A N N U A L R E P O R T
2 0 1 1 / 2 0 1 2
www.civmec.com.au
A n n u a l R e p o r t 2 0 1 1 1
CIVILPRECAST CONCRETEFABRICATIONMODULARISATIONSMPINSULATIONMAINTENANCE Photo: Aerial view of Civmec facility
taken from the South side.
CONTENTS
About Civmec Limited
Chairman’s Message
CEO Annual Report
Board of Directors
Key Management
Corporate Information
3
4
6-9
10-12
14-15
16
Financial Reports
19-102
Statistics of Shareholdings as
at 19 September 2012
102-103
Notice of Annual
General Meeting
Proxy Form
105-108
108-109
A N N U A L R E P O R T 2011/2012
ABOUT CIVMEC LIMITED
CIVMEC is an integrated, multi-disciplinary services
We have built an experienced, well- trained and loyal
provider to the resources, utilities and infrastructure
workforce that understands our clients’ needs and is
industries. We provide heavy engineering and other
able to respond to our clients’ requirements confidently.
services such as fabrication, modular assembly, site
civil works, precast concrete, industrial insulation,
structural, mechanical, piping installation and
maintenance services.
Civmec prides itself on delivering quality service to
its clients and is successfully building longstanding
relationships with some of the world’s largest blue-chip
mining, oil and gas companies, as well as renowned
Civmec’s headquarters and state-of-the-art waterfront
EPCM contractors across Australia.
facilities are adjacent to the Australian Marine Complex
in Henderson, Western Australia.
We promote a culture of positive attitude and teamwork
and attribute our team culture as the key to the
We base our strength on our diversity, a strong
company’s reputation for excellence.
dedicated management team and a total commitment
to providing our clients with the best service.
3
In such a short but exciting time we have
built and equipped our world class heavy
engineering waterfront facility...
CHAIRMAN’S MESSAGE
Despite being a relatively young
our capabilities continue to grow, enabling us to provide
company, Civmec Ltd has shown
additional services to further meet our clients’ needs.
great maturity over the past 12
months in its ability to handle the
outstanding growth for the year. I
am pleased to report that our
revenue has increased by 439%
from S$61.0 million to S$328.6
million for the current financial year ended 30 June 2012.
In turn, the Group’s net profit after tax has grown by
303% from S$7.5 million to S$30.3 million. In line with
our performance, the Board recommends a first and final
dividend of 0.6 Singapore cents per ordinary share, subject
to the approval of the shareholders at the forthcoming
Annual General Meeting.
We have come a long way since the first sod turning
ceremony officiated by the Minister for Commerce Troy
Buswell MLA in December 2009.Our goal of developing
our company into a multi-disciplined organisation with
diversified core business capabilities strongly focused
on servicing the resources, utilities and infrastructure
sectors has come to fruition. In such a short but exciting
time we have built and equipped our world-class, heavy
engineering, waterfront facility in Henderson as well
as grown our precast concrete and site civil concrete
construction businesses. At the same time, we have
also succeeded in securing several major contracts from
prominent resource companies.
The highlight of the year was the successful listing of
the company on the Singapore Exchange Main Board.
I would like to personally thank all the staff and external
professionals involved for their tireless efforts leading up
to the listing of Civmec Ltd. The Initial Public Offering
raised S$20.4 million and has given the company great
Construction of the new office building is well underway
and is expected to be completed by March 2013. This will
provide one of the cornerstones needed for our future
growth.
Another achievement I proudly acknowledge is the
extensive pool of talent that we have built across our
company. During a time of change and growth, the
management and employees of the company have
shown great dedication and strength in meeting all of the
challenges confronting them; the result being a strong
culture of achievement. I would like to thank all staff and
employees for their contribution and commitment to the
company over this period. The road forward may not always
be smooth and we may face challenges from time to
time, but by continuing to apply our ethics of professional
dedication, loyalty, unity and innovation to everything we
do, I have no doubt that we will continue to grow and
succeed.
I would also like to extend my gratitude to my fellow Board
members. Their guidance and support during this time
has been most valuable, giving us the needed counsel to
continue with our strategic endeavours.
Finally, I would like to extend my appreciation to all our
shareholders who showed tremendous support at our initial
listing in April 2012 and thereafter. The trust you placed in
us is an inspiration to everyone at Civmec Ltd to continue
to pursue our quest to build a strong, safe and secure
organization with a bright future.
Yours Sincerely
leverage in moving forward with our strategic future goals.
Proceeds from the capital raised have also been directed at
the construction of the new office building and in securing
James Fitzgerald
assets required for our future expansion into the structural,
James Finbarr Fitzgerald
mechanical and piping (SMP) market, which will see
Executive Chairman
Civmec Limited
““
5
CEO ANNUAL REPORT
F Y 2 0 1 1 / 1 2
OPERATIONS
OVERVIEW
Projects that are still in the feasibility phase
include, but are not limited to, BHPB Iron Ore’s
350TPA Expansion Project, Rio Tinto’s 353 MTPA
The 2011/2012 financial year
Expansion Project, Oakajee’s Port and Rail Project,
has been an exciting and
API Management’s West Pilbara Iron Ore Project,
rewarding year for Civmec
Woodside’s Browse LNG Project and Chevron’s
Ltd. On the back of the
Gorgon LNG Train 4.
surge in resources projects
in WA, we have successfully positioned ourselves as
a highly sought-after multi-disciplinary contractor.
Our focus to build a strong team of complementary
HIGHLIGHTS
We have had many highlights during the year, such as:
management personnel with the knowledge to tap into
• Commencing major projects for BHP, Chevron,
the enormous opportunities open to a company with
Metso, SKM, Rio Tinto and others.
boundless energy and a “can do” attitude remains
unchanged.
• We were a finalist in Rio Tinto’s ‘Excellence in
the Provision of Construction’ award only a few
The commitment and the quality inherent in our
months into our first major civil projects for them.
• We were also winners of a ‘Best Contractor’
award for the civil work on the Marandoo project.
• The award of a contract for the fabrication and
assembly of a single cell tandem iron ore rail
car dumper for Metso Minerals – the first of its
kind ever to be fabricated – was undoubtedly an
important achievement. In August 2012 we were
the winning entrant for the design and mechanical
assembly of the car dumper, an award jointly
shared with Metso Minerals and sponsored by the
Australian Steel Institute.
team have enabled us to secure major contracts in
the mining, oil and gas sectors. As a result, Civmec
was awarded several large fabrication and assembly
packages, as well as major civil and precast work.
The prospects in the mining and oil and gas
industries remain strong. Major companies such as
BHP Billiton (BHPB), Rio Tinto and Chevron have all
made substantial commitments toward expanding
their operations over the next few years. A total of
approximately $103.22 billion dollars of work is in
progress or committed in WA alone, with a further
approximately $71.9 billion dollars in the feasibility
stage. (1)
Projects such as BHPB Iron Ore’s 220 MTPA capacity
expansion, Rio Tinto Iron Ore’s 330 MTPA capacity
expansion, Chevron’s LNG Gorgon Project, Chevron’s
Wheatstone LNG Project and Ichthys’ Gas Inpex
LNG Project are just some of the committed and in-
progress projects.
A N N U A L R E P O R T 2011/2012
Civmec has entered a short phase of
consolidation and re-energising before we
embark on a long-term expansion program.
our shareholders at our forthcoming Annual General
Meeting.
SAFETY
We have witnessed substantial improvement in the
safety culture across our entire company in the last
year. We have instilled an understanding that “safety
begins with you” and adopted a “Safe Day Good Day”
culture. The necessity for a safe work environment
is developed from the ground upwards and strongly
supported and endorsed by management.
Furthermore, we quickly identified the necessity for a
cultural overhaul when we witnessed large increases
of personnel in the second quarter FY 2012. With
new people coming on board in large numbers,
we alleviated the risk of unsafe work practices by
rigorously addressing this matter over a quarter period
and witnessed promising results within a short time
Successful listing on the SGX in April 2012. The funds
raised are among some of the key factors necessary
for the implementation of our growth strategy in the
coming year.
(1) Sourced from BIS Shrapnel
FINANCIAL PERFORMANCE
FY2012 revenue from operating activities was S$328
frame. The culture followed from our Henderson facility
million, up 439% from last year with profit after tax
to our Pilbara work sites, where we have had long
up 303% to S$30.3 million for the current reporting
injury-free periods.
period.
Strong revenue increases were witnessed across all
operational sectors, the biggest being in the mining
and other sector which grew 1,300% to S$249 million.
Realised profits coupled with the successful IPO
capital raising exercise in April 2012, grew our equity
by 306% to S$86.4 million. Earnings per share rose
from 1.50 cents per share in FY2011 to 6.05 cents per
share for FY2012. The overall financial result for the
year is one that we are very proud to present to our
shareholders.
As a result of our performance over the year the
We are pleased to consider a safe workplace as just
a normal way of doing business at Civmec’s facilities
and sites.
OUR PEOPLE
We have invested in training and developing our
people with the intent to organically fill management
and supervising roles as much as possible, as we
embark on our expansion plans. As our existing
business units expand and we enter new areas of
business, supervision and management are potential
risks areas that we are striving to reduce by adopting
this proactive approach.
Board is recommending a maiden dividend of 0.6
At our peak we had close to 1,000 personnel working
cents per ordinary share, subject to the approval of
on our projects.
7
““ CEO ANNUAL REPORT
F Y 2 0 1 1 / 1 2
We have also committed heavily in our apprenticeship
training scheme. Through this scheme, we have given
33 young people an opportunity to develop their skills
and embark on an exciting life as well as a promising
future. With their training, they will be equipped with
INSULATION - Cape Civmec Insulation Group
(CCIG)
CCIG is a company that is equally owned by
Cape Australia Investments Pty Ltd (listed on the
London Stock Exchange and a provider of essential
non-mechanical industrial services) and Civmec.
Established to carry out industrial insulation projects
throughout Australia, CCIG was called upon to carry
out extensive remedial work on the Woodside Pluto
project between August 2011 and March 2012. The
work involved in this project required the mobilisation
of a 170 man workforce that was predominantly
employed through a recruitment campaign in the
UK and brought to Australia under a special project
business visa.
the appropriate skills to potentially become our skilled
PRECAST
workforce one day.
BUSINESS UNITS
FABRICATION
The fabrication facility witnessed the largest growth
in this period. This is one of the key challenges that
is putting pressure on our personnel and systems
to perform. Throughout the year we have continually
refined our processes, procedures and systems. This,
coupled with maturing project teams, allows us to
continuously improve our productivity and service
quality to our clients.
SITE CIVIL
We have successfully met all requirements on the site
civil projects undertaken this period. All challenges,
including significant increases in resources to
accelerate the completion of one project, were
The success of our precast division over the past
12 months has been recognised in the construction
industry and has led other clients to investigate the
possibilities and benefits of using precast for their
projects. The concept allows for work on the projects
to commence before bulk earthworks is complete,
having good schedule impact as well as addressing
the issues surrounding remote accommodation and
the cost of labour in remote locations. At its peak,
Civmec’s Henderson facility was the largest consistent
user of concrete in the state according to supplier
information. Our location, facility size and capacity has
been integral to the precast business opportunities.
We have manufactured single precast concrete
structures in excess of 3,000 tonnes.
OUR NEW OFFICE HEADQUARTERS
Having recently received full building approval for the
overcome. Our performance has enabled us to secure
construction of our 6,300 square meter headquarters,
two Early Contractor Involvement service orders to
we have scheduled to have the building completed
advise clients on planning and execution strategies for
in the 3rd quarter of FY2013 (March 2013). This is a
upcoming projects.
necessary deadline to allow the company to grow,
Our focus has been on building
a strong team of complementary
management personnel...
A N N U A L R E P O R T 2011/2012
We accept that we are still growing and can still
improve and see this as a constant reason to revisit
our methods of doing business.
Our goal however has not changed. Civmec wants
to deliver shareholder satisfaction, build a strong
reputation for being a supplier who delivers, and be an
employer of choice.
With our vision and commitment deeply entrenched
in our minds, we look forward to the coming year
and beyond and seek to scale new heights of growth
with our team, with the support and trust from our
as well as alleviate the immediate shortage of quality
office space at Henderson. A large portion of the IPO
funds are being directed to fund this construction.
shareholders.
FUTURE OUTLOOK
Civmec has entered a short phase of consolidation
and re-energising before we embark on a long-term
expansion program. Presently, our primary focus is
on tendering fabrication, precast and site civil works.
Maturity and retention of our project teams, among
which include engineers and supervisors, has placed
us in a strong position to continue and carry out
projects that meet the satisfaction of our clients.
Our next area of focus in early 2013 will be to secure
structural, mechanical and piping (SMP) projects.
We have been developing a team of managers
and supervisors in this area, and they have been
performing modular assembly works at our Henderson
facility. We are currently sourcing for cranes and other
equipment to enter this market.
We regularly revisit our supply chain options to ensure
that we are getting the best service from our suppliers
and contractors, both financially and service wise.
Our suppliers now have a clearer understanding of
our business requirements and, in many cases, have
adapted their own business practices to best suit our
needs.
Yours Sincerely
Patrick John Tallon
Patrick John Tallon
Chief Executive Officer
Civmec Limited
9
““
BOARD OF DIRECTORS
JAMES FINBARR FITZGERALD – EXECUTIVE CHAIRMAN
Mr. James Finbarr Fitzgerald is our Executive Chairman.
operation. He served as Executive Director of AusGroup
He was appointed to our Board on 27 March 2012. He
Limited from 2005 to 2008, being responsible during
is responsible for the development and performance of
his tenure, for the management, development and
our Group including the areas of safety, strategy and
performance of its operating divisions. Mr. Fitzgerald
financial performance. Mr. Fitzgerald and our CEO were
also has significant experience in fabrication and
amongst the founders of our Group. Mr. Fitzgerald has
construction of material handling and process plants for
over 30 years of experience in the structural mechanical
mining and resource industries. Mr. Fitzgerald holds an
process and insulation contracting sector. He was a
Australian Tradesman’s Certificate (Sheet Metal Worker,
founder and a director of AGC Industries Pty Ltd from
First Class) from the Australian Local Sheetmetal Trade
end 1997 to 2009, where he was responsible for the
Committee of New South Wales.
management, development and performance of the
PATRICK JOHN TALLON – CHIEF EXECUTIVE OFFICER
Mr. Patrick John Tallon is our CEO. He was appointed
responsible for promoting, expanding, developing and
to our Board on 27 March 2012. Mr. Tallon and our
steering the company as well as guiding its operations
Executive Chairman were amongst the founders of our
in structural concrete contracting. Mr. Tallon has over 24
Group. He has been with our Group since July 2009 and
years experience in the construction industry. Mr. Tallon’s
is responsible for the safety, budgets, management and
experience includes large mining projects involving the
development of our Group’s operations, setting all Group
delivery of high quality structures. He has experience in
policies such as those relating to safety, quality and the
bridge and multi-storey construction. Mr. Tallon holds a
environment and the improvement of productivity. Prior
tradesman certificate in carpentry and joinery from the
to joining our Group, he was a director of Ballymount
Training and Employment Authority of Ireland.
Enterprises Pty Ltd from September 2002, where he was
A N N U A L R E P O R T 2011/2012
BOARD OF DIRECTORS
KEVIN JAMES DEERY – CHIEF OPERATING OFFICER
Mr. Kevin James Deery is our COO. He was appointed
assets and the appointment of appropriate personnel
to our Board on 27 March 2012. He is responsible for
to various positions in our Group. From 2001 to 2009,
the overall operations of our Group including ensuring
Mr. Deery held various positions which include that of
that projects are completed on budget, overseeing
manager of projects in AGC Industries Pty Ltd (a wholly-
the management of current projects, forecasting of
owned subsidiary of AusGroup Limited). He managed
revenues and profits, and implementing and complying
SMP construction works for major projects and ensured
with the safety and quality management systems,
that project managers completed projects in a safe,
procedures and work instructions. Mr. Deery is also
timely and profitable manner. Mr. Deery has over 17 years
responsible for approving the purchase and disposal of
of experience in the resources industry and in particular
fabrication and construction projects for the mining
and oil and gas sectors. Mr. Deery holds a Bachelor of
Engineering (Mechanical) Degree from Curtin University.
