Annual Report 2023
What it takes, together.
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Brave and Innovative
With a clear mission
to bring life into the
world and a brave and
innovative approach to
reproductive healthcare,
Monash IVF Group
is leading the way in
providing best-in-class
fertility solutions.
We believe everyone who wants to start a family should have the opportunity to do so -
when they are ready to and at whatever stage of their life they are at. We are committed to
changing societal perceptions and behaviours in relation to reproductive health.
With 50+ years of scientific and clinical excellence and 50,000+ babies to our name, we
have spent years evolving our business to meet the modern-day needs of our patients.
We have invested in strong doctor partnerships and state-of-the-art clinical infrastructure
and scientific technology to give our patients the best possible chance of starting, or
extending their families.
In FY23 we became the first fertility provider to operate in every mainland capital city of
Australia, while at the same time extending into more locations across South-East Asia.
Across almost 40 clinics, 16 ultrasound sites, 12 pathology laboratories and 2 genetic
laboratories, our team of more than 100 fertility specialists work alongside our
scientists, sonographers, genetic experts, counsellors, nursing and support staff to
provide integrated, holistic and inclusive care to patients in Australia, Malaysia, Singapore
and Indonesia.
From pre-conception fertility assessments and genetic carrier screening to egg and
sperm freezing, preimplantation genetic testing and counselling to ultrasound, donor and
surrogacy services and assisted reproductive treatments, our patients can rest assured
we will support them at every stage of their fertility journey.
Together with our patients, we will do what it takes to help them achieve
their family dreams.
Contents
About Us
Year in Review
Chairman’s Report
Managing Director & CEO’s Report
Chief Financial Officer’s Report
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
Directors’ Report
Remuneration Report – Audited
Lead Auditor's Independence Declaration
Corporate Governance Statement
Acknowledgement of Country
In the spirit of reconcilitation, Monash IVF Group acknowledges the
Traditional Custodians of country throughout Australia and their
connections to land, sea and community.
We pay our respect to their Elders past and present, and extend that
respect to all Aboriginal and Torres Strait Islander peoples today.
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
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Corporate Directory
2
4
6
8
10
12
14
16
18
26
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30
44
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2 | Monash IVF Group
Annual Report 2023 | 3
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
New Patient
Registrations
increased by
↑ 12%
compared to FY22
Domestic
acquisitions
2
Total Medical
Specialists
↑ 44%
On FY18 (FY23, 153)
New patient domestic
stimulated cyles
↑ 7.2%
On FY22 (FY23; 5,251)
Total domestic
stimulated cycles
↑ 5.5%
On FY22 (FY23; 10,323)
Bali clinic
Opened
15.9.2022
Average
patient NPS
score
↑ 71
FY2023
A Year in Review
Monash IVF Group places great importance on partnering with
doctors committed to delivering market-leading success rates &
best-in-class patient experience.
In FY23, 25 new fertility specialists joined us through
recruitment and business acquisition.
Success rates
increased by
↑ 6.1%4
since 2019
Employee Engagement
Culture of Success
+64%
Revenue
$213.6m
↑ 11.1% on FY22
Underlying NPAT 1 ,3
Underlying EBITDA1,2
$25.5m
↑ 14.7% on FY22
$53.4m
↑ 11.0% on FY22
Underlying EBIT 1,2
$38.1m
↑ 14.2% on FY22
Reported NPAT 3
$22.0m
↑ 18.9% on FY22
4 | Monash IVF Group
Annual Report 2023 | 5
1. Non-IFRS measure2. Refer to page 32 for reconciliation of Reported EBITDA, EBIT and NPAT to Adjusted EBITDA, EBIT and NPAT3. NPAT including minority interest4. 2023 Jan-Mar About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Chairman's
Report
In looking to the future, the Board is confident that Monash IVF
Group is well positioned to maintain our strong financial position
and deliver sustained shareholder value creation.
Monash IVF Group delivered a strong result
in FY23 with revenue growth of 11.1% and
Underlying1 NPAT growth of 14.7% to $25.5m.
We are proud of this result considering
economic conditions and financial pressures in
parts of our community, reaffirming that IVF is
an essential service.
In recent years we have invested significantly in
our infrastructure, services and people, and the
benefits from these initiatives started to become
evident in the second half of FY23.
These recent investments provide the
foundation to deliver above market growth
and maintain best-in-class experiences for our
patients and doctors.
Whilst the COVID-19 pandemic drove significant volatility in the
IVF market in Australia, we believe the industry has settled at a
new base that is well above pre-pandemic levels. Importantly the
market rebounded in 2H23 recording 5.6% growth in stimulated
cycles compared to prior comparative period after a 6.6% decline
during 1H23.
We believe the Australian IVF market is entering a period of
sustained growth, driven by traditional and new demand drivers.
The traditional drivers of rising maternal age, improving success
rates and continued Government funding are just as compelling as
ever. New and emerging growth drivers are expected to supplement
growth, including rising awareness of egg freezing and flow on
referrals to IVF from the significant increase in genetic carrier
screening that is expected following the introduction of a Medicare
rebate in November 2023. If a couple receives an abnormal result
from genetic carrier screening, the best way to minimise the risk
of their children being affected is to have Assisted Reproductive
Services and genetically test their embryos.
We also continue to focus on growing our People and culture, with
recent surveys demonstrating people and doctor engagement
are at record highs. We have also been busy building on our
diverse and inclusive workplace practices, and our learning and
development framework.
In looking to the future, the Board is confident that Monash IVF
Group is well placed to maintain our strong financial position and
deliver sustained shareholder value creation. Our strong patient
pipelines leading into FY24, recent investments in future growth,
and the dedication of our People, together provide a positive
growth outlook for FY24 and beyond.
On behalf of the Board of Directors, I thank our People and
Clinicians for their ongoing commitment, which together are
driving us towards our Vision to be the most admired reproductive
care provider in the world. I would also like to thank you, our
Shareholders, for your continued support for Monash IVF
Group. We look forward to continuing our strong momentum in
the year ahead.
Mr Richard Davis
Independant Chairman
We are also passionate about servicing the growing LGBTIQA+
population in assisting them achieve their dreams of starting and
extending their family. We offer a bespoke solution to this growing
patient segment, including a world class donor program.
Our Australian IVF business grew in FY23, with stimulated cycles
up 5.5% on the prior year and market share increasing 1.4% to
22.7%. Organic growth was supplemented by contributions from
the ART Associates and PIVET acquisitions that were completed
during the year, making us the only IVF provider with a presence in
every Australian mainland capital city.
Our Australian Ultrasound business turned the corner in FY23,
following a lengthy industry-wide recovery from the pandemic.
Both the Sydney and Melbourne ultrasound businesses are now
performing well, delivering scan growth of 12.7% in the second
half of FY23.
Whilst our South-East Asia business recorded solid FY23 growth
in stimulated cycles of 19.9%, earnings were impacted by a slower
ramp up in volumes in the new Singapore fertility clinic. Our recent
investment in science, nursing and marketing provides a platform
for growth across all our clinics in the South-East Asia region.
As well as delivering on our financial and operational objectives,
we are committed to improving and enhancing our Corporate
Governance. During FY23, the Company established an
Environmental, Social and Governance (ESG) Committee to
ensure our business is run as an environmentally and socially
sustainable business, capable of generating long term value for
stakeholders. As Monash IVF Group strives to become the most
admired reproductive care provider in the world, we acknowledge
that we are in a privileged position to actively drive positive
societal change in relation to how our community thinks and
behaves in reference to their reproductive health, and to protect
the environment and natural resources for the benefit of the
generations of children that will be born as a result of our efforts.
6 | Monash IVF Group
Annual Report 2023 | 7
1. Refer to page 32 for reconciliation of Reported EBITDA, EBIT and NPAT to Adjusted EBITDA, EBIT and NPAT About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Managing Director
& CEO’s Report
I have great confidence in the outlook for Monash IVF Group,
with our businesses performing well and our Company in a
strong financial position.
Monash IVF Group had a very successful year
in FY23, driven by our commitment to market
leading success rates, our recent investment
in best-in-class infrastructure and patient
experience, and the dedication of our People
and Clinicians.
This success was reflected in our strong financial
results, market share gains across most of our
businesses, and most importantly, a further
increase in success rates ensuring we give every
patient the best opportunity to create or grow
their family.
In FY23, Monash IVF Group delivered revenue growth of 11.1%
to $213.6m, and Underlying EBITDA growth of 11.0% to $53.4m.
The strong performance was driven by the domestic Assisted
Reproductive Services and Women’s Imaging business, partly offset
by a weaker result from the International IVF business.
A very exciting part to the FY23 result was the promising second
half performance, where 2H23 Underlying NPAT increased by
46.6% on prior comparative period. This compelling ramp up
in activity across the year reflects a return to positive industry
momentum and tangible benefits starting to flow from the
significant recent investment in growth, which together provides
confidence leading into FY24.
Key highlights of FY23
People: Our most important asset
•
During FY23 we welcomed a further 25 fertility specialists
into the Monash IVF Group family. Our attractive doctor value
proposition ensures that Monash IVF Group is the destination
of choice for clinicians. Our highly engaged doctor group are
strong advocates for the Group, and this is instrumental in our
successful recruitment of new clinicians.
• Our Australian IVF business grew market share by a further
1.4% to 22.7%, driven by organic growth and the ART
Associates and PIVET acquisitions.
• We have continued to drive better outcomes for our patients,
with clinical success rates improving 1.0% to 38.0% in calendar
year 2022, with a further 0.7% improvement in the March
2023 quarter to 38.7%. We continue to invest in research and
partner with innovative organisations, ensuring we remain at
the forefront of scientific developments in the fertility space.
• We have completed new fertility clinics in Cremorne (Victoria),
Penrith, Darwin, Rockhampton and Gold Coast, whilst there
are another three clinics in various phases of design and
construction, including Brisbane, Sunshine and an ultrasound
clinic in St Leonards. In addition, a new day hospital has
opened in Gold Coast during 1H24, with Cremorne's Day
Surgery Unit opening at the end of 2023.
• We are positioning ourselves to benefit from growth in new
services such as egg freezing and genetic carrier screening,
and we are investing in new channels such as sport and
corporate channels so we can reach and educate patients
earlier in their fertility journey.
• Our Women’s Imaging businesses in Sydney and Melbourne
returned to growth in the second half of FY23. With industry
headwinds now behind us, we are confident of consolidating
this improved performance in FY24.
•
In South-East Asia, whilst we experienced a slower ramp up
in volumes in Singapore, our other clinics performed well, and
we are committed to growing our presence in this attractive
region. Our current focus is on improving doctor engagement
and recruiting more fertility specialists in existing clinics,
driving clinical and scientific leadership in the region and
exploring new partnership opportunities.
Monash IVF Group is a people-centric business, with our People
at all levels of the organisation working together to deliver life
changing outcomes to our patients at a very sensitive and
emotional stage in their lives. We place great importance on
learning and development, workplace health and safety, and
inclusion and diversity. Our commitment to our People is reflected
in Monash IVF Group reporting our highest ever engagement score
of 64%, well above industry benchmarks.
I would like to thank all our People and Clinicians for their
tremendous efforts during the year and their unrelenting patient-
first mindset. It is their dedication that has ensured we deliver
exceptional experiences and outcomes for our patients and
clinicians and create value for our shareholders. This focus on our
People and their commitment to our vision, are key reasons we
have such an optimistic outlook for the future.
FY24 Outlook
A return to industry growth in 2H23, recent market share
gains and strong new patient registrations provides a positive
growth trajectory for Monash IVF Group heading into FY24.
We are continuing to focus on attracting and onboarding new
and experienced fertility specialists and we continue to invest
in the medium to long term future through new and upgraded
clinic infrastructure. This reflects our commitment to driving
improvement to our Patient and Doctor Experience whilst also
representing the strong belief we have in future industry growth.
I have great confidence in the outlook for Monash IVF Group,
with our businesses performing well and our company in a strong
financial position. We have a clear Vision 2026 strategy to deliver
sustainable growth and create value for our shareholders.
Mr Michael Knaap
Managing Director & CEO
8 | Monash IVF Group
Annual Report 2023 | 9
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Chief Financial Officer &
Company Secretary's Report
Monash IVF Group had a very positive year in
FY23, with strong performance in our domestic
IVF business and improvement in the women’s
imaging business driving Underlying NPAT1,2,3
growth of 14.7%.
This result was particularly pleasing given the challenging macro
conditions including cost of living pressures, high inflation and
monetary policy. Both the IVF industry and Monash IVF Group
demonstrated great resilience which has created a good platform
going into FY24.
Monash IVF Group delivered revenue growth of 11.1% to $213.6m.
Growth gathered momentum across the year, with 2H23 revenue
growth of 22% on prior comparative period compared to 1H23
revenue growth of 2% on prior year. The first three months of FY23
were challenging as COVID-19 and influenza in the community
impacted activity in IVF and ultrasound, resulting in the IVF industry
declining by 6.6% in 1H23 compared to prior comparative period.
Following the first half decline, the industry grew in 2H23 by 5.6%
vs prior comparative period. The ramp-up in second half growth
indicated the current macroenvironment is not materially impacting
patients' willingness to afford and access fertility treatment.
The domestic assisted reproductive services, women's imaging
and international IVF businesses all achieved double-digit revenue
growth in FY23. Revenue growth was driven by market share gains
(both organic and from the ART Associates and PIVET acquisitions)
and price increases. Second half performances in our domestic
businesses were compelling, including 23% growth in 2H23 new
patient registrations in our domestic IVF business, providing a
robust growth platform heading into FY24.
The Group achieved Underlying EBITDA1,2 growth of 11.0% to
$53.4m in FY23, driven by the domestic assisted reproductive
services and women's imaging businesses, partially offset by a
decline in earnings from international IVF business. Our domestic
assisted reproductive services and women's imaging business
benefited from solid market share gains and price increases,
partially offset by increases in certain costs including salaries
and wages and supplier costs (largely reflecting the high CPI
environment). In our international IVF business, the Singapore
greenfield clinic was impacted by key doctor availability in 2H23,
which offset positive performances from our other clinics in the
South-East Asia region.
The Underlying Group EBITDA1,2 margin was maintained at 25%,
which was a reasonable outcome given the high inflationary
environment. This demonstrates our ability to balance our
commitment to maintaining access to our services, whilst
addressing cost pressures by adjusting patient prices across
all services and markets.
Monash IVF Group delivered strong cash flow outcomes
during the year, with EBITDA to pre-tax cashflow conversion
of 100%. Capital expenditure during FY23 was $28 million,
which included new IVF clinics opening in Melbourne, Gold
Coast, Penrith and Darwin. Our new Gold Coast day hospital
was commissioned in September 2023, with the Cremorne
(Victoria) day surgery unit progressing towards completion
during 1H24. The finalisation of these sites will further expand
the day surgery unit revenue stream and diversify Group
revenue. The Group expects further capital expenditure at
elevated levels during FY24 due to completion of the day
hospitals and new IVF clinics in Sunshine (Victoria) and
Brisbane (Queensland). We anticipate return to historical
replacement capital expenditure levels beyond FY24 subject
to new strategic growth initiatives.
Monash IVF Group spent $12.7m on business acquisitions in
FY23. The ART Associates QLD acquisition was completed
in late September 2023, delivering strong market share gains
in Queensland in FY23. The PIVET acquisition was completed
in late May 2023 with clinics in Perth and Cairns, resulting in
Monash IVF Group having true national mainland presence.
Despite the major investments we have made in future
growth across our businesses in recent years, our balance
sheet remains in a strong position. Net debt was $31.0m as
at 30 June 2023 and balance sheet capacity remains strong
to fund domestic and South East Asia market growth where
Monash IVF Group is under-represented.
In closing, I would like to thank our People and Clinicians
for their hard work and dedication, and to thank you, our
shareholders, for your continuing support. We are energised
about the journey ahead for Monash IVF Group, as we move
closer to achieving our strategic objectives.
Malik Jainudeen
Chief Financial Officer & Company Secretary
FY23 Profit & Loss Overview
Underlying ($m)
Group Revenue
Underlying EBITDA 1, 2
Underlying EBIT 1, 2
Underlying NPAT 1, 2, 3
Reported ($m)
Reported EBITDA 1
Depreciation & amortisation
Reported EBIT
Net finance costs
Reported Profit before tax
Income tax expense
Reported NPAT 3
FY23 Cash flow Overview
FY23
FY22 % Change
213.6
192.3
11.1%
53.4
38.1
25.5
48.5
(15.4)
33.1
(3.3)
29.8
(7.8)
22.0
48.1
33.4
22.2
43.2
(14.8)
28.4
(2.1)
26.2
(7.7)
18.5
11.0%
14.2%
14.7%
12.3%
(4.1%)
16.5%
(57.1%)
13.7%
(1.3%)
18.9%
($m)
FY23
FY22 % Change
Reported EBITDA
Movement in working capital
Income taxes paid
Net operating cash flow (post tax)
Capital expenditure
Payments for businesses
/minority interest
48.5
(0.0)
(9.4)
39.1
(27.8)
(12.7)
43.2
(1.5)
(9.8)
31.9
(11.8)
(3.4)
12.3%
100.0%
4.1%
22.6%
(135.6%)
(273.5%)
Cash flow from investing activities
(40.5)
(15.2)
(166.4%)
Free Cash flow 4
Dividends paid
Interest on borrowings 5
Payments of lease liabilities
Proceeds of borrowings
Cash flow from financing activities
Net cash flow movement
Closing cash balance
(1.4)
(17.1)
(1.2)
(9.2)
29.0
1.5
0.1
8.0
16.7
16.7
(0.6)
(8.6)
8.4
(17.7)
(0.9)
7.9
(108.4%)
(108.4%)
(100.0%)
(7.0%)
245.2%
108.5%
111.1%
1.3%
10 | Monash IVF Group
Annual Report 2023 | 11
1. Non-IFRS measure. 2. Refer to page 32 for reconciliation of Reported EBITDA, EBIT and NPAT to Underlying EBITDA, EBIT and NPAT. 3. NPAT including minority interest. 4. Free Cash Flow is Net Operating cash flow (post-tax) less Cash Flow from investing activities. 5. Including capitalised bank fees About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
VISION 2026
The most admired
reproductive care
provider in the world.
Best in class fertility solutions, diagnostics,
genetics and pathology.
Our Pillars
Doctor
Partnerships
Patient
Experience
Scientific
Leadership
International
Expansion
People
Engagement
Digital
Transformation
Brand &
Marketing
Clinical
Infrastructure
Our Outcomes
Engagement
Patients, Doctors, People,
Regulators
Local & International
Market Share
Market Leading
Success Rates
Value
Creation
Our Principles
Care
Commitment
Communicate
Collaborate
Create
12 | Monash IVF Group
Annual Report 2023 | 13
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Industry Growth Drivers
Attractive industry drivers
In FY23, demand for Monash IVF Group services and treatments remained well-
above pre-COVID levels. Underpinning this demand are a number of attractive
industry drivers that point to strong future market growth.
Maternal Age
A notable societal trend is
rising maternal birth age,
which increased by two years
in the past 20 years.
As more people delay starting a
family for personal or professional
reasons, there has been a subsequent
increase in demand for assisted
reproductive treatment.
Today the number of babies born through
IVF in Australia is one in 18. At Monash IVF,
the average maternal age is 37.
Government Support
New government financial
support is helping drive
demand by making
reproductive treatments more
accessible and affordable to
more patients.
The NSW Government introduced a
$2000 cash rebate for patients for
treatments dating back to 1 October 2022
and payable from 1 January 2023. This is
on top of a $250 fertility health
assessment rebate.
Nationally, the Federal Government will
provide increased support for testing
and diagnosis of genetic diseases from
November 2023. The Government has
also announced funding for 20 specialised
endometriosis clinics that could help
the early identification of people who will
benefit from fertility treatment.
Greater Fertility Options
With Monash IVF Group’s help,
more people are becoming
aware of their fertility health
and reproductive options,
including freezing their eggs to
preserve their fertility.
As a result, our egg freezing cycles rose
by 14% in FY23.
In FY23, donor cycles remained
strong, driven by solo mums and same
sex couples using donated sperm in
their quest to become parents.
Increasing fertility awareness is also
leading to more people having pre-
conception health testing to assess
their chances of achieving a healthy
pregnancy now or in the future and
to take immediate or early steps to
increase their chances of starting a
family should any red flags be identified.
Genetics
Genomics guides treatment and helps us improve
the health of the next generation.
Advances in genetic screening
have played a crucial role in
improving our pregnancy rate.
In FY23, the number of patients
at Monash IVF Group using
Preimplantation Genetic Testing
(PGT) increased by 11.2%. The
number of complex cases for
patients with a high chance of
having a child with a genetic
condition increased by 29.9%,
reflecting our growing impact in
this space. PGT is used to select
embryos with a low chance of
a genetic condition and a high
chance of implantation for
patients with a wide range of
genetic and fertility concerns.
In FY23, revenue from the sale
of Monash IVF Group's Genetic
Carrier Screening test rose
by 46%.
Launched in December 2021,
the saliva swab can be
taken by any prospective parent
in the comfort of their own home
and is used to identify potential
genetic disorders or
conditions that may be passed
on to their offspring, allowing
people to make informed
pre-conception choices.
14 | Monash IVF Group
Annual Report 2023 | 15
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
4 Year Metrics
Over the past four years, the reproductive healthcare industry has undergone
a significant period of growth and expansion due to increased acceptance of
and demand for fertility services from a wider range of people. Throughout this
time, Monash IVF Group has remained at the forefront of our field and achieved
consistently strong results across numerous key metrics.
No. of Specialists
who joined
MVF Group
No. of
specialists at
MVF Group
Average
NPS score
Employee
Engagement
Culture of
Success
Group clinical
pregnancy rate for
women aged
<43 years
(per embryo transferred)
New Patient
Registrations
Market Share
Key markets:
VIC, NSW, QLD,
SA & NT
Group
Revenue
Underlying 1,2,3
NPAT
Underlying1,2,3
EBITDA
Underlying1,2,3
EBIT
Reported4
NPAT
25
153
71
64%
38.7%
2023
Jan-Mar
8,241
+12%
22.7%
$213.6m
+11.1%
$25.5m
+14.7%
$53.4m
+11%
$38.1m
+14.2%
$22m
+18.9%
7
11
6
130
66
61%
38%
7,376
+4% FY21
21.3%
$192.3m
+4.7% FY21
$22.2m
-4.7% FY21
$48.1m
+0.8% FY21
$33.4m
-5% FY21
$18.5m
-28% FY21
123
121
57
54
61%
37%
7,098
+35% FY20
21.0%
$183.6m
+26.3% FY20
$23.3m
+61.5% FY20
$47.8m
+37.4% FY20
$35.1m
+43.9% FY20
$25.7m
+117.8% FY20
53%
36.4%
5,261
-11% FY19
20.4%
$145.4m
-4.3% FY19
$14.4m
-31.2% FY19
$34.8m
-8% FY19
$24.4m
-25.3 FY19
$11.8m
-40.8% FY19
3
2
0
2
Y
F
2
2
0
2
Y
F
1
2
0
2
Y
F
0
2
0
2
Y
F
16 | Monash IVF Group
Annual Report 2023 | 17
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX1. Non-IFRS measure. 2. Refer to page 32 for reconciliation of Reported EBITDA, EBIT and NPAT to Underlying EBITDA, EBIT and NPAT. 3. NPAT including minority interest. 4. Free Cash Flow is Net Operating cash flow (post-tax) less Cash Flow from investing activities. 5. Including capitalised bank fees About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Doctor
Partnerships
Our focus on building strong partnerships with
highly-credentialled and experienced fertility
specialists has seen Monash IVF Group become the
place of choice to practice over the past four years.
Patient
Experience
Monash IVF Group recognises the importance
of making patients feel nurtured, informed and
empowered throughout their fertility journey.
Doctor engagement continues to be high
with our Doctor Engagement Survey
results showing continued year-on-year
improvement, an outcome from our
focused initiatives.
A key focus for the future is to continue
to attract and partner with new and
experienced fertility specialists with the
right cultural fit, clinical competencies, and
outstanding industry reputations to assist
us deliver the highest quality best-in-class
care and the highest possible success
rates for our patients.
The key focus in the domestic business is
to continue the momentum in recruiting
the very best clinicians in New South Wales
practicing in the world class treatment
facilities as part of our Vision
2026 Strategy.
In FY23, we welcomed a record 25 new
doctors across Australia and South-East
Asia, taking the total number of new
clinicians joining us since FY19 to 61.
Since FY19, there has been a net gain
of 48% in new fertility specialists which
has helped us to achieve our growth and
succession planning objectives.
In FY23, the biggest rise in our doctor
numbers came in Queensland, where
9 specialists joined Monash IVF Group
through the acquisition and integration of
ART Associates Queensland. The positive
contribution of these highly engaged
clinicians to the business has been above
expectations. Cycle numbers have risen by
34% in Queensland in FY23.
Another highlight of FY23 has been our
entry into the Western Australian market,
making us the only fertility provider with
a presence in every mainland capital city.
The completion of our acquisition of PIVET
Medical Centre in May 2023 added 7 new
specialists to Monash IVF Group and has
laid the foundation for future growth in
market share in WA in partnership with our
new Medical Director Dr Tamara Hunter.
We now have 137 clinicians in IVF and
Women’s Ultrasound in Australia and an
additional 16 partnerships with specialists
in Malaysia, Singapore and Indonesia.
•
•
•
•
•
•
Aligned sperm donor processes across
the Group, and in Victoria, removed
waiting times for sperm donors.
Developed a holistic education program
for employers on how to support
employees experiencing infertility.
Implemented a Group Nursing Advisory
Committee and framework to drive
quality improvements and consistency
in the patient experience.
Refined the ultrasound appointment
booking process by implementing a
separate Phone Booking department
across all sites.
Introduced a Nurse Educator role to
enhance consistency of training and
professional development of nurses.
Developed scripting for all critical
points along the patient journey to
ensure patient expectations are
well managed through accurate and
comprehensive communication.
We are committed to providing an exceptional
patient experience across all our clinics, with
an unwavering focus on delivering our high-
quality services through patient-centred care
and empathy-driven interactions.
Implementation of the following initiatives
during the last 12 months underscores our
commitment to nurturing positive patient
experiences and achieving not only clinical
excellence but also the holistic well-being of
our patients.
•
•
•
Developed Best-in-Class Patient
Experience training for all of our patient
care teams focusing on empathy,
trust, engagement, empowerment,
and expectation. This comprehensive
training program recognises that
infertility can be an extremely
emotional experience.
Relocated clinics in Cremorne (Vic),
Albury, Brisbane and Gold Coast
bringing more services together and
providing more people within the
community access to best-in-class care
while improving the overall experience.
Brisbane Integration and colocation of
Monash IVF with Eve Health - this has
given Eve Health and Monash IVF Group
patients a one stop location which
includes their clinician, IVF provider and
Day Hospital.
18 | Monash IVF Group
Annual Report 2023 | 19
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Scientific
Leadership
Monash IVF Group invests in cutting edge
technology and ground-breaking research to ensure
we remain at the forefront of assisted reproductive
technology service provision.
In FY23, the Group Scientific Advisory
Committee comprising of the Scientific
Directors from across Australia and Asia
have focused on providing our patients
with market-leading success rates through
our commitment to scientific excellence,
the trialling and application of new
technologies, as well as innovation via the
translation of research outcomes to
clinical practice.
Key highlights of achievements
undertaken in FY23 include:
•
•
Being awarded the Medical Research
Future Fund Mitochondrial Donation
grant ($15 million) in partnership with
Monash University and Murdoch
Children’s Research Institute to
deliver a pilot clinical trial and notably
to establish Australia’s first and only
mitochondrial donation program.
The successful completion of three
research studies investigating
PIEZO microinjection technology
that demonstrate improved patient
outcomes, followed by the subsequent
clinical rollout of PIEZO technology
across our laboratory network, making
Monash IVF Group the first Australian
IVF provider offering this technology.
• Greater expansion of Embryoscope+
timelapse technology across Monash
IVF Group, with 11 incubators now
installed across the country. In
addition, the introduction of single
step medium across numerous
sites, maximising the utility of the
Embryoscopes, reducing embryo
handling and therefore reducing
the risk associated with the
culture systems.
•
•
Facilitating the recruitment of patients
for a nationwide multi-centre clinical
trial in partnership with Memphasys
(ASX: MEM) and the University of
Newcastle to investigate the efficacy
of a novel sperm separation device
(FELIX) to improve fertilisation results
and embryo quality and viability.
Publication of 38 peer-reviewed
studies in leading fertility journals
and the presentation of numerous
research award-winning abstracts
and invited talks at international and
national forums by Monash IVF Group
clinical and science teams.
Collectively, our scientific achievements
reinforce our emphasis on research
and evidence-based practice to drive
optimal patient care and outcomes.
International
Expansion
Since FY20, Monash IVF Group has expanded
strategically in South-East Asia (SE Asia),
increasing our international footprint from one
clinic in Malaysia to five clinics across Malaysia,
Singapore and Indonesia.
Monash IVF further invested in its brand
regionally, through increased marketing
activities of Monash IVF Singapore, and
Monash IVF – KPJ. Furthermore, Bali
Fertility Centre was co-branded with
Monash IVF.
Our recent investment in clinicians,
science, marketing and nursing in
SE Asia provides a strong platform
to capitalise on the attractive growth
opportunities in the region.
We continue to focus on optimising our
existing clinics and building the pipeline of
potential future acquisitions, partnerships
and greenfield sites.
