ACADEMIES AUSTRALASIA GROUP LIMITED
ANNUAL REPORT 2016
ACN 000 003 725
ACADEMIES AUSTRALASIA GROUP LIMITED
ANNUAL REPORT 2016
CONTENTS
Page
Report of the Chairman and the Group Managing Director
Directors’ report
Information on the Directors and Company Secretary
Information on Senior Executives
Remuneration report - audited
Corporate governance statement
Auditors’ independence declaration
Consolidated financial statements
Statement of comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes
Directors’ declaration
Independent audit report
Additional information for listed companies
Corporate information
Glossary of common terms
- 1 -
2
4
8
10
11
13
14
15
16
17
18
19
50
51
54
56
57
REPORT OF THE CHAIRMAN AND THE GROUP MANAGING DIRECTOR
The year ended 30 June 2016 was a difficult year. While the business environment was not perfect, our problem
was within. Spectra Training recorded an EBITDA loss of $3.04 million. The group EBITDA loss was $3.135
million.
Our business environment
The international demand for Australian standard education continues to grow. Exports from the Australian
international education sector for calendar 2015 were at a record $21 billion – making it the second largest
export sector. The recent re-election of the Coalition government is seen to be positive for the sector as they had
previously put in place strategies that were well founded. And, for the first time, international education has a
champion in Cabinet. International education is now part of the portfolio of Senator the Hon Simon Birmingham,
Minister for Education and Training, a Cabinet minister.
The domestic sector came under a lot of pressure during the period under review predominantly because fraud
in VET Fee Help arrangements to the tune of hundreds of millions of dollars. We have 3 colleges with VET Fee
Help status. Their operations are small and well within the regulations. Nevertheless, the widespread reports
about certain vocational colleges abusing the system had a negative effect on domestic business in the VET
sector. The sector is awaiting new regulations and guidelines from the Federal Government. Until then, the
market is not expected to lift.
The year ended June 2016
Revenue was down 3% to $55 million. The focus was on consolidation after the acquisitions in the previous
years. However, especially in the latter part of the year, substantial management time and resources had to be
devoted to Spectra Training.
EBITDA for the period under review was negative $3.135 million compared to a profit of $1.97 million in the
previous corresponding period. This severe fall can be attributed to 4 principal reasons:
1. Spectra Training’s negative EBITDA - $3.04 million
2. Reduction in value of investment in Redhill Education Limited - $1.163 million
3. Other one-off expenses (announced on 12 August 2016 - $0.70 million)
4. Senior management focus on turning around Spectra Training
Spectra Training’s performance improved substantially in the last quarter of the year. Barring any unforeseen
adverse developments in the domestic sector, Spectra Training is aiming at a positive EBITDA contribution in
the financial year.
During the year a substantial amount ($3.6 million) was spent on re-structuring and re-organisation. EBITDA
before this expenditure, the unrealised loss on investment and other income would have been $1.6 million (2015
$1.9 million).
Outlook
New premises were contracted in Melbourne for Discover English and in Perth for Language Links and the
Perth operations of Academies Australasia Institute and Spectra Training. These new premises will be more
attractive to our students and corporate clients.
Australia is well positioned to cater for the demand for international education and we are confident in this
sector. Skills Training Australia’s recent approval to offer the Diploma and Advanced Diploma in Nursing to
international students is a significant area that will be pursued in the second half of this year. The domestic
business is more difficult to predict. Nevertheless, we do have a wide range of courses and have a good team in
place.
- 2 -
Changes to the Board
Bill Say Mui Foo was appointed Non-Executive Director on 1 July 2015.
Ruffy Geminder, Non-Executive Director, resigned on 24 September 2015.
Gary William Cobbledick, Executive Director, left the Group and the Board on 14 January 2016.
2015 Rights Issue
The Rights Issue to raise $4.0 million, announced in August 2015, was successfully completed. We thank all
shareholders for their support.
Emphasis of Matter
Shareholders will note that the Auditors report has an ‘Emphasis of Matter’ (‘EOM’). The need for the EOM
arises from the net loss of $4.3 million for the period under review and the current liabilities at 30 June 2016
being $15.694 million more than current assets. The latter point arises because all debt at 30 June 2016 is being
shown as current: at that date the Group did not have an unconditional right to defer repayment of its bank
facilities beyond 12 months. The Group has an offer to extend its financial arrangements dated 30 June 2016.
This offer has not yet been executed.
Going Concern
The Board believes that it is appropriate that the Group’s financial statements continue to be prepared on a
‘Going Concern’ basis, which contemplates the orderly realisation of assets and payment of liabilities in the
ordinary course of business. The Board is currently satisfied that there are reasonable grounds to assume that
the Company will meet its future financial obligations as and when they fall due. The factors supporting this
assumption are set out in the Directors’ Report on page 6.
Majority Shareholders’ Support
During the year, fellow directors, Chiang Meng Heng and Christopher Elmore Campbell, extended short-term
loans of $1.0 million and $0.5 million respectively, to the Group. Together, they have relevant interests
exceeding 50% of the shares in the Company. They have advised the Board that they are prepared to allow their
loans to continue until 31 January 2017. They also advised the Board that in the event of a Board-approved
rights issue, their loans will be applied towards the rights arising from the shares in which they have an interest.
Acknowledgment
On behalf of the Board, we would like to thank all shareholders, students, customers and business associates for
their loyalty and support. We also wish to thank all management and staff for their contribution during a difficult
period. And finally, we would like to convey our regrets to those members of the staff whose services had to be
made redundant in the exercise to reorganise Spectra Training.
Dr John Lewis Schlederer
Chairman
31 August 2016
Christopher Elmore Campbell
Group Managing Director and CEO
- 3 -
108th ANNUAL DIRECTORS’ REPORT
Your Directors present their report on Academies Australasia Group Limited (the Company) and its controlled
entities (jointly the Group) for the year ended 30 June 2016.
DIRECTORS
The names of Directors in office at any time during, or since the end of, the financial year are:
Dr John Lewis Schlederer
Christopher Elmore Campbell
Chiang Meng Heng
Gabriela Del Carmen Rodriguez Naranjo
Gary William Cobbledick
Raphael Geminder
Bill Say Mui Foo
Resigned 14 January 2016
Resigned 24 September 2015
Appointed 1 July 2015
Dr John Lewis Schlederer, Christopher Elmore Campbell, Chiang Meng Heng and Gabriela Del Carmen
Rodriguez Naranjo have all been in office since the start of the financial year to the date of this report.
Details on the Directors and Company Secretary are set out on pages 8 to 9.
PRINCIPAL ACTIVITY
The principal activity of the Group during the financial year was the provision of training and education services.
CONSOLIDATED RESULT
Consolidated result
The consolidated loss of the Group for the financial year, after providing for income tax and eliminating non-
controlling entity interests, amounted to $4,312,000 (2015: profit $173,000).
REVIEW OF OPERATIONS
A review of the operations of the Group during the financial year and the results of those operations is as follows:
Revenue from operating activities decreased by 3% to $54,985,000 (2015: $56,755,000).
Losses from ordinary activities before income tax, increased from $388,000 to $5,879,000.
Further details are provided under ‘Significant Changes in State of Affairs’ below.
Dividends Paid or Proposed
There were no dividends paid during the financial year
The Directors do not propose a dividend for the year ended 30 June 2016.
- 4 -
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
Revenue from operating activities decreased by 3% to $54,985,000 (2015: $56,755,000). While revenues of
certain colleges grew significantly, this growth was offset by a few which had lower revenues. The big
disappointment was Spectra Training where revenue declined by $4,800,000 (39%) compared to FY15.
EBITDA for the Group for the year ended 30 June 2016, excluding unrealised gains and losses from the
revaluation of investments, decreased from $1,251,000 to a loss of ($1,972,000). This EBITDA loss was mainly
because of Spectra Training’s EBITDA loss of ($3,038,000).
The net assets of the Group decreased in the year by $474,000 to $25,088,000.
The Group has gone through a very challenging period. The main problem in the year was Spectra Training,
which singularly led the Group into negative EBITDA. The Board believes that Spectra Training’s decline has
been arrested.
During the year, there were also significant one-off expenses that the Board does not expect to be repeated. In
its announcement “Guidance for FY16 Trading Results” on 29 April 2016, the Group stated that EBITDA for
the year ending 30 June 2016 was estimated to be a loss of $1,450,000. The following items were identified and
recognised since that announcement:
a. Further reduction in the value of the investment in Redhill Education Limited
763,000
b. Additional provision (due to better performance - in accordance with contracted terms)
for the final tranche payment for the acquisition of Skills Training Australia
c. Relocations and Renovations
d. Re-estimation of future Employee Entitlements (Victoria)
e. Bad debts (Spectra Training)
f. Licensing and Registrations
g. Other (2%)
185,000
156,000
121,000
120,000
87,000
28,000
As forecast in the Group’s announcement “Guidance for FY16 Trading Results” on 29 April 2016, Spectra
Training’s performance in the last quarter of the financial year to 30 June 2016, following its reorganisation,
was substantially better than that for the first 3 quarters of the year. That last quarter showed an EBITDA loss
of $213,000 (9% better than forecast) compared to an average of $942,000 loss for each of the first quarters.
The investment in Redhill Education Limited was written down to 85 cents a share (market value at 30 June
2016), incurring an unrealised loss of $1,163,000 for the year.
FINANCIAL POSITION
The auditors have issued an unqualified opinion on the financial report (see page 51). However, their report has
an ‘Emphasis of Matter’ (‘EOM’). The need for the EOM arises from the net loss of $4,312,000 for year to 30
June 2016 and current liabilities at 30 June 2016 being $15,694,000 more than current assets. The latter situation
occurs because all debt at 30 June 2016 is shown as current: at that date the Group did not have an unconditional
right to defer repayment of its bank facilities beyond 12 months.
The Group met all its payment obligations (principal and interest) to its bankers during the year. However, the
Group also incurred operating losses, following which its bankers reviewed the Group’s performance and
- 5 -
financial position and proposed variations to the facilities agreement. The required new facilities agreement
was not received in time for finalisation prior to the year end. A new facility letter of offer dated 30 June 2016
has subsequently been received but it has not yet been executed.
The Board believes that it is appropriate that the Group’s financial statements continue to be prepared on a
‘Going Concern’ basis. The following factors support this assumption:
a. Positive cash flow for the year of $1,040,000.
b. Positive cash flow from operations for the year of $1,102,000.
c. Substantial cash holdings across the Group of $8,068,000 of which $6,997,000 million is required to be
held in the TPS controlled accounts.
d. Repayment of $3,126,000 of bank debt during the year and servicing of all debt interest obligations.
e. As at 30 June 2016, bank debt (excluding contingent facilities) had been reduced to $12,302,000. Since
that date it has been reduced to $11,420,000. Annually, $3,126,000 is amortised.
f. Positive net assets of $25,088,000.
g. Support of majority shareholders through short-term loans extended to the Group during the year. See
‘Shareholders Loans’ below.
h. Non-core assets in excess of $2,000,000 are available to reduce the level of debt.
i. In the latter part of FY16, significant efforts were made to rationalise the cost structures of the business.
