The GO2 People Ltd
ABN 45 616 199 896
Annual Report - 30 June 2022
The GO2 People Ltd
Corporate directory
30 June 2022
1
Directors
Darren Cooper
Independent Non-Executive Chairman
John Manning
Non-Executive Director
Shawn Murphy
Managing Director
Company secretary
Suzie Foreman
Registered office
Level 2, 182 St Georges Terrace, Perth 6000
Phone: (08) 6151 9200
Principal place of business
3/271 Berkshire Road, Forrestfield WA 6058
Phone: (08) 9376 2800
Fax: (08) 9376 2811
Share register
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
PERTH WA 6000
Phone: 1300 557 010
Auditor
William Buck
Level 20, 181 William Street
MELBOURNE VIC 3000
Stock exchange listing
The GO2 People Ltd shares are listed on the Australian Securities Exchange (ASX
code: GO2)
Website
www.thego2people.com.au
Corporate Governance Statement
In accordance with ASX Listing Rule 4.10.3, the Company’s Corporate Governance
Statement can be found on its website at https://thego2people.com.au/investor-
centre/.
The GO2 People Ltd
Directors' report
30 June 2022
2
The Directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of The GO2 People Ltd (referred to hereafter as the 'Company' or 'parent entity') and the entities it
controlled at the end of, or during, the year ended 30 June 2022 ('FY22').
Directors and Secretaries
The following persons were Directors of The Go2 People Ltd during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Darren Cooper
Independent Non-Executive Chairman
John Anthony Manning
Non-Executive Director (appointed 22 November 2021)
Shawn Murphy
Managing Director (appointed 27 July 2022)
Robert Stockdale
Non-Executive Director (resigned 1 May 2022)
Tony Fitzpatrick
Non-Executive Director (resigned 23 May 2022)
Susan Hansen
Non-Executive Director (appointed 22 November 2021 and
resigned 27 July 2022)
Sophie Ray
Non-Executive Director (appointed 22 November 2021 and
resigned 27 July 2022)
Albilio "Billy" Ferreira
Managing Director (resigned 31 August 2021)
Paul Goldfinch
Non-Executive Director (resigned 31 August 2021)
Suzie Foreman was appointed on 15 October 2021 as Company Secretary of The GO2 People Ltd, following the resignation
of Peter Torre (31 October 2021).
Principal activities
The principal activities of the Group during the reporting period, were the provision of recruitment and training services.
The Group’s Recruitment division provides tailored workforce solutions to a range of industries with a client base that includes
a number of national and multi-national blue-chip organisations across the construction, mining and industrial sectors.
The Group’s Training Division is a nationally Registered Training Organisation (RTO 40927), delivering workplace training
and education courses.
The Skill Hire business delivers a full suite of blue-collar employment services via its registered training organisation and its
apprenticeship and traineeship recruitment and labour hire divisions. Skill Hire delivers both Government funded and fee-
for-service workplace training and education in the form of pre-employment programs, traineeships and apprenticeships, and
fee-for-service recruitment and labour hire services to a large client base in Western Australia and South Australia
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the Group after providing for income tax amounted to $5,453,000 (30 June 2021: $2,688,000).
Full year
Full year
to 30 June
2022
to 30 June
2021
$'000
$'000
Loss after tax for the year
(5,453)
(2,689)
Add back:
-
-
Depreciation and finance costs
1,994
475
Earnings before income tax, depreciation and amortisation (EBITDA)
(3,459)
(2,214)
Profit from associates – noncore business
(21)
(16)
Provision for historical superannuation guarantee audit
2,689
863
One-off bad debt provisions
338
227
Acquisition costs
-
165
Normalised EBITDA
(453)
(975)
The GO2 People Ltd
Directors' report
30 June 2022
3
Revenue has increased across the group with a focus on higher gross margin activities. FY22 revenue totalled $73,617,000
compared to $32,549,000 for FY21. Recruitment income contributed $46,059,000 for FY22, up from $26,783,000 in the prior
year. Job ready income increased to $7,999,000 from $712,000 in the prior year. Training income increased to $4,656,000
from $945,000 in the prior year. Apprentice income increased 14 fold from revenues of $1,055,000 in the prior year to
$14,698,000 in FY22. The main driver for the increase in revenue were the acquisitions of Hunter Executive Search
Consultants Pty Ltd in March 2021 and Skill Hire Australia Pty Ltd in May 2021. The gross margin of the Group improved
from 14.8% of sales in FY21 to 27.9% in FY22. This trend is expected to continue with the focus on more profitable training
services.
Cashflows
Total cash at bank increased by $1,264,000 for the year, mainly due to the classification of a $5,000,000 term deposit from
financial assets at amortised cost to cash and cash equivalents. Operational cashflows were utilised to pay down the working
capital facility with Scottish Pacific (BFS) Pty Ltd (“Scottish Pacific”). The facility with Scottish Pacific is used to provide
ongoing working capital support to the Group, with significant payroll and on-costs being paid weekly, whilst debtor collections
average 35 days. It is expected that as the debtor book grows in FY23 there will be an increase in the utilisation of this
working capital facility. Under the terms of the facility the debts are assigned (not sold) to Scottish Pacific, and as such the
facility is deemed a financing activity for the purposes of the cashflow statement.
During the year the Company lodged a number of superannuation guarantee statements with the Australian Taxation Office
(ATO) on behalf of GO2 subsidiary entities for periods from 2015 where employee superannuation was paid, but outside of
the statutory timeframes. The total amount of the superannuation guarantee charge (SGC) liabilities owing is $3.375 million.
The total expensed on these charges for the FY22 period amounted to $2,689,000, and the Group has provided for the SGC
liabilities in full.
The Group continues to negotiate with the ATO, with the assistance of specialist consultants, to access a payment plan to
discharge these liabilities over time.
The Group has recently implemented changes in both management and internal processes to ensure that all current and
future superannuation payments comply with the relevant legislation.
Significant changes in the state of affairs
On 29 September 2021 the Company issued 35,758,904 ordinary shares for full settlement of the deferred consideration of
$1,207,000, relating to the acquisition of Hunter Executive Search Consultants. There were no other significant changes in
the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
Mrs Sophie Ray and Mrs Susan Hansen resigned as Non-Executive Directors effective 27 July 2022. Mr Shawn Murphy
assumed the position of Managing Director on the same day.
On 30 August 2022 the Group entered into a Deed of Variation with the Skill Hire vendors to extend the maturity date of the
deferred consideration to 30 November 2023.
On 2 September 2022 the Group received ATO approval for the Skill Hire Subsidiary entity’s FY21 Income Tax liability of
$1.53 million, with payments over 24 months subject to a General Interest Charge.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
Likely developments and expected results of operations
Information on likely developments in the operations of the Group and the expected results of operations have not been
included in this report because the Directors believe it would be likely to result in unreasonable prejudice to the Group.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law. Despite
this the Group has established procedures to assess and monitor compliance with any applicable environmental legislation
The GO2 People Ltd
Directors' report
30 June 2022
4
Information on Directors
Name:
Darren Cooper
Title:
Independent Non-Executive Chairman
Qualifications:
Bachelor of Business, a Master of Applied Finance and a graduate of the Australian
Institute of Company Directors.
Experience and expertise:
Darren Cooper spent in excess of 20 years with various companies in management
and senior executive roles and holds a number of Board and Strategic Advisory roles
across a range of industries including property, construction, labour hire, professional
services and telecommunications.
Other current directorships:
He is currently Board Chair of Spectur Ltd (ASX:SP3) Non-Executive Director of
Netccentric Ltd (ASX:NCL) and Chair of Development WA.
Former directorships (last 3 years): nil
Interests in shares:
3,250,000
Name:
Shawn Murphy (Appointed 27 July 2022)
Title:
Managing Director
Experience and expertise:
Shawn has been the Chief Executive Officer of Skill Hire since July 2020 and
subsequently GO2, following the entity’s acquisition in 2021.
Shawn has worked in successful start-up and scale-up companies across the health,
medical and human resources sectors. Shawn has held executive roles for companies
such as Sonic Healthcare, Covermore Insurance and Tecside Group in both Perth and
Sydney.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Interests in shares:
12,130,297
(5,881,149 of these Shares are subject to voluntary escrow to 31 May 2023)
Name:
John Manning (Appointed 22 November 2021)
Title:
Non-Executive Director
Qualifications:
John holds a Bachelor of Business, is a member of the Certified Practicing Accountants
and a graduate of the Australian Institute of Company Directors.
Experience and expertise:
John’s career has encompassed experience in key executive roles including as CFO
and CEO, Board positions, and as a strategic and board advisor. These have covered
a diverse range of industries, including employment and training, operating across
small to medium enterprise, private ownership, community not for profit and publicly
listed sectors. His experience spans across start-ups, business improvement, growth
and development, and exit.
John’s
business
and
financial
expertise
comprises
business
transitions,
mergers/acquisitions, commercial development and strategy and delivery, with a clear
focus on sustainable growth and value creation.
John currently runs his own private advice business assisting both emerging and
established enterprises and sits on a number of Boards. These have involved areas in
higher education, financial services, construction and children/youth and family
services.
Other current directorships:
Nil
Former directorships (last 3 years): Nil
Interests in shares:
Nil
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
The GO2 People Ltd
Directors' report
30 June 2022
5
Company secretary
Suzie Foreman - Company Secretary (appointed 15 October 2021)
Suzie is an experienced Chief Financial Officer and Company Secretary with a demonstrated history of working with a wide
range of businesses from start-up enterprises to ASX top 300 corporates.
Suzie has worked with senior management and boards to advise on governance, enterprise risk management, audit and
corporate compliance, company secretarial, and financial reporting responsibilities. Suzie has been involved in the listing of
over 15 entities on the Australian Securities Exchange over the past 20 years and involved in capital raisings and M&A
transactions exceeding $300 million in total.
Suzie has held senior management roles across a range of businesses including industrial, mining production and public
practice. Suzie is the Company Secretary of ASX listed entities NickelSearch Limited, (ASX:NIS), Spectur Limited (ASX:SP3)
and Swift Networks Group Limited (ASX:SW1).
Suzie holds a Batchelor of Business, a Certificate of Applied Corporate Governance and Risk Management, is a Chartered
Accountant, and a Governance Institute Fellow member.
Meetings of Directors
The number of meetings of the Company's Board of Directors ('the Board') held during the year ended 30 June 2022, and
the number of meetings attended by each Director were:
Director meetings
Remuneration committee
meetings
Audit and risk committee
meetings
Attended
Held
Attended
Held
Attended
Held
Darren Cooper
11
11
1
1
3
3
John Manning
8
8
2
2
1
1
Sophie Ray
8
8
2
2
-
-
Susan Hansen
8
8
-
-
1
1
Tony Fitzpatrick
10
10
2
2
3
3
Robert Stockdale
9
9
2
2
1
1
Abilio “Billy” Ferreira
2
2
-
-
1
1
Paul Goldfinch
2
2
1
1
-
-
In addition to the above meetings, the Board executed 2 circular resolutions during the year.
Held: represents the number of meetings held during the time the Director held office.
Remuneration report (audited)
The Remuneration Report (Report) details the Key Management Personnel (KMP) remuneration arrangements for the Group,
in accordance with the requirements of the Corporations Act 2001 and its Regulations.
KMP are those persons having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including all Directors.
For the purposes of this Report, KMP of the Group are defined as those persons having authority and responsibility for
planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether
executive or otherwise) of the Parent Company and include Executive and Non-Executive Directors.
