Table of Contents
Appendix 4E Preliminary Final Report
Corporate Directory
Chairman’s Letter
Chief Executive Officer’s Message
Director’s Report
Auditor’s Independence Declaration
Corporate Governance Statement
Financial Report
General information
Statement of profit or loss and other comprehensive income
Statement of financial position
Statement of changes in equity
Statement of cash flows
Notes to financial statements
Director’s declaration
Independent auditor’s report of the members of Kip McGrath Education Centres Limited
Shareholder information
1
2
3
4
15
16
23
23
24
25
26
27
28
56
57
62
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017 McGrath Edu
ucation Cent
d
tres Limited
Kip M
Appe
Prelim
ndix 4E
minary final
report
1. Com
mpany deta
ails
Name
ABN:
Repo
Previo
e of entity:
rting period:
ous period:
ucation Centr
res Limited
Kip M
73 00
For t
For t
McGrath Edu
03 415 889
he year ende
he year ende
ed 30 June 2
ed 30 June 2
2017
2016
2. Res
sults for ann
nouncemen
nt to the mar
rket
Reve
nues from or
rdinary activi
ities
dow
n
7.3% to
Earni
ngs Before I
nterest, Tax,
, Depreciatio
on and Amort
tisation (EBIT
TDA) up
25.0% to
$'00
00
13,507
2,635
Profit
McGr
from ordinar
rath Educatio
ry activities a
on Centres L
after tax attrib
imited
butable to th
e owners of
Kip
for the year
attributable
to the owner
rs of Kip McG
Grath Educat
tion
res Limited
ends
Profit
Centr
Divide
On 9
declar
total d
August 201
red and will b
distribution w
7, a final div
be paid on 2
will be $630,4
vidend for th
9 Septembe
480.
up
up
19.4%
to
1,436
19.4%
to
1,436
he year end
er 2017 to tho
ded 30 June
ose shareho
2017 of 1.4
lders on the
4 cents per
register at 7
ordinary sha
7pm on 15 Se
are, unfranke
eptember 20
ed, was
017. The
Comm
The p
ments
rofit for the c
consolidated
entity after p
providing for
income tax a
amounted to
o $1,436,000
(30 June 20
016: $1,203,0
000).
Refer
to Chairman
n's report and
d Chief Exec
cutive Officer
r's message
for further co
ommentary.
The fo
McGra
ollowing tabl
ath Educatio
le summaris
on Centres an
es key reco
nd EBITDA.
nciling items
s between st
tatutory prof
fit after tax a
attributable to
o the owners
s of Kip
Reve
nue
EBITD
Less:
Less:
Add:
DA
Depreciatio
Interest exp
Interest inco
n and amorti
pense
me
isation
Profit
Incom
before Incom
me tax expen
me tax expen
nse
nse
Profit
after income
e tax expens
se
3. Net
t tangible as
ssets
Net ta
angible asset
ts per ordina
ary security
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
13
3,507
14,569
2
2,635
(773)
(68)
1
1
,795
(359)
1
,436
2,107
(443)
(69)
4
1,599
(396)
1,203
ing
Report
perio
od
s
Cents
vious
Prev
eriod
pe
ents
Ce
(0.12)
(
(0.97)
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
McGrath Edu
ucation Cent
d
tres Limited
Kip M
Appe
Prelim
ndix 4E
minary final
report
4. Con
ntrol gained
d over entitie
es
Not ap
pplicable.
5. Los
ss of contro
ol over entiti
ies
Not ap
pplicable.
6. Div
vidend reinv
vestment pla
ans
Not ap
pplicable.
Kip
p McG
Grath E
Educat
tion C
entres
s Limited
ABN
N 73 003
415 889
7. Det
tails of asso
ociates and
joint ventur
re entities
Not ap
pplicable.
Ann
nual R
eport -
- 30 Ju
ne 201
7
8. For
reign entitie
es
Detail
ls of origin of
f accounting
standards us
sed in compi
iling the repo
ort:
Not ap
pplicable.
9. Aud
dit qualifica
ation or revie
ew
or qualificat
tion (if any):
been audite
ed and an un
qualified opi
nion has bee
en issued.
Detail
ls of audit/rev
view dispute
The fi
nancial state
ements have
10. At
ttachments
Detail
ls of attachm
:
ments (if any):
The A
Annual Repor
rt of Kip McG
Grath Educat
tion Centres
11. Si
igned
Signe
ed ________
___________
__________
Kip M
Chair
Newc
McGrath
rman
castle
Limited for th
he year ende
ed 30 June 2
2017 is attac
hed.
Date
e: 9 August 2
2017
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip
p McG
Grath E
Educat
tion C
entres
s Limited
ABN
N 73 003
415 889
Ann
nual R
eport -
- 30 Ju
ne 201
7
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Appe
ndix 4E
Prelim
minary final
report
4. Con
ntrol gained
d over entitie
es
Not ap
pplicable.
5. Los
ss of contro
ol over entiti
ies
Not ap
pplicable.
6. Div
vidend reinv
vestment pla
ans
Not ap
pplicable.
7. Det
tails of asso
ociates and
joint ventur
re entities
Not ap
pplicable.
8. For
reign entitie
es
Not ap
pplicable.
Detail
ls of origin of
f accounting
standards us
sed in compi
iling the repo
ort:
9. Aud
dit qualifica
ation or revie
ew
Detail
ls of audit/rev
view dispute
or qualificat
tion (if any):
The fi
nancial state
ements have
been audite
ed and an un
qualified opi
nion has bee
en issued.
The A
Annual Repor
rt of Kip McG
Grath Educat
tion Centres
Limited for th
he year ende
ed 30 June 2
2017 is attac
hed.
Signe
ed ________
___________
__________
Date
e: 9 August 2
2017
10. At
ttachments
Detail
ls of attachm
ments (if any):
:
11. Si
igned
Kip M
McGrath
Chair
rman
Newc
castle
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
details of the
e annual gen
neral meeting
g of Kip McG
Grath Educa
tion Centres
s Limited
:00 am (AES
ST)
Core f
franchise rev
venue has ag
gain increase
ed, as shown
n in the table
e below:
Kip M
Corpo
30 Ju
McGrath Edu
orate directo
ne 2017
ucation Cent
ory
d
tres Limited
Direct
tors
Comp
pany secreta
ary
airman)
Kip M
Ian C
Trevo
Diane
McGrath (Cha
Campbell
or Folsom
e Pass
Brett
Edwards
Notice
e of annual g
general meet
ting
Regis
stered office
Share
e register
Audito
or
Banke
ers
The d
are:
3/6 N
Newc
Frida
Newcomen S
castle, NSW
ay 27 Octobe
Street
W 2300
er 2017 at 11
el 3
Leve
6 Ne
Newc
Head
wcomen Stre
castle, NSW
d office telep
eet
W 2300
hone: 02 492
29 6711
Com
117 V
West
Shar
putershare I
Victoria Stree
t End, QLD 4
reholders enq
nvestor Serv
et,
4101
quiries: 1300
0 787 272
vices Pty Lim
mited
PKF
755 H
Newc
Newcastle
et
Hunter Stree
castle West,
NSW 2302
tralia Ltd
tional Towers
s Sydney
HSBC
Towe
Leve
100 B
Sydn
C Bank Aust
er 1, Internat
el 36
Barangaroo A
ney NSW 200
Avenue
00
Stock
k exchange li
isting
Kip M
Exch
McGrath Edu
hange (ASX c
ucation Centr
code: KME)
res Limited s
shares are lis
sted on the A
Australian Se
ecurities
Webs
site
www
w.kipmcgrath.
.com
1
1
2
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Chair
rman's letter
r
30 Ju
ne 2017
Dear S
Shareholder
s,
The c
company reco
orded its 6th
straight incr
rease in net
profit after ta
ax to $1,436
6,000 for the
full year, wh
hich is an inc
crease of
19.4%
% over the pr
evious year.
In addition,
EBITDA of $
$2,635,000 in
ncreased by
25.1%.
This r
result is desp
pite significa
nt headwind
s caused by
y the strength
hening Austr
ralian dollar
and the wea
ak British Po
ound. The
declin
ne in the pou
und significa
antly affected
d earnings, i
mpacting EB
BITDA alone
e by $470,00
00. This was
s mitigated b
by strong
growth
h in the franc
chise busine
ss in the Aus
stralian, UK a
and NZ mark
kets.
Reven
ue from franc
hise fees
Reven
ue from stude
ent lesson fees
s
Direct
costs of stude
ent lessons
Core r
revenue from
m franchise fe
es
2017
$’000
9,206
6
2,382
2
(1,932
2)
9,656
6
2016
$’000
7,713
5,553
(4,496)
8,770
2015
$’000
6,492
5,783
(5,038)
7,237
Our n
national adve
ertising strat
tegies are co
ontributing s
significantly t
to the growt
th in lesson
numbers an
nd we expe
ct this to
contin
nue as we f
further deve
lop these s
trategies in
Australia, U
UK and New
w Zealand.
Google AdW
Words, socia
al media,
progra
ammatic med
dia and telev
vision are wo
orking in har
rmony to pro
oduce the res
sults. This a
bility to attra
act students
using the
new m
media directe
ed to today’s
s parents is n
not only attra
acting more s
students but
will indirectl
y increase c
entre numbe
ers as we
go for
rward.
next y
year.
Gold
partner num
mbers globally
y continue to
o rise, with a
an increase
of 33 (15%)
) to over 230
0 operationa
al or about to
o open in
Austra
alia and the
United King
gdom. Gold
Partners, w
here we pro
ovide back o
office suppor
rt, generally
do better th
han other
centre
es resulting i
n better run
and more pr
rofitable ope
rations for th
he franchisee
es and the c
ompany. The
ere is scope
for more
Gold P
Partners in U
UK and we l
ook forward
to developin
ng this type
of centre in
New Zealan
d beginning
in the secon
nd half of
Online
e tutoring is
still an excit
ting opportun
nity for the c
company, wi
th more inve
estment bein
ng made this
s year. We s
set out to
provid
de an at hom
me solution to
o tuition that
t mirrored th
e in-centre e
experience a
and could be
e charged at
the same ra
ate as in-
centre
e tuition. Thi
is is unique
and we are
e the only c
company pro
oviding such
h a service.
However, it
hasn’t been
n without
challe
enges, the bi
ggest being
the generall
y low-level c
computer spe
ecifications i
n many hom
mes. We now
w appear to b
be on the
cusp o
of solving thi
s with more
advanced te
echnology tha
an when the
project bega
an.
Growt
th will contin
nue to come
e from the c
core busines
ss in centres
s and increa
asing online
revenue, w
with marketin
ng efforts
focuss
sed on buildi
ing lesson nu
umbers in bo
oth these are
eas.
The B
Board has bu
udgeted for
a continuati
on of increa
ased profits i
in the corpo
rate plan co
overing 2018
8-2020 with c
cash and
undra
wn bank fac
ilities at their
r strongest.
Today
y the Board
declared an
n unfranked
final dividen
nd of 1.4 ce
ents per sha
re payable o
on 29 Septe
ember 2017
to those
share
holders on th
he register a
at 7pm on 15
5 September
r 2017, takin
g total divide
ends for the
2017 year to
o 2 cents (20
016 – 1.5
cents)
), an increas
e of 33.3%.
Kip M
cGrath
Chairm
man
9 Aug
gust 2017
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
Chair
30 Ju
ucation Cent
McGrath Edu
r
rman's letter
ne 2017
d
tres Limited
Dear S
Shareholder
s,
The c
19.4%
company reco
% over the pr
orded its 6th
evious year.
straight incr
In addition,
rease in net
EBITDA of $
profit after ta
$2,635,000 in
ax to $1,436
ncreased by
25.1%.
6,000 for the
full year, wh
hich is an inc
crease of
This r
declin
growth
result is desp
ne in the pou
h in the franc
pite significa
und significa
chise busine
nt headwind
antly affected
ss in the Aus
s caused by
d earnings, i
stralian, UK a
y the strength
mpacting EB
and NZ mark
hening Austr
BITDA alone
kets.
ralian dollar
e by $470,00
and the wea
00. This was
ak British Po
s mitigated b
ound. The
by strong
Core f
franchise rev
venue has ag
gain increase
ed, as shown
n in the table
e below:
Reven
Reven
Direct
Core r
ue from franc
ue from stude
costs of stude
revenue from
hise fees
s
ent lesson fees
ent lessons
m franchise fe
es
2017
$’000
9,206
6
2
2,382
(1,932
2)
6
9,656
2016
$’000
7,713
5,553
(4,496)
8,770
2015
$’000
6,492
5,783
(5,038)
7,237
Our n
contin
progra
new m
go for
national adve
nue as we f
ammatic med
media directe
rward.
ertising strat
further deve
dia and telev
ed to today’s
tegies are co
lop these s
vision are wo
s parents is n
ontributing s
trategies in
orking in har
not only attra
significantly t
Australia, U
rmony to pro
acting more s
to the growt
UK and New
oduce the res
students but
th in lesson
w Zealand.
sults. This a
will indirectl
numbers an
Google AdW
bility to attra
y increase c
nd we expe
Words, socia
act students
entre numbe
ct this to
al media,
using the
ers as we
Gold
Austra
centre
Gold P
next y
partner num
alia and the
es resulting i
Partners in U
year.
mbers globally
United King
n better run
UK and we l
y continue to
gdom. Gold
and more pr
ook forward
o rise, with a
Partners, w
rofitable ope
to developin
an increase
here we pro
rations for th
ng this type
of 33 (15%)
ovide back o
he franchisee
of centre in
) to over 230
office suppor
es and the c
New Zealan
0 operationa
rt, generally
ompany. The
d beginning
al or about to
do better th
ere is scope
in the secon
o open in
han other
for more
nd half of
Online
provid
centre
challe
cusp o
e tutoring is
de an at hom
e tuition. Thi
enges, the bi
of solving thi
still an excit
me solution to
is is unique
ggest being
s with more
ting opportun
o tuition that
and we are
the generall
advanced te
nity for the c
t mirrored th
e the only c
y low-level c
echnology tha
company, wi
e in-centre e
company pro
computer spe
an when the
th more inve
experience a
oviding such
ecifications i
project bega
estment bein
and could be
h a service.
n many hom
an.
ng made this
e charged at
However, it
mes. We now
s year. We s
the same ra
hasn’t been
w appear to b
set out to
ate as in-
n without
be on the
Growt
focuss
th will contin
sed on buildi
nue to come
ing lesson nu
e from the c
umbers in bo
core busines
oth these are
ss in centres
eas.
s and increa
asing online
revenue, w
with marketin
ng efforts
The B
undra
Board has bu
wn bank fac
udgeted for
ilities at their
a continuati
r strongest.
on of increa
ased profits i
in the corpo
rate plan co
overing 2018
8-2020 with c
cash and
Today
share
cents)
y the Board
holders on th
), an increas
declared an
he register a
e of 33.3%.
n unfranked
at 7pm on 15
final dividen
5 September
nd of 1.4 ce
r 2017, takin
ents per sha
g total divide
re payable o
ends for the
on 29 Septe
2017 year to
ember 2017
o 2 cents (20
to those
016 – 1.5
Kip M
Chairm
9 Aug
cGrath
man
gust 2017
2
2
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Chief
30 Ju
McGrath Edu
Executive O
ne 2017
ucation Cent
Officer's me
d
tres Limited
essage
Kip M
of the
curren
cGrath Educ
e Australian
ncy would ha
cation Centre
Dollar stren
ave seen an
es Limited h
gthening ag
increase of 4
as reported
gainst the UK
47% over las
a strong inc
K pound aff
st year.
crease in EB
fected this re
ITDA to $2.6
esult by $47
6 million. Unf
70,000 so th
fortunately, t
he result on
the effect
constant
Overv
view of our m
major initiative
es:
1.
. Gold Partn
ner franchise
ees
We have 230
W
uring the nex
du
ocus more on
fo
0 Gold Partn
xt half. Gold
n the teachin
ers which is
Partner stud
g side of the
s an increas
dent number
eir business.
e of 33 (15%
rs on averag
%) from last
ge are highe
t year with a
r than Silver
another twen
r Partners as
nty expected
s the franchi
d to open
sees can
2.
. Online Tu
toring
nline tutoring
O
(6
69% increase
co
ontinue to ed
We are comm
W
rocess of bec
pr
g is continui
e). We now
ducate the m
mitted to con
coming a dow
ng to grow s
have our fir
market our so
tinually impr
wnloadable A
steadily, reac
rst franchisee
oftware allow
rove our soft
App to impro
ching 1,000
e with over
ws for small
tware so the
ove ease of d
lessons per
100 online s
group tuition
e user exper
distribution.
r month, up f
students whi
n replicating
rience is mo
from an ave
ch is a sign
the current
re rewarding
rage of 590
ificant milest
in-centre ex
g and it is no
last year
tone. We
perience.
ow in the
3.
. License S
Sales
he major co
Th
su
uccess. Fou
cu
urrently seek
equired to dir
re
sts associate
r schools in
king further
rect some of
ed with licen
South Afric
funding for
their profits t
nse sales ha
ca have rece
more schoo
towards edu
ave now end
eived funding
ols and fund
cation.
ded, and we
g from the g
ding from la
remain con
government
rge business
nfident we ca
for Enrichm
ses in Sout
an achieve l
ent Centres
h Africa as
ong term
. We are
they are
4.
. National M
Marketing
C
ad
in
in
ampaigns in
dvertising pa
crease in stu
crease the q
n Australia, U
aid for by Fra
udent numbe
quality of the
UK and New
anchisees an
ers of 20% f
leads. Initial
w Zealand ha
nd Head offi
for the year.
l testing is sh
ave been ve
ce. Tutoring
We are now
howing succe
ery successf
leads are u
w trialling the
ess.
ful. We use
p 75% via th
e online book
a combinati
he website a
king system
on of TV an
and this has
which we be
nd digitial
led to an
elieve will
5.
. Technology
y Developme
ent
W
We have com
so
oftware whic
ye
ears of feedb
oftware is int
so
uition and rev
tu
pleted our fi
ch is now ca
back from th
tegrated onto
verse if they
rst year with
lled iKip, and
he network, a
o the same p
choose to do
a complete
d this is curr
and we belie
platform whic
o so.
in-house sof
rently being
eve this prod
ch will allow
ftware team.
rolled out w
duct puts us
students to t
. We have su
worldwide. iK
ahead of ou
transition sm
uccessfully re
ip is the culm
ur global com
evamped ou
mination of t
mpetitors. Th
face to face
ur tutoring
the last 7
he online
to online
moothly from
Outloo
ok
We ex
autom
face to
xpect revenu
mation of the
o face and o
ue, profit and
software as
online tuition.
d profit marg
a service, o
gins will cont
our national a
tinue to grow
advertising c
w through a c
campaigns a
combination
nd the option
of the ongo
n for student
ing developm
ts to choose
ment and
between
I wou
emplo
ld like to tha
oyees for the
ank the mast
ir hard work
ter franchise
and support
ees, area dev
t throughout
velopers, fra
the year.
anchise repre
esentative co
ouncil memb
bers, franchis
sees and
The d
irectors pres
sent their rep
port, together
r with the fina
ancial statem
ments, on the
e consolidate
ed entity (refe
erred to here
eafter as
the 'co
onsolidated
entity') cons
sisting of Kip
p McGrath E
ducation Ce
entres Limited
d (referred t
to hereafter
as the 'comp
pany' or
'paren
nt entity') and
d the entities
it controlled
at the end o
of, or during,
the year end
ded 30 June
2017.
The fo
ollowing pers
sons were di
irectors of Ki
ip McGrath E
Education Ce
entres Limite
ed during the
e whole of th
he financial y
year and
up to t
the date of th
his report, un
nless otherw
wise stated:
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Direct
tors' report
30 Ju
ne 2017
Direct
tors
Kip M
McGrath
Ian C
ampbell
Trevo
or Folsom
Princ
ipal activitie
es
Diane
e Pass (appo
ointed on 1 F
February 201
7)
The p
principal acti
ivities of the
e consolidate
ed entity du
uring the cou
urse of the
financial ye
ar continued
d to be the
sale of
franch
hises and pro
oviding serv
ices to franc
chisees in th
he education
field. The c
consolidated
entity opera
ates in Austra
alia and
overse
eas, principa
ally in the Un
ited Kingdom
m and New Z
Zealand.
Divide
ends
Divide
ends paid du
ring the finan
ncial year we
ere as follow
ws:
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
451
270
721
442
221
663
Final
dividend for
the year end
ded 30 June
2016 of 1.0
cents (2015
: 1.0 cents) p
per ordinary
Interim
m dividend fo
or the year e
ended 30 Jun
ne 2017 of 0.
.6 cents (201
16: 0.5 cents
) per ordinar
ry
share
e
share
e
On 9
August 201
7, a final div
vidend for th
he year end
ded 30 June
2017 of 1.4
4 cents per
ordinary sha
are, unfranke
ed, was
declar
red and will b
be paid on 2
9 Septembe
er 2017 to tho
ose shareho
lders on the
register at 7
7pm on 15 Se
eptember 20
017. The
total d
distribution w
will be $630,4
480.
Revie
ew of operat
tions
The p
rofit for the c
consolidated
entity after p
providing for
income tax a
amounted to
o $1,436,000
(30 June 20
016: $1,203,0
000).
Reven
nue was we
eaker in the
Australia m
markets (2017
7: $7,351,00
00 versus 20
016 $8,792,
000) due to
o a shift to r
revenue
prima
rily from net
franchise fee
e contracts a
as opposed t
to older gros
ss fee contra
cts which ce
eased being o
offered at the
e end of
2014.
Revenue gr
rowth in the
UK market w
was subdued
d (2017: $5,1
190,000 vers
sus $5,111,0
00 in 2016)
due to the im
mpact of
the w
weak British
pound durin
ng the year
r. Revenue f
from other
markets inc
reased (201
17: $965,000
0 versus $6
602,000)
prima
rily due to gr
rowth from M
Middle East o
operations.
The n
umber of Go
old Partners g
grew to 101
in the Austra
alian market
(70% of tota
al centres) an
nd to 129 in t
the UK mark
ket (52%
of tota
al centres). O
Overall centr
re numbers g
globally grew
w slightly to 5
546 (2016: 5
538). Lesson
n numbers on
n the Insight
t system
contin
nued to grow
w, with total l
esson numb
bers for the f
financial yea
ar reaching 1
1,109,000 (co
ompared to
845,000 in t
the prior
year).
Year on yea
ar lesson gro
owth in Austr
ralia has ave
eraged 8% w
while new Go
old Partner, t
the national m
marketing ca
ampaign
and c
changes to th
he tax deduc
ctibility of tut
toring in the
UK has ass
sisted to driv
ve lesson gr
rowth to 20%
%. Other key
y growth
marke
ets include th
he Middle Ea
ast (up 109%
%) New Zeala
and (up 14%)
) and South A
Africa (up 10
0%).
The e
arnings befo
ore interest, t
tax, deprecia
ation and am
ortisation ('E
EBITDA') amo
ounted to $2
2,635,000 (20
016: $2,107,0
000).
The fo
ollowing tabl
e summarise
es key recon
nciling items
between sta
atutory profit
t after tax att
tributable to
the shareho
olders of
Kip M
cGrath Educ
cation Centre
es and EBITD
DA.
m McGrath
Storm
Chief
Executive O
Officer
9 Aug
Newca
gust 2017
astle
3
3
4
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
The d
the 'co
'paren
irectors pres
onsolidated
nt entity') and
sent their rep
entity') cons
d the entities
port, together
sisting of Kip
it controlled
r with the fina
p McGrath E
at the end o
ancial statem
ducation Ce
of, or during,
ments, on the
entres Limited
the year end
e consolidate
d (referred t
ded 30 June
ed entity (refe
to hereafter
2017.
erred to here
as the 'comp
eafter as
pany' or
Direct
The fo
up to t
tors
ollowing pers
the date of th
sons were di
his report, un
irectors of Ki
nless otherw
wise stated:
ip McGrath E
Education Ce
entres Limite
ed during the
e whole of th
he financial y
year and
Kip M
Ian C
Trevo
Diane
McGrath
ampbell
or Folsom
e Pass (appo
ointed on 1 F
February 201
7)
Princ
The p
franch
overse
ipal activitie
principal acti
hises and pro
eas, principa
es
ivities of the
oviding serv
ally in the Un
e consolidate
ices to franc
ited Kingdom
ed entity du
chisees in th
m and New Z
uring the cou
he education
Zealand.
urse of the
field. The c
financial ye
consolidated
ar continued
entity opera
d to be the
ates in Austra
sale of
alia and
Divide
Divide
ends
ends paid du
ring the finan
ncial year we
ere as follow
ws:
Final
dividend for
e
share
Interim
m dividend fo
e
share
the year end
ded 30 June
2016 of 1.0
cents (2015
: 1.0 cents) p
per ordinary
or the year e
ended 30 Jun
ne 2017 of 0.
.6 cents (201
16: 0.5 cents
) per ordinar
ry
d
onsolidated
C
016
20
2017
7
$'
0
$'000
000
451
270
721
442
221
663
On 9
declar
total d
August 201
red and will b
distribution w
7, a final div
be paid on 2
will be $630,4
vidend for th
9 Septembe
480.
he year end
er 2017 to tho
ded 30 June
ose shareho
2017 of 1.4
lders on the
4 cents per
register at 7
ordinary sha
7pm on 15 Se
are, unfranke
eptember 20
ed, was
017. The
Revie
The p
ew of operat
rofit for the c
tions
consolidated
entity after p
providing for
income tax a
amounted to
o $1,436,000
(30 June 20
016: $1,203,0
000).
Reven
prima
2014.
the w
prima
nue was we
rily from net
Revenue gr
weak British
rily due to gr
eaker in the
franchise fee
rowth in the
pound durin
rowth from M
Australia m
e contracts a
UK market w
ng the year
Middle East o
markets (2017
as opposed t
was subdued
r. Revenue f
operations.
7: $7,351,00
to older gros
d (2017: $5,1
from other
00 versus 20
ss fee contra
190,000 vers
markets inc
016 $8,792,
cts which ce
sus $5,111,0
reased (201
000) due to
eased being o
00 in 2016)
17: $965,000
o a shift to r
offered at the
due to the im
0 versus $6
revenue
e end of
mpact of
602,000)
The n
of tota
contin
year).
and c
marke
umber of Go
al centres). O
nued to grow
Year on yea
changes to th
ets include th
old Partners g
Overall centr
w, with total l
ar lesson gro
he tax deduc
he Middle Ea
grew to 101
re numbers g
esson numb
owth in Austr
ctibility of tut
ast (up 109%
in the Austra
globally grew
bers for the f
ralia has ave
toring in the
%) New Zeala
alian market
w slightly to 5
financial yea
eraged 8% w
UK has ass
and (up 14%)
(70% of tota
546 (2016: 5
ar reaching 1
while new Go
sisted to driv
) and South A
al centres) an
538). Lesson
1,109,000 (co
old Partner, t
ve lesson gr
Africa (up 10
nd to 129 in t
n numbers on
ompared to
the national m
rowth to 20%
0%).
the UK mark
n the Insight
845,000 in t
marketing ca
%. Other key
ket (52%
t system
the prior
ampaign
y growth
The e
arnings befo
ore interest, t
tax, deprecia
ation and am
ortisation ('E
EBITDA') amo
ounted to $2
2,635,000 (20
016: $2,107,0
000).
The fo
Kip M
ollowing tabl
cGrath Educ
e summarise
cation Centre
es key recon
es and EBITD
nciling items
DA.
between sta
atutory profit
t after tax att
tributable to
the shareho
olders of
4
4
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
Reve
nue
EBITD
Less:
Less:
Add:
DA
Depreciatio
Interest exp
Interest inco
n and amorti
pense
me
isation
Profit
Incom
before Incom
me tax expen
me tax expen
nse
nse
Profit
after income
e tax expens
se
d
onsolidated
C
016
20
2017
7
$'
0
$'000
000
13
3,507
14,569
2
2,635
(773)
(68)
1
1
,795
(359)
1
,436
2,107
(443)
(69)
4
1,599
(396)
1,203
Signif
There
ficant chang
e were no sig
ges in the st
gnificant chan
tate of affair
nges in the s
rs
state of affair
s of the cons
solidated ent
tity during the
e financial ye
ear.
Matte
Apart
has si
the co
ers subsequ
from the div
ignificantly a
onsolidated e
ent to the e
vidend declar
affected, or m
entity's state
nd of the fin
red as discus
may significan
of affairs in f
r
nancial year
ssed above,
ntly affect th
future financ
no other ma
e consolidate
ial years.
atter or circum
ed entity's o
mstance has
perations, th
s arisen sinc
he results of
e 30 June 20
those operat
017 that
tions, or
Likely
The c
both t
expec
increa
y developme
company has
traditional tut
cted online le
ases.
ents and ex
s initiated a n
toring servic
esson numb
pected resu
number of n
ces as well a
ers will incre
ults of opera
ew marketin
as the new o
ease signific
ations
ng campaigns
on-line produ
antly as the
s in the key
ucts and exp
number of f
Australian a
pects improv
franchises tr
and United K
ved growth in
rained in the
Kingdom mar
n both marke
e upgraded s
rkets for
ets. It is
software
onmental re
onsolidated
egulation
entity is not
Envir
The c
law.
subject to an
ny significan
nt environme
ntal regulatio
on under Aus
stralian Com
mmonwealth
Intere
ests in shares
s:
or State
Name
e:
Title:
Inform
mation on d
e:
Name
Title:
Exper
rience and e
irectors
xpertise:
Other
Forme
Speci
Intere
Intere
r current dire
er directorsh
ial responsib
ests in shares
ests in option
ectorships:
hips (last 3 ye
bilities:
s:
ns:
McGrath
Kip M
-Executive D
Non-
o-founder, K
As co
n-the-Traine
"Trai
None
e
ears): None
e
e
None
27,499 ordin
16,22
e
None
irector and C
Chairman
cular respon
Kip has partic
.
r" programs.
sibility for st
trategic plann
ning and dev
veloping
ary shares (i
including 11,
,227,499 dire
ectly held)
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Direct
tors' report
30 Ju
ne 2017
Name
e:
Title:
Qualif
fications:
Ian C
Campbell
Non-
-Executive D
irector
FCA,
, MAICD
Exper
rience and e
xpertise:
Ian jo
oined the Bo
oard on 25 A
August 2009 a
after a 32 ye
ears career w
with the inter
rnational
acco
unting firm
Ernst & You
ung principa
ally working
with entrepr
reneurial com
mpanies
and t
the capital m
markets. Ian
is a Fellow o
of Chartered
Accountants
s Australia a
and New
Zeala
and and a
member of
the Austral
ian Institute
e of Compan
ny Directors
s. He is
curre
ently a non-e
executive dir
rector of CVC
C Limited an
nd Redox Pt
ty Ltd and a
a partner
with
the Board s
earch practic
ce of the All
legis Group
(formerly Ta
alent2). His p
previous
non-e
executive dir
rector roles i
included Glo
oria Jean’s C
Coffees Intern
national Pty
Limited,
Gree
en’s Foods H
oldings Pty L
Ltd and Youn
ng Achievem
ment Australia
a Limited.
Speci
ial responsib
bilities:
Chai
rman of the A
Audit Comm
ittee and Ch
airman of the
e Nomination
n and Remu
neration
Other
r current dire
ectorships:
CVC
Ltd
Forme
er directorsh
hips (last 3 ye
ears): None
e
Intere
ests in shares
s:
Intere
ests in option
ns:
Name
e:
Title:
Com
mittee
500,0
000 ordinary
y shares
None
e
Trevo
or Folsom
Non-
-Executive D
irector
Exper
rience and e
xpertise:
Trevo
or has exten
nsive backgro
ound and ex
xperience an
d is acknow
ledged for h
is ability
to en
ngage, invest
t and advise
growth com
mpanies, part
ticularly in th
e technology
y sector.
He is
s a successf
ful entrepren
eur in his ow
wn right, dev
veloping, from
m start up, B
Blueprint
Mana
agement, wh
hich he sold
in 2008. He
e is currently
y a Director o
of Elevation
Capital,
an ea
arly stage tec
chnology inv
vestment com
mpany.
Other
r current dire
ectorships:
None
e
Forme
er directorsh
hips (last 3 ye
ears): None
e
Speci
ial responsib
bilities:
Mem
mber of the A
Audit Commi
ittee and me
ember of the
e Nomination
n and Remu
neration
Com
mittee
None
e
Diane
e Pass
Non-
-Executive D
irector
Exper
rience and e
xpertise:
Di is
currently a
Director of t
the human r
resources co
onsultancy co
ompany 360
0HR and
the C
Chair of the
Advisory C
Council of Sy
ydney TAFE
E Institute. D
i has more
than 20
years
s local, natio
onal and inte
ernational ex
xperience in
n the recruitm
ment and co
onsulting
indus
stry. She is
also accomp
plished in cr
eating and d
delivering en
ngaging profe
essional
deve
elopment prog
grams and le
eading comp
plex manage
ment consul
ting assignm
ments. Di
is als
so a member
r of the Austr
ralian Institut
te of Compan
ny Directors.
.
Other
r current dire
ectorships:
None
e
Forme
er directorsh
hips (last 3 ye
ears): None
e
Speci
ial responsib
bilities:
Intere
ests in shares
s:
None
e
Mem
mber of the No
omination an
nd Remunera
ation Commi
ittee
'Other
r current dire
ectorships' qu
uoted above
e are current
directorship
s for listed e
entities only a
and exclude
s directorshi
ps in all
other
types of enti
ties, unless o
otherwise sta
ated.
'Form
er directorsh
hips (in the la
ast 3 years)'
quoted abov
ve are directo
orships held
in the last 3
years for list
ted entities o
only and
exclud
des directors
ships in all ot
ther types of
entities, unle
ess otherwis
e stated.
Comp
pany secreta
ary
Brett E
Edwards is a
a Fellow of C
Chartered Acc
countants Au
ustralia and
New Zealand
d and a mem
mber of the A
Australian Ins
stitute of
Comp
pany Directo
rs. He has
29 years of
experience
in accounti
ng and repo
orting in a n
number of m
major Austral
ian and
intern
ational busin
nesses, inclu
uding 10 yea
rs with intern
national acco
ounting firm E
Ernst & Youn
ng. He was p
previously a
director
of GM
MAC Australia
a LLC, a US
company op
perating in th
he finance se
egment in Au
stralia.
5
5
6
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
e:
Name
Title:
Qualif
Exper
fications:
rience and e
xpertise:
Campbell
Ian C
-Executive D
Non-
, MAICD
FCA,
oined the Bo
Ian jo
unting firm
acco
the capital m
and t
and and a
Zeala
ently a non-e
curre
the Board s
with
executive dir
non-e
en’s Foods H
Gree
Ltd
CVC
e
ears): None
rman of the A
Chai
mittee
Com
500,0
000 ordinary
e
None
Trevo
or Folsom
Non-
-Executive D
Trevo
or has exten
to en
ngage, invest
He is
s a successf
Mana
agement, wh
arly stage tec
an ea
None
e
e
ears): None
mber of the A
Mem
mittee
Com
e
None
e Pass
Diane
-Executive D
Non-
Di is
currently a
the C
Chair of the
s local, natio
years
stry. She is
indus
elopment prog
deve
is als
so a member
None
e
e
ears): None
Mem
mber of the No
e
None
Other
Forme
Speci
r current dire
er directorsh
ial responsib
ectorships:
hips (last 3 ye
bilities:
Intere
Intere
ests in shares
ests in option
s:
ns:
e:
Name
Title:
Exper
rience and e
xpertise:
Other
Forme
Speci
r current dire
er directorsh
ial responsib
ectorships:
hips (last 3 ye
bilities:
Intere
ests in shares
s:
e:
Name
Title:
Exper
rience and e
xpertise:
Other
Forme
Speci
Intere
r current dire
er directorsh
ial responsib
ests in shares
ectorships:
hips (last 3 ye
bilities:
s:
oard on 25 A
Ernst & You
markets. Ian
member of
executive dir
earch practic
rector roles i
oldings Pty L
August 2009 a
ung principa
is a Fellow o
the Austral
rector of CVC
ce of the All
included Glo
Ltd and Youn
after a 32 ye
ally working
of Chartered
ian Institute
C Limited an
legis Group
oria Jean’s C
ng Achievem
ears career w
with entrepr
Accountants
e of Compan
nd Redox Pt
(formerly Ta
Coffees Intern
ment Australia
with the inter
reneurial com
s Australia a
ny Directors
ty Ltd and a
alent2). His p
national Pty
a Limited.
rnational
mpanies
and New
s. He is
a partner
previous
Limited,
Audit Comm
ittee and Ch
airman of the
e Nomination
n and Remu
neration
irector
y shares
irector
nsive backgro
t and advise
ful entrepren
hich he sold
chnology inv
ound and ex
growth com
eur in his ow
in 2008. He
vestment com
xperience an
mpanies, part
wn right, dev
e is currently
mpany.
d is acknow
ticularly in th
veloping, from
y a Director o
ledged for h
e technology
m start up, B
of Elevation
is ability
y sector.
Blueprint
Capital,
Audit Commi
ittee and me
ember of the
e Nomination
n and Remu
neration
irector
Director of t
Advisory C
onal and inte
also accomp
grams and le
r of the Austr
the human r
Council of Sy
ernational ex
plished in cr
eading comp
ralian Institut
resources co
ydney TAFE
xperience in
eating and d
plex manage
te of Compan
ompany 360
onsultancy co
i has more
E Institute. D
ment and co
n the recruitm
ngaging profe
delivering en
ting assignm
ment consul
.
ny Directors.
0HR and
than 20
onsulting
essional
ments. Di
omination an
nd Remunera
ation Commi
ittee
'Other
other
r current dire
types of enti
ectorships' qu
ties, unless o
uoted above
otherwise sta
e are current
ated.
directorship
s for listed e
entities only a
and exclude
s directorshi
ps in all
'Form
exclud
er directorsh
des directors
hips (in the la
ships in all ot
ast 3 years)'
ther types of
quoted abov
entities, unle
ve are directo
ess otherwis
orships held
e stated.
in the last 3
years for list
ted entities o
only and
Comp
Brett E
Comp
intern
of GM
pany secreta
Edwards is a
pany Directo
ational busin
MAC Australia
ary
a Fellow of C
rs. He has
nesses, inclu
a LLC, a US
Chartered Acc
29 years of
uding 10 yea
company op
countants Au
experience
rs with intern
perating in th
ustralia and
in accounti
national acco
he finance se
New Zealand
ng and repo
ounting firm E
egment in Au
d and a mem
orting in a n
Ernst & Youn
stralia.
mber of the A
number of m
ng. He was p
Australian Ins
major Austral
previously a
stitute of
ian and
director
6
6
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
Meeti
The n
year e
ngs of direc
number of me
ended 30 Jun
ctors
eetings of th
ne 2017, and
he company'
d the number
s Board of D
r of meetings
Directors ('th
s attended by
e Board') an
y each direct
nd of each B
tor were:
Board commi
ittee held du
uring the
Full Board
Attend
ded
Held
H
Nominat
Remuneratio
R
Attended
A
tion and
e
on Committee
Held
Au
Attend
ee
dit Committe
Held
H
ed
The c
consolidated
entity aims
s to reward
d KMP base
ed on their
position an
nd responsib
bility, with a
a level and
mix of
remun
neration, whi
ch has both
fixed and va
ariable compo
onents.
Execu
utive remune
eration
Kip M
Ian C
Trevo
Diane
McGrath
ampbell
or Folsom
e Pass
7
7
7
3
7
7
7
3
1
1
1
-
1
1
1
-
-
4
3
-
represents t
the number
of meetings
s held during
g the time th
he director h
eld office or
r was a mem
mber of the
Held:
comm
mittee.
-
4
4
-
relevant
The K
KMP remuner
ration and re
eward framew
work has fou
ur component
ts:
b
base pay and
d non-monet
tary benefits;
;
s
short-term pe
erformance i
ncentives;
s
share-based
payments; a
and
●
●
●
●
o
other remune
eration, such
h as superan
nuation and
long service
e leave.
The c
ombination o
of these com
mprises the K
KMP's total re
emuneration.
Remu
The r
arrang
Regul
uneration re
emuneration
gements for
ations.
eport (audite
n report, whi
the consoli
ed)
ich has bee
idated entity
n audited, o
y, in accorda
outlines the
ance with th
director and
he requireme
d other key m
ents of the
managemen
Corporation
nt personnel
s Act 2001
('KMP')
and its
compa
arable marke
et remunerat
tion.
Fixed
remuneratio
on, consistin
g of base sa
alary, supera
annuation an
nd non-mone
etary benefit
s, are review
wed annually
y by the
NRC,
based on
individual a
and business
s unit perfo
ormance, the
e overall pe
erformance
of the cons
solidated ent
tity and
KMP
activit
are defined
ties of the co
as those w
onsolidated e
who have th
entity.
e authority a
and respons
sibility for pl
anning, dire
ecting and c
ontrolling th
e major
where
e it does not
create any a
additional cos
sts to the con
nsolidated en
ntity and add
ds additional
value to the
KMP.
KMPs
s can receive
e their fixed r
remuneration
n in the form
m of cash or o
other fringe b
benefits (for
example mo
otor vehicle b
benefits)
The re
emuneration
P
Principles us
●
D
Details of rem
●
S
Service agre
●
Share-based
S
●
Additional dis
A
●
report is set
sed to determ
muneration
ements
d compensat
sclosures rel
t out under th
mine the natu
he following
ure and amou
main headin
unt of remun
gs:
neration
ion
lating to key
managemen
nt personnel
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Direct
tors' report
30 Ju
ne 2017
ASX l
isting rules r
requires that
the aggrega
ate non-exec
utive directo
rs' remunera
ation be dete
ermined perio
odically by a
general
meetin
ng. The mo
st recent de
etermination
was at the
Annual Ge
neral Meetin
ng held on
20 Novembe
er 2015, wh
here the
share
holders appr
roved a max
imum aggreg
gate remune
eration of $40
00,000.
The s
short-term in
ncentives ('S
STI') program
m is designe
ed to align t
he targets o
of the busine
ess units wi
ith the perfo
ormance
hurdle
es of execut
tives. STI pa
ayments are
granted to
executives b
based on sp
pecific annua
al targets an
nd key perfo
ormance
indica
ators ('KPI')
being achiev
ved. KPI’s f
for the chief
executive o
officer are s
et by the N
RC and cur
rrently focus
s on the
conso
olidated entity
y's financial
performance
e measured
by reference
e to annual a
after-tax prof
fit. The KPI's
s of other exe
ecutives
are se
et by the chie
ef executive o
officer and a
are reviewed
in consultati
on with the c
chair of the B
Board.
Long-
term incentiv
ves ('LTI') inc
clude share o
options and
long service
e leave. An e
mployee sha
are option pla
an was appr
roved by
share
holders in 2
2012, the ob
bjective of w
which is to a
assist in the
e recruitmen
nt, reward, r
retention and
d motivation
n of key
emplo
oyees and d
irectors by f
facilitating th
he offering o
of options ov
ver ordinary
shares, sub
bject to perfo
ormance and
d loyalty
hurdle
es. The plan
n aims to g
ive selected
d employees
s and directo
ors the opp
ortunity to s
share in the
e future grow
wth and
profita
ability of the
company by
y better align
ning their inte
erests with t
those of sha
reholders an
nd provides g
greater incen
ntive for
them t
to work towa
ards achievin
ng the longer
r term goals o
of the compa
any.
Under
r the plan, th
he board has
discretion to
o decide whic
ch full or par
rt-time emplo
oyees or dire
ectors of the
company (or
r related
body
corporate) w
will be invite
d to acquire
e options, the
e number of
f options to
be offered,
any vesting
conditions s
such as
perfor
rmance targe
ets or minimu
um vesting p
periods, the a
applicable ex
xercise price
e (which mus
st be at least
equal to the
e market
value
of shares at
the time of t
the offer), an
nd any other
terms of issu
ue.
Conso
olidated entit
ty performan
nce and link t
to remunerat
tion
KMP
remuneratio
on is linked
to the perfo
ormance of t
the consolid
ated entity.
Bonus and
incentive p
ayments are
e at the
During
g the financia
al year ende
d 30 June 20
017, the com
mpany did no
ot engage the
e use of remu
uneration co
nsultants.
discre
etion of the B
Board.
Use o
of remunerati
ion consultan
nts
Detail
ls of remune
eration
Amou
unts of remun
neration
follow
wing tables.
Detail
s of the rem
muneration of
f the directo
rs and other
r KMP of Kip
p McGrath E
Education Ce
entres Limite
ed are set ou
ut in the
director and
d executive
director
compa
any did not r
receive any s
specific feedb
back at the A
AGM regardi
ng its remun
neration prac
ctices.
Voting
g and comme
ents made a
t the compan
ny's 2016 An
nnual Genera
al Meeting ('A
AGM')
At the
e 2016 AGM,
, 96% of the
shareholder
rs voted to a
adopt the rem
muneration r
eport for the
e year ended
d 30 June 20
016. The
The re
and e
comm
remun
emuneration
establishes,
mittee also a
neration pack
committee m
reviews and
assists the
kage of the c
makes recom
d approves
chief execu
chief executiv
mmendations
remuneratio
utive officer
ve officer for
s to the Boa
on terms and
in the rem
r approval by
rd in relation
d the perfor
muneration r
y the Board.
n to remuner
rmance of t
review of se
ation of non-
he chief exe
enior execu
-executive d
ecutive offic
tives and s
irectors,
cer. The
sets the
e and amoun
executive re
d. The fram
areholders, a
reward satis
nt of remune
eward framew
ework align
and it is cons
sfies the follo
eration
work is to en
s executive
sidered to co
owing key cri
nsure reward
reward with
onform to ma
teria for goo
d for perform
h the achiev
arket best pra
d reward gov
mance is com
vement of s
actice for de
vernance pra
mpetitive
strategic
elivery of
actices:
iples used t
Princ
objective of t
The o
appropriate f
and a
tives and the
object
d. The Board
reward
c
competitiven
●
acceptability
a
●
p
performance
●
transparency
t
●
to determine
he consolida
for the resu
e creation of
d ensures tha
ess and reas
to sharehold
linkage / alig
y.
e the nature
ated entity's
ults delivered
value for sha
at executive
s;
sonableness
ders;
gnment of K
Non-e
Fees
directo
advice
in line
directo
incent
executive dire
and paymen
ors. Non-exe
e of independ
e with the ma
ors based on
tives.
ectors' remun
nts to non-e
ecutive direc
dent remune
arket. The fee
n comparativ
neration
xecutive dire
ctors' fees an
eration consu
es for the ch
ve roles in th
ectors reflec
nd payments
ultants to ens
hair of the Bo
he external m
ct the deman
s are review
sure non-exe
oard are dete
market. Non-e
nds which ar
wed annually
ecutive direc
ermined inde
executive dir
re made on,
y by the NRC
tors' fees an
ependently to
rectors do no
and the res
C. The comm
d payments
o the fees of
ot receive sh
sponsibilities
mittee may t
are appropr
other non-ex
hare options
s of, the
take the
iate and
xecutive
or other
7
7
8
The N
arrang
remun
Nomination
gements for
neration philo
and Remun
r its KMP.
osophy is to
neration Com
The perform
attract, motiv
mmittee ('N
mance of th
vate and reta
RC') is res
he consolida
ain high perfo
ponsible for
ated entity d
ormance and
r determinin
depends on
d high quality
g and revie
n the quality
y personnel.
ewing remun
y of its KM
neration
MP. The
In acc
remun
cordance wit
neration is se
th best prac
eparate.
ctice corpora
ate governan
nce, the stru
ucture of no
on-executive
MP compens
sation; and
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
ASX l
meetin
share
isting rules r
ng. The mo
holders appr
requires that
st recent de
roved a max
the aggrega
etermination
imum aggreg
ate non-exec
was at the
gate remune
utive directo
Annual Ge
eration of $40
rs' remunera
neral Meetin
00,000.
ation be dete
ng held on
ermined perio
20 Novembe
odically by a
er 2015, wh
general
here the
Execu
The c
remun
utive remune
consolidated
neration, whi
eration
entity aims
ch has both
s to reward
fixed and va
d KMP base
ariable compo
ed on their
onents.
position an
nd responsib
bility, with a
a level and
mix of
The K
KMP remuner
base pay and
b
●
short-term pe
s
●
s
share-based
●
other remune
o
●
ration and re
d non-monet
erformance i
payments; a
eration, such
eward framew
work has fou
;
tary benefits;
ncentives;
and
h as superan
nuation and
ur component
ts:
long service
e leave.
