ASX RELEASE
31 August 2018
Appendix 4E and Annual Report
The Directors of Site Group International Limited (“Site”) are pleased to announce the release of:
• Appendix 4E – Preliminary Final Report for the year ended 30 June 2018: and
• 2018 Annual Report
The attached annual report contains details of the achievements of the group over the last
financial year.
--- END ---
Media and Investors
Vernon Wills
Managing Director and CEO
+61 (7) 3114 5188
vern.wills@site.edu.au
Craig Dawson
CFO
+61 (7) 3114 5188
craig.dawson@site.edu.au
Principal & Registered Office: Level 4, 488 Queen St, Brisbane QLD 4000
t. +61 7 3114 5188
ABN: 73 003 201 910
(ASX: SIT)
www.site.edu.au
Appendix 4E
Preliminary Final report
________________________________________________________________________
Appendix 4E
Preliminary Final Report to the Australian
Stock Exchange
Name of Entity
ABN
Financial Year Ended
Previous Corresponding
Reporting Period
Site Group International Limited
73 003 201 910
30 June 2018
30 June 2017
Results for Announcement to the Market
$’000
Percentage
increase
/(decrease) over
previous
corresponding
period
Revenue and other income
Profit / (loss) after tax attributable to members
30,306
4% increase
(6,042) 88% Decrease of
loss
Net profit / (loss) for the period attributable to members
(6,042) 88% Decrease of
Dividends (distributions)
Final Dividend
Interim Dividend
Record date for determining entitlements to the
dividends (if any)
Amount per security
0.0 cents
0.0 cents
loss
Franked amount per security
0.0 cents
0.0 cents
Not applicable
________________________________________________________________________
Appendix 4E 1
Dividends
Date the dividend is payable
Record date to determine entitlement to the
dividend
Amount per security
Total dividend
Amount per security of foreign sourced
dividend or distribution
Details of any dividend reinvestment plans in
operation
The last date for receipt of an election notice
for participation in any dividend reinvestment
plans
NTA Backing
Net tangible asset backing per ordinary
security
Not applicable
Current Period
Previous
corresponding
period
(0.001) cents
(0.13) cents
Other Significant Information Needed by an Investor to Make an
Informed Assessment of the Entity’s Financial Performance and
Financial Position
Refer attached annual report
________________________________________________________________________
Appendix 4E 2
Appendix 4E
Preliminary Final report
________________________________________________________________________
Commentary on the Results for the Period
The earnings per security:
The current year result is a loss per share of (0.92) cents as compared to the prior year loss per
share of (9.73) cents.
The underlying result excluding the DET recovery in December and non-recurring impairment of
intangibles was a loss of $4.9m on revenues of $30.3m. The results continue to be impacted by
the distraction of the VET FEE-HELP (VFH) dispute, which requires ongoing substantial
commitment of group management resources and is incurring significant associated expenses. In
line with Financial Year 2017 results, without the VFH segment distraction to the business, the
group result would likely have been significantly improved. The results include an impairment
recorded against intangibles in the Wild Geese International business of $3,797,413 made at 30
June 2018.
Management have recently announced a focus on Site’s International operations where it is
enjoying significant customer growth and developing strong export growth for Australia.
For further review of results please refer to the Directors report on page 8 of the attached annual
report.
Returns to shareholders including distributions and buy backs:
Not applicable
Significant features of operating performance:
Refer to the Directors’ Report
The results of segments that are significant to an understanding of the
business as a whole:
Refer to Note 19 to the Accounts (Operating Segments)
Discussion of trends in performance:
Refer to the Directors’ Report
Any other factor which has affected the results in the period or which are
likely to affect results in the future, including those where the effect could
not be quantified:
Refer to the Directors’ Report
________________________________________________________________________
Appendix 4E 3
Appendix 4E
Preliminary Final report
________________________________________________________________________
Audit/Review Status
This report is based on accounts to which one of the following applies:
(Tick one)
The accounts have been audited
The accounts are in the process of
being audited or subject to review
If the accounts have not yet been audited or subject to review and are likely
to be subject to dispute or qualification, a description of the likely dispute
or qualification:
The accounts have been subject to
review
The accounts have not yet been audited
or reviewed
Not Applicable
If the accounts have been audited or subject to review and are subject to
dispute or qualification, a description of the dispute or qualification:
Not Applicable
Attachments Forming Part of Appendix 4E
Attachment # Details
1
Audited financial statements 30 June 2018
Signed By (Director/Company Secretary)
Print Name
Date
Vernon Wills
31 August 2018
________________________________________________________________________
Appendix 4E 4
Site Group International Limited
and Controlled Entities
ABN 73 003 201 910
Annual report – 30 June 2018
Table of Contents
Annual General Meeting ....................................................................................................................... 3
Managing Director and CEO Letter ..................................................................................................... 3
Corporate Directory .............................................................................................................................. 5
Directors’ Report ................................................................................................................................... 8
Principal Activity ................................................................................................................................. 10
Operating and Financial Review ........................................................................................................ 11
Dividends Paid .................................................................................................................................... 18
Corporate Governance Statement ..................................................................................................... 27
Auditor’s Independence Declaration ................................................................................................ 34
Statement of Comprehensive Income ............................................................................................... 35
Statement of Financial Position ........................................................................................................ 36
Statement of Changes in Equity ........................................................................................................ 37
Statement of Cash Flows ................................................................................................................... 38
Notes to the Financial Statements for the Year Ended 30 June 2018 ........................................... 39
Directors' Declaration ......................................................................................................................... 81
Independent Auditor’s Report ........................................................................................................... 82
Shareholder Information .................................................................................................................... 86
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 2 of 89
Annual General Meeting
The Annual General Meeting of the Company will be held at
Time:
11:00am
Date:
Thursday, 22 November 2018
Location:
488 Queen Street,
Brisbane QLD 4000.
Managing Director and CEO Letter
In 2018, Site Group International Limited’s business units have been resilient, delivering revenue growth
on the back of significant contract wins in the latter part of the financial year. The company is also
benefiting from its strategic development, particularly in international markets, during the financial year
which has generated results evident in post 30 June 2018 announcements.
There remains considerable distraction of management and operational resources due to ongoing
disputes with various Federal departments, driven by a challenging regulatory environment across the
vocational education and training sector, as well as the non-payment of outstanding monies by
Department of Education and Training (DET).
The underlying result excluding recovery from DET in December and non-recurring impairment of
intangibles was a loss of $4,914,472 on revenues of $30,306,134. The results continue to be impacted
by the distraction of the VET FEE-HELP (VFH) dispute, which requires ongoing substantial commitment
of group management resources and is incurring significant associated expenses.
In line with Financial Year 2017 results, without the VFH segment distraction to the business, the group
result would likely have been significantly improved. The results include an impairment recorded against
intangibles in the Wild Geese International business of $3,797,413 made at 30 June 2018.
The Australian businesses have been impacted heaviest by the dispute with the regulators and the
sledgehammer approach being taken to the industry with the National VET Regulator, the Australian
Skills Quality Authority (ASQA), cancelling RTO registrations at an alarming frequency and ratio. It has
also become apparent that ASQA is treating the private training sector differently the public sector
where, despite well publicised shortcomings of numerous TAFE’s, they continue to operate despite
significant failures. In our opinion the same treatment is clearly not being afforded to others, a large
number of who are being excessively and punitively penalised for comparatively minor and subjective
non-compliances.
In Australia despite the ongoing battle with ASQA in the Administrative Appeals Tribunal, most
customers have been very supportive based on the quality of training delivered and a wide-held view
of regulatory overreach in the training sector. In many instances Site is regularly audited by National
and Global Industry leaders who measure against objective Industry standards and hold Site in high
regard. This satisfaction is reflected in the domestic training revenue growth of Site Skills Group which,
while a positive result, has been substantially impacted as a result of the regulators activities.
Site continues to train up to 30,000 Australians every year with extremely high completion and student
satisfaction rates with the vast majority of trainees either in or entering into the workforce.
The Group continues to excel internationally, with strong relationships with Industry and foreign
governments who appreciate Site’s approached to competency focussed programs designed to satisfy
workforce needs around the world. Site’s nationalisation of workforce programs are having great effect
in countries such as PNG, Myanmar, Philippines and Saudi Arabia.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 3 of 89
Site has also recently announced a focus on its International operations where it is enjoying significant
customer growth and developing strong export growth for Australia. Earlier this year Australia`s recently
departed Prime Minister made recognition of Site`s contribution to ASEAN in his opening address and
Business Leaders address at the Sydney ASEAN Conference. Site’s CEO was an invited guest speaker
at this broadcast event.
I would like to thank our recently retired board members, former Chairman Darryl Somerville and
Director Joe Ganim, for their support and guidance through a tumultuous period, ongoing Directors
Peter Jones (Chairman of Site Group International Limited) and Nicasio Alcantara (Chairman of Site
Group’s International Operations), all management and staff and equally all shareholders for their
ongoing support through this period of instability.
Vernon Wills
Managing Director and CEO
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 4 of 89
Corporate Directory
Directors
Company Secretary
Chief Executive Officer
Principal registered office in Australia
Principal place of business
Peter Jones (Chairman)
Vernon Wills
Nicasio Alcantara
Craig Dawson
Vernon Wills
Site Group International Ltd.
Level 4, 488 Queen Street
Brisbane Qld 4000
Telephone: +61 7 3114 5188
Site Group International Ltd.
Level 4, 488 Queen Street
Brisbane Qld 4000
Telephone: +61 7 3114 5188
Share registry
Auditor
Solicitors
Bankers
Computershare Investor Services Pty Limited
Level 1, 200 Mary Street
Brisbane QLD 4000, Australia
Telephone: +61 7 3237 2100
Pitcher Partners
Level 38, 345 Queen Street
Brisbane QLD 4000, Australia
Telephone: +61 7 3222 8444
Hopgood Ganim
Level 8, 1 Eagle Street
Brisbane Qld 4000
Telephone: +61 7 3024 0000
National Australia Bank
Cnr. Adelaide and Creek Streets
Brisbane QLD 4000
Westpac Banking Corporation
45 Adelaide Street
Fremantle WA 6160
Stock exchange listing
Site Group International Limited shares are listed
on the Australian Securities Exchange (code: SIT)
Web site address
www.site.edu.au
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 5 of 89
[This page intentionally blank]
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 6 of 89
SITE GROUP INTERNATIONAL LIMITED
AND CONTROLLED ENTITIES
ABN: 73 003 201 910
Financial Report for the Year Ended
30 June 2018
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 7 of 89
Directors’ Report
Your Directors submit herewith the financial report of Site Group International Limited (the Company)
and its controlled entities (the Group) for the year ended 30 June 2018.
Directors
The directors in office at any time during or since the end of the financial year, together with their
qualifications and experience are:
Vernon Wills – Managing Director and CEO
Vern established Site to provide skills training and workforce planning solutions by initially developing
a 300,000m2 Philippines facility at the Expo Filipino site at Clark Freeport, after he identified a market
gap in Australian training providers delivering international training for industry and major projects.
Prior to Site, Vern has had an extensive career in investment and finance as well as building start up
and early stage companies such as Go Talk Ltd and Dark Blue Sea Ltd. Additionally he serves as a
Director of Eumundi Group Ltd (since September 2004) and was previously a director of the Greg
Norman Golf Foundation, CITEC, and Deputy Chair of the Queensland Government’s Major Sports
Facilities.
Nicasio Alcantara BA, MBA – Non-Executive Director
Mr Alcantara was appointed Director of the company on 12 October 2010 and has been a director of
Site Group Holdings Pty Ltd since June 2009. Mr Alcantara is an experienced director with over 40
years’ experience in both public and private companies and his diverse industry experience includes
manufacturing, banking & finance, property, information technology, agriculture and power & energy.
Mr Alcantara is currently a director of Alsons Corporation, Alsons Development & Investment
Corporation, C. Alcantara & Sons Inc., Lima Land Inc., Sarangani Agricultural Co. Inc, Seafront
Resources Corporation (appointed 1995), the Philodrill Corporation (appointed 1991), Indophil
Resources NL (appointed 29 December 2011) and BDO Private Bank Inc.
Mr Alcantara has also previously been Chairman and President of Alsons Consolidated Resources Inc.,
Iligan Cement Corporation, Alsons Cement Corporation, Northern Mindanao Power Corporation and
Refractories Corporation of the Philippines. He was also previously Chairman and Chief Executive
Officer of Petron Corporation and a director of Bank One Savings and Bancasia Capital Corporation.
Peter Jones ACA – Chairman and Non-Executive Director - Appointed director 29 May 2017
and appointed Chairman 30 June 2018
Mr. Jones is a Chartered Accountant and was formerly a founding director of Investor Group Limited
(now Crowe Horwath), a listed financial services company.
Mr Jones has a strong track record as a successful investor in public and private companies. He is
currently also a director of ASX listed Biotech Capital Limited (appointed 4 August 2015).
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 8 of 89
Directors’ Report continued
Darryl Somerville BCom, FCA – Chairman and Non-Executive Director - Resigned 30 June 2018
Mr Somerville was appointed Director of the company on 2 August 2011. He is a Chartered Accountant
and CPA and is a member of the Australian Institute of Company Directors.
Mr Somerville spent 23 years with PwC in Brisbane, including more than 19 years as a partner. For 8
years he was the Brisbane Office Managing Partner. His clients ranged from privately owned companies
through to multinationals in the manufacturing, mining, energy and resources and retailing industries.
He was a member of the firm’s National Board of Partners. Mr Somerville served a three-year term as
National Director of the Institute of Chartered Accountants from 2000 to 2003.
Listed public company positions held include Chairman of the Brisbane Broncos Ltd (24 February 2005
– 22 February 2011), Chairman of Brisbane based developer Devine Ltd (28 September 2005 – 31
October 2008) and Director of CMI Ltd (28 February 2012 – 29 June 2012). He has also chaired a
number of Queensland State Government Panels. He was Chairman of the Report on the State's
Electricity Networks (The Electricity Distribution and Service Delivery Report) and Chairman of the
Queensland Government’s Energy Competition Committee (which oversaw the introduction of Full
Retail Contestability for energy in the State). He also served as Chairman of the Premier of
Queensland's Awards for Export Achievement for 8 years.
Joseph Ganim LLB - Non-Executive Director - Resigned 30 June 2018
Mr Ganim was admitted as a solicitor of the Supreme Court of Queensland in 1970 and the High Court
of Australia.
A founding and former managing partner of Hopgood Ganim, a leading specialist Commercial Law firm
established in 1974 with over 300 personnel in offices in Brisbane and Perth and a representative office
in Shanghai. Mr Ganim retired in 2009 to pursue corporate interests but has continued involvement with
the firm as an active senior consultant.
With 45 years’ experience conducting complex corporate and commercial litigious matters, Mr Ganim
has been the lead negotiator and team leader in large corporate mergers and acted in the Supreme
Court of Queensland, the Federal Court of Australia and appeals to the High Court of Australia, as well
as appearing before various Tribunals and Inquiries. He is also a Supreme Court Approved
Mediator. He also served for a number of years as a member of the Litigation Reform Commission
Court Administration and Resource Division, which reviewed all facets of court practice and litigation.
Mr Ganim is currently Chairman of Eumundi Group Limited (appointed 4 August 1989). He sits on the
Boards of 7 active private companies and advises, both as a corporate lawyer and executor, with
respect to large and complex estates involving corporate structures.
Company Secretary
Craig Dawson BCom, ACA
Mr Dawson is the Chief Financial Officer of the Group. He brings extensive financial management
experience gained in ASX listed entities with both local and international operations in a variety of
industries including media, financial services, gaming and wagering and most recently in the rapidly
growing online sector.
Most notably, Mr Dawson was CFO of Wotif.com for over 4 years as the group experienced rapid
earnings growth, greatly extended its geographical reach and expanded its brands and products
through both organic and acquisition growth. Prior to that, Mr Dawson was Queensland General
Manager – Corporate Services at Tatts Group Limited heading up the finance and administration
divisions of Tatts Queensland operations.
Mr Dawson holds a Bachelor of Commerce and is a Chartered Accountant.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 9 of 89
Directors’ Report continued
Committee membership
As at the date of this report, the company had an Audit and Risk committee and a Nomination and
Remuneration committee of the board of directors. Members acting on the committees of the board
during the year and up to the date of this report were:
Audit and Risk Committee (AC)
• Peter Jones (c)
• Nicasio Alcantara
• Darryl Somerville – resigned 30 June 2018
•
Joseph Ganim – resigned 30 June 2018
Mr Jones and Mr Somerville are Chartered Accountants and Mr Alcantara and Mr Ganim have extensive
corporate experience and are qualified to serve on this Committee.
Nomination and Remuneration Committee (NRC)
• Peter Jones (c)
• Nicasio Alcantara
•
Joseph Ganim – resigned 30 June 2018
• Darryl Somerville – resigned 30 June 2018
(c) Designates the chairman of the committee.
Meetings of Committees
Vernon Wills
Darryl Somerville
Nicasio Alcantara
Joseph Ganim
Board
No.
7
Attended
No.
7
7
7
7
7
7
7
AC
No.
2
2
-
2
Attended
No.
2*
NRC
No.
1
Attended
No.
1**
2
-
2
1
-
1
1
-
1
Peter Jones
* ex officio attendance
** The CEO attended part of the Nomination and Remuneration Committee meeting before excluding himself from the meeting.
2
2
1
1
7
7
All directors were eligible to attend all meetings held.
Principal activity
The principal activity of the company during the period was the provision of training and education
services in Australia and internationally. The company is delivering workforce solutions across a variety
of industries to both retail and corporate clients. There has been no significant change in the principal
activities of the consolidated entity during the period.
The company has adopted expansion plans for its business via both organic growth and through
prudent acquisition activity with a view to diversifying funding sources and diversifying course and
program offerings.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 10 of 89
Directors’ Report continued
Operating and financial review
Group
Site business growth in revenue is demonstrated in the below graph.
Yearly Revenue
s
n
o
i
l
l
i
M
35
30
25
20
15
10
5
-
Jun 11
Jun 12
Jun-13
Jun-14
Jun-15
Jun-16
Jun-17
Jun-18
The company is also looking at expansion and optimisation opportunities across its existing international
assets and as such has announced that Mr Nicasio Alcantara will become Chairman of the international
subsidiaries including Site Group International Pte Limited and Site Group Holdings (the lease holder
of the 300,000 square metre facility in Clark, Philippines) in the group.
In line with this appointment, interests associated with Mr Alcantara have provided a financing facility
of $US4m to enable the continuation of the international growth strategy and provide working capital.
Repayment of funds drawn under the facility will be via cash or equity to be issued at the last issue price
of 4 cents per share subject to approval of shareholders.
Projected increases in revenues are expected internationally from the Philippines, the Kingdom of Saudi
Arabia, Papua New Guinea and Myanmar as well as new project opportunities in the Middle East, Africa
and South America which are expected to positively impact on 2019.
Revenue contribution and activity by each segment is illustrated in the two charts below. This highlights
the lower revenue from the energy services division in amongst the growing contribution from the other
segments of the continuing operation.
30 June 2018
Tertiary
Education,
$1,423,013 ,
5%
30 June 2017
Tertiary
Education,
$601,344 , 2%
Energy
Services,
$3,781,713 ,
12%
Site Skiils Training
- Domestic,
$14,284,041 , 47%
Site Skills
Training -
Int'l,
$10,789,008 ,
36%
Energy
Services,
$9,212,098 ,
30%
Site Skills
Training - Int'l,
$9,083,699 ,
29%
Site Skiils
Training -
Domestic,
$11,933,746 ,
39%
Gross Revenue by Segment June 2018 versus June 2017 (excludes eliminations)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 11 of 89
Directors’ Report continued
Operating and financial review continued
On 18 April 2018, the Australian Skills Quality Authority (ASQA) provided Site Skills Training (SST) with
a renewal of registration rejection decision following an audit. Following receipt of the decision, an
objection at the Administrative Appeals Tribunal (AAT) was lodged and an unconditional stay of the
decision was granted in May allowing SST to continue to enrol, train and graduate new and existing
students.
Site continues to expend significant operational resources ensuring that SST remains compliant to
achieve the favourable outcome in the AAT and focus on ensuring the best interests of clients and
students. SST continues to be impacted with customers postponing training until the appeal process is
finalised. The impact of a slowing domestic business in addition to the loss of a significant contract led
to a non cash impairment of intangibles being recorded of $3,797,413 for the year.
During the year, Site received a “Notice of Decision in Relation to Payments to a Provider” from the
Department of Education and Training (“DET”) in relation to the reconciliation payment due to
subsidiary, Productivity Partners Pty Ltd (“PP”). As a result, a payment of $4,869,113 was made to PP
by DET. This payment specifically related to certain students only, as determined by DET. DET has
further indicated that the remainder of the amount claimed by PP of $28,969,145 was not approved.
The DET correspondence has been received after a Deloitte audit and query process that has taken in
excess of 20 months to complete, with PP providing full cooperation throughout the process. PP
invested significantly in the delivery of VET FEE-HELP programs and Directors and Management
maintain the position that the remaining $28,969,145 for the reconciliation payment for the same period
remains due and payable under the relevant legislation then extant.
For the year ended 30 June 2018, Site Group International Limited reported a loss after tax from
continuing operations of $9,547,913 compared to $12,558,494 in the previous corresponding period.
