Source. Supply. Support.
About Us
Recognised experts at reaching and supporting the
entertainment, communications & technology markets
throughout Australasia, Ambertech is one of Australia's
largest and most respected distributors of high
technology equipment solutions.
Ambertech has been delivering some of the world's most
innovative & smartest electronics to the technically
thirsty Australian & New Zealand markets since 1987.
Our customers enthusiastically embrace new
technology well in advance of many other countries and
Ambertech provides the bridge between state-of-the-
art manufacturers and customers who demand the best
available.
With offices & representatives in all major capital
cities, supported by a comprehensive national network
of authorised dealers & service agents, Ambertech
provides an efficient distribution and support system
across a territory larger than the USA with just one
tenth of the population. This wealthy, intelligent and
demanding audience expects the best the world has to
offer and the Ambertech team has built a well-deserved
reputation for delivering exactly that.
Vision
From critical professional applications through to
complete home lifestyle environments, the past 28 years
have seen audio & video technologies evolve & merge at
an extraordinary pace. Throughout this amazing
technological revolution, Ambertech has constantly
demonstrated an ability to predict future trends and
constantly stay ahead of the curve in providing our
diverse customer base with the tools they need as soon
as they require them.
The Ambertech team is well aware that our clients
expect only the very latest and best from us so we
constantly scour the world to stay abreast of possible
future market directions and the technology to satisfy
them. Our success over these past decades has been
built on a formula of offering only the best & most
innovative technology to our clients and backing it up
with unmatched after-sales support.
1
Contents
3 Chairman’s & Managing Director’s Review
16 Financial Report
4 Business Segment Update
65Shareholder Information
9 Our Brands
67 Corporate Directory
14 Corporate Governance Statement
2
Dear Shareholders
On behalf of your Board and executive management we would like to present you with your 2014 Annual Report.
The most recent results of the company continue to reflect the many challenges that have presented themselves to the
Board and management of Ambertech in recent times. Whilst the 2014 results were an improvement over the prior year,
your Board understands the need to return to a profit making business in the near term. Along with the senior
management of the company, the Board is continuing to implement a strategy for building a more robust structure for
future business.
Of major importance has been our recent announcement of new funding arrangements for the Company. The new facility
provides Ambertech with greater flexibility to undertake new projects and to fund potential growth opportunities. This
flexibility will assist the company in its current turnaround phase.
The board of Ambertech are, collectively, substantial shareholders in Ambertech and their interests continue to be aligned
with the interests of all shareholders. The Board would like to thank their skilled and dedicated management team and
staff for their support, and believe they will be integral in achieving the strategic objectives of Ambertech in the future.
Peter Wallace
Chairman
Peter Amos
Managing Director
3
Lifestyle Entertainment Segment
During the 2014 financial year the Lifestyle Segment
continued to lay a fresh foundation for growth with
performing brands and products, a performing team and
performing customer base. We have streamlined our
business and focussed on core, complimentary brands
which added value to every opportunity placed before us.
For the most part we enjoyed growth in many of our
categories, market dominance in others but unfortunately
tough conditions in one of our major product lines
brought upon mostly by quality control and component
failures. This aforementioned issue caused undue angst
and resulted in an overall challenging year. Throughout
the whole year our team dedicated their efforts into
continuing our core values of integrity in business.
Lenco PlayLink 4
During the year, Onkyo announced their new range of
AV receivers will incorporate the new Dolby Atmos
technology. This is a first to market exclusive and should
see significant growth for the brand and capture valuable
shelf space into FY2015.
Integra enjoyed growth during the year and continues to
garner great support from the custom installation
industry due to its exclusivity in this market segment.
Similar to Onkyo, Integra has announced the inclusion of
Dolby Atmos into the new range of AV receivers. This
inclusion should cement our position as the preferred AV
receiver for custom installations.
Accent Acoustics speaker pack
The Custom Installation industry, once again, recognised
many of our brands via a respected industry magazine’s 2nd
annual Most Popular (brands) Awards. This year we took out
10 x 1st places, 2 x 2nd, 4 x 3rd and 1 x 4th places, including
the coveted Distributor of the Year Award.
These awards are voted on by industry peers and integrators
and show a true respect for the brands we represent. We are
very proud of this achievement and our team that drives the
brands.
Sonance adjustable sound bar – perfectly matches the width of your TV
4
Sonance has again enjoyed significant growth during the
financial year and dominates the categories the brand is
associated with. One For All’s Universal Remote Controls
and Indoor Antenna’s continue to grow and again broke new
sales records for the company.
Of our newer brands, Middle Atlantic performed well above
our expectations and showed pleasing growth. We expect
this to continue as the brand becomes more entrenched into
the Amber DNA. Digital Projection will edge us back into
the lucrative high bright projector business which has been
out of our reach for the past couple of years.
Middle Atlantic RCS pre-configured rack series
HighLite 10k/12k Laser Projector by Digital Projection
And lastly, we took all the years of Amber’s intelligence
and equity within the markets we have served over many
years and gave birth to our very first iteration of a home
theatre speaker package.
The Accent Acoustics Hide & Seek was launched late in
the FY with the high expectation of proud parents. We
will now nurture its growth and pool our resources to
make sure of its success.
As we look to the future, our industry has many
challenges which we have no option but to face head on.
We continue to work with the utmost professionalism
and integrity and expect nothing but the best for our
customers and our suppliers.
The dedication of a fantastic, loyal, hardworking team at Amber will continue to steer the ship in the right direction and
strive for success.
5
Professional Segment
The Professional Products Group performance for the year
provided consistent performance across the majority of our
brands.
The Live Sound and Performance sector continues to show
growth and installation projects that have been delayed
have now commenced roll out.
Our market share in the Musical Instrument Reseller
market continues to provide consistent growth with the
addition of new innovative models throughout our brand
portfolio.
In the Broadcast sector we have had pleasing results due to
technology changes being implemented by TV Networks –
these projects are of high capital value and will continue
over the coming financial year.
Award winning Streamcaster 3822 MIMO Radio by Silvus Technologies
Brainstorm is a range of 3D effects and virtual set products,
again designed to improve the delivery of broadcast
programming at a high level with reduced cost.
We also increased our sales headcount to improve our
penetration with these and other products into both
traditional post production and broadcast markets.
EVS continued to provide a strong sales engine for us, with
some key developments in market diversification including
our first EVS sale to Defence.
EVS MultiReview – slow motion and highlights
Our Broadcast/Media Systems product group continued to
diversify and consolidate its product and market spread by
adding a number of important lines to the portfolio,
including Ensemble Designs and Brainstorm.
Ensemble Designs is a range of high quality standards
converters and broadcast “toolkit” items designed to deliver
a lower price point to make the line accessible both to the
major broadcasters and to the wider post
production/events markets.
Avid ISIS 7500 – the cornerstone of 4K collaboration
6
New EVS products such as the C-Cast system, which
provides Tablet/Smartphone delivery of programming
enhancements for sports events have gained global
acceptance and stand to be excellent products moving
forward.
Examples of C-Cast in use include the Soccer World Cup
IPad application from SBS, and Nine Network’s Jump-In
application which streamed the State of Origin Rugby to
IPads around the country.
Solid State Logic Live Console
Milestone sales of Snell vision mixers were made during the
year, which lead to optimism about gaining brand
acceptance for these products in the coming months.
