Annual Report
Annual Report for the year ended
30 June 2012
Ambertech Limited
ACN 079 080 158
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PO Box 955 Mona Vale
NSW 1660 Australia
Unit 1, 2 Daydream Street
Warriewood NSW 2102
Email: info@ambertech.com.au
Phone: 02 9998 7600
Fax: 02 9999 0770
www.ambertech.com.au
Mission Statement
Unit 1, 2 Daydream Street
Warriewood NSW 2102
Tel: 02 9998 7600
Fax: 02 9999 0770
BDO East Coast Partnership
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
II
IV
VI
VIII
X
XIII
XVIII
XIX
XXIV
I
Ambertech LimitedAnnual Report for the year ended 30 June 2012 Chairman’s and
Managing Director’s Review
II
Annual Report for the year ended 30 June 2012Ambertech 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 2012.
Significant change and multiple challenges were the overriding themes of the 2011-12 financial year for Ambertech, and this is
certainly reflected in the results being reported. The major factors that impacted the sales revenue for the year were:
•
•
•
The compounding impact of issues relating to supply, quality control and feature set of a major product line during the
year, outside of our control. These issues contributed to market share loss and margin erosion for our lifestyle segment.
These issues have now been addressed;
Continued caution with discretionary spend of retail consumers; and
Deferral in capital equipment spending at major Australian broadcasters during the year.
The underlying results of the business included the following one off costs relating to the move of Ambertech’s head office; restructure
costs, a significant bad debt, and the impairment of goodwill. Despite the difficult trading, Ambertech remained operating cash flow
positive for the financial year.
The 2012-13 financial year has begun with some pleasing results across our traditional market segments, including the announcement
of a contract with the ABC for in excess of $4m in revenue.
As a result, we are cautiously optimistic that we can deliver on our business strategies, which are focused on returning positive results
for our investors in the short term. We expect to be able to update investors on revenue and profit forecasts at the time of holding the
company’s AGM.
The Board and management remain 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.
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
III
Ambertech LimitedAnnual Report for the year ended 30 June 2012
Lifestyle Entertainment
IV
Annual Report for the year ended 30 June 2012Ambertech Limited Lifestyle Entertainment Update
The 2011-12 financial year presented a continuation of tough economic conditions for
our markets, and the compounding impact of issues relating to supply, quality control
and feature set of a major product line. Despite this we were largely successful in
maintaining or growing our market share with our major brands in their categories.
This is as a result of a continued focus for the success of our brands in their respective
markets, a defined strategy for growth and a continuation of the integrity in business
which makes up our core values.
During the year our core business had some significant events which will lay the
foundation for future revenue growth, including:
•
Release to the market of the new range of Onkyo receivers which took the award winning,
feature packed models and included network capability and introduced Spotify music
streaming service to Australian Home Theatre Receivers. Onkyo also released an app
based controller dedicated to providing more for the user.
• On the immediate horizon is a new Onkyo wireless dock which will transform any legacy
home theatre receiver into a wireless receiver.
•
•
Sonance business continued to grow with the success of their traditional high quality
architectural speaker products and the new outdoor Landscape Series. The introduction
of the iPort range of products and an updated go to market strategy has seen Sonance
flourish.
NHT speakers came to Amber Technology to be the pioneer of our online only sales
model.
•
•
•
•
A welcome addition to our portfolio of world class brands to
satisfy the high bright projector and commercial flat panel
market is Panasonic.
One For All continued the domination of the replacement
Universal Remote Control market and this year introduced the
first Full HD Indoor Antenna’s which have proven a success as
the analogue switch off happens around the country.
Another new addition to our portfolio is the fashionable
headphone range from Zound Industries.
Along the lines of fashion, we also introduced Pat Says Now
cases and bags into the Australian market place
Our efforts continue to be supporting our customers and working with them to help their business grow.
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.
V
Ambertech LimitedAnnual Report for the year ended 30 June 2012 Broadcast and Professional
VI
Annual Report for the year ended 30 June 2012Ambertech Limited Broadcast and Professional Update
A number of factors affected performance during the year, which upon analysis led
to some interesting observations and lessons to take forward into the new period. Key
amongst these is:
• Our resellers have not been
immune to the impact of the strong
Australian Dollar, with the attendant
problems of grey importing and
internet purchasing from overseas.
We have adjusted ordering and
shipping policies to better compete,
and are working actively with our major resellers to address the
changing marketplace in online presence and purchasing.
Uncertainty in the resources sector has resulted in several key
projects being put on hold, with a resultant reduction in growth in
some of our new development areas such as communications systems
for the mining sector.
We lost a major agency, caused by their consolidation with another company in the
UK which already had an office and staff in Australia. They chose to continue with their
own existing operation rather than with Amber as a local representative.
Growth in our services revenues. The pressure on many of our key customers to improve efficiency and cut costs
has led to a significantly increased demand for turnkey installation offerings and services provision rather than
capital expenditure. Amber’s Technical Services Group is well positioned to respond to these demands and
showed a very satisfactory performance as a result.
Our key product lines continue to show strength and stability, with good prospects for continued growth through
diversification and expansion of their offerings.
•
•
•
•
Overall it has been a year of consolidation and transformation. Looking ahead we expect to see further consolidation of brands
and are positioning ourselves to capitalise on this. We also seek to address the ongoing need for greater services provision, and
to maximise throughput of distributed products in the face of overseas internet channels.
VII
Ambertech LimitedAnnual Report for the year ended 30 June 2012 New Zealand
VIII
Annual Report for the year ended 30 June 2012Ambertech Limited New Zealand Segment
Amber NZ finished the 2011-12 financial year with a profitable
result, which was pleasing given the tough conditions that still
remain across all markets in New Zealand.
Promising growth was seen in the AV/Custom Install market
helped considerably by the Rugby World Cup (RWC) and
the mini boom it created in Q2. Even so, sales were steady
throughout the year with the North Island exceeding
expectations. Several initiatives were implemented during the
year with the most significant being the launch of Urbanears
and Marshall Headphones from Zound Industries.
Complementing the addition of Zound Industries to our portfolio we have also launched the TEXCUS range of batteries, torches
and chargers from Wentronics. The TEXCUS products complement our current activities and even in these early stages we are
seeing strong commitment from our growing customer base.
Despite the stress of the grey market and parallel imported products the Pro
Audio market was a steady performer. One project worthy of note was the
purchase by “The Edge” (Home of The Aotea Centre, The Civic, Auckland Town
Hall& Aotea Square) of DPA microphones and accessories.
This sale will be a supreme testimonial for our future performing arts sales.
During the year we also had our first major Prime Acoustics commercial
installation take place with positive feedback from both installer and customer.