For comparability with the trading result in the prior period, the below table shows the result for the
Group including the discontinued operations over the last 4 years.
Revenue and other income
Net profit / (loss)
add back
Depreciation and amortisation
Interest paid
Income tax (benefit) / expense
deduct
Interest income
EBITDA*
Non recurring items**
Impairment of intangibles
Write down / (reversal of write down) of DET debtor
Write back of contingent consideration
EBITDA before non recurring items
Operating cash inflow /(outflow)
2018
30,306,134
30-Jun
2017
Change 18-17
%
30-Jun
2016
29,213,400
3.7% 25,406,177
Change 17-16
%
15.0% 40,712,776
30-Jun
2015
Change 16-15
%
( 37.6%)
( 6,042,212)
( 50,466,491)
-
9,404,816
( 636.6%)
1,946,454
( 383.2%)
2,033,252
55,744
247,641
2,355,412
307,304
( 1,025,209)
( 13.7%)
( 81.9%)
( 124.2%)
2,855,346
263,047
782,430
( 17.5%)
16.8%
( 231.0%)
1,916,523
55,536
113,248
16,197
16,930
( 4.3%)
23,227
( 3,721,772)
( 48,845,914)
3,797,413
( 4,990,113)
23,570,460
33,944,396
-
-
( 4,914,472)
8,668,942
( 727,824)
( 93,722)
-
-
-
13,282,412
3,177,175
-
( 3,375,136)
( 27.1%)
( 467.7%)
31,530
4,000,231
-
-
( 1,713,324)
13,084,451
( 33.7%)
2,286,907
472.1%
( 4,835,274)
-
2,474,505
-
49.0%
373.7%
590.9%
( 26.3%)
-
* Earnings before interest, tax, depreciation and amortisation (EBITDA) is a non-IFRS measure which is readily calculated and
has broad acceptance and is used by regular users of published financial statements as a proxy for overall operating
performance. EBITDA is not an audited number.
**This a non-IFRS measure and is not an audited number.
Table 1 Financial Summary
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 12 of 89
Directors’ Report continued
Operating and financial review continued
The earnings before interest, taxes, depreciation and amortisation (EBITDA) was a loss of $3,721,772
compared to the $48,845,914 in the prior corresponding period. Excluding non-recurring items means
the group’s trading result was an EBITDA loss of $4,914,472 compared to the previous period’s EBITDA
of $8,668,942.
Site Skills Training - Domestic
Site Skills Training (SST) is an Australian Registered Training Organisation with six large training
facilities across Australia, in Western Australia, Northern Territory and Queensland. These Australian
facilities with a combined footprint of approximately 33,500sqm have become hubs for some of
Australia’s largest projects in Mining, Construction and Oil and Gas including; Curtis Island Coal Seam
Gas (CSG) to Liquefied Natural Gas (LNG) projects; Western Australia Northwest Shelf LNG projects;
and Darwin Onshore and Offshore LNG projects; and effectively most major mine project sites across
Western Australia, Northern Territory and Queensland.
The segment achieved a 20% increase in revenue to $14,284,041 in the 12 months to June 2018,
compared with $11,933,746 in 2017, which was a solid performance in the face of subdued conditions
and customer reaction to the ongoing regulatory actions. EBITDA was a loss of $189,964 compared to
an EBITDA loss of $605,107 in the previous year reflecting the ongoing compliance and legal costs
incurred within this division.
In five years of operation, SST has delivered over 100,000 accredited programs to people who are
either currently employed, seeking employment or seeking upskilling opportunities predominately in key
sectors including mining, construction, logistics and energy.
Through this period training has resulted in an over 80% completion rate, with approximately 88% of
students identifying as being in employment, and a further 11% seeking employment. This training has
been delivered on behalf of over 4,000 companies and their divisions.
In addition to its corporate customers, SST delivers training to individuals using Western Australia,
Queensland and Northern Territory subsidised training regimes. In Queensland, Vocational Education
and Training (VET) in Schools students has expanded and will provide further growth in the next
financial year.
On 18 April 2018, the Australian Skills Quality Authority (ASQA) provided SST with a renewal of
registration rejection decision following an audit.
The ASQA audit consisted of a review of 8 training products and ~40 students out of over 200 training
products on scope and an annual training delivery to over 25,000 students. The final Audit Report issued
by ASQA in support of the decision was dated 28 June 2017 and only provided to SST in April 2018. In
that time period, SST delivered over 30,000 units of competency to over 15,000 individual Australians,
with a greater than 90% completion rate and more than 80% of those Australian students in
employment.
Following receipt of the decision, an objection at the Administrative Appeals Tribunal (AAT) was lodged
and an unconditional stay of the decision was granted in May allowing SST to continue to enrol, train
and graduate new and existing students.
SST continues to expend significant operational resources ensuring that the company remains
compliant to achieve a favourable outcome in the AAT and focus on ensuring the best interests of clients
and students. The business continues to be impacted with customers postponing training until the
appeal process is finalised.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 13 of 89
Directors’ Report continued
Operating and financial review continued
Site Skills Training – International
Site Skills Training – International division provides training and competency assurance services to
organisations and governments in countries where local workforces require additional skills to meet
global standards. The segment, based at Site's major training facility in Clark Freeport Zone near Manila
in the Philippines, delivered a 19% increase in revenue to $10,789,008 in the 12 months to June 2018,
compared with $9,083,669 in the prior year. EBITDA was $698,936 compared with an EBITDA of
$535,485 in the prior year.
To date SST has provided education and training services to countries including the Philippines, PNG,
Myanmar, Saudi Arabia, United Kingdom, China, Singapore, Malaysia and has delivered services to
governments and companies in locations including Timor-Leste, UAE, Azerbaijan, Africa and others.
Site is currently negotiating to take its training services further abroad with expansion planned in the
Middle East, Africa and South America.
SST’s flagship international facility in Clark Freeport Zone, Philippines, is a 300,000sqm operation with
over 1,000 beds and acts as an Australian export training hub servicing industry and government clients
throughout the Asia-Pacific region. The facility hosts Oceana Gold`s underground mine, G.E.`s gas
turbine and rotational motors and the build out of Site`s Safe Live Process Plant (SLPP). The sales
funnel for on-campus delivery for Clark continues to support the growth expectations of the company.
The company recently held the graduation of the first 170 trainees at National Construction Training
Center, Nairiyah, Kingdom of Saudi Arabia. The college operates in conjunction with AlAjmi Company
of Saudi Arabia and Canadian Petroleum. The trainees span five trades and now enter careers as
electricians, welders, pipefitters, safety officers and instrumentation technicians. These are the first 170
graduates with Site contracted to graduate 1800 students over the next 2.5 years with the college now
at capacity of 600 students.
Further long term contracts have commenced with Amec Foster Wheeler requiring Site to provide
services including Procedures Qualified Record (PQR) and Welders Qualification Testing (WQT) at the
Clark facility. In addition, Site has been contracted to provide training and assessment services of the
manpower to be deployed to Brunei on this project.
Energy Services
The Energy services segment incorporating the Wild Geese international business in Perth and the
internationally based Site Group International Energy division (“SGI”) provides specialist training
services to the oil and gas industry including workforce design and identification, skills training and
competency assessment and assurance.
Revenue for the 12 months for the business dropped to $3,781,713 (2017: $9,212,098) with an EBITDA
loss of $803,283 (2017: EBITDA of $1,115,571).
The Energy services segment result was significant impacted by the delay in key international projects
now expected to commence in FY19 and the reduced number of consulting hours completed
domestically by Oil and Gas Specialist Wild Geese International.
Wild Geese International’s involvement with the Queensland Natural Gas Exploration and Production
Industry forum for the delivery of Queensland wide Industry Safety Inductions has provided services to
growing numbers of contractor and operator companies in Queensland.
The Site Group International Energy division’s Singapore and Malaysian operation continue to develop
their relationship with the Singapore Government Agency SkillsFuture Singapore through the continual
development of the National Skills Framework.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 14 of 89
Directors’ Report continued
Operating and financial review continued
In addition a new contract has been awarded with FieldCore, a GE Company, for the development of
their Global Competence Framework, comprising job competence profiles, job task profiles,
performance and assessment criteria, covering their global technical workforce including the Africa,
Asia/ Australia, Europe, North and South America continents. FieldCore is the field technical services
company for GE Power globally. The project covers a target workforce of over 10,000 technical
personnel including technicians, supervisors and management levels working in Power Services, Aero,
Oil and Gas, Renewables sectors.
During the year construction commenced on the latest Safe Live Process Plant to be built and remain
at Clark opening up significant opportunities for training and competency assessment initialling targeting
University Engineering students from around the world to achieve adequate and meaningful
professional experience stipulated by Work Integrated Learning requirements of accredited engineering
programs.
Tertiary Education
This segment provides tertiary education for students seeking to develop careers in a range of different
disciplines. Students can choose from a range of diploma and certificate level courses at Site's
campuses in Australia.
This division reported an increase in revenue of 137% to $1,423,013 in 2018, up from $601,322 in 2017.
EBITDA improved to a loss of $243,958 compared to an EBITDA loss of $1,048,455 in 2017, as the
scale of the business improves on the back of increased student number and enrolments
International student numbers continue to grow with over 200 current enrolments in CRICOS registered
courses. Future revenues from existing students is circa $2.3m. Revenues are expected to continue to
grow during the financial year as international students take the opportunity to study engineering and
manufacturing technology courses with Site Institute. Export market networks have been established
for receiving inbound students from countries across Asia, Americas and Europe, with the CRICOS
division now training students from countries including Argentina, Brazil, Chile, Colombia, Mexico, Peru
and South Korea.
The investment in a range of TESOL courses and conferences, and a number of strategic alliances are
expected to further grow revenues with China a key market.
Cash Position
At 30 June 2018, the company had cash at bank of $1,533,437. Given the expected operating results
in the FY19 financial year the company has sufficient funding to meet its medium term funding
requirements.
Risks
Risk management is overseen by the Audit and Risk Committee for the Group via the maintenance and
review of a risk register.
The following sets out a summary of some of the key risks relevant to the Company and its operations:
Risk
Details
Regulatory risk
The Group operates in a highly regulated market and the Group is regulated by
the Australian Federal and State Governments and the Philippine Government.
Failure to meet regulatory requirements may impact materially on the business.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 15 of 89
Risk
Details
Financing
Sovereign risk
The ability to implement its business strategy may be dependent upon the
Group’s capacity to raise additional capital. There is a risk that the Group may
not be able to secure such funding on satisfactory terms or at all.
The Group has significant operations in the Philippines. Those operations are
potentially subject to a degree of political risk and civil disobedience, although
the location of Clark Education City within the Clark Freeport Zone helps
mitigate such risks.
Cultural unrest
Any cultural unrest or perceived cultural unrest in the location of the campuses
may result in decreased client interest.
Competition
The market for education services in Australia and worldwide is highly
competitive and the group is likely to encounter strong competition from other
entities as well as other countries for training and education.
Industry downturn The industries to which the Group provides services may be affected by factors
outside the Group’s control.
Limited operating
history
Site’s business model is relatively new and Site is yet to generate recurring
profits from its group activities. The Group will be subject to all of the business
risks and uncertainties associated with any developing business enterprise.
Material contracts The Group has entered into various contracts which are important to the future
of the Group. Any failure by counterparties to perform their job, or obligations
could have an adverse effect on the Group.
CDC lease
The Group has entered a long term lease with Clark Development Corporation
(CDC). There are a number of circumstances in which the CDC lease may be
terminated (subject to compliance with provisions enabling certain breaches to
be remedied) by CDC in which case Site does not have any rights to
compensation or reimbursement for funds expended on the leased land,
improvements and moveables on the leased property pass to CDC on
termination. Such termination may occur where Site has breached a provision
of the CDC lease or where there is an insolvency event. The CDC lease may
also be terminated in the event of any governmental expropriation of the
leased property. In the event that the CDC lease was terminated, Site would no
longer be in a position to operate its Philippines facility which would have
significant impact on the Group and the Group’s ongoing operations.
Currency
Some of Site’s revenue streams and expenses are denominated in currencies
other than the Australian Dollar. It is possible that foreign exchange rates
could move in a manner which would be unfavourable to the Company.
Large holdings by
some
shareholders
The two most significant existing shareholders (and their associates) have
combined holdings of approximately 30% of the shares which may impact on
liquidity in the public market for the sale of shares which may adversely affect
the market price.
Key employees
A small number of key employees are responsible for the day to day and
strategic management of the Group. The Company has sought to mitigate the
risk associated with this structure through entering service and employment
agreements.
Natural
catastrophe
The Philippines has experienced a number of major natural catastrophes over
the years, including typhoons, drought, volcanic eruption and earthquakes.
There can be no assurance that the occurrence of such natural catastrophes
will not materially disrupt the Group’s operations.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 16 of 89
Risk
Details
Foreign
judgements
Material
arrangements
Geographic
concentration
2019 Outlook
Whilst there are procedures for recognising foreign laws and judgements in the
Philippines, the Philippine courts may reject the applicability of foreign law or
judgment when the foreign law, judgment or contract is contrary to a sound and
established public policy of the forum. Additionally, Philippine prohibitive laws
concerning persons, their acts or property, and those which have for their
object public order, public policy and good customs shall not be rendered
ineffective by laws or judgments promulgated, or by determinations or
conventions agreed upon in a foreign country. Accordingly, the enforcement of
rights of the Group within the Philippines with respect to foreign judgments and
laws may be adversely affected by observance of Philippine procedural laws.
The Group has and expects to continue to enter into arrangements which are
important to the future of the Group. It may be the case that these
arrangements are non-binding and therefore unenforceable. The Group is also
reliant upon third parties maintaining appropriate qualifications and
accreditations and to the extent that these are not maintained, there may be an
adverse impact on the Group.
The Group’s expansion plans include the Philippines, Western Australia,
Northern Territory and Queensland as well as potentially other national and
international jurisdictions. If there are circumstances which impact negatively
on these jurisdictions, this may adversely affect the Group’s continuing
operations.
As the company looks at its strategic direction, it is clear the Board believe the substantial future and
growth for Site is in its international segments.
The recently announced contract wins demonstrate the growth opportunities for Site in its international
segments. These are expected to continue into FY19, as the group focuses on the expansion and
optimisation opportunities across it international business and assets.
Directors’ shareholdings as of 30 June 2018
Director
Vernon Wills
Peter Jones
Nicasio Alcantara
Shares
124,395,630
56,819,466
9,371,325
Significant changes in state of affairs
During the year the group was involved in the following significant transactions:
Capital Management
• During the year the company conducted a share purchase plan and in September through to
December 2017 issued 62,500,000 shares at 4 cents to existing and new shareholders
through the allocation of the shortfall.
In December 2017 and in January 2018, the company completed a buy back of shares issued
under the employee share plan and milestone incentives with 12,552,142 shares bought
back.
•
Discontinued Operation
• Productivity Partners received a reconciliation payment of $4,869,113 from DET in December
2017 and continues to pursue collection of the outstanding balance of $28,969,145.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 17 of 89
Directors’ Report continued
After balance date events
Other than as disclosed in this report, there has been no significant events post balance date.
Dividends paid
There have been no dividends paid.
Environmental issues
The Group’s operations are not regulated by any significant environment regulation under a law of the
Commonwealth or of a State or Territory.
Share options
As at the date of this report there were no unissued shares under options.
In November 2011 the Shareholders approved the establishment of an Employee Share Plan that
would enable employees, directors and eligible associates to subscribe for shares in the Company.
Under the terms of the plan an eligible person is offered shares in the Company at a price determined
by the board ($0.20 per share) with a corresponding interest free loan to assist the person to
subscribe for the shares. The shares are escrowed in two tranches with 50% being escrowed for a
minimum of 12 months and 50% being escrowed for a minimum of 24 months. Subsequent to these
minimum restriction periods, the shares are available for release from escrow on the repayment of the
loan, and subject to continuation of employment (or acting as an associate or director) at the time of
repayment.
As at 16 August 2018, there are 10,265,109 ordinary shares subject to escrow restrictions.
Indemnification and insurance of Directors and Officers
During the financial year, the Company paid premiums for directors’ and officers’ liability insurance in
respect of Directors and officers, including executive officers of the Company and Directors, executive
officers and secretaries of its controlled entities as permitted by the Corporations Act 2001. The terms
of the policy prohibit disclosure of details of the insurance cover and premiums.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Pitcher Partners,
as part of the terms of its audit engagement agreement against claims by third parties arising from the
audit (for an unspecified amount). No payment has been made to indemnify Pitcher Partners during or
since the financial year.
Non-audit services
Non-audit services were provided by the previous entity’s auditor, Ernst & Young. The Directors are
satisfied that the provision of non-audit services is compatible with the general standards of
independence for the auditor imposed by the Corporations Act 2001. Refer to note 6 Auditor’s
Remuneration in the financial reports for details and amounts for the provision of non-audit services.
Vernon Wills
Director
31 August 2018
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 18 of 89
Directors’ Report continued
Remuneration Report (audited)
This remuneration report for the year ended 30 June 2018 outlines the remuneration arrangements of
the Site Group International Limited (the Company) and its controlled entities (the Group) in
accordance with the requirements of the Corporations Act 2001 (the Act) and its regulations. This
information has been audited as required by section 308(3C) of the Act.
The remuneration report details the remuneration arrangements for key management personnel
(KMP) who are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the Company and the Group, directly or indirectly, including any
director (whether executive or otherwise) of the parent company.
For the purposes of this report, the term “executive” includes the Chief Executive Officer (CEO),
executive directors and other senior executives of the Group.
Nomination and Remuneration Committee
The directors established a Nomination and Remuneration Committee in 2012 and have agreed a
charter and process. The committee convened once during the 2018 financial year with final
discussions about remuneration or appointments being approved by the full board. The Nomination
and Remuneration committee comprises two independent Non-Executive Directors (NEDs).
The Nomination and Remuneration Committee has delegated decision making authority for some
matters related to the remuneration arrangements for NEDs and executives, and is required to make
recommendations to the board on other matters.
Specifically, the board approves the remuneration arrangements of the CEO and other executives.
The board also sets the aggregate remuneration of NEDs, which is then subject to shareholder
approval, and NED fee levels.
The board did not seek advice from external remuneration consultants during the year.
The remuneration of the Executive Directors and Non-Executive Directors is set by the Chairman of
Directors and ratified by the Board of Directors.
Directors
The following persons were directors of the Company during the financial year:
• Darryl Somerville – Chairman and Non-Executive Director (Resigned 30 June 2018)
• Vernon Wills – Managing Director and Chief Executive Officer
• Nicasio Alcantara – Non-Executive Director
•
Joseph Ganim – Non-Executive Director (Resigned 30 June 2018)
• Peter Jones – Non-Executive Director (Chairman from 30 June 2018)
Executives (other than directors) with the greatest authority for strategic direction and
management
The following persons were the executives with the greatest authority for the strategic direction and
management of the Group (“specified executives”) during the financial year;
• Craig Dawson – Chief Financial Officer
• Blake Wills – Chief Operating Officer (Resigned 30 November 2017)
These executives were also considered the Key Management Personnel of the Group.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 19 of 89
Directors’ Report continued
Remuneration Report (audited) continued
Remuneration of directors and executives
Principles used to determine the nature and amount of remuneration
The objective of the Company’s executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered.
Relationship between remuneration and financial performance
The Group is still in the build phase and has incurred additional costs during the build out. Therefore,
there is no direct relationship between the Group’s financial performance and either the remuneration
of directors and executives or the issue of shares and options to the directors and executives.
Remuneration is set at levels to reflect market conditions and encourage the continued services of
directors and executives.
Executive and non-executive directors
Fees and payments to executives and non-executive directors reflect the demands which are made
on, and the responsibilities of the directors. Executive and non-executive directors’ fees and
payments are reviewed annually by the Board.
Directors’ fees
There were Directors’ fees paid during the year to the NEDs with the executive director receiving a
fixed salary of a full-time employee.
Executive pay
The executive pay and reward framework has the following components:
• Base pay benefits
• Other remuneration such as fringe benefits and superannuation
• STI payable based on predetermined KPI’s
• Eligibility to participate in the Employee Share Plan
The combination of these comprises the executive’s total remuneration.
Base Pay
Base pay is structured as a total employment cost package which is delivered in cash. Executives are
offered a competitive base pay that comprises the fixed component of pay. Base pay for senior
executives is reviewed annually. An executive’s pay is also reviewed on promotion. There are no
guaranteed base pay increases fixed in any senior executives’ contracts.
Retirement benefits
Retirement benefits are delivered under a range of different superannuation funds. These funds
provide accumulated benefits. Where applicable, statutory amounts are contributed to super funds for
all Australian based Directors and Executives.
Executive contractual arrangements
As Non-Executive Directors are not employees of the company, there are no contractual agreements.
Vernon Wills is employed as the Chief Executive Officer through a services contract with Wayburn
Holdings Pty Limited on consistent terms with other executives. No sign on shares were granted.
Escrowed shares are issued at the discretion of the Remuneration Committee from time to time.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 20 of 89
Directors’ Report continued
Remuneration Report (audited) continued
Remuneration arrangements for other executives are formalised in employment agreements. Details
of these contracts are provided below. All other executives have contracts with unspecified ending
dates. The contracts are continuing unless terminated by either party. Standard Key Management
Personnel termination provisions are as follows:
Employer-initiated termination
Notice period Payment in lieu of notice
3 months
3 months
Termination for serious misconduct
None
Employee-initiated termination
3 months
None
3 months
Details of remuneration
Details of the remuneration of each director of the Company and each of the two specified executives
of the Group, including their personally-related entities, are set out in the following tables.
