Appendix 4E
Year Ended 3 July 2022
Lodged with the ASX under Listing Rule 4.3A
31 August 2022
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 3 July 2022. The previous corresponding reporting period was the
52 weeks from 5 July 2020 to 4 July 2021. The group works on a 4-4-5 week based calendar in line with the group’s
weekly reporting calendar. 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
17.2%
21.8%
26.8%
To
To
To
Amount
$’000
449,776
11,356
11,315
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 3 July 2022, the Group did not gain control over any new entities (2021: The
Instruction Company Pty Ltd was acquired on 15 September 2020, with a financial effective date of 6 July 2020).
Loss of control over entities:
Not applicable.
Details of interests in significant joint ventures and associates:
On 22 June 2022, the Group acquired a 49% interest in Dardi Munwurro Labour and Traffic
Management Pty Limited, a company providing Indigenous labour hire in Victoria.
Dividend re-investment plans:
Not applicable.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
1
Dividends:
Record
Date
Payment
Date
Interim Dividend - 2022
3 March 2022
17 March 2022
Final Dividend - 2022
1 September 2022
16 September 2022
Additional Information:
Cents
per
Share
3.0
3.0
Franked Amount
per Share (Cents)
3.0
3.0
2022
Restated 2021
Net tangible assets ($000)
Shares on Issue
Net tangible assets per share ($)
Note:
1. Right-of-use assets are excluded assets for the purposes of the Net Tangible Assets calculation.
17,2021
143,975,904
0.119
15,0671
143,975,904
0.105
Audit qualification or review:
The audited financial statements are attached.
Ross Shrimpton
Managing Director
Sydney, 31 August 2022
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
Ashley Services Group Limited Annual Report 2022
CHAIRMAN AND MANAGING DIRECTOR’S REVIEW ------------------------------------------------------------------ 5
DIRECTORS’ REPORT --------------------------------------------------------------------------------------------------------- 8
AUDITOR’S INDEPENDENCE DECLARATION -------------------------------------------------------------------------- 20
CORPORATE GOVERNANCE STATEMENT ----------------------------------------------------------------------------- 21
DIRECTORS’ DECLARATION----------------------------------------------------------------------------------------------- 22
INDEPENDENT AUDITOR’S REPORT ------------------------------------------------------------------------------------ 23
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ------------- 28
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ----------------------------------------------------------- 29
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ------------------------------------------------------------ 30
CONSOLIDATED STATEMENT OF CASH FLOWS --------------------------------------------------------------------- 31
NOTES TO THE FINANCIAL STATEMENTS ----------------------------------------------------------------------------- 32
ASX ADDITIONAL INFORMATION --------------------------------------------------------------------------------------- 72
CORPORATE DIRECTORY -------------------------------------------------------------------------------------------------- 74
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
4
Chairman and Managing Director’s Review
MR IAN PRATT AND MR ROSS SHRIMPTON
The financial year has proven to be a strong success, particularly considering the challenges associated with the
pandemic, rising labour costs and overall shortages of skilled labour and staff. We continue to be well positioned
to meet these challenges with strengthened management and systems allowing the Group to be highly
competitive across all our market segments.
The year also saw us acquire a minority interest of 49% in Dardi Munwurro Labour and Traffic Management Pty
Limited, a company providing Indigenous labour hire in Victoria. Subsequent to year end, the Group similarly
acquired a non-controlling interest of 49% in Yalagan Infrastructure Pty Limited, a company supporting
Indigenous labour hire in New South Wales. These new entities broaden Ashley Services labour hire offerings
for Indigenous labour. Additionally, on 5 July 2022, the Group acquired a 75% interest in Linc Personnel Pty
Limited, a company currently providing labour to the oil and gas sector in Western Australia and the Northern
Territory. We continue to review potential acquisitions in line with our strategy to broaden our geographical
and industry footprints in growing profitable sectors.
On 28 July 2022, the Group announced a fully franked final dividend of 3.0 cents per share (Ex-div: 31 August
2022; Payment: 16 September 2022). Together with the previously paid 3.0 cents per share interim dividend,
this delivers a fully franked full year dividend of 6.0 cents per share for 2022, a 43% increase on the 2021
dividend.
We remain focused on continuing improvement in our core areas of strength; namely safety, customer
satisfaction, systems and internal staff development as well as enhancing our marketing capability and
improving labour retention. We are also committed to additional growth and value creation through the
acquisition and successful integration of new businesses.
This years’ achievement is again a testament to our 300 internal staff who are the backbone of our organisation’s
continuing success.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
5
Chairman and Managing Director’s Review
DISCUSSION ON RESULTS
Earnings
Net profit after tax (“NPAT”) for the financial year ended 3 July 2022 was $11.4 million (restated FY21: profit
$9.3 million). Key elements within the result include:
Revenues
Group Revenue at $449.8 million increased by $66.1 million (17%) from the comparative period.
Labour Hire revenues at $438.2 million were up $64.3 million (17%), with growth in all business lines except
Concept Engineering. Growth was particularly strong in Action Workforce, predominantly in Victoria where
hours worked with existing customers grew significantly.
Training revenues at $11.5 million were up by $1.8 million (19%) with growth achieved across both the Ashley
and The Instruction Company (“TIC”) training businesses.
Earnings before interest taxes depreciation and amortisation (“EBITDA”)
Group EBITDA for the financial year was $18.7 million, up by $3.45 million (23%) on the prior corresponding
period (restated FY21: EBITDA of $15.25 million). EBITDA for the 2nd half (“H2”) was $9.4 million versus $9.3
million for the first half (“H1”) and $8.65 million in the second half of FY21 (restated).
Labour Hire division EBITDA of $21.7 million, was up $4.2 million (24%) on the prior corresponding period
(restated FY21: $17.56 million), improving in line with the revenue increases. EBITDA margin increased slightly
to 4.95% (restated FY21: 4.7%).
Training division EBITDA of $1.5 million was down $0.5 million or 25% on the prior corresponding period (FY21:
$2.0 million), with compliance costs increasing and classroom-based training continuing to be impacted by
COVID-19.
Corporate overheads (excluding interest, depreciation and amortisation), at $4.5 million were up $0.2 million
on prior corresponding period (FY21: $4.3 million), primarily due to increases in the cost of insurance and salary
inflation.
Statement of financial position
Net assets at $31.5 million were up by $3.5 million on the prior year (restated 2021: $28.0 million) mainly
reflecting the impact of our dividend policy which pays out approximately 75% of attributable profit to
shareholders. The payout ratio for the current financial year was 76%.
Noteworthy balance sheet movements include:
Trade Receivables up $5.3 million to $42.9 million. Debtors have increased in line with the revenue increases -
revenue for May and June 22 was $12 million (or 14%) above the prior period. Trade and other payables were
up $3.4 million to $30.8 million reflecting the increased activity. Net working capital increased $1.9 million,
representing our expected increase in underlying working capital at a rate of 3%-4% of revenues.
Other receivables increased $5.7 million to $12.7 million, mainly due to the increase in receivables due under
the Boosting Apprenticeship Commencements Scheme (“BAC”). The collection of these receivables will benefit
operating cash flows in the financial year ended 30 June 23.
Property, plant and equipment increased $0.8 million, with capital additions of $1.4m above depreciation of
$0.5m and minimal disposals in the year.
Borrowings increased $4.2 million and cash decreased $1.2 million, with total net debt increasing $5.4 million
during the year to fund the net working capital and other receivable increases, as well as the $8.2 million of
dividend payments and $1.2 million in remaining CCL and TIC acquisition payments.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
6
Chairman and Managing Director’s Review
Cash Flow
Operating cash flow was stronger in H2, with an inflow of $6.2 million ($0.5 million H1), bringing the full year
operating cash flow to $6.7 million. Operating cash flow before income taxes and interest was $11.65 million,
$7 million below EBITDA, due primarily to increased working capital requirements linked to revenue growth and
the increase in other receivables.
The overall outflow from investing activities of $2.8 million included the final earn out payments relating to the
CCL and TIC acquisitions ($0.825 million and $0.375 million respectively) as well as normal stay in business capital
requirements and course material development costs.
The overall outflow from financing activities of $5.1 million was primarily due to the combined $8.2 million
dividend payments covering the 2021 final dividend ($3.5 million), the 2022 interim dividend ($4.3 million) and
the 2021 final CCL final dividend to minority shareholders ($0.46 million). Lease payments of $1.1 million were
in line with the prior period and borrowings increased $4.2 million.
Overall, this delivered a net cash decrease in cash and cash equivalents for FY22 of $1.2 million (2021: $5.1
million outflow).
DIVIDEND
On 28 July 2022 the Group declared a fully franked final dividend of 3.0 cents in relation to the financial year
ended 3 July 2021. With a fully franked interim dividend of 3.0 cents previously declared on 2 February 2022,
this brings the full year dividend for the financial year ended 3 July 2021 to a total of 6.0 cents, a 43% increase
on the dividend for the prior financial year (FY21: 4.2 cents).
EVENTS SUBSEQUENT TO BALANCE DATE
In addition to the dividend announcement outlined above, subsequent to year end the Group acquired:
1. a 75% interest in Linc Personnel Pty Limited for $3.615 million. This company currently provides labour
to the oil and gas sector in Western Australia and the Northern Territory; and
2. a non-controlling interest of 49% in Yalagan Infrastructure Pty Limited, a company supporting
Indigenous labour hire in New South Wales.
