Appendix 4E
Year Ended 4 July 2021
Lodged with the ASX under Listing Rule 4.3A
31 August 2021
The following information should be read in conjunction with the attached Annual Report.
1. DETAILS OF REPORTING PERIODS:
The current reporting period is the 52 weeks to 4 July 2021. The previous corresponding reporting period was the
53 weeks from 1 July 2019 to 5 July 2020. The group works on a 4-4-5 week based calendar in line with the group’s
weekly reporting calendar and 53 week years are required occasionally to ensure the month end date is included
more appropriately within the periods. The consolidated statement of profit or loss and other comprehensive
income and consolidated statement of financial position relates to Ashley Services Group Limited (“ASH” and its
controlled entities).
2. RESULTS FOR ANNOUNCEMENT TO THE MARKET:
Results:
Revenue from ordinary activities
Profit after tax for the year
Profit after tax for the year attributable to shareholders
Change % Change
Up
Up
Up
13.9%
89.6%
96.1%
To
To
To
Amount
$’000
383,672
9,610
9,150
Refer to Chairman and Managing Director’s review in the Annual Report and separate results presentation for
commentary on the results.
Control gained over entities:
During the financial year ended 4 July 2021, 100% of the shares in The Instruction Company Pty Ltd were
acquired. The Instruction Company is a Registered Training Organisation servicing the rail sector nationally.
The acquisition was completed on 15 September 2020 with a financial effective date of 6 July 2020.
Ownership
interest held by
the Group
Country of
Incorporation
4 Jul
2021
5 Jul
2020
Nature of
relationship
Measurement
method
Share of operating
profits, after tax
4 Jul
2021
$000
5 Jul
2020
$000
Australia
100%
-
Subsidiary
Consolidated
100
-
Name of entity
The Instruction
Company Pty Ltd
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
1
Loss of control over entities:
Not applicable.
Details of interests in significant joint ventures and associates:
Not applicable.
Dividend re-investment plans:
Not applicable.
Dividends:
Record
Date
Payment
Date
Cents per
Share
Franked Amount
per Share (Cents)
Interim Dividend - 2021
3 March 2021
18 March 2021
Final Dividend - 2021
2 September 2021
17 September 2021
Additional Information:
1.8
2.4
1.8
2.4
2021
2020
Net tangible assets ($000)
Shares on Issue
Net tangible assets per share ($)
Note:
1. Right-of-use assets have been considered as intangible assets and as such are excluded assets for the purposes of the Net Tangible
Assets calculation.
15,6131
143,975,904
0.108
14,1631
143,975,904
0.098
Audit qualification or review:
The audited financial statements are attached.
Ross Shrimpton
Managing Director
Sydney, 31 August 2021
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
2
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
3
Ashley Services Group Limited Annual Report 2021
CHAIRMAN AND MANAGING DIRECTOR’S REVIEW ------------------------------------------------------------------ 5
DIRECTORS’ REPORT --------------------------------------------------------------------------------------------------------- 8
AUDITOR’S INDEPENDENCE DECLARATION -------------------------------------------------------------------------- 17
CORPORATE GOVERNANCE STATEMENT ----------------------------------------------------------------------------- 18
DIRECTORS’ DECLARATION----------------------------------------------------------------------------------------------- 19
INDEPENDENT AUDITOR’S REPORT ------------------------------------------------------------------------------------ 20
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ------------- 25
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ----------------------------------------------------------- 26
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ------------------------------------------------------------ 27
CONSOLIDATED STATEMENT OF CASH FLOWS --------------------------------------------------------------------- 28
NOTES TO THE FINANCIAL STATEMENTS ----------------------------------------------------------------------------- 29
ASX ADDITIONAL INFORMATION --------------------------------------------------------------------------------------- 69
CORPORATE DIRECTORY -------------------------------------------------------------------------------------------------- 71
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
4
Chairman and Managing Director’s Review
MR IAN PRATT AND MR ROSS SHRIMPTON
2021 has seen the Ashley Services Group deliver an outstanding result. The adjustments we put in place last year
to our systems and operations to cope with a COVID impacted work environment have served us well and played
a significant role in our strong performance.
As with the previous year, whilst COVID provided operational challenges for us, in many ways it also created
opportunities for growth, particularly in Action Workforce with its high exposure to the supply chain sector.
The year also saw us welcome The Instruction Company (TIC) into the Ashley Services Group family, broadening
our offer to the rail sector. In its acquisition year we expanded the geographical footprint of The Instruction
Company and look forward to this driving additional growth opportunities for this business well into the future.
Track Safety Australia (TSA) launched in December 2020 leveraging both our long term labour hire pedigree and
our rail sector experience gained through Concept Engineering. TSA is a specialist provider for Rail Worksite
Protection staff and Rail Safeworking staff.
Following on from our recent announcement of a fully franked final dividend of 2.4 cents per share (Ex-div: 1
Sept 2021; Payment: 17 Sept 2021), this delivers a fully franked full year dividend of 4.2 cents per share for 2021,
a 56% increase on the 2020 dividend.
The long delivered impressive safety performance of our company continued throughout 2021 and we remain
at world’s best practice levels which is something we are extremely proud of.
This years’ achievement is a testament to our 270 internal staff who have followed a simple rule of “focus on the
customer” which allows everything else to fall into place.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
5
Chairman and Managing Director’s Review
DISCUSSION ON RESULTS
Earnings and result
Earnings
Net profit after tax (“NPAT”) for the financial year ended 4 July 2021, including the full year contribution from
the recently acquired The Instruction Company, was a total group profit of $9.6 million (FY20: profit $5.1 million)
Key elements within the result include:
Revenues
Group Revenue at $383.7 million increased by $46.8 million (13.9%) from the comparative period.
Labour Hire revenues were up $44.4 million (13.5%).
Training revenues were up by $2.4 million (33%) almost entirely to the first year’s revenue from The Instruction
Company.
Earnings before interest taxes depreciation and amortisation (“EBITDA”)
Group EBITDA for the financial year was a profit of $15.5 million, up by $5.8 million (60%) on the prior
corresponding period (FY20: EBITDA of $9.7 million).
▪ Labour Hire division EBITDA of $17.8 million, was up $5.3 million (43%) on the prior corresponding period
(FY20: $12.5 million), with improvement seen across most brands.
▪ Training division EBITDA of $2.0 million was up $1.2 million or 146% on the prior corresponding period (FY20:
$0.8 million) with all significant geographical locations exhibiting improvement.
▪ Corporate overheads, at $4.3 million were up $0.7 million on prior corresponding period (FY20: $3.6 million),
primarily due to significant increases in the cost of insurance and additional costs related to our strong
continued growth and our most recent acquisition.
Statement of financial position
Net assets at $28.5 million were up by $2.7 million on the prior year (2020: $25.8 million) effectively reflecting
the impact of our dividend policy which has paid out 73% of attributable profit over the past four financial years.
Noteworthy balance sheet movements include:
▪ Trade and Other Receivables up $15.0m – June revenues were up $11.4 million or 40% on the prior year
▪
▪ Trade and Other Payables up $8.9m – in part related to on increased on cost provisions with revenue/wages
Intangible Assets up $1.5m - TIC Goodwill
lift
▪ Borrowings up $1.1 million – minimal drawdown to fund increased working capital requirements
▪ Other Liabilities (Current & Non-current) down $1.0m – following payment of CCL Contingent Consideration
$1.4m less TIC Contingent Consideration $0.4m
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
6
Chairman and Managing Director’s Review
Cash Flow
Operating cash flow was strong in the second half, with an inflow of $12.4 million for the second half. This more
than offset an outflow of $7.0 million at the half, ending at a $5.4 million inflow for the year (FY20: $14.1 million).
Relative to 2020 operating cash was down $9.5 million, due primarily to increased working capital requirements
relative to financial year end 2020, with June 2021 revenues up a very pleasing $11.4 million or 40% on the prior
corresponding period.
The overall outflow from investing activities of $3.2 million was primarily due to the initial payment of $1.0
million for the TIC acquisition, $1.4 million in contingent consideration payments made in relation to the CCL
acquisition and also capital expenditure of $0.8 million which was broadly in line with the prior year.
The overall outflow from financing activities of $7.3 million was primarily due to the combined $7.3 million
dividend payments covering the 2020 final dividend ($3.9m), the 2021 interim dividend ($2.6 million), the 2020
CCL final dividend to minority shareholders ($0.4m) and the 2020 TIC final dividend ($0.4m).
Overall this delivered a net cash outflow for FY21 of $5.1 million.
DIVIDEND
On 27 July 2021 the Group declared a fully franked final dividend of 2.4 cents in relation to the financial year
ended 4 July 2021. With a fully franked interim dividend of 1.8 cents previously declared on 28 January 2021,
this brings the full year dividend for the financial year ended 4 July 2021 to a total of 4.2 cents, a 56% increase
on the dividend for the prior financial year (FY20: 2.7 cents).
EVENTS SUBSEQUENT TO BALANCE DATE
Other than the dividend announcement outlined above, 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.
There remains significant uncertainty regarding how the COVID-19 pandemic will evolve, including the duration
of the pandemic, the severity of the downturn and the speed of economic recovery. In accordance with AASB
110 Events after the Reporting Date, the Group considered whether events since the end of the financial year
confirmed conditions existing before the reporting date. The Group did not identify any subsequent events
triggered by COVID-19 related developments, which would require adjustment to the amounts or disclosures in
the financial statements. Additionally, no other material non-adjusting subsequent events relating to COVID-19
were identified requiring disclosure in the financial statements. The COVID-19 situation remains fluid and the
Group continues to closely monitor the financial effects.
