Ashland Global
Annual Report 2024

Plain-text annual report

ASHLEY SERVICES GROUP ANNUAL REPORT 2024 1 Appendix 4E Year Ended 30 June 2024 Lodged with the ASX under Listing Rule 4.3A 29 August 2024 The following information should be read in conjunction with the attached Annual Report. 1. DETAILS OF REPORTING PERIODS: The consolidated statement of profit or loss and other comprehensive income and consolidated statement of financial position relates to Ashley Services Group Limited (“ASH”) and its controlled entities (“the Group”). The current reporting period is the twelve months from 1 July 2023 to 30 June 2024. The previous corresponding reporting period was from 4 July 2022 to 30 June 2023. 2. RESULTS FOR ANNOUNCEMENT TO THE MARKET: Results: Change % Change Amount $’000 Revenue from ordinary activities Up 1.3% To 556,538 Profit after tax for the year Down 88.2% To 1,350 Profit after tax for the year attributable to shareholders Down 87.5% To 1,350 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: Not applicable. Loss of control over entities: Not applicable. Details of interests in significant joint ventures and associates: 1. A non-controlling 49% interest in Dardi Munwurro Labour and Traffic Management Pty Limited, a company providing Indigenous labour hire in Victoria; 2. A non-controlling interest of 49% in Yalagan Infrastructure Pty Limited, a company supporting Indigenous labour hire in New South Wales; and 3. A non-controlling interest of 49% in EWP Services Pty Limited, a company supporting Indigenous labour hire in the Pilbara Region within Western Australia. ASHLEY SERVICES GROUP ANNUAL REPORT 2024 Dividend re-investment plans: Not applicable. Dividends: Record Payment Cents per Franked Amount Date Date Share per Share (Cents) Interim Dividend - 2024 5 March 2024 15 March 2024 0.50 0.50 Final Dividend - 2024 5 September 2024 19 September 2024 0.24 0.24 Additional Information: 2024 2023 Net tangible assets ($000) 6,8671 5,2981 Shares on Issue 143,975,904 143,975,904 Net tangible assets per share ($) 0.048 0.037 Note: 1. Right-of-use assets are included for the purposes of the Net Tangible Assets calculation. Audit qualification or review: The audited financial statements are attached. Ross Shrimpton Managing Director Sydney, 29 August 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 Ashley Services Group Limited Annual Report 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 4 CHAIRMAN AND MANAGING DIRECTOR’S REVIEW ------------------------------------------------------------------ 5 DIRECTORS’ REPORT --------------------------------------------------------------------------------------------------------- 9 AUDITOR’S INDEPENDENCE DECLARATION -------------------------------------------------------------------------- 23 CORPORATE GOVERNANCE STATEMENT ----------------------------------------------------------------------------- 24 CONSOLIDATED ENTITY DISCLOSURE STATEMENT ----------------------------------------------------------------- 25 DIRECTORS’ DECLARATION----------------------------------------------------------------------------------------------- 28 INDEPENDENT AUDITOR’S REPORT ------------------------------------------------------------------------------------ 29 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ------------- 34 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ----------------------------------------------------------- 35 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ------------------------------------------------------------ 37 CONSOLIDATED STATEMENT OF CASH FLOWS --------------------------------------------------------------------- 38 NOTES TO THE FINANCIAL STATEMENTS ----------------------------------------------------------------------------- 39 ASX ADDITIONAL INFORMATION --------------------------------------------------------------------------------------- 79 CORPORATE DIRECTORY -------------------------------------------------------------------------------------------------- 81 Chairman and Managing Director’s Review ASHLEY SERVICES GROUP ANNUAL REPORT 2024 5 MR IAN PRATT AND MR ROSS SHRIMPTON The financial year ended 30 June 2024 (“FY24”) has been challenging, with a disappointing outcome from the acquisition of Linc Personnel Pty Ltd (“Linc”) and specific negative factors affecting our key market sectors. The Net Profit After Tax (“NPAT”) result includes non-recurring expenses of $3.2 million, primarily relating to the non-cash write-down of customer relationships and goodwill associated with the purchase of Linc. As with all acquisitions, there was risk associated with the purchase of Linc. The Group had 18 months to renew the major customer contract or secure new customers and expand within the higher margin Oil and Gas sector. As announced on 31 October 2023, Linc was unsuccessful renewing its key customer contract and as of today, has no employees. The value of acquired customer relationships has been written off in full throughout FY23 and FY24, with goodwill also fully impaired during FY24. The expected growth in the warehousing, logistics, retail and manufacturing sectors did not occur in FY24. Underlying hours in these sectors were down 6%, with economic activity and casual labour demand reduced across the existing customer base. The Group has not lost any significant customers. We have secured longer term contracts with several key customers and gained new customers. Hours delivered to the new customers were minor in FY24, but are expected to increase in FY25. Margins continued to decline due to the negative impact of fixed hourly margins in the current inflationary environment, the general competitive nature of the labour hire industry and the decrease in benefits received from government support programmes for trainees. We believe both demand and margins in these market sectors have now stabilised and the Group is focused on improving efficiencies through continuing system and process improvements. Hours worked, revenue and margin in the construction and engineering sectors reduced due to industrial relation challenges and project delays in Victoria. The Group’s focus is to expand in both sectors outside Victoria and, within Victoria, to diversify its customer base. Profitability from Owen Pacific Workforce (“OPW”) has been below expectations due to increasing flight costs not recoverable from workers. The Department of Workplace Relations (“DEWR”) has issued a more favourable flight recovery matrix, effective from 1 August 2024. OPW has now been merged with the horticultural business previously existing within the Group and improved delivery structures, processes and systems will enable the Group to better service customers, with expected growth moving forward. Positively, the Training division continued to deliver improved results. The Group’s strategy remains to diversify outside the lower margin base within the supply chain, logistics, retail and manufacturing sectors by broadening our geographical and industry footprints in growing, more profitable sectors, whilst maintaining our focus on high value service. Initiatives to grow in construction and engineering outside Victoria, as well as mining and horticulture have progressed, but at a slower pace than anticipated. Chairman and Managing Director’s Review ASHLEY SERVICES GROUP ANNUAL REPORT 2024 6 Staff numbers have been reduced from a peak of 347 internal staff to 288 and I thank the team who continue to achieve excellence in their customer service and remain critical for delivery of continued expansion over the coming years. On 14 July 2023, the Group acquired the remaining 20% of the CCL Group. The purchase consideration for the 20% interest is payable in two instalments, with the first payment of $0.886 million made in October 2023 (based upon actual FY23 EBITDA) and the final instalment to be paid in October 2024 (based actual FY24 EBITDA). DISCUSSION ON RESULTS Earnings NPAT for the financial year ended 30 June 2024 (“FY24”) was $1.35 million (FY23: $11.4 million). Key elements within the result include: Revenues Group Revenue at $556.5 million increased by $7.3 million (1.3%) from the comparative period. Labour Hire revenue at $538.3 million was 1% above the prior year. Revenue includes a full year of sales of $62.8 million from OPW, acquired 6 February 2023. Excluding OPW, revenues were 6% below prior period with total hour worked down 8%, due to reduced existing customer demand across all key sectors. The decreased activity has been partly offset by inflationary increases in underlying wages. Training revenues at $18.25 million were up $2.25 million (14%), with growth achieved across both the Ashley (“ASH”) and The Instruction Company (“TIC”) training businesses, as new courses continued to be added to scope and both businesses increased geographic coverage. Earnings before interest taxes depreciation and amortisation (“EBITDA”) Group EBITDA for the financial year was $8.6 million, down by $11.5 million (57%) on the prior corresponding period (FY23: EBITDA of $20.1 million). EBITDA includes non-recurring expenses of $3.2 million, primarily relating to the write-down of customer relationships and goodwill associated with the purchase of Linc Personnel Pty Ltd (“Linc”). Labour Hire division EBITDA of $13.2 million, was down $8.3 million (38.6%) on the prior corresponding period (FY23: $21.5 million). Labour Hire margin reduced 159 basis points (“bps”) to 2.45%. Linc contribution in FY24 was negligible following the loss of the Inpex contract, down $1.4 million from the prior period. Training division EBITDA of $4.0 million was up $0.3 million or 8.1% on the prior corresponding period (FY23: $3.7 million), following the revenue increase. EBITDA margin was 21.9%. Corporate overheads (excluding interest, depreciation and amortisation), at $5.3 million were up $0.2 million on prior corresponding period (FY23: $5.1 million), due to underlying inflation. Chairman and Managing Director’s Review ASHLEY SERVICES GROUP ANNUAL REPORT 2024 7 Non-cash, non-recurring expense/(income) of the year FY24 $m FY23 $m Linc customer relationship - impairment 1.80 - Linc goodwill - impairment 2.58 - Total non-cash impairment expense - EBITDA & NPAT impact 4.38 - Reduction in redemption liabilities to purchase the remaining 25% of Linc (acquired 31 January 2024 for $0.244 million) and the remaining 20% of the CCL Group (acquired 14 July 2023). (1.14) - Net EBITDA & NPAT expense impact 3.24 - Statement of financial position Net assets at $30.45 million were down $3.8 million from the financial year ended 30 June 2023 position of $34.3 million, largely in line with the NPAT of $1.35 million for the year, reduced by the dividend payments of $5 million. Noteworthy balance sheet movements include: ▪ Trade and other receivables down $11.6 million to $45.5 million. This reflects both reduced revenues for the month of June ($8.6 million or 19% below the prior period), but also an overall reduction in payment terms with customers. ▪ Trade and other payables were down $8.2 million to $33.8 million reflecting the reduced June activity. ▪ Property, plant and equipment increased $1.0 million to $5.3 million, with net capital additions of $2.5 million, $1.0 million above depreciation of $1.5 million. ▪ Intangible assets decreased $5.4 million to $23.6 million, due mainly to the $4.4 million impairment of Linc goodwill and customer relationships, but also $1 million of customer relationship amortisation, representing an ongoing $0.75 million for OPW customer relationships and $0.25 million for Linc amortisation from 1 July 2023 to 31 December 2023. ▪ Borrowings increased $4.4 million and cash decreased $2.4 million, with total net debt increasing $6.8 million to $12.5 million as of 30 June 2024. Cash Flow Operating cash flow was stronger in the 2nd half of the financial year, with an inflow of $4.3 million ($0.8 million outflow in the first half of the year), bringing the full year operating cash flow to $3.5 million (FY23: $22.8 million). Operating cash flow before income taxes and interest was $11.5 million, slightly below the $11.9 million EBITDA (excluding non-cash, non-recurring expenses). Tax payments were $6.0 million, with $4.6 million of net payments made in relation to FY23. Net interest payments were $1.96 million. The overall outflow from investing activities of $3.8 million includes the first instalment payment made ($0.886 million) to acquire the remaining 20% of the CCL Group, the 2nd instalment paid in relation to the prior year acquisition of OPW ($1.8 million) and the payment to acquire the final 25% interest in Linc ($0.244 million). Net underlying capital expenditures were $2.5 million (down $0.7 million from the prior year), primarily to fund vehicle and equipment purchases to replace leased assets in the traffic management business in Victoria. Associated entities repaid $1.65 million in loans during FY24. The overall outflow from financing activities of $2.1 million was primarily due to the combined $5.0 million dividend payments covering the 2023 final dividend ($4.3 million) and the 2024 interim dividend ($0.7 million). Lease payments were $1.5 million and gross borrowings increased $4.4 million. Overall, cash and cash equivalents declined $2.4 million in FY24 (FY23: $0.8 million inflow). Chairman and Managing Director’s Review ASHLEY SERVICES GROUP ANNUAL REPORT 2024 8 DIVIDEND On 29 August 2024, the Group declared a fully franked final dividend of 0.24 cents in relation to the financial year ended 30 June 2024 (Ex-div: 4 September 2024; Payment: 19 September 2024). Together with a fully franked interim dividend of 0.5 cents previously declared on 27 February 2024, this brings the full year dividend for the financial year ended 30 June 2024 to a total of 0.74 cents (FY23: 6.0 cents), representing a payout ratio for FY24 equivalent to 79% of available Group NPAT. EVENTS SUBSEQUENT TO BALANCE DATE Other than the dividend announcement on 29 August 2024 outlined above, no matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. Ian Pratt Ross Shrimpton Chairman Managing Director Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 9 The Directors present their annual financial report on the consolidated entity, being Ashley Services Group Limited (the “Company”) and its controlled entities (the “Group”) for the financial year ended 30 June 2024. 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 Appointed / Resigned Mr Ian Pratt Chairman Appointed 1 October 2015 Mr Ross Shrimpton Managing Director 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 Mr Paul Brittain Executive Director Appointed 25 July 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. Ian 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. Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 10 • 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. Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 11 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 • Number of Shares Held Shareholding • % Mr Ian Pratt 15,060 0.01 Mr Ross Shrimpton 84,279,030 58.54 Mr Paul Brittain - 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 Company Date from Date to Mr Ian Pratt Nil - - Mr Ross Shrimpton Nil - - Mr Paul Brittain Nil - - a. Principal activities 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 10 10 3 3 2 2 0 0 Mr Ross Shrimpton 10 10 3 3 2 2 0 0 Mr Paul Brittain 10 10 3 3 2 2 0 0 Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 12 1. BUSINESS REVIEW a. Operating results The consolidated profit of the Group attributable to equity holders after providing for income tax amounted to $1,350,000 (2023: profit $11,402,000). b. Review of operations Information on the operations and financial position of the Group and its business strategies and prospects is set out in the Chairman and Managing Director’s Review. c. Future developments Likely developments in the operations of the consolidated entity in future years and the expected results of those operations are referred to generally in the Chairman and Managing Director’s Review. d. Events subsequent to reporting date There have been no matters or circumstances that have arisen since the end of the year that would have significantly affected the group’s operations in financial year 2024 except as follows: On 29 August 2024 the Group declared a fully franked final dividend of 0.24 cents in relation to the financial year ended 30 June 2024, with a payment date of 16 September 2024. 