AWF Madison Group Limited (NZX:AWF) – 2018 Interim Report

Interim
Report
2018

2

Our course is
clear and the
Company faces
the future with
confidence.
Simon Bennett, CEO
CEO’S REPORT – SIMON BENNETT 4
FINANCIAL STATEMENTS 9
NOTES TO THE FINANCIAL STATEMENTS 14
DIRECTORY 24
Contents
3
AWF MADISON GROUP INTERIM REPORT 2018

Refocusing
the AWF
Business.
Simon Bennett, CEO
fifi 
4
CEO’S REPORT

AWF has been experiencing margin
decline for a number of years now.
We had expected to stem this tide and
begin to grow both margin and revenue.
Two factors drive margin in AWF:
the declared mark-up on hourly rate; and
the realised cost of other minimum
entitlements, training and PPE (personal
protective equipment) provided to the worker.
With our overseas workers (predominantly
Filipino) the costs also include travel
commitments and guaranteed salary in
between assignments, or prior to them
commencing their work on arrival.
Over the last few years the costs of training
and PPE have risen as we continue to lift
the standard of care for our workers; and
we have not been able to fully recover these
costs from our clients in most cases.
What we have achieved is a lift in the
quality of our workforce and, over time, this
positions us better to renegotiate improved
rates with our clients at contract renewals.
The smooth deployment of our migrant
workers is dependent on timely approvals
of visa applications.
As we reported at the end of FY2017, we had
a backlog of unprocessed visas, which were
all approved by the beginning of this calendar
year. We made the decision to bring all these
workers to Auckland, at what, in retrospect,
transpired to be an inopportune time.
In the first half of FY2019
AWF did not rebound
as we had expected. We
are disappointed by the
business’s performance,
but we have a clear vision
of the direction in which
we need to take it.
AWF MADISON GROUP INTERIM REPORT 2018
5
CEO’S REPORT

The resultant disruption to these workers’
lives generated some negative publicity,
and we went well beyond our contractual
obligations in paying them and ensuring
they were redeployed to work as quickly
as possible.
During this time, some substantial clients
had contract issues with large head
contractors. As a result of failed progress
and variation claims of these clients, which
became litigious, they could not sustain
adequate working capital to retain workers.
We were forced to reduce our exposure to
these clients and endeavoured to redeploy
workers elsewhere.
We supported our workers throughout, up
to and during the ensuing client liquidations,
when all workers were immediately
superfluous to these clients’ requirements.
This compounded the initial issue and took
many months to resolve, and resulted in
the first half of FY2019 reporting a large
increase in provision for doubtful debts.
It is clear that there is opportunity in
the construction sector and that,
well-managed, the opportunity exists to
deploy large numbers of migrant workers.
We will be conservative in the degree to
which we continue to participate for the
foreseeable future.
In AWF’s wider business we have seen
this tide of margin decline finally halted
and some growth of new smaller clients
who are aligned with our views around fair
compensation to workers, including and
beyond base pay rates.
Procurement-driven, cost-out clients are
becoming less desirable to us, but we
now have a core group in our base business
from which we can drive growth.
This repositioning of AWF has not distracted
us from the remainder of the business, which
is growing both in turnover and profitability.
Both Madison and Absolute IT grew during
the six months under review.
Absolute IT has seen a swing to greater
demand for permanent recruitment, which is
less dependent on working capital and more
profitable in the short term.
As business confidence softens we expect
a gradual trend back towards contracting.
Absolute IT remains in good heart, and sees
continued growth prospects.
We were saddened by the recent passing
of one of the founders of Absolute IT,
Martin Barry.
Tracey Johnson, our GM, is continuing to
redefine our delivery model and is focussing
on the growth of her leaders. We are excited
to have partnered with technology industry
analysts TIN to sponsor the newly named
“Absolute IT Supreme Scale-ups Awards”,
which reflects the fact that the TIN200
companies, as a whole, are coming of age.
2CEOE’COS RPOPT–TEPROI2 –OMCRNE B4NFA CEPT4C– 4TAN4P L9H1
6