As a result, more than $4,000,000 will be saved annually.
j. Included in net current liabilities are tuition fees paid in advance, of $14,708,000. This is not an amount
payable in the ordinary course of business. It will be recognised as income as tuition is delivered.
ISSUE OF SHARES
On 16 November 2015, Academies Australasia Group Limited issued 13,299,495 new fully paid ordinary
shares in a fully subscribed renounceable rights issue, raising $3,971,000.
SHAREHOLDERS’ LOANS
In August 2015, the Board resolved that the Company make a Rights Issue to shareholders to raise $4,000,000
in cash.
The Directors, at that time, together had an interest in 65.98% of the total of 62,063,484 shares in the Company.
Each of the Directors having an interest in the shares of the Company committed to subscribe for their share of
the Rights Issue, meaning that $2,639,200 was committed. These same Directors extended loans to the Company
to the total of $2,639,200 on the basis that these loans would be converted to their respective shares of the Rights
Issue. The Directors’ loan amounts, which were subsequently converted to shares in the rights issue, were as
follows:
Directors' with interests in shares
as at 25 August 2015
Percentage
of Total
Loan to
Company
Shares
Dr John Lewis Schlederer
1,450,000
2.34%
$93,600
Chiang Meng Heng
25,291,886
40.75%
$1,630,000
Christopher Elmore Campbell
7,777,777
12.53%
$501,200
Gabriela del Carmen Rodriguez Naranjo
25,000
0.04%
$1,600
Gary William Cobbledick
926,645
1.49%
$59,600
Raphael Geminder
1,473,209
2.37%
$94,800
Gary William Cobbledick and
Raphael Geminder
4,006,396
6.46%
$258,400
40,950,913
65.98%
$2,639,200
- 6 -
Each of the Directors’ loans was made to the Company on or before 25 August 2015. The purpose of the loans
was primarily to meet the second tranche payment for the acquisition of Skills Training Australia, amounting to
$2,402,000, which was made on 31 August 2015. The funds of $2,639,200 loaned by Directors were applied to
meet this payment. Surplus funds were taken to working capital.
In March 2016, two Directors, Messrs. Chiang Meng Heng and Christopher Elmore Campbell, extended short-
term loans of $1,000,000 and $500,000 million respectively to the Group. Together, they have relevant
interests exceeding 50% of the shares in the Company. Messrs Heng and Campbell have advised the Board
that they are prepared to allow their loans to continue until 31 January 2017. They also advised that in the
event of a Board-approved rights issue, their loans will be applied towards the rights arising from the shares in
which they have an interest.
EVENTS AFTER THE REPORTING DATE
On 23 August 2016, 800,000 new ordinary shares in the Company were issued to the vendor of Skills Training
Australia. This represented settlement of $200,000 of the final payment due to the vendor. See Note 25 to the
accounts on page 45 for further details.
The Group has an offer dated 30 June 2016 to extend its bank facilities. This offer has not yet been executed.
There were no other matters or circumstances that have arisen since the end of the financial year which
significantly affected or may significantly affect the operations of the Group, the results of those operations, or
the state of affairs of the Group in subsequent financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The Chairman’s and the Group Managing Director’s Report (Pages 2 and 3) addresses the Group’s outlook.
ENVIRONMENTAL ISSUES
The Group’s operations are not subject to any significant environmental legislation.
INDEMNIFICATION AND INSURANCE OF OFFICERS
The Company’s constitution 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 paid an insurance premium amounting to $13,000 in respect of a directors and officers
liability insurance policy covering the directors’ and officers’ liabilities as officers of the Company.
OPTIONS
There are no options over unissued share capital.
ROUNDING OF AMOUNTS
The Director’s report is presented in Australian Dollars and rounded to the nearest thousand dollars in
accordance with Instrument 2016/191
- 7 -
INFORMATION ON DIRECTORS AND COMPANY SECRETARY as at the date of this report
Dr John Lewis Schlederer
Qualifications
Experience
Interest in Shares
Special Responsibilities
Independent, Non-executive, Director, appointed 21 August 2009 (7
years), Chairman since 1 January 2014 (2 years 7 months).
B.Sc. (Hons), Grad. Diploma, PhD.
More than 20 years teaching experience at University of New South
Wales and TAFE NSW and many years in business.
3,760,000 shares (4.94%)
Chairman of the Board, Chairman of the Remuneration Committee.
Chairman of the Audit and Risk Committee until 16 July 2015.
Directorships held in other listed
entities
None
Christopher Elmore Campbell Group Managing Director and Chief Executive Officer, appointed 1
Qualifications
Experience
Interest in Shares
Special Responsibilities
Directorships held in other listed
entities
July 1996 (20 years 2 months).
B.Soc.Sci. (Hons), FFin, FAICD, FCIS, FSCA.
Experience in mergers and acquisitions and more than 15 years’
experience in managing educational institutions. Previous positions
include senior appointments with the Monetary Authority of Singapore
and an international bank in Australia.
Director, Asia Society Australia.
9,160,970 shares (12.03%)
Member of the Remuneration Committee.
None.
Chiang Meng Heng
Qualifications
Experience
Interest in Shares
Special Responsibilities
Directorships held in other listed
entities
Non-executive Director, appointed 15 February 2000 (16 years 6
months).
Executive Chairman since April 2016 of Academies Australasia
College Pte Limited (a wholly-owned subsidiary company operating
in Singapore) – see page 3 of the Corporate Governance Statement
(available on the Company’s website: www.academies.edu.au).
BBA (Hons).
Previous positions include Treasurer, Citibank NA, Singapore and
Hong Kong; Adviser & Head, Banking Supervision, Monetary
Authority of Singapore; President, Asia Commercial Bank Ltd;
Managing Director, First Capital Corporation Ltd; Executive Director,
Far East Organization and Group Managing Director, Lim Kah Ngam
Ltd.
30,711,576 shares (40.32%)
Member of the Audit and Risk Committee and Remuneration
Committee.
Far East Orchard Limited (listed on the Singapore Exchange).
Macquarie International Infrastructure Fund Limited (until 26 October
2015 when it was delisted from the Singapore Exchange).
- 8 -
Gabriela Del Carmen
Rodriguez Naranjo
Qualifications
Experience
Interest in Shares
Special Responsibilities
Directorships held in other listed
entities
Bill Say Mui Foo
Qualifications
Experience
Directorships
Interest in Shares
Special Responsibilities
Directorships held in other listed
entities
COMPANY SECRETARY
Executive Director, appointed 21 October 2013 (2 year 10 months).
Alternate Director, May 2011 to December 2013 (3 years 7 months),
(Alternate to Neville Thomas Cleary (Retired 31 December 2013)).
B. Comp.Sci, B.Sci. Sys. Eng, MAICD.
More than 15 years’ experience managing educational institutions,
regulatory
in
including
compliance, curriculum development and lecturing.
48,329 shares (0.06%)
None.
None
acquisitions, marketing,
experience
Independent, non-executive Director, appointed 1 July 2015 (1 year 2
months)
BBA, MBA, Hon.D.Com.
Chairman of the Singapore Business Circle, a chapter of the Trans-
Tasman Business Circle; Member of the National University of
Singapore President's Advancement and Advisory Council; Member
of the James Cook University Futures Committee.
Previously: Vice Chairman of ANZ South & South East Asia; Chief
Executive Officer of ANZ Singapore; South East Asia Head of
Investment Banking for Schroders International Merchant Bankers Ltd
and President Director of Schroders Indonesia.
Nil
Chairman of the Audit and Risk Committee (appointed 17 July 2015).
Mewah International Inc. (Listed on the Singapore Exchange).
Chris Grundy
Qualifications
Experience
Other Responsibilities
Appointed 17 July 2015.
B.Com, GradDipAppCorpGov, FCA, FCIS, GAICD.
7 years as Company Secretary in ASX-listed companies.
Chief Financial Officer.
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 2016 financial year were:
Director
Directors’
Meetings
B
A
Audit and Risk
Committee
B
A
Remuneration
Committee
B
A
Dr John Lewis Schlederer
Christopher Elmore Campbell
Chiang Meng Heng
Gabriela Del Carmen Rodriguez Naranjo
Gary William Cobbledick
Raphael Geminder
Bill Say Mui Foo
10
10
10
10
8
3
10
10
10
7
10
7
2
9
5
-
5
-
-
-
5
5
-
4
-
-
-
5
5
5
5
-
-
-
-
5
5
5
-
-
-
-
A - Number of meetings held during the time the Director held office during the period
B - Number of meetings attended
- 9 -
INFORMATION ON SENIOR EXECUTIVES
Christopher Elmore Campbell
Group Managing Director and Chief Executive Officer
Other details as per Information on Directors – page 8.
Gabriela Del Carmen Rodriguez
Naranjo
Melinda Burgess
Qualifications
Experience
Other Responsibilities
Chris Grundy
Qualifications
Experience
Other Responsibilities
Ingeborg Loon
Qualifications
Experience
Other Responsibilities
Esther Teo
Qualifications
Experience
Executive Director
Other details as per Information on Directors – page 9.
Director, Strategic Operations (since 15 July 2016)
B.A, GradDipAgedServMgmt, DipQualityAuditing.
20 years’ experience in the VET sector, managing operations in
RTOs.
Founder, in 1999, and Chief Executive Officer of Skills
Training Australia until 15 July 2016.
Previous experience includes Case Management, Aged and
Community Care Management and Aged Care Accreditation.
Member of Victorian State Committee of ACPET since 2012.
Chief Financial Officer (Appointed 21 May 2015)
B.Com, GradDipAppCorpGov, FCA, FCIS, GAICD.
More than 25 years in commerce, including roles in general
management, finance, operations, sales and marketing in
Australia and abroad. Industry experience includes professional
services and regulated operations.
7 years as Company Secretary in ASX-listed companies.
Company Secretary - Academies Australasia Group Limited.
Director, International
BA, B.Economics & Japanese Studies, GradDipBusAdmin.
25 years' senior management experience in the
internationalisation and export of education at universities and
in the vocational sector in Australia.
Advocacy and policy development for ACPET.
Board Member of IEAA.
Chief Executive Officer of Academies Australasia Polytechnic
MBA, GradDipMgmt.
30 years’ senior management in Singapore and Australia,
including roles in retail, information technology, strategic
business planning and supply chain management.
10 years of tertiary teaching, curriculum design and education
management.
- 10 -
REMUNERATION REPORT – AUDITED
Remuneration Policies
The Remuneration Committee reviews and makes recommendations to the Board on remuneration packages and
policies applicable to the Group Managing Director and Chief Executive Officer, Senior Executives and the
Directors themselves. This role also includes responsibility for share option schemes, performance incentive
packages, superannuation entitlements, retirement and termination entitlements, fringe benefit policies and
professional indemnity and liability insurance policies. Remuneration levels are set to attract appropriately
qualified and experienced directors and senior executives.
