More annual reports from Site Group International Limited:
2023 ReportSite Group International Limited
and Controlled Entities
ABN 73 003 201 910
Annual report – 30 June 2021
Table of Contents
Annual General Meeting ....................................................................................................................... 3
Director Letter ....................................................................................................................................... 3
Corporate Directory .............................................................................................................................. 5
Directors’ Report ................................................................................................................................... 8
Principal Activity ................................................................................................................................. 10
Operating and Financial Review ........................................................................................................ 10
Corporate Governance Statement ..................................................................................................... 26
Auditor’s Independence Declaration ................................................................................................ 33
Statement of Profit or Loss and Other Comprehensive Income .................................................... 34
Statement of Financial Position ........................................................................................................ 35
Statement of Changes in Equity ........................................................................................................ 36
Statement of Cash Flows ................................................................................................................... 37
Notes to the Financial Statements for the Year Ended 30 June 2020 ........................................... 38
Directors' Declaration ......................................................................................................................... 91
Independent Auditor’s Report ........................................................................................................... 92
Shareholder Information .................................................................................................................... 96
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 2 of 99
Annual General Meeting
The Annual General Meeting of the Company will be held at
Time:
11:00am
Date:
Tuesday, 31 November 2021
Location:
488 Queen Street,
Brisbane QLD 4000.
Director Letter
Results
$7,362,539 compared to $15,320,718 in the prior corresponding period.
International Limited show revenue
for Site Group
from continuing operations of
The earnings before interest, taxes, depreciation and amortisation (EBITDA) was a reduced loss of
$2,803,476 compared to a loss of $5,476,962 in the prior corresponding period.
Whilst Site has achieved significant outcomes for its customers mainly employers, employees, trades
people and industry workers including reaching the significant achievements of over 250,000
enrolments across the group globally, 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
ongoing impact of COVID-19 on industries around the world have substantially reduced revenues by
halting operations and delaying outcomes.
During the year, Site completed the sale of the Australian industrial and trades training facilities, assets
and training equipment of Site Skills Training – Domestic business to Competency Training Pty Ltd. It
is the intention of the Group to focus on its established international training business, including the Site
WorkReady brand and the Clark property redevelopment, in addition to the growth of the Site Institute
business in Australia.
As global vaccination gains traction, Site remains confident in its global training strategy and the focus
on growth within emerging economies as they strive for nationalization of workforces which can only be
achieved through dedicated workforce training.
In addition, the Site WorkReady business has experienced a growing increase in demand as industries
in Australia and across the world experience shortages in skilled workers across most sectors. It is
expected that we should expect to get an indication of the scale and impact of this increase over the
next quarter.
Regulatory Actions
Litigation with the ACCC in the Federal Court resulted in an adverse finding which Site has already
indicated to the courts it is challenging. More details of this action will be reported shortly.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 3 of 99
COVID-19
As previously stated, COVID-19 has had significant effects on economies around the world.
The extension of contracts in Kingdom of Saudi Arabia KSA at the existing NCTC for a further 3 years
will see the start of the recovery of training in KSA after the Centre was closed from September through
to March this year and there are reasonable expectations of further significant training contracts in
Kingdom of Saudi Arabia. Expectations remain high for future work in other Middle Eastern and North
Africa (MENA) regions.
Clark Property
Site recently announced a transaction for the part sale and potential development of its Clark leasehold
30-hectare property as part of it strategy to realise value from its international assets. The transaction
will allow Site to reduce debt whilst retaining an equity stake in the land project. Further details of this
transaction should be released in coming weeks.
I would like to thank our Chairman, Nicasio Alcantara, all management and staff and equally all
shareholders for their ongoing support.
Craig Dawson
Director
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 4 of 99
Corporate Directory
Directors
Nicasio Alcantara
Craig Dawson
Brett McPhee
Company Secretary
Craig Dawson
Principal registered office in Australia
Principal place of business
Site Group International Limited
Level 2, 488 Queen Street
Brisbane Qld 4000
Telephone: +61 7 3114 5188
Site Group International Limited
Level 2, 488 Queen Street
Brisbane Qld 4000
Telephone: +61 7 3114 5188
Share registry
Auditor
Solicitors
Bankers
Computershare Investor Services Pty Limited
Level 1, 200 Mary Street
Brisbane QLD 4000, Australia
Telephone: +61 7 3237 2100
Pitcher Partners
Level 38, 345 Queen Street
Brisbane QLD 4000, Australia
Telephone: +61 7 3222 8444
Hopgood Ganim
Level 8, 1 Eagle Street
Brisbane Qld 4000
Telephone: +61 7 3024 0000
National Australia Bank
Level 17, 259 Queen Street
Brisbane QLD 4000
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 2021
Page 5 of 99
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Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 6 of 99
SITE GROUP INTERNATIONAL LIMITED
AND CONTROLLED ENTITIES
ABN: 73 003 201 910
Financial Report for the Year Ended
30 June 2021
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 7 of 99
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 2021.
Directors
The directors in office at any time during or since the end of the financial year, together with their
qualifications and experience are:
Nicasio Alcantara BA, MBA – Chairman and 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.
Craig Dawson BCom, ACA – Appointed 30 November 2020
Mr Dawson is the Chief Financial Officer and Company Secretary 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.
Brett McPhee ACA – Appointed 19 May 2021
Mr McPhee is the General Manager, Philippines of the Group. Mr McPhee was employed by Western
Mining Corporation for 10 years in accounting and commercial roles. His last role was as Chief
Accountant at St Ives Gold in Kambalda.
After leaving WMC in 1997, Mr McPhee worked for Tyco International Limited (US stock exchange
listed) in Singapore as Finance Manager. In 2000, Mr McPhee established a consulting services
business providing commercial services to the mining, engineering and construction industries. Clients
included WMC Nicjel Operations, Gold Fields, Sons of Gwalia Limited, Lafayette Mining Limited
(Philippines) and Siemens.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 8 of 99
Directors’ Report continued
Vernon Wills – Managing Director and CEO - Resigned 30 November 2020
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 served as a
Director of Eumundi Group Ltd (from September 2004 to March 2021) and was previously a director of
the Greg Norman Golf Foundation, CITEC, and Deputy Chair of the Queensland Government’s Major
Sports Facilities.
Peter Jones ACA – Chairman and Non-Executive Director – Resigned 19 May 2021
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).
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)
• Nicasio Alcantara (c)
• Brett McPhee – appointed 19 May 2021
• Peter Jones – resigned 19 May 2021
Mr McPhee and Mr Jones are Chartered Accountants and Mr Alcantara has extensive corporate
experience and is qualified to serve on this Committee.
Nomination and Remuneration Committee (NRC)
• Nicasio Alcantara (c)
• Brett McPhee - appointed 19 May 2021
• Peter Jones – resigned 19 May 2021
(c) Designates the chairman of the committee.
Meetings of Committees
Nicasio Alcantara
Vernon Wills
Peter Jones
Craig Dawson
Brett McPhee
Board
No.
5
Attended
No.
5
3
4
2
1
3
4
2
1
AC
No.
2
1
2
1
-
Attended
No.
2
NRC
No.
1
Attended
No.
1
1
2
1
-
-
-
1
1
-
-
1
1
All directors were eligible to attend all meetings held.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 9 of 99
Directors’ Report continued
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.
Operating and financial review
Group
Site historical revenue is demonstrated in the below graph including the discontinued operations in FY21
and FY20. Total revenue from operations including the discontinued operation for the year ended 30
June 2021 was down 38% to $16,939,116 (2020: $27,259,059).
Yearly Revenue
s
n
o
i
l
l
i
M
35
30
25
20
15
10
5
-
Jun 11 Jun 12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21
Revenue contribution and activity by each segment is illustrated in the two charts below. This highlights
the decline in revenue in the Site Skills Training – International segment with full year impacts of COVID
shutdowns across the international regions.
Gross Revenue by Segment 30 June 2021 versus 30 June 2020 (excludes eliminations)
The revenue from the tertiary education business continued to grow at 6% but at a reduced rate from
previous years.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 10 of 99
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 expense
deduct
Interest income
EBITDA*
Non recurring items
2020
$
Change 21-20
%
30-Jun
2021
$
16,939,116
27,259,059
( 7,276,206)
( 10,264,692)
2,454,742
1,909,423
123,470
2,580,836
2,182,472
48,713
14,905
24,291
( 2,803,476)
( 5,476,962)
( 38%)
( 29%)
( 5%)
( 13%)
-
( 39%)
( 49%)
Impairment of PP&E, intangibles and right of use assets
Gain on sale of SST Domestic business
Write down / (reversal of write down) of DET debtor
3,961,403
( 3,569,996)
-
1,096,000
-
-
30-Jun
2019
$
Change 20-19
%
30,913,290
( 12%)
30-Jun
2018
$
30,306,134
( 4,742,968)
116%
( 6,042,212)
1,413,716
415,197
( 1,514,919)
83%
426%
-
2,033,252
55,744
247,641
66,183
( 63%)
16,197
( 4,495,157)
22%
( 3,721,772)
-
-
-
3,797,413
-
( 4,990,113)
EBITDA before non recurring items
Operating cash inflow /(outflow)
( 2,412,069)
( 4,380,962)
( 45%)
( 4,495,157)
( 3%)
( 4,914,472)
( 1,791,755)
( 3,771,644)
-
( 2,696,230)
-
( 727,824)
Change 19-18
%
2%
( 22%)
( 30%)
645%
-
309%
21%
-
-
* 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 2021, Site Group International Limited reported a loss after tax of
$7,276,206 compared to an after-tax loss of $10,264,692 in the previous corresponding period. The
earnings before interest, taxes, depreciation and amortisation (EBITDA) was a loss of $2,803,476
compared to a loss of $5,476,962 in the previous period.