As reported by TIN “Our fastest growing
companies, ranked 101-200 in the TIN
Report, are a maturing group of companies
whose products have been proven and fine-
tuned to meet market needs, and they are
expanding rapidly on a global scale. A key
part of any company expansion is recruiting
the right staff at the right time”.
We are proud to be a key stakeholder in, and
contributor to, this key sector of the economy.
Christian Brown, Madison’s GM, continues
to build on the business’s strength and
capability in projects of scale and significance
in the government sector.
On the back of some strong delivery of
projects, we have been targeted for other
proposals by new and existing clients.
These projects involve the sourcing,
management, training and redeployment of
contingent workers, driving revenue growth.
At the same time the strength of the
economy has also driven growth in demand
for permanent recruitment, with a drop-off
in temporary hiring from our mainstream
client base. Like Absolute IT, Madison
expects this trend to slowly reverse.
As I described in our latest annual report,
a new Government and much discussion in
the Employment Relations space have made
for interesting times.
We have been engaging proactively with
Government and the appropriate Select
Committee that is considering changes
to employment legislation.
We feel very comfortable with the goals of
both Government and the Opposition. The
changing needs of the workforce are being
recognised, and the importance of temporary
workers is acknowledged as a key and
legitimate part of the employment landscape.
I’m confident that any changes to the
legislative framework in which we operate
will be measured and sensible.
I’m grateful for the commitment of my
Leadership team, which has been stable but
for the maternity leave of our long-standing
and loyal Marketing Manager Shereen Low.
I’m excited to welcome Liz Meleisea to lead
our group marketing function. Liz brings an
external view, specialist sourcing expertise
and enthusiasm to this key function.
This has been one of the harder six months
of my tenure as CEO. While I am not happy
with the latest results we have delivered,
our course is clear and the Company faces
the future with confidence.
2CEOE’COS RPOPT–TEPROI2 –OMCRNE B4NFA CEPT4C– 4TAN4P L9H1
7

Net Profit
After Tax
DividendNet Bank Debt
Net Operating
Cash Flow
8.0cps
$ 2 .1
Million
$ 6 .1
Million
$ 2 7. 3
Million
Down 40% from
$3.4m last year
Up 25.9% on
$1.6m for the
preceding six
months
Down from
$11.9m last year
(recovery of high
debtor book 31st
March 2017)
Up from -$0.3m
for the preceding
six months
Interim dividend
last year 8.0cps
Up from $23.2m last year
(following Absolute IT
earn-out payment of $3.25m)
Down from $29.7m as at
31st March 2018
Revenue
$141.6
Million
Down 1.0% from $143.1m last year
Up 3.9% on $136.2m for the
preceding six months
AWF MADISON GROUP INTERIM REPORT 2018
8
CEO’S REPORT

Financial
Statements.
9
AWF MADISON GROUP INTERIM REPORT 2018

AWF Madison Group Limited
Condensed consolidated statement of comprehensive income
For the six month period 30 September 2018 (unaudited)
GROUP
6 months to
30 September
2018
(unaudited)
6 months to
30 September
2017
(unaudited)
$’000$’000
Revenue141,577143,078
Investment revenue––
Direct costs(1,752)(986)
Employee benefits expense(128,735)(129,001)
Depreciation and amortisation expense(1,642)(1,864)
Other operating expenses(5,938)(5,998)
Finance costs(637)(741)
Profit before tax2,8734,488
Income tax expense(821)(1,070)
Profit for the period2,0523,418
Other comprehensive income for the period––
Total comprehensive income for the period2,0523,418
Profit for the period income is attributable to equity holders of the Group2,0523,418
Total comprehensive income is attributable to equity holders of the Group2,0523,418
Earnings per share
Total basic earnings per share (cents/share)6.310.5
Total diluted earnings per share (cents/share)6.310.5
The notes to the interim condensed consolidated financial statements form an integral part of these financial statements
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
10

AWF Madison Group Limited
Condensed consolidated statement of financial position
As at 30 September 2018 (unaudited)
GROUP
30 September
2018
(unaudited)
30 September
2017
(unaudited)
31 March 2018
(audited)
$’000$’000$’000
Assets
Non-current assets
Property, plant and equipment3,2793,0762,498
Intangible assets – goodwill39,41138,62038,620
Intangible assets – other14,84516,94816,079
Total non-current assets57,53558,64457,197
Current assets
Cash and cash equivalents5,66910,3176,269
Trade and other receivables35,42933,59341,830
Taxation receivable145––
Total current assets41,24343,91048,099
Total assets98,778102,554105,296
Equity and liabilities
Non-current liabilities
Deferred tax liabilities2,6802,5962,748
Borrowings33,00033,50036,000
Total non-current liabilities35,68036,09638,748
Current liabilities
Trade and other payables25,83524,78128,867
Taxation payable–201622
Provisions200200200
Absolute IT Limited earn-out payment–3,420–
Total current liabilities26,03528,60229,689
Total liabilities61,71564,69868,437
Net assets37,06337,85636,859
Capital and reserves
Share capital28,37127,53427,598
Group share scheme reserve466429383
Retained earnings8,2269,8938,878
Total equity37,06337,85636,859
For and on behalf of the Board who authorise the issue of the financial statements on 26 October 2018:
ROSS KEENAN, Chair JULIA HOARE, Chair, Audit and Risk Committee
The notes to the interim condensed consolidated financial statements form an integral part of these financial statements
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
11