The c
ombination o
of these com
mprises the K
KMP's total re
emuneration.
Fixed
NRC,
compa
remuneratio
based on
arable marke
on, consistin
individual a
et remunerat
g of base sa
and business
tion.
alary, supera
s unit perfo
annuation an
ormance, the
nd non-mone
e overall pe
etary benefit
erformance
s, are review
of the cons
wed annually
solidated ent
y by the
tity and
KMPs
where
s can receive
e it does not
e their fixed r
create any a
remuneration
additional cos
n in the form
sts to the con
m of cash or o
nsolidated en
other fringe b
ntity and add
benefits (for
ds additional
example mo
value to the
KMP.
otor vehicle b
benefits)
The s
hurdle
indica
conso
are se
short-term in
es of execut
ators ('KPI')
olidated entity
et by the chie
ncentives ('S
tives. STI pa
being achiev
y's financial
ef executive o
STI') program
ayments are
ved. KPI’s f
performance
officer and a
m is designe
granted to
for the chief
e measured
are reviewed
ed to align t
executives b
executive o
by reference
in consultati
he targets o
based on sp
officer are s
e to annual a
on with the c
of the busine
pecific annua
et by the N
after-tax prof
chair of the B
ess units wi
al targets an
RC and cur
fit. The KPI's
Board.
ith the perfo
nd key perfo
rrently focus
s of other exe
ormance
ormance
s on the
ecutives
Long-
share
emplo
hurdle
profita
them t
term incentiv
holders in 2
oyees and d
es. The plan
ability of the
to work towa
ves ('LTI') inc
2012, the ob
irectors by f
n aims to g
company by
ards achievin
clude share o
bjective of w
facilitating th
ive selected
y better align
ng the longer
options and
which is to a
he offering o
d employees
ning their inte
r term goals o
long service
assist in the
of options ov
s and directo
erests with t
of the compa
e leave. An e
e recruitmen
ver ordinary
ors the opp
those of sha
any.
mployee sha
nt, reward, r
shares, sub
ortunity to s
reholders an
are option pla
retention and
bject to perfo
share in the
nd provides g
an was appr
d motivation
ormance and
e future grow
greater incen
roved by
n of key
d loyalty
wth and
ntive for
Under
body
perfor
value
r the plan, th
corporate) w
rmance targe
of shares at
he board has
will be invite
ets or minimu
the time of t
discretion to
d to acquire
um vesting p
the offer), an
o decide whic
e options, the
periods, the a
nd any other
ch full or par
e number of
applicable ex
terms of issu
rt-time emplo
f options to
xercise price
ue.
oyees or dire
be offered,
e (which mus
ectors of the
any vesting
st be at least
company (or
conditions s
equal to the
r related
such as
e market
Conso
KMP
discre
olidated entit
remuneratio
etion of the B
ty performan
on is linked
Board.
nce and link t
to the perfo
to remunerat
ormance of t
tion
the consolid
ated entity.
Bonus and
incentive p
ayments are
e at the
Use o
During
of remunerati
g the financia
ion consultan
al year ende
nts
d 30 June 20
017, the com
mpany did no
ot engage the
e use of remu
uneration co
nsultants.
Voting
At the
compa
g and comme
e 2016 AGM,
any did not r
ents made a
, 96% of the
receive any s
t the compan
shareholder
specific feedb
ny's 2016 An
rs voted to a
back at the A
nnual Genera
adopt the rem
AGM regardi
al Meeting ('A
muneration r
ng its remun
AGM')
eport for the
neration prac
e year ended
ctices.
d 30 June 20
016. The
Detail
ls of remune
eration
Amou
Detail
follow
unts of remun
s of the rem
wing tables.
neration
muneration of
f the directo
rs and other
r KMP of Kip
p McGrath E
Education Ce
entres Limite
ed are set ou
ut in the
8
8
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
onsolidated
entity consis
sted of the d
irectors of K
Kip McGrath
Education C
Centres Limite
ed and the fo
ollowing
KMP of the c
The K
ns:
perso
S
Storm McGra
●
J
James Stree
●
B
Brett Edward
●
Jackie Burrow
J
●
C
Catherine Co
●
J
Julie Russell
●
Peter Hepp -
P
●
xecutive Offi
ath - Chief E
ecutive Office
t - Chief Exe
y Secretary a
ds - Compan
xecutive Offi
ws - Chief E
Curriculum a
ook - Global
- Global Ma
arketing Mana
r
- IT Manager
icer and Inve
er - Online (to
and Chief Fi
icer UK Busi
and Training
ager
ns
6)
cer
estor Relation
o 1 July 2016
nancial Offic
ness
Manager
Short-term be
S
enefits
Post
t-
ment
employm
fits
benef
Long-t
bene
term
efits
Sha
bas
paym
are-
sed
ments
Sh
ba
paym
hare-
ased
ments
ry
Cash salar
and fees
$
Bonus
$
Non-
moneta
ary
Supe
annuat
er-
tion
$
$
ve
Leav
efits
bene
$
uity-
Equ
tled
sett
sha
ares
$
$
Eq
set
opt
quity-
ttled
tions
$
Total
T
$
142,608
63,927
54,795
20,653
8
7
5
3
-
-
-
-
2,1
2,1
2,1
1,0
58
58
58
079
7,
6,
5,
1,
808
073
205
962
273,83
65,95
177,924
143,230
138,104
123,139
115,589
1
1
4
0
4
9
9
1
1,319,75
-
-
50
75
00
00
50
75
9,75
15,17
7,50
6,50
6,25
45,17
2,1
58
-
58
58
58
58
58
501
2,1
2,1
2,1
2,1
2,1
20,5
25,
16,
13,
11,
10,
99,
445
601
903
-
120
698
981
796
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
152,574
1
72,158
62,158
23,694
20,335
2
-
9,288
2,487
528
528
528
321,769
3
66,552
216,023
2
163,050
1
1
161,410
1
144,023
1
135,506
518,917
33,694 1,5
3
receives a $
$90,000 fee a
as Non-exec
cutive Chairm
man plus add
ditional remu
neration for a
agreed servi
ces.
2017
Non-E
Direct
Kip M
(Chai
Ian C
Trevo
Diane
Executive
tors:
McGrath
rman) *
ampbell
or Folsom
e Pass
Other
Mana
Perso
Storm
Jame
Brett
Jackie
Cathe
Julie
Peter
r Key
agement
onnel:
m McGrath
es Street
Edwards
e Burrows
erine Cook
Russell
r Hepp
*
Kip McGrath
K
9
9
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Direct
tors' report
30 Ju
ne 2017
S
Short-term be
enefits
benef
fits
bene
efits
paym
ments
paym
ments
Post
t-
employm
ment
Long-t
term
Sha
are-
bas
sed
Sh
hare-
ba
ased
Cash salar
ry
and fees
Non-
Supe
er-
Bonus
moneta
ary
annuat
tion
$
$
$
$
Equ
uity-
Eq
quity-
Leav
ve
bene
efits
$
sett
tled
sha
ares
$
$
set
ttled
opt
tions
$
Total
T
$
129,184
4
63,926
6
54,794
4
287,318
8
164,384
4
173,62
1
148,536
6
31,963
3
27,046
6
28,275
5
-
-
-
-
-
-
16,37
72
1,75
50
5,05
50
1,75
50
2,1
50
2,1
50
2,1
50
10,
203
6,
073
5,
205
2,1
50
2,1
50
2,1
50
2,1
50
2,1
50
2,1
50
2,1
50
27,
547
15,
616
16,
494
-
3,
470
2,
936
3,
070
90,
614
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8,472
3,624
2,041
280
1
141,537
72,149
62,149
3
325,487
1
185,774
1
194,306
1
167,338
39,333
37,182
35,245
1,109,047
7
24,92
22
21,5
500
1
14,417 1,2
260,500
*
**
K
Kip McGrath
moved to a
Non-Execut
ive capacity
in October 2
2015.
R
Remuneratio
on from date
of promotion
n to KMP.
The p
roportion of
remuneratio
n linked to pe
erformance a
and the fixed
d proportion a
are as follow
ws:
Fixe
ed remunera
ation
At risk
k - STI
A
At risk - LTI
2017
7
2
2016
2017
2016
2017
7
20
016
-
-
-
-
-
-
5%
9%
5%
5%
5%
-
-
-
-
-
-
-
9%
%
2%
%
5%
%
2%
%
-
-
-
-
6%
-
5%
2%
-
-
-
-
-
-
-
-
-
-
-
3%
2%
1%
1
100%
1
100%
1
100%
1
100%
94%
1
100%
90%
89%
95%
95%
95%
100%
100%
100%
-
97%
98%
99%
91%
98%
95%
98%
10
The p
roportion of t
the cash bon
nus paid duri
ing the year
ended 30 Ju
une 2017 is a
as follows:
Storm Mc
cGrath has e
entitlements t
to performan
nce incentive
es of up to 1
15% of over
budget perf
formance ca
apped at
Jackie Bu
rrows has en
ntitlement to
performance
e incentives
based on sa
ales in the UK
K market ($1
5,175 paid),
and
Other KM
P have spec
cific performa
ance incentiv
ves of up to 1
15% of salary
y or $20,000
0 whichever is
s higher.
2016
Non-E
Executive
Direct
tors:
Kip M
McGrath
(Chai
rman) *
Ian C
ampbell
Trevo
or Folsom
Other
r Key
Mana
agement
Perso
onnel:
Storm
m McGrath
Jame
es Street
Brett
Edwards
Jackie
e Burrows
Cathe
erine Cook **
*
Julie
Russell **
Peter
r Hepp **
Non-E
Executive Dir
rectors:
Name
e
Kip M
McGrath
Ian C
ampbell
Trevo
or Folsom
Diane
e Pass
Perso
onnel:
Storm
m McGrath
Jame
es Street
Brett
Edwards
Jackie
e Burrows
Cathe
erine Cook
Julie
Russell
Peter
r Hepp
Other
r Key Manag
gement
$300,000
(nil paid);
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
Short-term be
S
enefits
t-
Post
ment
employm
fits
benef
Long-t
bene
term
efits
Sha
bas
paym
are-
sed
ments
Sh
ba
paym
hare-
ased
ments
ry
Cash salar
and fees
$
Bonus
$
Non-
moneta
ary
Supe
annuat
er-
tion
$
$
ve
Leav
efits
bene
$
Equ
uity-
tled
sett
sha
ares
$
$
Eq
set
opt
quity-
ttled
tions
$
Total
T
$
2016
Non-E
Direct
Kip M
(Chai
Ian C
Trevo
Executive
tors:
McGrath
rman) *
ampbell
or Folsom
129,184
63,926
54,794
4
6
4
-
-
-
2,1
2,1
2,1
50
50
50
10,
6,
5,
203
073
205
Other
Mana
Perso
Storm
Jame
Brett
Jackie
Cathe
Julie
Peter
r Key
agement
onnel:
m McGrath
es Street
Edwards
e Burrows
*
erine Cook **
Russell **
r Hepp **
287,318
164,384
173,62
148,536
31,963
27,046
28,275
1,109,047
8
4
1
6
3
6
5
7
-
-
-
72
50
50
50
22
16,37
1,75
5,05
1,75
24,92
2,1
2,1
2,1
2,1
2,1
2,1
2,1
21,5
50
50
50
50
50
50
50
500
27,
15,
16,
3,
2,
3,
90,
547
616
494
-
470
936
070
614
*
**
Kip McGrath
K
Remuneratio
R
moved to a
on from date
Non-Execut
of promotion
ive capacity
n to KMP.
in October 2
2015.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
141,537
1
72,149
62,149
8,472
3,624
2,041
280
-
-
-
14,417 1,2
1
325,487
3
1
185,774
1
194,306
167,338
1
39,333
37,182
35,245
260,500
The p
roportion of
remuneratio
n linked to pe
erformance a
and the fixed
d proportion a
are as follow
ws:
e
Name
ation
ed remunera
Fixe
2016
2
7
2017
At risk
k - STI
2017
2016
At risk - LTI
A
7
2017
20
016
rectors:
Non-E
Kip M
Ian C
Trevo
Diane
Executive Dir
McGrath
ampbell
or Folsom
e Pass
gement
Other
Perso
Storm
Jame
Brett
Jackie
Cathe
Julie
Peter
r Key Manag
onnel:
m McGrath
es Street
Edwards
e Burrows
erine Cook
Russell
r Hepp
100%
1
1
100%
1
100%
100%
1
94%
100%
1
90%
89%
95%
95%
95%
100%
100%
100%
-
97%
98%
99%
91%
98%
95%
98%
-
-
-
-
-
-
5%
9%
5%
5%
5%
-
-
-
-
-
-
-
%
9%
%
2%
%
5%
%
2%
-
-
-
-
6%
-
5%
2%
-
-
-
-
-
-
-
3%
2%
1%
-
-
-
-
The p
roportion of t
the cash bon
nus paid duri
ing the year
ended 30 Ju
une 2017 is a
as follows:
Storm Mc
$300,000
Jackie Bu
Other KM
cGrath has e
(nil paid);
rrows has en
P have spec
entitlements t
to performan
nce incentive
es of up to 1
15% of over
budget perf
formance ca
apped at
ntitlement to
cific performa
performance
ance incentiv
e incentives
ves of up to 1
based on sa
15% of salary
ales in the UK
y or $20,000
K market ($1
0 whichever is
5,175 paid),
s higher.
and
10
10
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
Servic
KMP
misco
notice
ce agreeme
have standa
onduct. Term
e. Some KMP
ents
ard contracts
mination can
P has entitlem
of employm
be made by
ments to per
ment that hav
y either the
rformance inc
ve no entitlem
consolidate
centives as d
ment to term
d entity or t
detailed belo
ination paym
the individua
ow:
ments in the e
al subject to
event of rem
one to six
moval for
months’
Storm Mc
$300,000
Jackie Bu
Other KM
cGrath has e
(nil paid);
rrows has en
P have spec
Share
e-based com
mpensation
entitlements t
to performan
nce incentive
es of up to 1
15% of over
budget perf
formance ca
apped at
ntitlement to
cific performa
performance
ance incentiv
e incentives
ves of up to 1
based on sa
15% of salary
ales in the UK
y or $20,000
K market ($1
0 whichever is
5,175 paid),
s higher.
Issue
Detail
during
year e
of options
s of options
g the year, o
ended 30 Jun
over ordinar
r that otherw
ne 2017, are
ry shares gra
wise has affe
e set out belo
anted to direc
ected the rem
ow:
ctors and oth
muneration o
her key man
of directors a
agement pe
nd other key
rsonnel as p
y manageme
part of compe
ent personne
ensation
el for the
and
Addit
tional disclo
osures relati
ing to key m
management
t personnel
The n
number of s
shares in th
e company
held during
g the financ
cial year by
each direct
tor and othe
er members
of key
mana
gement pers
sonnel of the
consolidated
d entity, inclu
uding their p
ersonally rel
ated parties,
, is set out be
elow:
Name
e
Storm
Jame
m McGrath
es Street
Brett
Edwards
Jackie
e Burrows
Peter
Julie
Cathe
r Hepp
Russell
erine Cook
Gra
ant Date
21
28
20
28
20
19
28
19
19
19
19
Nov 2014
Feb 2014
Aug 2014
Feb 2014
Aug 2014
Aug 2016
Feb 2014
Aug 2016
Aug 2016
Aug 2016
Aug 2016
No. of option
granted
ns
Exercise
price
No. of
f options
d during
lapsed
ear
y
1,000,00
200,00
150,00
150,00
150,00
100,00
50,00
100,00
100,00
100,00
100,00
00
00
00
00
00
00
00
00
00
00
00
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
0.350
0.190
0.350
0.190
0.350
0.300
0.190
0.300
0.300
0.300
0.300
-
2
200,000
150,000
1
-
-
-
-
-
-
-
-
There
e have been n
no alteration
to the terms
s or condition
ns of the opti
ions granted
since grant
date.
The te
in this
erms and co
s financial ye
nditions of e
ar or future r
each grant of
reporting yea
f options ove
ars are as fol
er ordinary sh
llows:
hares affecti
ng remunera
ation of direc
ctors and oth
her KMP
Grant
t date
d
No. granted
Ves
ting date
Exercise
Fair
per o
price at gra
value
option
ant date
28 Fe
20 Au
21 No
19 Au
eb 2014
ug 2014
ov 2014
ug 2016
200,000
150,000
1,000,000
500,000
28 F
31 D
31 D
31 D
Feb 2018
Dec 2019
Dec 2019
Dec 2021
$0
$0
$0
$0
0.190
0.350
0.350
0.300
$0.223
$0.172
$0.172
$0.113
Option
option
transf
option
will ve
circum
emplo
emplo
death
ordina
ns granted c
ns. Options
erable excep
ns will rank e
est after all
mstances ex
oyment with
oyment, the h
, disablemen
ary share in t
carry no divid
can only be
pt in special
equally with o
specified ve
xist, such as
the compa
holder has 6
nt or retirem
the company
dend or votin
e exercised
or approved
other ordinar
esting condit
s in the eve
any or wher
60 business
ment, unless
y.
g rights. The
once vested
d circumstan
ry shares an
ions have b
nt of a take
e performan
days to exe
otherwise d
ere were no a
d in the rec
ces and will
d will be sub
been met un
eover. Unves
nce targets
rcise any ve
etermined b
amounts pai
ipient and o
not be listed
bject to an a
less determ
sted options
have not b
ested options
by the board
d or payable
on or prior t
d on the ASX
pplication fo
ined otherw
s will lapse
been met pr
s, or 6 month
. On exercis
e by recipient
to expiry da
X. Shares is
r quotation o
ise by the b
immediately
rior to expir
hs if employ
se, each opt
ts on the gra
te. Options
ssued on exe
on the ASX.
board where
y the holder
ry. On cess
ment ceases
tion converts
anting of
are not
ercise of
Options
special
ceases
ation of
s due to
s to one
Vestin
board
ng of options
which are lin
s is subject t
nked to cent
to meeting a
re number g
a net profit b
rowth, stude
before tax hu
ent number g
urdle, meetin
rowth and on
ng annual pe
n-line busine
erformance i
ess growth.
ndicators se
et by the
11
11
12
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Direct
tors' report
30 Ju
ne 2017
Issue
of shares
Detail
s of shares i
issued to dir
ectors and o
other key ma
anagement p
ersonnel as
part of comp
pensation du
uring the yea
ar ended
30 Jun
ne 2017 are
set out below
w:
On 31
1 August 201
16, upon the
exercise of o
options, 500
0,000 ordinar
ry shares we
re granted to
o Storm McG
Grath at $0.0
075 for a
total v
value of $37,
500 and 350
0,000 ordinar
ry shares we
ere granted to
o James Stre
eet at $0.075
5 for a total v
value of $26,2
250.
Share
eholding
Ordin
nary shares
Kip M
McGrath
Storm
m McGrath
Ian C
ampbell
Jame
es Street *
Jackie
e Burrows
Option
n holding
Storm
m McGrath
Jame
es Street
Brett
Edwards
Jackie
e Burrows
Peter
r Hepp
Julie
Russell
Cathe
erine Cook
compa
any.
Optio
ns over ordin
nary shares
*
D
Disposals/oth
her represen
nts shares he
eld at resigna
ation date.
The n
number of op
ptions over
ordinary sha
ares in the c
company he
ld during the
e financial y
year by each
h director an
nd other
memb
bers of key
managemen
nt personnel
of the cons
solidated ent
tity, including
g their perso
onally related
d parties, is
set out
below
w. Options ha
ave not veste
ed in the hold
der unless ind
dicated othe
rwise.
Bala
ance at
the s
start of
R
Received
a
as part of
the
e year
rem
muneration
Additions
othe
r
Disposa
als/
16,2
227,499
8
833,959
4
446,469
9
995,464
150,000
500,000
350,000
53,53
31
-
-
-
-
(1,345
5,464)
Bala
ance at
the e
end of
the
year
16,2
227,499
1,3
333,959
5
500,000
-
1
150,000
18,6
653,391
850,000
53,53
31
(1,345
5,464)
18,2
211,458
Bala
ance at
the s
start of
the
e year
1,5
500,000
7
700,000
3
300,000
50,000
-
-
-
Granted
Exercised
Expire
ed/
forfeite
ed/
othe
r
Bala
ance at
the e
end of
the
year
(500,00
00)
(350,00
00)
(350
0,000)
100,000
100,000
100,000
100,000
100,000
500,000
-
-
-
-
-
1,0
000,000
-
4
400,000
1
150,000
1
100,000
1
100,000
1
100,000
2,5
550,000
(850,00
00)
(350
0,000)
1,8
850,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Option
ns do not e
entitle the ho
older to rece
eive dividend
ds or any d
distributions
or to partici
pate in any
share issue
e of the
This c
concludes t
the remuner
ration report
t, which has
s been audit
ted.
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
Issue
of shares
Detail
30 Jun
s of shares i
ne 2017 are
issued to dir
set out below
ectors and o
w:
other key ma
anagement p
ersonnel as
part of comp
pensation du
uring the yea
ar ended
On 31
total v
1 August 201
value of $37,
16, upon the
500 and 350
exercise of o
0,000 ordinar
options, 500
ry shares we
0,000 ordinar
ere granted to
ry shares we
o James Stre
re granted to
eet at $0.075
o Storm McG
5 for a total v
Grath at $0.0
value of $26,2
075 for a
250.
Addit
tional disclo
osures relati
ing to key m
management
t personnel
Share
The n
mana
eholding
number of s
gement pers
shares in th
sonnel of the
e company
consolidated
held during
d entity, inclu
g the financ
uding their p
cial year by
ersonally rel
each direct
ated parties,
tor and othe
, is set out be
er members
elow:
of key
Bala
the s
the
ance at
start of
e year
Received
R
a
as part of
muneration
rem
Additions
Disposa
als/
r
othe
Ordin
Kip M
Storm
Ian C
Jame
Jackie
nary shares
McGrath
m McGrath
ampbell
es Street *
e Burrows
227,499
16,2
833,959
8
4
446,469
9
995,464
150,000
653,391
18,6
-
500,000
-
350,000
-
850,000
*
D
Disposals/oth
her represen
nts shares he
eld at resigna
ation date.
53,53
-
-
31
-
-
31
-
-
-
5,464)
-
5,464)
(1,345
53,53
(1,345
Bala
the e
the
ance at
end of
year
227,499
16,2
333,959
1,3
500,000
5
-
1
150,000
211,458
18,2
Option
The n
memb
below
n holding
number of op
bers of key
w. Options ha
ptions over
managemen
ave not veste
ordinary sha
nt personnel
ed in the hold
ares in the c
of the cons
der unless ind
company he
solidated ent
dicated othe
ld during the
tity, including
rwise.
e financial y
g their perso
year by each
onally related
h director an
d parties, is
nd other
set out
ns over ordin
nary shares
Optio
Storm
Jame
Brett
Jackie
Peter
Julie
Cathe
m McGrath
es Street
Edwards
e Burrows
r Hepp
Russell
erine Cook
Bala
the s
the
ance at
start of
e year
500,000
1,5
700,000
7
300,000
3
50,000
-
-
-
550,000
2,5
Granted
Exercised
Expire
ed/
ed/
forfeite
r
othe
Bala
the e
the
ance at
end of
year
-
-
100,000
100,000
100,000
100,000
100,000
500,000
(500,00
(350,00
(350
00)
00)
-
-
-
-
-
00)
-
0,000)
-
-
-
-
-
0,000)
1,0
000,000
-
4
400,000
1
150,000
1
100,000
1
100,000
100,000
1
850,000
1,8
(850,00
(350
Option
compa
ns do not e
any.
entitle the ho
older to rece
eive dividend
ds or any d
distributions
or to partici
pate in any
share issue
e of the
This c
concludes t
the remuner
ration report
t, which has
s been audit
ted.
12
12
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
Share
Uniss
es under opt
ued ordinary
tion
y shares of K
Kip McGrath E
Education C
entres Limite
ed under opt
ion at the da
ate of this rep
port are as fo
ollows:
Grant
t date
28 Fe
20 Au
21 No
2 Sep
4
ebruary 2014
ugust 2014
ovember 201
4
6
ptember 2016
Expiry d
date
28 Febr
31 Dece
31 Dece
31 Dece
ruary 2018
ember 2019
ember 2019
ember 2021
se
Exerci
price
e
Num
mber
r option
under
$0
$0
$0
$0
0.190
0.350
0.350
0.300
2
200,000
1
150,000
000,000
1,0
500,000
5
1,8
850,000
No pe
the co
erson entitled
ompany or of
d to exercise
f any other b
e the options
ody corporat
s had or has
te.
any right by
y virtue of th
he option to p
participate in
n any share
Roun
ding of amo
ounts
issue of
The c
ompany is o
f a kind refer
rred to in AS
SIC Corporat
ions (Round
ing in Financ
cial/Directors
s’ Reports) In
nstrument 20
016/191,
issued
d by the Aus
stralian Secu
urities and I
nvestments
Commission
n, relating to
o 'rounding-o
off'. Amounts
s in this repo
ort have
been
rounded off
in accordanc
ce with that in
nstrument to
o the nearest
thousand do
ollars, or in c
certain cases
s, the neares
st dollar.
Share
The fo
and u
es issued on
ollowing ordi
p to the date
n the exercis
nary shares
e of this repo
se of option
of Kip McGr
rt on the exe
ns
rath Educatio
ercise of optio
on Centres L
Limited were
:
ons granted:
issued durin
ng the year e
ended 30 Jun
ne 2017
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Direct
tors' report
30 Ju
ne 2017
The d
irectors are o
of the opinio
on that the se
ervices as dis
sclosed in no
ote 22 to the
financial sta
atements do
not comprom
mise the
extern
nal auditor's
independenc
ce requireme
ents of the C
orporations A
Act 2001 for
the following
g reasons:
●
a
all non-audit
services hav
ve been revi
ewed and ap
pproved to e
nsure that th
hey do not im
mpact the inte
egrity and ob
bjectivity
of the auditor
o
r; and
●
n
none of the s
services und
dermine the g
general princ
ciples relating
g to auditor
independenc
ce as set out
t in APES 11
10 Code
of Ethics for
o
Professiona
l Accountant
ts issued by
the Account
ting Professi
ional and Eth
hical Standa
ards Board, in
ncluding
reviewing or
r
auditing the
e auditor's ow
wn work, act
ting in a man
nagement or
r decision-m
aking capac
city for the co
ompany,
acting as adv
a
vocate for the
e company o
or jointly sha
ring econom
mic risks and
rewards.
Office
ers of the co
ompany who
o are former
r partners o
of PKF Newc
castle
There
e are no office
ers of the co
ompany who
are former p
partners of P
KF Newcast
le.
A cop
py of the aud
ditor's indepe
endence dec
claration as r
required und
er section 3
07C of the C
Corporations
s Act 2001 is
s set out
Audit
tor's indepe
ndence dec
claration
immed
diately after t
this directors
s' report.
PKF N
Newcastle co
ontinues in of
ffice in accor
rdance with s
section 327 o
of the Corpo
orations Act 2
2001.
This r
report is ma
de in accord
dance with a
a resolution
of directors,
, pursuant to
o section 29
98(2)(a) of th
he Corporati
ons Act
_____
__________
___________
____
Kip M
McGrath
Chair
rman
9 Aug
gust 2017
Newc
castle
During
compa
betwe
g the financia
any against a
een amounts
al year, the c
a liability to t
relating to th
company pai
the extent pe
he insurance
d a premium
ermitted by th
e against lega
m in respect o
he Corporati
al costs and
of a contract
ons Act 200
those relatin
to insure the
1. It is not po
ng to other lia
e directors a
ossible to ap
abilities.
nd executive
portion the p
es of the
premium
se
Exerci
price
e
Num
shares
mber of
s issued
$0
0.075
850,000
8
Audit
tor
2001.
Indem
The c
or exe
mnity and in
ompany has
ecutive, for w
surance of
indemnified
which they ma
officers
the directors
ay be held p
Indem
The c
compa
mnity and in
company has
any or any re
surance of
s not, during
elated entity
auditor
or since the
against a lia
s and execut
ersonally liab
tives of the c
ble, except w
company for
where there i
costs incurre
s a lack of g
ed, in their ca
ood faith.
director
On be
ehalf of the d
irectors
e end of the
ability incurre
financial yea
d by the aud
ar, indemnifie
ditor.
Date
options gran
nted
31 Ma
arch 2012
ed or agreed
d to indemni
fy the audito
or of the
apacity as a
During
or any
g the financia
y related enti
al year, the c
ity.
company has
s not paid a p
premium in r
respect of a c
contract to in
nsure the aud
ditor of the c
ompany
Proce
No pe
behalf
respo
eedings on b
erson has ap
f of the com
nsibility on b
behalf of the
pplied to the
mpany, or to
behalf of the c
e company
e Court unde
intervene in
company for
er section 23
n any proce
r all or part of
37 of the Co
edings to w
f those proce
orporations A
which the com
eedings.
Act 2001 for
mpany is a
r leave to br
party for the
ring proceed
e purpose o
dings on
of taking
Non-a
Detail
are ou
audit service
s of the amo
utlined in not
es
ounts paid or
te 22 to the f
r payable to t
inancial state
the auditor fo
ements.
or non-audit
services pro
vided during
g the financia
al year by the
e auditor
The d
perso
the Co
directors are
n or firm on
orporations A
Act 2001.
satisfied tha
the auditor's
at the provisi
s behalf), is
ion of non-a
compatible
udit services
with the gen
s during the
neral standar
financial yea
rd of indepe
ar, by the au
ndence for a
uditor (or by
auditors impo
another
osed by
13
13
14
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
Direct
30 Ju
McGrath Edu
tors' report
ne 2017
ucation Cent
d
tres Limited
irectors are o
The d
nal auditor's
extern
a
all non-audit
●
o
of the auditor
n
none of the s
of Ethics for
o
r
reviewing or
acting as adv
a
of the opinio
independenc
services hav
r; and
services und
Professiona
auditing the
vocate for the
●
on that the se
ce requireme
ve been revi
ervices as dis
ents of the C
ewed and ap
sclosed in no
orporations A
pproved to e
ote 22 to the
Act 2001 for
nsure that th
financial sta
the following
hey do not im
atements do
g reasons:
mpact the inte
not comprom
mise the
egrity and ob
bjectivity
dermine the g
l Accountant
e auditor's ow
e company o
general princ
ts issued by
wn work, act
or jointly sha
ciples relating
the Account
ting in a man
ring econom
g to auditor
ting Professi
nagement or
mic risks and
independenc
ional and Eth
r decision-m
rewards.
ce as set out
hical Standa
aking capac
t in APES 11
ards Board, in
city for the co
10 Code
ncluding
ompany,
Office
There
ers of the co
e are no office
ompany who
ers of the co
o are former
ompany who
r partners o
are former p
of PKF Newc
partners of P
castle
KF Newcast
le.
Roun
The c
issued
been
ding of amo
ompany is o
d by the Aus
rounded off
ounts
f a kind refer
stralian Secu
in accordanc
rred to in AS
urities and I
ce with that in
SIC Corporat
nvestments
nstrument to
ions (Round
Commission
o the nearest
ing in Financ
n, relating to
thousand do
cial/Directors
o 'rounding-o
ollars, or in c
s’ Reports) In
off'. Amounts
certain cases
nstrument 20
s in this repo
s, the neares
016/191,
ort have
st dollar.
Audit
A cop
immed
tor's indepe
py of the aud
diately after t
ndence dec
ditor's indepe
this directors
claration
endence dec
s' report.
claration as r
required und
er section 3
07C of the C
Corporations
s Act 2001 is
s set out
Audit
PKF N
tor
Newcastle co
ontinues in of
ffice in accor
rdance with s
section 327 o
of the Corpo
orations Act 2
2001.
report is ma
de in accord
dance with a
a resolution
This r
2001.
of directors,
, pursuant to
o section 29
98(2)(a) of th
he Corporati
ons Act
On be
ehalf of the d
irectors
_____
Kip M
Chair
__________
McGrath
rman
___________
____
9 Aug
Newc
gust 2017
castle
14
14
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip McGrath Education Centres Limited
ACN: 003 415 889
Auditor’s Independence Declaration under section 307C of the Corporations Act 2001
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the
audit of Kip McGrath Education Centres Limited for the year ended 30 June 2017, I declare that, to the best
of my knowledge and belief, there have been:
(i) No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
(ii) No contraventions of any applicable code of professional conduct in relation to the audit.
PKF
CHARTERED ACCOUNTANTS
MARTIN MATTHEWS
PARTNER
9 AUGUST 2017
NEWCASTLE, NSW
PKF(NS) Audit & Assurance Limited
Partnership
ABN 91 850 861 839
Liability limited by a scheme
approved under Professional
Standards Legislation
Sydney
Newcastle
Level 8, 1 O’Connell Street
Sydney NSW 2000 Australia
GPO Box 5446 Sydney NSW 2001
755 Hunter Street
Newcastle West NSW 2302 Australia
PO Box 2368 Dangar NSW 2309
p
f
+61 2 8346 6000
+61 2 8346 6099
p
f
+61 2 4962 2688
+61 2 4962 3245
PKF(NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of legally independent firms and does not
accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.
For office locations visit www.pkf.com.au
15
15
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Corpo
orate govern
nance state
ment
30 Ju
ne 2017
This C
Corporate G
overnance S
Statement of
f Kip McGra
ath Education
n Centres Li
imited (the ‘c
company’) h
has been pre
epared in
accord
dance with
the 3rd Edit
ion of the A
Australian Se
ecurities Ex
change’s (‘A
ASX’) Corpo
orate Govern
nance Princi
ples and
Recom
mmendations
s of the ASX
X Corporate
Governance
e Council (‘A
ASX Principle
es and Reco
mmendation
ns’) and is in
cluded in
the co
ompany’s An
nnual Report
t pursuant to
o ASX Listin
g Rule 4.10
.3. This listin
ng rule requ
ires the com
mpany to disc
close the
extent
t to which it h
has followed
the recomm
mendations d
uring the fina
ancial year, i
ncluding rea
asons where
the compan
y has not
follow
wed a recomm
mendation an
nd any relate
ed alternative
e governance
e practice ad
dopted.
Both t
this Corporat
te Governan
nce Statemen
nt and the AS
SX Appendix
x 4G have b
een lodged w
with the ASX
X. This statem
ment has
been
approved by
y the compan
ny’s Board of
f Directors (‘B
Board’) and i
is current as
at 25 Augus
st 2017.
The A
ASX Princip
ples and Re
ecommendat
tions and th
he company
y’s response
e as to how
w and whet
ther it follow
ws those
recom
mmendations
are set out
below.
Princ
iple 1: Lay s
solid founda
ations for m
management
t and oversig
ght
Recom
mmendation
1.1 - A lis
sted entity s
should disclo
ose: (a) the
e respective
roles and r
responsibiliti
ies of its bo
oard and
manag
gement; and
d (b) those m
matters expre
ssly reserve
d to the boar
rd and those
e delegated to
o manageme
ent.
The B
Board is ultim
mately accou
untable for t
the performa
ance of the c
company an
nd provides l
leadership a
and sets the
strategic
object
tives of the c
company. It a
appoints all s
senior execu
tives and ass
sesses their
performance
e on at least
an annual b
basis. It is
respo
nsible for ov
verseeing all
corporate re
eporting syst
tems, remun
neration fram
meworks, gov
vernance iss
ues, and sta
akeholder
comm
munications. D
Decisions re
served for th
he Board rela
ate to those
that have a f
fundamental
impact on th
he company
y, such as
mater
rial acquisitio
ons and take
eovers, divid
ends and bu
uy-backs, m
aterial profit
s upgrades
and downgr
rades, and s
significant
Mana
gement is re
esponsible fo
or implement
ing Board st
rategy, day-t
to-day opera
ational aspec
cts, and ensu
uring that all
risks and
perfor
rmance issue
es are broug
ht to the Boa
ards attentio
n. They mus
st operate wi
thin the risk
and authoris
sation param
meters set
closur
res.
by the
e Board.
Recom
mmendation
1.2 - A list
ted entity sh
hould: (a) un
ndertake app
propriate ch
ecks before
appointing
a person, o
or putting
forwar
rd to securi
ity holders a
a candidate
for election
n, as a dire
ctor; and (b
b) provide s
security hold
ders with all
l material
inform
mation in its p
possession re
elevant to a
decision on w
whether or n
not to elect or
r re-elect a d
director.
The c
ompany und
dertakes com
mprehensive
reference ch
hecks prior to
o appointing
a director, o
or putting that
t person forw
ward as a
candid
date, to ensu
ure that pers
son is comp
petent, exper
rienced, and
would not b
be impaired
in any way
from underta
aking the
duties
s of director.
The compan
ny provides
relevant info
ormation to s
shareholders
for their con
nsideration a
about the attr
ributes of
candid
dates togeth
er with whet
her the Boar
rd supports th
he appointm
ent or re-ele
ection.
Recom
mmendation
1.3 - A liste
ed entity sho
ould have a w
written agree
ement with e
each director
r and senior
executive se
etting out
the te
rms of their a
appointment
t.
The te
erms of the a
appointment
of non-exec
utive directo
rs, executive
e directors an
nd senior exe
ecutives are
agreed upon
n and set
out in
writing at the
e time of app
pointment.
Recom
mmendation
1.4 - The c
company sec
cretary of a l
listed entity
should be a
accountable d
directly to th
he board, thr
rough the
chair,
on all matte
rs to do with
the proper f
functioning o
of the board.
The C
Company Sec
cretary repo
rts directly to
o the Board
through the
Chairman on
n all matters
to do with t
he proper fu
nctioning
of the
board and is
s accessible
to all directo
ors.
Recom
mmendation
1.5 - A liste
ed entity sh
ould (a) hav
ve a diversity
ty policy whi
ich includes
requirement
ts for the bo
oard or a
releva
ant committe
e of the boar
rd to set mea
asurable obj
jectives for a
achieving gen
nder diversity
y and to asse
ess annually
y both the
object
tives and the
e entity’s pro
ogress in ach
hieving them;
; (b) disclose
e that policy
or a summa
ary of it; and
(c) disclose
as at the
end o
of each repo
orting period
d the measu
urable object
tives for ach
hieving gend
der diversity
y set by the
board or a
relevant
comm
mittee of the b
board in acc
cordance with
h the entity’s
s diversity po
olicy and its p
progress tow
wards achiev
ving them, an
nd either:
(1) th
he respective
e proportions
s of men a
nd women
on the Boar
rd, in senior
r executive
positions an
nd across th
he whole
organ
isation (inclu
uding how th
he entity has
s defined “se
enior executi
ive” for these
e purposes);
; or (2) if the
e entity is a
“relevant
emplo
oyer” under th
he Workplac
ce Gender Eq
quality Act, t
the entity’s m
most recent “G
Gender Equa
ality Indicato
ors”, as define
ed in and
publis
shed under th
hat Act.
16
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
Corpo
30 Ju
McGrath Edu
orate govern
ne 2017
ucation Cent
nance state
d
tres Limited
ment
This C
accord
Recom
the co
extent
follow
Corporate G
dance with
mmendations
ompany’s An
t to which it h
wed a recomm
overnance S
the 3rd Edit
s of the ASX
nnual Report
has followed
mendation an
Statement of
ion of the A
X Corporate
t pursuant to
the recomm
nd any relate
f Kip McGra
Australian Se
Governance
o ASX Listin
mendations d
ed alternative
ath Education
ecurities Ex
e Council (‘A
g Rule 4.10
uring the fina
e governance
n Centres Li
change’s (‘A
ASX Principle
.3. This listin
ancial year, i
e practice ad
imited (the ‘c
ASX’) Corpo
es and Reco
ng rule requ
ncluding rea
dopted.
company’) h
orate Govern
mmendation
ires the com
asons where
has been pre
nance Princi
ns’) and is in
mpany to disc
the compan
epared in
ples and
cluded in
close the
y has not
Both t
been
this Corporat
approved by
te Governan
y the compan
nce Statemen
ny’s Board of
nt and the AS
f Directors (‘B
SX Appendix
Board’) and i
x 4G have b
is current as
een lodged w
at 25 Augus
with the ASX
st 2017.
X. This statem
ment has
The A
recom
ASX Princip
mmendations
ples and Re
are set out
ecommendat
below.
tions and th
he company
y’s response
e as to how
w and whet
ther it follow
ws those
Princ
iple 1: Lay s
solid founda
ations for m
management
t and oversig
ght
Recom
manag
mmendation
gement; and
1.1 - A lis
d (b) those m
sted entity s
matters expre
should disclo
ssly reserve
ose: (a) the
d to the boar
e respective
rd and those
roles and r
e delegated to
responsibiliti
o manageme
ies of its bo
ent.
oard and
The B
object
respo
comm
mater
closur
Board is ultim
tives of the c
nsible for ov
munications. D
rial acquisitio
res.
mately accou
company. It a
verseeing all
Decisions re
ons and take
untable for t
appoints all s
corporate re
served for th
eovers, divid
the performa
senior execu
eporting syst
he Board rela
ends and bu
ance of the c
tives and ass
tems, remun
ate to those
uy-backs, m
company an
sesses their
neration fram
that have a f
aterial profit
nd provides l
performance
meworks, gov
fundamental
s upgrades
leadership a
e on at least
vernance iss
impact on th
and downgr
and sets the
an annual b
ues, and sta
he company
rades, and s
strategic
basis. It is
akeholder
y, such as
significant
Mana
perfor
by the
gement is re
rmance issue
e Board.
esponsible fo
es are broug
or implement
ht to the Boa
ing Board st
ards attentio
rategy, day-t
n. They mus
to-day opera
st operate wi
ational aspec
thin the risk
cts, and ensu
and authoris
uring that all
sation param
risks and
meters set
Recom
forwar
inform
mmendation
rd to securi
mation in its p
1.2 - A list
ity holders a
possession re
ted entity sh
a candidate
elevant to a
hould: (a) un
for election
decision on w
ndertake app
n, as a dire
whether or n
propriate ch
ctor; and (b
not to elect or
ecks before
b) provide s
r re-elect a d
appointing
security hold
director.
a person, o
ders with all
or putting
l material
The c
candid
duties
candid
ompany und
date, to ensu
s of director.
dates togeth
dertakes com
ure that pers
The compan
er with whet
mprehensive
son is comp
ny provides
her the Boar
reference ch
petent, exper
relevant info
rd supports th
hecks prior to
rienced, and
ormation to s
he appointm
o appointing
would not b
shareholders
ent or re-ele
ection.
a director, o
be impaired
for their con
or putting that
in any way
nsideration a
t person forw
from underta
about the attr
ward as a
aking the
ributes of
Recom
the te
mmendation
rms of their a
1.3 - A liste
ed entity sho
t.
appointment
ould have a w
written agree
ement with e
each director
r and senior
executive se
etting out
The te
out in
erms of the a
writing at the
appointment
e time of app
of non-exec
pointment.
utive directo
rs, executive
e directors an
nd senior exe
ecutives are
agreed upon
n and set
Recom
chair,
mmendation
on all matte
1.4 - The c
rs to do with
company sec
the proper f
cretary of a l
functioning o
listed entity
of the board.
should be a
accountable d
directly to th
he board, thr
rough the
The C
of the
Company Sec
board and is
cretary repo
s accessible
rts directly to
to all directo
o the Board
ors.
through the
Chairman on
n all matters
to do with t
he proper fu
nctioning
Recom
releva
object
end o
comm
(1) th
organ
emplo
publis
mmendation
ant committe
tives and the
of each repo
mittee of the b
he respective
isation (inclu
oyer” under th
shed under th
1.5 - A liste
e of the boar
e entity’s pro
orting period
board in acc
e proportions
uding how th
he Workplac
hat Act.
ed entity sh
rd to set mea
ogress in ach
d the measu
cordance with
s of men a
he entity has
ce Gender Eq
ould (a) hav
asurable obj
hieving them;
urable object
h the entity’s
nd women
s defined “se
quality Act, t
ve a diversity
jectives for a
; (b) disclose
tives for ach
s diversity po
on the Boar
enior executi
the entity’s m
ty policy whi
achieving gen
e that policy
hieving gend
olicy and its p
rd, in senior
ive” for these
most recent “G
ich includes
nder diversity
or a summa
der diversity
progress tow
r executive
e purposes);
Gender Equa
requirement
y and to asse
ary of it; and
y set by the
wards achiev
positions an
; or (2) if the
ality Indicato
ts for the bo
ess annually
(c) disclose
board or a
ving them, an
nd across th
e entity is a
ors”, as define
oard or a
y both the
as at the
relevant
nd either:
he whole
“relevant
ed in and
16
16
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Corpo
30 Ju
McGrath Edu
orate govern
ne 2017
ucation Cent
nance state
d
tres Limited
ment
The c
object
achiev
company has
tives for ach
ving them.
s a diversity
ieving divers
policy appro
sity, including
oved by the
g gender, an
Board, whic
nd to assess
h includes re
s annually bo
equirements
oth the objec
for the Boa
ctives and th
ard to set me
e entity’s pro
easurable
ogress in
The c
values
comm
company is c
s, backgroun
mitted to equa
committed to
nds and exp
ality and resp
o providing
periences bri
pect in all loc
an inclusive
ng to the co
cations it ope
workplace
ompany. As
erates.
and recogni
a global pro
ses the valu
ovider of edu
ue individua
ucation serv
ls with diver
ices, the com
rse skills,
mpany is
Divers
differe
dimen
sity is recogn
ent skills, ex
nsions such a
nising and v
xperiences a
as lifestyle, e
valuing the u
and perspec
education, ph
unique contri
ctives. Peop
hysical ability
bution peop
le differ not
y, age and fa
le can make
t just on the
amily respons
e because of
e basis of r
sibility.
f their individ
race and ge
dual backgro
ender, but a
ound and
lso other
The B
Senio
to me
Board’s meas
r Executive r
n was as foll
surable obje
roles and thi
lows:
ective about
s objective is
gender dive
s being cont
rsity is to pr
inually review
rogressively
wed. As at th
increase the
he date of th
e portion of w
is report the
women in B
proportion o
oard and
of women
On the
In sen
Acros
e board
nior executive
s the whole
e positions
organisation
Proportion
women
of
Prop
portion of
men
25%
50%
79%
75%
50%
21%
For th
that a
standi
specia
his purpose,
ffect the who
ing. This the
alised profes
the Board d
ole or a subs
erefore inclu
ssionals.
efines a sen
stantial part
udes all sen
nior executive
of the busin
nior manage
e as a perso
ness or has t
ment and s
on who make
the capacity
senior execu
es, or partici
to affect sig
utive designa
pates in the
gnificantly the
ated position
making of, d
e company’s
ns as well a
decisions
s financial
as senior
No en
and th
ntity within th
herefore no G
he consolidat
Gender Equa
ted entity is a
ality Indicator
a ‘relevant e
rs to be discl
mployer’ for
losed.
the purpose
es of the Wor
rkplace Gend
der Equality
Act 2012
Extern
nal consultan
nts may be b
brought in w
with specialis
t knowledge
e to address
areas where
e this is an a
attribute defi
iciency in
Recom
the B
perfor
mmendation
Board, its co
rmance evalu
1.6 - A liste
ommittees a
uation was u
d entity shou
nd individua
undertaken in
uld (a) have
al directors;
n the reportin
and disclose
and (b) dis
ng period in a
e a process
sclose, in re
accordance w
for periodica
elation to ea
with that proc
ally evaluatin
ach reportin
cess.
ng the perform
g period, w
mance of
whether a
The c
individ
identif
each B
memb
sugge
company doe
dual director
fy general as
Board memb
bers, their ro
estions for ind
es not curre
rs. The Boar
spects of its
ber. Such rev
les on specif
dividual deve
ntly have a
rd conducts
performanc
views therefo
fic projects d
elopment or
formal proce
an introspec
ce that could
ore encapsul
during the fin
performance
ess for evalu
ctive annual
be improve
late collectiv
nancial year,
e improveme
uating the pe
discussion
d upon, and
e discussion
and where
ent for the fut
erformance
of its perfor
d such analys
n around the
relevant, how
ture.
of the Board
rmance on a
sis includes
performance
w their role c
d, its commi
a collective b
the roles pla
e of individua
could be mod
ttees or
basis to
ayed by
al Board
dified or
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Corpo
orate govern
nance state
ment
30 Ju
ne 2017
Princ
iple 2: Struc
cture the bo
oard to add v
value
Recom
mmendation
2.1 - The b
board of a lis
sted entity sh
hould (a) ha
ave a nomina
ation commit
ttee which: (
(1) has at le
east three
memb
bers, a major
rity of whom
are indepen
ndent directo
rs; and (2) is
s chaired by
an independ
dent director,
, and disclos
se: (3) the
charte
er of the com
mmittee; (4) t
the members
s of the com
mmittee; and
(5) as at the
e end of eac
h reporting p
period, the n
number of
times
the committ
tee met throu
ughout the p
eriod and th
e individual a
attendances
of the mem
bers at those
e meetings;
or (b) if it
does n
not have a n
nomination co
ommittee, dis
isclose that f
fact and the p
processes it
employs to a
address Boa
ard successio
on issues
and to
o ensure tha
at the board
has the app
propriate bala
ance of skills
s, knowledge
e, experienc
ce, independ
dence and di
iversity to
enable
e it to discha
arge its duties
s and respon
nsibilities effe
ectively.
