A N N UA L R E P O RT Southern Cross Austereo Comparison to FY23 METRIC1 FY24 FY23 Variance Revenue $499.4M $504.3M (1.0%) Expenses (underlying) $433.2M $427.1M (1.4%) EBITDA $55.5M $73.3M (24.3%) Underlying EBITDA $66.2M $77.2M (14.3%) NPAT ($224.6) $19.1M n.m. Underlying NPAT $11.2M $21.9M (49.2%) Digital EBITDA ($10.9M) ($17.6M) 38.0% Net debt on 30 June 2024 $107.5M $105.0M ($2.5M) Free cash conversion 86.0% 82.5% n.m. Full year dividends (cps) 1.0 6.80 (5.80) Chairman’s Statement 02 Operational Review 06 Sustainability at SCA Additional Stock Exchange Information 12 92 The Board and Leadership Team Corporate Directory 20 94 Year In Review Above CEO’s Report 04 Contents Year In Review SCA maintained dominant audience shares in our core metro and regional radio and digital audio markets during FY24, despite the most recent financial year being a challenge for the industry and our company. With persistently high inflation and slowing economic conditions, broadcast advertising markets were depressed for much of the year. Group revenue of $499.4 million was 1% below FY23, and underlying group EBITDA of $66.2 million was 14.3% below FY23. Performance improved in the second half, driven by SCA’s continuing dominance of the lucrative 25-54 audiences in metro and regional radio markets, improving share of metro advertising revenue markets, strong growth in digital audio revenues, and cost discipline. We are seeing this momentum gather pace in FY25. Year In Review Despite challenging advertising market conditions, our improved financial performance in the second half has provided strong momentum into FY25. Our national leadership in the core buying demographics for men and women aged 25-54 provides our sales teams with a strong platform for continued growth into FY25. In the fast-growing digital audio sector, LiSTNR reached over two million signed-in and addressable users, with around one million of these interacting with LiSTNR monthly. This is testament not only to the range of engaging content on LiSTNR but also to the excellent and personalised user experience the platform delivers. The LiSTNR AdTech Hub is driving premium commercial returns for our advertisers and driving growing interest. The LiSTNR AdTech Hub enhances our advertisers’ ability to connect with relevant audiences on LiSTNR and other digital audio distribution platforms. Against the backdrop of inflationary pressures, we kept non-revenue- related costs to $308.4 million (excluding non-recurring items), and we are activating further meaningful and permanent cost reductions for FY25. We have re-commenced a strategic review of our non-core regional television assets and are in active negotiations with several parties with an interest in acquiring those assets. The sale of our regional television assets will enable us to focus on optimising our leading radio and digital audio assets, led by LiSTNR, HIT and Triple M. Amounts stated to be ‘underlying’ exclude the $326.1 million ($228.3 million after tax) non-cash impairment of the Broadcast Radio Cash Generating Unit (CGU) in FY24, and other significant items in both periods relating to restructuring, corporate activity, and non-recurring items. 2024 Annual Report REGIONAL REGIONAL Total FM, AM and DAB+ audience Total Hit FM and DAB+ audience Total Triple M FM and DAB+ audience Total TV reach Average monthly unique radio streamers Average monthly streaming total listening hours 8.71M* 5.80M* 4.61M* 3.29M** 1.75M*** 15.8M*** 7.27M^ 2.08M^^ Average monthly unique podcast listeners Total LiSTNR signed-up users *Source: GFK Radio 360 Ratings, Total Radio. Survey #5 2024 – Metro (FM & DAB+). Canberra, Newcastle, Gold Coast Survey #2 2024 Mon-Sun 5:30- 12mn Cume. Bundaberg, Esperance, Kalgoorlie, Bendigo #1 2021. Karratha, Mt Gambier, Coffs Harbour, Griffith, Port Hedland Broome, Wagga Wagga, Central Qld, Orange, Bunbury, Atherton, Albury, Warragul #1 2022 (FM/AM) Mon-Sun ROS Cume. Xtra Insights Survey #1 2023 Mon-Sun ROS, Cume Reach, Mt Isa, Kingaroy, Shepparton, Emerald, Mildura, Maryborough, Bendigo, Mackay, Bundaberg, Central Coast, Townsville, Cairns. Xtra Insights Survey #1 2024 Mon-Sun ROS, Cume Reach, Roma, Geraldton, Mt Gambier, Port Macquarie, Albany, Hobart, Wheatbelt, Dubbo, Mackay, Esperance, Toowoomba. **Source: Regional TAM data. Total people. 4aggs (Network 10 + Sky News Regional), WA (Network 10) and Tas (Seven Network and Network 10). Average weekly reach (1 min cume). 0200-2600. Consolidated 7. Sun-Sat. Wk 27 2023-wk 26 2024 (02/07/23-29/06/24; excl summer and Easter). Diary markets — last available survey. 0600-2400. Cen – 2007. Dar – 2011. Sgt – 2015. ***Source: Triton Metrics. ^ Source: Triton Australian Podcast Ranker, LiSTNR Sales Representation. ^^ Source: Firebase Authenticated User Counts as at 30/09/24. ^^^ Source: LiSTNR Digital Audio Network: 10M Australians per month, including LiSTNR streaming, podcasts, Soundcloud and Sonos. Year In Review | 1 Southern Cross Austereo 2 | Chairman’s Statement Chairman’s Statement I am honoured to present my first annual report to shareholders as Chair of Southern Cross Austereo, having taken over that role in March this year. I would like to start by acknowledging the shareholder journey and our disappointing performance for the past year. We recognise that we must do better to position Southern Cross Austereo as a leader in the Australian radio and digital audio markets with enhanced profitable unit economics and growth. The most recent financial year was a challenging one for our company. With persistently high inflation and slowing economic conditions, broadcast advertising markets were depressed for much of the year. Group revenue of $499.4 million was 1% below FY23, and underlying group EBITDA of $66.2 million was 14.3% below FY23. The company recognised a non-cash impairment charge against the value of broadcast radio licences of $228.3 million after tax. The impairment reflects observed market pressures, independent estimates of radio broadcast growth rates showing declines over the forecast period and a consequent reduction in long- term growth rates. We also recognised a separate and higher growth digital audio segment for the first time in FY24. We responded to these challenges with initiatives to transform our operating model to capture a larger share of available revenues while also completing our digitisation capex program and resetting our cost base, and we expect to see the benefits of these actions in future periods. 2024 Annual Report Chairman’s Statement | 3 Heith Mackay-Cruise Chair The Board decided not to pay a final dividend for FY24. While the group’s leverage remains well within our banking covenants, the Board considers that preserving cash to reduce the group’s net debt is in the best interests of shareholders. The Board expects to maintain this capital management position in FY25 while resuming payment of dividends towards the lower end of the target payout range (65% to 85% of underlying net profit after tax). During the year, we were disrupted by the non-binding indicative proposal received in October 2023 from the Consortium of ARN Media and Anchorage Capital Partners. The proposal was complex, requiring the break-up of highly integrated radio and other assets of SCA and ARN to re-allocate them to the members of the Consortium and to a new digital joint venture. Most of the consideration for SCA shareholders would have been shares in a reconstituted ARN which was difficult to value. Our Board and executive team engaged with the Consortium’s proposal for nearly seven months, only for the Consortium to withdraw its proposal in May 2024. I expressed my frustration at the time that the Consortium should have identified any potential material concerns much earlier in the process. While our management team did not lose focus on daily business activities during this process, it did mean that some business transformation initiatives were paused or slowed until the outcome of the Consortium’s proposal was known. Three longstanding Directors have retired from the Board this year. My predecessor as Chair, Rob Murray, along with Glen Boreham retired on 27 March 2024 and Helen Nash retired on 30 September. Each of them served on our Board for around nine years during which they made valuable contributions to the Board’s decision-making, as well as being active on the Board’s committees. Helen chaired the Board’s People and Culture Committee for three years, and Glen chaired the Digital Transformation Committee for a similar period. I would particularly like to acknowledge the contribution of Rob, who became Chair in the middle of the lockdowns and other challenges of the COVID-19 pandemic and led a process to refresh the Board and plan for future succession. Rob also helped drive SCA’s executive succession planning that has seen changes in the roles of CEO and several other members of SCA’s senior leadership team in the past two years. We were delighted on 1 October to welcome Marina Go as a director and as Chair of the People and Culture Committee. Marina brings experience in executive and non-executive roles across a range of listed and private companies in diverse sectors including media. As outlined in the report of our CEO, John Kelly, SCA is focused on the future. Broadcast advertising markets remain inconsistent and short, but we are well positioned to profitably grow our share of those markets while we continue to lead the local market in the high-growth digital audio sector. Our restructured commercial teams are consistently growing SCA’s share of metro radio advertising revenues, and we continue to connect advertisers to the largest radio audience in regional Australia. We have completed our major digitisation capex cycle and are seeing rewards from advertisers who can connect with targeted and addressable audiences through LiSTNR. Our regional television assets continue to operate profitably but are no longer core to our audio-focused business. Shareholders will be aware that we are in active negotiations with several parties with an interest in acquiring those assets. On behalf of the Board, I would like to thank our many stakeholders including our people, advertisers, partners, and the communities we serve around Australia for your ongoing support of SCA. In particular, I extend my thanks to you, our shareholders, for your patience and trust as we commit to delivering you improved returns in future periods. I trust you will enjoy reading our annual report. Southern Cross Austereo 4 | CEO’s Report CEO’s Report We began the most recent financial year with a focus on growing our share of available advertising markets, improving our operating efficiency, and achieving profitability with LiSTNR. After a lag in performance during the first half of the year, we achieved many of these goals and have carried positive operating momentum into the first quarter of the new financial year. Most notably, our commercial share of metro radio advertising improved every month from December 2023 to June 2024, our digital audio revenue grew by 42% year-on-year, and LiSTNR became EBITDA positive in the final quarter of the year. Our business transformation program has so far permanently removed more than $30 million from our cost base. Despite these achievements, shareholders will be acutely aware that we fell short of our revenue and profitability targets in FY24. Broadcast advertising markets were especially challenging during the first half of the year, and it is clear we need to continue to grow our share of those markets, exploit our local leadership in digital audio markets, and transform our operating model to further reduce our cost base and improve commercial returns. I am confident we have the right strategy in place to do all those things. SCA is all about audio. This includes broadcast and livestreamed radio, music streaming, and on-demand podcasts. Radio is a resilient and powerful medium. The Infinite Dial Australia study in June 2024 found that 81% of Australians aged 12+ listen to radio each week, compared to 77% who watch free-to-air television. SCA’s national Triple M and Hit Networks have large and loyal audiences in the segments that are most attractive to advertisers. In the most recent official metro radio survey in August 2024, SCA’s metro stations recorded a total cumulative audience of 5.881 million listeners (including DAB+). Our national Drive show on the Hit Network, Carrie and Tommy, was number one nationally in early Drive and, for the fourth survey in a row, number one in Melbourne and Brisbane. The Fox was the most listened-to station in Australia and, for the sixth survey in a row, the most listened-to station in Melbourne. B105 was the number one FM station in Brisbane for the fifth survey in a row, Triple M was the number one FM station in Adelaide and its Breakfast show topped the survey for the twelfth consecutive time. SCA is acutely focused on the audiences that matter to our advertisers. We provide compelling content to our audiences and work with our advertisers to provide meaningful commercial outcomes for them and for SCA. The audiences that matter to our advertisers in metro radio are the key 25-54 Men, Women and overall buying demographics, with over 70% of agency briefs targeting these segments. For the last three years (25 consecutive surveys), our Networks have recorded the largest metro radio audiences in these segments. Since changing our commercial leadership and structures in 2023, we are increasingly converting our dominance of these audiences towards a corresponding share of advertising revenues. As mentioned earlier, we grew our commercial share of metro radio advertising in every month from December 2023 to June 2024. SCA has unrivalled reach in regional radio markets. Our Triple M and Hit Network stations, along with partner radio stations for whom we provide national sales representation, connect advertisers to 3.56 million listeners in regional Australia. This scale is what matters to national advertisers in regional Australia. Our LiSTNR digital audio ecosystem is our growth engine. Just three years since launch, it has become the leading local player in the fastest growing advertising segment in Australia. 2024 Annual Report CEO’s Report | 5 John Kelly Chief Executive Officer and Managing Director The 2024 Infinite Dial study found that 77% of Australians aged 12+ listen to digital audio each week, and 27% listen to livestreamed radio, up from 15% in 2022. The study also found that 48% of Australians aged 12+ listen to podcasts each month, up from just 25% in 2020. We are seeing similar and encouraging growth patterns on LiSTNR. We now have over two million signed-up users, over half of whom interact with LiSTNR each month. Stream starts on LiSTNR grew 17% and time spent listening grew 7% during FY24. This is testament not only to the range of engaging content on LiSTNR but also to the excellent and personalised user experience delivered by LiSTNR. This growth in audience, coupled with our strategic investment in the LiSTNR AdTech Hub, is driving inquiry from advertisers willing to pay a premium to connect their messages to targeted and addressable audiences. The LiSTNR AdTech Hub is now included in over 20% of digital audio campaigns. LiSTNR achieved revenues of $35 million in FY24 with year-on- year growth of 27% in the first half and 57% in the second half, LiSTNR delivered positive EBITDA in the final quarter of the year and is continuing that trajectory. With our major capex program now complete, we forecast LiSTNR to be cash flow positive in FY25. Put simply, SCA’s LiSTNR is Australia’s largest and fastest growing local operator in the fastest growing segment in Australian media. Our regional television business dragged on our results again. Television revenue declined by 8.7% to $97.5 million, and EBITDA decreased by 28.9% to $13.3 million, although these declines slowed in the second half of the year. We maintained tight cost controls but are exposed to CPI cost escalation in broadcasting transmission and playout contracts. We will actively progress opportunities to divest our television assets in the coming months. I am excited about the opportunities ahead and confident that we will deliver improved financial performance in FY25 and beyond. We will continue to transform and optimise our audio operations to drive efficiency with further meaningful and permanent reductions to our cost base. Our Triple M and Hit radio networks have strong content and engaged audiences, and a growing share of commercial returns. LiSTNR has a high quality and diverse range of livestreamed and on-demand podcast content and sophisticated ad-tech capability to drive commercial returns for advertisers. With our major capex cycle complete, we will improve the conversion of our revenue to earnings and cash flow to de-leverage our balance sheet and provide returns for shareholders. Finally, thank you to all our shareholders, advertisers, communities and employees for your ongoing support. Southern Cross Austereo 6 | Operational Review Operational Review SCA’s mission is to entertain, inform and inspire Australians, anytime, anywhere. In Triple M, Hit and LiSTNR, we have powerful brands with loyal audiences. We aim to diversify and grow those audiences in segments that matter to advertisers so that we earn a higher share of the available advertising revenue. Operational Review — Radio Radio revenue decreased by 1.6% to $366.6 million in FY24, due principally to an industry-wide decline of over 3% in metro markets. The impact on SCA of this decline was mitigated by the resilience of our regional radio operations, which grew revenue by 0.8% for the year. The impact was also mitigated by the improving performance of our metro sales team, which grew our commercial share of metro radio advertising in every month from December 2023 to June 2024. The audience that matters to advertisers in metro radio is people aged 25-54. Over 70% of agency briefs target that audience, whether focused on men, women, or all people. We build our metro radio shows with an acute focus on that audience. Our Hit Network stations focus on women aged 25-54, and our Triple M stations focus on men aged 25-54. In metro survey 5/2024, SCA’s Networks recorded the largest national audience in the key 25-54 buying demographic for the 25th consecutive time Our share of this audience grew in each survey over the past 12 months. Individual show highlights included the consistent leading performance of Carrie & Tommy, our national Drive show on the Hit Network, and our Breakfast shows on B105 in Brisbane, Triple M in Adelaide, and The Fox in Melbourne, which is Australia’s most listened-to radio station. 45% 25% 27% 34.1% 35.1% 36.91% 36.0% 39.2% 38.5% 37.4%3 7.6% 29% 31% 33% 35% 37% 39% 41% 43% S5 S6 S7 S8 S1 S2 S3 S4 SCA Network Commercial Audience Share M-Sun 0530-2400 Metro Markets (SMBAP) SCA People 25-54 SCA People 25-54 PCP 30% 20% Source: SCA Metro Radio Revenues / CRA Metro Radio Market Size 1 H2 Metro Radio Revenue Market Share 1 FY23 FY24 2024 Annual Report Operational Review | 7 In Sydney, Mick and MG have steadily built their Triple M Breakfast audience over the past two years, particularly for men aged 25-54, while 2DayFM continues to present opportunities for growth. We recently farewelled Hughesy, Ed and Erin after three-and-a-half years of waking up Sydney, and 2DayFM’s listeners now have Jimmy & Nath for Breakfast, while Mike E & Emma have taken over national shifts on Nights during the week and Breakfast on the weekend. Both shows are well known to Sydney and national audiences, and we’re looking forward to building their success. Sport continues to be part of Triple M’s DNA, and we have been delighted with the audiences for Triple M’s coverage of AFL and NRL in the 2024 season. In metro survey 5/2024, Triple M had the largest weekend radio audiences for AFL and NRL. And, after an outstanding international cricket season in 2023/24, we were pleased to reach agreement with Cricket Australia to extend our coverage of international cricket in Australia until 2031. The breadth of SCA’s networks distributing radio and digital audio content to our audiences is a key differentiating factor for advertisers. SCA has 10 metro radio stations and 78 regional radio stations; in both cases, more than any other network. In metro markets and some large regional markets, our Triple M and Hit Networks also offer a suite of DAB+ music-focused stations. These provide more choice for music fans and incremental audiences for our advertisers. And all these stations are available around Australia on our LiSTNR app and website. SCA has unrivalled scale and reach in regional radio markets, which we call Boomtown. Our Triple M and Hit Network stations, along with partner radio stations for whom we provide national sales representation, connect advertisers to 3.56 million listeners in regional Australia. With the addition of our representation of the ACE Radio network, the reach of SCA’s regional audience has grown 25% in the past five years. This scale, and the associated buying efficiency, is what matters to national advertisers in regional Australia. 1. GfK Radio 360 Metro Survey #5 2024, P10+, Total Radio, Market Share %, Mon-Fri 3-6pm. 2. GfK Radio 360 Metro Survey #5 2024, all regional and provincial markets relative to this date, P10+/P25-54, Total Radio, Cume Reach, Mon-Fri 3pm-6pm (metro and provincial)/Mon-Fri 4-7pm (regional). 3. GfK Radio 360 Metro Survey #6 2023 vs Metro Survey #5 2024, P 10+, Total Radio, Market Share %, Mon-Fri 3pm-6pm. 4. GfK Radio 360 Melbourne Survey #5 2024, P25-54, Total Radio, Market Share %, Mon-Fri 5:30am-9am. 5. Based on average Cumulative Audience for 12 months, GfK Radio 360 Melbourne Survey #6 2023 – Melbourne Survey #5 2024, P10+, Total Radio, Cumulative Audience #, Mon-Fri 5:30am-9am. 6. GfK Radio 360 Brisbane Survey #5 2024, P10+, Total Radio, Market Share %, Mon-Fri 5:30am-9am. 7. GfK Radio 360 Brisbane Survey #5 2024, P25-54, Total Radio, Market Share %, Mon-Fri 5:30am-9am. 8. GfK Radio 360 Brisbane Survey #6 2023 vs Brisbane Survey #5 2024, P10+, Total Radio, Market Share %, Mon-Fri 5:30am-9am. 9. GfK Radio 360 Adelaide Survey #5 2024, P10+, Total Radio, Market Share %, Mon-Fri 5:30am-9am. 10. GfK Radio 360 Adelaide Survey #5 2024, P5-54, Total Radio, Market Share %, Mon-Fri 5:30am-9am. 11. GfK Radio 360 Adelaide Survey #2 2023 – Adelaide Survey #5 2024, P10+, Total Radio, Market Share %, Mon-Fri 5:30am-9am. Carrie & Tommy Metro and National #1 breakfast show in Melbourne P25-544 Most listened-to breakfast show in Melbourne in the past 12 months P10+5 Highest drive show cume nationally P25-54: 1,505,400 and P10+ 2,693,7002 Fifi, Fev & Nick Stav, Abby & Matt Roo, Ditts & Loz #1 breakfast show in Adelaide P10+9 #1 breakfast show in Adelaide P25-54+10 breakfast show in Brisbane P10+6 #1 breakfast show in Brisbane P25-547 #1 growth YoY P10+8 +19% metro drive show 3-6pm P10+1 #1 growth YoY P10+ metro share3 +13.3% 12 in a row since S2 202311 Southern Cross Austereo 8 | Operational Review OWNED AND REPRESENTED RADIO CAIRNS CAIRNS REBEL & BREEZE REBEL & BREEZE CENTRAL / NORTH QLD CENTRAL / NORTH QLD REBEL & BREEZE REBEL & BREEZE CENTRAL / NORTH QLD CENTRAL / NORTH QLD REBEL & BREEZE REBEL & BREEZE DARLING DOWNS / BORDER DARLING DOWNS / BORDER MAREEBA MAREEBA MT ISA MT ISA DARWIN DARWIN BROOME BROOME KARRATHA KARRATHA CARNARVON CARNARVON GERALDTON GERALDTON REMOTE WA REMOTE WA KALGOORLIE KALGOORLIE MERREDIN MERREDIN NORTHAM NORTHAM MANDURAH MANDURAH PERTH PERTH NARROGIN NARROGIN COLLIE COLLIE KATANNING KATANNING BRIDGETOWN BRIDGETOWN BUSSELTON BUSSELTON BUNBURY BUNBURY ESPERANCE ESPERANCE ALBANY ALBANY PORT PORT HED HEDLAND LAND TOWNSVILLE TOWNSVILLE EMERALD EMERALD LONGREACH LONGREACH CHARLEVILLE CHARLEVILLE CHARTERS CHARTERS TOWERS TOWERS MACKAY MACKAY ROMA ROMA ROCKHAMPTON ROCKHAMPTON GLADSTONE GLADSTONE BUNDABERG BUNDABERG KINGAROY KINGAROY MARYBOROUGH MARYBOROUGH SUNSHINE COAST SUNSHINE COAST TOOWOOMBA TOOWOOMBA WARWICK WARWICK COFFS HARBOUR COFFS HARBOUR NEWCASTLE NEWCASTLE GOSFORD GOSFORD SYDNEY SYDNEY CAMPBELLTOWN CAMPBELLTOWN WOLLONGONG WOLLONGONG CANBERRA CANBERRA WAGGA WAGGA WAGGA WAGGA PORT MACQUARIE PORT MACQUARIE BREEZE NSW BREEZE NSW DUBBO DUBBO ORANGE ORANGE ALBURY ALBURY HOBART HOBART MELBOURNE MELBOURNE FLOW FLOW OUTBACK OUTBACK FLOW FLOW CENTRAL CENTRAL FLOW FLOW SOUTH SOUTH EAST EAST FLOW NSW FLOW NSW FLOW VIC FLOW VIC FLOW VIC FLOW VIC FLOW VIC FLOW VIC ADELAIDE ADELAIDE LIMESTONE COAST LIMESTONE COAST SHEPPARTON / MT BULLER SHEPPARTON / MT BULLER WARRAGUL WARRAGUL TRARALGON TRARALGON GRIFFITH GRIFFITH MILDURA MILDURA BENDIGO BENDIGO BRISBANE BRISBANE REBEL & BREEZE LOGAN / HINTERLAND REBEL & BREEZE LOGAN / HINTERLAND STANTHORPE STANTHORPE REBEL & BREEZE DARLING REBEL & BREEZE DARLING DOWNS / BORDER DOWNS / BORDER GOLD COAST GOLD COAST SCA REPRESENTED SCA REPRESENTED STATION STATION SCA REPRESENTED REGION SCA REPRESENTED REGION OVERLAP IN COVERAGE OVERLAP IN COVERAGE 2024 Annual Report Operational Review | 9 Operational Review – LiSTNR Our audiences and advertisers expect us to serve them in a digital world. An exciting outcome of our investment in LiSTNR over the past several years was LiSTNR delivering positive EBITDA in the final quarter of FY24. This was driven by ongoing strong revenue growth: SCA has grown digital revenue at a compound annual growth rate of 34% since FY20. Coinciding with launch of the LiSTNR AdTech Hub, digital revenue grew 57% year-on-year in the second half of FY24. LiSTNR includes livestreams of our Triple M and Hit Network radio shows and live sports coverage, and a diverse range of owned and operated original and radio podcasts created by LiSTNR in addition to supplied podcasts from global partners Wondery, NPR, the BBC and Sirius XM and domestic partners Schwartz Media and DM Podcasts. The LiSTNR audience network reaches approximately seven million listeners on a monthly basis. Source: Australian Podcast Ranker, All Australian Top 200 Podcasts – July 2023 to May 2024. Southern Cross Austereo 10 | Operational Review Over two million people have chosen to sign in to the LiSTNR app, allowing us to gain first-party data and create an addressable audience. This provides us with an understanding of the audience profile and their listening habits and strengthens sell-through with advertisers and known audience for content creation. What matters to advertisers in digital audio is the ability to target their messages with more certainty to relevant audiences. An important part of SCA’s digital audio strategy is to build not only the quality and diversity of content available on LiSTNR but also the range of digital audio content for which we provide sales representation. Our podcast sales representation network is important because it includes consumption of LiSTNR original and partner podcasts on all podcast platforms in Australia (including, for example, Apple Podcasts, Spotify, or Amazon Music). This network maximises the reach of LiSTNR podcasts for our creators, partners and advertisers. No matter where you hear an advertisement in a LiSTNR original or partner podcast in Australia, the advertisement will have been sold by our LiSTNR sales team. LiSTNR has consistently been Australia’s number one podcast sales representation network as measured monthly by the Triton Australian Podcast Ranker. In August 2024, the LiSTNR podcast sales representation network had over 7 million listeners, providing highly meaningful scale for our advertisers. Although we benefit from advertising impressions on all Australian podcast platforms, it is important over time for us to grow the on-platform audience for LiSTNR original and partner podcasts, because on-platform listening provides deeper first-party data and insights to help advertisers connect to addressable and targeted audiences at scale. Advertisers will pay a premium to target their messages to known digital audiences, rather than mass but unknown broadcast audiences. In early 2024, we completed the major phase of investment to improve the user experience on LiSTNR and our data analytics capabilities to optimise the services we provide to listeners, media agencies and advertisers. For users, this upgrade streamlined navigation, simplified search, and enhanced library and personalisation features to increase their frequency of use and the time they spend on LiSTNR. For advertisers, the upgrade enabled us to launch the LiSTNR AdTech Hub, an advertising technology suite of services that facilitates personalisation and targeting, dynamic creative optimisation, an Australian based customer data platform, ad server and a range of first- party data solutions and services. Through a partnership with DataCo Technologies, we have added a data cleanroom solution. This allows advertisers to integrate their own databases with LiSTNR’s 2 million first-party database and drive campaign effectiveness, while ensuring security and privacy compliance. These innovations have seen the LiSTNR AdTech Hub now being included in over 20% of digital audio campaigns. 2024 Annual Report Operational Review | 11 Operational Review – Television Regional television revenues continued to contract during FY24, driven especially by weakness in the national advertising market. SCA’s television revenue declined by 8.7% to $97.5 million, reflecting an 11.5% drop in national revenue and a 9% decline in local revenue. Our television EBITDA of $13.3 million was down by 28.9% on the previous year. We continue to broadcast Network 10 programs in regional Queensland, southern New South Wales and Victoria and provide national advertising sales representation for Network 10 programming in all Australian States and Territories, offering national advertisers a one-stop shop. We also broadcast and provide sales representation for Seven Network programming in Tasmania, Darwin and Remote Central and Eastern Australia and for Seven and Nine Network programming in Spencer Gulf and Broken Hill. As announced in August 2024, with the conclusion of recent corporate activity, we have re-commenced the strategic review of our regional television assets. As a result of that review, we are in active negotiations with several parties with an interest in acquiring those assets. The sale of our regional television assets will enable us to focus on optimising our leading radio and digital audio assets, led by LiSTNR, HIT and Triple M. *Note this map displays SCA owned television networks, joint ventures, and television products sold on behalf of non SCA networks. SOURCE: Regional TAM. 2022. Universe Estimates & Diary Markets. Last available survey. Mildura – 2003. Griffith – 2003. Mildura – 2003. Griffith – 2003. Central – 2007. Darwin – 2011. SGT – 2015. QUEENSLAND NETWORK 10 SOUTHERN NEW SOUTH WALES NORTHERN NEW SOUTH WALES VICTORIA SOUTH AUSTRALIA TASMANIA DARWIN CENTRAL WESTERN AUSTRALIA MILDURA GRIFFITH NETWORK 10 SKY NEWS REGIONAL NETWORK 10 SKY NEWS REGIONAL SKY NEWS REGIONAL SKY NEWS REGIONAL NETWORK 10 SGT SEVEN NETWORK TASMANIAN DIGITAL TELEVISION SEVEN NETWORK SEVEN NETWORK WEST DIGITAL TELEVISION MILDURA DIGITAL TELEVISION SKY NEWS REGIONAL DARWIN DIGITAL TELEVISION CENTRAL DIGITAL TELEVISION BY REGION MOUNT GAMBIER/RIVERLAND NATIONAL TELEVISION COVERAGE Southern Cross Austereo 12 | Sustainability at SCA Sustainability at SCA Connecting Communities We accept responsibility to be a trusted source of information and entertainment for our communities. We keep communities up to date on issues that matter most to them, provide local skilled jobs, provide local advertising opportunities, and support local businesses, events, charities, and community activities. A few examples of our active involvement with local communities are outlined below. Shepparton Foodshare Donation Drive Triple M Shepparton held a food drive live from our station to help Shepparton Foodshare. Food insecurity in Australia is growing, and SCA was proud to support Shepparton Foodshare to provide nutritious and culturally appropriate food for those in need across the Goulburn Valley. Shepparton Foodshare Executive Officer, Glenn Peric said, “This is an easy way for you to help spread some festive cheer to those less fortunate in your own community and the radio station have made it easy to donate.” Bendigo and Ballarat Membership of local chambers of commerce and participation in their annual awards provides valuable networking and business development opportunities. SCA is a corporate sponsor of Commerce Ballarat and Be.Bendigo, among other chambers of commerce, which provides opportunities to showcase, celebrate and support local businesses and contribute to our cities. As a sponsor of Be.Bendigo, SCA had an onstage presence at the annual gala dinner and awards ceremony. Our audiences, employees, advertisers, communities and shareholders expect us to prosper and deliver positive outcomes for them in a responsible way. Sustainability is therefore a core business principle for SCA. We reach 95% of Australians through our radio, television and digital assets. 