ACADEMIES AUSTRALASIA
GROUP LIMITED
(Formerly Garratt’s Limited)
ACN 000 003 725
ANNUAL REPORT
2011
CHAIRMAN’S REPORT
Dear Shareholder
I am particularly pleased to present this report. Your Company has achieved a commendable result in a very
challenging period.
Notwithstanding all the reported difficulties faced by international education in Australia, our flagship
education business came in with a substantial increase in profits – almost all from the colleges that we have
nurtured and grown over the past 10 years.
Your Company’s revenue increased by 39% to $25.2 million. Consolidated profit before tax from operations
grew by 51% to $3.3 million.
Earnings before interest, tax, depreciation and amortisation (EBITDA) were $3.9 million – up 50% compared
to the previous year’s $2.6 million. The consolidated profit for the financial year after income tax and
eliminating non-controlling entity interests amounted to $2.3 million (2010:$1.6 million).
In the year under review, we began to pay fully-franked dividends. We doubled the interim dividend from one
cent to two cents per share and are pleased to continue the final dividend at the rate of two cents – in spite of
the 14% increase in the number of shares from 41.3 million to 47.3 million. The four cents dividend reflects a
51% payout on the pre-tax earnings of 7.9 cents a share (or 74% on the after-tax earnings of 5.4 cents a share).
Education turnover increased by 65% to $17.8 million, while contribution to profitability rose 74% to $3.9
million. During the year, we acquired 75% of AMI Education Pty Limited in Melbourne which is a registered
Higher Education Institution offering Bachelor and Master Degree courses on behalf of the University of
Ballarat as well as a Degree course in its own name, and also Vocational and English language courses. We
also acquired 51% of Benchmark Resources Pty Limited T/A Benchmark College, addressing the objective to
diversify into the domestic education market. Benchmark College, headquartered in Penrith, NSW, has
operations throughout Australia.
It would be noted that while we have used scrip for part payment for our recent acquisitions, earnings per
share (after tax) increased by 50% from 3.6 cents to 5.4 cents. At the Annual General Meeting shareholders
will be asked to ‘renew’ the Company’s authority to issue up to 15% of the Company’s total shares.
We are continuing to explore opportunities to further expand our operations in Australia and overseas.
Although Premier Fasteners’ contribution dropped 20% to $931,000, we are not unhappy with their
performance as they have strong competition in a challenging market. Sales increased slightly to $7.4 million.
I would like to welcome Philip Carroll and Bridget Mary Carroll to the Board and also John Geoffrey Thearle
Adnams, Daniel Hing Yuen Wong and Mark Kwong To Lo who sit on the Board of AMI Education. Indeed,
on behalf of the Board, may I also welcome all the staff of AMI Education and Benchmark College to the
Academies Australasia family.
I would like to thank and congratulate the Group Managing Director, the directors of the group companies,
management and staff for an excellent contribution. And, on behalf of the Board, I would like to thank
shareholders for their continuing support.
Neville Thomas Cleary
Chairman
13 September 2011
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GROUP MANAGING DIRECTOR’S REVIEW
Dear Shareholder
Swimming against the tide, our education team performed exceptionally in a year when the international
education market continued to be challenged by several factors. While these challenges have not gone away,
we are confident that international education services will continue as a major Australian export. It is, after all,
a clean and truly sustainable industry.
The acquisition of controlling interests in AMI Education and Benchmark College takes our annual
enrolments to more than 5,000 students. AMI Education provides us an entry into the higher education sector
while Benchmark College gives us diversification into the domestic market. Both colleges have a good
reputation. In 2009 Benchmark won the NSW State Training Award of Small Training Provider of the year.
New pathways to Australian courses are being put in place for students studying at Academies Australasia
College, our college in Singapore. The recent appointment of Dr Lemmy Kay Chee Teo as Executive
Director, Principal, is part of the exercise to further strengthen our operations in a country that is determined
to become a centre for international education.
Premier Fasteners has again done well in a difficult market in which, Ivan Mikkelsen and his team continue to
hold their own. Recent changes in the sector offer the possibility of Premier improving its share of the cold
formed fasteners market.
I would like to thank my fellow directors and colleagues in all the group companies, as well as all our
customers, students, teachers and business associates for their confidence and support during the year under
review.
Christopher Elmore Campbell
Group Managing Director
13 September 2011
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CORPORATE GOVERNANCE STATEMENT
At the date of this report, the Board comprised five directors, namely, Neville Thomas Cleary (Chairman,
Independent & Non-Executive), Christopher Elmore Campbell (Group Managing Director, Executive),
Chiang Meng Heng (Non-Executive), Dr John Lewis Schlederer (Independent & Non-Executive) and Philip
Carroll (Executive). In addition, there are two Alternate Directors: Gabriela Del Carmen Rodriguez Naranjo
and Bridget Mary Carroll.
Neville Thomas Cleary, Christopher Elmore Campbell, Chiang Meng Heng and Dr John Schlederer were
members of the Board throughout the year.
Philip Carroll joined the Board on 10 June 2011. Bridget Mary Carroll was appointed his Alternate Director
from 10 June 2011.
Gabriela Del Carmen Rodriguez Naranjo was appointed by Neville Thomas Cleary as his Alternate Director
from 10 May 2011.
The Board is committed to the highest standards of corporate governance and endorses the Australian Stock
Exchange (‘ASX’) Corporate Governance Council’s Corporate Governance Principles and Recommendations
(Second Edition) (‘Recommendations’). However, given the small size and composition of the Board, the
small size of the Company, its activities, and its cost structures, it is neither reasonable nor practicable to
comply with certain Recommendations or to increase the size of the Board at this time.
In this corporate governance statement, where the Company has not complied fully with any of the eight
principles stated in the Recommendations, this is identified and explained.
Principle 1 – Lay solid foundations for management and oversight
Roles and Responsibilities of Board and Management
The Board is responsible for the overall corporate governance of the Company including setting its strategic
direction and performance objectives, increasing shareholder wealth, meeting ethical and regulatory
obligations and managing business risk.
Key responsibilities include:
•
•
•
•
•
•
•
appointing and removing the Group Managing Director;
final approval and monitoring of corporate strategies and performance objectives;
monitoring senior management's performance and implementation of the Board approved
strategies;
reviewing and ratifying systems of risk management and internal compliance and control;
approving and monitoring the progress of major capital expenditure, capital management, and
acquisitions and divestments;
approving and monitoring financial and other reporting; and
other matters required to be dealt with by the Board from time to time.
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All Company senior executives are subject to annual performance review. This involves an evaluation of their
expected contribution, their progress and what was achieved. All senior executives were reviewed during the
year ended 30 June 2011.
The Board ensures that the terms of the approved performance incentives scheme are complied with.
To assist in the execution of its responsibilities, the Board has established an Audit and Risk Committee and a
Remuneration Committee.
Responsibility for the day-to-day operation and administration of the Company is delegated by the Board to
the Group Managing Director and members of the senior management team.
Principle 2 – Structure the Board to add value
Board Composition
The skills, experience, expertise relevant to the position of each director who is in office at the date of the
annual report and their term of office are detailed in the directors’ report.
The names of the independent directors of the Company are:
Neville Thomas Cleary (Chairman)
Dr John Lewis Schlederer
When determining whether a non-executive director is independent the director must not fail any of the
following materiality thresholds:
•
less than 5% of Company shares are held by the director and any entity or individual directly or
indirectly associated with the director;
• no sales are made to or purchases made from any entity or individual directly or indirectly associated
with the director; and
• none of the director’s income or the income of an individual or entity directly or indirectly associated
with the director is derived from a contract with any member of the consolidated group other than
income derived as a director of the group.
The Board regularly assesses whether each non-executive director is independent. In making the assessment
of a director’s independence, materiality is assessed on a case by case basis having regard to the individual
circumstances of the director.
All directors – whether independent or not - should bring an independent judgement to bear on Board
decisions. All directors have the right to seek independent professional advice in the furtherance of their duties
as directors at the company’s expense. Written approval must be obtained from the Chairman prior to
incurring any expense on behalf of the company.
Chiang Meng Heng, Christopher Elmore Campbell and Philip Carroll, each have relevant interests of 5% or
more in the Company shares. In addition, Philip Carroll is the Managing Director of a subsidiary of the
Company. Chiang Meng Heng, Christopher Elmore Campbell and Philip Carroll are not independent.
Nevertheless, the Board believes that Chiang Meng Heng, Christopher Elmore Campbell and Philip Carroll
can, and do, make judgements in the best interests of the Company. The Board does not meet the
Recommendations that there be a majority of independent directors.
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Nominations Committee
Except where a director is elected by shareholders, the Board determines the appointment of new directors.
There is no Nominations Committee as such. However, when considering the appointment of a new director,
the Board would consider the same issues as a Nominations Committee would. The principles and guidelines
are described below.
Procedure for Selection and Appointment of New Directors
The structure of the Board is determined having regard to the following criteria:
•
•
•
•
The Chairman should be a non-executive director.
A majority of the Board should be non-executive directors.
The roles of Chairman and Group Managing Director should not be exercised by the same
individual.
The Board should comprise of directors with an appropriate range of qualifications and
expertise.
The following principles and guidelines are adhered to in the selection and appointment of new directors:
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•
The Board is required to have a broad range of skills, experience, diversity and commercial
expertise to ensure that it is able to discharge its mandate effectively. Therefore, when an
individual is nominated for consideration as a director, their selection will depend upon an
evaluation of what skills, experience and commercial expertise they would bring to the Board
and how these skills would complement or enhance the Board's effectiveness.
The composition of the Board needs to be conducive to making decisions expediently and in the
best interests of the Company as a whole (rather than of individual shareholders or interest
groups). Therefore, the size of the Board is limited so as to encourage efficient decision-making.
Individuals being considered for non-executive roles will be required to provide the Company
with details of their other commitments and an indication of the time involved. Candidates must
be able to satisfy the Board that they will have sufficient time to meet what is expected of them.
The Constitution of the Company provides that the Board may at any time appoint any person to
be a director. That person shall hold office until the end of the next following general meeting
and shall be eligible for election at that meeting.
The Constitution of the Company provides that at every general meeting one-third of the
directors or, if their number is not a multiple of three, then the number nearest to one-third, shall
retire from office and be eligible for re-election.
Performance Evaluation
The Board conducts an evaluation of its performance, policies and practices annually. The review includes an
examination of the effectiveness and composition of the Board, including the required mix of skills,
experience, diversity and other qualities which the non-executive directors should bring to the Board for it to
function competently and efficiently; a review of the Company’s strategic direction and objectives, and an
assessment of the corporate governance practices. The Board also conducts an annual review of the Group
Managing Director and key executives.
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Principle 3 – Promote ethical and responsible decision making
Code of Conduct
The Company has established a Code of Conduct to guide the directors and key executives as to the practices
necessary to maintain confidence in the Company's integrity and the responsibility and accountability of
individuals for reporting and investigating reports of unethical practices. The Company and its directors,
managers, employees and consultants are expected to act with high standards of honesty, integrity, fairness
and equity, striving at all times to enhance the reputation and performance of the consolidated group as a
whole.
The Company’s Code of Conduct is on the Company’s website (www.academies.edu.au).
Diversity Policy
The Company is committed to diversity and inclusiveness, and to providing an environment in which
employees have equal access to opportunities, are treated with fairness and respect, and are not judged by
unlawful or irrelevant reference to their attributes. This commitment enables the Company to attract and retain
people with the best skills and abilities.
A copy of the Company’s Diversity Policy is on the Company’s website (www.academies.edu.au)
The Company does not favour or discriminate against females. As at 30 June 2011, 29% of the Board
members (inclusive of alternates), 43% of senior management and 51% of Group employees (excluding
academic staff), were female.
Employees have a wide range of qualifications and experience and come from more than 20 countries.
Share Trading Policy
A copy of the Company’s policy on the trading of the Company’s securities by key management personnel
was announced to the Australian Stock Exchange on 27 December 2010. A copy of that policy is on the
Company’s website (www.academies.edu.au).
The policy also addresses the subject of ‘Insider Trading’ – i.e. trading while in possession of price sensitive
information. Employees must not trade in the Company’s securities while in possession of price sensitive
information. This prohibition applies to all employees at all times.
Principle 4 – Safeguard integrity in financial reporting
Audit and Risk Committee
The names and qualifications of the directors appointed to the Audit and Risk Committee and their attendance
at meetings of the committee are included in the directors’ report.