Directors
The board seeks to set NED fees at a level which provides the Group with an ability to attract and
retain NEDs with the highest calibre, whilst incurring a cost which is acceptable to shareholders.
The Group’s constitution and ASX listing rules specifies the NED maximum aggregate fee pool shall
be determined from time to time at a general meeting. The latest determination was at the 2010 AGM
held on 22 November 2010 when shareholders approved an aggregate fee pool of $350,000 per year.
NED fees consist of base fees and committee fees recognising the additional time commitment
required by NEDs who serve on Board committees. The NEDs may be reimbursed for expenses
reasonably incurred for attending to the Group’s affairs. NEDs do not receive retirement benefits
beyond applicable superannuation contributions.
Short Term Benefits
Cash Salary Directors Fees
Non- monetary
benefits
$
$
Post-
employment
Super-
annuation
$
Long Term
Benefits
Long Service
Leave
$
Share-based Payments
Options
Shares
$
$
Shares to be
issued
$
Total
$
-
77,914
40,270
-
- - - - -
- - - - -
440,270
77,914
60,000
-
5,700 - - - -
65,700
60,000
-
5,700 - - - -
65,700
65,700
-
- - - - -
65,700
400,000
263,614
40,270
11,400 - - - -
715,284
2018
Name
Vernon Wills
Nicasio Alcantara
Darryl Somerville1
Joseph Ganim2
Peter Jones
Total
1Resigned June 2018
2Resigned June 2018
$
400,000
-
-
-
-
2017
Short Term Benefits
Name
Cash Salary Directors Fees
$
$
400,000
-
-
-
-
-
79,609
7,569
15,923
-
400,000 103,101
Vernon Wills
Nicasio Alcantara
Darryl Somerville
Joseph Ganim
Peter Jones*
Total
* Appointed May 2017.
Non- monetary
benefits
$
43,886
-
-
-
-
43,886
Post-
employment
Super-
annuation
$
Long Term
Benefits
Long Service
Leave
$
Share-based Payments
Options
Shares
$
$
Shares to be
issued
$
- - - - -
- - - - -
219 - - - 52,212
1,096 - - - 42,981
- - - - -
1,315 - - - 95,193
Total
$
443,886
79,609
60,000
60,000
-
643,495
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 21 of 89
Directors’ Report continued
Remuneration Report (audited) continued
Specified Executives of the Consolidated Entity
2018
Short Term Benefits
Name
Cash Salary Non- monetary
Blake Wills1
Craig Dawson
Total
1Resigned November 2017
$
63,942
297,973
361,915
$
2,846
7,891
10,737
2017
Name
Short Term Benefits
Cash Salary Non- monetary
Blake Wills
Craig Dawson
Total
$
175,205
273,973
$
Post-
employment
Super-
annuation
$
Long Term
Benefits
Long Service
Leave
$
6,074
26,027
32,101
1,006
5,247
6,253
Termination
Benefits
Share-based Payments
Options
Shares
$
33,654
-
33,654
$
-
-
-
$
-
-
-
Total
$
107,522
337,138
444,660
Post-
employment
Super-
annuation
$
Long Term
Benefits
Long Service
Leave
$
Termination
Benefits
Share-based Payments
Options
Shares
$
$
$
Total
$
5,856
5,856
16,625
26,027
-
-
-
-
-
-
-
-
197,686
305,856
449,178
11,712
42,652
-
-
-
-
503,542
Short Term Incentive (STI)
Under the STI plan, executives have the opportunity to earn an annual incentive award which is
delivered in cash or shares at the discretion of the Remuneration Committee. The STI recognises and
rewards short term performance. The STI award is determined after the end of the financial year
following a review of performance over the year against the STI performance measures.
Group EBITDA and business unit EBITDA are the measures against which management and the
remuneration committee assess the short term financial performance of the Group. Each of V. Wills,
B. Wills and C. Dawson had a maximum STI opportunity of 30% of their fixed remuneration. For FY18
0% was earned and 100% forfeited because the service criteria was not met.
Director and Key Management Personnel Options and Rights Holdings
There were no options over ordinary shares held during the financial year by each KMP of the Group.
Director and Key Management Personnel participation in the Employee Share Plan
In November 2011 the Shareholders approved the establishment of an Employee Share Plan that
would enable employees, directors and eligible associates to subscribe for shares in the Company.
Under the terms of the plan an eligible person is offered shares in the Company at a price determined
by the board ($0.20 per share for all shares issued to date under the plan) with a corresponding
interest free loan to assist the person to subscribe for the shares. The shares are escrowed in two
tranches with 50% being escrowed for a minimum of 12 months and 50% being escrowed for a
minimum of 24 months. Subsequent to these minimum restriction periods, the shares are available for
release from escrow (i.e. vested and exercisable option) on the repayment of the loan, and subject to
continuation of employment (including acting as an associate or director) at the time of repayment.
For accounting purposes these shares are treated as if these were share options, as whilst the shares
have been issued to the employee their rights to access the shares are subject to both a time based
requirement (continued employment to escrow dates) and valuation uncertainty (share price exceeds
issue price at date of escrow release). Accordingly, shares issued under the plan are valued using a
Black Scholes Option Valuation model with the expense being recognised over the escrow period as
a share based payment.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 22 of 89
Directors’ Report continued
Remuneration Report (audited) continued
The number of ordinary shares held by each KMP of the group under the plan is as follows:
Name
Vern Wills
Balance
1 July
2017
2,000,000
Granted
as
remuneration
-
Nicasio Alcantara
1,000,000
Darryl Somerville
1,000,000
Blake Wills
500,000
Craig Dawson
1,000,000
Total
5,500,000
-
-
-
-
-
Shares
sold
Forfeited
Balance
30 June 2018
Tradable
Escrowed
Vested and
Exercisable
-
-
-
-
-
-
-
-
-
2,000,000
1,000,000
1,000,000
(500,000)
-
-
1,000,000
(500,000)
5,000,000
-
-
-
-
-
-
2,000,000
2,000,000
1,000,000
1,000,000
1,000,000
-
-*
-
1,000,000
1,000,000
5,000,000
4,000,000
*shares forfeited upon resignation of director at 30 June 2018
The minimum escrow periods for all shares held by KMP in the table above expired prior to the start
of the comparative period, and the shares therefore represented vested and exercisable options at
both 30 June 2018 and 30 June 2017. No expenditure was recognised under the Employee Share
Plan for KMP in either the current or comparative period, and there were no grants of shares under
the Employee Share Plan during the current or comparative periods.
Director and Key Management Personnel Share Holdings
The number of ordinary shares held by each KMP, other than shares under the Employee Share plan,
is as follows:
Name
Vern Wills
Balance
1 July 2017
101,020,630
Granted
as
remuneration
-
Nicasio Alcantara
-
Darryl Somerville
4,392,188
Joseph Ganim
8,796,957
Peter Jones
45,194,466
Blake Wills
Craig Dawson
1,238,523
1,000,000
-
-
-
-
-
Shares
sold
Capital
Raising#
Settlement of
Financial
Liabilities^
Balance
30 June 2018
-
-
-
-
-
-
2,625,000
18,750,000
122,395,630
-
8,371,325
8,371,325
375,000
375,000
1,722,988
6,490,176*
1,492,218
10,664,175*
375,000
11,250,000
56,819,466
-
-
-
-
1,238,523*
1,000,000
Total
161,642,764
-
-
3,750,000
41,586,531
206,979,295
* Resigned during the period. Closing balance represents the shareholding as at the date of resignation.
# During the year the company conducted a share purchase plan and in September through to December 2017 issued 62,500,000 shares at 4 cents to
existing and new shareholders through the allocation of the shortfall. Represents participation by Directors in the capital raising as approved at the EGM of
the Company on 15 September 2017.
^ Shares issued at $0.04 per share in settlement of loans payable to Directors, as approved at the EGM of the Company on 15 September 2017.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 23 of 89
Directors’ Report continued
Remuneration Report (audited) continued
Executive Remuneration Outcomes for 2018
As noted earlier the company is actively developing its core business in Asia and Australia. Executive
Remuneration is targeted at attracting and retaining quality people to lead the Company through this
phase and on to profitability. The Company incurred losses since listing until 2015 however there are
a number of metrics that may be used to judge the effectiveness of the leadership team during this
period.
Share price performance
The graph above illustrates the relative performance of the Company share price over the past 12
months. The blue line is the performance of the small ordinaries index – in comparative terms the
Company’s share price has been significantly negatively impacted due to the delays in settlement of
the Department of Education debtor and the regulatory actions currently in progress.
Revenue growth
The following table details reported revenue (excluding the discontinued operations) of the core
business for the past five years:
Total revenue
Growth %
2018
2017
30,306,134 29,213,400
4%
15%
2016
25,406,177
31%
2015
19,467,233
12%
2014
17,314,375
34%
2013
12,960,549
242%
These results are consistent with the company’s strategy of growing revenue in the vocational training
and assessment field.
Net profit/ (loss) and earnings/ (loss) per share
The following table details the net profit/ (loss) and earnings/(loss) per share including the
discontinued operation for the past six years:
Total profit / (loss)
Change %
Earnings/(loss) per
Share (cents)
Share price at year
end
2018
(6,042,212)
88%
2017
(50,466,491)
(637%)
2016
9,404,816
383%
2015
1,946,454
130%
2014
(6,487,117)
(11%)
2013
(5,821,405)
25%
(0.92)
$0.025
(9.50)
$0.04
1.84
$0.19
0.40
$0.35
(1.81)
$0.15
(1.92)
$0.119
The year on year improvement of gain/(loss) per share until 2016 and the earnings per share
achieved reflects improved revenue from the expansion of facilities and also incorporates significant
integration of acquired businesses. The impact of the impairments reported in 2017 and 2018, closure
of the PP business and action currently taken by the regulator has significantly impacted the share
price and earnings per share. The leadership team are focused on continuing to grow the core
business revenue, controlling costs and growing earnings.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 24 of 89
Directors’ Report continued
Remuneration Report (audited) continued
Approval of the FY17 Remuneration Report
At the Annual General Meeting of the Company on 23 November 2017, the FY17 remuneration report
was adopted by the shareholders with a vote of 99.97% in favour.
Loan from Director related entity – Wayburn Holdings Pty Ltd
During the current and comparative periods, the group made use of an unsecured loan facility with
Wayburn Holdings Pty Ltd, a company associated with Managing Director and CEO Mr Vernon Wills.
The loan facility limit was $2.35m to 31 December 2016, and $1.32m from that point repayable on the
earlier of collection of the receivable from the Commonwealth Department of Education and Training,
or February 2018. To date, the revised terms have not been agreed for the facility and the outstanding
balance as disclosed below is repayable at call. Interest is charged on the loan at a fixed rate of 7%
per annum.
Movements in the loan balance during the year are as follows:
Opening Balance
Drawdowns
Interest accrued during the year
Principal repayment through issuance of shares*
Principal Repayments
Closing balance
2018
$
580,842
-
25,900
(246,000)
(93,820)
266,922
2017
$
2,464,308
-
-
(1,776,991)
(106,475)
580,842
*Details of shares issued in settlement of outstanding loan amounts are as follows:
Date
Share
Number of
Shares
Price
3,667,825 $0.28 1,026,991
750,000
246,000
24/11/2016
30/06/2017 18,750,000 $0.04
6,150,000 $0.04
24/09/2017
Amount
$
The issuance of shares on 24 September 2017 includes subscription of shares under the share
purchase plan described above by related entities of Vernon Wills and third parties where the
subscription price was funded by Wayburn Holdings Pty Ltd.
The share price at which the shares were issued represents the fair value of the shares at the date of
issue and reflective of the external raising to other shareholders.
Loans from Non-Executive Directors
During the current and comparative periods, the group made use of unsecured loan facilities with
Non-Executive Directors. Interest charged on the loans was at a fixed rate of 10% per annum.
Movements in the loan balances during the year are as follows:
Opening Balance
Drawdowns
Interest accrued during the year
Principal repayment through issuance of shares*
Principal Repayments (cash)
Interest repayments (cash)
Closing balance
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
2018
$
57,539
45,000
1,229
-
(45,000)
58,768
-
2017
$
200,000
913,462
57,539
(1,113,462)
-
-
57,539
Page 25 of 89
Directors’ Report continued
Remuneration Report (audited) continued
*Details of shares issued in settlement of outstanding loan amounts are as follows:
Date
Share
Number of
Shares
Price
714,286 $0.28
24/11/2016
30/06/2017 22,836,550 $0.04
Amount
($)
200,000
913,462
The share price at which the shares were issued represents the fair value of the shares at the date of
issue and reflective of the external raising to other shareholders.
At 30 June 2018 the Group had no outstanding balances with Non-Executive Directors.
Other transaction with Directors and Key Management Personnel
On 21 June 2018, the Group announced a financing facility of US$4million with Punta Properties, a
company associated with Non-Executive Director Nicasio Alcantara. Repayment of funds drawn
under the facility will be via cash or equity to be issued at the last issue price of 4 cents per share
subject to approval of shareholders. Interest charged on the loan will be at a fixed rate of 10% per
annum. Subsequent to balance date, $US1million was drawn down on the facility in July 2018.
In addition, the Group and Punta Properties agreed to a performance based incentive to develop and
execute an optimisation plan for the Group’s Philippines assets, associated businesses and
international expansion. This incentive is payable on the total project value achieved from the
optimisation plan at 5% of the total project value achieved. Should the plan reach a total project value
of US$30m a further 5% fee of the gross value is payable to Mr Alcantara. There is no retainer
applicable or payable to this agreement. The agreement will be subject to shareholder approval at the
next general meeting of shareholders.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 26 of 89
Corporate Governance Statement
The Australian Securities Exchange Limited (ASX) listing rules require a listed Company to provide in
its annual report a statement of the main corporate governance practices that it had in place during
the reporting period. The ASX listing rules also require a listed Company to report any instances
where it has failed to follow the recommendations issued by the ASX Corporate Governance Council
(“the Principles of Good Corporate Governance and Best Practice Recommendations, 3rd Edition”)
and the reasons for not following them.
The best practice recommendations of the ASX Corporate Governance Council are differentiated
between eight core principles that the council believes underlie good corporate governance. The
board’s statements to each core area are noted below:
Principle 1: Lay solid foundations for management and oversight
The ASX Corporate Governance Council guidelines recommend that the board recognise and
publish the respective roles and responsibilities of the board and management and how their
performance is monitored and evaluated. The framework of responsibilities should be designed to:
• enable the board to provide strategic guidance for the Company and effective oversight of
•
management;
clarify the respective roles and responsibilities of board members and senior executives in
order to facilitate board and management accountability;
• undertake appropriate background checks on proposed new directors and ensure sufficient
material information about a director being re-elected is provided to security holders;
• ensure a balance of authority so that no single individual has unfettered powers;
• ensure the Company enter in to written agreements with each director and senior executive
setting out the terms of their appointment;
• ensure the company secretary be accountable directly to the board, through the chair, on
all matters to do with the proper functioning of the board;
• establish a policy concerning diversity, that should include a requirement for the board to:
o establish measurable objectives for gender diversity;
o assess annually the objectives set for achieving gender diversity; and
o assess annually the progress made towards achieving the objectives set; and
• evaluate the performance of senior executives, the board, committees and individual
directors.
The board of Site Group International Limited are responsible for:
• establishment of long term goals and strategic plans to achieve those goals;
•
the review and adoption of the annual business plan and budgets for the financial
performance of the Company and monitoring the results on a monthly basis;
• appointment and removal of the chief executive officer;
• ensuring that the Company has implemented adequate systems of internal controls
together with appropriate monitoring of compliance activities; and
the approval of the annual and half yearly financial statements and reports.
•
These and other responsibilities are detailed in the approved Board Charter approved in February
2012.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 27 of 89
Corporate Governance Statement continued
The board meets on a regular basis to review the performance of the Company against its goals
both financial and non-financial. In normal circumstances, prior to the scheduled board meetings,
each board member is provided with a formal board package containing appropriate management
and financial reports.
Written agreements are entered in to with each director clearly setting out their roles and
responsibilities. The responsibilities of the management including the chief executive officer and
chief financial officer are contained in letters of appointment and job descriptions given to each
executive on appointment and updated from time to time, usually annually.
The board has not established formal evaluation criteria for the review of itself or its committees
and has not undertaken a specific performance evaluation. The Site Group International Limited
board uses a personal evaluation review to review the performance of Directors. Individual
Directors are asked to communicate to the Chairman on a confidential basis to comment on their
own performance, and the performance of the board and its committee. Key executives are
reviewed periodically against the business objectives and their own contractual obligations,
including their personal KPIs.
Appropriate background checks are conducted on proposed new Directors and material information
about a director being re-elected is provided to security holders.
The company secretaries work directly with the chair on the functioning of all board and committee
procedures.
The board approved and issued a Diversity Policy in January 2012. The nature of the Site Skills
Training part of the business providing high risk licencing and trades training results in a high
proportion of the trainers being male however the company actively encourages the recruitment of
female staff/contractors where available.
No specific measurable objectives have been established at this stage. As noted above, as the
nature of the company’s business is quite specific, setting measurable objectives may restrict the
company’s development at this stage. Notwithstanding this, the company actively encourages the
recruitment of female staff/contractors where available, and will continue to recruit and promote
regardless of gender, age, ethnicity or cultural background.
The following table indicates the current gender mix of employees:
Male
Female
Male
Female
Total
Board
Executive and
Senior Managers
All Other
Total
3
10
174
187
-
2
86
88
100%
-
83%
17%
68%
68%
33%
32%
3
12
260
275
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 28 of 89
Corporate Governance Statement continued
Principle 2: Structure the board to add value
The ASX Corporate Governance Council guidelines recommend that the board be structured in
such a way that it:
•
is of an effective composition, size and commitment to adequately discharge its
responsibilities;
• has a proper understanding of, and competence to deal with, the current and emerging
issues of the business; and
• has an appropriate number of independent non-executive directors who can challenge
management and represent the best interests of security holders as a whole.
To achieve best practice the Council recommends that:
•
the board should establish a nomination committee;
•
listed entities should disclose a board skills matrix;
• a majority of the board be “independent‟ Directors;
•
the chairperson be an “independent” Director and should not be the same person as the
CEO; and
listed entities have a program for inducting new directors and provide appropriate
professional development opportunities.
•
The Company has a Nomination and Remuneration Committee (the Committee) and the board has
approved the charter for the Nomination and Remuneration Committee. The Committee charter is
set out on the Company’s website.
The number of meetings of the Committee held during 2017 is set out in the Directors’ Report.
In 2017 the Committee comprised Mr Joseph Ganim, Mr Darryl Somerville and Mr Peter Jones
(appointed 29 May 2017). The Council recommends that remuneration committees be comprised of
at least three independent directors. Despite all three directors being non-executive directors, Mr
Jones is not considered independent due to being a substantial shareholder. Due to Messrs
Ganim, Somerville and Jones extensive corporate history and experience, the company believes
that given the size and nature of its operations, non-compliance has not been detrimental.
The Company is developing an appropriate board skills matrix. Comprehensive details about each
director’s experience and skills are set out in the Directors’ Report.
Site Group International Limited’s current board consists of four non-executive Directors and one
executive Director. Three of the non-executive directors are independent directors (and this was
also the case during 2016) Mr Peter Jones is not considered to be independent due to being a
substantial security holder. The Chairman of the Board Mr Darryl Somerville is an independent non-
executive director. In accordance with the Council’s definition of independence, Mr Vernon Wills is
not considered independent as he is employed in an executive capacity and is a substantial
security holder of the Company. As such the majority of the board was comprised of independent
directors, and the chairperson of the board was considered independent, throughout 2017.
Directors have the right to seek independent professional advice and are encouraged to undertake
appropriate professional development opportunities in the furtherance of their duties as Directors at
the Group’s expense. Informal induction is provided to any new Directors.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 29 of 89
Corporate Governance Statement continued
Principle 3: Act ethically and responsibly
The ASX Corporate Governance Council guidelines recommend that the Company should:
•
•
clarify the standards of ethical behaviour of Directors and executives by establishing a
code of conduct and encourage the observance of those standards; and
the policy or a summary of that policy is to be disclosed.
Site Group International Limited has a published code of conduct to guide executives, management
and employees in carrying out their duties and responsibilities. The code of conduct covers such
matters as:
•
•
•
• ethical responsibilities;
• employment practices; and
•
responsibilities to shareholders;
compliance with laws and regulations;
relations with customers and suppliers;
responsibilities to the environment and the community.
Principle 4: Safeguard integrity in corporate reporting
The ASX Corporate Governance Council guidelines recommend that the Company have formal
and rigorous processes that independently verify and safeguard the integrity of the company’s
corporate reporting.
To achieve best practice the Council recommends that:
the board should establish an audit committee;
•
• CEO and CFO sign declarations attesting to the accuracy of the Company’s accounts and
that appropriate internal controls are in place; and
the Company ensure the external auditor attends the AGM.
•
The Company has an Audit Committee and the number of meetings of the committee held during
the 2018 year is set out in the Directors’ Report.
