Schweitzer-Mauduit International
Annual Report 2023

Plain-text annual report

Contents Our Strategy Who We Are Our Strategic Priorities and Performance Dashboard Executive Letters Letter from the Chairman Letter from the Managing Director and Chief Executive Officer Review of Segments Group Performance – Key Highlights and Summary of Financial Performance Seven The West Risk Management, People and Sustainability Risk Management and People Sustainability Governance Board of Directors Corporate Governance Overview Directors’ Report Remuneration Report Lead Auditor’s Independence Declaration Financial Statements Financial Statements Directors’ Declaration Independent Auditor’s Report Investor Information Shareholder Information Company Information 2 4 6 8 12 18 24 26 32 34 37 44 48 68 69 117 118 123 124 126 Dancing with the Stars 1 Who We Are Seven West Media is one of the most connected news, sport and entertainment brands in Australia. Reaching over 19 million Australians every month, we create mass culture experiences and audience impact on a scale that other brands can’t. We’re there for Australians and our work matters to millions. We unite Australia’s biggest viewing audience, create Australia’s most-loved content and tell important stories on a local and national scale. As a forward-thinking and pioneering media brand, we are also pushing the boundaries of what is possible in the digital age. We are audience focused and we are at the forefront of redefining the media landscape and shaping the future of the content industry in Australia. We are at the heart of national life in Australia and our content drives conversations, creates emotional connections with audiences, inspires, challenges and entertains. We’re where the crowd is. Seven West Media is a strong champion of diversity on screen and off, and we bring diverse voices and perspectives to the forefront and amplify stories that matter to Australians. Through our partnerships with community organisations and charitable groups, and with our own initiatives, we are using the power of our platforms to inspire a better “us”. We’re proud that our sustainability strategy is making a real difference in areas that matter to Australian individuals, families, communities and businesses. Broadcast Digital Other 2 3 Our Strategic Priorities and Performance Dashboard Seven West Media has an unrivalled ability to deliver the biggest national audience across all demographics for our commercial partners. Our platforms reach over 19 million Australians every month, across all screens and medias. Over the past year, we have demonstrated continuing success against the following strategic priorities: Content Led Growth Transformation > Revitalise our entertainment programming, creating momentum to engage heartland Australia > Sharpen our focus on being an audience and sales-led organisation > Be the most relevant and exciting offer to advertisers > Explore a meaningful subscription partnership play > Redefine our working practices, becoming more efficient and effective > Explore traditional and non-traditional adjacencies Capital Structure and M&A > Maintain focus to work down debt and improve balance sheet flexibility > Explore M&A opportunities Milestones Achieved > #1 National TV Audience Share > Successful extension of the AFL and Cricket agreements > New agreement with NBCU improves our offering to key demographics and adds to the content available on 7plus Milestones Achieved > Completed first phase of investment in dynamic trading platform, second phase underway with completion due mid-2024 > Digital earnings now greater than 49% of group earnings driven by BVOD > View Media Group investment completed during the year that expands the Seven Ventures portfolio Milestones Achieved > Balance sheet flexibility maintained > Net debt at $249 million and leverage ratio at 0.9x > Buyback program initiated and $15.0m paid under this program in FY23 4 Our strategy Seven West Media Limited Annual Report 2023We are maximising our unrivalled scale, reach and national brand to increase the audience and revenue share from our broadcast, digital and print businesses. our sport and entertainment offerings. Seven has continued this performance in the first half of the calendar year 2023, leading the year as the #1 national network in total people. agreement with NBCUniversal (NBCU). The NBCU agreement secures more than 1,400 hours a year of content across the 7Bravo linear channel and 7plus. For the 2023 financial year, Seven maintained its leadership as the most- watched national television network in Australia. Seven delivered more #1 results than any other network with our content spine being supplemented by Our content offering continues to improve, with the Group successfully extending our current AFL and Cricket agreements during the year, with the inclusion of digital rights for the first time, as well as entering into a new The Group continues to explore and refine our strategy as we set the foundation for the next phase of our growth. Strategic Outlook Management has developed the next phase of the strategy to position Seven West Media for the future, which is focused with digital at its core. This strategy builds on the foundations already set and prepares the business for the impact of the new content agreements signed this year. The most connected news, sport and entertainment brand in Australia Accelerate our Digital Future > Build Australia’s most loved and most watched free streaming service with 7plus to drive maximum audience, revenue and profitability > Create the future of sports streaming through our AFL & cricket launch > Deliver new technology and tools to drive our digital growth > Empower & upskill our people to lead our digital journey Enhance and Elevate the Brand > Re-imagine what 7 stands for in the market > Reset the meaning of ‘7’ in the hearts and minds of Australia > Build first choice for 7 across news, sport, and entertainment > Demonstrate the power of Seven West in West Australia Optimise the Business > Double down on our national reach to lead in audience and revenue > Optimise returns from existing asset base > Drive an efficient business in order to be more effective Partner for Growth > Create a unique and future proofed SWM > Drive audiences and revenue through partnership, industry and synergy 5 Letter from the Chairman Seven West Media performed well during the year, despite a softening of the overall TV and wider advertising market, while our transformation to a broadcast, print and digital business accelerates. Digital earnings contributed over 49% of our overall earnings, with highlights of the year including a new agreement between Seven Network and NBCUniversal to bring NBCUniversal’s extraordinary content portfolio to all Australians, live and free. The agreement will deliver hundreds of hours of content for 7plus across 12 months. The deal sees Seven acquiring and broadcasting NBCU’s scripted network and cable dramas and comedies on Seven and 7plus. Our new digital channel 7Bravo is the recipient of unique content and is experiencing an exceptional take-up by viewers. Another key development in the 2022- 23 financial year was the signing of new media rights agreements with the Australian Football League and Cricket Australia, ensuring the most popular winter and summer sports will remain on Seven – live and free – for many years to come. Importantly, the new agreements give us digital rights to both sports for the first time. The combination of AFL and cricket will give 7plus more than three billion minutes of new content and it will change the way sport is watched online. We are delighted that the new OzTAM Virtual Australia ratings system, known as VOZ, is already supplying more accurate data on our unparalleled broadcast and digital audience. VOZ is expected to drive higher revenue and profits for Seven in the coming years. The VOZ system measures the number of viewers more accurately across traditional TV and free-to-air apps and digital channels, which are broadcasting unique content that can be accessed any time of the day on a wide range of devices. The total pool of revenue from this more accurate measurement of audiences is estimated to be worth $6.5 billion, and we are confident we will pick up a major share of the incremental revenue. Following the Government’s election commitment to legislate a prominence framework, we have worked with the industry and proposed a solution to Government that retains free and prominent carriage of our trusted local TV services on connect TV. We call on the Government to legislate the prominence framework as soon as possible. The acquisition of Prime Media Group has given us direct access to Australia’s largest regional audience and provided an expected fillip to our audience and resultant expenditure by both large and small advertisers on our broadcast and digital platforms. This was evidenced in our highly successful 2022 Commonwealth Games coverage, as well as across all of Seven’s news, sport and entertainment content throughout the year. Seven Network continues to be the most watched free to air network and digital platform in Australia, reaching and engaging 91% of the population, with more than 13 million 7plus users. Our free to air programs continue to attract strong audience numbers from dawn with Sunrise to late night, with our general entertainment programs, including The Voice and Farmer Wants A Wife, backed up by news programs that are building their audiences. Our award-winning coverage of AFL, cricket and horse racing again dominated the ratings during the year. ” Seven Network continues to be the most watched free to air network and digital platform in Australia, reaching and engaging 91% of the population, with more than 13 million 7plus users.“ 6 Executive Letters Seven West Media Limited Annual Report 2023Meanwhile The West’s print operations, with 21 titles across city and regional areas in Western Australia, continue to be enhanced by a compelling digital offering, with exclusive podcasts and other content tailored to largely younger audiences. A highlight for The West and Seven in 2022 was the record $71.3 million raised through Telethon, with the 103 beneficiaries creating life-changing opportunities for the children of Western Australia. Our strategy to focus on content-led growth and market-leading digital assets, balanced by further cost efficiencies across the board, have set up the Group for another very strong year. On behalf of the Board, I thank you, our shareholders, and our staff for your ongoing support of Seven as we chart an exciting new course in Australia’s media sector. Kerry Stokes AC Chairman 7 Letter from the Managing Director and Chief Executive Officer Over the past 12 months, our company has cemented its position as Australia’s leading national total television business. We often talk about that, but what does it actually mean? It means we are the only company with a truly national broadcast network, covering all capital cities and all corners of regional Australia. It means we have a truly national digital platform, including 7plus and 7NEWS.com.au. Add in our remarkable print and digital business in Western Australia and our national reach and impact is unrivalled. Of course, people increasingly don’t think TV or digital when they turn to our content. They are looking at screens – a TV set, a mobile phone, a laptop, a tablet – and it often doesn’t matter what that screen is. What matters is the content. I’m proud to say Seven West Media has the best content, be it news, sport or entertainment, regardless of how people view and engage with it. Moreover, we are an audience-first company, 100% focused on what our audiences want. We deliver big audience numbers. Just as important is our proven ability to create and deliver mass culture experiences, from the nightly news to the AFL Grand Final, from the Bathurst 1000 to the finale of Farmer Wants A Wife, and from Home and Away to the FIFA Women’s World Cup. We curate, shape and drive conversations with Australian-made content. Mass culture experiences happen through television, which reaches and grabs the attention of more Australians than any other medium. Given the depth, breadth and authenticity of our content, Seven can create mass culture experiences like no one else. Our digital present and future The changes in the way people watch, read and engage with our content are reflected in how our company has changed in recent years. Seven West Media is now a business with digital at its core. When we talk about the screens of Seven we mean all screens, including the digital versions of the Seven Network and The West Australian and digital-only products such as 7plus and 7NEWS.com.au. Over the past three years, our digital earnings have grown at a compound annual growth rate of more than 65% to $139 million, well ahead of the market’s growth and our competitors. Digital earnings for FY23 were $139 million and now accounts for 49% of underlying group earnings, up from just 2% five years ago. Active users of 7plus stand at nearly 6 million and that is driving significant minutes growth as average consumption per user continues to increase. People often think about BVOD services such as 7plus as simply catch-up TV, but in the case of 7plus, that is wrong. 7plus offers more than 50 linear channels across both broadcast and FAST (Free Ad-Supported Streaming Television) channels and over 62% of content consumed is exclusive to 7plus, that is, it is not on broadcast. A large proportion of the minutes watched on BVOD in Australia happen on 7plus. That is an impressive result when you consider it has been achieved without any regular tier one digital sports rights – something that is about to change. PwC has forecast that the BVOD advertising market will grow from $520 million in 2022 to $1.6 billion by 2026. In such a rapidly growing market, we have two simple goals: to capitalise on that growth and to capture our unfair share of the market. As always, content is at the heart of everything we do and over the past year or so, we have made significant strategic content investments specifically for 7plus. Through our ground-breaking NBCUniversal deal, which was completed in October 2022, we have secured more than 1,400 hours a year of the world’s best premium entertainment, reality and crime content, running as both a live linear channel (7Bravo) on broadcast and 7plus and on-demand. It’s a long-term agreement designed specifically to drive high-value female audiences to 7plus, and it is already working. 8 Executive Letters Seven West Media Limited Annual Report 2023Another important development is our partnership with Amazon, whose technology is powering our recently launched personalisation engine. 7plus is the only BVOD platform in the market to have personalisation. It’s a clear differentiator versus our peers and it is proving to be key in driving audience engagement, retention and growth. Using AI and ML models, it provides content recommendations for every individual user based on their viewing behaviours, time of day preferences and more, driving not only relevancy but increased discoverability of our deep library of more than 15,000 hours of content. Early results have shown the incredible impact this is having on retention and daily active usage. Personalised content shelves have delivered a 20% to 50% increase in minutes versus previous consumption metrics. Since the launch in January, we have seen month on month growth in minutes of 31.7%. We expect our NBCUniversal content to deliver almost two billion minutes across the full year. We have also secured the digital rights to Australia’s number one summer and winter sports – cricket and the AFL. It’s not overstating it to say that the acquisition of these rights will be the biggest change in the history of Australian streaming. When AFL and cricket go live on 7plus from September 2024, it will mark the first time they have ever been offered live and for free on a streaming platform. They will represent more than 800 hours of live, tier one sport, delivered across 50 weeks of the year. The combination of AFL and cricket will deliver more than three billion minutes of consumed content annually; that’s the equivalent of an Olympic Games every year on 7plus, but far more monetisable. It is content for 12 months of the year, delivering consistent audience numbers Monday to Sunday, not massive peaks and troughs, and it’s right in the middle of the audience segments that advertisers want to reach. 9 ” The success of Seven West Media is built on our people, on and off camera, in our newsrooms and across all our departments. Their talent, commitment and enthusiasm has underpinned the transformation of our company over the past four years, lifted us to #1 and set us up for the future“. Obviously, monetising this audience is fundamental to how we make money, and enhancing the advertising experience and opportunity is a key focus. On a total audience basis, we are securing BVOD CPMs on 7plus at two times the level of metropolitan broadcast, and three times the level of regional broadcast. That’s a material step up which is driven by our ability to manage ad loads in order to reduce wastage in BVOD, and by targeting and data monetisation, which attracts a CPM premium of about 30%. Approximately 80% of our inventory is sold with some form of data overlay and targeting, driven by our own first party data and existing data partnerships with businesses including Equifax, Credit Bureau and Ticketek. This year we also secured an exclusive partnership with Visa Consulting & Analytics, giving us access to the transactional data of the 60% of Australians who hold a Visa card and, just as importantly, access to Visa’s advanced customer insights. A key part of our digital transformation is CODE7+, which will be the most advanced trading platform in Australia. It will enable our customers to buy seamlessly and on a converged basis across national broadcast and BVOD; driving dynamic revenue yield optimisation; and improving our inventory utilisation by more effectively managing campaign goals and commitments. The establishment of CODE7+ will be completed in 2024 and will make us more competitive in the $6.5 billion total TV advertising market. Payback on the approximately $40 million investment in the new platform is expected within 18 months. Winning audiences Our owned national reach is unmatched. We are the one place to come and target all Australians, reaching more than 91% every month, which is a powerful proposition given audience fragmentation. Thanks to the acquisition of the assets of Prime Media Group during 2021-22, Seven is the only broadcaster that owns its regional network. This gives us a strong presence among the 9.3 million people who live in regional Australia. Audience reach doesn’t mean much unless you are giving people what they want to watch. The past year has shown, yet again, that Seven has that sought-after content, with the #1 evening news bulletin in 7NEWS (with a growing margin over its closest rival), the #1 breakfast TV program (Sunrise has been #1 for 19 years and is set to make it 20 years), the #1 morning TV program, the #1 winter sport with the AFL, the #1 summer sport with cricket, the #1 game show with The Chase Australia and the #1 local drama series with Home and Away. Our general entertainment slate continues to perform well, with hits such as Farmer Wants A Wife, The Voice, Dancing With The Stars, Australian Idol, SAS Australia, My Kitchen Rules, Big Brother and more. No one can match Seven’s sports line-up. Headlined by the AFL and cricket, it also includes Supercars, horse racing and the recently concluded ICC World Test Championship Final and the FIFA Women’s World Cup. VOZ The launch of next-day Virtual Australia (VOZ) audience data on 1 May this year was a game changer for our industry, and something Seven had been championing for several years. VOZ is a world-leading, independent, third party verified audience measurement system that provides a single source of truth on the audience reach across metropolitan and regional TV and BVOD, de-duplicating viewers and capturing co-viewing in connected homes. The next-day VOZ data is national and rich. It creates one national dataset for marketers and agencies. It reveals, for the first time, the incremental audience watching only on BVOD. Above all, it shows how many people are actually watching TV content, regardless of the device. VOZ demonstrates the increased audience reach advertisers get when buying across national broadcast and BVOD, which we can then incrementally monetise. Our test campaigns with major advertisers adding BVOD as incremental to their budget have demonstrated 28% incremental reach and the cost per reach point reducing 21% as a result. The West The West is an outstanding business, dominating its market like no other news brand in Australia with the most read print and digital products in the state. The West’s print and online products reach 3.8 million people each month, including three in four Western Australians. That is the highest cross- platform reach among Australia’s major metropolitan mastheads. 10 Executive Letters Seven West Media Limited Annual Report 2023In May we farewelled Andy Kay, who retired as General Manager of Seven Network Adelaide and our Head of Olympics and Commonwealth Games. Andy joined Seven in 1984 and went on to become one of the Australian television industry’s most respected and successful executives. His experience, talent and dedication to Seven have been remarkable, and he made an invaluable contribution to our business and the Australian media industry. We will miss him, and no one can fill Andy’s shoes, but we were delighted to recruit Vikki Friscic, one of the most highly regarded media executives in Adelaide, as Seven Adelaide’s new Managing Director. Finally, thank you to all our shareholders and staff for your support. The year ahead will bring some challenges, but I firmly believe our company is in a strong position to deliver the content Australians want – in the way they want to engage with it – and to capitalise on the opportunities the next 12 months will bring. James Warburton Managing Director and Chief Executive Officer In the 12 months to 31 March this year, the Monday-to-Friday and Saturday editions of The West Australian and The Sunday Times increased their readerships, now collectively reaching 778,000 people (aged 14 years and over) in Western Australia each week. Early trading indicates our underlying revenue is tracking to FY23 market trend in July and August, whilst September is currently pacing ahead of last year. We expect the total TV market to stabilise during the second quarter as the comparatives ease. The West’s ongoing strategy of holding the line on print, accelerating the digital future and reducing costs remains successful, with digital growth offsetting the decline in print. Paywall penetration is growing, with digital subscriptions revenue up 17%. Capital structure and M&A Other assets include our venture portfolio, through which we make investments in businesses that we can use our assets to help grow predominantly in exchange for advertising inventory. The portfolio consists of several different consumer- focused companies and is valued at over $100 million. The most recent and largest investment is ViewMedia Group, a new property technology business backed by Antony Catalano, Thorney Investments and ANZ that offers consumer and business solutions in Australia’s $300 billion real estate transactional market. Outlook Seven ended the 2022-23 financial year with a 38.5% share of the total TV advertising market and is targeting a 40% total TV revenue share in FY24. The FY24 content schedule has been optimised to maximise our total TV audience. Our FY24 Group operating costs will be in the range of $1.26 billion to $1.27 billion as we make investments into content and digital capabilities, however, will continue to look for ways to drive efficiency into the business. While advertising market conditions have softened this year, analysis of past cycles shows that following any material retraction in advertising due to economic cycles, there was a strong recovery the year after – and in the year after that, advertising revenue for the TV sector was higher than the previous year. Of course, our company is very different now compared to four years ago, with a solid balance sheet that positions us well to cycle softer market conditions, and a strong digital focus. Our people The success of Seven West Media is built on our people, on and off camera, in our newsrooms and across all our departments. Their talent, commitment and enthusiasm has underpinned the transformation of our company over the past four years, lifted us to #1 and set us up for the future. One of the most significant moves over the past year has been the combination of our two Sydney operations, with News and Public Affairs moving from Martin Place to a refurbished, state- of-the-art centre in Eveleigh. The move means that for the first time in over 40 years, everyone in Sydney is at the one site. During the year we welcomed two new senior executives: Chief Marketing and Audience Officer, Melissa Hopkins, and Chief People and Culture Officer, Lucinda Gemmell. It’s great to have both of them onboard and they are already making a significant contribution to our business. 11 Review of Segments Seven West Media Limited Annual Report 2023 Group Performance Key Highlights 12 Digital earnings now make up over 49% of Group EBITDA # 1 National TV network third year in a row Content line up locked in until FY31 across AFL, Cricket and NBCUniversal agreements inclusive of digital rights for all agreements Net debt at Leverage $249m 0.9x at year end Total TV audiences growing on key assets; unrivalled reach Australian Idol 13 Summary of Financial Performance Revenue Other income Share of net profit of equity accounted investees Revenue, other income and equity accounted profits Operating expenses excluding depreciation and amortisation EBITDA1 Depreciation and amortisation EBIT2 Net finance costs Profit before significant items and tax Significant items excluding tax Profit before tax Tax expense Profit after tax Less: significant items including tax Profit after tax excluding significant items EBITDA margin Basic EPS Basic EPS excluding significant items net of tax Diluted EPS Diluted EPS excluding significant items net of tax FY23 $’000 FY22 $’000 Change3,4 % (3.3%) (84.6%) 38.4% (3.4%) 0.9% (18.2%) 24.9% (22.9%) (0.7%) (25.8%) nm (30.8%) (30.5%) (30.9%) nm (27.1%) 1,487,256 1,538,537 168 440 1,487,864 (1,208,119) 279,745 (41,479) 238,266 (35,210) 203,056 (7,015) 196,041 (50,294) 145,747 (562) 146,309 18.8% 9.4 cents 9.4 cents 9.2 cents 9.3 cents 1,092 318 1,539,947 (1,197,757) 342,190 (33,197) 308,993 (35,456) 273,537 9,854 283,391 (72,339) 211,052 10,293 200,759 22.2% 13.3 cents 12.7 cents 13.0 cents 12.4 cents 1 EBITDA relates to profit before significant items, net finance costs, tax, depreciation and amortisation. 2 EBIT relates to profit before significant items, net finance costs and tax. 3 Change percentages are calculated on whole dollars and not the rounded amounts presented. 4 “nm” means “not meaningful” Better Homes and Gardens 2023 Cast 14 Review of Segments Seven West Media Limited Annual Report 2023Seven West Media Limited reported a statutory profit before tax of $196.0 million for the year ended 30 June 2023. This compares to a corresponding year statutory profit before tax of $283.4 million. Excluding significant items, the current year profit after tax of $146.3 million is down 27.1% on the previous year equivalent profit of $200.8 million. The Group delivered revenue including share of equity accounted investees profits of $1,487.9 million, down 3.4% versus the previous year. The current macroeconomic inflationary environment impacted the Group’s revenue results during the year, with the total TV advertising market down 7.9% in FY23. This was partially offset by the continued benefits from the Prime acquisition completed in FY22. The Group’s position as a National TV network continues to resonate in the market. Total Group costs, including depreciation and amortisation, increased $18.6 million representing a 1.5% increase year on year. Group costs increased during the year due to the continued investment in programming, the full year of costs in relation to the Prime acquisition, as well as impact from the high inflationary environment impacting suppliers and salary costs. These increases were offset by the reduction in major sport event costs with the broadcast of two Olympic Games in FY22 compared to the Commonwealth Games in FY23. EBITDA relating to profit before significant items, net finance costs, tax, depreciation and amortisation of $279.7 million was down 18.2% on the previous year. Significant item net costs before tax of $7.0 million in the period, relates to costs incurred for Major IT Project implementation costs being partially offset by fair value gains recognised on the Group’s ventures portfolio and gain on the sale of Pyrmont and Mackay property sales. The implementation costs relate to the build, configuration and customisation costs incurred in relation to a SaaS based project that will deliver future economic benefits for the Group, however, are required to be expensed immediately under recent changes to Accounting Standards. Prior to this change, these costs would have been capitalised and amortised over the expected life of the software. The prior year significant item net gains before tax of $9.9 million included the income received in the Prime Media Group acquisition, disposal of GSTV, reversal of onerous contracts, fair value adjustments and write off of previously capitalised borrowing costs as a result of the debt refinancing. During FY23, the Group commenced a share buyback program that resulted in the purchase of 36.5 million shares for a total consideration of $15.0 million. This represented approximately 23% of the shares able to be purchased under the program. This program has received approval for the Board in August and will continue in FY24. 7NEWS Sydney team 15 Review of Segments Seven West Media Limited Annual Report 2023 Australian Idol – Channel 7 and 7plus Balance Sheet As at 30 June 2023, the Group’s assets exceeded its liabilities by $378.8 million (25 June 2022: $263.7 million). The Group has positive net current assets as at 30 June 2023 of $116.2 million (25 June 2022: $18.4 million). Other net cash outflows for the year include payments for capital expenditure, leases, share buyback program and other investment opportunities. Cashflow during FY22 was impacted by the acquisition of Prime Media Group. Net Debt As at 30 June 2023, the Group held net debt of $249.4 million, compared to $256.5 million in the prior period. The Group continues to see the benefit from the improved terms negotiated as part of the refinancing in October 2021, with these improved terms able to partially offset movement in market rates during the year. The Group has been in compliance with its financial covenants to date, including the period ended 30 June 2023. Net debt / EBITDA remains prudent at 0.9x, while interest cover ratio was strong at circa 18.0x. Cashflow Cashflow continues to be robust with net cash inflows of $19.5 million. Operating cash inflows of $77.4m, were down $82.8m and impacted by the increase in tax payments during the year. Tax payments for the year of $85.6m have increased on the back of the final tax payment for FY22 and monthly tax instalments paid in FY23. The prior year tax cash flows relate to tax instalments only paid in H2 of FY22. Excluding tax payments, net operating cash inflows of $163.0 million, were down 13.2% on the prior year due to movements in working capital. Working capital during the year was impacted by the revenue declines experienced and the Group continued to invest in its programming line-up. Ventures Seven West Ventures has expanded during the financial year with the finalisation of our investment into View Media Group and the fair value uplift on a number of these ventures. View Media is a real estate digital media and agent services business. It comprises a suite of property technology platforms which offer consumer and business solutions in Australia’s $300 billion real estate transactional market. There is a clear opportunity for View Media to disrupt the property industry. It has a very clear strategy that includes rolling up strategic assets to build its position and setting up group businesses such as a listing portal, real estate marketing agencies and AI driven property lead platforms and services. These ventures are opportunities where we leverage the power of our assets to unlock maximum growth potential and drive long-term value creation. The portfolio is focused on disruptive, scalable businesses with a strong consumer or media proposition. 16 Australian Idol The Group continues to see the benefit from the improved terms negotiated as part of the refinancing in October 2021, with these improved terms able to partially offset movement in market rates during the year. 17 Review of Segments Seven West Media Limited Annual Report 2023 Review of Segments Seven The Front Bar 18 Seven is Australia’s #1 National Total Television company. The acquisition of Prime in December 2021 has also strengthened our proposition to advertisers. We are pursuing the opportunity created by Prime to increase our presence in regional markets, especially through the 7plus platform. Our linear broadcast now reaches more than 91% of Australians, allowing us the opportunity to increase our share of the $3.6 billion FTA national TV and BVOD advertising market. ThinkTV reported that the total TV advertising market decreased by 7.9% to $3.6 billion in the financial year. The content strategy continued throughout the financial year, with Seven’s content spine of Sunrise, The Morning Show, The Chase, News, Home & Away, Sport and tentpoles delivering audience consistency and strength. This programming line-up, coupled with acquisition of Prime, has resulted in Seven being the #1 National Total TV Network. Seven’s strategy continues to focus on acquiring, engaging and retaining advertising-friendly audience demographics. Our aim is to deliver the best entertainment, news and sport content to engage these audiences at scale. The evolving entertainment schedule is continuing to enrich the demographic profile of the network and enhances our proposition for advertisers. The evolving entertainment schedule is continuing to enrich the demographic profile of the network and enhance our proposition for advertisers. Bruce McAvaney 19 Seven Network Our programming slate resulted in the Group continuing to deliver audience consistency and strength and ensured Seven retained its position as the #1 network for National audience share for the third year running in FY23. Our content strategy underpinned the renegotiation of the AFL and Cricket agreements, with the inclusion of digital rights from FY25, and the new NBCU agreement that commenced in mid- January 2023. These long-term rights secure the content foundation for the network and will be the pillars for which the remaining content library will be based around. Seven’s programming schedule begins each day with Sunrise, which remains Australia’s most-watched breakfast show for a 20th consecutive financial year. The Morning Show celebrated its 15th birthday as the most-watched morning show. Home and Away continues to be the # 1 Australian drama on free to air. Rounding out Seven’s dominance throughout the day is The Chase that provides the lead-in to Seven’s market leading nightly news service. It remains the most trusted source of broadcast news in the country with our evening 6pm news bulletin continuing to average over 1 million capital city viewers in 2022. Seven is also the home of Australia’s #1 sport, with the AFL. For FY23, the Group achieved a 38.5% total TV television revenue share, with the second half share growing on FY22. We remain focused on growing our share into FY24 and have made investments in our content line up in FY24 and beyond to improve these results. Seven’s revenue decreased by 3.8% to $1,315.9 million which was impacted by the decrease in the advertising market, being partially offset from the full year contribution from the Prime. Costs increased by 1.1% to $1,051.2 million, which also includes the full year impact of the Prime transaction. EBIT decreased 23.8% to $225.5 million. Seven’s The Great Debate - The Final Showdown 20 Review of Segments Seven West Media Limited Annual Report 2023Seven Revenue Costs EBITDA EBIT FY23 $m FY22 $m Inc/(Dec) % 1,315.9 1,367.9 (1,051.2) (1,039.9) 264.7 225.5 328.0 295.8 (3.8%) 1.1% (19.3%) (23.8%) We remain focused on growing our share into FY24 and have made investments in our content line up in FY24 and beyond to improve these results. Farmer Wants A Wife Season 13 21 Review of Segments Seven West Media Limited Annual Report 2023 Digital platforms 22 Seven’s Broadcast Video on Demand (BVOD) streaming platform 7plus streamed a total of 13.1 billion minutes in FY23, an increase of 1.4% year on year (excluding major sport events of Commonwealth Games in FY23 and two Olympics in FY22). greater opportunities for customers, with the addition of BVOD, in their future campaigns. Total digital revenue included within the Seven business increased by 1.0% during the year to $179.4 million. 7Digital EBITDA now represents over 49% of Group EBITDA. Seven’s major events and tentpole programming supported the continued growth in consumption on 7plus, building on the audiences that the platform’s library content continues to deliver. Registered and verified users on 7plus streaming platform finished FY23 at 13.5 million and 7plus is averaging nearly 6 million active users on a rolling 3 month basis. The growing scale of 7plus’ registered audiences, together with a series of premium second-party data sharing arrangements, continued to grow the 7REDiQ platform. 