During the year the Audit and Risk Committee comprised of Neville Thomas Cleary, Chiang Meng Heng and
Dr John Lewis Schlederer. The Committee was chaired by Neville Thomas Cleary up to 20 August 2010 and
then by Dr John Lewis Schlederer from 21 August 2010.
Christopher Elmore Campbell (as Group Managing Director), the Group Finance Manager and the external
auditor also attend Audit and Risk Committee meetings.
The Audit and Risk Committee’s Charter is available on the Company’s website (www.academies.edu.au).
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Principle 5 – Make timely and balanced disclosure
Continuous Disclosure
The Company has adopted a policy to ensure that it complies with its continuous disclosure obligations under
the ASX Listing Rules which state that:
Once an entity is or becomes aware of any information concerning it that a reasonable person would expect to
have a material effect on the price or value of the entity's securities, the entity must immediately tell ASX that
information.
Employees must immediately notify the Group Managing Director if they become aware of any information
that should be considered for release to the market. The information is reviewed and, if considered material,
the appropriate disclosure is made to the ASX.
The Company will not release any information to any other party until acknowledgement has been received
from the ASX that the information has been released to the market.
A copy of
(www.academies.edu.au
).
the Company’s Continuous Disclosure policy
is on
the Company’s website
Principle 6 – Respect the rights of shareholders
The Company recognises that shareholders must receive high quality relevant information in a timely manner
in order to be able to properly and effectively exercise their rights.
The Company aims to ensure that shareholders are informed of all major developments affecting the
Company. Information is communicated to shareholders on a regular basis through continuous reporting and
half yearly and annual reports. The Board ensures that these reports include all relevant information about the
operations of the Company, changes in the state of affairs of the Company and details of future developments.
All documents that are released publicly (i.e. ASX Announcements and Annual Reports) are made available
on the Company's web site (www.academies.edu.au
).
The Board encourages full participation of shareholders at the Annual General Meeting to ensure a high level
of accountability and identification with the Company's strategy and goals. Important issues are presented to
the shareholders as single resolutions. The Board also requests that the external auditor attend the Annual
General Meeting and be available to answer shareholder questions about the conduct of the audit and the
preparation and content of the auditor's report.
Principle 7 – Recognise and manage risk
The Board has established policies for the oversight and management of material business risks. The Audit
and Risk Committee assists the Board in carrying out this function.
The following material business risks that have the potential to adversely impact the Company’s operations
are addressed:
a. Financial risk: market price risk, liquidity risk, credit risk and corporate and bank guarantees.
b. Business risk: A range of policies and procedures dealing with specific business risks, including:
- Delegation of Authority;
- Capital investment;
- Business conduct; and
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- Litigation reporting.
c. Operational risk:
- Health, safety and environment;
- Asset protection and operational security; and
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Insurance.
Procedures exist to monitor risk, with ultimate reporting to the Board, through either the Audit and Risk
Committee for financial and business risk or the Group Managing Director for operational risk.
The Board acknowledges that the policies are designed to provide reasonable but not absolute protection
against errors and irregularities and that they are intended to identify control issues that require the attention of
the Board or Audit and Risk Committee.
Management has reported that the material business risks are being managed effectively.
The Company has a number of financial control processes to ensure that the information that is presented to
senior management and the Board is both accurate and timely. The control processes include, among other
things:
annual audit and half year review by the external auditor;
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- management review of the balance sheet and internal control environment;
- monthly review of financial performance compared to budget and forecast; and
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analysis of financial performance and significant balance sheet items to comparative
periods.
The Board reviews the implementation of the risk management and internal compliance and control system on
an annual basis. The Group currently does not have an internal audit function. As the Group grows,
consideration will be given to establishing an internal audit operation – either staffed in-house or on contract
with an external firm.
For the annual and half-year accounts released publicly, the Board has received assurance from the Group
Managing Director and the Group Finance Manager that, in their opinion:
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the financial records of the Group have been properly maintained;
the financial statements and notes required by accounting standards for external reporting:
• give a true and fair view of the financial position and performance of the
•
•
Company and the consolidated Group; and
comply with the accounting standards and applicable ASIC Class orders; and
the above representations are based on a sound system of risk management and
internal control and that the system is operating effectively in all material respects
in relation to financial reporting risks.
Principle 8 – Remunerate fairly and responsibly
Remuneration Policies
The Remuneration Committee reviews and makes recommendations to the Board on remuneration packages
and policies applicable to the Group Managing Director, senior executives and directors themselves. This role
also includes responsibility for share option schemes, incentive performance packages, superannuation
entitlements, any remuneration by gender, retirement and termination entitlements, fringe benefit policies and
professional indemnity and liability insurance policies. Remuneration levels are competitively set to attract the
most qualified and experienced directors and senior executives.
The directors and senior executives are all on fixed remuneration. The Company has a performance incentive
scheme structured around profitability and increase in the value of the Company’s shares. Non-Executive
Directors are not eligible for this scheme.
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Remuneration Committee
The names of the members of the Remuneration Committee and their attendance at meetings of the
Committee are detailed in the directors’ report.
There are no schemes for retirement benefits other than statutory superannuation for non-executive directors.
A copy of
(www.academies.edu.au).
the Company’s Remuneration Committee Charter
is on
the Company’s website
This Corporate Governance Statement and information about the Company’s corporate governance practices
and policies (including ‘Charters’ referred to in this statement) is available on the Company’s web site at
www.academies.edu.au.
The Company is initiating a review of all its, and its subsidiary companies’, corporate governance procedures,
especially in light of its recent acquisitions, to streamline procedures and ensure consistency.
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103rd ANNUAL REPORT OF THE DIRECTORS
Your directors present this report on Academies Australasia Group Limited (“the Company”) and its
controlled entities for the financial year ended 30 June 2011.
DIRECTORS
The names of directors in office at any time during or since the end of the year are:
Neville Thomas Cleary
Christopher Elmore Campbell
Chiang Meng Heng
Dr John Lewis Schlederer
Philip Carroll
Gabriela Del Carmen Rodriguez Naranjo (Alternate to Neville Thomas Cleary)
Bridget Mary Carroll (Alternate to Philip Carroll)
Neville Thomas Cleary, Christopher Elmore Campbell , Chiang Meng Heng and John Lewis Schlederer have
been in office since the start of the financial year to the date of this report.
COMPANY SECRETARY
Mrs Stephanie Noble held the position of company secretary of Academies Australasia Group Limited at the
end of the financial year. She was appointed company secretary on 27 November 2006. Mrs. Noble is a CPA
Australia and a Fellow of the Association of Chartered Certified Accountants and holds an Honours Degree in
Accounting.
PRINCIPAL ACTIVITIES
The principal activity of the consolidated group during the course of the financial year was the provision of
training and education services. It also manufactures, imports and sells fasteners. No change in those principal
activities occurred during the year.
CONSOLIDATED RESULT
The consolidated profit of the consolidated group for the financial year after providing for income tax and
eliminating non-controlling entity interests amounted to $2,325,918 (2010:$1,609,407).
REVIEW OF OPERATIONS
A review of the operations of the consolidated group during the financial year and the results of those
operations are as follows:
Education
The contribution from the education business (before tax) increased by 74.0% to $3,938,809 (2010:
$2,263,775) during the financial year, while revenue increased by 64.6% to $17,761,084.
Fasteners
The contribution from the fasteners business (before tax) decreased by 20.1% to $931,007 (2010: $1,165,558)
during the financial year, while revenue increased by 0.9% to $7,399,459.
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Keith Franklin Kennett, K. F. Kennett Nominees Pty Ltd and Myong Ho Pak
Proceedings have been determined by the Court of Appeal. The Company was successful in defending the
claims and is now taking steps to recover costs.
Dividends Paid or Proposed
An unfranked dividend of two cents per share ($826,811) was paid on 15 October 2010. An interim fully
franked dividend of two cents per share ($826,811) was paid on 3 March 2011.
The directors have announced the payment of a fully franked final dividend of 2 cents per share ($944,188), to
be paid on 30 September 2011.
FINANCIAL POSITION
The net assets of the consolidated group have increased by $4,125,275 since 30 June 2010.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Other than the acquisition of 75% interest in AMI Education Pty Limited and 51% interest in Benchmark
Resources Pty Limited, there were no significant changes in the state of affairs of the consolidated group
during the reporting period. Details of these acquisitions are shown in Note 14.
EVENTS AFTER THE REPORTING PERIOD
There are no matters or circumstances that have arisen since the end of the financial year which significantly
affected or may significantly affect the operations of the consolidated group, the results of those operations, or
the state of affairs of the consolidated group in subsequent financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
Reference is made in the Chairman’s Report (Page 1) and the Group Managing Director’s Review (Page 2) to
the consolidated group’s future direction. No detailed information in respect of the consolidated group’s
corporate strategies has been included, as directors believe that the disclosure of such information is likely to
result in unreasonable prejudice to the consolidated group.
ENVIRONMENTAL ISSUES
The consolidated group operations are not subject to any significant environmental legislation.
INFORMATION ON DIRECTORS
Neville Thomas Cleary
Qualifications/Experience
Interest in Shares
Special Responsibilities
Directorships held in other listed entities
- Chairman (Independent & Non-Executive), since 2001.
- Retired as General Manager and Head of Lending,
Commonwealth Bank of Australia in 1992 after 43 years
service.
- Following retirement from the bank, has held non-Executive
Directorships in public listed Companies, Minproc Engineers
Limited, Finemore Holdings Limited and Ipoh Limited.
- Also non-Executive Directorships in four non listed companies
(non related).
- 160,000 shares (0.34%)
- Chairman of the Remuneration Committee. Chairman of the
Audit and Risk Committee until 20 August 2010.
- None.
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Christopher Elmore Campbell
Qualifications/Experience
Interest in Shares
Special Responsibilities
- Group Managing Director, since 1996.
- B.Soc.Sci. (Hons). FFin, FAICD, FCIS. Previous positions
include senior appointments with the Monetary Authority of
Singapore and an international bank in Australia.
- 7,149,007 shares (15.14%)
- Group Managing Director and Chief Executive Officer.
Member of the Remuneration Committee. Member of the Audit
and Risk Committee until 20 August 2010. Director of each of
the subsidiary companies in the Academies Australasia Group.
Chairman of Academies Australasia Pty Limited, AMI
Education Pty Limited and Premier Fasteners Pty Limited
Directorships held in other listed entities
- None.
Chiang Meng Heng
Qualifications/Experience
Interest in Shares
Special Responsibilities
Directorships held in other listed entities
- Director (Non-Executive), since 2000.
- BBA (Hons). Previous positions include President, Asia
Commercial Bank Ltd, Adviser & Department Head, Monetary
Authority of Singapore, Managing Director, First Capital
Corporation Ltd, Executive Director, Far East Organization and
Group Managing Director, Lim Kah Ngam Ltd.
- 24,941,886 shares (52.83%)
- Member of the Audit and Risk, and Remuneration Committees.
Chairman (Non-executive) and Director of ACA Investment
Holdings Pte. Limited and Academies Australasia College Pte.
Limited.
- Orchard Parade Holdings Limited, Macquarie International
Infrastructure Fund Limited, and Keppel Land Limited (all
listed on the Singapore Stock Exchange).
Dr John Lewis Schlederer
Qualifications/Experience
Interest in Shares
Special Responsibilities
Directorships held in other listed entities
- Director (Independent & Non-Executive), since 2010.
- B.Sc (Hons). PhD. Grad. Diploma. More than 20 years teaching
experience, at University of New South Wales and TAFE NSW
(Technical and Further Education, New South Wales) and many
years in business.
- 758,422 (1.61%)
- Member of the Remuneration, and Audit and Risk Committees.
Chairman of the Audit and Risk Committee from 21 August
2010.
- None
Philip Carroll
Qualifications/Experience
Interest in Shares
Special Responsibilities
Directorships held in other listed entities
- Director (Executive), since 10 June 2011.
- M Comm. Previous positions include College Coordinator –
Labour Market Programmes, Western Sydney Institute of
TAFE.
- 4,248,848 (9%)
- Managing Director of Benchmark Resources Pty Limited T/A
Benchmark College.
- None.
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Gabriela Del Carmen Rodriguez
Naranjo
Qualifications/Experience
Interest in Shares
Special Responsibilities
- Alternate Director to Neville Cleary, since 10 May 2011.