Other than these items, 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.
Ian Pratt
Chairman
Ross Shrimpton
Managing Director
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
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 3 July 2022.
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
Mr Ross Shrimpton Managing
Director
Mr Ron Hollands
Director
Appointed / Resigned
Appointed 1 October 2015
Appointed 12 Oct 2000; Managing Director (“MD”) to 15 Feb 2016, Non-
Executive Director 15 Feb 2016 to 23 Jan 2017 and Managing Director from
23 Jan 2017
Appointed 22 June 2022, resigned 25 July 2022
Mr Paul Brittain
Mr Chris McFadden
Executive Director Appointed 25 July 2022
Executive Director Appointed 6 April 2017; resigned 22 June 2022
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 Pratt Partners 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 | MD (since 23 January 2017) (previously Non-Executive Director
from 15 February 2016 to 23 Jan 2017 and MD 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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
8
Directors’ Report
•
•
•
Mr Ron Hollands | Executive Director (from 22 June 22 to 25 July 2022) & Company
Secretary (for the entire financial year)
Qualifications | Bbus (UTS), ICAA, MBA (MGSM)
Experience | 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 30 years’ experience in a range of industries.
Mr Paul Brittain | Executive Director (from 25 July 2022)
Qualifications | BSc (Exeter, UK), CA, AMP (Wharton)
Experience | Paul was appointed Chief Financial Officer and Executive Director of
Ashley Services Group on 25 July 2022. Paul, a chartered accountant, worked with
Touche Ross in the UK and Deloitte in Sydney, before spending nearly 30 years in large
divisional CFO and M&A roles in the Construction Materials Industry (Rinker and Boral)
and the Engineering and Industrial Sectors (UGL and Coates Hire), working throughout
both Australia and the USA. Most recently Paul was the EGM Finance for Boral
Australia. Paul was also previously CFO of Ashley Services Group from December 2014
to February 2017.
Paul is a Member of Chartered Accountants Australia and New Zealand.
Paul is a member of the Nominations, Audit & Risk Management and Remuneration
Committees.
Mr Chris McFadden | Executive Director (from 6 April 2017) & Company Secretary
(from 26 August 2020); resigned 22 June 2022
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, CFO of Staples Australia, Senior Commercial Manager at
Woolworths and Asia-Pac CFO of The Nuance Group.
Chris is a Fellow of CPA Australia and a Graduate of the Australian Institute of Company
Directors.
Chris was a member of the Nominations, Audit & Risk Management and Remuneration
Committees, up until his date of resignation.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
9
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 Ron Hollands
Mr Paul Brittain
Mr Chris McFadden
•
Number
of Shares Held
15,060
Shareholding
•
%
0.01
80,279,030
55.76
434,497
0.31
-
0.00
-
0.00
Directorships of other listed companies
Directorships held in other listed companies by the Directors in the three years immediately before the end of
the financial year are as follows:
Table 3: Other Directorships of listed entities
Name
Mr Ian Pratt
Mr Ross Shrimpton
Mr Ron Hollands
Mr Paul Brittain
Mr Chris McFadden
a. Principal activities
Company
Date from
Date to
Nil
Nil
Nil
Nil
Nil
-
-
-
-
-
-
-
-
-
-
The principal activities of the Group during the financial year were the provision of labour hire (including
recruitment) and training services.
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
7
7
7
7
7
7
2
2
2
2
2
2
-
-
-
-
-
-
-
-
-
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
-
-
-
10
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 $11,356,000 (restated 2021: profit
$9,326,000).
b. Review of operations
financial
Information on the operations and
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 2022 except as follows:
On 28 July 2022 the Group declared a fully franked
final dividend of 3.0 cents in relation to the financial
year ended 3 July 2022, with a payment date of 16
September 2022.
On 5 July 2022, the Group acquired a 75% interest
in Linc Personnel Pty Limited, a company currently
providing labour to the oil and gas sector in
Western Australia and the Northern Territory.
On 25 July 2022, the Group acquired a minority
interest of 49% in Yalagan Infrastructure Pty
Limited, a company supporting Indigenous labour
hire in New South Wales.
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 3 July 2022.
Details of the amounts paid to HLB Mann Judd
Assurance (NSW) Pty Ltd 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 20 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
the purpose of taking responsibility on behalf of the
Group for all or part of those proceedings.
g. Rounding off of amounts
In accordance with ASIC Corporations (Rounding in
Financial
Instrument
/ Directors’ Reports)
2016/191, amounts in the financial report are
rounded off to the nearest thousand dollars unless
otherwise indicated.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
11
Directors’ Report
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 executive 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 (resigned 22 June 2022).
•
•
Non-Executive Directors:
•
•
Ian Pratt
Ron Hollands (appointed 22 June 2022,
resigned 25 July 2022).
Other key management personnel:
•
•
Paul Rixon (General Manager, Labour Hire,
resigned 1 April 2022)
Glen Everett (Chief Operating Officer,
commenced 7 March 2022).
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
is
to ensure
The objective of the Group’s executive reward
framework
for
performance is competitive and appropriate for the
results delivered. The framework seeks to align
executive reward with achievement of strategic
reward
that
objectives and
shareholders.
the creation of value
for
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;
short-term performance incentives, provided
in cash; and
incentives, to be
Long-term performance
provided in either cash or shares (at the
Long-Term
company’s sole discretion).
•
•
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
12
Directors’ Report
performance plans have been suspended since
30 June 2017, but a new plan is expected to be
put in place for certain key management
personnel from the financial year ended 30
June 2023 onwards, to be presented for
review and approval by shareholders at the
November 2022 annual general meeting.
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 3 July 2022.
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 FY22
Overview of the senior executive STI plan
Who participates in the
Senior Executive STI plan?
Senior executives, other than the MD, 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.
100% of any STI award is paid in cash within 30 days of finalisation of the audited Annual Report.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
13
Directors’ Report
STI plan for the financial year ended 30 June 2023
The remuneration committee has approved a similar Short Term Incentive (STI) plan for the year ended 30 June
2023, 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 executive remuneration
Details of remuneration of the Directors and other key management personnel of Ashley Services Group are set
out in the tables on pages 14 to 18.
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 7: Executive and Key Management Personnel Service Agreements
Name
Ross Shrimpton
Chris
McFadden,
resigned 22 June 2022
Paul Brittain, appointed
25 July 2022
Paul Rixon, resigned 1
April 2022
Glen Everett, appointed
7 March 2022
Base Salary $1
450,000
450,000
475,000
299,849
450,000
Target STI %2
Target LTI %2, 3, 4
-
50
30
50
30
-
50
To be
determined
50
To be
determined
Term of
agreement
Ongoing
n/a
Notice Period
6 months
6 months
Ongoing
6 months
n/a
6 months
Ongoing
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.
4.
This plan applicable for Chris McFadden and Paul Rixon has been suspended since the financial year ended 30 June 2017.
A new plan is expected to be put in place for Paul Brittain and Glen Everett for the financial year ended 30 June 2023 onwards, to be
presented for review and approval by shareholders at the November 2022 annual general meeting.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
14
Directors’ Report
Table 8: Statutory key performance indicators of the group over the last five years
2022
2021
2020
2019
2018
Profit / (Loss) for the year attributable to shareholders ($000)
Basic earnings per share (cents)
Dividend payments ($000)1
11,315
7.86
8,639
8,923
6.20
6,047
4,667
3.24
3,887
5,424
3.77
3,887
Dividend payout ratio (%)
Increase / (decrease) in share price (%)2
Total KMP incentives as percentage of profit/(loss) for the year
(%)
Note:
1. 2022 Final Dividend declared 28 July 2022 in relation to the 2022 financial year, with payment date of 16 September 2022.
83.3
(0.1)
67.8
92.3
43.4
76.3
4.1
0.0
3.9
71.7
33.3
6.1
4,789
3.33
3,600
75.1
204.7
3.1
2022 Interim Dividend declared 2 February 2022 in relation to the 2022 financial year, with payment date of 17 March 2022.
2021 Final Dividend declared 27 July 2021 in relation to the 2021 financial year, with payment date of 17 September 2021.
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 9: 2022 – Remuneration of Key Management Personnel calculated in line with Australian Accounting Standards
2022
Name
Non-executive Directors
Ian Pratt
Ron Hollands
Executive Director
Ross Shrimpton
Chris McFadden5
ST1 employee benefits
Cash salary
&
fees
$
Termination
payments5
$
ST1 employee
bonus
S
205,479
-
-
10,000 - -
426,432
426,432
-
-
38,665
(5,461)
PE2
benefits
Super-
annuation
$
20,548
1,025
23,568
23,568
LT3
employee
benefits
Performance
based
Remuneration
Total4
$
-
-
$
226,027
11,025
10,624
460,624
%
-
-
-
-
483,204
(1.12)
Other key management personnel
Paul Rixon6
Glen Everett7
210,256
-
(1,459)
130,846
-
-
18,121
7,856
4,452
231,370
-
138,702
(0.63)
-
Total
Note:
1. ST – Short-term. The amount shown for bonus expense represents the under or over-accrual for bonus payments in relation to
15,076 1,550,952 10(0.45)1(((0.45)
1,409,445
(6,920)
94,686
38,665
the year ending 4 July 2021.