In 2018 and 2017 the committee comprised Mr Darryl Somerville, Mr Joseph Ganim and Mr Peter
Jones (appointed 29 May 2017) with the CEO attending on an ex officio basis. The Council
recommends that audit committees be comprised of at least three independent directors. Despite
all three directors being non-executive directors, Mr Jones is not considered to be independent due
to being a substantial security holder of the Company. Due to Messrs Somerville, Ganim and Jones
extensive corporate history and experience in financial matters, the company believes that given
the size and nature of its operations, non-compliance has not been detrimental.
Audit committee meetings are attended, by invitation, by the engagement partner (or their nominee)
from the Company’s external auditor and such other senior staff or professional people as may be
appropriate from time to time.
Each year the Chief Executive Officer and Chief Financial Officer sign declarations in accordance
with section 295A of the Corporations Act, to confirm that the accounts are correct and in
accordance with relevant legislation and that appropriate financial controls are in place.
The external auditors are required to attend the annual general meeting and are available to
answer any questions from security holders relevant to the audit.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 30 of 89
Corporate Governance Statement continued
Principle 5: Make timely and balanced disclosure
The ASX Corporate Governance Council guidelines recommend that a Company make timely and
balanced disclosure of all matters concerning it that a reasonable person would expect to have a
material effect on the price or value of the Company’s securities. It recommends that it put in place
mechanisms designed to ensure all investors have equal and timely access to material information
concerning the Company (including its financial position, performance, ownership and governance),
and that a Company’s announcements are factual and presented in a clear and balanced way.
The board and senior management team at Site Group International Limited are conscious of the
ASX Listing Rule continuous disclosure requirements and have processes in place to ensure
compliance. Company policy requires:
• all announcements be reviewed by the Chairman; and
• all media comment is by the Chairman, Managing Director and Chief Financial Officer.
Principle 6: Respect the rights of security holders
The ASX Corporate Governance Council guidelines recommend that a Company respects the
rights of security holders by providing them with appropriate information and facilitates to allow
them to exercise those rights effectively.
To achieve best practice, the Council recommends that Companies:
• Provide information about themselves and their governance on their website;
• Design and implement a suitable investor relations program to facilitate effective two-way
communication with investors;
• Disclose policies and processes to encourage participation at meetings of security holders;
and
• Provide security holders with the option to receive communications electronically.
Site Group International Limited promotes effective communication with shareholders and
encourages effective participation at general meetings by providing information to shareholders:
• Through the release of information to the market via the ASX;
• Through the distribution of the Annual Report and notices of annual general meeting;
• Through shareholder meetings and investor presentations; and
• By posting relevant information on Site Group International’s website: www.site.edu.au
The company’s website has a dedicated investor relations section for the purpose of publishing all
important company information and relevant announcements made to the market.
The external auditors are required to attend the annual general meeting and are available to
answer any shareholder questions about the conduct of the audit and preparation of the audit
report.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 31 of 89
Corporate Governance Statement continued
Principle 7: Recognise and manage risk
The ASX Corporate Governance Council guidelines recommend that the Company establish a
sound risk management framework to identify and manage risk on an ongoing basis. It
recommends that the system be designed to identify, assess, monitor and manage risk; and inform
investors of material changes to the Company’s risk profile. It suggests that to achieve “best
practice”, the board or an appropriate board committee should establish policies on risk oversight
and that the Company’s risk management and internal compliance and control system is operating
efficiently and effectively in all material respects.
The Audit and Risk Committee has in its Charter the requirement to consider risks that the
Company has to manage.
The Company has established a Risk Register that is reviewed by the Audit and Risk Committee
annually. Risks are assessed and ranked in accordance with generally accepted risk management
practices with appropriate mitigation strategies adopted where possible.
The Company does not have a separate internal audit function. The board considers that the
Company is not currently of the size or complexity to justify a separate internal audit function, and
that appropriate internal financial controls are in place. Such controls are monitored by senior
financial management and the Audit and Risk Committee.
In addition the board does consider the recommendations of the external auditors and other
external advisers and where considered necessary, appropriate action is taken to ensure that an
environment is in place that key risks, as identified, are managed.
The Director’s Report sets out some of the key risks relevant to the Company and its operations.
Although not specifically defined as such, the risks include economic, environmental and social
sustainability risks. As noted above, the Company regularly reviews risks facing the Company and
adopts appropriate mitigation strategies where possible.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 32 of 89
Corporate Governance Statement continued
Principle 8: Remunerate fairly and responsibly
The ASX Corporate Governance Council guidelines recommend that the Company ensures that
the level and composition of remuneration is sufficient and reasonable and that its relationship to
corporate and individual performance is defined. In this regard it recommends that companies
adopt remuneration policies that:
• attract and retain high quality Directors;
• attract, retain and motivate high quality senior executives; and
•
to align their interests with the creation of value for security holders.
The Company has a Nomination and Remuneration Committee and the board has approved the
charter for the Nomination and Remuneration Committee. The Committee charter is set out on the
Company’s website.
The number of meetings of the committee held during the 2018 year is set out in the Directors’
Report.
In 2018 the Committee comprised Mr Joseph Ganim, Mr Darryl Somerville and Mr Peter Jones.
The Council recommends that remuneration committees be comprised of at least three
independent directors. Despite all three directors being non-executive directors, Mr Jones is not
considered to be independent due to being a substantial security holder in the Company. Due to
Messrs Ganim, Somerville and Jones extensive corporate history and experience, the company
believes that given the size and nature of its operations, non-compliance has not been detrimental.
All matters of remuneration and executive appointments were also considered by the full board. At
this stage it is reasonable that the board be accountable for setting their own remuneration and that
of senior executives.
The remuneration of the board’s non-executive and executive directors is set out in the relevant
section of the Annual Report. Details of the nature and amount of each element of the
remuneration of each director of the Company and the key management personnel of the Company
are disclosed in the relevant section of the Annual Report. There is no retirement benefit scheme
for directors other than payment of statutory superannuation.
The Company has adopted a Trading Policy that includes a prohibition on hedging, aimed at
ensuring participants do not enter in to arrangements which would have the effect of limiting their
exposure to risk relating to an element of their remuneration.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 33 of 89
The Directors
Site Group International Limited
Level 4, 488 Queen St
BRISBANE QLD 4000
Auditor’s Independence Declaration
In relation to the independent audit for the year ended 30 June 2018, to the best of my knowledge
and belief there have been:
(i)
No contraventions of the auditor independence requirements of the Corporations Act 2001;
and
(ii)
No contraventions of APES 110 Code of Ethics for Professional Accountants.
This declaration is in respect of Site Group International Limited and the entities it controlled during
the year.
PITCHER PARTNERS
NIGEL BATTERS
Partner
Brisbane, Queensland
31 August 2018
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 34 of 89
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2018
Statement of Comprehensive Income
Consolidated Group
Note
2018
$
2017
$
3
4
4
4
15
20
Continuing operations
Revenue
Interest income
Total income
Contractor and other service providers
Other direct fees and costs
Employee benefits expense
Depreciation and amortisation expense
Finance costs
Other expenses
Occupancy expenses
Foreign currency loss
Loss before tax from continuing operations
Income tax (expense) / benefit
Loss for the year from continuing operations
Discontinued Operations
Profit / (loss) for the year from discontinued operations
Loss for the year
Other comprehensive income
Items that may be reclassified to profit or loss in
subsequent years (net of tax):
Translation of foreign operations
Items not to be reclassified to profit or loss in subsequent
years (net of tax):
Remeasurement gain/(loss) on defined benefit plan
Total other comprehensive income (loss)
30,306,134
16,197
30,322,331
(4,010,877)
(6,910,359)
(14,029,659)
(2,000,124)
(54,376)
(9,005,747)
(3,531,255)
(163,251)
(9,383,317)
(164,596)
(9,547,913)
29,213,400
16,930
29,230,330
(3,990,340)
(6,687,892)
(14,956,324)
(2,217,799)
(306,632)
(12,206,866)
(3,279,521)
(248,965)
(14,664,009)
2,105,515
(12,558,494)
3,505,701
(37,907,997)
(6,042,212)
(50,466,491)
12,994
(545,336)
54,492
67,486
21,393
(523,943)
Total comprehensive loss
(5,974,726)
(50,990,434)
Earnings per share
Earnings per share for (loss) / profit attributable to the
ordinary equity holders of the parent
Basic and diluted (cents per share)
Earnings per share for continuing operations
Earnings per share for loss from continuing operations
attributable to the ordinary equity holders of the parent
Basic and diluted (cents per share)
7
7
(0.92)
(9.73)
(1.46)
(2.42)
The above statement of comprehensive income should be read in conjunction with the accompanying
notes.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 35 of 89
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES AS AT 30 JUNE 2018
Statement of Financial Position
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
Security deposits
Other non-current financial assets
Deferred income tax asset
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Interest bearing debt
Current tax liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Provisions
Interest bearing debt
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained losses
TOTAL EQUITY
Note
Consolidated Group
2018
2017
$
$
8
9
11
12
15
13
14
16
13
16
14
17
26
26
1,533,437
3,334,449
32,612
359,255
5,259,753
7,722,575
1,459,065
630,112
147,237
959,251
10,918,240
16,177,993
5,282,928
359,078
49,254
706,396
6,397,656
5,595,083
2,563,987
166,508
8,325,578
14,723,234
1,528,542
3,709,967
38,157
485,161
5,761,827
8,003,144
5,777,124
630,074
90,022
1,044,462
15,544,826
21,306,653
5,849,024
711,548
741,861
1,379,919
8,682,352
5,120,281
2,370,427
106,552
7,597,260
16,279,612
1,454,759
5,027,041
78,085,284
2,082,058
(78,712,583)
1,454,759
75,742,840
2,009,064
(72,724,863)
5,027,041
The above statement of financial position should be read in conjunction with the accompanying notes.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 36 of 89
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2018
Statement of Changes in Equity
Consolidated Group
Balance at 1 July 2016
Comprehensive income
Profit for the year
Other comprehensive income for the year
Total comprehensive income / (loss) for the year
Transactions with owners, in their capacity as owners,
and other transfers
Shares issued during the year
Shares to be issued
Transaction costs
Share-based payments
Total transactions with owners and other transfers
Share Capital
(note 17)
$
Retained
earnings /
(losses)
(note 26)
$
Foreign
currency
translation
reserve
(note 26)
$
Share based
payments
reserve
(note 26)
$
Total
$
69,293,031
(22,279,765)
1,102,725
1,230,991
49,346,982
-
-
-
(50,466,491)
21,393
(50,445,098)
-
(545,336)
(545,336)
4,913,209
1,663,462
(126,862)
-
6,449,809
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
220,684
220,684
(50,466,491)
(523,943)
(50,990,434)
4,913,209
1,663,462
(126,862)
220,684
6,670,493
Balance at 30 June 2017
75,742,840
(72,724,863)
557,389
1,451,675
5,027,041
Comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive income /(loss) for the year
Transactions with owners, in their capacity as owners,
and other transfers
Shares issued during the year
Transaction costs
Share-based payments
Total transactions with owners and other transfers
-
-
-
(6,042,212)
54,492
(5,987,720)
-
12,994
12,994
-
-
-
(6,042,212)
67,486
(5,974,726)
2,500,000
(157,556)
-
2,342,444
-
-
-
-
-
-
-
-
-
-
60,000
60,000
2,500,000
(157,556)
60,000
2,402,444
Balance at 30 June 2018
78,085,284
(78,712,583)
570,383
1,511,675
1,454,759
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 37 of 89
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2018
Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Finance payments
Income tax paid
Consolidated Group
Note
2018
$
2017
$
34,355,795
35,664,810
(34,458,894)
(34,333,441)
16,164
16,403
(82,469)
(423,068)
(558,420)
(1,018,426)
Net cash (used in) operating activities
21
(727,824)
(93,722)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment
Payments for Investments
Proceeds from disposals
Purchase of intangible assets
Cash backed performance bonds
Payment of contingent consideration
(727,073)
(802,060)
(59,051)
60,791
-
3,545
(469,761)
(204,737)
(798)
38,401
-
(529,942)
Net cash (used in) investing activities
(1,195,892)
(1,494,793)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from borrowings
Repayment of borrowings
Principal repayments - finance leases
Transaction costs on shares
Net cash provided by financing activities
2,254,000
1,735,560
45,000
750,000
(138,820)
(2,248,865)
14
(83,655)
-
(157,556)
(46,862)
1,918,969
189,833
Net (decrease) / increase in cash held
Effect of exchange rates on cash holdings in foreign
currencies
Cash and cash equivalents at beginning of financial year
(4,747)
(1,398,682)
9,642
(55,455)
1,528,542
2,982,679
Cash and cash equivalents at end of financial year
8
1,533,437
1,528,542
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 38 of 89
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES
Notes to the Financial Statements for the Year Ended 30 June 2018
Note 1
Corporate Information
The consolidated financial report of Site Group International Limited (the Company) and its controlled
entities (the Group) for the year ended 30 June 2018 was authorised for issue in accordance with a
resolution of the directors on 31 August 2018.
Site Group International Limited is a company limited by shares incorporated in Australia whose
shares are publicly traded on the Australian Securities Exchange (ASX Code: SIT). The Group is a
for-profit entity for the purposes of preparation of this financial report.
The nature of the operations and principal activities of the Group are described in the directors' report.
Note 1a
Summary of significant accounting policies
The principal accounting policies adopted in the preparation of this financial report are set out below.
These policies have been consistently applied to the years presented unless otherwise stated.
Basis of Preparation
The financial report is a general purpose financial report, which has been prepared in accordance with
the requirements of the Corporations Act 2001, Australian Accounting Standards and other
authoritative pronouncements of the Australian Accounting Standards Board (AASB). The financial
report has been prepared on an accruals basis and is based on historical costs unless otherwise
stated.
Australian Accounting Standards set out accounting policies that the AASB has concluded would
result in a financial report containing relevant and reliable information about transactions, events and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements
and notes also comply with International Financial Reporting Standards (IFRS). Material accounting
policies adopted in the preparation of this financial report are presented below. They have been
consistently applied unless otherwise stated.
The financial report is presented in Australian dollars.
(a)
Compliance with IFRS
The financial report complies with Australian Accounting Standards and International Financial
Reporting Standards as issued by the International Accounting Standards Board.
(b)
Going concern
The financial report has been prepared on the basis that the Group will continue to meet its financial
obligations as and when they fall due and can therefore continue normal activities, including the
settlement of liabilities and the realisation of assets in the ordinary course of business.
In the financial year ended 30 June 2018 the Group made a net loss of $6,042,212 (2017: loss of
$50,466,491) which was significantly impacted by non-cash impairments of $3,797,413. The cash
outflow from operating activities for the year was $727,824 (2017: $93,722). Current forecasts of
operational performance and capital expenditure requirements indicate that the company will be cash
flow positive in the 2019 financial year.
At 30 June 2018, the Company had net current asset deficiency of $1,137,903. As a consequence of
the impairment taken in the previous financial year, no amount has been reflected in the balance
sheet for the receivable ($20,977,645 – refer note 9) due from the Commonwealth Government
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 39 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
Department of Education and Training (DET), even though the group maintains the position that it is
entitled to the funds. The Company has also entered into a financing facility with Punta Properties for
$US4,000,000 to support the ongoing cash requirements of the business, of which $US1,000,000 has
been drawn down subsequent to balance date to fund the remaining shortfall in net current assets
described above. The loan terms, as set out in note 24, will not result in a cash outflow from the
Group in settlement of the loan unless there is a significant cash inflow to fund such settlement. At 30
June 2018, the Company had cash reserves of $1,533,437 and had reduced the current interest
bearing debt to $359,078.
The directors believe that at the date of the signing of the financial statements there are reasonable
grounds to believe that, having regard to the matters set out above, the Group will continue to operate
as a going concern in the foreseeable future.
(c)
New Accounting Standards and Interpretations
(i) Changes in accounting policy and disclosures.
The Group has adopted the following new and amended Australian Accounting Standards and AASB
Interpretations as of 1 July 2017:
• AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative:
Amendments to AASB 107
The adoption of this new standard has necessitated disclosure of a reconciliation of movements in
borrowings to cash flows from financing activities presented in the statement of cash flows. This
reconciliation is provided in notes 14 and 24.
The adoption of these new and revised Standards and Interpretations has not resulted in any changes
to the Consolidated Entity’s accounting policies nor affected the amounts reported for the current or
prior years.
(ii) Accounting Standards and Interpretations issued but not yet effective.
Australian Accounting Standards and Interpretations that have recently been issued or amended but
are not yet effective and have not been adopted by the Group for the annual reporting period ended
30 June 2018 are listed below:
Affected Standards and Interpretations
Application date
of standard
Application date
of for Group
AASB 9 Financial Instruments
AASB 15 Revenue from Contracts with Customers
AASB 16 Leases
1 January 2018
1 January 2018
1 January 2019
1 July 2018
1 July 2018
1 July 2019
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 40 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
The Group does not anticipate early adoption of any of the above reporting requirements and unless
mentioned below, does not expect them to have any material effect on the company’s financial
statements.
AASB 9 introduces among other things an expected credit loss model which replaces the incurred
credit loss model of AASB 139. The change will result in a revision to the way in which the provision
for impairment is calculated, however will not have a material impact on the amount of the provision
recognised in the period of initial application.
AASB 15 provides a single, principles-based five-step model to be applied to all contracts with
customers. Guidance is provided on topics such as the point at which revenue is recognised,
accounting for variable consideration, costs of fulfilling and obtaining a contract and various related
matters. New disclosures regarding revenue are also introduced.
Following review of the Group’s current revenue recognition policy, no material change in business
practice, policy or procedure is required to achieve compliance with the requirements of AASB 15.
AASB 16 replaces AASB 117 and requires that
- All leases are ‘capitalised’ by recognising the present value of the lease payments and
showing them either as lease assets (right-of-use assets) or together with property, plant and
equipment.
- A financial liability is recognised representing obligations to make future lease payments.
The standard permits either a full retrospective or a modified retrospective approach for the adoption.
The financial impact of the new standard in the 2020 financial year will be dependent on the Group’s
lease arrangements in place when the new standard is effective, and the accounting approach
adopted. However on implementation of the new standard the Group is currently estimating an
increase in assets and liabilities of $5.113m at 1 July 2019, increase in earnings before interest, tax,
depreciation and amortisation (EBITDA) of $0.990m, and a reduction in reported profit after tax of
$0.803m for the year ended 30 June 2020.
(d)
Basis of consolidation
The consolidated financial statements comprise the financial statements of the Group as at, and for
the period ended, 30 June each year. Control is achieved when the Group is exposed, or has rights,
to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Group controls an investee if and only if the
Group has:
• Power over the investee (i.e. existing rights that give it the current ability to direct the relevant
activities of the investee);
• Exposure, or rights, to variable returns from its involvement with the investee; and
• The ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group
considers all relevant facts and circumstances in assessing whether it has power over an investee,
including:
• The contractual arrangement with the other vote holders of the investee;
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 41 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
• The rights arising from other contractual arrangements; and
• The Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements of control. Consolidation of a subsidiary
begins when the Group obtains control over the subsidiary and ceases when the Group loses control
of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of
during the year are included in the statement of comprehensive income from the date the Group gains
control until the date the Group ceases to control the subsidiary.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their
accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities,
equity, income, expenses and cash flows relating to transactions between members of the Group are
eliminated in full on consolidation.
(e)
Business combinations
Business combinations are accounted for using the acquisition method. The consideration transferred
in a business combination shall be measured at fair value, which shall be calculated as the sum of the
acquisition date fair values of the assets transferred by the acquirer, the liabilities incurred by the
acquirer to former owners of the acquiree and the equity issued by the acquirer, and the amount of
any non-controlling interest in the acquiree. For each business combination, the acquirer measures
the non-controlling interest in the acquiree either at fair value or at the proportionate share of the
acquiree's identifiable net assets. Acquisition-related costs are expensed as incurred.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic
conditions, the Group’s operating or accounting policies and other pertinent conditions as at the
acquisition date. This includes the separation of embedded derivatives in host contracts by the
acquiree. If the business combination is achieved in stages, the acquisition date fair value of the
acquirer's previously held equity interest in the acquiree is remeasured at fair value as at the
acquisition date through profit or loss. Any contingent consideration to be transferred by the acquirer
will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset
or liability will be recognised in accordance with AASB 139 Financial Instruments: Recognition and
Measurement either in profit or loss or in other comprehensive income. If the contingent consideration
is classified as equity, it shall not be re-measured.
Acquisition costs are included in other expenses.
(f)
Foreign currency translation
Both the functional and presentation currency of Site Group International Limited and its Australian
subsidiaries are Australian dollars ($). The Philippines branch’s functional currency is the Philippine
Peso (PHP), Site Group International Pte Ltd’s functional currency is Singapore Dollars (SGD) and
Competent Project Management Sdn Bhd’s functional currency is Malaysian Ringgit (MYR). Each of
these is translated to the presentation currency.
On consolidation, the assets and liabilities of the Asian operations are translated into Australian
Dollars at the rate of exchange prevailing at the reporting date and the statement of comprehensive
income is translated at the exchange rate prevailing at the dates of the transactions. The exchange
differences arising on translation for consolidation are recognised in other comprehensive income.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 42 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
(g)
Cash and cash equivalents
Cash and cash equivalents in the statement of financial position and in the statement of cash flows
comprise cash at bank and in hand and short-term deposits with an original maturity of three months
or less that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.
