ASHLEY SERVICES GROUP LIMITED - Annual Report 2021

==> picture [285 x 109] intentionally omitted <==

Appendix 4E

Year Ended 4 July 2021

Lodged with the ASX under Listing Rule 4.3A

31 August 2021

The following information should be read in conjunction with the attached Annual Report.

1. DETAILS OF REPORTING PERIODS:

The current reporting period is the 52 weeks to 4 July 2021. The previous corresponding reporting period was the 53 weeks from 1 July 2019 to 5 July 2020. The group works on a 4-4-5 week based calendar in line with the group’s weekly reporting calendar and 53 week years are required occasionally to ensure the month end date is included more appropriately within the periods. The consolidated statement of profit or loss and other comprehensive income and consolidated statement of financial position relates to Ashley Services Group Limited (“ASH” and its controlled entities).

2. RESULTS FOR ANNOUNCEMENT TO THE MARKET:

Results:

		Change %	Change	Amount $’000
Revenue from ordinaryactivities	Up	13.9%	To	383,672
Profit after tax for theyear	Up	89.6%	To	9,610
Profit after tax for theyear attributable to shareholders	Up	96.1%	To	9,150

Refer to Chairman and Managing Director’s review in the Annual Report and separate results presentation for commentary on the results.

Control gained over entities:

During the financial year ended 4 July 2021, 100% of the shares in The Instruction Company Pty Ltd were acquired. The Instruction Company is a Registered Training Organisation servicing the rail sector nationally.

The acquisition was completed on 15 September 2020 with a financial effective date of 6 July 2020.

		Ownership
		interest held by			Share of operating
		the Group			profits, after tax
					4 Jul	5 Jul
Name of entity	Country of Incorporation	4 Jul 2021 5 Jul 2020	Nature of relationship	Measurement method	2021 $000	2020 $000
The Instruction
Company Pty Ltd	Australia	100% -	Subsidiary	Consolidated	100	-

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

Loss of control over entities:

Not applicable.

Details of interests in significant joint ventures and associates:

Not applicable.

Dividend re-investment plans:

Not applicable.

Dividends:

	Record	Payment	Cents per	Franked Amount
	Date	Date	Share	per Share (Cents)
Interim Dividend - 2021	3 March 2021	18 March 2021	1.8	1.8
Final Dividend - 2021	2 September 2021	17 September 2021	2.4	2.4

Additional Information:

	2021	2020

Net tangible assets($000)	15,6131	14,1631
Shares on Issue	143,975,904	143,975,904
Net tangible assetsper share($)	0.108	0.098

Note:

Right-of-use assets have been considered as intangible assets and as such are excluded assets for the purposes of the Net Tangible Assets calculation.

Audit qualification or review:

The audited financial statements are attached.

==> picture [114 x 65] intentionally omitted <==

Ross Shrimpton

Managing Director Sydney, 31 August 2021

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

ASHLEY SERVICES GROUP ANNUAL REPORT 2021 3

==> picture [135 x 52] intentionally omitted <==

Ashley Services Group Limited Annual Report 2021

CHAIRMAN AND MANAGING DIRECTOR’S REVIEW ------------------------------------------------------------------ 5 DIRECTORS’ REPORT --------------------------------------------------------------------------------------------------------- 8 AUDITOR’S INDEPENDENCE DECLARATION -------------------------------------------------------------------------- 17 CORPORATE GOVERNANCE STATEMENT ----------------------------------------------------------------------------- 18 DIRECTORS’ DECLARATION----------------------------------------------------------------------------------------------- 19 INDEPENDENT AUDITOR’S REPORT ------------------------------------------------------------------------------------ 20 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ------------- 25 CONSOLIDATED STATEMENT OF FINANCIAL POSITION ----------------------------------------------------------- 26 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ------------------------------------------------------------ 27 CONSOLIDATED STATEMENT OF CASH FLOWS --------------------------------------------------------------------- 28 NOTES TO THE FINANCIAL STATEMENTS ----------------------------------------------------------------------------- 29 ASX ADDITIONAL INFORMATION --------------------------------------------------------------------------------------- 69 CORPORATE DIRECTORY -------------------------------------------------------------------------------------------------- 71

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [134 x 52] intentionally omitted <==

Chairman and Managing Director’s Review

==> picture [72 x 101] intentionally omitted <==

MR IAN PRATT AND MR ROSS SHRIMPTON

2021 has seen the Ashley Services Group deliver an outstanding result. The adjustments we put in place last year to our systems and operations to cope with a COVID impacted work environment have served us well and played a significant role in our strong performance.

As with the previous year, whilst COVID provided operational challenges for us, in many ways it also created opportunities for growth, particularly in Action Workforce with its high exposure to the supply chain sector.

The year also saw us welcome The Instruction Company (TIC) into the Ashley Services Group family, broadening our offer to the rail sector. In its acquisition year we expanded the geographical footprint of The Instruction Company and look forward to this driving additional growth opportunities for this business well into the future.

Track Safety Australia (TSA) launched in December 2020 leveraging both our long term labour hire pedigree and our rail sector experience gained through Concept Engineering. TSA is a specialist provider for Rail Worksite Protection staff and Rail Safeworking staff.

Following on from our recent announcement of a fully franked final dividend of 2.4 cents per share (Ex-div: 1 Sept 2021; Payment: 17 Sept 2021), this delivers a fully franked full year dividend of 4.2 cents per share for 2021, a 56% increase on the 2020 dividend.

The long delivered impressive safety performance of our company continued throughout 2021 and we remain at world’s best practice levels which is something we are extremely proud of.

This years’ achievement is a testament to our 270 internal staff who have followed a simple rule of “focus on the customer” which allows everything else to fall into place.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [134 x 52] intentionally omitted <==

Chairman and Managing Director’s Review

DISCUSSION ON RESULTS

Earnings and result

Earnings

Net profit after tax (“ NPAT ”) for the financial year ended 4 July 2021, including the full year contribution from the recently acquired The Instruction Company, was a total group profit of $9.6 million (FY20: profit $5.1 million)

Key elements within the result include:

Revenues

Group Revenue at $383.7 million increased by $46.8 million (13.9%) from the comparative period.

Labour Hire revenues were up $44.4 million (13.5%).

Training revenues were up by $2.4 million (33%) almost entirely to the first year’s revenue from The Instruction Company.

Earnings before interest taxes depreciation and amortisation (“EBITDA”)

Group EBITDA for the financial year was a profit of $15.5 million, up by $5.8 million (60%) on the prior corresponding period (FY20: EBITDA of $9.7 million).

Labour Hire division EBITDA of $17.8 million, was up $5.3 million (43%) on the prior corresponding period (FY20: $12.5 million), with improvement seen across most brands.
Training division EBITDA of $2.0 million was up $1.2 million or 146% on the prior corresponding period (FY20: $0.8 million) with all significant geographical locations exhibiting improvement.
Corporate overheads, at $4.3 million were up $0.7 million on prior corresponding period (FY20: $3.6 million), primarily due to significant increases in the cost of insurance and additional costs related to our strong continued growth and our most recent acquisition.

Statement of financial position

Net assets at $28.5 million were up by $2.7 million on the prior year (2020: $25.8 million) effectively reflecting the impact of our dividend policy which has paid out 73% of attributable profit over the past four financial years.

Noteworthy balance sheet movements include:

Trade and Other Receivables up $15.0m – June revenues were up $11.4 million or 40% on the prior year
▪ Intangible Assets up $1.5m - TIC Goodwill
Trade and Other Payables up $8.9m – in part related to on increased on cost provisions with revenue/wages lift
Borrowings up $1.1 million – minimal drawdown to fund increased working capital requirements
Other Liabilities (Current & Non-current) down $1.0m – following payment of CCL Contingent Consideration $1.4m less TIC Contingent Consideration $0.4m

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [134 x 52] intentionally omitted <==

Chairman and Managing Director’s Review

Cash Flow

Operating cash flow was strong in the second half, with an inflow of $12.4 million for the second half. This more than offset an outflow of $7.0 million at the half, ending at a $5.4 million inflow for the year (FY20: $14.1 million). Relative to 2020 operating cash was down $9.5 million, due primarily to increased working capital requirements relative to financial year end 2020, with June 2021 revenues up a very pleasing $11.4 million or 40% on the prior corresponding period.

The overall outflow from investing activities of $3.2 million was primarily due to the initial payment of $1.0 million for the TIC acquisition, $1.4 million in contingent consideration payments made in relation to the CCL acquisition and also capital expenditure of $0.8 million which was broadly in line with the prior year.

The overall outflow from financing activities of $7.3 million was primarily due to the combined $7.3 million dividend payments covering the 2020 final dividend ($3.9m), the 2021 interim dividend ($2.6 million), the 2020 CCL final dividend to minority shareholders ($0.4m) and the 2020 TIC final dividend ($0.4m).

Overall this delivered a net cash outflow for FY21 of $5.1 million.

DIVIDEND

On 27 July 2021 the Group declared a fully franked final dividend of 2.4 cents in relation to the financial year ended 4 July 2021. With a fully franked interim dividend of 1.8 cents previously declared on 28 January 2021, this brings the full year dividend for the financial year ended 4 July 2021 to a total of 4.2 cents, a 56% increase on the dividend for the prior financial year (FY20: 2.7 cents).

EVENTS SUBSEQUENT TO BALANCE DATE

Other than the dividend announcement outlined above, no matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years.

There remains significant uncertainty regarding how the COVID-19 pandemic will evolve, including the duration of the pandemic, the severity of the downturn and the speed of economic recovery. In accordance with AASB 110 Events after the Reporting Date, the Group considered whether events since the end of the financial year confirmed conditions existing before the reporting date. The Group did not identify any subsequent events triggered by COVID-19 related developments, which would require adjustment to the amounts or disclosures in the financial statements. Additionally, no other material non-adjusting subsequent events relating to COVID-19 were identified requiring disclosure in the financial statements. The COVID-19 situation remains fluid and the Group continues to closely monitor the financial effects.

==> picture [114 x 66] intentionally omitted <==

==> picture [114 x 64] intentionally omitted <==

Ross Shrimpton Managing Director

Ian Pratt Chairman

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [135 x 51] intentionally omitted <==

Directors’ Report

The Directors present their annual financial report on the consolidated entity, being Ashley Services Group Limited and its controlled entities (“ Group ”) for the financial year ended 4 July 2021.

1. GENERAL INFORMATION

a. Directors

The names of the Directors in office at any time during, or since the end of the year are:

Table 1: Director Details

Names Appointed / Resigned	Names Appointed / Resigned
Mr Ian Pratt Chairman Appointed 1 October 2015
Mr Ross Shrimpton Managing Director Appointed 12 Oct 2000; Managing Director to 15 Feb 2016, Non-Executive Director 15 Feb 2016 to 23 Jan 2017 and ManagingDirector from 23 Jan 2017
Mr Chris McFadden Executive Director Appointed 6 April 2017 and CompanySecretaryfrom 26 August 2020
Directors’ Information
• Mr Ian Pratt	Non-Executive Chairman (since 1 October 2015)
Qualifications	CA Experience
• Mr Ross Shrimpton	Managing Director (since 23 January 2017) (previously Non-Executive Director from 15 February 2016 and Managing Director to 15 February 2016)
Qualifications	BComm (UNSW), CA, MAICD Experience
• Mr Chris McFadden	Executive Director (from 6 Aprl 2017) & Company Secretary (from 26 August 2020)

Ross is a member of the Nominations, Audit & Risk Management and Remuneration Committees.

Qualifications | BBus (UTS), FCPA, GAICD

==> picture [89 x 112] intentionally omitted <==

Experience | Chris was appointed Chief Financial Officer of Ashley Services Group in January 2017 and was appointed Executive Director in April 2017. Chris was formerly CFO at Ross Human Directions Limited (ASX: RHD), a company principally involved in the provision of temporary labour and recruitment services. Chris’s previous roles include: CFO of sass & bide, a division of Myer, CFO of Staples Australia, Senior Commercial Manager at Woolworths Limited and Asia Pacific CFO of The Nuance Group.

Chris is a Fellow of CPA Australia and a Graduate of the Australian Institute of Company Directors. Chris is a member of the Nominations, Audit & Risk Management and Remuneration Committees.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [135 x 52] intentionally omitted <==

Directors’ Report

Interests in shares and options

As at the date of this report, the interests of the directors in the shares of Ashley Services Group Limited were:

Table 2: Shares Held by Directors

	Number	Shareholding	Shareholding
Names	of Shares Held	•	%
Mr Ian Pratt	15,060		0.01
Mr Ross Shrimpton	80,279,030		55.76
Mr Chris McFadden	699,999		0.49

Directorships of other listed companies

Directorships held in other listed companies by the Directors in the three years immediately before the end of the financial year are as follows:

Table 3: Other Directorships of listed entities

Name Company	Date from Date to
Mr Ian Pratt Nil	- -
Mr Ross Shrimpton Nil	- -
Mr Chris McFadden Nil	- -

a. Principal activities

The principal activities of the Group during the financial year were the provision of labour hire (including recruitment) and training services.

b. Company secretary

Mr Ron Hollands held the position of Company Secretary for the entire financial year. Ron is a Chartered Accountant and holds a Bachelor of Business from University of Technology, Sydney, an MBA from MGSM and a Graduate Diploma of Applied Corporate Governance from the Governance Institute of Australia. Ron has over 25 years’ experience in a range of industries including professional practice, financial services and real estate.

Mr Chris McFadden, Executive Director and Chief Financial Officer of the Ashley Services Group Limited was appointed as joint Company Secretary on 26 August 2020.

Directors’ meetings

Details of meetings of directors (including committees of directors) held in the financial year and attendances by each director are shown in the following table:

Table 4: Meeting Attendance

	Board Meetings	Audit & Risk Management Committee Meetings	Remuneration Committee Meetings	Nomination Committee Meetings
	Held Attended	Held Attended	Held Attended	Held Attended
Mr Ian Pratt	6 6	2 2	1 1	1 1
Mr Ross Shrimpton	6 6	2 2	1 1	1 1
Mr Chris McFadden	6 6	2 2	1 1	1 1

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Directors’ Report

1. BUSINESS REVIEW

a. Operating results

The consolidated profit of the Group attributable to equity holders after providing for income tax amounted to $9,150,000 (2020: profit $4,667,000).

b. Review of operations

Information on the operations and financial position of the Group and its business strategies and prospects is set out in the Chairman and Managing Director’s Review.

c. Future developments

Likely developments in the operations of the consolidated entity in future years and the expected results of those operations are referred to generally in the Chairman and Managing Director’s Review.

d. Events subsequent to reporting date

There have been no matters or circumstances that have arisen since the end of the year that would have significantly affected the group’s operations in financial year 2021 except as follows:

On 27 July 2021 the Group declared a fully franked final dividend of 2.4 cents in relation to the financial year ended 4 July 2021, with a payment date of 17 September 2021.