Ian Pratt
Chairman
Ross Shrimpton
Managing Director
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
7
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 4 July 2021.
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
Mr Ian Pratt
Chairman
Appointed / Resigned
Appointed 1 October 2015
Mr Ross Shrimpton Managing
Director
Executive Director Appointed 6 April 2017 and Company Secretary from 26 August 2020
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
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 was previously a
Director of Charter Hall 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 Aprl 2017) & Company Secretary (from 26
August 2020)
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. Chris’s previous roles include: CFO of sass & bide, a division of
Myer, 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 2021
8
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 McFadden
Directorships of other listed companies
•
Number
of Shares Held
Shareholding
%
•
15,060
80,279,030
699,999
0.01
55.76
0.49
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
a. Principal activities
Company
Date from
Date to
Nil
Nil
Nil
-
-
-
-
-
-
The principal activities of the Group during the financial year were the provision of labour hire (including
recruitment) and training services.
b. Company secretary
Mr Ron Hollands held the position of Company Secretary for the entire financial year. Ron is a 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.
Mr Chris McFadden, Executive Director and Chief Financial Officer of the Ashley Services Group Limited was
appointed as joint Company Secretary on 26 August 2020.
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
6
6
6
6
6
6
2
2
2
2
2
2
1
1
1
1
1
1
1
1
1
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
1
1
1
9
Directors’ Report
1. BUSINESS REVIEW
a. Operating results
The consolidated profit of the Group attributable to
equity holders after providing for
income tax
amounted to $9,150,000 (2020: profit $4,667,000).
b. 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.
c. Future developments
Likely developments
in the operations of the
consolidated entity in future years and the expected
results of those operations are referred to generally
in the Chairman and Managing Director’s Review.
d. 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 2021 except as follows:
On 27 July 2021 the Group declared a fully franked
final dividend of 2.4 cents in relation to the financial
year ended 4 July 2021, with a payment date of 17
September 2021.
There remains significant uncertainty regarding
how the COVID-19 pandemic will evolve, including
the duration of the pandemic, the severity of the
downturn and the speed of economic recovery. In
accordance with AASB 110 Events after the
Reporting Date, the Group considered whether
events since the end of the financial year confirmed
conditions existing before the reporting date. The
Group did not identify any subsequent events
triggered by COVID-19 related developments, which
would require adjustment to the amounts or
disclosures in the financial statements. Additionally,
no other material non-adjusting subsequent events
relating to COVID-19 were identified requiring
disclosure in the financial statements. The COVID-
19 situation remains fluid and the Group continues
to closely monitor the financial effects.
e. Ongoing Litigation
Ashley Services Group Limited (ASH) has no current
ongoing litigation.
2. OTHER INFORMATION
a. 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.
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 4 July 2021.
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 17 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.
e. 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
in any proceedings to which the Group is a party, for
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
10
Directors’ Report
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/Directors’ Reports) Instrument 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
a.
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)
include both the
Key management personnel
Directors and other key management personnel
named above.
b.
Principles used to determine the nature and
amount of remuneration
The objective of the Group’s executive reward
for
framework
to ensure
reward
that
is
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
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, including short term incentives.
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.
Executive pay
The executive pay and reward framework has three
components:
•
base pay and benefits, including
superannuation; and
short-term performance incentives, provided
in cash.
•
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
11
Directors’ Report
The combination of these comprises the executive’s
total remuneration.
Table 5: Key components of senior executive remuneration framework in place during the year ended 4 July 2021.
Fixed Remuneration/Base Pay
Short Term Incentive (STI)
• 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.
•
‘At risk’ award opportunity for the
achievement of annual performance
objectives linked to annual financial targets
and non-financial goals set by individual.
• 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.
• 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.
• There are no guaranteed base pay increases in any executives’
• Paid in cash within 30 days of finalisation of
employment contracts.
Audited Annual Report.
Table 6: Key features of the senior executive STI plan for FY21
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.
are
What
performance
conditions?
the
Measures
Senior Executives
Financial measures
(80% of STI opportunity)
Assessed against:
• Budget EBITDA for the individual’s area of influence for the
financial year.
• 20% payable for achievement of 80% of budget. Remaining 80%
payable on a straight-line pro rata basis for performance from
80% to 130% of budget.
Non-Financial measures
(20% of STI opportunity)
•
Individually set Key Performance Indicators.
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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
12
Directors’ Report
STI plan for the financial year ended 3 July 2022
The remuneration committee has approved a similar Short Term Incentive (STI) plan for the year ended 3 July
2022, based upon budget targets for that annual period.
c. 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.
d. 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 13 to 15.
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
450,000
291,748
-
50
50
-
50
50
Term of
agreement
Ongoing
Ongoing
Ongoing
Notice Period
6 months
6 months
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 since the financial year ended 30 June 2017.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
13
Directors’ Report
Table 9: Statutory key performance indicators of the group over the last five years
2021
2020
2019
2018
2017
Profit / (Loss) for the year attributable to shareholders ($000)
Basic earnings per share (cents)
Dividend payments ($000)1
9,150
6.36
6,047
4,667
3.24
3,887
5,424
3.77
3,887
4,789
(5,969)
3.33
(4.08)
3,600
Dividend payout ratio (%)
Increase / (decrease) in share price (%)2
Total KMP incentives as percentage of profit/(loss) for the year
(%)
Note:
1. 2021 Final Dividend declared 27 July 2021 in relation to the 2021 financial year, with payment date of 17 September 2021.
66.1
92.3
33.3
83.3
71.7
1.5
4.1
0.0
6.1
204.7
75.1
3.1
2021 Interim Dividend declared 28 January 2021 in relation to the 2021 financial year, with payment date of 18 March 2021.
2020 Dividend declared 27 July 2020 in relation to the 2020 financial year, with payment date of 11 September 2020.
2019 Dividend declared 9 August 2019 in relation to the 2019 financial year, with payment date of 6 September 2019.
2018 Dividend 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.
2.
Table 10: 2021 – Remuneration of Key Management Personnel
-
-
(70.9)
-
2021
Name
Non-executive Directors
Ian Pratt5
Executive Director
Ross Shrimpton
Chris McFadden
Other key management personnel
Paul Rixon
ST1 employee benefits
Cash salary
& fees
$
Salary non-
cash
$
ST1 employee
bonus
S
-
-
81,096
205,480
428,306
428,306
270,054
-
-
-
-
PE2
benefits
Super-
annuation
$
19,520
21,694
21,694
LT3
employee
benefit
Performance
based
Remuneration
Total4
$
-
-
-
$
225,000
450,000
531,096
%
-
-
15.3
54,049
21,694
-
345,797
15.6
Total
Note:
1. ST – Short-term.
2. PE – Post-employment.
3. LT – Long-term. As all previous LTI performance hurdles have now lapsed no expense has been recognised in the profit and loss
- 1,551,893
1,332,146
135,145
84,602
-
08.7
account for the year ended 4 July 2021.
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). Refer to Note
31. Related Party Transactions for further details.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
14
Directors’ Report
Table 11: 2020 – Remuneration of Key Management Personnel
2020
Name
Non-executive Directors
Ian Pratt5
Executive Director
Ross Shrimpton
Chris McFadden
Other key management personnel
Paul Rixon6
ST1 employee benefits
Cash salary
& fees
$
Salary non-
cash
$
ST1 employee
bonus
S
-
-
118,293
205,480
428,997
428,997
273,336
-
-
-
-
PE2
benefits
Super-
annuation
$
19,520
21,003
21,003
LT3
employee
benefit
Performance
based
Remuneration
Total4
$
-
-
-
$
225,000
450,000
568,293
%
-
-
20.8
71,760
21,003
366,099
19.6
Total
Note:
1. ST – Short-term.
2. PE – Post-employment.
3. LT – Long-term. As all previous LTI performance hurdles have now lapsed no expense has been recognised in the profit and loss
1,609,392
1,336,810
190,053
82,529
-
11.8
account for the year ended 5 July 2020.
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). Refer to Note
31. Related Party Transactions for further details.
6. Novated car lease refund of $4,715 included in these figures.
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.
e.
Shares held by key management personnel
The number of ordinary shares in the Company during the 2021 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 McFadden
Paul Rixon
Balance at start of
the year
15,060
80,279,030
630,630
41,416
Shares Disposed
-
Change from KMP
-
Balance at end of the year
15,060
-
-
-
-
69,3691
54,823
80,279,030
699,999
96,239
Total
Note:
1. The changes in Chris McFadden’s holding are as advised to the ASX on 30 October 2020 following an on-market purchase through a
80,966,136
81,090,328
124,192
-
director related entity – Christoula Pty Limited ATF Christoula Superannuation Fund.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
15
Directors’ Report
f.
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.
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, 31 August 2021
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
16
Auditor’s Independence Declaration
As lead auditor for the audit of the consolidated financial report of Ashley Services Group Limited for the
year ended 4 July 2021, 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
31 August 2021
S P James
Director
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
17
Corporate Governance Statement
A Corporate Governance Statement has been
adopted by the Board on 27 August 2021 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.
During the financial year ending 4 July 2021 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 2021 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 2021
18
FemaleMaleDirectors & Senior Management34%66%Corporate & Administration83%17%Labour Hire66%34%Recruitment87%13%Training51%49%Total60%40%
Directors’ Declaration
1.
In the opinion of the Directors of Ashley Services Group Limited:
a. 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 4 July 2021 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;
b. 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 30 to the
financial statements.
2. 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 4 July 2021.
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, 31 August 2021
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
19
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 4 July 2021,
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.
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 4 July 2021 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 2021
20
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 $384.0 million
comprises a number of streams including:
•
•
•
labour hire revenue ($374.0 million);
training revenue ($9.7 million); and
other income ($0.3 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.
