Ashland Global Annual Report 2019

FY2019 Annual Report · Ashland Global

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Annual Report 2019

Ashley Services Group Limited Annual Report 2019

CHAIRMAN AND MANAGING DIRECTOR’S REVIEW ---------------------------------------------------------------- 3

DIRECTORS’ REPORT --------------------------------------------------------------------------------------------------------- 7

AUDITOR’S INDEPENDENCE DECLARATION -------------------------------------------------------------------------- 20

CORPORATE GOVERNANCE STATEMENT ----------------------------------------------------------------------------- 21

DIRECTORS’ DECLARATION----------------------------------------------------------------------------------------------- 22

INDEPENDENT AUDITOR’S REPORT ------------------------------------------------------------------------------------ 23

CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ------------27

CONSOLIDATED STATEMENT OF FINANCIAL POSITION ----------------------------------------------------------- 28

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ------------------------------------------------------------ 29

CONSOLIDATED STATEMENT OF CASH FLOW ----------------------------------------------------------------------- 30

NOTES TO THE FINANCIAL STATEMENTS ---------------------------------------------------------------------------- 31

ASX ADDITIONAL INFORMATION --------------------------------------------------------------------------------------- 67

CORPORATE DIRECTORY -------------------------------------------------------------------------------------------------- 69

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Chairman and Managing Director’s Review

MR IAN PRATT AND MR ROSS SHRIMPTON

FY19 was a continuation of recent positive profitability growth for Ashley Services Group. As flagged prior to
the end of our FY18 financial year, Action Workforce saw a decrease in revenue following the exit of a low
margin contract. Concept Engineering, after a few periods of year on year significant growth saw a temporary
lull due to a downturn in demand from Q2 onwards. Despite these factors it is a testament to the strength of
our business that we were able to deliver a pleasing lift in profitability. Our strategic decision taken back in
early 2017 to reposition Ashley Services as a Labour Hire company with a focused, complementary Training
division continues to have been the right move for our organisation.

Our Labour Hire division is the driving force and we are delighted to report that despite a combined 14% drop
in Labour Hire revenue as outlined below, overall Labour Hire EBITDA of $11.46 million was down just $0.32
million on the $46.5 million revenue decline. Coming from this lower revenue base it is very pleasing to see our
EBITDA % lift 49bps to 4.10%.

With Labour Hire profitability down slightly, it was exciting to see our Training division step up with a much
improved result from steady growth throughout the year. This improvement in Training along with further
Corporate cost reductions enabled us to deliver the pleasing profitability lifts evidenced by our FY19 result.

The impressive safety performance of our Labour Hire division continues, with injury rates at record lows over
the last three years, continuing a long history of industry-leading results for our employees and our corporate
partners. Our safety record is world’s best practice and something we are extremely proud of and which is a
direct consequence of our strenuous on-boarding programmes, closely partnering with our customers, and
also an absolute commitment to continued innovation across our Workplace Health & Safety programmes.

Corporate costs are now under $3.4 million, down a further $0.4 million or 11%. Since FY16 we have managed
to deliver a $2.3 million or just over 40% reduction in corporate costs (FY16: $5.7 million).

Our strong cash flow performance has seen us again close the year with zero debt and a solid cash balance
after the resumption of dividends during the year. We are also pleased we have been able to lift our dividend
payment by 8% on the back of our improved result for FY19.

FY19 also saw us conclude a class action dating back to 2014 which was launched in the courts back in
December 2016. The Deed of Settlement was signed in December 2018 by all parties without admission of
liability by any party and was subsequently approved by the Federal Court in June 2019. There was no negative
impact on our FY19 financial results as the result of the resolution.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Chairman and Managing Director’s Review

LABOUR HIRE DIVISION

Action Workforce delivered an 8.5% growth in revenue, excluding the exited contract, with a significant new
customer coming on board, as well as strong growth across many of our existing customers by increasing
market share and/or adding locations. Growth also resulted from the development of some higher margin
business lines which bode well for the future business mix in Action.

Concept Engineering, which has grown at rates of 70% (FY17) and 58% (FY18), came back a little in FY19 as the
Victorian market softened for us, particularly in the rail sector, no doubt impacted by a general slowdown
around the state election. We have seen a lift in the first part of the new financial year, and we maintain a
positive outlook for this business.

Our Concept Engineering brand has successfully grown a permanent recruitment revenue stream during FY19.
We are looking to build on this through the development of a meaningful white-collar permanent recruitment
division under a new brand, Concept Recruitment Specialists, based out of four locations in Sydney including a
new Western Sydney office. Our existing Blackadder brand will focus more on white collar temp and
contracting activity complementing our Action Workforce customer base.

TRAINING DIVISION

The Training division benefited from a strong recovery in our Victorian business which more than doubled its
revenue in FY19, driving a pleasing profit result. Our Western Australian operations remain profitable on
similar revenue levels as prior year, whilst Queensland saw modest revenue growth following the opening of
two new branches focused on the job network market.

In total, the Training division in FY19 delivered a pleasing $1 million EBITDA from what was basically a
breakeven result in FY18. Revenues were up $1.3 million or 19%, with Victoria the key driver of this growth.

The Training division has grown steadily throughout FY19 and we anticipate that this steady growth trend will
continue for the year ahead.

We remain committed to ensuring a culture of compliance sits above everything we do in our Training division.
Strong processes and practices protect our position in the industry as a highly trusted, quality training partner
for our customers, students, and also for the relevant government authorities who control many aspects of the
training sector and its associated government funding schemes.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Chairman and Managing Director’s Review

DISCUSSION ON RESULTS

Earnings and result

Earnings

Net profit after tax (“NPAT”) for the financial year ended 30 June 2019, was a profit of $5.4 million (FY18: profit
$4.8 million) driven by a strong performance from the Labour Hire division, an improving Training division and
further reduction in Corporate overheads.

Key elements within the result include:

Revenues

Group Revenue at $287.6 million decreased by $45.2 million (-13.6%) from the comparative period. The prior
period included $59.2 million of revenue related to a single Action Workforce contract exited at the end of FY18
as previously outlined. Excluding this prior period revenue, full year revenue for the group was up by $13.9
million or 5.1%.

Labour Hire revenues for the year were up $12.7 million or 4.7% (excluding prior year contract exit revenues),
with Action Workforce up 8.5%, Concept Engineering down 10.3% and Blackadder Recruitment up 4.8%.

Training revenues were up by $1.27 million or 19.0% with Victoria more than doubling its revenue across the
year.

Earnings before interest taxes depreciation and amortisation (“EBITDA”)

Group EBITDA for the financial year was a profit of $9.1 million, up $1.1 million or 13.8% on the prior
corresponding period (FY18: profit of $8.0 million).



Labour Hire EBITDA of $11.5 million, was down $0.3 million or 2.7% on the prior corresponding period
(FY18: $11.8 million), despite the loss of $59.2 million of revenue related to the exited contract. EBITDA
margin at 4.10%, was up from 3.61% for the prior corresponding period, due in part to the lower
revenue base, as well as continuing operational efficiency improvements.

Training EBITDA of $1.0 million was a strong recovery from last year’s breakeven position (FY18: $0.04
million) with the growth in the Victorian operations being the strongest driver of this lift.

Corporate overheads, at $3.39 million, continue to deliver on all available cost reduction opportunities,
and were down $0.44 million (-11.5%) on prior corresponding period (FY18: $3.83 million).

Statement of financial position

The Group balance sheet has strengthened overall by $1.8 million, with NPAT of $5.4 million less the dividend
payment of in FY19 of $3.6 million. Net tangible assets at 30 June 2019 were $23.4m or 16.3c per share (1 July
2018: $21.7m or 15.0c per share).

As at 30 June 2019, the Group had a $5 million working capital facility through Shrimpton Holdings Pty Limited,
a company associated with Ross Shrimpton, Managing Director and major shareholder of the Group. Shrimpton
Holdings Pty Limited has fixed and floating charges over the Group’s assets, subject to conditions outlined by a
separate agreement between Ashley Services Group Limited and Shrimpton Holdings Pty Limited and in line with
the conditions outlined in the ASX Listing Rule Waiver as subsequently revised on 6 August 2018, following the
extension of the Facility Agreement out until 31 January 2020.

As at 30 June 2019, the working capital facility was undrawn (1 July 2018: Nil).

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Chairman and Managing Director’s Review

Cash Flow

Operating cash flow was strong in the second half, recovering from an inflow of just $0.3 million at the half due
to peak period seasonality, to end at an overall $4.8 million inflow for the year. Our strong cash flow performance
has seen us again close the year with zero debt and a solid cash balance after the resumption of dividends during
the year.

Capital expenditure at $0.9 million was at a similar level to the prior year, offset by a $0.2 million inflow resulting
from the sale of some surplus assets. Outflow from financing activities of $3.6 million was due to the dividend
payment of 2.5 cent per share made during the year.

Overall this delivered a net cash inflow for FY19 of $0.4 million.

DIVIDEND

On 9 August 2019 the Group declared a fully franked final dividend of 2.7 cents in relation to the financial year
ended 30 June 2019. This represents an 8% increase over the dividend for the prior financial year (FY18: 2.5
cents).

EVENTS SUBSEQUENT TO BALANCE DATE

Subsequent to year end, the Company on 27 August 2019 announced that it has entered into agreements to
acquire a major shareholding of the CCL Group, comprised of Construction Contract Labour (VIC) Pty Ltd,
Complete Traffic Services (VIC) Pty Ltd and CCL Filcon Pty Ltd

The combined acquisition price for the 80% purchase of the CCL Group is $11.2 million adjusted for subsequent
earn-outs for FY20 and FY21. Payments will be based on FY19 (80%), FY20 (10%) and FY21 (10%) audited results.
Pre-audited FY19 results were a normalised EBITDA of $4.1 million from Revenue of $40.0 million.

Ian Pratt
Chairman

Ross Shrimpton
Managing Director

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

The Directors present their annual financial report on the consolidated entity, being Ashley Services Group
Limited and its controlled entities (“Group”) for the financial year ended 30 June 2019.

1. GENERAL INFORMATION

a. Directors

The names of the Directors in office at any time during, or since the end of the year are:

Table 1: Director Details

Names
Chairman
Mr Ian Pratt
Mr Ross Shrimpton Managing

Director

Appointed / Resigned
Appointed 1 October 2015
Appointed 12 Oct 2000; Managing Director to 15 Feb 2016, Non-Executive
Director 15 Feb 2016 to 23 Jan 2017 and Managing Director from 23 Jan 2017

Mr Chris McFadden

Executive Director Appointed 6 April 2017

Directors’ Information

•

Mr Ian Pratt | Non-Executive Chairman (since 1 October 2015)

Qualifications | CA

Experience | Ian has over 40 years’ experience in the accounting profession and is a Director of
a number of Public and Private companies. During this time, he has been involved in the
recruitment, finance and property industries, and advises on income tax and related matters.
Currently Ian is a Partner at Trood Pratt & Co Chartered Accountants and is a Director of Charter
Hall Direct Property Management Limited (formerly Macquarie Direct Property Management
Limited).

Mr Pratt is a Member of Chartered Accountants Australia and New Zealand.

Ian is Chairman of the Nominations, Audit & Risk Management and Remuneration Committees.

Mr Ross Shrimpton | Managing Director (since 23 January 2017) (previously Non-Executive
Director from 15 February 2016 and Managing Director to 15 February 2016)

Qualifications | BComm (UNSW), CA, MAICD

Experience | Ross is the founder and Managing Director of Ashley Services Group and has been
instrumental in the overall growth and strategic direction of Ashley Services. Ross has over 40
years’ experience in finance and management across a number of large international
organisations such as CSR/Humes and David Brown, originally commencing his professional
career with Deloitte Touche Tohmatsu. Overall, Ross has over 20 years of relevant experience in
the labour hire and training industries.

Ross is a Member of Chartered Accountants Australia and New Zealand and a member of the
Australian Institute of Company Directors.

Ross is a member of the Nominations, Audit & Risk Management and Remuneration Committees.

Mr Chris McFadden | Executive Director (from 6 April 2017)

Qualifications | BBus (UTS), FCPA, GAICD

Experience | Chris was appointed Chief Financial Officer of Ashley Services Group in January 2017
and was appointed Executive Director in April 2017. Chris was formerly CFO at Ross Human
Directions Limited (ASX: RHD), a company principally involved in the provision of temporary
labour and recruitment services. Most recently Chris was CFO of Australian fashion brand, sass &
bide, a division of Myer. Chris’s previous roles include: CFO of Staples Australia, Senior
Commercial Manager at Woolworths Limited and Asia Pacific CFO of The Nuance Group.

Chris is a Fellow of CPA Australia and a Graduate of the Australian Institute of Company Directors.

Chris is a member of the Nominations, Audit & Risk Management and Remuneration Committees.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

Interests in shares and options

As at the date of this report, the interests of the directors in the shares of Ashley Services Group Limited were:

Table 2: Shares Held by Directors

Names

Mr Ian Pratt

Mr Ross Shrimpton

Mr Chris McFadden1

•

Number
of Shares Held

Shareholding
%

•

15,060

80,279,030

630,630

0.01

55.76

0.44

Note:
1.

The changes in Chris McFadden’s holding are as advised to the ASX on 31 October 2018 following an on-market purchase through a
director related entity – Christoula Pty Limited ATF Christoula Superannuation Fund.

Directorships of other listed companies

Directorships held in other listed companies by the Directors in the three years immediately before the end of
the financial year are as follows:

Table 3: Other Directorships of listed entities

Name

Mr Ian Pratt

Mr Ross Shrimpton

Mr Chris McFadden

Principal activities

Company

Date from

Date to

Nil

The principal activities of the Group during the financial year were the provision of labour hire (including
recruitment) and training services.

Company secretary

Mr Ron Hollands held the position of Company Secretary for the entire financial year. Ron is a qualified Chartered
Accountant and holds a Bachelor of Business from University of Technology, Sydney, an MBA from MGSM and a
Graduate Diploma of Applied Corporate Governance from the Governance Institute of Australia. Ron has over 25
years’ experience in a range of industries including professional practice, financial services and real estate.

Directors’ meetings

Details of meetings of directors (including committees of directors) held in the financial year and attendances by
each director are shown in the following table:

Table 4: Meeting Attendance

Board Meetings

Audit & Risk
Management
Committee
Meetings

Remuneration
Committee
Meetings

Nomination
Committee
Meetings

Held Attended

Held

Attended

Held

Attended

Held

Attended

Mr Ian Pratt

Mr Ross Shrimpton

Mr Chris McFadden

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

1. BUSINESS REVIEW

Operating results

The consolidated profit of the Group attributable to
equity holders after providing for
income tax
amounted to $5,424,000 (2018: profit $4,789,000).