(h)
Financial instruments – initial recognition and subsequent measurement
Financial assets
Initial recognition and measurement
Financial assets within the scope of AASB 139 are classified as financial assets at fair value through
profit or loss, loans and receivables, held-to-maturity investments, available-for-sale financial assets,
or as derivatives designated as hedging instruments in an effective hedge, as appropriate. The Group
determines the classification of its financial assets at initial recognition.
All financial assets are recognised initially at fair value plus transaction costs, except in the case of
financial assets recorded at fair value through profit or loss.
Purchases or sales of financial assets that require delivery of assets within a time frame established
by regulation or convention in the market place (regular way trades) are recognised on the trade date,
i.e., the date that the Group commits to purchase or sell the asset.
The Group’s financial assets include cash and short-term deposits, trade receivables, loans and other
receivables, quoted and unquoted financial instruments.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. After initial measurement, such financial assets are subsequently
measured at amortised cost using the Effective Interest Rate (EIR) method, less impairment.
Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. The EIR amortisation is included in finance income in the
statement of comprehensive income. The losses arising from impairment are recognised in the
statement of comprehensive income in finance costs for loans and in other operating expenses for
receivables.
Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturities are classified
as held-to-maturity when the Group has the positive intention and ability to hold them to maturity.
After initial measurement, held-to-maturity investments are measured at amortised cost using the EIR,
less impairment. Amortised cost is calculated by taking into account any discount or premium on
acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in
finance income in the statement of comprehensive income. The losses arising from impairment are
recognised in the statement of comprehensive income in finance costs.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 43 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
Derecognition
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial
assets) is derecognised when:
• The rights to receive cash flows from the asset have expired.
• The Group has transferred its rights to receive cash flows from the asset or has assumed an
obligation to pay the received cash flows in full without material delay to a third party under a
“pass-through” arrangement; and either (a) the Group has transferred substantially all the
risks and rewards of the asset, or (b) the Group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has transferred control of the asset.
Impairment of financial assets
The Group assesses, at each reporting date, whether there is any objective evidence that a financial
asset or a group of financial assets is impaired. A financial asset or a group of financial assets is
deemed to be impaired if, and only if, there is objective evidence of impairment as a result of one or
more events that has occurred after the initial recognition of the asset (an incurred ”loss event”) and
that loss event has an impact on the estimated future cash flows of the financial asset or the group of
financial assets that can be reliably estimated. Evidence of impairment may include indications that
the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency
in interest or principal payments, the probability that they will enter bankruptcy or other financial
reorganisation and when observable data indicate that there is a measurable decrease in the
estimated future cash flows, such as changes in arrears or economic conditions that correlate with
defaults.
Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of AASB 139 are classified as financial liabilities at fair value
through profit or loss, loans and borrowings, or as derivatives designated as hedging instruments in
an effective hedge, as appropriate. The Group determines the classification of its financial liabilities at
initial recognition.
All financial liabilities are recognised initially at fair value plus, in the case of loans and borrowings,
directly attributable transaction costs. The Group’s financial liabilities include trade and other payables
and loans and borrowings.
Loans and borrowings
After initial recognition, interest bearing loans and borrowings are subsequently measured at
amortised cost using the EIR method. Gains and losses are recognised in the statement of
comprehensive income when the liabilities are derecognised as well as through the EIR amortisation
process. Amortised cost is calculated by taking into account any discount or premium on acquisition
and fees or costs that are an integral part of the EIR. The EIR amortisation is included in finance costs
in the statement of comprehensive income.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 44 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount reported in the consolidated
statement of financial position if, and only if:
• There is a currently enforceable legal right to offset the recognised amounts
• There is an intention to settle on a net basis, or to realise the assets and settle the liabilities
simultaneously
(i)
Property, plant, and equipment
Each class of property, plant and equipment is carried at cost or fair value as indicated less, where
applicable, any accumulated depreciation and impairment losses.
Leasehold Improvements
Leasehold improvements are initially shown at their cost, less subsequent depreciation.
Plant and Equipment
Plant and equipment are measured on the cost basis, less depreciation and impairment losses.
Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
the company and the cost of the item can be measured reliably.
All other repairs and maintenance are charged to profit and loss during the financial period when they
are incurred.
Depreciation
The depreciable amount of all fixed assets, excluding freehold land, is depreciated on a straight-line
basis over the asset's useful life to the company commencing from the time the asset is held ready for
use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the
lease or the estimated useful life of the improvement.
The estimated lives used for each class of depreciable assets are:
Class of fixed asset
Building and Leasehold improvements 2 – 25 years
2 – 20 years
Furniture and fittings
3 – 5 years
Computer equipment
3 – 5 years
Vehicles
Estimated Life
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each
balance sheet date.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount.
These gains or losses are included in profit or loss.
(j)
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the
arrangement and requires an assessment of whether the fulfilment of the arrangement is dependent
on the use of a specific asset or assets and the arrangement conveys a right to use the asset.
Group as a lessee
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives
or the lease term.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 45 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to
ownership of the leased item, are capitalised at the inception of the lease at the fair value of the
leased asset or, if lower, at the present value of the minimum lease payments. Lease payments are
apportioned between the finance charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the liability. Finance charges are recognised as
an expense in profit or loss. Capitalised leased assets are depreciated over the shorter of the
estimated useful life of the asset and the lease term if there is no reasonable certainty that the Group
will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in the statement of comprehensive income
on a straight-line basis over the lease term. Operating lease incentives are recognised as a liability
when received and subsequently reduced by allocating lease payments between rental expense and
reduction of the liability.
(k)
Intangible assets
Goodwill
Goodwill is initially recorded at the amount by which the purchase price for a business combination
exceeds the fair value attributed to the interest in the net fair value of identifiable assets, and
liabilities. After initial recognition, goodwill acquired in a business combination is measured at cost
less any accumulated impairment losses. Goodwill is not amortised but is subject to impairment
testing on an annual basis or whenever there is an indication of impairment.
Training Licences and Course Material
Site Group acquires licenced course material with significant scope (approved courses) in high risk
training. The economic potential of these licences and courses was assessed as part of the
acquisition price and recorded as an intangible asset which is being amortised on a straight line basis
over five years.
Licences
Site Group acquires licences to offer scope of training and access to government funding options. The
economic potential of these licences was assessed as part of the acquisition price and recorded as an
intangible asset and amortised on a straight line basis over 20 years.
Customer Contracts
Site group acquires customer contracts with significant value to be realised through the profit and loss
in future periods. The economic potential of these contracts is measured as a risk adjusted
discounted cash flow to be generated from these contracts and recorded as an intangible asset which
is amortised on a straight line basis over the relevant contract period.
Brand
Site group acquires brands that are recognised by customers in relevant markets and generate future
activity for the company. The economic potential of these brands in the form of future revenue
generating potential is assessed as a discounted cash flow and recorded as an indefinite useful life
intangible and tested for impairment annually.
The assessment of indefinite life is reviewed annually to determine whether the indefinite life
continues to be supportable. If not, the change in useful life from indefinite to finite is made on a
prospective basis.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 46 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
(l)
Impairment of assets
At each reporting date, the company reviews the carrying values of its tangible and intangible assets
to determine whether there is any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less
costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s
carrying value over its recoverable amount is expensed to the statement of comprehensive income.
Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.
Where an individual asset does not independently generate cash flows, the company estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
(m)
Provisions and employee benefits
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of cash or non-cash resources will be required to settle
the obligation and a reliable estimate can be made of the amount of the obligation. When the Group
expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the statement of comprehensive income
net of any reimbursement. Provisions are measured at the present value of management's best
estimate of the expenditure required to settle the present obligation at the reporting date. The
discount rate used to determine the present value reflects current market assessments of the time
value of money and the risks specific to the liability. The increase in the provision resulting from the
passage of time is recognised in finance costs.
Employee leave benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be
wholly settled within 12 months of the reporting date are recognised in respect of employees' services
up to the reporting date. They are measured at the amounts expected to be paid when the liabilities
are settled. Based on historical evidence no discounting of annual leave has been applied. Expenses
for non-accumulating sick leave are recognised when the leave is taken and are measured at the
rates paid or payable. Liabilities for wages, salaries and annual leave are recognised as current
liabilities and the group does not have an unconditional right to defer settlement beyond 12 months.
(ii) Long service leave
The liability for long service leave is recognised and measured as the present value of expected
future payments to be made in respect of services provided by employees once an employee reaches
five years of service. Expected future payments are discounted using market yields at the reporting
date on the applicable corporate bonds with terms to maturity and currencies that match, the
estimated future cash outflows. Where the group has an unconditional right to defer settlement of the
liability beyond 12 months of the balance date, the provision is classified as non-current. Otherwise,
the provision is classified as a current liability.
(n)
Taxes
Income tax
Current Tax Current tax assets and liabilities for the current and prior periods are measured at the
amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used
to compute the amount are those that are enacted or substantively enacted at the reporting date.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 47 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
Deferred Tax
Deferred tax is provided using the balance sheet liability method on temporary differences at the
reporting date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
• When the deferred income tax liability arises from the initial recognition of goodwill or of an
asset or liability in a transaction that is not a business combination and that, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss.
• When the taxable temporary difference is associated with investments in subsidiaries,
associates or interests in joint ventures, and the timing of the reversal of the temporary
difference can be controlled and it is probable that the temporary difference will not reverse in
the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of
unused tax credits and unused tax losses, to the extent that it is probable that taxable profit will be
available against which the deductible temporary differences and the carry-forward of unused tax
credits and unused tax losses can be utilised, except:
• When the deferred income tax asset relating to the deductible temporary difference arises
from the initial recognition of an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects neither the accounting profit nor
taxable profit or loss
When the deductible temporary difference is associated with investments in subsidiaries, associates
or interests in joint ventures, in which case a deferred tax asset is only recognised to the extent that it
is probable that the temporary difference will reverse in the foreseeable future and taxable profit will
be available against which the temporary difference can be utilised. The carrying amount of deferred
income tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax
asset to be utilised.
Unrecognised deferred tax assets are reassessed each reporting date and are recognised to the
extent it has become probable that future taxable profit will allow recovery of the deferred tax asset.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to
the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that
have been enacted or substantively enacted at the reporting date. Deferred tax assets and deferred
tax liabilities are offset, if a legally enforceable right exists to offset current tax assets against current
tax liabilities and the deferred taxes relate to the same taxable entity and the same tax authority.
Tax consolidation legislation
Site Group International Limited and its wholly owned Australian controlled entities implemented the
tax consolidation legislation. The head entity, Site Group International Limited and the controlled
entities in the tax consolidated group continue to account for their own current and deferred tax
amounts. The Group has applied the group allocation approach in determining the appropriate
amount of current taxes and deferred taxes to allocate to members of the tax consolidated group.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 48 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
In addition to its own current and deferred tax amounts, Site Group International Limited also
recognises the current tax liabilities (or assets) and the deferred tax assets arising from unused tax
losses and unused tax credits assumed from controlled entities in the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are
recognised as amounts receivable from or payable to other entities in the Group.
Any differences between the amounts assumed and the amounts receivable or payable under the tax
funding agreement are recognised as contributions to (or distribution from) wholly owned tax
consolidated entities.
Goods and services tax (GST)
Revenues, expenses, assets and liabilities are recognised net of the amount of GST, except where
the amount of GST incurred is not recoverable from the Tax Office. In these circumstances, the GST
is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables in the balance sheet are shown inclusive of GST. GST receivable and
payable has been offset against one another. Commitments are shown net of GST.
In the statement of cash flows, receipts from customers are shown inclusive of GST and payments to
suppliers and employees are shown inclusive of GST and GST recovered from the tax office is shown
in receipts from customers.
(o)
Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits associated with the
transaction will flow to the group and the amount can be reliably measured. The following recognition
criteria must also be met before revenue is recognised:
Course fees and Government subsidies revenue is recognised over the period of the course
as the service is provided.
Project income revenue is recognised throughout the period of the project.
Interest income revenue is recognised as the interest accrues, taking into account the
effective yield on the asset.
Placement services revenue is recognised throughout the period of the placement activity
provided recovery of fees is considered probable.
Other income revenue is recognised at the later of point of sale or when it can be reliably
measured.
To the extent services have been invoiced however yet to be provided, the revenue is deferred and
included in unearned income in the Statement of Financial Position. Unearned income also includes
allowances made for re-credits and refunds that may be made to students.
(p) Government grants
Government grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense item,
it is recognised as income over the period necessary to match the grant on a systematic basis to the
costs that it is intended to compensate. When the grant relates to an asset, it is recognised as
deferred income and released to income in equal amounts over the expected useful life of the asset.
(q)
Comparative figures
Where necessary, comparative figures have been adjusted to conform to changes in presentation for
the current financial year where required by accounting standards or as a result of changes in
accounting policy.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 49 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1a
Summary of significant accounting policies continued
(r)
Share-based payment transactions
The Group provides benefits to its employees (including key management personnel) in the form of
share-based payments, whereby employees render services in exchange for shares or rights over
shares (equity settled transactions). Site Group currently has an Employee Share Plan (ESP), which
provides benefits to directors and all eligible employees. The cost of these equity-settled transactions
with employees is measured by reference to the fair value of the equity instruments at the date at
which they are granted. The fair value is determined by using a binomial model, further details of
which are given in note 22.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance and/or service conditions are fulfilled (the vesting period),
ending on the date on which the relevant employees become fully entitled to the award (the vesting
date). At each subsequent reporting date until vesting, the cumulative charge to profit or loss is the
product of:
• The grant date fair value of the award;
• The current best estimate of the number of awards that will vest, taking into account such
factors as the likelihood of employee turnover during the vesting period and the likelihood of
non- market performance conditions being met; and
• The expired portion of the vesting period.
The charge to profit or loss for the period is the cumulative amount as calculated above less the
amounts already charged in previous periods. There is a corresponding entry to equity. The expense
associated with equity-settled awards granted by Site Group to employees of subsidiaries are
recorded as an expense in the subsidiary and funded by advances from the parent which eliminate on
consolidation. The expense recognised by the Group is the total expense associated with all awards.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer
awards vest than were originally anticipated to do so. Any award subject to a market condition or non-
vesting condition is considered to vest irrespective of whether or not that market condition or non-
vesting is fulfilled, provided that all other conditions are satisfied.
(s)
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax as applicable, from the proceeds.
(t)
Fair value measurement
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that
is significant to the fair value measurement as a whole:
• Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 – Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable
• Level 3 – Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
The Group does not measure any assets or liabilities at fair value on a recurring basis. Further, the
carrying values of financial assets and financial liabilities as disclosed in note 25 approximate their fair
values.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 50 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 1b
Significant accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue
and expenses. Management bases its judgements and estimates on historical experience and on
other various factors it believes to be reasonable under the circumstances, the result which form the
basis of the carrying values of assets and liabilities that aren’t readily apparent from other sources.
Management has identified the following critical accounting policies for which significant judgements,
estimates and assumptions are made. Actual results may differ from these estimates under different
assumptions and conditions and may materially affect financial results or the financial position
reported in future periods.
Further details may be found in the relevant notes to the financial statements.
(a)
Significant accounting judgements
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only when management
considers that it is probable that future taxable profits will be available to utilise those temporary
differences. Significant management judgement is required to determine the amount of deferred tax
assets that can be recognised, based upon the likely timing and the level of future taxable profits
together with future tax planning strategies.
Impairment of non-financial assets other than goodwill and indefinite life intangibles
The Group assesses impairment of assets at each reporting date by evaluating conditions specific to
the Group and to the particular asset that may lead to impairment. These include technology,
economic and political environments and future product expectations. If an impairment trigger exists
the recoverable amount of the asset is determined. Given the current uncertain economic
environment management considered that the indicators of impairment were significant enough and
as such these assets have been tested for impairment in this financial period, refer below.
(b)
Significant accounting estimates and assumptions
Impairment of non-current assets
The Group determines whether goodwill and intangibles with indefinite useful lives are impaired at
least on an annual basis. Further, the Group considers whether other non-current assets are impaired
whenever there is an indication that impairment may exist. This requires an estimation of the
recoverable amount of the cash generating units, using a value in use discounted cash flow
methodology, to which the goodwill and intangibles with indefinite useful lives are allocated. An
impairment loss of $3,797,413 was recognised in the current year in respect of goodwill and brand
(2017: $23,570,460). The assumptions used in this estimation of recoverable amount and the carrying
amount of goodwill and intangibles with indefinite useful lives are discussed in note 12.
Revenue recognition – Course fees
The Group recognises the revenue earned from delivery of a course over the period of the course that
the service is provided. Where the duration of the course is extended this is recorded as unearned
revenue on the statement of financial position. In calculating the amount of unearned revenue,
consideration is also given to the probability of reversals and student refunds and the impact on the
level of income recorded.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 51 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 2
Parent Company Information
The following information has been extracted from the books and records of the parent, Site Group
International Limited, and has been prepared in accordance with the Accounting Standards.
Statement of Financial Position
Assets
Current assets
Non-current assets
Total Assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Share based payments reserve
Total Equity
Statement of Comprehensive Income
Total loss of the parent entity
Total comprehensive loss of the parent
2018
$
2017
$
18,258,860
11,676,784
29,935,644
21,347,734
33,316,143
54,663,877
2,051,569
101,704
2,153,273
2,035,758
43,048
2,078,806
27,782,371
52,585,071
67,612,562
(41,291,325)
1,461,134
27,782,371
65,270,118
(14,136,721)
1,451,674
52,585,071
(27,154,604)
(27,154,604)
209,248
209,248
The Parent entity has no commitments to purchase property, plant and equipment and has no
contingent liabilities.
Note 3
Revenue and Other Income from Continuing Operations
Revenue from continuing operations
Revenue
Course fees
Placement services
Government subsidies received
Project income
Other revenue
Consolidated Group
2018
2017
$
$
20,278,169
3,674,305
2,418,969
3,494,161
440,530
30,306,134
16,962,652
1,141,916
2,110,911
8,854,534
143,387
29,213,400
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 52 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 4
Expenses from Continuing Operations
Employee benefits expense
Wages and salaries
Superannuation expense
Payroll tax and workers compensation
Annual and long service leave
Other employment expenses
Share-based payment expense
Other expenses
Legal, accounting and other professional fees
Travel & accommodation
Sales and marketing expense
Consultants cost
Impairment of intangibles
Impairment of receivables
Other
Finance costs
Interest expense - third parties
Interest expense - related parties
Facilities fee
Consolidated Group
2018
$
11,881,800
1,014,779
704,746
112,126
256,208
60,000
14,029,659
2017
$
12,372,504
1,112,499
752,282
160,246
338,109
220,684
14,956,324
624,546
1,027,316
1,169,603
779,257
3,797,413
495,573
1,112,039
9,005,747
1,007,679
906,845
937,511
551,791
7,563,980
113,667
1,125,393
12,206,866
23,061
26,515
4,800
54,376
167,015
134,007
5,610
306,632
Note 5
Interests of Key Management Personnel (KMP)
Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration
paid or payable to each member of the Group’s key management personnel for the year ended 30
June 2018.
The totals of remuneration paid to KMP of the Group during the year are as follows:
Short-term employee benefits
Post-employment benefits
Other long term benefits
Termination benefits
Share-based payments
Consolidated Group
2018
2017
$
$
1,076,536
1,007,877
43,501
43,967
29,353 -
33,654 -
95,193
1,147,037
-
1,183,044
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 53 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 6
Auditors’ Remuneration
On May 30, 2018, Pitcher Partners were appointed as auditors for the Group. This appointment
follows the resignation of Ernst & Young, and ASIC’s consent to the resignation in accordance with
s329(5) of the Corporations Act 2001.
Remuneration of Pitcher Partners as current auditor of the parent entity for:
— auditing or reviewing the financial report
Rumuneration of EY as former auditor of the parent entity for
— auditing or reviewing the financial report
— taxation services
Remuneration of other EY auditors of subsidiaries for:
— auditing or reviewing the financial statements of subsidiaries
Remuneration of other auditors of subsidiaries for:
— auditing or reviewing the financial statements of subsidiaries
— taxation services
Note 7
Earnings per Share
Consolidated Group
2018
2017
$
$
75,000
-
79,310
32,180
111,490
178,190
62,745
240,935
25,327
78,064
10,147
12,261
22,408
24,605
10,167
34,772
Consolidated Group
2018
2017
$
$
a) Earnings used in calculating earnings per share
For basic and diluted earnings per share:
Net loss from continuing operations attributable to ordinary equity holders of the parent
Net loss attributable to ordinary equity holders of the parent
(9,547,913)
(6,042,212)
(12,558,494)
(50,466,491)
b) Weighted average number of shares
Weighted average number of ordinary shares for basic and diluted earnings per share
No.
656,150,613
No.
518,551,039
c) (Loss) / earnings per share (cents)
Loss per share from continuing operations attributable to the ordinary equity holders
of the parent
Loss per share attributable to the ordinary equity holders of the parent
(1.46)
(0.92)
(2.42)
(9.73)
There are no options outstanding at 30 June 2018 (Nil at 30 June 2017).
To calculate the EPS for discontinued operations the weighted average number of ordinary shares is
as per above. The following table provides the profit / (loss) amounts used.