7REDiQ continues to enhance our digital audience targeting capabilities, unifying insights and data analytics across the Group. This data offering delivers premium revenue for the Group and supports the growth in the overall BVOD market as well as Seven’s share of that market. The Group continues to invest in the 7plus platform across all mediums, with a focus on user experience and seeking to continue to add innovative features, functionality and optimisations. The personalisation driving engine is one of these features, which has been developed in partnership with AWS and has seen early results delivering 20- 50% increase in minutes versus previous metrics. More features are regularly added to continue to improve the user experience. The industry’s audience measurement platform VOZ launched in May and is starting to demonstrate the incremental demand for BVOD, enabling the delivery of premium experiences for customers. Use of the data in case studies has already shown that we can drive incremental reach at the same time delivering a reduction for customers in cost per reach of greater than 20%. This is expected to deliver Registered and verified users on 7plus streaming platform finished FY23 at 13.5 million and 7plus is averaging nearly 6 million active users on a rolling 3 month basis. 23 Review of Segments Seven West Media Limited Annual Report 2023 The West 24 West Australian Newspapers performed well during the year, reaching over 400,000 subscribers and registered users. Publications include The West Australian, The Sunday Times, 19 regional publications, 11 suburban newspapers and the State’s most popular news website thewest.com.au and perthnow.com.au. back of award-winning journalism and newspaper presentation. The West Australian averages 358,000 print readers every day and 497,000 on the weekend. The Sunday Times averages 418,000 readers every weekend. The West Australian news brand now have a collective 4.5 million unique monthly audience, an increase of 22% since IPSOS measurement commenced in August 2022. The strong performance of thewest.com.au, perthnow.com.au, West Regionals and growth from new platforms launched during the year such as Streamer.com.au and The Game (App) all contributed to this growth. The West continues to transform its business with a strong focus on driving a greater share of its revenue from digital subscription and circulation, through high quality local editorial. The result of this focus is demonstrated in the leading readership and circulation results, as well as the strong growth in digital subscriptions revenue, up 17% YoY. In print, The West Australian Monday to Friday continues to have the highest market reach of any major metropolitan weekday masthead in the nation, with 15.9% of Western Australians on average reading an issue of the weekday edition. Average weekday readership of The West Australian was steady in the 12 months to March 2023. The latest data from Roy Morgan to March 2023 indicates circulation numbers have risen 15% in the past year for the Saturday newspaper and 52% for the Sunday newspaper on the West Australian Newspapers, alongside Seven, continues to benefit from the landmark commercial agreement to provide Google and Facebook news content, supporting The West’s investment in high quality journalism and content. Evidence of this investment includes a new ‘Subscribe with Google’ marketing initiatives and innovative digital products such as streamer.com.au. While economic conditions were strong in WA, advertising conditions were mixed. Strong retail trade continued to translate into advertising spend. However Automotive and Real Estate are still affected by limited supply and extremely volatile conditions with multiple builders going into administration. Travel is improving, but still well down on pre COVID-19 spend levels. Overall total revenue increased $1.5 million or 0.9% to $170.8 million. Rendering of services increased $1.8 million or 19.7% due to an increase in commercial printing. The West’s advertising revenue declined 2.3% in the year and circulation revenue declined 1.1%. Operating costs continue to be an ongoing focus. The West’s costs excluding depreciation & amortisation increased $3.9 million or 2.9% to $139.5 million in FY23. This was due to an increase in newsprint costs of $4.8 million or 35.6%, whilst personnel costs were flat YoY. WAN Revenue Costs EBITDA EBIT FY23 $m 170.8 (139.5) 31.3 29.5 FY22 $m 169.3 (135.6) 33.7 33.2 Inc/(Dec) % 0.9% 2.9% (7.1%) (11.1%) 25 Risk Management and People Risk Management Seven West Media maintains sound risk management systems in order to protect and enhance shareholder value. The Board acknowledges that the management of business risk is an integral part of the Group’s operations and that a sound risk management framework, aligned to its strategy, not only helps to protect established value, but can also assist in identifying and capitalising on opportunities to create value. The table below sets out the key risks (in no particular order) which could impact achievement of the Group’s strategic objectives. These risks are actively monitored under our risk management framework and there are processes in place to identify, measure, evaluate, monitor and report on each of them and then control or mitigate them, to the extent possible. For more information on the Group’s risk management framework refer to pages 37 to 43 of this Annual Report for the Corporate Governance Statement. Risk Management Framework – Key Risks and Mitigations Strategic Objective Risk Category Content-led Growth Competition for key sports and entertainment rights The Group recognises the value of premium content to its audiences and advertisers and the importance of the Group securing rights or creating attractive content at a sustainable cost. Structural change and new competitors for audiences The rapid transformation of the media industry due to technological change represents a material economic sustainability risk for the Group. Mitigations The Group ensures a disciplined approach is maintained in acquiring content rights and production resourcing. For these rights acquired, the focus is on maximising the revenue opportunities that these rights present, including by targeting key demographics for advertisers and demonstrating the return on advertising investment through reliable measurement systems. During the year, the Group secured an extension of its Cricket and AFL rights with the inclusion of digital rights, as well as the new NBCUniversal agreements covering linear and digital content across the dedicated 7Bravo and on-demand. The Group is responding to and participating in this change under its current strategic framework, including via continued investment in the rapid digital transformation of the Group. The Group continues to target leadership in the most valuable linear broadcast demographics which, together with our 7plus Broadcast Video on Demand (“BVOD”) service, allows for growth in audiences and greater returns on the investments in content. In addition, the Group’s data product, 7REDiQ, continues to improve the outcomes for advertisers and viewers through the delivery of better contextualised advertising. 26 Risk Management, People and Sustainability Seven West Media Limited Annual Report 2023Risk Management Framework – Key Risks and Mitigations Strategic Objective Risk Category Transformation Technological risk There is an ongoing risk that the Group’s technology may not be fit for purpose or that major technology projects may not be delivered to plan, impacting business performance or requiring new investment. There is also the risk that key technology may fail resulting in loss of revenue and audiences. Regulatory change The television industry is subject to a high degree of regulation including broadcast licence conditions. Changes to these conditions can have a material impact on the costs of operation and the ability of the Group to compete with global competitors. Cyber security risk Noting the increasing frequency and severity of cyber security attacks globally, there is a risk that the Group’s systems may be subject to such an attack. The Group recognises that such incidents, should they occur, may negatively impact financial and operational performance. This can include the loss of Group and customer data. Capital Funding Availability There is a risk to the availability of the capital funding required to meet the Group’s operating and strategic requirements. This risk arises due to some or all of the following factors: > the structural changes in the media industry; and > the success of the Group’s content and audience strategies. Execution of M&A strategy There is a risk that the M&A activity that is entered into does not realise the expected benefits and strategic alignment to the Group’s strategy when it was entered into. Capital Structure and M&A Mitigations The Group has increased its technology capabilities through enhanced staffing expertise, project delivery governance and reporting processes to better manage this risk. The Group continues to manage risks which could give rise to a failure in core operational systems and processes through Business Continuity Planning including system and site redundancy. Management maintains a specialised expertise in regulatory matters and participates in regulatory reviews through direct engagement and via representation on a variety of industry bodies. The Group continues to engage with the Federal Government following the release of the Media Reform Green Paper to participate in the creation of a new regulatory framework for the future of the Australian free-to-air industry. All Group staff receive ongoing training to ensure that they are aware of the risks that cyber attacks pose and their role in preventing incidents from occurring. The Group also continues to grow its investment in the technical staff and systems required to appropriately manage the potential adverse effects on the Group. The Group has access to liquidity at reporting date across its debt facilities and existing cash reserves. The availability of funding is a key focus of the Group as it executes its strategic objectives, and is monitored daily. The Group debt facilities are due to expire in October 2024 and the Group maintains close discussion with lenders, as it looks towards a refinancing of these facilities in the next 12 months. The Group ensures that M&A transactions that are entered into meet stringent hurdles to achieve the best possible outcome for our shareholders. Detailed integration plans accompany any M&A transaction so that any transaction is successfully integrated. The Group continues to benefit from its acquisition of the Prime Media Group in December 2021 which expanded our national reach and improved our total TV ad market proposition to advertisers. 27 People At Seven West Media, we understand that our people ensure our success and in return, we are committed to creating a workplace where employees can fulfil their individual career aspirations and potential and that they are inspired by a high- performance culture and rewarded for achievement and results. Management works to promote a collaborative and innovative workplace that is safe, flexible, inclusive and that fosters creativity and excellence. This ensures that the Company continues to meet the highest performance standards and serves the evolving needs of our stakeholders, our customers and our audiences. People Policies & Practices We have a comprehensive set of frameworks that support our culture to build a high-performance workplace and drive our focus on results, productivity and safety. Our purpose, strategy and values focus our efforts and determine how we measure our success. The intent of our people policies and practices is to create a workplace where employees are assured that: > Minimum legal requirements are being met; > Employees, as well as the Company are protected > Best practices appropriate to the Company can from the pressures of expediency; and be documented and implemented; > The Company’s values are promoted. > Management decisions and actions are fair, consistent and predictable; Fundamental to building a high-performance culture are the Company’s strategic People pillars: Transformation Wellbeing & Safety The continuity and resilience of our business operations are crucial for serving the needs of our people, audience and customers, upholding community trust and maintaining the Company’s reputation. Our technology infrastructure and platforms require ongoing maintenance and updates to ensure network, software applications and hardware are resilient to ensure we effectively mitigate risk across the business. Business processes are regularly reviewed, and where necessary, are either automated or non-core activities are outsourced. The Company continues to integrate and/ or create synergies from M&A activity, driving greater agility and alignment across all relevant business functions. Our flexible work practices include a range of technological measures for those employees who work remotely, to maximise their safety and productivity. We continue to implement employee and industrial relations initiatives across the business. New Enterprise Agreements provide our people with simpler and better agreements, while aligning workplace terms and conditions with community standards. Seven West Media recognises the value of effective workplace safety and wellness as an integral part of how we successfully manage our business. We are committed to building a positive health and safety culture, with a focus on personal wellness, injury prevention and the mitigation of risk through maintaining high workplace safety and wellness standards and performance. With a comprehensive mental health framework, strong risk management processes and engaging wellness initiatives, the business continues to strive to improve in its safety outcomes, including the Lost Time Injury Frequency Rate (LTIFR) which continues to remain below the industry benchmark. The Company is also committed to providing extra safety support to employees during overseas deployments, wherever they might be. The Company provides specific psychological support and 10 days’ paid leave per annum for employees who are victims of domestic and/or family violence. With an increasing focus on mental health, the Company has taken an active focus on building awareness and support for managing mental health in our workplace. We have developed and implemented a comprehensive framework, which includes training, initiatives and events tailored for managers and employees to support positive mental health. Particular emphasis has been placed on delivering programs on resilience across the organisation, burnout and Vicarious Trauma to our News and Broadcast Operations team. The Company’s wellness program provides a range of benefits and initiatives to optimise the physical and mental health and wellness of employees, including: > Confidential counselling services through our Employee Assistance Program; > Educational seminars on a variety of health topics across our five Pillars of Wellbeing – Work, Financial, Physical, Mental and Community; > Practical tools to manage stress and mental health, such as introducing a mental health app, ‘Calm’; > Discounted offerings with fitness and wellbeing partners; > Flu vaccinations and skin checks; and > Psychological risk training. 28 Risk Management, People and Sustainability Seven West Media Limited Annual Report 2023Our annual wellness program calendar includes regular events and initiatives supporting our five Pillars of Wellbeing that are delivered to employees across the various locations in which we operate. The calendar is reviewed regularly to ensure it continues to prioritise key health topics and is aligned to the unique needs of our employees. Performance & Reward Reward and performance framework and strategies are created to attract and retain talented employees by rewarding high performance and delivering superior long-term results, while adhering to sound risk management and governance principles. We are committed to ensuring that our remuneration and performance approach supports positive, fair and equitable outcomes for our people and delivery of sustainable value for our shareholders. Remuneration is not just the direct amount of money paid to an employee. It also involves non-financial rewards and benefits. The Board monitors our Remuneration Policy and framework on an annual basis to ensure it remains fit for purpose, supports the Company’s strategy and delivers on the intended design. Reflecting the review undertaken during FY23 which included feedback from our shareholders, the Board has endorsed revised performance hurdles for the Long-term Incentive to be granted in FY24 to our Managing Director and CEO along with senior Executives. More details on these changes are provided in the FY23 Remuneration Report. Over the past year, we continued to invest in the growth, learning and development of our employees, in particular communication skills, managing remote teams and wellness training, support and seminars while working remotely. Talent & Development Our talent and development framework ensures that we create an environment where continuous learning is part of an employee’s development and progression so that they can reach their full potential. This drives leadership capability and is an important channel through which our culture is embedded and reinforced. Over the past year, we continued to invest in the growth, learning and development of our employees, in particular communication skills, managing remote teams and wellness training, support and seminars while working remotely. Further online courses have been completed by employees, including compliance-related training for new and existing employees (focusing on cyber-security and fraud awareness, anti-bribery and anti-money laundering, privacy, mandatory training under the Modern Slavery Act and other compliance matters). Mentoring, both internal and external, has become a key feature of our culture and plays an important role in identifying and supporting leadership development, while increasing engagement and productivity. Regular reviews, including setting key performance indicators and ongoing career development, are an important part of performance measurement and management, and support the Company’s high-performance ambitions. As well as encouraging regular and ongoing feedback with managers, the Company requires all employees to have at least two formal review sessions with their manager each year. During these reviews, employees are encouraged to raise, discuss and respond to matters relating to performance, training, further education and development of required skills and capabilities. The Company has increased its focus on increasing the pool of management capability where high-potential employees are identified and supported through the Company. A thorough talent and succession planning process has resulted in a deeper review of people and their potential including opportunities for female talent. A key objective is to further embed gender diversity as an active consideration in succession planning. Executive level succession plans were reviewed by the Board and provide a diverse list of candidates for whom development plans are created to ensure preparedness to take on future opportunities. Culture, Engagement & EVP Engagement and retention are underpinned by the People Experience (Px) which centres on four pillars – Attract, Perform, Grow and Engage. Employee engagement strategies continue to evolve our Px initiatives and programs such as ‘Moments That Move Us’ on reward and recognition, ‘Spark’ mentoring program, ‘SWM School’ learning platform, ‘Leading@ SWM’ leadership development, ‘7Perks’ employee benefits platform, ‘SWM Wellness’ including financial wellness, performance and development, digital onboarding, and intern, graduate and secondment programs. We measure employee engagement regularly through ‘Teamgage’, a real- time employee engagement survey platform based on eight engagement metrics – Values, Systems & Processes, Strategic Alignment, Communication, Flexible Workplace, Innovation, Feedback, and Safety. All our people are provided the opportunity to complete the survey and provide honest feedback. Results are aggregated into a real-time report that is shared and discussed with team members to drive new ideas and improvements and assist in helping shape the future of the Company. 29 Diversity, equity and inclusion (DEI) are integral to our culture and how we live our values. Reflecting the diversity of our people, customers and communities enables us to serve their needs. We have further embedded our DEI and environmental awareness programs to ensure they support our culture and to express these commitments at all levels. Through these policies and practices, we make it clear that discrimination on any basis is not acceptable. Corporate Social Responsibility The Company recognises and encourages the social and developmental benefits of skilled volunteering and wider community engagement by employees. The Company also continues to support and encourage employees to contribute to worthy causes through its Workplace Giving program. Whether it’s helping to find a cure for disease, saving the environment or supporting people in crisis, the Company encourages employees to work together as a business to help make an impact. It also continues to encourage its employees to make a difference through providing opportunities to participate in community fundraisers. Our community contributions are covered in the Sustainability section of this Report. Diversity, Equity and Inclusion Seven West Media recognises the benefits of an inclusive and respectful workplace culture that draws on the experiences, diversity and perspectives of our people to ensure that our business remains innovative and sustainable and continues to meet the needs of our stakeholders and audiences. We view diversity through a broad lens of difference in people across gender, nationality, ethnicity, physical abilities, sexual orientation, body type, gender identity, generation/age, disability, socio-economic status, religious belief, parental status, professional and educational background as well as global and cultural experiences. In March 2022, Seven West Media became the first media company in Australia to be awarded a citation as Employer of Choice for gender equality by the Workplace Gender Equality Agency (WGEA). The criteria for the citation are rigorous and we were one of just 12 companies across Australia to be added as an employer having achieved gender equality in the workplace for the 2021-23 citation years. Seven’s commitment to diversity, equality and inclusion will continue and is demonstrated in our comprehensive sustainability report. Diversity, Equity and Inclusion Commitments and Initiatives During FY23, the Board reviewed the Company’s Diversity, Equity and Inclusion Policy which is a key part in its overall talent and culture strategy and guides investment in the areas of recruiting, staffing, account planning, succession planning, promotions, and development. The Company supports an inclusive work environment where people have genuine and equitable access to career opportunities, training and benefits. James Brayshaw, Daisy Pearce and Brian Taylor 7AFL 30 Risk Management, People and Sustainability Seven West Media Limited Annual Report 2023Seven West Media recognises the benefits of an inclusive and respectful workplace culture that draws on the experiences, diversity and perspectives of our people to ensure that our business remains innovative and sustainable and continues to meet the needs of our stakeholders and audiences. > Revised our leave policy to include up to five days paid fertility leave for people undergoing fertility treatment. We will continue to focus our strategy to achieve a more diverse, equitable and inclusive workplace in other areas of the business by: > Embedding flexibility in the way we work; > Supporting our commitment to diversity, equity and inclusion; > Uncovering and taking steps to mitigate potential bias in our behaviours, systems, policies and processes; and > Ensuring our brand is attractive and caters to a diverse range of people. The Company has posted its Workplace Gender Equality Act Public Report for 2022–2023 on its website, which contains the Company’s Gender Equality Indicators. The Company’s progress against diversity objectives were established in 2018, and our commitments set for the FY23 financial year, can be found in our Corporate Governance Statement at www.sevenwestmedia.com.au/about- us/corporate-governance. > Continued to celebrate LGBTIQ+ Pride and held team events (virtually and in small groups) across the Company to support our diverse and inclusive culture. > Continued participation in ‘The Everyone Project’ which is an initiative from the Screen Diversity and Inclusion Network (SDIN) to benchmark and track the diversity of the Australian screen industry. > Implemented our digital onboarding process for new starters. > Implemented ‘Teamgage’, a real-time employee engagement survey platform. > Implemented an employee benefits platform, ‘7Perks’ to support employee engagement and retention. > Continued to build on the Company’s ‘Financial Wellbeing’ programs including Mercer’s ‘Super for Women’. > Continued supporting initiatives in relation to eradicating domestic and family violence and sexual assault. > Partnered with White Ribbon in campaign launches, such as ‘Be the Change’ campaign. > Continued to hold events through Mental Health Month (October) and on ‘R U OK? Day’. > Continued support for the ‘Speak Out - 16 Days of Activism Against Gender Based Violence’ campaign. We progressed our commitments during FY23 such as: > We achieved an overall gender balance of 48% across our workforce as well as maintained the female representation in management positions of 47%. This result continues to be supported by our equal opportunity recruitment process. The Board recognises the importance of diversity at Board level and aims to achieve a minimum of 30% female representation in the coming years. > Continued to Partner with UN Women Australia at a national level for the 2023 International Women’s Day (IWD) live and virtual events. We also extended our partnership with UN Women Australia to participate in the ‘Unstereotype Alliance’ which aims to eradicating stereotypes in advertising with regards to gender equality. > Continued the David Leckie Seven Scholarship Program in memory of our former Chief Executive Officer, the late David Leckie AM. The annual program offers a 12-month scholarship at Seven West Media for a junior graduate with a passion for sales, programming or news. > Implemented the Company’s inaugural Reconciliation Action Plan (RAP) through the delivery of a 12-month ‘Reflect’ stage program of work. > Launched the Company’s Environmental, Social and Governance (ESG) framework and strategy. > Revised our processes and procedures on the casting of contestants with our production partners. 31 Sustainability Framework Risk Management, People and Sustainability Seven West Media Limited Annual Report 2023 Seven West Media’s critical role in Australian society is underpinned by our commitment to use the power of our platforms to inspire a better “us”. This guides our sustainability strategy and our efforts across each of the four pillars. We do this by informing and uniting Australians each and every day, through our unwavering commitment to the communities in which we operate, our support for diversity and awareness, and by operating ethically and responsibly. Sustainability Us is all of us. It includes individuals, groups, communities, businesses, organisations, the nation as a whole and our team at Seven West Media. We recognise as a media company with a reach into almost every home in Australia that we have powerful platforms that help shape who we are as Australians. We aim to achieve a positive impact through our four sustainability pillars focused on uniting people and communities; providing opportunities for future generations; representing Australia by supporting diversity, equity and inclusion internally and externally; and by being environmentally responsible and promoting important environmental causes. As a trusted provider of news, information and entertainment, we bring people together as we tell the nation’s stories. We connect Australia with quality content, fostering a shared identity and belonging. In 2022, Seven West Media launched our first comprehensive sustainability strategy and report. In short, we’re bringing all of us closer to the moments that move us. Our strategy and reporting is centred around the sustainability issues that are most important to our stakeholders, based on an externally managed materiality assessment. With this, we developed our sustainability purpose to “use the power of our platform to inspire a better us”. This purpose underpins the four pillars of our sustainability strategy. These key areas represent where we felt we could have the biggest impact. These are: 1. Representing Australia 2. Opportunities for Future Generations 3. Uniting People and Communities 4. Environmental Awareness We have joined forces with Planet Ark to raise awareness and create positive behavioural change around recycling by becoming the Official Media Partner of National Recycling Week. We measured our emissions to gain an understanding of our emissions level and profile. We now have a comprehensive view of our scope 1 and 2 emissions, which are driven primarily from electricity consumption which makes up 92% of our emissions profile. Since 2016 we have reduced our scope 1 and 2 emissions by almost 27%1 and our FY22 emissions footprint falls under the NGER reporting threshold. Since then, we have continued to accelerate our sustainability efforts. “Us”is all of us Us as individuals Us as communities Us as teams Us as a nation Having established the FY22 baseline for our scope 1 and 2 emissions, we engaged climate risk and energy transition consultants Energetics to evaluate and quantify our future reduction plans. Based on their calculations and modelling, our ambition is to reduce our scope 1 and 2 greenhouse gas emissions by over 50% by FY30 through a combination of grid decarbonisation, building consolidation and other reduction initiatives including the introduction of LED lighting. 4 1 Based on last NGER reporting audit. Includes sustainability efforts and business reshaping. Good Friday Appeal final tally on Seven. Credit: Clint Peloso Caption for Telethon 32 FY23 Highlights Our team across Australia continues to drive action in our four sustainability pillars. In FY23 we made great progress in all of our pillars: Representing Australia At Seven West Media, our team’s diverse backgrounds and experiences foster a belief in the power of an inclusive and equitable workplace. This combination leads to improved outcomes for both our stakeholders and our business. > Published our inaugural ‘Reflect’ Reconciliation Action Plan. > Screen Diversity Inclusion Network released its first report with the preliminary data on diversity in the Australian screen industry. > Named an Employer of Choice for Gender Equality by the Workplace Gender Equality Agency. > Joined the Diversity Council Australia. > Launched a new recruitment policy to improve diversity, equity and inclusion. > Rolled out new Respect@Work training. Future Generations Seven West Media is committed to improving opportunities for future generations, particularly in health and social outcomes. We allocate substantial resources to projects across Australia, focusing on children’s health, medical research, and career and mentoring opportunities. Our aim is to create a better future for younger Australians, making a meaningful impact on their wellbeing. > Awarded the second recipient of the David Leckie Seven Scholarship Program. > Launched a new Broadcast Technician and Operations Trainee program. > Renewed our partnership with The Careers Department. > The Perth Telethon raised more than $71 million to support medical research into children’s diseases. > The Good Friday Appeal raised more than $23 million for the Royal Children’s Hospital in Melbourne. Uniting People and Communities As members of the communities where we operate, we play a vital role in fostering unity and shared understanding. We are proud to be a part of the fabric that brings our communities together and cultivates the spirit of Australia. > Supported Big Freeze 9, which raised $2.3 million for the fight against Motor Neuron disease. > Provided more than $62 million in Community Service Announcement (CSA) support to more than 140 organisations. > Official media partner for White Ribbon Day 2023. Bringing Awareness to Environmental Issues At Seven West Media, we recognise the power of our platforms to raise environmental awareness and shed light on crucial environmental issues. We consider it our responsibility to collaborate with organisations that prioritise sustainability and conservation. Seven West Media is also committed to reducing the environmental impact of our business activities on the communities and the environment in which we operate. > Measured our emissions footprint. > Based on our modelling, our ambition is to reduce our emissions by over 50% by 2030. > Official media partner for Planet Ark’s National Recycling Week. > Continued reducing the environmental impact of our operations. > The West Australian and the Sunday Times printed waste measure reduced from 4.9% to 4.3%. > Partnered with Drought Angels to provide relief to farmers impacted by natural disasters. More detail is available in our FY23 Sustainability report which can be found on our website or (here). Seven West Media Managing Director and Chief Executive Officer, James Warburton with Nuwan Ranasingha and Skye Leckie 33 Board of Directors Kerry Stokes AC Chairman – Non-Executive Director James Warburton Managing Director and Chief Executive Officer Mr Warburton is Managing Director & Chief Executive Officer of Seven West Media Limited. Prior to his appointment as Managing Director and CEO of Seven West Media, Mr Warburton was Managing Director and Chief Executive Officer of APN Outdoor, from 22 January 2018, where he led a significant transformation and turnaround at the company before departing in late 2018 when APN Outdoor was acquired by JCDecaux for a record valuation. Before his appointment to APN Outdoor, Mr Warburton was the Chief Executive Officer of Supercars for five years. In this position, Mr Warburton drove significant growth in the sport and delivered unprecedented broadcast, sponsorship and funding deals. Mr Warburton has also held senior leadership roles at media buying company Universal McCann, he was Chief Digital and Sales Officer of the Seven Media Group, and he was the Managing Director and Chief Executive Officer of Network 10. Mr Warburton was appointed to the Board on 16 August 2019. Mr Stokes was Executive Chairman of Seven Group Holdings Limited, a company with a market-leading presence in the resources services sector in Australia and formerly in north east China and a significant investment in energy and also in media in Australia through Seven West Media. Mr Stokes held this position from April 2010 until November 2021. He is also Chairman of Australian Capital Equity Pty Limited, which has substantial interests in media and entertainment, resources, energy, property, pastoral and industrial activities. Mr Stokes is a former Chairman of Australian War Memorial and a former Chairman of the National Gallery of Australia. Mr Stokes holds professional recognitions which include an Honorary Doctorate in Commerce at Edith Cowan University and an Honorary Fellow of Murdoch University. Mr Stokes has, throughout his career, been the recipient of awards, including Life Membership of the Returned Services League of Australia; 1994 Paul Harris Rotary Fellow Award; 1994 Citizen of Western Australia for Industry & Commerce; 2002 Gold Medal award from the AIDC for Western Australian Director of the Year; 2007 Fiona Stanley Award for outstanding contribution to Child Health Research; 2009 Richard Pratt Business Arts Leadership Award from the Australian Business Arts Foundation; and 2011 Charles Court Inspiring Leadership Award; 2013 West Australian of the Year; 2014 Awarded Keys to the City of Perth and 2014 Awarded Keys to the City of Melbourne. Mr Stokes was awarded Australia’s highest honour, the Companion in the General Division in the Order of Australia (AC) in 2008. In 1995, he was recognised as Officer in the General Division of the Order of Australia (AO). Mr Stokes was appointed to the Board on 25 September 2008 and became Chairman of Seven West Media Limited (formerly West Australian Newspaper Holdings Ltd) on 11 December 2008. 34 Governance Seven West Media Limited Annual Report 2023Teresa Dyson Non-Executive Director David Evans Non-Executive Director Ms Dyson is an experienced company director with a broad range of experience across public and private sectors. Ms Dyson has been closely involved in strategic decision making in business and organisational structuring, covering the financial services, transport, energy and resources sectors, as well as infrastructure projects, following over 20 years practising as a senior taxation lawyer. Ms Dyson is a director of Energy Queensland, Brighter Super, Gold Coast Hospital and Health Board, Fare Limited and National Housing Finance & Investment Corporation. She is a member of the Takeovers Panel and an independent member of the Australian Taxation Office Audit & Risk Committee. She has been a Director of Genex Power Limited since May 2018, Shine Justice Limited since February 2020 and Entyr Limited since February 2023. She has formerly served as the Chair of the Law Council of Australia, Business Law Section and has also been a Partner at Deloitte and Ashurst (formerly Blake Dawson). She is former Chair and member of the Board of Taxation and a former member of the Foreign Investment Review Board. Ms Dyson chairs Audit or Audit & Risk Committees for Genex Power Limited, Shine Justice Limited, Energy Queensland, Brighter Super and National Housing Finance & Investment Corporation. Ms Dyson holds a Masters of Applied Finance from Macquarie University. She graduated with a Bachelor of Laws (Honours), a Bachelor of Arts and Masters of Taxation from the University of Queensland and is a fellow of the Australian Institute of Company Directors. Ms Dyson is Chairman of the Audit and Risk Committee. Ms Dyson was appointed to the Board on 2 November 2017. Mr Evans is Non-Executive Chairman of E & P Financial Group Limited and was appointed a director of that company in February 2017. Mr Evans established Evans and Partners Pty Ltd, the investment advisory company in June 2007. Since 1990, Mr Evans has worked in a variety of roles within JB Were & Son, and then the merged entity Goldman Sachs JBWere Pty Ltd (GSJBW). Prior to establishing Evans and Partners, Mr Evans ran Goldman Sachs JBWere’s Private Wealth business and the Institutional Equities business. His most recent role at GSJBW was as Managing Director and Chief of Staff. Mr Evans holds a Bachelor of Economics from Monash University. Mr Evans is a member of the Audit & Risk Committee and a member of the Remuneration & Nomination Committee. Mr Evans was appointed to the Board on 21 August 2012. Colette Garnsey OAM Non-Executive Director Ms Garnsey has been a Non-Executive Director of Flight Centre Travel Group since February 2018, Magellan Financial Group since November 2020 and is a Chairman of Laser Clinics Australia. Ms Garnsey is a former Non-Executive Director and former Chair of Australian Wool Innovation Limited. Ms Garnsey has over 30 years’ executive experience, having held senior management positions at David Jones, Pacific Brands, and Premier Investments, encompassing strategy, operations, marketing, business planning and business transformation. She spent over 20 years with David Jones Limited rising to become Group General Manager. Ms Garnsey has served on the board of the Melbourne Fashion Festival. She has also advised the CSIRO, The Federal Innovation Council, and the business advisory boards of various Federal Trade and Investment Ministers and Australian Fashion Week. Ms Garnsey is Chairman of the Remuneration & Nomination Committee. Ms Garnsey was appointed to the Board on 12 December 2018. 