2. PE – Post-employment.
3. LT – Long-term. All previous LTI performance hurdles were not met and LTI plans have been suspended since 2017. No expense has
been recognised in the profit or loss account for the year ended 3 July 2022. LT expense also includes accruals for Long Service
Leave.
4. Amounts included in the above table include amounts expensed within the Profit or Loss account for the year.
5. Resigned, effective 22 June 2022, with a mutually agreed termination payment of $38,665.
6. Resigned, effective 1 April 2022.
7. Commenced 7 March 2022.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
15
Directors’ Report
Table 10: 2022 – Remuneration payments for Key Management Personnel
2022
Name
Non-executive Directors
Ian Pratt
Ron Hollands5
Executive Director
Ross Shrimpton6
Chris McFadden7
ST1 employee benefits
Cash salary
&
fees
$
Termination
payments7
$
ST1 employee
bonus
S
205,479
-
-
10,000 - -
426,432
426,432
-
-
38,665
214,616
PE2
benefits
Super-
annuation
$
20,548
1,025
23,568
23,568
LT3
employee
benefits
Performance
based
Remuneration
Total4
$
-
-
-
-
$
226,027
11,025
450,000
703,281
%
-
-
-
30.5
31.9
-
Other key management personnel
Paul Rixon8
Glen Everett9
230,580
-
144,415
130,846
-
-
18,121
7,856
59,160
452,276
-
138,702
Total
Note:
1. ST – Short-term.
2. PE – Post-employment.
3. LT – Long-term. All previous LTI performance hurdles were not met and LTI plans have been suspended since 2017. No LTIs have
59,160 1,981,311
1,429,769
359,031
38,665
94,686
10118.1
been paid. Payments do include Long Service Leave payments.
4. Amounts included in the above table include amounts paid in the year to key management from all entities.
5. Appointed 22 June 2022, resigned 25 July 2022. During the year company secretarial fees of $20,000 have also been paid to the
Ron Holland Family Trust (in which Ron Hollands is a Trustee).
6. During the year rent and outgoings for the office at Arndell Park of $141,286 have been paid to Shrimpton Holdings Pty Limited as
trustee for the Shrimpton Family Trust (an entity controlled by Mr Ross Shrimpton).
7. Resigned, effective 22 June 2022, with a mutually agreed termination payment of $38,665.
8. Resigned, effective 1 April 2022.
9. Commenced 7 March 2022.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
16
Directors’ Report
Table 11: 2021 – Remuneration of Key Management Personnel calculated in line with Australian Accounting Standards
2021
Name
Non-executive Directors
Ian Pratt
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
PE2
benefits
Super-
annuation
$
-
-
220,077
205,480
428,306
428,306
270,054
-
-
-
-
LT3
employee
benefits
Performance
based
Remuneration
Total4
$
$
19,520
-
225,000
21,694
21,694
9,197
459,197
-
670,077
32.8
%
-
-
145,874
21,694
4,497
442,119
33.0
1,332,146
Total
Note:
1. ST – Short-term.
2. PE – Post-employment.
3. LT – Long-term. All previous LTI performance hurdles were not met and LTI plans have been suspended since 2017. No expense has
been recognised in the profit or loss account for the year ended 4 July 2021. LT expense also includes accruals for Long Service
Leave.
13,694 1,796,393
365,951
84,602
-
20.4
4. Amounts included in the above table include amounts expensed within the Profit or Loss account for the year.
Table 12: 2021 – Remuneration payments for Key Management Personnel
2021
Name
Non-executive Directors
Ian Pratt5
Executive Director
Ross Shrimpton6
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
benefits
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. All previous LTI performance hurdles were not met and LTI plans have been suspended since 2017. No LTIs have
- 1,551,893
1,332,146
135,145
84,602
-
8.7
been paid.
4. Amounts included in the above table include amounts paid in the year to key management from all entities.
5. During the year tax advisory fees of $41,904 have also been paid to Trood Pratt & Co (Company in which Ian Pratt was a Partner
until 02 March 2021).
6. During the year rent and outgoings for the office at Arndell Park of $138,061 have been paid to Shrimpton Holdings Pty Limited as
trustee for the Shrimpton Family Trust (an entity controlled by Mr Ross Shrimpton).
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
17
Directors’ Report
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. Related party transactions are disclosed in Note 33.
e.
Shares held by key management personnel
The number of ordinary shares in the Company during the 2022 reporting period held by each of the Group’s key
management personnel, including their related parties are set out below:
Table 13: Shares held by Key Management Personnel
Name
Ian Pratt
Ross Shrimpton
Chris McFadden
Mr Ron Hollands
Paul Rixon
Glen Everett
Total
Balance at start of
the period
15,060
80,279,030
699,999
419,497
96,239
-
Shares Disposed
-
Change from KMP Balance at end of the period
15,060
-
-
(37,463)
-
-
-
-
-
20,000
-
-
20,000
80,279,030
662,536
439,497
96,239
-
81,492,362
81,509,825
(37,463)
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 7.
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.
FUTURE PROSPECTS AND MATERIAL BUSINESS RISKS
The Group anticipates favourable conditions in the labour hire market in the financial year ended 30 June 2023,
given the risk of COVID-19 related lockdowns has diminished, following the successful vaccination roll out
programme across Australia. Government initiatives available during the pandemic have assisted the Group to
service our clients and as these programme wind down, we will continue to leverage the credibility generated
through our impressive ability to deliver to our customers during the pandemic and aim to increase share of
wallet with existing customers as well as securing and integrating new clients.
Additionally, our continued investment in our candidate- and client-facing technology, including a candidate app,
screening and on-boarding tools and client reporting portals, continues to enhance our competitive advantage.
This, along with an increased investment in our marketing capability and online (including social media) exposure,
will strengthen the position of our labour hire division.
Our construction-exposed labour hire brands should see improving market conditions as COVID-19 pressures
lessen and we are well placed to increase our market position if this sector ramps up again to full capacity,
particularly in the traditional construction sector. Additionally, our exposure to the infrastructure sector in
Victoria should continue to provide us with a solid base of activity with possible upside from any increasing
private construction project activity.
Margins will remain under pressure due to the competitive nature of the labour hire markets and inflationary
pressures. We continue to review potential higher margin acquisitions and industry/geographic revenue mix.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
18
Directors’ Report
Training has been relatively stable in terms of revenue over recent years apart from the lift due to the acquisition
of The Instruction Company, effective July 2020. As elements of the public health response to COVID-19 have
been relaxed, face-to-face classroom training and site-specific placement activity have returned. This would, if
sustained, provide favourable conditions for our training division.
As with any organisation, our prospects may be impacted by risks. The impact may be positive or negative,
depending on whether the risks materialise or recede. The following are thought to be the more relevant risks,
although it is the view of the directors that none of these specific risks, nor any other potential risks, are of special
significance at this point in time.
Changes in the regulatory environment are always a possibility and have the potential to create challenges for
our business. This includes federal and state legislation relating to employment and award conditions, and also
that relating to employment and training initiatives. With most of this legislation being foreshadowed in advance
of any implementation, we continue to closely monitor any such changes and their likely implications for our
business. This gives us an opportunity to participate in consultation processes and to be well placed to adapt as
and when such changes may arise.
Employment market supply and demand tensions create both challenges and opportunities for our business
model. Sourcing staff to supply the extra demands being created and the availability of candidates to fill this
demand can create challenges in fulfilment, but the scarcity of suitable workers, in many ways, drives the demand
from our customers. Our investment in our marketing capability and technology, both candidate- and client-
facing, as outlined above, is being utilised to mitigate risk in this area.
There also remains 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. It is also difficult to predict the
emergence of new variants of concern and the possible public health responses to them. We continue to monitor
these events closely.
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 2022
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
19
Auditor’s Independence Declaration
To the directors of Ashley Services Group Limited:
As lead auditor for the audit of the consolidated financial report of Ashley Services Group Limited for the
year ended 3 July 2022, 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 2022
K L Luong
Director
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
20
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.
Directors & Senior Management
Corporate & Administration
Labour Hire
Recruitment
Training
Total
Female
36%
83%
65%
92%
52%
61%
Male
64%
17%
35%
8%
48%
39%
During the financial year ended 3 July 2022 the
Company submitted
its annual report to the
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 2022 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 2022
21
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 3 July 2022 and of its performance
for the financial year ended on that date; and
ii. Complying with Australian Accounting Standards 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 32 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 3 July 2022.
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 2022
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
22
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 3 July 2022,
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 3 July 2022 and of its 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 2022
23
Key Audit Matter
How our audit addressed the key audit
matter
Revenue Recognition
Refer to Note 1 (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 $449.8 million
comprises a number of streams including:
•
labour hire revenue ($438.2 million);
•
training revenue ($11.5 million); and
•
other income ($2 thousand).
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 $421.7 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.
Our audit procedures included the following:
• Documenting the design of the key
revenue systems and processes and
testing of the key controls.
• Assessing whether the Group’s
accounting policies were in compliance
with Australian Accounting Standards
and specifically whether revenue had
been recognised in accordance with
accounting standard AASB 15 Revenue
from Contracts with Customers.
• Testing a sample of revenue
transactions to assess appropriate
revenue recognition under the Group’s
accounting policy and Australian
Accounting Standards.
• Performing analytical review over
recognised revenue and costs of sales.
• Analysis of revenue transactions using
data analysis techniques.
• Comparing the accuracy of hours on-
billed as labour hire revenue to amounts
paid to employees.