On 26 February 2021, the Group entered into an asset sale agreement for the sale of its Australian
trades training facilities assets and training equipment.
During the past 10 years Site Skills Training has provided skills training through approximately 200,000
courses to over 150,000 Australians in Industry.
However as announced on 21 June 2018, as well as several subsequent announcements through late
2019 and early 2020, Site has been working on an optimisation and rationalisation plan for its Australian
businesses with a stated intent to focus on its 300,000 sqm Clark, Philippine’s land assets and a plan
to drive the growth of its international operations.
As the first stage Site agreed with Competency Training Pty Ltd, a subsidiary of Verbrec Limited
(ASX:VBC), to sell its Australian Site Skills Training assets as it focusses on the next stages being the
development of its Clark property and major growth initiatives in the Middle East and North Africa
(MENA) regions.
The focus on MENA should result in significant growth for the international business and enable the
company to strategically build on substantial new projects in addition to the growth of the existing Site
Institute business in Australia.
Whilst the world continues to struggle with COVID-19 there are clear expectations that major new
projects will be undertaken in the MENA region.
The asset sale was completed on 12 April 2021, and as a result Site has a significantly reduced
Australian management team and overhead with an increased focus on the international business.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 11 of 99
Directors’ Report continued
Operating and financial review continued
Site Skills Training - Domestic
Following completion of the asset sale to Competency training of the Group Site Skills Training Assets
in Australia for up to circa $4.5m, the results of the segment up until the sale and for the previous year
are disclosed as a discontinued operation.
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, suffered a 72% reduction in revenue to $2,654,168 in the 12 months to June 2021,
pared with $9,584,526 in the prior year. EBITDA was a loss of $4,417,978 due to an impairment of
$3,413,164 taken against leasehold improvements and the right of use asset. The previous result for
this segment was an EBITDA of $847,388 in the prior year. The reduction in revenues are 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.
Additionally the company continues to expand its operations and colleges with Abdulali Al-Ajmi
Company for crane and heavy equipment training colleges in Saudi Arabia. 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. Unfortunately the border
closures and the closure of the college due to COVID-19 significantly impacted the results for the year.
A 3.5 year extension on the NCTC contract was announced on the 4 March 2021 and will allow for the
continued delivery and output aligns well with the Kingdom’s Vision 2030. So far well over 2,000
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 $567,301 (2020: $1,973,419) with an EBITDA loss
of $925,836 (2020: EBITDA loss of $292,210). 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 Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 12 of 99
Directors’ Report continued
Operating and financial review continued
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 6% to $3,820,368 in 2021, up from $3,591,170 in 2020.
EBITDA was $372,224 compared to an EBITDA of $625,283 in 2020, as the scale of the business
improves on the back of increased student number and additional courses being offered.
Student numbers studying in Australia remained steady despite the closure of international borders with
over 300 current enrolments in CRICOS registered courses. Future revenues are expected to continue
to grow during the 2021 financial year as international students take the opportunity to study engineering
and manufacturing technology courses with Site Institute.
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.
Cash position
At 30 June 2021, the Company had cash reserves of $166,053 and a net current asset deficiency of
$8,360,100. 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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 13 of 99
Risk
Details
Cultural unrest
Any cultural unrest or perceived cultural unrest in the location of the campuses
may result in decreased client interest.
Competition
The market for education services in Australia and worldwide is highly
competitive and the Group is likely to encounter strong competition from other
entities as well as other countries for training and education.
Industry downturn The industries to which the Group provides services may be affected by factors
outside the Group’s control.
Limited operating
history
Site’s business model is relatively new, and Site is yet to generate recurring
profits from its group activities. The Group will be subject to all of the business
risks and uncertainties associated with any developing business enterprise.
Material contracts The Group has entered into various contracts which are important to the future
of the Group. Any failure by counterparties to perform their job, or obligations
could have an adverse effect on the Group.
CDC lease
The Group has entered a long term lease with Clark Development Corporation
(CDC). There are a number of circumstances in which the CDC lease may be
terminated (subject to compliance with provisions enabling certain breaches to
be remedied) by CDC in which case Site does not have any rights to
compensation or reimbursement for funds expended on the leased land,
improvements and moveables on the leased property pass to CDC on
termination. Such termination may occur where Site has breached a provision
of the CDC lease or where there is an insolvency event. The CDC lease may
also be terminated in the event of any governmental expropriation of the
leased property. In the event that the CDC lease was terminated, Site would no
longer be in a position to operate its Philippines facility which would have
significant impact on the Group and the Group’s ongoing operations.
Currency
Some of Site’s revenue streams and expenses are denominated in currencies
other than the Australian Dollar. It is possible that foreign exchange rates
could move in a manner which would be unfavourable to the Company.
Large holdings by
some
shareholders
Two existing shareholders (and their associates) have combined holdings of
approximately 30% of the shares which may impact on liquidity in the public
market for share trading which may 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
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 judgements promulgated, or by determinations or
conventions agreed upon in a foreign country. Accordingly, the enforcement of
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 14 of 99
Risk
Details
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.
Material
arrangements
Geographic
concentration
2021 Outlook
After the settlement of the Site Skills Australia training business sale to Verbrec, and a significantly
reduced corporate overhead as a result, management has had time to focus on the previously stated
objectives of the build of the international business and a potential development pathway for the Clark
leasehold land. Both have been impacted by COVID-19 however there is mounting evidence of a strong
return to activity in the international training and manpower segments as a global skills shortage loom
substantially driven by the recommencing of stalled projects and the substantial amount of government
funded infrastructure initiatives around the world designed to stimulate recovery.
The focus on the development pathway for Clark has led to the Company signing a non-binding term
sheet on 23 August 2021 for the sale of up to 51% of the shares in Site Group Holdings Pty Limited. To
a related party investor, an entity associated with Site’s Chairman Mr Alcantara. The sale which is
subject to shareholder approval, provides Site with a local partner in country with the property
development experience and the capability to access funding to allow the development to achieve
maximum potential.
Directors’ shareholdings as of the date of this report
Director
Nicasio Alcantara
Brett McPhee
Craig Dawson
Shares
8,371,325
3,943,613
2,000,000
Significant changes in state of affairs
During the year the Group was involved in the following significant transactions:
Capital Management
•
In July 2020 the company successfully completed a share purchase plan raising $353,400 via
the issue of 11,779,989 shares at 3 cents per share.
New Loan facility
•
In February 2021, the Group entered into a short term loan facility of $1,000,000 provided jointly
by existing shareholders Aligned Capital Partnership and its associates and Armada Trading
Pty Limited. In addition the loan incorporated the issue of 12,500,000 detachable options each
to Aligned Capital Partnership and Armada Trading Pty Ltd with an exercise price of 3 cents
per share and an expiry date of 5 years. The loan funds were drawn in February and repaid on
29 May 2021.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 15 of 99
Directors’ Report continued
Significant changes in state of affairs continued
Asset Sale of Site Skills Training Domestic business
•
In February 2021, the Group entered into an asset sale agreement for the sale of its trades
training facilities assets and training equipment to Competency Training Pty Ltd. The sale was
completed on 12 April 2021.
After balance date events
On 23 August 2021 the Group signed a non-binding term sheet with a related party investor, an entity
associated with Site’s Chairman Mr Alcantara, to partner with the companies subsidiary Site Group
Holdings Pty Ltd (SGH) the holder of the Clark lease. The term sheet provides that subject to due
diligence and formal documentation and Site obtaining shareholder approval, the investor will pay
$US7.5m to subscribe for 33.33% interest in SGH and Site will grant a 5 year call option for a further
17.67% for US$ 3.975m. If the transaction proceeds and the call option is exercised the investor would
acquire a total of 51% of the issued equity of SGH.
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 41,666,667 unissued shares under options provided to financiers
of the company.
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 a previous 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 24 August 2021, there are 7,450,000 ordinary shares subject to escrow restrictions.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 16 of 99
Directors’ Report continued
Indemnification and insurance of directors and officers
During the financial year, the Company paid premiums for directors’ and officers’ liability insurance in
respect of Directors and officers, including executive officers of the Company and Directors, executive
officers and secretaries of its controlled entities as permitted by the Corporations Act 2001. The terms
of the policy prohibit disclosure of details of the insurance cover and premiums.
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Pitcher Partners, as
part of the terms of its audit engagement agreement against claims by third parties arising from the
audit (for an unspecified amount). No payment has been made to indemnify Pitcher Partners during or
since the financial year.
Non-audit services
Non-audit services were provided by the 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 27 Auditor’s Remuneration in the financial report for details and
amounts for the provision of non-audit services.
Rounding of amounts
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding
off’ of amounts in the directors’ report. Amounts in the directors’ report have been rounded off in
accordance with the instrument to the nearest thousand dollars, or in certain cases, to the nearest
dollar.
This report is made in accordance with a resolution of directors.
Craig Dawson
Director
30 September 2021
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 17 of 99
Directors’ Report continued
Remuneration Report (audited)
This remuneration report for the year ended 30 June 2021 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 2021 financial year with final discussions
about remuneration or appointments being approved by the full board. The Nomination and
Remuneration committee comprises one 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
• Craig Dawson – Chief Financial Officer
• Brett McPhee – General Manager, Philippines
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 2021
Page 18 of 99
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 has been impacted by a number of factors and has led to the divestment of assets of the
Group. This process 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 was 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 2021
Page 19 of 99
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
CFO Termination Benefit
The Company may terminate the employment contract of the CFO at any time or for any reason or for
no reason by providing 6 months written notice and paying a lump sum equal to the base amount. The
Base amount is equal to the actual remuneration received for the preceding 12-month period (inclusive
of the 6 month notice period) including any other entitlement accrued to that point.