Unless otherwise indicated, the following individuals were KMP for the entire financial year:
The GO2 People Ltd
Directors' report
30 June 2022
6
Name
Position held
Directors
Darren Cooper
Independent Non-Executive Chairman
John Manning (appointed 22 November 2021)
Non-Executive Director
Shawn Murphy (appointed 27 July 2022)
Managing Director
Former Directors
Paul Goldfinch (resigned 31 August 2021)
Executive Director
Abilio “Billy” Ferreira (resigned 31 August 2021)
Managing Director
Robert Stockdale (resigned 1 May 2022)
Non-Executive Director
Tony Fitzpatrick (resigned 23 May 2022)
Non-Executive Director
Susan Hansen (appointed 22 November 2021 and resigned
27 July 2022)
Non-Executive Director
Sophie Ray (appointed 22 November 2021 and resigned 27
July 2022)
Non-Executive Director
KMP
Danny Warren (resigned 14 September 2021)
Chief Financial Officer of Skill Hire Australia Pty Ltd
Steven Richards (appointed 30 March 2022)
Group Chief Financial Officer
Ross Lovell (resigned 4 September 2021)
EGM Recruitment
The Remuneration Report is set out under the following main headings:
●
Principles used to determine the nature and amount of remuneration
●
Details of remuneration
●
Service agreements
●
Share-based compensation
●
Additional information
●
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure reward for performance is competitive and appropriate
for the results delivered. The framework aligns executive reward with the achievement of strategic objectives and the creation
of value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board
of Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance
practices:
●
competitiveness and reasonableness
●
acceptability to shareholders
●
performance linkage / alignment of executive compensation
●
transparency
The Group formed a Nomination and Remuneration Committee during the year, who was responsible for determining and
reviewing remuneration arrangements for its Directors and executives. The performance of the Group depends on the quality
of its Directors and executives. The remuneration philosophy is to attract, motivate and retain high performance and high-
quality personnel.
The Board has structured an executive remuneration framework that is market competitive and complementary to the reward
strategy of the Group.
The reward framework is designed to align executive reward to shareholders' interests. The Board have considered that it
should seek to enhance shareholders' interests by:
●
having economic profit (EBITDA) as a core component of plan design
●
focusing on sustained growth in shareholder wealth, consisting of growth in the share price, and delivering constant or
increasing return on assets as well as focusing the executive on key non-financial drivers of value; and
●
attracting and retaining high calibre executives
Additionally, the reward framework should seek to enhance executives' interests by:
●
rewarding capability and experience;
●
reflecting competitive reward for contribution to growth in shareholder wealth; and
●
providing a clear structure for earning rewards.
The GO2 People Ltd
Directors' report
30 June 2022
7
In accordance with best practice corporate governance, the structure of non-executive Director and executive Director
remuneration is separate.
Non-executive Directors remuneration
Fees and payments to NED’s reflect the demands and responsibilities of their role. NED’s receive a fixed remuneration of
base fees, plus statutory superannuation. These fees cover the board activities, and membership of any relevant committees
are paid at a member rate per committee. In addition to these fees, NED’s are entitled to reimbursement of reasonable travel,
accommodation and other expenses incurred in attending meetings of the Board, committee or shareholder meetings whilst
engaged by the Company. NED’s do not earn retirement benefits other than superannuation and are not entitled to any
compensation on termination of their directorships.
The current Board and Committee fee structure for NED’s is as per the table below:
Board Fees
Audit and Risk Committee
Remuneration and
Nomination Committee
Chair
Member
Chair
Member
Chair
Member
Fees
75,000
55,000
22,000
16,000
18,000
12,000
The Board agreed to reduce the committee fees paid by 50% for the FY22, in line with Company-wide cash conservation
strategies and this has continued to date.
Non-executive Directors' fees and payments are reviewed annually by the Remuneration and Nomination Committee. The
Committee may, from time to time, receive advice from independent remuneration consultants to ensure non-executive
Directors' fees and payments are appropriate and in line with the market. The Chair fees are determined independently to
the fees of other non-executive Directors based on comparative roles in the external market.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The Company’s Constitution provides for the initial aggregate remunerations to be set at a maximum of $500,000.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework has three components:
●
base pay and non-monetary benefits
●
other remuneration such as superannuation and long service leave
●
a variable component of executive and KMP target remuneration mix
The combination of these comprises the executive's total remuneration.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
Remuneration Committee based on individual and business unit performance, the overall performance of the Group and
comparable market remunerations.
Executives may receive their fixed remuneration in the form of cash or other fringe benefits (for example motor vehicle
benefits) where it does not create any additional costs to the Group and provides additional value to the executive.
Variable components of executive remuneration are set to demanding levels of expected performance that have a clear
linkage to an executive’s remuneration. Rewards are based upon achievement of targets aligned to the Company’s business
plans and longer-term strategy. Variable components (short and long term) are driven by challenging targets focused on
measures of financial performance. A proportion of the executive’s remuneration is “at risk.”
For FY22 the Company did not operate a variable incentive plan, however the Remuneration and Nomination Committee
have worked with management to formulate an incentive plan for FY23. The incentive plan will be in the form of a long term
equity incentive plan, operating via the grant of performance rights which vest on the achievement of performance hurdles
applied to reflect stretched achievement against the Company’s long-term strategic financial goals.
The GO2 People Ltd
Directors' report
30 June 2022
8
Group performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Group. A portion of cash bonus and incentive
payments are dependent on defined earnings per share targets being met. The remaining portion of the cash bonus and
incentive payments are at the discretion of the Board.
Voting and comments made at the company's 18 November 2021 Annual General Meeting ('AGM')
At the 18 November 2021 AGM, 99.94% of the votes received supported the adoption of the remuneration report for the year
ended 30 June 2021. The company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
Details of the remuneration of KMP of the Group are set out in the following tables.
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash salary
Cash
Non-
Super-
Equity-
and fees
bonus
monetary
annuation
settled
Total
2022
$
$
$
$
$
$
Non-Executive Directors:
Darren Cooper
81,865
-
-
8,187
-
90,052
Robert Stockdale(i)
47,140
-
-
4,713
-
51,853
Tony Fitzpatrick(ii)
56,980
-
-
4,672
-
61,652
Paul Goldfinch(iii)
24,485
-
-
-
-
24,485
Susan Hansen (iv)
39,065
-
-
3,906
-
42,971
Sophie Ray (iv)
37,384
-
-
3,738
-
41,122
John Manning (v)
45,663
-
-
-
-
45,663
Executive Directors:
Abilio Ferreira(iii)
122,070
-
-
8,452
-
130,522
Other Key Management
Personnel:
Shawn Murphy(vi)
290,923
-
11,538
27,937
-
330,398
Ross Lovell(vii)
122,589
-
-
6,635
-
129,224
Danny Warren(viii)
51,087
-
-
3,863
-
54,950
Steven Richards (ix)
58,846
-
3,923
5,492
-
68,261
978,097
-
15,461
77,595
-
1,071,153
(i)
Robert Stockdale resigned on 1 May 2022.
(ii)
Tony Fitzpatrick resigned on 23 May 2022.
(iii)
Abilio "Billy" Ferriera and Paul Goldfinch resigned effective 31 August 2021.
(iii)
Paul Goldfinch resigned on 31 August 2021.
(iv)
Susan Hansen & Sophie Ray were appointed on 22 November 2021 and resigned effective 27 July 2022.
(v)
John Manning was appointed 22 November 2021.
(vi)
Shawn Murphy was appointed Managing Director on 27 July 2022
(vii)
Ross Lovell resigned on 4 September 2021
(viii)
Danny Warren resigned 14 September 2021.
(ix)
Steven Richards was appointed on 30 March 2022
(x)
Short term non-monetary benefits relate to car allowances.
The GO2 People Ltd
Directors' report
30 June 2022
9
Short-term benefits
Post-
employment
benefits
Share-based
payments
Cash salary
Cash
Non-
Super-
Equity-
and fees
bonus
monetary
annuation
settled
Total
2021
$
$
$
$
$
$
Non-Executive Directors:
Darren Cooper
75,000
-
-
7,125
-
82,125
Robert Stockdale(i)
5,019
-
-
-
-
5,019
Tony Fitzpatrick(i)
5,019
-
-
-
-
5,019
Executive Directors:
Abilio Ferreira(ii)
342,043
-
(1,062)
31,326
-
372,307
Paul Goldfinch(ii)
223,459
-
-
-
-
223,459
Other Key Management
Personnel:
Ross Lovell(iii)
230,000
-
15,608
21,850
-
267,458
Matthew Thomson(iv)
184,252
-
(18,747)
16,461
-
181,966
Peter Torre (v)
39,000
-
-
-
-
39,000
Shawn Murphy(vi)
18,461
-
1,350
1,754
-
21,565
Danny Warren(vii)
12,425
-
4,340
1,175
-
17,940
1,134,678
-
1,489
79,691
-
1,215,858
(i)
Robert Stockdale and Tony Fitzpatrick were appointed 1 June 2021.
(ii)
Abilio "Billy" Ferriera and Paul Goldfinch resigned effective 31 August 2021. Payments to Paul Goldfinch were made
to PPG Consulting Pty Ltd, a company that Paul Goldfinch is a director of, for director fees ($65,728) and consulting
fees ($157,731).
(iii)
Ross Lovell ended employment effective 4 September 2021.
(iv)
Matthew Thomson resigned effective 7 May 2021.
(v)
Payments for corporate secretarial fees to Peter Torre were made to Torre Corporate, a corporate advisory firm of
which Peter Torre is the principal.
(vi)
Shawn Murphy was employed by Skill Hire Australia Pty Ltd which was acquired by the Group on 31 May 2021.
(vii)
Danny Warren resigned effective 14 September 2021
(viii)
Short term non-monetary benefits relate to provision for short term Annual Leave benefit as no person has qualified
for any long service leave benefits.
The GO2 People Ltd
Directors' report
30 June 2022
10
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Fixed remuneration
At risk - STI
At risk - LTI
2022
2021
2022
2021
2022
2021
100%
100%
-
-
-
-
100%
100%
-
-
-
-
100%
100%
-
-
-
-
100%
-
-
-
-
-
100%
-
-
-
-
-
100%
-
-
-
-
-
100%
100%
-
-
-
-
100%
100%
-
-
-
-
100%
100%
-
-
-
-
100%
100%
-
-
-
-
100%
100%
-
-
-
-
Name
Non-Executive Directors:
Darren Cooper
Robert Stockdale
Tony Fitzpatrick
John Manning
Susan Hansen
Sophie Ray
Executive Directors:
Abilio Ferreira
Paul Goldfinch
Other Key Management
Personnel:
Shawn Murphy
Ross Lovell
Danny Warren
Steven Richards
100%
-
-
-
-
-
Service agreements
Remuneration and other terms of employment for KMP are formalised in service agreements. Details of these agreements
are as follows:
Name:
Darren Cooper
Title:
Independent Non-Executive Chairman
Agreement commenced:
1 August 2017
Term of agreement:
Subject to the Company's constitutional rules on retirement and re-election of Directors.
Details:
Total remuneration of $82,500 (inclusive of superannuation), plus any committee fees.
Name:
John Manning
Title:
Independent Non-Executive Director
Agreement commenced:
22 November 2021
Term of agreement:
Subject to the Company's constitutional rules on retirement and re-election of Directors.
Details:
Total remuneration of $79,560 per annum (inclusive of superannuation).