35 Michael Malone Non-Executive Director Ryan Stokes AO Non-Executive Director Mr Malone founded iiNet in 1993 and continued as CEO for more than 20 years. iiNet listed on the ASX in 1999 and grew to service over a million households and businesses, with revenues and market cap of over $1 billion and 3,000 staff. After leaving iiNet, Mr Malone went on to co-found Diamond Cyber Security. Mr Malone is a Non-Executive Director of NBN Co, WiseTech Global Limited, Health Insurance Fund of WA and a former Director of Axicom Pty Ltd, a former Director of DUG Technology Limited from June 2020 to August 2021, a former Director of SpeedCast International Ltd from May 2014 to July 2022 and served as a Director and Chairman of Superloop Ltd from April 2015 to March 2020. Mr Malone was recognised as the Australian Entrepreneur of the Year, CEO of the Year in the Australian Telecom Awards and National Customer Service CEO of the Year and is a recipient of the Charles Todd Medal. Mr Malone is a member of the Audit & Risk Committee and a member of the Remuneration & Nomination Committee. Mr Malone was appointed to the Board on 24 June 2015. Mr Stokes is Managing Director & Chief Executive Officer of Seven Group Holdings (SGH) and has been a Director of SGH since April 2010. SGH owns WesTrac and Coates, has a controlling interest in Boral (72.6%), an investment in Beach Energy (30%), and investment in Seven West Media (39%). Mr Stokes is Chairman of WesTrac, Chairman of Coates and Chairman of Boral and Director of Beach Energy. Mr Stokes is Chief Executive Officer of Australian Capital Equity Pty Limited (ACE). ACE is a private company with its primary investment being an interest in SGH. Mr Stokes is Chairman of the National Gallery of Australia. Mr Stokes holds a BComm from Curtin University and is a Fellow of the Australian Institute of Management (FAIM). Mr Stokes was appointed an Officer in the General Division of the Order of Australia in the Queen’s Birthday honours on 8 June 2020. Mr Stokes is a member of the Remuneration & Nomination Committee. Mr Stokes was appointed to the Board on 21 August 2012. Michael Ziegelaar Non-Executive Director Mr Ziegelaar is a senior partner of global law firm Herbert Smith Freehills, where he is the Co-Head of the Australian Equity Capital Markets Group. He specialises in corporate, equity capital markets and M&A transactions and has acted for a wide range of clients across various industries. Mr Ziegelaar is also a Non-Executive Director of the Burnet Medical Research Institute. Mr Ziegelaar holds a Bachelor of Laws (Hons), a Bachelor of Economics (majoring in Accounting and Corporate Finance) and a Master of Laws (majoring in Commercial Law) from Monash University. Mr Ziegelaar is a member of the Audit & Risk Committee. Mr Ziegelaar was appointed to the Board on 2 November 2017. 36 Governance Seven West Media Limited Annual Report 2023Corporate Governance Overview This Corporate Governance Overview outlines the Company’s main corporate governance practices that were in place throughout the financial year ended 30 June 2023. The Company’s full 2023 Corporate Governance Statement, which set outs the Company’s compliance with the 4th edition of the ASX Corporate Governance Council Corporate Governance Principles and Recommendations (“ASX Recommendations”), unless otherwise stated, is available in the “Corporate Governance” section of the Company’s website at www.sevenwestmedia.com.au/about-us/ corporate-governance. Board and Committee Charters and a number of the corporate governance policies referred to in the 2023 Corporate Governance Statement are also available at the above link. The documents marked with an * below have been posted in the ‘Corporate Governance’ section on the Company’s website at www.sevenwestmedia.com.au/about-us/ corporate-governance. Role and Responsibilities of the Board The Board is empowered to manage the business of the Company subject to the Corporations Act and the Company’s Constitution*. The Board is responsible for the overall corporate governance of the Company and has adopted a Board Charter* setting out the role and responsibilities of the Board as well as those functions delegated to Management. Delegation to Management Subject to oversight by the Board and the exercise by the Board of functions which it is required to carry out under the Company’s Constitution, Board Charter and the law, it is the role of management to carry out functions that are expressly delegated to management by the Board, as well as those functions not specifically reserved to the Board, as it considers appropriate, including those functions and affairs which pertain to the day-to-day management of the operations and administration of the Company. Management must supply the Board with information in a form, timeframe and quality that will enable the Board to discharge its duties effectively, including information concerning the Company’s compliance with material legal and regulatory requirements and any conduct that is materially inconsistent with the values or Code of Conduct of the Company. Board Composition The Company’s Constitution provides for a minimum of three Directors and a maximum of twelve Directors on the Board. As at the date of this statement, the Board comprises eight Directors, including seven Non-Executive Directors and the Managing Director and Chief Executive Officer. The Non-Independent Directors in office are: > Mr Kerry Stokes AC, Chairman > Mr Ryan Stokes AO, Director > Mr James Warburton, Managing Director & Chief Executive Officer The Independent Directors in office are: > Ms Colette Garnsey OAM, Director > Ms Teresa Dyson, Director > Mr David Evans, Director > Mr Michael Malone, Director > Mr Michael Ziegelaar, Director The qualifications, experience, expertise and period in office of each Director of the Company at the date of this Annual Report are disclosed in the Board of Directors section on pages 34 to 36. Mr John Alexander was a Director throughout the financial year until his retirement and resignation on 10 November 2022. Chairman The roles of the Chairman and Chief Executive Officer are separate. Mr Kerry Stokes AC is the Chairman of the Company. The Chairman is responsible for leading the Board, facilitating the effective contribution of all Directors and promoting constructive and respectful relations between Directors and between the Board and Management. The Board acknowledges the ASX Recommendation that the Chairman should be an Independent Director, however the Board has formed the view that Mr Stokes is the most appropriate person to lead the Board as its Chairman given his experience and skills, particularly with regard to his long- term association with various media businesses of the Group. In addition, the Company has a clear conflict of interest protocol to manage the relationships between the Company and Seven Group Holdings Limited. 37 Board independence The Board comprises a majority of Independent Directors, with three Non-Independent Directors and five Independent Directors. During the period of the financial year prior to Mr Alexander’s retirement and resignation the Board comprised three Non-Independent Directors and six Independent Directors. In determining whether a Director is independent, the Board conducts regular assessments and has regard to whether a Director is considered to be one who: > is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, or represents or has been within the last three years an officer or employee of a substantial shareholder of the Company; > receives performance-based remuneration (including options or performance rights) from, or participates in an employee incentive scheme of, the entity; > is, or has previously been, employed in an executive capacity by the Company or another Group member, and there has not been a period of at least three years between ceasing such employment and serving on the Board; > has within the last three years been a principal of a material professional advisor of, or a material consultant to, the Company or another Group member, or an employee materially associated with the service provider; > is a material supplier or customer of the Company or other group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer; > has a material contractual relationship with the Company or another group member other than as a Director; or > has been a Director of the entity for such a period that their independence from management and substantial holders may have been compromised. The Board determines the materiality of a relationship on the basis of fees paid or monies received or paid to either a Director or an entity which falls within the independence criteria above. If an amount received or paid may impact the Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) of the Group in the previous financial year by more than 5%, then a relationship will be considered material. In the Board’s view, the Independent Directors referred to above are free from any interest, position or other relationship that might, or reasonably be perceived to, influence, in material respect the capability to bring an independent judgement to bear on issues before the Board and to act in the best interests of the Company as a whole rather than in the interests of an individual security holder or other party. Mr Michael Ziegelaar is a partner at Herbert Smith Freehills, a law firm which provides certain legal services to the Company. The legal services provided by Herbert Smith Freehills are not considered material having regard to the principles above and Mr Ziegelaar is not involved in providing the services. The Board is satisfied that Mr Ziegelaar’s role with Herbert Smith Freehills does not interfere with the independent exercise of his judgment as a Non-Executive Director of the Company. Mr Kerry Stokes AC and Mr Ryan Stokes AO are not regarded as independent within the framework of the independence guidelines set out above because of their current and/or recent positions within Seven Group Holdings Limited, which is a major shareholder of Seven West Media Limited. Due to his position as Managing Director & Chief Executive Officer, Mr James Warburton is not considered to be independent. Appointment of Directors The policy and procedure for the selection and appointment of new Directors is set out in an Annexure to the Board Charter. The factors that will be considered when reviewing a potential candidate for Board appointment include: > the skills, experience, expertise and personal qualities that will best complement Board effectiveness having regard to the Board skills matrix, including a deep understanding of the media industry, corporate management and operational, safety and financial matters; > the existing composition of the Board, having regard to the factors outlined in the Company’s Diversity Policy and the objective of achieving a Board comprising Directors from a diverse range of backgrounds; > the capability of the candidate to devote the necessary time and commitment to the role (this involves a consideration of matters such as other board or executive appointments); and > potential conflicts of interest and independence. Directors appointed to fill casual vacancies hold office until the next Annual General Meeting and are then eligible for election by shareholders. In addition, each Director must stand for re-election at the third Annual General Meeting of the Company since they were last elected. The Notice of Meeting for the Annual General Meeting discloses material information about Directors seeking election or re-election, including appropriate biographical details, qualifications and other key current directorships. The date at which each Director was appointed to the Board is announced to ASX and is provided in this Annual Report on pages 34 to 36. 38 Governance Seven West Media Limited Annual Report 2023Company’s Purpose and Strategic Objectives The Board has approved the Company’s purpose as “to be the most connected news, sport and entertainment brand in Australia”. The Company’s purpose is an aspirational reason for being that inspires a call to action for our people and stakeholders. The Board also approved the following areas as strategic objectives for the Company to achieve this purpose and underpin the Company’s economic sustainability: 1. Accelerate our digital future. 2. Enhance and elevate the brand. 3. Optimise the business. 4. Partner for growth. For more information on the Company’s strategic priorities and strategic outlook see pages 4 to 5 of this Annual Report. Board Skills Matrix The Board has developed a Board Skills Matrix, which is reviewed each year, reflecting the desired skills and experience required to be able to deliver on the strategic objectives of the Company. The Board believes that these skills and experiences are well-represented by its current composition. The Board Skills Matrix is set out in two parts. The first table outlines the desired industry specific skills and experience, which continues to evolve given the rapid changes in the media industry, and the second table outlines the depth of general corporate, executive and Director experience which are appropriate for the Company. The tables also outline the percentage of current Directors possessing those skills and experience on a weighted average basis. Skills and Experience Media industry leadership Percentage 78% Senior executive or Board level experience in the media industry, including in-depth knowledge of the legislative and regulatory framework governing this industry. Banking, finance, asset and capital management Senior executive or Board level experience and understanding of banking markets and commercial financing arrangements as well as strategic planning and oversight of asset allocation and capital management. Marketing, sales and product distribution, customer and audience insights Senior executive or Board level experience in delivering product offerings to market, including marketing, branding and optimising sales processes, and customer and audience insights and experience in product distribution systems. 93% 78% Investment, mergers and acquisitions, venture capital and entrepreneurship 96% Senior executive or Board level experience in analysis and identification of business and market opportunities as well as execution in relation to investment, mergers and entrepreneurial activities. Technology, digital media and transformation 78% Senior executive or Board level experience in relation to digital media and transformation, information management, information technology, digital and streaming product technology, and the oversight of implementation of major technology projects. 39 Skills and Experience Percentage Audit & Risk Committee CEO and Board level experience 100% Significant business experience and success at a senior executive level. As at the date of this statement, the Audit & Risk Committee comprises the following members, all of whom are Independent Directors and all of whom are non-executives: Accounting and treasury 81% > Ms Teresa Dyson (Chairman of the Committee) Senior executive or equivalent experience in financial accounting and reporting, corporate finance, internal financial controls and an ability to probe the adequacies of financial risk controls. Corporate governance, regulatory, sustainability and organisation management Commitment to the highest standards of corporate governance (including sustainability and stakeholder relations) and experience within an organisation that is subject to rigorous governance and regulatory standards. Legal, regulation and compliance 85% Senior executive or Board level experience in compliance and knowledge of legal and regulatory requirements. Risk management and audit 89% Senior executive or Board level experience in identification, management and oversight of material corporate risks and audit, including ability to monitor risk and compliance. WHS, human resource management and remuneration 96% Board remuneration committee membership or Senior executive experience relating to workplace health and safety, diversity and inclusion, managing people and remuneration, including incentive arrangements and the legislative framework governing employees and remuneration. > Mr David Evans > Mr Michael Malone > Mr Michael Ziegelaar 96% The relevant qualifications and experience of the members of the Committee are set out on pages 34 to 36 under the heading Board of Directors. Ms Dyson possesses extensive professional Audit & Risk Committee Chair experience, following a career of over 20 years practising as a senior taxation lawyer. She has formerly served as the Chair of the Law Council of Australia, Business Law Section and has also been a Partner at Deloitte and Ashurst (formerly Blake Dawson). She is former Chair and member of the Board of Taxation and a former member of the Foreign Investment Review Board. Having regard to the experience of the Committee Chair and Committee members, the Board is confident the Committee satisfies any guidelines concerning audit and financial expertise on the Committee. Ms Dyson’s specific experience as the chair of listed company and government Audit or Audit & Risk Committees is set out in her profile at page 35 of this Annual Report. Attendance at Committee meetings by management is at the invitation of the Committee. Directors who are non-Committee members may also attend any meeting of the Committee by invitation. The Chairman of the Committee reports to the Board on the Committee’s considerations and recommendations. Remuneration & Nomination Committee The Board has established a Remuneration & Nomination Committee comprised of the following members, all of whom are Independent Directors except for Mr Ryan Stokes AO: Board Committees > Ms Colette Garnsey OAM (Chairman of the Committee) The Board is assisted in carrying out its responsibilities by the Audit & Risk Committee and the Remuneration & Nomination Committee. Attendance at Committee meetings by management is at the invitation of the Committee. Directors who are non-Committee members may also attend any meeting of the Audit & Risk Committee and Remuneration & Nomination Committee by invitation. The Chair of each of those Committee reports to the Board on the Committee’s considerations and recommendations. Each Committee has its own written Charter*, which is reviewed on an annual basis and is available on the Company’s website. The Directors’ Report at page 45 sets out the number of Board and Committee meetings held during the 2023 financial year under the heading “Meetings of Directors”, as well as the attendance of Directors at those meetings. > Mr David Evans > Mr Michael Malone > Mr Ryan Stokes AO Mr John Alexander was Chairman of the Committee throughout the financial year until his retirement and resignation on 10 November 2022.Effective from 10 November 2022, Ms Garnsey become Chairman of the Committee and Mr Malone was appointed to the Committee. The Remuneration & Nomination Charter* provides that the Committee must consist of a minimum of three members and must have a majority of Independent Directors, all of whom must be Non-Executive Directors. Attendance at Committee meetings by management is at the invitation of the Committee. Directors who are non-Committee members may also attend any meeting of the Committee by invitation. The Chairman of the Committee reports to the Board on the Committee’s considerations and recommendations. 40 Governance Seven West Media Limited Annual Report 2023 Board, Committee and Director performance evaluation During the financial year, Directors completed a Board Evaluation questionnaire concerning Board, Committee and Director, including Chairman, performance from which aggregated data and responses were provided to the Chairman and then presented to the Board for discussion and feedback. The aggregated questionnaire results also provide the basis of individual discussions between Directors and the Chairman. The Chairman and each Board member consider the performance of that Board member in relation to the expectations for that Board member and consider any opportunities for enhancing future performance. During the reporting period, performance evaluations of the Board, its Committees and individual Directors were carried out in accordance with this process. Assessment of Management Performance The performance of the Managing Director & Chief Executive Officer is formally reviewed by the Board against the achievement of strategic and budgetary objectives in respect of the Group’s operations and investments whilst also having regard for his personal performance in the leadership of the Group. The Board’s review is carried out annually in regard to certain goals against which he is assessed, and throughout the year in regard to others, and forms the basis of the determination of the Managing Director & Chief Executive Officer’s performance-linked remuneration. The performance of senior executives of the Company is reviewed on an annual basis in a formal and documented interview process with either the Managing Director & Chief Executive Officer or the particular executive’s immediate superior. Performance is evaluated against agreed performance goals and assessment criteria in relation to the senior executive’s duties and material areas of responsibility, including management of relevant business units within budget, motivation and development of staff, and achievement of and contribution to the Company’s objectives. A performance evaluation of the Managing Director & Chief Executive Officer and other senior executives took place during the year in accordance with this process. Core Values In accordance with its Charter, the Board has reviewed and approved the core values of the Company which function as guiding principles and expectations for behaviour and the culture the Board and Management are seeking to embed across all businesses within the Group as follows: > Be Brave > Better Together > Make it Happen Diversity and Inclusion The Board recognises the benefits of a workplace culture that is inclusive and respectful of diversity. The Board values diversity, including in relation to age, gender, cultural background and ethnicity and recognises the benefits it can bring to the organisation. The Board has adopted a Diversity Equity and Inclusion Policy* that sets out the Board’s commitment to working towards achieving an inclusive and respectful environment. Please refer to pages 30 to 31 of this Annual Report for reporting on the Diversity Policy and the measurable objectives and initiatives relating thereto. Code of Conduct and other Company policies The Board has adopted a Code of Conduct for Directors* which establishes guidelines for their conduct in matters such as ethical standards and the disclosure and management of conflicts of interests. The Company has adopted Employee Conduct Guidelines* which provides a framework of ethical principles for conducting business and dealing with customers, employees and other stakeholders. Material breaches of the Codes of Conduct for Directors and Employees are reported to the Board. The Board has implemented a number of other policies and procedures to maintain confidence in the Company’s integrity and promote ethical behaviour and responsible decision making, including the following: > Continuous Disclosure policy* > Share Trading policy* > Group Editorial policy* > Diversity Equity and Inclusion Policy* > Whistleblower policy* > Fraud, Anti-Bribery and Corruption Policy* > Modern Slavery Statement* Communications with security holders As disclosed in the Shareholder Communication Policy*, the Board aims to ensure that security holders are informed of all major developments affecting the Company’s state of affairs and that there is an effective two-way communication with its security holders facilitated via the Company’s Investor Relations function. Shareholders are encouraged to participate in general meetings and are invited to put questions to the Chairman of the Board in that forum. Security holders are given the option to receive communications from, and to send communications to, the Company electronically to the extent possible. It is the Company’s policy that all substantive resolutions at a meeting of security holders are decided by a poll rather than by a show of hands. The Company’s website www.sevenwestmedia.com.au provides various information about the Company. 41 Risk oversight and management Material risks Under the risk framework described above, the Company has identified revenue, content, and product/technology risks which it manages and mitigates. Each of the foregoing material business risks is monitored and managed by appropriate Senior Management within the Company. Where appropriate, external advisers are engaged to assist in managing the risk. More detail concerning these risks, the Company’s economic sustainability risks and how it manages those risks is set out under the headings “Risk Management” and “Risk Management Framework” on pages 26, 27 and 42 of this Annual Report. The Company does not believe it has any material exposure to environmental risks and that it effectively manages its social risks. Commentary on the Company’s environmental and human capital related initiatives as well as its community engagement, which underpin the Company’s social risk management, is provided on pages 28 to 33 of this Annual Report. Strategy The Company has continued its strategic focus on responding rapidly to the challenges and opportunities in its marketplace. For more information on the Company’s strategic framework which underpins the Company’s economic sustainability please refer to pages 4 and 5 of this Annual Report. Environment Environmental risks are considered as part of the Company’s risk assessment processes. Environmental risks relating to the use and storage of any hazardous materials are identified and managed through regular inspections of business premises, reviews of compliance and emergency procedures, and advice from external consultants on environmental matters. The Company is mindful of climate change and managing the environmental impact of its operations. For more information on the Company’s environmental practices and the Company’s efforts to minimise the environmental footprint of its businesses, please refer to pages 32 to 33 of this Annual Report. The Company releases a separate annual Sustainability Report which is available on the Company’s website at: www.sevenwestmedia.com.au/about-us/ sustainability. The Board requires Management to design and implement a risk management and internal control system to manage the Group’s material business risks and report to it on the management of those risks. The Board also believes a sound risk management framework should be aimed at identifying and delivering improved business processes and procedures across the Group which are consistent with the Group’s commercial objectives. Risk Management Policy The Board has adopted a Risk Management Policy*. The group-wide risk profile covers the key revenue, content, product/technology, regulatory and people risks of the Company and is prepared by the Risk Assurance & Internal Audit function in consultation with key executives across the business. Throughout the year, the Audit & Risk Committee reviews with management the group-wide risk profile and the success of the risk mitigation strategies in order to satisfy itself that management is operating within the risk appetite set by the Board. External advice is obtained as appropriate. The key risks identified by Management and mitigation actions in place are regularly updated and reported to the Audit & Risk Committee and periodically to the Board. During the reporting period, Management reported to the Board as to the effectiveness of the Company’s management of its material business risks. The Board satisfied itself the Company’s risk management framework continues to be sound and effectively identifies potential risks. Internal Control Framework – Risk Assurance & Internal Audit The Company has established a Risk Assurance & Internal Audit function to evaluate and improve the effectiveness of the Company’s governance, risk management and internal control processes. The Audit & Risk Committee reviews and approves Risk Assurance & Internal Audit plans and resourcing as well as monitors its independence, performance and management’s responsiveness to its findings and recommendations. A specialist external Internal Audit firm has been appointed to conduct the Company’s Internal Audit reviews under in- house oversight. The Board considers that this appointment provides an enhanced level of capability and technical depth, which serves to embed a stronger risk and compliance culture across the organisation whilst drawing on best practice and knowledge across operational and emerging issues. Additionally, efficiencies are gained by the externally resourced Internal Audit function working closely with the Group’s external auditor KPMG, to ensure audit efforts are not duplicated and Internal Audit work can be relied upon. 42 Governance Seven West Media Limited Annual Report 2023External Audit function Remuneration The Board considers that the attraction, retention and motivation of its Directors and senior executives is of critical importance in securing the future growth of the Company and its shareholder returns. The objective of the remuneration policy for Executive employees is to ensure that remuneration packages properly reflect the duties and responsibilities of the employees, and that remuneration is at an appropriate but competitive market rate which enables the Company to attract, retain and motivate people of the highest quality and with the best skills from the industries in which the Company operates. The aggregate remuneration for Non-Executive Directors is approved by shareholders. Fees for Directors are set out in the Remuneration Report on pages 48 to 67. Hedging Policy It is the Company’s policy that employees (including Key Management Personnel (“KMP”)) are prohibited from dealing in Seven West Media securities if the dealing is prohibited under the Corporations Act. Therefore, in accordance with this policy, all KMP are prohibited from entering into arrangements which operate to limit the executives’ economic risk in connection with Seven West Media securities which are unvested or remain subject to a holding lock. This Corporate Governance Overview and the Corporate Governance Statement, which is available in the “Corporate Governance” section of the Company’s website at www. sevenwestmedia.com.au/about-us/corporate-governance, have been approved by the Board and are current as at 16 August 2023. The Audit & Risk Committee meets periodically with the External Auditors without management being present. Each reporting period, the External Auditor provides an independence declaration in relation to the audit. Additionally, the Audit & Risk Committee provides advice to the Board in respect of whether the provision of non-audit services by the External Auditor are compatible with the general standard of independence of auditors imposed by the Corporations Act. The Company’s External Auditor attends all Annual General Meetings and is available to answer shareholders’ questions about the conduct of the audit and the preparation and content of the Auditor’s report. Declarations by the Managing Director & Chief Executive Officer and Chief Financial Officer Before the Board approves the financial statements for each of the half year and full year, it receives from the Managing Director & Chief Executive Officer and the Chief Financial Officer a written declaration that, in their opinion, the financial records of the Company have been properly maintained and the financial statements are prepared in accordance with the relevant accounting standards and present a true and fair view of the financial position and performance of the consolidated group. These declarations also confirm that these opinions have been formed on the basis of a sound system of risk management and internal compliance and control which is operating effectively. The required declarations from the Managing Director & Chief Executive Officer and Chief Financial Officer have been given for the half year ended 31 December 2022 and the financial year ended 30 June 2023. Verification of Integrity of Periodic Corporate Reports Corporate reports which are not audited or reviewed by the external auditor are prepared by Senior Executive Management by reference to company records and systems, with external professional assistance where appropriate. Such reports, as are included in the non-audited sections of this Annual Report, are submitted to a Committee or the Board for consideration. 43 Directors’ Report For the year ended 30 June 2023 The Directors present their report together with the consolidated financial statements of the Group consisting of Seven West Media Limited and the entities it controlled at the end of, or during, the year ended 30 June 2023 and the auditor’s report thereon. Principal activities The principal activities of the Group during the financial year were free to air television broadcasting, digital streaming and newspaper publishing. Board The following persons were directors of Seven West Media Limited during the whole of the financial year and up to the date of this report, unless otherwise stated: > Kerry Stokes AC, Chairman & Non-Executive Director > James Warburton, Managing Director & Chief Executive Officer > Teresa Dyson, Non-Executive Director > David Evans, Non-Executive Director > Colette Garnsey OAM, Non-Executive Director > Michael Malone, Non-Executive Director > Ryan Stokes AO, Non-Executive Director > Michael Ziegelaar, Non-Executive Director > John Alexander, Non-Executive Director – retired 10 November 2022. Particulars of their qualifications, experience, special responsibilities and any directorships of other listed companies held at any time in the last three years are set out in this Annual Report under the headings “Board of Directors” and “Corporate Governance Statement” on pages 34 and 37 and form part of this report. Warren Coatsworth is the Company Secretary. He was appointed to the role on 24 April 2013. Mr Coatsworth is a solicitor holding a current practising certificate with degrees in Arts and Law (Hons) from the University of Sydney. He holds a Masters of Law in Media and Technology Law from the University of New South Wales as well as a Graduate Diploma in Applied Corporate Governance. He is a qualified Chartered Company Secretary and a Fellow and member of the Governance Institute of Australia. Mr Coatsworth has been Company Secretary of Seven Group Holdings Limited since April 2010 and Company Secretary of Seven Network Limited since July 2005. He has extensive experience as Legal Counsel at the Seven Network advising broadly across the company and was formerly a solicitor at Clayton Utz and was included on Doyles Guide’s list of Leading In-House Technology, Media & Telecommunications Lawyers in Australia for 2016 and 2017. Business strategies, prospects and likely developments Information on the Company’s operations and the results of those operations, financial position, business strategies and prospects for future financial years has been included in the “Group Performance” section starting on page 12. The Group Performance section also refers to likely developments in the Company’s operations in future financial years and the expected results of those operations. Information in the Group Performance section is provided to enable shareholders to make an informed assessment about the operations, financial position, business strategies and prospects for future financial years of the Group. Significant changes in the state of affairs In the opinion of the Directors, there were no significant changes in the state of affairs of the Company that occurred during the financial year. Current year performance For the year ended 30 June 2023, the Group recorded Earnings Before Interest and Tax (EBIT) (and before significant items) of $238.3 million. The statutory profit after tax was $145.7 million (including significant items). The FY23 net operating cash inflows were $77.4 million. Further information is provided in the Group Performance on pages 12 to 25. Matters subsequent to the end of the financial year There are no matters or circumstances which have arisen since the end of the financial year which have significantly affected or may affect: a. the Group’s operations in future financial years; b. the results of those operations in future financial years; or c. the Group’s state of affairs in future financial years. 