CHONG TECK SIN – LEAD INDEPENDENT DIRECTOR
Mr. Chong Teck Sin is our Lead Independent Director
Co , Ltd, which are listed on the Australian Securities
and was appointed to our Board on 27 March 2012. He
Exchange and the Stock Exchange of Hong Kong
was formerly the Group Managing Director (Commercial)
Limited, respectively. Between April 2004 and March
of SGX mainboard listed Seksun Corporation Ltd
2010, Mr. Chong was a board member of the Accounting
(subsequently known as Enporis Greenz Limited) from
and Corporate Regulatory Authority (ACRA), a statutory
1999 to 2004, and thereafter, served as a non-executive
board of Singapore’s Ministry of Finance. Between
director on the boards of companies and/or entities.
October 2008 and July 2010, Mr. Chong was also a
Mr. Chong was also formerly an independent director
board member of Singapore’s largest charity called the
of Beyonics Technology Limited, Wanxiang International
National Kidney Foundation. Mr. Chong graduated with
Limited, Sihuan Pharmaceutical Holdings Group Ltd.
a Bachelor of Engineering from the University of Tokyo
and JES International Holdings Limited. He is currently
in 1981 on a government scholarship and subsequently
an independent director of SGX-listed AVIC International
obtained a Masters of Business Administration from the
Investments Limited and Innotek Limited. Mr. Chong is
National University of Singapore in 1987 through part-
also an independent director of Blackgold International
time study.
Holdings Limited and Changan Minsheng APLL Logistics
1 1
BOARD OF DIRECTORS
WONG FOOK CHOY SUNNY – INDEPENDENT DIRECTOR
Mr. Sunny Wong Fook Choy is our Independent Director
director of Albedo Limited, Excelpoint Technology Ltd ,
and was appointed to our Board on 27 March 2012. He
Mencast Holdings Ltd. and KTL Global Ltd.
is a practising advocate and solicitor of the Supreme
Court of Singapore. Mr. Sunny Wong started his legal
career in 1982 and he is currently the Managing Director
of Wong Tan & Molly Lim LLC. He is also an independent
Mr. Wong holds a Bachelor of Laws (Honours) from the
National University of Singapore.
CHELVA RETNAM RAJAH – INDEPENDENT DIRECTOR
Mr. Chelva Retnam Rajah is our Independent Director
chairman of MPH Limited, and director of United Pulp
and was appointed to our Board on 27 March 2012.
& Paper Co. Ltd. Mr. Rajah also formerly served as
Mr Rajah is currently a partner at Tan Rajah & Cheah,
Advocates & Solicitors (“TRC”). He been a partner at
TRC since 1976. From 1 July 1995 to 30 June 1997, Mr.
Rajah served as Judicial Commissioner of the High Court
of Singapore, after which he rejoined TRC as a partner.
Since 1 April 2003, Mr Rajah has been the non-executive
chairman of Cathay Organisation Holdings Ltd , where
he was also a non-executive director since 7 July 1999.
He is also a director of several companies in the Cathay
Organisation group. Mr. Rajah has been an independent
director of UOB-Kay Hian Holdings Ltd. since August
2000. He was formerly an independent director and
independent director of Overseas Union Enterprise Ltd.
and Kay Hian Holdings Limited (prior to its merger with
certain businesses of United Overseas Bank Limited).
From 1990 to 1992, he served as the President of the
Law Society of Singapore and a Vice President of the
Singapore Academy of Law. He was appointed Senior
Counsel in 1998. Mr. Rajah has served as a Member of
the Military Court of Appeal.
Mr. Rajah obtained his Bachelor of Arts (Jurisprudence)
from Lincoln College, Oxford University. Mr. Rajah is
qualified as a Barrister-at-law (Middle Temple) and an
Advocate & Solicitor in Singapore.
1 3
SENIOR MANAGEMENT
GIUSEPPE CARRABBA
TREVOR WHITE
Mr. Giuseppe Carrabba is our CFO. He joined our
Mr. Trevor White is our General Manager (Operations).
Group in July 2011 and is responsible for the financial
He joined our Group in 2011 and is responsible for
management of our Group. Mr. Carrabba commenced
the management of the construction and fabrication
his career in 1993 in public practice as an accountant.
activities of our Group. Prior to joining our Group, he
In 1999, he was an accountant in Lycopodium
held a number of senior management roles in Jacobs
Ltd, an Australian based engineering and project
Engineering Group Inc. (Formerly Aker Kvaerner) one
management company. In 2002, Mr. Carrabba joined
of the world’s leading and most diverse providers
PMP Print Ltd, a printing and distribution company
of technical, professional and construction services
listed on the Australian Securities Exchange as a
from 1986 to 2011, where his appointments included
commercial manager. In 2007, he joined the Industrial
being national construction manager, site manager
Foundation for Accident Prevention, an independent,
and commissioning engineer. Mr. White holds an
not-for-profit, member-based occupational health and
ordinary national certificate in technical architecture
safety training organisation as chief financial officer.
and ship design from the Longlands College of
Mr. Carrabba holds a Bachelor of Business from
Further Education.
Curtin University of Technology and is a member of
CPA Australia.
COLIN SWAN
GIUSEPPE MACRI
Mr. Colin Brown Swan is our Finance Manager. He
Mr. Giuseppe Macri is our Business Development
joined our Group in 2009 and is responsible for the
Manager. He joined our Group in 2010 and is
day-to-day management of the financial operations
responsible for identifying and targeting new business
of our Group. Prior to joining our Group, from 2008
opportunities, preparing and submitting pre-
to 2009, Mr. Swan was finance manager at Civmec
qualification expressions of interest documentation,
Construction & Engineering Pty Ltd (then a subsidiary
and preparing prospect assessments and process
of VDM Group Limited). From 2002 to 2006, Mr. Swan
evaluation for bidding tenders Prior to joining our Group,
was financial manager at Intervid International, where
Mr. Macri was the business development manager of
he was responsible for implementing various systems
AGC Industries Pty Ltd (a wholly-owned subsidiary of
for the management of accounting and financial
AusGroup Limited). Prior to joining AusGroup Limited,
operations. Mr. Swan is an associate of the Institute
Mr. Macri joined Transfield Construction Pty Ltd in 1967,
of Chartered Secretaries and Administrators (ICSA),
and was appointed general manager of fabrication
a Member of the Institute of Public Accountants, and
operations in Western Australia in 1974, a position
holds a certificate in management from the Graduate
he held until 2002. Mr. Macri brings to our Group
Institute of Management and Technology.
approximately 47 years of experience in the heavy
engineering and construction industry.
A N N U A L R E P O R T 2011/2012
TERENCE HEMSWORTH
RODNEY BOWES
Mr. Terence Hemsworth is our Support Services
Mr. Rodney John Bowes is our Proposals Manager.
Manager. He joined our Group in 2010 and is
He joined our Group in 2010 and is responsible for
responsible for the management and coordination
the management of our Estimating Department, the
of our Support Services Department which
preparation of tenders and contract documentation,
encompasses the functions of human resource
and the negotiation of contracts. Prior to joining our
management, recruitment, industrial relations,
Group, Mr. Bowes was general manager (marketing
commercial, procurement, legal, risk and insurance
and proposals) at Ausgroup Limited for eight years,
and business systems. Mr. Hemsworth’s career
where he was in charge of the management of the
spans more than 40 years in the construction
business development, and the marketing and
and fabrication industry, having worked on major
estimating departments.
projects for the oil and gas, mining, resource and
infrastructure sectors in the United Kingdom, South
Africa, New Zealand, Australia, Singapore and
Malaysia.
1 5
CORPORATE INFORMATION
BOARD OF DIRECTORS
REGISTERED OFFICE
Mr. James Finbarr Fitzgerald (Executive Chairman)
80 Robinson Road,
Mr. Patrick John Tallon (Chief Executive Officer)
#02-00, Singapore 068898
Mr. Kevin James Deery (Chief Operating Officer)
Tel: (65) 6236 3333
Mr. Chong Teck Sin (Lead Independent Director)
Fax: (65) 6236 4399
Mr. Chelva Retnam Rajah (Independent Director)
Mr. Wong Fook Choy Sunny (Independent Director)
AUDIT COMMITTEE
Mr. Chong Teck Sin (Chairman)
Mr. Chelva Retnam Rajah
Mr. Wong Fook Choy Sunny
REMUNERATION COMMITTEE
Mr. Wong Fook Choy Sunny (Chairman)
Mr. Chelva Retnam Rajah
Mr. Chong Teck Sin
NOMINATING COMMITTEE
Mr. Chelva Retnam Rajah (Chairman)
Mr. Wong Fook Choy Sunny
Mr. Chong Teck Sin
RISKS AND CONFLICTS COMMITTEE
Mr. Chong Teck Sin (Chairman)
Mr. Chelva Retnam Rajah
Mr. Wong Fook Choy Sunny
COMPANY SECRETARIES
Ms. Sin Chee Mei
Ms. Ang Siew Koon
PRINCIPAL OFFICE
AND CONTACT DETAILS
16 Nautical Drive,
Henderson WA 6166 Australia
Tel: +61 8 9437 6288
Fax: +61 8 9437 6388
SHARE REGISTRAR AND SHARE
TRANSFER AGENT
Tricor Barbinder Share Registration Services
(a division of Tricor Singapore Pte. Ltd.)
80 Robinson Road, #02-00, Singapore 068898
AUDITORS
Moore Stephens LLP
10 Anson Road, #29-15 International Plaza
Singapore 079903
Partner in Charge: Mr Christopher Johnson
(Appointed since the financial year ended 30 June 2011)
PRINCIPAL BANKER
St George Bank,
Level 2 Westralia Square,167 St Georges Terrace
Perth WA 6000 Australia
CORPORATE WEBSITE
http://www.civmec.com.au
1 7
A N N U A L R E P O R T 2011/2012
FINANCIAL REPORTS
CONTENTS
Report of the Directors
Statement by Directors
Corporate Governance Report
Independent Auditors’ Report
Consolidated Statement of Comprehensive Income
Statements of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
20-25
26
27-43
44-45
46
47
48-49
50-51
52-102
1 9
REPORT OF THE DIRECTORS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS - 30 JUNE 2012
The directors present their report to the members together with the audited consolidated financial statements
of the Group for the financial year ended 30 June 2012 and the statement of financial position of the
Company as at 30 June 2012.
1
Directors
The directors of the Company in office at the date of this report are as follows:
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Wong Fook Choy Sunny
Chelva Retnam Rajah
Executive Chairman
Chief Executive Officer
Chief Operating Officer
Lead Independent Director
Independent Director
Independent Director
2
3
Arrangements to Enable Directors to Acquire Shares or Debentures
Neither at the end of nor at any time during the financial year was the Company a party to any
arrangement whose object was to enable the directors of the Company to acquire benefits by means
of the acquisition of shares or debentures of the Company or any other body corporate, other than as
disclosed under “Share Options” in this report.
Directors’ Interests in Shares or Debentures
According to the register of directors’ shareholdings, none of the directors holding office at the end
of the financial year had any interest in the shares or debentures of the Company or its related
corporations, except as follows:
The Company
(No. of ordinary shares)
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Holdings registered in
name of director or nominee
At
30.6.2012
At
1.7.2011
Holdings in which a director
is deemed to have an interest
At
30.6.2012
At
1.7.2011
-
-
-
-
-
-
97,566,806
97,566,806
13,660,000
-
-
-
There was no change in any of the above-mentioned interests between the end of the financial year
and 21 July 2012.
1
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS - 30 JUNE 2012
4
Directors’ Contractual Benefits
Since the end of the previous financial year, no director has received or become entitled to receive a
benefit by reason of a contract made by the Company or a related corporation with the director or
with a firm of which he is a member or with a company in which he has a substantial financial
interest, except as disclosed in the accompanying notes to the financial statements and in this report,
and except that certain directors have employment relationships with the Company and have
received remuneration in that capacity.
5
Share Options
Civmec Employee Share Option Scheme
The Civmec Employee Share Option Scheme (the “CESOS”) for key management personnel and
employers of the Group formed part of the Civmec Limited prospectus dated 5 April 2012.
The Remuneration Committee (the “RC”) administering the Scheme comprises directors, Mr. Wong
Fook Choy Sunny (Chairman of the Committee), Mr. Chong Tek Sin and Mr. Chelva Retnam Rajah.
The CESOS forms an integral and important component of the employee compensation plan, which
is designed to primarily reward and retain key management and employees of the Company whose
services are integral to the success and the continued growth of the Company.
Principal terms of the Scheme
(i)
Participants
Under the rules of the Scheme, executive and non-executive directors (including
independent directors) and employees of the Company, who are not Controlling
Shareholders or their associates, are eligible to participate in the Scheme.
Persons who are Controlling Shareholders and their Associates shall not participate in the
CESOS unless:
(a)
(b)
(c)
written justification has been provided to Shareholders for their participation at the
introduction of the CESOS or prior to the first grant of Options to them;
the actual number and terms of any Options to be granted to them have been
specifically approved by Shareholders who are not beneficiaries of the grant in a
general meeting in separate resolutions for each such Controlling Shareholder; and
all conditions for their participation in the CESOS as may be required by the
regulation of the SGX-ST from time to time are satisfied.
2
2 1
REPORT OF THE DIRECTORS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS - 30 JUNE 2012
5
Share Options (cont’d)
Civmec Employee Share Option Scheme (cont’d)
Principal terms of the Scheme (cont’d)
(ii)
Size of the Scheme
The aggregate number of new Shares in respect of which Options may be granted on any
date under the CESOS, when added to (i) the number of new Shares issued and issuable in
respect of all Options granted thereunder, and (ii) all new Shares issued and issuable
pursuant to any other share-based incentive schemes of our Company, shall not exceed 15%
of the number of issued Shares on the day immediately preceding the relevant Date of Grant
(or such other limit as the SGX-ST may determine from time to time).
(iii)
Options, Exercise Period and Exercise Price
The Options that are granted under the Scheme may have exercise prices that are, at the
Committee’s discretion, set at a price as quoted on the Singapore Exchange for five market
days immediately preceding the date of grant (the “Market Price”) equal to the weighted
average share price of the shares for the last trading day immediately preceding the relevant
date of grant of the option or at a discount to the Market Price (subject to a maximum
discount of 20%). Options which are fixed at the Market Price (“Market Price Option”) may
be exercised after the first anniversary of the date of grant of that option while options
exercisable at a discount to the Market Price (“Incentive Option”) may only be exercised
after the second anniversary from the date of grant of the option. The vesting of the options
is conditional on the key management personnel or employees completing another two years
of service to the Group and the Group achieving its targets of profitability and sales growth
once the options are vested, they are exercisable for a period of three years.
(iv)
Grant of Options
Under the rules of the Scheme, there are no fixed periods for the grant of options. As such,
offers for the grant of options may be made at any time, from time to time at the discretion
of the Committee.
In addition, in the event that an announcement on any matter of an exceptional nature
involving unpublished price sensitive information is imminent, offers may only be made
after the second market day from the date on which the aforesaid announcement is made.
(v)
Termination of Options
Special provisions in the rules of the Scheme deal with the lapse or earlier exercise of
Options in circumstances which include the termination of the participant’s employment in
the Company, the bankruptcy of the participant, the death of the participant, a take-over of
the Company and the winding-up of the Company.
3
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS - 30 JUNE 2012
5
Share Options (cont’d)
Civmec Employee Share Option Scheme (cont’d)
Principal terms of the Scheme (cont’d)
(vi)
Acceptance of Options
The grant of options shall be accepted within 30 days from the date of offer. Offers of
options made to grantees, if not accepted by the closing date, will lapse. Upon acceptance of
the offer, the grantee must pay the Company a consideration of S$1.
(vii) Duration of the Scheme
The Scheme shall continue in operation for a maximum duration of ten years and may be
continued for any further period thereafter with the approval of the shareholders by ordinary
resolution in general meeting and of any relevant authorities which may then be required.
Options Granted under the Scheme
During the financial year, no options to take up unissued shares of the Company and its
subsidiaries were granted.
Options Exercise
During the financial year, there were no shares of the Company or its subsidiaries issued by
virtue of the exercise of options to take up unissued shares.
Options Outstanding
During the financial year, there were no options to take up unissued shares of the Company
and its subsidiaries were granted.
