible business Strong foundations • Corporate governance • Risk management G o v e r n a n c e Materiality In 2023, we conducted a pulse survey and interviews with our people, shareholders and clients to build on the detailed materiality assessment conducted in 2022. This process was informed by the Global Reporting Initiative (GRI) Standard, Sustainable Development Goals (SDGs), Sustainability Accounting Standards Board (SASB) software and IT services sector standard, and Iress’ internal documents. Our topic universe included 38 topics, which were developed on research around global risks and megatrends, media trends, peer comparisons, and relevant ESG standards. We identified 20 material topics for Iress to address in this report and include these topics in future strategic planning. Iress’ key stakeholders are those groups and individuals who impact and are impacted by our operations. These include: our clients and users, our people, investors, suppliers, industry and education partners, regulators, governments, and communities in which we operate. We regularly engage our stakeholders throughout the year to understand what’s important and to continue building our ESG agenda. Engagements can include surveys, peer forums, global internal Town Halls to encourage open discussions between our people and the CEO and Leadership Team, and engagement with policy makers and industry associations such as the Financial Services Council (FSC) on issues that are important to our clients and communities. The results of this materiality assessment are presented in the table below. Material Topics Social & Iress Impact Culture & values Environmental Governance Climate change adaptation & resilience Ethics & integrity Talent attraction & retention Waste & resource efficiency Data privacy & cyber security Employee engagement Occupational health, safety & wellbeing Modern slavery & forced labour Transparent, fair & responsible product information/advice Customer & product Customer experience Risk management Industry leadership & engagement Responsible & sustainable procurement Product/service quality Responsible advertising Diversity, equity & inclusion Innovation Economic growth Anti-corruption Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023 14 Strategic Report ESG Financial Report 15 Environmental Environmental With the known impacts of climate change, and greater visibility of environmental considerations across the supply chain, taking action on environmental issues is critical. 2023 key achievements • The Science Based Targets initiative approved Iress’ near‑term emissions reduction targets. • Implemented a new emissions management system recalculating data from 2019–2023. • Decreased leased area resulting in a footprint reduction. 2024 key objectives • Emissions reduction strategy implementation. • Develop climate scenarios specific to Iress and conduct climate scenario analysis. • Environmental data assurance. Relevant UN SDGs In 2023, the Science Based Targets initiative (SBTi) approved Iress’ near-term emissions reduction targets: Iress Limited commits to reduce absolute scope 1 and 2 greenhouse gas (GHG) emissions 69.3% by 2030 from a 2019 base year. Iress Limited also commits to reduce absolute scope 3 GHG emissions 27.5% within the same timeframe. In setting the targets, we underwent a thorough assessment of our emissions boundary to align with evolving best practice, resulting in revised emissions calculations (tonnes of CO2e) from 2019 to 2023 as presented in this section. This report supersedes previously reported data. Iress LimitedAnnual Report 202316 Environmental 17 Task Force on Climate-related Financial Disclosures (TCFD) Iress supports the recommendations of the Task Force on Climate‑related Financial Disclosures (TCFD) and uses this framework to ensure transparent reporting of climate‑related issues. 2022 was our inaugural year reporting against the TCFD recommendations and included a three‑year roadmap (2022–2024), which established our key priorities and actions for improving climate‑related disclosures over the coming years. Over the past year we have continued to implement priority actions from the 2022–2024 TCFD disclosure roadmap. Governance As listed in Governance structure on page 38. Board Iress’ Board has the ultimate responsibility of enabling a positive risk culture and does so through the Audit and Risk Committee (ARC). The ARC reviews ESG matters, including climate‑related issues, on a bi‑annual basis. In 2023, the Audit and Risk Committee endorsed the updated emissions reduction targets of increased ambition. These targets were validated by the Science Based Targets initiative. Leadership team In 2023 due to the company‑wide restructure, operational responsibility for ESG moved from the Legal function to Corporate Affairs & Marketing. The Chief Corporate Affairs & Marketing Officer is now the Risk Owner for ESG risks, with support from the Chief Risk Officer who has responsibility for reviewing all material risks annually. ESG risks, including climate change, are integrated into our Enterprise Risk Register as risks that relate to ‘business operations’. Governance oversight of the ESG function remains through the ARC, with the Chief Operating Officer appointed the Leadership Team ‘Climate Sponsor’ and also taking accountability for ensuring information flows to the ARC through bi‑annual board papers. 2022 2023 2024 Revision of Audit and Risk Committee (ARC) Charter to include mention of climate change as a risk Appointment of Executive Leadership Team ‘climate sponsor’ – updated to Chief Operating Officer in 2023* Inclusion of overarching climate change risk (high and extreme) on enterprise risk register Bi‑annual updates on ESG matters, including climate action, included on Board Audit & Risk Committee agenda Establish and publish Iress’ 2030 science‑based emission reduction target Complete Ongoing Underway Not yet started Develop assurance program for sustainability data (social and environment) published in annual ESG report Develop a global emission reduction strategy with interim KPIs to achieve 2030 reduction targets Develop climate scenarios specific to Iress and conduct climate scenario analysis in 2024 Annual monitoring of climate impacts and mitigation, and integration into enterprise risk management framework Disclose scope 1, 2 and 3 greenhouse gas emissions for Iress’ global operations (2022 ESG report) Publish Iress’ validated 2030 science‑based emission reduction target in 2022 ESG Report Ongoing annual disclosure of progress against emission reduction targets at scope 1, 2 and 3 level Establish Climate Steering Group, supported by representatives responsible for delivering KPIs for Iress’ emission reduction strategy Integration of climate risk mitigation measures and emission reduction strategy into relevant company strategies Review of policies and procedures to align with ambitions of emissions reduction strategy Assess integrated reporting Assess the viability of setting an internal cost on carbon to inform business cases and strategy (*) Replacing Chief Legal Officer due to restructure. Strategy A list of priority climate‑related risks and opportunities from 2022 is provided below. In 2022, these risks were integrated into our broader ESG enterprise risk, which is reviewed bi‑annually. Iress has undergone significant operational changes and a business transformation which delayed the planned scenario analysis. This will occur in 2024 to better understand the resilience of our business strategy to identify climate‑related risks and opportunities. These risks and opportunities were considered still relevant in 2023 and will be reviewed again in 2024 by the Risk Owner and the Chief Risk Officer. The Risk Owner is responsible for managing the risk, including ongoing monitoring of the effectiveness of key controls. The workshops identified a number of climate‑related opportunities for Iress. These key transition opportunities relate to the following areas: a. Supplier engagement – Strong supplier relationships through shared commitment to reducing emissions. b. Employee/talent attraction and retention – improved position on employee attraction, engagement and retention, supported by action on climate change. c. Meeting customers’ expectations and taking a market-leading position – providing products and services that support climate‑related requirements for clients. d. Reputation on climate action – improved reputation on climate change through engagement and knowledge sharing with clients, suppliers, and professional learning communities. Noting the potential impact of climate change on the business, Iress has established near‑term science‑based targets (SBTs) that were validated by the SBTi in 2023 (refer to ‘metrics and targets’ for more details). These targets are supported by an emissions reduction strategy that identifies and stages priority actions over a seven‑year period from 2023 to 2030. Risk management Climate change introduces a varied array of risks across different time frames, each carrying different probabilities across our global operations. Amongst these risks lie opportunities to navigate regional and global shifts toward a low‑carbon economy. Climate‑related risks and opportunities are assessed through our existing Risk Management Framework. In 2022 we conducted a review of our Risk Management Framework and revised our approach to managing risk, including the development of new likelihood, consequence and risk ratings tables and categories. This new framework improves oversight of ESG related risks, including those related to climate change. In 2022, we also conducted a series of climate‑related risk and opportunity workshops to identify and assess risks and opportunities across Iress’ global operations. Representatives were involved from all relevant business segments, including marketing, legal, product, technology, and business development. Risks and opportunities were identified using two extreme future scenarios: 1) ‘runaway climate change’, focusing on physical impacts; and 2) ‘heavy regulation and policy intervention’, focusing on transitional impacts. The materiality of identified risks and opportunities were assessed using the organisation’s Risk Management Framework consequence and likelihood criteria. ESG impact Physical IT operation (incl. IT security) People (talent and capability) Transitional ESG risks Description Weather events (e.g., floods, fires, etc.) impact critical services Weather events (e.g., floods, fires, etc.) impact offices and employee commute Weather events, especially extreme heat, wildfire, causing power outages and disruption to critical services (internet, phone and power) impacting service provision to clients. Also affects people working from home. Increase in employee absence due to sickness driven by climate related impacts (e.g. extreme heat, extreme hayfever etc.). Financial (revenue) Difficulty in obtaining capital Brand, reputation and customer Financial (revenue) Requirements to reduce emissions Requirements to reduce emissions Financial (revenue) Reputation on climate action Brand, reputation and customer Regulatory changes related to climate change Increased requirements for Iress to gain access to capital (i.e. must demonstrate emission reduction), unable to achieve, resulting in higher interest rates or inability to access loans. Clients expect demonstrated emission reduction in Iress' products over time, failure to do so, or disclose progress, may lead to loss of customers. Investors expect demonstrated emission reduction in Iress over time, failure to do so, or disclose progress, may lead to loss of investment, negative impact to share price or access to capital. Iress is perceived by investors and customers as not "doing enough" and not transparent enough by clients, which leads to loss in sales/revenue. Iress fails to anticipate or meet the needs of clients in responding to climate‑related regulation within their industry (i.e. tracking of emissions intensity of funds or information on validating ESG claims). Loss of customers and impact on brand reputation. Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGEnvironmental 18 Environmental Metrics and targets In 2023, the Science Based Targets initiative (SBTi) approved Iress’ near‑term emissions reduction targets: Iress Limited commits to reduce absolute scope 1 and 2 greenhouse gas (GHG) emissions 69.3% by 2030 from a 2019 base year Iress Limited also commits to reduce absolute scope 3 GHG emissions 27.5% within the same timeframe. Greenhouse gas emissions In 2023, we recalculated our FY19 to FY23 emissions using the emission calculation software PathZero. This allows us to ensure we use consistent methodologies and reporting methods across all historical and future years. Our 2019 emissions baseline was developed in accordance with the Greenhouse Gas Protocol and adjusted to account for mergers and acquisitions during this period. The scope 3 GHG protocol categories covered by our scope 3 SBTi target are: purchased goods and services (cat. 1), capital goods (cat. 2), fuel and energy related activities (cat. 3), waste (cat.5), business travel (cat.6), employee commuting (cat. 7) and upstream leased assets (cat. 8). Emissions for scope 1 and 2 were calculated using relevant jurisdictional emission factors. Scope 3 was calculated using supplier specific data, bespoke modelling and input‑output emissions factors (tCO2e/$AUD). Photo Credit: Rabie Property Group Green Building Certification Iress has been on a path of continued improvement in embedding environmental considerations into tenancy decisions, seeking more energy efficient and higher rated buildings. Most recently, the Cape Town office was relocated to Sable Corner which was awarded a 4‑Star Green Star Office v1.1 Design certification by the Green Building Council of South Africa (GBCSA). The design boasts green building principles such as energy efficient lighting, recycled materials and double glazing for heat reduction. Iress’ Facilities team also made a conscious effort to use only local suppliers for the fit out, to reduce travel and shipping. 19 Scope 3 emissions Scope 3 emissions arise from indirect emission sources in our value chain. Reductions within this scope rely on engagement with our suppliers and people. Emissions have been calculated using a combination of spend, actual and modelled activity data. 2023 total Scope 3 emissions 19,538 (‑11%*) 2019 2020 2021 2022 2023 -14% 29,635 24,015 21,373 20,987 20,555 Global scope 3 emissions by category (tCO2e) Purchased goods & services 68% of total 2023 emissions Capital goods 5% of total 2023 emissions Total (tCO2e) +19% 20,588 11,762 12,685 13,774 14,053 4,644 3,878 4,903 2,181 -80% 931 931 Fuel & energy related activities 1% of total 2023 emissions Upstream transportation & distribution 0% of total 2023 emissions 429 291 -42% 110 231 248 185 59 65 63 Waste & wastewater 1% of total 2023 emissions Business travel 12% of total 2023 emissions +125% 306 136 125 62 71 1,654 456 345 1,215 Employee commuting 2% of total 2023 emissions Upstream leased assets 6% of total 2023 emissions 576 626 -43% 2,531 2,301 2,247 1,952 126 258 330 -87% 15 +51% 2,498 -54% 1,158 Waste management We continued to educate our people on responsible waste management practices including recycling and reusing. Electronic waste Iress is committed to the sustainable procurement and consumption of electronics and their responsible disposal at end‑of‑life, to maximise resource recovery. We implemented a process for e‑waste disposal requests globally using a single supplier for consistency. Water management We understand water is a depleting natural resource and the importance of water stewardship. Our cloud partner has made a commitment to be water positive by 2030 returning more water to communities and the environment than they use in data centre operations. This will be achieved by increasing the use of sustainable water sources, improving water use efficiency across operations, reusing water as much as possible, and supporting water replenishment projects for communities and the environment around the world. Scope 1+2 emissions Scope 1 emissions relate to purchased gas and diesel and reimbursement for company car related expenses. Scope 2 emissions relate to electricity purchased for our global offices. Our primary offices in Melbourne and Sydney, Australia operate on renewable energy. Electricity emissions are calculated using the market based approach. Under this methodology renewable electricity purchases have been deducted from the emissions total. 2023 total Scope 1+2 emissions 1,016 (‑53%(1)) Market based electricity calculations (tCO2e) Scope 1 231 193 104 -22% 191 181 ‑22% change from base year (2019) Market based electricity calculations (tCO2e) Scope 2 We are subject to the following environmental legislation and have met 2023 reporting obligations for the following requirements: 1,943 1,322 -57% 816 683 835 ‑57% change from base year (2019) (1) Reduction from base year 2019. Environment requirement Energy Savings Opportunity Scheme (ESOS) Streamlined Energy and Carbon Reporting (SCER) Jurisdiction United Kingdom United Kingdom EU Waste Electrical and Electronic Equipment Directive (WEEE) United Kingdom, France (*) Reduction from base year 2019. Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGEnvironmental20 Social 21 2023 key achievements • Initiation of Reflect Reconciliation Action Plan & working group. • Continued to strengthen our support of Talent Beyond Boundaries – awarded ‘Champion Employer of the Year’ at the UK Fragomen‑TBB Displaced Talent Mobility awards, and attended the Global Refugee Labour Mobility summit in Jordan. • As part of our commitment to gender diversity, Iress has renewed its signatory status with both the Tech Talent Charter and Women in Finance charter in the UK in addition to a continued partnership with Work180 in UK and Australia, and being a signatory on the 40:40 Vision. 2024 key objectives • Broaden and embed diversity, equity and inclusion as part of how we work, who we are and what we stand for. • Implement foundational diversity, equity and inclusion training to promote a greater common understanding and awareness. • Address modern slavery risk through the development of human rights toolkit, including strengthening due diligence and remediation procedures. Relevant UN SDGs Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGSocial 22 Social Employee engagement In December 2023, we conducted our annual people survey inviting all Iress people to have their say on what matters to them and what we do well. Iress saw a decline in overall employee engagement in 2023. We note that the company is in the midst of a significant transformation, which has included a major restructure and headcount reduction program. People benefits at Iress People are at the heart of what we do. The following benefits continued to be provided to our people in 2023: Wellbeing Iress’ unique Long Weekends benefit increased to eight days leave per year (on either a Friday or Monday) in addition to their annual leave entitlement to do what they enjoy most. In 2023, 12,000 Long Weekend days were taken by our people globally. Other benefits include: • 17 weeks paid parental leave and a further nine weeks at half-pay. Return from parental leave on reduced hours for four weeks at full salary. Continued payment of retirement contributions for our people during parental leave in all countries where it is possible to do so. • 8.5 days starting school leave to take when their children start school for the first time. • The ability to purchase and sell back up to 10 days additional leave per year. • Three “Iress Impact” volunteer days per year, to allow our people to give back to their local communities. Occupational Health and Safety (OH&S) We are committed to ensuring our workplace is safe and healthy at all times for the benefit of our people, clients and visitors. Our primary business activity is office based, therefore training focuses on OH&S within this environment. We conduct annual third‑party audits of our OH&S management system. Outcomes are integrated into OH&S management and reflected in our global OH&S policy where relevant. Should a potential risk be identified, our Facilities team is tasked and trained in remediation. Should an incident occur, these are reported through dedicated First Aid officers who are responsible for notifying the facilities team. OH&S issues are reported to a dedicated email address and are reviewed by the facilities team and dedicated OH&S champions. These reports are also reviewed by Iress’ OH&S Committee. In 2023 we had three minor incidents: two of these were offsite, and one minor accident was recorded in our offices. Iress also provides access to a third‑party Employee Assistance Provider for each operating market. 87% of people agreed that their People Leader cares about their wellbeing 81% of people agreed that harassment of any kind is not tolerated at Iress 75% of people agreed that they are genuinely supported if they choose to make use of flexible working arrangements 75% of people agreed that people from all backgrounds have equal opportunities to succeed at Iress 73% of people agreed that Iress values diversity 71% of people agreed that Iress builds teams that are diverse 46% overall employee engagement Total participation 86% 76% 82% 2021 2022 2023 Diversity, equity and inclusion In 2023 we: • Celebrated #EmbraceEquity on International Women’s (IWD) day by: > giving everyone at Iress an opportunity to nominate a woman they work with and provide a description about why they admired them, the value they add, and the skills that they bring. These nominations were collated and projected on our main office display screens for the week of IWD 2023. > supporting local charities focused on helping women through raffles, donations and fundraising. > facilitating interactive global webinars with Leaders for Good to gain a deeper understanding of the concept of equity and gender inequality, and learn clear actions we can take as individuals to drive equity. • Celebrated Global Accessibility Awareness Day with a special guest speaker giving us an engaging and informative brown bag session about accessibility. • Continued to undertake annual role‑by‑role remuneration reviews (by country) and submit annual Gender Pay Gap reports to ensure role gender remuneration parity. • Maintained endorsed employer status with Work180 in the UK and Australia. In 2024 our priorities include: • We are participating in the 40:40 Vision for representation of 40% Women, 40% Men, 20% any gender at Board, Leadership Team and Senior Leadership levels by 2030. • Attracting diverse talent, with objectives to target 45% of female representation of candidates to be interviewed for all roles, and 50% female representation of hires in New Talent Programs. We will also deliver focused DEI Training on inclusive recruitment to our Talent Acquisition team, and maintain our endorsed Employer Status with Work180 in both the UK and Australia. • Ensuring there is no bias in how we remunerate by continuing to undertake an annual Gender Pay Gap analysis and submitting Gender Pay Gap reports. • Establishing a DEI council with a clear purpose to identify any barriers to diversity and inclusion in our current practices, recommend new programs or practices, and track the long‑term progress of promoting a culture of inclusion. • Delivering DEI Foundation training to all people to raise the level of understanding and awareness of DEI, what inclusion really means and how it can benefit Iress, teams, leaders and individuals. • Publishing a DEI statement of intent stating what Iress intends on achieving in broadening our focus beyond gender diversity. In 2023 we released our 2022–2023 Australian Workplace Gender Equity Report. The report is a mandatory requirement under the Workplace Gender Equality Act 2012 (the Act) in Australia. The information in the report is based on our Australian people only and covers our specific policies, strategies and actions on gender equality, as well as employee movements including appointments, promotions, resignations and parental leave; and our workforce composition, salaries and remuneration. In 2023 we also released our 2022 UK gender pay gap report based on our people in the UK. This report is a mandatory requirement under the Equality Act (2010) in the UK. Both reports can be accessed www.iress.com/join‑us/diversity‑iress. 23 Female representation at Iress: Board 42.8% 33.3% 35.3% Executive Leadership Overall We understand that a diverse Board, with different perspectives, experience and gender, will remain relevant, competitive and productive. We manage this objective by periodically assessing the diversity of the Board, in terms of gender, talent and experience, and determining the extent to which membership of the Board fulfils that objective. Graduate recruitment program In 2023 we launched our graduate recruitment program in South Africa. The 12 month program forms part of our Black Economic Empowerment skills development plan to upskill previously disadvantaged communities in South Africa. In 2023, six African graduates, with a 50/50 gender split, were hired and successfully completed the program. Five of these graduates have been placed in permanent roles at Iress, beginning in 2024, and an additional four new graduates will participate in the 2024 Graduate Program in South Africa. Iress does not employ workers under the legal age of work, and requires suppliers to abide by legal standards related to working age and hazardous work. Reconciliation Action Plan We initiated the Reflect stage of the Reconciliation Action Plan through the creation of a working group represented by people across states and business units. We are grateful to have Celeste Carnegie, a Birrigubba Juru and South Sea Islander woman from the tropics of North Queensland, represented on the working group. She brings passion and drive to build platforms for First Nations people everywhere. We have an open invitation to all people at Iress to contribute to the working group at any time. We promote this through internal platforms and share awareness during Reconciliation and NAIDOC Weeks. Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGSocialCloud Transformation TradingTech Insight Awards Europe Iress won ‘Best Low Latency Data Feed’ at A‑Team Group’s 2023 TradingTech Insight Awards Europe 24 Social Awards and recognition Upfront Iress won silver at the Corporate Content Awards in London for our podcast, Upfront, which was recognised for its creativity and originality. Best Investment Management Application Iress won the Best Investment Management Application award at the Goodacre Systems in the City Fintech Awards 25 Iress won the Cloud Transformation category at the 11th annual Technology Business Management (TBM) Council awards. Nominees were evaluated based on tangible results such as optimisation of on‑premises and cloud costs and investment prioritisation, shifting money from run‑the‑business to change‑the business, self‑funding innovation programs, and driving return on investment from project and product portfolios. Champion Employer of the Year Fragomen and Talent Beyond Boundaries (TBB) hosted the inaugural Displaced Talent Mobility Awards Ceremony to celebrate and recognise the people and organisations behind the groundbreaking work undertaken to advance displaced talent mobility in the UK. Iress was named Champion employer of the year. Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGSocial27 500 $266,921.87 Volunteer hours Donated 86 Charities supported Caring for Communities and People (CCP) Throughout 2023 a small group of Iress Employees in the UK have been helping CCP with skilled-based volunteering to improve their Hamper Scamper Referrer process. The previous form used by CCP was unsuitable as it only allowed 30 inputs per submission, however, a number of their referrers have over 200 children that they refer. It also didn’t allow for submissions to be edited by the referrer and in addition to that the code generated for each gift had to be generated by hand for each gift taking into account siblings. The Iress team working on the project has been able to automate the generation of the gift code as well as establish a method to identify siblings and are fully in control of the new cloud‑based solution. UX Scholarship, Australia: Iress and Academy Xi designing the future with young women Over the past year Iress has been working with the River Nile School, an independent school for refugees and asylum seeker women. We wanted to create a valuable experience in collaboration with the students. Through the Iress Design Scholarship, and in partnership with Academy Xi, Iress is providing an opportunity for women from the River Nile School to access a fully paid, accredited design course. We would like to congratulate the inaugural recipients of the Iress Design Scholarship: Marwa Irdis and Maram Irdis. After being introduced to the profession of UX design nine months ago, they have shown outstanding dedication to learning the craft of design. iSchool Africa The Iress iSchoolAfrica programme was launched at Lehlabile Secondary School in partnership with Mamelodi Initiative in July 2020 and we continued to support this program in 2023. The objective of the iSchoolAfrica #MyFuture programme is to empower Grades 10, 11 and 12 learners who have the potential to succeed through a combination of iPad technology, access to relevant curriculum content and online school subject‑focused lessons. In 2023 we added another school to the programs that we support. We are now also sponsoring the “Everyone Can Code programme” at Liv Lanseria for students in Grade 4 to 7. There are a total of 76 students at Liv Lanseria that benefit from this coding program. Iress hosted two coding days in 2023 at the Iress Johannesburg office with the students sponsored through the Iress iSchoolAfrica programmes. 26 Social Iress Impact Iress Impact was established in 2017 to support charities, predominantly through fundraising and workplace giving. The guiding principles established in 2017 remain relevant today: facilitate, support and promote people engagement, while making a visible, reliable, and meaningful contribution to partner charities. As a financial technology company, we have aligned Iress Impact’s mission to the following United Nations Sustainable Development (SDG) goals: Quality education (SDG 4), with a focus on STEM education Decent work (SDG 8), with a focus on displaced people and refugees Partnership for the goals (SDG 17), through the provision of services to charities Talent Beyond Boundaries (TBB) Summit in Jordan Peter Ferguson and Cindy Hu represented Iress at a Refugee Summit in Jordan. The Summit focused on how global communities can improve labour mobility for refugees and how TBB could generate greater scale, as well as encouraging participants to commit to meaningful action to support that. Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGSocial 28 Social People data Gender percentage Total workforce by gender Executive, senior & other managers by gender Percentage of employees receiving regular performance & career development reviews 33.3% Female 63.5% Male 3.2% Not declared 38.4% Female 61.3% Male 0.3% Not declared 100% Female 100% Male 100% Not declared Employee totals by contract type, employment type and gender Contractor Fixed term Regular 8 Female 43 Male 57 Not declared 108 14 Female 10 Male 24 611 Female 1,152 Male 3 Not declared 1,766 Full time Part time Total 542 Female 1,137 Male 3 Not declared 1,682 83 Female 25 Male 108 633 Female 1,207 Male 60 Not declared 1,900 Health & safety: lost day rate 1.5% All 1.8% Female 1.4% Male 1.7% Not declared 29 New people hires (2023) by region, gender & age Location APAC North America South Africa UK & Europe* Total Gender <30 30–50 >50 Total % Count % Count % Count Count Female Male Not declared Female Male Not declared Female Male Not declared Female Male Not declared 14.9 23.29 – – 100.0 100.0 60.0 50.0 – 41.6 26.7 50.0 24.5 10 17 – – 1 1 3 2 – 5 8 2 49 56.06 60.27 – 100.0 – – 20.0 50.0 – 50.0 60.0 50.0 55.5 37 44 – 1 – – 1 2 – 6 18 2 111 33.33 16.44 – – – – 20.0 – – 8.3 13.3 – 20.0 22 12 – – – – 1 – – 1 4 – 67 73 – 1 1 1 5 4 – 12 30 4 40 200 (*) UK & Europe includes Tunisia employees. People turnover (2023) by region, gender & age Location APAC North America South Africa UK & Europe* Total Gender <30 30–50 >50 Total % Count % Count % Count Count Female Male Not declared Female Male Not declared Female Male Not declared Female Male Not declared 18.1 15.8 – – 33.3 100.0 14.3 4.8 – 17.8 16.6 100.0 16.6 36 40 – – 2 2 4 2 – 10 16 2 114 63.6 67.5 – 75.0 66.6 – 60.7 73.1 – 62.5 48.9 – 63.1 126 171 – 3 4 – 17 30 – 35 47 – 433 18.1 16.6 – 25.0 – – 25.0 21.9 – 19.6 34.3 – 20.2 36 42 – 1 – – 7 9 – 11 33 – 139 198 253 – 4 6 2 28 41 – 56 96 2 686 (*) UK & Europe includes Tunisia employees. Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGSocial 30 Social Employee levels by gender & age Employee Level Global Leadership Team People Leaders Employees Total People by contract & region Region Australia Canada France Remote New Zealand Singapore South Africa Tunisia United Kingdom United States of America Total 31 Employee by business unit, gender & age Business Unit % Count % Count % Count Total Gender <30 30–50 >50 Core Trading & Market Data Core Wealth Management Global Portfolio – CA Global Portfolio – SA Global Portfolio – UK Group Finance Group Marketing Gender <30 30–50 >50 Total % Count % Count % Count Count Group Operations Female Male Female Male Not Declared Female Male Other Not Declared 4.72 1.83 11.97 14.67 100 11.56 6 4 59 137 1 207 100 40 66.14 70.18 100 65.72 67.24 100 5 4 84 153 1 324 628 1 60 29.13 27.98 22.31 18.09 6 37 61 110 169 5 10 127 218 1 493 934 1 1 67.04 1,200 21.40 383 1,790 Regular Fixed Term Contractor Total 900 49 40 0 19 31 137 19 570 3 1,766 16 0 0 0 1 0 7 0 0 0 24 15 0 3 79 0 0 1 0 10 0 931 49 43 79 20 31 145 19 580 3 108 1,900 Grand Total Group Risk Group Technology Innovation Leadership People Platform Super Transformation & Strategy Female Male Not declared Female Male Female Male Female Male Female Male Not declared Female Male Female Male Female Male Not declared Female Male Female Male Female Male Female Male Female Male Female Male Female Male Female Male 14.02 13.95 13.68 100 12.37 10.31 13.44 18.18 10 20.59 8.70 12.07 5.26 9.60 8.06 10.22 4.88 8.33 8 6.25 11.11 11.76 14.71 9.09 5.17 66.67 1.82 24 22.73 33.33 23.26 5.56 36 11.66 8.66 14.10 33.33 50 11.56 45 12 32 1 35 10 25 8 1 7 10 7 3 43 10 33 2 2 2 1 1 8 5 3 3 2 1 6 5 1 10 1 9 33 11 22 2 2 207 71.03 65.12 73.50 72.44 76.29 70.43 56.82 70 52.94 71.30 68.97 73.68 65.40 64.52 65.63 100 68.29 82.35 58.33 84 87.50 77.78 63.24 58.82 66.67 100 87.50 83.33 100 82.76 33.33 85.45 90 100 88.89 41.67 75 25 72 77.27 33.33 51.16 72.22 36 56.89 51.97 60.90 50 50 50 66.93 228 56 172 205 74 131 25 7 18 82 40 42 293 80 212 1 28 14 14 21 14 7 43 20 22 1 7 5 2 48 1 47 9 1 8 5 3 2 18 17 1 22 13 9 161 66 95 3 1 2 1,198 14.95 20.93 12.82 15.19 13.40 16.13 25 20 26.47 20 18.97 21.05 25 27.42 24.15 26.83 17.65 33.33 8 6.25 11.11 25 26.47 24.24 12.50 16.67 12.07 12.73 10 11.11 58.33 25 75 4 33.33 25.58 22.22 28 31.45 39.37 25 16.67 50 48 18 30 43 13 30 11 2 9 23 11 12 112 34 78 11 3 8 2 1 1 17 9 8 1 1 7 7 1 1 7 1 6 1 1 11 4 7 89 50 39 1 1 21.51 385 321 86 234 1 283 97 186 44 10 34 115 58 57 448 124 323 1 41 17 24 25 16 9 68 34 33 1 8 6 2 58 3 55 10 1 9 12 4 8 25 22 3 43 18 25 283 127 156 6 2 4 1,790 Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGSocial 32 Social Board diversity: gender & age 4 3 42.8% Female Board representation 0 0 0 0 <30 30–50 >50 Female Male Ratio of basic salary & remuneration of females to males** Location APAC North America UK & Europe* South Africa (*) UK & Europe includes Tunisia employees. (**) Based on average salary across gender. Parental leave statistics by gender Employees that were entitled to parental leave Employees that  took parental leave <30 1:1.08 1:0.80 1:1.17 1:1.05 30–50 1:1.12 1:1.16 1:1.12 1:1.29 >50 1:1.46 1:1.64 1:1.07 1:1.28 Employees that returned to work in the reporting period after parental leave ended Employees that returned to work after parental leave ended that were still employed 12 months after their return to work* Female 562 1,079 Male 1,641 44 Female 40 Male 84 33 Female 45 Male 78 13 Female 30 Male 43 (*) Calculated using figures of people who took parental leave in 2022. Return to work and retention rates of employees that took parental leave** Female Male Retention rate 90% 97% 55% (**) Calculated using figures of people who took parental leave in 2022 and were still employed after 12 months. 33 Community and industry engagement Industry support and engagement Iress is committed to keeping our clients connected and informed when it comes to relevant industry matters and the support available to them. In 2023 we hosted a series of events for the Superannuation, Wealth and Trading communities in Australia, featuring industry experts. Iress also played host to the first‑ever FISD event in Melbourne, bringing the financial information industry together in October. In December, we hosted our annual Super Efficient superannuation conference in Melbourne, with leaders from across the superannuation industry coming together to discuss innovation, best practice, and the delivery of better retirement outcomes for all Australians. In the UK, our popular Exchange Protection Forum continues to gather partners and providers in the industry to discuss the latest developments impacting the intermediary market. Iress also sponsored multiple industry conferences in 2023 across APAC, South Africa and the UK. We also supported and attended a number of charity and industry awards events. Launch of Advisely – financial advice industry community of best practice In November 2023, Iress launched Advisely, a community of best practice with tools, insights and news to help financial advisers and practitioners to benchmark their operational efficiency across key advice dimensions, while connecting and learning from peers and experts on how to improve. The genesis of Advisely stems from Iress’ 2023 Advice Efficiency survey which highlighted a significant gap between ‘high performing’ financial advice providers and the average – amounting to as much as four hours difference per client, per annum. In helping advisers become more efficient, Iress also has an opportunity to help improve affordability of advice for all Australians. Upfront podcast Following the success of Series 1 in 2022, the second series of Iress’ award‑winning podcast, Upfront, was released. The podcast continues to pose thought‑provoking questions about the financial services industry’s purpose with episodes on responsible investing, ethics and Artificial Intelligence, diversity, equity, inclusion and mental health. Since its launch, Upfront has had over 90,000 downloads. Recent benchmarking data from Omny Studio puts Upfront in the top 10% of all global podcasts. Upfront is available on all major podcast platforms. Iress People Conference: ‘Game On’ In October Iress held three employee conferences in central locations around the world: London, Johannesburg and Melbourne. The purpose of the event was to illuminate outside perspectives on key trends influencing our markets, clients, people and technology, inspire confidence in Iress’ future direction, and connect our people to Iress’ refreshed strategy. 1,490 people attended across locations with positive sentiment highlighting the value of hearing from leaders, hearing from industry experts and connecting with colleagues. Industry Risk Notable high-risk categories Repairs & maintenance Computer & communication equipment Utilities & electricity Furniture & office equipment Telephones & mobiles Software expenses Modern slavery Iress is committed to better understanding and more effectively managing the risk of modern slavery within our operations and supply chain. Iress released its third Modern Slavery Statement in June 2023 in accordance with the Modern Slavery Act 2015 (UK) (a UK Act) and the Modern Slavery Act 2018 (Cth) (an Australian Act). This statement is available on Iress’ website and the Australian Border Force Modern Slavery Portal. In 2023 we engaged a human rights consultancy to support risk identification across operations and supply chain as well as assess due diligence and remediation mechanisms. Across the full scope of Iress’ supply chain, the following spend categories were noted to be high risk for modern slavery and potential human rights violations. Key priorities to address Modern Slavery risk and human rights toolkit development include: • Category management plans: covering merchandise, labour hire and electronics. • Modern Slavery Governance: key business stakeholders to be onboarded and engaged in the newly formed Supplier Council. • Strengthening due diligence: develop efficient and credible processes and methods for supplier due diligence. • Improving supplier engagement: create a structured process for engagement around meeting appropriate standards and improve the Supplier Code of Conduct by aligning it with UNGPs and relevant industry initiatives. • Conducting third party audits and disclose outcomes: go beyond self‑assessment and request high‑risk suppliers undertake third party verification audits and publish the audit results transparently. • Strengthening remediation procedures: implement effective grievance mechanisms. Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGSocial34 Social 35 Supply chains Iress has over 1,600 suppliers across technology infrastructure, software, facilities management, banking services providers and outsourced service providers for various disciplines, as well as professional consultants in finance, legal, marketing and communications disciplines. Critical suppliers are defined as those that: • Perform a task on behalf of Iress or a customer • Perform or provide a product that is essential to the business continuity of Iress • Represent the most significant supplier spend. Iress is committed to upholding stringent procurement practices, ensuring adherence to both core‑selection, best‑practice criteria and stakeholder expectations. The criteria includes a number of technical, legal, operational, and sustainability factors against which suppliers are assessed. Iress does not engage a supplier unless they meet this criteria. This process of assessment ensures that suppliers are both suitable and meet the objectives contained in Iress’ various policies, including the Supplier Code of Ethics Policy. Our Supplier Code of Ethics Policy outlines the expectations of Iress’ suppliers to share the values set out in the Code. The Code applies to all suppliers engaged by Iress, being any third party organisation which provides goods and services to Iress. Suppliers are also expected to ensure that their supply chain, including sub‑contractors, adheres to the Code. Our Supplier Code of Ethics and Sustainable Procurement Policy, which applies to all suppliers, are available online. As part of improved oversight on our supply chain we intend to further understand and collect information on the environmental impact of our suppliers. Our Code of Ethics and Conduct Policy guides our people and suppliers on corruption and bribery as well as e‑learning and training. In 2023 we: • Increased our use of social enterprise and Indigenous owned businesses for our catering provision, and for the electronic waste recycling. • Further enhanced our onboarding process that captures information across additional categories of ESG and engages due diligence across Iress Legal, Procurement, Information Security, and Accounts teams. • Enhanced the real‑time monitoring of all non‑government suppliers, including financial stability, adverse media (environmental, labour, health & safety, ethical & regulatory media), sanctions, and company sustainability credentials. This was done by improving the market data vendors used to source this information. • Undertook further vendor segmentation work to deep dive into areas of potential modern slavery risk by using categorisation around vendor place of activity, more specific product code analysis. In 2024, we aim to: • Further consolidate the office lease footprint globally, where appropriate relocating to smaller and more energy efficient office locations. • Further expand the use of recycled and sustainably sourced materials for office fitout and furniture requirements (see the case study regarding our recent work in this area in our Cape Town office). • Implement enhanced supplier questionnaires for the supplier categories identified as having heightened modern slavery risk in our 2023 segmentation deep dive activity. Social procurement in South Africa: Broad-based Black economic empowerment (BBBEE) BBBEE stands as a pivotal element in the South African Government’s strategy for transformation. Envisioned as a mandated initiative, it aims to tackle the persistent repercussions of the apartheid system. This program actively advocates for increased economic involvement of Black individuals, women, people with disabilities, and youth within the broader economy. BBBEE has different components, and includes Enterprise and Supplier development. This measures the extent to which entities buy goods and services from empowering suppliers with strong BBBEE recognition levels. Supplier and enterprise development initiatives intend to assist and accelerate growth and sustainability of enterprises owned by Black people (African, Coloured, Indian and Chinese). Iress’ performance is audited and final audited results for 2022 are applicable for the period January 2023 to December 2023. Iress scored 90.4% (45.2 out of 50 points which is down on the prior year of 46.4) on this metric. Preferential Procurement The Preferential Procurement metric measures the percentage of an entity’s expenditure with an empowering supplier that is recognised as BBBEE expenditure, depending on that supplier’s BBBEE level. Iress scored 80.89% of the total measured points including bonus points. This position is lower than the prior year of 85% due to a one‑off office revamp project. We continue to maintain Iress Enterprise Development program (ED) beneficiaries into the supplier pipeline to allow them to participate in the procurement process. Iress earns 100% of the points available. The Iress ED program makes a monetary and non‑monetary contribution to develop businesses that are owned by Black people. The target for ED is 3% of net‑profit after tax, which for 2023 was estimated at $44,800 (FY2022 $51,000). The Iress Supplier Development (SD) program The Iress Supplier Development (SD) program is on a contribution basis made available to Iress’ Black‑owned suppliers, who are mostly small entrepreneurial businesses. Iress earns 100% of the points available. The target for SD is 2% of net‑profit after tax for 2023, which is estimated at $32,000 (FY2022 $34,000). In 2023, we made financial contributions to the following organisations: • MalediFresh (Fresh fruit supplier): We provided fencing to enable protection from vandalism that disadvantaged the business last year. • Akunamillio (Fire services): We enabled additional deployment of teams as the business has grown. • Lucky Time (BBBEE Admin provider): We supported training and specialist skills development. In 2023, our ED program contributions included support for: • Vezi Solutions (IT hardware): We supported this existing supplier to refresh their hardware. • Digital Cloud (Marketing): We supported this supplier to refresh their hardware and software. • Polelo, who provide ed‑tech support as part of the “Jendamark/Odin Education” ecosystem which is a youth education program for learners at previously disadvantaged rural schools. Iress’ support will enable improvement of the tech stack. • Stin Technology, for the acquisition of equipment and training to enable further expansion of their business. • Abottech, a software development company where Iress funding will replace end of life equipment to enable business development. Suppliers by country Australia United Kingdom United States New Zealand 59.9% 16.5% 0.9% 0.6% 222 128 55 9 France South Africa Canada Singapore 11.3% 4.5% 4.3% 1.2% 85 416 23 16 Hong Kong Ireland Netherlands Germany 0.4% 0.2% 0.2% <0.1% 15 7 5 4 (location based on business operating address) Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGSocial36 Governance 2023 key achievements • Continued to embed our revised risk management framework to support our desired risk culture 37 2024 key objectives Continuing from the 2023 Strategy, the Global InfoSec team will continue to focus and develop the following areas: • Security Training and Awareness: foster a security‑aware culture and communicate security policies and procedures in order to effectively and safely deliver our operational effect. • Governance, Risk and Compliance: ensure robust governance of our systems and product delivery to ensure compliance with industry specific standards and address security risks and vulnerabilities. • Cyber security Monitoring and Incident Response: monitor cyber security threats and respond to security incidents to proactively defend the business from threat. Relevant UN SDGs Iress believes that maintaining a high standard of corporate governance is essential to sustainable long-term performance and value creation for shareholders, stakeholders and the communities in which we operate. Iress operates under a well-established corporate governance framework that is regularly reviewed by our Board. The governance practices in place reinforce and affirm Iress’ obligations pursuant to the Corporations Act 2001 (Cth) (Corporations Act), the Australian Securities Exchange (ASX) Listing Rules and other applicable laws and regulations. Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGGovernance38 Governance Iress’ Constitution also reflects many of these corporate governance mechanisms to ensure, amongst other things, prudent decision making and appropriate oversight. Furthermore, Iress’ Board Charter sets out the functions and responsibilities of the Board with respect to Iress Limited and its subsidiaries (the Group). The Board Charter is intended to supplement the description of the Board’s responsibility set out in the Constitution. The Board has ultimate responsibility for approving strategy and setting policy regarding the business and affairs of the Group. Iress’ Board is committed to complying with the ASX’s Corporate Governance Council’s Corporate Governance Principles and Recommendations issued from time to time by the ASX Corporate Governance Council. During 2023, Iress complied with each of the Corporate Governance Principles (4th Edition), as set out in the 2023 Corporate Governance Statement. Governance structure The Board’s responsibility includes overseeing the Company’s strategy, policies, processes and performance in relation to ESG matters. The risk management function of the Board is overseen by the Audit & Risk Committee, which is responsible for, amongst other things, ESG at Iress. In 2023 due to the company‑wide restructure, operational responsibility for ESG moved from the Legal function to Corporate Affairs & Marketing. The Chief Corporate Affairs & Marketing Officer is now the risk owner for ESG risks, with support from the Chief Risk Officer who has responsibility for reviewing all material risks annually. In addition, the Chief Operating Officer is the appointed Leadership Team ‘Climate Sponsor’ and accountable for ensuring information flows to the ARC through bi‑annual board papers. Risk management As a global technology company and licensed financial services business, the dynamic market and business in which Iress operates has evolved, and will continue to do so. Accordingly, a robust, consistent and effective risk management framework which proactively identifies, manages and mitigates risks is essential for the ongoing success of Iress. In 2023, we further enhanced our risk management framework, which is underpinned by the principles outlined in ISO 31000: 2018 – Risk Management Guidelines. Risk governance structure All people at Iress have a responsibility to integrate risk management practices into their day‑to‑day business activities to support the achievement of Iress’ strategic goals and objectives. The following governance structures are in place and provide oversight of the effective operation of our risk management strategy and framework: • The Iress Board is responsible for demonstrating leadership and commitment to enable a positive risk culture, including approving Iress’ risk management strategy and framework, establishing appropriate governance structures for risk oversight, determining organisational appetite for risk, and ensuring appropriate policies and procedures are in place to oversee and manage risk. The risk management function of the board is performed by the Audit and Risk Committee (ARC), the composition, roles and responsibilities of which are set out in the ARC Charter. The ARC is responsible for ensuring Iress has a structured and comprehensive risk management system in place and amongst other things, monitoring material changes to the Company’s risk profile and making recommendations in relation to changes that should be made to the Company’s risk appetite. • The Executive Risk Committee (ERC) reports to the ARC on Iress’ key risks and the application of the risk management framework, specifically the extent to which it believes risks are being adequately managed. Cyber security and data protection Data privacy and security In 2023, a Data Governance Council (“DGC”), with cross‑ functional representation, was formed to further enhance governance of data management in the organisation. The DGC has since released an artificial intelligence (“AI”) policy, data ethics policy, and approved AI list to the organisation. In addition to the formation of the DGC, there have also been two privacy appointments working collaboratively to continually uplift the organisation’s privacy program including the recent revision of the internal global data breach register and privacy impact assessment (“PIA”)/data protection impact assessment (“DPIA”) process. Certifications and standards Iress continues to be proactive in gaining and maintaining internationally recognised Certifications. We renewed ISO 27001 globally in late 2023, but are committed to expanding the volume of Certifications by certifying each business unit independently throughout 2024 increasing the auditing and external verifications process. Additionally, we are well advanced with achieving the SOC 2 Certification Standard in the Wealth Management business unit having undergone a readiness assessment and SOC 2 Type 1 audit with Ernst & Young, our objective is to achieve this by early 2024. 39 Memberships and partnerships Global FISD (Financial Information Services Association of SIIA) FIX Trading Community The Software & Information Industry Association (SIIA) Australia ASFA Affiliation of Superannuation Practitioners (ASP) ATO APRA Funds Operational Insights Report Design Working Group ATO Online Superannuation Screens Communications Working Group ATO SMSF Rollovers Design Group ATO Super Administration Stakeholder Group (SASG) ATO Superannuation Data Standard Technical Group (SDSTG) ATO SuperStream Implementation Working Group ATO Technical Services Working Group (TSWG) Australian Custody Services Association (ACSA) Financial Executive Women (FEW) Financial Executives Institute (FEI) Financial Services Council of Australia (FSC) Stockbrokers and Investment Advisers Association (SIAA) The Association of Superannuation Funds of Australia (ASFA) Women in Super (WiS) Canada Canadian Security Traders Association (CSTA) Investment Industry Regulatory Organisation of Canada (IIROC) (Market Rules Advisory Committee and LEI Implementation Committee) Portfolio Management Association of Canada (PMAC) New Zealand Financial Advice New Zealand FinTechNZ South Africa SA Securities Lending Association (SASLA) United Kingdom Association of Mortgage Intermediaries (AMI) Building Societies Association (BSA) Income Protection Task Force (IPTF) Intermediary Mortgage Lender Association (IMLA) ORIGO (Industry Standards Body for Life and Pensions – UK) The Personal Investment Management and Financial Advice Association (PIMFA) Data protection impact assessments We undertake data protection impact assessments to look at how and where we process data across our business, and we seek to take a best practice review of data above the defined statutory requirement to instigate such assessments. This process ensures privacy risks are appropriately considered and mitigated to ensure compliance with applicable legal and regulatory requirements. In 2023, we completed multiple data protection impact assessments, launched a new template and began implementing improved tracking and review of these assessments. Supplier security assessments Iress robustly manages suppliers through a well documented procurement due diligence process. The Information Security team assesses each and every supplier for cyber risk as well as scores and monitors suppliers via external monitoring tools (such as Upguard) for real‑time changes that may increase cyber risk. Security awareness and training Iress recognises that our people are our best cyber defence and we have invested significantly in awareness training. In 2023, we updated our Acceptable Use Policy to align with contemporary expectations and this has been sent to all users (including contractors and third‑party business partners) as a mandatory read and acceptance which we also record. We continue to conduct yearly training in our online platform with several cyber modules with completion rates for 2023 currently at 98.7%. Responsible and ethical business practices At Iress, we maintain and report against a set of stringent corporate principles. A summary of our key corporate governance documents is outlined below, each of which is available on our website. Tax transparency In 2023, we published our fourth annual tax transparency report detailing our tax contribution, tax governance and strategy, and international related party dealings for the 2022 financial year. The report was prepared in accordance with the guidelines set out in the voluntary Tax Transparency Code (TTC) recommended by the Australian Board of Taxation and endorsed by the Australian Treasury. Whistleblower protection Iress’ whistleblower policy applies to all Iress people, including part‑time and casual employees, officers, agency workers, contractors and suppliers and their employees (where relevant) and is subject to applicable laws as they apply to the local Iress entity. It encourages people to report any suspected reportable conduct with the knowledge that their concerns will be taken seriously, appropriately investigated, and that their confidentiality will be respected. It also provides people with guidance around how to raise concerns and reassures people that they can raise any concerns and complaints of reportable conduct without fear of discrimination, intimidation, disadvantage or reprisal. Iress LimitedStrategic ReportFinancial ReportAnnual Report 2023ESGGovernance40 Iress leadership Our greatest asset at Iress is our people. Supporting them is a leadership team committed to achieving Iress’ mission to go beyond, act smart and win together. 41 Marcus Price Chief Executive Officer Cameron Williamson Chief Financial Officer Harry Mitchell Group Executive, Wealth & UK Ana Smith Chief Transformation & Strategy Officer Jason Hoang CEO, Trading & Market Data Paul Giles CEO, Superannuation Kelli Willmer EGM APAC Wealth Kelly Fisk Chief Corporate Affairs & Marketing Officer David Hentschke Chief Innovation Officer Justin Schmitt Chief Operating Officer Julia McNeill Chief People Officer Chris Donlon Acting Chief Technology Officer Charissa Astley-Turner Chief Risk Officer Additional LT members: Ian McKenna Chief Information Security Officer Eric Kuah Chief Global Market Data Officer Iress LimitedStrategic ReportESGFinancial ReportAnnual Report 202342 Board of Directors Roger Sharp Independent Non-Executive Director (since February 2021) Chair (since May 2021) Roger has more than 30 years’ global experience in markets, technology and governance. He has advised, built, run and chaired a number of technology companies. Roger’s current governance roles include chairing Webjet Limited (director since January 2013 and Chair since 21 June 2017) and the Lotteries Commission of New Zealand (Chair since 1 July 2020). He is also the founder of boutique technology investment bank, North Ridge Partners and the founder of Whakatipu Hangarau Trust, a not‑for‑profit trust whose mission is to build a world‑class technology sector in Queenstown Lakes District, New Zealand. His past executive roles included Global Head of Technology and CEO of Asia Pacific Securities for ABN AMRO Bank. Marcus Price Managing Director and Chief Executive Officer (since October 2022) Marcus Price has over 25 years’ experience building, leading and managing teams in the financial services and technology sectors. Mr Price was the founding CEO of Property Exchange Australia (PEXA) for over nine years, from May 2010 to December 2019. From its beginnings as a start‑up, Mr Price oversaw PEXA’s growth into a company capturing more than 75% of all property transactions in Australia, with a valuation of $1.6bn upon its trade sale in 2018. Prior to this, Mr Price held senior positions with NAB, the Boston Consulting Group, Certane Group and previously served as Chief Executive Officer and Managing Director of businesses for Equifax and Dun & Bradstreet. Mr Price was a Director of Credit Clear Limited from November 2020 to November 2022. Julie Fahey Independent Non-Executive Director (since October 2017) Chair of the People and Performance Committee (since February 2020) Julie has over 30 years of experience in technology, including in major organisations such as Western Mining, Exxon, Roy Morgan, General Motors and SAP, covering consulting, software vendor and chief information officer roles. In addition to her industry experience, Julie spent 10 years at KPMG as a partner with the firm, during which time she held roles as national lead partner telecommunications, media and technology, and national managing partner – markets. Julie was also a member of the KPMG National Executive Committee. Julie is currently a member of the Board of Datacom Group, and Australian Red Cross LifeBlood. Julie is also currently a Non‑Executive Director of Australian Foundation Investment Company (appointed April 2021) and was a Non‑Executive Director of Seek Limited from July 2014 until November 2023. Niki Beattie Independent Non-Executive Director (since February 2015) Niki has more than 30 years’ experience in financial technology and capital markets. She currently runs Market Structure Partners, a strategic consulting firm for financial market participants and policy makers. Prior to that she spent more than a decade in senior positions at Merrill Lynch International. She is currently Chair of ClearToken, a clearing house for digital assets and a Director of the Financial Markets Standards Board, FMSB, a member‑owned, international standards setting body. She was previously Chair of privately owned XTX Markets, a quantitative market maker and of Aquis, a listed pan European exchange and technology business as well as a Board Director of Kepler Cheuvreux UK Ltd, a French brokerage firm, MOEX, the Moscow Exchange and Borsa Istanbul, the Turkish exchange. She also spent 12 years on the Secondary Markets Advisory Committee for the European Securities Markets Authority and six years on the Regulatory Decisions Committee of the UK’s Financial Conduct Authority. Trudy Vonhoff Independent Non-Executive Director (since February 2020) Chair of the Audit & Risk Committee (since May 2021) Trudy has over 20 years’ experience in retail banking, financial markets and investment. She is currently a director of Credit Corp Group Limited (since September 2019), Cuscal Limited (since April 2019) and Australian Cane Farms Limited (since April 2021). Previous directorships include AMP Bank, A2B (Cabcharge), Ruralco Holdings Limited, Tennis NSW and the Westpac Staff Superannuation Fund. For 13 years Trudy held senior executive roles at Westpac and AMP across retail banking, finance, risk, technology & operations, and agribusiness. Michael Dwyer AM Independent Non-Executive Director (since February 2020) Anthony Glenning Independent Non-Executive Director (since October 2022) Michael has over 35 years’ experience in superannuation and investment, including 14 years as CEO of First State Super. He is a director of the Global Advisory Council of Tobacco Free Portfolios and the Sydney Financial Forum. Since 1998 Michael has also been a director and subsequently Chair and now Patron of Australia for UNHCR, the private sector partner of the UN Refugee Agency. He is a life member of ASFA (Australia’s superannuation industry association) and the Fund Executives Association. After serving as a director, on 31 August 2020 Michael was appointed as the Chair of TCorp (New South Wales Treasury Corporation). He is also a member of the ASIC Consultative Panel, Chair of MSquared Capital Advisory Committee and member of the Hope Housing Advisory Committee. Mr Glenning has over 25 years’ experience in the software industry, 14 of those living and working in Silicon Valley. He is currently the fund manager for Skalata Ventures, leading the investment into early‑stage companies and helping them scale and grow into significant and sustainable businesses. He is also a non‑executive director of Pro Medicus Limited (ASX.PME) since May 2016, a leading provider of enterprise medical imaging and practice management software, and Austco Healthcare Limited (ASX.AHC) since September 2018, an international provider of healthcare communication and clinical workflow management solutions. In 1999, Mr Glenning founded Tonic Systems, a web application development company which he built up over eight years and sold to Google in 2007 as part of the Google Docs suite of products. He worked with Google post‑ acquisition where he was a senior software engineer for two years. From 2010 to 2018, Mr Glenning was an investment director for Starfish Ventures, based in Melbourne, a venture capital firm specialising in Australian high‑growth technology businesses, and during that time held directorships at Aktana, Atmail, DesignCrowd, MetaCDN and Nitro Software. 43 Michael Bowan Company Secretary Michael joined Iress in October 2023, on an interim basis while Iress commences a search for a permanent replacement. He has a BA/ LLB (Hons) from the Australian National University and has been admitted as a solicitor in NSW for more than 30 years. Michael has long‑standing executive experience in banking and energy, including eight years as General Counsel and Company Secretary of a listed bank, six years as General Counsel and Company Secretary of the regional NSW electricity distributor and six years as Chief of Staff to a major Australian bank’s CEO. Iress LimitedStrategic ReportESGFinancial ReportAnnual Report 202344 Material business risks 45 The material business risks that have the potential to impact Iress’ financial position, future financial results, operations and the success of our strategy are outlined below, together with mitigating actions undertaken to minimise these risks. Climate change risk (and ESG more broadly) forms a part of Business Operations risk and is also addressed separately in Iress’ ESG Report. Risk Nature of risk Mitigating actions Risk Nature of risk Mitigating actions Strategic Risk The risk that Iress does not meet its strategic objectives. Transformation Risk The risk that Iress does not successfully execute on its transformation agenda. Financial Risk (including foreign exchange, interest rate, funding and liquidity) The risk that Iress is unable to meet its financial obligations, incurs losses from failure of counterparties paying their debt, losses from unexpected changes in market rates and prices or impairment of assets. Legal and regulatory risk The risk of legal or regulatory sanction/loss from failure to comply with our contractual requirements, licensing, laws and regulations. Iress has established strategy planning processes that appropriately consider strategy determination through investigation and analysis, consideration of competition risks, as well as any potential structural changes in the markets that we operate in. Iress’ Group Strategy team partners with external experts, as appropriate, to provide additional support and governance. Group and Business Unit strategic plans are endorsed and overseen by the Leadership Team and the Board. Iress seeks to manage and mitigate risks associated with the execution of business transformation initiatives linked to its strategic objectives. These initiatives are designed to pursue growth opportunities that are likely to deliver significant shareholder value in a reasonable time frame. Iress’ Transformation Office, with assistance from external experts, provides project management disciplines and governance oversight. Progress and delivery against agreed milestones are tracked through an industry‑recognised system, with key metrics and reporting overseen by the Leadership Team and the Board. Iress aims to manage its material financial risks in accordance with the Board‑approved Treasury Policy. Iress mitigates foreign exchange risk associated with its international operations by funding these investments in the local currency. Foreign currency transaction risks can be hedged, where appropriate. Iress does not hedge translation risk on foreign currency earnings. Iress aims to manage its material Legal and Regulatory Risks in accordance with applicable laws, commercial principles as they apply to our contractual obligations and corporate governance principles. Additionally, Iress has dedicated Legal and Compliance teams who oversee the management of regulatory requirements and the implementation of regulatory change across the Group. These teams also closely monitor regulatory developments globally and remain proactively engaged with relevant regulatory bodies and policy makers across the jurisdictions in which we operate. Technology and Information Security The risk of an event or events occurring which may result in Iress’ or Iress’ client’s information being unavailable, lost, stolen, copied or otherwise compromised with adverse consequences for the business (legal, regulatory, financial, reputational or other). Iress seeks to proactively manage its material technology and information security risks in accordance with the Board‑approved Information Security Strategy and information security standard ISO 27001, whilst maintaining strong alignment with recognised industry and organisational frameworks. Iress endeavours to maintain a highly skilled team of technology and information security professionals. Information security risk is overseen by a dedicated global information security function, led by the Chief Information Security Officer, who is responsible for ensuring appropriate systems and processes are in place, in line with Iress’ Information Security Strategy. Executive‑level oversight is provided via the Executive Risk Committee, while material information security risks and issues are also escalated to the Board Audit & Risk Committee for oversight. Iress’ Global Information Security Management System (ISMS) is independently certified to meet the global ISO 27001 standard. Business Operations Risk The risk impacting day‑to‑day operations of Iress, including business disruption events, failure of internal processes and systems, failure of material supplier fulfilment, damages resulting from mismanagement of data and financial crime. Iress aims to minimise its material Business Operations risk through robust systems, efficient processes and effective controls. Iress’ Business Continuity and Disaster Recovery Plans are tested, updated, and reviewed on an annual basis. The testing ensures that access to critical systems, including backup environments, are restored and disruption minimised. Iress’ material third party suppliers are onboarded with sufficient due diligence and are subject to ongoing monitoring and oversight. People and Culture Risk The risk resulting from people‑related risks impacting the delivery of our strategy. Iress aims to manage its material People and Culture risks in accordance with approved People policies, which set the expectations and guide the behaviour of our people and the company. Iress endeavours to retain key individuals with the skills required to fulfil our strategic objectives. Iress LimitedStrategic ReportESGFinancial ReportAnnual Report 202346 Financial Report 47 Operating & Financial Review For the year ended 31 December 2023 Operating & Financial Review Operating revenue Operating expenses Underlying EBITDA Net Profit After Tax 2023(1) $m 625.7 (497.4) 128.3 (137.5) 2022 $m 615.6 (469.2) 146.4 52.7 2023 vs 2022 2% 6% (12%) (361%) (1) Iress results above are shown on a reported basis using foreign exchange rates applicable through the year. On a constant currency basis and applying the 2022 foreign exchange rate to compatible 2023 results, the impact is negligible and would result in a $0.4m increase to 2023 Underlying EBITDA. Earnings and dividends per share Basic earnings per share Dividends per share APAC Trading and Global Market Data APAC Wealth Management Superannuation Managed Portfolio – UK Managed Portfolio – Other Total group 2023 Cents per share 2022 Cents per share (76.4) – 28.6 46.0 Operating revenue(1) Underlying EBITDA (2)(3) 2023 $m 178.5 130.4 54.2 167.9 94.7 625.7 2022 $m 174.4 132.7 49.9 159.0 99.6 615.6 2023 vs 2022 2% (2%) 9% 6% (5%) 2% 2023 $m 40.5 47.2 (2.5) 34.7 8.4 2022 $m 45.0 55.1 1.3 35.5 9.5 128.3 146.4 2023 vs 2022 (367%) (100%) 2023 vs 2022 (10%) (14%) (292%) (2%) (11%) (12%) (1) Operating revenue for each segment captures revenue generation directly attributable to that segment. (2) Underlying EBITDA for each segment represents segment operating revenue less direct expenses associated with operating the segment and indirect expenses from corporate functions providing scale benefits across the Group which have been allocated to segments using functional drivers. (3) New segments commenced effective 1 July 2023 with historic information for 2022 and 1H23 restated to pro‑forma when operating under prior segments across the Iress Group. Operating revenue Operating revenue in 2023 was $625.7m, a 2% increase over the previous year. The increase was substantially attributable to the Superannuation and Managed Portfolio – UK segments, while there was a decline in the Managed Portfolio – Other segment on the back of the sale of the Managed Fund Administration business on 1 October 2023. Underlying earnings before interest, tax, depreciation and amortisation (EBITDA) Underlying EBITDA, the Group’s preferred business performance measure, decreased 12% to $128.3m over the year as a result of an increase in costs. Inflationary pressures were evident in both employee and non‑wage opex, with pay rises and third‑party input costs contributing to margin pressure. Iress undertook significant restructuring initiatives to arrest cost growth momentum which included a reduction in the number of full time equivalent employees (FTE’s) by 21% (15% when MFA is excluded). APAC Trading & Global Market Data Revenue for APAC Trading & Global Market Data increased 2% over the course of the year to $178.5m. This was achieved despite a challenging trading environment which saw equity trading volumes 30% lower than 2022 and notable consolidation across the industry. At the same time many clients remained cautious in the inflationary operating environment leading to subdued new business wins through the year. Costs were higher reflecting the ongoing investment in people, infrastructure and technology necessary to support customer service delivery. APAC Wealth Management Revenue for APAC Wealth Management decreased by 2% in 2023 mainly due to a reduction in non‑recurring revenue as client projects and transitions completed. Operating costs were higher, largely a result of salary inflation and initiatives to improve the user experience of Xplan. The business executed a program of cost reduction and pricing discipline initiatives which offset some of these headwinds. Superannuation The Superannuation business grew revenue by 9% with increased demand for consulting services, contract renegotiations and new client wins including two newly merged entities. The business also saw an increase in costs from salary inflation, restructuring activity and notable remediation projects. Managed Portfolio – UK The UK component of the Managed Portfolio grew revenue by 6% in 2023, driven by new client wins across the Sourcing and the Mortgages business lines, while UK Wealth grew as a result of increased project work with enterprise clients. Salary inflation and higher third‑party software costs led to an increase in costs from the prior year. Managed Portfolio – Other Revenue decreased overall in the Managed Portfolio – Other, substantially due to the sale of the MFA business in October. While the Canadian business saw revenue growth, it was partially offset by a reduction in revenue in South Africa. Both the South African and Canadian businesses were prudent on cost management throughout the year. Net Profit after Tax (NPAT) Underlying EBITDA Amortisation, depreciation, derecognition and impairment expense Gains on disposal of subsidiary Non‑operating and significant items(1) Profit before interest and income tax expense Net interest and financing costs Income tax expense Net profit after income tax expense 2023 $m 128.3 (193.4) 17.6 (57.8) (105.3) (21.8) (10.4) (137.5) 2022 $m 146.4 (43.4) – (22.4) 80.6 (12.7) (15.2) 52.7 2023 vs 2022 (12%) 346% – 158% (231%) 72% (32%) (361%) The Group recorded a statutory net loss after tax for the year of $137.5m (2022: $52.7m profit). The significant differences between the Group’s headline Underlying EBITDA measure and the statutory NPAT result relate to the non‑cash amortisation, depreciation and impairment expense, and the Group’s non‑operating and significant items during the year. Non‑operating and significant items substantially relate to project and transformation related expenses that are not deemed to form part of the ongoing cost base of the business and are excluded to provide greater clarity on underlying business performance. Non‑operating and significant items increased this year to $57.8m (2022: $22.4m) and captured the following key items: • Notable one‑off technology uplift projects ($16.9m) • Transformation program expenses ($15.1m) • Transformation led redundancy costs ($13.6m) • M&A related costs ($6.9m) • Other one‑off non‑operating costs ($5.3m). Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportOperational & Financial Review48 Operating & Financial Review (continued) For the year ended 31 December 2023 The non‑cash amortisation, depreciation, de‑recognition and impairment expense increased from $43.4m in 2022 to $193.4m. This was notably impacted by an impairment of $130.4m on the UK goodwill carrying value which was written down in the first half of the year. A number of capitalised software intangible assets were also de‑recognised during the year resulting in an additional $13.3m write‑down. During the year, Iress sold the Managed Funds Administration (MFA) business for proceeds, after purchase price adjustments, of $50.5m with $5m remaining in escrow for a period of 12 months. A $17.6m gain on the sale has been recognised with proceeds from the sale used to retire debt. Net interest and financing costs increased by 72% to $21.8m through the year ($2022: $12.7m). This was primarily driven by higher average debt levels over the course of the year and markedly higher interest rates on the floating rate part of the borrowings. Statement of Financial Position Cash and cash equivalents Intangible assets Other current and non‑current assets Borrowings Other current and non‑current liabilities Net assets 2023 $m 43.9 550.7 197.6 (363.6) (156.6) 272.0 2022 $m 63.4 725.0 211.7 (388.4) (177.9) 433.8 2023 vs 2022 (31%) (24%) (7%) (6%) (12%) (37%) Cash and cash equivalents reduced by $19.5m or 31%, due to an improvement in cash management processes and working capital requirements. Intangible assets reduced by $174.3m to $550.7m, a 24% decline, primarily due to a write down in the carrying value of goodwill in the UK business of $130.4m. An additional $31.2m of intangible assets were reduced as part of the sale of MFA, while there was a de‑recognition of $13.3m of intangible assets following a strategic review of capital projects in 1H23. During the year $14.1m of internally generated development costs were capitalised, 29% lower than last year (2022: $19.9m). Net debt, as measured by gross borrowings less cash and cash equivalents, declined $5.8m to $320.3m over the year. Net debt peaked at $375.8m at 30 June before declining in the second half of the year as proceeds from the sale of the MFA business and positive free cash flow were used to retire debt. Other liabilities fell 12% to $156.6m through the year, predominantly due to a decrease in lease liabilities of $14.9m as property requirements were resized with lower FTE across the business. Dividends During the year, Iress paused the payment of its 2023 dividend pending the completion of a broader Capital Management Plan. Headline Business Performance Change In 2023, Iress undertook to amend its headline business performance measure from Segment Profit to Underlying EBITDA. This involved the transfer of share based payment expenses, that were previously excluded in Segment Profit, into the cost base as they were considered an important part of employee remuneration. Following the announcement of the transformation program in 1H23, Iress committed to review the way it presented its financial performance and provide enhanced transparency around items not considered part of the ongoing cost base of the business. These have historically been reported as significant and non‑operating items, however without clearly defined classifications. 