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.
Director & Specified Executives Disclosure
2021
Name
Short Term Benefits
Post-
employment
Long Term
Benefits
Share-based Payments
Cash Salary Directors Fees
Non- monetary
benefits
Super-
annuation
Long Service
Leave
Options
Shares
Total
Vernon Wills 1
Nicasio Alcantara
Peter Jones 2
Craig Dawson3
Brett McPhee4
Total
$
400,000
-
-
273,973
23,226
697,199
$
-
80,749
60,225
-
-
140,974
$
48,050
-
-
25,818
-
73,868
$
$
$
$
- - - -
- - - -
- - - -
26,028
5,251 - -
- - - -
5,251 - -
26,028
$
448,050
80,749
60,225
331,070
23,226
943,320
1 Resigned as Director November 2020. Considered Specified Executive post resignation.
2 Resigned as Director May 2021
3 Specified Executive prior to appointment as Director in November 2020.
4 Appointed as Director May 2021
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 20 of 99
Directors’ Report continued
Remuneration Report (audited) continued
2020
Name
Short Term Benefits
Post-
employment
Long Term
Benefits
Share-based Payments
Cash Salary Directors Fees
Non- monetary
benefits
Super-
annuation
Long Service
Leave
Options
Shares
Total
Vernon Wills
Nicasio Alcantara
Peter Jones
Craig Dawson
Total
$
400,000
-
-
273,973
673,973
$
-
88,912
65,700
-
154,612
$
47,592
-
-
25,360
72,952
$
$
$
$
- - - -
- - - -
- - - -
5,250 1,812 -
26,027
5,250 1,812 -
26,027
$
447,592
88,912
65,700
332,422
934,626
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 FY21 and FY20,
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 2021
Page 21 of 99
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 and Mr McPhee 750,000 shares under the plan, with a
grant date of 8 March 2019 and a loan price (option exercise price) of 4 cents per share with half
escrowed to 29 March 2019 and the other half escrowed to 29 March 2020. No amount has been paid
by Mr Dawson or Mr McPhee in respect of these shares. The related options have a grant date fair
value of 0.64 cents per share and 0.97 cents 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
Brett McPhee
Craig Dawson
Total
Balance
1 July
2020
750,000
Granted
as
remuneration
-
1,000,000
1,750,000
-
-
Shares
sold
Forfeited
Balance
30 June 2021
Tradable
Escrowed
Vested and
Exercisable
-
-
-
-
-
-
750,000
1,000,000
1,750,000
-
-
-
750,000
750,000
1,000,000
1,000,000
1,750,000
1,750,000
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 2020
Granted
as
remuneration
-
Vern Wills
122,395,630
Nicasio Alcantara
8,371,325
Peter Jones
56,819,466
Craig Dawson
Brett McPhee
Total
1,000,000
3,193,613
191,780,034
-
-
-
-
-
Shares
sold
Capital
Raising#
Balance
30 June 2021
-
-
-
-
-
-
-
-
-
-
-
-
122,395,630
8,371,325
*
1,000,000
3,193,603
134,960,558
* Resigned as a Director and KMP on 19 May 2021
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 22 of 99
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:
2021
2020
2019
2018
2017
2016
2015
Total revenue ($)
Growth %
16,939,116
(38%)
27,259,059
(12%)
30,913,290
2%
30,306,134
4%
29,213,400
15%
25,406,177
31%
19,467,233
12%
The current year decrease reflect the sale part way through the year of the Domestic trades training
business and the impact of COVID-19 on the international operations.
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
2021
(7,276,206)
29%
2020
(10,264,692)
(116%)
2019
(4,742,968)
22%
2018
(6,042,212)
88%
2017
(50,466,491)
(637%)
2016
2015
9,404,816 1,946,454
383%
130%
(0.86)
$0.011
(1.32)
$0.035
(0.69)
$0.027
(0.92)
$0.025
(9.50)
$0.04
1.84
0.40
$0.19
$0.35
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 23 of 99
Directors’ Report continued
Remuneration Report (audited) continued
The impact of the impairments reported in 2021, 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 FY20 Remuneration Report
At the Annual General Meeting of the Company on 26 November 2020, the FY20 remuneration report
was adopted by the shareholders with a vote of 93% in favour.
Loan from Director related entity – Wayburn Holdings Pty Ltd
During the comparative period, the Group made use of an unsecured loan facility with Wayburn
Holdings Pty Ltd, a company associated with former 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 prior 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 30 June 2020.
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
2021
$
-
-
-
-
-
2020
$
38,907
243,067
-
(281,974)
-
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 2021
Page 24 of 99
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
2021
$
2020
$
4,970,972
4,167,276
-
701,327
-
(437,341)
5,234,958
-
708,976
-
94,720
4,970,972
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 2021
Page 25 of 99
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, 4th 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 2021
Page 26 of 99
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
6
51
60
Female
0
1
36
37
Male
100%
86%
59%
69%
Female
0%
14%
41%
31%
Total
3
7
87
97
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 27 of 99
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 2021 is set out in the Directors’ Report.
In 2021 the Committee comprised Mr Peter Jones (resigned on 19 May 2021), Mr Nicasio Alcantara,
and Mr Brett McPhee (appointed 19 May 2021). The Council recommends that remuneration
committees be comprised of at least three independent directors. Both Mr Jones and Mr Alcantara
are non-executive directors, however Mr Jones is not considered independent due to being a
substantial shareholder. Due to Messrs Jones, Alcantara and McPhee 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 one non-executive Director and two
executive Director. The Chairman of the Board Mr Alcantara is not considered to be independent due
to being a substantial security holder. In accordance with the Council’s definition of independence,
both Mr McPhee and Mr Dawson are not considered independent as they are employed in an
executive capacity.
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 2021
Page 28 of 99
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
2021 year is set out in the Directors’ Report. In 2021 the committee comprised Mr Peter Jones, Mr
Brett McPhee and Mr Nicasio Alcantara. The Council recommends that audit committees be
comprised of at least three independent directors. Despite one director 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, Alcantara and McPhee 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 2021
Page 29 of 99
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 2021
Page 30 of 99
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 2021
Page 31 of 99
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 2021 year is set out in the Directors’
Report.
In 2021 the Committee comprised all three members of the Board. The Council recommends that
remuneration committees be comprised of at least three independent directors. Despite the two
directors being executive directors, Mr Jones is not considered to be independent due to being a
substantial security holder in the Company. Due to Messrs Jones, McPhee 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 2021
Page 32 of 99
Level 38, 345 Queen Street
Brisbane, QLD 4000
Postal address
GPO Box 1144
Brisbane, QLD 4001
p. +61 7 3222 8444
The Directors
Site Group International Limited
Level 2, 488 Queen St
BRISBANE QLD 4000
Auditor’s Independence Declaration
In relation to the independent audit for the year ended 30 June 2021, 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
30 September 2021
Brisbane Sydney Newcastle Melbourne Adelaide Perth
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.
NIGEL FISCHER
MARK NICHOLSON
PETER CAMENZULI
JASON EVANS
KYLIE LAMPRECHT
NORMAN THURECHT
BRETT HEADRICK
WARWICK FACE
COLE WILKINSON
SIMON CHUN
JEREMY JONES
TOM SPLATT
JAMES FIELD
DANIEL COLWELL
ROBYN COOPER
FELICITY CRIMSTON
CHERYL MASON
KIERAN WALLIS
MURRAY GRAHAM
ANDREW ROBIN
pitcher.com.au
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2021
Statement of Profit or Loss and Other Comprehensive Income
Consolidated Group
Note
2021
$
2020
$
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
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
Profit/(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 (loss)/income
Total comprehensive loss
Earnings per share
Earnings per share for loss 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
7,362,539
14,905
7,377,444
(775,801)
(1,412,909)
(5,064,710)
(987,288)
(518,071)
(1,436,904)
(3,430,862)
(1,723,418)
492,477
979,503
(2,197,015)
(8,697,554)
60,316
(8,637,238)
15,320,718
24,291
15,345,009
(2,186,299)
(3,375,269)
(7,101,834)
(966,800)
(1,293,314)
(1,603,270)
(197,035)
(2,054,097)
109,988
(1,021,916)
(2,805,148)
(7,149,985)
(945,120)
(8,095,105)
1,361,032
(2,169,587)
(7,276,206)
(10,264,692)
(273,878)
296,867
99,878
(174,000)
(7,237)
289,630
(7,450,206)
(9,975,062)
(0.86)
(1.32)
(1.03)
(1.04)
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 2021
Page 34 of 99
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES AS AT 30 JUNE 2021
Statement of Financial Position
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
Financial assets at fair value through profit or loss
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 or 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
Note
Consolidated Group
2021
$
2020
$
7
8
9
12
10
24
6
13
14
15
12
16
17
13
16
15
12
17
18
19
19
166,053
1,188,543
41,002
14,521
232,802
-
1,642,921
3,680,580
4,309,876
445,004
793,776
16,435
1,504,269
830,838
11,580,778
13,223,699
6,348,256
88,113
2,015,798
1,027,525
11,299
345,232
166,798
10,003,021
5,595,083
327,712
5,234,958
6,515,480
94,245
17,767,478
27,770,499
(14,546,800)
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
22,759,525
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
(7,453,494)
83,719,540
2,695,639
(100,961,979)
(14,546,800)
83,366,140
2,966,017
(93,785,651)
(7,453,494)
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 2021
Page 35 of 99
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2021
Statement of Changes in Equity
Consolidated Group
Balance at 30 June 2019
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
(83,513,722)
1,134,288
1,520,903
(2,773,247)
-
-
-
(10,264,692)
(7,237)
(10,271,929)
-
296,867
296,867
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)
Comprehensive income
Loss for the year
Other comprehensive income for the year
Total comprehensive income /(loss) for the year
-
-
-
(7,276,206)
99,878
(7,176,328)
-
(273,878)
(273,878)
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
353,400
-
-
353,400
-
-
-
-
-
-
-
-
-
-
-
-
-
3,500
3,500
(7,276,206)
(174,000)
(7,450,206)
353,400
-
3,500
356,900
Balance at 30 June 2021
83,719,540
(100,961,979)
1,157,277
1,538,362
(14,546,800)
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 2021
Page 36 of 99
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES FOR THE YEAR ENDED 30 JUNE 2021
Statement of Cash Flows
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Income tax paid
Government grants and tax incentives
Consolidated Group
Note
2021
$
2020
$
16,409,488
29,061,947
(18,106,059)
(32,491,836)
12,116
18,546
(1,199,671)
(1,101,086)
(69,068)
(111,169)
1,161,439
851,954
Net cash (used in) operating activities
25
(1,791,755)
(3,771,644)
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for property, plant and equipment
Payments for investments
Proceeds from sale of investments
Proceeds from sale of business
Proceeds from sale of property,plant and equipment
Purchase of intangible assets
Cash backed performance bonds
Net cash (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from exercise of employee share plan
Proceeds from borrowings
Repayment of borrowings
Principal repayments - lease liabilities
Transaction costs on shares
(370,791)
(554,205)
-
(116,147)
199,169
1,799,189
-
-
28,143
52,593
(258,920)
(507,139)
89,563
(76,690)
1,486,353
(1,201,588)
323,400
4,500,000
-
10,000
1,000,000
2,000,000
(1,000,000)
(281,974)
12
(1,079,549)
(619,068)
-
(16,160)
Net cash (used in) / provided by financing activities
(756,149)
5,592,798
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
(1,061,551)
619,566
(19,215)
21,105
1,246,819
606,148
Cash and cash equivalents at end of financial year
166,053
1,246,819
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 2021
Page 37 of 99
SITE GROUP INTERNATIONAL LIMITED ABN: 73 003 201 910
AND CONTROLLED ENTITIES
Notes to the Financial Statements for the Year Ended 30 June 2021
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 2021 was authorised for issue in accordance with a
resolution of the directors on 30 September 2021.