There remains significant uncertainty regarding how the COVID-19 pandemic will evolve, including the duration of the pandemic, the severity of the downturn and the speed of economic recovery. In accordance with AASB 110 Events after the Reporting Date, the Group considered whether events since the end of the financial year confirmed conditions existing before the reporting date. The Group did not identify any subsequent events triggered by COVID-19 related developments, which would require adjustment to the amounts or disclosures in the financial statements. Additionally, no other material non-adjusting subsequent events relating to COVID-19 were identified requiring disclosure in the financial statements. The COVID19 situation remains fluid and the Group continues to closely monitor the financial effects.

e. Ongoing Litigation

Ashley Services Group Limited (ASH) has no current ongoing litigation.

2. OTHER INFORMATION

a. Options

There are no unissued ordinary shares that are either under option at the date of this report or have been exercised during the year.

b. Non-audit services

The Group may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Group are important.

The current auditor, HLB Mann Judd Assurance (NSW) Pty Ltd, did not provide any non-audit services during the year ended 4 July 2021.

Details of the amounts paid to HLB Mann Judd for audit services provided during the year are outlined in Note 4 to the financial statements.

c. 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 on page 17 and forms part of this report.

d. Environmental issues

The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory.

e. Indemnifying officers or auditors

Insurance of officers

During the financial year, Ashley Services Group Limited paid a premium to insure the directors, secretaries and officers of the Group and its Australian entities.

The insurance policies prohibit disclosure of the premiums payable under the policies and details of the insured liabilities.

f. 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 Group, or to intervene in any proceedings to which the Group is a party, for

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Directors’ Report

the purpose of taking responsibility on behalf of the Group for all or part of those proceedings.

g. Rounding off of amounts

In accordance with ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191, amounts in the financial report are rounded off to the nearest thousand dollars unless otherwise indicated.

3. REMUNERATION REPORT – AUDITED

performance is competitive and appropriate for the results delivered. The framework seeks to align executive reward with achievement of strategic objectives and the creation of value for shareholders.

The Board seeks to ensure that executive reward satisfies the following key criteria for good reward governance practices:

competitiveness and reasonableness;
acceptability to shareholders;

The directors of Ashley Services Group Limited present the remuneration report for Non-Executive Directors, Executive Directors and other key management personnel, prepared in accordance with the Corporations Act 2001 and the Corporations Regulations 2001 .

The remuneration report is set out in the following main headings:

key management personnel;
principles used to determine the nature and amount of remuneration;
performance linkage/alignment of executive compensation;
transparency; and
capital management.

Alignment of shareholders’ interest

focuses on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering a return on assets as well as focusing the executive on key nonfinancial drivers of value; and
attracts and retains high-calibre executives.
Non-Executive Director remuneration;
details of remuneration;
executive service agreements;
share-based compensation; and
additional information.
a. Key management personnel

The following persons acted as Directors of the Group or as key management personnel during the financial year:

Executive Directors:

Ross Shrimpton
Chris McFadden

Non-Executive Directors:

Ian Pratt

Other key management personnel:

Paul Rixon (General Manager, Labour Hire)

Key management personnel include both the Directors and other key management personnel named above.

b. Principles used to determine the nature and amount of remuneration

The objective of the Group’s executive reward framework is to ensure that reward for

Alignment to program participants’ interests

rewards capability and experience;
provides a clear structure for earning rewards; and
provides recognition for contribution to the business.

The framework provides a mix of fixed and variable pay, including short term incentives.

The Board has established a Remuneration Committee which provides advice on remuneration and incentive policies and practices and specific recommendations on remuneration packages and other terms of employment for executives and Directors. The Corporate Governance Statement provides further information on the role of this committee.

Executive pay

The executive pay and reward framework has three components:

base pay and benefits, including superannuation; and
short-term performance incentives, provided in cash.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Directors’ Report

The combination of these comprises the executive’s total remuneration.

Table 5: Key components of senior executive remuneration framework in place during the year ended 4 July 2021.

Fixed Remuneration/Base Pay	Short Term Incentive(STI)
• Base pay is determined by reference to appropriate benchmark information, taking into account an individual’s responsibilities, performance, qualifications and experience, the broad objective being to pitch fixed remuneration at median market levels.	• ‘At risk’ award opportunity for the achievement of annual performance objectives linked to annual financial targets and non-financial goals set by individual.
• Base pay is structured as a package, which may be delivered as a mix of cash and other benefits, such as the provision of a motor vehicle, at the executive’s discretion.	• Financial targets in line with budgets set for the individual’s area of influence for the financial year, coupled with non-financial key performance measures.
• There are no guaranteed base pay increases in any executives’ employment contracts.	• Paid in cash within 30 days of finalisation of Audited Annual Report.

Table 6: Key features of the senior executive STI plan for FY21

Overview of the senior executive STIplan	Overview of the senior executive STIplan	Overview of the senior executive STIplan
Who participates in the Senior Executive STI plan? Senior executives participate in the senior executive STI plan.
How much can executives earn? STI opportunity for senior executives ranges from zero to 100% of target STI for significant out- performance.
Thresholds and performance conditions
Is there a threshold level of performance required?	Yes. There are threshold levels for EBITDA that must be met to receive an STI payment. Achievement of the thresholds does not automatically entitle executives to an STI award. Financial performance measures must also be met to earn an STI payment.
What are the performance conditions?	Measures	Senior Executives
	Financial measures (80% of STI opportunity) Non-Financial measures (20% of STI opportunity)	Assessed against: • Budget EBITDA for the individual’s area of influence for the financial year. • 20% payable for achievement of 80% of budget. Remaining 80% payable on a straight-line pro rata basis for performance from 80% to 130% of budget. • Individually set Key Performance Indicators.
Setting and assessing	performance
Who sets and assesses performance?	The MD sets and assesses performance and short term incentive outcomes for senior executives with guidance from the Remuneration Committee. The Remuneration Committee sets the targets for MD and assesses performance against those targets.
How is the STI delivered?	100% of any STI award is paid in cash within 30 days of finalisation of the audited Annual Report.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Directors’ Report

STI plan for the financial year ended 3 July 2022

The remuneration committee has approved a similar Short Term Incentive (STI) plan for the year ended 3 July 2022, based upon budget targets for that annual period.

c. Non-executive Director remuneration and Board performance review

Non-executive Directors’ remuneration are reviewed annually and are determined by the Board based on recommendations from the Remuneration Committee. In making its recommendations, the Remuneration Committee takes into account remuneration paid to other non-executive Directors of comparable companies and where necessary will seek external advice. No remuneration consultants were used during the financial year.

In accordance with the Company’s Constitution, the Directors are entitled to receive an annual fee and for participation in Board sub-committees. For non-executive Directors, fees are not linked to performance.

The Company does not operate equity plans for non-executive Directors.

Non-executive Directors are entitled to statutory superannuation included as part of their Directors’ fees. There are no other schemes for retirement benefits for non-executive Directors.

d. Details of remuneration

Details of remuneration of the Directors and other key management personnel of Ashley Services Group are set out in the tables on pages 13 to 15.

The key management personnel of Ashley Services Group are listed in the table below. The key management personnel have authority and responsibility for planning, directing and controlling activities of the Group.

Remuneration and other terms of employment for the Executive Directors and other Key Management Personnel are formalised in a service agreement. The major provisions of the agreements relating to remuneration are set out below:

Table 8: Executive and Key Management Personnel Service Agreements

Name	Base Salary $1	Target STI %2	Target LTI %2, 3	Term of agreement	Notice Period
Ross Shrimpton	450,000	-	-	Ongoing	6 months
Chris McFadden	450,000	50	50	Ongoing	6 months
Paul Rixon	291,748	50	50	Ongoing	6 months

Note:

Base salary is on an annual basis and includes superannuation contributions.
Maximum annual award as a percentage of annual salary.
This plan has been suspended since the financial year ended 30 June 2017.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Directors’ Report

Table 9: Statutory key performance indicators of the group over the last five years

	2021	2020	2019	2018	2017
Profit /(Loss)for theyear attributable to shareholders($000)	9,150	4,667	5,424	4,789	(5,969)
Basic earningsper share(cents)	6.36	3.24	3.77	3.33	(4.08)
Dividendpayments($000)1	6,047	3,887	3,887	3,600	-
Dividendpayout ratio(%)	66.1	83.3	71.7	75.1	-
Increase /(decrease)in shareprice(%)2	92.3	0.0	33.3	204.7	(70.9)
Total KMP incentives as percentage of profit/(loss) for the year	1.5	4.1	6.1	3.1	-
(%)

Note:

2021 Final Dividend declared 27 July 2021 in relation to the 2021 financial year, with payment date of 17 September 2021. 2021 Interim Dividend declared 28 January 2021 in relation to the 2021 financial year, with payment date of 18 March 2021. 2020 Dividend declared 27 July 2020 in relation to the 2020 financial year, with payment date of 11 September 2020. 2019 Dividend declared 9 August 2019 in relation to the 2019 financial year, with payment date of 6 September 2019. 2018 Dividend declared 26 July 2018 in relation to the 2018 financial year, with payment date of 17 August 2018.
Increase/(decrease) in share price (%) is year-end share price relative to prior year-end.

Table 10: 2021 – Remuneration of Key Management Personnel

					LT3		Performance
				PE2	employee		based
2021	ST1 employee		benefits	benefits	benefit	Total4	Remuneration
	Cash salary	Salary non-	ST1 employee	Super-
	& fees	cash	bonus	annuation
Name	$	$	S	$	$	$	%
Non-executive Directors
Ian Pratt5	205,480	-	-	19,520	-	225,000	-
Executive Director
Ross Shrimpton	428,306	-	-	21,694	-	450,000	-
Chris McFadden	428,306	-	81,096	21,694	-	531,096	15.3

Other key managementpersonnel
Paul Rixon	270,054	-	54,049	21,694	-	345,797	15.6
Total	1,332,146	-	135,145	84,602	-	1,551,893	08.7

Note:

ST – Short-term.
PE – Post-employment.
LT – Long-term. As all previous LTI performance hurdles have now lapsed no expense has been recognised in the profit and loss account for the year ended 4 July 2021.
Amounts included in the above table include amounts paid to key management from all entities.
During the year tax advisory fees have also been paid to Trood Pratt & Co (Company in which Ian Pratt is a Partner). Refer to Note 31. Related Party Transactions for further details.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Directors’ Report

Table 11: 2020 – Remuneration of Key Management Personnel

					LT3		Performance
				PE2	employee		based
2020	ST1 employee		benefits	benefits	benefit	Total4	Remuneration
	Cash salary	Salary non-	ST1 employee	Super-
	& fees	cash	bonus	annuation
Name	$	$	S	$	$	$	%
Non-executive Directors
Ian Pratt5	205,480	-	-	19,520	-	225,000	-
Executive Director
Ross Shrimpton	428,997	-	-	21,003	-	450,000	-
Chris McFadden	428,997	-	118,293	21,003	-	568,293	20.8

Other key managementpersonnel
Paul Rixon6	273,336	-	71,760	21,003		366,099	19.6
Total	1,336,810	-	190,053	82,529		1,609,392	11.8

Note:

ST – Short-term.
PE – Post-employment.
LT – Long-term. As all previous LTI performance hurdles have now lapsed no expense has been recognised in the profit and loss account for the year ended 5 July 2020.
Amounts included in the above table include amounts paid to key management from all entities.
During the year tax advisory fees have also been paid to Trood Pratt & Co (Company in which Ian Pratt is a Partner). Refer to Note 31. Related Party Transactions for further details.
Novated car lease refund of $4,715 included in these figures.

Other transactions with key management personnel

Information on share-based payments and other transactions with key management personnel is set out on the previous pages.

e. Shares held by key management personnel

The number of ordinary shares in the Company during the 2021 reporting period held by each of the Group’s key management personnel, including their related parties are set out below:

Table 12: Shares held by Key Management Personnel

	Balance at start of
Name	theyear	Shares Disposed	Change from KMP	Balance at end of theyear
Ian Pratt	15,060	-	-	15,060
Ross Shrimpton	80,279,030	-	-	80,279,030
Chris McFadden	630,630	-	69,3691	699,999
Paul Rixon	41,416	-	54,823	96,239
Total	80,966,136	-	124,192	81,090,328

Note:

The changes in Chris McFadden’s holding are as advised to the ASX on 30 October 2020 following an on-market purchase through a director related entity – Christoula Pty Limited ATF Christoula Superannuation Fund.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Directors’ Report

f. Executive service agreements

On appointment to the Board, all non-executive Directors sign a letter of appointment with the Company. The letter summarises the terms including compensation, relevant to the office of Director.

All contracts with executives may be terminated by either party with a notice period as outlined in Table 8. Executives are typically restricted for twelve months after termination from conducting or engaging in competing businesses and from solicitation of customers and employees of the Company.

End of audited Remuneration Report.

Signed in accordance with a resolution of the Board of Directors made pursuant to section 298(2) of the Corporations Act 2001.

==> picture [115 x 66] intentionally omitted <==

Ian Pratt

Chairman Sydney, 31 August 2021

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [594 x 97] intentionally omitted <==

Auditor’s Independence Declaration

As lead auditor for the audit of the consolidated financial report of Ashley Services Group Limited for the year ended 4 July 2021, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(a) the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and
(b) any applicable code of professional conduct in relation to the audit.

This declaration is in relation to Ashley Services Group Limited and the entities it controlled during the period.

==> picture [96 x 72] intentionally omitted <==

Sydney, NSW 31 August 2021

S P James Director

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Corporate Governance Statement

A Corporate Governance Statement has been adopted by the Board on 27 August 2021 and can be found at

http://www.ashleyservicesgroup.com.au/investor - centre/corporate governance/

The Board has adopted a suite of governance materials which are available in the Corporate Governance section of the Company’s website (www.ashleyservicesgroup.com.au), under “Investor Centre”. The governance materials have been prepared and adopted on the basis that corporate governance procedures can add to the performance of the Company and the creation of shareholder value, and help to engender the confidence of the investment market.