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 30 June 2024. 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 23 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/ Directors’ Reports) Instrument 2016/191, amounts in the financial report are rounded off to the nearest thousand dollars unless otherwise indicated. 3. REMUNERATION REPORT – AUDITED The directors of Ashley Services Group Limited present the remuneration report for Non-Executive Directors, Executive Directors and other key management personnel, prepared in accordance with the Corporations Act 2001 and the Corporations Regulations 2001. The remuneration report is set out in the following main headings: Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 13 ▪ 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. a. Key management personnel The following persons acted as Directors of the Group or as key management personnel during the financial year: Executive Directors: ▪ Ross Shrimpton ▪ Paul Brittain. Non-Executive Directors: ▪ Ian Pratt. Other key management personnel: ▪ Glen Everett (Chief Operating Officer). Key management personnel include both the Directors and other key management personnel named above. b. Principles used to determine the nature and amount of remuneration The objective of the Group’s executive reward framework is to ensure that reward for performance is competitive and appropriate for the results delivered. The framework seeks to align executive reward with achievement of strategic objectives and the creation of value for shareholders. 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 a blend of short and long-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 • Long-term performance incentives, provided through participation in the Ashley Services Group Performance Rights Share Plan. The combination of these comprises the executive’s total remuneration. Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 14 Table 5: Key components of senior executive remuneration framework in place during the year ended 30 June 2024. Remuneration Elements Fixed Remuneration/Base Pay Short Term Incentive (STI) Long Term Incentive (LTI) ▪ 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. ▪ ‘At risk’ award opportunity for the achievement of performance hurdles over two different measurement periods: - Tranche 1 – up to 5 years from 30 June 2022; - Tranche 2 – up to 10 years from 30 June 2022. ▪ 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. ▪ The performance hurdles are achieving greater than target Profit Before Tax (“PBT”) in any financial year up to 30 June 2027 for Tranche 1 or any financial year up to 30 June 2032 for Tranche 2. ▪ There are no guaranteed base pay increases in any executives’ employment contracts. ▪ Paid in cash within 30 days of finalisation of Audited Annual Report. ▪ No value is derived unless the Group exceeds the PBT targets. ▪ For Tranche 1, the PBT target is $24.5 million, excluding any intangible amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost relating the LTI performance Rights Plan. ▪ For Tranche 2, the PBT target is $36.5 million, excluding any intangible amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost relating the LTI performance Rights Plan ▪ Vesting will take place on 1 September, following the financial year in which the PBT target is achieved and provided the executive is still employed at the date of vesting. ▪ Grant of equity awards aligns shareholder and executive interests, enhances retention of key talent and focuses executives on long term sustainable business performance. Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 15 Table 6: Key features of the senior executive STI plan for FY24 Table 7: Key features of the senior executive LTI plan Overview of the LTI plan Who participates in the Senior Executive LTI? The Chairman, the Chief Financial Officer and the Chief Operating Officer. The Managing Director does not participate in the LTI plan. What was awarded under the LTI plan in FY23? On 22 May 2023, senior executives received an LTI award of 7,588,734 performance rights, the vesting of which is subject to the performance conditions outlined below. The number of rights awarded was approved by shareholders at an Extraordinary General Meeting held on 30 Match 2023. Each performance right converts into one share of ASH if the vesting criteria are met, at no cost to the participants. What are the performance conditions? Senior executive LTI awards are earned only upon achievement of performance hurdles: ▪ Tranche 1: 4,535,240 performance rights - 60% of the LTI grant - PBT target is $24.5 million, excluding any intangible amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost relating the LTI performance Rights Plan. ▪ Tranche 2: 3,023,494 performance rights - 40% of the LTI grant - PBT target is $36.5 million, excluding any intangible amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost relating the LTI performance Rights Plan. 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 divisional EBIT or Group NPAT, as applicable, that must be met to receive an STI payment. Achievement of the thresholds does not automatically entitle executives to an STI award. What are the performance conditions? Measures Senior Executives Financial measures (80% of STI opportunity) Non-Financial measures (20% of STI opportunity) Assessed against: ▪ Budget EBIT or Budget NPAT 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. ▪ Individually set Key Performance Indicators. Setting and assessing performance Who sets and assesses performance? The MD sets and assesses performance and short-term incentive outcomes for senior executives with guidance from the Remuneration Committee. How is the STI delivered? 100% of any STI award is paid in cash within 30 days of finalisation of the audited Annual Report. Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 16 Overview of the LTI plan Over what period is performance measured? The Board has determined that the LTI plan will be subject to the performance conditions over the following periods: ▪ Tranche 1 – 5 years from 30 June 2022 - any financial year up to 30 June 30 June 2027; ▪ Tranche 2 – 10 years from 30 June 2022 - any financial year up to 30 June 2032. How are the performance conditions assessed? The performance will be assessed by the Remuneration Committee (excluding participants) by reference to the Company’s absolute profit before tax (“PBT”) in a financial year based upon the Appendix 4E and Annual Report and other financial information, excluding any intangible amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost relating the LTI performance Rights Plan. Why were the performance measures chosen? A PBT growth hurdle: ▪ Links executive reward to a fundamental indicator of financial performance that is directly connected to shareholders; and ▪ Links directly to ASH’s long-term objectives of improving and maintaining earnings performance. The PBT targets represents a 50% improvement on the actual PBT for FY22 (for tranche 1) and 125% increase on the FY22 base (for tranche 2). Is performance subject to retesting? No, retesting of performance is not permitted. Who assesses performance against targets? The Remuneration Committee (excluding any participants in the plan) based on audited financial information. Does the executive receive dividends and voting rights on unvested awards? No, there are no voting rights or entitlements to dividends on unvested awards under the LTI plan. What happens in the event of a change of control? Upon a change of control event, the Board may determine to vest some or all of the LTI awards. In making this determination, the Board will consider all relevant circumstances, including the performance against the PBT measure up to the date of the change of control event and the portion of the performance period that has expired. What happens in the event of cessation of employment? In general, unvested LTI awards are forfeited. In limited circumstances, such as upon a senior executive’s death, serious injury or incapacity during the performance period or other reason approved by the Board, any unvested performance shares will vest at the end of the performance period if the relevant performance conditions have been satisfied. When can participants dispose of shares issued? Shares issued upon vesting of Performance Rights may not be disposed of by participants within 12 months of their issue. Additionally, all shares are always subject to the Company’s Share Trading Policy. Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 17 STI and LTI plans for the financial year ending 30 June 2025 The remuneration committee has approved a similar Short-Term Incentive (STI) plan for the year ending 30 June 2025, based upon budget targets for that annual period. The participants and targets for the LTI plan remain place for FY25 and through to the financial year ended 2032. 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 operate an equity plan for the non-executive Director, the LTI Performance Rights Plan. 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 17 to 21. The key management personnel of Ashley Services Group are listed in the table below. The key management personnel have authority and responsibility for planning, directing and controlling activities of the Group. Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel are formalised in a service agreement. The major provisions of the agreements relating to remuneration are set out below: Table 8: Executive and Key Management Personnel Service Agreements Name Base Salary $ Target STI %1 Target LTI %2 Term of agreement Notice Period Ross Shrimpton 450,000 - - Ongoing 6 months Paul Brittain 475,000 30 No fixed % - see LTI plan details in this report Ongoing 6 months Glen Everett3 475,000 30 No fixed % - see LTI plan details in this report Ongoing 6 months Note: 1. Maximum annual award as a percentage of annual salary. 2. Details of the LTI plan are included in this Remuneration Report. 3. Include $25,000 car allowance. Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 18 Table 9: Statutory key performance indicators of the group over the last five years 2024 2023 2022 2021 2020 Profit / (Loss) for the year attributable to shareholders ($000) 1,350 10,794 11,315 8,923 4,667 Basic earnings per share (cents) 0.94 7.50 7.86 6.20 3.24 Dividends declared ($000)1 1,065 8,639 8,639 6,047 3,887 Dividend payout ratio (%) 78.9 80.0 76.3 67.8 83.3 Increase / (decrease) in share price (%)2 (64.8) 7.6 43.4 92.3 0.0 Total KMP incentives as percentage of profit/(loss) for the year (%) (9.6) 3.8 (0.1) 3.9 4.1 Note: 1. 2024 Final Dividend declared 28 August 2024 in relation to the 2024 financial year, with payment date of 16 September 2024. 2024 Interim Dividend declared 27 February 2024 in relation to the 2024 financial year, with payment date of 15 March 2024. 2023 Final Dividend declared 28 July 2023 in relation to the 2023 financial year, with payment date of 16 September 2023 2023 Interim Dividend declared 10 February 2023 in relation to the 2023 financial year, with payment date of 17 March 2023. 2022 Final Dividend declared 28 July 2022 in relation to the 2022 financial year, with payment date of 16 September 2022. 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. 2. Increase / (decrease) in share price (%) is year-end share price relative to prior year-end. Table 10: 2024 – Remuneration of Key Management Personnel calculated in line with Australian Accounting Standards 2024 ST1 employee benefits PE2 benefits LT3 employee benefits Total4 Performance based Remuneration Name Cash salary & fees $ ST Bonus1 $ Other payments5 $ Super- annuation $ $ $ % Non-executive Directors Ian Pratt 205,479 - - 22,603 (6,170) 221,912 (2.8) Executive Director Ross Shrimpton 422,601 - - 27,399 - 450,000 - Paul Brittain 447,601 - - 27,399 (61,695) 413,305 (14.9) Other key management personnel Glen Everett 422,601 - 25,000 27,399 (61,695) 413,305 (14.9) Total 1,498,282 - 25,000 104,800 (129,560) 1,498,522 (8.6) Note: 1. ST – Short-term. No short-term incentive expense was recognised in the Profit and Loss account for FY24, given that financial targets for FY24 were not met. 2. PE – Post-employment. 3. LT – Long-term. Performance Rights valued using Black-Scholes modelling. Accounting expense recognised based upon probability of vesting and performance periods - separately for Tranche 1 and Tranche 2. Given the decline in FY24 profits, it is currently deemed unlikely that performance criteria for vesting under the LTI plan will be met and no expense has been recognised in the Profit and Loss account for FY24. Additionally, the prior period expense of $0.130 million has been credited to profit in the year ended 30 June 2024. 4. Amounts included in the above table include amounts expensed within the Profit or Loss account for the year. 5. Car allowance. Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 19 Table 11: 2024 – Remuneration payments for Key Management Personnel 2024 ST1 employee benefits PE2 benefits LT3 employee benefits Total 4 Performance based Remuneratio n Name Cash salary & fees $ ST Bonus1 $ Other payments5 $ Super- annuation $ $ $ % Non-executive Directors Ian Pratt6 205,479 - - 22,603 - 228,082 - Executive Director Ross Shrimpton7 422,601 - - 27,399 - 450,000 - Paul Brittain 447,601 142,500 - 27,399 - 617,500 23.1 Other key management personnel Glen Everett 422,601 135,000 25,000 27,399 - 610,000 22.1 Total 1,498,282 277,500 25,000 104,800 - 1,905,582 14.6 Note: 1. ST – Short-term. 2. PE – Post-employment. 3. LT – Long-term. 4. Amounts included in the above table include amounts paid during the financial year. 5. Car allowance. 6. During the year taxation fees of $153,710 have also been paid to Pratt Partners (in which Ian Pratt is a partner). 7. During the year rent and outgoings for the office at Arndell Park of $153,046 have been paid to Shrimpton Holdings Pty Limited as trustee for the Shrimpton Family Trust (an entity controlled by Ross Shrimpton). Table 12: 2023 – Remuneration of Key Management Personnel calculated in line with Australian Accounting Standards 2023 ST1 employee benefits PE2 benefits LT3 employee benefits Total4 Performance based Remuneration Name Cash salary & fees $ ST Bonus1 $ Other payments5 $ Super- annuation $ $ $ % Non-executive Directors Ian Pratt 205,479 - - 21,575 6,170 233,224 2.6 Ron Hollands6 5,000 - - 525 - 5,525 - Executive Director Ross Shrimpton 424,708 - - 25,292 - 450,000 - Paul Brittain7 420,880 142,500 150,000 24,093 61,695 799,168 25.6 Other key management personnel Glen Everett8 424,708 135,000 - 25,292 61,695 646,695 30.4 Total 1,480,775 277,500 150,000 96,777 129,560 2,134,612 19.1 Note: 1. ST – Short-term. 2. PE – Post-employment. 3. LT – Long-term. Performance Rights valued using Black-Scholes modelling. Accounting expense recognised based upon probability of vesting and performance periods - separately for Tranche 1 and Tranche 2. 4. Amounts included in the above table include amounts expensed within the Profit or Loss account for the year. 5. Sign-on bonus paid following retention period. 6. For the period from 1 July 2022 to 25 July 2022. 6. Commenced 25 July 2022. 7. Commenced 7 March 2022. Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 20 Table 13: 2023 – Remuneration payments for Key Management Personnel 2023 ST1 employee benefits PE2 benefits LT3 employee benefits Total4 Performance based Remuneration Name Cash salary & fees $ ST Bonus1 $ Other payments5 $ Super- annuation $ $ $ % Non-executive Directors Ian Pratt9 205,479 - - 21,575 - 227,054 - Ron Hollands6,10 5,000 - - 525 - 5,525 - Executive Director Ross Shrimpton11 424,708 - - 25,292 - 450,000 - Paul Brittain7 420,880 - 150,000 24,093 - 594,973 - Other key management personnel Glen Everett8 424,708 33,750 - 25,292 - 483,750 7.0 Total 1,480,775 33,750 150,000 96,777 - 1,761,302 1011.9 Note: 1. ST – Short-term. 2. PE – Post-employment. 3. LT – Long-term. 4. Amounts included in the above table include amounts paid during the financial year. 5. Sign-on bonus paid following retention period. 6. For the period from 1 July 2022 to 25 July 2022. 7. Commenced 25 July 2022. 8. Commenced 7 March 2022. 9. During the year taxation fees of $53,232 have also been paid to Pratt Partners (in which Ian Pratt is a partner). 10. During the year company secretarial fees of $26,052 have also been paid to the Ron Hollands Family Trust (in which Ron Hollands Pty Ltd is the trustee). 11. During the year rent and outgoings for the office at Arndell Park of $147,316 have been paid to Shrimpton Holdings Pty Limited as trustee for the Shrimpton Family Trust (an entity controlled by Ross Shrimpton). 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 35. e. Shares held by key management personnel The number of ordinary shares in the Company during the 2024 reporting period held by each of the Group’s key management personnel, including their related parties are set out below: Table 14: Shares held by Key Management Personnel Name Balance at start of the period Shares Disposed Shares acquired Balance at end of the period Ian Pratt 15,060 - - 15,060 Ross Shrimpton 80,279,030 - 4,000,000 84,279,030 Paul Brittain - - - - Glen Everett - - - - Total 80,294,090 - 4,000,000 84,294,090 f. Performance Rights held by key management personnel The number of performance rights in the Company during the 2024 reporting period held by each of the Group’s key management personnel, including their related parties are set out below: Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 21 Table 15: Performance Rights held by Key Management Personnel Name Balance at start of the period Rights acquired Rights Vesting Balance at end of the period Grant date Fair value of grant $’000 Expected conversion date Ian Pratt - Tranche 1 215,964 - - 215,964 30/3/23 109,062 1/9/2027 Ian Pratt - Tranche 2 143,976 - - 143,976 30/3/23 48,808 1/9/2032 Ian Pratt - Total 359,940 - - 359,940 157,870 Ross Shrimpton - - - - Ron Hollands - - - - Paul Brittain – Tranche 1 2,159,638 - - 2,159,638 30/3/23 1,090,620 1/9/2027 Paul Brittain – Tranche 2 1,439,759 - - 1,439,759 30/3/23 488,080 1/9/2032 Paul Brittain - Total 3,599,397 - - 3,599,397 1,578,700 Glen Everett – Tranche 1 2,159,638 - - 2,159,638 30/3/23 1,090,620 1/9/2027 Glen Everett – Tranche 2 1,439,759 - - 1,439,759 30/3/23 488,080 1/9/2032 Glen Everett - Total 3,599,397 - - 3,599,397 1,578,700 Total 7,558,734 - - 7,558,734 3,315,270 g. Executive service agreements On appointment to the Board, all non-executive Directors sign a letter of appointment with the Company. The letter summarises the terms including compensation, relevant to the office of Director. All contracts with executives may be terminated by either party with a notice period as outlined in Table 8. Executives are typically restricted for twelve months after termination from conducting or engaging in competing businesses and from solicitation of customers and employees of the Company. End of audited Remuneration Report. FUTURE PROSPECTS AND MATERIAL BUSINESS RISKS The Group anticipates continued competitive conditions in the labour hire market in the financial year ending 30 June 2025 (“FY25”). Our construction-exposed labour hire brands face continuing uncertainty in Victoria and we expect profit in this sector to be minimal during the first quarter of FY25. First quarter profits for ASH training will also be reduced with lower public funding available in Victoria. Our focus remains to diversify revenues, particularly in higher margin sectors and to optimise efficiency. More specifically: • Growing the technical services division. We are expanding in both the construction and engineering sectors outside Victoria and diversifying the customer base within Victoria. We also expect a positive contribution in FY25 from the EWP Services joint venture, with business to commence in mining in the Pilbara; • Growing the horticulture sector. The Group has recently secured several new customers, leveraging the OPW acquisition; • Capitalising on strengths within our Training division by continuing to expand qualifications on scope, geographic coverage and private fee for service training; • Solidifying margins in the core supply chain, retail and construction labour hire sectors. 3-year contracts are now in place with most key customers; • Improving efficiencies and lowering cost through continuing system and process improvements. Solid progress was achieved by the team in FY24, with efficiencies and cost reductions being delivered across all areas of service delivery and supporting administration; and Directors’ Report ASHLEY SERVICES GROUP ANNUAL REPORT 2024 22 • Commercialisation of our industry leading labour management systems, through licensing to potential overseas customers. We believe margins have now stabilised in our core warehousing, logistics, retail and manufacturing sectors (following two years of declines) and our growth initiatives will contribute more significantly in FY25. As with any organisation, our future prospects may be impacted by risks. Changes in the regulatory environment have the potential to create challenges for our business. This includes federal and state legislative changes relating to employment and award conditions, and also those relating to employment and training benefits and subsidies, as well as changes to the Seasonal Worker Programme. With the majority 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. The pace of labour law changes, particularly in relation to casual workforces, has recently increased. Our core offering is the provision of high value contingent work force solutions for our customers. Our customers are almost exclusively large, blue-chip clients in industries and sectors which experience variable manning requirements. They use Ashley Services Group because we provide the flexibility to manage their cost bases efficiently and effectively, particularly to deal with business peaks and troughs. The key components of recent legislation changes surround casual and permanent work forces, as well as the Same pay, same job legislation. We already operate within the casual versus permanent environment. Many of our casual employees become permanent workers both with our host customers and ourselves. Regarding Same pay, same job legislation, we believe legislative changes will continue to be manageable within the general course of business. Nonetheless, continuing changes to operating hour requirements, employee flexibility and award terms make it more difficult to optimise productivity and put pressure on margins. 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 technology, both candidate- and client-facing, is being utilised to mitigate risk in this area and deliver high quality candidates to our clients. Borrowing risk. The acquisition facility expires 28 December 2025, when the remaining debt of up to $9 million would be payable. As planned, discussions with our lender will commence shortly to extend the term for this facility. System outage risks. The Group’s key systems are cloud based third-party maintained systems. The Group has Service Level Agreements in place with those providers, but if those systems are impacted by global outages, the Group’s ability to pay its workers and invoice customers could be temporarily impacted. The Group has multiple payroll and invoicing systems in place and manual contingency plans for payroll payments, but sustained outages within key systems would impact service delivery. 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, 29 August 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 23 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 30 June 2024, 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 K L Luong 29 August 2024 Director Corporate Governance Statement ASHLEY SERVICES GROUP ANNUAL REPORT 2024 24 A Corporate Governance Statement has been adopted by the Board on 29 August 2024 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 have actively pursued diversity standards across the Group and has set measurable objectives for further enhancing gender diversity and assess annually the company’s progress in achieving them. The key measurable objectives are: 1. Board: a minimum of 1 in 5 or 20% of directors be female. The board currently consists of 3 members, all males. 2. Direct Reports of CFO and COO: a minimum of 40% should be female. CFO direct reports are currently 60% female. COO direct reports are currently 43% female. 3. Remainder of the company - equal male and female participation. Currently females comprise 58% of the Group. The company will review its targets annually and continue to work on initiatives to obtain its objectives. The Company provides the following information on the proportion of women employees in the whole organisation. During the financial year ended 30 June 2024 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 2024 financial year has been reviewed against both quantitative and qualitative measures and Directors and Senior Executives provided feedback on the discharge of their responsibilities. Female Male Directors & Senior Management 38% 62% Corporate & Administration 82% 18% Labour Hire 60% 40% Recruitment 100% 0% Training 52% 48% Total 58% 42% Consolidated Entity Disclosure Statement as at 30 June 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 25 Basis of preparation This consolidated entity disclosure statement has been prepared in accordance with the s295(3A)(a) of the Corporations Act 2001 and includes the required information for Ashely Services Group Limited and the entities it controls in accordance with AASB 10 Consolidated Financial Statements. Tax residency S295(3A)(vi) of the Corporations Act 2001 defines tax residency as having the meaning in the Income Tax Assessment Act 1997. The determination of tax residency may involve judgement as there are different interpretations that could be adopted and which could give rise to different conclusions regarding residency. In determining tax residency, the consolidated entity has applied the following interpretations: Australian tax residency Current legislation and judicial precent has been applied, including having regard to the Tax Commissioner's public guidance. Foreign tax residency Where appropriate, independent tax advisers have been engaged to assist in the determination of tax residency to ensure applicable foreign tax legislation has been complied with. Trusts and partnerships Australian tax law generally does not contain residency tests for trusts and partnerships and these entities are typically taxed on a flow-through basis. Additional disclosures regarding the tax status of trusts and partnerships have been included where relevant. Name of the entity Entity type Trustee, partner, or participation in joint venture Country of incorporation % of share capital Australian or foreign tax resident Foreign jurisdiction of foreign residents Action Arndell Park Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Botany Pty Limited Body Corporate n/a Australia 100 Australia n/a Action James (Qld) Pty Limited Body Corporate n/a Australia 100 Australia n/a Action James NSW Pty Limited Body Corporate n/a Australia 100 Australia n/a Action James Parramatta Pty Limited Body Corporate n/a Australia 100 Australia n/a Action James WA Pty Limited Body Corporate n/a Australia 100 Australia n/a Concept Retail NSW Pty Ltd (formerly Action James Western Suburbs Pty Limited) Body Corporate n/a Australia 100 Australia n/a Action Job Support Pty Limited Body Corporate n/a Australia 100 Australia n/a Action MMX Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce ACT Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce COL1 Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Healthcare Pty Ltd (formerly Action Workforce COS1 Pty Limited) Body Corporate n/a Australia 100 Australia n/a Action Workforce COT Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce IMT Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce NSW Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Horticulture Pty Ltd (formerly Action Workforce OS Pty Limited) Body Corporate n/a Australia 100 Australia n/a Consolidated Entity Disclosure Statement ASHLEY SERVICES GROUP ANNUAL REPORT 2024 26 Name of the entity Entity type Trustee, partner, or participation in joint venture Country of incorporation % of share capital Australian or foreign tax resident Foreign jurisdiction of foreign residents Action Workforce OST Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce T1 Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce T2 Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce VER1 Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce Victoria Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce VM Pty Limited Body Corporate n/a Australia 100 Australia n/a Action Workforce VPS Pty Limited Body Corporate n/a Australia 100 Australia n/a ADV Services Pty Limited Body Corporate n/a Australia 100 Australia n/a ADV2 Pty Limited Body Corporate n/a Australia 100 Australia n/a ADV3 Pty Limited Body Corporate n/a Australia 100 Australia n/a ADV6 Pty Limited Body Corporate n/a Australia 100 Australia n/a Advance Exchange Pty Limited Body Corporate n/a Australia 100 Australia n/a Advance GW Pty Limited Body Corporate n/a Australia 100 Australia n/a Advance MIX Pty Limited Body Corporate n/a Australia 100 Australia n/a Advance Recruitments Pty Limited Body Corporate n/a Australia 100 Australia n/a AIVD Holdings Pty Limited Body Corporate n/a Australia 100 Australia n/a ASG Electrical Contracting Pty Ltd Body Corporate n/a Australia 100 Australia n/a Ash Pty Limited Body Corporate n/a Australia 100 Australia n/a Ashley Institute Holdings Pty Limited Body Corporate n/a Australia 100 Australia n/a Australian Institute of Vocational Development Pty Limited Body Corporate n/a Australia 100 Australia n/a AWF Training 3 Pty Limited Body Corporate n/a Australia 100 Australia n/a BCC Labour Solutions Pty Ltd Body Corporate n/a Australia 100 Australia n/a Cantillon Holdings Pty Limited Body Corporate n/a Australia 100 Australia n/a CCL Group Holdings Pty Ltd Body Corporate n/a Australia 100 Australia n/a CCLTS Group Pty Ltd Body Corporate n/a Australia 100 Australia n/a College of Innovation and Industry Skills Pty Limited Body Corporate n/a Australia 100 Australia n/a Complete Traffic Services (VIC) Pty Ltd Body Corporate n/a Australia 100 Australia n/a Concept AWF Pty Limited Body Corporate n/a Australia 100 Australia n/a Concept Electrical Resources Pty Ltd Body Corporate n/a Australia 100 Australia n/a Concept Employment (Aust) Pty Limited Body Corporate n/a Australia 100 Australia n/a Concept Engineering (Aust) Pty Limited Body Corporate n/a Australia 100 Australia n/a Total Rail Holdings Pty Ltd (formerly Concept Engineering Contracting Holdings Pty Ltd) Body Corporate n/a Australia 100 Australia n/a Total Rail Pty Ltd (formerly Concept Engineering Contracting Pty Ltd) Body Corporate n/a Australia 100 Australia n/a Concept Power Pty Ltd Body Corporate n/a Australia 100 Australia n/a Consolidated Entity Disclosure Statement ASHLEY SERVICES GROUP ANNUAL