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 $360.9 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 assessed whether the Group’s accounting
policies were in compliance with Australian
Accounting Standards and specifcally whether
revenue had been recognised in accordance with
accounting standard AASB 15 Revenue from
Contracts with Customers.
We tested the Group’s process for recognising
labour hire revenue.
We tested labour hire revenue recognised in the
period by agreeing to timesheets, payroll reports,
amounts billed and subsequently received.
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.
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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
21
Key Audit Matter
How our audit addressed the key audit matter
Carrying Value of Goodwill
Refer to Note 13 (Intangible assets) and Note 14 (Impairment)
The Group recognised Goodwill of $10.7m as at
4 July 2021 in relation to the Labour Hire and
training divisions. This Goodwill arose on
acquisition of subsidary companies during the
current year (Note 26) and prior years.
As required by Australian Accounting Standards
the Group tested this Goodwill for impairment,
at 4 July 2021.
The Group determined the recoverable amount
using value in use calculations for the relevant
cash generating units (“CGU”) being that of
Labour Hire and Training, which involved a
significant level of judgement in respect of
factors such as:
•
•
•
We considered this to be a key audit matter due to
the significant judgement involved in estimating
the recoverable amount of the Goodwill and the
potentially material impact on the financial report.
Estimated future revenues and costs;
Discount rates; and
Terminal values.
We evaluated the Group’s goodwill impairment
assessment process;
We obtained the Group’s value in use models and
considered the assumptions applied by
management;
We assessed the accuracy of previous Group
forecasting to inform our evaluation of forecasts
included in the value in use models. We applied
increased scepticism to current period forecasts in
areas where previous forecasts were not achieved
and /or where future uncertainty is greater or
volatility is expected;
We challenged discount and terminal value
multiples by comparing these with rates used by
comparable companies.
We compared forecast revenues and costs to
historical results;
We tested the mathematical accuracy of the
impairment models used by management;
We performed sensitivity analysis on the Labour
Hire and Training CGU in relation to the discount
rate and terminal value multiple assumptions, and
profit forecasts;
We assessed the Group’s disclosures of the
quantitative and qualitative considerations in
relation to the valuation of goodwill, by comparing
these disclosures to our understanding of the
assets.
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 4 July 2021, 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.
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
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
22
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.
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
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
23
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 11 to 16 of the directors’ report for the year
ended 4 July 2021.
In our opinion, the Remuneration Report of Ashley Services Group Limited for the year ended 4 July 2021
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
31 August 2021
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
24
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the financial year ended 4 July 2021
Note
2
2
3
3
5
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 income for the year
Total comprehensive income for the year is attributable to:
Shareholders of Ashley Services Group Limited
Non-controlling interests
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
23
23
23
23
23
23
The accompanying notes form part of these financial statements.
4 Jul 2021
$000
383,672
334
(360,928)
(1,785)
(648)
(7,298)
13,347
3,737
9,610
-
9,610
-
9,610
9,150
460
9,610
6.36
6.36
0.00
0.00
6.36
6.36
5 Jul 2020
$000
336,841
2,040
(321,668)
(2,068)
(713)
(7,387)
7,045
1,976
5,069
-
5,069
-
5,069
4,667
402
5,069
3.24
3.24
0.00
0.00
3.24
3.24
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
25
Consolidated Statement of Financial Position
For the financial year ended 4 July 2021
Note
4 Jul 2021
$000
5 Jul 2020
$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
Right-of-use assets
Deferred tax assets
Intangible assets
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Current tax payable
Dividends payable
Lease liabilities
Other liabilities
Provisions
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Lease liabilities
Other liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Common control reserve
Accumulated losses
Total equity
7
8
9
10
11
12
15
13, 14
16
19
15
17
18
20
15
17
18
20
21
22
The accompanying notes form part of these financial statements.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
2,969
44,421
791
2,035
50,216
1,247
2,042
5,709
10,848
111
19,957
70,173
27,391
1,090
1,083
460
888
1,220
3,387
35,519
2,341
1,324
1,973
514
6,152
41,671
28,502
148,815
(59,261)
(61,052)
28,502
8,063
29,418
154
1,745
39,380
1,060
2,345
4,694
9,322
92
17,513
56,893
18,517
-
1,634
400
723
1,412
2,453
25,139
764
1,716
2,762
682
5,924
31,063
25,830
148,815
(59,261)
(63,724)
25,830
26
Consolidated Statement of Changes in Equity
For the financial year ended 4 July 2021
For the year ended 4 July 2021
Balance at 6 July 2020
Profit for the period
Other comprehensive income for the year
Total comprehensive income for the year
Dividends paid
Balance at 4 July 2021
For the year ended 5 July 2020
Balance at 1 July 2019
Profit for the period
Other comprehensive income for the year
Total comprehensive income for the year
Recognition of non-controlling interest of CCL
Group
Derecognition of non-controlling interest of
CCL Group
Other equity
Dividends paid
Balance at 5 July 2020
Share
Capital
$000
Common
Control
Reserve
$000
Accumulated
Losses
$000
Non-
controlling
Interest
$000
148,815
(59,261)
(63,724)
-
-
-
-
-
-
-
-
9,150
-
9,150
(6,479)
148,815
(59,261)
(61,052)
148,815
(57,687)
(64,504)
-
-
-
-
-
-
-
-
-
-
-
399
(1,973)
-
148,815
(59,261)
4,667
-
4,667
-
-
-
(3,887)
(63,724)
-
460
-
460
(460)
-
-
402
-
402
397
(399)
-
(400)
-
Total
$000
25,830
9,610
-
9,610
(6,939)
28,502
26,624
5,069
-
5,069
397
-
(1,973)
(4,287)
25,830
The accompanying notes form part of these financial statements.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
27
Consolidated Statement of Cash Flows
For the financial year ended 4 July 2021
Operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income taxes paid
Net cash from continuing operations
Net cash used in discontinued operations
Net cash from operating activities
Investing activities
Note
4 Jul 2021
$000
5 Jul 2020
$000
411,146
371,567
(401,767)
(354,693)
116
(448)
(3,624)
5,423
-
22
(620)
(2,151)
14,125
-
25
5,423
14,125
Payments for property, plant and equipment in continuing operations
Payments for intangibles
Proceeds from sale of property, plant and equipment
CCL Group earn-out payment
CCL Group retention payment
Payments for businesses acquired net of cash acquired
26
Net cash used in investing activities
Financing activities
Net proceeds/(repayment) from/(of) external borrowings in continuing
operations
Repayment of leasing liabilities
Dividends paid
Net cash used in financing activities
Net (decrease)/ 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
7
The accompanying notes form part of these financial statements.
(679)
(114)
19
(798)
(600)
(502)
(198)
139
-
-
(1,011)
(3,183)
(4,812)
(5,373)
1,090
(1,081)
(7,343)
(7,334)
(5,094)
8,063
2,969
-
(966)
(6,507)
(7,473)
1,279
6,784
8,063
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
28
Notes to the Financial Statements
Table of Contents
ACCOUNTING POLICIES ----------------------------------------------------------------------------------------- 31
REVENUE AND OTHER INCOME ------------------------------------------------------------------------------- 39
EXPENSES ----------------------------------------------------------------------------------------------------------- 40
AUDITOR’S REMUNERATION ---------------------------------------------------------------------------------- 40
INCOME TAX EXPENSE ------------------------------------------------------------------------------------------ 41
KEY MANAGEMENT PERSONNEL DISCLOSURES ---------------------------------------------------------- 41
CASH AND CASH EQUIVALENTS ------------------------------------------------------------------------------- 42
TRADE AND OTHER RECEIVABLES ---------------------------------------------------------------------------- 42
CONTRACT ASSETS ----------------------------------------------------------------------------------------------- 43
OTHER ASSETS ---------------------------------------------------------------------------------------------------- 43
PROPERTY, PLANT AND EQUIPMENT ------------------------------------------------------------------------ 44
RIGHT-OF-USE ASSETS ------------------------------------------------------------------------------------------ 45
INTANGIBLE ASSETS --------------------------------------------------------------------------------------------- 45
IMPAIRMENT ------------------------------------------------------------------------------------------------------ 46
TAX BALANCES ---------------------------------------------------------------------------------------------------- 48
TRADE AND OTHER PAYABLES -------------------------------------------------------------------------------- 49
LEASE LIABILITIES ------------------------------------------------------------------------------------------------- 49
OTHER LIABILITIES------------------------------------------------------------------------------------------------ 50
BORROWINGS ----------------------------------------------------------------------------------------------------- 50
PROVISIONS ------------------------------------------------------------------------------------------------------- 51
SHARE CAPITAL --------------------------------------------------------------------------------------------------- 52
COMMON CONTROL RESERVE -------------------------------------------------------------------------------- 52
EARNINGS PER SHARE ------------------------------------------------------------------------------------------- 52
SEGMENT INFORMATION -------------------------------------------------------------------------------------- 53
CASH FLOW INFORMATION ----------------------------------------------------------------------------------- 54
BUSINESS COMBINATION -------------------------------------------------------------------------------------- 55
FAIR VALUE MEASUREMENT ---------------------------------------------------------------------------------- 56
CONTROLLED ENTITIES ------------------------------------------------------------------------------------------ 59
PARENT ENTITY DISCLOSURES -------------------------------------------------------------------------------- 61
DEED OF CROSS GUARANTEE --------------------------------------------------------------------------------- 62
1.
2.
3.
4.
5.
6.
7.
8.
9.
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 2021
29
Notes to the Financial Statements
31.
32.
33.
34.
35.