Diversity

To date, the board or a committee have not set measurable objectives for achieving gender diversity and to assess annually both the objectives and the company’s progress in achieving them.

organisation, women in Senior Executive positions and women on the Board of the Company.


Female Male
Directors & Senior Management Corporate & Administration Labour Hire Recruitment Training	34% 66% 83% 17% 66% 34% 87% 13% 51% 49%
Total	60% 40%

During the financial year ending 4 July 2021 the Company submitted its annual report to the Workplace Gender Equality Agency and is again compliant with the Workplace Gender Equality Act 2012 (Act).

The performance of the Board and Senior Executives in the 2021 financial year has been reviewed against both quantitative and qualitative measures and Directors and Senior Executives provided feedback on the discharge of their responsibilities.

The Company provides the following information on the proportion of women employees in the whole

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Directors’ Declaration

In the opinion of the Directors of Ashley Services Group Limited:
a. The consolidated financial statements and notes of Ashley Services Group Limited are in accordance with the Corporations Act 2001 , including:
- i. Giving a true and fair view of its financial position as at 4 July 2021 and of its performance for the financial year ended on that date; and
- ii. Complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ;
b. There are reasonable grounds to believe that Ashley Services Group Limited will be able to pay its debts as and when they become due and payable; and
c. At the date of this declaration, there are reasonable grounds to believe that the members of the Extended Closed Group will be able to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of cross guarantee described in note 30 to the financial statements.
The Directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the Managing Director and Chief Financial Officer for the financial year ended 4 July 2021.
Note 1 confirms that the consolidated financial statements also comply with International Financial Reporting Standards.

Signed in accordance with a resolution of the Directors.

==> picture [114 x 66] intentionally omitted <==

Ian Pratt Chairman

Sydney, 31 August 2021

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [596 x 100] intentionally omitted <==

Independent Auditor’s Report to the Members of Ashley Services Group Limited

REPORT ON THE AUDIT OF THE FINANCIAL REPORT

Opinion

We have audited the financial report of Ashley Services Group Limited (“the Company”) and its controlled entities (“the Group”), which comprises the consolidated statement of financial position as at 4 July 2021, the consolidated statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors’ declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

(a) giving a true and fair view of the Group’s financial position as at 4 July 2021 and of their financial performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [596 x 100] intentionally omitted <==

Key Audit Matter	How our audit addressed the key audit matter
Revenue Recognition
Refer to Note 1 (Summary of significant accounting	policies) and Note 2 (Revenue and other income)
Labour hire revenue is the most significant	We assessed whether the Group’s accounting
account balance in the Consolidated Statement of	policies were in compliance with Australian
Profit or Loss and Other Comprehensive Income.	Accounting Standards and specifcally whether
Total revenue and other income of $384.0 million comprises a number of streams including:	revenue had been recognised in accordance with accounting standard AASB 15_Revenue from_ Contracts with Customers.
• labour hire revenue ($374.0 million); • training revenue ($9.7 million); and • other income ($0.3 million).	We tested the Group’s process for recognising labour hire revenue.
We focussed on this matter due to the size and magnitude of labour hire revenue, as well as the higher level of inherent risk due to the manual processes for inputting, calculating, reviewing, and recording of the labour hire revenue.	We tested labour hire revenue recognised in the period by agreeing to timesheets, payroll reports, amounts billed and subsequently received. We tested the process for raising and authorising credit notes throughout the financial year and
	immediately subsequent to year end.
	We compared the accuracy of hours on-billed as
	labour hire revenue to amounts paid to employees,
	refer to employment costs below.
	We tested the correct cut-off and accrual of labour
	hire revenue at year end.
Employment Costs
Refer to Note 1 (Accounting policies)
Employment costs, both internal and allocated	We tested the Group’s process for recognising
externally, is one of the most significant account	employment costs.
balances in the Consolidated Statement of Profit or Loss and Other Comprehensive Income.	We tested the controls surrounding the authorisation of changes in employee details, such
Total employment costs amount to $360.9 million.	as pay rates.
We focussed on this matter due to the size and	We tested employment costs recognised in the
magnitude of employment costs, as well as the	period by agreeing to timesheets, payroll reports,
higher level of inherent risk due to the manual	and amounts subsequently paid.
processes for the volume of inputting, calculating, reviewing, and recording of the employment costs.	We analytically reviewed the labour hire margins from the current and prior year.
	We tested the cut-off and accrual of employment
	costs at year end.
	We tested whether PAYG amounts were deducted
	and subsequently paid to the Australian Taxation
	Office.
	We tested superannuation amounts paid by
	recalculation and comparison to gross wages. We
	tested the subsequent payment to the
	superannuation clearing house.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

Key Audit Matter

==> picture [596 x 100] intentionally omitted <==

How our audit addressed the key audit matter

Carrying Value of Goodwill Refer to Note 13 (Intangible assets) and Note 14 (Impairment)

The Group recognised Goodwill of $10.7m as at 4 July 2021 in relation to the Labour Hire and training divisions. This Goodwill arose on acquisition of subsidary companies during the current year (Note 26) and prior years.

As required by Australian Accounting Standards the Group tested this Goodwill for impairment, at 4 July 2021.

The Group determined the recoverable amount using value in use calculations for the relevant cash generating units (“CGU”) being that of Labour Hire and Training, which involved a significant level of judgement in respect of factors such as:

• Estimated future revenues and costs; • Discount rates; and • Terminal values. We considered this to be a key audit matter due to the significant judgement involved in estimating the recoverable amount of the Goodwill and the potentially material impact on the financial report.

We evaluated the Group’s goodwill impairment assessment process;

We obtained the Group’s value in use models and considered the assumptions applied by management;

We assessed the accuracy of previous Group forecasting to inform our evaluation of forecasts included in the value in use models. We applied increased scepticism to current period forecasts in areas where previous forecasts were not achieved and /or where future uncertainty is greater or volatility is expected;

We challenged discount and terminal value multiples by comparing these with rates used by comparable companies.

We compared forecast revenues and costs to historical results;

We tested the mathematical accuracy of the impairment models used by management;

We performed sensitivity analysis on the Labour Hire and Training CGU in relation to the discount rate and terminal value multiple assumptions, and profit forecasts;

We assessed the Group’s disclosures of the quantitative and qualitative considerations in relation to the valuation of goodwill, by comparing these disclosures to our understanding of the assets.

Information Other than the Financial Report and Auditor’s Report Thereon

The directors are responsible for the other information. The other information comprises the information included in the Group’s Annual Report for the year ended 4 July 2021, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [596 x 100] intentionally omitted <==

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 have 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 Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with the directors, we determine those matters that were of most significance in the audit of the financial report of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [596 x 100] intentionally omitted <==

communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

REPORT ON THE REMUNERATION REPORT

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 11 to 16 of the directors’ report for the year ended 4 July 2021.

In our opinion, the Remuneration Report of Ashley Services Group Limited for the year ended 4 July 2021 complies with section 300A of the Corporations Act 2001 .

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

==> picture [179 x 55] intentionally omitted <==

HLB Mann Judd Assurance (NSW) Pty Ltd Chartered Accountants

==> picture [97 x 73] intentionally omitted <==

S P James Director

Sydney, NSW 31 August 2021

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Consolidated Statement of Profit or Loss and Other Comprehensive Income

For the financial year ended 4 July 2021

	Note	4 Jul 2021 $000	5 Jul 2020 $000
Revenue	2	383,672	336,841
Other income	2	334	2,040
Employment costs		(360,928)	(321,668)
Depreciation and amortisation expense	3	(1,785)	(2,068)
Finance costs	3	(648)	(713)
Other expenses		(7,298)	(7,387)
Profit before income tax from continuing operations		13,347	7,045
Income tax expense	5	3,737	1,976
Profit for the year from continuing operations		9,610	5,069
Profit / (Loss) for the year from discontinued operations		-	-
Profit for the year		9,610	5,069
Other comprehensive income		-	-
Total comprehensive income for the year		9,610	5,069

Total comprehensive income for the year is attributable to:
Shareholders of Ashley Services Group Limited		9,150	4,667
Non-controlling interests		460	402
		9,610	5,069

Basic earnings per share (cents) from continuing operations	23	6.36	3.24
Diluted earnings per share (cents) from continuing operations	23	6.36	3.24
Basic earnings per share (cents) from discontinued operations	23	0.00	0.00
Diluted earnings per share (cents) from discontinued operations	23	0.00	0.00
Basic earnings per share (cents) Total	23	6.36	3.24
Diluted earnings per share (cents) Total	23	6.36	3.24

The accompanying notes form part of these financial statements.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Consolidated Statement of Financial Position

For the financial year ended 4 July 2021

Note	4 Jul 2021 $000 5 Jul 2020 $000
Assets
Current assets
Cash and cash equivalents 7	2,969 8,063
Trade and other receivables 8	44,421 29,418
Contract assets 9	791 154
Other assets 10	2,035 1,745
Total current assets	50,216 39,380
Non-current assets
Property, plant and equipment 11	1,247 1,060
Right-of-use assets 12	2,042 2,345
Deferred tax assets 15	5,709 4,694
Intangible assets 13, 14	10,848 9,322
Other assets	111 92
Total non-current assets	19,957 17,513
Total assets	70,173 56,893
Liabilities
Current liabilities
Trade and other payables 16	27,391 18,517
Borrowings 19	1,090 -
Current tax payable 15	1,083 1,634
Dividends payable	460 400
Lease liabilities 17	888 723
Other liabilities 18	1,220 1,412
Provisions 20	3,387 2,453
Total current liabilities	35,519 25,139
Non-current liabilities
Deferred tax liabilities 15	2,341 764
Lease liabilities 17	1,324 1,716
Other liabilities 18	1,973 2,762
Provisions 20	514 682
Total non-current liabilities	6,152 5,924
Total liabilities	41,671 31,063
Net assets	28,502 25,830
Equity
Share capital 21	148,815 148,815
Common control reserve 22	(59,261) (59,261)
Accumulated losses	(61,052) (63,724)
Total equity	28,502 25,830

The accompanying notes form part of these financial statements.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Consolidated Statement of Changes in Equity

For the financial year ended 4 July 2021

		Common		Non-
	Share	Control	Accumulated	controlling
	Capital	Reserve	Losses	Interest	Total
	$000	$000	$000	$000	$000
For the year ended 4 July 2021
Balance at 6 July 2020	148,815	(59,261)	(63,724)	-	25,830
Profit for the period	-	-	9,150	460	9,610
Other comprehensive income for the year	-	-	-	-	-
Total comprehensive income for the year	-	-	9,150	460	9,610
Dividends paid	-	-	(6,479)	(460)	(6,939)
Balance at 4 July 2021	148,815	(59,261)	(61,052)	-	28,502
For the year ended 5 July 2020
Balance at 1 July 2019	148,815	(57,687)	(64,504)	-	26,624
Profit for the period	-	-	4,667	402	5,069
Other comprehensive income for the year	-	-	-	-	-
Total comprehensive income for the year	-	-	4,667	402	5,069
Recognition of non-controlling interest of CCL Group	-	-	-	397	397
Derecognition of non-controlling interest of CCL Group	-	399	-	(399)	-
Other equity	-	(1,973)	-	-	(1,973)
Dividends paid	-	-	(3,887)	(400)	(4,287)
Balance at 5 July 2020	148,815	(59,261)	(63,724)	-	25,830

The accompanying notes form part of these financial statements.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Consolidated Statement of Cash Flows

For the financial year ended 4 July 2021

		4 Jul 2021	5 Jul 2020
	Note	$000	$000
Operating activities
Receipts from customers		411,146	371,567
Payments to suppliers and employees		(401,767)	(354,693)
Interest received		116	22
Interest paid		(448)	(620)
Income taxes paid		(3,624)	(2,151)
Net cash from continuing operations		5,423	14,125
Net cash used in discontinued operations		-	-
Net cash from operating activities	25	5,423	14,125
Investing activities
Payments for property, plant and equipment in continuing operations		(679)	(502)
Payments for intangibles		(114)	(198)
Proceeds from sale of property, plant and equipment		19	139
CCL Group earn-out payment		(798)	-
CCL Group retention payment		(600)	-
Payments for businesses acquired net of cash acquired	26	(1,011)	(4,812)
Net cash used in investing activities		(3,183)	(5,373)
Financing activities
Net proceeds/(repayment) from/(of) external borrowings in continuing operations		1,090	-
Repayment of leasing liabilities		(1,081)	(966)
Dividends paid		(7,343)	(6,507)
Net cash used in financing activities		(7,334)	(7,473)
Net (decrease)/ increase in cash and cash equivalents		(5,094)	1,279
Cash and cash equivalents at beginning of the financial year		8,063	6,784
Cash and cash equivalents at end of the financial year	7	2,969	8,063

The accompanying notes form part of these financial statements.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Notes to the Financial Statements