Globally regarded as the best vision mixers available, Snell
Kahuna systems have been difficult to sell in Australia
historically due to heavily entrenched competition and an
understandable reluctance of broadcasters to switch
technologies in this core area of their operations. However
with systems now active in country, and happy customers
driving them, we have good reason to believe that this
position may change.
The group continues to invest in promotion and market
expansion, with a busy exhibition and sales schedule across
all sectors. With bids in place for several major projects and
a number of carry-overs of postponed projects from last
year in the pipeline, we are hopeful of returning a good
result for the 2014/15 financial year.
TC HeliconPlay Acoustic
The recently introduced Silvus Radio systems are targeted
mainly at Government users, and as such purchase lead
times are long. However we have seen repeat purchases
from Defence, as well as from some other key Australian
organisations, and potential remains very high for the
product.
Telestream and AVID business continued to be excellent,
with major sales to Fox Sports and the Seven Network
being the highlights of the year. We are hoepful that further
AVID projects, delayed during the year, will now
commence roll out in the coming months.
Vinten Radamec all in one camera robotics solution
7
New Zealand Segment
The 2013/14 financial year was another challenging one for
our New Zealand operation, however we did manage some
modest growth of our key agencies.
We continues to experience growth with our Texcus
brand with improvements in our supply chain assisting to
sustain growth with our customer base.
Gefen continues to innovate and maintain its market lead
with their growing range of products. Part of the growth in
this area can be attributed to the additional effort the team
made to provide regular customer training sessions and
follow-ups.
Tecxus Alkaline AA Batteries
Our projector and screen business with Optoma and
Ambertec brands continues to perform well. In the second
half of the financial we introduced some new initiatives for
the education sector to further enhance Optoma,
Ambertec and Lumens sales.
We are also pleased to announce that during the last
quarter we were able to add Dick Smith Electronics (DSE)
to a growing list of retailers who now stock One For All
(OFA) products.
Our broadcast group had a strong contribution this year
through project work. Our pro audio group continues to
be a consistent performer. The TC Electronic Group and
Neutrik are the strongest performers in this market sector.
One For All URC1665
Our principals have some exciting new products on the horizon. We have a good pipeline of projects but as always
market conditions and finance with be the deciding factors on whether these projects progress.
During the first quarter of the new financial year we have launched our new amber.co.nz website, including an online
store to complement our existing online channels.
8
9
10
11
12
13
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 Corporate 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.
Disclose the process for evaluating the performance of
senior executives.
Outlined in the Ambertech Board Charter available
from the investor section of the Ambertech
website.
Outlined in the Corporate Governance Summary
available from the investor section of the
Ambertech website.
Disclose whether performance evaluation of senior
executives has taken place in accordance with the disclosed
process.
Performance evaluations for the 2013/14 year for the
Managing Director and CFO were completed in
September 2014.
2.1
A majority of the Board should be independent directors.
x
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
2.3
The chairperson should be an independent director.
Roles of the chairperson and the managing director should
not be exercised by the same person.
Satisfied.
Satisfied.
2.4
The Board should establish a nomination committee.
A copy of the Remuneration and Nomination
Committee 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
connection with their duties and responsibilities,
to seek independent professional advice at the
Company’s expense, subject to approval of cost by
the Chairman. Further information 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
investor section of the Ambertech website.
3.2
3.3
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.
14
3.4
4.1
4.2
Disclose in the Annual Report the proportion of women
employees in the whole organisation, in senior executive
positions and on the Board.
The Board should establish an audit committee.
Structure the audit committee so that it consists of only
non-executive directors, a majority of independent
directors, and the chairperson is independent and not the
chair of the board and has at least three members.
x
21.9% (2013: 20.9%) of Ambertech employees are
women. 14.3% (2013: 14.3%) of the senior
executives are women. There are currently no
women on the Board.
Satisfied.
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
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
requirements and to ensure accountability at senior
management level for that compliance.
Committee Charter is available from the investor
section of the Ambertech website.
Information contained in the Directors’ Report.
A copy of the Continuous Disclosure and
Communications Policy is available from the investor
section of the Ambertech 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 Ambertech website.
Use the company website to provide information, including
webcasting, press releases and shareholder information by
email.
The Board or appropriate board committee should establish
policies on risk oversight and management and disclose a
summary of those policies.
Satisfied. See the Ambertech website.
A copy of the Risk Management Policy is available
from the investor section of the Ambertech website.
The Board should require management to design, implement
and report against a risk management and control system.
Satisfied.
The Board should disclose whether it has received assurance
from the Managing Director/CFO that the declaration 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
assurance 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
8.2
8.3
Clearly distinguish the structure of non-executive director
remuneration from that of executive directors and senior
management
Information specified in the guide to Principle 8 should be
provided.
Committee charter is available from the investor
section of the Ambertech website.
Satisfied.
Information contained in the Directors’ Report.
15
For the year ended 30 June 2014
ACN 079 080 158
18 Directors’ Report
28 Auditor’s Report &
31 Statement of Profit or Loss and
Independence Declaration
Other Comprehensive Income
32 Statement of Financial
33 Statement of Changes in
34 Statement of Cash Flows
Position
Equity
35 Notes to the Financial
64 Directors’ Declaration
Statements
16
AMBERTECH LIMITED
AND CONTROLLED ENTITIES
ACN 079 080 158
FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2014
17 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 2014 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 during the whole of the financial year and up to the date of this report 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.
18 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 economic entity employed 94 full time employees as at 30 June 2014 (2013: 90 employees).
19 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 $1,000,000. This
was improved from a loss after tax of $2,212,000 in the previous period. Total revenues for the financial year
decreased by 11.3% to $48,281,000 (2013: $54,451,000), due mainly to reduced capital projects work. 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 reasonably strong and stable
financial position with the potential to expand and grow its current operations. The economic entity recorded
negative operating cash flows of $2,360,000 for the year ended 30 June 2014 in difficult trading conditions. whilst
borrowings were increased by $163,000 during the financial year, the economic entity maintained a healthy working
capital ratio.
The economic entity's working capital, being current assets less current liabilities, has decreased by $789,000 to
$8,553,000 as at 30 June 2014 (2013: $9,342,000). The net assets of the economic entity have also decreased by
$918,000 to $12,239,000 as at 30 June 2014 (2013: $13,157,000).
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 4 August 2014, the economic entity announced that management has successfully negotiated a new two year
finance facility with Bibby Financial Services. The new facility is an invoice discounting solution with approval up to
$6M and replaces the Commonwealth Bank of Australia as the primary lenders to the business.
On 16 September 2014 the Board announced that Mr R Glasson (CFO, Company Secretary) had tendered his
resignation and would be leaving the economic entity early in the 2015 calendar year. A successor is yet to be
appointed at the date of this report.
There were no other matters that have arisen since the end of the financial year that have significantly affected, or
may significantly affect the operations or state of affairs of the economic entity in future financial years.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
After a challenging 2013‐14 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 continue to progress into the
2014‐15 financial year, and the Board and management belive that the business is now well placed to take advantage
of opportunities in the market to drive future revenue and profit growth.
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.
20 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 and
its regulations. The disclosures contained within the remuneration report have been audited.
In recent years the remuneration policy of the company has had to take into account competing interests. On one hand,
shareholder returns are inadequate, while Directors, faced with their responsibilities to the Company, need to retain an
experienced, expert Board and executive management team. Directors are aware that these staff may have opportunities to
pursue their careers in less challenging environments with prospects of greater remuneration.