- B. Comp.Sci, B.Sci. Sys. Eng. MAICD. More than 10 years
experience in various aspects of international education in
Australia and overseas.
- None
- Executive Director, General Manager and Chief Operations
Officer of Academies Australasia Pty Limited and Director of
each of its subsidiaries (excluding ACA Investment Holdings
Pte. Limited) and Skilled Placements Pty Limited.
Directorships held in other listed entities
- None.
Bridget Mary Carroll
Qualifications/Experience
Interest in Shares
Special Responsibilities
- Alternate Director to Philip Carroll, since 10 June 2011.
- B Teach. Previous positions include teaching posts within the
Department of Education and Catholic Educational Office, and
teaching and coordination roles within Western Sydney Institute
of TAFE and South Western Sydney Institute of TAFE.
- 4,248,848 (9%)
- Executive Director/ Director of Education, Benchmark
Resources Pty Limited T/A Benchmark College.
Directorships held in other listed entities
- None.
REMUNERATION REPORT
Remuneration Policies
The Remuneration Committee reviews and makes recommendations to the Board on remuneration packages
and policies applicable to the Group Managing Director, senior executives and directors themselves. This
role also includes responsibility for share option schemes, incentive performance packages, superannuation
entitlements, retirement and termination entitlements, fringe benefit policies and professional indemnity and
liability insurance policies. Remuneration levels are competitively set to attract the most qualified and
experienced directors and senior executives. During the year, the members of the Remuneration Committee
were Neville Thomas Cleary, Chiang Meng Heng, John Lewis Schlederer and Christopher Elmore Campbell.
The remuneration policy of the Company in respect of directors and senior executives is to ensure certainty
of exposure of the Company to employees by agreeing a fixed salary for each director and senior executive.
All executives receive a base salary, which is based on factors such as length of service and experience and
superannuation (as required by law). Executives may sacrifice part of their salary to increase payments
towards superannuation.
There are no options over unissued capital. The Company does not have an employee share option plan.
The Company has a performance incentive scheme structured around movements in the value of the
Company’s shares. This scheme has a three year life from the date of inception for each employee. The
financial statements of the group accrue the anticipated costs of the scheme to date of reporting.
All remuneration paid to directors and executives is valued at the cost to the company and expensed.
The maximum aggregate amount of fees that can be paid to non-executive directors is subject to approval by
shareholders at the Annual General Meeting. The amount approved at the 2009 Annual General Meeting is
$250,000 per annum. Fees for non-executive directors are not linked to the performance of the consolidated
group.
Directors and Key Management Remuneration
a. Directors and Key Management
The names of each person holding the position of director of Academies Australasia Group Limited at any
time during the financial year were:
Neville Thomas Cleary (Chairman – Independent & Non-Executive).
Christopher Elmore Campbell (Group Managing Director – Executive).
Chiang Meng Heng (Director – Non-Executive).
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Dr John Lewis Schlederer (Director – Independent & Non-Executive).
Philip Carroll (Director - Executive).
Gabriela Del Carmen Rodriguez Naranjo (Alternate Director to Neville Thomas Cleary).
Bridget Mary Carroll (Alternate Director to Philip Carroll).
The names of each person holding the position of specified executive, other than executives listed above, at
any time during the financial year were :
Ivan James Mikkelsen (Director and General Manager – Premier Fasteners Pty Limited).
Stephanie Ann Noble (Group Finance Manager and Company Secretary Academies Australasia Group
Limited).
Kim Soon Ng (Executive Director, External Relations – Academies Australasia College Pte. Limited, until
30 June 2011).
May Chiak Elaine Ng (Executive Director, Operations – Academies Australasia College Pte. Limited).
Dr Lemmy Kay Chee Teo (Executive Director, Principal – Academies Australasia College Pte. Limited,
from 15 June 2011).
Mark Kwong To Lo ( Executive Director – AMI Education Pty Limited).
Daniel Hing Yuen Wong ( Executive Director – AMI Education Pty Limited, until 30 April 2011, then Non-
Executive Director).
John Geoffrey Thearle Adnams (Non-Executive Director – AMI Education Pty Limited, from 24 February
2011).
b. Directors and Key Management Remuneration
The remuneration for each director and each of the three specified executives of the consolidated entity
receiving the highest remuneration during the year was as follows:
2011 Directors and Key Management
Short-term Employee Benefits
Bonuses
Cash, salary
and
commissions
Non-
monetary
benefits
Post-
employment
Benefits
Superannuation
Total
$
$
$
Neville Thomas Cleary
Chiang Meng Heng
John Lewis Schlederer
Christopher Elmore Campbell
Stephanie Ann Noble
Gabriela Del Carmen Rodriguez Naranjo
Ivan James Mikkelsen
Kim Soon Ng (to 30 June 2011)
May Chiak Elaine Ng
Dr Lemmy Kay Chee Teo (from 15 June 2011)
Mark Kwong To Lo (from 25 February 2011)
Daniel Hin Yuen Wong (from 25 February 2011)
John Adnams (from 25 February 2011)
Philip Carroll (from 10 June 2011)
Bridget Carroll (from 10 June 2011)
$
54,500
30,000
-
234,999
106,666
110,274
149,999
93,976
65,783
3,666
6,923
14,169
9,424
19,273
19,251
-
-
-
97,143
14,571
24,286
-
-
-
-
-
-
-
-
-
-
2,700
40,225
$
54,500
32,700
40,225
64,999
397,141
8,700
129,937
9,025
143,585
-
-
-
-
-
-
21,383
50,000
221,382
-
-
-
-
-
-
-
-
2,358
6,367
545
8,169
1,067
-
2,083
2,083
96,334
72,150
4,211
15,092
15,236
9,424
21,356
21,334
918,903
136,000
21,383
198,321 1,274,607
- 14 -
2010 Directors and Key Management
Short-term Employee Benefits
Bonuses
Cash, salary
and
commissions
Non-
monetary
benefits
Post-
employment
Benefits
Superannuation
Total
$
$
$
Neville Thomas Cleary
Chiang Meng Heng
John Lewis Schlederer (from 21 August 2010)
$
50,000
20,000
12,270
-
-
-
Christopher Elmore Campbell
234,996
60,000
Stephanie Ann Noble
Gabriela Del Carmen Rodriguez Naranjo
Ivan James Mikkelsen
Kim Soon Ng (from 1 October 2010)
May Chiak Elaine Ng (from 1 October 2010)
89,998
89,998
166,728
72,370
50,660
9,000
15,000
-
-
-
$
50,000
21,800
18,824
-
1,800
6,554
65,000
359,996
8,100
107,098
8,100
113,098
-
-
-
-
-
-
21,384
50,000
238,112
-
-
1,628
4,726
73,998
55,386
787,020
84,000
21,384
145,908 1,038,312
None of the remuneration paid to any key management persons is tied to any specific performance condition.
c. Options issued as part of remuneration for the year ended 30 June 2011
No options were granted as part of remuneration.
d. Employment contracts of executives
The employment conditions of all executives are formalised in written contracts of employment. Generally, the
employment contracts stipulate a one-month resignation period. Termination payments are generally not
payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the company
can terminate employment at any time.
The three-year employment contract with Christopher Elmore Campbell expires on 31 December 2011.
Except in certain exceptional circumstances, Mr. Ivan James Mikkelsen’s contract may be terminated by either
Mr. Mikkelsen or Premier Fasteners Pty Limited giving to the other six months’ notice.
Mark Kwong To Lo is on a 2 year employment contract with AMI Education Pty Limited which expires on 24
February 2013.
MEETINGS OF DIRECTORS
The number of directors’ meetings (including meetings of committees of directors) and the number of
meetings attended by the directors of the Company during the financial year are:
Director
Neville Thomas Cleary
Christopher Elmore Campbell
Chiang Meng Heng
Dr John Lewis Schlederer
Directors’
Meetings
A
7
7
7
7
B
7*
7
7
7
Audit and Risk
Committee
B
A
2
2
2
2
2
2
2
2
Remuneration
Committee
B
A
1
1
1
1
1
1
1
1
- 15 -
A - Number of meetings held during the time the director held office during the period
B - Number of meetings attended
*Ms Gabriela Del Carmen Rodriguez Naranjo attended one meeting at which Mr Cleary was absent, as his
Alternate Director.
INDEMNIFICATION AND INSURANCE OF OFFICERS
The Company’s Articles of Association provides an indemnity to officers of the Company. The Company is
required to pay all costs, losses and expenses that an officer may incur by reason of any contract entered into
or act or thing done by them in the discharge of their duties except where they act dishonestly.
The Company has also paid an insurance premium in respect of a directors and officer’s liability insurance
policy covering the directors and officer’s liabilities as officers of the Company. It has also taken out “key
man” insurance policies, the premium and nature of the liabilities covered by the policies are not to be
disclosed, under the terms of the policies.
OPTIONS
No options have been issued on the Company’s shares.
PROCEEDINGS ON BEHALF OF THE COMPANY
Apart from the action by Keith Franklin Kennett, K.F. Kennett Nominees Pty Ltd and Myong Ho Pak referred
to earlier, the Company was not a party to any proceedings in a Court of Law during the year.
NON-AUDIT SERVICES
The Board of Directors, in accordance with advice from the Audit and Risk Committee, is satisfied that the
provision of non-audit services during the year is compatible with the general standard of independence of
auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below
did not compromise the external auditor’s independence for the following reasons:
• All non-audit services are reviewed and approved by the Audit and Risk Committee.
• The nature of services provided does not compromise the general principles relating to audit
independence.
The following fees were paid or payable for non-audit services to the external auditors during the year ended
30 June 2011:
• Taxation services
• Other services
$12,600
$67,557
- 16 -
AUDITOR’S INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration for the year ended 30 June 2011 has been received and can be found
on page 18.
Signed in accordance with a resolution of the Board of Directors.
Neville Cleary
Director
13 September 2011
Christopher Campbell
Director
- 17 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2011
CONSOLIDATED GROUP
Note
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
Revenue from continuing operations
2
25,198,078
18,155,620
3,703,373
3,730,732
Depreciation and amortisation expense
(494,981)
(310,160)
(117,919)
(129,983)
Cost of sales
Cost of services
Employee benefits expense
Finance costs
Insurance
Lease rental expense – operating leases
Legal expenses
Non-executive directors fees
Payroll tax
Other expenses
3
3
(3,841,869)
(6,848,172)
(5,214,776)
(96,121)
(262,373)
(2,363,283)
(166,739)
(127,425)
(199,867)
(2,245,967)
(3,753,018)
(4,640,415)
(3,628,400)
(56,171)
(188,568)
(1,660,053)
(143,939)
(90,623)
(150,367)
(1,320,083)
-
-
(975,382)
(55,654)
(55,330)
-
(61,002)
(127,425)
(31,374)
(145,220)
-
-
(639,587)
(48,459)
(50,913)
-
(117,052)
(90,623)
(32,112)
(139,067)
Profit before income tax
3,336,505
2,213,823
2,134,067
2,482,936
Income tax expense
Profit for the year
4
(1,080,531)
(715,967)
(937,839)
(715,967)
2,255,974
1,497,856
1,196,228
1,766,969
Other comprehensive income:
Net gain on revaluation of assets
Exchange differences on translating foreign
controlled entities
Income tax on other comprehensive income
Other comprehensive income for the year,
net of tax
(8,796)
(13,953)
627,358
5,953
2,639
(188,262)
(20,110)
445,049
-
-
-
-
-
-
-
-
Total comprehensive income for the year
2,235,864
1,942,905
1,196,228
1,766,969
Loss attributable to non-controlling interest
69,944
111,551
-
-
Profit attributable to owners of the parent entity
2,325,918
1,609,407
1,196,228
1,766,969
Total comprehensive income attributable to
Owners of the parent entity
Non-controlling interest
2,255,974
1,497,856
1,196,228
1,766,969
2,305,808
2,054,456
1,196,228
1,766,969
(69,944)
(111,551)
-
-
Basic earnings per share (cents per share)
Dividends per share (cents)
7
8
5.4
4.0
3.6
3.0
The accompanying notes form part of these financial statements.
