Site Group International Limited
and Controlled Entities
ABN 73 003 201 910
Annual report – 30 June 2020
Table of Contents
Annual General Meeting ....................................................................................................................... 3
Managing Director and CEO Letter ..................................................................................................... 3
Corporate Directory .............................................................................................................................. 5
Directors’ Report ................................................................................................................................... 8
Principal Activity ................................................................................................................................... 9
Operating and Financial Review ........................................................................................................ 10
Corporate Governance Statement ..................................................................................................... 27
Auditor’s Independence Declaration ................................................................................................ 34
Statement of Profit or Loss and Other 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 2020 ........................................... 39
Directors' Declaration ......................................................................................................................... 96
Independent Auditor’s Report ........................................................................................................... 97
Shareholder Information .................................................................................................................. 100
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 2 of 103
Annual General Meeting
The Annual General Meeting of the Company will be held at
Time:
11:00am
Date:
Thursday, 26 November 2020
Location:
488 Queen Street,
Brisbane QLD 4000.
Managing Director and CEO Letter
Results for Site Group International Limited show a revenue line of $27,259,059 compared to
$30,913,290 in the prior corresponding period.
The earnings before interest, taxes, depreciation and amortisation (EBITDA) was a loss of $5,476,962
compared to a loss of $4,495,157 in the prior corresponding period.
Both of these years’ results have included material expenditure on legal fees and significant executive
time dealing with the associated proceedings.
In a year where Site reached the milestone of 200,000 enrolments across the group, the results continue
to be impacted by the ongoing legal action with the regulator, the associated legal costs and the impact
on some customers. Additionally, the unexpected impact of COVID-19 on industries around the world
have substantially impacted face to face contact. As a provider of essential services to industry, Site
has continued with significant training albeit at reduced numbers and margins.
Site remains confident in its position surrounding its commitment to continuous improvement and
meeting industries needs for a suitably trained workforce.
Regulatory Actions
Litigation with regulatory bodies ACCC in the Federal Court in June and ASQA in the Administrative
Appeals Tribunal in July remain in process with decisions expected possibly this year. Site has no view
as towards outcome or possible further actions or appeals by any parties involved.
COVID-19
As previously announced and as shareholders are aware, COVID-19 has had significant effects in
economies around the world.
Site continues to provide services in most jurisdictions albeit in reduced or intermittent delivery in some
places such as Philippines, Myanmar and PNG. Overall International revenues have decreased by 24%,
however recent renewals of contracts in Kingdom of Saudi Arabia for 2 years providing revenues of
circa AUD$7.5m and likely renewal of Engineering Work Experience Program (EWEP) in Myanmar are
encouraging. Site has also renewed negotiations with GE for Clark based technician programs
throughout FY2021.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 3 of 103
Site has reasonable expectations of further significant training contracts in Kingdom of Saudi Arabia
and Bahrain with additional early stage discussions in several other countries in the region.
Expectations are that the Middle East and North Africa (MENA) regions will lead to significant growth
for the international business including the delivery of a Safe Live Process Plant (SLPP) in FY2021.
Site has also renewed negotiations with GE for Clark based technician programs throughout FY2021
In Australia, the essential nature of the Industry based programs is seeing significant return towards
previous levels of training required to service Australia’s largest resources projects.
Clark Property
As previously announced Site is pursuing the potential development of its Clark leasehold 30 hectare
property as part of it strategy to maximise international assets values. Whilst the progress has been
interrupted by COVID-19 and the closure of Government offices in the region, there are now signs of
the agencies located outside Metro Manila returning to work. There is also a return to commercial
discussions around the property and Clark in general with several parties renewing discussions around
partnering and investing in the project.
I would like to thank our ongoing directors Peter Jones (Chairman of Site Group International Limited)
and Nicasio Alcantara (Chairman of Site’s International Operations), CFO and Company Secretary
Craig Dawson, all management and staff and equally all shareholders for their ongoing support.
Vernon Wills
Managing Director and CEO
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 4 of 103
Corporate Directory
Directors
Company Secretary
Chief Executive Officer
Principal registered office in Australia
Principal place of business
Share registry
Auditor
Solicitors
Bankers
Peter Jones (Chairman)
Vernon Wills
Nicasio Alcantara
Craig Dawson
Vernon Wills
Site Group International Limited
Level 4, 488 Queen Street
Brisbane Qld 4000
Telephone: +61 7 3114 5188
Site Group International Limited
Level 4, 488 Queen Street
Brisbane Qld 4000
Telephone: +61 7 3114 5188
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 2020
Page 5 of 103
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Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 6 of 103
SITE GROUP INTERNATIONAL LIMITED
AND CONTROLLED ENTITIES
ABN: 73 003 201 910
Financial Report for the Year Ended
30 June 2020
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 7 of 103
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 2020.
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 2019
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 was
previously also a director of ASX listed Biotech Capital Limited (resigned 26 November 2019).
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 8 of 103
Directors’ Report continued
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.
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
Mr Jones is a Chartered Accountants and Mr Alcantara has extensive corporate experience and is
qualified to serve on this Committee.
Nomination and Remuneration Committee (NRC)
• Peter Jones (c)
• Nicasio Alcantara
(c) Designates the chairman of the committee.
Meetings of Committees
Vernon Wills
Board
No.
5
Attended
No.
5
Nicasio Alcantara
5
5
AC
No.
2
2
Attended
No.
2*
2
NRC
No.
1
1
Attended
No.
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
1
2
1
5
5
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 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 2020
Page 9 of 103
Directors’ Report continued
Operating and financial review
Group
Site business growth in revenue is demonstrated in the below graph. Total revenue from operations for
the year ended 30 June 2020 was down 12% to $27,259,059 (2019: $30,913,290).
Revenue contribution and activity by each segment is illustrated in the two charts below. This highlights
the growing revenue from the tertiary education business, and the decline in the revenue of the other
business units.
Gross Revenue by Segment 30 June 2020 versus 30 June 2019 (excludes eliminations)
A fall in revenues in excess of $2,000,000 was recorded in the June quarter alone as a result of the
COVID-19 pandemic.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 10 of 103
Directors’ Report continued
Operating and financial review continued
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
Net profit / (loss)
add back
Depreciation and amortisation
Interest expense
Income tax (benefit) / expense
deduct
Interest income
EBITDA*
Non recurring items
30-Jun
2020
$
27,259,059
2019
$
Change 20-19
%
30,913,290
( 10,264,692)
( 4,742,968)
2,580,836
2,182,472
48,713
1,413,716
415,197
( 1,514,919)
24,291
66,183
( 5,476,962)
( 4,495,157)
( 12%)
116%
83%
426%
-
( 63%)
22%
Impairment of PP&E, intangibles and right of use assets
Write down / (reversal of write down) of DET debtor
1,096,000
-
-
-
EBITDA before non recurring items
Operating cash inflow /(outflow)
( 4,380,962)
( 4,495,157)
( 3,771,644)
( 2,696,230)
( 3%)
-
30-Jun
2018
$
30,306,134
( 6,042,212)
2,033,252
55,744
247,641
Change 19-18
%
2%
30-Jun
2017
$
29,213,400
( 22%)
( 50,466,491)
( 30%)
645%
-
2,355,412
307,304
( 1,025,209)
16,197
309%
16,930
( 3,721,772)
21% ( 48,845,914)
3,797,413
( 4,990,113)
( 4,914,472)
23,570,460
33,944,396
( 9%)
8,668,942
( 727,824)
-
( 93,722)
Change 18-17
%
4%
( 88%)
( 14%)
( 82%)
-
( 4%)
( 92%)
-
-
* 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
For the year ended 30 June 2020, Site Group International Limited reported a loss after tax of
$10,264,692 compared to an after tax loss of $4,742,968 in the previous corresponding period. The
earnings before interest, taxes, depreciation and amortisation (EBITDA) was a loss of $5,476,962
($4,380,962 excluding non-recurring impairment) compared to a loss of $4,495,157.
These results include material expenditure on legal fees and significant executive time dealing with the
associated proceedings. Site’s dispute with the Australian Skills Quality Authority (ASQA) in the
Administrative Appeals Tribunal (AAT) was recently heard, as well as the Federal Court hearing with
the Australian Competition and Consumer Commission (ACCC) litigation. Site is waiting the outcomes
of both hearings.
As a consequence of the impairment taken in the previous financial years, no amount has been reflected
in the balance sheet for the receivable ($20,977,645 – refer note 7) due from the Commonwealth
Government Department of Education and Training (DET), even though the Group maintains the
position that it is entitled to the funds. Non-current trade and other payables $5,595,083 will not result
in an outflow of funds from the Group unless the DET receivable is collected.
Site has expended and continues to expend significant operational resources ensuring that SSG
remains compliant to achieve the favourable outcome in the AAT and focus on ensuring the best
interests of clients and students. SSG continues to be impacted with customers postponing training until
the appeal process is finalised.
Following the initial announcement in June 2018 to separate the responsibility for the Domestic and
International business, the group continues to investigate growth and utilisation options of its leasehold
in Clark Freeport Zone (“Clark”) Philippines. The optimisation of the Clark asset remains a core focus
however the development timetable has been extended due to the impact of COVID-19 on the global
and Philippines economy.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 11 of 103
Directors’ Report continued
Operating and financial review continued
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 Australian operations have been impacted primarily by ongoing regulatory uncertainty between
SSG and the ASQA and the global occurrence of COVID-19. While SST revenue has been negatively
impacted, with a year-on-year reduction of 7% to $11,938,341 from $12,866,083 in the previous period,
primarily as a result of contracts suspended or missed due to the regulatory uncertainty, SST continues
to receive exceptional customer engagement, satisfaction and completion rates amongst individual and
corporate clients which all outperform industry targets.
SST has invested substantially in compliance resources and systems over the past 36 months and Site
has full confidence in the independent executive and management team to continue to deliver above
and beyond the expectations of its tens of thousands of students and hundreds of corporate clients
across high risk and nationally critical industries. In June, SST reached the milestone of 200,000
enrolments in Australia.
EBITDA was a loss of $1,518,195 compared to an EBITDA loss of 1,728,678 in the previous year
reflecting the lower revenue but also the additional compliance and legal costs incurred within this
division.
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.
SST continues to invest in its systems and delivery platforms including expanding the number and
amount of courses being delivered fully or partially online.
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 24% reduction in revenue to $9,584,526 in the 12 months to June 2020,
compared with $12,658,371 in the prior year. EBITDA was $847,389 compared with an EBITDA of
$682,394 in the prior year. The reduction in revenues a direct result of the impact of COVID-19.
To date SST International has provided education and training services to countries including the
Philippines, PNG, Myanmar, Saudi Arabia, Bahrain, China, Singapore, Malaysia and has delivered
services to governments and companies in locations including Timor-Leste, UAE, Azerbaijan, Africa
and others.
The Clark operations continue to provide the platform for our international expansion with existing
customers OceanaGold, FieldCore (a GE Company), Orica, Lychapodium, and Clough receiving
regular services. Additionally, Site WorkReady is increasing the provision of skilled trades people for
markets in Australia, New Zealand and Africa.
The National Construction Training Center (NCTC) in Nairyah has been operating since September
2017 servicing the training needs of construction companies across the Kingdom of Saudi Arabia. The
College delivered courses online through 2020 in response to the COVID-19 Pandemic and shut down.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 12 of 103
Directors’ Report continued
Operating and financial review continued
A 2 year extension on the contract is currently being negotiated and will allow for the continued
delivery and output aligns well with the Kingdom’s Vision 2030. So far well over 1,000 graduates are
now in meaningful long-term employment.
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 fell to $1,973,419 (2019: $3,639,017) with an EBITDA loss
of $292,210 (2019: EBITDA $211,651). The reduction in commodity prices and COVID-19 contributed
to the significant reduction in EBITDA and revenue.
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.
Site continues to investigate expansion of its Safe Live Process Plant (SLPP) and technician
development plan in Singapore, Bahrain and KSA as new opportunities arise. Training in Myanmar is
expected to return in the last quarter of the calendar year.
Additionally, Site has announced the signing of a Memorandum of Understanding with Bahrain
Polytechnic for an important program to develop the skills and graduates of the Polytechnic as well as
major Bahrain industries. Programs will be jointly developed through utilisation of Site Safe Live Process
Plant.
Tertiary Education
This segment provides tertiary education for international students seeking to develop careers in a
range of different disciplines. Students can choose from a range of diploma and certificate level courses
in Australia.
This division reported an increase in revenue of 37% to $3,591,170 in 2020, up from $2,614,754 in
2019. EBITDA improved by 468% to $625,282 compared to an EBITDA of $110,138 in 2019, as the
scale of the business improves on the back of increased student number and enrolments
Student numbers studying in Australia continue to grow with over 300 current enrolments in CRICOS
registered courses. Future revenues are expected to continue to grow during the 2020 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.
In addition, TESOL Asia is a training and industry focussed organisation for Teachers in the English as
a Second Language (ESL) sector. It provides access to training, consulting, industry conferences and
academic journals around the world. Teaching English to Speakers of Other Languages (TESOL)
focusses on bringing English language acquisition academics together with professional teachers to
support and develop the industry globally. During the financial year, TESOL management focused on
online courses conferences and seminars. The investment in online TESOL courses and conferences,
and a number of strategic alliances are expected to further grow revenues with new emerging markets
interested in online delivery.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 13 of 103
Directors’ Report continued
Operating and financial review continued
Cash position
At 30 June 2020, the Company had cash reserves of $1,246,819 and a net current asset deficiency of
$4,858,302. No amount is reflected in the balance sheet for the receivable due from the Commonwealth
Government Department of Education and Training (DET), even though the group maintains the
position that it is entitled to the funds. The Company has a financing facility with Punta Properties for
$US4,000,000 which is drawn to $US2,900,000 and on 31 December 2019 drew down the A$2,000,000
of the facility agreement with Lucerne Investment Partners.
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.
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
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 14 of 103
Risk
Details
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
Foreign
judgements
Material
arrangements
Geographic
concentration
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.
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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 15 of 103
Directors’ Report continued
Operating and financial review continued
2021 Outlook
In a year where Site reached the milestone of 200,000 enrolments, the results continue to be impacted
by the ongoing legal action with the regulator, the associated legal costs and the impact on some
customers. Additionally, the unexpected impact of COVID-19 on industries around the world have
substantially impacted face to face contact. As a provider of essential services to industry, Site has
continued with significant training albeit at reduced numbers and margins.
Site remains confident in its position surrounding its commitment to continuous improvement and
meeting industries needs for a suitable trained workforce.