Name:
Steven Richards
Title:
Chief Financial Officer
Agreement commenced:
30 March 2022
Term of agreement:
No fixed term
Details:
Service agreement subject to normal commercial conditions, three months’ notice
required to terminate. Total remuneration is $247,050 per annum inclusive of
superannuation and car allowance.
Name:
Shawn Murphy
Title:
Managing Director
Agreement commenced:
27 July 2022
Term of agreement:
No fixed term.
Details:
Service agreement subject to normal commercial conditions, three months’ notice
required to terminate. Total remuneration is $280,000 per annum inclusive of
superannuation and car allowance. An additional fee of $55,000 is payable as Director
fees for services to the Board.
The GO2 People Ltd
Directors' report
30 June 2022
11
Name:
Susan Hansen
Title:
Independent Non-Executive Director (Resigned 27 July 2022)
Agreement commenced:
22 November 2021
Term of agreement:
Subject to the Company's constitutional rules on retirement and re-election of
Directors.
Details:
Total remuneration of $72,930 per annum (inclusive of superannuation).
Name:
Sophie Ray
Title:
Independent Non-Executive Director (Resigned 27 July 2022)
Agreement Commenced:
22 November 2021
Terms of Agreement:
Subject to the Company's constitutional rules on retirement and re-election of
Directors.
Detail:
Total remuneration of $76,245 per annum (inclusive of superannuation).
KMP have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to Directors and other KMP as part of compensation during the year ended 30 June 2022.
Options
There were no options over ordinary shares granted to or vested by Directors and other KMP as part of compensation during
the year ended 30 June 2022.
Performance rights
There were no performance rights over ordinary shares issued to Directors and other KMP as part of compensation that
were outstanding as at 30 June 2022.
Additional information
The earnings of the Group for the five years to 30 June 2022 are summarised below:
2022
2021
2020
2019
2018
$'000
$'000
$'000
$'000
$'000
Sales revenue
73,617
29,683
29,084
46,622
45,075
EBITDA
(3,409)
(1,757)
(679)
(2,023)
(976)
EBIT
(5,403)
(1,930)
(1,509)
(2,496)
(1,257)
Loss after income tax
(5,453)
(2,689)
(1,851)
(3,588)
(1,345)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
2022
2021
2020
2019
2018
Share price at financial year end ($)
0.01
0.03
0.03
0.08
0.12
Basic earnings per share (cents per share)
(1.37)
(1.57)
(1.43)
(3.00)
(1.40)
Diluted earnings per share (cents per share)
(1.37)
(1.57)
(1.43)
(3.00)
(1.40)
The GO2 People Ltd
Directors' report
30 June 2022
12
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each Director and other members of key management
personnel of the Group, including their personally related parties, is set out below:
Balance at
Received
Disposals/
Balance at
the start of
as part of
resignation/
the end of
the year
remuneration
Additions
other
the year
Ordinary shares
Darren Cooper *
750,000
-
-
-
750,000
Darren Cooper - Cooper Retirement Pty Ltd
(Cooper Retirement Fund)
1,500,000
-
-
-
1,500,000
Abilio Ferreira
27,887,976
-
-
(27,887,976)
-
Ross Lovell
400,000
-
-
(400,000)
-
Ross Lovell - Ross & Nicola Lovell
134,554
-
-
(134,554)
-
Paul Goldfinch
27,527,730
-
-
(27,527,730)
-
Robert Stockdale - Asstock Pty Ltd ATF The
Stock Trust
31,591,871
-
-
(31,591,871)
-
Robert Stockdale - R&L Stockdale Superfund
16,687,500
-
-
(16,687,500)
-
Tony Fitzpatrick - Shoreside Holdings Pty Ltd
ATF The Fitzpatrick Family Trust
48,279,371
-
-
(48,279,371)
-
Shawn Murphy **
11,762,297
-
-
-
11,762,297
166,521,299
-
- (152,509,002)
14,012,297
*
On 2 August 2022 Darren Cooper acquired 500,000 directly held shares.
**
Shares held by Shawn Murphy are in escrow until 31 May 2023 (5,881,149).
Option holding
The number of options over ordinary shares in the Company held during the financial year by each Director and other
members of key management personnel of the Group, including their personally related parties, is set out below:
Balance at
Expired/
Balance at
the start of
forfeited/
the end of
the year
Granted
Exercised
other
the year
Options over ordinary shares
Darren Cooper
750,000
-
-
(750,000)
-
750,000
-
-
(750,000)
-
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of The GO2 People Ltd under option outstanding at the date of this report.
Shares under performance rights
There were no unissued ordinary shares of The GO2 People Ltd under performance rights outstanding at the date of this
report.
Shares issued on the exercise of options
There were no ordinary shares of The GO2 People Ltd issued on the exercise of options during the year ended 30 June
2022 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the Directors and executives of the Company for costs incurred, in their capacity as a Director
or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the Directors and executives of the
Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liabilities insured and the amount of the premium.
The GO2 People Ltd
Directors' report
30 June 2022
13
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the Company
or any related entity.
Proceedings on behalf of the Company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf
of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking responsibility
on behalf of the Company for all or part of those proceedings.
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to 'rounding-off'. Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this Directors' report.
Auditor
The auditor continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of Directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Darren Cooper
Chairman
29 September 2022
Level 20, 181 William Street, Melbourne VIC 3000
+61 3 9824 8555
vic.info@williambuck.com
williambuck.com.au
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF THE GO2 PEOPLE LTD
I declare that, to the best of my knowledge and belief, during the year ended 30 June 2022 there have
been:
— no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the audit.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
A. A. Finnis
Director
Melbourne, 29 September 2022
The GO2 People Ltd
Contents
30 June 2022
15
Consolidated statement of profit or loss and other comprehensive income
16
Consolidated statement of financial position
17
Consolidated statement of changes in equity
18
Consolidated statement of cash flows
19
Notes to the consolidated financial statements
20
Directors' declaration
51
Independent auditor's report to the members of The GO2 People Ltd
52
Shareholder information
56
General information
The financial statements cover The GO2 People Ltd as a Group consisting of The GO2 People Ltd and the entities it
controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which is The GO2
People Ltd's functional and presentation currency.
The GO2 People Ltd is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business are:
Registered office
Principal place of business
Level 2, 182 St Georges Terrace, Perth 6000
3/271 Berkshire Road, Forrestfield WA 6058
Phone: (08) 6151 9200
Phone: (08) 9376 2800
A description of the nature of the Group's operations and its principal activities are included in the Directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of Directors, on 29 September 2022. The
Directors have the power to amend and reissue the financial statements.
The GO2 People Ltd
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2022
Consolidated
Note
2022
2021
$'000
$'000
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
Revenue
5
73,716
29,684
Cost of sales
(53,089)
(25,281)
Gross profit
20,627
4,403
Share of profits of associates accounted for using the equity method
21
16
Other income
6
151
706
Expenses
Employee benefits expense
7
(15,328)
(3,745)
Depreciation and amortisation expense
(1,994)
(475)
Selling and marketing expenses
(583)
(74)
Corporate and administration expenses
8
(7,269)
(2,760)
Loss before finance costs, movement in fair value of contingent consideration
and income tax expense
(4,375)
(1,929)
Finance costs
9
(1,078)
(302)
Movement in fair value of contingent consideration
-
(457)
Loss before income tax expense
(5,453)
(2,688)
Income tax expense
-
-
Loss after income tax expense for the year attributable to the owners of The
GO2 People Ltd
(5,453)
(2,688)
Other comprehensive income for the year, net of tax
-
-
Total comprehensive loss for the year attributable to the owners of The GO2
People Ltd
(5,453)
(2,688)
Cents
Cents
Basic loss per share
23
(1.37)
(1.57)
Diluted loss per share
23
(1.37)
(1.57)
The GO2 People Ltd
Consolidated statement of financial position
As at 30 June 2022
Consolidated
Note
2022
2021
$'000
$'000
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
17
Assets
Current assets
Cash and cash equivalents
2,510
1,246
Trade and other receivables
10
10,046
8,414
Term deposits
19
5,131
Prepayments and deposits
346
238
Total current assets
12,921
15,029
Non-current assets
Investments accounted for using the equity method
142
122
Plant and equipment
11
1,196
1,302
Right-of-use assets
12
3,552
1,937
Intangibles and goodwill
13
11,864
11,954
Loan to associates
56
54
Total non-current assets
16,810
15,369
Total assets
29,731
30,398
Liabilities
Current liabilities
Trade and other payables
14
9,450
8,541
Borrowings
16
2,622
3,083
Lease liabilities
15
802
1,067
Income tax payable
1,824
1,508
Employee benefits
17
1,141
1,038
Contingent consideration
-
1,207
ATO Payables
20
4,423
1,048
Deferred consideration
25
3,533
-
Contract liabilities
18
624
835
Total current liabilities
24,419
18,327
Non-current liabilities
Lease liabilities
19
2,821
939
Employee benefits
24
47
142
Deferred consideration
25
-
3,250
ATO Payables
20
2,358
3,407
Total non-current liabilities
5,226
7,738
Total liabilities
29,645
26,065
Net assets
86
4,333
Equity
Issued capital
21
24,602
23,395
Reserves
22
-
20
Accumulated losses
(24,516)
(19,082)
Total equity
86
4,333
The GO2 People Ltd
Consolidated statement of changes in equity
For the year ended 30 June 2022
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
18
Issued
Accumulated
Total equity
capital
Reserves
losses
Consolidated
$'000
$'000
$'000
$'000
Balance at 1 July 2020
16,165
1,689
(17,990)
(136)
Loss after income tax expense for the year
-
-
(2,688)
(2,688)
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive loss for the year
-
-
(2,688)
(2,688)
Transactions with owners in their capacity as owners:
Exercise of performance rights (net of share issue cost)
73
(73)
-
-
Exercise of options (net of share issue cost)
126
-
-
126
Shares issued for acquisition of Hunter (net of share issue
cost)
895
-
-
895
Shares issued for acquisition of Skill Hire (net of share issue
cost)
6,136
-
-
6,136
Transfer of expired options from reserve to retained earnings
-
(1,596)
1,596
-
Balance at 30 June 2021
23,395
20
(19,082)
4,333
Issued
Accumulated
Total equity
capital
Reserves
losses
Consolidated
$'000
$'000
$'000
$'000
Balance at 1 July 2021
23,395
20
(19,082)
4,333
Loss after income tax expense for the year
-
-
(5,453)
(5,453)
Other comprehensive income for the year, net of tax
-
-
-
-
Total comprehensive loss for the year
-
-
(5,453)
(5,453)
Transactions with owners in their capacity as owners:
Shares issued for acquisition of Skill Hire (net of share issue
cost)
1,206
-
-
1,206
Transfer of expired options
-
(20)
20
-
Balance at 30 June 2022
24,601
-
(24,515)
86
The GO2 People Ltd
Consolidated statement of cash flows
For the year ended 30 June 2022
Consolidated
Note
2022
2021
$'000
$'000
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
19
Cash flows from operating activities
Receipts from customers (inclusive of GST)
79,985
32,549
Payments to suppliers and employees (inclusive of GST)
(80,180)
(33,197)
Finance cost paid
(517)
(280)
Proceeds from grant income
-
641
(712)
(287)
Interest received
15
-
Income taxes paid
(110)
-
Net cash used in operating activities
29
(807)
(287)
Cash flows from investing activities
Payments for plant and equipment
11
(258)
(59)
Proceeds from plant and equipment
112
-
Granting of loan to associate
(1)
(6)
Cash acquired on acquisition - Hunter
-
132
Net cash acquired on acquisition - Skill Hire
-
615
Transfer of financial asset at amortised cost (Term deposit)
5,112
-
Net cash from investing activities
4,965
682
Cash flows from financing activities
Proceeds from exercise of options
21
-
133
Share issue transaction costs
-
(34)
Repayment of borrowings
(3,862)
(55)
Repayment of lease liabilities
(1,297)
(467)
Proceeds from borrowings
2,265
-
Net cash used in financing activities
(2,894)
(423)
Net (decrease)/increase in cash and cash equivalents
1,264
(28)
Cash and cash equivalents at the beginning of the financial year
1,246
1,274
Cash and cash equivalents at the end of the financial year
2,510
1,246
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
20
1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies
have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Going concern
During the year, the Group generated a loss after tax of $5,453,000 (30 June 2021: $2,688,000), and as at 30 June 2022 is
reporting a net working capital deficiency of $11,498,000 (30 June 2021: $3,298,000), has incurred net cash outflows from
operations of $807,000 (30 June 2021 outflow of $287,000). As at 30 June 2022, the Group had $2,510,000 in cash (30 June
2021: $1,246,000) and consolidated net asset of $86,000 (30 June 2021: net asset of $4,333,000).