6
Audit Committee
The members of the Audit Committee at the end of the financial year were as follows:
Chong Teck Sin
Wong Fook Choy Sunny
Chelva Retnam Rajah
Chairman
All members of the Audit Committee were non-executive directors.
4
2 3
REPORT OF THE DIRECTORS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS - 30 JUNE 2012
6
Audit Committee (cont’d)
The Audit Committee carried out its functions in accordance with Section 201B(5) of the Singapore
Companies Act, Cap 50. In performing those functions, the Committee:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
reviewed legal and regulatory matters that may have a material impact on the financial
statements, related compliance policies and programmes and any reports received from
regulators;
reviewed interested person transactions, if any, in accordance with the requirements of the
Singapore Exchange Securities Trading Limited’s Listing Manual;
reviewed the effectiveness of the Company’s material internal controls, including financial,
operational and compliance controls and risk management via reviews carried out by the
external auditors;
reviewed the audit plan of the Company’s independent auditors and, if any, their report on
any recommendations on internal accounting controls arising from the statutory audit;
reviewed the assistance given by the Company’s management to the independent auditors;
reviewed the quarterly and annual statement of financial position of the Company and the
consolidated financial statements of the Group for the financial year ended 30 June 2012
before their submission to the Board of Directors, as well as the independent auditor’s report
on the statement of financial position of the Company and the consolidated financial
statements of the Group; and
recommended to the Board of Directors the independent auditors to be nominated, approve
the compensation of the auditors, and review the scope and results of the audit.
The Audit Committee, having reviewed all non-audit services provided by the external auditors to
the Group, is satisfied that the nature and extent of such services would not affect the independence
of the external auditors. The Audit Committee has also conducted a review of interested person
transactions.
The Audit Committee convened two meetings during the year with full attendance from all members.
The Audit Committee has also met with the external auditors, without the presence of the
Company’s management, at least once a year.
The Audit Committee is satisfied with the independence and objectivity of the independent auditors
and has recommended to the Board of Directors that the auditors, Moore Stephens LLP, be
nominated for re-appointment at the forthcoming Annual General Meeting of the Company.
Based on the internal controls established and maintained by the Group, work performed by the
external auditors and in-house internal auditor, and reviews performed by the management, the
Audit Committee and the Board are of the opinion that the Group’s internal controls, addressing
financial, operational and compliance risks, were adequate as at 30 June 2012.
Further details regarding the Audit Committee are set out in the report on Corporate Governance.
5
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
REPORT OF THE DIRECTORS - 30 JUNE 2012
7
Independent Auditors
Moore Stephens LLP, Public Accountants and Certified Public Accountants, have expressed their
willingness to accept re-appointment as independent auditors.
On behalf of the Board of Directors
…………………………………
James Finbarr Fitzgerald
Chairman
.......................................……….
Patrick John Tallon
Director
Singapore
14th September 2012
6
2 5
STATEMENT BY DIRECTORS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
STATEMENT BY DIRECTORS
30 JUNE 2012
In the opinion of the directors,
(a)
(b)
the statement of financial position of the Company and the consolidated financial statements of the
Group as set out on pages 46 to 102 are drawn up so as to give a true and fair view of the state of
affairs of the Company and of the Group as at 30 June 2012 and of the results of the business, changes
in equity and cash flows of the Group for the financial year then ended; and
at the date of this statement, there are reasonable grounds to believe that the Company and the Group
will be able to pay its debts as and when they fall due.
On behalf of the Board of Directors
…………………………………
James Finbarr Fitzgerald
Chairman
.......................................……….
Patrick John Tallon
Director
14th September 2012
7
A N N U A L R E P O R T 2011/2012
CORPORATE GOVERNANCE REPORT
F I N A N C I A L R E P O R T S
Introduction
The Board of Directors (the “Board”) and the Management of Civmec Limited (“Civmec” or “the
Company”) recognise the importance of good corporate governance in ensuring greater transparency,
protecting the interests of its shareholders as well as strengthening investors’ confidence in its management
and financial reporting and is, accordingly, committed to maintaining a high standard of corporate
governance within the Group.
This Report describes the Company’s corporate governance practices with specific reference to the Code of
Corporate Governance 2005 (“Code”). Where there are deviations from the Code, appropriate explanations
are provided.
Board’s Conduct of Affairs
Principle 1: Effective board to lead and control the Company. The Board is collectively responsible for the
success of the Company. The Board works with Management to achieve this and the Management remains
accountable to the Board.
The primary role of the Board is to protect and enhance long-term shareholders’ value and to ensure that the
Company is run in accordance with best international management and corporate governance practices,
appropriate to the needs and development of the Company.
Apart from its statutory duties and responsibilities, the Board oversees the management and affairs of the
Group and approves the Group’s corporate strategy and direction. The Board is also responsible for
implementing policies in relation to financial matters, which include risk management and internal control
and compliance. In addition, the Board reviews the financial performance of the Group, approves
investment proposals and sets values and standards for the Company and Group.
The Board has delegated the day-to-day management of the Group to Management headed by the Executive
Chairman, Mr James Finbarr Fitzgerald, the Chief Executive Officer, Mr Patrick John Tallon and the Chief
Operating Officer, Mr Kevin James Deery. Matters that are specifically reserved for the approval of the
Board include, among others:
‐ Reviewing the adequacy and integrity of the Group’s internal controls, risk management systems,
compliance and financial reporting systems;
‐ Approving the annual budgets and business plans;
‐ Approving any major investment or expenditure;
‐ Approving material acquisitions and disposal of assets;
‐ Approving the Company’s periodic and full-year results announcements for release to the Singapore
Exchange Securities Trading Limited (“SGX-ST”);
‐ Approving the annual report and audited financial statements;
‐ Monitoring management’s performance;
‐ Recommending share issuance, dividend payments and other returns to shareholders;
‐ Ensuring accurate, adequate and timely reporting to, and communication with Shareholders; and
‐ Assuming responsibility for corporate governance.
8
2 7
CORPORATE GOVERNANCE REPORT
F I N A N C I A L R E P O R T S
Board’s Conduct of Affairs (cont’d)
The Company has adopted a Policy on signing limits, setting out the level of authorisation required for
specific transactions, including those that require Board approval.
All the Board members are actively engaged and play an important role in ensuring good corporate
governance within the Company. Visits to the Company’s business premises are also arranged to acquaint
the non-executive Directors with the Company’s operations and ensure that the Directors are familiar with
the Company’s business, policies and governance practices.
The profile of each Director is presented in the section headed “Board of Directors” of this Annual Report.
The Directors have access to the Company Secretary and Management. They may also seek independent
professional advice concerning the Company’s affairs when necessary. Prior to their respective
appointments to the Board, each of the Directors was given an orientation and induction programme, so as to
familiarise them with the Company’s business activities, strategic directions, policies and key new projects.
In addition, newly appointed directors are also introduced to the senior management team.
To assist in the execution of its responsibilities, the Board has established several Board Committees namely;
Audit Committee (“AC”), Nominating Committee (“NC”), Remuneration Committee (“RC”) and Risks and
Conflicts Committee (“RCC”). These committees function within clearly defined terms of references and
operating procedures, which are reviewed on a regular basis. The effectiveness of these committees is also
constantly monitored and reviewed by the Board. The roles and responsibilities of these committees are
provided for in the latter sections of this report.
The Board meets on a regular basis and as when necessary, to address any specific significant matters that
may arise. Board meetings are scheduled in advance.
The Articles of Association of the Company provide for directors to conduct meetings by teleconferencing
or videoconferencing or other similar means of communication whereby all persons participating in the
meeting are able to hear each other. The Board and Board Committees may also make decisions by way of
circulating resolutions.
9
A N N U A L R E P O R T 2011/2012
Board’s Conduct of Affairs (cont’d)
The number of Board and Board Committee meetings held since the listing of the Company on 13 April
2012 and up to the date the of this report, the attendance of each Director where relevant is as follows :
Board
Audit
Committee
Remuneration
Committee
Nominating
Committee
Board Committees
No. of Meetings Held
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Chelva Retnam Rajah
Wong Fook Choy Sunny
Notes:
* By invitation
2
2
2
2
2
2
2
2
2*
2*
2*
2
2
2
3
2
No. of Meetings Attended
2*
2*
2*
2
2
2
3*
3*
3*
3
3
3
Risks and
Conflicts
Committee
2
2*
2*
2*
2
2
2
Board Composition and Guidance
Principle 2: Strong and independent element on the Board.
The Board comprises six (6) Directors, three (3) of whom are Executive Directors and the remaining three (3)
directors being Independent Directors. The Company has adopted the Code’s definition of “Independent
Director” and its guidance in respect of relationships which would deem a Director to be regarded as non-
independent. This composition exceeds the Code’s requirement of at least one-third of the Board of
Directors to comprise independent Directors.
The Board, in consideration of the complexity and nature of operations of the Company, considers its current
size to be adequate for effective decision-making.
On an annual basis and upon notification by an Independent Director of a change in circumstances, the NC
will review the independence of each Independent Director based on the criteria for independence defined in
the Code and recommends to the Board as to whether the Director is to be considered independent. The NC
has reviewed and determined that the Independent Directors are independent.
In order to strengthen the independence of the Board, the Company has appointed a Lead Independent
Director, Mr Chong Teck Sin, to co-ordinate and lead the Independent Directors and to provide a non-
executive perspective and to contribute a healthy balance of view-points.
10
2 9
CORPORATE GOVERNANCE REPORT
F I N A N C I A L R E P O R T S
Chairman and Chief Executive Officer
Principle 3: Clear division of responsibilities at the top of the Company. Chairman and Chief Executive
Officer to be separate persons to ensure appropriate balance of power, increased accountability and greater
capacity of the Board for independent decision makings.
Mr James Finbarr Fitzgerald is the Executive Chairman of the Company, while Mr Patrick John Tallon is the
Executive Director and Chief Executive Officer (“CEO”).
With the separation of roles, the Chairman will bear responsibility for providing guidance on the corporate
direction of the Group and leadership to the Board, and the CEO will have executive responsibility for the
Company’s business. The Executive Chairman and the Chief Executive Officer are not related.
The Chairman ensures that Board meetings are held when necessary and sets the agenda in consultation with
other Directors. The Chairman reviews all Board papers, prior to their being presented to the Board, and
ensures that Board members are provided with complete, accurate and timely information on a regular basis
to enable them to be fully cognisant of the affairs of the Company.
Board Membership
Principle 4: There should be a formal and transparent process for the appointment of new directors to the
Board.
The Company has established a NC to make recommendations to the Board on all board appointments. The
NC comprises all the three Independent Non-Executive Directors namely Mr Chelva Retnam Rajah, Mr
Wong Fook Choy Sunny and Mr Chong Teck Sin.
The NC is chaired by Mr Chelva Retnam Rajah, who is not associated with any substantial shareholders of
the Company.
According to the written terms of reference of the NC, the NC performs the following functions:
(a)
(b)
(c)
nominate director (including Independent Directors) taking into consideration each Director’s
contribution, performance and ability to commit sufficient time and attention to the affairs of the
Group taking into account the Directors’ respective commitments outside the Group;
review and recommend to the Board the composition of the Audit Committee, Remuneration
Committee and Risks and Conflicts Committee;
re-nominate directors for re-election in accordance with the Articles of Association at each annual
general meeting and having regard to the director’s contribution and performance;
(d)
determine annually whether or not a director of the Company is independent;
(e)
(f)
decide whether or not a director is able to and has been adequately carrying out his duties as a
director.
assess the performance of the Board as a whole and contribution of each director to the effectiveness
of the Board.
11
A N N U A L R E P O R T 2011/2012
Board Membership (cont’d)
The process for the selection and appointment of new Board members is as follows:
•
•
•
•
the NC evaluates the balance of skills, knowledge and experience of the Board and, in light of such
evaluation and in consultation with the Board, prepares a description of the role and the essential and
desirable competencies for a particular appointment;
If required, the NC may engage consultants to undertake research on, or assess, candidates for new
positions on the Board;
the NC meets with short-listed candidates to assess their suitability and to ensure that the candidates are
aware of the expectations; and
the NC makes recommendations to the Board for approval.
Pursuant to the Articles of the Company, all the Directors are required to retire from office at every Annual
General Meeting (“AGM”) of the Company. A retiring Director is eligible and may be nominated for
re-election. However, Mr Chelva Retnam Rajah has notified the Company of his intention not to seek
re-election. Accordingly, Mr Chelva Retnam Rajah will cease to be a Director of the Company at the
conclusion of the forthcoming AGM.
After due review, the Board had accepted the recommendation of the NC and, accordingly, the below named
Directors will be offering themselves for re-election:
1.
2.
3.
4.
5.
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Wong Fook Choy Sunny
The NC evaluated the Board’s performance as a whole and the contribution of each Director to the
effectiveness of the Board. The NC has adopted a formal process and criteria to assess the effectiveness of
the Board and each of the directors. The evaluation is carried out annually.
To-date, none of the Independent Directors of the Group has been appointed as Director of the Company’s
principal subsidiaries. The Board and the Management are of the view that the current Board structure in the
principal subsidiaries are already well organised and constituted. The Board and Management will from time
to time renew the Board Structure of the principal subsidiaries and will make an appropriate corporate
decision to consider the appointment of the Independent Director into the principal subsidiaries.
12
3 1
CORPORATE GOVERNANCE REPORT
F I N A N C I A L R E P O R T S
Board Membership (cont’d)
The date of the Director’s initial appointment, last re-election and their directorships are set out below:
Name of Director
Date of Initial
Appointment
Date of Last
Re-election
Present Directorships
in Listed Companies
Past Directorships in
Listed Companies*
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
27 Mar 2012
27 Mar 2012
27 Mar 2012
27 Mar 2012
-
-
-
-
Chelva Retnam Rajah
27 Mar 2012
-
Wong Fook Choy Sunny
27 Mar 2012
-
* Within the past five years
Notes:
(1)
(2)
Listed on the Hong Kong Stock Exchange
Listed on the Australian Stock Exchange
-
-
-
AVIC International
Investments Limited
Changan Minsheng
APLL Logistics Co.,
Ltd(1)
Blackgold
International
Holdings Limited(2)
InnoTek Limited
AusGroup Limited
-
-
JES International
Holdings Limited
Wanxiang International
Limited
Sihuan Pharmaceutical
Holdings Group Ltd
Beyonics Technology
Limited
Eastgate Technology
Ltd
UOB-Kay Hian
Holdings Limited
Overseas Union
Enterprise Limited
Mencast Holdings
Ltd
KTL Global Ltd
Albedo Limited
Excelpoint
Technology Ltd
Global Testing
Corporation Limited
Advanced Integrated
Manufacturing Corp.
Ltd.
13
A N N U A L R E P O R T 2011/2012
Board Performance
Principle 5: Formal assessment of the effectiveness of the Board as a whole and the contribution by each
director to the effectiveness of the Board.
The NC undertakes an annual formal review and evaluation of both the Board’s performance as a whole, as
well as individual Director’s performance, such as attendance record at meetings and the contribution of
individual Directors, and reports the outcome to the Board. The Chairman of the Board may take actions as
may be appropriate according to the results of the performance evaluation, which will be based on objective
performance criteria proposed by the NC and approved by the Board.
As the Company is recently listed on the SGX-ST, the consideration of the Company’s share price
performance over a five (5) year period is not applicable. However, the Board will review this performance
criterion when relevant.
The NC has assessed the Board’s performance to-date and is of the view that the performance of the Board
as a whole is satisfactory. The NC is satisfied that despite some of the Directors having board
representations in other non-Group Board representations, the Directors are able to and have adequately
carried out their duties as Directors of the Company.
Access to Information
Principle 6: Board members should be provided with complete, adequate and timely information on an on-
going basis.
The Board has separate and independent access to the senior Management of the Company and the Company
Secretaries at all times. Request for information are dealt with promptly by Management. The Board is
informed of all material events and transactions as and when they occur. The Management consults Board
members as necessary and appropriate. Detailed board papers and agenda are sent out to the Directors prior
to each meeting so that all Directors may better understand the issues beforehand, allowing more time at
such meetings for questions and deliberations that the Directors may have.