Sales are growing steadily and we see a positive future for this agency.
EVS was responsible for our largest broadcast project this year. With New
Zealand hosting the RWC, OSB needed an upgrade of EVS Live Slow Motion
(LSM) systems. TVNZ refreshed all their Avid edit clients and also asked Amber
to supply all their preferred 3rd party plug-ins and utility software.
After a long negotiation period Amber NZ is now the One For All (OFA) distributor for New Zealand and the Pacific
Archipelago. This is a significant acquisition and gives the NZ operation a much stronger profile in the retail segment.
IX
Ambertech LimitedAnnual Report for the year ended 30 June 2012 Our Business and Brands
X
Annual Report for the year ended 30 June 2012Ambertech Limited XI
Ambertech LimitedAnnual Report for the year ended 30 June 2012 AMAZON CASES
installation:innovation
®
XII
Annual Report for the year ended 30 June 2012Ambertech Limited Corporate Governance
Statement
XIII
Ambertech LimitedAnnual Report for the year ended 30 June 2012 CORPORATE GOVERNANCE STATEMENT
This disclosure is made with reference to the Corporate Governance Principles and Recommendations released by the ASX Corporate
Governance Council in August 2007 as amended in 2010 (“the Principles”). Ambertech Limited has published on its website its Cor-
porate Governance Summary and related Policies and Procedures, and in the explanations below references are made to those policies
and procedures.
The Board sets out below its “if not why not” report in relation to those matters or corporate governance where the Company’s practices
depart from the Principles.
Principle
Current Practice
1.1
1.2
1.3
Formalise and disclose functions reserved to the Board and
those delegated to management.
Outlined in the Ambertech Board Charter available from
the investor section of the Ambertech website.
Disclose the process for evaluating the performance of
senior executives.
Outlined in the Corporate Governance Summary available
from the investor section of the Ambertech website.
Disclose whether performance evaluation of senior execu-
tives has taken place in accordance with the disclosed
process.
Performance evaluations for the 2011/12 year for the
Managing Director and CFO were completed in Septem-
ber 2012.
2.1
A majority of the Board should be independent directors.
The Board has taken a view that independence extends
to non-executive directors with less than 10% of issued
capital, resulting in 3 out of 5 directors being considered
“independent”.
2.2
The chairperson should be an independent director.
Satisfied.
2.3
Roles of the chairperson and the managing director should
not be exercised by the same person.
Satisfied.
2.4
The Board should establish a nomination committee.
A copy of the Remuneration and Nomination Commit-
tee charter is available from the investor section of the
Ambertech website.
2.5
Companies should disclose the process for evaluating the
performance of the Board, its committees and individual
directors.
Outlined in the Corporate Governance Summary available
from the investor section of the Ambertech website.
2.6
Companies should provide the information about the
board specified in the reporting guide to Principle 2.
Directors and Board committees have the right, in connec-
tion with their duties and responsibilities, to seek inde-
pendent professional advice at the Company’s expense,
subject to approval of cost by the Chairman. Further infor-
mation is contained in the Directors’ Report and outlined
in the Corporate Governance Summary available from the
investor section of the Ambertech website.
3.1
Establish a code of conduct and disclose the code.
A copy of the Code of Conduct is available from the inves-
tor section of the Ambertech website.
Establish a policy concerning diversity and disclose the
code.
A copy of the Diversity Policy is available from the investor
section of the Ambertech website.
Disclose measureable objectives for achieving gender
diversity and progress towards achieving them.
Given the small size of Ambertech, the only measurable
objective at this point is to increase gender diversity within
the company as a whole rather than focus on change
within discrete functional areas.
Disclose in the Annual Report the proportion of women
employees in the whole organisation, in senior executive
positions and on the Board.
21.4% of Ambertech’s employees are women. 12.5% of
the senior executives are women. There are currently no
women on the Board.
3.2
3.3
3.4
XIV
Annual Report for the year ended 30 June 2012Ambertech Limited The Board should establish an audit committee.
Satisfied.
4.1
4.2
Structure the audit committee so that it consists of only
non-executive directors, a majority of independent direc-
tors, and the chairperson is independent and not the chair
of the board and has at least three members.
The Audit and Risk Management Committee has only two
members as it would be inefficient for the structure of the
board to have three members.
4.3
The audit committee should have a formal charter
A copy of the Audit and Risk Management Committee
4.4
5.1
5.2
6.1
6.2
7.1
7.2
7.3
Report on the above including names of members and
qualifications, numbers and meetings and attendees in the
annual report
Establish written policies and procedures designed to
ensure compliance with ASX Listing rule disclosure require-
ments and to ensure accountability at senior management
level for that compliance.
Charter is available from the investor section of the Am-
bertech website.
Information contained in the Directors’ Report.
A copy of the Continuous Disclosure and Communications
Policy is available from the investor section of the Am-
bertech website.
Post relevant disclosure policies on website and disclose
any departures.
Satisfied. See the Ambertech website.
Design and disclose a communications strategy to promote
effective communication with shareholders and encourage
effective participation at general meetings.
A copy of the Continuous Disclosure and Communications
Policy is available from the investor section of the Am-
bertech website.
Use the company website to provide information, including
webcasting, press releases and shareholder information by
email.
Satisfied. See the Ambertech website.
The Board or appropriate board committee should
establish policies on risk oversight and management and
disclose a summary of those policies.
A copy of the Risk Management Policy is available from
the investor section of the Ambertech website.
The Board should require management to design, imple-
ment and report against a risk management and control
system.
Satisfied.
The Board should disclose whether it has received assur-
ance from the Managing Director/CFO that the declara-
tion under Sec 295A of the Corporations Act is founded
on a sound system of risk management and an effective
system of identifying financial reporting risks.
Satisfied. The Managing Director and CFO provide assur-
ance to this effect to the Board.
7.4
Information specified in the guide on Principle 7 should be
provided.
Satisfied.
8.1
The Board should establish a Remuneration Committee.
A copy of the Remuneration and Nomination Commit-
tee charter is available from the investor section of the
Ambertech website.
8.2
Clearly distinguish the structure of non-executive director
remuneration from that of executive directors and senior
management
Satisfied.
8.3
Information specified in the guide to Principle 8 should be
provided.
Information contained in the Directors’ Report.
XV
Ambertech LimitedAnnual Report for the year ended 30 June 2012 Financial Report
XVI
Annual Report for the year ended 30 June 2012Ambertech 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 2012 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
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.
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
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
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.
1
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Ambertech LimitedAnnual Report for the year ended 30 June 2012 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
Edwin Francis Goodwin
Non‐Executive Director
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
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 an independent telecommunications management and technology
consultant 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 101 full time employees as at 30 June 2012 (2011: 109 employees).