These factors indicate a material uncertainty exists which may cast significant doubt as to whether the consolidated entity
will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal
course of business and at the amounts stated in the financial report.
The Group has prepared the financial statements for the financial year ended 30 June 2022 on a going concern basis, which
assumes continuity of current business activities and the realisation of assets and settlement of liabilities in the ordinary
course of business.
On 29 July 2022 the Group announced as part of its Appendix 4C operations update (“June 2022 Operations Update”),
measures undertaken to increase margins across its Apprenticeship and Recruitment lines of business, whilst reducing
overheads to “right-size” the cost structure.
A combination of charging higher wages, increasing margins and the realised benefits of previously implemented cost
reduction measures are now flowing through, and are all expected to have a positive impact on performance in the year
ahead.
As announced further in the June 2022 Operations Update, the Group continues to negotiate with the ATO, with the
assistance of specialist consultants, to access a series of payment plans to discharge its ATO liabilities over time (which
have been fully provided for in the Group’s financial statements).
The Company has $9,226,000 in ATO liabilities which are not subject to a payment plan and are classified as current in the
financial statements. These liabilities may potentially be repaid over a longer period, subject to the ATO's approval.
The Group has prepared financial forecasts for the twelve months from the date of approval of these financial statements
taking into consideration an estimation of the payment plans mentioned above, as well as its other long term debt
commitments. The Directors have concluded that it is appropriate to prepare the financial statements on a going concern
basis after considering the financial forecasts, and the following:
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
21
●
The Group has access to a debtor finance facility provided by Scottish Pacific with an overall facility limit of $15 million
which is subject to approved sub-limits based upon qualifying debtor invoices at a point in time, (drawn to $1.3 million
with an overall drawing availability of $3.5 million at year end), and undrawn of $2.2 million at 30 June 2022. The Skill
Hire WA Pty Ltd subsidiary also has a $2.025 million Multi Option Facility with Bankwest which includes a $1.025 million
overdraft facility. Total available borrowings undrawn on both ScotPac and Bankwest lending facilities were $3.48 million
at the year end;
●
The Group has access to cash and cash equivalents of $2.51 million at 30 June 2022;
●
Total available funding, after taking into account the debtor finance facility, bank overdraft facility and cash and cash
equivalents mentioned above, is $6 million;
●
The Group’s total available funding of $6 million will provide an estimated four (4) quarters of operational cash flow
cover as at 30 June 2022, as announced in the June 2022 Operations Update;
●
On 30 August 2022 the Group entered into a Deed of Variation with the Skill Hire vendors to extend the maturity date
of the deferred consideration of $3.5 million to 30 November 2023;
●
On 2 September 2022 the Group received ATO approval for the Skill Hire Subsidiary entity’s FY21 Income Tax liability
of $1.53 million, with payments over 24 months; and
●
The Group will be able to access further working capital through an equity raise, if required.
Based on the circumstances described above, the financial statements are prepared on the assumption that the entity is a
going concern.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ("AASB") and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ("IASB").
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 2.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 31.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of The GO2 People Ltd
("Company" or "parent entity") as at 30 June 2022 and the results of all subsidiaries for the year then ended. The GO2 People
Ltd and its subsidiaries together are referred to in these financial statements as the "Group".
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by
the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
22
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-controlling
interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group recognises
the fair value of the consideration received and the fair value of any investment retained together with any gain or loss in
profit or loss.
Operating segments
Operating segments are presented using the "management approach", where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ("CODM"). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
Revenue recognition
The Group recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange
for transferring goods or services to a customer. For each contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the separate performance
obligations on the basis of the relative stand-alone selling price of each distinct good or service to be delivered; and
recognises revenue when or as each performance obligation is satisfied in a manner that depicts the transfer to the customer
of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such estimates
are determined using either the ‘expected value’ or ‘most likely amount’ method. The measurement of variable consideration
is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly probable that a
significant reversal in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts received that are subject
to the constraining principle are recognised as a refund liability.
Rendering of services
Revenue from the provision of services is recognised in the accounting period in which the services are rendered. For fixed
price contracts, revenue is recognised based on actual service provided to the end of the reporting period as a proportion of
the total services to be provided, because the customer received and uses the benefits simultaneously. This is determined
based on the actual labour hours spent relative to the total expected labour hours.
If services rendered by the Group exceed the payment, a contract asset is recognised. If the payment exceeds the services
rendered, a contract liability is recognised. If a contract includes an hourly fee charge out model, revenue is recognised in
the amount to which the Group has a right to invoice. Customers are invoiced on a monthly basis and consideration is payable
when invoiced.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Income tax
The income tax expense or benefit for the period is the tax payable on that period’s taxable income based on the applicable
income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to temporary
differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
23
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when the
assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted, except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or 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 nor
taxable profits; or
●
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and the
timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the foreseeable
future.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred tax
assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for the
carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is probable
that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets against
current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable authority on
either the same taxable entity or different taxable entities which intend to settle simultaneously.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the Group's
normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months after the
reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle a liability
for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities 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.
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any allowance for expected credit losses. Trade receivables are generally due for settlement within 30
days.
The Group has applied the simplified approach to measuring expected credit losses, which uses a lifetime expected loss
allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
24
Non-current assets or disposal groups classified as held for sale
Non-current assets and assets of disposal groups are classified as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through continued use. They are measured at the lower of their carrying
amount and fair value less costs of disposal. For non-current assets or assets of disposal groups to be classified as held for
sale, they must be available for immediate sale in their present condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent write down of the non-current assets and assets of disposal
groups to fair value less costs of disposal. A gain is recognised for any subsequent increases in fair value less costs of
disposal of non-current assets and assets of disposal groups, but not in excess of any cumulative impairment loss previously
recognised.
Non-current assets are not depreciated or amortised while they are classified as held for sale. Interest and other expenses
attributable to the liabilities of assets held for sale continue to be recognised,
Non-current assets classified as held for sale and the assets of disposal groups classified as held for sale are presented
separately on the face of the statement of financial position, in current assets. The liabilities of disposal groups classified as
held for sale are presented separately on the face of the statement of financial position, in current liabilities.
Associates
Associates are entities over which the Group has significant influence but not control or joint control. Investments in
associates are accounted for using the equity method. Under the equity method, the share of the profits or losses of the
associate is recognised in profit or loss and the share of the movements in equity is recognised in other comprehensive
income. Investments in associates are carried in the statement of financial position at cost plus post-acquisition changes in
the Group's share of net assets of the associate. Goodwill relating to the associate is included in the carrying amount of the
investment and is neither amortised nor individually tested for impairment. Dividends received or receivable from associates
reduce the carrying amount of the investment.
When the Group's share of losses in an associate equals or exceeds its interest in the associate, including any unsecured
long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on
behalf of the associate.
The Group discontinues the use of the equity method upon the loss of significant influence over the associate and recognises
any retained investment at its fair value. Any difference between the associate's carrying amount, fair value of the retained
investment and proceeds from disposal is recognised in profit or loss.
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of plant and equipment over their
expected useful lives as follows:
Leasehold improvements
3-10 years
Plant and equipment
3-7 years
Motor vehicles
4 years
Office equipment
1.5 - 5 years
Computer equipment
3 years
Minor equipment
3 - 7 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful life of the assets,
whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
25
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in the
cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset, and
restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of the
lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted for
any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with terms
of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss as
incurred.
Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at their fair value at
the date of the acquisition. Intangible assets acquired separately are initially recognised at cost. Indefinite life intangible
assets are not amortised and are subsequently measured at cost less any impairment. Finite life intangible assets are
subsequently measured at cost less amortisation and any impairment. The gains or losses recognised in profit or loss arising
from the derecognition of intangible assets are measured as the difference between net disposal proceeds and the carrying
amount of the intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes in
the expected pattern of consumption or useful life are accounted for prospectively by changing the amortisation method or
period.
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested annually for impairment,
or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less
accumulated impairment losses. Impairment losses on goodwill are taken to profit or loss and are not subsequently reversed.
Brand Assets
Brand assets arises on the acquisition of a business. Brand assets are not amortised. Instead, brand assets are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses. Impairment losses on brand assets are taken to profit or loss and are
not subsequently reversed.
Intellectual property
Significant costs associated with intellectual property are deferred and amortised on a straight-line basis over the period of
their expected benefit, being their finite life of 5-10 years.
Patents and trademarks
Significant costs associated with patents and trademarks are deferred and amortised on a straight-line basis over the period
of their expected benefit, being their finite life of 10 years.
Customer contracts
Customer contracts acquired in a business combination are amortised on a straight-line basis over the period of their
expected benefit, being their finite life of 5 years.
Software
Significant costs associated with software are deferred and amortised on a straight-line basis over the period of their expected
benefit, being their finite life of 5 years.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
26
Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
Trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The amounts
are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease or,
if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts expected
to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend on an index or
a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use asset
is fully written down.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Provisions
Provisions are recognised when the Group has a present (legal or constructive) obligation as a result of a past event, it is
probable the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation. If the time value of
money is material, provisions are discounted using a current pre-tax rate specific to the liability. The increase in the provision
resulting from the passage of time is recognised as a finance cost.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave expected to be
settled wholly within 12 months of the reporting date are measured at the amounts expected to be paid when the liabilities
are settled.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
27
Other long-term employee benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the reporting date are
measured at the present value of expected future payments to be made in respect of services provided by employees up to
the reporting date using the projected unit credit method. Consideration is given to expected future wage and salary levels,
experience of employee departures and periods of service. Expected future payments are discounted using market yields at
the reporting date on high quality corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Share-based payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for the
rendering of services. Cash-settled transactions are awards of cash for the exchange of services, where the amount of cash
is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined using
either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the option,
the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend
yield and the risk free interest rate for the term of the option, together with non-vesting conditions that do not determine
whether the Group receives the services that entitle the employees to receive payment. No account is taken of any other
vesting conditions.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the vesting
period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the best estimate
of the number of awards that are likely to vest and the expired portion of the vesting period. The amount recognised in profit
or loss for the period is the cumulative amount calculated at each reporting date less amounts already recognised in previous
periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying either the
Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions on which the award was
granted. The cumulative charge to profit or loss until settlement of the liability is calculated as follows:
●
during the vesting period, the liability at each reporting date is the fair value of the award at that date multiplied by the
expired portion of the vesting period.