AWF Madison Group Limited
Condensed consolidated statement of changes in equity
For the six month period 30 September 2018 (unaudited)
GROUP
Share
capital
Treasury
shares
Group share
scheme
reserve
Retained
earnings
Total
equity
$’000$’000$’000$’000$’000
Period ended 30 September 2017
Balance at 1 April 201727,624(319)4519,18036,936
Comprehensive income
Profit for the period–––3,4183,418
Other comprehensive income–––––
Total comprehensive income–––3,4183,418
Transactions with shareholders
Dividends paid–––(2,705)(2,705)
Restricted shares redeemed(90)90–––
Restricted shares exercised–229––229
Share based payments––(22)–(22)
Total transactions with shareholders(90)319(22)(2,705)(2,498)
Balance at 30 September 201727,534–4299,89337,856
Period ended 30 September 2018
Balance at 1 April 201827,598–3838,87836,859
Comprehensive income
Profit for the period–––2,0522,052
Other comprehensive income–––––
Total comprehensive income–––2,0522,052
Transactions with shareholders
Issue of share capital773–––773
Dividends paid–––(2,704)(2,704)
Share based payments––83–83
Total transactions with shareholders773–83(2,704)(1,848)
Balance at 30 September 201828,371–4668,22637,063
The notes to the interim condensed consolidated financial statements form an integral part of these financial statements
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
12

AWF Madison Group Limited
Condensed consolidated statement of cashflows
For the six month period ended 30 September 2018 (unaudited)
GROUP
6 months to
30 September
2018
(unaudited)
6 months to
30 September
2017
(unaudited)
$’000$’000
Cashflows from operating activities
Receipts from customers146,810154,350
Payments to suppliers and employees(138,373)(138,915)
Net cash generated from operations8,43715,435
Interest paid(638)(741)
Income taxes paid(1,656)(2,815)
Net cash from operating activities6,14311,879
Cashflows from investing activities
Proceeds from disposal of property, plant and equipment3672
Purchase of property, plant and equipment(1,122)(248)
Purchase of intangible assets(60)(27)
Net cash paid on acquisition of Select Dunedin(666)–
Net cash (used in)/from investing activities(1,812)(203)
Cashflows from financing activities
Proceeds from the issue of share capital773229
Dividends paid to share holders of the parent(2,704)(2,705)
Repayment of borrowings(3,000)–
Net cash from/(used in) financing activities(4,931)(2,476)
Net increase/(decrease) in cash held(600)9,200
Cash and cash equivalents at start of the period6,2691,117
Net cash and cash equivalents at end of the period5,66910,317
The notes to the interim condensed consolidated financial statements form an integral part of these financial statements
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
13