The B
Board does n
ot maintain a
a Nomination
n Committee
e as it is cons
sidered that t
the current s
size of the Bo
oard does no
ot warrant
the fo
ormal establis
shment of a
separate co
ommittee. Th
he Board the
erefore perfo
orms the fun
nction of suc
h a committ
tee which
includ
es the ident
ification of s
kills and com
mpetencies r
required for t
the Board an
nd related co
ommittees, a
s well as no
mination,
select
tion and perf
formance eva
aluation of n
non-executive
e directors. T
The Board do
oes not activ
vely manage
e succession
planning
and i
nstead relie
es upon the
Board’s ex
xtensive net
tworking cap
pabilities an
d/or execut
ive recruitm
ment firms to
o identify
appro
priate candid
dates when
a Board vac
cancy occurs
s or when a
vacancy is o
otherwise en
nvisaged. Att
tributes of ca
andidates
put fo
rward will be
e considered
for ‘best-fit’
to the needs
s of the Board
d which are a
assessed at
the time of t
the vacancy.
Recom
mmendation
2.2 - A listed
d entity shou
uld have and
d disclose a b
board skills m
matrix setting
g out the mix
of skills and
d diversity
that th
he board curr
rrently has or
r is looking to
o achieve in i
its members
hip.
The B
Board does
not maintain
n a formal s
kills matrix t
that sets out
t the mix of
skills and d
diversity that
t the Board
aims to
achiev
ve in its mem
mbership. Th
he current Bo
oard membe
ers represen
t individuals
that have e
xtensive ind
ustry experie
ence as
well a
as professio
nals that br
ring to the
Board their
specific ski
lls in order
for the com
mpany to ac
chieve its st
trategic,
opera
tional and co
ompliance o
bjectives. Th
heir suitability
y to the direc
ctorship has
therefore be
een determin
ned primarily
y on the
basis
of their abilit
ty to deliver
outcomes in
n accordance
e with the co
ompany’s sho
ort and longe
er term objec
ctives and th
herefore
delive
er value to sh
hareholders.
All Bo
oard member
rs are expect
ted to be abl
e to demons
strate the foll
owing attribu
utes:
the Bo
oard.
Boar
rd member
attrib
butes
Lead
dership
Rep
resents the
company po
ositively amo
ongst stakeho
olders and e
external part
ies; decisive
ely acts
ensu
uring that all
pertinent fac
cts are consi
dered; leads
s others to ac
ction; proacti
ve solution s
seeker.
Ethic
cs and integr
rity
Awa
areness of
social, profe
essional an
d legal res
sponsibilities
at individu
ual, compan
ny and
com
munity leve
el; ability to
o identify i
independenc
ce conflicts;
; applies s
sound profe
ssional
judg
ement; iden
tifies when
external cou
unsel should
d be sought;
upholds Bo
oard confide
ntiality;
Com
mmunication
Effec
ctive in work
king within d
efined corpo
orate commu
unications po
olicies; make
es constructi
ve and
prec
cise contribut
tion to the B
Board both v
verbally and
in written fo
orm; an effec
ctive commu
unicator
resp
pectful in eve
ery situation.
with
executives.
Nego
otiation
Corp
porate
gove
ernance
Neg
otiation skills
s which enge
ender stakeh
holder suppo
rt for implem
menting Board
d decisions.
Expe
erienced dire
ector that is
s familiar wi
th the mech
hanisms, co
ntrols and c
channels to
deliver
effec
ctive governa
ance and ma
anage risks.
Recom
mmendation
2.3 - A list
ted entity sh
hould disclo
se: (a) the
names of th
he directors
considered
by the boa
ard to be
indepe
endent direc
ctors; (b) if a
director has
s an interest,
, position, as
ssociation or
r relationship
p of the type
described in
n Box 2.3
but th
he board is o
of the opinio
on that it doe
es not comp
promise the
independen
ce of the dir
rector, the n
nature of the
e interest,
positio
on, associati
ion or relatio
nship in que
estion and an
n explanation
n of why the
board is of
that opinion;
; and (c) the
length of
servic
ce of each dir
rector.
Recom
its se
under
mmendation
enior executi
rtaken in the
1.7 - A liste
ives; and (b
reporting pe
d entity shou
b) disclose,
eriod in accor
uld (a) have
in relation
rdance with t
e a process
and disclose
to each rep
porting perio
.
that process.
for periodica
od, whether
ally evaluatin
r a performa
ng the perform
ance evalua
mance of
ation was
The B
the sta
individ
overa
Board conduc
art of the yea
dual, the rev
ll performanc
cts an annua
ar. The CEO
view includes
ce of the com
al performan
O undertakes
s considerat
mpany. The m
ce assessm
the same as
tion of the s
most recent
ent of the C
ssessments
senior execu
review was c
EO against a
of senior exe
tive’s functio
completed in
agreed perfo
ecutives. In
on, individua
n July 2017.
ormance mea
assessing th
al targets, gr
asures deter
he performan
roup targets,
rmined at
nce of the
, and the
17
17
18
Until s
such p
such time as
performance
s the compan
e evaluation i
ny expands t
s suitable fo
to justify an e
r the compan
expansion of
ny.
f Board mem
mbers, the Bo
oard is of the
e current op
inion that
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Corpo
orate govern
nance state
ment
30 Ju
ne 2017
The c
company has
s a diversity
policy appro
oved by the
Board, whic
h includes re
equirements
for the Boa
ard to set me
easurable
object
tives for ach
ieving divers
sity, including
g gender, an
nd to assess
s annually bo
oth the objec
ctives and th
e entity’s pro
ogress in
achiev
ving them.
The c
company is c
committed to
o providing
an inclusive
workplace
and recogni
ses the valu
ue individua
ls with diver
rse skills,
values
s, backgroun
nds and exp
periences bri
ng to the co
ompany. As
a global pro
ovider of edu
ucation serv
ices, the com
mpany is
comm
mitted to equa
ality and resp
pect in all loc
cations it ope
erates.
Divers
sity is recogn
nising and v
valuing the u
unique contri
bution peop
le can make
e because of
f their individ
dual backgro
ound and
differe
ent skills, ex
xperiences a
and perspec
ctives. Peop
le differ not
t just on the
e basis of r
race and ge
ender, but a
lso other
dimen
nsions such a
as lifestyle, e
education, ph
hysical ability
y, age and fa
amily respons
sibility.
The B
Board’s meas
surable obje
ective about
gender dive
rsity is to pr
rogressively
increase the
e portion of w
women in B
oard and
Senio
r Executive r
roles and thi
s objective is
s being cont
inually review
wed. As at th
he date of th
is report the
proportion o
of women
to me
n was as foll
lows:
On the
e board
In sen
nior executive
e positions
Acros
s the whole
organisation
Proportion
of
Prop
portion of
women
25%
50%
79%
men
75%
50%
21%
For th
his purpose,
the Board d
efines a sen
nior executive
e as a perso
on who make
es, or partici
pates in the
making of, d
decisions
that a
ffect the who
ole or a subs
stantial part
of the busin
ness or has t
the capacity
to affect sig
gnificantly the
e company’s
s financial
standi
ing. This the
erefore inclu
udes all sen
nior manage
ment and s
senior execu
utive designa
ated position
ns as well a
as senior
specia
alised profes
ssionals.
No en
ntity within th
he consolidat
ted entity is a
a ‘relevant e
mployer’ for
the purpose
es of the Wor
rkplace Gend
der Equality
Act 2012
and th
herefore no G
Gender Equa
ality Indicator
rs to be discl
losed.
Recom
mmendation
1.6 - A liste
d entity shou
uld (a) have
and disclose
e a process
for periodica
ally evaluatin
ng the perform
mance of
the B
Board, its co
ommittees a
nd individua
al directors;
and (b) dis
sclose, in re
elation to ea
ach reportin
g period, w
whether a
perfor
rmance evalu
uation was u
undertaken in
n the reportin
ng period in a
accordance w
with that proc
cess.
The c
company doe
es not curre
ntly have a
formal proce
ess for evalu
uating the pe
erformance
of the Board
d, its commi
ttees or
individ
dual director
rs. The Boar
rd conducts
an introspec
ctive annual
discussion
of its perfor
rmance on a
a collective b
basis to
identif
fy general as
spects of its
performanc
ce that could
be improve
d upon, and
d such analys
sis includes
the roles pla
ayed by
each B
Board memb
ber. Such rev
views therefo
ore encapsul
late collectiv
e discussion
n around the
performance
e of individua
al Board
memb
bers, their ro
les on specif
fic projects d
during the fin
nancial year,
and where
relevant, how
w their role c
could be mod
dified or
sugge
estions for ind
dividual deve
elopment or
performance
e improveme
ent for the fut
ture.
Until s
such time as
s the compan
ny expands t
to justify an e
expansion of
f Board mem
mbers, the Bo
oard is of the
e current op
inion that
such p
performance
e evaluation i
s suitable fo
r the compan
ny.
Recom
mmendation
1.7 - A liste
d entity shou
uld (a) have
and disclose
e a process
for periodica
ally evaluatin
ng the perform
mance of
its se
enior executi
ives; and (b
b) disclose,
in relation
to each rep
porting perio
od, whether
r a performa
ance evalua
ation was
under
rtaken in the
reporting pe
eriod in accor
rdance with t
that process.
.
The B
Board conduc
cts an annua
al performan
ce assessm
ent of the C
EO against a
agreed perfo
ormance mea
asures deter
rmined at
the sta
art of the yea
ar. The CEO
O undertakes
the same as
ssessments
of senior exe
ecutives. In
assessing th
he performan
nce of the
individ
dual, the rev
view includes
s considerat
tion of the s
senior execu
tive’s functio
on, individua
al targets, gr
roup targets,
, and the
overa
ll performanc
ce of the com
mpany. The m
most recent
review was c
completed in
n July 2017.
Kip M
Corpo
30 Ju
McGrath Edu
orate govern
ne 2017
ucation Cent
nance state
d
tres Limited
ment
Princ
iple 2: Struc
cture the bo
oard to add v
value
Recom
memb
charte
times
does n
and to
enable
mmendation
bers, a major
er of the com
the committ
not have a n
o ensure tha
e it to discha
2.1 - The b
rity of whom
mmittee; (4) t
tee met throu
nomination co
at the board
arge its duties
board of a lis
are indepen
the members
ughout the p
ommittee, dis
has the app
s and respon
sted entity sh
ndent directo
s of the com
eriod and th
isclose that f
propriate bala
nsibilities effe
hould (a) ha
rs; and (2) is
mmittee; and
e individual a
fact and the p
ance of skills
ectively.
ave a nomina
s chaired by
(5) as at the
attendances
processes it
s, knowledge
ation commit
an independ
e end of eac
of the mem
employs to a
e, experienc
ttee which: (
dent director,
h reporting p
bers at those
address Boa
ce, independ
(1) has at le
, and disclos
period, the n
e meetings;
ard successio
dence and di
east three
se: (3) the
number of
or (b) if it
on issues
iversity to
The B
the fo
includ
select
and i
appro
put fo
Board does n
ormal establis
es the ident
tion and perf
nstead relie
priate candid
rward will be
ot maintain a
shment of a
ification of s
formance eva
es upon the
dates when
e considered
a Nomination
separate co
kills and com
aluation of n
Board’s ex
a Board vac
for ‘best-fit’
n Committee
ommittee. Th
mpetencies r
non-executive
xtensive net
cancy occurs
to the needs
e as it is cons
he Board the
required for t
e directors. T
tworking cap
s or when a
s of the Board
sidered that t
erefore perfo
the Board an
The Board do
pabilities an
vacancy is o
d which are a
the current s
orms the fun
nd related co
oes not activ
d/or execut
otherwise en
assessed at
size of the Bo
nction of suc
ommittees, a
vely manage
ive recruitm
nvisaged. Att
the time of t
oard does no
h a committ
s well as no
e succession
ment firms to
tributes of ca
the vacancy.
ot warrant
tee which
mination,
planning
o identify
andidates
Recom
that th
mmendation
he board curr
2.2 - A listed
rrently has or
d entity shou
r is looking to
uld have and
o achieve in i
d disclose a b
its members
board skills m
hip.
matrix setting
g out the mix
of skills and
d diversity
The B
achiev
well a
opera
basis
delive
Board does
ve in its mem
as professio
tional and co
of their abilit
er value to sh
not maintain
mbership. Th
nals that br
ompliance o
ty to deliver
hareholders.
n a formal s
he current Bo
ring to the
bjectives. Th
outcomes in
kills matrix t
oard membe
Board their
heir suitability
n accordance
that sets out
ers represen
specific ski
y to the direc
e with the co
t the mix of
t individuals
lls in order
ctorship has
ompany’s sho
skills and d
that have e
for the com
therefore be
ort and longe
diversity that
xtensive ind
mpany to ac
een determin
er term objec
t the Board
ustry experie
chieve its st
ned primarily
ctives and th
aims to
ence as
trategic,
y on the
herefore
Extern
the Bo
nal consultan
oard.
nts may be b
brought in w
with specialis
t knowledge
e to address
areas where
e this is an a
attribute defi
iciency in
All Bo
oard member
rs are expect
ted to be abl
e to demons
strate the foll
owing attribu
utes:
Boar
attrib
rd member
butes
Lead
dership
Ethic
cs and integr
rity
Com
mmunication
Nego
otiation
Corp
gove
porate
ernance
Rep
ensu
resents the
uring that all
company po
pertinent fac
ositively amo
cts are consi
ongst stakeho
dered; leads
olders and e
s others to ac
external part
ction; proacti
ies; decisive
ve solution s
ely acts
seeker.
Awa
com
judg
resp
areness of
munity leve
ement; iden
pectful in eve
social, profe
el; ability to
tifies when
ery situation.
essional an
o identify i
external cou
d legal res
independenc
unsel should
sponsibilities
ce conflicts;
d be sought;
at individu
; applies s
upholds Bo
ual, compan
sound profe
oard confide
ny and
ssional
ntiality;
Effec
prec
with
ctive in work
cise contribut
executives.
king within d
tion to the B
efined corpo
Board both v
orate commu
verbally and
unications po
in written fo
olicies; make
orm; an effec
es constructi
ctive commu
ve and
unicator
Neg
otiation skills
s which enge
ender stakeh
holder suppo
rt for implem
menting Board
d decisions.
Expe
effec
erienced dire
ctive governa
ector that is
ance and ma
s familiar wi
anage risks.
th the mech
hanisms, co
ntrols and c
channels to
deliver
Recom
indepe
but th
positio
servic
mmendation
endent direc
he board is o
on, associati
ce of each dir
2.3 - A list
ctors; (b) if a
of the opinio
ion or relatio
rector.
ted entity sh
director has
on that it doe
nship in que
hould disclo
s an interest,
es not comp
estion and an
se: (a) the
, position, as
promise the
n explanation
names of th
ssociation or
independen
n of why the
he directors
r relationship
ce of the dir
board is of
considered
p of the type
rector, the n
that opinion;
by the boa
described in
nature of the
; and (c) the
ard to be
n Box 2.3
e interest,
length of
17
18
18
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
vice at
e Pass
Appointmen
Kip M
Ian Ca
Trevo
Diane
cGrath
ampbell
r Folsom
9 March 198
25 August 2
22 Septemb
1 February 2
Detail
s of the Boa
Direct
tor’s name
rd of director
rs, their appo
ointment date
e, length of s
service and i
ndependenc
ce status is a
as follows:
Kip M
Corpo
30 Ju
McGrath Edu
orate govern
ne 2017
ucation Cent
nance state
d
tres Limited
ment
t date
Le
ength of serv
eporting date
re
9 years
29
8
years
ber 2014 3
years
6
2017
months
88
009
Independe
ence status
Direct
tor’s name
Execut
ive status
Inde
ependence s
status
Non-Execu
Independe
Independe
Independe
utive Chairm
ent Non-Exec
ent Non-Exec
ent Non-Exec
an
cutive
cutive
cutive
The c
Detail
perce
omposition o
s of directors
ived as impa
of the Board
s that the Bo
airing indepe
is structured
oard has dec
ndence, and
d to ensure th
clared as ind
d the reason
hat the Board
dependent bu
as to the Bo
d has the ap
ut which ma
ard’s determ
propriate mix
intain an inte
mination are a
x of expertise
erest or relat
as follows:
e and experi
tionship that
ence.
could be
Direct
tor’s name
Ian Ca
ampbell
Recom
mmendation
Deta
ils of interest
t or relations
ship
Bo
ard reasonin
ng why direct
tor is indepen
ndent
500,0
indire
000 ordinary
ectly in supe
d
y shares held
rfund
Thi
tho
com
is holding a
ose of the s
mpany.
aligns the in
shareholders
nterests of
s and is en
the director
couraged by
r with
y the
sectio
on of the Dire
ectors’ report
t.
2.4 - A majo
ority of the bo
oard of a liste
ed entity sho
ould be indep
pendent direc
ctors.
Havin
indepe
g regard to
endent.
the respon
nse to Reco
mmendation
n 2.3 above
, the majori
ty of the Bo
oard at the
reporting d
ate were
system
m of risk man
nagement an
nd internal co
ontrol which
is operating
effectively.
Recom
not be
mmendation
e the same p
2.5 - The C
person as the
hair of the b
e CEO of the
oard of a list
e entity.
ted entity sh
ould be an in
ndependent
director and
d, in particula
ar, should
Kip M
indepe
compa
McGrath is C
endent direc
any. The CE
hair of the B
ctor the Boa
EO is Storm M
Board and do
ard considers
McGrath.
oes not hold
s him the m
d the positio
most suitable
n of CEO of
e director fo
f the compan
r the role d
ny. Whilst K
ue to being
Kip McGrath
a co-found
is not an
er of the
Recom
profes
their r
mmendation
ssional deve
role as direct
2.6 - A lis
elopment opp
tors effective
sted entity s
portunities fo
ely.
should have
or directors t
e a program
to develop a
m for induct
nd maintain
ting new dir
the skills an
rectors and
nd knowledg
provide ap
ge needed to
ppropriate
o perform
New d
all rel
ensur
directors und
evant aspec
e that directo
dertake an in
cts of the co
ors can enha
duction prog
ompany’s op
ance their sk
gram coordin
perations an
ills and rema
ated by the C
d backgroun
ain abreast o
Company Se
nd. A directo
of important d
ecretary that
or developm
development
ts.
briefs and in
ment program
nforms the di
m is also ava
irector on
ailable to
Princ
iple 3: Act e
ethically and
d responsib
ly
Recom
and (b
mmendation
b) disclose th
3.1 - A listed
hat code or a
d entity shou
a summary o
uld: (a) have
f it.
a code of co
onduct for its
s directors, s
senior execu
tives and em
mployees;
The c
requir
the po
compa
company ma
res that each
owers of offic
any’s assets
aintains a co
h person act
ce in the bes
s and informa
ode of cond
honestly, in
t interests of
ation; and no
duct for its d
good faith a
f the compan
ot undertake
directors, se
and in the be
ny and not fo
any action th
enior executi
est interests
or personal g
hat may jeop
ves and em
of the comp
ain; declare
pardise the re
mployees. In
pany; exercis
any conflict
eputation of c
summary,
se a duty of c
of interest; s
company.
the code
care; use
safeguard
Princ
iple 4: Safeg
guard integr
rity in corpo
orate report
ing
Recom
memb
an ind
qualifi
times
does n
the in
the ro
mmendation
bers, all of w
dependent d
ications and
the committ
not have an
tegrity of its
tation of the
4.1 - The b
whom are non
director, who
experience
tee met throu
audit comm
corporate re
audit engag
board of a l
n-executive d
is not the ch
of the memb
ughout the p
mittee, disclos
eporting, incl
ement partn
listed entity
directors and
hair of the b
bers of the c
eriod and th
se that fact a
luding the pr
er.
should: (a)
d a majority
board, and di
committee; a
e individual a
and the proc
rocesses for
have an au
of whom are
disclose: (3) t
and (5) in rel
attendances
cesses it emp
the appointm
udit committe
e independen
the charter o
lation to each
of the mem
ploys that ind
ment and rem
ee which: (1
nt directors;
of the comm
h reporting p
bers at those
dependently
moval of the
1) has at le
and (2) is ch
mittee; (4) the
period, the n
e meetings;
y verify and s
e external au
ast three
haired by
e relevant
number of
or (b) if it
safeguard
uditor and
19
19
20
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Corpo
orate govern
nance state
ment
30 Ju
ne 2017
The B
Board has an
Audit Comm
mittee, under
r a formal Ch
harter, the me
embers of w
hich are:
Ian Ca
ampbell – Ch
hair
Trevo
r Folsom
Non-Ex
xecutive Dire
ector
Non-Ex
xecutive Dire
ector
Inde
ependent
Inde
ependent
The C
Committee c
consists ent
irely of non
n-executive d
directors, Ia
n Campbell
and Trevo
r Folsom. T
The chairper
rson, Ian
Camp
pbell is not
Board chair
r and is an
n independe
nt director.
Whilst the
committee
consists of
less than t
the three
recom
mmended me
embers, the B
Board is satis
sfied the exp
perience of th
he two memb
bers makes f
for an effecti
ve committe
ee.
The n
umber of Co
ommittee me
eetings held a
and attended
d by each me
ember is disc
closed in the
e ‘Meetings o
of directors’ s
section of
the Di
irectors’
Detail
s of the qua
alifications a
nd experienc
ce of the me
embers of th
he Committe
ee is detailed
d in the ‘Info
ormation of
directors’
Recom
mmendation
4.2 - The bo
oard of a list
ted entity sho
ould, before
it approves t
the entity’s fi
financial state
ements for a
a financial
period
d, receive fro
om its CEO
and CFO a
a declaration
n that, in the
eir opinion, t
the financial
records of
the entity ha
ave been
prope
rly maintaine
ed and that t
the financial
statements c
comply with
the appropri
iate accounti
ing standard
ds and give a
a true and
fair vie
ew of the fina
ancial positio
on and perfo
rmance of th
he entity and
d that the opin
nion has bee
en formed on
n the basis of
f a sound
For th
he financial y
year ended
30 June 20
17 and the
half-year en
nded 31 Dec
cember 2016
6, the compa
any’s CEO a
and CFO
provid
ded the Boar
d with the re
equired decla
arations.
Recom
mmendation
4.3 - A list
ted entity tha
at has an A
AGM should
ensure that
t its external
l auditor atte
ends its AGM
M and is
availa
able to answe
er questions
from security
y holders rel
levant to the
audit.
The a
udit engagem
ment partner
r attends the
AGM and is
s available to
o answer sha
areholder que
estions relev
vant to the au
udit.
Princ
iple 5: Make
e timely and
d balanced d
disclosure
Recom
mmendation
5.1 - A listed
d entity shou
uld (a) have a
a written poli
icy for compl
lying with its
continuous d
disclosure ob
bligations
under
r the Listing R
Rules; and (b
b) disclose th
hat policy or
a summary o
of it.
The c
company mai
intains a writ
tten policy th
hat outlines t
the responsi
bilities relatin
ng to the dir
ectors, office
ers and emp
ployees in
compl
lying with the
e company’s
s disclosure o
obligations. W
Where any s
such person
, is of any do
oubt, as to w
whether they
y possess
inform
mation that co
ould be clas
ssified as ma
arket sensitiv
ve, they are
required to n
notify the Co
ompany Sec
cretary imme
diately in
the fir
rst instance.
The Compa
any Secretar
ry is require
ed to consult
t with the Ch
hairman in r
relation to m
matters broug
ght to his
attent
ion for poten
ntial announc
cement. Gen
nerally, the C
Chairman is u
ultimately res
sponsible fo
r decisions r
relating to the
e making
of ma
rket announ
cements. Th
he Board is r
required to a
authorise ann
nouncements
s of significa
ance to the c
ompany. No
o member
of the
company sh
hall disclose
market sens
sitive informa
ation to any p
person unles
ss they have
e received ac
cknowledgem
ment from
the AS
SX that the in
nformation h
as been rele
eased to the
market.
Princ
iple 6: Resp
pect the righ
hts of securi
ity holders
Recom
mmendation
6.1 - A listed
d entity shou
uld provide in
nformation ab
bout itself an
nd its governa
ance to inves
stors via its w
website.
The c
company ma
intains inform
mation in rel
lation to the
board of dir
rectors, shar
re registry, A
ASX announ
cements and
d contact
details
s on the com
mpany’s webs
site.
Recom
mmendations
s 6.2 and 6.3
3
invest
tors (6.2).
of sec
curity holders
s (6.3).
A liste
ed entity sho
uld design a
and implemen
nt an investo
or relations p
program to fa
acilitate effec
ctive two-way
y communica
ation with
A liste
ed entity sho
uld disclose
the policies
and process
ses it has in p
place to facil
litate and en
ncourage par
rticipation at
meetings
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Corpo
orate govern
nance state
ment
30 Ju
ne 2017
Detail
s of the Boa
rd of director
rs, their appo
ointment date
e, length of s
service and i
ndependenc
ce status is a
as follows:
Kip M
cGrath
Ian Ca
ampbell
Trevo
r Folsom
Diane
e Pass
9 March 198
88
25 August 2
009
re
eporting date
29
9 years
8
years
22 Septemb
ber 2014 3
years
1 February 2
2017
6
months
Non-Execu
utive Chairm
an
Independe
ent Non-Exec
cutive
Independe
ent Non-Exec
cutive
Independe
ent Non-Exec
cutive
The c
omposition o
of the Board
is structured
d to ensure th
hat the Board
d has the ap
propriate mix
x of expertise
e and experi
ence.
Detail
s of directors
s that the Bo
oard has dec
clared as ind
dependent bu
ut which ma
intain an inte
erest or relat
tionship that
could be
perce
ived as impa
airing indepe
ndence, and
d the reason
as to the Bo
ard’s determ
mination are a
as follows:
Direct
tor’s name
Deta
ils of interest
t or relations
ship
Bo
ard reasonin
ng why direct
tor is indepen
ndent
Ian Ca
ampbell
500,0
000 ordinary
y shares held
d
indire
ectly in supe
rfund
Thi
is holding a
aligns the in
nterests of
the director
r with
tho
ose of the s
shareholders
s and is en
couraged by
y the
com
mpany.
Recom
mmendation
2.4 - A majo
ority of the bo
oard of a liste
ed entity sho
ould be indep
pendent direc
ctors.
Havin
g regard to
the respon
nse to Reco
mmendation
n 2.3 above
, the majori
ty of the Bo
oard at the
reporting d
ate were
indepe
endent.
Recom
mmendation
2.5 - The C
hair of the b
oard of a list
ted entity sh
ould be an in
ndependent
director and
d, in particula
ar, should
not be
e the same p
person as the
e CEO of the
e entity.
Kip M
McGrath is C
hair of the B
Board and do
oes not hold
d the positio
n of CEO of
f the compan
ny. Whilst K
Kip McGrath
is not an
indepe
endent direc
ctor the Boa
ard considers
s him the m
most suitable
e director fo
r the role d
ue to being
a co-found
er of the
compa
any. The CE
EO is Storm M
McGrath.
Recom
mmendation
2.6 - A lis
sted entity s
should have
e a program
m for induct
ting new dir
rectors and
provide ap
ppropriate
profes
ssional deve
elopment opp
portunities fo
or directors t
to develop a
nd maintain
the skills an
nd knowledg
ge needed to
o perform
their r
role as direct
tors effective
ely.
New d
directors und
dertake an in
duction prog
gram coordin
ated by the C
Company Se
ecretary that
briefs and in
nforms the di
irector on
all rel
evant aspec
cts of the co
ompany’s op
perations an
d backgroun
nd. A directo
or developm
ment program
m is also ava
ailable to
ensur
e that directo
ors can enha
ance their sk
ills and rema
ain abreast o
of important d
development
ts.
Princ
iple 3: Act e
ethically and
d responsib
ly
Recom
mmendation
3.1 - A listed
d entity shou
uld: (a) have
a code of co
onduct for its
s directors, s
senior execu
tives and em
mployees;
and (b
b) disclose th
hat code or a
a summary o
f it.
The c
company ma
aintains a co
ode of cond
duct for its d
directors, se
enior executi
ves and em
mployees. In
summary,
the code
requir
res that each
h person act
honestly, in
good faith a
and in the be
est interests
of the comp
pany; exercis
se a duty of c
care; use
the po
owers of offic
ce in the bes
t interests of
f the compan
ny and not fo
or personal g
ain; declare
any conflict
of interest; s
safeguard
compa
any’s assets
s and informa
ation; and no
ot undertake
any action th
hat may jeop
pardise the re
eputation of c
company.
Princ
iple 4: Safeg
guard integr
rity in corpo
orate report
ing
Recom
mmendation
4.1 - The b
board of a l
listed entity
should: (a)
have an au
udit committe
ee which: (1
1) has at le
ast three
memb
bers, all of w
whom are non
n-executive d
directors and
d a majority
of whom are
e independen
nt directors;
and (2) is ch
haired by
an ind
dependent d
director, who
is not the ch
hair of the b
board, and di
disclose: (3) t
the charter o
of the comm
mittee; (4) the
e relevant
qualifi
ications and
experience
of the memb
bers of the c
committee; a
and (5) in rel
lation to each
h reporting p
period, the n
number of
times
the committ
tee met throu
ughout the p
eriod and th
e individual a
attendances
of the mem
bers at those
e meetings;
or (b) if it
does n
not have an
audit comm
mittee, disclos
se that fact a
and the proc
cesses it emp
ploys that ind
dependently
y verify and s
safeguard
the in
tegrity of its
corporate re
eporting, incl
luding the pr
rocesses for
the appointm
ment and rem
moval of the
e external au
uditor and
the ro
tation of the
audit engag
ement partn
er.
Kip M
Corpo
30 Ju
McGrath Edu
orate govern
ne 2017
ucation Cent
nance state
d
tres Limited
ment
The B
Board has an
Audit Comm
mittee, under
r a formal Ch
harter, the me
embers of w
hich are:
Direct
tor’s name
Appointmen
t date
Le
ength of serv
vice at
Independe
ence status
Direct
tor’s name
Execut
ive status
Inde
ependence s
status
Ian Ca
Trevo
ampbell – Ch
r Folsom
hair
Non-Ex
Non-Ex
xecutive Dire
xecutive Dire
ector
ector
Inde
Inde
ependent
ependent
The C
Camp
recom
Committee c
pbell is not
mmended me
consists ent
Board chair
embers, the B
irely of non
r and is an
Board is satis
n-executive d
n independe
sfied the exp
directors, Ia
nt director.
perience of th
n Campbell
Whilst the
he two memb
and Trevo
committee
bers makes f
r Folsom. T
consists of
for an effecti
The chairper
less than t
ve committe
rson, Ian
the three
ee.
The n
the Di
umber of Co
irectors’
ommittee me
eetings held a
and attended
d by each me
ember is disc
closed in the
e ‘Meetings o
of directors’ s
section of
Detail
sectio
s of the qua
on of the Dire
alifications a
ectors’ report
nd experienc
t.
ce of the me
embers of th
he Committe
ee is detailed
d in the ‘Info
ormation of
directors’
Recom
period
prope
fair vie
system
mmendation
d, receive fro
rly maintaine
ew of the fina
m of risk man
4.2 - The bo
om its CEO
ed and that t
ancial positio
nagement an
oard of a list
and CFO a
the financial
on and perfo
nd internal co
ted entity sho
a declaration
statements c
rmance of th
ontrol which
ould, before
n that, in the
comply with
he entity and
is operating
it approves t
eir opinion, t
the appropri
d that the opin
effectively.
the entity’s fi
the financial
iate accounti
nion has bee
financial state
records of
ing standard
en formed on
ements for a
the entity ha
ds and give a
n the basis of
a financial
ave been
a true and
f a sound
For th
provid
he financial y
ded the Boar
year ended
d with the re
30 June 20
equired decla
17 and the
arations.
half-year en
nded 31 Dec
cember 2016
6, the compa
any’s CEO a
and CFO
Recom
availa
mmendation
able to answe
4.3 - A list
er questions
ted entity tha
from security
at has an A
y holders rel
AGM should
levant to the
ensure that
audit.
t its external
l auditor atte
ends its AGM
M and is
The a
udit engagem
ment partner
r attends the
AGM and is
s available to
o answer sha
areholder que
estions relev
vant to the au
udit.
Princ
iple 5: Make
e timely and
d balanced d
disclosure
Recom
under
mmendation
r the Listing R
5.1 - A listed
Rules; and (b
d entity shou
b) disclose th
uld (a) have a
hat policy or
a written poli
a summary o
icy for compl
of it.
lying with its
continuous d
disclosure ob
bligations
The c
compl
inform
the fir
attent
of ma
of the
the AS
company mai
lying with the
mation that co
rst instance.
ion for poten
rket announ
company sh
SX that the in
intains a writ
e company’s
ould be clas
The Compa
ntial announc
cements. Th
hall disclose
nformation h
tten policy th
s disclosure o
ssified as ma
any Secretar
cement. Gen
he Board is r
market sens
as been rele
hat outlines t
obligations. W
arket sensitiv
ry is require
nerally, the C
required to a
sitive informa
eased to the
the responsi
Where any s
ve, they are
ed to consult
Chairman is u
authorise ann
ation to any p
market.
bilities relatin
such person
required to n
t with the Ch
ultimately res
nouncements
person unles
ng to the dir
, is of any do
notify the Co
hairman in r
sponsible fo
s of significa
ss they have
ectors, office
oubt, as to w
ompany Sec
relation to m
r decisions r
ance to the c
e received ac
ers and emp
whether they
cretary imme
matters broug
relating to the
ompany. No
cknowledgem
ployees in
y possess
diately in
ght to his
e making
o member
ment from
Princ
iple 6: Resp
pect the righ
hts of securi
ity holders
Recom
mmendation
6.1 - A listed
d entity shou
uld provide in
nformation ab
bout itself an
nd its governa
ance to inves
stors via its w
website.
The c
details
company ma
s on the com
intains inform
mpany’s webs
mation in rel
site.
lation to the
Recom
mmendations
3
s 6.2 and 6.3
board of dir
rectors, shar
re registry, A
ASX announ
cements and
d contact
A liste
invest
ed entity sho
tors (6.2).
uld design a
and implemen
nt an investo
or relations p
program to fa
acilitate effec
ctive two-way
y communica
ation with
A liste
of sec
ed entity sho
curity holders
uld disclose
s (6.3).
the policies
and process
ses it has in p
place to facil
litate and en
ncourage par
rticipation at
meetings
19
20
20
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Corpo
30 Ju
McGrath Edu
orate govern
ne 2017
ucation Cent
nance state
d
tres Limited
ment
The c
invest
invest
company doe
tors at the A
tors either via
es not have
AGM and res
a email, surfa
a formal inv
pond to sha
ace mail, and
vestor relatio
reholder enq
d/or via mark
ons program
quiry on an a
ket announce
. The Board
ad hoc basis
ement.
, CEO and
s. Material co
Company Se
ommunicatio
ecretary eng
ons are dispa
gage with
atched to
Recom
comm
mmendation
munications to
6.4 - A liste
o, the entity a
ed entity sho
and its secur
ould give se
rity registry e
ecurity holder
rs the option
y.
electronically
n to receive
communica
tions from, a
and send
The c
encou
enviro
electro
company eng
uraged to rec
onmentally fr
onically can
gages its sh
ceive corres
riendly comm
elect to do s
are registry
pondence fro
munication
so through th
to manage t
om the com
mechanism
e share regis
the majority
pany electro
with shareh
stry, Comput
of commun
onically, there
holders. Sha
tershare www
ications with
eby facilitatin
areholders n
w-au.compu
ers. Shareho
h shareholde
effective, effic
ng a more e
receiving inf
not already
m.
tershare.com
olders are
cient and
formation
Princ
iple 7: Reco
ognise and m
k
manage risk
Recom
mmendations
s 7.1 & 7.2
The b
memb
charte
times
does
overse
board of a list
bers, a major
er of the com
the committ
not have a r
eeing the en
ted entity sho
rity of whom
mmittee; (4) t
tee met throu
risk committ
ntity’s risk ma
ould: (a) hav
are indepen
the members
ughout the p
tee or comm
anagement fr
ve a committe
ndent directo
s of the com
eriod and th
mittees that s
ramework (7
ee or commi
rs; and (2) is
mmittee; and
e individual a
satisfy (a) ab
7.1).
ittees to over
s chaired by
(5) as at the
attendances
bove, disclos
rsee risk, ea
an independ
e end of eac
of the mem
se that fact a
ch of which:
dent director,
h reporting p
bers at those
and the proc
(1) has at le
, and disclos
period, the n
e meetings;
cesses it em
east three
se: (3) the
number of
or (b) if it
mploys for
The b
itself t
place
oard or a co
that it contin
(7.2).
mmittee of th
nues to be so
he board sho
ound; and (b
ould: (a) revi
b) disclose, i
ew the entity
in relation to
y’s risk mana
each report
agement fram
ting period, w
mework at lea
whether such
ast annually
h a review h
to satisfy
has taken
The c
forma
comm
develo
compa
of the
additio
in pla
compl
ompany doe
l establishm
mittee which
oping strateg
any maintain
e external au
onal controls
ce, and ens
leted in Marc
es not mainta
ent of a sep
includes se
gies to mitig
ns internal co
udit, with the
s. The CEO
suring that a
ch 2017.
ain a Risk Co
parate comm
etting of corp
gate such r
ontrols which
e auditor pro
and CFO ar
all regulatory
ommittee as
mittee. The B
porate gove
isk, monitor
h assist in m
oviding the B
e responsibl
and compli
it is consider
Board and Au
rnance polic
ing the risk
managing ent
Board with c
e for monito
ance obligat
red that the c
udit Committ
cy and exer
and the co
terprise risk,
commentary
oring operatio
tions of the
current size o
tee therefore
rcising due c
ompany’s ef
and these a
on their effe
onal risk, ens
company ar
of the Board
e performs th
care and sk
ffectiveness
are reviewed
ectiveness a
suring all rel
re satisfied.
does not wa
he function o
kill in assess
in managing
d as part of t
and the need
evant insura
The last rev
arrant the
of such a
sing risk,
g it. The
he scope
d for any
ances are
view was
Recom
and w
evalua
mmendation
what role it p
ating and con
7.3 - A liste
performs; or
ntinually imp
ed entity sho
(b) if it does
proving the ef
ould disclose
s not have a
ffectiveness
: (a) if it has
an internal a
of its risk ma
s an internal
audit function
anagement a
audit functio
n, that fact a
and internal c
on, how the
and the proc
control proce
function is s
cesses it em
esses.
structured
mploys for
The c
lies w
action
contro
ompany doe
with both the
n is taken to
ols and opera
es not have a
CEO and C
protect the
ational efficie
a dedicated i
FO who con
integrity of t
encies, mitiga
nternal audit
ntinually mon
the company
ation of risks
t function. Th
nitor the com
y’s books an
s, and safegu
he responsib
mpany’s intern
nd records th
uard of the co
ility for risk m
nal and exte
hrough desig
ompany asse
management
ernal risk env
gn and imple
ets.
t and interna
vironment. N
ementation o
al controls
Necessary
of internal
Recom
social
mmendation
l sustainabilit
7.4 - A listed
ty risks and,
d entity shou
if it does, ho
uld disclose w
ow it manage
whether it ha
es or intends
as any mater
to manage t
rial exposure
those risks.
e to economi
ic, environme
ental and
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Corpo
orate govern
nance state
ment
30 Ju
ne 2017
Princ
iple 8: Remu
unerate fair
rly and respo
onsibly
Recom
mmendation
8.1 - The bo
oard of a list
ted entity sho
ould: (a) hav
ve a remuner
ration comm
mittee which:
(1) has at le
east three
memb
bers, a major
rity of whom
are indepen
ndent directo
rs; and (2) is
s chaired by
an independ
dent director,
, and disclos
se: (3) the
charte
er of the com
mmittee; (4) t
the members
s of the com
mmittee; and
(5) as at the
e end of eac
h reporting p
period, the n
number of
times
the committ
tee met throu
ughout the p
eriod and th
e individual a
attendances
of the mem
bers at those
e meetings;
or (b) if it
does
not have a
a remunerati
ion committe
ee, disclose
that fact a
and the proc
cesses it em
mploys for s
setting the l
level and
compo
osition of rem
muneration fo
for directors a
and senior e
executives an
nd ensuring t
that such rem
muneration is
s appropriate
e and not
exces
ssive.
The B
Board mainta
ins a Remun
neration Com
mmittee, who
ose members
s during the f
financial yea
r, were as fo
ollows:
Direct
tor’s Name
Execut
ive Status
Inde
ependence S
Status
Ian Ca
ampbell – Ch
hair
Trevo
r Folsom
Diane
e Pass
Non-Ex
xecutive Cha
airman
Non-Ex
xecutive Dire
ector
Non-Ex
xecutive Dire
ector
Inde
ependent
Inde
ependent
Inde
ependent
The C
Committee co
onsists entire
ely of non-ex
xecutive direc
ctors, Ian Ca
ampbell, Dian
ne Pass and
Trevor Fols
om. The cha
airperson,
Ian Ca
ampbell is n
ot Board cha
air and is an
n independen
nt director. T
The number o
of Committe
e meetings h
held and atte
ended by
each m
member is d
isclosed in th
he ‘Meetings
s of directors
’ section of t
he Directors
’ report.
The B
Board has est
tablished the
e committee
under forma
al Charter.
Recom
mmendation
8.2 - A liste
ed entity sho
ould separat
tely disclose
its policies
and practice
es regarding
g the remune
eration of
non-e
xecutive dire
ectors and th
he remunerat
tion of execu
utive directors
rs and other s
senior execu
utives.
The C
Committee re
eviews remun
neration pac
kages and p
olicies applic
cable to the
CEO and se
enior executiv
ves. This ma
ay include
share
schemes, i
ncentive pe
rformance p
packages, su
uperannuatio
on entitlemen
nts, retireme
ent and term
mination enti
tlements,
fringe
benefit polic
cies and prof
fessional inde
emnity and l
iability insura
ance policies
s. External ad
dvice is soug
ght as approp
priate.
Furthe
er details of
f directors’ a
and executiv
ves’ remune
ration, supe
rannuation a
and retireme
ent payment
ts are set o
out in the
remun
neration repo
ort which for
rms part of t
the directors
s’ report. The
e CEO is in
vited to com
mmittee meet
tings, as req
quired, to
discus
ss managem
ment performa
ance and rem
muneration p
packages.
Non-e
executive dir
rectors do n
ot receive in
ncentive pay
yments or re
etirement be
enefits (other
r than statut
tory superan
nnuation).
Equity
y-based rem
uneration is
not a standa
ard compone
ent of execut
tive remunera
ation agreem
ments. Any fu
uture equity
issued to
execu
utives or non-
-executives a
as remunera
ation will be a
approved at t
the annual g
eneral meeti
ing of shareh
holders.
No se
enior executiv
ve is involved
d directly in d
deciding thei
ir own remun
neration.
Recom
mmendation
8.3 - A listed
d entity whic
ch has an equ
uity-based re
emuneration
scheme sho
ould: (a) hav
ve a policy on
n whether
partici
ipants are p
permitted to e
enter into tra
ansactions (
(whether thro
ough the use
e of derivati
ives or other
rwise) which
h limit the
econo
omic risk of p
participating i
in the schem
me; and (b) di
isclose that p
policy or a su
ummary of it
The u
use of deriva
atives or othe
er hedging a
arrangement
ts for unvest
ted securities
s of the com
mpany or ves
sted securiti
es of the
compa
any which a
are subject
to escrow
arrangemen
ts is prohib
bited. Where
e a director
or other se
enior execut
tive uses
deriva
atives or othe
er hedging ar
rrangements
s over vested
d securities o
of the compa
ny, this will b
be disclosed
.
As at
social
mana
the date of
sustainabili
gement fram
mework.
reporting th
ty risks. Ref
he company
fer to comm
does not co
mentary at R
onsider it has
ecommenda
s any mater
ations 7.1 an
rial exposure
nd 7.2 for in
es to econom
formation on
mic, environm
n the compa
mental or
any’s risk
21
21
22
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Corpo
orate govern
nance state
ment
30 Ju
ne 2017
The c
company doe
es not have
a formal inv
vestor relatio
ons program
. The Board
, CEO and
Company Se
ecretary eng
gage with
invest
tors at the A
AGM and res
pond to sha
reholder enq
quiry on an a
ad hoc basis
s. Material co
ommunicatio
ons are dispa
atched to
invest
tors either via
a email, surfa
ace mail, and
d/or via mark
ket announce
ement.
Recom
mmendation
6.4 - A liste
ed entity sho
ould give se
ecurity holder
rs the option
n to receive
communica
tions from, a
and send
comm
munications to
o, the entity a
and its secur
rity registry e
electronically
y.
The c
company eng
gages its sh
are registry
to manage t
the majority
of commun
ications with
h shareholde
ers. Shareho
olders are
encou
uraged to rec
ceive corres
pondence fro
om the com
pany electro
onically, there
eby facilitatin
ng a more e
effective, effic
cient and
enviro
onmentally fr
riendly comm
munication
mechanism
with shareh
holders. Sha
areholders n
not already
receiving inf
formation
electro
onically can
elect to do s
so through th
e share regis
stry, Comput
tershare www
w-au.compu
tershare.com
m.