Review of operations

Information on the operations and
financial
position of the Group and its business strategies and
prospects is set out in the Chairman and Managing
Director’s Review.

Future developments

in the operations of the
Likely developments
consolidated entity in future years and the expected
results of those operations are referred to generally
in the Chairman and Managing Director’s Review.

Events subsequent to reporting date

There have been no matters or circumstances that
have arisen since the end of the year that would
have significantly affected the group’s operations in
financial year 2019, except as follows:

On 27 August 2019 the Company announced that it
had entered into agreements to acquire a major
shareholding of the CCL Group, comprised of
Construction Contract Labour
(VIC) Pty Ltd,
Complete Traffic Services (VIC) Pty Ltd and CCL
Filcon Pty Ltd.

The combined acquisition price for the 80%
purchase of the CCL Group is $11.2 million adjusted
for subsequent earn-outs for FY20 and FY21.
Payments will be based on FY19 (80%), FY20 (10%)
and FY21 (10%) audited results. Pre-audited FY19
results were a normalised EBITDA of $4.1 million
from Revenue of $40.0 million.

On 9 August 2019 the Group declared a fully franked
final dividend of 2.7 cents in relation to the financial
year ended 30 June 2019, with a payment date of 6
September 2019.

Ongoing Litigation

Ashley Services Group Limited (ASH) has no current
ongoing litigation.

2. OTHER INFORMATION

Options

There are no unissued ordinary shares that are
either under option at the date of this report or
have been exercised during the year.

During the year, the Group issued no further
Performance Rights to senior executives and
cancelled 344,736 Performance Rights for Nil
consideration.

b. Non-audit services

The Group may decide to employ the auditor on
assignments additional to their statutory audit
duties where the auditor’s expertise and experience
with the Group are important.

The current auditor, HLB Mann Judd Assurance
(NSW) Pty Ltd, did not provide any non-audit
services during the year ended 30 June 2019.

Details of the amounts paid to HLB Mann Judd for
audit services provided during the year are outlined
in Note 4 to the financial statements.

c. Auditor’s independence declaration

A copy of the auditor’s independence declaration as
required under section 307c of the Corporations Act
2001 is set out on page 22 and forms part of this
report.

d. Environmental issues

The Group’s operations are not regulated by any
significant environmental regulation under a law of
the Commonwealth or of a state or territory.

Indemnifying officers or auditors

Insurance of officers

During the financial year, Ashley Services Group
Limited paid a premium to insure the directors,
secretaries and officers of the Group and its
Australian entities.

The insurance policies prohibit disclosure of the
premiums payable under the policies and details of
the insured liabilities.

f. Proceedings on behalf of the Company

No person has applied to the Court under section
237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the Group, or to intervene

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

in any proceedings to which the Group is a party, for
the purpose of taking responsibility on behalf of the
Group for all or part of those proceedings.

g. Rounding off of amounts

In accordance with ASIC Corporations (Rounding in
Financial
Instrument
/ Directors’ Reports)
2016/191, amounts in the financial report are
rounded off to the nearest thousand dollars unless
otherwise indicated.

3. REMUNERATION REPORT – AUDITED

The directors of Ashley Services Group Limited
present the remuneration report for Non-Executive
Directors, Executive Directors and other key
management personnel, prepared in accordance
with
the
the Corporations Act 2001 and
Corporations Regulations 2001.

The remuneration report is set out in the following
main headings:

•
•

•
•
•
•
•

key management personnel;
principles used to determine the nature and
amount of remuneration;
Non-Executive Director remuneration;
details of remuneration;
executive service agreements;
share-based compensation; and
additional information.

Key management personnel

The following persons acted as Directors of the
Group or as key management personnel during the
financial year:

Executive Directors:

•
Ross Shrimpton
•
Chris McFadden
Non-Executive Directors:

•

Ian Pratt

Other key management personnel:

•

Paul Rixon (General Manager, Labour Hire)

Key management personnel
include both the
Directors and other key management personnel
named above.

Principles used to determine the nature and
amount of remuneration

that

to ensure

The objective of the Group’s executive reward
framework
for
performance is competitive and appropriate for the
results delivered. The framework seeks to align
executive reward with achievement of strategic
objectives and
for
shareholders.

the creation of value

reward

The Board seeks to ensure that executive reward
satisfies the following key criteria for good reward
governance practices:

•
•
•

•
•

competitiveness and reasonableness;
acceptability to shareholders;
performance linkage / alignment of executive
compensation;
transparency; and
capital management.

Alignment of shareholders’ interest

•

focuses on sustained growth in shareholder
wealth, consisting of dividends and growth in
share price, and delivering a return on assets
as well as focusing the executive on key non-
financial drivers of value; and
attracts and retains high-calibre executives.

Alignment to program participants’ interests

•
•

•

rewards capability and experience;
provides a clear structure for earning rewards;
and
provides recognition for contribution to the
business.

The framework provides a mix of fixed and variable
pay, and a blend of short and long-term incentives,
albeit the LTI scheme has been temporarily
suspended for the financial years 2017, 2018 and
2019.

The Board has established a Remuneration
Committee which provides advice on remuneration
and incentive policies and practices and specific
recommendations on remuneration packages and
other terms of employment for executives and
Directors. The Corporate Governance Statement
provides further information on the role of this
committee.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

Executive pay

The executive pay and reward framework has three
components:
•

base pay and benefits, including
superannuation;
short-term performance incentives, provided
in cash; and

•

incentives provided

long-term
through
participation in the Ashley Services Group
Performance Rights Share Plan, albeit the LTI
scheme has been temporarily suspended for
the financial years 2017, 2018 and 2019.

The combination of these comprises the executive’s
total remuneration.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

Table 5: Key components of senior executive remuneration framework in place during the year ended 30 June 2019.

Fixed Remuneration/Base Pay

Short Term Incentive (STI)

Long Term Incentive (LTI)

Remuneration Elements

•

Base pay is determined by
reference to appropriate
benchmark information, taking
into account an individual’s
responsibilities, performance,
qualifications and experience,
the broad objective being to
pitch fixed remuneration at
median market levels.

Base pay is structured as a
package, which may be
delivered as a mix of cash and
other benefits, such as the
provision of a motor vehicle, at
the executive’s discretion.

There are no guaranteed base
pay increases in any executives’
employment contracts.

•

‘At risk’ award opportunity for the
achievement of annual
performance objectives linked to
annual financial targets and non-
financial goals set by individual.

•

In light of the loss for financial years
ended 30 June 2016 and 2017 and the
reduced share price, the Board and the
Remuneration Committee have
temporarily suspended the LTI scheme
for the financial years 2017, 2018 and
2019. Accordingly, there was no award
of performance rights to senior
executives in relation to the year
ended 2019.

Financial targets in line with
budgets set for the individual’s
area of influence for the financial
year, coupled with non-financial
key performance measures.

Paid in cash within 30 days of
finalisation of Audited Annual
Report.

Table 6: Key features of the senior executive STI plan for FY19

Overview of the senior executive STI plan

Who participates in the
Senior Executive STI plan?

Senior executives participate in the senior executive STI plan.

How much can executives
earn?

STI opportunity for senior executives ranges from zero to 100% of target STI for significant out-
performance.

Thresholds and performance conditions

Is there a threshold
level of performance
required?

Yes. There are threshold levels for EBITDA that must be met to receive an STI payment.
Achievement of the thresholds does not automatically entitle executives to an STI award.
Financial performance measures must also be met to earn an STI payment.

What
are
performance
conditions?

the

Measures

Senior Executives

Financial measures
(80% of STI opportunity)

Non-Financial measures
(20% of STI opportunity)

Assessed against:
•

Budget EBITDA for the individual’s area of influence
for the financial year.
20% payable for achievement of 90% of budget.
Remaining 80% payable on a straight-line pro rata
basis for performance from 90% to 130% of budget.

Individually set Key Performance Indicators.

•

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

Setting and assessing performance

Who sets and
assesses
performance?

How is the STI
delivered?

The MD sets and assesses performance and short term incentive outcomes for senior executives
with guidance from the Remuneration Committee. The Remuneration Committee sets the targets
for MD and assesses performance against those targets.

100% of any STI award is paid in cash within 30 days of finalisation of the audited Annual Report.

Table 7: Key features of the senior executive FY16 LTI plan
Note that LTI plan has been suspended for FY17, FY18 and FY19

Overview of the LTI plan for FY16

Who participates in
the Senior Executive
LTI?

What was awarded
under the LTI plan in
FY16?

Senior executives, including the MD, participate in the senior executive LTI plan.

On 25 September 2015 senior executives received an LTI award of 1,561,688 performance rights,
the vesting of which is subject to the performance condition outlined below. The number of rights
awarded was calculated by dividing the remuneration value of the award by the volume weighted
average price of ASH shares for the 5 day trading period prior to the approval to grant their award.

Performance conditions

What are the
performance
conditions?

Senior executive LTI awards are earned only upon achievement of the following performance
hurdles:
•
•

Earnings Per Share growth (EPS): 50% of the LTI grant
Total Shareholder Return (TSR): 50% of the LTI grant

Over what period is
performance
measured?

How are the
performance
conditions
assessed?

Performance
condition 1) EPS

Performance
condition 2) TSR

The Board has determined that the FY16 LTI plan will be subject to the performance condition over
a three year period, commencing 1 July 2015.

Absolute EPS performance condition - measured as the compound annual underlying EPS growth
over the 3 year performance period.

The EPS target is:

EPS

EPS Target

Actual proforma EPS for the financial year ended 30 June 2015

8.7 cents

10% growth FY16
10% growth FY17
10% growth FY18

9.6 cents
10.5 cents
11.6 cents

If actual EPS for the year ended 30 June 2018 exceeds 11.6 cents per share, 50% of the performance
rights granted to each employee will vest as follows:

50% of performance rights granted to each employee vest at end of third year (25 September 2018)

The remaining 50% vest at the end of the fourth year (25 September 2019), provided the executive
is still employed at this vesting date.

The TSR performance condition is a measure of ASH’s TSR compared to the TSR of a comparator
group of twenty competing and industry related companies at the beginning of the respective
performance periods.

TSR is measured by the change in value of the ASH’s cumulative TSR over the performance period
compared to the TSR performance of the comparator group over the 3 year performance period.

If actual TSR for ASH is top quartile for the 3 year performance period, 50% of the performance rights
granted to each employee will vest. If actual TSR for ASH is 2nd quartile for the 3 year performance

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

Overview of the LTI plan for FY16

period 25% of the performance rights granted to each employee will vest. If actual TSR for ASH is
below 2nd quartile, none of the performance rights attributed to this performance hurdle will vest.

Vesting of TSR related performance rights is as follows:

•

50% of performance rights granted to each employee vest at end of third year (25
September 2018)
The remaining 50% vest at the end of the fourth year (25 September 2019), provided the
executive is still employee at this vesting date.

Why were the
performance
measures chosen?

The Board considers two performance conditions to be appropriate because they ensure that a
proportion of each executive’s remuneration is linked to the generation of profits (expressed on a
per share basis) and shareholder value through the combined application of both absolute and
relative performance criteria.

In particular, the use of a relative TSR based hurdle:
•

Ensures alignment between comparative shareholder return and reward for the executive;
and
Provides a relative, external market performance measure, having regard to those
companies with which the Group competes for capital, customers and talent.

An absolute underlying EPS growth based hurdle:
•

Links executive reward to a fundamental indicator of financial performance that is directly
connected to shareholders; and
Links directly to ASH’s long term objectives of improving and maintaining earnings
performance.

•

The use of dual performance measures combines a strong external market based focus through
share price growth and dividends (TSR), and a non-market based internal measure aimed at driving
improved Company earnings results (EPS).

No, retesting of performance is not permitted.

The Remuneration Committee based on financial information (EPS measure) and share price
performance (the TSR measure).

No, there are no voting rights or entitlements to dividends on unvested awards under the LTI plan.

Is performance
subject to retesting?

Who assesses
performance
against targets?

Does the executive
receive dividends
and voting rights on
unvested awards?

Cessation of employment and change of control

What happens in
the event of a
change of control?

Upon a change of control event, the Board may determine to vest some or all of the LTI awards. In
making this determination, the Board will consider all relevant circumstances, including the
performance against the EPS measure up to the date of the change of control event and the portion
of the performance period that has expired.

What happens in
the event of
cessation of
employment?

In general, unvested LTI awards are forfeited.

In limited circumstances, such as upon a senior executive’s death, serious injury or incapacity during
the performance period or other reason approved by the Board, any unvested performance shares
will vest at the end of the performance period if the relevant performance conditions have been
satisfied.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

STI and LTI plans for the financial year ended 30 June 2019

The remuneration committee has approved a similar Short Term Incentive (STI) plan for the year ended 30 June
2019, based upon budget targets for that annual period.

In light of the loss for the financial years ended 30 June 2016 and 2017 and the reduced share price, the Board
and the Remuneration Committee have temporarily suspended the LTI scheme for the financial years 2017, 2018
and 2019. Accordingly there was no award of performance rights to senior executives in relation to the year
ended 2019 nor were any awarded in relation to the year 2018.

Non-executive Director remuneration and Board performance review

Non-executive Directors’ remuneration are reviewed annually and are determined by the Board based on
recommendations from the Remuneration Committee. In making its recommendations, the Remuneration
Committee takes into account remuneration paid to other non-executive Directors of comparable companies
and where necessary will seek external advice. No remuneration consultants were used during the financial year.

In accordance with the Company’s Constitution, the Directors are entitled to receive an annual fee and for
participation in Board sub-committees. For non-executive Directors, fees are not linked to performance.

The Company does not operate equity plans for non-executive Directors.

Non-executive Directors are entitled to statutory superannuation included as part of their Directors’ fees. There
are no other schemes for retirement benefits for non-executive Directors.

Details of remuneration

Details of remuneration of the Directors and other key management personnel of Ashley Services Group are set
out in the tables on pages 17 to 19.

The key management personnel of Ashley Services Group are listed in the table below. The key management
personnel have authority and responsibility for planning, directing and controlling activities of the Group.

Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel
are formalised in a service agreement. The major provisions of the agreements relating to remuneration are set
out below:

Table 8: Executive and Key Management Personnel Service Agreements

Name

Ross Shrimpton

Chris McFadden

Paul Rixon

Base Salary $1

Target STI %2

Target LTI %2, 3

450,000

283,250

Term of
agreement

Ongoing
Ongoing
Ongoing

Notice Period

6 months

Base salary is on an annual basis and includes superannuation contributions.

