Appendix 4D. Half-year Report to the Australian Stock Exchange

Transcription

1 Appendix 4D Report to the Australian Stock Exchange Name of Entity ASG Group Ltd ABN Ended 31 December Previous Corresponding Reporting Period 31 December 2012 Results for Announcement to the Market Increase/(decrease) over previous corresponding period $ 000 $ 000 % Revenue from ordinary activities 79,028 3, Profit/(loss) from ordinary activities after tax 3,818 8,458 N/A attributable to members Net profit/(loss) for the period attributable to members 3,818 8,458 N/A Dividends (distributions) Amount per Franked amount per security security Final Dividend Nil N/A Interim Dividend (paid) Nil N/A Record date for determining entitlements to the dividends (if any) N/A Total issued and paid up ordinary shares 206,720,839 Brief explanation of any of the figures reported above necessary to enable the figures to be understood: For explanation see Announcement text and Commentary on results Dividends Date the dividend is payable Record date to determine entitlement to the dividend Amount per security Total dividend Amount per security of foreign sourced dividend or distribution Details of any dividend reinvestment plans in operation The last date for receipt of an election notice for participation in any dividend reinvestment plans N/A N/A N/A N/A N/A N/A N/A

2 NTA Backing Current Period Previous corresponding period Net tangible asset backing per ordinary security nil nil Other Significant Information Needed by an Investor to Make an Informed Assessment of the Entity s Financial Performance and Financial Position See Commentary on results Commentary on the Results for the Period Refer attached Company Announcement H1 FY2014 Results Audit/Review Status This report is based on accounts to which one of the following applies: (Tick one) The accounts have been audited The accounts have been subject to X review If the accounts are subject to audit dispute or qualification, a description of the dispute or qualification: Attachments Forming Part of Appendix 4D 1 Financial Report 2 Review Report Signed By Director Print Name Mr Geoff Lewis Date 10 February 2014

3 ABN AND CONTROLLED ENTITIES HALF-YEAR REPORT 31 DECEMBER

4 Report 31 December CONTENTS COMPANY DIRECTORY... 5 DIRECTORS REPORT... 6 AUDITOR S INDEPENDENCE DECLARATION... 7 FINANCIAL STATEMENTS... 8 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME... 8 CONSOLIDATED STATEMENT OF FINANCIAL POSITION... 9 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY CONSOLIDATED STATEMENT OF CASH FLOWS NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS DIRECTOR S DECLARATION INDEPENDENT AUDITOR S REVIEW REPORT TO THE MEMBERS This interim report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June and any public announcements made by ASG Group Ltd during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act

5 Company Directory 31 December COMPANY DIRECTORY Directors Ron Baxter Geoffrey Lewis Ian Campbell Trevor O Hoy Stephen Johnston Key Management Geoffrey Lewis Dean Langenbach Michael Large Gerald Strautins Peter Torre Independent Non-Executive Chairman Managing Director/CEO Independent Non-Executive Director Independent Non-Executive Director Independent Non-Executive Director Managing Director/CEO Chief Operating Officer Chief Financial Officer Executive Strategy Company Secretary Auditors BDO Audit (WA) Pty Ltd 38 Station Street SUBIACO WA 6008 Solicitors Murcia Pestell Hillard Level 3, 23 Barrack St PERTH WA 6000 Share Registry Computershare Investor Services Pty Limited Level 2, 45 St Georges Terrace Perth WA 6000 Telephone: Facsimile: Registered Office Level 1, 267 St Georges Tce PERTH WA 6000 Telephone: +61 (0) Facsimile: +61 (0) Web Site Stock Exchange Listings Australian Stock Exchange ASX: ASZ 5