Princ
iple 7: Reco
ognise and m
manage risk
k
Recom
mmendations
s 7.1 & 7.2
The b
board of a list
ted entity sho
ould: (a) hav
ve a committe
ee or commi
ittees to over
rsee risk, ea
ch of which:
(1) has at le
east three
memb
bers, a major
rity of whom
are indepen
ndent directo
rs; and (2) is
s chaired by
an independ
dent director,
, and disclos
se: (3) the
charte
er of the com
mmittee; (4) t
the members
s of the com
mmittee; and
(5) as at the
e end of eac
h reporting p
period, the n
number of
times
the committ
tee met throu
ughout the p
eriod and th
e individual a
attendances
of the mem
bers at those
e meetings;
or (b) if it
does
not have a r
risk committ
tee or comm
mittees that s
satisfy (a) ab
bove, disclos
se that fact a
and the proc
cesses it em
mploys for
overse
eeing the en
ntity’s risk ma
anagement fr
ramework (7
7.1).
The b
oard or a co
mmittee of th
he board sho
ould: (a) revi
ew the entity
y’s risk mana
agement fram
mework at lea
ast annually
to satisfy
itself t
that it contin
nues to be so
ound; and (b
b) disclose, i
in relation to
each report
ting period, w
whether such
h a review h
has taken
place
(7.2).
The c
ompany doe
es not mainta
ain a Risk Co
ommittee as
it is consider
red that the c
current size o
of the Board
does not wa
arrant the
forma
l establishm
ent of a sep
parate comm
mittee. The B
Board and Au
udit Committ
tee therefore
e performs th
he function o
of such a
comm
mittee which
includes se
etting of corp
porate gove
rnance polic
cy and exer
rcising due c
care and sk
kill in assess
sing risk,
develo
oping strateg
gies to mitig
gate such r
isk, monitor
ing the risk
and the co
ompany’s ef
ffectiveness
in managing
g it. The
compa
any maintain
ns internal co
ontrols which
h assist in m
managing ent
terprise risk,
and these a
are reviewed
d as part of t
he scope
of the
e external au
udit, with the
e auditor pro
oviding the B
Board with c
commentary
on their effe
ectiveness a
and the need
d for any
additio
onal controls
s. The CEO
and CFO ar
e responsibl
e for monito
oring operatio
onal risk, ens
suring all rel
evant insura
ances are
in pla
ce, and ens
suring that a
all regulatory
and compli
ance obligat
tions of the
company ar
re satisfied.
The last rev
view was
compl
leted in Marc
ch 2017.
Recom
mmendation
7.3 - A liste
ed entity sho
ould disclose
: (a) if it has
s an internal
audit functio
on, how the
function is s
structured
and w
what role it p
performs; or
(b) if it does
s not have a
an internal a
audit function
n, that fact a
and the proc
cesses it em
mploys for
evalua
ating and con
ntinually imp
proving the ef
ffectiveness
of its risk ma
anagement a
and internal c
control proce
esses.
The c
ompany doe
es not have a
a dedicated i
nternal audit
t function. Th
he responsib
ility for risk m
management
t and interna
al controls
lies w
with both the
CEO and C
FO who con
ntinually mon
nitor the com
mpany’s intern
nal and exte
ernal risk env
vironment. N
Necessary
action
n is taken to
protect the
integrity of t
the company
y’s books an
nd records th
hrough desig
gn and imple
ementation o
of internal
contro
ols and opera
ational efficie
encies, mitiga
ation of risks
s, and safegu
uard of the co
ompany asse
ets.
Recom
mmendation
7.4 - A listed
d entity shou
uld disclose w
whether it ha
as any mater
rial exposure
e to economi
ic, environme
ental and
social
l sustainabilit
ty risks and,
if it does, ho
ow it manage
es or intends
to manage t
those risks.
As at
the date of
reporting th
he company
does not co
onsider it has
s any mater
rial exposure
es to econom
mic, environm
mental or
social
sustainabili
ty risks. Ref
fer to comm
mentary at R
ecommenda
ations 7.1 an
nd 7.2 for in
formation on
n the compa
any’s risk
mana
gement fram
mework.
Kip M
Corpo
30 Ju
McGrath Edu
orate govern
ne 2017
ucation Cent
nance state
d
tres Limited
ment
Princ
iple 8: Remu
unerate fair
rly and respo
onsibly
Recom
memb
charte
times
does
compo
exces
mmendation
bers, a major
er of the com
the committ
not have a
osition of rem
ssive.
8.1 - The bo
rity of whom
mmittee; (4) t
tee met throu
a remunerati
muneration fo
oard of a list
are indepen
the members
ughout the p
ion committe
for directors a
ted entity sho
ndent directo
s of the com
eriod and th
ee, disclose
and senior e
ould: (a) hav
rs; and (2) is
mmittee; and
e individual a
that fact a
executives an
ve a remuner
s chaired by
(5) as at the
attendances
and the proc
nd ensuring t
ration comm
an independ
e end of eac
of the mem
cesses it em
that such rem
mittee which:
dent director,
h reporting p
bers at those
mploys for s
muneration is
(1) has at le
, and disclos
period, the n
e meetings;
setting the l
s appropriate
east three
se: (3) the
number of
or (b) if it
level and
e and not
The B
Board mainta
ins a Remun
neration Com
mmittee, who
ose members
s during the f
financial yea
r, were as fo
ollows:
Direct
tor’s Name
Execut
ive Status
Inde
ependence S
Status
ampbell – Ch
r Folsom
hair
Ian Ca
Trevo
Diane
e Pass
Non-Ex
Non-Ex
Non-Ex
xecutive Cha
xecutive Dire
xecutive Dire
airman
ector
ector
Inde
Inde
Inde
ependent
ependent
ependent
The C
Ian Ca
each m
Committee co
ampbell is n
member is d
onsists entire
ot Board cha
isclosed in th
ely of non-ex
air and is an
he ‘Meetings
xecutive direc
n independen
s of directors
ctors, Ian Ca
nt director. T
’ section of t
ampbell, Dian
The number o
he Directors
ne Pass and
of Committe
’ report.
Trevor Fols
e meetings h
om. The cha
held and atte
airperson,
ended by
The B
Board has est
tablished the
e committee
under forma
al Charter.
Recom
non-e
mmendation
xecutive dire
8.2 - A liste
ectors and th
ed entity sho
he remunerat
ould separat
tion of execu
tely disclose
utive directors
its policies
rs and other s
and practice
senior execu
es regarding
utives.
g the remune
eration of
The C
share
fringe
Committee re
schemes, i
benefit polic
eviews remun
ncentive pe
cies and prof
neration pac
rformance p
fessional inde
kages and p
packages, su
emnity and l
olicies applic
uperannuatio
iability insura
cable to the
on entitlemen
ance policies
CEO and se
nts, retireme
s. External ad
enior executiv
ent and term
dvice is soug
ves. This ma
mination enti
ght as approp
ay include
tlements,
priate.
Furthe
remun
discus
er details of
neration repo
ss managem
f directors’ a
ort which for
ment performa
and executiv
rms part of t
ance and rem
ves’ remune
the directors
muneration p
ration, supe
s’ report. The
packages.
rannuation a
e CEO is in
and retireme
vited to com
ent payment
mmittee meet
ts are set o
tings, as req
out in the
quired, to
Non-e
Equity
execu
executive dir
y-based rem
utives or non-
rectors do n
uneration is
-executives a
ot receive in
not a standa
as remunera
ncentive pay
ard compone
ation will be a
yments or re
ent of execut
approved at t
etirement be
tive remunera
the annual g
enefits (other
ation agreem
eneral meeti
r than statut
ments. Any fu
ing of shareh
tory superan
uture equity
holders.
nnuation).
issued to
No se
enior executiv
ve is involved
d directly in d
deciding thei
ir own remun
neration.
Recom
partici
econo
mmendation
ipants are p
omic risk of p
8.3 - A listed
permitted to e
participating i
d entity whic
enter into tra
in the schem
ch has an equ
ansactions (
me; and (b) di
uity-based re
(whether thro
isclose that p
emuneration
ough the use
policy or a su
scheme sho
e of derivati
ummary of it
ould: (a) hav
ives or other
ve a policy on
rwise) which
n whether
h limit the
The u
compa
deriva
use of deriva
any which a
atives or othe
atives or othe
are subject
er hedging ar
er hedging a
to escrow
rrangements
arrangement
arrangemen
s over vested
ts for unvest
ts is prohib
d securities o
ted securities
bited. Where
of the compa
s of the com
e a director
ny, this will b
sted securiti
mpany or ves
or other se
enior execut
.
be disclosed
es of the
tive uses
21
22
22
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
nts
24
25
26
27
28
56
57
62
other comp
rehensive in
come
o the membe
ers of Kip Mc
cGrath Educa
ation Centres
s Limited
Kip M
Conte
30 Ju
McGrath Edu
ents
ne 2017
ucation Cent
d
tres Limited
Statem
Statem
Statem
Statem
Notes
Direct
Indep
Share
ment of profit
ment of finan
ment of chan
ment of cash
s to the financ
tors' declarat
endent audit
eholder inform
t or loss and
ncial position
y
nges in equity
h flows
cial statemen
tion
tor's report to
mation
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Statem
ment of pro
ofit or loss a
nd other co
omprehensiv
ve income
For th
he year ende
ed 30 June 2
2017
Reve
nue
Expe
nses
Roya
lties, commis
ssions and o
other direct ex
xpenses
Emplo
oyee expens
ses
Marke
eting expens
ses
Admin
nistration exp
penses
Merch
handising ex
xpenses
Depre
eciation and
amortisation
n expense
Net fo
oreign excha
ange losses
Finan
nce costs
Profit
t before inco
ome tax exp
pense
Incom
me tax expen
nse
Profit
t after incom
me tax expe
nse for the y
year attribu
table to the
owners of K
Kip
McGr
rath Educati
ion Centres
Limited
Other
r comprehe
nsive incom
me
Items
s that may be
e reclassified
d subsequent
tly to profit or
r loss
Foreig
gn currency
translation
Other
r comprehen
sive income
for the year,
, net of tax
Total
comprehen
nsive incom
me for the ye
ar attributab
ble to the ow
wners of Kip
p
McGr
rath Educati
ion Centres
Limited
Basic
c earnings pe
er share
Dilute
ed earnings p
per share
C
onsolidated
d
Note
e
2017
7
$'000
0
20
016
$'0
000
4
5
5
5
6
13
3,507
14,569
(5
,030)
(2
,906)
(910)
(1
,571)
(326)
(773)
(128)
(68)
(7,035)
(2,719)
(506)
(1,677)
(382)
(443)
(139)
(69)
1
,795
1,599
(359)
(396)
1
,436
1,203
(101)
(101)
(93)
(93)
1
,335
1,110
Cents
s
Ce
ents
29
29
3
3.199
3
3.069
2.723
2.574
Gene
ral informat
tion
The fi
Educa
prese
nancial state
ation Centres
nted in Austr
ements cove
s Limited an
ralian dollars
er Kip McGra
nd the entitie
s, which is Ki
ath Education
es it controll
ip McGrath E
n Centres Lim
ed at the en
Education Ce
mited as a c
nd of, or dur
entres Limite
onsolidated
ring, the yea
ed's functiona
entity consis
ar. The finan
al and presen
sting of Kip M
ncial stateme
ntation curre
McGrath
ents are
ncy.
Kip M
Austra
McGrath Edu
alia. Its regis
ucation Cent
tered office a
tres Limited
and principa
is a listed
l place of bus
public comp
siness is:
pany limited
by shares,
incorporate
ed and dom
iciled in
3
Level
6 New
Newc
wcomen Stre
castle NSW 2
eet
2300
A des
report
scription of th
t, which is no
he nature of
ot part of the
f the consolid
financial sta
dated entity's
atements.
s operations
s and its prin
ncipal activiti
es are includ
ded in the d
irectors'
The fi
directo
inancial state
ors have the
ements were
power to am
e authorised
mend and rei
for issue, in
ssue the fina
n accordanc
ancial statem
e with a res
ments.
olution of di
rectors, on 9
9 August 20
17. The
23
23
The above
e statement o
of profit or los
ss and other
r comprehens
sive income
should be re
ead in conjun
nction with th
he
acc
companying
notes
24
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Conte
ents
30 Ju
ne 2017
Statem
ment of profit
t or loss and
other comp
rehensive in
come
Statem
ment of finan
ncial position
Statem
ment of chan
nges in equity
y
Statem
ment of cash
h flows
Notes
s to the financ
cial statemen
nts
Direct
tors' declarat
tion
Share
eholder inform
mation
Gene
ral informat
tion
Indep
endent audit
tor's report to
o the membe
ers of Kip Mc
cGrath Educa
ation Centres
s Limited
24
25
26
27
28
56
57
62
The fi
nancial state
ements cove
er Kip McGra
ath Education
n Centres Lim
mited as a c
onsolidated
entity consis
sting of Kip M
McGrath
Educa
ation Centres
s Limited an
nd the entitie
es it controll
ed at the en
nd of, or dur
ring, the yea
ar. The finan
ncial stateme
ents are
prese
nted in Austr
ralian dollars
s, which is Ki
ip McGrath E
Education Ce
entres Limite
ed's functiona
al and presen
ntation curre
ncy.
Kip M
McGrath Edu
ucation Cent
tres Limited
is a listed
public comp
pany limited
by shares,
incorporate
ed and dom
iciled in
Austra
alia. Its regis
tered office a
and principa
l place of bus
siness is:
Level
3
6 New
wcomen Stre
eet
Newc
castle NSW 2
2300
A des
scription of th
he nature of
f the consolid
dated entity's
s operations
s and its prin
ncipal activiti
es are includ
ded in the d
irectors'
report
t, which is no
ot part of the
financial sta
atements.
The fi
inancial state
ements were
e authorised
for issue, in
n accordanc
e with a res
olution of di
rectors, on 9
9 August 20
17. The
directo
ors have the
power to am
mend and rei
ssue the fina
ancial statem
ments.
Kip M
Statem
For th
McGrath Edu
ment of pro
he year ende
ucation Cent
ofit or loss a
ed 30 June 2
d
tres Limited
omprehensiv
nd other co
2017
ve income
Reve
nue
other direct ex
xpenses
Expe
Roya
Emplo
Marke
Admin
Merch
Depre
Net fo
Finan
nses
lties, commis
oyee expens
eting expens
nistration exp
handising ex
eciation and
oreign excha
nce costs
ssions and o
ses
ses
penses
xpenses
amortisation
ange losses
n expense
Profit
t before inco
ome tax exp
pense
Incom
me tax expen
nse
Profit
McGr
t after incom
rath Educati
me tax expe
ion Centres
nse for the y
Limited
year attribu
table to the
owners of K
Kip
Other
r comprehe
nsive incom
me
Items
Foreig
s that may be
gn currency
e reclassified
translation
d subsequent
tly to profit or
r loss
Other
r comprehen
sive income
for the year,
, net of tax
Note
e
d
onsolidated
C
016
20
2017
7
000
$'0
0
$'000
4
5
5
5
6
13
3,507
14,569
(5
(2
(1
,030)
,906)
(910)
,571)
(326)
(773)
(128)
(68)
(7,035)
(2,719)
(506)
(1,677)
(382)
(443)
(139)
(69)
1
,795
1,599
(359)
(396)
1
,436
1,203
(101)
(101)
(93)
(93)
ar attributab
ble to the ow
p
wners of Kip
Total
McGr
comprehen
rath Educati
nsive incom
ion Centres
me for the ye
Limited
Basic
Dilute
c earnings pe
ed earnings p
er share
per share
1
,335
1,110
s
Cents
Ce
ents
29
29
3
3.199
3.069
3
2.723
2.574
23
24
24
The above
e statement o
of profit or los
ss and other
acc
r comprehens
companying
sive income
notes
should be re
ead in conjun
nction with th
he
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Statem
As at
McGrath Edu
ment of fina
30 June 20
ucation Cent
ancial positi
17
d
tres Limited
on
Asse
ts
Note
e
d
onsolidated
C
016
20
2017
7
000
$'0
0
$'000
Curre
ent assets
and cash eq
Cash
Trade
e and other re
r
Other
current asse
Total
ets
quivalents
eceivables
Non-c
Trade
Prope
Intang
Defer
Total
current asse
ets
s
e receivables
t
nd equipment
erty, plant an
gibles
rred tax
non-current
assets
Total
assets
Liabi
lities
Curre
Trade
Borro
Incom
Emplo
Total
s
ent liabilities
payables
e and other p
owings
ble
me tax payab
s
oyee benefits
lities
current liabil
ilities
Non-c
Trade
Borro
Defer
Total
current liab
e payables
owings
rred tax
non-current
liabilities
Total
liabilities
Net a
assets
Equit
Issue
Rese
Retai
ty
d capital
rves
ned profits
Total
equity
7
8
9
10
11
12
13
14
15
16
17
18
4,932
4
865
141
5,938
5
19
111
0,304
526
0,960
10
10
3,530
636
153
4,319
80
45
9,969
711
10,805
16
6,898
15,124
Cons
solidated
3,976
3
750
37
364
5,127
5
-
-
,522
,522
1
1
6,649
6
10
0,249
8,838
8
598
813
10
0,249
3,259
350
-
297
3,906
40
300
1,339
1,679
5,585
9,539
8,774
667
98
9,539
The ab
bove stateme
ent of financi
ial position sshould be rea
ad in conjunc
ction with the
e accompany
ying notes
25
25
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Statem
ment of cha
anges in equ
uity
For th
he year ende
ed 30 June 2
2017
Cons
solidated
Balan
nce at 1 July
2015
Profit
after income
e tax expens
se for the yea
ar
Other
r comprehen
sive income
for the year,
, net of tax
Total
comprehens
sive income f
for the year
Trans
sactions with
owners in th
heir capacity
y as owners:
Share
e-based paym
ments
Divide
ends paid (no
ote 19)
Balan
nce at 30 Jun
ne 2016
Balan
nce at 1 July
2016
Profit
after income
e tax expens
se for the yea
ar
Other
r comprehen
sive income
for the year,
, net of tax
Total
comprehens
sive income f
for the year
Retain
ned
Reserves
s
$'000
profit
ts
$'000
0
Total
equity
$'
000
Issued
capital
$'000
8,774
8,774
98
9,539
Retain
ned
Reserves
s
$'000
profit
ts
$'000
0
Total
equity
$'
000
Issued
capital
$'000
8,774
73
38
-
(9
93)
(9
93)
2
22
-
66
67
66
67
-
(10
01)
(10
01)
-
3
32
-
(442)
1
,203
1
,203
(663)
98
1
,436
1
,436
(721)
-
-
-
-
-
9,070
1,203
(93)
1,110
22
(663)
9,539
1,436
(101)
1,335
64
32
(721)
-
-
-
-
-
-
-
-
-
-
Trans
sactions with
owners in th
heir capacity
y as owners:
Contr
ributions of e
equity, net of
transaction c
costs (note 1
17)
64
Share
e-based paym
ments
Divide
ends paid (no
ote 19)
Balan
nce at 30 Jun
ne 2017
8,838
59
98
813
10,249
The ab
bove stateme
ent of change
es in equity s
should be rea
ad in conjunc
ction with the
e accompany
ying notes
26
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Statem
ment of fina
ancial positi
on
As at
30 June 20
17
Asse
ts
Curre
ent assets
Cash
and cash eq
quivalents
Trade
e and other re
eceivables
Other
r
Total
current asse
ets
Non-c
current asse
ets
Trade
e receivables
s
Prope
erty, plant an
nd equipment
t
Intang
gibles
Defer
rred tax
Total
non-current
assets
Total
assets
Liabi
lities
Curre
ent liabilities
s
Trade
e and other p
payables
Borro
owings
Incom
me tax payab
ble
Emplo
oyee benefits
s
Total
current liabil
lities
Non-c
current liab
ilities
Trade
e payables
Borro
owings
Defer
rred tax
Total
non-current
liabilities
Total
liabilities
Net a
assets
Equit
ty
Issue
d capital
Rese
rves
Retai
ned profits
Total
equity
7
8
9
10
11
12
13
14
15
16
17
18
4
4,932
865
141
5
5,938
19
111
10
0,304
526
10
0,960
3
3,976
750
37
364
5
5,127
-
-
1
,522
1
,522
6
6,649
10
0,249
8
8,838
598
813
10
0,249
3,530
636
153
4,319
80
45
9,969
711
10,805
3,259
350
-
297
3,906
40
300
1,339
1,679
5,585
9,539
8,774
667
98
9,539
The ab
bove stateme
ent of financi
ial position sshould be rea
ad in conjunc
ction with the
e accompany
ying notes
25
Kip M
Statem
For th
McGrath Edu
ment of cha
he year ende
ucation Cent
anges in equ
ed 30 June 2
d
tres Limited
uity
2017
C
onsolidated
d
Note
e
2017
7
$'000
0
20
016
$'0
000
Cons
solidated
Balan
nce at 1 July
2015
Profit
Other
after income
r comprehen
e tax expens
sive income
se for the yea
for the year,
ar
, net of tax
Total
comprehens
sive income f
for the year
Trans
Share
Divide
sactions with
e-based paym
ends paid (no
owners in th
ments
ote 19)
heir capacity
y as owners:
Balan
nce at 30 Jun
ne 2016
16
6,898
15,124
Cons
solidated
Balan
nce at 1 July
2016
Profit
Other
after income
r comprehen
e tax expens
sive income
se for the yea
for the year,
ar
, net of tax
Total
comprehens
sive income f
for the year
Trans
Contr
Share
Divide
sactions with
ributions of e
e-based paym
ends paid (no
owners in th
equity, net of
ments
ote 19)
heir capacity
transaction c
y as owners:
costs (note 1
17)
Issued
capital
$'000
8,774
-
-
-
-
-
8,774
Issued
capital
$'000
8,774
-
-
-
64
-
-
Reserves
$'000
s
Retain
ned
profit
ts
0
$'000
Total
$'
equity
000
73
38
-
93)
(9
93)
(9
22
2
-
66
67
(442)
1
,203
-
1
,203
-
(663)
9,070
1,203
(93)
1,110
22
(663)
98
9,539
Reserves
$'000
s
Retain
ned
profit
ts
0
$'000
66
67
-
01)
(10
(10
01)
-
32
3
-
98
1
,436
-
1
,436
-
-
(721)
Total
$'
equity
000
9,539
1,436
(101)
1,335
64
32
(721)
Balan
nce at 30 Jun
ne 2017
8,838
59
98
813
10,249
The ab
bove stateme
ent of change
es in equity s
should be rea
ad in conjunc
ction with the
e accompany
ying notes
26
26
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Statem
For th
McGrath Edu
ment of cas
he year ende
ucation Cent
sh flows
ed 30 June 2
2017
d
tres Limited
Cash
Rece
Paym
flows from
ipts from cus
ments to supp
operating a
stomers (incl
pliers and em
activities
usive of GST
mployees (inc
T)
clusive of GS
ST)
Intere
Intere
Incom
est received
est and other
me taxes refu
r finance cos
unded
ts paid
Net ca
ash from ope
erating activi
ities
Cash
Paym
Paym
flows from
ments for prop
ments for inta
investing a
perty, plant a
ngibles
activities
and equipme
ent
Net ca
ash used in
investing act
tivities
Cash
Proce
Proce
Divide
Repa
flows from
eeds from iss
eeds from bo
ends paid
yment of bor
rrowings
financing a
activities
s
sue of shares
orrowings
Net ca
ash used in f
financing act
tivities
Net in
Cash
ncrease in ca
and cash eq
ash and cash
quivalents at
s
h equivalents
ng of the fina
the beginnin
ancial year
Cash
and cash eq
quivalents at
the end of th
he financial y
year
Note
e
d
onsolidated
C
016
20
2017
7
000
$'0
0
$'000
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
1. Significan
nt accountin
ng policies
13
(10
3,930
,730)
15,171
(12,888)
(
3,200
3
1
(68)
-
3,133
3
(110)
,064)
(1
2,283
4
(69)
16
2,234
(52)
(976)
(1
,174)
(1,028)
Histor
rical cost con
nvention
The fi
nancial state
ements have
been prepa
red under th
e historical c
cost conventi
ion.
64
,305
1
(721)
,205)
(1
-
-
(663)
(350)
(557)
(1,013)
1
,402
3,530
3
4,932
4
193
3,337
3,530
28
10
17
19
7
The p
principal acco
ounting polic
cies adopted
in the prepa
aration of the
e financial st
tatements ar
re set out be
elow. These
policies
have b
been consist
tently applied
d to all the ye
ears present
ted, unless o
otherwise sta
ted.
New o
or amended
d Accounting
g Standards
s and Interp
retations ad
dopted
The c
consolidated
entity has a
adopted all o
of the new o
r amended A
Accounting S
Standards an
nd Interpreta
ations issued
d by the
Austra
alian Accoun
nting Standar
rds Board ('A
AASB') that a
are mandato
ry for the cu
rrent reportin
ng period. Th
he adoption o
of these
Accou
unting Stand
ards and Int
terpretations
did not hav
ve any signif
ficant impact
t on the fina
ncial perform
mance or po
sition of
the co
onsolidated e
entity.
Basis
s of preparat
tion
Any n
ew or amend
ded Account
ting Standard
ds or Interpre
etations that
are not yet m
mandatory h
ave not been
n early adopt
ted.
These
e general pu
rpose financ
cial statemen
nts have bee
n prepared i
n accordanc
ce with Austr
ralian Accoun
nting Standa
ards and
Interp
retations iss
sued by the
e Australian
Accounting
g Standards
Board ('AA
ASB') and t
he Corporat
tions Act 20
001, as
appro
priate for fo
r-profit orien
nted entities.
These finan
ncial statem
ents also co
omply with In
nternational
Financial Re
eporting
Stand
dards as issu
ed by the Int
ternational A
Accounting St
tandards Bo
ard ('IASB').
Critica
al accounting
g estimates
The p
preparation o
of the financ
cial stateme
ents requires
s the use of
f certain crit
tical accoun
ting estimat
tes. It also r
requires
mana
gement to ex
xercise its ju
udgement in
the process
s of applying
the consolid
dated entity's
s accounting
policies. Th
he areas
involv
ving a higher
r degree of j
judgement o
or complexity
y, or areas w
where assum
mptions and
estimates a
are significan
nt to the
financ
cial statemen
nts, are disclo
osed in note
2.
Paren
nt entity info
ormation
In acc
cordance wit
th the Corpo
orations Act
2001, these
e financial st
tatements pr
resent the re
esults of the
e consolidate
ed entity
only. S
Supplementa
ary informatio
on about the
e parent entit
ty is disclose
d in note 26.
.
Princ
iples of con
nsolidation
The c
consolidated
financial sta
atements inc
corporate the
e assets and
d liabilities o
of all subsidia
aries of Kip
McGrath Ed
ducation
Centre
es Limited ('c
company' or
'parent entit
ty') as at 30 J
June 2017 a
and the result
ts of all subs
sidiaries for t
he year then
n ended.
Kip M
McGrath Educ
cation Centr
res Limited a
and its subsi
diaries toget
ther are refe
erred to in th
hese financia
al statements
s as the
'conso
olidated entit
ty'.
Subsi
diaries are a
all those entit
ties over wh
ich the cons
olidated enti
ity has contro
ol. The cons
solidated ent
ity controls a
an entity
when
the consolid
dated entity
is exposed t
to, or has rig
ghts to, varia
able returns f
from its invo
olvement with
h the entity a
and has
the ab
bility to affec
ct those retur
rns through
its power to
direct the a
ctivities of th
he entity. Su
ubsidiaries ar
re fully cons
olidated
from t
the date on w
which contro
l is transferre
ed to the con
nsolidated en
ntity. They ar
re de-consol
idated from
the date that
t control
cease
es.
Interc
ompany tran
nsactions, ba
alances and
unrealised g
gains on tran
nsactions be
etween entitie
es in the con
nsolidated en
ntity are
elimin
nated. Unrea
lised losses
are also elim
minated unle
ess the trans
saction provid
des evidence
e of the impa
airment of th
he asset
transf
erred. Acco
unting polici
es of subsid
diaries have
e been chan
nged where
necessary t
to ensure c
onsistency w
with the
policie
es adopted b
by the consol
lidated entity
y.
The a
cquisition of
subsidiaries
s is accounte
ed for using t
he acquisitio
on method of
f accounting.
A change in
n ownership
interest,
withou
ut the loss o
of control, is
s accounted
for as an e
equity transa
action, where
e the differe
ence betwee
en the consid
deration
transf
erred and t
he book va
lue of the s
share of the
e non-contro
olling interes
st acquired i
is recognise
ed directly in
n equity
attribu
utable to the
parent.
Where
e the consol
idated entity
y loses contro
ol over a su
bsidiary, it d
erecognises
the assets
including go
odwill, liabilit
ties and
non-c
ontrolling int
terest in the
e subsidiary
together wit
th any cumu
ulative transl
ation differe
nces recogn
nised in equ
uity. The
conso
olidated entit
y recognises
s the fair va
lue of the co
onsideration
received an
nd the fair va
alue of any
investment r
retained
togeth
her with any
gain or loss
in profit or lo
oss.
The
e above state
ement of cas
sh flows shou
uld be read i
in conjunction
n with the ac
ccompanying
g notes
27
27
28
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Statem
ment of cas
sh flows
For th
he year ende
ed 30 June 2
2017
Cash
flows from
operating a
activities
Rece
ipts from cus
stomers (incl
usive of GST
T)
Paym
ments to supp
pliers and em
mployees (inc
clusive of GS
ST)
Intere
est received
Intere
est and other
r finance cos
ts paid
Incom
me taxes refu
unded
Net ca
ash from ope
erating activi
ities
Cash
flows from
investing a
activities
Paym
ments for prop
perty, plant a
and equipme
ent
Paym
ments for inta
ngibles
Net ca
ash used in
investing act
tivities
Cash
flows from
financing a
activities
Proce
eeds from iss
sue of shares
s
Proce
eeds from bo
orrowings
Divide
ends paid
Repa
yment of bor
rrowings
Net ca
ash used in f
financing act
tivities
Net in
ncrease in ca
ash and cash
h equivalents
s
Cash
and cash eq
quivalents at
the beginnin
ng of the fina
ancial year
Cash
and cash eq
quivalents at
the end of th
he financial y
year
C
onsolidated
d
Note
e
2017
7
$'000
0
20
016
$'0
000
13
3,930
(10
,730)
15,171
(
(12,888)
3
3,200
1
(68)
-
3
3,133
(110)
(1
,064)
64
1
,305
(721)
(1
,205)
1
,402
3
3,530
4
4,932
(1
,174)
(1,028)
(557)
(1,013)
2,283
4
(69)
16
2,234
(52)
(976)
-
-
(663)
(350)
193
3,337
3,530
28
10
17
19
7
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
1. Significan
nt accountin
ng policies
The p
have b
principal acco
been consist
ounting polic
tently applied
cies adopted
d to all the ye
in the prepa
ears present
aration of the
ted, unless o
e financial st
otherwise sta
tatements ar
ted.
re set out be
elow. These
policies
New o
The c
Austra
Accou
the co
or amended
consolidated
alian Accoun
unting Stand
onsolidated e
d Accounting
entity has a
nting Standar
ards and Int
entity.
g Standards
adopted all o
rds Board ('A
terpretations
s and Interp
of the new o
AASB') that a
did not hav
retations ad
r amended A
are mandato
ve any signif
dopted
Accounting S
ry for the cu
ficant impact
Standards an
rrent reportin
t on the fina
nd Interpreta
ng period. Th
ncial perform
ations issued
he adoption o
mance or po
d by the
of these
sition of
Any n
ew or amend
ded Account
ting Standard
ds or Interpre
etations that
are not yet m
mandatory h
ave not been
n early adopt
ted.
Basis
These
Interp
appro
Stand
s of preparat
e general pu
retations iss
priate for fo
dards as issu
tion
rpose financ
sued by the
r-profit orien
ed by the Int
cial statemen
e Australian
nted entities.
ternational A
nts have bee
Accounting
These finan
Accounting St
n prepared i
g Standards
ncial statem
tandards Bo
n accordanc
Board ('AA
ents also co
ard ('IASB').
ce with Austr
ASB') and t
omply with In
ralian Accoun
he Corporat
nternational
nting Standa
tions Act 20
Financial Re
ards and
001, as
eporting
Histor
The fi
rical cost con
nancial state
nvention
ements have
been prepa
red under th
e historical c
cost conventi
ion.
Critica
The p
mana
involv
financ
al accounting
preparation o
gement to ex
ving a higher
cial statemen
g estimates
of the financ
xercise its ju
r degree of j
nts, are disclo
cial stateme
udgement in
judgement o
osed in note
2.
ents requires
the process
or complexity
s the use of
s of applying
y, or areas w
f certain crit
the consolid
where assum
tical accoun
dated entity's
mptions and
ting estimat
s accounting
estimates a
tes. It also r
policies. Th
are significan
requires
he areas
nt to the
Paren
In acc
only. S
nt entity info
cordance wit
Supplementa
ormation
th the Corpo
ary informatio
orations Act
on about the
2001, these
e parent entit
e financial st
ty is disclose
tatements pr
resent the re
.
d in note 26.
esults of the
e consolidate
ed entity
Princ
The c
Centre
Kip M
'conso
iples of con
consolidated
es Limited ('c
McGrath Educ
olidated entit
nsolidation
financial sta
company' or
cation Centr
ty'.
atements inc
'parent entit
res Limited a
corporate the
ty') as at 30 J
and its subsi
e assets and
June 2017 a
diaries toget
d liabilities o
and the result
ther are refe
of all subsidia
ts of all subs
erred to in th
aries of Kip
sidiaries for t
hese financia
McGrath Ed
he year then
al statements
ducation
n ended.
s as the
Subsi
when
the ab
from t
cease
diaries are a
the consolid
bility to affec
the date on w
es.
all those entit
dated entity
ct those retur
which contro
ties over wh
is exposed t
rns through
l is transferre
ich the cons
to, or has rig
its power to
ed to the con
olidated enti
ghts to, varia
direct the a
nsolidated en
ity has contro
able returns f
ctivities of th
ntity. They ar
ol. The cons
from its invo
he entity. Su
re de-consol
solidated ent
olvement with
ubsidiaries ar
idated from
ity controls a
h the entity a
re fully cons
the date that
an entity
and has
olidated
t control
Interc
elimin
transf
policie
ompany tran
nated. Unrea
erred. Acco
es adopted b
nsactions, ba
lised losses
unting polici
by the consol
unrealised g
alances and
minated unle
are also elim
es of subsid
diaries have
y.
lidated entity
gains on tran
ess the trans
e been chan
nsactions be
saction provid
nged where
etween entitie
des evidence
necessary t
es in the con
e of the impa
to ensure c
nsolidated en
airment of th
onsistency w
ntity are
he asset
with the
The a
withou
transf
attribu
cquisition of
ut the loss o
erred and t
utable to the
subsidiaries
of control, is
he book va
parent.
s is accounte
s accounted
lue of the s
ed for using t
for as an e
share of the
he acquisitio
equity transa
e non-contro
on method of
action, where
olling interes
f accounting.
e the differe
st acquired i
A change in
ence betwee
is recognise
n ownership
en the consid
ed directly in
interest,
deration
n equity
Where
non-c
conso
togeth
e the consol
ontrolling int
olidated entit
her with any
idated entity
terest in the
y recognises
gain or loss
y loses contro
e subsidiary
s the fair va
in profit or lo
ol over a su
together wit
lue of the co
oss.
bsidiary, it d
th any cumu
onsideration
erecognises
ulative transl
received an
the assets
ation differe
nd the fair va
including go
nces recogn
alue of any
odwill, liabilit
nised in equ
investment r
ties and
uity. The
retained
The
e above state
ement of cas
sh flows shou
uld be read i
in conjunction
n with the ac
ccompanying
g notes
27
28
28
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
e the informa
('CODM'). T
ation presen
The CODM is
nted is on th
s responsible
he same
e for the
Opera
Opera
basis
alloca
ating segme
ating segmen
as the intern
ation of resou
ents
nts are pres
nal reports p
urces to oper
sented using
provided to th
rating segme
the 'manag
he Chief Ope
ents and asse
gement appro
erating Decis
essing their
oach', where
sion Makers
performance
e.
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
1. Significan
nt accountin
ng policies (
(continued)
Foreig
The fi
and p
gn currency
nancial state
resentation c
n
y translation
presented in
ements are p
currency.
Australian d
dollars, whic
h is Kip McG
Grath Educat
tion Centres
Limited's fu
unctional
●
w
when the tax
xable tempo
rary differen
ce is associ
ated with int
terests in su
ubsidiaries, a
associates or
r joint ventur
res, and
the timing of
t
f the reversa
al can be co
ontrolled and
d it is probab
ble that the
temporary d
difference wi
ll not revers
se in the
Foreig
Foreig
transa
transla
recog
gn currency t
gn currency t
actions. Fore
ation at finan
nised in prof
transactions
transactions
eign exchan
ncial year-en
fit or loss.
are translat
nge gains a
nd exchange
ed into Aust
and losses r
e rates of m
ralian dollars
resulting fro
onetary asse
s using the e
m the settle
ets and liabi
exchange rat
ement of su
lities denom
tes prevailing
uch transact
minated in for
g at the date
tions and fr
reign currenc
es of the
rom the
cies are
Foreig
The a
report
excha
differe
s
gn operations
liabilities of
assets and l
he revenues
ting date. Th
which approx
ange rates, w
cognised in o
ences are rec
foreign oper
and expens
ximate the ra
other compre
rations are
es of foreign
tes at the da
ehensive inc
translated in
n operations
ates of the tra
ome through
nto Australia
are translat
ansactions, f
h the foreign
an dollars us
ed into Aust
for the period
currency res
sing the exc
tralian dollars
d. All resultin
serve in equi
change rates
s using the a
ng foreign ex
ty.
s at the
average
xchange
The fo
oreign curren
ncy reserve i
s recognised
d in profit or l
loss when th
he foreign op
eration or ne
et investment
t is disposed
d of.
Reven
Reven
can be
nue recogni
nue is recog
e reliably me
ition
nised when
easured. Rev
it is probabl
venue is mea
le that the e
asured at the
conomic ben
e fair value of
nefit will flow
f the conside
w to the cons
eration receiv
solidated ent
ved or receiv
tity and the r
vable.
revenue
Franc
Reven
on the
chise fees
nue from fra
e underlying
nchise fees
contract with
derived from
h the franchis
m franchise o
see.
operations a
re recognise
ed on a wee
kly or month
hly basis, de
pending
Stude
Reven
to a st
es
ent lesson fee
udent lessons
nue from stu
olment agree
tudent's enro
s derived fro
ement, which
om franchise
h is typically o
operations a
on a weekly
are recognis
basis.
ed when the
e services ar
re provided p
pursuant
Sales
Dome
and tr
shippe
of master te
estic sales an
raining progra
ed to the fran
erritories and
nd sales to
ams. Overse
nchisees.
d franchise ce
overseas ma
eas franchise
entres
aster franch
e sales are re
isees are re
ecognised w
cognised on
when educatio
n satisfactory
onal materia
y completion
als supplied b
n of formal in
by the franch
nduction
hisor are
Direct
Reven
produ
shippe
t sales
nue from the
ct passes to
ed.
e sale of ed
o the custom
ducational m
mer. This co
aterials and
ntrol will pas
promotiona
ss when the
al products is
e customer o
s recognised
orders the c
d at the time
urriculum or
e the contro
r other produ
ol of the
ucts are
Intere
Intere
amort
rate, w
to the
st
st revenue is
tised cost of
which is the
net carrying
s recognised
a financial a
rate that exa
g amount of t
d as interest
asset and al
actly discoun
he financial a
accrues usi
locating the
nts estimated
asset.
ng the effec
interest inco
d future cash
ctive interest
ome over the
h receipts thr
method. Thi
e relevant pe
rough the ex
is is a metho
eriod using t
xpected life o
od of calcula
the effective
of the financi
ating the
interest
al asset
r revenue
Other
Other
revenue is r
recognised w
when it is rec
ceived or whe
en the right to
o receive pa
yment is est
ablished.
Cash
and cash e
quivalents
Incom
The in
applic
tempo
me tax
ncome tax e
cable income
orary differen
expense or
e tax rate for
nces, unused
benefit for
each jurisdic
d tax losses a
the period i
ction, adjuste
and the adjus
is the tax p
ed by the cha
stment recog
payable on t
anges in def
gnised for pr
that period's
ferred tax as
rior periods, w
taxable inc
sets and liab
where applic
come based
bilities attribu
cable.
on the
utable to
29
29
30
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
1. Significan
nt accountin
ng policies (
(continued)
Deferr
red tax asse
ets and liabil
ities are reco
ognised for t
temporary d
ifferences at
t the tax rate
es expected
to be applie
ed when
the as
ssets are re
covered or
liabilities are
e settled, ba
ased on thos
se tax rates
that are en
acted or sub
bstantively e
enacted,
●
w
when the def
ferred incom
me tax asset
or liability ar
rises from the
e initial recog
gnition of go
oodwill or an
asset or liab
bility in a
transaction t
t
hat is not a
business co
mbination an
nd that, at th
he time of th
e transaction
n, affects ne
either the acc
counting
excep
pt for:
nor taxable p
n
profits; or
foreseeable f
f
future.
Deferr
red tax asse
ets are recog
gnised for de
eductible tem
mporary diffe
erences and
unused tax
losses only
if it is proba
able that
future
taxable amo
ounts will be
available to
utilise those
e temporary d
differences a
and losses.
The c
carrying amo
ount of recog
gnised and u
unrecognised
d deferred ta
ax assets are
e reviewed a
at each repo
orting date. D
Deferred
tax as
ssets recogn
ised are red
uced to the
extent that it
t is no longe
er probable th
hat future tax
xable profits
will be avail
lable for
the ca
arrying amou
unt to be rec
covered. Pre
eviously unre
ecognised de
eferred tax a
assets are re
ecognised to
the extent t
that it is
proba
ble that there
e are future t
taxable profi
ts available t
to recover th
he asset.
Deferr
red tax asse
ets and liabi
lities are off
fset only wh
ere there is
a legally en
nforceable ri
ight to offse
t current tax
x assets
agains
st current ta
ax liabilities a
and deferred
d tax assets
against defe
erred tax liab
bilities; and
they relate t
to the same
taxable
autho
rity on either
r the same ta
axable entity
or different t
taxable entiti
ies which inte
end to settle
simultaneou
usly.
Kip M
McGrath Educ
cation Centr
res Limited (
(the 'head e
ntity') and its
s wholly-own
ned Australia
an subsidiar
ries have for
rmed an
incom
me tax conso
olidated gro
up under th
he tax conso
olidation reg
gime. The h
ead entity a
and each su
ubsidiary in
the tax
conso
olidated grou
up continue t
to account fo
or their own
current and
deferred tax
x amounts. T
The tax con
solidated gro
oup has
applie
ed the 'sepa
arate taxpaye
er within gro
oup' approa
ch in determ
mining the a
appropriate
amount of t
taxes to allo
ocate to
memb
bers of the ta
ax consolidat
ted group.
In add
dition to its ow
wn current a
and deferred
tax amounts
s, the head e
entity also rec
cognises the
e current tax
liabilities (or
r assets)
and th
he deferred t
ax assets ar
rising from un
nused tax los
sses and unu
used tax cred
dits assumed
d from each
subsidiary in
n the tax
conso
olidated grou
p.
Assets
s or liabilitie
es arising un
nder tax fund
ding agreem
ments with th
he tax conso
olidated entit
ties are reco
ognised as a
amounts
receiv
vable from o
r payable to
other entitie
es in the tax
x consolidate
ed group. Th
e tax funding
g arrangeme
ent ensures
that the
interco
ompany cha
rge equals th
he current ta
ax liability or
benefit of ea
ach tax conso
olidated grou
up member, r
resulting in n
neither a
contrib
bution by the
e head entity
y to the subsi
idiaries nor a
a distribution
by the subs
idiaries to th
e head entity
y.
Curre
ent and non-
-current clas
ssification
Assets
s and liabiliti
es are prese
ented in the s
statement of
financial pos
sition based
on current a
and non-curre
ent classifica
ation.
An as
sset is class
ified as curr
rent when: it
t is either ex
xpected to b
be realised o
or intended
to be sold o
or consumed
d in the
conso
olidated entit
ty's normal o
operating cyc
cle; it is held
d primarily f
for the purpo
ose of tradin
ng; it is expe
ected to be
realised
within
12 months a
after the rep
orting period
d; or the asse
et is cash or
cash equiva
alent unless
restricted fro
om being exc
changed
or use
ed to settle a
a liability for a
at least 12 m
onths after th
he reporting
period. All o
other assets a
are classified
d as non-cur
rent.
A liab
ility is classif
fied as curre
nt when: it is
s either expe
ected to be se
ettled in the
consolidated
d entity's nor
rmal operatin
ng cycle;
it is he
eld primarily
for the purpo
ose of tradin
g; it is due to
o be settled w
within 12 mo
onths after th
e reporting p
period; or the
ere is no
uncon
nditional right
t to defer the
e settlement
of the liabilit
ty for at leas
t 12 months
after the rep
porting period
d. All other l
iabilities
are cla
assified as n
non-current.
Deferr
red tax asset
ts and liabilit
ties are alwa
ays classified
d as non-curr
rent.
Cash
and cash eq
quivalents in
cludes cash
on hand, de
eposits held
at call with f
financial inst
titutions, othe
er short-term
m, highly
liquid
investments
with origina
l maturities o
of three mont
ths or less th
hat are readi
ly convertible
e to known a
amounts of c
ash and
which
are subject
to an insigni
ficant risk of
f changes in
value.
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
rary differen
al can be co
ce is associ
ontrolled and
ated with int
d it is probab
terests in su
ble that the
ubsidiaries, a
temporary d
associates or
difference wi
r joint ventur
ll not revers
res, and
se in the
me tax asset
business co
or liability ar
mbination an
rises from the
nd that, at th
e initial recog
he time of th
gnition of go
e transaction
oodwill or an
n, affects ne
asset or liab
either the acc
bility in a
counting
ets and liabil
covered or
ities are reco
liabilities are
ognised for t
e settled, ba
temporary d
ased on thos
ifferences at
se tax rates
t the tax rate
that are en
es expected
acted or sub
to be applie
bstantively e
ed when
enacted,
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
1. Significan
nt accountin
ng policies (
(continued)
Deferr
red tax asse
ssets are re
the as
pt for:
excep
when the def
w
●
t
transaction t
n
nor taxable p
w
when the tax
t
the timing of
foreseeable f
f
●
ferred incom
hat is not a
profits; or
xable tempo
f the reversa
future.
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
1. Significan
nt accountin
ng policies (
(continued)
Opera
ating segme
ents
Opera
ating segmen
nts are pres
sented using
the 'manag
gement appro
oach', where
e the informa
ation presen
nted is on th
he same
basis
as the intern
nal reports p
provided to th
he Chief Ope
erating Decis
sion Makers
('CODM'). T
The CODM is
s responsible
e for the
alloca
ation of resou
urces to oper
rating segme
ents and asse
essing their
performance
e.
The fi
nancial state
ements are p
presented in
Australian d
dollars, whic
h is Kip McG
Grath Educat
tion Centres
Limited's fu
unctional
Foreig
gn currency t
transactions
are translat
ed into Aust
ralian dollars
s using the e
exchange rat
tes prevailing
g at the date
es of the
transa
actions. Fore
eign exchan
nge gains a
and losses r
resulting fro
m the settle
ement of su
uch transact
tions and fr
rom the
transla
ation at finan
ncial year-en
nd exchange
e rates of m
onetary asse
ets and liabi
lities denom
minated in for
reign currenc
cies are
Foreig
gn currency
y translation
n
and p
resentation c
currency.
Foreig
gn currency t
transactions
recog
nised in prof
fit or loss.