At the 2013 AGM, the non‐binding resolution to adopt the Remuneration Report was not approved. As this was the second
consecutive vote against the Remuneration Report, a shareholder vote on whether to hold a spill meeting was required. The
result of this vote was that this resolution was not carried and no spill meeting occurred.
The Board believes that the predominant sentiment against the resolution was general criticism of the Company and other
issues not related to executive remuneration. Whilst the Board understands the concerns expressed by shareholders, it
maintains the view that it is in the shareholders' interests that the existing executive management team is retained,
believing that they are best placed to lead the Company through its current challenges.
Consistent with this view, there have been no significant changes to the remuneration strategy employed by the Board for
the 2014 financial year. There has been no change in the remuneration of non‐executive directors since 1 January 2010.
Remuneration Strategy
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. In response to the
financial performance of the company the remuneration of non‐executive directors has remained unchanged since 1 January
2010.
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, however if paid on target these incentives would have represented approximately 20% of total salary for the
Managing Director and 15% of total salary for the CFO.
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.
As a result of the financial performance of the company, the Managing Director and CFO have foregone the entirety of their
short term incentive and KPI salary components for each of the 2011, 2012,2013 and 2014 financial years.
21 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REMUNERATION REPORT (continued)
Other Executives
Remuneration of other key executives is set by the Managing Director and Chief Financial Officer, with reference to
guidelines set 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.
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 commitment. 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.
The table below sets out the economic entity's key shareholder indicators for the past 5 financial
years:
Dividends paid (cents per share)
Closing share price at 30 June ($)
Share buy back ($'000)
2014
‐
$0.20
‐
2013
‐
$0.23
‐
2012
‐
$0.24
‐
Net (loss) / profit after tax ($'000)
(1,000)
(2,212)
(4,693)
2011
0.5
$0.31
8
126
2010
5.5
$0.38
‐
1,606
Details of Remuneration
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
Group CFO, Company Secretary
P Amos
T Amos
Group Managing Director
P Simmons
General Manager, Lifestyle Entertainment
Non‐Executive Director
R Caston
General Manager, Broadcast & Professional
E Goodwin
Non‐Executive Director
R McCleery
Managing Director, Amber New Zealand
D Swift
Non‐Executive Director
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.
On 16 September 2014 the Board announced that Mr R Glasson (CFO, Company Secretary) had tendered his
resignation and would be leaving the economic entity early in the 2015 calendar year. A successor is yet to be
appointed at the date of this report.
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.
22
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
REMUNERATION REPORT (continued)
Elements of Remuneration
2014
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
R Caston
P Simmons
R McCleery
357,799
55,046
32,111
32,111
90
477,157
192,661
182,473
169,696
126,457
671,287
‐
‐
‐
‐
‐
‐
‐
5,000
‐
‐
5,000
33,096
5,092
2,970
2,970
34,990
79,119
17,821
25,000
24,999
‐
67,820
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
390,895
60,138
35,081
35,081
35,080
556,276
210,482
212,473
194,696
126,457
744,107
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.4%
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%
(1) On 15 September 2013, a cash bonus of $5,000 was paid to Mr Caston relating to performance against KPI's. The bonus is 100% of the total
available to Mr Caston under his KPI scheme.
2013
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
R Caston
P Simmons
R McCleery
357,799
55,046
32,111
32,111
11,735
488,802
192,661
178,991
167,591
112,027
651,270
‐
‐
‐
‐
‐
‐
‐
5,000
‐
‐
5,000
32,202
4,954
2,890
2,890
23,265
66,201
17,340
19,541
21,277
‐
58,158
756
‐
‐
‐
‐
756
‐
‐
390,757
60,000
35,001
35,001
35,000
555,759
210,001
203,532
188,868
112,027
714,428
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
0.0%
2.5%
0.0%
0.0%
0.7%
0.2%
0.0%
0.0%
0.0%
0.0%
0.1%
0.0%
0.0%
0.0%
0.0%
0.0%
(1) On 14 September 2012, a cash bonus of $5,000 was paid to Mr Caston relating to performance against KPI's. The bonus is 100% of the total
available to Mr Caston under his KPI scheme.
23
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 (2013: $380,000).
Share based compensation
The company 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.
There were no options on issue to directors and key executives at the date of this report. There were no options issued during or since
the end of the financial year.
24 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.
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
236,528
4,313,843
5,484,625
2,883,556
2,995,826
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 2014:
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:
Director
P Wallace
P Amos
T Amos
E Goodwin
D Swift
Board Meetings
Attended
12
12
12
11
11
Held
12
12
12
12
12
Audit and Risk Management
Committee Meetings
Held
4
‐
‐
4
‐
Attended
4
‐
‐
4
‐
Nomination and Remuneration
Committee
Attended
2
‐
‐
‐
2
Held
2
‐
‐
‐
2
25
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) 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 are 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 28.
26 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' REPORT
INDEMNIFICATION OF OFFICERS
The company has indemnified the directors and executives of the company for costs incurred, in their capacity as a
director or executive, for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the company paid a premium in respect of a contract to insure the directors and executives
of the company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance
prohibits disclosure of the nature of liability and the amount of the premium.
ROUNDING
The company is an entity to which Class Order 98/100 applies and, in accordance with this class order, amounts in this
report and the financial statements have been rounded off to the nearest thousand dollars unless otherwise indicated.
Signed in accordance with a resolution of directors.
Director:
P F Wallace
P A Amos
Dated this 26th day of September 2014.
Sydney
27 Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
DECLARATION OF INDEPENDENCE BY ARTHUR MILNER TO THE DIRECTORS OF AMBERTECH LIMITED
As lead auditor of Ambertech Limited for the year ended 30 June 2014, I declare that, to the best of
my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Ambertech Limited and the entities it controlled during the period.
Arthur Milner
Partner
BDO East Coast Partnership
Sydney, 26 September 2014
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than
Tasmania.
28
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
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 2014, the consolidated statement of profit or
loss and other comprehensive income, the consolidated statement of changes in equity and the
consolidated statement of cash flows for the year then ended, 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.
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 2(a), the directors also state, in accordance with Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements comply with International
Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our
audit in accordance with Australian Auditing Standards. Those standards require that we comply with
relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain
reasonable assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial report. The procedures selected depend on the auditor’s judgement, including the
assessment of the risks of material misstatement of the financial report, whether due to fraud or error.
In making those risk assessments, the auditor considers internal control relevant to the 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.
BDO East Coast Partnership ABN 83 236 985 726 is a member of a national association of independent entities which are all members of BDO (Australia) Ltd
ABN 77 050 110 275, an Australian company limited by guarantee. BDO East Coast Partnership and BDO (Australia) Ltd are members of BDO International
Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member firms. Liability limited by a scheme
approved under Professional Standards Legislation (other than for the acts or omissions of financial services licensees) in each State or Territory other than
Tasmania.
29
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.
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 2014 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 2(a).
Report on the Remuneration Report
We have audited the Remuneration Report included in pages 21 to 25 of the directors’ report for the
year ended 30 June 2014. 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 2014
complies with section 300A of the Corporations Act 2001.