RELATED PARTY TRANSACTIONS ----------------------------------------------------------------------------- 65
SECURED AND CONTINGENT LIABILITIES ------------------------------------------------------------------- 65
FINANCIAL INSTRUMENTS ------------------------------------------------------------------------------------- 65
EVENTS AFTER THE REPORTING DATE ---------------------------------------------------------------------- 68
DIVIDENDS --------------------------------------------------------------------------------------------------------- 68
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
30
Notes to the Financial Statements
1. ACCOUNTING POLICIES
a. General information
The financial statements for the financial year
ended 4 July 2021 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 under
the symbol “ASH”), incorporated and domiciled
in Australia.
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
b.
The consolidated financial statements are
general purpose financial statements which
have been prepared in accordance with the
and Australian
Corporations Act 2001
Accounting Standards (including Australian
Accounting Interpretations) adopted by the
Australian Accounting Standards Board. The
consolidated financial statements of the Group
also comply with
International Financial
Reporting Standards (‘IFRS’) adopted by the
International Accounting Standards Board. The
Group is a for-profit entity for the purposes of
preparing the financial statements.
The consolidated financial statements were
authorised for issue by the Board of Directors
on 31 August 2021.
c.
Basis of preparation
Historical cost
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.
Coronavirus (COVID-19) pandemic
The World Health Organisation declared a
global pandemic in March 2020 as a result of
the COVID-19. The impact of the crisis has had
a significant economic impact. The critical
accounting estimates and judgements of the
Group have required additional consideration
and analysis due to the impact of COVID-19.
Given the uncertainty of the extent of the
impact of the pandemic, changes to the
estimates and outcomes that have been
applied in the measurement of the Group’s
assets and liabilities may arise in the future.
Other than adjusting events that provide
evidence of conditions that existed at the end
of the financial year, the impacts of events that
arise after the reporting period will be
accounted for in future reporting periods.
Rounding
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.
d. Going concern
The consolidated financial statements have
been prepared on a going concern basis.
e. Adoption of new, revised or amending
Accounting Standards and Interpretations
Accounting
The Group adopted all of the new, revised or
amended
and
the Australian
issued by
Interpretations
Accounting Standards Board (“AASB”) that are
mandatory for the current reporting period.
Standards
The new, revised or amending Accounting
Standards and Interpretations adopted did not
have a significant
impact on the Group’s
financial statements.
f. New, revised or amending Accounting
Standards and Interpretations issued but
not yet mandatory
Any new, revised or amending Accounting
Standards and Interpretations that have been
published and are not mandatory for 4 July
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
31
Notes to the Financial Statements
2021 reporting periods and have not been early
adopted by the Group.
These new, revised or amending Accounting
Standards and Interpretations are not expected
to have any material impact on the Group’s
financial report in future reporting periods
based on the Group’s current activities.
Business combinations
g.
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
The business
under common control.
combination will be accounted for from the
date that control is attained, whereby the fair
value of the identifiable assets acquired and
liabilities)
liabilities
assumed are recognised (subject to certain
limited exceptions).
contingent
(including
a
from
resulting
When measuring the consideration transferred
in the business combination, any asset or
liability
contingent
consideration arrangement is also included.
Subsequent to initial recognition, contingent
is not
consideration classified as equity
remeasured and its subsequent settlement is
accounted for within equity.
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.
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.
h. Basis of consolidation
The Group financial statements consolidate
those of Ashley Services Group Limited and all
of its subsidiaries as of 4 July 2021. 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 returns through
its power over the subsidiary. All subsidiaries
have a reporting date of 4 July 2021.
All transactions and balances between Group
companies are eliminated on consolidation,
losses on
including unrealised gains or
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.
i.
Revenue and other income
Revenue for both labour hire and training
services
is recognised at an amount that
reflects the consideration to which the Group is
expected to be entitled
in exchange for
transferring services to a customer. For each
contract with a
the Group
undertakes the following:
customer,
i.
ii.
Identifies the contract with a customer
Identifies the performance obligations
in the contract
iii. Determines the transaction price which
considers
variable
estimates
consideration and time value of money
of
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
32
Notes to the Financial Statements
iv. Allocates the transaction price to the
separate performance obligations based
on 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.
v.
All revenue is stated net of the amount of GST.
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 services are rendered
based predominantly on an hourly rate.
Training revenue
Revenue from a contract to provide training
services is recognised over time as the services
are
the percentage of
completion method that depicts the transfer to
the customer of the services rendered.
rendered using
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.
Other income
Other income primarily includes State funding
employer rebates earned in relation to
specified categories of individuals.
j.
Government grants and subsidies
Government grants and subsidies relating to
costs are deferred and recognised in profit or
loss over the period necessary to match them
with the costs that they are intended to
compensate.
Income tax
k.
The income tax expense (income) for the year
comprises
tax expense
(income) and deferred tax expense (income).
income
current
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.
income
tax expense
Deferred
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.
is recognised from the
Except for business combinations, no deferred
income tax
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
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.
tax
investments
Where temporary differences exist in relation
in subsidiaries, branches,
to
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
probable that the reversal will occur in the
foreseeable future.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
33
Notes to the Financial Statements
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
legislation.
Ashley Services Group Limited and its wholly
owned Australian subsidiaries have formed an
income tax consolidated group under tax
consolidation
The CCL Group
companies being 80% owned are not part of
this income tax consolidated group. 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
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 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.
losses and tax credits
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
l.
Cash and cash equivalents include cash on
hand, deposits held at call with banks, other
short term highly
investments with
liquid
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.
m. Trade and other receivables
Trade and other receivables include amounts
due from customers for services performed in
the ordinary course of business. Receivables
expected to be collected within 12 months of
the end of the reporting period are classified as
current assets.
All other receivables are
classified as non-current assets.
Trade and other receivables are
initially
recognised at fair value and subsequently
measured at amortised cost using the effective
for
interest method,
impairment.
less any provision
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.
n.
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
to
consideration. Contract assets are treated as
financial assets for impairment purposes.
unconditional
right
an
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
34
Notes to the Financial Statements
Property, plant and equipment
o.
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
Office equipment
Furniture and fittings
Motor vehicles
Training equipment
Leasehold improvements
Depreciation
rate
20 - 33%
20 - 33%
10%
18.75 - 25%
33%
20 - 50%
improvements,
leasehold
In the case of
expected useful
lives are determined by
reference to comparable owned assets or over
the term of the lease, if shorter.
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 is greater than its
estimated recoverable amount.
Gains or losses on disposals are determined by
comparing proceeds with carrying amount.
These gains or
immediately in profit or loss.
losses are
recognised
p.
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
acquisition of the business.
is recognised on
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 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.
in the ownership
in a
Changes
for as equity
subsidiary are accounted
transactions and do not affect the carrying
amounts of goodwill.
interest
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
Licenses
Intellectual property
-
Course material
7 years
5 years
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
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
35
Notes to the Financial Statements
attributed. Where impairment is recognised, it
is recorded in the profit or loss in the period the
impairment is identified.
Impairment of assets
q.
At the end of each reporting period, the Group
assesses whether there is any indication that an
asset may be impaired.
information
include considering
The assessment will
external sources of information and internal
sources of
including dividends
received from 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 is carried at a revalued
amount. Any 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.
least
Impairment testing
annually for goodwill and intangible assets with
indefinite lives.
is performed at
r.
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.
s.
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
the
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.
liability,
In determining
is given to employee wage
consideration
the
increases and
employee may
vesting
not
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.
the probability
satisfy
that
Provisions
t.
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.
u. 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.
v. Comparative figures
When required by Accounting Standards,
comparative figures have been adjusted to
conform to changes in presentation for the
current financial year.
w. 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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
36
Notes to the Financial Statements
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 included in
receipts from customers or payments to
suppliers.
x.
Significant management
applying accounting policies
judgement
in
When preparing the financial statements,
management undertakes a number of
judgements, estimates and assumptions about
the recognition and measurement of assets,
liabilities, income and expenses.
Significant management judgement
The following are 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
judgement made by management.
a key
Management has undertaken a
formal
assessment of what constitutes the CGUs, by
identifying the smallest identifiable group of
assets that generates cash inflows that are
largely independent of the cash inflows from
other assets or group of assets, being Training
and Labour Hire.
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.
Lease term
The lease term is a significant component in the
measurement of both the right-of-use asset
and lease liability. Judgement is exercised in
determining whether there
is reasonable
certainty that an option to extend the lease or
purchase the underlying asset will be exercised,
or an option to terminate the lease will not be
exercised, when ascertaining the periods to be
included in the lease term. In determining the
lease term, all facts and circumstances that
create an economical incentive to exercise an
extension option, or not to exercise a
termination option, are considered at the lease
commencement date. Factors considered may
include the importance of the asset to the
Group's operations; comparison of terms and
conditions
rates;
incurrence of significant penalties; existence of
significant leasehold improvements; and the
costs and disruption to replace the asset. The
Group reassesses whether it is reasonably
certain to exercise an extension option, or not
exercise a termination option, if there is a
significant event or significant change
in
circumstances.
to prevailing market
Estimation uncertainty
Information about estimates and assumptions
that have the most significant effect on
recognition and measurement of assets,
liabilities, income and expenses is provided
below. Actual results may be substantially
different.
Impairment
assessing
In
impairment, management
estimates the recoverable amount of each
asset or cash-generating unit based on
expected future cash flows and uses an interest
rate to discount them. Estimation 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 14. In
2021, the Group recognised no impairment
losses on goodwill and/or other intangible
assets (see Note 14).
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 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
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
37
Notes to the Financial Statements
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.