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 2021 the Group made a net loss of $7,276,206 (2020: loss of
$10,264,692) and the cash outflow from operating activities for the year was $1,791,755 (2020:
$3,771,644). At 30 June 2021, the Group had deficiencies in net assets and net current assets of
$14,546,800 and $8,360,100 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 2021
Page 38 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 the COVID-19 on
industries around the world with 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 has sold the Site Skills Training domestic assets which generated a cash payment
of $1.94m and potentially an additional $1m milestone payable following FY22 and $1.5m
payable after FY23.
- The Group continues to maintain the support of its existing debt providers to manage any
maturing debt facilities within the best interests 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 including the savings associated with restructuring and
streamlining the corporate operations following completion of the asset sale of Site Skills
Training in Australia;
- Forecast cash flow from realisation of the value of the Clark Property project in the form of
third party investors providing funds to enable the Group to proceed with its strategy of
maximising the value of the leasehold. This will allow for repayment of the current debt from
the Lucerne facility as well as the recovery of significant funds to recoup the investment made
to date by the Group in positioning the project to realise its development potential. It is
expected that the funding will be utilised by the company to meet its existing working capital
requirements as well as funding the development program;
- 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 or amended Accounting Standards and Interpretations adopted
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not
been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
Conceptual framework for financial reporting (Conceptual Framework
The Group has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual
Framework contains new definition and recognition criteria as well as new guidance on measurement
that affects several Accounting Standards, but it has not had a material impact on the consolidated
entity's financial statements.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 39 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 2021
Page 40 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 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 2021
Page 41 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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.
(h)
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 2021
Page 42 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
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 2021
Page 43 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 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:
(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)
(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.
(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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 44 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 1a
Summary of significant accounting policies continued
Training Licences and Course Material
Site Group acquires licenced course material with significant scope (approved courses) in high risk
training. The economic potential of these licences and courses was assessed as part of the
acquisition price and recorded as an intangible asset which is being amortised on a straight line basis
over five years.
Licences
Site Group acquires licences to offer scope of training and access to government funding options. The
economic potential of these licences was assessed as part of the acquisition price and recorded as an
intangible asset and amortised on a straight line basis over 20 years.
Customer Contracts
Site Group acquires customer contracts with significant value to be realised through the profit and
loss in future periods. The economic potential of these contracts is measured as a risk adjusted
discounted cash flow to be generated from these contracts and recorded as an intangible asset which
is amortised on a straight line basis over the relevant contract period.
Brand
Site Group acquires brands that are recognised by customers in relevant markets and generate future
activity for the company. The economic potential of these brands in the form of future revenue
generating potential is assessed as a discounted cash flow and recorded as an indefinite useful life
intangible and tested for impairment annually. The assessment of indefinite life is reviewed annually
to determine whether the indefinite life continues to be supportable. If not, the change in useful life
from indefinite to finite is made on a prospective basis.
(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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 45 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 1a
Summary of significant accounting policies continued
Employee leave benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be
wholly settled within 12 months of the reporting date are recognised in respect of employees' services
up to the reporting date. They are measured at the amounts expected to be paid when the liabilities
are settled. Based on historical evidence no discounting of annual leave has been applied. Expenses
for non-accumulating sick leave are recognised when the leave is taken and are measured at the
rates paid or payable. Liabilities for wages, salaries and annual leave are recognised as current
liabilities and the Group does not have an unconditional right to defer settlement beyond 12 months.
(ii) Long service leave
The liability for long service leave is recognised and measured as the present value of expected
future payments to be made in respect of services provided by employees once an employee reaches
five years of service. Expected future payments are discounted using market yields at the reporting
date on the applicable corporate bonds with terms to maturity and currencies that match, the
estimated future cash outflows. Where the Group has an unconditional right to defer settlement of the
liability beyond 12 months of the balance date, the provision is classified as non-current.
(iii) Post employment obligations
The liability recognised in the balance sheet in respect of the retirement obligations of staff in the
Philippines is the present value of the defined benefit obligation at the end of the reporting period less
the fair value of the plan assets. The defined benefit obligation is calculated annually by independent
actuaries using the projected unit cost method. Remeasurement gains and losses arising from
experience adjustments and change sin actuarial assumptions are recognised in the period in which
they occur, directly in other comprehensive income. These are included in retained earnings in the
statement of change in equity and in the balance sheet.
For defined contribution plans, the Group pays contributions to publicly or privately administered
superannuation plan on a mandatory, contractual or voluntary basis. The Group has no further
payment obligations once the contributions have been paid. The contributions are recognised as
employee benefit expense when they are due.
(n)
Taxes
Current Income 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 Income 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 (DTL) are recognised for all taxable temporary differences except:
• When the DTL 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 or
interests in joint ventures, and the timing of the reversal of the temporary difference can be
controlled and probable the temporary difference will not reverse in the foreseeable future.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 46 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 1a
Summary of significant accounting policies continued
Deferred income tax assets (DTA) 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 DTA 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, a deferred tax asset is only recognised to the extent
that it is probable that the temporary difference will reverse in the foreseeable future and
taxable profit will be available against which the temporary difference can be utilised.
The carrying amount of DTA 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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 47 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 1a
Summary of significant accounting policies continued
(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:
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.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 48 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 1a
Summary of significant accounting policies continued
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)).
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 20.
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).
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 49 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 1a
Summary of significant accounting policies continued
At each subsequent reporting date until vesting, the cumulative charge to profit or loss is the product
of:
• The grant date fair value of the award;
• The current best estimate of the number of awards that will vest, taking into account such
factors as the likelihood of employee turnover during the vesting period and the likelihood of
non- market performance conditions being met; and
• The expired portion of the vesting period.
The charge to profit or loss for the period is the cumulative amount as calculated above less the
amounts already charged in previous periods. There is a corresponding entry to equity. The expense
associated with equity-settled awards granted by Site Group to employees of subsidiaries are
recorded as an expense in the subsidiary and funded by advances from the parent which eliminate on
consolidation. The expense recognised by the Group is the total expense associated with all awards.
Until an award has vested, any amounts recorded are contingent and will be adjusted if more or fewer
awards vest than were originally anticipated to do so. Any award subject to a market condition or non-
vesting condition is considered to vest irrespective of whether or not that market condition or non-
vesting is fulfilled, provided that all other conditions are satisfied.
(s)
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of tax as applicable, from the proceeds.