Our expanded South-East Asia footprint
and consistent focus on clinician
engagement in FY23, provides Monash IVF
Group with a solid international foundation
heading into FY24.
In FY23, Monash IVF Group strengthened
our regional leadership processes by
further integrating embryology and
introducing a Medical Advisory Committee
consisting of leading experts in Singapore,
Malaysia, and Indonesia.
A special event that took place during
the year was the Monash IVF Singapore
Inaugural Reproductive Medicine Update
2023 with participation from across South-
East Asia and beyond. The Symposium
attracted clinical and embryology experts
from world renowned organisations across
Europe, Asia and Australia.
The event was widely attended with over
250 delegates, and specialties included
Fertility, Embryology, Onco-fertility and IVF
nursing. The conference was supported by
numerous leading equipment and
pharmaceutical manufacturers.
20 | Monash IVF Group
Annual Report 2023 | 21
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
People
Engagement
Monash IVF Group has focused on developing a value
proposition that ensures we are able to offer dynamic
workplaces for those driven to make a difference.
Digital
Transformation
The index stands as the definitive national
benchmark on LGBTIQA+ workplace
inclusion and comprises the largest and
only national employee survey designed
to gauge the overall impact of inclusion
initiatives on organisational culture as
well as identifying and non-identifying
employees. The Index drives best practice
in Australia and sets a comparative
benchmark for Australian employers
across all sectors.
Our commitment to our People through
our Learning & Development strategy
continues to be focused on empowering
individual career ownership through
transformational learning opportunities,
developing strong leadership for the future.
In 2023 we concentrated on enabling this
value proposition to further come to life
by enhancing the employee experience
through each stage of the employee life
cycle, creating more effective and efficient
processes, and ultimately differentiate us in
the talent market.
Our People are known for their confidence
and kindness, advancing science and
specialised services, improving care and
enhanced communication. These attributes
are something we are especially proud of.
We are also proud that our engagement
journey continued in FY23 with the highest
recorded engagement score at Monash IVF
Group of 64%, a 3% improvement on FY22
and well above the industry benchmarks.
This continues to demonstrate our
commitment to driving change in
our workplace.
Along with our focus on the employee life
cycle, our commitment to achieving change
through Diversity and Inclusion was also
recognised in FY23 by receiving the Bronze
Employer recognition by AWEI (Australian
Workplace Equality Index).
Our New Patient Management System.
Monash IVF Group clinics are at the
forefront of healthcare transformation, with
plans for the integration of digital consent
forms playing a pivotal role in our new
patient management system.
This innovation replaces paperwork with
streamlined, digital workflows, offering a
more efficient, patient-centric experience in
the complex journey of IVF.
We have partnered with a leading vendor
in digital workflows and signatures to
create advanced, mobile-friendly digital
forms. These forms, equipped with links
to explanatory videos, diagrams, and
information, offer unparalleled clarity over
the treatment process, with the flexibility for
patients to access resources on their own
schedule or whenever required during
their journey.
However, embracing digitisation isn't
without challenges. Security and data
privacy are paramount and we have
invested in robust cybersecurity measures
and strict adherence to health information
privacy regulations.
Monash IVF Group takes every necessary
step to protect our patients' privacy
throughout their entire fertility journey.
With plans to integrate digitisation of overall
workflows and processes, we are shaping
a future where patient interactions are
marked by convenience, understanding
and trust.
This journey isn't just about reshaping the
fertility treatment landscape, it's about
ensuring every patient is empowered in
their unique treatment journey.
"With plans to integrate
digitisation of overall
workflows and
processes, we are
shaping a future where
patient interactions are
marked by convenience,
understanding
and trust."
22 | Monash IVF Group
Annual Report 2023 | 23
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Brand &
Marketing
In FY23, Monash IVF Group continued to expand
on the positive social impact it contributes to the
Australian community by entering into an exciting
partnership with the Australian Athletes Alliance.
Clinical
Infrastructure
Monash IVF Group has undertaken an extensive
clinical infrastructure program to create modern,
state-of-the art facilities in key locations across
Australia and South-East Asia.
Our integrated marketing programs
delivered a robust patient pipeline during
FY23, and resulted in increases in market
share in key markets of 1.4%.
Marketing drivers
of growth
› Brand Differentiation
› Patient Acquisition
› Lifecycle Engagement
› Marketing Effectiveness
Outcomes
1.4% growth in market share
across our key markets
12% growth in new patient
acquisition
4.3% growth in
returning patients
Through this partnership, we are providing
reproductive care, education and support
to existing and former athletes from AFL,
cricket, soccer, basketball, netball, rugby
league and hockey.
We are extremely proud to be able to help
our Australian athletes and provide this
much needed support and care.
During the year, we also continued to
deliver professional education and advice
to thousands of other prospective patients
in the comfort of their home through our
virtual patient webinars and retreats.
FY23 also saw Monash IVF launch its
latest brand campaign - What it Takes,
together. This campaign was a wonderful
opportunity to bring together our real
patients, employees and doctors and
showcase why patients should
choose Monash IVF Group as their
fertility provider.
We also launched our egg freezing
campaign which performed exceptionally
well, resulting in an 14% growth in egg
freezing cycles over the 12 months.
With the help of our specialists and
patients, we also captured 64% of
Australian media mentions in FY23 against
our competitors across TV, radio, print and
online news, and reached a cumulative
audience of 120 million people.
In June, our fertility doctors and other
speciality surgeons moved into our new Gold
Coast facility which is co-located with the
Broadwater Day Hospital.
Stage one of our Brisbane transformation
has been completed with a relocation to
Spring Hill to be co-located with the recently
acquired ART Associates and Brisbane
Day Hospital. This development has
enabled us to integrate ART Associates’
significant volumes.
Internationally in FY23, we successfully
launched our new Bali Fertility Centre in the
Kasi Ibu Hospital.
Our focus for FY24 will be to complete Stages
2 and 3 of the Brisbane transformation, open
our Sunshine IVF unit in Victoria and renovate
our recently acquired Perth clinic. We will
continue to initiate projects in line with our
Vision 2026 strategy, prioritising those with a
significant return on investment.
From warm and welcoming reception areas
to cutting-edge laboratories and state-of-the-
art day hospital facilities, we have carefully
designed and crafted these sites to ensure
we remain at the forefront of
reproductive healthcare.
Our flagship Sydney CBD clinic, which
opened in November 2020, set high
standards and the positive feedback we
have received from patients and doctors alike
gave us the confidence to move forward with
similar projects in Melbourne, Gold Coast
and Brisbane.
In September 2022 we opened our new full-
service clinic in Penrith, further consolidating
Monash IVF Group as the leading provider of
fertility services in Greater Western Sydney.
In March, we opened the doors of our flagship
Cremorne facility in central Melbourne,
bringing together personnel from multiple
sites and creating a collaborative workplace
for our shared services staff, including
our corporate, nursing, patient services,
ultrasound, counselling and donor teams.
By the end of 2023, this location will be
transformed into a full-service reproductive
healthcare facility, with the opening of a
world-class laboratory and
on-site day surgery unit.
24 | Monash IVF Group
Annual Report 2023 | 25
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Board of Directors
Mr Richard Davis
Mr Josef Czyzewski
Mr Neil Broekhuizen
Ms Catherine West
Independent Chairman
Independent
Non-executive Director
Independent
Non-executive Director
Independent
Non-executive Director
Mr. Richard Davis joined the Group
in June 2014 and is currently
serving as a non-executive
director of ASX listed companies,
InvoCare Limited and Australian
Vintage Limited (Chairman).
Richard worked for InvoCare
for 20 years until 2008. For the
majority of that time he held the
position of CEO and managed the
growth of that business through
a number of ownership changes
and over 20 acquisitions, including
offshore in Singapore.
Prior to InvoCare Limited, Richard
worked as an accounting partner
of Bird Cameron. Richard holds a
Bachelor of Economics from the
University of Sydney.
Mr. Josef Czyzewski joined the
Group in June 2014 and has over
30 years experience in senior
finance positions and significant
experience in the health industry.
Josef has held the positions of
CFO at Healthscope Limited,
and more recently CFO/
General Manager Strategy and
Development at Spotless Group
Limited following its takeover by
private equity interests in 2012.
Prior to that time, Josef had held
various senior finance positions
with BHP Billiton including
VP Finance and Corporate
Treasurer. He holds a Bachelor
of Commerce from the University
of Newcastle and is a Graduate
Member of the Australian Institute
of Company Directors.
Mr. Neil Broekhuizen is the Joint
Chief Executive Officer
of Ironbridge.
Neil has over 30 years experience
in the finance industry, including
28 years in private equity with
Investcorp and Bridgepoint in
Europe and Ironbridge in Australia.
He has sat on the Ironbridge
Investment Committee
since inception.
Neil is qualified as a Chartered
Accountant and holds a BSC
(Eng) Honours degree from
Imperial College, University
of London.
Ms Catherine West was appointed
Non-executive Director to Monash
IVF Group on 8 September 2020.
She is an experienced ASX listed
non-executive director and has
over 25 years of legal, business
affairs and strategy experience
in customer focused businesses
in the media, entertainment,
telecommunications and medical
sectors in Australia, the UK
and Europe.
Catherine is a non-executive
director of ASX listed Nine
Entertainment and Peter Warren
Automotive Group. In addition, she
is a director of the Sydney Breast
Cancer Foundation Limited, a
director of the National Institute of
Dramatic Art (NIDA), a director of
the NIDA Foundation and a Chair of
the Board of Governors of Wenona
School. Catherine was also on the
Board of ASX listed Endeavour
Group until April 2021.
Catherine holds a Bachelor of
Laws (Hons) and a Bachelor of
Economics from the University of
Sydney. She is also a Graduate
Member of the AICD.
Dr Richard Henshaw
Executive Director
Dr Richard Henshaw MD
FRANZCOG FRCOG has
practiced in the field of
reproductive medicine since 1995.
Richard works as a Fertility
Specialist for the Group.
Richard has served on many
national bodies, including
RANZCOG Council, the IVF
Medical Directors Group of
Australia and New Zealand, and
the Reproductive Technology
Accreditation Committee.
Ms Zita Peach
Independent
Non-executive Director
Ms Zita Peach has more
than 25 years of commercial
experience in the pharmaceutical,
biotechnology, medical devices
and health services industries,
and has worked for major industry
players such as CSL Limited,
Fresenius Kabi and Merck Sharp &
Dohme, the Australian subsidiary
of Merck Inc.
Ms Peach is Chair of Pacific
Smiles Group Limited and Non-
Executive Director of two private
equities – Nucleus Network and
Icon Group. Zita is also a member
of the Hudson Institute of Medical
Research Board.
Ms Peach is a Fellow of the
Australian Institute of Company
Directors and a Fellow of the
Australian Marketing Institute.
Mr Michael Knaap
Managing Director
& CEO
Mr Michael Knaap was appointed to
the role of Chief Executive Officer
and Managing Director for Monash
IVF Group on 15 April 2019.
Following his tenure as MVF
Group’s Chief Financial Officer and
Company Secretary since August
2015, Michael was appointed to
Interim CEO in October 2018.
Mr Knaap has nearly 30 years
experience in executive positions
with a strong financial, operational,
strategic and leadership
background in Healthcare and
FMCG industries. Prior to joining
MVF Group, Michael was with
Patties Foods Limited where
he held a number of executive
positions over six years, including
the role of Chief Financial Officer
and Company Secretary.
He holds a Bachelor of Accounting
from Monash University and is a
Certified Practicing Accountant.
26 | Monash IVF Group
Annual Report 2023 | 27
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Management Team
Fiona Allen
Chief Marketing Officer
Sarah Bollom
Regional Donor
& Surrogacy Manager
Nicolette Curtis
Regional Manager
VIC & NSW
Denise Donati
Fertility Solutions
Queensland Manager
Claire Ellem
Regional Manager
QLD
Tedd Fuell
Chief Governance &
Risk Officer
Hamish Hamilton
Chief Operating
Officer
Malik Jainudeen
Chief Financial Officer
& Company Secretary
Sloane Karlson
General Manager
Projects
Jan Lagerwij
Asia Managing
Director
May Q, Loke
Centre Manager
KL Fertility Centre
Peggy North
Chief People & Culture
Officer
Thierry Panthier
Chief Information
Officer
Rebecca Redden
Regional Manager
Ultrasound & SA/NT
Prof Luk Rombauts
Group Medical
Director
Kate Robertson
Regional Manager
WA
Prof Deirdre Zander-Fox
Chief Scientific
Officer
28 | Monash IVF Group
Annual Report 2023 | 29
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Directors’ Report
Directors’ Report
for the year ended 30 June 2023
for the year ended 30 June 2023
The Directors present their report together with the consolidated financial report of Monash IVF Group
Limited ('the Group'), being the Company (Monash IVF Group Limited), its subsidiaries, and the Group's
interest in associated entities as at and for the year ended 30 June 2023, and the auditor's report
thereon.
Directors
The Directors of the Company at any time during or since the end of the year are:
Mr Richard Davis
Mr Josef Czyzewski
Ms Catherine West
Ms Zita Peach
Mr Neil Broekhuizen
Dr Richard Henshaw
Mr Michael Knaap
Principal activity
The Group is a leader in the field of human fertility services and is one of the leading providers of
Assisted Reproductive Services (ARS) which is the most significant component of fertility care in Australia
and Malaysia. ARS encompass a range of techniques used to assist patients experiencing infertility to
achieve a clinical pregnancy. In addition, the Group is a significant provider of specialised women’s
imaging services.
Operational and Financial Review
The Group reported Underlying NPAT of $25.5m(1)(2)(6), as compared to $22.2m in pcp.
$m
Group Revenue
Underlying EBITDA(1)(2)
Underlying NPAT(1)(2)(6)
Reported EBITDA(1)(2)
Reported EBIT
Reported NPAT(6)
EPS (cents)
DPS (cents)
Net Debt (m)(3)
Net Debt to Equity ratio(4)
Return on Equity (pa.)(5)
FY2023
FY2022
% Change
11.1%
11.0%
14.7%
12.3%
16.5%
18.9%
19.1%
-%
$213.6
$53.4
$25.5
$48.5
$33.1
$22.0
5.6
4.4
30 June 23
$31.0
11.3%
9.3%
$192.3
$48.1
$22.2
$43.2
$28.4
$18.5
4.7
4.4
30 June 22
$2.1
0.8%
8.2%
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Group Underlying Results (continued)
Domestic clinical pregnancy rates per embryo transfer in CY2022 increased to 38.0% from 37.0% in
CY2021 and is 5.4% higher than CY2018. Pregnancy rates increased by 38.7% in Q1CY23 compared
to pcp. Improvements to clinical pregnancy outcomes are driven by highly trained and skilled scientific
workforces across our vast number of clinics, upgrades to technology and equipment and standardisation
of processes and protocols across the Network.
The Ultrasound business returned to scan growth during FY23 with Sydney Ultrasound for Women
growing scan volumes by 8.5% compared to pcp whilst Monash Ultrasound for Women returned to
growth in 2H23, delivering 2H23 growth of 28% compared to pcp.
The Group progressed its new clinical infrastructure program and upgrades including completion of
relocated IVF premises in inner Melbourne (Cremorne), Darwin, Penrith and Gold Coast. New
complementary day hospital operations in Gold Coast and Cremorne will be available and
commissioned during 1H24 providing the Group with higher and more diversified day hospital revenue
streams including servicing clinicians performing ophthalmology, dentistry and gynaecology procedures,
in addition to IVF.
The new Singapore IVF clinic commenced in June 2022 and continues to ramp up to profitability.
Anticipated activity in 2H23 was delayed due to key doctor availability however this is anticipated to
be resolved during 1H24 and generation of profitability in 1H24 is anticipated. The new Bali IVF clinic
performed its first procedure in January 2023 and has largely reached breakeven in Q4FY23. The
existing Kuala Lumpur IVF clinic has largely recovered post the height of the Pandemic, generating
stimulated cycle growth of 3.1% compared to pcp but was impacted by inflationary and supplier
pressures, offsetting the benefit from higher activity. The existing Johor Bahru IVF clinic generated growth
in both revenue and EBITDA(1) during FY23 and is well placed to continue growth in FY24.
Net Finance Costs increased to $3.3m, $1.2m higher than pcp which included $0.4m impact for non-cash
interest on Lease Liabilities (under IFRS16) and $0.8m increase from a combination of a higher BBSY
rate (+3%) and average borrowings ($39m at 30 June 23) during the period.
Underlying NPAT(1)(3) was $25.5m whilst Reported NPAT was $22.0m. Reported NPAT includes certain
non-regular items relating to acquisition costs, new premise and commissioning costs. Refer to page 6
for further information.
Segment analysis
$m
Revenue
Underlying EBIT(1)(2)
Underlying NPAT(1)(2)
Reported NPAT
Australia
Australia
International
FY2023
200.8
36.2
24.5
21.1
FY2022 % change
10.3%
18.3%
21.3%
24.1%
182.1
30.6
20.2
17.0
FY2023
12.8
1.9
1.0
0.9
FY2022 % change
25.5%
(32.1%)
(50.0%)
(40.0%)
10.2
2.8
2.0
1.5
(1)
(2)
(3)
(4)
(5)
(6)
EBITDA and Underlying NPAT are non-IFRS measures
Refer to earnings reconciliation on page 6 for Underlying vs Reported EBITDA, EBIT and NPAT. FY22 included non-regular items that increased Adjusted EBITDA,
EBIT and NPAT by $5.0m pre-tax
Debt less cash balances
Net debt to equity is net debt divided by equity
Return on equity is Underlying NPAT for the twelve-month period to 30 June 2023 divided by closing equity
Attributable to ordinary shareholders and non-controlling interest
page 32
3
Australia revenue increased by $18.7m or 10.3% to $200.8m due to the following:
•
$13.8m Domestic ARS revenue growth ($5.4m from patient price increases across all domestic
markets and $10.6m growth from market share gains in QLD, SA and WA (including
acquisitions), partially offset by exiting the Tasmanian IVF market in October 2022);
30 | Monash IVF Group
5
Annual Report 2023 | 31
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Statement of Financial Position and Capital Metrics
Balance Sheet $m
Cash and cash equivalents
Other current assets
Current lease liabilities
Other Current liabilities
Net working capital
Borrowings
Goodwill & Intangibles
Right of use assets
Lease liabilities
Plant & Equipment
Other liabilities
Net assets
Capital Metrics
Net Debt ($m)(1)
Leverage Ratio (Net Debt / EBITDA(2))
Interest Cover (EBITDA(2) / Interest)
Net Debt to Equity Ratio(3)
Return on Equity(4)
Return on Assets(5)
30 June 23
30 June 22
% change
8.0
21.9
(6.3)
(40.2)
(16.6)
(38.9)
280.4
59.0
(54.8)
50.4
(4.4)
275.1
7.9
17.7
(7.1)
(31.0)
(12.5)
(9.8)
258.9
64.7
(60.3)
30.4
(1.5)
269.9
30 June 23
30 June 22
31.0
0.70x
42.6x
11.3%
9.3%
6.0%
2.1
0.05x
113.2x
0.8%
8.2%
5.8%
1.3%
23.7%
11.3%
(29.7%)
(32.8%)
(296.9%)
8.3%
(8.8%)
(9.1%)
65.8%
(193.3%)
1.9%
+/-
28.9
0.65x
(70.6x)
10.5%
1.1%
0.2%
Significant headroom remains available in key banking covenants. The key Net Leverage Ratio is at
0.70x and well within the 3.5x covenant requirement. The Interest Cover Ratio is at 42.6x and well
above the 3.0x covenant requirement.
Key capital metrics increased with Return on Equity increasing from 8.2% to 9.3% and Return on Assets
increasing from 5.8% to 6.0%.
(1)
(2)
(3)
(4)
(5)
Net debt is debt less cash balances (excluding capitalised bank fees)
EBITDA is based on normalized EBITDA excluding AASB16 lease impact for covenant purposes as defined in the Syndicated Debt Facility Agreement. EBITDA is not an IFRS measure
Net debt divided by equity at the balance date
NPAT for the previous 12-month period divided by closing equity at the balance date
NPAT for the previous 12-month period divided by closing assets at the balance date
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Segment analysis (continued)
•
•
$2.0m Ultrasound revenue growth due to 4.9% growth in scan volumes and 3% price increase
across all scan types. Scan activity grew by 8.5% in Sydney and 5.1% in Melbourne, partly
offset by Gold Coast which was closed during 2H23 and
$3.0m Day Surgery & Other revenue growth including volume growth in Sydney CBD DSU,
volume contribution and genetics income.
The Australia CGU achieved FY23 Underlying EBIT of $36.2m. The domestic IVF business was solid in
growing EBIT and Margin% despite a challenging macro environment.
International
The International segment comprises of the existing Kuala Lumpur and Johor Bahru clinics and Bali and
Singapore clinics which opened in January 2023 and June 2022 respectively. International Revenue
increased by $2.6m or 25.5% to $12.8m and stimulated cycles increased by 19.9% compared to pcp
following commencement and ramp up of Singapore operations and volume growth in KL and Johor
Bahru. Underlying EBIT declined by $0.9m or 32.1% to $1.9m compared to pcp and Underlying NPAT
declined by $1.0m or 50.0% to $1.0m compared to pcp. NPAT was impacted by commencement of new
greenfield clinics in Singapore and Bali.
Earnings reconciliation
The table below provides a reconciliation of FY2023 Underlying EBIT and NPAT to the reported statutory
metrics:
$m
Reported Statutory
Acquisition transaction costs
Commissioning costs
Acquisition Earn-out fair value adjustment
Underlying (1)
(1)
Non-IFRS measures
EBITDA
EBIT
NPAT
48.5
1.9
3.1
-
53.4
33.1
1.9
3.1
-
38.1
22.0
1.3
2.2
-
25.5
FY22
NPAT
18.5
1.5
1.8
0.4
22.2
A total of $5.0m in pre-tax items are included in the reconciliation of Reported Statutory to Underlying,
which fall under three main categories.
$1.9m relates to pre-tax acquisition related transaction costs including completion activities for the PIVET
Medical Centre and ART Associates Queensland acquisitions and stamp duty provision for the Pivet
acquisition;
$3.1m relates to pre-tax commissioning costs for new fertility clinics and day hospitals in Melbourne,
Penrith, Gold Coast, Darwin and Bali. These costs include lease expenditure under IFRS 16 lease
accounting for the specific premises;
FY22 included non-regular items that increased Reported EBITDA, EBIT and NPAT by $5.0m pre-tax and
$3.5m post-tax.
6
32 | Monash IVF Group
7
Annual Report 2023 | 33
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Statement of Cash Flows
Cash Flows $m
EBITDA(1)
Movement in working capital
Income taxes paid
Net operating cash flows (post-tax)
Capital expenditure
Payments for businesses
Cash flows used in investing activities
Free Cash flow(1)
Dividends paid
Interest on borrowings
Payments of lease liabilities
Proceeds of borrowings
Cash flows used in financing activities
Net cash flow movement
Closing cash balance
(1)
EBITDA and Free Cash Flow are non-IFRS measures.
FY2023
48.5
0.0
(9.4)
39.1
(27.8)
(12.7)
(40.5)
(1.4)
(17.1)
(1.2)
(9.2)
29.0
1.5
0.1
8.0
FY2022
43.2
(1.5)
(9.8)
31.9
(11.8)
(3.4)
(15.2)
16.7
(16.8)
(0.6)
(8.6)
8.4
(17.7)
(0.9)
7.9
Change %
12.3%
100.0%
4.1%
22.6%
(135.6%)
(273.5%)
(166.4%)
(108.4%)
(1.8%)
(100.0%)
(7.0%)
245.2%
108.5%
111.1%
1.3%
•
•
•
•
•
•
•
Pre-tax conversion of EBITDA to operating cash flow was 100%, compared to 97% in the prior
comparative period;
$27.8m capital expenditure including new fertility clinics (Cremorne in VIC, Gold Coast and
Brisbane WIP, Penrith, Bali and Darwin completed), IT infrastructure including cyber security
assets and medical equipment;
$12.7m payments for business includes $3.9m for up-front cash consideration of ART Associates
Qld, $7m payment for Pivet acquisition, $0.4m payment for Fertility Solutions contingent
consideration relating to FY22 and $1.3m payments for non-recurring acquisition costs
(completion activities for ART Associates QLD and PIVET including legal and accreditation costs);
Interest on borrowings increased by $0.6m due to higher average borrowings compared to pcp
and increases in the BBSY during F23;
$29m debt drawdown primarily for committed infrastructure projects and acquisition payments;
Payment of lease liabilities increased by $0.6m driven primarily by rental payments for new
completed IVF clinics (Penrith, Darwin and Singapore) and rental payments for yet to be
completed clinics (Cremorne DSU (VIC) and Gold Coast IVF & DSU).
$17.1m dividend payments comprised of the final FY22 fully franked dividend and the interim
FY23 fully franked dividend.
Dividends
On 22 August 2023, a fully franked final FY2023 dividend of 2.2 cents per share was declared. The
record date for the dividend is 8 September 2023 and the payment date for the dividend is 11 October
2023.
Commitments & Contingencies
As announced to the ASX on 23 December 2020, Monash IVF Group became aware that it and certain
number of its subsidiaries have been named as defendants in proceedings filed in the Supreme Court of
Victoria in relation to, or in connection with, the Group’s non-invasive pre-implantation genetic screening
technology (Ni-PGT or cell-free PGT-A). The proceedings filed makes a series of allegations against
8
34 | Monash IVF Group
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Commitments & Contingencies (continued)
Monash IVF Group in relation to the Ni-PGT testing including that those patients who had embryos
classified as aneuploid as a result of Ni-PGT testing may have had embryos destroyed or did not
proceed to embryo transfer. Ni-PGT testing was suspended in October 2020. As announced to the ASX
on 21 August 2023, an amended statement of claim was filed in the Supreme Court of Victoria which,
amongst other things, seeks aggravated damages and exemplary damages from the Group. The Group
filed its initial defense on 19 August 2022 in accordance with the Court’s directions and expects to file
its defense for the amended statement of claim in the coming months. The discovery process is continuing
and the Group has notified its insurers of the claim noting the cost of Monash IVF’s defense of the Class
Action are currently funded by its insurer. The claim does not specify an amount of damages and it is not
currently possible to determine the ultimate impact of this claim, if any, on the Group. The aggravated
damages and exemplary damages claim, and the costs of defending that, are uninsured. Legal costs
and damages, if any, in excess of insurance proceeds will be funded by Monash IVF.
Outlook
We continue to believe and are optimistic that there is a fundamental shift in the Community and the
mindset of our patient cohort with greater focus on family, health and wellbeing resulting in re-direction
of priorities towards family extension and creation. This was highly evident during the Pandemic whereby
FY2023 Stimulated Cycle Industry(2)(3) activity was higher than FY2019 by 22.3%. Based on Monash
IVF’s new patient registration pipeline going into FY24, we are confident that current Industry activity is
sustainable and will continue to grow in FY24. Whilst macroeconomic conditions in Australia including cost
of living and monetary policy is impacting affordability of certain services and goods, it is not currently
impacting Monash IVF new patient registrations (NPR) to date, with NPRs up strongly on prior year
between January and July 2023.
The Group is confident revenue and underlying NPAT(1) will grow in FY24 noting the following:
•
Full Year contribution from ART Associates QLD No.2 Pty Ltd and PIVET Medical Centre
acquisitions;
• Commencement of new fertility clinics and day hospital operations in Cremorne (VIC) and Gold
Coast (QLD) during 1H24, in addition to relocation of existing IVF clinics in Sunshine (VIC);
• Conversion of strong new patient registrations generated in FY23;
• Domestic IVF and Ultrasound patient pricing will increase by 5%-8% during 1H24 across all
State based markets which is anticipated to offset cost base increases;
• New fertility specialists attracted in FY23 will drive further volume growth in FY2024 and the
Company will continue to focus on recruitment of suitable fertility specialists;
• Capitalising on growth opportunity in Reproductive Genetic Screening (RGS);
• Continued optimisation of Ultrasound operations, particularly in Melbourne, following operating
•
challenges during the Pandemic;
Further progress in South East Asia growth strategy including ramp up of activity in the Singapore
and Bali fertility clinics.
(1) Underlying excludes certain non-regular items relating to acquisition costs, new clinic commissioning costs and AASB3 fair value adjustment
(2) QLD,NSW,VIC,SA,NT Markets
(3)
13200/1 MBS items
9
Annual Report 2023 | 35
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Business Strategies and Prospects for Future Financial Years
Business Strategies and Prospects for Future Financial Years (continued)
Monash IVF Group’s mission is to help bring life to the World by providing Best-in-Class fertility solutions
to all, including diagnostics, genetics and pathology. This is supported by our Vision to be the most
admired fertility solutions provider in the world by Patients, Doctors, our People and other industry
stakeholders. Our Mission and Vision will be delivered through Our Pillars as illustrated below:
Our Pillars will drive achievement of Our Outcomes to Engage with our Key Stakeholders, continually
improve our Patient outcomes, grow our market share and create value for our Key Stakeholders
including Patients, Doctors, People and Shareholders.
Business risks
The Monash IVF Group continually considers the benefits of implementing a risk management framework,
all of which contributes to the increased likelihood that the Group will be able to achieve its
organisational objectives. Accordingly, the Group has a risk management framework and has
implemented systematic processes for:
Better identification of opportunities and threats;
Prevention of potential risks from being realised;
Reduction of the element of chance;
Increased accountability and transparency for decisions;
•
•
•
•
• More effective allocation and use of resources;
•
•
•
•
•
Improved incident management and reduction in loss and the cost of risk;
Improved stakeholder confidence and trust;
Improved compliance with relevant legislation and accreditation processes;
Proactive rather than reactive management;
Enhanced governance.