REPORT 2024 27 Name of the entity Entity type Trustee, partner, or participation in joint venture Country of incorporation % of share capital Australian or foreign tax resident Foreign jurisdiction of foreign residents Concept Project Resources Pty Limited Body Corporate n/a Australia 100 Australia n/a Concept Rail Pty Ltd Body Corporate n/a Australia 100 Australia n/a Concept Recruitment Specialists Pty Ltd Body Corporate n/a Australia 100 Australia n/a Concept Retail Solutions Pty Ltd Body Corporate n/a Australia 100 Australia n/a Construction Contract Labour (VIC) Pty Ltd Body Corporate n/a Australia 100 Australia n/a DMLT Holdings Pty Limited Body Corporate n/a Australia 100 Australia n/a EWPY Holdings Pty Ltd Body Corporate n/a Australia 100 Australia n/a EWPY Pty Ltd Body Corporate n/a Australia 100 Australia n/a Executive Careers Australia Pty Limited Body Corporate n/a Australia 100 Australia n/a Global Education and Training Group Pty Limited Body Corporate n/a Australia 100 Australia n/a Integracom Holdings Pty Limited Body Corporate n/a Australia 100 Australia n/a James Personnel Pty Limited Body Corporate n/a Australia 100 Australia n/a James Warehousing Pty Limited Body Corporate n/a Australia 100 Australia n/a Linc Personnel Pty Ltd Body Corporate n/a Australia 100 Australia n/a Logistics People Pty Limited Body Corporate n/a Australia 100 Australia n/a OGR Holdings Pty Limited Body Corporate n/a Australia 100 Australia n/a Owen Pacific Workforce Pty Ltd Body Corporate n/a Australia 100 Australia n/a Qualitas Education Pty Limited Body Corporate n/a Australia 100 Australia n/a Silk Group Holdings Pty Limited Body Corporate n/a Australia 100 Australia n/a TBRC Holdings Pty Limited Body Corporate n/a Australia 100 Australia n/a The Blackadder Recruitment Company Pty Limited Body Corporate n/a Australia 100 Australia n/a The Instruction Company Holdings Pty Ltd Body Corporate n/a Australia 100 Australia n/a The Instruction Company Pty Ltd Body Corporate n/a Australia 100 Australia n/a Track Safety Australia Pty Ltd Body Corporate n/a Australia 100 Australia n/a Tracmin Holdings Pty Limited Body Corporate n/a Australia 100 Australia n/a Tracmin Pty Limited Body Corporate n/a Australia 100 Australia n/a Australian Traffic & Labour Services Pty Ltd (formerly VIC Traffic and Labour Solutions Pty Ltd) Body Corporate n/a Australia 100 Australia n/a Vocational Training Australia Pty Limited Body Corporate n/a Australia 100 Australia n/a Y I Group Holdings Pty Ltd Body Corporate n/a Australia 100 Australia n/a Directors’ Declaration ASHLEY SERVICES GROUP ANNUAL REPORT 2024 28 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 30 June 2024 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 33 to the financial statements. d. The information disclosed in the consolidated entity disclosure statement is true and correct. 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 30 June 2024. 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, 29 August 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 29 Independent Auditor’s Report to the Members of Ashley Services Group Limited REPORT ON THE AUDIT OF THE FINANCIAL REPORT Opinion We have audited the financial report of Ashley Services Group Limited (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2024, 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 material accounting policy information, the consolidated entity disclosure statement 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 30 June 2024 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 2024 30 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 $556.9 million comprises a number of streams including: • labour hire revenue ($538.3 million); and • training revenue ($18.3 million); We focussed on this matter due to the size and magnitude of labour hire revenue, as well as the higher level of inherent risk due to the manual processes for inputting, calculating, reviewing, and recording of the labour hire revenue. 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 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. 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 $534.3 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 (for Labour Hire and OPW 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. Carrying Value of Intangible assets Refer to Note 16 (Intangible assets) and Note 17 (Impairment) The Group has a total Intangible assets balance of $23.6 million including a Goodwill balance of $17.6 million as at 30 June 2024 in relation to the Labour Hire, Training, Linc and OPW’s cash generating units (“CGU”). The Goodwill arose on Our audit procedures included but were not limited to the following: • Assessed the identification and determination of the Group’s CGUs based on our ASHLEY SERVICES GROUP ANNUAL REPORT 2024 31 acquisition of subsidiary companies in prior years for Labour Hire, Training, Linc and OPW. As required by Australian Accounting Standards the Group tested the Intangible assets for impairment, at 30 June 2024. During the period, Linc did not succeed in renewing its contract with Inpex, leading to the complete write-down of goodwill associated with this contract, amounting to $2.6 million, and the customer relationship asset recognised at acquisition date, amounting to $1.8 million. The Group determined the recoverable amount using value in use calculations for the relevant CGU listed above, 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 Intangible assets and the potentially material impact on the financial report. 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 Note 17 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 30 June 2024, 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: a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; and b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001, and for such internal control as the directors determine is necessary to enable the preparation of: a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and ASHLEY SERVICES GROUP ANNUAL REPORT 2024 32 b) the consolidated entity disclosure statement that is true and correct and is free of misstatement, whether due to fraud or error. In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control. • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. • Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. • Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. • Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. ASHLEY SERVICES GROUP ANNUAL REPORT 2024 33 From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. REPORT ON THE REMUNERATION REPORT Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 12 to 21 of the directors’ report for the year ended 30 June 2024. In our opinion, the Remuneration Report of Ashley Services Group Limited for the year ended 30 June 2024 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 K L Luong Chartered Accountants Director Sydney, NSW 29 August 2024 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the financial year ended 30 June 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 34 Note 30 Jun 2024 $000 30 Jun 2023 $000 Revenue 2 556,538 549,219 Other income 2 316 87 Fair value gain on redemption liabilities 21 1,144 - Share of (losses)/profits from associated entities 13,14 (91) 198 Employment costs (534,298) (517,981) Depreciation and amortisation expense 3 (3,797) (3,159) Finance costs 3 (2,401) (1,646) Impairment expenses 3 (4,376) - Other expenses (9,896) (10,793) Profit before income tax 3,139 15,925 Income tax expense 5 (1,789) (4,523) Profit for the year 1,350 11,402 Other comprehensive income - - Total comprehensive income for the year 1,350 11,402 Total comprehensive income for the year is attributable to: Shareholders of Ashley Services Group Limited 1,350 10,794 Non-controlling interests - 608 1,350 11,402 Basic earnings per share (cents) 26 0.94 7.50 Diluted earnings per share (cents) 26 0.89 7.40 The accompanying notes form part of these financial statements. Consolidated Statement of Financial Position As at 30 June 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 35 Note 30 Jun 2024 $000 30 Jun 2023 $000 Assets Current assets Cash and cash equivalents 7 137 2,520 Trade and other receivables 8 45,522 57,150 Current tax receivable 18 460 14 Contract assets 9 2,410 1,417 Loans to associated entities 12 162 1,744 Other assets 10 3,602 1,317 Total current assets 52,293 64,162 Non-current assets Property, plant and equipment 11 5,311 4,256 Investments in associated entities 14 307 398 Loans to associated entities 12 761 999 Right-of-use assets 15 2,884 3,361 Deferred tax assets 18 4,694 9,844 Intangible assets 16, 17 23,582 28,970 Other assets 10 291 306 Total non-current assets 37,830 48,134 Total assets 90,123 112,296 Liabilities Current liabilities Trade and other payables 19 33,843 42,043 Borrowings 22 8,201 8,189 Current tax payable 18 - 4,660 Lease liabilities 20 914 1,188 Other liabilities 21 3,310 2,674 Provisions 23 4,122 5,042 Total current liabilities 50,390 63,796 Non-current liabilities Borrowings 22 4,375 - Deferred tax liabilities 18 1,970 6,220 Lease liabilities 20 2,117 2,362 Other liabilities 21 - 4,836 Provisions 23 822 814 Total non-current liabilities 9,284 14,232 Total liabilities 59,674 78,028 Net assets 30,449 34,268 Consolidated Statement of Financial Position As at 30 June 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 36 Note 30 Jun 2024 $000 30 Jun 2023 $000 Share capital 24 148,815 148,815 Common control & other reserves 25 (59,261) (59,131) Accumulated losses (59,105) (55,844) Non-controlling interest - 428 Total equity 30,449 34,268 The accompanying notes form part of these financial statements. Consolidated Statement of Changes in Equity For the financial year ended 30 June 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 37 Share Capital $000 Common control & other reserves $000 Accumulated losses $000 Non- controlling Interest $000 Total $000 For the year ended 30 June 2024 Balance at 1 July 2023 148,815 (59,131) (55,844) 428 34,268 Profit for the year - - 1,350 - 1,350 Other comprehensive income for the year - - - - - Total comprehensive income for the year - - 1,350 - 1,350 Dividends paid - - (5,039) - (5,039) Share based payment reserve - (130) - - (130) Impact of change in ownership of consolidated entities - - 428 (428) - Balance at 30 June 2024 148,815 (59,261) (59,105) - 30,449 For the year ended 30 June 2023 Balance at 4 July 2022 148,815 (59,261) (57,999) (16) 31,539 Profit for the year - - 10,794 608 11,402 Other comprehensive income for the year - - - - - Total comprehensive income for the year - - 10,794 608 11,402 Dividends paid - - (8,639) (278) (8,917) Share based payment reserve - 130 - - 130 Non-controlling interest on acquisition of Linc - - - 114 114 Balance at 30 June 2023 148,815 (59,131) (55,844) 428 34,268 The accompanying notes form part of these financial statements. Consolidated Statement of Cash Flows For the financial year ended 30 June 2024 ASHLEY SERVICES GROUP ANNUAL REPORT 2024 38 Note 30 Jun 2024 $000 30 Jun 2023 $000 Operating activities Receipts from customers 624,160 608,658 Payments to suppliers and employees (612,678) (580,152) Interest received 200 31 Interest paid (2,156) (1,640) Income taxes paid (5,995) (4,099) Net cash from operating activities 28 3,531 22,798 Investing activities Payments for property, plant and equipment (2,744) (3,167) Payments for intangibles - (142) Proceeds from sale of property, plant and equipment 243 95 Loans from/(to) associated entities 1,654 (2,781) Payments for businesses, net of cash acquired 21 (2,941) (8,688) Net cash used in investing activities (3,788) (14,683) Financing activities Net proceeds from external borrowings 4,387 2,884 Repayment of leasing liabilities (1,474) (1,302) Dividends paid (5,039) (8,916) Net cash used in financing activities (2,126) (7,334) Net increase/(decrease) in cash and cash equivalents (2,383) 781 Cash and cash equivalents at beginning of the financial year 2,520 1,739 Cash and cash equivalents at end of the financial year 7 137 2,520 The accompanying notes form part of these financial statements. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 39 Table of Contents 1. MATERIAL ACCOUNTING POLICIES --------------------------------------------------------------------------- 41 2. REVENUE AND OTHER INCOME ------------------------------------------------------------------------------- 47 3. EXPENSES ----------------------------------------------------------------------------------------------------------- 48 4. AUDITOR’S REMUNERATION ---------------------------------------------------------------------------------- 48 5. INCOME TAX EXPENSE ------------------------------------------------------------------------------------------ 49 6. KEY MANAGEMENT PERSONNEL DISCLOSURES ---------------------------------------------------------- 49 7. CASH AND CASH EQUIVALENTS ------------------------------------------------------------------------------- 50 8. TRADE AND OTHER RECEIVABLES ---------------------------------------------------------------------------- 50 9. CONTRACT ASSETS ----------------------------------------------------------------------------------------------- 50 10. OTHER ASSETS ---------------------------------------------------------------------------------------------------- 51 11. PROPERTY, PLANT AND EQUIPMENT ------------------------------------------------------------------------ 51 12. LOANS TO ASSOCIATED ENTITIES ---------------------------------------------------------------------------- 52 13. DETAILS OF ASSOCIATED ENTITIES --------------------------------------------------------------------------- 52 14. INVESTMENT IN ASSOCIATED ENTITIES --------------------------------------------------------------------- 53 15. RIGHT-OF-USE ASSETS ------------------------------------------------------------------------------------------ 53 16. INTANGIBLE ASSETS --------------------------------------------------------------------------------------------- 54 17. IMPAIRMENT ------------------------------------------------------------------------------------------------------ 55 18. TAX BALANCES ---------------------------------------------------------------------------------------------------- 58 19. TRADE AND OTHER PAYABLES -------------------------------------------------------------------------------- 59 20. LEASE LIABILITIES ------------------------------------------------------------------------------------------------- 59 21. OTHER LIABILITIES------------------------------------------------------------------------------------------------ 60 22. BORROWINGS ----------------------------------------------------------------------------------------------------- 61 23. PROVISIONS ------------------------------------------------------------------------------------------------------- 61 24. SHARE CAPITAL --------------------------------------------------------------------------------------------------- 62 25. COMMON CONTROL AND OTHER RESERVES -------------------------------------------------------------- 63 26. EARNINGS PER SHARE ------------------------------------------------------------------------------------------- 64 27. SEGMENT INFORMATION -------------------------------------------------------------------------------------- 65 28. CASH FLOW INFORMATION ----------------------------------------------------------------------------------- 66 29. FAIR VALUE MEASUREMENT ---------------------------------------------------------------------------------- 67 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 40 30. CONTROLLED GAINED OVER ENTITIES ---------------------------------------------------------------------- 69 31. CONTROLLED ENTITIES AND ASSOCIATES ------------------------------------------------------------------ 69 32. PARENT ENTITY DISCLOSURES -------------------------------------------------------------------------------- 71 33. DEED OF CROSS GUARANTEE --------------------------------------------------------------------------------- 72 34. RELATED PARTY TRANSACTIONS ----------------------------------------------------------------------------- 75 35. SECURED AND CONTINGENT LIABILITIES ------------------------------------------------------------------- 75 36. FINANCIAL INSTRUMENTS ------------------------------------------------------------------------------------- 75 37. EVENTS AFTER THE REPORTING DATE ---------------------------------------------------------------------- 78 38. DIVIDENDS --------------------------------------------------------------------------------------------------------- 78 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 41 1. MATERIAL ACCOUNTING POLICIES a. General information The financial statements for the financial year ended 30 June 2024 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. b. Statement of compliance The consolidated financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001 and Australian Accounting Standards adopted by the Australian Accounting Standards Board. The consolidated financial statements of the Group also comply with International Financial Reporting Standards (‘IFRS’) adopted by the International Accounting Standards Board. The Group is a for-profit entity for the purposes of preparing the financial statements. The consolidated financial statements were authorised for issue by the Board of Directors on 29 August 2024. 