The Company Secretaries administer, attend and document all Board meetings, and assist the Chairman in
implementing appropriate Board procedures to facilitate effective compliance with the Company’s
Memorandum and Articles of Association. The Company Secretaries also ensure the requirements of the
Companies Act (Chapter 50) of Singapore, Listing Manual and other relevant rules and regulations
applicable to the Company are complied with. The Company Secretaries work together with the respective
divisions of the Company to ensure that the Company complies with all relevant rules and regulations. The
appointment and removal of the Company Secretaries are subject to the approval of the Board.
The Board in fulfilling its responsibilities can, as a collective body or individually as Board members, when
deemed fit, direct the Company, at the Company’s expense, to appoint independent professionals to render
advice.
14
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CORPORATE GOVERNANCE REPORT
F I N A N C I A L R E P O R T S
Remuneration Matters
Principle 7: The policy on executive remuneration and for fixing remuneration packages of individual
directors should be formal and transparent. No director should be involved in deciding his own
remuneration.
The Company had established a RC to make recommendations to the Board on remuneration packages of
individual Directors and key executives. The RC comprises all the three Independent Non-Executive
Directors namely Mr Wong Fook Choy Sunny, Mr Chelva Retnam Rajah and Mr Chong Teck Sin and is
chaired by Mr Wong Fook Choy Sunny.
According to the written terms of reference of the RC, the functions of the RC are as follows:
(a)
recommend to the Board a framework of remuneration for the directors and key management
personnel;
(b)
determine specific remuneration packages for each executive director;
(c)
review annually the remuneration of employees related to the directors and substantial shareholders
to ensure that their remuneration packages are in line with the staff remuneration guidelines and
commensurate with their respective job scopes and level of responsibilities;
(d)
perform such other acts as may be required by the SGX-ST and the Code from time to time.
The recommendations of the RC should be submitted for endorsement by the entire Board. Each member of
the RC shall abstain from voting on any resolutions in respect of his own remuneration packages. Also, in
the event that a member of the RC is related to the employee under review, he will abstain from participating
in the review. Directors shall not be involved in the discussion and in deciding their own remuneration.
The RC has established a framework of remuneration for the Board and key executives covering all aspects
of remuneration but not limited to directors’ fees, salaries, allowances, bonuses, incentives schemes and
benefits-in-kind.
The RC also oversees the administration of the Civmec Employee Share Option Scheme (“Option Scheme”)
(and such other similar share plans as may be implemented by the Company from time to time) upon the
terms of reference as defined in the said Option Scheme. The Option Scheme was established on 27 March
2012 and has a 10 year tenure which expires on 27 March 2022.
15
A N N U A L R E P O R T 2011/2012
Remuneration Matters (cont’d)
Principle 8: Remuneration of directors should be adequate but not excessive. A significant proportion of
executive directors’ remuneration should be structured so as to link rewards to corporate and individual
performance.
In making its recommendations to the Board on the level and mix of remuneration, the RC strives to be
competitive, linking rewards with performance. It takes into consideration the essential factors to attract,
retain and motivate the Directors and senior management needed to run the Company successfully, linking
rewards to corporate and individual performance, and aligning their interest with those of the shareholders.
Staff remuneration comprises a fixed and a variable component, the latter of which is in the form of bonus
linked to the performance of the individual as well as the Company. In addition, short-term and long-term
incentives, such as the Company’s Option Scheme, are in place to strengthen the pay-for-performance
framework by rewarding and recognising the key executives’ contributions to the growth of the Company.
The Company has entered into service agreements with the Executive Directors, Mr James Finbarr
Fitzgerald, Mr Patrick John Tallon and Mr Kevin James Deery. Each service agreement is valid for an initial
period of three years with effect from the date of the Company’s admission to the Official List of the SGX-
ST. Upon the expiry of the initial period of three years, the employment of each Executive Director shall be
renewed for a further three years on such terms as may be agreed by the RC unless either party notifies the
other party by giving three months’ written notice of his intention not to renew the employment. During the
initial period of 3 years, either party may terminate the Service Agreement at any time by giving to the other
party not less than six months’ notice in writing, or in lieu of notice, payment of the amount equivalent to six
months’ salary. The Executive Directors do not receive Directors’ fees. The Executive Directors and senior
Management employees’ remuneration packages are based on service contracts and their remuneration is
determined having due regard to the performance of the individuals, the Group as well as market trends.
The remuneration of the Independent Directors is in the form of a fixed fee which will be subject to
shareholders’ approval at the AGM. Each member of the RC abstains from voting on any resolution,
participating in any deliberation of the RC, and making any recommendation in respect of his remuneration.
16
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CORPORATE GOVERNANCE REPORT
F I N A N C I A L R E P O R T S
Remuneration Matters (cont’d)
Principle 9: Clear disclosure on remuneration level and mix of remuneration, and the procedure for setting
remuneration in the Company’s annual report.
Details of the Directors’ remuneration for the financial year ended 30 June 2012 are set out below:
Remuneration band and
Name of Director
Salary
Bonus
Directors’
Fees
Allowances
and Other
Benefits
S$250,000 to S$499,999
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Below S$250,000
Chong Teck Sin
Chelva Retnam Rajah
Wong Fook Choy Sunny
89%
79%
81%
-
-
-
-
-
-
-
-
-
-
-
-
100%
100%
100%
11%
21%
19%
-
-
-
Total
100%
100%
100%
100%
100%
100%
Details of the remuneration of the Key Executives for the financial year ended 30 June 2012 are set out
below:
Designation
Salary
Bonus
Remuneration band and
Name of Key Executive
S$250,000 to S$499,999
Terence Hemsworth
Giuseppe Macri
Rodney John Bowes
Trevor White
Colin Brown Swan
Support Services
Manager
Business
Development
Manager
Proposals Manager
General Manager
(Operations)
Finance Manager
Below S$250,000
Giuseppe Carrabba (1)
Chief
Financial Officer
82%
82%
81%
74%
88%
79%
-
-
-
14%
-
-
Allowances
and Other
Benefits
18%
18%
19%
12%
12%
Total
100%
100%
100%
100%
100%
21%
100%
Note:
(1) Mr Giuseppe Carrabba joined our Group in July 2011.
The Company does not have any employees who are immediate family members of a Director or the
controlling shareholders during the financial year ended 30 June 2012.
17
A N N U A L R E P O R T 2011/2012
Accountability and Audit
Principle 10: The Board should present a balanced and understandable assessment of the Company’s
performance, position and prospects.
The Board is responsible to provide a balanced and understandable assessment of the Company’s
performance, position and prospects, to its shareholders, the public and regulators. The Board is accountable
to its shareholders and is mindful of its obligations to furnish timely information and to ensure full
disclosure of material information to its shareholders in compliance with the statutory requirements and the
Listing Manual.
Price sensitive information will be publicly released either before the Company meets with any of the
Company’s investors or analysts or simultaneously with such meetings. Financial results and statutory
corporate announcements of the Company are disseminated through announcements via SGXNET.
Principle 11 - Establish an Audit Committee with written terms of reference which clearly set out its
authority and duties.
The AC comprises all the three Non-Executive Independent Directors namely Mr Chong Teck Sin,
Mr Chelva Retnam Rajah and Mr Wong Fook Choy Sunny. The AC is chaired by Mr Chong Teck Sin.
The Board ensures that the members of the AC are appropriately qualified to discharge their responsibilities
and they possess the requisite accounting and financial management expertise and experience.
The AC is governed by its terms of reference which highlights its primary responsibilities as follows:
(a)
(b)
(c)
(d)
to assist the Board in discharging their responsibility to safeguard the assets, maintain adequate
accounting records, and develop and maintain effective systems of internal control with the overall
objective of ensuring that management creates and maintains an effective control environment in the
Group.
to provide a channel of communication between the Board, the management team, and external
audits on matters relating to audit.
to monitor management’s commitment to the establishment and maintenance of a satisfactory
control environment and an effective system of internal control (including any arrangements for
internal audit);
to monitor and review the scope and results of external audit and its cost effectiveness and the
independence and objectivity of the external auditors.
18
3 7
CORPORATE GOVERNANCE REPORT
F I N A N C I A L R E P O R T S
Accountability and Audit (cont’d)
In addition, the functions of the AC shall be as follows:
(a)
(b)
(c)
(d)
(e)
(f)
(g)
(h)
(i)
(j)
review with the external auditors the audit plans, their evaluation of the system of internal controls,
their management letter and the management’s response thereto;
review with the internal auditors the internal audit plans and their evaluation of the adequacy of
internal control and accounting system before submission of the results of such review to the Board
for approval;
review the half yearly and, where applicable, quarterly, and annual financial statements and any
formal announcements relating to the Group’s financial performance before submission to the Board
for approval, focusing in particular, on changes in accounting policies and practices, major risk
areas, significant adjustments resulting from the audit, compliance with accounting standards and
compliance with the Listing Manual and any other relevant and statutory or regulatory requirements;
review the internal control and procedures and ensure co-ordination between the external auditors
and management, review the assistance given by management to the auditors, and discuss problems
and concerns, if any, arising from the interim and final audits, and any matters which the auditors
may wish to discuss (in the absence of management where necessary);
review and consider the appointment or re-appointment of the external auditors and matters relating
to resignation or dismissal of the auditors;
review interested person transactions (if any) falling within the scope of Chapter 9 of the Listing
Manual;
review the Groups’ hedging policies, procedures and activities (if any) and monitor the
implementation of the hedging procedure/policies, including reviewing the instruments, processes
and practices in accordance with any hedging polices approved by our Board.
review potential conflicts of interest, if any, and to set out a framework to resolve or mitigate such
potential conflict of interest;
undertake such other reviews and projects as may be requested by the Board and report to the Board
its findings from time to time on matters arising and requiring the attention of the Audit Committee;
review and discuss with investigators, any suspected fraud, irregularity, or infringement of any
relevant laws, rules or regulations, which has or is likely to have a material impact on the Group’s
operating results or financial position, and management’s response thereto;
19
A N N U A L R E P O R T 2011/2012
Accountability and Audit (cont’d)
(k)
(l)
(m)
(n)
(o)
(p)
generally to undertake such other functions and duties as may be required by statute or the Listing
Manual, and by such amendments made thereto from time to time;
review the effectiveness and adequacy of administrative, operating, internal accounting and financial
control procedures;
review the findings of internal investigations into matters where there is any suspected fraud or
irregularity, or failure of internal controls or infringement of any law, rule or regulation which has or
is likely to have material impact on the Group’s operating results and/or financial position.
review key financial risk areas, with a view to providing an independent oversight on the Group’s
financial reporting, the outcome of such review to be disclosed in the annual report or if the findings
are material, to be immediately announced via SGXNET;
review arrangements by which staff may, in confidence, raise concerns about possible improprieties
in matters of financial reporting and to ensure that arrangements are in place for the independent
investigations of such matter and for appropriate follow-up; and
review the Group’s compliance with such functions and duties as may be required under the relevant
statutes or the Listing Manual, including such amendments made thereto from time to time.
The AC has the power to conduct or authorize investigations into any matters within its scope of
responsibility. The AC is authorized to obtain independent professional advice whenever deemed necessary
for the discharge of its responsibilities. Such expenses will be borne by the Company.
The AC has the co-operation of and complete access to the Company’s management. It has full discretion to
invite any director or executive officer to attend the meetings, and has been given reasonable resources to
enable the discharge of its functions.
As at the Report date, the AC has:
(a)
(b)
(c)
(d)
(e)
reviewed the scope of work of the external auditors;
reviewed the audit plans and discuss the results of the respective findings and their evaluation of the
Company’s system of internal accounting controls;
reviewed the interested person transactions of the Company;
met with the Company’s external auditors without the presence of the management; and
reviewed the external auditors’ independence and objectivity.
20
3 9
CORPORATE GOVERNANCE REPORT
F I N A N C I A L R E P O R T S
Accountability and Audit (cont’d)
The AC has reviewed the external auditors’ non-audit services and is satisfied that the nature and extent of
such services have not prejudiced the independence and objectivity of the external auditors. The AC
recognises the need to maintain a balance between the independence and objectivity of the external auditors
and the work carried out by the external auditors based on value for money consideration.
The aggregate amount of non-audit fees paid to the external auditors amounted to approximately $12,000 for
tax services and $175,000 for the initial public offering (the “IPO”) work during the financial year under
review.
The AC has recommended to the Board the re-appointment of Messrs Moore Stephens LLP as the
Company’s external auditors.
The Company confirms that Rules 712 and 715 of the Listing Manual have been complied with.
The Company has established the whistle-blowing policy where staff of the Group may, in confidence, raise
concerns about possible improprieties in matters of financial reporting, fraudulent acts and other matters, and
ensure that arrangements are in place for independent investigations of such matters and for appropriate
follow up actions.
Principle 12 - Maintains a sound system of internal controls to safeguard the shareholders’ investments and
the Company’s assets.
The Group’s internal controls and systems are designed to provide reasonable assurance as to the integrity
and reliability of the financial information and to safeguard and maintain accountability of assets.
Procedures are in place to identify major business risks and evaluate potential financial effects, as well as for
the authorisation of capital expenditure and investments.
The external auditors carry out, in the course of their statutory audit, an annual review of the effectiveness of
the Group’s key internal controls, including financial, operational and compliance controls as well as risk
management to the extent of their scope as laid out in their audit plan. Any material weaknesses in internal
controls, together with recommendation for improvement, are reported to the AC.
It is the opinion of the Board that, in the absence of evidence to the contrary, the system of internal controls
maintained by the Company’s Management and that was in place throughout the financial year and up to the
date of this report provides reasonable, but not absolute, assurance against material financial misstatements
or losses, and includes the safeguarding of assets, the maintenance of proper accounting records, the
reliability of financial information, compliance with appropriate legislation, regulations and best practices,
and the identification and containment of financial, operational and compliance risks.
21
A N N U A L R E P O R T 2011/2012
Accountability and Audit (cont’d)
The Board notes that all internal control systems are designed to manage rather than eliminate risks and no
system of internal controls could provide absolute assurance against the occurrence of material errors, poor
judgment in decision-making, human error losses, fraud or other irregularities.
Principle 13 - Establish an internal audit function that is independent of the activities it audits.
The Board recognises the importance of maintaining an internal audit function, independent of the activities
it audits, to maintain a sound system of internal control within the Company to safeguard shareholders’
investments and Company’s assets.
The Company’s internal audit function is outsourced to Messrs Deloitte Touche Tohmatsu, who is
independent of the Company’s business activities. The internal auditors conduct audits based on the
standards set by internationally recognized professional bodies. The internal audit plan is submitted to the
AC for approval prior to the commencement of the internal audit work. The internal auditors review the
effectiveness of key internal controls in accordance with the internal audit plan. The internal auditors have a
direct and primary reporting line to the AC and assist the AC in overseeing and monitoring the
implementation and improvements required on internal control weaknesses identified.
The role of the Internal Auditors is to support the AC in ensuring that the Group maintains a sound system
of internal controls by monitoring and assessing the effectiveness of key controls and procedures,
conducting in-depth analysis of high risk areas and undertaking investigations as directed by the AC.
The Company has established an in-house internal audit function to document the procedures across the
financial, production, compliance and information technology functions in order to identify and manage
process risks.
The Company has a Risks and Conflicts Committee which is in the process of finalizing the Company’s risk
management policy and procedures.
Communication with Shareholders
Principle 14: Companies should engage in regular, effective and fair communication with shareholders.
The Company is committed to regular and open communication with its shareholders. In line with
continuous obligations of the Company pursuant to the Listing Manual. The Board’s policy is that all
shareholders should be equally informed of all major developments impacting the Company.
Information is disseminated to shareholders on a timely basis through:
‐ SGXNET announcements;
‐
‐
annual reports prepared and issued to all shareholders;
quarterly and annual financial statements containing a summary of the financial information and
affairs of the Company for the period; and
notices of general meetings.
‐
22
4 1
CORPORATE GOVERNANCE REPORT
F I N A N C I A L R E P O R T S
Communication with Shareholders (cont’d)
Principle 15: Companies should encourage greater shareholder participation at AGMs, and allow
shareholders the opportunity to communicate their views on various matters affecting the company.
At the AGM, shareholders are given the opportunity to voice their views and seek clarification on questions
regarding the Company. The Directors, Management and the external auditors are normally available at the
AGM to answer shareholders’ queries.