2024 Annual Report Sustainability at SCA | 13 Hobart In 2022, the Triple M Hobart team created a weekly segment to spotlight the work of our charity partner, Make-A-Wish. Jordan Miller was a ‘Wish Kid’ and, with remarkable honesty and grace, shared his experience of being diagnosed with a brain tumour. Later in that year, Jordan completed an exceptional work experience with SCA. Nearly two years later in March 2024, we were delighted to welcome Jordan to a permanent role as our Hobart receptionist. Whyalla SCA is a proud partner of Whyalla Business and Tourism. At the annual awards dinner, our local Senior Account Manager, Candice True, presented awards to the winners of the Most Outstanding Business of the Year and New Business of the Year. Mt Gambier Ac.care has a mission for all country people to have a safe home, enough money to live on and strong, positive relationships. They serve the country communities of the Limestone Coast, Riverland, Murraylands, Adelaide Hills and Fleurieu Peninsula. The Triple M and SAFM Limestone Coast 2024 Blanket Appeal secured donations of more than 120 blankets and other winter warmers to help ac.care support vulnerable people coping with cold winter conditions. Darwin Our 7 Darwin television office is a proud sponsor of McHappy Day, raising money for Ronald McDonald House Charities, which support families with seriously ill children. In November 2023, Anthony Harrison and Kym Menzies from our 7 Darwin team volunteered to collect donations at the local McDonald’s drive-through. Southern Cross Austereo SCA Embrace is our national charity framework which aims to make a substantial difference to our Embrace partners by using our media platforms to grow awareness of their work and amplify their messages. We provide support through radio, digital and television advertising; research support; event and meeting spaces; on-air interviews; and staff volunteering. We partner nationally with selected charities for two-year cycles, and our regional offices partner annually with charities in their communities. We continue to be very proud of SCA Embrace, a program that has now provided more than $237 million of in-kind advertising to charities over the past seven years in both metro and regional areas. Over the period from July 2021 to April 2023, SCA has supported 33 different local charities in our regional markets. We completed our two-year partnerships with Foodbank Australia and Make-A-Wish on 31 December 2023 and kicked off new partnerships with Cancer Council and Endometriosis Australia on 1 January 2024. During FY24, we provided in-kind support to these partners of over $46 million: Testimonials Endometriosis Australia CEO, Maree Davenport “Endometriosis Australia is extraordinarily grateful to SCA, and our Embrace partnership will amplify the life-defining, painful symptoms of endometriosis, which affects one in seven females and those assigned female at birth (AFAB), based on those diagnosed by 44 to 49 years of age. “It is estimated that 14% of girls, women and AFAB in Australia live with endometriosis. The average time between the onset of symptoms and diagnosis is still between six and eight years, with access to surgical treatment to diagnose and manage the condition taking even longer. With SCA’s national reach across Australia, in rural and regional areas where those living with endometriosis struggle to find timely and appropriate medical care, Endometriosis Australia will change the narrative and SCA will help change the lives of those with pelvic pain and endometriosis.” Naomi Watson, Director, Marketing and Fundraising, Cancer Council “We are delighted to be partnered with SCA through the Embrace program and have been thrilled with the results to date – after just six months, the SCA team have secured over $7.5 million of value to Cancer Council across Australia, an incredible result and one that will have a huge impact in raising awareness of our vital information and support services, letting people with cancer know that we are here for them. Not only this, but the partnership has also allowed us to profile our fundraising campaigns such as Australia’s Biggest Morning Tea and Daffodil Day, meaning we can continue to raise funds to ensure the continuity of these services into the future. Thank you so much SCA team, you have been a joy to work with and we are looking forward to continuing to do so for the remainder of the partnership.” Foodbank Australia CEO, Brianna Casey “The media partnership with SCA Embrace has been a game changer for Foodbank. Now in our second year of the partnership, we can look back and see tangible results from things such as the monthly CSA which has amplified our key messages or boosted fundraising appeals. Having this invaluable resource at the tips of our fingers over the past 18 months has allowed us to grow our brand, raise awareness on food insecurity in Australia and educate listeners on what we do, the impact we have and how we are helping the many, many Aussies doing it tough right now as we all battle against the cost-of-living crisis. “We truly thank the entire SCA team, right around the country, for supporting the work we do. SCA has given us the voice we needed during times of disasters, times when we needed more support, or simply the megaphone to direct people, who have never had to ask for food relief before, where to go to find food. Thank you for giving us a nationwide voice.” Make-A-Wish Australia CEO, Sally Bateman “The opportunity to be part of the SCA Embrace program has been a true highlight again this year. The amazing support from the SCA team and exposure across metro and regional Australia has helped to shine a bright light on our wish program and raise important awareness for Make-A- Wish about critically ill kids and the lasting impact of wishes. Over the past 12 months, we’ve seen a record number of applications into our program. We are delighted to be currently supporting our largest ever number of kids on their wish journey and to be delivering a growing number of wishes every day to critically ill children. “We really can’t thank SCA enough for everyone’s wonderful support. We remain enormously grateful for the team’s help not only in providing a platform for our wish families and kids to share their important stories, but also in connecting us to a new generation of givers. The cross-platform support of our signature fundraising events – Wear it Blue to Make Wishes Come True, and Hungry Jack’s Wishmaker Month, will allow us to create more incredible experiences for the wish kids it’s our privilege to support and ensure there’s moments to look forward to, moments that can be treasured forever by a growing number of Australian families.” 14 | Sustainability at SCA SCA Embrace Foodbank Australia $13.0 million Make-A-Wish $17.7 million Cancer Council $7.9 million Endometriosis Australia $7.8 million 2024 Annual Report Sustainability at SCA | 15 State Market Charity name ACT Canberra Ronald McDonald House NSW Albury The Men’s Table Central Coast Coast Shelter Dubbo Veritas House Orange Orana Support Services Wagga Wagga Wagga Women’s Health Centre QLD Cairns Stay In The Fight Gold Coast Gold Coast Community Fund Mackay Trudy Crowley Foundation Ltd Cairns Cairns Couch Ltd Rockhampton / Gladstone / Emerald Fitzroy Community Hospice Sunshine Coast IFYS Toowoomba Sunrise Way Townsville Fuel For Schools Ltd TAS Hobart Beacon Foundation VIC Ballarat Foodbank Gippsland Foodbank Mildura Sunraysia Cancer Resources Shepparton Shepparton Foodshare Inc Regional Embrace In FY24, our regional markets delivered value-in-kind of over $1 million in aggregate to the following local charities. We did not have any SCA Embrace partners in our regional Western Australian markets in FY24; however, we have already partnered with local charities in Geraldton, Karratha, Port Hedland and Esperance in FY25. Southern Cross Austereo 16 | Sustainability at SCA Thriving People Our people are what make SCA one of Australia’s leading media companies. From fostering a collaborative and supportive culture to keeping our team safe, healthy and well, we are committed to supporting every member of our team to thrive. Our values state our people’s expectations for themselves and each other and guide our day-to-day decisions and behaviour towards achieving success for SCA. We conduct periodic PulseCheck surveys to capture employee sentiment and identify trends and correlate results with business changes. We report to employees on the feedback from each survey and the initiatives to be implemented in response. 2024 Annual Report 2 ‘40:40:20’ refers to a diversity of gender ratio in workplace leadership: 40 percent women, 40 percent men and 20 percent any gender. Sustainability at SCA | 17 Employment status Female Female % Male Male % Total Full-Time Permanent 723 52% 665 48% 1,388 Part-Time Permanent 95 92% 8 8% 103 Fixed Term 72 73% 26 27% 98 Casual 154 47% 174 53% 328 Total 1,044 54% 873 46% 1,917 31 March 2024 Board target for 30 June 2027 Board of directors Total % Female % Male % Female Non-exectuive directors 4 50% 50% 50% All directors 5 40% 60% 50% 31 March 2024 Board target for 30 June 2027 Permanent employees Total % Female % Male % Female Management 311 45.7% 54.3% 50% SCA Leadership Team 7 29.0% 71.0% 40% Senior Management 23 30.4% 69.6% 50% Manager 281 47.3% 52.7% 50% Employee 1,278 58.5% 41.5% 50% SCA Total 1,589 56.0% 44.0% 50% Age Female Male Total Total % <25 119 75 194 10% 25 to <35 404 295 699 36% 35 to <45 304 261 565 29% 45 to <55 154 141 295 15% 55 to <65 55 89 144 8% >65 8 12 20 1% Total 1,044 873 1,917 100% Diversity and inclusion In FY24, we launched a three-year Diversity and Inclusion Strategy with the first year’s activities focused on building awareness among our leaders of diversity and inclusion considerations, including the benefits of diverse teams and the risks of unconscious bias in decision-making, developing a calendar of events to demonstrate our support for diverse communities, and updating policies and systems to include non-binary gender identification options. For Harmony Week, we encouraged our markets to celebrate cultural diversity at a local level, and we saw almost all offices participate through activities such as hosting multicultural lunches or morning teas and creating space for employees to share their cultural backgrounds. For International Women’s Day, we announced that SCA will become Australia’s first accredited ‘Endo Friendly’ employer. We are working towards this accreditation with our Embrace partner, Endometriosis Australia. In June 2024, we held a Masterclass to educate our people on the history and significance of Pride Month, the meaning of gender identity and the importance of allyship. We have introduced the option for employees to include their gender pronouns in email signatures as a sign of allyship and to avoid mistaken gender assumptions. In FY25, we will implement a new human resources information system that will enable us to improve collection of data about our workforce, to set diversity targets beyond gender, to establish programs to grow and support under-represented groups and to support our people to do their best work for SCA. In April 2022, SCA became a signatory to the 40:40 Vision, strengthening our commitment to achieving gender balance (40:40:20)2 in executive leadership by 2030. The following tables summarise the composition of SCA’s workforce on 31 March 2024, which is the reporting date for the Workplace Gender Equality Agency (WGEA). We do not yet have reliable information about employees who do not identify as male or female, although the information below excludes the employees who have informed us of such identity. Southern Cross Austereo 18 | Sustainability at SCA Gender pay gap In February 2024, WGEA for the first time published data about the gender pay gap in individual Australian private sector employers with over 100 employees. WGEA’s target is for employers to have a median gender pay gap of between -5% and +5%. WGEA found that 30% of employers fall into this range, while the median gender pay gap in Australia is 19%. WGEA found that SCA had a median gender pay gap of 5.6% for base salary and 5.9% for total remuneration. While these results were just outside WGEA’s target range, they compared favourably to the results in our broadcasting industry group which had median gender pay gaps of 25.3% for base salary and 27.2% for total remuneration. Bringing our gender pay gap into WGEA’s target range is an objective of our Diversity and Inclusion Strategy. Workplace health and safety SCA’s Board has adopted a Workplace Health and Safety Policy confirming that SCA has no tolerance for harm, either physical or psychological, to our employees or other people because of SCA’s operations. Conducting stunts, events and promotional activities is an important part of our commercial activities. Our teams prepare specific risk assessments for these activities to ensure appropriate steps are taken to mitigate the associated risks. Selected WHS statistics for the most recent 12 months ended 31 March are provided below. The number of lost days increased year-on-year principally due to four psychosocial claims that resulted in lengthy absences from work. In response to these claims and the Respect@Work recommendations arising from the National Inquiry into Sexual Harassment in Australian Workplaces, we refreshed our approach to managing psychosocial hazards in our workplace. Some of the risks we identified in our business were: • Job demands associated with short deadlines and reductions in the size of our workforce • Remote or isolated work, both in regional and remote offices but also associated with the increasing take-up of working from home opportunities • Harmful behaviours, particularly at events where alcohol is consumed • Traumatic events or materials, such as in news and investigative reporting and in dealing with distressed callers to late night radio shows. We have updated the resources available to our teams to manage these risks. These resources include bespoke training for location managers, additional mental health resources through our Employee Assistance Program provider, and business-wide webinars focused on strategies for resilience, recovery and recharging. Learning and development We are committed to providing our leaders and teams with meaningful and impactful learning opportunities that facilitate growth, development and expertise. After consulting widely with leaders, we have developed a learning and development strategy including the following themes: • Leadership development for functional managers to support internal succession planning • Negotiating and influencing skills for sales and other teams • Creative thinking and storytelling for sales and content teams. Our curriculum includes a Mini MBA program for 50 participants selected by application and facilitated by the Australian Institute of Management; access for all our people to LinkedIn Learning; externally facilitated team dynamics, negotiation, sales and executive coaching programs; creative thinking and storytelling workshops; an internal mentoring program; and bootcamps covering fundamental skills in content creation and sales. Optimising productivity After corporate instability and challenges in advertising markets during the year, we observed a reduction in employee engagement, job security and attendance in our offices, with potential adverse implications for productivity. In recent months, we have implemented a range of actions to address these concerns including business-wide presentations and workshops on our strategy, review of our employee benefits suite and launch of our revitalised learning and development strategy. On 1 September 2024, we launched a three-month trial of a nine-day fortnight in three locations. The success of the trial will be measured against target improvements in sales, employee turnover, office attendance, productivity, and employee engagement survey results. After review of the results of the trial, a decision will be made whether to proceed with a wider roll-out of a nine-day fortnight. Acknowledging the importance to our business of collecting and using data about our audiences, advertisers, employees and suppliers, and their use of our systems and services, we aim to earn their trust for us to responsibly collect, manage and secure the personal information and other confidential data they share with us. We have comprehensive measures to provide a secure and resilient technology environment, coupled with a commitment to continuous improvement. The first layer of protection is to collect and retain only the data we need for our business purposes. Controlling the volume and nature of the data we collect, and securely destroying or anonymising the data we no longer need, reduces the risk of the data being attractive to cyber hackers. We measure our cyber security posture against a range of metrics and report on our performance to each meeting of the Board’s Audit and Risk Committee. Significant achievements during FY24 included material progress in rationalising the number of our computer servers, closing all findings from regular penetration testing, enhancing cyber risk awareness training for employees, and regularly assessing the cyber security maturity of contractors and software vendors that require access to our systems. Like many Australian businesses, our Australia-wide radio networks were affected by the CrowdStrike incident on the afternoon of 19 July 2024. Our crisis management and technology teams responded quickly to ensure that night’s AFL and NRL matches went live on air as scheduled, while all stations were back on air within 22 hours and with negligible loss of advertising revenue. The incident, while challenging and providing valuable lessons, demonstrated the robustness of our technology infrastructure, teams, and response capability. Measure 31 March 2024 31 March 2023 Number of lost time injuries 7 5 Number of injuries requiring medial attention 11 17 Number of injuries requiring basic first aid attention 18 6 Fatalities 0 0 Lost days 299 107 Lost time injury frequency rate 2.19 1.55 Data Management, Use and Security 2024 Annual Report Sustainability at SCA | 19 SCA is committed to playing our part to address climate change. This is reflected in our Climate Change Policy which sets a foundation for building our understanding of the risks and opportunities presented by climate change and how we will respond to those risks and opportunities. For the past two years, we have compiled a greenhouse gas (GHG) emissions inventory for our business. In FY24, 79% of SCA’s total GHG emissions of 26,255 tCO2-e were in Scope 3. The table below summarise SCA’s GHG emissions inventory for FY24 with a comparison to FY23. Our GHG emissions in FY24 were lower than in FY23 by 6.2%. In some categories, year-on-year changes have resulted from improved measurement, for example where we have been able to move from reliance on applying emissions cost factors to general ledger expenditure to calculation of actual energy use. Notably, we recorded materially higher Scope 2 emissions from purchased electricity. We will investigate in the new year whether this was a result of improved measurement or other factors in the way we conduct our business. Because of the corporate activity during the year, we deferred some planned initiatives to support enhanced measurement and recording of our GHG emissions and to reduce those emissions. Had the corporate activity proceeded, the acquirers would have been responsible for implementing appropriate initiatives for these purposes. We will revisit those initiatives in the new year. Mandatory climate-related financial reporting Australia’s first mandatory climate reporting regime will come into effect on 1 January 2025, and the Australian Accounting Standards Board has produced an exposure draft of the Australian Sustainability Reporting Standards setting out the detail required to be included in the climate statements produced by reporting entities. During the year ahead, we will monitor the issue of the Australian Sustainability Reporting Standards to be well prepared to commence climate-related financial reporting when required and will consider voluntary disclosures in the meantime. Environmental compliance and management There were no environmental compliance breaches during FY24. Climate and Environment GHG emissions tCO2-e GHG Protocol Categories FY23 FY24 Variance Scope 1 Transport fuel consumption 428.74 369.05 -59.69 Stationary fuel consumption 0.61 1.97 1.36 Scope 2 Purchased electricity 3,857.43 5,066.10 1,208.68 Scope 3 Purchased goods and services 25 340 88.44 Professional services 3,657.13 4,453.20 796.08 Capital goods 4,618.36 3,766.34 -852.02 Fuel and energy related activities 589.30 686.80 97.50 Water and waste 2,679.95 46.58 -2,633.38 Business travel 625.32 642.88 17.55 Employee commuting and WFH 32.11 32.11 — Upstream leased assets 11,036.19 10,574.07 -462.11 Use of sold products 220.43 276.47 56.04 TOTAL 27,997 26,255 -1,742 79% 19% 2% Scope 1 Scope 2 Scope 3 GHG Emissions tCO2-e Southern Cross Austereo 20 | Board of Directors Board of Directors Carole Campbell Independent Director Appointed: 1 September 2020 Most recently elected by shareholders: 27 October 2023 Board Committees: Audit and Risk Committee (Chair), People and Culture Committee Carole Campbell has over 30 years’ financial executive experience in a diverse range of industries including professional services, financial services, media, mining, and industrial services. Carole transitioned to a non-executive career in 2018 and is a non-executive director of Amotiv Limited where she chairs the audit committee. Carole is also a non-executive director of the Australian Brandenburg Orchestra. She was previously a non-executive director of IVE Group Ltd and Humm Group Limited, and was previously Deputy Chair of Council of the Australian Film, Television and Radio School. Carole is a Fellow of Chartered Accountants Australia and New Zealand and of the Australian Institute of Company Directors. She brings extensive experience in accounting, treasury, finance, and risk management to her role on the Board and as Chair of the Audit and Risk Committee. Heith Mackay-Cruise Chair and Independent Director Appointed: 30 October 2020 Most recently elected by shareholders: 27 October 2023 Board Committees: Audit and Risk Committee, People and Culture Committee (Chair until 30 September 2024) Heith Mackay-Cruise became Chair of the Company on 27 March 2024. Heith has been involved in the media, education and technology sectors over the past 25 years. In Heith’s executive career, he was the founding CEO of Sterling Early Education, the Global CEO and Managing Director of Study Group Limited, and CEO for PBL Media New Zealand. Heith also held senior executive positions with Australian Consolidated Press and worked in sales and marketing roles for PepsiCo around Australia. Heith is a non-executive director of Codan Limited (ASX: CDA) where he is a member of the Board’s Remuneration and Nomination Committee. He is a non-executive national director of the Australian Institute of Company Directors where he chairs the Board’s Digital Transformation Committee, and is non-executive Chair of private equity owned technology business, Orro Pty Ltd. Heith was previously non-executive Chair of Straker Limited (ASX: STG), LiteracyPlanet, hipages Limited (ASX: HPG), and the Vision Australia Foundation, and a non-executive director of LifeHealthcare and Bailador Technology Investments Limited (ASX: BTI). Heith is a mentor with Kilfinan Australia, a Fellow of the Australian Institute of Company Directors and has a Bachelor of Economics degree from the University of New England. John Kelly Chief Executive Officer and Managing Director Appointed: 1 July 2023 John Kelly brings extensive strategic, operational and financial leadership experience from 25 years working for Australian media and sporting organisations. John spent 16 years in executive roles at the Ten Network, including eight years as Group CFO, and then three years as Chief Operating Officer at Football Federation Australia, before joining SCA as Chief Operating Officer in 2016. In that role, he oversaw SCA’s general management teams, strategy, research and insights, and digital audio, as well as facilitating SCA’s key sporting rights, television affiliations and digital audio partnerships. As CEO, John leads the development and execution of SCA’s strategy with a view to increasing shareholder value, profitability, and the sustainability of the organisation in the long term. 2024 Annual Report Board of Directors | 21 Marina Go AM Independent Director Appointed: 1 October 2024 Most recently elected by shareholders: To submit for election at 2024 AGM Board Committees: Audit and Risk Committee, People and Culture Committee (Chair from 1 October 2024) Marina Go has over 30 years of leadership experience in the media industry, having started her career as a journalist and editor. Marina’s media executive roles include CEO of Private Media, Country CEO of Hearst Australia, and senior roles with Pacific Magazines and Fairfax. Marina is Chair of Adore Beauty and a non-executive director on the boards of Transurban; Energy Australia, where she Chairs the Sustainability Committee; Autosports Group, where she Chairs the People and Remuneration Committee; and the Australian Institute of Company Directors, where she Chairs the People and Culture Committee. Marina was previously Chair of several organisations including The Walkley Foundation, UTS Centre for Media Transition Advisory Board, Wests Tigers NRL Club, Super Netball Commission, Netball Australia, and Ovarian Cancer Australia. Marina has announced she will retire as a director of Autosports Group from the end of its AGM on 22 November 2024. She is a member of UNSW’s Business Advisory Council, the National Foundation for Australia-China Relations Advisory Board, ANU’s Centre for Asian-Australian Leadership (CAAL) Advisory Board, O’Connell Street Associates, Chief Executive Women, and the Australian Institute of Company Directors. Marina was awarded a Member of the Order of Australia in 2023 for her services to business governance, sports administration and the media. Ido Leffler Independent Director Appointed: 30 October 2020 Most recently elected by shareholders: 27 October 2023 Board Committees: Audit and Risk Committee, People and Culture Committee Ido Leffler has long and successful experience in developing digital brands and extensive networks in the start-up communities of Silicon Valley and Australasia. Ido is the co-founder and Chief Executive Officer at Yoobi, a leading US-based school supplies company. He is also a co- founder of Yes To Inc. – a global natural beauty brand; and of Beach House Group – a consumer product house. Ido is a non-executive director of Vestergaard– one of the world’s largest producers of malaria prevention bed nets — and The Lux Group (Luxury Escapes). He was a non-executive director of Spark New Zealand Limited for six years until November 2020. Ido also sits on other corporate and advisory boards, including as an emeritus member of the United Nations Foundation Global Entrepreneur Council. Tony Hudson General Counsel and Company Secretary Appointed: 7 September 2015 Tony Hudson has over 20 years’ experience in senior legal and governance roles. Tony was General Counsel and Company Secretary at ConnectEast from 2005 until 2015. Before that, Tony was a partner of Blake Dawson Waldron (now Ashurst Australia), working in the firm’s Melbourne office and from 1993 until 2000 in its Jakarta associated office. Tony manages the group’s national legal and corporate affairs teams, including responsibility for regulatory affairs and board governance. Company Secretary Southern Cross Austereo 22 | Senior Leadership Team Senior Leadership Team Rebecca Ackland Chief People and Culture Officer Appointed: 1 May 2022 Rebecca Ackland is an experienced people and culture leader and has had a successful career at SCA including key roles within talent acquisition, people operations and as People and Culture Manager. Rebecca passionately champions SCA’s award-winning culture, ensuring we place our people and our values at the core of what we do every day. As Chief People and Culture Officer, Rebecca is responsible for development and execution of SCA’s people and culture strategy and leads a team of experienced executives across specialties of talent, human resources operations, capability and learning, as well as people services. Dave Cameron Chief Content Officer Appointed: January 2020 Dave Cameron has been with SCA for over 25 years and brings to the role of Chief Content Officer a wealth of experience and expertise in content strategy, programming, and premium talent management. Dave has spent several years in Content and Music Director roles and prior to his appointment to Chief Content Officer held the position of General Manager of the Melbourne office. As Chief Content Officer, Dave is responsible for overseeing and delivering strategic leadership and creative excellence for SCA’s key content initiatives across all its stations including FM, AM, DAB+ and extended digital and associated on-demand content. John Kelly Chief Executive Officer and Managing Director Appointed: 1 July 2023 Refer to biography above. 2024 Annual Report Senior Leadership Team | 23 Stephen Haddad Chief Operations Officer Appointed: January 2018 Stephen Haddad is an experienced technology, information security and business transformation executive who has demonstrated his ability to drive strategic business growth over 25 years in Australian media, finance and consulting organisations. Before joining SCA, he held Chief Information Officer roles at Bauer Media and Fuji Film and senior technology management roles within banking and telecommunications. As Chief Technology and Operations Officer, Stephen is responsible for all technology domains across SCA, including business systems; corporate networks and infrastructure; digital product, design and development; audio engineering, technology and operations; television broadcast engineering and operations; and SCA’s project management office. From 1 July 2023, Stephen also oversees SCA’s general management teams in our 60 locations around Australia to drive operational excellence and ensure delivery of corporate strategy. Seb Rennie Chief Commercial Officer Appointed: May 2023 Seb Rennie has over 20 years’ experience in media, having worked in and with significant media agencies, media owners, advertisers and tech vendors in Australia, the United Kingdom and Canada. Most recently before joining SCA, Seb was GroupM’s Chief Investment Officer for Australia. Seb joined SCA in early 2023 to lead SCA’s commercial strategy for its LiSTNR digital audio division. He became Chief Commercial Officer in May 2023 with responsibility for driving commercial performance and value for clients across SCA’s suite of broadcast and digital media channels and brands. Tim Young Chief Financial Officer Appointed: 30 January 2023 Tim is a seasoned senior executive with almost 30 years of experience honed across corporate, professional and start-up environments. His focus has been around the media sector in the UK, Europe and Australia, covering most facets from traditional print and radio, to TV, stage and film production; content and ad sales; and all forms of theatrical, physical and digital distribution. In his most recent role as CFO and Head of Strategy ANZ at The Walt Disney Company, Tim played a strategic role in launching the Disney+ SVOD service in Australia and led evolution of the finance function into shared services and business partnering. As CFO of SCA, Tim is responsible for financial stewardship of the group, including allocation of capital and resources and management of returns to shareholders. Financial objectives include optimising the cost of capital through use of an appropriate balance of equity and debt capital and through investing in projects that enhance the group’s return on invested capital. Tim will be responsible for managing relationships and communication with providers of equity and debt capital and for ensuring a strong and effective governance framework exists. Southern Cross Austereo 24 Directors’ Report and Financial Report 2024 Annual Report Financial Report | 25 Southern Cross Austereo 26 | Directors’ Report Directors’ Report 27 Corporate Governance Statement 27 Directors’ Report 27 Review and Results of Operations 27 Distributions and Dividends 32 Significant Changes in State of Affairs 32 Events Occurring After Balance Date 32 Likely Developments and Expected Results of Operations 32 Indemnification and Insurance of Officers and Auditors 32 Non-Audit Services 32 Environmental Regulation 32 Information on Directors 33 Information on Company Secretary 34 Meetings of Directors 34 Remuneration Report 35 Auditor’s Independence Declaration 51 Financial Report 52 Consolidated Statement of Comprehensive Income 52 Consolidated Statement of Financial Position 53 Consolidated Statement of Changes in Equity 54 Consolidated Statement of Cash Flows 55 Notes to the Consolidated Financial Statements 56 Key Numbers 57 Capital Management 72 Group Structure 79 Other Notes to the Consolidated Financial Statements 81 Consolidated Entity Disclosure Statement 85 Directors’ Declaration 86 Independent Auditor’s Report to the Members of Southern Cross Media Group Limited 87 The financial statements were authorised for issue by the Directors on 29 August 2024. The Directors have the power to amend and re-issue the financial statements. Contents Corporate Governance Statement The statement outlining Southern Cross Media Group Limited’s corporate governance framework and practices in the form of a report against the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, 4th Edition, will be available on the Southern Cross Austereo website, www.southerncrossaustereo.com.au, under the investor relations tab in accordance with listing rule 4.10.3 when the 2024 Annual Report is lodged. Directors’ Report The Directors of Southern Cross Media Group Limited (‘the Company’) submit the following report for Southern Cross Austereo, being Southern Cross Media Group Limited and its subsidiaries (‘the Group’) for the year ended 30 June 2024. Directors The following persons were Directors of the Company during the whole of the year, unless otherwise stated, and up to the date of this report: – Rob Murray (Chairman until 27 March 2024) – Heith Mackay-Cruise (Chairman from 27 March 2024) – John Kelly (Managing Director) – Glen Boreham (Retired 27 March 2024) – Carole Campbell – Ido Leffler – Helen Nash Principal activities The principal activities of the Group during the course of the financial year were the creation of audio content for distribution on broadcast (AM, FM and DAB radio) and digital networks. The Group also broadcasts free-to-air television content in regional markets. All of these media assets are monetised via revenue generated from the development and sale of advertising solutions for clients. There were no changes in the nature of the Group during the full year. Review and Results of Operations Operating and Financial Review Group Results The Group’s results for the year ended 30 June 2024 are summarised in the table below: Total Revenue 2024 $’m 2023 $’m Variance $’m % Broadcast radio 366.6 372.6 (6.0) (1.6)% Digital audio 35.0 24.6 10.4 42.2% Television 97.5 106.7 (9.2) (8.6)% Corporate 0.3 0.4 (0.1) (25.5)% Total Revenue 499.4 504.3 (4.9) (1.0)% Total Expenses Broadcast radio (279.4) (274.7) (4.7) 1.7% Digital audio (45.9) (42.2) (3.7) 8.8% Television (84.2) (88.0) 3.8 (4.3)% Corporate (23.7) (22.2) (1.5) 6.8% Total Expenses excluding significant items1 (433.2) (427.1) (6.1) 1.4% EBITDA Broadcast radio 87.2 97.9 (10.7) (10.9)% Digital audio (10.9) (17.6) 6.7 38.0% Television 13.3 18.7 (5.4) (28.9)% Corporate (23.4) (21.8) (1.6) 7.1% EBITDA excluding significant items1 66.2 77.2 (11.0) (14.2)% Reported Group NPAT (224.6) 19.1 (243.7) (1,275)% 1 EBITDA disclosed within the Directors’ Report is equivalent to ‘Profit/ (loss) before income tax expense for the year from continuing operations’ included within the Consolidated Statement of Comprehensive Income after adding back depreciation and amortisation expense, significant items, and net interest expense. EBITDA is used by the Directors as a widely recognised measure of operational performance. Group revenues decreased by 1.0% on prior year with declines in broadcast radio and television partially offset by increased digital audio revenue. Total expenses increased by 1.4%. Revenue related expenses were flat despite the fall in revenue as additional costs were incurred to support listener and revenue share growth. Tight cost control saw non-revenue related (NRR) expenses excluding significant items increase by only 2.5%, below the level of inflation. The combination of lower revenues and increased expenses resulted in a 14.2% decline in EBITDA to $66.2 million excluding significant items. 