• Testing the correct cut-off and accrual of
labour hire revenue at year end.
Our audit procedures included the following:
• Documenting the design of the key
revenue systems and processes and
testing of the key controls (for Labour
Hire employees).
• Testing a sample of employment costs
recognised in the period by agreeing to
timesheets, payroll reports, and
amounts subsequently paid.
• Performing analytical review over the
labour hire margins.
• Analysis of payroll transactions using
data analysis techniques.
• Testing the correct cut-off and accrual of
employment costs at year end.
• Testing superannuation amounts paid
by assessing the validity of the data in
the contribution reports.
• Testing sample of registered
apprentices’ eligibility for wages
subsidies.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
24
Carrying Value of Goodwill
Refer to Note 15 (Intangible assets) and Note 16 (Impairment)
The Group has a Goodwill balance of $10.7m as at 3 July
2022 in relation to the Labour Hire and Training divisions.
This Goodwill arose on acquisition of subsidiary
companies in prior years.
As required by Australian Accounting Standards the
Group tested this Goodwill for impairment, at 3 July 2022.
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:
• Estimated future revenues and costs;
• Discount rates; and
• Terminal values.
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.
Our audit procedures included but were not
limited to the following:
• Assessed the identification and
determination of the Group’s CGUs
based on our understanding of the
nature of the Group’s business.
• Tested the integrity and mathematical
accuracy of the discounted cash flow
models used by management for value
in use assessments.
• Evaluated and assessed key
assumptions and methodologies applied
to the underlying cashflow forecasts
with reference to representations from
management, documented business
plans and historical results of the
business operations.
• Assessed the Group’s assumptions in
developing the discount and terminal
growth rates with reference to external
sources.
• Performed sensitivity analysis and
evaluated whether a reasonably
possible change in assumptions could
cause the carrying amount of a CGU to
exceed its recoverable amount.
• Assessed the adequacy of disclosures
included in Notes 15 and 16 to the
financial statements.
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 3 July 2022, 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
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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
25
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
communicated in our report because the adverse consequences of doing so would reasonably be expected
to outweigh the public interest benefits of such communication.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
26
REPORT ON THE REMUNERATION REPORT
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 12 to 18 of the directors’ report for the year
ended 3 July 2022.
In our opinion, the Remuneration Report of Ashley Services Group Limited for the year ended 3 July 2022
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
K L Luong
Director
Sydney, NSW
31 August 2022
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
27
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the financial year ended 3 July 2022
Revenue
Other income
Employment costs
Depreciation and amortisation expense
Finance costs
Other expenses
Profit before income tax
Income tax expense
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)
Diluted earnings per share (cents)
Note
2
2
3
3
6
25
25
The accompanying notes form part of these financial statements.
3 Jul 2022
$000
449,776
2
(421,683)
(1,772)
(831)
(9,135)
16,357
5,001
11,356
-
11,356
11,315
41
11,356
7.86
7.86
Restated
4 Jul 2021
$000
383,672
334
(361,212)
(1,785)
(648)
(7,298)
13,063
3,737
9,326
-
9,326
8,923
403
9,326
6.20
6.20
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
28
Consolidated Statement of Financial Position As at 3 July 2022
3 Jul 2022
$000
Note
Restated 4 Jul 2021
$000
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Current tax receivable
Contract assets
Other assets
Total current assets
Non-current assets
Property, plant and equipment
Loans to associated entities
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
Non-controlling interest
Total equity
8
9
17
10
11
12
13
14
17
15, 16
18
21
17
19
20
22
17
19
20
22
23
24
The accompanying notes form part of these financial statements.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
1,739
54,968
1,627
777
2,255
61,366
2,050
157
3,361
3,887
10,976
81
20,512
81,878
30,843
5,305
-
-
1,050
-
3,991
41,189
4,028
2,474
1,973
675
9,150
50,339
31,539
148,815
(59,261)
(57,999)
(16)
31,539
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
3,932
36,064
2,341
1,324
1,973
514
6,152
42,216
27,957
148,815
(59,261)
(61,540)
(57)
27,957
29
Consolidated Statement of Changes in Equity
For the financial year ended 3 July 2022
Share
Capital
$000
Common
Control
Reserve
$000
Accumulated
losses
$000
Non-
controlling
Interest
$000
For the year ended 3 July 2022
Balance at 5 July 2021 (Restated)
148,815
(59,261)
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Dividends paid
Balance at 3 July 2022
For the year ended 4 July 2021 (Restated)
-
-
-
-
-
-
-
-
148,815
(59,261)
(61,540)
11,315
-
11,315
(7,774)
(57,999)
Balance at 6 July 2020
148,815
(59,261)
(63,724)
Prior Period Restatement (see Note 5)
Restated balance at 6 July 2020
-
148,815
-
(59,261)
Profit for the year
Prior Restatement of Profit for the Year (see
Note 5)
Other comprehensive income for the year
Total comprehensive income for the year
Dividends paid
Balance at 4 July 2021
-
-
-
-
-
-
-
-
148,815
(59,261)
(261)
(63,985)
9,150
(227)
-
8,923
(6,478)
(61,540)
The accompanying notes form part of these financial statements.
(57)
41
-
41
-
(16)
-
-
-
460
(57)
-
403
(460)
(57)
Total
$000
27,957
11,356
-
11,356
(7,774)
31,539
25,830
(261)
25,569
9,610
(284)
-
9,326
(6,938)
27,957
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
30
Consolidated Statement of Cash Flows
For the financial year ended 3 July 2022
Operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income taxes paid
Net cash from operating activities
Investing activities
Payments for property, plant and equipment
Payments for intangibles
Proceeds from sale of property, plant and equipment
CCL Group earn-out payment
CCL Group retention payment
TIC earn-out payment
Payments for businesses acquired net of cash acquired
28
Net cash used in investing activities
Financing activities
Net proceeds from external borrowings
Repayment of leasing liabilities
Dividends paid
Net cash used in financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of the financial year
Cash and cash equivalents at end of the financial year
8
The accompanying notes form part of these financial statements.
Note
3 Jul 2022
$000
4 Jul 2021
$000
482,918
411,146
(471,272)
(401,767)
27
2
(745)
(4,201)
6,702
(1,375)
(351)
131
(825)
-
(375)
-
(2,795)
4,215
(1,117)
(8,235)
(5,137)
(1,230)
2,969
1,739
116
(448)
(3,624)
5,423
(679)
(114)
19
(798)
(600)
-
(1,011)
(3,183)
1,090
(1,081)
(7,343)
(7,334)
(5,094)
8,063
2,969
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
31
Notes to the Financial Statements
Table of Contents
ACCOUNTING POLICIES ----------------------------------------------------------------------------------------- 34
REVENUE AND OTHER INCOME ------------------------------------------------------------------------------- 43
EXPENSES ----------------------------------------------------------------------------------------------------------- 44
AUDITOR’S REMUNERATION ---------------------------------------------------------------------------------- 44
PRIOR PERIOD ADJUSTMENT ---------------------------------------------------------------------------------- 44
INCOME TAX EXPENSE ------------------------------------------------------------------------------------------ 45
KEY MANAGEMENT PERSONNEL DISCLOSURES ---------------------------------------------------------- 45
CASH AND CASH EQUIVALENTS ------------------------------------------------------------------------------- 46
TRADE AND OTHER RECEIVABLES ---------------------------------------------------------------------------- 46
CONTRACT ASSETS ----------------------------------------------------------------------------------------------- 46
OTHER ASSETS ---------------------------------------------------------------------------------------------------- 47
PROPERTY, PLANT AND EQUIPMENT ------------------------------------------------------------------------ 47
LOANS TO ASSOCIATED ENTITIES ---------------------------------------------------------------------------- 48
RIGHT-OF-USE ASSETS ------------------------------------------------------------------------------------------ 48
INTANGIBLE ASSETS --------------------------------------------------------------------------------------------- 49
IMPAIRMENT ------------------------------------------------------------------------------------------------------ 50
TAX BALANCES ---------------------------------------------------------------------------------------------------- 52
TRADE AND OTHER PAYABLES -------------------------------------------------------------------------------- 53
LEASE LIABILITIES ------------------------------------------------------------------------------------------------- 53
OTHER LIABILITIES------------------------------------------------------------------------------------------------ 54
BORROWINGS ----------------------------------------------------------------------------------------------------- 54
PROVISIONS ------------------------------------------------------------------------------------------------------- 55
SHARE CAPITAL --------------------------------------------------------------------------------------------------- 55
COMMON CONTROL RESERVE -------------------------------------------------------------------------------- 56
EARNINGS PER SHARE ------------------------------------------------------------------------------------------- 56
SEGMENT INFORMATION -------------------------------------------------------------------------------------- 57
CASH FLOW INFORMATION ----------------------------------------------------------------------------------- 58
BUSINESS COMBINATION -------------------------------------------------------------------------------------- 59
FAIR VALUE MEASUREMENT ---------------------------------------------------------------------------------- 60
CONTROLLED ENTITIES AND ASSOCIATES ------------------------------------------------------------------ 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 2022
32
Notes to the Financial Statements
31.
32.
33.
34.
35.
36.
37.