Consolidated Group
2018
2017
$
$
Net profit /(loss) from discontinued operations attributable to ordinary equity holders
of the parent
3,505,701
(37,907,997)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 54 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 8
Cash and Cash Equivalents
Cash at bank and in hand
Consolidated Group
2017
2018
$
$
1,533,437
1,533,437
1,528,542
1,528,542
Reconciliation of cash
Cash at the end of the financial year as shown in the statement of cash flows is reconciled to items in
the statement of financial position as cash and cash equivalents
Note 9
Trade and Other Receivables
CURRENT
Trade receivables
Provision for impairment
Other receivables
Total current trade and other receivables
Note
9(a)
Consolidated Group
2018
2017
$
$
24,450,323
(21,671,453)
2,778,870
555,579
3,334,449
29,212,007
(26,145,867)
3,066,140
643,827
3,709,967
Trade receivables includes an amount of $20,977,645 receivable from the Commonwealth
Government Department of Education and Training (DET). In December 2017, the Group received
$4,869,133 of the amount outstanding and was then advised by DET it would accept further
submissions from the Group for the balance ($28,969,145).
Following the provision of these submissions, the Group was advised that DET had decided against
making the payment, without providing any legislative justification. The Group is now pursuing all
remedies available to it through the court process to compel the DET to pay the outstanding amount.
In light of the uncertain circumstances with regard to the reconciliation payment, Management took
the decision to write down the full debtor value in the accounts at 30 June 2017. During the six month
period to 31 December 2017 the provision was written back by $4,990,133 following tuition re-credits
and the DET payment received. The provision will continue to be re-assessed as the matter
progresses and does not in any way alter the belief of the Board and Management that the Group is
entitled to the full reconciliation amount of $28,969,145 in full and that the monies are legitimately due
and payable under the relevant legislation as it then applied.
The Group has also taken up a provision for tuition re-credits. During the year the provision balance
reduced by $725,592 to $79,055. The movement being tuition re-credits of $121,000 and a decision
by management at 30 June to reduce the provision balance by a further $604,592. In assessing the
provision balance, the Group has taken into account the DET reconciliation balance owed.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 55 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 9
Trade and Other Receivables continued
a) Provision for impairment of receivables
Current trade receivables are non-interest bearing and generally on 30-day terms. Non-current trade
receivables are assessed for recoverability based on the underlying terms of the contract. A provision
for impairment is recognised when there is objective evidence that an individual trade receivable is
impaired. These have been included in the other expenses item.
Movement in the provision for impairment of receivables is as follows:
Opening Balance
Net charge / (reversed)
Amounts written off
Closing Balance
Consolidated Group
2018
2017
$
$
26,145,867
(4,420,769)
(53,645)
21,671,453
80,219
34,099,476
(8,033,828)
26,145,867
At 30 June 2018 the ageing analysis of trade receivables is as follows:
Consolidated Group
As at 30 June 2018
Trade receivables
Other receivables
Total
As at 30 June 2017
Trade receivables
Other receivables
Total
Total
0-30 days
31-60 days
PDNI*
61-90 days
PDNI*
+91 days
PDNI*
+91 days
CI**
24,450,323
555,579
25,005,902
29,212,007
643,828
29,855,835
1,907,852
482,882
2,390,734
1,573,606
389,106
1,962,712
402,448
(899)
401,549
427,503
2,620
430,123
159,307
11,621
170,928
713,587
4,557
718,144
309,263
61,975
371,238
351,445
247,545
598,990
21,671,453 (i)
-
21,671,453
26,145,866
-
26,145,866
*Past due not impaired (PDNI)
**Considered impaired (CI)
(i)The total balance receivable from DET is $20,977,645
b) Financial Assets Classified as loans and receivables
See Note 25 for a discussion about the financial assets classification of trade and other receivables.
c) Related party receivables
For terms and conditions of related party receivables refer to note 24.
d) Fair value and credit risk
Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair
value. The maximum exposure to credit risk is the fair value of receivables. Collateral is not held as
security, nor is it the Group’s policy to transfer (on-sell) receivables to special purpose entities.
At 30 June 2018, Group Receivables, before provision for impairment, included one customer that owed
$20,977,645.
e) Foreign exchange and interest rate risk
Detail regarding foreign exchange and interest rate risk exposure is disclosed in note 25.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 56 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 10
Controlled Entities
Subsidiaries of Site Group International Limited:
Site Group Holdings Pty Ltd
Site Education Australia Pty Ltd
Site WorkReady Pty Ltd
Study Corp Australia Pty Ltd (Formerly Site Labourhire Pty Ltd )
Site Skills Group Pty Ltd
Site Skills Academy Pty Ltd
Site WorkReady (Philippines) Pty Ltd
Axis Training Group Pty Ltd
Romea Consulting Pty Ltd
Site Group international Pte Ltd
Competent Project Management Sdn Bhd
Productivity Partners Pty Ltd
Wild Geese International Pty Ltd
Site Institute Pty Ltd (Formerly Innovium Pty Ltd)
* Percentage of voting power is in proportion to ownership
Principle activities
Country of
Incorporation
Percentage
Owned (%)*
2018
2017
Holding company
Holding company
Labour services
Holding company
Education and training
Education and training
Holding company
Education and training
Education and training
Competency development
Competency development
Education and training
Oil & Gas consultancy
Education and training
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Malaysia
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Note 11
Property, Plant and Equipment
Plant and equipment
Leasehold improvements
At cost
Accumulated depreciation
Net carrying amount - leasehold improvements
Capital works in progress
At cost
Computer equipment
At cost
Accumulated depreciation
Net carrying amount - computers
Furniture and fittings
At cost
Accumulated depreciation
Net carrying amount - furniture and fittings
Vehicles
At cost
Accumulated depreciation
Net carrying amount - vehicles
Total property, plant and equipment
Consolidated Group
2018
2017
$
$
8,343,301
(2,219,622)
6,123,679
8,406,651
(1,857,668)
6,548,983
444,813
158,952
1,226,899
(1,093,995)
132,904
1,173,681
(955,169)
218,512
4,203,950
(3,458,329)
745,621
4,086,984
(3,194,450)
892,534
747,014
(471,456)
275,558
613,055
(428,892)
184,163
7,722,575
8,003,144
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 57 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 11
Property, Plant and Equipment continued
(a)
Movements in Carrying Amounts
Movements in carrying amounts for each class of property, plant and equipment between the
beginning and the end of the current financial year:
Leasehold
Capital Works
Improvements
$
in Progress
$
Computers
$
Furniture &
Fittings
$
Vehicles
$
Total
$
7,128,321
73,131
(53,626)
450,457
(22,677)
(396,053)
(630,570)
6,548,983
41,172
8,476
(7,305)
(381,948)
(85,699)
6,123,679
160,440
662,939
-
(648,288)
-
-
(16,139)
158,952
666,751
(382,914)
-
-
2,024
444,813
393,181
54,617
-
1,365
-
(229,746)
(905)
218,512
84,307
1,045
(7,058)
(164,101)
199
132,904
1,217,401
99,241
-
127,822
(2,110)
(516,371)
(33,449)
892,534
105,834
161,560
(16,238)
(393,969)
(4,100)
745,621
237,510
34,611
-
-
-
(76,923)
(11,035)
184,163
54,599
147,574
(11,980)
(97,326)
(1,472)
275,558
9,136,853
924,539
(53,626)
(68,644)
(24,787)
(1,219,093)
(692,098)
8,003,144
952,663
(64,259)
(42,581)
(1,037,344)
(89,048)
7,722,575
Consolidated Group:
Balance at 30 June 2016
Additions
Revaluation adjustment
Transfers - in (out)
Disposals
Depreciation expense
Exchange rate differences
Balance at 30 June 2017
Additions
Transfers - in (out)
Disposals
Depreciation expense
Exchange rate differences
Balance at 30 June 2018
(b)
Finance Leases
The carrying value of vehicles held under finance leases and hire purchase contracts at 30 June 2018
was $233,962 (2017: $144,774). Additions during the year include $162,599 (2017: $35,270) of
vehicles under hire purchase contracts. Leased assets and assets under hire purchase contracts are
pledged as security for the related finance lease and hire purchase liability.
(c)
Impairment Testing
Impairment testing was completed on the Site Skills Training – International cash-generating unit
(CGU) at 30 June 2018, to which $6,169,805 of the property, plant and equipment balance above is
allocated. The recoverable amount of the CGU was determined based on value-in-use calculations.
Value-in-use is calculated based on the present value of future cash flow projections over a five-year
period including a terminal value calculation.
The projected cash flows used to determine value-in-use reflected the latest budgets. Key inputs into
the impairment model included a pre-tax discount rate of 17%, annual revenue growth rate over the 5
year forecast period of 10%, and a terminal growth rate of 0%.
As a result of this analysis, management did not recognise an impairment charge.
The calculation of value in use for the CGU’s is most sensitive to changes in forecast revenue growth
and the discount rate. A decrease in average annual revenue growth rate to 0.5%, or an increase in
the pre-tax discount rate of 23%, would result in an impairment charge being recognised.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 58 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 12
Intangible Assets
Non-Current
Goodwill
Net carrying value
Training licences and course material
Cost
Accumulated amortisation
Net carrying value
Customer contracts
Cost
Accumulated amortisation
Net carrying value
Brand
Net carrying value
Software development
Cost
Accumulated amortisation
Net carrying value
Total intangible assets
Consolidated Group
2018
2017
$
$
638,050
4,375,463
2,871,181
(2,267,606)
603,575
2,572,044
(1,887,173)
684,871
1,615,542
(1,615,542)
-
-
1,615,542
(1,262,599)
352,943
60,000
1,191,112
(973,672)
217,440
1,009,990
(706,143)
303,847
1,459,065
5,777,124
(a)
Reconciliation of carrying amounts at the beginning and end of the period
Movements in carrying amounts for each class of intangible between the beginning and the end of the
current financial year:
Goodwill
$
27,084,527
-
-
(22,709,064)
-
-
4,375,463
-
-
(3,737,413)
-
-
-
638,050
Training
Licences
Courses
$
1,020,858
48,901
21,091
-
(384,783)
(21,196)
684,871
258,787
24,921
-
(635)
(372,436)
8,067
603,575
Licences
$
Customer
Contracts
$
Brand
$
Software
Development
Total
$
830,700
705,875
133,000
-
-
(788,396)
(42,304)
-
-
-
-
-
-
-
-
-
-
-
-
(352,932)
-
352,943
-
-
-
-
(352,943)
-
-
-
-
(73,000)
-
-
60,000
-
-
(60,000)
-
-
-
-
526,754
132,117
1,276
-
(356,300)
-
303,847
146,784
39,338
-
(2,000)
(270,529)
-
217,440
30,301,714
181,018
22,367
(23,570,460)
(1,136,319)
(21,196)
5,777,124
405,571
64,259
(3,797,413)
(2,635)
(995,908)
8,067
1,459,065
Consolidated Group:
Balance at 30 June 2016
Additions
Transfers in
Impairments
Amortisation expense
Exchange rate differences
Balance at 30 June 2017
Additions
Transfers in
Impairments***
Disposals
Amortisation expense
Exchange rate differences
Balance at 30 June 2018
*Impairments relate to energy services CGU (refer note 4)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 59 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 12
Intangible Assets continued
b)
Impairment
An impairment loss is recognised for the amount by which the as’et's carrying amount exceeds its
recoverable amount. Recoverable amount is the higher of an as’et's fair value less costs to sell and
value in use.
The recoverable amount of goodwill and brand name is determined based on value-in-use
calculations. Value-in-use is calculated based on the present value of future cash flow projections
over a five-year period including a terminal value calculation.
The cash-generating units with a significant amounts of goodwill are the Tertiary Education unit and
the Energy Services unit, as shown in the table below:
CGU
Tertiary
Energy
Site Skills Training
(Domestic)
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
Carrying amount
of goodwill
441,015
441,015
-
3,737,413 197,035
197,035
In the period to 30 June 2018, the business for Wild Geese International changed such that the Group
sought to reassess impairment for the non-current assets (primarily goodwill) in the Energy Services
cash-generating unit.
Tertiary Education cash-generating unit
The Group used the cash-generating unit’s value-in-use to determine the recoverable amount. The
projected cash flows were updated to reflect the latest budgets and a pre-tax discount rate of 17% (30
June 2017: 16.6%) was applied. The terminal growth rate applied is 0% (30 June 2017: 0%).
As a result of this analysis, management did not recognise an impairment charge.
The calculation of value in use for the Tertiary Education CGU is most sensitive to the changes in
forecast gross margins and the discount rate. No reasonably possible change in forecast gross
margins or the discount rate applied would have resulted in an impairment of the CGU carrying value
at 30 June 2018.
Energy Services cash-generating unit
The Group used the cash-generating unit’s value-in-use to determine the recoverable amount, which
exceeded the carrying amount. The projected cash flows were updated to reflect the latest budgets
and a pre-tax discount rate of 17% (30 June 2017: 16.6%) was applied. The terminal growth rate
applied is 0% (30 June 2017: 0%).
As a result of this analysis, management recognised an impairment charge of $3,797,413 against
goodwill and brand. The impairment charge is recorded in other expenses in the Statement of
Comprehensive Income.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 60 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 13
Trade and Other Payables
Current
Unsecured liabilities
Trade payables
Employee related payables
Unearned income
Accruals
Other payables
Total trade and other payables
Non-current
Unsecured liabilities
Trade payables
Accruals
Total trade and other payables
Consolidated Group
2018
2017
$
$
2,573,229
437,178
623,824
1,640,375
8,322
5,282,928
2,304,457
592,830
1,231,415
1,650,267
70,055
5,849,024
Consolidated Group
2018
2017
$
$
4,581,310
1,013,773
5,595,083
4,696,500
423,781
5,120,281
Non-current trade payables and accruals balances include commission payable to agents on receipt
of the reconciliation payment receivable from the DET.
The non-current accruals account also includes $475,352 representing executive STI bonuses
payable on receipt of the reconciliation payment receivable from the DET.
Amounts have been classified as non-current as the Group has no contractual obligation to settle the
liabilities unless payment of the outstanding receivable due from the Commonwealth Government as
per note 9 is received. Although the Group intends to pursue recovery of the outstanding receivable in
full, as such recovery action is at the discretion of the Group. The directors are satisfied that an
unconditional right of deferral exists for the liabilities until such time as the debtor is received.
(a)
Fair value
Due to the short-term nature of these payables, their carrying value is assumed to
approximate their fair value.
Related party payables
(b)
For terms and conditions relating to related party payables refer to note 24.
(c)
Interest rate, foreign exchange and liquidity risk
Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in
note 25.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 61 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 14
Interest Bearing Debt
Current financial liabilities
Refer to note 26(d) for details of the undrawn related party debt facility.
Finance lease liability due within 12 months
Unsecured related party loans due within 12 months
Non-current financial liabilities
Finance lease liability
Consolidated Group
2018
$
92,156
266,922
359,078
2017
$
73,168
638,380
711,548
Consolidated Group
2018
$
2017
$
166,508
166,508
106,552
106,552
Movements in finance lease borrowings during the year are as follows:
Opening Balance
Assets acquired via finance lease
Repayments
Closing balance
2018
$
179,720
162,599
(83,655)
258,664
2017
$
182,433
35,270
(37,983)
179,720
Note 15
Taxation
a) Income tax expense
The major components of income tax expense are:
Statement of comprehensive income
Current income tax
Current income tax charge (benefit)
Adjustments in respect of current income tax of previous years
Deferred income tax
Relating to origination and reversal of timing differences
Income tax expense (benefit) reported
in the statement of comprehensive income
Consolidated Group
2018
$
2017
$
88,851
73,579
(1,606,749)
(72,577)
2,166
164,596
(426,189)
(2,105,515)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 62 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 15
Taxation continued
b) Numerical reconciliation between aggregate tax expense
A reconciliation between tax expense and the product of accounting
Accounting loss before tax from continuing operations
Accounting profit/(loss) before tax from discontinued operations
Total before income tax
At the parent entity's statutory income tax rate of 30% (2017 - 30%)
Differential in overseas tax rate to Australian tax rate
Non-assessable income
Non-deductible expenses
Adjustments in respect of current income tax of previous years
Adjustments in respect of deferred tax in prior year
Impairment of intangible assets
Write back of Impairment of intangible assets
Derecognition of taxable temporary differences
Derecognition of carried forward tax losses
Deferred tax asset not recognised
Aggregate income tax expense attributed to: Continuing operations
Aggregate income tax expense attributed to: Discontinued operations
(9,383,317)
3,588,746
(5,794,571)
(1,738,371)
147,363
-
116,279
73,579
(45,708)
1,139,224
(1,497,034)
(14,664,009)
(36,827,691)
(51,491,700)
(15,447,510)
56,504
95,776
(54,661)
(295,806)
-
6,834,619
-
-
7,785,869
132,082
1,920,227
247,641
-
-
(1,025,209)
164,596
83,045
247,641
(2,105,515)
1,080,306
(1,025,209)
A deferred tax asset has not been recognised on the provision against the Department of Education
and Training (DET) receivable amounting to $20,977,645 (tax effected: $6,293,294), based on there
being uncertainty of the amount and timing of recoverability of the deferred tax asset.
A deferred tax asset has also not been recognised for unused tax losses amounting to $6,841,030
(tax effected: $2,052,309).
c) Deferred tax
Consolidated statement of
financial position
Consolidated statement of
profit or loss
2018
$
2017
$
2018
$
2017
$
Accrued expenses
Superannuation payable
Provision for leave balance
Provision for impairment of receivables
Provision for re-credits
Customer contracts
Licences
Losses available for offsetting against future taxable income
Other foreign entity deferrals
Deferred tax expense (benefit)
Net deferred tax assets
688,532
21,653
213,629
29,252
23,717
-
-
-
(17,532)
516,719
45,402
184,612
30,791
241,394
(106,538)
-
132,082
-
(171,813)
23,749
(29,017)
1,539
217,677
(106,538)
-
132,082
17,532
85,211
(6,792)
(6,230)
(33,690)
(6,725)
(241,394)
(105,555)
(249,210)
(132,082)
-
(781,678)
959,251
1,044,462
Reconciliation of net deferred tax asset /(liabilities) net
As of 1 July
Tax income during the period recognised in profit or loss
Discontinued operations
As at 30 June
2018
$
1,044,462
(2,166)
(83,045)
959,251
2017
$
262,784
426,189
355,489
1,044,462
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 63 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 16
Provisions
Current
Employee - annual leave
Other
(a) Movement in provisions
Consolidated Group
2018
2017
$
$
580,376
126,020
706,396
537,155
842,764
1,379,919
Movements in provisions other than those relating to annual leave, are set out below:
At 30 June 2016
Arising during the year
Utilised
At 30 June 2017
Arising during the year
Utilised / reversed
At 30 June 2018
Non-current
Provision for pension liability
Provision for long service leave
Provision for lease rental incentive
(b) Movement in provisions
Movements in provisions are set out below:
At 30 June 2016
Arising during the year
Utilised/provision released
At 30 June 2017
Arising during the year
Utilised/provision released
At 30 June 2018
13th Month Pay
provision
$
35,195
38,117
(35,195)
38,117
46,965
(38,117)
46,965
Provision for
re-credits
$
-
804,647
-
804,647
-
(725,592)
79,055
Total
$
35,195
842,764
(35,195)
842,764
46,965
(763,709)
126,020
Consolidated Group
2018
2017
$
$
94,742
163,044
2,306,201
2,563,987
109,282
104,068
2,157,077
2,370,427
Lease Rental
$
2,182,390
11,613
(36,926)
2,157,077
152,553
(3,429)
2,306,201
Pension
Liability
$
102,701
6,581
-
109,282
-
(14,540)
94,742
Long Service
Leave
$
13,612
99,426
(8,970)
104,068
58,976
-
163,044
Total
$
2,298,703
117,620
(45,896)
2,370,427
211,529
(17,969)
2,563,987
The Group has an obligation in the Philippines to provide for the retirement obligations of staff after 5
years of service should that person reach retirement age.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 64 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 16
Provisions continued
(c) Lease Rental Incentive
The lease of the Clark facility included a three year rent free period which concluded in October 2012.
The lease agreement is for a period of 25 years with an option to renew for another 25 years. The
agreement includes an escalation in lease payments of ten per cent, compounded on every increase,
starting on the fourth year and every three years thereafter.
Note 17
Issued Capital
688,552,154 fully paid ordinary shares; 1,116,000 partly paid ordinary shares
(2017: 597,017,765 fully paid)
Cost of capital raising
(a) Ordinary Shares
30 June 2016 share capital
Share issue - 8 November 2016
Share issue - 8 November 2016
Share issue - 17 November 2016
Share issue - 17 November 2016
Share issue - 24 November 2016
Share issue - 22 June 2017
Transaction costs relating to capital raising
Shares to be issued as repayment for loan - 30 June 2017
30 June 2017 share capital
Share issue - 18 September 2017
Share issue - 21 September 2017
Share issue - 11 October 2017
Share buy back - 8 December 2017
Share issue - 14 December 2017
Share buy back - 25 January 2018
Transaction costs relating to capital raising
30 June 2018 share capital
Consolidated Group
2018
2017
$
$
80,519,621
78,019,621
(2,434,337)
78,085,284
(2,276,781)
75,742,840
No. Shares
$
522,792,229
730,000
418,858
4,865,348
940,219
4,382,111
62,889,000
-
-
597,017,765
41,586,531
15,165,000
10,375,000
(10,857,142)
36,960,000
(1,695,000)
-
688,552,154
69,293,031
-
78,777
915,027
176,854
1,226,991
2,515,560
(126,862)
1,663,462
75,742,840
-
606,600
415,000
-
1,478,400
-
(157,556)
78,085,284
• On 8 November 2016, the company issued 730,000 sign-on shares at no cost to employees in lieu
of cash based remuneration and allowing management to participate in the growth of Site Group
International Limited as shareholders.