- 19 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
STATEMENT OF FINANCIAL POSITION
As at 30 June 2011
CONSOLIDATED GROUP
Note
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total Current Assets
Non-Current Assets
Investments
Plant and equipment
Deferred tax assets
Intangible assets
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Current tax liabilities
Borrowings
Provisions
Total Current Liabilities
Non-Current Liabilities
Borrowings
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Accumulated Losses
Asset Revaluation Reserve
Foreign Currency Translation Reserve
Non-Controlling Interest
9
10
11
12
13
15
16
17
18
4
19
20
19
20
21
3,572,936
2,223,272
3,094,041
783,917
9,674,166
2,410,166
2,432,339
3,018,239
378,096
8,238,840
995,748
7,048,327
-
24,287
8,068,362
1,094,296
3,743,465
-
36,418
4,874,179
154,951
3,501,536
544,866
9,396,459
13,597,812
-
2,160,695
55,380
3,287,285
5,503,360
4,345,004
627,096
436,777
-
5,408,877
4,345,004
745,015
55,380
-
5,145,399
23,271,978
13,742,200
13,477,239
10,019,578
3,385,706
1,325,051
724,638
1,408,760
6,844,155
2,858,515
411,404
188,493
747,145
4,205,557
162,935
900,415
-
878,535
1,941,885
120,602
411,404
-
648,537
1,180,543
2,727,502
283,035
3,010,537
7,439
237,193
244,632
-
66,000
66,000
-
85,073
85,073
9,854,692
4,450,189
2,007,885
1,265,616
13,417,286
9,292,011
11,469,354
8,753,962
17,737,622
(5,027,860)
432,939
(8,000)
282,585
14,564,836
(5,700,156)
439,096
5,953
(17,718)
17,737,622
(6,268,268)
-
-
-
14,564,836
(5,810,874)
-
-
-
Total Equity
13,417,286
9,292,011
11,469,354
8,753,962
The accompanying notes form part of these financial statements.
- 20 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
STATEMENT OF CHANGES IN EQUITY
As at 30 June 2011
Ordinary
Shares
$
Retained
Profits
$
Non -
Controlling
Interest
Reserves
$
$
Total
$
14,219,836
(6,084,346)
345,000
-
-
-
-
-
-
1,609,407
-
-
-
(1,225,217)
-
-
-
-
-
8,135,490
345,000
(111,551)
1,497,856
439,096
-
439,096
5,953
-
-
1,162
92,671
7,115
92,671
-
(1,225,217)
14,564,836
(5,700,156)
445,049
(17,718)
9,292,011
14,564,836
(5,700,156)
445,049
(17,718)
9,292,011
3,172,786
-
-
-
-
-
-
2,325,918
-
-
-
3,172,786
(69,944)
2,255,974
-
-
-
(1,653,622)
(6,157)
-
(6,157)
(13,953)
(2,541)
(16,494)
-
-
372,788
372,788
-
(1,653,622)
17,737,622
(5,027,860)
424,939
282,585 13,417,286
Consolidated Group
Balance at 1.7.2009
Share capital Issue
Profit for the period
Asset Revaluation Reserve
Exchange differences on translating
foreign operations
Acquisition of subsidiary
Dividend paid
Balance at 30.6.2010
Balance at 1.7.2010
Share capital Issue
Profit for the period
Asset Revaluation Reserve
Exchange differences on translating
foreign operations
Acquisition of subsidiary
Dividend paid
Balance at 30.6.2011
Parent Entity
Balance at 1.7.2009
Share capital Issue
Profit for the period
Dividend paid
14,219,836
(6,352,626)
345,000
-
-
-
1,766,969
(1,225,217)
Balance at 30.6.2010
14,564,836
(5,810,874)
Balance at 1.7.2010
Share capital Issue
Profit for the period
Dividend paid
Balance at 30.6.2011
14,564,836
(5,810,874)
3,172,786
-
-
-
1,196,228
(1,653,622)
17,737,622
(6,268,268)
The accompanying notes form part of these financial statements.
- 21 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,867,210
345,000
1,766,969
(1,225,217)
8,753,962
8,753,962
3,172,786
1,196,228
(1,653,622)
- 11,469,354
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
CASH FLOW STATEMENT
For the year ended 30 June 2011
CONSOLIDATED GROUP
Note
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Income taxes paid
Net cash provided by (used in) operating
activities
Cash Flows from Investing Activities
Proceeds from sale of plant & equipment
Purchase of plant & equipment
Net cash on acquisition of subsidiaries
Investment in subsidiary
Investment in other financial assets
Net cash provided by (used in) investing
activities
Cash Flows from Financing Activities
Dividends paid
Proceeds from borrowings
Repayment of borrowings
Net cash provided by (used in) financing
activities
27,105,071
(23,078,493)
98,922
(96,121)
(827,586)
18,654,820
(16,758,341)
47,137
(46,909)
(53,590)
3,513,652
(1,130,344)
37,535
(55,654)
(827,586)
3,039,368
(1,202,017)
32,256
(48,459)
(53,590)
25a
3,201,793
1,843,117
1,537,603
1,767,558
1,817
(289,176)
(2,620,361)
(100,199)
(154,951)
2,790
(203,788)
435,013
(314,440)
-
(3,162,870)
(80,425)
-
-
-
-
-
-
-
-
-
-
-
-
(1,653,622)
2,856,000
(78,531)
(1,225,217)
-
(39,598)
(1,653,622)
17,471
-
(1,225,217)
(621,514)
-
1,123,847
(1,264,815)
(1,636,151)
(1,846,731)
Net increase/ (decrease) in cash held
Cash at the beginning of the financial year
1,162,770
2,410,166
497,877
1,912,289
(98,548)
1,094,296
(79,173)
1,173,469
Cash at the end of the financial year
9
3,572,936
2,410,166
995,748
1,094,296
The accompanying notes form part of these financial statements.
- 22 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
These financial statements were authorised for issue on 13 September 2011 by the directors of the Company.
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The financial report is a general purpose financial report that has been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements
of the Australian Accounting Standards Board and the Corporations Act 2001
.
The financial report includes the consolidated financial statements of Academies Australasia Group Limited
and controlled entities, and Academies Australasia Group Limited as an individual parent entity. Academies
Australasia Group Limited is a listed public company, incorporated and domiciled in Australia.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions.
Compliance with Australian Accounting Standards ensures that the financial statements and notes also
comply with International Financial Reporting Standards. Material accounting policies adopted in the
preparation of this financial report are presented below and have been consistently applied unless otherwise
stated.
Basis of Preparation
The accounting policies set out below have been consistently applied to all years presented.
The financial report has been prepared on an accruals basis and is based on historical costs modified by the
revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value
basis of accounting has been applied.
Accounting Policies
a.
b.
Principles of Consolidation
A controlled entity is any entity Academies Australasia Group Limited has the power to control the
financial and operating policies of so as to obtain benefits from its activities.
A list of controlled entities is contained in Note 14 to the financial statements. All controlled entities
have a June financial year-end.
All inter-company balances and transactions between entities in the consolidated group, including any
unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries
have been changed where necessary to ensure consistencies with those policies applied by the parent
entity.
Where controlled entities have entered or left the consolidated group during the year, their operating
results have been included/excluded from the date control was obtained or until the date control
ceased.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisiton method, unless it is a combination
involving entities or businesses under common control. The business combination will be accounted
for from the date that control is attained, whereby the fair value of the identifiable assets acquired and
liabilities (including contingent liabilities) assumed is recognised (subject to certain limited
exemptions).
- 23 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
b.
Business Combinations (continued)
When measuring the consideration transferred in the business combination, any asset or liability
resulting from a contingent consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not remeasured and its subsequent
settlement is accounted for within equity. Contingent consideration classified as an asset or liability is
remeasured each reporting period to fair value, recognising any change to fair value in profit or loss,
unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the statement of
comprehensive income.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain
purchase.
c)
Goodwill
Goodwill is carried at cost less accumulated impairment losses. Goodwill is calculated as the excess of
the sum of:
the consideration transferred;
any non-controlling interest; and
the acquisition date fair value of any previously held equity interest;
(i)
(ii)
(iii)
over the acquisition date fair value of net identifiable assets acquired.
The acquisition date fair value of the consideration transferred for a business combination plus the
acquisition date fair value of any previously held equity interest shall form the cost of the investment
in the separate financial statements.
Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of
comprehensive income. Where changes in the value of such equity holdings had previously been
recognised in other comprehensive income, such amounts are recycled to profit or loss.
The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less
than a 100% interest will depend on the method adopted in measuring the non-controlling interest.
The Group can elect in most circumstances to measure the non-controlling interest in the acquiree
either at fair value (full goodwill method) or at the non-controlling interest’s proportionate share of the
subsidiary’s identifiable net asets (proportionate interest method). In such circumstances, the Group
determines which method to adopt for each acquisition and this is stated in the respective notes of
these financial statements disclosing the business combination.
Under the full goodwill method, the fair value of the non-controlling interest is detemined using
valuation techniques which make the maximum use of market information where available. Under this
method, goodwill attributable to the non-controlling interests is recognised in the consolidated
financial statements.
Refer to Note 14 for information on the goodwill policy adopted by the Group for acquisitions.
Goodwill on acquisitions of subsidiaries is included in intangible assets.
Goodwill is tested for impairment annually and is allocated to the Group’s cash-generating units or
groups of cash-generating units, representing the lowest level at which goodwill is monitored not
larger than an operating segment. Gains and losses on the disposal of an entity include the carrying
amount of goodwill related to the entity disposed of.
Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do not
affect the carrying values of goodwill.
- 24 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
d.
Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-
assessable or disallowed items. It is calculated using the tax rates that have been enacted or are
substantially enacted by the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the
financial statements. No deferred income tax will be recognised from the initial recognition of an asset
or liability, excluding a business combination, where there is no effect on accounting or taxable profit
or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled. Deferred tax is credited in the income statement except where it relates to
items that may be credited directly to equity, in which case the deferred tax is adjusted directly against
equity.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that
the consolidated group will derive sufficient future assessable income to enable the benefit to be
realised and comply with the conditions of deductibility imposed by the law.
Academies Australasia Group Limited and its wholly-owned Australian subsidiaries have formed an
income tax consolidated group under the tax consolidation regime. Each entity in the group recognises
its own current and deferred tax liabilities, except for any deferred tax liabilities resulting from unused
tax losses and tax credits, which are immediately assumed by the parent entity. The current tax
liability of each group entity is then subsequently assumed by the parent entity. The group notified the
Australian Tax Office that it had formed an income tax consolidated group to apply from 1 July 2003.
The tax consolidated group has entered a tax sharing agreement whereby each company in the group
contributes to the income tax payable in proportion to their contribution to the net profit before tax of
the tax consolidated group.
Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured
products includes direct materials, direct labour and an appropriate portion of variable and fixed
overheads. Overheads are applied on the basis of normal operating capacity. Costs are assigned on the
basis of weighted average costs.
Where the book value of stock items exceeds the net realisable value, a provision for diminution in
value is raised.
Plant and Equipment
Plant and equipment used in the fasteners business is stated at a revalued amount. All other plant and
equipment is stated at cost. The revaluation took place at 30 June 2010.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of
the expected net cash flows that will be received from the asset’s employment and subsequent disposal.
The expected net cash flows have been discounted to their present values in determining recoverable
amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the group and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred.
e.
f.
- 25 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
g.
Depreciation
The depreciable amount of all fixed assets including capitalised lease assets is depreciated on a
straight-line or a diminishing value basis over their useful lives to the consolidated group commencing
from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter
of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Leasehold improvements
Plant and equipment
Leased plant and equipment
Depreciation Rate
12.5 – 22.5%
5 – 40%
5 – 25%
h.
i.
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance
sheet date.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in the income statement.
Leases
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the
asset, but not the legal ownership, are transferred to entities in the consolidated group, are classified as
finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to
the fair value of the leased property or the present value of the minimum lease payments, including any
guaranteed residual values. Lease payments are allocated between the reduction of the lease liability
and the lease interest expense for the period.
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or
the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the
lessor, are charged as expenses in the periods in which they are incurred.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line
basis over the life of the lease term.
Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the
entity becomes a party to the contractual provisions of the instrument. Trade date accounting is
adopted for financial assets that are delivered within timeframes established by marketplace
convention.
Financial instruments are initially measured at fair value plus transactions costs where the instrument is
not classified as at fair value through profit or loss. Transaction costs related to instruments classified
as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments
are classified and measured as set out below.