PARENT ENTITY DISCLOSURES -------------------------------------------------------------------------------- 64
DEED OF CROSS GUARANTEE --------------------------------------------------------------------------------- 65
RELATED PARTY TRANSACTIONS ----------------------------------------------------------------------------- 68
SECURED AND CONTINGENT LIABILITIES ------------------------------------------------------------------- 68
FINANCIAL INSTRUMENTS ------------------------------------------------------------------------------------- 68
EVENTS AFTER THE REPORTING DATE ---------------------------------------------------------------------- 71
DIVIDENDS --------------------------------------------------------------------------------------------------------- 71
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
33
Notes to the Financial Statements
1. ACCOUNTING POLICIES
a. General information
The financial statements for the financial year
ended 3 July 2022 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.
Standards
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
the
Australian Accounting Standards Board. The
consolidated financial statements of the Group
International Financial
also comply with
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.
adopted by
The consolidated financial statements were
authorised for issue by the Board of Directors
on 31 August 2022.
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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
34
Notes to the 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 3 July
2022 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.
g.
Business combinations
Business combinations occur where an acquirer
obtains control over one or more businesses
and result in the consolidation of its assets and
liabilities.
A business combination is accounted for by
applying the acquisition method, unless it is a
combination involving entities or businesses
under common control.
The business
combination will be accounted for from the
date that control is attained, whereby the fair
value of the identifiable assets acquired and
liabilities
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
consideration classified as equity
is not
remeasured and its subsequent settlement is
Contingent
accounted for within equity.
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 3 July 2022. 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 3 July 2022.
All transactions and balances between Group
companies are eliminated on consolidation,
including unrealised gains or
losses on
companies.
transactions between Group
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,
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
35
Notes to the Financial Statements
i.
ii.
Identifies the contract with a customer
Identifies the performance obligations
in the contract
of
iii. Determines the transaction price which
considers
variable
estimates
consideration and time value of money
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 revenue
The
contractors.
Labour hire revenue comprises the sourcing,
engagement and placing of both temporary and
permanent
sourcing,
identification, submission and acceptance of
contractors for specified roles at the customer
are not considered to be distinct performance
obligations from the contractor being engaged
by ASH for an agreed period of time and
deployed at the customer sites and are
single
therefore, accounted
performance obligation.
in
“Significant
accounting policy Note
Applying
judgement
management
Accounting Policies”, management has made a
significant judgement to determine that the
Group acts as principal in providing labour hire
services to customers over the duration of
contracts.
for as a
As explained
in
x.
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.
Government grants and subsidies
j.
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.
and
grants
subsidies
Government
are
recognised at their fair value where there is a
reasonable assurance that the grant will be
received and the Group will comply with all
attached conditions. The Group has adopted
the net method of accounting for government
subsidies. Therefore, the government subsidies
are recognised against Employment costs.
The most significant receipt during the period
was for various Government Stimuli as a result
of the Covid-19 pandemic, including Boosting
Apprenticeship Commencements Program and
Completing Apprenticeship Commencements
Program.
Cashflows are reflected
in receipts from
customers for the monies received from the
various
and
payments to suppliers and employees for the
payments to employees.
departments
government
Income tax
k.
The income tax expense (income) for the year
tax expense
comprises
(income) and deferred tax expense (income).
income
current
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
36
Notes to the Financial Statements
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.
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
liability will occur.
respective asset and
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
in which significant amounts of
periods
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
The CCL Group
consolidation
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
in the
unused tax
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.
l.
Cash and cash equivalents
Cash and cash equivalents include cash on
hand, deposits held at call with banks, other
investments with
liquid
short term highly
original maturities of three months or less, and
bank overdrafts. Bank overdrafts are shown
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
37
Notes to the Financial Statements
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
interest method,
for
expected credit losses.
less any allowance
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 profit or loss in that period.
Expected credit losses are measured by the
Group by applying a simplified approach which
uses a lifetime expected loss allowance. To
measure the expected credit losses, trade
receivables have been grouped based on days
overdue.
Contract assets
n.
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
Property, plant and equipment
o.
Each class of property, plant and equipment is
carried at cost, less where applicable, any
impairment
accumulated depreciation and
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
recognised
immediately in profit or loss.
losses are
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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
38
Notes to the Financial Statements
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
subsidiary are accounted
for as equity
transactions and do not affect the carrying
amounts of goodwill.
interest
Other intangibles
Intangibles acquired by the group are stated at
less accumulated amortisation and
cost
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
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
The assessment will
include considering
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
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
the probability
satisfy
that
the
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
39
Notes to the Financial Statements
with terms to maturity that match the expected
timing of cash flows.
t.
Provisions
Provisions are recognised when the Group has
a legal or constructive obligation, as a result of
past events, for which it is probable that an
outflow of economic benefits will result and
that outflow can be reliably measured.
Provisions are measured at the best estimate of
the amounts required to settle the obligation at
the end of the reporting period.
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 statement of
financial position.
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.
Revenue recognition
judgement
The main area of
in revenue
recognition relates to the recognition of labour
hire arrangements where the Group acts on a
principal (gross) basis rather than an agent
(net) basis. The factors considered by the
Directors, on a contract-by-contract basis,
when concluding that the Group is acting as
principal rather than agent are as follows:
• The customer has a direct relationship
with the Group;
• The Group has the primary responsibility
for providing the services to the customer
and engages and contracts directly with
the contractor; and
• The Group has latitude in establishing
rates directly or indirectly with all parties.
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
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
40
Notes to the Financial Statements
income against which the deferred tax assets
can be utilised.
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 16.
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
losses
The allowance for expected credit
assessment requires a degree of estimation and
judgement. It is based on the lifetime expected
credit loss, grouped based on days overdue,
and makes assumptions to allocate an overall
expected credit loss rate for each group. These
assumptions include recent sales experience
and historical collection rates.
Long service leave provisions
In determining the provision for employees’
long service leave, consideration is given to the
probability an employee may not satisfy vesting
In doing this, management
requirements.
considers the likelihood of employees reaching
a qualifying period of service and adjust the
valuation for these estimated probabilities.
Long term incentive plan
In determining
management’s
the provision
term
for senior
incentive plan,
long
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.
Workers Compensation Provisions
In certain states premiums payable in relation
to workers compensation insurance can vary
and be retrospectively adjusted, up to a period
of five years, by the insurer based on the annual
wages, number of claims made and a range of
In determining the worker
other factors.
compensation insurance provision (including in
trade and other payables) at balance date
consideration is given to the previous years’
premium rates, retrospective adjustments and
the current year gross wages.
Coronavirus (COVID-19) pandemic
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
significant
financial
statements or any
to events or
uncertainties with respect
conditions which may
impact the Group
unfavourably as at the reporting date or
subsequently as a result of the Coronavirus
(COVID-19) pandemic.
y. Dividends
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.
declared,
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
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
41
Notes to the Financial Statements
shares outstanding during
ordinary
the
financial year, adjusted for bonus elements in
ordinary shares issued during the year.
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.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
42
Notes to the Financial Statements
2. REVENUE AND OTHER INCOME
Operating activities:
Labour hire revenue
Training revenue
Other income:
Interest received
Sundry income
2022
$000
438,246
11,530
449,776
2
-
2
2021
$000
373,963
9,709
383,672
117
217
334
a. Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
2022
Revenue
Labour Hire
$000
Training
$000
Total
$000
From external customers
438,246
11,530
449,776
Timing of revenue recognition
Services transferred over time
Services transferred at a point in time
2021
Revenue
422,590
15,656
438,246
11,530
-
11,530
Labour Hire
$000
Training
$000
434,120
15,656
449,776
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
362,024
11,939
373,963
9,709
-
9,709
371,733
11,939
383,672
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
43
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
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
5.
PRIOR PERIOD ADJUSTMENT
2022
$000
133
314
52
1,068
1,567
-
205
205
505
67
259
831
2022
$
189,500
189,500
2021
$000
86
347
42
1,067
1,542
108
135
243
453
67
128
648
2021
$
186,250
186,250
53,000
53,000
55,250
55,250
During the year ended 3 July 2022 management identified an under provisioning of current employee
entitlements for labour hire employees, which spanned several financial years dating back to 2019. The
cumulative effect of the adjustment was a reduction in Net Assets and Total Equity equal to $545,000 over the
effected period ending 4 July 2021.
The financial impact of the error over the restated comparative periods is as follows:
For the year ended 4 July 2021 in the Consolidated Statement of Profit or Loss and Other Comprehensive
Income, the employment costs increased by $283,914 and profit for the year decreased by $283,914.
As at 4 July 2021 in the Consolidated Statement of Financial Position, Accumulated losses and current
Provisions for employee entitlements increased by $544,840.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
44
Notes to the Financial Statements
For the year ended 5 July 2020 in the Consolidated Statement of Changes in Equity opening accumulated
losses increased by $260,926.
There was no change to the Consolidated Statement of Cash Flows in any period.
6.
INCOME TAX EXPENSE
a. Components of tax expense
Current tax expense
Deferred tax – origination and reversal of temporary differences
Under / (over) provision of tax in prior year
– Change in tax rate – TIC
Income tax expense
2022
$000
3,499
1,405
97
-
5,001
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% (FY21: 30%)
Add / (less) Tax effect of:
– Entertainment
– Other
– Change in tax rate – TIC
– Intangible assets
– Under / (over) provision of tax in prior year
Income tax expense
2022
$000
16,357
4,907
14
1
-
(18)
97
5,001
2021
$000
3,363
561
(184)
(3)
3,737
2021
$000
13,347
4,004
10
3
(3)
(93)
(184)
3,737
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.