44 Directors’ Report Seven West Media Limited Annual Report 2023Meetings of Directors The number of meetings of the Company’s Board of Directors and of each Board Committee held during the year ended 30 June 2023, and the numbers of meetings attended by each Director were: Directors Kerry Stokes AC John Alexander* Teresa Dyson David Evans Colette Garnsey OAM Michael Malone Ryan Stokes AO James Warburton Michael Ziegelaar Meetings of Directors Audit and Risk Remuneration and Nomination (a) 10 5 10 10 10 10 10 10 10 (b) 9 4 10 8 10 10 10 10 10 (a) - - 10 10 - 10 - - 10 (b) 3 1 10 9 7 10 10 10 10 (a) - 3 - 10 10 10 10 - - (b) - 3 3 10 10 8 10 7 4 a. Number of meetings held during the year while the person was a Board or Committee member. b. Number of meetings attended. Please note Directors may attend meetings of Committees of which they are not a formal member, and in these instances, their attendance is also included above. * Retired as Director on 10 November 2022. Performance rights and options During the financial year, there were not any rights issued over an equivalent number of unissued fully paid ordinary shares in the Company. At the date of this report, the following rights to acquire an equivalent number of ordinary shares in the Company under the various employee equity schemes are outstanding: Share Plan Seven West Media Equity Incentive Plan (2021 LTI) Seven West Media Equity Incentive Plan (2022 LTI) Seven West Media Equity Incentive Plan (2023 LTI) Rights on Issue Expiry Date 22,135,415 31 August 2023 6,362,864 5,678,425 31 August 2024 31 August 2025 Rights were granted for nil consideration. None of the rights currently on issue entitle the holder to participate in any share issue. During the financial year, 11,334,213 rights vested and 15,218,767 rights lapsed, including 2023 STI plan. There are no other unissued shares or interests under options as at the date of this report. For names of the Directors and Key Management Personnel who currently hold rights through these schemes, refer to the Remuneration Report. 45 Dividends – Seven West Media Limited Dividends paid to members during the financial year were as follows: Final ordinary dividend for the year ended 25 June 2022: nil cents (2021: nil cents) Interim ordinary dividend for the year ended 30 June 2023: nil cents (2022: nil cents) 2023 $ – – 2022 $ – – In addition to the above dividends, since the end of the 2023 financial year, the Directors have declared the payment of a final ordinary dividend of nil cents per share. Environmental regulation The Group’s major production facilities do not require discharge licences under the Environmental Protection Act 1986 and no formal reporting is required to either the Environmental Protection Authority or the National Pollutant Inventory. Greenhouse gas and energy data reporting requirements The Group continues to measure and monitor its Greenhouse Gas emissions. Current emission levels do not require reporting under the National Greenhouse and Energy Reporting Act (2007). The Group is actively working towards reduction of its direct emissions from the consumption of fuels (Scope 1) and indirect emissions from electricity consumption (Scope 2). Refer further details in the Sustainability Section on pages 32 to 33 of this report and the accompanying Sustainability Report. There are no other particular and significant environmental regulations under the law of the Commonwealth or of a State or Territory for the Group. Directors’ interests in securities The relevant interests of each Director in shares and rights issued by the Company, as notified by the Directors to the ASX in accordance with S205G(1) of the Corporations Act 2001, at the date of this report are as follows: Kerry Stokes AC James Warburton Teresa Dyson David Evans Colette Garnsey OAM Michael Malone Ryan Stokes AO Michael Ziegelaar Performance Rights – 17,021,374 – – – – – – Restricted Shares1 Number of ordinary shares – – 42,303 – 35,051 90,045 – 36,018 621,453,734 13,415,755 117,720 1,397,803 425,000 273,000 240,466 10,000 1 Restricted shares relate to shares purchased during the year in relation to the Non-Executive Director Share plan, refer further details in Section 11 of the Remuneration Report. 46 Directors’ Report Seven West Media Limited Annual Report 2023 > all non-audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed by the Audit and Risk Committee to ensure they do not impact the integrity and objectivity of the auditor; > the non-audit services provided do not undermine the general principles relating to auditor’s independence as set out in APES 110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting in a management decision making capacity for the Group, acting as an advocate of the Group or jointly sharing the risks and rewards. The Lead auditor’s independence declaration is set out on page 68 and forms part of the Directors’ Report for the financial year ended 30 June 2023. Rounding of amounts The Group is of a kind referred to in ASIC Instrument 2016/191 and in accordance with that Instrument, amounts in the consolidated financial statements and Directors’ Report have been rounded off to the nearest one thousand dollars unless otherwise stated. This report is made in accordance with a resolution of the Directors. Kerry Stokes AC Chairman Sydney 16 August 2023 Remuneration report A remuneration report is set out on the pages that follow (pages 48 to 67) and forms part of this Directors’ Report. Indemnity and insurance of Directors and officers The Constitution of the Company provides an indemnity to any current and former Director, Alternate Director and Secretary of the Company against any liabilities incurred by that person arising out of the discharge of duties as an officer of the Company or the conduct of the business of the Company, including associated legal costs defending any proceedings relating to that person’s position with the Company, except where the liability arises out of conduct involving a lack of good faith. As permitted by the Constitution of the Company, the Company has entered into Deeds of Access, Insurance and Indemnity with each Director as at the end of the financial year. No amounts were paid and no actions were taken pursuant to these indemnities during the year. During the financial year, the Company paid a premium in respect of a contract insuring all Directors and officers (including employees) of the Company and of related bodies corporate against certain liabilities specified in the contract. The contract prohibits disclosure of the nature of the liabilities insured and the amount of the premium. Non-audit services The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the Group are important. Amounts paid or payable by the Group to the auditor, KPMG, for non-audit services provided during the year were $235,930. The Board of Directors has considered the position and, in accordance with the advice received from the Audit and Risk Committee, is satisfied that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the provision of non-audit services by the auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: 47 Remuneration Report Message from the Remuneration & Nomination Committee Chairman Dear Shareholder, On behalf of the Seven West Media Board, we present the Remuneration Report for the 2023 financial year (FY23) ended 30 June 2023. FY23 was a solid year for Seven West Media (SWM) with significant ratings achievements, however, earnings have been challenged by the current macro-economic environment. Seven is Australia’s #1 total television company. Our strategy of investing in premium content and driving digital transformation continues to deliver audience consistency and strength. Our three strategic pillars established in FY20 continued to guide our long-term strategy to be relevant and critical to the ever-changing external environment as follows: 1. Content-Led Growth – During the year: > Secured extensions on the current AFL and Cricket broadcast agreements, inclusive of digital rights for the first time, as well as entering into a new agreement with NBCUniversal which secures more than 1,400 hours a year of content across the 7Bravo linear channel, 7Plus and on-demand. > These agreements supplement the Group’s operations which has digital at its core. BVOD consumption continued to grow with a 1.4% increase to total minutes streamed, excluding Olympics in FY22 and Commonwealth Games in FY23. > National ratings leadership continued in FY23, our third consecutive year of ratings leadership. > Our print operations, with 32 titles across city and regional areas in Western Australia, dominate the market, with the expansion of The West’s digital assets attracting a younger audience. 2. Transformation – The continued push to maintain cost discipline has been critical in delivering a sustainable business over the long term. > Despite the current macroeconomic inflationary environment, the Group was able maintain cost growth to 0.9% year on year, with cost savings identified to offset increases in relation to content investment, the new NBCU contract and the additional week in FY23. The net cost saving in relation to major sporting events (Olympics in FY22 compared to Commonwealth Games in FY23) offset the increase from the full year Prime contribution in FY23. > The relocation of the Sydney News teams to the Group’s head office at South Eveleigh has meant that for the first time in four decades, all Sydney based staff are now co-locating in the same offices. The benefits from this relocation are expected to be seen in FY24 and beyond. 3. Capital Structure and M&A – Recent performance has resulted in a significant improvement in our financial results and SWM’s debt position. > The improved balance sheet has enabled the introduction of the Buyback program as part of the Group’s capital management initiatives. Overview of FY23 Executive Remuneration and Performance Outcomes > Fixed Remuneration – There were no remuneration increases to Executive Key Management Personnel (KMP) and Non-Executive Directors during the year, excluding superannuation increases for Non-Executive Directors based on the statutory increase. > Short-Term Incentive (STI) Plan – The Group’s underlying EBIT result did not exceed the 90% threshold set by the Board for the gateway to open. Accordingly, no amounts are payable under the FY23 STI Plan. Further details of the FY23 STI Plan are provided in Section 7 of the Report. > Long-Term Incentive (LTI) Plan – The FY21 grant reached the end of its three-year performance period on 30 June 2023. The Award was tested against the Absolute TSR CAGR performance metric associated with the FY21 plan. The share price significantly outperformed the upper end of the target range. Accordingly, the FY21 LTI plan will vest in full, with participants receiving restricted shares subject to a minimum 12-month restriction period in FY24. Following the AGM in November 2022, performance rights under the FY23 LTI Plan were granted to the MD & CEO and other Executive KMP with the key features being: a. An Absolute Total Shareholder Return Compound Annual Growth Rate (ATSR CAGR) performance hurdle over a three-year performance period with a further minimum 12-month restricted period; and b. A performance-based vesting schedule with vesting between 50% to 100% based on performance from 15% to greater than 25%. Further details of the FY23 LTI Plan are provided in Section 7 of the Report. There were no other material changes to the remuneration framework or terms and conditions of KMP during FY23. 48 Remuneration Report Seven West Media Limited Annual Report 2023 Changes to Key Management Personnel and Non-Executive Directors > KA McGrath, Chief People and Culture Officer, left the Group effective 30 November 2022. > JH Alexander, Non-Executive Director and Remuneration & Nomination Committee Chairman retired on 10 November 2022. > C Garnsey OAM was appointed Remuneration & Nomination Committee Chairman effective 10 November 2022. Response to concerns raised regarding the FY22 Remuneration Report and changes for FY24 At the 2022 Annual General Meeting (AGM), 29.17% of votes cast by voting shareholders representing 8.5% of the total shareholders were against the FY22 Remuneration Report. Following the AGM, the SWM Board and Remuneration & Nomination Committee have consulted with proxy advisors, investors and other stakeholders to identify issues for consideration. The valuable feedback received has been incorporated into the review of our remuneration framework for FY24 as well as the disclosure of FY23 outcomes. The key issues and concerns raised during these discussions are listed below. Key concerns Response The LTI plan has only one measure (Absolute TSR). The FY24 LTI Plan will be based on two equally weighted measures; Relative TSR and EPS Growth. An Absolute TSR hurdle may inappropriately penalise (or reward) executives due to market conditions despite the positive (or negative) contribution of the executive. Absolute TSR will be replaced by a Relative TSR measure, with vesting based on Seven West Media’s relative TSR performance against a selected group of peer companies. LTI plan does not have a relative performance measure. Further information can be found in section 7.4. High CEO Fixed Remuneration relative to comparators on a market capitalisation basis Outlook and Changes for FY24 Our Group’s strategy to focus on content-led growth and market-leading digital assets will play a major role in adapting to the ever-changing content consumption habits of people across all demographics. This growth will be balanced by an ongoing focus on cost management and operational efficiencies, as well as capital management initiatives. As outlined in our response to the concerns around the FY22 Remuneration Report we have made changes to LTI arrangements from the FY24 performance year which aims to balance the interests of shareholders whilst providing appropriate incentive for our executives to deliver against our long-term business strategy. The Board believes the CEO’s Fixed Remuneration remains appropriate given the responsibilities, qualifications and experience required to lead a diversified organisation, focused on transforming media, such as Seven West Media. It is also aligned to applicable profile and size of business market benchmarks in the sector. In considering appropriate benchmark organisations in determining Fixed Remuneration, market capitalisation is only one factor to apply, with competitor alignment; business complexity and regulatory environment being other factors to consider. The CEO’s Fixed Remuneration remains unchanged for FY24, except for an increase in superannuation based on the statutory increase. Outside of this, Fixed Remuneration has remained unchanged since his appointment in 2019. During this time Seven West Media has acquired and successfully integrated the Prime regional television network, meaningfully growing the size of our business, operations and audience reach, without any change to the CEO’s Fixed Remuneration. Thank you for your ongoing support of Seven West Media. I look forward to receiving your views and support at the 2023 Annual General Meeting. Yours faithfully, Colette Garnsey Remuneration & Nomination Committee Chairman 49 Table of Contents 1. FY23 Remuneration Framework – Overview 2. Link between remuneration policy and Group performance 3. Executive Remuneration Outcomes During the FY23 Performance Year 3.1 Executive Remuneration Earned and Vested (Voluntary Disclosure) 4. Overview 5. FY23 Key Management Personnel Covered by this Report 6. Remuneration Governance 6.1 Role of the Remuneration and Nomination Committee 6.2 Members of the Remuneration and Nomination Committee During FY23 6.3 Services from External Remuneration Consultants 7. Incentive Plans Overview 7.1 Short-Term Incentive (STI) Plan 7.2 Long-Term Incentive (LTI) Plan 7.3 Performance Rights granted under FY23 STI and LTI Plans 7.4 FY24 LTI Plan 8. FY23 Incentive Plans Outcomes 8.1 FY23 STI Outcomes 8.2 Prior year LTI Outcomes during FY23 9. Statutory Remuneration Disclosures for Key Management Personnel 9.1 Executive Remuneration in Detail (Statutory Disclosures) 9.2 Key Management Personnel Equity Transactions and Holdings 10. Loans and Other Transactions with Key Management Personnel 11. Non-Executive Directors (NEDs) Remuneration Framework 11.1 NEDs Director Fees 11.2 NED Remuneration 51 52 53 55 55 56 57 61 63 65 66 50 Remuneration Report Seven West Media Limited Annual Report 20231. FY23 Remuneration Framework – Overview Seven’s Remuneration Framework and outcomes are strongly linked to the delivery of shareholder value over the short and long-term. Executive remuneration is determined by the Remuneration and Nomination Committee and, for the MD and CEO, is recommended to the Board for its approval. Executive remuneration comprises both a fixed component and variable (or ‘at risk’) components which include STI and LTI elements. In structuring remuneration, the Board aims to find a balance between fixed remuneration and ‘at risk’ variable remuneration; cash and deferred equity; and short and long-term rewards in line with the Group’s performance cycle. Fixed Remuneration (FR) Short-Term Incentives (STI) Long-Term Incentives (LTI) Purpose Description Provides a fixed level of income commensurate with the Executive’s role, responsibilities, qualifications, and experience. Base remuneration and superannuation are aimed at the median of the market. Fixed remuneration is made up of cash salary, non-monetary benefits and employer contributions to superannuation funds as well as any ongoing employee benefits on a salary-sacrificed basis. Outcomes reached in FY23 No changes were made to fixed remuneration for MD & CEO or other executives during FY23. STI rewards the achievement of pre- determined, individual and Group KPIs over the 12-month performance period which are aligned to, and supportive of the Group’s annual strategic objectives. STI awards are delivered in cash (50%) and deferred shares (50%). Any restricted shares awarded at the end of the performance period are subject to a minimum 12-month restriction period. The Group’s underlying Earnings Before Interest and Tax (EBIT) result for FY23 did not exceed the 90% EBIT gateway, resulting in no vesting of the FY23 STI plan. LTI rewards the achievement of pre-determined Group objectives over the 3-year performance period which are aligned to and supportive of the Group’s longer term strategic objectives. LTI awards are delivered in performance rights, subject to performance and service conditions. The performance is tested once at the end of the performance period. The FY21 LTI Plan exceeded the upper end of its Absolute Total Shareholder Return Compound Annual Growth Rate benchmark as tested at the end of the performance period (30 June 2023), resulting in 100% of the award converting into restricted shares in FY24. Opportunity No ‘at risk’ portion % of FR Target Maximum % of FR CEO: 100% CFO1: 75% Other execs1: 50% Mix (At target) CEO: CFO: Other executives: 33.3% 40% 57% CEO: CFO: Other executives: 150% 93.75% 62.5% 33.3% 30% 29% CEO: CFO: Other execs: CEO: CFO: Other executives: 100% 75% 25% 33.3% 30% 14% Delivery All KMP 100% cash All KMP All KMP 50% cash 50% deferred shares2 100% deferred shares2 Timing All KMP All KMP All KMP Yr 1 Cash Performance Period Performance Period Yr 1 Yr 2 Yr 3 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Cash Performance rights Restricted shares3 Performance rights Restricted shares3 1 To drive and incentivise significant outperformance, from the FY23 performance year onwards for the CFO and other Executives a maximum STI opportunity of 125% of target was introduced, determined subject to the Board’s discretion. Refer to Section 7.1 for further detail. 2 Deferred shares collectively refers to performance rights and any restricted shares received. 3 The change to restricted shares is dependent on performance and service conditions being met. 51 2. Link between remuneration policy and Group performance MD and CEO Performance Objectives The Committee reviews and makes recommendations to the Board on performance objectives for the MD and CEO. These objectives are intended to provide a clear link between remuneration outcomes and the key drivers of long-term shareholder value. Group performance is linked to the STI Plan through the EBIT hurdle as defined below. The STI objectives are set in the form of a balanced scorecard with targets and measures aligned to the Group’s strategic priorities cascaded from the MD and CEO scorecard to the relevant Executive KMP scorecard. The key financial and non-financial objectives for the MD and CEO in the 2023 financial year, with commentary on key highlights, are provided in Section 8.1 of the Report. Group performance is linked to the LTI Plan through the ATSR CAGR target for the FY21, FY22 and FY23 LTI plans. This has been updated in the FY24 LTI Plan, refer description in Section 7.4. Group Financial Performance – Five Year Perspective In FY23, the Remuneration Policy was linked to profit before significant items, net finance costs and tax (EBIT), and TSR performance of the Group. The following table sets out the Group’s performance over the last five financial years: Statutory NPAT ($’000’s) NPAT (excluding significant items)1,2 ($’000’s) Profit before significant items1, net finance costs and tax (EBIT) ($’000’s) Profit before depreciation, amortisation, significant items1, net finance costs and tax (EBITDA) ($’000’s) 2023 2022 20215 20204,5 20194,5 145,747 146,309 238,266 211,052 200,759 308,993 318,122 (201,181) (324,294) 125,545 229,108 36,896 94,985 249,451 212,812 279,745 342,190 253,891 123,427 263,468 Revenue ($'000's) 1,487,424 1,539,629 1,269,646 1,227,047 1,427,003 Diluted earnings per share (as reported) (cents) Diluted earnings per share (excluding significant items)1 (cents) Shares bought back during the year (‘$000’s) Dividend per share (cents) Share price as at reporting date3 ($) Return on capital employed (%) 9.2 9.3 14,998 – 0.38 21.40 13.0 12.4 – – 0.38 31.50 20.7 8.2 – – 0.47 22.75 (13.2) 2.5 – – 0.09 9.55 (21.5) 16.5 – – 0.47 21.03 1 Significant Items is a non-IFRS measure. For details of significant items, refer to Note 2.4 to the Financial Statements. 2 NPAT (excluding significant items) is a non-IFRS measure. This measure is applied consistently year on year and used internally by management to assess the performance of the business and hence is provided to enable an assessment of remuneration compared to Group performance. Refer to the Operating and Financial Review for reconciliation to statutory net profit after tax. The opening share price on the first day of trading in FY19 was $0.84. 2020 and 2019 figures have been restated for the impact of accounting standard changes. Excludes discontinued operations. 3 4 5 52 Remuneration Report Seven West Media Limited Annual Report 20233. Executive Remuneration Outcomes During the FY23 Performance Year 3.1 Executive Remuneration Earned and Vested (Voluntary Disclosure) The purpose of these tables is to provide shareholders with a summary of the actual remuneration which has been earned by Executive KMP during 2023, and to show remuneration received during 2022 for comparative purposes. These are prepared to supplement the statutory requirements in Section 9.1 of the Report. This disclosure has been revised in the current year so that the value earned aligns to the performance period ending in each financial year. The cash and restricted share components of the STI and LTI plans appearing in these tables are deemed to be earned as tested at end of the performance year. These amounts are paid or will vest in the following financial year. This is different to the Statutory Disclosure table in Section 9, which has been prepared in accordance with Australian Accounting Standards, which discloses the value of STI and LTI grants which may or may not vest in future years (i.e., reported on an accounting basis). Cash Paid This table represents Fixed and other Remuneration received, as well as the value of cash incentives earned in respect of 2023 and 2022. Name MD and CEO J Warburton Executive KMP KJ Burnette J Howard BI McWilliam Former Executive KMP KA McGrath4 Total Financial Year Fixed Remuneration1 $ Other Remuneration2 $ STI Cash Payment3 $ Termination Payments $ Total Cash Payments4 $ 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 1,313,125 1,326,432 1,209,176 1,226,432 609,131 626,432 1,090,655 1,076,432 231,891 501,432 4,453,978 4,757,160 49,009 50,905 48,878 44,324 37,562 34,361 44,617 41,834 (31,211) 32,286 148,855 203,710 - 1,012,500 - 312,500 - 308,100 - 275,000 - - - - - - - - 1,362,134 2,389,837 1,258,054 1,583,256 646,693 968,893 1,135,272 1,393,266 - 251,999 131,250 - 452,679 664,968 - 251,999 4,854,832 2,039,350 - 7,000,220 1 Fixed remuneration is the total cost of salary, salary-sacrificed benefits (including associated fringe benefits tax (FBT)) and an accrual for annual leave entitlements. The value may change where an Executive’s annual leave balance changes as a result of taking additional or less leave than the leave accrued during the year. 2 Other remuneration includes the cash value of non-monetary benefits, superannuation, long service leave entitlements and any FBT payable on non-monetary benefits. The elements of other remuneration are valued consistently with the equivalent benefits included in the statutory disclosure table in Section 9 of the Report. 3 Represents cash STI awarded for the performance year, which is paid in the following year. 4 KA McGrath’s employment ended on 30 November 2022. Termination benefits include payment in lieu of notice and provision of other benefits by law upon termination. 53 Equity Payments This table represents Equity-based remuneration considered to be earned in respect of those plans that reached the end of their performance period during 2023 and 2022. The value shown for these plans is based on the share price at the end of the performance year, which is aligned to the end of the financial year. The movement in share price between grant date allocation and the value of performance rights based on share price at the end of the performance period is noted separately below. Name MD and CEO J Warburton Executive KMP KJ Burnette J Howard BI McWilliam Former Executive KMP KA McGrath4 Total Financial Year STI Vesting1 $ LTI Vesting2 $ Share Price movement3 $ Total Value of Equity Payments $ 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 - 1,350,000 1,012,500 - 2,868,750 (189,506) - 312,500 - 308,100 - 275,000 - 131,250 - 2,039,350 312,500 - 325,000 - 275,000 - 131,250 - 2,393,750 - 664,062 (58,489) 690,625 (57,666) 584,375 (51,471) 278,906 (24,566) 5,086,718 (381,698) 4,218,750 822,994 976,562 254,011 1,015,625 250,434 859,375 223,529 410,156 106,684 7,480,468 1,657,652 1 Relates to the value of performance rights allocated under the FY22 STI plan, with the number of performance rights based received on a five-day VWAP of 46.75 cents. The rights automatically convert into restricted shares in August 2022 (FY23) based on financial performance in the year ended 25 June 2022. 2 Relates to value of performance rights allocated under the FY21 LTI plan, with the number of performance rights received based on a five-day VWAP of 12.0 cents. The rights will automatically convert into restricted shares in August 2023 (FY24) based on the calculation performed over the performance period of 1 July 2020 to 30 June 2023. 3 Relates to the growth in share price from the grant date allocation 5-day VWAP to the value at the end of the performance period being 37.5 cents at 30 June 2023 (applicable to the FY21 LTI earned in FY23) and 38.0 at 25 June 2022 (applicable to the FY22 STI earned in FY22). 4 KA McGrath forfeited her FY23 STI entitlement and was not a participant in the FY23 LTI entitlement issuance. KA McGrath’s FY22 STI restricted shares were retained and FY21 and FY22 LTI entitlements remain on foot to be tested in line with the operation of the plan, with the expected vesting of the FY21 LTI noted above. 54 Remuneration Report Seven West Media Limited Annual Report 2023 4. Overview This Report describes the remuneration arrangements for the Key Management Personnel (KMP) of Seven West Media Limited as defined in AASB 124 Related Party Disclosures, including Non-Executive Directors, the Managing Director and Chief Executive Officer (MD and CEO), and other Executives (including Executive Directors) (hereafter referred to in this Report as Executive KMP) who have authority for planning, directing and controlling the activities of the Group. The information provided in this Remuneration Report has been audited as required by section 308(3C) of the Corporations Act 2001 (Cth). It forms part of the Directors’ Report. 5. FY23 Key Management Personnel Covered by this Report The KMP whose remuneration is disclosed in this year’s Report are: KMP Non-Executive Directors (NEDs) KM Stokes AC T Dyson D Evans C Garnsey OAM M Malone RK Stokes AO M Ziegelaar Former NEDs JH Alexander Position Chairman Director Director Director Director Director Director Director Managing Director and Chief Executive Officer Term as KMP Full Year Full Year Full Year Full Year Full Year Full Year Full Year Part Year – retired 10 November 2022 J Warburton Executive KMP KJ Burnette J Howard BI McWilliam Former Executive KMP KA McGrath MD and CEO Chief Revenue Officer Chief Financial Officer Commercial Director Full Year Full Year Full Year Full Year Chief People and Culture Officer Part Year – ceased as KMP on 30 November 2022 55 6. Remuneration Governance 6.1 Role of the Remuneration and Nomination Committee The Remuneration and Nomination Committee is the governing body for establishing, monitoring and reviewing the Remuneration Framework for the Group. The primary objective of the Remuneration and Nomination Committee (the Committee) is to assist the Board to fulfil its corporate governance and oversight responsibilities. The Committee seeks to ensure that remuneration policies and structures are fair, competitive and are aligned with the long-term interests of the Group. The Committee has a strong focus on the relationship between business performance, risk management and remuneration. Content Led Growth Strategic Priorities Transformation Remuneration Strategy Capital Structure and M&A Attract and retain high-performing employees with market competitive and flexible reward. Align reward to our business strategy, helping to create sustainable shareholder value, while adhering to good governance principles. Remuneration Principles Align remuneration with shareholder interests Provide market competitive and responsible remuneration Enable attraction and retention of high-performing employees Support an appropriate culture and employee conduct Be simple, flexible and transparent Differentiate pay for performance and behaviour in line with our vision and strategy An overview of the roles and responsibilities of the Board, the Committee and Management in relation to Board and Executive KMP remuneration is as follows: Board Remuneration and Nomination Committee Management > Approves remuneration arrangements > Recommends remuneration and incentive > Prepares recommendations and and conditions of service for the MD and CEO, Executive KMP and Non- Executive Directors. policies, structures and practices. > Recommends remuneration arrangements for the MD and CEO and Executive KMP. > Monitors the performance of Executive management. > Retains discretion in determining > Undertakes an annual review of the Group’s remuneration strategy and Remuneration Policy. the overall outcome of the incentive awards or to adjust remuneration to ensure it is consistent with, and appropriately reflects the Group performance and of the individual Executive experience over the relevant performance period. > Reviews executive remuneration arrangements for Executive KMP and Non-Executive Directors on an annual basis against the Remuneration Policy, obtaining independent external remuneration advice where appropriate. > Review and recommend the Remuneration Report and any other report required to be produced for shareholders to meet statutory requirements. provides supporting information for the Committee’s consideration. > Implements approved remuneration- related policies and practices. > The MD and CEO assesses each Executive’s performance at the end of the financial year relative to agreed business and individual targets. Based on this assessment, the MD and CEO makes a recommendation to the Committee for approval. During the year, the Committee met on nine occasions and reviewed and approved or made recommendations to the Board on matters including: > Remuneration review for the MD and CEO and other senior Executives (broader than those disclosed in the Remuneration Report) covered by the Group’s Remuneration Policy; > Review of the STI Plan, LTI Plan and Employee Share Plans; > The Group’s performance framework (objectives setting and assessment) and annual variable remuneration spend; > Performance and remuneration outcomes for senior Executives; > Approval of Executive KMP and other senior Executive appointments and terminations; > The effectiveness of the Group’s Remuneration Policy; > Succession plans for senior Executives; and > Diversity, equity and inclusion, employee engagement, and health, safety and wellbeing. The Committee reviews its Charter every financial year. The Corporate Governance Statement on pages 37 to 43 provides further information on the role of the Committee. 56 Remuneration Report Seven West Media Limited Annual Report 20236.2 Members of the Remuneration and Nomination Committee During FY23 During FY23, the members of the Remuneration and Nomination Committee were: > Ms C Garnsey OAM – appointed Chairman 10 November 2022 > Mr D Evans > Mr RK Stokes AO > Mr M Malone – appointed to Committee 10 November 2022 > Mr JH Alexander, Chairman – retried 10 November 2022 6.3 Services from External Remuneration Consultants The Group employs in-house remuneration professionals who provide recommendations to the Committee and the Board. External consultants and advisors are engaged as needed to provide independent advice. The requirements for external consultants’ services are assessed as needed in the context of remuneration matters that the Committee requires to address. Recommendations provided by external consultants are used as a guide. During FY23, the Committee engaged PricewaterhouseCoopers (“PwC”) to provide an independent valuation for the 2023 LTI Award, and to assist in developing and designing the proposed FY24 LTI Plan. The Committee also engaged Guerdon Associates to independently calculate the FY21 LTI outcome noted in Section 8.2. In the course of providing this information, the Board is satisfied that PwC and Guerdon Associates did not make any remuneration recommendations relating to KMP as defined by the Corporations Act. The Committee and Board make their decisions independently, using the information provided and with careful regard to the Group’s strategic objectives, risk appetite and the Seven West Media Remuneration Policy and principles. 7. Incentive Plans Overview 7.1 Short-Term Incentive (STI) Plan The STI Plan is an award used to provide clear motivation to focus on strategically aligned metrics and goals that are measured annually. The award sets annual financial and non-financial measures that are aligned to the Group’s strategic objectives. Seven West Media FY23 STI Plan STI Opportunity For the MD and CEO, the ‘at target’ STI opportunity is 100% of fixed remuneration, with a maximum amount of 150% for significant outperformance, determined subject to the Board’s discretion. To drive and incentivise significant outperformance, from the FY23 performance year onwards for the CFO and other Executives a maximum STI opportunity of 125% of target was introduced, determined subject to the Board’s discretion. For the CFO and other executives, the ‘at target’ STI opportunity is 75% and 50% of fixed remuneration, with maximum opportunity of 93.75% and 62.5% respectively. ‘At-target’ refers to the STI award opportunity for an Executive who achieves successful performance against all KPIs and where 100% of the Group’s underlying EBIT target is achieved. EBIT is defined as the Group’s profit before significant items, net finance costs and tax. Eligibility The STI Plan covers employees in executive and senior management positions, subject to having more than six months’ active service during the financial year and remaining employed on, or not having provided notice of termination before the award date. Delivery of Awards The STI plan delivers awards in the form of: > 50% paid in cash at the end of the annual Performance and Remuneration Review (usually in the August pay cycle after results have been released). > 50% awarded as Performance Rights, designed to support an ownership culture and drive retention outcomes. The number of Performance Rights allocated to each participant was determined by dividing the dollar amount of the STI award deferred component by the 5-trading day volume weighted average price (VWAP) of the Group’s Share price leading into and including 25 June 2022 (the “Market Price”), rounded down to the nearest whole number. At the end of each performance year, an assessment will be performed of the Group and individual’s performance compared to Target metrics, to determine the amount of performance rights to vest into restricted shares. Restricted shares are subject to a minimum 12-month restriction period. Executives have entitlements to dividends and voting rights in relation to their Restricted Shares during the restriction period. No entitlements exist in relation to performance rights. 