Resolutions are, as far as possible, structured separately and may be voted on independently.
The Group fully supports the Code’s principle to encourage shareholders’ participation. The Company’s
Articles of Association allows the appointment of one or two proxies by shareholders, to attend the AGM
and vote in his/her place. Shareholders who hold shares through nominees are allowed, upon prior request
through their nominees, to attend the general meetings as proxies without being constrained by the two-
proxy requirement.
The Company, however, has not implemented measures to allow shareholders who are unable to vote in
person at the Company’s AGM the option to vote in absentia, such as via mail, electronic mail or facsimile
transactions.
Other Governance Practices
Material Contracts
Saved as disclosed under “Material Contracts” in the Company’s offer document dated 5 April 2012 “Offer
Document”), there were no new material contracts of the Company and its subsidiaries, including loans,
involving the interests of any Director, the CEO or the controlling shareholders during the financial year
ended 30 June 2012.
Interested Person Transactions
The Company has established procedures to ensure that all transactions with interested persons are reported
in a timely manner to the AC and these interested persons transactions are conducted on an arm’s length
basis and are not prejudicial to the interests of the shareholders.
Save as disclosed under “Interested Persons Transactions” in the Company’s Offer Document, there were no
other interested person transactions of S$100,000 or more between the Company or its subsidiaries and any
of its interested persons subsisting at the end of the financial year ended 30 June 2012.
23
A N N U A L R E P O R T 2011/2012
Other Governance Practices (cont’d)
Dealing in Securities
The Company has in place a policy prohibiting share dealings by Directors and employees of the Company
when in possession of price sensitive information and for the period of two weeks before the release of
quarterly results and one month before the release of the full-year results, with the restriction ending on the
day after the announcement of the relevant results. Directors and employees are expected to observe the
insider trading laws at all times even when dealing in securities within permitted trading periods. An officer
should also not deal in the Company’s securities on short-term consideration and/or possession of
unpublished material price-sensitive information relating to the relevant securities.
Risk Management
The RCC comprises all the Independent Directors. The Chairman of the RCC is Mr Chong Teck Sin.
The RCC has been set up to assist the Board in carrying out its responsibilities by reviewing the types and
levels of risks undertaken by the Group and any conflicts of interests encountered by the Group, and
recommending and approving the policies and procedures for monitoring and managing such risks and
conflicts of interests. The RCC will also be responsible for monitoring the risks associated with the
operations of the Group. Each member of the RCC is required to be independent from any management and
business relationship with the Group, and the Substantial Shareholders.
The RCC and Management regularly reviews the Company’s business and operational activities to identify
areas of significant business risks as well as appropriate measures to control and mitigate these risks. The
Management reviews all significant control policies and procedures and highlights all significant matters to
the Directors and the RCC.
Utilisation of Proceeds
As at 30 June 2012, the total net proceeds from the initial public offering on 13 April 2012 has been utilised
as follows:
Amounts
deployed as of
30 June 2012
(S$’000)
231
115
-
346
Balance to be
deployed
(S$’000)
5,769
2,885
9,090
17,744
Use of Proceeds
Proceeds Allocated
(S$’000)
Building of office – relocation to larger
premises
Investment into additional fixed assets for
expansion into Structural, Mechanical and
Piping
Working capital/provision of performance
and warranty guarantees
Total
6,000
3,000
9,090
18,090
24
4 3
INDEPDENDENT AUDITORS’ REPORT
F I N A N C I A L R E P O R T S
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
CIVMEC LIMITED
(Incorporated in Singapore)
We have audited the accompanying financial statements of Civmec Limited (the “Company”) and its
subsidiaries (collectively referred to as the “Group”) as set out on pages 46 to 102, which comprise the
consolidated statement of financial position and the statement of financial position of the Company as at
30 June 2012, and the consolidated statement of comprehensive income, consolidated statement of changes
in equity and consolidated statement of cash flows for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation of the financial statements that give a true and fair view in
accordance with the provisions of the Singapore Companies Act (the “Act”) and Singapore Financial
Reporting Standards, and for devising and maintaining a system of internal accounting controls sufficient to
provide a reasonable assurance that assets are safeguarded against loss from unauthorised use or disposition;
and transactions are properly authorised and that they are recorded as necessary to permit the preparation of
true and fair profit and loss accounts and balance sheets and to maintain accountability of assets.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted
our audit in accordance with Singapore Standards on Auditing. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of
the risks of material misstatement of the financial statements, whether due to fraud or error. In making those
risk assessments, the auditor considers internal controls relevant to the entity’s preparation of financial
statements that give 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 entity’s internal
controls. An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by management, as well as evaluating the overall presentation
of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
audit opinion.
25
A N N U A L R E P O R T 2011/2012
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
CIVMEC LIMITED
(Incorporated in Singapore)
(cont’d)
Opinion
In our opinion, the consolidated financial statements of the Group and the statement of financial position of
the Company are properly drawn up in accordance with the provisions of the Act and Singapore Financial
Reporting Standards so as to give a true and fair view of the state of affairs of the Group and of the
Company as at 30 June 2012 and the results, changes in equity and cash flows of the Group for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
In our opinion, the accounting and other records required by the Act to be kept by the Company have been
properly kept in accordance with the provisions of the Act.
Moore Stephens LLP
Public Accountants and
Certified Public Accountants
Singapore
14th September 2012
26
4 5
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2012
Revenue
Cost of sales
Gross profit
Other income
Share in profit of a joint venture
Administrative expenses
Finance costs
Profit before income tax
Income tax expense
Profit for the year
Other comprehensive income:
Exchange differences on re-translation from functional
currency to presentation currency
Total comprehensive income for the year
Profit attributable to:
Owners of the Company
Non-controlling interest
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interest
Note
Group
2012
S$’000
2011
S$’000
4
4
17
7
5
8
328,654
(267,860)
61,007
(41,060)
60,794
19,947
1,514
234
(17,866)
(1,483)
43,193
(12,883)
316
-
(7,588)
(1,557)
11,118
(3,596)
30,310
7,522
185
30,495
30,310
-
30,310
30,495
-
30,495
1,334
8,856
7,523
(1)
7,522
8,857
(1)
8,856
Earnings per share attributable to equity holders of the
Company (cents per share):
− Basic
− Diluted
9
9
6.05
6.05
1.50
1.50
The accompanying notes form an integral part of the consolidated financial statements.
27
A N N U A L R E P O R T 2011/2012
STATEMENTS OF FINANCIAL POSITION
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2012
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Non-current assets
Investment in joint venture
Investments in subsidiaries
Loans receivable
Property, plant and equipment
Intangible assets
Deferred tax assets
TOTAL ASSETS
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Borrowings
Payable to related parties
Provisions
Current tax liabilities
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
TOTAL LIABILITIES
Capital and Reserves
Share capital
Other reserves
Retained earnings /(accumulated losses)
Total equity attributable to the Owners
of the Company
Non-controlling interest
TOTAL EQUITY
Group
Note
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
12
10
11
17
16
13
14
15
8
18
19
26
21
19
21
8
22
23
33,801
86,620
337
120,758
232
-
-
55,885
13
2,470
58,600
6,620
20,403
492
27,515
-
-
-
44,439
13
833
45,285
1,295
5,082
-
6,377
-
9,792
37,380
-
-
-
47,172
20
742
-
762
-
-
19,638
-
-
-
19,638
179,358
72,800
53,549
20,400
58,215
3,318
123
3,400
13,852
78,908
10,055
642
341
11,038
11,287
1,585
21
621
3,663
17,177
33,856
211
261
34,328
359
-
901
-
-
1,260
741
-
21
-
-
762
-
-
-
-
19,472
-
-
19,472
89,946
51,505
1,260
20,234
37,864
10,479
41,070
89,413
(1)
89,412
-
10,536
10,760
21,296
(1)
21,295
37,864
10,432
3,993
52,289
-
52,289
-
247
(81)
166
-
166
TOTAL LIABILITY AND EQUITY
179,358
72,800
53,549
20,400
The accompanying notes form an integral part of the consolidated financial statements.
28
4 7
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2012
Share
capital
S$’000
Merger
reserve
S$’000
Other reserves
Option
premium on
convertible
loans
S$’000
Foreign
currency
translation
reserve
S$’000
Retained
earnings
S$’000
Total
S$’000
Non-
controlling
interest
S$’000
Total
S$’000
-*
-
125
18,919
20,400
(1,580)
37,864
9,010
242
1,284
10,760
21,296
(1)
21,295
-
-
-
-
-
9,010
-
-
(242)
-
-
-
185
30,310
30,495
-
-
-
-
1,469
-
-
-
-
41,070
125
18,677
20,400
(1,580)
89,413
-
-
-
-
-
(1)
30,495
125
18,677
20,400
(1,580)
89,412
Group
2012
Balance as at 1 July 2011
Total comprehensive income
for the year
Issuance of shares pursuant to
increase capital contribution
Issuance of shares pursuant to
conversion
Issuance of shares pursuant
to the Initial Public Offering (IPO)
Costs direct attributable to IPO
Balance at 30 June 2012
* Less than S$500
The accompanying notes form an integral part of the consolidated financial statements.
29
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2012
(cont’d)
Group
2011
Balance as at 1 July 2010
Total comprehensive income
for the year
Issuance of convertible loan - equity
component
Issuance of shares of subsidiary
company
Adjustment pursuant to
Restructuring Exercise
Balance at 30 June 2011
* Less than S$500
Other reserves
Option
premium
on
convertible
loans
S$’000
Foreign
currency
translation
reserve
S$’000
Retained
earnings
S$’000
Total
S$’000
Non-
controlling
interest
S$’000
Total
S$’000
83
-
159
-
-
242
(50)
1,334
-
-
3,237
12,280
7,523
8,857
-
-
159
-
-
1,284
-
10,760
-
21,296
-
(1)
-
-
-
(1)
12,280
8,856
159
-
-
21,295
Share
capital
S$’000
Merger
reserve
S$’000
9,010
-
-
-
-
-
-
-
(9,010)
-*
9,010
9,010
The accompanying notes form an integral part of the consolidated financial statements.
30
4 9
CONSOLIDATED STATEMENT OF CASH FLOWS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2012
Cash Flows from Operating Activities
Profit before income tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of management fee
(Gain)/Loss on disposal of property, plant and equipment
Share of profit in joint venture
Write-back of interest on convertible loans
Finance cost
Interest income
Unrealised foreign exchange differences
Operating cash flow before working capital changes
Changes in working capital:
Increase in trade and other receivables
Increase in other current assets
Increase in trade and other payables
Increase in provisions
Cash generated from operations
Interest received
Finance cost paid
Income taxes paid
Net cash generated by operating activities
Cash Flows from Investing Activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from issuance of shares
IPO expenses deducted from proceeds
Proceeds from borrowings
Repayment of borrowings
Advances from related parties
Payment of management fee
Proceeds from issuance of convertible loan
Proceeds from loans from related parties
Repayment of loans from related parties
Net cash generated by financing activities
Note
Group
2012
S$’000
2011
S$’000
14
17
4
7
4
14
30
43,193
4,160
422
(78)
(234)
(809)
1,483
(618)
(6)
47,513
(66,218)
(267)
46,930
3,210
31,168
618
(1,483)
(4,159)
26,144
333
(16,516)
(16,183)
20,525
(1,580)
9,355
(11,755)
105
-
-
-
-
16,650
11,118
1,747
473
44
-
-
1,557
(316)
(1)
14,622
(13,633)
(67)
2,931
521
4,374
316
(780)
(2,216)
1,694
12
(30,809)
(30,797)
-
-
16,233
(646)
21
(639)
12,983
32
(4,627)
23,357
The accompanying notes form an integral part of the consolidated financial statements.
31
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2012
(cont’d)
Note
Group
2012
S$’000
2011
S$’000
Net increase/(decrease) in cash and cash equivalents
Effects of currency translation on cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Less: Deposit pledged
Cash and cash equivalents at the end of the financial year
Analysis of cash and cash equivalents:
Cash on hand and in banks
Less: Deposits pledged
12
26,611
570
6,620
(1,009)
32,792
33,801
(1,009)
32,792
(5,746)
1,111
11,255
(1,022)
5,598
6,620
(1,022)
5,598
The accompanying notes form an integral part of the consolidated financial statements.
32
5 1
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
These notes form an integral part of and should be read in conjunction with the accompanying financial
statements.
1
General Information
(a)
The Company
Civmec Limited (the “Company”) was incorporated in the Republic of Singapore on 3 June 2010
under the Singapore Companies Act, Cap. 50 (the “Act”) as an investment holding company for the
purpose of acquiring the subsidiary companies pursuant to the Restructuring Exercise. On the
29 March 2012 the company changed its name to Civmec Limited. The Company was listed on the
Singapore Exchange Securities Ltd (SGX-ST) since 13 April 2012.
The registered office and principal place of business of the Company is at 80 Robinson Road
#02-00, Singapore 068898.
The principal activity of the Company is that of an investment holding company. The principal
activities of its subsidiaries are set out in Note 16.
The financial statements for the financial year ended 30 June 2012 were authorised for issue on the
date of the statement by the directors.
(b)
Group Restructuring Exercise
On 27 March 2012, the Company undertook a reorganisation of the corporate structure to streamline
and rationalise the Group’s structure and business pursuant to which the Company became the
holding company of the Group.
(i)
Acquisition of CCE by the Company
On 27 March 2012, the Company entered into a share swap agreement with the Shareholders of
Civmec Construction & Engineering Pty Ltd (“CCE”) to acquire 100% of the issued and paid-up
share capital of CCE from the Shareholders. The consideration was satisfied by the allotment and
issuance of 323,938,000 ordinary shares in the Capital of the company, in the same proportions in
which they held CCE Shares (Notes 16 and 22).
33
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
1
General Information (cont’d)
(b)
(i)
Group Restructuring Exercise (cont’d)
Acquisition of CCE by the Company (cont’d)
After the completion of the Group Restructuring Exercise, the Company has the following
controlled entities:
Name of subsidiaries
Date and place
of incorporation
and principal
place of business
Civmec Construction &
Engineering Pty Ltd
22 June 2009
(Australia)
Principal
activities
Cost of
investment (A$)
% of equity held
by the Company
7,578,683
100%
Civil construction
Structural
Mechanical
Process piping
(SMP)
Civmec Holdings Pty Ltd
30 June 2009
(Australia)
Asset holding
company
120
100%
(held by CCE)
Ballymount Holdings Pty
Ltd
17 January 2005
(Australia)
Asset holding
company
2,288,930
100%
(held by CCE)
Civmec Pipe Products
Pty Ltd
28 June 2010
(Australia)
Asset holding
company
835
83.5%
(held by CCE)
2
Significant Accounting Policies
(a) Basis of Preparation
The Group is regarded as a continuing entity resulting from the Group Restructuring Exercise since
all the entities which took part in the Group Restructuring are deemed to be controlled by the same
ultimate controlling parties, James Finbarr Fitzgerald and Olive Theresa Fitzgerald (acting as
trustees for the JF & OT Fitzgerald Family Trust) and Goldfirm Pty Ltd (acting as trustee for the
Kariong Investment Trust). Consequently, immediately after the Group Restructuring, there is a
continuation of the risks and benefits to the ultimate controlling parties that exist prior to the Group
Restructuring Exercise. The Group Restructuring Exercise has been accounted for as a restructuring
under common control in a manner similar to pooling of interests.
Accordingly, the financial statements for the financial year ended 30 June 2012 have been prepared
on the basis of merger accounting and comprise the audited financial statements of the entities
which are under common control of the ultimate controlling parties that exist before and after the
Group Restructuring Exercise.
In applying merger accounting, financial statement items of the combining entities or businesses for
the reporting period in which the common control combination occurs and for any comparative
periods disclosed, are included in the financial statements of the entity as if the combination had
occurred from the date when the combining entities or businesses first came under the control of the
controlling party or parties.
34
5 3
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(a)
Basis of Preparation (cont’d)
A single uniform set of accounting policies is adopted by the entity. Therefore, the entity recognises
the assets, liabilities and equity of the consolidated entities or businesses at the carrying amounts in
the financial statements of the controlling party or parties prior to the common control combination.