Note:
1.
2. Maximum annual award as a percentage of annual salary.
3.

This plan has been suspended for the financial years ended 30 June 2017, 1 July 2018 and 30 June 2019.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

Table 9: Statutory key performance indicators of the group over the last five years1

2019

2018

2017

2016

2015

Profit / (Loss) for the year attributable to members ($000)

Basic earnings per share (cents)
Dividend payments ($000)2

5,424

3.77

3,887

4,789

3.33

3,600

(5,969)

(4.08)

(69,626)

(46.42)

13,676

9.65

6,150

Dividend payout ratio (%)
Increase / (decrease) in share price (%)3
Total KMP incentives as percentage of profit/(loss) for the
year (%)
Note:
1.
2. 2019 Dividend declared 9 August 2019 in relation to the 2019 financial year, with payment date of 6 September 2019. 2018 Dividend

Four years used since Ashley Services Group Pty Limited listed on 21 August 2014.

(63.0)

(70.9)

(64.2)

204.7

71.7

33.3

45.0

75.1

6.1

3.1

1.8

declared 26 July 2018 in relation to the 2018 financial year, with payment date of 17 August 2018.
Increase/(decrease) in share price (%) is year-end share price relative to prior year-end, other than 2015 which is relative to IPO price
of $1.66.

Table 10: 2019 – Remuneration of Key Management Personnel

ST1 employee benefits

Cash salary
& fees
$

Salary non-
cash
$

ST1 employee
bonus
S

PE2 benefits
Super-
annuation
$

LT3 employee
benefit

Performa
nce based
Remunera
tion

29.9

Total4

225,950

425,000

641,975

191,975

19,603

20,531

136,400

328,375

20,531

81,196

419,650

1,712,575

32.5

19.2

2019

Name
Non-executive Directors
Ian Pratt5

Executive Director

Ross Shrimpton

Chris McFadden

Other key management
personnel

Paul Rixon

Total
Note:
1.
ST – Short-term.
2. PE – Post-employment.
3.

206,347

404,469

429,469

262,719

1,303,004

LT – Long-term. Details of the long term incentive plan are included in the Directors’ report, pages 12 to 17. As none of the
performance hurdles for any of the relevant years has been met no expense has been recognised in the profit and loss account for
the year ended 30 June 2019.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

Table 11: 2018 – Remuneration of Key Management Personnel

LT3
employee
benefit

Performa
nce based
Remuner
ation

10.0

Total4

165,000

300,000

500,000

2018

Name
Non-executive Directors
Ian Pratt5

Executive Director

Ross Shrimpton

Chris McFadden

Other key management
personnel
Marc Shrimpton6

Paul Rixon

ST1 employee benefits

Cash salary
& fees
$

Salary non-
cash
$

ST1 employee
bonus
S

PE2 benefits
Super-
annuation
$

50,000

14,315

20,049

150,685

279,951

429,951

127,867

254,951

99,829

505

20,049

128,372

374,829

26.6

1,243,405

Total
Note:
1.
ST – Short-term.
2. PE – Post-employment.
3. LT – Long-term. Details of the long term incentive plan are included in the Directors’ report, pages 12 to 17. Management have
assessed the probability of the performance hurdles for the 2015 and 2016 plans being met as Nil and no expense has been
recognised in the profit and loss account for the year ended 1 July 2018.

1,468,201

149,829

74,967

10.2

4. Amounts included in the above table include amounts paid to key management from all entities.
5. During the year tax advisory fees have also been paid to Trood Pratt & Co (Company in which Ian Pratt is a Partner).
6. Marc Shrimpton resigned as an Executive Director on 20 April 2017 but continued on as General Manager Blackadder

Recruitment for the balance of FY17. Marc resigned 7 July 2017 as General Manager Blackadder Recruitment, with the above
payments representing his final payment inclusive of accrued entitlements.

Other transactions with key management personnel

Information on share-based payments and other transactions with key management personnel is set out on the
previous pages.

Shares held by key management personnel

The number of ordinary shares in the Company during the 2019 reporting period held by each of the Group’s key
management personnel, including their related parties are set out below:

Table 12: Shares held by Key Management Personnel

Name
Ian Pratt

Ross Shrimpton
Chris McFadden1

Paul Rixon

Balance at start of
the year
15,060

80,279,030

76,623
41,416

Shares Disposed
-

Change from KMP
-

Balance at end of the year
15,060

-
-

554,007
-

80,279,030

630,630
41,416

Total
Note:
1. The changes in Chris McFadden’s holding are as advised to the ASX on 31 October 2018 following an on-market purchase through a

80,412,129

80,966,136

554,007

director related entity – Christoula Pty Limited ATF Christoula Superannuation Fund.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

Executive service agreements

On appointment to the Board, all non-executive Directors sign a letter of appointment with the Company. The
letter summarises the terms including compensation, relevant to the office of Director.

All contracts with executives may be terminated by either party with a notice period as outlined in Table 8.
Executives are typically restricted for twelve months after termination from conducting or engaging in competing
businesses and from solicitation of customers and employees of the Company.

Share-based compensation

Senior Executive Share Plan

The Company established the Performance Rights Share Plan on 31 July 2014. The Performance Rights Share
Plan is intended to provide incentives to attract motivate and retain key executives whose present and potential
contributions are important to the success of the Group by offering them an opportunity to participate in
ownership of the Company. The Performance Rights Share Plan is administered by the Board in its discretion.
The terms and conditions of the Performance Rights Share Plan are summarised below.

During the financial year the Board issued Nil performance rights (2018: Nil).

The number of Performance Rights awarded to Executive Directors and Key Management Personnel is set out
below:

Table 13: Performance Rights held by Key Management Personnel

Name
Paul Rixon1

Balance at start of the year
344,736

Performance Rights Cancelled
(344,736)

Balance at end of the year
-

Total
Note:
1. Paul Rixon’s 344,736 Performance Rights were cancelled for Nil consideration on 12 October 2018 as performance conditions attached

334,736

(344,736)

to these rights had not been met.

The offer of rights to Shares under the Employee Performance Rights Plan did not exceed 5% of the total number
of issued shares in that class.

Consideration for the Shares is provided in the form of services to or for the benefit of the Company and as such
performance conditions may be attached to any rights under the Employee Performance Rights Plan. An eligible
employee who has contracted with Ashley Services (under the Employee Performance Rights Plan) for the right
to Shares in the Company (Participant), holds those rights on the following terms:

•
•

•

disposal of rights is not permitted without the permission of the Board;
any new issue of shares to existing shareholders will only apply to the Participant if the rights to shares have
vested in the Participant and the Participant has become a shareholder in the Company at the relevant
record date (as defined in the ASX Listing Rules);
in the event there is a bonus issue to Ashley Services shareholders, the number of shares a Participant is
entitled to under the Employee Performance Rights Plan will be increased by the number of Shares the
Participant would have received had they been a shareholder before the record date (as defined in the ASX
Listing Rules) for the bonus issue; and
in the event of a reconstruction of the issued capital of the Company prior to a Participant’s rights under
the Employee Performance Rights Plan vesting in the Participant, the rights and Shares to which the
Participant is entitled will be reconstructed in accordance with ASX Listing Rules.

Rights under the Employee Performance Rights Plan will vest in a Participant at a determined date subject to the
Participant’s continued employment with Ashley Services and the satisfaction of any performance conditions and

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Report

other terms and conditions imposed by the Board. Shares allotted under the plan are held under the following
conditions:
•
•

shares issued under the plan will rank equally to shares issued in Ashley Services; and
compliance with Ashley Services’ Share Trading Policy is required.

As none of the performance hurdles for any of the relevant years has been met no expense has been recognised
in the profit and loss account for either the year ended 30 June 2019 or 1 July 2018.

End of audited Remuneration Report.

Signed in accordance with a resolution of the Board of Directors made pursuant to section 298(2) of the
Corporations Act 2001

Ian Pratt

Chairman

Sydney, 30 August 2019

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Auditor’s Independence Declaration to Ashley Services Group Limited

As lead auditor for the audit of the consolidated financial report of Ashley Services Group Limited for the
year ended 30 June 2019, I declare that, to the best of my knowledge and belief, there have been no
contraventions of:

(a)

the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit;
and

(b)

any applicable code of professional conduct in relation to the audit.

This declaration is in relation to Ashley Services Group Limited and the entities it controlled during the period.

Sydney, NSW
30 August 2019

S P James
Director

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Corporate Governance Statement

A Corporate Governance Statement has been
adopted by the Board on 30 August 2016 and can be
found at

http://www.ashleyservicesgroup.com.au/investor-
centre/corporate-governance/

The Board has adopted a suite of governance
materials which are available
in the Corporate
Governance section of the Company’s website
(www.ashleyservicesgroup.com.au), under “Investor
Centre”.
The governance materials have been
prepared and adopted on the basis that corporate
governance procedures can add to the performance
of the Company and the creation of shareholder
value, and help to engender the confidence of the
investment market.

Diversity

To date, the board or a committee have not set
measurable objectives for achieving gender diversity
and to assess annually both the objectives and the
company’s progress in achieving them.

The Company provides the following information on
the proportion of women employees in the whole

organisation, women in Senior Executive positions
and women on the Board of the Company.

Female

Male

Directors & Senior Management
Corporate & Administration
Labour Hire
Recruitment
Training
Total

20%
89%
70%
100%
57%
66%

80%
11%
30%
0%
43%
34%

During the financial year ending 30 June 2019 the
its annual report to the
Company submitted
Workplace Gender Equality Agency and is again
compliant with the Workplace Gender Equality Act
2012 (Act).

The performance of the Board and Senior Executives
in the 2019 financial year has been reviewed against
both quantitative and qualitative measures and
Directors and Senior Executives provided feedback on
the discharge of their responsibilities.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Directors’ Declaration

In the opinion of the Directors of Ashley Services Group Limited:

The consolidated financial statements and notes of Ashley Services Group Limited are in
accordance with the Corporations Act 2001, including:
i. Giving a true and fair view of its financial position as at 30 June 2019 and of its performance

for the financial year ended on that date; and

ii. Complying with Australian Accounting Standards (including the Australian Accounting

Interpretations) and the Corporations Regulations 2001;

There are reasonable grounds to believe that Ashley Services Group Limited will be able to pay
its debts as and when they become due and payable; and

c. At the date of this declaration, there are reasonable grounds to believe that the members of
the Extended Closed Group will be able to meet any obligations or liabilities to which they are,
or may become, subject by virtue of the deed of cross guarantee described in note 26 to the
financial statements.

The Directors have been given the declarations required by Section 295A of the Corporations Act 2001
from the Managing Director and Chief Financial Officer for the financial year ended 30 June 2019.

3. Note 1 confirms that the consolidated financial statements also comply with International Financial

Reporting Standards.

Signed in accordance with a resolution of the Directors.

Ian Pratt
Chairman

Sydney, 30 August 2019

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Independent Auditor’s Report to the Members of Ashley Services Group Limited

REPORT ON THE AUDIT OF THE FINANCIAL REPORT

Opinion

We have audited the financial report of Ashley Services Group Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2019,
the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies, and the directors’ declaration
for the Group.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act
2001, including:

(a)

giving a true and fair view of the Group’s financial position as at 30 June 2019 and of their financial
performance for the year then ended; and

(b)

complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Key Audit Matter

How our audit addressed the key audit matter

Revenue recognition
Refer to Note 1 (Summary of significant accounting policies) and Note 2 (Revenue and other income)

Labour hire revenue is the most significant
account balance in the Consolidated
Statement of Profit or Loss and Other
Comprehensive Income.

Total revenue and other income of
$288.7 million comprises a number of
streams including:

We assessed whether the Group’s accounting policies were
in compliance with Australian Accounting Standards and
specifcally whether revenue had been recognised in
accordance with new accounting standard AASB 15
Revenue from Contracts with Customers.

We tested the Group’s process for recognising labour hire
revenue.

labour hire revenue ($279.6 million);

training revenue ($8.0 million); and

We tested labour hire revenue recognised in the period by
agreeing to timesheets, payroll reports, amounts billed and
subsequently received.

other revenue ($1.2 million).

We focussed on this matter due to the size
and magnitude of labour hire revenue, as
well as the higher level of inherent risk due
to the manual processes for inputting,
calculating, reviewing, and recording of
the labour hire revenue.

We issued audit confirmation requests to a sample of
customers to test the total revenue invoiced by the Group.

We tested the process for raising and authorising credit
notes throughout the financial year and immediately
subsequent to year end.

We compared the accuracy of hours on-billed as labour hire
revenue to amounts paid to employees, refer to employment
costs below.

We tested the correct cut-off and accrual of labour hire
revenue at year end.

Employment costs
Refer to Note 1 (Accounting policies)

Employment costs, both internal and
allocated externally, is one of the most
significant account balances in the
Consolidated Statement of Profit or Loss
and Other Comprehensive Income.

Total employment costs amount to

$274.0 million.

We focussed on this matter due to the size
and magnitude of employment costs, as
well as the higher level of inherent risk due
to the manual processes for the volume of
inputting, calculating, reviewing, and
recording of the employment costs.

We tested the Group’s process for recognising employment
costs.

We tested the controls surrounding the authorisation of
changes in employee details, such as pay rates.

We tested employment costs recognised in the period by
agreeing to timesheets, payroll reports, and amounts
subsequently paid.

We analytically reviewed the labour hire margins from
the current and prior year.

We tested the cut-off and accrual of employment
costs at year end.

We tested whether PAYG amounts were deducted and
subsequently paid to the Australian Taxation Office.

We tested superannuation amounts paid by recalculation
and comparison to gross wages. We tested the subsequent
payment to the superannuation clearing house.

Information Other than the Financial Report and Auditor’s Report Thereon

The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2019, but does not include the financial
report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express
any form of assurance conclusion thereon.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

(cid:129)
(cid:129)
(cid:129)
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations,
or have no realistic alternative but to do so.

Auditor’s Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:

•

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit 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 Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Group to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for
our audit opinion.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

We communicate with the directors regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit matters.
We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about
the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.

REPORT ON THE REMUNERATION REPORT

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 12 to 21 of the directors’ report for the year
ended 30 June 2019.

In our opinion, the Remuneration Report of Ashley Services Group Limited for the year ended 1 July 2019
complies with section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an
opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.