(t)
Fair value measurement
All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorised within the fair value hierarchy, described as follows, based on the lowest level input that
is significant to the fair value measurement as a whole:
• Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities
• Level 2 – Valuation techniques for which the lowest level input that is significant to the fair
value measurement is directly or indirectly observable
• Level 3 – Valuation techniques for which the lowest level input that is significant to the fair
value measurement is unobservable
The Group measures derivative financial liabilities at fair value through profit and loss (refer note
1a(g)) 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 2021
Page 50 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 $2,656,727 (tax
effected: $797,018) 2020: $7,845,220 (tax effected: $2,353,566). 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 2021
Page 51 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 $3,961,403 was recognised in the current year in respect of Right-of-use
assets, property plant and equipment, and intangibles. (2020: $1,096,000). 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 2021
Page 52 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 three reportable business segments of the Group are:
- 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 2021
Page 53 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 2
Operating Segments continued
Year ended 30 June 2021
Site Skills
Training
(International)
$
Energy
Services
$
Tertiary
Education
$
Total
Segments
$
Corporate
and
Eliminations
$
Total
$
Revenue from contracts with customers
Revenue from contracts with customers - external customer
2,635,034
567,301
3,820,368
7,022,703
339,836
7,362,539
Revenue from contracts with customers - inter-segment
19,134
-
-
19,134
(19,134)
-
Total segment revenue
2,654,168
567,301
3,820,368
7,041,837
320,702
7,362,539
Segment net operating profit / (loss) before tax
(5,831,968)
(945,424)
197,610
(6,579,782)
(2,117,772)
(8,697,554)
Interest revenue
Interest expense
Depreciation and amortisation
EBITDA
12,195
(615,944)
(810,241)
2
-
12,197
2,708
14,905
(2,515)
(19,510)
(637,969)
(1,085,449)
(1,723,418)
(17,075)
(155,104)
(982,420)
(454,484)
(1,436,904)
(4,417,978)
(925,836)
372,224
(4,971,590)
(580,547)
(5,552,137)
Segment assets as at 30 June 2021
7,721,916
129,971
1,293,903
9,145,790
2,133,039
11,278,829
Segment liabilities as at 30 June 2021
8,057,648
265,933
1,329,693
9,653,274
16,168,836
25,822,110
Capital expenditure as at 30 June 2021
32,776
-
86,248
119,025
84,460
203,485
Year ended 30 June 2020
Site Skills
Training
(International)
$
Energy
Services
$
Tertiary
Education
$
Total
Segments
$
Corporate
and
Eliminations
$
Total
$
Revenue from contracts with customers
Revenue from contracts with customers - external customer
9,553,265
1,881,617
3,591,170
15,026,052
294,666
15,320,718
Revenue from contracts with customers - inter-segment
31,261
91,802
-
123,063
(123,063)
-
Total segment revenue
9,584,526
1,973,419
3,591,170
15,149,115
171,603
15,320,718
Segment net operating profit / (loss) before tax
(759,025)
(391,106)
465,854
(684,277)
(6,465,708)
(7,149,985)
Interest revenue
Interest expense
Depreciation and amortisation
EBITDA
16,132
(697,231)
(925,314)
15
-
16,147
8,144
24,291
(2,110)
(18,001)
(717,342)
(1,336,755)
(2,054,097)
(96,801)
(141,428)
(1,163,543)
(439,727)
(1,603,270)
847,388
(292,210)
625,283
1,180,461
(4,697,370)
(3,516,909)
Segment assets as at 30 June 2020
13,965,550
563,580
1,254,760
15,783,890
3,061,934
18,845,824
Segment liabilities as at 30 June 2020
8,536,953
178,428
950,297
9,665,678
17,163,425
26,829,103
Capital expenditure as at 30 June 2020
352,774
793
73,513
427,080
60,186
487,266
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 54 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 gain/loss of financial iiabilities at fair value
Other corporate costs
Corporate income
Group loss before tax from continuing operations
Reconciliation of assets
Segment operating assets
Discontinued operations
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
Discontinued operations
Corporate liabilities
Corporate trade payables
Interest bearing debt
Other financial liabilites
Other liabilities
Total liabilities per statement of financial position
Consolidated Group
2021
$
2020
$
(6,579,782)
1,876,621
(26,240)
(2,218,716)
(316,748)
(21,341)
(454,484)
(1,085,449)
979,503
(1,171,620)
320,702
(8,697,554)
(684,277)
660,000
(206,745)
(2,456,728)
(373,780)
(158,335)
(439,727)
(1,336,755)
(1,021,916)
(1,303,325)
171,603
(7,149,985)
9,145,790
1,944,870
15,783,890
3,913,701
9,716
409,359
-
1,725,732
(11,768)
13,223,699
139,647
543,705
198
2,378,384
-
22,759,525
9,653,274
1,948,389
9,665,678
3,383,916
6,971,499
8,393,200
261,043
543,094
27,770,499
6,739,157
8,532,506
1,240,546
651,216
30,213,019
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 55 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 2021
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 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
Australia
Asia
$
$
Corporate
and
Eliminations
$
Total
$
3,527,873
-
417,550
7,420
42,657
3,995,500
3,995,500
1,311,155
890,356
105,911
304,833
399,748
3,012,003
19,134
3,031,137
-
-
252,500
-
102,536
355,036
(19,134)
335,902
4,839,028
890,356
775,961
312,253
544,941
7,362,539
-
7,362,539
-
3,995,500
3,995,500
55
3,031,082
3,031,137
7,995
327,907
335,902
8,050
7,354,489
7,362,539
Australia
Asia
$
$
Corporate
and
Eliminations
$
Total
$
3,443,857
-
326,049
47,785
6,585
3,824,276
-
3,824,276
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
10,145,014
1,527,959
651,963
2,580,000
415,782
15,320,718
-
15,320,718
-
3,824,276
3,824,276
15,457
11,309,382
11,324,839
8,553
163,050
171,603
24,010
15,296,708
15,320,718
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 56 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
2021
2020
$
$
(8,637,238)
(7,276,206)
(8,095,105)
(10,264,692)
b) Weighted average number of shares
Weighted average number of ordinary shares for basic and diluted earnings per share
No.
842,172,935
No.
776,786,845
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
(1.03)
(0.86)
(1.04)
(1.32)
Options outstanding are anti-dilutive and therefore were not considered in the calculation of diluted
earnings per share for the year ended 30 June 2021 and 2020.
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
2021
2020
$
$
Net profit /(loss) from discontinued operations attributable to ordinary equity holders
of the parent
1,361,032
(2,169,587)
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
2021
2020
$
$
4,839,028
890,356
775,961
312,253
544,941
7,362,539
10,145,014
1,527,959
651,963
2,580,000
415,782
15,320,718
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 57 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
2020
$
2021
$
4,397,532
360,497
178,660
(23,721)
148,242
3,500
5,064,710
441,788
42,936
671,271
1,041,020
2,197,015
263,917
701,327
751,519
6,655
1,723,418
9
10
12
567,085
9,847
859,972
1,436,904
6,041,129
467,151
183,545
74,866
321,184
13,959
7,101,834
500,548
566,122
867,419
927,059
2,861,148
115,917
952,386
874,903
110,891
2,054,097
613,050
98,191
892,029
1,603,270
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 58 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
Income tax expense is attributable to
Profit (loss) from continuing operations
Profit (loss) from discontinued operations
b) Numerical reconciliation of income tax expense to prima facie tax payable
Profit (loss) from continuing operations before income tax expense
Profit (loss) from discontinued operations before income tax expense
At the parent entity's statutory income tax rate of 30% (2020 - 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
Income tax expense
Consolidated Group
2021
$
2020
$
35,500
-
86,384
7,991
87,970
(45,662)
123,470
48,713
(60,316)
183,786
123,470
945,120
(896,407)
48,713
(8,697,554)
1,544,818
(2,145,821)
142,114
(1,009,446)
2,198,944
(18,642)
-
159,303
797,018
123,470
(6,952,950)
(3,263,029)
(3,064,794)
93,878
(3,121,931)
3,462,756
(11,553)
7,991
328,800
2,353,566
48,713
A deferred tax asset has not been recognised for unused tax losses amounting to $2,656,727 (tax
effected: $797,018).
c) Deferred tax
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
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 2021
Consolidated statement of
financial position
Consolidated statement of
profit or loss
2021
$
2020
$
2021
$
2020
$
507,702
21,349
113,750
81,300
23,717
94,737
(11,717)
446,522
32,163
238,776
42,300
23,717
149,718
(12,136)
830,838
921,060
(61,180)
10,814
125,026
(39,000)
-
54,981
(2,671)
87,970
2021
$
921,060
(2,252)
(87,970)
830,838
180,050
(13,636)
(32,057)
(30,300)
-
(149,718)
(1)
(45,662)
2020
$
875,929
(531)
45,662
921,060
Page 59 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
2021
$
2020
$
22,287,479
(21,248,645)
1,038,834
149,709
1,188,543
23,473,161
(21,118,645)
2,354,516
302,009
2,656,525
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(g), 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 2021 and 30 June 2020 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 2021
Page 60 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 7
Trade and Other Receivables continued
The tables below show the calculation of the expected credit loss provision at both 30 June 2021 and
