Annual Report
Annual Report for the year ended
30 June 2011
Ambertech Limited
ACN 079 080 158
Mission Statement
Contents
Chairman’s and Managing Director’s Review
Lifestyle Entertainment Update
Broadcast and Professional Update
New Zealand Segment
Our Business and Brands
Corporate Governance Statement
Financial Report
Shareholder Information
Corporate Directory
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IV
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VIII
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XIII
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XXIII
I
Ambertech LimitedAnnual Report for the year ended 30 June 2011 Chairman’s and
Managing Director’s Review
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Annual Report for the year ended 30 June 2011Ambertech Limited Chairman’s and Managing Director’s Review
On behalf of the Board and the executive management, we present to you the Annual Report of Ambertech Limited for 2011.
Ambertech’s business segments represent a diverse portfolio of products sold through multiple channels to market. The results
for the 2010/11 financial year reflect the difficult trading conditions experienced throughout the financial year. The major
factors impacting the result for the year include:
• Slowing in demand from the retail sector as a result of cautious consumer spending behavior, both in Australia and
New Zealand; and
• Continued depression of new home building market, restricting sales in our custom install markets.
Despite the disappointing result, the business continued to be cash flow positive for the financial year, returning cash flows from
operations of $2.1 million.
Future trading conditions are forecast to remain difficult in a number of the markets in which Ambertech operates across
Australia and New Zealand, particularly where these markets are impacted by discretionary household spending. We have
implemented a number of cost reduction measures in order to reflect where we see the current demand for our products in
order to improve our results.
We are focused on utilizing the traditional strengths of the Ambertech business as a technical distributor to bring new products
and brands to market and to redefine the methods and channels in which the business operates. These initiatives are underway
and are the key drivers of future revenue and profit growth.
In the 2011/12 financial year the business will be relocating its headquarters to a new facility which will allow Ambertech to
consolidate multiple business units under one roof. This will assist in cross selling across Ambertech’s diverse brands, and to
improve logistics management with modern building design.
The Board of Directors would once again like to thank all management and staff for their contributions to the performance and
development of the company during the year.
P F Wallace
Chairman
P A Amos
Managing Director
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Ambertech LimitedAnnual Report for the year ended 30 June 2011
Lifestyle Entertainment
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Annual Report for the year ended 30 June 2011Ambertech Limited Lifestyle Entertainment Update
Ambertech’s lifestyle entertainment business
segment is a leader in the distribution of home
theatre products, custom installation components
for home theatre and commercial installations,
projection and display products with business
and domestic applications, and a large range of
complementary video and audio accessories.
The 2010/11 financial year presented our markets with tough economic
conditions. Despite this, we were largely successful in maintaining our
market share with our major brands and categories. The second half
of the financial year is traditionally slower than the first, and this trend
continued in 2010/11.
During the year our core brands had some significant events which will
lay the foundation for future revenue growth, including:
•
One For All released a new range of their world leading Universal Remote
Control’s, in addition to some new categories which include Flat Screen
Brackets, Care and Cleaning products and Universal Charging products.
•
•
Plantronics released a new range of PC/
Multimedia and Bluetooth Headsets.
Release to the market of the new range
of Onkyo receivers which took the award
winning, feature packed models and
included support for iPods natively.
• Onkyo release to the market of a low cost simplified surround sound package which was
featured on Better Homes and Gardens.
•
•
•
Sonance have taken the “DNA” of their successful range of loudspeakers for the Custom Installation market and moved
it outdoors with the launch of the new Landscape Series.
Projection Design projectors were successful in winning a major tender for supply to the mining industry and used for
simulators.
Optoma announced a new range of 1080p 3D projectors, their first LED projector, and a range of ultra short throw
projectors for the education market, one with interactive capability.
These events, and others like them, combine to give a positive feel throughout our sales
force. We also see some early signs that business and consumer confidence may be
returning. We expect when this does happen, we will be in prime position to take full
advantage of opportunities that may arise.
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Ambertech LimitedAnnual Report for the year ended 30 June 2011 Broadcast and Professional
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Annual Report for the year ended 30 June 2011Ambertech Limited Broadcast and Professional Update
In a year of uncertainty in the market, it was very heartening to see the core products
in our Professional segment continue to hold up, and in some cases such as the
emerging new MI section, blossom.
However the Systems and Broadcast
Products areas suffered from a
distinct nervousness surrounding
investment in these areas, which
were not adequately offset by our
efforts in Government and Defence.
The Broadcast market was very uncertain, with major changes in all of the
majors structures reflecting the rapid evolution occurring in this space. The lack
of consumer spending also ripples through to the broadcast market directly,
with an immediate impact on advertising spends.
Our longer term areas of development outside the Broadcast market continue to
hold great promise for the future, and we have seen some good developments here:
• Standardisation on one of our core products as a communications platform for mining
developments, with excellent prospects for continued high value sales.
• Acquisition of a major product, Perceptive Pixel, a key high value display element in high-end Government, Resource
and defence mapping and data management systems.
• Continued expansion of protective case sales in all of these areas.
Some key successes in our traditional sales areas were:
• Acceptance by the ABC of a 3 year option for purchase of Music Production Consoles, with plans for further
purchases.
• Growth of 59% and 88% in turnover of TC Electronic Guitar and
Vocal Products respectively.
• A significant contribution to the relocation of GTV9 in Melbourne,
with products from Avid Video and Audio, SSL, Vinten and EVS all
playing a major part in the development
• Connector and cable turnover returning to Pre GFC levels.
• A very significant sale of EVS Technology to Premier Media Group
(Fox Sports), representing the culmination of several years’ work.
Overall it has been a hard year, but we stand ready to embrace the
opportunities presented by the coming year with a strong and consolidated
product range and some firm plans to embrace new markets.
VII
Ambertech LimitedAnnual Report for the year ended 30 June 2011 New Zealand
VIII
Annual Report for the year ended 30 June 2011Ambertech Limited New Zealand Segment
Our results for the year reflect, in particular, on disappointing
sales in our broadcast area. As a result, further restructuring
and some staff replacements have been undertaken as a
measure to assist in offsetting the downturn in business. Our
restructure process has been met with market acceptance and
renewed customer confidence.
The TVWorks project was brought to a successful completion
in the 2010/11 financial year and since then we have added
more storage to their system confirming our customer’s
endorsement of this Enterprise investment.
The financial year also saw the retirement of our Lifestyle Product Manager, Mr Tony van Dam. Tony had been with us for 15
years and we wish him and his family all the best in the future. Moving in to fill Tony’s seat is Mr Nigel Lee, and while Nigel is
not from our industry he brings with him a fresh and creative approach that is showing very positive and measurable results.
One of Nigel’s first achievements was the successful launch of the Trickelstar
brand in New Zealand. An incentive program was created for which Genesis
Energy clients would receive a discount via coupon when presented at their local
Warehouse Stationary store. Our patience in this area is now paying off with
re-orders by retailers happening regularly now. This partnership has been so
successful that Genesis Energy has re-signed to continue this program for another
term.
The past year has been a very hard one yet again but, looking forward we feel
confident that the future has a brighter outcome for us all.
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Ambertech LimitedAnnual Report for the year ended 30 June 2011 Our Business and Brands
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Annual Report for the year ended 30 June 2011Ambertech Limited installation:innovation
XI
Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMAZON CASES
®
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Annual Report for the year ended 30 June 2011Ambertech Limited Corporate Governance
Statement
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Ambertech LimitedAnnual Report for the year ended 30 June 2011 CORPORATE GOVERNANCE STATEMENT
Ambertech Limited (the Company) and the Board are committed to achieving and demonstrating high standards of corporate
governance. The Board continues to review the framework and practices to ensure they meet the interests of all stakeholders.
The Company recognises that on 30 June 2010 the ASX Corporate Governance Council released amendments to the second
edition in relation to diversity, remuneration, trading policies and briefings, and these will apply to the Company for the 2012
financial year.
A description of the Company’s main corporate governance practices is set out below. All these practices, unless otherwise
stated, were in place for the entire year.
Principle 1: Lay solid foundations for management and oversight
The Board is responsible to the shareholders and is accountable to them for the performance of the Company in both the
short and the longer term and seeks to balance sometimes competing objectives in the best interests of the company as a
whole. Its focus is to enhance the interests of shareholders and other key stakeholders and to deliver value through the effective
governance of the business.
The responsibilities of the Board include:
Providing strategic guidance to the company, including contributing to the development of and approving the
corporate strategy.
Reviewing, approving and monitoring systems of risk management and internal control, codes of conduct, legal
compliance and accountability systems.
Monitoring financial performance, including approval of the annual and half-yearly financial reports.
Reviewing and approving annual budgets and financial plans, including major capital expenditure initiatives.
Overseeing and monitoring the progress of major capital expenditure, capital management and acquisitions and
divestments.
Appointing and removing the Managing Director (MD).
Ratifying the appointment and removal of the Chief Financial Officer (CFO).
Monitoring the performance of the MD and CFO against annually set key performance indicators.
Ensuring appropriate resources are available to senior executives
Acting as an interface between the Company and shareholders.
Day to day management of the company’s affairs and the implementation of the corporate strategy and policy initiatives are
formally delegated by the Board to the MD, CFO and other senior executives.
Performance assessments for senior executives, other than the CFO, are the responsibility of the MD.
Assessment of the MD, CFO and other senior executives occur as part of an annual review process. Assessments consist of
formal meetings to discuss performance against set KPIs which are based on company performance targets, and vary according
to the roles and responsibilities of the executive. At the same time, these KPIs are aligned to reflect the common corporate goals
such as growth in earnings and shareholders’ wealth, and achievement of working capital targets.
The Board has adopted a formal charter and a copy is available on the company’s website.
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Annual Report for the year ended 30 June 2011Ambertech Limited Principle 2: Structure the board to add value
Details of the members of the Board, their experience, expertise, qualifications and term of office are set out in the Directors’
Report under the heading “Information on directors”. At the date of signing the Directors’ Report, the Board comprises four
non-executive directors, including the Chairman, and one executive director.
As a team, the Board brings a range of qualifications, with experience in high technology equipment, finance, accounting, public
company affairs and corporate governance. The Board believes that the first priority in the selection of directors is their ability
to add value to the Board and enhance Ambertech’s performance.
The Board’s view is that independence is extended to those non-executive directors whose interests are less than 10% of issued
capital, where that director is not the major shareholder, and where no ongoing services are being provided to the Company by
the director or related entities.
At the date of signing the Directors’ report, the Board comprises three independent directors, (Mr Peter Wallace, Mr Edwin
Goodwin, and Mr David Swift) and two non-independent directors (Mr Thomas Amos and Mr Peter Amos).
The Chairman undertakes a regular performance evaluation for the board, its committees and directors. The Chairman meets
privately with each director to discuss assessments. A performance evaluation has taken place during the reporting period in
accordance with the process described above.
The Board has established a Nomination and Remuneration committee as outlined under the heading Principle 8: Remunerate
fairly and responsibly.
Directors and Board committees have the right, in connection with their duties and responsibilities, to seek independent
professional advice at the Company’s expense, subject to approval of cost by the Chairman.
Principle 3: Promote ethical and responsible decision-making
The company has developed a broad code of conduct for all staff which operates in conjunction with a strong network of
company policies to ensure all personnel act with integrity, objectivity and in compliance with the letter and the spirit of the law
and company policies. The code applies to all employees within the company from the Board, through management to all other
staff. The code encourages all staff and other stakeholders to report any breaches of the code to the Chairman of the Board,
who is required to investigate and report on all such matters.
The Code of Conduct is supported by more detailed policies setting out the philosophy of the company in relation to its various
stakeholders. A copy of the code is available on the company’s website.
Securities Trading
The Company’s Directors and Officers are prohibited from dealing in any of the Company’s shares, except while not in
possession of unpublished price sensitive information. Directors and Officers are prohibited from dealing in the Company’s
shares during specified periods prior to the release of the Company’s results, or before the AGM. Directors and Officers must
notify either the Chair or the Company Secretary prior to dealing in the Company’s shares.
The Board has established a securities trading policy and a copy is available on the company’s website.