HLB Mann Judd Assurance (NSW) Pty Ltd
Chartered Accountants

S P James
Director

Sydney, NSW
30 August 2019

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the financial year ended 30 June 2019

Revenue

Other income

Employment costs

Depreciation and amortisation expense

Finance costs

Other expenses

Profit before income tax from continuing operations

Income tax expense

Profit for the year from continuing operations

Profit / (Loss) for the year from discontinued operations

Profit for the year

Other comprehensive income

Total comprehensive Profit for the year

Basic earnings per share (cents) from continuing operations

Diluted earnings per share (cents) from continuing operations

Basic earnings per share (cents) from discontinued operations

Diluted earnings per share (cents) from discontinued operations

Basic earnings per share (cents) Total

Diluted earnings per share (cents) Total

Note

The accompanying notes form part of these financial statements.

30 Jun 2019
$000

287,570

1,184

(273,995)

(1,007)

(647)

(5,570)

7,535

2,111

5,424

3.77

0.00

3.77

1 Jul 2018
$000

332,803

830

(318,951)

(660)

(574)

(6,610)

6,838

2,048

4,789

3.33

0.00

3.33

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Consolidated Statement of Financial Position
As at 30 June 2019

Note

30 Jun 2019
$000

1 Jul 2018
$000

Assets

Current assets

Cash and cash equivalents

Trade and other receivables

Contract assets

Other assets

Total current assets

Non-current assets

Property, plant and equipment

Deferred tax assets

Intangible assets

Total non-current assets

Total assets

Liabilities

Current liabilities

Trade and other payables

Current tax payable

Provisions

Total current liabilities

Non-current liabilities

Deferred tax liabilities

Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Share capital

Common control reserve

Accumulated losses

Total equity

12, 13

6,784

28,524

571

1,444

37,323

1,140

3,602

3,200

7,942

45,265

13,900

307

2,295

16,502

964

1,175

2,139

18,641

26,624

6,364

29,767

927

37,058

1,347

5,398

3,148

9,893

46,951

15,713

2,773

18,486

1,782

1,884

3,666

22,152

24,799

148,815

(57,687)

(64,504)

26,624

148,815

(57,687)

(66,329)

24,799

The accompanying notes form part of these financial statements.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Consolidated Statement of Changes in Equity
For the financial year ended 30 June 2019

Share Capital
$000

Common
Control Reserve
$000

Retained
Earnings
$000

For the year ended 30 June 2019

Balance at 2 July 2018

Profit for the period

Other comprehensive income for the year

Total comprehensive profit for the period

Dividends paid

Balance at 30 June 2019

For the year ended 1 July 2018

Balance at 1 July 2017

Profit for the period

Other comprehensive income for the year

Total comprehensive profit for the period

148,815

(57,687)

148,815

(57,687)

148,815

(57,687)

Balance at 1 July 2018

148,815

(57,687)

The accompanying notes form part of these financial statements.

(66,329)

5,424

(3,599)

(64,504)

(71,118)

4,789

(66,329)

Total
$000

24,799

5,424

(3,599)

26,624

20,010

4,789

24,799

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Consolidated Statement of Cash Flows
For the financial year ended 30 June 2019

Operating activities

Receipts from customers

Payments to suppliers and employees

Interest received

Interest paid

Income taxes received/(paid)

Net cash from continuing operations

Net cash used in discontinued operations

Net cash from operating activities

Investing activities

Note

30 Jun 2019
$000

1 Jul 2018
$000

318,707

363,434

(312,564)

(360,058)

(632)

(825)

4,752

(558)

286

3,156

4,752

3,156

Payments for property, plant and equipment in continuing operations

Proceeds from sale of property, plant and equipment

Net cash used in investing activities

Financing activities

Repayment of external borrowings in continuing operations

Dividends paid

Net cash used in financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of the financial year

Cash and cash equivalents at end of the financial year

The accompanying notes form part of these financial statements.

(899)

166

(733)

(3,599)

420

6,364

6,784

(633)

189

(444)

(724)

1,988

4,376

6,364

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

Table of Contents

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ---------------------------------------------------- 33

REVENUE AND OTHER INCOME ------------------------------------------------------------------------------- 42

EXPENSES ----------------------------------------------------------------------------------------------------------- 42

AUDITOR’S REMUNERATION ---------------------------------------------------------------------------------- 43

INCOME TAX EXPENSE ------------------------------------------------------------------------------------------ 43

KEY MANAGEMENT PERSONNEL DISCLOSURES ---------------------------------------------------------- 44

CASH AND CASH EQUIVALENTS ------------------------------------------------------------------------------- 44

TRADE AND OTHER RECEIVABLES ---------------------------------------------------------------------------- 44

CONTRACT ASSETS ----------------------------------------------------------------------------------------------- 45

OTHER ASSETS ---------------------------------------------------------------------------------------------------- 45

PROPERTY, PLANT AND EQUIPMENT ------------------------------------------------------------------------ 46

INTANGIBLE ASSETS --------------------------------------------------------------------------------------------- 47

IMPAIRMENT ------------------------------------------------------------------------------------------------------ 48

TAX BALANCES ---------------------------------------------------------------------------------------------------- 49

TRADE AND OTHER PAYABLES -------------------------------------------------------------------------------- 51

BORROWINGS ----------------------------------------------------------------------------------------------------- 51

PROVISIONS ------------------------------------------------------------------------------------------------------- 52

SHARE CAPITAL --------------------------------------------------------------------------------------------------- 52

COMMON CONTROL RESERVE -------------------------------------------------------------------------------- 53

EARNINGS PER SHARE ------------------------------------------------------------------------------------------- 53

SEGMENT INFORMATION -------------------------------------------------------------------------------------- 54

CASH FLOW INFORMATION ----------------------------------------------------------------------------------- 55

BUSINESS COMBINATION -------------------------------------------------------------------------------------- 55

CONTROLLED ENTITIES ------------------------------------------------------------------------------------------ 56

PARENT ENTITY DISCLOSURES -------------------------------------------------------------------------------- 58

DEED OF CROSS GUARANTEE --------------------------------------------------------------------------------- 59

RELATED PARTY TRANSACTIONS ----------------------------------------------------------------------------- 62

SECURED AND CONTINGENT LIABILITIES ------------------------------------------------------------------- 62

FINANCIAL INSTRUMENTS ------------------------------------------------------------------------------------- 62

OPERATING LEASE COMMITMENTS ------------------------------------------------------------------------- 65

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

21.

22.

23.

24.

25.

26.

27.

28.

29.

30.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

31.

32.

33.

EVENTS AFTER THE REPORTING DATE ---------------------------------------------------------------------- 65

EMPLOYEE SHARE RIGHTS PLAN------------------------------------------------------------------------------ 65

DIVIDENDS --------------------------------------------------------------------------------------------------------- 66

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING
POLICIES

General information

The financial statements for the financial year ended
30 June 2019 cover Ashley Services Group Limited
and its controlled entities (“Ashley Services” or the
“Group”). Ashley Services Group is a public Company
listed on the Australian Securities Exchange (trading
incorporated and
under
domiciled in Australia.

the symbol “ASH”),

The following
is a summary of the material
accounting policies adopted by the Group in the
preparation of the consolidated financial statements.
The accounting policies have been consistently
applied unless otherwise stated.

Statement of compliance

The consolidated financial statements are general
purpose financial statements which have been
prepared in accordance with the Corporations Act
2001 and Australian Accounting Standards (including
Australian Accounting Interpretations) adopted by
the Australian Accounting Standards Board. The
consolidated financial statements of the Group also
International Financial Reporting
comply with
Standards (‘IFRS’) adopted by the International
Accounting Standards Board. The Group is a for-
profit entity for the purposes of preparing the
financial statements.

consolidated

The
statements were
financial
authorised for issue by the Board of Directors on
30 August 2019.

Basis of preparation

The consolidated financial statements have been
prepared on an accruals basis and are based on
historical costs, except for the measurement at fair
value of selected non-current assets, financial assets
and financial liabilities as disclosed in this note. Cost
is based on the fair values of the consideration given
in exchange for assets. All amounts are presented in
Australian dollars, unless otherwise noted.

In accordance with ASIC Corporations (Rounding in
Financial / Directors’ Reports) Instrument 2016/191,
amounts in the financial report are rounded off to the
nearest thousand dollars unless otherwise indicated.

Going concern

The consolidated financial statements have been
prepared on a going concern basis.

Adoption of new and revised Accounting
Standards and Interpretations

The Group adopted all of the new, revised or
amended Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board
(“AASB”) that are mandatory for the current
reporting period.

As stated below, the nature and effects of changes
arising from adoption of new, revised or amending
Accounting Standards and Interpretations did not
have a significant impact on the Group.

The main new Accounting
and
Interpretations that became effective during the
current reporting period are as follows:

Standards

AASB 9: Financial Instruments

The Group has adopted AASB 9 from 2 July 2018
which replaces AASB 139 Financial Instruments:
Recognition and Measurement.
The standard
introduced new classification and measurement
models for financial assets.

A financial asset shall be measured at amortised cost
if it is held within a business model whose objective
is to hold assets in order to collect contractual cash
flows which arise on specified dates and that are
solely principal and interest.

A debt investment shall be measured at fair value
through other comprehensive income if it is held
within a business model whose objective is to both
hold assets in order to collect contractual cash flows
which arise on specified dates that are solely principal
and interest as well as selling the asset on the basis of
its fair value.

All other financial assets are classified and measured
at fair value through profit or loss unless the entity
makes an irrevocable election on initial recognition to
present gains and losses on equity instruments (that
are not held-for-trading or contingent consideration
recognised in a business combination) in other
these
comprehensive
requirements, a financial asset may be irrevocably
designated as measured at fair value through profit
or loss to reduce the effect of, or eliminate, an

('OCI'). Despite

income

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

financial

accounting mismatch. For
liabilities
designated at fair value through profit or loss, the
standard requires the portion of the change in fair
value that relates to the entity's own credit risk to be
presented
it would create an
accounting mismatch). New and simpler hedge
accounting requirements are
intended to more
closely align the accounting treatment with the risk
management activities of the entity.

in OCI (unless

New impairment requirements use an 'expected
credit loss' ('ECL') model to recognise an allowance.
Impairment is measured using a 12-month ECL
method unless the credit risk on a financial
instrument has increased significantly since initial
recognition in which case the lifetime ECL method is
adopted. For receivables, a simplified approach to
measuring expected credit losses using a lifetime
expected loss allowance is available.

The Group’s financial instruments include cash and
cash equivalents, trade and other receivables and
trade and other payables. The Group does not apply
hedge accounting. On initial application of AASB 9,
the Group determined that its financial assets and
liabilities continue to be measured at amortised cost
and the Group has applied the simplified approach to
measuring expected credit losses of its trade and
other receivables.

The adoption of AASB 9 has not had a significant
effect on the Group’s accounting policies relating to
financial instruments or a material impact on the
financial performance or position of the Group. In
accordance with the transitional provisions in AASB 9,
comparatives have not been restated and no
differences were required to be recognised to the
opening balance of accumulated losses at 2 July 2018
as a result of the adoption of AASB 9. Consequently,
no further disclosures have been included in this
financial report.

AASB 15: Revenue from Contracts with Customers

The Group has adopted AASB 15 from 2 July 2018
which replaces AASB 118 Revenue, AASB 111
Construction Contracts and several revenue related
Interpretations. The standard provides a single
comprehensive model for revenue recognition.

The core principle of the standard is that an entity
shall recognise revenue to depict the transfer of

promised goods or services to customers at an
amount that reflects the consideration to which the
entity expects to be entitled in exchange for those
goods or services.

introduced a new contract-based
The standard
revenue recognition model with a measurement
approach that is based on an allocation of the
transaction price.

Credit risk is presented separately as an expense
rather than adjusted against revenue. Contracts with
customers are presented in an entity's statement of
financial position as a contract liability, a contract
asset, or a receivable, depending on the relationship
between
the
customer's payment.

the entity's performance and

Customer acquisition costs and costs to fulfil a
contract can, subject to certain criteria, be capitalised
as an asset and amortised over the contract period.

AASB 15 was adopted using
the modified
retrospective approach and as such comparatives
have not been restated. Under this method, the
cumulative effect of initial application is recognised
as an adjustment to the opening balance of
accumulated losses at 2 July 2018. In accordance with
the transition guide, AASB 15 only applies to
contracts with customers that were incomplete at 2
July 2018.

The Groups’ revenue includes labour hire revenue,
training revenue, interest revenue and other income.
The adoption of AASB 15 has not had an effect on the
Group’s accounting policies relating to revenue or
had an impact on the financial performance or
position of the Group. No adjustment was required
to be recognised to the opening balance of
accumulated losses at 2 July 2018 as a result of the
adoption of AASB 15. The adoption of AASB 15 has
seen $571,000 recognised as a Contract asset instead
of Other receivables, as at 30 June 2019.

Other amending Accounting Standards and
Interpretations

Several other amending Accounting Standards and
Interpretations apply for the first time for the current
reporting period commencing 2 July 2018. These
other
and
Interpretations did not result in any adjustments to

amending Accounting

Standards

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

the amounts recognised or disclosures in the financial
report.

•

f. New Accounting Standard and Interpretations not

yet adopted and interpretations

new

standards

and
accounting
Certain
interpretations have been published that are not
mandatory for 30 June 2019 reporting periods and
have not been early adopted by the Group. The
Group’s assessment of the impact of these new
standards and interpretations is set out below.

AASB 16: Leases

AASB 16 replaces AASB 117: Leases, which was issued
in February 2016 and
is effective for periods
beginning on or after 1 January 2019 (i.e. the Group’s
5 July 2020 financial year end). AASB 16:

•

replaces AASB 117 Leases and some lease-
related Interpretations;
requires all leases to be accounted for ‘on-
balance sheet’ by lessees, other than short-term
and low value asset leases;
provides new guidance on the application of the
definition of lease and on sale and lease back
accounting;
largely retains the existing lessor accounting
requirements in AASB 117; and
requires new and different disclosures about
leases.

Based on the Group’s preliminary assessment, the
likely impact on the first time adoption of the
Standard for the year ending 5 July 2020 includes:

•

finalises

there will be an increase in lease assets and
financial liabilities recognised on the balance
sheet by approximately $1.8 million (subject to
the
the Group
change once
assessment);
the reported equity will reduce as the carrying
amount of lease assets will reduce more quickly
than the carrying amount of lease liabilities;
EBIT in the statement of profit or loss and other
comprehensive income will be higher as the
implicit interest in lease payments for former off
balance sheet leases will be presented as part of
finance costs rather than being included in
operating expenses; and

operating cash outflows will be lower and
financing cash flows will be higher in the
statement of cash flows as principal repayments
on all lease liabilities will now be included in
financing activities
than operating
activities.

rather

Business combinations

Business combinations occur where an acquirer
obtains control over one or more businesses and
result in the consolidation of its assets and liabilities.