Foreig
gn operations
s
Reven
nue recogni
ition
Franc
chise fees
Stude
ent lesson fee
es
The a
assets and l
liabilities of
foreign oper
rations are
translated in
nto Australia
an dollars us
sing the exc
change rates
s at the
report
ting date. Th
he revenues
and expens
es of foreign
n operations
are translat
ed into Aust
tralian dollars
s using the a
average
excha
ange rates, w
which approx
ximate the ra
tes at the da
ates of the tra
ansactions, f
for the period
d. All resultin
ng foreign ex
xchange
differe
ences are rec
cognised in o
other compre
ehensive inc
ome through
h the foreign
currency res
serve in equi
ty.
The fo
oreign curren
ncy reserve i
s recognised
d in profit or l
loss when th
he foreign op
eration or ne
et investment
t is disposed
d of.
Reven
nue is recog
nised when
it is probabl
le that the e
conomic ben
nefit will flow
w to the cons
solidated ent
tity and the r
revenue
can be
e reliably me
easured. Rev
venue is mea
asured at the
e fair value of
f the conside
eration receiv
ved or receiv
vable.
Reven
nue from fra
nchise fees
derived from
m franchise o
operations a
re recognise
ed on a wee
kly or month
hly basis, de
pending
on the
e underlying
contract with
h the franchis
see.
Reven
nue from stu
udent lessons
s derived fro
om franchise
operations a
are recognis
ed when the
e services ar
re provided p
pursuant
to a st
tudent's enro
olment agree
ement, which
h is typically o
on a weekly
basis.
Sales
of master te
erritories and
d franchise ce
entres
Dome
estic sales an
nd sales to
overseas ma
aster franch
isees are re
cognised on
n satisfactory
y completion
n of formal in
nduction
and tr
raining progra
ams. Overse
eas franchise
e sales are re
ecognised w
when educatio
onal materia
als supplied b
by the franch
hisor are
shippe
ed to the fran
nchisees.
Reven
nue from the
e sale of ed
ducational m
aterials and
promotiona
al products is
s recognised
d at the time
e the contro
ol of the
produ
ct passes to
o the custom
mer. This co
ntrol will pas
ss when the
e customer o
orders the c
urriculum or
r other produ
ucts are
Intere
st revenue is
s recognised
d as interest
accrues usi
ng the effec
ctive interest
method. Thi
is is a metho
od of calcula
ating the
amort
tised cost of
a financial a
asset and al
locating the
interest inco
ome over the
e relevant pe
eriod using t
the effective
interest
rate, w
which is the
rate that exa
actly discoun
nts estimated
d future cash
h receipts thr
rough the ex
xpected life o
of the financi
al asset
to the
net carrying
g amount of t
he financial a
asset.
Other
revenue is r
recognised w
when it is rec
ceived or whe
en the right to
o receive pa
yment is est
ablished.
The in
ncome tax e
expense or
benefit for
the period i
is the tax p
payable on t
that period's
taxable inc
come based
on the
applic
cable income
e tax rate for
each jurisdic
ction, adjuste
ed by the cha
anges in def
ferred tax as
sets and liab
bilities attribu
utable to
tempo
orary differen
nces, unused
d tax losses a
and the adjus
stment recog
gnised for pr
rior periods, w
where applic
cable.
Direct
t sales
shippe
ed.
Intere
st
Other
r revenue
Incom
me tax
Deferr
future
red tax asse
taxable amo
ets are recog
ounts will be
gnised for de
available to
eductible tem
utilise those
mporary diffe
e temporary d
erences and
differences a
unused tax
and losses.
losses only
if it is proba
able that
The c
tax as
the ca
proba
carrying amo
ssets recogn
arrying amou
ble that there
ount of recog
ised are red
unt to be rec
e are future t
gnised and u
uced to the
covered. Pre
taxable profi
unrecognised
extent that it
eviously unre
ts available t
d deferred ta
t is no longe
ecognised de
to recover th
ax assets are
er probable th
eferred tax a
he asset.
e reviewed a
hat future tax
assets are re
at each repo
xable profits
ecognised to
orting date. D
will be avail
the extent t
Deferred
lable for
that it is
Deferr
agains
autho
red tax asse
st current ta
rity on either
ets and liabi
ax liabilities a
r the same ta
lities are off
and deferred
axable entity
fset only wh
d tax assets
or different t
ere there is
against defe
taxable entiti
a legally en
erred tax liab
ies which inte
nforceable ri
bilities; and
end to settle
ight to offse
they relate t
simultaneou
t current tax
to the same
usly.
x assets
taxable
Kip M
incom
conso
applie
memb
McGrath Educ
me tax conso
olidated grou
ed the 'sepa
bers of the ta
cation Centr
olidated gro
up continue t
arate taxpaye
ax consolidat
res Limited (
up under th
to account fo
er within gro
ted group.
(the 'head e
he tax conso
or their own
oup' approa
ntity') and its
olidation reg
current and
ch in determ
s wholly-own
gime. The h
deferred tax
mining the a
ned Australia
ead entity a
x amounts. T
appropriate
an subsidiar
and each su
The tax con
amount of t
ries have for
ubsidiary in
solidated gro
taxes to allo
rmed an
the tax
oup has
ocate to
In add
and th
conso
dition to its ow
he deferred t
olidated grou
wn current a
ax assets ar
p.
and deferred
rising from un
tax amounts
nused tax los
s, the head e
sses and unu
entity also rec
used tax cred
cognises the
dits assumed
e current tax
d from each
liabilities (or
subsidiary in
r assets)
n the tax
Assets
receiv
interco
contrib
s or liabilitie
vable from o
ompany cha
bution by the
es arising un
r payable to
rge equals th
e head entity
nder tax fund
other entitie
he current ta
y to the subsi
ding agreem
es in the tax
ax liability or
idiaries nor a
ments with th
x consolidate
benefit of ea
a distribution
he tax conso
ed group. Th
ach tax conso
by the subs
olidated entit
e tax funding
olidated grou
idiaries to th
ties are reco
g arrangeme
up member, r
e head entity
ognised as a
ent ensures
resulting in n
y.
amounts
that the
neither a
Curre
Assets
ent and non-
s and liabiliti
-current clas
es are prese
ssification
ented in the s
statement of
financial pos
sition based
on current a
and non-curre
ent classifica
ation.
An as
conso
within
or use
sset is class
olidated entit
12 months a
ed to settle a
ified as curr
ty's normal o
after the rep
a liability for a
rent when: it
operating cyc
orting period
at least 12 m
t is either ex
cle; it is held
d; or the asse
onths after th
xpected to b
d primarily f
et is cash or
he reporting
be realised o
for the purpo
cash equiva
period. All o
or intended
ose of tradin
alent unless
other assets a
to be sold o
ng; it is expe
restricted fro
are classified
or consumed
ected to be
om being exc
d as non-cur
d in the
realised
changed
rent.
A liab
it is he
uncon
are cla
ility is classif
eld primarily
nditional right
assified as n
fied as curre
for the purpo
t to defer the
non-current.
nt when: it is
ose of tradin
e settlement
s either expe
g; it is due to
of the liabilit
ected to be se
o be settled w
ty for at leas
ettled in the
within 12 mo
t 12 months
consolidated
onths after th
after the rep
d entity's nor
e reporting p
porting period
rmal operatin
period; or the
d. All other l
ng cycle;
ere is no
iabilities
Deferr
red tax asset
ts and liabilit
ties are alwa
ays classified
d as non-curr
rent.
Cash
Cash
liquid
which
and cash e
and cash eq
investments
are subject
quivalents
quivalents in
with origina
to an insigni
cludes cash
l maturities o
ficant risk of
on hand, de
of three mont
f changes in
eposits held
ths or less th
value.
at call with f
hat are readi
financial inst
ly convertible
titutions, othe
e to known a
er short-term
amounts of c
m, highly
ash and
29
30
30
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
1. Significan
nt accountin
ng policies (
(continued)
Trade
Trade
interes
e and other r
e receivables
st method, le
receivables
s are initially
ess any prov
recognised
vision for imp
at fair value
pairment. Tra
e and subse
ade receivabl
equently mea
les are gene
asured at am
rally due for
mortised cost
settlement w
t using the e
within 30 day
effective
ys.
Collec
off by
object
the re
reorga
trade
amou
relatin
ctability of tra
y reducing th
tive evidence
eceivables. S
anisation and
receivable m
nt and the p
ng to short-te
ade receivab
he carrying
e that the co
Significant fin
d default or
may be impa
present value
erm receivab
bles is review
amount dire
onsolidated e
nancial diffic
delinquency
ired. The am
e of estimate
les are not d
wed on an on
ectly. A prov
entity will not
ulties of the
y in paymen
mount of the
ed future cas
discounted if
ngoing basis
vision for im
be able to c
debtor, prob
ts (more tha
impairment
h flows, disc
the effect of
s. Debts whic
mpairment of
collect all am
bability that
an 60 days o
allowance is
counted at th
discounting
ch are known
f trade recei
mounts due a
the debtor w
overdue) are
s the differen
he original ef
is immateria
n to be unco
ivables is ra
according to
will enter ban
e considered
nce between
ffective intere
al.
ollectable are
aised when
the original t
nkruptcy or f
d indicators
the asset's
est rate. Cas
e written
there is
terms of
financial
that the
carrying
sh flows
Plant
Plant
expen
and equipm
and equipm
nditure that is
ment
ment is stated
s directly attr
d at historica
ributable to th
al cost less
he acquisitio
accumulate
n of the item
ms.
d depreciatio
on and impa
airment. Hist
torical cost i
includes
Depre
expec
eciation is ca
cted useful liv
alculated on
ves. Plant an
a straight-lin
nd equipmen
ne basis to w
t is currently
write off the
y not materia
net cost of e
l to the finan
each item of
cial stateme
f plant and e
nts.
equipment ov
ver their
Lease
The d
requir
and th
es
determination
res an asses
he arrangem
n of whether
ssment of wh
ent conveys
r an arrange
hether the ful
a right to us
ment is or c
lfilment of th
se the asset.
contains a le
e arrangeme
ase is based
ent is depend
d on the sub
dent on the u
bstance of th
use of a spe
he arrangem
ecific asset o
ment and
r assets
A dist
risks a
retains
tinction is ma
and benefits
s substantial
ade between
s incidental t
lly all such ri
n finance lea
o the owner
sks and ben
ases, which e
rship of leas
efits.
effectively tra
ed assets, a
ansfer from
and operatin
the lessor to
g leases, un
o the lessee
nder which th
substantially
he lessor eff
y all the
fectively
Finan
the pr
lease
ce leases ar
resent value
liability and t
re capitalised
e of minimum
the finance c
d. A lease as
m lease paym
costs, so as t
sset and liab
ments. Leas
to achieve a
ility are esta
se payments
constant rat
ablished at th
s are allocate
te of interest
he fair value
ed between
on the rema
of the leased
the principa
aining balanc
d assets, or
al componen
ce of the liab
if lower,
nt of the
ility.
Lease
useful
of the
ed assets acq
l life and the
lease term.
quired under
lease term i
r a finance le
f there is no
ease are dep
reasonable
preciated ove
certainty tha
er the asset's
at the consol
s useful life o
idated entity
or over the s
will obtain o
shorter of the
ownership at
e asset's
the end
Opera
basis
ating lease p
over the term
payments, ne
m of the leas
et of any inc
se.
centives rece
eived from th
he lessor, are
e charged to
o profit or los
ss on a stra
ight-line
Intang
Intang
at the
assets
subse
arising
carryin
Chang
metho
s
gible assets
acquired as
gible assets
acquisition.
date of the
mortised and
s are not am
asured at co
equently mea
erecognition
g from the de
of the intangi
ng amount o
xpected patte
ges in the ex
od or period.
part of a bu
Intangible as
d are subseq
ost less amo
of intangible
ible asset. T
ern of consum
siness comb
ssets acquire
quently mea
ortisation and
e assets are
The method a
mption or us
bination, othe
ed separatel
sured at cos
d any impair
measured a
and useful liv
eful life are a
er than good
y are initially
st less any
rment. The
as the differe
ves of finite
accounted fo
dwill, are initi
y recognised
impairment.
gains or los
ence between
life intangibl
or prospective
ially measure
d at cost. Ind
Finite life in
ses recognis
n net dispos
e assets are
ely by chang
ed at their fa
efinite life in
ntangible ass
sed in profit
al proceeds
e reviewed a
ging the amo
air value
tangible
sets are
or loss
and the
annually.
rtisation
Intelle
Intelle
Dug M
amort
ectual proper
ectual proper
McGrath. Co
tised as they
rty
rty primarily c
osts in relati
have an ind
consists of th
on to intelle
efinite usefu
he acquisitio
ectual proper
ul life.
on costs for t
rty are capit
the system o
talised as an
of tuition deve
n asset. The
eloped by th
ese costs ar
he founders,
re not subse
Kip and
equently
31
31
32
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
1. Significan
nt accountin
ng policies (
(continued)
Produ
uct and overs
seas develop
pment costs
Costs
in relation to
o product an
d overseas d
development
t costs are ca
apitalised as
s an asset. T
hese costs a
are not subse
equently
amort
tised where t
they have an
n indefinite u
useful life. De
efinite life co
osts are writt
en off over t
their finite us
seful life of u
up to ten
years
.
Franc
chise territorie
es
Other
r intangibles
Existin
ng franchise
e territories th
hat have be
en acquired
by the cons
solidated ent
tity are capit
talised as an
n asset and
are not
amort
tised, but are
e subject to a
annual impair
rment review
ws based on
student num
mbers remain
ing at the ac
cquisition lev
el.
Other
intangibles a
are capitalise
ed as an ass
set and amor
rtised, being
their finite us
seful life of fi
ive years.
Impai
irment of no
on-financial
assets
Intang
gible assets
that have an
n indefinite u
useful life are
e not subject
t to amortisa
ation and are
e tested annu
ually for impa
airment,
or mo
ore frequently
y if events o
r changes in
n circumstan
ces indicate
that they m
ight be impa
aired. Other
non-financia
al assets
are re
eviewed for i
mpairment w
whenever ev
vents or chan
nges in circu
umstances in
ndicate that t
the carrying
amount may
y not be
recove
erable. An
impairment
loss is reco
ognised for
the amoun
nt by which
the asset's
s carrying a
amount exce
eeds its
recove
erable amou
unt.
Recov
verable amo
unt is the hig
gher of an a
asset's fair va
alue less cos
sts of dispos
sal and value
e-in-use. The
e value-in-us
se is the
prese
nt value of th
he estimated
d future cash
h flows relati
ng to the as
set using a
pre-tax disco
ount rate spe
ecific to the a
asset or
cash-g
generating u
unit to which
the asset be
elongs. Asse
ets that do no
ot have inde
ependent cas
sh flows are
grouped tog
gether to
form a
a cash-gener
rating unit.
Trade
e and other p
payables
These
e amounts r
epresent lia
bilities for g
oods and se
ervices prov
vided to the
consolidated
d entity prio
or to the end
d of the
financ
cial year and
d which are
unpaid. Due
e to their sh
hort-term nat
ture they are
e measured
at amortise
ed cost and
are not
discou
unted. The a
mounts are
unsecured a
and are usua
lly paid withi
n 30 days of
f recognition.
.
Borro
owings
Loans
s and borrow
wings are init
ially recognis
sed at the fa
air value of th
he considera
ation received
d, net of tran
nsaction cost
ts. They
are su
ubsequently
measured at
t amortised c
cost using th
e effective in
nterest metho
od.
Where
e there is an
n uncondition
nal right to d
efer settleme
ent of the lia
ability for at l
east 12 mon
nths after the
e reporting d
date, the
loans
or borrowing
gs are classif
fied as non-c
current.
Finan
ce costs attr
ributable to q
qualifying ass
sets are cap
pitalised as p
part of the as
sset. All othe
er finance co
osts are expe
ensed in
Finan
nce costs
the pe
eriod in which
h they are in
curred.
Emplo
oyee benefi
ts
Short-
-term employ
yee benefits
Liabili
ties for wag
ges and sala
aries and ot
her employe
ee benefits e
expected to
be settled w
wholly within
n 12 months
s of the
report
ting date are
measured a
at the amoun
ts expected
to be paid w
when the liabi
ilities are set
ttled.
Other
r long-term em
mployee ben
nefits
Emplo
oyee benefits
s not expecte
ed to be sett
tled within 12
2 months of
the reporting
g date are m
measured as
the present
value of
expec
cted future p
payments to
be made in
respect of s
services pro
ovided by em
mployees up
to the repo
rting date us
sing the
projec
cted unit cre
dit method.
Consideratio
on is given t
to expected
future wage
e and salary
levels, expe
erience of em
mployee
depar
rtures and pe
eriods of ser
rvice. Expect
ted future pa
ayments are
discounted
using marke
et yields at th
he reporting
date on
corpo
rate bonds w
with terms to
maturity and
d currency th
hat match, as
s closely as p
possible, the
estimated fu
uture cash o
utflows.
Define
ed contributio
on superann
nuation expen
nse
Contri
ibutions to de
efined contri
bution super
rannuation p
lans are exp
pensed in the
e period in wh
hich they are
e incurred.
Share
e-based paym
ments
Equity
y-settled sha
are-based co
mpensation
benefits are
provided to
employees.
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
1. Significan
nt accountin
ng policies (
(continued)
Trade
e and other r
receivables
Trade
e receivables
s are initially
recognised
at fair value
e and subse
equently mea
asured at am
mortised cost
t using the e
effective
interes
st method, le
ess any prov
vision for imp
pairment. Tra
ade receivabl
les are gene
rally due for
settlement w
within 30 day
ys.
Collec
ctability of tra
ade receivab
bles is review
wed on an on
ngoing basis
s. Debts whic
ch are known
n to be unco
ollectable are
e written
off by
y reducing th
he carrying
amount dire
ectly. A prov
vision for im
mpairment of
f trade recei
ivables is ra
aised when
there is
object
tive evidence
e that the co
onsolidated e
entity will not
be able to c
collect all am
mounts due a
according to
the original t
terms of
the re
eceivables. S
Significant fin
nancial diffic
ulties of the
debtor, prob
bability that
the debtor w
will enter ban
nkruptcy or f
financial
reorga
anisation and
d default or
delinquency
y in paymen
ts (more tha
an 60 days o
overdue) are
e considered
d indicators
that the
trade
receivable m
may be impa
ired. The am
mount of the
impairment
allowance is
s the differen
nce between
the asset's
carrying
amou
nt and the p
present value
e of estimate
ed future cas
h flows, disc
counted at th
he original ef
ffective intere
est rate. Cas
sh flows
relatin
ng to short-te
erm receivab
les are not d
discounted if
the effect of
discounting
is immateria
al.
Plant
and equipm
ment
Plant
and equipm
ment is stated
d at historica
al cost less
accumulate
d depreciatio
on and impa
airment. Hist
torical cost i
includes
expen
nditure that is
s directly attr
ributable to th
he acquisitio
n of the item
ms.
Depre
eciation is ca
alculated on
a straight-lin
ne basis to w
write off the
net cost of e
each item of
f plant and e
equipment ov
ver their
expec
cted useful liv
ves. Plant an
nd equipmen
t is currently
y not materia
l to the finan
cial stateme
nts.
Lease
es
The d
determination
n of whether
r an arrange
ment is or c
contains a le
ase is based
d on the sub
bstance of th
he arrangem
ment and
requir
res an asses
ssment of wh
hether the ful
lfilment of th
e arrangeme
ent is depend
dent on the u
use of a spe
ecific asset o
r assets
and th
he arrangem
ent conveys
a right to us
se the asset.
A dist
tinction is ma
ade between
n finance lea
ases, which e
effectively tra
ansfer from
the lessor to
o the lessee
substantially
y all the
risks a
and benefits
s incidental t
o the owner
rship of leas
ed assets, a
and operatin
g leases, un
nder which th
he lessor eff
fectively
retains
s substantial
lly all such ri
sks and ben
efits.
Finan
ce leases ar
re capitalised
d. A lease as
sset and liab
ility are esta
ablished at th
he fair value
of the leased
d assets, or
if lower,
the pr
resent value
e of minimum
m lease paym
ments. Leas
se payments
s are allocate
ed between
the principa
al componen
nt of the
lease
liability and t
the finance c
costs, so as t
to achieve a
constant rat
te of interest
on the rema
aining balanc
ce of the liab
ility.
Lease
ed assets acq
quired under
r a finance le
ease are dep
preciated ove
er the asset's
s useful life o
or over the s
shorter of the
e asset's
useful
l life and the
lease term i
f there is no
reasonable
certainty tha
at the consol
idated entity
will obtain o
ownership at
the end
Opera
ating lease p
payments, ne
et of any inc
centives rece
eived from th
he lessor, are
e charged to
o profit or los
ss on a stra
ight-line
of the
lease term.
basis
over the term
m of the leas
se.
Intang
gible assets
s
Intang
gible assets
acquired as
part of a bu
siness comb
bination, othe
er than good
dwill, are initi
ially measure
ed at their fa
air value
at the
date of the
acquisition.
Intangible as
ssets acquire
ed separatel
y are initially
y recognised
d at cost. Ind
efinite life in
tangible
assets
s are not am
mortised and
d are subseq
quently mea
sured at cos
st less any
impairment.
Finite life in
ntangible ass
sets are
subse
equently mea
asured at co
ost less amo
ortisation and
d any impair
rment. The
gains or los
ses recognis
sed in profit
or loss
arising
g from the de
erecognition
of intangible
e assets are
measured a
as the differe
ence between
n net dispos
al proceeds
and the
carryin
ng amount o
of the intangi
ible asset. T
The method a
and useful liv
ves of finite
life intangibl
e assets are
e reviewed a
annually.
Chang
ges in the ex
xpected patte
ern of consum
mption or us
eful life are a
accounted fo
or prospective
ely by chang
ging the amo
rtisation
metho
od or period.
Intelle
ectual proper
rty
Intelle
ectual proper
rty primarily c
consists of th
he acquisitio
on costs for t
the system o
of tuition deve
eloped by th
he founders,
Kip and
Dug M
McGrath. Co
osts in relati
on to intelle
ectual proper
rty are capit
talised as an
n asset. The
ese costs ar
re not subse
equently
amort
tised as they
have an ind
efinite usefu
ul life.
31
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
1. Significan
nt accountin
ng policies (
(continued)
Produ
uct and overs
in relation to
Costs
amort
tised where t
.
years
seas develop
o product an
they have an
pment costs
d overseas d
n indefinite u
development
useful life. De
t costs are ca
efinite life co
apitalised as
osts are writt
s an asset. T
en off over t
hese costs a
their finite us
are not subse
seful life of u
equently
up to ten
Franc
Existin
amort
chise territorie
ng franchise
tised, but are
es
e territories th
e subject to a
hat have be
annual impair
en acquired
rment review
by the cons
ws based on
solidated ent
student num
tity are capit
mbers remain
talised as an
ing at the ac
n asset and
cquisition lev
are not
el.
r intangibles
Other
Other
intangibles a
are capitalise
ed as an ass
set and amor
rtised, being
their finite us
seful life of fi
ive years.
Impai
Intang
or mo
are re
recove
recove
irment of no
gible assets
ore frequently
eviewed for i
erable. An
erable amou
unt.
on-financial
that have an
y if events o
mpairment w
impairment
assets
n indefinite u
r changes in
whenever ev
loss is reco
useful life are
n circumstan
vents or chan
ognised for
e not subject
ces indicate
nges in circu
the amoun
t to amortisa
that they m
umstances in
nt by which
ation and are
ight be impa
ndicate that t
the asset's
e tested annu
aired. Other
the carrying
s carrying a
ually for impa
non-financia
amount may
amount exce
airment,
al assets
y not be
eeds its
Recov
prese
cash-g
form a
verable amo
nt value of th
generating u
a cash-gener
unt is the hig
he estimated
unit to which
rating unit.
gher of an a
d future cash
the asset be
asset's fair va
h flows relati
elongs. Asse
alue less cos
ng to the as
ets that do no
sts of dispos
set using a
ot have inde
sal and value
pre-tax disco
ependent cas
e-in-use. The
ount rate spe
sh flows are
e value-in-us
ecific to the a
grouped tog
se is the
asset or
gether to
Trade
These
financ
discou
e and other p
e amounts r
cial year and
unted. The a
payables
epresent lia
d which are
mounts are
bilities for g
unpaid. Due
unsecured a
oods and se
e to their sh
and are usua
ervices prov
hort-term nat
lly paid withi
vided to the
ture they are
n 30 days of
d entity prio
consolidated
at amortise
e measured
.
f recognition.
or to the end
ed cost and
d of the
are not
Borro
Loans
are su
owings
s and borrow
ubsequently
wings are init
measured at
ially recognis
t amortised c
sed at the fa
cost using th
air value of th
e effective in
he considera
nterest metho
ation received
od.
d, net of tran
nsaction cost
ts. They
Where
loans
e there is an
or borrowing
n uncondition
gs are classif
nal right to d
fied as non-c
efer settleme
current.
ent of the lia
ability for at l
east 12 mon
nths after the
e reporting d
date, the
Finan
Finan
the pe
nce costs
ce costs attr
eriod in which
ributable to q
h they are in
qualifying ass
curred.
sets are cap
pitalised as p
part of the as
sset. All othe
er finance co
osts are expe
ensed in
Emplo
oyee benefi
ts
Short-
Liabili
report
-term employ
ties for wag
ting date are
yee benefits
ges and sala
measured a
aries and ot
at the amoun
her employe
ts expected
ee benefits e
to be paid w
expected to
when the liabi
be settled w
ilities are set
wholly within
ttled.
n 12 months
s of the
Other
Emplo
expec
projec
depar
corpo
r long-term em
oyee benefits
cted future p
cted unit cre
rtures and pe
rate bonds w
mployee ben
s not expecte
payments to
dit method.
eriods of ser
with terms to
nefits
ed to be sett
be made in
Consideratio
rvice. Expect
maturity and
tled within 12
respect of s
on is given t
ted future pa
d currency th
2 months of
services pro
to expected
ayments are
hat match, as
the reporting
ovided by em
future wage
discounted
s closely as p
g date are m
mployees up
e and salary
using marke
possible, the
measured as
to the repo
levels, expe
et yields at th
estimated fu
the present
rting date us
erience of em
he reporting
uture cash o
value of
sing the
mployee
date on
utflows.
Define
Contri
ed contributio
ibutions to de
on superann
efined contri
nuation expen
bution super
nse
rannuation p
lans are exp
pensed in the
e period in wh
hich they are
e incurred.
Share
Equity
e-based paym
y-settled sha
ments
are-based co
mpensation
benefits are
provided to
employees.
32
32
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
1. Significan
nt accountin
ng policies (
(continued)
Equity
the re
y-settled tran
ndering of se
nsactions are
ervices.
e awards of
shares, or o
options over
shares, that
are provide
d to employe
ees in excha
ange for
The c
using
dilutio
the ris
conso
vestin
y-settled tran
cost of equity
les option pr
Black-Schol
e price at gra
on, the share
est rate for th
sk free intere
olidated entity
y receives th
.
ng conditions
nsactions are
ricing model
ant date and
he term of th
he services t
e measured
that takes in
expected pr
he option, tog
that entitle th
at fair value
nto account
ice volatility
gether with n
he employee
e on grant d
the exercise
of the under
non-vesting c
es to receive
ate. Fair val
e price, the t
rlying share,
conditions th
e payment. N
ue is indepe
term of the o
the expected
at do not de
No account is
endently dete
option, the im
d dividend y
termine whe
s taken of an
ermined
mpact of
ield and
ether the
ny other
The c
vestin
best e
recog
recog
cost of equity
ng period. Th
estimate of t
nised in prof
nised in prev
y-settled tran
he cumulativ
the number o
fit or loss for
vious periods
nsactions ar
e charge to
of awards th
r the period i
s.
re recognise
profit or los
hat are likely
s the cumula
d as an exp
s is calculate
y to vest and
ative amount
pense with a
ed based on
d the expired
t calculated a
a correspond
n the grant d
d portion of
at each repo
ding increase
date fair valu
the vesting
orting date le
e in equity o
ue of the aw
period. The
ess amounts
over the
ward, the
amount
already
Marke
condit
condit
et conditions
tions are con
tions are sati
s are taken
nsidered to
isfied.
into consid
vest irrespe
deration in d
ctive of whe
determining
ether or not
fair value.
that market
Therefore,
condition ha
any awards
as been met
s subject to
t, provided a
market
all other
If equ
An ad
value
ity-settled aw
dditional exp
of the share
wards are m
ense is reco
-based comp
modified, as a
ognised, ove
pensation be
a minimum a
er the remain
enefit as at th
an expense i
ning vesting
he date of mo
is recognised
period, for a
odification.
d as if the m
any modifica
modification h
ation that inc
has not been
creases the t
n made.
total fair
If the
treate
during
award
non-vesting
d as a cance
g the vesting
d is forfeited.
condition is
ellation. If the
period, any
within the co
e condition is
remaining e
ontrol of the
s not within t
xpense for th
consolidated
the control o
he award is r
d entity or em
f the consoli
recognised o
mployee, the
dated entity
over the rem
failure to sa
or employee
aining vestin
atisfy the con
e and is not s
ng period, un
ndition is
satisfied
nless the
If equ
expen
new a
uity-settled a
nse is recogn
award is treat
awards are c
nised immed
ted as if they
cancelled, it
diately. If a n
y were a mod
is treated a
ew replacem
dification.
as if it has v
ment award is
vested on th
s substituted
he date of c
d for the can
cancellation,
celled award
and any re
d, the cance
maining
lled and
Fair v
When
fair va
betwe
princip
value measu
n an asset or
alue is based
een market p
pal market; o
urement
r liability, fina
d on the price
participants
or in the abse
ancial or non
e that would
at the meas
ence of a pri
n-financial, is
be received
surement da
ncipal marke
s measured
to sell an as
ate; and ass
et, in the mos
at fair value
sset or paid t
umes that th
st advantage
e for recogni
to transfer a
he transactio
eous market.
tion or disclo
liability in an
on will take
osure purpos
n orderly tran
place either
ses, the
nsaction
r: in the
Fair v
assum
highes
availa
unobs
value is mea
ming they ac
st and best
able to meas
servable inpu
asured using
ct in their eco
use. Valuat
sure fair valu
uts.
g the assum
onomic best
ion techniqu
ue, are used
mptions that
t interests. F
ues that are
d, maximisin
market part
For non-finan
appropriate
g the use o
ticipants wo
ncial assets,
in the circu
f relevant ob
uld use whe
the fair valu
umstances a
bservable in
en pricing th
ue measurem
nd for which
puts and mi
he asset or
ment is base
h sufficient d
inimising the
liability,
ed on its
data are
e use of
Issue
Ordina
d capital
ary shares a
are classified
as equity.
Increm
from t
mental costs
s.
the proceeds
directly attri
butable to th
he issue of n
new shares o
or options are
e shown in e
equity as a d
eduction, ne
et of tax,
Reven
nues, expen
ses and ass
sets are reco
ognised net
of the amou
unt of assoc
ciated GST,
unless the G
GST incurre
d is not
recove
erable from t
the tax autho
ority. In this
case it is rec
cognised as
part of the c
cost of the ac
cquisition of
the asset or
r as part
Good
ds and Servi
ces Tax ('GS
ST') and oth
her similar t
axes
Divide
Divide
ends
ends are reco
ognised whe
en declared d
during the fin
nancial year a
and no longe
er at the disc
cretion of the
company.
Busin
The a
instrum
ness combin
acquisition m
ments or oth
nations
method of a
her assets are
accounting i
e acquired.
s used to a
account for
33
33
business c
combinations
s regardless
s of whether
r equity
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
1. Significan
nt accountin
ng policies (
(continued)
The c
consideration
n transferred
is the sum
of the acqu
isition-date f
fair values o
of the assets
s transferred
, equity instr
ruments
issued
d or liabilities
s incurred by
y the acquire
r to former o
owners of the
e acquiree an
nd the amou
nt of any non
n-controlling
interest
in the
acquiree. Fo
or each busi
ness combin
nation, the no
on-controlling
g interest in
the acquiree
e is measure
d at either fa
air value
or at
the proportio
onate share
of the acqu
uiree's identif
fiable net as
ssets. All acq
quisition cos
sts are expe
nsed as inc
urred to
profit
or loss.
On the
e acquisition
n of a busine
ess, the cons
solidated ent
ity assesses
s the financia
al assets acq
quired and lia
abilities assu
umed for
appro
priate classif
fication and
designation
in accordanc
ce with the c
contractual te
erms, econo
mic conditio
ns, the cons
olidated
entity'
s operating o
or accounting
g policies an
nd other perti
inent conditio
ons in existe
nce at the ac
cquisition-da
ate.
Where
e the busine
ess combina
ation is achi
eved in stag
ges, the con
nsolidated e
ntity remeas
sures its pre
eviously held
d equity
interes
st in the acq
uiree at the a
acquisition-d
date fair value
e and the dif
fference betw
ween the fair
r value and th
he previous
carrying
amou
nt is recognis
sed in profit
or loss.
Contin
ngent consid
deration to b
be transferre
ed by the ac
cquirer is rec
cognised at
the acquisit
ion-date fair
r value. Subs
sequent
chang
ges in the fa
air value of th
he contingen
nt considerat
tion classifie
ed as an ass
set or liability
y is recognis
sed in profit
or loss.
Contin
ngent consid
deration clas
ssified as eq
quity is not r
remeasured
and its sub
bsequent set
ttlement is a
accounted fo
or within
equity
y.
The d
difference be
etween the a
acquisition-d
date fair valu
ue of assets
s acquired,
liabilities as
sumed and
any non-co
ntrolling
interes
st in the acq
quiree and th
he fair value
of the consid
deration tran
nsferred and
the fair valu
e of any pre
-existing inv
estment
in the
acquiree is
recognised a
as goodwill.
If the consid
eration trans
sferred and t
he pre-existi
ing fair value
e is less than
n the fair
value
of the ident
ifiable net as
ssets acquir
ed, being a
bargain purc
chase to the
e acquirer, th
he difference
e is recognis
sed as a
gain d
directly in pro
ofit or loss by
y the acquire
er on the acq
quisition-date
e, but only a
after a reasse
essment of th
he identificat
tion and
measu
urement of t
the net asset
ts acquired,
the non-con
ntrolling inter
rest in the ac
cquiree, if an
ny, the consi
ideration tran
nsferred
and th
he acquirer's
previously h
held equity in
nterest in the
e acquirer.
Busin
ess combin
ations are
initially acco
ounted for o
on a provis
sional basis.
. The acqui
irer retrospe
ectively adju
usts the
provis
sional amoun
nts recognise
ed and also
recognises a
additional as
ssets or liabil
lities during t
the measure
ement period
d, based
on ne
ew informatio
on obtained
about the fa
acts and circ
cumstances
that existed
d at the acqu
uisition-date
. The measu
urement
period
d ends on eit
ther the earl
ier of (i) 12
months from
m the date of
f the acquisit
tion or (ii) wh
hen the acqu
uirer receives
s all the
inform
mation possib
ble to determ
mine fair value
e.
Basic
earnings pe
er share is c
alculated by
dividing the
e profit attribu
utable to the
e owners of
Kip McGrath
h Education
Centres
Limite
ed, excluding
g any costs o
of servicing
equity other
than ordina
ary shares, b
by the weight
ted average
number of o
ordinary
shares
s outstandin
ng during the
e financial ye
ear, adjusted
d for bonus
elements in
ordinary sh
ares issued
during the f
financial
Dilute
d earnings p
per share ad
djusts the fig
ures used in
n the determ
mination of ba
asic earnings
s per share t
to take into
account
the af
fter income t
tax effect of
interest and
other financ
cing costs as
ssociated wi
ith dilutive po
otential ordin
nary shares
and the
weigh
hted average
e number of
shares assu
umed to hav
ve been issu
ued for no c
consideration
n in relation
to dilutive p
potential
Earni
ngs per sha
are
Basic
earnings pe
er share
year.
Dilute
d earnings p
per share
ordina
ary shares.
of the
expense.
financ
cial position.
Recei
vables and
payables ar
re stated inc
clusive of th
e amount of
f GST recei
vable or pay
yable. The n
net amount
of GST
recove
erable from,
or payable
to, the tax a
authority is i
included in o
other receiva
ables or othe
er payables
in the state
ement of
Cash
flows are p
presented on
n a gross b
asis. The G
GST compon
nents of cas
sh flows aris
sing from inv
vesting or fi
nancing
activit
ties which are
e recoverabl
e from, or pa
ayable to the
e tax authorit
y, are presen
nted as oper
rating cash fl
ows.
34
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
1. Significan
nt accountin
ng policies (
(continued)
Equity
y-settled tran
nsactions are
e awards of
shares, or o
options over
shares, that
are provide
d to employe
ees in excha
ange for
the re
ndering of se
ervices.
The c
cost of equity
y-settled tran
nsactions are
e measured
at fair value
e on grant d
ate. Fair val
ue is indepe
endently dete
ermined
using
Black-Schol
les option pr
ricing model
that takes in
nto account
the exercise
e price, the t
term of the o
option, the im
mpact of
dilutio
on, the share
e price at gra
ant date and
expected pr
ice volatility
of the under
rlying share,
the expected
d dividend y
ield and
the ris
sk free intere
est rate for th
he term of th
he option, tog
gether with n
non-vesting c
conditions th
at do not de
termine whe
ether the
conso
olidated entity
y receives th
he services t
that entitle th
he employee
es to receive
e payment. N
No account is
s taken of an
ny other
vestin
ng conditions
.
The c
cost of equity
y-settled tran
nsactions ar
re recognise
d as an exp
pense with a
a correspond
ding increase
e in equity o
over the
vestin
ng period. Th
he cumulativ
e charge to
profit or los
s is calculate
ed based on
n the grant d
date fair valu
ue of the aw
ward, the
best e
estimate of t
the number o
of awards th
hat are likely
y to vest and
d the expired
d portion of
the vesting
period. The
amount
recog
nised in prof
fit or loss for
r the period i
s the cumula
ative amount
t calculated a
at each repo
orting date le
ess amounts
already
recog
nised in prev
vious periods
s.
Marke
et conditions
s are taken
into consid
deration in d
determining
fair value.
Therefore,
any awards
s subject to
market
condit
tions are con
nsidered to
vest irrespe
ctive of whe
ether or not
that market
condition ha
as been met
t, provided a
all other
condit
tions are sati
isfied.
If equ
ity-settled aw
wards are m
modified, as a
a minimum a
an expense i
is recognised
d as if the m
modification h
has not been
n made.
An ad
dditional exp
ense is reco
ognised, ove
er the remain
ning vesting
period, for a
any modifica
ation that inc
creases the t
total fair
value
of the share
-based comp
pensation be
enefit as at th
he date of mo
odification.
If the
non-vesting
condition is
within the co
ontrol of the
consolidated
d entity or em
mployee, the
failure to sa
atisfy the con
ndition is
treate
d as a cance
ellation. If the
e condition is
s not within t
the control o
f the consoli
dated entity
or employee
e and is not s
satisfied
during
g the vesting
period, any
remaining e
xpense for th
he award is r
recognised o
over the rem
aining vestin
ng period, un
nless the
award
d is forfeited.
If equ
uity-settled a
awards are c
cancelled, it
is treated a
as if it has v
vested on th
he date of c
cancellation,
and any re
maining
expen
nse is recogn
nised immed
diately. If a n
ew replacem
ment award is
s substituted
d for the can
celled award
d, the cance
lled and
new a
award is treat
ted as if they
y were a mod
dification.
Fair v
value measu
urement
When
n an asset or
r liability, fina
ancial or non
n-financial, is
s measured
at fair value
e for recogni
tion or disclo
osure purpos
ses, the
fair va
alue is based
d on the price
e that would
be received
to sell an as
sset or paid t
to transfer a
liability in an
n orderly tran
nsaction
betwe
een market p
participants
at the meas
surement da
ate; and ass
umes that th
he transactio
on will take
place either
r: in the
princip
pal market; o
or in the abse
ence of a pri
ncipal marke
et, in the mos
st advantage
eous market.
Fair v
value is mea
asured using
g the assum
mptions that
market part
ticipants wo
uld use whe
en pricing th
he asset or
liability,
assum
ming they ac
ct in their eco
onomic best
t interests. F
For non-finan
ncial assets,
the fair valu
ue measurem
ment is base
ed on its
highes
st and best
use. Valuat
ion techniqu
ues that are
appropriate
in the circu
umstances a
nd for which
h sufficient d
data are
availa
able to meas
sure fair valu
ue, are used
d, maximisin
g the use o
f relevant ob
bservable in
puts and mi
inimising the
e use of
unobs
servable inpu
uts.
Issue
d capital
Ordina
ary shares a
are classified
as equity.
from t
the proceeds
s.
Divide
ends
Increm
mental costs
directly attri
butable to th
he issue of n
new shares o
or options are
e shown in e
equity as a d
eduction, ne
et of tax,
Divide
ends are reco
ognised whe
en declared d
during the fin
nancial year a
and no longe
er at the disc
cretion of the
company.
The a
acquisition m
method of a
accounting i
s used to a
account for
business c
combinations
s regardless
s of whether
r equity
Busin
ness combin
nations
instrum
ments or oth
her assets are
e acquired.
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
1. Significan
nt accountin
ng policies (
(continued)
The c
issued
in the
or at
profit
consideration
d or liabilities
acquiree. Fo
the proportio
or loss.
n transferred
s incurred by
or each busi
onate share
is the sum
y the acquire
ness combin
of the acqu
of the acqu
r to former o
nation, the no
uiree's identif
isition-date f
owners of the
on-controlling
fiable net as
fair values o
e acquiree an
g interest in
ssets. All acq
of the assets
nd the amou
the acquiree
quisition cos
s transferred
nt of any non
e is measure
sts are expe
, equity instr
n-controlling
d at either fa
nsed as inc
ruments
interest
air value
urred to
On the
appro
entity'
e acquisition
priate classif
s operating o
n of a busine
fication and
or accounting
ess, the cons
designation
g policies an
solidated ent
in accordanc
nd other perti
ity assesses
ce with the c
inent conditio
s the financia
contractual te
ons in existe
al assets acq
erms, econo
nce at the ac
quired and lia
mic conditio
cquisition-da
abilities assu
ns, the cons
ate.
umed for
olidated
Where
interes
amou
e the busine
st in the acq
nt is recognis
ess combina
uiree at the a
sed in profit
ation is achi
acquisition-d
or loss.
eved in stag
date fair value
ges, the con
e and the dif
nsolidated e
fference betw
ntity remeas
ween the fair
sures its pre
r value and th
eviously held
he previous
d equity
carrying
ngent consid
Contin
ges in the fa
chang
Contin
ngent consid
y.
equity
deration to b
air value of th
deration clas
be transferre
he contingen
ssified as eq
ed by the ac
nt considerat
quity is not r
cquirer is rec
tion classifie
remeasured
cognised at
ed as an ass
and its sub
the acquisit
set or liability
bsequent set
ion-date fair
y is recognis
ttlement is a
r value. Subs
sed in profit
accounted fo
sequent
or loss.
or within
The d
interes
in the
value
gain d
measu
and th
difference be
st in the acq
acquiree is
of the ident
directly in pro
urement of t
he acquirer's
etween the a
quiree and th
recognised a
ifiable net as
ofit or loss by
the net asset
previously h
acquisition-d
he fair value
as goodwill.
ssets acquir
y the acquire
ts acquired,
held equity in
date fair valu
of the consid
If the consid
ed, being a
er on the acq
the non-con
nterest in the
ue of assets
deration tran
eration trans
bargain purc
quisition-date
ntrolling inter
e acquirer.
s acquired,
nsferred and
sferred and t
chase to the
e, but only a
rest in the ac
liabilities as
the fair valu
he pre-existi
e acquirer, th
after a reasse
cquiree, if an
sumed and
e of any pre
ing fair value
he difference
essment of th
ny, the consi
any non-co
-existing inv
e is less than
e is recognis
he identificat
ideration tran
ntrolling
estment
n the fair
sed as a
tion and
nsferred
Busin
provis
on ne
period
inform
ess combin
sional amoun
ew informatio
d ends on eit
mation possib
ations are
nts recognise
on obtained
ther the earl
ble to determ
initially acco
ed and also
about the fa
ier of (i) 12
mine fair value
ounted for o
recognises a
acts and circ
months from
e.
on a provis
additional as
cumstances
m the date of
sional basis.
ssets or liabil
that existed
f the acquisit
. The acqui
lities during t
d at the acqu
tion or (ii) wh
irer retrospe
the measure
uisition-date
hen the acqu
ectively adju
ement period
. The measu
uirer receives
usts the
d, based
urement
s all the
Earni
ngs per sha
are
earnings pe
earnings pe
ed, excluding
s outstandin
er share
er share is c
g any costs o
ng during the
Basic
Basic
Limite
shares
year.
alculated by
of servicing
e financial ye
dividing the
equity other
ear, adjusted
e profit attribu
than ordina
d for bonus
utable to the
ary shares, b
elements in
e owners of
by the weight
ordinary sh
Kip McGrath
ted average
ares issued
h Education
number of o
during the f
Centres
ordinary
financial
Dilute
Dilute
the af
weigh
ordina
d earnings p
d earnings p
fter income t
hted average
ary shares.
per share
per share ad
tax effect of
e number of
djusts the fig
interest and
shares assu
ures used in
other financ
umed to hav
n the determ
cing costs as
ve been issu
mination of ba
ssociated wi
ued for no c
asic earnings
ith dilutive po
consideration
s per share t
otential ordin
n in relation
to take into
nary shares
to dilutive p
account
and the
potential
Good
Reven
recove
of the
ds and Servi
nues, expen
erable from t
expense.
ces Tax ('GS
ses and ass
the tax autho
ST') and oth
sets are reco
ority. In this
her similar t
ognised net
case it is rec
axes
of the amou
cognised as
unt of assoc
part of the c
ciated GST,
cost of the ac
unless the G
cquisition of
GST incurre
the asset or
d is not
r as part
Recei
recove
financ
vables and
erable from,
cial position.
payables ar
or payable
re stated inc
to, the tax a
clusive of th
authority is i
e amount of
included in o
f GST recei
other receiva
vable or pay
ables or othe
yable. The n
er payables
net amount
in the state
of GST
ement of
33
34
34
Cash
activit
flows are p
ties which are
presented on
e recoverabl
n a gross b
e from, or pa
asis. The G
ayable to the
GST compon
e tax authorit
nents of cas
y, are presen
sh flows aris
nted as oper
sing from inv
rating cash fl
vesting or fi
ows.
nancing
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
1. Significan
nt accountin
ng policies (
(continued)
Comm
mitments and
d contingenc
ies are disclo
osed net of t
he amount o
of GST recov
verable from,
or payable t
to, the tax au
uthority.
Comp
Certai
paratives
in reclassific
ations have
been made t
to the prior y
year to enhan
nce compara
ability in the s
statement of
financial pos
sition.
Roun
The c
issued
been
ding of amo
ompany is o
d by the Aus
rounded off
ounts
f a kind refer
stralian Secu
in accordanc
rred to in AS
urities and I
ce with that in
SIC Corporat
nvestments
nstrument to
ions (Round
Commission
o the nearest
ing in Financ
n, relating to
thousand do
cial/Directors
o 'rounding-o
ollars, or in c
s’ Reports) In
off'. Amounts
certain cases
nstrument 20
s in this repo
s, the neares
016/191,
ort have
st dollar.