Incremental borrowing rate
Where the interest rate implicit in a lease
cannot be readily determined, an incremental
borrowing rate of 3.00% has been estimated to
discount future lease payments to measure the
present value of the lease liability at the lease
commencement date. Such a rate is based on
what the Group estimates it would have to pay
a third party to borrow the funds necessary to
obtain an asset of a similar value to the right-
of-use asset, with similar terms, security and
economic environment.
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
long
the provision
term
In determining
for senior
incentive 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.
Coronavirus (COVID-19) pandemic
subsequently as a result of the Coronavirus
(COVID-19) pandemic.
y. Dividends
declared,
A liability is recognised for the amount of any
appropriately
dividend
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.
being
z.
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
the
ordinary
financial year, adjusted for bonus elements in
ordinary shares issued during the year.
shares outstanding during
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 other financing costs
associated with dilutive 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.
on
known
information.
Judgement has been exercised in considering
the impacts that the Coronavirus (COVID-19)
pandemic has had, or may have, on the Group
based
This
consideration extends to the nature of the
Group operations. Other than as addressed in
specific notes, there does not currently appear
to be either any significant impact upon the
financial
significant
statements or any
to events or
uncertainties with respect
conditions which may
impact the Group
unfavourably as at the reporting date or
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
38
Notes to the Financial Statements
2. REVENUE AND OTHER INCOME
Operating activities:
Labour hire revenue
Training revenue
Other income:
Interest received
Sundry income
2021
$000
373,963
9,709
383,672
117
217
334
2020
$000
329,517
7,324
336,841
22
2,018
2,040
a. Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
2021
Revenue
Labour Hire
$000
Training
$000
Total
$000
From external customers
373,963
9,709
383,672
Timing of revenue recognition
Services transferred over time
Services transferred at a point in time
2020
Revenue
362,024
11,939
373,963
9,709
-
9,709
Labour Hire
$000
Training
$000
371,733
11,939
383,672
Total
$000
From external customers
329,517
7,324
336,841
Timing of revenue recognition
Services transferred over time
Services transferred at a point in time
319,820
9,697
329,517
7,324
-
7,324
327,144
9,697
336,841
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
39
Notes to the Financial Statements
3.
EXPENSES
Profit before income tax from continuing operations includes the following specific expenses:
Depreciation
Motor vehicles
Office equipment
Leasehold improvements
Land and buildings right-of-use assets
Amortisation
Customer contracts and relationships – amortisation
Course material
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Bank fees
4. 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 28 have also
paid fees to the auditor(s) as follows:
Audit of financial reports
- HLB Mann Judd Assurance (NSW) Pty Ltd
2021
$000
86
347
42
1,067
1,542
108
135
243
453
67
128
648
2021
$
154,000
154,000
2020
$000
57
503
144
986
1,690
129
249
378
544
75
94
713
2020
$
151,000
151,000
55,250
55,250
55,500
55,500
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
40
Notes to the Financial Statements
INCOME TAX EXPENSE
5.
a. Components of tax expense for continuing operations
Current tax expense
Deferred tax – origination and reversal of temporary differences
Under / (over) provision of tax in prior year
– Change in tax rate – CCL Group
– Change in tax rate – TIC
Income tax expense
2021
$000
3,363
561
(184)
-
(3)
3,737
b. 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% (FY20: 30%)
Add / (less) Tax effect of:
– Entertainment
– Other
– Change in tax rate – CCL Group
– Change in tax rate – TIC
– Intangible assets
– Under / (over) provision of tax in prior year
Income tax expense
2021
$000
13,347
4,004
10
3
-
(3)
(93)
(184)
3,737
2020
$000
3,221
(1,291)
84
(38)
-
1,976
2020
$000
7,045
2,113
22
1
(38)
-
(206)
84
1,976
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.
6. KEY MANAGEMENT PERSONNEL DISCLOSURES
a.
Key management personnel compensation for the year was as follows
Short-term employee benefits
Post-employment benefits
Total
2021
$
1,467,291
84,602
1,551,893
2020
$
1,526,863
82,529
1,609,392
b.
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 pages 13 to 15, Tables 8 to 11.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
41
Notes to the Financial Statements
7.
CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
8.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Allowance for expected credit losses
Other receivables
2021
$000
2
2,967
2,969
2021
$000
37,611
(193)
7,003
44,421
2020
$000
4
8,059
8,063
2020
$000
27,742
(406)
2,082
29,418
a. 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))
2021
$000
34,514
1,451
469
984
193
37,611
2020
$000
23,586
1,407
582
1,761
406
27,742
b.
The movement in the allowance for expected credit losses in respect of trade receivables is detailed below
Balance at beginning of year
CCL Group
Increase/(decrease) in allowance recognised in profit or loss
Amounts written-off
Balance at end of year
2021
$000
406
0
164
(377)
193
2020
$000
10
361
52
(17)
406
The directors of Ashley Services Group Limited are of the opinion that there has been no material impact on
the basis of determining the recoverability of trade and other receivables due to COVID-19 beyond the
allowance for expected credit losses already provided for.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
42
Notes to the Financial Statements
9.
CONTRACT ASSETS
Current
Contract assets
10. OTHER ASSETS
Current
Prepayments1
Deposits
Bank guarantee2
2021
$000
791
791
2021
$000
1,366
162
507
2,035
2020
$000
154
154
2020
$000
1,240
-
505
1,745
Note:
1. Prepayments include prepaid contract costs of $543,003 (2020: $400,983)
2. As at balance date the Group had bank guarantees of $222,366 relating to property leases. The $507,158 represents a restricted bank
account to cover the Group’s total available guarantee facility of $507,158.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
43
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
2021
$000
797
(438)
359
4,781
(4,212)
569
1,598
(1,512)
86
233
233
1,247
2021
Balance at 6 July 2020
Additions/(transfers)
Disposals
Depreciation expense – continuing operations
Balance at 4 July 2021
2020
Balance at 1 July 2019
CCL Group at 1 July 2019
Additions/(transfers)
Disposals
Depreciation expense – continuing operations
Balance at 5 July 2020
Motor
vehicles
$000
189
Office
equipment
$000
643
Leasehold
improvements
$000
70
Capital work
in progress
$000
158
265
(9)
(86)
359
281
(8)
(347)
569
58
-
(42)
86
75
-
-
233
Motor
vehicles
$000
32
Office
equipment
$000
941
Leasehold
improvements
$000
150
Capital work
in progress
$000
17
228
85
(99)
(57)
189
37
199
(31)
(503)
643
5
60
(1)
(144)
70
-
158
(17)
-
158
2020
$000
576
(387)
189
4,649
(4,006)
643
1,782
(1,712)
70
158
158
1,060
Total
$000
1,060
679
(17)
(475)
1,247
Total
$000
1,140
270
502
(148)
(704)
1,060
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 19).
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
44
Notes to the Financial Statements
12. RIGHT-OF-USE ASSETS
Land and buildings
Accumulated depreciation
2021
$000
4,095
(2,053)
2,042
2020
$000
3,331
(986)
2,345
Note:
1. Additions to the right-of-use assets during the year were $764,514.
2. The Group leases land and buildings for its offices under agreements of between 1 to 5 years with, in some cases options to extend.
13.
INTANGIBLE ASSETS
Goodwill
Cost
Acquisition CCL Group
Acquisition TIC
Impairment (note 14)
Net carrying value
Customer relationships/Licences
Cost
Impairment (note 14)
Accumulated amortisation
Net carrying value
Brand names
Cost
Impairment (note 14)
Net carrying value
Intellectual property
Cost
Impairment (note 14)
Accumulated amortisation
Net carrying value
Total intangible assets
2021
$000
71,558
-
1,654
(62,474)
10,738
2,062
(918)
(1,144)
-
4,640
(4,640)
-
8,445
(3,896)
(4,439)
110
10,848
a. Intangible assets – detailed reconciliation
Customer
Relationships
and Licences
$000
108
-
-
(108)
-
Goodwill
$000
9,084
1,654
-
-
10,738
Brand
Names
$000
-
Intellectual
Property
$000
130
-
-
-
-
-
115
(135)
110
2021
Balance at 6 July 2020
Acquisition TIC
Additions
Amortisation – continuing operations
Balance at 4 July 2021
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
2020
$000
65,256
6,302
-
(62,474)
9,084
2,062
(918)
(1,036)
108
4,640
(4,640)
-
8,330
(3,896)
(4,304)
130
9,322
Total
$000
9,322
1,654
115
(243)
10,848
45
Notes to the Financial Statements
2020
Balance at 1 July 2019
Acquisition CCL Group
Additions
Amortisation – continuing operations
Balance at 5 July 2020
Customer
Relationships
and Licences
$000
237
-
-
(129)
108
Goodwill
$000
2,782
6,302
-
-
9,084
Brand
Names
$000
-
Intellectual
Property
$000
181
-
-
-
-
-
198
(249)
130
Total
$000
3,200
6,302
198
(378)
9,322
IMPAIRMENT
Impairment
14.
a.
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 were confined to the Labour Hire division in the prior year but now
includes the Training division in FY21. The Training division now has intangibles again as a result of the acquisition
of The Instruction Company in the 2021 financial year.
There were no indicators of impairment in relation to either the Labour Hire division or the Training division at 4
July 2021.
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 FY22 and
covering detailed forecasts for a further four 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 has been determined by applying a suitable discount rate of 14.0 per cent. Cash flows up to
year 5 have been held constant, reflecting the competitive nature of the industry.
Management’s key assumption is that revenue for the Labour Hire division will increase by 17% in FY22. EBITDA
margin is forecast at 4.9% (before corporate overhead allocations).