Our Pillars are defined as follows below:
Patient experience - We are committed to providing best in class clinical care across the fertility and
pregnancy journey, delivering through a patient experience that is empathetic, empowering and
personalised.
Doctor partnership - We will develop mutually beneficial long term partnerships with our Doctors that
benefits our patients through excellence in clinical care and to drive growth in our Doctors’ businesses.
Scientific leadership - Our focus in world-class research and science will deliver market leading success
rates, innovative services and attract partnership opportunities.
Clinical infrastructure – Provide high quality, fit-for-purpose infrastructure to support our best in class
offering through investing in new and existing facilities and businesses.
People engagement - Through passion, pride and capability our People are leading the way in helping
bring life to the world.
Brand & marketing – Our brand and marketing conveys our leadership in reproductive health and
develops strong brand salience through progressive, empathetic and empowering engagement with the
Community, Patients and our People.
Digital transformation – Investing in next generation technology, platforms and systems to enhance
interactions with our Patients, Doctors and People. Grow and diversify revenue streams through enhanced
digital capabilities and partnerships.
International expansion - Export our expertise in fertility services to Asia and beyond through effective
partnerships.
The risk management framework together with the risk assessments and mitigation strategies are
regularly reviewed both individually and collectively by the Executive Team, the Audit and Risk
Committee and the Board. A simple prioritisation system has been adopted to scale the relative
importance of all the identified risks. From review of the Group’s key business, operational and financial
risks, processes are in-place to reduce the inherent nature of these risks to an acceptable and
manageable level. This includes high inherent risk presented by the COVID-19 Pandemic and is a key
priority when managing risk. The Group considers the below as important risks that require continued
management to ensure the Group meets its objectives.
Relationships with People in key roles, including clinicians
The relationships between Monash IVF Group, its People and Clinicians are key to our recruitment and
retention strategies, ability to grow the businesses and replacement of retiring clinicians. The loss or
disengagement of Clinicians or inability to attract new Clinicians to the organisation would likely impact
the revenue and profitability of the organisation.
There are similar risks to the organisation relating to the departure or disengagement of the Executive
and Leadership Teams and People in key roles, defined by regulatory requirements. Comprehensive
training and development programs, competitive remuneration frameworks, commitment to patient
centred care and opportunities to participate in world class research activities all contribute to attracting
and retaining the very best talent in the Industry.
Change in Government funding arrangements for Assisted Reproductive Services
There is a risk that the Commonwealth Government will change the funding (including levels, conditions
or eligibility requirements) it provides for Assisted Reproductive Services (ARS). Patients receive partial
re-imbursement for ARS treatment through Commonwealth Government Programs, including the
Medicare Benefit Schedule (MBS) and Extended Medicare Safety Net (EMSN). If the level of re-
36 | Monash IVF Group
10
11
Annual Report 2023 | 37
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Change in Government funding arrangements for Assisted Reproductive Services (continued)
imbursement were to be reduced or capped, Patients would face higher out-of-pocket expenses for ARS
potentially reducing the demand for services provided by the Group. The Group is not aware of any
changes to Commonwealth Government funding for ARS in the short to medium term.
Risk of increased competition
In each of the markets the Group operates in, there is a risk that:
•
Existing competitors may undertake aggressive marketing and Patient acquisition campaigns,
product innovation or price discounting;
• New market entrants may participate in the Sector and gain market share;
•
Further growth in low cost offerings provided by competitors may reduce the Group’s market
share;
• An increase in publicly provided ARS services may reduce the Group’s market share.
The Group continues to strategically position its ARS service as a specialised premium offering as a point
of differentiation against low cost competitors. In addition, the Group has previously partnered with
State based governments in the provision of publicly provided ARS services and will look to continue to
partner with governments to provide greater access to ARS services to the community.
Occupational Health and Safety
Monash IVF employees are at risk of workplace accidents and incidents. In the event that a Monash IVF
employee is injured in the course of their employment, Monash IVF may be liable for penalties or
damages. This has the potential to harm both the reputation and financial performance of Monash IVF.
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Information on Directors
Director
Mr Richard Davis
Independent Chairman
Experience
Mr. Richard Davis joined the Group in June 2014 and is
currently serving as a non-executive director of ASX listed
companies, InvoCare Limited and Australian Vintage Limited
(Chairman).
Richard worked for InvoCare for 20 years until 2008. For the
majority of that time he held the position of CEO and managed
the growth of that business through a number of ownership
changes and over 20 acquisitions, including offshore in
Singapore.
Prior to InvoCare Limited, Richard worked as an accounting
partner of Bird Cameron. Richard holds a Bachelor of Economics
from the University of Sydney.
Mr Josef Czyzewski
Independent
Non-executive Director
Mr. Josef Czyzewski joined the Group in June 2014 and has
over 30 years experience in senior finance positions and
significant experience in the health industry.
Mr Neil Broekhuizen
Independent
Non-executive Director
Josef has held the positions of CFO at Healthscope Limited, and
recently CFO/General Manager Strategy and
more
Development at Spotless Group Limited following its takeover
by private equity interests in 2012.
Prior to that time, Josef had held various senior finance positions
with BHP Billiton including VP Finance and Corporate Treasurer.
He holds a Bachelor of Commerce from the University of
Newcastle and is a Graduate Member of the Australian Institute
of Company Directors.
Mr. Neil Broekhuizen is the Joint Chief Executive Officer of
Ironbridge.
Neil has over 30 years experience in the finance industry,
including 28 years in private equity with Investcorp and
Bridgepoint in Europe and Ironbridge in Australia. He has sat
on the Ironbridge Investment Committee since inception.
Neil is qualified as a Chartered Accountant and holds a BSC
(Eng) Honours degree from Imperial College, University of
London.
38 | Monash IVF Group
12
13
Annual Report 2023 | 39
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Directors’ Report continued
Directors’ Report
for the year ended 30 June 2023
for the year ended 30 June 2023
Monash IVF Group Limited
Directors’ Report continued
Directors’ Report
for the year ended 30 June 2023
for the year ended 30 June 2023
Director
Ms Catherine West
Independent
Non-executive Director
Ms Zita Peach
Independent
Non-executive Director
Experience
Ms Catherine West was appointed Non-executive Director to
Monash IVF Group on 8 September 2020. She is an
experienced ASX listed non-executive director and has over 25
years of legal, business affairs and strategy experience in
customer focused businesses in the media, entertainment,
telecommunications and medical sectors in Australia, the UK and
Europe.
is Chair of
Catherine is a non-executive director of ASX listed Nine
the People and
Entertainment where she
Remuneration Committee and a member of the Audit and Risk
Committee. Catherine is also a non-executive director of Peter
Warren Automotive Group where she is also Chair of the
People and Remuneration Committee and a member of the
Audit and Risk Committee. In addition, she is a director of the
Sydney Breast Cancer Foundation Limited, a director of the
NIDA Foundation, the National Institute of Dramatic Art and a
Chair of the Board of Governors of Wenona School. She was
previously on the board of Southern Phone, a regional
telecommunications company, before its successful sale to AGL.
Catherine was also on the Board of ASX listed Endeavour
Group until April 2021. Catherine is also a consultant to the
healthcare sector and to media companies internationally.
Catherine holds a Bachelor of Laws (Hons) and a Bachelor of
Economics from the University of Sydney. She is also a
Graduate Member of the Australian Institute of Company
Directors.
Ms Zita Peach has more than 25 years of commercial
experience in the pharmaceutical, biotechnology, medical
devices and health services industries, and has worked for major
industry players such as CSL Limited and Merck Sharp & Dohme,
the Australian subsidiary of Merck Inc.
Zita’s most recent executive position is Managing Director for
Australia and New Zealand and Executive Vice President, South
Asia Pacific for Fresenius Kabi, a leading provider of
pharmaceutical products and medical devices to hospitals.
Previously, Zita was Vice President, Business Development, for
CSL Limited, a position she held for ten years.
Ms Peach is Chair of Pacific Smiles Group Limited (ASX listed)
and Non-Executive Director of two private company boards,
Icon Group Pty Ltd and Nucleus Network Pty Ltd. Zita is also a
member of the Hudson Institute of Medical Research Board.
Ms Peach is a Fellow of the Australian Institute of Company
Directors and a Fellow of the Australian Marketing Institute.
40 | Monash IVF Group
14
Director
Dr Richard Henshaw
Executive Director
Experience
Dr Richard Henshaw MD FRANZCOG FRCOG has practiced in
the field of reproductive medicine since 1995.
Richard works as a Fertility Specialist for the Group.
Richard has served on many national bodies, including
RANZCOG Council, the IVF Medical Directors Group of
Australia and New Zealand, and the Reproductive Technology
Accreditation Committee.
Mr Michael Knaap
Chief Executive Officer
Managing Director
Mr Michael Knaap was appointed to the role of Chief Executive
Officer and Managing Director for Monash IVF Group on 15
April 2019.
Following his tenure as MVF Group’s Chief Financial Officer and
Company Secretary since August 2015, Michael was appointed
to Interim CEO in October 2018.
Mr Knaap has nearly 30 years experience in executive
positions with a strong financial, operational, strategic and
leadership background in Healthcare and FMCG industries.
Prior to joining MVF Group, Michael was with Patties Foods
Limited where he held a number of executive positions over six
years, including the role of Chief Financial Officer and
Company Secretary.
He holds a Bachelor of Accounting from Monash University and
is a Certified Practicing Accountant.
Company Secretary
Mr Malik Jainudeen was appointed to the role of Monash IVF Group Chief Financial Officer and
Company Secretary on 15 April 2019.
Malik joined Monash IVF Group in 2014 as a senior finance leader and has continued to progress his
career with Monash IVF Group. Malik has more than 19 years experience in the finance sector including
10 years at KPMG as a Manager in Audit and Assurance where his client portfolio included ASX listed
organisations Origin Energy Limited, AusNet Services and Dulux Group Limited. Malik was also the
External Audit Manager for the Monash IVF Group for 6 years prior to its listing on the ASX in 2014.
Director Meetings
The number of directors’ meetings and number of meetings attended by each of the directors of the
Company during the financial year are:
Member
Mr Richard Davis (Chair)
Mr Josef Czyzewski
Ms Catherine West
Ms Zita Peach
Mr Neil Broekhuizen
Dr Richard Henshaw
Mr Michael Knaap
Attended
16
16
16
15
15
16
16
Eligible to Attend
16
16
16
16
16
16
16
15
Annual Report 2023 | 41
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Committee meetings
Member
Mr Richard Davis (Chair)
Mr Josef Czyzewski
Ms Catherine West
Ms Zita Peach
Mr Neil Broekhuizen
ARC
REM
Attended
4
4
-
-
4
Held
4
4
-
-
4
Attended
4
4
4
4
-
Held
4
4
4
4
-
Matters subsequent to the end of the financial year
On 22 August 2023, a fully franked dividend of 2.2 cents per share was declared. The record date for
the dividend is 8 September 2023 and the payment date for the dividend is 11 October 2023.
Refer to the Commitments and Contingencies section on a previous page for developments in contingent
liabilities arising after the reporting date.
Except as disclosed above, there has not arisen in the interval between the end of the financial year and
the date of this report any item, transaction or event of a material or unusual nature likely, in the opinion
of the directors of the Company, to affect significantly the operations of the Group, the results of those
operations, or the state of affairs of the Group, in future financial periods.
Environmental, Social and Governance
Global challenges, such as climate risk, increased regulatory pressures, social and demographic shifts
and privacy and data security concerns, represents new or increasing risks for organizations. Through
our existing corporate governance policies, our Strategic Framework, Quality Policy and Code of
Conduct, Monash IVF Group has demonstrated a strong commitment to responsible and ethical conduct.
In exploring Monash IVF’s sustainability actions and steps forward, the Company has considered various
ESG reporting frameworks available and the UN Sustainability Development Goals. The following page
provides a summary on a page on the Group’s Sustainability Strategy which will form the basis of
Monash IVF’s inaugural Group Sustainability Report expected to be released in October 2023.
During FY2023, the Company established an ESG Committee, with Monash IVF Group Board
representation and key stakeholders within the Group to ensure the implementation of a proposed plan,
embedded in daily routine activities to achieve tangible results. Establishment of ESG Metrics provides
accountability for change and creation of long term value through strategies that incorporate ESG.
Monash IVF Group Limited
Directors’ Report continued
Directors’ Report
for the year ended 30 June 2023
for the year ended 30 June 2023
Monash IVF Group FY24
Sustainability Strategy
Monash IVF Group FY24
Sustainability Strategy
We have developed our Sustainability Strategy on a page to summarise the key areas of
focus where Monash IVF Group can achieve the maximum impact in delivering safe, effective
healthcare services, that give every person the best opportunity to create or grow their family.
We have developed our Sustainability Strategy on a page to summarise the key areas of
focus where Monash IVF Group can achieve the maximum impact in delivering safe, effective
healthcare services, that give every person the best opportunity to create or grow their family.
Environment
Climate change
Environment
Climate change
Waste
management
Waste
management
Our People
Our People
Employee attraction,
retention & development
Employee attraction,
retention & development
Providing a safe
workplace that
Providing a safe
celebrates diversity
workplace that
celebrates diversity
Communities
Communities
Providing safe and
effective care that
Providing safe and
meets the needs of our
effective care that
stakeholders
meets the needs of our
stakeholders
Governance
Governance
Ethics and compliance
Ethics and compliance
Privacy and
data security
Privacy and
data security
Upholding
Upholding
human rights
human rights
Understand and
minimise our
impact on the
environment
Understand and
minimise our
impact on the
environment
Provide an
inspiring
Provide an
and fulfilling
inspiring
workplace where
and fulfilling
everyone feels
workplace where
safe to be their
everyone feels
true self
safe to be their
true self
Supporting
people making
Supporting
informed
people making
decisions
informed
about their
decisions
reproductive
about their
plans
reproductive
plans
Maintain
confidence
Maintain
and trust
confidence
and trust
Measure and reduce
greenhouse gas
emissions
Measure and reduce
Reduce waste, re-use
greenhouse gas
and recycle
emissions
Include sustainability in
Reduce waste, re-use
procurement decisions
and recycle
Include sustainability in
procurement decisions
Drive employee
engagement through
every stage of the
Drive employee
employee life cycle
engagement through
every stage of the
Empower
employee life cycle
individual career
ownership through
Empower
individual career
transformational
ownership through
learning opportunities
transformational
learning opportunities
Maintain
accreditation
Maintain
Invest in research
accreditation
with potential
Invest in research
for direct clinical
with potential
or laboratory
for direct clinical
application
or laboratory
application
Safeguard data
entrusted to us
Safeguard data
entrusted to us
Comply with all
ASX Reporting
Comply with all
and Disclosure
ASX Reporting
Requirements
and Disclosure
Requirements
Measure carbon
footprint and develop
strategy towards
Measure carbon
net zero
footprint and develop
Measure waste and
strategy towards
implement strategy to
net zero
reduce landfill waste per
Measure waste and
patient episode
implement strategy to
reduce landfill waste per
patient episode
Engagement Scores
(Employee and Clinician)
Engagement Scores
Turnover (voluntary
(Employee and Clinician)
and non-voluntary)
Turnover (voluntary
Learning modules
and non-voluntary)
introduced / completed
Learning modules
Workplace safety,
introduced / completed
measured through Lost
Workplace safety,
Time Injuries
measured through Lost
Time Injuries
Patient Satisfaction
Success Rates
Patient Satisfaction
Adverse Event Rate
Success Rates
Number of transfers
Adverse Event Rate
from Day Surgery Unit
Number of transfers
to another facility
from Day Surgery Unit
to another facility
Publication of Annual
Modern Slavery Report
Publication of Annual
Modern Slavery Report
Audit of Cybersecurity
Audit of Cybersecurity
Monetary losses as a
result of Medicare false
Monetary losses as a
claims or fraud
result of Medicare false
claims or fraud
Reportable Privacy
Breaches
Reportable Privacy
Breaches
42 | Monash IVF Group
16
17
Annual Report 2023 | 43
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Remuneration Report (Audited)
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
The Company’s Directors present the 2023 Remuneration Report prepared in accordance with Section 300A of the
Corporations Act 2001, for the Company and the Group for the year ending 30 June 2023 (“FY23”). The information
provided in this Remuneration Report has been audited by KPMG as required by Section 308(3C) of the Corporations
Act 2001. The Remuneration Report forms part of the Directors’ Report.
The Remuneration Report outlines the remuneration strategies and arrangements for the Key Management Personnel (KMP)
who have authority and responsibility for planning, directing, and controlling the activities of Monash IVF Group.
FY23 Highlights
Employee commitment, strength and focus enabled a strong FY23 result. Our investment in future growth continues to set
Monash IVF Group apart in the market with compelling employer, patient, and doctor value propositions. A continued
drive to achieve Vision 2026 strategic objectives additionally demonstrates Monash IVF Group capability to deliver robust
market growth, despite challenging macro environmental factors. Sustained achievements over the 4-year period also
demonstrates stable and capable Executive Leaders who continue to position Monash IVF Group to capitalise on growth.
Linking remuneration outcomes with performance
In FY23 our remuneration outcomes aligned to the performance of Monash IVF Group relative to FY23:
• Maximum remuneration (fixed and at-risk remuneration combined) for KMP continued to be adjusted in line with
external benchmarking guidance. As advised in FY22, this benchmarking considered organisations of comparable
size at that time. In FY23 the Company has continued to grow from a profitability, market capitalisation and key
strategic non-financial outcomes to deliver longer term sustainable growth. In FY23, the Board agreed to continue
to increase the total remuneration for the CEO, CFO and COO through step changes, bringing these closer to
comparable peers. The CEO 3-year fixed remuneration CAGR is 6% and 11% for total maximum remuneration
aligning with more at-risk remuneration. The adjustments to the CEO, CFO and COO maximum remuneration
remains at or below the industry benchmark. The Board continue to recognise that KMPs & Executive are critical
to the achievement of Vision 2026 and therefore the remuneration and retention strategy ensures they remain
incentivised to deliver this strategy. Further adjustments may be considered and applied to the at-risk component
to ensure greater comparability to peers.
The FY23 STI gateway was achieved, being Scientific Success Rates. This measure continues to be the most critical
focus of the organisation and will remain as a STI gateway. The STI financial component was below target, but
above threshold, resulting in 48% of financial target being met.
For the LTI component, the Earnings Per Share (EPS) component of the FY2021 Performance Rights granted was
achieved on 30 June 2023 due to performance targets being met during FY21 to FY23.
The Total Shareholder Return (TSR) on the FY20 Performance Rights granted did not vest during FY23. the TSR
component of the FY21 Performance Rights granted will be tested in September 2023.
•
•
•
•
In FY24 our remuneration outcomes planned for FY24 align to the performance of Monash IVF Group relative to FY23:
In FY24 the Total Fixed Remuneration for CEO, CFO and COO increased by 6%, with increases of 10% to the
At-Risk component for the CEO, CFO & COO.
Following a review of the Incentive Plan structure there is no change to the LTI Plan with the Relative Total
Shareholder Return (TSR) peer group of ASX 300 Healthcare continuing to exclude CSL. The Short-Term Incentive
(STI) plan for FY24 will also retain the opportunity for reward where performance exceeds target. A stretch
target for financial measures being 120% aligned to a further 150% of financial objective of Short-Term
Incentive (STI) available. Additionally, recognising that Earnings Per Share (EPS) has been a measure in both
Short-Term Incentive (STI) and Long-Term Incentive (LTI) in prior years, the Short-Term Incentive (STI) financial
measure for FY24 has been changed to Underlying Net Profit After Tax (NPAT) whilst the Long-Term Incentive
(LTI) related measure will continue to be Earnings Per Share (EPS), in part.
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
Non-Executive Director remuneration arrangements in FY2023
Fees payable to Non-Executive Directors were reviewed regarding fee adjustments effective 1 July 2022 and 3%
increase was applied to Director base and committee fees. This increase is inclusive of 0.5% increase to superannuation
contribution.
1.0 Remuneration Snapshot
1.1 Remuneration Governance
The Board is responsible for the overall governance and decisions relating to remuneration. The Remuneration and
Nomination Committee (Committee), underpinned by the Remuneration and Nomination Committee Charter enables the
Board to discharge their governance responsibilities in all matters relating to remuneration and engagement of all
Executive and Non-Executive members.
The Committee as stated by the Remuneration and Nomination Committee Charter must have at least 3 members, the
majority of whom (including the Chair) must be independent Directors and all of whom must be non-executive Directors.
The Monash IVF Group Remuneration and Nomination Committee comprises of 4 independent Directors. Ms Zita Peach,
Chair who was appointed on 23 June 2020. Mr Richard Davis, Mr Josef Czyzewski and Ms Catherine West.
During FY23, the Committee met 4 times with full attendance by all members. The Committee at times invites the CEO,
CFO/Company Secretary, Chief People & Culture Officer and other non-executive directors (non-members of the
Committee) to attend Committee meetings to assist in deliberations (excluding matters relating to their own employment).
The Remuneration and Nomination Committee sought no recommendations as defined in section 9B of the Corporations
Act throughout FY23.
The Committee is responsible for reviewing and making recommendations to the Board in relation to:
• Group remuneration principles, strategy and practices;
•
Non-executive director fee frameworks, policy regarding fee allocation, and fee pools sufficient for appropriate
fee levels, Board renewal, Board roles, market practice, and director workload;
Director Succession Planning
Appointment of new directors, including the review of Board and Board committee membership
Appointment of CEO
Board effectiveness and performance,
•
•
•
•
• Overall remuneration framework for Executives;
•
Terms and conditions underpinning Executive & Doctor Service Agreements (ESA), including terms such as restraint
and notice period;
Eligibility for, and conditions of, incentive plans, including equity-based incentive plans;
Remuneration packages for all Senior Executives including structure and incentives;
•
•
• Metrics and associated targets for Incentive plans;
•
Terms and conditions associated with incentive plans including equity plan rules, escrow and other restrictions on
disposal;
Structure and quantum of Senior Executive termination payments;
Treatment of outstanding incentives in case of cessation of employment;
Exercise of malus or clawback if relevant to incentive plan payments.
•
•
•
The Remuneration and Nomination Committee are also responsible for monitoring and reporting to the Board on other
matters including:
•
•
•
•
Remuneration relative to industry benchmarks;
Achievement of performance requirements for the payment of incentives;
Succession Planning;
Diversity, inclusion objectives and pay equity including the WGEA annual report.
44 | Monash IVF Group
18
19
Annual Report 2023 | 45
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
The Remuneration and Nomination Committee Charter is available on the Company’s website at Corporate Governance
| Monash IVF Group. The Charter is reviewed annually. Further information on the Remuneration and Nomination
Committee is provided in the Corporate Governance Statement in this Annual Report.
1.2 Principles of Remuneration Framework
Our continued approach to remuneration has maintained a consistent approach to remuneration that meets our
remuneration objectives and aligns with our principles. The following summarises these key principles that underpin the
structure of Executive Remuneration arrangements across the Group.
Remuneration Principles
Principle
Design and operational implications of Remuneration Framework
Aligned to organisations
strategy and business priorities
▪
Remuneration framework will ensure alignment with the overall business
strategy and ensure all policies and processes are observed to enable the
attraction and retention of key personnel who create value for shareholders
▪ Operates in support of Our Principles and aligns to the organisations
Market Competitive
Rewards Performance
Simple and Transparent
Effective Governance
Alignment to Patient, People &
Doctor Outcomes
▪
▪
▪
▪
▪
▪
▪
▪
▪
▪
desired culture
Ensure employees including Executive KMP and management are rewarded
fairly and competitively according to role accountability, market positioning,
skills, experience and performance
Remuneration decisions will be informed by utilising relevant market
benchmarking
Encompass long term and short-term variable performance elements
for those who have the ability to impact overall organisation
performance
Short term and long-term remuneration incentives and outcomes
Performance targets to be met for payment (at threshold or target)
are set after considering previous performance, forecast and budget
A simple, flexible, consistent and scalable remuneration framework is
to be used across the organisation allowing for sustainable business
growth
The structure must be easily communicated and can reinforce the
organisations mission, principles and culture
The Remuneration and Nomination Committee and Board will ensure that
remuneration outcomes reflect both risk and performance and is reviewed
regularly to ensure employees act ethically and responsibly
Comply with all relevant legal and regulatory provisions
Ensure Patient, People and Doctor engagement outcomes remain a critical
measure for all KMP and management relating to at-risk remuneration.
2.0 Remuneration Structure
2.1 Executive Remuneration Structure
Our Executive Remuneration structure is designed to attract, engage and retain a highly qualified and experienced group
of Executives. Our remuneration is structured to align Executives to long term sustainable shareholder value through the
execution of Vision 2026 by combining Total Fixed Remuneration, Short and Long-term incentives to form an overall Total
Remuneration position.
The Board reviews the structure and effectiveness of the remuneration arrangements annually to ensure their alignment to
business performance and strategy.
Monash IVF Group Limited
Remuneration Report
Remuneration Report (Audited) continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Purpose of each remuneration component
Total Fixed Remuneration
(TFR)
Short Term Incentive
(At Risk)
Long-Term Incentive
(At Risk)
To attract and retain, paying
competitively, reflecting the individual’s
accountability, position requirements and
experience. TFR is determined as base
salary and inclusive of all standard
leave provisions and superannuation
guaranteed contributions.
Rewards performance for achieving
stretch targets and further rewards the
achievement of both financial and non-
financial goals.
Achievement is measured using an annual
balanced scorecard of measures aligned
to the organisations strategic vision and
objectives.
Rewards and retains key contributors by
creating alignment with long term
shareholder interests and reward the
creation of sustainable shareholder
wealth.
Monash IVF Group has remained consistent with the remuneration framework in FY23 for the CEO, CFO and COO with
the framework retaining these three components, with short-term incentives and long-term incentives at risk. The
remuneration structure aligns the remuneration opportunity with the level of position accountability.
2.2 Executive Remuneration Structure for FY23
The diagram below summarises the framework for FY23. The framework continues to be reviewed each year.
Performance Driven
Alignment with Shareholder
Interests
Total Available Remuneration
Market Competitive Remuneration
Total Fixed Remuneration (TFR)
At Risk Remuneration
TFR is determined on the basis of
market rates (where applicable, the
size and complexity of the role and
the individual’s skill and experience
relative to position requirements).
TFR Comprises of:
• Cash salary
• Salary sacrifice items
• Employer superannuation
contributions in line with statutory
regulations
TFR levels are reviewed annually by
the Committee through a process that
considers market rates and individual
experience in the position. TFR is also
reviewed on promotion.
There are no guaranteed increases in
executive remuneration.
Short Term Incentive (STI)
Long Term Incentive Plan (LTI)
• EPS growth hurdles based on
predefined growth rates over a 3
year period (70%)
• TSR hurdles based on Group’s
relative TSR performance against
ASX300 Healthcare Index (excluding
CSL) (30%)
• Comprise performance rights which
vest in accordance with 3 year EPS
growth and relative TSR above
threshold performance requirements.
• Balanced Scorecard Model that
includes a Non-Financial
Gateway (ANZARD Success Rate
Average)
• 70% financial Measure based on
EPS performance
• Non-financial Measures (30%)
are linked to key strategic
initiatives built around a
balanced scorecard focused on
long-term sustainable growth
including but not limited to:
•
•
•
•
•
Engagement (People,
Patient, Doctor)
Market Share growth
Scientific Success Rates
Doctor attraction
Non organic growth
initiatives.
46 | Monash IVF Group
20
21
Annual Report 2023 | 47
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
3.0 At Risk Remuneration Framework
At the beginning of each year the Remuneration and Nomination Committee determine a set of targets for the forthcoming
year with reference to the strategic objectives and financial results from prior year. The Remuneration and Nomination
Committee can subsequently adjust targets for any significant changes including but not limited to, significant events,
capital structure, material acquisition or divestments, in accordance with any ASX Listing Rules if applicable.
The Board may exercise its discretion to adjust where it considers appropriate considering the purpose and intent of the
incentive plan and the performance standards. This may include adjustments to ensure that the interests of the relevant
participant are not, in the opinion of the Board, materially prejudiced or advantaged relative to the position reasonably
anticipated at the time of the assessment. No discretion was applied to any KMP Incentive outcomes for FY23.
The following table summarises the short-term incentive and long-term incentive reward components for certain KMP
including the performance measures and delivery mechanism applicable for the performance period ended 30 June
2023.