During the year, the members of the Remuneration Committee were Dr John Lewis Schlederer, Chiang Meng
Heng and Christopher Elmore Campbell.
All executives receive a fixed base salary, which is based on factors such as market factors and experience, and
superannuation (as required by law). Executives may sacrifice part of their salary to towards superannuation.
There are no options over unissued capital. The Company does not have an employee share option plan.
All remuneration paid to Directors and Executives is valued at the cost to the Company and expensed.
Non-executive Directors’ remuneration comprises fixed fees. 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 Group.
Directors and Senior Executives
a. Directors and Senior Executives
Details of the Directors and Senior Executives holding office at any time during the financial year are set out on
pages 8 to 10.
b. Directors and Senior Executives Remuneration
30 June 2016 Directors and Senior
Executives
Short-term employee benefits
Bonus
Cash, salary
and
commissions
Non-
monetary
benefits
Post- employment
benefits
Superannuation
Total
$000s
$000s
$000s
$000s
$000s
Dr John Lewis Schlederer
Christopher Elmore Campbell
Chiang Meng Heng
Bill Say Mui Foo
Gabriela Del Carmen Rodriguez Naranjo
Gary William Cobbledick a
Chris Grundy
Esther Teo
Ingeborg Loon
28
371
32
24
182
238
215
134
162
1,386
- 11 -
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
35
79
3
2
17
18
35
39
15
63
450
35
26
199
256
250
173
177
243
1,629
30 June 2015 Directors and Senior
Executives
Short-term employee benefits
Cash, salary
and
commissions
PIPd
/bonus
Non-
monetary
benefits
Post- employment
benefits
Superannuation
Total
$000s
$000s
$000s
$000s
$000s
Dr John Lewis Schlederer
Christopher Elmore Campbell
Chiang Meng Heng
Gabriela Del Carmen Rodriguez Naranjo
Gary William Cobbledick a,
Raphael Geminder b
Chris Grundy (from 21 May 2015)
Esther Teo
Ingeborg Loon
28
371
32
148
247c
43c
-
102
150
1,121
-
-
-
19
-
-
-
28
-
47
-
-
-
-
-
-
-
-
-
-
35
79
3
16
20
-
29
32
14
63
450
35
183
267
43
29
162
164
228
1,396
a Senior executive from 1 June 2014 to 14 January 2016, Director from 23 October 2014 to 14 January 2016.
b Director from 23 October 2014 to 24 September 2015.
c Included within remuneration paid to Directors in the year ended 30 June 2015 is an amount paid by the Group on behalf
of Gary William Cobbledick and Raphael Geminder totalling $84,000. This amount was paid in settlement of an obligation
of the two Directors arising from their prior ownership of Spectra Training. The amount has been apportioned according
to their proportional ownership of Spectra Training. The amount will not be reimbursed.
d PIP is the Performance Incentive Plan which was closed on 22 October 2013.
None of the remuneration paid to any Director or Senior Executive is tied to any specific performance condition.
c. Options issued as part of remuneration for the year ended 30 June 2016
The Group has no employee share plan. No options were granted as part of remuneration.
d. Employment contracts of Senior Executives
The employment conditions of all Senior Executives are formalised in written contracts of employment.
Generally, the employment contracts stipulate a one-month notice 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.
Christopher Elmore Campbell has a fixed term contract of employment which expires on 31 December 2017.
- 12 -
PROCEEDINGS ON BEHALF OF THE COMPANY
The Company and its subsidiary Academies Australasia Institute were successful in their claim for costs
against Keith Franklin Kennett in the Supreme Court of NSW and the matter is now settled.
The Company was not a party to any other proceedings in a Court of Law during the year.
AUDITORS’ INDEPENDENCE DECLARATION
The Auditor’s Independence Declaration for the year ended 30 June 2016 appears on page 14 and forms part of
the Directors’ Report for the year ended 30 June 2016.
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 by the external auditors, Pilot Partners, 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 auditors’ 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 2016:
Taxation services
Other services
$66,000
$278,000
CORPORATE GOVERNANCE STATEMENT
The Company’s Corporate Governance Statement and its Key to Disclosures, Corporate Governance Council
Principles and Recommendations (ASX Appendix 4G) are provided to ASX together with the Company’s
Annual Report. The Corporate Governance Statement is on the Company’s website: www.academies.edu.au
Signed in accordance with a resolution of the Board of Directors pursuant to section 298 (2)(a) of the
Corporations Act 2001.
Dr John Lewis Schlederer
Director
31 August 2016
Christopher Elmore Campbell
Director
- 13 -
PILOT PARTNERS
Chartered Accountants
Level 10, Waterfront Place
1 Eagle St. Brisbane 4000
PO Box 7095 Brisbane 4001
Queensland Austra'ia
P+61 7 3023 1300
F+61 7 3229 1227
pilotpartners. com. au
AUDITORS INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
To The Directors of Academies Australasia Group Limited
I declare that to the best of my knowledge and belief, during the year ended 30 June 2016 there
have been:
i.
no contraventions of the auditors' independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
ii.
no contraventions of any applicable code of professional conduct in relation to the audit.
?^y '<
PILOT PARTNERS
Chartered Accountants
DANIEL GILL
Partner
Signed on 31st August 2016
Level 10
1 Eagle Street
Brisbane Qld 4000
-14-
ABN 60 063 £87 76D | Pilct is a rogi; '. orod trL^. 3 mark L;c£nsed to Pilot "- rtners | Liab:iity (Hired by a scheme Fpp.-Dv^J under FTofessionci Ctcn^ards Legistation
Member of Nexia International, a worldwide network of independent accounting and consulting firms.
ACADEMIES AUSTRALASIA GROUP LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 30 June 2016
Note 2016
$000s
2015
$000s
Revenue from continuing operations
Student acquisition and teaching costs
Gross profit
Personnel expenses
Premises expenses
Other administration expenses
Re-structure and re-organisation costs
Unrealised gain/(loss) on investments
Other income
Earnings before interest, depreciation and amortisation
Depreciation and amortisation expense
Interest paid
Interest received
(Loss)/profit before income tax
Income tax expense
(Loss)/profit for the year
Other comprehensive income:
Exchange differences on translating foreign controlled entities
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Profit attributable to:
Owners of the parent entity
Non-controlling interests
Total comprehensive income attributable to:
Owners of the parent entity
Non-controlling interests
Earnings per share (cents per share)
Basic
Dividends per share (cents)
The accompanying notes form part of these financial statements.
- 15 -
2
3
3
3
3
3
2
2
4
7
8
54,985
(25,359)
56,755
(24,167)
29,626
32,588
(14,421)
(8,429)
(5,156)
1,620
(3,592)
(1,972)
(1,163)
-
(3,135)
(1,882)
(1,089)
227
(5,879)
1,567
(4,312)
(20)
(20)
(4,332)
(4,226)
(86)
(4,312)
(4,246)
(86)
(4,332)
(6.0)
0.0
(17,185)
(7,589)
(5,895)
1,919
(668)
1,251
606
109
1,966
(1,519)
(916)
81
(388)
561
173
35
35
208
(3)
176
173
32
176
208
0.0
4.5
ACADEMIES AUSTRALASIA GROUP LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2016
Note
2016
2015
$000s $000s
Current Assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Investments
Total Current Assets
Non-Current Assets
Trade and other receivables
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
Trade and other payables
Borrowings
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Share capital
Accumulated losses
Foreign currency translation reserve
Non-controlling interests
Total Equity
The accompanying notes form part of these financial statements.
8,068
8,731
4,563
2,060
23,422
3,018
6,293
3,459
32,924
45,694
69,116
23,152
61
13,975
1,928
39,116
-
-
4,912
4,912
44,028
25,088
36,504
(11,603)
73
114
25,088
9
10
11
12
10
14
15
16
17
4
18
19
17
18
19
20a
- 16 -
7,078
8,884
4,096
3,224
23,282
4,553
6,790
1,820
33,097
46,260
69,542
20,354
-
5,653
1,750
27,757
1,300
9,825
5,098
16,223
43,980
25,562
32,553
(7,377)
93
313
25,562
ACADEMIES AUSTRALASIA GROUP LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
As at 30 June 2016
Ordinary
Shares
Other
Equity
Retained
Profits
Reserves
Non -
Controlling
Interests
Total
$000s
$000s
$000s
$000s
$000s
$000s
(7,377)
(4,226)
93
-
313
(86)
25,562
(4,312)
-
(20)
-
(20)
(4,226)
(20)
(86)
(4,332)
-
-
(11,603)
(3)
-
(3)
-
-
(2,793)
(7,377)
-
-
73
58
-
35
35
-
-
-
93
-
(113)
3,971
(113)
114
25,088
203
176
28,213
173
-
35
176
208
-
15
(81)
313
-
15
(2,874)
25,562
Year ended 30 June 2015
Balance at 1 July 2014 restated
25,446
7,087
(4,581)
Year ended 30 June 2015
32,533
Profit for the period
Exchange differences on translating
foreign operations
Total comprehensive income for
the year
Issue share capital
Dividend paid
Balance at 30 June 2016
-
-
-
3,971
-
36,504
-
-
-
-
-
-
-
Profit for the period
Exchange differences on translating
foreign operations
Total comprehensive income for
the year
Shares contracted to be issued
(Acquisition of subsidiary)
Acquisition of subsidiaries
Dividend paid
-
-
-
-
-
-
7,087
(7,087)
-
-
Balance at 30 June 2015
32,533
The accompanying notes form part of these financial statements.
-
-
-
- 17 -
ACADEMIES AUSTRALASIA GROUP LIMITED
CONSOLIDATED CASH FLOW STATEMENT
For the year ended 30 June 2016
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Income taxes paid
Note
2016
$000s
2015
$000s
56,985
(55,468)
227
(1,069)
427
60,047
(57,751)
190
(916)
(932)
Net cash provided by (used in) operating activities
24a
1,102
638
Cash Flows from Investing Activities
Proceeds from sale of plant & equipment
Purchase of plant & equipment
Net cash on acquisition/disposal of subsidiaries
Net cash provided by (used in) investing activities
Cash Flows from Financing Activities
Dividends paid
Proceeds from borrowings
Repayment of borrowings
Proceeds from share placement
Net cash provided by (used in) financing activities
Net increase in cash held
Net cash at the beginning of the financial year
Net cash at the end of the financial year
9
12
(981)
(1,464)
(2,433)
(47)
1,573
(3,126)
3,971
2,371
1,040
4,618
5,658
32
(649)
(9,366)
(9,983)
(2,874)
10,476
(1,472)
-
6,130
(3,215)
7,833
4,618
The accompanying notes form part of these financial statements.
- 18 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
This 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 (AASB) and the Corporations Act 2001.
The financial report includes the consolidated financial statements of Academies Australasia Group Limited
and controlled entities (the Group). Details of the parent entity can be found in Note 28 on page 48.
Academies Australasia Group Limited is a listed public company, incorporated and domiciled in Australia.
The Group is a for profit entity for financial reporting purposes under Australian Accounting Standards which
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.