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. 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 The Group adopted all of the new, revised or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period. During the current reporting period the Group adopted AASB 2021-6 Amendments to Australian Accounting Standards - Disclosure of Accounting Policies: Tier 2 and Other Australian Accounting Standards. The application of these amendments did not have a material impact on the Group's financial statements but has changed the disclosure of accounting policy information in the financial statements. There were no other Accounting Standards and Interpretations adopted during the current reporting period that had a significant impact on the financial performance or position of the Group. 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 30 June 2024 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. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 42 g. 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 customer, the Group undertakes the following: i. Identifies the contract with a customer ii. Identifies the performance obligations in the contract iii. Determines the transaction price which considers estimates of variable 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 v. Recognises revenue when, or as, each performance obligation is satisfied in a manner that depicts the transfer to the customer of the services promised. All revenue is stated net of the amount of GST. Labour hire revenue Labour hire revenue comprises the sourcing, engagement and placing of both temporary and permanent contractors. The 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 therefore, accounted for as a single performance obligation. As explained in accounting policy Note m. “Significant management judgement in Applying 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. 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 rendered using the percentage of completion method that depicts the transfer to the customer of the services rendered. Other income Other income primarily includes State funding employer rebates earned in relation to specified categories of individuals. h. Income tax Tax consolidation Ashley Services Group Limited and its wholly owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation legislation. Each entity in the group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘standalone taxpayer’ approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to head entity. The group notified the Australian Taxation Office that it has formed an income tax consolidation group to apply from 1 July 2003. The income tax consolidated group has entered a tax funding arrangement whereby each company in the Group contributes to the income tax payable by the Group in proportion to their contributions to the Group’s taxable income. Differences between the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution, to the head entity. i. Contract assets Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group is yet to Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 43 establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment purposes. j. Property, plant and equipment 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 Depreciation rate Computer equipment 20 - 33% Office equipment 20 - 33% Furniture and fittings 10% Motor vehicles 14 - 25% Training equipment 33% Leasehold improvements 20 - 50% In the case of leasehold improvements, expected useful lives are determined by reference to comparable owned assets or over the term of the lease, if shorter. k. Intangible assets Goodwill Goodwill is initially recognised as the difference between the fair value of consideration, and the fair value of net assets acquired less any accumulated impairment losses. The value of goodwill is recognised on acquisition of the business. The Group adopts the full goodwill method. The fair value of the interests in the business is determined using valuation techniques which make the maximum use of market information where available. Under this method, goodwill attributable to the interests of the business is recognised in the financial statements. Other intangibles Intangibles acquired by the Group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to the profit or loss on a straight-line basis over the estimated useful life. Estimated useful life of intangibles is as follows: Customer relationships 5-10 years Licenses 5 years Intellectual property - Course material 5-7 years Intangible assets, such as Brands, which are deemed to have an indefinite useful life are not amortised, but are assessed for impairment annually, within the CGU to which they are attributed. Where impairment is recognised, it is recorded in the profit or loss in the period the impairment is identified. l. Impairment of assets At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include considering external sources of information and internal sources of information 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. Impairment testing is performed at least annually for goodwill and intangible assets with indefinite lives. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 44 m. Significant management judgement in applying accounting policies 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 The main area of judgement 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 a key judgement made by management. Management has undertaken a formal assessment of what constitutes the CGUs, by identifying the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets, being Training, Labour Hire, Linc and OPW. Recognition of deferred tax assets The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Group’s future taxable income against which the deferred tax assets can be utilised. 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. Business Combinations Business combinations are initially accounted for on a provisional basis. The fair value of assets acquired, liabilities and contingent liabilities assumed are initially estimated by the Group taking into consideration all available information at the reporting date. Fair value adjustments on the finalisation of the business combination accounting is retrospective, where applicable, to the period the combination occurred and may have an impact on the assets and liabilities, depreciation and amortisation reported. Impairment In assessing 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 17. Useful lives of depreciable assets Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utility of certain software and IT equipment. Allowance for expected credit losses The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 45 expected credit loss rate for each group. These assumptions include recent sales experience and historical collection rates. Long service leave provisions In determining the provision for employees’ long service leave, consideration is given to the probability an employee may not satisfy vesting requirements. In doing this, management considers the likelihood of employees reaching a qualifying period of service and adjust the valuation for these estimated probabilities. Long term incentive plan In determining the provision and annual accounting expense for senior management’s long term incentive plan, the Performance Rights issued were valued using the share price on 30 March 2023 (the date upon which Shareholders approved the LTI plan and the issuance of Performance Rights by ASG), discounted using Black Scholes modelling, which essentially discounts value for future dividends receivable by ordinary shareholders, but not attributable to the unvested Performance Rights. 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 other factors. In determining the worker compensation insurance provision (included 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. n. Share-based payments Equity-settled and cash-settled share-based compensation benefits are provided to employees. Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash is determined by reference to the share price. The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option, together with non- vesting conditions that do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No account is taken of any other vesting conditions. The cost of equity-settled transactions is recognised as an expense with a corresponding increase in equity over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous periods. The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows: ▪ during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the expired portion of the vesting period. ▪ from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the reporting date. All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 46 transactions is the cash paid to settle the liability. Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to market conditions are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are satisfied. If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value of the share-based compensation benefit as at the date of modification. If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited. If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award is treated as if they were a modification. o. Dividends A liability is recognised for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at balance date. p. Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, after deducting any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the 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. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 47 2. REVENUE AND OTHER INCOME 2024 $000 2023 $000 Operating activities: Labour hire revenue 538,287 533,228 Training revenue 18,251 15,991 556,538 549,219 Other income: Interest received 200 31 Sundry income 116 56 316 87 a. Disaggregation of revenue The disaggregation of revenue from contracts with customers is as follows: 2024 Labour Hire $000 Training $000 Total $000 Revenue From external customers 538,287 18,251 556,538 Timing of revenue recognition Services transferred over time 529,146 18,251 547,397 Services transferred at a point in time 9,141 - 9,141 538,287 18,251 556,538 2023 Labour Hire $000 Training $000 Total $000 Revenue From external customers 533,228 15,991 549,219 Timing of revenue recognition Services transferred over time 519,146 15,991 535,137 Services transferred at a point in time 14,082 - 14,082 533,228 15,991 549,219 All revenue is derived from Australia for the financial years ended 30 June 2024 and 30 June 2023. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 48 3. EXPENSES Profit before income tax from continuing operations includes the following specific expenses: 2024 $000 2023 $000 Share-based payment expense Share-based payment expense (130) 130 Depreciation Motor vehicles 611 452 Office equipment 537 413 Leasehold improvements 298 156 Land and buildings right-of-use assets 1,339 1,232 2,785 2,253 Amortisation Customer contracts and relationships 1,012 812 Course material - 94 1,012 906 Finance costs Interest and finance charges paid/payable on borrowings 1,804 958 Interest and finance charges paid/payable on lease liabilities 93 97 Bank fees 504 591 2,401 1,646 Impairment Expense Linc customer relationship (see note 17) 1,800 - Linc goodwill (see note 17) 2,576 - 4,376 - 4. AUDITOR’S REMUNERATION 2024 $ 2023 $ Auditor of the parent entity Audit and review of financial reports under the Corporations Act 2001 - HLB Mann Judd Assurance (NSW) Pty Ltd 231,000 229,500 Total Remuneration 231,000 229,500 Other entities In addition to the above, the related entities detailed in Note 31 have also paid fees to the auditor(s) as follows: Audit of financial reports - HLB Mann Judd Assurance (NSW) Pty Ltd 94,500 103,000 94,500 103,000 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 49 5. INCOME TAX EXPENSE a. Components of tax expense 2024 $000 2023 $000 Current tax expense 981 10,624 Deferred tax – origination and reversal of temporary differences 900 (5,863) Under / (over) provision of tax in prior year (92) (238) Income tax expense 1,789 4,523 b. Reconciliation of prima facie tax on profit from ordinary activities to income tax expense 2024 $000 2023 $000 Net profit before tax from continuing operations 3,139 15,925 Prima facie tax expense on net profit from ordinary activities before income tax at 30% (FY23: 30%) 942 4,777 Add / (less) Tax effect of: – Entertainment 15 20 – Other (6) 22 – Impairment 1,312 (58) – Fair value gain on redemption liabilities (343) - – Share based payment reserve (39) - – Under/(Over) provision of tax in prior year (92) (238) Income tax expense 1,789 4,523 The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period. 6. KEY MANAGEMENT PERSONNEL DISCLOSURES a. Key management personnel compensation for the year was as follows: 2024 $ 2023 $ Short-term employee benefits 1,523,282 1,908,275 Post-employment benefits 104,800 96,777 Long-term employee benefits (129,560) 129,560 Total 1,498,522 2,134,612 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 12 to 21, Tables 5 to 15. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 50 7. CASH AND CASH EQUIVALENTS 2024 $000 2023 $000 Cash on hand 5 2 Cash at bank 132 2,518 137 2,520 8. TRADE AND OTHER RECEIVABLES 2024 $000 2023 $000 Current Trade receivables 38,335 45,060 Allowance for expected credit losses (253) (346) Other receivables 7,440 12,436 45,522 57,150 a. Ageing of trade receivables (before allowing for impairment of receivables) at year end is detailed below 2024 $000 2023 $000 Current 33,262 37,774 Past due 0 – 30 days (not considered impaired) 2,863 3,830 Past due 31 – 60 days (not considered impaired) 1,000 1,901 Past due 60+ days (not considered impaired) 957 1,209 Past due 60+ days (considered impaired (b)) 253 346 38,335 45,060 b. The movement in the allowance for expected credit losses in respect of trade receivables is detailed below 2024 $000 2023 $000 Balance at beginning of year 346 599 Increase in allowance recognised in profit or loss 185 199 Amounts written-off (278) (452) Balance at end of year 253 346 9. CONTRACT ASSETS 2024 $000 2023 $000 Current Contract assets 2,410 1,417 2,410 1,417 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 51 a. Reconciliation of contract assets 2024 $000 2023 $000 Opening balance 1,417 777 Payments received (13,539) (10,560) Accruals 14,532 11,200 Closing balance 2,410 1,417 10. OTHER ASSETS 2024 $000 2023 $000 Current Prepayments 3,565 1,233 Deposits 21 - Bank guarantee1 16 84 3,602 1,317 Non-current Loans from related parties - 81 Deposits 224 225 Bank guarantee1 67 - 291 306 Note: 1. As at balance date the Group had bank guarantees of $58,864 (2023: $66,219) relating to property leases. The $84,004 (2023: $84,004) represents a restricted bank account to cover the Group’s total available guarantee facility with BankWest of $84,004 (2023: $84,004). 