6 Directors Report For the half-year ended 31 December DIRECTORS REPORT The Directors present their financial report of the consolidated entity, the Company, being the Company and its controlled entities, for the half-year ended 31 December and the auditors report thereon. DIRECTORS The Directors of the Company at any time up to the date of the report are: Ron Baxter Geoffrey Lewis Trevor O Hoy Ian Campbell Stephen Johnston COMPANY SECRETARY Peter Torre PRINCIPAL ACTIVITIES The principal activities of the consolidated entity during the year were the provision of information technology services. REVIEW OF OPERATIONS A review of the operations of the consolidated group during the financial period is set out in the presentation and announcement attached to the Appending 4D (half-year report to the Australian stock exchange). AUDITOR s INDEPENDENCE DECLARATION The Auditor s Independence Declaration on page 7 forms part of the Director s Report for the half-year ended 31 December. ROUNDING OF AMOUNTS The Group is of a kind referred to in Class Order 98/100, issued by the Australian Securities and Investments Commission, relating to the rounding off of amounts in the Directors Report. Amounts in the Directors Report and Financial Report have been rounded off to the nearest thousand dollars, or in certain cases the nearest dollar, in accordance with that Class Order. SUBSEQUENT EVENTS As at signing date of this report, there have not been any material subsequent events. This report is made in accordance with a resolution of Directors. Geoff Lewis Managing Director/Chief Executive Officer Perth Dated: 10 th February

7 Tel: Fax: Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia DECLARATION OF INDEPENDENCE BY BRAD MCVEIGH TO THE DIRECTORS OF ASG GROUP LTD As lead auditor for the review of ASG Group Ltd for the half-year ended 31 December, I declare that to the best of my knowledge and belief, there have been: no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the review; and no contraventions of any applicable code of professional conduct in relation to the review. This declaration is in respect of ASG Group Ltd and the entities it controlled during the period. Brad McVeigh Director Perth, 10 February 2014 BDO Audit (WA) Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN , an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. 17

8 Consolidated Statement of Profit or Loss and Other Comprehensive Income For the half-year ended 31 December FINANCIAL STATEMENTS Consolidated Statement of Profit or Loss and Other Comprehensive Income Notes 2012 (Restated) Revenue from continuing operations 3 79,028 75,851 Interest revenue 4 2 Expenses Change in inventories of finished goods and work in progress (834) (939) Raw materials and consumables used 4a (5,862) (7,859) Employee benefits expense (53,838) (55,390) Share Based Payments (91) (47) Depreciation and amortisation 4b (3,453) (2,857) Finance costs 4c (1,626) (1,734) Operating lease payments (594) (1,285) Deferred consideration adjustment Impairment and write-downs 4d - (2,355) Operating expenses 4e (7,109) (11,022) Profit/(Loss) before income tax 5,625 (6,861) Income tax (expense)/benefit (1,807) 2,221 Profit/(Loss) for the half-year attributable to members of ASG Group Ltd 3,818 (4,640) Other comprehensive Income - - Total Comprehensive Income/(Loss) for the half-year, net of tax attributable to members of ASG Group Limited 3,818 (4,640) Basic earnings/(loss) per share (cents) 1.85 (2.68) Diluted earnings per share (cents) 1.85 N/A The above consolidated statement of profit or loss and other comprehensive Income should be read in conjunction with the accompanying notes. 8

9 Consolidated Statement of Financial Position As at 31 December Consolidated Statement of Financial Position ASSETS Current assets 31 December 30 June Notes Cash and cash equivalents 5 2, Trade and other receivables 6 32,700 27,644 Work in progress Prepayments 943 1,339 Asset classified as held for sale 7-11,463 Total current assets 36,716 41,650 Non-current assets Property, plant and equipment 8 31,709 19,487 Deferred tax assets 4,869 6,729 Intangible assets 9 91,400 90,997 Total non-current assets 127, ,213 Total assets 164, ,863 LIABILITIES Current liabilities Trade and other payables 10 29,566 33,752 Current financial liabilities 11 11,717 13,942 Provisions Deferred vendor payments ,000 Current tax liabilities 1,879 1,741 Unearned Revenue Total current liabilities 44,472 51,082 Non-current liabilities Financial liabilities 11 28,962 20,647 Provisions for employee benefit 2,526 2,273 Total non-current liabilities 31,488 22,920 Total liabilities 75,960 74,002 Net assets 88,734 84,861 EQUITY Contributed equity , ,160 Reserves 1,745 1,654 Accumulated losses (33,135) (36,953) Total equity 88,734 84,861 The above consolidated statement of financial position should be read in conjunction with the accompanying notes. 9