New, revised or amending Accounting Standards and Interpretations
The Group has adopted all of the new, revised or amending Accounting Standards and Interpretations issued
by the AASB that are mandatory for the current reporting period.
Except for the early-adoption of AASB 15 ‘Revenue from Contracts with Customers’, referenced below, no
other new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have been
adopted early.
AASB 16: Leases (applicable to annual reporting periods beginning on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB
117: Leases and related Interpretations. AASB 16 introduces a single lessee accounting model that eliminates
the requirement for leases to be classified as operating or finance leases.
The main changes introduced by the new Standard include:
-
recognition of a right-to-use asset and liability for all leases (excluding short-term leases with less than
12 months of tenure and leases relating to low-value assets);
- depreciation of right-to-use assets in line with AASB 116: ‘Property, Plant and Equipment’ in profit or
loss and unwinding of the liability in principal and interest components;
- variable lease payments that depend on an index or a rate are included in the initial measurement of the
lease liability using the index or rate at the commencement date;
- by applying a practical expedient, a lessee is permitted to elect not to separate non-lease components
and instead account for all components as a lease; and
- additional disclosure requirements.
The transitional provisions of AASB 16 allow a lessee to either retrospectively apply the Standard to
comparatives in line with AASB 108 or recognise the cumulative effect of retrospective application as an
adjustment to opening equity on the date of initial application.
Although the directors anticipate that the adoption of AASB 16 will impact the Group's financial statements,
it is impracticable at this stage to provide a reasonable estimate of such impact.
- 19 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Bases of preparation
Except as noted below in respect of the early-adoption of AASB 15, the accounting policies set out below have
been consistently applied to all years presented.
The financial report has been prepared on the accruals basis and is based on historical costs, modified by the
revaluation of certain non-current assets, financial assets and financial liabilities, for which the fair value basis
of accounting has been applied. The financial report is presented in Australian Dollars and rounded to the
nearest thousand dollars in accordance with Instrument 2016/191.
Early-adoption of AASB 15 ‘Revenue from Contracts with Customers’ and re-statement of comparative
amounts
With effect from 1 July 2014, the consolidated entity has early-adopted the new Accounting Standard AASB
15 ‘Revenue from Contracts with Customers’. This Standard applies to annual reporting periods beginning on
or after 1 January 2017 and it may be applied to annual reporting periods beginning on or after 1 January 2005.
The consolidated entity, in adopting the new AASB 15, changed its basis for recognising income in accordance
with that standard. The change follows analysis of the Group’s contracts with its customers, the rights and
obligations emanating from those contracts and the possible risks associated with receiving payments for
revenue generating contractual services provided by the Group. In making its assessments, the Group formed
its opinion for the appropriate accounting based on its business judgement and careful consideration of the
customer contract.
Each contract was broken down into performance obligations and revenue to be recognised as those
performance obligations are completed.
Revenue is recognised over the period of tuition, upon completion of specific performance obligations of each
of the contracts. No revenue is recognised prior to a student commencing the tuition phase of delivery. As all
student contracts are for the provision of tuition, income for tuition is recognised as training is provided.
Payment terms vary from contract to contract but in most cases cash is received prior to the performance
obligation being delivered. Foreign students in particular are required to pay some level of tuition in advance.
Monies received in advance are held as unearned income and recognised as revenue as the performance
obligations are satisfied. Generally, the Group’s obligations in respect of refunds cease after the course
commences. Some refunds are issued after commencement in hardship cases or where visas have been refused.
The adoption of the requirements of AASB 15 provides more relevant information concerning the delivery of
services and the transfer of risks in providing the services.
Early-adopting the new Standard had no effect upon the Cash Flow Statements.
- 20 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Accounting Policies
Basis of consolidation
a.
The consolidated financial statements incorporate all of the assets, liabilities and results of the parent
(Academies Australasia Group Limited) and all its subsidiaries (including any structured entities). Subsidiaries
are entities the parent controls. The parent controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over
the entity. A list of the subsidiaries is provided in Note 13 on page 35.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group from the date on which control is obtained by the Group. The consolidation of a subsidiary is
discontinued from the date that control ceases. Intercompany transactions, balances and unrealised gains or
losses on transactions between group entities are fully eliminated on consolidation. Accounting policies of
subsidiaries have been changed and adjustments made where necessary to ensure uniformity of the accounting
policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-
controlling interests”. The Group initially recognises non-controlling interests that are present ownership
interests in subsidiaries and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at
either fair value or at the non-controlling interests’ proportionate share of the subsidiary’s net assets.
Subsequent to initial recognition, non-controlling interests are attributed their share of profit or loss and each
component of other comprehensive income. Non-controlling interests are shown separately within the equity
section of the statement of financial position and statement of comprehensive income.
Business combinations
b.
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 is 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).
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.
Cash and cash equivalents
c.
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.
- 21 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Trade and other receivables
d.
Trade and other receivables include amounts due from customers for services performed in the ordinary course
of business. Receivables expected to be collected within 12 months of the end of the reporting period are
classified as current assets. All other receivables are classified as non-current assets.
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any provision for impairment. Refer to Note 10 on page 33 for further
information on the determination of impairment losses.
Financial instruments
e.
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.
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 instruments
e.
Classification and Subsequent Measurement
Financial assets at fair value through profit or loss
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.
Loans and receivables
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.
- 22 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Available-for-sale investments
iii.
Available-for-sale investments are non-derivative financial assets that are either not capable of being
classified into other categories of financial assets due to their nature or they are designated as such by
management. They comprise investments in the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
They are subsequently measured at fair value with any re-measurements other than impairment losses
and foreign exchange gains and losses recognised in other comprehensive income. When the financial
asset is derecognised, the cumulative gain or loss pertaining to that asset previously recognised in
other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are classified as non-current assets when they are expected to be
sold after 12 months from the end of the reporting period. All other available-for-sale financial assets
are classified as current assets.
Financial Liabilities
iv.
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost using the effective interest rate method.
Derivative instruments
The Group has no derivative instruments at reporting date.
Fair value
The only financial asset or liability carried at fair value is investments. Fair value is determined by a number
of market and observable factors, including quoted prices, market activity levels, the financial position and
performance of the investment and the relative size of the Group’s shareholding. They are categorised as a
Level 1 in the fair value hierarchy of the Accounting Standards (market inputs are used to determine fair
value).
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 15: ‘Revenue’. Where the entity gives guarantees in
exchange for a fee, revenue is recognised under AASB 15.
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.
Interest borrowing costs
Interest payable costs are recognised as expenses in the period in which they are incurred.
- 23 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
Leases
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
f.
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 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.
Operating lease rental payments are recognised on a straight line basis over the lease term and contingent rental
payments are recognised in the period when incurred.
Assets receivable under lease incentives are recognised when the Group has a contractual right to them and
they can be reliably estimated. Where applicable, specific categories of assets received under such
arrangements are recognised in the appropriate asset heading and accounted for in accordance with the Group’s
applicable accounting policy for that asset.
Lease incentives under operating leases are recognised as a liability and amortised as a reduction in rent on a
straight-line basis over the lease term, unless another systematic basis is more representative of the time pattern
in which the economic benefits from the leased asset are consumed.
Plant and equipment
g.
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.
Depreciation
h.
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 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%
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 statement of
comprehensive income.
- 24 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
Goodwill
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
i.
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
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.
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.
Intangible assets
j.
Intangible assets include course development costs and other intangible assets.
Course development costs are capitalised where they can be related to the development of an identifiable and
separable resource and which yields particular streams of future economic benefits. They are only capitalised
when technical feasibility studies identify that the project is expected to deliver future economic benefits and
these benefits can be measured reliably. These capitalised costs are amortised over their useful lives starting
from the time the development of a particular resource is complete and available for use.
- 25 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
Impairment of assets
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
k.
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 statement of comprehensive income.
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.
Trade and other payables
l.
Trade and other payables represent the liabilities for goods and services received by the entity that remain
unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts
normally paid within 30 days of recognition of the liability.
Provisions and employee benefits
m.
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are measured at the present value of management’s best estimate of the expenditure required to
settle the present obligation at the balance sheet date. If the effect of the time value of money is material,
provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and, where appropriate, the risks specific to the liability.
Provision is made for the Group’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.
Issued capital
n.
Ordinary shares are classified as equity, and are recognised at the fair value of the consideration received by
the company. Incremental costs directly attributable to the issue of new shares are shown in equity as a
deduction, net of tax, from the proceeds.
- 26 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
Revenue
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
o.
Revenue derived from the provision of education services is measured at the fair value of consideration
received or receivable to the extent that economic benefits will flow to the Group and the revenue can be
reliably measured. A number of criteria must be met before revenue is recognised. No revenue is recognised
prior to a student commencing the tuition phase of delivery. Revenue is recognised over the duration of each
agreement to provide education services.
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.
Rental revenue is recognised on a straight line accrual basis over the term of the lease.
All revenue is stated net of the amount of goods and services tax (GST).
p. 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.
Income tax
q.
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 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. 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.
- 27 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Foreign currency transactions and balances
r.
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.
Foreign 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.
Earnings per share
s.
Basic earnings per share are calculated as net profit attributable to members of the parent divided by the
weighted average number of ordinary shares.
Comparative figures
t.
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
Critical accounting estimates and judgements
u.
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 16 on page 38. No
impairment has been recognised in respect of goodwill for the year ended 30 June 2016.
Key Estimates – Revenue
The extent to which performance obligations have been satisfied in respect of student revenue is estimated as
per the revenue policy (Note 1(o) on page 27).
- 28 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
1. STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
v. Segment reporting
An operating segment is a component of an entity
-
that engages in business activities from which it may earn revenues and incur expenses (including
revenues and expenses relating to transactions with other components of the same entity)
- whose operating results are regularly reviewed by the entity’s Board to make decisions about resources
to be allocated to the segment and assess its performance
for which discrete financial information is available
-
The Company has only one operating segment, Education.
w. Going concern
These financial statements have been prepared adopting the going concern assumption, which
contemplates the orderly realisation of assets and payment of liabilities in the ordinary course of business.
The financial statements show that:
-
-
-
the Group had a net loss of $4,312,000 (2015: profit $173,000) for the year ended 30 June 2016;
the Group had net current liabilities of $15,694,000 (2015: net current liabilities of $4,475,000) as at
30 June 2016;
the Group did not have an unconditional right to defer repayment of its bank facilities beyond 12
months as at 30 June 2016 and, as a result, has classified all bank facilities as current liabilities as at
that date.
These conditions indicate the existence of a material uncertainty that may cast significant doubt about the
Group’s ability to continue as a going concern and, therefore, the Group may be unable to realise its assets
and discharge its liabilities in the normal course of business.
The appropriateness of this assumption is dependent upon:
-
-
-
-
the continued support of the Group’s bankers;
the continued support of the Group’s majority shareholders who have extended loans to the Group;
the ability of the Group to return to profitable trading;
the orderly realisation of selected assets in the ordinary course of business at values at least equal to
their book values.