49 As a result of a recent review, Iress will be changing its headline performance measure to Adjusted EBITDA from 2024. This is represented by Reported EBITDA adjusted for mergers and acquisition items, transformation related costs including costs to achieve such as restructuring and redundancy, and share based payments expense. Adjusted EBITDA is considered to better align with Iress’ business unit accountability and provide improved transparency across Iress’ operating segments. The primary change from Underlying EBITDA is the transition of non‑recurring technology uplift projects back into the underlying cost base of the business. A reconciliation from Underlying EBITDA to Adjusted EBITDA for the year is provided below: Underlying EBITDA Tech uplift & non‑recurring projects – staff costs Other non‑recurring items – Non‑staff costs Adjusted EBITDA 2023 $m 128.3 (16.9) (5.3) 106.1 2022 $m 146.4 (10.6) (5.8) 130.0 2023 vs 2022 (18.1) (6.3) 0.5 (23.9) The Adjusted EBITDA measure will be supplemented with NPATA as an additional business performance measure from 2024. NPATA is represented as Statutory NPAT adjusted for the after‑tax effect of amortisation and impairment of acquired intangible assets; and M&A related gains/losses on the disposal of businesses. NPATA is considered a closer proxy to the free cash flow generation of the business and will be used as the basis for the dividend payout going forward. Capital Management Plan Iress has undertaken a detailed review of its capital management settings in order to provide a robust financial platform to meet strategic goals. The aim of the review was to establish optimal capital settings for a stronger balance sheet, while creating capacity to reinvest back into the business and reward shareholders over time via dividends and capital growth. The review was centred around an optimal level of leverage for the business and appropriate dividend policy, while creating capacity for R&D investment. As a result of the review, Iress is seeking to reduce leverage over the coming year to a targeted range of 1.0‑1.5x EBITDA from the current level of 2.5x. This is to be achieved by the sale of non‑core assets and the retention of free cash flow. The dividend will remain paused until the target leverage range is achieved and at that time will be subject to consideration for recommencement by the Board. The dividend payout will be made out of NPATA with a view to increasing it over time as transformation led activity is completed and the balance sheet is stronger. The level of the dividend will be set having regard to ongoing R&D requirements and capital for other strategic initiatives. Iress believes these capital settings will deliver a stronger balance sheet going forward while balancing profits, capital reinvestment and dividends. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportOperational & Financial Review50 Directors’ Report For the year ended 31 December 2023 The Directors present their report and the annual financial report for Iress Limited (the Company) and its consolidated subsidiaries (together referred to as Iress Group or the Group) for the 2023 Financial Year. Directors The Directors of Iress Limited during the year ended 31 December 2023 and up to the date of this report are set out below: Name Tenure R Sharp M Price N Beattie M Dwyer J Fahey A Glenning T Vonhoff Chair since May 2021 and Independent Non‑Executive Director since February 2021 Independent Non‑Executive Director since July 2022 and Managing Director and Chief Executive Officer since October 2022 Independent Non‑Executive Director since February 2015 Independent Non‑Executive Director since February 2020 Independent Non‑Executive Director since October 2017 and Chair of the People & Performance Committee since February 2020 Independent Non‑Executive Director since October 2022 Independent Non‑Executive Director since February 2020 and Chair of the Audit & Risk Committee since May 2021 Directors’ Meetings The following table sets out the number of meetings of the Group’s Board of Directors and of each Board Committee held during the year ended 31 December 2023, and the number of meetings attended by each Director as a member of the Board or relevant Board Committee. Directors who are not members of a particular Board Committee are entitled to attend meetings in a non‑voting capacity and are given access to all Board Committee papers and minutes. Director R Sharp M Price N Beattie M Dwyer J Fahey A Glenning T Vonhoff Board Meetings Audit & Risk People & Performance Eligible Attended(1) Eligible Attended Eligible Attended 15 15 15 15 15 15 15 15 15 14 15 13 15 15 * * * 4 4 * 4 * * * 4 4 * 4 * * 5 5 5 * 5 * * 5 5 5 * 5 * Not a member of this committee. (1) Where attended meetings are less than eligible, the non‑attended meetings were called on short notice. Principal activities Iress is a technology company designing and developing software and services for the financial services industry. Iress operates across the Asia Pacific, the United Kingdom & Europe, Africa, and North America regions. Operating and Financial Review The Operating and Financial Review (OFR) containing information on the operations and financial position of Iress is set out in the Strategic Report on pages 2 to 9 and the Material business risks and OFR on pages 44 to 49 of this Annual Report. 51 Changes in state of affairs On 1 October 2023, Iress sold its Managed Funds Administration (MFA) business, accounted for in the subsidiary OneVue Fund Services Pty Ltd which was part of the Managed Portfolio – Other segment. As at 1 October 2023, the carrying amount of MFA’s total assets amounted to $35.7 million and the total liabilities amounted to $2.9 million. Gross cash proceeds of $50.5 million were received upon completion of which $5.0 million remains in escrow until 1 October 2024. Other than the above, there was no significant change in the state of affairs of the Group during the financial year. Events subsequent to the Statement of Financial Position date There has been no matter nor circumstance which has arisen since the end of the financial year which has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in subsequent years. Indemnification of Officers & Auditors During the year, the Company paid a premium in respect of a contract insuring each of the Directors of the Company (as named above), the Company Secretary, each of the Executive Officers of the Company, and any related body corporate against a liability or expense incurred in their capacity as a Director, Secretary or Executive Officer to the extent permitted by the Corporations Act 2001. Further details have not been disclosed due to confidentiality provisions in the insurance contract. In addition, the Company has entered into a Deed of Indemnity, which ensures that a Director or an officer of the Company will generally incur no monetary loss as a result of defending actions taken against them as a Director or an officer. Certain actions are specifically excluded, for example, penalties and fines which may be imposed in respect of breaches of the law. To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified amount). No payment has been made to indemnify Ernst & Young during or since the financial year. Audit and non-audit services Details of the amounts paid or payable to the Group’s external auditor, Ernst & Young (2022: Deloitte Touche Tohmatsu) for audit and non‑audit services provided during the year are set out in Note 1.6(b) to the financial statements. Ernst & Young was appointed as auditor on 4 May 2023 and Mr David Petersen commenced as the lead audit partner for the first year ended 31 December 2023. During the year, the auditor performed certain other services in addition to its audit responsibilities. The Board is satisfied that the provision of non‑audit services during the year by the auditor is compatible with, and did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: • All non‑audit services were subject to the corporate governance procedures adopted by the Company to ensure that they do not impact the integrity and objectivity of the auditor. • The non‑audit services provided did not undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants as they did not involve reviewing or auditing the auditor’s own work, acting in a management or decision‑making capacity of the Company, acting as an advocate of the Company or jointly sharing risks or rewards. Auditor’s independence declaration A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 (Cth), is set out on page 82. Rounding of amounts The amounts shown in this report and in the financial statements have been rounded off, except where otherwise stated, to the nearest thousand dollars, the Company being in a class specified in the ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, issued by the Australian Securities and Investments Commission. Corporate governance The corporate governance statement is located on the Iress website: https://www.iress.com/trust/corporate‑governance/corporate‑ governance‑statement/. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportDirectors’ Report52 Remuneration Report For the year ended 31 December 2023 53 Letter from Julie Fahey, Chair of the People and Performance Committee Dear shareholders, On behalf of the People & Performance Committee (PPC), I am pleased to present Iress’ Remuneration Report for the financial year ended 31 December 2023 which sets out the remuneration information for Iress’ Key Management Personnel (KMP). This group covers Executive Key Management Personnel and the Non‑executive Directors (NEDs). For the purposes of this report: ‘Executive KMP’ refers to the Managing Director and Chief Executive Officer (Group CEO) and those Executives considered to have responsibility for planning and directing Iress' operations. As shareholders are aware, this has been a year of substantial change for Iress. The start of our transformation program has had a significant impact on our structure, our KMP and the remuneration framework in 2023. This letter summarises these changes as well as 2023 remuneration outcomes and proposed changes to our Remuneration Framework in 2024. Impact on Structure, KMP and 2023 Remuneration Framework Organisational Structure In July 2023, Iress pivoted from a global functional structure to a product segment Profit and Loss structure. The new structure has provided clearer lines of accountability and allowed for the introduction of performance metrics which focus on sales, account management, customer service and profitability. The new structure also introduced a new leadership team which is reflected in a new KMP group, effective 1 July 2023. The new KMP group continues to include the Group CEO and the Chief Financial Officer, and introduces the Executives accountable for product‑led business units, including Group Executive Wealth & UK, CEO Trading & Market Data, and CEO Superannuation. 2023 Remuneration Changes As highlighted in our 2022 Remuneration report and in subsequent shareholder communications, the Board undertook to review the company’s remuneration framework following the appointment of M Price as Group CEO. Considering feedback from various stakeholders and, in particular, feedback from shareholders regarding the fixed nature of Equity Rights, the Board replaced the 2023 Equity Rights with an at‑risk reward in the form of a Short Term Incentive (STI). 2024 Additional Remuneration Changes The previous Long Term Incentive (LTI) incorporating Performance Rights, is proposed to be replaced by Share Appreciation Rights (SARs) in 2024. SARs are a form of LTI paid out when objectives are achieved and the Iress share price appreciates in value above the option exercise price. Additionally, an STI deferral will be introduced, and Minimum Shareholding Requirements (MSR) will be adjusted to account for historic Equity Rights no longer forming part of executives’ fixed salaries. FY22 Remuneration Framework FY23 Remuneration Framework Proposed FY24 Remuneration Framework Fixed Remuneration Base/Fixed Salary Equity Rights 1 Base/Fixed Salary Base/Fixed Salary Short term at-risk Remuneration Long term at-risk Remuneration STI Commenced (Cash) STI (Cash Deferral) Performance Rights 1 Options – Group CEO 1 Performance Rights 1 Share Appreciation Rights (SARS) (1) Equity Rights, Performance Rights and Group CEO Options vesting is directly aligned to Iress’ 2025 Strategic timeline and will be tested based on the defined hurdles/scheme rules. Financial Performance in 2023 During 2023 Management undertook a significant transformation program, which is progressing well against the strategic undertakings announced to investors in April, with progress on asset sales, the cost base, and the bringing forward of initiatives which has led to improved earnings in the second half of 2023. The shift towards clearer financial reporting is underway, and a new capital management plan sets out a path towards sustainable reinvestment in the business and resuming dividends, which the company took the prudent decision to pause as it focuses on deleveraging the business. Iress incurred a statutory net loss after tax for the 2023 year of $137.5m (2022: $52.7m profit), substantially impacted by a $130.4m write down in the carrying value of UK goodwill (2022: Nil impairment recognised). Non‑operating items also increased to $57.8m (2022: $22.4m non‑operating items), largely related to transformation activities and technology uplift projects which continued from the prior year. The group’s preferred business performance measure, Underlying EBITDA, was $128.3m for the year, a 12% decline from last year. The year has seen revenue growth of 2% across the business (2023 operating revenue of $625.7m) with the earnings decline impacted by higher inflationary costs, both employee and supply side input costs. This trend was evident through the year as we lowered our full year guidance expectations after the half year result. A number of transformation‑led changes were made at the time, including reducing headcount by 15% (excluding MFA, 21% including MFA), which has seen an improved second half performance versus the first half and come in at the upper end of the latest earnings guidance. Executive KMP remuneration outcomes in 2023 As mentioned above, our Executive KMP group was substantially changed, effective 1 July 2023. As part of the move to a new business unit structure, new KMP roles were identified in the new structure. Three new KMP roles were identified representing responsibility for each of the three business units. Two prior KMP remain as part of Iress’ leadership team, and five prior KMP have since departed Iress. Fixed Remuneration in 2023 The new cash STI was introduced and replaced the Equity Rights element of the previous framework to better align individual rewards with both individual business and company performance. The adoption of the new structure provided the opportunity for a market based assessment of base salaries to be undertaken. Rebasing of remuneration across the newly appointed Executives was based on their roles and responsibilities. No increase was awarded to the Group CEO in 2023. Short-term incentive in 2023 The new STI plan replaces the historical time‑based Equity Rights element from the previous framework and seeks to better align individual reward with performance. The Group CEO had a target STI opportunity of 120% of fixed salary (180% maximum) in 2023, with all other Executive KMP having a 60% target opportunity (90% maximum). The opportunities for newly hired/promoted Executive KMP were pro‑rated to align with their start dates. The Group CEO achieved 47% of the maximum STI, and the Executive KMP achieved an average of 43% of the maximum STI. Long-term incentive in 2023 Performance Rights associated with the 2023 long term incentive (LTI) were brought forward and granted in February 2022 to reflect the time horizon of the 2025 strategy. As a result, the performance period was increased to four years, with this tranche eligible to vest in February 2026 (instead of the customary three years) and also incorporates an additional one‑year holding lock. Executive KMP joining the new management team during the 2023 financial year have been awarded a pro‑rata allocation of this tranche as an interim incentive solution while the overall remuneration platform was being reset. These instruments operate under the same terms as other participants. The 2020 and 2021 grants of Performance Rights that were due to vest in February 2023/2024 have experienced a great deal of volatility in share price movements over their performance periods. Although the share price has rebounded off its lows, the absolute Total Shareholder Return (ATSR) measure was not achieved for either instrument, resulting in a 0% vesting for both tranches. Engagement and feedback Iress values the perspectives of our shareholders and stakeholders and encourages an open dialogue. It has been a pivotal year for Iress and we understand and acknowledge the volatility in the company’s share price performance across 2023 and the impact it has had on remuneration outcomes for our executives. This report serves as not only a reflection of our 2023 performance but also as a foundation for future alignment between remuneration and outcomes. We welcome your questions and insights as Iress continues to refine its remuneration practices and look forward to your continued support at our AGM. Julie Fahey Chair of the People & Performance Committee Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report54 Remuneration Report (continued) For the year ended 31 December 2023 Contents Letter from Julie Fahey, Chair of the People and Performance Committee Key Management Personnel (KMP) Section 1 Executive remuneration framework in 2023 1.1 1.2 1.3 Overview of the 2023 executive remuneration framework Our 2023 remuneration framework Approach to determining remuneration opportunities Section 2 Performance and remuneration outcomes in 2023 2.1 2.2 2.3 2.3.1 2.3.2 2.3.3 2.3.4 2.4 2.4.1 2.5 Mechanisms that link remuneration to performance Group performance against objectives Remuneration awarded in the current year 2023 Fixed remuneration 2023 STI outcomes STI awarded for the year ended 31 December 2023 LTI Performance Rights, and remuneration realised from equity granted in previous years Executive KMP statutory remuneration Additional disclosures relating to termination arrangements for former Executive KMP (since exited) non‑statutory Executive KMP actual realised remuneration – non‑statutory Section 3 Remuneration governance Overview 3.1 Executive KMP service agreements 3.2 Section 4 Non-executive director fees Fee policy 4.1 Maximum aggregate NED fee pool 4.2 2023 Non‑Executive Director remuneration 4.3 Section 5 Additional required disclosures Unvested equity 5.1 Shareholdings 5.2 Transactions with KMP 5.3 5.4 Loans to KMP or related parties 52 55 56 56 57 62 63 63 64 64 64 65 66 66 68 69 70 71 71 72 73 73 73 74 75 75 80 81 81 This remuneration report provides details of Iress’ remuneration policy and practice for Key Management Personnel (KMP) for the 2023 financial year (2023). The KMP are identified in the below table and comprise the Non‑Executive Directors (NEDs), Executive Director, and Executives. For the purposes of this report: ‘Executive KMP’ refers to the Executive Director and Executives. The information presented in this report has been audited as required under section 308(3C) of the Corporations Act 2001 and forms part of the Director’s report. 55 Key Management Personnel (KMP) For the year ended 31 December 2023, the KMP were: KMP Position Term as KMP Non-Executive Directors (NED) R Sharp N Beattie M Dwyer J Fahey A Glenning T Vonhoff Non‑executive Chairman Non‑executive Director Non‑executive Director Non‑executive Director Non‑executive Director Non‑executive Director Full year Full year Full year Full year Full year Full year Executive Director M Price Executive P Giles(1) J Hoang(1) H Mitchell(1) C Williamson(2) Former Executive J Das(3) P Ferguson(4) K Fisk(5) J Harris(6) J McNeill(5) S New(6) A Todd(6) Managing Director and Chief Executive Officer (CEO) Full year Chief Executive Officer – Superannuation Chief Executive Officer – Trading & Market Data Group Executive – Wealth & UK Chief Financial Officer Chief Product Officer Chief Legal Officer & Company Secretary Chief Corporate Affairs & Marketing Officer Chief Financial Officer Chief People Officer Chief Commercial Officer Chief Technology Officer Partial year Partial year Partial year Partial year Partial year Partial year Partial year Partial year Partial year Partial year Partial year (1) P Giles, J Hoang and H Mitchell were appointed as KMP on 1 July 2023 upon the introduction of the new product‑led structure. (2) C Williamson was appointed as a KMP upon joining Iress as CFO on 24 July 2023. (3) J Das ceased to be a KMP upon exiting the company on 31 March 2023. (4) P Ferguson ceased to be KMP on 30 June 2023 upon the introduction of the new product‑led structure and remained a Leadership Team member until exiting the company on 31 December 2023. (5) K Fisk and J McNeill ceased to be KMP on 30 June 2023 upon the introduction of the new product‑led structure and remain as Leadership Team members. (6) J Harris, S New and A Todd ceased to be KMP on 30 June 2023 upon the introduction of the new product‑led structure and remained as Leadership Team members until their exit from the company. The numbers reported reflect the period for which executives are KMP. There have been no changes to KMP since the end of 2023 up to the date of signing the Directors’ Report. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report56 Remuneration Report (continued) For the year ended 31 December 2023 Section 1 Executive remuneration framework in 2023 1.1 Overview of the 2023 executive remuneration framework Iress’ 2023 executive remuneration framework is summarised below. The remuneration components apply to all Executive KMP, with the exception of Options which only apply to the Group CEO. Remuneration principles and performance Our goal To be the most innovative, reliable, and respected technology partner, regarded by our clients as essential and desirable. Our goal is supported by our remuneration principles and performance framework Alignment with strategy Long‑term deferred awards with vesting linked to key business success measures. Alignment with shareholder interests Support attraction, motivation, and retention Simple to understand and transparent Support robust performance management Significant exposure to share price through equity‑based awards, with Absolute Total Shareholder Returns a gateway to Performance Rights vesting. Market competitive remuneration opportunity. Long‑term equity awards support retention and allow Executive KMPs to share in the value they create. Total Remuneration structured clearly and easy to value unvested equity. Long‑term view of performance to avoid short‑term gains for long‑term loss. Strong performance and pay linking mechanisms. Annual performance management Remuneration components Robust performance management incorporating the ‘what’ and the ‘how’ Base Salary Short Term Incentive Long Term Incentive Options (Group CEO only) Market‑based reward for role. Incentive plan to drive performance and motivate talent. Equity to reward exceptional shareholder returns and achievement of strategic goals. On commencement in 2022, a one‑off grant of options to the Group CEO was made to provide immediate shareholder alignment and an avenue to invest in Iress. Minimum shareholding requirement A 225% – 400% of base salary minimum shareholding requirement (for the Executives and Group CEO respectively) to be met within five years Performance measurement Individual performance Any increases in base salary will consider the market and individual contribution and experience. Individual and Company performance Absolute total shareholder return (ATSR) Shareholder wealth Any reward will align with both individual and company performance, with a heavy weighting towards financial outcomes. An ATSR gateway over a four‑year period (three years remaining) applies to the 2022 Grant 2 Performance Rights which must be achieved before the additional Earnings Per Share (EPS), Return on Invested Capital (ROIC) and Platform Delivery conditions are considered. Over time, Executives should see a direct increase (or decrease) in their wealth in the same way shareholders do. Options for the Group CEO will only be in the money if a share price increase is realised. The Board also considered non‑financial factors centred around: • • • • Platform – enabling our services on a platform architecture model. Product – productising our offers and services. Advocacy – growing advocacy from our people and clients. Growth – delivering sustainable growth. 57 1.2 Our 2023 remuneration framework The 2023 executive remuneration structure is as follows and comprises Base Salary, Superannuation, Short Term Incentive, Long Term Incentive, Options, and Minimum Shareholding Requirement. Base Salary Base Salary reflects a market-related reward for performing a leadership role at Iress, plus superannuation and benefits. Short Term Incentive (STI) The STI is a new addition to the remuneration framework for 2023. It replaces the Historical Equity Rights element from the previous framework and seeks to better align individual reward with both individual and company performance. It works via a multiplying structure, where 125% maximum performance can be awarded for Company Measures, and 120% for Individual Measures (maximum award of 150% of target opportunity). It is a wholly cash award for 2023, with a mandatory deferral element into equity to be introduced in 2024. Example Purpose Opportunity Performance measurement Termination of employment Change of control Malus & clawback In the case where an Executive KMP’s fixed salary is $500,000, target STI would be 60% of this ($300,000) and maximum opportunity would be 90% of fixed salary ($450,000). Whilst not an expected outcome, given the multiplying structure of the plan, if either the combined Company Measures or the combined Individual Measures were to add to 0%, then $0 benefit would result for a plan participant for that year (e.g. 125% for Company Measures x 0% for Individual Measures = 0% Outcome). To align the interests of Executive KMP with the company’s short‑term goals and performance targets, with a particularly high weighting directed toward financial metrics. Executive KMP Target/Maximum Opportunity Group CEO Executives 120%/180% of Fixed Salary (base salary plus superannuation) 60%/90% of Base Salary Any award is delivered wholly in cash in April 2024 for the 2023 plan, subject to continued service. Board discretion: The Board retains ultimate discretion to adjust any award, subject to their assessment of individual and company performance. Under the multiplying structure (where maximum award is equal to 150% of target opportunity) 125% maximum performance can be awarded for Company Measures that are highly weighted towards financial objectives. The maximum 120% dedicated to Individual Measures are made up of predominantly financial and strategic objectives that are under the participant’s direct control. There are three Company Objectives that align the Group CEO and Executives with shareholder and client outcomes: 1. Shareholder (Group EBITDA less capital expenditure) 2. Strategy & Transformation Execution (Exit earnings run rate) 3. Customer (Net Promoter Score) The Group CEO and Executive KMP’s individual objectives are, as appropriate to each individual, aligned to Group or Business Unit financial objectives, revenue achievement, the execution of transformation initiatives, the definition of long term strategic plans (to 2027), the strategic management of the cost base, and the repatriation of capital. Refer to Section 2.3.2 for more detailed information on performance against each measure for the Group CEO, as well as a summary of Executive KMP performance. If employment ceases due to resignation, termination for cause, or gross misconduct, then any award lapses. If employment ceases for other reasons, the Board may grant a pro‑rated award at their absolute discretion. Board discretion also applies to a change in control. The Board will consider time elapsed and performance achieved when exercising this discretion. Significant underperformance or misconduct can lead to reduced awards and the ability to clawback awards at the Board’s discretion. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report 58 Remuneration Report (continued) For the year ended 31 December 2023 59 Long Term Incentive (Performance Rights) The 2022 Performance Rights grant combined two grants – one for 2022 and one for 2023. No additional Performance Rights were granted in 2023 to participants who received the brought forward 2023 grant, only as a pro‑rata award to newly hired/promoted executives. Grant 2 of the 2022 award is reported below as the proxy for the 2023 grant. The long term incentive is underpinned by Performance Rights, which is a right to receive one Iress share (or at the Board’s discretion, cash of equivalent value) upon vesting and exercise of that right at no cost. Performance Rights do not carry any dividend entitlements or voting rights. Shares allocated upon exercise carry the same rights as any other Iress share. Purpose Opportunity To reward exceptional shareholders returns and performance against key business strategy objectives. Executive KMP Performance Rights Award Value Group CEO Executives 2022 Grant 2: face value $4,062,016 2022 Grant 2: face value 38.5% of Total Remuneration The number of Performance Rights granted to each executive was calculated using Award Value, divided by the twenty‑trading‑day Volume Weighted Average Price (VWAP) commencing on the day following the results being announced for the year ending 31 December 2021. Two grants of Performance Rights were made to Executive KMPs in 2022, one being a four‑year instrument brought forward that effectively replaced the 2023 grant. A grant of Performance Rights will vest subject to: an ATSR gateway; ongoing service; and three additional measures over the performance measurement periods. The ATSR calculation uses a start and end share price based on the 20‑day VWAP commencing on the Trading Day after Iress’ financial results are announced. The starting Share price is the 20‑day VWAP commencing on the Trading Day after Iress’ financial results were announced for 2021, and the final Share price is based on the 20‑day VWAP commencing on the Trading Day after Iress’ 2025 results are announced. • 2022 – Grant 2 has a four‑year performance measurement period from 2022 to 2026. • ATSR is aligned to Iress’ business objectives as ATSR focuses on the growth of Iress and value to shareholders, regardless of the broader market and other companies’ movements. Awards to Executive KMPs will not vest unless substantial shareholder value has been created over the performance measurement period. • The annualised ATSR gateway of 10% —set at the 2021 maximum hurdle—must be met. Vesting is then dependent on performance against three equally weighted key business strategy objectives: EPS growth, ROIC improvement, and platform delivery. • The 20‑day ATSR VWAP start and end periods, allows for market consideration and response to the EPS, ROIC and platform delivery results achieved at the end of the performance periods. • The platform delivery measure is the fundamental measure underpinning the strategy acceleration, with scale and financial outcomes, which are critical to providing returns to our shareholders. Board discretion: The Board retains ultimate discretion to adjust the award, or vesting quantum, of Performance Rights, subject to their assessment of individual and company performance. In applying any discretion, the Board takes into consideration performance against a set of non‑financial measures across the following areas: • Platform – enabling our services on a platform architecture model. • Product – productising our offers and services. • Advocacy – growing advocacy from our people and clients. • Growth – delivering sustainable growth. Performance measurement 2022 Grant 2 is eligible to vest in March 2026. A one‑year holding lock applies to all Performance Rights post‑vesting. Measure 1: EPS condition (one-third of grant) EPS is calculated as Net Profit After Tax (NPAT), divided by the weighted average number of Iress shares on issue in the final year of the relevant measurement period. Iress’ EPS performance will be tested at the relevant financial year end, based on Iress’ audited consolidated results. The EPS performance will be determined by the Board. EPS vesting schedule Threshold vesting (30% vesting of the tranche) 2022 Grant 2* EPS of 51.9 cents Maximum vesting EPS of 66.8 cents * Straight‑line vesting will occur between threshold and maximum. No vesting of the measure will apply for below threshold performance. Measure 2: ROIC condition (one-third of grant) ROIC is calculated using NPAT (excluding interest and finance costs) as a percentage of the net debt plus equity. Iress’ ROIC will be measured based on Iress’ audited consolidated results for the final year of the relevant measurement period. ROIC performance will be determined by the Board. ROIC vesting schedule Threshold vesting (30% vesting of the measure) Maximum vesting (100% vesting of the measure) 2022 Grant 2* ROIC of 13.3% ROIC of 17.8% * Straight‑line vesting will occur between threshold and maximum. No vesting of the measure will apply for below threshold performance. Measure 3: Platform delivery condition (one-third of grant) The technology platform delivery condition focuses on enabling services on Iress’ new single product and technology platform. Platform Delivery performance will be measured at the end of the measurement period, with performance determined by the Board. Platform vesting schedule 2022 Grant 2* Threshold vesting (50% vesting of the measure) 30%–50% of existing services are enabled on the platform Between threshold and maximum vesting (75% vesting of the measure) 30%–50% of existing services and every new service is enabled on the platform Maximum vesting (100% vesting of the measure) Majority (>=50%) of existing services and every new service is enabled on the platform * The vesting schedule is binary, with no straight‑line vesting occurring between each performance outcome. No vesting of the measure will apply for below threshold performance. No retesting applies to Performance Right awards Vesting Termination of employment Change of control Malus & clawback If employment ceases due to resignation, termination for cause, or gross misconduct, unvested Performance Rights lapse. If employment ceases for other reasons, Performance Rights continue to be held subject to original terms on a pro‑rata basis (subject to Board discretion). If employment ceases due to resignation, termination for cause, or gross misconduct, then any award lapses. If employment ceases for other reasons, the Board may grant a pro‑rated award at their absolute discretion. Board discretion also applies to a change in control. The Board will consider time elapsed and performance achieved when exercising this discretion. Significant underperformance or misconduct can lead to reduced awards and the ability to clawback awards at the Board’s discretion. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report60 Remuneration Report (continued) For the year ended 31 December 2023 61 Options (one-off award granted to the Group CEO to offset fixed pay reduction on commencement) An Option is a right to buy one Iress share upon vesting and exercise of that right at a set exercise price, subject to adjustment for certain capital actions. Options do not carry any dividend entitlements or voting rights. Shares allocated upon exercise carry the same rights as any other Iress share. There were no Options awarded in 2023. The options granted to the Group CEO in 2022 have an exercise price of $13.00. Purpose Opportunity To align interests with shareholders and reward shareholders returns. Executive KMPs Award Value Group CEO 2022 Grant 1: grant value $686,235 2022 Grant 2: grant value $686,235 Executives N/A The Award Value was equal to the 30% reduction in fixed remuneration comprising Base Salary and Historical Equity Rights agreed to by the Group CEO (compared to the fixed remuneration for the former Group CEO) for the period from his commencement date to 31 December 2022. The reduction in fixed remuneration reflects the Group CEO’s intention to invest in Iress. The number of Options granted was calculated using the Award Value, divided by the independent Black Scholes valuation of an Option for each grant using the twenty‑trading‑day VWAP up to and including the grant date. The exercise price of the Options was set to reflect the effective strike price for Performance Rights if performance hurdles were to be achieved. The vesting of Options is not subject to any further performance conditions. The vesting period ends on the dates the Company announces its annual financial results to the ASX, which is estimated to be 20 February 2026 for Grant 1 and 22 February 2027 for Grant 2. Once vested, Options can be exercised at any time during the two‑year exercise period apart from any ‘blackout periods’ that apply under the Company’s Share Trading Policy. The exercise period is estimated to end on 28 February 2028 for Grant 1 and 28 February 2029 for Grant 2. Performance measurement Vesting and exercise period Subject to applicable law, in the event of cessation of employment for any reason: • after the end date of the vesting period for Grant 1, all Options will remain on issue and there will be no acceleration Termination of employment Change of control of any remaining vesting period nor change to any exercise period unless the Board determines otherwise; and • before the end date of the vesting period for Grant 1, a pro rata portion of all of the Options will lapse reflecting the portion of that vesting period Marcus Price has not served and there will be no acceleration of any vesting period nor change to any exercise period unless the Board determines otherwise. This position differs to the position for cessation of employment under the 2022 Performance Rights (discussed above). This is because the grant of Options is provided in return for a 30% reduction in fixed remuneration. If employment ceases due to resignation, termination for cause, or gross misconduct, then any award lapses. If employment ceases for other reasons, the Board may grant a pro‑rated award at their absolute discretion. Board discretion also applies to a change in control. The Board will consider time elapsed and performance achieved if/when exercising this discretion as to whether any remaining unexercised Options will vest and be automatically exercised. This position differs to the position for a Change of Control under 2022 Performance Rights (discussed in the section above). This is because the grant of Options was intended to accommodate the 30% reduction in fixed remuneration. Malus & clawback Significant underperformance or misconduct can lead to reduced awards and the ability to clawback awards at the Board’s discretion. Minimum shareholding requirement • Executive KMP have a Minimum Shareholding Requirement to be met by December 2023, or within five years of commencing in their executive role. The requirement for the Group CEO and Executives is as follows: > Group CEO: 400% of base salary. > Executives: 225% of base salary. • Unvested Historical Equity Rights, vested Performance Rights and vested Options that are ‘in the money’ will count towards meeting the requirement. Unvested Performance Rights will not. • The value of each holding will be calculated as the maximum of: > share price at the time of the measurement, or > share price at the time when equity is acquired (i.e., when Historical Equity Rights were granted, when Performance Rights vest, and/or when fully‑paid shares are purchased). • Executive KMP progress towards the Minimum Shareholding Requirement is shown in Section 5.2. Under the framework, remuneration for 2023 is delivered over a remaining four‑year timeframe for Executives, and up to five remaining years for the Group CEO, as shown below: 2023 2024 2025 2026 2027 2028 Base salary Cash Short Term Incentive Cash Equity Rights Remaining Equity Rights vesting period Holding lock period Release of 2022 Equity Rights and Performance Rights and Group CEO Options vesting is directly aligned to Iress’ 2025 strategic timeline Performance Rights Options (Group CEO) Minimum Shareholding Requirement Grant 1: Remaining Measurement Period Holding lock period Grant 2: Remaining Measurement Period Holding lock period Grant 1: Remaining Options Vesting Period Exercise period to February 2028 Grant 2: Remaining Options Vesting Period Exercise period to Feb. 2029 Minimum Shareholding Requirement to be met within five years (ongoing requirement) Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report62 Remuneration Report (continued) For the year ended 31 December 2023 1.3 Approach to determining remuneration opportunities For Executives, each remuneration component (Base Salary, Superannuation, STI and LTI) is calculated as a proportion of Total Remuneration, as per the remuneration opportunities shown in Section 1.2. The LTI refers to the 2022 Grant 2 Performance Rights allocation that was brought forward from 2023. For the Group CEO, 2023 remuneration was set using: • Base Salary of $685,236 • Superannuation of $27,500 • STI based on a maximum of 180% of Fixed Salary (Base Salary plus Superannuation) • LTI based a face value $4,062,016 (the full value of the former Group CEO’s 2022 Grant 2 LTI Performance Rights) In determining Total Remuneration, Iress considers the skills, experience, performance, and value to Iress of the individual and market pay levels of comparable roles. Total Remuneration is reviewed annually and approved by the Board for the Group CEO and by the PPC for other Executive KMP. Any decision to increase Total Remuneration is considered in the context of the resulting change to Base Salary, STI, and LTI. Iress serves multiple sophisticated client segments internationally, faces a range of competitors, and is exposed to global technology and regulatory influences. As a result, Iress competes for the best people globally. The challenges and opportunities faced by Iress reflect the international nature of its business, its size, and the industries in which it operates. Recognising this, Iress generally considers two main comparator groups when assessing executive remuneration: ASX‑listed technology companies with complex multinational operations of a similar size (assessed by market capitalisation); and, periodically, overseas‑listed technology companies operating in a closely comparable industry segment with comparable scale. The Board routinely assesses the remuneration approach against the market of such peers, and this was an important input to the changes made to executive remuneration in 2023. The 2023 remuneration outcomes for each member of the Executive KMP are shown in Section 2.4. 