Diversity
ASX Principles have been revised to require companies to establish diversity related measurable objectives, undertake an annual
assessment against the objectives and make disclosures in the 2012 Annual Report.
Ambertech is currently developing and formalizing targets for gender diversity in line with the requirements under the ASX
Principles, which will be disclosed in the 2012 Annual Report. A Diversity Policy has been adopted by the Board and a copy is
available on the company’s website.
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Ambertech LimitedAnnual Report for the year ended 30 June 2011 Principle 4: Safeguard integrity in financial reporting
Audit and Risk Management Committee
The Board has established an Audit and Risk Management Committee responsible for ensuring that:
• reporting on the financial and other performance indicators for the Company meets all applicable legislative and
accounting standards;
•
the Company’s control and accountability systems are robust;
•
the Company identifies and monitors major risks as well as reviewing and ratifying systems of risk management, and
internal compliance and control; and
• governance policies of the Company comply with all relevant legislation.
Members of the Committee are Ed Goodwin (Chairperson) and Peter Wallace, each of whom is a non-executive director with
appropriate financial and business expertise to act effectively as a member of the Audit and Risk Management Committee. The
committee contains only two members as it would be inefficient for the structure of the board to have three members.
The Audit and Risk Management Committee meets at least three times a year and reports regularly to the Board. The Audit
and Risk Management Committee has direct access to any employee, the auditors or any other independent experts and
advisers, as it considers appropriate in order to ensure that its responsibilities can be carried out effectively. The Audit and Risk
Management Committee has a formal charter.
Details of the members of the committee, their experience, expertise, qualifications and attendance at meetings of the
committee are set out in the Director’s Report.
External Audit
The Board has delegated to the Audit and Risk Management Committee responsibility for making recommendations on the
appointment, evaluation and dismissal of external auditors, and ensuring that the auditors report to the Committee and the
Board.
It is policy for the external auditors to provide an annual declaration of independence to the Audit and Risk Management
Committee. The external auditor will attend the Annual General Meeting and be available to shareholders for questions
regarding the conduct of the audit and preparation of the content of the Audit Report.
Principles 5 and 6: Make timely and balanced disclosures and Respect
the rights of shareholders
The Chairman and Company Secretary are responsible for communications with the ASX, and ensuring compliance with
the continuous disclosure requirements in the ASX listing rules. Management are responsible for ensuring that all potential
corporate information that could materially affect the price or value of the company’s shares is brought to the attention of the
Chairman or Company Secretary immediately it becomes known. This information is then assessed in liaison with the Board
and management in regards to ASX listing rule requirements of 3.1.
The company has a shareholder communications policy which recognizes the value of providing current and relevant
information to shareholders. All information disclosed to the ASX is posted on the company’s website as soon as it is disclosed
to the ASX, and remains available to shareholders for at least two years. The current and historical share price details are also
available on the website.
All shareholders have the option to receive a hard copy of the Annual Report. The company does provide the opportunity for
shareholders to receive the Annual Report through electronic means. A copy of the Annual Report is made available from the
company’s website.
The Board has adopted a continuous disclosure and communications policy and a copy is available on the Company’s website.
XVI
Annual Report for the year ended 30 June 2011Ambertech Limited Principle 7: Recognise and manage risk
The Board, through the Audit and Risk Management Committee, is responsible for ensuring there are adequate policies in
relation to risk management, compliance and internal controls. The Board has required management to design and implement
a risk management and internal control system to manage the Company’s material business risks and to report to it on whether
those risks are being managed effectively.
In summary, the Company policies are designed to ensure strategic, operational, legal, reputation and financial risks are
identified, assessed, effectively and efficiently managed and monitored to enable achievement of business objectives. To realise
its risk management objectives, the company:
•
Identifies and assesses risks to business and understands how such risks influence performance;
• Ensures that an appropriate risk management framework is in place, that it is aligned to the company’s business
strategy and that it evolves with the business;
• Supports the framework and strategy with an appropriate organisational structure and ensures that associated
responsibilities are clearly defined and communicated at all levels;
• Ensures that risk management information is communicated through a clear and robust reporting structure; and
•
Integrates ongoing risk management activities within the business.
The Managing Director is responsible for overall risk management leadership, policy and program implementation. The Chief
Financial Officer (CFO) supports the Managing Director in discharging these responsibilities and is responsible for providing
appropriate risk management resources to guide and support all personnel in maintaining the risk management framework, as
well as coordinating regular reporting to the Audit and Compliance Committee.
The CFO also ensures that his report to the Board notifies directors of any issues or concerns and reports as to the effectiveness
of the Company’s management of its material business risks.
Management has reported to the Board as to the effectiveness of the Company’s management of its material business risks.
The Managing Director and Chief Financial Officer have also made the following certifications to the Board:
• That the Company’s financial reports are complete and present a true and fair view, in all material respects, of the financial
condition and operational results of the company and Group and are in accordance with relevant accounting standards.
• That the above statements are founded on a sound system of risk management and internal compliance and control and
which implements the policies adopted by the Board and that the company’s risk management and internal compliance and
control is operating efficiently and effectively in all material aspects.
Principle 8: Remunerate fairly and responsibly
Nomination and Remuneration Committee
The Board has established a Nomination and Remuneration Committee. The committee has a formal charter. The role of the
Nomination and Remuneration Committee is to provide recommendations to the Board on various matters including:
• appropriate remuneration policies and monitoring their implementation including with respect to executives, senior
managers and non-executive directors;
•
incentive schemes designed to enhance corporate and individual performance; and
• retention strategies for executives and senior management.
Members of the Nomination and Remuneration Committee are Peter Wallace (chairperson), and David Swift, each of whom is
a non executive director. Details of the members of the committee, their experience, expertise, qualifications and attendance at
meetings of the committee are set out in the Director’s Report.
The Nomination and Remuneration Committee meets at least once a year and at such other times as the chairman of that
committee considers necessary. The Remuneration Report, within the Directors’ Report, sets out the Company’s policies for
remunerating Directors, the Managing Director, the Chief Financial Officer and other senior executives.
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Ambertech LimitedAnnual Report for the year ended 30 June 2011 Financial Report
XVIII
Annual Report for the year ended 30 June 2011Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
The directors present their report together with the financial statements of the consolidated entity consisting of Ambertech
Limited and its controlled entites, ("company" or "economic entity") for the year ended 30 June 2011 and the auditor's report
thereon.
DIRECTORS
The qualifications, experience and special responsibilities of each person who has been a director of the Company at any time
during or since the end of the financial year are listed below, together with the details of the company secretary as at the end
of the financial year. All directors were in office since the start of the year unless otherwise stated.
Information on directors
Peter Francis Wallace
Chairman ‐ Non Executive Director
Aged 51
Member of the Audit and Risk Management Committee and Chairman of the Remuneration and Nomination Committee.
Peter Wallace is the founder and Managing Director of Endeavour Capital Pty Limited, an independent corporate advisory
firm. Prior to establishing Endeavour Capital Pty Limited in 1998, he was an Investment Director with private equity
company Hambro‐Grantham. Mr Wallace has been a non‐executive director of over 20 groups of companies. He is currently
the non‐executive chairman of ASX listed, Ideas International Limited.
Mr Wallace has a Bachelor of Commerce degree from the University of New South Wales and a Master of Business
Administration degree from Macquarie University. He is a member of the Institute of Chartered Accountants, and a fellow of
the Australian Institute of Company Directors.
Mr Wallace has been a director of Ambertech’s Group companies since February 2000 and Chairman of Ambertech Limited
since October 2002.
Peter Andrew Amos
Managing Director
Aged 54
Peter Amos graduated from Sydney Technical College (now University of Technology, Sydney) with a Radio Trade Certificate
and from North Sydney Technical College with an Electronics Engineering Certificate. He joined Rank Electronics, the
Company from which Ambertech was formed via a management buyout, as a technician in the mid 1970s, rising from Senior
Technician to Service Manager. Upon the formation of Ambertech Limited, Mr Amos became Technical Director of the
Ambertech Group. He also served in a senior role as Marketing Director of Quantum Pacific Pty Ltd, another company owned
by the Ambertech Limited, until it was sold in the mid 1990s.
Mr Amos has served as Managing Director of Ambertech Limited since 1995 and presided over the growth of the Company
since that date. Mr Amos has been a director of Ambertech’s Group companies since 1987.
Thomas Robert Amos
Non‐Executive Director
Aged 60
Tom Amos founded telecommunications consultancy Amos Aked Pty Limited in the early 1980s. His career in
telecommunications and media spans over 30 years, during which time he has been involved in all facets of the industry. An
engineer by profession, Mr Amos holds a B.E. (Electrical Engineering) degree from Sydney University.
Mr Amos has also been prominent in the telecommunication deregulation debate over a period of 15 years as a (former)
director and Vice Chairman of Australian Telecommunications Users Group Limited (“ATUG”) and as an industry
commentator. He is a director of Wave Link Systems Pty Limited and Amos Aked Swift (NZ) Limited.
Mr Amos has been a director of Ambertech’s Group companies since June 1997.
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Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
Edwin Francis Goodwin
Non‐Executive Director
Aged 63
Chairman of the Audit and Risk Management Committee
Ed Goodwin holds a BSc in economics from London University and an MBA from Sydney University. In recent years he has
been working in new venture finance, following 25 years in senior finance and business development roles primarily in the
telecommunications industry.
Mr Goodwin has been a director of Ambertech’s Group companies since June 1997.
David Rostil Swift
Non‐Executive Director
Aged 64
Member of the Remuneration and Nomination Committee.
David Swift, who holds a B.E. (Electrical Engineering) degree from the University of NSW, has extensive experience in both
the telecommunications and professional electronics industries. Mr Swift, a co‐founder of Amos Aked Swift Pty Ltd and the
founder of AAS Consulting Pty Ltd, is currently the Business Development Director of Gibson Quai ‐ AAS Pty Ltd, an
independent telecommunications management and technology consulting practice operating in the Australasian Pacific
region.
Mr Swift is also a Director and the Chairman of the Australian Telecommunications Users Group Limited (ATUG) and a
Director of Amos Aked Swift (NZ) Limited. In addition to his consulting experience he has had significant management
experience through senior positions with both Westpac Banking Corporation and Telecom Australia. Mr Swift has been a
director of Ambertech's Group companies since June 1997.
Company Secretary
The following person held the position of Company Secretary at the end of the financial year: Robert John Glasson
Robert Glasson joined Ambertech Limited in July 2002 and also holds the position of Chief Financial Officer. He has a
Bachelor of Business degree from the University of Technology, Sydney, and is a member of the Institute of Chartered
Accountants in Australia. He was appointed to the role of Company Secretary on 1 November 2004.
CORPORATE INFORMATION
Nature of operations and principal activities
The principal activities of the economic entity during the financial year were the import and distribution of high technology
equipment to the professional broadcast, film, recording and sound reinforcement industries; the import and distribution of
home theatre products to dealers; distribution and supply of custom installation components for home theatre and
commercial installations to dealers and consumers, and the distribution of projection and display products with business
and domestic applications.
There have been no significant changes in the nature of these activities since the end of the financial year.
Employees
The consolidated entity employed 109 full time employees as at 30 June 2011 (2010: 115 employees).
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Annual Report for the year ended 30 June 2011Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REVIEW AND RESULTS OF OPERATIONS
The consolidated profit of the economic entity after providing for income tax for the financial year was down by 92.2%
to $126,000 (2010: $1,606,000). Total revenues for the financial year increased by 0.8% to $66,703,000 (2010:
$66,204,000). Further information on the operations is included in the Chairman's and Managing Director's Report
section of the Annual Report, and in the ASX Appendix 4E.
FINANCIAL POSITION
Despite a disappointing profit result the directors believe the economic entity is in a strong and stable financial
position to expand and grow its current operations. The economic entity recorded positive operating cash flows of
$2,123,000 for the year ended 30 June 2011 in difficult trading conditions. Borrowings were decreased by $1,700,000
during the financial year whilst maintaining a healthy working capital ratio.