- 26 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Derecognition
Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the
asset is transferred to another party whereby the entity no longer has any significant continuing
involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised
where the related obligations are either discharged, cancelled or expire. The difference between the
carrying value of the financial liability extinguished or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in
profit or loss.
Financial assets at fair value through profit or loss
Classification and Subsequent Measurement
i.
Financial assets are classified at fair value through profit or loss when they are held for trading for the
purpose of short term profit taking, where they are derivatives not held for hedging purposes, or
designated as such to avoid an accounting mismatch or to enable performance evaluation where a
group of financial assets is managed by key management personnel on a fair value basis in accordance
with a documented risk management or investment strategy. Realised and unrealised gains and losses
arising from changes in fair value are included in profit or loss in the period in which they arise.
ii.
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market and are subsequently measured at amortised cost using the effective
interest rate method.
iii. Financial Liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost using the effective interest rate method.
Loans and receivables
Derivative instruments
The group has no derivative instruments at reporting date.
Fair value
The only financial asset or liability carried at fair value is cash and cash equivalents.
Financial Guarantees
Where material, financial guarantees are issued, which require the issuer to make specified payments
to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due,
are recognised as a financial liability at fair value on initial recognition. The guarantee is subsequently
measured at the higher of the best estimate of the obligation and the amount initially recognised less,
when appropriate, cumulative amortisation in accordance with AASB 118: Revenue. Where the entity
gives guarantees in exchange for a fee, revenue is recognised under AASB 118.
The fair value of financial guarantee contracts has been assessed using a probability weighted
discounted cash flow approach. The probability has been based on:
—
—
—
the likelihood of the guaranteed party defaulting in a year period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed party
defaulting; and
the maximum loss exposed if the guaranteed party were to default.
- 27 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j.
k.
Impairment of Assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication
exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell
and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value
over its recoverable amount is expensed to the income statement.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates
the recoverable amount of the cash-generating unit to which the asset belongs.
Collectibility of trade debtors is reviewed on an ongoing basis. Debts are written off when they are
known to be uncollectible. A provision for doubtful debts is raised where some doubt as to collection
exists and is the difference between the total amount owing and the amount expected to be recovered.
Foreign Currency Transactions and Balances
Foreign currency transactions are translated into Australian currency (the functional currency) using
the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are
translated at the year-end exchange rate. Non-monetary items measured at historical cost continue to
be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair
value are reported at the exchange rate at the date when fair values were determined.
Group Companies
The financial results and position of foreign operations whose functional currency is different from the
Group’s presentation currency are translated as follows:
-
-
-
assets and liabilities are translated at year-end exchange rates prevailing at the end of the
financial year;
income and expenses are translated at average rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations are transferred directly to the Group’s
foreign currency translation reserve in the statement of financial position. These differences are
recognised in the statement of comprehensive income.
l.
Employee Benefits
Provision is made for the company’s liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits that are expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled, plus related on-costs.
Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits.
m.
Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past
events, for which it is probable that an outflow of economic benefits will result and that outflow can be
reliably measured.
- 28 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
n.
o.
p.
q.
r.
s.
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of one month or less, and bank overdrafts. Bank
overdrafts are shown within short-term borrowings in current liabilities on the balance sheet.
Revenue
Revenue from the sale of goods is recognised upon the delivery of goods to customers.
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable
to the financial assets.
Dividend revenue is recognised when the right to receive a dividend has been established.
Revenue recognition relating to the provision of services is determined with reference to the stage of
completion of the transaction at the end of the reporting period, where the outcome of the contract can
be estimated reliably. Stage of completion is determined with reference to the services preformed to
date as a percentage of total anticipated services to be performed.
All revenue is stated net of the amount of goods and services tax (GST).
Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that
necessarily take a substantial period of time to prepare for their intended use or sale, are added to the
cost of those assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in income in the period in which they are incurred.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the balance sheet are shown inclusive of GST.
Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.
Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to
changes in presentation for the current financial year. During the current financial year, an adjustment
of $160,000 was made to opening retained profits in respect of a prior period adjustment.
Critical Accounting Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial report based on
historical knowledge and best available current information. Estimates assume a reasonable
expectation of future events and are based on current trends and economic data, obtained both
externally and within the group. These changed estimates and judgements are considered significant
items of revenue and expenses relevant in explaining the financial performance.
Key Estimates – Impairment
The group assesses impairment at each reporting date by evaluating conditions specific to the group
that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of
the asset is determined. Value-in-use calculations performed in assessing recoverable amounts
incorporate a number of key estimates. Further details on the key estimates used in impairment can be
found in Note 17. No impairment has been recognised in respect of goodwill for the year ended 30
June 2011.
- 29 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
CONSOLIDATED GROUP
Note
2011
$
2010
$
PARENT ENTITY
2010
2011
$ $
2. REVENUE
Operating activities
- Sale of goods
- Services revenue
- Interest received
Non-operating activities
- Other
2a
2b
7,397,461
17,024,740
89,015
24,511,216
7,333,683
10,393,868
47,137
17,774,688
-
3,513,652
189,721
3,703,373
-
3,039,338
142,751
3,182,089
686,862
686,862
380,932
380,932
-
-
548,643
548,643
Total Revenue
25,198,078
18,155,620
3,703,373
3,730,732
a. Services revenue from:
- Wholly-owned controlled entities
- Other persons
b. Interest revenue from:
- Wholly-owned controlled entities
- Other persons
3. PROFIT FOR THE YEAR
Expenses
Finance costs
- External
Bad and doubtful debts
- Trade receivables
Rental expense on operating leases
- Minimum lease payments
- Contingent rentals
-
17,024,740
17,024,740
-
10,393,868
10,393,868
3,513,652
-
3,513,652
3,039,338
-
3,039,338
-
89,015
89,015
-
47,137
47,137
152,186
37,535
189,721
110,495
32,256
142,751
96,121
96,121
40,757
40,757
56,171
56,171
27,173
27,173
2,361,941
1,342
2,363,283
1,655,551
4,502
1,660,053
55,654
55,654
48,459
48,459
-
-
-
-
-
-
-
-
-
-
Superannuation expenses
343,294
228,107
118,955
81,724
- 30 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
CONSOLIDATED GROUP
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
4. INCOME TAX EXPENSE
a. The components of tax expense comprise:
Current tax
Deferred Tax
b. The prima facie tax on profit from ordinary
activities before tax is reconciled to income tax as
follows:
Prima facie tax payable on profit from ordinary
activities before tax at 30%
Add/(less):
Tax effect of:
Permanent differences
Assumption of tax balances of controlled entities
Income tax expense attributable to the entity
c. Current tax payable for the year reconciles as
follows:
Opening provision
Add: Current year provision
Add: Tax balance subsidiary acquired
Less: Tax paid
Closing provision
(1,486,051)
405,520
(1,080,531)
(464,994)
(250,973)
(715,967)
(1,316,597)
378,758
(937,839)
(464,994)
(250,973)
(715,967)
1,000,952
712,147
640,220
792,881
(51,625)
131,204
1,080,531
(47,296)
51,116
715,967
(51,625)
349,244
937,839
(47,296)
(29,618)
715,967
411,404
1,486,051
255,182
(827,586)
1,325,051
-
464,994
-
(53,590)
411,404
411,404
1,316,597
-
(827,586)
900,415
-
464,994
-
(53,590)
411,404
5. KEY MANAGEMENT COMPENSATION
a.
Names and positions held of economic and parent entity key management in office at any time during the
financial year are:
Key Management
Christopher Elmore Campbell
Stephanie Ann Noble
Position
Group Managing Director.
Group Finance Manager and Company Secretary Academies
Australasia Group Limited.
Ivan James Mikkelsen
Director and General Manager – Premier Fasteners Pty Limited.
Gabriela Del Carmen Rodriguez Naranjo
Executive Director, General Manager and Chief Operations
Officer of Academies Australasia Pty Limited and Director of
each of its subsidiaries (except ACA Investment Holdings Pte.
Limited) and Skilled Placements Pty Limited.
Kim Soon Ng
Executive Director, External Relations – Academies Australasia
College Pte. Limited (until 30 June 2011).
- 31 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
5. KEY MANAGEMENT COMPENSATION (continued)
May Chiak Elaine Ng
Executive Director, Operations – Academies Australasia College
Pte. Limited.
Dr Lemmy Kay Chee Teo
Executive Director, Principal – Academies Australasia College
Pte. Limited (from 15 June 2011).
Mark Kwong To Lo
Executive Director – AMI Education Pty Limited (from 25
February 2011).
Daniel Hing Yuen Wong
Philip Carroll
Bridget Mary Carroll
Executive Director (until 30 April 2011) and then Non-
Executive Director – AMI Education Pty Limited.
Managing Director – Benchmark Resources Pty Limited.
Executive Director/ Director of Education Benchmark Resources
Pty Limited.
b. Key management remuneration has been included in the Remuneration Report section of the Directors’ Report.
c.
Shareholdings
Number of shares held by key management and parties related to them
Key Management
Balance
1.7.2010
Net Change
Other
(i)
Acquisition of
Subsidiary
(ii)
Acquisition of
Subsidiary
(iii)
Balance
30.6.2011
Christopher Elmore Campbell
7,137,407
11,600
300,000
225,000
Kim Soon Ng
May Chiak Elaine Ng
Mark Kwong To Lo
Daniel Hing Yuen Wong
Philip Carroll
Bridget Mary Carroll
7,149,007
300,000
225,000
334,584
343,872
4,248,848*
4,248,848
4,248,848*
4,248,848
334,584
343,872
(i) Shares purchased on market via the Australian Stock Exchange.
(ii) Shares issued as part consideration for the acquisition of 75% of AMI Education Pty Limited.
(iii) Shares issued as part consideration for the acquisition of 51% of Benchmark Resources Pty Limited. These
are the same 4,248,848 shares held by an entity controlled by Philip Carroll and Bridget Mary Carroll.
Note: John Geoffrey Thearle Adnams, (Non-Executive Director, AMI Education Pty Limited) holds 130,000
shares in Academies Australasia Group Limited, acquired prior to 1 July 2010.
- 32 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
6. AUDITOR’S REMUNERATION
Remuneration of the auditor of the parent entity for:
- Auditing and reviewing the financial report
- Taxation services
- Other services
Remuneration of other auditors of subsidiaries for:
- Auditing and reviewing the financial report
- Taxation services
- Other services
7. EARNINGS PER SHARE
CONSOLIDATED GROUP
PARENT ENTITY
2011
$
2010
$
2011
$
2010
$
101,000
12,600
67,557
181,157
13,789
-
1,750
15,539
87,025
12,600
16,156
115,781
33,000
4,200
2,557
39,757
29,025
4,200
4,156
37,381
-
-
-
-
-
-
-
-
-
-
-
-
Basic and diluted earnings per share (cents per share)
5.4
3.6
Weighted average number of ordinary shares used in
calculation of basic earnings per share
42,044,551
41,151,521
a) There are no instruments on issue which have the potential to cause a dilution of earnings per share.
b)
In estimating the fully dilutive earnings per share the potential ordinary shares from the bonus scheme were
calculated but found to be non dilutive. As at 30 June 2011 the potential number of ordinary shares which could be
issued under the scheme was 3,895,000. The company has an option to either pay staff bonuses in cash or to issue
shares to satisfy the liability.
8. DIVIDENDS
Distributions recognised
Interim franked ordinary dividend of 2.0 cents per share
(2010:1.0 cent unfranked)
2010 final unfranked ordinary dividend of 2.0 cents per
share paid in 2011 (2009 2.0 cents paid in 2010 )
a.
Dividends proposed or declared but not
recognised in the financial statements:
Proposed franked ordinary dividend of 2.0 cents
per share (2010:2.0 cents unfranked)
b.