3.0 At Risk Remuneration Framework
Short Term Incentive
(at risk)
Long Term Incentive
(at risk)
Incentive Opportunity
Threshold
Target
Threshold
Target
Short and Long – Term Incentive opportunities are expressed as a percentage of TFR and refer to section 4.1
CEO
CFO
COO
Performance Measures
30%
30%
30%
100%
100%
100%
20%
20%
20%
100%
100%
100%
•
•
•
LTI KPIs are earnings per share growth
(EPS)(70%) and Total Shareholder Return
(TSR)(30%)
TSR measures returns made against the
performance of a comparator group with
hurdles based on predefined growth rates
over a 3 year period
EPS compound annual growth rate
(CAGR) provides a tangible measure of
shareholder value with hurdles based on
predefined growth rates over a 3 year
period
•
•
•
•
•
STI scorecard KPIs include financial and
non-financial measures
A non-financial gateway is in-place
whereby no STI is payable if the Group’s
clinical pregnancy rates (success rates) is
below the ANZARD average
70% of STI is based on the EPS financial
measure. EPS may be adjusted for
certain individual significant, non-regular,
abnormal or unusual gains or losses
30% of STI is based on qualitative non-
financial measures which include Patient
engagement, People engagement,
doctor engagement, scientific success
rates and domestic market share
Pro-rata payment of STI is made if
achievement is between threshold and
target
Delivery Mechanisms
STI awards for the CEO, CFO and COO are
paid as cash and subject to continued
employment
LTI awards are granted as performance rights,
are subject to testing against the above
performance measures and continued
employment. The CEO, CFO and COO were not
required to pay any money to be granted
performance rights
3.1 FY23 Short Term Incentive
A non-financial gateway is in-place whereby no Short-Term Incentive (STI) is payable if the Group’s clinical pregnancy
rates (success rates) is below the ANZARD average for the period 1 July 2022 to 31 April 2023. This period is
applicable due to the availability of pregnancy outcomes information at the time of reporting. The available ANZARD
22
48 | Monash IVF Group
target average applicable is 40.1%. The Group’s clinical pregnancy rates for the period between July 2022 to April
2023 was 44.2% and accordingly, the non-financial gateway to STI was achieved.
The quantitative financial measure defined for the CEO, CFO and COO in FY23 was as follows:
Strategic Objective
Weighting Measure
FY23 Outcome
Earnings per Share
(EPS)
70%
EPS Target was set at FY23 Group
Budget (7.05 cents per share normalised)
and threshold set at 90% (6.35 cents per
share normalised) of FY23 Group Budget.
Normalised EPS achieved was
6.53 cents per share and did
not meet the 7.05 cents per
share target. Threshold was
achieved with a 48% of
financial measure met.
Short Term Incentive (STI) Non – Financial
The qualitative non-financial measures defined for KMP in FY23 included the following:
Strategic Objective
Weighting Measure
FY23 Outcome
Patient Engagement
6% (CEO,
CFO) 5%
(COO)
Deliver an ongoing improvement in Patient
Engagement as measured by the patient
Net Promoter Score (NPS) Survey
targeting engagement improvements.
Patient Engagement NPS was measured in
the IVF and Ultrasound businesses
separately.
People Engagement
6% (CEO,
CFO) 5%
(COO)
To foster a culture of Engagement with all
Monash IVF Group employees as
measured by an annual employee survey.
Doctor Engagement
6% (CEO,
CFO) 5%
(COO)
Foster a culture of engagement with all
Monash IVF Group Clinicians. This is
measured by a clinician NPS Survey
targeting engagement improvements.
Scientific Success Rates
6% (CEO,
CFO) 5%
(COO)
Deliver a focused improvement in success
rates in line with Your IVF success rate
measure 4 by ANZARD which is(%
implantation.
Domestic Market
Growth
6% (CEO,
CFO) 5%
(COO)
Market share growth in all IVF Key
markets. Market Share target was set at
23.9% for the period from July 2022 to
June 2023 Threshold was set at 21.5%.
Patient Engagement NPS
achieved for the IVF business
was above stretch target by
+.37 of NPS. Payout for the
Patient Engagement measure
was 100%. The Patient
Engagement NPS achieved
for the Ultrasound business
was +1.84 above stretch.
Payout of Patient
Engagement NPS was 100%.
Employee Engagement
Percentage achieved above
threshold and below target.
Payout for the People
Engagement measure was
90%.
Doctor Engagement is based
on 2 Key NPS measures with
both results meeting target by
+4.4 and +3.4 respectively.
Payout of Doctor Engagement
was 100%.
Success Rates for the period
of July 2022 to May 2023
for measure 4 were 41.90%.
Payout of Scientific Success
Rates was 99%
Market share for the period
from July 2022 to June 2023
was 22.7% which was above
threshold but below target.
Payout for the Market Share
measure was 68%.
23
Annual Report 2023 | 49
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
Doctor Acquisition &
Retention
5%
(C00)
In line with Vision 2026 and successfully
growing the Monash IVF Group network,
this measure relates to growing and
retaining doctor network nationally
through the execution of the Monash IVF
Group Doctor Value Proposition. Target
was set at 148 number of fertility
specialists and threshold at 141 number
of fertility specialists.
As a result of 9 clinicians
(excluding trainees and
acquisitions) joining Monash
IVF Group in FY23 this metric
did not meet threshold.
3.3 FY23 Long-term Incentive grant
The LTI plan is a performance rights plan with vesting rights dependent upon the satisfaction of pre-determined
performance hurdles and continuous employment. LTI grants are made on a rolling annual basis to ensure Executives
maintain a continuous focus on sustainable long-term growth and returns and provides an appropriate balance with short-
term incentives which are focussed on annual returns.
The terms and overview of the FY2023 LTI grant to KMP and other eligible employees, including the CEO, CFO and COO
are summarised below.
Performance Rights Granted
EPS Compound Annual Growth Rate ("EPS Hurdle")
70% of allocation subject to the hurdle
Relative Total Shareholder Return ("TSR Hurdle")
30% of allocation subject to the hurdle
Vesting Framework
The EPS component of the allocation will be measured at the end
of the 3-year performance period.
20% will vest at threshold performance. 100% will vest at
maximum performance, with pro rata vesting between threshold
and mazimum.
EPS threshold performance is 10% growth per annum over the
three year period.
Vesting Framework
The TSR component of the allocation will be masured at the end
of the 3-year performance period relative to the ASX300
Healthcare Accumulation Index (Index) excluding CSL
performance.
20% will vest at threshold performance when TSR equals index
returns, 100% vest at maximum performance if TSR equals index
returns +5 percentage points on an annualised basis, with pro-
rata vesting between threshold and maximum.
The LTI award opportunity is based on a percentage of the participant’s total fixed remuneration as at the grant date.
The number of performance rights issued is determined by dividing the long-term incentive component of the participant’s
fixed remuneration by the volume weighted average price of Monash IVF Group Limited shares traded on the Australian
Stock Exchange over the 10 trading days immediately following the release of the FY2022 full-year results announcement.
The VWAP applied to the FY2023 performance rights issue was $1.00515.
24
Performance rights were granted in two tranches during FY2023, with each tranche subject to separate vesting conditions.
Executives did not pay any money to be granted the performance rights and the expiry date of the rights will be on the
fifth anniversary of their grant.
Details of the FY2023 LTI grant to KMP is set out below:
KMP
% of TFR
Performance
Rights granted
Allocation
# of performance
rights
Mr. Michael Knaap (CEO)
90%
Mr. Malik Jainudeen (CFO)
45%
Mr. Hamish Hamilton (COO)
45%
EPS
TSR
EPS
TSR
EPS
TSR
70%
30%
70%
30%
70%
30%
372,819
159,780
111,846
47,934
111,846
47,934
The performance periods and vesting schedules for the FY2023 performance rights are set out in the following table:
Performance Measure
Earnings per share
Performance Period
1 July 2022 to 30 June 2025
Performance
% of rights that will vest
Less than 10% per annum
10% per annum
0%
20%
Between 10% to 12% per annum
20% to 100% pro rata
Greater than 12% per annum
100%
Performance Measure
Relative TSR
Performance Period
11 days after FY2022 results announcement to 11 days after FY2025 results
announcement
Performance
% of rights that will vest
Less than Index return
Equal to index return
0%
20%
Between Index return and Index
return +5%
20% to 100% pro rata
Equal to or greater than Index return
+5%
100%
The graduated vesting scale in the LTI plan was designed to minimise the likelihood of excessive risk taking as a
performance threshold is approached. The Board believes this vesting framework strengthens the performance link over
the long-term and accordingly encourages Executives to focus on long term performance. The Board also acknowledges
that the value of certain strategic initiatives may take several years to deliver.
Further terms and conditions of the LTI plan are as follows:
50 | Monash IVF Group
25
Annual Report 2023 | 51
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Remuneration Report
for the year ended 30 June 2023
Remuneration Report (Audited) continued
for the year ended 30 June 2023
•
•
•
The invitations issued to eligible persons will include information such as award conditions and, upon acceptance
of an invitation, the Board will grant awards in the name of the eligible person. Awards may not be transferred,
assigned or otherwise dealt with except with the approval of the Board.
Awards will only vest where the conditions advised to the participant by the Board have been satisfied. An
unvested award will lapse in a number of circumstances, including where conditions are not satisfied within the
relevant time period, or in the opinion of the Board, a participant has committed an act of fraud or misconduct
or gross dereliction of duty. If a participant’s engagement with the Company (or one of its subsidiaries) terminates
before an award has vested, the Board may determine the extent to which the unvested awards that have not
lapsed will become vested awards or, if the award offer does not so provide and the Board does not decide
otherwise, the unvested awards will automatically lapse.
Awards are subject to malus and clawback conditions whereby the Board may, in its discretion, and subject to
applicable laws, determine the performance rights or shares already allocated following the vesting or exercise
of a performance right are forfeited, recovered or the conditions modified. The Board’s decision in regard to
unfair benefits obtained by the participant is final and binding.
• Where there is a takeover bid or a scheme of arrangement proposed in relation to the Company, the Board
may determine that the participant’s unvested awards will become vested awards. In such circumstances, the
Board shall promptly notify each participant in writing that the awards have become vested awards, or that he
or she may, within the time period specified in the notice and where applicable in accordance with the class or
category of award, exercise such vested awards. A participant is not entitled to participate, in their capacity
as holder of awards, in any new issue of shares in the Company, nor in any return of capital, buyback or other
distribution or payment to shareholders, unless the Board determines otherwise. In the event of a bonus issue or
rights issue, the rights of the award will be altered in a manner (if any) determined by the Board, consistent with
the ASX Listing Rules.
•
•
•
In the event of any reorganisation of the issued ordinary capital of the Company before the exercise of an
award, the number of shares attached to each award will be reorganised in the manner specified in the LTI plan
and in accordance with the ASX Listing Rules or, if the manner is not specified, the Board will determine the
reorganisation. In any event, the reorganisation will not result in any additional benefits being conferred on
participants which are not conferred on shareholders of the Company.
Participants who hold an award issued pursuant to the LTI plan have no rights to vote under the LTI award at
meetings of the Company until that award has vested (and is exercised, if applicable) and the participant is the
holder of a valid share in the Company. Shares acquired upon vesting of the award will, upon issue, rank equally
in all respects with other shares.
No award or share may be offered under the LTI plan if to do so would contravene the Corporations Act, the
ASX Listing Rules or instruments of relief issued by ASIC from time to time.
4.0 Executive and Non-Executive Remuneration
4.1 KMP Remuneration
The respective total reward mix for KMP in FY23 is as follows, assuming business performance results in target vesting for
STI and maximum grant value for LTI.
KMP
Mr. Michael Knaap
Mr. Malik Jainudeen
Mr. Hamish Hamilton
Dr. Richard Henshaw
Fixed Pay
39.2%
52.6%
52.6%
100.0%
STI
25.5%
23.7%
23.7%
0.0%
LTI
35.3%
23.7%
23,7%
0.0%
At Risk
60.8%
47.4%
47.4%
0.0%
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
KMP
Component
Commentary
Mr. Michael Knaap –
Chief Executive Officer &
Managing Director
TFR
STI
LTI (performance
rights)
Notice period
Term of
Agreement
1 July 2022 to 30 June 2023- $594,825 per annum
The CEO has the opportunity to earn an annual incentive of 65%
of total fixed remuneration based on meeting certain defined
criteria. The FY2023 STI criteria were subject to both financial
(70%) and non-financial (30%) outcomes. STI is only applicable
if the clinical pregnancy rate is at or above the ANZARD mean.
532,599 performance rights were granted in FY2023 which is
equivalent to 90% of TFR. These rights vest at the end of the 3
year performance period subject to meeting certain EPS and
TSR outcomes.
6 months
No Fixed Term
KMP
Component
Commentary
Dr. Richard Henshaw
(Executive Director)
TFR
STI
$318,675 per annum
Dr. Henshaw was the only doctor during FY2023 who served as
a director. He was paid a salary for his clinician duties and
medical leadership roles.
Not eligible for a STI payment
LTI (performance
rights)
Notice period
Term of
Agreement
Not eligible for a LTI offer
6 months
No Fixed Term
KMP
Component
Commentary
Mr. Malik Jainudeen (Chief
Financial Officer &
Company Secretary)
TFR
STI
LTI (performance
rights)
Notice period
Term of
Agreement
1 July 2022 to 30 June 2023 - $356,895 per annum
The CFO has the opportunity to earn an annual incentive of 45%
of total fixed remuneration based on meeting certain defined
criteria. The FY2023 STI criteria were subject to both financial
(70%) and non-financial (30%) outcomes. STI is only applicable
if the clinical pregnancy rate is at or above the ANZARD mean.
159,780 performance rights were granted in FY2023 which is
equivalent to 45% of TFR. These rights vest at the end of the 3
year performance period subject to meeting certain EPS and
TSR outcomes.
3 months
No Fixed Term
52 | Monash IVF Group
26
27
Annual Report 2023 | 53
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
KMP
Component
Commentary
5.0 Details of Remuneration for Key Management Personnel
Mr. Hamish Hamilton (Chief
Operating Officer)
TFR
STI
LTI (performance
rights)
Notice period
Term of
Agreement
1 July 2022 to 30 June 2023 - $356,895 per annum
5.1 Key Management Personnel (“KMP”)
The COO has the opportunity to earn an annual incentive of
45% of total fixed remuneration based on meeting certain
defined criteria. The FY2023 STI criteria were subject to both
financial (70%) and non-financial (30%) outcomes. STI is only
applicable if the clinical pregnancy rate is at or above the
ANZARD mean.
159,780 performance rights were granted in FY2023 which is
equivalent to 45% of TFR. These rights vest at the end of the 3
year performance period subject to meeting certain EPS and
TSR outcomes.
3 months
No Fixed Term
KMP have authority and responsibility for planning, directing, and controlling the activities of the Group, directly or
indirectly, including directors of the Company and other Executives. KMP comprise the directors of the Company and the
senior Executives for the Group named in this report.
Name
Position
Period Covered Under this Report
Non-Executive Directors
Mr Richard Davis
Mr Josef Czyzewski
Mr Neil Broekhuizen
Ms Zita Peach
Ms Catherine West
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Full Financial Year
Full Financial Year
Full Financial Year
Full Financial Year
Full Financial Year
Name
Position
Period Covered Under this Report
4.2 Non-Executive Director (NED) Remuneration Policy
Executive Directors
Under the Constitution, the Directors decide the total amount paid to all Directors as remuneration for their services as
Directors. However, under the ASX Listing Rules, the total amount paid to all Directors for their services must not exceed
in aggregate in any financial year, the amount fixed by the Company in a general meeting. This amount has been fixed
by the Company at $950,000. For the 2023 financial year, the fees payable to the current NEDs are $605,144 in
aggregate reflecting a $17,551 increase compared to FY2023.
Role
Fees
Chair
Other Non-Executive Directors
Additional Fees
Audit & Risk Committee – Chair
Audit & Risk Committee – Member
Remuneration & Nomination Committee – Chair
Remuneration & Nomination Committee – Member
2023
$
150,469
93,625
17,833
8,902
17,833
8,902
2022
$
146,086
90,898
17,313
8,643
17,313
8,643
Mr Michael Knaap
Chief Executive Officer &
Full Financial Year
Dr Richard Henshaw
Other KMP
Mr Malik Jainudeen
Mr Hamish Hamilton
Managing Director
Executive Director
Full Financial Year
Chief Financial Officer &
Company Secretary
Chief Operations Officer
Full Financial Year
Full Financial Year
54 | Monash IVF Group
28
29
Annual Report 2023 | 55
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Remuneration Report (Audited) continued
for the year ended 30 June 2023
Remuneration Report (Audited) continued
for the year ended 30 June 2023
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56 | Monash IVF Group
Annual Report 2023 | 57
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Remuneration Report (Audited) continued
for the year ended 30 June 2023
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58 | Monash IVF Group
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
5.0 Details of Remuneration for Key Management Personnel (continued)
5.2 Analysis of incentives included in remuneration
2
3
Details of the vesting profile of the STI cash incentives awarded as remuneration to each director of the Company and
other KMP are detailed below:
Cash Incentive (2023)
Cash Incentive (2022)
% of Available Incentive
% of Available Incentive
Payable
and Paid
Payable
and Paid
Not
Payable
Paid
Paid
Not Paid
Executive Directors
Mr Michael Knaap
Dr Richard Henshaw
$239,055
-
62%
-
38%
-
$48,510
-
14%
-
Other Key Management Personnel
Mr Malik Jainudeen
Mr Hamish Hamilton
$99,300
$91,975
62%
57%
38%
43%
$19,404
$18,451
14%
14%
86%
-
86%
86%
5.3 Loans to Key Management Personnel
No loans were issued to KMP during 2023.
5.4 Key Management Personnel Shareholdings
The following details Monash IVF Group ordinary shares held by Directors and KMP as of the date of this Report:
Balance at start
of year
Granted as
remuneration
Net
Change
Balance at end
of year
Name
Non-Executive Directors
Mr Richard Davis
Mr Josef Czyzewski
Mr Neil Broekhuizen
Ms Zita Peach
Ms Catherine West
Executive Directors
Mr Michael Knaap
Dr Richard Henshaw
182,067
241,382
350,000
92,803
37,100
150,655
1,358,842
Other Key Management Personnel
Mr Malik Jainudeen
Mr Hamish Hamilton
Total
19,231
123,835
2,555,915
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
182,067
241,382
350,000
92,803
37,100
150,655
1,358,842
19,231
123,835
2,555,915
33
Annual Report 2023 | 59
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Remuneration Report (Audited) continued
Remuneration Report
for the year ended 30 June 2023
for the year ended 30 June 2023
6.0 Link to Group Performance
6.1 Group Performance
The revenue and earnings of the Group for the five years to 30 June 2023 are summarised below:
Measure
Revenue
Underlying EBITDA (3)
Reported EBITDA
Underlying NPAT (3)
Reported NPAT
STI Payable
Total Shareholder Return (1)
Closing Share Price ($)
Dividend Per Share (cents)
Earnings per Share (cents) (1)
2023
$’000
213,590
53,431
48,461
25,469
21,966
49.1%
27%
1.15
4.4
5.6
2022
$’000
192,294
48,145
43,157
22,232
18,502
16.7%
21%
0.94
4.4
4.7
2021
$’000
183,605
47,749
51,281
23,418(2)
25,687(2)
81.1%
61%
0.85
4.2
6.5
2020
$’000
145,417
34,797
32,833
14,353
11,726
24.1%
-59%
0.53
2.1
4.6
2019
$’000
151,980
37,815
37,242
20,871
19,852
29.4%
34%
1.40
6.0
8.4
During the period, Revenue, EBITDA, NPAT, TSR and EPS were key performance measures. EBITDA is a major component
of the STI plans for KMP including the CEO, CFO and COO whilst TSR and EPS growth are long term metrics used to
measure the CEO, CFO and COO’s remuneration via the Executive Long Term Incentive Plan. CEO, CFO and COO
remuneration varies with the outcomes of these measures above a required threshold performance level.
1)
2)
The Net Profit after Tax, total shareholder return and earnings per share are not comparable for certain years due to the capital
structure and discontinued operations.
The 30 June 2021 amounts have been restated due to the IFRS Interpretations Committee decision in relation to accounting for
Software as a Service.
3) Underlying EBITDA and NPAT are non-IFRS measures that are utilised for internal reporting purposes.
Monash IVF Group Limited
Directors’ Report
Directors’ Report continued
for the year ended 30 June 2023
for the year ended 30 June 2023
Environmental regulations
The Group is not subject to any significant environmental regulations under Commonwealth or State
legislation.
Likely developments
The Group remains committed, prudent and focused on profitably growing the Business through
leveraging its scientific capabilities and scale across the clinic network both domestically and
internationally.
Indemnification and insurance of officers and auditors
Since the end of the previous financial period, the Group has not indemnified or made a relevant
agreement for indemnifying against a liability any person who is or has been an officer or auditor of
the Group.
Lead auditor’s independence declaration
The lead auditor’s independence declaration is set out on page 36 and forms part of the directors’
report for the year ended 30 June 2023.
page 62
This report is made in accordance with a resolution of the directors.
Richard Davis
Chairman
Michael Knaap
Chief Executive Officer and Managing Director
Dated in Melbourne this 22nd day of August 2023
60 | Monash IVF Group
34
35
Annual Report 2023 | 61
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Monash IVF Group Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Monash IVF Group
Limited for the financial year ended 30 June 2023 there have been:
i.
ii.
no contraventions of the auditor independence requirements as set out in the
Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Chris Sargent
Partner
Melbourne
22 August 2023
Monash IVF Group Limited
Corporate Governance Statement
Corporate Governance Statement
This statement, approved by the Board, reports on the Group’s key governance framework, principles and practices
as at 30 June 2023. These principles and practices are subject to regular review and when necessary revised to
reflect legislative changes or corporate governance best practice.
The Board of Directors is committed to maintaining the Group’s pre-eminent status as a leader in the fields of
Assisted Reproductive Services (ARS) and specialist women’s imaging. This commitment will lead to sustainable
growth and shareholder returns. The Board is a strong advocate of good corporate governance and its fulfilment
of these practices and obligations will enhance the ability for shareholders to be appropriately rewarded.
Monash IVF Group Limited complies in all material respects with the fourth edition of the ASX Corporate
Governance Council’s Corporate Governance Principles and Recommendations. The details of this compliance and
reasons for any non compliance are set out in this statement. A separate Appendix 4G has been lodged with the
Australian Securities Exchange Limited (ASX).
Principle 1 Lay solid foundations for management and oversight
1.1 Roles and responsibilities of the Board and Management and delegation
The role of the Board is to oversee good governance practice in all aspects of the Group’s undertakings. This
includes setting and approving the strategic direction of the Group and to guide and monitor Monash IVF Group
management and its businesses in achieving their strategic objectives. The Board is committed to maximising
performance through continued investment in all aspects of the business including research, education and innovation
in clinical services to improve patient outcomes.
The Board is committed to a high standard of corporate governance practice and fosters a culture of compliance
which values ethical behaviour, integrity, teamwork and respect for others.
The Monash IVF Group Limited Board Charter outlines the role and responsibilities of the Board along with direction
on Board composition, structure and membership requirements. The Charter clearly outlines matters expressly
reserved for the Board’s determination and those matters delegated to Management.
The Company’s Chief Executive Officer and Managing Director, Michael Knaap, has responsibility for day-to-day
management of Monash IVF Group Limited in its entirety. Michael was previously the Chief Financial Officer &
Company Secretary and held the position of Interim Chief Executive Officer between October 2018 and April
2019. Michael was appointed to Chief Executive Officer and Managing Director on 15 April 2019 and is
supported by the Executive Team which is responsible for implementation of Board directed strategies at an
operational level.
The Monash IVF Group Limited Board Charter is available on the Monash IVF Group Limited website
Corporate Governance | Monash IVF Group
1.2 and 1.3 Board and Senior Executive Appointments
In the event of a new appointment to a director or senior executive role, appropriate probity and integrity checks,
such as experience, education, criminal record and bankruptcy history, are undertaken to ensure the individual has
an appropriate background to hold the role with Monash IVF Group Limited. Should the role be for election of a
director for the first time a comprehensive check of the candidates personal and professional history would occur
including details of any other material directorships or non-executive roles.
With the exception of the Managing Director & CEO, one third of all eligible Directors, and any other Director who
has held office for over three years since their last election, must retire in rotation at the Annual General Meeting
(AGM). This is in accordance with the Company’s Constitution. A retiring Director holds office until the conclusion
of the meeting at which he or she retires. They may stand for re-election by security holders at that meeting. The
Board may appoint a new Director to fill a casual vacancy and that Director will hold office until the close of the
next AGM, unless elected at that meeting.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo
are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by a
scheme approved under Professional Standards Legislation.
3636
62 | Monash IVF Group
37
Annual Report 2023 | 63
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Principle 1 Lay solid foundations for management and oversight (continued)
Principle 1 Lay solid foundations for management and oversight (continued)
The Board makes recommendations in respect of the election or re-election of each Director based on tenure, skills
and experience of the Director in relation to Board composition. The Remuneration and Nomination Committee
ensures that appropriate background checks take place for the appointment of a new Director. The details of
those Directors who stand for re-election will be provided in the Notice of Meeting which is sent to security holders
prior to the AGM. The Board provides security holders with all material information in its possession relevant to a
decision on whether or not to elect or re-elect a director, in addition a statement by the Board as to whether it
supports the election or re-election of the candidate and a summary of the reasons as to why the Board has taken
this view. Additionally, each Director standing for re-election makes a short presentation to security holders at the
meeting itself.
All Board members have a written agreement outlining the terms of their appointment clearly articulating the
expectations, roles and responsibilities and remuneration of their role.
All employment agreements for senior executives clearly set out their terms of appointment, remuneration and
requirements to adhere to company policies and procedures. Industry regulation and Company policy requires
police checks for employees which are undertaken prior to commencement. Employment contracts require
employees to disclose any offences that would result in an adverse police check.
1.4 Company Secretary
Mr Malik Jainudeen was appointed in the role of Company Secretary and Chief Financial Officer with Monash IVF
Group Limited in April 2019. The Company Secretary’s role and responsibility is for all matters to do with the
proper functioning of the Board and is accountable to the Board, through the Chairman of the Board.
1.5 Diversity and Inclusion Policy
Monash IVF Group recognises that its business success is a reflection of the quality of its people and is proud of its
strong diverse and inclusive workforce. The Company’s workforce is made up of individuals with a diverse set of
skills, values, experiences, backgrounds and attributes including those gained on account of their gender, age,
disability, ethnicity, marital or family status, religious or cultural background and sexual orientation. Monash IVF
Group is committed to supporting and further developing this through attracting, engaging and retaining diverse
talent as supported by a Diversity & Inclusion policy.
Monash IVF Group is a recognised employer under the Workplace Gender Equity Act 2012 and is compliant with
the requirements of the Australian Government Workplace Gender Equity Agency. Monash IVF Group was
awarded the Employer of Choice for Gender Equity Citation in March 2022 in recognition of the work undertaken
in Gender Equity.
The breakdown of gender diversity at Monash IVF Group is listed below:
Organisational Level
Non-Executive Directors
Number of Women
2
% of Women
40%
Senior Management
Team Leader
Total Staff (inc above)
12
103
867
66%
98%
92%
Target
no less than 40% male
/ 40% female / 20%
any gender
no less than 40% male /
40% female / 20% any
gender
50%
The Board recognises the high proportion of women in the workplace and acknowledges that this gender diversity
is reflective of the nature of the organisation. The Remuneration and Nomination Committee sets measurable
objectives to achieve gender diversity and Monash IVF Group achieves diversity above industry standard with no
less than 40% female (and 20% any gender) representation of Executives reporting to the CEO. Board
representation continues to be targeted at no less than 40% female (and 20% any gender) representation. These
measures were met during the year. Senior Management is defined as Executive Directors and Management
personnel in operational leadership positions generally specific to state leadership teams.
38
64 | Monash IVF Group
Monash IVF Group has in place a Flexible Work Arrangements policy to promote work/life balance and to
accommodate family care in line with the operational requirements of the Business. During FY23, 36 employees
have taken primary and secondary parental leave, utilising the Group’s generous parental leave policy. Flexible
hour working arrangements either formally and informally are widely used across Monash IVF Group.
The Diversity and Inclusion Policy is overseen by the Remuneration and Nomination Committee. The Committee has
no executive powers with regard to its findings and recommendations however is responsible for monitoring,
reviewing and reporting to the Board on the Company’s performance in respect to diversity in accordance with the
Company’s Diversity and Inclusion Policy. The Board is committed to targeting a board composition aligned to its
workforce and patient base over time. The Diversity and Inclusion Policy is available on the Monash IVF Group
Limited website Corporate Governance | Monash IVF Group.
Monash IVF Group is committed to providing a diverse and culturally inclusive work environment to ensure that all
employees are valued and safe in their workplace. Monash IVF Group provides an Equal Employment Opportunity
policy framework in relation to harassment, bullying, discrimination and grievance procedures. The policies are
available to all employees via the Company intranet. The Group also offers an employee assistance program
that provides a confidential counselling service to support employee wellbeing in the workplace. To ensure a full
understanding of respectful workplace obligations, the organisation utilises a Learning Management System, an
online learning management portal to manage and track the full compliance of all respectful workplace topics.
Monash IVF Group continued their partnership with Pride in Diversity, a national not-for-profit employer support
program for LGBTI workplace and is specifically designed to assist employers and employees with all aspects of
inclusion including awareness and education.
1.6 Director Performance Evaluation
The Remuneration and Nomination Committee Chair undertakes the process of performance reviews of the Board,
its Committees and the Chairman. Objectives of the review are to ensure the Board adheres to ASX governance
principles and to identify opportunities to improve the functioning of the Board as a whole. The focus is on the
performance of the Board as a whole and, to a lesser extent, the Board committees. The Chairman performs
individual appraisals on each director.
The annual review completed by Monash IVF Group Limited Board was undertaken in July 2023. It involved
directors completing a confidential online questionnaire covering aspects outlined in the Board Charter. The results
were aggregated and discussed by the Board to inform areas or opportunities for improvement.
1.7 Senior Executive Evaluations
Monash IVF Group Limited has an annual Performance Review Policy for all senior executives and managers as
stated in the Board Charter. Senior executive and manager performance is reviewed by the CEO against KPIs
which are both financial and non financial in nature. The performance evaluation process has been undertaken in
accordance with this policy for the current financial year. The Remuneration and Nomination Committee has
oversight of this process.