11. PROPERTY, PLANT AND EQUIPMENT 2024 $000 2023 $000 Motor vehicles Cost 4,785 3,783 Accumulated depreciation (1,464) (1,179) 3,321 2,604 Office equipment Cost 4,750 5,651 Accumulated depreciation (3,421) (4,451) 1,329 1,200 Leasehold improvements Cost 2,578 2,070 Accumulated depreciation (1,919) (1,635) 659 435 Capital works in progress Cost 2 17 2 17 Total property, plant and equipment 5,311 4,256 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 52 a. Movement in carrying amounts of property, plant and equipment 2024 Motor vehicles $000 Office equipment $000 Leasehold improvements $000 Capital work in progress $000 Total $000 Balance at 1 July 2023 2,604 1,200 435 17 4,256 Additions/(transfers) 1,538 679 542 (15) 2,744 Disposals (210) (13) (20) - (243) Depreciation expense (611) (537) (298) - (1,446) Balance at 30 June 2024 3,321 1,329 659 2 5,311 2023 Motor vehicles $000 Office equipment $000 Leasehold improvements $000 Capital work in progress $000 Total $000 Balance at 4 July 2022 686 1,018 307 39 2,050 Additions/(transfers) 2,267 629 293 (22) 3,167 Additions through business combinations 135 20 - - 155 Disposals (33) (54) (8) - (95) Depreciation expense (451) (413) (157) - (1,021) Balance at 30 June 2023 2,604 1,200 435 17 4,256 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 22). 12. LOANS TO ASSOCIATED ENTITIES 2024 $000 2023 $000 Current 162 1,744 Non-current 761 999 923 2,743 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 lending to fund the working capital requirements of the associated entity to 30 June 2024. The loan has no set maturity date, is not secured and is interest bearing at ASG’s borrowing rate, as disclosed in Note 36. $1.7 million was repaid in FY24. 13. DETAILS OF ASSOCIATED ENTITIES Reporting entity’s % holding Contribution to profit/(loss) As at 30 June 2024 % As at 30 Jun 2023 % 2024 $000 2023 $000 Group's aggregate share of associated entities profit/loss before tax: Dardi Munwurro Labour & Traffic Management Pty Ltd 49% 49% (23) 283 Yalagan Infrastructure Pty Ltd 49% 49% (19) (67) EWP Services Pty Ltd 49% 49% (87) 30 Profit/(loss) from ordinary activities before income tax (129) 246 Income tax on operating activities 38 (48) Profit/(loss) from ordinary activities after tax (91) 198 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 53 14. INVESTMENT IN ASSOCIATED ENTITIES 2024 $000 2023 $000 Carrying value of investment in associates 307 398 307 398 2024 EWP Services Pty Ltd $000 Dardi Munwurro Labour and Traffic Management Pty Ltd $000 Yalagan Infrastructure Pty Ltd $000 Total $000 Balance at 1 July 2023 186 259 (47) 398 Share of loss after income tax (61) (17) (13) (91) Balance at 30 June 2024 125 242 (60) 307 2023 EWP Services Pty Ltd $000 Dardi Munwurro Labour and Traffic Management Pty Ltd $000 Yalagan Infrastructure Pty Ltd $000 Total $000 Balance at 4 July 2022 - - - - Acquisition 200 - - 200 Share of profits/(losses) after income tax (14) 259 (47) 198 Balance at 30 June 2023 186 259 (47) 398 15. RIGHT-OF-USE ASSETS 2024 $000 2023 $000 Land and buildings 6,120 6,007 Accumulated depreciation (3,236) (2,646) 2,884 3,361 Note: 1. Additions to the right-of-use assets during the year were $1,004,777 (2023: $1,283,558). 2. The Group leases land and buildings for its offices under agreements of between 1 to 5 years with, in some cases, options to extend. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 54 16. INTANGIBLE ASSETS 2024 $000 2023 $000 Goodwill Cost 82,674 73,212 Acquisition OPW and Linc - 9,462 Accumulated impairment (note 17) (65,050) (62,474) Net carrying value 17,624 20,200 Customer relationships/Licences Cost 9,958 2,062 Acquisition OPW and Linc - 7,896 Accumulated impairment (note 17) (2,717) (918) Accumulated amortisation (2,969) (1,956) Net carrying value 4,272 7,084 Brand names Cost 6,040 4,640 Acquisition OPW - 1,400 Accumulated impairment (note 17) (4,640) (4,640) Net carrying value 1,400 1,400 Intellectual property – course materials Cost 8,701 8,701 Accumulated impairment (note 17) (3,896) (3,896) Accumulated amortisation (4,519) (4,519) Net carrying value 286 286 Total intangible assets 23,582 28,970 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 55 a. Intangible assets – detailed reconciliation 2024 Goodwill $000 Customer Relationships and Licences $000 Brand Names $000 Intellectual Property $000 Total $000 Balance at 1 July 2023 20,200 7,084 1,400 286 28,970 Additions - - - - - Impairment (2,576) (1,800) - - (4,376) Amortisation - (1,012) - - (1,012) Balance at 30 June 2024 17,624 4,272 1,400 286 23,582 2023 Goodwill $000 Customer Relationships and Licences $000 Brand Names $000 Intellectual Property $000 Total $000 Balance at 4 July 2022 10,738 - - 238 10,976 Additions - - - 142 142 Additions through business combinations 9,462 7,896 1,400 - 18,758 Amortisation - (812) - (94) (906) Balance at 30 June 2023 20,200 7,084 1,400 286 28,970 17. IMPAIRMENT a. Impairment The consolidated entity tests whether goodwill and other intangible assets have suffered any impairment on an annual basis, or more frequently, if required. During FY24, following the loss by Linc of its major customer contract, goodwill and customer relationships were fully impaired. Goodwill was written down by $2.576 million to zero, as a non-cash impairment expense. Linc customer relationships were amortised from 1 July 2023 to 31 December 2023 ($0.26 million), with the remaining $1.8 million written off during December 2023 as a non-cash impairment expense. There were no indicators of impairment in relation to either the Labour Hire division (excluding Linc and OPW), Linc, OPW or the Training division at 30 June 2024. Labour Hire division (excluding Linc and OPW) The recoverable amount of the Labour Hire division (excluding Linc and OPW) has been determined based on a value in use calculation. That calculation uses cash flow projections based on financial forecasts approved by management for FY25 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 14 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 30 June 2024) will increase by approximately 1% in FY25. Hours worked with existing customers were 12% below the prior corresponding period in H2 of FY24, due to declining requirements for casual labour across most sectors. Market demand is expected to stabilise, with offsetting additional workers and hours required by new customers secured in FY24. From FY26 to FY29, revenue is forecast to increase at 5% per annum, representing wage inflation and some growth of 1% to 1.5% each year. EBITDA margin (before corporate overhead allocations) is forecast to stabilise at 2%, increasing in FY26 and beyond to 2.2%. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 56 Linc No intangible asset carrying value remains in the Linc cash generating unit (“CGU”) following the impairment of the goodwill and customer relationships. OPW The recoverable amount of OPW has been determined based on a value in use calculation. That calculation uses cash flow projections based on financial forecasts approved by management for FY25 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 15 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 OPW in FY25 will increase by 2% compared with the year- ended 30 June 2024, representing largely expected inflationary increases in underlying cost passed onto customers, a reduction in volumes in berry picking and an offsetting growth in volumes from customers secured primarily in Avocados, Grapes and Citrus. EBITDA margin (before corporate overhead allocations) is forecast to increase to 3.5%, with losses from worker expenses minimised following the recent release of the revised flight matrix. Revenues are forecast to increase 25% to $80 million in FY26, with substantial growth possible with existing and new customers in Citrus and Table Grapes. Long term EBITDA margins are forecast to be 4%, closer to the historic levels of 5%. 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 FY25 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 15 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 be flat in FY25. Additional courses continue to be added to scope and we expect to increase fee for service revenues, but these increases are offset by expected reduced public funding, particularly in Victoria. From FY26 to FY29, revenue increases are forecast to return to 5% per annum, representing to underlying growth and stable public funding. EBITDA margin (before corporate overhead allocations) is forecast to remain at just under 22%. Long term growth rates after the forecast period and discount rates used were as follows: Terminal Growth rates Post-tax discount rates 30 Jun 2024 30 Jun 2023 30 June 2024 30 Jun 2023 Labour Hire (excluding Linc and OPW) 0% 0% 14.0% 12.7% Linc 0% 0% 16.2% 16.2% OPW 0% 0% 15.0% 15.1% Training 0% 0% 15.0% 12.7% The growth rate reflects management’s view of longer-term average growth rates for the respective sectors. The discount rate reflects appropriate adjustments relating to market risk and specific risk factors of each unit. b. Impairment charges As a result of the analysis, all intangible assets within the Linc CGU were written down to zero in FY24. There is no need for any impairment charges in the FY24 results within the other CGUs. The same analysis in the prior year resulted in no impairment charge being recorded in the FY23 results. Movements in the net carrying amount of goodwill and other intangibles are presented in note 16. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 57 The amount of goodwill, brand names and other intangibles remaining by CGU and subject to future impairment testing is as follows: 2024 Goodwill $’000 Customer Relationships/ Licences $’000 Brand Names $’000 Intellectual Property $’000 Total $’000 Training 1,654 - - 286 1,940 Labour Hire (excluding Linc and OPW) 9,084 - - - 9,084 Linc - - - - - OPW 6,886 4,272 1,400 - 12,558 Total 17,624 4,272 1,400 286 23,582 2023 Goodwill $’000 Customer Relationships/ Licences $’000 Brand Names $’000 Intellectual Property $’000 Total $’000 Training 1,654 - - 286 1,940 Labour Hire (excluding Linc and OPW) 9,084 - - - 9,084 Linc 2,576 2,056 - - 4,632 OPW 6,886 5,028 1,400 - 13,314 Total 20,200 7,084 1,400 286 28,970 c. Sensitivity analysis Management has also run various sensitivity scenarios, primarily reviewing sensitivity of outcomes to FY25 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 Impairment $’000 Training CGU $’M Impairment $’000 Sustainable EBITDA margin; +/- $0.5 million each CGU +/-2.5 - +/-2.3 - 1% increase or decrease in long term growth rate +/-0.7 - +/-0.4 - 1% increase or decrease in post-tax discount rate +/-2.1 - +/-0.8 - Change in VIU Linc CGU $’M Impairment $’000 OPW CGU $’M Impairment $’000 Sustainable EBITDA margin; +/- $0.5 million each CGU n/a - +/-2.4 (1.9) 1% increase or decrease in long term growth rate n/a - +/-0.5 - 1% increase or decrease in post-tax discount rate n/a - +/-1.0 (0.5) Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 58 18. TAX BALANCES 2024 $000 2023 $000 Current assets Income tax receivable 460 14 Non-current assets Deferred tax assets (a) 4,694 9,844 Current tax liabilities Income tax payable - 4,660 Non-current liabilities Deferred tax liabilities (a) 1,970 6,220 a. Deferred tax assets and liabilities Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows: 2024 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 Current assets Trade, other receivables and other assets (3,492) - - 1,260 (2,232) Contract assets (425) - - (259) (684) Non-current assets Intangible assets (2,125) - - 843 (1,282) Property, plant and equipment (859) - - 356 (503) Right-of-use assets1 - - - 44 44 Current liabilities Trade and other payables 8,267 - - (2,960) 5,307 Provisions 1,791 - - (182) 1,609 2024 Tax loss carried forward Tax losses 467 - - (2) 465 Total 3,624 - - (900) 2,724 Note: 1. This amount is net of lease liabilities. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 59 2023 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 Current assets Trade, other receivables and other assets (3,600) - (628) 736 (3,492) Contract assets (233) - - (192) (425) Non-current assets Intangible assets - - (2,369) 244 (2,125) Property, plant and equipment (142) - (47) (670) (859) Right-of-use assets1 40 - - (40) - Current liabilities Trade and other payables 2,384 - 825 5,058 8,267 Provisions 1,399 - 121 271 1,791 2023 Tax loss carried forward Tax losses 11 - - 456 467 Total (141) - (2,098) 5,863 3,624 19. TRADE AND OTHER PAYABLES 2024 $000 2023 $000 Current Trade payables 5,518 5,550 Accrued expenses 9,893 9,570 GST payable 4,556 5,846 Workers’ compensation - 4,211 Sundry creditors 13,876 16,866 33,843 42,043 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. 20. LEASE LIABILITIES 2024 $000 2023 $000 Current 914 1,188 Non-current 2,117 2,362 3,031 3,550 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 60 21. OTHER LIABILITIES 2024 $000 2023 $000 Current OPW Deferred Consideration payable October 2024 2,975 1,838 Redemption liability CCL 335 836 Other liabilities (Current) 3,310 2,674 Non-current Redemption liability CCL - 1,137 Redemption liability Linc - 636 OPW Deferred consideration payable October 2024 - 3,063 Other liabilities (Non-current) - 4,836 Redemption Liability CCL The redemption liability CCL is a Put Option which represented a contractual obligation to purchase the remaining non-controlling interests in the CCL Group and originated from a previous business combination to acquire the CCL Group. The Put Option was exercised on 30 June 2023, with ASH acquiring the remaining 20% of the CCL Group on 14 July 2023. The purchase consideration for the 20% interest is payable in two instalments, the first in October 2023 (based upon the actual audited FY23 EBITDA) and the final instalment in October 2024 (based upon the actual audited FY24 EBITDA). The payment in October 2023 was $0.886 million. Based upon the actual FY24 results, the remaining redemption liability will be $0.335 million. $0.752 million was credited to profit in FY24, as fair value gain, representing the reduced payments required versus the original estimated redemption liability of $1.973 million. Redemption Liability Linc The redemption liability Linc was a Put Option which represented a contractual obligation to purchase the remaining non-controlling interest and originates from the current year business combination to acquire Linc. The liability was a financial liability and was measured at the present value of the redemption amount or the put option consideration amount in accordance with the underlying Linc Share Sale and Purchase Agreement. On 31 January 2024, the Ashley Services Group acquired the remaining 25% of Linc for consideration of $0.244 million, representing 25% of the net assets of Linc on that date or other entitlements foregone by minority shareholders. The prior period redemption liability of $0.636 million was reduced to the amount paid on 31 January 2024, resulting in a $0.392 million credit to profit in the period. OPW Deferred Consideration The OPW purchase price was determined based upon the higher of the actual EBITDA for FY23 or $3.4 million normalised annual EBITDA. Payment takes place in three instalments: i) The initial completion payment of $7.1 million; ii) A second payment payable in October 2023, bringing cumulative payments to 75% of total purchase price; and iii) A third payment payable in October 2024, representing the final 25% of the purchase price. The third payment may be reduced if revenue for OPW for FY24 falls below $60 million. During FY24, the second instalment payment of $1.8m was settled. Revenue for OPW for FY24 exceeded $60 million and the third instalment of $2.975 million will be paid in October 2024. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 61 22. BORROWINGS 2024 Available facility $000 Facility used $000 Remaining facility $000 Invoice Financing 25,000 4,201 20,799 Acquisition facility 15,000 8,375 6,625 Balance at 30 June 2024 40,000 12,576 27,424 2023 Available facility $000 Facility used $000 Remaining facility $000 Invoice Financing 25,000 3,349 21,651 Acquisition facility 18,000 4,840 13,160 Balance at 30 June 2023 43,000 8,189 34,811 Facilities The acquisition facility expires 28 December 2025, with the capacity reducing progressively over a term of 3 years, with repayment requirements of $1 million per quarter. $4 million of the facility has been classified as a current liability along with the $4.2 million of the invoice facility. The Westpac facilities are subject to a Security which includes, but is not limited to the following: • 1st ranking General Security Agreement over the assets and undertakings of the Borrower and its Guarantors (Ashley Services Group and its trading controlled entities); • A fully interlocking guarantee and indemnity 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 and CCLTS Group Pty Ltd for Invoice Finance Facility collections. As at 30 June 2024, the combined facilities were drawn to $12.576 million (30 June 2023: $8.189 million). 23. PROVISIONS 2024 $000 2023 $000 Current Employee benefits (a) 4,090 5,004 Make good provisions for leases 32 38 Total 4,122 5,042 Non-current Employee benefits (a) 707 685 Make good provisions for leases 115 129 Total 822 814 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 62 a. Reconciliation of employee provisions 2024 $000 2023 $000 Opening balance 5,689 4,431 Acquired through business combination - Linc - 251 Acquired through business combination - OPW - 402 Less: leave taken during the year (6,178) (5,014) Add: leave provided for during the year 5,286 5,619 Closing balance 4,797 5,689 24. SHARE CAPITAL The Company does not have any share options on issue as at the date of this report. Details of share capital of the Group are as follows: 2024 $000 2023 $000 143,975,904 (FY23: 143,975,904) fully paid ordinary shares 154,234 154,234 Share issue costs (5,419) (5,419) Share capital 148,815 148,815 7,558,734 (FY23: 7,558,734) performance rights - - Performance Rights - - a. Ordinary shares Ordinary shares confer on their holders the right to participate in dividends declared by the Board. Ordinary shares confer on their holders an entitlement to vote at any general meeting of the Company. b. Performance Rights On 30th March 2023, Group granted and issued 7,558,734 Performance rights to two key management employees as detailed in the Remuneration Note within the Directors’ Report – tables 5 and 7. Tranche 1, representing 4,535,240 Performance Rights were granted with a fair value of 50.5 cents per Right. Tranche 2, representing 3,023,494 Performance Rights were granted with a fair value of 33.9 cents per Right. Management have assessed the probability of the performance hurdles for Tranche 1 and Tranche 2 being met and determined that vesting is unlikely. No expense has therefore been recognised in FY24 and the prior period expense of $0.129 million has been credited to profit in the year ended 30 June 2024. c. Capital Risk Management The consolidated entity’s objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost of capital. Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated as total borrowings less cash and cash equivalents. In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt. The consolidated entity is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk management decisions. There have been no events of default on the financing arrangements during the financial year. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 63 25. COMMON CONTROL AND OTHER RESERVES 2024 $000 2023 $000 Common control reserve (59,261) (59,261) Share-based payments reserve - 130 Common control and other reserves (59,261) (59,131) 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 Australian Traffic & Labour Services Pty Ltd. Share-based payments reserve A Long-Term Incentive plan has been established by the Group and approved by shareholders at a general meeting, whereby the Group may, at the discretion of the Board of Directors, grant performance rights over ordinary shares in the company to certain key management personnel of the Group. The performance rights are issued for nil consideration and are granted in accordance with performance guidelines established by the Board of Directors. On 22 May 2023, senior executives received an LTI award of 7,588,734 performance rights, the vesting of which is subject to the performance conditions outlined below. The number of rights awarded was approved by shareholders at an Extraordinary General Meeting held on 30 Match 2023. Each performance right converts into one share of ASH if the vesting criteria are met, at no cost to the participants. Those performance rights have been split into 2 tranches: ▪ Tranche 1: 4,535,240 performance rights - 60% of the LTI grant - PBT target is $24.5 million, excluding any intangible amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost relating the LTI performance Rights Plan. ▪ Tranche 2: 3,023,494 performance rights - 40% of the LTI grant - PBT target is $36.5 million, excluding any intangible amortisation associated with acquisitions after 1 July 2022 or any accounting expense or cost relating the LTI performance Rights Plan. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 64 Those performance rights have been valued by using a Black-Scholes methodology, with inputs as follows: Grant date Share price at grant date Exercise price Expected life Dividend yield Risk-free interest rate Fair value at grant date Tranche 1 30/03/2023 $0.72 $nil 4.3 8.3% 3.1% $0.505 Tranche 2 30/03/2023 $0.72 $nil 9.3 8.3% 3.4% $0.339 Total share-based payments expense recorded in the profit or loss for the year ended 30 June 2023 amounted to $0.13 million. During FY24, due to the profit decline and after assessing prevailing market conditions, management have re- assessed the probability of the performance hurdles for Tranche 1 and Tranche 2 being met and determined that vesting is unlikely. No accounting expense has been recognised in FY24 and the prior period expense of $0.13 million has been credited to profit in the year ended 30 June 2024. 26. EARNINGS PER SHARE 2024 2023 Profit after tax for the year attributable to shareholders ($’000) 1,350 10,794 Weighted number of ordinary shares outstanding during the year used in calculating basic earnings per share (EPS) 143,975,904 143,975,904 Weighted number of ordinary shares outstanding during the year used in calculating diluted earnings per share (EPS) 151,534,638 145,896,908 Basic earnings per share (cents) 0.94 7.50 Diluted earnings per share (cents) 0.89 7.40 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 65 27. SEGMENT INFORMATION The Group’s management identifies two operating segments, Labour Hire and Training, representing the main products and services provided by the Group. During the financial year ended 30 June 2024, 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: 2024 Labour Hire $000 Training $000 Total $000 Revenue From external customers 538,287 18,251 556,538 Segment revenue 538,287 18,251 556,538 Other income 141 2 143 Employment costs (519,025) (12,244) (531,269) Depreciation and amortisation expense (1,586) (1,053) (2,639) Finance costs (517) (31) (548) Other expenses (5,873) (1,997) (7,870) Segment Profit 11,427 2,928 14,355 Fair value gain on redemption liabilities 1,144 Impairment Expense (4,376) Unallocated items (7,984) Profit before income tax 3,139 Income tax expense (1,789) Profit after income tax 1,350 Other comprehensive income - Total comprehensive income for the year 1,350 2023 Labour Hire $000 Training $000 Total $000 Revenue From external customers 533,228 15,991 549,219 Segment revenue 533,228 15,991 549,219 Other income 82 2 84 Employment costs (504,455) (10,579) (515,034) Depreciation and amortisation expense (1,256) (978) (2,234) Finance costs (615) (31) (646) Other expenses (6,985) (1,693) (8,678) Segment Profit 19,999 2,712 22,711 Unallocated items (6,786) Profit before income tax 15,925 Income tax expense (4,523) Profit after income tax 11,402 Other comprehensive income - Total comprehensive income for the year 11,402 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. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 66 a. Information about major customers Included in revenues from external customers are revenues of $243.4 million (2023: $217.1 million) which arose from sales to 3 (2023: 3) of the Group’s customers whose individual revenue exceeds 10% of total revenue in the Labour Hire segment. Sales to these 3 customers were $89.3 million, $85.0 million and $69.1 million respectively (2023: $92.1 million, $63.5 million and $61.5 million respectively). There are no customers whose individual revenue exceeded 10% of total revenue in the Training segment in either financial year. 28. CASH FLOW INFORMATION Reconciliation of cash flow from operations to profit after income tax 2024 $000 2023 $000 Profit for the year 1,350 11,402 Cash flows excluded from profit attributable to operating activities Adjustments for non-cash items: - Depreciation and amortisation expense 3,797 3,159 - Expected credit losses 185 199 - Lease liability non-cash expense 93 97 - LTI non-cash expense, share based payment reserve (130) 130 - Share of associated company profits 91 (198) - Provision against associated company debts 166 - Fair value gain on redemption liabilities (1,144) - - Impairment expense 4,376 - Changes in assets and liabilities - Decrease/(increase) in trade and other receivables 11,443 4,190 - Decrease/(increase) in contract assets (993) (641) - Decrease/(increase) in other assets (2,270) 1,429 - Decrease/(increase) in deferred tax assets 5,150 (5,686) - Decrease/(increase) in current tax receivable (446) 1,627 - (Decrease)/increase in trade and other payables (8,202) 1,952 - (Decrease)/increase in provisions (911) 535 - (Decrease)/increase in other liabilities (114) 121 - (Decrease)/increase in current tax liabilities (4,660) 4,660 - (Decrease)/increase in deferred tax liabilities (4,250) (178) Net cash from operating activities 3,531 22,798 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 67 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 30 June 2024 Level 1 $000 Level 2 $000 Level 3 $000 Total $000 Assets: Total Assets - - - - Liabilities: Redemption liability - - 335 335 OPW deferred consideration - - 2,975 2,975 Total Liabilities as at 30 June 2024 - - 3,310 3,310 Consolidated 30 June 2023 Level 1 $000 Level 2 $000 Level 3 $000 Total $000 Assets: - - - - Total Assets - - - - Liabilities: Redemption liability - - 2,609 2,609 OPW deferred consideration - - 4,901 4,901 Total Liabilities as at 30 June 2023 - - 7,510 7,510 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 3 The redemption liabilities arose: 1. as a result of a previous business combination for the CCL Group. The liability was originally valued at the present value of the redemption amount for the put option consideration amount in accordance with the underlying CCL Group Share Sale and Purchase Agreement. The Put Option was exercised on 30 June 2023, with ASH acquiring the remaining 20% of the CCL Group on 14 July 2023. The purchase consideration for the 20% interest is payable in two instalments, with the first payment of $0.886 million (based upon the actual audited FY23 EBITDA) made in October 23. Based upon the actual FY24 results, the remaining redemption liability will be $0.335 million. $0.749 million was credited to profit in FY24, as fair value gain, representing the reduced payments required versus the original estimated redemption liability of $1.973 million. 2. as a result of the business combination in the current year for Linc. The liability was originally valued at the present value of the redemption amount for the put option consideration amount in accordance with the underlying Linc Share Sale and Purchase Agreement, also taking into account the likelihood that put Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 68 option conditions may or may not be met. The Group acquired the final 25% interest for consideration of $0.244 million on 31 January 2024, representing 25% of the net assets of Linc on that date or other entitlements foregone by minority shareholders. No redemption liability remains at 30 June 2024. The deferred consideration has arisen: i) The OPW purchase price was determined based upon the higher of actual EBITDA for FY23 or $3.4 million normalised annual EBITDA. Payment takes place in three instalments: a. The initial completion payment of $7.1 million; b. A second payment of $1.8 million paid in October 2023, bringing cumulative payments to 75% of total purchase price; and c. A third payment payable in October 2024, representing the final 25% of the purchase price. The third payment may be reduced if revenue for OPW for FY24 falls below $60 million. Level 3 assets and liabilities Movements in level 3 assets and liabilities during the current year are set out below: Consolidated 30 June 2024 Redemption Liability $000 Deferred Consideration $000 Total $000 Balance at 30 June 2023 2,609 4,901 7,510 Acquisition of OPW - (1,811) (1,811) Acquisition remaining 20% of CCL (886) - (886) Acquisition remaining 25% of Linc (244) - (244) Fair value adjustment (1,144) (115) (1,259) Balance at 30 June 2024 335 2,975 3,310 The level 3 assets and liabilities unobservable inputs and sensitivity are as follows: Description Unobservable inputs EBITDA Range (weighted average) Sensitivity Redemption liability CCL The put option was exercised in FY23. $0.886 million was paid in October 23 based upon the actual FY23 result and the remainder will be paid in October based upon the actual FY24 result (estimate $0.335 million). 967,686 10% change would increase/decrease fair value by $33,453. Redemption liability Linc The remaining 25% interest in Linc was purchased in FY24 for $0.244 million. No redemption liability remains. n/a n/a Deferred Consideration OPW $3.4 million normalised annual EBITDA. 75% of purchase price was paid by October 23, with the remaining 25% payable in October 24, reduced if FY24 revenues fall below $60 million. FY24 revenues exceeded $60 million, so the October 24 payment will be $2.975 million. n/a Nil. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 69 30. CONTROLLED GAINED OVER ENTITIES There were no acquisitions or business combinations in the current reporting period, other than the acquisition of the remaining 20% interest in the CCL Group and the remaining 25% interest in Linc. Both entities were already controlled entities. 