2024 Annual Report Directors’ Report | 27 Directors’ Report For the year ended 30 June 2024 Significant Items At 30 June 2024, the Group recognised an impairment of $326.1 million in the carrying value of radio broadcast licences in the broadcast radio cash generating unit. There was also a related derecognition of a deferred tax liability in respect of those licences for $97.8 million, giving a $228.3 million impairment charge net of tax. The impairment reflects observed market pressures, independent estimates of radio broadcast growth rates showing declines over the forecast period, and a consequent reduction in the long-term growth rates. Significant items also included $2.9 million ($2.0 million post tax) relating to the response to corporate activity proposals, $4.5 million ($3.1 million post tax) of restructuring costs relating to a significant cost-out programme and $3.3 million ($2.3 million post tax) of other items which included the write-off of certain development costs. In the prior year, $4.0 million of significant items relating principally to restructuring costs were included in net profit before tax ($2.8 million post tax). Broadcast Radio The Broadcast Radio business consists of two complementary radio networks operating across Australian capital cities and regional Australia. Each network’s brands target different audience demographics with the Triple M network skewed towards males in the 25 to 54 age bracket and the Hit Network targeted towards females in the 25 to 54 age bracket. Broadcast Radio Profit & Loss 2024 $’m 2023 $’m Variance $ % Metro Radio Advertising Revenue 181.1 186.2 (5.1) (2.7)% Regional Radio Advertising Revenue 163.1 162.0 1.1 0.7% Other Revenue 22.4 24.4 (2.0) (8.2)% Total Revenue 366.6 372.6 (6.0) (1.6)% Revenue Related Expenses (71.2) (68.5) (2.7) 3.9% Non-Revenue Related (NRR) Expenses (208.2) (206.2) (2.0) 1.0% Total Expenses (279.4) (274.7) (4.7) 1.7% EBITDA excluding significant items 87.2 97.9 (10.7) (10.9)% Total Broadcast radio revenues decreased by 1.6% to $366.6 million. The Group’s metro radio advertising revenue decreased by 2.7% largely as a result of a 3.1% decline in the overall market. SCA’s average revenue metro market share increased to 27.2% in line with an improvement in audience ratings, which saw consecutive monthly improvements in revenue market share in the second half of the year to June 2024. The Group’s regional advertising radio revenue increased by 0.7%, due to strong local sales which increased by 4.0%, highlighting the benefit of the Group’s diverse customer base. Revenue related costs increased from 18.4% of revenues in FY2023 to 19.4% in FY2024. This increase was due to additional costs to support revenue share growth, including content, sales activations, increased promotions and outside broadcast activity, together with additional sales incentives. NRR expenses increased by only 1.0% due to tight cost control largely offsetting the impact of high inflation and strategic investments in revenue-driving technology. As a result of the decline in revenue and increase in costs, Broadcast radio EBITDA fell 10.9% to $87.2 million. Digital Audio The Digital Audio business consists of the Group’s digital platform, LiSTNR and the digital assets associated with the Radio broadcasting business. Digital Audio Profit & Loss 2024 $’m 2023 $’m Variance $ % Total Revenue 35.0 24.6 10.4 42.2% Revenue Related Expenses (7.4) (6.3) (1.1) 17.5% Non-Revenue Related (NRR) Expenses (38.5) (35.9) (2.6) 7.2% Total Expenses (45.9) (42.2) (3.7) 8.8% EBITDA excluding significant items (10.9) (17.6) 6.7 38.0% Group Digital Audio revenues increased by 42.2% to $35.0 million driven by strong performance in InStream and Podcast revenue. LiSTNR continued to grow strongly in FY2024, with strong adoption by users attracted to the compelling product and the increasing choice of content. Total listenership of SCA and partner Digital Audio content measured across all digital platforms exceeded 10 million listeners on a monthly basis, and the number of listeners who have signed-up with LiSTNR now exceeds 2 million users. SCA anticipates strong digital audio growth will continue into FY2025. Revenue related expenses fell from 25.6% of revenue in FY2023 to 21.1% in FY2024 as a result of economies of scale. NRR expenses increased by 7.2% due to strategic investments in revenue-driving technology, notably the implementation of the LiSTNR Customer Data Platform. The combined impact of strong revenue growth with relatively modest expense increases resulted in a 38.0% reduction in the EBITDA loss to $(10.9) million, with EBITDA breaking even in the last quarter of FY2024. Southern Cross Austereo 28 | Directors’ Report Directors’ Report For the year ended 30 June 2024 Television The Television business consists of 96 regional television licences. Each regional television licence receives programming from a metropolitan television network affiliate. During the financial year the Group received the majority of its programming from the Ten Network in the 3-AGG market, whilst Tasmania, Darwin and Central licence areas received Seven Network programming. Television Profit & Loss 2024 $’m 2023 $’m Variance $ % Total Revenue 97.5 106.7 (9.2) (8.6)% Revenue Related Expenses (46.0) (51.4) 5.4 (10.5)% Non-Revenue Related (NRR) Expenses (38.2) (36.6) (1.6) 4.4% Total Expenses (84.2) (88.0) 3.8 (4.3)% EBITDA excluding significant items 13.3 18.7 (5.4) (28.9)% Total Television revenues decreased by 8.6% to $97.5 million, with the advertising markets down 5.3% and SCA’s market share in the 3-AGG market (comprising the Queensland, Southern New South Wales and Victoria television markets) declining largely due to continuing falls in affiliate network ratings and increased competitive pressure particularly in relation to integrated national sales. Revenue related costs decreased in line with the fall in revenue and non-revenue related expenses rose due to CPI- linked broadcast contract costs. As a result EBITDA fell by 28.9% to $13.3 million. Corporate The Corporate function comprises the Group-wide centralised functions that cannot be clearly attributable to the Broadcast Radio, Digital Audio or Television operating segments. Corporate expenses increased by 6.8%, mainly due to inflation linked contracts and further centralisation of functions for longer term efficiency. Group financial position The Group has generated positive operating cashflows throughout the year. The increase in interest rates since May 2022 resulted in higher net interest payable to banks of $6.9 million (2023: $4.7 million). The combination of the higher net interest payable and reduced EBITDA saw the Interest cover decrease to 8.30 times from 15.09 in June 2023 – though remaining well above the minimum Interest cover covenant of 3.0 times. Similarly, the Group’s key leverage ratio increased to 1.87 times, up from 1.48 times in June 2023 – whilst higher, it remains well within the maximum covenant requirement of 3.5 times. The Group’s debt facilities mature in January 2026, with $160 million of commitments. The Group has gross debt of $118 million at 30 June 2024, with a further $42 million available to draw upon, providing security of financing into the medium term. Additionally, the Group has access to a short-term $25 million overdraft facility with the ANZ Banking Group, renewable annually on each 30 April. Strategic update The Group’s mission is ‘To entertain, inform and inspire Australians. Anytime. Anywhere.’ with a sharpened focus on being Australia’s leading Audio company, and a particular emphasis on the growing Digital Audio sector, the Group will leverage its national digital and broadcast network and audio ecosystem to maximise total shareholder returns for investors. In FY21 the Group developed a new and refreshed Corporate Strategy focused on our four key strategic pillars: 1. Diversify and grow monetisable audiences 2. Evolve and scale the LiSTNR ecosystem 3. Achieve audio market revenue leadership 4. Refine and evolve the Group’s operating model This strategy provides an overall strategic pathway for the Group until June 2026. The six-year strategy includes specific objectives and targets across three 2-year horizons. The Group is in the last of these 2-year horizons, where our focus will be on realising the inherent potential of our now enhanced audio assets to grow cash flows, in order that we can: 1. Effectively monetise the ‘audiences that matter’ and improve earnings across all assets and all markets 2. Develop LiSTNR so that it provides a significant contribution to revenue, earnings and operating cash flows 3. Proactively evolve our operating model to be efficient, agile and drive improved performance across broadcast and digital 2025 outlook The Group continues to sharpen its focus on being the Audio leader in Australia, for broadcast – both live and on-demand – and podcasting by continuing to grow Digital Audio with SCA’s own and partner content as an increasingly material augmentation to the nation’s widest-reaching and most engaging audio business. The Group maintains a highly competitive position in traditional radio (licences), which in combination with our in-house production capability, high calibre representation agreements and market- leading data and insight capabilities, will continue to provide an increasing audience and understanding from which to drive Digital Audio. Whilst currently almost 9% of audio revenues, the premium that Digital Audio attracts through the ability to target audiences on its platform is expected to continue to attract an improved valuation multiple and broader range of addressable markets thereby providing greater rates and on-going growth potential. Overall, the Group is looking in FY25 to: – Effectively monetise the ‘audiences that matter’ in each segment to improve earnings across all assets and markets in which we participate – Leverage long-term investment; audiences built and growing; and our leading position with LiSTNR to build on the EBITDA profitability achieved, such that it meaningfully contributes to revenue and earnings, with LiSTNR expected to be cash flow positive in FY25 – Continue to evolve our operating model to be ever more efficient, agile and effective across both broadcast and digital thereby prioritising earnings; and deliver FY25 Non-Revenue Related costs below FY24 costs, which were $309 million excluding significant items – Actively progress the divestment of its Television assets – Reduce capital expenditure to approximately $10 million – Pay dividends towards the lower end of the target payout range of between 65% to 85% of NPAT 2024 Annual Report Directors’ Report | 29 Material Risks Business and operational risks that could affect the achievement of the Group’s financial prospects include the following risks: Risk Mitigation Strategies LiSTNR product does not reach sustainable profitability at an appropriate level and pace SCA has core expertise in the development of market leading content and constantly reviews the evolving distribution landscape to understand how it can continue to serve market leading content through new and innovative products. Consumption of digital audio continues to grow strongly, with 77% of Australians 12+ listening to online audio each week, up from 66% in 2021, which goes up to 84% for the age 35-54 demographic and to 93% in the under 35s1. This is expanding the range of audio content and diversifying the ways in which audio can be consumed. LiSTNR is a curated and personalised app offering radio, podcasts, music and news that is a key element of SCA’s digital transformation. LiSTNR features all of SCA’s existing digital content plus a huge range of new and compelling premium content, all contained in one free and easy to use app. Since launch in February 2021, over 2 million users have signed-up to LiSTNR with 0.5 million of those in FY2024, resulting in significant, growing audio consumption through the product and generating first-party data from our signed-in audience that gives SCA enhanced ability to offer our clients targeted, engaged audiences at scale. This targeted advertising is enabled by an Instream advertising product, which also delivers it across the digital inventory of SCA’s partners such as SoundCloud. In April, the Group launched the LiSTNR AdTech Hub to deliver increased personalisation and targeting, dynamic creative optimisation and an Australia-based Customer Data Platform with associated first party data clean room solutions and services. Together these innovative technology capabilities and services deliver exciting and effective advertising outcomes and set LiSTNR apart as the most advanced, data led and privacy compliant digital audio platform for brands in 2024. This has been reflected in more than 20% of Digital Audio sales now being AdTech supported with increases in revenues. SCA believes it will be able to offer its listeners compelling content across the medium of their choice – being Broadcast Radio or Digital Audio. The bulk of the investment in digitisation is now complete with any further resources being deployed towards developments that will provide greater monetisation opportunities for LiSTNR and its market leadership in terms of content depth and quality, product capability, and digital sales expertise. Revenues for Broadcast Radio grow more slowly than forecast SCA is a member of Commercial Radio & Audio (‘CRA’), which represents the interests of commercial radio broadcasters throughout Australia. CRA has improved the accuracy and trust in the survey measurements it commissions including the introduction of additional surveying methodologies. Further, SCA has developed attribution tools to provide enhanced comparability with global technology solutions, which have been attracting revenue away from traditional media. As described above, SCA has developed LiSTNR to take advantage of the increased consumption in Digital Audio. As well as offering live radio, catch-up radio podcasts are available – in combination this is the majority of listening hours on LiSTNR. SCA believes that as a result of its investment in the AdTech hub, it will be able to offer and target audiences ever more effectively with content across the medium of their choice – either Broadcast Radio or Digital Audio, which will mitigate the impact of any reduction in Broadcast Radio growth alone. Global technology companies participate more aggressively in the Audio market, making SCA’s distribution less profitable or increasing subsidy from other business lines SCA has a core expertise in content creation and is focused on providing localised content as a key differentiator to international operators to ensure it receives strong engagement and listening from its customer base across all of its platforms and environments. SCA launched LiSTNR in February 2021 and though the major development investment is effectively complete, SCA continues to develop the product so that it directly attracts and retains listeners and establishes itself as a destination for audio listening, providing a significant signed-in user base that enables SCA to compete effectively in providing digital advertising solutions. The Group’s team of digital experts are integrated into the Group’s day-to-day operations and analytical teams in order to leverage existing content and sales capabilities. SCA aims to continue to grow market share quickly with LiSTNR, so that it builds and retains a strong, engaged, loyal audience that can compete with both domestic and international competitors. LiSTNR’s podcasting and streaming monthly audience was above 8 million listeners in June 2024, retaining its number 1 position as Australia’s largest podcast network2. The Group invests in engaging digital audiences through the simulcast of its FM radio stations online and the creation of additional stations on DAB that extends its brands across broadcast and online platforms. This is coupled with a large range of digital only content that ensures the LiSTNR product has a deep and often exclusive content offering for users. SCA utilises its own media assets as well as paid media to drive both awareness and adoption of LiSTNR to build a strong market position. Southern Cross Austereo 30 | Directors’ Report Directors’ Report For the year ended 30 June 2024 Risk Mitigation Strategies Revenues from a declining regional TV market decrease faster than forecast In FY24, the Group saw a decline in its television revenues of 8.6% year on year, due to market declines and competitive pressures. Although FTA television continues to deliver scale audiences and retains a key place in media buying strategies, the economics of FTA television remain challenging due to ongoing audience declines. Key mitigation strategies are focused on improving the share of media spending directed towards regional markets (which have historically lagged metro market behaviour); focusing on the efficiency of our television operations; and accelerating the shift of the Group’s sales emphasis towards audio. The Group’s sales teams’ Regional Development Program continues to drive incremental marketing in regional markets where there is an underinvestment in media spend on a per capita basis; and is supported in this regard by the industry trade marketing Boomtown campaign. The Group is a diversified business covering television, radio and online, which provides a degree of protection against individual market weaknesses, with television representing around 15% of the Group’s EBITDA (prior to corporate costs) and declining. As a television affiliate the Group pays a percentage of revenue to program supply partners resulting in a more variable cost structure than our radio or online businesses, thereby reducing the profit impact of declines in FTA television revenue. SCA strategically is committed thematically to being ‘all about Audio’ and accordingly will continue to look to reduce its exposure to the TV ad market through the sale of its licences should economic opportunities to do so arise. Operational impact of a cyber security breach A security breach could result in loss of content playout; compromise of secondary supporting systems or the operational platform; or lead to a data breach. The Group is measuring and maturing its information security management system against the internationally recognised NIST (National Institute of Standards and Technology) cybersecurity framework. The Group has commissioned ongoing cyber vigilance for malware, spam and phishing attempts. Regular penetration and breach testing is conducted, and breach simulations are performed regularly with outcomes reported to management and Directors. The Group has engaged CyberCX for Digital Forensics and Incident Response (DFIR) services, including proactive threat hunting and break-glass digital forensics in the event of a major incident. Additionally, Telstra Purple provides Security Operations Centre (SOC) services, enhancing the Group’s monitoring and incident response capabilities. User education on Cyber Security has been uplifted through friendly phishing campaigns, in-person awareness sessions, and mandatory annual compliance training. Multifactor authentication is applied to all users, including executives and privileged user accounts. The Group maintains a Cyber Security insurance policy. The Group has outsourced its transmission to Broadcast Australia and TV playout to NPC Media, which has disaster recovery and business continuity plans in place, that are periodically tested to ensure continuity of its services in case of a security breach or other interruption. Systems security questionnaires are completed for all new and existing third parties that require access to data held by SCA or that host or manage data on SCA’s behalf. Corporate activity that does not represent fair value to shareholders Investment markets undervalue the Group’s business, especially as the Group transitions from its legacy broadcast operations to high growth digital audio operations. This risk is exacerbated by the concentration of ownership of the Group by shareholders with conflicting interests. The Group expects its completed investment in digital transformation and its ongoing cost-out program to deliver improved returns in FY25 and beyond. In addition, during FY25, the Group will launch a programme to improve the understanding of the Group’s assets, operations and strategy among current and potential investors. 1 The Infinite Dial Australia 2024 study. 2 CRA Australian Podcast Ranker – Top Sales Representatives – June 2024. 2024 Annual Report Directors’ Report | 31 Distributions and Dividends Type Cents per share Total Amount $’m Date of Payment Final 2023 Ordinary 2.2 cents $5.3 million 4 October 2023 Interim 2024 Ordinary 1.0 cent $2.4 million 12 April 2024 There will be no final dividend paid for the year ended 30 June 2024. Significant Changes in State of Affairs In the opinion of the Directors, there were no significant changes in the state of affairs of the Group that occurred during the year under review. Events Occurring After Balance Date Events occurring after balance date are outlined in note 25 ‘Events Occurring After Balance Date’ to the Financial Statements. Likely Developments and Expected Results of Operations Further information on likely developments relating to the operations of the Group in future years and the expected results of those operations has not been included in this report because the Directors of the Company believe it would be likely to result in unreasonable prejudice to the commercial interests of the Group. Indemnification and Insurance of Officers and Auditors During the year the Company paid a premium of $1,194,523 to insure its officers. So long as the officers of the Company act in accordance with the Constitution and the law, the officers remain indemnified out of the assets of the Company and the Group against any losses incurred while acting on behalf of the Company and the Group. The auditors of the Group are in no way indemnified out of the assets of the Group. Non-Audit Services The Company may decide to employ the auditor on assignments additional to its statutory audit duties where the auditor’s expertise and experience with the Group are important. Details of the amounts paid or payable to the auditor (PricewaterhouseCoopers Australia) for audit and non-audit services provided during the year are set out in note 22. The Board has considered the position and, in accordance with advice received from the Audit & 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: – all non-audit services have been reviewed by the Audit & Risk Committee to ensure they do not impact the impartiality and objectivity of the auditor; and – none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants. Environmental Regulation The operations of the Group are not subject to any significant environmental regulations under Australian Commonwealth, State or Territory law. The Directors are not aware of any breaches of any environmental regulations. Southern Cross Austereo 32 | Directors’ Report Directors’ Report For the year ended 30 June 2024 Information on Directors Chair and Independent Director Heith Mackay-Cruise Appointed: 30 October 2020 Most recently elected by shareholders: 27 October 2023 Board Committees: People & Culture Committee (Chair) Heith Mackay-Cruise became Chair of the Company on 27 March 2024. Heith has been involved in the media, education and technology sectors over the past 25 years. In Heith’s executive career, he was the founding CEO of Sterling Early Education, the Global CEO and Managing Director of Study Group Limited, and CEO for PBL Media New Zealand. Heith also held senior executive positions with Australian Consolidated Press and worked in sales and marketing roles for PepsiCo around Australia. Heith is a non-executive director of Codan Limited (ASX:CDA) where he is a member of the Board’s Remuneration & Nomination Committee. He is a non-executive national director of the Australian Institute of Company Directors where he chairs the Board’s Digital Transformation Committee, and is non-executive Chair of private equity owned technology business, Orro Pty Ltd. Heith was previously non-executive Chair of Straker Limited (ASX:STG), LiteracyPlanet, hipages Limited (ASX:HPG), and the Vision Australia Foundation, and a non-executive director of LifeHealthcare and Bailador Technology Investments Limited (ASX:BTI). Heith is a mentor with Kilfinan Australia, a Fellow of the Australian Institute of Company Directors and has a Bachelor of Economics degree from the University of New England. Independent Director Carole Campbell Appointed: 1 September 2020 Most recently elected by shareholders: 27 October 2023 Board Committees: Audit & Risk Committee (Chair), People & Culture Committee Carole Campbell has over 30 years’ financial executive experience in a diverse range of industries including professional services, financial services, media, mining and industrial services. Carole transitioned to a non-executive career in 2018 and is a non-executive director of Amotiv Limited (ASX:AOV) where she chairs the audit committee. Carole is also a non-executive director of the Australian Brandenburg Orchestra. She was previously a non-executive director of IVE Group Ltd (ASX:IGL), Humm Group Limited (ASX:HUM) and Deputy Chair of Council of the Australian Film, Television and Radio School. Carole is a Fellow of Chartered Accountants Australia and New Zealand and a Fellow of Australian Institute of Company Directors. She brings extensive experience in accounting, treasury, finance and risk management to her role on the Board and as Chair of the Audit & Risk Committee. Independent Director Ido Leffler Appointed: 30 October 2020 Most recently elected by shareholders: 27 October 2023 Board Committees: Audit & Risk Committee, People & Culture Committee Ido Leffler has long and successful experience in developing digital brands and extensive networks in the start-up communities of Silicon Valley and Australasia. Ido is the co-founder and Chief Executive Officer at Yoobi, a leading US-based school supplies company. He is also a co-founder of Yes To Inc. – a global natural beauty brand; and of Beach House Group – a consumer product house. Ido is a non-executive director of Vestergaard– one of the world’s largest producers of malaria prevention bed nets – and The Lux Group (Luxury Escapes). He was a non-executive director of Spark New Zealand Limited for six years until November 2020. Ido also sits on other corporate and advisory boards, including as an emeritus member of the United Nations Foundation Global Entrepreneur Council. Independent Director Helen Nash Appointed: 23 April 2015 Most recently elected by shareholders: 21 October 2022 Board Committees: Audit & Risk Committee, People & Culture Committee Helen Nash has more than 20 years’ executive experience in consumer packaged goods, media and quick service restaurants. As Chief Operating Officer at McDonald’s Australia, she oversaw restaurant operations, marketing, menu, insights and research, and information technology. This mix of strategic and operational experience allows Helen to bring broad commercial skills and acumen, as well as a consumer focus, to the Board. Helen also brings robust financial skills to her role having initially trained in the UK as a Certified Management Accountant. Since transitioning to her non-executive career in 2013, Helen has served as a director of companies in a range of industries. She is Chair of Inghams Group Limited, a director of Metcash Ltd, and was formerly a director of Pacific Brands Ltd and Blackmores Ltd. Our Board benefits from Helen’s governance experience and skills, including her membership of audit and remuneration committees at these other companies. Managing Director and CEO John Kelly Appointed: 1 July 2023 John Kelly brings extensive strategic, operational and financial leadership experience from 25 years working for Australian media and sporting organisations. John spent 16 years in executive roles at the Ten Network, including eight years as Group CFO, and then three years as Chief Operating Officer at Football Federation Australia, before joining SCA as Chief Operating Officer in 2016. In that role, he oversaw SCA’s general management teams, strategy, research and insights, and Digital Audio, as well as facilitating SCA’s key sporting rights, Television affiliations and Digital Audio partnerships. As CEO, John leads the development and execution of SCA’s strategy with a view to increasing shareholder value, profitability, and the sustainability of the organisation in the long term. 2024 Annual Report Directors’ Report | 33 Information on Company Secretary General Counsel and Company Secretary Tony Hudson Appointed: 7 September 2015 Tony Hudson has over 25 years’ experience in senior legal and governance roles. Tony was General Counsel and Company Secretary at ConnectEast from 2005 until 2015. Before that, Tony was a partner of Blake Dawson Waldron (now Ashurst Australia), working in the firm’s Melbourne office and from 1993 until 2000 in its Jakarta associated office. Tony manages the Group’s national legal and corporate affairs teams, including responsibility for regulatory affairs and Board governance. Meetings of Directors The number of meetings of the Board of Directors and its committees held during the year and the number of meetings attended by each Director are summarised in the table below. During the year, the Board also established an ad hoc committee to consider the non-binding indicative proposal from the consortium comprising ARN Media and Anchorage Capital Partners (Consortium Proposal). That committee comprised Rob Murray, Carole Campbell, Heith Mackay-Cruise and John Kelly. It met seven times between October 2023 and March 2024. Between October 2023 and May 2024, the Board held 14 meetings dedicated to the Consortium Proposal. These meetings were often convened at short notice and it was not possible in some cases for all Directors to attend because of pre-existing commitments. Director Meetings of Committees Board Audit & Risk People & Culture Digital Transformation2 Attended Held1 Attended Held1 Attended Held1 Attended Held1 Rob Murray 17 17 4 * 3 * 1 * John Kelly 26 26 5 * 4 * 1 * Glen Boreham 17 17 - * 3 