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
REPORTING ENTITY
AWF Madison Group Limited is a listed company
incorporated and domiciled in New Zealand.
The address of its registered office and principal
place of business is disclosed in the directory
to the interim report.
The interim condensed consolidated financial
statements of AWF Madison Group Limited
(‘the Company’) and its subsidiaries (collectively
referred to as ‘the Group’) have been prepared:
• in accordance with IAS 34 Interim Financial
Reporting and NZ IAS 34 Interim Financial
Reporting;
• in accordance with the requirements of the
Financial Market Conduct Act 2013, the
Companies Act 1993, and the NZX listing rules;
• on the basis of historical cost, modified by
revaluation of certain assets and liabilities;
and
• in New Zealand dollars, with values rounded
to thousands ($000) unless otherwise stated.
The principal services of the Group are the
supply of temporary staff and recruitment of
permanent staff.
The interim condensed financial statements
were authorised for issue by the directors on
26 October 2018.
BASIS OF PREPARATION
The interim condensed consolidated financial
statements do not include all the information
and disclosures required in the annual financial
statements, and should be read in conjunction
with the Group’s annual financial statements
for the year ended 31 March 2018.
The accounting policies used in preparation of
these interim condensed consolidated financial
statements are consistent with those used in the
Group’s annual financial statements for the year
ended 31 March 2018, except for the adoption
of any new standards effective as of 1 April 2018,
and the early adoption of any other standard,
interpretation or amendment that has been
issued but is not yet effective.
Adoption of new and revised Standards
and Interpretations
New standards and amendments and interpretations
to existing standards that came into effect during the
current accounting period beginning on 1 April 2018
The Group has adopted the following new or revised
standards, amendments and interpretations that
became effective for the year beginning 1 April 2018.
• NZ IFRS 9 Financial Instruments
NZ IFRS 9, ‘Financial instruments’, addresses the
classification, measurement and recognition of
financial assets and financial liabilities. It replaces
the guidance in NZ IAS 39, ‘Financial Instruments:
Recognition and Measurement’, that relates to
the classification and measurement of financial
instruments. IFRS 9 retains but simplifies the
mixed measurement model and establishes three
primary measurement categories for financial
assets: amortised cost, fair value through other
comprehensive income (‘OCI’) and fair value through
profit and loss. The basis of classification depends
on the entity’s business model and the contractual
cash flow characteristics of the financial asset.
There is now a new expected credit losses
impairment model that replaces the incurred loss
impairment model used in NZ IAS 39. For financial
liabilities, there were no changes to classification
and measurement, except for the recognition of
changes in own credit risk in other comprehensive
income, for liabilities designated at fair value
through profit or loss.
The impact of the adoption of NZ IFRS 9 on the
Group’s financial statements:
Classification, measurement, presentation and
disclosure of financial instruments
The Group’s financial instruments included only
those measured at amortised cost and at fair
value through profit or loss and therefore the
classification, measurement, presentation and
disclosure of the Group financial instruments
remain unchanged under NZ IFRS 9.
Accordingly, neither the comparative financial
information nor the opening balance sheet on
1 April 2018 have been restated.
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
14

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
Impairment model change from incurred losses to
expected credit losses
The Group’s incurred credit losses from its financial
assets have historically not been material and
the introduction of the expected credit losses
impairment model has not had a material impact
on the measurement of the Group’s financial assets.
Accordingly, neither the comparative financial
information nor the opening balance sheet on
1 April 2018 have been restated.
Accounting policies
The adoption of NZ IFRS 9 from 1 April 2018 has
resulted in changes in the Group’s accounting
policies with respect to financial instruments.
These new accounting policies are set out
further below.
The Group’s previous accounting policy for
financial instruments
Financial assets and financial liabilities are
recognised on the Group’s balance sheet when
the Group becomes a party to the contractual
provisions of the instrument. All of the financial
assets of the Group, which include trade and other
receivables and other current assets (cash and cash
equivalents), are classified as loans and receivables
at amortised cost. The Group’s trade and other
payables are classified as financial liabilities at
amortised cost except for the Absolute IT earn out
payment which was classified as a financial liability
at fair value through profit or loss.
(i) Trade and other receivables
Trade and other receivables are measured on
initial recognition at fair value and subsequently at
amortised cost using the effective interest method.
Appropriate allowances for estimated irrecoverable
amounts are recognised in the profit and loss when
there is objective evidence that the asset is
impaired. The allowance recognised is measured
as the difference between the asset’s carrying
amount and the present value of estimated future
cash flows discounted at the effective interest rate
computed at initial recognition.
In determining the recoverability of trade or other
receivables, the Group considers any change in the
credit quality of the receivable from the date credit
was initially granted up to the end of the reporting
period, referring to past default experience of the
counterparty and an analysis of the counterparty’s
current financial position.
(ii) Trade and other payables
Trade and other payables are initially measured at
fair value, and subsequently measured at amortised
cost, using the effective interest rate method.
The Group’s current accounting policy for
financial instruments
The group classifies its financial assets into one of
the following measurement categories:
• those to be measured subsequently at fair value
(either through OCI or through profit or loss), and
• those to be measured at amortised cost.
The classification depends on the Group’s business
model for managing the financial assets and the
contractual terms of the cash flows.
The group classifies its financial liabilities into one
of the following measurement categories:
• those to be measured at amortised cost; and
• those to be measured subsequently at fair value
through profit or loss.
Financial assets and financial liabilities are
recognised on the Group’s balance sheet when the
Group becomes a party to the contractual provisions
of the instrument. All of the financial assets of the
Group, which include trade and other receivables,
other current assets (deposits), are classified as
loans and receivables at amortised cost. The Group’s
trade and other payables are classified as financial
liabilities at amortised cost except for the Absolute
IT earn out payment which was classified as a
financial liability at fair value through profit or loss.
(i) Trade and other receivables
Trade and other receivables are measured on
initial recognition at fair value and subsequently at
amortised cost using the effective interest method.
Appropriate allowances for expected irrecoverable
amounts are recognised in the profit and loss
which are assessed using the simplified approach
permitted by NZ IFRS 9, which requires expected
lifetime losses for trade and other receivables to be
recognised from initial recognition of receivables.
The allowance recognised is measured by
considering the risk or probability that a credit
loss occurs, over the maximum contractual period
(including extension options) over which the Group
is exposed to credit risk, by reflecting the possibility
that a credit loss occurs and the possibility that no
credit loss occurs, even if the possibility of a credit
loss occurring is very low.
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
15