●
from the end of the vesting period until settlement of the award, the liability is the full fair value of the liability at the
reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the cash paid to
settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made. An
additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair value
of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting period,
any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any remaining expense
is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and new award
is treated as if they were a modification.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
28
Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the principal
market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
Issued capital
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,
from the proceeds.
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments
issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest
in the acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value
or at the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit
or loss.
On the acquisition of a business, the Group assesses the financial assets acquired and liabilities assumed for appropriate
classification and designation in accordance with the contractual terms, economic conditions, the Group's operating or
accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Group remeasures its previously held equity interest in the
acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying amount is
recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling interest
in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment in the
acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair value
of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a gain directly
in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the acquirer's
previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period ends
on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
29
Loss per share
Basic loss per share
Basic loss per share is calculated by dividing the profit attributable to the owners of The GO2 People Ltd, excluding any costs
of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the
financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted loss per share
Diluted loss per share adjusts the figures used in the determination of basic loss per share to take into account the after
income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
Goods and Services Tax ("GST") and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part of
the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities
which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Government grants
Government grants relating to costs are deferred and recognised in profit or loss over the period necessary to match them
with the costs that they are intended to compensate.
Rounding of amounts
The Company is of a kind referred to in Corporations Instrument 2016/191, issued by the Australian Securities and
Investments Commission, relating to "rounding-off". Amounts in this report have been rounded off in accordance with that
Corporations Instrument to the nearest thousand dollars, or in certain cases, the nearest dollar.
New and amended standards adopted by the group
The group has applied the following standards and amendments for the first time for their annual reporting period
commencing 1 July 2021:
AASB 2020-4 Amendments to Australian Accounting Standards – Covid-19-Related Rent Concessions [AASB 16]
AASB 2021-3 Amendments to Australian Accounting Standards – Covid-19- Related Rent Concessions beyond 30 June
2021 [AASB 16]
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet mandatory,
have not been early adopted by the Group for the annual reporting period ended 30 June 2022. The Group has not yet
assessed the impact of these new or amended Accounting Standards and Interpretations.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
1. Significant accounting policies (continued)
30
Accounting Standards and Interpretations
Applicable to annual reporting
periods beginning on or after
AASB 2020-1 Amendments to AASs - Classification of Liabilities as Current or Non-
current liabilities as Current or Non-current
1 Jan 2023
AASB 2020 -3 Amendments to AASs - Annual Improvements 2018-2020 and Other
Amendments
1 Jan 2022
AASB 2020-6 Amendments to AASs - Classification of Liabilities as Current or Non-
current liabilities as Current or Non-current – Deferral of Effective Date
1 Jan 2022
AASB 2021-2 Amendments to AASs - Disclosure of Accounting Policies and
Definition of Accounting Estimates
1 Jan 2023
AASB 2021-5 Amendments to AASs - Deferred Tax related to Assets and Liabilities
arising from a Single Transaction
1 Jan 2023
AASB 2014-10 Sale or contribution of Assets between an Investor and its Associate
or Joint Venture
1 Jan 2025
2. Critical 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, estimates and
assumptions on historical experience and on other various factors, including expectations of future events, management
believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will seldom equal
the related actual results. The judgements, estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next financial year are
discussed below.
Allowance for expected credit losses
The allowance for expected credit losses assessment requires a degree of estimation and judgement. It is based on the
lifetime expected credit loss, grouped based on days overdue, and makes assumptions to allocate an overall expected credit
loss rate for each group. These assumptions include recent sales experience, historical collection rates and forward looking
information on macroeconomic factors affecting the ability of customers to settle the receivables.an estimate of future sales.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant
and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations
or some other event. The depreciation and amortisation charge will increase where the useful lives are less than previously
estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written
down.
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill
and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policy stated in
note 1. The recoverable amounts of cash-generating units have been determined based on value-in-use calculations. These
calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and
growth rates of the estimated future cash flows.
Impairment of non-financial assets other than goodwill and other indefinite life intangible assets
The Group assesses impairment of non-financial assets other than goodwill and other indefinite life intangible assets at each
reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If an
impairment trigger exists, the recoverable amount of the asset is determined. This involves fair value less costs of disposal
or value-in-use calculations, which incorporate a number of key estimates and assumptions.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
2. Critical accounting judgements, estimates and assumptions (continued)
31
Income tax
The Group is subject to income taxes in the jurisdictions in which it operates. Significant judgement is required in determining
the provision for income tax. There are many transactions and calculations undertaken during the ordinary course of business
for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based
on the Group's current understanding of the tax law. Where the final tax outcome of these matters is different from the
carrying amounts, such differences will impact the current and deferred tax provisions in the period in which such
determination is made.
Tax losses recognised
Deferred tax assets relating to unused tax losses are recognised only to the extent that it is probable that future taxable profit
will be available against which the benefits of the deferred tax asset can be utilised. As at 30 June 2022 it has been
determined that losses will not be brought to account as it is not probable that they will be recovered in the next 12 months.
Employee benefits provision
As discussed in note 1, the liability for employee benefits expected to be settled more than 12 months from the reporting
date are recognised and measured at the present value of the estimated future cash flows to be made in respect of all
employees at the reporting date. In determining the present value of the liability, estimates of attrition rates and pay increases
through promotion and inflation have been taken into account.
Deferred consideration
The deferred consideration liability is the difference between the total purchase consideration, usually on an acquisition of a
business combination, and the amounts paid or settled up to the reporting date, discounted to net present value. The Group
applies provisional accounting for any business combination. Any reassessment of the liability during the earlier of the
finalisation of the provisional accounting or 12 months from acquisition-date is adjusted for retrospectively as part of the
provisional accounting rules in accordance with AASB 3 'Business Combinations'. Thereafter, at each reporting date, the
deferred consideration liability is reassessed against revised estimates and any increase or decrease in the net present value
of the liability will result in a corresponding gain or loss to profit or loss. The increase in the liability resulting from the passage
of time is recognised as a finance cost.
3. Financial instruments
Financial risk management objectives
The consolidated entity's activities expose it to a variety of financial risks: interest rate risk, credit risk and liquidity risk. The
consolidated entity's overall risk management program focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the financial performance of the consolidated entity. The consolidated entity uses
different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis in the
case of interest rate, other price risks, and ageing analysis for credit risk
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate procedures,
controls and risk limits. Finance identifies, evaluates and hedges financial risks within the Group's operating units. Finance
reports to the Board on a monthly basis.
Market risk
Interest rate risk
The Group’s exposure to interest rate risk, which is the risk that the borrowings will fluctuate as a result of changes in the
market interest rates. Where possible borrowings used for fixed asset purchases will be at a fixed interest rate providing
certainty on future interest payments. The Group’s trade debtor financing facility has an interest rate payable referenced to
the Bank Bill Rate. The Group manages its interest exposure with respect to weekly drawdowns vs prevailing interest rates
and the Groups’ working capital position. The represents a significant cash-flow risk.
Basis points increase
Basis points decrease
Consolidated - 2022
Basis points
change
Effect on
profit before
tax ($'000)
Basis points
change
Effect on
profit before
tax ($'000)
Trade debtor financing facility
50
(13)
50
13
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
3. Financial instruments (continued)
32
Basis points increase
Basis points decrease
Consolidated - 2021
Basis points
change
Effect on
profit before
tax ($'000)
Basis points
change
Effect on
profit before
tax ($'000)
Trade debtor financing facility
50
(15)
50
15
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
consolidated entity. The consolidated entity has a strict code of credit, including obtaining agency credit information,
confirming references and setting appropriate credit limits. The maximum exposure to credit risk at the reporting date to
recognised financial assets is the carrying amount, net of any provisions for impairment of those assets, as disclosed in the
statement of financial position and notes to the financial statements. The consolidated entity does not hold any collateral.
The Group manages credit risk by trading only with recognised, credit-worthy third parties, along with a credit insurance
policy to cover for potential insolvency of those labour hire clients funded by the ScotPac debtor finance facility. Collateral is
not requested nor is it the Group's policy to secure its trade and other receivables.
It is the Group's policy that all customers who wish to trade on credit terms are subject to credit verification procedures. Risk
limits are set for each customer and are regularly monitored. In addition, receivable balances are monitored on an ongoing
basis with the result that the Group's exposure to bad debts is spread. There are no significant concentrations of credit risk
within the Group.
The Group has adopted a lifetime expected loss allowance in estimating expected credit losses to trade receivables through
the use of a provisions matrix using fixed rates of credit loss provisioning. These provisions are considered representative
across all customers of the Group based on recent sales experience, historical collection rates and forward-looking
information that is available.
Generally, trade receivables are written off when there is no reasonable expectation of recovery. Indicators of this include
the failure of a debtor to engage in a repayment plan, no active enforcement activity and a failure to make contractual
payments for a period greater than 1 year.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash equivalents)
and available borrowing facilities to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves and available borrowing facilities by continuously
monitoring actual and forecast cash flows and matching the maturity profiles of financial assets and liabilities. The Group has
a facility to finance its trade debtors effectively accelerating payment terms. A significant amount of costs is variable linked
directly to revenue sources, if revenue falls then the operating costs also fall.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
3. Financial instruments (continued)
33
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the financial
liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining contractual
maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Weighted
average
interest rate
1 year or
less
More than 1
year
Remaining
contractual
maturities
Consolidated - 2022
%
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade payables
-
13,873
2,358
16,231
Interest-bearing - fixed rate
Lease liability
5.25%
802
2,821
3,623
Borrowings
6.42%
2,622
-
2,622
Deferred consideration
8.00%
3,533
-
3,533
Total non-derivatives
20,830
5,179
26,009
Weighted
average
interest rate
1 year or
less
More than 1
year
Remaining
contractual
maturities
Consolidated - 2021
%
$'000
$'000
$'000
Non-derivatives
Non-interest bearing
Trade payables
-
9,589
3,407
12,996
Interest-bearing - variable
Lease liability
5.25%
1,067
939
2,006
Borrowings
6.42%
3,083
-
3,083
Deferred consideration
8.00%
-
3,250
3,250
Total non-derivatives
13,739
7,596
21,335
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
4. Operating segments
Identification of reportable operating segments
The Directors and management have determined that the Group operates in a single operating segment being the provision
of labour hire, recruitment and training services in Australia.
This is based on the internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief
Operating Decision Makers ('CODM')) in assessing the performance and in determining the allocation of resources. There is
no aggregation of operating segments.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
34
5. Revenue
Consolidated
2022
2021
$'000
$'000
Recruitment income
46,059
26,783
Job Ready income
7,999
712
Training income
4,656
945
Other revenue
304
189
Apprentice income
14,698
1,055
73,716
29,684
Consolidated
2022
2021
$'000
$'000
Labour hire and training services provided over time
73,709
29,589
Building services transferred over time
7
95
73,716
29,684
6. Other income
Consolidated
2022
2021
$'000
$'000
Net gain on disposal of property, plant and equipment
96
65
Government incentives
26
641
Interest income
29
-
Other income
151
706
Government incentives comprise the Jobkeeper and Job Active subsidy of $14,000 (30 June 2021: $539,928) and ATO
cashflow boost $12,000 (30 June 2021: $100,719).