30 June 2020.
Consolidated Group
30 June 2021
Expected credit loss rate
Estimated total gross carrying
Expected credit loss
30 June 2020
Expected credit loss rate
Estimated total gross carrying
Expected credit loss
Total
22,287,479
21,248,373
23,473,161
21,118,645
Trade receivables - Days past due
31-60 days
61-90 days
0-30 days
+91 days
Discontinued
Operation
1.2%
525,908
6,338
1.3%
836,658
10,565
5.9%
193,256
11,433
2.9%
459,803
13,198
17.4%
105,201
18,262
8.9%
458,289
40,984
48.7%
485,469
234,695
10.0%
740,766
76,253
20,977,645
20,977,645
20,977,645
20,977,645
The closing loss allowances for receivables from contracts with customers and contract assets as at
30 June 2021 reconcile to the opening loss allowances as follows:
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
2021
2020
$
$
21,118,645
130,000
-
-
21,248,645
21,304,563
(189,272)
(2,043)
5,397
21,118,645
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 2021, 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 2021
Page 61 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 8
Contract Assets
Accrued revenue
41,002
496,950
Consolidated Group
2021
$
2020
$
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
2021
2020
$
$
8,151,518
(6,475,035)
1,676,483
9,573,434
(3,729,995)
5,843,439
1,816,337
1,970,051
785,651
(691,718)
93,933
1,384,145
(1,272,757)
111,388
2,206,309
(2,112,482)
93,827
4,689,755
(4,279,019)
410,736
55,333
(55,333)
-
342,609
(338,581)
4,028
Total property, plant and equipment
3,680,580
8,339,642
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 62 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 2019
Additions
Transfers - in (out)
Disposals
Depreciation expense
Impairment expense
Exchange rate differences
Balance at 30 June 2020
Additions
Transfers - in (out)
Disposals
Depreciation expense
Impairment expense
Exchange rate differences
Balance at 30 June 2021
Leasehold
Capital Works
Improvements
$
in Progress
$
Computers
$
Furniture &
Fittings
$
Vehicles
$
Total
$
6,302,253
13,553
2,765
-
(423,126)
(345,072)
293,066
5,843,439
788
193,774
(762,779)
(410,522)
(2,834,384)
(353,833)
1,676,483
1,555,369
531,679
(197,544)
-
-
-
80,547
1,970,051
238,784
(265,048)
-
-
-
(127,450)
1,816,337
126,831
56,022
8,844
-
(80,338)
-
29
111,388
59,714
36,662
(31,542)
(80,596)
(1,574)
(119)
93,933
521,733
51,766
87,120
(14,122)
(244,383)
-
8,622
410,736
81,323
11,038
(229,193)
(173,037)
(986)
(6,054)
93,827
194,508
-
(175,651)
-
(19,829)
-
5,000
4,028
4,440
-
(7,494)
(2,175)
-
1,201
-
8,700,694
653,020
(274,466)
(14,122)
(767,676)
(345,072)
387,264
8,339,642
385,049
(23,574)
(1,031,008)
(666,330)
(2,836,944)
(486,255)
3,680,580
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
2021
$
$
441,015
441,015
1,597,005
(1,593,016)
3,989
3,518,016
(2,985,969)
532,047
1,615,542
(1,615,542)
1,615,542
(1,615,542)
-
-
115,745
(115,745)
-
1,596,286
(1,318,740)
277,546
445,004
1,250,608
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 63 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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:
Consolidated Group:
Balance at 30 June 2019
Additions
Transfers in
Amortisation expense
Impairment expense
Exchange rate differences
Balance at 30 June 2020
Additions
Transfers in
Disposals
Amortisation expense
Impairment expense
Exchange rate differences
Balance at 30 June 2021
Goodwill
$
Training
Licences
Courses
$
Software
Development
$
Total
$
638,050
-
-
-
(197,035)
-
441,015
-
-
-
-
-
-
441,015
643,670
270,364
-
(271,084)
(112,688)
1,785
532,047
114,926
-
(483,933)
(159,030)
-
(21)
3,989
227,496
137,880
98,895
(186,725)
-
-
277,546
103,410
23,574
(254,342)
(150,188)
-
-
-
1,509,216
408,244
98,895
(457,809)
(309,723)
1,785
1,250,608
218,336
23,574
(738,275)
(309,218)
-
(21)
445,004
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 cash generating units are as follows:
- Site Skills Training - International
- Clark Property Development
- Tertiary Education
- Energy Services
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 (International) CGU and the Energy Services CGU.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 64 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 11
Impairment Testing continued
Site Skills Training – International cash-generating unit
The recoverable amount of the Site Skills Training – International CGU of $4,494,027 as at 30 June
2021 ($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% (2020: 15.49%),
annual revenue growth rate over the 5-year forecast period of 15-65% (2020: 15-65%), annual
EBITDA margins of 10-16% (2020: 14-19%), and a terminal growth rate of 0% (2020: 0%).
As a result of this analysis management recognised an impairment loss totalling of $3,413,164 and
was allocated to this CGU’s plant and equipment (leasehold improvements $3,264,708) and right-of-
use assets $148,456. The Group attributes the impairment charge to the global occurrence of COVID-
19 and the impact on overseas markets.
Clark Property development cash-generating unit
The recoverable amount of the Clark Property development CGU of $5,769,949 as at 30 June 2021
($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% (2020: 15.49%),
annual EBITDA margins of 71-72% (2020: 71-72%), and a terminal growth rate of 0% (2020: 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 $1,236,562 as at 30 June 2021 ($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% (2020: 17.14%),
annual revenue growth rate over the 5-year forecast period of 10% (2020: 10%), annual EBITDA
margins of 6-8% (2020: 6-8%), and a terminal growth rate of 0% (2020:0%).
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 2021
Page 65 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 11
Impairment Testing continued
Energy Services cash-generating unit
The recoverable amount of the Energy Services CGU of $nil as at 30 June 2021 ($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% (2020: 17.57%), an
annual revenue growth rate over the 5-year forecast period of 0% (2020:10%), annual EBITDA
margin of 5% (2020: 5-10%), and a terminal growth rate of 0% (2020: 0%).
As a result of this analysis management recognised an impairment loss totalling of $17,698 and was
allocated to this CGU’s intangible assets (training licenses and course material - $261), plant and
equipment (leasehold improvements - $1,702, computer equipment - $1,616, furniture & fittings -
$1,005), and right-of-use assets ($13,114). 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.
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 2% (2020:
0.5%) would result in an impairment to the Site Skills Training – International. A decrease in the rate
by 3% (2020:2.5%) 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% (2020: 0.5%) would result in an
impairment to the Site Skills Training – International CGU. A decrease in the rate by 1% (2020:1%)
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 18.63% (2020:16.07%)
would result in an impairment to the Site Skills Training – International CGU. A rise in the discount
rate to 27.14% would result in an impairment to the Tertiary CGU. No reasonably possible change in
the discount rate applied would have resulted in an impairment of the Clark Property CGU at 30 June
2021.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 66 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 12
Right-of-Use Assets and Lease Liabilities
Leased assets
Right-of-use 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
Consolidated Group
2021
$
2020
$
2,520,011
3,837,569
(1,414,297)
(1,484,583)
1,105,714
2,352,986
3,607,709
(460,475)
3,147,234
232,420
(175,492)
56,928
3,887,672
(253,300)
3,634,372
312,068
(198,687)
113,381
Total carrying amount of leased assets
4,309,876
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
Land
$
-
Buildings
Motor Vehicles
$
-
$
-
Total
$
-
Impact of initial adoption of AASB 16
3,887,672
3,785,876
175,651
7,849,199
Additions
Depreciation
Impairment loss
Exchange rate differences
Balance at 30 June 2020
Additions
Disposals
Depreciation
Impairment loss
Exchange rate differences
Balance at 30 June 2021
-
51,693
-
51,693
(248,697)
(1,044,384)
(62,270)
(1,355,351)
-
(4,603)
3,634,372
-
(441,205)
1,006
2,352,986
1,906,570
(1,471,001)
-
-
113,381
-
(441,205)
(3,597)
6,100,739
1,906,570
(1,471,001)
(227,930)
(1,201,329)
(49,936)
(1,479,195)
-
(259,208)
3,147,234
(475,965)
(5,547)
1,105,714
-
(6,517)
56,928
(475,965)
(271,272)
4,309,876
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 67 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
Consolidated Group
2021
$
2020
$
257,583
748,350
21,591
173,046
1,204,146
83,995
1,027,525
1,461,187
5,597,974
917,505
-
6,252,951
2,113,012
7,243
6,515,479
8,373,206
Total carrying amount of lease liabilities
7,543,004
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
Land
$
-
Buildings
Motor Vehicles
$
-
$
-
Total
$
-
Impact of initial adoption of AASB 16
6,211,650
3,862,843
174,755
10,249,248
Additions
Lease repayments
Interest
Exchange rate differences
Balance at 30 June 2020
Additions
Disposals
Lease repayments
Interest
Exchange rate differences
Balance at 30 June 2021
-
51,693
-
51,693
(570,378)
(954,703)
(92,353)
(1,617,435)
643,700
141,025
6,425,997
-
-
345,830
11,495
3,317,158
1,949,603
(2,468,332)
(624,756)
(1,438,977)
577,563
(523,247)
5,855,557
355,159
(48,757)
8,836
-
91,238
-
(18,014)
(54,781)
3,148
-
998,367
152,520
9,834,393
1,949,603
(2,486,346)
(2,118,514)
935,871
(572,004)
7,543,004
1,665,855
21,591
In addition to the depreciation and interest disclosed above, the Group recognised the following
expenses relating to leases:
2021
$
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
(182,757)
(613,026)
(18,727)
(133,925)
-
5,585
The total cash outflow for leases for the year ended 30 June 2021 was $2,148,977 (2020: 2,355,549).
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 68 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
2021
2020
$
$
3,051,291
1,864,159
1,400,734
32,072
6,348,256
1,929,846
664,759
1,766,872
58,768
4,420,245
Consolidated Group
2021
2020
$
$
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.
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 21.
(c)
Interest rate, foreign exchange and liquidity risk
Information regarding interest rate, foreign exchange and liquidity risk exposure is set out in
note 26.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 69 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 14
Contract Balances
The amount of the contract liability recognised at the beginning of the period was recognised as
revenue during the 2021 year. All contract liabilities outstanding at 30 June 2021 are expected to be
recognised as revenue within the next twelve months.
Unearned revenue
88,113
812,474
Consolidated Group
2021
$
2020
$
At 1 July 2020
Deferred during the year
Released to statement of profit or loss
At 30 June 2021
Consolidated Group
2021
$
2020
$
812,474
2,801,176
(3,525,537)
88,113
390,458
6,008,718
(5,586,702)
812,474
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 70 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 15
Interest Bearing Debt
Current financial liabilities
Secured loans due within 12 months
Non-current financial liabilities
Unsecured related party loans
Consolidated Group
2021
$
2020
$
2,015,798
2,015,798
2,015,680
2,015,680
Consolidated Group
2021
$
2020
$
5,234,958
5,234,958
4,970,972
4,970,972
Secured 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
Provision for pension liability
Consolidated Group
2021
2020
$
$
234,768
110,464
345,232
507,544
120,697
628,241
Consolidated Group
2021
2020
$
$
177,095
150,617
327,712
342,216
269,087
611,303
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 71 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 16
Provisions continued
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
2021
$
2020
$
269,087
28,370
(46,962)
(99,878)
150,617
199,923
80,118
(18,191)
7,237
269,087
2021
$
2020
$
21,388
6,982
-
28,370
45,353
10,634
24,131
80,118
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 72 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
2021
$
2020
$
(32,661)
(67,217)
(99,878)
62,427
(55,190)
7,237
2021
$
2020
$
269,087
21,388
(46,962)
(99,878)
6,982
-
150,617
199,923
45,353
(18,191)
7,237
10,634
24,131
269,087
The weighted average duration of the defined benefits liability is 13.0 years and 16.3 years as at 30 June 2021 and
2020, respectively.