3 1 1 Carole Campbell 24 26 5 5 4 1 1 1 Ido Leffler 24 26 2 1 4 4 1 1 Heith Mackay-Cruise 26 26 5 5 4 3 1 * Helen Nash 22 26 5 5 3 4 – * 1 Held refers to the number of meetings held during the time the Director held office or was a member of the relevant committee during the year. 2 The Digital Transformation Committee was disbanded on 31 December 2023. * Not a member of the relevant committee during the year. Southern Cross Austereo 34 | Directors’ Report Directors’ Report For the year ended 30 June 2024 Remuneration Report Letter from People & Culture Committee Overview On behalf of the Board, I am pleased to present SCA’s remuneration report for the year ended 30 June 2024 (FY24). The People & Culture Committee (PCC) assists the Board in its oversight of management activities in developing and implementing strategies to improve SCA’s financial performance, culture, and diversity, consistent with our values. The PCC also oversees the composition, performance and remuneration of SCA’s executive key management personnel (KMP) and the other members of SCA’s Senior Leadership Team (leadership executives). An important part of the PCC’s role is to ensure SCA’s remuneration policies align executive reward with creation of value for shareholders, having regard to applicable governance, legal and regulatory requirements, and industry standards. SCA’s executive remuneration includes fixed and variable components. SCA operates a combined Executive Incentive Plan (EIP), which provides a simple and direct way to link executive performance and reward to generation of sustainable positive returns for shareholders. Executive Incentive Plan Under the EIP, the performance of the executive KMP and other executives is assessed annually against a mix of financial and non-financial performance measures. The EIP uses a balanced scorecard to assess an executive’s performance. Sixty percent of the annual award for SCA’s Senior Leadership Team is based on performance against annual financial performance hurdles. Non-financial measures – accounting for 40% of the annual award – include execution of strategic projects designed to drive future financial performance, and cultural and behavioural influences. This balanced scorecard recognises the long-term benefits to the organisation of SCA’s leaders committing to develop and maintain a strong culture and operational discipline. In all cases, executives’ maximum EIP opportunity is capped at target. The Board also maintains a corporate balanced scorecard to assess overall performance against agreed targets for radio audience survey performance, advertising market commercial share, growth in Digital Audio reach and monthly active users of LiSTNR, as well as financial performance measures. Several of the measures from the corporate scorecard are reflected in the scorecards of individual executives, and the Board also uses the scorecard to inform its exercise of discretion when considering the performance and incentive opportunities of individual executives. The annual EIP award to each executive KMP is settled partly in cash and the remainder in equity performance rights. The cash component is 40% for the CEO and 50% for other executive KMP. These performance rights are eligible for vesting and conversion to ordinary shares at the end of year 3, subject to ongoing employment. Vesting of one-half of an executive’s performance rights will potentially be scaled back according to whether SCA achieves satisfactory growth in earnings per share over this three-year period. A further restriction on disposal of vested shares applies until the end of year 5, two years after allocation of any vested shares. Executive remuneration in FY24 FY24 was the first full year of service for each of SCA’s three executive KMP in their current roles. The Board set their respective remuneration with the assistance of external search consultants and independent benchmarking advice from KPMG. With the Board’s endorsement, KPMG selected a comparator group comprising 34 companies in the Consumer Staples, Consumer Discretionary, Communication Services and Information Technology sectors with an average market capitalisation of between $200 million and $420 million along with certain other companies with similar market capitalisation. The Board approved total remuneration for these roles between the 60th and 80th percentile of the comparator group. Under the FY24 EIP, the performance of each executive KMP was assessed against a mix of financial and non-financial performance measures. The profitability and financial performance measures under the FY24 EIP were group EBITDA, advertising revenue, and non-revenue related costs compared to budget. The EBITDA and advertising revenue targets were not achieved. The non-financial goals of leadership executives targeted growth in SCA’s Broadcast Radio and Digital Audio audiences, expansion of digital revenues, optimising the Group’s operating model, deploying a commercially effective diversity and inclusion strategy, and improving the understanding among media buyers and investors of SCA’s digital transformation strategy. The Board acknowledged external economic factors leading to a contraction in broadcast advertising markets had contributed to the significant shortfalls against revenue and earnings targets. The management team was also diverted during the year by corporate activity, most notably the unsolicited non-binding indicative offer received from ARN Media and Anchorage Capital Partners. The uncertainty caused by this proposal and the resources required to deal with it meant that some optimisation initiatives were deferred. Against this background, the Board acknowledged management’s efforts and achievements during the year to grow broadcast audiences, improve metro radio commercial shares, bring LiSTNR to EBITDA profitability, and control cost growth in an inflationary environment. The Board assessed that executive KMP and other leadership executives achieved a portion of their EIP opportunities based on the measures in their respective balanced scorecards. However, considering that SCA’s corporate revenue and earnings outcomes fell short of targets and the ongoing deterioration in SCA’s share price during the year, the Board, in consultation with management, decided that no cash or performance rights should be awarded under the FY24 EIP. In making this decision, the Board is conscious that the award of performance rights under the EIP is designed to provide ongoing performance and retention incentives for executives in subsequent years. Any performance rights granted under the FY24 EIP would have been eligible for vesting after 30 June 2026 and there will now be a gap in potential reward for executives and alignment with shareholders’ interests at that time if SCA’s financial performance improves in coming years. Summary details of the EIP assessment and outcome for each executive KMP are provided in section 4.1.2 of the remuneration report. 2024 Annual Report Directors’ Report | 35 Letter from People & Culture Committee (continued) FY22 EIP Fifty percent of the first performance rights granted under SCA’s EIP in FY22 will vest in September 2024. SCA will acquire shares on-market and allocate those shares to participating executives. Vesting of the remaining 50% was contingent on SCA achieving a cumulative annual growth rate in earnings per share of at least 1.5% over the three years ended on 30 June 2024. That threshold was not met. The shares allocated to executives on partial vesting of their FY22 EIP performance rights will be subject to disposal restrictions until 30 June 2026 or earlier cessation of employment, aligning the interests of these executives with those of our shareholders. Board remuneration The Board reviewed its fees for non-executive directors during the year. For that purpose, the Board engaged KPMG to prepare a report benchmarking the Board’s size, committee structure and remuneration. With the Board’s approval, KPMG selected two comparator groups for benchmarking purposes: the bespoke group mentioned above used to benchmark the remuneration of the CEO and Chief Commercial Officer, and the companies in the ASX 250-300 by market capitalisation (excluding materials). While SCA’s current market capitalisation is lower than that of the companies in these comparator groups, the Board considers SCA’s scale, complexity and risk supports comparison with them. SCA’s total assets, total revenue and number of employees are in the top half of both comparator groups. The Board also considered recent changes in its size and composition. The Board had seven non-executive directors in FY23 and six for most of FY24. Following the retirement of two Directors in March 2024, the Board now has only four non-executive directors and intends to maintain this size in FY25. After considering these matters, the Board has resolved to reduce its fees for FY25. Details are provided in section 2.7 of the remuneration report. The PCC continues to strive to ensure SCA’s remuneration framework will drive behaviours to generate sustainable value for shareholders. I look forward to your feedback and to welcoming you to our 2024 Annual General Meeting. Yours faithfully, Heith Mackay-Cruise Chair of the People & Culture Committee Southern Cross Austereo 36 | Directors’ Report Directors’ Report For the year ended 30 June 2024 1. Overview of FY24 remuneration This section provides an overview of the remuneration received by executive KMP and non-executive directors in FY24. 1.1 Executive KMP The principles for remuneration of executive KMP are set out in section 2. Details of remuneration paid during the year are provided in sections 3 (Remuneration of executive KMP and Directors), 4 (Analysis of incentives) and 5 (Share-based incentives). This table provides an overview of statutory remuneration received by executive KMP in FY23 and FY24. Name Fin Year Total remuneration Short-term incentive opportunity1 Long-term incentive eligible for vesting2,3 Amount $ Performance- related proportion % Awarded % Forfeited % Vested2 % Forfeited % John Kelly4 2024 875,763 5.0 – 100.0 – 100.0 Chief Executive Officer and Managing Director 2023 926,587 25.7 50.0 50.0 – 100.0 Tim Young5 2024 588,357 1.9 – 100.0 – 100.0 Chief Financial Officer 2023 330,104 20.2 50.0 50.0 – – Seb Rennie6 2024 528,155 0.0 – 100.0 – 100.0 Chief Commercial Officer 2023 56,638 – – – – – Grant Blackley7 2024 – – – – – – Chief Executive Officer and Managing Director 2023 2,432,688 12.7 50.0 50.0 – 100.0 Nick McKechnie8 2024 – – – – – – Chief Financial Officer 2023 92,749 (69.9) – – – 100.0 Brian Gallagher9 2024 – – – – – – Chief Sales Officer 2023 596,629 8.0 20.0 80.0 – 100.0 Total executive KMP 2024 1,992,275 2.8 – 100.0 – 100.0 2023 4,435,394 13.5 44.6 55.4 – 100.0 1 The short-term incentive opportunity awarded or vested during FY24 is the cash component of awards made under the Executive Incentive Plan. The Board resolved that no awards will be granted under the FY24 EIP. 2 There were no performance rights under SCA’s EIP eligible for vesting in FY24. 3 A portion of awards that may be made under SCA’s FY24 EIP are satisfied by the grant of performance rights that will be eligible for vesting after expiry of the three-year period on 30 June 2026. The Board resolved that no awards will be granted under the FY24 EIP. 4 John Kelly was appointed as Chief Executive Officer and Managing Director with effect from 1 July 2023. Before that, he had been Chief Operating Officer since February 2016. Mr Kelly’s former responsibilities as Chief Operating Officer were allocated among other Leadership Executives including Tim Young (CFO) whose responsibilities now include corporate strategy and negotiation of sports rights and other major contracts, and Seb Rennie (Chief Commercial Officer) whose responsibilities now include research and insights and Digital Audio sales. 5 Tim Young joined SCA as Chief Financial Officer on 30 January 2023. 6 Seb Rennie joined SCA as Head of LiSTNR Commercial on 20 March 2023. He was appointed Chief Commercial Officer and joined SCA’s Senior Leadership Team on 15 May 2023. He did not participate in the EIP during FY23 but was eligible for a cash short-term incentive in respect of his original role. 7 Grant Blackley resigned as Chief Executive Officer and Managing Director with effect from 30 June 2023. 8 Nick McKechnie resigned as Chief Financial Officer with effect from 14 October 2022. 9 Brian Gallagher resigned as Chief Sales Officer with effect from 15 May 2023. He continued in employment with SCA until 8 August 2023. 1.2 Non-executive Directors The aggregate remuneration of SCA’s non-executive directors during FY24 was $1,032,000, compared to $1,156,750 in FY23 and $1,280,600 in FY22. The aggregate remuneration of SCA’s non-executive directors is expected to be about $760,000 in FY25. Changes are due principally to reduction since FY22 in the number of non-executive directors from seven to four and changes in the compositions of the Board’s Committees. The principles for remuneration of non-executive directors are set out in section 2.7. Details of the remuneration of non-executive directors during the year are provided in section 3.3. 2024 Annual Report Directors’ Report | 37 2. Remuneration principles 2.1 Overview of executive remuneration The Company aims to ensure remuneration is competitive and appropriate for the results delivered. Executive reward is aligned with the achievement of strategic objectives and the creation of value for shareholders and is informed by market practice for executive reward. Executive remuneration packages include a mix of fixed and variable remuneration. More senior roles in the organisation have a greater weighting towards variable remuneration. The table below shows the target remuneration mix for executive KMP in FY23 and FY24. The STI portion is shown at target levels and the LTI portion is based on the value granted or to be granted in the relevant year Executive KMP Target remuneration mix Fixed remuneration Short-term1 Long-term2 FY24 FY23 FY24 FY23 FY24 FY23 John Kelly3 40% 50% 30% 25% 30% 25% Tim Young 50% 50% 25% 25% 25% 25% Seb Rennie 50% 50% 25% 25% 25% 25% 1. The EIP is a combined incentive plan under which awards are paid partly in cash and partly in equity performance rights that are eligible for vesting at the end of year 3. The percentages in this column are the cash component of an executive’s EIP opportunity in FY24. 2. The EIP is a combined incentive plan under which awards are paid partly in cash and partly in equity performance rights that are eligible for vesting at the end of year 3. The percentages in this column are the equity performance rights component of an executive’s EIP opportunity in FY24. 3 John Kelly was Chief Operating Officer in FY23 and was appointed as Chief Executive Officer and Managing Director with effect from 1 July 2023. 2.2 Fixed remuneration for executive KMP Fixed remuneration for executives is structured as a total employment package. Executives receive a combination of fixed base pay, at-risk incentive opportunities, and prescribed non-financial benefits at the executive’s discretion. SCA contributes superannuation on behalf of executives in accordance with the superannuation guarantee legislation. Fixed remuneration is reviewed annually to ensure the executive’s pay is competitive and appropriate for the results delivered. There are no guaranteed fixed remuneration increases included in any executive KMP contracts. FY24 was the first full year of service in their current role for each of SCA’s three executive KMP. The Board set their respective remuneration with the assistance of external search consultants and independent benchmarking advice from KPMG. With the Board’s endorsement, KPMG selected a comparator group comprising 34 companies in the Consumer Staples, Consumer Discretionary, Communication Services and Information Technology sectors with an average market capitalisation of between $200 million and $420 million along with certain other companies with similar market capitalisation. The Board approved total remuneration for these roles between the 60th and 80th percentile of the comparator group. 2.3 Variable remuneration for executive KMP The table below outlines details of the Company’s executive incentive plan (EIP) in FY24. The EIP operated for the first time in FY22. What is the incentive? The EIP is an annual at-risk bonus designed to reward executives for meeting or exceeding financial and non-financial objectives. How is each executive’s entitlement determined? Each executive is allocated a dollar value target (which may be a fixed percentage of the executive’s total remuneration) representing the executive’s maximum EIP opportunity for the one-year performance period. How is the incentive delivered? The EIP operates over five years as follows: – a one-year performance period commencing on 1 July in the first year of the EIP, after which individual and corporate performance is assessed and an EIP award may be made partly in cash and partly in grant of performance rights; – a two-year service period commencing on 1 July in the second year of the EIP, after which performance rights will be eligible for vesting and conversion to fully paid ordinary shares; and – a two-year retention period commencing on 1 July in the fourth year of the EIP, during which any shares allocated at the end of the service period are subject to a disposal restriction. To the extent the EIP performance conditions for an executive are satisfied during the performance period, SCA will make an EIP award to the executive. SCA will satisfy the dollar value of the EIP award by: – paying the executive the cash component of the EIP award; and – granting the executive performance rights with a face value equal to the equity component of the EIP award in two equal tranches. The number of performance rights granted to the executive is calculated by dividing the dollar value of the equity component of the EIP award by the face value of a performance right. The face value of a performance right is: – the volume weighted average price of SCA’s shares for the five trading days commencing seven days after SCA’s results for the performance period are announced to the ASX; less – the amount of any final dividend per share declared as payable in respect of the performance period. These performance rights will be eligible for vesting after the end of year 3, two years after their grant to the executive. This two-year period is referred to as the service period. Southern Cross Austereo 38 | Directors’ Report Directors’ Report For the year ended 30 June 2024 What are the performance measures and hurdles? The Board sets the annual goals for the CEO near the beginning of each financial year. The goals are allocated to three categories having regard to SCA’s business strategy: financial performance (60%), strategic execution (30%) and culture and behaviour (10%). In consultation with the Board, the CEO determines the annual goals for other leadership executives in the same three categories and having regard to their areas of responsibility. Financial performance (60%) The financial performance metrics that applied under the EIP for all executive KMP in FY24 are summarised below. – Group EBITDA compared to budget: This is a core measure of operational profitability and, as such, is measured excluding significant items. This EBITDA measure is the one used throughout the Remuneration Report unless otherwise noted. – Revenue compared to budget: Targets may be set for total revenue or for specific categories of revenue, such as Digital Audio revenue. – Non-Revenue Related costs compared to budget: These controllable costs exclude costs such as agency commissions and television affiliation fees that are variable with revenue. Achievements against financial metrics are based on SCA’s audited annual financial report. The Board has discretion to adjust targets and outcomes to ensure executive reward is appropriately linked to corporate performance. For this purpose, the Board may consider matters including SCA’s overall corporate performance and progress against strategic objectives; significant non-cash items (such as impairment losses); acquisitions, divestments, one-off events; and abnormal or non-recurring items. The results of investments are typically excluded from executive incentive measurements. Strategic execution (30%) Goals for strategic execution are tailored to the individual responsibilities of each executive. These goals focus on implementation of strategic initiatives, major projects, and material operational improvements designed to deliver growth, improved and sustainable business performance, and shareholder value. These goals may include financially based targets for strategic or growth-oriented parts of the business for which SCA has long-term aspirations. Culture and behaviour (10%) Goals for culture and behaviour are tailored to the individual responsibilities of each executive. These goals focus on maintaining a positive corporate culture, effective leadership, and development, retaining talent, and building effective external relationships to improve and sustain long-term business performance and shareholder value. Is there a gateway? The following minimum performance and vesting schedules apply for EIP awards based on financial metrics: EBITDA – percentage of budget Vesting percentage Below 95% Nil 95% 50% Above 95% to 102.5% Straight-line vesting between 50% and 100% Above 102.5% 100% Revenue – percentage of budget Vesting percentage Below 97% Nil 97% 50% Above 97% to 100% Straight-line vesting between 50% and 100% Above 100% 100% Non-revenue related costs – percentage of budget Vesting percentage Above budget Nil On budget or below 100% None of the above financial measures operates as a gateway to an award being made under any other financial or non-financial measure. Individual performance must be at a ‘meets expectations’ level before any EIP award will be made. What is the maximum amount payable? The maximum award under the FY24 EIP is 100% of an executive’s EIP target opportunity if all vesting conditions are fully satisfied over the one-year performance period. 2024 Annual Report Directors’ Report | 39 How is performance assessed? The Board will calculate the financial measures under the EIP at the end of the performance period. SCA may engage an independent consultant to review or carry out these calculations. The Board has discretion to adjust targets and outcomes to ensure executive reward is appropriately linked to corporate performance. CEO: At the end of the financial year, with the assistance of the Board’s People & Culture Committee, the Board assesses the performance of the CEO against the applicable non-financial measures and determines the extent to which the CEO has achieved applicable targets. In doing so, the Board may consider the CEO’s achievements in the context of SCA’s overall performance. Other executive KMP and leadership executives: At the end of the financial year, the CEO assesses the performance of the other leadership executives against the applicable non-financial measures and determines the extent to which each leadership executive has achieved applicable targets. In doing so, the CEO may consider each leadership executive’s achievements in the context of SCA’s overall performance. The CEO provides these assessments to the People & Culture Committee for review. Vesting of performance rights after service period If the executive remains employed by SCA at the end of the two-year service period: – Tranche 1 of the executive’s EIP award will vest at that time; and – Tranche 2 of the executive’s EIP award will be eligible for vesting according to the following scale of SCA’s EPS growth during the first three years of each EIP cycle (comprising the one-year performance period and the two-year service period). 3-year EPS CAGR % of Tranche 2 that vests 1.5% or below Nil Above 1.5% – 8.0% Straight-line vesting between 0% and 100% Above 8.0% 100% SCA will allocate one fully paid ordinary share for each of the executive’s performance rights that vests at the end of the two-year service period. An executive will receive an additional allocation of fully paid ordinary shares with a value equal to the dividends paid on vested rights in respect of the two-year service period. The Board has discretion to settle vested awards in cash. Any performance rights that do not vest at the end of the service period will lapse. The Board has discretion to fulfil SCA’s obligation to allocate shares on vesting by issuing new shares or acquiring shares on-market. Shares allocated under the EIP are subject to disposal restrictions for two years (until 1 July after the end of year 5) or cessation of the executive’s employment, whichever is earlier. For leadership executives, these shares will be subject to further disposal restrictions under the Senior Executive Share Ownership Policy unless the leadership executive has accumulated the target shareholding required under that policy. Cessation of employment If an executive ceases employment with SCA during the five-year term of an EIP cycle, the treatment of executive’s rights under the EIP will be determined by the time and circumstances of the cessation of employment as explained below. During performance period Bad Leavers (who resign or are terminated for cause) during the year 1 performance period will not be eligible for an award under the EIP. For an executive who ceases employment for other reasons during the performance period, the Board has discretion to make an award to the executive under the EIP on a pro-rata basis considering time and the performance to date against the applicable performance measures, to hold the EIP award to be tested against the applicable performance measures at the end of the original performance period , or to treat the EIP award in any other manner it considers appropriate. During service period Bad Leavers (who resign or are terminated for cause) during the two-year service period will forfeit any unvested performance rights, unless otherwise determined by the Board. For executives who cease employment during the service period for other reasons, the Board has discretion to vest any unvested performance rights on a pro-rata basis considering time and the performance to date against the EPS performance hurdle, to hold all or a part of any unvested performance rights to be tested against the EPS performance hurdle at the end of the original service period, or to treat the award in any other manner it deems appropriate. After service period If an executive ceases employment with SCA after the service period, SCA will release the executive’s shares from any remaining restrictions on disposal. Southern Cross Austereo 40 | Directors’ Report Directors’ Report For the year ended 30 June 2024 Change of control If a change of control event in relation to SCA occurs before assessment of performance under an EIP award or before vesting of performance rights granted under an EIP award, the Board has discretion as to how to treat the unassessed award or unvested performance rights, including to forfeit or make an award in whole or in part, to determine performance rights will vest or lapse in whole or in part, or that performance rights will continue subject to the same or different conditions. In exercising its discretion, the Board may consider the proportion of the performance period and the service period that has passed at the time of the change of control, the performance to date of SCA and the executive against applicable performance conditions , and any other matters the Board considers to be relevant. Clawback The Board may reconsider the level of satisfaction of a performance hurdle and take steps to reduce the benefit of an EIP award to the extent its vesting was affected by fraud, dishonesty, breach of obligation or other action likely to result in long-term detriment to SCA. Other features Treatment of dividends: There are no dividends payable to executives on unvested performance rights. Once performance rights have vested to fully paid ordinary shares, the executive will be entitled to dividends on these shares. In addition, upon vesting of an executive’s performance rights, the executive will receive an additional allocation of fully paid ordinary shares with a value equal to the dividends paid on vested rights in respect of the two-year service period. Sourcing of shares: The Board has discretion to purchase shares on-market or to issue new shares in respect of vested performance rights. The Board typically chooses to purchase shares on-market for this purpose. Retention of shares: Participants must retain any shares allocated to them upon vesting of performance rights for two years or until cessation of employment, whichever is earlier. SCA’s Senior Executive Share Ownership Policy also applies to shares allocated to leadership executives on vesting of performance rights under the EIP. 2.4 Consequences of performance on shareholder value In considering the Group’s performance and the benefits for shareholder value, the Board has regard to the following indicators in the current financial year and the preceding four financial years. 30 June 2024 $’000 30 June 2023 $’000 30 June 2022 $’000 30 June 2021 $’000 30 June 2020 $’000 Revenue 499,405 504,294 519,682 528,649 540,152 EBITDA1 66,209 77,169 89,646 125,936 111,133 EBITDA % 13.3% 15.3% 17.3% 23.8% 20.0% Net (loss)/profit before tax (320,578) 27,253 (214,068) 71,282 38,294 Net (loss)/profit after tax (NPAT) (224,604) 19,109 (153,722) 48,096 25,100 NPAT % (45.0)% 3.8% (29.6%) 9.1% 4.6% Net profit after tax excluding significant items 11,152 21,882 28,554 48,096 34,193 NPAT % excluding significant items 2.2% 4.3% 5.5% 9.1% 6.3% EPS (cents)1 4.65 8.85 10.82 24.1 17.69 Opening share price2,4 $0.865 $0.99 $2.093 $1.75 $8.60 Closing share price2,4 $0.61 $0.865 $0.99 $2.093 $1.75 Dividend/Distribution5 1.0c 9.35c 9.50c 0.00c 4.00c 1 EBITDA and EPS are shown after adjustments to exclude the impact of significant or non-recurring items as approved by the Board for the purposes of SCA’s EIP. 2 On 4 May 2020, the Company completed a $169.6 million equity raising. The equity raising consisted of a pro-rata accelerated non-renounceable rights issue and placement, resulting in the issue of 1,873,092,080 shares. 3 On 30 October 2020, the Company’s shareholders approved a one for 10 consolidation of the Company’s share capital. The consolidation was implemented on 2 November 2020. As a result, the number of shares on issue reduced from 2,642,105,685 to 264,214,027. 4 Opening and closing share prices and dividends per share have been adjusted for the rights issue component of the equity raising referred to in note 2 and the consolidation of share capital referred to in note 3 (Source: Capital IQ) 5 Dividends paid during FY20 represent amounts paid per share prior to the equity raising and prior to the share consolidation. 2024 Annual Report Directors’ Report | 41 2.5 Executive service contracts SCA has entered service contracts setting out the terms of employment of each executive KMP. All service contracts are for an indefinite term, subject to termination by either party on up to six months’ notice. Each executive service contract provides for the payment of base salary and participation in SCA’s incentive plans, along with other prescribed non-monetary benefits. 2.6 Services from remuneration consultants The Board engaged KPMG during the year to prepare a report benchmarking the Board’s size, committee structure and remuneration. The Board also engaged KPMG to advise on executive remuneration strategies relating to the additional work required of certain executives to respond to the non-binding indicative offer received from the consortium comprising ARN Media and Anchorage Capital Partners, and the change of control that would have occurred had that offer proceeded. KPMG did not make any remuneration recommendations (as defined in the Corporations Act). KPMG was paid a total of $81,873 for these services. Deloitte was engaged during the year to advise on valuation of outstanding entitlements granted under SCA’s EIP. Deloitte did not make any remuneration recommendations (as defined in the Corporations Act). Deloitte was paid $1,500 for these services. 2.7 Remuneration of non-executive directors SCA enters a letter of appointment with each non-executive director. The letter sets out the Board’s expectations for non-executive directors and the remuneration payable to non-executive directors. The maximum annual aggregate fee pool for non-executive directors is $1,500,000. This was confirmed in amendments to the Constitution approved by shareholders at the 2020 AGM. The Chair receives a fixed aggregate fee. Other non-executive directors receive a base fee for acting as a Director and additional fees for acting as chair or as a member of the Board’s committees. Non-executive directors do not receive performance-based fees and are not entitled to retirement benefits. The table below sets out the scale of fees for non-executive directors that applied in FY23 and FY24 and those that will apply in FY25. The Board has decided to reduce its fees in FY25. This followed the Board’s consideration of an independent benchmarking report from KPMG. FY23 $ FY24 $ FY25 $ Base fees – Annual Chair1 273,000 273,000 270,000 Other non-executive directors 136,500 136,500 135,000 Committee fees – Annual Audit & Risk Committee – Chair 23,000 23,000 20,000 Audit & Risk Committee – member 15,500 15,500 10,000 People & Culture Committee – Chair1 23,000 23,000 20,000 People & Culture Committee – member 15,500 15,500 10,000 Digital Transformation Committee2 – Chair 23,000 23,000 – Digital Transformation Committee – member 15,500 15,500 – Nomination Committee2 – Chair 16,500 – – Nomination Committee – member 11,000 – – 1 The Chair does not receive additional fees for committee work. While Heith Mackay-Cruise serves as Chair of the People & Culture Committee, he will not receive an additional fee for acting as Chair of that Committee. 