7. Employee benefits expense
Consolidated
2022
2021
$'000
$'000
Wages and salaries
14,141
3,161
Superannuation expense
1,187
271
Other payroll costs
-
313
15,328
3,745
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
35
8. Corporate and administration expenses
Consolidated
2022
2021
ATO Penalty fees *
2,689
863
Property fees
449
28
Subscription & memberships
608
110
Professional fees
892
438
Travel & accommodation
234
27
Bad debts
338
155
Office costs
1,075
193
Motor vehicle costs
217
77
Other costs
767
869
7,269
2,760
* During the year the Company lodged a number of superannuation guarantee statements with the Australian Taxation Office
(ATO) on behalf of GO2 subsidiary entities for periods from 2015 where employee superannuation was paid, but outside of
the statutory timeframes. The total amount of the superannuation guarantee charge (SGC) liabilities owing is $3.375 million.
The total expensed on these charges for the FY22 period amounted to $2,689,000, and the Group has fully provided for the
SGC liabilities in full. Refer to note 20 for further disclosure regarding the SGC liabilities.
9. Finance costs
Consolidated
2022
2021
$'000
$'000
Interest on debts and borrowings
324
43
Interest on lease liabilities
151
30
Interest on ATO liability
421
18
Interest on factoring facility
182
211
1,078
302
10. Current assets - Trade and other receivables
Consolidated
2022
2021
$'000
$'000
Trade receivables
8,849
7,589
Contract assets
1,421
1,104
Less: Allowance for expected credit losses
(327)
(380)
9,943
8,313
Other receivables
103
101
10,046
8,414
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
10. Current assets - Trade and other receivables (continued)
36
Allowance for expected credit losses
The ageing of the receivables and allowance for expected credit losses provided for above are as follows:
Expected credit loss rate
Carrying amount
Allowance for expected
credit losses
2022
2021
2022
2021
2022
2021
Consolidated
%
%
$'000
$'000
$'000
$'000
0-30 days
-
-
5,386
4,741
-
-
30-60 days
-
-
1,745
2,219
-
-
60-90 days
-
-
797
249
-
-
>90 days
35.5%
100.0%
921
380
327
380
Total
8,849
7,589
327
380
Movements in the allowance for expected credit losses are as follows:
Consolidated
2022
2021
$'000
$'000
Opening balance
380
136
Additional provisions recognised
220
93
Additions through business combinations
-
151
Receivables written off during the year as uncollectable
(249)
-
Amounts recovered during the year
(24)
-
Closing balance
327
380
Consolidated
2022
2021
$'000
$'000
Contract Assets
Opening balance
1,104
325
Additions through business combination
-
874
Revenue recognised through satisfaction of performance obligation
10,900
1,864
Transferred to trade receivable following invoice to customers
(10,583)
(1,959)
Total
1,421
1,104
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
37
11. Non-current assets - Plant and equipment
Consolidated
2022
2021
$'000
$'000
Plant and equipment - at cost
1,404
667
Less: Accumulated depreciation
(966)
(174)
438
493
Minor equipment - at cost
215
55
Less: Accumulated depreciation
(185)
(23)
30
32
Motor vehicles - at cost
676
322
Less: Accumulated depreciation
(513)
(259)
163
63
Computer equipment - at cost
1,824
500
Less: Accumulated depreciation
(1,445)
(30)
379
470
Office equipment - at cost
1,217
568
Less: Accumulated depreciation
(1,031)
(324)
186
244
Total Plant and equipment
1,196
1,302
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Plant &
Equipment
Motor
Vehicles
Office
Equipment
Computers
Equipment
Minor
Equipment
Total
Consolidated
$'000
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2020
-
29
62
1
3
95
Additions
27
-
15
14
3
59
Additions through business
combinations
471
-
222
468
30
1,191
Transfers in/(out)
-
74
-
-
-
74
Depreciation expense
(5)
(40)
(55)
(13)
(4)
(117)
Balance at 30 June 2021
493
63
244
470
32
1,302
Additions
141
118
26
80
13
378
Disposals
-
(169)
-
-
-
(169)
Transfer in from ROU asset
-
63
-
-
-
63
Transfers in/(out)
(149)
149
-
-
-
-
Depreciation expense
(47)
(61)
(84)
(171)
(15)
(378)
Balance at 30 June 2022
438
163
186
379
30
1,196
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
38
12. Non-current assets - Right-of-use assets
Consolidated
2022
2021
$'000
$'000
Land and buildings - right-of-use
4,046
1,912
Less: Accumulated depreciation
(845)
(182)
3,201
1,730
Motor vehicles - right-of-use
612
474
Less: Accumulated depreciation
(261)
(267)
351
207
3,552
1,937
Right of use assets – land and buildings consist of the Group’s rental leases for properties in Western Australia (remaining
terms between 15 months and 61 months, option to extend not included in the valuation), and Queensland (remaining term
28 months, no option to extend included in the valuation). The Group has used a discount rate of 4.4% being the weighted
average incremental borrowing rate.
The Group leases office equipment under specific agreements. These leases are either short-term or low-value, so have
been expensed as incurred and not capitalised as right-of-use assets.
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Land and
buildings
Motor
vehicles
Total
Consolidated
$'000
$'000
$'000
Balance at 1 July 2020
175
298
473
Transfer to Plant and equipment asset
-
(74)
(74)
Additions
456
-
456
Additions through business combinations
1,361
118
1,479
Disposals
-
(63)
(63)
Depreciation expense
(262)
(72)
(334)
Balance at 30 June 2021
1,730
207
1,937
Additions
2,592
148
2,740
Depreciation expense
(987)
(38)
(1,025)
Disposals
-
(37)
(37)
Transfer to Motor Vehicle asset
-
(63)
(63)
Balance at 30 June 2022
3,335
217
3,552
Additions in the year relate to the extension to the head office property lease in Western Australia for a further 5 years and
extension of the Queensland property lease for a further 3 years.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
39
13. Non-current assets - Intangibles and goodwill
Consolidated
2022
2021
$'000
$'000
Goodwill - at cost
7,294
6,870
Intellectual property - at cost
1,088
1,088
Less: Accumulated amortisation
(997)
(882)
91
206
Brand assets - at cost
1,470
1,470
Customer contracts - at cost
2,822
2,822
Less: Accumulated amortisation
(282)
-
2,540
2,822
Software - at cost
586
586
Less: Accumulated amortisation
(117)
-
469
586
11,864
11,954
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Goodwill
Intellectual
Brand
Customer
Software
property
assets
contracts
Total
Consolidated
$'000
$'000
$'000
$'000
$'000
$'000
Balance at 1 July 2020
482
-
-
-
-
482
Additions through business
combinations *
6,388
216
1,470
2,822
586
11,482
Amortisation expense
-
(10)
-
-
-
(10)
Balance at 30 June 2021
(Restated)
6,870
206
1,470
2,822
586
11,954
Additions through business
combinations
424
-
-
-
-
424
Amortisation expense
-
(115)
-
(282)
(117)
(514)
Balance at 30 June 2022
7,294
91
1,470
2,540
469
11,864
*
In accordance with relevant accounting standards, the completion of the provisional accounting resulted in
measurement period adjustments related to matters concerned where the facts and circumstances existed at the
acquisition date. If the matters had been known at the time, the information would have affected the acquisition
accounting. As a result, the current annual financial report has disclosed a revision to the acquisition accounting
previously disclosed.
An external valuation and allocation of the purchase price resulting in the recognition of a number of specific identifiable
intangible assets which has impacted the previously stated balance of goodwill. This resulted in a reallocation of goodwill
to specific identifiable intangible assets of Brand assets of $1,470,000, Customer contracts of $2,822,000, and Software
assets of $586,000.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
13. Non-current assets - Intangibles and goodwill (continued)
40
For impairment testing purposes, the Group identifies its cash generating units (CGUs) as the smallest identifiable group of
assets that generate cash inflows largely independent of the cash inflows of other assets or groups of assets.
The Group has identified two CGUs being:
- The recruitment and labour hire CGU; and
- The skills and training CGU.
Indefinite life intangible assets held by each CGU are as follows:
Consolidated
2022
2021
$'000
$'000
Recruitment and labour hire *
8,282
11,266
Skills and training
482
482
8,764
11,748
*
Includes goodwill and brand assets
Indefinite life intangible assets in the Recruitment and labour hire CGU relates to goodwill created on the acquisition of the
Hunter Executive Search and Skill Hire Australia Group business, which were completed during the year ended 30 June
2021.
Indefinite life intangible assets in the Skills and training CGU relates to goodwill created on the acquisition of the GO2 Skills
and Training business, which was completed during the year ended 30 June 2019.
The Group completes an annual impairment test in accordance with AASB 136 for each CGU with indefinite life intangible
assets or when an impairment trigger exists. Where the carrying amount of assets contained within the CGU exceeds its
recoverable amount the assets contained within the CGU are considered impaired and written down to their recoverable
amount. The Group considers its relationship between its market capitalisation and book value of equity, among other factors,
when reviewing for indicators of impairment.
Based on the above, an impairment test was performed for the Recruitment and labour hire CGU.
There was no impairment test performed on Skills and training CGU during the year on the basis that the carrying value is
not material to the Group
Impairment assessment for Recruitment and labour hire CGU.
The recoverable amount of the CGU is determined based on value in use. Value in use is calculated using a discounted cash
flow model covering a five-year period with an appropriate terminal growth rate at the end of that period for each CGU. The
model is based upon an estimated future five-year cash flow forecast, incorporating a base year 1 budget year, a four-year
forecast period, and a terminal value calculation in the fifth year, with the following key input assumptions:
Key assumptions
30 June 2022
Growth rate over forecast period
7.72%
Terminal value growth rate
2.0%
Pre-tax discount rate
15.0%
As at 30 June 2022, management has assessed the carrying value of assets and performed an impairment test on the
Recruitment and labour hire CGU.
The year one budget has been determined based on the combined revenue for the group following the acquisition of Hunter
Executive and Skill Hire Australia, which was based on historical performance for the year ended 30 June 2022 with an uplift
of approximately 6% relating to CPI increases in revenue, 10% due to expected price increases from existing customers and
$13.5m in scope of work increases from existing customers.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
13. Non-current assets - Intangibles and goodwill (continued)
41
The key estimates and assumptions used to determine the recoverable amount of a CGU are based on management’s
current expectations after considering past experience and external information and are considered to be reasonably
achievable;
- Revenue growth;
- Gross margin; and
- Discount rate.
The Directors and management have considered and assessed reasonably possible changes for key assumptions in relation
to the CGU and have not identified any reasonable instances that could cause the carrying amount to exceed its recoverable
amount.
14. Current liabilities - Trade and other payables
Consolidated
2022
2021
$'000
$'000
Trade payables
369
695
Payroll liabilities (i)
1,993
3,572
Other payables (ii)
7,088
4,274
9,450
8,541
Trade payables are non-interest bearing and are normally settled on 30-day terms.
(i) Payroll liabilities
Consolidated
2022
2021
$'000
$'000
Superannuation liabilities
546
1,121
PAYG withholding
262
1,113
Accrued payroll
442
657
Payroll tax
666
574
Other ATO payroll liabilities
77
107
1,993
3,572
(ii) Other liabilities
Consolidated
2022
2021
$'000
$'000
PAYG & GST payables
5,778
2,043
Accrued expenses
673
1,346
Other
637
885
7,088
4,274
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
42
15. Current liabilities - Lease liabilities
Consolidated
2022
2021
$'000
$'000
Lease liability
802
1,067
Relates to the Group’s rental leases for motor vehicles and properties in Western Australia, New South Wales and
Queensland . For calculation of the lease liability the Group has used a discount based on the weighted average incremental
borrowing rate of 6%.