The economic entity's working capital, being current assets less current liabilities, has decreased by $197,000 to
$16,538,000 as at 30 June 2011 (2010: $16,735,000). The net assets of the economic entity have also decreased by
$75,000 to $19,982,000 as at 30 June 2011 (2010: $20,057,000). This change in net assets is largely due to the lower
earnings recorded during the financial year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
There were no significant changes in the state of affairs of the economic entity during the financial year.
SIGNIFICANT EVENTS AFTER BALANCE DATE
Apart from the above, there are no matters or circumstances that have arisen since the end of the financial year that
have significantly affected, or may significantly affect, the operations or the state of affairs of the economic entity in
future years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
The goal for the 2011/12 financial year is to return the business to positive earnings growth as a result of changes
made to the cost structure of the business during the 2010/11 financial year. We believe that we have taken the
appropriate measures to ensure the business is well placed to meet this challenge in the coming financial year.
In the short term we expect that we will continue to see uncertainty in the economic outlook both for our markets and
globally. We also anticipate that there is likely to be further consolidation or casualty of global suppliers of equipment,
and this continues to present both risks and opportunities for Ambertech.
The Board of Ambertech is confident that further development of new and existing channels to market, along with
new product initiatives scheduled for early in the new financial year will assist with growth in coming financial years.
ENVIRONMENTAL REGULATION
The company is subject to regulation by the relevant Commonwealth and State legislation. The nature of the
company's business does not give rise to any significant environmental issues.
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Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REMUNERATION REPORT (AUDITED)
The information provided below includes remuneration disclosures that are required under the Corporations Act 2001. The
disclosures have been transferred from the financial report and have been audited.
Non‐Executive Director Remuneration
Remuneration of non‐executive directors is determined by the Remuneration and Nomination Committee. In determining
payments to non‐executive directors, consideration is given to market rates for comparable companies for time,
commitment and responsibilities. The Remuneration and Nomination Committee reviews the remuneration of non‐
executive directors annually, based on market practice, duties and accountability.
Remuneration of non‐executive directors comprises fees determined having regard to industry practice and the need to
obtain appropriately qualified independent persons. Fees do not contain any non‐monetary elements.
Executive Remuneration
Managing Director and Chief Financial Officer
Remuneration of the Managing Director and the Chief Financial Officer (CFO) is determined by the Remuneration and
Nomination Committee. In this respect, consideration is given to normal commercial rates of remuneration for similar levels
of responsibility. Remuneration comprises salaries, bonuses, contributions to superannuation funds and options.
The Managing Director and CFO receive an incentive element of their salary which is based on achievement of Key
Performance Indicators (KPIs) relevant to their responsibilities. This includes a component that is based on the company's
profit targets. The total incentive amounts payable are capped at a fixed rate rather than as a percentage of total
remuneration.
KPIs are set annually by the Remuneration and Nomination Committee and based on company performance targets, and
vary according to the roles and responsibilities of the executive. At the same time, these KPIs are aligned to reflect the
common corporate goals such as growth in earnings and shareholders' wealth, and achievement of working capital targets.
Performance against the KPIs is assessed annually by the Remuneration and Nomination Committee and recommendations
for payments determined following the end of the financial year.
Other Executives
Approximately 5% of the aggregate remuneration of the senior sales executives comprises an incentive element which is
related to the KPIs of those parts of the company's operations which are relevant to the executive's responsibilities. The
senior sales executives may also receive a sales commission component, which will vary with the sales performance of those
parts of the sales business for which they are responsible.
KPIs are set annually by the Remuneration and Nomination Committee, with a degree of consultation with executives to
ensure their committment. The measures are tailored to the areas of each executive's involvement and over which they have
control. They are based on company performance targets, and at the same time, these KPIs are aligned to reflect the
common corporate goals such as growth in earnings and shareholders' wealth, and achievement of working capital targets.
Performance against the KPIs is assessed annually by the Remuneration and Nomination Committee and recommendations
for payments determined following the end of the financial year.
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Annual Report for the year ended 30 June 2011Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REMUNERATION REPORT (continued)
The table below sets out the economic entity's key shareholder indicators for the past 5 financial years:
Dividends paid (cents per share)
Closing share price at 30 June ($)
Share buy back ($'000)
Net profit after tax ($'000)
Details of remuneration
2011
0.5
$0.31
8
126
2010
5.5
$0.38
‐
2009
3.5
$0.45
44
2008
7.0
$0.65
‐
2007
5.0
$0.69
75
1,606
1,806
3,179
2,575
Details of the remuneration of the directors and the key management personnel (as defined in AASB 124 Related Party
Disclosures) of the economic entity are set out in the following tables.
The key management personnel of the economic entity includes the following:
Name
Position
Name
Position
P Wallace
Non‐Executive Chairman
R Glasson
CFO, Company Secretary
P Amos
T Amos
Managing Director
Non‐Executive Director
B Lee
R Caston
General Manager, Lifestyle Entertainment
General Manager, Broadcast & Professional
E Goodwin
Non‐Executive Director
R McCleery
Director, Amber New Zealand
D Swift
Non‐Executive Director
G Simeon
General Manager, Video & Audio Post Group
Key management personnel are those directly accountable to the Managing Director and the Board and responsible for
the operational management and strategic direction of the Company.
The nature and amount of each major element of the remuneration of each director of the economic entity and each of
the key management personnel of the parent and the economic entity for the financial year are set out in the following
tables.
5
5
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REMUNERATION REPORT (continued)
Elements of Remuneration
2011
Short‐term employment
benefits
Post
employment
benefits
Share based
payments
Directors
Cash salary Cash Bonus Superannuation
Options
Total
Performance % Relating
$
$
$
$
$
Related
to Options
%
P Amos
P Wallace
T Amos
E Goodwin
D Swift
Executives
R Glasson
B Lee
R Caston
G Simeon
R McCleery
2010
350,279
55,046
32,111
32,111
32,111
501,658
174,317
168,000
156,459
151,377
107,334
‐
‐
‐
‐
‐
‐
‐
‐
21,968
11,818
‐
29,725
4,954
2,890
2,890
2,890
43,349
15,689
15,120
15,518
14,688
‐
7,787
‐
‐
‐
387,791
60,000
35,001
35,001
35,001
7,787
552,794
838
838
838
‐
838
190,844
183,958
194,783
177,883
108,172
757,487
33,786
61,015
3,352
855,640
Short‐term employment
benefits
Post
employment
benefits
Share based
payments
2.0%
0.0%
0.0%
0.0%
0.0%
1.4%
0.4%
0.5%
0.4%
0.0%
0.8%
0.4%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11.3%
6.6%
0.0%
3.9%
%
Directors
Cash salary Cash Bonus Superannuation
Options
Total
Performance % Relating
$
Related
to Options
$
$
$
340,441
30,510
52,523
31,056
31,056
31,056
486,132
169,725
167,996
156,457
151,376
112,258
‐
‐
‐
‐
30,510
8,541
37,770
30,607
9,147
‐
$
17,864
4,296
‐
‐
‐
22,160
2,758
2,758
2,758
‐
2,758
31,743
4,727
2,795
2,795
2,795
44,855
16,044
15,738
16,296
14,897
‐
420,558
61,546
33,851
33,851
33,851
583,657
197,068
224,262
206,118
175,420
115,016
757,812
86,065
62,975
11,032
917,884
6
7.3%
0.0%
0.0%
0.0%
0.0%
5.2%
4.3%
16.8%
14.8%
5.2%
0.0%
9.4%
4.2%
7.0%
0.0%
0.0%
0.0%
3.8%
1.4%
1.2%
1.3%
0.0%
2.4%
1.2%
P Amos
P Wallace
T Amos
E Goodwin
D Swift
Executives
R Glasson
B Lee
R Caston
G Simeon
R McCleery
6
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REMUNERATION REPORT (continued)
Service agreements
An executive agreement exists between Peter Amos, the Managing Director, and Amber Technology Limited. This agreement
provides that Mr Amos, for a period of 12 months from the date of termination, will not engage in activities in competition with the
Amber Group. There is a notice period by either party of 12 months.
The agreement commenced on 31 May 1999 and continues indefinitely. In the event that the company was to exercise its right to
terminate the contract, the current payout value would be $380,004.
Share based compensation
Ambertech has adopted an Employee Share Option Plan (ESOP). The Board of Directors may determine the executives and eligible
employees who are entitled to participate in the ESOP.
The options issued under the ESOP will expire 5 years after the issue date, or earlier on any of the following events:
a
the eligible employee is dismissed with cause or has breached a restriction contained in his/her employment contract;
b
c
d
e
the eligible employee dies while in the employ of the Company;
the eligible employee is made redundant by the Company;
the eligible employee’s employment with the Company is voluntarily terminated by the eligible employee; or
the eligible employee’s employment terminates by reason of normal retirement.
The total number of shares reserved for issuance under the ESOP, together with shares reserved for issuance under any other
Option Plan, shall not exceed 5% of the diluted ordinary share capital in the Company (comprising all Shares, all Options issued
under the ESOP and under any other Option Plan, and all other convertible issued securities).
The ESOP provides the Board with the ability to determine the exercise price of the options, the periods within which the options
may be exercised, and the conditions to be satisfied before the option can be exercised.
The ESOP provides for adjustments in accordance with ASX Listing Rules if there is a capital reconstruction, a rights issue or a bonus
issue.
The number of options on issue to directors and key executives at the date of this report is outlined in the following tables. There
were no options issued during or since the end of the financial year.
Options Granted
Grant Details
Grant
Date
No
Value
$
Directors
P Amos
7/12/2004
400,000
116,913
Executives
R Glasson
B Lee
R Caston
R McCleery
7/12/2004
7/12/2004
7/12/2004
7/12/2004
50,000
50,000
50,000
50,000
18,369
18,369
18,369
18,369
For the financial year ended 30 June 2011
Exercised
$
Lapsed
No
$
No
No
Vested Vested Unvested Lapsed
Overall
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
100,000
38,670
100,000
38,670
20,000
20,000
20,000
20,000
80,000
6,282
6,282
6,282
6,282
25,128
‐
‐
‐
‐
‐
‐
‐
%
%
%
100
100
100
100
100
‐
‐
‐
‐
‐
50
90
90
90
90
When exercisable, each option is convertible into one ordinary share on a 1:1 basis.
7
7
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REMUNERATION REPORT (continued)
There have been no shares issued during or since the end of the financial year as a result of exercise of options. During the
financial year 200,000 options lapsed.
In relation to bonus issues, each outstanding option confers on the option holder the right to receive, on exercise of those
outstanding options, not only one share for each of the outstanding options exercised but also the additional shares the
option holder would have received had the option holder participated in that bonus issue as a holder of ordinary shares.
The assessed fair value at offer date is determined using a Black‐Scholes option pricing model that takes into account the
exercise price, the term of the option,the impact of dilution, the share price at offer date and expected price volatility of the
underlying share, the expected dividend yield and the risk free interest rate for the term of the option.
Interests of Directors
At the date of this report the following interests were held by directors:
Director
P Wallace
P Amos
T Amos
E Goodwin
D Swift
DIVIDENDS
Ordinary Shares
Options over
Ordinary Shares
171,897
4,313,843
5,484,625
2,883,556
2,995,826
‐
200,000
‐
‐
‐
Dividends paid or declared by the Company to members since the end of the previous financial year were:
Dividend Type
Record Date Payment Date Cents per share
Franking %
Tax rate
Declared and paid during the year ended 30 June 2011:
Interim dividend
16/03/2011
31/03/2011
0.5
100%
30%
DIRECTORS' MEETINGS
The number of directors' meetings (including meetings of committees of directors) and the number of meetings attended by
each of the directors of the Company during the financial year are:
Board Meetings
Audit and Risk Management
Committee Meetings
Nomination and Remuneration
Committee
Attended
Held
Attended
Held
Attended
Held
4
‐
‐
4
‐
2
‐
‐
‐
2
2
‐
‐
‐
2
12
12
12
11
12
12
12
12
12
12
4
‐
‐
4
‐
8
Director
P Wallace
P Amos
T Amos
E Goodwin
D Swift
8
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
NON‐AUDIT SERVICES
It is the economic entity's policy to employ PKF East Coast Practice (PKF) for assignments additional to their annual
audit duties, when PKF's expertise and experience with the economic entity are important. During the year these
assignments comprised primarily tax compliance assignments. The Board of Directors is satisfied that the auditors'
independence is not compromised as a result of providing these services because:
‐
‐
All non‐audit services have been reviewed by the audit committee to ensure they do not impact the impartiality
and objectivity of the auditor, and
None of the services undermines the general principles relating to the auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, including reviewing or auditing the auditors' own work, acting in a
management or decision making capacity for the company, acting as an advocate for the company or jointly
sharing economic risks and rewards.