There is no recognition of any goodwill or excess of the acquirer’s interest in the net fair value of
the acquiree’s identifiable assets, liabilities and contingent liabilities over cost at the time of the
common control combination. The effects of all transactions between the consolidated entities or
businesses, whether occurring before or after the combination, are eliminated in preparing the
consolidated financial statements of the entity.
The financial statements have been prepared in accordance with Singapore Financial Reporting
Standards (“FRS”) and have been prepared under the historical cost convention, except as disclosed
in the accounting policies below.
The preparation of financial statements in conformity with FRS requires management to exercise
judgement in the process of applying the Group’s critical accounting policies and requires the use of
certain critical accounting estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and contingent liabilities at the reporting dates, and the
reported amounts of revenue and expenses during the relevant periods. Although these estimates are
based on management’s best knowledge of historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances, actual
results may differ from those estimates. The estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate
is revised if the revision affects only that year or in the year of the revision and future years if the
revision affects both current and future years.
Critical accounting judgements and key sources of estimation uncertainty used that are significant to
the financial statements are disclosed in Note 3 to the financial statements.
(b)
(i)
Adoption of New/Revised Singapore Financial Reporting Standards
New or Revised FRS Effective in the Current Year
For the financial year ended 30 June 2012, the Group and the Company has adopted the
following relevant new or revised FRS that are mandatory for application for the period.
Changes to the Group’s and the Company’s accounting policies have been made as required,
in accordance with the transitional provisions in the respective FRS.
Amendments to FRS 1
Presentation of Financial Statements
FRS 1 clarifies that the analysis of the components of other comprehensive income by item
can be presented either in the statement of changes in equity or within the notes to the
financial statements. The changes are effective for accounting periods beginning on or after
1 January 2011. As this is a disclosure standard, it has no impact on the financial position
and financial performance of the Group.
35
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(b)
Adoption of New/Revised Singapore Financial Reporting Standards (cont’d)
(i)
New or Revised FRS Effective in the Current Year (cont’d)
FRS 24
Related Party Disclosures (Revised)
The revised FRS 24 clarifies the definition of a related party to simplify the identification of
such relationships and to eliminate inconsistencies in its application. The revised FRS 24
expands the definition of a related party and would treat two entities as related to each other
whenever a person (or a close member of that person’s family) or a third party has control or
joint control over the entity, or has significant influence over the entity. The revised
standard also introduces a partial exemption of disclosure requirements for government-
related entities. The revised FRS 24 applies retrospectively for annual periods beginning on
or after 1 January 2011 but earlier application is permitted. As this is a disclosure standard,
it has no impact on the financial position or financial performance of the Group.
Amendments to FRS 107
Financial Instruments: Disclosures
The amendments to FRS 107 include removal of the requirement to disclose the carrying
amount of negotiated financial assets that would be past due or impaired if not for the
renegotiation. Clarification that disclosure of the amount that best represents the maximum
exposure to credit risk is not required when this amount is represented by the carrying
amount of the financial instrument and the requirement to disclose fair value of collateral
and other credit enhancements is replaced with a description to disclose the financial effect
of collateral and other credit enhancements. As this is a disclosure standard, it has no impact
on the financial position or financial performance of the Group when implemented.
(ii)
New or revised FRS issued but not yet effective
At the date of authorisation of these financial statements, the Group and the Company has
not applied the following new or revised FRS that have been issued and which are relevant
to the Group and the Company but will only be effective for the Group for annual periods
beginning 1 July 2012 onwards. The Group and the Company anticipate that these changes
will have no material effect on the financial statements upon adoption.
Amendments to FRS 12
Deferred Tax: Recovery of Underlying Assets
The amendments provide that where investment properties are measured using the fair value
model in FRS 40 Investment Property, then there is a rebuttable presumption that the
carrying amount will be recovered through sale and where non-depreciable assets are
measured using the revaluation model under FRS 16 Property, Plant and Equipment, that
the tax rate must be applied in determining any deferred tax assets or liability is that to be
recovered through sale. The changes are effective for accounting periods beginning on or
after 1 January 2012. The Group will determine the impact of these amendments when it
becomes effective.
36
5 5
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(b)
Adoption of New/Revised Singapore Financial Reporting Standards (cont’d)
(ii)
New or revised FRS issued but not yet effective (cont’d)
Amendment to FRS 1
Presentation of Items of Other Comprehensive Income
The amendment to FRS 1 Presentation of Items of Other Comprehensive Income requires
entities to group items presented in other comprehensive income (OCI) on the basis of
whether they are potentially reclassifiable to profit or loss. It is effective for annual periods
beginning on or after 1 July 2012. As this is a disclosure standard, it will not have any
impact on the financial performance or the financial position of the Group when
implemented.
FRS 27
Separate Financial Statements (Revised)
FRS 27 Separate Financial Statements (Revised) will now solely address separate financial
statements, the requirements for which are substantially unchanged. It is effective for
annual periods beginning on or after 1 January 2014 and will not have any impact on the
financial performance or the financial position of the Group when implemented.
FRS 28
Investments in Associates and Joint Ventures (Revised)
FRS 28 Investments in Associates and Joint Ventures (Revised) changes in scope as a result
of the issuance of FRS 111 Joint Arrangements. It continues to prescribe the mechanics of
equity accounting. It is effective for annual periods beginning on or after 1 January 2014.
The Group will determine the impact of this standard when it becomes effective.
FRS 110
Consolidated Financial Statements
FRS 110 Consolidated Financial Statements supersedes FRS 27 Consolidated and Separate
Financial Statements and INT FRS 12 Consolidation - Special Purpose Entities, which is
effective for annual periods beginning on or after 1 January 2014. It changes the definition
of control and applies it to all investees to determine the scope of consolidation. FRS 110
requirements will apply to all types of potential subsidiary. FRS 110 requires an investor to
reassess the decision on whether to consolidate an investee when events indicate that there
may be a change to one of the three elements of control, i.e. power, variable returns and the
ability to use power to affect returns. The Group will determine the impact of this standard
when it becomes effective.
FRS 112
Disclosure of Interests in Other Entities
FRS 112 Disclosure of Interests in Other Entities, which is effective from 1 January 2014
combines the disclosure requirements for subsidiaries, joint arrangements, associates and
structured entities within a comprehensive disclosure standard. FRS 112 specifies minimum
disclosures that an entity must provide. It requires an entity to provide summarised financial
information about the assets, liabilities, profit or loss and cash flows of each subsidiary that
has non-controlling interests that are material to the reporting entity and to disclose the
nature of its interests in unconsolidated structured entities and the nature of the risks it is
exposed to as a result. As this is a disclosure standard, it will not have any impact on the
financial performance or the financial position of the Group when implemented.
37
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(b)
Adoption of New/Revised Singapore Financial Reporting Standards (cont’d)
(ii)
New or revised FRS issued but not yet effective (cont’d)
FRS 113
Fair Value Measurement
FRS 113 Fair Value Measurement provides guidance on how to measure fair values
including those for both financial and non-financial items and introduces significantly
enhanced disclosures about fair values. It does not address or change the requirements on
when fair values should be used. When measuring fair value, an entity is required to use
valuation techniques that maximise the use of relevant observable inputs and minimise the
use of unobservable inputs. It establishes a fair value hierarchy for doing this. This FRS is to
be applied for annual periods beginning on or after 1 January 2013. The Group will
determine the impact of this standard when it becomes effective.
(c)
Basis of Consolidation
Subsidiaries are entities over which the Group has power to govern the financial and
operating policies so as to obtain benefits from its activities, generally accompanied by a
shareholding giving rise to a majority of the voting rights. The existence and effect of
potential voting rights that are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. Subsidiaries are consolidated from the
date on which control is transferred to the Group. They are de-consolidated from the date on
which control ceases.
In preparing the consolidated financial statements, transactions, balances and unrealised
gains on transactions between group entities are eliminated. Unrealised losses are also
eliminated but are considered an impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure consistency with the
policies adopted by the Group.
Subsidiaries are consolidated from the date of acquisition, being the date on which the
Group obtains control, and continue to be consolidated until the date that such control
ceases.
Non-controlling interests are that part of the net results of operations and of net assets of a
subsidiary attributable to the interests which are not owned directly or indirectly by owners
of the Company. They are shown separately in the consolidated statement of comprehensive
income, statement of changes in equity and statement of financial position. Total
comprehensive income is attributed to the non-controlling interests based on their respective
interests in a subsidiary, even if this results in the non-controlling interests having a deficit
balance.
38
5 7
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(d)
Revenue Recognition
Revenue is measured at the fair value of the consideration received or receivable after taking into
account any trade discounts and volume rebates allowed.
Dividend income is recognised when the right to receive a dividend has been established.
Interest income is recognised using the effective interest rate method, which for floating rate
financial assets is the rate inherent in the instrument.
Revenue relating to construction activities is detailed in Note 4.
Revenue recognition relating to the provision of services is determined with reference to the stage of
completion of the transaction at the end of the reporting period and where the outcome of the
contract can be estimated reliably. Stage of completion is determined with reference to the services
performed to date as a percentage of total anticipated services to be performed. Where the outcome
cannot be estimated reliably, revenue is recognised only to the extent that related expenditure is
recoverable.
All revenue is stated net of the amount of goods and services tax (“GST”).
(e)
Income Tax
The income tax expense for the year comprises current income tax expense and deferred tax
expense.
Current income tax expense charged to profit or loss is the tax payable on taxable income. Current
tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the
relevant taxation authority.
Deferred tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well as unused tax losses.
Current and deferred tax expense/(benefit) is charged or credited outside profit and loss when the tax
relates to items that are recognised outside profit and loss.
Except for business combinations, no deferred income tax is recognised from the initial recognition
of an asset or liability, excluding a business combination, where there is no effect on accounting or
taxable profit or loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the
period when the asset is realised or the liability is settled and their measurement also reflects the
manner in which management expects to recover or settle the carrying amount of the related asset or
liability.
39
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(e)
Income Tax (cont’d)
Deferred tax assets relating to temporary differences and unused tax losses are recognised only to
the extent that it is probable that future taxable profit will be available against which the benefits of
the deferred tax asset can be utilised.
Where temporary differences exist in relation to investments in subsidiaries, branches, associates
and joint ventures, deferred tax assets and liabilities are not recognised where the timing of the
reversal of the temporary difference can be controlled and it is not probable that reversal will occur
in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and
liability occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-
off exists, the deferred tax assets and liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities, where it is intended that net
settlement or simultaneous realisation and settlement of the respective asset and liability will occur
in future periods in which significant amounts of deferred tax assets or liabilities are expected to be
recovered or settled.
(f)
Foreign Currency Translation
Functional and presentation currency
The financial statements of each entity in the Group are measured using the currency that best
reflects the economic substance of the underlying events and circumstances relevant to each entity
(the “functional currency”). The functional currency of the Company is Australian dollar (“A$”).
The consolidated financial statements are presented in Singapore dollar (“SGD” or S$).
Transactions and balances
In preparing the financial statements of the individual entities, transactions in currencies other than
the entity’s functional currency (foreign currencies) are recognised at the rates of exchange
prevailing at the dates of the transactions. At the end of each reporting period, monetary items
denominated in foreign currencies are retranslated at the rates prevailing at that date.
Currency translation differences resulting from the settlement of such transactions and from the
translation of monetary assets and liabilities denominated in foreign currencies at the closing rates at
the balance sheet date are recognised in profit or loss, unless they arise from borrowings in foreign
currencies and other currency instruments designated and qualifying as net investment hedges and
net investment in foreign operations. Those currency translation differences are recognised in the
currency translation reserve in the consolidated financial statements and transferred to profit or loss
as part of the gain or loss on disposal of the foreign operation.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated.
40
5 9
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(f)
Foreign Currency Translation (cont’d)
Group companies
The consolidated results and financial position of foreign operations whose functional currency is
different from the Group’s presentation currency are translated into the presentation currency as
follows:
•
•
•
Assets and liabilities for each statement of financial position presented are translated at
closing rate at the date of that statement;
Income or expense for each statements presenting profit or loss and other comprehensive
income (i.e. including comparatives) shall be translated at exchange rates at the dates of the
transactions; and
All resulting currency translation differences are recognised in other comprehensive income
and accumulated in the currency translation reserve.
Exchange differences arising on translation of foreign operations are transferred directly to the
Group’s foreign currency translation reserve in the statement of financial position. These differences
are recognised in other comprehensive income in the period in which they are incurred.
(g) Construction Contracts and Work in Progress
Construction work in progress is valued at cost, plus profit recognised to date less any provision for
anticipated future losses. Cost includes both variable and fixed costs relating to specific contracts,
and those costs that are attributable to the contract activity in general and that can be allocated on a
reasonable basis.
Construction profits are recognised at the stage of completion basis and measured using the
proportion of costs incurred to date as compared to expected actual costs.
Costs incurred during the financial year in connection with future activity on a contract are excluded
from the costs incurred to date when determining the stage of completion of a contract. Such costs
are shown as construction contract work-in-progress on the statement of financial position unless it
is not probable that such contract costs are recoverable from the customers, in which case, such
costs are recognised as an expense immediately.
At the reporting date, the cumulative costs incurred plus recognised profit (less recognised loss) on
each contract is compared against the progress billings. Where the cumulative costs incurred plus
the recognised profits (less recognised losses) exceed progress billings, the balance is presented as
due from customers on construction contracts within “trade and other receivables”. Where progress
billings exceed the cumulative costs incurred plus recognised profits (less recognised losses), the
balance is presented as due to customers on construction contracts within “trade and other
payables”.
Retentions are amounts of progress billings which are not paid until the satisfaction of conditions
specified in the contract for the payment of such amounts. Progress billings not yet paid by
customers and retentions by customers are included within “trade and other receivables”. Advances
received are included within “trade and other payables”.
41
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(h)
Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the
contractual provisions of the instrument. For financial assets, this is equivalent to the date that the
company commits itself to either purchase or sell the assets (i.e. trade accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified ‘at fair value through profit or loss’ in which case transaction costs are
expensed to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised at cost using the effective
interest rate method, or cost. Where available, quoted prices in an active market are used to
determine fair value. In other circumstances, valuation techniques are adopted.
Amortised cost is calculated as:
1.
2.
3.
4.
the amount at which the financial asset or financial liability is measured at initial
recognition;
less principal payments;
plus or minus the cumulative amortisation of the difference, if any, between the amount
initially recognised and maturity amount calculated using the effective interest method;
and
less any reduction for impairment.
The effective interest method is used to allocate interest income or interest expense over the relevant
period and is equivalent to the rate that exactly discounts estimated future cash payments or receipts
(including fees, transaction costs and other premiums or discounts) through the expected life (or
when this cannot be reliably predicted, the contractual term) of the financial instrument to the net
carrying amount of the financial asset or financial liability. Revisions to expected future net cash
flows will necessitate an adjustment to the carrying value with a consequential recognition of an
income or expense in profit or loss.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques
are applied to determine the fair value for all unlisted securities, including recent arm’s length
transactions, reference to similar instruments and option pricing models.
The Group does not designate any interests in subsidiaries or joint venture entities as being subject
to the requirements of Accounting Standards specifically applicable to financial instruments.
42
6 1
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(h)
Financial Instruments (cont’d)
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market and subsequently measured at amortised cost.
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at
amortised cost.
Impairment
At the end of the reporting period, the Group assesses whether there is objective evidence that a
financial instrument has been impaired. In the case of available-for-sale financial instruments, a
prolonged decline in the value of the instrument is considered to determine whether impairment has
arisen. Impairment losses are immediately recognised in profit or loss.
Financial Guarantees
Where material, financial guarantees issued, which require the issuer to make specified payments to
reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due,
are recognised as financial liabilities at fair value on initial recognition. The guarantee is
subsequently measured at the higher of the best estimate of the obligation and the amount initially
recognised less, when appropriate, cumulative amortisation. Where the entity gives guarantees in
exchange for a fee, revenue is recognised under FRS 18.
The fair value of financial guarantee contracts has been assessed using the probability weighted
discounted cash flow approach. The probability has been based on:
•
•
•
(i)
the likelihood of the guaranteed party defaulting during the next reporting period;
the proportion of the exposure that is not expected to be recovered due to the guaranteed
party defaulting ; and
the maximum loss exposure if the guaranteed party were to default
Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank
overdrafts are shown within short-term borrowings in current liabilities on the statement of financial
position.