Training division
The recoverable amount of the Training 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 FY22 and
covering detailed forecasts for a further four 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 has been determined by applying a suitable discount rate of 14.0 per cent. Cash flows up to
year 5 have been held constant, reflecting the competitive nature of the industry.
Management’s key assumption is that revenue for the Training division will increase by 49% in FY22. EBITDA
margin is forecast at 16.5% (before corporate overhead allocations).
Long term growth rates after the forecast period and discount rates used were as follows:
Labour Hire
Training
Terminal Growth rates
4 July 2021
0%
5 July 2020
0%
Pre-tax discount rates
4 July 2021
14.0%
5 July 2020
18.7%
0%
N/A
14.0%
N/A
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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
46
Notes to the Financial Statements
The directors of Ashley Services Group Limited are of the opinion that there has been no material impact on
the basis of determining the recoverability of the Labour Hire or Training division due to COVID-19.
b.
Impairment charges
As a result of the analysis, there is no need for any impairment charges in the FY21 results. The same analysis in
the prior year resulted in no impairment charge being recorded in the FY20 results.
Movements in the net carrying amount of goodwill and other intangibles are presented in note 13.
The amount of goodwill, brand names and other intangibles remaining by CGU and subject to future
impairment testing is as follows:
2021
Training
Labour Hire
Total
2020
Training
Labour Hire
Total
Goodwill
$’000
1,654
9,084
10,738
Goodwill
$’000
-
9,084
9,084
Customer
Relationships/
Licences
$’000
-
-
-
Customer
Relationships/
Licences
$’000
-
108
108
Brand Names
$’000
Intellectual
Property
$’000
-
-
-
110
-
110
Brand Names
$’000
Intellectual
Property
$’000
-
-
-
130
-
130
Total
$’000
1,764
9,084
10,848
Total
$’000
130
9,192
9,322
c. Sensitivity analysis
Management has also run various sensitivity scenarios, primarily reviewing sensitivity of outcomes to FY22
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
+/-4.0
+/-4.0
+/-11.0
Training CGU
$’M
+/-3.0
+/-0.15
+/-0.152
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
47
Notes to the Financial Statements
15. 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)
2021
$000
-
2020
$000
-
5,709
4,694
1,083
1,634
2,341
764
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
(510)
(46)
(32)
296
28
3,198
943
52
3,929
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,531)
(191)
(2,041)
(237)
32
(58)
23
989
227
(52)
(561)
-
238
51
4,187
1,170
-
3,368
2021
Current assets
Trade, other receivables and other assets
Contract assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets1
Current liabilities
Trade and other payables
Provisions
2020 Tax loss carried forward
Deferred tax asset
Total
Note:
1. This amount is net of lease liabilities.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
48
Notes to the Financial Statements
2020
Current assets
Trade, other receivables and other assets
Contract assets
Non-current assets
Intangible assets
Property, plant and equipment
Right-of-use assets1
Current liabilities
Trade and other payables
Provisions
2019 Tax loss carried forward
Deferred tax asset
Total
16. TRADE AND OTHER PAYABLES
Current
Trade payables
Accrued expenses
GST payable
Sundry creditors
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
(720)
(171)
(71)
319
-
2,037
1,244
-
2,638
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
210
125
39
(23)
28
(510)
(46)
(32)
296
28
1,161
(301)
3,198
943
52
52
1,291
3,929
2021
$000
5,205
6,197
4,321
11,668
27,391
2020
$000
1,442
5,354
4,281
7,440
18,517
Average credit period on purchases of products and services is 30 days. No interest is charged on trade payables.
The Group has financial risk management policies in place to ensure payables are paid within credit time frame.
17. LEASE LIABILITIES
Current
Non-current
2021
$000
888
1,324
2,212
2020
$000
723
1,716
2,439
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
49
Notes to the Financial Statements
18. OTHER LIABILITIES
Current
CCL Contingent Consideration - Retention
CCL Contingent Consideration – Earn Out Year 1
CCL Contingent Consideration – Earn Out Year 2
The Instruction Company Deferred Consideration
Other
Other liabilities (Current)
Non-current
CCL Contingent Consideration – Earn Out Year 2
Redemption Liability
Other liabilities (Non-current)
Redemption Liability
2021
$000
-
-
825
375
20
2020
$000
600
789
-
-
23
1,220
1,412
-
1,973
1,973
789
1,973
2,762
The redemption liability is a Put Option which represents a contractual obligation to purchase a non-controlling
interest and originated from a previous business combination to acquire the CCL Group. The liability is a financial
liability and has been measured at the present value of the redemption amount or the put option consideration
amount in accordance with the underlying CCL Group Share Sale and Purchase Agreement.
The Put Option can be exercised by any of the Remaining Shareholders (acting independently of the others):
▪ at any time upon the occurrence of a Control Event in respect of Ashley Services Group Limited;
▪ with the Extended EBAs in respect of both CTS and CCL having now been entered into (during January
2021) – at any time after 20 December 2022;
The Put Option expires 20 years after Completion but the Purchaser has the right to reduce this to 10 years.
19. BORROWINGS
2021
Invoice Financing
Bank Bill Business Loan
Balance at 4 July 2021
2020
Invoice Financing
Bank Bill Business Loan
Balance at 5 July 2020
Working capital facility
Available facility
$000
13,000
Facility used
$000
679
Remaining facility
$000
12,321
4,375
17,375
411
1,090
3,964
16,285
Available facility
$000
13,000
Facility used
$000
-
Remaining facility
$000
13,000
6,125
19,125
-
-
6,125
19,125
During the financial year ended 5 July 2020, Ashley Services Group Limited entered into a new banking
partnership facility with the Westpac Banking Corporation which included all transactional banking requirements
as well as a $20 million financing facility, comprised of a $13 million Invoice Financing facility and a $7 million
Bank Bill Business Loan (Reduces progressively over a term of 3 years).
The Westpac facility is subject to a Security which includes, but is not limited to the following:
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
50
Notes to the Financial Statements
▪ 1st ranking General Security Agreement over the assets and undertakings of the Borrower and its
Guarantors;
▪ Contractual Subordination of Shrimpton Holdings Pty Ltd facility of $5 million; and
▪ Flawed Asset Arrangement – Deposit of Action Workforce Pty Ltd and Concept Engineering (AUST) Pty Ltd
for Invoice Finance Facility collections.
As at 4 July 2021, both the current $4.375 million Bank Bill Business Loan and the $13 million Invoice Financing
facility were drawn to a combined $1.09 million (5 July 2020, Nil).
The $5 million working capital facility through Shrimpton Holdings Pty Limited, a company associated with Ross
Shrimpton, Managing Director, major shareholder of the Group, was re-evaluated by the Board in line with its
expiry date. The facility was determined to be in excess of the Group’s funding requirements following the
establishment of the new Westpac facilities. Accordingly, this facility was not been renewed and expired on 31
January 2020.
20. 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
CCL Group at 1 July 2019
TIC at 6 July 2020
Less: leave taken during the year
Add: leave provided for during the year
Closing balance
2021
$000
3,337
50
3,387
414
100
514
2021
$000
2,769
-
137
(3,136)
3,981
3,751
2020
$000
2,404
49
2,453
365
317
682
2020
$000
2,484
245
-
(1,615)
1,655
2,769
b. Provision for discontinued operation
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 $0.15 million provision at 4 July 2021 (FY20: $0.37 million) represents the discounted cost of future surplus
lease obligations.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
51
Notes to the Financial Statements
21. 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 (FY20: 143,975,904) fully paid ordinary shares
Share issue costs
Share capital
2021
$000
154,234
(5,419)
148,815
2020
$000
154,234
(5,419)
148,815
a. Ordinary shares
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 4 July 2021 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.
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.
22. COMMON CONTROL RESERVE
The common control reserve has arisen following the adoption of the pooling of interests method used to
account for the acquisition of the following entities since 1 July 2014:
•
•
•
•
•
•
ADV Services Pty Limited;
Ashley Institute Holdings Pty Limited;
TBRC Holdings Pty Limited;
Tracmin Pty Limited; and
Australian Institute of Vocational Development Pty Limited; and
CCL Group (Construction Contract Labour (VIC) Pty Ltd, Complete Traffic Services (VIC) Pty Ltd and VIC
Traffic and Labour Solutions Pty Ltd)
23. EARNINGS PER SHARE
Profit after tax for the year attributable to shareholders
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
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
2021
$000
9,150
2020
$000
4,667
143,975,904
143,975,904
143,975,904
143,975,904
6.36
6.36
-
-
6.36
6.36
3.24
3.24
-
-
3.24
3.24
52
Notes to the Financial Statements
24. 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 4 July 2021, 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:
2021
Revenue
From external customers
Segment revenue
Other income
Employment costs
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
2020
Revenue
From external customers
Segment revenue
Other income
Employment costs
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
373,963
373,963
256
(351,515)
(764)
(191)
(4,705)
17,044
9,709
9,709
76
(6,720)
(756)
(17)
(1,055)
1,237
383,672
383,672
332
(358,235)
(1,520)
(208)
(5,760)
18,281
(4,934)
13,347
(3,737)
9,610
-
9,610
Labour Hire
$000
Training
$000
Total
$000
329,517
329,517
1,510
(313,646)
(803)
(170)
(4,851)
11,557
7,324
7,324
502
(5,933)
(643)
(9)
(1,071)
170
336,841
336,841
2,012
(319,579)
(1,446)
(179)
(5,922)
11,727
(4,682)
7,045
(1,976)
5,069
-
5,069
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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
53
Notes to the Financial Statements
a. Information about major customers
Included in revenues from external customers are revenues of $109.90 million (2020: $94.5 million) which arose
from sales to 2 (2020: 2) of the Group’s customers whose individual revenue exceeds 10% of total revenue in the
Labour Hire segment. Sales to these 2 customers were $54 million and $55.9 million respectively (2020: $60.2
million and $34.3 million respectively).