7. KEY MANAGEMENT PERSONNEL DISCLOSURES
a.
Key management personnel compensation for the year was as follows
Short-term employee benefits
Long-term employee benefits
Post-employment benefits
Total
2022
$
1,441,190
15,076
94,686
1,550,952
2021
$
1,698,097
13,694
84,602
1,796,393
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 14 to 18, Tables 7 to 12.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
45
Notes to the Financial Statements
8.
CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
9.
TRADE AND OTHER RECEIVABLES
Current
Trade receivables
Allowance for expected credit losses
Other receivables
2022
$000
2
1,737
1,739
2022
$000
42,907
(599)
12,660
54,968
2021
$000
2
2,967
2,969
2021
$000
37,611
(193)
7,003
44,421
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))
2022
$000
33,411
7,044
1,042
811
599
2021
$000
34,514
1,451
469
984
193
42,907
37,611
b.
The movement in the allowance for expected credit losses in respect of trade receivables is detailed below
Balance at beginning of year
Increase/(decrease) in allowance recognised in profit or loss
Amounts written-off
Balance at end of year
2022
$000
193
463
(57)
599
2021
$000
406
164
(377)
193
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.
10. CONTRACT ASSETS
Current
Contract assets
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
2022
$000
777
777
2021
$000
791
791
46
Notes to the Financial Statements
a. Reconciliation of contract assets
Opening balance
Payments received
Accruals
Closing balance
11. OTHER ASSETS
Current
Prepayments1
Bank deposits
Bank guarantee2
2022
$000
791
(8,285)
8,271
777
2022
$000
1,022
725
508
2,255
2021
$000
89
(6,200)
6,902
791
2021
$000
1,366
162
507
2,035
Note:
1. Prepayments include prepaid contract costs of $nil (2021: $543,003)
2. As at balance date the Group had bank guarantees of $79,969 (2021: $222,366) relating to property leases. The $508,067 (2021:
$507,158) represents a restricted bank account to cover the Group’s total available guarantee facility with BankWest of $508,067.
12. 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
2022
$000
1,190
(504)
686
5,069
(4,051)
1,018
1,816
(1,509)
307
39
39
2,050
2021
$000
797
(438)
359
4,781
(4,212)
569
1,598
(1,512)
86
233
233
1,247
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
47
Notes to the Financial Statements
a. Movement in carrying amounts of property, plant and equipment
2022
Balance at 4 July 2021
Additions/(transfers)
Disposals
Depreciation expense
Balance at 3 July 2022
2021
Balance at 5 July 2020
Additions/(transfers)
Disposals
Depreciation expense
Balance at 4 July 2021
Motor
vehicles
$000
359
Office
equipment
$000
569
Leasehold
improvements
$000
86
Capital work
in progress
$000
233
484
(24)
(133)
686
812
(49)
(314)
1,018
273
-
(52)
307
(194)
-
-
39
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
Total
$000
1,247
1,375
(73)
(499)
2,050
Total
$000
1,060
679
(17)
(475)
1,247
The Group’s property, plant and equipment are encumbered by a General Security Agreement as security for the
group’s Invoice Financing capital facility (Refer Note 21).
13. LOANS TO ASSOCIATED ENTITIES
Loan to Associated Entities
2022
$000
157
157
2021
$000
-
-
Note:
1. On 19 April 2022 the Group acquired a non-controlling interest of 49% in Dardi Munwurro Labour and Traffic Management Pty Limited,
a company providing indigenous labour hire in Victoria, for $49. The loan represents the working capital requirements of the associated
entity to 3 July 2022.
14. RIGHT-OF-USE ASSETS
Land and buildings
Accumulated depreciation
2022
$000
5,402
(2,041)
3,361
2021
$000
4,095
(2,053)
2,042
Note:
1.
2.
Additions to the right-of-use assets during the year were $1,248,338.
The Group leases land and buildings for its offices under agreements of between 1 to 5 years with, in some cases, options to extend.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
48
Notes to the Financial Statements
15.
INTANGIBLE ASSETS
Goodwill
Cost
Acquisition TIC
Accumulated impairment (note 16)
Net carrying value
Customer relationships/Licences
Cost
Accumulated impairment (note 16)
Accumulated amortisation
Net carrying value
Brand names
Cost
Accumulated impairment (note 16)
Net carrying value
Intellectual property – course materials
Cost
Accumulated impairment (note 16)
Accumulated amortisation
Net carrying value
Total intangible assets
a. Intangible assets – detailed reconciliation
2022
$000
71,558
1,654
(62,474)
10,738
2,062
(918)
(1,144)
-
4,640
(4,640)
-
8,560
(3,896)
(4,426)
238
10,976
2022
Balance at 4 July 2021
Additions
Amortisation
Balance at 3 July 2022
2021
Balance at 5 July 2020
Acquisition TIC
Additions
Amortisation
Balance at 4 July 2021
Customer
Relationships
and Licences
$000
-
-
-
-
Customer
Relationships
and Licences
$000
108
-
-
(108)
-
Goodwill
$000
10,738
-
-
10,738
Goodwill
$000
9,084
1,654
-
-
10,738
Brand
Names
$000
-
Intellectual
Property
$000
110
-
-
-
333
(205)
238
Brand
Names
$000
-
Intellectual
Property
$000
130
-
-
-
-
-
115
(135)
110
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
Total
$000
10,848
333
(205)
10,976
Total
$000
9,322
1,654
115
(243)
10,848
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
49
Notes to the Financial Statements
16.
a.
IMPAIRMENT
Impairment
The consolidated entity tests whether goodwill and other intangible assets have suffered any impairment on an
annual basis, or more frequently, if required.
There were no indicators of impairment in relation to either the Labour Hire division or the Training division at 3
July 2022.
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 FY23 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 after-tax cash flows has been determined by applying a suitable after-tax discount rate of 11.7 per cent.
Cash flows after 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 (excluding any acquisitions post 3 July
2022) will increase by approximately 10% in FY23. EBITDA margin (before corporate overhead allocations) is
forecast to decline by approximately 1 percentage point from 5% to 4% as government support programmes
wind down and the Group works through contract renewals and business mix to sustain margin in the current
competitive and inflationary environment.
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 FY23 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 after-tax cash flows has been determined by applying a suitable after-tax discount rate of 11.7 per cent.
Cash flows after 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 approximately 25% in
FY23. EBITDA margin is forecast to return closer to historic levels of 18%-20% (before corporate overhead
allocations), with FY22 impacted by COVID-19 inefficiencies and compliance costs.
Long term growth rates after the forecast period and discount rates used were as follows:
Labour Hire
Training
Terminal Growth rates
3 July 2022
0%
4 July 2021
0%
Post-tax discount rates
3 July 2022
11.7%
4 July 2021
9.8%
0%
0%
11.7%
9.8%
The growth rate reflects management’s view of longer-term average growth rates for the respective sectors. The
discount rate reflects appropriate adjustments relating to market risk and specific risk factors of each unit.
Impairment charges
b.
As a result of the analysis, there is no need for any impairment charges in the FY22 results. The same analysis in
the prior year resulted in no impairment charge being recorded in the FY21 results.
Movements in the net carrying amount of goodwill and other intangibles are presented in note 15.
The amount of goodwill, brand names and other intangibles remaining by CGU and subject to future
impairment testing is as follows:
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
50
Notes to the Financial Statements
2022
Training
Labour Hire
Total
2021
Training
Labour Hire
Total
Goodwill
$’000
1,654
9,084
10,738
Goodwill
$’000
1,654
9,084
10,738
Customer
Relationships/
Licences
$’000
-
-
-
Customer
Relationships/
Licences
$’000
-
-
-
Brand Names
$’000
Intellectual
Property
$’000
-
-
-
238
-
238
Brand Names
$’000
Intellectual
Property
$’000
-
-
-
110
-
110
Total
$’000
1,892
9,084
10,976
Total
$’000
1,764
9,084
10,848
c. Sensitivity analysis
Management has also run various sensitivity scenarios, primarily reviewing sensitivity of outcomes to FY23
EBITDA forecasts, long term growth rates and discount rates. In respect of reasonably possible changes in the
key assumptions, with all other assumptions remaining constant, major sensitivities are summarised as follows:
Change in VIU
Labour hire CGU
$’M
Sustainable EBITDA margin; +/- $0.5
million each CGU
1% increase or decrease in long term
growth rate
1% increase or decrease in post-tax
discount rate
+/-3.3
+/-4.1
+/-6.9
Impairment
$’000
-
-
-
Training CGU
$’M
+/-3.3
+/-0.4
+/-0.5
Impairment
$’000
-
-
-
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
51
Notes to the Financial Statements
17. 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)
2022
$000
1,627
2021
$000
-
3,887
5,709
-
1,083
4,028
2,341
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
(2,041)
(237)
-
238
51
3,212
2,145
-
3,368
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,559)
4
-
(380)
(11)
(828)
(746)
11
(3,509)
(3,600)
(233)
-
(142)
40
2,384
1,399
11
(141)
2022
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
2021 Tax loss carried forward
Deferred tax asset
Total
Note:
1. This amount is net of lease liabilities.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
52
Notes to the Financial Statements
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
18. TRADE AND OTHER PAYABLES
Current
Trade payables
Accrued expenses
GST payable
Workers compensation
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
(510)
(46)
(32)
296
28
3,198
943
52
3,929
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,531)
(2,041)
(191)
(237)
32
(58)
23
989
227
(52)
(561)
2022
$000
8,314
6,534
4,044
2,042
9,909
30,843
-
238
51
4,187
1,170
-
3,368
2021
$000
5,205
6,197
4,321
581
11,087
27,391
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.