• On 8 November 2016, the company issued 418,858 bonus shares at an issue price of 18.8 cents.
The shares were issued at no cost to employees in lieu of cash based remuneration and allowing
management to participate in the growth of Site Group International Limited as shareholders
• On 17 November 2016, under the terms of the acquisition agreement for Wild Geese International
Pty Ltd, the company issued 4,865,348 shares to the vendor shareholder at the issue share price of
$0.19 per share.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 65 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 17
Issued Capital continued
• On 17 November 2016, under the terms of the acquisition agreement for Site Institute Pty Ltd, the
company issued 940,219 shares to the vendor shareholder at the issue share price of $0.19 per
share.
• On 24 November 2016, the company completed the issue of 4,382,111 shares to Directors at the
issue share price of $0.28 per share.
• On 22 June 2017, the company completed the issue of 62,889,000 shares under a private placement
of shares at $0.04 per share.
• On 18 September 2017, the Company completed the issue of 41,586,531 shares at $0.04 per share
in settlement of outstanding loans payable to Directors. Agreements for conversion of debt to equity
were signed prior to 30 June 2017, subject to the necessary shareholder approval which was granted
at an extraordinary general meeting of the Company on 15 September 2017. The financial effects
of this transaction, being a reduction to liabilities and an increase in share capital of $1,663,462,
were accounted for as at 30 June 2017 as the subsequent shareholder approval was considered to
be merely a governance exercise.
• On 21 September 2017 – the Company issued 15,165,000 shares under the Share Purchase Plan
at the issue price of $0.04 per share.
• On 11 October 2017 - the Company issued 10,375,000 shares under the Share Purchase Plan at
the issue price of $0.04 per share.
• On 8 December 2017 – the Company completed a buy-back of 10,857,142 shares issued under the
Employee Share Plan and sign on of shares forfeited by employees when they resigned from the
Group.
• On 14 December 2017 - the Company issued 36,960,000 shares under the Share Purchase Plan at
the issue price of $0.04 per share.
• On 21 January 2018 – the Company completed a buy-back of 1,695,000 shares issued under the
Employee Share Plan and sign on of shares forfeited by employees when they resigned from the
Group.
b) Options
i.
ii.
For information relating to the Site Group International Limited employee option plan,
including details of options issued, exercised and lapsed during the financial year and the
options outstanding at year-end. Refer to Note 22: Share-based Payments.
No options were issued to key management personnel during the financial year.
c) Capital Management
Management control the capital of the Group in order to ensure that the Group can fund its operations
and continue as a going concern. There are no externally imposed capital requirements. Management
effectively manages the Group’s capital by assessing the Group's financial risks and adjusting its
capital structure in response to changes in these risks and in the market.
During 2018, the Group has not paid any dividends.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 66 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 18
Capital and Leasing Commitments
(a) Operating Lease Commitments
Non-cancellable operating leases contracted for but not capitalised
Payable — minimum lease payments
not later than 12 months
between 12 months and 5 years
greater than 5 years
2018
$
2017
$
1,601,689
3,488,644
7,156,935
12,247,268
2,069,883
4,908,333
7,589,368
14,567,584
The Group has an operation through a subsidiary located in the Philippines. On 30 October 2009 the
subsidiary entered into a lease agreement covering a parcel of land where its office and education
facilities are located. The lease agreement is for a period of 25 years with an option to renew for
another 25 years. The agreement includes an escalation in lease payments of ten per cent,
compounded on every increase, starting on the fourth year and every three years thereafter.
In 2016 the Group entered into a four-year commercial lease for the head office location. This lease
has a life of four years with a renewal option included in the contract, there are no restrictions placed
upon the lessee by entering into these leases. In addition, the Group has entered into leases for
training facilities at Belmont (Perth) for five years, Gladstone for five years, Landsborough for five
years and Darwin for five years. Competent Project Management has a two-year lease at Johor in
Malaysia. All of the leases grant options for renewal at expiration of the current lease.
(b) Finance Lease
The Group entered into finance leases for the acquisition of motor vehicles during the year. These
leases have renewal terms but no purchase options or escalation clauses. Future minimum lease
payments under the finance lease together with the present value of the net minimum lease payments
are as follows:
Payable — lease payments
not later than 12 months
between 12 months and 5 years
greater than 5 years
2018
2017
Minimum
Payments
Present Value
of payments
Minimum
Payments
Present Value
of payments
$
$
$
$
106,466
177,757
-
92,156
166,508
-
284,224
258,663
72,341
94,929
-
167,270
73,168
106,552
-
179,720
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 67 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 19
Operating Segments
An operating segment is a component of the Group that engages in business activities from which it
may earn revenues and incur expenses (including revenues and expenses relating to transactions
with other components of the same entity), whose operating results are regularly reviewed by the
entity's chief operating decision maker to make decisions about resources to be allocated to the
segment and assess its performance and for which discrete financial information is available.
The Group has organised its business into four separate units based on the products and services
offered – the Chief Operating Decision Makers (“CODM”), being the directors and executive
management of the Group, review the results on this basis.
The four reportable business segments of the Group are:
- Site Skills Training - Domestic which delivers vocational training and assessment services
through five training facilities located at Perth, Gladstone, Darwin, Landsborough and Logan.
At these locations our experienced team assesses, up-skills and trains industry experienced
candidates in the mining and processing, oil and gas, construction, camp services,
hospitality and logistic sectors.
- Site Skills Training - International operates a 300,000m2 facility at Clark Freeport Zone in
the Philippines allowing the company to deliver Australian standard training in a low cost and
controlled environment. This facility has the capacity to complete large scale residential
training programs customised to meet client specific requirements. This division also
incorporates Site WorkReady being the recruitment and assessment division for international
clients. A facility in PNG is also being established with a consortium of the Enga Children’s
Fund and Orion group.
- Energy Services refers to the establishment of specialised energy training and services
delivered to the Oil and Gas industry.
- Tertiary Education delivers Diploma and certificate level courses at Site’s campuses in
Australia through the Site Institute brand and also English language courses and
conferences internationally through the TESOL Asia business.
The CODM monitors the operating results of its business units separately for the purposes of making
decisions about resource allocation and performance assessment. Segment performance is
evaluated based on operating profit/loss consistent with the operating profit/loss in the consolidated
financial statements. Group financing and corporate overheads are managed on a group basis and
not allocated to operating segments. Transfer prices between the operating segments are on an arm’s
length basis in a manner similar to transactions with third parties.
The following is an analysis of the revenue and results for the period, analysed by reportable
operating unit:
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 68 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 19
Operating Segments continued
Year ended 30 June 2018
Revenue
Site Skills
Training
(Domestic)
$
Site Skills
Training
(International)
$
Energy
Services
$
Tertiary
Education
$
Total
Segments
$
Corporate and
Eliminations
$
Total
$
Sales revenue - external customer
14,284,041
10,748,704
3,781,713
1,423,013
30,237,471
68,663
30,306,134
Sales revenue - inter-segment
Total segment revenue
-
40,304
-
-
40,304
(40,304)
-
14,284,041
10,789,008
3,781,713
1,423,013
30,277,775
28,359
30,306,134
Segment net operating (loss) before tax
(943,529)
173,134
(5,245,824)
(260,403)
(6,276,622)
(3,106,695)
(9,383,317)
Interest revenue
Interest expense
-
(9,201)
6,792
(7,813)
1,059
(25)
-
(44)
7,851
(17,083)
Depreciation and amortisation
(744,364)
(524,781)
(646,162)
(16,401)
(1,931,708)
8,346
(37,293)
(68,416)
16,197
(54,376)
(2,000,124)
EBITDA
(189,964)
698,936
(4,600,696)
(243,958)
(4,335,682)
(3,009,332)
(7,345,014)
Segment assets as at 30 June 2018
4,178,592
8,761,877
748,775
1,116,961
14,806,205
995,107
15,801,312
Segment liabilities as at 30 June 2018
2,408,416
3,511,333
249,556
531,507
6,700,812
2,151,393
8,852,205
Capital expenditure as at 30 June 2018
712,650
536,341
9,936
27,545
1,286,472
71,762
1,358,234
Year ended 30 June 2017
Revenue
Site Skills
Training
(Domestic)
$
Site Skills
Training
(International)
$
Energy
Services
Tertiary
Education
Total
Segments
Corporate and
Eliminations
$
$
$
$
Total
$
Sales revenue - external customer
11,933,746
9,029,449
9,212,098
601,344
30,776,637
(1,563,237)
29,213,400
Sales revenue - inter-segment
Total segment revenue
-
54,220
-
-
54,220
(54,220)
-
11,933,746
9,083,669
9,212,098
601,344
30,830,857
(1,617,457)
29,213,400
Segment net operating (loss) before tax
(1,512,742)
(22,197)
(7,124,885)
(1,068,931)
(9,728,755)
(4,935,254)
(14,664,009)
Interest revenue
Interest expense
Depreciation and amortisation
EBITDA
-
(12,307)
(895,328)
(605,107)
5,699
(10,119)
(553,263)
535,485
1,543
-
(678,019)
(6,448,409)
-
(510)
(19,965)
(1,048,455)
7,242
(22,936)
(2,146,575)
(7,566,486)
9,688
(283,696)
(71,224)
(4,590,022)
16,930
(306,632)
(2,217,799)
(12,156,508)
Segment assets as at 30 June 2017
3,812,216
8,161,944
6,145,686
1,106,843
19,226,689
1,442,457
20,669,146
Segment liabilities as at 30 June 2017
2,205,739
3,474,944
463,324
611,512
6,755,519
2,095,212
8,850,731
Capital expenditure as at 30 June 2017
392,465
642,173
5,500
15,797
1,055,935
14,608
1,070,543
The segment disclosures above do not include the discontinued operation. Refer to note 20 for more
information.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 69 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 19
Operating Segments continued
Reconciliation of loss
Segment loss
Inter-company management fees
Head office occupancy costs
Corporate employee benefits including Directors costs
Legal accounting and other professional fees
Travel costs
Other corporate costs
Corporate income
Group loss before tax from continuing operations
Reconciliation of assets
Segment operating assets
Corporate assets
Cash at bank
Security deposits
Intangibles
Other assets
Group operating assets
Assets of discontinued operations (note 20)
Total assets per statement of financial position
Reconciliation of liabilities
Segment operating liabilities
Corporate liabilities
Corporate trade payables
Interest bearing debt
Current tax liabilities
Other liabilities
Group operating liabilities
Liabilities of discontinued operations (note 20)
Total liabilities per statement of financial position
Consolidated Group
2018
2017
$
$
(6,276,622)
1,140,000
(160,348)
(2,804,049)
(340,361)
(199,611)
(779,031)
36,705
(9,383,317)
(9,728,755)
144,000
(150,212)
(2,682,843)
(381,661)
(224,164)
(1,662,198)
21,824
(14,664,009)
14,806,205
19,226,689
25,776
345,981
197,763
425,587
15,801,312
376,681
16,177,993
333,681
348,086
198,028
562,662
20,669,146
637,507
21,306,653
6,700,812
6,755,519
1,639,850
313,006
-
198,537
8,852,205
5,871,029
14,723,234
2,011,986
638,380
(815,515)
260,361
8,850,731
7,428,881
16,279,612
The following is an analysis of the revenue and results for the period, analysed by reportable
geographical location:
Year ended 30 June 2018
Revenue
Sales revenue - external
Sales revenue - inter segment
Total segment revenue
Australia
$
Asia
$
Corporate and
Eliminations
$
Total
$
17,813,989
-
17,813,989
12,423,482
40,304
12,463,786
68,663
(40,304)
28,359
30,306,134
-
30,306,134
Segment net operating (loss) before tax
(5,533,627)
(742,995)
(3,106,695)
(9,383,317)
Non-current assets
2,590,547
6,853,257
479,642
9,923,446
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 70 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 19
Operating Segments continued
Year ended 30 June 2017
Revenue
Sales revenue - external
Sales revenue - inter segment
Total segment revenue
Australia
$
Asia
$
Corporate and
Eliminations
$
Total
$
17,339,918
-
17,339,918
13,436,719
54,220
13,490,939
(1,563,237)
(54,220)
(1,617,457)
29,213,400
-
29,213,400
Segment net operating (loss) before tax
(1,978,554)
(186,221)
(12,499,234)
(14,664,009)
Non-current assets
6,864,940
6,960,864
451,668
14,277,472
Note 20
Discontinued Operations
In December 2016, the Group publicly announced the closure of Productivity Partners Pty Ltd’s
business, and the closure of VET FEE-HELP related campuses. The closure was a direct result of the
Commonwealth Government passed legislative changes.
With Productivity Partners Pty Ltd being classified as a discontinued operation, the company is no
longer included in the ‘tertiary education’ segment of the segment note. The results of Productivity
Partners Pty Ltd for the year are presented below.
Revenue
Expenses
Operating income
Impairment of intangible assets
Write back of provision for impairment of debtors
Profit / (loss) before tax from discontinued operations
Tax expense
Profit / (loss) after tax from discontinued operations
2018
$
-
(1,401,367)
(1,401,367)
-
4,990,113
3,588,746
(83,045)
3,505,701
2017
$
16,488,860
(11,357,175)
5,131,685
(16,006,480)
(25,952,896)
(36,827,691)
(1,080,306)
(37,907,997)
The major classes of assets and liabilities of Productivity Partners Pty Ltd as at 30 June 2018 are as
follows:
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 71 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 20
Discontinued Operations continued
Assets
Intangible assets
Property, plant and equipment
Debtors
Cash & short term deposits
Deferred tax asset
Other assets
Liabilities
Creditors
Interest bearing debt
Provisions
Current tax liabilities
The net cash flows incurred by Productivity Partners Pty Ltd are as follows:
Operating
Investing
Financing
Net cash outflow
Earnings per share
Basic and diluted (loss) / profit for the year from
discontinued operations (cents per share)
2018
$
-
5,643
34,393
(1,896)
246,463
92,078
376,681
2017
$
35,939
157,054
27,267
9,662
329,508
78,076
637,506
(5,782,041)
(9,933)
(79,055)
-
(5,871,029)
(4,940,018)
(15,262)
(814,577)
(1,659,024)
(7,428,881)
2018
$
3,716,941
(3,728,499)
-
(11,558)
2017
$
799,293
(2,611,252)
-
(1,811,959)
2018
2017
0.53
(7.14)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 72 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 21
Cash Flow Information
Reconciliation of net (loss) / profit after tax to net
cash flows from operations
Loss after income tax expense
Non cash items
Depreciation and amortisation
Foreign exchange loss
Share based payments expense
Impairment for non current assets
Net Interest accrued / (paid) on loans
Net (Loss) / Profit on sale of plant & equipment
Change in assets and liabilities
Decrease / (Increase) in receivables
Decrease / (Increase) in inventory
Decrease / (Increase) in prepayments
(Decrease) / Increase in payables and accruals
Increase / (Decrease) in provisions
Decrease / (Increase) in deferred tax assets
Increase / (Decrease) in current tax liabilities
Other working capital movements
Net cash used in operating activities
Consolidated Group
2017
2018
$
$
(6,042,212)
(50,466,491)
2,033,252
2,355,412
-
60,000
248,965
220,684
3,797,413
23,570,460
(32,326)
(15,575)
-
20,241
(199,448)
(24,050,729)
403,341
42,932,933
4,745
127,044
9,367
-
(73,481)
(18,183,162)
(395,539)
926,987
85,141
(679,627)
-
-
-
(1,729,118)
(727,824)
(93,722)
Note 22
Share Based Payments
The expense recognised for services received during the year is shown in the table below:
Share options expense
Expense/(write back) arising from equity-settled share-based payments
Consolidated Group
2018
2017
$
$
-
-
Employee services
Expense arising from the amortisation of employee sign on and bonus shares
Expense arising from the amortisation of the employee share plan
Total expense arising from share based payment transactions
60,000
-
60,000
216,886
3,798
220,684
(a) Employee share plan
In November 2011 the Shareholders approved the establishment of an Employee Share Plan that
would enable employees, directors and eligible associates to subscribe for shares in the Company.
Under the terms of the plan an eligible person is offered shares in the Company at a price determined
by the board ($0.20 per share) with a corresponding interest free loan to assist the person to
subscribe for the shares.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 73 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 22
Share Based Payments continued
The shares are escrowed in two tranches with 50% being escrowed for a minimum of 12 months and
50% being escrowed for a minimum of 24 months. Subsequent to these minimum restriction periods,
the shares are available for release from escrow (i.e. a vested and exercisable option) on the
repayment of the loan, and subject to continuation of employment (including acting as an associate or
director) at the time of repayment.
For accounting purposes these shares are treated as if these were share options, as whilst the shares
have been issued to the employee their rights to access the shares are subject to both a time based
requirement (continued employment to escrow dates) and valuation uncertainty (share price exceeds
issue price at date of escrow release). Accordingly, shares issued under the plan are valued using a
Black Scholes Option Valuation model with the expense being recognised over the escrow period as
a share based payment.
2018
2017
Outstanding at the beginning of the period
11,490,000
11,490,000
Granted during the period
Forfeited during the period
Expired during the period
-
1,695,000
-
-
-
-
Outstanding at the end of the period
9,795,000
11,490,000
Exercisable (vested) at the end of the period
9,795,000
11,490,000
All shares are exercisable at 20 cents per share. No expenditure was recognised under the Employee
Share Plan in either the current period (2017:$3,798), and there were no grants of shares under the
Employee Share Plan during the current or comparative periods.
(b) Employee sign-on and bonus shares
From time to time the Group issues shares to employees as an incentive for accepting employment
with the group. Shares are issued at the volume weighted average price (VWAP) of the Group’s stock
trading for the period prior to issuance. Shares are subject to escrow periods which vary depending
on the contracts with the employee, and the value of the shares is recognised as an expense over the
escrow period subject to continuing employment with the Group. No such shares have been issued in
either the current or comparative financial years. Total expenditure of $60,000 was recognised in the
current period relating to employee sign-on and bonus shares issued in comparative years.
(c) Share-based payments to service providers
In connection with the issuance of shares on 22 June 2017 (refer note 17), the Group issued shares
in part payment of a fee for placement services provided. A total of 2,000,000 shares were issued at
an issue price of $0.04 per share. The resultant cost of $80,000, which reflected the fair value of the
placement services provided, was recorded in equity. No share-based payment arrangements were
entered into with service providers in the current period.
Note 23
Events after the Reporting Period
Other than as disclosed elsewhere in this report, there have been no significant events after balance
date.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 74 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 24
Related Party Transactions
(a) The Group's main related parties are as follows:
i.
ii.
Entities exercising control over the Group:
The ultimate parent entity, which exercises control over the group, is Site Group International
Ltd which is incorporated in Australia.
Key Management Personnel:
Any person(s) having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any director (whether executive or
otherwise) of that entity are considered key management personnel.
For details of disclosures relating to remuneration of key management personnel, refer to
Note 5.
(b) Transactions with related parties:
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
(c) Amounts outstanding from related parties
As disclosed in the remuneration report, Directors and Key Management Personnel participate in the
employee share plan whereby they are offered shares in the Company with a corresponding interest
free loan. The loan from the Company must be repaid prior to the shares being sold or transferred by
the employee. The below table details the Director and Key Management Personnel participation:
Name
Shares
Issued
Share Issue
Price
Total Value
Loan from
Company
Vern Wills
Darryl Somerville
Nicasio Alcantara
Craig Dawson
Blake Wills*
2,000,000
1,000,000
1,000,000
1,000,000
500,000
$0.20
$0.20
$0.20
$0.20
$0.20
400,000
200,000
200,000
200,000
100,000
400,000
200,000
200,000
200,000
100,000
*The shares issued to Blake Wills were bought back and cancelled on cessation of his employment with the group, in
accordance with plan terms.
(d) Other transactions with related parties
During the current and comparative periods, the group made use of an unsecured loan facility with
Wayburn Holdings Pty Ltd, a company associated with Managing Director and CEO Mr Vernon Wills.
The loan facility limit was $2.35m to 31 December 2016, and $1.32m from that point, repayable on the
earlier of collection of the receivable from the Commonwealth Department of Education and Training
(refer note 9), or February 2018. To date, revised terms have not been agreed for the facility and the
outstanding balance as disclosed below is repayable at call. Interest is charged on the loan at a fixed
rate of 7% per annum.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 75 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 24
Related Party Transactions continued
Movements in the loan balance during the year are as follows:
Opening Balance
Drawdowns
Interest accrued during the year
Principal repayment through issuance of shares*
Principal Repayments (cash)
Closing balance
2018
$
580,842
-
25,900
(246,000)
(93,820)
266,922
2017
$
2,464,308
-
-
(1,776,991)
(106,475)
580,842
*Details of shares issued in settlement of outstanding loan amounts are as follows:
Date
Number of
Share
Price
Shares
3,667,825 $0.28 1,026,991
750,000
246,000
24/11/2016
30/06/2017 18,750,000 $0.04
6,150,000 $0.04
24/09/2017
Amount
$
The share price at which the shares were issued represents the fair value of the shares at the date of
issue and reflective of the external raising to other shareholders.