The leasehold land held by Site’s wholly owned subsidiary Site Group Holdings (SGH) is currently
approved as a mixed-use educational campus and related training facilities with the ability to sublease
for mixed use purposes. As previously announced Site is investigating the potential development of its
Clark leasehold 30 hectare property. Whilst the progress has been interrupted by COVID-19 and the
closure of Government offices there is now signs of return to work in agencies located outside Metro
Manila. There is also a return to commercial discussions around the property and Clark in general with
several parties renewing discussions around partnering and investing in the project.
Directors’ shareholdings as of the date of this report
Director
Vernon Wills
Peter Jones
Nicasio Alcantara
Shares
123,395,630
56,819,466
8,371,325
Significant changes in state of affairs
During the year the group was involved in the following significant transactions:
Capital Management
•
•
•
•
•
In August 2019, the company successfully completed the issue of 93,750,000 shares under a
private placement at 4 cents per share to raise 3,750,000.
In December 2019, the company completed a buy-back of 5,000,000 shares from current and
former directors issued on terms consistent with the Employee Share Plan that expired as their
condition were not met.
In December 2019 the company announced a $15,000,000 financing facility with Lucerne
Investment Partners and drew down an initial $2,000,000 of the facility. In March 2020 the
company announced that due to market conditions brought on through the COVID-19
pandemic, all further planned drawdowns have ceased and the arrangement suspended.
In April 2020 the company issued 25,373,984 shares to legal counsel who agreed to be
remunerated via equity, Shares were issued at the price of 3.1 cents per share.
In May 2020 the company successfully completed the issue of 25,000,000 shares under a
private placement at the issue price of 3 cents per share to raise $750,000.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 16 of 103
Directors’ Report continued
After balance date events
In July 2020 the company successfully completed a share purchase plan raising $353,400 via the
issue of 11,780,000 shares at 3 cents per share.
Other than as noted elsewhere in this report there has been no other 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
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 12 months and 50% being escrowed for 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.
During the prior year the company issued 7,700,000 shares under the employee share plan with a loan
amount payable (option exercise price) of 4 cents per share. Details of these shares are outlined in note
20 to the financial report.
As at 3 September 2020, there are 7,450,000 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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 17 of 103
Directors’ Report continued
Non-audit services
Non-audit services were provided by the company’s auditor, Pitcher Partners, in the current financial
year and in the comparative financial year. 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 25 Auditor’s Remuneration in the financial reports for details and
amounts for the provision of non-audit services.
Vernon Wills
Director
29 September 2020
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 18 of 103
Directors’ Report continued
Remuneration Report (audited)
This remuneration report for the year ended 30 June 2020 outlines the remuneration arrangements of
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 2020 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:
• Vernon Wills – Managing Director and Chief Executive Officer
• Nicasio Alcantara – Non-Executive Director
• Peter Jones – Non- Executive Director
Executives (other than directors) with the greatest authority for strategic direction and
management
The following person was the executive with the greatest authority for the strategic direction and
management of the Group (“specified executives”) during the financial year;
• Craig Dawson – Chief Financial Officer
This executive was also considered part of the Key Management Personnel of the Group.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 19 of 103
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
with these parties.
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 2020
Page 20 of 103
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. Executive termination provisions are as
follows:
Employer initiated
termination
Termination for
cause
Employee initiated
termination
CEO notice period
CFO notice period
3 Months
6 months
None
None
3 Months
3 Months
Details of remuneration
Details of the remuneration of each director of the Company and the specified executive 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.
2020
Name
Vernon Wills
Nicasio Alcantara
Peter Jones
Total
2019
Name
Vernon Wills
Nicasio Alcantara
Peter Jones
Total
Short Term Benefits
Cash Salary Directors Fees
$
400,000
-
-
400,000
$
-
88,912
65,700
154,612
Post-
employment
Super-
annuation
$
Long Term
Benefits
Long Service
Leave
$
Share-based Payments
Options
Shares
$
$
Non- monetary
benefits
$
47,592
-
-
47,592
- - - -
- - - -
- - - -
- - - -
Short Term Benefits
Cash Salary Directors Fees
$
400,000
-
-
400,000
$
-
83,501
65,700
149,201
Post-
employment
Super-
annuation
$
Long Term
Benefits
Long Service
Leave
$
Share-based Payments
Options
Shares
$
$
Non- monetary
benefits
$
44,189
-
-
44,189
- - - -
- - - -
- - - -
- - - -
Total
$
447,592
88,912
65,700
602,204
Total
$
444,189
83,501
65,700
593,390
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 21 of 103
Directors’ Report continued
Remuneration Report (audited) continued
Specified executives of the consolidated entity
$
$
2020
Short Term Benefits
Name
Craig Dawson
Total
Cash Salary Non- monetary
$
273,973
Post-
employment
Super-
annuation
$
Long Term
Benefits
Long Service
Leave
$
Termination
Benefits
Share-based Payments
Options
Shares
$
$
$
Total
$
25,360
26,027
5,250
-
1,812
-
332,422
273,973
25,360
26,027
5,250
-
1,812
-
332,422
2019
Short Term Benefits
Post-
employment
Long Term
Benefits
Termination
Benefits
Share-based Payments
Name
Craig Dawson
Total
$
274,952
274,952
Cash Salary Non- monetary
Super-
annuation
$
Long Service
Leave
$
Options
Shares
$
$
$
Total
$
24,588
24,588
26,027
26,027
5,247
5,247
-
-
4,781
4,781
-
-
335,595
335,595
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. Both V. Wills and
C. Dawson had a maximum STI opportunity of 30% of their fixed remuneration. For FY20 and FY19 0%
was earned and 100% forfeited because the service criteria were 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,
other than in respect of the employee share plan below.
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
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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 22 of 103
Directors’ Report continued
Remuneration Report (audited) continued
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.
Mr Dawson was awarded 1,000,000 shares under the plan during the prior year, with a grant date of 8
March 2019 and a loan price (option exercise price) of 4 cents per share with 500,000 escrowed to 29
March 2019 and 500,000 escrowed to 29 March 2020. No amount has been paid by Mr Dawson in
respect of these shares. The related options have a grant date fair value of 0.64 cents per share and
0.97c per share respectively for each tranche. There are no performance conditions attached to the
shares other than the employee remaining with the group during the escrow period. The shares have
an expiry date (last option exercise date) of 29 March 2022.
The number of ordinary shares held by each KMP of the group under the plan is as follows:
Name
Vern Wills
Balance
1 July
2019
2,000,000
Granted
as
remuneration
-
Nicasio Alcantara
1,000,000
Craig Dawson
Total
1,000,000
4,000,000
-
-
-
Shares
sold
Forfeited
Balance
30 June 2020
Tradable
Escrowed
Vested and
Exercisable
-
-
-
-
(2,000,000)
(1,000,000)
-
-
-
1,000,000
(3,000,000)
1,000,000
-
-
-
-
-
-
-
-
1,000,000
1,000,000
1,000,000
1,000,000
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
Balance
1 July 2019
Granted
as
remuneration
-
Vern Wills
122,395,630
Nicasio Alcantara
8,371,325
Peter Jones
Craig Dawson
Total
56,819,466
1,000,000
188,586,421
Shares
sold
Capital
Raising#
Balance
30 June 2020
-
-
-
-
-
-
-
-
122,395,630
8,371,325
56,819,466
1,000,000
-
-
-
-
-
-
188,586,421
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 23 of 103
Directors’ Report continued
Remuneration Report (audited) continued
Executive remuneration outcomes for 2020
As noted earlier the company is actively developing its core business in Asia and Australia in addition
to the maximisation of the Clark property. Executive Remuneration is targeted at attracting and retaining
quality people to lead the Company through this phase and on to profitability. The Company has
incurred losses since 2017 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 regulatory actions
currently in progress and the COVID-19 pandemic
Revenue growth
The following table details reported revenue of the core business for the past seven years:
2020
2019
2018
2017
2016
2015
2014
Total revenue ($)
Growth %
27,259,059
(12%)
30,913,290
2%
30,306,134
4%
29,213,400
15%
25,406,177
31%
19,467,233
12%
17,314,375
34%
Until 2020 and the impact of COVID-19, the group maintained growth of the business, 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 seven years:
Total profit/(loss)
Change %
Earnings/(loss) per
Share (cents)
Share price at year
end
2020
(10,264,692)
(116%)
2019
(4,742,968)
22%
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%)
(1.32)
(0.69)
(0.92)
$0.035
$0.027
$0.025
(9.50)
$0.04
1.84
$0.19
0.40
$0.35
(1.81)
$0.15
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 24 of 103
Directors’ Report continued
Remuneration Report (audited) continued
The impact of the impairments reported in 2020, 2018 and 2017, closure of the PP business and action
currently taken by the regulator, the associated legal costs and the impact on some customers continue
to significantly impact the share price and reported earnings per share. Additionally, the unexpected
impact of COVID-19 on industries around the world has substantially impacted face to face delivery of
training.
The leadership team are focused on continuing to grow the core business revenue, adapting to the
current market environment, controlling costs and growing earnings.
Approval of the FY19 Remuneration Report
At the Annual General Meeting of the Company on 28 November 2019, the FY19 remuneration report
was adopted by the shareholders with a vote of 98.9% 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
(refer note 7) or February 2018.
During the current period the facility interest rate was reviewed and updated from a fixed rate of 7% per
annum to 10% per annum. The rate change brings the loan facility interest rate in line with the interest
rate applied to other related party loans. The rate change was applied to the lifetime of the loan resulting
in an interest accrual totalling $241,763.
The remaining loan balance was paid in full resulting in $nil owing at period end.
Movements in the loan balance during the year are as follows:
Opening Balance
Interest accrued during the year
Principal repayments (cash)
Interest repayments (cash)
Closing Balance
30-Jun-20
$
38,907
243,067
-
(281,974)
-
30-Jun-19
$
266,922
14,102
(233,189)
(8,928)
38,907
Loan from Director related entity – Punta Properties Inc
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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 25 of 103
Directors’ Report continued
Remuneration Report (audited) continued
Movements in the loan balance during the year are as follows:
Opening Balance
Drawdowns
Interest accrued during the year
Recognition of embedded derivative
Foreign Currency movement
Closing Balance
30-Jun-20
$
4,167,276
-
708,976
-
94,720
4,970,972
30-Jun-19
$
-
4,006,980
368,090
(335,128)
127,332
4,167,276
Other transaction with Directors and Key Management Personnel
In addition to the financing facility discussed above, 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 was approved by
shareholder at the annual general meeting of shareholders on 22 November 2018.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 26 of 103
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 2020
Page 27 of 103
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 secretary 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: -
Board
Executive and Senior Managers
All other
Total
Male
3
10
136
149
Female
0
1
66
67
Male
100%
91%
67%
69%
Female
0%
9%
33%
31%
Total
3
11
202
216
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 28 of 103
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 2020 is set out in the Directors’ Report.
In 2020 the Committee comprised Mr Peter Jones and Mr Nicasio Alcantara. The Council
recommends that remuneration committees be comprised of at least three independent directors.
Despite both directors being non-executive directors, Mr Jones is not considered independent due
to being a substantial shareholder. Due to Messrs Jones and Alcantara 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 two non-executive Directors and one
executive Director. The Chairman of the Board Mr Peter Jones is not considered to be independent
due to being a substantial security holder. 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.
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 2020
Page 29 of 103
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
2020 year is set out in the Directors’ Report. In 2020 the committee comprised Mr Peter Jones and
Mr Nicasio Alcantara with the CEO attending on an ex officio basis. The Council recommends that
audit committees be comprised of at least three independent directors. Despite the two 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 Jones and Alcantara 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 2020
Page 30 of 103
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 directors; 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 2020
Page 31 of 103
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 2020
Page 32 of 103
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 2020 year is set out in the Directors’
Report.
In 2020 the Committee comprised Mr Peter Jones and Mr Nicasio Alcantara. The Council
recommends that remuneration committees be comprised of at least three independent directors.
Despite the two 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 Jones and
Alcantara 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 into 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 2020
Page 33 of 103
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 2020, to the best of my knowledge and belief
there have been:
(i)
(ii)
No contraventions of the auditor independence requirements of the Corporations Act 2001; and
No contraventions of APES 110 Code of Ethics for Professional Accountants (including
Independence Standards).
This declaration is in respect of Site Group International Limited and the entities it controlled during the year.