2
2
Annual Report for the year ended 30 June 2012Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REVIEW AND RESULTS OF OPERATIONS
The consolidated loss of the economic entity after providing for income tax for the financial year was ($4,693,000).
This was down from a profit after tax of $126,000 in the previous period. Total revenues for the financial year
decreased by 22.9% to $51,407,000 (2010: $66,703,000). 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 operating 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
$760,000 for the year ended 30 June 2012 in difficult trading conditions. Borrowings were increased by $400,000
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 $3,695,000 to
$12,843,000 as at 30 June 2012 (2011: $16,538,000). The net assets of the economic entity have also decreased by
$4,677,000 to $15,305,000 as at 30 June 2012 (2011: $19,982,000). 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
On 25 September 2012, the economic entity announced that it had signed a significant contract in the order of
$4,000,000 to be completed during the 2012‐13 financial year.
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 financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
After a challenging 2011‐12 financial year, the Board and management remain focused on utilising 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.
The 2012‐13 financial year has begun with some pleasing results across our traditional market segments. As a result,
we are cautiously optimistic that we can deliver on our business strategies, which are focused on returning positive
results to our investors in the short term.
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.
3
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Ambertech LimitedAnnual Report for the year ended 30 June 2012 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.
4
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Annual Report for the year ended 30 June 2012Ambertech 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
Dividends paid (cents per share)
Closing share price at 30 June ($)
Share buy back ($'000)
2012
‐
$0.24
‐
Net (loss) / profit after tax ($'000)
(4,693)
Details of remuneration
2011
0.5
$0.31
8
126
2010
5.5
$0.38
‐
1,606
2009
3.5
$0.45
44
1,806
2008
7.0
$0.65
‐
3,179
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
Managing Director
B Lee
General Manager, Lifestyle Entertainment
T Amos
Non‐Executive Director
R Caston
General Manager, Broadcast & Professional
E Goodwin
Non‐Executive Director
R McCleery
Director, Amber New Zealand
D Swift
Non‐Executive Director
P Simmons
G Simeon
Business Development Manager, Lifestyle
Entertainment (appointed on 1 July 2011)
General Manager, Video & Audio Post Group
(resigned on 19 August 2011)
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
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Ambertech LimitedAnnual Report for the year ended 30 June 2012
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REMUNERATION REPORT (continued)
Elements of Remuneration
2012
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
P Simmons
G Simeon *
R McCleery
350,300
55,046
32,111
32,111
32,231
501,799
174,312
285,090
156,459
147,957
58,495
109,111
931,424
‐
‐
‐
‐
‐
‐
‐
‐
4,359
11,058
‐
‐
15,417
29,700
3,683
4,954
2,890
2,890
2,770
‐
‐
‐
‐
383,683
60,000
35,001
35,001
35,001
43,204
3,683
548,686
15,688
15,120
13,934
12,988
1,921
‐
59,651
36
36
36
‐
‐
36
144
190,036
300,246
174,788
172,003
60,417
109,147
1,006,637
* Represents remuneration from 1 July 2011 to 19 August 2011
2011
Short‐term employment
benefits
Post
employment
benefits
Share based
payments
1.0%
0.0%
0.0%
0.0%
0.0%
0.7%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.5%
6.4%
0.0%
0.0%
1.5%
%
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
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
‐
‐
‐
‐
7,787
838
838
838
‐
838
387,791
60,000
35,001
35,001
35,001
552,794
190,844
183,958
194,783
177,883
108,172
757,487
33,786
61,015
3,352
855,640
6
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
11.3%
6.6%
0.0%
3.9%
2.0%
0.0%
0.0%
0.0%
0.0%
1.4%
0.4%
0.5%
0.4%
0.0%
0.8%
0.4%
6
Annual Report for the year ended 30 June 2012Ambertech 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 $380,000.
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 2012
Exercised
$
Lapsed
No
$
No
No
Vested Vested Unvested Lapsed
Overall
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
100,000
14,370
100,000
14,370
5,000
5,000
5,000
5,000
20,000
718
718
718
718
2,872
‐
‐
‐
‐
‐
‐
‐
%
%
%
100
100
100
100
100
‐
‐
‐
‐
‐
75
100
100
100
100
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 2012
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 125,000 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:
End of Remuneration Report
Director
P Wallace
P Amos
T Amos
E Goodwin
D Swift
DIVIDENDS
Ordinary Shares
Options over
Ordinary Shares
236,528
4,313,843
5,484,625
2,883,556
2,995,826
‐
100,000
‐
‐
‐
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 2012:
Nil
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
11
11
11
11
11
11
11
11
11
11
4
‐
‐
4
‐
8
Director
P Wallace
P Amos
T Amos
E Goodwin
D Swift
8
Annual Report for the year ended 30 June 2012Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
NON‐AUDIT SERVICES
It is the economic entity's policy to employ BDO East Coast Partnership (BDO) (formerly PKF East Coast Practice
(PKF)) for assignments additional to their annual audit duties, when BDO'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 and Risk Management 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 is compatible with the
general standard of independence for auditors 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 2012 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 27th day of September 2012.
Sydney
10
10
10
Annual Report for the year ended 30 June 2012Ambertech 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
consolidated statement of financial position as at 30 June 2012, the consolidated statement of
comprehensive income, the consolidated statement of changes in equity and the consolidated
statement of cash flows for the year then ended, notes comprising a summary of significant
accounting policies and other explanatory information, and the directors’ declaration of the
consolidated entity comprising the company 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 gives a true and fair view and is free from material misstatement,
whether due to fraud or error. In Note 1, 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 company’s preparation of the financial report that gives a true and fair view 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 company’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.
Independence
In conducting our audit, we have complied with the independence requirements of the
Corporations Act 2001. We confirm that the independence declaration required by the Corporations
Act 2001, which has been given to the directors of Ambertech Limited, would be in the same terms
if given to the directors as at the time of this auditor’s report.
11
11
Ambertech LimitedAnnual Report for the year ended 30 June 2012
Opinion
In our opinion:
(a) the financial report of Ambertech Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the company’s financial position as at 30 June 2012 and of
its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001;
and
(b) the financial report also complies with International Financial Reporting Standards as
disclosed in Note 1.
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 2012. 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 2012
complies with section 300A of the Corporations Act 2001.
BDO East Coast Partnership
Arthur Milner
Partner
Sydney, 27 September 2012
12
12
Annual Report for the year ended 30 June 2012Ambertech Limited
DECLARATION OF INDEPENDENCE BY ARTHUR MILNER TO THE DIRECTORS OF AMBERTECH
LIMITED
As lead auditor of Ambertech Limited for the year ended 30 June 2012, I declare that, to the best
of my knowledge and belief, there have been no contraventions of:
•
•
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
any applicable code of professional conduct in relation to the audit.