	Table of Contents
1.	ACCOUNTING POLICIES ----------------------------------------------------------------------------------------- 31
2.	REVENUE AND OTHER INCOME ------------------------------------------------------------------------------- 39
3.	EXPENSES ----------------------------------------------------------------------------------------------------------- 40
4.	AUDITOR’S REMUNERATION ---------------------------------------------------------------------------------- 40
5.	INCOME TAX EXPENSE ------------------------------------------------------------------------------------------ 41
6.	KEY MANAGEMENT PERSONNEL DISCLOSURES ---------------------------------------------------------- 41
7.	CASH AND CASH EQUIVALENTS ------------------------------------------------------------------------------- 42
8.	TRADE AND OTHER RECEIVABLES ---------------------------------------------------------------------------- 42
9.	CONTRACT ASSETS ----------------------------------------------------------------------------------------------- 43
10.	OTHER ASSETS ---------------------------------------------------------------------------------------------------- 43
11.	PROPERTY, PLANT AND EQUIPMENT ------------------------------------------------------------------------ 44
12.	RIGHT-OF-USE ASSETS ------------------------------------------------------------------------------------------ 45
13.	INTANGIBLE ASSETS --------------------------------------------------------------------------------------------- 45
14.	IMPAIRMENT ------------------------------------------------------------------------------------------------------ 46
15.	TAX BALANCES ---------------------------------------------------------------------------------------------------- 48
16.	TRADE AND OTHER PAYABLES -------------------------------------------------------------------------------- 49
17.	LEASE LIABILITIES ------------------------------------------------------------------------------------------------- 49
18.	OTHER LIABILITIES------------------------------------------------------------------------------------------------ 50
19.	BORROWINGS ----------------------------------------------------------------------------------------------------- 50
20.	PROVISIONS ------------------------------------------------------------------------------------------------------- 51
21.	SHARE CAPITAL --------------------------------------------------------------------------------------------------- 52
22.	COMMON CONTROL RESERVE -------------------------------------------------------------------------------- 52
23.	EARNINGS PER SHARE ------------------------------------------------------------------------------------------- 52
24.	SEGMENT INFORMATION -------------------------------------------------------------------------------------- 53
25.	CASH FLOW INFORMATION ----------------------------------------------------------------------------------- 54
26.	BUSINESS COMBINATION -------------------------------------------------------------------------------------- 55
27.	FAIR VALUE MEASUREMENT ---------------------------------------------------------------------------------- 56
28.	CONTROLLED ENTITIES ------------------------------------------------------------------------------------------ 59
29.	PARENT ENTITY DISCLOSURES -------------------------------------------------------------------------------- 61
30.	DEED OF CROSS GUARANTEE --------------------------------------------------------------------------------- 62

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Notes to the Financial Statements

31.	RELATED PARTY TRANSACTIONS ----------------------------------------------------------------------------- 65
32.	SECURED AND CONTINGENT LIABILITIES ------------------------------------------------------------------- 65
33.	FINANCIAL INSTRUMENTS ------------------------------------------------------------------------------------- 65
34.	EVENTS AFTER THE REPORTING DATE ---------------------------------------------------------------------- 68
35.	DIVIDENDS --------------------------------------------------------------------------------------------------------- 68

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

1. ACCOUNTING POLICIES

a. General information

The financial statements for the financial year ended 4 July 2021 cover Ashley Services Group Limited and its controlled entities (“ Ashley Services ” or the “Group” ). Ashley Services Group is a public Company listed on the Australian Securities Exchange (trading under the symbol “ ASH” ), incorporated and domiciled in Australia.

The following is a summary of the material accounting policies adopted by the Group in the preparation of the consolidated financial statements. The accounting policies have been consistently applied unless otherwise stated.

b. Statement of compliance

The consolidated financial statements are general purpose financial statements which have been prepared in accordance with the Corporations Act 2001 and Australian Accounting Standards (including Australian Accounting Interpretations) adopted by the Australian Accounting Standards Board. The consolidated financial statements of the Group also comply with International Financial Reporting Standards (‘IFRS’) adopted by the International Accounting Standards Board. The Group is a for-profit entity for the purposes of preparing the financial statements.

The consolidated financial statements were authorised for issue by the Board of Directors on 31 August 2021.

c. Basis of preparation

Coronavirus (COVID-19) pandemic

The World Health Organisation declared a global pandemic in March 2020 as a result of the COVID-19. The impact of the crisis has had a significant economic impact. The critical accounting estimates and judgements of the Group have required additional consideration and analysis due to the impact of COVID-19. Given the uncertainty of the extent of the impact of the pandemic, changes to the estimates and outcomes that have been applied in the measurement of the Group’s assets and liabilities may arise in the future. Other than adjusting events that provide evidence of conditions that existed at the end of the financial year, the impacts of events that arise after the reporting period will be accounted for in future reporting periods.

Rounding

In accordance with ASIC Corporations (Rounding in Financial / Directors’ Reports) Instrument 2016/191, amounts in the financial report are rounded off to the nearest thousand dollars unless otherwise indicated.

d. Going concern

The consolidated financial statements have been prepared on a going concern basis.

e. Adoption of new, revised or amending Accounting Standards and Interpretations

The Group adopted all of the new, revised or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (“AASB”) that are mandatory for the current reporting period.

Historical cost

The consolidated financial statements have been prepared on an accruals basis and are based on historical costs, except for the measurement at fair value of selected noncurrent assets, financial assets and financial liabilities as disclosed in this note. Cost is based on the fair values of the consideration given in exchange for assets. All amounts are presented in Australian dollars, unless otherwise noted.

The new, revised or amending Accounting Standards and Interpretations adopted did not have a significant impact on the Group’s financial statements.

f. New, revised or amending Accounting Standards and Interpretations issued but not yet mandatory

Any new, revised or amending Accounting Standards and Interpretations that have been published and are not mandatory for 4 July

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

2021 reporting periods and have not been early adopted by the Group.

These new, revised or amending Accounting Standards and Interpretations are not expected to have any material impact on the Group’s financial report in future reporting periods based on the Group’s current activities.

g. Business combinations

Business combinations occur where an acquirer obtains control over one or more businesses and result in the consolidation of its assets and liabilities.

A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed are recognised (subject to certain limited exceptions).

When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.

All transaction costs incurred in relation to the business combination are recognised as expenses in the statement of profit or loss and other comprehensive income when incurred.

The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.

h. Basis of consolidation

The Group financial statements consolidate those of Ashley Services Group Limited and all

of its subsidiaries as of 4 July 2021. Ashley Services Group Limited controls a subsidiary if it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. All subsidiaries have a reporting date of 4 July 2021.

All transactions and balances between Group companies are eliminated on consolidation, including unrealised gains or losses on transactions between Group companies. Where unrealised losses on intra-group asset sales are reversed on consolidation, the underlying asset is also tested for impairment from a group perspective. Amounts reported in the financial statements of subsidiaries have been adjusted where necessary to ensure consistency with the accounting policies adopted by the Group.

Profit or loss and other comprehensive income of subsidiaries acquired or disposed of during the year are recognised from the effective date of acquisition, or up to the effective date of disposal, as applicable.

Non-controlling interests, presented as part of equity, represent the portion of a subsidiary’s profit or loss and net assets that is not held by the Group. The Group attributes total comprehensive income or loss of subsidiaries between the owners of the parent and the noncontrolling interests based on their respective ownership interests.

i. Revenue and other income

Revenue for both labour hire and training services is recognised at an amount that reflects the consideration to which the Group is expected to be entitled in exchange for transferring services to a customer. For each contract with a customer, the Group undertakes the following:

i. Identifies the contract with a customer
ii. Identifies the performance obligations in the contract
iii. Determines the transaction price which considers estimates of variable consideration and time value of money

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

iv. Allocates the transaction price to the separate performance obligations based on the relative stand-alone selling price of each distinct service to be delivered
v. Recognises revenue when, or as, each performance obligation is satisfied in a manner that depicts the transfer to the customer of the services promised.

All revenue is stated net of the amount of GST.

Labour hire

Labour hire revenue is recognised upon delivery of the service to the customers or in the instance of placement fees at the time the employee has been placed. Revenue from a contract to provide labour hire services is recognised over time as services are rendered based predominantly on an hourly rate.

Training revenue

Revenue from a contract to provide training services is recognised over time as the services are rendered using the percentage of completion method that depicts the transfer to the customer of the services rendered.

Interest revenue

Interest revenue is recognised using the effective interest method, which for floating rate financial assets is the rate inherent in the instrument.

Dividend revenue

Dividend revenue is recognised when the right to receive a dividend has been established, usually on declaration of the dividend / distribution.

Other income

Other income primarily includes State funding employer rebates earned in relation to specified categories of individuals.

j. Government grants and subsidies

Government grants and subsidies 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.

k. Income tax

The income tax expense (income) for the year comprises current income tax expense (income) and deferred tax expense (income).

Current income tax expense charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid to (recovered from) the relevant taxation authority.

Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well as unused tax losses.

Current and deferred income tax expense (income) is charged or credited directly to equity instead of profit or loss when the tax relates to items that are credited or charged directly to equity.

Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability where there is no effect on accounting or taxable profit or loss.

Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability.

Deferred tax assets relating to temporary differences and 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.

Where temporary differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary differences can be controlled and it is not probable that the reversal will occur in the foreseeable future.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.

Tax consolidation

Ashley Services Group Limited and its wholly owned Australian subsidiaries have formed an income tax consolidated group under tax consolidation legislation. The CCL Group companies being 80% owned are not part of this income tax consolidated group. Each entity in the group recognises its own current and deferred tax assets and liabilities. Such taxes are measured using the ‘standalone taxpayer’ approach to allocation. Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits in the subsidiaries are immediately transferred to head entity. The group notified the Australian Taxation Office that it has formed an income tax consolidation group to apply from 1 July 2003. The income tax consolidated group has entered a tax funding arrangement whereby each company in the Group contributes to the income tax payable by the Group in proportion to their contributions to the Group’s taxable income.

Differences between the amounts of net tax assets and liabilities derecognised and the net amounts recognised pursuant to the funding arrangement are recognised as either a contribution by, or distribution, to the head entity.

l. Cash and cash equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other short term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown with short term borrowings in current liabilities on the consolidated statement of financial position.

m. Trade and other receivables

Trade and other receivables include amounts due from customers for services performed in the ordinary course of business. Receivables expected to be collected within 12 months of the end of the reporting period are classified as current assets. All other receivables are classified as non-current assets.

Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective interest method, less any provision for impairment.

The recoverability of trade receivables is reviewed on an ongoing basis. Amounts which are determined not to be recoverable are written off by reducing the carrying amount to its recoverable amount, the difference is charged to the statement of profit or loss and other comprehensive income in that period.

Expected credit losses, described in previous years’ financial statements of the Group as an allowance for impairment, are measured by the Group by applying a simplified approach which uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days overdue.

n. Contract assets

Contract assets are recognised when the Group has transferred goods or services to the customer but where the Group is yet to establish an unconditional right to consideration. Contract assets are treated as financial assets for impairment purposes.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

o. Property, plant and equipment

Each class of property, plant and equipment is carried at cost, less where applicable, any accumulated depreciation and impairment losses.

Property, plant and equipment is stated at historical cost less accumulated depreciation and any accumulated impairment losses.

The depreciable amount of fixed assets is depreciated on a straight line basis, over the useful asset’s life to the Group commencing from the time the assets are held ready for use.

The annual depreciation rates used for each class of depreciable assets are:

	Depreciation
• Class of fixed assets	rate
Computer equipment	20 - 33%
Office equipment	20 - 33%
Furniture and fittings	10%
Motor vehicles	18.75 - 25%
Trainingequipment	33%
Leasehold improvements	20 - 50%

In the case of leasehold improvements, expected useful lives are determined by reference to comparable owned assets or over the term of the lease, if shorter.

The carrying amount of property, plant and equipment is reviewed annually at the end of the reporting period by the Directors to ensure it is not in excess of the recoverable amount of these assets.

The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains or losses on disposals are determined by comparing proceeds with carrying amount.

These gains or losses are recognised immediately in profit or loss.

p. Intangible assets

Goodwill

Goodwill is initially recognised as the difference between the fair value of consideration, and the fair value of net assets acquired less any accumulated impairment losses.

The value of goodwill is recognised on acquisition of the business.

The Group adopts the full goodwill method. The fair value of the interests in the business is determined using valuation techniques which make the maximum use of market information where available. Under this method, goodwill attributable to the interests of the business is recognised in the financial statements.

Goodwill is tested for impairment annually and is allocated to the Group’s cash-generating units or group of cash-generating units, which represent the lowest level at which goodwill is monitored but where such level is not larger than an operating segment. Gains or losses on the disposal of equity include the carrying amount of goodwill related to the entity sold.

Changes in the ownership interest in a subsidiary are accounted for as equity transactions and do not affect the carrying amounts of goodwill.

Other intangibles

Intangibles acquired by the group are stated at cost less accumulated amortisation and impairment losses. Amortisation is charged to the profit or loss on a straight line basis over the estimated useful life.

Estimated useful life of intangibles is as follows:

Customer relationships	7 years
Licenses	5 years
Intellectual property
- Course material	5-7 years

Intangible assets, such as Brands, which are deemed to have an indefinite useful life are not amortised, but are assessed for impairment annually, within the CGU to which they are

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

attributed. Where impairment is recognised, it is recorded in the profit or loss in the period the impairment is identified.

q. Impairment of assets

At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired.

The assessment will include considering external sources of information and internal sources of information including dividends received from subsidiaries, deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell, and its value in use, to the asset’s carrying amount. Any excess of the asset’s carrying value over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount. Any impairment loss of a revalued asset is treated as a revaluation decrease.

Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Impairment testing is performed at least annually for goodwill and intangible assets with indefinite lives.

r. Trade and other payables

Trade and other payables represent the liabilities for goods and services received by the Group that remain unpaid at the end of the reporting period. The balance is recognised as a current liability with the amounts normally paid within 30 days of recognition of the liability.

s. Employee benefits

Provision is made for the Group’s liability for the employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee

benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may not satisfy vesting requirements. Those cash flows are discounted using market yields on HQ corporate bonds with terms to maturity that match the expected timing of cash flows.

t. Provisions

Provisions are recognised when the Group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured. Provisions are measured at the best estimate of the amounts required to settle the obligation at the end of the reporting period.

u. 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.

Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down.

v. Comparative figures

When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

w. GST

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the ATO.

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 ATO is included with other receivables or payables in the balance sheet.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

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 ATO are presented as operating cash flows included in receipts from customers or payments to suppliers.

x. Significant management judgement in applying accounting policies

When preparing the financial statements, management undertakes a number of judgements, estimates and assumptions about the recognition and measurement of assets, liabilities, income and expenses.

Significant management judgement

The following are significant management judgements in applying the accounting policies of the Group that have the most significant effect on the financial statements.

Determination of Cash Generating Units for purpose of impairment reviews

Determination of the Cash Generating Units (“CGUs”) for purpose of impairment reviews is a key judgement made by management. Management has undertaken a formal assessment of what constitutes the CGUs, by identifying the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or group of assets, being Training and Labour Hire.

Recognition of deferred tax assets

The extent to which deferred tax assets can be recognised is based on an assessment of the probability of the Group’s future taxable income against which the deferred tax assets can be utilised.

Lease term

The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods to be

included in the lease term. In determining the lease term, all facts and circumstances that create an economical incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease commencement date. Factors considered may include the importance of the asset to the Group's operations; comparison of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain to exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in circumstances.