16. Current liabilities - Borrowings
Consolidated
2022
2021
$'000
$'000
Insurance premium funding (i)
71
110
Trade debtor factoring (ii)
2,551
2,973
2,622
3,083
Refer to note 3 for further information on financial instruments.
(i) Relates to the Group’s insurance premium funding facility, an interest rate of 3.2% per annum is charged on the initial
facility balance. Repayable over 10 months.
(ii) Collateral over the Group’s trade receivables. Effective interest of 6.42% per annum. Repayable on collection of the
receivables funded and drawn again to fund new receivables. The facility limit amounted to $15,000,000 and unused facility
as at reporting date was $12,026,661.
17. Current liabilities - Employee benefits
Consolidated
2022
2021
$'000
$'000
Annual leave
1,002
942
Long service leave
139
96
1,141
1,038
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
43
18. Current liabilities - Contract liabilities
Consolidated
2022
2021
$'000
$'000
Contract liabilities
624
835
Consolidated
2022
2021
$'000
$'000
Opening Balance
835
-
Additions through business combination
-
1,147
Receipt of cash
(820)
(690)
Revenue earnt upon satisfaction of performance obligation
609
378
624
835
19. Non-current liabilities - Lease liabilities
Consolidated
2022
2021
$'000
$'000
Lease liability
2,821
939
Relates to the non-current portion of the Group’s rental leases for motor vehicles and properties in Western Australia, New
South Wales and Queensland. For calculation of the lease liability the Group has used a discount based on the weighted
average incremental borrowing rate of 6%.
20. ATO Payables
Consolidated
2022
2021
$'000
$'000
ATO Payables - Current
ATO Payment plan
1,048
1,048
ATO Superannuation Guarantee liabilities
3,375
-
4,423
1,048
Consolidated
2022
2021
$'000
$'000
ATO Payables – Non-current
ATO payment plan
2,358
3,407
ATO Payment plan
In prior periods Skill Hire Australia Pty Ltd (GO2's wholly owned subsidiary) entered into a payment plan with the Australian
Tax Office in order to repay outstanding GST and PAYG tax balances of $5,241,000. The payment plan required a monthly
payment of $87,350 with the last payment being 7 November 2025. This ATO liability was acquired as part of the Skill Hire
business combination in the prior year. In respect of the $3,406,000 ATO liability under payment plan, $1,048,000 has been
recorded as a current liability and $2,358,000 as a non-current liability at 30 June 2022.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
20. Non-current liabilities - ATO Payables (continued)
44
ATO Superannuation liabilities
This relates to the Superannuation Guarantee charge in relation to the late payment of superannuation.
During the financial year the Group completed its review and reconciliation of past superannuation payments, and lodged
Superannuation Guarantee Charge (SGC) Statements with the Australian Taxation Office (ATO) covering the period from 1
July 2018 to 30 June 2021.
The total amount of the SGC liabilities owing is $3.375 million. The total expensed on these charges for the FY22 period
amounted to $2.69 million, and the Group has now provided for the SGC liabilities in full.
The Group continues to negotiate with the ATO, with the assistance of specialist consultants, to access payment plans to
discharge these liabilities over time, however as at the reporting date a payment plan had not been approved with the ATO,
and consequently the entire SGC liability has been recorded as a current liability.
Contingent Liability
The superannuation legislation applies an automatic penalty of 200% where late payments are made and a corresponding
SGC statement is not lodged in a timely manner. However, the ATO's draft Practice Statement PSLA2021/D1 provides that
90% of this penalty will be automatically remitted where the taxpayer self-reports. As the total liability could be up to $5.3
million, it is possible that a further $0.5 million in penalties, in addition to the $2.7 million SGC could be levied by the ATO.
However, the Group intends to make a submission to the ATO to seek a further reduction to the amount with the possibility
of no further liability being levied against the Group. Due to the uncertain nature of this additional penalty amount, the value
has not been included in the 30 June 2022 results and has instead been disclosed as a contingent liability in Note 28.
21. Equity - Issued capital
Consolidated
2022
2021
2022
2021
Shares
Shares
$'000
$'000
Ordinary shares - fully paid
406,638,254
370,879,350
24,602
23,395
Movements in ordinary share capital
Details
Date
Shares
Issue price
$'000
Balance
1 July 2020
142,689,618
16,165
Exercise of performance rights
21 September 2020
5,000,000
$0.015
75
Exercise of free attaching options
29 January 2021
3,323,639
$0.040
133
Shares issued as Hunter acquisition consideration
12 March 2021
25,426,418
$0.035
900
Shares issued as Skill Hire acquisition consideration 31 May 2021
194,439,675
$0.032
6,157
Share issue costs
-
$0.000
(35)
Balance
30 June 2021
370,879,350
23,395
Shares issued as contingent consideration for Hunter
acquisition
29 September 2021
35,758,904
$0.030
1,207
Balance
30 June 2022
406,638,254
24,602
Ordinary shares
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion
to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value and the Company
does not have a limited amount of authorised capital.
Every member present at a meeting in person or by proxy shall have one vote per ordinary share held. Voting is decided on
a poll at each shareholder meeting.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
21. Equity - Issued capital (continued)
45
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's objectives when managing capital is to safeguard its ability to continue as a going concern, so that it can provide
returns for shareholders and benefits for other stakeholders and to maintain an optimum capital structure to reduce the cost
of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders, return
capital to shareholders, issue new shares or sell assets to reduce debt.
The Group would look to raise capital when an opportunity to invest in a business or company was seen as value adding
relative to the current Company's share price at the time of the investment. The Group is not actively pursuing additional
investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.
The Group is subject to certain financing arrangements covenants and meeting these is given priority in all capital risk
management decisions. There have been no events of default on the financing arrangements during the financial year.
The capital risk management policy remains unchanged from the 30 June 2021 Annual Report.
22. Equity - Reserves
Consolidated
2022
2021
$'000
$'000
Share-based payments reserve
-
20
During the year ended 30 June 2022 1,750,000 options expired and were not exercised. These were reversed from the
reserve and applied against the retained earnings.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to employees and Directors as part of their
remuneration, and other parties as part of their compensation for services.
23. Loss per share
Consolidated
2022
2021
$'000
$'000
Loss after income tax attributable to the owners of The GO2 People Ltd
(5,453)
(2,688)
Number
Number
Weighted average number of ordinary shares used in calculating basic loss per share
397,819,990
171,580,822
Weighted average number of ordinary shares used in calculating diluted loss per share
397,819,990
171,580,822
Cents
Cents
Basic loss per share
(1.37)
(1.57)
Diluted loss per share
(1.37)
(1.57)
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
46
24. Non-current liabilities - Employee benefits
Consolidated
2022
2021
$'000
$'000
Long service leave
47
142
25. Deferred consideration
Consolidated
2022
2021
$'000
$'000
Deferred consideration - Current
3,533
-
Consolidated
2022
2021
$'000
$'000
Deferred consideration - Non-current
-
3,250
Deferred consideration
The provision represents the obligation to pay deferred consideration following the acquisition of a business - Skill Hire
Australia Pty Ltd (Skill Hire). Under the terms of the acquisition agreement, this consideration is to be paid in cash after 2
years of the acquisition (acquisition completed 31 May 2021). On 30 August 2022 the Group entered into a Deed of Variation
with the Skill Hire vendors to extend the maturity date of the deferred consideration to 30 November 2023.
26. Key management personnel disclosures
Directors
The following persons were Directors of The GO2 People Ltd during the financial year:
Name
Position held
Darren Copper
Independent Non-executive Chairman
John Manning (appointed 22 November 2021)
Independent Non-executive Director
Paul Goldfinch (resigned 31 August 2021)
Executive Director
Robert Stockdale (resigned 1 May 2022)
Non-executive Director
Tony Fitzpatrick (resigned 23 May 2022)
Non-executive Director
Susan Hansen (appointed 22 November 2021, resigned 27
July 2022)
Independent Non-executive Director
Sophie Ray (appointed 22 November 2021, resigned 27 July
2022)
Independent Non-executive Director
Abilio “Billy” Ferreira (resigned 31 August 2021)
Managing Director
Other key management personnel
The following persons also had the authority and responsibility for planning, directing and controlling the major activities of
the Group, directly or indirectly, during the financial year:
Shawn Murphy (Appointed Managing Director 27 July 2022) CEO & Managing Director
Ross Lovell (employment ended 3 September 2021)
EGM Recruitment
Danny Warren (resigned 14 September 2021)
Chief Financial Officer
Steven Richards (Appointed 30 March 2022)
Chief Financial Officer
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
26. Key management personnel disclosures (continued)
47
Compensation
The aggregate compensation made to Directors and other members of key management personnel of the Group is set out
below:
Consolidated
2022
2021
$
$
Short-term employee benefits
993,558
1,136,167
Post-employment benefits
77,595
79,691
1,071,153
1,215,858
27. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by William Buck Audit (Vic) Pty Ltd,
the auditor of the Company:
Consolidated
2022
2021
$
$
Audit services - William Buck
Audit or review of the financial statements
83,000
69,000
Other services - William Buck
Other assurance services
23,000
20,000
106,000
89,000
28. Contingent liabilities
As noted in Note 20 the Group identified instances over the period 1 July 2018 to 30 June 2021 where SGC payments in
GO2 subsidiary entities were paid late. As at the date of this report the exact outcome is uncertain and the total penalty could
be recorded somewhere between $nil and $5.3 million, with a contingent liability up to $0.5 million. The penalty for late
payments has not been recognised as a provision at 30 June 2022, because it has yet to be confirmed whether the Group
has a present obligation that could lead to an outflow of resources embodying economic benefits as described in Note 20.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
48
29. Reconciliation of loss after income tax to net cash used in operating activities
Consolidated
2022
2021
$'000
$'000
Loss after income tax expense for the year
(5,453)
(2,688)
Adjustments for:
Depreciation and amortisation
1,994
470
Expected credit loss on receivables
327
245
Share of equity accounted investment results
(21)
(16)
Profit on disposal of assets
(96)
-
Change in operating assets and liabilities:
Increase in trade and other receivables
(1,632)
(3,850)
Increase / (Decrease) in other assets
(108)
168
(Decrease) / increase in contract liability
(211)
835
Increase in trade and other payables
4,385
3,629
Increase in provisions
8
920
Net cash used in operating activities
(807)
(287)
30. Related party transactions
Parent entity
The GO2 People Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 32.
Key management personnel
Disclosures relating to key management personnel are set out in note 26 and the remuneration report included in the
Directors' report.
Transactions with related parties
There were no transactions with related parties during the current and previous financial year.