New A
Austra
mand
The c
most r
Accounting
alian Accou
atory, have
consolidated
relevant to th
Standards
nting Stand
not been ea
entity's asse
he consolidat
and Interpre
ards and In
arly adopted
essment of t
ted entity, ar
etations not
nterpretations
by the cons
the impact o
re set out be
t yet mandat
s that have
olidated enti
f these new
low.
tory or early
e recently b
ity for the an
or amended
y adopted
been issued
nnual reporti
d Accounting
or amende
ng period en
g Standards
ed but are
nded 30 Jun
and Interpre
not yet
ne 2017.
etations,
AASB
This s
previo
Measu
be me
contra
are to
initial
incom
entity'
accou
the en
Impair
signifi
new d
the fin
trade
repay
be me
not im
B 9 Financial
standard is a
ous versions
urement'. AA
easured at a
actual cash f
o be classifie
recognition t
me ('OCI'). Fo
s own credi
unting require
ntity. New im
rment will be
cantly since
disclosures. T
nancial state
receivables
ment of prin
easured at fa
mpacted as th
Instruments
applicable to
s of AASB 9
ASB 9 introd
amortised co
lows, which
ed and meas
to present g
or financial
it risk to be
ements are in
mpairment r
e measured u
initial recog
The consolid
ements on th
that do not
cipal, which
ace value. Ot
he group doe
o annual repo
9 and comp
uces new cla
ost, if it is he
arise on spe
sured at fair
ains and los
liabilities, th
presented
ntended to m
requirements
under a 12-m
nition in whi
dated entity w
he basis that
t carry a sig
in the case
ther financia
es not carry t
orting period
pletes the p
assification a
eld within a b
ecified dates
value throu
sses on equit
e standard
in OCI (unle
more closely
s will use an
month ECL m
ch case the
will adopt this
t the main fi
gnificant fina
of trade rec
al asset class
them at fair v
ds beginning
project to re
and measure
business mo
and solely p
gh profit or
ty instrumen
requires the
ess it would
align the acc
n 'expected
method unles
lifetime ECL
s standard fr
nancial asse
ancing comp
ceivables is t
ses are not m
value.
g on or after
place IAS 3
ement model
del whose o
rincipal and
loss unless
nts (that are
portion of t
create an
counting trea
credit loss'
ss the credit
L method is a
rom 1 July 20
ets recognise
onent and i
he transactio
material to th
1 January 2
39 'Financia
ls for financi
objective is to
interest. All o
the entity m
not held-for-
the change
accounting
atment with t
('ECL') mod
risk on a fin
adopted. The
018. It is not
ed represent
nvolve a sin
on price. Bot
he group. Fin
2018. The st
l Instrument
al assets. A
o hold asset
other financi
akes an irre
trading) in o
in fair value
mismatch).
he risk mana
del to recog
nancial instru
e standard in
t expected to
t cash and c
ngle cash flo
th asset clas
nancial liabilit
tandard repl
ts: Recognit
financial ass
ts in order to
al instrumen
evocable elec
other compre
e that relates
New simple
agement acti
gnise an allo
ument has in
ntroduces ad
o significantly
cash equival
ow represen
sses will con
ties of the gr
aces all
ion and
set shall
o collect
nt assets
ction on
ehensive
s to the
r hedge
ivities of
owance.
creased
dditional
y impact
ent and
ting the
ntinue to
roup are
AASB
This s
single
the tra
expec
implie
price,
perfor
appro
Credit
obliga
satisfi
obliga
should
statem
betwe
to ena
those
entity
basis
the sa
B 15 Revenue
standard is a
e standard fo
ansfer of pro
cts to be entit
ed) to be iden
adjusted fo
rmance oblig
ach if no dis
t risk will be
ation would b
ed when the
ations satisfie
d be recogni
ment of finan
een the entity
able users to
contracts; a
will adopt th
that most of
atisfaction of
e from Contr
applicable to
r revenue re
omised good
tled in excha
ntified, toget
or the time
gations on a
stinct observ
e presented
be satisfied w
e service ha
ed over time,
ised as the p
ncial positio
y's performan
o understand
and any asse
his standard
f the group's
the primary
racts with Cu
o annual rep
ecognition. Th
ds or service
ange for thos
ther with the
value of mo
a basis of re
able prices e
separately
when the cus
s been prov
, an entity wo
performance
n as a cont
nce and the
d the contrac
ets recognise
from 1 July
s revenue is
performance
ustomers
porting period
he core princ
es to custom
se goods or s
separate pe
oney exclud
elative stand
exist; and re
as an expen
stomer obtai
vided, typical
ould select a
e obligation is
tract liability,
customer's p
cts with custo
ed from the c
y 2018. It is
recognised
e obligation.
ds beginning
ciple of the s
mers in an am
services. The
erformance o
ing credit ris
-alone sellin
ecognition of
nse rather t
ins control o
lly for promis
an appropriat
s satisfied. C
, a contract
payment. Su
omers; the s
costs to obta
not expecte
at the time o
g on or after
standard is th
mount that re
e standard w
obligations w
sk; allocatio
ng price of e
revenue wh
han adjuste
of the goods.
ses to trans
te measure o
Contracts wit
asset, or a
ufficient quan
significant jud
ain or fulfil a
d to significa
of lessons be
r 1 January
hat an entity
eflects the c
will require: co
within the con
on of the tra
each distinct
hen each per
d to revenu
. For service
fer services
of progress t
th customers
a receivable,
ntitative and q
dgements m
contract wit
antly impact
eing provide
2018. The s
will recognis
consideration
ontracts (eith
ntract; determ
ansaction pr
t good or se
rformance ob
e. For good
es, the perfor
to customer
to determine
s will be pres
depending
qualitative d
made in apply
th a custome
the financia
d to a stude
standard pro
se revenue t
n to which th
her written, v
mine the tran
ice to the s
ervice, or es
bligation is s
ds, the perfo
rmance oblig
rs. For perfo
e how much r
sented in an
on the rela
isclosure is r
ying the guid
er. The cons
al statements
ent which rep
ovides a
o depict
he entity
verbal or
nsaction
separate
timation
satisfied.
ormance
gation is
ormance
revenue
n entity's
ationship
required
dance to
olidated
s on the
presents
35
35
36
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
1. Significan
nt accountin
ng policies (
(continued)
AASB
B 16 Leases
This s
standard is a
applicable to
annual repo
rting periods
s beginning o
on or after 1
January 201
19. The stand
dard replace
es AASB
117 ‘L
Leases’ and f
for lessees w
will eliminate
the classific
cations of ope
erating lease
es and financ
ce leases. Su
ubject to exc
ceptions,
a ‘righ
ht-of-use’ as
sset will be
capitalised
in the state
ment of fina
ancial positio
on, measure
ed as the p
resent value
e of the
unavo
oidable future
e lease pay
yments to be
e made over
r the lease t
term. The e
xceptions re
elate to shor
rt-term lease
es of 12
month
hs or less a
and leases
of low-value
e assets (su
uch as pers
sonal compu
uters and sm
mall office f
furniture) wh
here an
accou
unting policy
choice exists
s whereby ei
ither a ‘right-
-of-use’ asse
et is recognis
sed or lease
payments ar
re expensed
to profit
or los
ss as incurr
red. A liabil
lity correspo
onding to th
he capitalise
ed lease wi
ll also be r
recognised,
adjusted fo
or lease
prepa
yments, leas
se incentives
s received, i
nitial direct c
costs incurre
ed and an es
stimate of an
ny future res
storation, rem
moval or
disma
antling costs
. Straight-lin
e operating
lease expen
nse recognit
tion will be r
replaced wit
h a deprecia
ation charge
e for the
leased
d asset (incl
uded in ope
erating costs
) and an int
erest expens
se on the re
ecognised le
ase liability
(included in
finance
costs)
). In the ear
lier periods
of the lease
e, the expens
ses associat
ted with the
lease unde
r AASB 16 w
will be highe
er when
compa
ared to leas
se expenses
s under AAS
SB 117. Ho
owever, EBIT
TDA (Earnin
ngs Before I
Interest, Tax
x, Depreciat
ion and
Amort
tisation) resu
ults will be im
mproved as t
the operating
g expense is
s replaced by
y interest ex
xpense and d
depreciation
in profit
or los
s under AAS
SB 16. For c
classification
n within the s
statement of
f cash flows
, the lease p
payments wi
ill be separa
ated into
both a
a principal (fi
nancing activ
vities) and in
nterest (eithe
er operating o
or financing a
activities) co
mponent. Fo
or lessor acc
ounting,
the st
tandard doe
s not substa
antially chan
nge how a l
lessor accou
unts for leas
ses. The co
nsolidated e
entity will ad
dopt this
standa
ard from 1 Ju
uly 2019 but
t the impact o
of its adoptio
on is not expe
ected to mat
terially affect
t the consolid
dated entity a
as there
are m
inimal leases
s.
Note 2
2. Critical ac
ccounting ju
udgements,
, estimates a
and assump
ptions
The p
preparation o
of the financ
ial statemen
nts requires m
managemen
t to make ju
udgements, e
estimates an
nd assumptio
ons that
affect
the reported
d amounts in
the financia
al statements
s. Manageme
ent continual
ly evaluates
its judgeme
nts and estim
mates in
relatio
on to assets
, liabilities, c
contingent lia
abilities, reve
enue and ex
xpenses. Ma
anagement b
bases its jud
dgements, es
stimates
and a
assumptions
s on historic
cal experien
nce and on
other vario
ous factors,
, including
expectations
s of future
events,
mana
gement belie
eves to be re
easonable un
nder the circ
cumstances.
The resultin
ng accounting
g judgement
ts and estima
ates will
seldom
m equal the
related actua
al results. Th
he judgemen
nts, estimates
s and assum
mptions that h
have a signif
ficant risk of
causing
a mat
terial adjustm
ment to the
carrying am
mounts of as
ssets and li
abilities (refe
er to the re
spective not
tes) within t
the next
financ
cial year are
discussed be
elow.
Intang
gible assets w
with indefinit
te life
Intelle
ectual proper
rty, franchise
e territories a
and certain p
product and o
overseas de
velopment c
costs are clas
ssified as ha
aving an
indefin
nite useful lif
fe and not am
mortised as
managemen
nt considers
that there is
no foreseea
able limit to t
he cash flow
ws these
assets
s are genera
ating. Such
assets are s
subject to an
nnual impair
rment review
ws in accorda
ance with th
he accountin
g policy
stated
d in note 1.
The recover
rable amoun
nts of cash-g
generating un
nits to which
h such asset
ts relate hav
ve been dete
ermined
based
d on value-in
n-use calcula
ations which
require the u
use of assum
mptions, inclu
uding estima
ated discount
t rates based
d on the
curren
nt cost of ca
apital and gr
owth rates o
of the estima
ated future c
cash flows. E
Estimates th
hat managem
ment has ma
ade with
respe
ct to such ca
alculations ar
re disclosed
in note 10.
Finite
life intangibl
le assets
The c
consolidated
entity determ
mines the es
stimated use
eful lives and
d related am
ortisation ch
harges for its
s finite life in
tangible
assets
s. The usef
ful lives cou
uld change
significantly
as a resul
lt of technic
cal innovatio
ons or some
e other eve
ent. The
amort
tisation charg
ge will increa
ase where th
he useful liv
es are less
than previou
usly estimate
ed lives. The
e consolidate
ed entity
asses
sses impairm
ment of such
assets at ea
ach reporting
date by eva
aluating cond
ditions specif
fic to the con
nsolidated en
ntity, the
cash g
generating u
unit to which
the asset be
elongs, and t
to the particu
ular asset th
hat may lead
to impairme
ent. If an imp
pairment
trigge
r exists, the
recoverable
amount of t
he asset is d
determined.
This involves
s estimating
the asset’s
fair value les
ss costs
of dis
posal or val
lue-in-use ca
alculations w
which incorpo
orate a num
mber of key
estimates an
nd assumpti
ions. Estima
ates that
mana
gement has
made with re
espect to suc
ch calculatio
ns are disclo
osed in note
10.
Share
e-based paym
ment transac
ctions
The c
consolidated
entity meas
ures the cos
st of equity-s
settled transa
actions with
employees
by reference
e to the fair v
value of
the eq
quity instrum
ments at the d
date at whic
ch they are g
granted. The
fair value is
s determined
d by using ei
ther the Bino
omial or
Black-
-Scholes mo
odel taking
into accoun
nt the terms
s and condit
tions upon
which the i
nstruments
were grante
ed. The
accou
unting estima
ates and as
sumptions r
relating to eq
quity-settled
share-base
ed payments
s would have
e no impact
t on the
carryin
ng amounts
of assets an
d liabilities w
within the nex
xt annual rep
porting period
d but may im
mpact profit o
or loss and eq
quity.
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
1. Significan
nt accountin
ng policies (
(continued)
Comm
mitments and
d contingenc
ies are disclo
osed net of t
he amount o
of GST recov
verable from,
or payable t
to, the tax au
uthority.
Certai
in reclassific
ations have
been made t
to the prior y
year to enhan
nce compara
ability in the s
statement of
financial pos
sition.
Comp
paratives
Roun
ding of amo
ounts
The c
ompany is o
f a kind refer
rred to in AS
SIC Corporat
ions (Round
ing in Financ
cial/Directors
s’ Reports) In
nstrument 20
016/191,
issued
d by the Aus
stralian Secu
urities and I
nvestments
Commission
n, relating to
o 'rounding-o
off'. Amounts
s in this repo
ort have
been
rounded off
in accordanc
ce with that in
nstrument to
o the nearest
thousand do
ollars, or in c
certain cases
s, the neares
st dollar.
New A
Accounting
Standards
and Interpre
etations not
t yet mandat
tory or early
y adopted
Austra
alian Accou
nting Stand
ards and In
nterpretations
s that have
e recently b
been issued
or amende
ed but are
not yet
mand
atory, have
not been ea
arly adopted
by the cons
olidated enti
ity for the an
nnual reporti
ng period en
nded 30 Jun
ne 2017.
The c
consolidated
entity's asse
essment of t
the impact o
f these new
or amended
d Accounting
g Standards
and Interpre
etations,
most r
relevant to th
he consolidat
ted entity, ar
re set out be
low.
AASB
B 9 Financial
Instruments
This s
standard is a
applicable to
o annual repo
orting period
ds beginning
g on or after
1 January 2
2018. The st
tandard repl
aces all
previo
ous versions
s of AASB 9
9 and comp
pletes the p
project to re
place IAS 3
39 'Financia
l Instrument
ts: Recognit
ion and
Measu
urement'. AA
ASB 9 introd
uces new cla
assification a
and measure
ement model
ls for financi
al assets. A
financial ass
set shall
be me
easured at a
amortised co
ost, if it is he
eld within a b
business mo
del whose o
objective is to
o hold asset
ts in order to
o collect
contra
actual cash f
lows, which
arise on spe
ecified dates
and solely p
rincipal and
interest. All o
other financi
al instrumen
nt assets
are to
o be classifie
ed and meas
sured at fair
value throu
gh profit or
loss unless
the entity m
akes an irre
evocable elec
ction on
initial
recognition t
to present g
ains and los
sses on equit
ty instrumen
nts (that are
not held-for-
trading) in o
other compre
ehensive
incom
me ('OCI'). Fo
or financial
liabilities, th
e standard
requires the
portion of t
the change
in fair value
e that relates
s to the
entity'
s own credi
it risk to be
presented
in OCI (unle
ess it would
create an
accounting
mismatch).
New simple
r hedge
accou
unting require
ements are in
ntended to m
more closely
align the acc
counting trea
atment with t
he risk mana
agement acti
ivities of
the en
ntity. New im
mpairment r
requirements
s will use an
n 'expected
credit loss'
('ECL') mod
del to recog
gnise an allo
owance.
Impair
rment will be
e measured u
under a 12-m
month ECL m
method unles
ss the credit
risk on a fin
nancial instru
ument has in
creased
signifi
cantly since
initial recog
nition in whi
ch case the
lifetime ECL
L method is a
adopted. The
e standard in
ntroduces ad
dditional
new d
disclosures. T
The consolid
dated entity w
will adopt this
s standard fr
rom 1 July 20
018. It is not
t expected to
o significantly
y impact
the fin
nancial state
ements on th
he basis that
t the main fi
nancial asse
ets recognise
ed represent
t cash and c
cash equival
ent and
trade
receivables
that do not
t carry a sig
gnificant fina
ancing comp
onent and i
nvolve a sin
ngle cash flo
ow represen
ting the
repay
ment of prin
cipal, which
in the case
of trade rec
ceivables is t
he transactio
on price. Bot
th asset clas
sses will con
ntinue to
be me
easured at fa
ace value. Ot
ther financia
al asset class
ses are not m
material to th
he group. Fin
nancial liabilit
ties of the gr
roup are
not im
mpacted as th
he group doe
es not carry t
them at fair v
value.
AASB
B 15 Revenue
e from Contr
racts with Cu
ustomers
This s
standard is a
applicable to
o annual rep
porting period
ds beginning
g on or after
r 1 January
2018. The s
standard pro
ovides a
single
e standard fo
r revenue re
ecognition. Th
he core princ
ciple of the s
standard is th
hat an entity
will recognis
se revenue t
o depict
the tra
ansfer of pro
omised good
ds or service
es to custom
mers in an am
mount that re
eflects the c
consideration
n to which th
he entity
expec
cts to be entit
tled in excha
ange for thos
se goods or s
services. The
e standard w
will require: co
ontracts (eith
her written, v
verbal or
implie
ed) to be iden
ntified, toget
ther with the
separate pe
erformance o
obligations w
within the con
ntract; determ
mine the tran
nsaction
price,
adjusted fo
or the time
value of mo
oney exclud
ing credit ris
sk; allocatio
on of the tra
ansaction pr
ice to the s
separate
perfor
rmance oblig
gations on a
a basis of re
elative stand
-alone sellin
ng price of e
each distinct
t good or se
ervice, or es
timation
appro
ach if no dis
stinct observ
able prices e
exist; and re
ecognition of
revenue wh
hen each per
rformance ob
bligation is s
satisfied.
Credit
t risk will be
e presented
separately
as an expen
nse rather t
han adjuste
d to revenu
e. For good
ds, the perfo
ormance
obliga
ation would b
be satisfied w
when the cus
stomer obtai
ins control o
of the goods.
. For service
es, the perfor
rmance oblig
gation is
satisfi
ed when the
e service ha
s been prov
vided, typical
lly for promis
ses to trans
fer services
to customer
rs. For perfo
ormance
obliga
ations satisfie
ed over time,
, an entity wo
ould select a
an appropriat
te measure o
of progress t
to determine
e how much r
revenue
should
d be recogni
ised as the p
performance
e obligation is
s satisfied. C
Contracts wit
th customers
s will be pres
sented in an
n entity's
statem
ment of finan
ncial positio
n as a cont
tract liability,
, a contract
asset, or a
a receivable,
depending
on the rela
ationship
betwe
een the entity
y's performan
nce and the
customer's p
payment. Su
ufficient quan
ntitative and q
qualitative d
isclosure is r
required
to ena
able users to
o understand
d the contrac
cts with custo
omers; the s
significant jud
dgements m
made in apply
ying the guid
dance to
those
contracts; a
and any asse
ets recognise
ed from the c
costs to obta
ain or fulfil a
contract wit
th a custome
er. The cons
olidated
entity
will adopt th
his standard
from 1 July
y 2018. It is
not expecte
d to significa
antly impact
the financia
al statements
s on the
basis
that most of
f the group's
s revenue is
recognised
at the time o
of lessons be
eing provide
d to a stude
ent which rep
presents
the sa
atisfaction of
the primary
performance
e obligation.
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
1. Significan
nt accountin
ng policies (
(continued)
AASB
This s
117 ‘L
a ‘righ
unavo
month
accou
or los
prepa
disma
leased
costs)
compa
Amort
or los
both a
the st
standa
are m
B 16 Leases
standard is a
Leases’ and f
ht-of-use’ as
oidable future
hs or less a
unting policy
ss as incurr
yments, leas
antling costs
d asset (incl
). In the ear
ared to leas
tisation) resu
s under AAS
a principal (fi
tandard doe
ard from 1 Ju
inimal leases
applicable to
for lessees w
sset will be
e lease pay
and leases
choice exists
red. A liabil
se incentives
. Straight-lin
uded in ope
lier periods
se expenses
ults will be im
SB 16. For c
nancing activ
s not substa
uly 2019 but
s.
annual repo
will eliminate
capitalised
yments to be
of low-value
s whereby ei
lity correspo
s received, i
e operating
erating costs
of the lease
s under AAS
mproved as t
classification
vities) and in
antially chan
t the impact o
rting periods
the classific
in the state
e made over
e assets (su
ither a ‘right-
onding to th
nitial direct c
lease expen
) and an int
e, the expens
SB 117. Ho
the operating
n within the s
nterest (eithe
nge how a l
of its adoptio
s beginning o
cations of ope
ment of fina
r the lease t
uch as pers
-of-use’ asse
he capitalise
costs incurre
nse recognit
erest expens
ses associat
owever, EBIT
g expense is
statement of
er operating o
lessor accou
on is not expe
on or after 1
erating lease
ancial positio
term. The e
sonal compu
et is recognis
ed lease wi
ed and an es
tion will be r
se on the re
ted with the
TDA (Earnin
s replaced by
f cash flows
or financing a
unts for leas
ected to mat
January 201
es and financ
on, measure
xceptions re
uters and sm
sed or lease
ll also be r
stimate of an
replaced wit
ecognised le
lease unde
ngs Before I
y interest ex
, the lease p
activities) co
ses. The co
terially affect
19. The stand
ce leases. Su
ed as the p
elate to shor
mall office f
payments ar
recognised,
ny future res
h a deprecia
ase liability
r AASB 16 w
Interest, Tax
xpense and d
payments wi
mponent. Fo
nsolidated e
t the consolid
dard replace
ubject to exc
resent value
rt-term lease
furniture) wh
re expensed
adjusted fo
storation, rem
ation charge
(included in
will be highe
x, Depreciat
depreciation
ill be separa
or lessor acc
entity will ad
dated entity a
es AASB
ceptions,
e of the
es of 12
here an
to profit
or lease
moval or
e for the
finance
er when
ion and
in profit
ated into
ounting,
dopt this
as there
Note 2
2. Critical ac
ccounting ju
udgements,
, estimates a
and assump
ptions
The p
affect
relatio
and a
mana
seldom
a mat
financ
preparation o
the reported
on to assets
assumptions
gement belie
m equal the
terial adjustm
cial year are
of the financ
d amounts in
, liabilities, c
s on historic
eves to be re
related actua
ment to the
discussed be
elow.
ial statemen
the financia
contingent lia
cal experien
easonable un
al results. Th
carrying am
nts requires m
al statements
abilities, reve
nce and on
nder the circ
he judgemen
mounts of as
managemen
s. Manageme
enue and ex
other vario
cumstances.
nts, estimates
ssets and li
t to make ju
ent continual
xpenses. Ma
ous factors,
The resultin
s and assum
abilities (refe
udgements, e
ly evaluates
anagement b
, including
ng accounting
mptions that h
er to the re
estimates an
its judgeme
bases its jud
expectations
g judgement
have a signif
spective not
nd assumptio
nts and estim
dgements, es
s of future
ts and estima
ficant risk of
tes) within t
ons that
mates in
stimates
events,
ates will
causing
the next
Intang
Intelle
indefin
assets
stated
based
curren
respe
gible assets w
ectual proper
nite useful lif
s are genera
d in note 1.
d on value-in
nt cost of ca
ct to such ca
with indefinit
rty, franchise
fe and not am
ating. Such
The recover
n-use calcula
apital and gr
alculations ar
te life
e territories a
mortised as
assets are s
rable amoun
ations which
owth rates o
re disclosed
and certain p
managemen
subject to an
nts of cash-g
require the u
of the estima
in note 10.
product and o
nt considers
nnual impair
generating un
use of assum
ated future c
overseas de
that there is
rment review
nits to which
mptions, inclu
cash flows. E
velopment c
no foreseea
ws in accorda
h such asset
uding estima
Estimates th
costs are clas
able limit to t
ance with th
ts relate hav
ated discount
hat managem
ssified as ha
he cash flow
he accountin
ve been dete
t rates based
ment has ma
aving an
ws these
g policy
ermined
d on the
ade with
Finite
The c
assets
amort
asses
cash g
trigge
of dis
mana
life intangibl
consolidated
s. The usef
tisation charg
sses impairm
generating u
r exists, the
posal or val
gement has
le assets
entity determ
ful lives cou
ge will increa
ment of such
unit to which
recoverable
lue-in-use ca
made with re
mines the es
uld change
ase where th
assets at ea
the asset be
amount of t
alculations w
espect to suc
stimated use
significantly
he useful liv
ach reporting
elongs, and t
he asset is d
which incorpo
ch calculatio
eful lives and
as a resul
es are less
date by eva
to the particu
determined.
orate a num
ns are disclo
d related am
lt of technic
than previou
aluating cond
ular asset th
This involves
mber of key
osed in note
ortisation ch
cal innovatio
usly estimate
ditions specif
hat may lead
s estimating
estimates an
10.
harges for its
ons or some
ed lives. The
fic to the con
to impairme
the asset’s
nd assumpti
s finite life in
e other eve
e consolidate
nsolidated en
ent. If an imp
fair value les
ions. Estima
tangible
ent. The
ed entity
ntity, the
pairment
ss costs
ates that
Share
The c
the eq
Black-
accou
carryin
e-based paym
consolidated
quity instrum
-Scholes mo
unting estima
ng amounts
ment transac
entity meas
ments at the d
odel taking
ates and as
of assets an
ctions
ures the cos
date at whic
into accoun
sumptions r
d liabilities w
st of equity-s
ch they are g
nt the terms
relating to eq
within the nex
settled transa
granted. The
s and condit
quity-settled
xt annual rep
actions with
fair value is
tions upon
share-base
porting period
employees
s determined
which the i
ed payments
d but may im
by reference
d by using ei
nstruments
s would have
mpact profit o
e to the fair v
ther the Bino
were grante
e no impact
or loss and eq
value of
omial or
ed. The
t on the
quity.
35
36
36
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note 2
2. Critical ac
ccounting ju
udgements,
, estimates a
and assump
ptions (cont
tinued)
Provis
The p
provis
rates
sion for impa
provision for
sion is asses
and specific
airment of rec
impairment
ssed by takin
knowledge o
ceivables
of receivab
ng into acco
of the individ
bles assessm
ount the rece
ual debtor's
ment require
ent sales exp
financial pos
s a degree
perience, the
sition.
of estimatio
e ageing of
on and judge
receivables,
ement. The
historical co
level of
ollection
me tax
Incom
The c
in det
course
anticip
outcom
provis
onsolidated
ermining the
e of busines
pated tax au
me of these
sions in the p
entity is subj
e provision fo
ss for which
udit issues b
matters is d
period in whic
ject to incom
or income ta
the ultimate
ased on the
different from
ch such dete
me taxes in th
x. There are
tax determi
e consolidate
m the carrying
ermination is
he jurisdictio
e many trans
nation is un
ed entity's cu
g amounts, s
made.
ns in which i
sactions and
certain. The
urrent unders
such differen
t operates. S
calculations
consolidate
standing of t
nces will imp
Significant ju
s undertaken
ed entity reco
the tax law.
act the curre
dgement is r
n during the o
ognises liabi
Where the f
ent and defe
required
ordinary
lities for
final tax
erred tax
Recov
Deferr
proba
assets
very of defer
red tax asse
ble that futu
s are expecte
rred tax asse
ets are reco
re taxable a
ed to be reco
ets
ognised for d
mounts will
overed throu
deductible te
be available
gh managem
emporary dif
e to utilise th
ment’s foreca
fferences on
ose tempora
ast taxable p
nly if the con
ary difference
profits over th
nsolidated e
es and losse
he next three
entity conside
es. The defe
e years.
ers it is
erred tax
Emplo
As dis
date a
emplo
increa
oyee benefits
scussed in n
are recognis
oyees at the
ases through
s provision
note 1, the lia
sed and mea
e reporting d
promotion a
ability for em
asured at the
date. In dete
and inflation
mployee bene
e present va
ermining the
have been ta
efits expecte
alue of the e
present va
aken into acc
ed to be sett
stimated fut
lue of the li
count.
led more tha
ure cash flow
ability, estim
an 12 month
ws to be ma
mates of attr
s from the re
ade in respe
rition rates a
eporting
ect of all
and pay
Note 3
3. Operating
g segments
Identif
The c
Chief
('COD
disclo
fication of rep
consolidated
Executive O
DM')) in asse
sed througho
portable ope
entity has o
Officer and
essing perfor
out these fin
erating segm
nly one oper
the Board o
mance and
ancial statem
ents
rating segme
of Directors
in determinin
ments.
ent based on
(collectively
ng the alloca
n the interna
y referred to
ation of resou
al reports tha
o as the Ch
urces. The o
at are review
hief Operatin
operating seg
wed and used
ng Decision
gment inform
d by the
Makers
mation is
The in
nformation re
eported to the
e CODM is o
on at least a
monthly bas
sis.
Geogr
The g
emplo
raphical infor
geographical
oyment bene
rmation
information
fits assets a
of non-curre
nd rights und
ent assets b
der insurance
elow is excl
e contracts.
usive of fina
ancial instrum
ments, deferr
red tax asse
ets, post
Geogr
raphical infor
rmation
Sa
les to extern
2017
$'000
ers
nal custome
2016
$'000
Geograp
phical non-c
assets
current
2017
7
0
$'000
20
$'
016
000
Austra
United
Overs
alasia
d Kingdom a
seas other
and Europe
7,351
5,190
965
8,79
5,11
60
92
1
02
9,723
9
711
-
9,383
711
-
13,506
14,50
05
10
0,434
10,094
37
37
38
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 4
4. Revenue
Sales
s revenue
Franc
chise fees
Stude
ent lesson fee
es
Sale o
of franchisee
e centres
Direct
t sales
Other
r revenue
Intere
est
Other
r revenue
Reve
nue
Note
5. Expenses
s
Profit
before incom
me tax includ
des the follow
wing specific
c expenses:
Depre
eciation
Plant
and equipm
ent
Amor
rtisation
Other
r
Total
amortisation
n
Produ
uct and overs
seas develop
pment costs
Total
depreciation
n and amortis
sation
Royal
lties, commis
ssions and o
other direct ex
xpenses
Direct
t costs of stu
udent lessons
s
Direct
t costs of fra
nchise fees
Total
royalties, co
ommissions a
and other dire
ect expenses
s
Emplo
oyee benefits
ts
Emplo
oyee benefits
s expense ex
xcluding sup
perannuation
Define
ed contributi
on superann
nuation expe
nse
Share
e-based paym
ment expens
se
Total
employee be
enefits
Finan
nce costs
Intere
est and financ
ce charges p
paid/payable
e
Renta
al minimum le
ease payme
nts
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
9
9,206
2
2,382
1
,423
495
13
3,506
1
-
1
7,713
5,553
782
457
14,505
4
60
64
13
3,507
14,569
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
44
27
508
221
729
773
1
,932
3
3,098
5
5,030
2
2,640
234
32
2
2,906
68
217
269
147
416
443
4,496
2,539
7,035
2,457
240
22
2,719
69
274
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
ucation Cent
ncial statem
ments
d
tres Limited
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
Note 2
2. Critical ac
ccounting ju
udgements,
, estimates a
and assump
ptions (cont
tinued)
Note 4
4. Revenue
Sales
Franc
Stude
Sale o
Direct
s revenue
chise fees
ent lesson fee
of franchisee
t sales
es
e centres
Other
Intere
Other
r revenue
est
r revenue
Reve
nue
Note
s
5. Expenses
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Provis
sion for impa
airment of rec
ceivables
The p
provision for
impairment
of receivab
bles assessm
ment require
s a degree
of estimatio
on and judge
ement. The
level of
provis
sion is asses
ssed by takin
ng into acco
ount the rece
ent sales exp
perience, the
e ageing of
receivables,
historical co
ollection
rates
and specific
knowledge o
of the individ
ual debtor's
financial pos
sition.
Incom
me tax
The c
onsolidated
entity is subj
ject to incom
me taxes in th
he jurisdictio
ns in which i
t operates. S
Significant ju
dgement is r
required
in det
ermining the
e provision fo
or income ta
x. There are
e many trans
sactions and
calculations
s undertaken
n during the o
ordinary
course
e of busines
ss for which
the ultimate
tax determi
nation is un
certain. The
consolidate
ed entity reco
ognises liabi
lities for
anticip
pated tax au
udit issues b
ased on the
e consolidate
ed entity's cu
urrent unders
standing of t
the tax law.
Where the f
final tax
outcom
me of these
matters is d
different from
m the carrying
g amounts, s
such differen
nces will imp
act the curre
ent and defe
erred tax
provis
sions in the p
period in whic
ch such dete
ermination is
made.
Recov
very of defer
rred tax asse
ets
Deferr
red tax asse
ets are reco
ognised for d
deductible te
emporary dif
fferences on
nly if the con
nsolidated e
entity conside
ers it is
proba
ble that futu
re taxable a
mounts will
be available
e to utilise th
ose tempora
ary difference
es and losse
es. The defe
erred tax
assets
s are expecte
ed to be reco
overed throu
gh managem
ment’s foreca
ast taxable p
profits over th
he next three
e years.
Emplo
oyee benefits
s provision
As dis
scussed in n
note 1, the lia
ability for em
mployee bene
efits expecte
ed to be sett
led more tha
an 12 month
s from the re
eporting
date a
are recognis
sed and mea
asured at the
e present va
alue of the e
stimated fut
ure cash flow
ws to be ma
ade in respe
ect of all
emplo
oyees at the
e reporting d
date. In dete
ermining the
present va
lue of the li
ability, estim
mates of attr
rition rates a
and pay
increa
ases through
promotion a
and inflation
have been ta
aken into acc
count.
Note 3
3. Operating
g segments
Identif
fication of rep
portable ope
erating segm
ents
The c
consolidated
entity has o
nly one oper
rating segme
ent based on
n the interna
al reports tha
at are review
wed and used
d by the
Chief
Executive O
Officer and
the Board o
of Directors
(collectively
y referred to
o as the Ch
hief Operatin
ng Decision
Makers
('COD
DM')) in asse
essing perfor
mance and
in determinin
ng the alloca
ation of resou
urces. The o
operating seg
gment inform
mation is
disclo
sed througho
out these fin
ancial statem
ments.
The in
nformation re
eported to the
e CODM is o
on at least a
monthly bas
sis.
The g
geographical
information
of non-curre
ent assets b
elow is excl
usive of fina
ancial instrum
ments, deferr
red tax asse
ets, post
emplo
oyment bene
fits assets a
nd rights und
der insurance
e contracts.
Geogr
raphical infor
rmation
Geogr
raphical infor
rmation
Austra
alasia
United
d Kingdom a
and Europe
Overs
seas other
Geograp
phical non-c
current
Sa
les to extern
nal custome
ers
assets
2017
$'000
2016
$'000
2017
7
$'000
0
20
016
$'
000
7,351
5,190
965
8,79
92
5,11
1
60
02
9
9,723
711
-
9,383
711
-
13,506
14,50
05
10
0,434
10,094
rtisation
Amor
uct and overs
Produ
r
Other
Depre
Plant
eciation
and equipm
ent
lties, commis
t costs of stu
t costs of fra
Emplo
Emplo
Define
Share
Royal
Direct
Direct
Total
amortisation
n
before incom
employee be
depreciation
royalties, co
enefits
Profit
Total
Total
Total
me tax includ
des the follow
wing specific
c expenses:
seas develop
pment costs
n and amortis
sation
other direct ex
ssions and o
s
udent lessons
nchise fees
xpenses
ommissions a
and other dire
s
ect expenses
ts
oyee benefits
s expense ex
oyee benefits
on superann
ed contributi
ment expens
e-based paym
xcluding sup
nuation expe
se
perannuation
nse
Finan
Intere
nce costs
est and financ
ce charges p
e
paid/payable
Renta
al minimum le
ease payme
nts
37
38
38
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
9
9,206
2,382
2
1
,423
495
3,506
13
1
-
1
7,713
5,553
782
457
14,505
4
60
64
13
3,507
14,569
d
onsolidated
C
016
20
7
2017
$'
0
$'000
000
44
27
508
221
729
773
,932
1
3,098
3
5,030
5
2,640
2
234
32
2,906
2
68
217
269
147
416
443
4,496
2,539
7,035
2,457
240
22
2,719
69
274
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
6. Income ta
ax expense
Incom
Curre
Defer
me tax expen
ent tax
rred tax - orig
nse
gination and
reversal of te
emporary dif
fferences
Aggre
egate income
e tax expens
se
Defer
Decre
Increa
rred tax inclu
ease in defer
ase in deferr
uded in incom
rred tax asse
red tax liabilit
me tax expen
ets (note 11)
)
ties (note 16
nse comprise
es:
Defer
rred tax - orig
gination and
reversal of te
emporary dif
fferences
Nume
Profit
erical reconc
before incom
ciliation of inc
me tax expen
come tax exp
nse
pense and ta
ax at the statu
utory rate
Tax a
at the statuto
ry tax rate of
f 30%
effect amount
Tax e
rior year fore
Pr
undry items
Su
ts which are
eign exchang
ge items
not deductib
ble/(taxable)
in calculating
g taxable inc
come:
Incom
me tax expen
nse
C
d
onsolidated
016
20
2017
7
000
$'
0
$'000
(9)
368
359
185
183
368
(45)
441
396
388
53
441
1
,795
1,599
539
480
(169)
(11)
359
-
(84)
396
d
onsolidated
C
016
20
2017
7
$'
0
$'000
000
Tax lo
Unuse
osses not rec
ed tax losses
cognised
s for which n
no deferred ta
ax asset has
s been recog
nised
1
,269
1,269
Poten
ntial tax bene
efit @ 30%
The a
losses
passe
above potent
s are capital
ed, or failing t
tial tax bene
in nature an
that, the sam
efit for tax los
nd can only b
me business
sses has no
be utilised in
test is passe
ed.
ot been reco
the future to
gnised in th
o offset capit
e statement
tal gains if th
of financial
he continuity
381
381
position. Th
of ownershi
hese tax
p test is
Note
7. Current a
assets - cash
h and cash
s
equivalents
Cash
Restr
at bank
ricted cash
onsolidated
C
d
016
20
2017
7
000
$'
0
$'000
,697
1
3,235
3
4,932
4
1,209
2,321
3,530
Restri
The c
icted cash re
orresponding
epresents am
g liability is re
mounts held
ecognised in
on behalf of
n other payab
f franchisees
bles and acc
s and is not
cruals at note
available for
e 12.
r use by the
consolidated
d entity.
31-60
0 days overd
ue
61-90
0 days overd
ue
91-12
20 days overd
due
39
39
40
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
8. Current a
assets - trad
de and other
r receivables
s
Trade
e receivables
s
Less:
Provision fo
or impairmen
t of receivab
bles
The c
consolidated
entity has r
recognised a
a loss of $10
07,000 (2016
6: $94,000)
in profit or l
oss in respe
ect of impair
rment of
Impair
rment of rece
eivables
receiv
vables for the
e year ended
d 30 June 20
17.
The a
geing of the
impaired rec
ceivables pro
ovided for ab
bove are as f
follows:
31-60
0 days overd
ue
61-90
0 days overd
ue
91-12
20 days overd
due
Movem
ments in the
provision fo
r impairment
t of receivab
les are as fo
ollows:
Open
ing balance
Additi
ional provisio
ons recognis
sed
Rece
ivables writte
en off during
the year as
uncollectabl
e
Closin
ng balance
Past d
due but not im
mpaired
2017
($82,000 as
at 30 June 2
2016).
Custo
omers with b
alances pas
st due but wi
ithout provis
ion for impa
irment of rec
ceivables am
mount to $74
4,000 as at 3
30 June
The c
consolidated
entity did n
not consider
r a credit ris
sk on the a
aggregate ba
alances afte
r reviewing
the credit t
erms of
custom
mers based
on recent co
ollection prac
ctices.
The a
geing of the
past due bu
t not impaire
ed receivable
es are as follo
ows:
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
949
(84)
865
860
(224)
636
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
2
1
81
84
224
107
(247)
84
18
28
178
224
217
94
(87)
224
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
8
7
59
74
4
3
75
82
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
6. Income ta
ax expense
Defer
rred tax - orig
gination and
reversal of te
emporary dif
fferences
Incom
me tax expen
nse
Curre
ent tax
Aggre
egate income
e tax expens
se
Defer
rred tax inclu
uded in incom
me tax expen
nse comprise
es:
Decre
ease in defer
rred tax asse
ets (note 11)
Increa
ase in deferr
red tax liabilit
ties (note 16
)
Defer
rred tax - orig
gination and
reversal of te
emporary dif
fferences
Nume
erical reconc
ciliation of inc
come tax exp
pense and ta
ax at the statu
utory rate
Tax e
effect amount
ts which are
not deductib
ble/(taxable)
in calculating
g taxable inc
come:
Profit
before incom
me tax expen
nse
Tax a
at the statuto
ry tax rate of
f 30%
Pr
rior year fore
eign exchang
ge items
Su
undry items
Incom
me tax expen
nse
Tax lo
osses not rec
cognised
Poten
ntial tax bene
efit @ 30%
Cash
at bank
Restr
ricted cash
Unuse
ed tax losses
s for which n
no deferred ta
ax asset has
s been recog
nised
1
,269
1,269
The a
above potent
tial tax bene
efit for tax los
sses has no
ot been reco
gnised in th
e statement
of financial
position. Th
hese tax
losses
s are capital
in nature an
nd can only b
be utilised in
the future to
o offset capit
tal gains if th
he continuity
of ownershi
p test is
passe
ed, or failing t
that, the sam
me business
test is passe
ed.
Note
7. Current a
assets - cash
h and cash
equivalents
s
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
(9)
368
359
185
183
368
(45)
441
396
388
53
441
1
,795
1,599
539
480
(169)
(11)
359
-
(84)
396
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
1
,697
3
3,235
4
4,932
1,209
2,321
3,530
Restri
icted cash re
epresents am
mounts held
on behalf of
f franchisees
s and is not
available for
r use by the
consolidated
d entity.
The c
orresponding
g liability is re
ecognised in
n other payab
bles and acc
cruals at note
e 12.
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
8. Current a
assets - trad
de and other
s
r receivables
Trade
Less:
s
e receivables
or impairmen
Provision fo
t of receivab
bles
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
949
(84)
865
860
(224)
636
Impair
The c
receiv
rment of rece
consolidated
vables for the
eivables
entity has r
e year ended
recognised a
d 30 June 20
a loss of $10
17.
07,000 (2016
6: $94,000)
The a
geing of the
impaired rec
ceivables pro
ovided for ab
bove are as f
follows:
31-60
61-90
91-12
0 days overd
0 days overd
20 days overd
ue
ue
due
Movem
ments in the
provision fo
r impairment
t of receivab
les are as fo
ollows:
Open
Additi
Rece
ing balance
ional provisio
ivables writte
ons recognis
en off during
sed
the year as
uncollectabl
e
381
381
Closin
ng balance
in profit or l
oss in respe
ect of impair
rment of
d
onsolidated
C
016
20
2017
7
$'
0
$'000
000
2
1
81
84
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
224
107
(247)
84
18
28
178
224
217
94
(87)
224
Past d
Custo
2017
due but not im
omers with b
($82,000 as
mpaired
alances pas
at 30 June 2
st due but wi
2016).
ithout provis
ion for impa
irment of rec
ceivables am
mount to $74
4,000 as at 3
30 June
The c
custom
consolidated
mers based
entity did n
on recent co
not consider
ollection prac
r a credit ris
ctices.
sk on the a
aggregate ba
alances afte
r reviewing
the credit t
erms of
The a
geing of the
past due bu
t not impaire
ed receivable
es are as follo
ows:
31-60
61-90
91-12
0 days overd
0 days overd
20 days overd
ue
ue
due
d
onsolidated
C
016
20
2017
7
$'
0
$'000
000
8
7
59
74
4
3
75
82
39
40
40
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note 9
9. Current a
er
assets - othe
Prepa
Other
ayments
r deposits
Note
10. Non-cur
rrent assets
- intangible
es
Intelle
ectual proper
rty - at cost
Produ
Less:
uct and overs
Accumulate
seas develop
ed amortisatio
pment costs
on
Franc
chise territori
es
Other
Less:
r intangible a
Accumulate
assets - at co
ed amortisatio
ost
on
Recon
nciliations
nciliations of
Recon
w:
below
f the written
Cons
solidated
2015
Balan
Additi
Excha
Amor
nce at 1 July
ions
ange differen
rtisation expe
nces
ense
Balan
Additi
Amor
nce at 30 Jun
ions
rtisation expe
ense
ne 2016
Balan
nce at 30 Jun
ne 2017
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
141
-
141
147
6
153
d
onsolidated
C
016
20
7
2017
000
$'
0
$'000
4,012
4
4,012
7,130
7
(2
,034)
5,096
5
711
1
,154
(669)
485
6,369
(1,304)
5,065
711
657
(476)
181
10
0,304
9,969
c. For
reign exchan
ge rates con
nsistent with
current mark
ket condition
s.
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
10. Non-cur
rrent assets
- intangible
es (continue
ed)
The in
ntellectual p
property and
product an
d overseas
developmen
nt costs are
the primary
y elements
of the cons
olidated
entity’
’s system of
tutoring whic
ch has been
n developed
and acquired
d over a per
iod exceedin
ng 30 years
by the found
ders and
the co
onsolidated e
entity. The fr
ranchise terr
ritories asset
t consists of
the buy-bac
ck of the righ
ht to operate
the busines
ss in the
United
d Kingdom.
As there is
no foreseea
ble limit to t
the cash flow
ws these ass
sets are gen
nerating, the
y are consid
dered to
have
an indefinite
e useful life a
and not amo
rtised. Instea
ad they are
subject to an
nnual impair
rment review
ws. Other inta
angibles
includ
e the contra
actual rights
s for certain
territories w
where KMEC
C has termin
nated an are
ea develope
rs contract
and the
liability
y for these it
tems are incl
uded in paya
ables.
Impair
rment tests f
for indefinite
life intangibl
les
Indefin
nite life intan
ngibles are a
llocated to a
single cash
generating u
unit ('CGU').
The re
ecoverable a
amount has b
been determ
ined by a va
alue-in-use ca
alculation us
sing a discou
unted cash flo
ow model, b
ased on
a thre
ee-year proje
ection period
d approved b
by managem
ment and extr
rapolated fo
r a further tw
wo years us
ing a growth
h rate of
2.4%
(2016: 2.4%
). There are
no terminal
values in the
e calculation.
.
Key a
ssumptions
are those to
which the re
ecoverable a
mount of an
asset or cas
sh-generating
g units is mo
ost sensitive.
The fo
ollowing key
assumptions
s were used
in the discou
unted cash fl
low model:
a. Pre
e-tax discou
nt rate 16.5
% (2016: 16
6.8%). The d
discount rate
e reflects m
management’s
s estimate o
of the time v
value of
money
y and the co
onsolidated e
entity’s weigh
hted average
e cost of cap
pital, the risk
free rate an
d the volatilit
ty of the sha
are price
relativ
ve to market
movements.
.
b. New
w centre gro
owth rate of 4
4% (2016: 6.
.0%) over the
e three-year
projection p
period, which
reflects, a r
renewed sale
es push,
an ex
xpected mov
ve towards l
arger on-lin
e based ce
ntres and a
a continued
movement t
towards perc
centage of r
revenue
contra
acts, which m
management
believe is re
easonable giv
ven the curre
ent trading p
performance
of the conso
olidated entity
y.
d. On-
-line tutoring
g services to
be 4% (2016
6: 4%) of tot
tal lessons o
over the three
e-year projec
ction period,
which mana
agement
believ
ve is reasona
able given cu
urrent growth
in the marke
et segment.
Based
d on the abov
ve, there wa
s no impairm
ment required
d for the year
r ended 30 J
June 2017 (2
2016: $nil).
As dis
sclosed in no
ote 2, the dire
ectors have
made judgem
ments and es
stimates in r
respect of the
e impairment
t testing of in
ndefinite
life in
tangibles. S
hould these
judgements
s and estima
ates not occ
cur, the resu
ulting indefin
nite life intan
ngibles may
vary in
The k
key sensitivit
ty is that cen
ntre number
s would nee
ed to fall by
5% (2016:
increase by
3%) before
the CGU w
would be
impair
red, with all o
other assum
ptions remai
ning constan
nt.