10 Consolidated Statement of Changes in Equity For the half-year ended 31 December Consolidated Statement of Changes in Equity Contributed Equity Retained Earnings Share Based Payment Reserve Other Reserves Total Equity Balance at 1 July ,744 (4,945) 1, ,313 Restated loss for the half-year - (4,640) - - (4,640) Total comprehensive income for the half-year - (4,640) - - (4,640) Transactions with owners in their capacity as owners: Contribution of equity, net transaction cost 18, ,444 Issues of ordinary shares from options Dividend paid - (5,316) - - (5,316) Share based payments Balance at 31 December ,197 (14,901) 1, ,858 Balance at 1 July 120,160 (36,953) 1, ,861 Profit for the half-year - 3, ,818 Total comprehensive loss for the half-year - 3, ,818 Transactions with owners in their capacity as owners: Contributions of equity, net of transaction costs (36) (36) Share based payments Balance at 31 December 120,124 (33,135) 1, ,734 The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes. 10

11 Consolidated Statement of Cash Flows For the half-year ended 31 December Consolidated Statement of Cash Flows CASH FLOWS FROM OPERATING ACTIVITIES December December (Restated) 2012 Notes Cash receipts in the course of operation 74,300 74,368 Cash payments in the course of operations (71,096) (73,394) Interest received 4 2 Finance expenses (1,626) (1,524) Income taxes refunded 155 3,370 Net cash inflow from operating activities 14 1,737 2,822 CASH FLOWS FROM INVESTING ACTIVITIES Payments for property, plant and equipment (315) (5,800) Payments for software (1,411) (1,689) Payments for purchase of business (net of cash received) (500) (12,228) Net cash outflow from investing activities (2,226) (19,717) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from borrowings 8,000 16,650 Repayment of borrowings (1,750) (8,139) Finance lease payments (814) (1,011) Dividends paid - (5,316) Proceeds from issue of shares - 14,725 Net cash inflow from financing activities 5,436 16,909 Net increase in cash held 4, Cash and cash equivalents at beginning of reporting period (2,000) (4,423) Cash and cash equivalents at end of reporting period 5 2,947 (4,409) The above consolidated statement of cash flows should be read in conjunction with the accompanying notes. 11

12 Notes to the Consolidated Financial Statements For the half-year ended 31 December NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1 Summary of significant accounting policies This consolidated interim financial report for the half-year reporting period ended 31 December has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act This consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June and any public announcement made by ASG Group Ltd the Group or the Company during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period, except as set out below: (a) Change in accounting policies - new or revised accounting standards The Company had to change some of its accounting policies as the result of new or revised accounting standards which became effective for the annual reporting period commencing on 1 July. The effected policies and standards are: Principles of consolidation new standards AASB 10 Consolidated Financial Statements, and Accounting for employee benefits revised AASB 119 Employee Benefits. Other new standards that are applicable for the first time for the December half-year report are AASB 11 Joint Arrangements, AASB 13 Fair Value Measurement, AASB 12 Disclosure of Interest in Other Entities, AASB Amendments to Australian Accounting Standards- Disclosures Offsetting Financial Assets and Financial Liabilities and AASB Amendments to Australian Accounting Standards arising from Annual Improvements Cycle. These standards have introduced new disclosures for the interim report but did not affect the Company s accounting policies or any of the amounts recognised in the financial statements. AASB 11 Joint Arrangements Under AASB 11 investments in joint arrangements are classified as either joint operations or joint ventures depending on the contractual rights and obligations each investor has, rather than the legal structure of the joint arrangement. The Company did not have any joint arrangements or joint ventures and is not impacted by AASB 11 AASB 12 Disclosure of Interests in Other Entities AASB 12 prescribes the disclosure requirements relating to an entity s interests in subsidiaries, joint arrangements, associates and structured entities. Unless significant events and transactions have occurred in the interim period, none of these disclosures are required. There have been no such significant events and transactions during the interim period. AASB 13 Fair Value Measurement AASB 13 provides guidance on how to measure fair value under IFRS when fair value is required or permitted, as well as introducing additional disclosure requirements for: Items measured at fair value in the statement of financial position Items where fair value is required to be disclosed in the notes to the financial statements. AASB 13 has not had any material effect on the fair value measurements undertaken by the Group during the interim period. 12