63 Section 2 Performance and remuneration outcomes in 2023 2.1 Mechanisms that link remuneration to performance Pay for Performance Our remuneration approach is supported by the following mechanisms that link reward outcomes to key measures of business performance and success. Group and individual performance impacts Executive KMP remuneration in four ways: Impact 1 Impact 2 Impact 3 Impact 4 Non-financial performance STI award subject to achieving testing individual and company performance targets. LTI vesting subject to ATSR gateway and additional measures Ultimate discretion from the Board to adjust remuneration in light of poor performance • Individual and Group performance against the annual non‑financial objectives set by the Board is a key consideration when the Board determines the Base Salary and Total Remuneration package of an executive. • STI awards align with short • LTI vesting is subject to a • The Board has discretion to term individual and company performance, with a heavy weighting towards financial outcomes. four year (three years remaining) ATSR gateway measure that aligns reward with shareholder outcomes. • The significant proportion of Total Remuneration delivered via LTI then only vests subject to performance against key business strategy objectives. • This instrument will be replaced with SARS from 2024. reduce, cancel or clawback at‑risk remuneration if Group or individual performance is significantly below expectations, or in the event of individual misconduct. The discretion can be applied at grant, vesting, during the equity restriction period. Or after an award has been made. • In the case of LTI, remuneration can be adjusted prior to grant, during vesting, and after vesting as a result of performance. Board discretion The Board has an overarching responsibility to ensure performance is appropriately managed, to maintain a focus on strong performance, and the long‑term link of performance‑to‑remuneration outcomes. Each year, the Board approves the Group financial and non‑financial objectives consistent with the Group’s risk appetite and specific targets for the Group to achieve its strategy. The Group’s financial and non‑financial objectives cascade down to individual objectives for each executive that are specific to each executive’s role. At all points throughout the remuneration and performance cycles for both STI and LTI, the Board and PPC review performance at a Group and individual level and retain discretion to reduce the value of awards in line with performance to maintain the alignment between performance and remuneration. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report64 Remuneration Report (continued) For the year ended 31 December 2023 2.2 Group performance against objectives The table below provides summary information on the Group’s performance for the five years to 31 December 2023: Measure Revenue from contracts with customers ($’000) Net Profit (loss) After Tax ($’000) Basic Earning per Share (cents) Reported Return On Invested Capital(1) Annual ATSR(2) Annualised 3‑year ATSR(2) 2023 625,743 (137,484) (76.4) (19.24%) (16.61%) (5.70%) 2022 615,589 52,672 28.6 8.20% (21.10%) (6.00%) 2021 595.945 73,798 38.8 10.50% 26.50% 8.90% 2020 542,630 59,213 32.4 9.20% (18.00%) 1.30% 2019 508,943 65,128 37.9 11.40% 23.50% 9.30% (1) Earnings after tax adjusted for net interest / (net debt and equity). (2) All share prices and the TSR calculation are based on the twenty‑trading‑day volume weighted average share price on the relevant dates. 2.3 Remuneration awarded in the current year 2023 financial performance was reflected in 2023 remuneration outcomes. STI payments were below target and the value of executive equity holdings have decreased in line with shareholder experience. For the 2020 Performance Rights, the Absolute Total Shareholder Return (ATSR) failed to meet the minimum performance requirement for vesting. Given the negative ATSR performance through to 31 December 2023, there also will be no vesting for the 2021 Performance Rights. Executives holding Historical Equity Rights were also impacted by the share price which includes the 2020 and 2021 tranches which were under a holding lock during 2023. The Board viewed that overall financial performance was fairly reflected in the decreased award of at‑risk remuneration. 2.3.1 – 2023 Fixed remuneration The current policy for reviewing Executive remuneration this year focused on ASX‑listed technology companies with complex multinational operations of a similar size (assessed by market capitalisation). External surveying specialists (Aon Human Capital, Godfrey Remuneration Group and SW Corporate) were engaged to source listed company remuneration data. With the adoption of the new product‑led structure, a market based assessment of base salaries for Executive KMP was undertaken, and the salaries for existing Iress employees who became KMP (P Giles and J Hoang), and incoming KMP (H Mitchell) were determined according to the role and its responsibilities. No increase was awarded to the Group CEO in 2023. 65 2.3.2 – 2023 STI outcomes The first of the tables below outlines detailed STI outcomes for the Group CEO. The tables outline Company Measures (maximum 125%) and Individual Measures (maximum 120%) that multiply to form the Group CEO’s STI for 2023 (maximum 150% of target opportunity). In assessing the overall STI outcome, the Board took into consideration performance against these measures. Measure Weighting (at Target) Performance Outcome Weighted Outcome Commentary Company Measures (up to 125%) Shareholder (Group EBITDA less Capex – Group Underlying Earnings Before Interest, Tax and Amortisations less capital expenditure) Strategy & Transformation Execution (Exit earnings run rate) 40% 40% Customer (Group Net Promoter Score) 20% Threshold Target Stretch Threshold Target Stretch Threshold Target Stretch Individual Measures (up to 120%) – M Price Group Revenue Strategic Cost Initiatives Corporate Restructure Capital Repatriation Program 30% 30% 20% 20% Threshold Target Stretch Threshold Target Stretch Threshold Target Stretch Threshold Target Stretch This metric aligns performance to shareholder interests. 0% The 2023 Group EBITDA less Capex was below the 2022 Group EBITDA less Capex and on that basis there is no Executive reward for this metric. 2022 Group EBITDA less capex $118.8m 2023 Group EBITDA less capex $108.9m This metric aligns performance to market announced strategic priorities, specifically the recurring financial value of transformation initiatives. Progress on the delivery of strategy execution: 50% • Capturing revenue through enhanced and new products, pricing standardisation • Managing non‑strategic assets for value • Arresting growth in the cost base • Operating model efficiency This metric aligns performance with customer outcomes. Customer sentiment improved with a demonstrable NPS improvement. Improvements particularly across ANZ Wealth, UK Wealth, UK Sourcing, Trading Asia. Revenue initiatives have resulted in a modest 2% growth in revenue from 2023. Strategic cost initiatives allowed Iress’ growth in the cost base to be arrested in an inflationary environment. Initiatives have resulted in a more efficient cost base. To support its growth objectives, Iress restructured into a product‑led Business Unit structure, delivering accountability and focus on core businesses. All Iress people moved into the new structure, a new remuneration model was developed, and financial accounts were restated to support the new structure. The divestment of non‑strategic assets, and the management of the portfolio for value is a strategic priority. During 2023 the sale of the MFA business was completed. 25% 21% 34% 20% 20% Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report 66 Remuneration Report (continued) For the year ended 31 December 2023 2.3.3 – STI awarded for the year ended 31 December 2023 The Group CEO and Executive KMP’s individual objectives are, as appropriate to each individual, aligned to Group or Business Unit financial objectives, revenue achievement, the execution of transformation initiatives, the definition of long term strategic plans (to 2027), the strategic management of the cost base, and the repatriation of capital. Details of the STI payments awarded to each Executive KMP for the year ended 31 December 2023 are set out below: Short-term incentive for the year ended 31 December 2023 Executive KMP M Price P Giles(2) J Hoang(2) H Mitchell(2) C Williamson(3) Cash STI $000(1) $605,144 $124,329 $154,772 $165,034 $147,450 % earned of maximum opportunity % forfeited of maximum opportunity 47% 40% 44% 38% 50% 53% 60% 56% 62% 50% (1) Under the terms of the 2023 STI, 100% of their award is delivered in cash which is generally paid around April 2024. (2) Amounts shown for P Giles, J Hoang and H Mitchell are pro‑rated to account for base salary changes during the performance period. (3) C Williamson became a KMP upon joining as CFO on 24 July 2023. Amounts shown are pro‑rated from this date. 2.3.4 – LTI Performance Rights, and remuneration realised from equity granted in previous years LTI Performance Rights granted in 2020 Of the current Executive KMP, only J Hoang participated in this grant (prior to becoming a KMP). For the LTI Performance Rights granted in 2020 and tested on 31 December 2022, vesting was based on ATSR performance over the measurement period: 0% of the rights vest for compound annual growth ATSR performance below 6.5%, 50% vest at 6.5% and 100% of the rights vest at 10% with pro‑rata vesting on a straight‑line basis in between. Based on Iress’ compound annual growth ATSR performance, there was zero vesting of LTI Performance Rights over this period. LTI Performance Rights granted in 2021 The same vesting schedule as 2020 applied to this grant. In February 2024, based on Iress’ compound annual growth ATSR performance in the preceding three‑year period up to 31 December 2023, there will be zero vesting of LTI Performance Rights granted to executives in 2021. This will be reported on in next year’s report. Historical Equity Rights granted in 2021 Of the current Executive KMP, only J Hoang participated in this grant (prior to becoming a KMP). Historical Equity Rights granted in 2021 were eligible to vest in February 2023 subject to continued service. Performance is reflected in share price movements and dividends earned, which collectively impact the value of Historical Equity Rights. Following the 2022 year‑end assessment of performance, the Board determined it was fair and appropriate, under the terms of the award, that the 2021 Historical Equity Rights vest. These Historical Equity Rights are under restriction until February 2025 (or August 2025 if the relevant executive elected for the voluntary holding lock to also apply). Historical Equity Rights granted in 2022 Of the current Executive KMP, only M Price received a grant of 2022 Equity Rights. Historical Equity Rights granted in 2022 are eligible to vest in February 2024 subject to continued service. Performance is reflected in share price movements and dividends earned, which collectively impact the value of Historical Equity Rights. Following the 2023 year‑end assessment of performance, the Board will determine if it is fair and appropriate, under the terms of the award, that the 2022 Historical Equity Rights vest. Any Historical Equity Rights that vest will be under restriction until February 2026 (or August 2026 if the relevant executive elected for the voluntary holding lock to also apply). This will be reported on in next year’s report. 67 In the table, Historical Equity Rights and Additional Equity Rights (Rights awarded to reflect dividend equivalents), as well as LTI Performance Rights are shown at face value (reflecting share price at grant multiplied by the number of instruments granted). This differs from the portion of the grant date fair value expensed in 2023, which has been used to calculate remuneration in Section 2.4 Executive KMP statutory remuneration. Options are shown at fair value (reflecting fair value on grant date multiplied by the number of instruments granted). The equity‑related remuneration awarded to Executive KMP in 2023 (and 2022) is shown below. Executive KMP M Price P Giles(4) J Hoang(4)(5) H Mitchell(4) C Williamson(6) Total Executive KMP Former Executive KMP A Walsh J Das(8)(7) P Ferguson(8) K Fisk(8) J Harris(8)(9) J McNeill(8)(12) S New(8)(10)(12) A Todd(8)(11) Total former Executive KMP Total Historical Equity rights $ – 175,750 – – – – – 175,750 1,008,892 – 275,001 – 195,005 – 175,002 – 310,012 – 213,283 – 306,019 – 315,006 – 2,798,220 – 2,973,970 Additional Equity rights(1) $ – – – – – – – – 76,389 26,457 – 18,762 14,770 – – 29,828 23,480 19,714 16,562 28,283 23,755 30,310 23,854 153,354 178,810 153,354 178,810 Performance rights(2) Options(3) $ $ – 8,124,042 606,264 732,731 1,090,429 1,168,668 3,598,092 8,124,042 8,124,042 – 2,812,302 – 1,994,180 – 1,789,650 – 3,170,229 – 2,181,111 – 3,129,414 – 3,221,362 – 26,422,290 3,598,092 34,546,332 – 1,372,470 – – – – – 1,372,470 – – – – – – – – – – – – – – – – – – 1,372,470 Total Value of Equity Granted $ – 9,672,262 606,264 732,731 1,090,429 1,168,668 3,598,092 9,672,262 9,209,323 26,457 3,087,303 18,762 2,203,955 – 1,964,652 29,828 3,503,721 19,714 2,410,956 28,283 3,459,188 30,310 3,560,222 153,354 29,399,320 3,751,446 39,071,582 Year 2023 2022 2023 2023 2023 2023 2023 2022 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 (1) (2) (3) (4) (5) (6) (7) (8) (7) (8) Amount reflects the dividend equivalents granted in 2023 and 2022 upon vesting of the 2021 and 2020 Equity Rights respectively. The number of rights granted to each Executive KMP in 2023 and 2022 was based on the twenty‑trading‑day volume weighted average share price up to and including 31 December 2023 and 31 December 2022 respectively. Values estimate the maximum value available to vest in future years. The minimum value is zero as no rights vest if the vesting conditions are not satisfied. The number of granted Options were based on the fair value of an Option on the grant date for each grant using the twenty‑trading‑day volume weighted average share price up to and including the grant date 3 October 2022. Values estimate the maximum value available to vest in future years. The minimum value is zero as no options vest if the vesting conditions are not satisfied. Participants were appointed as KMPs on 1 July 2023. No additional Performance Rights were granted in 2023 to participants who received this brought forward grant, only as a pro‑rata award to newly hired/promoted executives. The amounts reflect the part of the year as KMP. J Hoang’s salary was fully denominated in Singaporean Dollars and was subject to exchange rate movements. The Australian dollar amounts in the table were converted at an average foreign exchange rate of 0.8938. C Williamson was appointed as KMP on 24 July 2023. The amounts reflect the part of the year as KMP. J Das ceased to be KMP on 31 March 2023. The amounts reflect the part of the year as KMP. Participants ceased to be KMPs on 30 June 2023. The amounts reflect the part of the year as KMP. On the termination of employment on 30 September 2023, J Das retained all of the Equity Rights and the 2022 and 2021 Performance Rights pro‑rata. P Ferguson Equity Rights and Performance Rights fully vested on 2 June 2023. The accelerated vesting of the equity Rights and Performance Rights were approved by the Board. On the termination of employment on 30 September 2023, J Harris retained all of the Equity Rights and the 2022 and 2021 Performance Rights pro‑rata. (9) (10) On the termination of employment on 6 October 2023, S New retained all of the Equity Rights and the 2022 and 2021 Performance Rights pro‑rata. (11) On the termination of employment on 31 December 2023, A Todd retained all of the Equity Rights and the 2022 and 2021 Performance Rights pro‑rata. (12) J McNeill and S New salaries were fully denominated in British Pounds and were subject to exchange rate movements. The Australian dollar amounts in the table were converted at an average foreign exchange rate of 0.5344 (2022: 0.5546). Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report  68 Remuneration Report (continued) For the year ended 31 December 2023 2.4 Executive KMP statutory remuneration Short-term benefits Post- employ- ment benefits Long-term benefits Executive KMP Year Salary and Fees(1) $ Other benefits(2) $ Short- term incentive $ Super- annuation $ Share- based pay- ments(3) $ Long- service leave (LSL)(4) $ Com- passion- ate payment $ Term- ination payment $ Total Remun- eration $ 2023 2022 2023 2023 2023 705,140 168,962 235,429 226,031 347,548 – – – 68,465 58,985 605,144 – 124,329 154,772 165,034 27,500 6,781 27,500 15,515 27,500 27,500 691,892 470,889 54,525 104,258 8,922 4,425 1,906 – 968 – – – C Williamson(8) 2023 344,715 – 147,450 2023 1,858,863 127,450 1,196,729 125,515 864,022 2,874 – – – – – – – 2,031,582 646,632 442,751 569,041 607,989 – – – – – 524,090 4,175,453 Executive KMP M Price P Giles(6) J Hoang(6)(7) H Mitchell(6) Total Executive KMP 69 (1) (2) (3) (4) (5) (6) (7) (8) (9) Salary and fees includes allowances and short‑term compensated absences paid during the 2023 and 2022 years. Other benefits include health, life insurance, school fees, home passage and housing subsidies. Share‑based payments include share based payment expenses in relation to historical equity rights, deferred share rights, transitional equity rights, performance rights and options rights. The negative movements in Long Service Leave (“LSL”) reflect the utilisation of the long service leave which off‑sets the amounts paid and included salaries. Percentage calculated as the sum of short‑term incentives and equity shares over the total remunerations. Participants were appointed as KMPs on 1 July 2023. The amounts reflect the part of the year as KMP. J Hoang’s salary was fully denominated in Singaporean Dollars and was subject to exchange rate movements. The Australian dollar amounts in the table were converted at an average foreign exchange rate of 0.8938. C Williamson was appointed as KMPs on 24 July 2023. The amounts reflect the part of the year as KMP. On the cessation of A Walsh as KMP on 3 October 2022, in relations to the retained Equity Rights and Performance rights, the share‑based payment expenses still to be recognised from the cessation date to the vesting date were accelerated and recognised in full on cessation. The prior year share‑based payment expenses were restated by $673,855. Salaries and fees were restated to include termination payments. (10) J Das ceased to be KMP on 31 March 2023. The amounts reflect the part of the year as KMP. (11) Participants ceased to be KMPs on 30 June 2023. The amounts reflect the part of the year as KMP. (12) P Ferguson Equity Rights and Performance Rights fully vested on 2 June 2023.The accelerated vesting of the Equity Rights and Performance Rights and removal of performance conditions were approved by the Board. (13) J McNeill and S New salaries were fully denominated in British Pounds and were subject to exchange rate movements. The Australian dollar amounts in the table were converted at an average foreign exchange rate of 0.5344 (2022: 0.5546). (14) J McNeill and S New share‑based payments include the payment of cash dividend replacement for their vested but unexercised 2020 Equity Rights. At-risk pay to total remun- eration(5) % 63.84% 72.82% 40.40% 45.52% 28.61% 28.98% 49.35% 2022 168,962 Former Executive KMP A Walsh(9) J Das(10) 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 P Ferguson(11) (12) K Fisk(11) J Harris(11) J McNeill(11) (13)(14) S New(11)(13)(14) A Todd(11) Total former Executive KMP 808,656 155,001 550,000 200,012 390,000 178,307 354,019 338,307 620,000 240,021 414,698 332,504 595,002 317,611 630,000 – – – – 1,290 2,580 1,140 2,280 1,290 2,580 3,677 12,904 2,480 4,690 – – 2023 1,761,763 9,877 2022 4,362,375 25,034 – – – – – – – – – – – – – – – – – – 6,781 470,889 – 646,632 72.82% Cash dividend replacement is only applicable to KMPs in the United Kingdom. 26,250 1,850,673 366,051 401,385 – 27,500 (37,829) (281) 3,740 – 442,273 2,647,750 963,044 982,625 7,025 1,969,841 337,313 105,901 171,634 217,139 534,230 28,475 9,125 32,050 – 27,500 19,367 37,323 15,438 29,750 – 166,145 382,722 237,351 545,261 220,641 27,500 546,106 (5,200) (3,882) 1,900 4,539 (4,423) 16,617 – – – – 3,076 8,239 471,500 – – – – – – 518,430 3,162,898 754,486 296,373 564,522 752,313 1,200,927 200,000 – – – 429,210 847,647 587,773 1,174,703 541,328 1,211,845 69.90% 38.01% 40.85% 62.28% 44.71% 35.73% 30.40% 28.86% 44.48% 38.71% 45.15% 40.38% 46.42% 40.76% 45.06% 2.4.1 Additional disclosures relating to termination arrangements for former Executive KMP (since exited) – non-statutory Following the organisational restructure coming into effect on 1 July 2023, J Harris, S New and A Todd left the business. J Das left at the time of the announcement of the restructure in April 2023, and P Ferguson left at the completion of the financial year in December 2023. Whilst no longer considered KMP after the restructure, the following section, although a non‑statutory element, contains information about their termination arrangements for additional transparency. All payments were in line with individual contractual terms; pro‑rated where applicable, and in line with good leaver treatment under Iress’ standard plan terms. Former Executive KMP J Harris S New A Todd Total Total termination payments $ 984,911 701,089 823,571 2,509,571 50,955 3,283,069 (4,928) 471,500 1,160,703 6,732,939 48.76% 236,348 4,769,324 (8,576) – – 9,384,505 50.82% Total 2023 3,620,626 137,327 1,196,996 176,470 4,147,091 (2,054) 471,500 1,160,703 10,908,392 48.99% 2022 4,531,337 25,034 – 243,129 5,240,213 (8,576) – – 10,031,137 52.24% Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report  70 Remuneration Report (continued) For the year ended 31 December 2023 71 2.5 Executive KMP actual realised remuneration – non-statutory The differences between the statutory remuneration table in Section 2.4 and the realised remuneration table under this section, is that STI is excluded (as it will not be paid until April 2024, and the plan was only introduced in 2023) and share based payments have been excluded due to being realised on a vested basis, with no monetary amounts therefore included. The value of equity vested to Executive KMP in 2023 (and 2022) is shown below. In addition to the 2019 LTI Performance Rights for the former Group CEO and 2020 LTI Performance Rights for the former Group CEO and other executives, the 2023 realised remuneration includes Deferred Share Rights granted in 2020 under the previous remuneration framework. Total actual realised remuneration decreased in 2023, which was primarily driven by the reduced number of Executive KMP and there being no Transitional Equity Rights vesting in 2023. Transitional Equity Rights were a one‑off grant of Additional Equity Rights in 2019 to recognise the cash flow impact of the changes to the executive remuneration framework in that year. Section 3 Remuneration governance 3.1 Overview The People & Performance Committee (PPC) works closely with the Board to apply the Group’s remuneration philosophy and ensure the Company’s remuneration strategy supports the creation of sustainable shareholder value. One of the main roles of the PPC is to assist and advise the Board to fulfil its responsibilities on remuneration matters. The PPC takes into account a wide variety of information including business strategy and culture, stakeholder interests, market practice, and corporate governance principles. Input from other stakeholders is provided as required. The following table summarises the role and responsibility of the PPC as it pertains to remuneration governance and interaction with other key bodies. Executive KMP M Price P Giles(1) J Hoang(1)(2) H Mitchell(1) C Williamson (3) Total Executive KMP Salary and Fees $ 705,140 168,962 235,429 226,031 347,548 344,715 1,858,863 168,962 Year 2023 2022 2023 2023 2023 2023 2023 2022 Superannuation $ Total Remunerations $ 27,500 6,781 27,500 15,515 27,500 27,500 125,515 6,781 732,640 175,743 262,929 241,546 375,048 372,215 1,984,378 175,743 Board • Consultation between PPC on matters relating to remuneration. • PPC and Board responsible for diversity and inclusion matters. • Approves performance and remuneration arrangements for CEO. • Approves NED fee arrangements. People & Performance Committee (PPC) Consists of members appointed by the Board after due consideration of the composition and skill requirements of the Committee. The PPC aims to meet three times a year. (1) (2) Participants were appointed as KMPs on 1 July 2023. The amounts reflect the part of the year as KMP. J Hoang's salary was fully denominated in Singaporean Dollars and was subject to exchange rate movements. The Australian dollar amounts in the table were converted at an average foreign exchange rate of 0.8938. (3) C Williamson was appointed as KMPs on 24 July 2023. The amounts reflect the part of the year as KMP. Audit & Risk Committee (ARC) Management External Advisors • Refers risk or other related matters relevant to the business of the PPC for PPC examination and action, as required. • Provides recommendations to the PPC on matters relating to remuneration for PPC review, approval, or endorsement. • Provision of independent advice and engagement with the PPC on PPC related matters. • Delegation may be provided by the PPC to management on certain issues, while maintaining independence protocols. • No remuneration recommendations (as defined by the Corporations Act 2001) were provided to the Board by independent advisors during the reporting period. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report72 Remuneration Report (continued) For the year ended 31 December 2023 73 • Approving awards under employee equity plans, the terms on which the equity awards are offered, vesting outcomes and amending, People & Performance Committee The PPC is responsible for: • Making recommendations to the Board in relation to company‑wide remuneration strategies. • Reviewing the remuneration packages for new and current executives (other than the Group CEO, for which remuneration decisions are undertaken at the Board level), and approving the base salary and incentives proposed by the Group CEO under these packages. • Reviewing the performance evaluations prepared by the Group CEO for executives, and reporting on these evaluation criteria and their application to the Board. • Developing and regularly reviewing succession plans prepared by the Group CEO for executives. • Monitoring key appointments and departures as well as trends relating to recruitment, retention, termination, leave and diversity statistics, any key work health and safety issues and human resource projects. • Thorough oversight of remuneration strategies for the executives with consideration of alignment to the success of the Company without rewarding conduct that is contrary to the Company’s values, policies and risk appetite. • Approving the remuneration policy for all other employees. suspending and cancelling plans. • Reviewing the superannuation and pension arrangements for staff on the recommendation of the Group CEO. More information about the Board’s role in remuneration governance can be found at https://www.iress.com/trust/corporate‑ governance/governance‑documents/board‑charter/. 3.2 Executive KMP service agreements All Executive KMP have a formal service agreement. Agreements are of an ongoing nature and have no set term of service. Termination entitlements for Executive KMP are limited to twelve months’ base salary unless shareholder approval is received. The key terms of the service agreement for the Group CEO are summarised below. Criterion Arrangements Term of contract Ongoing. Resignation Termination on notice by Iress Redundancy Termination for serious misconduct Non-compete The Group CEO may resign by providing six months’ written notice.(1) Iress may terminate the employment agreement of the Group CEO by providing six months’ written notice, or payment in lieu of the notice period. If Iress terminates employment for reasons of bona fide redundancy, a severance payment will be made. The quantum of the payment will be determined subject to the Board’s discretion, considering matters such as statutory requirements, the executive’s contribution, position and length of service. Iress may terminate the employment agreement at any time without notice. A non‑compete arrangement exists for a period of six months following employment with the Group.(2) (1) The notice period for Executive KMPs is six months. (2) The non‑compete period for Executives KMPs is six months. Section 4 Non-executive director fees 4.1 Fee policy Non‑Executive Directors (NED) receive fees for their services plus the reimbursement of reasonable expenses. To ensure objective and independent oversight of the Group, a NED does not participate in performance‑based incentives or receive post‑employment benefits. The fee levels that applied during 2023 were: Role Board Additional fees for serving on the committees Audit & Risk Committee Board Chair(1) Member Chair Member Chair Member Fee ($) 240,000 130,000 24,000 Nil 24,000 Nil (1) The Chairman is entitled to the Board Chair fee only (no additional Committee fees). 4.2 Maximum aggregate NED fee pool The maximum aggregate pool available for NED fees is approved by the shareholders at the Annual General Meeting in accordance with the Group’s Constitution. The maximum pool is set around the median of comparable companies, to provide the ability for Iress to attract and retain appropriately qualified and experienced directors. The maximum aggregate fee pool of $1,500,000 per annum was approved at the Annual General Meeting in May 2019. The total amount of remuneration paid to NEDs in 2023 was $1,035,975 (2022:$907,222). Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report 74 Remuneration Report (continued) For the year ended 31 December 2023 4.3 2023 Non-Executive Director remuneration The total remuneration for NEDs during 2023 and 2022 is set out in the table below. This table is prepared in accordance with statutory requirements and accounting standards. Non-Executive Directors R Sharp(2) N Beattie J Cameron(3) M Dwyer J Fahey A Glenning(4)(5) T Vonhoff(6) Total Short-term benefits Post employment entitlements Fees ($) Super- annuation ($) 292,381 217,688 130,000 130,296 51,061 117,382 117,914 139,053 139,683 120,603 26,611 150,185 147,000 949,604 830,253 31,619 22,312 13,975 13,355 5,105 12,618 12,086 14,947 14,317 9,397 2,794 3,815 7,000 86,371 76,969 Year 2023 2022 2023 2022 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 Total(1) ($) 324,000 240,000 143,975 143,651 56,166 130,000 130,000 154,000 154,000 130,000 29,405 154,000 154,000 1,035,975 907,222 (1) NED fees paid are inclusive of superannuation for all NEDs except for N Beattie, who is paid superannuation on‑top of fees due to being based in the UK and the difficulties estimating the proportion of the fees relating to work performed in Australia. P Giles(3) (2) Included in R Sharp's fees, is $84,000 received for additional work or special duties, outside the ordinary ambit of a Chair's role, in respect of additional work to assist management and the CEO in the ongoing corporate transformation. Roger spent a number of weeks working full‑time on the transformation from February through June 2023, beyond the scope of a Non‑Executive Chair role. By agreement, he was compensated for approximately half of the additional time spent. The level and amount of fees were agreed upon by the Audit and Risk Committee Chair. The requirement for additional work is not expected to re‑occur in the 2024 financial year. (3) J Cameron ceased to be a NED on 5 May 2022. (4) A Glenning was appointed to the Board as a NED effective 11 October 2022. (5) Iress was exempt from the Superannuation Guarantee Charge to A Glenning for three months in 2023. (6) Iress was exempt from the Superannuation Guarantee Charge to T Vonhoff for six months in 2022 and nine months in 2023. 