A business combination is accounted for by applying
the acquisition method, unless it is a combination
involving entities or businesses under common
control. The business combination will be accounted
for from the date that control is attained, whereby
the fair value of the identifiable assets acquired and
liabilities (including contingent liabilities) assumed
are recognised (subject to certain limited exceptions).

initial

Subsequent

When measuring the consideration transferred in the
business combination, any asset or liability resulting
from a contingent consideration arrangement is also
included.
recognition,
contingent consideration classified as equity is not
is
remeasured and
accounted
Contingent
consideration classified as an asset or liability is
remeasured in 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.

its subsequent settlement

for within

equity.

All transaction costs incurred in relation to the
business combination are recognised as expenses in
the statement of profit or
loss and other
comprehensive income when incurred.

The acquisition of a business may result in the
recognition of goodwill or a gain from a bargain
purchase.

Basis of consolidation

The Group financial statements consolidate those of
Ashley Services Group Limited and all of
its
subsidiaries as of 30 June 2019. Ashley Services
Group Limited controls a subsidiary if it is exposed, or
has rights, to variable returns from its involvement
with the subsidiary and has the ability to affect those

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

returns through its power over the subsidiary. All
subsidiaries have a reporting date of 30 June 2019.

All transactions and balances between Group
companies are eliminated on consolidation, including
unrealised gains or losses on transactions between
Group companies. Where unrealised losses on intra-
group asset sales are reversed on consolidation, the
underlying asset is also tested for impairment from a
group perspective. Amounts reported in the financial
statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting
policies adopted by the Group.

Profit or loss and other comprehensive income of
subsidiaries acquired or disposed of during the year
are recognised from the effective date of acquisition,
or up to the effective date of disposal, as applicable.

Non-controlling
interests, presented as part of
equity, represent the portion of a subsidiary’s profit
or loss and net assets that is not held by the Group.
The Group attributes total comprehensive income or
loss of subsidiaries between the owners of the parent
and the non-controlling interests based on their
respective ownership interests.

Labour hire

Labour hire revenue is recognised upon delivery of
the service to the customers or in the instance of
placement fees at the time the employee has been
placed. Revenue from a contract to provide labour
hire services is recognised over time as the services
are rendered based predominantly upon an hourly
rate.

Training revenue

Revenue from a contract to provide training services
is recognised over time as the services are rendered
using the percentage of completion method that
depicts the transfer to the customer of the services
rendered.

Interest revenue

Interest revenue is recognised using the effective
interest method, which for floating rate financial
assets is the rate inherent in the instrument.

Dividend revenue

Dividend revenue is recognised when the right to
receive a dividend has been established, usually on
declaration of the dividend / distribution.

Revenue and other income

Other income

Revenue for both labour hire and training services is
recognised at an amount
the
consideration to which the Group is expected to be
entitled in exchange for transferring services to a
customer. For each contract with a customer, the
Group undertakes the following:

reflects

that

i.
ii.

iii.

iv.

Identifies the contract with a customer
Identifies the performance obligations in the
contract
Determines the transaction price which
takes into account estimates of variable
consideration and the time value of money
Allocates the transaction price to the
separate performance obligations on the
basis of the relative stand-alone selling price
of each distinct service to be delivered
Recognises revenue when, or as, each
performance obligation is satisfied in a
manner that depicts the transfer to the
customer of the services promised.

All revenue is stated net of the amount of GST.

Other income primarily includes State funding
employer rebates earned in relation to specified
categories of individuals.

Intangible assets

Goodwill

Goodwill is initially recognised as the difference
between the fair value of consideration, and the fair
value of net assets acquired less any accumulated
impairment losses.

The value of goodwill is recognised on acquisition of
the business.

The Group adopts the full goodwill method. The fair
value of the interests in the business is determined
using valuation techniques which make the maximum
use of market information where available. Under
this method, goodwill attributable to the interests of
the business is recognised in the financial statements.

Goodwill is tested for impairment annually and is
allocated to the Group’s cash-generating units or
group of cash-generating units, which represent the
lowest level at which goodwill is monitored but

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

where such level is not larger than an operating
segment. Gains or losses on the disposal of equity
include the carrying amount of goodwill related to
the entity sold.

Changes in the ownership interest in a subsidiary are
accounted for as equity transactions and do not affect
the carrying amounts of goodwill.

Other intangibles

Intangibles acquired by the group are stated at cost
less accumulated amortisation and
impairment
losses. Amortisation is charged to the profit or loss
on a straight line basis over the estimated useful life.

Estimated useful life of intangibles is as follows:

Customer relationships

7 years

Licenses

5 years

Intellectual property
Course material
-

5-7 years

Intangible assets, such as Brands, which are deemed
to have an indefinite useful life are not amortised, but
are assessed for impairment annually, within the CGU
to which they are attributed. Where impairment is
recognised, it is recorded in the profit or loss in the
period the impairment is identified.

Income tax

The income tax expense (income) for the year
comprises current income tax expense (income) and
deferred tax expense (income).

Current income tax expense charged to profit or loss
is the tax payable on taxable income. Current tax
liabilities (assets) are therefore measured at the
amounts expected to be paid to (recovered from) the
relevant taxation authority.

Deferred income tax expense reflects movements in
deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses.

Current and deferred income tax expense (income) is
charged or credited directly to equity instead of profit
or loss when the tax relates to items that are credited
or charged directly to equity.

Except for business combinations, no deferred
income tax is recognised from the initial recognition
of an asset or liability where there is no effect on
accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the
tax rates that are expected to apply to the period
when the asset is realised or the liability is settled and
their measurement also reflects the manner in which
management expects to recover or settle the carrying
amount of the related asset or liability.

Deferred tax assets relating to temporary differences
and unused tax losses are recognised only to the
extent that it is probable that future taxable profit will
be available against which the benefits of the
deferred tax asset can be utilised.

Where temporary differences exist in relation to
investments in subsidiaries, branches, associates, and
joint ventures, deferred tax assets and liabilities are
not recognised where the timing of the reversal of the
temporary differences can be controlled and it is not
in the
probable that the reversal will occur
foreseeable future.

Current tax assets and liabilities are offset where a
legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous
realisation and settlement of the respective asset and
liability will occur. Deferred tax assets and liabilities
are offset where: (a) a legally enforceable right of set-
off exists; and (b) the deferred tax assets and
liabilities relate to income taxes levied by the same
taxation authority on either the same taxable entity
or different taxable entities where it is intended that
net settlement or simultaneous realisation and
settlement of the respective asset and liability will
occur in future periods in which significant amounts
of deferred tax assets or liabilities are expected to be
recovered or settled.

Tax consolidation

tax

group under

Ashley Services Group Limited and its wholly owned
Australian subsidiaries have formed an income tax
consolidated
consolidation
legislation. Each entity in the group recognises its
own current and deferred tax assets and liabilities.
Such taxes are measured using the ‘standalone
taxpayer’ approach to allocation.
Current tax
liabilities (assets) and deferred tax assets arising from
unused tax losses and tax credits in the subsidiaries
are immediately transferred to head entity. The
group notified the Australian Taxation Office that it
has formed an income tax consolidation group to
apply from 1 July 2003. The income tax consolidated

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

group has entered a tax funding arrangement
whereby each company in the Group contributes to
the income tax payable by the Group in proportion to
their contributions to the Group’s taxable income.

Differences between the amounts of net tax assets
and liabilities derecognised and the net amounts
recognised pursuant to the funding arrangement are
recognised as either a contribution by, or
distribution, to the head entity.

Cash and cash equivalents

Cash and cash equivalents include cash on hand,
deposits held at call with banks, other short term
highly liquid investments with original maturities of
three months or less, and bank overdrafts. Bank
overdrafts are shown with short term borrowings in
current liabilities on the consolidated statement of
financial position.

Trade and other receivables

Trade and other receivables include amounts due
in the
from customers for services performed
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.

right to consideration. Contract assets are treated as
financial assets for impairment purposes.

Property, plant and equipment

Each class of property, plant and equipment is carried
at cost, less where applicable, any accumulated
depreciation and impairment losses.

Property, plant and equipment is stated at historical
cost
less accumulated depreciation and any
accumulated impairment losses.

The depreciable amount of fixed assets is depreciated
on a straight line basis, over the useful asset’s life to
the Group commencing from the time the assets are
held ready for use.

The annual depreciation rates used for each class of
depreciable assets are:

Class of fixed assets

•
Computer equipment

Depreciation rate
20 - 33%

Office equipment
Furniture and fittings

Motor vehicles
Training equipment
Leasehold improvements

20 - 33%
10%

18.75 - 25%
33.33%
20% - 50%

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.

lives are determined by reference

In the case of leasehold improvements, expected
useful
to
comparable owned assets or over the term of the
lease, if shorter.

The recoverability of trade receivables is reviewed on
an ongoing basis. Amounts which are determined not
to be recoverable are written off by reducing the
carrying amount to its recoverable amount, the
difference is charged to the statement of profit or loss
and other comprehensive income in that period.

Expected credit losses, described in previous years’
financial statements of the Group as an allowance for
impairment, are measured by the Group by applying
a simplified approach which uses a lifetime expected
loss allowance. To measure the expected credit
losses, trade receivables have been grouped based on
days overdue.

Contract assets

Contract assets are recognised when the Group has
transferred goods or services to the customer but
where the Group is yet to establish an unconditional

The carrying amount of property, plant and
equipment is reviewed annually at the end of the
reporting period by the Directors to ensure it is not in
excess of the recoverable amount of 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.

An asset’s carrying amount
is written down
immediately to its recoverable amount if the asset’s
carrying amount
its estimated
recoverable amount.

is greater than

Gains or losses on disposals are determined by
comparing proceeds with carrying amount. These

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

gains or losses are recognised immediately in profit
or loss.

Trade and other payables

Trade and other payables represent the liabilities for
goods and services received by the Group 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.

Employee benefits

Provision is made for the Group’s liability for the
employee benefits arising from services rendered by
employees to the end of the reporting period.
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.
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.
In determining the liability, consideration is given to
employee wage increases and the probability that the
employee may not satisfy vesting requirements.
Those cash flows are discounted using market yields
on HQ corporate bonds with terms to maturity that
match the expected timing of cash flows.

Provisions

Provisions are recognised when the Group has a legal
or constructive obligation, as a result of past events,
for which it is probable that an outflow of economic
benefits will result and that outflow can be reliably
measured. Provisions are measured at the best
estimate of the amounts required to settle the
obligation at the end of the reporting period.

Borrowings

Loans and borrowings are initially recognised at the
fair value of the consideration received, net of
transaction costs. They are subsequently measured
at amortised cost using the effective interest method.

Fees paid on the establishment of loan facilities are
recognised as transaction costs of the loan to the
extent that it is probable that some or all of the
facility will be drawn down.

Impairment of assets

At the end of each reporting period, the Group
assesses whether there is any indication that an asset
may be impaired.

information and
including dividends

The assessment will include considering external
internal sources of
sources of
information
from
received
subsidiaries, deemed to be out of pre-acquisition
profits. If such an indication exists, an impairment
test is carried out on the asset by comparing the
recoverable amount of the asset, being the higher of
the asset’s fair value less costs to sell, and its value in
use, to the asset’s carrying amount. Any excess of the
asset’s carrying value over its recoverable amount is
recognised immediately in profit or loss, unless the
asset
Any
is carried at a revalued amount.
impairment loss of a revalued asset is treated as a
revaluation decrease.

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.

Impairment testing is performed at least annually for
goodwill and intangible assets with indefinite lives.

Comparative figures

required

When
Standards,
comparative figures have been adjusted to conform
to changes in presentation for the current financial
year.

Accounting

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 ATO.

Receivables and payables are stated inclusive of the
amount of GST receivable or payable. The net
amount of GST recoverable from, or payable to, the
ATO is included with other receivables or payables in
the balance sheet.

Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or
financing activities which are recoverable from, or
payable to, the ATO are presented as operating cash
flows
in receipts from customers or
included
payments to suppliers.

Significant management judgement in applying
accounting policies

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

the

financial

preparing

When
statements,
management undertakes a number of judgements,
estimates and assumptions about the recognition and
measurement of assets,
income and
expenses.

liabilities,

Significant management judgement

are

following

The
significant management
judgements in applying the accounting policies of the
Group that have the most significant effect on the
financial statements.

Determination of Cash Generating Units for purpose
of impairment reviews

Determination of the Cash Generating Units (“CGUs”)
for purpose of impairment reviews is a key judgement
made by management. Management has undertaken
a formal assessment of what constitutes the CGUs, by
identifying the smallest identifiable group of assets
that generates cash
largely
independent of the cash inflows from other assets or
group of assets, being Training and Labour Hire.

that are

inflows

Recognition of deferred tax assets

The extent to which deferred tax assets can be
recognised
is based on an assessment of the
probability of the Group’s future taxable income
against which the deferred tax assets can be utilised.

these estimates relate to technical obsolescence that
may change the utility of certain software and IT
equipment.

Allowance for expected credit losses

The allowance for expected credit losses assessment
requires a degree of estimation and judgement. It is
based on the lifetime expected credit loss, grouped
based on days overdue, and makes assumptions to
allocate an overall expected credit loss rate for each
group. These assumptions
include recent sales
experience and historical collection rates.

Long service leave provisions

In determining the provision for employees’ long
service leave, consideration is given to the probability
an employee may not satisfy vesting requirements. In
doing this, management considers the likelihood of
employees reaching a qualifying period of service and
adjust the valuation for these estimated probabilities.

Long term incentive plan

the

long

determining

for
incentive

provision
term

In
senior
plan,
management’s
consideration is given to the probability the required
“earnings per share” performance requirement being
achieved to be remote, and therefore a provision has
not been recognised in relation to this.

Estimation uncertainty

Dividends

Information about estimates and assumptions that
have the most significant effect on recognition and
measurement of assets,
income and
expenses is provided below. Actual results may be
substantially different.

liabilities,

A liability is recognised for the amount of any
dividend declared, being appropriately authorised
and no longer at the discretion of the entity, on or
before the end of the financial year but not
distributed at balance date.

Impairment

rate

to discount

In assessing impairment, management estimates the
recoverable amount of each asset or cash-generating
unit based on expected future cash flows and uses an
Estimation
interest
uncertainty relates to assumptions about future
operating results and the determination of a suitable
discount rate. Both future operating results and
discount rates are discussed in Note 13. In 2019, the
Group recognised no impairment losses on goodwill
and/or other intangible assets (see Note 13).

them.

Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the
profit attributable to equity holders of the Company,
after deducting any costs of servicing equity other
than ordinary shares, by the weighted average
number of ordinary shares outstanding during the
in
financial year, adjusted for bonus elements
ordinary shares issued during the year.

Useful lives of depreciable assets

Management reviews its estimate of the useful lives
of depreciable assets at each reporting date, based
on the expected utility of the assets. Uncertainties in

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

Diluted earnings per share

Diluted earnings per share adjusts the figures used in
determination of basic earnings per share to take into
account the after income tax effect of interest and
financing costs associated with dilutive
other
potential ordinary shares and the weighted average
number of shares assumed to have been issued for no
consideration in relation to dilutive potential ordinary
shares.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

REVENUE AND OTHER INCOME

Operating activities:
Labour hire revenue
Training revenue

Other income:
Interest received
Sundry income

2019
$000

279,556
8,014
287,570

66
1,118
1,184

2018
$000

326,067
6,736
332,803

52
778
830

Disaggregation of revenue

The disaggregation of revenue from contracts with customers is as follows:

2019
Revenue

Labour Hire
$000

Training
$000

Total
$000

From external customers

279,556

8,014

287,570

Timing of revenue recognition
Services transferred over time
Services transferred at a point in time

268,294
11,262

279,556

8,014
-

8,014

276,308
11,262

287,570

AASB 15 was adopted using the modified retrospective approach and as such comparatives have not been
provided for disaggregation of revenue.

EXPENSES

Profit before income tax from continuing operations includes the following specific expenses:

Finance costs
Interest expense

Bank fees

Depreciation

Motor vehicles

Office equipment

Leasehold improvements

Amortisation

Customer contracts and relationships – amortisation

Course material

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

2019
$000

633

647

511

247

760

129

118

247

2018
$000

558

574

396

135

531

129

2019
$

150,000

2018
$

145,000

26,000

25,000

2019
$000
1,295

978

(162)

2,111

2018
$000
16

2,049

(17)

2,048

2018
$000
6,838

2,051

(17)

2,048

Notes to the Financial Statements

AUDITOR’S REMUNERATION

Auditor of the parent entity
Audit and review of financial reports under the Corporations Act 2001
- HLB Mann Judd Assurance (NSW) Pty Ltd
Total Remuneration

Other entities
In addition to the above, the related entities detailed in Note 24 have also
paid fees to the auditor(s) as follows:
Audit of financial reports
- HLB Mann Judd Assurance (NSW) Pty Ltd

INCOME TAX EXPENSE

5.
a. Components of tax expense for continuing operations

Current tax expense

Deferred tax – origination and reversal of temporary differences

Over provision of tax in prior year

Income tax expense

Reconciliation of prima facie tax on profit from ordinary activities to income tax expense

Net profit before tax from continuing operations

Prima facie tax expense on net profit from ordinary activities before income
tax at 30% (FY18: 30%)

Add / (less) Tax effect of:

– Entertainment

– Other

– Over provision of tax in prior year

Income tax expense

2019
$000
7,535

2,261

(162)

2,111

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate
entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when
compared with the previous reporting period.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

KEY MANAGEMENT PERSONNEL DISCLOSURES

Key management personnel compensation for the year was as follows

Short-term employee benefits

Post-employment benefits
Total

2019
$

1,631,379

81,196
1,712,575

2018
$

1,393,234

74,967
1,468,201

Individual director and key management personnel disclosures

Detailed remuneration disclosures are included in the Directors’ Report. The relevant information can be found
in the Remuneration section of the Directors’ Report on page 17 to 19, Tables 8 to 11.

CASH AND CASH EQUIVALENTS

Cash on hand

Cash at bank

TRADE AND OTHER RECEIVABLES

Current

Trade receivables

Allowance for expected credit losses

Other receivables

2019
$000
4

6,780

6,784

2019
$000

26,086

(10)

2,448

28,524

2018
$000
3

6,361

6,364

2018
$000

25,151

(555)

5,171

29,767

Ageing of trade receivables (before allowing for impairment of receivables) at year end is detailed below

Current

Past due 0 – 30 days (not considered impaired)

Past due 31 – 60 days (not considered impaired)

Past due 60+ days (not considered impaired)

Past due 60+ days (considered impaired (b))

2019
$000
19,147

4,582

1,001

1,346

26,086

2018
$000
18,371

4,834

1,085

306

555

25,151

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

The movement in the allowance for expected credit losses in respect of trade receivables is detailed below

Balance at beginning of year

Increase/(decrease) in allowance recognised in profit or loss

Amounts written-off

Balance at end of year

CONTRACT ASSETS

Current

Contract assets

10. OTHER ASSETS

Current

Prepayments

Deposits

Bank guarantee1

2019
$000
555

(92)

(453)

2019
$000

571

2019
$000

939

505

1,444

2018
$000
1,250

(757)

555

2018
$000

422

505

927

Note:
1. As at balance date the company had bank guarantees of $330,276 relating to property leases. The $504,635 represents a restricted bank

account to cover the company’s total available guarantee facility of $504,635.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

11. PROPERTY, PLANT AND EQUIPMENT

Motor vehicles

Cost

Accumulated depreciation

Office equipment

Cost

Accumulated depreciation

Leasehold improvements

Cost

Accumulated depreciation

Capital works in progress

Cost

Total property, plant and equipment

a. Movement in carrying amounts of property, plant and equipment

2019
$000

148

(116)

4,725

(3,784)

941

1,968

(1,818)

150

1,140

2019
Balance at 2 July 2018

Additions/(transfers)

Disposals

Depreciation expense – continuing operations

Balance at 30 June 2019

2018
Balance at 1 July 2017

Additions/(transfers)

Disposals

Depreciation expense – continuing operations

Balance at 1 July 2018

Motor
vehicles
$000
-

Office
equipment
$000
1,032

Leasehold
improvements
$000
240

Capital Work
In Progress
$000
75

(2)

466

(46)

(511)

941

157

(247)

150

(58)

Motor
vehicles
$000
-

Office
equipment
$000
797

Leasehold
improvements
$000
198

Capital Work
In Progress
$000
264

642

(11)

(396)

1,032

180

(3)

(135)

240

(189)

2018
$000

114

(114)

4,944

(3,911)

1,033

1,810

(1,571)

239

1,347

Total
$000
1,347

657

(104)

(760)

1,140

Total
$000
1,259

822

(203)

(531)

1,347

The Group’s property, plant and equipment are encumbered by a fixed and floating charge as security for the
group’s working capital facility (Refer Note 16).

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

12.

INTANGIBLE ASSETS

Goodwill

Cost

Impairment (note 13)

Net carrying value

Customer relationships/Licences

Cost

Impairment (note 13)

Accumulated amortisation

Net carrying value

Brand names

Cost

Impairment (note 13)

Net carrying value

Intellectual property

Cost

Impairment (note 13)

Accumulated amortisation

Net carrying value

Total intangible assets

2019
$000

65,256

(62,474)

2,782

2,062

(918)

(907)

237

4,640

(4,640)

8,132

(3,896)

(4,055)

181

3,200

Intangible assets – detailed reconciliation

2019
Balance at 2 July 2018

Capitalised course materials

Amortisation – continuing operations

Balance at 30 June 2019

2018
Balance at 1 July 2017

Capitalised course materials

Amortisation – continuing operations

Balance at 1 July 2018

Customer
Relationships
and Licences
$000
366

(129)

237

Customer
Relationships
and Licences
$000
495

(129)

366

Goodwill
$000
2,782

2,782

Goodwill
$000
2,782

2,782

Brand
Names
$000
-

Intellectual
Property
$000
-

299

(118)

181

Brand
Names
$000
-

Intellectual
Property
$000
-

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

2018
$000

65,256

(62,474)

2,782

2,062

(918)

(778)

366

4,640

(4,640)

7,833

(3,896)

(3,937)

3,148

Total
$000
3,148

299

(247)

3,200

Total
$000
3,277

(129)

3,148

Notes to the Financial Statements

13.

IMPAIRMENT

Impairment

The consolidated entity tests whether goodwill and other intangible assets have suffered any impairment on an
annual basis, or more frequently, if required.

All remaining goodwill and other intangibles are confined to the Labour Hire division, with all earlier amounts
previously attributed to the Training division being fully impaired across both the FY16 and FY17 financial years.

There were no indicators of impairment in relation to the Labour Hire division at 30 June 2019.

Labour Hire division

The recoverable amount of the Labour Hire division has been determined based on a value in use calculation.
That calculation uses cash flow projections based on financial forecasts approved by management for FY20 and
a pre-tax discount rate of 18.7 per cent. Cash flows beyond that period have been held constant, reflecting the
competitive nature of the industry.

Management’s key assumption is that revenues for the Labour Hire division will increase by 7.5% in FY20. EBITDA
margin is forecast at 4.1% (before corporate overhead allocations).

The recoverable amounts of the CGUs were determined based on value-in-use calculations, covering detailed
forecasts for five years, followed by an extrapolation of expected cash flows for the units’ remaining useful lives
using the growth rates determined by management. The present value of the expected cash flows of each
segment is determined by applying a suitable discount rate.

Long term growth rates after the forecast period and discount rates used were as follows:

Labour Hire

Terminal Growth rates

Pre-tax discount rates

30 June 2019
0%

1 July 2018
0%

30 June 2019
18.7%

1 July 2018
18.7%

The growth rate reflects management’s view of longer-term average growth rates for the respective sectors. The
discount rate reflects appropriate adjustments relating to market risk and specific risk factors of each unit.

Impairment charges

As a result of the analysis, there is no need for any impairment charges in the FY19 results. The same analysis in
the prior year resulted in no impairment charge being recorded in the FY18 results.

Movements in the net carrying amount of goodwill and other intangibles are presented in note 12a.

The amount of goodwill, brand names and other intangibles remaining by CGU and subject to future
impairment testing is as follows:

2019

Training

Labour Hire

Total

Goodwill
$’000

2,782

Customer
Relationships/
Licences
$’000
-

237

Brand Names
$’000

Intellectual
Property
$’000

181

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Total
$’000

181

3,019

3,200

Notes to the Financial Statements

2018

Training

Labour Hire

Total

Sensitivity analysis

Goodwill
$’000

2,782

Customer
Relationships/
Licences
$’000
-

366

Brand Names
$’000

Intellectual
Property
$’000

Total
$’000

3,148

Management has also run various sensitivity scenarios, primarily reviewing sensitivity of outcomes to FY19
EBITDA forecasts, long term growth rates and discount rates. In respect of reasonably possible changes in the
key assumptions, major sensitivities are summarised as follows:

Change in VIU

Sustainable EBITDA margin; +/- $0.5 million each CGU

1% increase or decrease in long term growth rate

1% increase or decrease in pre-tax discount rate

Labour hire CGU
$’M

+/-3.0

+/-2.0

+/-3.0

14. TAX BALANCES

Current assets

Income tax receivable

Non-current assets

Deferred tax assets (a)

Current tax liabilities

Income tax payable

Non-current liabilities

Deferred tax liabilities (a)

2019
$000

2018
$000

3,602

5,398

307

964

1,782

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

a. Deferred tax assets and liabilities

Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:

Balance at
Beginning of
the Year
$000

Recognised in
Other
comprehensive
income
$000

Recognised
in Business
Combination
$000

Recognised
in Profit &
Loss
$000

Balance at
End of the
Year
$000

(1,505)

315

2,842

1,398

540

3,616

785

(171)

(97)

(805)

(154)

(540)

(978)

(720)

(171)

(71)

319

2,037

1,244

2,638

Balance at
Beginning of
the Year
$000

Recognised in
Other
comprehensive
income
$000

Recognised
in Business
Combination
$000

Recognised
in Profit &
Loss
$000

Balance at
End of the
Year
$000

2019

Current assets

Trade, other receivables and other
assets

Contract assets

Non-current assets

Intangible assets

Property, plant and equipment

Current liabilities

Trade and other payables

Provision

2016 Tax loss carried forward

Deferred tax asset

Total

2018

Current assets

Trade, other receivables and other
assets

(1,241)

Non-current assets

Intangible assets

Property, plant and equipment

Current liabilities

Trade and other payables

Provision

2016 Tax loss carried forward

Deferred tax asset

Total

593

4,333

909

1,071

5,665

(264)

(1,505)

(278)

(1,491)

489

(531)

(2,049)

315

2,842

1,398

540

3,616

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

15. TRADE AND OTHER PAYABLES

Current

Trade payables

Accrued expenses

GST payable

Sundry creditors

2019
$000

833

4,359

2,641

6,067

13,900

2018
$000

1,650

5,009

2,274

6,780

15,713

The average credit period on purchases of certain products and services is 30 days. No interest is charged on
trade payables. The group has financial risk management policies in place to ensure that all payables are paid
within the credit time frame.

16. BORROWINGS

Group credit facility

Total facilities at reporting date

Working capital facility

Used at reporting date

Bank overdraft

Unused at reporting date

Working capital facility

2019
$000

5,000

2018
$000

5,000

On 6 August 2018, the Company announced it had extended its $5 million working capital facility through
Shrimpton Holdings Pty Limited, out for a further period to 31 January 2020, in line with the conditions outlined
in the revised ASX Listing Rule Waiver as granted 1 August 2018.

Shrimpton Holdings has fixed and floating charges over the Group’s assets, subject to conditions outlined by a
separate agreement between Ashley Services Group Limited and Shrimpton Holdings Pty Limited in line with the
ASX Listing Rule Waiver as granted 1 August 2018.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

17. PROVISIONS

Current

Employee benefits (a)

Provision for discontinued operation (b)

Total

Non-current

Employee benefits (a)

Provision for discontinued operation (b)

Total

a. Reconciliation of employee provisions

Opening balance

Less: leave taken during the year

Add: leave provided for during the year

Closing balance

b. Provision for discontinued operation

2019
$000

1,993

302

2,295

491

684

1,175

2019
$000

2,891

(1,657)

1,250

2,484

2018
$000

2,169

604

2,773

722

1,162

1,884

2018
$000

2,728

(1,343)

1,506

2,891

During the second half of financial year ended 30 June 2017, the Board approved an orderly exit from the
international and domestic hospitality student business originally acquired through the SILK acquisition in April
2015. The Group has fulfilled its obligations for the remaining students and the Registered Training Organisation
(“RTO”) has been deregistered through the Australian Skills Quality Authority (“ASQA”).