13 Notes to the Consolidated Financial Statements For the half-year ended 31 December 1 Summary of significant accounting policies (continued) (a) Change in accounting policies - new or revised accounting standards (continued) i. Principles of consolidation subsidiaries and arrangements AASB 10 was issued in August 2011 and replaces the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial Statements and in Interpretation 112 Consolidation Special Purpose Entities. Under the new principles, the Company controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The Company has reviewed its investments in other entities to assess whether the consolidation conclusion in relation to these entities is different under AASB 10 than under AASB 127. No differences were found and therefore no adjustments to any of the carrying amounts in the financial statements are required as a result of the adoption of AASB 10. ii. Employee Benefits AASB 119 reissued in September 2011 includes changes to gains/losses regarding defined benefit plans, amendments to timing for recognition of liabilities for termination benefits and employee benefits expected to be settled (as opposed to due to settled ) wholly within 12 months after the end of the reporting period are short-term benefits, and are not discounted. The revised standard has also changed the accounting for the Company s annual leave obligations. The Company does not expect all annual leave to be taken within 12 months of the respective service being provided. Any amount of annual leave obligation expected to be taken beyond 12 months has been classified as a current liability as the Company does not have an unconditional right to defer payment. (b) Changes in accounting policies Company voluntarily changed accounting policy The Company voluntarily changed its accounting policy relating to project establishment expenditure, previously capitalised as an intangible asset Capitalised Costs for expected successful contract wins. The new policy expenses all project establishment costs through the profit or loss account as incurred. The new accounting policy became effective for the annual reporting period commencing on 1 July 2012 and has been applied retrospectively. The impact of this change in the Company s accounting policy on individual line items in the financial statements can be summarised as follows: Restated Statement of Profit and Loss and other comprehensive income (extract) 2012 (Previously stated) Prior half-year restatement Profit Increase/ (Decrease) 2012 (Restated) Employee benefits expense (excluding share based payments) (55,140) (250) (55,390) Depreciation and amortisation (5,480) 2,623 (2,857) Impairment and write-downs (10,644) 8,289 (2,355) Other expenses (3,507) (7,725) (11,232) Loss before Income Tax (9,798) 2,937 (6,861) Income tax expense 3,102 (881) 2,221 Loss for the half-year (6,696) 2,056 (4,640) Restated earnings per share from profit attributable to the owners of ASG Group Limited Cents Reported Adjustment Cents Restated Basic earnings per share (3.66) 0.98 (2.68) Diluted earnings per Share N/A - N/A 13

14 Notes to the Consolidated Financial Statements For the half-year ended 31 December 1 Summary of significant accounting policies (continued) (b) Changes in accounting policies Company voluntarily changed accounting policy Statement of cash flows (extract): 2012 (Previously stated) Prior half-year restatement (Increase)/ Decrease 2012 (Restated) Cash payments in course of operations (65,669) (7,725) (73,394) Net cash provided by/(used in) operating activities 10,547 (7,725) 2,822 Payments for development costs (7,725) 7,725 - Net cash provided by/(used in) investing activities (27,442) 7,725 (19,717) 2 Segment Information Management has determined the Group has one operating segment based on the reports reviewed by the executive group and used to make strategic decisions. Strategic decisions at the executive level are made on human resources and resourcing, strategic business development opportunities, customer and project management, treasury and finance and capital expenditure. These strategic decisions are made by the executive group and the interests of the Group are taken into consideration. It is the view of management that ASG only operates within one operating segment, that being information technology solutions. ASG operates in Australia with an immaterial amount of revenue being attributable outside of Australia providing information technology services. ASG offers solutions to its customers needs and works with key partners such as Oracle, SAP, and Microsoft to offer a range of software solutions. 3 Revenue from continuing operations 2012 Sale of goods 6,121 7,060 Rendering of service 72,907 68,791 Total Revenue from Continuing Operations 79,028 75,851 4 Expenses 2012 Profit before income tax includes the following specific expenses: (a) Raw materials Cost of hardware 1,827 5,191 Cost of software sold 4,035 2,668 Total Raw Materials 5,862 7,859 (b) Depreciation and amortisation Depreciation 2,066 1,705 Depreciation Asset previously held for sale Amortisation 1,008 1,152 Total Depreciation and Amortisation 3,453 2,857 14