During the year fees that were paid or payable for services provided by the auditor of the parent entity
and its related practices as disclosed at note 27.
The Directors are satisfied that the provision of non‐audit services during the year by the auditor's is compatible with
the general standard of independence for auditor's imposed by the Corporations Act 2001.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the company, or to intervene in any proceedings to which the company is a party, for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the company with leave of the Court under section 237
of the Corporations Act 2001.
AUDITORS' INDEPENDENCE DECLARATION
A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2001 is set out
on page 11.
9
9
Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
INDEMNIFICATION OF OFFICERS
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives
of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of liability and the amount of the premium.
ROUNDING
The company is an entity to which Class Order 98/100 applies and, in accordance with this class order, amounts in
this report and the financial statements have been rounded off to the nearest thousand dollars unless otherwise
indicated.
Signed in accordance with a resolution of directors.
Director:
P F Wallace
P A Amos
Dated this 26th day of August 2011.
Sydney
10
10
10
Annual Report for the year ended 30 June 2011Ambertech Limited Independent Auditor’s Report
To the members of Ambertech Limited
Report on the Financial Report
We have audited the accompanying financial report of Ambertech Limited, which comprises the
statements of financial position as at 30 June 2011, the statements of comprehensive income, the
statements of changes in equity and the statements of cash flows for the year then ended, notes
comprising a summary of significant accounting policies, other explanatory information, and the
directors’ declaration of Ambertech Limited (the consolidated entity). The consolidated entity
comprises Ambertech Limited and the entities it controlled at the year’s end or from time to time
during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that is free from material misstatement, whether due to fraud or error. In Note 2(a),
the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial
Statements, that the financial statements comply with International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. Those standards require that we comply
with relevant ethical requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation and fair presentation of the financial report 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 entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the directors, as
well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our audit opinion.
Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au
PKF | ABN 83 236 985 726
Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia
DX 10173 | Sydney Stock Exchange | New South Wales
The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member
of the PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF
East Coast Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
11
11
Ambertech LimitedAnnual Report for the year ended 30 June 2011
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Opinion
In our opinion:
(a)
the financial report of Ambertech Limited is in accordance with the Corporations Act 2001,
including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30 June
2011 and of their performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b)
the consolidated parent financial statements and notes also comply with International Financial
Reporting Standards as disclosed in Note 2(a).
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 4 to 8 of the directors’ report for the
year ended 30 June 2011. 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.
Opinion
In our opinion, the Remuneration Report of Ambertech Limited for the year ended 30 June 2011,
complies with section 300A of the Corporations Act 2001.
PKF
Arthur Milner
Partner
Sydney
26 August 2011
12
12
Annual Report for the year ended 30 June 2011Ambertech Limited Lead auditor’s independence declaration under Section 307C of the Corporations Act 2001
To the Directors of Ambertech Limited and the entities it controlled during the year.
I declare to the best of my knowledge and belief, in relation to the audit for the financial year ended 30
June 2011 there have been:
no contraventions of the auditor independence requirements as set out in the Corporations Act
2001 in relation to the audit, and
no contraventions of any applicable code of professional conduct in relation to the audit.
•
•
PKF
Arthur Milner
Partner
Sydney
26 August 2011
Tel: 61 2 9251 4100 | Fax: 61 2 9240 9821 | www.pkf.com.au
PKF | ABN 83 236 985 726
Level 10, 1 Margaret Street | Sydney | New South Wales 2000 | Australia
The PKF East Coast Practice is a member of the PKF International Limited network of legally independent member firms. The PKF East Coast Practice is also a member of the
PKF Australia Limited national network of legally independent firms each trading as PKF. PKF East Coast Practice has offices in NSW, Victoria and Brisbane. PKF East Coast
Practice does not accept responsibility or liability for the actions or inactions on the part of any other individual member firm or firms.
Liability limited by a scheme approved under Professional Standards Legislation.
13
13
Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011
Revenue
Cost of sales
Gross profit
Other income
Employee benefits expense
Distribution costs
Marketing costs
Premises costs
Depreciation and amortisation expenses
Finance costs
Travel costs
Other expenses
Profit before income tax expense
Income tax benefit / (expense)
Profit for the year
Other comprehensive income
Exchange differences on translation of foreign operations
Total comprehensive income for the year
Earnings per share
Basic earnings per share
Diluted earnings per share
Economic Entity
Note
2011
$'000
2010
$'000
3
4
3
4
4
4
5
25
25
66,703
(47,541)
19,162
‐
66,204
(45,024)
21,180
803
(11,206)
(11,438)
(1,483)
(1,551)
(2,162)
(272)
(461)
(648)
(1,221)
158
(32)
126
(52)
74
0.4
0.4
(1,656)
(2,139)
(1,868)
(279)
(390)
(678)
(1,252)
2,283
(677)
1,606
7
1,613
5.2
5.2
The consolidated statement of comprehensive income is to be read in conjunction with the attached notes.
14
14
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Current tax assets
Inventories
TOTAL CURRENT ASSETS
NON‐CURRENT ASSETS
Plant and equipment
Intangible assets
Deferred tax assets
TOTAL NON‐CURRENT ASSETS
TOTAL ASSETS
LIABILITIES
CURRENT LIABILITIES
Trade and other payables
Other financial liabilities
Provisions
TOTAL CURRENT LIABILITIES
NON‐CURRENT LIABILITIES
Provisions
Deferred tax liabilities
TOTAL NON‐CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Retained earnings
TOTAL EQUITY
Economic Entity
Note
2011
$'000
2010
$'000
23
6
7
8
10
11
5
12
13
14
14
5
15
16
3,134
13,128
326
13,571
30,159
380
3,054
866
4,300
34,459
9,493
3,000
1,128
13,621
804
52
856
14,477
19,982
3,090
8,149
366
16,089
27,694
531
2,970
778
4,279
31,973
5,292
4,700
967
10,959
811
146
957
11,916
20,057
11,138
(116)
8,960
19,982
11,146
(6)
8,917
20,057
The consolidated statement of financial position is to be read in conjuntion with the attached notes.
15
15
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011
Share Capital
$'000
Option
Reserve
$'000
Foreign
Currency
Translation
Reserve
$'000
Economic Entity
Balance as at 30 June 2009
11,146
Total comprehensive income for the year
Transactions with equity holders:
Costs of share based payments
Dividends
‐
‐
‐
‐
Balance as at 30 June 2010
11,146
Total comprehensive income for the year
Transactions with equity holders:
Shares bought back during the year
Costs of share based payments
Dividends
‐
‐
‐
(8)
(8)
Balance as at 30 June 2011
11,138
271
‐
(185)
‐
(185)
86
‐
(58)
‐
(58)
28
Retained
Earnings
$'000
Total Equity
$'000
8,994
20,312
1,606
1,613
‐
(1,683)
(1,683)
8,917
126
‐
70
(153)
(83)
(185)
(1,683)
(1,868)
20,057
74
(8)
12
(153)
(149)
(99)
7
‐
‐
‐
(92)
(52)
‐
‐
‐
‐
(144)
8,960
19,982
The consolidated statement of changes in equity is to be read in conjunction with the attached notes.
16
16
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2011
Economic Entity
Note
2011
$'000
2010
$'000
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest and other costs of finance paid
Income taxes paid
Income taxes refunded
Goods and services tax remitted
67,397
(59,834)
20
(461)
(538)
361
(4,822)
Net cash provided by operating activities
23
2,123
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for plant and equipment
Payments for intangible assets ‐ website
Net cash (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid to shareholders
Proceeds from borrowings
Payments for shares bought back
Repayment of borrowings
Net cash (used in) financing activities
Net increase in cash and cash equivalents held
Cash and cash equivalents at beginning of year
Effect of exchange rate changes on the balance of cash and cash equivalents held
in foreign currencies at the beginning of the financial year
Cash and cash equivalents at end of year
23
The consolidated statement of cash flows is to be read in conjunction with the attached notes.
(82)
(125)
(207)
(153)
‐
(8)
(1,700)
(1,861)
55
3,090
(11)
3,134
75,089
(67,530)
16
(390)
(1,236)
257
(4,496)
1,710
(230)
‐
(230)
(1,683)
500
‐
‐
(1,183)
297
2,793
‐
3,090
17
17
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: INTRODUCTION
The financial statements cover the consolidated entity consisting of Ambertech Limited and its controlled entities.
Ambertech Limited is a company limited by shares, incorporated and domiciled in Australia.
Operations and principal activities
Ambertech is a distributor of high technology equipment to the professional broadcast, film, recording and sound
reinforcement industries and of consumer audio and video products in Australia and New Zealand.
Currency
The financial statements are presented in Australian dollars and rounded to the nearest one thousand dollars.
Registered office
Unit B, 5 Skyline Place, Frenchs Forest NSW 2086.
Authorisation of financial statements
The financial statements were authorised for issue on 26 August 2011 by the Directors. The company has the
power to amend the financial statements.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Overall Policy
The principal accounting policies adopted in the preparation of these consolidated financial statements are
stated in order to assist in a general understanding of the financial statements. The financial statement is a
general purpose financial statement prepared in accordance with Australian Accounting Standards and the
Corporations Act 2001.
Statement of Compliance
The financial statements comply with Australian Accounting Standards which include Australian equivalents to
International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial
statements and notes of the economic entity comply with International Financial Reporting Standards (IFRS).
Accounting Standards not Previously Applied
The economic entity has adopted the following new and revised Australian Accounting Standards issued by the
AASB which are mandatory to apply to the current period. Disclosures required by these Standards that are
deemed material have been included in these financial statements on the basis that they represent a
significant change in information from that previously made available.
(i)
AASB 2009‐8 Amendments to Australian Accounting Standards ‐ Group Cash‐settled Share‐based
Payment Transactions [AASB 2] (effective from 1 January 2010)
The amendments clarified the scope of AASB 2 by requiring an entity that receives goods or services in a
share‐based payment arrangement to account for those goods or services no matter which entity in the
group settles the transaction, and no matter whether the transaction is settled in shares or cash.
(ii)
AASB 2009‐10 Amendments to Australian Accounting Standards ‐ Classification of Rights Issues [AASB
132] (effective from 1 February 2010)
The amendments clarified that rights, options or warrants to acquire a fixed number of an entity's own
equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights,
options or warrants pro rata to all existing owners of the same class of its own non‐derivative equity
instruments.
(iii)
AASB2009‐20 Amendments to Australian Accounting Standards arising from Interpretation 19:
Extinguishing Financial Liabilities with Equity Instruments [AASB 1] (effective from 1 July 2010)
The amendments require the extinguishment of a financial liability by the issue of equity instruments to be
measured at fair value (preferably using the fair value of the equity instrument issued) with the difference
between fair value of the instrument and the carrying value of the liability extinguished being recognised
in profit or loss. The Interpretation does not apply where the conversion terms were included in the
original contract (such as in the case of a convertible debt) or to common control transactions.
18
18
Annual Report for the year ended 30 June 2011Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Overall Policy (continued)
(iv)
AASB 2010‐3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project
[AASB 3, AASB 7, AASB 121, AASB 128, AASB 201, AASB 202 & AASB 209] (effective from 1 July 2010)
The subjects of the principal amendments to the Standards are set out below:
AASB 3 Business Combinations
‐
‐
‐
Measurement of non‐controlling interests;
Unreplaced and voluntarily replaced share‐based payment awards;
Transition requirements for contingent consideration from a business combination that occurred before
the effective date of the revised AASB 3 (2008).
(v)
AASB 2009‐12 Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 1023
& 1031 and Interpretations 2, 4, 16, 1039 & 1052] (effective from 1 January 2011)
The amendment to AASB 8 requires an entity to exercise judgement in assessing whether a government and
entities known to be under the control of that government are considered a single customer for the purposes of
certain operating segment disclosures.