31. CONTROLLED ENTITIES AND ASSOCIATES Set out below are the controlled entities and associates of Ashley Services Group Limited: Country of incorporation 2024 percentage owned % 2023 percentage owned % Action Arndell Park Pty Limited Australia 100 100 Action Botany Pty Limited Australia 100 100 Action James (Qld) Pty Limited Australia 100 100 Action James NSW Pty Limited Australia 100 100 Action James Parramatta Pty Limited Australia 100 100 Action James WA Pty Limited Australia 100 100 Concept Retail NSW Pty Ltd (formerly Action James Western Suburbs Pty Limited) Australia 100 100 Action Job Support Pty Limited Australia 100 100 Action MMX Pty Limited Australia 100 100 Action Workforce ACT Pty Limited Australia 100 100 Action Workforce COL1 Pty Limited Australia 100 100 Action Healthcare Pty Ltd (formerly Action Workforce COS1 Pty Limited) Australia 100 100 Action Workforce COT Pty Limited Australia 100 100 Action Workforce IMT Pty Limited Australia 100 100 Action Workforce NSW Pty Limited Australia 100 100 Action Horticulture Pty Ltd (formerly Action Workforce OS Pty Limited) Australia 100 100 Action Workforce OST Pty Limited Australia 100 100 Action Workforce Pty Limited Australia 100 100 Action Workforce T1 Pty Limited Australia 100 100 Action Workforce T2 Pty Limited Australia 100 100 Action Workforce VER1 Pty Limited Australia 100 100 Action Workforce Victoria Pty Limited Australia 100 100 Action Workforce VM Pty Limited Australia 100 100 Action Workforce VPS Pty Limited Australia 100 100 ADV Services Pty Limited Australia 100 100 ADV2 Pty Limited Australia 100 100 ADV3 Pty Limited Australia 100 100 ADV6 Pty Limited Australia 100 100 Advance Exchange Pty Limited Australia 100 100 Advance GW Pty Limited Australia 100 100 Advance MIX Pty Limited Australia 100 100 Advance Recruitments Pty Limited Australia 100 100 AIVD Holdings Pty Limited Australia 100 100 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 70 Country of incorporation 2024 percentage owned % 2023 percentage owned % ASG Electrical Contracting Pty Ltd Australia 100 100 Ash Pty Limited Australia 100 100 Ashley Institute Holdings Pty Limited Australia 100 100 Australian Institute of Vocational Development Pty Limited Australia 100 100 AWF Training 3 Pty Limited Australia 100 100 BCC Labour Solutions Pty Ltd Australia 100 100 Cantillon Holdings Pty Limited Australia 100 100 CCL Group Holdings Pty Ltd Australia 100 100 CCLTS Group Pty Limited Australia 100 100 College of Innovation and Industry Skills Pty Limited Australia 100 100 Complete Traffic Services (VIC) Pty Ltd Australia 100 80 Concept AWF Pty Limited Australia 100 100 Concept Electrical Resources Pty Ltd Australia 100 100 Concept Employment (Aust) Pty Limited Australia 100 100 Concept Engineering (Aust) Pty Limited Australia 100 100 Total Rail Holdings Pty Ltd (formerly Concept Engineering Contracting Holdings Pty Ltd) Australia 100 100 Total Rail Pty Ltd (formerly Concept Engineering Contracting Pty Ltd) Australia 100 100 Concept Power Pty Ltd Australia 100 100 Concept Project Resources Pty Limited Australia 100 100 Concept Rail Pty Ltd Australia 100 100 Concept Recruitment Specialists Pty Ltd Australia 100 100 Concept Retail Solutions Pty Ltd Australia 100 100 Construction Contract Labour (VIC) Pty Ltd Australia 100 80 Dardi Munwurro Labour and Traffic Management Pty Limited Australia 49 49 DMLT Holdings Pty Limited Australia 100 100 EWPY Holdings Pty Ltd Australia 100 100 EWPY Pty Ltd Australia 100 100 EWP Services Pty Ltd Australia 49 49 Executive Careers Australia Pty Limited Australia 100 100 Global Education and Training Group Pty Limited Australia 100 100 Integracom Holdings Pty Limited Australia 100 100 James Personnel Pty Limited Australia 100 100 James Warehousing Pty Limited Australia 100 100 Linc Personnel Pty Ltd Australia 100 75 Logistics People Pty Limited Australia 100 100 OGR Holdings Pty Limited Australia 100 100 Owen Pacific Workforce Pty Ltd Australia 100 100 Qualitas Education Pty Limited Australia 100 100 Silk Group Holdings Pty Limited Australia 100 100 TBRC Holdings Pty Limited Australia 100 100 The Blackadder Recruitment Company Pty Limited Australia 100 100 The Instruction Company Holdings Pty Ltd Australia 100 100 The Instruction Company Pty Ltd Australia 100 100 Track Safety Australia Pty Ltd Australia 100 100 Tracmin Holdings Pty Limited Australia 100 100 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 71 Country of incorporation 2024 percentage owned % 2023 percentage owned % Tracmin Pty Limited Australia 100 100 Australian Traffic & Labour Services Pty Ltd (formerly VIC Traffic and Labour Solutions Pty Ltd) Australia 100 80 Vocational Training Australia Pty Limited Australia 100 100 Y I Group Holdings Pty Ltd Australia 100 100 Yalagan Infrastructure Pty Ltd Australia 49 49 32. PARENT ENTITY DISCLOSURES a. Financial position 2024 $000 2023 $000 Assets Current assets 26,150 8,764 Non-current assets 44,019 43,870 Total assets 70,169 52,634 Liabilities Current liabilities (408) (5,122) Non-current liabilities (20,790) (10,492) Total liabilities (21,198) (15,614) Net assets 48,971 37,020 Equity Share capital 148,815 148,815 Accumulated losses (99,844) (111,795) Total equity 48,971 37,020 b. Statement of profit or loss and other comprehensive income 2024 $000 2023 $000 Profit/(Loss) for the year 16,988 51,851 Total comprehensive income 16,988 51,851 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 30 June 2024 (30 June 2023: Nil). e. Commitments for expenditure for the Parent entity The Parent entity had Nil committed expenditure as at 30 June 2024 (30 June 2023: Nil). Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 72 33. 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 2024 $000 2023 $000 Revenue 357,934 369,378 Other Income 23 36 Employment costs (345,476) (349,470) Depreciation and amortisation expense (581) (551) Finance costs (55) (235) Other expenses (2,850) (4,002) Profit before income tax 8,995 15,156 Income tax expense (2,771) (2,986) Profit after income tax 6,224 12,170 Other comprehensive Income - - Total comprehensive income for the year 6,224 12,170 Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 73 b. Statement of Financial position Extended Closed Group 2024 $000 2023 $000 Assets Current assets Cash and cash equivalents 51 51 Trade and other receivables 25,554 29,821 Other assets 2,920 316 Income tax receivable 460 - Loans to associated entities 152 1,744 Total current assets 29,137 31,932 Non-current assets Intercompany loans receivable 102,870 125,173 Loans to associated entities - 11 Property, plant and equipment 306 402 Deferred tax assets 2,230 3,599 Right-of-use assets 1,276 1,376 Other assets 36 17 Total non-current assets 106,718 130,578 Total assets 135,855 162,510 Liabilities Current liabilities Trade and other payables 23,667 26,728 Current tax payable - 24,112 Lease liabilities 529 769 Provisions 1,493 1,979 Total current liabilities 25,689 53,588 Non-current liabilities Lease liabilities 815 724 Provisions 360 392 Total non-current liabilities 1,175 1,116 Total liabilities 26,864 54,704 Net assets 108,991 107,806 Equity Share capital 148,815 148,815 Accumulated losses (39,824) (41,009) Total Equity 108,991 107,806 c. Equity – retained profits Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 74 Extended Closed Group 2024 $000 2023 $000 Accumulated losses at the beginning of the financial year (41,009) (44,263) Profit after income tax expense 6,224 12,170 Dividends paid (5,039) (8,916) Accumulated losses at the end of the financial year (39,824) (41,009) d. Contingent liabilities of the Extended Closed Group The Extended Closed Group had no other known material contingent liabilities as at 30 June 2024 (30 June 2023: Nil). e. Commitments for expenditure for the Extended Closed Group The Extended Closed Group had Nil committed expenditure as at 30 June 2024 (30 June 2023: Nil). f. Going Concern and Financial Support 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; ▪ Tracmin Pty Ltd; ▪ The Instruction Company Pty Ltd; ▪ Concept Retail Solutions Pty Ltd; ▪ Adv Services Pty Limited; ▪ Complete Traffic Services (VIC) Pty Ltd; ▪ Concept Recruitment Specialists Pty Limited; ▪ Construction Contract Labour (VIC) Pty Ltd; ▪ The Blackadder Recruitment Company Pty Limited; ▪ Track Safety Australia Pty Ltd; ▪ Australian Traffic & Labour Services Pty Ltd; ▪ Linc Personnel Pty Ltd; and ▪ Owen Pacific Workforce Pty Ltd. The financial support includes but is not limited to the actions as noted below: ▪ not calling on related party loans; ▪ agreeing to any cost re-allocations or management fee re-charges; and ▪ agreeing to debt forgiveness with any related entity. The undertaking remains current until the date on which the directors approve the financial statements of the Group for the financial year ending 30 June 2025. The directors are satisfied that collectively the Group has the financial ability to provide this support. g. Security Offered The Westpac facility (see Note 22) 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); ▪ A fully interlocking guarantee and indemnity 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, Concept Engineering (AUST) Pty Ltd and CCLTS Group Pty Ltd for Invoice Finance Facility collections. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 75 34. RELATED PARTY TRANSACTIONS a. Parent company There is no ultimate parent company for Ashley Services Group Limited. b. Transactions with related entities Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated. Transactions with related parties are as follows: 20241 $ 20231 $ 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 Wales 153,046 147,316 Fees payable to Pratt Partners (of which Ian Pratt is a partner) for taxation services 153,710 53,232 Fees payable to Ron Holland Family Trust (of which Ron Hollands is Trustee) for Company Secretarial Services 30,000 26,025 Note: 1. All amounts as shown are exclusive of GST Loans receivable from related parties are disclosed in Note 12. 35. SECURED AND CONTINGENT LIABILITIES For assets pledged as security for borrowing facilities see Note 22. The Group had no other known contingent liabilities at 30 June 2024 (30 June 2023: Nil). 36. FINANCIAL INSTRUMENTS a. Material accounting policies Details of the material 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. b. Financial risk management objectives The Board of Directors has overall responsibility for the establishment and oversight of the Group’s financial management framework. The Board has an established Audit and Risk Management Committee which is responsible for developing and monitoring the Group’s financial management policies. The 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. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 76 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: 2024 $000 2023 $000 Change in profit Increase in interest rates of 1% (125) (54) Decrease in interest rates of 1% 125 54 Change in equity Increase in interest rates of 1% (125) (54) Decrease in interest rates of 1% 125 54 Credit risk 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. d. Liquidity risk management Ultimate responsibility for liquidity risk management rests with the Managing Director and Board of Directors, who have built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously comparing actual cash flows with forecasts and matching the maturity profiles of financial assets and liabilities. Included in Note 22 is a listing of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 77 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 2024 Weighted average effective interest rate % Within 1 year $000 1 to 5 years $000 Over 5 years $000 Total $000 Cash and cash equivalents n/a 137 - - 137 Trade and other receivables n/a 45,522 - - 45,522 Contract assets n/a 2,410 - - 2,410 Loans to associated entities 5.98% 162 761 - 923 Total 48,231 761 - 48,992 2023 Weighted average effective interest rate % Within 1 year $000 1 to 5 years $000 Over 5 years $000 Total $000 Cash and cash equivalents n/a 2,520 - - 2,520 Trade and other receivables n/a 57,150 - - 57,150 Contract assets n/a 1,417 - - 1,417 Loans to associated entities 5.48% 2,743 - - 2,743 Total 63,830 - - 63,830 Financial liabilities 2024 Weighted average effective interest rate % Within 1 year $000 1 to 5 years $000 Over 5 years $000 Total $000 Trade and other payables n/a 33,843 - - 33,843 Borrowings 6.25% 8,201 4,375 - 12,576 Lease liabilities 3.00% 914 2,117 - 3,031 Other liabilities n/a 3,310 - - 3,310 Total 46,268 6,492 - 52,760 2023 Weighted average effective interest rate % Within 1 year $000 1 to 5 years $000 Over 5 years $000 Total $000 Trade and other payables n/a 42,043 - - 42,043 Borrowings 5.96% 8,189 - - 8,189 Lease liabilities 3.00% 1,188 2,362 - 3,550 Other liabilities n/a 2,674 4,836 - 7,510 Total 54,094 7,198 - 61,292 Fair value of financial instruments Refer to Note 29 for details on the fair value of financial instruments. Notes to the Financial Statements ASHLEY SERVICES GROUP ANNUAL REPORT 2024 78 37. 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 29 August 2024, the Group declared a fully franked final dividend of 0.24 cents in relation to the financial year ended 30 June 2024. 38. DIVIDENDS a. Ordinary shares On 29 August 2024, the Group declared a fully franked final dividend of 0.24 cents in relation to the financial year ended 30 June 2024. With a fully franked interim dividend of 0.5 cents previously declared on 27 February 2024, this brings the full year dividend for the financial year ended 30 June 2024 to a total of 0.74 cents (FY23: 6.0 cents). b. Franking credits 2024 $000 2023 $000 Franking credits available for subsequent financial years based on a tax rate of 30% (2023: 30%) 5,723 4,823 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. ASX Additional Information ASHLEY SERVICES GROUP ANNUAL REPORT 2024 79 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 2024. 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 1,199 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 Number of shareholders Number of shares % 1 – 1,000 216 150,056 0.10 1,001 – 5,000 316 807,964 0.56 5,001 – 10,000 147 1,184,430 0.82 10,001 – 100,000 419 15,153,777 10.53 100,001 and over 101 126,679,677 87.99 Total 1,199 143,975,904 100.00 Unmarketable parcel of shares The number of shareholders holding less than a marketable parcel of Fully Paid Ordinary shares is 340 with a total number of shares held is 316,778. Substantial Shareholders The number of securities held by substantial shareholders and their associates are set out below: Fully Paid Ordinary Shares Name Number % Ross Shrimpton 84,279,030 58.54% Unquoted equity securities There are no unquoted shares. On-market buy-back There is no current on-market buy-back. ASX Additional Information ASHLEY SERVICES GROUP ANNUAL REPORT 2024 80 Largest shareholders Fully paid ordinary shares Details of the 20 largest shareholders of quoted securities by registered shareholding are: Name Number of shares % Mr Ross Shrimpton 80,279,030 55.76% JP Morgan Nominees Australia Pty Limited 4,654,508 3.23% BNP Paribas Nominees Pty Ltd 4,274,241 2.97% Shrimpton Holdings Pty Limited 4,000,000 2.78% Mr Marc Shrimpton 1,500,000 1.04% Super Wide Pty Ltd 1,417,873 0.98% Mr Andrew Douglas Shrimpton 1,115,000 0.77% Dr Anthony Francis Chan 1,102,659 0.77% Velkov Funds Management Pty Ltd 1,100,000 0.76% Mr Peter John Stirling and Mrs Rosalind Verena Sterling 1,000,000 0.69% Stirling Superannuation Pty Ltd 920,000 0.64% Emerald Ruby Pty Ltd 867,830 0.60% HBD Services Pty Ltd 783,817 0.54% Bond Street Custodians Limited 750,000 0.52% HSBC Custody Nominees (Australia) Limited 710,697 0.49% BNP Paribas Nominees Pty Ltd 654,364 0.45% Mr Brenton Fletcher 624,262 0.43% HJN & HJN Superannuation Pty Ltd 609,418 0.42% Mr Garry Anthony John Butler 604,243 0.42% Finclear Services Pty Ltd 603,419 0.42% Total 107,571,361 74.71% Annual General Meeting 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 11.00am on Tuesday 26 November 2024. Shareholders who are unable to attend the meeting are encouraged to complete and return their proxy form that will accompany the notice of meeting. Corporate Directory ASHLEY SERVICES GROUP ANNUAL REPORT 2024 81 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 5 10 Shelley 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 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

Continue reading text version or see original annual report in PDF format above