57 Seven West Media FY23 STI Plan Target Measures Determination of the STI Gateway STI targets are set by the Committee and approved by the Board at the start of each performance year, based on a range of factors including market performance and the responsibilities of each executive. The size of the STI pool is based on performance, based on the achievement of the Group’s underlying EBIT target set by the Board at the beginning of the financial year. Dependent on the performance against this target, the STI pool available will be as follows: Percentage of Group Underlying EBIT Achieved (%) STI Award Pool Available (% of On-Target) <90% 90–94% 95–99% 100% 0% 25% 50% 100% The Board retains discretion to not make an STI award available to participants where such payment is regarded to be inconsistent with shareholders’ interests over the financial year, even if the gateway requirement is achieved. Performance Conditions Performance is measured against financial and non-financial measures which support the Group’s strategy. Performance measures are set across Group, divisional and individual targets. Refer Section 8.1 for the FY23 MD and CEO’s balanced scorecard. Restricted shares recognise past performance and are not subject to further performance hurdles. Assessment of Performance Outcomes STI outcomes are subject to both a quantitative and qualitative assessment. The Board has the capacity to adjust STI outcomes (and reduce STI outcomes to zero if appropriate) in the assessment process. STI Treatment on Cessation of Employment If the participant ceases employment before the end of the performance period by reasons other than outlined below, unvested awards will automatically lapse. If the participant ceases employment before the end of the performance period by reason of death, disablement, retirement, redundancy or for any other reason approved by the Board, unvested awards remain on-foot, subject to original performance hurdles, although the Board may determine that some or all of the awards should be forfeited. Determination of STI at an Individual Level At an individual level, STI is designed to focus Executives on key performance measures supporting the Group’s business strategy and encourage the delivery of value for shareholders. Beginning of Performance Period r a e Y l i a c n a n i F End of Performance Period Performance Objectives Set > Individual objectives are agreed for Executive KMP, using a balanced scorecard approach under the four categories of (i) Strategic; (ii) Financial; (iii) Audience and Content; and (iv) People, Operations and Compliance. > The weighting of each measure varies to reflect the responsibilities of an individual’s role. > The measures relate to the contribution towards short to medium term performance outcomes aligned to the Group’s strategic objectives. > This methodology is replicated across the Group for all employees reflecting the individual’s responsibilities. Performance Assessed Against Objectives > The performance of each Executive KMP is assessed against their objectives and compliance standards. This assessment considers the performance of the Group, division and each individual against these objectives. > The Remuneration & Nomination Committee seeks input from the MD and CEO and CFO (on financial performance, internal audit and compliance matters) to be factored into this performance assessment. Determination of Remuneration Outcomes > Where Executive KMP deliver on-target performance, then incentive award recommendations are likely to be around target opportunity. Recommendations will be adjusted up or down in line with performance. > The Committee’s recommendations for the MD and CEO are then reviewed and ultimately approved by the Board. > The Committee approves the remuneration outcomes for other executives. 58 Remuneration Report Seven West Media Limited Annual Report 2023 7.2 Long-Term Incentive (LTI) Plan LTI rewards performance over the longer term and is designed to encourage sustained performance, drive long-term shareholder value creation and ensure alignment of executive remuneration outcomes to shareholder interests. LTI awards are delivered in the form of Performance Rights subject to Group performance hurdles and individual service conditions being met. Seven West Media FY23 LTI Plan LTI Plan Vehicle Number of Performance Rights Granted The grant is made in the form of Performance Rights. The Performance Rights are granted at no cost and each right entitles the participant to one ordinary share in the Group, subject to the achievement of the performance hurdles and service conditions outlined below. As Performance Rights are automatically exercised at vesting, no expiry date applies. For the MD and CEO, the value of the LTI allocated is 100% of fixed remuneration. For the CFO and other executives, LTI is allocated at 75% and 25% of fixed remuneration respectively. The number of Performance Rights granted to each Executive is equivalent to the face value of the LTI grant divided by an amount calculated based on the share price in accordance with the terms and conditions of the Plan. Performance Hurdle Performance Rights are subject to continued employment with Seven West Media and an Absolute Total Shareholder Return Compound Annual Growth Rate (ATSR CAGR) performance hurdle, measured over a three-year period (1 July 2022 to 30 June 2025). ATSR CAGR and Vesting Schedule ATSR CAGR is a metric where the Group’s performance is measured against a predefined target. That is, it focuses on the growth of SWM’s share price and value to shareholders, regardless of the broader market and other companies’ movements. It provides executives with a more direct line of sight to the level of shareholder return to be achieved. It also provides a tighter correlation between the executives’ rewards and the shareholders’ financial outcomes. The proportion of Performance Rights available to vest following testing of ATSR CAGR at end of the performance period is as follows: Group’s ATSR CAGR over the Performance Period Proportion of Performance Rights available to vest % Less than 15% 15% Nil 50% Greater than 15% but less than 25% On a straight-line pro-rata basis between 50% to 100% Equal to or greater than 25% 100% Testing of Performance Hurdle Awards are subject to a three-year performance period. Shortly after the completion of the performance period, the performance hurdles are tested to determine whether, and to what extent, awards vest. In assessing performance against the performance hurdles, the Remuneration & Nomination Committee, in its absolute discretion, may make any adjustments having regard to any matters that it considers relevant, including adjusting for abnormal or unusual factors that are outside of management’s control. The LTI Plan does not permit re-testing. Any Performance Rights that do not vest following testing of performance hurdles (i.e., at the end of the three-year performance period) will lapse. Any vested performance rights convert to restricted shares. Restricted shares are subject to a further minimum 12-month deferral period. Disposal Restrictions on Vested Shares There is a restriction imposed on the sale of shares acquired after vesting (to the extent the performance hurdles are achieved) until the earliest of the following: > The date the Executive ceases employment with Seven West Media (subject to approval by the Board); > The one-year anniversary of the vesting date (or subsequent anniversaries (if elected by the Executive)); or > The Board determines that the restriction should be released. Dividends and Voting Rights Change of Control Performance Rights do not carry any dividend or voting rights prior to vesting. Where there is a change of control, the Board may determine that some or all of the unvested performance rights vest or lapse. Where an actual change of control occurs before the Board has exercised its discretion, all unvested performance rights will vest on a pro rata basis having regard to the portion of the performance period that has elapsed. Cessation of Employment If the participant ceases employment before the end of the performance period by reasons other than outlined below, unvested awards will automatically lapse. If the participant ceases employment before the end of the performance period by reason of death, disablement, retirement, redundancy or for any other reason approved by the Board, unvested awards remain on-foot, subject to original performance hurdles, although the Board may determine that some or all of the awards should be forfeited. Hedging Under the Seven West Media Equity Incentive Plan Rules, Executives who are granted share-based payments, such as Performance Rights under the LTI Plan, are prohibited from entering into other arrangements that limit their exposure to losses that would result from share price decreases. 59 7.3 Performance Rights granted under FY23 STI and LTI Plans In line with the STI and LTI plans outlined above, the dollar value and number of performance rights with respect to the FY23 plans, are detailed below. These are subject to the performance conditions outlined. Refer to Section 8.1 for the outcome under the FY23 STI Plan. FY23 Deferred STI1 FY23 LTI2 Total Name $ Number3 $ Number4 $ Number Financial Year in which Grant Vests J Warburton 1,012,500 2,715,933 1,350,000 2,723,970 2,362,500 5,439,903 2024, 2026 KJ Burnette J Howard KA McGrath5 BI McWilliam 312,500 243,750 131,250 275,000 838,251 653,835 352,065 737,660 312,500 487,500 Nil 630,548 983,656 Nil 625,000 1,468,799 2024, 2026 731,250 131,250 1,637,491 2024, 2026 352,065 2024, N/A 275,000 554,882 550,000 1,292,542 2024, 2026 100% of the deferred award is recognised in the current performance year, subject to the performance assessment detailed in Section 8.1. 1 2 Subject to performance conditions to be tested on 30 June 2025 and vesting in August 2025. 3 The number of rights granted is based on the Volume Weighted Average Price for the five days leading into and including 25 June 2022. This price was $0.3728. The number of rights granted is based on the Volume Weighted Average Price for the five days following the announcement of SWM’s annual financial results for FY22 financial year. This price was $0.4956. 4 5 KA McGrath ended employment on 30 November 2022. KA McGrath forfeited her FY23 STI entitlement and was not a participant in the FY23 LTI Plan. 7.4 FY24 LTI Plan The Board has undertaken a review of the LTI incentive plan and in relation to grants made from FY24 onwards, the performance hurdles for LTI will be based on two equally weighted performance hurdles; Relative Total Shareholder Return (RTSR) and EPS Growth. Each hurdle will be tested and may vest independently of each other. Other than the new performance hurdles, there will be no other changes to the operation of the LTI plan, with all other factors operating in line with the table in Section 7.2. FY24 Seven West Media Long-Term Incentive Plan Performance Hurdle Performance Rights are subject to continued employment with Seven West Media (SWM) and two equally weighted performance hurdles; Relative Total Shareholder Return and EPS Growth, measured over a three-year period (1 July 2023 to 30 June 2026). RTSR and Vesting Schedule Performance Measure SWM peer group ranking Proportion of Rights available to vest % At the 75th percentile or better 100% Between the median and 75th percentile Pro-rata vesting from 50% to 100% At the median percentile Below the median Calculation of Result 50% 0% Each company in the peer group will be given a percentile ranking based on the growth in Total Shareholder Return (TSR) over the three-year performance period. TSR outcomes will be calculated independently by an external provider. TSR relative to a Media and Entertainment peer group The peer group is made up of 19 media and entertainment companies (including Seven West Media) listed on the ASX subject to a minimum market capitalisation at the beginning of the performance period. The peer group comprises: > ARN Media Ltd > Carsales.com Ltd > Domain Holdings Australia Ltd > Enero Group Ltd > EVT Ltd > Frontier Digital Ventures Ltd > GTN Limited > IVE Group Ltd > News Corporation > Nine Entertainment Co. Holdings Ltd > NZME Ltd > Ooh!Media Ltd > Playside Studios Ltd > REA Group Ltd > Seek Ltd > Seven West Media Ltd > Sky Network Television Ltd > Southern Cross Media Group Ltd > The Market Herald Ltd 60 Remuneration Report Seven West Media Limited Annual Report 2023FY24 Seven West Media Long-Term Incentive Plan EPS Growth and Vesting Schedule Performance Measure Aggregate EPS Growth Proportion of Rights available to vest % At or above the maximum EPS target 100% Between the threshold and maximum target Pro-rata vesting from 50% to 100% At the threshold target Below the threshold target Calculation of Result 50% 0% EPS performance will be measured based on underlying EPS adjusted for significant items from the audited annual accounts allowing for any adjustments to this figure for abnormal or unusual items. A Threshold EPS target will be set each financial year over the LTI performance period. The Threshold EPS target is the aggregate total of the threshold EPS target for each financial year within the three- year performance period. The maximum EPS target is the aggregate total of the threshold EPS target plus 5% for each financial year within the three-year performance period. The annual threshold and maximum EPS targets will be disclosed in the annual report following the end of the applicable year along with aggregate performance to date. 8. FY23 Incentive Plans Outcomes 8.1 FY23 STI Outcomes Under the design of the STI Plan, a pool may be available for distribution where the Group’s EBIT threshold target is met as set out in Section 7.1 of the Report. For FY23, the Group’s EBIT result of $238.3 million meant that the STI financial gateway did not open. The STI framework provides a set of Key Performance Indicators (KPIs) which are used to assess the quality of the outcomes delivered against the Group’s financial and non-financial strategic goals. 61 The FY23 MD and CEO scorecard is as follows: Strategic Pillar & Measure Weight Performance Against Scorecard Targets Outcome Strategic > Deliver on content and cost agenda. > Continue to drive long term benefits of Prime acquisition. > Deliver essential projects to monetise data and audience to rebuild and scale. > Future proof content pipeline through scale, diversification, and synergy. Financial > Deliver Company EBITDA / EBIT targets. > Generate net-free cash outflow at or better than forecast. > Improve net debt. 20% > National Ratings Leadership continued in FY23, the third consecutive year of ratings leadership. Partial Achievement > #1 ratings for Total People in CY2022. > Secured extensions to AFL and Cricket broadcast agreements. > Share Buyback program operating. > Delivery of Prime acquisition synergies. 50% > Group EBITDA $280m and EBIT $238m, Partial Achievement both below target. > Net-free cash flow held at FY22 levels. > Net Debt at $249m during the year, after $15m share Buyback. Audience & Content > Continue to implement ‘Audience First 20% > Continued development of REDiQ. > 7plus achieved registration growth Partial Achievement Content’ approach. > Deliver greater year-round profitable audience strength and consistency, and competitive ratings in tentpole strategy. > Maintain audience share for 7plus. > WAN digital audience metrics at or above target. People, Operations & Compliance > Achieve value-enhancing outcomes from relevant regulatory reviews. > Refresh risk management framework and approach. > Effective management and reporting of all risk and compliance matters. > Improve the safety of our workplace. > Drive high performing culture and engagement. Total with 13.5m registered users. > #1 National, metropolitan and regional news. > Seven sporting properties remain market leading with #1 Audience outcomes. 10% > Delivered strong regulatory outcomes. > Launched Sustainability Report and Achievement carbon reduction ambitions as part of the FY23 Annual Report. > Risk appetite process completed and embedded. > Ongoing improvement in safety performance. 100% Partial Achievement Despite the achievement of certain metrics within the scorecard noted above, as the Group EBIT result is below the 90% target, the EBIT gateway did not open resulting in the non-vesting of the FY23 STI plan noted in Section 7.3 as follows: FY23 Deferred STI $ 1,012,500 312,500 243,750 131,250 275,000 Number of performance rights 2,715,933 838,251 653,835 352,065 737,660 STI Awarded (as % of Target) STI Paid as Cash $ 0% 0% 0% 0% 0% – – – – – Deferred STI Rights which will lapse % 100% 100% 100% 100% 100% Name J Warburton KJ Burnette J Howard KA McGrath1 BI McWilliam 1 K A McGrath ended employment on 30 November 2022 and forfeited her FY23 STI entitlement. 8.2 Prior year LTI Outcomes during FY23 The table below shows the vesting outcome for the FY21 LTI grant to Executive KMP that reached the completion of the performance period at 30 June 2023. Following testing in August 2023, these rights will convert to restricted shares. Performance Measure Performance Start Date Test Date Outcome % Vested % Lapsed ATSR CAGR (100% of Award) 1 July 2020 30 June 2023 ATSR CAGR of 54%, which exceeded the upper end of the 25% hurdle for 100% vesting. 100% 0% Please refer to the 2021 Remuneration Report for details on the performance hurdles under the 2021 LTI Plan. 62 Remuneration Report Seven West Media Limited Annual Report 2023d e t a e R l - e c n a m r o f r e P n % o i t a r e n u m e R l $ a t o T e c n a d r o c c a n i e c n a m r o f r e P n o i t a n m r e T i e c i v r e S g n o L n o i t a u n n a y r a t e n o M & I T S h s a C d e x i F - r e p u S - n o N s t i f e n e B t n e m y o p m E - t s o P l s t i f e n e B m r e T - t r o h S l l d e t a u c a c , e b a t g n w o l i l l o f e h t n i t u o t e s e r a 3 2 0 2 e n u J 0 3 d e d n e r a e y e h t r o f P M K e v i t u c e x E d n a O E C d n a D M s ’ p u o r G e h t f o n o i t a r e n u m e r d e t i d u a e h t f o s l i a t e D . s t n e m e r i u q e r g n i t n u o c c a y r o t u t a t s h t i w l e n n o s r e P t n e m e g a n a M y e K r o f s e r u s o c s i D n o i t a r e n u m e R y r o t u t a t S l . 9 l ) s e r u s o c s i D y r o t u t a t S ( l i a t e D n i n o i t a r e n u m e R e v i t u c e x E 1 . 9 6 $ s t h g R i 5 $ e v a e L 4 $ s t i f e n e B 3 $ s t i f e n e B 2 $ s e v i t n e c n I 1 $ n o i t a r e n u m e R r a e Y l i a c n a n i F e m a N % 1 5 % 0 7 % 0 2 % 0 4 % 9 3 % 9 5 % 0 2 % 0 4 % 0 3 % 0 4 % 5 3 % 5 5 0 8 1 , 2 7 7 , 2 5 4 0 , 0 1 4 , 1 6 5 8 , 6 7 5 , 4 9 1 0 , 7 8 1 , 2 3 3 5 , 0 8 5 , 1 9 7 4 , 2 2 3 7 7 1 , 8 0 1 , 2 1 2 9 , 4 2 5 6 0 0 , 2 5 0 , 1 3 1 3 , 5 0 4 4 8 7 , 9 0 6 , 1 1 9 8 , 0 4 6 6 5 7 , 8 1 4 , 1 4 8 4 , 3 8 2 8 7 2 , 8 6 8 , 1 2 1 0 , 5 7 4 5 9 9 , 2 2 6 9 3 4 , 9 8 8 6 1 3 , 0 7 1 1 7 4 , 4 2 2 4 3 5 , 2 5 0 , 1 1 4 1 3 , 2 5 0 , 4 – 0 7 4 , 6 4 4 , 7 7 3 6 , 1 9 5 , 2 9 9 9 , 1 5 2 – 9 9 9 , 1 5 2 ) 7 5 8 , 3 4 ( $ – – – – – – – – s t i f e n e B 8 1 7 , 3 2 7 1 4 , 2 2 6 8 5 , 3 2 6 5 7 , 0 2 0 2 4 , 1 1 3 9 7 , 0 1 5 2 3 , 9 1 6 6 2 , 8 1 8 1 7 , 8 2 9 1 , 4 3 0 5 9 , 0 8 2 9 2 , 5 2 8 6 5 , 3 2 – 0 2 9 , 4 – 5 2 1 , 3 1 3 , 1 0 0 5 , 2 1 0 , 1 2 3 4 , 6 2 3 , 1 2 9 2 , 5 2 8 6 5 , 3 2 2 9 2 , 5 2 8 6 5 , 3 2 2 9 2 , 5 2 8 6 5 , 3 2 6 4 6 , 2 1 8 6 5 , 3 2 4 1 8 , 3 1 1 0 4 8 , 7 1 1 – – 0 5 8 – – – – – 0 5 8 0 2 9 , 4 5 6 7 – 6 7 1 , 9 0 2 , 1 0 0 5 , 2 1 3 2 3 4 , 6 2 2 , 1 – – 0 0 1 , 8 0 3 1 3 1 , 9 0 6 2 3 4 , 6 2 6 5 5 6 , 0 9 0 , 1 0 0 0 , 5 7 2 2 3 4 , 6 7 0 , 1 – – 0 5 2 , 1 3 1 1 9 8 , 1 3 2 2 3 4 , 1 0 5 8 7 9 , 3 5 4 , 4 0 5 3 , 9 3 0 , 2 0 6 1 , 7 5 7 , 4 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 3 2 0 2 2 2 0 2 r e c i f f O e v i i t u c e x E f e h C d n a r o t c e r i D g n g a n a M i r e c i f f O e u n e v e R i f e h C , e t t e n r u B J K r e c i f f O l i a c n a n i F f e h C i , d r a w o H J r o t c e r i D l i a c r e m m o C , m a i l l i W c M I B P M K e v i t u c e x E r e m r o F P M K e v i t u c e x E n o t r u b r a W J n o i t a r e n u m e R e v i t u c e x E l a t o T 7 r e c i f f O e r u t l u C d n a l e p o e P f e h C i , h t a r G c M A K . s t n a r G I T L d n a I T S o t n o i t a e r n l i p u o r G e h t y b d e s n e p x e s t h g R e c n a m r o f r e P f o e u a v l i r i a f e h t s t n e s e r p e R u e i l n i t n e m y a p e d u l c n i s t i f e n e b n o i t a n m r e T i . 2 2 0 2 r e b m e v o N 0 3 n o d e d n e t n e m y o p m e s ’ h t a r G c M A K l I T S 3 2 Y F r e h d e t i e f r o f h t a r G c M A K . n o i t a n m r e t n o p u w a i l y b s t i f e n e b r e h t o f o n o i s i v o r p d n a e c i t o n f o I T S 2 2 Y F s ’ h t a r G c M A K . e c n a u s s i t n e m e l t i t n e I T L 3 2 Y F e h t n i t n a p c i i t r a p a t o n s a w d n a t n e m e l t i t n e . s t n e m e l t i t n e e v a e l e c i v r e s g n o l s ’ e v i t u c e x E r o f l a u r c c a r a e y t n e r r u c e h t o t s e t a e R l e c u d e r y a m e u a v g n l i t n u o c c a e h T . s t n e m e l t i t n e e v a e l l a u n n a r o f l a u r c c a n a d n a ) ) T B F ( x a t s t i f e n e b e v a e l e h t n a h t e r o m g n i k a t f o t l u s e r a s a s e s a e r c e d e c n a a b e v a e l l l a u n n a s ’ e v i t u c e x E n a e r e h w . r a e y e c n a m r o f r e p e h t r o f d e d r a w a I T S h s a c s t n e s e r p e R . r a e y e h t g n i r u d d e u r c c a e g n i i r f d e t a c o s s a g n d u i l c n i ( s t i f e n e b d e c i f i r c a s - y r a a s l , y r a a s l f o t s o c l a t o t e h t s i n o i t a r e n u m e r d e x i F 1 e n i l n i d e t s e t e b o t t o o f n o n a m e r i s t n e m e l t i t n e I T L 2 2 Y F d n a 1 2 Y F d n a d e n a t e r e r e w s e r a h s d e t c i i r t s e r , T B F g n d u i l c n i ( p u o r G e h t o t t s o c e h t i f o s i s a b e h t n o d e n m r e t e d e r a s t i f e n e b y r a t e n o m - n o N l . n a p e h t f o n o i t a r e p o e h t h t i w l . ) e b a c i l p p a e r e h w l . s t i f e n e B e e y o p m E 9 1 1 B S A A h t i w l l t n e t s i s n o c d e t a u c a c n e e b e v a h s t i f e n e b n o i t a u n n a r e p u S 2 3 4 63 9.2 Key Management Personnel Equity Transactions and Holdings 9.2.1 Equity Incentive Plan Holdings Equity grants under the LTI Plan and the STI Plan are made in accordance with the Seven West Media Equity Incentive Plan Rules. FY23 LTI Grant and Prior Years’ LTI Grants This table details the vesting profiles of the Performance Rights granted as remuneration in FY23 to each Executive KMP of the Group under its LTI Plan, including prior years’ Performance Rights that remain unvested and on-foot, are provided below. The FY21 LTI plan reached the end of its performance period on 30 June 2023, however, will vest in August 2023. Name J Warburton KJ Burnette J Howard BI McWilliam J Warburton KJ Burnette J Howard K McGrath BI McWilliam J Warburton KJ Burnette J Howard K McGrath Number of Performance Rights Grant Date Fair Value Per Right at Grant Date Number of Rights that will vest Percentage of Rights Forfeited, Lapsed or Cancelled in FY23 Financial Year in which Grant may Vest 2,723,970 14–Dec–22 630,548 14–Dec–22 983,656 14–Dec–22 554,882 14–Dec–22 3,047,404 26–Nov–21 705,417 26–Nov–21 1,100,451 26–Nov–21 296,275 26–Nov–21 620,767 26–Nov–21 11,250,000 01–Dec–20 2,604,166 01–Dec–20 2,708,333 01–Dec–20 1,093,750 01–Dec–20 $0.230 $0.230 $0.230 $0.230 $0.405 $0.405 $0.405 $0.405 $0.405 $0.220 $0.220 $0.220 $0.220 $0.220 – – – – – – – – – 11,250,000 2,604,166 2,708,333 1,093,750 2,291,666 – – – – – – – – – 0% 0% 0% 0% 0% 2026 2026 2026 2026 2025 2025 2025 2025 2025 2024 2024 2024 2024 2024 BI McWilliam 2,291,666 01–Dec–20 With respect to the FY23 LTI grant, the maximum possible total value of the grant assuming all vesting conditions are met is calculated as the number of Performance Rights times the Grant date fair value. This maximum value, measured under applicable accounting standards, will be recognised as statutory remuneration on a straight-line basis equally over the period to potential vesting in FY26. If all vesting conditions are met, this will be received by each Executive in the year of vesting. The minimum possible total value is nil where the vesting conditions are not met. 9.2.2 Equity Holdings and Transactions of Executive Key Management Personnel The table below provides details of equity granted as remuneration and the number of ordinary shares in the Group held during the financial year by Executive KMP of the Group held directly, indirectly, beneficially and including their personally-related entities. Name Type of Equity- Based Instrument Number Held at Start of the Year Number Granted During the Year as Remuneration1 Number Received on Exercise and/ or Exercised During the Year Number Lapsed During the Year Number Held at End of the Year Number Vested and Exercisable at End of the Year Managing Director and Chief Executive Officer J Warburton Performance Rights 16,463,179 5,439,903 (2,165,775) (2,715,933) 17,021,374 Restricted Shares 11,250,000 2,165,775 (11,250,000) Ordinary Shares – 11,250,000 – – – 2,165,775 11,250,000 Executive KMP KJ Burnette Performance Rights 3,978,032 1,468,799 (668,449) (838,251) 3,940,131 Restricted Share 3,472,222 668,449 (3,472,222) Ordinary Shares 230,364 3,472,222 – – – 668,449 3,702,586 J Howard Performance Rights 4,467,822 1,637,491 (659,036) (653,835) 4,792,442 Restricted Share 1,805,555 659,036 (1,805,555) Ordinary Shares 195,630 1,805,555 – – – 659,036 2,001,185 – – – – – – – – – 64 Remuneration Report Seven West Media Limited Annual Report 2023 Name Type of Equity- Based Instrument Number Held at Start of the Year Number Granted During the Year as Remuneration1 Number Received on Exercise and/ or Exercised During the Year Number Lapsed During the Year Number Held at End of the Year Number Vested and Exercisable at End of the Year BI McWilliam Performance Rights 3,500,669 1,292,542 (588,235) (737,660) 3,467,316 Restricted Share 3,055,555 588,235 (3,055,555) Ordinary Shares 632,608 3,055,555 – – – 588,235 3,688,163 Former Executive KMP KA McGrath Performance Rights 1,670,773 352,065 (280,748) (352,065) 1,390,025 Restricted Share 1,458,333 280,748 (1,458,333) Ordinary Shares 242,470 1,458,333 – – – 280,748 1,700,803 – – – – – – 1 Includes both FY23 STI and FY23 LTI awards granted as Performance Rights. The balance of Performance Rights at the end of the year are unvested rights. The FY23 STI award has been noted as lapsed in the above table based on the assessment performed as noted in Section 8.1. 9.2.3 Minimum Shareholding Policy (MSP) A Minimum Shareholding Policy was introduced effective 1 July 2021, with Non-Executive Directors and Executive KMP given 5 years from the date of inception (or their appointment) to achieve the prescribed shareholding level. 30 June 2023 represents the second year of this five-year period. 9.2.4 Executive Key Management Personnel Notice Period The Managing Director and CEO and Other Executive KMP are on rolling contracts until notice of termination is given by either Seven West Media or the senior executive. The notice period for the Managing Director and CEO and other Executive KMP is six months (with the exception of Bruce McWilliam whose notice period is three months). Where the termination occurs as a result of misconduct or a serious or persistent breach of contract (termination for cause), Seven West Media may terminate employment immediately without notice, payment in lieu of notice or any other termination payment. In cases of termination for cause or resignation, all unvested performance rights may lapse. In other circumstances, unvested awards remain on-foot, subject to original performance hurdles, although the Board may determine that some or all of the awards should be forfeited. 10. Loans and Other Transactions with Key Management Personnel Transactions involving the Non-Executive Directors and Executive KMP and their related parties are conducted on normal commercial terms and conditions that are no more favourable than those given to other employees or customers. Any that are on-foot, are trivial or domestic in nature. There were no loans provided to KMP during FY23. 65 11. Non-Executive Directors (NEDs) Remuneration Framework Fees and payments to NEDs reflect the demands which are made on, and the responsibilities of, the NEDs. Our remuneration framework is designed to attract and retain experienced, qualified Directors and remunerate them appropriately for their time and expertise. The table below sets out the components of Non-Executive Director remuneration: > Base Fee – This fee is paid as cash and is for service as a Non-Executive Director of the Seven West Media Board. The base fee for the Chairman of the Board covers all responsibilities, including all Board Committees. > Committee Fees – These additional fees are also paid as cash to other Non-Executive Directors for chairing or participating in Board Committees. > Employer Superannuation Contributions – This component reflects statutory superannuation contributions which are capped at the superannuation maximum contributions base as prescribed under the Superannuation Guarantee legislation. For the 2023 Financial Year, the statutory increase was passed on for fees under the maximum contribution base. To maintain independence and impartiality, NEDs fees are not linked to the Group’s performance or short-term results. Likewise, NEDs are not eligible to participate in any of the Group’s performance-based remuneration arrangements. From 1 July 2022, NEDs can elect to salary sacrifice a portion of their fees to acquire shares in the Group. Any salary sacrificed amounts will be used to purchase restricted shares twice a year, shortly following the announcement of the Group’s half year and full year results in February and August respectively. On vesting, the Share Rights will convert into fully paid ordinary shares subject to a disposal restriction (a Restricted Share). 11.1 NEDs Director Fees The fees for the year to 30 June 2023 are provided in the table below: Annual Remuneration Board Audit and Risk Committee Remuneration and Nomination Committee Chairman Member 11.1.1 Fee Pool $335,000 $135,614 $40,182 $14,064 $20,091 $10,045 The aggregate of all payments each year to NEDs must be no more than the amount approved by shareholders at the Annual General Meeting (AGM). The current aggregate fee pool of $1.9 million, inclusive of employer superannuation contributions, was approved at the 2013 AGM held on 13 November 2013. For the year ended 30 June 2023, $1.331 million (70%) of this fee pool was used. 11.1.2 Changes to Board and Committee Composition At the 2022 AGM on 10 November 2022, JH Alexander retired from the Board and as Chairman of the Remuneration and Nomination Committee. As a result, from 10 November 2022, C Garnsey OAM was appointed as Chairman of the Remuneration and Nomination Committee and M Malone was appointed as a member of the Remuneration and Nomination Committee. 66 Remuneration Report Seven West Media Limited Annual Report 202311.2 NED Remuneration 11.2.1 Executive Remuneration in Detail (Statutory Disclosures) Details of the remuneration of the Group’s NEDs are as follows: Name NEDs KM Stokes AC, Chairman T Dyson D Evans C Garnsey OAM M Malone RK Stokes AO M Ziegelaar Former NEDs JH Alexander Total Non–Executive Director Fees Short-Term Benefits Post-Employment Benefits Financial Year Board Fees1 $ Non-Monetary Benefits $ Superannuation $ Total $ 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 2023 2022 309,708 311,432 159,091 159,091 144,545 144,545 137,085 131,818 140,711 135,455 145,000 145,000 135,455 135,455 53,654 140,909 1,225,249 1,303,705 – – – – – – – – – – – – – – – – – – 25,292 23,568 16,704 15,909 15,178 14,455 14,394 13,182 14,775 13,545 – – 14,222 13,545 5,634 14,091 335,000 335,000 175,795 175,000 159,723 159,000 151,479 145,000 155,486 149,000 145,000 145,000 149,677 149,000 59,288 155,000 106,199 1,331,448 108,295 1,412,000 1 Includes fees paid to the Chairman and members of Board Committees as well as salary sacrifice arrangements in respect of the NED plan. 11.2.2 Equity Holdings and Transaction of NEDs The number of ordinary shares in the Group held during the financial year by each NED held directly, indirectly, beneficially and including their personally related entities, and restricted shares acquired through the NED share plan, are as follows: Type of Equity-Based Instrument Number Held at Start of the Year Purchases / NED Plan Shares Sales Closing Balance Name NEDs KM Stokes AC T Dyson D Evans C Garnsey OAM RK Stokes AO M Ziegelaar Former NEDs JH Alexander M Malone Ordinary Shares 233,000 Ordinary Shares 621,453,734 Ordinary Shares Restricted Shares Ordinary Shares Ordinary Shares Restricted Shares 117,720 – 1,397,803 425,000 – Restricted Shares Ordinary Shares Ordinary Shares – 240,466 10,000 – – 42,303 – – 35,051 40,000 90,045 – – Restricted Shares – 36,018 Ordinary Shares 55,768 – – – – – – – – – – – – – 621,453,734 117,720 42,303 1,397,803 425,000 35,051 273,000 90,045 240,466 10,000 36,018 55,768 1 The balance for JH Alexander are as at 10 November 2022, the date of his resignation. 67 Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To the Directors of Seven West Media Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Seven West Media Limited for the financial year ended 30 June 2023 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Sydney 16 August 2023 Duncan McLennan Partner 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. 68 Financial Statements Seven West Media Limited Annual Report 2023 Financial Statements For the year ended 30 June 2023 Table of Contents Financial Statements Consolidated Statement of Profit or Loss and Other Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report ASX Information Investor Information Shareholder Information Company Information Notes Index 70 71 72 73 74 117 118 123 124 126 1. Introduction and basis 4. Other Key Balance Sheet Items 7. Group Structure of preparation 1.1 Basis of Preparation 4.1 Intangible Assets 7.1 Equity Accounted Investees 4.2 Property, Plant and Equipment 7.2 Investments in Controlled 1.2 Changes in Accounting Policies and Disclosures 4.3 Leases 4.4 Provisions 2. Group Performance 4.5 Other Financial Assets 2.1 Segment Information 2.2 Revenue and Other Income 2.3 Expenses 2.4 Significant Items 2.5 Earnings Per Share 3. Working Capital 3.1 Cash and Cash Equivalents 3.2 Trade and Other Receivables 3.3 Program Rights and Inventories 3.4 Trade and Other Payables 3.5 Deferred Income 3.6 Commitments 5. Taxation 5.1 Taxes 5.2 Deferred Tax Assets and Liabilities 6. Capital Management 6.1 Borrowings 6.2 Share Capital 6.3 Dividends 6.4 Share-Based Payments 6.5 Capital and Financial Risk Management Entities 7.3 Parent Entity Financial Information 7.4 Related Party Transactions 8. Other 8.1 Remuneration of Auditor 8.2 Contingent Liabilities 8.3 Events Occurring After the Reporting Date 8.4 Summary of Other Significant Accounting Policies 69 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the year ended 30 June 2023 Revenue Other income Revenue and other income Expenses Net income related to investments Net gain on assets disposed Major IT Project implementation costs Net gain on disposal of subsidiaries Reversal of onerous provisioning Share of net profit of equity accounted investees Profit before net finance costs and tax Finance income Finance costs Write off of unamortised original refinancing cost Profit before tax Tax expense Profit for the year Other comprehensive income (expense) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations Tax in relation to employee share plans Items that will not be reclassified to profit or loss: Net change in fair value of financial assets (net of tax) Other comprehensive expense for the year, net of tax Total comprehensive income for the year Total comprehensive income attributable to: Owners of the Company Non-controlling interests Total comprehensive income for the year Notes 2.2 2.2 2.3 2.4 2.4 2.4 2.4 2.4 7.1 2.4 5.1 2023 $’000 2022 $’000 1,487,256 1,538,537 168 1,092 1,487,424 1,539,629 (1,249,598) (1,230,954) 12,456 2,040 (21,511) - - 440 231,251 3,225 (38,435) - 196,041 (50,294) 145,747 (597) 78 (9,545) (10,064) 135,683 3,728 - - 2,590 8,351 318 323,662 1,385 (36,841) (4,815) 283,391 (72,339) 211,052 503 - (20,940) (20,437) 190,615 135,683 190,602 - 13 135,683 190,615 2.5 2.5 9.4 cents 9.2 cents 13.3 cents 13.0 cents Earnings per share for profit attributable to the ordinary equity holders of the Company Basic earnings per share Diluted earnings per share The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes. 70 Financial Statements Seven West Media Limited Annual Report 2023Consolidated Statement of Financial Position As at 30 June 2023 ASSETS Current assets Cash and cash equivalents Trade and other receivables Current tax receivable Program rights and inventories Other assets Total current assets Non-current assets Equity accounted investees Other financial assets Property, plant and equipment Intangible assets Right of use assets Other assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Lease liabilities Provisions Deferred income Current tax liabilities Total current liabilities Non-current liabilities Trade and other payables Lease liabilities Provisions Deferred tax liabilities Borrowings Total non-current liabilities Total liabilities Net assets EQUITY Share capital Reserves Accumulated deficit Total equity Notes 2023 $’000 2022 $’000 3.1 3.2 3.3 7.1 4.5 4.2 4.1 4.3 3.4 4.3 4.4 3.5 3.4 4.3 4.4 5.2 6.1 57,402 230,147 18,574 176,915 20,378 503,416 16,694 79,441 123,215 714,801 62,846 398 997,395 37,938 220,123 - 147,212 19,571 424,844 16,153 39,571 113,829 720,277 68,101 1,561 959,492 1,500,811 1,384,336 206,226 13,488 104,986 62,547 - 387,247 4,019 177,505 50,588 195,788 306,834 734,734 1,121,981 378,830 176,824 12,141 105,249 49,030 63,230 406,474 3,665 186,239 84,578 145,260 294,429 714,171 1,120,645 263,691 6.2 3,417,968 3,432,966 (25,579) (35,537) (3,013,559) (3,133,738) 378,830 263,691 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. 