PITCHER PARTNERS
JASON EVANS
Partner
Brisbane, Queensland
29 September 2020
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2020
Statement of Profit or Loss and Other Comprehensive Income
Consolidated Group
Note
2020
$
2019
$
Continuing operations
Revenue from contracts with customers
Interest income
Total income
Contractor and other service providers
Other direct fees and costs
Employee benefits expense
Sales and marketing expense
Occupancy expenses
Depreciation and amortisation expense
Impairment expense
Finance costs
Foreign currency gain (loss)
Fair value (loss) gain of financial liabilities at fair value through profit and loss
Other expenses
Loss before tax from continuing operations
Income tax (expense) / benefit
Loss for the year from continuing operations
Loss for the year from discontinued operations
Total 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
4
5
5
11
5
17
5
6
24
Items not to be reclassified to profit or loss in subsequent years (net of tax):
Remeasurement gain/(loss) on defined benefit plan
16
Total other comprehensive income (loss)
Total comprehensive loss
27,259,059
24,291
27,283,350
(4,506,087)
(5,228,716)
(12,727,257)
(1,634,103)
(2,185,687)
(2,580,836)
(1,096,000)
(2,182,472)
109,998
(1,021,916)
(3,327,360)
(9,097,086)
(48,713)
(9,145,799)
30,913,290
66,183
30,979,473
(5,099,795)
(6,962,778)
(12,755,067)
(1,757,962)
(3,812,470)
(1,413,716)
-
(415,197)
(114,432)
116,498
(3,711,794)
(4,947,240)
1,514,919
(3,432,321)
(1,118,893)
(1,194,149)
(10,264,692)
(4,626,470)
296,867
563,905
(7,237)
289,630
(58,171)
505,734
(9,975,062)
(4,120,736)
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)
3
3
(1.32)
(0.68)
(1.18)
(0.50)
The above statement of profit or loss and other comprehensive income should be read in conjunction
with the accompanying notes.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 35 of 103
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES AS AT 30 JUNE 2020
Statement of Financial Position
Note
Consolidated Group
2020
$
2019
$
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Contract assets
Inventories
Prepayments
Current tax asset
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Right-of-use assets
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
Contract liabilites
Interest bearing debt
Lease liabilities
Current tax liabilities
Provisions
Financial liabilities at fair value through profit and loss
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Provisions
Interest bearing debt
Lease liabilities
Financial liabilities at fair value through profit or loss
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET LIABILITIES
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL/ (DEFICIENCY OF) EQUITY
7
8
9
12
10
6
13
14
15
12
16
17
13
16
15
12
17
18
19
19
1,246,819
2,656,525
496,950
18,823
431,835
37,261
4,888,213
8,339,642
6,100,739
1,250,608
1,033,030
226,233
921,060
17,871,312
606,148
4,061,072
317,295
32,002
481,137
37,249
5,534,903
8,700,694
-
1,509,216
775,703
105,748
875,929
11,967,290
22,759,525
17,502,193
4,420,245
812,474
2,015,680
1,461,187
84,082
628,241
324,606
9,746,515
5,595,083
611,303
4,970,972
8,373,206
915,940
20,466,504
30,213,019
6,080,122
390,458
142,519
-
96,878
592,326
-
7,302,303
5,595,083
2,921,005
4,238,419
-
218,630
12,973,137
20,275,440
(7,453,494)
(2,773,247)
83,366,140
2,966,017
(93,785,651)
(7,453,494)
78,085,284
2,655,191
(83,513,722)
(2,773,247)
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 2020
Page 36 of 103
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2020
Statement of Changes in Equity
Consolidated Group
Balance at 30 June 2018
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
Share Capital
Accumulated
losses
(note 18)
$
(note 19)
$
Foreign
currency
translation
reserve
(note 19)
$
Share based
payments
reserve
(note 19)
$
Total
$
78,085,284
(78,712,583)
570,383
1,511,675
1,454,759
-
-
-
-
-
-
-
(4,742,968)
(58,171)
(4,801,139)
-
563,905
563,905
-
-
-
-
-
-
-
-
-
-
-
-
-
9,228
9,228
(4,742,968)
505,734
(4,237,234)
-
-
9,228
9,228
Balance at 30 June 2019
78,085,284
(83,513,722)
1,134,288
1,520,903
(2,773,247)
Comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive income /(loss) for the year
-
-
-
(10,264,692)
(7,237)
(10,271,929)
-
296,867
296,867
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
5,297,017
(16,161)
-
5,280,856
-
-
-
-
-
-
-
-
-
-
-
-
-
13,959
13,959
(10,264,692)
289,630
(9,975,062)
5,297,017
(16,161)
13,959
5,294,815
Balance at 30 June 2020
83,366,140
(93,785,651)
1,431,155
1,534,862
(7,453,494)
The above statement of changes in equity should be read in conjunction with the accompanying
notes.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 37 of 103
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2020
Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income tax refund received
Income tax paid
Government grants and tax incentives
Consolidated Group
Note
2020
$
2019
$
29,061,947
30,222,732
(32,491,836)
(34,544,077)
18,546
(1,101,086)
63,641
(40,497)
-
1,688,960
(111,169)
851,954
(86,989)
-
Net cash (used in) operating activities
25
(3,771,644)
(2,696,230)
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
(554,205)
(1,323,382)
(116,147)
52,593
-
8,157
(507,139)
(503,658)
(76,690)
(132,512)
Net cash (used in) investing activities
(1,201,588)
(1,951,395)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from exercise of employee share plan
Proceeds from borrowings
Repayment of borrowings - related parties
Principal repayments - lease liabilities
Transaction costs on shares
Net cash provided by financing activities
4,500,000
10,000
-
-
2,000,000
4,006,980
(281,974)
(242,117)
12
(619,068)
(83,909)
(16,160)
-
5,592,798
3,680,954
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
619,566
(951,080)
21,105
23,791
606,148
1,533,437
Cash and cash equivalents at end of financial year
1,246,819
606,148
The above statement of cash flows should be read in conjunction with the accompanying notes.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 38 of 103
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES
Notes to the Financial Statements for the Year Ended 30 June 2020
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 2020 was authorised for issue in accordance with a
resolution of the directors on 29 September 2020.
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. 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 and unless otherwise stated are rounded to the
nearest dollar.
(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
For the financial year ended 30 June 2020 the Group made a net loss of $10,264,692 (2019: loss of
$4,742,968) and the cash outflow from operating activities for the year was $3,771,644 (2019:
$2,696,230). At 30 June 2020, the Group had deficiencies in net assets and net current assets of
$7,453,494 and $4,858,302 respectively. Notwithstanding the reported results, this financial report
has been prepared on a going concern basis as the directors consider that the company and the
consolidated entity will be able to realise their assets and settle their liabilities in the normal course of
business and at amount stated in the financial report.
The directors have made enquiries of management, examined the group current financial position and
financial forecasts. Despite any material uncertainty that may cast doubt about the Group’s ability to
continue as a going concern, the directors have a reasonable expectation that the company and the
group has adequate financial resources to continue as a going concern.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 39 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
Significant matters identified by the directors include:-
- The reported loss is not considered by the directors to reflect the expected future
performance of the group. These results were significantly impacted by legal costs incurred
and reputational harm arising from ongoing regulatory action. Additionally, the unexpected
impact of COVID-19 on industries around the world have substantially impacted face to face
contact and revenues for the year.
- During the COVID-19 period the group has made significant changes to its international and
domestic businesses to reflect the lessening revenues caused by the pandemic. This has
included non-recurring restructuring costs, impairments and redundancies.
- The group continues to maintain the support of its existing debt providers to manage any
maturing debt facilities within the best interest of the group.
The continuation of the company and the group as a going concern is dependent on the ability to
achieve the following objectives:-
- Forecast cash flow from operations;
- Proposed capital expenditure management; and,
- Support of its investors through capital raising by way of debt or equity.
Should the above actions not generate the expected cash flow, the company may not be able to meet
its debts as and when they become due and payable, and it may be required to realise assets and
extinguish liabilities other than in the course of business and at amount different from those stated in
the financial statements. The report does not include any adjustments relating to the recoverability
and classification of recorded asset amounts and classification of liabilities that might be necessary
should the company and the group not continue as a going concern.
(c)
New Accounting Standards and Interpretations
(i) Changes in accounting policy and disclosures.
AASB 16 Leases
AASB 16 Leases (“AASB 16”) supersedes AASB 117 Leases (“AASB 117”). AASB 16 introduces
a single lessee accounting model and eliminates the classification between operating and finance
leases. All leases are required to be accounted for “on balance sheet” by lessees, other than for
short-term and low value asset leases. The standard also provides new guidance on the definition
of a lease and on sale and leaseback accounting and requires new and different disclosures
about leases.
The Group has adopted AASB 16 on 1 July 2019 using the modified retrospective approach.
Under this approach, comparative information is not restated and the cumulative effect of initially
applying AASB 16 is recognised in retained earnings.
The Group leased assets include properties. As a lessee, the Group previously classified leases
as operating or finance leases based on its assessment of whether the lease transferred
substantially all of the risks and rewards of ownership.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 40 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
From 1 July 2019 the Group recognises a right-of-use asset and a lease liability at the
commencement date which is initially measured on a present value basis.
On initial adoption of AASB 16, the Group:
• For leases previously classified as finance leases, the Group has recognised the carrying
amount of the lease asset and lease liability immediately before transition as the carrying
amount of the right-of-use asset and the lease liability at 1 July 2019;
• For leases previously classified as ‘operating leases’ under the principles of AASB 117, the
Group has recognised a right-of-use asset and lease liabilities;
• The right-of-use assets have been recognised at the carrying amount as if AASB 16 had
always applied, discounted using the Group’s incremental borrowing rate; and
• The associated lease liabilities have been measured at the present value of future minimum
lease payments, using the Group’s incremental borrowing rate of 10%.
The reconciliation between the operating commitments disclosed in the 30 June 2019 financial
statements and the lease liability recognised as at 1 July 2019 is detailed below:
Operating lease commitments disclosed as at 30 June 2019
Plus: lease payments included in the measurement of lease liabilities and not previously
included in non-cancellable operating lease commitments
Discounted using lessee's incremental borrowing rate at the implementation of AASB 16
Less: Short-term leases not recognised as liability
Lease liabilities arising from operating commitments at 1 July 2019
Plus: Finance lease liabilities recognised at 30 June 2019
Total lease liabilities as at 1 July 2019
$
13,818,152
3,743,760
(7,234,005)
(253,414)
10,074,493
174,755
10,249,248
The right-of-use assets recognised on relate to lease of properties and is reconciled as follows:
Lease liabilities arising from operating commitments as at 1 July 2019
Finance lease assets recognised at 30 June 2019
Lease rental incentive
Prepaid lease payments arising from security deposits
Exchange rate differences
Right-of-use assets as at 1 July 2019
The right of use assets recognised on 1 July 2019 relate to the following asset classes:
Land
Building
Motor vehicle
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
$
10,074,493
175,651
(2,453,828)
18,162
34,721
7,849,199
$
3,887,672
3,785,876
175,651
7,849,199
Page 41 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
Impact on balance sheet on 1 July 2019
The impact on the Consolidated Statement of Financial Position on the initial adoption of the new leases
standard is set out below.
The Group has adopted AASB 16 using the modified retrospective approach. As permitted under the
specific transitional provisions of the standard, comparatives have not been restated for the 2019
reporting period. The reclassifications and adjustments arising from the adoption of the new leasing
standard are recognised in the opening balance sheet on 1 July 2019.
Right-of-use assets
Property, plant and equipment (motor vehicle under finance lease)
Lease liabilities (current and non-current)
Provisions (lease rental incentive / straight-lining)
Interest-bearing debt (finance leases)
Impact on earnings
As reported
30 June 2019
$
-
175,651
-
(2,453,828)
(174,755)
AASB 16
transition
adjustments
$
Opening
Balance
1 July 2019
$
7,849,199
(175,651)
(10,249,248)
2,453,828
174,755
7,849,199
-
(10,249,248)
-
-
The impact on the Consolidated Statement of Profit and Loss and Other Comprehensive Income and
the Group’s before tax earnings and earnings before interest, tax and depreciation (EBITDA) for the
half year ended 30 June 2020 as a result of the adoption of the new leases standard is set out below.
Reported loss before tax
Expense adjustments related to application of AASB 16:
Add: depreciation
Add: interest expense
Less: rental payments
AASB 16 profit before tax impact
Loss before tax pre AASB 16
Reported EBITDA
Expense adjustments related to application of AASB 16:
Less: depreciation
Less: interest expense
Add: AASB 16 profit before tax impact
EBITDA pre AASB 16
Practical expedients applied
Note
$
(9,097,086)
1,355,351
998,367
(1,617,435)
736,283
(8,360,803)
2
(5,476,962)
(1,355,351)
(998,367)
736,283
(7,094,397)
In applying AASB 16 for the first time, the Group has applied the following practical expedients as
permitted by the standard:
• Applied the exemption not to recognise right-of-use assets and lease liabilities for low value
leases or leases with less than 12 months of lease term;
• Applied the use of a single discount rate to the portfolio of leases with similar characteristics.
The rate applied was the Group’s incremental borrowing rate of 10%;
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 42 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
• Applied the use on hindsight in determining the lease term where the contract contains
options to extend the lease; and
• Relied on previous assessments on whether leases are onerous.
From 1 July 2019, leases are now recognised as a right-of-use asset with a corresponding lease
liability. Each lease payment is allocated between the liability and finance cost. The right-of-use asset
is depreciated over the lease term on a straight-line basis or over the useful life where title to the
asset transfers at the end of the lease. Assets and liabilities arising from a lease are initially measured
on a present value basis.
Depreciation on right-of-use assets and interest on lease liabilities is recognised in the Consolidated
Statement of Profit and Loss and Other Comprehensive Income.
Payments associated with short term leases (generally less than 12 month terms) and leases of low
value have continued to be recognised on a straight-line basis as an expense in the Consolidated
Statement of Profit and Loss and Other Comprehensive Income. Low value leases include office
equipment and equipment on rental agreements which are utilised to cover peak operating periods.
The principal portion of the lease payments are recognised as a financing cash flow and the interest
portion of the lease payments are recognised as an operating cash flow in the Consolidated
Statement of Cash Flows.
The Group uses critical judgements in determining the lease term. Extension options are only
included in the lease term where management considers that it is reasonably certain that the lease
will be extended.
In addition, the group has elected to early adopt AASB 2020-4 Amendments to Australian Accounting
Standards – Covid-19-Related Rent Concessions in the current reporting period, with effect from 1
July 2019 (the beginning of the current reporting period).
AASB 2020-4 amends AASB 16 Leases to provide an optional practical expedient to lessees from
assessing whether a rent concession related to COVID-19 is a lease modification. Lessees can elect
to account for such rent concessions in the same way as they would if they were not lease
modifications. The practical expedient only applies to rent concessions occurring as a direct
consequence of the COVID-19 pandemic and only if all the following conditions are met:
(a) the change in lease payments results in revised consideration for the lease that is substantially
the same as, or less than, the consideration for the lease immediately preceding the change;
(b) any reduction in lease payments affects only payments due on or before 30 June 2021; and
(c) there is no substantive change to other terms and conditions of the lease.
In accordance with AASB 2020-4, the group has elected to apply the practical expedient not to assess
whether rent concessions occurring as a direct consequence of the Covid-19 pandemic are lease
modifications, and to account for any changes in lease payments resulting from the rent concessions
as if the changes were not lease modifications. Gains arising from Covid-19 related rent concessions
recognised in profit or loss amounts to $5,585.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 43 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
(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;
• 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 profit or loss and other 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)
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 profit or loss and
other 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.
(f)
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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 44 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
(g)
Financial instruments – initial recognition and subsequent measurement
Financial assets
Initial recognition and measurement
Financial assets within the scope of AASB 9 Financial Instruments are classified as at amortised cost,
at fair value through profit and loss, or at fair value through other comprehensive income. 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 financial assets
recorded at fair value through profit or loss, on the basis of both the group’s business model for
managing the financial assets, and the contractual cash flow characteristics of the financial asset.
The Group’s financial assets include cash and short-term deposits (amortised cost), receivables from
contracts with customers (amortised cost), other receivables (amortised costs), and quoted and
unquoted financial instruments (fair value through profit and loss).
Receivables from contracts with customers are recognised when the group has an unconditional right
to consideration arising from the transfer of goods or services to the customer (i.e. only the passage
of time is required before payment of the consideration is due). Where this is not the case, the
resultant asset is a contract asset (refer note 1a (p)).
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. Other financial assets are
recognised if the entity becomes party to contract provisions of the asset.
Subsequent measurement
The subsequent measurement of financial assets depends on their classification as described below.