The Board is currently satisfied that these issues have been addressed and that there are reasonable grounds
to assume that the Company will meet its future financial obligations as and when they fall due.
The following factors support this assumption:
- Positive cash flow for the year of $1,040,000.
- Positive cash flow from operations for the year of $1,102,000.
- Substantial cash holdings across the Group of $8,068,000 of which $6,997,000 million is required to
be held in the TPS controlled accounts.
- Repayment of $3,126,000 of bank debt during the year and servicing of all debt interest obligations.
- As at 30 June 2016, bank debt (excluding contingent facilities) had been reduced to $12,302,000.
Since that date it has been reduced to $11,420,000. Annually, $3,126,000 is amortised.
- Positive net assets of $25,088,000.
- Support of majority shareholders through short-term loans extended to the Group during the year.
- Non-core assets in excess of $2,000,000 are available to reduce the level of debt.
-
In the latter part of the year, significant efforts were made to rationalise the cost structures of the
business. As a result, more than $4,000,000 will be saved annually.
Included in net current liabilities are tuition fees paid in advance, of $14,708,000. This is not an amount
payable in the ordinary course of business. It will be recognised as income as tuition is delivered.
-
- 29 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
2. REVENUE
Operating activities
- Services revenue
Non-operating activities
- Rent received
Interest received
Total Revenue
2016
$000s
2015
$000s
54,985
56,755
-
227
109
81
55,212
56,945
Revaluation of investment (Note 12)
(1,163)
606
3. PROFIT FOR THE YEAR
Student acquisition and teaching costs
- Teaching costs
- Agency commission
- Teaching materials
Personnel costs
- Wages and Salaries
- Superannuation
- Payroll Tax
- Other
Premises
- Rental
- Electricity
- Cleaning
- Other
- Expansion
Other administration expenses
- Other administration expenses
- Bad debts
- Acquisition (of subsidiaries) costs
Restructure and re-organisation costs
- Costs of personnel now retrenched, including redundancies
- Costs of premises now vacated, including make-good payments
- Costs of marketing and other projects discontinued or cancelled
- 30 -
16,152
7,612
1,595
25,359
11,352
1,483
881
705
14,421
7,301
353
432
343
-
8,429
5,033
123
-
5,156
2,392
404
796
3,592
15,699
7,423
1,045
24,167
14,199
1,379
857
750
17,185
6,042
305
383
357
502
7,589
5,437
308
150
5,895
436
-
232
668
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
Note
2016
$000s
2015
$000s
4. INCOME TAX EXPENSES
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:
Tax payable on (loss)/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
Less: Over provision previous year
Add: Tax balance subsidiary acquired
Less: Tax paid
Closing provision
11
(72)
1,639
1,567
(116)
677
561
(1,764)
(116)
50
147
(1,567)
(399)
62
13
-
385
61
(104)
(341)
(561)
297
215
(99)
120
(932)
(399)
5. EXECUTIVE DIRECTORS AND OTHER SENIOR EXECUTIVES COMPENSATION
a. Details of Executive Directors and other Senior Executives has been set out in Information on Directors and in
Information on Senior Executives on pages 8 to 10.
b. Remuneration for Senior Executives has been included in the Remuneration Report section of the Directors’
Report.
Shareholdings
c.
Number of shares in the Company held by Executive Directors, Senior Executives and parties related to them:
Shareholdings: Executive Directors
and Senior Executives
Balance
1 July 2015
Purchased
(i)
Sold
(i)
Rights Issue
(ii)
Balance
30 June 2016
Christopher Elmore Campbell
Gabriela Rodriguez Naranjo
Chris Grundy
7,777,777
808,483
(1,113,386)
1,688,096
9,160,970
25,000
-
17,972
33,333
-
-
5,357
-
48,329
33,333
(i)
(ii)
Shares purchased/(sold) on market via the Australian Securities Exchange.
Shares taken up from Rights Issue 16 November 2015.
As at 1 July 2015, Gary William Cobbledick had an interest in 4,933,041 shares. His interests were allotted 684,227
shares in the Rights Issue. He resigned as a Director on 14 January 2016.
On 15 July 2016 Melinda Burgess became a Senior Executive. As at 30 June 2016, she held 11,936 shares. On 23
August 2016, her holding increased by 800,000 shares – see Note 25 on page 45.
- 31 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
6. AUDITORS’ REMUNERATION
Remuneration of the auditors of the parent entity for:
- Auditing and reviewing the financial report
- Taxation services
- Due diligence and other services
Remuneration of other auditors of subsidiaries for:
- Auditing and reviewing the financial report
- Taxation services
- Other services
7. EARNINGS PER SHARE
2016
$000s
2015
$000s
180
66
278
524
33
2
1
36
193
72
33
332
35
8
9
52
Basic (cents per share)
(6.0)
0.0
Weighted average number of ordinary shares used in calculation of basic
earnings per share
70,312,078
61,538,998
a. The earnings amount used was $4,226,000 (2015: loss $3,000), being loss on ordinary activities after tax
attributable to owners of the parent entity.
8. DIVIDENDS
Distributions recognised
Year ended 30 June 2016 interim ordinary dividend of 0 cents per share,
fully franked, (2015: 1.5 cents fully franked)
Year ended 30 June 2015 final ordinary dividend of 3.0 cents per share,
fully franked, paid in 2016 (2014 3.0 cents fully franked paid in 2015)
2016
$000s
2015
$000s
-
-
-
931
1,862
2,793
a.
Balance of franking account at year end adjusted for franking credits
arising from payment of income tax
3,020
2,891
- 32 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
9. CASH AND CASH EQUIVALENTS
Cash at bank and on hand
8,068
7,078
2016
$000s
2015
$000s
The balance on the overdraft account is $2,410,000 (2015: $2,460,000) (Note 18). The net cash position is $5,658,000
(2015: $4,618,000)
Included in the above amounts are tuition fees held in Tuition Protection Scheme (TPS) accounts in Australia.
In 2012 the Education Services for Overseas Student Act 2000 (“ESOS Act”) was amended to provide additional
protection for international students studying in Australia. With effect from 1 July 2013, the Group is required to
maintain, in Australia, separate bank accounts (TPS accounts) for prepaid fees received from international students prior
to commencement of their course. Once the students commence their course, the funds may be transferred from the TPS
accounts to operating cash reserves. At all times, the Group must ensure that there are sufficient funds in the TPS accounts
to repay any prepaid tuition fees to international students who have not yet commenced their course. Fees paid by
students who have commenced their course are deposited directly to operating cash reserves. All fees received, whether
deposited to TPS or Group cash reserves are initially accounted for as unearned income, being subject to the Group’s
revenue recognition policy.
As at 30 June 2016, the Group held $6,997,000 (2015: $5,283,000) in TPS accounts.
10. TRADE AND OTHER RECEIVABLES
CURRENT
Trade receivables
Receivable from the sale of Premier Fasteners
Lease incentives
Other receivables
NON-CURRENT
Receivable from the sale of Premier Fasteners
Lease incentives
TOTAL
Trade receivables
Receivable from the sale of Premier Fasteners
Lease incentives
Other receivables
2016
$000s
2015
$000s
4,043
937
304
3,447
8,731
938
2,080
3,018
4,043
1,875
2,384
3,447
11,749
4,987
937
304
2,656
8,884
1,876
2,677
4,553
4,987
2,813
2,981
2,656
13,437
- 33 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
10. TRADE AND OTHER RECEIVABLES (continued)
a. The ageing analysis of trade receivables is as follows:
0 -30 days
31- 60 days – not impaired *
61- 90 days – not impaired *
Over 90 days – not impaired *
2016
$000s
2015
$000s
1,360
747
312
1,624
4,043
2,417
609
440
1,521
4,987
* 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 Group has an exposure to credit risk in Singapore and Australia given the Group’s operations in those
countries. For the Financial Year to June 2016, there is no amount included in trade and other receivables in
respect of the business operations in Singapore. All other receivables of the Group are exposures in Australia.
c. The receivable from the sale of Premier Fasteners is over 2 years in accordance with the terms of the contract for
the sale.