As at 30 June 2021, the undiscounted benefits payments within 10 years amounted to $115,405 (2020: $178,732).
Shown below is the maturity analysis of the undiscounted benefit payments as at 30 June:
Financial
Year
1
2
3
4
5
6 -10
Expected
benefits
payments
2021
$
Expected
benefits
payments
2020
$
9,761
1,407
1,775
2,208
42,865
57,389
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
2021
4.97%
5.00%
2020
3.57%
5.00%
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 73 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
2021
2020
Increase/
decrease in
actuarial
Effect on
defined benefit
liability
Increase/
decrease in
actuarial
Effect on
defined benefit
liability
1%
-1%
1%
-1%
(17,753)
21,506
21,276
(17,985)
1%
-1%
1%
-1%
(39,153)
48,467
47,233
(39,008)
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
2021
2020
$
$
166,798
324,606
Consolidated Group
2021
2020
$
$
94,245
915,940
The current derivative liability represents the fair value of the 41,666,667 options issued as part of the
financing agreement with Lucerne Investment Partners (Lucerne), Aligned Capital & Armada Trading.
These options have an exercise price of 3 cents per share.
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 investors
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 2021
2021
$
2020
$
157,808
(324,606)
821,695
979,503
(697,310)
(1,021,916)
Page 74 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 18
Issued Capital
842,361,127 fully paid ordinary shares; 1,116,000 partly paid ordinary shares
(2020: 830,581,138 fully paid ordinary shares; 1,116,000 partly paid ordinary
shares)
Cost of capital raising
a) Ordinary shares
(a) Ordinary Shares
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
30 June 2020 share capital
Share issue 8 July 2020
Consolidated Group
2021
$
2020
$
86,170,038
85,816,638
(2,450,498)
83,719,540
(2,450,498)
83,366,140
No. Shares
$
691,457,154
75,000,000
18,750,000
(5,000,000)
25,373,984
25,000,000
-
-
830,581,138
11,779,989
78,085,284
3,000,000
750,000
-
787,017
750,000
10,000
(16,161)
83,366,140
353,400
30 June 2021 share capital
842,361,127
83,719,540
• 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.
• On 8 July 2020 – the Company issued 11,779,989 shares under a share purchase plan at the issue
price of $0.030 per share
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 75 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 20: 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 2021 and 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
2021
2020
$
$
(93,785,651)
(7,276,206)
99,878
(100,961,979)
(83,513,722)
(10,264,692)
(7,237)
(93,785,651)
(b) Other reserves
Consolidated Group
At 30 June 2019
Foreign currency translation
Share based payment
At 30 June 2020
Foreign currency translation
Share based payment
At 30 June 2021
Share
based
payments
$
1,520,903
-
13,959
1,534,862
-
3,500
1,538,362
Foreign
currency
translation
$
Total
$
-
1,134,288 2,655,191
296,867 296,867
13,959
2,966,017
(273,878)
3,500
2,695,639
1,431,155
(273,878)
1,157,277
-
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 76 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
2021
2020
$
$
-
-
-
3,500
3,500
-
13,959
13,959
(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 2021
Page 77 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 20
Share Based Payments continued
A summary of shares issued under the plan are below:
2021
No. of shares
2021 Weighted
average exercise
price
2020
No. of shares
2020 Weighted
average exercise
price
Outstanding at the beginning of the period
7,450,000
$0.04
12,700,000
$0.10
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
-
-
-
-
-
-
7,450,000
7,450,000
$0.04
$0.04
-
250,000
5,000,000
7,450,000
7,450,000
-
$0.04
$0.20
$0.04
$0.04
The 5,000,000 shares that expired in FY20 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 FY20.
The 7,450,000 remaining shares issued have a remaining contractual life of 0.75 years (expiry date
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 2021
Page 78 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 23.
(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. During the current financial year there were no shares issued to directors or key
management personnel.
(d) Other transactions with related parties
Wayburn Holdings Pty Ltd
In previous periods, the Group made use of an unsecured loan facility with Wayburn Holdings Pty Ltd,
a company associated with former Managing Director & 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 comparative period the facility interest rate was reviewed and updated from a fixed rate of
7% per annum to 10% per annum. The rate change brought 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.
As at 30 June 2020, the remaining loan balance was paid in full and no further drawdowns have been
utilised or interest adjustments made during the current period.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 79 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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.
2021
$
-
-
-
-
-
2020
$
38,907
243,067
-
(281,974)
-
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
Total Value
Exercise
Price
Share price
@
drawdown
Risk
Free
rate
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%
50% 1/07/2021
50% 1/07/2021
50% 1/07/2021
50% 1/07/2021
50% 1/07/2021
50% 1/07/2021
50% 1/07/2021
50% 1/07/2021
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 2021 was
$27,605 (30 June 2020: $915,940). The following inputs were applied in deriving the fair value of
these options:
Date of
valuation
30/06/2021
30/06/2020
Drawdown
amount
(USD)
$
2,900,000
2,900,000
$
$
Drawdown
amount (AUD)
Value of
conversion
option
$
$
No of
securities
Total Value
Exercise
Price
Share price
@ valuation
Risk
Free
rate
Stock
volatility
Expected
maturity
4,231,106
4,231,106
0.00089729 105,777,645
0.008659107 105,777,645
$
94,245
915,940
$
0.04
0.04
$
0.011
0.035
0.27%
0%
100.00% 1/07/2022
75.00% 1/07/2021
A fair value gain of $821,692 (2020: loss of $697,310) has been recognised on revaluation of the
embedded derivative at 30 June 2021 (see Note 17).
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 80 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
2021
$
2020
$
4,970,972
4,167,276
-
701,327
-
(437,341)
5,234,958
-
708,976
-
94,720
4,970,972
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 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 2021
Page 81 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 2021.
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
Note 24
Discontinued Operations
Consolidated Group
2020
2021
$
$
901,537
912,041
26,027
26,027
5,250
5,251
1,812
-
934,626
943,319
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. Productivity Partners Pty Ltd has been
classified as a discontinued operation and the company is no longer included in the ‘Tertiary
Education’ segment of the segment note.
In February 2021, the Group announced their intention to exit its Australian domestic industry
focussed RTO business Site Skills Training - Domestic, by the way of sale of its training facilities,
assets and training equipment to Competency Training Pty Ltd, a subsidiary of Verbec Ltd
(ASX:VBC). The sale of the business was finalised on 12 April 2021, and it is reported in the current
period as discontinued operations
Financial information relating to the discontinued operations of both Productivity Partners Pty Ltd and
Site Skills Training – Domestic segment is set out below.
Financial performance and cash flow information
Revenue
Expenses
Profit / (loss) before income tax
Income tax benefit
Profit / (loss) after income tax of discontinued operations
Gain on sale of business after income tax
Profit / (loss) from discontinued operations
Net cash outflow from operating activities
Net cash inflow/(outflow) from investing activities (2021 includes an inflow of $1,799,189
from the sale of the business)
Net cash from financing activities
Net increase (decrease) in cash generated by the business
There is no other comprehensive income in the discontinued operations.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
2021
$
9,576,577
(11,601,755)
(2,025,178)
887,213
(1,137,965)
2,498,997
1,361,032
2020
$
11,938,341
(15,004,335)
(3,065,994)
896,407
(2,169,587)
-
(2,169,587)
2021
$
2020
$
(446,580)
(215,662)
1,372,963
-
926,383
(574,078)
-
(789,740)
Page 82 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 24
Discontinued Operations continued
Details of the sale of the business
Consideration received or receivable:
Cash
Fair value of contingent consideration
Total disposal consideration
Carrying amount of net liabilities sold
Gain on sale before income tax
Income tax expense on gain
Gain on sale after income tax
2021
$
2020
$
1,939,189
1,504,269
3,443,458
126,538
3,569,996
(1,070,999)
2,498,997
-
-
-
-
-
-
-
In the event that Competency Training Pty Ltd achieves certain revenue target post settlement for the
periods ended 30 June 2022 and 30 June 2023 as specified in an ‘earn out’ clause in the sale
agreement, additional cash consideration of up to $2,500,000 will be receivable. At the time of sale
the fair value of the consideration was determined to be $1,504,269. It has been recognised as a
financial asset at fair value through profit or loss. Fair value was determined as a level 3
measurement with unobservable inputs of a risk adjusted discount rate of 14.93% and expected cash
inflows of $750,000 for period ended 30 June 2022 and $1,125,000 for period ended 30 June 2023.
The carrying amounts of assets and liabilities as at the date of sale (12 April 2021) were:
Property, plant & equipment
Right of use assets
Total assets
Employee benefit obligations
Lease liabilities
Total liabilities
Net liabilities
21 April 2021
$
1,211,142
1,471,001
2,682,143
(322,335)
(2,486,345)
(2,808,680)
(126,538)
Assets and liabilities of disposal group classified as held for sale
The following assets and liabilities were classified as held for sale in relation to the discontinued
operations as at 30 June 2020.