Financial assets at amortised cost
Subsequent to initial measurement, these assets are measured at amortised cost using the Effective
Interest Rate (EIR) method, less allowances for credit losses. 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 interest revenue in the statement of profit or loss and other
comprehensive income.
Financial assets at fair value through profit and loss
Subsequent to initial measurement, these assets are measured at fair value with changes in fair value
being recognised in profit or loss as they arise.
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; or
• 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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 45 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
Impairment of financial assets at amortised cost
The group applies the simplified expected credit loss model prescribed in AASB 9 to determine an
allowance for expected credit losses on receivables from contracts with customers and its other
receivables measured at amortised cost. Under this approach, the lifetime expected credit losses are
estimated using a provision matrix based on historical losses observed on similar assets, adjusted for
the group’s forecasts of future economic conditions. The measurement of expected credit losses
reflects the group’s ‘expected rate of loss’, which is a product of the probability of default and the loss
given default, and its ‘exposure at default’, which is typically the carrying amount of the relevant asset.
The group has identified contractual payments more than 90 days past due as default events for the
purpose of measuring expected credit losses. These default events have been selected based on the
group’s historical experience.
Financial liabilities
Initial recognition and measurement
Financial liabilities within the scope of AASB 9 Financial Instruments are classified as at amortised
cost, at fair value through profit and loss, or as derivatives designated as hedging instruments 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
(amortised costs), loans and borrowings (amortised cost) and derivative financial instruments (fair
value through profit and loss).
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 profit or
loss and other 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 profit or loss and other comprehensive income.
Derivative financial instruments
Derivative financial instruments held by the group represent embedded conversion options on
borrowing facilities. The embedded derivative component of the debt is required to be separated and
accounted for as at fair value through profit and loss, with fair value gains and losses on
remeasurement recognised in profit and loss.
Derecognition
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or
expires.
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
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 46 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
(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
Leasehold improvements
Furniture and fittings
Computer equipment
Vehicles
Estimated Life
2 – 25 years
2 – 20 years
3 – 5 years
3 – 5 years
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
Accounting policy applied to the information presented for the current period under AASB 16 Leases:
At the commencement date of a lease (other than leases of 12-months or less and leases of low
value assets), the group recognises a lease asset representing its right to use the underlying asset
and a lease liability representing its obligation to make lease payments.
Lease assets
Lease assets are initially recognised at cost, comprising the amount of the initial measurement of the
lease liability, any lease payments made at or before the commencement date of the lease, less any
lease incentives received, any initial direct costs incurred by the group, and an estimate of costs to be
incurred by the group in dismantling and removing the underlying asset, restoring the site on which it
is located or restoring the underlying asset to the condition required by the terms and conditions of the
lease, unless those costs are incurred to produce inventories.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 47 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
Subsequent to initial recognition, lease assets are measured at cost (adjusted for any remeasurement
of the associated lease liability), less accumulated depreciation and any accumulated impairment
loss.
Lease assets are depreciated over the shorter of the lease term and the estimated useful life of the
underlying asset, consistent with the estimated consumption of the economic benefits embodied in
the underlying asset.
Lease liabilities
Lease liabilities are initially recognised at the present value of the future lease payments (i.e., the
lease payments that are unpaid at the commencement date of the lease). These lease payments are
discounted using the interest rate implicit in the lease, if that rate can be readily determined, or
otherwise using the group’s incremental borrowing rate.
Subsequent to initial recognition, lease liabilities are measured at the present value of the remaining
lease payments (i.e., the lease payments that are unpaid at the reporting date). Interest expense on
lease liabilities is recognised in profit or loss (presented as a component of finance costs). Lease
liabilities are remeasured to reflect changes to lease terms, changes to lease payments and any lease
modifications not accounted for as separate leases.
Variable lease payments not included in the measurement of lease liabilities are recognised as an
expense when incurred.
Leases of 12-months or less and leases of low value assets
Lease payments made in relation to leases of 12-months or less and leases of low value assets (for
which a lease asset and a lease liability has not been recognised) are recognised as an expense on a
straight-line basis over the lease term.
Covid-19 related rent concessions
The group has elected to apply the practical expedient (as permitted by Australian Accounting
Standards) not to assess whether rent concessions occurring as a direct consequence of the Covid-
19 pandemic are lease modifications, and to account for any changes in lease payments resulting
from the rent concessions as if the changes were not lease modifications. Any gains arising from
Covid-19 related rent concessions are recognised in profit or loss.
The practical expedient only applies to rent concessions occurring as a direct consequence of the
COVID-19 pandemic and only if all the following conditions are met:
the change in lease payments results in revised consideration for the lease that is
(a)
substantially the same as, or less than, the consideration for the lease immediately preceding the
change;
(b)
(c)
any reduction in lease payments affects only payments due on or before 30 June 2021; and
there is no substantive change to other terms and conditions of the lease.
Accounting policy applied to the information presented for the prior period under AASB 117 Leases:
Leases are classified at their inception as either operating or finance leases based on the economic
substance of the agreement so as to reflect the risks and benefits incidental to ownership.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 48 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
Finance leases
Leases of fixed assets, where substantially all of the risks and benefits incidental to ownership of the
asset, but not the legal ownership, are transferred to the group are classified as finance leases.
Finance leases are capitalised, recording an asset and liability equal to the fair value or, if lower, the
present value of the minimum lease payments, including any guaranteed residual values. The interest
expense is calculated using the interest rate implicit in the lease, if this is practicable to determine; if
not, the group’s incremental borrowing rate is used. Interest expense on finance leases is included in
finance costs in the statement of profit or loss and other comprehensive income. Lease assets are
depreciated on a straight line basis over their estimated useful lives where it is likely the group will
obtain ownership of the asset, or over the term of the lease. Lease payments are allocated between
the reduction of the lease liability and the lease interest expense for the period in accordance with the
effective interest method.
Operating leases
Lease payments for operating leases are recognised as an expense on a straight-line basis over the
term of the lease. Lease incentives received under operating leases are recognised as a liability and
amortised on a straight-line basis over the life of the lease term.
(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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 49 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
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.
(l)
Impairment of non-financial 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 profit or loss and other
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 profit or loss and other
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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 50 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
(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.
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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 51 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
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 have 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.
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 from contracts with customers is recognised either at a point in time or over time depending
on the nature of the contract, including the timing of satisfaction of performance obligations and the
transfer of control to the customer. The group’s contracts with customers fall into the following
categories:
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 52 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
Revenue
Stream
Nature of Goods
or Services
Promised
Typical
Performance
Obligations
When Performance Obligation is
Typically Satisfied
Course fees and
Government subsidies
Training Service
Delivery of
training course
Over time, being throughout the
period of the course. For short-term
(i.e. one day) courses the
performance obligation may be
satisfied at a point in time, being the
date of course delivery.
Method Used to Determine
Progress Towards Complete
Satisfaction of Performance
Obligation
An output method is used being
contact days elapsed as a
percentage of total contact
days. This is considered the
most appropriate basis for
recognition of revenue as it is
readily observable and
sufficiently linked to the
performance obligations
specified in the contract.
Specific
projects with
performance
milestones &
project
delivery
indicators
Construction of
Safe Life
Processing Plant
(SLPP)
Facility
accommodation
Project
income
Specific
project
milestones as
specified in
each individual
contract.
Performance obligation: Specific
project milestones as specified in
contract, with a transaction price
allocated to each milestone. Project
delivery in most instances will not
extend over more than one financial
period.
An input method is used, based
on the amount of contract costs
incurred as a percentage of
budgeted contract costs
Ongoing
project service
income
Facility
Management of
Safe Life
Processing Plant
(SLPP)
Delivery of a
service over
the length of
the contract
period.
Over time, being as the services are
delivered over the duration of the
contract.
An output method is applied
based on either time elapsed,
units delivered, or milestones
reached dependent on the
terms of the individual
contracts. Control is considered
to pass in a manner consistent
with measurement provided by
this method.
Placement services
Recruitment and
labour hire
services
1. Placement
of personnel
at inception
2. Provision of
employee
for a fixed
period of
time
Placement: At a point in time, being
when the employee has been
successfully placed (i.e. acceptance
of placement by customer).
Provision of employee: Over time,
being the period of time that staff are
employed.
An output method (time
elapsed on percentage of total
time) is used. This reflects the
expectation of consistency in
transfer of services over the
contract period for labour
services.
Contracts with customers do not typically involve a significant financing component. Course fee
contracts may specify an entitlement to receive a portion of the contract value in advance of services
being provided, however the period of time between payment being received and course delivery is
generally not greater than 12 months. Amounts received in advance of services being provided are
recognised as contract liabilities (refer note 1a (p)).
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 53 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
The group was eligible for the Australian Job Keeper wage subsidy and cash flow boost schemes
during the year. Revenue from these government grant and subsidy is recognised when the group is
entitled to receive them.
No disclosure has been made within the financial statements of the aggregate amount of the
transaction price allocated to performance obligations that are unsatisfied (or partially unsatisfied) as
of the end of the reporting period, as these performance obligations relate to contracts that have an
original expected duration of one year or less.
There are no elements of consideration under any of the above revenue streams that are variable in
nature.
(p)
Contract assets and contract liabilities
Contract assets represent the group’s right to consideration (not being an unconditional right
recognised as a receivable) in exchange for goods or services transferred to the customer. Contract
assets are measured at the amount of consideration that the group expects to be entitled in exchange
for goods or services transferred to the customer.
Contract liabilities represent the group’s obligation to transfer goods or services to the customer for
which the group has received consideration (or an amount of consideration is due) from the customer.
Amounts recorded as contract liabilities are subsequently recognised as revenue when the group
transfers the contracted goods or services to the customer.
(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. Disclosure of the amounts and basis for such changes is made, where material, in
note 1a(c)(i) and note 11.
(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 16.
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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 54 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1a
Summary of significant accounting policies continued
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 measures derivative financial liabilities at fair value through profit and loss (refer note
1a(h)) on a recurring basis. The valuation of these derivatives involves the use of unobservable inputs
(level 3), which are detailed together with a reconciliation of changes in the fair value of these
liabilities throughout the period in note 17.
The carrying values of other financial assets and financial liabilities as disclosed in note 24
approximate their fair values.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 55 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 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
Determining the lease term of contracts with renewal and termination options
The Group determines the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any
periods covered by an option to terminate the lease, if it is reasonable certain not to be exercised.
The Group has several lease contracts that include extension and termination options. The Group
applies judgement in evaluating whether it is reasonably certain whether or not to exercise the option
to renew or terminate the lease. That is, it considers all relevant factors that create an economic
incentive for it to exercise either the renewal or termination. After the commencement date, the Group
reassesses the lease term if there is significant event or change in circumstances that is within its
control and affects its ability to exercise or not to exercise the option to renew or to terminate (eg
construction of significant leasehold improvements).
Recovery of deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent it is probable that future
taxable profits will be available against which the losses can be utilised. . 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.
A deferred tax asset has not been recognised for unused tax losses in the year of $7,845,220 (tax
effected: $2,353,566); 2019: $7,372,483 (tax effected: $2,211,745). Due to the recent history of tax
losses and no other evidence of recoverability in the near future.
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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 56 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 1b
continued
Significant accounting judgements, estimates and assumptions
(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 expense of $1,096,000 was recognised in the current year in respect of Right-of-use
assets, property plant and equipment, and intangibles. (2019: $nil). 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 11.
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 goes over a reporting date this is recorded
as a contract liability on the statement of financial position. In calculating the amount of contract
liability, consideration is also given to the probability of reversals and student refunds and the impact
on the level of income recorded.
Leases – Estimating the incremental borrowing rate
The Group cannot readily determine the interest rate implicit in the lease, therefor it uses the
incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the
Group would have to pay to borrow over a similar term, and with a similar security, the funds
necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires
estimation. The Group estimates the IBR based on recent third party financing received and makes
adjustments specific to the lease if required eg term, country currency and security.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 57 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 2
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.
- 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 2020
Page 58 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 2
Operating Segments continued
Year ended 30 June 2020
Revenue from contracts with customers
Site Skills
Training
(Domestic)
$
Site Skills
Training
(International)
$
Energy
Services
$
Tertiary
Education
$
Total
Segments
$
Corporate
and
Eliminations
$
Total
$
Revenue from contracts with customers - external customer
11,938,341
9,553,265
1,881,617
3,591,170
26,964,393
294,666
27,259,059
Revenue from contracts with customers - inter-segment
-
31,261
91,802
-
123,063
(123,063)
-
Total segment revenue
11,938,341
9,584,526
1,973,419
3,591,170
27,087,456
171,603
27,259,059
Segment net operating profit / (loss) before tax
(2,624,136)
(759,025)
(391,106)
465,854
(3,308,413)
(6,907,566)
(10,215,979)
Interest revenue
Interest expense
-
16,132
15
-
16,147
8,144
24,291
(128,375)
(697,231)
(2,110)
(18,001)
(845,717)
(1,336,755)
(2,182,472)
Depreciation and amortisation
(977,566)
(925,314)
(96,801)
(141,428)
(2,141,109)
(439,727)
(2,580,836)
EBITDA
(1,518,195)
847,388
(292,210)
625,283
(337,734)
(5,139,228)
(5,476,962)
Segment assets as at 30 June 2020
3,913,701
13,965,550
563,580
1,254,760
19,697,591
3,061,934
22,759,525
Segment liabilities as at 30 June 2020
3,383,916
8,536,953
178,428
950,297
13,049,594
17,163,425
30,213,019
Capital expenditure as at 30 June 2020
574,078
352,774
793
73,513
1,001,158
60,186
1,061,344
.