11. OTHER ASSETS
CURRENT
Prepayments and accrued income
Security deposits
Current tax asset
12. INVESTMENTS
CURRENT
Shares in Listed Corporations
2016
$000s
2015
$000s
3,857
706
-
4,563
3,225
472
399
4,096
2,060
2,060
3,224
3,224
- 34 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
13. CONTROLLED ENTITIES
Academies Australasia Group Limited (Ultimate Parent Entity)
Subsidiaries (controlled directly or indirectly)
ACA Investment Holdings Pte. Limited
Academies Australasia (Management) Pty Limited
Academies Australasia College Pte. Limited
Academies Australasia Institute Pty Limited
Academies Australasia Polytechnic Pty Limited
Academies Australasia Pty Limited
Academy of English Pty Limited
AKG Investment Holdings Pty Limited
AKG2 Investment Holdings Pty Limited
AKG3 Investment Holdings Pty Limited
AKG4 Investment Holdings Pty Limited
AKG5 Investment Holdings Pty Limited
AKG6 Investment Holdings Pty Limited
AKG7 Investment Holdings Pty Limited
AMI Education Pty Limited
Australian College of Technology Pty Limited
Australian Institute of Professional Studies Pty Limited
Australian International High School Pty Limited
Australian Trades Institute Pty Limited
Benchmark Resources Pty Limited T/A Benchmark College
Centre for Australian Education Pte. Limited
Clarendon Business College Pty Limited
DFL Education (Qld) Pty Limited T/A Brisbane School of Hairdressing, Gold Coast
School of Hairdressing, Brisbane School of Beauty and Brisbane School of Barbering
Discover English Pty Limited
International College of Capoeira Pty Limited T/A College of Sports & Fitness
Humanagement Pty Limited T/A Print Training Australia
Kreate Pty Limited T/A RuralBiz Training
Language Links International Pty Limited
Live. Laugh. Learn. Pty Limited
Newco CLB Training & Development Pty Limited as trustee for the CLB Unit
Trust T/A Spectra Training
Skilled Placements Pty Limited
Supreme Business College Pty Limited
Transformations – Pathways to Competence and Developing Excellence Pty
Limited T/A Skills Training Australia
Vostro Institute of Training Australia Pty Limited
- 35 -
Country of
Incorporation
Percentage
Owned/Controlled
(%)
2016
2015
Singapore
Australia
Singapore
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
51
75
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
51
100
51
75
100
100
100
100
100
100
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
14. PLANT AND EQUIPMENT
2016
$000s
2015
$000s
Plant and equipment
At cost
Accumulated depreciation
Leasehold improvements
At cost
Accumulated amortisation
Leased plant and equipment
Capitalised leased assets
Accumulated depreciation
Total plant & equipment
Year ended 30 June 2016
$000s
$000s
Plant and
equipment
Leasehold
improvements
Balance at the beginning of the year
Additions
Acquisitions
Transfers
Disposals
Depreciation expense
Net foreign currency difference arising on
translation of financial statements of foreign
operations
Carrying amount at the end of the year
Year ended 30 June 2015
Balance at the beginning of the year
Additions
Acquisitions
Transfers
Disposals
Depreciation expense
Net foreign currency difference arising on
translation of financial statements of foreign
operations
Carrying amount at the end of the year
2,254
315
-
-
(12)
(652)
2
4,410
756
-
-
-
(845)
2
1,907
4,323
2,306
516
100
(82)
(130)
(465)
9
2,254
4,116
516
184
82
-
(492)
4
4,410
- 36 -
5,492
(3,585)
1,907
7,181
(2,858)
4,323
215
(152)
63
6,293
Leased
plant and
equipment
$000s
126
-
-
-
-
(63)
-
63
215
-
-
-
-
(89)
-
126
5,307
(3,053)
2,254
6,695
(2,285)
4,410
215
(89)
126
6,790
Total
$000s
6,790
1,071
-
-
(12)
(1,560)
4
6,293
6,637
1,032
284
-
(130)
(1,046)
13
6,790
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
15. DEFERRED TAX ASSETS / LIABILITIES
2016
$000s
2015
$000s
Future income tax benefit (liability)
3,459
1,820
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
3,881
(1,219)
797
3,459
3,261
(1,592)
151
1,820
Deferred Tax Assets
Provisions
Unearned income
Other
Deferred Tax Liabilities
Plant & equipment
Investments
Prepayments and other
Losses
Total
Opening
Balance
$000s
627
2,335
299
3,261
(270)
(868)
(454)
(1,592)
151
Charged To
Income
$000s
130
101
389
620
62
349
(38)
373
646
Closing
Balance
$000s
757
2,436
688
3,881
(208)
(519)
(492)
(1,219)
797
1,820
1,639
3,459
Deferred tax assets not brought to account, the benefits of which will only be
realised if the conditions for deductibility set out in Note 1(q) occur:
Tax losses:
-operating losses
2016
$000s
2015
$000s
524
524
- 37 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
16. INTANGIBLE ASSETS
Goodwill at cost
Accumulated impairment losses
Net carrying value
Course development costs
Accumulated amortisation
Net carrying value
Other at cost
2016
$000s
32,666
(382)
32,284
1,751
(1,168)
583
57
32,924
2015
$000s
32,663
(382)
32,281
1,590
(843)
747
69
33,097
Year ended 30 June 2016
Balance at the beginning of the year
Foreign exchange Academies Australasia College
Rebranding costs amortisation
Course development costs acquisition
Course development costs amortisation
Balance at the end of the year
Year ended 30 June 2015
Balance at the beginning of the year
Acquisition of Vostro Institute of Training
Acquisition of RuralBiz Training
Acquisition of Spectra Training
Acquisition of Language Links International
Acquisition Skills Training Australia
Foreign exchange Academies Australasia College
Rebranding costs amortisation
Course development costs acquisition
Course development costs amortisation
Balance at the end of the year
Goodwill
$000s
32,281
3
-
-
-
32,284
27,432
90
36
167
139
4,408
9
-
-
-
32,281
Course
Development Costs
$000s
Other
Total
$000s
$000s
747
-
-
158
(322)
583
1,188
-
-
(22)
-
-
-
-
54
(473)
747
69
-
(12)
-
-
57
150
(5)
-
(69)
-
-
-
(7)
-
-
69
33,097
3
(12)
158
(322)
32,924
28,770
85
36
76
139
4,408
9
(7)
54
(473)
33,097
The recoverable amount of each cash-generating unit is determined based on value in use calculations based upon 5
year forecasting. The model includes a sensitivity analysis allowing for a range of growth rates.
The following assumptions were used in the value in use calculations:
Education segment
5%
10%
2.5
Growth rate
Discount rate
Terminal Multiple
The growth rate is a long-term average growth rate.
The discount rate used reflects entity and market specific factors
Assuming that the Group achieves its budget for the year to 30 June 2017 (FY17), impairment would be triggered if: the
discount rate were to exceed 22%; or the growth rate were to be minus 8%; or the terminal value were to be less than 0.3.
Impairment would also be triggered in FY17 if the Group does not achieve certain minimum cash flows which are
significantly more than those achieved in the year to 30 June 2016 (FY16). The minimum cash flows depend upon:
- The benefits of the cost savings and restructurings implemented in FY16 being maintained into future financial years;
- The significant non-recurring costs and losses incurred in FY16 not recurring; and
- The Group not having negative revenue growth.
- 38 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
17. TRADE AND OTHER PAYABLES
CURRENT
Unsecured Liabilities
Trade payables
Tuition fees in advance
Sundry payables and accrued expenses
Payable to the vendor of STA (Note 25)
NON-CURRENT
Unsecured Liabilities
Payable to the vendor of STA
TOTAL
Trade payables
Tuition fees in advance
Sundry payables and accrued expenses
Payable to the vendors of STA
18. BORROWINGS
CURRENT
Secured Liabilities – Interest Bearing
Bank bills
Overdraft
Lease purchase agreements
Unsecured Liabilities – Interest Bearing
Director’s loans
Other loans
Unsecured Liabilities – Non - Interest Bearing
Other loans
TOTAL CURRENT
NON-CURRENT
Secured Liabilities – Interest Bearing
Bank bills
Lease purchase agreements
18a
18a
18a
18a
18a
18a
18a
18a
- 39 -
2016
$000s
2015
$000s
1,913
14,708
5,384
22,005
1,147
23,152
1,872
11,939
4,043
17,854
2,500
20,354
-
1,300
1,913
14,708
5,384
1,147
23,152
1,872
11,939
4,043
3,800
21,654
9,790
2,410
102
12,302
1,533
73
1,606
67
3,087
2,460
106
5,653
-
-
-
-
13,975
5,653
-
-
-
9,737
88
9,825
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
18. BORROWINGS (continued)
a. Total current and non-current secured liabilities:
Bank bills
Overdraft
Lease purchase agreements
b.
Total current and non-current unsecured liabilities:
Director’s loans
Other loans
Note
27
27
21, 27
27
27
c. The carrying amounts of non-current assets pledged as security are:
Floating charge over assets
Plant and equipment
2016
$000s
2015
$000s
9,790
2,410
102
12,302
1,606
67
1,673
12,824
2,460
194
15,478
-
-
-
42,816
63
42,879
41,182
125
41,307
d. The bank bills are secured by a floating charge over the assets of the parent entity and its wholly owned
subsidiaries (other than those in Note 22).
e. The lease purchase borrowings are additionally secured on the leased asset. The leases are due for repayment in
2017.
The major bank facilities comprise Bank overdraft, Cash Advance Facilities and Bank Guarantees
Bank overdraft facilities are arranged with the general terms and conditions being set and agreed annually. Interest
rates are variable and subject to adjustment.
The Group met all its payment obligations (principal and interest) to its bankers during the year. However, the Group
also incurred operating losses, following which its bankers reviewed the Group’s performance and financial position
and proposed variations to the facilities agreement. The required new facilities agreement was not received in time for
finalisation prior to the year end. A new facility letter of offer dated 30 June 2016 has subsequently been received but
it has not yet been executed.
All bank debt at 30 June 2016 is shown as current: at that date the Group did not have an unconditional right to defer
repayment of its bank facilities beyond 12 months.
The Group’s utilisation of bank facilities as at 30 June 2016 is shown in Note 24b on page 44.
- 40 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
19. PROVISIONS
CURRENT
Employee entitlements
Lease incentives
NON-CURRENT
Employee entitlements
Lease incentives
TOTAL
Employee entitlements
Lease incentives
20. SHARE CAPITAL
a.
Issued Share Capital
2016
$000s
1,370
558
1,928
1,001
3,911
4,912
2,371
4,469
6,840
2016
Share number
2016
$000s
2015
Share number
2015
$000s
1,191
559
1,750
914
4,184
5,098
2,105
4,743
6,848
2015
$000s
Ordinary shares fully paid
75,362,979
$36,504
62,063,484
$32,533
Ordinary share capital
Balance at the beginning of the financial year
62,063,484
$32,533
56,157,234
$25,446
Ordinary shares issued on 23 July 2014 on
acquisition of Spectra Training – 1st tranche
Ordinary shares issued on 1 October 2014 on
acquisition of Spectra Training – 2nd tranche
-
-
-
-
4,406,250
$5,287
1,500,000
$1,800
Rights Issue on 16 November 2015
13,299,495
$3,971
-
-
Balance at the end of the financial year
75,362,979
$36,504
62,063,484
$32,533
On 23 August 2016, 800,000 new ordinary shares in the Company were issued. See Note 25 on page 45.
- 41 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
20. SHARE CAPITAL (continued)
i. Shares disclosure.
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.
ii. Capital Management.
Management controls the capital of the Group in order to maintain an acceptable 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 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.
21. 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
Note
2016
$000s
2015
$000s
109
-
109
(7)
102
99
109
208
(14)
194
18a
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 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
2016
$000s
7,613
19,195
19,355
46,163
2015
$000s
6,417
13,463
15,809
35,689
The Group leases property under operating leases expiring from 1 year to 15 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. During the year, the Group acquired a number of new leases. Lease incentives have been recognised in
accordance with the Group’s accounting policies.
- 42 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
22. CONTINGENT LIABILITIES
Contingent Liabilities
Corporate Guarantee
There is a corporate guarantee between wholly-owned Group companies as security for bank facilities in effect during
the year. This guarantee does not currently include:
Academies Australasia College Pte. Limited
Centre for Australian Education Pte. Limited
DFL Education (Qld) Pty Limited
Kreate Pty Limited
Language Links International Pty Limited
Humanagement Pty Limited
International College of Capoeira Pty Limited
Bank Guarantees
As at 30 June 2016, bank guarantees issued on behalf of the Group amounted to $3,445,000. In the last executed facility
agreement with the Group’s bankers dated 11 February 2015, the guarantee facility limit was $3,700,000.
The Group has an offer to extend its financial arrangements dated 30 June 2016. This offer has not yet been executed.
23. SEGMENT REPORTING
Business segments
The Company has determined that it has only one operating segment, education.
Geographical information
The Group operates in Australia and Singapore. The revenues and non-current assets of the Group for the year ended 30
June 2016 are as follows:
Geographic Location
Revenues from External Customers
Non-current assets
$000s
Australia
50,498
45,228
A$000s
Singapore
4,714
466
Accounting Policies
Segment revenues and expenses are those directly attributable to the segments.