BDO East Coast Partnership
Arthur Milner
Partner
Sydney, 26 September 2014
2
30
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2014
Revenue
Cost of sales
Gross profit
Other income
Employee benefits expense
Distribution costs
Marketing costs
Premises costs
Depreciation and amortisation expenses
Finance costs
Travel costs
Other expenses
(Loss) before income tax
Income tax benefit
(Loss) for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign operations
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Economic Entity
Note
2014
$'000
2013
$'000
3
4
3
4
4
4
5
48,281
(34,095)
14,186
144
(8,512)
(1,568)
(1,195)
(1,895)
(285)
(459)
(576)
(840)
(1,000)
‐
(1,000)
54,451
(41,828)
12,623
12
(9,060)
(1,328)
(1,348)
(1,926)
(350)
(424)
(555)
(849)
(3,205)
993
(2,212)
82
82
63
63
(918)
(2,149)
Earnings per share
Basic earnings per share (cents)
Diluted earnings per share (cents)
25
25
(3.3)
(3.3)
(7.2)
(7.2)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the attached notes.
31
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014
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
2014
$'000
2013
$'000
23
6
7
8
10
11
5
12
13
14
14
13
5
15
16
511
8,242
11
13,760
22,524
1,575
25
2,387
3,987
2,843
8,935
10
12,835
24,623
1,794
40
2,421
4,255
26,511
28,878
8,258
4,007
1,706
13,971
240
58
3
301
14,272
12,239
11,138
13
1,088
12,239
9,983
3,844
1,454
15,281
299
91
50
440
15,721
13,157
11,138
(69)
2,088
13,157
The consolidated statement of financial position is to be read in conjuntion with the attached notes.
32
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2014
Share Capital
$'000
Option
Reserve
$'000
Foreign
Currency
Translation
Reserve
$'000
Retained
Earnings
$'000
Total Equity
$'000
Economic Entity
Balance as at 30 June 2012
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with equity holders:
Costs of share based payments
Total transactions with equity holders
11,138
‐
‐
‐
‐
‐
Balance as at 30 June 2013
11,138
Loss for the year
Other comprehensive income for the year
Total comprehensive income for the year
Transactions with equity holders:
Costs of share based payments
Total transactions with equity holders
‐
‐
‐
‐
‐
Balance as at 30 June 2014
11,138
14
‐
‐
‐
(14)
(14)
‐
‐
‐
‐
‐
‐
‐
(132)
‐
63
4,285
(2,212)
‐
15,305
(2,212)
63
63
(2,212)
(2,149)
‐
‐
15
15
1
1
(69)
2,088
13,157
82
82
‐
‐
‐
(1,000)
‐
(1,000)
‐
‐
(1,000)
82
(918)
‐
‐
13
1,088
12,239
The consolidated statement of changes in equity is to be read in conjunction with the attached notes.
33
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2014
Economic Entity
Note
2014
$'000
2013
$'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 refunded
Goods and services tax remitted
Net cash (used in)/ 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
Proceeds from borrowings
Repayment of borrowings
Net cash provided by 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
53,775
(52,140)
25
(458)
‐
(3,562)
(2,360)
(50)
‐
(50)
133
(33)
100
(2,310)
2,843
(22)
511
57,766
(53,221)
34
(424)
124
(4,131)
148
(137)
(35)
(172)
404
(30)
374
350
2,495
(2)
2,843
The consolidated statement of cash flows is to be read in conjunction with the attached notes.
34
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1: INTRODUCTION
The financial statements cover the economic 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 Limited 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 26 September 2014 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. These general purpose financial
statements have been prepared in accordance with Australian Accounting Standards and Interpretations issued by
the Australian Accounting Standards Board (AASB) and the Corporations Act 2001, as appropriate for profit
oriented entities. The financial statements have been prepared under the historic cost convention.
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
During the year the economic entity breached its loan covenants in relation to its financing facilities that were to
expire on 30 November 2014. Subsequent to the balance date, on 30 July 2014 the economic entity entered into a
new finance facility with Bibby Financial Services. This new finance facility is an invoice discounting solution with
approval up to $6M and replaces the Commonwealth Bank of Australia as the primary lenders to the business.
The new facility has a two year term.
After taking into account all of the available information, 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.
35 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, revised or amending Accounting Standards and Interpretations adopted
The economic entity has adopted all of the new, revised or amending Accounting Standards and interpretations
issued by the Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new, revised or amending Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
Any significant impact on the accounting policies of the economic entity from the adoption of these Accounting
Standards and Interpretations are disclosed below. The adoption of these Accounting Standards and
Interpretations did not have any significant impact on the financial performance or position of the economic entity.
The following Accounting Standards and Interpretations are most relevant to the economic entity:
(i)
AASB 13 Fair Value Measurement and AASB 2011‐8 Amendments to Australian Accounting Standards arising
from AASB 13.
The economic entity has applied AASB 13 and its consequential amendments from 1 July 2013. The standard
provides a single robust measurement framework, with clear measurement objectives, for measuring fair
value using the 'exit price' and provides guidance on measuring fiar value when a market becomes less active.
The 'highest' and best use' approach is used to measure non‐financial assets where liabilities are based on
transfer value. The standard requires increased disclosures where fair value is used.
(ii)
(iii)
AASB 119 Employee Benefits (September 2011) and AASB 2011‐10 Amendments to Australian Accounting
Standards arising from AASB 119
The economic entity has applied AASB 119 and its consequential amendments from 1 July 2013. The standard
eliminates the corridor approach for the deferral of gains and losses; streamlines the presentation of changes
in assets and liabilities arising from defined benefit plans, including requiring remeasurements to be
presented in other comprehensive income; and enhances the disclosure requirements for defined benefit
plans. The standard also changed the definition of short‐term employee benefits, from 'due to' to 'expected
to' be settled within 12 months. Annual leave that is not expected to be wholly settled within 12 months is
now discounted allowing for expected salary levels in the future period when the leave is expected to be
taken.
AASB 2012‐5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009‐
2011 Cycle
The economic entity has applied AASB 2012‐5 from 1 July 2013. The amendments affect five Australian
Accounting Standards as follows: Confirmation that repeat application of AASB 1 'First‐time Adoption of
Australian Accounting Standards' is permitted; Clarification of borrowing cost exemption in AASB 1;
Clarification of the comparative information requirements when an entity provides an optional third column
or is required to present a third statement of financial position in accordance with AASB 101 'Presentation of
Financial Statements'; Clarification that servicing of equipment is covered by AASB 116 'Property, Plant and
Equipment', if such equipment is used for more than one period; clarification that the tax effect of
distributions to holders of equity instruments and equity transaction costs in AASB 132 'Financial Instruments:
Presentation' should be accounted for in accordance with AASB 112 'Income Taxes'; and clarification of the
financial reporting requirements in AASB 134 'Interim Financial Reporting' and the disclosure requirements of
segment assets and liabilities.
(iv)
AASB 2011‐4 Amendments to Australian Accounting Standards to Remove Individual Key Management
Personnel Disclosure Requirement
The economic entity has applied 2011‐4 from 1 July 2013, which amends AASB 124 'Related Party Disclosures'
by removing the disclosure requirements for individual key management personnel ('KMP'). Corporations and
Related Legislation Amendment Regulations 2013 and Corporations and Australian Securities and
Investments Commission Amendment Regulation 2013 (No.1) now specify the KMP disclosure requirements
to be included within the directors' report.
36
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
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
2014, but have not been applied in preparing these financial statements.