The Chairman of the Board performs the CEO performance review against annual key performance indicators.
Michael Knaap’s performance was formally reviewed in August and recommendations as a result were taken to
the Board. The Board oversees and monitors the key performance indicators and strategic plan for the Group
which also allows the Board to monitor the performance of senior executives outside the annual review process.
Principle 2 Structure of the Board to be effective and add value
The Constitution of the Company provides that the number of Directors must at any time be no more than ten and
no less than three members. The Monash IVF Group Limited Board currently consists of seven directors, five
independent and two non independent members. The Board charter prescribes that the Chair of the Board must
be independent and the Board should consist of individuals who contribute a mix of skills and a diversity of
professional backgrounds. Further information on the Board members is available in the Directors Report.
39
Annual Report 2023 | 65
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Principle 2 Structure of the Board to be effective and add value (continued)
Principle 2 Structure of the Board to be effective and to add value (continued)
2.2 Board Skill Matrix
On establishing the Board in 2014 the desirable skills, attributes and experience required was considered in
searching for potential Board members. The below skill matrix outlines the Board of Director skill set during FY23:
Monash IVF Group Limited believes the current Board of seven members adequately allows its members to carry
out its responsibilities without unnecessarily debiasing its effectiveness with an excessive number that can hinder
individual engagement and involvement of Board members. To add efficiency to the Board, two committees are
in-place; the Remuneration and Nomination Committee and the Audit and Risk Committee. The Board Charter
prescribes that all committee members be Independent Directors.
2.1 Remuneration and Nomination Committee
The Remuneration and Nomination Committee is governed by the Remuneration and Nomination Committee Charter
as found on the Monash IVF Group Limited website at Corporate Governance | Monash IVF Group.
The Remuneration and Nomination Committee consist of four independent Directors of the Board:
• Ms Zita Peach (Chair)
• Mr Richard Davis
• Mr Josef Czyzewski
• Ms Catherine West
The Committee met 4 times with all Committee members in attendance.
The Committee assists the Board by reviewing and making recommendations to the Board in relation to:
•
•
•
•
•
•
•
•
•
•
•
•
•
the Company's remuneration policy;
Board succession issues and planning;
Board member and re-election of members to the Board and its committees;
Director induction and continuing professional development programs for Directors;
remuneration packages of senior executives;
non-executive Directors and executive Directors, equity-based incentive plans and other employee benefit
programs;
Company superannuation arrangements;
the Company's recruitment, retention and termination policies;
succession plans of the CEO, senior executives and executive Directors;
the process for the evaluation of the performance of the Board, its Board Committees and individual
Directors;
the review of the performance of senior executives;
review of the Company's remuneration policies and packages; and
the size and composition of the Board and strategies to address Board diversity and the Company's
performance in respect of the Company's Diversity and Inclusion Policy, including whether there is any
gender or other inappropriate bias in remuneration for Directors, senior executives or other employees.
Monash IVF Group Limited believe the current Director skill set is adequate to ensure an appropriate and diverse
mix of backgrounds, expertise, experience and qualifications exist to assist with being able to understand and
effectively advice on Group strategy and growth.
66 | Monash IVF Group
40
41
Annual Report 2023 | 67
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Principle 2 Structure of the Board to be effective and to add value (continued)
2.3, 2.4 and 2.5 Board members, roles and independence
A summary of the Board members, their roles, independence and appointment dates are as follows:
Director
Mr Richard Davis
Position
Independent Chairman
Independent
Yes
Mr Josef Czyzewski
Independent non-executive Director
Ms Zita Peach
Independent non-executive Director
Mr Neil Broekhuizen
Independent non-executive Director
Ms Catherine West
Mr Michael Knaap
Independent non-executive Director
CEO and Managing Director
Dr Richard Henshaw
Executive Director
Yes
Yes
Yes
Yes
No – CEO and Managing
Director
No – Fertility Specialist
with Monash IVF Group
Limited
Appointment Date
4/6/2014
4/6/2014
12/10/2016
4/6/2014
8/9/2020
15/4/2019
30/4/2014
The Board Charter outlines that at least half of the Board should be independent directors, one of whom is the
Chairman. A director is deemed to be “independent” if free of any business or other relationship with the Company
that could materially interfere with, or could reasonably be perceived to interfere with, the exercise of unfettered
and independent judgement.
The Board has assessed, using the criteria set out in the ASX Corporate Governance Principles and Recommendation,
the independence of non-executive directors in light of their interests and relationships and considers at least half
to be independent. The independence status and length of service of each director is outlined in the table above.
The percentage of Board members considered independent was 71%.
Mr Richard Davis was appointed Monash IVF Group Limited Chairman in June 2014. He is a non-executive
Independent Director. Mr Davis, in his role as Chair, provides leadership to the Board and advice and support to
the CEO. The Chair of the Board is responsible for overseeing Board dynamics and ensuring all directors contribute
effectively and constructively to Group meetings and strategic agendas.
2.6 Director Induction and Professional Development
Monash IVF Group Limited has a comprehensive induction process for Directors and senior executives. This induction
includes meetings with senior management and staff to gain an understanding of the core business, strategy,
financial, operational and risk management matters and factors relevant to the sectors and environments in which
the Company operates as well as visits to laboratories and clinics to gain a more in depth understanding of the
business.
The Chairman periodically reviews whether there is a need for Directors to undertake professional development
to maintain the skills and knowledge needed to perform their role as Directors effectively. Directors are active in
undertaking professional development opportunities for the purpose of development and maintenance of their
skills. The Board and its Committees are provided with updates and information from both management and
external experts on various topics relevant to the Company’s circumstances, including emerging business and
governance issues relevant to the Company and material developments in laws and regulations. The Board and
individual Directors attend at operational sites, meet staff in operations and receive presentations from
management across the Group’s operations. Board members have been continuously informed via research papers
and presentations, financial and business results and discussion involving market strategic initiatives contributing to
the continued professional development of the Board.
Principle 3 Instill a culture of acting lawfully, ethically and responsibly
3.1 Organisational values
The Board and senior executives are firmly committed to ensuring that all employees observe high standards of
lawful, ethical behaviour and conduct. Setting the cultural tone for the organisation, Monash IVF Group’s core values
are as follows:
Our Principles
Care
Promotes a team environment that values, encourages and supports differences
Genuinely cares about people
Is available and ready to help
Demonstrates real empathy with the joys and pains of others
Collaborate
Build strong formal and informal, internal and external networks across a variety of functions and locations
Partners with others to achieve quality outcomes and share in the successes
Values, calls upon and utilises the experience and expertise of others
Shares information for the benefit of individual, team, clinic and or organisation
Communicate
Provides the information people need to know, to do their jobs and to feel valued as a member of
the team, clinic and organisation
Utilises different types of communication to deliver timely and meaningful messages
Has the patience to hear people out
Commitment
Is dedicated to meeting the expectations and requirements of patients, clinicians and
internal stakeholders
Persists in accomplishing objects despite obstacles and setbacks
Pushes self and others to achieve
Create
Challenges the traditional way of thinking and adopts change where required
Shows initiative and can spot and seize opportunities
Empowers others to bring creative ideas and suggestions to life
Monash IVF Group’s performance review process requires assessment of the extent to which personnel have
demonstrated behaviour consistent with these values. The values also form the foundation for the monthly and
annual employee CUDOS Awards, recognising and celebrating outstanding employee behaviour in line with these
values.
The principles are provided with sufficient guidance to enable personnel to make decisions consistent with the
Board’s risk appetite and core values.
3.2 Code of Conduct and whistleblower program
Monash IVF Group Limited recognises the need to observe the highest standards of corporate practice, business
conduct and responsible decision making. Accordingly, the Board adheres to a formal Code of Conduct which
outlines Monash IVF Group Limited policies on various matters including ethical conduct, business and personal
conduct, compliance, privacy, security of information, financial integrity and conflicts of interest. This Code clearly
states the standard of responsibility and ethical conduct expected of staff, directors or doctors engaged by the
Company. The Code recognises the numerous legislative and compliance matters that affect the business.
68 | Monash IVF Group
42
43
Annual Report 2023 | 69
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Principle 3 Instill a culture of acting lawfully, ethically and responsibly (continued)
Principle 4 Safeguard integrity in corporate reporting (continued)
The Code of Conduct promotes ethical and responsible decision making by directors, contractors and employees.
The Code also gives direction in the avoidance of conflicts of interest and mandates high standards of personal
integrity, objectivity and honesty in the dealings of all Monash IVF Group Limited Board members and staff,
detailing guidelines to ensure the highest standards are maintained. Monash IVF Group holds all staff to act
according to this code to maintain standards in confidentiality and general behaviour. The code is provided to all
staff as part of the Group induction process and compliance is reviewed regularly. The Board or Audit and Risk
Management Committee are informed of any material breaches of the entity’s code of conduct.
3.3 Whistleblower policy
The Company has a Whistleblower policy which has been communicated to all Company personnel and published
on the Company’s website.
The Whistleblower Policy promotes and supports the reporting of matters of concern and suspected wrongdoing,
such as dishonest or fraudulent conduct, breaches of legislation and other conduct that may cause financial loss or
be otherwise detrimental to its reputation or interests. The Policy sets out the approach to disclosure, investigation
and reporting and outlines the protection to be afforded to those who report such conduct against reprisals,
discrimination, harassment or other disadvantage resulting from their reports. All disclosures received under the
Whistleblower Policy are reported to the Audit and Risk Management Committee with details of investigations
completed.
Monash IVF Group Limited Code of Conduct policy and Whistle Blower policy can be found in full on our website
under Corporate Governance | Monash IVF Group.
3.4 Anti-Bribery and Corruption policy
The Company has an Anti-Bribery and Corruption policy which has been communicated to all Company personnel
and published on the Company’s website.
The Anti-Bribery and Corruption policy describes the standards of ethical conduct and behaviour required of all
Individuals within the Monash IVF Group, noting that all representatives must act within the law and not engage in
corrupt practices or acts of bribery that expose Monash IVF Group, its employees and clinical partners to the risks
of prosecution, fines and imprisonment, as well as endangering Monash IVF Group’s reputation. Where these
standards are not met, then appropriate disciplinary action may be taken. Monash IVF Group will apply a zero-
tolerance approach to acts of bribery and/or corruption by any Individual or third-party representative. The Board
or Audit and Risk Management Committee are informed of any material breaches of the entity’s Anti-Bribery and
Corruption policy.
Monash IVF Group Limited Anti-Bribery and Corruption policy can be found in full on our website under Corporate
Governance | Monash IVF Group.
Principle 4 Safeguard integrity in corporate reporting
4.1 Audit and Risk Management Committee
The Audit and Risk Management Committee for Monash IVF Group Limited are responsible for supervising the
process of corporate governance, financial reporting and risk management, internal control, continuous disclosure,
non-financial risk monitoring and external audit. The Committee’s role, as outlined in the Audit and Risk
Management Committee Charter, is to monitor the Group’s compliance with laws and regulations and adherence
to the Group Code of Conduct and to promote discussion with regard to risk between Board, management and the
external auditor.
Monash IVF Group Limited engages the services of an external auditor; who’s independence and performance is
monitored and reviewed by the Audit and Risk Management Committee. The external auditors and Audit & Risk
Committee and Audit Chair met on a number of occasions independently of Management.
The Audit and Risk Management Committee consists of three non-executive Independent Directors with experience
and qualifications in financial management as outlined in the Audit and Risk Management Committee Charter.
Current members of the Committee are:
• Mr Josef Czyzewski (Chair)
• Mr Richard Davis
• Mr Neil Broekhuizen
The Committee met four times during the year.
Details of the Committee members’ experience and technical expertise are set out in the directors’ biographies
which can be viewed on the Board of Directors pages in the latest Annual Report. The Audit and Risk Management
Committee Charter is available on the Monash IVF Group Limited website at Corporate Governance | Monash IVF
Group.
4.2 Financial Statement Approval
Monash IVF Group Limited CEO and Managing Director, Mr Michael Knaap, and CFO and Company Secretary,
Mr Malik Jainudeen, reviewed and verified that the half year and full year reporting statements as listed in reports
to the ASX and shareholders are true and accurate. A declaration to that effect has been signed by both to
declare that the financial records have been entered and maintained as per the Corporations Act (2001)
accounting standards and they give a fair and true view of the financial position and performance of Monash IVF
Group Limited. Further a detailed questionnaire is completed by senior operational, administrative and financial
management attesting to the validity and integrity of the processes that they control prior to the approval of the
financial statements. These questionnaires are reviewed by the Audit and Risk Management Committee.
4.3 Process for verifying Periodic Corporate Reports
Monash IVF Group Limited is committed to providing security holders and other external stakeholders with timely,
consistent and transparent corporate reporting. The process which is followed to verify the integrity of periodic
corporate reports is tailored based on the nature of the relevant report, its subject matter and where it will be
published. Monash IVF Group Limited seeks to adhere to the following general principles with respect to the
preparation and verification of its corporate reporting:
•
•
•
•
periodic corporate reports prepared by, or under the oversight of, the relevant subject matter expert
for the area being reported on;
the relevant report is in compliance with any applicable legislation or regulations;
the relevant report reviewed (including any underlying data), with regard to ensuring it is not
inaccurate, false, misleading or deceptive; and
where required by law or by Monash IVF Group policy, relevant reports authorised for release by the
appropriate approver required under that law or policy.
Consistent with these principles, the non-audited sections of the Annual Report and Corporate Governance
Statement for the reporting period were prepared by the relevant subject matter experts and reviewed and
verified by relevant senior executives and senior managers prior to Board approval. ASX announcements (other
than administrative announcements) during the Reporting Period were also reviewed and approved in accordance
with the Continuous Disclosure policy, which includes review by the Board, CEO and CFO prior to publication.
Principle 5 Make timely and balanced disclosure
5.1 Continuous Disclosure
Monash IVF Group Limited is committed to effective communication with its investors and the wider community. The
Company strives to ensure that all Stakeholders, market participants, patients and the wider community are
informed in a timely manner of its activities and performance in line with its Continuous Disclosure Policy.
70 | Monash IVF Group
44
45
Annual Report 2023 | 71
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Principle 5 Make timely and balanced disclosure (continued)
This policy complies with the continuous disclosure obligations under the Corporation Act (2001) and the ASX Listing
Rules and as much as possible seeks to achieve and exceed best practice to promote investor confidence in Monash
IVF Group Limited.
Continuous disclosure principles and requirements are well understood by the Monash IVF Group Limited Company
Secretary and the Board of Directors and are in place to ensure all relevant information, especially of a sensitive
nature, is made available in a timely manner. Any matters requiring disclosure are raised for consideration
whenever necessary. The Monash IVF Group Limited website is structured to provide shareholders and the
community with easy access to information.
5.2 and 5.3 Material market announcements and presentations
The Company Secretary ensures that the Board receives copies of all material market announcements promptly
after they have been made and ensures that any new investor or analyst presentation is released on the ASX
before the presentation is given. The Continuous Disclosure Policy can be found on the Monash IVF Group website
at Corporate Governance | Monash IVF Group.
Principle 6 Respect the rights of security holders
6.1 Communication with Shareholders
Monash IVF Group Limited ensures shareholders are fully informed of its governance processes and are notified of
any major developments affecting the Group. In line with the Monash IVF Group Limited Communication Policy the
Company's website is considered to be the primary means to provide information to all stakeholders. It has been
designed to enable information to be accessed in a clear and readily accessible manner including:
•
•
•
•
•
•
•
•
Company information including Board members;
A ‘Corporate Governance’ landing page with documents including the Company's codes, policies and
charters;
all announcements and releases to the ASX;
copies of presentations to shareholders, institutional investors, brokers and analysts;
any media or other releases;
all notices of meetings and explanatory material;
annual and half yearly reports;
any other relevant information concerning non-confidential activities of the Company including business
developments.
The Company website can be found at www.monashivfgroup.com.au where information can be clearly located
under heading:
Home – homepage with Company history and overview
About – information on Our People, Collaborations and Career Opportunities
•
•
• Our Business – information on brands and operating locations
•
•
Innovations in Research – lists current and published research and our scientific firsts
Investor Centre
6.2 Investor Relations
In addition to the Company website, there is a dedicated Investor Relations page found at Corporate Governance
| Monash IVF Group which provides investors and shareholders with information on Monash IVF Group Limited
Board members, Announcements, Corporate Governance documents, Results presentations and webcasts. The
Investor Centre also acts as a portal for two way communication between the Company and investors with links to
a ‘Contact Us’ page which allows individuals to email enquiries and also provides postal address and contact
number to allow access to the Company. The Communication Policy can be located at: Corporate Governance |
Monash IVF Group
Principle 6 Respect the rights of security holders (continued)
6.3 and 6.4 Attendance at Company meetings
As cited in the Monash IVF Group Limited Communications Policy, the Company encourages full participation of
Shareholders at the Annual General Meeting which provides an excellent opportunity for the Company to provide
information to its shareholders and to receive Shareholder feedback.
The next Annual General Meeting is planned to be held on 28 November, 2023.
In the event Shareholders are not able to attend the meetings, questions can be directed to the Group for
addressing at the Annual General Meeting and the presentations and webcasts are promptly added to the website.
These can be found at Presentations and Webcasts | Monash IVF Group.
All resolutions put to the Annual General Meeting will be decided by way of a poll. Shareholders are also able to
direct any questions via the Group’s share registry provider, Link Market Services.
6.5 Electronic Communication
The Company recognises that electronic communication is often a more efficient and more desired form of
communication. Monash IVF Group Limited Communications Policy addresses this and accordingly Shareholders
are given the option to communicate with the Company Share Registry electronically.
The Company's email system allows staff and stakeholders to communicate with ease with Management and staff
of the Company. Doctors, employees and other stakeholders have access to this system and are encouraged to
use it to improve the flow of information and communication generally.
The Monash IVF Group Limited Communications Policy can be located at Corporate Governance | Monash IVF
Group.
Principle 7 Recognise and Manage Risk
The Monash IVF Group Limited Board, primarily through the Audit and Risk Management Committee, reviews and
manages risk areas for the Group. Refer to section 4.1 for further information.
7.1 Audit and Risk Management Committee
The identification and appropriate management of risks is an important priority for the Monash IVF Group Limited
Board. ‘Risks’ are identified as any possible outcomes that could materially impact the Company's financial
performance, assets, reputation, people or the environment.
Risk recognition and management are viewed by the Company as integral to its objectives of creating and
maintaining shareholder value, and to the successful execution of the Company's strategies. The Audit and Risk
Management Committee oversees and governs risk management strategy and policy, to monitor risk management
and to establish procedures which seek to provide assurance that major business risks are identified, consistently
assessed and appropriately addressed.
The Committee abides by the Audit and Risk Management Committee Charter to assist the Board in fulfilling its
corporate governance and oversight responsibilities in actively identifying risks and developing appropriate
mitigating actions. The Committee adheres to the Risk Management Policy for the business which highlights the risks
relevant to Company operations and oversees that the entity is operating with due regard to the risk appetite set
by the Board.
Monash IVF Group Limited’s Audit & Risk Management Committee Charter can be found on the website at:
Corporate Governance | Monash IVF Group.
This Charter prescribes that the Audit and Risk Management Committee consist of at least three Board Directors
that are non-executive independent Directors.
72 | Monash IVF Group
46
47
Annual Report 2023 | 73
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Principle 7 Recognise and Manage Risk (continued)
7.2 Risk Management
Monash IVF Group provides a framework for risk management which supports the achievement of our strategic
and operational objectives. We are committed to maintaining an organisational philosophy and culture which
ensures that effective risk management is integrated into day to day activities.
The Group maintains a Risk Register that documents all identified risks, lists appropriate preventative actions to
mitigate risks, reviews process of risk reduction and nominates responsible persons who take ownership of the risk
strategy process. The Risk Register is reviewed by the Risk Owners, Leadership teams and Executive Team help
determine whether risks are still current, controls are effective and identify any emerging risks, which are then
flagged to the Audit and Risk Management Committee. A review of Risk Management is undertaken annually.
Specialist software used to record adverse events and feedback ensures that exposures to risk are continually
monitored to ensure they are adequately understood and managed. This system of reporting also allows for formal
monitoring of patient safety, identification training needs and informs clinical policy decision making.
7.3 Internal Audit
Monash IVF Group Limited does not have a designated Internal Audit Function at present but the Group performs
internal audit activities from a clinical and operational perspective to ensure compliance with various external
accreditation requirements.
The CEO and CFO have key responsibility in ensuring that internal controls are in place, operating effectively and
reviewed for continual improvement. As part of the various accreditation and licencing processes undertaken by
the business, key internal audit functions are undertaken. These audits are then made available to accreditation
and licensing bodies. Certain financial internal controls are tested by KPMG as part of their financial statement
audit procedures. The Group believes internal controls implemented such as segregation of duties, delegation
processes, treasury controls and structured approval processes counter many risks. The Group will continue to assess
whether an independent third party internal audit function or designated in-house internal audit function is required.
7.4 Risk Exposure
Monash IVF Group Limited provides assisted reproductive services in Australia and South East Asia and specialist
women’s imaging services in Australia. The Group is committed to performing services in an open and transparent
environment and in a manner that is honest and ethical. The Group embraces responsibility for corporate actions
and encourages a positive impact on the environment and stakeholders including patients, employees, investors
and the community.
Since its early pioneering days in assisted reproductive treatment, resulting in the first IVF pregnancy in 1973,
Monash IVF Group Limited has played an important role in the local communities it serves and society at large. Its
focus on evidenced based fertility care provides the opportunity to commit resources to scientific research, clinical
teaching and training. The Group’s services are offered to all and do not discriminate, including nature and
complexities of infertility.
From an ethical and social perspective, Monash IVF Group Limited and its subsidiary companies ensure national
regulation and state legislation drives the standards of care to ensure it protects its patients, donors and any
children born as a result of treatment provided by the Group.
All Monash IVF Group facilities meet the appropriate standards for accreditation including:
•
•
•
Assisted reproductive treatment sites in Australia are accredited with the Reproductive Technology
Accreditation Committee (RTAC) and the Group ensures appropriate documentation is held by sites,
doctors, nurses and scientists. This accreditation incorporates components covering ethics and safety in
practice and management of adverse events.
Day surgeries are accredited with National Safety and Quality Health Service (NSQHS) standards which
ensure quality standards are consistent with an exceptional standard of care expected by consumers in
health facilities.
Diagnostic laboratories are accredited to ISO 15189 and relevant NPAAC Guidelines.
48
74 | Monash IVF Group
Principle 7 Recognise and Manage Risk (continued)
•
•
Diagnostic imaging (ultrasound) facilities are accredited with the Department of Health Diagnostic Imaging
Accreditation Scheme (DIAS).
The Group’s South East Asian clinics whilst not legally requiring the same level of regulation, operates to
the same standards having been externally accredited to the international RTAC standards.
The Group recognises that its staff and Doctors are instrumental to the success of the Organisation. Comprehensive
recruitment, credentialing, induction, training and development programs are designed to attract and retain staff
equipped to deliver outstanding customer care. Staff actively participate in the continual improvement of the
Group’s internal policies and processes and are encouraged to participate in innovation and research.
The Monash IVF Group Workplace Health and Safety Policy framework covers policies on general safety in the
workplace. Monash IVF Group Limited recognises protecting the environment is a critical issue and a key
responsibility of the Business and corporate community. Monash IVF Group is an organisation that is not involved
in manufacturing or resource extraction and hence it considers its environmental footprint to be small.
The Group adopts a philosophy of clinical excellence in an environment of safe and supportive service provision.
No material environmental or social sustainability risks have been identified. The Group adopts the approach of
a responsible corporate citizen with regard to the management of waste and hazardous materials. The Group is
not a significant consumer of electricity, water or gas and accordingly, the opportunities for material reductions in
utility consumption are limited.
The Quality Management System in place in each laboratory supports the review and monitoring of quality of
product from suppliers. New consumables undergo a full quality screening process and products are thoroughly
evaluated to review where and how products are manufactured before being used in the laboratories. All products
are reviewed formally on an annual basis to ensure they maintain quality standards and informally on a day to
day basis. Currently all Monash IVF Group clinics use predominantly products from the top two suppliers of
laboratory products in Australia in order to maintain consistency in quality.
The Group takes cyber security and its potential consequences extremely seriously. The Group has comprehensive
security arrangements in place to isolate attacks on its systems and ensure that attempted intrusions are identified
and viruses are not spread across the Group’s network or systems. The Group’s IT systems operate safely and
securely as demonstrated by a recent cyber-attack that failed to propagate through our systems. Our preventative
controls isolated the attack to a comparatively small subset of system resources, while we hardened our policies
and settings to stop this and future attacks from coming through. Numerous levels of redundancy and backup are
built into the IT systems providing a high degree of system availability and protection of data. The Group
periodically engages an independent third party to review the Group’s cyber security risk exposure and has made
the strategic decision to invest significantly in this field by forging a partnership with a leading player in the cyber
industry. This alliance not only symbolizes our deep dedication to robust and sophisticated security protocols, but
also provides us access to cutting-edge technology and expertise, ensuring our defences stay ahead of rapidly
evolving threats.
Economic risk continues to be potentially material to Monash IVF Group Limited. Our services in Australia are
indirectly funded to a significant extent by the Australian Federal Government through the Medicare Benefit
Schedule and Extended Medicare Safety Net. Any change to the funding arrangements could lead to a reduction
in revenue affecting financial performance and sustainability of the Group. Market contraction and changes to
market dynamics can significantly affect business outcomes and is a risk for the Group. Market competitiveness
has heightened in recent years with the introduction of low cost providers and greater competition. One area
where Monash IVF Group Limited has been integral in leading the industry has been in advocating for governing
bodies to be more transparent in reporting outcomes of treatments to allow patients to be better informed before
commencing treatment. Tightening industry standards on consistency of data gathering, outcome reporting and
transparency of results to the community will lead to improved outcomes for patients and the industry generally.
49
Annual Report 2023 | 75
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Corporate Governance Statement continued
Corporate Governance Statement
Principle 8 Remunerate fairly and responsibly
8.1 Remuneration and Nomination Committee
As outlined above under ‘Structure the Board to add value’ Monash IVF Group Limited has a combined
Remuneration and Nomination Committee which assists the Board with discharging its responsibilities to Shareholders
with regard to developing and monitoring remuneration policies and practices for Directors, Senior Executives and
employees.
The Committee works under the guidance of the Remuneration and Nomination Committee Charter and
Remuneration Policy. All members of the Committee are non-executive independent Directors.
Details of the Committee members’ experience and technical expertise are set out in the directors’ biographies
which can be viewed on the Board of Directors pages in the latest Annual Report. Details of the number of times
the Committee met throughout the period and individual attendances of the members can be viewed in the Directors
Report in the latest Annual Report.
8.2 Remuneration of executive and non-executive directors
Under the guidance of the Remuneration and Nomination Committee and the Remuneration Policy the Monash IVF
Group Limited Board has established a framework for remuneration that is designed to ensure consistent and
reasonable remuneration policies and practices are observed which optimise the attraction and retention of
directors and management and fairly rewards Directors and senior management for positive performance.
Monash IVF Group Limited remuneration practices for Executive appointments are expanded on in the
Remuneration Report. The Monash IVF Group Limited Remuneration Policy can be found on the Group website at:
Corporate Governance | Monash IVF Group.
8.3 Equity Based remuneration
The Board may award incentive payments to the CEO, CFO and Senior Executives in the form of equity. The
Corporations Act prohibits key management personnel (or closely-related parties) of an ASX-listed Australian
company from entering into an arrangement that would limit their exposure to an element of their remuneration
subject to a holding lock. Equity-based awards are made on the condition that Corporations Act requirements are
complied with.
Directors and officers cannot buy and sell securities when in possession of price sensitive information and during at
minimum the certain periods, referred to as Prohibited Periods which include the period from the end of the
Company’s financial year (30 June) until the announcement of the Company’s full year results to the ASX and the
period from the end of the Company’s half year (31 December) until the announcement of the Company’s half year
results to the ASX.
Approval from the Chair is required prior to any transacting in shares contemplated by directors and Managing
Director, and approval from the Managing Director for any transacting contemplated by the CFO and Company
Secretary.
A copy of the Securities Trading Policy is available on the Company’s website. Directors and senior executives are
not permitted to hedge their exposure to Company securities. Employees, directors and senior executives are not
permitted to use Company securities as collateral in any financial transaction, including margin loan arrangements.
Consolidated Statement of Profit or Loss and Other
Monash IVF Group Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Comprehensive Income
for the year ended 30 June 2023
for the year ended 30 June 2023
Consolidated
93
Revenue from services
Employee benefits expense
Clinician fees
Raw materials and consumables used
IT and communications expense
Depreciation expense
Amortisation expense
Property expense
Marketing and advertising expense
Professional and other fees
Other expenses
Operating profit
Net finance costs
Profit before tax
Income tax expense
Net profit after tax for the year
Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss:
Cash flow hedges
Tax on cash flow hedges
Exchange difference on translation of foreign operations
Other comprehensive income/(loss) for the year, net of tax
Total comprehensive income for the year
Profit attributable to:
Owners of the Company
Non-controlling interests
Profit for the year
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income for the year
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
Note
2.4,2.5
2.6
4.5
1.5
2023
$’000
213,590
(74,133)
(38,305)
(22,399)
(5,891)
(12,879)
(2,464)
(5,921)
(6,920)
(7,277)
(4,283)
33,118
(3,279)
29,839
(7,873)
21,966
305
(92)
9
222
22,188
21,839
127
21,966
22,061
127
22,188
2022
$’000
192,294
(66,877)
(33,621)
(19,787)
(4,464)
(12,354)
(2,434)
(5,525)
(6,434)
(7,509)
(4,920)
28,369
(2,147)
26,222
(7,720)
18,502
-
-
(194)
(194)
18,308
18,406
96
18,502
18,212
96
18,308
1.4
1.4
5.6
5.6
4.7
4.7
The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes.