71 Consolidated Statement of Changes in Equity For the year ended 30 June 2023 Equity comp- ensation reserve $’000 Reserve for own shares $’000 Share capital $’000 Foreign currency trans- lation reserve $’000 Notes Fair value reserve $’000 Accumu- lated deficit $’000 Total $’000 Non- controll- ing Interests $’000 Total Equity $’000 Balance at 26 June 2021 3,405,666 10,649 (597) (57) 12,771 (3,345,172) 83,260 1,075 84,335 Profit for the year Foreign currency translation differences Net change in fair value of financial assets (net of tax) Other comprehensive income (expense) for the year, net of tax Total comprehensive income (expense) for the year - - - - - - - - - - Transactions with owners in their capacity as owners Share based payment expense - 6,758 - - - - - - Shares issued pursuant to executive employee share plan Shares purchased pursuant to executive employee share plan Transactions with non-controlling interests Disposal of NCI 27,300 - (27,300) - - - - (17,324) - - - - Total transactions with owners 27,300 6,758 (44,624) - 503 - - 211,039 211,039 13 211,052 - 503 - 503 - (20,940) - (20,940) - (20,940) 503 (20,940) - (20,437) - (20,437) 503 (20,940) 211,039 190,602 13 190,615 - - - - - - - - - - - - - - 6,758 - - - 6,758 - - (17,324) - (17,324) 395 395 (395) - - - (693) (693) 395 (10,171) (1,088) (11,259) Balance at 25 June 2022 3,432,966 17,407 (45,221) 446 (8,169) (3,133,738) 263,691 - 263,691 Effect of adoption of accounting standard change 1.2.3 - - - - - (6,588) (6,588) - (6,588) Adjusted opening balance at 25 June 2022 3,432,966 17,407 (45,221) 446 (8,169) (3,140,326) 257,103 - 257,103 Profit for the year Foreign currency translation differences Tax in relation to employee share plans Net change in fair value of financial assets (net of tax) Other comprehensive income (expense) for the year, net of tax Total comprehensive income (expense) for the year Transactions with owners in their capacity as owners Share based payment expense Shares purchased pursuant to executive employee share plan Shares issued pursuant to vesting of executive employee share plan - - - - - - - - - - - 78 - 78 78 2,969 - - - - - - - - (1,927) - 26,771 Shares bought back and cancelled (14,998) - Transfers within equity - (7,791) - - Total transactions with owners (14,998) (4,822) 24,844 - (597) - - - - - 145,747 145,747 - 145,747 - - (597) 78 - - (597) 78 (9,545) - (9,545) - (9,545) (597) (9,545) - (10,064) - (10,064) (597) (9,545) 145,747 135,683 - 135,683 - - - - - - - - - - - - - 2,969 - 2,969 - (1,927) - (1,927) (26,771) - - (14,998) 7,791 - - - - - (14,998) - (18,980) (13,956) - (13,956) Balance at 30 June 2023 3,417,968 12,663 (20,377) (151) (17,714) (3,013,559) 378,830 - 378,830 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 72 Financial Statements Seven West Media Limited Annual Report 2023Consolidated Statement of Cash Flows For the year ended 30 June 2023 Notes 2023 $’000 2022 $’000 3.1 Cash flows related to operating activities Receipts from customers Payments to suppliers and employees Dividends received from other investments Interest and other items of similar nature received Interest and other costs of finance paid Interest paid on lease liability Income taxes paid, net of tax refunds Net operating cash flows Cash flows related to investing activities Payments for purchases of property, plant and equipment Payments for intangibles Proceeds from sale of other assets Payments for other financial assets (net of capital return) Payment for investment net of cash acquired Payments for equity accounted investees Proceeds from sale of investments Proceeds on sale of subsidiaries (net of cash disposed) Receipt of previously impaired loans from investees Loans paid to investees Net investing cash flows Cash flows related to financing activities Payment for share buy back Payments made for own shares Proceeds from borrowings Repayment of borrowings Payment of refinancing costs Payment of lease liabilities Net financing cash flows Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at the beginning of the year Cash and cash equivalents at the end of the year 3.1 The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 1,611,116 1,710,728 (1,416,048) (1,502,707) - 1,880 (17,623) (16,298) (85,595) 77,432 (35,626) (3,878) 7,429 - 15,287 688 (19,464) (16,714) (27,586) 160,232 (24,911) (2,465) 218 (11,141) (8,005) (100,874) (100) 1,183 - - (450) - - (1,758) 162 (400) (39,447) (141,169) (14,998) (1,925) 200,000 - (17,324) 516,000 (190,000) (716,000) - (11,598) (18,521) 19,464 37,938 57,402 (7,124) (10,009) (234,457) (215,394) 253,332 37,938 73 Section 1: Introduction and basis of preparation Seven West Media (SWM) is a for-profit company limited by shares and incorporated in Australia whose shares are publicly traded on the Australian Securities Exchange. The financial statements are for the Group consisting of Seven West Media Limited (the “Company” or “Parent Entity”) and its subsidiaries, all of which are for-profit entities. 1.1 Basis of Preparation The consolidated general purpose financial report has been prepared in accordance with the requirements of the Corporations Act 2001 and the Australian Accounting Standards and other authoritative pronouncements of The Australian Accounting Standards Board and International Financial Reporting Standards (IFRS). This financial report is for the period 26 June 2022 to 30 June 2023, with the comparative period 27 June 2021 to 25 June 2022. All new and amended Accounting Standards and Interpretations issued by the AASB that are relevant to the Group and effective for the current reporting period have been adopted. The consolidated financial statements were authorised for issue by the Board of Directors on 16 August 2023. The financial statements have been prepared using the historical cost basis except for assets described in Note 6.5B. The financial statements are presented in Australian dollars (AUD) and all values are rounded to the nearest $1,000 unless otherwise stated under the option available to the Company under Australian Securities and Investments Commission (ASIC) Corporations Instrument 2016/191. The Group presents reclassified comparative information where required for consistency with the current year’s presentation. 1.2 Changes in Accounting Policies and Disclosures 1.2.1 New and amended standards and interpretations issued but not yet effective The Group has not early adopted any standards, interpretations or amendments that have been issued but are not yet effective. 1.2.2 Tentative agenda decisions that if issued will impact the Group in the current and prior period There are no tentative agenda decisions issued at year end that are expected to have a material impact on the Group in the current and prior period. 1.2.3 New and amended standards and interpretations The following accounting standards and interpretations have been issued and are effective for the Group for the first time in the current period. AASB 2020-3 Amendments to AASB 137 Onerous Contracts - Cost of Fulfilling a Contract AASB 137 defines an Onerous Contract as a contact in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. The unavoidable costs under a contract reflect the least net cost of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it. The amendments to AASB 137 clarifies that the direct costs of fulfilling a contract include both the incremental costs of fulfilling the contract and an allocation of other costs directly related to fulfilling contracts. Before recognising a separate provision for an onerous contract, the entity recognises any impairment loss that has occurred on assets used in fulfilling the contract. The Group has assessed the impact of these adjustments and has recognised an opening balance sheet adjustment of $6,588 thousand to increase the onerous provision, with a corresponding change in opening retained earnings. 74 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 2023Section 2: Group Performance 2.1 Segment Information 2.1A Description of Segments Accounting policy For management purposes, the Group is organised into business segments based on its products and services and has three reportable segments, as follows: Reportable segment Description of Activities Television The West Other Business and New Ventures Production and operation of commercial television programming and stations as well as distribution of programming content across platforms in Australia and around the world. The results of Prime Media Group have been included in the Television segment since acquisition. Publishers of newspapers and insert magazines in Western Australia; Colourpress; Digital publishing, West Australian Publishers and Community Newspaper Group. Made up of equity accounted investees and other ventures investments. The chief operating decision makers, responsible for allocating resources and assessing performance of the operating segments, have been identified as the Chief Executive Officer, the Chief Financial Officer, Business Segment Chief Executive Officers and other relevant members of the executive team. Segment performance is evaluated based on a measure of profit / (loss) before significant items, net finance costs and tax. Revenue from external sales is predominantly to customers in Australia and total segment assets are predominantly held in Australia. Total assets and liabilities by segment are not provided regularly to the chief operating decision makers and as such, are not required to be disclosed. 2.1B Segment information Year ended 30 June 2023 REF Advertising revenue Circulation revenue Licencing of content and programming Affiliate fees Rendering of services Other revenue Television $’000 1,210,926 - 67,697 15,644 - 21,163 The West $’000 88,378 53,603 9,670 - 11,176 7,921 Revenue from continuing operations 1,315,430 170,748 15 440 38 - Other Business and New Ventures $’000 Corporate [B] $’000 - - - - - 1,078 1,078 115 - - - - - - - - - - Total $’000 1,299,304 53,603 77,367 15,644 11,176 30,162 1,487,256 168 440 1,315,885 170,786 (1,051,179) (139,509) 1,193 (1,088) - 1,487,864 (16,343) (1,208,119) Other income Share of net profit of equity accounted investees Revenue, other income and share of net profit of equity accounted investees Expenses Profit (loss) before significant items, net finance costs, tax, depreciation and amortisation Depreciation and amortisation [A] (39,250) 264,706 31,277 (1,782) 105 (433) (16,343) 279,745 (14) (41,479) Profit (loss) before significant items, net finance costs and tax 225,456 29,495 (328) (16,357) 238,266 75 Notes to the Financial Statements for the year ended 30 June 20232.1 Segment Information (continued) Year ended 25 June 2022 REF Advertising revenue Circulation revenue Licencing of content and programming Affiliate fees Rendering of services Other revenue Television $’000 1,212,189 - 73,143 65,164 - 17,367 The West $’000 90,449 54,213 13,022 - 9,337 2,301 Revenue from continuing operations 1,367,863 169,322 - - - - Other Business and New Ventures $’000 Corporate [B] $’000 - - - - - 1,352 1,352 1,092 318 - - - - - - - - - Total $’000 1,302,638 54,213 86,165 65,164 9,337 21,020 1,538,537 1,092 318 Other income Share of net profit of equity accounted investees Revenue, other income and share of net profit of equity accounted investees Expenses Profit (loss) before significant items, net finance costs, tax, depreciation and amortisation Depreciation and amortisation [A] Profit (loss) before significant items, net finance costs and tax 1,367,863 169,322 (1,039,837) (135,605) 2,762 (1,282) - 1,539,947 (21,033) (1,197,757) 328,026 (32,261) 33,717 (491) 1,480 (433) (21,033) (12) 342,190 (33,197) 295,765 33,226 1,047 (21,045) 308,993 [A] Excludes program rights amortisation which is included in media content expenses (refer Note 2.3). [B] Corporate is not an operating segment. The amounts presented are unallocated costs. 2.1C Other segment information The chief operating decision makers assess the performance of the operating segments based on a measure of earnings before net finance costs and tax. This measurement basis excludes the effects of significant items from the operating segments. Reconciliation of profit before significant items, net finance costs and tax to statutory profit before tax Profit before significant items, net finance costs and tax 238,266 308,993 2023 $’000 2022 $’000 Finance income Finance costs Profit before tax excluding significant items Significant items before tax (refer Note 2.4) Profit before tax 3,225 (38,435) 203,056 (7,015) 196,041 1,385 (36,841) 273,537 9,854 283,391 76 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20232.2 Revenue and Other Income Accounting policy Revenue recognition and measurement The Group derives revenue from the transfer of goods and services. Revenue recognition is based on the delivery of performance obligations and an assessment of when control is transferred to the customer. Revenue is recognised either when the performance obligation in the contract has been performed (‘point in time’ recognition) or ‘over time’ as control of the performance obligation is transferred to the customer. Customer contracts can have a wide variety of performance obligations, from production contracts to format licences and distribution activities. For these contracts, each performance obligation is identified and evaluated. The Group needs to evaluate if a distribution right is a right to access the content (revenue recognised over time) or represents a right to use the content (revenue recognised at a point in time). The Group has determined that most distribution revenues are satisfied at a point in time due to their being limited ongoing involvement by the Group in the use of the rights following its transfer to the customer. The transaction price, being the amount to which the Group expects to be entitled and has rights to under the contract is allocated to the identified performance obligations. The transaction price will also include an estimate of any variable consideration where the Group’s actual performance may impact the revenue to be recognised based on the achievement of agreed targets with the customer such as audience targets. Variable consideration is not recognised until the performance obligations are met. Revenue is stated exclusive of GST and equivalent sales taxes. Revenue recognition criteria for the Group’s key classes of revenue are as follows: Class of revenue Recognition criteria [A] Advertising > Television Advertising is generated from selling spot airtime and is recognised at the point of transmission. > Newspapers Advertising is generated from selling space in the newspaper and is recognised at the point of publication. [B] Circulation > Circulation revenue is generated through the distribution and sale of newspapers to third party consumers. Recognised on delivery of the newspaper to the customer and the right to be compensated has been obtained. [C] Licencing of content and programming includes: (i) Programme production > Revenue generated from the programmes produced for broadcasters in Australia and internationally and is recognised at the point of delivery of an episode and acceptance by the customer. (ii) Distribution rights > A licence is granted for the transmission of a programme in a stated territory, media and period and revenue is recognised at the point when the contract is signed, the content is available for download and the licence period has started. Timing of recognition At the point in time when the advertisement is broadcast or published At the time the newspapers are distributed At the point in time when obligations have been accepted by the customers Recognised on delivery of rights to the customer [D] Affiliate fees > Affiliate fees earned through the transmission of network channels in a stated territory. Recognised in the period of the broadcast feed to the affiliates in line with the contract terms and conditions. Recognised over time as conditions are met over the contract life [E] Rendering of services > The revenue is recognised when the service has been performed. These services mainly relate to printing and are generally delivered over a period of time. [F] Other revenue includes: (i) Rental income > Rental income is derived through the leasing of assets and the benefits are to be transferred over time. (ii) Dividends > Dividend revenue is recognised when the right to receive payment is established. At the point in time the services are delivered Revenue is recognised over the life of the lease At the point in time the dividend is declared 77 Notes to the Financial Statements for the year ended 30 June 2023 2.2 Revenue and Other Income (continued) Sales revenue Advertising revenue Circulation revenue Licencing of content and programming Affiliate fees Rendering of services Other revenue Total sales revenue Other income Dividends received Sundry income Net gain on disposal of property, plant and equipment and investments Total other income Timing of Revenue Recognition REF [A] [B] [C] [D] [E] [F] 2023 $’000 2022 $’000 1,299,304 1,302,638 53,603 77,367 15,644 11,176 30,162 54,213 86,165 65,164 9,337 21,020 1,487,256 1,538,537 - 101 67 168 1,092 - - 1,092 The following table includes revenue from contracts per above that have been disaggregated by the timing of recognition: Products or services transferred at a point in time Products or services transferred over time Total External Revenue 2023 $’000 2022 $’000 1,471,612 1,473,373 15,644 65,164 1,487,256 1,538,537 78 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20232.3 Expenses Profit before tax includes the following specific expenses: Depreciation and amortisation (excluding program rights amortisation) Advertising and marketing expenses Printing, selling and distribution (including newsprint and paper) Media content (including program rights amortisation) Employee benefits expense (excluding significant items) Raw materials and consumables used (excluding newsprint and paper) Repairs and maintenance Licence fees Rental expense relating to operating leases Other expenses from ordinary activities Total expenses REF [A] [A] [B] [B] Included in the expenses above are the specific items [A] to [B] from continuing operations: [A] Depreciation of property, plant and equipment Depreciation of right of use assets Amortisation of intangible assets Total depreciation and amortisation Television program rights amortisation Total depreciation and amortisation (including program rights amortisation) Employee benefits expenses incurred in the production of content are recognised in media content category. The below disclosure includes these amounts as well as the separately recognised employee benefits expense: 2023 $’000 (41,479) (29,102) (31,364) 2022 $’000 (33,197) (22,677) (26,641) (610,607) (637,436) (329,872) (320,644) (5,455) (35,311) (30,819) (3,021) (5,400) (32,778) (26,159) (1,849) (132,568) (124,173) (1,249,598) (1,230,954) (19,939) (8,958) (12,582) (41,479) (98,033) (139,512) (14,507) (8,781) (9,909) (33,197) (100,375) (133,572) [B] Employee benefits expense Defined contribution superannuation expense Total employee benefits expense (382,869) (30,741) (370,632)1 (26,619)1 (413,610) (397,251)1 1 These amounts have been restated for the revised basis of the disclosure in the current year. 79 Notes to the Financial Statements for the year ended 30 June 20232.4 Significant Items Profit before tax expense includes the following specific (expenses) benefits for which disclosure is relevant in explaining the financial performance of the Group: Net income related to investments Net gain on assets disposed Major IT Project implementation costs Net gain on disposal of subsidiaries Reversal of onerous provisioning Write off of unamortised original refinancing cost Total significant items before tax Tax benefit Net significant items after tax REF [A] [B] [C] [D] [E] [F] 2023 $’000 12,456 2,040 (21,511) - - - (7,015) 6,453 (562) 2022 $’000 3,728 - - 2,590 8,351 (4,815) 9,854 439 10,293 [A] Net income from investments relates net fair value gains recognised on the Group’s other financial assets, being partially offset by costs incurred in the finalisation of the Prime Media group acquisition. Prior period amount relates to costs incurred for the Group’s acquisition of Prime Media Group. [B] During the year the Group sold its properties in Pyrmont and Mackay for total consideration of $7.4 million and recognised a gain on these sales of $2.0 million. [C] These costs relate to implementation and customisation costs of a new SaaS arrangement that significantly benefits the future operation of the group, however, is required to be expensed under changes to the accounting standards. [D] During the prior year, the Group disposed of its subsidiaries Great Southern Television (GSTV). [E] During the prior year, the Group recorded reversals to onerous provisions of $8.4 million as a result of changes to the onerous contract review procedures. [F] The amount relates to previously unamortised borrowing costs written off following the October 2021 refinance. 80 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20232.5 Earnings Per Share Accounting policy Basic earnings per share Basic earnings per share is calculated by dividing the net profit (loss) attributable to ordinary equity holders of the Company by the weighted average number of ordinary shares outstanding during the financial year. Diluted earnings per share Diluted earnings per share is calculated by adjusting the figures used in the determination of basic earnings per share to take into account the after tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares. Retrospective adjustments If the number of ordinary or potential ordinary shares outstanding increases as a result of a capitalisation, bonus issue or share split, or decreases as a result of a reverse share split, the calculation of basic and diluted earnings per share for all periods presented shall be adjusted retrospectively. In addition, basic and diluted earnings per share of all periods presented shall be adjusted for the effects of errors and adjustments resulting from changes in accounting policies, accounted for retrospectively. Basic earnings per share Profit attributable to the ordinary equity holders of the Company 9.4 cents 13.3 cents Diluted earnings per share Profit attributable to the ordinary equity holders of the Company 9.2 cents 13.0 cents 2023 2022 Earnings used in calculating earnings per share Profit attributable to the ordinary equity holders of the Company used in calculating basic and diluted earnings per share. Weighted average number of shares used as the denominator Weighted average number of ordinary shares outstanding during the half year used in the calculation of basic earnings per share Weighted average number of ordinary shares outstanding during the year used in the calculation of diluted earnings per share 2023 $’000 2022 $’000 145,747 211,039 2023 Number 2022 Number 1,549,219,761 1,584,458,865 1,580,741,417 1,623,799,141 81 Notes to the Financial Statements for the year ended 30 June 2023Section 3: Working Capital 3.1 Cash and Cash Equivalents Accounting policy Cash and cash equivalents in the statement of financial position and statement of cash flows includes cash on hand and deposits held at call or with maturities of three months or less with financial institutions. Cash at bank and on hand 2023 $’000 57,402 2022 $’000 37,938 Cash at bank earns interest at floating rates based on daily bank deposit rates. The maximum exposure to credit risk at the reporting date is the carrying amount. The exposure to interest rate risk is disclosed in Note 6.5. Reconciliation of operating profit after tax to net cash provided by operating activities Profit for the year from continuing operations: Non-cash items: Depreciation and amortisation of property, plant and equipment and intangible assets Amortisation of right of use assets Amortisation of television program rights Share based payment expense Dividend received from equity accounted investees less share of profit of equity accounted investees Movement in unamortised finance costs Net gain on fair value of investments Onerous contract costs Other non-cash items Changes in operating assets and liabilities, net of effect from acquisitions: (Increase) decrease in: Trade and other receivables Program rights Other assets Increase (decrease) in: Trade and other payables Program liabilities Provisions Other liabilities Tax balances Net cash inflow from operating activities 145,747 211,052 32,521 8,958 98,033 2,969 (440) 2,405 (12,945) (42,079) (13,357) (9,448) (127,736) 155 1,530 27,680 (712) (518) (35,331) 77,432 24,415 8,781 100,375 6,758 (318) 8,243 - (12,847) 7,963 28,143 (69,955) (1,294) (27,138) (61,737) (79,808) (26,040) 43,639 160,232 82 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20233.1 Cash and Cash Equivalents (continued) Significant non-cash transactions The Group engaged in the following significant non-cash investing and financing activities during the year: Non-cash investing (outflow) inflow Acquisition of other financial assets Conversion of Financial Assets for Ordinary Shares Acquisition of Ordinary Shares in exchange for Financial Asset Total non-cash investing outflow [A] The Group invested in financial assets and issued contra revenue to investees. 3.2 Trade and Other Receivables Accounting policy REF [A] 2023 $’000 (24,200) 12,421 (12,421) (24,200) 2022 $’000 (25,000) 5,000 (5,000) (25,000) Trade receivables Trade receivables are recognised initially at the value of the invoice sent to the customer and subsequently at the amounts considered recoverable. Trade receivables are generally settled within 30-90 days and are non-interest bearing. The Group provides goods and services to substantially all of its customers on credit terms. The collectability of trade receivables is reviewed on an ongoing basis. The Group has applied the expected credit loss model to determine the provision for doubtful debts. A provision for impairment of trade receivables is used when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of receivables. Debtors which are known to be uncollectable are written off by reducing the carrying amounts directly. The amount of the impairment loss of receivables is recognised in profit or loss in other expenses. Subsequent recoveries of amounts previously written off are credited against other expenses in profit or loss. Loans and other receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise when the Group provides money, goods or services directly to a third party. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classified as non-current assets. Loans and receivables are carried at estimated future cash flow and are reviewed for impairment on an annual basis. Current Trade receivables Provision for doubtful debts Provision for sales credits and returns Other receivables Total trade and other receivables Movements in the provision for doubtful debts are as follows: Balance at the beginning of the financial year Acquired on business combination Net movement in provision recognised during the year Amount utilised Balance at the end of the financial year 2023 $’000 2022 $’000 243,943 (3,947) (21,668) 218,328 11,819 230,147 6,285 - (2,131) (207) 3,947 233,760 (6,285) (21,711) 205,764 14,359 220,123 4,976 654 1,336 (681) 6,285 Refer to Note 6.5 regarding information on the Group’s exposure to credit and market risks, and impairment losses for trade and other receivables. Refer to Note 7.4 regarding receivables from related parties. 83 Notes to the Financial Statements for the year ended 30 June 20233.2 Trade and Other Receivables (continued) Key judgements, estimates and assumptions Impairment of receivables The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection rates and specific knowledge of the individual debtor’s financial position. Estimates are used in determining the level of receivables that will not be collected. These estimates include factors such as historical experience, the current state of the Australian economy and industry factors. 3.3 Program Rights and Inventories Accounting policy Program rights Program rights includes both purchased rights and produced programs. The Group’s amortisation policy requires the amortisation of purchased programs on a straight line basis over the expected useful life. Program rights are recognised at the earlier of when cash payments are made or from the commencement of the rights period of the contract. Television program rights are carried at the lower of cost less amortisation and net recoverable amount. Cost comprises acquisition of program rights and, for programs produced using the Group’s facilities, direct labour and materials and directly attributable fixed and variable overheads. The useful life of purchased programs is assessed at least annually. Produced programs are expensed when broadcast. Inventories Inventories, which includes newsprint, paper, finished goods, raw material and work in progress, are measured at the lower of acquisition cost, cost of manufacturing or net realisable value. The net realisable value is the estimated achievable selling price in the ordinary course of business less the estimated costs through to completion and the estimated necessary selling costs. Current Television program rights – cost less accumulated amortisation and impairment Newsprint and paper – at cost 2023 $’000 2022 $’000 164,575 12,340 176,915 140,392 6,820 147,212 Program rights and inventory expense Program rights and inventories recognised as an expense during the year ended 30 June 2023 amounted to $98,033,083 (June 2022: $100,375,022) and $20,961,725 (June 2022: $15,936,018) respectively. Key judgements, estimates and assumptions The Group recognises program rights which are available for use. These are capitalised and amortised over the useful life of the content. The assessment of the appropriate carrying value of these rights requires estimation by management of the forecast future cash flows which will be derived from that content. This estimate is based on a combination of market conditions and the value generated from the broadcast of comparable programs. 84 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20233.4 Trade and Other Payables Accounting policy Trade payables and accruals Trade and other payables represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30-60 days from the end of the month in which they are incurred and may be interest bearing. Television program liabilities Television program liabilities are recognised from the commencement of the rights period of the contract. Contract payments made prior to commencement of the rights period are included in television program rights and inventories as prepaid program rights and not included in program liabilities. Current Trade payables and accruals Television program liabilities Non-current Television program liabilities 3.5 Deferred Income Accounting policy 2023 $’000 2022 $’000 130,048 76,178 206,226 4,019 4,019 127,972 48,852 176,824 3,665 3,665 Deferred Income Deferred income represents the consideration received from customers in advance of transferring a good or service. Current Investment contra Unearned advertising revenue Program Sales Other 2023 $’000 41,889 13,849 3,839 2,970 62,547 20221 $’000 21,861 20,574 5,000 1,595 49,030 1 This presentation has been updated in the current year. 2022 amount relates to amounts previously classified as deferred income and contract liabilities. 85 Notes to the Financial Statements for the year ended 30 June 20233.6 Commitments Year ended 30 June 2023 Capital expenditure commitments Operating lease commitments Contracts for purchase of television programs and sporting broadcast rights Contracts for employee services Contracts for other services Year ended 25 June 2022 Capital expenditure commitments Operating lease commitments Contracts for purchase of television programs and sporting broadcast rights Contracts for employee services Contracts for other services < 1 year $’000 1–5 years $’000 > 5 Years $’000 1,277 6,803 - 22,043 - 1,865 Total $’000 1,277 30,711 429,510 1,583,936 994,536 3,007,982 74,568 53,994 32,159 63,214 - 1,936 106,727 119,144 566,152 1,701,352 998,337 3,265,841 1,140 7,212 - 22,989 307,065 486,187 52,997 37,978 20,047 60,571 406,392 589,794 - 5,944 - - 1,873 7,817 1,140 36,145 793,252 73,044 100,422 1,004,003 Types of Commitments Capital expenditure commitments Commitments for the acquisition of property, plant and equipment contracted for at the reporting date but not recognised as liabilities. Operating lease commitments Operating lease commitments relate to minimum lease payments on non-cancellable leases contracted for at the reporting date but not recognised as liabilities. These leases are low value and are not required to be accounted for under AASB16 Leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to profit and loss on a straight line basis over the period of the lease. Contracts for purchase of television programs and sporting broadcast rights Commitments for minimum payments in relation to non-cancellable purchase contracts of television programs and sporting broadcast rights at the reporting date but not recognised as liabilities. Contracts for employee services Commitments for minimum payments in relation to non-cancellable contracts for employee services at the reporting date but not recognised as liabilities. Contracts for other services Commitments for minimum payments in relation to non-cancellable contracts for other services at the reporting date but not recognised as liabilities. 86 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 2023Section 4: Other Key Balance Sheet Items 4.1 Intangible Assets Accounting policy Goodwill Goodwill acquired in a business combination is initially measured at cost. Cost is measured as the consideration and transaction cost of the business combination minus the net fair value of the acquired and identifiable assets, liabilities and contingent liabilities. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Refer to Note 4.1.1 for further details on assessment of carrying value. Intangible Assets Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Costs incurred for internally developed software and websites are capitalised and amortised over the estimated useful life of the software or website. Costs that relate to the design and ongoing maintenance of the internally developed software and websites are expensed as incurred. Software-as-a-Service (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. For SaaS arrangements, the Group assesses if the contract will provide a resource that it can ‘control’ to determine whether an intangible asset is present. If the Group cannot determine control of the software, the arrangement is deemed a service contract and any implementation costs including costs to configure or customise the cloud provider’s application software are recognised as operating expenses when incurred. Following initial recognition, intangible assets are carried at cost less amortisation and any impairment losses. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortised on a straight line basis over their useful life and tested for impairment whenever there is an indication that they may be impaired. Intangible assets with indefinite lives are tested for impairment annually. The amortisation period and method is reviewed at least annually. A summary of the policies applied to the Group’s intangible assets is as follows: Amortisation method used Internally generated or acquired Goodwill Useful life Indefinite No amortisation Television licences Indefinite No amortisation The West mastheads Indefinite No amortisation Radio licences Indefinite No amortisation Acquired Acquired Acquired Acquired Reacquired Rights Finite (1-2 years) Amortised on a straight line basis over its useful life Acquired Customer Relationships Finite (2-9 years) Amortised on a straight line basis over its useful life Acquired Computer software Finite (3 - 15 years) Amortised on a straight line basis over its useful life Internally developed and acquired 87 Notes to the Financial Statements for the year ended 30 June 20234.1 Intangible Assets (continued) Licences $’000 Mastheads $’000 REF Computer software $’000 Goodwill $’000 Re-acquired Rights and Customer relationships $’000 Total $’000 Year ended 30 June 2023 Opening net book amount Finalisation of business combinations [A] Additions Amortisation charge 670,277 - - - Closing net book amount 670,277 - - - - - 8,163 27,398 14,439 720,277 (39) 2,856 3,878 (4,255) - - 411 - 3,228 3,878 (8,327) (12,582) 7,747 30,254 6,523 714,801 Comprised of: Cost Accumulated amortisation and impairment Year ended 25 June 2022 Opening net book amount Additions Additions through business combinations [A] Disposals Amortisation charge 2,300,000 119,555 72,604 1,266,337 19,725 3,778,221 (1,629,723) (119,555) (64,857) (1,236,083) (13,202) (3,063,420) 670,277 - - - - - - - - - - 10,003 2,470 946 (222) (5,034) - - - - 680,280 2,470 27,398 19,314 47,658 - - - (222) (4,875) (9,909) 8,163 27,398 14,439 720,277 Closing net book amount 670,277 Comprised of: Cost Accumulated amortisation and impairment 2,300,000 119,555 99,185 1,263,481 19,314 3,801,535 (1,629,723) (119,555) (91,022) (1,236,083) (4,875) (3,081,258) [A] During the year ended 25 June 2022, the Group recognised intangible asset additions as part of the acquisition of the assets of Prime Media Group, which was provisionally accounted for at that date. During the year ended 30 June 2023, the Group has finalised its acquisition accounting which has resulted in changes to the provisional intangible amounts recognised as detailed above, as well as a $982,000 decrease in property, plant and equipment and a net increase of $2,246,000 in the acquisition date deferred tax liability recognised. 88 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 2023 4.1 Intangible Assets (continued) 4.1.1 Impairment of non-financial assets Accounting policy Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. 