19. LEASE LIABILITIES
Current
Non-current
2022
$000
1,050
2,474
3,524
2021
$000
888
1,324
2,212
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
53
Notes to the Financial Statements
20. OTHER LIABILITIES
Current
CCL Contingent Consideration – Earn Out Year 2
The Instruction Company Deferred Consideration
Other
Other liabilities (Current)
Non-current
Redemption Liability
Other liabilities (Non-current)
Redemption Liability
2022
$000
-
-
-
-
1,973
1,973
2021
$000
825
375
20
1,220
1,973
1,973
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.
21. BORROWINGS
2022
Invoice Financing
Bank Bill Business Loan
Balance at 3 July 2022
2021
Invoice Financing
Bank Bill Business Loan
Balance at 4 July 2021
Facilities
Available facility
$000
25,000
10,000
35,000
Available facility
$000
13,000
4,375
17,375
Facility used
$000
5,305
Remaining facility
$000
19,695
-
5,305
10,000
29,695
Facility used
$000
679
Remaining facility
$000
12,321
411
1,090
3,964
16,285
During the financial year ended 3 July 2022, Ashley Services Group Limited increased its borrowing capacity with
the Westpac Banking Corporation. The facilities include all transactional banking requirements as well as a $35
million financing facility, comprised of a $25 million Invoice Financing facility and a $10 million Bank Bill Business
Loan (Reduces quarterly by $500,000 per quarter, with a term of 3 years and any remaining outstanding balance
payable at that term end).
The Westpac facility is subject to a Security which includes:
1st ranking General Security Agreement over the assets and undertakings of the Borrower and its Guarantors
(Ashley Services Group Limited and its trading controlled entities); and
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
54
Notes to the Financial Statements
Flawed Asset Arrangement – Deposit of Action Workforce Pty Ltd, Construction Contract Labour (VIC) Pty
Ltd and Concept Engineering (AUST) Pty Ltd for Invoice Finance Facility collections.
As at 3 July 2022, the combined Bank Bill Business Loan and the Invoice Financing facility were drawn to $5.305
million (4 July 2021; $1.09 million).
22. PROVISIONS
Current
Employee benefits (a)
Make good provisions for leases
Total
Non-current
Employee benefits (a)
Make good provisions for leases
Total
b. Reconciliation of employee provisions
Opening balance
TIC at 6 July 2020
Less: leave taken during the year
Add: leave provided for during the year
Add: Prior Period Restatement (see note 5)
Closing balance
23. SHARE CAPITAL
2022
$000
3,952
39
3,991
479
196
675
2022
$000
4,296
-
(3,395)
3,530
-
4,431
Restated
2021
$000
3,882
50
3,932
414
100
514
2021
$000
3,030
137
(3,136)
3,981
284
4,296
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 (FY21: 143,975,904) fully paid ordinary shares
Share issue costs
Share capital
a. Ordinary shares
2022
$000
154,234
(5,419)
148,815
2021
$000
154,234
(5,419)
148,815
Ordinary shares confer on their holders the right to participate in dividends declared by the Board. Ordinary
shares confer on their holders an entitlement to vote at any general meeting of the Company.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
55
Notes to the Financial Statements
24. COMMON CONTROL RESERVE
The common control reserve has arisen following the adoption of the pooling of interests method used to
account for the acquisition of the following entities since 1 July 2014:
•
•
•
•
•
•
ADV Services Pty Limited;
Ashley Institute Holdings Pty Limited;
TBRC Holdings Pty Limited;
Tracmin Pty Limited; and
Australian Institute of Vocational Development Pty Limited; and
CCL Group (Construction Contract Labour (VIC) Pty Ltd, Complete Traffic Services (VIC) Pty Ltd and VIC
Traffic and Labour Solutions Pty Ltd)
25. EARNINGS PER SHARE
Profit after tax for the year attributable to shareholders ($’000)
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)
Diluted earnings per share (cents)
2022
11,315
Restated
2021
8,923
143,975,904
143,975,904
143,975,904
7.86
143,975,904
6.20
7.86
6.20
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
56
Notes to the Financial Statements
26. 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 3 July 2022, 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:
2022
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
2021
Revenue
From external customers
Segment revenue
Other income
Employment costs
Depreciation and amortisation expense
Finance costs – interest and finance charges
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
Labour Hire
$000
Training
$000
Total
$000
438,246
438,246
(5)
(410,477)
(744)
(174)
(5,979)
20,867
Restated
Labour Hire
$000
373,963
373,963
256
(351,799)
(764)
(191)
(4,705)
16,760
11,530
11,530
7
(8,626)
(913)
(24)
(1,385)
589
Training
$000
9,709
9,709
76
(6,720)
(756)
(17)
(1,055)
1,237
449,776
449,776
2
(419,103)
(1,657)
(198)
(7,364)
21,456
(5,099)
16,357
(5,001)
11,356
-
11,356
Restated
Total
$000
383,672
383,672
332
(358,519)
(1,520)
(208)
(5,760)
17,997
(4,934)
13,063
(3,737)
9,326
-
9,326
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 2022
57
Notes to the Financial Statements
a. Information about major customers
Included in revenues from external customers are revenues of $185.1 million (2021: $109.9 million) which arose
from sales to three (2021: two) of the Group’s customers whose individual revenue exceeds 10% of total revenue
in the Labour Hire segment. Sales to these three customers were $74.5 million, $56.5 million and $54.1 million
respectively (2021: $54.0 million, $55.9 million and $29.3 million respectively).
There are no customers whose individual revenue exceeded 10% of total revenue in the Training segment in
either financial year.
27. 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
2022
$000
11,356
1,772
463
(30)
67
-
Restated
2021
$000
9,326
1,785
164
(36)
67
45
- Decrease/(increase) in trade and other receivables
(10,547)
(15,003)
- 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
14
(190)
1,822
3,453
-
765
(1,220)
(2,711)
1,688
6,702
(637)
(309)
(1,015)
9,881
60
1,050
(981)
(551)
1,577
5,423
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
58
Notes to the Financial Statements
28. 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 TIC 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 was made during September 2021. The measurement period to account
for the TIC acquisition is now complete and no changes were required to the original provisional accounting
entries made for this acquisition.
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.
There were no acquisitions during the year ended 3 July 2022.
Note
20
Purchase consideration
Cash consideration paid Sep-20
Deferred consideration paid Mar-21
Deferred consideration paid 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
Deferred consideration paid Sep-21
Cash acquired
Total cashflow outflows on acquisition to 3 July 2022
Note:
1. Effective date of TIC acquisition.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
6 July 20201
$000
1,100
375
375
1,850
464
539
37
(327)
(464)
(34)
(19)
196
1,654
1,100
375
375
(464)
1,386
59
Notes to the Financial Statements
29. 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 – 3 July 2022
Assets
Total assets
Liabilities
Redemption liability
Total liabilities
Consolidated - 4 Jul 2021
Assets
Total assets
Liabilities
TIC Deferred Consideration
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
Level 2
$000
-
-
-
-
-
-
375
825
-
1,200
-
-
1,973
1,973
Level 3
$000
-
-
-
1,973
1,973
1,973
1,973
Total
$000
-
375
825
1,973
3,173
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 arose as a result of the business combination detailed in Note
27. The liability represented a deferred payment of $0.375 million to be made on the twelve-month
anniversary of the completion date of the acquisition as in accordance with The Instruction Company Share
Sale and Purchase agreement.
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 was adjusted for the final FY21
EBITDA.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
60
Notes to the Financial Statements
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
$000
$000
-
-
-
-
Redemption
Liability
$000
1,973
Total
$000
1,973
1,973
1,973
Consolidated
Balance at 4 July 2021
Balance at 3 July 2022
CCL
Contingent
Consideration
Earn Out Yr1
CCL
Contingent
Consideration
Earn Out Yr2
Redemption
Liability
Consolidated
$000
$000
$000
Balance at 5 July 2020
Gains/(losses) recognised in
other comprehensive
income
Settlements during the year
Transfer to Level 2
Balance at 4 July 2021
789
789
1,973
9
(798)
-
-
36
-
(825)
-
-
-
-
1,973
Total
$000
3,551
45
(798)
(825)
1,973
The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:
Description
Redemption liability
Unobservable inputs
EBITDA FY during which Put
Option exercised & EBITDA
FY immediately following FY
during which Put Option
exercised
Range
(weighted
average)
2,887,786
Sensitivity
10% change would increase/decrease fair
value by $175,030.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
61
Notes to the Financial Statements
30. CONTROLLED ENTITIES AND ASSOCIATES
Set out below are the controlled entities and associates 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
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
OGR Holdings Pty Limited (formerly 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
Ash Pty Limited
Ashley Institute Holdings Pty Limited
Australian Institute of Vocational Development Pty Limited
AWF Training 3 Pty Limited
BCC Labour Solutions Pty Ltd
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
Country of
incorporation
Australia
Australia
2022 percentage
owned
%
100
100
2021 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
Australia
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
62
Notes to the Financial Statements
Cantillon Holdings Pty Limited
CCL Group Holdings Pty Ltd
College of Innovation and Industry Skills Pty Limited
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
Concept Engineering Contracting Pty Ltd
Concept Power Pty Ltd
Concept Project Resources Pty Limited
Concept Rail Pty Ltd
Concept Recruitment Specialists Pty Ltd
Concept Retail Solutions Pty Ltd
Construction Contract Labour (VIC) Pty Ltd
CP Action Workforce Pty Limited
Dardi Munwarro Labour and Traffic Management 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
The Instruction Company Pty Ltd
Track Safety Australia Pty Ltd
Tracmin Holdings Pty Limited
Tracmin Pty Limited
VIC Traffic and Labour Solutions Pty Ltd
Vocational Training Australia Pty Limited
*Incorporated 19 April 2022.