This declaration is in respect Ambertech Limited and the entities it controlled during the period.
Arthur Milner
Partner
BDO Audit East Coast Partnership
Sydney, 27 September 2012
13
13
Ambertech LimitedAnnual Report for the year ended 30 June 2012
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012
Economic Entity
Note
2012
$'000
2011
$'000
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
Restructure costs
Impairment of goodwill
Relocation expenses
Other expenses
p
(Loss) / Profit before income tax expense
Income tax benefit / (expense)
(Loss) / Profit for the year
Other comprehensive income
Exchange differences on translation of foreign operations
Total comprehensive income for the year
3
4
3
4
4
4
5
51,407
(36,196)
15,211
19
(9,363)
(1,314)
(1,704)
(1,954)
(245)
(438)
(552)
(555)
(2,970)
(274)
)
( ,
(1,108)
(5,247)
554
(4,693)
12
(4,681)
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
25
25
(15.4)
(15.4)
The consolidated statement of comprehensive income is to be read in conjunction with the attached notes.
66,703
(47,541)
19,162
‐
(11,206)
(1,483)
(1,551)
(2,162)
(272)
(461)
(648)
‐
‐
‐
)
( ,
(1,221)
158
(32)
126
(52)
74
0.4
0.4
14
14
14
Annual Report for the year ended 30 June 2012Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012
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
Other financial liabilities
Deferred tax liabilities
TOTAL NON‐CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Reserves
Retained earnings
TOTAL EQUITY
Economic Entity
Note
2012
$'000
2011
$'000
23
6
7
8
10
11
5
12
13
14
14
13
5
15
16
2,495
6,841
133
12,550
22,019
1,969
45
1,428
3,442
3,134
13,128
326
13,571
30,159
380
3,054
866
4,300
25,461
34,459
4,839
3,427
910
9,176
801
121
58
980
10,156
15,305
11,138
(118)
4,285
15,305
9,493
3,000
1,128
13,621
804
‐
52
856
14,477
19,982
11,138
(116)
8,960
19,982
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 2012
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012
Share Capital
$'000
Option
Reserve
$'000
Foreign
Currency
Translation
Reserve
$'000
Economic Entity
Balance as at 30 June 2010
11,146
86
Total comprehensive income for the year
Transactions with equity holders:
Shares bought back during the year
Costs of share based payments
Dividends
Total transactions with equity holders
‐
‐
‐
(8)
(8)
Balance as at 30 June 2011
11,138
Total comprehensive income for the year
Transactions with equity holders:
Shares bought back during the year
Costs of share based payments
Dividends
Total transactions with equity holders
‐
‐
‐
‐
Balance as at 30 June 2012
11,138
‐
‐
(58)
‐
(58)
28
‐
‐
(14)
‐
(14)
14
Retained
Earnings
$'000
Total Equity
$'000
8,917
20,057
126
‐
70
(153)
(83)
74
(8)
12
(153)
(149)
(92)
(52)
‐
‐
‐
‐
(144)
8,960
19,982
12
(4,693)
(4,681)
‐
‐
‐
‐
‐
‐
18
18
‐
‐
4
4
(132)
4,285
15,305
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 2012Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012
Economic Entity
Note
2012
$'000
2011
$'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
Net cash provided by operating activities
23
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 provided by / (used in) financing activities
Net (decrease) / 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
62,649
(58,236)
52
(438)
(132)
325
(3,460)
760
(1,785)
(13)
(1,798)
‐
400
‐
‐
400
(638)
3,134
(1)
2,495
67,397
(59,834)
20
(461)
(538)
361
(4,822)
2,123
(82)
(125)
(207)
(153)
‐
(8)
(1,700)
(1,861)
55
3,090
(11)
3,134
The consolidated statement of cash flows is to be read in conjunction with the attached notes.
17
17
Ambertech LimitedAnnual Report for the year ended 30 June 2012
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 1, 2 Daydream Street, Warriewood NSW 2102.
Authorisation of financial statements
The financial statements were authorised for issue on 27 September 2012 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. The economic entity is a for profit entity.
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).
Going Concern
The economic entity's financing facility expires on 30 November 2012, and negotiations to renew the facility
cannot occur until results for the period to 30 September 2012 are known. In addition, the economic entity made a
loss after tax for the year ended 30 June 2012 of $4,693,000. Notwithstanding the loss, the economic entity had
positive operating cash flows for the year ended 30 June 2012 of $760,000.
After taking into account all of the available information, including the following factors:
‐
‐
‐
Interim results for the period to 31 August 2012 has exceeded budget;
Redundancy, restructure and relocation costs incurred during the financial year are not expected to reoccur;
The economic entity's debts will be paid as and when they fall due based on the cashflow and profit forecasts
prepared by management;
The Professional segment has secured a major contract in excess of $4,000,000 to be delivered in the 2012‐13
financial year;
The Lifestyle Entertainment segment has been restructured to reduce fixed costs and overheads, providing
ongoing savings; and
An indicative offer of funding on a debtor financing arrangement has been received,
‐
The directors have concluded that there are reasonable grounds to believe that the basis for the preparation of the
financial statements on a going concern basis is appropriate.
‐
‐
18
18
Annual Report for the year ended 30 June 2012Ambertech 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)
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)
(ii)
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)
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)
(iii)
AASB 2010‐6 Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial
Assets [AASB 1 & AASB 7] (effective from 1 July 2011)
(iv)
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)
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 2012, but have not been applied in preparing these financial statements.
(i)
AASB 9 Financial Instruments (effective from 1 January 2015)
(ii)
AASB 10 Consolidation (effective from 1 January 2013)
(a)
(b)
(c)
power over the investee;
exposure, or rights, to variable returns from its involvement with the investee; and
the ability to use its power over the investee to affect the amount of the investor’s
(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.
19
19
Ambertech LimitedAnnual Report for the year ended 30 June 2012 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)
New Accounting Standards issued but not yet effective (continued)
(iv)
AASB 13 Fair Value Measurement (effective from 1 January 2013)
AASB 13:
(a) defines fair value;
(b)
(c)
sets out in a single IFRS a framework for measuring fair value; and
requires disclosures about fair value measurements.