Estimation uncertainty

Information about estimates and assumptions that have the most significant effect on recognition and measurement of assets, liabilities, income and expenses is provided below. Actual results may be substantially different.

Impairment

In assessing impairment, management estimates the recoverable amount of each asset or cash-generating unit based on expected future cash flows and uses an interest rate to discount them. Estimation uncertainty relates to assumptions about future operating results and the determination of a suitable discount rate. Both future operating results and discount rates are discussed in Note 14. In 2021, the Group recognised no impairment losses on goodwill and/or other intangible assets (see Note 14).

Useful lives of depreciable assets

Management reviews its estimate of the useful lives of depreciable assets at each reporting date, based on the expected utility of the assets. Uncertainties in these estimates relate to technical obsolescence that may change the utility of certain software and IT equipment.

Allowance for expected credit losses

The allowance for expected credit losses assessment requires a degree of estimation and

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

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 and historical collection rates.

Incremental borrowing rate

Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate of 3.00% has been estimated to discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such a rate is based on what the Group estimates it would have to pay a third party to borrow the funds necessary to obtain an asset of a similar value to the rightof-use asset, with similar terms, security and economic environment.

Long service leave provisions

In determining the provision for employees’ long service leave, consideration is given to the probability an employee may not satisfy vesting requirements. In doing this, management considers the likelihood of employees reaching a qualifying period of service and adjust the valuation for these estimated probabilities.

Long term incentive plan

In determining the provision for senior management’s long term incentive plan, consideration is given to the probability the required “earnings per share” performance requirement being achieved to be remote, and therefore a provision has not been recognised in relation to this.

subsequently as a result of the Coronavirus (COVID-19) pandemic.

y. Dividends

A liability is recognised for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the financial year but not distributed at balance date.

z. Earnings per share

Basic earnings per share

Basic earnings per share is calculated by dividing the profit attributable to equity holders of the Company, after deducting 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 year.

Diluted earnings per share

Diluted earnings per share adjusts the figures used in determination of basic earnings 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.

Coronavirus (COVID-19) pandemic

Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may have, on the Group based on known information. This consideration extends to the nature of the Group operations. Other than as addressed in specific notes, there does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties with respect to events or conditions which may impact the Group unfavourably as at the reporting date or

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

2. REVENUE AND OTHER INCOME

	2021	2020
	$000	$000
Operatingactivities:
Labour hire revenue	373,963	329,517
Trainingrevenue	9,709	7,324
	383,672	336,841
Other income:
Interest received	117	22
Sundryincome	217	2,018
	334	2,040

a. Disaggregation of revenue

The disaggregation of revenue from contracts with customers is as follows:

	Labour Hire	Training	Total
2021	$000	$000	$000
Revenue
From external customers	373,963	9,709	383,672

Timingof revenue recognition
Services transferred over time	362,024	9,709	371,733
Services transferred at apoint in time	11,939	-	11,939
	373,963	9,709	383,672

	Labour Hire	Training	Total
2020	$000	$000	$000
Revenue
From external customers	329,517	7,324	336,841

Timingof revenue recognition
Services transferred over time	319,820	7,324	327,144
Services transferred at apoint in time	9,697	-	9,697
	329,517	7,324	336,841

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

3. EXPENSES

Profit before income tax from continuing operations includes the following specific expenses:

	2021	2020
	$000	$000
Depreciation
Motor vehicles	86	57
Office equipment	347	503
Leasehold improvements	42	144
Land and buildings right-of-use assets	1,067	986
	1,542	1,690
Amortisation
Customer contracts and relationships – amortisation	108	129
Course material	135	249
	243	378
Finance costs
Interest and finance chargespaid/payable on borrowings	453	544
Interest and finance chargespaid/payable on lease liabilities	67	75
Bank fees	128	94
	648	713

4. AUDITOR’S REMUNERATION

	2021	2020
	$	$
Auditor of the parent entity
Audit and review of financial reports under the_Corporations Act 2001_ - HLB Mann Judd Assurance(NSW)PtyLtd	154,000	151,000
Total Remuneration	154,000	151,000
Other entities
In addition to the above, the related entities detailed in Note 28 have also
paid fees to the auditor(s)as follows:
Audit of financial reports - HLB Mann Judd Assurance(NSW)PtyLtd	55,250	55,500
	55,250	55,500

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

5. INCOME TAX EXPENSE

a. Components of tax expense for continuing operations

	2021	2020
	$000	$000
Current tax expense	3,363	3,221
Deferred tax – origination and reversal of temporary differences	561	(1,291)
Under / (over) provision of tax in prior year	(184)	84
– Change in tax rate – CCL Group	-	(38)
– Change in tax rate – TIC	(3)	-
Income tax expense	3,737	1,976
b. Reconciliation of prima facie tax on profit from ordinary activities to income tax expense
	2021	2020
	$000	$000
Net profit before tax from continuing operations	13,347	7,045
Prima facie tax expense on net profit from ordinary activities before income
tax at 30% (FY20: 30%)	4,004	2,113
Add / (less) Tax effect of:
– Entertainment	10	22
– Other	3	1
– Change in tax rate – CCL Group	-	(38)
– Change in tax rate – TIC	(3)	-
– Intangible assets	(93)	(206)
– Under / (over) provision of tax in prior year	(184)	84
Income tax expense	3,737	1,976

The tax rate used in the above reconciliation is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. There has been no change in the corporate tax rate when compared with the previous reporting period.

6. KEY MANAGEMENT PERSONNEL DISCLOSURES

a. Key management personnel compensation for the year was as follows

	2021	2020
	$	$
Short-term employee benefits	1,467,291	1,526,863
Post-employment benefits	84,602	82,529
Total	1,551,893	1,609,392

b. Individual director and key management personnel disclosures

Detailed remuneration disclosures are included in the Directors’ Report. The relevant information can be found in the Remuneration section of the Directors’ Report on pages 13 to 15, Tables 8 to 11.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

7. CASH AND CASH EQUIVALENTS

		2021	2020
		$000	$000
Cash	on hand	2	4
Cash	at bank	2,967	8,059
		2,969	8,063
8.	TRADE AND OTHER RECEIVABLES
		2021	2020
		$000	$000
Current
Trade receivables		37,611	27,742
Allowance for expected credit losses		(193)	(406)
Other receivables		7,003	2,082
		44,421	29,418

a. Ageing of trade receivables (before allowing for impairment of receivables) at year end is detailed below

	2021	2020
	$000	$000
Current	34,514	23,586
Past due 0 – 30 days (not considered impaired)	1,451	1,407
Past due 31 – 60 days (not considered impaired)	469	582
Past due 60+ days (not considered impaired)	984	1,761
Past due 60+ days (considered impaired (b))	193	406
	37,611	27,742

b. The movement in the allowance for expected credit losses in respect of trade receivables is detailed below

	2021	2020
	$000	$000
Balance at beginning of year	406	10
CCL Group	0	361
Increase/(decrease) in allowance recognised in profit or loss	164	52
Amounts written-off	(377)	(17)
Balance at end of year	193	406

The directors of Ashley Services Group Limited are of the opinion that there has been no material impact on the basis of determining the recoverability of trade and other receivables due to COVID-19 beyond the allowance for expected credit losses already provided for.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

9. CONTRACT ASSETS

	2021	2020
	$000	$000
Current
Contract assets	791	154
	791	154
10. OTHER ASSETS
	2021	2020
	$000	$000
Current
Prepayments1	1,366	1,240
Deposits	162	-
Bank guarantee2	507	505
	2,035	1,745

Note:

Prepayments include prepaid contract costs of $543,003 (2020: $400,983)
As at balance date the Group had bank guarantees of $222,366 relating to property leases. The $507,158 represents a restricted bank account to cover the Group’s total available guarantee facility of $507,158.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

11. PROPERTY, PLANT AND EQUIPMENT

	2021	2020
	$000	$000
Motor vehicles
Cost	797	576
Accumulated depreciation	(438)	(387)
	359	189
Office equipment
Cost	4,781	4,649
Accumulated depreciation	(4,212)	(4,006)
	569	643
Leasehold improvements
Cost	1,598	1,782
Accumulated depreciation	(1,512)	(1,712)
	86	70
Capital works in progress
Cost	233	158
	233	158
Total property, plant and equipment	1,247	1,060

a. Movement in carrying amounts of property, plant and	a. Movement in carrying amounts of property, plant and	equipment
	Motor	Office	Leasehold	Capital work
	vehicles	equipment	improvements	in progress	Total
2021	$000	$000	$000	$000	$000
Balance at 6 July 2020	189	643	70	158	1,060
Additions/(transfers)	265	281	58	75	679
Disposals	(9)	(8)	-	-	(17)
Depreciation expense – continuing operations	(86)	(347)	(42)	-	(475)
Balance at 4 July 2021	359	569	86	233	1,247

	Motor	Office	Leasehold	Capital work
	vehicles	equipment	improvements	in progress	Total
2020	$000	$000	$000	$000	$000
Balance at 1 July 2019	32	941	150	17	1,140
CCL Group at 1 July 2019	228	37	5	-	270
Additions/(transfers)	85	199	60	158	502
Disposals	(99)	(31)	(1)	(17)	(148)
Depreciation expense – continuing operations	(57)	(503)	(144)	-	(704)
Balance at 5 July 2020	189	643	70	158	1,060

The Group’s property, plant and equipment are encumbered by a fixed and floating charge as security for the group’s working capital facility (Refer Note 19).

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

12. RIGHT-OF-USE ASSETS

	2021	2020
	$000	$000
Land and buildings	4,095	3,331
Accumulated depreciation	(2,053)	(986)
	2,042	2,345

Note:

Additions to the right-of-use assets during the year were $764,514.
The Group leases land and buildings for its offices under agreements of between 1 to 5 years with, in some cases options to extend.

13. INTANGIBLE ASSETS

	2021	2020
	$000	$000
Goodwill
Cost	71,558	65,256
Acquisition CCL Group	-	6,302
Acquisition TIC	1,654	-
Impairment (note 14)	(62,474)	(62,474)
Net carrying value	10,738	9,084
Customer relationships/Licences
Cost	2,062	2,062
Impairment (note 14)	(918)	(918)
Accumulated amortisation	(1,144)	(1,036)
Net carrying value	-	108
Brand names
Cost	4,640	4,640
Impairment(note 14)	(4,640)	(4,640)
Net carrying value	-	-
Intellectualproperty
Cost	8,445	8,330
Impairment(note 14)	(3,896)	(3,896)
Accumulated amortisation	(4,439)	(4,304)
Net carrying value	110	130
Total intangible assets	10,848	9,322

a. Intangible assets – detailed reconciliation

		Customer
		Relationships	Brand	Intellectual
	Goodwill	and Licences	Names	Property	Total
2021	$000	$000	$000	$000	$000
Balance at 6 July 2020	9,084	108	-	130	9,322
Acquisition TIC	1,654	-	-	-	1,654
Additions	-	-	-	115	115
Amortisation – continuing operations	-	(108)	-	(135)	(243)
Balance at 4 July 2021	10,738	-	-	110	10,848

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

		Customer
		Relationships	Brand	Intellectual
	Goodwill	and Licences	Names	Property	Total
2020	$000	$000	$000	$000	$000
Balance at 1 July 2019	2,782	237	-	181	3,200
Acquisition CCL Group	6,302	-	-	-	6,302
Additions	-	-	-	198	198
Amortisation – continuing operations	-	(129)	-	(249)	(378)
Balance at 5 July 2020	9,084	108	-	130	9,322

14. IMPAIRMENT

a. Impairment

The consolidated entity tests whether goodwill and other intangible assets have suffered any impairment on an annual basis, or more frequently, if required.

All remaining goodwill and other intangibles were confined to the Labour Hire division in the prior year but now includes the Training division in FY21. The Training division now has intangibles again as a result of the acquisition of The Instruction Company in the 2021 financial year.

There were no indicators of impairment in relation to either the Labour Hire division or the Training division at 4 July 2021.

Labour Hire division

The recoverable amount of the Labour Hire division has been determined based on a value in use calculation. That calculation uses cash flow projections based on financial forecasts approved by management for FY22 and covering detailed forecasts for a further four years, followed by an extrapolation of expected cash flows for the units’ remaining useful lives using the growth rates determined by management. The present value of the expected cash flows has been determined by applying a suitable discount rate of 14.0 per cent. Cash flows up to year 5 have been held constant, reflecting the competitive nature of the industry.

Management’s key assumption is that revenue for the Labour Hire division will increase by 17% in FY22. EBITDA margin is forecast at 4.9% (before corporate overhead allocations).

Training division

The recoverable amount of the Training division has been determined based on a value in use calculation. That calculation uses cash flow projections based on financial forecasts approved by management for FY22 and covering detailed forecasts for a further four years, followed by an extrapolation of expected cash flows for the units’ remaining useful lives using the growth rates determined by management. The present value of the expected cash flows has been determined by applying a suitable discount rate of 14.0 per cent. Cash flows up to year 5 have been held constant, reflecting the competitive nature of the industry.

Management’s key assumption is that revenue for the Training division will increase by 49% in FY22. EBITDA margin is forecast at 16.5% (before corporate overhead allocations).

Long term growth rates after the forecast period and discount rates used were as follows:

	Terminal Growth rates	Terminal Growth rates	Pre-tax discount rates	Pre-tax discount rates
	4 July 2021	5 July 2020	4 July 2021	5 July 2020
Labour Hire	0%	0%	14.0%	18.7%
Training	0%	N/A	14.0%	N/A

The growth rate reflects management’s view of longer-term average growth rates for the respective sectors. The discount rate reflects appropriate adjustments relating to market risk and specific risk factors of each unit.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

The directors of Ashley Services Group Limited are of the opinion that there has been no material impact on the basis of determining the recoverability of the Labour Hire or Training division due to COVID-19.

b. Impairment charges

As a result of the analysis, there is no need for any impairment charges in the FY21 results. The same analysis in the prior year resulted in no impairment charge being recorded in the FY20 results.

Movements in the net carrying amount of goodwill and other intangibles are presented in note 13.