Year ended 30 June 2019
Revenue from contracts with customers
Site Skills
Training
(Domestic)
$
Site Skills
Training
(International)
$
Energy
Services
$
Tertiary
Education
$
Total
Segments
$
Corporate
and
Eliminations
$
Total
$
Revenue from contracts with customers - external customer
12,866,083
12,137,035
3,235,102
2,614,754
30,852,974
60,316
30,913,290
Revenue from contracts with customers - inter-segment
-
521,336
403,915
-
925,251
(925,251)
-
Total segment revenue
12,866,083
12,658,371
3,639,017
2,614,754
31,778,225
(864,935)
30,913,290
Segment net operating profit / (loss) before tax
(2,326,460)
134,956
37,966
75,658
(2,077,880)
(4,180,007)
(6,257,887)
Interest revenue
Interest expense
-
(5,506)
11,784
(9,762)
82
(561)
-
11,866
54,317
66,183
(348)
(16,177)
(399,020)
(415,197)
Depreciation and amortisation
(592,276)
(549,460)
(173,206)
(34,132)
(1,349,074)
(64,642)
(1,413,716)
EBITDA
(1,728,678)
682,394
211,651
110,138
(724,495)
(3,770,662)
(4,495,157)
Segment assets as at 30 June 2019
4,319,896
10,069,113
1,732,117
1,111,430
17,232,556
466,672
17,502,193
Segment liabilities as at 30 June 2019
2,803,973
4,823,425
313,137
713,977
8,654,512
11,620,928
20,275,440
Capital expenditure as at 30 June 2019
591,517
1,119,065
6,877
107,743
1,825,202
79,503
1,904,705
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 59 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 2
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
Depreciation and amortisation expense
Finance costs
Fair value (loss)/gain of financial iiabilities at fair value
Other corporate costs
Corporate income
Group loss before tax
Reconciliation of assets
Segment operating assets
Corporate assets
Cash at bank
Security deposits
Intangibles
Other assets
Inter-segment receivables
Total assets per statement of financial position
Reconciliation of liabilities
Segment operating liabilities
Corporate liabilities
Corporate trade payables
Interest bearing debt
Other financial liabilites
Other liabilities
Total liabilities per statement of financial position
Consolidated Group
2020
$
2019
$
(3,308,413)
1,140,000
(206,745)
(2,368,569)
(1,404,247)
(158,335)
(439,727)
(1,336,755)
(1,021,916)
(1,282,875)
171,603
(10,215,979)
(2,077,880)
1,140,000
(76,482)
(2,579,527)
(1,179,074)
(134,390)
(64,642)
(399,020)
116,498
(1,440,442)
437,072
(6,257,887)
19,697,591
17,232,556
139,647
543,705
198
2,378,384
-
22,759,525
15,743
497,154
463
731,658
(975,381)
17,502,193
13,049,594
8,654,512
6,739,157
8,532,506
1,240,546
651,216
30,213,019
6,730,071
4,247,393
218,630
424,834
20,275,440
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 60 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 2
Operating Segments continued
Disaggregation of Revenues
As disclosed in note 1a(o), the group derives its revenue from the transfer of services over time and at
a point in time. The following table provided a disaggregation of revenue by major revenue class and
by geographical location.
Year ended 30 June 2020
Revenue from contracts with customers - external
Course fees
Placement services
Government subsidies received
Project income
Other revenue
Total revenue from contracts with customers - external
Revenue from contracts with customers - inter segment
Total revenue from contracts with customers
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Total revenue from contracts with customers
Year ended 30 June 2019
Revenue from contracts with customers - external
Course fees
Placement services
Government subsidies received
Project income
Other revenue
Total revenue from contracts with customers - external
Revenue from contracts with customers - inter segment
Total revenue from contracts with customers
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Total revenue from contracts with customers
Australia
Asia
$
$
Corporate
and
Eliminations
$
Total
$
13,240,029
-
2,460,778
47,785
14,025
15,762,617
-
15,762,617
6,701,157
1,527,959
104,914
2,532,215
335,531
11,201,776
123,063
11,324,839
-
-
221,000
-
73,666
294,666
(123,063)
171,603
19,941,186
1,527,959
2,786,692
2,580,000
423,222
27,259,059
-
27,259,059
-
15,762,617
15,762,617
15,457
11,309,382
11,324,839
8,553
163,050
171,603
24,010
27,235,049
27,259,059
-
-
-
-
Australia
Asia
$
$
Corporate
and
Eliminations
$
Total
$
14,077,635
-
1,867,431
19,648
89,040
16,053,754
1,300
16,055,054
9,360,865
2,727,917
-
2,425,842
284,596
14,799,220
923,951
15,723,171
-
-
-
-
60,316
60,316
(925,251)
(864,935)
23,438,500
2,727,917
1,867,431
2,445,490
433,952
30,913,290
-
30,913,290
-
16,055,054
16,055,054
15,782
15,707,389
15,723,171
14,251
(879,186)
(864,935)
30,033
30,883,257
30,913,290
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 61 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 3
Earnings per Share
a) Earnings used in calculating earnings per share
For basic and diluted earnings per share:
Net loss excluding discontinued operations expense attributable to ordinary
equity holders of the parent
Net loss attributable to ordinary equity holders of the parent
Consolidated Group
2020
2019
$
$
(9,145,799)
(10,264,692)
(3,548,819)
(4,742,968)
b) Weighted average number of shares
Weighted average number of ordinary shares for basic and diluted earnings per share
No.
776,786,845
No.
681,183,181
c) (Loss) / earnings per share (cents)
Loss per share excluding discontinued operations attributable to the ordinary
equity holders of the parent
Loss per share attributable to the ordinary equity holders of the parent
(1.18)
(1.32)
(0.52)
(0.70)
Options outstanding are anti-dilutive and therefore were not considered in the calculation of diluted
earnings per share for the year ended 30 June 2020 and 2019.
To calculate the EPS excluding discontinued operations expense, the weighted average number of
ordinary shares is as per above. The following table provides the profit / (loss) amounts used.
Consolidated Group
2020
2019
$
$
Net loss from discontinued operations attributable to ordinary equity holders
of the parent
(1,118,893)
(1,194,149)
Note 4
Revenue from Contracts with Customers from Continuing Operations
Revenue from continuing operations
Course fees
Placement services
Government support and subsidies
Project income
Other revenue
Consolidated Group
2020
2019
$
$
19,941,186
1,527,959
2,786,692
2,580,000
423,222
27,259,059
23,438,500
2,727,917
1,867,431
2,445,490
433,952
30,913,290
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 62 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 5
Expenses from Continuing Operations
Employee benefits expense
Wages and salaries
Superannuation expense
Payroll tax and workers compensation
Changes in provisions for annual and long-service leave
Other employment expenses
Share-based payment expense
Other expenses
Legal, accounting and other professional fees
Travel & accommodation
Consultants cost
Administrative expenses
Finance costs
Interest expense - third parties
Interest expense - related parties
Interest expense - lease liabilities
Facilities fee
Depreciation and amortisation
Depreciation of property, plant & equipment
Amortisation of intangible assets
Depreciation of right-of-use assets
Note
Consolidated Group
2019
$
2020
$
10,801,181
922,693
520,053
116,609
352,762
13,959
12,727,257
774,655
681,953
879,572
991,180
3,327,360
118,399
952,043
998,367
113,663
2,182,472
767,676
457,809
1,355,351
2,580,836
9
10
12
10,906,472
930,653
600,033
(10,268)
318,949
9,228
12,755,067
1,073,304
1,034,949
841,168
878,871
3,828,292
24,907
382,191
-
8,099
415,197
952,884
460,832
-
1,413,716
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 63 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 6
Taxation
a) Income tax expense
The major components of income tax expense are:
Statement of profit or loss and other comprehensive income
Current income tax
Current income tax charge
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 profit
or loss and other comprehensive income
b) Numerical reconciliation of income tax expense to prima facie tax payable
Total loss before income tax
At the parent entity's statutory income tax rate of 30% (2019 - 30%)
Differential in overseas tax rate to Australian tax rate
Non-assessable income
Non-deductible expenses
Utilisation of previously unrecognised tax losses
Adjustments in respect of current income tax of previous years
Impairment of PP&E, intangibles and right of use assets
Deferred tax asset not recognised
Consolidated Group
2020
$
2019
$
86,384
7,991
92,984
(1,688,960)
(45,662)
81,057
48,713
(1,514,919)
(10,215,979)
(3,064,794)
93,878
(3,121,931)
3,462,756
(11,553)
7,991
328,800
2,353,566
(6,257,887)
(1,877,366)
255,610
(3,411,523)
3,125,938
(130,363)
(1,688,960)
-
2,211,745
48,713
(1,514,919)
A deferred tax asset has not been recognised for unused tax losses amounting to $7,845,220 (tax
effected: $2,353,566).
In 2019, following review of the historical taxation treatment for the revenue derived by the PP business,
management lodged amended income tax returns for the 2015, 2016 and 2017 income tax years
resulting in an income tax refund for $1,688,960 being received in January 2019.
c) Deferred tax
Consolidated statement of
financial position
Consolidated statement of
profit or loss
2020
$
2019
$
2020
$
2019
$
Accrued expenses
Superannuation payable
Provision for leave balance
Provision for impairment of receivables
Provision for re-credits
Plant and Equipment under lease
Other foreign entity deferrals
Deferred tax benefit
Net deferred tax assets
446,522
32,163
238,776
42,300
23,717
149,718
(12,136)
626,572
18,527
206,719
12,000
23,717
-
(11,606)
921,060
875,929
Reconciliation of net deferred tax asset /(liability)
As of 1 July
Opening balance adjustment
Tax income during the period recognised in profit or loss
As at 30 June
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
180,050
(13,636)
(32,057)
(30,300)
-
(149,718)
(1)
(45,662)
2020
$
875,929
(531)
45,662
921,060
61,960
3,126
6,910
17,252
-
(8,191)
81,057
2019
$
959,251
(2,265)
(81,057)
875,929
Page 64 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 7
Trade and Other Receivables
CURRENT
Receivables from contracts with customers
Allowances for expected credit losses
Other receivables
Total current trade and other receivables
Note
7(a)
Consolidated Group
2020
2019
$
$
23,473,161
(21,118,645)
2,354,516
302,009
2,656,525
25,030,526
(21,304,563)
3,725,963
335,109
4,061,072
Trade receivables includes an amount of $20,977,645, representing a portion of a total reconciliation
payment of $28,969,145 receivable from the Commonwealth Government Department of Education
and Training (DET) for services performed prior to 30 June 2017. The difference of $7,991,500 was
impaired in an earlier period, which should not be taken as an assertion by the Group that the Group
is not entitled to this amount.
The expected loss rate for this balance (refer below) has been set at 100% in light of the uncertain
circumstances with regard to the reconciliation payment. The loss allowance will 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.
a) Allowance for expected credit losses
As described in note 1a(h), the group applies the simplified expected credit loss model prescribed in
AASB 9 to determine an allowance for expected credit losses on its receivables from contracts with
customers (trade receivables) and contract assets.
To measure the expected credit losses, trade receivables and contract assets have been grouped
based on shared credit risk characteristics and the days past due. The contract assets have
substantially the same risk characteristics as the trade receivables for the same types of contracts.
The group has therefore concluded that the expected loss rates for trade receivables are a
reasonable approximation of the loss rates for the contract assets.
The expected loss rates are based on the payment profiles for credit sales over a period of 3 years
before 30 June 2020 and 30 June 2019 respectively and the corresponding historical credit losses
experienced within this period.
The historical loss rates are adjusted to reflect current and forward-looking macroeconomic factors
affecting the ability of the customers to settle the receivables. The Group identifies GDP growth
conditions to be the most relevant factor and accordingly adjusts the historical loss rates based on the
expected change in this factor. When considering macroeconomic factors, the Group has also taken
into account the economic uncertainties associated with the COVID-19 pandemic.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 65 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 7
Trade and Other Receivables continued
The tables below show the calculation of the expected credit loss provision at both 30 June 2020 and
30 June 2019.
Consolidated Group
Total
Trade receivables - Days past due
31-60 days
61-90 days
0-30 days
+91 days
Discontinued
Operation
30 June 2020
Expected credit loss rate
Estimated total gross carrying
Expected credit loss
1 July 2019
Expected credit loss rate
Estimated total gross carrying
Expected credit loss
23,473,161
21,118,645
1.3%
836,658
10,565
2.9%
459,803
13,198
8.9%
458,289
40,984
10.0%
740,766
76,253
20,977,645
20,977,645
25,030,526
21,304,563
0.7%
1,246,881
10,793
5.0%
1,073,953
53,698
10.0%
402,556
40,256
17.2%
1,329,491
222,171
20,977,645
20,977,645
The closing loss allowances for receivables from contracts with customers and contract assets as at
30 June 2020 reconcile to the opening loss allowances as follows:
Opening Balance - calculated under AASB 139
Adjustment on initial application of AASB 9
Opening balance – calculated under AASB 9
Increase/(reversal) of loss allowance recognised in profit or loss
Amounts written off
Foreign Exchange movement
Closing Balance
Consolidated Group
2020
$
2019
$
-
-
21,304,563
(189,272)
(2,043)
5,397
21,118,645
21,671,453
(471,897)
21,199,556
105,007
-
-
21,304,563
Other receivables are excluded from the above analysis as these represent balances due from
taxation authorities for which the expected loss rate is 0%.
b) Related party receivables
For terms and conditions of related party receivables refer to note 21.
c) 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 2020, Group receivables, before allowance for expected credit losses, included one customer
that owed $20,977,645 (as noted above).
d) Foreign exchange and interest rate risk
Detail regarding foreign exchange and interest rate risk exposure is disclosed in note 26.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 66 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 8
Contract Assets
Accrued revenue
496,950
317,295
Consolidated Group
2020
$
2019
$
Note 9
Property, Plant and Equipment
Plant and equipment
Leasehold improvements
At cost
Accumulated depreciation and impairment
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
Consolidated Group
2020
2019
$
$
9,573,434
(3,729,995)
5,843,439
9,123,658
(2,821,405)
6,302,253
1,970,051
1,555,369
1,384,145
(1,272,757)
111,388
1,321,729
(1,194,898)
126,831
4,689,755
(4,279,019)
410,736
4,504,353
(3,982,620)
521,733
342,609
(338,581)
4,028
778,509
(584,001)
194,508
Total property, plant and equipment
8,339,642
8,700,694
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 67 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 9
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:
Consolidated Group:
Balance at 30 June 2018
Additions
Transfers - in (out)
Disposals
Depreciation expense
Exchange rate differences
Balance at 30 June 2019
Additions
Transfers - in (out)
Disposals
Depreciation expense
Impairment expense
Exchange rate differences
Balance at 30 June 2020
Leasehold
Capital Works
Improvements
in Progress
Computers
$
$
$
Furniture &
Fittings
$
Vehicles
Total
$
$
6,123,679
20,492
42,139
-
(386,906)
502,849
6,302,253
13,553
2,765
-
(423,126)
(345,072)
293,066
5,843,439
444,813
1,152,581
(84,751)
-
-
42,726
1,555,369
531,679
(197,544)
-
-
-
80,547
1,970,051
132,904
78,480
14,918
-
(99,494)
23
126,831
56,022
8,844
-
(80,338)
-
29
111,388
745,621
174,217
3,125
(43,300)
(371,832)
13,902
521,733
51,766
87,120
(14,122)
(244,383)
-
8,622
410,736
275,558
-
-
-
(94,652)
13,602
194,508
-
(175,651)
-
(19,829)
-
5,000
4,028
7,722,575
1,425,770
(24,569)
(43,300)
(952,884)
573,102
8,700,694
653,020
(274,466)
(14,122)
(767,676)
(345,072)
387,264
8,339,642
Note 10
Intangible Assets
Non-Current
Goodwill
Net carrying value
Training licences and course material
Cost
Accumulated amortisation and impairment
Net carrying value
Customer contracts
Cost
Accumulated amortisation
Net carrying value
Software development
Cost
Accumulated amortisation
Net carrying value
Total intangible assets
Consolidated Group
2020
2019
$
$
441,015
638,050
3,518,016
(2,985,969)
532,047
3,242,515
(2,598,845)
643,670
1,615,542
(1,615,542)
1,615,542
(1,615,542)
-
-
1,596,286
(1,318,740)
277,546
1,359,511
(1,132,015)
227,496
1,250,608
1,509,216
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 68 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 10
Intangible Assets continued
(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
$
638,050
-
-
-
-
638,050
-
-
-
(197,035)
-
441,015
Training
Licences
Courses
$
Software
Development
$
Total
$
603,575
335,105
-
(302,489)
7,479
643,670
270,364
-
(271,084)
(112,688)
1,785
532,047
217,440
143,830
24,569
(158,343)
-
227,496
137,880
98,895
(186,725)
-
-
277,546
1,459,065
478,935
24,569
(460,832)
7,479
1,509,216
408,244
98,895
(457,809)
(309,723)
1,785
1,250,608
Consolidated Group:
Balance at 30 June 2018
Additions
Transfers in
Amortisation expense
Exchange rate differences
Balance at 30 June 2019
Additions
Transfers in
Amortisation expense
Impairment expense
Exchange rate differences
Balance at 30 June 2020
Note 11
Impairment Testing
An impairment expense is recognised for the amount by which the asset's carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell
and value in use.