(v)
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)
(vi)
AASB 2011‐4 Amendments to Australian Accounting Standards to Remove Individual Key Management
Personnel Disclosure Requirements [AASB 124] (effective from 1 July 2013)
(vii)
AASB 2012‐2 Amendments to Australian Accounting Standards ‐ Disclosures ‐ Offsetting Financial Assets and
Financial Liabilities [AASB 7 & AASB 132] (effective from 1 January 2013)
(viii)
AASB 2012‐3 Amendments to Australian Accounting Standards ‐ Offsetting Financial Assets and Financial
Liabilities [AASB 132] (effective from 1 January 2014)
(ix)
AASB 2012‐5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009‐2011
Cycle [AASB 1, AASB 101, AASB 116, AASB 132 & AASB 134 and Interpretation 2] (effective from 1 January
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 are discussed below.
Provision for impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of
provision is assessed by taking into account the ageing of receivables, historical collection rates, and specific
knowledge of the individual debtors' financial position.
Estimated useful life of assets
The economic entity determines the estimated useful life and related depreciation and amortisation charges for
plant and equipment and definite life of intangible assets. This is in accordance with the accounting policy stated in
note 2(h).
20
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Annual Report for the year ended 30 June 2012Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(b) Significant Judgements and Key Assumptions (continued)
Impairment of goodwill
The economic entity tests annually whether goodwill has suffered any impairment and is in accordance with
accounting policy stated in note 2(j). These calculations require the use of assumptions, and are described further
in note 11.
Long service leave provision
The liability for long service leave is recognised and measured at the present value of the estimated future cash
flows to be made in respect of all employees at the reporting date. In determining the present value of the liability,
estimates of attrition rates and pay increases through promotion and inflation have been taken into account.
Warranty provision
In determining the level of provision required for warranties, the economic entity has made judgements in respect
of the expected performance of the product, expected customer claims and costs of fulfilling the conditions of
warranty.
(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.
21
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Ambertech LimitedAnnual Report for the year ended 30 June 2012 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) Trade and other 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)
Inventories
Inventories include finished goods and stock in transit and 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.
22
22
Annual Report for the year ended 30 June 2012Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(i) 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(j)).
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.
(j) 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.
(k) 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.
23
23
Ambertech LimitedAnnual Report for the year ended 30 June 2012 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(l) 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.
(m) Service Warranties
Provision is made for the estimated liability on all products still under warranty at balance date.
(n) 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.
(ii) Finance leases
Lease payments, where substantially all the risks and benefits incidental to the ownership of the leased asset
transfer from the lessor to the lessee, are allocated between the principal component of the lease liability and the
finance costs. Leased assets acquired under a finance lease are depreciated over the term of the lease.
(o)
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.
(p) 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.
24
24
Annual Report for the year ended 30 June 2012Ambertech Limited AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q)
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.
25
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Ambertech LimitedAnnual Report for the year ended 30 June 2012 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r)
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.
(s)
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.
(t)
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.
(u) 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.
(v) 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.
(w) 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.
(x) Derivative financial instruments
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently
re‐measured to their fair value at each reporting date. The accounting for subsequent changes in fair value depends
on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged.
Derivatives are classified as current according to expected period of realisation.
26
26
Annual Report for the year ended 30 June 2012Ambertech Limited 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: EXPENSES
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
Leased plant and equipment
Amortisation
Website costs
Bad and doubtful debts
Rental expense on operating leases:
Minimum lease payments
Net foreign exchange losses
Net loss on disposal of plant and equipment
Net fair value (loss) / gain on derivative financial instruments ‐
forward exchange contracts
27
Economic Entity
2012
2011
$'000
$'000
51,355
66,683
52
51,407
20
66,703
19
19
‐
‐
36,196
191
47,541
18
8,907
456
9,363
10,704
502
11,206
123
29
34
7
193
52
16
139
26
66
‐
231
41
163
1,193
1,315
‐
3
(18)
57
1
45
27
Ambertech LimitedAnnual Report for the year ended 30 June 2012
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 (benefit) / expense
Reconciliation between income tax expense and prima facie tax on accounting
(loss) / profit
(Loss) / Profit before income tax expense
Tax at 30% (2011:30%)
Tax effect of non deductible expenses
‐ Entertainment
‐ Impairment charge
‐ Other items
Under provision for income tax in prior years
Income tax (benefit) / 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
Unrealised foreign currency loss
Tax losses
Other
Analysis of deferred tax liabilities
Leases
Other
Economic Entity
2012
2011
$'000
$'000
‐
2
(556)
(554)
(5,247)
(1,575)
9
735
275
2
(554)
438
29
11
32
55
129
22
15
675
22
1,428
57
1
58
213
1
(182)
32
158
47
13
‐
(29)
1
32
443
148
5
119
7
73
14
‐
‐
57
866
50
2
52
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 2012.
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.
28
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Annual Report for the year ended 30 June 2012Ambertech Limited
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
2012
2011
$'000
$'000
6,825
(186)
6,639
56
‐
146
6,841
12,704
(26)
12,678
228
45
177
13,128
26
176
(16)
186
121
68
(163)
26
(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 $133,000 (2011: $326,000) 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.
29
29
Ambertech LimitedAnnual Report for the year ended 30 June 2012
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
2012
2011
$'000
$'000
12,255
12,952
728
12,983
(433)
12,550
861
13,813
(242)
13,571
Country of
Percentage Owned
Incorporation
2012
2011
Australia
Australia
100%
100%
Australia
New Zealand
100%
100%
100%
100%
30
30
Annual Report for the year ended 30 June 2012Ambertech Limited
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
Accumulated depreciation
Net carrying amount
2012
$'000
2011
$'000
2012
$'000
2011
$'000
2012
$'000
2011
$'000
Economic Entity
Plant and equipment
Furniture and fittings
Leasehold improvements
Leased plant and equipment
Total plant and equipment
1,258
482
1,345
169
3,254
1,743
392
768
10
(1,004)
(232)
(33)
(16)
(1,451)
(320)
(752)
(10)
2,913
(1,285)
(2,533)
254
250
1,312
153
1,969
292
72
16
‐
380
Reconciliation of carrying amounts:
2012
Economic Entity
Balance at the beginning of the year
Additions
Disposals
Depreciation and amortisation expense
Carrying amount at the end of the year
2011
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
improvements
$'000
292
85
‐
(123)
254
72
210
(3)
(29)
250
16
1,330
‐
(34)
1,312
Plant and
equipment
$'000
Furniture and
fittings
$'000
Leasehold
improvements
$'000
Leased
plant and
equipment
$'000
‐
160
‐
(7)
153
Leased
plant and
equipment
$'000
368
65
(2)
(139)
292
93
5
‐
(26)
72
70
12
‐
(66)
16
‐
‐
‐
‐
‐
Total
$'000
380
1,785
(3)
(193)
1,969
Total
$'000
531
82
(2)
(231)
380
31
31
Ambertech LimitedAnnual Report for the year ended 30 June 2012
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11: INTANGIBLE ASSETS
Non‐Current
Goodwill at cost (a)
Less impairment
Website at cost (b)
Less accumulated amortisation
(a) Goodwill
(i) Impairment tests for goodwill
Economic Entity
2012
2011
$'000
$'000
2,970
(2,970)
‐
138
(93)
45
45
2,970
‐
2,970
125
(41)
84
3,054
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:
2012
Lifestyle Entertainment
Professional
New Zealand
2011
Lifestyle Entertainment
Professional
New Zealand
Australia New Zealand
$'000
$'000
Total
$'000
‐
‐
‐
‐
1,963
963
‐
2,926
‐
‐
‐
‐
‐
‐
44
44
‐
‐
‐
‐
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
Growth Rate
2012
2011
Discount Rate
2012
2011
Lifestyle Entertainment
Professional
New Zealand
4.1%
3.8%
3.0%
3.0%
3.0%
3.0%
12.2%
12.2%
12.2%
11.3%
11.3%
11.3%
The growth rates applied in the cash flow projections represent management's best estimate of likely
economic conditions for the forecast periods beyond the current Board approved budget.