Mana
gement belie
eves that oth
her reasonab
ble changes
in the key a
assumptions
on which th
he recoverab
ble amount is
s based
would
not cause th
he cash gene
erating unit’s
s carrying am
mount to exce
eed its recov
verable amou
unt.
cial year are
e set out
down values
s at the begi
nning and e
nd of the cu
rrent and pre
evious financ
roduct and
Pr
o
overseas
evelopment
de
costs
$'000
llectual
Intel
operty
pro
'000
$
Franchise
territories
$'000
er
Othe
intangib
bles
0
$'000
To
$'
otal
000
Sensi
itivity
carryin
ng amount.
4,012
-
-
-
4,012
-
-
4,012
4,358
976
-
(269)
5,065
539
(508)
5,096
80
08
-
97)
(9
-
71
1
-
-
71
1
328
-
-
(147)
181
525
(221)
9,506
976
(97)
(416)
9,969
1,064
(729)
485
10,304
41
41
42
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
ments
d
tres Limited
ucation Cent
ncial statem
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
141
-
141
147
6
153
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
7
7,130
(2
,034)
5
5,096
711
1
,154
(669)
485
6,369
(1,304)
5,065
711
657
(476)
181
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 9
9. Current a
assets - othe
er
Prepa
ayments
Other
r deposits
Note
10. Non-cur
rrent assets
- intangible
es
Intelle
ectual proper
rty - at cost
Produ
uct and overs
seas develop
pment costs
Less:
Accumulate
ed amortisatio
on
Franc
chise territori
es
Other
r intangible a
assets - at co
ost
Less:
Accumulate
ed amortisatio
on
Recon
nciliations
below
w:
Cons
solidated
Balan
nce at 1 July
2015
Additi
ions
Excha
ange differen
nces
Amor
rtisation expe
ense
Balan
nce at 30 Jun
ne 2016
Additi
ions
Amor
rtisation expe
ense
Balan
nce at 30 Jun
ne 2017
Recon
nciliations of
f the written
down values
s at the begi
nning and e
nd of the cu
rrent and pre
evious financ
cial year are
e set out
Pr
roduct and
o
overseas
Intel
llectual
de
evelopment
pro
operty
$
'000
costs
$'000
Franchise
territories
$'000
Othe
er
intangib
bles
$'000
0
To
otal
$'
000
4,358
976
-
(269)
5,065
539
(508)
5,096
80
08
(9
97)
-
-
71
1
-
-
71
1
328
-
-
(147)
181
525
(221)
9,506
976
(97)
(416)
9,969
1,064
(729)
485
10,304
4,012
-
-
-
-
-
4,012
4,012
41
Note
10. Non-cur
rrent assets
- intangible
es (continue
ed)
The in
entity’
the co
United
have
includ
liability
ntellectual p
’s system of
onsolidated e
d Kingdom.
an indefinite
e the contra
y for these it
property and
tutoring whic
entity. The fr
As there is
e useful life a
actual rights
tems are incl
product an
ch has been
ranchise terr
no foreseea
and not amo
s for certain
uded in paya
d overseas
n developed
ritories asset
ble limit to t
rtised. Instea
territories w
ables.
developmen
and acquired
t consists of
the cash flow
ad they are
where KMEC
nt costs are
d over a per
the buy-bac
ws these ass
subject to an
C has termin
the primary
iod exceedin
ck of the righ
sets are gen
nnual impair
nated an are
y elements
ng 30 years
ht to operate
nerating, the
rment review
ea develope
of the cons
by the found
the busines
y are consid
ws. Other inta
rs contract
olidated
ders and
ss in the
dered to
angibles
and the
Impair
Indefin
rment tests f
nite life intan
for indefinite
ngibles are a
life intangibl
llocated to a
les
single cash
generating u
unit ('CGU').
The re
a thre
2.4%
ecoverable a
ee-year proje
(2016: 2.4%
amount has b
ection period
). There are
been determ
d approved b
no terminal
ined by a va
by managem
values in the
alculation us
alue-in-use ca
rapolated fo
ment and extr
.
e calculation.
sing a discou
r a further tw
unted cash flo
wo years us
ow model, b
ing a growth
ased on
h rate of
4
4,012
4,012
Key a
ssumptions
are those to
which the re
ecoverable a
mount of an
asset or cas
sh-generating
g units is mo
ost sensitive.
The fo
ollowing key
assumptions
s were used
in the discou
unted cash fl
low model:
a. Pre
money
relativ
e-tax discou
y and the co
ve to market
% (2016: 16
nt rate 16.5
onsolidated e
entity’s weigh
.
movements.
6.8%). The d
hted average
discount rate
e cost of cap
e reflects m
pital, the risk
management’s
free rate an
s estimate o
d the volatilit
of the time v
ty of the sha
value of
are price
b. New
an ex
contra
w centre gro
xpected mov
acts, which m
owth rate of 4
ve towards l
management
4% (2016: 6.
arger on-lin
believe is re
.0%) over the
e based ce
easonable giv
e three-year
ntres and a
ven the curre
projection p
a continued
ent trading p
period, which
movement t
performance
reflects, a r
towards perc
of the conso
renewed sale
centage of r
olidated entity
es push,
revenue
y.
10
0,304
9,969
c. For
reign exchan
ge rates con
nsistent with
current mark
ket condition
s.
d. On-
believ
-line tutoring
ve is reasona
g services to
able given cu
be 4% (2016
urrent growth
6: 4%) of tot
in the marke
tal lessons o
et segment.
over the three
e-year projec
ction period,
which mana
agement
Based
d on the abov
ve, there wa
s no impairm
ment required
d for the year
r ended 30 J
June 2017 (2
2016: $nil).
Sensi
As dis
life in
carryin
itivity
sclosed in no
tangibles. S
ng amount.
ote 2, the dire
hould these
ectors have
judgements
made judgem
s and estima
ments and es
ates not occ
stimates in r
cur, the resu
respect of the
ulting indefin
e impairment
nite life intan
t testing of in
ngibles may
ndefinite
vary in
The k
impair
key sensitivit
red, with all o
ty is that cen
other assum
ntre number
ptions remai
s would nee
ning constan
ed to fall by
nt.
5% (2016:
increase by
3%) before
the CGU w
would be
Mana
would
gement belie
not cause th
eves that oth
he cash gene
her reasonab
erating unit’s
ble changes
s carrying am
in the key a
mount to exce
assumptions
eed its recov
on which th
verable amou
he recoverab
unt.
ble amount is
s based
42
42
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
11. Non-cur
rrent assets
- deferred t
tax
Defer
rred tax asse
et comprises
temporary d
differences at
o:
ttributable to
sed in profit o
or loss:
unts recognis
Amou
ax losses
Ta
mpairment of
Im
nrealised fore
Un
mployee ben
Em
ccrued expen
Ac
AX licence
QA
receivables
eign exchan
nefits
nses
ge movemen
nts
Amou
Tr
unts recognis
ransaction co
:
sed in equity
e issue
osts on share
Defer
rred tax asse
et
Move
Open
Charg
ements:
ing balance
ged to profit o
or loss (note
e 6)
Closin
ng balance
Note
12. Current
liabilities - t
trade and ot
ther payable
es
Trade
Amou
GST a
Other
e payables
unts held on
and other sim
r payables an
behalf of fran
milar payable
nd accruals
nchisees
es
Refer
to note 20 fo
or further info
ormation on
financial inst
truments.
Note
13. Current
liabilities -
borrowings
Bank
loans
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
56
25
71
112
68
194
526
-
526
711
(185)
526
266
69
-
91
63
215
704
7
711
1,099
(388)
711
d
onsolidated
C
016
20
7
2017
000
$'
0
$'000
444
3,235
3
9
288
3,976
3
435
2,321
35
468
3,259
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
750
350
Refer
to note 15 fo
or further info
ormation on
Refer
to note 20 fo
or further info
ormation on
assets pledg
ged as secur
rity and financing arrange
ements.
financial inst
truments.
43
43
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
14. Current
liabilities - e
employee b
benefits
Annua
al leave
Long
service leav
e
Amou
unts not expe
ected to be s
ettled within
the next 12
months
The c
current provis
sion for emp
ployee benef
its includes a
all unconditio
onal entitlem
ments where
employees
have comple
eted the
requir
red period of
service and
also those w
where emplo
oyees are en
titled to pro-
rata paymen
nts in certain
circumstanc
ces. The
entire
amount is
presented a
as current,
since the c
consolidated
entity does
s not have
an uncondit
tional right t
to defer
settlem
ment. Howev
ver, based o
on past expe
erience, the
consolidate
ed entity doe
es not expec
ct all employ
yees to take
the full
amou
nt of accrued
d leave or re
quire payme
ent within the
e next 12 mo
nths.
The fo
ollowing amo
ounts reflect
leave that is
not expecte
d to be taken
n within the n
next 12 mont
ths:
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
173
191
364
146
151
297
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
215
172
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
-
300
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
750
650
Emplo
oyee benefits
s
Note
15. Non-cur
rrent liabiliti
es - borrow
wings
Refer
to note 20 fo
or further info
ormation on
financial inst
truments.
Total
secured liab
ilities
The to
otal secured
liabilities (cu
urrent and no
on-current) a
re as follows
s:
Bank
loans
Bank
loans
44
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
ments
d
tres Limited
ettled within
ployee benef
ucation Cent
ncial statem
also those w
as current,
on past expe
quire payme
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
onal entitlem
titled to pro-
entity does
ed entity doe
nths.
ments where
rata paymen
s not have
es not expec
employees
nts in certain
an uncondit
ct all employ
have comple
circumstanc
tional right t
yees to take
eted the
ces. The
to defer
the full
the next 12
its includes a
where emplo
since the c
erience, the
ent within the
months
all unconditio
oyees are en
consolidated
consolidate
e next 12 mo
Amou
The c
requir
entire
settlem
amou
unts not expe
current provis
red period of
amount is
ment. Howev
nt of accrued
ected to be s
sion for emp
service and
presented a
ver, based o
d leave or re
Defer
rred tax asse
et comprises
temporary d
differences at
ttributable to
o:
Annua
Long
al leave
service leav
e
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
173
191
364
146
151
297
Note
14. Current
liabilities - e
employee b
benefits
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
11. Non-cur
rrent assets
- deferred t
tax
Amou
unts recognis
sed in profit o
or loss:
Ta
ax losses
Im
mpairment of
receivables
Un
nrealised fore
eign exchan
ge movemen
nts
Em
mployee ben
nefits
Ac
ccrued expen
nses
QA
AX licence
Amou
unts recognis
sed in equity
:
Tr
ransaction co
osts on share
e issue
Defer
rred tax asse
et
Move
ements:
Open
ing balance
Closin
ng balance
Charg
ged to profit o
or loss (note
e 6)
Note
12. Current
liabilities - t
trade and ot
ther payable
es
Trade
e payables
Amou
unts held on
behalf of fran
nchisees
GST a
and other sim
milar payable
es
Other
r payables an
nd accruals
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
56
25
71
112
68
194
526
-
526
711
(185)
526
266
69
-
91
63
215
704
7
711
1,099
(388)
711
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
444
3
3,235
9
288
3
3,976
435
2,321
35
468
3,259
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
750
350
not expecte
d to be taken
n within the n
next 12 mont
ths:
The fo
ollowing amo
ounts reflect
leave that is
Emplo
s
oyee benefits
Note
15. Non-cur
rrent liabiliti
es - borrow
wings
Bank
loans
Refer
to note 20 fo
or further info
ormation on
financial inst
truments.
Total
The to
secured liab
otal secured
ilities
liabilities (cu
urrent and no
on-current) a
re as follows
s:
Refer
to note 20 fo
or further info
ormation on
financial inst
truments.
Note
13. Current
liabilities -
borrowings
Bank
loans
Bank
loans
Refer
to note 15 fo
or further info
ormation on
assets pledg
ged as secur
rity and financing arrange
ements.
Refer
to note 20 fo
or further info
ormation on
financial inst
truments.
43
44
44
onsolidated
d
C
2017
016
20
7
$'
0
$'000
000
215
172
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
-
300
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
750
650
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
15. Non-cur
rrent liabiliti
es - borrow
wings (contin
nued)
Asset
The b
ts pledged as
ank loans ar
s security
re secured by
y fixed and f
loating charg
ges over the
assets of the
e consolidate
ed entity.
Finan
Unres
cing arrange
stricted acces
ements
ss was availa
able at the re
eporting date
e to the follow
wing lines of
credit:
d
onsolidated
C
016
20
2017
7
$'
0
$'000
000
Total
Ba
Ba
facilities
t
ank overdraft
ank loans
Used
Ba
Ba
at the report
ting date
t
ank overdraft
ank loans
Unuse
Ba
Ba
ed at the rep
porting date
t
ank overdraft
ank loans
Note
16. Non-cur
rrent liabiliti
es - deferre
ed tax
1
,750
750
2,500
2
-
750
750
1
1
,750
-
,750
500
650
1,150
-
650
650
500
-
500
differences a
attributable t
to:
d
onsolidated
C
016
20
2017
7
$'
0
$'000
000
1
,239
283
1
,522
1
,339
183
1
,522
1,235
104
1,339
1,286
53
1,339
Defer
rred tax liabil
lity comprise
s temporary
Amou
Re
Ov
unts recognis
esearch and
verseas deve
sed in profit o
developmen
elopment
or loss:
nt costs
Defer
rred tax liabil
ity
Move
Open
Charg
ements:
ing balance
ged to profit o
or loss (note
e 6)
Closin
ng balance
Note
17. Equity -
issued cap
ital
Ordin
ary shares -
fully paid
45,034,331
4
44,184,33
31
8,838
8
8,774
The re
eserve is us
sed to recogn
nise exchang
ge difference
es arising fro
om the trans
slation of the
e financial st
tatements of
f foreign
opera
tions to Aust
tralian dollar
rs. It is also u
used to reco
ognise profits
s and losses
on hedges o
of the net inv
vestments in
n foreign
Cons
solidated
2017
Shares
2016
Shares
2017
7
0
$'000
20
$'
016
000
45
45
46
Date
Shares
Issue p
price
$'
'000
1 July 2015
44,184,33
31
30 June 201
16
31 August 2
2016
44,184,33
31
850,00
00
$0
0.075
30 June 201
17
45,034,33
31
8,774
8,774
64
8,838
Ordina
ary shares e
entitle the h
holder to par
rticipate in d
dividends an
nd the proce
eeds on the
winding up
of the com
mpany in
propo
rtion to the n
number of an
nd amounts p
paid on the s
shares held.
The fully pai
d ordinary sh
hares have n
no par value
and the
compa
any does not
t have a limit
ted amount o
of authorised
d capital.
On a
show of han
nds every me
ember prese
ent at a meet
ting in perso
on or by prox
xy shall have
e one vote a
nd upon a p
oll each
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
17. Equity -
issued cap
ital (continu
ued)
Movem
ments in ord
dinary share c
capital
Detai
ls
Balan
nce
Balan
nce
Balan
nce
Conve
ersion of opt
tions
Ordina
ary shares
share
shall have o
one vote.
Share
e buy-back
There
e is no curren
nt on-market
share buy-b
back.
Capita
al risk manag
gement
to red
uce the cost
t of capital.
The c
consolidated
entity's obje
ctives when
managing c
capital are to
o safeguard i
ts ability to c
continue as
a going conc
cern, so
that it
can provide
returns for s
shareholders
s and benefit
s for other st
takeholders
and to maint
tain an optim
mum capital s
structure
Capita
al is regarded
d as total eq
uity, as reco
ognised in the
e statement
of financial p
position, plus
s net debt. N
et debt is ca
alculated
as tota
al borrowing
s less cash a
and cash equ
uivalents.
In ord
der to mainta
ain or adjust
t the capital
structure, th
he consolida
ated entity m
may adjust th
he amount o
of dividends
paid to
share
holders, retu
urn capital to
shareholder
rs, issue new
w shares or s
sell assets to
reduce debt
t.
The c
apital risk ma
anagement p
policy remain
ns unchange
ed from the 3
30 June 2016
6 Annual Rep
port.
The c
capital struct
ure of the co
onsolidated
entity consis
sts of net de
ebt (borrowin
ngs offset by
y cash and
bank balanc
ces) and
equity
y of the conso
olidated entit
ty (comprisin
ng issued cap
pital, reserve
es and accum
mulated profi
its).
Note
18. Equity -
reserves
Foreig
gn currency
reserve
Share
e-based paym
ments reserv
ve
Other
r reserves
Foreig
gn currency r
reserve
opera
tions.
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
(233)
77
754
598
(132)
45
754
667
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Asset
ts pledged as
s security
Finan
cing arrange
ements
Total
facilities
Ba
ank overdraft
t
Ba
ank loans
Used
at the report
ting date
Ba
ank overdraft
t
Ba
ank loans
Unuse
ed at the rep
porting date
Ba
ank overdraft
t
Ba
ank loans
Note
16. Non-cur
rrent liabiliti
es - deferre
ed tax
Amou
unts recognis
sed in profit o
or loss:
Re
esearch and
developmen
nt costs
Ov
verseas deve
elopment
Defer
rred tax liabil
ity
Move
ements:
Open
ing balance
Charg
ged to profit o
or loss (note
e 6)
Closin
ng balance
Note
17. Equity -
issued cap
ital
Defer
rred tax liabil
lity comprise
s temporary
differences a
attributable t
to:
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
1
,750
750
2
2,500
-
750
750
1
,750
-
1
,750
1
,239
283
1
,522
1
,339
183
1
,522
500
650
1,150
-
650
650
500
-
500
1,235
104
1,339
1,286
53
1,339
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
Ordin
ary shares -
fully paid
4
45,034,331
44,184,33
31
8
8,838
8,774
Cons
solidated
2017
Shares
2016
Shares
2017
7
$'000
0
20
016
$'
000
Note
15. Non-cur
rrent liabiliti
es - borrow
wings (contin
nued)
Note
17. Equity -
issued cap
ital (continu
ued)
The b
ank loans ar
re secured by
y fixed and f
loating charg
ges over the
assets of the
e consolidate
ed entity.
Unres
stricted acces
ss was availa
able at the re
eporting date
e to the follow
wing lines of
credit:
Detai
ls
Balan
nce
Balan
Conve
nce
ersion of opt
tions
Movem
ments in ord
dinary share c
capital
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Date
Shares
Issue p
price
$'
'000
1 July 2015
44,184,33
31
30 June 201
31 August 2
16
2016
44,184,33
850,00
31
00
$0
0.075
8,774
8,774
64
8,838
Balan
nce
30 June 201
17
45,034,33
31
Ordina
Ordina
propo
compa
ary shares
ary shares e
rtion to the n
any does not
entitle the h
number of an
t have a limit
holder to par
nd amounts p
ted amount o
rticipate in d
paid on the s
of authorised
dividends an
shares held.
d capital.
nd the proce
The fully pai
eeds on the
d ordinary sh
winding up
hares have n
of the com
no par value
mpany in
and the
On a
share
show of han
shall have o
nds every me
one vote.
ember prese
ent at a meet
ting in perso
on or by prox
xy shall have
e one vote a
nd upon a p
oll each
Share
There
e buy-back
e is no curren
nt on-market
share buy-b
back.
Capita
The c
that it
to red
al risk manag
consolidated
can provide
uce the cost
gement
entity's obje
returns for s
t of capital.
ctives when
shareholders
managing c
s and benefit
capital are to
s for other st
o safeguard i
takeholders
ts ability to c
and to maint
continue as
tain an optim
a going conc
mum capital s
cern, so
structure
Capita
as tota
al is regarded
al borrowing
d as total eq
s less cash a
uity, as reco
and cash equ
ognised in the
uivalents.
e statement
of financial p
position, plus
s net debt. N
et debt is ca
alculated
In ord
share
der to mainta
holders, retu
ain or adjust
urn capital to
t the capital
shareholder
structure, th
rs, issue new
he consolida
w shares or s
ated entity m
sell assets to
may adjust th
he amount o
t.
reduce debt
of dividends
paid to
The c
apital risk ma
anagement p
policy remain
ns unchange
ed from the 3
30 June 2016
6 Annual Rep
port.
The c
equity
capital struct
y of the conso
ure of the co
olidated entit
onsolidated
ty (comprisin
entity consis
ng issued cap
sts of net de
pital, reserve
ebt (borrowin
es and accum
ngs offset by
mulated profi
y cash and
its).
bank balanc
ces) and
Note
18. Equity -
reserves
Foreig
Share
Other
gn currency
e-based paym
r reserves
reserve
ments reserv
ve
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
(233)
77
754
598
(132)
45
754
667
Foreig
The re
opera
opera
gn currency r
eserve is us
tions to Aust
tions.
reserve
sed to recogn
tralian dollar
nise exchang
rs. It is also u
ge difference
used to reco
es arising fro
ognise profits
om the trans
s and losses
slation of the
on hedges o
e financial st
of the net inv
tatements of
vestments in
f foreign
n foreign
45
46
46
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note
18. Equity -
reserves (c
continued)
Share
The r
remun
e-based paym
reserve is u
neration, and
ments reserv
sed to reco
d other partie
ve
ognise the v
es as part of
value of equ
their compen
uity benefits
nsation for se
provided to
ervices.
o employees
s and directo
ors as part
of their
Risk
managemen
nt is carried
out by sen
nior executiv
ves ('finance
e') under po
olicies approv
ved by the
Board of D
Directors
('Boar
rd'). These p
policies includ
de identificat
tion and ana
alysis of the
risk exposur
re of the con
nsolidated en
ntity and app
propriate
proce
dures, contro
ols and risk
limits. The c
consolidated
entity does
not enter int
to or trade in
n financial ins
struments, in
ncluding
deriva
ative financia
al instruments
s, for specula
ative purpos
es. Finance
reports to th
e Board are
on a monthly
y basis.
Other
This r
contro
r reserves
eserve is us
olling interest
ed to recogn
ts.
nise the incre
ements and d
decrements
on changes
in equity of t
the parent on
n acquisition
n of non-
Movem
Movem
ments in res
ments in eac
erves
ch class of re
eserve during
g the current
t and previou
us financial y
year are set o
out below:
Cons
solidated
Balan
Foreig
Share
nce at 1 July
gn currency
e-based paym
2015
translation
ments
Balan
Foreig
Share
nce at 30 Jun
gn currency
e-based paym
ne 2016
translation
ments
Balan
nce at 30 Jun
ne 2017
Note
19. Equity -
dividends
Foreign
currency
c
$'000
Share-base
ed
s
payments
$'000
er
Othe
0
$'000
To
$'
otal
000
(39)
(93)
-
(132)
(101)
-
(233)
23
2
-
22
2
45
4
-
32
3
77
7
754
-
-
754
-
-
754
738
(93)
22
667
(101)
32
598
Divide
ends paid du
ring the finan
ncial year we
ere as follow
ws:
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 2
20. Financia
al instrumen
nts (continu
ed)
Marke
et risk
Foreig
gn currency r
risk
dollar
.
foreig
n exchange
risks.
the re
porting date
were as follo
ows:
Cons
solidated
US do
ollars
Euros
s
Pound
d Sterling
New Z
Zealand dolla
ars
Singa
apore dollars
South
h African Ran
nd
Kenya
an Shilling
Hong
Kong Dollar
rs
The c
consolidated
entity unde
ertakes certa
ain transact
ions denom
minated in fo
oreign curren
ncy and is
exposed to
foreign
curren
ncy risk throu
ugh foreign e
exchange rat
te fluctuation
ns. The cons
olidated enti
ty operates i
international
ly and is exp
posed to
foreig
n exchange
risk arising
primarily fro
om the Poun
d Sterling, S
Singapore do
ollar, South A
African Rand
d and New Z
Zealand
Foreig
gn exchange
e risk arises
from future
commercial
transactions
s and recogn
nised financi
al assets an
nd financial l
iabilities
denom
minated in a
currency th
hat is not the
e entity's fun
nctional curre
ency. The co
onsolidated e
entity presen
ntly does no
ot hedge
The c
carrying amo
ount of the co
onsolidated
entity's forei
ign currency
y denominate
ed financial a
assets and f
financial liab
bilities at
Ass
sets
2017
$'000
2016
$'000
Liabilities
2017
7
$'000
0
20
016
$'
000
3,161
470
46
7
86
44
4
19
7
73
6
2,56
66
8
89
21
9
4
42
4
-
3
-
1
,696
306
28
-
-
-
1,331
23
42
88
-
-
-
-
3,837
2,99
99
2
2,033
1,484
The c
consolidated
entity had
net assets d
denominated
d in foreign
currencies o
of $1,804,00
00 as at 30
June 2017
(assets
$3,83
7,000 less lia
abilities $2,0
033,000) (201
16: $1,515,0
00 (assets $
$2,999,000 le
ess liabilities
$1,484,000)
)). Based on
this net
positio
on, a 10% s
trengthening
g in the Aust
tralian dollar
from 30 Jun
ne 2017 leve
els may exp
ose the con
solidated en
ntity to a
$180,
000 foreign c
currency loss
s.
The c
onsolidated
entity is not e
exposed to a
any significan
nt price risk.
Price
risk
Intere
st rate risk
The c
consolidated
entity's mai
n interest ra
ate risk arise
es from shor
rt-term and l
long-term bo
orrowings. B
orrowings is
ssued at
variab
ble rates exp
ose the cons
solidated ent
tity to interes
st rate risk. B
Borrowings is
ssued at fixe
ed rates expo
ose the cons
olidated
entity
to fair value
interest rate
e risk.
The c
consolidated
entity's obje
ctive is to m
aintain a ba
lance betwee
en continuity
y of funding
and flexibility
y through the
e use of
bank l
loans, relate
d party loans
s and financi
ial leases.
On 9
declar
total d
August 201
red and will b
distribution w
7, a final div
be paid on 2
will be $630,4
vidend for th
9 Septembe
480.
he year end
er 2017 to tho
ded 30 June
ose shareho
2017 of 1.4
lders on the
4 cents per
register at 7
ordinary sha
7pm on 15 Se
are, unfranke
eptember 20
ed, was
017. The
Note 2
20. Financia
al instrumen
nts
Finan
The c
interes
unpre
conso
uses d
in the
ncial risk ma
consolidated
st rate risk),
dictability of
olidated entity
different met
case of inter
anagement o
entity's activ
credit risk a
f financial ma
y and to ens
thods to mea
rest rate, fore
objectives
vities expose
and liquidity
arkets and s
sure that the
asure differen
eign exchang
e it to a varie
risk. The con
seeks to min
consolidated
nt types of ri
ge and other
ety of financi
nsolidated e
nimise poten
d entity is ab
sk to which i
r price risks a
ial risks: ma
ntity's overa
tial adverse
ble to finance
it is exposed
and ageing a
rket risk (inc
ll risk manag
effects on t
e its busines
d. These met
analysis for c
cluding foreig
gement prog
the financial
ss plans. The
thods include
credit risk.
gn currency
gram focuses
performance
e consolidate
e sensitivity a
risk and
s on the
e of the
ed entity
analysis
47
47
48
d
onsolidated
C
016
20
2017
7
$'
0
$'000
000
451
270
721
442
221
663
Final
dividend for
e
share
m dividend fo
Interim
e
share
or the year e
ended 30 Jun
ne 2017 of 0.
.6 cents (201
16: 0.5 cents
) per ordinar
ry
the year end
ded 30 June
2016 of 1.0
cents (2015
: 1.0 cents) p
per ordinary
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
This r
eserve is us
ed to recogn
nise the incre
ements and d
decrements
on changes
in equity of t
the parent on
n acquisition
n of non-
Marke
et risk
Risk
('Boar
proce
deriva
managemen
rd'). These p
dures, contro
ative financia
nt is carried
policies includ
ols and risk
al instruments
out by sen
de identificat
limits. The c
s, for specula
nior executiv
tion and ana
consolidated
ative purpos
ves ('finance
alysis of the
entity does
es. Finance
e') under po
risk exposur
not enter int
reports to th
olicies approv
re of the con
to or trade in
e Board are
ved by the
nsolidated en
n financial ins
on a monthly
Board of D
ntity and app
struments, in
y basis.
Directors
propriate
ncluding
Note 2
20. Financia
al instrumen
nts (continu
ed)
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
risk
Foreig
gn currency r
consolidated
The c
ncy risk throu
curren
foreig
n exchange
.
dollar
entity unde
ugh foreign e
risk arising
ertakes certa
exchange rat
primarily fro
ain transact
te fluctuation
om the Poun
ions denom
ns. The cons
d Sterling, S
minated in fo
olidated enti
Singapore do
oreign curren
ty operates i
ollar, South A
ncy and is
international
African Rand
exposed to
ly and is exp
d and New Z
foreign
posed to
Zealand
Foreig
denom
foreig
gn exchange
minated in a
n exchange
e risk arises
currency th
risks.
from future
hat is not the
commercial
e entity's fun
transactions
nctional curre
s and recogn
ency. The co
nised financi
onsolidated e
al assets an
entity presen
nd financial l
ntly does no
iabilities
ot hedge
The c
the re
carrying amo
porting date
ount of the co
were as follo
onsolidated
ows:
entity's forei
ign currency
y denominate
ed financial a
assets and f
financial liab
bilities at
Cons
solidated
Ass
sets
2017
$'000
2016
$'000
Liabilities
2017
7
0
$'000
20
$'
016
000
US do
ollars
s
Euros
d Sterling
Pound
Zealand dolla
New Z
apore dollars
Singa
h African Ran
South
an Shilling
Kenya
Kong Dollar
Hong
nd
rs
ars
46
7
3,161
470
86
44
4
19
3,837
73
7
6
66
2,56
89
8
21
9
42
4
4
-
1
3
-
,696
306
28
-
-
-
2,99
99
2,033
2
23
-
1,331
42
88
-
-
-
1,484
On 9
August 201
7, a final div
vidend for th
he year end
ded 30 June
2017 of 1.4
4 cents per
ordinary sha
are, unfranke
ed, was
declar
red and will b
be paid on 2
9 Septembe
er 2017 to tho
ose shareho
lders on the
register at 7
7pm on 15 Se
eptember 20
017. The
Price
The c
risk
onsolidated
entity is not e
exposed to a
any significan
nt price risk.
The c
$3,83
positio
$180,
consolidated
7,000 less lia
on, a 10% s
000 foreign c
entity had
abilities $2,0
trengthening
currency loss
net assets d
033,000) (201
g in the Aust
s.
denominated
16: $1,515,0
tralian dollar
d in foreign
00 (assets $
from 30 Jun
currencies o
$2,999,000 le
ne 2017 leve
of $1,804,00
ess liabilities
els may exp
00 as at 30
$1,484,000)
ose the con
June 2017
)). Based on
solidated en
(assets
this net
ntity to a
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note
18. Equity -
reserves (c
continued)
Share
e-based paym
ments reserv
ve
Other
r reserves
contro
olling interest
ts.
Movem
ments in res
erves
Cons
solidated
Balan
nce at 1 July
2015
Foreig
gn currency
translation
Share
e-based paym
ments
Balan
nce at 30 Jun
ne 2016
Foreig
gn currency
translation
Share
e-based paym
ments
Balan
nce at 30 Jun
ne 2017
Note
19. Equity -
dividends
The r
reserve is u
sed to reco
ognise the v
value of equ
uity benefits
provided to
o employees
s and directo
ors as part
of their
remun
neration, and
d other partie
es as part of
their compen
nsation for se
ervices.
Movem
ments in eac
ch class of re
eserve during
g the current
t and previou
us financial y
year are set o
out below:
Foreign
c
currency
$'000
Share-base
ed
payments
s
$'000
Othe
er
$'000
0
To
otal
$'
000
(39)
(93)
-
-
(132)
(101)
(233)
2
23
-
2
22
4
45
-
3
32
7
77
754
-
-
-
-
754
754
451
270
721
738
(93)
22
667
(101)
32
598
442
221
663
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
Divide
ends paid du
ring the finan
ncial year we
ere as follow
ws:
Final
dividend for
the year end
ded 30 June
2016 of 1.0
cents (2015
: 1.0 cents) p
per ordinary
Interim
m dividend fo
or the year e
ended 30 Jun
ne 2017 of 0.
.6 cents (201
16: 0.5 cents
) per ordinar
ry
share
e
share
e
total d
distribution w
will be $630,4
480.
Note 2
20. Financia
al instrumen
nts
Finan
ncial risk ma
anagement o
objectives
The c
consolidated
entity's activ
vities expose
e it to a varie
ety of financi
ial risks: ma
rket risk (inc
cluding foreig
gn currency
risk and
interes
st rate risk),
credit risk a
and liquidity
risk. The con
nsolidated e
ntity's overa
ll risk manag
gement prog
gram focuses
s on the
unpre
dictability of
f financial ma
arkets and s
seeks to min
nimise poten
tial adverse
effects on t
the financial
performance
e of the
conso
olidated entity
y and to ens
sure that the
consolidated
d entity is ab
ble to finance
e its busines
ss plans. The
e consolidate
ed entity
uses d
different met
thods to mea
asure differen
nt types of ri
sk to which i
it is exposed
d. These met
thods include
e sensitivity a
analysis
in the
case of inter
rest rate, fore
eign exchang
ge and other
r price risks a
and ageing a
analysis for c
credit risk.
The c
bank l
consolidated
loans, relate
entity's obje
d party loans
ctive is to m
s and financi
aintain a ba
ial leases.
lance betwee
en continuity
y of funding
and flexibility
y through the
e use of
47
48
48
ate risk arise
tity to interes
es from shor
st rate risk. B
rt-term and l
Borrowings is
long-term bo
ssued at fixe
orrowings. B
ed rates expo
orrowings is
ose the cons
ssued at
olidated
entity's mai
ose the cons
interest rate
n interest ra
solidated ent
e risk.
Intere
The c
variab
entity
st rate risk
consolidated
ble rates exp
to fair value
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note 2
20. Financia
al instrumen
nts (continu
ed)
As at
the reporting
g date, the co
onsolidated e
entity had the
e following v
variable rate
borrowings a
and term dep
posits.
Cons
solidated
Bank
Cash
overdrafts a
at bank - ter
and bank loan
rm deposit
ns
Net e
xposure to c
cash flow inte
k
erest rate risk
20
17
2016
Weighted
W
average
terest rate
%
int
Weight
averag
interest
ted
ge
rate
%
Balance
$'000
Bal
$'
lance
000
4.05%
2.75%
6.
2.
13%
60%
50
75
49)
(4
70
01
650
(46)
604
The fo
ollowing table
es detail the
consolidate
d entity's rem
maining cont
tractual matu
urity for its fin
nancial instru
ument liabilit
ies. The
tables
s have been
drawn up ba
ased on the u
undiscounted
d cash flows
of financial l
iabilities bas
sed on the ea
arliest date o
on which
the fin
nancial liabil
lities are req
quired to be
e paid. The
tables includ
de both inte
erest and pri
incipal cash
flows disclo
osed as
remai
ning contrac
ctual maturit
ties and the
refore these
e totals may
y differ from
their carryi
ng amount
in the state
ment of
financ
cial position.
Weigh
ted
avera
ge
interest
rate 1 yea
ar or less
an
nd 2 years
and 5 years
s
Over 5 y
years
%
$
'000
$'000
$'000
$'000
0
B
Between 1
Between 2
2
Rem
maining
contr
ractual
mat
urities
$'
000
The c
princip
requir
advers
expec
consolidated
pal and inter
red to service
se/favourabl
cted volatility
entity has n
rest paymen
e the debt. A
e effect on p
of interest ra
net bank loan
nt loans. Ann
An official inc
profit before t
ates using m
ns and borro
nually cash o
crease/decre
tax of $7,000
market data a
owings outst
outlays of ap
ease in intere
0 (2016: $6,0
and analysis.
tanding, tota
pproximately
est rates of
000) per ann
alling $701,0
y $38,000 (2
100 (2016: 1
um. The per
00 (2016: $6
2016: $350,0
100) basis po
rcentage cha
604,000), wh
000 per quar
oints would h
ange is based
hich are
rter) are
have an
d on the
In Jun
coven
ne 2017 the
nants are spe
consolidate
ecific annual
ed entity ente
reporting req
ered into a
quirements.
new finance
e facility with
h HSBC Ban
nk Australia
Ltd. The ba
ank loan
Credi
Credit
conso
All fra
put in
entity'
conso
deacti
it risk
t risk refers
olidated entity
anchisees are
place to en
s exposure
olidated entit
ivation of acc
to the risk th
y. The conso
e subject to
nsure that re
to credit de
ty's policy f
cess to stude
hat a counte
olidated entit
legal and cr
eceivable bal
efault is not
for non-paym
ent curriculum
erparty will d
ty has adopte
redit checks
lances are m
significant. T
ment of de
m resources
default on its
ed a policy o
prior to cont
monitored on
The consolid
bt by contra
.
s contractual
of dealing wit
tracting with
n an ongoing
dated entity
acted partne
obligations
th only recog
the consolid
g basis with
does not ho
ers within t
resulting in
gnised, credit
dated entity.
the result th
old any colla
the maximum
financial los
tworthy third
Policies hav
hat the cons
ateral. Howe
m 30-day t
s to the
parties.
ve been
olidated
ver, the
erms is
Before
e accepting a
any new cus
stomers, the c
consolidated
d entity asses
sses the pote
ential custom
mer's credit q
quality.
In det
the tra
limited
recog
statem
ermining the
ade receivab
d due to the
nised financi
ment of finan
e recoverabil
ble from the
customer ba
ial assets is
cial position
ity of a trade
date credit w
ase being la
the carrying
and notes to
e receivable,
was initially
rge and unre
amount, net
o the financia
the consolid
granted up
elated. The m
t of any prov
al statements
dated entity c
to the report
maximum ex
isions for imp
s.
considers an
ting date. Th
xposure to cr
pairment of t
ny change in
he concentra
redit risk at t
those assets
n the credit q
ation of cred
the reporting
s, as disclose
uality of
it risk is
g date to
ed in the
Liquid
Vigilan
equiva
dity risk
nt liquidity ris
alents) and a
sk managem
available bor
ment requires
rrowing facilit
s the consolid
ties to be abl
dated entity t
le to pay deb
to maintain s
bts as and w
sufficient liqu
hen they bec
uid assets (m
come due an
mainly cash a
nd payable.
nd cash
The c
contin
onsolidated
nuously moni
entity manag
itoring actua
ges liquidity
l and forecas
risk by main
st cash flows
ntaining adeq
s and matchin
quate cash re
ng the matur
eserves and
rity profiles o
available bo
of financial as
orrowing fac
ssets and lia
ilities by
bilities.
Finan
Unuse
cing arrange
ed borrowing
ements
g facilities at
the reporting
g date:
Bank
overdraft
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
1
,750
500
Short
-term employ
yee benefits
Post-e
employment
t benefits
Share
e-based paym
ments
49
49
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 2
20. Financia
al instrumen
nts (continu
ed)
Rema
aining contrac
ctual maturit
ties
Cons
solidated - 2
017
Non-d
derivatives
Non-i
interest beari
ring
Trade
e payables
Other
r payables
Intere
est-bearing -
fixed rate
Bank
loans
Total
non-derivativ
ves
Cons
solidated - 2
016
Non-d
derivatives
Non-i
interest beari
ring
Trade
e payables
Other
r payables
4
.05%
Weigh
ted
avera
ge
-
-
-
-
Intere
est-bearing -
variable
Bank
loans
Total
non-derivativ
ves
6
.13%
interest
rate 1 yea
ar or less
an
nd 2 years
and 5 years
s
Over 5 y
years
%
$
'000
$'000
$'000
$'000
0
B
Between 1
Between 2
2
-
-
152
152
-
40
300
340
-
-
44
46
44
46
-
-
-
-
-
-
-
-
-
-
-
-
Rem
maining
contr
ractual
mat
urities
$'
000
444
3,532
750
4,726
435
2,864
650
3,949
The c
cash flows in
n the maturity
y analysis a
bove are no
ot expected t
to occur sign
nificantly ear
rlier than con
ntractually di
isclosed
above
e.
Fair v
value of fina
ancial instru
ments
Unles
s otherwise
stated, the c
carrying amo
unts of finan
cial instrume
ents reflect th
heir fair value
e.
Note 2
21. Key man
nagement p
personnel di
sclosures
Comp
pensation
entity
is set out be
elow:
The a
aggregate co
ompensation
made to di
rectors and
other memb
bers of key m
managemen
nt personnel
of the cons
olidated
C
onsolidated
d
2017
7
$
20
016
$
1,385
5,427
1,1
155,469
99
9,796
33
3,694
90,614
14,417
1,518
8,917
1,2
260,500
444
3,532
152
4,128
435
2,824
350
3,609
50
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 2
20. Financia
al instrumen
nts (continu
ed)
Cons
solidated
Bank
overdrafts a
and bank loan
ns
Cash
at bank - ter
rm deposit
Net e
xposure to c
cash flow inte
erest rate risk
k
As at
the reporting
g date, the co
onsolidated e
entity had the
e following v
variable rate
borrowings a
and term dep
posits.
20
17
W
Weighted
average
2016
Weight
ted
averag
ge
int
terest rate
Balance
interest
rate
Bal
lance
%
$'000
%
$'
000
4.05%
2.75%
6.
13%
2.
60%
75
50
(4
49)
70
01
650
(46)
604
The c
consolidated
entity has n
net bank loan
ns and borro
owings outst
tanding, tota
alling $701,0
00 (2016: $6
604,000), wh
hich are
princip
pal and inter
rest paymen
nt loans. Ann
nually cash o
outlays of ap
pproximately
y $38,000 (2
2016: $350,0
000 per quar
rter) are
requir
red to service
e the debt. A
An official inc
crease/decre
ease in intere
est rates of
100 (2016: 1
100) basis po
oints would h
have an
advers
se/favourabl
e effect on p
profit before t
tax of $7,000
0 (2016: $6,0
000) per ann
um. The per
rcentage cha
ange is based
d on the
expec
cted volatility
of interest ra
ates using m
market data a
and analysis.
In Jun
ne 2017 the
consolidate
ed entity ente
ered into a
new finance
e facility with
h HSBC Ban
nk Australia
Ltd. The ba
ank loan
coven
nants are spe
ecific annual
reporting req
quirements.
Credi
it risk
Credit
t risk refers
to the risk th
hat a counte
erparty will d
default on its
s contractual
obligations
resulting in
financial los
s to the
conso
olidated entity
y. The conso
olidated entit
ty has adopte
ed a policy o
of dealing wit
th only recog
gnised, credit
tworthy third
parties.
All fra
anchisees are
e subject to
legal and cr
redit checks
prior to cont
tracting with
the consolid
dated entity.
Policies hav
ve been
put in
place to en
nsure that re
eceivable bal
lances are m
monitored on
n an ongoing
g basis with
the result th
hat the cons
olidated
entity'
s exposure
to credit de
efault is not
significant. T
The consolid
dated entity
does not ho
old any colla
ateral. Howe
ver, the
conso
olidated entit
ty's policy f
for non-paym
ment of de
bt by contra
acted partne
ers within t
the maximum
m 30-day t
erms is
deacti
ivation of acc
cess to stude
ent curriculum
m resources
.
Before
e accepting a
any new cus
stomers, the c
consolidated
d entity asses
sses the pote
ential custom
mer's credit q
quality.
In det
ermining the
e recoverabil
ity of a trade
e receivable,
the consolid
dated entity c
considers an
ny change in
n the credit q
uality of
the tra
ade receivab
ble from the
date credit w
was initially
granted up
to the report
ting date. Th
he concentra
ation of cred
it risk is
limited
d due to the
customer ba
ase being la
rge and unre
elated. The m
maximum ex
xposure to cr
redit risk at t
the reporting
g date to
recog
nised financi
ial assets is
the carrying
amount, net
t of any prov
isions for imp
pairment of t
those assets
s, as disclose
ed in the
statem
ment of finan
cial position
and notes to
o the financia
al statements
s.
Liquid
dity risk
Vigilan
nt liquidity ris
sk managem
ment requires
s the consolid
dated entity t
to maintain s
sufficient liqu
uid assets (m
mainly cash a
nd cash
equiva
alents) and a
available bor
rrowing facilit
ties to be abl
le to pay deb
bts as and w
hen they bec
come due an
nd payable.
The c
onsolidated
entity manag
ges liquidity
risk by main
ntaining adeq
quate cash re
eserves and
available bo
orrowing fac
ilities by
contin
nuously moni
itoring actua
l and forecas
st cash flows
s and matchin
ng the matur
rity profiles o
of financial as
ssets and lia
bilities.
Finan
cing arrange
ements
Unuse
ed borrowing
g facilities at
the reporting
g date:
Bank
overdraft
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
1
,750
500
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note 2
20. Financia
al instrumen
nts (continu
ed)
ties
Rema
The fo
tables
the fin
remai
financ
aining contrac
ollowing table
s have been
nancial liabil
ning contrac
cial position.
ctual maturit
es detail the
drawn up ba
lities are req
ctual maturit
consolidate
ased on the u
quired to be
ties and the
d entity's rem
undiscounted
e paid. The
refore these
maining cont
d cash flows
tables includ
e totals may
tractual matu
of financial l
de both inte
y differ from
urity for its fin
iabilities bas
erest and pri
their carryi
nancial instru
sed on the ea
incipal cash
ng amount
ument liabilit
arliest date o
flows disclo
in the state
ies. The
on which
osed as
ment of
Cons
solidated - 2
017
Weigh
avera
interest
%
ted
ge
ar or less
rate 1 yea
'000
$
Between 1
B
nd 2 years
an
$'000
Between 2
2
s
and 5 years
$'000
years
Over 5 y
0
$'000
Rem
contr
mat
$'
maining
ractual
urities
000
Non-d
Non-i
Trade
Other
derivatives
interest beari
e payables
r payables
ring
est-bearing -
fixed rate
Intere
Bank
Total
loans
non-derivativ
ves
-
-
4
.05%
444
3,532
152
4,128
-
-
152
152
-
-
44
44
46
46
-
-
-
-
444
3,532
750
4,726
Cons
solidated - 2
016
Weigh
avera
interest
%
ted
ge
ar or less
rate 1 yea
'000
$
Between 1
B
nd 2 years
an
$'000
2
Between 2
s
and 5 years
$'000
years
Over 5 y
0
$'000
Rem
contr
mat
$'
maining
ractual
urities
000
Non-d
Non-i
Trade
Other
derivatives
interest beari
e payables
r payables
ring
Intere
Bank
Total
est-bearing -
variable
loans
non-derivativ
ves
-
-
6
.13%
435
2,824
350
3,609
-
40
300
340
-
-
-
-
-
-
-
-
435
2,864
650
3,949
The c
above
cash flows in
e.
n the maturity
y analysis a
bove are no
ot expected t
to occur sign
nificantly ear
rlier than con
ntractually di
isclosed
Fair v
Unles
value of fina
s otherwise
ancial instru
stated, the c
ments
carrying amo
unts of finan
Note 2
21. Key man
nagement p
personnel di
sclosures
cial instrume
ents reflect th
heir fair value
e.