- 43 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
24. CASH FLOW INFORMATION
a. Reconciliation of cash flow from operations with profit after
income tax
Profit after income tax
(4,312)
173
2016
$000s
2015
$000s
Non-cash flows in profit (loss)
Amortisation
Depreciation
Net (profit)/loss on disposal of plant and equipment
Write-downs to recoverable amounts
Unrealised loss/(gain) on investments
Unrealised foreign exchange movement
Changes in assets and liabilities
(Increase)/decrease in trade and other receivables
(Increase)/decrease in other current assets
(Increase)/decrease in investments
(Increase)/decrease in intangibles
(Increase)/decrease in deferred tax assets
Increase/(decrease) in trade and other payables
Increase/(decrease) in tax payables
Increase/(decrease) in provisions
Cash flow from operations
b. Borrowing arrangements with banks
Total Facilities
Cash advance facilities available as at 30 June 2015 (i)
Amounts repaid during the year ended 30 June 2016
Amount utilised
Overdraft facility available as at 30 June 2015 (i)
Amount utilised
1,167
715
-
123
1,163
(27)
418
(866)
-
(26)
(1,639)
3,934
460
(8)
1,102
14,472
(3,034)
(9,790)
1,648
2,500
(2,410)
90
965
554
(4)
308
(606)
12
611
(1,057)
-
27
(677)
1,689
(816)
(541)
638
14,472
-
(12,824)
1,648
2,500
(2,460)
40
(i) Facility limits are based upon the position at the start of the year in
accordance with the last executed facility agreement with the Group’s
bankers dated 11 February 2015 and adjusted for subsequent
repayments
Further details on bank borrowings are provided in Note 18 on page 39
The Group has an offer to extend its financial arrangements dated 30 June 2016. This offer has not yet been executed.
- 44 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
25. EVENTS AFTER THE BALANCE SHEET DATE
All debt at 30 June 2016 is shown as current: at that date the Group did not have an unconditional right to defer repayment
of its bank facilities beyond 12 months. The Group has an offer to extend its financial arrangements dated 30 June 2016.
This offer has not yet been executed.
On 23 August 2016, the Company issued 800,000 new fully-paid ordinary shares in respect of an agreement with the
vendor of Skills Training Australia, for the third tranche payment (‘the Final Payment’) to comprise:
-
- 60% of the Final Payment (less $200,000) to be paid by 28 February 2017; and
-
the issue of 800,000 new AKG shares, representing settlement of $200,000 of the Final Payment; and
the balance of the Final Payment to be paid by 30 June 2017.
There were no other matters or circumstances that have arisen since the end of the financial year which significantly
affected or may significantly affect the operations of the Group, the results of those operations, or the state of affairs of
the Group in subsequent financial years.
26. RELATED PARTY TRANSACTIONS
Directors’ transactions with the Company and the Group
Details of Directors’ remuneration are set out in the Remuneration Report on page 11. Directors are reimbursed for
expenses incurred by them on behalf of the Group.
Directors’ loans
From 25 August to 16 November 2015, all Directors having an interest in shares in the Company provided loans to the
Company amounting to $2,639,200 in total. For details see page 6. Interest on the loans paid to these Directors during
the financial year amounted to $45,000.
In September 2015 the shareholders of International College of Capoeira Pty Limited, a 51% owned subsidiary company
of the Company, extended loans totalling $150,000 to the subsidiary. The minority shareholders, Messrs Julio Chavez
and Andre Cerutti, who are directors of the subsidiary, each extended loans of $36,750. Interest on the loans paid to these
Directors during the financial year amounted to $4,000.
Commencing 12 March 2016 and to the date of this report, two Directors, Messrs Chiang Meng Heng and Christopher
Campbell, provided loans to the Company amounting to $1,000,000 and $500,000 respectively. For details see page 7.
Interest on the loans accrued and payable to these Directors during the financial year amounted to $33,000.
All the loans by Directors noted above incur interest at the prevailing ANZ Bank rate applicable to the Company’s
overdraft facility.
Other loans of $67,000 disclosed in Note 18(b) comprise dividends payable as at 30 June 2016 to a director of Kreate Pty
Limited, a 51% owned subsidiary of the Company. The director is also the non-controlling shareholder of that subsidiary.
No interest is accrued or payable on this loan.
Directors’ and specified executives’ relevant interests in shares
Details of Directors’ relevant interests in shares are set out in the Directors’ Report on pages 8 and 9.
- 45 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
26. RELATED PARTY TRANSACTIONS (continued)
Other related party transactions
Transactions between the Company and controlled entities comprise loans, management fees and interest and are
eliminated on consolidation.
27. FINANCIAL INSTRUMENTS
a. Financial Risk Management
The Group’s financial instruments consist mainly of deposits with banks, investments, 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 operations.
i.
Treasury Risk Management
Senior management meets 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 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 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 Group had
not hedged foreign currency transactions as at 30 June 2016. Senior management continues to evaluate this
risk on an ongoing basis.
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
Interest rate risk
The 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:
- 46 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
27. FINANCIAL INSTRUMENTS (continued)
Note Weighted Floating Fixed interest maturing in: Non-
Interest
bearing
1 year
or less
1 to 5
years
interest rate
Total
$000s
$000s
$000s
$000s
$000s
average
interest
rate
2.86%
8,068
-
8,068
-
-
-
Year ended 30 June 2016
Financial assets
Cash and cash
equivalents
9
Trade and other
receivables
Financial liabilities
Trade and other
payables
Bank bills
Overdraft
Lease purchase
agreements
Director’s loans
Other loans
10
17
18
18
18
18
Year ended 30 June 2015
Financial assets
Cash and cash
equivalents
Trade and other
receivables
10
9
3.43%
7.09%
5.19%
1.18%
Financial liabilities
Trade and other
payables
Bank bills
Overdraft
Lease purchase
agreements
17
18
5.75%
7.17%
18
5.46%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,737
-
88
9,825
-
8,068
11,749
11,749
11,749
19,817
23,152
-
-
-
-
67
23,219
23,152
9,790
2,410
102
1,533
140
37,127
-
7,078
13,437
13,437
13,437
20,515
20,354
-
-
-
20,354
20,354
12,824
2,460
194
35,832
-
-
-
-
-
-
-
-
9,790
2,410
102
1,533
73
13,908
7,078
-
7,078
-
-
-
-
-
-
-
-
-
3,087
2,460
106
5,653
- 47 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
27. FINANCIAL INSTRUMENTS (continued)
ii.
Net fair values of financial assets and liabilities
The carrying amounts of financial assets and liabilities approximate their net fair value.
iii.
In addition, the Group holds investments recognised at fair value of $2,060,000 (2015: $3,224,000). The
basis for fair value is disclosed in Note 1.
iv.
Sensitivity Analysis
The following table illustrates sensitivity analysis to the Group’s exposure to changes in interest rates. The
table indicates the estimated impact on how profit and equity values reported at the end of the reporting
period would have been affected by changes in the interest rate that management considers reasonably
possible.
2016
+/- 2% in interest rates
28. PARENT INFORMATION
Profit
$
(462)
Equity
$
(462)
The following information has been extracted from the books of the parent and has been prepared in accordance with
Australian Accounting Standards
STATEMENT OF FINANCIAL POSITION
2016
$000s
2015
$000s
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current Liabilities
Non-current liabilities
Total Liabilities
Equity
Share capital
Retained earnings
Total Equity
STATEMENT OF COMPREHENSIVE INCOME
Total profit
Total comprehensive income
29,959
5,217
35,176
2,433
732
3,165
36,504
(4,493)
32,011
318
318
23,641
4,963
28,603
233
647
880
32,534
(4,811)
27,723
3,672
3,672
- 48 -
ACADEMIES AUSTRALASIA GROUP LIMITED
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
29. COMPANY DETAILS
The registered office and principal place of business of Academies Australasia Group Limited is:
Level 6, 505 George Street
Sydney NSW 2000
Australia
Principal places of business of the Group:
NEW SOUTH WALES
VICTORIA
Academies Australasia Institute
Academy of English
Australian College of Technology
Australian International High School
Clarendon Business College
Supreme Business College
Level 6, 505 George Street
Sydney, NSW 2000
Benchmark College
140 Henry Street, Penrith, NSW 2750
College of Sports & Fitness
12 Wentworth Avenue, Darlinghurst, NSW 2010
Academies Australasia Polytechnic
Level 7, 628 Bourke Street
Melbourne,VIC 3000
Discover English
247 Collins Street, Melbourne, VIC 3000
Spectra Training
100 Dorcas Street, Melbourne, VIC 3205
Vostro Institute
Level 15, 459 Little Collins Street,
Melbourne, VIC
RuralBiz Training
46 Wingewarra Street, Dubbo, NSW 2830
Skills Training Australia
Level 2, 2 Capital City Boulevard
Knox Ozone, Wantirna, South VIC 3152
QUEENSLAND
SOUTH AUSTRALIA
Brisbane School of Hairdressing
Brisbane School of Beauty
Brisbane School of Barbering
Queen Adelaide Building
90-112 Queen Street Mall
Brisbane, QLD 4000
Gold Coast School of Hairdressing
Shop 103, Pivotal Point Commercial,
50 Marine Parade
Southport, QLD 4215
Print Training Australia
Unit 17, 169 Unley Road, Unley, SA 5061
WESTERN AUSTRALIA
Language Links
90 Beaufort Street, Perth, WA 6000
SINGAPORE
Academies Australasia College
45 Middle Road, Singapore 1889954
- 49 -
ACADEMIES AUSTRALASIA GROUP LIMITED
AND CONTROLLED ENTITIES
DIRECTORS DECLARATION
The Directors of the Company declare that:
1.
the financial statements and notes, set out on pages 15 to 49, are in accordance with the Corporations Act
2001 and
(i) comply with Accounting Standards which, as stated in accounting policy Note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting
Standards (IFRS); and
(ii) give a true and fair view of the financial position as at 30 June 2016 and of the performance for the
year ended on that date of the Company and consolidated group;
2. The Chief Executive Officer and Chief Financial Officer have each declared that:
(i)
the financial records of the Company and the consolidated group for the financial year have been
properly maintained in accordance with s 286 of the Corporations Act 2001;
(ii) the financial statements and notes for the financial year comply with Accounting Standards; and
(iii) the financial statements and notes for the financial year give a true and fair view; and
3. Without qualifying their opinion, the Directors draw attention to the facts set out in Note 1(w) on page 29
and in their opinion, there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.
The Company and wholly-owned subsidiaries identified in Note 13 on page 35, but excluding those in Note
22 on page 43, have entered into a deed of cross guarantee under which the Company and its subsidiaries
guarantee the debts of each other.
At the date of this declaration, there are reasonable grounds to believe that the companies which are party to
this deed of cross guarantee will be able to meet any obligations or liabilities to which they are, or may become
subject to, by virtue of the deed.
This declaration is made in accordance with a resolution of the Board of Directors.
Dr John Lewis Schlederer
Director
31 August 2016
Christopher Elmore Campbell
Director
- 50 -
PILOT PARTNERS
Chartered Accountants
Level 10, Waterfront Pbce
1 Eagle St. Brisbane 4000
PO Box 7095 Brisbane 4001
Queensland Australia
P+61 7 3023 1300
F+61 7 3229 1227
pilotpartners. com. au
INDEPENDENT AUDIT REPORT TO THE MEMBERS OF
ACADEMIES AUSTRALASIA GROUP LIMITED
REPORT ON THE FINANCIAL REPORT
We have audited the accompanying financial report of Academies Australasia Group Limited (the
company) and its controlled entities (the consolidated group), which comprises the consolidated
statement of financial position as at 30 June 2016, and the consolidated statement of comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of cash
flows for the year ended on that date, a summary of significant accounting policies and other
explanatory notes and the directors' declaration of the consolidated entity comprising the company
and the entities it controlled at the year's end or from time to time during the financial year set out
on pages 15 to 50.