15 Notes to the Consolidated Financial Statements For the half-year ended 31 December 4 Expenses (continued) 2012 (c) Finance costs Finance charges paid/payable for financial liabilities at amortised cost 1,386 1,558 Finance charges on capitalised leases Total Finance Costs 1,626 1,734 (d) Impairment and write-downs Impairment of intangibles - 1,792 Write-down of property, plant and equipment Total Impairment and Write-offs - 2,355 (e) Operating expenses Insurance Marketing and administration 7,398 8,969 Bank and compliance expense Doubtful debt expense (1,107) 876 Total Operating Expenses 7,109 11,022 5 Current Assets Cash and cash equivalents 31 December 30 June Cash at bank and in hand Cash in interest bearing accounts 2,450 - Cash and cash equivalents 2, Current Assets Trade and other receivables 31 December 30 June Current Trade receivables 28,633 24,720 Provision for impairment (277) (1,385) 28,356 23,335 Amount receivable from: Other receivables 4,344 4,309 Trade and other receivables 32,700 27,644 The classes within trade and other receivables contain provisions for impaired assets. Based on the credit history of these classes, it is expected that these amounts will be received when due. The group does not hold any collateral in relation to these receivables. (a) Other receivables These amounts generally relates to accrued revenue for rendering of services and sales of goods not yet invoiced to the client. 15

16 Notes to the Consolidated Financial Statements For the half-year ended 31 December 7 Assets classified as held for sale 31 December 30 June Bentley data centre - 11,463 The Group s investment in Bentley Data Centre was classified as non-current asset held for sale at 30 June. On the 28 November management considered the criterion contained within AASB 5 was no longer met and the asset ceased to be classified as held for sale and forms part of the non-current assets. 8 Non-Current Assets Property, plant and equipment As at 30 June Leasehold Plant and Leased Plant Motor Total Improvement Equipment and Equipment Vehicles Cost 3,151 19,550 7,171 1,399 31,271 Accumulated depreciation (1,096) (5,893) (4,017) (778) (11,784) Closing net book amount 2,055 13,657 3, ,487 ended 31 December Opening book amount 2,055 13,657 3, ,487 Additions ,889-3,204 Assets ceased as held for sale* 11, ,084 Disposals Depreciation charge (115) (1,230) (622) (99) (2,066) Closing net book amount 13,040 12,726 5, ,709 As at 31 December Cost 17,407 19,849 10,060 1,399 48,715 Accumulated depreciation (4,367) (7,123) (4,639) (877) (17,006) Net book amount 13,040 12,726 5, ,709 *Asset previously held for sale reclassed to non-current assets at calculated net book value as at 28 November. 16