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
The Group determines the expected credit losses by:
• an unbiased and probability-weighted amount
that is determined by evaluating a range of
possible outcomes;
• time value of money;
• reasonable and supportable information that
is available at the reporting date about past
events, current conditions and forecasts of future
economic conditions.
When reassessing expected credit losses the Group
also considers any change in the credit quality of the
receivable from the date credit was initially granted
up to the end of the reporting period, referring to
past default experience of the counterparty and
an analysis of the counterparty’s current financial
position.
(ii) Trade and other payables
Trade and other payables are initially measured at
fair value,and subsequently measured at amortised
cost, using the effective interest rate method.
• NZ IFRS 15 Revenue from Contracts
with Customers
NZ IFRS 15 ‘Revenue from Contracts with
Customers’ will replace NZ IAS 18 ‘Revenue’.
NZ IFRS 15 provides a five-step model to be applied
to the recognition of revenue arising from contracts
with customers:
• identify the contract with the customer;
• identify the performance obligations in the
contract;
• determine the transaction price;
• allocate the transaction price to the performance
obligations in the contract; and
• recognise revenue when (or as) the entity
satisfies a performance obligation.
NZ IFRS 15 also introduces new disclosures
for revenue.
Under NZ IFRS 15 the Group would recognise
revenue when (or as) it satisfies a performance
obligation by transferring a promised service to
a customer (which is when the customer obtains
control of that service). A performance obligation may
be satisfied at a point in time (e.g. upon the supply
or recruitment of staff) or over time (e.g. consulting
services). For a performance obligation satisfied over
time, the Group will select an appropriate measure of
progress to determine how much revenue should be
recognised as the performance obligation is satisfied.
The Group’s revenue is earned from the following:
• supply of temporary staff (to industry, commerce
and IT);
• recruitment of contract and permanent staff
(to industry, commerce and IT); and
The impact of the adoption of NZ IFRS 15 on the
Group’s financial statements:
The way in which the Group recognised revenue from
contacts with its customers under the requirements
of NZ IAS 18 ‘Revenue’ is materially consistent with
the revenue recognition requirements of NZ IFRS
15 and therefore the adoption of NZ IFRS 15 has not
had material impact on the way in which the Group’s
recognises revenue.
Accordingly, neither the comparative financial
information nor the opening balance sheet on 1 April
2018 have been restated.
Accounting policies
The adoption of NZ IFRS 15 from 1 April 2018 has
resulted in changes in the Group’s accounting
policies with respect to revenue from contracts with
its customers.
These new accounting policies are set out
further below.
The Group’s previous accounting policy for revenue
recognition from contracts with its customers
Revenue is measured at the fair value of the
consideration received or receivable.
(i) Rendering of services
Revenue from the provision of services is
recognised when the services are provided.
Permanent placement fees are recognised in the
accounting period when a candidate accepts an
offer of employment. Temporary and contractors
placements fees are recognised when services
are provided.
(ii) Dividend and interest revenue
Dividend and interest revenue is presented
as investment revenue in the statement of
comprehensive income.
Dividend revenue from investments is recognised
when the shareholder’s right to receive payment has
been established.
Interest revenue is accrued on a time basis using the
effective interest method.
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
16