(i)
(ii)
(iii)
AASB 9 Financial Instruments and its consequential amendments
This standard and its consequential amendments are applicable to annual reporting periods beginning on or
after 1 January 2017 and completes phases I and III of the IASB's project to replace IAS 39 (AASB 139)
'Financial Instruments: Recognition and Measurement'. This standard introduces new classification and
measurement models for financial assets, using a single approach to determine whether a financial asset is
measured at amortised cost or fair value. The accounting for financial liabilities continues to be classified and
measured in accordance with AASB 139, with one exception, being that the portion of a change of fair value
relating to the entity's own credit risk is to be presented in other comprehensive income unless it would create
an accounting mismatch. Chapter 6 'Hedge Accounting' supersedes the general hedge accounting
requirements in AASB 139 and provides a new simpler approach to hedge accounting that is intended to more
closely align with risk management activities undertaken by entities when hedging financial and non‐financial
risks. The consolidated entity will adopt this standard and the amendments from 1 July 2017 but the impact of
its adoption is yet to be assessed by the consolidated entity.
AASB 2012‐3 Amendments to Australian Accounting Standards ‐ Offsetting Financial Assets and Financial
Liabilities
The amendments are applicable to annual reporting periods beginning on or after 1 January 2014. The
amendments add application guidance to address inconsistencies in the application of the offsetting criteria
in AASB 132 'Financial Instruments: Presentation', by clarifying the meaning of 'currently has a legally
enforceable right of set‐off'; and clarifies that some gross settlement systems may be considered to be
equivalent to net settlement. The adoption of the amendments from 1 July 2014 will not have a material
impact on the consolidated entity.
AASB 2013‐3 Amendments to AASB 136 ‐ Recoverable Amount Disclosures for Non‐Financial Assets
These amendments are applicable to annual reporting periods beginning on or after 1 January 2014. The
disclosure requirements of AASB 136 'Impairment of Assets' have been enhanced to require additional
information about the fair value measurement when the recoverable amount of impaired assets is based on
fair value less costs of disposals. Additionally, if measured using a present value technique, the discount rate
is required to be disclosed. The adoption of these amendments from 1 July 2014 may increase the disclosures
by the consolidated entity.
(iv) AASB 2013‐4 Amendments to Australian Accounting Standards ‐ Novation of Derivatives and Continuation of
Hedge Accounting
These amendments are applicable to annual reporting periods beginning on or after 1 January 2014 and
amends AASB 139 'Financial Instruments: Recognition and Measurement' to permit continuation of hedge
accounting in circumstances where a derivative (designated as hedging instrument) is novated from one
counter party to a central counterparty as a consequence of laws or regulations. The adoption of these
amendments from 1 July 2014 will not have a material impact on the consolidated entity.
37
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(v)
(vi)
Annual Improvements to IFRSs 2010‐2012 Cycle
These amendments are applicable to annual reporting periods beginning on or after 1 July 2014 and affects
several Accounting Standards as follows: Amends the definition of 'vesting conditions' and 'market condition'
and adds definitions for 'performance condition' and 'service condition' in AASB 2 'Share‐based Payment';
Amends AASB 3 'Business Combinations' to clarify that contingent consideration that is classified as an asset or
liability shall be measured at fair value at each reporting date; Amends AASB 8 'Operating Segments' to require
entities to disclose the judgements made by management in applying the aggregation criteria; Clarifies that
AASB 8 only requires a reconciliation of the total reportable segments assets to the entity's assets, if the
segment assets are reported regularly; Clarifies that the issuance of AASB 13 'Fair Value Measurement' and the
amending of AASB 139 'Financial Instruments: Recognition and Measurement' and AASB 9 'Financial
Instruments' did not remove the ability to measure short‐term receivables and payables with no stated interest
rate at their invoice amount, if the effect of discounting is immaterial; Clarifies that in AASB 116 'Property,
Plant and Equipment' and AASB 138 'Intangible Assets', when an asset is revalued the gross carrying amount is
adjusted in a manner that is consistent with the revaluation of the carrying amount (i.e. proportional
restatement of accumulated amortisation); and Amends AASB 124 'Related Party Disclosures' to clarify that an
entity providing key management personnel services to the reporting entity or to the parent of the reporting
entity is a 'related party' of the reporting entity. The adoption of these amendments from 1 July 2014 will not
have a material impact on the consolidated entity.
Annual Improvements to IFRSs 2011‐2013 Cycle
These amendments are applicable to annual reporting periods beginning on or after 1 July 2014 and affects four
Accounting Standards as follows: Clarifies the 'meaning of effective IFRSs' in AASB 1 'First‐time Adoption of
Australian Accounting Standards'; Clarifies that AASB 3 'Business Combination' excludes from its scope the
accounting for the formation of a joint arrangement in the financial statements of the joint arrangement itself;
Clarifies that the scope of the portfolio exemption in AASB 13 'Fair Value Measurement' includes all contracts
accounted for within the scope of AASB 139 'Financial Instruments: Recognition and Measurement' or AASB 9
'Financial Instruments', regardless of whether they meet the definitions of financial assets or financial liabilities
as defined in AASB 132 'Financial Instruments: Presentation'; and Clarifies that determining whether a specific
transaction meets the definition of both a business combination as defined in AASB 3 'Business Combinations'
and investment property as defined in AASB 140 'Investment Property' requires the separate application of
both standards independently of each other. The adoption of these amendments from 1 July 2014 will not have
a material impact on the consolidated entity.
(vi)
IFRS 15 – Revenue from contracts with customers
An entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount
that reflects the consideration to which the entity expects to be entitled in exchange for those goods or
services. This means that revenue will be recognised when control of goods or services is transferred, rather
than on transfer of risks and rewards as is currently the case under IAS 18 Revenue. This is applicable for annual
reporting periods beginning on or after 1 January 2017. Due to the recent release of this standard, the entity
has not yet made a detailed assessment of the impact of this standard.
(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 debtor's financial position.
38 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)
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences and tax losses only if the economic entity
considers it is probable that future taxable amounts will be available to utilise those temporary differences and
losses.
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).
Provision for impairment of inventories
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The level
of the provision is assessed by taking into account the recent sales experience, the ageing of inventories and other
factors that affect inventory obsolescence.
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. The provision is based on estimates made from historical warranty costs associated with similar
products.
(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.
(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 three months, and
bank overdrafts.
39 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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 its 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.
(i)
Intangible Assets
Goodwill
All business combinations are accounted for by applying the acquisition 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.
40 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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 profit or loss and other
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. Due to their short term nature, they are measured at amortised cost and are not
discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
(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 profit or loss and other 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. The provision is based
on estimates made from historical warranty costs associated with similar products.
(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 the Black‐Scholes 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.
41 AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(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.
(q)
Income Tax
The income tax expense or benefit 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.
42 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 prevailing at the balance sheet date. The revenues and
expenses of foreign operations are translated to Australian dollars at rates approximating to the exchange rates
prevailing 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.
43 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
Defined contribution superannuation expense
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 loss on disposal of plant and equipment
Economic Entity
2014
2013
$'000
$'000
48,256
25
48,281
54,417
34
54,451
144
144
12
12
34,095
(1,525)
41,828
2,177
7,794
697
21
8,512
71
38
145
16
270
15
27
1,316
‐
8,047
680
333
9,060
107
43
144
16
310
40
166
833
1
Net fair value (loss)/gain on derivative financial instruments ‐
forward exchange contracts
(32)
49
44
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5: INCOME TAX
Major components of income tax
Under provision in prior years
Deferred tax
Income tax benefit
Reconciliation between income tax and prima facie tax on accounting (loss)
(Loss) before income tax expense
Tax at 30% (2013:30%)
Tax effect of non deductible expenses/non assessable income
‐ Entertainment
‐ Other items
Unused tax losses not recognised as deferred tax assets
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 of 30%.