The amount of goodwill, brand names and other intangibles remaining by CGU and subject to future impairment testing is as follows:

		Customer	Brand Names	Intellectual	Total
2021	Goodwill $’000	Relationships/ Licences	$’000	Property $’000	$’000
		$’000
Training	1,654	-	-	110	1,764
Labour Hire	9,084	-	-	-	9,084
Total	10,738	-	-	110	10,848

		Customer	Brand Names	Intellectual	Total
2020	Goodwill $’000	Relationships/ Licences	$’000	Property $’000	$’000
		$’000
Training	-	-	-	130	130
Labour Hire	9,084	108	-	-	9,192
Total	9,084	108	-	130	9,322

c. Sensitivity analysis

Management has also run various sensitivity scenarios, primarily reviewing sensitivity of outcomes to FY22 EBITDA forecasts, long term growth rates and discount rates. In respect of reasonably possible changes in the key assumptions, major sensitivities are summarised as follows:

Change in VIU	Labour hire CGU	Training CGU
	$’M	$’M
Sustainable EBITDA margin; +/- $0.5 million each CGU	+/-4.0	+/-3.0
1% increase or decrease in long term growth rate	+/-4.0	+/-0.15
1% increase or decrease in pre-tax discount rate	+/-11.0	+/-0.152

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

15. TAX BALANCES

	2021	2020
	$000	$000
Current assets
Income tax receivable	-	-
Non-current assets
Deferred tax assets (a)	5,709	4,694
Current tax liabilities
Income tax payable	1,083	1,634
Non-current liabilities
Deferred tax liabilities (a)	2,341	764

a. Deferred tax assets and liabilities

Deferred taxes arising from temporary differences and unused tax losses can be summarised as follows:

		Recognised in
	Balance at	Other	Recognised	Recognised	Balance
	Beginning	Comprehensive	in Business	in Profit &	at End of
	of the Year	Income	Combination	Loss	the Year
2021	$000	$000	$000	$000	$000
Current assets
Trade, other receivables and other assets	(510)	-	-	(1,531)	(2,041)
Contract assets	(46)	-	-	(191)	(237)
Non-current assets
Intangible assets	(32)	-	-	32	-
Property, plant and equipment	296	-	-	(58)	238
Right-of-use assets1	28	-	-	23	51
Current liabilities
Trade and other payables	3,198	-	-	989	4,187
Provisions	943	-	-	227	1,170
2020 Tax loss carried forward
Deferred tax asset	52	-	-	(52)	-
Total	3,929	-	-	(561)	3,368

Note:

This amount is net of lease liabilities.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

		Recognised in
	Balance at	Other	Recognised	Recognised	Balance
	Beginning	Comprehensive	in Business	in Profit &	at End of
	of the Year	Income	Combination	Loss	the Year
2020	$000	$000	$000	$000	$000
Current assets
Trade, other receivables and other assets	(720)	-	-	210	(510)
Contract assets	(171)	-	-	125	(46)
Non-current assets
Intangible assets	(71)	-	-	39	(32)
Property, plant and equipment	319	-	-	(23)	296
Right-of-use assets1	-	-	-	28	28
Current liabilities
Trade and other payables	2,037	-	-	1,161	3,198
Provisions	1,244	-	-	(301)	943
2019 Tax loss carried forward
Deferred tax asset	-	-	-	52	52
Total	2,638	-	-	1,291	3,929

16. TRADE AND OTHER PAYABLES

	2021	2020
	$000	$000
Current
Trade payables	5,205	1,442
Accrued expenses	6,197	5,354
GST payable	4,321	4,281
Sundry creditors	11,668	7,440
	27,391	18,517

Average credit period on purchases of products and services is 30 days. No interest is charged on trade payables. The Group has financial risk management policies in place to ensure payables are paid within credit time frame.

17. LEASE LIABILITIES

	2021	2020
	$000	$000
Current	888	723
Non-current	1,324	1,716
	2,212	2,439

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

18. OTHER LIABILITIES

	2021	2020
	$000	$000
Current
CCL Contingent Consideration - Retention	-	600
CCL Contingent Consideration – Earn Out Year 1	-	789
CCL Contingent Consideration – Earn Out Year 2	825	-
The Instruction Company Deferred Consideration	375	-
Other	20	23
Other liabilities (Current)	1,220	1,412
Non-current
CCL Contingent Consideration – Earn Out Year 2	-	789
Redemption Liability	1,973	1,973
Other liabilities (Non-current)	1,973	2,762

Redemption Liability

The redemption liability is a Put Option which represents a contractual obligation to purchase a non-controlling interest and originated from a previous business combination to acquire the CCL Group. The liability is a financial liability and has been measured at the present value of the redemption amount or the put option consideration amount in accordance with the underlying CCL Group Share Sale and Purchase Agreement.

The Put Option can be exercised by any of the Remaining Shareholders (acting independently of the others): ▪ at any time upon the occurrence of a Control Event in respect of Ashley Services Group Limited; ▪ with the Extended EBAs in respect of both CTS and CCL having now been entered into (during January 2021) – at any time after 20 December 2022;

The Put Option expires 20 years after Completion but the Purchaser has the right to reduce this to 10 years.

19. BORROWINGS

	Available facility	Facility used	Remaining facility
2021	$000	$000	$000
Invoice Financing	13,000	679	12,321
Bank Bill Business Loan	4,375	411	3,964
Balance at 4 July 2021	17,375	1,090	16,285

	Available facility	Facility used	Remaining facility
2020	$000	$000	$000
Invoice Financing	13,000	-	13,000
Bank Bill Business Loan	6,125	-	6,125
Balance at 5 July 2020	19,125	-	19,125

Working capital facility

During the financial year ended 5 July 2020, Ashley Services Group Limited entered into a new banking partnership facility with the Westpac Banking Corporation which included all transactional banking requirements as well as a $20 million financing facility, comprised of a $13 million Invoice Financing facility and a $7 million Bank Bill Business Loan (Reduces progressively over a term of 3 years).

The Westpac facility is subject to a Security which includes, but is not limited to the following:

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

1[st] ranking General Security Agreement over the assets and undertakings of the Borrower and its Guarantors;
Contractual Subordination of Shrimpton Holdings Pty Ltd facility of $5 million; and
Flawed Asset Arrangement – Deposit of Action Workforce Pty Ltd and Concept Engineering (AUST) Pty Ltd for Invoice Finance Facility collections.

As at 4 July 2021, both the current $4.375 million Bank Bill Business Loan and the $13 million Invoice Financing facility were drawn to a combined $1.09 million (5 July 2020, Nil).

The $5 million working capital facility through Shrimpton Holdings Pty Limited, a company associated with Ross Shrimpton, Managing Director, major shareholder of the Group, was re-evaluated by the Board in line with its expiry date. The facility was determined to be in excess of the Group’s funding requirements following the establishment of the new Westpac facilities. Accordingly, this facility was not been renewed and expired on 31 January 2020.

20. PROVISIONS

	2021	2020
	$000	$000
Current
Employee benefits (a)	3,337	2,404
Provision for discontinued operation (b)	50	49
Total	3,387	2,453
Non-current
Employee benefits (a)	414	365
Provision for discontinued operation (b)	100	317
Total	514	682

a. Reconciliation of employee provisions

	2021	2020
	$000	$000
Opening balance	2,769	2,484
CCL Group at 1 July 2019	-	245
TIC at 6 July 2020	137	-
Less: leave taken during the year	(3,136)	(1,615)
Add: leave provided for during the year	3,981	1,655
Closing balance	3,751	2,769

b. Provision for discontinued operation

During the second half of financial year ended 30 June 2017, the Board approved an orderly exit from the international and domestic hospitality student business originally acquired through the SILK acquisition in April 2015. The Group has fulfilled its obligations for the remaining students and the Registered Training Organisation (“RTO”) has been deregistered through the Australian Skills Quality Authority (“ASQA”).

The $0.15 million provision at 4 July 2021 (FY20: $0.37 million) represents the discounted cost of future surplus lease obligations.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

21. SHARE CAPITAL

The Company does not have any share options on issue as at the date of this report. Details of share capital of the group are as follows:

	2021	2020
	$000	$000
143,975,904 (FY20: 143,975,904) fully paid ordinary shares	154,234	154,234
Share issue costs	(5,419)	(5,419)
Share capital	148,815	148,815

a. Ordinary shares

The reduction in Share Capital from 150,000,000 shares ($149.9m) at 30 Jun 16 to 143,975,904 shares ($148.8m) net of share issue costs at 4 July 2021 was the result of the cancellation of 6,024,096 shares issued by way of consideration to fund the purchase of Integracom as approved by shareholders at the AGM of 9 November 2016.

Ordinary shares confer on their holders the right to participate in dividends declared by the Board. Ordinary shares confer on their holders an entitlement to vote at any general meeting of the Company.

22. COMMON CONTROL RESERVE

The common control reserve has arisen following the adoption of the pooling of interests method used to account for the acquisition of the following entities since 1 July 2014:

ADV Services Pty Limited;
Ashley Institute Holdings Pty Limited;
TBRC Holdings Pty Limited;
Tracmin Pty Limited; and
Australian Institute of Vocational Development Pty Limited; and
CCL Group (Construction Contract Labour (VIC) Pty Ltd, Complete Traffic Services (VIC) Pty Ltd and VIC Traffic and Labour Solutions Pty Ltd)

23. EARNINGS PER SHARE

	2021	2020
	$000	$000
Profit after tax for theyear attributable to shareholders	9,150	4,667
Weighted number of ordinary shares outstanding during the year used in
calculatingbasic earningsper share(EPS)	143,975,904	143,975,904
Weighted number of ordinary shares outstanding during the year used in
calculatingdiluted earningsper share(EPS)	143,975,904	143,975,904
Basic earningsper share(cents)from continuingoperations	6.36	3.24
Diluted earningsper share(cents)from continuingoperations	6.36	3.24
Basic earningsper share(cents)from discontinued operations	-	-
Diluted earningsper share(cents)from discontinued operations	-	-
Basic earnings per share(cents) Total	6.36	3.24
Diluted earnings per share(cents) Total	6.36	3.24

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

24. SEGMENT INFORMATION

The Group’s management identifies two operating segments, Labour Hire and Training, representing the main products and services provided by the Group. During the financial year ended 4 July 2021, there have been no changes from prior periods in the measurement methods used to determine operating segments and reported segment profit or loss. The revenues and profit generated by each of the Group’s operating segments are summarised as follows:

	Labour Hire	Training	Total
2021	$000	$000	$000
Revenue
From external customers	373,963	9,709	383,672
Segment revenue	373,963	9,709	383,672
Other income	256	76	332
Employment costs	(351,515)	(6,720)	(358,235)
Depreciation and amortisation expense	(764)	(756)	(1,520)
Finance costs	(191)	(17)	(208)
Other expenses	(4,705)	(1,055)	(5,760)
Segment Profit	17,044	1,237	18,281
Unallocated items			(4,934)
Profit before income tax			13,347
Income tax expense			(3,737)
Profit after income tax			9,610
Other comprehensive income			-
Total comprehensive income for the year from continuing			9,610
operations

	Labour Hire	Training	Total
2020	$000	$000	$000
Revenue
From external customers	329,517	7,324	336,841
Segment revenue	329,517	7,324	336,841
Other income	1,510	502	2,012
Employment costs	(313,646)	(5,933)	(319,579)
Depreciation and amortisation expense	(803)	(643)	(1,446)
Finance costs	(170)	(9)	(179)
Other expenses	(4,851)	(1,071)	(5,922)
Segment Profit	11,557	170	11,727
Unallocated items			(4,682)
Profit before income tax			7,045
Income tax expense			(1,976)
Profit after income tax			5,069
Other comprehensive income			-
Total comprehensive income for the year from continuing			5,069
operations

No segments assets or liabilities are disclosed because there is no measure of segments assets or liabilities regularly reported to Management and to the Board.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

a. Information about major customers

Included in revenues from external customers are revenues of $109.90 million (2020: $94.5 million) which arose from sales to 2 (2020: 2) of the Group’s customers whose individual revenue exceeds 10% of total revenue in the Labour Hire segment. Sales to these 2 customers were $54 million and $55.9 million respectively (2020: $60.2 million and $34.3 million respectively).

There are no customers whose individual revenue exceeded 10% of total revenue in the Training segment in either financial year.

25. CASH FLOW INFORMATION

Reconciliation of cash flow from operations to profit after income tax

	2021	2020
	$000	$000
Profit for the year	9,610	5,069
Cash flows excluded from profit attributable to operating
activities
Adjustments for non-cash items:
- Depreciation and amortisation expense	1,785	2,068
- Bad and doubtful debts	164	52
- Profit/(loss) on disposal of fixed assets	(36)	11
- Lease liability non-cash expense	67	75
- Loss on contingent consideration	45	-
- Changes in assets and liabilities
- Decrease/(increase) in trade and other receivables	(15,003)	(894)
- Decrease/(increase) in contract assets	(637)	417
- Decrease/(increase) in other assets	(309)	(393)
- Decrease/(increase) in deferred tax assets	(1,015)	(1,092)
- (Decrease)/increase in trade and other payables	9,881	3,447
- (Decrease)/increase in dividends payable	60	400
- (Decrease)/increase in provisions	766	(335)
- (Decrease)/increase in other liabilities	(981)	4,173
- (Decrease)/increase in current tax liabilities	(551)	1,327
- (Decrease)/increase in deferred tax liabilities	1,577	(200)
Net cash from operating activities	5,423	14,125

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

26. BUSINESS COMBINATION

During the year ended 4 July 2021, 100% of the shares in The Instruction Company (TIC) were acquired. The acquisition was completed on 15 September 2020 with a financial effective date of 6 July 2020.

The acquisition price for the purchase of The Instruction Company was $1.85 million. The initial payment of $1.1 million was made on completion with a further deferred consideration payment of $0.375 million made during June 2021. A further final deferred consideration payment is due to be made during September 2021.

The Instruction Company is a Registered Training Organisation (RTO) servicing the Rail sector since 1996, creating and delivering rail training solutions to track owners, rail operators, contractors and service providers across Australia.