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). Other assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less cost to sell and its value in use. In calculating the recoverable value, the cash flows include projections of cash inflows and outflows from continuing use of the CGU’s assets. For value-in-use models, the cash flows are estimated for the assets of the CGU in their current condition and discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the risks specific to the CGU. For fair value less cost to sell models, the recoverable amount is defined as the price that would be received from selling the asset less any costs required and needed to make the sale. Non-financial assets other than goodwill that have been impaired previously are reviewed for possible reversal of the impairment at each reporting date. Impairment reversals are recognised to the extent of any previous revaluation with any excess recognised in the profit and loss. Key judgements, estimates and assumptions Goodwill and intangible assets with indefinite useful lives are tested annually to determine if they have been impaired in accordance with the Group accounting policy. The recoverable amounts of cash-generating units have been determined based on value-in-use approach. These calculations require the use of estimates and assumptions. Refer to 4.1.1B for details on assumptions used. 4.1.1A Allocation of goodwill and indefinite life assets For the purpose of impairment testing, intangible assets with indefinite lives, including goodwill, are allocated to the Group’s operating segments which represent the lowest level within the Group at which the assets are monitored for internal management purposes. The table below outlines the allocation of goodwill and indefinite life assets: Allocation of CGU Groups Year ended 30 June 2023 Television The West (Metro and Regional) Other Business and New Ventures Goodwill $’000 Licences, mastheads $’000 Total $’000 30,254 670,277 700,531 - - - - - - Total goodwill and indefinite life assets 30,254 670,277 700,531 Year ended 25 June 2022 Television The West (Metro and Regional) Other Business and New Ventures 27,398 670,277 697,675 - - - - - - Total goodwill and indefinite life assets 27,398 670,277 697,675 89 Notes to the Financial Statements for the year ended 30 June 20234.1 Intangible Assets (continued) 4.1.1B Impairment review of cash generating units (‘CGUs’) including goodwill and indefinite life assets In accordance with the Group’s accounting policies, the Group has evaluated whether the carrying amount of a CGU or group of CGUs exceeds its recoverable amount as at 30 June 2023. The Group has determined the CGUs to be Television and The West (Metro and Regional). Valuation Methods (i) Model The recoverable amount was determined using a value-in-use model by discounting the future cash flows expected to be generated from the continuing use of these CGUs. Key components of the recoverable value calculations and the basis for each CGU are detailed below: (ii) Cash flows Year 1 cash flows are based upon budgets for the next 12 months. Future cash flows are based on the following assumptions: Television – The forecast advertising market rates are assumed to be consistent with industry market participant expectations and long-term industry growth rates. The National TV market is expected to decline at low single digits and the BVOD market is forecast to grow at double digital growth over the medium term. – – The Group’s share of the advertising market across all platforms takes into account historical share performance, and consideration of the impact of programming across the schedule. Expenses are assumed to increase by CPI and known fixed increases for specific program rights. The West – Publishing revenue forecasts are management’s best estimates using: current market data, industry forecasts and historical actual rates, resulting in a mid single digital decline rate over the medium term. – Digital revenue assumptions are in line with industry forecasts and management’s expectations of market development resulting in mid single digital growth rate over the medium term. – Expenses are expected to increase by CPI, unless impacted by committed cost reduction initiatives and volume assumptions. (iii) Terminal growth factor A terminal growth factor that estimates the long term growth for that CGU is applied to the year 5 cash flows into perpetuity. These terminal growth rates do not exceed long term expected industry growth rates. The terminal growth factor for each CGU is detailed below. (iv) Discount rate The discount rate is an estimate of the pre-tax and post-tax rate that reflects current market assessment of the time value of money and the risks specific to the CGU. The terminal growth rate, pre-tax and post-tax discount rates applied to the CGU’s cash flow projections are detailed below: Terminal growth factor Discount rate (pre-tax) Discount rate (post-tax) Jun-23 Jun-22 Jun-23 Jun-22 Jun-23 Jun-22 Television The West - Metro The West - Regional 0.0% -0.5% -0.5% 0.0% -0.5% -0.5% 14.6% 15.7% 15.9% 14.4% 14.5% 14.2% 10.0% 11.5% 11.5% 9.7% 10.5% 10.5% Impact on recovable amount $m Key cashflow assumption Change Metro FTA market medium term growth rate1 +/- 1% +/- 193 Metro FTA market share in medium term +/- 1% +/- 125 BVOD market medium term growth rate1 +/- 4% +/- 169 BVOD market share in medium term +/- 1% +/- 60 1 Based on the model performed, the impact of these sensitivities have a compounding effect each year of the impairment model. 4.1.1C Impact of changes in key assumptions for the Television CGU The values assigned to the key assumptions represent management’s estimate of future performance in the Television CGU based on historical experience and internal and external sources. The estimated recoverable amount is sensitive to these key assumptions. Forecasting future cash flows is inherently judgmental given the evolution of the total television market and changes in viewer behaviour. The Group has performed sensitivity analysis to assess the impact of changes in key assumptions on the recoverable amounts of the Television CGU. The following table sets out the impact that changes in those assumptions have on recoverable value, holding all other assumptions constant. None of the scenarios results in an impairment to the Television CGU. 90 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20234.2 Property, Plant and Equipment Accounting policy Measurement of cost All property, plant and equipment is stated at historical cost less accumulated depreciation and provision of impairment. Historical cost includes expenditure that is directly attributable to the acquisition of the items. Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of any component accounted for as a separate asset is derecognised when replaced. All other repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. Depreciation Asset class Land Buildings Useful life Depreciation method used Indefinite Not depreciated 40 years Straight line basis Leasehold improvements Finite Shorter of the life of the lease of each property or the life of the asset Plant and equipment Printing presses and publishing equipment 15 years Other plant and equipment 3-10 years Straight line basis to allocate their cost, net of their residual values, over their estimated useful lives Straight line basis to allocate their cost, net of their residual values, over their estimated useful lives Impairment of assets The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with carrying amount and these are included in profit or loss. 91 Notes to the Financial Statements for the year ended 30 June 20234.2 Property, Plant and Equipment (continued) Year ended 30 June 2023 Opening net book value Finalisation of business combinations Additions Disposals Depreciation charge Change due to movement in FX rates Closing net book amount Comprised of: Cost Accumulated depreciation and impairment Year ended 25 June 2022 Opening net book value Additions Net additions through business combinations Disposals Depreciation charge Change due to movement in FX rates Closing net book amount Comprised of: Cost Accumulated depreciation and impairment Freehold land and buildings $’000 Leasehold improvements $’000 Plant and equipment $’000 REF Total $’000 [A] 28,868 32,302 52,659 113,829 (693) 42 (5,268) (1,378) - 17 12,216 (23) (306) 23,368 (34) (5,086) (13,475) - 6 (982) 35,626 (5,325) (19,939) 6 21,571 39,426 62,218 123,215 30,229 (8,658) 55,500 411,930 497,659 (16,074) (349,712) (374,444) 17,462 80 12,145 - (819) - 8,311 25,555 307 (5) 23,680 24,239 16,538 (13) 49,453 49,874 28,990 (18) (1,866) (11,822) (14,507) - 37 37 28,868 32,302 52,659 113,829 43,704 (14,836) 73,426 645,838 762,968 (41,124) (593,179) (649,139) [A] During the year, the Group disposed of its property interests in Pyrmont and Mackay. Refer further details in Note 2.4. Key judgements, estimates and assumptions The estimation of useful life, residual value and depreciation methods require some judgement and are reviewed at least annually. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the proceeds with carrying amount. These are included in the income statement. 92 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20234.3 Leases 4.3A Right of use assets The Group leases many assets including offices, equipment, transmission towers and satellites. The recognised right of use assets relate to the following types of assets: Building $’000 Plant & Equipment $’000 Comm- unications $’000 Year ended 30 June 2023 Opening net book amount Additions Disposals Depreciation Effects of movement in exchange rates Closing net book amount Year ended 25 June 2022 Opening net book amount Additions Additions through Business Combinations Disposals Depreciation charge Adjustment to cost Effects of movement in exchange rates Closing net book amount 63,442 2,554 (377) (6,976) 149 58,792 68,141 1,000 1,775 (87) (6,475) (951) 39 63,442 68 23 - (91) - - 220 - - - 4,591 1,358 (4) (1,891) - 4,054 3,728 3,015 - - (156) (2,150) - 4 68 - (2) Total $’000 68,101 3,935 (381) (8,958) 149 62,846 72,089 4,015 1,775 (87) (8,781) (951) 41 4,591 68,101 4.3B Lease liabilities The following tables show the discounted lease liabilities included in the Group statement of financial position and a maturity analysis of the contractual undiscounted lease payments: Lease liabilities Current Non-current Total lease liabilities Maturity analysis - contractual undiscounted lease payments Less than one year One to five years More than five years Total undiscounted lease payments 2023 $’000 2022 $’000 13,488 177,505 190,993 27,940 99,130 203,018 330,088 12,141 186,239 198,380 27,455 100,847 223,431 351,733 93 Notes to the Financial Statements for the year ended 30 June 2023 4.4 Provisions Accounting policy Provisions are: > Recognised when the Group has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resource will be required to settle the obligation and the amount can be estimated reliably. > Measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as interest expense. Provision Description and measurement of provision [A] Employee benefits Provision for employee benefits includes annual leave, long service leave and short term incentives. Short-term employee benefits Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled within 12 months after the end of the reporting period in which the employee renders the service. It is measured at the amounts expected to be paid when the liabilities are settled. Long-term employee benefits Liability for long service leave which is not expected to be settled within 12 months after the end of the period. It is measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on corporate bond rates with terms to maturity and currency that match, as closely as possible, the estimated future cash flows. Short term incentives and bonus plans A liability is recognised when there is an obligation to settle the liability and at least one of the following conditions is met: > there are formal terms in the plan for determining the amount of the benefit; or > past practice gives clear evidence of the amount of the obligation. [B] Redundancy and restructuring [C] Onerous Contracts Redundancy and restructuring provision is recognised when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. It is payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. Provision for onerous contracts represents contracts where, due to changes in market conditions, the expected benefit is lower than the cost for which the Group is currently committed under the terms of the contract. The minimum net obligation under the contract is provided for. The provision is calculated as the net of the estimated economic benefit and the estimate of the committed cost discounted to present values. [D] Make Good Provision Make good provision to restore the leased premises of its offices, studios and other premises to their original condition at the end of the respective lease terms. A provision has been recognised for the present value of the estimated expenditure required to remove any leasehold improvements. Employee Benefits [A] $’000 Redundancy & Restructuring [B] $’000 Onerous Contracts [C] $’000 Make Good Provision [D] $’000 Carrying amount at 25 June 2022 Amounts provided1 Amounts utilised Unwind of discount Balance as at 30 June 2023 Represented by: Current Non-current Balance as at 30 June 2023 70,631 28,715 (28,008) - 71,338 64,712 6,626 71,338 2,582 - (1,265) - 1,317 1,317 - 1,317 79,358 6,588 (42,079) 1,121 44,988 38,604 6,384 44,988 Total $’000 189,827 35,294 (71,497) 1,950 37,256 (9) (145) 829 37,931 155,574 353 37,578 37,931 104,986 50,588 155,574 1 Amounts provided during the year for Onerous Contracts relate to the effect of adoption of accounting standard change. Refer Note 1.2.3. 94 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 2023 4.4 Provisions (continued) Key judgements, estimates and assumptions For onerous provision, key assumptions made concerning future events are: > The economic benefits expected to be received under the contracts is based on the historical benefits received on similar television programming and sports rights, adjusted to reflect the Group’s expectation of future growth / decline rates for the advertising market; and > The costs of fulfilling the contract are estimated with reference to contractual rates and historical incremental costs of similar programming assumed to increase by CPI. 4.5 Other Financial Assets Accounting policy The Group classifies its investments in the following categories: financial assets at fair value through profit or loss (FVTPL) or financial assets at fair value through other comprehensive income (FVTOCI). The classification depends on the Group’s business model for managing the financial asset as well as its contractual cash flow characteristics. Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Movements in carrying amounts of other financial assets Carrying amount at the beginning of the period Return of capital Net change in fair value of financial assets at fair value Acquisitions Foreign Currency revaluation Carrying amount at the end of the year 2023 $’000 39,571 - 5,416 34,362 92 79,441 2022 $’000 37,355 (5,459) (33,996) 41,600 71 39,571 Other financial assets represent equity investments in listed and unlisted entities comprising of View Media Group Limited, RAIZ Invest Limited, MoneyMe Limited, Open Money Group Pty Limited and a portfolio of other SWM Ventures. Acquisitions during the period were made using a mix of cash and contra advertising agreements. Refer to Note 3.1. Key judgements, estimates and assumptions The fair value of other financial assets that are measured through a Level 3 (significant unobservable inputs) approach under the accounting standard AASB 13 Fair Value Measurement. The valuation technique used was based on the equity price established in the most recent round of equity financing and consideration of any other key changes in the investment which requires a level of judgement. 95 Notes to the Financial Statements for the year ended 30 June 2023 Section 5: Taxation 5.1 Taxes Accounting policy Current taxes Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to taxation authorities at the tax rates and tax laws enacted or substantively enacted by the balance sheet date. Deferred taxes Deferred income tax assets and liabilities are recognised for all deductible temporary differences, carried forward unused tax losses, to the extent it is probable that taxable profit will be available to utilise them or an outflow will be required to settle the balance. The carrying amount of deferred income tax assets is reviewed at balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to utilise them. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. In making this assessment, the Group considers the tax consequences of recovering assets and liabilities through sale, use and subsequent sale or through use and then abandonment or scrapping of the asset. Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates and tax laws that have been enacted or substantively enacted at the balance sheet date. Deferred income tax is provided on temporary differences at balance sheet date between accounting carrying amounts and the tax bases of assets and liabilities, other than for the following: > Where they arise from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction affects neither the accounting profit nor taxable profit or loss. > Where taxable temporary differences relate to investments in subsidiaries, associates and interests in joint ventures: (i) Deferred tax liabilities are not recognised if the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future. (ii) Deferred tax assets are not recognised if it is not probable that the temporary differences will reverse in the foreseeable future and taxable profit will not be available to utilise the temporary differences. Deferred tax liabilities are also not recognised on recognition of goodwill. Income taxes relating to items recognised directly in equity are recognised in equity and not in the income statement. Offsetting deferred tax balances Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. Tax consolidation The Company and its wholly owned Australian resident entities are part of a tax consolidated Group. As a consequence, all members of the tax consolidated Group are taxed as a single entity. The head entity within the tax consolidated group is Seven West Media Limited. Current tax expense/income, deferred tax liabilities and deferred tax assets arising from temporary differences of the members of the tax-consolidated group are recognised in the separate financial statements of the members of the tax-consolidated group using the group allocation approach by reference to the carrying amounts of assets and liabilities in the separate financial statements of each entity and the tax values applying under tax consolidation. Any current tax liabilities (or assets) and deferred tax assets arising from unused tax losses of the Company or its subsidiaries are ultimately assumed by the head entity in the tax consolidated group and are recognised as amounts payable/(receivable) to/ (from) other entities in the tax consolidated group in conjunction with any tax funding arrangement amounts (refer below). Prime Media Group joined the tax consolidated Group of Seven West Media Limited effective 31 December 2021. Nature of tax funding arrangements The head entity, in conjunction with other members of the tax- consolidated group, has entered into a tax funding arrangement which sets out the funding obligations of members of the tax- consolidated group in respect of tax amounts. The tax funding arrangements require payments to the head entity equal to the current tax liability assumed by the head entity resulting in a related party payable to the head entity equal in amount to the current tax liability assumed. This related party balance is at call. Contributions to fund the current tax liabilities are payable as per the tax funding arrangement and reflect the timing of the head entity’s obligation to make payments for tax liabilities to the relevant tax authorities. Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities. 96 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20235.1 Taxes (continued) Accounting policy (continued) Goods and Services Tax (GST) Revenues, expenses and assets are recognised exclusive of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of the expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included within other receivables or payables in the balance sheet. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows. Tax expense recognised in profit or loss Current year tax expense Adjustments for current tax of prior periods Current tax expense Deferred tax expense Adjustment for deferred tax of prior periods Total tax expense 2023 $’000 (5,012) 1,193 (3,819) (48,000) 1,525 2022 $’000 (71,941) 5,010 (66,931) (7,485) 2,077 (50,294) (72,339) Reconciliation of tax expense to prima facie tax payable Profit before tax from continuing operations 196,041 283,391 Tax expense at the Australian tax rate of 30% (2022: 30%) (58,812) (85,017) Tax effect of amounts which are not (deductible)/taxable in calculating taxable income: Share of net profit of equity accounted investees, net of dividends received Dividend received Transaction costs Recognition of previously unrecognised capital losses Non-assessable income Other non-assessable items Adjustments for tax of prior periods Total tax expense Tax recognised in other comprehensive income Financial assets at fair value Employee benefits Trade and other payables Deferred tax asset not recognised 162 - (186) 3,850 3,879 (1,904) 2,717 88 4,586 (1,688) 777 2,954 (1,126) 7,087 (50,294) (72,339) (1,887) 10,216 78 – – (1,638) Capital losses and deductible temporary differences 1,347,769 1,175,054 Key judgements, estimates and assumptions In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgements about future events. New information may become available that causes the Group to change its judgement regarding the adequacy of existing tax liabilities. Such changes to tax liabilities will impact tax expense in the period that such a determination is made. 97 Notes to the Financial Statements for the year ended 30 June 20235.2 Deferred Tax Assets and Liabilities Deferred tax assets (liabilities) Year ended 30 June 2023 Deferred tax balances transferred from Business Combinations $’000 25 June 2022 $’000 Recognised in profit or loss $’000 Recognised in other comprehensive income $’000 30 June 2023 $’000 The balance comprises temporary differences attributable to: Trade and other receivables Program rights and inventories Investments Intangible assets Property, plant and equipment Leases Trade and other payables Creditors Provisions Deferred income Transaction costs Other 5,147 (74,950) 7,993 (198,046) 11,918 38,079 - 17,928 56,648 (5,635) 49 (4,391) - - - (123) (2,123) - - - - - - - (1,017) (33,912) (6,106) 2,247 (5,113) 438 (1,989) (2,151) (10,800) 6,451 393 5,086 - - 4,130 (108,862) (1,887) - - - - - - 78 - - - (195,922) 4,682 38,517 (1,989) 15,777 45,926 816 442 695 Net deferred tax (liabilities) assets (145,260) (2,246) (46,473) (1,809) (195,788) Year ended 26 June 2021 Deferred tax balances transferred from Business Combinations $’000 27 June 2021 $’000 Recognised in profit or loss $’000 Recognised in other comprehensive income $’000 The balance comprises temporary differences attributable to: 25 June 2022 $’000 5,147 (74,950) 7,993 (198,046) 11,918 38,079 - 17,928 56,648 (5,635) - 49 (4,391) - - 10,216 - - - - (1,638) - - - - - 8,578 (145,260) Trade and other receivables Program rights and inventories1 Investments Intangible assets Property, plant and equipment Leases Deferred expenses and prepayments Trade and other payables Provisions Deferred income Borrowings Transaction costs Other 4,099 (92,337) (3,858) 499 - - (201,387) (5,487) 21,921 40,255 1,793 16,109 58,580 3,147 1,697 42 3,775 - - - 443 1,898 217 - - 164 Net deferred tax (liabilities) assets (146,164) (2,266) 549 17,387 1,635 8,828 (10,003) (2,176) (1,793) 3,014 (3,830) (8,999) (1,697) 7 (8,330) (5,408) 1 The opening balance has been updated to reflect the impact of an amended prior period tax return. 98 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 2023Section 6: Capital Management 6.1 Borrowings Accounting policy Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowings. Any related accrued interest is included in trade payables and accruals. Non-current Borrowings - secured Unamortised refinancing costs Borrowings net of unamortised refinancing costs 2023 $’000 2022 $’000 310,000 300,000 (3,166) (5,571) 306,834 294,429 6.1A Financial arrangements As at 30 June 2023, the Group had access to secured revolving syndicated facilities to a maximum of $600,000,000 (June 2022: $600,000,000). The amount of these facilities undrawn at reporting date was $290,000,000 (June 2022: $300,000,000). The facilities are subject to a weighted average interest rate of 6.53% at 30 June 2023 (June 2022: 3.54%). In addition, the Group has access to a $13,400,000 (June 2022: $13,400,000) multi-option facility with Australia and New Zealand Banking Group Limited. As at reporting date, $11,244,606 of this facility (June 2022: $12,169,614) was utilised for the provision of bank guarantees. The Group also has access to a $18,000,000 (June 2022: nil) uncommitted trade facility for short-term working capital purposes. As at reporting date, no amounts were utilised under this facility. Fair value The carrying amount and fair value of Group borrowings at the end of the financial year was $310,000,000 (June 2022: $300,000,000). Risk exposures Information about the Group’s exposure to interest rate changes is provided in Note 6.5. 6.2 Share Capital Accounting policy Ordinary shares are classified as equity. 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. Ordinary shares are fully-paid and have no par value. They carry one vote per share and the right to dividends. They bear no special terms or conditions affecting income or capital entitlements of the shareholders. 1,553,571,241 (June 2022: 1,590,118,239) Ordinary shares fully paid 2023 $’000 2022 $’000 3,417,968 3,432,966 Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up the company in proportion to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. In conjunction with the Group’s FY22 year end results announcement on 16 August 2022, an on-market share buy back of up to 10% of shares on issues was announced. As at 30 June 2023, 36,546,998 ($15,073,622) have been bought back at an average price of $0.41, of which $14,998,000 was paid. The shares bought back were subsequently cancelled. As at 30 June 2023, a trust controlled by the Group (disclosed as ‘Reserve for own shares’ in the Consolidated Statement of Changes in Equity) held 34,926,146 (June 2022: 80,277,577) ordinary shares in the Group. During the period, 50,351,431 shares were issued (June 2022: nil) out of the trust to employees and 5,000,000 shares (June 2022: 80,083,871 including shares issues) were purchased by the trust. Shares are held for the purpose of allowing the Group to satisfy performance rights obligations of the Seven West Media’s employees and Executives Short Term and Long Term Incentive Plans. 99 Notes to the Financial Statements for the year ended 30 June 2023 6.3 Dividends Accounting policy Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period. 6.3A Dividends There were no dividends paid during the financial year (June 2022: nil). 6.3B Dividends not recognised at year end No final dividend has been declared in the current or prior year. 6.3C Franked dividends Franked dividends declared will be franked out of existing franking credits or out of franking credits arising from the receipt of franked dividends and the payment of tax in the year ending 30 June 2023. Franking credits available for subsequent financial years based on a tax rate of 30% (2022: 30%) The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for: (a) franking credits that will arise from the payment of the current tax liability or receivable; (b) franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and (c) franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date. 2023 99,626 2022 102,165 6.4 Share-Based Payments Accounting policy Employees of the Group receive remuneration in the form of share based payments, whereby employees render services as consideration for equity instruments. Share-based compensation benefits are provided to executives and employees in accordance with the Company’s share plan and employment agreements. Equity-settled transactions The fair value of the rights granted is recognised as an employee benefit expense with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the rights granted, which includes any market performance conditions but excludes the impact of any service and non-market performance vesting conditions and the impact of any non-vesting conditions. Non-market vesting conditions are included in assumptions about the number of rights that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At the end of each period, the entity revises its estimate of the number of rights that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in profit or loss, with a corresponding adjustment to equity. 100 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20236.4 Share-Based Payments (continued) 6.4A Performance and share rights granted as compensation The total expense recognised for the LTI share-based payments for all plans during the financial year for the Group was $3.0 million (June 2022: $2.3 million). The total expense for the STI share-based payments for all the plans during the financial year for the Group was nil (June 2022: $4.3 million). The accounting value of share-based payments may be negative where an executive’s share-based expense includes cumulative adjustments for changes in non-market vesting conditions. Long Term Incentive Plans At 30 June 2023, performance rights that remain outstanding are from 2021, 2022 and 2023 Long Term Incentive Plans. The Group issued two tranches in 2023 for the long term incentive plan that entitles key management personnel to performance rights. Holders of vested rights are entitled to fully paid ordinary shares in the Company. A total of 5,498,382 (2022: 6,588,597) performance rights were granted on 14 December 2022 (2022: 26 November 2021) and a further 180,043 in April 2023. These performance rights will convert to restricted shares if certain performance conditions are met. The performance period commenced on 1 July 2022 and ends on 30 June 2025 (2022: 1 July 2021 to 30 June 2024). The performance rights are subject to a total shareholder return (TSR) hurdle as well as an individual performance condition. Performance rights do not carry any dividend or voting rights prior to vesting and are all equity settled. Vesting of the rights are subject to the condition that the executive remains employed by the Company at the vesting date. During the year 11,334,213 rights for LTI and STI vested and 15,218,767 rights lapsed, including 2023 STI plan. 6.4B Valuation models and key assumptions used Grant date Award type Vesting Conditions Performance period Vesting Date Share price at grant date Number of rights granted Fair value at grant date Volatility - Seven West Media Risk free interest rate Dividend yield Valuation methodology 2023 Long Term Incentive Plan 14 December 2022 Performance Rights Absolute TSR 1 July 2022 to 30 June 2025 29 August 2025 $0.440 5,678,425 $0.230 60% 3.04% 4.89% Monte-Carlo simulation Short Term Incentive Plans In FY23, the Company’s underlying EBIT result of $238.3 million did not open the financial gateway. Refer to the Remuneration Report on pages 48 to 67 for further details. Key judgements, estimates and assumptions The Group measures the cost of equity transactions with employees by reference to the fair value of equity instruments at the date at which they are granted. The fair value is determined by an external valuer using a valuation model. The most appropriate valuation model used is dependent on the terms and conditions of the grant. The estimate also requires determination of the most appropriate inputs into the valuation model including the expected life of the share options, volatility and dividend yield and making assumptions about them. 101 Notes to the Financial Statements for the year ended 30 June 20236.5 Capital and Financial Risk Management 6.5A Accounting classifications and fair values The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. Financial assets (liabilities) measured at fair value Other financial assets Financial assets (liabilities) measured at amortised cost Trade and other receivables Cash and cash equivalents Borrowings Trade payables and accruals Note 4.5 3.2 3.1 6.1 3.4 2023 $’000 79,441 79,441 2022 $’000 39,571 39,571 230,147 57,402 220,123 37,938 (306,834) (294,429) (130,048) (127,972) (149,333) (164,340) 6.5B Measurement of fair values Valuation techniques and significant unobservable inputs The fair value of financial assets and liabilities must be estimated for recognition and measurement or for disclosure purposes. The carrying amount for financial assets and liabilities not included in this section are a reasonable approximate to their fair value. AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: a. quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1). b. inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2), and inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3). c. The following table shows the valuation techniques and measurement level inputs used to assess the fair value of financial assets and financial liabilities at 30 June 2023 and 25 June 2022 are as follows: Type Valuation Technique Other Financial Assets - Listed Entities The fair value is based on quoted prices (unadjusted) in active markets for identical assets or liabilities that can be accessed at the measurement date. Other Financial Assets - Unlisted Entities The fair value is based on the equity price established in the most recent round of equity financing and consideration of any other key changes in the investment which requires a level of judgement. Measurement Level 2023 $’000 2022 $’000 Level 1 2,820 10,762 Level 3 76,621 28,809 Assessment of fair value of Other (unlisted) investments The fair value of other financial assets is measured through a Level 3 (significant unobservable inputs) approach under AASB 9. This methodology included using > The issue prices in the most recent round of equity raising conducted by each company assuming this was in the last 12 months; and Comparison of issue price movements to listed peers over the same period. > Consideration of the investment method and the Group’s current and forecasted valuation date. 102 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20236.5C Risk management framework The Group’s activities expose it to a variety of financial risks: market risk (including interest rate risk), credit risk, capital risk and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses forward foreign exchange contracts to hedge certain foreign exchange risk exposures. Derivatives are exclusively used for hedging purposes, i.e. not as trading or other speculative instruments. The Group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the case of interest rate and foreign exchange and aging analysis for credit risk. 6.5C(i) Credit risk Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from credit exposures to customers, cash and cash equivalents and derivative financial instruments. The carrying amounts of financial assets represent the maximum credit exposure. Trade receivables The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. However, management also considers the factors that may influence the credit risk of its customer base, including the default risk associated with the industry in which customers operate. Each new customer is analysed individually for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, if they are available, financial statements, credit agency information and industry information. Sale limits are established for each customer and reviewed on a regular basis. In monitoring customer credit risk, customers are grouped according to their credit characteristics, including whether they are an individual or a legal entity, their industry, trading history with the Group and existence of previous financial difficulties. An impairment analysis is performed at each reporting date using a provision range matrix to measure expected credit losses. The percentage used will depend on the risk profile of the debtors at the time and may vary year on year. The provision rates are based on days past due for groupings of various customer segments. The calculation reflects the probability-weighted outcome and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Set out below is the information about the credit risk exposure on the Group’s trade receivables using a provision range matrix. Year ended 30 June 2023 Expected credit loss rate Estimated total gross carrying amount Expected credit loss Year ended 25 June 2022 Expected credit loss rate Estimated total gross carrying amount Expected credit loss Past due but not impaired Not past due < 30 days 31-90 days > 90 days 0.9% 234,500 (2,196) 2.1% 224,323 (4,745) 5.1% 5,618 (286) 3.5% 6,598 (232) 30.2% 3,273 (988) 37.3% 2,353 (878) 86.4% 552 (477) 88.5% 486 (430) Total $’000 243,943 (3,947) 233,760 (6,285) 6.5C(ii) Liquidity risk Liquidity risk refers to the risk that the Group is unable to meet its financial commitments as and when they fall due. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities. The Group manages liquidity risk by continuously monitoring forecast and actual cash flow and monitoring the Group’s liquidity reserve on the basis of these cash flow forecasts. In addition, the Group had access to total debt funding under its revolving syndicated debt facility equal to $600,000,000, refer to Note 6.1 for additional details on the Group’s borrowing activities for the year. Maturities of financial liabilities The table analyses the Group’s financial liabilities including interest to maturity into relevant groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted principal and interest cash flows and therefore may not agree with the carrying amounts in the statement of financial position. 103 Notes to the Financial Statements for the year ended 30 June 2023At 30 June 2023 Non-derivative financial liabilities Trade and other payables Unsecured loans Total financial liabilities At 25 June 2022 Non-derivative financial liabilities Trade and other payables Unsecured loans Total financial liabilities Less than one year $’000 Between 1 and 5 years $’000 Total contractual cash flows $’000 Carrying amount - liabilities $’000 203,846 20,310 224,156 4,019 316,604 320,623 207,865 336,914 544,779 210,245 306,834 517,079 174,720 21,356 196,076 3,665 308,845 312,510 178,385 330,201 508,586 180,489 294,429 474,918 6.6C(iii) Market risk Market risk is defined as possible changes in market prices, such as foreign exchange rates and interest rates that will affect the fair value or future cash flows of the Group’s financial instruments. The key components of market risks are: (a) Price risk Price risk refers to the risk of a decline in the value of a security or a portfolio. The Group is not exposed to significant price risk. (b) Interest rate risk Interest rate risk refers to the risks that the value of a financial instrument or its associated cash flows will fluctuate in response to changes in market interest rates. The Group’s main interest rate risk arises from long-term borrowings. As at the end of the reporting period the Group had the following instruments: Variable rate instruments Cash at bank, on hand and at call Weighted average interest rate External borrowing facilities Weighted average interest rate Net exposure to cash flow interest rate risk The Group’s current receivables generally do not bear interest. 2023 $’000 57,402 4.45% 310,000 6.53% 252,598 2022 $’000 37,938 1.50% 300,000 3.54% 262,062 Group sensitivity Based on the Group’s outstanding floating rate borrowings at 30 June 2023, a change in interest rates of +/-1% per annum with all other variables remaining constant would impact equity and after tax profit by the amounts shown below. This analysis assumes that all other variables remain constant. Net Profit/(Loss) Net Equity 2023 $’000 2022 $’000 2023 $’000 2022 $’000 If interest rates were 1% higher with all other variables held constant: (Decrease)/increase (2,170) (2,100) (2,170) (2,100) If interest rates were 1% lower with all other variables held constant: Increase/(decrease) 2,170 2,100 2,170 2,100 (c) Foreign exchange risk Foreign exchange risk refers to the risk that the value of a financial instrument or its associated cash flows will fluctuate due to changes in foreign currency rates. The Group has transactional currency risk; such exposure arises from sales or purchases by an operating unit in currencies other than the unit’s measurement currency. It is the Group’s policy not to enter into forward contracts until a firm commitment is in place. The terms of the forward currency contracts have been negotiated to match the terms of the commitments. Foreign currency contracts are used to reduce the exposure to the foreign exchange risk. As at 30 June 2023, the Group does not have any material cross-currency hedges. 