75 Section 5 Additional required disclosures 5.1 Unvested equity The table below presents the Historical Equity Rights, Deferred Share Rights and Performance Rights and Options held during the financial year by each Executive KMP. No rights are granted to NED or related parties. Any rights that vest will be automatically exercised on or around the time Iress notifies the participant that their rights have vested. Historical Equity Rights and Deferred Share Rights, as well as LTI Performance Rights are granted for no consideration, and upon vesting, can be exercised at no cost. Options granted in 2022 are exercisable between the vesting date and expiry date upon payment of the exercise price of $13 per option. Iress operates an anti‑hedging policy stating that hedging against unvested instruments is prohibited. The Board’s view is that any participant who enters into such schemes on the unvested component of their equity would be in breach of the terms and conditions of their grant, and the Board would exercise its right to cancel any of these hedged instruments. Executive KMP Executive KMP Type of equity Grant date Number granted Fair value at grant date Vesting date Expiry date Number vested (1)(2) Number % vested lapsed % lapsed Number unvested M Price Equity Rights Performance Rights Performance Rights Options Options 3–Oct–22 13,865 8.25 28–Feb–24 28–Feb–25 3–Oct–22 370,910 1.96 31–Mar–25 31–Mar–25 3–Oct–22 3–Oct–22 3–Oct–22 370,910 666,248 591,582 2.03 31–Mar–26 31–Mar–26 0.61 20–Feb–26 28–Feb–28 0.73 22–Feb–27 28–Feb–29 Total of Equity Rights and Deferred Share Rights Total of Performance Rights Total of Options Total Performance Rights 4–Sep–23 Deferred Shares 28–Feb–23 Deferred Shares 28–Feb–23 Deferred Shares 28–Feb–23 Performance Rights 9–May–22 55,359 2,532 2,531 2,531 0.33 31–Mar–26 31–Mar–26 9.31 27–Feb–26 27–Feb–26 9.31 28–Feb–25 28–Feb–25 9.31 28–Feb–24 28–Feb–24 18,263 2.85 31–Mar–26 28–Feb–27 Total of Equity Rights and Deferred Share Rights Total of Performance Rights Total – – – – – – – – – – 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% – – – – – – – – – – 0.00% 13,865 0.00% 370,910 0.00% 370,910 0.00% 666,248 591,582 0.00% 13,865 741,820 1,257,830 2,013,515 0.00% 0.00% 0.00% 0.00% 55,359 2,532 2,531 2,531 0.00% 18,263 7,594 73,622 81,216 Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report  76 Remuneration Report (continued) For the year ended 31 December 2023 77 Type of equity Grant date Number granted Fair value at grant date Vesting date Expiry date Number vested (1)(2) Number % vested lapsed % lapsed Number unvested Executive KMP J Hoang(5) Former Executive KMP Executive KMP Type of equity Grant date Number granted Fair value at grant date Vesting date Expiry date Number vested (1)(2) Number % vested lapsed % lapsed Number unvested Performance Rights 1–Dec–23 Deferred Shares 28–Feb–23 Deferred Shares 28–Feb–23 Deferred Shares 28–Feb–23 Performance Rights 9–May–22 Deferred Shares 28–Feb–22 Deferred Shares 28–Feb–22 Deferred Shares 28–Feb–22 26–Feb–21 Equity Rights Equity Rights 26–Feb–21 Performance Rights Performance Rights 26–Feb–21 28–Feb–20 66,907 2,821 2,821 2,821 18,263 1,967 1,964 1,964 14,379 1,284 0.33 31–Mar–26 31–Mar–26 9.31 27–Feb–26 27–Feb–26 9.31 28–Feb–25 28–Feb–25 9.31 28–Feb–24 28–Feb–24 – – – – 0.00% 0.00% 0.00% 0.00% 2.85 31–Mar–26 28–Feb–27 10.36 28–Feb–25 28–Feb–25 10.36 28–Feb–24 28–Feb–24 10.36 28–Feb–23 28–Feb–23 8.27 28–Feb–23 28–Feb–23 1–Mar–23 8.27 1–Mar–23 – – – (1,964) (14,379) (1,284) 0.00% 0.00% 0.00% 100.00% 100.00% 100.00% – – – – – – – – – – – 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 66,907 2,821 2,821 2,821 18,263 1,967 1,964 – – – 0.00% 14,379 14,379 2.56 28–Feb–24 28–Feb–24 12,034 3.81 28–Feb–23 28–Feb–23 – – 0.00% 0.00% (12,034) 100.00% – Total of Equity Rights and Deferred Share Rights Total of Performance Rights H Mitchell Total Performance Rights 4–Sep–23 99,569 0.33 31–Mar–26 31–Mar–26 – 0.00% – 0.00% Total of Performance Rights Total C Williamson Performance 12,394 99,549 111,943 99,569 99,569 99,569 Rights 4–Sep–23 106,713 0.33 31–Mar–26 31–Mar–26 – 0.00% – 0.00% 106,713 Total of Performance Rights Total 106,713 106,713 K Fisk(7) J Das(6) Equity Rights Performance Rights Performance Rights Equity Rights Equity Rights Performance Rights 28–Feb–22 21,695 9.32 28–Feb–24 28–Feb–24 (21,695) 100.00% – 0.00% 28–Feb–22 128,398 3.16 31–Mar–25 31–Mar–25 (74,743) 58.21% (53,655) 41.79% 28–Feb–22 26–Feb–21 26–Feb–21 128,398 26,465 2,362 2.84 31–Mar–26 31–Mar–26 2.56 28–Feb–23 28–Feb–23 1–Mar–23 2.56 1–Mar–23 (56,070) (26,465) (2,362) 43.67% 100.00% 100.00% (72,328) – – 56.33% 0.00% 0.00% 26–Feb–21 26,465 8.27 28–Feb–24 28–Feb–24 (24,242) 91.60% (2,223) 8.40% Total of Equity Rights and Deferred Share Rights Total of Performance Rights P Ferguson(7) Total Equity Rights Performance Rights Performance Rights Equity Rights Equity Rights Performance Rights Performance Rights 28–Feb–22 15,384 9.32 3‑Jun‑23 3‑Jun‑23 (15,384) 100.00% 28–Feb–22 91,046 3.16 3‑Jun‑23 3‑Jun‑23 (91,046) 100.00% 28–Feb–22 26–Feb–21 26–Feb–21 91,046 18,766 1,675 2.84 8.27 2.56 3‑Jun‑23 3‑Jun‑23 3‑Jun‑23 3‑Jun‑23 3‑Jun‑23 3‑Jun‑23 (91,046) (18,766) (1,675) 100.00% 100.00% 100.00% 26–Feb–21 18,766 2.56 3‑Jun‑23 3‑Jun‑23 (18,766) 100.00% – – – – – – 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 28–Feb–20 14,762 3.81 3‑Jun‑23 3‑Jun‑23 – 0.00% (14,762) 100.00% Total of Equity Rights and Deferred Share Rights Total of Performance Rights Total 28–Feb–22 28–Feb–22 Equity Rights Performance Rights Performance Rights 28–Feb–22 Deferred Shares 26–Feb–21 Deferred Shares 26–Feb–21 Deferred Shares 28–Feb–20 13,806 9.32 28–Feb–24 28–Feb–24 81,708 3.16 31–Mar–25 31–Mar–25 – – 0.00% 0.00% 81,708 1,639 1,637 1,066 2.84 31–Mar–26 31–Mar–26 9.19 28–Feb–24 28–Feb–24 9.19 28–Feb–23 28–Feb–23 11.86 28–Feb–23 28–Feb–23 – – (1,637) (1,066) 0.00% 0.00% 100.00% 100.00% Total of Equity Rights and Deferred Share Rights Total of Performance Rights Total – – – – – – 0.00% 13,806 0.00% 81,708 0.00% 0.00% 0.00% 0.00% 81,708 1,639 – – 15,445 163,416 178,861 – – – – – – – – – – – – – – – – – – – Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report 78 Remuneration Report (continued) For the year ended 31 December 2023 Executive KMP J Harris J McNeill(5)(7) Type of equity Grant date Number granted Fair value at grant date Vesting date Expiry date Number vested (1)(2) Number % vested lapsed % lapsed Number unvested 28–Feb–22 Equity Rights 28–Feb–22 Performance Rights Performance 28–Feb–22 Rights Equity Rights 26–Feb–21 Equity Rights 26–Feb–21 Performance Rights Performance Rights 26–Feb–21 28–Feb–20 24,457 9.32 28–Feb–24 28–Feb–24 (24,457) 100.00% – 0.00% 144,739 3.16 31–Mar–25 31–Mar–25 (84,256) 58.21% (60,483) 41.79% 144,740 29,833 2,663 2.84 31–Mar–26 31–Mar–26 8.27 28–Feb–23 28–Feb–23 1–Mar–23 2.56 1–Mar–23 (63,207) (29,833) (2,663) 43.67% 100.00% 100.00% (81,533) – – 56.33% 0.00% 0.00% 29,833 2.56 28–Feb–24 28–Feb–24 (27,327) 91.60% (2,506) 8.40% 23,468 3.81 28–Feb–23 28–Feb–23 – 0.00% (23,468) 100.00% Total of Equity Rights and Deferred Share Rights Total of Performance Rights Total – – – – – – – – – – 28–Feb–22 Equity Rights 28–Feb–22 Performance Rights Performance 28–Feb–22 Rights Equity Rights 26–Feb–21 Equity Rights 26–Feb–21 Performance Rights Performance Rights 26–Feb–21 28–Feb–20 16,826 9.32 28–Feb–24 28–Feb–26 99,580 3.16 31–Mar–25 31–Mar–26 – – 0.00% 0.00% 99,581 19,713 1,760 2.84 31–Mar–26 31–Mar–27 8.27 28–Feb–23 28–Feb–25 1–Mar–23 2.56 1–Mar–23 – (19,713) (1,760) 0.00% 100.00% 100.00% 19,713 2.56 28–Feb–24 28–Feb–24 16,553 3.81 28–Feb–23 28–Feb–23 – – 0.00% – – – – – – 0.00% 16,826 0.00% 99,580 0.00% 0.00% 0.00% 99,581 – – 0.00% 19,713 Total of Equity Rights and Deferred Share Rights Total of Performance Rights Total 0.00% (16,553) 100.00% – 16,826 218,874 235,700 79 Grant date Number granted Fair value at grant date Vesting date Expiry date Number vested (1)(2) Number % vested lapsed % lapsed Number unvested Type of equity Equity Rights Performance Rights Performance Rights Equity Rights Equity Rights Performance Rights Performance Rights Executive KMP S New(5) A Todd 28–Feb–22 24,142 9.32 28–Feb–24 28–Feb–26 (24,142) 100.00% – 0.00% 28–Feb–22 142,876 3.16 31–Mar–25 31–Mar–26 (83,953) 58.76% (58,923) 41.24% 28–Feb–22 26–Feb–21 26–Feb–21 142,876 28,284 2,525 2.84 31–Mar–26 31–Mar–27 8.27 28–Feb–23 28–Feb–25 1–Mar–23 2.56 1–Mar–23 (62,979) (28,284) (2,525) 44.08% 100.00% 100.00% (79,897) – – 55.92% 0.00% 0.00% 26–Feb–21 28,284 2.56 28–Feb–24 28–Feb–24 (26,063) 92.15% (2,221) 7.85% 28–Feb–20 23,750 3.81 28–Feb–23 28–Feb–23 – 0.00% (23,750) 100.00% Total of Equity Rights and Deferred Share Rights Total of Performance Rights Total Equity Rights Performance Rights Performance Rights Equity Rights Equity Rights Performance Rights Performance Rights 28–Feb–22 24,851 9.32 28–Feb–24 28–Feb–24 (24,851) 100.00% – 0.00% 28–Feb–22 147,074 3.16 31–Mar–25 31–Mar–25 (97,960) 66.61% (49,114) 33.39% 28–Feb–22 26–Feb–21 26–Feb–21 147,074 30,314 2,706 2.84 31–Mar–26 31–Mar–26 8.27 28–Feb–23 28–Feb–23 1–Mar–23 2.56 1–Mar–23 (73,487) (30,314) (2,706) 49.97% 100.00% 100.00% (73,587) – – 50.03% 0.00% 0.00% 26–Feb–21 30,314 2.56 28–Feb–24 28–Feb–24 (30,314) 100.00% – 0.00% 28–Feb–20 23,846 3.81 28–Feb–23 28–Feb–23 – 0.00% (23,846) 100.00% Total of Equity Rights and Deferred Share Rights Total of Performance Rights Total – – – – – – – – – – – – – – – – – – – – (1) Includes equity instruments held by the individual and in a nominated trust. (2) All Equity Rights, Deferred Share Rights and Performance Rights that vested during the year were exercisable, except for participants in the United Kingdom. For former KMP who have exited, any retained rights with future vesting dates are shown as fully vested at 31 December 2023 in accordance with AASB2 however remain subject to retained performance conditions to the future vesting date. (3) P Giles was awarded Deferred Shares and Performance Rights prior to being appointed KMP on 1 July 2023. (4) J Hoang was awarded Deferred Shares and Performance Rights prior to being appointed KMP on 1 July 2023. (5) Equity Rights vested for United Kingdom participants during the year are not exercisable until the end of the exercise restriction period. (6) J. Das’ number of unvested shares as at 31 March 2023 when ceasing to be a KMP upon exiting the company. (7) Number of unvested shares as at 30 June 2023 of participants when they ceased to be KMPs. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report 81 5.3 Transactions with KMP No transactions (excluding remuneration as outlined in this report) occurred between KMP and the Group during 2023. 5.4 Loans to KMP or related parties No loans to KMP or related parties were provided during 2023. This Directors’ Report has been verified by Management and reviewed by the Company’s Board of Directors and its Audit and Risk Committee. Signed in accordance with a resolution of the Directors made pursuant to s.298(2) of the Corporations Act 2001 (Cth). On behalf of the Directors. Julie Fahey Chair of the People & Performance Committee Melbourne 21 February 2024 80 Remuneration Report (continued) For the year ended 31 December 2023 5.2 Shareholdings The number of ordinary shares held in Iress Limited during the financial year by each KMP is set out below. Included for each individual are shares held on their behalf by the trustee of the Iress Limited Equity Plans Trust and their personally related parties. NED NEDs have a Minimum Shareholding Requirement (MSR) to be met either by 31 December 2023, or within three years of their appointment if past this date. NEDs are required to accrue and hold Iress equity equivalent to 100% of the base fee for being a Member of the Board, unless otherwise determined by the Board. NED R Sharp N Beattie M Dwyer J Fahey A Glenning T Vonhoff Total Balance as at 01 Jan 2023 20,202 15,820 12,609 13,225 – 23,864 85,720 Shares acquired during the year 37,973 6,788 2,000 – 15,455 6,640 Other changes Balance as at 31 Dec 2023 (10,101) – – – – – 48,074 22,608 14,609 13,225 15,455 30,504 Value of holdings as a % of base fees(1) Date Minimum Shareholding Requirement to be met (2)(3) 388% 158% 112% 110% 92% 240% 18 Feb 2024 31 Dec 2022 01 Feb 2023 31 Dec 2022 11 Oct 2025 01 Feb 2023 68,856 (10,101) 144,475 (1) The value of shares for the purpose of the Minimum Shareholding Requirement calculation is the higher of the share price at 31 December 2023 (twenty‑trading‑day volume‑weighted average share price up to and including 31 December 2023) and the purchase price. (2) NEDs appointed on or after 1 January 2020 are required to accrue and hold Iress equity equivalent to 100% of the base fee for being a Member of the Board within three years of their appointment. (3) NEDs appointed prior to 1 January 2020 are required to accrue and hold Iress equity equivalent to 100% of the base fee for being a Member of the Board by 31 December 2022. Executive KMP Executive KMPs have a Minimum Shareholding Requirement to be met within five years of commencing. The CEO is required to accrue and hold Iress equity equivalent to 400% of base salary, which for M Price is required by 3 October 2027. Executives are required to hold 225% of their base salary. Unvested Historical Equity Rights count towards the requirement but unvested Performance Rights and Options do not. Balance as at 1 Jan 2023 63,533 7,683 65,866 ‑ ‑ 137,082 Equity Rights granted during the year Equity Rights Lapsed during the year ‑ ‑ ‑ ‑ ‑ - ‑ ‑ ‑ ‑ ‑ - Shares acquired during the year(1) 15,576 ‑ ‑ 19,569 23,200 58,345 Other changes ‑ ‑ ‑ ‑ ‑ - Balance as at 31 Dec(2) 79,109 7,683 65,866 19,569 23,200 195,427 Executive KMP M Price(6) P Giles(7) J Hoang(7) H Mitchell C Williamson Total (1) Shares acquired by executive KMP during the year were directly acquired (purchased). (2) Includes unvested Historical Equity Rights and excludes unvested Performance Rights and Options. (3) The value of holding as a % of base salary was calculated in accordance with the Minimum Shareholding Requirement Policy. (4) The CEO is required to accrue and hold Iress equity equivalent to 400% of the base salary within five years of appointment. Percentage of holdings value to base salary (3)(4)(5) Date Minimum Share- holding Require- ment to be met (2)(3) 120% 03 Oct 2027 01 Jul 2028 01 Jul 2028 01 Jul 2028 24 Jul 2028 16% 167% 23% 27% (5) Executive KMP appointed on or after 1 January 2019 require to accrue and hold Iress equity equivalent to 225% of their base salary within five years of their appointment. (6) The opening balance includes unvested 2022 Historical Equity Rights. (7) Participants were appointed as KMPs on 1 July 2023. The opening balance reflects the share acquired prior to the date of becoming KMPs. No shares were acquired after the date of becoming a KMP. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportRemuneration Report82 83 Auditor’s Independence Declaration Financial Statements For the year ended 31 December 2023 This is the financial report for Iress Limited (the ‘Company’) and its controlled entities (collectively referred to as the ‘Group’ or ‘Iress’) For the year ended 31 December 2023. Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au Auditor’s independence declaration to the directors of Iress Limited As lead auditor for the audit of the financial report of Iress Limited for the financial year ended 31 December 2023, I declare to the best of my knowledge and belief, there have been: a. No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; b. No contraventions of any applicable code of professional conduct in relation to the audit; and c. No non-audit services provided that contravene any applicable code of professional conduct in relation to the audit. This declaration is in respect of Iress Limited and the entities it controlled during the financial year. Ernst & Young David J Petersen Partner 21 February 2024 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Contents Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Consolidated Financial Statements Section 1. Financial results 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 Segment information Earnings per share and dividends per share Revenue from contracts with customers Employee benefit expenses Share‑based payments Other expenses Amortisation, depreciation, derecognition and impairment Notes to the Consolidated Statement of Cash Flows Section 2. Core assets and working capital 2.1 2.2 2.3 2.4 2.5 2.6 2.7 2.8 Intangible assets Plant and equipment Leases Derivative financial instruments Receivables and other assets Payables and other liabilities Provisions Commitments and contingencies Section 3. Debt facilities, derivatives and equity 3.1 3.2 3.3 Borrowings Issued capital Managing financial risks Section 4. Other disclosures 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 4.9 Taxation Sale of subsidiary Assets held‑for‑sale Iress Limited – parent entity financial information Subsidiaries Deed of cross guarantee Basis of preparation Significant sources of estimation uncertainty Transactions with related parties 4.10 Events subsequent to the Statement of Financial Position date Directors’ Declaration Independent Auditor’s Report Shareholder information Corporate directory 84 85 86 87 88 88 88 90 91 94 95 98 99 100 101 101 104 105 108 110 113 114 115 115 115 117 117 119 119 122 122 123 124 125 126 129 129 129 130 131 136 137 Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 84 85 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 31 December 2023 Consolidated Statement of Financial Position As at 31 December 2023 Revenue from contracts with customers Employee benefit expenses Customer data fees Communication and other technology expenses Professional fees Business development and marketing General office and administration Amortisation, depreciation, derecognition and impairment expense Gains on disposal of subsidiary (Loss)/profit before interest and income tax expense Finance income Finance costs Net finance income and costs (Loss)/profit before income tax expense Income tax expense (Loss)/profit after income tax expense Other comprehensive income Items that may be reclassified to profit or loss: Net movement of cash flow hedge Exchange differences on translation of foreign operations Total other comprehensive income/(loss) for the year Total comprehensive (loss)/profit for the year Earnings per share Basic earnings per share Diluted earnings per share Notes 1.3(a) 1.4 1.6(a) 1.7 4.2 3.1(d) 4.1(a) 2023 $’000 625,743 (347,791) (57,558) (84,951) (30,918) (6,134) (27,875) (193,392) 17,592 (105,284) 1,928 (23,709) (21,781) (127,065) (10,419) (137,484) 150 10,772 10,922 (126,562) 2022 $’000(1) 615,589 (316,309) (55,151) (76,616) (10,643) (3,469) (29,394) (43,396) – 80,611 1,007 (13,698) (12,691) 67,920 (15,248) 52,672 (150) (12,693) (12,843) 39,829 Cents per share Cents per share 1.2(a) 1.2(a) (76.4) (76.4) 28.6 28.0 The Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. (1) Expenses within the comparative information for the year ended 31 December 2022 have been reclassified to present certain items in more detail. ASSETS Current assets Cash and cash equivalents Receivables and other assets Assets held‑for‑sale Current taxation receivables Total current assets Non-current assets Intangible assets Plant and equipment Right‑of‑use assets Deferred tax assets Total non-current assets Total assets LIABILITIES Current liabilities Payables and other liabilities Lease liabilities Provisions Liabilities held‑for‑sale Derivative liabilities Current taxation payables Total current liabilities Non-current liabilities Lease liabilities Provisions Borrowings Deferred tax liabilities Total non-current liabilities Total liabilities Net assets EQUITY Issued capital Share‑based payments reserve Cash flow hedge reserve Foreign currency translation reserve Accumulated losses Total equity Notes 2023 $’000 2022 $’000 1.8(a) 2.5(a) 4.3(a) 2.1(a) 2.2(a) 2.3(c) 4.1(c) 2.6 2.3(d) 2.7(a) 4.3(a) 2.4(d) 2.3(d) 2.7(a) 3.1(a) 4.1(c) 3.2 2.4(d) 43,881 82,997 11,584 2,732 63,353 83,661 – 11,552 141,194 158,566 550,706 23,864 50,281 26,172 651,023 724,998 28,519 60,638 27,340 841,495 792,217 1,000,061 74,466 14,141 17,295 3,650 – 540 69,961 15,447 21,458 – 150 451 110,092 107,467 45,254 1,299 363,563 – 410,116 520,208 272,009 419,343 25,366 – 5,402 (178,102) 272,009 58,880 2,463 388,424 9,014 458,781 566,248 433,813 419,065 26,329 (150) (5,370) (6,061) 433,813 The Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 86 87 Consolidated Statement of Changes in Equity For the year ended 31 December 2023 Consolidated Statement of Cash Flows For the year ended 31 December 2023 Balance at 1 January 2022 Profit for the year Other comprehensive loss Total comprehensive (loss)/income Transactions with owners in their capacity as owners: Shares issued under employee Share Purchase Plan Purchase of shares for employee share schemes On‑market buy‑back of shares Dividends declared or paid Share‑based payment expense, net of tax Transfer of share‑based payments reserve(2) Balance at 31 December 2022 Balance at 1 January 2023 Loss for the year Other comprehensive income Total comprehensive income/(loss) Transactions with owners in their capacity as owners: Shares issued under employee Share Purchase Plan Dividends declared or paid Share‑based payment expense Cash settled equity shares Transfer of share‑based payments reserve(2) Issued Capital $’000 493,883 – – – 394 (22,957) (52,255) – – – (74,818) 419,065 Issued Capital $’000 419,065 – – – 278 – – – – 278 Balance at 31 December 2023 419,343 26,178 – – – – – – – 18,747 (18,596) 151 26,329 Share-based Payments Reserve $’000 Cash flow hedge reserve(1) $’000 Foreign Currency Translation Reserve $’000 Retained Earnings/ (Accumulated Losses) $’000 – – (150) (150) 7,323 – (12,693) (12,693) 9,529 52,672 – 52,672 Total Equity $’000 536,913 52,672 (12,843) 39,829 – – – – – – – – – – – – – – – 394 – – (86,858) – 18,596 (22,957) (52,255) (86,858) 18,747 – (68,262) (142,929) (150) (5,370) (6,061) 433,813 Share-based Payments Reserve $’000 Cash flow hedge reserve(1) $’000 26,329 – – – – – 20,500 (645) (20,818) (963) 25,366 (150) – 150 150 – – – – – – – Foreign Currency Translation Reserve $’000 (5,370) – 10,772 10,772 Accumulated Losses $’000 (6,061) (137,484) – Total Equity $’000 433,813 (137,484) 10,922 (137,484) (126,562) – – – – – – – (55,375) – – 20,818 (34,557) 278 (55,375) 20,500 (645) – (35,242) 5,402 (178,102) 272,009 The Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. (1) The cash flow hedge reserve represents the cumulative amount of gains and losses on hedging instruments deemed effective in cash flow hedges. The cumulative deferred gain or loss on the hedging instrument is recognised in profit or loss only when the hedged transaction affects the profit or loss, or is included directly in the initial cost or other carrying amount of the hedged non‑financial items (basis adjustment). (2) The movement from share‑based payment reserves to accumulated losses represents the grant date fair value of share‑based payments that have vested or lapsed during the year. The amount had previously been recognised as a share‑based payment expense over the vesting period. Details of share‑based payment arrangements are provided in Note 1.5. Cash flows from operating activities Receipts from customers Payments to suppliers Payments to employees Interest received Interest and borrowing costs paid Interest on lease liabilities Income tax paid Net cash inflow generated from operating activities Cash flows from investing activities Payments for development of intangible assets Payments for purchase of plant and equipment Proceeds from sale of plant and equipment Payment for deferred consideration Proceeds from disposal of subsidiary Net cash inflow generated from/(outflow utilised by) investing activities Cash flows from financing activities Purchase of shares for employee share schemes On‑market buyback of shares Share buyback fees paid Proceeds from employee share plan repayments Payment of lease liabilities Dividends paid Proceeds from borrowings Repayment of borrowings Net cash outflow utilised by financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at the beginning of the financial year Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at end of the year Notes 2023 $’000 2022 $’000 2.3(a) 1.8(b) 2.1(a) 2.2(a) 2.7(b) 3.2 3.2 3.2 3.2 2.3(d) 3.1(b) 3.1(b) 701,817 (281,190) (326,641) 1,917 (21,307) (1,924) (9,007) 63,665 (14,059) (5,369) 6 – 45,208 25,786 – – – 278 (17,104) (55,424) 114,471 (150,471) (108,250) (18,799) 63,353 (673) 43,881 685,855 (251,066) (295,499) 537 (11,151) (2,309) (13,788) 112,579 (19,903) (7,706) 53 (4,400) – (31,956) (22,957) (52,224) (31) 394 (15,283) (86,896) 369,850 (270,704) (77,851) 2,772 64,393 (3,812) 63,353 The Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 88 Notes to the Consolidated Financial Statements For the year ended 31 December 2023 Section 1. Financial results 1.1 Segment information Operating segments have been reported in a manner consistent with internal management reporting provided to the chief operating decision‑maker (“CODM”). The CODM consists of the Managing Director and Chief Executive Officer. (a) Operating segments Iress’ business revenues are predominantly derived from software development and distribution. During the year, Iress changed its organisation structure from being functionally‑led to product‑led. As a result of the organisational structure change, Iress’ operating segments have changed from those disclosed in prior periods to reflect the new product led structure and internal reporting to the CODM. Segment information for the year ended 31 December 2022 has also been restated to reflect the new operating segments. Iress Group has determined the following distinct reportable business segments on which the Group reports its primary segment information: APAC Trading & Global Market Data • APAC Trading & Global Market Data provides comprehensive solutions to financial market participants, encompassing market data, trading, compliance, order management, portfolio, and related tools designed to enhance business efficiencies. APAC Wealth Management • APAC Wealth Management provides financial advice software and related tools to the advice and superannuation industries. Superannuation • Superannuation provides fund administration software, services and related tools to the Australian superannuation industry. Managed Portfolio – UK Portfolio of ancillary businesses, comprising: • UK Financial Markets provides information, trading, compliance, order management, portfolio systems, and related tools to cash equity participants • UK Wealth Management provides financial advice software and related tools to wealth management professionals located in the United Kingdom • Sourcing provides insurance and mortgage comparison tools for UK financial advisers • Mortgages provides mortgage origination software and associated consulting services to banks in the United Kingdom. Managed Portfolio – Other Portfolio of ancillary businesses in South Africa, Canada and Australia comprising: • Financial Markets businesses provide comprehensive solutions, encompassing information, trading, compliance, order management, portfolio systems and related tools to financial market participants located in South Africa and Canada • Wealth Management provides financial planning systems and related tools to wealth management professionals located in South Africa • Platform administration services provides technology and data services to the Australian wealth industry, bringing innovative solutions to support licensees, advisers and stockbrokers to deliver services to their clients. Platform fund administration services include managed funds, managed accounts and administration services. The CODM assesses the performance of each operating segment based on underlying earnings before tax, depreciation and amortisation (underlying EBITDA). This is a non‑IFRS measure that excludes items not considered relevant in evaluating segment performance. This includes the amortisation and impairment of intangible assets, transaction and integration costs together with investment gains and losses associated with mergers and acquisitions, and other significant non‑operating items including, interest income and expense, tax and non‑recurring transformation expenses that are not considered part of the ongoing run‑rate of the business. (b) The segment revenue, underlying earnings/(loss) before interest, tax, depreciation and amortisation (EBITDA) and reconciliation to the Group results are outlined below: APAC Trading & Global Market Data $’000 APAC Wealth Management $’000 174,357 (106,619) (22,756) 44,982 132,749 (54,178) (23,502) 55,069 Super- annuation $’000 49,948 (41,890) (6,780) 1,278 Managed Portfolio – UK $’000 158,950 (99,931) (23,491) 35,528 Managed Portfolio – Other $’000 99,585 (80,215) (9,842) 9,528 APAC Trading & Global Market Data $’000 APAC Wealth Management $’000 178,503 (110,785) (27,220) 40,498 130,419 (57,591) (25,676) 47,152 Super- annuation $’000 54,186 (49,045) (7,653) (2,512) Managed Portfolio – UK $’000 167,898 (104,599) (28,617) 34,682 Managed Portfolio – Other $’000 94,737 (74,878) (11,399) 8,460 For the year ended 31 December 2022 (restated) Revenue from contracts with customers Direct operating expenses Other expenses Underlying EBITDA Non‑operating items(1) Amortisation, depreciation, derecognition and impairment expense Profit/(loss) before interest and income tax expense Net interest and financing expenses Profit before income tax expense Income tax expense Profit after income tax expense For the year ended 31 December 2023 Revenue from contracts with customers Direct operating expenses Other expenses Underlying EBITDA Non‑operating items(1) Amortisation, depreciation, derecognition and impairment expense Gains on disposal of subsidiary Profit/(loss) before interest and income tax expense Net interest and financing expenses Loss before income tax expense Income tax expense Loss after income tax expense 89 Total $’000 615,589 (382,833) (86,371) 146,385 (22,378) (43,396) 80,611 (12,691) 67,920 (15,248) 52,672 Total $’000 625,743 (396,898) (100,565) 128,280 (57,764) (193,392) 17,592 (105,284) (21,781) (127,065) (10,419) (137,484) (1) Predominantly relates to significant non‑recurring project related expenses, business acquisition and integration expenses and realised and unrealised foreign exchange gains and losses. (c) Geographical information Iress Group has an established international infrastructure targeted to serve markets in the following geographical segments, namely: • Asia Pacific • UK & Europe • Africa • North America Australia, Malaysia, New Zealand and Singapore France and United Kingdom South Africa and Tunisia Canada and United States of America Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements  90 91 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 1.1 Segment information (continued) (c) Geographical information (continued) The following table provides an analysis by geographical market of the Group’s operating revenue irrespective of the origin of the goods and services and summarised statement of financial position: For the year ended 31 December 2022 Revenue from contracts with customers Non‑current assets For the year ended 31 December 2023 Revenue from contracts with customers Non‑current assets Asia Pacific $’000 UK & Europe $’000 346,987 486,594 201,506 329,293 Asia Pacific $’000 UK & Europe $’000 347,642 424,416 210,881 204,207 Africa $’000 43,445 14,803 Africa $’000 42,205 12,067 North America $’000 23,651 10,805 North America $’000 25,015 10,333 Total $’000 615,589 841,495 Total $’000 625,743 651,023 Total assets and liabilities are reviewed at a consolidated Iress Group level, and segment assets and liabilities are not regularly reviewed by the CODM. 1.2 Earnings per share and dividends per share (a) Basic and diluted earnings per share, and dividends per share, for the year are: (Loss)/profit per share Diluted (loss)/profit per share(1) Dividends per share: Interim dividend franked to 0% (2022: 25%) Final dividend declared after the Statement of Financial Position date (2022: franked to 0%) Cents per share Cents per share 2023 (76.4) (76.4) – – 2022 28.6 28.0 16.0 30.0 (1) Potentially dilutive ordinary shares for the year ended 31 December 2023 have not been included in the calculation of diluted earnings per share as they were considered anti‑dilutive. (b) The weighted average number of shares used to calculate earnings per share is as follows: Weighted average number of ordinary shares used in basic earnings per share Effect of potentially dilutive shares Weighted average number of ordinary shares used in diluted earnings per share Number of shares 2023 ‘000 179,960 5,518 185,478 Number of shares 2022 ‘000 184,157 4,078 188,235 (c) Dividends recognised during the year and after the Statement of Financial Position date were as follows: Dividends paid during the year Final dividend for the 2022 financial year: 30.0 cents per share franked to 0% (2021: 30.0 cents per share franked to 15%) Interim dividend for the 2023 financial year: nil (2022: 16.0 cents per share franked to 25%) Dividends declared after balance date Final dividend for the 2023 financial year: nil (2022: 30.0 cents per share franked to 0%) Franking credit balance Franking credits available for subsequent reporting periods based on a tax rate of 30% (2022: 30%) 2023 $’000 2022 $’000 55,375 – 55,375 – 27 56,889 29,969 86,858 55,375 185 1.3 Revenue from contracts with customers Iress designs, develops, and delivers technology solutions for the financial services industry in Australia, Asia, New Zealand, UK & Europe, South Africa and North America. From these activities, Iress generates the following streams of revenue: • Software licence revenue • Implementation and consulting revenue • Royalties revenue from the provision of financial market information • Other ancillary fees such as hosting and support service fees. Each of the above services delivered to customers are considered separate performance obligations, even though for practical expedience they may be governed by a single legal contract with the customer. Revenue recognition for each of the above revenue streams is as follows: Revenue stream Performance obligation Timing of recognition Software licence revenue Access to software. Implementation and consulting revenue As defined in the contract. For implementation revenue – typically the completion of data conversions, completion of user acceptance testing, provision of functional environments. Royalties revenue Provision of financial market information. Other ancillary fees Provision of hosting services, cloud services, support and maintenance services. Software licence revenue is recognised over time as the customer simultaneously receives and consumes the benefit of accessing the software. Revenue can either be calculated based on the number of licences used and rate per licence, or as a negotiated package for large customers, or based on funds under administration or transaction volume. Software licence revenue is recognised as the amount to which the Group has a right to invoice. Customers are typically invoiced monthly and consideration is payable when invoiced, which corresponds directly with the performance completed to date in respect of this stream. Revenue is recognised over time as services are delivered. Revenue from providing services is recognised in the accounting period in which the services are rendered. Revenue is calculated based on time and materials used. For fixed‑price contracts, revenue is recognised based on the actual service provided to the end of the reporting period. Recognition is determined based on the actual labour hours spent as a proportion of total expected hours. This requires a judgement of the forecast expected hours and changes in implementation timing. If contracts include the installation of hardware, revenue for the hardware is recognised at a point in time when the hardware is delivered, the legal title has passed, and the customer has accepted the hardware. Royalties revenue is recognised over time as the customer simultaneously receives and consumes the benefit of accessing the information. Royalties revenue is recognised as the amount to which the Group has the right to invoice. Customers are typically invoiced monthly and consideration is payable when invoiced, which corresponds directly with the performance completed to date in respect of this stream. Over time, as the customer simultaneously receives and consumes the benefit of the communication line/server hardware/cloud infrastructure. Customers are typically invoiced monthly in advance in accordance with their agreements. There is generally a longer lead time for new lines/servers than the other revenue streams. Some contracts include multiple deliverables, such as implementation services and software licences. Because the implementation services do not include client‑specific material software customisation, and could be performed by another party, the implementation service and software licences are accounted for as separate performance obligations. In these cases, the transaction prices are allocated to each performance obligation based on the stand‑alone selling prices. Where these are not directly observable, they are estimated based on expected cost plus a margin. Principal versus Agent In accordance with AASB 15 Revenue from contracts with customers, a principal recognises revenue and the corresponding expenses in gross amounts, whereas an agent recognises fees or commissions, irrespective of whether gross cash flows pass through the agent. Upon the inception of Iress entering into an agreement to provide goods or services to a customer, Iress determines whether the nature of its promise is a performance obligation to provide the specified goods or services itself and act as a principal or whether it arranges for those goods or services to be provided by the other party and act as an agent. Iress has assessed that for most of its revenue streams such subscription services, trading services, royalties, news and trading volumes to be acting as a principal and recognises revenue in the gross amount of consideration to which it expects to be entitled in exchange for the specified good or service transferred. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 92 93 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 1.3 Revenue from contracts with customers (continued) In fixed‑price contracts, the customer pays the fixed amount based on an agreed payment schedule. If the services rendered by the Group exceed the payment, a contract asset is recognised. If the payments exceed the services rendered, a contract liability is recognised. If the contract includes an hourly fee, revenue is recognised at the amount to which the Group has the right to invoice (i.e. based on hours actually incurred in providing the service to the client). Customers are generally invoiced monthly for their access in that month, and consideration is payable when invoiced. (a) Revenue by geographical segment: Revenue stream For the year ended 31 December 2022 Software licence revenue Royalties revenue Other ancillary fees Implementation and consulting revenue Total revenue Revenue stream For the year ended 31 December 2023 Software licence revenue Royalties revenue Other ancillary fees Implementation and consulting revenue Total revenue Revenue recognition Over time Over time Over time Over time Revenue recognition Over time Over time Over time Over time Asia Pacific $’000 296,274 29,495 11,591 9,627 346,987 Asia Pacific $’000 295,348 28,699 10,039 13,556 347,642 UK & Europe $’000 162,261 12,385 5,355 21,505 201,506 UK & Europe $’000 171,458 12,112 6,142 21,169 210,881 Africa $’000 39,801 1,973 1,566 105 43,445 Africa $’000 39,897 1,116 1,105 87 42,205 North America $’000 18,785 3,072 1,794 – 23,651 North America $’000 20,235 3,082 1,698 – 25,015 (b) Receivables, contract assets, and contract liabilities from contracts with customers by geographical segment: For the year ended 31 December 2022 Trade receivables Contract assets Contract liabilities For the year ended 31 December 2023 Trade receivables Contract assets Contract liabilities Asia Pacific $’000 20,867 6,240 (1,447) Asia Pacific $’000 16,976 3,646 (987) UK & Europe $’000 11,088 5,714 (15,408) UK & Europe $’000 8,711 3,434 (15,248) Notes 2.5(a) 2.5(a) 2.6 Notes 2.5(a) 2.5(a) 2.6 Africa $’000 2,100 350 (79) Africa $’000 1,475 426 (20) North America $’000 745 – (267) North America $’000 928 – (227) Total $’000 517,121 46,925 20,306 31,237 615,589 Total $’000 526,938 45,009 18,984 34,812 625,743 Total $’000 34,800 12,304 (17,201) Total $’000 28,090 7,506 (16,482) (c) Revenue recognised in relation to contract assets and liabilities: Balance at the beginning of the year Transfer from contract assets to receivables Revenue raised for work performed but not yet billed Decrease due to revenue recognised from performance obligations satisfied Increase due to cash received, excluding amount recognised during the year Reclassified to assets held‑for‑sale Foreign currency translation Balance at the end of the year Contract assets Contract liabilities 2023 $’000 12,304 (12,600) 8,512 – – (993) 283 7,506 2022 $’000 13,687 (13,460) 12,341 – – – (264) 12,304 2023 $’000 (17,201) – – 17,858 (16,651) 124 (612) (16,482) 2022 $’000 (16,504) – – 16,063 (16,907) – 147 (17,201) (d) Transaction price allocated to the remaining performance obligations Revenue from existing contracts expected to be recognised in the future which relates to performance obligations that are unsatisfied (or partially satisfied) at the reporting date: Year in which transaction price is expected to be realised 2024 2025 2026 Total Revenue stream Software licence revenue Implementation and consulting revenue Royalties revenue Other ancillary fees Total revenue Software licence revenue Implementation and consulting revenue Total revenue Implementation and consulting revenue Total revenue Software licence revenue Implementation and consulting revenue Royalties revenue Other ancillary fees Total revenue Revenue recognition Over time Over time Over time Over time Over time Over time Over time Over time Over time Over time Over time Asia Pacific $’000 1,034 4,031 9 – 5,074 – 3,700 3,700 631 631 1,034 8,362 9 – 9,405 UK & Europe $’000 3,264 597 – – 3,861 283 – 283 – – 3,547 597 – – 4,144 Africa $’000 North America $’000 – – – 20 20 – – – – – – – – 20 20 – – – 227 227 – – – – – – – – 227 227 Total $’000 4,298 4,628 9 247 9,182 283 3,700 3,983 631 631 4,581 8,959 9 247 13,796 The Group applies the practical expedient in the revenue standard and does not disclose information about the remaining performance obligation on contracts that have an original expected duration of one year or less, or where the Group has the right to consideration from a customer in an amount that corresponds directly with the value to the customer of the Group’s performance to date. The table above, therefore, does not include revenue expected to be recognised in future years on software licences, royalties and other ongoing contracts where the Group will recognise revenue in the amount to which the entity has a right to invoice. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 94 95 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 1.4 Employee benefit expenses Short‑term employee benefits, mainly comprising base salary and annual leave costs, are expensed as the employee renders services. Post‑employment benefits, which comprise Iress’ contribution to defined contribution retirement plans, are expensed as the service is received from the employee. Termination benefits are amounts paid to employees when their employment is terminated. These are expensed when Iress can no longer withdraw the offer of the termination benefit. Short‑term and other employee benefits Post‑employment benefits Termination benefits and redundancy expenses Share‑based payment expense Employee administration expense Total employee benefit expenses Notes 1.5(c) 2023 $’000 (280,764) (24,468) (14,062) (20,500) (7,997) 2022 $’000 (267,661) (23,546) (614) (18,747) (5,741) (347,791) (316,309) Key Management Personnel Executive and Non‑Executive Director Key Management Personnel compensation included in total employee benefits: Short‑term and other employee benefits Long‑term employee benefits Post‑employment benefits Share‑based payment expense Termination benefits 2023 $’000 (5,904) 2 (263) (4,147) (1,632) 2022 $’000 (5,343) 9 (320) (4,201) – (11,944) (9,855) Detailed remuneration disclosures are provided in the Audited Remuneration Report, including a description of the executive remuneration framework. 