Balance of franking account at year end adjusted
for franking credits arising from:
826,811
413,406
826,811
413,406
826,811
1,653,622
811,811
1,225,217
826,811
1,653,622
811,811
1,225,217
944,188
826,812
944,188
826,812
—
payment of provision for income tax
527,550
54,311
527,550
54,311
- 33 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
CONSOLIDATED GROUP
PARENT ENTITY
2011
$
2010
$
2011
$
2010
$
9. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
3,572,936
2,410,166
995,748
1,094,296
10. TRADE AND OTHER RECEIVABLES
CURRENT
Trade receivables
Other receivables
Amounts receivable from wholly-owned subsidiaries (b)
2,112,416
110,856
-
2,223,272
1,972,275
460,064
-
2,432,339
-
-
7,048,327
7,048,327
-
-
3,743,465
3,743,465
a. The ageing analysis of trade receivables is as follows:
0 -30 days
31- 60 days – not impaired *
61- 90 days – not impaired *
+91 days – not impaired *
838,698
599,173
244,089
430,456
2,112,416
762,411
572,218
219,492
418,154
1,972,275
-
-
-
-
-
-
-
-
-
-
* These are debtors that are past due for which no collateral is held and for which no provision for doubtful debts has
been made as there has not been a significant change in credit quality and the directors believe that the amounts are
still recoverable.
b. The amounts receivable from wholly-owned subsidiaries are unsecured, interest free and have no fixed repayment
date.
c. The consolidated group has an exposure to credit risk in Singapore and Australia given the consolidated group’s
operations in those countries. An amount of $115,601 has been included in Trade and Other Receivables in respect of
the business operations in Singapore. All other receivables of the consolidated group are Australian geographic
exposures.
11. INVENTORIES
CURRENT
At cost
Raw materials and stores
Finished goods
12. OTHER ASSETS
CURRENT
Prepayments and accrued income
Security Deposits
416,964
2,677,077
3,094,041
428,031
2,590,208
3,018,239
-
-
-
-
-
-
761,340
22,577
783,917
376,722
1,374
378,096
23,693
594
24,287
35,824
594
36,418
- 34 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
CONSOLIDATED GROUP
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
13. INVESTMENTS
NON-CURRENT
Shares in Listed Corporations
154,951
Shares in controlled entities
Unlisted
Academies Australasia Pty Limited (at cost)
Principal activity is training and education services
Premier Fasteners Pty Limited (at cost)
Principal activity is manufacture, import and sale of
Fasteners
Skilled Placements Pty Limited (at cost)
(formerly Multimedia Investments Pty Limited)
-
-
-
Investment at cost
154,951
-
-
-
-
-
-
-
1,345,000
1,345,000
3,000,002
3,000,002
2
2
4,345,004
4,345,004
14. CONTROLLED ENTITIES
Parent Entity - Academies Australasia Group Limited
Ultimate Parent Entity - Academies Australasia Group
Limited
Academies Australasia Pty Limited
Premier Fasteners Pty Limited
Skilled Placements Pty Limited (formerly Multimedia
Investments Pty Limited)
Parent Entity - Academies Australasia Pty Limited
Ultimate Parent Entity - Academies Australasia Group
Limited
Academies Australasia (Management) Pty Limited
Academy of English Pty Limited
Academies Australasia Institute Pty Limited (formerly
Academy of Social Sciences Pty Limited)
Australian Institute of Professional Studies Pty Limited
Australian International High School Pty Limited
Australian College of Technology Pty Limited
Australian Trades Institute Pty Limited
Clarendon Business College Pty Limited
Supreme Business College Pty Limited
ACA Investment Holdings Pte. Limited
Country of
Incorporation
Percentage Owned (%)
2011
2010
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
- 35 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
14. CONTROLLED ENTITIES (continued)
Country of
Incorporation
Percentage Owned (%)
2011
2010
Academies Australasia College Pte. Limited
AKG Investment Holdings Pty Limited
AMI Education Pty Limited
AKG2 Investment Holdings Pty Limited
Benchmark Resources Pty Limited
Singapore
Australia
Australia
Australia
Australia
75
100
75
100
51
75
-
-
-
-
Percentage of voting power is in proportion to ownership
Acquisition of Controlled Entities
AMI Education Pty Limited
The Group incorporated AKG Investment Holdings Pty Limited on 28 January 2011 with 100% of the share capital owned
by Academies Australasia Pty Limited.
On 24 February 2011 AKG Investment Holdings Pty Limited acquired 51% of the issued capital of AMI Education Pty
Limited, that purchase was satisfied by the issue of 1,101,600 ordinary shares in Academies Australasia Group Limited and
the payment of $183,600 in cash.
On 28 April 2011, a further 24% of AMI Education Pty Limited was acquired. The purchase of the additional 24% was
satisfied by the issue of 518,400 shares in Academies Australasia Group Limited and the payment of $86,400 in cash.
Purchase consideration:
— Ordinary shares
— Cash
Note
21
24 February 2011
28 April 2011
Fair value
$000
Fair value
$000
550,800
183,600
734,400
285,120
86,400
371,520
Less: Proportionate share of acquired assets and
liabilities:
Cash
Receivables
Inventory
Property, plant and equipment
Payables
Identifiable assets acquired and liabilities assumed
Share of net assets acquired (51%)
Share of net assets acquired (24%)
Share of increase in net assets between acquisition dates
(24%)
638,676
179,362
1,712
1,251,190
(1,709,052)
361,888
381,428
Goodwill
Total Goodwill
(184,563)
(86,853)
(91,543)
549,837
193,124
17
742,961
- 36 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
14. CONTROLLED ENTITIES (continued)
Benchmark Resources Pty Limited
The Group incorporated AKG2 Investment Holdings Pty Limited on 6 May 2011 with 100% of the share capital owned by
Academies Australasia Pty Limited.
On 10 June 2011 AKG2 Investment Holdings Pty Limited acquired 51% of Benchmark Resources Pty Limited, the purchase
was satified by the issue of 4,248,848 ordinary shares in Academies Australasia Group Limited and the payment of
$3,162,692 in cash.
Purchase consideration:
— Ordinary shares
— Cash
Less: Proportionate share of acquired assets and liabilities:
Cash
Receivables
Property, plant and equipment
Payables
Identifiable assets acquired and liabilities assumed
Share of net assets acquired (51%)
Goodwill
Note
21
17
Fair value
$000
173,654
660,173
322,608
(710,910)
445,525
$000
2,336,866
3,162,692
5,499,558
(227,218)
5,272,340
AMI Education Pty Limited
$
Benchmark Resources Pty
Limited
$
The following are included in the statement of
comprehensive income for 30 June 2011:
Costs associated with acquisition
Revenue
Profit/ (Loss) after income tax post acquisition
Had the acquisitions occurred at the beginning of the
financial year, the statement of comprehensive
income would have included:
Revenue
Profit/ (Loss) after income tax
Attributable to
- Owners of the parent entity
- Non-controlling interest
- 37 -
30,156
2,218,833
317,169
5,657,576
(625,450)
(469,088)
(156,362)
71,389
194,191
(45,901)
7,122,063
2,629,786
1,341,191
1,288,595
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
15. PLANT AND EQUIPMENT
Plant and equipment
At cost
At valuation
Accumulated depreciation
Leasehold improvements
At cost
Accumulated amortisation
Leased plant and equipment
Capitalised leased assets
Accumulated depreciation
CONSOLIDATED GROUP
2011
$
2010
$
PARENT ENTITY
2010
$
2011
$
2,873,693
868,782
(1,874,828)
1,867,647
2,421,340
(795,289)
1,626,051
44,182
(36,344)
7,838
966,073
877,578
(576,302)
1,267,349
1,325,929
(448,259)
877,670
44,182
(28,506)
15,676
52,137
-
(52,137)
-
1,157,733
(530,637)
627,096
-
-
-
52,137
-
(52,137)
-
1,157,733
(412,718)
745,015
-
-
-
Total plant & equipment
3,501,536
2,160,695
627,096
745,015
a. Movement in the carrying amounts for each class of plant and equipment between the beginning and the end of the
current financial year.
Plant and
equipment
$
Leasehold
improvements
$
Leased plant
and equipment
$
Total
$
2011
Consolidated Group:
Balance at the beginning of the year
Additions
Disposals
Depreciation expense
Net foreign currency difference arising on
translation of financial statements of foreign
operations
Carrying amount at the end of the year
Parent entity:
Balance at the beginning of the year
Depreciation expense
Carrying amount at the end of the year
2010
Consolidated Group:
Balance at the beginning of the year
Revaluation
Transfers
Additions
Disposals
Depreciation expense
Carrying amount at the end of the year
Parent entity:
Balance at the beginning of the year
Depreciation expense
Carrying amount at the end of the year
1,267,349
895,899
(12,600)
(278,695)
877,670
967,076
-
(208,448)
(4,306)
1,867,647
(10,247)
1,626,051
-
-
-
745,015
(117,919)
627 096
15,676
-
-
(7,838)
-
7,838
-
-
-
407,679
627,358
154,436
233,090
(3,383)
(151,831)
1,267,349
866,967
-
-
140,526
-
(129,823)
877,670
198,618
-
(154,436)
-
-
(28,506)
15,676
12,064
(12,064)
-
862,934
(117,919)
745,015
-
-
-
- 38 -
2,160,695
1,862,975
(12,600)
(494,981)
(14,553)
3,501,536
745,015
(117,919)
627,096
1,473,264
627,358
-
373,616
(3,383)
(310,160)
2,160,695
874,998
(129,983)
745,015
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
16. DEFERRED TAX ASSETS
CONSOLIDATED GROUP
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
Future income tax benefit
544,866
55,380
436,777
55,380
The future income tax benefits is made up of the
following estimated tax benefits:
Temporary differences:
-deferred tax assets
-deferred tax liabilities
Tax losses:
-operating losses
Deferred Tax Assets
Provisions
Unearned Income
Other
Deferred Tax Liabilities
Plant & Equipment
Prepayments and Other
Deferred tax assets not brought to account, the benefits
of which will only be realised if the conditions for
deductibility set out in Note 1b occur:
Tax losses:
-operating losses
-capital losses
741,884
(197,018)
263,629
(208,249)
631,647
(194,870)
263,629
(208,249)
-
544,866
-
55,380
-
436,777
-
55,380
Opening
Balance
$
Charged to
Income
$
Charged to
Equity
$
Closing
Balance
$
156,051
55,009
52,569
263,629
358,315
86,764
33,176
478,255
-
-
-
-
188,262
19,987
208,249
(39,201)
30,609
(8,592)
(2,639)
-
(2,639)
514,366
141,773
85,745
741,884
146,422
50,596
197,018
CONSOLIDATED GROUP
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
-
4,991
4,991
-
4,991
4,991
-
4,991
4,991
-
4,991
4,991
- 39 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
17. INTANGIBLE ASSETS
Goodwill at cost
Accumulated impairment losses
Net carrying value
Other at cost
CONSOLIDATED GROUP
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
9,777,702
(381,913)
9,395,789
3,668,528
(381,913)
3,286,615
670
9,396,459
670
3,287,285
-
-
-
-
-
-
-
-
-
-
Consolidated Group:
Year ended 30 June 2011
Balance at the beginning of the year
Acquisition Academies Australasia College Pte. Limited
Acquisition AMI Education Pty Limited
Acquisition Benchmark Resources Pty Limited
Balance at the end of the year
Goodwill
$
Other
$
Total
$
3,286,615
93,873
742,961
5,272,340
9,395,789
670
-
-
-
670
3,287,285
93,873
742,961
5,272,340
9,396,459
Impairment Disclosures
Goodwill is allocated to cash-generating units, based on the group’s reporting segments.
Fasteners segment
Education segment
Total
2011
$
1,375,382
8,020,407
9,395,789
2010
$
1,375,382
1,911,233
3,286,615
The recoverable amount of each cash-generating unit is determined based on value-in-use calculations. Value-in-use is
calculated based on the present value of cash flow projections over a 5-year period. The cash flows are discounted
using a rate adjusted for the risk inherent in the business of the segment.
Management has based the value-in-use calculations on budgets for each reporting segment. These budgets use
management estimates based on historical growth rates to project revenue. Costs are calculated taking into account
historical gross margins as well as estimated inflation rates. Discount rates are pre-tax.
- 40 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
CONSOLIDATED GROUP
Note
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
18. TRADE AND OTHER PAYABLES
CURRENT
Unsecured Liabilities
Trade payables
Sundry payables and accrued expenses
18a
2,022,095
1,363,611
3,385,706
1,834,363
1,024,152
2,858,515
-
162,935
162,935
-
120,602
120,602
a. Includes $1,583,456 (2010: $902,530) tuition fees
paid in advance by college students.