2 The Board disbanded the Nomination Committee in June 2023 and the Digital Transformation Committee in December 2023 and has resumed responsibility for the matters formerly delegated to those Committees. Members of the Nomination Committee waived their fees in FY23 because the Nomination Committee did not meet during that year. Southern Cross Austereo 42 | Directors’ Report Directors’ Report For the year ended 30 June 2024 3. Remuneration of executive KMP and directors during the year 3.1 Total remuneration received by executive KMP in FY24 (non-statutory disclosures) The remuneration in the table below is aligned to the current performance period and provides an indication of alignment between the remuneration received in the current year and long-term performance. The amounts in this table will not reconcile with those provided in the statutory disclosures in section 3.2. For example, the executive KMP table in section 3.2 discloses the value of performance rights granted under the EIP which might or might not vest in future years, while the table below discloses the value of EIP grants from previous years which vested in the current year. Executive KMP2 Year Cash salary and fees $ EIP cash bonus1 $ Non- monetary benefits $ Super- annuation benefits $ EIP rights vested in the year2 $ Total $ John Kelly3 2024 786,392 – 3,732 27,399 – 817,522 Chief Executive Officer and Managing Director 2023 595,166 159,250 4,588 25,292 – 784,297 Tim Young4 2024 537,786 – 2,311 27,399 – 567,496 Chief Financial Officer 2023 246,777 55,729 – 12,646 – 315,152 Seb Rennie5 2024 488,876 – 3,749 27,399 – 520,024 Chief Commercial Officer 2023 52,781 – – 2,824 – 55,605 Grant Blackley6 2024 – – – – – – Chief Executive Officer and Managing Director 2023 1,168,086 350,200 4,371 25,292 – 1,547,949 Nick McKechnie7 2024 – – – – – – Chief Financial Officer 2023 168,127 – 1,511 8,661 – 178,299 Brian Gallagher8 2024 – – – – – – Chief Sales Officer 2023 488,300 60,900 3,699 22,105 – 575,003 Total executive KMP 2024 1,813,054 – 9,791 82,196 – 1,905,042 2023 2,719,236 626,079 14,169 96,821 – 3,456,305 1 The EIP cash bonus is for performance during the year using the criteria set out in section 2.3. The Board resolved not to make any awards under the FY24 EIP. 2 No performance rights under the EIP vested during the year. A portion of the performance rights granted under the FY22 EIP will vest during FY25 based on corporate performance during the three-year period ended on 30 June 2024 in accordance with the criteria set out in section 2.3. 3 John Kelly was appointed as Chief Executive Officer and Managing Director with effect from 1 July 2023. Before that, he had been Chief Operating Officer since February 2016. 4 Tim Young joined SCA as Chief Financial Officer on 30 January 2023 and received a $50,000 sign-on payment included in Cash salary and fees above. 5 Seb Rennie joined SCA as Head of LiSTNR Commercial on 20 March 2023. He was appointed Chief Commercial Officer and joined SCA’s Senior Leadership Team on 15 May 2023. He did not participate in the EIP during FY23 but was eligible for a cash short-term incentive. 6 Grant Blackley resigned as Chief Executive Officer with effect from 30 June 2023. The Board approved payment to him of the cash component of his award under the FY23 EIP based on his performance during FY23. However, the Board declined to grant performance rights to him under the FY23 EIP. He also received termination benefits relating to his nine month restraint of trade period commencing on 1 July 2023. 7 Nick McKechnie resigned as Chief Financial Officer with effect from 14 October 2022. 8 Brian Gallagher resigned as Chief Sales Officer with effect from 15 May 2023. He continued in employment with SCA until 8 August 2023. 2024 Annual Report Directors’ Report | 43 3.2 Total remuneration received by Executive KMP in FY24 (statutory disclosure) The table below sets out the nature and amount of each major element of the remuneration of each executive KMP in FY24 and FY23. Short-term employee benefits Post- e’ment Long Service Leave Termin- ation 1 benefits Share- based pay- ments Total Perf- related pro- portion Executive KMP4 Fin year Salary and fees $ EIP cash bonus $ Non- 2 monetary $ Total $ Super con- tribution $ $ $ Perf rights $ 3 $ % John Kelly4 2024 786,392 – 3,732 790,124 27,399 14,082 – 44,158 875,763 5.0 Chief Executive Officer and Managing Director 2023 595,166 159,250 4,588 759,004 25,292 63,523 – 78,767 926,586 25.7 Tim Young5 2024 537,786 – 2,311 540,097 27,399 9,837 – 11,024 588,357 1.9 Chief Financial Officer 2023 246,777 55,729 – 302,506 12,646 4,062 – 10,890 330,104 20.2 Seb Rennie6 2024 488,876 – 3,749 492,625 27,399 8,132 – – 528,155 – Chief Commercial Officer 2023 52,781 – – 52,781 2,824 1,033 – – 56,638 0.0 Grant Blackley7 2024 – – – – – – – – – – CEO and Managing Director 2023 1,168,086 350,200 4,371 1,522,657 25,292 60,446 864,582 (40,289) 2,432,688 12.7 Nick McKechnie8 2024 – – – – – – – – – – Chief Financial Officer 2023 168,127 – 1,511 169,638 8,661 (20,745) – (64,805) 92,749 (69.9) Brian Gallagher9 2024 – – – – – – – – – – Chief Sales Officer 2023 488,299 60,900 3,699 552,898 22,105 34,843 – (13,217) 596,629 8.0 Total executive KMP 2024 1,813,054 – 9,791 1,822,845 82,196 32,050 – 55,183 1,992,275 2.8 2023 2,719,236 626,079 14,169 3,359,484 96,820 143,162 864,582 (28,654) 4,435,394 13.5 1 Long service leave relates to amounts accrued during the year. 2 The EIP cash bonus is for performance during the year using the criteria set out in section 2.3. The Board resolved not to make any awards under the FY24 EIP. 3 The value disclosed is the portion of the fair value of the rights recognised as an expense in each reporting period. 4 John Kelly was appointed as Chief Executive Officer and Managing Director with effect from 1 July 2023. Before that, he had been Chief Operating Officer since February 2016. 5 Tim Young joined SCA as Chief Financial Officer on 30 January 2023 and received a $50,000 sign-on payment included in Salary and fees above. 6 Seb Rennie joined SCA as Head of LiSTNR Commercial on 20 March 2023. He was appointed Chief Commercial Officer and joined SCA’s Senior Leadership Team on 15 May 2023. He did not participate in the EIP during FY23 but was eligible for a cash short-term incentive in respect of his original role. 7 Grant Blackley resigned as Chief Executive Officer with effect from 30 June 2023. The Board approved payment to him of the cash component of his award under the FY23 EIP based on his performance during FY23. However, the Board declined to grant performance rights to him under the FY23 EIP. The termination benefits relate to his nine-month restraint of trade period commencing on 1 July 2023. 8 Nick McKechnie resigned as Chief Financial Officer with effect from 14 October 2022 and did not participate in the EIP during FY23. The Board approved payment to him of the cash component of his award under the FY22 EIP based on his performance during FY22. However, the Board declined to grant performance rights to him under the FY22 EIP. 9 Brian Gallagher resigned as Chief Sales Officer with effect from 15 May 2023. He continued in employment with SCA until 8 August 2023. The Board approved payment to him of the cash component of his award under the FY23 EIP based on his performance during FY23. However, the Board declined to grant performance rights to him under the FY23 EIP. Southern Cross Austereo 44 | Directors’ Report Directors’ Report For the year ended 30 June 2024 3.3 Non-executive Directors The table below sets out the nature and amount of each major element of the remuneration of each non-executive director in FY24 and FY23. A non-executive director’s salary and fees are based on the scale set out in section 2.7 and membership of the Board’s committees as set out in the Directors’ Report. Non-executive Director Year Short-term employee benefits Post- employment Total $ Salary and fees $ Non- monetary $ Total $ Super contribution $ Heith Mackay-Cruise1 2024 199,500 – 199,500 – 199,500 Chair 2023 156,109 – 156,109 16,391 172,500 Carole Campbell 2024 154,167 – 154,167 16,958 171,125 Non-executive Director 2023 153,695 – 153,695 16,138 169,833 Ido Leffler 2024 147,410 – 147,410 16,215 163,625 Non-executive Director 2023 151,584 – 151,584 15,916 167,500 Helen Nash 2024 159,200 – 159,200 8,300 167,500 Non-executive Director 2023 153,846 – 153,846 16,154 170,000 Rob Murray2 2024 184,459 – 184,459 20,291 204,750 Chair 2023 248,708 – 248,708 25,292 274,000 Glen Boreham3 2024 125,500 – 125,500 – 125,500 Non-executive Director 2023 175,000 – 175,000 – 175,000 Melanie Willis4 2024 – – – – – Non-executive Director 2023 25,263 – 25,263 2,654 27,917 TOTAL 2024 970,236 – 970,236 61,764 1,032,000 2023 1,064,205 – 1,064,205 92,545 1,156,750 1 Heith Mackay-Cruise was appointed as Chair of the Board on 27 March 2024. Before that date, he was Chair of the People & Culture Committee and a member of the Audit & Risk Committee. 2 Rob Murray resigned as a Director on 27 March 2024. 3 Glen Boreham resigned as a Director on 27 March 2024. 4 Melanie Willis resigned as a Director on 31 August 2022. 4. Analysis of incentives included in remuneration 4.1 EIP performance outcomes 4.1.1 Selected EIP measures The table below summarises SCA’s performance against the financial and profitability measures and selected other corporate measures included in the KPIs for executive KMP under the EIP in FY24. Group EBITDA Target $’000 Actual% $’000 % Target Vesting % Executive KMP $88,000 $66,209 75% – CEO, CFO, CCO Non-Revenue Related costs Target $’000 Actual $’000 % Target Vesting % Executive KMP $331,900 $308,446 93% 100% CEO, CFO, CCO Group advertising revenue Target $’000 Actual $’000 % Target Vesting % Executive KMP $512,500 $465,825 91% – CEO, CFO, CCO Digital Audio EBITDA Target $’000 Actual $’000 % Target Vesting % Executive KMP ($9,100) ($10,909) 80% – CEO, CFO 2024 Annual Report Directors’ Report | 45 Digital Audio revenue Target $’000 Actual $’000 % Target Vesting % Executive KMP $44,700 $38,317 86% 52% CCO Annualised cost savings Target $’000 Actual $’000 % Target Vesting % Executive KMP $15,000 $31,100 207% 100% CEO, CFO 4.1.2 EIP outcomes for executive KMP The table below summarises the key performance indicators (KPIs) applicable for each executive KMP under SCA’s EIP for FY24 and the outcome for each executive KMP in each EIP component. The Board assessed that executive KMP and other leadership executives achieved a portion of their respective EIP opportunities. However, considering that SCA’s corporate revenue and earnings outcomes fell short of targets and the ongoing deterioration in SCA’s share price during the year, the Board accepted management’s recommendation that no awards should be made under the FY24 EIP. Executive KMP Goals Outcomes John Kelly, CEO and Managing Director Profitability and financial performance (60%) Group EBITDA, non-revenue related costs, Group advertising revenue compared to budget Refer to tables in section 4.1.1. 18% Strategy execution (30%) Achieve Digital Audio EBITDA target Achieved 10% Improve investment market perceptions of SCA Not assessed Deliver annualised costs savings greater than $15 million Achieved Cultural and behavioural influences (10%) Maintain organisational culture survey performance Survey not conducted Complete succession planning initiatives Achieved 5% Total 33% After Board discretion Nil Tim Young, Chief Financial Officer Profitability and financial performance (60%) Group EBITDA, non-revenue related costs, Group advertising revenue compared to budget Refer to tables in section 4.1.1. 18% Strategy execution (30%) Achieve Digital Audio EBITDA target Achieved 10% Improve investment market perceptions of SCA Not assessed Deliver annualised costs savings greater than $15 million Achieved Cultural and behavioural influences (10%) Maintain organisational culture survey performance Survey not conducted Complete succession planning initiatives Achieved 5% Total 33% After Board discretion Nil Seb Rennie, Chief Commercial Officer Profitability and financial performance (60%) Group EBITDA, non-revenue related costs, Group advertising revenue compared to budget Refer to tables in section 4.1.1. 18% Strategy execution (30%) Grow Digital Audio revenues to $44.7 million Not achieved 15% Achieve target for LiSTNR average revenue per user Not achieved Implement improved commercial operating model to support revenue goals and diversity and inclusion goals Achieved Cultural and behavioural influences (10%) Maintain organisational culture survey performance Survey not conducted Complete succession planning initiatives Achieved 5% Total 38% After Board discretion Nil Southern Cross Austereo 46 | Directors’ Report Directors’ Report For the year ended 30 June 2024 4.2 EIP awards The table below sets out details of the incentive awards granted as remuneration to executive KMP for the year. The Board assessed that executive KMP and other leadership executives achieved a portion of their respective EIP opportunities. However, considering that SCA’s corporate revenue and earnings outcomes fell short of targets and the ongoing deterioration in SCA’s share price during the year, the Board accepted management’s recommendation that no awards should be made under the FY24 EIP. Executive incentive plan % achieved in year KMP Cash award $ Performance rights to be 1 granted $ Profitability 2 and financial performance Strategy execution Cultural and behavioural influences Total Adjusted total Forfeited3 John Kelly – – 18% 10% 5% 33% 0% 100% Tim Young – – 18% 10% 5% 33% 0% 100% Seb Rennie – – 18% 15% 5% 38% 0% 100% 1 Amounts included in remuneration for the year represent the cash component of EIP awards related to the year based on achievement of corporate and personal goals for each executive. The Board resolved not to make any awards under the FY24 EIP. 2 Any performance rights would have been granted during September 2024 based on the face value of performance rights to be determined as set out in section 2.3. The Board resolved not to make any awards under the FY24 EIP. 3 The amounts forfeited are due to corporate and personal goals not being achieved in the year. 5. Share-based incentive payments All references to rights in this section are to performance rights over fully paid ordinary shares in SCA issued under SCA’s EIP. Rights are convertible into fully paid ordinary shares in SCA on a one-for-one basis upon vesting in accordance with SCA’s EIP. There are no options on issue under SCA’s EIP. 5.1 Rights granted as remuneration during the year The tables below set out details of the rights over shares granted as remuneration during the year to SCA’s executive KMP under SCA’s FY23 EIP. As noted in section 4.2, these performance rights were granted under the EIP during September 2023 based on the face value of performance rights determined as set out in section 2.3. Executive KMP EIP Vesting date Perf rights granted Face value John Kelly FY23 30 Jun 2025 216,637 $0.7351 Tim Young1 FY23 30 Jun 2025 75,812 $0.7351 Seb Rennie2 FY23 – – – 1 Tim Young joined SCA as Chief Financial Officer on 30 January 2023. His participation in the FY23 EIP was pro-rated according to his period of service. 2 Seb Rennie joined SCA as Head of LiSTNR Commercial on 20 March 2023. He was appointed Chief Commercial Officer and joined SCA’s Senior Leadership Team on 15 May 2023. He did not participate in the EIP during FY23 but was eligible for a cash short-term incentive in respect of his original role. All performance rights expire on the earlier of their vesting date or termination of the executive’s employment. When an executive ceases employment as a good leaver, the executive’s rights will typically be forfeited on a pro-rata basis according to the executive’s period of service. The rights vest at the end of the performance period specified at the time of their grant. This is 30 June 2025 for performance rights granted under the FY23 EIP. In addition to a continuing employment condition, vesting is conditional on SCA achieving specified performance hurdles. Details of the performance hurdles are included in the discussion of the EIP in section 2.3. As set out in section 2.3, each executive will also receive an additional allocation of fully paid ordinary shares with a value equal to the dividends paid on vested rights in respect of FY24 and FY25. 2024 Annual Report Directors’ Report | 47 5.2 Details of equity incentives affecting current and future remuneration The table below sets out the vesting profiles of rights held by each executive KMP on 30 June 2024 and details of rights that vested during the year. At the end of the year, there were no rights that had vested and had not been exercised by conversion to fully paid ordinary shares. Executive KMP Grant date1 Vesting date At grant date During FY24 At year end Perf rights granted Perf rights value 2 $ 3 Perf rights vested and exercised Perf rights vested and exercised % Perf rights forfeited Perf rights forfeited % Perf rights 4 cancelled4 Perf rights cancelled % Perf rights 4 not vested Perf rights not vested value $ 2 John Kelly FY24 1/7/25 216,637 159,228 – – – – – – 216,637 159,228 FY23 1/7/24 122,049 125,100 – – – – – – 122,049 125,100 Total 338,686 284,328 – – – – – – 338,686 284,328 Tim Young FY24 1/7/25 75,812 55,722 – – – – – – 75,812 55,722 Total 75,812 55,722 – – – – – – 75,812 55,722 Seb Rennie Total – – – – – – – – – – – Total 414,498 340,050 – – – – – – 414,498 340,050 1 Performance rights granted during FY23 relate to the FY22 EIP. Performance rights granted during FY24 relate to the FY23 EIP. 2 As set out in section 2.3, upon vesting of performance rights granted under the FY22 EIP, each executive will receive an additional allocation of fully paid ordinary shares with a face value equal to the dividends paid on vested rights in respect of FY23 and FY24. 3 The value of rights granted is the fair value of rights calculated at the grant date. The total value of rights granted in the table is allocated to remuneration over the vesting period. 4 The number and percentage of rights forfeited during the year is the reduction from the maximum number of rights available to vest due to the performance criteria not being satisfied or to rights being cancelled by the Board. 5.3 Vesting of rights during the year There were no performance rights under the EIP that were eligible for vesting during FY24. 5.4 Grants of rights since 30 June 2024 Considering that SCA’s corporate revenue and earnings outcomes fell short of targets and the ongoing deterioration in SCA’s share price during the year, the Board accepted management’s recommendation that no awards should be made under the FY24 EIP. Executive KMP EIP Vesting date Perf rights face value John Kelly FY24 Not applicable – Tim Young FY24 Not applicable – Seb Rennie FY24 Not applicable – 5.5 Vesting of rights after 30 June 2024 Performance rights awarded under the FY22 EIP are eligible to vest based on continuity of employment and corporate financial performance during the three years ended on 30 June 2024 and dividends paid or payable in respect of FY23 and FY24. Tranche 1 (50%) of these performance rights granted in September 2022 will vest based on continuity of employment. Tranche 2 (50%) was eligible to vest according to the following schedule: 3-year EPS CAGR 3-year EPS vesting range % of Tranche 2 that vests FY21 EPS 18.2 cps 1.5% or below 19.0 cps or below Nil Above 1.5% – 8.0% 19.0 – 22.9 cps Straight-line vesting between 0% and 100% Above 8.0% Above 22.9 cps 100% Based on the FY24 earnings per share excluding significant items of 4.65 cps, SCA’s EPS CAGR over the three-year period to 30 June 2024 was (36.6)%. Accordingly, Tranche 2 of the performance rights awarded under the FY22 EIP will not vest. Vesting of Tranche 1 of the performance rights awarded under the FY22 EIP (including rights awarded for dividends paid or payable in respect of FY23 and FY24) will be reported in FY25. Southern Cross Austereo 48 | Directors’ Report Directors’ Report For the year ended 30 June 2024 6. Payments to executives before taking office There were no payments made during the year to any person as part of the consideration for the person taking office. 7. Transactions with KMP 7.1 Loans to KMP There were no loans made to KMP or their related parties during the year. 7.2 Other transactions and balances with KMP There were no other transactions with KMP or their related parties during the year. 8. KMP shareholdings 8.1 Balances and movements in KMP shareholdings The table below sets out the movements in shares held directly or indirectly by KMP during the year. Share balance at start of year Vesting of EIP rights Other changes Share balance at end of year1 Non-executive Directors Heith Mackay-Cruise 100,000 – 20,000 120,000 Carole Campbell 78,250 – 50,000 128,250 Ido Leffler 65,800 – – 65,800 Helen Nash 28,875 – – 28,875 Rob Murray 65,167 – – 65,167 Glen Boreham 48,462 – – 48,462 Totals 386,554 – 70,000 456,554 Executives John Kelly 194,049 – – 194,049 Tim Young 16,307 – 12,422 28,729 Seb Rennie – – – – Totals 210,356 – 12,422 222,778 1 Share balance at end of year, or for Rob Murray and Glen Boreham on the date they retired as Directors and ceased being KMP. 2024 Annual Report Directors’ Report | 49 8.2 Board’s target share ownership policies The Board’s non-executive director Share Ownership Policy requires non-executive directors to invest an amount not less than the base fee of a non-executive director in acquiring SCA shares. A non-executive director is required to do so within three years after appointment as a Director. The proceeds of any sales of shares will be deducted from a non-executive director’s invested amount. From 1 July 2024, the base fee for non-executive directors is $135,000. The table below shows the status under this policy of non-executive directors’ shareholdings on 30 June 2024. Share balance at end of year FY24 Base fee $ Invested amount $ Achieved target? Due date to achieve target1 Non-executive Director Heith Mackay-Cruise 120,000 135,000 178,200 Yes – Carole Campbell 128,250 135,000 175,057 Yes – Ido Leffler 65,800 135,000 114,608 No Oct 2023 Helen Nash 28,875 135,000 144,033 Yes – 342,925 611,898 1 Because of corporate activity and the Board’s consideration of related confidential proposals, SCA maintained a blackout on buying or selling SCA shares for much of FY24. This has affected the ability of some Directors to acquire their target shareholding. The Board’s Senior Executive Share Ownership Policy requires executive KMP (and the CEO’s other direct executive reports) to invest an amount not less than 50% of the executive’s base salary (excluding superannuation) in acquiring SCA shares. The CEO must invest an amount not less than 100% of the CEO’s base salary (excluding superannuation) in acquiring SCA shares. The market price at the time of allocation to an executive of shares under one of SCA’s executive incentive plans is included in the executive’s invested amount. The proceeds of any sales of shares will be deducted from an executive’s invested amount. There is no due date by which an executive must acquire the target shareholding. The table below shows the status under this policy of the shareholding of each executive KMP on 30 June 2024. Balance at end of year FY24 Base salary $ Invested amount $ Achieved target? 1 Executive KMP John Kelly 194,049 772,601 295,248 No Tim Young 28,729 535,000 25,000 No Seb Rennie – 450,000 – No Totals 222,778 320,248 1 Because of corporate activity and the Board’s consideration of related confidential proposals, SCA maintained a blackout on buying or selling SCA shares for much of FY24. This has affected the ability of the executive KMP to acquire their target shareholding. Auditor’s Independence Declaration A copy of the Auditor’s Independence Declaration, as required under s307C of the Corporations Act 2001, is set out on page 51. This report is signed in accordance with resolutions of the Directors of Southern Cross Media Group Limited. Heith Mackay-Cruise Chair Southern Cross Media Group Limited Sydney, Australia 29 August 2024 John Kelly Managing Director Southern Cross Media Group Limited Sydney, Australia 29 August 2024 Southern Cross Austereo 50 | Directors’ Report Directors’ Report For the year ended 30 June 2024 PricewaterhouseCoopers, ABN 52 780 433 757 2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au Liability limited by a scheme approved under Professional Standards Legislation. Auditor’s Independence Declaration As lead auditor for the audit of Southern Cross Media Group Limited for the year ended 30 June 2024, I declare that to the best of my knowledge and belief, there have been: (a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and (b) no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Southern Cross Media Group Limited and the entities it controlled during the period. Trevor Johnston Melbourne Partner PricewaterhouseCoopers 29 August 2024 2024 Annual Report Directors’ Report | 51 Auditor’s Independence Declaration Note 2024 $’000 2023 $’000 Revenue from continuing operations 3 499,405 504,294 Revenue related expenses (124,750) (126,130) Employee expenses (213,111) (203,091) Program and production (26,755) (25,305) Technical expenses (46,401) (42,481) Promotions and marketing (10,996) (14,859) Administration costs (24,763) (21,181) Other income 5 2,542 1,264 Share of net profit of investments accounted for using the equity method 18 369 697 Depreciation and amortisation expense (31,087) (29,155) Impairment of broadcast radio licences 4 (326,126) – Interest expense and other borrowing costs 16 (19,217) (17,920) Interest revenue 312 1,120 Profit/(Loss) before income tax expense for the year from continuing operations (320,578) 27,253 Income tax (expense)/credit from continuing operations 6 95,974 (8,144) Profit/(Loss) from continuing operations after income tax expense for the year (224,604) 19,109 Other comprehensive income that may be reclassified to profit or loss: Changes to fair value of cash flow hedges, net of tax (175) (38) Total comprehensive Profit/(Loss) for the year attributable to shareholders (224,779) 19,071 Earnings per share attributable to the ordinary equity holders of the Company: Basic earnings per share (cents) 14 (93.6) 7.73 Diluted earnings per share (cents) 14 (93.6) 7.63 The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes. Southern Cross Austereo 52 | Consolidated Statement of Comprehensive Income Consolidated Statement of Comprehensive Income For the year ended 30 June 2024 Note 2024 $’000 2023 $’000 Current assets Cash and cash equivalents 10 10,540 12,963 Receivables 11 105,388 98,650 Current tax asset 6 923 1,295 Total current assets 116,851 112,908 Non-current assets Receivables 11 9,721 10,919 Derivative financial instruments 17 485 736 Right-of-use assets 24 104,728 109,723 Investments 18 5,790 6,326 Property, plant and equipment 7 63,239 76,813 Intangible assets 8 391,503 712,120 Total non-current assets 575,466 916,637 Total assets 692,317 1,029,545 Current liabilities Payables 11 40,780 43,739 Deferred income 11 4,926 5,532 Provisions 11 21,433 20,333 Lease liability 24 7,752 7,105 Total current liabilities 74,891 76,709 Non-current liabilities Deferred income 11 84,162 86,269 Provisions 11 3,918 4,107 Borrowings 16 117,543 117,243 Lease liability 24 120,523 122,936 Deferred tax liability 6 88,443 187,132 Total non-current liabilities 414,589 517,687 Total liabilities 489,480 594,396 Net assets 202,837 435,149 Equity Contributed equity 15 1,516,105 1,516,105 Reserves 5,959 5,990 Accumulated losses (1,319,227) (1,086,946) Equity attributable to equity holders 202,837 435,149 Total equity 202,837 435,149 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. 2024 Annual Report Consolidated Statement of Financial Position | 53 Consolidated Statement of Financial Position For the year ended 30 June 2024 2024 Contributed equity $’000 Share-based payment reserve $’000 Hedge reserve $’000 (Accumulated losses)/ retained profits $’000 Total equity $’000 Total equity at 1 July 2023 1,516,105 5,475 515 (1,086,946) 435,149 Profit for the year – – – (224,604) (224,604) Other comprehensive income – – (175) – (175) Total comprehensive income – – (175) (224,604) (224,779) Transactions with equity holders in their capacity as equity holders: Employee share entitlements – 144 – – 144 Dividends Paid – – – (7,677) (7,677) – 144 – (7,677) (7,533) Total equity at 30 June 2024 1,516,105 5,619 340 (1,319,227) 202,837 2023 Contributed equity $’000 Share-based payment reserve $’000 Hedge reserve $’000 (Accumulated losses)/ retained profits $’000 Total equity $’000 Total equity at 1 July 2022 1,537,404 5,196 553 (1,082,746) 460,407 Profit for the year – – – 19,109 19,109 Other comprehensive income – – (38) – (38) Total comprehensive income – – (38) 19,109 19,071 Transactions with equity holders in their capacity as equity holders: Buy-back of ordinary shares (21,299) – – – (21,299) Employee share entitlements – 279 – – 279 Dividends Paid – – – (23,309) (23,309) (21,299) 279 – (23,309) (44,329) Total equity at 30 June 2023 1,516,105 5,475 515 (1,086,946) 435,149 The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes. Southern Cross Austereo 54 | Consolidated Statement of Changes in Equity Consolidated Statement of Changes in Equity For the year ended 30 June 2024 Note 2024 $’000 2023 $’000 Cash flows from operating activities Receipts from customers 534,143 550,304 Payments to suppliers and employees (497,709) (487,175) Interest received from external parties 312 1,120 Tax paid net of refunds received (2,268) (7,419) Net cash inflows from operating activities 10 34,478 56,830 Cash flows from investing activities Payments for purchase of property, plant and equipment (2,783) (11,745) Payments for purchase of intangibles (12,986) (13,039) Proceeds from sale of property, plant and equipment 6,044 3,490 Payments for acquisitions of unlisted equity securities (138) (214) Proceeds from sale of unlisted equity securities 800 – Dividends received from equity accounted investments 900 1,050 Net cash flows used in investing activities (8,163) (20,458) Cash flows from financing activities Dividends paid to security holders (7,677) (23,309) Proceeds from borrowings 20,000 15,000 Repayment of borrowings from external parties (20,000) (25,000) Buy-back of ordinary shares – (21,299) Interest paid to external parties (13,681) (11,762) Principal elements of lease payments (7,380) (6,501) Net cash flows used in financing activities (28,738) (72,871) Net decrease in cash and cash equivalents (2,423) (36,499) Cash assets at the beginning of the year 12,963 49,462 Cash assets at the end of the year 10,540 12,963 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. 2024 Annual Report Consolidated Statement of Cash Flows | 55 Consolidated Statement of Cash Flows For the year ended 30 June 2024 Key Numbers Capital Management Group Structure Other 1. Summary of Material Accounting Policies 12. Capital Management Objectives 18. Non-Current Assets – Investments 21. Share-Based Payments 2. Segment Information 13. Dividends Paid and Proposed 19. Subsidiaries 22. Remuneration of Auditors 3. Revenue 14. Earnings per Share 20. Parent Entity Financial Information 23. Related Party Disclosures 4. Significant Items 15. Contributed Equity and Reserves 24. Leases and Other Commitments 5. Other Income 16. Borrowings 25. Events Occurring after Balance Date 6. Income Tax Expense 17. Financial Risk Management 26. Other Accounting Policies 7. Non-Current Assets – Property, Plant and Equipment 8. Non-Current Assets – Intangible Assets 9. Impairment 10. Cash Flow Information 11. Receivables, Payables, Deferred Income and Provisions Southern Cross Austereo 56 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 Key Numbers 1. Summary of Material Accounting Policies The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. In addition, significant and other accounting policies that summarise the measurement basis used and that are relevant to an understanding of the financial statements are provided throughout the notes to the consolidated financial statements. These policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are for the consolidated entity consisting of Southern Cross Media Group Limited (‘the Company’) and its subsidiaries (‘the Group’). Basis of preparation This general purpose financial report has been prepared in accordance with Australian Accounting Standards and the Corporations Act 2001 (where applicable). The Group is a for-profit entity for the purpose of preparing the financial statements. These financial statements have been prepared on a going concern basis. The Group has performed an assessment of its ability to continue as a going concern. The assessment has considered the balance sheet position, including $10.5 million of cash and cash equivalents at 30 June 2024; forecast performance; and the expectations that the Group will comply with its debt facility covenants. Based on the assessment, the Group concluded that these financial statements should be prepared on a going concern basis. Information in respect of the parent entity in this financial report relates to Southern Cross Media Group Limited. i) Compliance with IFRS Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards (‘IFRS’) as issued by the International Accounting Standards Board (‘IASB’). Consequently, this financial report has also been prepared in accordance with and complies with IFRS as issued by the IASB. ii) Historical cost convention These financial statements have been prepared under the historical cost convention, as modified by the revaluation of certain financial assets and liabilities (including derivative instruments) at fair value through profit or loss. All amounts are presented in Australian dollars, unless otherwise noted. iii) Comparative figures Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year. Principles of consolidation The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Company as at 30 June 2024 and the results of all subsidiaries for the year then ended. Subsidiaries are all entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. The effects of all transactions between entities in the Group are eliminated in full. Rounding of amounts The Company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding off’ of amounts in the Directors’ Report and Financial Report. Amounts have been rounded off in accordance with the Instrument to the nearest thousand dollars, unless otherwise indicated. Critical accounting estimates and judgement The preparation of the financial report in accordance with Australian Accounting Standards requires the use of certain critical accounting estimates. It also requires management to exercise judgement in the process of applying the accounting policies. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. Management believes the estimates used in the preparation of the financial report are reasonable. Actual results in the future may differ from those reported. Judgements and estimates which are material to the financial report are found in the following notes: Note 8 Non-Current Assets – Intangible Assets Note 9 Impairment Note 11 Receivables, Payables, Deferred Income and Provisions Note 24 Leases and Other Commitments Market conditions The slow macroeconomic environment in Australia, with continued high interest rates, has contributed to challenging conditions in the traditional advertising markets in which the Group operates. As a consequence, management has: – Continued to evaluate areas of judgement or estimation uncertainty; – Updated its economic outlook, principally for the purposes of input into the impairment analysis of financial and non-financial assets classes, but also for input into its expected credit losses through the application of forward-looking information and disclosures such as fair value disclosures of financial assets and liabilities; and – Reviewed public and industry forecasts for input into the impairment assessment of the Broadcast Radio and Digital Audio CGUs. Further judgements and estimates were required due to these external factors and are detailed further in the notes to the consolidated financial statements, in particular: Note 9 Impairment Note 11 Receivables, Payables, Deferred Income and Provisions Note 12 Capital Management Objectives Note 17 Financial Risk Management Note 18 Non-Current Assets – Investments Notes to the consolidated financial statements Notes relating to individual line items in the consolidated financial statements now include accounting policy information where it is considered relevant to an understanding of these items, as well as information about critical accounting estimates and judgements. Details of the impact of new accounting policies and all other accounting policy information are disclosed at the end of the financial report in note 26. 2024 Annual Report Notes to the Consolidated Financial Statements | 57 2. Segment Information AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segments and to assess their performance. The Group has determined operating segments are based on the information reported to the Group CEO and the Company Board of Directors, the Chief Operating Decision Maker (‘CODM’). Towards the end of the second half of the reporting period, the financial performance of Digital Audio to the CODM significantly increased in prominence and is now considered a separate operating segment from Broadcast Radio. Consequently, the Group has determined that it has three main operating segments being: – Broadcast Radio, comprising metro and regional radio, and other related businesses; – Digital Audio; and – Television, comprising the regional television business Broadcast Radio Digital Audio Television Corporate Consolidated 2024 $’000 20234 $’000 2024 $’000 20234 $’000 2024 $’000 2023 $’000 2024 $’000 2023 $’000 2024 $’000 2023 $’000 Segment revenue 366,620 372,570 35,031 24,626 97,489 106,742 265 356 499,405 504,294 National revenue1 202,963 211,401 – – 54,782 61,932 – – 257,745 273,333 Local revenue2 141,285 136,923 – – 34,369 37,824 – – 175,654 174,747 Other 22,372 24,246 35,031 24,626 8,338 6,986 265 356 66,006 56,214 Total revenue 366,620 372,570 35,031 24,626 97,489 106,742 265 356 499,405 504,294 EBITDA before significant items3 87,181 97,860 (10,909) (17,584) 13,278 18,684 (23,341) (21,791) 66,209 77,169 Reported EBITDA 84,437 95,830 (13,595) (17,584) 12,985 18,668 (28,287) (23,706) 55,540 73,208 EBITDA % of Revenue 23.0% 25.7% (38.8)% (71.4)% 13.3% 17.5% N/A N/A 11.1% 14.5% Impairment of broadcast radio licences (326,126) – – – – – – – (326,126) – Depreciation and amortisation – – – – – – – – (31,087) (29,155) Statutory EBIT/ Segment Result – – – – – – – – (301,673) 44,053 Financing costs – – – – – – – – (18,905) (16,800) Income tax (expense)/credit – – – – – – – – 95,974 (8,144) Profit/(Loss) for the year attributable to shareholders – – – – – – – – (224,604) 19,109 1 National revenue is sold by SCA’s national sales team who are able to sell all SCA products across all markets. 2 Local revenue is sold directly by SCA’s local sales team who are only able to sell local products specific to the particular market. 3 Refer to Note 4 ‘Significant Items’. 4 To allow consistency comparisons, the prior year comparatives have been restated to reflect the change in reportable operating segments. 5 The CODM reviews the balance sheet on a consolidated basis only. Southern Cross Austereo 58 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 3. Revenue The profit before income tax from continuing operations included the following specific items of revenue: Consolidated 2024 $’000 2023 $’000 Revenue from continuing operations Sales revenue 499,115 503,951 Rental revenue 290 343 Total revenue from continuing operations 499,405 504,294 Recognition and Measurement Revenues are recognised at fair value of the consideration received or receivable net of the amount of GST payable to the relevant taxation authority. Sales revenue Under AASB 15 Revenue from Contracts with Customers revenue is recognised when a customer obtains control of the goods or services. Determining the timing of the transfer of control requires judgement. The Group recognises revenue at the point the underlying performance obligation has been completed and control of the services or goods passes to the customer. Revenue represents revenue earned primarily from the sale of radio, digital and television advertising airtime and related activities, including sponsorship and promotions. Based on the Group being considered the principal entity in the sale of radio, digital and advertising, revenue is recognised gross of rebates and agency commissions. For significant payment terms refer to note 11. Advertising revenue is recognised at a point in time when the underlying performance obligation has been satisfied, being primarily when the advertisement is aired. Sponsorship revenue is included within advertising revenue and the length of the sponsorship can vary in length of time. Revenue is recognised over the period to which the sponsorship relates. Production services used to create advertising suitable for broadcast is treated as a separate performance obligation. Production revenue is recognised at a point in time when the Group has completed the production service, which is likely to be before the relevant advertising is broadcast. Included within advertising revenue is the Australian Traffic Network (ATN) contract where revenue is recognised over time. The ATN contract has been deemed to contain a significant financing component. Revenue from this contract has been recalculated over the 30-year contract period and has been grossed up to account for interest expense (for further detail refer to note 11). Digital revenue is recognised at the point the underlying performance obligations of the contract have been delivered to the customer. SCA determines whether it is the principal or agent under AASB 15. SCA is the principal in a transaction when it has primary responsibility for fulfilling the promise, the inventory risk and discretion in establishing price. Revenue is recognised as gross when SCA is principal, with a corresponding expense for any fees which could include agency commission. SCA is the agent in a transaction when it receives a commission/revenue share, has no inventory risk and little or no discretion in establishing price. Revenue is recognised as net when SCA is an agent, with no corresponding expense for any fees. The Group derives other regular sources of operating revenue including commercial production for advertisers, facility sharing revenue and third-party agency commissions. 4. Significant Items The net profit after tax includes the following items whose disclosure is relevant in explaining the financial performance of the Group. Significant items are those items of such a nature or size that separate disclosure will assist users to understand the financial statements. 2024 $’000 2023 $’000 Impairment of broadcast radio licences (after tax) – refer to notes 8 and 9 (228,288) – Restructuring charges (after tax) (3,148) (2,300) Response to corporate activity proposals (after tax) (2,045) – Other (after tax) (2,275) (473) Total significant items included in net profit after tax (235,756) (2,773) 2024 Annual Report Notes to the Consolidated Financial Statements | 59 5. Other Income Consolidated 2024 $’000 2023 $’000 Net gain from disposal of assets 1,808 1,264 Revaluation of unlisted equity securities 734 – Total other income 2,542 1,264 2024 $’000 2023 $’000 Net assets disposed (5,036) (2,226) Gross cash consideration 6,844 3,490 Net gain from disposal of assets before tax 1,808 1,264 6. Income Tax Expense The income tax expense for the financial year differs from the amount calculated on the net result from continuing operations. The differences are reconciled as follows: Consolidated 2024 $’000 2023 $’000 Income tax expense Current tax Current tax on profits for the year 5,218 8,957 Adjustments for current tax of prior periods (2,578) (212) Total current tax expense 2,640 8,745 Deferred income tax Decrease in net deferred tax liabilities (101,544) (511) Adjustments for deferred tax of prior periods 2,930 (90) Total deferred tax expense (98,614) (601) Income tax (credit)/expense (95,974) 8,144 Consolidated 2024 $’000 2023 $’000 Reconciliation of income tax expense to prima facie tax payable (Loss)/profit before income tax expense (320,578) 27,253 Tax at the Australian tax rate of 30% (96,174) 8,176 Tax effect of amounts which are not deductible/(taxable) in calculating taxable income Share of net profits of associates Non-deductible entertainment expenses (111) 685 (209) 748 Other (non-assessable income)/non-deductible expenses (726) (269) Adjustments recognised in the current year in relation to prior years 352 (302) Income tax (credit)/expense (95,974) 8,144 Southern Cross Austereo 60 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 6. Income Tax Expense (continued) Deferred Taxes Consolidated 2024 $’000 2023 $’000 The balance comprises temporary differences attributable to: Licences and brands (108,642) (206,561) Employee benefits 7,181 6,920 Provisions 427 487 Interest rate swaps (145) (221) Right-of-use assets (31,418) (32,917) Lease liabilities 38,482 39,013 Deferred revenue 4,297 3,895 Other 1,375 2,252 Net balance disclosed as deferred tax liability (88,443) (187,132) For the year ended 30 June 2024 the Group had a $0.075 million deferred income tax credit (2023: $0.016 million deferred income tax credit) recognised directly in equity in relation to cash flow hedges, with a corresponding reduction in deferred tax liabilities being recognised. There are $58.155 million available of unused tax losses on the capital account for which no deferred tax asset has been recognised (2023: $58.966 million). There are no other unused tax losses for which no deferred tax asset has been recognised. Recognition and Measurement Income Tax Income tax amounts recognised in the Group’s financial statements relate to tax paying entities within the Group and have been recognised in accordance with Group policy. The income tax expense for the year is the tax payable on the current year’s taxable income based on the applicable tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and liabilities and their carrying amounts in the financial statements and adjusted by changes to unused tax losses. Deferred Taxes Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to apply when the assets are recovered or liabilities are settled, based on those tax rates which are enacted or substantively enacted for each jurisdiction. The relevant tax rates are applied to the cumulative amounts of deductible and taxable temporary differences to measure the deferred tax asset or liability. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. In determining the extent of temporary differences of assets, the carrying amount of assets is assumed to be recovered through use. Tax Consolidated Group The Company is the head entity of the tax consolidated group. For further information, refer to note 20. 2024 Annual Report Notes to the Consolidated Financial Statements | 61 7. Non-Current Assets – Property, Plant and Equipment Consolidated Land and Buildings $’000 Leasehold Improvements $’000 Plant and Equipment $’000 Assets under construction $’000 Total $’000 2024 Cost 14,321 58,921 255,830 178 329,250 Accumulated depreciation expense (5,039) (31,548) (229,424) – (266,011) Net carrying amount 9,282 27,373 26,406 178 63,239 Movement Net carrying amount at beginning of year 13,798 27,810 30,010 5,195 76,813 Additions – – 85 2,698 2,783 Disposals (4,095) (47) (94) – (4,236) Depreciation expense (426) (2,889) (8,806) – (12,121) Transfers 5 2,499 5,211 (7,715) – Net carrying amount at end of year 9,282 27,373 26,406 178 63,239 Consolidated Land and Buildings $’000 Leasehold Improvements $’000 Plant and Equipment $’000 Assets under construction $’000 Total $’000 2023 Cost 22,137 66,596 259,849 5,195 353,777 Accumulated depreciation expense (8,339) (38,786) (229,839) – (276,964) Net carrying amount 13,798 27,810 30,010 5,195 76,813 Movement Net carrying amount at beginning of year 16,160 18,166 35,364 14,864 84,554 Additions 213 54 3,697 3,540 7,504 Disposals (2,063) – (162) – (2,225) Depreciation expense (535) (2,622) (9,863) – (13,020) Transfers 23 12,212 974 (13,209) – Net carrying amount at end of year 13,798 27,810 30,010 5,195 76,813 Recognition and Measurement Property, Plant and Equipment at Cost Property, plant and equipment is recorded at cost less accumulated depreciation and cumulative impairment charges. Cost includes those costs directly attributable to bringing the assets into the location and working condition necessary for the asset to be capable of operating in the manner intended by management. The estimated cost of dismantling and removing infrastructure items and restoring the site on which the assets are located is only included in the cost of the asset to the extent that the Group has an obligation to restore the site and the cost of restoration is not recoverable from third parties. Additions, renewals and improvements are capitalised, while maintenance and repairs are expensed. The carrying values of property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. 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. Depreciation Land is not depreciated. Depreciation on other assets is calculated on a straight-line basis to amortise the cost of the asset over its estimated useful life. Estimates of remaining useful life are made on a regular basis for all assets, with annual reassessments for major items. The expected useful life of property, plant and equipment is as follows: Buildings 25 – 50 years Leasehold improvements 3 – 16 years Network equipment 2 – 10 years Communication equipment 3 – 5 years Other plant and equipment 2 – 20 years Leased plant and equipment 2 – 20 years Southern Cross Austereo 62 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 8. Non-Current Assets – Intangible Assets Consolidated Goodwill $’000 Broadcasting Licences $’000 Brands and Tradenames $’000 Other $’000 Total $’000 2024 Cost 362,088 1,502,031 90,498 38,611 1,993,228 Accumulated impairment expense (362,088) (1,180,604) (41,662) – (1,584,354) Accumulated amortisation expense – – – (17,371) (17,371) Net carrying amount – 321,427 48,836 21,240 391,503 Movement Net carrying amount at beginning of year – 647,553 48,747 15,820 712,120 Additions – – 89 12,899 12,988 Impairment expense – (326,126) – – (326,126) Amortisation expense – – – (7,479) (7,479) Net carrying amount at end of year – 321,427 48,836 21,240 391,503 Consolidated Goodwill $’000 Broadcasting Licences $’000 Brands and Tradenames $’000 Other $’000 Total $’000 2023 Cost 362,088 1,502,031 90,409 25,712 1,980,240 Accumulated impairment expense (362,088) (854,478) (41,662) – (1,258,228) Accumulated amortisation expense – – – (9,892) (9,892) Net carrying amount – 647,553 48,747 15,820 712,120 Movement Net carrying amount at beginning of year – 647,553 48,576 7,667 703,796 Additions – – 171 12,868 13,039 Amortisation expense – – – (4,715) (4,715) Net carrying amount at end of year – 647,553 48,747 15,820 712,120 Goodwill and intangible assets with indefinite useful lives The Group tests at least annually whether goodwill and intangible assets with indefinite useful lives have suffered any impairment, and when there is an indication of impairment. The tests incorporate assumptions regarding future events which may or may not occur, resulting in the need for future revisions of estimates. There are also judgements involved in determination of cash generating units (‘CGUs’). Key Judgement Useful Life A summary of the useful lives of intangible assets is as follows: Commercial Television/Radio Broadcasting Licences Indefinite Brands and Tradenames Indefinite Licences Television and radio licences are initially recognised at cost. Analogue licences are renewable for a minimal cost every five years under provisions within the Broadcasting Services Act. Digital licences attach to the analogue licences and renew automatically. The Directors understand that the revocation of a commercial television or radio licence has never occurred in Australia and have no reason to believe the licences have a finite life. During the year, the free-to-air commercial television and radio broadcasting licences have been assessed to have indefinite useful lives. Brands Brands are initially recognised at cost. The brands have been assessed to have indefinite useful lives. The Group’s brands operate in established markets with limited restrictions and are expected to continue to complement the Group’s media initiatives. On this basis, the Directors have determined that brands have indefinite lives as there is no foreseeable limit to the period over which the assets are expected to generate net cash inflows. 2024 Annual Report Notes to the Consolidated Financial Statements | 63 8. Non-Current Assets – Intangible Assets (continued) Other intangible assets IT development and software Costs associated with maintaining software programmes are recognised as an expense as incurred. Development costs that are directly attributable to the design and testing of identifiable and unique software products controlled by the Group are recognised as intangible assets where the following criteria are met: – it is technically feasible to complete the software so that it will be available for use – management intends to complete the software and use or sell it – there is an ability to use or sell the software – it can be demonstrated how the software will generate probable future economic benefits and adequate technical, financial and other resources to complete the development and to use or sell the software is available, and – the expenditure attributable to the software during its development can be reliably measured. Directly attributable costs that are capitalised as part of the software include employee and contractor costs. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use. The Group amortises other intangible assets with a limited useful life using the straight-line method over the following periods: IT development and software 3 – 5 years Customer contracts 5 years 9. Impairment a) Impairment tests for licences, tradenames, brands and goodwill The value of licences, tradenames, brands and goodwill is allocated to the Group’s cash generating units (‘CGUs’). Towards the end of the second half of the reporting period, it was determined that Broadcast Radio and Digital Audio, formerly comprising the Audio CGU, had independent cash inflows for the first time and at 30 June 2024 the CGUs have been identified as being Broadcast Radio, Digital Audio and Television. As the indefinite lived intangible assets relating to the Television CGU were fully impaired in the year ended 30 June 2019, and no indicator of impairment has been identified for the remaining assets based on the Television CGU’s performance for FY2024 relative to its remaining carrying value, no impairment test was performed on the Television CGU at 30 June 2024. The recoverable amounts of the Broadcast Radio and Digital Audio CGUs at 30 June 2024 and the Audio CGU at 30 June 2023 were determined based on the fair value less costs of disposal (‘FVLCD’) discounted cash flow model utilising probability weighted scenarios, and approximates the carrying value, except the recoverable amount of the Digital Audio CGU, which exceeds its carrying value. Shared assets and liabilities in the Audio CGU were allocated to Broadcast Radio and Digital Audio CGUs on the basis of revenues over the forecast period. Allocation of goodwill and other intangible assets Consolidated 2024 Broadcast Radio CGU $’000 Digital Audio CGU $’000 Television CGU $’000 Total $’000 Indefinite lived intangible assets allocated to CGU 362,938 7,325 – 370,263 Finite lived intangible assets allocated to CGU 7,611 13,629 – 21,240 Total finite and indefinite lived intangible assets 370,549 20,954 – 391,503 Consolidated 2023 Audio CGU $’000 Television CGU $’000 Total $’000 Goodwill allocated to CGU – – – Indefinite lived intangible assets allocated to CGU 696,300 – 696,300 Finite lived intangible assets allocated to CGU 15,820 – 15,820 Total goodwill, finite and indefinite lived intangible assets 712,120 – 712,120 Southern Cross Austereo 64 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 9. Impairment (continued) Broadcast Radio CGU Impairment At 30 June 2024, an impairment loss of $326.1 million was recorded against the Broadcasting Licences in the Broadcast Radio CGU, reflecting a recoverable amount of $275.1 million. The carrying values of the other assets in the Broadcast Radio CGU, including the Brands and Tradenames, were considered equal to or less than their fair value. After the impairment loss, the estimated recoverable amount of the Broadcast Radio CGU, based on FVLCD, equals its carrying amount. The impairment reflects observed market pressures, independent estimates of radio broadcast growth rates showing declines over the forecast period and a consequent reduction in the long- term growth rates. b) Key assumptions used 30 June 2024 The FVLCD calculations used cash flow projections based on the 2025 Board approved financial budgets extended over the subsequent four-year period (‘Forecast Period’) and applied a terminal value calculation using estimated growth rates approved by the Board for the business relevant to the Broadcast Radio and Digital Audio CGUs. In determining appropriate growth rates to apply to the Forecast Period and to the terminal calculation, the Group considered forecast reports from independent media experts and publicly available broker reports as well as internal Company data and assumptions. The long-term growth rates in respect of the Broadcast Radio and Digital Audio CGUs are based on management’s view after considering independent forecast reports. The discount rate used is based on a range provided by an independent expert and reflects specific risks relating to the Broadcast Radio and Digital Audio CGUs in Australia. The Group considered three scenarios: the Base case, Lower case and Upper case applying a probability weighting to each scenario as outlined below to determine a recoverable amount. The key assumptions under each scenario are as follows: Broadcast Radio Lower case Base case Upper case FY25 Budget achievement % 75% 100% 100% Growth in Broadcast Radio advertising revenue – 5-year CAGR (1.3)% 1.4% 3.9% Long-term growth rate (1.0)% 0.0% 2.5% Discount rate (post-tax) 10.25% 10.25% 10.25% Metro market share – Year 5 26% 28.5% 30% Cost out savings – FY26 onwards $6m savings from FY26, plus additional 1% in FY27 and FY28 $6m savings from FY26 $6m savings from FY26 Probability weighting 40% – lower case considered more likely than upper case due to potential for worsening market conditions 50% – base case considered most likely outcome 10% – upper case considered less likely than lower case due to potential for worsening market conditions Digital Audio Lower case Base case Upper case FY25 Budget achievement % 100% 100% 100% Long-term growth rate 1.0% 2.0% 4.5% Discount rate (post-tax) 12.25% 12.25% 12.25% Growth in digital audio revenues – 5-year CAGR 11% 24% 26% Probability weighting 40% – lower case considered more likely than upper case due to potential for worsening market conditions 50% – base case considered most likely outcome 10% – upper case considered less likely than lower case due to potential for worsening market conditions The market capitalisation of the Group at 30 June 2024 was $146 million, which represented a $57 million deficiency against the net assets of $203 million. The Group considered reasons for this difference and concluded the recoverable amount resulting from the FVLCD methodology is appropriate in supporting the carrying value of the Broadcast Radio and Digital Audio CGUs. 2024 Annual Report Notes to the Consolidated Financial Statements | 65 9. Impairment (continued) 30 June 2023 The FVLCD calculations used cash flow projections based on the 2024 Board approved financial budgets extended over the subsequent four-year period (‘Forecast Period’) and applied a terminal value calculation using estimated growth rates approved by the Board for the business relevant to the Audio CGU. In determining appropriate growth rates to apply to the Forecast Period and to the terminal calculation, the Group considered forecast reports from independent media experts and publicly available broker reports as well as internal Company data and assumptions. In respect of the Audio CGU the long-term growth rates did not exceed the average of the independent forecast reports. The discount rate used is based on a range provided by an independent expert and reflects specific risks relating to the Audio CGU in Australia. The Group considered three scenarios: the Base case, Lower case, and Upper case and applied a probability weighting to each scenario as outlined below to determine a recoverable amount. The key assumptions under each scenario are as follows: Audio Lower case Base case Upper case Extent and duration of audio market recovery To 82% of CPI adjusted FY19 revenue base in FY25 declining to 76% by FY28 To 83% of CPI adjusted FY19 revenue base in FY25 declining to 82% in FY26 and flat thereafter To 84% of CPI adjusted FY19 revenue base by FY25 and increasing to 88% by FY28 Long term growth rate 0.0% 1.5% 2.5% Discount rate (post-tax) 10.0% 10.0% 10.0% Growth in digital audio revenues – 5-year CAGR 17% 27% 31% Metro market share – Year 5 26% 29% 30% Probability weighting 40% – lower case considered more likely than upper case due to potential for worsening economic conditions 50% – base case considered most likely outcome 10% – upper case considered less likely than lower case due to potential for worsening economic conditions c) Impact of a reasonably possible change in key assumptions Broadcast Radio CGU Sensitivity Any variation in the key assumptions used to determine the FVLCD would result in a change in the recoverable amount of the Broadcast Radio CGU. The assumptions in the lower-case scenario for 30 June 2024 described above represent a reasonably possible change in assumptions, which together would lead to a further pre-tax impairment of $336 million. The following reasonably possible changes in a key assumption would result in the following approximate impact on recoverable amount (as derived on a probability weighted basis) and carrying value for the Broadcast Radio CGU: Sensitivity Reasonable Change in variable % Impact of change on Broadcast Radio CGU carrying value $ million Increase in post-tax discount rate from 10.25% to 12.25% 2.0% (41.6) Reduction in long-term growth rate by 2% in each scenario (2.0)% (29.8) FY25 Budget earnings reduced by 5% in each scenario (5.0)% (27.3) Southern Cross Austereo 66 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 10. Cash Flow Information a) Reconciliation of Profit after Income Tax to Net Cash Inflow from Operating Activities Consolidated 2024 $’000 2023 $’000 Profit/(loss) after income tax (224,604) 19,109 Impairment of Broadcast Radio licences 326,126 – Revaluation of investments (734) – Depreciation and amortisation 31,087 29,155 Net gain from disposal of assets (1,808) (1,264) Share of associate profit (369) (697) Interest expense and other borrowing costs included in financing activities 19,217 17,920 Share-based payments 144 277 Change in operating assets and liabilities: (Increase)/decrease in receivables (6,578) 3,830 (Decrease) in deferred taxes (net of tax movement in hedge reserve) (98,614) (832) (Decrease) in payables (excluding interest expense classified as financing activities) (2,841) (2,761) (Decrease) in deferred income (7,831) (8,430) Increase in provision for income tax 372 1,557 Increase/(decrease) in provisions 911 (1,034) Net cash inflows from operating activities 34,478 56,830 b) Net debt reconciliation Consolidated 2024 $’000 2023 $’000 Cash and liquid investments 10,540 12,963 Borrowings – repayable after one year (117,543) (117,243) Lease Liabilities (128,275) (130,041) Net debt (235,278) (234,321) 2024 Annual Report Notes to the Consolidated Financial Statements | 67 10. Cash Flow Information (continued) Consolidated Cash $’000 Bank Loans $’000 Lease Liabilities $’000 Total $’000 Balance as at 1 July 2022 49,462 (126,943) (126,819) (204,300) Payment for leases – – 13,077 13,077 Proceeds from borrowings 15,000 (15,000) – – Repayment of borrowings (25,000) 25,000 – – Other cash flows (26,499) – – (26,499) Changes from financing activities (36,499) 10,000 13,077 (13,422) Other Changes Finance costs – – (6,576) (6,576) Amortisation of borrowing costs – (300) – (300) Addition of leases – – (8,231) (8,231) Other remeasurements – – (1,492) (1,492) Subtotal of other changes – (300) (16,299) (16,599) Balance as at 30 June 2023 12,963 (117,243) (130,041) (234,321) Payment for leases – – 13,944 13,944 Proceeds from borrowings 20,000 (20,000) – – Repayment of borrowings (20,000) 20,000 – – Other cash flows (2,423) – – (2,423) Changes from financing activities (2,423) – 13,944 11,521 Other Changes Finance costs – – (6,564) (6,564) Amortisation of borrowing costs – (300) – (300) Addition of leases – – (4,565) (4,565) Other remeasurements – – (1,049) (1,049) Subtotal of other changes – (300) (12,178) (12,478) Balance as at 30 June 2024 10,540 (117,543) (128,275) (235,278) c) Cash and cash equivalents Consolidated 2024 $’000 2023 $’000 Current Cash at bank and at hand 10,540 12,963 10,540 12,963 Recognition and measurement For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet. Southern Cross Austereo 68 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 11. Receivables, Payables, Deferred Income and Provisions a) Receivables Consolidated 2024 $’000 2023 $’000 Current Trade receivables 89,975 83,554 Prepayments 13,706 13,122 Other 1,707 1,974 105,388 98,650 Consolidated 2024 $’000 2023 $’000 Non-current Refundable deposits 194 369 Prepayments 9,415 10,439 Other 112 111 9,721 10,919 The carrying amounts of the non-current receivables approximate their fair value. Ageing analysis of trade receivables The tables below summarise the ageing analysis of trade receivables as at 30 June. Consolidated As at 30 June 2024 Current – not past due $’000 Past due – up to 60 days $’000 Past due – 60 to 90 days $’000 Past due – >90 days $’000 Total $’000 Expected loss rate 0.15% 0.2% 2.0% 45.1% Trade receivables 82,914 7,022 42 248 90,226 Expected credit losses (‘ECL’) (124) (14) (1) (112) (251) Trade receivables net of ECL 82,790 7,008 41 136 89,975 Consolidated As at 30 June 2023 Current – not past due $’000 Past due – up to 60 days $’000 Past due – 60 to 90 days $’000 Past due – >90 days $’000 Total $’000 Expected loss rate 0.15% 0.2% 2.0% 23.8% Trade receivables 77,389 4,967 903 576 83,835 Expected credit losses (‘ECL’) (116) (10) (18) (137) (281) Trade receivables net of ECL 77,273 4,957 885 439 83,554 The Group has recognised bad debts during the year ended 30 June 2024 of $ 270,811 (2023: $183,919). The Group applies a simplified model of recognising lifetime expected credit losses immediately upon recognition. The expected loss rates are historically based on the payment profile of sales over a period of three years before the end of the current period. Historical loss rates have been adjusted to reflect current and forward-looking information on macroeconomic factors affecting the ability of customers to settle the receivables. The amount of the loss allowance is recognised in profit or loss. Where a debt is known to be uncollectible, it is considered a bad debt and written off. Recognition and Measurement Trade Receivables Trade receivables are recognised at fair value, being the original invoice amount and subsequently measured at amortised cost less ECL provision. Generally, credit terms are for 30 days from date of invoice or 45 days for an accredited agency. 