17 Notes to the Consolidated Financial Statements For the half-year ended 31 December 9 Non-Current Assets Intangibles Development Costs Goodwill Software Customer List Customer Contracts Total A$'000 A$'000 A$'000 A$'000 A$'000 A$'000 At 1 July Cost 10, ,156 13,756 2,671 1, ,828 Accumulated amortisation (14) (30,965) (6,288) (1,930) (634) (39,831) Net book amount 10,934 71,191 7, ,997 ended 31 December Opening net book amount 10,934 71,191 7, ,997 Net additions - - 1, ,411 Amortisation - - (781) (61) (166) (1,008) Closing net book amount 10,934 71,191 8, ,400 At 31 December Cost 10, ,156 15,167 2,671 1, ,239 Accumulated amortisation (14) (30,965) (7,069) (1,991) (800) (40,839) Net book amount 10,934 71,191 8, , Current Liabilities - Trade and other payables 31 December 30 June Current Trade creditors 8,013 13,201 Other creditors and accruals 8,629 12,342 Employee benefits 6,627 5,132 Net GST payable 6,109 3,077 Premium funding loan ,566 33,752 17

18 Notes to the Consolidated Financial Statements For the half-year ended 31 December 11 Financial Liabilities In August the Company renegotiated its existing finance facility, extending maturity to June 2018 and re-weighted debt finance, reducing short-term overdraft by A$5M in favour of long-term debt facility. The security for the facilities remains unchanged, being a first ranking general security interest over all the assets and undertakings of the Company. 31 December 30 June Current Non-current Total Current Non-current Total A$'000 A$'000 A$'000 A$'000 A$'000 A$'000 Secured Overdraft ,235-2,235 Working capital facility 3,000-3,000 3,810-3,810 Term debt facility 7,000 26,308 33,308 6,900 19,348 26,248 Lease Liabilities 1,717 2,654 4, ,299 2,296 Total Secured Borrowings 11,717 28,962 40,679 13,942 20,647 34, December 30 June The consolidated entity has access to the following lines of credit Bank overdraft and working capital facilities 8,000 19,000 Facilities utilised (3,000) (11,167) Undrawn facility 5,000 7,833 Secured liabilities The security for the loans and overdraft facility is a first ranking general security interest over all the assets and undertakings of the Company, including those classified as held for sale. Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default. 12 Financial risk management The renegotiated finance facility substituted A$5M short-term overdraft facility to a term debt facility which is carried at amortised cost. Both revised short and long term facilities are variable rate Australian-dollar denominated and therefore do not impact on the Company s foreign exchange or price risk. (a) Cash flow and interest rate risk The Company s main interest rate risk arises from long-term, term debt borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk. Borrowings issued at fixed rates expose the Company to fair value interest rate risk if borrowings are carried at fair value. Company policy is to monitor fixed rates and forward market expectations and periodically reassess an appropriate percentage of its borrowings at a fixed rate, using interest rate swaps to achieve this when necessary. 18

19 Notes to the Consolidated Financial Statements For the half-year ended 31 December 12 Financial risk management (continued) At the reporting date, the Company had the following variable and fixed rate borrowings outstanding: 31 December 30 June Weighted average interest rate % Balance A$ 000 Weighted average interest rate % Balance A$ 000 Bank loans (Variable) 5.95% 36, % 30,058 Overdraft (Variable) 9.20% % 2,235 Financial Lease Liabilities (Fixed) 8.00% 4, % 2,296 Net exposure to cash flow interest rate risk 40,679 34,589 The Company s fixed rate borrowings and receivables are carried at amortised cost. They are therefore not subject to interest rate risk as defined, since neither the carrying amount nor the future cash flows will fluctuate because of a change in market rates. The Company analyses its interest rate exposure on dynamic basis. Various scenarios are simulated taking into consideration refinancing, renewal of existing position, and alternative financing and hedging. Based on these scenarios, the Company calculates the impact on profit or loss of a defined interest rate shift. The scenarios are run only for liabilities that represent major interest bearing position on quarterly basis to verify that the maximum loss potential is within the limit given by management. Based on the various scenarios, the Company manages its cash flow interest rate risk by using floating-to-fixed interest rate swaps. Such interest rate swaps have the economic effect of converting borrowings from floating rates to fixed rates. Generally, the Company raises long-term borrowings at floating rates and swaps them into fixed rates that are lower than those available if the Company borrowed at fixed rates directly. Under the interest rate swaps, the Company agrees with the lender to exchange the difference between fixed contract rates and the floating rate interest amounts calculated by reference to the agreed notional principal amounts. (b) Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed credit facilities to meet obligations when due. Management monitors short-term rolling forecasts of the Company s liquidity reserve comprising undrawn borrowing facilities below, and cash and cash equivalents (note 5) on the basis of expected cash-flows. In addition, the Company s liquidity management policy involves preparing annual budgets projecting cash-flows, considering the level of liquid assets necessary to meet planned activity, monitoring balance sheet liquidity ratios and maintaining debt financing plans. i. Financing arrangements The Company had access to the following undrawn facilities borrowing facilities at the reporting date: Floating Rate 31 December 30 June - Expiring within one year (bank overdraft and working capital facility) 5,000 7,765 The bank overdraft and working capital facilities are subject to an annual review. 19