Assets classified as held for sale
Property, plant & equipment
Right of use assets
Total assets of disposal group held for sale
Liabilities directly associated with assets classified as held for dale
Employee benefit obligations
Lease liabilities
Total liabilities of disposal group held for sale
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
2021
$
2020
$
-
-
-
-
-
-
1,472,612
457,241
1,929,853
(402,210)
(1,159,069)
(1,561,279)
Page 83 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
Net exchange diifferences
Bad debts
Share based payments expense
Fair value loss (gain) on derivatives
Interest accrued
Net (profit) / loss on sale of plant & equipment
Net (profit) / loss on sale of business
Change in assets and liabilities
Decrease in receivables
Decrease in contract assets
Decrease in inventory
Decrease in prepayments
Decrease / (Increase) in deferred tax assets
Decrease / (Increase) in other assets
Increase / (Decrease) in payables and accruals
Increase / (Decrease) in contract liabilities
Increase / (Decrease) in provisions
Increase / (Decrease) in current tax liabilities
Net cash used in operating activities
Consolidated Group
2021
2020
$
$
(7,276,206)
(10,264,692)
2,454,743
3,961,403
(592,665)
303,377
3,500
2,580,836
1,096,000
(109,998)
60,550
13,959
(979,503)
1,021,916
699,427
(22,343)
(3,569,996)
(5,018,263)
967,723
(38,471)
-
(4,672,177)
1,099,036
1,164,342
455,801
2,883
193,570
91,168
260,435
2,108,268
(722,604)
(225,283)
(36,766)
179,655
16,485
49,573
(45,663)
(257,327)
(622,372)
398,766
33,869
(16,795)
(1,791,755)
(3,771,644)
Non-cash investing and financing activities disclosed in other notes are:
• acquisition of right-of-use assets – note 12.
• deferred settlement of part proceeds of the sale of the Site Skills Training – Domestic
business – note 24
• options issued as part of financing arrangements to existing investors – note 17.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 84 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
Financial assets at fair value through profit or loss
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
2021
2020
$
$
7
24
13
15
12
17
13
15
12
17
166,053
1,188,543
1,504,269
16,435
2,875,300
1,246,819
2,656,525
-
226,233
4,129,577
6,348,256
2,015,798
1,027,525
166,798
5,595,083
5,234,958
6,515,480
94,245
26,998,143
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
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.
Financial liabilities due for payment
Trade and other payables
Interest bearing debt
- Principal
- Interest
- Principal
- Interest
Lease liabilities
Other financial liabilities
Total expected outflows
Within 1 Year
1 to 5 Years
Over 5 Years
Total
2021
$
2020
$
2021
$
2020
$
2021
$
2020
$
2021
$
2020
$
6,348,256
2,000,000
15,798
1,027,525
64,207
166,798
9,622,584
4,420,245
2,000,000
15,680
1,461,187
236,390
324,606
8,458,108
5,595,083
3,860,234
1,709,852
1,960,963
2,631,013
-
15,757,145
5,595,083
4,231,106
1,074,994
3,066,996
3,125,749
915,940
18,009,867
-
-
-
-
-
-
4,554,516
1,938,349
5,306,210
2,635,263
-
-
6,492,865
7,941,473
11,943,339
5,860,234
1,725,650
7,543,004
4,633,569
166,798
31,872,594
10,015,328
6,231,106
1,090,674
9,834,393
5,997,402
1,240,546
34,409,448
Financial assets - cash flows realisable
Cash and cash equivalents
Loans and receivables
Financial assets at fair value through profit or loss
Other non-current financial assets
Net (outflow) / inflow
166,053
1,188,543
1,246,819
2,656,525
-
-
-
-
1,354,596
(8,267,988)
3,903,344
(4,554,764)
-
-
1,504,269
16,435
1,520,704
(14,236,441)
-
-
-
226,233
226,233
(17,783,634)
-
-
-
-
-
-
-
-
-
-
(6,492,865)
(7,941,473)
166,053
1,188,543
1,504,269
16,435
2,875,300
(28,997,294)
1,246,819
2,656,525
-
226,233
4,129,577
(30,279,871)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 85 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 26
Financial Risk Management continued
The outflow indicated above within 1 year will be funded via drawdown on the unused loan facility
available at 30 June 2021 and through the anticipated sell down of the equity in the Clark property via
ownership of Site Group Holdings Pty Limited as identified at note 28. The outflow in subsequent
years is partly attributable to financial liabilities which will only require settlement where a
corresponding inflow of economic benefits is received in settlement of fully impaired receivables, as
disclosed in note 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)
1,464,227
1,604,902
Consolidated Group
2021
2020
$
$
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
2021
2020
$
$
166,053
1,246,819
Post Tax Profit
higher / (lower)
2021
$
2020
$
1,162
(581)
8,728
(4,364)
Other Comprehensive
Income
higher / (lower)
2021
$
-
-
2020
$
-
-
Consolidated
+ 1% (100 basis points)
- .5% (50 basis points)
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 86 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 2021 the Group had total cash and cash
equivalents denominated in USD of $25,321 (2020: USD $198,140).
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)
2021
$
2020
$
Other Comprehensive
Income
higher / (lower)
2021
$
2020
$
4,116
(3,042)
35,705
(26,391)
-
-
-
-
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 2021
Page 87 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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
2021
2020
$
$
116,350
11,270
104,500
24,330
Remuneration of entities affiliated with Pitcher Partners for:
— auditing or reviewing the financial statements of subsidiaries
10,941
17,580
Remuneration of other auditors of subsidiaries for:
— auditing or reviewing the financial statements of subsidiaries
— taxation services
10,501
8,939
19,440
11,166
11,435
22,601
Note 28
Events after the Reporting Period
On 23 August 2021 the Group signed a non-binding term sheet with a related party investor, an entity
associated with Site’s Chairman Mr Alcantara, to partner with the company’s subsidiary Site Group
Holdings Pty Ltd (SGH) the holder of the Clark lease. The term sheet provides that subject to due
diligence and formal documentation and Site obtaining shareholder approval, the investor will pay
$US7.5m to subscribe for 33.33% interest in SGH and Site will grant a 5 year call option for a further
17.67% for US$ 3.975m. If the transaction proceeds and the call option is exercised the investor would
acquire a total of 51% of the issued equity of SGH.
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 2021
Page 88 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 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 Liabilities
Equity
Issued capital
Accumulated losses
Share based payments reserve
Total Deficiency of Equity
Statement of Comprehensive Income
Total loss of the parent entity
Total comprehensive loss of the parent
2021
$
2020
$
696,084
7,142,225
7,838,309
21,600,698
12,588,707
34,189,405
4,954,337
6,183,836
11,138,173
4,649,945
7,151,216
11,801,161
(3,299,864)
22,388,244
73,246,818
(78,033,990)
1,487,308
(3,299,864)
72,893,418
(51,909,005)
1,403,831
22,388,244
(26,124,985)
(26,124,985)
(31,796,988)
(31,796,988)
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 after an initial adverse finding on 2 July 2021, this decision has now been
appealed), and the prevailing uncertainty surrounding the outcome of these proceedings.
Incentive contingency
A performance-based incentive has been given to Punta Properties for the development and
execution of an optimisation plan for the Group’s Philippine assets based on total project value. Refer
note 21.
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 89 of 99
Notes to the Financial Statements for the Year Ended 30 June 2021 continued
Note 31
Company Details
The registered office of the company is:
Site Group International Limited
Level 2, 488 Queen Street,
Brisbane Qld 4000
The principal places of business are:
Site Skills Training – International:
• 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 Institute Pty Limited
• Level 2 & 3, 488 Queen Street, Brisbane QLD 4000
• 2/855 Boundary Road, Coopers Plains QLD 4108
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 90 of 99
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 2021 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 2021 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 2021.
On behalf of the Board
Craig Dawson
Director
Brisbane, 30 September 2021
Site Group International Limited and Controlled Entities
Financial Year Ended 30 June 2021
Page 91 of 99
Independent Auditor’s Report to the Members of Site Group International Limited
Report on the Audit of the Financial Report
Opinion
Level 38, 345 Queen Street
Brisbane, QLD 4000
Postal address
GPO Box 1144
Brisbane, QLD 4001
p. +61 7 3222 8444
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 2021, 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 2021 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 Company, would be in the same terms if given to the directors as at the
time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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.
Brisbane Sydney Newcastle Melbourne Adelaide Perth
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.
pitcher.com.au
NIGEL FISCHER
MARK NICHOLSON
PETER CAMENZULI
JASON EVANS
KYLIE LAMPRECHT
NORMAN THURECHT
BRETT HEADRICK
WARWICK FACE
COLE WILKINSON
SIMON CHUN
JEREMY JONES
TOM SPLATT
JAMES FIELD
DANIEL COLWELL
ROBYN COOPER
FELICITY CRIMSTON
CHERYL MASON
KIERAN WALLIS
MURRAY GRAHAM
ANDREW ROBIN
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.
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 FY22 cash flow forecasts
and methodology of the impairment model;
• Confirming consistency of the impairment
During the year, the Group recorded an
impairment expense of $3,430,862 against
the assets of two CGUs. This impairment
expense was attributed to the global
occurrence of COVID-19.
Impairment testing of the Group’s CGUs is a
key audit matter due to
the 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.
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.
•
•
•
•
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 2021, 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.
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.
2
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain solely
responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
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.
3
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included on pages 18 to 25 of the directors’ report for the
year ended 30 June 2021. In our opinion, the Remuneration Report of Site Group International
Limited for the year ended 30 June 2021 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
PITCHER PARTNERS
JASON EVANS
Partner
Brisbane, Queensland
30 September 2021
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.
4
Shareholder Information
1
Twenty Largest Shareholders
(i) Ordinary shares inclusive of escrowed ordinary shares
As at 15 September 2021, 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
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