(j)
Property, Plant and Equipment
Each class of property, plant and equipment is initially recognised at cost and subsequently carried
at cost less accumulated depreciation and accumulated impairment losses.
43
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(j)
Property, Plant and Equipment (cont’d)
Property
Leasehold building is stated on the cost basis and is therefore carried at cost. Such cost includes the
construction costs and borrowing costs that are eligible for capitalisation.
Plant and equipment
Plant and equipment are measured on the cost basis. In the event the carrying amount of plant and
equipment is greater than its estimated recoverable amount, the carrying amount is written down
immediately to its estimated recoverable amount and impairment losses recognised either in profit or
loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal
assessment of recoverable amount is made when impairment indicators are present (refer to Note 3
for details of critical judgements of impairment of property, plant and equipment).
The cost of fixed assets constructed within the Group includes the cost of materials, direct labour,
borrowing costs and an appropriate proportion of fixed and variable overheads.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will
flow to the Group and the cost of the item can be measured reliably. All other repairs and
maintenance are charged to profit or loss during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings and capitalised lease assets, but
excluding freehold land, is depreciated on a straight-line basis over the asset’s useful life from the
time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of
either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Buildings
Plant and equipment
Leased plant and equipment
Motor vehicles
Office and IT equipment
Depreciation Rate
3%
5 - 15%
5 - 15%
6.67% - 33.33%
5 - 33.33 %
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s
carrying amount is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount.
These gains or losses are included in profit or loss.
44
6 3
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(k)
Impairment of Non-Financial Assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset
may be impaired. The assessment will include considering external sources of information and
internal sources of information. If such an indication exists, an impairment test is carried out on the
asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value
less costs to sell and value in use, to the asset’s carrying value. Any excess of the asset’s carrying
value over its recoverable amount is expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill and intangible assets with indefinite useful
lives.
(l)
Provisions
Provisions are recognised when the Group has a legal or constructive obligation as a result of past
events, for which it is more likely than not that an outflow of economic benefits will result and that
outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts required to settle the obligation at
the end of the reporting period.
(m)
Financial Liabilities and Equity Instruments Issued by the Group
Classification as debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance
with the substance of the contractual arrangement.
Financial liabilities
An entity shall recognise a financial liability on its statement of financial position when, and only
when, the entity becomes a party to the contractual provisions of the instrument.
A financial liability is recognised initially at fair value plus, in the case of a financial liability not at
fair value through profit or loss, transaction costs that are directly attributable to the acquisition or
issue.
Financial liabilities are classified as either financial liabilities at ‘FVTPL’ or ‘borrowings’.
45
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(m)
Financial Liabilities and Equity Instruments Issued by the Group (cont’d)
Financial liabilities (cont’d)
Borrowings
Borrowings are initially measured at fair value, net of transaction costs and are subsequently
measured at amortised cost using the effective interest method, with interest expense recognised on
an effective yield basis.
The effective interest method is a method of calculating the amortised cost of a financial liability
and of allocating interest expense over the relevant period. The effective interest rate is the rate that
exactly discounts estimated future cash payments through the expected life of the financial liability,
or, where appropriate, a shorter period to the net carrying amount on initial recognition.
Borrowings are presented as current liabilities unless the Group has an unconditional right to defer
settlement for at least 12 months after the reporting date.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are
discharged, cancelled or expired.
(n)
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 these assets, until such time as the assets are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(o)
Leases
Leases of fixed assets, where substantially all the risks and benefits incidental to the ownership of
the asset, but not the legal ownership which are transferred to entities in the Group, are classified as
finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal
to the fair value of the leased property or the present value of the minimum lease payments,
including any guaranteed residual values. Lease payments are allocated between the reduction of
the lease liability and the lease interest expense for the period.
46
6 5
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(o)
Leases (cont’d)
Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives
or the lease term.
Lease payments for operating leases, where substantially all the risks and benefits remain with the
lessor, are charged as expenses on a straight-line basis over the lease term.
Lease incentives under operating leases are recognised as a liability and amortised on a straight-line
basis over the life of the lease term.
(p)
Joint Venture
The Group’s joint venture is the entity over which the Group has contractual arrangements to jointly
share the control over the economic activity of the entity with another party. The Group’s interest in
joint venture is accounted for in the consolidated financial statements using equity method.
(q)
Employee Benefits
Defined contribution plans
The Group participates in the national pension schemes as defined by the laws of the countries in
which it has operations. Contributions to defined contribution pension schemes are recognised as an
expense in the period in which the related service is performed. The Group has no further payment
obligations once the contributions have been paid.
Provision for employee benefits
Provisions are made for the Group’s liability for employee benefits arising from services rendered
by employees to the end of the reporting period. Employee benefits that are expected to be settled
within one year have been measured at the amounts expected to be paid when the liability is settled.
Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits. In determining the liability,
consideration is given to employee wage increases and the probability that the employee may not
satisfy vesting requirements. Those cash flows are discounted using the market yields on national
government bonds with terms to maturity that match the expected timing of cash flows.
(r)
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
executive committee whose members are responsible for allocating resources and assessing
performance of the operating segments.
47
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
2
Significant Accounting Policies (cont’d)
(s)
Share Capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of
new ordinary shares are deducted against the share capital account.
(t)
Related Parties
A related party is defined as follows:
A related party is a person or entity that is related to the entity that is preparing its financial
statements (referred to as the ‘reporting entity’).
(i)
A person or a close member of that person’s family is related to a reporting entity if that
person:
(1)
(2)
(3)
has control or joint control over the reporting entity;
has significant influence over the reporting entity; or
is a member of the key management personnel of the reporting entity or of a parent
of the reporting entity.
(ii)
An entity is related to a reporting entity if any of the following conditions applies:
(1)
(2)
(3)
(4)
(5)
the entity and the reporting entity are members of the same group (which means that
each parent, subsidiary and fellow subsidiary is related to the others);
one entity is an associated company of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member);
the entity is a post-employment benefit plan for the benefit of employees of either
the reporting entity or an entity related to the reporting entity. If the reporting entity
is itself such a plan, the sponsoring employers are also related to the reporting entity;
the entity is controlled or jointly controlled by a person identified in (i); or
a person identified in (i) (1) has significant influence over the entity or is a member
of the key management personnel of the entity (or of a parent of the entity).
48
6 7
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
3
Critical Accounting Judgements and Key Sources of Estimation Uncertainty
Estimates, assumptions and judgements are made in the preparation of the financial statements.
Management continually evaluates its judgements and estimates in relation to assets, liabilities,
income and expenses, and disclosures made. They are assessed continually based on historical
experience and on other various factors that are believed to be reasonable under the circumstances.
The estimates and assumptions that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year are discussed below:
(a) Critical Accounting Estimates and Assumptions
Useful lives of property, plant and equipment
The useful lives of assets have been based on historical experience, lease terms and best available
information for similar items in the industry. These estimations will affect the depreciation expense
recognised in the financial year. There is no change in the estimated useful lives of plant and
equipment during the year. The carrying amount of the Group’s property, plant and equipment as at
30 June 2012 was S$55,885,000 (2011: S$44,439,000) (Note 14). A 10% difference in the expected
useful lives of these assets from management’s estimates would result in an approximately
S$416,000 (2011: S$174,700) variance in the Company’s profit/(loss) for the year.
Determination of percentage of completion on construction contracts
Contract revenue is recognised as revenue in profit or loss using the percentage of completion
method in the reporting periods in which the work is performed. The stage of completion is
measured by reference to the contract costs incurred to date compared to the estimated total costs for
the contract or on the basis of value of work completed.
Construction contract accounting requires that variations, claims and incentive payments only be
recognised as contract revenue to the extent that it is probable that they will be accepted by the
customer. As the approval process takes some time, judgement is required to be made of its
probability and revenue recognised accordingly. The aggregate costs incurred plus recognised profit
less recognised losses to date, progress billings, retentions on construction contracts and due from/to
the customers are disclosed in Note 10.
Deferred tax assets
The Group recognises deferred tax assets on carried forward tax losses to the extent there are
sufficient estimated future taxable profits and/or taxable temporary differences against which the tax
losses can be utilised and that the Group is able to satisfy the continuing ownership test.
The carrying amount of deferred tax assets are S$2,470,000 (2011: S$833,000).
49
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
3
Critical Accounting Judgements and Key Sources of Estimation Uncertainty (cont’d)
(b)
Critical Judgements in Applying the Group’s Accounting Policies
Allowance for impairment of receivables
The Group assesses at each reporting date whether there is any objective evidence that a financial
asset is impaired. To determine whether there is objective evidence of impairment, the Group
considers factors such as the probability of insolvency or significant financial difficulties of the
debtor and default or significant delay in the payment. The directors exercise their judgement in
making allowances for receivables. A specific allowance for impairment of receivables is made if
the receivables are not collectible. The factors considered in making allowances are payment
history, past due status and trading terms. The carrying value of the Group’s trade and other
receivables as at 30 June 2012 and 2011 is S$86,620,000 and S$20,403,000, respectively.
Impairment of property, plant and equipment
The Group assesses impairment of property, plant and equipment at each year end by evaluating
conditions specific to the Group that may lead to impairment of assets. Adjustments will be made
when considered necessary.
Impairment assessment of property, plant and equipment includes considering certain indications
such as significant changes in asset usage, significant decline in assets’ market value, obsolescence
or physical damage of an asset, significant under performance relative to the expected historical or
future operating results and significant negative industry or economic trends.
No impairment or reversal of impairment losses on property, plant and equipment were recorded for
the financial year ended 30 June 2012.
The carrying amount of property, plant and equipment at 30 June 2012 is S$55,885,000 (2011:
S$44,439,000).
Impairment of investment in subsidiary
The Company assesses annually whether its unquoted equity investments have any indication of
impairment in accordance with the accounting policy. The carrying amount of the unquoted equity
investments has been determined based on the estimated future profitability and the financial health
of the investees and near-term business outlook for the investees, including factors such as industry
and sector performance, and operational and financing cash flow which requires the use of
judgement.
No impairment loss was recorded for the financial year ended 30 June 2012.
The carrying amount of the Company’s investment in subsidiaries as at 30 June 2012 is S$9,792,000
(2011: Nil) (Note 16).
50
6 9
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
4
Revenue and Other Income
Revenue
Construction contract revenue
Revenue from the rendering of services
Revenue from sales of goods
Other Income
Interest income on bank balances
Unrealised foreign exchange gain
Gain on disposal of property, plant and
equipment
Write-back of interest on convertible loans
20
Group
Note
2012
S$’000
2011
S$’000
328,016
7
631
328,654
618
9
78
809
1,514
60,910
97
-
61,007
316
-
-
-
316
5
Profit before Income Tax
The following items have been included in
arriving at profit before tax:
Included in cost of sales:
Direct materials
Subcontract works
Employee benefits
Manufacturing and other overheads
Depreciation
Workshop costs
Group
Note
2012
S$’000
2011
S$’000
6
80,460
53,353
106,708
17,605
3,867
5,867
13,573
2,999
17,980
3,859
1,652
997
51
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
5
Profit before Income Tax (cont’d)
Included in administrative expenses:
Amortisation of management fee
Audit fees:
- Auditors of the Company
- Other auditors
Non-audit fees paid to other auditors
Business development
Communications
Depreciation
Directors’ fees
Employee benefits
IPO expenses
Loss on disposal of property, plant and
equipment
Occupancy expenses
Office costs
Other administrative expenses
Tax fees
Unrealised foreign exchange loss
Group
Note
2012
S$’000
2011
S$’000
6
422
90
91
12
256
754
293
25
9,143
634
-
2,506
1,270
1,568
48
245
473
7
102
-
210
213
96
-
4,216
-
44
1,263
492
301
25
-
In addition, fees of S$175,000 were paid to the auditors of the Company in relation to the IPO
exercise.
6
Employee Benefits Expenses
Wages and salaries
Contributions to defined contribution plans
Other employee benefits
Group
2012
S$’000
2011
S$’000
114,775
722
354
115,851
21,709
359
128
22,196
52
7 1
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
7
Finance Costs
Convertible loans
Bank bills
Finance leases
Premium funding
Related party
8
Income Tax Expense
Current income tax – current year
Deferred income tax – current year
Under-provision in respect of prior years
Group
2012
S$’000
2011
S$’000
-
354
1,084
45
-
1,483
787
152
304
-
314
1,557
Group
2012
S$’000
2011
S$’000
14,400
(1,573)
56
12,883
3,858
(262)
-
3,596
The Group’s tax on profit before income tax differs from the amount that would arise using the
Australian standard rate of income tax as follows:
Profit before income tax
Income tax at 30% (2011: 30%)
Add tax effect of:
Non-assessable items
Non-allowable items
Under-provision in respect of prior years
Group
2012
S$’000
2011
S$’000
43,193
12,958
(346)
215
56
12,883
11,118
3,335
-
261
-
3,596
Weighted average effective tax rates are as
follows:
29.8%
32.3%
53
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
8
Income Tax Expense (cont’d)
The tax rate used for the 2012 and 2011 reconciliations above is the corporate tax rate of 30%
payable by corporate entities in Australia on taxable profits under the tax law in that jurisdiction.
The Group’s operations are located in Australia.
The following shows the details of the deferred tax assets and liabilities:
Property, plant
and equipment
(tax allowance/
impairment)
S$’000
Borrowing
costs
S$’000
Share of
profits in joint
venture
S$’000
Total
S$’000
Deferred tax liabilities:
Balance at 1 July 2010
Charged to profit or loss
Currency translation
Balance at 30 June 2011
Balance at 1 July 2011
Charged to profit or loss
Currency translation
Balance at 30 June 2012
42
207
10
259
259
16
(4)
271
-
2
-
2
2
(2)
-
-
-
-
-
-
-
70
-
70
42
209
10
261
261
84
(4)
341
54
7 3
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
8
Income Tax Expense (cont’d)
Property,
plant and
equipment
(tax
allowance/
impairment)
S$’000
Interest
bearing
loans and
borrowings
S$’000
Expenses
accrued
S$’000
Other
current
assets
S$’000
Provision
employee
benefits
S$’000
Provision
others
S$’000
Borrowing
costs
S$’000
Carried
forward
tax losses
S$’000
Intangibles
S$’000
Total
S$’000
Deferred tax assets:
Balance at 1 July 2010
Credited to profit or
loss
Currency translation
Balance at 30 June
2011
Balance at 1 July 2011
Credited to profit or
loss
Currency translation
Balance at 30 June
2012
27
4
3
34
34
(33)
-
1
48
163
9
220
220
406
(5)
621
63
85
8
156
156
461
(5)
612
-
20
1
21
21
-
-
59
164
10
233
233
808
(8)
21
1,033
26
(12)
2
16
16
164
(1)
179
-
-
-
-
-
1
-
1
96
46
10
152
152
(150)
(1)
1
-
1
-
1
1
-
-
1
319
471
43
833
833
1,657
(20)
2,470
Temporary differences relating to investments in subsidiaries for which deferred tax liabilities have not been recognised as of 30 June 2012 amounted to
S$891,058 (2011: S$902,948).
55
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
9
Earnings per Share
Basic earnings per share is calculated by dividing the Group’s net profit attributable to ordinary
equity holders for the financial year by 501,000,000 ordinary shares which were assumed to be in
issue throughout the entire financial year presented.
Group
2012
2011
Profit attributable to the owners of the Company
30,310,245
7,523,210
Total number of ordinary shares issued
501,000,000
501,000,000
Basic and diluted earnings per share (cents)
6.05
1.50
Diluted earnings per share are calculated by dividing net profit attributable to the owners of the
Company by the weighted average number of ordinary shares during the year plus the weighted
average number of ordinary shares that would be in issue on the conversion of all the dilutive
potential ordinary shares into ordinary shares. As there is no dilutive potential ordinary shares, the
diluted earnings per share is the same as the basic earnings per share.