There are no customers whose individual revenue exceeded 10% of total revenue in the Training segment in
either financial year.
25. 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/(loss) on disposal of fixed assets
- Lease liability non-cash expense
- Loss on contingent consideration
- 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 assets
- (Decrease)/increase in trade and other payables
- (Decrease)/increase in dividends payable
- (Decrease)/increase in provisions
- (Decrease)/increase in other liabilities
- (Decrease)/increase in current tax liabilities
- (Decrease)/increase in deferred tax liabilities
Net cash from operating activities
2021
$000
9,610
1,785
164
(36)
67
45
(15,003)
(637)
(309)
(1,015)
9,881
60
766
(981)
(551)
1,577
5,423
2020
$000
5,069
2,068
52
11
75
-
(894)
417
(393)
(1,092)
3,447
400
(335)
4,173
1,327
(200)
14,125
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
54
Notes to the Financial Statements
26. BUSINESS COMBINATION
During the year ended 4 July 2021, 100% of the shares in The Instruction Company (TIC) were acquired. The
acquisition was completed on 15 September 2020 with a financial effective date of 6 July 2020.
The acquisition price for the purchase of The Instruction Company was $1.85 million. The initial payment of $1.1
million was made on completion with a further deferred consideration payment of $0.375 million made during
June 2021. A further final deferred consideration payment is due to be made during September 2021.
The Instruction Company is a Registered Training Organisation (RTO) servicing the Rail sector since 1996, creating
and delivering rail training solutions to track owners, rail operators, contractors and service providers across
Australia.
Note
18
Purchase consideration
Cash consideration paid Sep-20
Deferred consideration paid Mar-21
Deferred consideration due Sep-21
Total consideration
Assets and liabilities acquired:
Cash and cash equivalents
Trade and other receivables
Deferred tax assets
Trade and other payables
Dividends payable
Current tax payable
Non-current liabilities
Fair value of assets acquired
Goodwill on acquisition
Cashflows on acquisition
Cash consideration paid Sep-20
Deferred consideration paid Mar-21
Cash acquired
Total cashflow outflows on acquisition to 4 July 2021
Note:
1. Effective date of TIC acquisition.
6 July 20201
$000
1,100
375
375
1,850
464
539
37
(327)
(464)
(34)
(19)
196
1,654
1,100
375
(464)
1,011
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
55
Notes to the Financial Statements
27. FAIR VALUE MEASUREMENT
Fair value hierarchy
The following tables detail the Group’s assets and liabilities, measured or disclosed at fair value, using a three-
level hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being:
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access
at the measurement date.
Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Consolidated – 4 July 2021
Assets
Total assets
Liabilities
TIC Deferred Consideration
CCL Contingent Consideration – Earn
Out Year 2
Redemption liability
Total liabilities
Consolidated - 5 Jul 2020
Assets
Total assets
Liabilities
CCL Contingent Consideration –
Retention
CCL Contingent Consideration – Earn
Out Year 1
CCL Contingent Consideration – Earn
Out Year 2
Redemption liability
Total liabilities
Level 1
$000
Level 2
$000
Level 3
$000
Total
$000
-
-
-
-
-
Level 1
$000
-
-
-
-
-
-
-
375
825
-
1,200
Level 2
$000
-
600
-
-
-
600
-
-
-
1,973
1,973
Level 3
$000
-
-
789
789
1,973
3,551
-
375
825
1,973
3,173
Total
$000
-
600
789
789
1,973
4,151
There were no transfers between levels during the year.
The Fair values of the Group’s remaining assets and liabilities are approximately equal to their carrying values.
The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the
current market interest rate that is available for similar financial liabilities.
Valuation techniques for fair value measurements categorised within level 2 and level 3
The Instruction Company deferred consideration has arisen as a result of the business combination detailed in
Note 26. The liability represents two deferred payments of $0.375 million each to be made on the six month
and twelve month anniversaries of the completion date of the acquisition as in accordance with The Instruction
Company Share Sale and Purchase agreement.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
56
Notes to the Financial Statements
The CCL contingent consideration – retention arose as a result of a previous business combination for the CCL
Group. The liability was contingent on the CCL Group continuing to operate specific enterprise bargaining terms
and conditions over a three-year period from completion date of the acquisition. In accordance with the CCL
Group Share Sale and Purchase Agreement, the agreed retention amount was $600,000.
The CCL contingent consideration – Earn out year 1, which has been paid during the period, and Earn out year 2
arose in accordance with the CCL Group Share Sale and Purchase Agreement. The Earn out year 1 payment
made was adjusted for the final FY20 EBITDA, whilst the Earn out year 2 liability has currently been valued
using actual FY21 EBITDA levels.
The redemption liability has arisen as a result of a previous business combination for the CCL Group. The
liability has been valued at the present value of the redemption amount or the put option consideration
amount in accordance with the underlying CCL Group Share Sale and Purchase Agreement.
Level 3 assets and liabilities
Movements in level 3 assets and liabilities during the current year are set out below:
CCL
Contingent
Consideration
Earn Out Yr1
CCL
Contingent
Consideration
Earn Out Yr2
Redemption
Liability
Consolidated
$000
$000
$000
Total
$000
Balance at 6 July 2020
Gains/(losses) recognised in
other comprehensive
income
Additions
Settlements during the year
Transfer to Level 2
Balance at 4 July 2021
789
789
1,973
3,551
9
-
(798)
-
-
36
-
-
(825)
-
-
-
-
45
-
(798)
(825)
-
1,973
1,973
CCL
Contingent
Consideration
Earn Out Yr1
CCL
Contingent
Consideration
Earn Out Yr2
Redemption
Liability
Consolidated
$000
$000
$000
Balance at 1 July 2019
Gains/(losses) recognised in
other comprehensive
income
Additions
Settlements during the year
Balance at 5 July 2020
-
-
789
-
789
-
-
789
-
789
Total
$000
-
-
-
-
1,973
3,551
-
-
1,973
3,551
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
57
Notes to the Financial Statements
The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:
Description
Redemption liability
Range
(weighted
average)
2,887,786
Unobservable inputs
EBITDA FY during which Put
Option exercised & EBITDA
FY immediately following FY
during which Put Option
exercised
Sensitivity
10% change would increase/decrease fair
value by $175,030.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
58
Notes to the Financial Statements
28. CONTROLLED ENTITIES
Set out below are the controlled entities of Ashley Services Group Limited:
Action Arndell Park Pty Limited
Action Botany Pty Limited
Action James (Qld) Pty Limited
Action James NSW Pty Limited
Action James Parramatta Pty Limited
Action James WA Pty Limited (formerly Action Workforce AC
Pty Limited)
Action James Western Suburbs Pty Limited
Action Job Support Pty Limited
Action MMX Pty Limited
Action Workforce ACT Pty Limited
Action Workforce COL1 Pty Limited
Action Workforce COS1 Pty Limited
Action Workforce COT Pty Limited
Action Workforce IMT Pty Limited
Action Workforce NSW Pty Limited
Action Workforce OS Pty Limited
Action Workforce OST Pty Limited
Action Workforce Pty Limited
Action Workforce T1 Pty Limited
Action Workforce T2 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
ADV6 Pty Limited
Advance Exchange Pty Limited
Advance GW Pty Limited
Advance MIX Pty Limited
Advance Recruitments Pty Limited
AIVD Holdings Pty Limited
ASG Electrical Contracting Pty Ltd (formerly ADV7 Pty
Limited)
Ash Pty Limited
Ashley Institute Holdings Pty Limited
Australian Institute of Vocational Development Pty Limited
AWF Training 3 Pty Limited
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
Country of
incorporation
Australia
Australia
2021 percentage
owned
%
100
100
2020 percentage
owned
%
100
100
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
59
Notes to the Financial Statements
Country of
incorporation
2021 percentage
owned
%
2020 percentage
owned
%
BCC Labour Solutions Pty Ltd (formerly Action Workforce CAT
Pty Limited)
Cantillon Holdings Pty Limited
CCL Group Holdings Pty Ltd (formerly Advance GX Pty Ltd)
College of Innovation and Industry Skills Pty Limited
(formerly Action
Complete Traffic Services (VIC) Pty Ltd
Concept AWF Pty Limited
Concept Electrical Resources Pty Ltd (formerly Action James
Mascot Pty Limited)
Concept Employment (Aust) Pty Limited
Concept Engineering (Aust) Pty Limited
Concept Engineering Contracting Holdings Pty Ltd (ASG
Integracom (Aust) Holdings Pty Ltd
Concept Engineering Contracting Pty Ltd (formerly ASG
Integracom (Aust) Pty Ltd)
Concept Power Pty Ltd (formerly Action James WCF Pty
Limited)
Concept Project Resources Pty Limited
Concept Rail Pty Ltd (formerly AWF Training 4 Pty Limited)
Concept Recruitment Specialists Pty Ltd
Concept Retail Solutions Pty Ltd
Merchandising Pty Ltd)
Construction Contract Labour (VIC) Pty Ltd
CP Action Workforce 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
James Warehousing Pty Limited
Logistics People Pty Limited
Qualitas Education Pty Limited
Silk Group Holdings Pty Limited
TBRC Holdings Pty Limited
The Blackadder Recruitment Company Pty Limited
The Instruction Company Holdings Pty Ltd (formerly AWF
Training 2 Pty Ltd)
The Instruction Company Pty Ltd*
Track Safety Australia Pty Ltd (formerly AWF Training 1 Pty
Ltd)
Tracmin Holdings Pty Limited
Tracmin Pty Limited
VIC Traffic and Labour Solutions Pty Ltd
Vocational Training Australia 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
•
Acquired during financial year 2021. See Note 26. Business Combinations for further details.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
100
100
100
100
80
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100
100
100
80
100
100
100
100
100
100
100
100
100
100
100
80
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
80
100
60
Notes to the Financial Statements
29. PARENT ENTITY DISCLOSURES
a.