1.5 Share-based payments The grant date fair value of equity settled share‑based payment awards granted to employees is recognised as an expense, with a corresponding increase to shareholders equity, over the vesting period of the awards. The amount recognised as an expense is fair valued at the time the award is granted reflecting the number of awards for which the related service and non‑market performance conditions are expected to meet. Therefore, the amount ultimately recognised is based on the number of awards that meet the related service and non‑market performance conditions at the vesting date. (a) Details of share plans To assist in the attraction, retention and motivation of employees, the Group operated the following share‑based payment plans up to the end of 2023: Plan Key terms Performance condition/exercise price Performance/ restriction/exercise period Dividends received before vesting Executive Options Plan – CEO – 2022 CEO receives options in return for a 30% reduction in fixed remuneration Price payable on exercise is $13 per option No 3.4 years followed by 2 year exercise period; and 4.4 years followed by 2 year exercise period If participant leaves before end of performance period Generally retained (pro‑rata if CEO leaves before grant 1 vesting) Executive Equity Rights – From 2019 Executive PR Plan – CEO – 2022 Executive PR Plan – 2022 Employee PR Plan – 2022 Executive PR Plan – former CEO – From 2019 to 2021 Executive PR Plan – From 2019 to 2021 Employee Deferred Share Plan – From 2019 Employee Deferred Share Rights Plan – From 2019 OneIress Equity award/UK Share Incentive Plan Eligible participants receive equity rights at no cost Individual performance criteria Eligible participants receive performance rights at no cost Absolute total shareholder return (ATSR) gateway and 3 additional performance measures 2 years vesting followed by 2 year holding lock 3 years followed by 1 year holding lock; and 4 years followed by 1 year holding lock 4 years followed by 1 year holding lock Eligible participants receive performance rights at no cost Absolute total shareholder return (ATSR) against hurdles 3 years Individual performance criteria Nil 3 years (vesting in equal portions annually) 3 years (vesting in equal portions annually) 3 years Eligible participants receive deferred shares at no cost Eligible participants receive deferred rights at no cost Eligible participants are invited to acquire Iress shares, Iress matches this participation to a set value No but dividend equivalent “top‑up” on vesting Generally forfeited (Board discretion may apply) No No Yes Yes Yes Generally forfeited (Board discretion may apply) Generally forfeited (Board discretion may apply) Generally forfeited (Board discretion may apply) Matched shares are forfeited under the UK Share Incentive Plan and released under the General Employee Share Plan and OneIress Equity Plan As at 31 December 2023, the total unvested shares in the OneIress Equity award were 122,649 shares (2022: 95,214) and 948 unvested share rights (2022: 297). Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements  96 97 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 1.5 Share-based payments (continued) (b) Grant date fair value The grant date fair value of the employee deferred share plans reflects the market price of shares on the grant date given that the awards provide dividends to recipients of grants throughout the vesting period. The grant date fair value of Executive Plans are independently determined using a Monte Carlo simulation option pricing model. This uses standard option pricing inputs such as the underlying share price, exercise price, expected dividends, expected risk free rates and expected share price volatility. Key inputs include: Grant date fair value Key inputs in determining grant date fair value(1) Model used Risk free rate Share price volatility Dividend yield Equity rights Risk free rate Share price volatility Dividend yield Performance rights Risk free rate Share price volatility Dividend yield Options Risk free rate Share price volatility Dividend yield Executive Equity Rights Executive Performance Rights Executive Options Employee Performance Rights Black Scholes 1.095%–3.26% 25.00%–30.00% Monte Carlo 2.99%–3.84% 25.00%–27.50% Black Scholes 3.49%–3.53% 27.50% Monte Carlo 3.10%–3.39% 25.00%–27.50% 0.00% 4.25%–5.00% 4.00% 4.00%–5.00% CEO Former CEO Executive 3.26% 30.00% 0.00% 0.07%–3.04% 25.00% 0.00% CEO Former CEO Executive 3.35%–3.39% 27.50% 4.00% 2.99%–3.10% 25.00% 2.99%–3.84% 25.00%–27.50% 5.00% 4.25%–5.00% MSO 3.39% 27.50% 4.00% 1.10% 25.00% 0.00% Gilligan 3.37% 27.50% 4.25% CEO 3.49%–3.53% 27.50% 4.00% (1) The range of inputs shown represent the low and high points of the inputs used in valuing the various share based payment grants made by Iress during the 2022 and 2023 financial years. Refer to the tables in Note 1.5(c) for the grant dates for each grant made. As the vesting conditions of the Employee Deferred Share Plan grants are not subject to performance hurdles and participants receive dividends during the vesting period, the grant date fair value of the award approximates the share price at the date of grant. (c) Details of shares or rights on issue and amounts expensed during the financial year: Number of shares At grant date Expenses Type Grant date Vesting date Executive Plans – CEO 2022 Grant – ER 2022 Grant – PR 2022 Grant – PR 2022 Grant – Options 2022 Grant – Options 09 May 2022 28 Feb 2024 09 May 2022 31 Mar 2025 09 May 2022 31 Mar 2026 20 Feb 2026 03 Oct 2022 22 Feb 2027 03 Oct 2022 Executive Plans – Former CEO 2020 Grant – PR 2021 Grant – ER 2021 Grant – PR 2022 Grant – ER 08 May 2020 28 Feb 2023 28 Feb 2023 07 May 2021 07 May 2021 28 Feb 2024 09 May 2022 28 Feb 2024 Executive Plans – Non-CEO 2020 Grant – PR 2021 Grant – ER 2021 Grant – PR 2022 Grant – ER 2022 Grant – PR 2022 Grant – PR 2023 Grant – PR 2023 Grant – PR 2023 Grant – PR 28 Feb 2020 28 Feb 2023 28 Feb 2023 26 Feb 2021 28 Feb 2024 26 Feb 2021 28 Feb 2024 28 Feb 2022 31 Mar 2025 28 Feb 2022 31 Mar 2026 28 Feb 2022 31 Mar 2026 04 Sep 2023 31 Mar 2026 04 Sep 2023 31 Mar 2026 04 Sep 2023 At 1 Jan 2023 13,865 370,910 370,910 666,248 591,582 2,013,515 80,916 97,089 102,863 79,592 360,460 157,654 262,909 211,873 141,161 835,421 835,423 – – – Granted Forfeited Vested At 31 Dec 2023 – – – – – – – – – – – – – – – – – – – – – – 13,865 370,910 370,910 666,248 591,582 – 2,013,515 (80,916) – (31,888) – – (97,089) (70,975) (79,592) (112,804) (247,656) – – – – – – 32,134 – – – – 185,997 185,997 186,004 (157,654) – (7,437) – (222,175) (307,345) – – – – (295,043) (162,434) (110,529) (431,958) (346,789) – – – – – 42,002 30,632 181,288 181,289 185,997 185,997 186,004 2,444,441 590,132 (694,611) (1,346,753) 993,209 Employee PR Plan 2022 Grant – PR 2022 Grant – PR 09 May 2022 31 Mar 2026 31 Mar 2026 03 Oct 2022 1,739,523 449,348 – – (714,170) – (57,424) – 967,929 449,348 2023 Grant – PR 31 May 2023 31 Mar 2026 – 41,091 – – 41,091 2,188,871 41,091 (714,170) (57,424) 1,458,368 Share price $ 10.36 10.36 10.36 10.36 10.36 10.92 10.01 10.01 10.36 11.86 9.19 9.19 10.36 10.36 10.36 10.36 10.36 10.36 10.36 11.67 10.95 Fair value $ 2023 $’000 8.25 1.96 2.03 0.61 0.73 2.61 9.01 3.19 9.54 3.81 8.27 2.56 9.32 3.16 2.84 0.33 0.33 0.33 2.85 2.03 3.02 (57) (233) (183) (120) (98) (691) – – – – – (27) (123) (300) (741) (1,996) (1,709) (15) (15) (15) (4,941) (591) (261) (26) (878) Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 98 99 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 1.5 Share-based payments (continued) (c) Details of shares or rights on issue and amounts expensed during the financial year (continued): Number of shares At grant date Expenses Type Grant date Vesting date Employee Deferred Share Plan 2020 Grant – EAG 2021 Grant – EAG 2021 Grant – EAG 2022 Grant – EAG 2022 Grant – EAG 2022 Grant – EAG 2023 Grant – EAG 2023 Grant – EAG 2023 Grant – EAG 28 Feb 2020 28 Feb 2023 28 Feb 2023 26 Feb 2021 26 Feb 2021 28 Feb 2024 28 Feb 2022 28 Feb 2023 28 Feb 2022 28 Feb 2024 28 Feb 2022 28 Feb 2025 28 Feb 2023 28 Feb 2024 28 Feb 2023 28 Feb 2025 28 Feb 2023 27 Feb 2026 Employee Deferred Share Rights Plan 2020 Grant – EAG 2021 Grant – EAG 2021 Grant – EAG 2022 Grant – EAG 2022 Grant – EAG 2022 Grant – EAG 2023 Grant – EAG 2023 Grant – EAG 2023 Grant – EAG 28 Feb 2020 28 Feb 2023 26 Feb 2021 28 Feb 2023 28 Feb 2024 26 Feb 2021 28 Feb 2022 28 Feb 2023 28 Feb 2022 28 Feb 2024 28 Feb 2022 28 Feb 2025 28 Feb 2023 28 Feb 2024 28 Feb 2023 28 Feb 2025 28 Feb 2023 27 Feb 2026 At 1 Jan 2022 272,351 408,915 408,918 473,892 473,892 474,859 – – – Granted Forfeited Vested At 31 Dec 2022 Share price $ (1,002) – (2,267) – (29,225) – (3,472) – (47,517) 706 (64,283) 471 (75,675) 606,753 606,360 (96,902) 606,750 (104,022) (271,349) (406,648) (39,573) (470,420) (51,161) (34,338) (43,284) (21,664) (14,487) – – 340,120 – 375,920 376,709 487,794 487,794 488,241 2,512,827 1,821,040 (424,365) (1,352,924) 2,556,578 9,493 16,145 16,181 17,934 17,934 17,967 – – – – – – – – – 27,115 27,115 27,120 – – (378) – (172) (326) (527) (743) (816) (9,493) (16,145) (1,335) (17,934) (457) (306) (433) (217) (145) – – 14,468 – 17,305 17,335 26,155 26,155 26,159 95,654 81,350 (2,962) (46,465) 127,577 11.86 9.19 9.19 10.36 10.36 10.36 9.31 9.31 9.31 11.86 9.19 9.19 10.36 10.36 10.36 9.31 9.31 9.31 Fair value $ 11.86 9.19 9.19 10.36 10.36 10.36 9.31 9.31 9.31 11.86 9.19 9.19 10.36 10.36 10.36 9.31 9.31 9.31 2023 $’000 (162) (282) (1,017) (758) (2,052) (1,372) (4,210) (2,103) (1,405) (13,361) (6) (12) (47) (30) (92) (61) (208) (104) (69) (629) Total 9,615,768 2,533,613 (1,948,912) (3,051,222) 7,149,247 (20,500) The weighted average remaining contractual life of the above grants is 1.7 years (2022: 1.9 years). 1.6 Other expenses (a) The (loss)/profit before income tax includes the following general office and administration items: Irrecoverable trade debtors written off Credit loss allowances released to profit and loss Business acquisition & divestments, integration and restructuring expenses Office related expenses and business insurance premiums Rental expense relating to short‑term or low‑value leases (Recognition)/release of onerous contracts Release/(recognition) of provision for restructure Other operating expenses Other non operating income Realised and unrealised foreign exchange losses Total general office and administration Notes 2.3(e) 2.7(b) 2023 $’000 (923) 662 (4,100) (12,038) (186) (514) 169 (10,051) 393 (1,287) (27,875) 2022 $’000 (361) 331 (9,810) (12,486) (175) 504 (92) (7,127) 673 (851) (29,394) (b) Remuneration of the auditors, Ernst & Young (2022: Deloitte Touche Tohmatsu), for services rendered are as follows: Auditors of the parent entity Fees for auditing the statutory financial report of the parent covering the group and auditing the statutory financial reports of any controlled entities Fees for assurance services that are required by legislation to be provided by the auditor Fees for other assurance and agreed‑upon‑procedures services under other legislation or contractual arrangements where there is discretion as to whether the service is provided by the auditor Fees for other non‑audit services(1) Total audit fees to the parent entity Overseas member firms of the parent entity auditor Fees for audit or review of the financial report of any controlled entities Total audit fees to overseas member firms of the parent entity Total auditor’s remuneration of parent entity auditors (1) Other non‑audit services comprise tax compliance, workforce mobility and people services. 2023 $ 2022 $ (844,625) (58,050) (470,100) (329,588) (655,367) (56,517) (504,527) (86,400) (1,702,363) (1,302,811) (382,384) (382,384) (387,644) (387,644) (2,084,747) (1,690,455) 1.7 Amortisation, depreciation, derecognition and impairment Amortisation and depreciation are calculated on a straight line basis over the expected useful life of the respective assets. Amortisation of intangible assets Depreciation of plant and equipment Depreciation of right‑of‑use assets Impairment of goodwill(1) Losses on the derecognition of intangible assets(2) Losses on the disposal of plant and equipment Gains on the disposal of right‑of‑use assets Gains on the fair value of lease right‑of‑use‑asset and liabilities Gains/(losses) on the disposal of Investment Notes 2.1(a) 2.2(a) 2.3(c) 2.1(a) 2.1(a) 2.2(a) 2.3(e) 2.3(e) 2023 $’000 (27,045) (10,001) (13,958) (130,384) (13,329) (416) 617 1,053 71 2022 $’000 (16,084) (10,345) (14,227) – (2,265) (523) 72 – (24) Total amortisation, depreciation, derecognition and impairment expense (193,392) (43,396) (1) Impairment of goodwill relating to the UK CGU (Refer to Note 2.1). (2) Derecognition of capitalised internally developed computer software and acquired other intangible assets (Refer to Note 2.1). Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 100 101 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 1.8 Notes to the Consolidated Statement of Cash Flows (a) Cash and cash equivalents comprise cash at bank held in the following currencies, translated to Australian dollars: Australian Dollar Euro British Pound United States Dollar South African Rand Other currencies Total cash and cash equivalents 2023 $’000 18,823 3,185 5,808 5,448 6,424 4,193 43,881 (b) Reconciliation of profit attributable to members of the parent entity to cash generated from operating activities: (Loss)/profit after income tax expense Adjustment for non-cash and non-operating cash flow items Depreciation and amortisation Net credit loss allowances reversed on trade receivables Net provision reversed on employee benefits Net provision reversed on the onerous contracts Net provision (reversed)/recognised on other provisions Share‑based payment expense Foreign exchanges losses Amortisation of financing charges Gains on disposal of subsidiary Losses on derecognition of intangible assets Losses on disposal of plant and equipment Gains on derecognition of right‑of‑use‑assets and lease liabilities Gains on the fair value recognition of the right‑of‑use‑assets and lease liabilities Impairment of goodwill Interest recognised in relation to finance lease liability Cash settled equity shares Capitalisation of borrowing costs Interest income Interest expense Change in working capital Decrease/(increase) in receivables and other assets Increase in payables and other liabilities Increase in provision for employee benefits Decrease in tax balances Net cash inflow generated from operating activities Notes 1.7 2.5(c) 2.7(b) 2.7(b) 1.5(c) 3.1(d) 4.2 2.1(a) 2.2(a) 2.3(e) 2.3(e) 1.7 2023 $’000 (137,484) 51,004 (662) (297) (1,681) (169) 20,500 1,287 518 (17,592) 13,329 416 (617) (1,053) 130,384 – (645) – (11) (39) 138 5,462 (535) 1,412 63,665 2022 $’000 35,987 1,434 9,628 3,150 6,528 6,626 63,353 2022 $’000 52,672 40,656 (331) (1,300) (504) 92 18,747 851 753 – 2,265 523 (72) – – 14 – (213) 25 (811) (10,237) 7,989 – 1,460 112,579 Section 2. Core assets and working capital 2.1 Intangible assets Intangible assets for the Group comprise goodwill arising from business combinations, customer relationships, computer software and other intangibles (mainly acquired databases and brands). Intangible assets with finite lives are carried at cost, less accumulated amortisation, and accumulated impairment losses. Goodwill recognised arose from business combinations where the fair value of the consideration paid exceeded the fair value of the assets acquired. Goodwill is considered to have an indefinite life and is not amortised as it represents the synergistic benefits of bringing the businesses together. Customer relationships, a proportion of computer software and other intangibles were acquired as part of business combinations. These intangible assets are initially recognised at their fair value at the acquisition date. The remainder of computer software was either separately acquired or developed internally, and recognised at cost. Subsequent to initial recognition, intangible assets other than goodwill and work‑in‑progress are amortised over the expected useful lives noted below. Internally generated intangible assets are recognised where the cost of actual development can be reliably measured and clearly distinguished from research and ongoing operating and maintenance activities. These costs that are directly associated with the development of software are recognised where the following criteria are met: • It is technically feasible to complete the software product so that it is available for use • Management intends to complete the software product and use or licence it to customers, and there is adequate technical, financial, and other resources to complete the development • There is an ability to use or licence the software product and it can be demonstrated how the product will generate future economic benefits • The expenditure attributable to the software product during its development can be reliably measured. The costs remain in work‑in‑progress during the development phase and are transferred to computer software when products are considered ready for their intended use. A significant percentage of software development within the Group occurs contemporaneously with the research phase and ongoing operating and maintenance activities in supporting core customer systems. As a result, the separation of the cost of development can be imprecise and difficult to reliably measure. Accordingly, where the expenditure related to the development activity cannot be reliably measured, the Group expends the amounts in the period they are incurred. During the year, $14.1 million (2022: $19.9 million) of costs have been capitalised relating to internally generated computer software assets. (a) Carrying value of intangible assets: As at 31 December 2022 Cost Accumulated amortisation Net carrying value Movement for the year Balance at 1 January 2022 Reclassified between asset classes(1) Separately acquired Internally generated development costs Derecognition Amortisation Foreign currency translation Balance at 31 December 2022 Expected useful life (years) Goodwill $’000 603,738 – 603,738 622,481 – – – – – (18,743) 603,738 Indefinite Customer relationships $’000 Computer software $’000 Other intangibles $’000 Work-in- progress $’000 51,129 (27,673) 23,456 28,603 – – – – (4,877) (270) 23,456 5 to 15 125,075 (57,295) 67,780 74,464 5,142 3 – (645) (11,058) (126) 67,780 2 to 20 4,802 (614) 4,188 1,723 2,615 – – – (149) (1) 4,188 2 to 20 Total $’000 810,580 (85,582) 724,998 742,615 – 3 19,900 (2,265) (16,084) (19,171) 25,836 – 25,836 15,344 (7,757) – 19,900 (1,620) – (31) 25,836 724,998 Nil Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 102 103 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 2.1 Intangible assets (continued) (a) Carrying value of intangible assets (continued): As at 31 December 2023 Cost Accumulated amortisation Net carrying value Movement for the year Balance at 1 January 2023 Disposal of subsidiary Reclassified to assets held‑for‑sale Reclassified between asset classes(1) Internally generated development costs Impairment of goodwill Derecognition Amortisation Foreign currency translation Balance at 31 December 2023 Expected useful life (years) Goodwill $’000 481,050 – 481,050 603,738 (11,886) (1,572) – – (130,384) – – 21,154 481,050 Indefinite Customer relationships $’000 Computer software $’000 Other intangibles $’000 Work-in- progress $’000 46,620 (34,117) 12,503 23,456 – – – – – – (11,174) 221 12,503 3 to 10 102,716 (64,046) 38,670 67,780 (11,745) (6,581) 7,774 – – (3,170) (15,489) 101 38,670 1 to 10 1,540 – 1,540 4,188 (2,796) – 530 – – – (382) – 1,540 1 to 10 16,943 – 16,943 25,836 (4,747) – (8,304) 14,059 – (10,159) – 258 16,943 Nil Total $’000 648,869 (98,163) 550,706 724,998 (31,174) (8,153) – 14,059 (130,384) (13,329) (27,045) 21,734 550,706 (1) Transfer of capitalised internally generated software when products were considered ready for their intended use. (b) Review of expected useful life for finite life intangible assets Intangible assets with finite life are reviewed for expected useful life annually, or whenever events or changes in circumstances indicate that the expected useful life needs to be adjusted. A review of the Group’s intangible assets during the year ended 31 December 2023 resulted in the derecognition of capitalised internally‑developed and acquired computer software assets with a carrying value of $13.3 million (2022: $2.3 million) as these were no longer expected to be utilised in the Group’s operations. In addition, the Group has re‑estimated the useful lives of certain computer software assets and customer relationship intangibles to align with updated strategies and expectations for the related business areas, resulting in additional amortisation expense of approximately $13.0 million being recognised in the 2023 financial year (as compared to the amortisation expense that would have been recognised if calculated using previous useful life estimates). (c) Impairment testing for goodwill Goodwill is tested for impairment annually, or more frequently when indicators of impairment are identified. In testing for impairment, the carrying amount of each Cash Generating Unit (CGU) is compared against the recoverable amount. Group restructure and reassessment of CGUs from 1 July 2023 In April 2023, the Group announced its intention to implement a restructure of its operating segments for management reporting purposes, effective from 1 July 2023. The revised segments comprise APAC Wealth Management (also a CGU), APAC Trading & Global Market Data (comprising the Trading & Market Data and International Market Data CGUs), Superannuation (also a CGU), Managed Portfolio – UK (comprising the UK and UK Mortgages CGUs) and Managed Portfolio – Other (comprising the South Africa, Canada, Managed Fund Administration (MFA) and Platforms CGUs). The cash flow forecasts for each CGU were revised in line with the strategy review. The separation of the MFA and Platforms CGUs from the APAC Wealth Management operating segment to the Managed Portfolio – Other segment resulted in the attribution of goodwill to MFA of $11.9 million and to Platforms of $1.6 million, calculated on a relative fair value basis, and a reduction in the remaining carrying value of the Wealth Management CGU by these amounts. The goodwill attributable to the MFA CGU of $11.9 million has subsequently been derecognised by the Group as part of the sale of the subsidiary completed on 1 October 2023 (refer to Note 4.2). The goodwill attributable to the Platforms CGU of $1.6 million has been recognised by the Group within assets held‑for‑sale at 31 December 2023 (refer to Note 4.3). Impairment assessment at 30 June 2023 The revision of cash flow forecasts at 30 June 2023 as a result of the Group restructure was assessed as an indicator of impairment. Accordingly, the Group undertook an impairment assessment at 30 June 2023 on the pre‑restructure CGUs. This assessment resulted in impairment of goodwill within the UK CGU of $130.4 million (£70.1 million) which reduced the carrying value of the UK CGU to its assessed recoverable amount, determined utilising a fair value less costs of disposal approach. The fair value less costs of disposal determined was calculated using discounted cash flow (DCF) projections over five years and was considered to be Level 3 in the fair value hierarchy. Key inputs utilised in determining the fair value less costs of disposal in the UK CGU at 30 June 2023 were a revenue cumulative annual growth rate for the five year forecast period of 7.1%, a post‑tax discount rate of 9.7% and a long‑term growth rate of 2.0%. Impairment assessment at 31 December 2023 Each of the post‑restructure CGUs was tested for impairment at 31 December 2023. The recoverable amount of all CGUs was determined as fair value less cost of disposal, using a DCF approach. The fair value less costs of disposal DCF approach: • Utilises post‑tax cash flow projections based on the most recent five‑year financial plan. These cash flow projections include estimated benefits to be delivered from ongoing post‑restructure transformation activities taking place over the forecast period. • Is discounted at an appropriate after‑tax discount rate, taking into account an assessed weighted average cost of capital adjusted for any risks specific to the CGU. • Applies a terminal growth rate to year 5 earnings. Terminal growth rates are based on estimates of long term inflation and nominal GDP growth in the country in which the CGU primarily operates. • Deducts estimated disposal costs from the recoverable amount determined. The fair value less costs of disposal determined is compared to the carrying amount of the CGU which includes directly attributable assets of each CGU and an allocation of corporate assets. The valuation is considered to be Level 3 in the fair value hierarchy due to unobservable inputs used in the valuation. Allocation of goodwill to each relevant cash‑generating unit and assumptions applied in calculating the recoverable amounts of the goodwill in testing for impairment: Cash generating unit APAC Wealth Management APAC Trading & Market Data International Market Data Superannuation(1) UK UK Mortgages South Africa Canada Total goodwill Allocated Goodwill Post-Tax Discount Rates Long Term Growth Rates 2023 $’000 117,264 43,662 5,458 – 204,168 82,402 12,854 15,242 481,050 2022 $’000 130,864 42,727 5,293 – 318,106 78,171 13,534 15,043 603,738 2023 % 9.4 9.4 9.0 9.4 9.7 9.7 17.9 9.4 2022 % 9.2 9.2 8.4 – 9.5 9.0 18.1 9.8 2023 % 2022 % 2.5 2.5 2.0 2.5 2.0 2.0 5.0 2.0 3.0 3.0 2.5 – 3.0 3.0 5.0 2.5 (1) Not tested for impairment in the comparative period. Significant estimates made The cash flow projections used in the impairment test are made with consideration to other available information and estimations including actual performance to date, discount rates, assumptions around future performance and expected revenue and cost growth. The Group considered the impact of climate change on the cash flow projections included in the value‑in‑use models and concluded that based on current expectations, facts and circumstances, there were no significant impacts to the projected cash flows. Sensitivity to changes in assumptions Management is of the view that reasonably possible changes in the key assumptions, such as an increase to the discount rate of 1% or a reduction in cash flow of 10%, would not cause the recoverable amount for the APAC Wealth Management, APAC Trading & Market Data, International Market Data, UK Mortgages, South Africa or Canada CGUs to fall short of their respective carrying amounts as at 31 December 2023. However, an increase to the discount rate of 1% or a reduction in cash flow of 10% would cause the recoverable amount for the UK CGU and Superannuation CGU to fall short of their respective carrying amounts at 31 December 2023. The recoverable amount of the UK CGU at 31 December 2023 is $226.8 million and current headroom is $6.3 million (30 June 2023: $Nil headroom). For the estimated recoverable amount of the goodwill attributable to the UK CGU to be equal to its carrying amount, the post‑tax discount rate would have to increase to 9.88%, or the projected cash flows would need to reduce by 1.39%. The current headroom for the Superannuation CGU is $1.3 million (2022: $42.4 million). For the estimated recoverable amount of the Superannuation CGU to be equal to its carrying amount, the post‑tax discount rate would have to increase to 9.51%, or the projected cash flows would need to reduce by 0.16%. Apart from the impairment of goodwill in relation to the UK CGU of $130.4 million at 30 June 2023, there has been no further impairment of goodwill during the year ended 31 December 2023. The carrying values of goodwill in relation to CGUs based outside of Australia have been translated to Australian dollars using the 31 December spot exchange rates for the respective foreign currencies. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 104 105 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 2.2 Plant and equipment Plant and equipment are carried at cost, less accumulated depreciation, and any impairment losses. The estimated useful lives, residual values, and depreciation method are reviewed at the end of each annual reporting period. 2.3 Leases (a) Summary of leasing amounts recognised in the Statement of Profit or Loss and Statement of Cash Flows: (i) Contractual lease payments and amounts recognised in the Statement of Profit or Loss The depreciation charge for each period is recognised in profit or loss. (a) Carrying value of plant and equipment As at 31 December 2022 Cost Accumulated depreciation Net carrying value Movement for the year Balance at 1 January 2022 Separately acquired Derecognition Depreciation Foreign currency translation Balance at 31 December 2022 Expected useful life (years) As at 31 December 2023 Cost Accumulated depreciation Net carrying value Movement for the year Balance at 1 January 2023 Disposal of subsidiary Reclassified between asset classes(1) Separately acquired Derecognition Depreciation Foreign currency translation Balance at 31 December 2023 Expected useful life (years) Leasehold improvement $’000 Furniture & fittings $’000 Office equipment $’000 Computer equipment $’000 Work-in- progress $’000 17,870 (8,413) 9,457 11,527 948 (438) (2,377) (203) 9,457 3 to 10 14,761 (9,438) 5,323 6,954 204 (126) (1,612) (97) 5,323 3 to 10 1,875 (1,412) 463 618 36 (12) (180) 1 463 3 to 5 54,353 (41,077) 13,276 12,969 6,518 – (6,176) (35) 13,276 3 to 5 – – – – – – – – – Nil Leasehold improvement $’000 Furniture & fittings $’000 Office equipment $’000 Computer equipment $’000 Work-in- progress $’000 18,224 (10,540) 7,684 9,457 – 592 115 (278) (2,291) 89 7,684 3 to 10 14,622 (10,780) 3,842 5,323 – – 2 (125) (1,413) 55 3,842 3 to 10 1,874 (1,550) 324 463 (1) – 5 – (143) – 324 3 to 5 58,807 (46,793) 12,014 13,276 (6) – 4,655 (12) (6,154) 255 12,014 3 to 8 – – – – – (592) 592 – – – – Nil Total $’000 88,859 (60,340) 28,519 32,068 7,706 (576) (10,345) (334) 28,519 Total $’000 93,527 (69,663) 23,864 28,519 (7) – 5,369 (415) (10,001) 399 23,864 (1) Work‑in‑progress assets are transferred to plant and equipment asset classes as they are brought into use. (b) Plant and equipment pledged as security The Group does not have any plant and equipment pledged to secure borrowings of the Group. Contractual rental payments Depreciation expense on right‑of‑use assets Interest expense on lease liabilities (ii) Total cash flow relating to leases recognised in the Statement of Cash Flows Settlement of lease liabilities Interest expense on lease liabilities Total cash outflows for leases Notes 2.3(a)(ii) 2.3(c) 2.3(e) 2023 $’000 (19,028) (13,958) (1,924) 2023 $’000 (17,104) (1,924) (19,028) 2022 $’000 (17,592) (14,227) (2,323) 2022 $’000 (15,283) (2,309) (17,592) (b) Iress Group lease portfolio The Group leases real estate in the ordinary course of its business. The Group’s real estate leases comprise office building leases in the countries the Group operates in. The Group’s regional lease portfolio: Region Australia Lease characteristic features The Group leases office buildings in a number of Australian cities, with the most significant being the head office in Melbourne and an office in Sydney. The non‑cancellable period of the leases range from two to twelve years with variable options to extend the lease terms. The lease payments are adjusted every year, based on contractual fixed percentage increases, and in certain instances, additionally increased by the prevailing consumer price index (CPI) at the lease review date. South Africa The Group leases office buildings in South Africa. The non‑cancellable period of these leases range from two to seven years with options to extend the lease terms up to five years. The lease payments are adjusted every year by a fixed percentage increase at the lease review date. United Kingdom The Group leases office buildings in the UK. The non‑cancellable period of these leases range from five to ten years. The lease payments are fixed with no increases over the lease terms. Other The Group leases other office buildings in other countries. The non‑cancellable period of these leases range from three to ten years. The lease payments are fixed with no increases over the lease terms. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements106 107 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 2.3 Leases (continued) (b) Iress Group lease portfolio (continued) (i) Group as a lessee Right-of-use asset The Group recognises a right‑of‑use asset and a lease liability at the lease commencement date. The right‑of‑use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset — or to restore the underlying asset or the site on which it is located—less any lease incentives received. The right‑of‑use asset is separately disclosed in the Consolidated Statement of Financial Position. The right‑of‑use asset is subsequently depreciated using the straight‑line method from the commencement date to either 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 plant 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. Lease liability The lease liability is initially measured at the present value of the lease payments not 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. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group’s average incremental borrowing rate used is 3.79% (2022: 4.23%). Lease payments included in the measurement of the lease liability include: • fixed payments, including in‑substance fixed payments less any lease incentives receivable • variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date • amounts expected to be payable under a residual value guarantee • the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option • payment of penalties for early termination of a lease unless the Group is reasonably certain not to terminate early. The lease liability is separately disclosed in the Consolidated Statement of Financial Position. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the expected payable amount under a residual value guarantee, or, if the Group changes its assessment of whether it will exercise a purchase, extension, or termination option. When the lease liability is remeasured in this way, either a corresponding adjustment is made to the carrying amount of the right‑of‑use asset, or, it is recorded in profit or loss if the carrying amount of the right‑of‑use asset has been reduced to zero. Short-term leases and leases of low-value assets The Group has elected not to recognise right‑of‑use assets and lease liabilities for short‑term leases of office and information technology equipment with a lease term of 12 months or less, or for leases of low‑value assets. The Group recognises the lease payments associated with these leases as an expense on a straight‑line basis, over the lease term. (ii) Group as a lessor When the Group acts as a lessor—generally when it subleases property on which it has entered a head lease as a lessee—it determines at the sublease inception whether each sublease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease. If not, then it is accounted for as an operating lease. As part of this assessment, the Group considers certain indicators, such as whether the lease is for the major part of the economic life of the asset. When the Group is an intermediate lessor, it accounts for its interests in the head lease and the sublease separately. The Group assesses the lease classification of a sublease with reference to the right‑of‑use asset arising from the head lease, not with reference to the underlying asset. If a head lease is a short‑term lease to which the Group applies the exemption described above, then it classifies the sublease as an operating lease. If an arrangement contains a lease and non‑lease component, the Group applies AASB 15 Revenue from Contracts with Customers to allocate the consideration in the contract. The Group recognises lease payments received under operating leases as income on a straight‑line basis over the lease term as part of non‑operating income. (c) Carrying value of right-of-use assets The Group’s right‑of‑use assets comprise real estate. Right‑of‑use assets have finite lives and are carried at cost less accumulated depreciation. Carrying value of right-of-use assets: Cost Accumulated depreciation Net carrying value Movement for the year Balance at beginning of the year New leases entered into contract Disposal of right‑of use assets for early termination Fair value adjustments for modified leases Depreciation Foreign currency translation Balance at end of the year Expected useful life (years) (d) Lease liabilities (i) Lease liabilities included in the Statement of Financial Position at the end of the period: Current Non‑current Total 2023 $’000 111,159 (60,878) 50,281 60,638 3,584 (1,700) 839 (13,958) 878 50,281 1 to 12 2022 $’000 119,233 (58,595) 60,638 77,737 834 (2,744) 366 (14,227) (1,328) 60,638 2 to 12 2023 $’000 (14,141) (45,254) (59,395) 2022 $’000 (15,447) (58,880) (74,327) The Group’s liquidity risk with regard to its lease liabilities is managed by the inclusion of lease liability cash flows in the cash flow forecasts regularly monitored by the Group in line with the Group’s treasury policy. (ii) Reconciliation of the movement of the lease liabilities: Balance at beginning of the year Lease liabilities raised from the negotiation of new lease contracts Lease liabilities reversed from early termination of lease contracts Lease liabilities reversed during the year Lease liabilities reversed/(raised) from changes in subsequent lease payments Lease liabilities raised due to the timing of interest payment Settlement of lease liabilities Foreign currency translation 2023 $’000 (74,327) (3,581) 1,921 396 214 – 17,104 (1,122) 2022 $’000 (92,854) (834) 2,816 – (366) (14) 15,283 1,642 Balance at end of the year (59,395) (74,327) Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements108 109 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 2.3 Leases (continued) (d) Lease liabilities (continued) (iii) Maturity analysis – contractual undiscounted cash flows: Less than one year More than one year and not more than five years More than five years Total undiscounted lease liabilities at the end of the period (e) Amounts recognised in the Statement of Profit or Loss and Other Comprehensive Income Depreciation expense on right‑of‑use assets Interest expense on lease liabilities Expenses relating to short term or low value assets leases Gain on the fair value recognition of the right‑of‑use‑assets and lease liabilities as a result of incremental lease payments Gain on the de‑recognition of right‑of‑use assets and lease liabilities Income from the sub‑leasing of right‑of‑use assets (f) Operating lease arrangements Operating leases, in which the Group is the lessor, relate to sub‑leased office buildings. 2023 $’000 15,901 41,703 5,295 62,899 2023 $’000 (13,958) (1,924) (186) 1,053 617 236 2022 $’000 17,687 52,872 9,722 80,281 2022 $’000 (14,227) (2,323) (175) – 72 213 Notes 1.7 3.1(d) 1.6(a) During the year, the Canadian office entered into a sublease arrangement for which the Group is the lessee under a head lease arrangement. The cash outflows relating to the head leases on these buildings are included in the amounts disclosed in Note 2.3(e) above. 