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
2014
2013
$'000
$'000
12
(12)
‐
8
(1,001)
(993)
(1,000)
(3,205)
(300)
(962)
18
(87)
357
12
‐
485
97
3
267
24
322
39
‐
1,110
40
2,387
‐
3
3
7
(46)
0
8
(993)
449
76
12
225
24
781
23
32
766
33
2,421
48
2
50
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 2014.
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.
Tax Losses
In order to recognise a deferred tax asset relating to tax losses, the Directors must be satisfied that forecast results
provide sufficient evidence that the economic entity will be able to utilise tax losses against future taxable profits of the
economic entity. As a general rule, Directors will consider forecast reults over a three year period as a guide to
determining the recoverability of the asset.
At the balance date, the economic entity has unused tax losses available of $4,782,000 (2013: $2,553,000). A deferred tax
asset has not been recognised for $1,190,000 of these tax losses (2013: Nil). The potential benefit of these losses at 30% is
$357,000 (2013: Nil).
45
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
Economic Entity
2014
2013
$'000
$'000
7,970
(82)
7,888
197
‐
157
8,242
8,322
(81)
8,241
490
49
155
8,935
(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
81
28
(27)
82
186
61
(166)
81
(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 $11,000 (2013: $10,000) 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.
NOTE 8: INVENTORIES
Current
Finished goods
Stock in transit
Provision for obsolescence (a)
(a) Movement in the provision for obsolescence is as follows:
Opening balance
Charge for the year
Amounts written off
Closing balance
13,067
1,778
14,845
(1,085)
13,760
2,610
537
(2,062)
1,085
13,410
2,035
15,445
(2,610)
12,835
433
2,733
(556)
2,610
46
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
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
NOTE 10: PLANT AND EQUIPMENT
Non‐Current
Country of
Incorporation
Australia
Australia
Australia
New Zealand
Percentage Owned
2014
2013
100%
100%
100%
100%
100%
100%
Cost
Accumulated depreciation
Net carrying amount
2014
$'000
2013
$'000
2014
$'000
2013
$'000
2014
$'000
2013
$'000
Economic Entity
Plant and equipment
Furniture and fittings
Leasehold improvements
Leased plant and equipment
Total plant and equipment
1,274
483
1,412
170
3,339
1,297
482
1,412
170
3,361
(1,097)
(311)
(307)
(49)
(1,764)
(1,085)
(272)
(177)
(33)
(1,567)
177
172
1,105
121
1,575
212
210
1,235
137
1,794
Reconciliation of carrying amounts:
2014
Plant and
equipment
$'000
Furniture and
fittings
$'000
Leasehold
improvements
$'000
Balance at the beginning of the year
Additions
Disposals
Depreciation and amortisation expense
Carrying amount at the end of the year
212
37
(1)
(71)
177
210
‐
‐
(38)
172
1,235
15
‐
(145)
1,105
2013
Plant and
equipment
$'000
Furniture and
fittings
$'000
Leasehold
improvements
$'000
Balance at the beginning of the year
Additions
Disposals
Depreciation and amortisation expense
Carrying amount at the end of the year
254
66
(1)
(107)
212
250
4
(1)
(43)
210
1,312
67
‐
(144)
1,235
Leased
plant and
equipment
$'000
Total
$'000
137
1,794
‐
‐
(16)
121
Leased
plant and
equipment
$'000
153
‐
‐
(16)
137
52
(1)
(270)
1,575
Total
$'000
1,969
137
(2)
(310)
1,794
47
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
Reconciliation of written down values:
Opening balance at 1 July 2013
Additions
Impairment
Amortisation expense
Closing balance at 30 June 2014
Goodwill Website
$'000
‐
$'000
40
‐
‐
‐
‐
‐
‐
(15)
25
Total
$'000
40
‐
‐
(15)
25
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
NOTE 13: OTHER FINANCIAL LIABILITIES
Current
Bills payable (a)
Lease Liability (b)
Non Current
Lease Liability (b)
Economic Entity
2014
2013
$'000
$'000
2,970
(2,970)
‐
173
(148)
25
25
2,970
(2,970)
‐
173
(133)
40
40
5,997
2,229
32
8,258
2,591
157
1,036
281
452
4,517
3,974
33
4,007
7,684
2,299
‐
9,983
1,855
53
2,700
195
600
5,403
3,814
30
3,844
58
91
48
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Economic Entity
2014
$'000
2013
$'000
NOTE 13: OTHER FINANCIAL LIABILITIES continued
Details of the economic entity's exposure to interest rate changes on other financial liabilities is 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, this facility was replaced with a receivables discounting
facility as discussed in note 19.
The bill facility was secured by a charge over the assets of Amber Technology Limited. Guarantees were in place to a
limit of $4,175,000 (2013:$4,175,000). The value of assets at balance date is $26,511,000 (2013: $28,878,000).
(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
Employee benefits
Non Current
Employee benefits
323
1,383
1,706
240
240
254
1,200
1,454
299
299
(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 2013
Additional provision recognised
Reductions resulting from payments
Closing balance at 30 June 2014
Service
warranty
$'000
253
330
(260)
323
(c) Amounts not expected to be settled within the next twelve months:
The current provisions for annual leave and long service leave include all unconditional entitlements where employees
have completed the required period of service. The entire amount is presented as current, since the economic entity
does not have an unconditional right to defer settlement. However, based on past experience, the economic entity does
not expect all employees to take the full amount of accrued leave or require payment within the next twelve months.
The following amounts reflect leave that is not expected to be taken within the next twelve months:
Current annual leave obligation expected to be settled after 12 months
Current long service leave obligation expected to be settled after 12 months
158
336
144
379
49
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15: SHARE CAPITAL
Economic Entity
2014
Shares
2013
Shares
Economic Entity
2014
2013
$'000
$'000
Ordinary Shares fully paid (no par value)
30,573,181
30,573,181
11,138
11,138
Details
Balance 30 June 2013
Shares bought back
Balance 30 June 2014
No of shares
30,573,181
‐
30,573,181
$'000
11,138
‐
11,138
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.
NOTE 16: RESERVES
Foreign currency translation reserve (a)
13
13
(69)
(69)
For an explanation of movements in reserve accounts refer to the 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(r). The reserve is recognised in profit and loss when the net investment
is disposed of.
(b) Option reserve
The option 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
(a)
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.
(b) The economic entity had no commitments for capital expenditure as at 30 June 2014
(2013: Nil)
1,374
5,507
5,378
12,259
1,316
5,411
6,777
13,504
50
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
2014
$'000
2013
$'000
642
642
685
685
No material losses are anticipated in respect of any of the above contingent liabilities.
NOTE 19: EVENTS SUBSEQUENT TO REPORTING DATE
On 4 August 2014, the economic entity announced that management has successfully negotiated a new two year
finance facility with Bibby Financial Services. The new facility is an invoice discounting solution with approval up to
$6M and replaces the Commonwealth Bank of Australia as the primary lenders to the business.
On 16 September 2014 the Board announced that Mr R Glasson (CFO, Company Secretary) had tendered his
resignation and would be leaving the economic entity early in the 2015 calendar year. A successor is yet to be
appointed at the date of this report.
There were no other matters that have arisen since the end of the financial year that have significantly affected, or
may significantly affect the operations or 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
2014
$
2013
$
1,153,444
146,939
‐
1,300,383
1,145,072
124,359
756
1,270,187
‐
63,007
36,000
79,200
‐
36,000
6,000
148,207
51
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 no options lapsed (2013: 100,000) and no options were forfeited (2013: Nil). There were no
options issued or exercised during the financial year.