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Common control reserve
Accumulated losses
Total equity
Note:
1. Accumulated losses includes dividends paid of $6.5 million.
b.
Statement of profit or loss and other comprehensive income
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income/(loss)
2021
$000
92
18,206
18,298
(825)
(15,891)
(16,716)
1,582
148,815
(59,261)
(87,972)
1,582
2020
$000
92
19,605
19,697
(1,389)
(10,248)
(11,637)
8,060
148,815
(59,261)
(81,494)
8,060
2021
$000
-
-
-
2020
$000
-
-
-
c. 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.
d.
Contingent liabilities of the Parent Entity
The Parent entity had no other known material contingent liabilities as at 4 July 2021.
Commitments for expenditure for the Parent entity
e.
The Parent entity had Nil committed expenditure as at 4 July 2021 (5 July 2020: Nil).
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
61
Notes to the Financial Statements
30. 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'.
a.
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
2021
$000
291,868
61
(275,129)
(545)
(141)
(3,209)
12,905
(1,783)
11,122
-
11,122
2020
$000
261,371
913
(250,347)
(509)
(151)
(2,903)
8,374
(2,512)
5,862
-
5,862
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
62
Notes to the Financial Statements
b.
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
Right-of-use assets
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Dividends payable
Current tax payable
Lease liabilities
Other liabilities
Provisions
Total current liabilities
Non-current liabilities
Lease liabilities
Other liabilities
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Common control reserve
Retained earnings
Total Equity
2021
$000
52
27,917
5,263
33,232
2020
$000
2,302
19,952
677
22,931
113,269
100,820
393
3,599
683
18,208
136,152
169,384
36,799
679
13,921
13,386
221
825
2,047
67,878
509
1,973
222
2,704
70,582
98,802
148,815
(59,261)
9,248
98,802
459
3,599
783
19,605
125,266
148,197
28,149
-
7,487
11,603
241
1,389
1,634
50,503
566
2,761
208
3,535
54,038
94,159
148,815
(59,261)
4,605
94,159
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
63
Notes to the Financial Statements
c.
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 at the end of the financial year
2021
$000
4,605
-
11,122
(6,479)
9,248
2020
$000
2,349
281
5,862
(3,887)
4,605
d.
Contingent liabilities of the Extended Closed Group
The Extended Closed Group had no other known material contingent liabilities as at 4 July 2021.
e.
Commitments for expenditure for the Extended Closed Group
The Extended Closed Group had Nil committed expenditure as at 4 July 2021 (5 July 2020: Nil).
f.
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 3 July 2022. The directors are satisfied that collectively the Group has the
financial ability to provide this support.
g.
Security Offered
The Westpac facility (see Note 19) is subject to a Security which includes, but is not limited to the following:
▪ 1st ranking General Security Agreement over the assets and undertakings of the Borrower and its
Guarantors;
▪ Contractual Subordination of Shrimpton Holdings Pty Ltd facility of $5 million; and
▪ Flawed Asset Arrangement – Deposit of Action Workforce Pty Ltd and Concept Engineering (AUST) Pty Ltd
for Invoice Finance Facility collections.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
64
Notes to the Financial Statements
31. RELATED PARTY TRANSACTIONS
a.
Parent company
There is no ultimate parent company for Ashley Services Group Limited.
Transactions with related entities
b.
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:
20211
$
20201
$
138,061
130,967
-
41,904
46,267
46,176
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 an office at
Arndell Park, New South Wales1
Interest and line fee paid to Shrimpton Holdings Pty Limited, an entity which is controlled by
Mr Ross Shrimpton
Fees payable to Trood Pratt & Co (of which Ian Pratt is a Partner) for taxation services
Note:
1. All amounts as shown are exclusive of GST.
32. SECURED AND CONTINGENT LIABILITIES
For assets pledged as security for borrowing facilities see Note 19.
The Group had no other known contingent liabilities at 4 July 2021.
33. FINANCIAL INSTRUMENTS
a.
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
b.
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 2021
65
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
2021
$000
129
(129)
129
(129)
2020
$000
142
(142)
142
(142)
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
d.
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 2021
66
Notes to the Financial Statements
financial assets and liabilities. Included in Note 19 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 assets
2021
Cash and cash equivalents
Trade and other receivables
Contract assets
Total
2020
Cash and cash equivalents
Trade and other receivables
Contract assets
Total
Financial liabilities
2021
Trade and other payables
Borrowings
Lease liabilities
Other liabilities
Total
2020
Trade and other payables
Borrowings
Lease liabilities
Other liabilities
Total
Total
$000
2,969
44,421
791
48,181
Total
$000
8,063
29,418
154
37,635
Total
$000
27,392
1,090
2,212
3,193
Weighted average
effective interest
rate %
n/a
n/a
n/a
Weighted average
effective interest
rate %
n/a
Within 1 year
$000
2,969
44,421
791
48,181
1 to 5 years
$000
-
-
Over 5 years
$000
-
-
-
-
-
-
Within 1 year
$000
8,063
1 to 5 years
$000
-
Over 5 years
$000
-
n/a
n/a
29,418
154
37,635
-
-
-
-
-
-
Weighted average
effective interest
rate %
n/a
4.01%
3.00%
n/a
Weighted average
effective interest
rate %
n/a
4.35%
3.00%
n/a
Within 1 year
$000
27,392
1,090
888
1,220
30,590
Within 1 year
$000
18,517
-
723
1,389
20,629
1 to 5 years
$000
-
-
Over 5 years
$000
-
-
1,324
-
1,324
-
1,973
1,973
33,887
1 to 5 years
$000
-
-
Over 5 years
$000
-
-
1,716
789
2,505
-
1,973
1,973
Total
$000
18,517
-
2,439
4,151
25,107
Fair value of financial instruments
Refer to Note 27 for details on the fair value of financial instruments.
ASHLEY SERVICES GROUP ANNUAL REPORT 2021
67
Notes to the Financial Statements
34. 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 27 July 2021 the Group declared a fully franked final dividend of 2.4 cents in relation to the financial year
ended 4 July 2021.
There remains significant uncertainty regarding how the COVID-19 pandemic will evolve, including the duration
of the pandemic, the severity of the downturn and the speed of economic recovery. In accordance with AASB
110 Events after the Reporting Date, the Group considered whether events since the end of the financial year
confirmed conditions existing before the reporting date. The Group did not identify any subsequent events
triggered by COVID-19 related developments, which would require adjustment to the amounts or disclosures in
the financial statements. Additionally, no other material non-adjusting subsequent events relating to COVID-19
were identified requiring disclosure in the financial statements. The COVID-19 situation remains fluid and the
Group continues to closely monitor the financial effects.
35. DIVIDENDS
a. Ordinary shares
On 27 July 2021 the Group declared a fully franked final dividend of 2.4 cents in relation to the financial year
ended 4 July 2021. With a fully franked interim dividend of 1.8 cents previously declared on 28 January 2021, this
brings the full year dividend for the financial year ended 4 July 2021 to a total of 4.2 cents, a 56% increase on the
dividend for the prior financial year (FY20: 2.7 cents).
b.
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
(2020: 30%)
2021
$000
2020
$000
2,411
1,670
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 2021
68
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 19 August 2020.
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 888 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
176
249
120
278
65
888
124,789
619,096
994,449
9,990,184
132,247,386
143,975,904
%
0.09
0.43
0.69
6.94
91.85
100.00
The number of shareholders holding less than a marketable parcel of Fully Paid Ordinary shares is 176 with a
total number of shares held is 124,789.
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 Richmond Hill Capital Pty Ltd
Number
80,279,030
12,466,452
%
55.76%
8.66%
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 2021
69
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
Citicorp Nominees Pty Ltd
Hishenk Pty Ltd
HSBC Custody Nominees (Australia) Limited
Certane CT Pty Ltd
BNP Paribas Nominees Pty Ltd
Mr Marc Shrimpton
Action James Holdings Pty Limited
Moat Investments Pty Ltd
Super Wide Pty Ltd
Mr Andrew Douglas Shrimpton
Gailforce Marketing & PR Pty Limited
Mr Christopher John McFadden & Mrs Toula McFadden
Mrs Kerry Elizabeth Draffin
Mast Financial Pty Ltd
Mr Dean Michael Shrimpton
Velkov Funds Management Pty Ltd
Stirling Superannuation Pty Ltd
Mr Mark Christopher Garrick
Total
Annual General Meeting
Number of shares
80,279,030
17,879,231
3,245,571
2,400,000
1,862,171
1,582,009
1,580,880
1,500,000
1,486,615
1,424,000
1,140,326
1,115,000
708,049
699,999
637,416
637,231
632,388
628,000
600,000
596,618
%
55.76%
12.45%
2.25%
1.67%
1.31%
1.10%
1.10%
1.04%
1.03%
0.99%
0.79%
0.77%
0.49%
0.49%
0.44%
0.44%
0.44%
0.44%
0.42%
0.41%
120,634,534
83.79%
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 4 November 2021 OR electronically via a virtual AGM (details will be
provided as required). 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 2021
70
Bankers
Westpac
Level 18
275 Kent Street
Sydney NSW 2000
Telephone: + 61 2 9155 7700
Facsimile: + 61 2 8253 4128
Website: www.westpac.com.au
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 2021
71