Comp
The a
entity
pensation
aggregate co
is set out be
ompensation
elow:
made to di
rectors and
other memb
bers of key m
managemen
nt personnel
of the cons
olidated
Short
Post-e
Share
-term employ
employment
e-based paym
yee benefits
t benefits
ments
d
onsolidated
C
20
016
7
2017
$
$
1,385
99
33
5,427
9,796
3,694
1,1
155,469
90,614
14,417
1,518
8,917
1,2
260,500
49
50
50
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note 2
22. Remune
eration of au
uditors
During
compa
g the financia
any, and unr
al year the fo
ollowing fees
:
related firms:
s were paid o
or payable fo
or services pr
rovided by P
Audit
Audit
services - P
or review of
PKF Newcast
the financia
tle
l statements
Other
Prepa
r services - P
aration of the
PKF Newcas
e tax return a
tle
and other tax
x services
KF Newcast
Audit
Audit
services - un
or review of
ms
nrelated firm
the financia
l statements
Other
Payro
r services - u
oll and tax se
ms
unrelated firm
ervices
Fees
Educa
of $21,656 (
ation United
(2016: $26,6
Kingdom Lim
659) were pa
mited.
aid to Hazlew
woods LLP,
who are the
e auditors of
Note 2
23. Conting
ent liabilitie
es
There
e were no con
ntingent liabi
ilities at 30 J
une 2017.
the UK sub
The c
opera
consolidated
ting lease of
entity has e
f the head off
entered into a
fice premises
arrangement
s amounting
ts to provide
to $58,000 (
e a guarante
(2016: $48,0
e to the con
000).
nsolidated en
Note 2
24. Commit
ments
PPE L
Comm
Within
One t
Lease comm
mitted at the
n one year
to five years
mitments - op
reporting da
perating
ate but not re
cognised as
liability, pay
yable:
onsolidated
d
C
016
20
2017
7
000
$'
0
$'000
267
639
906
231
852
1,083
Opera
opera
escala
ating lease c
ting leases
ation clauses
commitments
expiring wit
s. On renewa
s includes c
thin one to
al, the terms
ontracted am
five years w
of the leases
mounts for o
with, in som
s are renego
offices and p
me cases, op
otiated.
plant and eq
ptions to ex
quipment un
tend. The le
Note 2
25. Related
party transa
actions
Paren
Kip M
nt entity
cGrath Educ
cation Centre
es Limited is
the parent e
entity.
or of the
sidiary Kip M
tle, the audito
Disclo
osures relatin
ng to key m
management
personnel a
are set out i
n note 21 a
and the remu
uneration re
port included
d in the
d
onsolidated
C
20
016
7
2017
$
$
During
g the year a
a child of Ca
atherine Coo
ok (KMP) w
was paid $1,8
880 for und
ertaking cur
rriculum test
ing services
s for the
96
6,206
97,005
During
g the year, th
he company
Importaurus
s Pty Ltd, bec
came a relate
ed party to K
Kip McGrath
and holds 27
74,050 share
es in the
6,430
6
23,917
Recei
ivable from a
and payable t
to related pa
arties
There
e were no tra
de receivabl
es from or tr
rade payable
es to related
parties at the
e current and
d previous re
eporting date
e.
102
2,636
120,922
1
17
7,352
10,813
4,304
4
15,846
21
,656
26,659
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 2
25. Related
party transa
actions (con
ntinued)
Key m
management
personnel
directo
ors' report.
Trans
sactions with
related parti
ies
conso
olidated entity
y.
paren
t entity.
Loans
s to/from rela
ated parties
There
e were no loa
ans to or from
m related par
rties at the cu
urrent and pr
revious repo
rting date.
Terms
s and conditi
ions
All tra
nsactions we
ere made on
n normal com
mmercial term
ms and condi
itions and at
market rates
s.
Note 2
26. Parent e
entity inform
mation
Set ou
ut below is th
he suppleme
entary informa
ation about t
the parent en
ntity.
Statem
ment of profi
it or loss and
d other compr
rehensive in
come
Total
current asse
ets
Total
assets
Total
current liabil
lities
Total
liabilities
Equity
y
Iss
sued capital
Fo
oreign curren
ncy reserve
Sh
hare-based p
payments res
serve
Ac
ccumulated l
osses
Total
equity
Parent
2017
7
$'000
0
20
016
$'
000
1
,091
1
,091
1,164
1,164
Parent
2017
7
$'000
0
20
016
$'
000
8
8,632
6
6,257
2
2,557
4
4,058
8
8,838
(42)
77
(6
,674)
4,965
5,582
2,060
3,837
8,774
(30)
45
(7,044)
2
2,199
1,745
over its
Profit
after income
e tax
Total
comprehens
sive income
Statem
ment of finan
ncial position
n
der non-can
eases have
ncellable
various
ntity's lessor
McGrath
Subsi
Intere
idiaries
sts in subsid
diaries are se
et out in note
e 27.
51
51
52
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
During
g the financia
al year the fo
ollowing fees
s were paid o
or payable fo
or services pr
rovided by P
KF Newcast
tle, the audito
or of the
compa
any, and unr
related firms:
:
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 2
22. Remune
eration of au
uditors
Audit
services - P
PKF Newcast
tle
Audit
or review of
the financia
l statements
Other
r services - P
PKF Newcas
tle
Prepa
aration of the
e tax return a
and other tax
x services
Audit
services - un
nrelated firm
ms
Audit
or review of
the financia
l statements
Other
r services - u
unrelated firm
ms
Payro
oll and tax se
ervices
Educa
ation United
Kingdom Lim
mited.
Note 2
23. Conting
ent liabilitie
es
There
e were no con
ntingent liabi
ilities at 30 J
une 2017.
C
onsolidated
d
2017
7
$
20
016
$
96
6,206
97,005
6
6,430
23,917
102
2,636
1
120,922
17
7,352
10,813
4
4,304
15,846
21
,656
26,659
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
267
639
906
231
852
1,083
Fees
of $21,656 (
(2016: $26,6
659) were pa
aid to Hazlew
woods LLP,
who are the
e auditors of
the UK sub
sidiary Kip M
McGrath
The c
consolidated
entity has e
entered into a
arrangement
ts to provide
e a guarante
e to the con
nsolidated en
ntity's lessor
over its
opera
ting lease of
f the head off
fice premises
s amounting
to $58,000 (
(2016: $48,0
000).
Note 2
24. Commit
ments
PPE L
Lease comm
mitments - op
perating
Comm
mitted at the
reporting da
ate but not re
cognised as
liability, pay
yable:
Within
n one year
One t
to five years
Opera
ating lease c
commitments
s includes c
ontracted am
mounts for o
offices and p
plant and eq
quipment un
der non-can
ncellable
opera
ting leases
expiring wit
thin one to
five years w
with, in som
me cases, op
ptions to ex
tend. The le
eases have
various
escala
ation clauses
s. On renewa
al, the terms
of the leases
s are renego
otiated.
Note 2
25. Related
party transa
actions
Kip M
cGrath Educ
cation Centre
es Limited is
the parent e
entity.
Paren
nt entity
Subsi
idiaries
Intere
sts in subsid
diaries are se
et out in note
e 27.
51
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note 2
25. Related
party transa
actions (con
ntinued)
Key m
Disclo
directo
management
osures relatin
ors' report.
personnel
ng to key m
management
personnel a
are set out i
n note 21 a
and the remu
uneration re
port included
d in the
Trans
During
conso
sactions with
g the year a
olidated entity
related parti
a child of Ca
y.
ies
atherine Coo
ok (KMP) w
was paid $1,8
880 for und
ertaking cur
rriculum test
ing services
s for the
During
paren
g the year, th
t entity.
he company
Importaurus
s Pty Ltd, bec
came a relate
ed party to K
Kip McGrath
and holds 27
74,050 share
es in the
Recei
There
ivable from a
e were no tra
and payable t
de receivabl
to related pa
es from or tr
arties
rade payable
es to related
parties at the
e current and
d previous re
eporting date
e.
Loans
There
s to/from rela
e were no loa
ated parties
ans to or from
m related par
rties at the cu
urrent and pr
revious repo
rting date.
Terms
All tra
s and conditi
nsactions we
ions
ere made on
n normal com
mmercial term
ms and condi
itions and at
Note 2
26. Parent e
entity inform
mation
Set ou
ut below is th
he suppleme
entary informa
ation about t
the parent en
ntity.
Statem
ment of profi
it or loss and
d other compr
rehensive in
come
Profit
after income
e tax
Total
comprehens
sive income
Statem
ment of finan
n
ncial position
Total
current asse
ets
Total
assets
Total
current liabil
lities
Total
liabilities
Equity
y
sued capital
Iss
oreign curren
Fo
hare-based p
Sh
ccumulated l
Ac
ncy reserve
payments res
osses
serve
market rates
s.
Parent
2017
7
0
$'000
20
$'
016
000
1
,091
1
,091
1,164
1,164
Parent
2017
7
0
$'000
20
$'
016
000
8,632
8
6,257
6
2,557
2
4,058
4
8,838
8
(42)
77
,674)
(6
4,965
5,582
2,060
3,837
8,774
(30)
45
(7,044)
Total
equity
2,199
2
1,745
52
52
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note 2
26. Parent e
entity inform
mation (cont
tinued)
Guara
The p
excep
antees entere
parent entity
pt as disclose
ed into by th
had no gua
ed in note 23
e parent enti
arantees in r
3.
ity in relation
relation to th
n to the debts
he debts of i
s of its subsid
ts subsidiari
diaries
es as at 30
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 2
29. Earning
s per share
June 2017
and 30 Jun
e 2016,
Contin
The p
es
ngent liabilitie
had no conti
arent entity h
ngent liabiliti
ies as at 30 J
June 2017 a
nd 30 June 2
2016.
Profit
after income
e tax attributa
able to the o
owners of Kip
p McGrath Ed
ducation Cen
ntres Limited
d
1
,436
1,203
tity are cons
sistent with t
hose of the
consolidated
d entity, as
disclosed in
note 1,
Weigh
hted average
e number of
ordinary sha
ares used in c
calculating d
diluted earnin
ngs per share
e 46,798
8,031
46,7
734,331
Limited. A
letter of
Weigh
hted average
e number of
ordinary sha
ares used in c
calculating b
basic earning
gs per share
44,892
2,277
44,1
184,331
Adjus
stments for ca
alculation of
diluted earn
ings per sha
are:
Op
ptions over o
ordinary shar
res
Finan
The p
suppo
cial support
parent entity
ort was also i
has issued
issued in the
a financial l
e prior year.
letter of sup
port to Kip M
McGrath Edu
ucation Unite
ed Kingdom
Signifi
ficant accoun
accounting p
The a
pt for the follo
excep
I
nvestments
●
Dividends re
D
●
s
nting policies
e parent ent
olicies of the
owing:
in subsidiari
ceived from
es are accou
subsidiaries
unted for at c
are recognis
cost, less any
sed as other
y impairmen
income by t
t, in the pare
he parent en
ent entity.
ntity.
Note 2
27. Interests
s in subsidi
aries
The c
accord
consolidated
dance with th
financial s
he accountin
tatements in
ng policy des
ncorporate t
scribed in not
the assets,
te 1:
liabilities an
nd results o
of the follow
wing subsidi
aries in
Name
e
Kip M
Kip M
Kip M
Kip M
Kip M
McGrath Educ
McGrath Glob
McGrath Direc
McGrath Educ
McGrath Educ
cation Austra
bal Pty Limite
ct Pty Ltd
cation United
cation New Z
alia Pty Ltd
ed
d Kingdom Lt
Zealand Limi
td
ted
Principal
Country o
place of bu
of incorpora
siness /
ation
Australia
Australia
Australia
United Kin
New Zeala
ngdom
and
Note 2
28. Reconci
iliation of pr
rofit after in
come tax to
o net cash fr
rom operatin
s
ng activities
Profit
after income
e tax expens
se for the yea
ar
Adjus
Depre
Share
Foreig
stments for:
eciation and
e-based paym
gn exchange
n
amortisation
ments
e differences
Chan
De
De
De
De
Inc
De
Inc
Inc
ge in operati
ecrease/(incr
ecrease in in
ecrease in de
ecrease in pr
crease in tra
ecrease in pr
crease in de
crease in em
ing assets an
rease) in trad
nventories - s
eferred tax a
repayments
ade and othe
rovision for in
ferred tax lia
mployee bene
nd liabilities:
de and other
stores and ed
assets
r payables
ncome tax
abilities
efits
s
r receivables
materials
ducational m
Net ca
ash from ope
erating activi
ities
53
53
rest
nership inter
Own
20
016
7
2017
%
%
100.
100.
100.
100.
100.
00%
00%
00%
00%
00%
10
10
10
10
10
00.00%
00.00%
00.00%
00.00%
00.00%
d
onsolidated
C
016
20
7
2017
$'
0
$'000
000
1
,436
1,203
773
32
(101)
25
-
185
12
530
(9)
183
67
443
22
(21)
(146)
36
388
81
190
(29)
53
14
3,133
3
2,234
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
Numb
ber
Num
mber
1,905
5,754
2,5
550,000
Cents
s
Ce
ents
3
3.199
3
3.069
2.723
2.574
Basic
c earnings pe
er share
Dilute
ed earnings p
per share
Note 3
30. Share-b
ased payme
ents
On 9
March 2012
, shareholde
ers approved
the terms a
and condition
ns of the Kip
McGrath Em
mployee Sha
are Option P
lan ('the
Plan')
. The Plan is
s designed to
o provide lon
ng-term incen
ntives for em
mployees to d
deliver long-t
term shareho
older returns
s. Under
the Pl
an the conso
olidated entit
ty may, at th
he discretion
of the Nomi
nation and R
Remuneratio
n Committee
e, grant optio
ons over
ordina
ary shares in
n the parent e
entity to cert
ain key man
agement pe
rsonnel. The
e options are
e issued for n
nil considerat
tion and
only v
vest if certain
n conditions a
are met.
Option
ns granted u
under the pla
an carry no d
dividend or v
oting rights.
Shares issu
ed under ex
xercised optio
ons will rank
k equally
with o
ordinary shar
es.
On ex
xercise each
option conve
erts to one s
hare, except
t in certain ci
ircumstances
s such as rig
ghts issues o
or bonus issu
es.
Set ou
ut below are
summaries o
of options gr
ranted under
r the plan:
2017
Grant
t date
E
Expiry date
price
e
Granted
Exercised
Exerc
ise
Expire
ed/
forfeite
ed/
othe
r
Bala
ance at
the e
end of
the
year
31/03
3/2012
28/02
2/2014
20/08
8/2014
21/11
/2014
02/09
9/2016
3
31/03/2022
2
28/02/2018
3
31/12/2019
3
31/12/2019
3
31/12/2021
$0
0.075
$0
0.190
$0
0.350
$0
0.350
$0
0.300
*
O
Other repres
ents options
s lapsed
-
-
-
-
500,000
500,000
(850,00
00)
(150
0,000)
(200
0,000)
-
-
-
-
-
-
-
(850,00
00)
(350
0,000)
-
2
250,000
1
100,000
1,0
000,000
5
500,000
1,8
850,000
Bala
ance at
the s
start of
the
e year
8
850,000
4
400,000
3
300,000
1,0
000,000
-
2,5
550,000
54
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Guara
antees entere
ed into by th
e parent enti
ity in relation
n to the debts
s of its subsid
diaries
The p
parent entity
had no gua
arantees in r
relation to th
he debts of i
ts subsidiari
es as at 30
June 2017
and 30 Jun
e 2016,
The p
arent entity h
had no conti
ngent liabiliti
ies as at 30 J
June 2017 a
nd 30 June 2
2016.
Profit
after income
e tax attributa
able to the o
owners of Kip
p McGrath Ed
ducation Cen
d
ntres Limited
Note 2
29. Earning
s per share
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
hted average
Weigh
stments for ca
Adjus
ptions over o
Op
e number of
alculation of
ordinary shar
ordinary sha
diluted earn
res
ares used in c
ings per sha
calculating b
are:
basic earning
gs per share
d
onsolidated
C
016
20
2017
7
000
$'
0
$'000
1
,436
1,203
Numb
ber
Num
mber
44,892
2,277
44,1
184,331
1,905
5,754
2,5
550,000
The c
consolidated
financial s
tatements in
ncorporate t
the assets,
liabilities an
nd results o
of the follow
wing subsidi
aries in
accord
dance with th
he accountin
ng policy des
scribed in not
te 1:
Note 3
30. Share-b
ased payme
ents
On 9
Plan')
the Pl
ordina
only v
March 2012
. The Plan is
an the conso
ary shares in
vest if certain
, shareholde
s designed to
olidated entit
n the parent e
n conditions a
ers approved
o provide lon
ty may, at th
entity to cert
are met.
the terms a
ng-term incen
he discretion
ain key man
and condition
ntives for em
of the Nomi
agement pe
ns of the Kip
mployees to d
nation and R
rsonnel. The
McGrath Em
deliver long-t
Remuneratio
e options are
mployee Sha
term shareho
n Committee
e issued for n
are Option P
older returns
e, grant optio
nil considerat
lan ('the
s. Under
ons over
tion and
Basic
Dilute
c earnings pe
ed earnings p
er share
per share
s
Cents
Ce
ents
3.199
3
3.069
3
2.723
2.574
Weigh
hted average
e number of
ordinary sha
ares used in c
calculating d
diluted earnin
ngs per share
e 46,798
8,031
46,7
734,331
Option
with o
ns granted u
ordinary shar
under the pla
es.
an carry no d
dividend or v
oting rights.
Shares issu
ed under ex
xercised optio
ons will rank
k equally
On ex
xercise each
option conve
erts to one s
hare, except
t in certain ci
ircumstances
s such as rig
ghts issues o
or bonus issu
es.
Set ou
ut below are
2017
summaries o
of options gr
ranted under
r the plan:
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 2
26. Parent e
entity inform
mation (cont
tinued)
excep
pt as disclose
ed in note 23
3.
Contin
ngent liabilitie
es
Finan
cial support
suppo
ort was also i
issued in the
e prior year.
Signifi
ficant accoun
nting policies
s
excep
pt for the follo
owing:
Note 2
27. Interests
s in subsidi
aries
The p
parent entity
has issued
a financial l
letter of sup
port to Kip M
McGrath Edu
ucation Unite
ed Kingdom
Limited. A
letter of
The a
accounting p
olicies of the
e parent ent
tity are cons
sistent with t
hose of the
consolidated
d entity, as
disclosed in
note 1,
●
●
I
nvestments
in subsidiari
es are accou
unted for at c
cost, less any
y impairmen
t, in the pare
ent entity.
D
Dividends re
ceived from
subsidiaries
are recognis
sed as other
income by t
he parent en
ntity.
Name
e
Principal
place of bu
siness /
Country o
of incorpora
ation
Kip M
McGrath Educ
cation Austra
alia Pty Ltd
Kip M
McGrath Glob
bal Pty Limite
ed
Kip M
McGrath Direc
ct Pty Ltd
Australia
Australia
Australia
Kip M
McGrath Educ
cation United
d Kingdom Lt
td
Kip M
McGrath Educ
cation New Z
Zealand Limi
ted
United Kin
ngdom
New Zeala
and
Note 2
28. Reconci
iliation of pr
rofit after in
come tax to
o net cash fr
rom operatin
ng activities
s
Profit
after income
e tax expens
se for the yea
ar
Adjus
stments for:
Depre
eciation and
amortisation
n
Share
e-based paym
ments
Foreig
gn exchange
e differences
Chan
ge in operati
ing assets an
nd liabilities:
De
ecrease/(incr
rease) in trad
de and other
r receivables
s
De
ecrease in in
nventories - s
stores and ed
ducational m
materials
De
ecrease in de
eferred tax a
assets
De
ecrease in pr
repayments
Inc
crease in tra
ade and othe
r payables
De
ecrease in pr
rovision for in
ncome tax
Inc
crease in de
ferred tax lia
abilities
Inc
crease in em
mployee bene
efits
Own
nership inter
rest
2017
7
%
20
016
%
100.
00%
100.
00%
100.
00%
100.
00%
100.
00%
10
00.00%
10
00.00%
10
00.00%
10
00.00%
10
00.00%
C
onsolidated
d
2017
7
$'000
0
20
016
$'
000
1
,436
1,203
773
32
(101)
25
-
185
12
530
(9)
183
67
443
22
(21)
(146)
36
388
81
190
(29)
53
14
Net ca
ash from ope
erating activi
ities
3
3,133
2,234
*
O
Other repres
ents options
s lapsed
53
54
54
Exerc
ise
price
e
Bala
the s
the
ance at
start of
e year
Granted
Exercised
Expire
ed/
forfeite
ed/
r
othe
Bala
the e
the
ance at
end of
year
$0
$0
$0
$0
$0
0.075
0.190
0.350
0.350
0.300
850,000
8
400,000
4
3
300,000
000,000
1,0
-
550,000
2,5
-
-
-
-
500,000
500,000
Grant
t date
Expiry date
E
31/03
28/02
20/08
21/11
02/09
3/2012
2/2014
8/2014
/2014
9/2016
31/03/2022
3
28/02/2018
2
3
31/12/2019
3
31/12/2019
31/12/2021
3
(150
(200
-
0,000)
0,000)
-
-
0,000)
-
250,000
2
1
100,000
000,000
1,0
5
500,000
850,000
1,8
00)
-
-
-
-
00)
(850,00
(350
(850,00
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Direct
tors' declara
ation
30 Ju
ne 2017
In the
directors' op
pinion:
●
t
the attached
financial sta
atements an
nd notes com
mply with the
e Corporation
ns Act 2001
, the Accoun
nting Standa
ards, the
Corporations
C
s Regulations
s 2001 and o
other mandat
tory professi
onal reportin
ng requireme
ents;
●
t
the attached
financial sta
atements and
d notes comp
ply with Inter
rnational Fin
ancial Repo
rting Standa
rds as issue
d by the
I
nternational
Accounting
Standards B
Board as des
cribed in not
te 1 to the fin
nancial statem
ments;
●
t
the attached
financial sta
atements and
d notes give
a true and f
fair view of t
the consolida
ated entity's
financial pos
sition as
at 30 June 20
a
017 and of it
ts performan
ce for the fin
nancial year e
ended on tha
at date; and
●
t
there are rea
asonable gro
ounds to belie
eve that the
company wi
ll be able to
pay its debts
s as and whe
en they beco
ome due
and payable.
a
.
The d
irectors have
e been given
n the declara
tions require
ed by section
n 295A of the
e Corporation
ns Act 2001.
Signe
d in accorda
ance with a re
esolution of d
directors ma
de pursuant
to section 29
95(5)(a) of th
he Corporatio
ons Act 2001
1.
On be
ehalf of the d
irectors
Kip M
McGrath
Chair
rman
9 Aug
gust 2017
Newc
castle
Kip M
Notes
30 Ju
McGrath Edu
s to the finan
ne 2017
ucation Cent
ncial statem
ments
d
tres Limited
Note 3
30. Share-b
ased payme
ents (contin
ued)
2016
Grant
t date
Expiry date
E
31/03
28/02
20/08
21/11
3/2012
2/2014
8/2014
/2014
3
31/03/2022
2
28/02/2018
3
31/12/2019
31/12/2019
3
ise
Exerc
e
price
Bala
the s
the
ance at
start of
e year
Granted
Exercised
ed/
Expire
forfeite
ed/
r
othe
Bala
the e
the
ance at
end of
year
$0
$0
$0
$0
0.075
0.190
0.350
0.350
8
850,000
4
400,000
3
300,000
000,000
1,0
550,000
2,5
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
8
850,000
4
400,000
3
300,000
000,000
1,0
550,000
2,5
The o
ptions issued
d in the curre
ent financial
year have th
he following v
vesting cond
itions:
• Mee
• The
ting annual p
employee re
performance
emains in em
e indicators s
mployment un
et by the Bo
ntil date of ve
ard; and
esting.
The w
weighted ave
rage share p
price was $0.
.319 (2016: $
$0.233).
The w
(2016
weighted ave
: 1.71 years)
erage remain
).
ning contrac
tual life of o
options outst
tanding at th
he end of the
e financial y
year was 1.8
83 years
For th
the fa
he options gr
ir value at th
ranted during
e grant date
g the current
, are as follo
t financial ye
ows:
ear, the Black
k-Scholes op
ption pricing
model input
s used to de
etermine
_____
__________
___________
____
Grant
t date
Expiry date
E
Option p
at grant
price
date
ercise
Exe
price
p
E
Expected
volatility
Dividend
yield
Risk-fr
interest
ree
rate
Fair
at gra
value
ant date
19/08
8/2016
31/12/2021
3
$0
0.000
$0.300
51.00%
4.70%
%
1.
75%
$0.113
Total
expen
expenses ar
nse were $32
rising from s
2,000 (2016:
share-based
$22,000).
payment tra
ansactions re
ecognised du
uring the per
riod as part
of employee
e benefit
Note 3
31. Events a
after the rep
porting perio
od
Apart
that h
opera
from the div
has significa
tions, or the
vidend declar
antly affecte
consolidated
red as disclo
d, or may
d entity's stat
osed in note
significantly
te of affairs i
19, no othe
affect the
n future fina
r matter or c
consolidated
ncial years.
circumstance
d entity's op
e has arisen
perations, th
since 30 Jun
he results o
ne 2017
of those
55
55
56
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
Grant
t date
E
Expiry date
price
e
Granted
Exercised
Exerc
ise
Bala
ance at
the s
start of
the
e year
8
850,000
4
400,000
3
300,000
1,0
000,000
2,5
550,000
-
-
-
-
-
Expire
ed/
forfeite
ed/
othe
r
Bala
ance at
the e
end of
the
year
-
-
-
-
-
-
-
-
-
-
8
850,000
4
400,000
3
300,000
1,0
000,000
2,5
550,000
●
●
●
●
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Notes
s to the finan
ncial statem
ments
30 Ju
ne 2017
Note 3
30. Share-b
ased payme
ents (contin
ued)
2016
31/03
3/2012
28/02
2/2014
20/08
8/2014
21/11
/2014
3
31/03/2022
2
28/02/2018
3
31/12/2019
3
31/12/2019
$0
0.075
$0
0.190
$0
0.350
$0
0.350
The o
ptions issued
d in the curre
ent financial
year have th
he following v
vesting cond
itions:
• Mee
ting annual p
performance
e indicators s
et by the Bo
ard; and
• The
employee re
emains in em
mployment un
ntil date of ve
esting.
The w
weighted ave
rage share p
price was $0.
.319 (2016: $
$0.233).
The w
weighted ave
erage remain
ning contrac
tual life of o
options outst
tanding at th
he end of the
e financial y
year was 1.8
83 years
(2016
: 1.71 years)
).
For th
he options gr
ranted during
g the current
t financial ye
ear, the Black
k-Scholes op
ption pricing
model input
s used to de
etermine
the fa
ir value at th
e grant date
, are as follo
ows:
Grant
t date
E
Expiry date
Option p
price
at grant
date
Exe
ercise
price
p
E
Expected
volatility
Dividend
Risk-fr
ree
Fair
value
yield
interest
rate
at gra
ant date
19/08
8/2016
3
31/12/2021
$0
0.000
$0.300
51.00%
4.70%
%
1.
75%
$0.113
Total
expenses ar
rising from s
share-based
payment tra
ansactions re
ecognised du
uring the per
riod as part
of employee
e benefit
expen
nse were $32
2,000 (2016:
$22,000).
Note 3
31. Events a
after the rep
porting perio
od
Apart
from the div
vidend declar
red as disclo
osed in note
19, no othe
r matter or c
circumstance
e has arisen
since 30 Jun
ne 2017
that h
has significa
antly affecte
d, or may
significantly
affect the
consolidated
d entity's op
perations, th
he results o
of those
opera
tions, or the
consolidated
d entity's stat
te of affairs i
n future fina
ncial years.
Kip M
Direct
30 Ju
McGrath Edu
tors' declara
ne 2017
ucation Cent
ation
d
tres Limited
In the
directors' op
pinion:
t
the attached
Corporations
C
financial sta
s Regulations
atements an
s 2001 and o
nd notes com
other mandat
mply with the
tory professi
e Corporation
onal reportin
ns Act 2001
ng requireme
, the Accoun
ents;
nting Standa
ards, the
the attached
t
I
nternational
financial sta
Accounting
atements and
Standards B
d notes comp
Board as des
ply with Inter
cribed in not
rnational Fin
te 1 to the fin
ancial Repo
nancial statem
rting Standa
ments;
rds as issue
d by the
t
the attached
at 30 June 20
a
financial sta
017 and of it
atements and
ts performan
d notes give
ce for the fin
a true and f
nancial year e
fair view of t
ended on tha
the consolida
at date; and
ated entity's
financial pos
sition as
t
there are rea
asonable gro
.
and payable.
a
ounds to belie
eve that the
company wi
ll be able to
pay its debts
s as and whe
en they beco
ome due
The d
irectors have
e been given
n the declara
tions require
ed by section
n 295A of the
e Corporation
ns Act 2001.
Signe
d in accorda
ance with a re
esolution of d
directors ma
de pursuant
to section 29
95(5)(a) of th
he Corporatio
ons Act 2001
1.
On be
ehalf of the d
irectors
_____
Kip M
Chair
__________
McGrath
rman
___________
____
9 Aug
Newc
gust 2017
castle
55
56
56
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF KIP MCGRATH EDUCATION CENTRES LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Kip McGrath Education Centres Limited (the
company), which comprises the consolidated statement of financial position as at 30 June 2017, 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, notes comprising a
summary of significant accounting policies and other explanatory information, and the directors’ declaration
of the company and the consolidated entity comprising the company and the entities it controlled at the
year’s end or from time to time during the financial year.
In our opinion, the financial report of Kip McGrath Education Centres Limited is in accordance with the
Corporations Act 2001, including:
a) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of
its performance for the year ended on that date; 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. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement. Our
responsibilities under those standards are further described in the Auditor’s Responsibility section of our
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We are independent of the consolidated entity in accordance with 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.
PKF(NS) Audit & Assurance Limited
Partnership
ABN 91 850 861 839
Liability limited by a scheme
approved under Professional
Standards Legislation
Sydney
Newcastle
Level 8, 1 O’Connell Street
Sydney NSW 2000 Australia
GPO Box 5446 Sydney NSW 2001
755 Hunter Street
Newcastle West NSW 2302 Australia
57
PO Box 2368 Dangar NSW 2309
p
f
+61 2 8346 6000
+61 2 8346 6099
p
f
+61 2 4962 2688
+61 2 4962 3245
PKF(NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of legally independent firms and does not
accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.
For office locations visit www.pkf.com.au
57
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. For each matter below, our description of how our audit addressed the matter is
provided in that context.
1.
Impairment testing of intangible assets
Why significant
How our audit addressed the key audit matter
As discussed in note 10, as at 30 June 2017, the
As part of our procedures we assessed the Group’s
Group has intangible assets of $10.304m.
determination of Cash Generating Units (CGUs). The
Group has determined there is one CGU, being the
An annual impairment test for intangible assets is
required under Australian Accounting Standard (AASB)
whole Group.
136 Impairment of Assets.
Our procedures included but were not limited to:
The evaluation of the recoverable amount requires the
•
to assessing and challenging:
group to exercise significant judgment in determining
key assumptions, which include:
•
•
5 year cash flow forecast;
Terminal growth factor; and
• Discount rate.
The outcome of the impairment assessment could vary
if different assumptions were applied. As a result, the
evaluation of the recoverable amount of intangible
assets including goodwill is a key audit matter.
o
o
the assumption of one cash generating unit is
appropriate;
the accuracy of the FY18 budget approved by
the Board by comparing the budget to FY17
and FY16 actuals;
o
the assumptions used for the future growth
rate by comparing normalised average growth
rate from FY16 to FY17 to the growth rate
adopted in the impairment model;
o
the key assumptions for long term growth in
the forecast cash flows by comparing them to
historical results and industry forecasts; and
o
the discount rate applied by comparing the
weighted average cost of capital to industry
benchmarks.
•
testing, on a sample basis, the mathematical
accuracy of the cash flow models;
• agreeing inputs in the cash flow models to relevant
data
including approved budgets and
latest
forecasts;
•
reviewing management’s sensitivity analysis
in
relation to key assumptions including discount rate,
growth rate and terminal value; and
• we assessed the appropriateness of the disclosures
including
those relating
to sensitivities
in
the
assumptions used, included in Note 10.
58
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF KIP MCGRATH EDUCATION CENTRES LIMITED
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Kip McGrath Education Centres Limited (the
company), which comprises the consolidated statement of financial position as at 30 June 2017, 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, notes comprising a
summary of significant accounting policies and other explanatory information, and the directors’ declaration
of the company and the consolidated entity comprising the company and the entities it controlled at the
year’s end or from time to time during the financial year.
In our opinion, the financial report of Kip McGrath Education Centres Limited is in accordance with the
Corporations Act 2001, including:
a) Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of
its performance for the year ended on that date; and
b) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
report.
opinion.
Independence
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
We are independent of the consolidated entity in accordance with 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.
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. For each matter below, our description of how our audit addressed the matter is
provided in that context.
1.
Impairment testing of intangible assets
Why significant
How our audit addressed the key audit matter
As discussed in note 10, as at 30 June 2017, the
Group has intangible assets of $10.304m.
An annual impairment test for intangible assets is
required under Australian Accounting Standard (AASB)
136 Impairment of Assets.
The evaluation of the recoverable amount requires the
group to exercise significant judgment in determining
key assumptions, which include:
•
•
5 year cash flow forecast;
Terminal growth factor; and
• Discount rate.
We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we
comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement. Our
responsibilities under those standards are further described in the Auditor’s Responsibility section of our
The outcome of the impairment assessment could vary
if different assumptions were applied. As a result, the
evaluation of the recoverable amount of intangible
assets including goodwill is a key audit matter.
As part of our procedures we assessed the Group’s
determination of Cash Generating Units (CGUs). The
Group has determined there is one CGU, being the
whole Group.
Our procedures included but were not limited to:
•
to assessing and challenging:
o
o
o
o
o
the assumption of one cash generating unit is
appropriate;
the accuracy of the FY18 budget approved by
the Board by comparing the budget to FY17
and FY16 actuals;
the assumptions used for the future growth
rate by comparing normalised average growth
rate from FY16 to FY17 to the growth rate
adopted in the impairment model;
the key assumptions for long term growth in
the forecast cash flows by comparing them to
historical results and industry forecasts; and
the discount rate applied by comparing the
weighted average cost of capital to industry
benchmarks.
•
testing, on a sample basis, the mathematical
accuracy of the cash flow models;
• agreeing inputs in the cash flow models to relevant
latest
including approved budgets and
data
forecasts;
•
reviewing management’s sensitivity analysis
in
relation to key assumptions including discount rate,
growth rate and terminal value; and
• we assessed the appropriateness of the disclosures
the
including
assumptions used, included in Note 10.
to sensitivities
those relating
in
PKF(NS) Audit & Assurance Limited
Sydney
Partnership
ABN 91 850 861 839
Liability limited by a scheme
approved under Professional
Standards Legislation
Level 8, 1 O’Connell Street
Sydney NSW 2000 Australia
Newcastle
755 Hunter Street
Newcastle West NSW 2302 Australia
GPO Box 5446 Sydney NSW 2001
PO Box 2368 Dangar NSW 2309
p
f
+61 2 8346 6000
+61 2 8346 6099
p
f
+61 2 4962 2688
+61 2 4962 3245
PKF(NS) Audit & Assurance Limited Partnership is a member firm of the PKF International Limited family of legally independent firms and does not
accept any responsibility or liability for the actions or inactions of any individual member or correspondent firm or firms.
For office locations visit www.pkf.com.au
57
58
58
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017 2. Area Developer Termination payments (one-off transaction)
Why significant
How our audit addressed the key audit matter
During the year, KMEC entered into a confidential
termination agreement with an Australian Area
Developer ("AD”) which allows KMEC to regain the rights
bestowed under this AD arrangement. For this right,
KMEC agreed to pay an upfront payment in full and
capitalised the purchase as an intangible asset at 15
December 2016. As at 30 June 2017 the written down
value of this intangible asset has been included as a part
of Note 10 in the financial statements under “Other
intangible assets”.
We reviewed the AD termination agreement and
ensured the asset was capitalised appropriately,
traced payment to bank and we recalculated the
corresponding amortisation to ensure it was correct at
30 June 2017.
We deemed management's decision to amortise the
AD termination asset over five years as reasonable
given the timeframe of expected future economic
benefits and customer churn.
Other Information
Other information is financial and non-financial information in the annual report of the company which is
provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible for Other
Information in the annual report.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s Report. The
remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does
not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of
the Remuneration Report.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we 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.
We are required to report if we conclude that there is a material misstatement of this Other Information in
the Financial Report and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Directors’ Responsibilities for the Financial Report
The Directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1,
the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using a
going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to
cease operations, or have no realistic alternative but to do so.
financial report.
financial report.
internal control.
report.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. 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 and 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, individual or in aggregate, they
could reasonably be expected to influence the economic decisions of users taken on the basis of this
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
The procedures selected depend on the auditor’s judgement, including assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control.
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
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
We 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 consolidated entity’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 consolidated entity to cease to continue as a going concern.
We 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.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
59
59
60
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
2. Area Developer Termination payments (one-off transaction)
Why significant
How our audit addressed the key audit matter
During the year, KMEC entered into a confidential
We reviewed the AD termination agreement and
termination agreement with an Australian Area
ensured the asset was capitalised appropriately,
Developer ("AD”) which allows KMEC to regain the rights
traced payment to bank and we recalculated the
bestowed under this AD arrangement. For this right,
corresponding amortisation to ensure it was correct at
KMEC agreed to pay an upfront payment in full and
30 June 2017.
capitalised the purchase as an intangible asset at 15
December 2016. As at 30 June 2017 the written down
value of this intangible asset has been included as a part
of Note 10 in the financial statements under “Other
intangible assets”.
We deemed management's decision to amortise the
AD termination asset over five years as reasonable
given the timeframe of expected future economic
benefits and customer churn.
Other Information
Other information is financial and non-financial information in the annual report of the company which is
provided in addition to the Financial Report and the Auditor’s Report. The directors are responsible for Other
Information in the annual report.
The Other Information we obtained prior to the date of this Auditor’s Report was the Director’s Report. The
remaining Other Information is expected to be made available to us after the date of the Auditor’s Report.
Auditor’s Responsibilities for the Audit of the Financial Report
Our responsibility is to express an opinion on the financial report based on our audit. 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 and 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, individual or in 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 Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report.
The procedures selected depend on the auditor’s judgement, including assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the entity’s preparation of the financial report that gives a true
and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity’s internal control.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, the auditor does
not and will not express an audit opinion or any form of assurance conclusion thereon, with the exception of
the Remuneration Report.
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.
In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In
doing so, we 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.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness
of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial
report.
We are required to report if we conclude that there is a material misstatement of this Other Information in
the Financial Report and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Directors’ Responsibilities for the Financial Report
The Directors of the company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the Directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error. In Note 1,
the Directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial report complies with International Financial Reporting Standards.
In preparing the financial report, the Directors are responsible for assessing the consolidated entity’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using a
going concern basis of accounting unless the Directors either intend to liquidate the consolidated entity or to
cease operations, or have no realistic alternative but to do so.
We 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 consolidated entity’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 consolidated entity to cease to continue as a going concern.
We 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.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the consolidated entity to express an opinion on the financial report. We are responsible for
the direction, supervision and performance of the audit. We remain solely responsible for our audit opinion.
59
60
60
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
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.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore 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
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2017. In our opinion, the Remuneration Report of Kip McGrath Education Centres Limited for the year
ended 30 June 2017, 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.
PKF
CHARTERED ACCOUNTANTS
MARTIN MATTHEWS
PARTNER
9 AUGUST 2017
NEWCASTLE, NSW
61
61
Kip M
McGrath Edu
ucation Cent
tres Limited
d
Share
eholder info
ormation
30 Ju
ne 2017
The s
hareholder in
nformation s
et out below
w was applica
able as at 24
July 2017.
Distri
bution of eq
quitable sec
curities
Analys
sis of numbe
er of equitabl
le security ho
olders by siz
ze of holding:
:
1 to 1
,000
1,001
to 5,000
5,001
to 10,000
10,00
01 to 100,000
0
100,0
001 and over
r
Holdin
ng less than
a marketabl
e parcel
Equity
y security h
holders
Twent
ty largest qu
oted equity s
security hold
ders
The n
ames of the
twenty large
est security h
holders of qu
oted equity s
securities are
e listed below
w:
MR K
KIP MCGRAT
TH
CITIC
CORP NOMIN
NEES PTY L
LIMITED
KMEC
C SUPERAN
NNUATION P
PTY LTD (KM
MEC SUPER
RANNUATIO
N FUND A/C
C)
J P M
MORGAN NO
OMINEES AU
USTRALIA L
IMITED
MR S
STORM KIP M
MCGRATH
KIP M
MCGRATH IN
NVESTMENT
TS PTY LTD
D (MCGRATH
H FAMILY A/
/C)
BNP
PARIBAS NO
OMINEES P
PTY LTD (IB A
AU NOMS R
RETAILCLIEN
NT DRP)
BELS
SOV PTY LTD
D (TURNER
R FAMILY S/F
F A/C)
ENSI
STREET SU
UPERANNUA
ATION PTY
LTD (ENSI S
STREET RE
ETIREMENT
A/C)
EMER
RALD SHAR
RES PTY LIM
MITED (EME
RALD UNIT
A/C)
MR M
MATTHEW C
CHARLES PE
EEK
HETA
ALE PTY LIM
MITED (EAGL
LES NEST R
RETIRE FUN
ND A/C)
MR P
PETER SCAR
RF + MRS ID
DA SCARF (S
SCARF SUP
PER FUND A
ACCOUNT)
ENSI
STREET SU
UPERANNUA
ATION PTY
LTD (ENSI S
STREET RE
ETIREMENT
A/C)
WHIL
LEY CLOSE
INVESTMEN
NTS PTY LT
TD (SIMS FA
MILY SUPE
R FUND A/C
C)
MR B
BRIAN STEP
HAN SLEIG
H
MRS
JENNIFER A
ANNE BUCH
HANAN
MR R
ROBERT LUN
NDY (LUNDY
Y SUPER FU
UND A/C)
ENSI
TRADING C
COMPANY P
PTY LTD
MR J
UAN VAREL
LA + MS ANN
NE HENCHM
MAN
Unquo
oted equity s
securities
There
e are no unqu
uoted equity
securities, e
except the op
ptions as disc
closed in Not
te 30.
62
Numb
ber
of hold
ers
of ordin
nary
share
es
Num
mber
of ho
olders
of op
ptions
o
ver
ord
inary
sh
ares
Ord
dinary share
es
% of
f total
sh
ares
iss
sued
76
169
71
133
37
486
94
Number
held
11,200
0,499
10,505
5,539
4,000
0,000
1,594
4,559
1,333
3,959
1,000
0,000
881
,152
758
8,052
600
0,000
585
5,933
580
0,000
500
0,000
486
6,215
415
5,000
383
3,000
374
4,615
327
7,714
325
5,000
307
7,864
306
6,370
-
-
-
-
-
6
6
24.87
23.33
8.88
3.54
2.96
2.22
1.96
1.68
1.33
1.30
1.29
1.11
1.08
0.92
0.85
0.83
0.73
0.72
0.68
0.68
36,465
5,471
80.96
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889
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.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore 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
Responsibilities
Standards.
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2017. In our opinion, the Remuneration Report of Kip McGrath Education Centres Limited for the year
ended 30 June 2017, complies with section 300A of the Corporations Act 2001.
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
PKF
CHARTERED ACCOUNTANTS
MARTIN MATTHEWS
PARTNER
9 AUGUST 2017
NEWCASTLE, NSW
61
Kip M
Share
30 Ju
McGrath Edu
eholder info
ne 2017
ucation Cent
ormation
d
tres Limited
The s
hareholder in
nformation s
et out below
w was applica
able as at 24
July 2017.
Distri
Analys
bution of eq
sis of numbe
quitable sec
er of equitabl
curities
le security ho
olders by siz
:
ze of holding:
1 to 1
1,001
5,001
10,00
100,0
,000
to 5,000
to 10,000
01 to 100,000
0
r
001 and over
Holdin
ng less than
a marketabl
e parcel
ber
Numb
of hold
ers
of ordin
nary
es
share
mber
Num
olders
of ho
ptions
of op
ver
o
ord
inary
sh
ares
76
169
71
133
37
486
94
-
-
-
-
6
6
-
Equity
y security h
holders
Twent
The n
ty largest qu
ames of the
oted equity s
twenty large
security hold
est security h
ders
holders of qu
oted equity s
securities are
e listed below
w:
Ord
dinary share
% of
sh
iss
es
f total
ares
sued
held
Number
11,200
10,505
4,000
1,594
1,333
1,000
881
758
600
585
580
500
486
415
383
374
327
325
307
306
0,499
5,539
0,000
4,559
3,959
0,000
,152
8,052
0,000
5,933
0,000
0,000
6,215
5,000
3,000
4,615
7,714
5,000
7,864
6,370
36,465
5,471
24.87
23.33
8.88
3.54
2.96
2.22
1.96
1.68
1.33
1.30
1.29
1.11
1.08
0.92
0.85
0.83
0.73
0.72
0.68
0.68
80.96
MR K
CITIC
KMEC
J P M
MR S
KIP M
BNP
BELS
ENSI
EMER
MR M
HETA
MR P
ENSI
MR B
MRS
WHIL
MR R
ENSI
MR J
KIP MCGRAT
CORP NOMIN
C SUPERAN
MORGAN NO
STORM KIP M
MCGRATH IN
PARIBAS NO
SOV PTY LTD
STREET SU
RALD SHAR
MATTHEW C
ALE PTY LIM
PETER SCAR
STREET SU
BRIAN STEP
JENNIFER A
LEY CLOSE
ROBERT LUN
TRADING C
UAN VAREL
LIMITED
PTY LTD (KM
USTRALIA L
TH
NEES PTY L
NNUATION P
OMINEES AU
MCGRATH
TS PTY LTD
NVESTMENT
PTY LTD (IB A
OMINEES P
R FAMILY S/F
D (TURNER
ATION PTY
UPERANNUA
MITED (EME
RES PTY LIM
EEK
CHARLES PE
LES NEST R
MITED (EAGL
DA SCARF (S
RF + MRS ID
UPERANNUA
ATION PTY
HAN SLEIG
H
HANAN
ANNE BUCH
NTS PTY LT
INVESTMEN
Y SUPER FU
NDY (LUNDY
PTY LTD
COMPANY P
NE HENCHM
LA + MS ANN
MEC SUPER
IMITED
D (MCGRATH
AU NOMS R
F A/C)
LTD (ENSI S
RALD UNIT
RANNUATIO
N FUND A/C
C)
H FAMILY A/
RETAILCLIEN
/C)
NT DRP)
STREET RE
A/C)
ETIREMENT
A/C)
RETIRE FUN
SCARF SUP
LTD (ENSI S
ND A/C)
PER FUND A
STREET RE
ACCOUNT)
ETIREMENT
A/C)
MILY SUPE
R FUND A/C
C)
TD (SIMS FA
UND A/C)
MAN
Unquo
There
oted equity s
e are no unqu
securities
uoted equity
securities, e
except the op
ptions as disc
closed in Not
te 30.
62
62
Kip McGrath Education Centres Limited ABN 73 003 415 889 | Annual Report 2017
Kip M
Share
30 Ju
McGrath Edu
eholder info
ne 2017
ucation Cent
ormation
d
tres Limited
Subst
Subst
tantial holde
tantial holder
ers
rs in the com
mpany are set
t out below:
MR K
CITIC
KMEC
J P M
KIP MCGRAT
CORP NOMIN
C SUPERAN
MORGAN NO
TH
NEES PTY L
NNUATION P
OMINEES AU
LIMITED
PTY LTD (KM
USTRALIA L
MEC SUPER
IMITED
RANNUATIO
Ord
dinary share
% of
sh
iss
es
f total
ares
sued
held
Number
N FUND A/C
C)
11,200
10,505
4,000
1,594
0,499
5,539
0,000
4,559
24.87
23.33
8.88
3.54
Votin
The v
g rights
oting rights a
attached to o
ordinary shar
res are set ou
ut below:
Ordina
On a
share
ary shares
show of han
shall have o
nds every me
one vote.
ember prese
ent at a meet
ting in perso
on or by prox
xy shall have
e one vote a
nd upon a p
oll each
There
e are no othe
r classes of
equity secur
rities.
63
63
Annual Report 2017 | Kip McGrath Education Centres Limited ABN 73 003 415 889