The recoverable amount of property, plant and equipment and intangible assets is 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 Group’s five cash generating units are as follows:
- Site Skills Training - Domestic
- Site Skills Training - International
- Clark Property Development
- Tertiary Education
- Energy Services
During the year management added a new cash generating unit (CGU) to the group. The Clark
Property Development CGU was created to separate the Clark lease and urban development project
from the Site Skills Training (International) CGU.
Due to the impacts of COVID-19, the group sought to reassess the impairment of property, plant and
equipment and intangible balances of all CGUs. As a result of testing, an impairment charge has
been applied to the Site Skills Training (Domestic) CGU.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 69 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 11
Impairment Testing continued
Site Skills Training - Domestic cash-generating unit
The recoverable amount of the Site Skills Training - Domestic CGU of $1,145,252 as at 30 June 2020
has been determined based on the cash-generating unit’s value-in-use calculation using projected
cash flows from financial budgets covering a five year period.
Key inputs into the impairment model included a pre-tax discount rate of 14.93%, annual revenue
growth rates over the 5-year forecast period of 11-20%, annual EBITDA margins of 4-8%, and a
terminal growth rate of 0%.
As a result of this analysis management recognised an impairment loss totalling of $1,096,000 and
was allocated to this CGU’s intangible assets (training licenses and course material - $309,723), plant
and equipment (leasehold improvements - $345,072) and right-of-use assets ($441,205). The group
attributes the impairment charge to the impacts of ongoing regulatory uncertainty between SST and
the ASQA and the global occurrence of COVID-19.
Site Skills Training – International cash-generating unit
The recoverable amount of the Site Skills Training – International CGU of $8,312,589 as at 30 June
2020 has been determined based on the cash generating unit’s value in use calculation using
projected cash flows from financial budgets covering a 5-year period.
Key inputs into the impairment model included a pre-tax discount rate of 15.49%, annual revenue
growth rate over the 5-year forecast period of 15-65%, annual EBITDA margins of 14-19%, and a
terminal growth rate of 0%.
As a result of this analysis, management did not recognise an impairment charge.
Clark Property development cash-generating unit
The recoverable amount of the Clark Property development CGU of $20,356,026 as at 30 June 2020
has been determined based on the cash generating unit’s value in use calculation using projected
cash flows from financial budgets covering a 5-year period.
Key inputs into the impairment model included a pre-tax discount rate of 15.49%, annual EBITDA
margins of 71-72%, and a terminal growth rate of 0%.
As a result of this analysis, management did not recognise an impairment charge.
Tertiary Education cash-generating unit
The recoverable amount of the Tertiary Education CGU of $977,837 as at 30 June 2020 has been
determined based on the cash generating unit’s value in use calculation using projected cash flows
from financial budgets covering a 5-year period.
Key inputs into the impairment model included a pre-tax discount rate of 17.14% annual revenue
growth rate over the 5-year forecast period of 10%, annual EBITDA margins of 6-8%, and a terminal
growth rate of 0%.
As a result of this analysis, management did not recognise an impairment charge.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 70 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 11
Impairment Testing continued
Energy Services cash-generating unit
The recoverable amount of the Energy Services CGU of $498,306 as at 30 June 2020 has been
determined based on the cash generating unit’s value in use calculation using projected cash flows
from financial budgets covering a 5-year period.
Key inputs into the impairment model included a pre-tax discount rate of 17.57, an annual revenue
growth rate over the 5-year forecast period of 10%, annual EBITDA margin of 5-10%, and a terminal
growth rate of 0%.
As a result of this analysis, management did not recognise an impairment charge.
Sensitivity to changes in assumptions
The calculation of value in use for the cash generating units is most sensitive to changes in the
following assumptions:
- Revenue growth
- Gross Margins
- Discount rates
Revenue growth
Revenue growth is based on the specific circumstances of each CGU. A decrease in demand can
lead to a decline in revenue growth. A decrease in the annual revenue growth rate by 0.5% would
result in an impairment to the Site Skills Training – International and Energy Services CGUs. A
decrease in the rate by 2.5% would result in an impairment to the Tertiary Education CGU. No
reasonable possible change in forecast revenue growth would have resulted in an impairment to the
Clark Property development CGU.
Gross Margins
Gross margins are assumed to be maintained at historical levels. A decrease in demand can lead to a
decline in the gross margin. A decrease in the gross margin by 0.5% would result in an impairment to
the Site Skills Training – International CGU. A decrease in the gross margin by 1% would result in an
impairment to the Energy Services CGU. A decrease in the rate by 2.5% would result in an
impairment to the Tertiary Education CGU. No reasonable possible change in the growth margin
would have resulted in an impairment to the Clark Property development CGU.
Discount rates
The discount rate calculation is based on the specific circumstances of each CGU and is derived from
its weighted average cost of capital (WACC). A rise in the discount rate to 16.07% would result in an
impairment to the Site Skills Training – International CGU. A rise in the discount rate to 18.49% would
result in an impairment to the Clark Property development CGU. A rise in the discount rate to 31.69%
would result in an impairment to the Energy Services CGU. No reasonably possible change in the
discount rate applied would have resulted in an impairment of the Tertiary CGU at 30 June 2020.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 71 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 12
Right-of-Use Assets and Lease Liabilities
Lease arrangements (30 June 2020)
The following information relates to the current year only and is presented in accordance with
AASB 16 Leases (which was applied by the group for the first time on 1 July 2019).
Lease assets
Carrying amount of leased assets :
Buildings under lease arrangements
At cost
Accumulated depreciation and impairment
Land under lease arrangements
At cost
Accumulated depreciation
Vehicles under lease arrangements
At cost
Accumulated depreciation
Total carrying amount of leased assets
2020
$
3,837,569
(1,484,583)
2,352,986
3,887,672
(253,300)
3,634,372
312,068
(198,687)
113,381
6,100,739
Movements in carrying amounts for each class of right-of-use asset between the beginning and the
end of the current financial year are as follows:
Balance at 30 June 2019
Impact of initial adoption of AASB 16
Additions
Depreciation
Impairment loss
Exchange rate differences
Balance at 30 June 2020
Land
-
3,887,672
-
(248,697)
-
(4,603)
3,634,372
Buildings
-
3,785,876
51,693
(1,044,384)
(441,205)
1,006
2,352,986
Motor Vehicles
Total
-
175,651
-
(62,270)
-
-
113,381
-
7,849,199
51,693
(1,355,351)
(441,205)
(3,597)
6,100,739
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 72 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 12
Right-of-Use Assets and Lease Liabilities continued
Lease liabilities
Lease liabilities - current
Land
Buildings
Motor vehicles
Lease liabilities - non-current
Land
Buildings
Motor vehicles
Total carrying amount of lease liabilities
2020
$
173,046
1,204,146
83,995
1,461,187
6,252,951
2,113,012
7,243
8,373,206
9,834,393
Movements in lease liabilities for each class of right-of-use asset between the beginning and the end
of the current financial year are as follows:
Balance at 30 June 2019
Impact of initial adoption of AASB 16
Additions
Lease repayments
Interest
Exchange rate differences
Balance at 30 June 2020
Land
-
6,211,650
(570,378)
643,700
141,025
6,425,997
Buildings
-
3,862,843
51,693
(954,703)
345,830
11,495
3,317,158
Motor Vehicles
Total
-
174,755
(92,353)
8,836
-
91,238
-
10,249,248
51,693
(1,617,435)
998,367
152,520
9,834,393
In addition to the depreciation and interest disclosed above, the Group recognised the following
expenses relating to leases for the year ended 30 June 2020:
Expense relating to leases of 12-months or less (for which a lease asset and lease liability has
not been recognised)
Expense relating to leases of low value assets (for which a lease asset and lease liability has not
been recognised)
Gains recognised in profit or loss to reflect changes in lease payments arising from rent
concessions occurring as a direct consequence of the Covid-19 pandemic
The total cash outflow for leases for the year ended 30 June 2020 was $2,355,549.
2020
$
(613,026)
(133,925)
5,585
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 73 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 12
Right-of-Use Assets and Leased Liabilities continued
Non-cancellable operating lease arrangements
Future minimum lease payments to be made:
- Not later than 1 year
- Later than 1 year and not later than 5 years
- Later than 5 years
Aggregate lease payments contracted for at reporting date
2020
$
2019
$
1,884,134
5,049,071
6,884,947
13,818,152
-
-
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 2018 the Group entered into a five-year commercial lease for the head office location. This lease
does not include any renewal options and there are no restrictions imposed by entering into these
leases. In addition, the Group has entered into leases for training facilities at Belmont (Perth),
Gladstone, Landsborough and Darwin. 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.
From 1 July 2019, the Group has recognised right-of-use assets for these leases, except for leases of
12 months or less.
Finance Lease arrangements
The following is a reconciliation of the total undiscounted future lease payments to be made by the
group in relation to finance leases to the carrying amount of finance lease liabilities.
Undiscounted future lease payments to be made:
- Not later than 1 year
- Later than 1 year and not later than 5 years
- Later than 5 years
Total undiscounted future lease payments to be made
Less: future finance charges
Carrying amount of finance lease liabilities
2020
$
2019
$
- 111,837
- 82,624
- -
- 194,461
- (19,707)
- 174,754
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.
From 1 July 2019, the Group has recognised right-of-use assets for these finance leases.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 74 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 13
Trade and Other Payables
Current
Unsecured liabilities
Trade payables
Employee related payables
Accruals
Other payables
Total trade and other payables
Non-current
Unsecured liabilities
Trade payables
Accruals
Total trade and other payables
Consolidated Group
2020
2019
$
$
1,929,846
664,759
1,766,872
58,768
4,420,245
3,509,922
776,783
1,715,062
78,355
6,080,122
Consolidated Group
2020
2019
$
$
4,581,310
1,013,773
5,595,083
4,581,310
1,013,773
5,595,083
Non-current trade payables and accruals balances include commission payable to agents on receipt
of the reconciliation payment receivable from the DET (see note 7).
The non-current accruals account also includes $475,352 representing executive STI bonuses
payable on receipt of the reconciliation payment receivable from the DET.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 75 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 13
Trade and Other Payables continued
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 7 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.
(b)
Related party payables
For terms and conditions relating to related party payables refer to note 17.
(c)
Interest rate, foreign exchange and liquidity risk
Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in
note 24.
Note 14
Contract Balances
The amount of the contract liability recognised at the beginning of the period was recognised as
revenue during the 2020 year. All contract liabilities outstanding at 30 June 2020 are expected to be
recognised as revenue within the next twelve months.
Unearned revenue
812,474
390,458
Consolidated Group
2020
$
2019
$
At 1 July 2019
Deferred during the year
Released to statement of profit or loss
At 30 June 2020
Consolidated Group
2020
$
2019
$
390,458
6,008,719
(5,586,702)
812,474
623,824
7,515,948
(7,749,314)
390,458
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 76 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 15
Interest Bearing Debt
Current financial liabilities
Non-current financial liabilities
Finance lease liability
Unsecured related party loans
Consolidated Group
2020
$
2019
$
-
71,143
4,970,972
4,167,276
4,970,972
4,238,419
Unsecured loans due within 12 months represent the financing agreement with Lucerne Investment
Partners (Lucerne). The facility has been fully drawn to $2,000,000, bears an interest rate of 9.5%
and is repayable at call. The loan is secured by a first ranking general security deed over all the
assets and undertaking of the group.
Non-current unsecured related party loans represent the current balance owed to Punta Properties
Inc. (see Note 21). The loan is payable only upon occurrence of a capital transaction that provides a
set minimum net cash amount to the group.
Note 16
Provisions
Current
Employee - annual leave
Other
Non-current
Provision for long service leave
Lease rental incentive
Provision for pension liability
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Consolidated Group
2020
2019
$
$
507,544
120,697
628,241
465,898
126,428
592,326
Consolidated Group
2020
2019
$
$
342,216
-
269,087
611,303
267,254
2,453,828
199,923
2,921,005
Page 77 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 16
Provisions continued
Movement in provisions
Movements in long service leave and lease rental provisions are set out below:
At 30 June 2018
Arising during the year
Utilised/provision released
At 30 June 2019
Adjustment to opening balance
Arising during the year
At 30 June 2020
Long Service
Leave
$
163,044
104,211
-
267,255
74,961
342,216
Lease
Rental*
$
2,306,200
154,927
(7,300)
2,453,827
(2,453,827)
-
-
Total
$
163,044
104,211
-
267,255
74,961
342,216
* The carrying amount of the rental incentive was offset against the right-of-use assets recognised at 1 July 2019 under AASB
16 (refer to Note 1(a).
Pension Liability
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. The defined benefit plan is unfunded and
covers the majority of permanent employees.