76 | Monash IVF Group
50
51
Annual Report 2023 | 77
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Consolidated Statement of Financial Position
Monash IVF Group Limited
for the year ended 30 June 2023
Consolidated Statement of Financial Position
for the year ended 30 June 2023
Consolidated Statement of Changes in Equity
for the year ended 30 June 2023
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Total current assets
Non current assets
Equity accounted investment
Trade and other receivables
Plant and equipment
Right of use assets
Intangible assets
Derivative financial instruments
Deferred tax asset
Total non current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Current tax liabilities
Contingent consideration
Employee benefits
Total current liabilities
Non current liabilities
Borrowings
Lease liabilities
Contingent consideration
Employee benefits
Deferred tax liability
Total non current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves
Profits reserve
Retained earnings
Total equity attributable to Owners of the Company
Non-controlling interests
Total equity
Note
4.6
2.1
2.2
2.1
2.4
2.5
2.6
4.4
1.5
2.3
5.4
3.1
4.3
5.4
3.1
1.5
4.1
Consolidated
2023
$’000
8,005
15,503
6,430
29,938
1,277
166
50,372
59,014
280,452
305
370
391,956
421,894
21,196
6,332
1,230
5,710
12,035
46,503
38,866
54,841
5,200
1,410
-
100,317
146,820
275,074
2022
$’000
7,874
12,516
5,254
25,644
1,052
169
30,394
64,666
258,893
-
355,174
380,818
19,237
7,131
457
483
10,867
38,175
9,764
60,335
488
1,432
731
72,750
110,925
269,893
506,786
(136,207)
65,357
(162,735)
273,201
1,873
275,074
506,786
(136,796)
60,662
(162,735)
267,917
1,976
269,893
The consolidated statement of financial position should be read in conjunction with the accompanying notes.
78 | Monash IVF Group
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T
Annual Report 2023 | 79
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Consolidated Statement of Cash Flows
Consolidated Statement of Cash Flows
for the year ended 30 June 2023
for the year ended 30 June 2023
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
for the year ended 30 June 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Cash generated from operations
Income taxes paid
Net cash flows generated from operating activities
Cash flows from investing activities
Payments for plant and equipment and intangible assets
Payments for business acquisitions (including transactions costs)
Net cash flows used in investing activities
Cash flows from financing activities
Proceeds of borrowings
Repayment of borrowings
Interest paid on borrowings
Payments of lease liabilities
Dividends paid
Net cash flows used in financing activities
Total cash flows from activities
Cash and cash equivalents at the beginning of the year
Effects of exchange rate changes on foreign currency cash flows
and cash balances
Cash and cash equivalents at end of the year
Note
4.6
1.3
4.6
Consolidated
2023
$’000
2022
$’000
214,039
(165,497)
48,542
(9,420)
39,122
190,684
(148,963)
41,720
(9,831)
31,889
(27,789)
(12,719)
(40,508)
(11,763)
(3,399)
(15,162)
42,000
(13,000)
(1,170)
(9,178)
(17,144)
1,508
26,500
(18,129)
(613)
(8,634)
(16,753)
(17,629)
122
(902)
7,874
9
8,005
8,761
15
7,874
The consolidated statement of cash flows should be read in conjunction with the accompanying notes.
Contents
Section 1:
Our financial performance
Revenue and Expenses
1.1
1.2 Operating segments
Dividends
1.3
Earnings per share
1.4
Taxation
1.5
Section 3:
Our people
3.1
3.2
3.3
Employee benefits
Share-based payments
Key management personnel
Section 2:
Our operating asset base
2.1
2.2
2.3
2.4
2.5
2.6
Trade and other receivables
Inventory
Trade and other payables
Plant and equipment
Right of Use Assets
Intangible assets
Section 4:
Our funding structure
4.1
4.2
4.3
4.4
4.5
4.6
Share capital and reserves
Financial risk management
Borrowings
Derivative financial instruments
Net finance costs
Cash and cash equivalents
Section 5:
Our business portfolio
Section 6:
Other disclosures
5.1
5.2
5.3
5.4
5.5
Controlled entities
Investments accounted for using the equity method
Parent entity
Acquisitions and disposals
Deed of cross guarantee
6.1
6.2
6.3
6.4
6.5
6.6
Auditors’ remuneration
Events occurring after the reporting period
Commitment and contingencies
Reporting entity
Basis of preparation
New standards and interpretations
80 | Monash IVF Group
54
55
Annual Report 2023 | 81
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
Section 1
Our Financial Performance
This section provides information that is most relevant to understanding the financial performance of
the Group during the financial year and, where relevant, the accounting policies applied and the
critical judgements and estimates made.
1.1 Revenue and Expenses
1.4 Earnings per Share
1.2 Operating Segments
1.5 Taxation
1.3 Dividends
1.1 Revenue and Expenses
Revenue recognition
consideration received or receivable.
Rendering of services
Revenue is recognised when performance obligations have been satisfied, recovery of the consideration is
probable and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the
Revenue from rendering of services is recognised on completion of services provided. Revenue is recognised when
the customer has consumed the benefits of the service, whether on completion of a medical procedure, on supply
of drugs, or on completion of analytical tests. If payments received from patients exceed the revenue recognised,
the difference is recognised as deferred revenue.
Fees for fertility treatment paid in advance of performing the service are recognised as deferred revenue until
the time the service is rendered to the customer when the fees are recognised as revenue.
Deferred revenue
1.2 Operating segments
The Group determines and presents operating segments based on information that internally is provided to and
used by the Chief Executive Officer, who is the Group’s Chief Operating Decision Maker (CODM). An operating
segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.
The financial results of each operating segment are regularly reviewed by the Group’s Chief Executive Officer in
order to make decisions about resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available.
Segment results that are reported to the Chief Executive Officer include items directly attributable to a segment,
as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets,
head office expenses and income tax assets and liabilities. Segment capital expenditure is the total cost incurred
during the period to acquire property, plant and equipment and intangible assets other than goodwill.
The basis of inter-segmental transfers is market pricing. Results are calculated before consideration of net
borrowing costs and tax expense.
Our Pillars
Board of Directors
Management Team
Identification of reportable operating segments
The two geographic segments being Australia and International reflect Monash IVF Group’s reporting structure to
the CODM. Monash IVF Group considers that the two geographic segments are appropriate for segment reporting
purposes under AASB 8 “Operating Segments”. These segments comprise the following operations:
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
- Monash IVF Group Australia: provider of Assisted Reproductive Services, Ultrasound and other related services.
for the year ended 30 June 2023
- Monash IVF Group International: provider of Assisted Reproductive Services in South East Asia.
1.2 Operating segments (continued)
FY23 Financial Report
Financial Overview
Segment results
2023
Total revenue – external
Underlying EBIT (before non-recurring items)(1)
Acquisition costs (1)
Commissioning costs (1)
Fertility Solutions Earn Out(1)
Reported EBIT
Net finance costs
Profit before income tax expense
Income tax expense
Profit for the year
Depreciation and amortisation expense
Segment assets
Acquisition of plant and equipment and intangibles
Segment liabilities
2022
Total revenue – external
Underlying EBIT (before non-recurring items)(2)
Acquisition costs (2)
Commissioning costs (2)
Fertility Solutions Earn Out (2)
Reported EBIT
Net finance costs
Profit before income tax expense
Income tax expense
Profit for the year
Depreciation and amortisation expense
Segment assets
Acquisition of plant and equipment and intangibles
Segment liabilities
Monash IVF
Group Australia
$’000
200,814
36,192
(1,879)
(2,898)
(40)
31,375
(3,252)
28,123
(7,075)
21,048
(14,337)
405,783
48,407
138,513
Monash IVF
Group
Australia
$’000
182,098
30,578
(2,142)
(1,855)
(395)
26,186
(2,110)
24,076
(7,062)
17,014
(14,073)
365,305
11,759
104,235
Monash IVF
Group
International
$’000
12,776
1,896
-
(153)
-
1,743
(27)
1,716
(798)
918
(1,006)
16,111
1,345
8,307
Monash IVF
Group
International
$’000
10,196
2,831
-
(648)
-
2,183
(37)
2,146
(658)
1,488
(715)
15,513
499
6,690
Total
56
$’000
213,590
38,088
(1,879)
(3,051)
(40)
33,118
(3,279)
29,839
(7,873)
21,966
(15,343)
421,894
49,752
146,820
Total
$’000
192,294
33,409
(2,142)
(2,503)
(395)
28,369
(2,147)
26,222
(7,720)
18,502
(14,788)
380,818
12,258
110,925
(1) Non-regular items include transaction costs on acquisition opportunities ($1,878,575 pre-tax), commission costs including
lease expenditures ($3,051,416 pre-tax) and Fertility Solutions Earn Out Fair Value adjustment ($40,185).
(2) Non-regular items include transaction costs on acquisition opportunities ($2,141,934 pre-tax), commission costs including
lease expenditures ($2,502,703 pre-tax) and Fertility Solutions Earn Out Fair Value adjustment ($395,306).
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Monash IVF Group Limited
Notes to the Consolidated Financial Statements continued
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
for the year ended 30 June 2023
Section 1
Our Financial Performance
This section provides information that is most relevant to understanding the financial performance of
the Group during the financial year and, where relevant, the accounting policies applied and the
critical judgements and estimates made.
1.1 Revenue and Expenses
1.4 Earnings per Share
1.2 Operating Segments
1.5 Taxation
1.3 Dividends
1.1 Revenue and Expenses
Revenue recognition
Revenue is recognised when performance obligations have been satisfied, recovery of the consideration is
probable and the amount of revenue can be measured reliably. Revenue is measured at the fair value of the
consideration received or receivable.
Rendering of services
Revenue from rendering of services is recognised on completion of services provided. Revenue is recognised when
the customer has consumed the benefits of the service, whether on completion of a medical procedure, on supply
of drugs, or on completion of analytical tests. If payments received from patients exceed the revenue recognised,
the difference is recognised as deferred revenue.
Deferred revenue
Fees for fertility treatment paid in advance of performing the service are recognised as deferred revenue until
the time the service is rendered to the customer when the fees are recognised as revenue.
1.2 Operating segments
The Group determines and presents operating segments based on information that internally is provided to and
used by the Chief Executive Officer, who is the Group’s Chief Operating Decision Maker (CODM). An operating
segment is a component of the Group that engages in business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to transactions with any of the Group’s other components.
The financial results of each operating segment are regularly reviewed by the Group’s Chief Executive Officer in
order to make decisions about resources to be allocated to the segment and assess its performance, and for which
discrete financial information is available.
Segment results that are reported to the Chief Executive Officer include items directly attributable to a segment,
as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets,
head office expenses and income tax assets and liabilities. Segment capital expenditure is the total cost incurred
during the period to acquire property, plant and equipment and intangible assets other than goodwill.
The basis of inter-segmental transfers is market pricing. Results are calculated before consideration of net
borrowing costs and tax expense.
Identification of reportable operating segments
The two geographic segments being Australia and International reflect Monash IVF Group’s reporting structure to
the CODM. Monash IVF Group considers that the two geographic segments are appropriate for segment reporting
purposes under AASB 8 “Operating Segments”. These segments comprise the following operations:
- Monash IVF Group Australia: provider of Assisted Reproductive Services, Ultrasound and other related services.
- Monash IVF Group International: provider of Assisted Reproductive Services in South East Asia.
1.2 Operating segments (continued)
56
82 | Monash IVF Group
57
Annual Report 2023 | 83
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
1.3 Dividends
Dividends during the year
Franking
Interim dividend in respect
of the current financial year
Fully franked
Payment
Date
7 April 2023
Final dividend in respect of
the prior financial year
Fully franked
7 October 2022
Paid in cash during the year
Dividend franking account
Per share
(cents)
2.2
2.2
2023
$’000
8,572
2022
$’000
8,571
8,572
8,182
4.4
17,144
16,753
Amount of franking credits available at 30 June to shareholders for subsequent
financial years
11,085
11,010
Monash IVF Group’s dividend policy is to target a payout ratio of between 60% and 70% of Statutory NPAT. The
level of payout ratio is expected to vary between periods depending on general operating conditions, operating
cashflow and profit, funding, strategic growth opportunities and availability of franking credits.
Subsequent to 30 June 2023, the Board has declared a fully franked 2023 final dividend of 2.2 cents per share.
Total dividend declared for FY23 is 4.4 cents. The aggregate amount of the proposed dividend expected to be
paid out of retained profits at 30 June 2023, but not recognised as a liability at year end is $8,571,966.
1.4 Earnings per share
Earnings per share
Basic earnings per share
Diluted earnings per share
Profit attributable to ordinary shareholders
2023
Cents per share
2022
Cents per share
5.6
5.6
2023
$’000
4.7
4.7
2022
$’000
Profit after income tax attributable to the ordinary shareholders used
in calculating basic and diluted earnings per share
21,839
18,406
Weighted average number of shares
Weighted average number of ordinary shares used in calculating
basic earnings per share
Adjustments for calculation of diluted earnings per share (1)
2023
Number
2022
Number
389,634,840
389,634,840
2,790,483
1,908,165
Weighted average number of ordinary shares used in calculating
diluted earnings per share
392,425,323
391,543,005
(1) The calculation of the weighted average number of shares has been adjusted for the effect of share based rights granted
from the date of issue. Refer to Section 3.2 for further details.
Basic earnings per share
The calculation of basic earnings per share has been based on profit attributable to ordinary shareholders and
weighted average number of ordinary shares outstanding.
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
1.4 Earnings per share (continued)
Diluted earnings per share
The calculation of diluted earnings per share has been based on profit attributable to ordinary shareholders and
weighted average number of ordinary shares outstanding after adjustment for the effects of all dilutive potential
ordinary shares.
1.5 Taxation
Income Tax expense
Current tax
Deferred tax
Under/(over) provided in prior year
Total income tax expense
Numerical reconciliation of income tax expense to prima facie tax
payable
Profit before income tax expense
Tax at the Australian tax rate of 30% (2022: 30%)
Tax effect of amounts which are not deductible in calculating taxable
income:
Effect of tax rates in foreign jurisdiction
Research and development
Other items
Under/(over) provision of previous year
Income tax expense
2023
$’000
6,434
1,361
78
7,873
2022
$’000
7,782
(305)
243
7,720
29,839
8,952
26,222
7,867
(3)
(823)
(331)
78
7,873
(129)
(250)
(11)
243
7,720
Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that
it relates to a business combination, or to items recognised directly in equity or in other comprehensive income (OCI).
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any
adjustment to tax payable or receivable in respect of previous years. It is measured using tax rates enacted or
substantively enacted at the reporting date.
84 | Monash IVF Group
58
59
Annual Report 2023 | 85
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
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86 | Monash IVF Group
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
1.5 Taxation (continued)
Recognition and Measurement
Deferred tax
Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not
recognised for the following temporary differences:
•
•
The initial recognition of assets or liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss, and differences relating to investments in subsidiaries
and associates and jointly controlled entities to the extent that it is probable that they will not reverse in
the foreseeable future.
In addition, deferred tax is not recognised for taxable temporary differences arising on the initial
recognition of goodwill.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, based on the laws that have been enacted or substantively enacted by the reporting date.
Offsetting deferred tax
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities
and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on
different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their assets and
liabilities will be realised simultaneously.
Tax consolidation
Monash IVF Group Limited and its wholly Australian owned controlled entities are part of a tax consolidation group
under Australian taxation law. Monash IVF Group Limited is the head entity in the tax-consolidated group. Entities
within the tax consolidated group have entered into a tax funding arrangement and a tax sharing agreement with
the head entity. Under the terms of the tax funding arrangement, Monash IVF Group Limited and each of the
entities in the tax consolidated group have agreed to pay (or receive) a tax equivalent payment to (or from) the
head entity, based on the current tax liability or current tax asset of the entity.
Key estimate and judgement:
Recovery of deferred tax assets
Key estimate and judgement:
Income taxes
A deferred tax asset is recognised to the extent that
it is probable that future taxable profits will be
available against which the temporary difference
can be utilised. Deferred tax assets are reviewed at
each reporting date and are reduced to the extent
that it is no longer probable that the related tax
benefit will be realised.
The Group is subject to income taxes in Australia and
foreign operations.
it has
jurisdictions where
Judgement is required in determining the worldwide
provision for income taxes and in assessing whether
deferred tax balances are recognised on the statement
of financial position. Changes in circumstances will
alter expectations, which may impact the amount of
provision for income taxes and deferred tax balances
recognised.
61
Annual Report 2023 | 87
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
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FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
Section 2
Our Operating Asset Base
This section provides information relating to the Group’s Operating Base, highlighting the primary
operating assets used and liabilities incurred to support the Group’s operating activities.
2.1 Trade and other receivables
2.4 Plant and equipment
2.2 Inventory
2.5 Right of use of assets
2.3 Trade and other payables
2.6 Intangible assets
2.1 Trade and other receivables
Current
Trade receivables
Provision for expected credit losses
Net trade receivables
Other debtors
Accrued income
Prepayments
GST receivable
Total current trade and other receivables
Non current
Other debtors
2023
$’000
2022
$’000
5,733
(625)
5,108
2,371
878
4,978
2,168
15,503
5,067
(846)
4,221
2,290
559
4,063
1,383
12,516
166
169
Provision for expected credit losses
The consolidated entity has recognised a decrease of $221,000 (2022: increase of $15,000) in respect of
impairment of receivables for the year ended 30 June 2023. The decrease in provision for expected credit losses
during the year was predominately driven by a reduction of outstanding balances over 120 days, which reflected
counterparties that have been impacted by the economic environment in the prior year.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently measured at amortised costs using the
effective interest method less provision for expected credit losses. A financial asset (including trade receivables)
not classified as at fair value through profit or loss is assessed at each reporting date to determine whether there
is any objective evidence that it is impaired. AASB 9 replaced the ‘incurred loss model’ in AASB 139 with an
‘expected credit loss’ (ECL) model. Loss allowances for trade receivables are measured at an amount equal to 12
month ECLs. When determining whether the credit risk of a financial asset has increased significantly since initial
recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant
and available without undue cost or effort. This includes both quantitative and qualitative information and analysis,
based on the Group’s historical experience, debtor ageing and credit assessment including forward-looking
information.
Credit Risk
Credit risk is the risk of financial loss to the Group if a patient or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the Group’s trade receivables, being patients.
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
2.1 Trade and other receivables (continued)
Patient fees for most treatments are received in advance and recognised as deferred revenue if the procedure is
yet to be performed. This reduces the risk of non-collectability. Outstanding receivables predominantly relate to
amounts owing from Medicare and storage fee patient accounts. Payment reminder notices are issued to patients
with outstanding balances at 30, 60 and 90 days. After which, collection of this debt may be handled by a
collection agency. The Group does not have any material credit risk exposure to any single receivable or group
of receivables under financial instruments entered into by the Group.
Prepayments
Payments made for the receiving of goods or services rendered in future years are recognised as a prepayment.
2.2 Inventory
Consumables – at cost
Total inventory
2023
$’000
6,430
6,430
2022
$’000
5,254
5,254
Inventories are recorded using the FIFO method and are valued at the lower of cost and net realisable value.
Inventories include medical supplies to be consumed in providing future patient services.
2.3 Trade and other payables
Current
Trade payables
Accrued expenses
Deferred revenue
Total trade and other payables
2023
$’000
1,855
10,096
9,245
21,196
2022
$’000
3,340
7,238
8,659
19,237
Trade and other payables are carried at amortised cost and are not discounted. These amounts represent liabilities
for goods and services provided to the Group prior to the end of the financial year which are unpaid. The amounts
are unsecured and are paid in accordance with vendor terms.
2.4 Plant and equipment
Cost
Opening balance at 1 July
Additions
Disposal
Closing balance at 30 June
Accumulated depreciation and impairment losses
Opening balance at 1 July
Depreciation for the year
Disposal
Other including foreign exchange movements
Closing balance at 30 June
Carrying amount
At 1 July (Opening balance)
At 30 June (Closing balance)
2023
$’000
78,405
25,729
(1,667)
102,467
(48,011)
(5,405)
1,370
(49)
(52,095)
30,394
50,372
2022
$’000
68,202
10,203
-
78,405
(43,262)
(4,749)
-
-
(48,011)
24,940
30,394
63
88 | Monash IVF Group
Annual Report 2023 | 89
62
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
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Our Strategy
Industry Growth Drivers
4 Year Metrics
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Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
2.4 Plant and equipment (continued)
Capital commitments
Expenditure contracted for but not recognised as liabilities:
Capital plant and equipment
2023
$’000
7,970(1)
2022
$’000
13,598(2)
(1) Capital plant and equipment includes the new Melbourne, Brisbane, Sunshine, St Leonards ultrasound practice and day hospital projects in
development.
(2) Capital plant and equipment includes the new Melbourne, Darwin, Penrith, Brisbane, Bali and Gold Coast fertility clinic and day hospital
projects in development.
Items of plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment
losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self
constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing
the assets to a working condition for their intended use, the costs of dismantling and removing the items and restoring
the site on which they are located and capitalised borrowing costs. When parts of an item of plant and equipment
have different useful lives, they are accounted for as separate items (major components) of plant and equipment.
Gains and losses on disposal of an item of plant and equipment are determined by comparing the proceeds from
disposal with the carrying amount of plant and equipment and are recognised on a net basis within “other income”
in profit or loss. The cost of replacing part of an item of plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits embodied with the part will flow to the Group and its
cost can be measured reliably. The carrying amount of the replaced part is derecognised. The costs of the day-
to-day servicing of the plant and equipment are recognised in profit or loss as incurred.
Key estimate and judgement:
Depreciation
The Group’s plant and equipment are depreciated over their useful economic lives between 2-10 years.
Depreciation methods, useful lives and residual values are reviewed at each reporting date. Depreciation is
recognised in profit or loss on a straight line basis over the estimated useful lives of each part of an item of plant
and equipment, since this most closely reflects the expected pattern of consumption of the future economic benefits
embodied in the asset.
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
2.5 Right of Use Assets
Leases as lessee
$’000
Cost
Opening balance at 1 July
Additions / modifications
Disposals
Closing balance at 30 June
Accumulated depreciation
Opening balance at 1 July
Depreciation for the year
Disposals
Closing balance at 30 June
Carrying amount
At 1 July (Opening balance)
At 30 June (Closing balance)
$’000
Cost
Opening balance at 1 July
Additions / modifications
Disposals
Closing balance at 30 June
Accumulated depreciation
Opening balance at 1 July
Depreciation for the year
Disposals
Closing balance at 30 June
Carrying amount
At 1 July (Opening balance)
At 30 June (Closing balance)
Buildings
2023
Equipment
Total
97,237
13,226
(20,720)
89,743
1,770
99,007
- 13,226
- (20,720)
91,513
1,770
(33,594)
(7,128)
9,316
(31,406)
(747)
(346)
(34,341)
(7,474)
- 9,316
(1,093)
(32,499)
63,643
58,337
1,023
677
64,666
59,014
Buildings
2022
Equipment
Total
68,322
30,394
(1,479)
97,237
(27,171)
(7,429)
1,006
(33,594)
1,770
70,092
- 30,394
(1,479)
-
99,007
1,770
(571)
(176)
(27,742)
(7,605)
- 1,006
(34,341)
(747)
41,151
63,643
1,199
1,023
42,350
64,666
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost less any accumulated depreciation and impairment losses and adjusted for certain
remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease
payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease, or if
the rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its
incremental borrowing rate as the discount rate.
The lease liability is subsequently increased by the interest cost on the lease liability and decreased by the lease
payment made. It is remeasured when there is a change in future lease payments arising from a change in an
index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee,
or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to
be exercised or a termination option is reasonably certain not to be exercised. The Group has applied judgement
to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The
assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which
significantly affects the lease liabilities and right-of-use assets recognised.
90 | Monash IVF Group
64
65
Annual Report 2023 | 91
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
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Our Strategy
Industry Growth Drivers
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Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
2.5 Right of Use Assets (continued)
The Group leases property and equipment. The leases typically run for a period of between one to ten years,
with an option to renew the lease after this date. Lease payments are renegotiated at periods to reflect market
rentals. The Group has elected not to recognise right of use assets and lease liabilities for short term and/or low
value assets such as IT and office equipment.
Amounts recognised in profit and loss
Depreciation on right of use assets
Interest on lease liabilities
Expenses relating to low value assets
Amounts recognised in statement of cash flows
Payments of lease liabilities
2023
$’000
7,474
2,073
9
2022
$’000
7,605
1,720
73
9,178
8,634
Extension options
Some leases contain extension options exercisable by the Group up to one year before the end of the non-
cancellable contract period. Where practicable, the Group seeks to include extension options in new leases to
provide operational flexibility. The extension options held are exercisable by the Group and not by the lessors.
The Group assesses at lease commencement date whether it is reasonably certain to exercise the extension options.
The Group reassesses whether it is reasonably certain to exercise the options if there is a significant event or
significant changes in circumstances within its control. The Group has estimated that the potential future lease
payments, should it exercise the extension option, would result in an increase in lease liability of $7.1 million.
2.6 Intangible assets
$’000
2023
Net book value
Balance at 1 July 2022
Additions
Amortisation expense
Balance at 30 June 2023
At 30 June 2023
Cost
Accumulated amortisation and
impairment losses
Balance at 30 June 2023
2022
Net book value
Balance at 1 July 2021(1)
Additions
Amortisation expense
Balance at 30 June 2022
At 30 June 2022
Cost
Accumulated amortisation and
impairment losses
Balance at 30 June 2022
Goodwill
Software
Trademark
Total
233,169
21,963
-
255,132
255,132
-
255,132
233,169
-
-
233,169
233,169
-
233,169
5,879
2,060
(2,464)
5,475
16,153
(10,678)
5,475
6,259
2,054
(2,434)
5,879
14,093
(8,214)
5,879
19,845
-
-
19,845
19,845
-
19,845
19,845
-
-
19,845
19,845
-
19,845
258,893
24,023
(2,464)
280,452
291,130
(10,678)
280,452
259,273
2,054
(2,434)
258,839
267,107
(8,214)
258,893
(1) 30 June 2021 has been restated due to the IFRS Interpretations Committee decision in relation to accounting for Software as a Service.
66
92 | Monash IVF Group
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
2.6 Intangible assets (continued)
Software
Software has a finite useful life and is carried at cost less accumulated amortisation and impairment losses. The
cost of system development, including purchased software, is capitalised and amortised over the estimated useful
life, being three to ten years. Amortisation methods, useful lives and residual values are reviewed at each financial
year end and adjusted if appropriate.
Software-as-a-Service (SaaS) arrangements
SaaS arrangements are service contracts providing the Group with the right to access the cloud provider’s
application software over the contract period. As such, the Group does not receive a software intangible asset at
the contract commencement date.
The following outlines the accounting treatment of costs incurred in relation to SaaS arrangements:
- Costs recognised as an operating expense over the term of the service contract include fees for use of
-
application software and customization costs.
Costs recognised as an operating expense as the service is received include configuration costs, data
conversion and migration costs, testing costs and training costs.
- Costs incurred for the development of software code that enhance or modifies or creates additional capability
to an existing on premise system, and meets the definition of and recognition criteria for an intangible asset
are recognized as intangible software assets.
Trademark
Trademarks are reported at historical cost less impairment. Trademarks have an indefinite useful life where there
is no expiry and no foreseeable limit on the period of time over which these assets are expected to contribute to
the cash flows of the Group. Similar to goodwill, these are tested for impairment annually.
Goodwill
Goodwill on consolidation represents the excess of the cost of an acquisition over the fair value of the Group’s
share of net identifiable assets of the acquired entities at the date of acquisition. Goodwill on the acquisition of
subsidiaries is included in intangible assets. Goodwill is measured at cost less accumulated impairment losses.
Goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it
might be impaired.
Impairment testing
Goodwill and other indefinite life intangible assets become impaired when their carrying value exceeds their
recoverable amount. Recoverable amount is the greater of fair value less costs to sell or value in use. In determining
the recoverable amount, judgments and assumptions are made in the determination of likely net sale proceeds or
in the determination of future cash flows which support a value in use. Specifically, with respect to future cash
flows, judgments are made in respect to the quantum of those future cash flows and the discount rates (cost of
capital and debt) applied to determining the net present value of these future cash flows.
The carrying amounts of the Group’s non financial assets are reviewed at each reporting date to determine whether
there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated.
For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the
smallest group of assets that generates cash inflows of other assets or groups of assets (the ‘cash-generating’ units).
The recoverable amount of an asset or cash-generating unit (CGU) is the greater of its value in use and its fair
value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their present
value using a pre-tax discount rate that reflects current market assessments of the time value of money and the
risks specific to the asset or CGU.
An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognised in profit or loss. Impairment losses recognised in respect of CGUs are allocated
first to reduce the carrying amount of any goodwill allocated to the CGU and then to reduce the carrying amount
of the other assets in the CGU (group of CGUs) on a pro rata basis. An impairment loss is reversed only to the
67
Annual Report 2023 | 93
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
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Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
2.6 Intangible assets (continued)
extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined,
net of depreciation and amortisation, if no impairment loss had been recognised.