19. BORROWINGS
CURRENT
Unsecured Liabilities – Non-Interest Bearing
Loans – Directors
27,28
-
-
166,918
166,918
Unsecured Liabilities – Interest Bearing
Loans – Other
Secured Liabilities – Interest Bearing
Bank bills
Lease purchase agreements
28
19a
19a
120,000
120,000
571,200
33,438
604,638
-
-
-
21,575
21,575
TOTAL CURRENT
724,638
188,493
NON-CURRENT
Unsecured Liabilities – Interest Bearing
Loans – Directors
Loans – Other
Secured Liabilities – Interest Bearing
Bank bills
Bank loans
Lease purchase agreements
27,28
28
209,724
43,669
253,393
19a
19a
19a
2,284,800
166,814
22,495
2,474,109
-
-
-
-
-
7,439
7,439
TOTAL NON CURRENT
2,727,502
7,439
a. Total current and non-current secured
liabilities:
Bank bills
Bank loans
Lease purchase agreements
28
28
22,28
2,856,000
166,814
55,933
3,078,747
-
-
29,014
29,014
- 41 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
19. BORROWINGS (continued)
b. The carrying amounts of non-current assets
pledged as security are:
Floating charge over assets
Plant and equipment
CONSOLIDATED GROUP
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
11,990,271
7,838
11,998,109
5,487,684
15,676
5,503,360
5,408,877
-
5,408,877
5,145,399
-
5,145,399
c. The bank bills are secured by a floating charge over the assets of the parent entity and its wholly owned subsidiaries,
while the bank loans are to AMI Education Pty Limited and are secured by a floating charge over that company’s
non-current assets ($1,265,821).
d. The lease purchase borrowings are additionally secured on the leased asset. The leases are due for repayment in
2012.
20. PROVISIONS
Consolidated Group:
Balance at the beginning of the year
Additional provisions
Amounts used
Carrying amount at the end of the year
Parent entity:
Balance at the beginning of the year
Additional provisions
Amounts used
Carrying amount at the end of the year
Total Provisions
Current
Non-current
Employee
entitlements
$
Lease
Incentive
$
Total
$
670,171
1,164,361
(166,904)
1,667,628
314,167
-
(290,000)
24,167
984,338
1,164,361
(456,904)
1,691,795
419,443
508,945
(8,020)
920,368
314,167
-
(290,000)
24,167
733,610
508,945
(298,020)
944,535
CONSOLIDATED GROUP
2011
$
2010
$
PARENT ENTITY
2010
2011
$
$
1,408,760
283,035
1,691,795
747,145
237,193
984,338
878,535
66,000
944,535
648,537
85,073
733,610
a. Provision for Long-term Employee Benefits
A provision has been recognised for employee entitlements relating to long service leave. In calculating the present
value of future cash flows in respect of long service leave, the probability of long service leave being taken is
based on historical data. The measurement and recognition criteria relating to employee benefits, has been included
in Note 1 to this report.
- 42 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
CONSOLIDATED GROUP
PARENT ENTITY
2011
$
2010
$
2011
$
2010
$
21. ISSUED CAPITAL
47,209,410 ordinary shares fully paid
17,737,622
14,564,836 17,737,622 14,564,836
Ordinary share capital
Balance at the beginning of the financial year
14,564,836
14,219,836 14,564,836 14,219,836
750,000 ordinary shares issued on 1 October 2009 on
acquisition of Academies Australasia College Pte.
Limited. The shares are held in escrow for 12 months
to 30 September 2010.
1,101,600 ordinary shares issued on 24 February
2011 on acquisition of 51 % AMI Education Pty
Limited. The shares are held in escrow for 12 months
to 23 February 2012.
518,400 ordinary shares issued on 28 April 2011 on
acquisition of an additional 24% AMI Education Pty
Limited. The shares are held in escrow for 12 months
to 27 April 2012.
4,248,848 ordinary shares issued on 10 June 2011 on
acquisition of 51% Benchmark Resources Pty
Limited. The shares are held in escrow for 12 months
to 9 June 2012.
Balance at the end of the financial year
a. Shares disclosure
-
345,000
-
345,000
550,800
-
550,800
285,120
-
285,120
2,336,866
-
2,336,866
-
-
-
17,737,622
14,564,836 17,737,622 14,564,836
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the
number of shares held.
At a shareholders meeting each ordinary share is entitled to one vote when a poll is called. Otherwise, each
shareholder has one vote on a show of hands.
The number of shares authorised is equal to the number of shares issued. Shares have no par value.
b. Capital Management.
Management controls the capital of the group in order to maintain a good debt to equity ratio, provide the
shareholders with adequate returns and ensure that the group can fund its operations and continue as a going
concern.
The group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting its
capital structure in response to changes in these risks and in the market. These responses include the management
of debt levels, distributions to shareholders and share issues.
There were no changes in the Group’s capital management procedures during the year.
- 43 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
CONSOLIDATED GROUP
Note
2011
2010
$ $
PARENT ENTITY
2011
2010
$ $
22. LEASING COMMITMENTS
Lease purchase commitments
Payable – minimum lease payments
Not later than one year
Later than one year but not later than five years
Minimum lease payments
Less future finance charges
Present value of minimum lease payments
19a
37,128
23,661
60,789
4,856
55,933
23,306
7,593
30,899
1,885
29,014
-
-
-
-
-
At the end of the lease periods the lessor’s charges over the plant and equipment cease, leaving the assets the
unencumbered property of the consolidated group.
Operating Lease commitments
Non-cancellable operating leases contracted for but not capitalised in the financial statements:
Not later than one year
Later than one year but not later than five years
Later than five years
2,992,439
6,881,438
352,013
10,225,890
2,423,381
5,133,347
1,369,881
8,926,609
-
-
-
-
-
-
-
-
-
-
-
-
-
The consolidated group leases property under operating leases expiring from 1 year to 6 years. Lease payments
comprise a base amount plus an incremental rental, based on either movement in the Consumer Price Index or minimum
percentage increase criteria.
23. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
Contingent Liabilities
Guarantees
There is a Corporate Guarantee between the following Group Companies as security for the bank facilities.
Academies Australasia Group Limited
Academies Australasia Management Pty Limited
Clarendon Business College Pty Limited
Skilled Placements Pty Limited (formerly Multimedia Investments Pty Limited)
Premier Fasteners Pty Limited
Supreme Business College Pty Limited
Academy of English Pty Limited
Australian College of Technology Pty Limited
Australian International High School Pty Limited
Australian Trades Institute Pty Limited
Australian Institute of Professional Studies Pty Limited
Academies Australasia Institute Pty Limited (formerly Academy of Social Sciences Pty Limited)
Academies Australasia College Pte. Limited
- 44 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
23. CONTINGENT LIABILITIES AND CONTINGENT ASSETS (continued)
Contingent Assets
Keith Franklin Kennett, K.F Kennett Nominees Pty Ltd and Myong Ho Pak
Proceedings have been determined by the Court of Appeal. The Company was successful in defending the claims and is
now taking steps to recover costs.
As with all litigation, the valuation of the Company’s claim and likelihood of recovery of costs orders cannot be
quantified with sufficient certainty for it to be recognised as an asset. The Company’s litigation costs were more than
$500,000, paid over the last six financial years. The recovery of these costs (or some part of them) is, at this stage, not
entirely clear, and is subject to further legal action.
24. SEGMENT REPORTING
FASTENERS
EDUCATION
CONSOLIDATED
2011
$
2010
$
2011
$
2010
$
2011
$
2010
$
Primary reporting – Business segments
Revenue
External sales
Other revenue
Unallocated revenue
Total revenue
Segment result
Unallocated expenses net of unallocated
revenue
Profit from ordinary activities before
income tax
Segment assets
Unallocated
Total assets
Segment liabilities
Unallocated
Total liabilities
7,397,461
1,998
7,333,683
1,523
17,024,740
736,344
10,393,868
394,260
24,422,201
738,342
17,727,551
395,783
7,399,459
7,335,206
17,761,084
10,788,128
25,160,543
37,535
18,123,334
32,286
25,198,078
18,155,620
931,007
1,165,558
3,938,809
2,263,775
4,869,816
3,429,333
6,812,814
6,955,586
14,221,384
4,855,507
445,965
891,351
7,400,839
2,293,224
(1,533,311)
(1,055,510)
3,336,505
2,213,823
21,034,198
2,238,861
11,811,093
1,931,107
23,271,978
13,742,200
7,846,804
2,007,887
3,184,575
1,105,614
9,854,692
4,450,189
Acquisition of non-current segment assets
63,272
57,447
2,975,457
316,169
3,038,729
373,616
Depreciation and amortisation of segment
assets
123,810
64,892
253,251
115,285
377,061
180,177
- 45 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
24. SEGMENT REPORTING (continued)
Business segments
Major products/services of business segments:
Fasteners
Education
Manufacture, import and sale of fasteners
Training and education services
Geographical information
The consolidated group operates in Australia and Singapore. The revenues and non-current assets of the consolidated
group are as follows:
Geographic Location
Revenues from External Customers
Non-current assets
Australia
$23,335,793
$13,068,308
Singapore
$1,862,285
$529,504
Accounting Policies
Segment revenues and expenses are those directly attributable to the segments.
Segment assets and liabilities include all assets used in and all liabilities generated by the segments. Deferred tax assets
and liabilities are not allocated to segments.
CONSOLIDATED GROUP
25. CASH FLOW INFORMATION
a. Reconciliation of cash flow from operations
with profit after income tax
2010
2011
$ $
PARENT ENTITY
2010
2011
$
$
Profit after income tax
2,255,974
1,497,856
1,196,228
1,766,969
Non-cash flows in profit (loss)
Amortisation
Depreciation
Deferred tax on revaluation
Loan to controlled entity re-instated
Dividend from controlled entity
Other
Net loss on disposal of plant and equipment
Write-downs to recoverable amounts
Unrealised foreign exchange movement
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in inventories
(Increase)/decrease in other current assets
(Increase)/decrease in deferred tax assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in tax payables
Increase/(decrease) in provisions
208,448
286,533
2,639
-
-
(290,000)
1,987
40,757
(6,979)
874,623
(74,090)
(353,929)
(408,159)
(712,182)
485,480
890,691
129,823
180,337
(188,262)
-
-
(290,000)
593
27,173
(6,557)
(232,697)
(69,639)
(8,133)
439,235
(250,817)
411,404
202,801
117,919
-
2,639
-
-
(290,000)
-
-
-
(152,187)
-
12,131
(381,397)
42,333
489,011
500,925
117,919
12,064
(188,262)
(548,613)
-
(290,000)
-
-
-
(110,495)
-
(10,267)
439,235
234
411,404
167,370
Cash flow from operations
3,201,793
1,843,117
1,537,603
1,767,558
- 46 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
CONSOLIDATED GROUP
2011
2010
$ $
PARENT ENTITY
2010
2011
$
$
25. CASH FLOW INFORMATION (continued)
b. Credit Standby Arrangements with Banks
Credit facility
Amount utilised
The major facilities are summarised as follows:
5,300,000
(2,856,000)
2,444,000
1,500,000
-
1,500,000
-
-
-
1,300,000
-
1,300,000
Bank overdrafts
Bank overdraft facilities are arranged with the general terms, conditions being set and expire on 29 June 2012.
Interest rates are variable and subject to adjustment
Commercial bill facility
$5,000,000 variable interest rate facility expires on 29 June 2012.
c. Loan Facilities
Loan facilities
Amount utilised
-
-
-
1,400,000
-
1,400,000
-
-
-
-
-
-
The consolidated group has not breached any borrowing requirements.
d. Non Cash Finance and Investing Activities
The Group acquired its interests in the share capital of AMI Education Pty Limited and Benchmark Resources Pty
Limited partly by issuing shares in the parent entity. Details of the acquisitions are included in Note 14 and details of
the shares issued are disclosed in Note 21.
26. EVENTS AFTER THE BALANCE SHEET DATE
There are no matters or circumstances that have arisen since the end of the financial year which significantly affected or
may significantly affect the operations of the consolidated group, the results of those operations, or the state of affairs of
the consolidated group in subsequent financial years.
The financial report was authorised for issue on 13 September 2011 by the board of directors.
27. RELATED PARTY TRANSACTIONS
Directors’ transactions with the Company and the consolidated group
Details of Directors’ remuneration are set out in the Remuneration Report section of the Directors’ Report. Directors are
reimbursed for expenses incurred by them on behalf of the consolidated group.
The Director’s loans totalling $166,918 for Academies Australasia College Pte. Limited were converted to equity in
Academies Australasia College Pte. Limited on 14 February 2011.