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
The Group’s current accounting policy for revenue
recognition from contacts with its customers
Revenue is measured at the fair value of the
consideration received or receivable.
(i) Rendering of services
Revenue from the provision of services is recognised
when the services are provided. Revenue is
recognised based on the actual service provided to
the end of the reporting period as a proportion of the
total services to be provided, because the customer
receives and uses the benefits simultaneously. This
is determined based on the actual labour hours
spent relative to the total expected labour hours.
Permanent placement fees are recognised in the
accounting period when a candidate accepts an offer
of employment.
Temporary and contractors placements fees are
recognised when services are provided.
(ii) Dividend and interest revenue
There have been no changes to the accounting policy
for recognising dividend and interest revenue.
New standards and amendments and
interpretations to existing standards that are not
yet effective for the current accounting periods
beginning on 1 April 2018
The Group has not early adopted any new
standards, amendments and interpretations that
have been issued but are not yet effective.
The new standards, amendments and
interpretations that will have an impact on the
Group are discussed below and the Group intends
to adopt these new standards, amendments and
interpretations when they become mandatory.
• NZ IFRS 16 Leases
NZ IFRS 16 ‘Leases’ will replace NZ IAS 17 ‘Leases’.
NZ IFRS 16 eliminates the distinction between
operating and finance leases for lessees and will
result in lessees bringing most leases onto their
Statements of Financial Position.
The main changes affect lessee accounting only
– lessor accounting is mostly unchanged from
NZ IAS 17.
NZ IFRS 16 introduces the following:
• Use of a control model for the identification of
leases. This model distinguishes between leases
and service contracts on the basis of whether
there is an identified asset controlled
by the customer.
• Distinction between operating and finance leases
is removed. Assets (a right-of-use asset) and
liabilities (a lease liability reflecting future lease
payments) will now be recognised in respect
of all leases, with the exception of certain
short-term leases and leases of low value assets.
The effective date is annual reporting periods
beginning on or after 1 January 2019. Earlier
application is permitted, if NZ IFRS 15 Revenue from
Contracts with Customers has also been adopted.
The indicative impacts of implementing NZ IFRS
16 are as follows for all leases that the Group is a
party to:
Initial recognition and measurement:
• Recognition of a right of use (‘ROU’) asset. Initial
measurement of the ROU asset would include
the initial present value of the lease liability, the
initial direct costs, prepayments made to lessor,
less any lease incentives received from the lessor
and restoration, removal and dismantling costs;
and
• Recognition of a lease liability, which would
reflect the initial measurement of the present
value of lease payments, including reasonably
certain renewals.
Subsequent measurement:
• ROU asset: Depreciate the ROU asset based on
NZ IAS 16 Property, plant and equipment.
• Lease liability: Accrete liability based on the
effective interest method, using a discount rate
determined at lease commencement (as long
as a reassessment and a change in the discount
rate have not occurred) and reduce the liability
by payments made.
NZ IFRS 16 will have a material impact on the
Group’s financial statements and will be dependent
on the leases that the Group is a party to as at the
beginning of the comparative accounting period
presented in the Group’s financial statements for the
year ended 31 March 2020. The Group’s operating
lease commitments as at 31 March 2018 are set out
in note F4 of the Group’s annual financial statements
for the year ended and as at 31 March 2018,
however, measurement of the lease liability and
asset under NZ IFRS 16 is yet to be fully assessed.
The Group will adopt NZ IFRS 16 no later than the
accounting period beginning 1 April 2019.
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
17