The following CGUs were tested for impairment during the year:
Goodwill and trademark allocated to:
Australia
Ultrasound
International
2023
$’000
240,993
28,232
5,752
274,977
2022
$’000
219,030
28,232
5,752
253,014
Impairment testing assumptions
The recoverable amount of a CGU is based on value-in-use calculations. The following key assumptions were utilised
for the impairment testing:
-
The respective discount rate was a pre-tax measure based on the rate of 10 year Government bonds issued
by the Australian and Malaysian Government respectively in the relevant market, adjusted for a risk premium
to reflect the increased risk of investing in equities generally and the systemic risk of the specific CGU. A pre-
tax discount rate of 11.8% (FY22: 10.5%) for the Australian CGU, 11.8% (FY22: 10.5%) for the Ultrasound
CGU and 15.0% (FY22: 11.5%) for the International CGU was applied in determining the recoverable
amount.
- Cash flow forecasts are based on the Board-approved FY24 budget, projected for four years plus a terminal
value. The FY24 budget reflects management’s best estimate of forecast operating performance having
regard to the IVF markets in Australia and Malaysia and anticipated ultrasound activity.
- A long-term growth rate into perpetuity of 3.0% (FY22: 3.0%) has been determined based on an assessment
of historical growth rates, expectations of future growth rates and market specific dynamics.
Impact of possible changes in key assumptions
All CGU’s in the Group have been tested for impairment and have met their required hurdle rates to support the
current carrying values. Any reasonable possible change to relevant assumptions and inputs would not result in the
recoverable amount being lower than the carrying amount, noting that recovery of the Ultrasound CGU to historical
levels of activity is a key input in the Group’s assessment..
Result of Impairment testing
The recoverable amount of all CGU’s are deemed recoverable.
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
Section 3
Our People
This section provides financial insight into employee reward and recognition for creating a high
performance culture and the Group’s ability to attract and retain talent. This section is to be read in
conjunction with the Remuneration Report, as set out in the Directors Report.
3.1 Employee benefits
3.3 Key management personnel
3.2 Share-based payments
3.1 Employee benefits
Current liability
Long service leave
Annual leave
Total current employee benefits
Non current liability
Long service leave
Total non current employee benefits
Total employee benefits provision
2023
$’000
5,830
6,205
12,035
1,410
1,410
13,445
2022
$’000
5,305
5,562
10,867
1,432
1,432
12,299
Provision for employee benefits
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits are expected to
be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration
rates which are expected to be paid when the liability is settled. All other employee benefits are measured at
their present value of the estimated future cash outflow to be made in respect of services provided by the employees
up to the reporting date. The discount rate is the yield at the reporting date on corporate bonds issued by the
relevant markets that have maturity dates approximating the terms of the Group’s obligations.
3.2 Share-based payments
Senior executives’ long-term incentive plan
The Group will provide benefits to certain employees in the form of share-based payment options and/or
performance rights. The fair values of these instruments granted under the plans are recognized as an employee
benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognized
over the period during which the employee becomes unconditionally entitled to the instruments.
Fair value is measured at grant date using a combination of Binomial tree and Monte-Carlo Simulation models, for
the respective performance hurdles. The valuation was performed by an independent valuer which models the
future security price.
The fair value of the instruments granted excludes the impact of any non-market vesting conditions. Non-market
vesting conditions are included in assumptions about the number of instruments that are expected to become
exercisable. At each reporting date, the entity revises its estimate of the number of instruments that are expected
to become exercisable.
The employee benefit expense recognised each period takes into account the most recent estimate. The impact of
the revision to original estimates, if any, is recognised in profit and loss with a corresponding adjustment to equity.
Under the Company’s Long Term Incentive (“LTI”) Plan, awards constituting share appreciation rights, performance
rights or options, or any different class or category of award on such terms as the Board determines, may be
94 | Monash IVF Group
68
69
Annual Report 2023 | 95
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
3.2 Share-based payments (continued)
offered to eligible persons selected by the Directors. Key management personnel and other senior management
are eligible to participate under the LTI Program.
The senior executive LTI are performance rights plans with vesting rights dependent upon the satisfaction of pre-
defined performance hurdles and continuous employment. Current performance hurdles are based on achievement
of pre-defined Earning Per Share (“EPS”) Hurdle and a Total Shareholder Return (“TSR”) Hurdle over a three year
performance period. The Board may amend the performance hurdles or specify a different performance hurdle(s)
if it considers it necessary. For further detail on the specific LTI plans, refer to the Remuneration Report.
Long term incentive program (equity settled)
A description of the equity plans applicable during the year are described below:
Grant date
Vesting conditions
EPS - Subject to meeting certain EPS hurdles and 3 year service period to 30 June 2025
TSR - Subject to Total Shareholder Return hurdles and a 3 year service period to the
11th trading day after the FY25 results announcement
EPS - Subject to meeting certain EPS hurdles and 3 year service period to 30 June 2024
TSR - Subject to Total Shareholder Return hurdles and a 3 year service period to the
11th trading day after the FY24 results announcement
EPS - Subject to meeting certain EPS hurdles and 3 year service period to 30 June 2023
TSR - Subject to Total Shareholder Return hurdles and a 3 year service period to the
11th trading day after the FY23 results announcement
(2023 Plan)
23 November 2022
(2022 Plan)
19 November 2021
(2021 Plan)
16 October 2020
(2020 Plan)
16 October 2019
TSR - Subject to Total Shareholder Return hurdles and a 3 year service period to the
11th trading day after the FY22 results announcement
Key estimate and judgement: Share-based payments
As a result of the combination of non-market (EPS) and market (TSR) vesting conditions, the fair value of the share
rights plan has been measured using Binomial tree and Monte Carlo simulation respectively. The inputs used in the
measurement of the fair values at grant date of the equity-settled share based payment plans were as follows:
Fair value at grant date (EPS condition)
Fair value at grant date (TSR condition)
Share price at grant date
Expected volatility – Monash IVF
Expected volatility – ASX 300 Healthcare Index
Expected life (years)
Expected dividends
Risk free interest rate (based on government bonds)
2023
$1.02
$0.60
$1.02
40%
17%
6
0.00%
3.27%
2022
$0.93
$0.49
$0.93
40%
16%
6
0.00%
0.95%
2021
$0.61
$0.32
$0.62
40%
16%
6
0.00%
0.13%
2020
$0.94
$0.46
$0.94
35%
15%
6
6.0%
0.83%
Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price,
particularly over the historical period commensurate with the expected term. The expected term of the instruments
has been based on historical experience and general instrument holder behavior.
70
96 | Monash IVF Group
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
3.2 Share-based payments (continued)
Reconciliation of outstanding performance rights
The number of performance rights under the company’s long-term incentive plan were as follows:
2023
Grant Date
Balance at
1July 2022
Granted
during the
year
Lapsed
during the
year
Forfeited
during
the year
Expiry Date
Vested
during
the
year
Balance at
30 June
2023
Exercisable
rights at 30
June 2023
16 Oct 2019
30 June 2022
30 June 2023
16 Oct 2020
19 Nov 2021 30 June 2024
23 Nov 2022 30 June 2025
184,006
856,240
867,919
-
-
-
(184,006)(1)
-
-
-
1,908,165
1,066,324
1,066,324
-
(184,006)
-
-
-
-
-
-
-
-
-
856,240
867,919
- 1,066,324
- 2,790,483
-
599,367(2)
-
-
599,367
TSR vesting conditions for performance rights granted in FY20 were not satisfied therefore these rights lapsed.
(1)
(2) Vesting conditions were satisfied but not yet exercised.
2022
Grant Date
Expiry Date
Balance at
1July 2021
Granted
during
the year
Lapsed
during the
year
Forfeited
during the
year
Vested
during
the
year
Balance at
30 June
2022
Exercisable
rights at 30
June 2022
20 Dec 2018 30 June 2021
40,359
16 Oct 2019
30 June 2022
368,012
-
-
(40,359)(1)
(184,006)(2)
-
-
30 June 2023
16 Oct 2020
19 Nov 2021 30 June 2024
901,521
-
-
917,992
-
-
(45,281)(3)
(50,073)
-
-
- 184,006
- 856,240
- 867,919
1,309,892
917,992
(224,365)
(95,354)
- 1,908,165
-
-
-
-
-
(1)
(2)
(3)
TSR vesting conditions for performance rights granted in FY19 were not satisfied therefore these rights lapsed.
EPS vesting conditions for performance rights granted in FY20 were not satisfied therefore these rights lapsed.
Forfeited due to not satisfying service conditions.
3.3 Key management personnel
Short-term employee benefits
Post-employment benefits
Share-based payments
Total key management personnel compensation
2023
$
2,531,491
154,190
318,178
3,003,859
2022
$
2,127,923
138,639
250,640
2,517,202
For further information on key management personnel refer to the Remuneration Report.
Transactions with key management personnel and related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
71
Annual Report 2023 | 97
EPS - Subject to meeting certain EPS hurdles and 3 year service period to 30 June 2022
Compensation
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
Section 4
Our Funding Structure
This section provides information relating to the Group’s capital structure and its exposure to
financial risk, how they affect the Group’s financial position and performance, and how the risks are
managed.
The Directors determine the appropriate capital structure of Monash IVF, specifically how much is
raised from the shareholders (equity) and how much is borrowed from financial institutions (debt) in
order to finance the current and future activities of the Group. The Directors review the Group’s
capital structure regularly and do so in the context of the Group’s ability to continue as a going
concern, to invest in opportunities that grow the business and enhance shareholder value.
4.1 Share capital and reserves
4.4 Derivative financial instruments
4.2 Financial risk management
4.5 Net finance costs
4.3 Borrowings
4.6 Cash and cash equivalents
4.1 Share capital and reserves
Opening balance at 1 July 2022
Closing balance at 30 June 2023
Number of shares
issued
389,634,840
389,634,840
$’000
506,786
506,786
Ordinary shares
Ordinary shares are classified as share capital. Ordinary shares entitle the holder to participate in dividends and
the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held.
Ordinary shares entitle the holder to one vote, either in person or by proxy, at a meeting of the Company.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
Capital management
The Group’s policy is to maintain a strong capital base so as to maintain investor and market confidence and to
sustain future growth of the business. Management monitors the return on capital as well as the level of dividends
to ordinary shareholders. The Board of Directors seeks to maintain a balance between the higher returns that might
be possible with higher levels of borrowings and the advantages and security afforded by a sound capital structure.
In order to maintain an optimal capital structure, the Group may amend the amount of dividends declared and
paid, return capital to shareholders or increase borrowings or equity to fund growth and future acquisitions.
Other equity reserve
The other equity reserve represents the difference between the issued capital in Healthbridge Enterprises Pty Ltd
and Monash IVF Group Ltd on 26 June 2014, being the date Monash IVF Group Ltd acquired Healthbridge
Enterprises Pty Ltd.
Profits reserve
The profits reserve comprises the transfer of net profit for the period and characterises profits available for
distribution as dividends in future periods.
Share option reserve
Share option reserve represents the grant-date fair value of equity-settled share-based payment awards granted
to employees, which is generally recognised as an expense, with corresponding increase in equity over the vesting
period of the awards.
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
4.1 Share capital and reserves (continued)
Hedge reserve
The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash flow
hedging instruments related to highly probable forecast transactions. The hedging reserve is used to record gains
or losses on derivatives that are designated and qualify as cash flow hedges and that are recognised in OCI.
Amounts are reclassified to profit or loss when the associated hedged transaction affects profit or loss.
Foreign currency translation reserve
The translation reserve comprises all foreign currency differences arising from the translation of the financial
statements of foreign operations.
Escrow arrangements
The following ordinary shareholders have entered into voluntary escrow arrangements in relation to certain
ordinary shares they hold in Monash IVF Group Ltd. An ‘escrow’ is a restriction on sale, disposal, or encumbering
of, or certain other dealings in respect of, the Shares concerned for the period of the escrow, subject to exceptions
set out in the escrow arrangement.
Doctors (1)(2)
Sydney Ultrasound for Women(3)
Total
30 June 2023
30 June 2022
Number of
shares subject
to escrow (m)
12.2
1.2
13.4
Escrowed
shares (as a %
of shares on
issue
3.1%
0.3%
3.4%
Number of
shares subject
to escrow (m)
13.8
1.2
15.0
Escrowed shares
(as a % of
shares on issue)
Escrowed shares
(as a %
3.5%
0.3%
3.8%
FY23 Includes 1.0m shares subject to escrow held by Richard Henshaw (Executive Director) (FY22:1.0m shares)
(1)
(2) Doctors
(3)
Escrow for Sydney Ultrasound for Women (SUFW)
The escrow applied to a pre-IPO Doctor was calculated by reference to the aggregate value of that person’s pre-
reorganisation equity interests in Healthbridge Enterprises Pty Ltd as follows:
Shares equivalent to 10% of a Doctor’s interest prior to the re-organisation were held in short-term escrow, with
3.33% released each year from escrow on the first trading day in Shares following the Company’s FY15, FY16
and FY17 financial results announcements to the ASX. This concluded the release of the pre-IPO doctor short-term
escrow.
Shares held in long-term escrow are subject to the following conditions:
1.
Shares equivalent to 20% of a Doctor’s interest prior to the re-organisation will be released when the
Doctor reaches the age of 63. These shares may be otherwise released from escrow in the following
circumstances:
-
for Doctors who were aged 63 or older at the time of re-organisation or who turned 63 within two
years of Completion, these shares can be released from escrow from June 2016; or
- where a Doctor becomes a ‘relocated leaver’ (as described below), these Shares can be released
from escrow five years after the date that they become a ‘relocated leaver’; or
- where a Doctor dies or leaves the Group as a result of becoming permanently disabled or seriously
disabled, these shares can be released from escrow on the date of the relevant occurrence (as resolved
by the Board acting reasonably); or
if the Board determines to release the shares from escrow earlier.
-
2.
Shares equivalent to 20% of a Doctor’s interest prior to re-organisation can be released from escrow:
-
on retirement by the Doctor from the ARS industry (provided a Doctor must have used their best
endeavours to transition their practice to another Doctor to the satisfaction of the Board); or
if the Doctor becomes a ‘good leaver’ or a ‘relocated leaver’ (as described below); or
five years after the Doctor leaves Monash IVF Group in other circumstances.
-
-
98 | Monash IVF Group
72
73
Annual Report 2023 | 99
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
4.1 Share capital and reserves (continued)
Doctors will be able to sell any non-escrowed Shares at any time, subject to complying with insider trading
restrictions and the Group’s Securities Trading Policy.
The escrow arrangements describe the circumstances in which a Doctor is a ‘good leaver’ or a ‘relocated leaver’ in
the following manner:
(a) A Doctor is a ‘good leaver’ where:
-
-
they leave the Group as a result of death, serious disability or permanent incapacity through ill health
(as determined by the Group’s Board, acting reasonably); or
they or the Group terminates the Doctor’s contract in specific circumstances; or
The Board determines, in its discretion, that the Doctor is a ‘good leaver’.
(b) A Doctor is a ‘relocated leaver’ if they terminate their contract and the Board is satisfied that:
-
-
-
the Doctor genuinely intends to relocate permanently to a place which is more than 100 km from any
clinic operated by the Group or any of its subsidiaries; and
the Doctor also intends to provide Assisted Reproductive Services in the place the Doctor is relocating
to; and
the Doctor has used their best endeavours to transition their practice to another Doctor at the Group.
All shares issued to the vendors of SUFW are escrowed such that 53.3% of the shares issued were escrowed until
the first trading day after the release of the FY16 results. 3.3% were escrowed until the first trading day after the
release of the FY17 results and 3.3% are escrowed until the first trading day after the release of the FY18 results.
The remaining 40.1% is subject to escrow and is consistent with the Doctors above in points 1 and 2. Doctors will
be able to sell any non-escrowed Shares at any time, subject to complying with insider trading restrictions and the
Group’s Securities Trading Policy. The escrow arrangements describing the circumstances in which a SUFW Doctor
is a ‘good leaver’ or a ‘relocated leaver’ is the same as described above.
4.2 Financial risk management
The Group has exposure to the following risks from its use of financial instruments:
Liquidity risk;
Foreign exchange risk;
Interest risk; and
-
-
-
- Market risk.
This note presents information about the Group’s exposure to each of the above risks, objectives, policies and
processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are
included throughout this financial report.
Risk management policies are in place to identify and analyse the risks faced by the Group, to set appropriate
risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are
reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its
recruitment, training and management standards and procedures, aims to develop a disciplined and constructive
control environment in which all employees understand their roles and obligations.
Liquidity risk
Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise
meeting its obligations related to financial liabilities. The group manages this risk through the following mechanisms:
-
Preparing forward-looking financial analysis in relation to its operational, investing and financing
activities;
- Monitoring undrawn credit facilities;
- Obtaining funding from a variety of sources;
74
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
4.2 Financial risk management (continued)
- Maintaining a reputable credit profile;
- Managing credit risk related to financial assets;
- Only investing surplus cash with major financial institutions; and
-
Comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
The following are the contractual maturities of financial liabilities, including estimated interest payments and
excluding the impact of netting arrangements, subject to the Group meeting future undertakings.
2023
Non-derivative financial
liabilities
Secured bank loans
Trade and other payables
Lease liabilities
Contingent consideration
2022
Non-derivative financial
liabilities
Secured bank loans
Trade and other payables
Lease liabilities
Contingent consideration
Carrying
amount
$’000
Total
Contractual
cash flows
$’000
Within 1
year
1-5 years
Over
5 years
$’000
$’000
$’000
-
-
(28,950)
-
(28,950)
Over 5
years
39,000
21,196
61,173
10,910
132,279
(42,506)
(21,196)
(70,724)
(10,910)
(145,336)
-
(21,196)
(8,227)
(5,710)
(35,133)
(42,506)
-
(33,547)
(5,200)
(81,253)
Carrying
amount
$’000
Total
Contractual
cash flows
$’000
Within 1 year
1-5 years
$’000
$’000
$’000
10,000
19,237
67,466
971
97,674
(10,970)
(19,237)
(72,830)
(971)
(104,008)
-
(19,237)
(8,630)
(483)
(28,350)
(10,970)
-
(32,438)
(488)
(43,896)
-
-
(31,762)
-
(31,762)
Foreign exchange risk
The Group is not exposed to material levels of foreign currency risk at the reporting date or during the financial
year.
Interest rate risk
The consolidated entity’s main interest rate risk arises from long-term borrowings. Borrowings issued at variable
rates expose the consolidated entity to interest rate risk. Interest rate risk may be managed using a mix of floating
rate debt and fixed rate instruments. Interest rate swaps may be used to mitigate interest rate risk on floating
rate debt. Interest rate swaps are not entered into for trading purposes and are not classified as held for trading.
The interest rate profile of the Group’s interest-bearing financial instruments as reported to management of the
Group is as follows including the impact of hedging instruments:
Fixed rate instruments
Financial assets
Financial liabilities
Variable rate instruments
Financial assets
Financial liabilities
2023
$’000
1,440
(61,173)
(59,733)
6,565
(38,866)
(32,301)
2022
$’000
967
(67,466)
(66,499)
6,752
(9,764)
(3,012)
75
100 | Monash IVF Group
Annual Report 2023 | 101
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
4.2 Financial risk management (continued)
Cash flow sensitivity analysis for variable rate instruments
A reasonable possible change of a 100 basis points in interest rates at the reporting date would have increased
/(decreased) equity and profit or loss by $323,010 (FY22: $30,120). This assumes that all other variables remain
constant.
Market risk – Operational risk
The Group is exposed to legislative and/or Government policy changes to funding for IVF and related healthcare
services which may impact patient out-of-pocket costs resulting in potentially higher or lower demand.
Fair Values
(a) Accounting classifications and fair values
The following table shows the carrying amounts and fair value of financial assets and financial liabilities, including
their levels in the fair value hierarchy. The Group has not disclosed the fair values for financial assets such as short-
term trade receivables, and financial liabilities such as payables (including variable rate secured bank loans),
because these carrying amounts are a reasonable approximation of fair values.
$’000
Financial assets measured at fair value
Interest rate swaps for hedging
Carrying
Amount
305
305
Fair Value
Level 1
Level 2
Level 3
Total
-
-
305
305
-
-
305
305
The table above analyses financial assets and liabilities carried at fair value. The different levels have been
defined as follows:
-
-
-
Level 1: quoted prices (unadjusted) in active markets for identical assets and liabilities;
such as payables (including variable rate secured bank loans),
Level 2: inputs other than quoted prices included within Level 1 that are observable
for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from
prices); and
Level 3: inputs for the asset or liability that are not based on observable market
data (unobservable inputs).
-
(b) Measurement of fair value
(i) Valuation techniques and significant unobservable inputs
The following table shows the valuation techniques used in measuring Level 2 and Level 3 fair values, as well as
the significant unobservable inputs used.
Type
Valuation Technique
Significant unobservable
inputs
Inter-relationship
between significant
unobservable inputs and
fair value measurement
Not applicable
Not applicable
Interest rate swaps for
hedging
Market comparison
technique: The fair
values are based on
broker quotes. Similar
contracts are traded in
an active market and the
quotes reflect the actual
transactions in similar
instruments
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
4.3 Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method. Where there is an
unconditional right to defer settlement of the liability for at least twelve months after the reporting date, the loans
and borrowings are classified as non-current.
Total loan facilities available to the Group in Australian dollars
$’000
Syndicated Debt facility A
Syndicated Debt facility B(1)
Total borrowings
Other facilities
Working capital facility(2)
Accordion facility
Borrowings
Borrowings
Capitalised finance facility fees
Total borrowings
2023
2022
Limit
Utilised
Limit
Utilised
40,000
10,000
50,000
32,000
7,000
39,000
40,000
-
40,000
10,000
-
10,000
10,000
30,000
3,637(2)
-
10,000
40,000
3,489(2)
-
39,000
(134)
38,866
10,000
(236)
9,764
(1)
(2)
In March 2023, the Group opened facility B utilizing $10m of the Accordion Facility which is available for acquisition and growth capital
expenditure purposes.
The working capital facility is used for lease bank guarantees which is off-balance sheet.
The banking facilities are secured via a first ranking security over substantially all of the Group’s entities. The
Group is subject to certain financial undertakings under the banking facilities. As at 30 June 2023, the Group is
compliant with its financial undertakings.
As at 30 June 2023, the Group had $3,636,859 of bank guarantees in place (FY22: $3,488,999).
Reconciliation of movements of liabilities arising from financing activities
$’000
Loans
Lease liabilities
Balance
at 1 July
2022
9,764
67,466
Additions
Principal
repayments
Other Balance at
30 June
2023
42,000
2,885
(13,000)
(9,178)
102(1)
-
38,866
61,173
Total interest bearing loans and borrowings
77,230
44,885
(22,178)
102
100,039
(1) Capitalised bank fees following new and extension to the Syndicated Debt Facilities.
4.3 Derivative financial instruments
Non current
Derivatives
2023
$’000
305
305
2022
$’000
-
-
In April 2023, the Group entered into an interest rate swap for $15m which is in a hedging relationship with existing
debt. The swap will mature at 14 April 2026.
102 | Monash IVF Group
76
77
Annual Report 2023 | 103
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
4.6 Cash and cash equivalents
Cash at bank
Short-term bank deposits
Total cash and cash equivalents
Reconciliation of profit after income tax to net
cash inflow from operating activities
Profit for the period
2023
$’000
6,565
1,440
8,005
2023
$’000
2022
$’000
6,907
967
7,874
2022
$’000
21,966
18,502
Adjustments:
Depreciation and amortisation
Net finance cost included in financing activities
Provision for Fertility Solutions Earn-out
Provision for expected credit losses
Acquisition, Lease Accounting and Other
Operating profit before changes in working capital and provisions
Change in net operating assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventory
Increase/(decrease) in trade and other payables
Increase/(decrease) in provisions and employee benefits
Increase/(decrease) in income and deferred taxes
Net cash from operating activities
15,343
1,206
40
(221)
2,171
40,505
(2,984)
(1,176)
1,959
1,146
(328)
39,122
14,788
427
395
15
3,191
37,318
(2,702)
(1,037)
678
350
(2,718)
31,889
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
4.3 Derivative financial instruments (continued)
Recognition and measurement
Derivative financial instruments, including hedge accounting
The Group may hold derivative financial instruments to hedge certain floating interest rate exposures. On initial
designation of the hedge, the Group formally documents the relationship between the hedging instruments and
hedging items, including the risk management objectives and strategy in undertaking the hedge transaction, together
with the methods that will be used to assess the effectiveness of hedging relationship. The Group makes an
assessment, both at the inception of the hedge relationship as well as on an ongoing basis, whether the hedging
instruments are expected to be “highly effective” in offsetting the change in the cash flows of the respective hedged
items during the period for which the hedge is designated, and whether the actual results of each hedge are within
a range of 80-125 percent. For a cash flow hedge of a forecast transaction, the transaction should be highly
probable to occur and should present an exposure to variations in cash flows that could ultimately affect reported
profit or loss.
Derivatives are recognised initially at fair value; attributed transaction costs are recognised in profit or loss as
incurred. Subsequent to initial recognition, derivatives are measured at fair value and changes to therein are
accounted for as described below. All derivative financial instruments are valued using unadjusted quoted prices in
active markets for identical assets or liabilities.
Cash Flow hedge
Changes in the fair value of the derivative hedging instrument designated as a cash flow hedge are recognised in
OCI and presented in the hedging reserve in equity. To the extent that the hedge is ineffective, changes in fair value
are recognised in profit or loss.
If the hedging instrument no longer meets the criteria for hedge accounting, expires or is sold, terminated or
exercised, or the designation is revoked, then hedge accounting is discontinued prospectively. The cumulative gain
or loss previously recognised in OCI and presented in the hedge reserve in equity remains there until the forecast
transaction affects profit or loss. If the forecast transaction is no longer expected to occur, then the balance in OCI
is recognised immediately in profit or loss. In other cases the amount recognised in OCI is transferred to profit or loss
in the same period that the hedged item affects profit or loss.
4.4 Net Finance Costs
Finance income
Interest income
Finance costs
Interest expense
Amortisation of borrowing costs(1)
Interest on lease liabilities
Total finance costs
Net finance costs
2023
$’000
25
1,036
195
2,073
3,304
3,279
(1)
Includes interest and amortisation of ancillary costs incurred in connection with the arrangement of borrowings.
2022
$’000
4
377
54
1,720
2,151
2,147
78
104 | Monash IVF Group
79
Annual Report 2023 | 105
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
Section 5
Our Business Portfolio
This section provides further insight into the legal structure and group of subsidiary companies.
5.1 Controlled entities
5.4 Acquisitions and disposals
5.2 Investments accounted for using the equity method
5.5 Deed of cross guarantee
5.3 Parent equity
5.1 Controlled entities
Parent entity
Monash IVF Group Limited
Controlled entities
Healthbridge Enterprises Pty Ltd
Monash IVF Group Acquisitions Pty Ltd
Healthbridge IVF Holdings Pty Ltd
Healthbridge Shared Services Pty Ltd
Healthbridge Repromed Pty Ltd
Repromed Finance Pty Ltd
Repromed Holdings Pty Ltd
Repromed NZ Holding Pty Ltd
Repromed Australia Pty Ltd
Adelaide Fertility Centre Pty Ltd
Monash IVF Holdings Pty Ltd
Monash IVF Finance Pty Ltd
Monash IVF Pty Ltd
Monash Reproductive Pathology and Genetics Pty Ltd
Monash Ultrasound Pty Ltd
Monash IVF Auchenflower Pty Ltd
Yoncat Pty Ltd
My IVF Pty Ltd
ACN 169 060 495 Pty Ltd
Palantrou Pty Ltd
ACN 166 701 819 Pty Ltd
ACN 166 702 487 Pty Ltd
KL Fertility & Gynaecology Centre Sdn. Bhd.
KL Fertility Daycare Sdn. Bhd.
Sydney Ultrasound for Women Partnership
Ultrasonic Diagnostic Services Trust No.2
ACN 604 384 661 Pty Ltd
Ultrasonic Diagnostic Services Pty Ltd
Fertility Australia Pty Ltd
Fertility Australia Trust
MVF Sunshine Coast Pty Ltd
Hobart IVF Pty Ltd (1)
Monash IVF West Pty Ltd
ART Associates Queensland No.2 Pty Ltd
(1) Refer to Note 5.4
106 | Monash IVF Group
Place of business/country
Australia
Place of business
/country
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Malaysia
Malaysia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2022
2023
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
90%
90%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
57.4%
-
-
90%
-
100%
80
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
5.1 Controlled entities (continued)
Controlled entities
Place of business
/country
Gold Coast Ultrasound for Women Pty Ltd (1) Australia
Singapore
Monash IVF Asia Pte Ltd
Malaysia
Monash IVF South Malaysia Pte Ltd
Indonesia
Pt Mitra Kasih Medikatama
(1) Refer to Note 5.4
5.2 Investments accounted for using the equity method
2022
Ownership interest
2023
-%
90%
62%
54%
51%
90%
62%
54%
Name of company
Compass Fertility
5.3 Parent entity
Principal
Activity
Ownership Interest
%
Share of Net Profit/Loss
$’000
Fertility Services
2023
30%
2022
25%
2023
106
2022
243
As at 30 June 2023 and throughout the financial year ending on that date, the parent company of the Group
was Monash IVF Group Limited.