Country of
incorporation
Australia
2022 percentage
owned
%
100
2021 percentage
owned
%
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
100
100
80
100
100
100
100
100
100
100
100
100
100
100
80
100
49
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
80
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
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
63
Notes to the Financial Statements
31. 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
2022
$000
92
16,808
16,900
-
(23,092)
(23,092)
(6,192)
2021
$000
92
18,206
18,298
(825)
(15,891)
(16,716)
1,582
148,815
148,815
Common control reserve
Accumulated losses
Total equity
Note:
1. The directors are in the process of reviewing dividend and loans with its subsidiaries and expect to rectify the above deficiency in net
(59,277)
(95,730)
(6,192)
(59,261)
(87,972)
1,582
assets.
b.
Statement of profit or loss and other comprehensive income
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income/(loss)
2022
$000
-
-
-
2021
$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 3 July 2022 (4 July 2021: Nil).
e.
Commitments for expenditure for the Parent entity
The Parent entity had Nil committed expenditure as at 3 July 2022 (4 July 2021: Nil).
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
64
Notes to the Financial Statements
32. 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' reports 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
2022
$000
345,920
-
(322,949)
(514)
(80)
(3,058)
19,319
(5,795)
13,524
-
13,524
2021
$000
291,868
61
(275,129)
(545)
(141)
(3,208)
12,906
(1,783)
11,123
-
11,123
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
65
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
2022
$000
439
31,122
9,286
40,847
2021
$000
52
27,917
5,263
33,232
132,600
113,269
459
3,599
465
16,811
153,934
194,781
41,933
3,198
21,123
19,181
185
-
2,044
87,664
322
1,973
270
2,565
90,229
104,552
148,815
(59,261)
14,998
104,552
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
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
66
Notes to the Financial Statements
c.
Equity – retained profits
Extended Closed Group
Retained profits at the beginning of the financial year
Profit after income tax expense
Dividends paid
Retained profits at the end of the financial year
d.
Contingent liabilities of the Extended Closed Group
2022
$000
9,248
13,524
(7,774)
14,998
2021
$000
4,604
11,123
(6,479)
9,248
The Extended Closed Group had no other known material contingent liabilities as at 3 July 2022 (4 July 2021: Nil).
e.
Commitments for expenditure for the Extended Closed Group
The Extended Closed Group had Nil committed expenditure as at 3 July 2022 (4 July 2021: 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 2 July 2023. The directors are satisfied that collectively the Group has the
financial ability to provide this support.
g.
Security Offered
The Westpac facility (see Note 21) is subject to a Security which includes:
1st ranking General Security Agreement over the assets and undertakings of the Borrower and its Guarantors
(Ashley Services Group Limited and its trading controlled entities); and
Flawed Asset Arrangement – Deposit of Action Workforce Pty Ltd, Construction Contract Labour (VIC) Pty
Ltd and Concept Engineering (AUST) Pty Ltd for Invoice Finance Facility collections.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
67
Notes to the Financial Statements
33. 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:
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
Fees payable to Trood Pratt & Co (of which Ian Pratt was a Partner until 02 March 2021) for
taxation services
Fees payable to Ron Holland Family Trust (of which Ron Hollands is Trustee) for Company
Secretarial Services
Note:
1. All amounts as shown are exclusive of GST.
34. SECURED AND CONTINGENT LIABILITIES
For assets pledged as security for borrowing facilities see Note 21.
The Group had no other known contingent liabilities at 3 July 2022 (4 July 2021: Nil).
35. FINANCIAL INSTRUMENTS
20221
$
20211
$
141,286
138,061
n/a
41,904
20,000
17,617
Significant accounting policies
a.
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 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 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 2022
68
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
2022
$000
(531)
531
(531)
531
2021
$000
(129)
129
(129)
129
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 expected credit losses,
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 2022
69
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
2022
Cash and cash equivalents
Trade and other receivables
Contract assets
Total
2021
Cash and cash equivalents
Trade and other receivables
Contract assets
Total
Financial liabilities
2022
Trade and other payables
Borrowings
Lease liabilities
Other liabilities
Total
2021
Trade and other payables
Borrowings
Lease liabilities
Other liabilities
Total
Weighted average
effective interest
rate %
n/a
n/a
n/a
Weighted average
effective interest
rate %
n/a
Within 1 year
$000
1,739
54,968
777
57,484
1 to 5 years
$000
-
-
Over 5 years
$000
-
-
-
-
-
-
Within 1 year
$000
2,969
1 to 5 years
$000
-
Over 5 years
$000
-
n/a
n/a
44,421
791
48,181
-
-
-
-
-
-
Total
$000
1,739
54,968
777
57,484
Total
$000
2,969
44,421
791
48,181
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
30,844
5,305
1,050
-
37,199
Within 1 year
$000
27,392
1,090
888
1,220
30,590
1 to 5 years
$000
-
-
2,474
-
2,474
Over 5 years
$000
-
-
-
1,973
Total
$000
30,844
5,305
3,524
1,973
1,973
41,646
1 to 5 years
$000
-
-
Over 5 years
$000
-
-
1,324
-
1,324
-
1,973
1,973
Total
$000
27,392
1,090
2,212
3,193
33,887
Fair value of financial instruments
Refer to Note 29 for details on the fair value of financial instruments.
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
70
Notes to the Financial Statements
36. 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 5 July 2022, the Group acquired a 75% interest in Linc Personnel Pty Limited for $3.615 million. This company
currently provides labour to the oil and gas sector in Western Australia and the Northern Territory, with the
acquisition expected to be earnings accretive in the financial year ended 30 June 2023.
On 25 July 2022, the Group acquired a non-controlling interest of 49% in Yalagan Infrastructure Pty Limited, a
company supporting Indigenous labour hire in New South Wales.
On 28 July 2022 the Group declared a fully franked final dividend of 3.0 cents in relation to the financial year
ended 3 July 2022.
37. DIVIDENDS
a. Ordinary shares
On 28 July 2022 the Group declared a fully franked final dividend of 3.0 cents in relation to the financial year
ended 3 July 2022. With a fully franked interim dividend of 3.0 cents previously declared on 2 February 2022, this
brings the full year dividend for the financial year ended 3 July 2022 to a total of 6.0 cents, a 43% increase on the
dividend for the prior financial year (FY21: 4.2 cents).
b.
Franking credits
Franking credits available for subsequent financial years based on a tax rate of 30%
(2021: 30%)
2022
$000
928
2021
$000
2,411
The balance of the franking accounts includes:
•
•
•
franking credits that will arise from the payment of the amount of the provision for income tax;
franking debits that will arise from the refund of the amount of the provision for income tax;
franking debits that will arise from the payment of dividends recognised as a liability at the reporting date;
and
franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
•
ASHLEY SERVICES GROUP ANNUAL REPORT 2022
71
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 26 August 2022.
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 1,156 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
227
364
163
333
69
1,156
161,235
954,408
1,316,710
10,750,419
130,793,132
143,975,904
%
0.12
0.66
0.91
7.47
90.84
100.00
The number of shareholders holding less than a marketable parcel of Fully Paid Ordinary shares is 63 with a total
number of shares held is 6,971.
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
15,592,969
%
55.76%
10.83%
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 2022
72
ASX Additional Information
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
BNP Paribas Nominees Pty Ltd
Mr Marc Shrimpton
Moat Investments Pty Ltd
Super Wide Pty Ltd
Mr Andrew Douglas Shrimpton
Action James Holdings Pty Limited
Bond Street Custodians Pty Ltd
Mast Financial Pty Ltd
Stirling Superannuation Pty Ltd
Mrs Kerry Elizabeth Draffin
Velkov Funds Management Pty Ltd
Garry Anthony John Butler
WestFerry Operations Pty Ltd
Mr Peter John Stirling and Mrs Rosalind Verena Sterling
Mr Brenton Fletcher
HBD Services Pty Ltd
Shann Superannuation Nominees Pty Ltd
Total
Annual General Meeting
Number of shares
80,279,030
21,102,626
3,359,222
2,123,102
1,500,000
1,424,000
1,140,326
1,115,000
777,888
750,000
696,000
650,000
637,416
628,000
604,243
602,559
530,000
513,023
500,000
500,000
%
55.76%
14.66%
2.33%
1.47%
1.04%
0.99%
0.79%
0.77%
0.54%
0.52%
0.48%
0.45%
0.44%
0.44%
0.42%
0.42%
0.37%
0.36%
0.35%
0.35%
119,432,435
82.95%
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 3 November 2022 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 2022
73
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 Paul Brittain – Chief Financial Officer
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 Assurance (NSW) Pty Ltd
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 2022
74