This Standard also makes numerous editorial amendments to a range of Australian Accounting Standards and
Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB.
(vi)
AASB 124 Related Party Disclosure (effective from 1 January 2011)
Simplifies the definition of a related party, clarifying its intended meaning & eliminating inconsistencies from
the definition of a related party.
New Accounting Standards issued but not yet effective
The following standards, amendments to standards and interpretations have been identified as those which may
impact the economic entity in the period of initial application. They are available for early adoption at 30 June 2011,
but have not been applied in preparing these financial statements.
(i)
AASB 9 Financial Instruments (effective from 1 January 2013)
(ii)
AASB 10 Consolidation (effective from 1 January 2013)
(a)
power over the investee;
(b)
exposure, or rights, to variable returns from its involvement with the investee; and
(c)
the ability to use its power over the investee to affect the amount of the investor’s returns.
(iii)
AASB 12 Disclosure of Interestes in Other Entities (effective from 1 January 2013)
AASB 12 provides the disclosure requirements for entities that have an interest in a subsidiary, a joint
arrangement, an associate or an unconsolidated structured entity. As such, it pulls together and replaces
disclosure requirements from many existing standards.
(iv)
AASB 13 Fair Value Measurement (effective from 1 January 2013)
AASB 13:
(a) defines fair value;
(b)
sets out in a single IFRS a framework for measuring fair value; and
(c)
requires disclosures about fair value measurements.
(v)
AASB 2010‐4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements
Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] (effective from 1 January 2011)
19
19
Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(a) Overall Policy (continued)
(vi)
AASB 2010‐5 Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121,
132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] (effective from 1 January
2011)
(vii)
AASB 2010‐6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets
[AASB 1 & AASB 7] (effective from 1 July 2011)
(viii)
AASB 2010‐7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1,
3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5,
10, 12, 19 & 127] (effective from 1 January 2013)
(ix)
(x)
(xi)
AASB 2011‐1 Amendments to Australian Accounting Standards arising from the Trans‐Tasman Convergence
Project [AASB 1, AASB 5, AASB 101, AASB 107, AASB 108, AASB 121, AASB 128, AASB 132 & AASB 134 and
Interpretations 2, 112 & 113] (effective from 1 July 2011)
AASB 2011‐2 Amendments to Australian Accounting Standards arising from the Trans‐Tasman Convergence
Project – Reduced Disclosure Requirements [AASB 101 & AASB 1054] (effective from 1 July 2013)
AASB 2011‐4 Amendments to Australian Accounting Standards to Remove Individual Key Management
Personnel Disclosure Requirements [AASB 124] (effective from 1 July 2013)
(b) Significant Judgements and Key Assumptions
Judgements made in applying accounting policies that have the most significant effect on the amounts recognised in
the financial statements concern impairment of goodwill. The economic entity tests annually whether goodwill has
suffered any impairment, in accordance with the accounting policy stated in note 2(k). These calculations require the
use of assumptions, and these are described further in note 11.
(c) Consolidation Policy
A controlled entity is any entity controlled by Ambertech Limited. Control exists where Ambertech Limited has the
capacity to dominate the decision‐making in relation to the financial and operating policies of another entity so that
the other entity operates with Ambertech Limited to achieve the objectives of Ambertech Limited. Details of the
controlled entities are contained at note 9.
All inter‐company balances and transactions between entities in the economic entity, including any unrealised profits
or losses, have been eliminated on consolidation.
(d) Revenue Recognition
Sales revenue comprises revenue earned (net of returns, discounts and allowances) from the provision of goods and
services to entities outside the economic entity.
Sale of goods
Revenue from the sale of goods is recognised when all significant risks and rewards of ownership have been
transferred to the buyer. In most cases this coincides with the transfer of legal title, or the passing of possession to
the buyer.
Rendering of services
Revenue from the rendering of a service is recognised upon the delivery of the service to the customers.
Interest revenue
Interest revenue is recognised as it accrues using the effective interest method.
Dividend revenue
Dividends are recognised as income as they are received, net of any franking credits.
20
20
Annual Report for the year ended 30 June 2011Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(e) Cash and Cash Equivalents
For the purposes of the statement of cash flows, cash and cash equivalents includes cash on hand, deposits at call
with banks or financial institutions, investments in money market instruments maturing within less than three
months, and bank overdrafts.
(f) Receivables
Trade and other receivables are recognised initially at fair value and subsequently measured at amortised cost using
the effective interest method, less provision for impairment. Trade receivables are generally due for settlement
between 30 and 60 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off by reducing the carrying amount directly. A provision for impairment of trade receivables is raised when
there is objective evidence that the economic entity will not be able to collect all amounts due according to the
original terms of the receivables.
(g)
Inventory
Inventories are measured at the lower of weighted average cost and net realisable value. Costs are assigned on a
first‐in first‐out basis and include direct materials, direct labour and an appropriate proportion of variable and fixed
overhead expenses.
(h) Plant and Equipment
Plant and equipment is stated at historical cost less depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Plant and equipment is depreciated over estimated useful life taking into account estimated residual values. The
straight line method is used.
Plant and equipment is depreciated from the date of acquisition or, in respect of leasehold improvements, from the
time the asset is completed and ready for use. The depreciation rates used for each class of plant and equipment
remain unchanged from the previous year and are as follows:
Class of Asset
Plant and equipment
Furniture and fittings
Leasehold improvements
Leased plant and equipment
Useful life
3‐8 years
3‐8 years
Term of the lease
Term of the lease
The carrying values of plant and equipment are reviewed for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable. If any such indication exists and where the carrying values
exceed the estimated recoverable amount, the plant and equipment or cash generating units to which the plant and
equipment belong are written down to their recoverable amount.
21
21
Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i)
Investments in Subsidiaries
In the separate financial statements of the parent, investments in subsidiaries that are not classified as held for sale
or included in a disposal group classified as held for sale, are accounted for at cost.
(j) Intangible Assets
Goodwill
All business combinations are accounted for by applying the purchase method. Goodwill represents the difference
between the cost of the acquisition and the fair value of the net identifiable assets acquired.
Goodwill is stated at cost less any accumulated impairment. Goodwill is allocated to cash generating units and is
not subject to amortisation, but tested annually for impairment (refer to note 2(k)).
Where the recoverable amount of the cash generating unit is less than the carrying amount, an impairment loss is
recognised.
Website Costs
Significant costs associated with website costs are deferred and amortised on a straight‐line basis over the period
of their expected benefit, being a finite life of 3 years.
(k) Impairment of Assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or changes in circumstances indicate that they might be
impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the
carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less
costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for
which there are separately identifiable cash inflows which are largely independent of the cash inflows from other
assets or groups of assets (cash‐generating units).
If there is evidence of impairment for any of the company’s financial assets carried at amortised cost, the loss is
measured as the difference between the asset’s carrying amount and the present value of estimated future cash
flows, excluding future credit losses that have not been incurred. The cash flows are discounted at the economic
entity's weighted average cost of capital. The loss is recognised in the statement of comprehensive income.
(l) Trade and Other Payables
These amounts represent liabilities for goods and services provided to the economic entity prior to the end of
financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.
22
22
Annual Report for the year ended 30 June 2011Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m) Borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
amount is recognised in the statement of comprehensive income over the period of the borrowings 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. In this case, the fee is
deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the
facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the
period of the facility to which it relates.
(n) Service Warranties
Provision is made for the estimated liability on all products still under warranty at balance date.
(o) Leases
(i) Operating leases
Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are
recognised as a liability and amortised on a straight –line basis over the life of the lease term.
(p)
Share Based Payments
Options issued over ordinary shares are valued using a pricing model which takes into account the option exercise
price, the current level and volatility of the underlying share price, the risk free interest rate, the expected
dividends on the underlying share, the current market price of the underlying share and the expected life of the
option.
Information relating to these schemes is set out in note 21.
The value of the options is recognised in an option reserve until the options are exercised, forfeited or expire.
(q) Employee Benefits
Short term employee benefits are employee benefits (other than termination benefits and equity compensation
benefits) which fall due wholly within 12 months after the end of the period in which employee services are
rendered. They comprise wages, salaries, commissions, social security obligations, short‐term compensation
absences and bonuses payable within 12 months and non‐mandatory benefits such as car allowances.
The undiscounted amount of short‐term employee benefits expected to be paid is recognised as an expense.
Other long‐term employee benefits include long‐service leave payable 12 months or more after the end of the
financial year.
23
23
Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r)
Income Tax
The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts. However, the deferred income tax is not accounted for if
it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the
time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined
using tax rates (and laws) that have been enacted or substantially enacted by the reporting date and are expected
to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses.
Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and
tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of
the temporary differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and
liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends
either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity.
Tax consolidation legislation
Ambertech Limited and its Australian wholly owned controlled entities have implemented the tax consolidation
legislation.
The head entity, Ambertech Limited, and the controlled entities in the tax consolidated group continue to account
for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax
consolidated group continues to be a ‘stand‐alone taxpayer’ in its own right.
Current tax liabilities (assets) and deferred tax assets arising from unused tax losses and tax credits are
immediately transferred to the head entity. The tax consolidated group has entered a tax sharing agreement
whereby each company in the group contributes to the income tax payable by the group in proportion to their
contribution 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 will be recognised as either a
contribution by, or distribution to the head entity.
24
24
Annual Report for the year ended 30 June 2011Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(s)
Foreign Currency Translation
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on
consolidation, are translated to Australian dollars at exchange rates ruling at the balance sheet date. The revenues
and expenses of foreign operations are translated to Australian dollars at rates approximating to the exchange rates
ruling at the dates of the transactions.
Foreign exchange differences arising on retranslation are recognised directly in a separate component of equity.
(t)
Earnings Per Share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the 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.
(u) Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from the proceeds.
(v) Dividends
Provision is made 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 year but not distributed at balance date.
(w) Borrowing Costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a
substantial period of time to prepare for their intended use or sale, are added to the cost of those assets, until such
time as the assets are substantially ready for their intended use or sale. Other borrowing costs are expensed.
(x) Goods and Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, unless the GST incurred is not recoverable
from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the
expense. Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flows.
25
25
Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 3: REVENUE
Revenue
‐ Sale of goods and services
‐ Interest received
Other income
‐ Net foreign exchange gains
NOTE 4: ITEMS INCLUDED IN PROFIT
Additional information on the nature of expenses
Inventories
Cost of sales
Movement in provision for inventory obsolescence
Employee benefits expense
Salaries and wages
Employee termination expense
Depreciation
Plant and equipment
Furniture and fittings
Leasehold improvements
Amortisation
Website costs
Bad and doubtful debts
Economic Entity
2011
$'000
2010
$'000
66,683
20
66,703
‐
‐
47,541
18
10,704
502
11,206
139
26
66
231
41
163
66,188
16
66,204
803
803
45,024
147
11,235
203
11,438
141
29
109
279
‐
25
Rental expense on operating leases:
Minimum lease payments
Net foreign exchange losses
Net loss on disposal of plant and equipment
Net fair value gain on derivative financial instruments ‐ forward
exchange contracts
1,315
1,166
57
1
45
‐
3
334
26
26
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5: INCOME TAX
Major components of income tax expense
Current income tax
Under provision in prior years
Deferred tax
Income tax expense
Reconciliation between income tax expense and prima facie tax on accounting
profit
Profit before income tax expense
Tax at 30% (2010:30%)
Tax effect of non deductible expenses
‐ Entertainment
‐ Other items
Under provision for income tax in prior years
Income tax expense
Applicable tax rate
The applicable tax rate is the national tax rate in Australia.
Analysis of deferred tax assets
Employee benefits
Plant and equipment
Intangible assets
Accrued expenses
Allowance for doubtful accounts
Provision for obsolesence
Inventory
Other
Analysis of deferred tax liabilities
Unrealised foreign currency exchange gain
Other
Economic Entity
2011
$'000
2010
$'000
213
1
(182)
32
158
47
13
(29)
1
32
443
148
5
119
7
73
14
57
866
50
2
52
611
10
56
677
2,283
685
17
(35)
10
677
446
155
‐
55
36
68
18
‐
778
144
2
146
Tax consolidated group
Ambertech Limited is head entity in a tax consolidated group. The tax consolidated legislation has been applied in respect
of the year ended 30 June 2011.