2024 Annual Report Notes to the Consolidated Financial Statements | 69 11. Receivables, Payables, Deferred Income and Provisions (continued) b) Prepayments On 2 September 2019, the Group paid $15 million to Broadcast Australia for the outsourcing of the Group’s transmission services which is being recognised as an expense over a 15-year period. 2024 $’000 2023 $’000 Current Broadcast Australia transmitter services 1,027 1,027 Other 12,679 12,095 13,706 13,122 Non-current Broadcast Australia transmitter services 9,415 10,439 9,415 10,439 c) Payables Consolidated 2024 $’000 2023 $’000 Current Trade creditors 15,333 16,994 GST payable 3,519 2,466 Accruals and other payables 21,928 24,279 40,780 43,739 Recognition and Measurement Trade Creditors, Accruals and Other Payables These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. d) Deferred income Consolidated 2024 $’000 2023 $’000 Current Deferred income 4,926 5,532 4,926 5,532 Consolidated 2024 $’000 2023 $’000 Non-current Deferred income 84,162 86,269 84,162 86,269 Recognition and Measurement Deferred Income In 2016, the Group entered into a long-term contract with Australian Traffic Network (ATN) for it to provide traffic reports for broadcast on Southern Cross Austereo (SCA) radio stations. SCA received payment of $100 million from ATN in return for its stations broadcasting advertising tags provided by ATN attached to news and traffic reports. The contract has a term of 20 years, with an option for ATN to extend it by a further 10 years. The $100 million payment has been recorded on the balance sheet under ‘Deferred Income’ and will be released to the Income Statement over a 30-year period, unless the contract ends after 20 years at which point the remaining balance will be recognised as revenue in year 20. This treatment will match the receipt of future broadcasting services, airtime and traffic management services that the Group is required to provide over the life of the contract. ATN revenue recognised that was included in the deferred income balance at the beginning of the period was $7.1 million. The ATN revenue recognised of $7.1 million (2023: $7.1 million) has been offset by the recognition of $5.2 million (2023: $5.4 million) in interest expense as the unwind of discounting. In addition to the payment received from ATN, deferred income represents government grants received and income invoiced in advance. Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are deferred and recognised in profit or loss on a straight-line basis over the expected useful lives of the related assets. Southern Cross Austereo 70 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 11. Receivables, Payables, Deferred Income and Provisions (continued) e) Provisions Consolidated 2024 $’000 2023 $’000 Current Employee benefits 21,287 20,253 Lease provisions 146 80 21,433 20,333 Consolidated 2024 $’000 2023 $’000 Non-current Employee benefits 2,651 2,813 Lease provisions 1,267 1,294 3,918 4,107 Movements in current and non-current provisions, other than provisions for employee benefits, are set out below: Consolidated 2024 $’000 2023 $’000 Balance at the beginning of the financial year 1,374 2,534 Additional provisions made in the period, including increases to existing provisions 159 121 Utilisation of provisions – (691) Unused amounts reversed during the period (120) (590) Balance at the end of the financial year 1,413 1,374 Recognition and Measurement Provisions A provision is recognised when there is a legal, equitable or constructive obligation as a result of a past event and it is probable that a future sacrifice of economic benefits will be required to settle the obligation, the timing or amount of which is uncertain. Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market estimates 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. Wages and salaries, leave and other entitlements Liabilities for unpaid salaries, salary related costs and provisions for annual leave are recorded in the Consolidated Statement of Financial Position at the salary rates which are expected to be paid when the liability is settled. Provisions for long service leave and other long-term benefits are recognised at the present value of expected future payments to be made. In determining this amount, consideration is given to expected future salary levels and employee service histories. Expected future payments are discounted to their net present value using high quality corporate bond rates with terms that match as closely as possible to the expected future cash flows. Onerous Contracts A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable costs of meeting the obligation under the contract. Any resultant provision is measured at the lower of the cost of fulfilling the contract and any compensation or penalties arising from the failure to fulfil it. Lease Provisions The provision comprises of the makegood provisions included in lease agreements for which the Group has a legal or constructive obligation. The present value of the estimated costs of dismantling and removing the asset and restoring the site is recognised as a provision. At each reporting date, the liability is remeasured in line with changes in discount rates, estimated cash flows and the timing of those cash flows. 2024 Annual Report Notes to the Consolidated Financial Statements | 71 Capital Management 12. Capital Management Objectives The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern, so that it can continue to provide appropriate returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, maintain a fully underwritten dividend reinvestment plan, return capital to shareholders, issue new shares, buy back existing shares or sell assets to reduce debt. The Group has taken measures to maintain net debt at a level consistent with a leverage ratio of below 2.0 times. The following outlines the capital management policies that are currently in place for the Group: Dividend Policy Dividend Payout Ratio The Group has a policy to distribute between 65-85% of underlying financial year Net Profit After Tax. Dividend Reinvestment Plan (‘DRP’) The Group operates a DRP whereby shareholders can elect to receive their dividends by way of receiving shares in the Company instead of cash. The Company can elect to either issue new shares, or to buy shares on-market. The DRP has been suspended since the 2016 interim dividend. Further details on the Group’s dividends are outlined in note 13. Share buy-back On 24 March 2022 the Group announced its intention to conduct an on-market share buy-back of up to $40 million over the twelve- month period from 8 April 2022 to 7 April 2023. In the year to 30 June 2023, the Group completed its share buy-back programme, with 20,948,644 shares bought for $21.3 million. Debt Facilities Syndicated Debt Facility At 30 June 2024 the Group had a $160 million (2023: $160 million) revolving facility expiring on 10 January 2026. This facility is used as core debt for the Group and may be paid down and redrawn in accordance with the SFA. Covenants For the duration of the SFA the Banking Group, being Southern Cross Austereo Pty Ltd and its subsidiaries, has a maximum leverage ratio covenant of 3.5 times and a minimum interest cover ratio of 3.0 times. As at 30 June 2024, the leverage ratio was 1.87 times, and the interest cover ratio was 8.30 times. Further details on the Group’s debt facilities are outlined in note 16. Property, Plant and Equipment and Intangibles The capital expenditure for 2024 was $2.8 million (2023: $7.5 million) with further additions to intangible assets of $13.0 million (2023: $13.0 million). Further details on the Group’s fixed assets are outlined in note 7 and on the Group’s intangible assets in note 8. Southern Cross Austereo 72 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 13. Dividends Paid and Proposed Consolidated 2024 $’000 2023 $’000 The dividends were paid as follows: Interim dividend paid for the half year ended 31 December 2023/2022 – fully franked at the tax rate of 30% 2,399 11,043 Final dividend paid for the year ended 30 June 2023/2022 – fully franked at the tax rate of 30% 5,278 12,266 7,677 23,309 Dividends paid in cash or satisfied by the issue of shares under the dividend reinvestment plan were as follows: Paid in cash 7,677 23,309 7,677 23,309 Cents per share Cents per share Interim dividend paid for the half year ended 31 December 2023/2022 1.00 4.60 Final dividend paid for the year ended 30 June 2023/2022 2.20 4.75 3.20 9.35 The Group has $180.7 million of franking credits at 30 June 2024 (2023: $182.1 million). Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the Company, on or before the end of the financial year but not distributed at the end of the reporting period. There will be no final dividend paid for the year ended 30 June 2024. 14. Earnings per Share Consolidated 2024 $’000 2023 $’000 Continuing Operations Profit attributable to shareholders from continuing operations ($’000) (224,604) 19,109 Profit attributable to shareholders from continuing operations excluding significant items ($’000) 11,152 21,882 Weighted average number of shares used as the denominator in calculating basic earnings per share (shares, ’000) 239,899 247,327 Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per share (shares, ’000) 241,215 250,483 Basic earnings per share (cents per share) (93.6) 7.73 Diluted earnings per share (cents per share) (93.6) 7.63 Excluding significant items (refer to note 4) Basic earnings per share excluding significant items (cents per share) 4.65 8.85 Diluted earnings per share excluding significant items (cents per share) 4.62 8.74 Dividends paid/proposed for the year as a % of NPAT (excluding impairments) 65.1% 85.4% On 24 March 2022 the Group announced its intention to conduct an on-market share buy-back of up to $40 million over the twelve- month period from 8 April 2022 to 7 April 2023. In the year to 30 June 2023, the Group completed its share buy-back programme, with 20,948,644 shares bought for $21.3 million in that year. Recognition and Measurement Basic earnings per share Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of shares outstanding during the financial year. Diluted earnings per share Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential shares. 2024 Annual Report Notes to the Consolidated Financial Statements | 73 15. Contributed Equity and Reserves Consolidated 2024 $’000 2023 $’000 Ordinary shares 1,516,105 1,516,105 Contributed equity 1,516,105 1,516,105 Consolidated Consolidated 2024 $’000 2023 $’000 2024 Number of securities ’000 2023 Number of securities ’000 On issue at the beginning of the financial year 1,516,105 1,537,404 239,899 260,848 Buy-back of ordinary shares – (21,299) – (20,949) On issue at the end of the financial year 1,516,105 1,516,105 239,899 239,899 On the 24 March 2022, the Group announced its intention to conduct an on-market share buy-back of up to $40 million. For the period to 30 June 2024, the Group purchased $nil (30 June 2023: $21.3 million) in shares. This was funded from existing cash reserves and debt facilities. Ordinary shares in Southern Cross Media Group Limited Ordinary shares entitle the holder to participate in distributions and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. On a show of hands, each shareholder present in person and each other person present as a proxy has one vote and upon a poll, each share is entitled to one vote. Ordinary shares have no par value, and the Company does not have a limited amount of authorised capital. Employee share entitlements The Group operates an EIP for its senior executives. Information relating to the employee share entitlements, including details of shares issued under the scheme, is set out in the Remuneration Report. Nature and purpose of reserves a) Share-based payments reserve The share-based payments reserve is used to recognise the fair value of future potential shares to be issued to employees for no consideration in respect of performance rights offered under the Executive Incentive Plans and Long-Term Incentive Plan. During the year no performance rights vested (2023: nil). In the current year $144,111 has been recognised as an expense (2023: $276,733 expense) in the Consolidated Statement of Comprehensive Income as the fair value of potential shares to be issued. b) Hedge reserve The hedge reserve is used to record gains or losses on a hedging instrument in a cash flow hedge that are recognised in Other Comprehensive Income. Amounts are reclassified to the Consolidated Statement of Comprehensive Income when the associated hedged transaction affects profit or loss. Southern Cross Austereo 74 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 16. Borrowings a) Total interest-bearing liabilities Consolidated 2024 $’000 2023 $’000 Non-current secured borrowings Bank facilities 118,000 118,000 Borrowing costs (457) (757) Total secured non-current interest bearing liabilities 117,543 117,243 Total current and non-current borrowings 117,543 117,243 For all non-current borrowings, the carrying amount approximates fair value in the Consolidated Statement of Financial Position. Of the $0.457 million of borrowing costs, $0.300 million (2023: $0.300 million) will unwind during the year ending 30 June 2025. There are no current liabilities as at 30 June 2024. b) Interest expense Consolidated 2024 $’000 2023 $’000 Interest expense and other borrowing costs External banks 7,234 5,815 AASB 15 – Revenue from customers with contracts interest expense 5,119 5,228 AASB 16 – Lease interest expense 6,564 6,577 Amortisation of borrowing costs 300 300 Total interest expense and other borrowing costs 19,217 17,920 c) Bank facilities and assets pledged as security The $160 million debt facilities (2023: $160 million) of the Banking Group are secured by a fixed and floating charge over the assets and undertakings of the Banking Group and its wholly-owned subsidiaries and also by a mortgage over shares in Southern Cross Austereo Pty Ltd. The facility matures on 9 January 2026 and has an average variable interest rate of 5.9 % (2023: 5.1%). The Group also has a short-term $25 million overdraft facility with the ANZ Banking Group, which is renewable on an annual basis each 30 April. The Group’s bank facilities are denominated in Australian dollars. There are certain financial and non-financial covenants which are required to be met by subsidiaries in the Group. One of these covenants is an undertaking that the subsidiary is in compliance with the requirements of the facility before any amount may be distributed to the benefit of the ultimate parent entity, Southern Cross Media Group Limited. Covenant testing dates fall at 30 June and 31 December each year until the facility maturity date. At 30 June 2024, the Group complied with all the covenants. The carrying amounts of assets pledged as security by Southern Cross Austereo Pty Ltd for current and non-current borrowings are: Consolidated 2024 $’000 2023 $’000 Current assets Floating charge Cash and cash equivalents 10,540 12,963 Receivables 104,184 97,114 Total current assets pledged as security 114,724 110,077 Non-current assets Floating charge Receivables 9,720 10,919 Derivative financial instruments 485 736 Investments accounted for using the equity method 4,529 4,734 Property, plant and equipment 63,239 76,805 Intangible assets 391,503 712,120 Total non-current assets pledged as security 469,476 805,314 Total assets pledged as security 584,200 915,391 2024 Annual Report Notes to the Consolidated Financial Statements | 75 16. Borrowings (continued) c) Bank facilities and assets pledged as security (continued) Recognition and Measurement Borrowings Borrowings are initially recognised at fair value, net of transaction costs incurred. Transaction costs that have been paid or accrued for prior to the drawdown of debt are classified as prepayments. 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 using the effective interest method. Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date. Borrowing costs Borrowing costs are expensed over the life of the facility to which they relate. 17. Financial Risk Management The Group’s activities expose it to a variety of financial risks: market risk (the Group’s main exposure to market risk is interest rate risk), liquidity risk and cash flow interest rate 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 derivative financial instruments such as interest rate swaps to hedge certain risk exposures. The Risk Management Policy is carried out by management under policies approved by the Board. Senior management of the Group identify, quantify and qualify financial risks as part of developing and implementing the risk management process. The Risk Management Policy is a written document approved by the Board that outlines the financial risk management process to be adopted by management. Specific financial risks that have been identified by the Group are interest rate risk and liquidity risk. a) Interest rate risk Nature of interest rate risk Interest rate risk is the Group’s exposure to the risk that interest rates move in a way that adversely affects the ability of the Group to pay its interest rate commitments. The Group’s interest rate risk arises from long-term borrowings which are taken out at variable interest rates and therefore expose the Group to a cash flow risk. Interest rate risk management Whilst there is no formal policy in place mandating hedging levels, it is considered by the Board regularly and SCA has historically hedged the interest rate risk by taking out floating to fixed rate swaps against a portion of its drawn debt. Such interest rate swaps have the economic effect of converting borrowings from variable rates to fixed rates. Generally, the Group raises long-term borrowings at variable rates and swaps them into fixed rates that are lower than those available if the Group borrowed at fixed rates directly. Under the interest rate swaps, the Group agrees with other parties to exchange, at specified intervals (quarterly), the difference between fixed contract rates and variable rate interest amounts calculated by reference to the agreed notional principal amounts. Exposure and sensitivity to interest rate risk External borrowings of the Group currently bear an average variable interest rate of 5.9% (2023: 5.1%). In 2020 the Group entered into $100 million of interest rate swap contracts under which it was obliged to receive interest at variable rates and pay interest at fixed rates starting in January 2021 at an average fixed rate of 1.04%. These interest rate swap contracts expired in January 2023. In 2023 the Group entered into $35 million of interest rate swap contracts under which it is obliged to receive interest at variable rates and pay interest at fixed rates starting in April 2023 at an average fixed rate of 3.6%. These interest rate swap contracts will expire in April 2026. Details on how the Group accounts for the interest rate swap contracts as cash flow hedges are disclosed in note 26. Derivative financial instruments Consolidated 2024 $’000 2023 $’000 Interest rate swap contracts – non-current asset 485 736 Total derivative financial instruments 485 736 Swaps currently in place cover 30% (2023 – 30%) of the variable loan principal outstanding. The fixed interest rates of the swaps is 3.6% (2023: 3.6%) and the variable rates on the loans are 1.5% (2023: 1.4%) above the 3 months bank bill rate, which at the end of the reporting period was 4.4% (2023: 3.7%). The swap contracts require settlement of net interest receivable or payable every 3 months. The settlement dates coincide with the dates on which interest is payable on the underlying debt. Southern Cross Austereo 76 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 17. Financial Risk Management (continued) a) Interest rate risk (continued) Effects of hedge accounting on the financial position and performance The effects of the interest rate swaps on the Group’s financial position and performance are as follows: Consolidated 2024 $’000 2023 $’000 Carrying amount asset 485 736 Notional 35,000 35,000 Maturity date 2026 35,000 35,000 Hedge ratio 1:1 1:1 Change in fair value of outstanding hedging instruments since 1 July 14 685 Change in value of hedged item used to determine hedge effectiveness (14) (685) Weighted average hedged rate for the year 3.59% 1.36% Hedging reserve The Group’s hedging reserve disclosed in the Consolidated Statement of Changes in Equity relates to the following hedging instruments: Hedge Reserve for Interest rate swaps $’000 Opening balance 1 July 2022 553 Add: Change in fair value of hedging instrument recognised in OCI for the year 685 Less: reclassified from OCI to profit or loss (738) Add: Deferred tax 15 Closing balance 30 June 2023 515 Add: Change in fair value of hedging instrument recognised in OCI for the year 14 Less: reclassified from OCI to profit or loss (264) Add: Deferred tax 75 Closing balance 30 June 2024 340 Interest rate swap contracts The contracts require settlement of net interest receivable or payable and are timed to coincide with the approximate dates on which interest is payable on the underlying debt. These interest rate swaps are cash flow hedges as they satisfy the requirements for hedge accounting. Any change in fair value of the interest rate swaps is taken to the hedge reserve in equity in the relevant period. In assessing interest rate risk, management has assumed a +/- 100 basis points movement (2023: +/- 100 basis points) in the relevant interest rates at 30 June 2024 for financial assets and liabilities denominated in Australian Dollars (‘AUD’). The following table illustrates the impact on profit or loss with no impact directly on equity for the Group. Consolidated AUD exposures Carrying Value $’000 Impact on post-tax profits Increase/(decrease) +/- 100 basis points Impact on reserves Increase/(decrease) +/- 100 basis points $’000 $’000 $’000 $’000 2024 +100 -100 +100 -100 Cash at bank 10,540 74 (74) – – Interest rate swaps 485 245 (245) 595 (593) Borrowings (118,000) (826) 826 – – 2023 +100 –100 +100 –100 Cash at bank 12,963 91 (91) – – Interest rate swaps 736 245 (245) 916 (914) Borrowings (118,000) (826) 826 – – 2024 Annual Report Notes to the Consolidated Financial Statements | 77 17. Financial Risk Management (continued) b) Liquidity risk Nature of liquidity risk Liquidity risk is the risk of an entity encountering difficulty in meeting obligations associated with financial liabilities. Liquidity risk management Prudent liquidity risk management implies maintaining sufficient cash, the availability of funding through an adequate amount of committed credit facilities and the ability to close out market positions. The Group and Company have a liquidity management policy which manages liquidity risk by monitoring the stability of funding, surplus cash or near cash assets, credit facility headroom, anticipated cash in and outflows and exposure to connected parties. Exposure and sensitivity Financing arrangements Unrestricted access was available at balance date to the following lines of credit: Consolidated Bank facilities (non-current) $’000 Bank facilities (current) $’000 Working capital facility $’000 Total facilities $’000 As at 30 June 2024 Line of credit value 160,000 25,000 7,000 192,000 Used at balance date (118,000) – (5,586) (123,586) Unused at balance date 42,000 25,000 1,414 68,414 Consolidated Bank facilities (non-current) $’000 Bank facilities (current) $’000 Working capital facility $’000 Total facilities $’000 As at 30 June 2023 Line of credit value 160,000 25,000 7,000 192,000 Used at balance date (118,000) – (5,164) (123,164) Unused at balance date 42,000 25,000 1,836 68,836 The $160 million debt facility for the Group matures on 9 January 2026. The short-term $25 million overdraft facility with the ANZ Banking Group, is renewable on an annual basis each 30 April. The working capital facility is utilised for the provision of bank guarantees as security for the Group’s rental properties. In addition to the above, the Group has a $1.5 million credit card facility. The Group’s bank facilities are denominated in Australian dollars as at 30 June 2024 and 30 June 2023. Undiscounted future cash flows The tables below summarise the maturity profile of the financial liabilities as at 30 June based on contractual undiscounted repayment obligations. Repayments which are subject to notice are treated as if notice were given immediately. Consolidated As at 30 June 2024 Less than 1 year $’000 1-2 years $’000 2-3 years $’000 3-5 years $’000 Greater than 5 years $’000 Total contractual cash flows $’000 Carrying amount liabilities $’000 Borrowings – Principal – 118,000 – – – 118,000 118,000 Interest cash flows1 7,096 3,666 – – – 10,762 N/A Payables2 35,749 – – – – 35,749 40,780 Lease liabilities 13,926 14,076 14,127 30,229 104,005 176,363 128,275 Total 56,771 135,742 14,127 30,229 104,005 340,874 287,055 Consolidated As at 30 June 2023 Less than 1 year $’000 1-2 years $’000 2-3 years $’000 3-5 years $’000 Greater than 5 years $’000 Total contractual cash flows $’000 Carrying amount liabilities $’000 Borrowings – Principal – – 118,000 – – 118,000 118,000 Interest cash flows1 6,983 6,965 3,663 – – 17,611 N/A Payables2 39,863 – – – – 39,863 43,739 Lease liabilities 12,606 12,711 12,209 26,351 114,902 178,779 130,041 Total 59,452 19,676 133,872 26,351 114,902 354,253 291,780 1 Calculated using a weighted average variable interest rate. Interest cash flows includes interest on principal borrowings, swap interest and the commitment fee on the Syndicated Facility Agreement. 2 The payables balance excludes interest payable as the cash flows are included in ‘Interest cash flows’ above and excludes GST payable as this is not a financial liability. Southern Cross Austereo 78 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 Group Structure 18. Non-Current Assets – Investments a) Investments accounted for using the Equity Method Consolidated 2024 $’000 2023 $’000 Carrying amount at the beginning of the financial year 4,859 5,212 Share of profit after income tax 369 697 Sale of unlisted equity securities (800) – Dividends (900) (1,050) Total Investments accounted for using the Equity Method 3,528 4,859 b) Financial assets at fair value through profit or loss Consolidated 2024 $’000 2023 $’000 Carrying amount at the beginning of the financial year 1,467 1,253 Acquisition of unlisted equity securities 61 214 Revaluation of unlisted equity securities 734 – Total Financial assets at fair value through profit or loss 2,262 1,467 Total Investments 5,790 6,326 19. Subsidiaries The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries: Name of entity Country of incorporation Class of shares/units Effective ownership interest 2024 Effective ownership interest 2023 Southern Cross Media No 1 Pty Limited (SCM1) Australia Ordinary 100% 100% Southern Cross Media Australia Holdings Pty Limited (SCMAHL) Australia Ordinary 100% 100% Southern Cross Media Group Investments Pty Ltd (SCMGI) Australia Ordinary 100% 100% Southern Cross Austereo Pty Limited (SCAPL) and controlled entities Australia Ordinary 100% 100% The proportion of ownership interest is equal to the proportion of voting power held unless otherwise indicated. Recognition and Measurement Subsidiaries Subsidiaries are those entities over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of voting rights. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. Where control of an entity is obtained during a financial year, its results are included in the Consolidated Statement of Comprehensive Income from the date on which control commences. Where control of an entity ceases during a financial year, its results are included for that part of the year during which control existed. Intercompany transactions, balances and unrealised gains on transactions between Group companies are eliminated. Non-controlling interests in the results and equity of subsidiaries are shown separately in the Consolidated Statement of Comprehensive Income and Consolidated Statements of Financial Position respectively. 2024 Annual Report Notes to the Consolidated Financial Statements | 79 20. Parent Entity Financial Information a) Summary financial information The following aggregate amounts are disclosed in respect of the parent entity, Southern Cross Media Group Limited: Statement of Financial Position Southern Cross Media Group Limited 2024 $’000 2023 $’000 Current assets 1,205 1,536 Non-current assets 239,800 444,139 Total assets 241,005 445,675 Current liabilities 540 1,666 Total liabilities 540 1,666 Net assets 240,465 444,009 Issued capital 1,418,517 1,418,517 Reserves 5,619 5,475 Accumulated losses – 2014 reserve (96,805) (96,805) Accumulated losses – 2015 H2 reserve (323,833) (323,833) Retained profits – 2019 reserve 39,747 47,424 Retained profits – 2020 reserve 55,054 55,054 Accumulated losses – 2021 reserve (355,442) (355,442) Accumulated losses – 2022 reserve (323,270) (323,270) Retained profits – 2023 reserve 16,889 16,889 Accumulated losses – 2024 reserve (196,011) – Total equity 240,465 444,009 Profit/(loss) for the year (196,011) 27,932 Total comprehensive income (196,011) 27,932 In FY2024, the parent entity recorded an impairment of $206.3 million due to a reduction in the recoverable amount of the investment in a subsidiary determined using fair value less costs of disposal. b) Guarantees entered into by the parent entity The parent entity has not provided any financial guarantees in respect of bank overdrafts and loans of subsidiaries as at 30 June 2024 (2023: nil). The parent entity has not given any unsecured guarantees at 30 June 2024 (2023: nil). c) Contingent liabilities of the parent entity The parent entity did not have any contingent liabilities as at 30 June 2024 (30 June 2023: nil). d) Contractual commitments for the acquisition of property, plant or equipment As at 30 June 2024, the parent entity had no contractual commitments (30 June 2023: nil). Recognition and Measurement Parent entity financial information The financial information for the parent entity has been prepared on the same basis as the consolidated financial statements, except as set out on the following page. i) Investments in subsidiaries, associates and joint venture entities Investments in subsidiaries are accounted for at cost in the financial statements of the Company, less any impairment charges. ii) Tax consolidation legislation The Company and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation as of 23 November 2005. The Company is the head entity of the tax consolidated group. Members of the group have entered into a tax sharing agreement in order to allocate income tax expense to the wholly-owned subsidiaries on a stand-alone basis. The tax sharing arrangement provides for the allocation of income tax liabilities between the entities should the head entity default on its tax payment obligations. The possibility of such a default is considered remote at the date of this report. Members of the tax consolidated group have entered into a tax funding agreement. The group has applied the group allocation approach in determining the appropriate amount of current taxes to allocate to members of the tax consolidated group. The tax funding agreement provides for each member of the tax consolidated group to pay a tax equivalent amount to or from the parent in accordance with their notional current tax liability or current tax asset. Such amounts are reflected in amounts receivable from or payable to the parent company in their accounts and are settled as soon as practicable after lodgement of the consolidated return and payment of the tax liability. Southern Cross Austereo 80 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 Other Notes to the Consolidated Financial Statements 21. Share-Based Payments The Company operates a long-term incentive plan for Executive KMP and certain senior executives. The share-based payment expense for the year ended 30 June 2024 was $144,111 (2023: $276,733). The following table reconciles the performance rights outstanding at the beginning and end of the year: Number of performance rights 2024 2023 Balance at beginning of the year 945,954 403,052 Granted during the year 1,090,635 1,131,948 Exercised during the year – – Forfeited during the year (519,813) (589,046) Balance at end of year 1,516,776 945,954 Recognition and Measurement Share-based compensation benefits are provided to employees via certain Employee Agreements. Information relating to these Agreements is set out in the Remuneration Report. The fair values of entitlements provided are recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised as an expense over the period during which the employees become unconditionally entitled to the shares. No performance rights will be awarded under the FY2024 Executive Incentive Plan. The fair value at grant date of the securities granted is adjusted to reflect any market vesting conditions but excludes the impact of any non- market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of shares that are expected to be issued. At each balance sheet date, the entity revises its estimate of the number of shares that are expected to be issued. The employee benefit expense recognised each period takes into account the most recent estimate. The impact of the revision to original estimates, if any, is recognised in profit or loss with a corresponding adjustment to equity. Where the terms of the share-based payment entitlement are modified in the favour of the employee, the changes are reflected when determining the impact on profit or loss. 22. Remuneration of Auditors Consolidated 2024 $ 2023 $ a) Audit and other assurance services PricewaterhouseCoopers Australian firm: Statutory audit and review of financial reports 859,159 792,111 Other assurance services – – Regulatory returns 19,911 19,911 Total remuneration for audit and other assurance services 879,070 812,022 b) Taxation services PricewaterhouseCoopers Australian firm: Tax services – – Total remuneration for taxation services – – c) Other services PricewaterhouseCoopers Australian firm: Debt advisory – – Total remuneration for other services – – Total 879,070 812,022 The Group 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. The Board has considered the position and, in accordance with the advice received from the Audit & 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: – all non-audit services have been reviewed by the Audit & Risk Committee to ensure they do not impact the impartiality and objectivity of the auditor; and – none of the services undermine the general principles relating to auditor independence as set out in APES 110: Code of Ethics for Professional Accountants, including reviewing or auditing the auditor’s own work, acting in a management or a decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risk and rewards. 