The tables below summarise the amount of the defined benefit liability recognised in the statement of
financial position and components of defined benefit expense and remeasurement losses on the
defined benefit liability recognised in the statement of profit or loss and other comprehensive loss for
the current and comparative period.
Movement in the defined benefit liability is as follows:
Balance at beginning of the year
Defined benefits expense
Benefits paid
Remeasurement of losses recognised in
other comprehensive income
Balance at end of the year
The defined benefit expense is as follows:
Current service Cost
Interest cost
Settlement loss
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
2020
$
2019
$
199,923
80,118
(18,191)
7,237
269,087
94,742
47,010
-
58,171
199,923
2020
$
2019
$
45,353
10,634
24,131
80,118
38,669
8,341
-
47,010
Page 78 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 16
Provisions continued
The remeasurement of losses in the defined benefit liability is as follows:
Actuarial losses due to:
Changes in financial assumptions
Experience adjustments
Movements in the present value of the defined benefit obligation
are as follows:
Present value of the defined benefit obligation at
the beginning of the year
Current service cost
Benefits paid
Actuarial losses
Interest cost
Settlement loss
Present value of defined benefits obligation at end of year
2020
$
2019
$
62,427
(55,190)
7,237
64,860
(6,689)
58,171
2020
$
2019
$
199,923
45,353
(18,191)
7,237
10,634
24,131
269,087
94,742
38,669
-
58,171
8,341
-
199,923
The weighted average duration of the defined benefits liability is 16.3 years and 15.4 years as at 30 June
2020 and 2019, respectively.
As at 30 June 2020, the undiscounted benefits payments within 10 years amounted to $178,732.
Shown below is the maturity analysis of the undiscounted benefit payments as at 30 June 2020:
Financial
Year
1
2
3
4
5
6 -10
Expected
benefits
payments
$
8,104
3,573
2,123
2,670
3,317
158,562
The principal actuarial assumptions used in determining the defined benefits liability for the retirement plan
are shown below:
Discount rate
Salary increase rate
2020
2019
3.57% 5.28%
5.00% 5.00%
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 79 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 16
Provisions continued
The sensitivity analysis below has been determined based on reasonably possible changes of each
significant actuarial assumption on the defined benefit liability as at the end of the reporting period,
assuming all other actuarial assumptions were held constant.
The sensitivity analysis may not be representative of the actual change in the defined benefit
obligation as it is unlikely that changes in assumptions would occur in isolation from one another:
Actuarial
assumption
Discount
Salary increase
rate
2020
2019
Increase/
decrease in
actuarial
Effect on
defined benefit
liability
Increase/
decrease in
actuarial
Effect on
defined benefit
liability
1%
-1%
1%
-1%
(39,153)
48,467
47,233
(39,008)
1%
-1%
1%
-1%
(27,755)
34,009
33,753
(28,063)
Note 17
Financial Liabilities at Fair Value Through Profit or Loss
The carrying values of all financial instruments approximate their fair values at end of reporting period.
Current
Derivative Liabiliity
Non-Current
Derivative Liabiliity
Consolidated Group
2020
2019
$
$
324,606
-
2020
$
2019
$
915,940
218,630
The current derivative liability represents the fair value of the 16,666,667 options issued as part of the
financing agreement with Lucerne Investment Partners (Lucerne). These options have an exercise
price of the lower of 12 cents per share or 20% discount of the price of any future equity raise and are
exercisable for up to 4 years from the initial drawdown.
The non-current derivative liability represents the fair value of the conversion feature of the loan with
Punta Properties Inc (see Note 21).
The above derivatives are valued using a black scholes model and are carried at fair value.
The following amounts were recognised in profit or loss in relation to derivatives:
Fair value gain / (loss) on options valued as part of the financing
agreement with Lucerne
Fair value gain / (loss) on conversion feature of the loan with Punta
Properties inc
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
2020
$
2019
$
(324,606)
-
(697,310)
(1,021,916)
116,498
116,498
Page 80 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 18
Issued Capital
830,581,138 fully paid ordinary shares; 1,116,000 partly paid ordinary shares
(2019: 691,457,154 fully paid ordinary shares; 1,116,000 partly paid ordinary
shares)
Cost of capital raising
a) Ordinary shares
30 June 2018 share capital
Share issue - 8 March 2019
Share buy back - 27 March 2019
30 June 2019 share capital
Share issue -12 August 2019
Share issue -19 August 2019
Share buy back - 4 December 2019
Share issue - advisory fee paid in equity - 14 April 2020
Share issue - 29 May 2020
Payments received under exercise of employee share plan
Transaction costs relating to capital raising
Consolidated Group
2020
$
2019
$
85,816,638
80,519,621
(2,450,498)
83,366,140
(2,434,337)
78,085,284
No. Shares
$
688,552,154
7,700,000
(4,795,000)
691,457,154
75,000,000
18,750,000
(5,000,000)
25,373,984
25,000,000
-
-
78,085,284
-
-
78,085,284
3,000,000
750,000
-
787,017
750,000
10,000
(16,161)
30 June 2020 share capital
830,581,138
83,366,140
• On 8 March 2019 – the Company issued 7,700,000 employee loan shares, pursuant to the
Company’s employee share plan. Refer note 16 for further details on this share-based payment
arrangement.
• On 27 March 2019 – the Company completed a buy-back of 4,795,000 shares under the Employee
Share Plan and sign on shares forfeited by employees when they resigned from the Group.
• On 12 August 2019 – the Company issued 75,000,000 shares under a share placement at the issue
price of $0.04 per share.
• On 19 August 2019 – the Company issued 18,750,000 shares under a share placement at the issue
price of $0.04 per share.
• On 4 December 2019 – the Company completed a buy-back of 5,000,000 shares from current and
former directors issued on terms consistent with the Employee Share Plan and expired as their
conditions were not met.
• On 14 April 2020 – the Company issued 25,373,984 shares to legal counsel who agreed to be
remunerated via equity. Shares were issued at the price of $0.031 per share.
• On 29 May 2020 – the Company issued 25,000,000 shares under a share placement at the issue
price of $0.03 per share.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 81 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 18
Issued Capital continued
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 16: 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 2020, the Group has not paid any dividends.
Note 19
Accumulated Losses and Reserves
(a) Movement in accumulated losses and reserves
Balance 1 July
Net (loss) / profit for the period
Other comprehensive income / (loss)
Balance 30 June
Consolidated Group
2020
2019
$
$
(83,513,722)
(10,264,692)
(7,237)
(93,785,651)
(78,712,583)
(4,742,968)
(58,171)
(83,513,722)
(b) Other reserves
Consolidated Group
At 30 June 2018
Foreign currency translation
Share based payment
At 30 June 2019
Foreign currency translation
Share based payment
At 30 June 2020
Share
based
payments
$
1,511,675
-
9,228
1,520,903
-
13,959
1,534,862
Total
$
Foreign
currency
translation
$
570,383 2,082,058
563,905 563,905
9,228
2,655,191
296,867
13,959
2,966,017
1,431,155
1,134,288
296,867
-
-
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 82 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 19
Accumulated Losses and Reserves continued
(c) Nature and purpose of reserves
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 16 for further details.
Note 20
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
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
Consolidated Group
2020
2019
$
$
-
-
-
13,959
13,959
-
9,228
9,228
(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 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. 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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 83 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 20
Share Based Payments continued
A summary of shares issued under the plan are below:
2020
No. of shares
2020 Weighted
average exercise
price
2019
No. of shares
2019 Weighted
average exercise
price
Outstanding at the beginning of the period
Granted during the period
Exercised during the period
Expired during the period
Outstanding at the end of the period
Exercisable (vested) at the end of the period
12,700,000
$0.10
-
250,000
5,000,000
7,450,000
7,450,000
-
$0.04
$0.20
$0.04
$0.04
9,795,000
7,700,000
-
4,795,000
12,700,000
8,850,000
-
$0.20
$0.04
$0.20
$0.10
$0.13
The 5,000,000 shares that expired were exercisable at 20 cents per share. As these shares are to
former and current directors, the board cancelled and bought back these shares following approval of
shareholder at the 28 November 2019 general meeting.
The outstanding shares noted above were issued under the plan on 8 March 2019 had the following
terms:
Agreement date 29 March 2018
Issued 8 March 2019
Tranche 1
escrowed for
12 months to
29 March 2019
Tranche 2
escrowed for
24 months to
29 March 2020
3,850,000
3,850,000
$24,357
$0.040
$0.036
52.25%
2.60%
0%
$37,378
$0.040
$0.036
52.25%
2.60%
0%
12 months
24 months
Employee Share Plan
Number of shares issued
Fair value
Price paid per share
Market price of shares at grant date
Expected volatility
Risk free interest rate
Dividend yield
Escrow period of shares
250,000 shares issued on 8 March 2019 (125,000 from each tranche) were exercised during the year.
The 7,450,000 remaining shares issued have a remaining contractual life of 1.75 years (expiry date of
29 March 2022).
(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.
(c) Share-based payments to service providers
No share-based payment arrangements were entered into with service providers in the current or
prior period.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 84 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 21
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
Limited 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 19.
(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 key management personnel participation:
Name
Shares
Issued
Share Issue
Price
Total Value
Loan from
Company
Craig Dawson
1,000,000
$0.04
40,000
40,000
(d) Other transactions with related parties
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
(refer note 7) or February 2018.
During the current period the facility interest rate was reviewed and updated from a fixed rate of 7%
per annum to 10% per annum. The rate change brings the loan facility interest rate in line with the
interest rate applied to other related party loans. The rate change was applied to the lifetime of the
loan resulting in an interest accrual totalling $241,763.
The remaining loan balance was paid in full resulting in $nil owing at period end.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 85 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 21
Related Party Transactions continued
Movements in the loan balance during the year are as follows:
Opening Balance
Interest accrued during the year
Principal repayments (cash)
Interest repayments (cash)
Closing Balance
Punta Properties Inc.
2020
$
38,907
243,067
-
(281,974)
-
2019
$
266,922
14,102
(233,189)
(8,928)
38,907
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. The potential settlement of the loan balance (which is variable,
based on the loan being denominated in a currency other than the group’s functional currency of
Australian dollars) through issuance of shares represents an embedded derivative liability. Interest
charged on the loan will be at a fixed rate of 10% per annum.
On initial drawdown of the loan during the period, the group recognised the following derivative
financial liabilities:
Date of
drawdown
Drawdown
amount
(USD)
Drawdown
amount
(AUD)
Value of
conversion
option
No of
securities
Exercise
Price
Share price
@
drawdown
Risk
Free
rate
Total Value
Stock
volatility
Expected
maturity
$
$
9/07/2018
1,000,000
1,346,149
30/09/2018
31/10/2018
23/11/2018
28/03/2019
11/04/2019
22/05/2019
24/06/2019
500,000
200,000
200,000
200,000
200,000
400,000
200,000
692,770
275,562
274,010
279,003
276,855
577,284
285,347
$
0.0020
0.0037
0.0069
0.0067
0.0034
0.0045
0.0026
0.0024
33,653,725
17,319,250
6,889,045
6,850,254
6,975,072
6,921,373
14,432,097
7,133,685
$
$
$
67,397
64,832
47,332
45,814
23,587
31,460
37,745
16,961
335,128
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.04
0.020
0.026
0.028
0.033
0.028
0.031
0.027
0.027
2%
2%
2%
2%
2%
2%
2%
2%
52.25%
1/07/2020
52.25%
1/07/2020
52.25%
1/07/2020
52.25%
1/07/2020
52.25%
1/07/2020
52.25%
1/07/2020
52.25%
1/07/2020
52.25%
1/07/2020
The conversion options were valued at inception using a Black Scholes model, with inputs as
documented in the table above. Derivatives are carried at fair value through profit or loss and fall
within level 2 of the fair value hierarchy. The fair value of the above options at 30 June 2020 was
$915,940 (30 June 2019: $218,630). The following inputs were applied in deriving the fair value of
these options:
A fair value loss of $697,310 (2019: gain of $116,498) has been recognised on revaluation of the
embedded derivative at 30 June 2020 (see Note 17).
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 86 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 21
Related Party Transactions continued
Movements in the financing facility during the period were as follows:
Opening Balance
Drawdowns
Interest accrued during the year
Recognition of embedded derivative
Foreign Currency movement
Closing Balance
2020
$
4,167,276
-
708,976
-
94,720
4,970,972
2019
$
-
4,006,980
368,090
(335,128)
127,332
4,167,276
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.
The incentive represents a contingent liability to the group, and the group’s obligation in respect of the
incentive will only be confirmed by the occurrence or non-occurrence of a future obligating event,
being the execution of an optimisation plan. It is not considered possible to reliably estimate the
amount of the possible obligation at this point in time, having regard to the degree of uncertainty in
such estimation. Uncertainties relate to the amount of timing of any outflow include the type of
optimisation transaction, time for such transaction occurring, and estimated total project value.
Note 22
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 (%)*
2020
2019
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%
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 87 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 23
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 2020.
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
Share-based payments
Termination benefits
Consolidated Group
2020
2019
$
$
892,930
901,537
26,027
26,027
5,247
5,250
1,812
4,781
- -
928,985
934,626
Note 24
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. Expenses for the discontinued
operation for the year are presented below.
Expenses
Contractor and other service providers
Employee benefits expense
Legal, accounting and other professional fees
2020
$
2019
$
(69,000)
(19,159)
(1,030,734)
(1,118,893)
(151,150)
(5,897)
(1,037,102)
(1,194,149)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 88 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 25
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
Impairment loss
Foreign exchange loss
Bad debts
Share based payments expense
Fair value loss (gain) on derivatives
Interest accrued
Net (profit) / loss on sale of plant & equipment
Change in assets and liabilities
Decrease / (Increase) in receivables
Increase / (Decrease) in contract assets
Decrease / (Increase) in inventory
Decrease / (Increase) in prepayments
Decrease / (Increase) in deferred tax assets
(Decrease) / Increase in payables and accruals
Increase / (Decrease) in contract liabilities
Increase / (Decrease) in provisions current
Increase / (Decrease) in current tax liabilities
Net cash used in operating activities
Consolidated Group
2020
2019
$
$
(10,264,692)
(4,742,968)
2,580,836
1,096,000
(109,998)
60,550
13,959
1,413,716
-
114,432
83,436
9,228
1,021,916
(116,498)
967,723
325,324
(38,471)
(4,672,177)
4,890
(2,908,440)
1,164,342
179,655
16,485
49,573
(45,663)
(895,628)
(34,468)
4,370
113,732
83,322
(879,699)
1,164,188
398,766
33,869
(16,795)
(233,366)
4,061
5,999
(3,771,644)
(2,696,230)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 89 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 26
Financial Risk Management
The totals for each category of financial instruments 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
Current
— Trade and other payables
— Interest bearing debt
— Lease liabilities
— Financial liabilities at fair value through profit or loss
Non-current
— Trade and other payables
— Interest bearing debt
— Lease liabilities
— Financial liabilities at fair value through profit or loss
Total financial liabilities
(a) Liquidity Risk
Note
Consolidated Group
2020
2019
$
$
7
13
15
12
17
13
15
12
17
1,246,819
2,656,525
226,233
606,148
4,378,367
105,748
4,129,577
5,090,263
4,420,245
2,015,680
1,461,187
324,606
5,595,083
4,970,972
8,373,206
915,940
28,076,919
6,080,122
142,519
-
-
5,595,083
4,238,419
-
218,630
16,274,773
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.