		6 July 20201
	Note	$000
Purchase consideration
Cash consideration paid Sep-20		1,100
Deferred consideration paid Mar-21		375
Deferred consideration due Sep-21	18	375
Total consideration		1,850

Assets and liabilities acquired:
Cash and cash equivalents		464
Trade and other receivables		539
Deferred tax assets		37
Trade and other payables		(327)
Dividends payable		(464)
Current tax payable		(34)
Non-current liabilities		(19)
Fair value of assets acquired		196

Goodwill on acquisition		1,654

Cashflows on acquisition
Cash consideration paid Sep-20		1,100
Deferred consideration paid Mar-21		375
Cash acquired		(464)
Total cashflow outflows on acquisition to 4 July 2021		1,011

Note:

Effective date of TIC acquisition.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

27. FAIR VALUE MEASUREMENT

Fair value hierarchy

The following tables detail the Group’s assets and liabilities, measured or disclosed at fair value, using a threelevel hierarchy, based on the lowest level of input that is significant to the entire fair value measurement, being: Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2: Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Unobservable inputs for the asset or liability.

Level 1 $000	Level 2 $000	Level 3 $000	Total $000
- - - -	- 375 825 -	- - - 1,973	- 375 825 1,973
-	1,200	1,973	3,173
Level 1 $000	Level 2 $000	Level 3 $000	Total $000
- - - - -	- 600 - - -	- - 789 789 1,973	- 600 789 789 1,973
-	600	3,551	4,151

There were no transfers between levels during the year.

The Fair values of the Group’s remaining assets and liabilities are approximately equal to their carrying values. The fair value of financial liabilities is estimated by discounting the remaining contractual maturities at the current market interest rate that is available for similar financial liabilities.

Valuation techniques for fair value measurements categorised within level 2 and level 3

The Instruction Company deferred consideration has arisen as a result of the business combination detailed in Note 26. The liability represents two deferred payments of $0.375 million each to be made on the six month and twelve month anniversaries of the completion date of the acquisition as in accordance with The Instruction Company Share Sale and Purchase agreement.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

The CCL contingent consideration – retention arose as a result of a previous business combination for the CCL Group. The liability was contingent on the CCL Group continuing to operate specific enterprise bargaining terms and conditions over a three-year period from completion date of the acquisition. In accordance with the CCL Group Share Sale and Purchase Agreement, the agreed retention amount was $600,000.

The CCL contingent consideration – Earn out year 1, which has been paid during the period, and Earn out year 2 arose in accordance with the CCL Group Share Sale and Purchase Agreement. The Earn out year 1 payment made was adjusted for the final FY20 EBITDA, whilst the Earn out year 2 liability has currently been valued using actual FY21 EBITDA levels.

The redemption liability has arisen as a result of a previous business combination for the CCL Group. The liability has been valued at the present value of the redemption amount or the put option consideration amount in accordance with the underlying CCL Group Share Sale and Purchase Agreement. Level 3 assets and liabilities

Movements in level 3 assets and liabilities during the current year are set out below:

Consolidated Balance at 6 July 2020 Gains/(losses) recognised in other comprehensive income Additions Settlements during the year Transfer to Level 2 Balance at 4 July 2021 Consolidated Balance at 1 July 2019 Gains/(losses) recognised in other comprehensive income Additions Settlements during the year Balance at 5 July 2020	CCL Contingent Consideration Earn Out Yr1 CCL Contingent Consideration Earn Out Yr2 Redemption Liability Total $000 $000 $000 $000 789 789 1,973 3,551 9 36 - 45 - - - - (798) - - (798) - (825) - (825)
	- - 1,973 1,973
	CCL Contingent Consideration Earn Out Yr1 CCL Contingent Consideration Earn Out Yr2 Redemption Liability Total $000 $000 $000 $000 - - - - - - - - 789 789 1,973 3,551 - - - -
	789 789 1,973 3,551

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

The level 3 assets and liabilities unobservable inputs and sensitivity are as follows:

Range (weighted Unobservable inputs average) Sensitivity EBITDA FY during which Put 2,887,786 Option exercised & EBITDA FY immediately following FY during which Put Option exercised

Description Unobservable inputs Redemption liability

10% change would increase/decrease fair value by $175,030.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

28. CONTROLLED ENTITIES

Set out below are the controlled entities of Ashley Services Group Limited:

		2021 percentage	2020 percentage
	Country of	owned	owned
	incorporation	%	%
Action Arndell Park PtyLimited	Australia	100	100
Action BotanyPtyLimited	Australia	100	100
Action James(Qld)PtyLimited	Australia	100	100
Action James NSW PtyLimited	Australia	100	100
Action James Parramatta PtyLimited	Australia	100	100
Action James WA Pty Limited (formerly Action Workforce AC PtyLimited)	Australia	100	100
Action James Western Suburbs PtyLimited	Australia	100	100
Action Job Support PtyLimited	Australia	100	100
Action MMX PtyLimited	Australia	100	100
Action Workforce ACT PtyLimited	Australia	100	100
Action Workforce COL1 PtyLimited	Australia	100	100
Action Workforce COS1 PtyLimited	Australia	100	100
Action Workforce COT PtyLimited	Australia	100	100
Action Workforce IMT PtyLimited	Australia	100	100
Action Workforce NSW PtyLimited	Australia	100	100
Action Workforce OS PtyLimited	Australia	100	100
Action Workforce OST PtyLimited	Australia	100	100
Action Workforce PtyLimited	Australia	100	100
Action Workforce T1 PtyLimited	Australia	100	100
Action Workforce T2 PtyLimited	Australia	100	100
Action Workforce VER1 PtyLimited	Australia	100	100
Action Workforce Victoria PtyLimited	Australia	100	100
Action Workforce VM PtyLimited	Australia	100	100
Action Workforce VPS PtyLimited	Australia	100	100
ADV Services PtyLimited	Australia	100	100
ADV1 PtyLimited	Australia	100	100
ADV2 PtyLimited	Australia	100	100
ADV3 PtyLimited	Australia	100	100
ADV6 PtyLimited	Australia	100	100
Advance Exchange PtyLimited	Australia	100	100
Advance GW PtyLimited	Australia	100	100
Advance MIX PtyLimited	Australia	100	100
Advance Recruitments PtyLimited	Australia	100	100
AIVD Holdings PtyLimited	Australia	100	100
ASG Electrical Contracting Pty Ltd (formerly ADV7 Pty Limited)	Australia	100	100
Ash PtyLimited	Australia	100	100
AshleyInstitute Holdings PtyLimited	Australia	100	100
Australian Institute of Vocational Development PtyLimited	Australia	100	100
AWF Training3 PtyLimited	Australia	100	100

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

			2021 percentage	2020 percentage
		Country of	owned	owned
		incorporation	%	%
BCC Labour Solutions Pty Ltd (formerly Action Workforce CAT PtyLimited)		Australia	100	100
Cantillon Holdings PtyLimited		Australia	100	100
CCL GroupHoldings PtyLtd(formerlyAdvance GX Pty	Ltd)	Australia	100	100
College of Innovation and IndustrySkills PtyLimited		Australia	100	100
Complete Traffic Services(VIC)PtyLtd		Australia	80	80
Concept AWF PtyLimited		Australia	100	100
Concept Electrical Resources Pty Ltd (formerly Action Mascot PtyLimited)	James	Australia	100	100
Concept Employment(Aust)PtyLimited		Australia	100	100
Concept Engineering (Aust)PtyLimited		Australia	100	100
Concept Engineering Contracting Holdings Pty Ltd (ASG Integracom(Aust)Holdings PtyLtd		Australia	100	100
Concept Engineering Contracting Pty Ltd (formerly ASG Integracom(Aust)PtyLtd)		Australia	100	100
Concept Power Pty Ltd (formerly Action James WCF Pty Limited)		Australia	100	100
Concept Project Resources PtyLimited		Australia	100	100
Concept Rail PtyLtd(formerlyAWF Training4 PtyLimited)		Australia	100	100
Concept Recruitment Specialists PtyLtd		Australia	100	100
Concept Retail Solutions Pty Ltd (formerly MerchandisingPtyLtd)	Action	Australia	100	100
Construction Contract Labour(VIC)PtyLtd		Australia	80	80
CP Action Workforce PtyLimited		Australia	100	100
Executive Careers Australia PtyLimited		Australia	100	100
Global Education and TrainingGroupPtyLimited		Australia	100	100
Integracom Holdings PtyLimited		Australia	100	100
Integracom Unit Trust		Australia	100	100
James Personnel PtyLimited		Australia	100	100
James WarehousingPtyLimited		Australia	100	100
Logistics People PtyLimited		Australia	100	100
Qualitas Education PtyLimited		Australia	100	100
Silk GroupHoldings PtyLimited		Australia	100	100
TBRC Holdings PtyLimited		Australia	100	100
The Blackadder Recruitment CompanyPtyLimited		Australia	100	100
The Instruction Company Holdings Pty Ltd (formerly AWF Training2 PtyLtd)		Australia	100	100
The Instruction CompanyPtyLtd*		Australia	100	-
Track Safety Australia Pty Ltd (formerly AWF Training 1 Pty Ltd)		Australia	100	100
Tracmin Holdings PtyLimited		Australia	100	100
Tracmin PtyLimited		Australia	100	100
VIC Traffic and Labour Solutions PtyLtd		Australia	80	80
Vocational TrainingAustralia PtyLimited		Australia	100	100

Acquired during financial year 2021. See Note 26. Business Combinations for further details.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

29. PARENT ENTITY DISCLOSURES

a. Financial position

	2021	2020
	$000	$000
Assets
Current assets	92	92
Non-current assets	18,206	19,605
Total assets	18,298	19,697
Liabilities
Current liabilities	(825)	(1,389)
Non-current liabilities	(15,891)	(10,248)
Total liabilities	(16,716)	(11,637)
Net assets	1,582	8,060
Equity
Share capital	148,815	148,815
Common control reserve	(59,261)	(59,261)
Accumulated losses	(87,972)	(81,494)
Total equity	1,582	8,060

Note:

Accumulated losses includes dividends paid of $6.5 million.
b. Statement of profit or loss and other comprehensive income

	2021	2020
	$000	$000
Profit/(Loss)for theyear	-	-
Other comprehensive income	-	-
Total comprehensive income/(loss)	-	-

c. Guarantees entered into by the parent entity in relation to the debts of its subsidiaries

The Parent entity and some of its subsidiaries are party to a deed of cross guarantee under which each company guarantees the debts of the others. No deficiencies of assets exist in any of these subsidiaries.

d. Contingent liabilities of the Parent Entity

The Parent entity had no other known material contingent liabilities as at 4 July 2021.

e. Commitments for expenditure for the Parent entity

The Parent entity had Nil committed expenditure as at 4 July 2021 (5 July 2020: Nil).

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

30. DEED OF CROSS GUARANTEE

The following entities have entered into a deed of cross guarantee dated 22 February 2018 under which each company guarantees the debts of the others:

Ashley Services Group Limited
Action Workforce Pty Limited
ADV6 Pty Limited
Ashley Institute Holdings Pty Ltd
Concept Engineering (Aust) Pty Ltd

By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare financial statements and directors' report under Corporations Instrument 2016/785 issued by the Australian Securities and Investments Commission.

The above companies represent a 'Closed Group' for the purposes of the Corporations Instrument, and as there are no other parties to the deed of cross guarantee that are controlled by Ashley Services Group Limited, they also represent the 'Extended Closed Group'.

a. Statement of profit or loss and other comprehensive income

Extended Closed Group	2021 $000	2020 $000
Revenue	291,868	261,371
Other Income	61	913
Employment costs	(275,129)	(250,347)
Depreciation and amortisation expense	(545)	(509)
Finance costs	(141)	(151)
Other expenses	(3,209)	(2,903)
Profit before income tax	12,905	8,374
Income tax expense	(1,783)	(2,512)
Profit after income tax	11,122	5,862
Other comprehensive Income	-	-
Total comprehensive income for the year	11,122	5,862

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

b. Statement of Financial position

Extended Closed Group	2021 $000	2020 $000
Assets
Current assets
Cash and cash equivalents	52	2,302
Trade and other receivables	27,917	19,952
Other assets	5,263	677
Total current assets	33,232	22,931
Non-current assets
Trade and other receivables	113,269	100,820
Property, plant and equipment	393	459
Deferred tax assets	3,599	3,599
Right-of-use assets	683	783
Other assets	18,208	19,605
Total non-current assets	136,152	125,266
Total assets	169,384	148,197
Liabilities
Current liabilities
Trade and other payables	36,799	28,149
Borrowings	679	-
Dividends payable	13,921	7,487
Current tax payable	13,386	11,603
Lease liabilities	221	241
Other liabilities	825	1,389
Provisions	2,047	1,634
Total current liabilities	67,878	50,503
Non-current liabilities
Lease liabilities	509	566
Other liabilities	1,973	2,761
Provisions	222	208
Total non-current liabilities	2,704	3,535
Total liabilities	70,582	54,038
Net assets	98,802	94,159
Equity
Share capital	148,815	148,815
Common control reserve	(59,261)	(59,261)
Retained earnings	9,248	4,605
Total Equity	98,802	94,159

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

c. Equity – retained profits

Extended Closed Group	2021 $000	2020 $000
Retained profits at the beginning of the financial year	4,605	2,349
Adjustment to opening retained profits	-	281
Profit after income tax expense	11,122	5,862
Dividends paid	(6,479)	(3,887)
Retained profits at the end of the financial year	9,248	4,605

d. Contingent liabilities of the Extended Closed Group

The Extended Closed Group had no other known material contingent liabilities as at 4 July 2021.

e. Commitments for expenditure for the Extended Closed Group

The Extended Closed Group had Nil committed expenditure as at 4 July 2021 (5 July 2020: Nil).

f. Going Concern and Financial Support

The financial statements of the Extended Closed Group have been prepared on a going concern basis. The directors have provided a letter of financial support confirming that each of the below listed companies within the Ashley Services group Limited and controlled entities agrees to provide whatever financial support is necessary to ensure each entity will be able to continue as a going concern and pays its debts as and when they fall due and payable.

The financial support covers the following entities:

Ashley Services Group Limited;
Action Workforce Pty Limited;
Concept Engineering (Aust.) Pty Ltd;
ASH Pty Ltd;
Vocational Training Australia Pty Ltd;
Australian Institute of Vocational Development Pty Ltd; and
Tracmin Pty Ltd.

The financial support includes but is not limited to the actions as noted below:

not calling on related party loans;
agreeing to any cost re-allocations or management fee re-charges; and
agreeing to debt forgiveness with any related entity.