Employee Share Option Plan
Held by employees at the beginning 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
2014
2013
‐
100,000
‐
‐
‐
‐
Date
Granted
Exercise Period
Start
Finish
Exercise
Price
2014
Weighted average exercise price
2013
07/12/04
30/09/07
30/09/12
$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
‐
‐
‐
‐
‐
‐
100,000
100,000
$1.35
(100,000)
(100,000)
$1.35
‐
‐
‐
‐
‐
‐
‐
‐
‐
‐
The weighted average remaining contractual life of share options outstanding at the end of the period was nil years
(2013: nil years).
52
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:
Professional
Lifestyle Entertainment
New Zealand
(b) Segment information
2014
Revenue
‐
‐
Revenue from external customers
Total segment revenue
Inter‐segment revenue
Result
‐ Segment EBIT
‐ Unallocated / corporate result
‐ EBIT
‐
‐
‐ Loss before income tax
‐
Income tax benefit
‐ Loss for the year
Interest revenue
Interest and finance costs
Assets
‐ Segment Assets
‐ Unallocated/corporate assets
‐ Total assets
Liabilities
‐
Segment Liabilities
‐ Unallocated/corporate liabilities
‐
Total liabilities
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
20,391
43
20,434
24,191
121
24,312
3,674
49
3,723
‐
(213)
(213)
48,256
‐
48,256
210
(559)
(2)
7,698
13,711
1,968
3,917
3,709
1,067
‐
‐
‐
‐
‐
(351)
(215)
(566)
25
(459)
(1,000)
0
(1,000)
23,377
3,134
26,511
8,693
5,579
14,272
52
52
285
285
Other
‐
Acquisition of non current segment assets
‐
Depreciation and amortisation of segment
assets
20
110
31
166
1
9
53
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 22: SEGMENT REPORTING (continued)
2013
Professional
Lifestyle
Entertainment
New Zealand
Eliminations
$'000
$'000
$'000
$'000
Economic
Entity
$'000
Revenue
‐ Total segment revenue
‐
Inter‐segment revenue
Revenue from external customers
Result
‐ Underlying EBIT
‐ Abnormal Inventory Obsolescence
‐ Segment EBIT
EBIT
Interest revenue
‐ Unallocated / corporate result
‐
‐
‐ 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
28,247
53
28,300
1,410
(1,212)
198
23,278
37
23,315
(1,226)
(1,106)
(2,332)
2,892
75
2,967
(129)
‐
(129)
11,604
11,727
1,857
6,479
2,245
1,005
Other
‐
Acquisition of non current segment assets
68
101
‐
Depreciation and amortisation of segment
assets
136
203
3
11
‐
(165)
(165)
‐
‐
‐
‐
‐
‐
‐
54,417
‐
54,417
55
(2,318)
(2,263)
(553)
(2,816)
34
(423)
(3,205)
993
(2,212)
25,188
3,619
28,807
9,729
5,871
15,600
172
172
350
350
54
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
2014
$'000
2013
$'000
Carrying Amount of
Segment Non Current
Assets
2014
$'000
2013
$'000
Acquisition of Non‐
Current Assets
2014
$'000
2013
$'000
Geographical Location
‐ Australia
‐ New Zealand
44,582
3,674
48,256
51,525
2,892
54,417
1,591
9
1,600
1,818
16
1,834
51
1
52
169
3
172
(i) Carrying amount of segment non current assets
These amounts include all non current assets other than deferred tax assets located in the country of domicile.
(d) Other segment information
(i) Accounting Policies
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.
55
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
the following amounts:
Cash on hand
At call deposits with financial institutions
(ii) Reconciliation of net cash provided by operating activities to loss after
income tax
(Loss) for the year
Depreciation and amortisation
Net loss on disposal of plant and equipment
Foreign exchange gains
Non‐cash share based payments
Changes in operating assets and liabilities
Decrease/(Increase) in trade and other receivables
(Increase) in inventories
Decrease in tax receivable
(Decrease)/Increase in payables
Increase in provisions
(Increase) in deferred taxes
Net cash (used in)/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
2014
2013
$'000
$'000
3
508
511
3
2,840
2,843
(1,000)
(2,212)
285
‐
(165)
‐
635
(787)
‐
(1,509)
181
‐
(2,360)
350
1
(12)
1
(2,013)
(200)
124
5,068
34
(993)
148
56
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.
57 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
2014
2013
$'000
$'000
4,191
2,075
601
1,021
7,888
82
7,970
4,977
2,280
603
381
8,241
81
8,322
The economic entity does not have other receivables which are past due (2013: 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:
2014
Trade and other payables
Commercial Bills
Lease Liability
2013
Trade and other payables
Commercial Bills
Lease Liability
Contractual Cash Flows
Less than
3 months
$'000
3 to 6
months
$'000
6 to 12
months
$'000
More than
12 months
$'000
6,029
3,974
8
10,011
7,684
3,814
5
11,503
‐
‐
‐
‐
8
8
10
10
‐
‐
‐
‐
17
17
15
15
‐
‐
‐
‐
58
58
91
91
Total
$'000
6,029
3,974
91
10,094
7,684
3,814
121
11,619
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.
58
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. These 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 Euros
Maturity:
0‐3 months
Sell Australian dollars
Average exchange rates
2014
$'000
2013
$'000
2014
2013
1,893
‐
2,037
‐
0.9245
‐
0.9576
‐
‐
138
‐
0.7225
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%
2014
2013
$'000
$'000
Strengthening of 10%
2014
$'000
2013
$'000
207
207
200
200
(169)
(169)
(168)
(168)
59
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
2014
%
2013
%
Balance
2014
$'000
2013
$'000
Commercial Bills
13
6.31%
6.12%
3,625
3,814
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 2014, with all other variables remaining constant:
Impact on profit
Impact on equity
Increase of 1% of average
interest rate
2014
$'000
2013
$'000
Decrease of 1% of
average interest rate
2014
2013
$'000
$'000
(36)
(36)
(38)
(38)
36
36
38
38
Net Fair Values
The net fair values of assets and liabilities approximate 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 2014 is nil
(2013: nil).
There were no changes to the economic entity's approach to capital management during the financial year.
60
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 24: FINANCIAL RISK MANAGEMENT (continued)
Fair Value Heirarchy
The following tables detail the economic entity's assets and liabilities, measured or disclosed at fair value, using a three
level heirarchy, based on the lowest level of input that is signficant to the entire fair value measurement, being:
‐
‐
‐
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the
measurement date.
Level 2: Inputs other than quoted prices included withon Level 1 that are observable for the asset or liability, either
directly or indirectly.
Level 3: Unobservable inputs for the asset or liability.
Consolidated ‐ 2014
Assets
Forward foreign exchange contracts
Liabilities
Forward foreign exchange contracts
Consolidated ‐ 2013
Assets
Forward foreign exchange contracts
Liabilities
Forward foreign exchange contracts
Level 1
$'000
Level 2
$'000
Level 3
$'000
Total
$'000
‐
‐
‐
‐
32
49
‐
‐
‐
‐
‐
‐
32
49
‐
‐
There were no transfers between levels during the financial year.
The carryng amounts of trade and other receivables and trade and other payables are assumed to approximate their fair
values due to their short term nature.
The fair value of financial liabilities is estimated by discounting the remaining contractural maturities at the current
market interest rate that is available for similar financial liabilities.