Ambertech Limited has entered into a tax sharing agreement with Amber Technology Limited and Alphan Pty Limited. The
tax sharing agreement allows for an allocation of income tax expense to members of the group on the basis of taxable
income.
27
27
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6: TRADE AND OTHER RECEIVABLES
Current
Trade accounts receivable (a)
Provision for impairment of receivables (b)
Other receivables (a)
Derivative financial instruments ‐ forward exchange contracts
Prepayments
(a) Current trade and other receivables are non‐interest bearing loans,
generally between 30 and 60 day terms. A provision for impairment is
recognised when there is objective evidence that a trade or other
receivable is impaired. These amounts have been included in the other
expenses item.
(b) Movement in the provision for impairment of receivables is as follows:
Current trade receivables
Opening balance
Charge for the year
Amounts written off
Closing balance
Economic Entity
2011
$'000
2010
$'000
12,704
(26)
12,678
228
45
177
13,128
7,498
(121)
7,377
200
334
238
8,149
121
68
(163)
26
86
60
(25)
121
(c) The economic entity's exposure to credit risk and impairment losses
related to trade and other receivables is disclosed at note 24.
NOTE 7: CURRENT TAX ASSETS
The current tax asset in the economic entity of $326,000 (2010: $366,000) represents the amount of income tax
recoverable in respect of current and prior years that arise from the payment of tax in excess of amounts due to the
relevant tax authority.
28
28
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8: INVENTORIES
Current
Finished goods
Stock in transit
Provision for obsolescence
NOTE 9: CONTROLLED ENTITIES
Entity
Parent Entity
‐ Ambertech Limited
Subsidiaries of Ambertech Limited
‐ Amber Technology Limited
Subsidiaries of Amber Technology Limited
‐ Alphan Pty Limited
‐ Amber Technology (NZ) Limited
Economic Entity
2011
$'000
2010
$'000
12,952
861
13,813
(242)
13,571
15,284
1,030
16,314
(225)
16,089
Country of
Incorporation
Percentage Owned
2011
2010
Australia
Australia
100%
100%
Australia
New Zealand
100%
100%
100%
100%
29
29
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10: PLANT AND EQUIPMENT
Non‐Current
Gross Carrying Amount
2011
$'000
2010
$'000
Accumulated
depreciation
2011
$'000
2010
$'000
Net carrying amount
2011
2010
$'000
$'000
Economic Entity
Plant and equipment
Furniture and fittings
Leasehold improvements
Leased plant and equipment
1,743
1,760
(1,451)
(1,392)
392
768
10
387
756
10
(320)
(752)
(10)
(294)
(686)
(10)
Total plant and equipment
2,913
2,913
(2,533)
(2,382)
292
72
16
‐
380
Reconciliation of carrying amounts:
2011
Economic Entity
Balance at the beginning of the year
Additions
Disposals
Depreciation and amortisation expense
Carrying amount at the end of the year
2010
Economic Entity
Balance at the beginning of the year
Additions
Disposals
Depreciation and amortisation expense
Carrying amount at the end of the year
Plant and
equipment
$'000
Furniture
and fittings
$'000
Leasehold
improveme
nts
$'000
Leased
plant and
equipment
$'000
368
65
(2)
(139)
292
93
5
‐
(26)
72
70
12
‐
(66)
16
‐
‐
‐
‐
‐
Plant and
equipment
$'000
Furniture
and fittings
$'000
Leasehold
improveme
nts
$'000
Leased
plant and
equipment
$'000
306
205
(2)
(141)
368
109
13
‐
(29)
93
168
12
(1)
(109)
70
‐
‐
‐
‐
‐
368
93
70
‐
531
Total
$'000
531
82
(2)
(231)
380
Total
$'000
583
230
(3)
(279)
531
30
30
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11: INTANGIBLE ASSETS
Non‐Current
Goodwill at cost
Website
(a) Goodwill
(i)
Impairment tests for goodwill
Economic Entity
2011
2010
$'000
$'000
2,970
84
3,054
2,970
‐
2,970
Goodwill is allocated to the economic entity's Cash Generating Units (CGUs) defined according to
business segment and country of operation.
A segment level summary of the goodwill allocation is presented below:
2011
Lifestyle Entertainment
Professional
New Zealand
2010
Lifestyle Entertainment
Professional
New Zealand
Australia New Zealand
$'000
$'000
Total
$'000
1,963
963
‐
2,926
1,963
963
‐
2,926
‐
‐
‐
‐
44
44
44
44
1,963
963
44
2,970
1,963
963
44
2,970
(ii) Key assumptions for value in use calculations
The recoverable amount of each CGU is determined based on value in use calculations. Value in use is
calculated based on the present value of cash flow projections over a 5 year period plus a terminal value based
on a detailed financial budget approved by management and the board of directors. The cash flows are
discounted using the post tax weighted average cost of capital at the beginning of the budget period.
The following assumptions were used in the value in use calculations:
CGU
Sales Growth Rate
2011
2010
Average Growth Rate
2011
2010
Discount Rate
2011
2010
Lifestyle Entertainment
Professional
New Zealand
3.00%
3.00%
3.00%
7.40%
1.00%
3.90%
16.00%
3.90%
‐0.50%
4.60%
1.00%
11.00%
11.30%
11.30%
11.30%
12.10%
12.10%
12.10%
The average growth rates applied in the cash flow projections represent management's best estimate of likely
economic conditions for the forecast period.
Impact of possible changes in key assumptions
(iii)
In determining the value in use of a CGU, management applied sensitivity analysis to the discount rate to
ensure that the recoverable amount of the CGU's exceeds its carrying amount. Discount rates between 10.46%
and 12.10% (2010: 11.12% and 12.99%) were used for this purpose.
Management does not consider a change in any of the key assumptions, that would cause a CGUs carrying
amount to exceed the recoverable amount, to be reasonably likely.
31
31
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11: INTANGIBLE ASSETS (continued)
Non‐Current
(b) Website ‐ at cost
Less accumulated amortisation
Reconciliation of written down values:
Opening balance at 1 July 2010
Additions
Amortisation expense
Closing balance at 30 June 2011
NOTE 12: TRADE AND OTHER PAYABLES
Current
Trade accounts payable
Other accounts payable
Amounts payable in foreign currencies:
Website
$'000
‐
125
(41)
84
Trade accounts payable:
‐ US Dollars
‐
‐
‐
‐ New Zealand Dollars
‐
British Pound
Euro
Swiss Francs
Japanese Yen
NOTE 13: OTHER FINANCIAL LIABILITIES
Current
Bills payable (a)
Economic Entity
2011
$'000
2010
$'000
125
(41)
84
‐
‐
‐
7,320
2,173
9,493
1,398
375
79
185
140
56
2,233
3,000
3,000
3,035
2,257
5,292
1,427
391
38
142
342
‐
2,340
4,700
4,700
Details of the economic entity's exposure to interest rate changes on other financial liabilities are outlined in note 24.
The fair value of the financial liabilities approximates their carrying value.
(a) Bills payable
Bills payable are a part of a multi‐option borrowing facility that includes flexible overdraft and commercial bill
components. The economic entity breached its covenants in relation to the facility during the year, and as a result
the facility was subject to review by the lenders when it expired on 15 July 2011. A new facility has been
successfully negotiated and a letter of offer dated 12 August 2011 signed on behalf of the Board. The new facility
has an expiry date of 31 July 2012.
The facility is secured by a charge over the assets of Amber Technology Limited. Guarantees are in place to a limit
of $6,500,000 (2010:$6,500,000). The value of assets at balance date is $32,952,000 (2010: $29,780,000).
32
32
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 14: PROVISIONS
Current
Service warranty
Make good provision
Employee benefits
Non Current
Make good provision
Employee benefits
Economic Entity
2011
$'000
2010
$'000
244
210
674
1,128
‐
804
804
228
‐
739
967
60
751
811
(a) Service warranty
Provision is made for the estimated warranty claims in respect of products sold which are still under warranty at
balance date. These claims are expected to be settled in the next financial year. Management estimates the provision
based on historical warranty claim information and any recent trends that may suggest future claims could differ from
historical amounts.
(b) Make good provision
The company is required to restore the leased premises at Frenchs Forest to their original condition at the time of
leaving the premises. A provision has been recognised for the present value of the estimated expenditure required to
remove any leasehold improvements.
(c) Movements in provisions
Movements in provisions, other than employee benefits are set out below:
Opening balance at 1 July 2010
Additional provision recognised
Reductions resulting from payments
Closing balance at 30 June 2011
NOTE 15: SHARE CAPITAL
Service
warranty
$'000
Make good
provision
$'000
Total
$'000
228
264
(248)
244
60
150
‐
210
288
414
(248)
454
Economic Entity
Economic Entity
2011
Shares
2010
Shares
2011
$'000
2010
$'000
Ordinary Shares fully paid (no par value)
30,573,181
30,598,181
11,138
11,146
Details
No of shares
Issued price
$'000
Balance 30 June 2010
Shares bought back 18 March 2011
Balance 30 June 2011
30,598,181
(25,000)
30,573,181
$0.335
11,146
(8)
11,138
Share Buy Back
On 2 September 2005, the company announced an on‐market buy back of up to 1,543,150 ordinary shares on issue.
The buy back is a part of the company's capital management and is designed to improve shareholder returns. During
the year ended 30 June 2011 the company bought back 25,000 (2010: Nil) shares.
33
33
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 16: RESERVES
Foreign currency translation reserve (a)
Share based payments reserve (b)
Economic Entity
2011
$'000
2010
$'000
(144)
28
(116)
(92)
86
(6)
For an explanation of movements in reserve accounts refer to Statement of Changes in Equity.
Nature and purpose of reserves
(a) Foreign currency translation reserve
Exchange differences arising on translation of the foreign controlled entity are taken to the foreign currency
translation reserve as described in note 2(s). The reserve is recognised in profit and loss when the net investment is
disposed of.
(b) Share based payments reserve
The share based payments reserve is used to recognise the fair value of options issued but not exercised.
NOTE 17: CAPITAL & LEASING COMMITMENTS
(a) Operating lease commitments
Payable:
Not later than 1 year
Later than 1 year but not later than 5 years
Minimum lease payments
Economic Entity
2011
$'000
2010
$'000
986
342
1,328
1,407
1,274
2,681
The Frenchs Forest property lease is a non‐cancellable lease ending on 31 March 2012, with rent payable monthly in
advance. Contingent rental provisions within the lease agreement require that the minimum lease payments shall be
increased at review dates by 3.5%, 5% and 5% per annum.
On 7 June 2010, the Board announced that it had signed a deed of agreement for a 10 year lease of new premises at the
completion of the lease at Frenchs Forest. Amounts relating to this lease have not been included in the operating lease
commitments above because at the date of signing the financial report, the development schedule does not allow the
Board to accurately determine the commencement date for this lease.
Economic Entity
2011
$'000
2010
$'000
‐
25
(b) Capital expenditure commitments
Capital expenditure commitments contracted for:
Website developments
Payable:
Not later than 1 year
34
34
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 18: CONTINGENT LIABILITIES
Estimates of the maximum amounts of contingent liabilities
that may become payable:
‐
Bank guarantees by Amber Technology Limited in
respect of various property leases
Economic Entity
2011
$'000
2010
$'000
540
540
336
336
No material losses are anticipated in respect of any of the above contingent liabilities.
NOTE 19: EVENTS SUBSEQUENT TO REPORTING DATE
Since the end of the financial year, no matters have arisen which significantly affected or may significantly affect
the operations of the economic entity, the results of those operations or the state of affairs of the economic entity
in future financial years.
NOTE 20: RELATED PARTY TRANSACTIONS
Key management personnel compensation
Key management personnel comprises directors and other persons having authority and responsibility for
planning, directing and controlling the activities of the economic entity.