20 Notes to the Consolidated Financial Statements For the half-year ended 31 December 12 Financial risk management (continued) ii. Maturities of Financial Liabilities The tables below analyse the Company s financial liabilities into relevant maturity groupings based on the remaining period at the reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. 31 December Carrying Amount Contractual Cash-flow Less than 6 months 6-12 months 1-2 years 2-5 years More than 5 years Non-interest bearing Trade creditors 8,013 8,013 8, Deferred vendor payment Variable rate Bank overdraft Bank borrowings 36,308 41,525 4,554 7,448 8,444 21,079 - Fixed rate Finance lease 4,371 5, ,266 2, Total 49,192 55,251 14,005 8,714 10,625 21, June Carrying Amount Contractual Cash-flow Less than 6 months 6-12 months 1-2 years 2-5 years More than 5 years Non-interest bearing Trade creditors 13,201 13,201 13, Deferred vendor payment 1,000 1,000 1, Variable rate Bank overdraft 2,235 2,235 2, Bank borrowings 30,058 33,480 8,173 4,153 7,973 13,181 - Fixed rate Finance lease 2,296 2, Total 48,790 52,533 25,139 4,822 8,933 13,639 - The above liquidity analysis assumes worst case scenario for the Company if they were required to repay all liabilities earlier than expected. The Company believes the likelihood of this as being remote. iii. Fair values of other financial instruments as at 31 December Carrying Fair Value Amount Non-current borrowings Bank loans 26,308 29,523 Lease liabilities 2,654 3,008 Total 28,962 32,531 Due to the short-term nature, the carrying amounts of the current receivables, current payables, deferred vendor payment and current borrowings are assumed to approximate their fair value. 20

21 Notes to the Consolidated Financial Statements For the half-year ended 31 December 13 Current Liabilities Deferred Vendor Payments The current deferred vendor payments for business combinations are outlined below: 31 December 30 June Progress Pacific 500 1,000 Total 500 1,000 On 20 October 2010 the Group acquired 100% of shares in Progress Pacific Pty Ltd. During the current period, the Group paid A$500,000 in cash to the vendors. 14 Reconciliation of profit after income tax to net cash inflow from operating activities Reconciliation of profit/(loss) after income tax to net cash provided by operating activities 2012 Profit/(loss) after income tax 3,818 (4,640) Add/(less) non-cash items Depreciation and amortisation 3,453 2,857 Impairment and write-downs - 2,355 Loss on Disposal of PPE - 30 Reduction in Deferred Vendor Payments - (774) Share Based Payments Net cash provided by operating activities before change in assets and liabilities 7,362 (125) Change in assets and liabilities adjusted for effects of purchase of controlled entities and businesses during the financial year: (Increase)/decrease in trade and other receivables (5,056) (1,607) (Increase)/decrease in deferred taxes 1,824 (2,251) (Increase)/decrease in work in progress 843 1,439 (Increase)/decrease in prepayments (Decrease)/increase in trade and other payables (4,186) 1,026 (Decrease)/increase in provisions (Decrease)/increase in current tax liabilities 138 3,329 (Decrease)/increase in unearned revenue Net cash provided by/(used in) operating activities 1,737 2, Dividends Ordinary Shares 2012 Dividends provided for or paid during the half-year - 5, Contingencies The Company had contingent liabilities at 31 December in respect of: The Company had Bank Guarantees for A$3,119,433 (30 June : A$5,121,613) that are not yet due but may be called upon at any time that is not included in the financial liabilities. 21