2.4 Derivative financial instruments (a) Derivative financial instruments The Group enters into a variety of derivative financial instruments to manage its exposure to foreign exchange rate risks, including foreign exchange forward contracts. Derivatives are recognised initially at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship. A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. Derivatives are not offset in the financial statements unless the Group has both a legally enforceable right and intention to offset. A derivative is presented as a non‑current asset or a non‑current liability if the remaining maturity of the instrument is more than 12 months and it is not due to be realised or settled within 12 months. Other derivatives are presented as current assets or current liabilities. (b) Hedge accounting The Group designates certain derivatives as hedging instruments in respect of foreign currency risk and interest rate risk in fair value hedges, cash flow hedges, or hedges of net investments in foreign operations. Hedges of foreign exchange risk on firm commitments are accounted for as cash flow hedges. At the inception of the hedge relationship, the Group documents the relationship between the hedging instrument and the hedged item, along with its risk management objectives and its strategy for undertaking various hedge transactions. Furthermore, at the inception of the hedge and on an ongoing basis, the Group documents whether the hedging instrument is effective in offsetting changes in fair values or cash flows of the hedged item attributable to the hedged risk, which is when the hedging relationships meet all of the following hedge effectiveness requirements: • There is an economic relationship between the hedged item and the hedging instrument. • The effect of credit risk does not dominate the value changes that result from that economic relationship. • The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item. If a hedging relationship ceases to meet the hedge effectiveness requirement relating to the hedge ratio but the risk management objective for that designated hedging relationship remains the same, the Group adjusts the hedge ratio of the hedging relationship (i.e. rebalances the hedge) so that it meets the qualifying criteria again. The Group designates the full change in the fair value of a forward contract (i.e. including the forward elements) as the hedging instrument for all of its hedging relationships involving forward contracts. (c) Cash flow hedges The effective portion of changes in the fair value of derivatives and other qualifying hedging instruments that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated under the heading of cash flow hedging reserve, limited to the cumulative change in fair value of the hedged item from inception of the hedge. The gain or loss relating to the ineffective portion is recognised immediately in profit or loss, and is included in the ‘other gains and losses’ line item. Amounts previously recognised in other comprehensive income and accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss, in the same line as the recognised hedged item. However, when the hedged forecast transaction results in the recognition of a non‑financial asset or a non‑financial liability, the gains and losses previously recognised in other comprehensive income and accumulated in equity are removed from equity and included in the initial measurement of the cost of the non‑financial asset or non‑financial liability. This transfer does not affect other comprehensive income. Furthermore, if the Group expects that some or all of the loss accumulated in the cash flow hedging reserve will not be recovered in the future, that amount is immediately reclassified to profit or loss. The Group discontinues hedge accounting only when the hedging relationship (or a part thereof) ceases to meet the qualifying criteria (after rebalancing, if applicable). This includes instances when the hedging instrument expires or is sold, terminated or exercised. The discontinuation is accounted for prospectively. Any gain or loss recognised in other comprehensive income and accumulated in cash flow hedge reserve at that time remains in equity and is reclassified to profit or loss when the forecast transaction occurs. When a forecast transaction is no longer expected to occur, the gain or loss accumulated in the cash flow hedge reserve is reclassified immediately to profit or loss. (d) Forward exchange contracts The Group pays certain suppliers in US Dollars (USD). In order to protect against exchange rate movements, the Group entered into forward exchange contracts to purchase USD through the financial year. Forward currency contracts mature when expected payments are scheduled to be made. These derivatives have met the requirements to qualify for hedge accounting with movements recorded in other comprehensive income accordingly. The purchases took place evenly throughout the financial year at which time the amount deferred in equity was removed from equity and included in ‘Communication and other technology expenses’ in the Consolidated Statement of Profit or Loss. At 31 December 2023, there are no outstanding contracts that are hedging highly probable forecasted supplier payments where the contract notional value is forecast to total less than the expected payments for the same period. (i) Foreign currency contracts – Carrying amount – Notional amount (ii) Movement in foreign exchange contracts gains/(losses): Hedging recognised in Other Comprehensive Income (OCI) 2023 $’000 – – 2023 $’000 150 2022 $’000 (150) 14,606 2022 $’000 (150) As at 31 December 2023, the aggregate amount of gains under foreign exchange forward contracts deferred in the cash flow hedge reserve relating to these anticipated future purchase transactions is $Nil (2022: (AUD0.2 million)). Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 110 111 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 2.5 Receivables and other assets Trade receivables arise from revenue billed, but not yet settled by the customer. Revenue arises from providing access to Iress software, rendering of services, or recharging for access to capital markets data. Revenue is measured at the fair value of the consideration received or receivable. Revenue is recognised over time as the relevant performance obligations identified in a customer contract are satisfied. Refer to Note 1.3 for further details of revenue recognition. Where revenue recognised exceeds billings, it results in a contract asset (refer to Note 2.5(a)), and where cash amounts are received in advance of revenue recognition, it results in a contract liability (refer to Note 1.3(b)). Iress’ credit terms are generally 30 days from the date of invoice. Therefore, the carrying amount of receivables approximates their fair value. (a) Receivables and other assets Trade receivables Credit loss allowance Total receivables net of credit loss allowances Contract assets Prepayments Deposits Financial assets at fair value through profit or loss GST/VAT receivables Other assets Total receivables and other assets Notes 2.5(b) 2.5(b) 1.3(b) 2023 $’000 28,090 (280) 27,810 7,506 33,749 6,331 526 2,771 4,304 82,997 2022 $’000 34,800 (923) 33,877 12,304 30,059 1,527 456 1,603 3,835 83,661 Included within other assets are financial assets categorised at fair value through profit or loss. Iress has assessed its investments held at fair value through profit and loss and these investments are held for trading, where they are acquired for the purpose of selling in the short term with an intention of making a profit. These investments primarily comprise holdings in ASX listed equities that are held for operational purposes. Regular purchase and sales of investments are recognised on trade date, the date on which Iress commits to purchase or sell the asset. Investments are initially recognised at fair value with any transaction costs expensed through the statement of profit and loss and other comprehensive income. Subsequent movements in fair value of financial assets are recognised in the statement of profit and loss and other comprehensive income. These instruments—categorised as Level 1 in the Fair Value Hierarchy—are valued using the quoted price in active markets. (b) Credit Loss Allowance The Group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables. Expected credit losses are measured by grouping trade receivables and contract assets, based on shared credit risk characteristics and the days past due. The contract assets relate to unbilled work in progress and have substantially the same risk characteristics as the trade receivables for the same types of contracts. A provision matrix is then determined based on the historic credit loss rate for each group of customers, adjusted for any material expected changes to the future credit risk for that customer group. The credit loss allowance as at 31 December 2022 is determined as follows: Provision matrix As at 31 December 2022 1 to 30 days 31 to 60 days 61 to 90 days Over 90 days Contract assets Ageing of receivables As at 31 December 2022 1 to 30 days 31 to 60 days 61 to 90 days Over 90 days Total trade receivables Contract assets Allowance based on historic credit losses Adjustment for expected changes in credit risk(1) Credit loss allowance APAC 0.1% 0.2% 0.6% 0.6% 0.0% UK & Europe $’000 10,023 272 61 732 11,088 5,714 212 314 526 UK & Europe 0.9% 2.0% 10.0% 11.1% 0.2% Africa $’000 1,930 151 – 19 2,100 350 13 11 24 Africa 0.4% 2.7% 7.9% 8.6% 0.1% North America $’000 701 35 – 9 745 – 1 56 57 North America 0.2% 0.3% 0.4% 0.4% 0.1% Group $’000 30,823 2,377 488 1,112 34,800 12,304 251 672 923 APAC $’000 18,169 1,919 427 352 20,867 6,240 25 291 316 (1) Adjustment to reflect the higher credit risk and probability of default relating to customers that have amounts owing including invoices that are over 90 days past due. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 112 113 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 2.5 Receivables and other assets (continued) (b) Credit Loss Allowance (continued) The credit loss allowance as at 31 December 2023 is determined as follows: Provision matrix As at 31 December 2023 1 to 30 days 31 to 60 days 61 to 90 days Over 90 days Contract assets Ageing of receivables As at 31 December 2023 1 to 30 days 31 to 60 days 61 to 90 days Over 90 days Total trade receivables Contract assets Allowance based on historic credit losses Adjustment for expected changes in credit risk(1) Credit loss allowance APAC 0.1% 0.1% 0.1% 0.1% 0.0% UK & Europe $’000 7,428 552 158 573 8,711 3,434 154 (33) 121 UK & Europe 0.7% 2.0% 4.0% 4.2% 0.2% Africa $’000 1,161 213 – 101 1,475 426 27 19 46 Africa 0.7% 2.8% 5.3% 5.6% 0.1% North America $’000 768 5 17 138 928 – 17 (11) 6 North America 0.4% 0.7% 1.0% 1.0% 0.1% Group $’000 23,061 2,477 475 2,077 28,090 7,506 248 32 280 APAC $’000 13,704 1,707 300 1,265 16,976 3,646 50 57 107 (1) Adjustment to reflect the higher credit risk and probability of default relating to customers that have amounts owing including invoices that are over 90 days past due. Significant estimate made The adjustment for material expected changes to credit risk for each client group requires judgement about future events and, therefore, a significant increase in actual credit losses from that expected would lead to a significant impact on financial performance. (c) Movement in credit loss allowance Balance at the beginning of the year Credit loss allowances recognised during the year Credit loss allowance utilised during the year against irrecoverable trade debtors Foreign currency translation Balance at the end of the year Notes 2.5(a) 2023 $’000 (923) (261) 923 (19) (280) 2022 $’000 (1,248) (30) 361 (6) (923) 2.6 Payables and other liabilities Payables and other liabilities are initially measured at fair value. Subsequent to initial measurement, these are recognised at amortised cost. Liabilities are classified as current where Iress does not have an unconditional right to defer settlement beyond 12 months. Contract liabilities represent amounts received from customers for which revenue has not been earned or recognised. Finance arrangements relate to the acquisition of software licences. Due to the short‑term nature of current liabilities, the carrying amount approximates their fair value. Current Trade payables General accruals(1) Goods and services received but not invoiced accruals(1) Royalties accruals(1) Facilities related accruals(1) Audit fee accruals Taxation accruals Contract liabilities GST/VAT payable Employee related liabilities Dividend payable Accrued interest Accrued interest on loans Other liabilities Total current payables and other liabilities Notes 1.3(b) 2023 $’000 (8,747) (7,060) (15,696) (5,387) (743) (590) (182) (16,482) (5,676) (10,360) (78) (11) (1,183) (2,271) 2022 $’000 (15,814) (7,458) (8,032) (4,341) (996) (687) (205) (17,201) (4,921) (8,234) (127) – (1,196) (749) (74,466) (69,961) (1) Prior year reclassifications of accruals related to goods and services received but not invoiced, royalties and facilities previously disclosed as general accruals. The Group’s exposure to foreign currency risk arising from translating payables, and other liabilities to the Group’s functional currency, is considered to be insignificant. The exposure is monitored on a net working capital basis, refer to Note 3.3. Liquidity risk arises from current payables, and other liabilities, payable in less than one year. The Group manages this liquidity risk by maintaining sufficient cash and current assets to meet the contractual obligations as they arise. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 114 115 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 2.7 Provisions Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. Employee benefits mainly comprise annual and long service leave entitlements in Australia, bonuses, superannuation and other benefits. The annual leave liability is measured as current leave accrued multiplied by current salary plus statutory charges. The amount of long service leave reflected as a current provision is that relating to employees who have reached the statutory length of service required to either take the leave or for it to be paid out on departure from the Group. Onerous contracts represent the expected losses on non‑cancellable property lease commitments no longer utilised by the Group. The amount provided for in the prior comparative year represented the present value of the future expected expenses to be incurred in relation to the leased premises over the remaining lease term. (a) Provisions as at the end of the year include: Current provisions Employee benefits Onerous contracts Other provisions Total current provisions Non-current provisions Employee benefits Total non-current provisions Total provisions (b) Movements in the carrying value of provisions As at 31 December 2022 Balance at 1 January 2022 Provision reversed/(raised) during the year Provision utilised during the year Foreign currency translation Balance at 31 December 2022 As at 31 December 2023 Balance at 1 January 2023 Disposal of subsidiary Reclassified to assets held‑for‑sale Provision reversed/(raised) during the year Foreign currency translation Balance at 31 December 2023 2023 $’000 2022 $’000 (17,295) – – (17,295) (1,299) (1,299) (19,735) (1,568) (155) (21,458) (2,463) (2,463) (18,594) (23,921) Employee benefits $’000 Deferred consideration $’000 Onerous loss provision $’000 Other provisions $’000 (21,107) (1,088) – (3) (22,198) (22,198) 2,194 909 519 (18) (18,594) (4,400) – 4,400 – – – – – – – – (2,171) 504 – 99 (1,568) (1,568) – – 1,681 (113) – (60) (92) – (3) (155) (155) – – 169 (14) – Total $’000 (27,738) (676) 4,400 93 (23,921) (23,921) 2,194 909 2,369 (145) (18,594) 2.8 Commitments and contingencies (a) Capital commitments As at 31 December 2023, no capital expenditure has been contracted or provided for (2022: $Nil). (b) Contingencies The Iress Group is currently undertaking a significant multi‑year transformation with the assistance and guidance of specialist consultants through the 2023 and 2024 years. The fees payable to the consultants are aligned to the growth of the business and contingent on achieving growth outcomes up to a maximum potential payment of $20 million, which would be payable in the second half of 2025. For the maximum payment to be satisfied, the Group’s Adjusted EBITDA is required to be approximately $161 million to $171 million, a 52% to 62% increase from the 2023 level, using an annualised run rate calculation period in the first half of 2025. No amounts have been recorded in relation to the contingent fees at 31 December 2023. Section 3. Debt facilities, derivatives and equity 3.1 Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any gains or losses are recognised in the Statement of Profit or Loss in the event the borrowings are derecognised. On 7 June 2023, Iress entered into an agreement with one of its existing lenders for a new two‑year $50 million multi‑currency facility, increasing the total amount of unsecured floating rate bank facilities to $400 million. (a) Borrowings held by the Group Non-current $50 million bank facility to June 2025 AUD EUR $350 million bank facilities to October 2025 AUD GBP EUR £60.5 million fixed rate notes to May 2029 GBP Total amount drawn Borrowing costs capitalised Total borrowings Borrowings at fair value(1) Borrowings at carrying value 2023 $’000 2022 $’000 2023 $’000 2022 $’000 18,000 30,007 117,000 61,688 24,330 100,970 351,995 (555) – – 171,000 58,520 52,689 97,661 379,870 (1,073) 18,000 30,007 117,000 61,688 24,330 113,093 364,118 (555) – – 171,000 58,520 52,689 107,288 389,497 (1,073) 351,440 378,797 363,563 388,424 (1) The fair value of the fixed rate notes is a Level 2 measurement in the fair value hierarchy. Level 2 fair value measurements are derived from inputs, rather than directly quoted prices for an identical asset or liability in an active market. The inputs are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) and applied within the valuation technique. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 116 117 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 3.1 Borrowings (continued) (a) Borrowings held by the Group (continued) The bank facilities allow multi‑currency drawdowns and are at variable interest rates based on BBSY, SONIA and EURIBOR benchmark rates plus a market margin. Amounts can be repaid at the discretion of the Group. Therefore, the amounts drawn approximate their fair value. The borrowings are unsecured, and the Group has complied with the financial covenants of its borrowing facilities during the year. In addition, there is a $15 million (2022: $15 million) revolving capital and contingent instruments facility used for any bank guarantees, letters of credit or similar instruments required by the Group. As at 31 December 2023, $7.1 million (2022: $6.5 million) was utilised. (b) Reconciliation of the movement in borrowings to the financing cash flows: Balance at beginning of the year Proceeds from borrowings Repayments of borrowings Net borrowing costs amortised Foreign exchange rate movements Balance at end of the year 2023 $’000 388,424 114,471 (150,471) 518 10,621 363,563 2022 $’000 296,530 369,850 (270,704) 541 (7,793) 388,424 (c) Contractual maturity analysis Contractual cash outflow maturity analysis is shown based on undiscounted cash flows. An estimate, based on forward interest rates and foreign currency rates, has been applied in determining interest and foreign cash outflows and inflows. The actual contractual outflow may vary to the amounts disclosed. 31 December 2022 Outflows/(inflows) Total borrowings drawn Interest on borrowings 31 December 2023 Outflows/(inflows) Total borrowings drawn Interest on borrowings Within 1 year $’000 – 9,633 Within 1 year $’000 – 19,642 1–3 years $’000 281,939 10,881 1–3 years $’000 251,025 19,795 Greater than 3 years $’000 106,485 8,625 Greater than 3 years $’000 113,094 9,047 3.2 Issued capital On 1 March 2023, Iress issued 2,207,000 shares to fund the vesting of equity rights to executives and the issue of deferred shares to selected employees for nil consideration. Ordinary shares outstanding at the end of the year: Balance at the beginning of the year New shares issued to employees in relation to employee share schemes Shares purchased and issued to employees in relation to employee share schemes(1) On‑market share buy‑back(1) Shares issued under employee Share Purchase Plan Less Treasury Shares(2) Balance at the end of the year Amount Number of shares 2023 $’000 419,065 – – – 278 419,343 – 2022 $’000 493,883 – (22,957) (52,255) 394 419,065 – 419,343 419,065 2023 $’000 184,582 2,207 – – – 186,789 (6,467) 180,322 2022 $’000 189,628 – – (5,046) – 184,582 (3,381) 181,201 (1) Shares issued during the year net of issue cost and tax. (2) Treasury shares represent unvested and unallocated or allocated shares held by the Employee Share Trust. 3.3 Managing financial risks (a) Market risks Interest rate risk The Group’s exposure to interest rate risk mainly arises from its variable rate borrowings. An increase in the benchmark interest rates of 50 basis points (0.5%) , with all other factors held constant, would result in an increase in the annual interest cost of the Group of $1.8 million (2022: $1.9 million). Foreign currency risk GBP and EUR borrowings have limited foreign currency risk to the Group because they are either drawn down by entities with the same functional currency or by the way they have been structured. The Group is exposed to foreign currency transaction risk mainly from payment to certain suppliers in USD and intercompany balances denominated in foreign currency. Additional foreign currency risk arises from cash balances, receivables and payables held within each subsidiary but denominated in a currency different to the functional currency of that subsidiary. The material exposure to foreign currency movements arising from foreign currency working capital balances held within the Group includes: (d) Interest expense and financing costs Interest expenses are recognised using the effective interest rate method. Interest expense includes exchange differences arising from foreign currency borrowings to the extent they are regarded as adjustments to interest costs. Interest income Interest expense Other financing costs comprising: Interest expense of lease liabilities Amortisation of borrowing costs Net interest expense and financing costs Notes 2.3(e) 2023 $’000 1,928 (21,267) (1,924) (518) (21,781) 2022 $’000 1,007 (10,622) (2,323) (753) (12,691) Working capital denominated in foreign currency GBP USD ZAR AUD impact on profit or loss of a 1% increase in foreign currency rates GBP USD ZAR 2023 ‘000 7,909 1,809 42,775 2023 ‘000 148 27 34 2022 ‘000 2,404 (1,049) 29,414 2022 ‘000 43 (15) 25 The above excludes the exposure of the Group from translating its foreign operations to the Group presentation currency. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 118 119 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 3.3 Managing financial risks (continued) (b) Capital risk The Group manages its capital to ensure it will be able to continue as a going concern while maximising the return to shareholders. In order to maintain an optimal capital structure, the Group may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The Group is not subject to any significant regulatory capital requirements. Management reviews the capital structure of the Group on a regular basis. As part of this review, the cost of capital and the risks associated with each class of capital is considered as well as the impact on the Group’s available debt facilities (refer to Note 3.1) and associated leverage. (c) Liquidity risk Liquidity risk is the risk that the Iress Group will not be able to meet its financial obligations as they fall due. The Group generally processes trade creditor payments in accordance with the supplier’s trading terms. All trade and other payables are payable within one year. The Group has no other exposure to liquidity risk. Liquidity risk is proactively managed by regularly assessing working capital requirements and monitoring cash flows. The Group maintains sufficient cash and working capital in order to meet future obligations and statutory regulatory capital requirements. This assessment has been confirmed after considering the present and uncertain future impacts on the Group’s financial position and estimated cash flows. Maturities of financial liabilities The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed are the contractual undiscounted cash flows. 31 December 2022 Payables and other liabilities Lease liabilities Borrowings 31 December 2023 Payables and other liabilities Lease liabilities Borrowings Within 1 year $’000 69,961 17,687 – Within 1 year $’000 74,466 15,901 – 1–3 years $’000 – 52,872 281,939 1–3 years $’000 – 41,703 251,025 Greater than 3 years $’000 – 9,722 106,485 Greater than 3 years $’000 – 5,295 113,094 Contractual cash flows $’000 69,961 80,281 388,424 Contractual cash flows $’000 74,466 62,899 364,119 Carrying amount of liabilities $’000 69,961 74,327 388,424 Carrying amount of liabilities $’000 74,466 59,395 363,563 (d) Credit risk Other than those financial assets whose carrying amounts best represent the maximum exposure to credit risk, the Group’s maximum exposure to credit risk which will cause a financial loss to the Group due to failure to discharge an obligation by the counterparties is arising from the carrying amount of the respective recognised financial assets as stated in the statement of financial position. Bank balances The credit risks on balances of bank deposits are limited because counterparties are subject to minimum credit ratings assigned by international credit‑rating agencies. Trade receivables As trade receivables comprises a widespread customer base, there is no concentration of credit risk. The Group undertakes ongoing credit evaluations of the financial condition of their customers. The Group does not consider there to be any significant credit risk that has not been insured or adequately provided for. The Group’s credit policy requires customers to pay within 30 days from the date of invoice. No interest is charged on the  outstanding trade receivables balance nor does the Company hold any collateral or insurance over these trade debtors’ balances. Trade receivables are not impaired unless the Group becomes aware of any objective evidence that the receivable may be impaired. The Group actively engages with customers to realise the payment of invoices remaining outstanding after contractual due dates. A credit loss allowance is recognised where the Company has identified objective evidence that an amount owing may not be recoverable, such as the observed financial difficulty of a customer, or the Group has identified a risk of expected credit losses based on a historical trend of credit losses. Section 4. Other disclosures 4.1 Taxation Total income tax expense comprises current and deferred tax recognised in the Statement of Profit or Loss in the year. Current and deferred tax is also recognised directly in equity, and not in the Statement of Profit or Loss, to the extent it is attributable to amounts and movements which have also been recognised directly in equity. Current tax Current tax comprises expected tax payable/receivable on business taxable income/loss which is recognised in the Statement of Profit or Loss in the current year. Any adjustments to tax payable/receivable are recognised in the current year that relate to taxable income/loss recognised in the Statement of Profit or Loss in prior years. Current tax is measured using the applicable enacted (or substantively enacted) income tax rates, at the reporting date in the countries where the Company’s subsidiaries and associates operate. Deferred tax Deferred tax represents the movements in deferred tax assets and liabilities which have been recognised during the year and which are attributable to amounts recognised in the Statement of Profit or Loss in the current year and the amounts recognised in the Statement of Profit or Loss in prior years. Deferred tax assets and liabilities are attributable to temporary timing differences between the carrying amount of assets and liabilities recognised for financial reporting purposes, and the tax base of assets and liabilities recognised for tax purposes. Deferred tax assets are recognised for deductible temporary differences, unused tax losses and unused tax credits to the extent it is probable that future taxable profits will be available against which they can be realised. Deferred tax liabilities are recognised for all the assessable temporary differences as required by accounting standards. Deferred tax is determined using tax rates which are expected to apply when the deferred tax asset/liability is expected to be realised based on enacted (or substantively enacted) laws at the reporting date. The measurement of deferred tax also reflects the tax consequences flowing from the manner in which the Group expects, at the reporting date, to realise or settle the carrying amount of its assets and liabilities. Tax consolidation The Company and its wholly‑owned Australian resident entities are part of a tax consolidated group under Australian taxation law. Iress Limited is the head entity of the Australian tax consolidated group. Tax expense, deferred tax assets and deferred tax liabilities arising from temporary differences of the members of the tax consolidated group are recognised in the separate financial accounts of the members of the Australian tax consolidated group using the stand‑alone taxpayer approach. Current and deferred tax assets and liabilities arising from unused tax losses, and tax credits of the members of the Australian tax consolidated group, are recognised by the Company (as head entity of the tax consolidated group). Due to the existence of a tax funding arrangement between the entities in the Australian tax consolidated group, amounts are recognised as payable to, or receivable by, the Company and each member of the Australian tax consolidated group. This is in relation to the tax contribution amounts paid or payable between the parent entity and the other members of the Australian tax consolidated group in accordance with the arrangement. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 120 121 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 4.1 Taxation (continued) (a) Income tax expense for the year including current and deferred tax (c) Deferred income tax assets and liabilities Income tax expense recognised in Statement of Profit or Loss Current income tax Current tax expense Adjustments for current tax of prior periods Total current income tax expense Deferred income tax expense (Reversal)/origination of temporary differences Adjustments in respect of deferred income tax of prior periods Total deferred tax expense Total income tax expense recognised in the Statement of Profit or Loss Income tax expense recognised directly in equity Current tax credited directly to other reserves Deferred tax credited directly to other reserves Total income tax recognised in Other comprehensive income (b) Reconciliation of income tax on profit at the Australian tax rate to total income tax expense Profit before income tax Income tax calculated at the Australian tax rate of 30% (2022: 30%) Tax effect of amounts which are not deductible (taxable) in calculating taxable income Differences in overseas tax rates Effect of non‑assessable income and other deductible items Effect of non‑deductible expenses and other assessable items Employee equity grant amortisation Adjustments for current and deferred tax of prior years Unrecognised tax losses Income tax expense 2023 $’000 2022 $’000 18,004 (304) 17,700 (7,148) (133) (7,281) 10,419 (240) 240 – 2023 $’000 (127,065) (38,120) 8,675 (6,709) 40,165 5,142 (437) 1,703 10,419 14,467 (2,195) 12,272 3,322 (346) 2,976 15,248 (240) 240 – 2022 $’000 67,920 20,376 351 (11,734) 8,511 576 (2,541) (291) 15,248 For the year ended 31 December 2022 Deferred tax assets Receivables and other assets Plant and equipment Computer software Payables and other liabilities Provisions and accruals Carry forward tax losses Capital transaction costs Share‑based payments Leases Other Total deferred tax assets Deferred tax liabilities Trade and other payables Computer software Intangible assets Employee share plan Total deferred tax liabilities Net deferred tax For the year ended 31 December 2023 Deferred tax assets Receivables and other assets Plant and equipment Intangible assets Payables and other liabilities Provisions and accruals Carry forward tax losses Capital transaction costs Share‑based payments Leases Total deferred tax assets Set‑off deferred tax balances Net deferred tax assets Deferred tax liabilities Trade and other payables Intangible assets Employee share plan Total deferred tax liabilities Set‑off deferred tax balances Net deferred tax liabilities Net deferred tax Opening balance $’000 Charged to income $’000 Reclassified to held-for-sale $’000 Charged to OCI/equity $’000 Exchange differences $’000 Closing balance $’000 215 3,636 2,030 5,092 8,322 4,069 3,372 2,139 2,703 2 (142) (488) (264) (329) (1,607) 248 (795) (308) (118) (3) 31,580 (3,806) (600) (421) (8,898) – (9,919) 21,661 (80) 136 1,815 (1,041) 830 (2,976) – – – – – – – – – – – – – – – – – – – – – – – (240) – – – (240) – – – – – (2) (97) – (6) (7) 4 – (86) – – 71 3,051 1,766 4,757 6,708 4,321 2,337 1,745 2,585 (1) (194) 27,340 4 20 51 – 75 (676) (265) (7,032) (1,041) (9,014) (240) (119) 18,326 Opening balance $’000 Charged to income $’000 Reclassified to held-for-sale $’000 Charged to OCI/equity $’000 Exchange differences $’000 Closing balance $’000 71 3,051 1,765 4,757 6,708 4,321 2,337 1,745 2,585 27,340 – – (676) (7,297) (1,041) (9,014) – – 18,326 (62) 2,431 (1,646) 2,246 (3,271) (467) (818) 469 (407) (1,525) – – 468 7,297 1,041 8,806 – – 7,281 320 – 897 – (882) – – – – 335 – – – – – – – – – – – – – – (240) – – (240) – – – – – – – – 2 104 310 (8) – (16) – 94 (18) 468 – – 2 – – 2 – – 331 5,586 1,326 6,995 2,555 3,838 1,279 2,308 2,160 26,378 (206) 26,172 (206) – – (206) 206 – 335 (240) 470 26,172 Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 122 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 4.1 Taxation (continued) (d) Unused tax losses to carry forward for which no deferred tax asset has been recognised Assets and liabilities reclassified as held-for sale Hong Kong (Tax rate 16.5% (2022: 16.5%) France (Tax rate 25.0% (2022: 25.0%) Australia (Tax rate 30.0% (2022: 30.0%) Potential tax benefit 2023 $’000 59 80,949 17,130 25,386 2022 $’000 159 75,903 17,130 24,141 4.2 Sale of subsidiary During the financial year, Iress sold its Managed Funds Administration (MFA) business. Iress completed the transaction on 1 October 2023 at which time the carrying amount of MFA’s total assets amounted to $35.7 million and the total liabilities amounted to $2.9 million. Derecognised assets and liabilities disposed at the date of sale Assets and liabilities disposed of Cash and cash equivalents Receivables and other assets Intangible assets Plant and equipment Payables and other liabilities Provisions Net assets disposed of Gain on the disposal of subsidiary Total consideration Consideration transferred Cash and cash equivalents Deferred consideration Total fair value of consideration Net cash inflow arising on disposal: Consideration received in cash and cash equivalents Less: cash and cash equivalents disposed of Net cash inflow 01 October 2023 $’000 Notes 2.1(a) 2.2(a) 2.7(b) (247) (4,299) (31,174) (7) 670 2,194 (32,863) (17,592) (50,455) 45,455 5,000 50,455 45,455 (247) 45,208 4.3 Assets held-for-sale Non‑current assets (or disposal group) are classified as held‑for‑sale and measured at the lower of their carrying amount and fair value less costs of disposal if their carrying amount will be recovered principally through a sale transaction. They are not depreciated or amortised. For an asset to be classified as held‑for‑sale, it must be available for immediate sale in its present condition and its sale must be highly probable. An impairment loss is recognised in the Statement of Profit or Loss if the carrying amount of the non‑current asset held‑for‑sale exceeds its fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less cost of disposal of a non‑current asset held‑for‑sale but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non‑current asset held‑for‑sale is recognised at the date of derecognition. During the financial year, Iress entered into a heads of agreement to divest its OneVue Platform business. The transaction is expected to complete by 30 April 2024 . The associated current and non‑current assets and liabilities of the disposal group have been classified as held‑for‑sale as at 31 December 2023. The results of the OneVue Platform business are accounted for in the Managed Portfolio – Other segment. As at 31 December 2023, the carrying amount of OneVue Platform’s total assets amounted to $11.5 million and the total liabilities amounted to $3.6 million. 123 2023 $’000 3,431 1,572 6,581 (193) (2,776) (347) (335) 7,933 Notes 2.1(a) ASSETS Current assets Receivables and other assets Non-current assets Goodwill Computer software LIABILITIES Current liabilities Payables and other liabilities Accruals Non-current liabilities Provisions for employee benefits Deferred tax liabilities Total net assets held-for-sale 4.4 Iress Limited – parent entity financial information The ultimate controlling entity of the Group is Iress Limited, which is a for‑profit entity listed on the Australian Securities Exchange (ASX). (a) Summary financial information The financial statements for the parent entity, Iress Limited: Current assets Non‑current assets Total assets Current liabilities Non‑current liabilities Total liabilities Net assets Equity Issued capital Reserves Retained earnings Total equity Profit for the year(1) Total comprehensive income 2023 $’000 55,327 888,911 944,238 99,055 335,603 434,658 509,580 419,343 25,366 64,871 509,580 4,566 4,566 2022 $’000 78,218 893,026 971,244 60,449 370,689 431,138 540,106 419,065 26,179 94,862 540,106 50,771 50,771 (1) Included within profit for the year is dividend income from subsidiaries of $Nil (2022: $4.8 million). (b) Capital commitments As at 31 December 2023, no capital expenditure has been contracted or provided for (2022: $Nil). (c) Contingencies The Iress Group is currently undertaking a significant multi‑year transformation with the assistance and guidance of specialist consultants through the 2023 and 2024 years. The fees payable to the consultants are aligned to the growth of the business and contingent on achieving growth outcomes up to a maximum potential payment of $20 million, which would be payable in the second half of 2025. For the maximum payment to be satisfied, the Group’s Adjusted EBITDA is required to be approximately $161 million to $171 million, a 52% to 62% increase from the 2023 level, using an annualised run rate calculation period in the first half of 2025. No amounts have been recorded in relation to the contingent fees at 31 December 2023. As at 31 December 2023, no other material contingent liabilities have been contracted or provided for (2022: $Nil). Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 124 125 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 4.5 Subsidiaries Details of the Group’s wholly‑owned subsidiaries at the end of the financial year: Australia BC Gateways Pty Ltd Diversa Funds Management Pty Ltd Diversa Pty Ltd FUND.eXchange Pty Ltd Financial Synergy Actuarial Pty Ltd(1) Financial Synergy Holdings Pty Ltd(1) Financial Synergy Pty. Limited(1) Glykoz Pty Ltd Group Insurance & Superannuation Concepts Pty Ltd Innergi Pty Ltd Investment Gateway Pty Ltd Iress Data Pty Ltd(1) Iress Euro Holdings Pty Ltd(1) Iress Information Pty Ltd Iress International Holding Pty Ltd(1) Iress South Africa (Australia) Pty Ltd(1) Iress Spotlight Wealth Management Solutions (RSA) Pty Ltd(1) Iress Wealth Management Pty Ltd(1) Lucsan Capital Pty Ltd Map Funds Management Pty Ltd No More Practice Education Pty Ltd No More Practice Holdings Pty Ltd OneVue Financial Pty Ltd OneVue Holdings Ltd(1) OneVue Pty Ltd OneVue Services Pty Ltd OneVue Super Member Administration Pty Ltd OneVue Super Services Holdings Pty Ltd OneVue Super Services Pty Ltd OneVue UMA Pty Ltd OneVue Unit Registry Pty Ltd OneVue Wealth Assets Pty Ltd OneVue Wealth Services Ltd OneVue Wealth Solutions Pty Ltd Planning Resources Group Pty Ltd(1) Top Quartile Management Pty Ltd Tranzact Consulting Pty Ltd Tranzact Financial Services Pty Ltd Tranzact Superannuation Services Pty Ltd Canada Iress Canada Holdings Ltd Iress (LP) Holdings Corp. Iress Market Technology Canada LP South Africa Advicenet Advisory Services (Pty) Ltd Iress Hosting (Pty) Ltd Iress Financial Markets (Pty) Ltd United Kingdom Iress FS Group Ltd Iress FS Ltd Iress Mortgage Services Ltd O&M Systems Ltd O&M Life & Pensions Ltd Iress Portal Ltd Iress Solutions Ltd Iress Technology Ltd Other countries Iress (Ontario) Ltd KTG Technologies Corp. Iress MD RSA (Pty) Ltd Iress Wealth MNGT (Pty) Ltd Iress (UK) Ltd Iress UK Holdings Ltd Iress Web Ltd Proquote Ltd Pulse Software Systems Ltd QuantHouse UK Ltd TrigoldCrystal Ltd BC Gateways Ltd (Hong Kong) Iress Asia Holdings Ltd (Hong Kong) Iress Inc Iress Malaysia Holdings Sdn Bhd (Malaysia) Iress Market Technology (Singapore) Pte Ltd (Singapore) Iress (NZ) Ltd (New Zealand) Iress SAS Iress Tunisia Branch Sàrl QH HoldCo (Luxembourg) QuantHouse Singapore Pte Ltd (Singapore) Waysun Technology Development Ltd (Hong Kong) (1) The Australian subsidiaries marked with this footnote are currently party to the Iress Limited Deed of Cross Guarantee dated 22 December 2014, as varied from time to time. 4.6 Deed of cross guarantee Iress Limited and a number of Australian wholly‑owned subsidiaries (outlined in Note 4.5) are party to a Deed of Cross Guarantee under which each company guarantees the debts of the others. By entering into the deed, the relevant, wholly‑owned subsidiaries have been relieved from the requirement to prepare the financial report and Directors’ Report under ASIC Corporations (Wholly-Owned Companies) Instrument 2016/785 issued by the Australian Securities and Investments Commission. The amounts disclosed in the tables below represent the consolidated amounts for the entities within the closed group and therefore exclude Iress Group subsidiaries. (a) Consolidated Statement of Profit or Loss and retained earnings Profit before tax Income tax expense Net profit after tax Retained earnings at the beginning of the year Dividends declared Transfers from share‑based payments reserve Reclassification of the fair value of Iress UK Holdings Limited shares transferred to Iress International Holding Pty Ltd Retained earnings at the end of the year (b) Consolidated Statement of Financial Position ASSETS Current assets Cash and cash equivalents Receivables and other assets Receivables from Iress Group companies outside the Deed Current taxation receivables Total current assets Non-current assets Intangible assets Plant and equipment Right‑of‑use assets Investments in subsidiaries Deferred tax assets Other financial assets Total non-current assets Total assets LIABILITIES Current liabilities Payables and other liabilities Lease liabilities Provisions Derivative liabilities Current taxation payables Total current liabilities 2023 $’000 48,876 (4,988) 43,888 133,913 (55,375) 20,818 – 143,244 2022 $’000 65,380 (8,415) 56,965 43,777 (86,858) 18,596 101,433 133,913 2023 $’000 2022 $’000 13,355 54,520 81,924 9,919 28,928 45,881 71,703 8,547 159,718 155,059 111,025 12,441 27,377 440,408 22,599 174,694 788,544 948,262 37,537 8,405 15,954 – 10,154 72,050 120,521 14,641 33,299 449,608 19,271 165,724 803,064 958,123 28,831 7,569 17,550 150 151 54,251 Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements126 127 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 4.6 Deed of cross guarantee (continued) (b) Consolidated Statement of Financial Position (continued) Non-current liabilities Lease liabilities Provisions Borrowings Deferred tax liabilities Total non-current liabilities Total liabilities Net assets EQUITY Issued capital Share‑based payments reserve Cash flow hedge reserve Other reserves Foreign currency translation reserve Retained earnings Total equity 2023 $’000 2022 $’000 25,303 1,647 363,563 – 390,513 462,563 485,699 419,343 25,366 – (101,433) (821) 143,244 485,699 31,781 2,155 388,424 2,796 425,156 479,407 478,716 419,065 26,329 (150) (101,433) 992 133,907 478,716 4.7 Basis of preparation Iress Limited (the ‘Company’) is a for‑profit company domiciled in Australia. The full year financial report is a general purpose financial report comprising the Company and its subsidiaries (collectively referred to as the ‘Group’ or ‘Iress’) For the year ended 31 December 2023. The full year financial statements: • have been prepared in accordance with the Corporations Act 2001 (Cth), Australian Accounting Standards and Interpretations, and International Financial Reporting Standards (IFRS) • were authorised for issue by the Directors on 21 February 2024 • have been prepared on a historical cost basis, except for derivative financial instruments and investments in financial assets which have been measured at fair value • have been prepared on a going concern basis; and • are measured and presented in Australian dollars with all values rounded to the nearest thousand dollars in accordance with ASIC Corporations (Rounding in Financial/Directors Reports) Instrument 2016/191 dated 24 March 2016 (ASIC guidance), unless otherwise stated. (a) Adoption of new standards In the current period, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for annual reporting periods commencing on or after 1 January 2023 including the following: AASB 17 Insurance contracts — Measurement of insurance liabilities AASB 2021–2 Amendments to Australian Accounting Standards — Disclosure of Accounting Policies and Definition of Accounting Estimates AASB 2020–3 Amendments to Australian Accounting Standards — Annual Improvements 2018–2020 and Other Amendments AASB 2021–5 Amendments to Australian Accounting Standards — Deferred tax related to assets and liabilities arising from a single transaction AASB 2021–6 Amendments to Australian Accounting Standards — Disclosure of Accounting Policies: Tier 2 and Other Australian Accounting Standards AASB 2021–7 Amendments to Australian Accounting Standards — Effective Date of Amendments to AASB 10 and AASB 128 and Editorial Corrections AASB 2022–1 Amendments to Australian Accounting Standards — Initial application of AASB 17 and AASB 9 – comparative information AASB 2022–6 Amendments to Australian Accounting Standards — Non-current Liabilities with Covenants AASB 2022–8 Amendments to Australian Accounting Standards — Insurance Contracts – Consequential Amendments AASB 2023–2 Amendments to AASB 112 — International Tax Reform Pillar Two Model Rules None of these standards have had a material impact on the Group in the current period and are not expected to have a material impact in future reporting periods or on foreseeable future transactions. (b) Standards on issue but not yet effective At the date of authorisation of the financial statements, the following new accounting standards and interpretations have been published that are not mandatory for 31 December 2023 reporting period and have not yet been applied by the Group within this financial report: AASB 2014–10 Consolidated Financial Statements and AASB 128 Investments in Associates (amendments) — Sale or contribution of assets between an investor and its associate or joint venture  (2) AASB 2020–1 Amendments to Australian Accounting Standards — Classification of liabilities as current or non-current (1) AASB 2022–5 Amendments to Australian Accounting Standards — Lease Liability in a Sale and Leaseback (1) AASB 2023–1 Amendments to Australian Accounting Standards — Amendments to AASB 107 and AASB 7 – Disclosures of Supplier Finance Arrangements (1) AASB 2023–3 Amendments to Australian Accounting Standards — Disclosure of Non-current Liabilities with Covenants: Tier 2 (1) (1) Effective for annual periods beginning on or after 1 January 2024. (2) Effective for annual periods beginning on or after 1 January 2025. Iress does not believe these new accounting standards, amendments, and interpretations will have a material impact on the financial statements of the Group in future periods. (c) Changes in presentation of the Consolidated statement of profit or loss and other comprehensive income Iress has revised its presentation of expenses recognised in profit or loss for the year ended 31 December 2023, using a classification based on the nature of expenses, which is considered to provide the most reliable and relevant information about the Group’s financial performance. The analysis of expenses has been presented in the Consolidated statement of profit or loss and other comprehensive income. Comparative balances have been reclassified to ensure consistency with changes to current period presentation and classification. The main change to the presentation of the Consolidated statement of profit or loss and other comprehensive income was to remove the previously disclosed line item ‘Net other expenses’ and to reclassify corresponding amounts recognised into the line items ‘Employee benefit expenses’, ‘Customer data fees’, ‘Amortisation, depreciation, derecognition and impairment expense’ and newly‑presented line items ‘Professional fees’, Business development and marketing’ and ‘General office and administration’. In addition, certain amounts of platform administration fees recognised as gross revenue and expenses in the prior financial year have been reclassified as a net amount disclosed in the line item ‘Revenue from contracts from customers’. (d) Summary of general accounting policies The following significant accounting policies have been adopted in the preparation and presentation of the financial report: (i) Consolidation The consolidated financial statements include the financial statements of the Company, and the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity. An entity is controlled when Iress is exposed to, or has rights to, variable returns from involvement with the entity and has the ability to affect those returns through power over the entity. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies in line with the Group’s accounting policies. In reporting the consolidated financial statements, all intercompany balances and transactions, and unrealised profits or losses within the Group are eliminated in full. (ii) Foreign currency translation Foreign currency transactions All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at the reporting date. Exchange differences are recognised in profit or loss in the period in which they arise, except for exchange differences on monetary items receivable from or payable to a foreign operation for which settlement is neither planned or likely to occur. These form part of the net investment in a foreign operation, and are recognised in the foreign currency translation reserve in the consolidated financial statements in addition to profit or loss on disposal of the net investment. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements128 129 Notes to the Consolidated Financial Statements (continued) For the year ended 31 December 2023 4.7 Basis of preparation (continued) (d) Summary of general accounting policies (continued) (ii) Foreign currency translation (continued) Foreign operations Assets and liabilities of foreign operations are translated using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the dates of the transactions are used. Any exchange differences are recognised in equity. On the disposal of a foreign operation, all of the exchange differences accumulated in equity in respect of that operation are reclassified to profit or loss. Financial assets The Company’s financial assets include cash and cash equivalents, derivatives, listed shares and trade and other receivables. Classification and subsequent measurement of financial assets Financial assets that meet the following conditions and are subsequently measured at amortised cost include: • the financial asset is held within a business model whose objective is to collect contractual cash flows • the contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. (iii) Financial instruments Financial assets and financial liabilities are recognised in the Company’s Statement of Financial Position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. When the transaction price differs from fair value at initial recognition, the Group will account for such difference if: • fair value is evidenced by a quoted price in an active market for an identical asset or liability or based on a valuation technique that uses only data from observable markets, then the difference is recognised as a gain or loss on initial recognition (i.e. day 1 profit or loss) • in all other cases, the fair value will be adjusted to bring it in line with the transaction price (i.e. day 1 profit or loss will be deferred by including it in the initial carrying amount of the asset or liability). After initial recognition, the deferred gain or loss will be released to profit or loss such that it reaches a value of zero at the time when the entire contract can be valued using active market quotes or verifiable objective market information. Depending on the type of financial instrument, the Group can adopt one of the following policies for the amortisation of day 1 gain or loss: • Calibrate unobservable inputs to the transaction price and recognise the deferred gain or loss as the best estimates of those unobservable inputs change based on observable information. • Release the day 1 gain or loss in a reasonable fashion based on the facts and circumstances (i.e. using either straight‑line or non‑linear amortisation). All other financial assets are subsequently measured at fair value. Amortised cost and interest income Interest income is recognised using the effective interest method for financial assets measured subsequently at amortised cost. Interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial asset, except for financial assets that have subsequently become credit impaired. Impairment of financial assets The Group performs impairment assessment under the expected credit losses model on financial assets (including trade and other receivables, receivables from related parties and bank balances), which are subject to impairment under AASB 9 Financial Instruments. The amount of expected credit losses is updated at the end of each reporting period to reflect changes in credit risk since initial recognition. Refer to Note 2.5(b) on the Group’s approach to the credit loss allowance. Derecognition of financial assets The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another entity. On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying amount and the sum of the consideration received and receivable is recognised in profit or loss. Cash and cash equivalents Cash and cash equivalents include cash in hand and on‑demand deposits, and other short‑term highly liquid investments, readily convertible into a known amount of cash and are subject to an insignificant risk of changes in value. Financial liabilities and equity Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs. (v) Taxation Significant judgement is required in the recognition and measurement of deferred tax assets relating to the timing of reversal of temporary differences and the recoverability of unused tax losses and unused tax credits to the extent it is probable that future taxable profits will be available against which they can be realised. 4.9 Transactions with related parties There are no shareholders with substantial holdings that materially transacted with the Group during the year. 4.10 Events subsequent to the Statement of Financial Position date There has been no matter nor circumstance which has arisen since the end of the financial year that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in subsequent years. Bank borrowings Interest‑bearing bank loans and overdrafts are recorded at the fair value of proceeds received, net of direct issue costs. Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the statement of comprehensive income using the effective interest rate method. They are added to the carrying amount of the instrument to the extent that they are not settled in the period in which they arise. Trade payables Trade payables are initially measured at fair value and are subsequently measured at amortised cost, using the effective interest rate method. 4.8 Significant sources of estimation uncertainty The following are subject to estimates and require significant judgement: (i) Goodwill Significant judgement is required in the assumptions used in the value‑in‑use models used in impairment testing. Refer to Note 2.1 for more detailed information. (ii) Revenue from contracts with customers Significant judgement is required in relation to whether revenue from contracts with customers should be recognised over time or at a point‑in‑time, identification of the performance obligations in the contract and the allocation of the transaction price to each specific performance obligation, the implementation revenue recognised as a percentage of completion and it being a distinct performance obligation, as well as determining whether Iress is the principal or agent in a transaction with an end consumer. Refer to Note 1.3 for further details of revenue recognition. (iii) Credit Loss Allowance Significant judgement is required in the assumptions made in calculating the Group’s credit loss allowance included within trade and other receivables. Refer to Note 2.5 for more detailed information. (iv) Development costs capitalised Significant judgement is required in determining whether internally generated intangible assets are recognised where the cost of actual development can be reliably measured and clearly distinguished from research and ongoing operating and maintenance activities, and whether costs that are directly associated with the development of software are recognised where the established criteria are met. Refer to Note 2.1 for more detailed information. Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements130 Directors’ Declaration 31 December 2023 Independent Auditor’s Report 131 In the Directors’ opinion: (a) the financial statements and notes set out on pages 46 to 93 are in accordance with the Corporations Act 2001, including: (i) complying with the Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements (ii) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2023 and of its performance for the financial year ended on that date (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable (c) at the date of this declaration, there are reasonable grounds to believe that the members of the extended closed group identified in Note 4.5 will be able to meet any obligations or liabilities to which they are, or may become subject by virtue of the deed of cross guarantees described in Note 4.6. Note 4.7 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act 2001. This declaration is made in accordance with a resolution of the Directors. Roger Sharp Chair Melbourne 21 February 2024 Marcus Price Managing Director and Chief Executive Officer Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au Independent auditor’s report to the members of Iress Limited Report on the audit of the financial report Opinion We have audited the financial report of Iress Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 31 December 2023, the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including material accounting policy information, and the directors’ declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: a. Giving a true and fair view of the consolidated financial position of the Group as at 31 December 2023 and of its consolidated financial performance for the year ended on that date; and b. Complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 132 Independent Auditor’s Report (continued) 133 1. Impairment assessment for intangibles Why significant How our audit addressed the key audit matter A significant component of the Group’s total assets are intangible assets, amounting to $550.7 million, representing 70% of the Group’s total assets. Included within this intangible asset balance is goodwill amounting to $481.1 million. In line with the accounting standard requirements, these goodwill balances are required to be tested for impairment annually, and where indicators exist. In the current year, the Group has performed a strategic restructure with effect from 1 July 2023. For the purposes of June 2023 Half Year reporting, this was determined to be an indicator of impairment for all cash generating units (“CGUs”), with management performing an impairment assessment and subsequently recognising a $130.4 million impairment in relation to the UK CGU. Management performs their annual impairment assessment as at December each year, and therefore have also performed an impairment assessment for all CGUs within the current structure as at year end. No further impairment was recognised as a result of this assessment at year end. The impairment assessments are complex and involve significant management judgement specifically in relation to identification of CGUs, preparation of cash flow forecasts including long term growth rates and determination of discount rates. The assessment completed by the Group includes numerous assumptions and estimates and as such is considered to be subject to a significant level of estimation uncertainty. Based on the factors noted above we consider the impairment assessment of intangible assets to be a key audit matter. Our audit procedures included the following: ► Assessed the application of the valuation methodologies applied. ► Evaluated whether the determination of CGUs was in accordance with Australian Accounting Standards. ► Agreed the forecast cashflows within the impairment model to the Board approved budgets. ► Considered the historical accuracy of the Group’s cash flow forecasting process. ► Compared the forecast cash flows used in the recoverable amount models to the actual current year financial performance of the underlying CGUs for reasonability. ► Assessed key inputs being discount rates and terminal value growth rates adopted in the recoverable amount models including comparison to available market data for comparable businesses. ► Performed sensitivity analysis on key inputs and assumptions included in the forecast cashflows and impairment models including the discount rates, to assess the risk of the CGU carrying values exceeding the recoverable amount. ► We compared earnings multiples derived from the group’s recoverable amount models to those observable from external market data of comparable listed entities. ► Assessed the adequacy of the disclosures included in the financial report including "reasonably possible change" sensitivity disclosure. Our valuation specialists were involved in the conduct of these procedures where required. 2. Capitalised Software Development Costs Why significant How our audit addressed the key audit matter The Group capitalises internally generated software assets where they represent the development of new discrete products or market offerings outside the core customer systems and are able to be reliably measured. The carrying value of capitalised development costs at 31 December 2023 is $16.9 million (PY: $25.8 million). Capitalised development costs are work-in-progress as at 31 December 2023 have not yet begun to be amortised. Capitalised development costs are reviewed each period to identify projects which have been discontinued requiring associated capitalised costs to be derecognised. During the year ended 31 December 2023 the Group capitalised $14.1 million (31 December 2022: $19.9 million). In addition, $13.3 million was derecognised as a result of ongoing projects being discontinued in connection with the strategic review completed in March 2023. Our audit procedures included the following: ► We selected a sample of software development projects to determine the nature and status of the projects and assessed whether the costs incurred on these projects met the capitalisation requirements under AASB 138 Intangible assets. ► We met with management, including business partners and Project Leads, to understand project status, assess the feasibility of project completion and assess the future economic benefits. ► For a sample of capitalised employee and contractor costs, we agreed the pay rates to employment contracts or supplier invoices. We discussed with management and relevant employees their involvement in projects to assess the percentage of employee time allocated to the project. ► We assessed the timing of commencement of amortisation for any projects completed during the year. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Why significant How our audit addressed the key audit matter This also included assessing the useful lives and recalculating the amortisation for the year. ► We enquired regarding any discontinued projects and ensured they had been appropriately derecognised. ► We assessed the adequacy of the related disclosures in the financial report, including the judgements associated with the capitalisation of intangible software assets. The Group’s process for capitalising development costs involves significant judgement as it includes evaluating the commercial viability of the software, distinguishing development costs from research and ongoing maintenance activities and estimating the time which staff spend developing the software and the costs attributable to that time. The capitalization of development costs continues to be a key focus area from regulatory bodies on the validation of the feasibility and legitimacy of capitalised costs relating to internally generated assets. Due to the above, this matter is significant to the audit and there is a high level of audit effort required due to the level of complexity and management judgement involved. As such, we consider capitalisation of software development assets to be a key audit matter. Information other than the financial report and auditor’s report thereon The directors are responsible for the other information. The other information comprises the information included in the Company’s 2023 annual report, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements 134 Independent Auditor’s Report (continued) 135 As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: ► Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ► Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. ► Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ► Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ► Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ► Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 55 to 81 of the directors’ report for the year ended 31 December 2023. In our opinion, the Remuneration Report of Iress Limited for the year ended 31 December 2023, 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. Ernst & Young David Petersen Partner Melbourne 21 February 2024 A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation Iress LimitedStrategic ReportESGAnnual Report 2023Financial ReportFinancial Statements  136 Financial Report 137 Shareholder information Corporate directory Directors R Sharp Chair since May 2021 and Independent Non‑Executive Director since February 2021 M Price Independent Non‑Executive Director since July 2021 and Managing Director and Chief Executive Officer since October 2022 N Beattie Independent Non‑Executive Director since February 2015 M Dwyer Independent Non‑Executive Director since February 2020 J Fahey Independent Non‑Executive Director since October 2017 and Chair of the People & Performance Committee since February 2020 A Glenning Independent Non‑Executive Director since October 2022 T Vonhoff Independent Non‑Executive Director since February 2020 and Chair of the Audit & Risk Committee since May 2021 Company Secretary M Bowan (interim) Registered Office Level 16, 385 Bourke Street Melbourne VIC 3000 Phone: +61 3 9018 5800 Fax: +61 3 9018 5844 Share Registry Computershare Investors Services Pty Limited 452 Johnston Street Abbotsford VIC 3067 www.computershare.com Stock Exchange Listing Iress Limited shares are quoted on the Australian Securities Exchange under the code: IRE Auditor Ernst & Young The below shareholder information was applicable as at 18 January 2024: (a) Distribution of members and their holdings: 1 to 1,000 1,001 to 5,000 5,001 to 10,000 10,001 to 100,000 100,001 and over Total (b) Substantial shareholders(1): Mitsubishi UFJ Financial Group, Inc.(3) Challenger Limited and Apollo Global Management, Inc. DNR Capital Pty Ltd The Vanguard Group, Inc. Selector Funds Management Limited Total substantial shareholders Balance of register Total Number of shareholders Number of shares % of issued capital 4,858 2,966 549 347 34 8,754 1,849,865 7,156,464 3,959,023 8,263,984 165,560,138 186,789,474 0.99 3.83 2.12 4.42 88.64 100.00 Number held(1) %(2) 22,173,568 19,361,036 13,630,278 9,465,830 9,350,918 73,981,630 112,807,844 186,789,474 11.87 10.37 7.30 5.07 5.01 39.62 60.38 100.00 (1) Number of securities based on the most recent section 671B disclosure lodged with ASX Ltd. (2) Percentage based on Iress’ issued share capital as at 18 January 2024. (3) First Sentier Holdings Pty Limited lodged a section 671B notice (“Subsidiary Notice”) on 5 December 2023 for an identical number of securities to the number specified in this notice. Mitsubishi UFJ Financial Group, Inc. states in its notice that it has voting power of 100% in First Sentier Investors Holdings Pty Limited; as a consequence reference to the Subsidiary Notice is not included in the above table. (c) 20 largest shareholders of quoted equity securities Rank Name 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED CITICORP NOMINEES PTY LIMITED J P MORGAN NOMINEES AUSTRALIA PTY LIMITED NATIONAL NOMINEES LIMITED BNP PARIBAS NOMS PTY LTD BNP PARIBAS NOMINEES PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED MUTUAL TRUST PTY LTD BNPP NOMS PTY LTD HUB24 CUSTODIAL SERV LTD ARGO INVESTMENTS LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2 NETWEALTH INVESTMENTS LIMITED CITICORP NOMINEES PTY LIMITED CITICORP NOMINEES PTY LIMITED <143212 NMMT LTD A/C> SANDHURST TRUSTEES LTD CPU SHARE PLANS PTY LTD BNP PARIBAS NOMS (NZ) LTD NETWEALTH INVESTMENTS LIMITED UBS NOMINEES PTY LTD UBS NOMINEES PTY LTD Total Top 20 shareholders Balance of register Total Number held % of issued shares 54,211,871 49,383,971 29,134,729 11,185,818 5,257,179 2,693,840 2,478,173 1,758,466 1,587,480 1,216,431 792,924 764,493 499,598 391,971 368,692 351,283 335,981 322,656 319,159 287,907 163,342,622 23,446,852 186,789,474 29.02 26.44 15.60 5.99 2.81 1.44 1.33 0.94 0.85 0.65 0.42 0.41 0.27 0.21 0.20 0.19 0.18 0.17 0.17 0.15 87.44 12.56 100.00 Iress LimitedStrategic ReportESGAnnual Report 2023138 GRI Content Index Financial Report 139 Statement of use Iress Limited has reported in accordance with the GRI Standards for the period 1 January 2023 to 31 December 2023. GRI 1: Foundation 2021 was used. There is no applicable GRI sector standard. GRI Standard Disclosure GENERAL DISCLOSURES GRI 2 General Disclosures 2021 2‑1 2‑2 2‑3 2‑4 2‑5 2‑6 2‑7 Organisational details Entities included in the organisation's sustainability reporting Reporting period, frequency and contact point Restatements of information External assurance Activities, value chain and other business relationships Employees 2‑8 Workers who are not employees 2‑9 2‑10 2‑11 2‑12 2‑13 2‑14 2‑15 2‑16 2‑17 2‑18 2‑19 2‑20 2‑21 2‑22 2‑23 2‑24 Governance structure and composition Nomination and selection of the highest governance body Chair of the highest governance body Role of the highest governance body in overseeing the management of impacts Delegation of responsibility for managing impacts Role of the highest governance body in sustainability reporting Conflicts of interest Communication of critical concerns Collective knowledge of the highest governance body Evaluation of the performance of the highest governance body Remuneration policies Process to determine remuneration Annual total compensation ratio Statement on sustainable development strategy Policy commitments Embedding policy commitments Page/reference/further information Pages 4, 137. Iress Limited Page 4. Iress Limited is the only entity included in this report Reporting period: 1 January – 31 December 2023 Contact point: Amarjot Bagga, Head of Environment and Social Impact. amarjot.bagga@iress.com Environmental activity data and emissions calculations from FY19 to FY22 have been re‑issued due to changes in the methodology and reporting boundary to align with best practice External assurance has not been undertaken for the environmental, social & governance (ESG) sections of this report Pages 4, 5, 34–35 Pages 4, 22, 23, 28–32. Iress made the difficult but necessary decision to reduce headcount by approximately 21% in 2023 to restore profitability and improve efficiency. Data has been compiled using internal management systems. Pages 28, 30. Iress does not employ contractors that are considered to complete a significant portion of the company’s activities. Contractors primarily provide product and technology support. Iress made the difficult but necessary decision to reduce headcount by approximately 21% in 2023 to restore profitability and improve efficiency. Data has been compiled using internal management systems See Corporate Governance Statement and page 38 See Corporate Governance Statement and Board Charter Pages 42, 50. Roger Sharp is the Chair of Iress' Board of Directors. Roger Sharp is a non‑executive director See Corporate Governance Statement and Board Charter See Board Charter Iress' Board of Directors has reviewed and endorsed this report See Conflicts of Interest Policy Pages 38–39, 44–55 Pages: 42‑43. See Corporate Governance Statement See Corporate Governance Statement Pages 52–81. See Corporate Governance Statement, Board Charter Pages 52–81. See Corporate Governance Statement, Board Charter Information currently not calculated. Pages 6–9, 12 Pages 6–9, 12, 15–16, 21, 23, 33–34, 37. See corporate governance policies and procedures Page 39. See Code of Ethics and Conduct Policy GRI Standard Disclosure Page/reference/further information 2‑25 2‑26 2‑27 2‑28 2‑29 2‑30 Processes to remediate negative impacts Mechanisms for seeking advice and raising concerns Compliance with laws and regulations Membership associations Approach to stakeholder engagement Collective bargaining agreements Pages 15–18, 26–27, 33, 35, 39 Page 39 No significant instances of non‑compliance with laws and regulations during the reporting period. No fines for instances of non‑compliance with laws and regulations paid during the reporting period Page 39 Pages 13, 21, 33–35 Not applicable. No Iress employees are employed on collective bargaining agreements Material topics GRI 3 3‑1 3‑2 Material Topics 2021 Process to determine material topics List of material topics SPECIFIC DISCLOSURES Customer experience GRI 3 3‑3 Material Topics 2021 Management of material topics Ethics and integrity GRI 3 3‑3 GRI 207 207‑1 207‑2 207‑3 207‑4 Material Topics 2021 Management of material topics Tax 2019 Approach to tax Tax governance, control, and risk management Stakeholder engagement and management of concerns related to tax Country‑by‑country reporting Data privacy and cyber security GRI 3 3‑3 GRI 418 418‑1 Material Topics 2021 Management of material topics Customer Privacy 2016 Substantiated complaints concerning breaches of customer privacy and losses of customer data Transparent, fair, and responsible product information/advice GRI 3 3‑3 417‑1 Material Topics 2021 Management of material topics Requirements for product and service information and labelling Incidents of non‑compliance concerning product and service information and labelling 417‑2 417‑3 Incidents of non‑compliance concerning marketing communications Page 13 Page 13 Pages 1, 6–9, 12–13, 17–18, 23, 33, 38–39 Pages 34, 38–39 Page 39. See Tax Transparency Report See Tax Transparency Report See Tax Transparency Report Not applicable. Iress Limited does not meet the definition of a Significant Global Entity (i.e. turnover >$1bn) Page 39 No instances of substantiated complaints concerning breaches of customer privacy and losses of customer data recorded during the reporting period Pages 5, 39 Not applicable. Iress does not produce physical products, no product disclosure statements produced No instances of non‑compliance concerning product and service information and labelling recorded during the reporting period No instances of non‑compliance concerning marketing communication recorded during the reporting period Talent attraction and retention, employee engagement Material Topics 2021 GRI 3 Management of material topics 3‑3 New employee hires and employee turnover 401‑1 Benefits provided to full‑time employees that are 401‑2 not provided to temporary or part‑time employees Parental leave 401‑3 Pages 9, 21, 23. See Careers webpage Page 29 Pages 3, 22, 33. See Benefits webpage. Page 32 Iress LimitedStrategic ReportESGAnnual Report 2023 140 GRI Content Index continued ESG Financial Report 141 GRI Standard Disclosure Page/reference/further information GRI Standard Disclosure Page/reference/further information 403‑3 403‑4 403‑5 403‑6 403‑7 403‑8 403‑9 403‑10 409‑1 Occupational health, safety, and wellbeing GRI 3 3‑3 403‑1 403‑2 Material Topics 2021 Management of material topics Occupational health and safety management system Hazard identification, risk assessment, and incident investigation Occupational health services Worker participation, consultation, and communication on occupational health and safety Worker training on occupational health and safety Promotion of worker health Prevention and mitigation of occupational health and safety impacts directly linked by business relationships Workers covered by an occupational health and safety management system Work‑related injuries Work‑related ill health Modern slavery and forced labour GRI 3 3‑3 408‑1 Material Topics 2021 Management of material topics Operations and suppliers at significant risk for incidents of child labour Operations and suppliers at significant risk for incidents of forced or compulsory labour Climate change adaptation and resilience GRI 3 3‑3 305‑1 305‑2 305‑3 305‑4 305‑5 305‑6 Material Topics 2021 Management of material topics Direct (Scope 1) GHG emissions Energy indirect (Scope 2) GHG emissions Other indirect (Scope 3) GHG emissions GHG emissions intensity Reduction of GHG emissions Emissions of ozone‑depleting substances (ODS) 305‑7 Nitrogen oxides (NOx), sulfur oxides (SOx), and other significant air emissions Responsible advertising GRI 3 3‑3 GRI 417 417‑1 417‑2 417‑3 Material Topics 2021 Management of material topics Marketing and Labeling 2016 Requirements for product and service information and labeling Incidents of non‑compliance concerning product and service information and labeling Incidents of non‑compliance concerning marketing communications Pages 21–22 Page 22 Page 22 Page 22 Page 22 Page 22 Page 22 Not applicable. Given the nature of the products sold by Iress, no significant negative OH&S impacts linked with operations, products or services have been identified and/or needed mitigation Pages 22, 28 Pages 22, 28 Pages 22, 28 Pages 33–35 Pages 33–35 Pages 33–35 Pages 12, 15–18 Page 18 Page 18 Page 19 Pages 18–19 Pages 15–19 Not applicable. Iress does not produce, import or export ozone‑depleting substances Not applicable. Iress activity does not result in emission of these substances Page 39 Not applicable. Iress does not produce physical products, no product disclosure statements produced No instances of non compliance concerning product and service information and labeling recorded during the reporting period No instances of non compliance concerning marketing communication recorded during the reporting period 308‑2 414‑1 414‑2 Responsible and sustainable procurement GRI 3 3‑3 308‑1 Material Topics 2021 Management of material topics New suppliers that were screened using environmental criteria Negative environmental impacts in the supply chain and actions taken New suppliers that were screened using social criteria Negative social impacts in the supply chain and actions taken Economic growth GRI 3 3‑3 201‑1 201‑2 201‑3 201‑4 Material Topics 2021 Management of material topics Direct economic value generated and distributed Financial implications and other risks and opportunities due to climate change Defined benefit plan obligations and other retirement plans Financial assistance received from government 204‑1 Proportion of spending on local suppliers Anti-corruption GRI 3 3‑3 205‑1 205‑2 205‑3 Material Topics 2021 Management of material topics Operations assessed for risks related to corruption Communication and training about anti‑corruption policies and procedures Confirmed incidents of corruption and actions taken Waste and resource efficiency GRI 3 3‑3 301‑1 Material Topics 2021 Management of material topics Materials used by weight or volume 301‑2 301‑3 GRI 302 302‑1 302‑2 302‑3 302‑4 302‑5 GRI 306 306‑1 306‑2 306‑3 306‑4 306‑5 Recycled input materials used Reclaimed products and their packaging materials Energy 2016 Energy consumption within the organization Energy consumption outside of the organization Energy intensity Reduction of energy consumption Reductions in energy requirements of products and services Waste 2020 Waste generation and significant waste‑related impacts Management of significant waste‑related impacts Waste generated Waste diverted from disposal Waste directed to disposal Pages 33–35 Pages 34–35 Real‑time monitoring of all non‑government suppliers, including financial stability, adverse media (environmental, labour, health & safety, ethical & regulatory media), sanctions, and company sustainability credentials All new suppliers must complete our supplier due diligence questionnaire No negative impacts identified in the supply chain in 2023 Pages 6–9 Pages 2–3, 46–49 Pages 16–17 Iress does not have a defined benefit plan Iress received $1,207,523.77 of government financial assistance comprised of $1,169,673 in Australia, $24,700.58 in South Africa & $13,150.19 in Singapore Pages 34–35 Page 39 Pages 38–39 Page 39 No instances of corruption recorded during the reporting period Page 18 Not applicable. Iress does not produce or sell any physical products Not applicable. Iress does not produce or sell any physical products Not applicable. Iress does not produce or sell any physical products Pages 18–19 Page 19 Pages 18–19 Pages 15, 18–19 Pages 15, 18–19 Page 19 Page 19 Page 19 Page 19 Page 19 Iress LimitedStrategic ReportAnnual Report 2023142 GRI Standard Disclosure Page/reference/further information Diversity, equity, and inclusion GRI 3 3‑3 405‑1 405‑2 GRI 406 406‑1 Material Topics 2021 Management of material topics Diversity of governance bodies and employees Ratio of basic salary and remuneration of women to men Non-discrimination 2016 Incidents of discrimination and corrective actions taken MATERIAL TOPICS WITH NO RELATED GRI DISCLOSURES Page 23 Pages 23, 28–32 Page 32 No incidents of discrimination and corrective actions taken during the reporting period Product/service quality GRI 3 3‑3 Material Topics 2021 Management of material topics Innovation GRI 3 3‑3 Material Topics 2021 Management of material topics Culture and values GRI 3 3‑3 Material Topics 2021 Management of material topics Risk management GRI 3 3‑3 Material Topics 2021 Management of material topics Industry leadership and engagement GRI 3 3‑3 Material Topics 2021 Management of material topics Pages 5–9 Page 9 Pages 1, 23 Pages 17, 38, 44–45 Pages 17, 38, 44–45 Reset Refocus Build iress.com Annual Report 2023

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