Summary
‐ Short term employee benefits
‐ Post employment benefits
‐ Share based payments
Economic Entity
2011
$
2010
$
1,292,931
1,360,519
104,364
11,139
107,830
33,192
1,408,434
1,501,541
Transactions with related parties
The following transactions occurred with related parties:
‐ Payment for services from associate
60,000
60,000
The company has taken advantage of the relief provided by Corporations Regulation 2M.6.04 and information
required to be disclosed by AASB 124 paragraphs Aus25.4 to Aus 25.7.2 in respect of the remuneration of key
management personnel is presented in the Directors' Report.
35
35
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 21: SHARE BASED PAYMENT ARRANGEMENTS
The Board may determine the executives and eligible employees who are entitled to participate. The options expire 5
years after vesting or earlier in the event of dismissal, death, termination, redundancy or retirement of the employee.
During the financial year, 200,000 options lapsed (2010: 325,000) and no options were forfeited (2010: Nil). There were no
options exercised during the financial year.
The fair value of the options as at the date issued was determined with reference to the market price.
In relation to bonus issues, each outstanding option confers on the option holder the right to receive, on exercise of those
outstanding options, not only one share for each of the outstanding options exercised but also the additional shares the
option holder would have received had the option holder participated in the bonus issue as a holder of ordinary shares.
Employee Share Option Plan
Held by employees at the beginnining of the year
Held by employees at the end of the year
Exercisable at the end of the year
Set out below are summaries of options granted under the plan:
Number of Options over
Ordinary Shares
2011
2010
425,000
750,000
225,000
225,000
425,000
425,000
Date
Granted
Exercise Period
Start
Finish
Exercise
Price
2011
7/12/2004
7/12/2004
7/12/2004
7/12/2004
7/12/2004
7/12/2004
30/09/2005
31/12/2005
31/03/2006
30/06/2006
30/09/2006
30/09/2007
30/09/2010
31/12/2010
31/03/2011
30/06/2011
30/09/2011
30/09/2012
Weighted average exercise price
2010
7/12/2004
7/12/2004
7/12/2004
7/12/2004
7/12/2004
7/12/2004
7/12/2004
7/12/2004
7/12/2004
7/12/2004
7/12/2004
31/12/2004
31/03/2005
30/06/2005
30/09/2005
31/12/2005
31/03/2006
30/06/2006
30/09/2006
30/09/2007
7/12/2009
31/12/2009
31/03/2010
30/06/2010
30/09/2010
31/12/2010
31/03/2011
30/06/2011
30/09/2011
30/09/2012
$1.20
$1.20
$1.20
$1.20
$1.35
$1.35
$1.20
$1.20
$1.20
$1.20
$1.20
$1.20
$1.20
$1.20
$1.35
$1.35
Balance at
start of
year
Lapsed/
Forfeited
during
year
Balance at
end of
year
Exercisable
at end
of year
125,000
25,000
25,000
25,000
125,000
100,000
425,000
$1.28
250,000
25,000
25,000
25,000
125,000
25,000
25,000
25,000
125,000
100,000
750,000
(125,000)
(25,000)
(25,000)
(25,000)
‐
‐
(200,000)
$1.20
(250,000)
(25,000)
(25,000)
(25,000)
‐
‐
‐
‐
‐
‐
(325,000)
‐
‐
‐
‐
125,000
100,000
225,000
$1.35
‐
‐
‐
‐
125,000
25,000
25,000
25,000
125,000
100,000
425,000
‐
‐
‐
‐
125,000
100,000
225,000
$1.35
‐
‐
‐
‐
125,000
25,000
25,000
25,000
125,000
100,000
425,000
Weighted average exercise price
$1.25
$1.20
$1.28
$1.28
The weighted average remaining contractual life of share options outstanding at the end of the period was 0.70 years
(2010: 1.11 years).
36
36
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 22: SEGMENT REPORTING
(a) Description of segments
Management has determined the operating segments based on the internal reports that are reviewed and used by the Board of
Directors in assessing performance and determining the allocation of resources.
The economic entity comprises the following operating segments:
Distribution of high technology equipment to professional broadcast, film, recording and
sound reinforcement industries.
Distribution of home theatre products to dealers, distribution and supply of custom
installation components for home theatre and commercial installations to dealers and
consumers, and the distribution of projection and display products with business and
domestic applications.
Distribution of a wide range of quality products for both professional and consumer markets
in New Zealand.
Professional
Lifestyle
Entertainment
New Zealand
Eliminations
$'000
$'000
$'000
$'000
Economic
Entity
$'000
26,238
251
26,489
38,385
‐
38,385
2,060
‐
2,060
‐
(251)
(251)
66,683
‐
66,683
Professional
Lifestyle Entertainment
New Zealand
(b) Segment information
2011
Revenue
‐
‐
Total segment revenue
Inter‐segment revenue
Revenue from external customers
Result
‐ Segment EBIT
‐
Unallocated/corporate result
‐ EBIT
‐ Net interest and finance costs
‐
Profit before income tax
Income tax expense
‐
‐ Profit for the year
Assets
‐ Segment Assets
‐ Unallocated/corporate assets
‐ Total assets
Liabilities
‐
Segment Liabilities
‐ Unallocated/corporate liabilities
‐
Total liabilities
Other
‐
‐
Acquisition of non current segment assets
Depreciation and amortisation of segment assets
846
306
(164)
12,099
16,644
1,271
6,653
2,879
278
122
158
4
9
81
105
37
‐
‐
‐
‐
‐
988
(389)
599
(441)
158
(32)
126
30,014
4,445
34,459
9,810
4,667
14,477
207
207
272
272
37
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 22: SEGMENT REPORTING (continued)
2010
Revenue
‐ Total segment revenue
‐ Inter‐segment revenue
Revenue from external customers
Result
‐ Segment EBIT
‐
‐
Unallocated/corporate result
EBIT
‐ Net interest and finance costs
‐
Profit before income tax
‐ Income tax expense
‐ Profit for the year
Assets
‐ Segment Assets
‐ Unallocated/corporate assets
‐ Total assets
Liabilities
‐ Segment Liabilities
‐ Unallocated/corporate liabilities
‐ Total liabilities
Other
Professional
Lifestyle
Entertainment
New Zealand
Eliminations
$'000
$'000
$'000
$'000
Economic
Entity
$'000
21,446
164
21,610
40,871
‐
40,871
3,871
‐
3,871
‐
(164)
(164)
66,188
‐
66,188
302
1,523
155
7,087
18,748
1,700
2,099
2,835
583
‐
‐
‐
‐
‐
1,980
677
2,657
(374)
2,283
(677)
1,606
27,535
4,438
31,973
5,517
6,399
11,916
230
230
279
279
‐
Acquisition of non current segment assets
‐
Depreciation and amortisation of segment assets
84
107
125
161
21
11
38
38
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 22: SEGMENT REPORTING (continued)
(c) Segment information on geographical region
Segment Revenues from
Sales to External
Customers
2011
$'000
2010
$'000
Carrying Amount of
Segment Assets
2011
$'000
2010
$'000
Acquisition of Non‐
Current Assets
2011
$'000
2010
$'000
Geographical Location
‐ Australia
‐ New Zealand
(d) Other segment information
(i) Accounting Policies
64,623
2,060
66,683
62,317
3,871
66,188
28,743
1,271
30,014
25,835
1,700
27,535
204
3
207
209
21
230
Segment revenues and expenses are those directly attributable to the segments and include any joint revenues and
expenses where a reasonable basis of allocation exists. Segment assets include all assets used by a segment and
consist principally of cash, receivables, inventories and property, plant and equipment. All remaining assets of the
economic entity are considered to be unallocated assets. Segment liabilities consist principally of accounts payable,
employee entitlements, accrued expenses, provisions and borrowings.
Segment assets and liabilities do not include income taxes.
(ii) Intersegment Transfers
Segment revenues, expenses and result include transfers between segments. The prices charged on intersegment
transactions are the same as those charged for similar goods to parties outside of the economic entity. These transfers
are eliminated on consolidation.
39
39
Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 23: CASH FLOW INFORMATION
(i) Cash and cash equivalents
Cash and cash equivalents included in the statement of cash flows
comprise of the following amounts:
Cash on hand
At call deposits with financial institutions
(ii) Reconciliation of net cash provided by / (used in) operating activities
to profit or loss after income tax
Profit for the year
Depreciation and amortisation
Net loss on disposal of plant and equipment
Foreign exchange losses/(gains)
Non‐cash share based payments
Changes in operating assets and liabilities
(Increase)/Decrease in trade and other receivables
Decrease/(Increase) in inventories
Decrease in tax receivable
Increase/(Decrease) in payables
Increase in provisions
(Increase)/Decrease in deferred taxes
Net cash provided by operating activities
(iii) Non Cash Financing and Investing Activities
There were no non‐cash financing or investing activities during the financial year.
Economic Entity
2011
$'000
2010
$'000
3
3,131
3,134
126
272
1
57
12
(5,344)
2,480
368
4,173
160
(182)
2,123
3
3,087
3,090
1,606
279
3
(803)
(185)
3,197
(1,806)
249
(1,044)
158
56
1,710
40
40
Annual Report for the year ended 30 June 2011Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 24: FINANCIAL RISK MANAGEMENT
The economic entity's financial risk management policies are established to identify and analyse the risks faced by the
business, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the economic entity's
activities.
The economic entity's activities expose it to a wide variety of financial risks, including the following:
credit risk
liquidity risk
‐
‐
‐ market risk (including foreign currency risk and interest rate risk)
This note presents information about the economic entity's exposure to each of the above risks, the objectives,
policies and processes for measuring and managing risk and how the economic entity manages capital.
Liquidity and market risk management is carried out by a central treasury department (Group Treasury) in accordance
with risk management policies. The Board has overall responsibility for the establishment and oversight of the risk
management framework. The Board, through the Audit and Risk Management Committee, oversees how
management monitors compliance with the risk management policies and procedures and reviews the adequacy of
the risk management framework in relation to risks.
The economic entity uses derivative financial instruments such as foreign exchange contracts to hedge certain risk
exposures. Derivatives are used exclusively for hedging purposes. The economic entity does not enter into or trade
financial instruments, including derivative financial instruments, for speculative purposes.
Credit Risk
Credit risk is the risk of financial loss to the economic entity if a customer or the counterparty to a financial instrument
fails to meet its contractual obligations, and arises principally from the economic entity's receivables from customers.
The maximum exposure to credit risk is the carrying amount of the financial assets.
Trade and other receivables
Exposure to credit risk is influenced mainly by the individual characteristics of each customer. The customer base
consists of a wide variety of customer profiles. New customers are analysed individually for creditworthiness, taking
into account credit ratings where available, financial position, past experience and other factors. This includes major
contracts and tenders approved by executive management. Customers that do not meet the credit policy guidelines
may only purchase using cash or recognised credit cards. The general terms of trade for the economic entity are
between 30 and 60 days.
In monitoring credit risk, customers are grouped by their debtor ageing profile. Monitoring of receivable balances on
an ongoing basis minimises the exposure to bad debts.
Impairment allowance
The impairment allowance relates to specific customers, identified as being in trading difficulties, or where specific
debts are in dispute. The impairment allowance does not include debts past due relating to customers with a good
credit history, or where payments of amounts due under a contract for such customers are delayed due to works in
dispute and previous experience indicates that the amount will be paid in due course.
41
41
Ambertech LimitedAnnual Report for the year ended 30 June 2011 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 24: FINANCIAL RISK MANAGEMENT (continued)
The ageing of trade receivables at the reporting date was:
Not past due
Past due up to 30 days
Past due 31‐60 days
Past due 61 days and over
Total trade receivables not impaired
Trade receivables impaired
Total trade receivables
Economic Entity
2011
$'000
2010
$'000
8,530
3,571
442
135
12,678
26
12,704
3,187
3,179
408
603
7,377
121
7,498
The economic entity does not have other receivables which are past due (2010: Nil).
Liquidity Risk
Liquidity risk is the risk that the economic entity will not be able to meet its financial obligations as they fall due. The
economic entity's policy for managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity (cash
reserves and banking facilities) to meet its liabilities when due, under both normal and stressed conditions. The objective of
the policy is to maintain a balance between continuity of funding and flexibility through the use of bank facilities.