AMI Education Pty Limited has a total of 424,893 convertible notes of one dollar each on issue. The notes are
unsecured and on arms length terms. Mark Kwong To Lo has 103,590 notes and Daniel Hing Yuen Wong has 106,134
notes. Both are directors of AMI Education Pty Limited.
- 47 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
27. RELATED PARTY TRANSACTIONS (continued)
Directors’ transactions with the Company and the consolidated group (continued)
The terms of the convertible notes are:
Maturity: 14 May 2012. Interest rate: 6% per annum. Conversion Price: $1 per ordinary share in AMI Education Pty
Limited.
Interest paid to the directors during the period 25 February 2011 to 30 June 2011 was $11,684.
Directors’ and specified executives’ relevant interests in shares
Details of Directors’ relevant interests in shares are set out in the Directors’ Report.
Other related party transactions
Transactions between the Company and controlled entities include loans, management fees and interest. Details of
these transactions and the amounts owing at balance date are included in Notes 2, 3, 5 and 19.
28. FINANCIAL INSTRUMENTS
a.
Financial Risk Management
The group’s financial instruments consist mainly of deposits with banks, accounts receivable and payable, loans to
and from subsidiaries, bills and leases.
The main purpose of non-derivative financial instruments is to raise finance for group operations.
i.
Treasury Risk Management
Senior management meet on a regular basis to review currency and interest rate exposure and to evaluate
treasury management strategies where relevant, in the context of the most recent economic conditions and
forecasts.
ii.
Financial Risks
The main risks the group is exposed to through its financial instruments are interest rate risk, foreign
currency risk, liquidity risk, credit risk and price risk.
Interest rate risk
The interest rate risk has been managed by the consolidated group by reducing and in most cases
eliminating interest bearing debt. Stand by facilities has been set with a combination of fixed and floating
rate possibilities. There is no set policy as to the mix of interest rate exposures.
Foreign currency risk
The consolidated group is exposed to foreign currency risk on its purchase of products and the sale of
training and education courses to international students and on the translation of its foreign subsidiaries.
The consolidated group had not hedged foreign currency transactions as at 30 June 2011. Senior
management continue to evaluate this risk on an ongoing basis.
- 48 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
28. FINANCIAL INSTRUMENTS (continued)
Liquidity risk
Liquidity risk is managed by monitoring forecast cash flows and ensuring that adequate unutilised
borrowing facilities are maintained, where possible.
Credit risk
The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance
date to recognised financial assets, is the carrying amount, net of any provisions for impairment of those
assets, as disclosed in the balance sheet and notes to the financial statements. In the education business,
credit risk is minimised by, generally, collecting tuition fees in advance. In the fastening business credit risk
is minimised by managing the debtors portfolio actively and maintaining effective monitoring and
collection policies.
Price risk
In respect of the fastener business, the price of wire is constantly monitored. The company does not
currently hedge the prices at which it purchases wire.
b.
Financial Instruments
i.
Interest Rate Risk
The consolidated group’s exposure to interest rate risk, which is the risk that a financial instrument’s value
will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates
on classes of financial assets and financial liabilities, is as follows:
Note Weighted Floating Fixed interest maturing in: Non-
Interest
bearing
interest
rate
1 year
or less
1 to 5
years
average
interest
rate
$
$
$
$
Total
$
2011
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Financial liabilities
Trade and other
payables
Bank bills
Bank Loans
Loans - Directors
Loans - Others
Lease purchase
agreements
9
10
18
19
19
19
19
19
2.85%
3,572,936
-
-
3,572,936
-
-
-
-
-
-
-
3,572,936
2,223,272
2,223,272
2,223,272
5,796,208
-
-
4.05%
6.00%
6.00%
10.44%
-
-
-
-
-
-
-
-
571,200
-
-
-
-
2,284,800
166,814
209,724
163,669
3,385,706
-
-
-
-
33,438
604,638
22,495
2,847,502
-
3,385,706
3,385,706
2,856,000
166,814
209,724
163,669
55,933
6,837,846
- 49 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
28. FINANCIAL INSTRUMENTS (continued)
Note Weighted Floating Fixed interest maturing in: Non-
average
interest
rate
interest
rate
1 year
or less
1 to 5
years
Interest
bearing
$
$
$
$
Total
$
2010
Financial assets
Cash and cash
equivalents
Trade and other
receivables
Financial liabilities
Trade and other
payables
Loans - Directors
Lease purchase
agreements
9
10
18
19
19
2.10%
2,410,166
-
-
-
9.18%
-
2,410,166
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,410,166
2,432,339
2,432,339
2,432,339
4,842,505
2,858,515
166,918
2,858,515
166,918
21,575
7,439
-
29,014
21,575
7,439
3,025,433
3,054,447
ii.
Net fair values of financial assets and liabilities
The carrying amounts of financial assets and liabilities approximate their net fair value.
iii.
Amounts payable in foreign currencies
The Australian dollar equivalents of unhedged amounts payable or receivable in foreign currencies
calculated at year end exchange rates, are as follows:
CONSOLIDATED GROUP PARENT ENTITY
2011 2010 2011 2010
$
$ $
$
United States Dollars
Amounts payable
109,945
105,856
-
-
29. NEW ACCOUNTING STANDARDS FOR APPLICATION IN FUTURE PERIODS
Management have considered all standards and interpretations issued but not yet effective and do not believe that any
will have a material impact on the financial report. No new standards and interpretations have been adopted early.
- 50 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt’s Limited)
AND CONTROLLED ENTITIES
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2011
30. COMPANY DETAILS
The registered office of Academies Australasia Group Limited:
Level 6
505 George Street
Sydney NSW 2000
The principal places of business of the companies in the Consolidated Group are:
Academies Australasia
Level 6
505 George Street
Sydney NSW 2000
Premier Fasteners
1 & 3 Ladbroke Street
Milperra
NSW 2214
Academies Australasia
51 Middle Road
Singapore
188959
AMI Education
Level 4
303 Collins Street
Melboune
Vic 3000
Benchmark
2/148 Henry Street
Penrith
NSW 2750
* * *
- 51 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt's Limited)
AND CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
Additional information required by the Australian Stock Exchange Limited and not shown elsewhere
in this report is as follows.
SUBSTANTIAL HOLDERS
Ordinary Shares
The relevant interests of substantial shareholders as at 12 September 2011 were:
Shareholder
No. of Shares Held
%
a
Mr Chiang Meng Heng
b
Mr Christopher Elmore Campbell
Jilcy Pty Ltd Jilcy Super Fund A/C
P&B Carroll Pty Ltd Carroll Family Trust A/C
Eng Kim Low
24,941,886
7,149,007
6,669,007
4,248,848
3,779,126
52.83
15.14
14.13
9.00
8.01
a Includes 3,779,126 shares held by Eng Kim Low
b
Includes 6,669,007 shares held by Jilcy Pty Ltd Jilcy Super Fund A/C and 476,000 shares held by Bankura
Pty Ltd Campbell Family Trust A/C
VOTING RIGHTS
Ordinary Shares
At 12 September 2011 there were 266 holders of the ordinary shares of the Company. The voting
rights attaching to the ordinary shares, set out in Articles 69 and 70 of the Company’s Articles of
Association, are:
Article 69
“Subject to these Articles and any rights or restrictions for the time being attached to any class or
classes of shares:
(a) at meetings of members or classes of members each member entitled to attend and vote may
attend and vote in person or by proxy, or attorney and (where the member is a body corporate)
by representative;
(b) on a show of hands, every Member present has 1 vote;
(c) on a poll, every Member present has:
(i) 1 vote for each fully paid share; …….”
Article 70
“Where more than 1 joint holder votes, the vote of the holder, whose name appears first in the register
of members shall be accepted to the exclusion of the others.”
- 54 -
ACADEMIES AUSTRALASIA GROUP LIMITED (Formerly Garratt's Limited)
AND CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
20 LARGEST SHAREHOLDERS AS AT 12 SEPTEMBER 2011
Registered Name
No. Shares
%
Jilcy Pty Ltd Jilcy Super Fund A/C
P&B Carroll Pty Ltd Carroll Family Trust A/C
Eng Kim Low
Vasek Fasteners Pty Ltd Premier Screw Super A/C
Schlederer Nominees Pty Limited
1 Mr Chiang Meng Heng
2
3
4
5
6
7 Mrs Gail Leslie Storey
8
9 Ms Anthea Judith Drescher
Chio Tee Tan
Citicorp Nominees Pty Limited
Bankura Pty Ltd Campbell Family Trust A/C
Frank Kwong-Shing Wong
Daniel Hing Yuen Wong Jehovah Jireh Family A/C
10
11
12
13
14 Mark Kwong To Lo M&M Family A/C
Kim Soon Ng
15
Bowes & Brown Pty Ltd
16
Siah Chuan Lim C&L A/C
17
18
Thia Dowsey
19 May Chiak Elaine Ng
20 Wheen Finance Pty Ltd
21,162,760 44.83
6,669,007 14.13
9.00
4,248,848
8.01
3,779,126
3.29
1,553,529
1.60
756,182
1.34
634,335
1.27
600,000
1.13
531,922
1.10
520,000
1.01
476,000
0.80
380,000
0.73
343,872
0.71
334,584
0.64
300,000
0.54
257,261
0.52
247,536
0.48
225,000
0.48
225,000
0.44
208,000
43,452,962
92.04
HOLDING RANGE (SHAREHOLDERS) AS AT 12 SEPTEMBER 2011
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 +
No. Holders
61
96
32
50
27
266
Total No. Shares
44,744
273,720
238,448
2,198,870
44,453,628
47,209,410
%
0.09
0.58
0.51
4.66
94.16
100.00
* * *
- 55 -
OFFICES AND OFFICERS
DIRECTORS
Neville Thomas Cleary
Chairman (Independent & Non-
Executive)
Christopher Elmore Campbell
Group Managing Director
Chiang Meng Heng
Director (Non-Executive)
Dr John Lewis Schlederer
Director (Independent & Non-
Executive)
Philip Carroll
Director (Executive)
Gabriela Del Carmen Rodriguez
Naranjo
Alternate Director to Neville
Thomas Cleary
Bridget Mary Carroll
Alternate Director to Philip Carroll
COMPANY SECRETARY
Stephanie Ann Noble
REGISTERED OFFICE
Academies Australasia Group Limited
Level 6
505 George Street
Sydney NSW 2000
Telephone: (02) 9224 5555
(02) 9224 5550
Facsimile:
SHARE REGISTRAR
Computershare Investor Services Pty Limited
Level 3
60 Carrington Street
Sydney NSW 2000
Telephone: (02) 8234 5000
Toll Free (Australia only) 1300 850 505
Facsimile:
Web Site: www.academies.edu.au
(02) 8234 5050
STOCK EXCHANGE
The Company is listed on the Australian Stock Exchange. The Home
Exchange is Sydney.
ASX Code:
AKG
- 56 -
ACADEMIES AUSTRALASIA
ACADEMIES
AUSTRALASIA
GROUP LIMITED
100%
EDUCATION
100%
ACADEMIES
AUSTRALASIA P/L
FASTENERS
100%
PREMIER FASTENERS
P/L
OTHER
100%
SKILLED PLACEMENTS
P/L
ACADEMIES
AUSTRALASIA
(MANAGEMENT) P/L
100%
100%
ACA INVESTMENT
HOLDINGS P/L
75%
ACADEMIES
AUSTRALASIA
COLLEGE P/L
100%
ACADEMIES
AUSTRALASIA
INSTITUTE P/L
100%
AUSTRALIAN
INSTITUTE OF
PROFESSIONAL
STUDIES P/L
100%
AUSTRALIAN TRADES
INSTITUTE P/L
ACADEMY OF
ENGLISH P/L
100%
Also trades as
- Academy of English (Barton)
- Academy of English (Blue Mountains)
- Academy of English (Korea)
AUSTRALIAN
COLLEGE OF
TECHNOLOGY P/L
100%
AUSTRALIAN
INTERNATIONAL HIGH
SCHOOL P/L
100%
CLARENDON
BUSINESS COLLEGE
P/L
100%
Also trades as
- Clarendon Business College (Barton)
100%
SUPREME BUSINESS
COLLEGE P/L
AKG INVESTMENT
HOLDINGS P/L
100%
100%
AKG2 INVESTMENT
HOLDINGS P/L
75%
AMI EDUCATION P/L
51%
BENCHMARK
RESOURCES P/L
Also trades as
- Benchmark College
09/2011
-57-