During the current and comparative periods, the group made use of unsecured loan facilities with
Non-Executive Directors. Interest charged on the loans was at a fixed rate of 10% per annum.
Movements in the loan balances during the year are as follows:
Opening Balance
Drawdowns
Interest accrued during the year
Principal repayment through issuance of shares*
Principal Repayments (cash)
Interest repayments (cash)
Closing balance
2018
$
57,539
45,000
1,229
-
(45,000)
58,768
-
2017
$
200,000
913,462
57,539
(1,113,462)
-
-
57,539
*Details of shares issued in settlement of outstanding loan amounts are as follows:
Date
Share
Number of
Shares
Price
714,286 $0.28
24/11/2016
30/06/2017 22,836,550 $0.04
Amount
$
200,000
913,462
The share price at which the shares were issued represents the fair value of the shares at the date of
issue and reflective of the external raising to other shareholders.
At 30 June 2018 the Company had no outstanding balances with Non-Executive Directors.
On 21 June 2018, the Company announced a financing facility of US$4million with Punta Properties,
a company associated with Non-Executive Director Nicasio Alcantara. Repayment of funds drawn
under the facility will be via cash or equity to be issued at the last issue price of 4 cents per share
subject to approval of shareholders. Interest charged on the loan will be at a fixed rate of 10% per
annum.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 76 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 24
Related Party Transactions continued
In addition, the Company and Punta Properties agreed to a performance based incentive to develop
and execute an optimisation plan for the Group’s Philippines assets, associated businesses and
international expansion. This incentive is payable on the total project value achieved from the
optimisation plan at 5% of the total project value achieved. Should the plan reach a total project value
of US$30m a further 5% fee of the gross value is payable to Mr Alcantara. There is no retainer
applicable or payable to this agreement. The agreement will be subject to shareholder approval at the
next general meeting of shareholders.
Note 25
Financial Risk Management
The group’s financial instruments consist mainly of deposits with banks, accounts receivable and
payable, leases and borrowing facilities. The totals for each category of financial instruments,
measured in accordance with AASB 139 as detailed in the accounting policies to these financial
statements, are as follows:
Financial assets
Cash and cash equivalents
Loans and receivables
Other non-current financial assets
Total financial assets
Financial liabilities
Financial liabilities at amortised cost
Current
— Trade and other payables
— Borrowings
Non-current
— Trade and other payables
— Interest bearing debt
Total financial liabilities
(a) Liquidity Risk
Note
Consolidated Group
2018
2017
$
$
8
9
13
14
13
14
1,533,437
3,334,449
147,237
5,015,123
1,528,542
3,709,967
90,022
5,328,531
4,659,104
359,078
4,617,609
711,548
5,595,083
166,508
10,779,773
5,120,281
106,552
10,555,990
The tables below reflect an undiscounted contractual maturity analysis for financial liabilities. Cash
flows realised from financial assets reflect management’s expectation as to the timing of realisation.
Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table
to settle financial liabilities reflect the earliest contractual settlement dates and do not reflect
management’s expectations that banking facilities will be rolled forward.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 77 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 25
Financial Risk Management continued
Within 1 Year
1 to 5 Years
Over 5 Years
Total
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
2018
$
2017
$
Financial liabilities due for payment
Trade and other payables
Borrowings - Principal
- Interest
Other non-current financial liabilities - Principal
- Interest
Total expected outflows
Financial assets - cash flows realisable
Cash and cash equivalents
Loans and receivables
Other non-current financial assets
Net (outflow) / inflow
4,659,104
324,315
49,073
-
-
5,032,492
4,617,609
711,548
-
-
-
5,329,157
5,595,083
5,120,281
-
-
-
-
166,508
11,249
5,772,840
106,552
-
5,226,833
1,533,437
3,334,449
-
1,528,542
3,709,967
-
4,867,886
(164,606)
5,238,509
(90,648)
-
-
147,237
147,237
(5,625,603)
-
-
90,022
90,022
(5,136,811)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,254,187
324,315
49,073
166,508
11,249
10,805,332
9,737,890
711,548
-
106,552
-
10,555,990
1,533,437
3,334,449
147,237
5,015,123
(5,790,209)
1,528,542
3,709,967
90,022
5,328,531
(5,227,459)
The outflow indicated above within 1 year will be funded via drawdowns on the $US4million loan
facility available and unused at 30 June 2018, the terms of which are disclosed in note 24. The
outflow in subsequent years is attributable to financial liabilities which will only require settlement
where a corresponding inflow of economic benefits is received in settlement of fully impaired
receivables, as disclosed in note 9.
(b) Interest rate risk
The Group's exposure to market interest rates relates primarily to the Group's holding of cash as
borrowings are under fixed interest agreements. The following table depicts the sensitivity of the
Group’s results to reasonably possible changes in interest rates.
Financial assets
Cash and cash equivalents
Consolidated
+ 1% (100 basis points)
- .5% (50 basis points)
(c) Foreign currency risk
Consolidated Group
2018
2017
$
$
1,533,437
1,528,542
Post Tax Profit
higher / (lower)
Other Comprehensive
Income
higher / (lower)
2018
$
10,734
(5,367)
2017
$
10,700
(5,350)
2018
$
-
-
2017
$
-
-
Foreign currency risk is the risk that the fair value of the future cash flows of a financial instrument will
fluctuate because of change in foreign exchange rate. The Group is exposed to foreign currency risk
on cash balances held in US Dollars (USD). At 30 June 2018 the Group had total cash and cash
equivalents denominated in USD of USD 547,263 (2017:145,979).
The following table shows the foreign currency risk on the financial assets and liabilities of the
Group’s operations denominated in currencies other than the functional currency of the operations.
higher / (lower)
Income
higher / (lower)
2018
$
2017
$
2018
$
2017
$
Consolidated
USD Rate+15%
USD Rate-15%
95,880
(70,868)
20,102
(14,858)
-
-
-
-
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 78 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 25
Financial Risk Management continued
(d) Price risk
The group is not materially exposed to price risk.
(e) Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents,
trade and other receivables. The Group’s exposure to credit risk arises from potential default of the
counterparty, with a maximum exposure equal to the carrying amount of the financial assets (as
outlined in each applicable note).
The Group does not hold any credit derivatives to offset its credit exposure.
The Group trades only with recognised, creditworthy third parties, and as such collateral is not
requested nor is it the Group’s policy to securitise its trade and other receivables. In addition,
receivable balances are monitored on an ongoing basis with the result that the Group’s experience of
bad debts has not been significant.
Note 26
Retained Earnings/ (Losses) and Reserves
(a) Movement in retained earnings/ (losses) and reserves
Balance 1 July
Net (loss) / profit for the period
Other comprehensive income / (loss)
Balance 30 June
(b) Other reserves
At 30 June 2016
Foreign currency translation
Share based payment
At 30 June 2017
Foreign currency translation
Share based payment
At 30 June 2018
(c) Nature and purpose of reserves
Consolidated Group
2018
2017
$
$
(72,724,863)
(6,042,212)
54,492
(78,712,583)
(22,279,765)
(50,466,491)
21,393
(72,724,863)
Consolidated Group
Share
based
payments
$
1,230,991
Foreign
currency
translation
$
Total
$
-
1,102,725 2,333,716
(545,336)
(545,336)
220,684
220,684
1,451,675 557,389 2,009,064
12,994 12,994
60,000
2,082,058
-
60,000
1,511,675
570,383
-
-
Foreign currency translation reserve
The foreign currency translation reserve records exchange differences arising on translation of a
foreign controlled subsidiary.
Share based payments reserve
The share based payments reserve is used to record the value of share based payments provided to
employees, including KMP, as part of their remuneration. Refer to note 22 for further details.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 79 of 89
Notes to the Financial Statements for the Year Ended 30 June 2018 continued
Note 27
Company Details
The registered office of the company is:
Site Group International Limited
Level 4, 488 Queen Street,
Brisbane Qld 4000
The principal places of business are:
Site Skills Training:
• 219 Forestry Road, Landsborough, Qld. 4550
• 17-19 South Tree Drive, Gladstone, Qld. 4680
• 72-80 Belgravia Street, Belmont, WA. 6104
• 1 Campion Road, East Arm NT 0822
• 1-5 Nestor Drive, Meadowbrook, QLD 4131
• Centennial Road, Clark Freeport Zone, Pampanga, Philippines 2023
Competent Project Management
• 112, Robinson Road #8-01, Singapore 068909
• 17G, Jalan Hijauan 3, Horizon Hills, 79100 Nusajaya, Johor
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 80 of 89
Directors' Declaration
In accordance with a resolution of the directors of Site Group International Limited, I state that:
1. In the opinion of directors:
a)
the financial statements and notes of Site Group International Limited for the financial year
ended 30 June 2018 are in accordance with the Corporations Act 2001, including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 30 June 2018 and of
its performance for the year ended on that date; and
comply with Accounting Standards and the Corporations Regulations 2001; and
b)
the financial statements and notes also comply with International Financial Reporting
Standards as disclosed in Note 1a (a); and
c) subject to the matters discussed in Note 1a (b) there are reasonable grounds to believe that
the Company will be able to pay its debts as and when they become due and payable.
2. This declaration has been made after receiving the declarations required to be made to the
directors by the chief executive officer and chief financial officer in accordance with section 295A
of the Corporations Act 2001 for the financial year ended 30 June 2018.
On behalf of the Board
Vernon Wills
Director
Brisbane, 31 August 2018
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 81 of 89
Independent Auditor’s Report to the Members of Site Group International Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Site Group International Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June 2018, the
consolidated statement of comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, notes to the financial statements including a
summary of significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(a)
(b)
giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its financial
performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board’s APES 110 Code of Ethics for Professional Accountants “the Code” that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor’s
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial report of the current period. These matters were addressed in the context of our audit of the
financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 82 of 89
Key Audit Matter
Application of the going concern assumption
Refer to note 1a(b) going concern
The Directors have concluded that in their
opinion there are reasonable grounds to
believe that the Group has the ability to pay
its debts as and when they fall due and
realise the value of the assets in the ordinary
course of business.
Accordingly they have prepared the financial
statements on a going concern basis as
disclosed in note 1a(b).
going
concern
assumption
The
is
fundamental to the basis of preparation of
the financial statements. Assertions made by
the Directors in forming their conclusion,
including forecast cash flows and unused
borrowing facilities, are key elements of this
assessment and considerable audit attention
was directed to verifying these.
Accordingly, our consideration of this matter
and the related disclosures is considered to
be a key audit matter.
Key Audit Matter
Impairment testing for non-current assets
Refer to note 1b, note 11(c), and note 12(b)
Impairment testing for goodwill is required
to be completed annually under Australian
Accounting Standard AASB 136 Impairment
of Assets. This standard also requires
impairment testing to be conducted for
other non-current assets where there is an
indicator that those assets may be impaired.
Impairment testing was completed over
non-current assets with a combined value of
$7.133m.
Impairment testing for non-current assets is
a key audit matter due to the percentage of
the group’s
to
total assets
impairment testing (44%), and the degree of
estimation and assumptions (as disclosed in
note 11(c) and note 12(b)) required to be
made by the group, specifically concerning
discounted cash flows.
subject
How our audit addressed the key audit matter
Our procedures included, amongst others:
• Obtaining an understanding of the entity level controls
in place directed at ensuring the Group continues to
operate as a going concern, and evaluating the design
and implementation of those controls;
Evaluating whether
regarding
supported
assessment;
conclusions
the Directors’
the going concern assumption were
concern
by management’s
going
•
• Agreeing the cash flow forecast used in the going
concern assessment to the FY19 budget;
them
to historical actual
• Assessing key inputs into the cash flow forecast by
comparing
results,
assumptions and estimates used elsewhere in the
preparation of the financial statements, and customer
available
other
contracts,
commitments,
information supporting forecast cash flows;
Considering the historical reliability of the group’s cash
flow forecasting process;
Considering the range of cash flow sensitivities to the
conclusion reached by the directors;
or
•
•
• Assessing the possible mitigating actions identified by
management in the event that actual cash flows are
below forecast,
including verification of unused
financing facilities to loan agreements; and
• Assessing the adequacy of the disclosures made by the
Directors regarding the going concern assumption and
available financing.
How our audit addressed the key audit matter
Our procedures included, amongst others:
•
• Obtaining an understanding of the controls over the
valuation of non-current assets, and evaluating the
design and implementation of those controls;
Checking the mathematical accuracy of the Board
approved FY19 cash flow forecasts;
Confirming consistency of the impairment testing
calculations and inputs applied by the group with the
requirements of AASB 136;
•
• Assessing the key assumptions within the impairment
including forecast cash flows,
testing calculations
growth rates, discount rates and terminal values;
• Applying our knowledge of
the business and
information
•
corroborated our work with external
where possible;
Performing sensitivity analysis in respect of the key
assumptions and assessing the potential impact of
reasonably possible change to those assumptions; and
• Assessing the adequacy of disclosures relating to the
impairment testing in notes 1b, note 11(c) and note
12(b).
Other Information
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2018, but does not include the financial report
and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and
fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such
internal control as the directors determine is necessary to enable the preparation of the financial report that
gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue
as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the [Group] or to cease operations, or has no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with the Australian Auditing Standards will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of this
financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that
may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a
material uncertainty exists, we are required to draw attention in our auditor’s report to the related
disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 19 to 26 of the directors’ report for the year ended
30 June 2018. In our opinion, the Remuneration Report of Site Group International Limited for the year ended
30 June 2018 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.
PITCHER PARTNERS
NIGEL BATTERS
Partner
Brisbane, Queensland
31 August 2018
Shareholder Information
1
Twenty Largest Shareholders
(i) Ordinary Shares Inclusive of Escrowed Ordinary Shares
As at 16 August 2018, there are 678,287,045 ordinary shares and an additional 10,265,109 ordinary
shares subject to escrow restrictions.
The names of the twenty largest holders of ordinary shares including the ordinary shares in escrow
are listed below:
Name
NATIONAL NOMINEES LIMITED
MR VERNON ALAN WILLS + MS JILLAINE PATRICE WILLS
TALBOT GROUP INVESTMENTS PTY LTD
WAYBURN HOLDINGS PTY LTD
MR VERNON ALAN WILLS + MS JILLAINE PATRICE WILLS
LINWIERIK SUPER PTY LTD
CAMERON RICHARD PTY LTD
SMITHLEY SUPER PTY LTD
JGC ASSETS PTY LTD
DBS VICKERS SECURITIES (SINGAPORE) PTE LTD
CAMERON RICHARD PTY LTD
STUART ANDREW PTY LTD
JGC ASSETS PTY LTD
MYALL RESOURCES PTY LTD
LINWIERIK INVESTMENTS PTY LTD
NICASIO ALCANTARA
THE SUMMIT HOTEL BONDI BEACH PTY LTD
GANBROS PTY LTD
MR GRANT HARRY O'KEEFE + MRS CATHERINE MARIA O'KEEFE
DCEC PTY LTD
No. of
Ordinary
Shares Held
% of Issued
Capital
72,179,561
10.50%
44,140,703
42,171,121
41,108,142
29,414,188
21,000,000
20,712,500
19,916,289
16,746,700
16,676,766
16,571,594
14,682,068
12,581,201
11,250,000
10,200,000
9,371,325
7,137,368
6,811,823
6,452,745
6,390,176
6.42%
6.13%
5.98%
4.28%
3.05%
3.01%
2.90%
2.44%
2.43%
2.41%
2.14%
1.83%
1.64%
1.48%
1.36%
1.04%
0.99%
0.94%
0.93%
(ii) Ordinary Shares
The names of the twenty largest holders of fully paid ordinary shares are listed below:
Name
NATIONAL NOMINEES LIMITED
MR VERNON ALAN WILLS + MS JILLAINE PATRICE WILLS
TALBOT GROUP INVESTMENTS PTY LTD
WAYBURN HOLDINGS PTY LTD
MR VERNON ALAN WILLS + MS JILLAINE PATRICE WILLS
LINWIERIK SUPER PTY LTD
No. of
Ordinary
Shares Held
% of fully
paid
shares
72,179,561
10.66%
44,140,703
42,171,121
41,108,142
29,414,188
21,000,000
6.52%
6.23%
6.07%
4.34%
3.10%
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 86 of 89
Shareholder Information continued
Name
No. of
Ordinary
Shares Held
% of fully
paid shares
CAMERON RICHARD PTY LTD
SMITHLEY SUPER PTY LTD
JGC ASSETS PTY LTD
DBS VICKERS SECURITIES (SINGAPORE) PTE LTD
CAMERON RICHARD PTY LTD
STUART ANDREW PTY LTD
JGC ASSETS PTY LTD
MYALL RESOURCES PTY LTD
LINWIERIK INVESTMENTS PTY LTD
NICASIO ALCANTARA
THE SUMMIT HOTEL BONDI BEACH PTY LTD
GANBROS PTY LTD
MR GRANT HARRY O'KEEFE + MRS CATHERINE MARIA O'KEEFE
DCEC PTY LTD
20,712,500
19,916,289
16,746,700
16,676,766
16,571,594
14,682,068
12,581,201
11,250,000
10,200,000
8,371,325
7,137,368
6,811,823
6,452,745
6,390,176
3.06%
2.94%
2.47%
2.46%
2.45%
2.17%
1.86%
1.66%
1.51%
1.24%
1.05%
1.01%
0.95%
0.94%
(iii) Escrowed Shares
The names of the top twenty holders of the escrowed shares are listed below:
Name
MR VERNON ALAN WILLS
NICASIO ALCANTARA
CRAIG ANTHONY DAWSON
SHAUN SCOTT
DARRYL SOMERVILLE
BRETT MCPHEE
JOHN GILBERT RODGERS
ISMAIL TAHIR
NOEL CHENEY
MR JASON STUART ANFIELD
MR JARROD PETER BELCHER
MS KATIE HURSE
MR JAMIE VERNON WILLS
MR JITENDRA ARJANBHAI JASALIYA
MOHAMMED AKBERY
MR CRAIG FORD
CHRISTOPHER LAMBERT
MITCH KELLY
REBECCA BRODERICK
JONATHON LAMBERT
No. of
Escrowed
Shares Held
% of
escrowed
shares
2,000,000
19.48%
1,000,000
1,000,000
1,000,000
1,000,000
750,000
750,000
600,000
500,000
376,087
300,000
300,000
300,000
94,022
50,000
50,000
50,000
25,000
20,000
20,000
9.74%
9.74%
9.74%
9.74%
7.31%
7.31%
5.85%
4.87%
3.66%
2.92%
2.92%
2.92%
0.92%
0.49%
0.49%
0.49%
0.24%
0.19%
0.19%
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 87 of 89
Shareholder Information continued
(iii) Partly Paid Shares
There are 1,116,000 partly paid shares, paid to $0.01, held by eight individual shareholders. $0.24 per
share may be called up in the event of winding up the company.
The names of the holders are listed below:
Name
BARON INVESTMENTS PTY LIMITED
BARON NOMINEES PTY LTD
QUEVY HOLDINGS PTY LTD
M B HUNNIFORD
ESTATE LATE PETER GAME
ESTATE LATE PETER AYLWARD GAME
P C TOOMEY
R TOOMEY
Total of partly paid shares issued
2
Distribution of Equity Securities
Analysis of numbers of holders by size of holding:
No of partly
paid shares
held
% of
Partly
Paid
Shares
488,376
400,000
195,624
24,000
2,000
2,000
2,000
2,000
1,116,000
43.76%
35.84%
17.53%
2.15%
0.18%
0.18%
0.18%
0.18%
100%
(i) Fully paid ordinary shares
Distribution
Number of Holders
Number of Shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Greater than 100,000
Totals
83
55
84
186
42,988
159,734
755,137
8,735,223
255
677,743,072
663
687,436,154
(ii) Partly paid shares, paid to $0.01
Distribution
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
Greater than 100,000
Totals
Number of Holders
Number of Shares
-
4
-
1
3
8
-
8,000
-
24,000
1,084,000
1,116,000
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 88 of 89
Shareholder Information continued
(iii) Escrowed ordinary shares
Distribution
Number of Holders
Number of Shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Greater than 100,000
Totals
(iv) Unmarketable parcels
-
-
-
-
11
13
-
-
389,022
9,876,087
24
10,265,109
Minimum $500 parcel at $0.25 per share
20,000
252
1,379,130
Minimum
parcel size
Holders
Shares
3
Voting Rights
The voting rights attaching to each class of equity securities are set out below:
Ordinary shares: Subject to any rights or restrictions for the time being attached to any class
of shares, at a meeting of shareholders each shareholder entitled to vote may vote in person
or by proxy or attorney or, being a corporation, by representative duly authorised under the
Corporations Law, and has one vote on a show of hands and one vote per fully paid share on
a poll.
4
Substantial Shareholder
Substantial shareholder notices lodged with the Company:
Substantial Shareholder
Number of Shares
Mr Vernon Alan Wills, Ms Jillaine Patrice Wills and
Wayburn Holdings Pty Ltd
Peter Jones, Helen Jones, Cameron Richard Pty
Ltd and Stuart Andrew Pty Ltd
Talbot Group Investments Pty Ltd
124,395,630
56,819,466
42,171,121
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2018
Page 89 of 89