22 Notes to the Consolidated Financial Statements For the half-year ended 31 December 17 Equity securities issued 2012 Shares A$ Shares A$ Fully paid ordinary shares Balance at beginning of financial year 206,720, ,160, ,152, ,742,837 Issues of ordinary shared during the half-year - Placement of shares ,533,327 15,357,330 - Exercise of options ,000 8,600 - Acquisition of controlled entity (Capiotech) - - 2,330,247 1,683,547 - Acquisition of controlled entity (Progress Pacific) - - 2,685,186 1,939,982 -Transaction costs/taxation implications - (36,691) - (535,242) Balance at the end of half-year 206,720, ,123, ,720, ,197, Related party transactions Transactions between related parties are on normal commercial terms and conditions with no more favourable than those available to other parties unless otherwise stated. ASG Group Limited and its subsidiaries are parties to a deed of cross guarantee under which each company guarantees the debts of the others. By entering into the deed, the wholly-owned entities have been relieved from the requirement to prepare a financial report and directors report under Class Order 98/1418 (as amended) issued by the Australian Securities and Investment Commission. The parties to the deed of cross guarantee are all members of the consolidated Group thereby no further disclosures are required. ASG Group Limited subsidiaries and parent entity financial information is disclosed in the notes of the June financial statements. No other related party transactions occurred in the half-year. 19 Events occurring after the reporting period As at signing date of this report, there have not been any material subsequent events. 22

23 Director s Declaration 31 December DIRECTOR S DECLARATION The directors of the company declare that: 1. The financial statements, comprising the statement of profit or loss and other comprehensive income, statement of financial position, statement of cash flows, statement of changes in equity and accompanying notes, are in accordance with the Corporations Act 2001 and: (a) (b) comply with Accounting Standards and the Corporations Regulations 2001; and other mandatory professional reporting requirements; and give a true and fair view of the consolidated entity s financial position as at 31 December and of its performance for the year ended on that date. 2. The Group has included in the notes to the financial statements an explicit and unreserved statement of compliance with International Financial Reporting Standards. 3. In the directors opinion, there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and payable. 4. The directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer required by section 295A of the Corporations Act This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of the directors by: Geoff Lewis Managing Director/Chief Executive Officer Perth 10 February

24 Tel: Fax: Station Street Subiaco, WA 6008 PO Box 700 West Perth WA 6872 Australia INDEPENDENT AUDITOR S REVIEW REPORT To the members of ASG Group Ltd Report on the Half-Year Financial Report We have reviewed the accompanying half-year financial report of ASG Group Ltd, which comprises the consolidated statement of financial position as at 31 December, 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 half-year ended on that date, notes comprising a statement of accounting policies and other explanatory information, and the directors declaration of the consolidated entity comprising the company and the entities it controlled at the half-year s end or from time to time during the half-year. Directors Responsibility for the Half-Year Financial Report The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error. Auditor s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity s financial position as at 31 December and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations As the auditor of ASG Group Ltd, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion. Independence In conducting our review, we have complied with the independence requirements of the Corporations Act We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of ASG Group Ltd, would be in the same terms if given to the directors as at the time of this auditor s review report. BDO Audit (WA) Pty Ltd ABN is a member of a national association of independent entities which are all members of BDO (Australia) Ltd ABN , an Australian company limited by guarantee. BDO Audit (WA) Pty Ltd and BDO (Australia) Ltd are members of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms.

25 Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of ASG Group Ltd is not in accordance with the Corporations Act 2001 including: (a) giving a true and fair view of the consolidated entity s financial position as at 31 December and of its performance for the half-year ended on that date; and (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and Corporations Regulations 2001 BDO Audit (WA) Pty Ltd Brad McVeigh Director Perth, 10 February 2014