32
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Annual Report for the year ended 30 June 2012Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11: INTANGIBLE ASSETS (continued)
Non‐Current
(iii) Impact of possible changes in key assumptions
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 11.32%
and 13.05% (2011: 10.46% and 12.10%) were used for this purpose.
Accordingly, goodwill of $2,970,000 has been impaired and is reflected in the Statement of Comprehensive
Income.
Reconciliation of written down values:
Opening balance at 1 July 2011
Additions
Impairment
Amortisation expense
Closing balance at 30 June 2012
Goodwill
$'000
Website
$'000
Total
$'000
2,970
‐
(2,970)
‐
‐
84
13
‐
(52)
45
3,054
13
(2,970)
(52)
45
NOTE 12: TRADE AND OTHER PAYABLES
Current
Trade accounts payable
Other accounts payable
Derivative financial instruments ‐ forward exchange contracts
Amounts payable in foreign currencies:
Trade accounts payable:
‐ US Dollars
‐ British Pounds
‐ Euro
‐ Swiss Francs
‐ New Zealand Dollars
‐
Japanese Yen
Economic Entity
2012
2011
$'000
$'000
2,990
1,831
18
4,839
1,201
84
667
205
155
10
2,322
7,320
2,173
‐
9,493
1,398
375
79
185
140
56
2,233
33
33
Ambertech LimitedAnnual Report for the year ended 30 June 2012
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 13: OTHER FINANCIAL LIABILITIES
Current
Bills payable (a)
Lease Liability (b)
Non Current
Lease Liability (b)
Economic Entity
2012
$'000
2011
$'000
3,400
27
3,427
3,000
‐
3,000
121
‐
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 part of a multi‐option borrowing facility that includes flexible overdraft and commercial bill
components. The economic entity breached covenants in relation to the facility during the year and as such is
subject to monthly reporting to its lenders. Subsequent to year end, the facility was renewed with amended
covenants in place. The facility has an expiry date 30 November 2012.
The facility is secured by a charge over the assets of Amber Technology Limited. Guarantees are in place to a limit
of $4,800,000 (2011:$6,500,000). The value of assets at balance date is $26,462,000 (2011: $32,952,000).
(b) Lease liability
The lease liabilities are effectively secured as the rights to the leased assets, recognised in the statement of financial
position, revert to the lessor in the event of default.
NOTE 14: PROVISIONS
Current
Service warranty
Lease make good
Employee benefits
Non Current
Employee benefits
244
‐
666
910
801
801
244
210
674
1,128
804
804
(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) Movements in provisions
Movements in provisions, other than employee benefits are set out below:
Opening balance at 1 July 2011
Additional provision recognised
Reductions resulting from payments
Closing balance at 30 June 2012
34
34
Service
warranty
$'000
Lease
make good
$'000
Total
$'000
244
237
(237)
244
210
‐
(210)
‐
454
237
(447)
244
Annual Report for the year ended 30 June 2012Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15: SHARE CAPITAL
Economic Entity
2012
Shares
2011
Shares
Economic Entity
2012
2011
$'000
$'000
Ordinary Shares fully paid (no par value)
30,573,181
30,573,181
11,138
11,138
Details
Balance 30 June 2011
Shares bought back
Balance 30 June 2012
No of shares
30,573,181
‐
30,573,181
$'000
11,138
‐
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 2012 the company bought back nil shares
(2011: 25,000) shares.
NOTE 16: RESERVES
Foreign currency translation reserve (a)
Share based payments reserve (b)
Economic Entity
2012
2011
$'000
$'000
(132)
14
(118)
(144)
28
(116)
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
Later than 5 years
Minimum lease payments
867
5,011
8,124
14,002
986
342
‐
1,328
The Warriewood property lease is a non‐cancellable lease ending on 13 January 2023, 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 at 3.75% per annum.
35
35
Ambertech LimitedAnnual Report for the year ended 30 June 2012
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
2012
$'000
2011
$'000
685
685
540
540
No material losses are anticipated in respect of any of the above contingent liabilities.
NOTE 19: EVENTS SUBSEQUENT TO REPORTING DATE
On 25 September 2012, the economic entity announced that it had signed a significant contract in the order of
$4,000,000 to be completed during the 2012‐13 financial year.
Apart from the above, there are no matters that have arisen since the end of financial year that have significantly
affected, or may significantly affect, the 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
Transactions with related parties
The following transactions occurred with related parties:
‐ Payment for services from associate
‐
Payment for on‐line marketing consulting services (director‐related entity of
Thomas Amos and Edwin Goodwin)
Trade payables for on‐line marketing consulting services (director‐related entity of
Thomas Amos and Edwin Goodwin)
‐
Economic Entity
2012
$
2011
$
1,448,640
1,292,931
102,855
104,364
3,827
1,555,323
11,139
1,408,434
50,540
60,000
42,000
6,000
98,540
‐
‐
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.