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
Segment revenueSegment profit
6 months to
30 September
2018
(unaudited)
6 months to
30 September
2017
(unaudited)
6 months to
30 September
2018
(unaudited)
6 months to
30 September
2017
(unaudited)
SEGMENT REVENUE AND RESULTS$’000$’000$’000$’000
Continuing operations
Temporary staffing to industry60,98566,6451,0063,185
Temporary, contract and permanent
staff services to commerce80,59276,4333,8543,368
Total for continuing operations141,577143,0784,8606,553
Other income––
Central administration costs and directors fees(1,350)(1,324)
Finance costs(637)(741)
Profit/(loss) before tax2,8734,488
Income tax expense(821)(1,070)
Profit for the year2,0523,418
Revenue reported above represents revenue generated from external customers. Inter-segment sales
in the year were $188,000 (2017: $333,000) and have been eliminated from the above table.
The accounting policies of the reportable segments are the same as the Group’s accounting policies
described in this report. Segment profit represents the profit earned by each segment without allocation
of central administration costs and directors’ salaries, investment revenue, finance costs, and income
tax expense. This is the same measure reported to the chief operating decision maker for the purpose
of resource allocation and assessment of segment performance.
SEGMENT INFORMATION
The directors have identified the following reportable segments:
Temporary staffing to industry
The Group operates branches under the brand
names AWF Labour, AWF Manufacturing and
Logistics, AWF Trades and Tradeforce Recruitment
in major towns and cities throughout New Zealand.
These brands derive their revenues from temporary
staffing services to industry and are considered to
be one operating segment and one reportable
segment for which discrete financial information
is available and whose operating results are
regularly reviewed by the Group’s chief operating
decision maker.
Temporary, contract and permanent staff services
to commerce
The Group operates branches under the brand
names Madison Recruitment, Madison Force,
Interim Taskforce and Absolute IT in major cities
throughout New Zealand. These brands derive their
revenues from temporary, contract and permanent
staff services to commerce and are considered to be
one operating segment and one reportable segment
for which discrete financial information is available
and whose operating results are regularly reviewed
by the Group’s chief operating decision maker.
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
18

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
30 September
2018
(unaudited)
30 September
2017
(unaudited)
SEGMENT ASSETS$’000$’000
Temporary staffing to industry34,67429,092
Temporary, contract and permanent staff services to commerce62,89272,226
Total segment assets97,566101,318
Unallocated assets1,2121,236
Total assets98,778102,554
For the purposes of monitoring segment performance and allocating resources between segments,
the chief operating decision maker monitors the tangible, intangible and financial assets attributable
to each segment. All assets are allocated to reportable segments other than cash, cash equivalents
and tax assets of the parent.
30 September
2018
(unaudited)
30 September
2017
(unaudited)
SEGMENT LIABILITIES$›000$’000
Temporary staffing to industry13,63514,298
Temporary, contract and permanent staff services to commerce16,64116,023
Total segment liabilities30,27630,321
Unallocated liabilities31,43934,377
Total liabilities61,71564,698
For the purposes of monitoring segment performance and allocating resources between segments,
the chief operating decision maker monitors the liabilities attributable to each segment. All liabilities
are allocated to reportable segments other than bank loans and tax liabilities of the parent.
 
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
19

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
6 months to
30 September
2018
(unaudited)
6 months to
30 September
2017
(unaudited)
6 months to
30 September
2018
(unaudited)
6 months to
30 September
2017
(unaudited)
6 months to
30 September
2018
(unaudited)
6 months to
30 September
2017
(unaudited)
OTHER SEGMENT
INFORMATION$’000$’000$’000$’000$’000$’000
Depreciation
and amortisation
Employee
benefits
Net additions to
non-current assets
Temporary staffing
to industry34154655,47260,176983(345)
Temporary, contract
and permanent
staff services to
commerce1,3011,31872,56068,139(646)(1,293)
Unallocated––703686––
Total 1,6421,864128,735129,001337(1,638)
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
20

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
GEOGRAPHICAL INFORMATION
The Group operates in one geographical area,
New Zealand (country of domicile). All revenues
from external customers, and non-current assets
other than financial instruments, deferred tax
assets and post-employment benefit assets are
attributable to the Group’s country of domicile.
INFORMATION ABOUT CUSTOMERS
The Group has no customers individually making
up 10% of Group revenue and therefore does not
have a reliance on its major customers (for the six
month period ended 30 September 2017, the Group
had no customers individually making up 10% of
Group revenue).
FINANCIAL INSTRUMENTS
The carrying amounts of financial instruments at
balance date approximate the fair value at that date.
CONTINGENT LIABILITIES
There were no contingent liabilities as at
30 September 2018 or 30 September 2017.
GROUP
6 months to
30 September
2018
(unaudited)
6 months to
30 September
2017
(unaudited)
RECONCILIATION OF NET PROFIT AFTER TAX
TO CASH FLOWS FROM OPERATING ACTIVITIES$’000$’000
Net profit after income tax2,0523,418
Adjustments for operating activities non-cash items:
Depreciation and amortisation1,6421,864
Loss on disposal of property, plant and equipment(10)(25)
Movement in doubtful debts provision plus bad debt write off in current year82710
Movement in deferred tax(68)(521)
Equity-settled share-based payments83(22)
Total non‑cash items2,4741,306
Movements in working capital excluding movements relating
to purchase of subsidiaries:
(Increase)/decrease in trade and other receivables, net of bad debt expense5,52411,633
Increase/(decrease) in trade and other payables(3,140)(3,026)
Increase/(decrease) in provisions–(17)
Increase/(decrease) in taxation payable(767)(1,435)
Total movement in working capital1,6177,155
Cash flow from operating activities6,14311,879
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
21