DIRECTORS'RESPONSIBILITY FOR THE FINANCIAL REPORT
The directors of the company are responsible for the preparation and fair presentation of the
financial report in accordance with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Act 2001. This responsibility includes establishing
and maintaining internal control relevant to the preparation and fair presentation of the financial
report that is free from material misstatement, whether due to fraud or error; selecting and applying
appropriate accounting policies; and making accounting estimates that are reasonable in the
circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB
101: Presentation of Financial Statements, that compliance with the Australian equivalents to
International Financial Reporting Standards (IFRS) ensures that the financial report, comprising the
financial statements and notes, complies with IFRS.
AUDITOR'S RESPONSIBILITY
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. These Auditing Standards require that
we comply with relevant ethical requirements relating to audit engagements and plan and perform
the audit to obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor's judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or
error.
In making those risk assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the financial report in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of accounting estimates made by the directors,
as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
-51-
ABN 60 063 687 769 I ?i'. jt :J a reE:sl :nrcd trade m^rk Ei ce-. sed -o Pilot PiL. rtners | Lia[:''ity lim.^d by a schcr. e approved L ider Pr3<'ossJont. ' StE. idi. rJs Legislation
Member of Nexia International, s worldwide network of independent accounting and consulting firms.
INDEPENDENCE
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001. We have given the directors of the company a written auditor's independence declaration,
a copy of which is included in the directors' report.
AUDITOR'S OPINION
In our opinion:
(a)
the financial report of Academies Australasia Group Limited and its controlled entities is in
accordance with the Corporations Act 2001, including:
i.
giving a true and fair view of the consolidated group's financial position as at 30 June
2016 and of its financial performance and its cash flows for the year ended on that date;
and
ii.
complying with Australian Accounting Standards (including the Australian Accounting
Interpretations); and
(b)
the financial report also complies with International Financial Reporting Standards as
disclosed in Note 1.
EMPHASIS OF MATTER
Without modifying our opinion, we draw attention to Note l(w) in the financial report, which
indicates that the Group incurred a net loss of $4. 312m during the year ended 30 June 2016, and
as of that date, the Group's current liabilities exceed its current assets by $15. 694m, We also draw
attention to the fact that the Group did not have an unconditional right to defer repayment of its
bank facilities beyond 12 months as at 30 June 2016 and has consequently classified all bank
facilities as current liabilities at that date.
The ability of the company to continue as a going concern is dependent upon the following:
.
.
the continued support of the Group's bankers
the continued support of the Group's majority shareholders who have extended loans to the
Group
the ability of the Group to return to profitable trading
the orderly realisation of assets in the ordinary course of business at values at least equal to
their book values
.
.
These conditions, along with the other matters set forth in Note l(w), indicate the existence of a
material uncertainty that may cast significant doubt about the Group's ability to continue as a going
concern and, therefore, the Group may be unable to realise its assets and discharge its liabilities in
the normal course of business.
-52-
REPORT ON THE REMUNERATION REPORT
AUDITOR'S OPINION
In our opinion the Remuneration Report of Academies Australasia Group Limited for the year ended
30 June 2016 complies with section 300A of the Corporations Act 2001.
^
PILOT PARTNERS
Chartered Accountants
DANIEL GILL
Partner
Signed on 31st August 2016
Level 10
1 Eagle Street
Brisbane Qld 4000
-53-
ACADEMIES AUSTRALASIA GROUP LIMITED
AND CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
Additional information required by the Australian Securities Exchange Limited and not shown
elsewhere in this report is as follows.
SUBSTANTIAL HOLDERS
Ordinary Shares
The relevant interests of substantial shareholders as at 29 August 2016 were:
Shareholder
No. of Shares Held
%
Mr Chiang Meng Heng a
Mr Christopher Elmore Campbell b
Jilcy Pty Ltd
Raphael Geminder c
Gary William Cobbledick d
Eng Kim Low
DFL Holdings Pty Limited e
30,711,576
9,160,970
8,348,970
6,601,910
4,933,041
4,588,939
4,139,612
40.32
12.03
10.96
8.67
6.48
6.03
5.44
a Includes 4,588,939 shares held by Eng Kim Low
b
Includes 8,348,970 shares held by Jilcy Pty Ltd and 807,142 shares held by Bankura
Pty Ltd
c 4,006,396 held by BB&M Holdings Pty Limited and 2,595,514 held by Kin Group Pty Limited
d 4,006,396 held by BB&M Holdings Pty Limited and 926,645 held by Stormont Pty Limited
e 3,397,893 held by DFL Holdings Pty Limited and 741,719 held by ACN 166 970 565 Pty Ltd.
VOTING RIGHTS
Ordinary Shares
At 29 August 2016 there were 400 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 constitution, 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
AND CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
20 LARGEST SHAREHOLDERS AS AT 29 AUGUST 2016
Registered Name
No. Shares
%
1 Mr Chiang Meng Heng
2
Jilcy Pty Ltd
3
Eng Kim Low
4
BB&M Holdings Pty Limited
5
DFL Holdings Pty Limited
6
Citicorp Nominees Pty Limited
7
J&B Schlederer Pty Ltd
8
Kin Group Pty Limited
9
JP Morgan Nominees Australia Limited
10
RTO Solutions Pty Limited
11
Sargoda Pty Ltd
12
BNP Paribas Noms Pty Ltd
13
HSBC Customer Nominees (Australia) Limited
Stormont Pty Limited
14
15 Mrs Melinda Kaye Burgess
ACN 166 970 565 Pty Ltd
16
Schlederer Nominees Pty Limited
17
18 Mrs Gail Leslie Storey
19
20 Mr Daniel Hing Yuen Wong < Jehovah Jireh Family A/C>
Bankura Pty Ltd
26,122,637
8,348,970
4,588,939
4,006,396
3,397,893
3,210,531
3,060,000
2,595,514
2,215,815
1,374,098
1,100,000
1,038,347
961,055
926,645
811,936
741,719
700,000
634,335
578,000
427,631
34.30
10.96
6.03
5.26
4.46
4.22
4.02
3.41
2.91
1.80
1.44
1.36
1.26
1.22
1.07
0.97
0.92
0.83
0.76
0.56
66,840,461
87.76
HOLDING RANGE (SHAREHOLDERS) AS AT 29 AUGUST 2016
Range
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 +
No. Holders
67
130
53
108
42
400
Total No. Shares
41,383
356,970
411,704
4,190,565
71,162,357
76,162,979
%
0.05
0.47
0.54
5.50
93.44
100.00
UNMARKETABLE PARCELS AS AT 29 AUGUST 2016
Minimum $500 parcel at $0.20 per unit
Minimum Parcel Size No. Holders
2,500
135
Units
163,035
ORDINARY SHARES ON ISSUE SUBJECT TO VOLUNTARY ESCROW
Escrowed until 1 September 2016
1,500,000
Ordinary shares
There were 5,906,250 ordinary shares issued and escrowed in 2014 as part-consideration for the
acquisition of Spectra Training. (See AKG’s ASX announcements of 27 June, 24 July and 1 September
2014.)
4,406,250 of those shares, which were escrowed until 23 July 2016, have been released from escrow.
- 55 -
ACADEMIES AUSTRALASIA GROUP LIMITED
AND CONTROLLED ENTITIES
ADDITIONAL INFORMATION FOR LISTED PUBLIC COMPANIES
CORPORATE INFORMATION
DIRECTORS
Dr John Lewis Schlederer
Christopher Elmore Campbell
Chiang Meng Heng
Gabriela Del Carmen Rodriguez Naranjo
Bill Say Mui Foo
COMPANY SECRETARY
Chris Grundy
REGISTERED OFFICE
Academies Australasia Group Limited
Level 6, 505 George Street
Sydney NSW 2000
Australia
Telephone: (02) 9224 5555
Facsimile:
(02) 9224 5550
Email: companysecretary@academies.edu.au
Web Site: www.academies.edu.au
SHARE REGISTRAR
Computershare Investor Services Pty Limited
GPO Box 2975 Melbourne, VIC 3001
Australia
Telephone: +61 (03) 9415 4000
Toll Free (Australia only) 1300 855 080
SECURITIES EXCHANGE
The Company is listed on the Australian Securities Exchange.
The Home Exchange is Sydney.
ASX Code:
AKG
- 56 -
ACADEMIES AUSTRALASIA GROUP LIMITED
AND CONTROLLED ENTITIES
GLOSSARY OF COMMON TERMS
Academies Australasia Polytechnic
Academies Australasia Polytechnic Pty Limited
AASB
Australian Accounting Standards Board or a numbered Standard issued by it
Academies Australasia Institute
Academies Australasia Institute Pty Limited
ACPET
AKG
ASX
Benchmark
Board
The Company
Australian Council for Private Education and Training
ASX code for Academies Australasia Group Limited – The Company
Australian Securities Exchange
Benchmark Resources Pty Limited - trading as Benchmark College
The board of directors of Academies Australasia Group Limited
Academies Australasia Group Limited (ACN 000 003 725) - the parent company
College of Sports & Fitness
International College of Capoeira Pty Limited - trading as College of Sports & Fitness
Corporations Act
Corporations Act 2001 (Cth)
DFL
Directors
DFL Education (Qld) Pty Limited - trading as Brisbane School of Hairdressing, Gold
Coast School of Hairdressing, Brisbane School of Beauty and Brisbane School of
Barbering
Board directors of Academies Australasia Group Limited
Discover English
Discover English Pty Limited
EBITDA
Earnings before interest, taxation, depreciation and amortisation
EPS
FY16
FY17
Group
GST
IEAA
Earnings per share
Financial Year to 30 June 2016
Financial Year to 30 June 2017
Academies Australasia Group Limited (the parent company) and all its subsidiaries
Goods and Services Tax
International Education Association of Australia
International College of Capoeira
International College of Capoeira Pty Limited - trading as College of Sports & Fitness
Language Links
Rights Issue
RTO
RuralBiz
Shares
Skills Training Australia
Spectra Training
TAFE
TPS
VET
Vostro
Language Links International Pty Limited
The Rights Issue concluded in November 2015, comprising an underwritten 3 for 14
Renounceable Issue. The shares were offered at 30 cents each. The issue was over-
subscribed and raised $4 million.
Registered Training Organisation
Kreate Pty Limited – trading as RuralBiz Training
Fully paid ordinary shares in the Company
Transformations – Pathways to Competence and Developing Excellence Pty Limited -
trading as Skills Training Australia
Newco CLB Training & Development Pty Limited as trustee for the CLB Unit Trust -
trading as Spectra Training
Technical and Further Education
Tuition Protection Scheme
Vocational Education and Training
Vostro Institute of Training Australia Pty Limited
- 57 -