Within 1 Year
1 to 5 Years
Over 5 Years
Total
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
2020
$
2019
$
Financial liabilities due for payment
Trade and other payables
4,420,245
6,080,122
5,595,083
5,595,083
Interest bearing debt
- Principal
- Interest
- Principal
- Interest
Lease liabilities
Other financial liabilities
Total expected outflows
2,000,000
15,680
1,461,187
236,390
324,606
92,922
47,583
-
-
-
4,231,106
4,212,082
372,945
1,074,994
3,066,996
3,125,749
-
-
5,306,210
2,635,263
915,940
218,630
-
8,458,108
6,220,627
18,009,867
10,398,740
7,941,473
-
-
-
Financial assets - cash flows realisable
Cash and cash equivalents
Loans and receivables
Other non-current financial assets
Net (outflow) / inflow
1,246,819
2,656,525
-
606,148
4,378,367
-
3,903,344
(4,554,764)
4,984,515
(1,236,112)
-
-
-
-
226,233
226,233
(17,783,634)
105,748
105,748
(10,292,992)
-
-
-
-
(7,941,473)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
-
-
-
-
-
-
-
-
-
-
-
-
10,015,328
11,675,205
6,231,106
4,305,004
1,090,674
9,834,393
5,997,402
1,240,546
420,528
-
-
218,630
34,409,448
16,619,367
1,246,819
2,656,525
226,233
4,129,577
(30,279,871)
606,148
4,378,367
105,748
5,090,263
(11,529,104)
Page 90 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 26
Financial Risk Management continued
The outflow indicated above within 1 year will be funded via drawdowns on the unused loan facility
available at 30 June 2020 (refer financing arrangements below), The outflow in subsequent years is
attributable to lease liabilities and 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 7.
(i) Financing arrangements
The group had access to the following undrawn loan facility at the end of the reporting period:
Expiring beyond one year (unsecured reated party loans)
1,604,902
1,658,000
Consolidated Group
2020
2019
$
$
The loan facility with Punta Properties may be drawn on at any time. Further terms are disclosed in
note 21.
(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 Group
2020
2019
$
$
606,148
1,246,819
Post Tax Profit
higher / (lower)
2020
$
2019
$
8,728
(4,364)
4,243
(2,122)
Other Comprehensive
Income
higher / (lower)
2020
$
-
-
2019
$
-
-
Consolidated
+ 1% (100 basis points)
- .5% (50 basis points)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 91 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 26
Financial Risk Management continued
(c) Foreign currency risk
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 2020 the Group had total cash and cash
equivalents denominated in USD of $198,140 (2019: USD $117,693).
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.
Post Tax Profit
higher / (lower)
2020
$
2019
$
Other Comprehensive
Income
higher / (lower)
2020
$
2019
$
35,705
(26,391)
20,715
(15,311)
-
-
-
-
Consolidated
USD Rate+15%
USD Rate-15%
(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 short-term
deposits, receivables from contracts with customers, other receivables, and quoted and unquoted
financial instruments. 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).
Credit risk is managed on a group basis. For banks and financial institutions, only those with a long
operating history and with a minimum rating of ‘A’ are accepted.
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 receivables from contracts with customers 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. The group determines an
allowance for expected credit losses at each reporting date. Details of this allowance and the basis on
which it has been determined are outlined in note 7.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 92 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 27
Auditors Remuneration
Remuneration of Pitcher Partners as current auditor of the parent entity for:
— auditing or reviewing the financial report
— taxation services
Consolidated Group
2020
2019
$
$
104,500
17,180
100,000
32,450
Remuneration of entities affiliated with Pitcher Partners for:
— auditing or reviewing the financial statements of subsidiaries
17,580
16,681
Remuneration of other auditors of subsidiaries for:
— auditing or reviewing the financial statements of subsidiaries
— taxation services
Note 28
Events after the Reporting Period
11,166
11,435
22,601
10,382
11,975
22,357
In July 2020 the company successfully completed a share purchase plan raising $353,400 via the issue
of 11,780,000 shares at 3 cents per share.
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 2020
Page 93 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 29
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
2020
$
2019
$
21,600,698
13,405,389
35,006,087
20,307,215
11,172,699
31,479,914.0
4,649,945
7,151,216
11,801,161
1,689,605
4,525,900
6,215,505
23,204,926
25,264,409
72,893,418
(51,909,005)
1,403,831
22,388,244
67,612,562
(43,729,621)
1,381,468
25,264,409
(31,796,988)
(31,796,988)
(26,398,041)
(26,398,041)
The Parent entity has no commitments to purchase property, plant and equipment and has no
contingent liabilities.
Note 30
Contingencies
Legal claim contingency
As noted in the Directors report, the ACCC has commenced civil proceedings against Site,
Productivity Partners and two former executives in relation to enrolment practices of Productivity
Partners. An estimate of the financial effect of the matter has not been disclosed as it is not yet
practicable to determine such an estimate, having regard to the timing of proceedings (the case was
heard in June 2020), and the prevailing uncertainty surrounding the outcome of these proceedings.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 94 of 103
Notes to the Financial Statements for the Year Ended 30 June 2020 continued
Note 31
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:
• 97 Flinders Parade, North Lakes Qld 4509
• 17-19 South Tree Drive, Gladstone Qld 4680
• 72-80 Belgravia Street, Belmont WA 6104
• 1 Campion Road, East Arm NT 0822
• 55 Mica Street, Carole Park QLD 4300
• 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 2020
Page 95 of 103
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 2020 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 2020 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 2020.
On behalf of the Board
Vernon Wills
Director
Brisbane, 29 September 2020
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2020
Page 96 of 103
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 2020, the consolidated statement of profit or loss and other comprehensive income, the
consolidated statement of changes in equity and the consolidated statement of cash flows for the year
then ended, notes 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 2020 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 (including Independence Standards) (“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 Group, 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.
Material Uncertainty Related to Going Concern
We draw attention to Note 1a(b) “Going Concern” in the Financial Report. The conditions disclosed in
Note 1a(b) indicate a material uncertainty exists that may cast significant doubt on the Group’s ability
to continue as a going concern and, therefore, whether it will realise its assets and discharge its
liabilities in the normal course of business, and at the amount stated in the Financial Report. Our
opinion is not modified in respect of this matter.
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.
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).
The going concern assumption 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.
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 the Directors’ conclusions regarding
the going concern assumption were supported by
management’s going concern assessment, including cash
flow forecasts;
Agreeing the cash flow forecast used in the going concern
assessment to the FY21 budget;
Assessing key inputs into the cash flow forecast by
comparing them to historical actual results, assumptions
and estimates used elsewhere in the preparation of the
financial statements, and customer commitments,
contracts, or other available information supporting
forecast cash flows;
Confirming the amount of commitments for subscription of
capital received by the group subsequent to balance date;
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;
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.
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Key Audit Matters
How our audit addressed the key audit matter
Key Audit Matter
Impairment testing of Cash-Generating Units (“CGUs”)
Refer to note 1b and note 11
AASB 136 Impairment of Assets
requires the Group to undertake an
annual impairment assessment for
all cash-generating units (“CGUs”) to
which goodwill or intangible assets
with an indefinite useful life are
allocated. Further, an impairment
assessment is required to be
completed for all other assets where
indicators of impairment are present.
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 FY21 cash flow forecasts and methodology of
the impairment model;
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
testing calculations including forecast cash flows, growth
rates, discount rates and terminal values;
Applying our knowledge of the business and corroborated
our work with external information 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.
Impairment testing of the Group’s
CGUs is a key audit matter due to
the continued decline in the Group’s
operating results and the significant
uncertainty that COVID-19 brings to
the Group’s ability to generate
required revenue growth and
produce sustainable operating
cashflows.
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 2020, 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.
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
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.
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
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 2020. In our opinion, the Remuneration Report of Site Group International
Limited for the year ended 30 June 2020 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Group 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
JASON EVANS
Partner
Brisbane, Queensland
29 September 2020
Pitcher Partners is an association of independent firms.
An Independent Queensland Partnership ABN 84 797 724 539. Liability limited by a scheme approved under Professional Standards Legislation.
Pitcher Partners is a member of the global network of Baker Tilly International Limited, the members of which are separate and independent legal entities.
Shareholder Information
1
Twenty Largest Shareholders
(i) Ordinary Shares Inclusive of Escrowed Ordinary Shares
As at 3 September 2020, there are 833,795,127 ordinary shares and an additional 7,450,000 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
ARMADA TRADING PTY LIMITED
MR VERNON ALAN WILLS + MS JILLAINE PATRICE WILLS
WAYBURN HOLDINGS PTY LTD
CAMERON RICHARD PTY LTD
MR VERNON ALAN WILLS + MS JILLAINE PATRICE WILLS
MR NEVILLE WAYNE MORCOMBE + MR DANIEL ROBERT ANDREW
MORCOMBE
LINWIERIK SUPER PTY LTD
SMITHLEY SUPER PTY LTD
CITICORP NOMINEES PTY LIMITED
JGC ASSETS PTY LTD
STUART ANDREW PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
JGC ASSETS PTY LTD
MYALL RESOURCES PTY LTD
MR GARY LINTON + MRS CHERYL LINTON
MR GRANT HARRY O'KEEFE + MRS CATHERINE MARIA O'KEEFE
NICASIO ALCANTARA
PATRICIA HAWKEY PTY LTD
THE SUMMIT HOTEL BONDI BEACH PTY LTD
No. of
Ordinary
Shares Held
% of Issued
Capital
165,100,227
19.63%
62,500,000
44,140,703
41,108,142
37,797,730
29,414,188
7.43%
5.25%
4.89%
4.49%
3.50%
28,478,484
3.39%
21,000,000
20,100,000
19,166,624
16,746,700
14,682,068
13,889,113
12,581,201
11,449,056
10,200,000
8,885,419
8,371,325
7,717,294
7,637,368
2.50%
2.39%
2.28%
1.99%
1.75%
1.65%
1.50%
1.36%
1.21%
1.06%
1.00%
0.92%
0.91%
(ii) Ordinary Shares
The names of the twenty largest holders of fully paid ordinary shares are listed below:
Name
NATIONAL NOMINEES LIMITED
ARMADA TRADING PTY LIMITED
MR VERNON ALAN WILLS + MS JILLAINE PATRICE WILLS
WAYBURN HOLDINGS PTY LTD
CAMERON RICHARD PTY LTD
MR VERNON ALAN WILLS + MS JILLAINE PATRICE WILLS
No. of
Ordinary
Shares Held
% of fully
paid
shares
165,100,227
19.80%
62,500,000
44,140,703
41,108,142
37,797,730
29,414,188
7.50%
5.29%
4.93%
4.53%
3.53%
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2019
Page 100 of 103
Shareholder Information continued
Name
MR NEVILLE WAYNE MORCOMBE + MR DANIEL ROBERT ANDREW
MORCOMBE
LINWIERIK SUPER PTY LTD
SMITHLEY SUPER PTY LTD
CITICORP NOMINEES PTY LIMITED
JGC ASSETS PTY LTD
STUART ANDREW PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
JGC ASSETS PTY LTD
MYALL RESOURCES PTY LTD
MR GARY LINTON + MRS CHERYL LINTON
MR GRANT HARRY O'KEEFE + MRS CATHERINE MARIA O'KEEFE
NICASIO ALCANTARA
PATRICIA HAWKEY PTY LTD
THE SUMMIT HOTEL BONDI BEACH PTY LTD
No. of
Ordinary
Shares Held
% of fully
paid shares
28,478,484
3.42%
21,000,000
20,100,000
19,166,624
16,746,700
14,682,068
13,889,113
12,581,201
11,449,056
10,200,000
8,885,419
8,371,325
7,717,294
7,637,368
2.52%
2.41%
2.30%
2.01%
1.76%
1.67%
1.51%
1.37%
1.22%
1.07%
1.00%
0.93%
0.92%
(iii) Escrowed Shares
The names of the top twenty holders of the escrowed shares are listed below:
Name
No. of
Escrowed
Shares Held
% of
escrowed
shares
CRAIG ANTHONY DAWSON
1,000,000
BRETT MCPHEE
ISMAIL TAHIR
JASON ANFIELD
NOEL CHENEY
MICHAEL WALLACE
MIKE COSTELLOE
NEIL COSTELLOE
SUDHHER GOVINDPILLAI
SHAAGUL HAMEETH
MR JARROD PETER BELCHER
MS KATIE HURSE
MR JAMIE VERNON WILLS
SITI SUZANA BT BASRI
JAYSHEN RAMANAH
MR BERESFORD PAUL ROBERTSON
CHRISTOPHER LAMBERT
MOHAMMED AKBERY
RODNEY ANDERSON
AARON BANDHOLZ
750,000
600,000
500,000
500,000
500,000
400,000
400,000
400,000
400,000
300,000
300,000
300,000
250,000
250,000
250,000
100,000
50,000
50,000
50,000
13.42%
10.07%
8.05%
6.71%
6.71%
6.71%
5.37%
5.37%
5.37%
5.37%
4.03%
4.03%
4.03%
3.36%
3.36%
3.36%
1.34%
0.67%
0.67%
0.67%
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2019
Page 101 of 103
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
87
53
70
196
44,308
152,859
623,909
9,823,095
266
830,600,956
672
841,245,127
(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 2019
Page 102 of 103
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
-
-
-
-
-
-
15
600,000
16
31
6,850,000
7,450,000
Minimum
parcel size
Holders
Shares
Minimum $500 parcel at $0.022 per
share
22,728
253
1,560,729
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 Shareholders
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
EGP Capital Pty Ltd
Peter Jones, Helen Jones, Cameron Richard Pty
Ltd and Stuart Andrew Pty Ltd
Armada Trading Pty Ltd
123,395,630
107,700,000
56,819,466
62,500,000
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2019
Page 103 of 103