36
36
Annual Report for the year ended 30 June 2012Ambertech Limited
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, 125,000 options lapsed (2011: 200,000) and no options were forfeited (2011: 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
2012
2011
225,000
425,000
100,000
100,000
225,000
225,000
Date
Granted
Exercise Period
Start
Finish
Exercise
Price
2012
7/12/2004
7/12/2004
30/09/2006
30/09/2007
30/09/2011
30/09/2012
$1.35
$1.35
Weighted average 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
$1.20
$1.20
$1.20
$1.20
$1.35
$1.35
Weighted average exercise price
Balance at
start of
year
Lapsed/
Forfeited
during
year
Balance at
end of
year
Exercisable
at end
of year
125,000
100,000
225,000
$1.35
125,000
25,000
25,000
25,000
125,000
100,000
425,000
$1.28
(125,000)
‐
(125,000)
$1.35
(125,000)
(25,000)
(25,000)
(25,000)
‐
‐
(200,000)
$1.20
‐
100,000
100,000
$1.35
‐
‐
‐
‐
125,000
100,000
225,000
$1.35
‐
100,000
100,000
$1.35
‐
‐
‐
‐
125,000
100,000
225,000
$1.35
The weighted average remaining contractual life of share options outstanding at the end of the period was 0.25 years
(2011: 0.70 years).
37
37
Ambertech LimitedAnnual Report for the year ended 30 June 2012
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
19,516
210
19,726
57
(963)
(906)
29,342
‐
29,342
(1,068)
(1,963)
(3,031)
2,497
‐
2,497
87
(44)
43
6,407
13,835
1,295
2,234
2,399
378
‐
(210)
(210)
‐
‐
‐
‐
‐
‐
‐
51,355
‐
51,355
(924)
(2,970)
(3,894)
(967)
(4,861)
(386)
(5,247)
554
(4,693)
21,537
3,924
25,461
5,011
5,145
10,156
1,798
1,798
245
245
Acquisition of non current segment assets
717
1,075
Depreciation and amortisation of segment
assets
140
93
38
38
6
12
‐
‐
38
Professional
Lifestyle Entertainment
New Zealand
(b) Segment information
2012
Revenue
‐
Total segment revenue
Inter‐segment revenue
‐
Revenue from external customers
Result
Result
‐ Underlying EBIT
Impairment charge
‐
‐ Segment EBIT
‐ Unallocated / corporate result
‐ EBIT
‐ Net interest and finance costs
‐ Loss before income tax
Income tax benefit
‐
‐ Loss for the year
Assets
‐ Segment Assets
‐ Unallocated/corporate assets
‐ Total assets
Liabilities
‐
Segment Liabilities
‐ Unallocated/corporate liabilities
‐
Total liabilities
Other
Annual Report for the year ended 30 June 2012Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 22: SEGMENT REPORTING (continued)
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
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
846
306
(164)
12,099
16,644
1,271
6,653
2,879
278
‐
Acquisition of non current segment assets
81
122
‐
Depreciation and amortisation of segment
assets
105
158
4
9
39
‐
‐
‐
‐
‐
988
(389)
599
(441)
158
(32)
126
30,014
4,445
34,459
9,810
4,667
14,477
207
207
272
272
39
Ambertech LimitedAnnual Report for the year ended 30 June 2012
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
2012
$'000
2011
$'000
Carrying Amount of
Segment Assets
2012
$'000
2011
$'000
Acquisition of Non‐
Current Assets
2012
$'000
2011
$'000
Geographical Location
‐ Australia
‐ New Zealand
(d) Other segment information
(i) Accounting Policies
48,858
2,497
51,355
64,623
2,060
66,683
20,242
1,295
21,537
28,743
1,271
30,014
1,792
6
1,798
204
3
207
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 and goodwill. 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.
40
40
Annual Report for the year ended 30 June 2012Ambertech Limited
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
(Loss) / Profit for the year
Depreciation and amortisation
Impairment of goodwill
Net loss on disposal of plant and equipment
Foreign exchange (gains) / losses
Non‐cash share based payments
Changes in operating assets and liabilities
Decrease/(Increase) in trade and other receivables
Decrease in inventories
Decrease in tax receivable
(Decrease)/Increase in payables
Increase in lease liabilities
(Decrease)/Increase in provisions
(Increase) 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
2012
2011
$'000
$'000
3
2,492
2,495
(4,693)
245
2,970
3
(19)
4
6,291
1,032
311
(4,756)
149
(221)
(556)
760
3
3,131
3,134
126
272
‐
1
57
12
(5,344)
2,480
368
4,173
‐
160
(182)
2,123
41
41
Ambertech LimitedAnnual Report for the year ended 30 June 2012
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.
42
42
Annual Report for the year ended 30 June 2012Ambertech Limited 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
2012
2011
$'000
$'000
3,156
2,347
331
805
6,639
186
6,825
8,530
3,571
442
135
12,678
26
12,704
The economic entity does not have other receivables which are past due (2011: 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
2012
Trade and other payables
Commercial Bills
Lease Liability
Economic Entity
2011
Trade and other payables
Commercial Bills
Lease Liability
Contractural Cash Flows
Less than
3 months
$'000
3 to 6
months
$'000
6 to 12
months
$'000
More than
12 months
$'000
4,839
3,400
6
8,245
9,493
3,000
‐
12,493
7
7
‐
‐
‐
‐
‐
‐
14
14
‐
‐
‐
‐
‐
‐
‐
‐
121
121
‐
‐
‐
‐
Total
$'000
4,839
3,400
148
8,387
9,493
3,000
‐
12,493
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.
43
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Ambertech LimitedAnnual Report for the year ended 30 June 2012
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 4 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
Sell Australian dollars
Average exchange rates
2012
$'000
2011
$'000
2012
2011
2,359
515
1,903
‐
0.9737
0.9719
1.0509
‐
259
‐
0.7727
‐
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%
2012
2011
$'000
$'000
Strengthening of 10%
2012
$'000
2011
$'000
183
183
48
48
(120)
(120)
(9)
(9)
44
44
Annual Report for the year ended 30 June 2012Ambertech Limited
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:
Note
Weighted average
interest rate
2012
%
2011
%
Balance
2012
$'000
2011
$'000
Commercial Bills
13
6.54%
6.19%
3,400
3,000
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 2012, with all other variables remaining constant:
Increase of 1% of average
interest rate
Decrease of 1% of average
interest rate
2012
$'000
2011
$'000
2012
$'000
2011
$'000
(33)
(33)
(44)
(44)
33
33
44
44
Impact on profit
Impact on equity
Net Fair Values
The net fair values of assets and liabilities approximates their carrying values. No financial assets or liabilities are
readily traded on organised markets.
Capital Management
The Board's aim is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. The Board seeks to maintain a balance between the higher returns that
might be possible with higher levels of borrowings and the advantages and security afforded by a sound capital
position.
Total capital is defined as shareholders' equity. The Board monitors the return on capital, which is defined as net
operating income divided by total shareholders' equity. The Board also establishes a dividend payout policy which is
targeted as being greater than 50% of earnings, subject to a number of factors, including the capital expenditure
requirements and the company's financial and taxation position. Dividend payout for the year ended 30 June 2012 is nil
(2011: 242.8%).
There were no changes to the economic entity's approach to capital management during the financial year.