The economic entity monitors liquidity risk by maintaining adequate cash reserves and banking facilities and by continuously
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. The table
below summarises the maturity profile of the economic entity's financial liabilities based on contractual undiscounted
payments:
Economic Entity
2011
Trade and other payables
Commercial Bills
Economic Entity
2010
Trade and other payables
Commercial Bills
Contractural Cash Flows
Less than
3 months
$'000
3 to 6
months
$'000
6 to 12
months
$'000
More than
12 months
$'000
9,493
3,000
12,493
5,292
4,700
9,992
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
Total
$'000
9,493
3,000
12,493
5,292
4,700
9,992
The economic entity also has a number of premises under operating lease commitments. The future contracted
commitment at year end is disclosed at note 17.
42
42
Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 24: FINANCIAL RISK MANAGEMENT (continued)
Market Risk
Market risk is the risk that changes in market prices will affect the economic entity's income or the value of its holdings
of financial instruments. The activities of the ecomonic entity expose it primarily to the financial risks of changes in
foreign currency rates and interest rates. The objective of market risk management is to manage and control market
risk exposures within acceptable parameters, whilst optimising the returns.
Foreign Currency Risk
The economic entity operates internationally and is primarily exposed to currency risk on inventory purchases
denominated in a currency other than the functional currency of the economic entity. Where appropriate, the
economic entity uses forward exchange contracts to manage its foreign currency exposures.
The board has adopted a policy requiring management of the foreign exchange risk against the functional currency.
The economic entity is required to hedge the exposure arising from future commercial transactions and recognised
assets and liabilities using forward contracts. The amount of foreign currency denominated payables outstanding at
balance date is disclosed at note 12.
In order to protect against exchange rate movements, the economic entity has entered into forward foreign exchange
contracts. There contracts are hedging highly probably forecasted cash flows for the ensuing financial year.
Management has a risk management policy to hedge between 50% and 80% of anticipated foreign currency
transactions for the subsequent 3 months.
The maturity, settlement amounts and the average contractual exchange rates of the economic entity's outstanding
forward foreign exchange contracts at the reporting date was as follows:
Buy US dollars
Maturity:
0‐3 months
3‐6 months
Buy EUR dollars
Maturity:
0‐3 months
Buy JPY dollars
Maturity:
0‐3 months
Buy CHF dollars
Maturity:
0‐3 months
Sell Australian dollars
2011
2010
$'000
$'000
Average exchange rates
2011
2010
1,903
‐
3,045
623
1.0509
‐
0.8868
0.8023
‐
‐
‐
579
728
51
‐
‐
‐
0.6912
82.5750
0.9771
The following table demonstrates the impact on the profit and equity of the economic entity, if the Australian Dollar
weakened/strengthened by 10%, which management consider to be reasonably possible at balance date against the
respective foreign currencies, with all other variables remaining constant:
Impact on profit
Impact on equity
Weakening of 10%
2011
$'000
2010
$'000
Strengthening of 10%
2011
2010
$'000
$'000
456
456
(9)
(9)
(348)
(348)
48
48
43
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Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 24: FINANCIAL RISK MANAGEMENT (continued)
Interest Rate Risk
The economic entity has a borrowing facility which allows the group to utilise a combination of commercial bills and
overdraft facilities to minimise its interest costs whilst maintaining the flexibility to accomodate short term working
capital requirements that may vary from time to time. By converting overdraft to commercial bill debt, interest rates are
effectively converted from variable to fixed rates for the term of the bill. The use of the facility exposes the economic
entity to cash flow interest rate risk.
As at the reporting date, the economic entity had the following fixed and variable rate borrowings:
Weighted average interest
rate
Note
Balance
2011
%
2010
%
2011
$'000
2010
$'000
Commercial Bills
13
4.91%
5.10%
3,000
4,700
The following table demonstrates the impact on the profit and equity of the economic entity if the average interest rate
on the multi option borrowing facility had either increased or decreased by 1%, which management consider to be
reasonably possible over the whole year ending 30 June 2011, with all other variables remaining constant:
Increase of 1% of average
interest rate
Decrease of 1% of average
interest rate
2011
$'000
2010
$'000
2011
$'000
2010
$'000
(44)
(44)
(43)
(43)
44
44
43
43
Impact on profit
Impact on equity
Net Fair Values
The net fair values of assets and liabilities approximates their carrying values. No financial assets or liabilities are readily
traded on organised markets.
Capital Management
The Board's aim is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The Board seeks to maintain a balance between the higher returns that
might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital position.
Total capital is defined as shareholders' equity. The Board monitors the return on capital, which is defined as net
operating income divided by total shareholders' equity. The Board also establishes a dividend payout policy which is
targeted as being greater than 50% of earnings, subject to a number of factors, including the capital expenditure
requirements and the company's financial and taxation position. Dividend payout for the year ended 30 June 2011 is
242.8% (2010: 66.7%).
There were no changes to the economic entity's approach to capital management during the financial year.
44
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Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 25: EARNINGS PER SHARE
Basic earnings per share (cents)
Weighted average number of ordinary shares (number)
Earnings used to calculate basic earnings per share ($)
Diluted earnings per share (cents)
Weighted average number of ordinary shares (number)
Earnings used to calculate diluted earnings per share ($)
Economic Entity
2011
2010
0.4
5.2
30,590,832
30,598,181
126,000
1,606,000
0.4
5.2
30,590,832
30,598,181
126,000
1,606,000
(a) The effect of the Executive Share Option Plan options on issue is not considered dilutionary because
based on conditions at the date of this report, it is considered unlikely that these options would be
converted into ordinary shares.
NOTE 26: DIVIDEND FRANKING CREDITS
In respect of dividends first recognised as a liability during the period or paid in the period
without previously being recognised as a liability
Dividends that have been fully franked:
Amount in aggregate ($'000)
Cents per share
Tax rate
Amount of franking credits available for subsequent
reporting periods ($'000)
153
0.05
30%
1,683
5.5
30%
6,139
6,001
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Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Economic Entity
2011
$
2010
$
NOTE 27: AUDITORS' REMUNERATION
During the year the following fees were paid or payable for services provided by the
auditor of the parent and its related practices:
Audit services
PKF
Audit and review of financial reports, and other work under the Corporations Act
2001.
124,560
130,290
Related practices of PKF
Audit or review of financial reports of subsidiary
Total remuneration for audit services
Non‐audit services
PKF
10,000
134,560
10,000
140,290
Tax compliance services, including review of company income tax returns
Total remuneration for non‐audit services
18,035
18,035
27,870
27,870
It is the economic entity's policy to employ PKF on assignments additional to their
statutory audit duties where PKF's expertise and experience with the economic entity
are important. These assignments are principally tax advice or where PKF is awarded
assignments on a competitive basis.
46
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Annual Report for the year ended 30 June 2011Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 28: PARENT ENTITY INFORMATION
Information relating to Ambertech Limited (parent entity):
‐ Current Assets
‐ Total Assets
‐ Current Liabilities
‐ Total Liabilities
‐ Share capital
‐ Share based payments reserve
‐ Retained earnings
(Loss) / Profit of the parent entity
Total comprehensive income of the parent entity
Parent Entity
2011
$'000
2010
$'000
11,009
15,567
1,462
1,462
11,161
15,718
1,462
1,462
11,138
11,146
28
2,939
(2)
(2)
86
3,024
173
173
47
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Ambertech LimitedAnnual Report for the year ended 30 June 2011
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' DECLARATION
In the directors' opinion:
a.
the financial statements and notes are in accordance with the Corporations Act 2001, including:
(i)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements; and
(ii)
giving a true and fair view of the economic entity's and parent entity's financial position as at 30 June
2011 and of their performance for the financial year ended on that date; and
there are reasonable grounds to believe that the company will be able to pay its debts as and when they
become due and payable; and
the remuneration disclosures set out in the Directors' Report comply with Accounting Standard AASB 124
Related Party Disclosures and the Corporations Regulations 2001 for the financial year ended 30 June 2011.
b.
c.
The directors have been given the declarations by the chief executive officer and chief financial officer required
by Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2011.
The financial statements also comply with International Financial Reporting Standards as disclosed in note 2(a).
This declaration is made in accordance with a resolution of the directors.
Director:
Director:
P F Wallace
P A Amos
Dated this 26th day of August 2011.
Sydney
48
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Annual Report for the year ended 30 June 2011Ambertech Limited 49
Ambertech LimitedAnnual Report for the year ended 30 June 2011 Shareholder Information
XIX
Annual Report for the year ended 30 June 2011Ambertech Limited Shareholder Information
a. Distribution of equity security by size of holding:
1
1,001
5,001
10,001
100,001
-
-
-
-
and
1,000
5,000
10,000
100,000
over
Number of
shareholders
Number of
Ordinary Shares
% of total
capital
79
102
59
92
24
72,687
359,521
518,829
2,955,095
26,667,049
0.24
1.18
1.70
9.67
87.22
100.00
The number of security investors holding less than a marketable parcel of 2,222 securities is 104 and they hold 116,107 securities.
30,573,181
Total
356
b. Equity Security Holders:
The twenty largest shareholders as at 29 September 2011 were:
Rank Twenty largest holders
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
Crowton Pty Ltd (Amos Super Fund)
Howbay Pty Ltd
Wavelink Systems Pty Ltd
Wavelink Systems Pty Ltd (Employee Super Fund)
Kestrel Capital Pty Limited (Kestrel Secondaries Fund 1)
Nanyang Australia Limited
Wygrin Pty Ltd
Appwam Pty Limited
Kestrel Capital Pty Ltd (ATF Kestrel Sec Fund 1)
Wygrin Pty Ltd (Wygrin Pension Fund)
Crowton Pty Limited
JH Nominees Australia Pty Ltd (Harry Family Super Fund A/C)
Mr Joseph Grech
Mr Ralph McCleery
Mr Joseph Paul Grech & Ms Deborah Lee Grech
Dorran Pty Ltd
Realcal Pty Ltd
Mr Stephen Rodney Hariono
Wallace Capital Pty Ltd
Velkov Funds Management Limited
Source: Link Market Services
Number of
shares
% of total
capital
3,231,681
2,883,556
2,784,625
2,650,000
2,644,802
2,000,464
1,699,556
1,500,000
1,475,865
1,296,270
1,082,162
940,758
413,045
357,599
333,261
220,000
200,000
166,835
152,600
150,000
10.57
9.43
9.11
8.67
8.65
6.54
5.56
4.91
4.83
4.24
3.54
3.08
1.35
1.17
1.09
0.72
0.65
0.55
0.50
0.49
26,183,079
85.64
XX
Ambertech LimitedAnnual Report for the year ended 30 June 2011 c. Substantial Shareholders:
Substantial shareholders with a relevant interest of 5% or more of total issued shares, based on notifications provided to the
company under the Corporations Act 2001 include:
Shareholder
Kestrel Capital Pty Limited
Wavelink Systems Pty Ltd
Crowton Pty Limited
Wygrin Pty Ltd
Howbay Pty Ltd
d. On-Market Buy Back:
Number of shares
% of total capital
6,268,868
5,484,625
4,313,843
2,995,826
2,883,556
20.50
17.94
14.11
9.80
9.43
On 2 September 2005, the company lodged an Appendix 3C announcing an on-market buy-back of up to 1,543,150 ordinary
shares on issue. On 28 September 2006 the company lodged an Appendix 3D amending the buy-back duration to unlimited.
The company has not lodged an Appendix 3F to finalise the buy back as at 30 September 2011.
The buy back is a part of the company’s capital management and is designed to improve shareholder returns. During the year
ended 30 June 2011, 25,000 shares were bought back by the company.
e. Voting rights:
On a show of hands, one vote for every registered shareholder, and for a poll, one vote for every share held by a registered
shareholder.
XXI
Annual Report for the year ended 30 June 2011Ambertech Limited Notes
XXII
Ambertech LimitedAnnual Report for the year ended 30 June 2011 Corporate Directory
XXIII
Annual Report for the year ended 30 June 2011Ambertech Limited PO Box 942 Brookvale
NSW 2100 Australia
Unit B 5 Skyline Place
Frenchs Forest NSW 2086
Email: info@ambertech.com.au
Phone: 02 9452 8600
Fax: 02 9975 1368
www.ambertech.com.au