Results of parent entity
Profit after tax
Other comprehensive income
Total comprehensive income
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of the parent entity comprising of:
Share capital
Retained earnings
Total equity
2023
$’000
14,865
-
14,865
-
555,071*
862
37,607
517,464
506,786
10,678
517,464
2022
$’000
15,470
-
15,470
-
528,184*
1,294
8,441
519,743
506,786
12,957
519,743
*Includes Intercompany balances with its subsidiaries, as at 30 June 2023, these balances are not expected to be settled within twelve months.
Expenditure contracted for but not recognised as liabilities
Parent Entity
Capital plant and equipment
2023
$’000
7,970
2022
$’000
13,598
Parent entity guarantees in respect of the debts of its subsidiaries
The parent entity has entered into a Deed of cross guarantee with the effect that the Company guarantees debts
in respect of certain subsidiaries.
81
Annual Report 2023 | 107
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
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Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
5.4 Acquisitions and disposals
Acquisition of ART Associates Queensland
On 1 July 2022, Monash IVF Group Limited announced the acquisition of ART Associates Queensland No.2 Pty Ltd
(ART Associates Queensland) in Brisbane, Queensland for initial cash consideration of $3.9m on a debt free basis,
with the potential of additional earn out payments, subject to certain clauses, over a five to seven year period from
completion. ART Associates Queensland is a specialist fertility clinic in Brisbane performing IVF clinical patient
services and processes including nursing, phlebotomy, ultrasound and other related services.
Acquisition of Pivet Medical Centre
On 27 May 2023, Monash IVF Group Limited announced the completion of the acquisition of PIVET Medical Centre
(“PIVET”) which is a Perth, Western Australia and Cairns, Queensland provider of fertility services. The acquisition
included initial up-front cash consideration of $7.0 million on a debt free basis, with the potential of additional
earn out payments, subject to certain clauses.
In this financial report, ART Associates Queensland and Pivet Medical Centre contributed $8.8m of revenue and
net profit after tax of $2.0m to the consolidated results. If the acquisitions occurred on 1 July 2022, Management
estimated that consolidated revenue would have been $223.5m and consolidated profit after tax for the period
would have been $24.0m.
The Group incurred acquisition related costs of $1.3m post tax relating to external legal fees, due diligence and
stamp duty costs. These costs are included in ‘professional and other fees’ in the Group’s statement of profit or loss
and other comprehensive income.
The identifiable assets acquired and liabilities assumed for the ART Associates Queensland and Pivet Medical
Centre acquisitions have been determined at fair value:
Consideration
Total cash consideration
Contingent consideration
Current
Non Current
Total contingent consideration
Total consideration
Identifiable assets acquired and liabilities assumed
Prepayments
Plant and equipment
Inventory
Trade and other payables
Employee entitlements
Total identifiable net assets/ (liabilities)
Total consideration
Plus Fair value of net identifiable liabilities
Goodwill
108 | Monash IVF Group
$’000
10,948
5,182
5,200
10,382
21,330
150
529
149
(500)
(961)
(633)
21,330
633
21,963
82
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
5.4 Acquisitions and disposals (continued)
Accounting estimates and judgements- Contingent consideration
Deferred or contingent consideration relates to businesses acquired and is initially measured at fair value as at the
acquisition date. Subsequent to initial recognition, deferred consideration continues to be measured at fair value
with any changes in fair value recognised in the profit or loss.
The measurement of contingent consideration requires management to estimate the amount likely to be paid in the
future. This requires the exercise of judgement, in particular where the amounts is payable is dependent to the
future financial performance of the business that has been acquired.
Accounting policy for business combinations
The acquisition method of accounting is used to account for business combinations. The consideration transferred is
the sum of the acquisition-date fair values of the assets transferred, equity instruments issued or liabilities incurred
by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the acquiree.
For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at the
proportionate share of the acquiree’s identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the
Group’s operating or accounting policies and other pertinent conditions in existence at the acquisition date.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition date fair value.
Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is recognised
in profit or loss. The difference between the acquisition date fair value of assets acquired, liabilities assumed and
any non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair value
of any pre-existing investment in the acquiree is recognised as goodwill.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the
provisional amounts recognised and also recognises additional assets and liabilities during the measurement period,
based on new information obtained about the facts and circumstances that existed at the acquisition date. The
measurement period ends on either the earlier of (i) twelve months from the date of the acquisition or (ii) when the
acquirer received all the information possible to determine fair value.
Sale of Hobart IVF Pty Ltd
On 31 October 2022, a share sale agreement was executed for the sale of Monash IVF Group’s majority
shareholding of 57.4% to the sole minority shareholder for no cash consideration. This resulted in a $146K loss on
disposal. Accordingly, the loss on disposal and derecognition of assets and liabilities of the subsidiary has been
reported in the Group financial statements.
Sale of Gold Coast Ultrasound for Women Pty Ltd
On 14 April 2023, a share sale agreement was executed for the sale of Monash IVF Group’s majority shareholding
of 57.4% to QUFW Southport Pty Ltd for $215K. This resulted in an estimated $14K loss on disposal. Accordingly,
the gain on disposal and derecognition of assets and liabilities of the subsidiary has been reported in the Group
financial statements.
83
Annual Report 2023 | 109
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
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Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
5.5 Deed of cross guarantee
The below listed entities are parties to a Deed of cross guarantee under which each company guarantees the debts
of the others. By entering into the deed, the wholly-owned entities have been relieved from the requirement to
prepare a financial report and directors’ report under ASIC Corporations (Wholly Owned Companies) Instrument
2016/785 issued by the Australian Securities and Investments Commission.
The below companies represent the parties to the Deed of cross guarantee (‘closed group’):
- Monash IVF Group Ltd
- Monash IVF Group Acquisition Pty Ltd
Healthbridge Enterprises Pty Ltd
-
Healthbridge Shared Services Pty Ltd
-
Healthbridge IVF Holdings Pty Ltd
-
Healthbridge Repromed Pty Ltd
-
ACN 169060495 Pty Ltd
-
ACN 166701819 Pty Ltd
-
- My IVF Pty Ltd
- Monash IVF Holdings Pty Ltd
Palantrou Pty Ltd
-
ACN 166702487 Pty Ltd
-
Repromed Finance Pty Ltd
-
- Monash IVF Finance Pty Ltd
Repromed Holdings Pty Ltd
-
- Monash IVF Pty Ltd
-
-
- Monash Ultrasound Pty Ltd
- Monash Reproductive Pathology & Genetics Pty Ltd
- Monash IVF Auchenflower Pty Ltd
Yoncat Pty Ltd
-
Adelaide Fertility Centre Pty Ltd
-
Sydney Ultrasound for Women Partnership
-
Ultrasonic Diagnostic Services Trust No. 2
-
ACN 604384661 Pty Ltd
-
Ultrasonic Diagnostic Services Pty Ltd
-
Fertility Australia Pty Ltd
-
Fertility Australia Trust
-
- MVF Sunshine Coast Pty Ltd
Repromed Australia Pty Ltd
Repromed NZ Holding Pty Ltd
An extract of the consolidated statement of comprehensive income and consolidated statement of financial position,
comprising the Company and controlled entities which are party to the Deed of cross guarantee, after eliminating
all transactions between parties to the Deed of cross guarantee is set out as follows:
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
5.5 Deed of cross guarantee (continued)
Extract of the statement of profit or loss and other comprehensive income
Profit before tax
Income tax expense
Net profit after tax
Summary of movements in retained earnings
Opening balance at 1 July
Profit for the period
Dividends paid/declared
Closing balance at 30 June
Statement of financial position
Current assets
Cash and cash equivalents
Trade and other receivables
Inventory
Total current assets
Non current assets
Investment in subsidiaries
Trade and other receivables
Plant and equipment
Right of use assets
Deferred tax asset
Derivative financial instrument
Intangible assets
Total non current assets
Total assets
Current liabilities
Trade and other payables
Lease liabilities
Current tax payable
Contingent consideration
Employee benefits
Total current liabilities
Non current liabilities
Borrowings
Lease liabilities
Deferred tax liability
Contingent consideration
Employee benefits
Total non current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Retained earnings
Total equity
2023
$’000
28,182
(7,340)
20,842
(106,047)
20,842
(17,144)
(102,349)
5,138
14,507
6,001
25,646
12,964
100
47,234
58,459
10,871
305
264,434
394,367
420,013
20,493
5,935
1,457
3,380
11,103
42,368
38,866
54,659
10,373
5,200
1,381
110,479
152,847
267,166
506,786
(137,271)
(102,349)
267,166
2022
$’000
)
24,128
(6,840)
17,288
(106,582)
17,288
(16,753)
(106,047)
5,200
11,956
5,015
22,171
12,967
100
28,401
61,372
11,211
252,746
366,797
388,968
26,061
6,023
457
483
10,853
43,877
9,764
58,134
11,836
488
1,401
81,623
125,500
263,468
506,786
(137,271)
(106,047)
263,468
As at 30 June 2023, the Deed of cross guarantee Group has a net current asset deficiency of $16,722,000 (FY22: $21,706,000). Refer to
the basis of preparation note in relation to going concern considerations.
110 | Monash IVF Group
84
85
Annual Report 2023 | 111
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
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FY23 Financial Report
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Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
Section 6
Other disclosures
6.1 Auditors’ remuneration
6.4 Reporting entity
6.2 Events occurring after the reporting period
6.5 Basis of preparation
6.3 Commitment and contingencies
6.6 New standards and interpretations
6.1 Auditors’ remuneration
During the year the following fees were paid or payable for services provided by the auditor of the parent entity,
its related practices and non-related audit firms:
Audit services - KPMG
Audit and review of financial statements
Other services - KPMG
Taxation services
Other auditors (Non KPMG)
Audit and review of financial statements
Total services
6.2 Events occurring after the reporting period
2023
$
2022
$
313,850
295,000
196,190
134,750
22,443
532,483
22,339
452,089
On 22 August 2023, a fully franked final dividend of 2.2 cents per share was declared. The record date for the
dividend is 8 September 2023 and the payment date for the dividend is 11 October 2023.
Refer to note 6.3 for developments in contingent liabilities arising after the reporting period.
Except as disclosed above, there has not arisen in the interval between the end of the financial year and the date
of this report any item, transaction or event of a material or unusual nature likely, in the opinion of the directors of
the Company, to affect significantly the operations of the Group, the results of those operations, or the state of
affairs of the Group, in future financial periods.
6.3 Commitment and contingencies
As announced to the ASX on 23 December 2020, Monash IVF Group became aware that it and certain number of
its subsidiaries have been named as defendants in proceedings filed in the Supreme Court of Victoria in relation
to, or in connection with, the Group’s non-invasive pre-implantation genetic screening technology (Ni-PGT or cell-
free PGT-A). The proceedings filed makes a series of allegations against Monash IVF Group in relation to the Ni-
PGT testing including that those patients who had embryos classified as aneuploid as a result of Ni-PGT testing
may have had embryos destroyed or did not proceed to embryo transfer. Ni-PGT testing was suspended in
October 2020. As announced to the ASX on 21 August 2023, an amended statement of claim was filed in the
Supreme Court of Victoria which, amongst other things, seeks aggravated damages and exemplary damages from
the Group.
The Group filed its initial defense on 19 August 2022 in accordance with the Court’s directions and expects to file
its defense for the amended statement of claim in the coming months. The discovery process is continuing and the
Group has notified its insurers of the claim noting the cost of Monash IVF’s defense of the Class Action are currently
funded by its insurer. The claim does not specify an amount of damages and it is not currently possible to determine
the ultimate impact of this claim, if any, on the Group. The aggravated damages and exemplary damages claim,
and the costs of defending that, are uninsured. Legal costs and damages, if any, in excess of insurance proceeds
will be funded by Monash IVF.
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
6.4 Reporting entity
Monash IVF Group Ltd (the ‘Company’) is a for profit company primarily involved in the area of assisted
reproductive services and the provision of specialist women’s imaging services. Monash IVF Group Ltd was
incorporated on 30 April 2014. The Company is incorporated in Australia and listed on the Australian Stock
Exchange. Its registered office is at Level 1, 510 Church Street, Cremorne, Victoria and is limited by shares. The
consolidated financial statements comprise the Company and its controlled entities (collectively ‘the consolidated
entity’, ‘Monash Group’ or ‘Group’).
6.5 Basis of preparation
Statement of compliance
The consolidated financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards (AASBs) (including Australian Interpretations) adopted by the
Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial
statements of the Group comply with the International Financial Reporting Standards (IFRSs) and interpretations
adopted by the international Accounting Standards Board (IASB).
The consolidated financial statements were approved by the Board of Directors on 22 August 2023.
Functional and presentation currency
The consolidated financial statements are presented in Australian dollars, which is the functional and presentational
currency of the Company and the majority of the Group. Each entity in the Group determines its own functional
currency and items included in the financial statements of each entity are measured using that functional currency.
Rounding of amounts
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument
2016/191 issued by the Australian Securities and Investments Commission (ASIC), relating to the rounding of
amounts in the consolidated financial statements. Amounts in the consolidated financial statements have been
rounded off in accordance with that legislative instrument to the nearest thousand, unless specifically stated to be
otherwise.
Basis of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Monash IVF Group
Ltd as at 30 June 2023 and the results of all subsidiaries for the year then ended. Subsidiaries are all entities
over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to,
variable returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred
to the Group until the date on which control ceases. The acquisition method of accounting is used to account for
business combinations by the Group. Intra-group balances and transactions, arising from intra-group transactions
are eliminated at consolidation.
Non-controlling interests are measured initially at their proportionate share of the acquiree’s identifiable net assets
at the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are
accounted for as equity transactions.
The Group’s interests in equity-accounted investees comprise interests in associates. Associates are those entities in
which the Group has significant influence, but not control or joint control, over the financial and operating policies.
Interests in associates and the joint venture are accounted for using the equity method. They are initially recognised
at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements
include the Group’s share of the profit or loss and OCI of equity accounted investees, until the date on which
significant influence ceases.
112 | Monash IVF Group
86
87
Annual Report 2023 | 113
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
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Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
6.5 Basis of preparation (continued)
Basis of measurement
The financial report has been prepared on an accrual basis and is based on historical cost (unless otherwise stated),
except for derivative financial instruments and contingent consideration assumed in a business combination, which
have been measured at fair value.
Foreign currency translation
Transactions in foreign currencies are translated at foreign exchange rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated to the
functional currency at the exchange rate at that date. The foreign currency gain or loss on monetary items is the
difference between amortised cost in the functional currency at the beginning of the period, adjusted for effective
interest and payments during the period, and the amortised costs in foreign currency translated at the exchange
rate at the end of the reporting period. Non-monetary assets and liabilities denominated in foreign currencies that
are measured at fair value are retranslated to the functional currency at the exchange rate at the date that the
fair value was determined. Non-monetary items that are measured in terms of historical costs in a foreign currency
are translated using the exchange rate at the date of transaction.
Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition,
are translated to Australian dollars at exchange rates at the reporting date. The income and expenses of foreign
operations are translated to Australian dollars at exchange rates at the dates of the transactions. Foreign currency
differences are recognised in other comprehensive income (OCI), and presented in the foreign currency translation
reserve (translation reserve) in equity.
Use of estimates and judgements
The preparation of the consolidated financial statements in conformity with AASBs requires management to make
judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts
of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in
which the estimates are revised and in any future periods affected. The estimates and assumptions that have a
significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next
financial year are discussed below:
(i) Estimated recoverable amount of goodwill and other non-current assets
The Group tests annually whether goodwill has suffered any impairment in accordance with the accounting policy
for intangible assets. For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash inflows, which are largely independent of the cash inflows from other assets
or groups of assets (cash generating units, or CGUs). Refer to Note 2.6 for further details on impairment testing.
(ii) Provision for ECL on receivables
The Group calculates the doubtful debts provision under the ECL model. The Group assesses credit losses based on
the Group’s historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the
economic environment. Measurement of ECL allowance for trade receivables is disclosed in Note 2.1.
(iii) Provisions
A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation
that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the expected future cash flows at a post-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the liability. The
unwinding of the discount is recognised as a finance cost.
(iv) Deferred consideration
The measurement of deferred consideration requires management to estimate the amount likely to be paid in the
future. This requires the exercise of judgement, in particular where the amounts is payable is dependent to the
future financial performance of the business that has been acquired.
88
114 | Monash IVF Group
Monash IVF Group Limited
Notes to the Consolidated Financial Statements
for the year ended 30 June 2023
6.5 Basis of preparation (continued)
(v) Leases
The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that
include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts
the lease term, which significantly affects the lease liabilities and right-of-use assets recognised.
The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and
short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as
an expense on a straight-line basis over the lease term.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is
a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s
estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its
assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance
fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to
the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-
use asset has been reduced to zero.
Going concern
As at 30 June 2023, the group has a net current asset deficiency of $16,565,000 (FY22: $12,531,000). The
Directors consider that there are reasonable grounds to believe the Group will be able to pay its debts as and
when they fall due based on forecast operating cash flows which indicate that cash reserves are sufficient to fund
operations, the availability of committed but undrawn external debt facilities, and given certain current liabilities
such as employee entitlements and deferred revenue will not be fully settled in the short term to cause a liquidity
shortfall.
The Directors have considered forecast cash flow scenarios for at least the twelve month period from the date of
approval of these financial statements. As a result, the Directors consider that the Group is able to pay its debts as
and when they are due and these financial statements can be prepared on a going concern basis.
6.6 New standards and interpretations
A number of new standards are effective for annual periods beginning after 1 July 2022 and earlier applications
permitted; however, the Group has not early adopted the new or amended standards in preparing these
consolidated financial statements. The following new and amended standards are not expected to have a
significant impact on the Group’s consolidated financial statements:
•
•
•
•
Classification of Liabilities as Current or Non-current (Amendments to AASB 101)
Recognising deferred tax on leases (Amendments to AASB 112)
Disclosure of Accounting Policies (Amendments to IAS 1and IFRS Statement 2)
Definition of Accounting Estimates (Amendments to IAS 8)
89
Annual Report 2023 | 115
Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023Notes to the Consolidated Financial Statements continuedfor the year ended 30 June 2023
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FY23 Financial Report
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Monash IVF Group Limited
Directors’ Declaration
Directors’ Declaration
for the year ended 30 June 203
for the year ended 30 June 2023
1.
In the opinion of the Directors of Monash IVF Group Ltd (the ‘Company’):
(a) the Consolidated Financial Statements and Notes set out on pages 51 to 89 and the Remuneration Report
on pages 18 to 35 in the Directors’ Report, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
44 to 60
81 to 115
performance for the financial year ended on that date; and
(ii) complying with Australian Accounting Standards, the Corporations Regulations 2001; and
Independent Auditor’s Report
(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.
To the shareholders of Monash IVF Group Limited
2. There are reasonable grounds to believe that the Company and the Group entities identified in Note 5.1 will
be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed
of Cross Guarantee between the Company and those Group entities pursuant to ASIC Corporations (Wholly
Owned Companies) Instrument 2016/785.
3. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 by the
Chief Executive Officer and Chief Financial Officer for the financial year ended 30 June 2023.
4. The Directors draw attention to note 6.5 to the Consolidated Financial Statements, which include a Statement of
Compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors:
Dated in Melbourne, 22nd day of August 2023
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of Monash
IVF Group Limited (the Company).
The Financial Report comprises:
In our opinion, the accompanying Financial Report of
the Company is in accordance with the Corporations
Act 2001, including:
• giving a true and fair view of the Group’s
financial position as at 30 June 2023 and of its
financial performance for the year ended on that
date; and
•
complying with Australian Accounting Standards
and the Corporations Regulations 2001.
• Consolidated statement of financial position as
at 30 June 2023
• Consolidated statement of profit or loss and
other comprehensive income, Consolidated
statement of changes in equity, and
Consolidated statement of cash flows for the
year then ended
• Notes including a summary of significant
accounting policies
• Directors’ Declaration.
The Group consists of the Company and the
entities it controlled at the year-end or from time to
time during the financial year.
Mr. Richard Davis
Chairman
Mr. Michael Knaap
Chief Executive Officer and Managing Director
Basis for opinion
22 August 2023
22 August 2023
116 | Monash IVF Group
90
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit
of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with these
requirements.
KPMG, an Australian partnership and a member firm of the KPMG global organisation of independent member firms affiliated
with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and
logo are trademarks used under license by the independent member firms of the KPMG global organisation. Liability limited by
a scheme approved under Professional Standards Legislation.
91
Annual Report 2023 | 117
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Key Audit Matters
Key Audit Matters are those matters that, in our professional judgement, were of most significance in our
audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of the Financial Report as a whole, and in forming our
opinion thereon, and we do not provide a separate opinion on this matter.
Recoverable value of goodwill ($255.1m)
Refer to Note 2.6 to the Financial Report
The key audit matter
How the matter was addressed in our audit
At 30 June 2023 the Group’s balance sheet
includes goodwill related to three cash generating
units (CGUs) – Australia, International and
Ultrasound.
A key audit matter for us was the Group’s annual
testing of goodwill for impairment, given the size
of the balance (being 61% of total assets) and the
extent of judgement involved. We focused on the
significant forward-looking assumptions the Group
applied in its value in use models, including:
• Forecast cash flows, growth rates and terminal
growth rates in light of market conditions
impacting each CGU and continued economic
uncertainties post the COVID-19 pandemic.
These conditions impact our consideration of
forecasting risk; and
• Discount rates, which vary according to the
conditions and environment the specific CGU is
subject to.
The models are largely manually developed, use
adjusted historical performance and a range of
internal and external sources as inputs to the
assumptions. Modelling using forward-looking
assumptions tends to be prone to greater risk for
potential bias, error and inconsistent application.
Where the Group has not met prior year forecasts
in relation to a specific CGU, we factor this into our
assessment of forecast assumptions. These
conditions necessitate additional scrutiny by us, in
particular to address the objectivity of sources
used for assumptions, and their consistent
application.
We involved valuation specialists to supplement
our senior audit team members in assessing this
key audit matter.
Our procedures included:
• We considered the appropriateness of the
Group’s value in use methodology to perform the
annual test of goodwill for impairment against the
requirements of the accounting standards.
• We assessed the integrity of the value in use
models used, including the accuracy of the
underlying calculation formulas.
• We compared the forecast cash flows contained
in the value in use models to Board approved
forecasts.
• We assessed the accuracy of previous Group
forecasts to inform our evaluation of forecasts
included in the models.
• We assessed the Group’s underlying
methodology and documentation for the allocation
of corporate costs and corporate assets to each
CGU, for consistency with our understanding of
the business and the criteria in the accounting
standards.
• We considered the sensitivity of the models by
varying key assumptions, such as forecast cash
flows, growth rates and discount rates, within a
reasonably possible range. We did this to identify
those assumptions at higher risk of bias or
inconsistency in application and to identify those
CGUs at higher risk of impairment and to focus
our further procedures.
• We challenged the Group’s forecast cash flow and
growth assumptions having regard to the recovery
from the uncertainties arising from the COVID-19
pandemic, with a particular focus on the
Ultrasound CGU. We used our knowledge of the
Group, business and patients and our industry
experience.
• Working with our valuation specialists, we:
-
-
independently developed a comparable
discount rate range from publicly available
market data for comparable entities and
adjusted by specific risk factors to the Group
and the industry it operates in;
independently assessed the growth rates
based on the industry in which the Group
operates and current economic environment;
and
- compared the implied multiples for comparable
entities to the implied multiples from the
Group’s value in use models.
• We assessed the disclosures in the financial
report using our understanding obtained from our
testing and against the requirements of the
accounting standards.
Other Information
Other Information is financial and non-financial information in Monash IVF Group Limited’s annual reporting
which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible
for the Other Information.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s Report
(including the Remuneration Report), Appendix 4E and Corporate Governance Statement. The Chairman’s
Report, Managing Director & CEO’s Report, Financial Overview, Chief Financial Officer’s Report, information
on “Our Strategy” and “Our Pillars” and Shareholder Information are expected to be made available to us
after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
We are required to report if we conclude that there is a material misstatement of this Other Information, and
based on the work we have performed on the Other Information that we obtained prior to the date of this
Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
• preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting
Standards and the Corporations Act 2001
•
implementing necessary internal control to enable the preparation of a Financial Report that gives a
118 | Monash IVF Group
92
93
Annual Report 2023 | 119
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Shareholder Information
Shareholder Information
Additional information required under ASX Listing Rule 4.10 and not shown elsewhere in this Annual Report is as
follows. This information is current as at 28 September 2023.
Distribution of Shareholders – Ordinary Shareholders
Size of Holding
1 to 1000
1001 to 5000
5001 to 10000
10001 to 100000
100001 and Over
Total
No of
Shareholders
Ordinary
Shares
1,721
2,551
975
1,356
128
6,731
1,091,948
6,874,798
7,598,366
38,207,961
335,861,767
389,634,840
% of
issued
Capital
.28%
1.76%
1.95%
9.81%
86.2%
100.00%
The number of security investors holding less than a marketable parcel of 391 securities ($1.280 on 28/9/2023)
is 275 and they hold 39,450 securities.
true and fair view and is free from material misstatement, whether due to fraud or error
• assessing the Group and Company’s ability to continue as a going concern and whether the use of the
going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless they either intend to
liquidate the Group and Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from material
misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of the
Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf.
This description forms part of our Auditor’s Report.
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of Monash
IVF Group Limited for the year ended 30 June 2023
complies with Section 300A of the Corporations Act
2001.
The Directors of the Company are responsible for
the preparation and presentation of the
Remuneration Report in accordance with Section
300A of the Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included
within the Directors’ report for the year ended 30
June 2023.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
KPMG
Chris Sargent
Partner
Melbourne
22 August 2023
94
120 | Monash IVF Group
Annual Report 2023 | 121
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Shareholder Information continued
Shareholder Information continued
20 Largest Shareholders – Ordinary Shareholders
Rank
1
Name
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
CITICORP NOMINEES PTY LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
NATIONAL NOMINEES LIMITED
ARGO INVESTMENTS LIMITED
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
UBS NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED – A/C 2
PACIFIC CUSTODIANS PTY LIMTED
NEWECONOMY COM AU NOMINEES PTY LIMITED <900
ACCOUNT>
CITICORP NOMINEES PTY LIMITED
IPPOLITI PTY LTD
BNP PARIBAS NOMINEES PTY LTD
MR PRASHANT NADKARNI
VOLLENHOVEN INVESTMENT PTY LTD
MCLACHLAN FUTURE FUND PTY LTD
BNP PARIBAS NOMS PTY LTD
19 WARBONT NOMINEES PTY LTD
ONG ADMINISTRATION PTY LTD
20
Total for Top 20
Total other investors
Grand Total
Substantial Shareholders
No. of fully
paid shares
83,516,281
59,749,303
49,255,781
34,190,551
19,982,646
17,725,000
10,168,382
6,861,358
3,355,128
2,474,369
2,465,635
2,429,696
2,011,336
1,556,240
1,461,484
1,447,787
1,385,944
1,311,952
1,285,310
1,201,906
% of issued
Capital
21.43%
15.33%
12.64%
8.78%
5.13%
4.55%
2.61%
1.76%
.86%
.64%
.63%
.62%
.52%
.40%
.38%
.37%
.36%
.34%
.33%
.31%
303,836,089
85,798,751
77.98%
22.02%
389,634,840
100.00%
As at 28 September 2023, the following details the names of substantial shareholders in Monash IVF Group Limited
and the number of shares held, as disclosed in substantial holding notices given to the Company:
Rank
1
Name
CHALLENGER LIMITED
2
ARGO INVESTMENTS LIMITED
Voting Rights
No. of fully
paid shares
27,512,571
19,982,646
% of issued
Capital
7.06%
5.13%
In accordance with the Constitution, each member present at a meeting (whether in person, by proxy, by power of
attorney or by a duly authorised representative), upon a poll, shall have one vote for each fully paid ordinary
share.
122 | Monash IVF Group
Annual Report 2023 | 123
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.
124 | Monash IVF Group
Annual Report 2023 | 125
About Us
Year in Review
Chairman's, MD & CEO and CFO Reports
Our Strategy
Industry Growth Drivers
4 Year Metrics
Our Pillars
Board of Directors
Management Team
FY23 Financial Report
Financial Overview
Corporate Directory
Stock Exchange Listing
Auditor
The shares of Monash IVF Group are listed
by ASX Ltd on the Australia Securities
Exchange trading under "MVF".
Directors
Mr Richard Davis - Chairman
Mr Neil Broekhuizen
Mr Josef Czyzewski
Dr Richard Henshaw
Mr Michael Knaap
Ms Zita Peach
Ms Catherine West
Mr Malik Jainudeen - Company Secretary
KPMG Australia
Tower Two, Collins Square
727 Collins Street
Docklands VIC 3008
T +61 (0)3 9288 5555
Corporate Office
Level 1
510 Church St
Cremorne, VIC 3121
Website
www.monashivfgroup.com.au
Share Registry
Link Market Services
Tower 4, 727 Collins Street
Melbourne VIC 3000
Legal Clayton Utz
1 Bligh Street
Sydney NSW 2000
T +61 (0)2 9353 400
2023
Annual General
Meeting
Tuesday, 28 November
at 2pm
KPMG
Tower Two, Collins Square
727 Collins Street
Melbourne VIC 3008
— Level 36
— Meeting room 36.15
Virtual Meeting
The online platform for the AGM
can be accessed at -
https://meetings.linkgroup.com/MVF23
126 | Monash IVF Group
Annual Report 2023 | 127