The $0.99 million provision at 30 June 2019 (FY18: $1.77 million) represents the discounted cost of future surplus
lease obligations.

18. SHARE CAPITAL

The Company does not have any share options on issue as at the date of this report. Details of share capital of
the group are as follows:

143,975,904 (FY18: 143,975,904) fully paid ordinary shares

Share issue costs

Share capital

Performance rights

a. Ordinary shares

30 Jun 2019
$000
154,234

(5,419)

1 Jul 2018
$000
154,234

(5,419)

148,815
30 Jun 2019
Number of rights
0

148,815
1 Jul 2018
Number of rights
344,736

The reduction in Share Capital from 150,000,000 shares ($149.9m) at 30 Jun 16 to 143,975,904 shares ($148.8m)
net of share issue costs at 30 June 2019 was the result of the cancellation of 6,024,096 shares issued by way of
consideration to fund the purchase of Integracom as approved by shareholders at the AGM of 9 November 2016.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

Ordinary shares confer on their holders the right to participate in dividends declared by the Board. Ordinary
shares confer on their holders an entitlement to vote at any general meeting of the Company.

b. Performance rights

During the financial year ended 30 June 2019 the Group cancelled 344,736 Performance Rights for Nil
consideration. This followed on from the cancellation of 206,842 Performance Rights for Nil consideration during
the financial year 1 July 2018.

As at 30 June 2019 their remains Nil Performance Rights on issue.

None of the performance hurdles for the 2015 and 2016 plans have been met and accordingly no expense has
been recognised in the profit and loss account for either the year ended 30 June 2019 or 1 July 2018.

The plan has been suspended for the financial years ending 30 June 2017, 1 July 2018 and 30 June 2019.

19. COMMON CONTROL RESERVE

The common control reserve has arisen following the adoption of the pooling of interests method used to
account for the 1 July 2014 acquisition of the following entities:
•
•
•
•
•

ADV Services Pty Limited;
Ashley Institute Holdings Pty Limited;
TBRC Holdings Pty Limited;
Tracmin Pty Limited; and
Australian Institute of Vocational Development Pty Limited.

20. EARNINGS PER SHARE

Net profit after tax
Weighted number of ordinary shares outstanding during the year used in
calculating basic earnings per share (EPS)
Weighted number of ordinary shares outstanding during the year used in
calculating diluted earnings per share (EPS)

Basic earnings per share (cents) from continuing operations
Diluted earnings per share (cents) from continuing operations
Basic earnings per share (cents) from discontinued operations

Diluted earnings per share (cents) from discontinued operations
Basic earnings per share (cents) Total

Diluted earnings per share (cents) Total

2019
$000
5,424

2018
$000
4,789

143,975,904

3.77
3.77
-

-
3.77

3.77

3.33
3.33
-

-
3.33

3.33

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

21. SEGMENT INFORMATION

The Group’s management identifies two operating segments, Labour Hire and Training, representing the main
products and services provided by the Group. During the financial year ended 30 June 2019, there have been no
changes from prior periods in the measurement methods used to determine operating segments and reported
segment profit or loss. The revenues and profit generated by each of the Group’s operating segments are
summarised as follows:

2019
Revenue

From external customers
Segment revenue
Other income

Employment cost
Depreciation and amortisation expense

Finance costs
Other expenses
Segment Profit

Unallocated items
Profit before income tax

Income tax expense
Profit after income tax
Other comprehensive income
Total comprehensive income for the year from continuing
operations

2018
Revenue

From external customers
Segment revenue

Other income
Employment cost
Depreciation and amortisation expense

Finance costs
Other expenses
Segment Profit

Unallocated items
Profit before income tax

Income tax expense
Profit after income tax

Other comprehensive income
Total comprehensive income for the year from continuing
operations

Labour Hire
$000

Training
$000

Total
$000

279,556
279,556
995

(266,157)
(460)

(134)
(2,926)
10,874

8,014
8,014
123

(5,778)
(222)

(3)
(1,314)
820

Labour Hire
$000

Training
$000

326,067
326,067

594
(312,006)
(335)

(18)
(2,865)

11,437

6,736
6,736

182
(4,683)
-

(4)
(2,185)

287,570
287,570
1,118

(271,935)
(682)

(137)
(4,240)
11,694

(4,159)
7,535

(2,111)
5,424
-

5,424

Total
$000

332,803
332,803

776
(316,689)
(335)

(22)
(5,050)

11,483
(4,645)
6,838

(2,049)
4,789

-
4,789

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

No segments assets or liabilities are disclosed because there is no measure of segments assets or liabilities
regularly reported to Management and to the Board.

Information about major customers

Included in revenues from external customers are revenues of $90.5 million (2018: $143.3 million) which arose
from sales to 2 (2018: 3) of the Group’s customers whose individual revenue exceeds 10% of total revenue in the
Labour Hire segment. Sales to these 2 customers were $59.7 million and $30.8 million respectively (2018: $57.9
million, $54.4 million and $31.0 million respectively).

There are no customers whose individual revenue exceeded 10% of total revenue in the Training segment in
either financial year.

22. CASH FLOW INFORMATION

Reconciliation of cash flow from operations to profit after income tax

Profit for the year

Cash flows excluded from profit attributable to operating
activities

Adjustments for non-cash items:
- Depreciation and amortisation expense

- Bad and doubtful debts

- Profit on disposal of fixed assets

- Changes in assets and liabilities

- Decrease/(increase) in trade and other receivables

- Decrease/(increase) in contract assets

- Decrease/(increase) in other assets

- Decrease/(increase) in deferred tax asset

- (Decrease)/increase in trade and other payables

- (Decrease)/increase in provisions

- (Decrease)/increase in current tax receivables

- (Decrease)/increase in current tax liabilities

- (Decrease)/increase in deferred tax liabilities

Net cash from operating activities

23. BUSINESS COMBINATION

2019
$000
5,424

1,007

(90)

1,200

(571)

(517)

1,796

(1,813)

(1,187)

307

(818)

4,752

2018
$000
4,789

660

(3)

(3,148)

523

1,883

(1,371)

(120)

(285)

166

3,156

The Group made no acquisitions during the financial year ended 30 June 2019 and also the previous financial
year ended 1 July 2018.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

24. CONTROLLED ENTITIES

Set out below are the controlled entities of Ashley Services Group Limited:

Country of
incorporation

2019 percentage
owned
%

2018 percentage
owned
%

Action Arndell Park Pty Limited
Action Botany Pty Limited

Action James (Qld) Pty Limited
Action James Mascot Pty Limited

Action James NSW Pty Limited
Action James Parramatta Pty Limited
Action James WCF Pty Limited

Action James Western Suburbs Pty Limited
Action Job Support Pty Limited
Action Merchandising Pty Ltd1
Action MMX Pty Limited
Action Workforce AC Pty Limited

Action Workforce ACT Pty Limited
Action Workforce BAX1 Pty Limited
Action Workforce CAT Pty Limited

Action Workforce COL1 Pty Limited
Action Workforce COS1 Pty Limited

Action Workforce COT Pty Limited
Action Workforce IMT Pty Limited
Action Workforce LIN1 Pty Limited

Action Workforce NSW Pty Limited
Action Workforce OS Pty Limited
Action Workforce OSI1 Pty Limited

Action Workforce OST Pty Limited
Action Workforce Pty Limited

Action Workforce T1 Pty Limited
Action Workforce T2 Pty Limited
Action Workforce VAPS Pty Limited

Action Workforce VER1 Pty Limited
Action Workforce Victoria Pty Limited

Action Workforce VM Pty Limited
Action Workforce VPS Pty Limited
ADV Services Pty Limited

ADV1 Pty Limited
ADV2 Pty Limited
ADV3 Pty Limited

ADV4 Pty Limited
ADV5 Pty Limited

ADV6 Pty Limited

Australia
Australia

Australia
Australia
Australia

Australia
Australia

Australia
Australia
Australia

Australia
Australia

Australia
Australia
Australia

Australia
Australia

Australia
Australia
Australia

Australia
Australia

Australia
Australia
Australia

Australia
Australia

Australia

100
100

100
100
100

100
100

100
100
100

100
100

100
100
100

100
100

100
100
100

100
100

100
100
100

100
100

100

100
100

100
100
100

100
100
-

100
100

100
100
100

100
100

100
100
100

100
100

100
100
100

100
100

100
100
100

100
100

100

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

Country of
incorporation

2019 percentage
owned
%

2018 percentage
owned
%

ADV7 Pty Limited

ADV8 Pty Limited
ADV9 Pty Limited
Advance BGT Pty Limited

Advance Exchange Pty Limited
Advance GW Pty Limited

Advance GX Pty Ltd
Advance KM Pty Limited
Advance LLA Pty Limited

Advance MAN Pty Limited
Advance MIX Pty Limited

Advance Recruitments Pty Limited
Advance WL Pty Limited
Advance WLE Pty Limited
Advance WLT Pty Limited
Advance WMPM Pty Limited
AIVD Holdings Pty Limited
ASG Integracom (AUST) Holdings Pty Limited
ASG Integracom (AUST) Pty Limited
Ash Pty Limited
Ashley Apprenticeship Network Pty Limited
Ashley Institute Holdings Pty Limited
Australian Institute of Vocational Development Pty Limited
AWF Training 1 Pty Limited
AWF Training 2 Pty Limited
AWF Training 3 Pty Limited
AWF Training 4 Pty Limited
AWF Training 5 Pty Limited
Cantillon Holdings Pty Limited
Capra Ryan Online Learning Pty Limited

College of Innovation and Industry Skills Pty Limited
Concept AWF Pty Limited (formerly Advance TR Pty Limited)
Concept Employment (Aust) Pty Limited
Concept Engineering (Aust) Pty Limited
Concept Project Resources Pty Limited (formerly Action
Workforce VPN Pty Limited)
Concept Recruitment Specialists Pty Ltd2
CP Action Electronics Pty Limited
CP Action Workforce Pty Limited
ECA Chullora Pty Limited
ECA Plastics Pty Limited
Executive Careers Australia Pty Limited
Global Education and Training Group Pty Limited
Integracom Holdings Pty Limited
Integracom Unit Trust
James Personnel Pty Limited

Australia

Australia
Australia
Australia

Australia
Australia

Australia
Australia
Australia

Australia
Australia

Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia

Australia
Australia
Australia
Australia
Australia

Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia

100

100
100
100

100
100

100
100
100

100
100

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

100
100
100
100
100

100
100
100
100
100
100
100
100
100
100

100

100
100
100

100
100

100
100
100

100
100

100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100

100
100
100
100
100

-
100
100
100
100
100
100
100
100
100

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

Country of
incorporation
Australia
Australia
Australia

James Warehousing Pty Limited
Logistics People Pty Limited (formerly Action WA Pty Limited)
Qualitas Education Pty Limited (formerly Advance LSA Pty
Limited)
Silk Group Holdings Pty Limited
TBRC Holdings Pty Limited
The Blackadder Recruitment Company Pty Limited
Tracmin Holdings Pty Limited
Tracmin Pty Limited
Training Support Group Pty Limited
Vocational Training Australia Pty Limited
Notes:
1. Action Merchandising Pty Ltd was a company incorporated on 4 January 2019.
2. Concept Recruitment Specialists Pty Ltd was a company incorporated on 6 June 2019.

Australia
Australia
Australia
Australia
Australia
Australia
Australia

25. PARENT ENTITY DISCLOSURES

Financial position

Assets
Current assets
Non-current assets

Total assets
Liabilities
Non-current liabilities

Total liabilities
Net assets

Equity
Share capital
Common control reserve

Accumulated losses
Total equity

Statement of profit or loss and other comprehensive income

Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income/(loss)

2019 percentage
owned
%
100
100
100

2018 percentage
owned
%
100
100
100

100
100
100
100
100
100
100

2019
$000

92
17,028

17,120

(3,599)

(3,599)
13,521

100
100
100
100
100
100
100

2018
$000

92
17,028

17,120

-
17,120

148,815
(57,687)

(77,607)
13,521

148,815
(57,687)

(74,008)
17,120

2019
$000

-
-
-

2018
$000

(724)
-
(724)

Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

The Parent entity and some of its subsidiaries are party to a deed of cross guarantee under which each company
guarantees the debts of the others. No deficiencies of assets exist in any of these subsidiaries.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

Contingent liabilities of the Parent Entity

The Parent entity had no other known material contingent liabilities as at 30 June 2019.

Commitments for expenditure for the Parent entity

The Parent entity had Nil committed expenditure as at 30 June 2019 (1 July 2018: Nil).

26. DEED OF CROSS GUARANTEE

The following entities have entered into a deed of cross guarantee dated 22 February 2018 under which each
company guarantees the debts of the others:







Ashley Services Group Limited
Action Workforce Pty Limited
ADV6 Pty Limited
Ashley Institute Holdings Pty Ltd
Concept Engineering (Aust) Pty Ltd

By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare
financial statements and directors' report under Corporations Instrument 2016/785 issued by the Australian
Securities and Investments Commission.

The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there
are no other parties to the deed of cross guarantee that are controlled by Ashley Services Group Limited, they
also represent the 'Extended Closed Group'.

Statement of profit or loss and other comprehensive income

Extended Closed Group

Revenue

Other Income
Employment costs
Depreciation and amortisation expense

Finance costs
Other expenses
Profit before income tax

Income tax expense
Profit after income tax

Other Comprehensive Income
Total comprehensive income for the year

20191
$000
268,294

995
(255,750)
(413)

(134)
(2,737)
10,255

(3,076)
7,179

-
7,179

20181
$000
315,052

594
(301,657)
(287)

(18)
(3,286)
10,398

(3,119)
7,279

-
7,279

Notes:
1. The Statement of profit or loss and other comprehensive income for the extended group is presented for the financial year ended 30
June 2019 and 1 July 2018, as it is deemed that this information is more relevant to users of the financial report than if the period 22
February 2018 to 1 July 2018 was presented.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

Statement of Financial position

Extended Closed Group

Assets

Current assets

Cash and cash equivalents

Trade and other receivables

Other assets

Total current assets

Non-current assets

Trade and other receivables

Property, plant and equipment

Deferred tax assets

Other

Total non-current assets

Total assets

Liabilities

Current liabilities

Trade and other payables

Dividend payable

Current tax payable

Provisions

Total current liabilities

Non-current liabilities

Deferred tax liabilities

Provisions

Total non-current liabilities

Total liabilities

Net assets

Equity

Share capital

Common control reserve

Retained earnings/(accumulated losses)

Total Equity

30 Jun 2019
$000

1 Jul 2018
$000

2,297

27,681

883

30,861

83,616

550

3,485

17,028

104,679

135,540

27,151

3,599

9,575

1,480

41,805

(114)

372

258

42,063

93,477

148,815

(57,687)

2,349

93,477

4,571

28,318

161

33,050

71,755

800

3,485

17,028

93,068

126,118

27,095

6,783

1,707

35,585

(114)

557

443

36,028

90,090

148,815

(57,687)

(1,038)

90,090

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

Equity – retained profits

Extended Closed Group

Retained profits at the beginning of the financial year

Adjustment to opening retained profits

Profit after income tax expense

Dividends paid

Retained profits/(accumulated losses) at the end of the
financial year

Contingent liabilities of the Extended Closed Group

30 Jun 2019
$000
(1,038)

(193)

7,179

(3,599)

2,349

1 Jul 2018
$000
(7,325)

(992)

7,279

(1,038)

The Extended Closed Group had no other known material contingent liabilities as at 30 June 2019.