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
The following balances are outstanding at the reporting date in relation to loans with related parties:
Consolidated
2022
2021
$
$
Current receivables:
Loan to Giraffe Australia Pty Ltd (trading as Core FM)
40,869
54,296
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
31. Parent entity information
Set out below is the supplementary information about the parent entity.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
31. Parent entity information (continued)
49
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Parent
2022
2021
$'000
$'000
Loss after income tax
(1,428)
(1,997)
Total comprehensive loss
(1,428)
(1,997)
Statement of financial position
Parent
2022
2021
$'000
$'000
Total current assets
12,085
10,676
Total assets
12,846
11,591
Total current liabilities
(32,977)
(33,701)
Total liabilities
(33,979)
(7,079)
Equity
Issued capital
24,278
23,072
Share-based payments reserve
-
18
Accumulated losses
(4,757)
(4,420)
Total equity
19,521
18,670
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2022 and 30 June 2021.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2022 and 30 June 2021.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 1, except for the
following:
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
●
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
●
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
The GO2 People Ltd
Notes to the consolidated financial statements
30 June 2022
50
32. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1:
Ownership interest
Principal place of business /
2022
2021
Name
Country of incorporation
%
%
GO2 People Ltd
Australia
-
-
GO2 Building Pty Ltd
Australia
100.00%
100.00%
Terra Firma Constructions Pty Ltd
Australia
100.00%
100.00%
The GO2 Recruitment Unit Trust*
Australia
100.00%
100.00%
GO2 Recruitment Pty Ltd
Australia
100.00%
100.00%
The GO2 People Australia Pty Ltd
Australia
100.00%
100.00%
GO2 Skills & Training Pty Ltd
Australia
100.00%
100.00%
Hunter Executive Search Consultants Pty Ltd
Australia
100.00%
100.00%
Skill Hire Australia Pty Ltd
Australia
100.00%
100.00%
Skill Hire WA Pty Ltd
Australia
100.00%
100.00%
NARA Training and Assessing Pty Ltd
Australia
100.00%
100.00%
Skill Hire Indigenous Contracting Pty Ltd
Australia
100.00%
100.00%
*
GO2 Recruitment Unit Trust was settled in Australia and is not an incorporated entity.
33. Events after the reporting period
Mrs Sophie Ray and Mrs Susan Hansen resigned as Non-Executive Directors effective 27 July 2022. Mr Shawn Murphy
assumed the position of Managing Director on the same day.
On 30 August 2022 the Group entered into a Deed of Variation with the Skill Hire vendors to extend the maturity date of the
deferred consideration to 30 November 2023.
On 2 September 2022 the Group received ATO approval for the Skill Hire Subsidiary entity’s FY21 Income Tax liability of
$1.53m, with payments over 24 months subject to a General Interest Charge.
No other matter or circumstance has arisen since 30 June 2022 that has significantly affected, or may significantly affect the
Group's operations, the results of those operations, or the Group's state of affairs in future financial years.
The GO2 People Ltd
Directors' declaration
30 June 2022
51
In the Directors' opinion:
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
●
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
●
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2022 and of its performance for the financial year ended on that date; and
●
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The Directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the Directors
___________________________
Darren Cooper
Chairman
29 September 2022
Level 20, 181 William Street, Melbourne VIC 3000
+61 3 9824 8555
vic.info@williambuck.com
williambuck.com.au
William Buck is an association of firms, each trading under the name of William Buck
across Australia and New Zealand with affiliated offices worldwide.
Liability limited by a scheme approved under Professional Standards Legislation.
The GO2 People Ltd
Independent auditor’s report to members
REPORT ON THE AUDIT OF THE FINANCIAL REPORT
Opinion
We have audited the financial report of The GO2 People Ltd. (the Company and its subsidiaries (the
Group)), which comprises the consolidated statement of financial position as at 30 June 2022, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the
financial statements, including a summary of significant accounting policies and other explanatory
information, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group, is in accordance with the Corporations Act
2001, including:
i.
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial
performance for the year ended on that date; and
ii. 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 indepdence
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 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 1 of the financial statements which indicates that the Goup incurred a net loss
after income tax of $5,453,000, is reporting a net working capital deficiency of $11,498,000, and has
incurred net cash outflows from operations of $807,000. These conditions, along with other matters as set
forth in Note 1, indicate the existence of a material uncertainty which may cast significant doubt about the
Group’s ability to continue as a going concern and therefore, the Group may be unable to realise its assets
and extinguish its liabilities in the normal course of business and at the amounts stated in the financial
report. Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report of the current period. These matters were addressed in the context of our audit
of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. In addition to the matter described in the Material Uncertainty Related to Going
Concern section, we have determined the matters described below to be the key audit matters to be
communicated in our report.
COMPLETENESS OF ATO LIABILITIES
Area of focus
Refer also to notes 1, 14, 20 and 28
How our audit addressed it
As at 30 June 2022 the Group had significant
liabilities with the ATO which represents liabilities in
relation to:
— ATO Superannuation Penalty (“SGC”);
— Goods and services tax; and
— Income tax.
The Group currently has a payment plan in place for
the Skill Hire entities and is currently negotiating a
payment plan for the GO2 People
entities.
Due to the volume and complexity of the liabilities
this has been a key area of focus for our audit.
As part of our audit, we have performed the
following procedures with regards to the ATO
debt;
— Confirmed ATO liabilities to the ATO portal at
30 June 2022;
— Verified that the classification of the liabilities
between current and noncurrent is
appropriate based on the terms of the agreed
payment plans signed off by the ATO; and
— Performed testing over subsequent payments
made to the ATO after the year end cut off
date of 30 June 2022 to confirm that balances
had been appropriately accrued and paid on
time.
We also considered the adequacy of the
Group’s disclosures in relation to the ATO
liabilites in the financial report
ASSESSMENT OF CARRYING VALUE OF GOODWILL
Area of focus
Refer also to notes 1, 2 and 13
How our audit addressed it
During the financial year ended 30 June 2021 the
group expanded its activities in the labour hire and
recruitment services segment through the acquisition
of Skill Hire Australia Pty Ltd and Hunter Executive
Seach Consultants Pty Ltd. As a result, the two
acquisitions created goodwill on the Group’s
Consolidated Statement of Financial Position.
There is a risk that the carrying amount of goodwill
exceeds its recoverable amount and may be
impaired
Our audit procedures included:
— A detailed analysis of any changes to the
business to determine the continued
appropriateness of the two CGUs;
An examination of the discounted cashflow
model, testing for
- its arithmetical accuracy;
- the reasonableness of the future cashflows,
comparing to historical trends of the business
and its pipeline of future sales transactions
and the overall industry climate affecting the
economics of the business model;
ASSESSMENT OF CARRYING VALUE OF GOODWILL (CONTINUED)
Area of focus
Refer also to notes 1, 2 and 13
How our audit addressed it
The Group operates in two Cash Generating Units
(“CGU”) being “recruitment and labour hire” and
“skills and training”. The Goodwill attributed to the
acquisitions of Skill Hire Australia Pty Ltd and Hunter
Executive Seach Consultants Pty Ltd are attributed to
the Recruitmant and Labour Hire CGU. Management
has assessed that there had been no significant
change to the business which would require a
change in the current year.
The recoverable amount of the Labour Hire and
Recruitment Services CGU has been calculated
based on a value-in-use discounted cashflow model,
which examines the expected discounted cashflows
of the CGU over a five-year period extending from
reporting date, plus a terminal value.
Overall due to the high level of judgement involved,
and the significant carrying amounts involved, we
have determined that this is a key judgemental area
that our audit concentrated on.
- the reasonableness of key inputs into the
model, including growth rates, the discount
rate and the working capital levels associated
with the derivation of those growth rates;
— An examination of key sensitivities of the
Group’s future discounted cash flows to
changes in key inputs; and
— Cross-checking the overall net present value
derived by the model to the current enterprise
value of the business, embodied in its market
capitalisation.
We also considered the adequacy of the
Group’s disclosures in relation to the impairment
testing in the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information in
the Group’s annual report for the year ended 30 June 2022, but does not include the financial report and
the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial report or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true
and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for
such internal control as the directors determine is necessary to enable the preparation of the financial
report that gives a true and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with the Australian Auditing Standards will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of this financial report.
A further description of our responsibilities for the audit of these financial statements is located at the
Auditing and Assurance Standards Board website at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our independent auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2022.
In our opinion, the Remuneration Report of The GO2 People Ltd., for the year ended 30 June 2022,
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.
William Buck Audit (Vic) Pty Ltd
ABN 59 116 151 136
A. A. Finnis
Director
Melbourne, 29 September 2022
The GO2 People Ltd
Shareholder information
30 June 2022
56
The shareholder information set out below was applicable as at 23 September 2022
Securities on issue:
The GO2 People Ltd shares and are listed on the Australian Stock Exchange (ASX) and quoted under the ASX code GO2.
Range
Total holders
Units
% of issued
capital
1 - 1000
15
4,398
-
1,001 - 5,000
17
58,449
0.01
5,001 - 10,000
66
641,478
0.16
10,001 - 100,000
149
7,162,677
1.76
100,001 Over
130
398,771,252
98.07
Total
377
406,638,254
100.00
Unmarketable parcels
Minimum
parcel size
Holders
Units
Minimum $ 500.00 parcel at $0.015 per unit
33,334
163
1,997,625
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
Number held
issued
Bc Fund II Pty Ltd (Banksia Capital Fund II A/C)
70,095,503
17.24
Asstock Pty Ltd (Stock A/C)
48,279,371
11.87
Shoreside Holdings Pty Ltd (Fitzpatrick Family A/C)
48,279,371
11.87
Mr Gregor Mark Mcnally (The Mcnally Family A/C)
30,592,661
7.52
Ms Nicole Maree Oakley + Mr Benjamin George Oakley (Oakley Family A/C)
30,592,661
7.52
Everglades Investment Pty Ltd (Everglades Discretionary A/C)
27,500,000
6.76
Goldfinch Discretionary Pty Ltd (Goldfinch Discretionary A/C)
27,500,000
6.76
Mr Shawn Murphy (Murphy Family A/C)
11,762,297
2.89
Mr Danny George Warren (Cadana Family A/C)
10,413,170
2.56
Mr Mitchell Gregory D'cunha
8,621,208
2.12
Mr Gregory Philip Goldfinch
6,386,078
1.57
Mr Robert Hunter Thomas Landale + Ms Diana Josephine Batten (Landten SF A/C)
3,886,457
0.96
Navigator Consulting & Research Pty Ltd (A Hall Family Super Fund A/C)
3,306,107
0.81
Mr William Cooke
3,191,129
0.78
Ms Carly Waterfield
2,844,339
0.70
Shoootingfish Pty Ltd (Stone Cold Super Fund A/C)
2,500,000
0.61
Mr Philip Beaven-Davis
2,352,455
0.58
Aliitaeao Asiata
2,250,000
0.55
Mr Michael William Gaule
2,084,805
0.51
Mr Cameron John Ross
2,060,000
0.51
344,497,612
84.72
Total Remaining Holders Balance
62,140,642
15.28
The GO2 People Ltd
Shareholder information
30 June 2022
57
Options
There are no options on issue
Unquoted equity securities
There are no unquoted equity securities on issue.
Substantial holders
Substantial holders in the Company are set out below:
Ordinary shares
% of total
shares
Number held
issued
BC Fund 11 Pty Ltd (Banksia Capital Fund II A/C)
70,095,503
17.24
Asstock Pty Ltd
48,279,371
11.87
Shoreside Holdings Pty Ltd (Fitzpatrick Family A/C)
48,279,371
11.87
Mr Gregor Mark Mcnally (The Mcnally Family A/C)
30,592,661
7.52
Ms Nicole Maree Oakley + Mr Benjamin George Oakley (Oakley Family A/C)
30,592,661
7.52
Everglades Investment Pty Ltd (Everglades Discretionary A/C)
27,500,000
6.76
Goldfinch Discretionary Pty Ltd (Goldfinch Discretionary A/C)
27,500,000
6.76
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
Every ordinary shareholder present in person or by proxy at meetings of shareholders shall have one vote for every share
held.
Option holders and Performance Share Holders
Option holders and Performance Share Holders have the right to attend meetings but have no voting rights until the options
are exercised.
Restricted Securities:
Securities subject to voluntary escrow
●
97,219,841 shares escrowed to 31 May 2023
On market buy back
The Company has not initiated an on-market buy back of any of its securities.