104 As at the end of the reporting period, the Group had the following exposure to foreign exchange risk: Based on the Group’s financial instruments held at 30 June 2023, had the Australian dollar weakened/strengthened by 10% against the US dollar, Euro, UK pound and New Zealand dollar, with all other variables held constant, the Group’s equity and after tax profit for the year would not have changed significantly. The analysis was performed on the same basis as 2022 and ignores any impact of forecasted sales and purchases. Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 2023Section 7: Group Structure 7.1 Equity Accounted Investees Non-current Investments in associates and jointly controlled entities 16,694 16,153 2023 $’000 2022 $’000 Accounting policy An associate is an entity, other than a subsidiary, over which the Group has significant influence but not control. Significant influence is the power to participate in the financial and operating decisions of the entity with shareholding generally up to 50% of the voting rights. A jointly controlled entity is an entity in which the Group holds an interest under a contractual arrangement where the Group and one or more other parties undertake an economic activity that is subject to joint control. Measurement Interests in associates and jointly controlled entities are accounted for using the equity method. They are initially recognised at cost plus the investor’s share of retained post- acquisition profits, impairment and other changes in net assets, until significant influence or joint control ceases. Dividends received or receivable from equity accounted investees are recognised in the consolidated financial statements as a reduction in the carrying amount of the investment. When the Group’s share of losses equals or exceeds its interest in an equity accounted investee, including any other unsecured long- term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the investee. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. Impairment Equity accounted investees are tested for impairment annually or when indicators of impairments exist. Information relating to associates and jointly controlled entities is set out in the tables below: Name of entity HealthEngine Limited NPC Media Pty Limited Oztam Pty Limited Starts at 60 Pty Limited TX Australia Pty Limited Principal activities Online health directory Reporting date 30 June Playout and content managements services 30 June Ratings service provider 31 December Online social network for seniors Transmitter facilities provider Mildura Digital Television Pty Limited Television network provider West Digital Television Pty Limited Television network provider West Digital Television No.2 Pty Limited Television network provider West Digital Television No.3 Pty Limited Television network provider West Digital Television No.4 Pty Limited Television network provider WA SatCo Pty Limited Television network provider Broadcast Transmission Services Pty Limited Broadcast support service 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June 30 June Ownership interest 2023 % 16.3 50.0 33.3 35.3 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 2022 % 16.3 50.0 33.3 35.3 50.0 50.0 50.0 50.0 50.0 50.0 50.0 50.0 105 Notes to the Financial Statements for the year ended 30 June 20237.1 Equity Accounted Investees (continued) Below is the summarised financial information for the Group’s remaining associates and jointly controlled investments. Net profit (loss) for the year Group's share of profit for the year REF [A] [A] Share of profit is based on the Group’s ownership percentage for each equity accounted investee. Movements in carrying amount of equity accounted investees Carrying amount at the beginning of the financial year Share of profit of investees after tax Acquisitions and other movements Carrying amount at the end of the financial year 2023 $’000 1,401 440 2023 $’000 2022 $’000 (368) 318 2022 $’000 16,153 15,835 440 101 318 - 16,694 16,153 The carrying amount of each investment is based on the fair value of investments at acquisition date adjusted for equity accounted profits, dividends, impairments and any other movement since acquisition. The Group has not recognised losses in relation to its interests in equity accounted investees as the Group has no obligation in respect of these losses. 7.2 Investments in Controlled Entities Accounting policy The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Seven West Media Limited as at 30 June 2023 and the results of all subsidiaries for the year then ended. Seven West Media Limited and its subsidiaries together are referred to in this financial report as the “Group.” The consolidated entity controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de- consolidated from the date that control ceases. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated income statement, statement of comprehensive income, statement of changes in equity and statement of financial position respectively. The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting policy described above. 135 Nominees Pty Ltd Albany Advertiser Pty Ltd Another Story Productions Pty Limited Australian National Television Pty Limited Australian Television International Pty Limited Australian Television Network Limited Broadcast Production Services Pty Ltd BTTR Production Pty Limited BTW Productions Pty Limited 106 Notes Country of incorporation [P] [A] [O] [C] [C] [C] [P] [N] [K] Australia Australia Australia Australia Australia Australia Australia Australia Australia Ownership interest 2023 % 100 100 100 100 100 100 100 100 100 2022 % 100 100 100 100 100 100 100 100 100 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20237.2 Investments in Controlled Entities (continued) Notes Country of incorporation 2023 % 2022 % Ownership interest Channel Seven Adelaide Pty Limited Channel Seven Brisbane Pty Limited Channel Seven Melbourne Pty Limited Channel Seven Perth Pty Limited Channel Seven Queensland Pty Limited Channel Seven Sydney Pty Limited Cobbittee Publications Pty Limited Colorpress Australia Pty Ltd ColourPress Pty Ltd Community Newspaper Group Limited ComsNet Pty Ltd Dansted and McCabe Holdings Pty Ltd Dodds Street Properties Pty Limited Edinburgh Military Tattoo Sydney Production Pty Ltd Fam Time Productions Pty Limited Faxcast Australia Pty Limited Geraldton Newspapers Pty Ltd Geraldton Telecasters Pty Ltd Golden West Network Pty Ltd Golden West Satellite Communications Pty Ltd Harlesden Investments Pty Ltd Herdsman Print Centre Pty Ltd Herdspress Leasing Pty Ltd Hocking & Co. Pty Ltd Hybrid Television Services (ANZ) Pty Limited Impact Merchandising Pty Limited Jupelly Pty Limited Kenjins Pty Limited Mid West Television Pty Ltd Mining Television Network Pty Ltd Pacific Magazines Trust Prime Digitalworks Pty Ltd Prime Media Broadcasting Services Pty Ltd Prime Media Group Services Pty Ltd Prime New Media Investments Pty Ltd Prime Properties (Albury) Pty Ltd Prime Television (Holdings) Pty Ltd Prime Television (Northern) Pty Ltd Prime Television (Southern) Pty Ltd Prime Television (Victoria) Pty Ltd Prime Television Investments Pty Ltd [C] [C] [C] [C] [C] [C] [C] [A] [A] [L] [A] [A] [C] [M] [C] [A] [P] [P] [P] [A] [A] [A] [A] [I] [E] [C] [C] [P] [P] [P] [P] [P] [P] [P] [P] [P] [P] [P] [P] Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 107 Notes to the Financial Statements for the year ended 30 June 20237.2 Investments in Controlled Entities (continued) Notes Country of incorporation 2023 % 2022 % Ownership interest Quokka Press Pty Ltd Quokka West Pty Ltd Red Music Publishing Pty Limited Red Publishing Pty Limited Riverlaw Holdings Pty Limited SBB Productions Pty Limited Screenworld Pty Ltd Seven Affiliate Sales Pty Ltd Seven DS Holdings Pty Ltd Seven Facilities Pty Ltd Seven Investment Holding Pty Limited Seven Investment Holding USA LLC Seven Magazines Pty Limited Seven Network (Operations) Limited Seven Network Programming Pty Limited Seven Productions NZ Limited Seven Publishing (No 1) Pty Limited Seven Publishing (No 2) Pty Limited Seven Publishing (PP) Holdings Pty Limited Seven Publishing (PP) Pty Limited Seven Publishing MM Pty Limited Seven Publishing NZ Limited Seven Publishing NZ Merchant Company Limited Seven Publishing Pty Limited Seven Regional Operations Pty Limited Seven Rights Pty Ltd Seven Satellite Operations Pty Limited Seven Satellite Pty Limited Seven Studios Distribution Pty Ltd Seven Studios Holdings Pty Ltd Seven Studios Pty Limited Seven Television Australia Limited Seven Ventures Pty Limited Seven West Media Investments Pty Limited SMG H1 Pty Limited SMG H2 Pty Limited SMG H4 Pty Limited SMG H5 Pty Limited South West Printing and Publishing Company Ltd Southdown Publications Pty Limited 108 [A] [A] [D] [C] [A] [K] [P] [P] [I] [H] [C] [C] [C] [C] [C] [C] [C] [C] [C] [J] [G] [C] [J] [I] [F] [C] [C] [B] [B] [C] [C] [A] [C] Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia United States of America Australia Australia Australia New Zealand Australia Australia Australia Australia Australia New Zealand New Zealand Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20237.2 Investments in Controlled Entities (continued) Sunshine Broadcasting Network Limited SWM Finance Pty Limited SWM Media Holdings Pty Ltd Telepro Pty Ltd The Seven Publishing Plus Company Pty Limited W.A. Broadcasters Pty Ltd WAN Cinemas Pty Limited West Australian Entertainment Pty Ltd West Australian Newspapers Limited West Central Seven Limited Western Mail Operations Pty Ltd Western Mail Pty Ltd Westroyal Pty Ltd Wide Bay - Burnett Television Limited Zamojill Pty Ltd Zangerside Pty Limited Zed Holdings Pty Limited Notes Country of incorporation 2023 % 2022 % Ownership interest [C] [B] [I] [P] [C] [A] [A] [A] [A] [C] [A] [A] [A] [C] [P] [C] [C] Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia Australia 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 The class of all shares is ordinary and the entities entered into the Deed of Cross Guarantee with Seven West Media Limited under ASIC Corporations (wholly-owned companies) instrument 2016/785 by Assumption Deed on 8 April 2004. The dates below show when the deed was amended: [A] Prior to 30 June 2009. [B] 20 June 2011. [C] 26 June 2012. [D] 18 April 2013. [E] 30 September 2013. [F] 1 May 2015. [G] 16 June 2015. [H] 31 March 2016. [I] 1 December 2016. [J] 12 May 2017. [K] 5 February 2019. [L] 24 June 2019. [M] 24 April 2019. [N] 25 November 2019. [O] 17 May 2021. [P] 25 January 2022. Pursuant to ASIC Corporations (wholly-owned companies) instrument 2016/785, certain wholly-owned subsidiaries, as noted above, are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports and directors’ reports. It is a condition of the Class Order that the ‘Holding Entity’ and each of the wholly-owned subsidiaries enter into a Deed of Cross Guarantee under which each company guarantees the debts of the others. Seven West Media Limited and its subsidiaries represent a ‘Closed Group’ for the purposes of the Seven West Media Limited Class Order, and as there are no other parties to its Deed of Cross Guarantee that are controlled by Seven West Media Limited, they also represent the ‘Extended Closed Group.’ 109 Notes to the Financial Statements for the year ended 30 June 20237.2 Investments in Controlled Entities (continued) The consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2023 of the Seven West Media Limited Closed Group is presented below according to the Class Order: Statement of profit or loss and other comprehensive income Revenue Other income Revenue and other income Expenses Net income related to investments Net gain on disposal of investments Major IT Project implementation costs Net gain on disposal of subsidiaries Reversal of onerous provisioning Share of net profit of equity accounted investees Profit before net finance costs and tax Finance income Finance costs Write off of unamortised original refinancing cost Profit before tax Tax expense Profit for the year Other comprehensive income (expense) Items that may be reclassified subsequently to profit or loss: Exchange differences on translation of foreign operations Tax in relation to employee share plans Items that will not be reclassified to profit or loss: Net change in fair value of financial assets (net of tax) Other comprehensive expense for the year, net of tax Total comprehensive income for the year 2023 $’000 2022 $’000 1,487,256 1,530,053 183 1,092 1,487,439 1,531,145 (1,249,558) (1,220,697) 12,456 2,040 (21,511) - - 440 3,728 - - 2,590 8,351 318 231,306 325,435 3,225 (38,435) - 196,096 (50,368) 145,728 (597) 78 (9,545) (10,064) 135,664 1,385 (36,837) (4,815) 285,168 (72,824) 212,344 503 - (20,940) (20,437) 191,907 110 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20237.2 Investments in Controlled Entities (continued) The consolidated statement of financial position for the year ended 30 June 2023 of the Seven West Media Limited Closed Group is presented below according to the Seven West Media Limited Class Order: ASSETS Current assets Cash and cash equivalents Trade and other receivables Current tax receivable Program rights and inventories Other assets Total current assets Non-current assets Equity accounted investees Other financial assets Property, plant and equipment Intangible assets Right of use assets Other assets Total non-current assets Total assets LIABILITIES Current liabilities Trade and other payables Lease Liabilities Provisions Deferred Income Current tax liabilities Total current liabilities Non-current liabilities Trade and other payables Lease Liabilities Provisions Deferred tax liabilities Borrowings Total non-current liabilities Total liabilities Net assets EQUITY Share capital Reserves Accumulated deficit Total equity 2023 $’000 2022 $’000 57,402 230,147 18,046 176,915 20,378 502,888 16,694 61,521 123,215 714,801 62,846 398 979,475 37,938 219,974 - 147,212 19,571 424,695 16,153 21,300 113,829 720,277 68,101 1,561 941,221 1,482,363 1,365,916 188,903 13,488 104,986 62,547 - 369,924 4,019 177,505 50,588 195,791 306,834 734,737 1,104,661 377,702 161,863 12,141 105,249 49,030 63,681 391,964 3,665 186,239 84,578 145,260 294,429 714,171 1,106,135 259,781 3,398,163 3,362,514 (8,217) (67,149) (3,012,244) (3,035,584) 377,702 259,781 111 Notes to the Financial Statements for the year ended 30 June 20237.3 Parent Entity Financial Information Accounting policy The financial information for the Parent Entity, Seven West Media Limited, has been prepared on the same basis as the consolidated financial statements, except for: (i) Investments in subsidiaries Investments in subsidiaries are accounted for at cost less impairment losses in the financial statements. (ii) Dividends received Dividends received from subsidiaries are recognised in profit and loss. (iii) Financial guarantees Where the Parent Entity has provided financial guarantees in relation to loans and payables of subsidiaries for no compensation, the fair values of these guarantees are accounted for as contributions and recognised as part of the cost of the investment. 7.3A Summary of financial information The individual financial statements for the Parent Entity show the following aggregate amounts: Financial position of parent entity at year end Current assets Total assets Current liabilities Total liabilities Total equity of the parent entity comprising of; Share capital Reserves Asset revaluation reserve Equity compensation reserve Accumulated deficit Profits reserve Result of parent entity Profit (loss) for the year Total comprehensive income (expense) for the year Parent entity 2023 $’000 2022 $’000 18,582 81,739 1,401 1,401 155,611 192,537 99,846 100,170 3,417,968 3,432,966 8,352 8,578 8,352 10,878 (3,955,284) (3,960,553) 600,724 80,338 600,724 92,367 - - (5,778) (5,778) 7.3B Guarantees entered into by the parent entity The Parent Entity has provided financial guarantees in respect of borrowings of a subsidiary amounting to $nil (June 2022: $nil). There are cross guarantees given by Seven West Media Limited and its subsidiaries described in Note 7.2. 7.3C Contingent liabilities of the parent entity The Parent Entity did not have any contingent liabilities as at 30 June 2023 or 25 June 2022. 7.3D Contractual commitments for the acquisition of property, plant or equipment The Parent Entity had no contractual commitments for the acquisition of property, plant or equipment as at 30 June 2023 or 25 June 2022. 112 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 20237.4 Related Party Transactions Accounting policy Key management personnel transactions Transactions were entered into during the financial year with Equity Accounted Investments and Director Related Entities of Seven West Media Limited and its controlled entities, which: iv. occurred within a normal customer or supplier relationship on terms and conditions no more favourable than those which it is reasonable to expect would have been adopted if dealing with the Director or Director-related entity at arm’s length in the same circumstances; v. do not have the potential to adversely affect decisions about the allocation of scarce resources or discharge the responsibility of the Directors; or vi. are minor or domestic in nature. 7.4A Transactions with related parties The following transactions occurred with related parties during the financial year: Sale of goods, advertising and other services Equity accounted investees Other Related Entities Purchase of goods, advertising and other services Equity accounted investees Other Related Entities Shareholder contribution Equity accounted investees1 2023 $’000 767 775 2022 $’000 1,067 651 19,218 24,037 22 12 550 400 1 During the period, the Group issued interest bearing loans to Equity Accounted investees of $450,000 (June 2022: $400,000), and capital contributions of $100,000 (June 2022: nil). These loans, subsequent to issuance, were redesignated as convertible notes. For the year ended 30 June 2023, no allowance for expected credit losses relating to the amounts owed by related parties has been made (June 2022: $400,000). This net convertible note balance is recognised in Note 4.5, which has been fair valued at 30 June 2023 in line with the policy detailed. 7.4B Outstanding balances arising from sales/purchases of goods, advertising and other services The following balances are outstanding at the end of the reporting period in relation to transactions with related parties: Current receivables (sale of goods, advertising and other services) Equity accounted investees Other Related Entities Current payables (purchase of goods, advertising and other services) Equity accounted investees Other Related Entities 2023 $’000 2022 $’000 98 225 366 - 96 8 374 - 7.4C Parent entity Seven West Media Limited is the ultimate Australian parent entity within the Group. There are no financial guarantees in respect of borrowings of a subsidiary, no contingent liabilities and no contractual commitments. 7.4D Subsidiaries Interests in subsidiaries are set out in Note 7.2. 113 Notes to the Financial Statements for the year ended 30 June 20237.4 Related Party Transactions (continued) 7.4E Key management personnel compensation In addition to their salaries, the Group also provides non-cash benefits to Directors and executive officers, and contributes to a post- employment superannuation fund on their behalf. Executive officers also participate in the Group’s Equity Incentive Plan for 2021, 2022 and 2023 (refer Note 6.4). Key management personnel compensation Short-term employee benefits Post-employment benefits Superannuation Termination benefits Share-based payments Other long term benefits 2023 $’000 2022 $’000 5,680 8,105 220 252 2,592 34 8,778 226 – 4,052 81 12,464 Detailed remuneration disclosures in respect of Directors and each member of key management personnel are provided in the remuneration report on pages 48 to 67. Other transactions with key management personnel A number of Directors of Seven West Media Limited also hold directorships with other corporations which provide and receive goods or services to and from the Group in the ordinary course of business on normal terms and conditions. None of these Directors derive any direct personal benefit from the transactions between the Group and these corporations. 114 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 2023Section 8: Other 8.1 Remuneration of Auditor During the year the following fees were paid or payable for services provided by the auditor of the parent entity and its related practices. Auditors of the Group - KPMG Audit or review of the financial statements (i) Assurance services Other assurance services Total remuneration for audit and other assurance services (ii) Other services Taxation advice and compliance services Transaction services Total other services Total remuneration of KPMG Australia 8.2 Contingent Liabilities 2023 $ 2022 $ 768,000 644,472 8,728 8,433 776,728 652,905 235,930 - 235,930 286,879 536,539 823,418 1,012,658 1,476,323 Participation in media involves particular risks associated with defamation litigation and litigation to protect media rights. The nature of the Group’s activities is such that, from time to time, claims are received or made by the Group. The Directors are of the opinion that there are no material claims that require disclosure of such a contingent liability. Seven Network (Operations) Ltd (SNOL) has been named by the Respondents (Fairfax Media Publications, and ors) in an application for third party costs in the Ben Roberts-Smith defamation proceedings. The application is brought in the first instance against another party and in the alternative against SNOL. SNOL intends to vigorously defend the application. 8.3 Events Occurring after the Reporting Date In the interval between the end of the financial year and the date of this report there has not arisen any item, transaction or event of a material and unusual nature likely, in the opinion of the Directors of the Company, to affect significantly the operations of the Group, the results of these operations, or the state of affairs of the Group, currently or in future financail periods. 115 Notes to the Financial Statements for the year ended 30 June 20238.4 Summary of Other Significant Accounting Policies Foreign currency translation (i) Functional and presentation currency Reserves (i) Equity compensation reserve The share based payments reserve is used to recognise recognise the expense, based on the grant date fair value of incentive shares issued to eligible employees with performance related conditions. (ii) Reserve for own shares Treasury shares are shares in Seven West Media Limited that are held by the SWM Equity Incentive Plan Trust for the purpose of purchasing shares that are then to be transferred to employees under the Group’s Employee Share Scheme. (iii) Foreign currency translation reserve Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income in a separate reserve within equity. The cumulative amount is reclassified to profit or loss when the net investment is disposed of. (iv) Fair value reserve Fair value reserve is used to recognise the valuation of the Groups accounting for other investments as fair value through other comprehensive income. Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (‘the functional currency’). The consolidated financial statements are presented in Australian dollars (AUD), which is the Group’s functional and presentation currency. (ii) Transactions and balances Transaction in foreign currencies are translated into the respective functional currency of Group companies at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value was determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss and presented within finance costs. Foreign currency differences are recognised in OCI and accumulated in the translation reserve, except to the extent that the translation difference is allocated to NCI. Finance income and costs Interest income or expense is recognised using the effective interest method. The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial instrument to: > the gross carrying amount of the financial asset; or > the amortised cost of the financial liability. In calculating interest income and expense, the effective interest rate is applied to the gross carrying am.ount of the asset or to the amortised cost of the liability. 116 Financial Statements Seven West Media Limited Annual Report 2023Notes to the Financial Statements for the year ended 30 June 2023Directors’ Declaration For the Year Ended 30 June 2023 1. In the opinion of the Directors of Seven West Media Limited (the Company): a. the consolidated financial statements and notes that are set out on pages 69 to 116 and the Remuneration Report on pages 48 to 67 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 performance for the financial year ended on that date; and ii. complying with Australian Accounting Standards and the Corporations Regulations 2001; and b. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 2. As at the date of this declaration, there are reasonable grounds to believe that the Company and the members of the Extended Closed Group identified in Note 7.2 will be able to meet any obligations or liabilities to which they are or may become subject by virtue of the Deed of Cross Guarantee, described in Note 7.2, between the Company and those group entities pursuant to the 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 from the Chief Executive Officer and the Chief Financial Officer for the financial year ended 30 June 2023. 4. The Directors draw attention to page 74 of the consolidated financial statements, which includes a statement of compliance with International Financial Reporting Standards. Signed in accordance with a resolution of the Directors. KM Stokes AC Chairman Sydney 16 August 2023 117 Independent Auditor’s Report To the shareholders of Seven West Media Limited Report on the audit of the Financial Report Basis for opinion Opinion We have audited the Financial Report of Seven West Media Limited (the Company). 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. In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. > 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. The Financial Report comprises: > 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. 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. Key Audit Matters The Key Audit Matters we identified are: > Carrying value of Television Licences > Provision for onerous contracts Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 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. 118 Financial Statements Seven West Media Limited Annual Report 2023Independent Auditor’s Report Carrying value of Television Licences ($670,277k) Refer to Note 4.1 to the Financial Report The key audit matter How the matter was addressed in our audit The carrying value of the Television Licences is a Key Audit Matter due to: Our procedures included: > Considering the appropriateness of the Group’s assessment of impairment and impairment reversal indicators and the value in use method applied by the Group to test the Television Licenses for impairment against the requirements of the accounting standards. > Challenging the short, medium and long-term forecasts for television advertising market growth rates and the Group’s share of the advertising market. We compared the market share and growth rate assumptions against historical actuals and third party perspectives on industry outlook. > Independently developed a discount rate range against publicly available data of a group of comparable entities and the industry it operates in. This procedure was performed with assistance from our valuation specialist. > Assessing disclosures in relation to the valuation of the Television Licenses by comparing these disclosures to our understanding obtained from our testing and accounting standards requirements. > The size of the asset, being the largest asset of the Group, noting there have been impairments and partial impairment reversals in prior years; and > The level of judgement required by us in evaluating the assumptions determined by the Group for forecast Television cash generating unit (“CGU”) revenues. The level of judgement required by us in evaluating the Group’s forecast Television CGU revenues was impacted by the following conditions existing at 30 June 2023: > Macroeconomic factors impacting advertising revenue markets compared to previous impairment estimates; and > The growth in advertising revenue for commercial television networks continuing to be challenged by changes in consumer viewing habits and use of alternative viewing platforms. The above factors create inherent uncertainty in the key assumptions used in the Television CGU value in use model increasing the risk of a wider range of possible outcomes for us to consider, specifically: > Television advertising growth rates in free to air and digital markets – short, medium and long term; > Group’s share of Television advertising in free to air and digital markets; and > The discount rate – this is complicated in nature and varies according to the above specific conditions. 119 Independent Auditor’s Report Provision for Onerous Contracts ($44,988k) Refer to Note 4.4 to the Financial Report The key audit matter How the matter was addressed in our audit For significant purchase contracts for television programs and sporting broadcast rights, our procedures included: > Evaluating the basis for recognition of the onerous contract provision against the Group’s accounting policy and the accounting standards. > Assessing the Group’s determination of economic benefits expected to be received under each contract. We compared the forecast benefits to historical results on similar television programs, checking the impact of expected market conditions and advertising revenue outlook were consistent with the assumptions set out and tested by us in the Carrying value of Television Licences key audit matter. > Comparing the costs of fulfilling the obligation against the onerous contract, historical costs on similar television programs and sporting broadcast rights adjusted for published expectations for cost growth. > Assessing the Group’s adoption of AASB 2020-3 Amendments to Australian Accounting Standards as it relates to onerous contracts as well as reviewing the disclosure of the opening balance sheet adjustment. The Group’s policy is to routinely enter noncancellable purchase contracts for television programs and sporting broadcast rights. Where there are changes in market conditions or contractual terms the Group’s policy is to estimate the unavoidable minimum net obligation under these contracts to determine which are onerous and, where relevant, recognise or adjust the provision for onerous contracts. Provision for onerous contracts is a Key Audit Matter due to: > The level of judgement required by us in evaluating the assumptions determined by the Group for forecast economic benefits from each onerous contract or potentially onerous contract including future television advertising revenues; and > The $6,588,000 provided due to amendments to AASB 137 Provisions, Contingent Liabilities and Contingent Assets (by AASB 2020-3 Amendments to Australian Accounting Standards) relating to costs the Group should include in determining the cost of fulfilling a contract when assessing whether a contract is onerous. The judgements required by us in evaluating the Group’s estimation of the unavoidable minimum net obligations for onerous contracts include assessing: > The economic benefits expected to be received under the onerous contracts including future advertising revenues (determined with growth rate assumptions consistent with those used in the Carrying value of Television Licences key audit matter); and > The costs of fulfilling the onerous contract. These estimation uncertainties increase the risk of a wider range of possible outcomes for us to consider which gives rise to greater audit complexity. 120 Financial Statements Seven West Media Limited Annual Report 2023Independent Auditor’s Report Other Information Other Information is financial and non-financial information in Seven West Media 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. 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 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. 121 Independent Auditor’s Report Auditor’s responsibilities for the audit of the Financial Report Our objective is: > to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and > to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: https://www.auasb.gov.au/ admin/file/content102/c3/ar1_2020.pdf. This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Seven West Media Limited for the year ended 30 June 2023, complies with Section 300A of the Corporations Act 2001. Directors’ responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 48 to 67 of 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 Duncan McLennan Partner Sydney 16 August 2023 122 Financial Statements Seven West Media Limited Annual Report 2023 Investor Information Shareholder Inquiries Tax File Number Information Investors seeking information regarding their shareholding or dividends or wishing to advise of a change of address should contact the Share Registry at: Boardroom Pty Limited Level 8 210 George Street Sydney NSW 2000 Telephone: (02) 9290 9600 Facsimile: (02) 9279 0664 or Visit the online service at boardroomlimited.com.au Boardroom Pty Limited has an online service for investors called InvestorServe. This enables investors to make online changes, view balances and transaction history, as well as obtain information about recent dividend payments and download various forms to assist in the management of their holding. To use this service visit the Boardroom Pty Limited website. Investor Relations enquiries may be directed to swminvestorrelations@seven.com.au or visit the website at www.sevenwestmedia.com.au The company is obliged to record Tax File Numbers or exemption details provided by shareholders. While it is not compulsory for shareholders to provide a Tax File Number or exemption details, Seven West Media Limited is obliged to deduct tax from unfranked dividends paid to investors resident in Australia who have not supplied such information. Forms are available upon request from the Share Registry or shareholders can submit their Tax File Number via the Registry’s website. The Chess System Seven West Media Limited operates under CHESS – Clearing House Electronic Subregister System – an Australian Securities Exchange system which permits the electronic transfer and registration of shares. Under CHESS, the company issues a Statement of Holdings to investors, instead of share certificates, and the statement will quote the Holder Identification Number (HIN). The HIN should be quoted on any correspondence investors have with the Share Registry. The company will maintain investors’ holdings in an Issuer Sponsored facility, which enables investors to maintain their holding without the need to be tied to any particular stockbroker. 123 Shareholder Information The shareholder information set out below was applicable at 28 July 2023. a. Distribution of equity securities a. Analysis of numbers of equity security holders by size of holding: Size of holding 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over b. There were 4,465 holders of less than a marketable parcel of ordinary shares. b. Equity security holders The names of the twenty largest holders of equity securities are listed below: Name NETWORK INVESTMENT HOLDINGS PTY LTD CITICORP NOMINEES PTY LIMITED HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED J P MORGAN NOMINEES AUSTRALIA PTY LIMITED 3RD WAVE INVESTORS PTY LTD CERTANE CT PTY LTD BNP PARIBAS NOMS PTY LTD CERTANE CT PTY LTD SANDHURST TRUSTEES LTD NATIONAL NOMINEES LIMITED MR JAMES RICHARD WARBURTON MR GRAHAM WALLACE RAY SOJOURN SERVICES PTY LTD JAMPLAT PTY LTD MR JOHN ALEX RUMBLE & MRS SONJA RUMBLE RUZ PTY LIMITED SOUTHERN STEEL INVESTMENTS PTY LIMITED MRS ELIZABETH ANNE FOGARTY & MRS CAITLYN ELIZABETH EMBLEY BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD MR ANGUS CAMPBELL ROSS Number of shareholders 3,625 5,755 1,829 2,800 559 14,568 Percentage of issued shares 39.83% 10.75% 8.72% 6.66% 2.99% 1.92% 1.50% 1.50% 1.18% 0.95% 0.72% 0.72% 0.43% 0.41% 0.31% 0.26% 0.22% 0.21% 0.19% 0.19% Number of ordinary shares held 618,711,654 167,004,502 135,512,655 103,457,079 46,500,000 29,891,012 23,352,988 23,251,882 18,289,034 14,762,638 11,250,000 11,116,162 6,756,771 6,400,000 4,893,000 4,000,000 3,447,705 3,200,000 2,999,769 2,954,601 1,237,751,452 79.67% 124 Financial Statements Seven West Media Limited Annual Report 2023c. Substantial shareholders Substantial shareholders in the Company are set out below: Name Mr Kerry Matthew Stokes AC* Australian Capital Equity Pty Limited Seven Group Holdings Limited Mitsubishi UFJ Financial Group, Inc First Sentier Investors Holdings Pty Limited Substantial holding** 40.00 39.83% 39.83% 5.17% 5.17% Number of ordinary shares in substantial holding*** 621,453,734 618,711,654 618,711,654 80,311,131 80,311,131 *See Appendix 3Y for Kerry Stokes AC lodged on 11 November 2021. **Based on the number of ordinary shares on issue at 30 July 2023. ***Based on the number of shares disclosed in the relevant Notice of Change of Interests of Substantial Holder. d. Voting rights On a show of hands every member present in person or by proxy shall have one vote and upon a poll each share shall have one vote. 125 Company Information Directors Registered Office Stock Exchange Listing K Stokes AC - Chairman J Warburton – Managing Director & Chief Executive Officer Newspaper House 50 Hasler Road Osborne Park WA 6017 T Dyson D Evans C Garnsey OAM M Malone R Stokes AO M Ziegelaar Share Registry Boardroom Pty Limited Level 8 210 George Street Sydney NSW 2000 Company Secretary W Coatsworth Auditor KPMG Tower Three International Towers Sydney 300 Barangaroo Avenue Sydney NSW 2000 Australian Stock Exchange ASX code: SWM Legal Advisors Herbert Smith Freehills ANZ Tower 161 Castlereagh Street Sydney NSW 2000 126 Financial Statements Seven West Media Limited Annual Report 2023Seven West Media cares about the environment. This Annual Report is printed on environmentally responsible paper. Designed by north branding & design Seven West Media ABN: 91 053 480 845 Newspaper House 50 Hasler Road Osborne Park Perth WA 6017 T +61 8 9482 3111 F +61 8 9482 9080 sevenwestmedia.com.au 

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