45
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Ambertech LimitedAnnual Report for the year ended 30 June 2012
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 25: EARNINGS PER SHARE
Basic earnings per share (cents)
Weighted average number of ordinary shares (number)
Earnings used to calculate basic earnings per share ($)
Diluted earnings per share (cents)
Weighted average number of ordinary shares (number)
Earnings used to calculate diluted earnings per share ($)
Economic Entity
2012
2011
(15.4)
0.4
30,573,181
30,590,832
(4,693,000)
126,000
(15.4)
0.4
30,573,181
30,590,832
(4,693,000)
126,000
(a) The effect of the Executive Share Option Plan options on issue is not considered dilutionary because based on
conditions at the date of this report, it is considered unlikely that these options would be converted into ordinary
shares.
NOTE 26: DIVIDEND FRANKING CREDITS
In respect of dividends first recognised as a liability during the period or paid in the period without
previously being recognised as a liability
Dividends that have been fully franked:
Amount in aggregate ($'000)
Cents per share
Tax rate
Amount of franking credits available for subsequent reporting periods ($'000)
‐
‐
30%
6,146
153
0.5
30%
6,139
46
46
Annual Report for the year ended 30 June 2012Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Economic Entity
2012
2011
$
$
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
BDO East Coast Partnership (formerly PKF)
Audit and review of financial reports, and other work under the Corporations Act
2001.
114,560
124,560
Other practices ‐ PKF NZ
Audit or review of financial reports of subsidiary
Total remuneration for audit services
Non‐audit services
BDO East Coast Partnership (formerly PKF)
10,000
10,000
124,560
134,560
Tax compliance services, including review of company income tax returns
Total remuneration for non‐audit services
19,830
19,830
18,035
18,035
It is the economic entity's policy to employ BDO on assignments additional to their statutory audit duties where
BDO's expertise and experience with the economic entity are important. These assignments are principally tax
advice or where BDO is awarded assignments on a competitive basis.
47
47
Ambertech LimitedAnnual Report for the year ended 30 June 2012
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
Profit / (Loss) of the parent entity
Total comprehensive income of the parent entity
Parent Entity
2012
$'000
2011
$'000
11,027
15,584
1,462
1,462
11,009
15,567
1,462
1,462
11,138
11,138
14
2,970
13
13
28
2,939
(2)
(2)
48
48
Annual Report for the year ended 30 June 2012Ambertech Limited
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' DECLARATION
The directors of the company declare that:
1.
The financial statements, comprising of the statement of comprehensive income, statement of financial
position, statement of cash flows, statement of changes in equity and accompanying notes, are in
accordance with the Corporations Act 2001 and:
(a)
comply with Accounting Standards and the Corporations Regulations 2001 ; and
(b)
give a true and fair view of the consolidated entity's financial position as at 30 June 2012 and of its
performance for the year ended on that date.
The company has included in the notes to the financial statements an explicit and unreserved statement of
compliance with International Financial Reporting Standards.
In the directors' opinion, there are reasonable grounds to believe that the company will be able to pay its
debts as and when they become due and payable.
The directors have been given the declarations by the chief executive officer and chief financial officer
required by Section 295A.
2.
3.
4.
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf
of the directors by:
P F Wallace
ll
Director
P A Amos
Director
Dated this 27th day of September 2012.
Sydney
49
49
49
Ambertech LimitedAnnual Report for the year ended 30 June 2012 50
Annual Report for the year ended 30 June 2012Ambertech Limited Shareholder Information
XIX
Ambertech LimitedAnnual Report for the year ended 30 June 2012 Shareholder Information
a.
Distribution of equity security by size of holding:
1
1,001
5,001
10,001
100,001
Total
-
-
-
-
1,000
5,000
10,000
100,000
and
over
Number of
shareholders
Number of
Ordinary Shares
% of total
capital
78
92
50
73
23
70,400
329,399
432,699
2,398,282
27,342,401
0.23
1.08
1.42
7.84
89.43
316
30,573,181
100.00
The number of security investors holding less than a marketable parcel of 2,273 securities is 98 and they hold 105,448 securities.
b.
Equity Security Holders:
The twenty largest shareholders as at 10 October 2012 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
Talon A Pty Limited (A K Fund 1)
Crowton Pty Ltd (Amos Super Fund)
Howbay Pty Ltd
Wavelink Systems Pty Ltd
Wavelink Systems Pty Ltd (Employee Superannuation Fund)
Nanyang Australia Limited
Appwam Pty Limited
Wygrin Pty Ltd
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
Mr David Le Cornu & Mrs Betty Le Cornu
Mr Stephen Rodney Hariono
Realcal Pty Ltd
Wallace Capital Pty Ltd
Velkov Funds Management Limited
Mr Edward Dally & Mrs Selina Dally
Source: Link Market Services
XX
Number of
shares
4,245,667
3,231,681
2,883,556
2,784,625
2,650,000
2,000,464
1,950,025
1,507,556
1,488,270
1,082,162
993,250
413,045
357,599
333,261
220,000
219,270
200,000
152,600
150,000
145,000
% of total
capital
13.89
10.57
9.43
9.11
8.67
6.54
6.38
4.93
4.87
3.54
3.25
1.35
1.17
1.09
0.72
0.72
0.65
0.50
0.49
0.47
27,008,031
88.34
Annual Report for the year ended 30 June 2012Ambertech Limited 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
Accretion Investment Management
Wavelink Systems Pty Ltd
Crowton Pty Limited
Wygrin Pty Ltd
Howbay Pty Ltd
Appwam Pty Limited
d. On-Market Buy Back:
Number of
shares
6,246,131
5,484,625
4,313,843
2,995,826
2,883,556
1,950,025
% of total
capital
20.43
17.94
14.11
9.80
9.43
6.38
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 10 October 2012.
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 2012 no 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 2012Ambertech Limited Notes
XXII
Annual Report for the year ended 30 June 2012Ambertech Limited Notes
XXIII
Ambertech LimitedAnnual Report for the year ended 30 June 2012 Corporate Directory
XXIV
Ambertech LimitedAnnual Report for the year ended 30 June 2012 Mission Statement
Unit 1, 2 Daydream Street
Warriewood NSW 2102
Tel: 02 9998 7600
Fax: 02 9999 0770
BDO East Coast Partnership
Annual Report
Annual Report for the year ended
30 June 2012
Ambertech Limited
ACN 079 080 158
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PO Box 955 Mona Vale
NSW 1660 Australia
Unit 1, 2 Daydream Street
Warriewood NSW 2102
Email: info@ambertech.com.au
Phone: 02 9998 7600
Fax: 02 9999 0770
www.ambertech.com.au