2024 Annual Report Notes to the Consolidated Financial Statements | 81 23. Related Party Disclosures Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed below. a) KMP During the year, no KMP of the Company or the Group has received or become entitled to receive any benefit because of a contract made by the Group with a KMP or with a firm of which a KMP is a member, or with an entity in which the KMP has a substantial interest except on terms set out in the governing documents of the Group or as disclosed in this financial report. The aggregate compensation of KMP of the Group is set out below: Consolidated 2024 $ 2023 $ Short-term employee benefits 2,793,082 4,423,689 Post-employment benefits 143,960 189,365 Other long-term benefits 32,050 143,162 Termination benefits – 864,582 Share-based payments 55,183 (28,654) 3,024,275 5,592,144 Note: Changes to KMP during the year can be found in the Remuneration Report. The number of ordinary shares in the Company held during the financial year by KMP of the Company and Group, including their personally related parties, are set out in the Remuneration Report in the Directors’ Report. There were no loans made to or other transactions with KMP during the year (2023: nil). b) Subsidiaries and Associates Ownership interests in subsidiaries are set out in note 19. Details of interests in associates and distributions received from associates are disclosed in note 18. 24. Leases and Other Commitments Consolidated 2024 $ 2023 $ Capital commitments Commitments for the acquisition of plant and equipment contracted for at the reporting date but not recognised as liabilities are payable as follows: Within one year 243 1,556 243 1,556 Other commitments In 2019, the Group entered into a 15-year contract with Broadcast Australia for the outsourcing of the Group’s transmission services to support both radio and television broadcasting. In addition to the prepayment disclosed in Note 11 b) the Group is committed to annual fees through to September 2034. Leases From 1 July 2019, the Group recognised right-of-use assets for these leases, except for short-term and low-value leases. The Group leases various premises, IT equipment and vehicles. Premises typically have initial rental periods of 5 to 10 years, with options, exercisable by the Group, for periods extending the total lease period up to 30 years. Other leases are typically for less than 4 years. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. Extension options are included in a number of property leases across the Group, which provide flexibility in terms of managing the assets used in the Group’s operations. The extension options are exercisable by the Group, which applies judgement to determine whether these options are reasonably certain or not. Extension and termination options have been included in all property leases across the Group except those that are surplus to the Group’s operational requirements. The Group sub-leases buildings under an operating lease and rent revenue is recorded as income in the profit or loss on a straight-line basis. Where the Group assumes that extension options in leases will be exercised these are included in the calculations for the lease liability and ROU asset. Twenty-eight leases were renegotiated during the year resulting in a total net lease liability and ROU remeasurements of $1.0 million. Southern Cross Austereo 82 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 24. Leases and Other Commitments (continued) a) Amounts Recognised in the Consolidated Statement of Comprehensive Income The Consolidated Statement of Comprehensive income shows the following amounts relating to leases: 2024 $’000 2023 $’000 Depreciation charge of right-of-use assets Premises 9,244 9,116 IT equipment 1,410 1,364 Vehicles 235 281 10,889 10,761 Interest expense on lease liabilities 6,564 6,576 b) Amounts Recognised in the Consolidated Statement of Financial Position The Consolidated Statement of Financial Position includes the following amounts relating to leases: Lease liabilities as at 30 June 2024: Lease Liabilities 30 June 2024 $’000 30 June 2023 $’000 Current 7,752 7,105 Non-Current 120,523 122,936 Total lease liabilities 128,275 130,041 The associated right-of-use assets as at 30 June 2024 by asset class: 30 June 2024 $’000 30 June 2023 $’000 Premises 97,964 104,147 IT Equipment 5,917 4,872 Vehicles 847 704 Total right-of-use assets 104,728 109,723 At 30 June 2024, the total cash outflow for leases was $13.9 million (2023: $13.1 million) and additions to the right-of-use assets was $4.6 million (2023: $8.2 million), excluding acquisition leases. Rental contracts may contain both lease and non-lease components. The Group allocates the consideration in the contract to the lease and non-lease components based on their relative stand-alone prices. 25. Events Occurring after Balance Date No matters or circumstances have arisen since the end of the financial year that have significantly affected, or may significantly affect, the operations, results of operations or state of affairs of the Group in subsequent accounting periods. 26. Other Accounting Policies Defined contribution scheme The Group operates a defined contribution scheme. The defined contribution scheme comprises fixed contributions made by the Group with the Group’s legal or constructive obligation being limited to these contributions. Contributions to the defined contribution scheme are recognised as an expense as they become payable. Prepaid contributions are recognised in the Consolidated Statement of Financial Position as an asset to the extent that a cash refund or a reduction in the future payments is available. The defined contribution plan expense for the year was $18.7 million (2023: $16.8 million) and is included in employee expenses. Derivative financial instruments The Group enters into interest rate swap agreements to manage its financial risks. Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to their fair value. The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and if so, the nature of the item being hedged. The Group may have derivative financial instruments which are economic hedges, but do not satisfy the requirements of hedge accounting. Gains or losses from changes in fair value of these economic hedges are taken through profit or loss. 2024 Annual Report Notes to the Consolidated Financial Statements | 83 26. Other Accounting Policies (continued) Derivative financial instruments (continued) If the derivative financial instrument meets the hedge accounting requirements, the Group designates the derivatives as either (1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or (2) hedges of highly probable forecast transactions (cash flow hedge). The Group documents at the inception of the transaction the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking various hedge transactions. The Group also documents its assessments, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in fair values or cash flows of hedged items. The fair values of over-the-counter derivatives are determined using valuation techniques adopted by the Directors with assumptions that are based on market conditions existing at each balance sheet date. The fair values of interest rate swaps are calculated as the present values of the estimated future cash flows. Hedge accounting The Group designated interest rates swaps as cash flow hedges and has applied hedge accounting from this date. The Group documents the relationship between hedging instruments and hedged items, as well as its risk management objective and strategy for undertaking the hedge transactions. The Group also documents its assessment, both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging transactions have been and will continue to be highly effective in offsetting changes in cash flows of hedged items. The fair values of derivative financial instruments used for hedging purposes are presented within the balance sheet. Movements in the hedging reserve are shown within the Statement of Changes in Equity. The full fair value of a hedging derivative is classified as a non-current asset or liability when the remaining maturity of the hedged item is more than 12 months; it is classified as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Derivatives Hedge ineffectiveness Hedge effectiveness is determined at the inception of the hedge relationship, and through periodic prospective effectiveness assessments to ensure that an economic relationship exists between the hedged item and hedging instrument. The Group enters into interest rate swaps that have similar critical terms as the hedged item, such as reference rate, reset dates, payment dates, maturities and notional amount. The Group hedges up to 100% of its loans, and the hedged item is identified as a proportion of the outstanding loans up to the notional amount of the swaps. As all critical terms matched during the year, the economic relationship was 100% effective. The Group therefore performs a qualitative assessment of effectiveness. If changes in circumstances affect the terms of the hedged item such that the critical terms no longer match exactly with the critical terms of the hedging instrument, the Group uses the hypothetical derivative method to assess effectiveness. Hedge ineffectiveness may occur due to: – the credit value/debit value adjustment on the interest rate swaps which is not matched by the loan; and – differences in critical terms between the interest rate swaps and loans. There was no ineffectiveness during 2024 or 2023 in relation to the interest rate swaps. Cash flow hedge The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in other comprehensive income and accumulated in reserves in equity. The gain or loss relating to the ineffective portion is recognised immediately in the Consolidated Statement of Comprehensive Income. Amounts accumulated in equity are reclassified to profit or loss in the periods when the hedged item affects profit or loss (for instance when the forecast sale that is hedged takes place). The gain or loss relating to the effective portion of interest rate swaps hedging variable rate borrowings is recognised in profit or loss within ‘interest expense and other borrowing costs’. When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in profit or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassified to profit or loss. Fair value estimation The fair value of financial assets and financial liabilities must be estimated for recognition and measurement or for disclosure purposes. The Group has adopted AASB 7 Financial Instruments: Disclosures which requires disclosure of fair value measurements by level of the following fair value measurement hierarchy: Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 – 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); and Level 3 – inputs for the asset or liability that are not based on observable market data (unobservable inputs). The fair value of financial instruments that are not traded in an active market (for example, unlisted convertible notes) is determined using valuation techniques. The Group uses a variety of methods and makes assumptions that are based on market conditions existing at each balance date. Other techniques, such as estimated discounted cash flows, are used to determine fair value for the remaining financial instruments. The fair value of interest rate swaps is calculated as the present value of the estimated future cash flows. The nominal values less estimated credit adjustments of trade receivables and payables are assumed to approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate that is available to the Group for similar financial instruments. New accounting standards and interpretations The year-end financial statements have been prepared on a basis of accounting policies consistent with those applied in the 30 June 2023 financial statements. The Group adopted certain accounting standards, amendments and interpretations during the financial year, which did not result in changes in accounting policies nor an adjustment to the amounts recognised in the financial statements. They also do not significantly affect the disclosures in the Notes to the consolidated financial statements. Southern Cross Austereo 84 | Notes to the Consolidated Financial Statements Notes to the Consolidated Financial Statements For the year ended 30 June 2024 Name of entity Type of entity Trustee, partner or participant in JV % of share capital Place of business/ Country of incorporation Australian resident or foreign resident Southern Cross Media Group Limited Body Corporate – n/a Australia Australian Resident Refer list of relevant entities in (a) below Body Corporate – 100% Australia Australian Resident Digital Radio Broadcasting Gold Coast Pty Ltd Body Corporate – 66.7% Australia Australian Resident Digital Radio Broadcasting Hobart Pty Ltd Body Corporate – 66.7% Australia Australian Resident Perth FM Facilities Pty Ltd Body Corporate – 67% Australia Australian Resident Basis of preparation This consolidated entity disclosure statement (CEDS) has been prepared in accordance with the Corporations Act 2001 and includes information for each entity that was part of the consolidated entity as at the end of the financial year in accordance with AASB 10 Consolidated Financial Statements. (a) The following entities are all Body Corporates, 100% owned, incorporated in Australia, operating and tax resident in Australia: Southern Cross Media Australia Holdings Pty Limited SCMG Investments Pty Ltd ACN 159 751 443 Pty Ltd Southern Cross Media No. 1 Pty Limited Southern Cross Media No. 2 Pty Limited Southern Cross Austereo Pty Limited Southern Cross Media Services Pty Limited Southern Cross National Network Pty Ltd Austereo Group Pty Ltd VRB Pty Ltd SCA Digital Pty Ltd Austereo International Pty Ltd Austereo Entertainment Pty Ltd Austereo E S P Finance Pty Ltd Austereo Online Pty Ltd Austereo Capital FM Pty Ltd Radio Newcastle Pty Ltd Consolidated Broadcasting System (WA) Pty Ltd Perth FM Radio Pty Ltd Today Radio Network Pty Ltd Today FM Sydney Pty Ltd Today FM Brisbane Pty Ltd Triple M Network Pty Ltd Triple M Melbourne Pty Ltd Triple M Adelaide Pty Ltd Triple M Sydney Pty Ltd Triple M Brisbane Pty Ltd Gold Coast FM Pty Ltd Sea FM Central Coast Pty Limited Gold Radio Service Pty Limited Rockhampton Broadcasting Co. Pty Limited Maryborough Broadcasting Company Pty Limited FNQ Broadcasters Townsville Pty Limited FNQ Broadcasters Cairns Pty Limited Whitsundays Broadcasters Pty Limited Rockhampton Transmission Facility Pty Limited The Radio.com.au Pty Ltd Great Southern Land Broadcasters Pty Ltd Harbour View Radio Pty Limited River View Radio Pty Limited Sea FM Gold Coast Pty Limited Central Coast Radio Pty Ltd Regional Radio Broadcasters Pty Limited Town and Coastal Broadcasters Australia Pty Limited Forsby Pty Ltd Third National Network Australia Pty Ltd Burl Rose Pty Ltd Goulburn Valley Border Venture Pty Ltd Votraint No. 691 Pty Limited Goulburn and Border Broadcasters Pty Limited Regional Radio No. 2 Pty Ltd Votraint No. 620 Pty Ltd Dubbo FM Radio Pty Ltd Radio 2LF Pty Ltd Central Coast No. 2 Pty Ltd Clainew Pty Ltd Bassfar Pty Limited South Eastern Broadcasters Pty Ltd Radio 2GZ Pty Ltd Commercial Radio Coffs Harbour Pty Ltd Mid-Coast Broadcasters Pty Ltd Radio Albury Wodonga Pty Limited Riverina Broadcasters (Holdings) Pty Ltd Radio 3B0 Pty Ltd Radio 3CV Pty Ltd Radio 2RG Pty Ltd Radio 3MA Pty Ltd Veneta Pty Ltd Regional Broadcasters Australia Pty Ltd Tablelands Broadcasting Pty Ltd West Australian Radio Network Pty Ltd Radio West Broadcasters Pty Ltd Elldale Pty Ltd Redwave Media Pty Ltd Great Northern Broadcasters Pty Ltd Geraldton FM Pty Ltd Greater Cairns Radio Pty. Limited Mid-Districts Radio Pty Ltd Esperance Broadcasters Pty Ltd North West Broadcasters Pty Ltd Radio 6AM Pty Ltd Belcap Investments Pty Ltd North West Radio Pty Ltd Spirit Radio Network Pty Ltd Townsville Broadcasters Pty Ltd Barrier Reef Broadcasting Proprietary Limited Nessan Pty Ltd North Queensland Broadcasting Corporation Pty Ltd National Radio Sales Australia Pty Ltd Mackay Transmission Facility Pty Ltd Australian Regional Broadcasters Pty Ltd Southern Cross Austereo Services Pty Ltd Regional Media No. 1 Pty Limited Regional Media No. 2 Pty Limited Southern Cross Broadcasting (Australia) Pty Limited Southern Cross Sales Pty Ltd Southern Cross Communications Pty Limited Southern Cross Austereo Treasury Pty Ltd Australian Capital Television Pty. Limited Regional Television Pty Limited Southern Cross Telecommunications Pty Ltd Northern Rivers Television Pty Ltd Southern Cross Television (TNT9) Pty. Limited Southern Cross Network (Production) Pty. Ltd. Spencer Gulf Telecasters Pty Limited Broken Hill Television Pty Limited Video Central Pty Ltd Consolidated Entity Disclosure Statement 2024 Annual Report Consolidated Entity Disclosure Statement | 85 The Directors of the Company declare that: 1. in the Directors’ opinion, 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. in the Directors’ opinion, the financial statements and notes as set out on pages 52 to 84 are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Company and the consolidated entity; and 3. the Directors have been given the declarations required by section 295A of the Corporations Act 2001. 4. Note 1(i) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board. 5. In the Directors’ opinion, the Consolidated Entity Disclosure Statement set out on page 85 is true and correct. Signed in accordance with a resolution of the Directors made pursuant to section 295(5) of the Corporations Act. On behalf of the Directors Heith Mackay-Cruise Chairman Sydney, Australia 29 August 2024 John Kelly Managing Director Sydney, Australia 29 August 2024 Southern Cross Austereo 86 | Directors’ Declaration Directors’ Declaration Independent Auditor’s Report to the members of Southern Cross Media Group Limited PricewaterhouseCoopers, ABN 52 780 433 757 2 Riverside Quay, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999 Independent auditor’s report To the members of Southern Cross Media Group Limited Report on the audit of the financial report Our opinion In our opinion: The accompanying financial report of Southern Cross Media Group Limited (the Company) and its controlled entities (together the Group) is in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the Group's financial position as at 30 June 2024 and of its financial performance for the year then ended (b) complying with Australian Accounting Standards and the Corporations Regulations 2001. What we have audited The financial report comprises: • the consolidated statement of financial position as at 30 June 2024 • the consolidated statement of comprehensive income for the year then ended • the consolidated statement of changes in equity for the year then ended • the consolidated statement of cash flows for the year then ended • the notes to the consolidated financial statements, including material accounting policy information and other explanatory information • the consolidated entity disclosure statement as at 30 June 2024 • the directors’ declaration. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial report section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Independence We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional & Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code. 2024 Annual Report Independent Auditor’s Report | 87 Our audit approach An audit is designed to provide reasonable assurance about whether the financial report is free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial report. We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial report as a whole, taking into account the geographic and management structure of the Group, its accounting processes and controls and the industry in which it operates. Audit Scope Our audit focused on where the Group made subjective judgements; for example, significant accounting estimates involving assumptions and inherently uncertain future events. Key audit matters Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report for the current period. The key audit 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. Further, any commentary on the outcomes of a particular audit procedure is made in that context. We communicated the key audit matters to the Audit and Risk Committee. Key audit matter How our audit addressed the key audit matter Impairment assessment for Broadcast Radio indefinite lived intangible assets (Refer to note 9) As described in note 9, the directors’ determined that Broadcast Radio and Digital Audio, formerly comprising the Audio cash generating unit (CGU), had independent cash inflows and therefore at 30 June 2024 have been identified as separate CGUs. The Group has significant indefinite lived intangible assets in the Broadcast Radio CGU, totalling $362.9 million as at 30 June 2024. These are subject to an annual impairment test by the Group using a fair value less costs of disposal discounted cash flow model (“the model”). At 30 June 2024, the Group recognised an impairment charge of $326.1 million in relation to the Broadcast Radio CGU licences. This was a key audit matter due to the size of the indefinite lived intangible assets in the Broadcast Radio CGU and on the basis that the impairment test involves judgemental estimates of future profits and cash flows. In performing our audit work we considered, amongst other things: ● whether the Group’s identification of CGUs is appropriate ● the market capitalisation of the Group in comparison to the carrying value of its net assets ● the appropriateness of adopting a fair value less costs of disposal methodology for estimating the Broadcast Radio CGU’s recoverable amount. To evaluate the model prepared for the directors’ impairment assessment, with assistance from PwC valuation experts in aspects of our work, we performed the following procedures, amongst others: ● sample tested the mathematical accuracy of the model’s calculations Southern Cross Austereo 88 | Independent Auditor’s Report Independent Auditor’s Report to the members of Southern Cross Media Group Limited Key audit matter How our audit addressed the key audit matter ● assessed the appropriateness of the discount rate incorporated in the model in consideration of the forecasted cash flows ● assessed the appropriateness of the significant assumptions within the model compared to observable market information where available ● evaluated the Group’s historical ability to forecast future cash flows by comparing forecast cash flows with reported actual performance ● considered whether the model’s allocation of corporate costs between CGUs was appropriate and reflective of actual costs incurred ● assessed the sensitivity of changes in significant assumptions incorporated in the model ● compared the Group’s valuation to external data sources including broker reports. We evaluated the reasonableness of the disclosures in note 9 in light of the requirements of Australian Accounting Standards. Indefinite lives classification of intangible assets (Refer to note 8) As at 30 June 2024, the Group has intangible assets totalling $370.3 million, including Radio Broadcasting Licences, Brands and Tradenames classified as indefinite lived intangible assets. This was a key audit matter because determination of whether or not intangible assets are indefinite lived involves significant judgement by the Group. The determination has an impact on the financial report as it affects whether amortisation is recorded in the In assessing the classification of indefinite useful lived intangible assets, we performed the following procedures, amongst others: ● considered relevant regulatory developments in the year which could change the licence renewal process or use of the brands ● assessed whether there had been any revocation of radio licences by Australian Communications and Media Authority (ACMA) in the year ● considered the forecasted growth of the 2024 Annual Report Independent Auditor’s Report | 89 Key audit matter How our audit addressed the key audit matter consolidated statement of comprehensive income. associated cash flows of the assets ● evaluated the directors’ strategic plans for the intended use of the assets ● compared the Group’s classification of indefinite lived intangible assets against a selection of similar assets held by other industry participants in the radio broadcasting market. We considered the reasonableness of the disclosures in note 8 with regard to Australian Accounting Standards. Other information The directors are responsible for the other information. The other information comprises the information included in the annual report for the year ended 30 June 2024, but does not include the financial report and our auditor’s report thereon. Prior to the date of this auditor's report, the other information we obtained included the Directors’ Report. We expect the remaining other information to be made available to us after the date of this auditor's report. Our opinion on the financial report does not cover the other information and we do not and will not express an opinion or any form of assurance conclusion thereon through our opinion on the financial report. We have issued a separate opinion on the remuneration report. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. When we read the other information not yet received, if we conclude that there is a material misstatement therein, we are required to communicate the matter to the directors and use our professional judgement to determine the appropriate action to take. Responsibilities of the directors for the financial report The directors of the Company are responsible for the preparation of the financial report in accordance with Australian Accounting Standards and the Corporations Act 2001, including giving a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. Southern Cross Austereo 90 | Independent Auditor’s Report Independent Auditor’s Report to the members of Southern Cross Media Group Limited In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s responsibilities for the audit of the financial report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of 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 Our opinion on the remuneration report We have audited the remuneration report included in the Directors’ Report for the year ended 30 June 2024. In our opinion, the remuneration report of Southern Cross Media Group Limited for the year ended 30 June 2024 complies with section 300A of the Corporations Act 2001. Responsibilities The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards. PricewaterhouseCoopers Trevor Johnston Melbourne Partner 29 August 2024 2024 Annual Report Independent Auditor’s Report | 91 Southern Cross Austereo Shareholder Information Name Fully paid ordinary shares % Issued capital Citicorp Nominees Pty Limited 41,610,781 17.35 Gulgong Pty Ltd 35,505,074 14.80 HSBC Custody Nominees (Australia) Limited 28,576,882 11.91 UBS Nominees Pty Ltd 23,474,039 9.78 J P Morgan Nominees Australia Limited 15,454,261 6.44 19 Cashews Pty Ltd 11,250,000 4.69 Tom Hadley Enterprises Pty Ltd 3,000,000 1.25 HSBC Custody Nominees (Australia) Limited – GSCO ECA 2,647,664 1.10 BNP Paribas Noms Pty Ltd Hub24 Custodian Serv Ltd 2,438,353 1.02 Netyard Pty Ltd 1,750,000 0.73 John William Harbot 1,600,000 0.67 Anthony John Huntley 1,250,000 0.52 Darren Edward Bates 1,043,092 0.43 Dalelan Pty Limited (Rubinstein Super A/C) 1,000,000 0.42 Forum Investments Pty Limited 1,000,000 0.42 Christopher Stuart King (The King Super Fund) 650,000 0.27 Nielson Superannuation Pty Ltd (Nielson Superannuation A/C) 633,000 0.26 Ace Property Holdings Pty Ltd 600,000 0.25 Weathernerds Pty Limited 600,000 0.25 Manu Electronics Pty Ltd 597,500 0.25 174,680,646 72.81 Range Number of shareholders Full paid ordinary shares % Issued capital 1 – 1,000 4,501 1,954,714 0.81 1,001 – 5,000 2,849 7,086,124 2.95 5,001 – 10,000 864 6,584,659 2.74 10,001 – 100,000 1,103 32,095,431 13.38 100,001 and over 106 192,178,221 80.10 9,423 239,899,149 100.00 Holding less than a marketable parcel 4,029 1,486,125 Additional Information The information below is provided pursuant to ASX Listing Rule 4.10 and was current on 31 August 2024. SCA has only one class of shares, which are fully paid ordinary shares. All holders listed below hold fully paid ordinary shares and each holder has the same voting rights. There are no unlisted securities and there is currently no on-market buy-back. Twenty largest holders The names of the 20 largest holders of SCA’s quoted equity securities are listed below. Distribution of shareholdings Analysis of numbers of equity security holders by size of holding: 92 | Additional information 2024 Annual Report Substantial Holders Substantial holders in SCA (with holdings notified to SCA most recently before 31 August 2024) are set out below: Name Fully paid ordinary shares % Issued capital ARN Media Limited and its related bodies corporate 35,505,074 14.80 19 Cashews Pty Ltd 34,586,950 14.42 Ubique Asset Management Pty Limited 23,377,246 9.75 Spheria Asset Management Pty Ltd 23,718,271 9.89 Pinnacle Investment Management Group Limited 13,101,888 5.46 130,289,429 54.32 Voluntary escrow Securities subject to voluntary escrow are set out below: On-market purchases for employee incentive plans During the year ended 30 June 2024, SCA purchased the following shares on-market for allocation to employees under SCA’s executive incentive plans: Type Date escrow period ends Fully paid ordinary shares Voluntary escrow n/a — — Type Fully paid ordinary shares Average price Executive incentive plan — — — — Additional information | 93 Southern Cross Media Group Limited ABN 91 116 024 536 Company Secretary Tony Hudson Registered office Level 2, 101 Moray Street South Melbourne VIC 3205 Tel: +61 3 9252 1019 Web: https://www.southerncrossaustereo.com.au Share registry Computershare Investor Services Pty Limited Yarra Falls 452 Johnston Street Abbotsford VIC 3067 Tel: 1300 555 159 (within Australia) +61 3 9415 4062 (from outside Australia) Investor Centre: https://www-au.computershare.com/investor/ Southern Cross Austereo Corporate Directory 94 | Corporate Directory 2024 Annual Report ecoStar+ is an environmentally responsible paper made FSC® Recycled certified and manufactured with 100% post consumer recycled fibre in a elemental chlorine free environment under the ISO 14001 environmental management system.