The undertaking remains current until the date on which the directors approve the financial statements of the Group for the financial year ending 3 July 2022. The directors are satisfied that collectively the Group has the financial ability to provide this support.

g. Security Offered
The Westpac facility (see Note 19) is subject to a Security which includes, but is not limited to the following:
1[st] ranking General Security Agreement over the assets and undertakings of the Borrower and its Guarantors;
Contractual Subordination of Shrimpton Holdings Pty Ltd facility of $5 million; and
Flawed Asset Arrangement – Deposit of Action Workforce Pty Ltd and Concept Engineering (AUST) Pty Ltd for Invoice Finance Facility collections.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

31. RELATED PARTY TRANSACTIONS

a. Parent company

There is no ultimate parent company for Ashley Services Group Limited.

b. Transactions with related entities

Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

Transactions with related parties are as follows:

	20211	20201
	$	$
Rent and outgoings paid or payable to Shrimpton Holdings Pty Limited as trustee for the
Shrimpton Family Trust, an entity which is controlled by Mr Ross Shrimpton for an office at
Arndell Park, New South Wales1	138,061	130,967
Interest and line fee paid to Shrimpton Holdings Pty Limited, an entity which is controlled by
Mr Ross Shrimpton	-	46,267
Feespayable to Trood Pratt & Co(of which Ian Pratt is a Partner)for taxation services	41,904	46,176
Note:
1. All amounts as shown are exclusive of GST.

32. SECURED AND CONTINGENT LIABILITIES

For assets pledged as security for borrowing facilities see Note 19.

The Group had no other known contingent liabilities at 4 July 2021.

33. FINANCIAL INSTRUMENTS

a. Significant accounting policies

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset and financial liability are disclosed in Note 1 to the financial statement.

b. Financial risk management objectives

The Board of Directors has overall responsibility for the establishment and oversight of the Group’s financial management framework. The Board has an established Audit and Risk Management Committee which is responsible for developing and monitoring the Group’s financial management policies. The Committee provides regular reports to the Board of Directors on its activities.

The Audit and Risk Management Committee oversees how management monitors compliance with risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks.

The main risks arising from the Group’s financial instruments are market risk (including fair value interest rate risk), credit risk and liquidity risk. The Board reviews and approves policies for managing each of these risks.

The Audit and Risk Management Committee oversees how management monitors compliance with risk management policies and procedures and review the adequacy of the risk management framework in relation to the risks. The Group does not enter into or trade financial instruments, including derivative financial instruments, for speculative purpose.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

c. Market risk

Interest rate risk

The Group is exposed to interest rate risk associated with borrowed funds at floating interest rates. During the financial year, risks associated with interest rate movements were monitored by the Board; however, no hedging instruments were considered necessary to manage the risk.

The Group’s exposures to interest rates on financial assets and financial liabilities are detailed in the liquidity risk management section of this note.

Interest rate sensitivity

The sensitivity analyses below have been determined based on the exposure to interest rates at the reporting date and the stipulated change taking place at the beginning of the financial year and held constant throughout the reporting period. A 100 basis point increase or decrease is used when reporting interest rate risk internally to key management personnel and represents management’s assessment of the possible change in interest rates.

At the reporting date, if interest rates had been 100 basis points higher or lower and all other variables were held constant, the effect on the Group would be as follows:

	2021	2020
	$000	$000
Change in profit
Increase in interest rates of 1%	129	142
Decrease in interest rates of 1%	(129)	(142)
Change in equity
Increase in interest rates of 1%	129	142
Decrease in interest rates of 1%	(129)	(142)

Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations, resulting in financial loss to the Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where appropriate, as a means of mitigating the risk of financial loss from defaults.

Trade receivables consist of a large number of customers. Ongoing credit evaluation is performed on the financial condition of accounts receivable.

The carrying value of trade receivables recorded in the financial statements, net of any impairment allowances, represents the Group’s maximum exposure to credit risks.

The Group does not have any significant credit risk exposure to any single counterparty or any group of counterparties having similar characteristics. The credit risk on liquid funds is limited because the counter parties are a reputable bank with high quality external credit ratings.

The maximum credit risk exposure of financial assets is their carrying amount in the financial statements.

d. Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Managing Director and Board of Directors, who have built an appropriate liquidity risk management framework for the management of the Group’s short, medium and long-term funding and liquidity management requirements.

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities by continuously comparing actual cash flows with forecasts and matching the maturity profiles of

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

financial assets and liabilities. Included in Note 19 is a listing of additional undrawn facilities that the Group has at its disposal to further reduce liquidity risk.

Liquidity and interest risk tables

The following table details the Group’s remaining contractual maturity for its non-derivative financial liabilities. The table has been presented based on the undiscounted cash flows of financial liabilities based on the earliest date on which the Group may be required to pay. The table includes both interest and principal cash flows.

Financial assets

	Weighted average	Weighted average
	effective interest		Within 1 year	1 to 5 years	Over 5 years	Total
2021		rate %	$000	$000	$000	$000
Cash and cash equivalents		n/a	2,969	-	-	2,969
Trade and other receivables		n/a	44,421	-	-	44,421
Contract assets		n/a	791	-	-	791
Total			48,181	-	-	48,181

	Weighted average	Weighted average
	effective interest		Within 1 year	1 to 5 years	Over 5 years	Total
2020		rate %	$000	$000	$000	$000
Cash and cash equivalents		n/a	8,063	-	-	8,063
Trade and other receivables		n/a	29,418	-	-	29,418
Contract assets		n/a	154	-	-	154
Total			37,635	-	-	37,635

Financial liabilities

	Weighted average
	effective interest	Within 1 year	1 to 5 years	Over 5 years	Total
2021	rate %	$000	$000	$000	$000
Trade and otherpayables	n/a	27,392	-	-	27,392
Borrowings	4.01%	1,090	-	-	1,090
Lease liabilities	3.00%	888	1,324	-	2,212
Other liabilities	n/a	1,220	-	1,973	3,193
Total		30,590	1,324	1,973	33,887

	Weighted average
	effective interest	Within 1 year	1 to 5 years	Over 5 years	Total
2020	rate %	$000	$000	$000	$000
Trade and otherpayables	n/a	18,517	-	-	18,517
Borrowings	4.35%	-	-	-	-
Lease liabilities	3.00%	723	1,716	-	2,439
Other liabilities	n/a	1,389	789	1,973	4,151
Total		20,629	2,505	1,973	25,107

Fair value of financial instruments

Refer to Note 27 for details on the fair value of financial instruments.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

Notes to the Financial Statements

34. EVENTS AFTER THE REPORTING DATE

No matters or circumstances have arisen since the end of the financial year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years, except for the following:

On 27 July 2021 the Group declared a fully franked final dividend of 2.4 cents in relation to the financial year ended 4 July 2021.

35. DIVIDENDS

a. Ordinary shares

b. Franking credits

	2021	2020
	$000	$000
Franking credits available for subsequent financial years based on a tax rate of 30%
(2020: 30%)	2,411	1,670

The balance of the franking accounts includes:

franking credits that arose from the payment of the amount of the provision for income tax;
franking debits that arise from the refund of the amount of the provision for income tax;
franking debits that arise from the payment of dividends recognised as a liability at the reporting date; and
franking credits that arise from the receipt of dividends recognised as receivables at the reporting date.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [141 x 54] intentionally omitted <==

ASX Additional Information

Set out below is additional information as required by the ASX Limited Listing Rules and not disclosed elsewhere in this report. This information is effective as at 19 August 2020.

Number of security holders and securities on issue

Quoted equity securities

Ashley Services has on issue 143,975,904 fully paid ordinary shares which are held by 888 shareholders.

Voting rights

Quoted equity securities

The voting rights attached to fully paid ordinary shares are that on a show of hands, every member present, in person or proxy, has one vote and upon a poll, each share shall have one vote.

Distribution of security holders

Quoted equity securities

Ordinary fully paid ordinary shares

Holding	Number of shareholders	Number of shares	%
1 – 1,000	176	124,789	0.09
1,001 – 5,000	249	619,096	0.43
5,001 – 10,000	120	994,449	0.69
10,001 – 100,000	278	9,990,184	6.94
100,001 and over	65	132,247,386	91.85
Total	888	143,975,904	100.00

Unmarketable parcel of shares

The number of shareholders holding less than a marketable parcel of Fully Paid Ordinary shares is 176 with a total number of shares held is 124,789.

Substantial Shareholders

The number of securities held by substantial shareholders and their associates are set out below:

Fully Paid Ordinary Shares

Name	Number	%
Ross Shrimpton	80,279,030	55.76%
JP Morgan Nominees Australia Limited ATF Richmond Hill Capital PtyLtd	12,466,452	8.66%

Unquoted equity securities

There are no unquoted shares.

On-market buy-back

There is no current on-market buy-back.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

ASX Additional Information

Twenty largest shareholders

Fully paid ordinary shares

Details of the 20 largest shareholders of quoted securities (grouped) by registered shareholding are:

Name	Number of shares	%
Mr Ross Shrimpton	80,279,030	55.76%
JP Morgan Nominees Australia Limited	17,879,231	12.45%
CiticorpNominees PtyLtd	3,245,571	2.25%
Hishenk PtyLtd	2,400,000	1.67%
HSBC CustodyNominees(Australia)Limited	1,862,171	1.31%
Certane CT PtyLtd	1,582,009	1.10%
BNP Paribas Nominees PtyLtd	1,580,880	1.10%
Mr Marc Shrimpton	1,500,000	1.04%
Action James Holdings PtyLimited	1,486,615	1.03%
Moat Investments PtyLtd	1,424,000	0.99%
Super Wide PtyLtd	1,140,326	0.79%
Mr Andrew Douglas Shrimpton	1,115,000	0.77%
Gailforce Marketing& PR PtyLimited	708,049	0.49%
Mr Christopher John McFadden & Mrs Toula McFadden	699,999	0.49%
Mrs KerryElizabeth Draffin	637,416	0.44%
Mast Financial PtyLtd	637,231	0.44%
Mr Dean Michael Shrimpton	632,388	0.44%
Velkov Funds Management PtyLtd	628,000	0.44%
StirlingSuperannuation PtyLtd	600,000	0.42%
Mr Mark Christopher Garrick	596,618	0.41%
Total	120,634,534	83.79%

Annual General Meeting

The annual general meeting of the Company will be held at the company’s offices at Level 10, 92 Pitt Street Sydney NSW 2000 at 10.00am on Thursday 4 November 2021 OR electronically via a virtual AGM (details will be provided as required). Shareholders who are unable to attend the meeting are encouraged to complete and return their proxy form that will accompany the notice of meeting.

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

==> picture [140 x 54] intentionally omitted <==

Corporate Directory

Non-Executive Directors

Mr Ian Pratt (Chairman)

Executive Directors

Mr Ross Shrimpton – Managing Director Mr Chris McFadden

Company Secretary Mr Ron Hollands Registered Office

Level 10 92 Pitt Street Sydney NSW 2000 Australian Company Number 094 747 510 Australian Business Number

92 094 747 510 Auditors

HLB Mann Judd

Level 19 207 Kent Street Sydney NSW 2000 Telephone: + 61 2 9020 4000 Facsimile: + 61 2 9020 4190

Bankers

Westpac

Level 18 275 Kent Street Sydney NSW 2000 Telephone: + 61 2 9155 7700 Facsimile: + 61 2 8253 4128 Website: www.westpac.com.au

Share Registry

Link Market Services Limited

Central Park, Level 4 152 St Georges Terrace Perth WA 6000 Telephone: +61 1300 554 474 Facsimile: +61 2 9287 0303 Website: www.linkmarketservices.com.au

Website

www.ashleyservicesgroup.com.au

ASX Code

ASH

Legal Adviser

Addisons Lawyers

Level 12 60 Carrington Street Sydney NSW 2000 Telephone: + 61 2 8915 1000 Facsimile: + 61 2 8916 2000

ASHLEY SERVICES GROUP ANNUAL REPORT 2021

AI assistant

ASHLEY SERVICES GROUP LIMITED — Annual Report 2021

64431_rns_2021-08-30_c87abfff-4410-43fd-abd9-3cc6b59b107e.pdf

Appendix 4E

Year Ended 4 July 2021

Lodged with the ASX under Listing Rule 4.3A

31 August 2021

1. DETAILS OF REPORTING PERIODS:

2. RESULTS FOR ANNOUNCEMENT TO THE MARKET:

Control gained over entities:

Not applicable.

Not applicable.

Additional Information:

Note:

Audit qualification or review:

Ross Shrimpton

Ashley Services Group Limited Annual Report 2021

Chairman and Managing Director’s Review

MR IAN PRATT AND MR ROSS SHRIMPTON

Chairman and Managing Director’s Review

DISCUSSION ON RESULTS

Earnings and result

Earnings

Revenues

Earnings before interest taxes depreciation and amortisation (“EBITDA”)

Statement of financial position

Chairman and Managing Director’s Review

Cash Flow

DIVIDEND

EVENTS SUBSEQUENT TO BALANCE DATE

Directors’ Report

1. GENERAL INFORMATION

a. Directors

Table 1: Director Details

Qualifications | BBus (UTS), FCPA, GAICD

Directors’ Report

Interests in shares and options

Directorships of other listed companies

a. Principal activities

b. Company secretary

Directors’ meetings

Directors’ Report

1. BUSINESS REVIEW

a. Operating results

b. Review of operations

c. Future developments

d. Events subsequent to reporting date

e. Ongoing Litigation

2. OTHER INFORMATION

a. Options

b. Non-audit services

c. Auditor’s independence declaration

d. Environmental issues

e. Indemnifying officers or auditors

Insurance of officers

f. Proceedings on behalf of the Company

Directors’ Report

g. Rounding off of amounts

3. REMUNERATION REPORT – AUDITED

Alignment of shareholders’ interest

Executive Directors:

Non-Executive Directors:

Other key management personnel:

Alignment to program participants’ interests

Executive pay

Directors’ Report

Directors’ Report

STI plan for the financial year ended 3 July 2022

c. Non-executive Director remuneration and Board performance review

d. Details of remuneration

Directors’ Report

Table 9: Statutory key performance indicators of the group over the last five years

Note:

Table 10: 2021 – Remuneration of Key Management Personnel

Note:

Directors’ Report

Table 11: 2020 – Remuneration of Key Management Personnel

Note:

Other transactions with key management personnel

e. Shares held by key management personnel

ASHLEY SERVICES GROUP LIMITED Annual Report 2021