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
DIVIDENDS PAID
During the six months ended 30 September 2018,
the group paid dividends of $2.704 million (six
months ended 30 September 2017: $2.705 million).
Dividend Reinvestment Plan (DRP)
In conjunction with the final dividend declared for
the financial year ended 31 March 2018 the board
implemented a DRP which enabled shareholders to
reinvest up to 50% of their dividend in newly issued
ordinary shares in AWF Madison Group Limited at
$1.92 per share with the balance paid out in cash on
10 July 2018. A total of 402,415 ordinary shares for
a total of $773,000 were issued.
PURCHASE OF SELECT
Effective 1 September 2018 AWF Limited acquired
the business of Select Dunedin (‘Select’) from
Select Recruitment Limited. Select’s service include
temporary staffing and permanent recruitment
to industry and commerce in the Dunedin region.
The acquisition of Select further expands AWF
Madison’s presence in temporary staffing and
permanent recruitment to industry and commerce
in the New Zealand market. The goodwill arising
on acquisition is not deductible for income tax
purposes.
NamePrincipal activity
Date of
acquisition
Proportion
acquired
Cost of
acquisition
%$’000
SelectTemporary, contract and permanent staff
services to industry and commerce1/9/2018100%666
Fair value on
acquisition
Analysis of assets and liabilities acquired$’000
Non-current assets
Plant and equipment33
Current assets
Other receivables8
Current liabilities
Trade and other payables(166)
Net identifiable assets and liabilities(125)
Intangible asset arising on acquisition that has been provisionally allocated to goodwill
while the initial acquisition accounting is being completed791
Cost of acquisition666
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
22

AWF Madison Group Limited
Notes to the interim condensed consolidated financial statements
For the six month period ended 30 September 2018 (unaudited)
Cost of acquisition
The cost of acquisition of Select was made up as follows:$’000
Paid in cash666
666
Acquisition related costs amounting to $22,000 have been excluded from the consideration transferred and
have been recognised as other operating expense in profit or loss for the period ended 30 September 2018.
Net cash outflow on acquisition$’000
Total purchase consideration666
Consideration paid in cash666
Less: cash and bank balances acquired–
Net cash paid666
Goodwill on acquisition
Given the acquisition took place within one
month prior to reporting date, the Group is still
in the process of completing its initial acquisition
accounting. The residual intangible asset arising
on acquisition has been provisionally allocated to
goodwill while the acquisition accounting is being
completed. This intangible asset is expected to
include the benefit of future market development
and the assembled client base, candidate database
and workforce. If these benefits do not meet the
recognition criteria for identifiable intangible assets
then they will be included within the goodwill as they
can not be recognised separately from goodwill.
EVENTS SUBSEQUENT TO REPORTING DATE
Interim dividend
On 26 October 2018 the directors approved the
payment of a fully imputed interim dividend of
$2.670 million (8.0 cents per share) to be paid
on 3 December 2018.
Other
There were no other material events subsequent
to reporting date.
FINANCIAL STATEMENTSAWF MADISON GROUP INTERIM REPORT 2018
23

Directory
Directors
Ross Keenan (Chairman)
Julia Hoare (Independent Director)
Nick Simcock (Independent Director)
Simon Hull (Non-Executive Director)
Wynnis Armour (Non-Executive Director)
Auditor
Deloitte Limited
Deloitte Centre
80 Queen Street
PO Box 33
Auckland
Phone: +64 9 309 4944
Fax: +64 9 309 4947
Solicitors
Russell McVeagh
Vero Centre
48 Shortland Street, PO Box 8
Auckland 1140
New Zealand
DX CX10085
Phone: +64 9 367 8000
Fax: +64 9 367 8163
Share Registry
Link Market Services
L11, Deloitte Centre
80 Queen St
Auckland
New Zealand
PO Box 91976
Ph: +64 9 375 5998
or: 0800 377 388
Registered Office of
AWF Madison Group Limited
Level 6
51 Shortland Street
PO Box 12832
Penrose
Auckland
Phone: 09 526 8770
Fax: 09 579 0224
www.awfmadison.co.nz