Valuation Techniques for fair value measurements categorised within level 2 and level 3
Derivative financial instruments have been valued using quoted market rates. This valuation technique maximises the use
of observable market data where it is available and relies as little as possible on entity specific estimates.
Level 3 assets and liabilities
There are no assets or liabilities falling within this category.
NOTE 25: EARNINGS PER SHARE
Basic earnings per share (cents)
Weighted average number of ordinary shares (number)
Earnings used to calculate basic earnings per share ($)
Diluted earnings per share (cents)
Weighted average number of ordinary shares (number)
Earnings used to calculate diluted earnings per share ($)
Economic Entity
2014
2013
(3.3)
30,573,181
(1,000,000)
(7.2)
30,573,181
(2,212,000)
(3.3)
30,573,181
(1,000,000)
(7.2)
30,573,181
(2,212,000)
61
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 26: DIVIDEND FRANKING CREDITS
Tax rate
Amount of franking credits available for subsequent reporting periods ($'000)
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
Economic Entity
2014
2013
$
$
30%
6,146
30%
6,146
Audit and review of financial reports, and other work under the Corporations Act
2001.
111,599
114,463
Other practices ‐ BDO Auckland (Formerly PKF)
Audit or review of financial reports of subsidiary
Total remuneration for audit services
Non‐audit services
BDO East Coast Partnership
10,036
8,978
121,635
123,441
Tax compliance services, including review of company income tax returns
15,000
18,460
Other practices ‐ BDO Auckland (Formerly PKF)
Tax compliance services, including review of company income tax returns
Total remuneration for non‐audit services
3,345
18,345
2,504
18,460
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.
62
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 28: PARENT ENTITY INFORMATION
Information relating to Ambertech Limited (parent entity):
‐ Current Assets
‐ Total Assets
‐ Current Liabilities
‐ Total Liabilities
‐ Share capital
‐ Share based payments reserve
‐ Retained earnings
(Loss)/Profit of the parent entity
Total comprehensive income of the parent entity
Parent Entity
2014
$'000
2013
$'000
11,041
15,599
1,462
1,462
11,046
15,604
1,462
1,462
11,138
11,138
‐
‐
3,004
2,985
(5)
(5)
19
19
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity and some of its subsidiaries are party to a deed of cross guarantee under which the parent
guarantees the debts of the others.
Contingent Liabilites
The parent entity had no contingent liabilities as at 30 June 2014 (2013: Nil).
Capital Commitments
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2014 (2013: Nil)
63
AMBERTECH LIMITED AND CONTROLLED ENTITIES
ACN 079 080 158
DIRECTORS' DECLARATION
The directors of the company declare that:
1.
The financial statements, comprising the statement of profit or loss and other comprehensive income,
statement of financial position, statement of cash flows, statement of changes in equity and accompanying
notes, are in accordance with the Corporations Act 2001 and:
(a)
(b)
comply with Accounting Standards and the Corporations Regulations 2001 ; and
give a true and fair view of the consolidated entity's financial position as at 30 June 2014 and of its
performance for the year ended on that date.
2.
3.
4.
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.
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
Director
P A Amos
Director
Dated this 26th day of September 2014.
Sydney
64 The following information is required by the Australian Securities Exchange Limited.
Distribution of equity security by size of holding:
-
-
-
-
and
1,000
5,000
10,000
100,000
over
1
1,001
5,001
10,001
100,001
Total
Number of
shareholders
76
79
37
58
21
Number of
Ordinary Shares
68,398
281,748
332,900
1,985,090
27,905,045
% of total
capital
0.22
0.92
1.09
6.49
91.28
273
30,573,181
100.00
The number of security investors holding less than a marketable parcel of 3,571 securities is 112 and they hold 151,096
securities.
Equity Security Holders
The twenty largest shareholders as at 17 October 2014 were:
Rank Twenty largest holders
Number of
shares
% of total
capital
JH Nominees Australia Pty Ltd (Harry Family Super Fund A/C)
1 Talon A Pty Limited (A K Fund 1)
2 Appwam Pty Limited
3 Crowton Pty Ltd (Amos Super Fund)
4 Howbay Pty Ltd
5 Wavelink Systems Pty Ltd
6 Wavelink Systems Pty Ltd (Employee Superannuation Fund)
7 Wygrin Pty Ltd
8 Wygrin Pty Ltd (Wygrin Pension Fund)
9 Crowton Pty Limited
10
11 Mr Joseph Grech
12 Milton Yannis
13 Mr Ralph McCleery
14 Mr Joseph Paul Grech & Ms Deborah Lee Grech
15 Mr David Scicluna & Mr Anthony Scicluna
16 Velkov Funds Management Limited
17 Mr Stephen Rodney Hariono
18 Mr David Le Cornu & Mrs Betty Le Cornu
19 Xanthippus Pty Ltd
20 Wallace Capital Pty Ltd
4,245,667
4,153,055
3,231,681
2,883,556
2,784,625
2,650,000
1,507,556
1,488,270
1,082,162
993,250
413,045
404,348
357,599
333,261
259,000
252,000
225,070
220,000
155,300
152,600
13.89
13.58
10.57
9.43
9.11
8.67
4.93
4.87
3.54
3.25
1.35
1.32
1.17
1.09
0.85
0.82
0.75
0.72
0.51
0.50
27,795,045
90.91
Source: Link Market Services
65
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
Wavelink Systems Pty Ltd
Crowton Pty Limited
Accretion Investment Management
Appwam Pty Limited
Wygrin Pty Ltd
Howbay Pty Ltd
On-Market Buy Back
Number of
shares
% of total
capital
5,484,625
4,313,843
4,245,667
4,153,055
2,995,826
2,883,556
17.94
14.11
13.89
13.58
9.80
9.43
On 2 September 2005, the company lodged an Appendix 3C announcing an on-market buy-back of up to 1,543,150
ordinary shares on issue. On 28 September 2006 the company lodged an Appendix 3D amending the buy-back duration to
unlimited. The company has not lodged an Appendix 3F to finalise the buy back as at 17 October 2014.
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 2014 no shares were bought back by the company.
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.
66
Registered Office
Bankers
Sydney Head Office
Unit 1, 2 Daydream Street
Warriewood NSW 2102
T: +61 2 9998 7600
Bibby Financial Services
Level 10, 418A Elizabeth Street
Surry Hills NSW 2010
Unit 1, 2 Daydream Street
Warriewood NSW 2102
T: +61 2 9998 7600
Directors
Auditors
Melbourne
Peter F Wallace - Chairman
Peter A Amos - Managing Director
Tom R Amos
Edwin F Goodwin
David R Swift
BDO East Coast Partnership
Level 11, 1 Margaret Street
Sydney NSW 2000
T: + 61 2 9251 4100
Suite 12, 79-83 High Street
Kew VIC 3101
T: +61 3 9853 0401
Company Secretary
ASX Listing
Brisbane
Robert J Glasson
AMO
Share Registry
Link Market Services
Locked Bag A14
South Sydney NSW 1235
Or
Level 12, 680 George Street
Sydney NSW 2000
T: +61 2 8280 7111 or
T: 1300 554 474
www.ambertech.com.au
www.amberonline.com.au
Unit 35, 28 Burnside Road
Yatala QLD 4207
T: +61 7 3287 2928
Auckland
Unit 3, 77 Porana Road
Glenfield, Auckland 0672
New Zealand
T: + 64 9 443 0753
67