Commitments for expenditure for the Extended Closed Group

The Extended Closed Group had Nil committed expenditure as at 30 June 2019 (1 July 2018: Nil).

Going Concern and Financial Support

The financial statements of the Extended Closed Group have been prepared on a going concern basis. The
directors have provided a letter of financial support confirming that each of the below listed companies within
the Ashley Services group Limited and controlled entities agrees to provide whatever financial support is
necessary to ensure each entity will be able to continue as a going concern and pays its debts as and when they
fall due and payable.

The financial support covers the following entities:

•
•
•
•
•
•
•

Ashley Services Group Limited;
Action Workforce Pty Limited;
Concept Engineering (Aust.) Pty Ltd;
ASH Pty Ltd;
Vocational Training Australia Pty Ltd;
Australian Institute of Vocational Development Pty Ltd; and
Tracmin Pty Ltd.

The financial support includes but is not limited to the actions as noted below:

•
•
•

not calling on related party loans;
agreeing to any cost re-allocations or management fee re-charges; and
agreeing to debt forgiveness with any related entity.

The undertaking remains current until the date on which the directors approve the financial statements of the
Group for the financial year ending 30 June 2019. The directors are satisfied that collectively the Group has the
financial ability to provide this support.

Security Offered

Shrimpton Holdings has fixed and floating charges over the Extended Closed Group’s assets, subject to conditions
outlined by a separate agreement between Ashley Services group Limited, the parent company, and Shrimpton
Holdings Pty Limited in line with the ASX Listing Rule Waiver as granted 1 August 2018.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

27. RELATED PARTY TRANSACTIONS

Parent company

There is no ultimate parent company for Ashley Services Group Limited.

Transactions with related entities

Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.

Transactions with related parties are as follows:

Rent and outgoings paid or payable to Shrimpton Holdings Pty Limited as trustee for the
Shrimpton Family Trust, an entity which is controlled by Mr Ross Shrimpton for the head office
at Arndell Park, New South Wales1

Loan balances from entities associated with Mr Ross Shrimpton.
Interest and line fee paid to Shrimpton Holdings Pty Limited, an entity which is controlled by
Mr Ross Shrimpton

20192
$

116,454

175,169

Fees payable to Trood Pratt & Co (of which Ian Pratt is a Partner) for taxation services
Note:
1. 2018 amount is for Outgoings only whilst 2019 amount includes Rent/Outgoings payment for FY19 ($116,454).
2. All amounts as shown are exclusive of GST.

37,484

20182
$

3,125

199,706

83,170

28. SECURED AND CONTINGENT LIABILITIES

For assets pledged as security for borrowing facilities see Note 16.

The Group had no other known contingent liabilities at 30 June 2019.

29. FINANCIAL INSTRUMENTS

Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the
basis of measurement and the basis on which income and expenses are recognised, in respect of each class of
financial asset and financial liability are disclosed in Note 1 to the financial statement.

Financial risk management objectives

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s financial
management framework. The Board has an established Audit and Risk Management Committee which is
responsible for developing and monitoring the Group’s financial management policies. The Committee provides
regular reports to the Board of Directors on its activities.

The Audit and Risk Management Committee oversees how management monitors compliance with risk
management policies and procedures and reviews the adequacy of the risk management framework in relation
to the risks.

The main risks arising from the Group’s financial instruments are market risk (including fair value interest rate
risk), credit risk and liquidity risk. The Board reviews and approves policies for managing each of these risks.

The Audit and Risk Management Committee oversees how management monitors compliance with risk
management policies and procedures and review the adequacy of the risk management framework in relation
to the risks. The Group does not enter into or trade financial instruments, including derivative financial
instruments, for speculative purpose.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

c. Market risk

Interest rate risk

The Group is exposed to interest rate risk associated with borrowed funds at floating interest rates. During the
financial year, risks associated with interest rate movements were monitored by the Board; however, no hedging
instruments were considered necessary to manage the risk.

The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk
management section of this note.

Interest rate sensitivity

The sensitivity analyses below have been determined based on the exposure to interest rates at the reporting
date and the stipulated change taking place at the beginning of the financial year and held constant throughout
the reporting period. A 100 basis point increase or decrease is used when reporting interest rate risk internally
to key management personnel and represents management’s assessment of the possible change in interest
rates.

At the reporting date, if interest rates had been 100 basis points higher or lower and all other variables were held
constant, the effect on the Group would be as follows:

Change in profit

Increase in interest rates of 1%

Decrease in interest rates of 1%

Change in equity

Increase in interest rates of 1%

Decrease in interest rates of 1%

Credit risk

2019
$000

(91)

2018
$000

(78)

Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial
loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining
sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.

Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on the
financial condition of accounts receivable.

The carrying value of trade receivables recorded in the financial statements, net of any impairment allowances,
represents the Group’s maximum exposure to credit risks.

The Group does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The credit risk on liquid funds is limited because the counter parties
are a reputable bank with high quality external credit ratings.

The maximum credit risk exposure of financial assets is their carrying amount in the financial statements.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Managing Director and Board of Directors,
who have built an appropriate liquidity risk management framework for the management of the Group’s short,
medium and long-term funding and liquidity management requirements.

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
facilities by continuously comparing actual cash flows with forecasts and matching the maturity profiles of

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

financial assets and liabilities. Included in Note 16 is a listing of additional undrawn facilities that the Group has
at its disposal to further reduce liquidity risk.

Liquidity and interest risk tables

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities.
The table has been presented based on the undiscounted cash flows of financial liabilities based on the earliest
date on which the Group may be required to pay. The table includes both interest and principal cash flows.

Financial liabilities

2019
Trade and other payables
Borrowings – working capital facility

Total

2018
Trade and other payables
Borrowings – working capital facility

Total

Fair value of financial instruments

Weighted average
effective interest
rate %

n/a
5.85%

Weighted average
effective interest
rate %

n/a
5.85%

Within 1 year
$000

1 to 5 years
$000

Over 5 years
$000

13,900
-

13,900

-
-

Within 1 year
$000

1 to 5 years
$000

Over 5 years
$000

15,713
-

15,713

-
-

Total
$000

13,900
-

13,900

Total
$000

15,713
-

15,713

Financial assets and financial liabilities measured at fair value in the statement of financial position are grouped
into three levels of a fair value hierarchy. The three levels are defined based on the observability of significant
inputs to the measurement, as follows:

•

level 1 – the fair value of financial assets and financial liabilities with standard terms and conditions and
traded on active liquid markets is determined with reference to quoted market prices;
level 2 – the fair value of other financial assets and liabilities is determined in accordance with generally
accepted pricing models based on discounted cash flow analysis using prices from observable current
market transactions; and
level 3 – where quoted prices are not available, use is made of discounted cash flow analysis using the
applicable yield curve for the duration of the instruments for non-optional derivatives, and option pricing
models for optional derivatives.

The Directors consider that the carrying amounts of financial assets and financial liabilities recorded at amortised
cost in the financial statements approximate their fair values.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

30. OPERATING LEASE COMMITMENTS

Leases as lessee

Non-cancellable operating lease rentals are payable as follows:

Leases as lessee

Less than one year
Between one and five years
Total
Note:
1. All amounts as shown are exclusive of GST.

20191
$000

1,384
1,756
3,140

20181
$000

1,400
2,588
3,988

The Group leases a number of offices under operating leases. The leases run over varying periods, some with
option periods. Some of the leases have fixed rate rental periods, and some have market rate rental adjustments.

31. EVENTS AFTER THE REPORTING DATE

No matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the Group, the results of those operations, or the state of affairs of the
Group in future financial years, except for the following:

On 9 August 2019 the Group declared a fully franked final dividend of 2.7 cents in relation to the financial year
ended 30 June 2019, with a payment date of 6 September 2019.

32. EMPLOYEE SHARE RIGHTS PLAN

The Company implemented a performance rights share plan for its executives, which operated during the
financial years ended 30 June 2015 and 30 June 2016. The terms of the 2016 Performance Plan have been
outlined in the Directors’ Report (Table 7) within this Annual Report.

The plan has been suspended for the financial years ending 30 June 2017, 1 July 2018 and 30 June 2019. No
Performance Rights were issued during the financial years ended 30 June 2019 or 1 July 2018, see Note 18b.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Notes to the Financial Statements

33. DIVIDENDS
a.

Ordinary shares

On 26 July 2018 the Group declared a fully franked final dividend of 2.5 cents in relation to the financial year
ended 1 July 2018 (FY17: Nil).

Franking credits

Franking credits available for subsequent financial years based on a tax rate of 30%
(2018: 30%)

2019
$000

332

2018
$000

742

The balance of the franking accounts includes:
•
•
•
•

franking credits that arose from the payment of the amount of the provision for income tax;
franking debits that arise from the refund of the amount of the provision for income tax;
franking debits that arise from the payment of dividends recognised as a liability at the reporting date; and
franking credits that arise from the receipt of dividends recognised as receivables at the reporting date.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

ASX Additional Information

Set out below is additional information as required by the ASX Limited Listing Rules and not disclosed elsewhere
in this report. This information is effective as at 16 August 2019.

Number of security holders and securities on issue

Quoted equity securities

Ashley Services has on issue 143,975,904 fully paid ordinary shares which are held by 633 shareholders.

Voting rights

Quoted equity securities

The voting rights attached to fully paid ordinary shares are that on a show of hands, every member present, in
person or proxy, has one vote and upon a poll, each share shall have one vote.

Distribution of security holders

Quoted equity securities

Ordinary fully paid ordinary shares

Holding

1 – 1,000
1,001 – 5,000
5,001 – 10,000

10,001 – 100,000
100,001 and over
Total

Unmarketable parcel of shares

Number of shareholders

Number of shares

164
152
63

190
64
633

122,479
351,797
496,716

7,326,185
135,678,727
143,975,904

0.09
0.24
0.34

5.09
94.24
100.00

The number of shareholders holding less than a marketable parcel of Fully Paid Ordinary shares is 221 with a
total number of shares held is 188,499.

Substantial Shareholders

The number of securities held by substantial shareholders and their associates are set out below:

Fully Paid Ordinary Shares

Name

Ross Shrimpton
JP Morgan Nominees Australia Limited ATF Viburnum Funds Pty Ltd

Number

80,279,030
10,869,941

55.76%
7.55%

Unquoted equity securities

There are no unquoted shares.

On-market buy-back

There is no current on-market buy-back.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

ASX Additional Information

Twenty largest shareholders

Fully paid ordinary shares

Details of the 20 largest shareholders of quoted securities (grouped) by registered shareholding are:

Name
Mr Ross Shrimpton
JP Morgan Nominees Australia Limited

HSBC Custody Nominees (Australia) Limited
BNP Paribas Nominees Pty Ltd

Hishenk Pty Ltd
JJC Group (Aust) Pty Ltd
Action James Holdings Pty Limited

Aust Executor Trustees Ltd
Mr Marc Shrimpton
Moat Investments Pty Ltd

Kingston Properties Pty Limited
Mr Andrew Douglas Shrimpton

Velkov Funds Management Pty Ltd
Wide Eagle Pty Ltd
Mrs Kerry Elizabeth Draffin

Mr Mark Christopher Garrick
Mr Richard Ewan Bromley Mews

Gailforce Marketing & PR Pty Limited
Mr Dean Michael Shrimpton
Mr Christopher John McFadden & Mrs Toula McFadden

Aust Executor Trustees Ltd
Total

Annual General Meeting

Number of shares
80,279,030
11,211,480

5,457,230
4,122,416

3,300,000
3,005,832
2,467,275

1,582,009
1,500,000
1,484,507

1,390,122
1,275,000

1,000,000
1,000,000
949,834

896,618
750,000

820,001
632,388
630,630

589,575

%
55.76%
7.79%

3.79%
2.86%

2.29%
2.09%
1.71%

1.10%
1.04%
1.03%

0.97%
0.89%

0.69%
0.69%
0.66%

0.62%
0.52%

0.57%
0.44%
0.44%

0.41%

124,343,947

86.36%

The annual general meeting of the Company will be held at the company’s offices at Level 10, 92 Pitt Street
Sydney NSW 2000 at 10.00am on Thursday 24 October 2019. Shareholders who are unable to attend the meeting
are encouraged to complete and return their proxy form that will accompany the notice of meeting.

ASHLEY SERVICES GROUP ANNUAL REPORT 2019

Bankers

Bankwest
Level 16
45 Clarence Street
Sydney NSW 2000
Telephone: + 61 2 9276 8000
Facsimile: 1300 453 796

Share Registry

Link Market Services Limited
Central Park, Level 4
152 St Georges Terrace
Perth WA 6000
Telephone: +61 1300 554 474
Facsimile: +61 2 9287 0303
Website: www.linkmarketservices.com.au

Website

www.ashleyservicesgroup.com.au

ASX Code

ASH

Corporate Directory

Non-Executive Directors

Mr Ian Pratt (Chairman)

Executive Directors

Mr Ross Shrimpton – Managing Director
Mr Chris McFadden

Company Secretary

Mr Ron Hollands

Registered Office

Level 10
92 Pitt Street
Sydney NSW 2000

Australian Company Number

094 747 510

Australian Business Number

92 094 747 510

Auditors

HLB Mann Judd
Level 19
207 Kent Street
Sydney NSW 2000
Telephone: + 61 2 9020 4000
Facsimile: + 61 2 9020 4190

Legal Adviser

Addisons Lawyers
Level 12
60 Carrington Street
Sydney NSW 2000
Telephone: + 61 2 8915 1000
Facsimile: + 61 2 8916 2000

ASHLEY SERVICES GROUP ANNUAL REPORT 2019