10
Trade and Other Receivables
Current:
Trade receivables
− Third party
− Retention on
construction claims
Amounts due from customers
for construction contracts
Receivables from subsidiaries
Receivables from joint
venture
Dividends receivable
Other receivables
Total current trade and other
receivables
Note
Group
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
55,236
16,700
4,300
59,536
464
17,164
10(a)
26,238
-
3,224
-
727
-
119
-
-
15
-
-
-
-
2,076
-
3,006
-
-
-
-
-
742
-
-
-
86,620
20,403
5,082
742
56
7 5
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
10
Trade and Other Receivables (cont’d)
Construction Contracts:
(a)
Contract cost incurred
Recognised profits
Less: Progress billings
Currency translation
Amounts due from customers
for construction contracts
Group
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
267,860
60,785
328,645
(302,262)
(145)
41,060
19,947
61,007
(57,860)
77
26,238
3,224
-
-
-
-
-
-
-
-
-
-
-
-
Current trade receivables are non-interest bearing and generally on 30 day terms.
The receivables from subsidiaries are unsecured, interest-free and repayable on demand.
11
Other Current Assets
Group
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
Prepayments
337
492
-
-
12
Cash and Cash Equivalents
Cash at bank and in hand
Short-term bank deposits
Group
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
32,792
1,009
33,801
5,598
1,022
6,620
1,295
-
1,295
20
-
20
57
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
12
Cash and Cash Equivalents (cont’d)
For the purpose of presenting the consolidated statement of cash flows, the cash and cash
equivalents comprise the following:
Cash and cash equivalents
Less: cash in bank pledged
Group
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
33,801
(1,009)
32,792
6,620
(1,022)
5,598
1,295
-
1,295
20
-
20
The effective interest rate on short-term bank deposits was 4.12% per annum (2011: 5.02% per
annum). These deposits matured on the 9 August 2012.
A floating charge over cash and cash equivalents has been provided for certain debt. Refer to Note
19 for further details.
13
Loans Receivable
On 29 March 2012, the Company granted loans to a subsidiary amounting to S$18,000,000
repayable on 30 June 2013 (2011: S$19,638,000, repayable on 15 July 2012). The loans are
unsecured and interest bearing at 6% per annum. Interest income recognised for the period
amounted to S$1,351,798 (2011: S$740,299).
58
7 7
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
14
Property, Plant and Equipment
Leasehold
building
S$’000
Plant and
equipment
S$’000
Small
tools
S$’000
Motor
vehicles
S$’000
Office
equipment
S$’000
IT
equipment
S$’000
Assets under
construction
S$’000
Total
S$’000
2012
Cost
At 1 July 2011
Additions
Disposals
Currency translation
At 30 June 2012
Accumulated depreciation
At 1 July 2011
Depreciation for the year
Transfer/adjustments
Disposals
Currency translation
At 30 June 2012
Net carrying amount
At 30 June 2012
21,932
824
-
(295)
22,461
(156)
(761)
4
-
5
(908)
16,108
12,278
(525)
(280)
27,581
(2,016)
(2,211)
(4)
278
40
(3,913)
811
1,918
(98)
(22)
2,609
(132)
(420)
-
90
4
(458)
2,381
1,213
(9)
(38)
3,547
(501)
(475)
-
9
9
(958)
138
172
-
(2)
308
(8)
(40)
-
-
-
(48)
481
820
-
(11)
1,290
(115)
(253)
-
-
3
(365)
5,516
(709)
-
(68)
4,739
47,367
16,516
(632)
(716)
62,535
-
-
-
-
-
-
(2,928)
(4,160)
-
377
61
(6,650)
21,553
23,668
2,151
2,589
260
925
4,739
55,885
59
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
14
Property, Plant and Equipment (cont’d)
Leasehold
building
S$’000
Plant and
equipment
S$’000
Small
tools
S$’000
Motor
vehicles
S$’000
Office
equipment
S$’000
IT
equipment
S$’000
Assets under
construction
S$’000
Total
S$’000
2011
Cost
At 1 July 2010
Additions
Disposals
Currency translation
At 30 June 2011
Accumulated depreciation
At 1 July 2010
Depreciation for the year
Disposals
Currency translation
At 30 June 2011
Net carrying amount
At 30 June 2011
8,468
12,368
-
1,096
21,932
(3)
(150)
-
(3)
(156)
4,631
10,845
(66)
698
16,108
(785)
(1,143)
14
(102)
(2,016)
159
626
(3)
29
811
(40)
(88)
2
(6)
(132)
824
1,451
(7)
113
2,381
(207)
(271)
3
(26)
(501)
16
118
-
4
138
(1)
(6)
-
(1)
(8)
146
313
-
22
481
(22)
(89)
-
(4)
(115)
277
5,088
-
151
5,516
-
-
-
-
-
14,521
30,809
(76)
2,113
47,367
(1,058)
(1,747)
19
(142)
(2,928)
21,776
14,092
679
1,880
130
366
5,516
44,439
60
7 9
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
14
Property, Plant and Equipment (cont’d)
(a)
The total value of purchased assets that were refinanced via finance leases for the year was
S$9,355,309 (2011: S$7,839,397) and had a carrying amount of S$14,384,043 (2011:
S$6,850,706) as at 30 June 2012.
(b) At 30 June 2012, the carrying amount of property, plant and equipment that are pledged for
security is as follows:
Property, plant and equipment
Borrowings
Leasehold building
Leased plant and equipment
Remaining property, plant and
equipment
Bank bills and Multi-option facility
Finance lease
Floating charge on Multi-option
facility
Refer to Note 19 for further information on Borrowings.
Carrying Amount
S$’000
21,554
14,384
19,947
55,885
15
Intangible Assets
Goodwill
Group
2012
S$’000
2011
S$’000
13
13
Goodwill arose from the excess of the consideration paid for a business acquired from a third party.
Goodwill has been allocated to the cash-generating unit, Mining and Others division.
Management is of the opinion that the recoverable amount will exceed the carrying amount on the
basis that this cash generating unit has been generating profit since acquisition and management
forecasts the results of this subsidiary to be in a net profit position for the financial year ending 30
June 2013. In arriving at this assessment, management has determined the recoverable amount using
a two year forecasting process based on the current order book, projected orders and a consumer
price index (“CPI”) factor of 1.2% per annum on direct costs and overhead costs.
61
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
15
Intangible Assets (cont’d)
Movement in goodwill during the year is follows:
Goodwill
Currency translation
Balance at the end of year
16
Investment in Subsidiaries
Group
2012
S$’000
2011
S$’000
13
-
13
12
1
13
Company
2012
S$’000
2011
S$’000
Issuance of shares for acquisition of subsidiaries
9,792
-
On 27 March 2012, the Company entered into a Share Swap Agreement with the shareholders of
Civmec Construction & Engineering Pty Ltd (“CCE”) in relation to the acquisition of the entire
issued and paid-up share capital of CCE for a purchase consideration of 323,938,000 shares (Note 2).
Details of the Company’s subsidiaries at 30 June 2012 are as follows:
Date and place
of incorporation
and principal
place of
business
Name of subsidiaries
Civmec Construction &
Engineering Pty Ltd*
22 June 2009
(Australia)
Principal
activities
Cost of
investment (A$)
% of equity held
by the Company
7,578,683
100%
Civil construction
Structural
Mechanical
Process piping
(SMP)
Civmec Holdings Pty
Ltd*
30 June 2009
(Australia)
Asset holding
company
120
100%
Ballymount Holdings
Pty Ltd*
17 January
2005
(Australia)
Asset holding
company
2,288,930
100%
Civmec Pipe Products
Pty Ltd*
28 June 2010
(Australia)
Asset holding
company
835
83.5%
* Audited by Moore Stephens Pty Ltd, Perth, Australia
62
8 1
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
17
Investment in Joint Venture
The Company acquired the following interest in a joint venture during the year:
Name of entity
Civmec Cape Insulation Group Pty Ltd*
Date and place of
incorporation and principal
place of business
16 September 2011
(Australia)
Principal
activities
Insulation
services
% of equity
held by the
Company
50%
*Audited by Moore Stephens Pty Ltd, Perth, Australia
The cost of investment in the joint venture was S$1. The roll forward analysis of the Group’s
investment in the joint venture is as follows:
Share of profit in the joint venture
Currency translation
Group
2012
S$’000
2011
S$’000
234
(2)
232
-
-
-
The following is the financial information for Civmec Cape Insulation Group Pty Ltd:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenue
Cost of sales
Expenses
Group
2012
S$’000
2011
S$’000
2,829
1,156
2,347
1,313
2,531
2,023
42
-
-
-
-
-
-
-
The Group’s share of profit in the joint venture for the year ended 30 June 2012 is S$234,000
(2011: Nil).
63
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
18
Trade and Other Payables
Trade creditors
Sundry payables and accrued
expenses:
Accrued expenses
Interest payable on
convertible loans
Goods and services tax
payable
Other taxes payable
Group
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
29,161
6,920
25,078
1,823
-
732
2,564
1,412
58,215
776
1,036
11,287
-
359
-
-
-
359
-
9
732
-
-
741
Trade and other payables are usually paid within 30 days of recognition.
19
Borrowings
Note
Group
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
Current
Finance lease liabilities –
secured
19(a)
3,318
1,585
Non-current
Finance lease liabilities –
secured
Bank bills – secured
Convertible loans
19(a)
19(b)
20
Total Borrowings
(a)
Finance lease liabilities
10,055
-
-
10,055
5,592
8,792
19,472
33,856
13,373
35,441
-
-
-
-
-
-
-
-
-
19,472
19,472
19,472
The Group (the lessee) leases motor vehicles and workshop equipment from non-related parties
under finance leases. The Group will obtain the ownership of the leased assets from the lessor at no
extra cost at the end of the lease term. The average lease term is between 4 and 5 years at interest
rates ranging from 6.49% to 9.56% per annum (2011: 7.99% to 9.59%).
64
8 3
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
19
Borrowings (cont’d)
(a)
Finance lease liabilities (cont’d)
The finance lease liabilities are secured by the underlying leased assets:
Group
2012
S$’000
2011
S$’000
Property, plant and equipment (Note 14)
14,384
6,851
The present values of finance lease liabilities are analysed as follows:
Minimum
lease
payments
S$’000
Future
finance
charges
S$’000
4,272
11,251
15,523
2,144
6,385
8,529
(954)
(1,196)
(2,150)
(559)
(193)
(752)
Net present
value of
minimum
lease
payments
S$’000
3,318
10,055
13,373
1,585
6,192
7,777
2012
Less than one year
Between one and five years
2011
Less than one year
Between one and five years
(b) Bank bills
As at 30 June 2012, the Group has a commercial bank facility amounting to S$8,675,713 which was
paid in full as at 30 June 2012 (30 June 2011: S$8,792,033). Interest rates are variable and ranged
between 7.11% and 7.52% per annum during the financial year ended 30 June 2012 (30 June 2011:
ranged between 7.19% and 7.47%). Repayment of the bank bill facility is on an interest only basis
until 14 June 2016 and the terms of the bank bill will then be renegotiated.
65
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
19
Borrowings (cont’d)
(c) Other financing facilities available
The Group has a Multi Option Facility available for a limit of A$10,030,000 (approximately
S$12,958,660). This is secured by:
•
•
A registered fixed and floating charge over the assets and undertakings of the Group.
A first registered real property mortgage over the leasehold interest in the Commercial
property located at Lot 804 (16) Nautical Drive, Henderson Western Australia and a
guarantee and indemnity given by the Company.
20
Convertible Loans
The Company issued convertible loans of A$5,000,000 (approximately S$5,936,380) and
A$10,000,000 (approximately S$12,982,800) on 11 June 2010 and 15 December 2010, respectively
which incurred interest at 6% per annum. Each convertible loan entitled the holders to convert a
loan of A$1 to 11.312 conversion shares and 5.7002 conversion shares, respectively for a total of
56,560,000 conversion shares and 57,002,000 conversion shares respectively. This conversion
occurred on the 27 March 2012, and as the terms of the conversion were met, the interest liability
referred to above was reversed (Note 4).
21
Provisions
Group
2012
S$’000
2011
S$’000
3,400
642
4,042
621
211
832
Group
2012
S$’000
2011
S$’000
621
10,263
(7,459)
(25)
3,400
253
771
(427)
24
621
Current
Provision for employee benefits
Non-current
Provision for employee benefits
(a) Movements in provisions are as follows:
Current:
Opening balance at the beginning of year
Provisions made during the year
Provisions utilised during the year
Currency translation
Closing balance at the end of year
66
8 5
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
21
Provisions (cont’d)
(a)
Movements in provisions are as follows: (cont’d)
Non-current:
Opening balance at the beginning of year
Provisions made during the year
Provisions utilised during the year
Currency translation
Closing balance at the end of year
Group
2012
S$’000
2011
S$’000
211
1,825
(1,389)
(5)
642
31
216
(39)
3
211
Provisions pertain to employee benefits relating to long service leave for employees. In calculating
the present value of future cash flows in respect of long service leave, the probability of long service
leave being taken is based upon historical data.
22
Share Capital
At the beginning of the year
Issuance of shares on 8 November 2011
Share swap (Note 16)
Share conversion on 27 March 2012 (Note 20)
Issuance of shares on 13 April 2012
IPO expenses debited to equity
At the end of the year
Group and Company
Number of
shares
1
12,499,999
323,938,000
113,562,000
51,000,000
-
501,000,000
2012
S$’000
-
125
-
18,919
20,400
(1,580)
37,864
Number of
shares
2011
S$’000
1
-
-
-
-
-
1
-
-
-
-
-
-
-
The ordinary shares of the Company have no par value. All issued ordinary shares are fully paid.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and
are entitled to one vote per share without restrictions at meetings of the Company. All shares rank
equally with regard to the Company’s residual assets.
On 8 November 2011, the Company issued 124,999,999 new ordinary shares for a total
consideration of S$124,999 pursuant to the increase in capital contribution. The newly issued fully
paid-up ordinary shares rank pari passu in all respects with the previously issued share.
On 13 April 2012, the Company was listed on the SGX-Mainboard. The Company issued
51,000,000 new shares valued at S$0.40 for each offer share.
67
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
22
Share Capital (cont’d)
Share Options
The Civmec Limited Employee Share Option Scheme (the “CESOS”) for key management
personnel and employees of the Group formed part of the Civmec Limited prospectus dated 5 April
2012.
Under the rules of the Scheme, executive and non-executive directors (including independent
directors) and employees of the Company, who are not Controlling Shareholders or their associates,
are eligible to participate in the Scheme.
There are no fixed periods for the grant of options. As such, offers for the grant of options may be
made at any time, from time to time at the discretion of the Committee.
In addition, in the event that an announcement on any matter of an exceptional nature involving
unpublished price sensitive information is imminent, offers may only be made after the second
market day from the date on which the aforesaid announcement is made.
Particulars of the CESOS are set out under “Share Options” of this Directors’ Report.
The Scheme shall continue in operation for a maximum duration of ten years and may be continued
for any further period thereafter with the approval of the shareholders by ordinary resolution in
general meeting and of any relevant authorities which may then be required.
During the current financial year, there were no shares of the Company or its subsidiaries issued by
virtue of the exercise of options to take up unissued shares.
23
Other Reserves
Option premium on
convertible loans
Foreign currency translation
reserve
Merger reserve
Group
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
-
1,469
241
1,285
9,010
10,479
9,010
10,536
-
1,422
9,010
10,432
241
6
-
247
68
8 7
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
23
Other Reserves (cont’d)
(a)
Option premium on convertible loans
The option premium on convertible loans represented the equity component (conversion rights) of
the A$5,000,000 6% and A$10,000,000 6% convertible loans issued on 11 June 2010 and
15 December 2010 respectively (See Note 20). This has been reversed upon the share conversion.
The movement in the option premium on convertible loans is shown in the consolidated statement of
changes in equity.
(b)
Foreign currency translation reserve
Exchange differences relating to the translation of the net assets of the Group’s foreign operations
from their functional currency to the Group’s presentation currency (i.e., S$) are recognised directly
in other comprehensive income and accumulated in the foreign currency translation reserve.
Exchange differences previously accumulated in the foreign currency translation reserve (in respect
of translating the net assets of foreign operations) are reclassified to profit or loss on the disposal or
partial disposal of the foreign operation. The movement in the foreign currency translation in the
foreign currency translation reserve is shown in the consolidated statement of changes in equity.
(c)
Merger reserve
Pursuant to the completion of the Restructuring Exercise as disclosed in Note 2, the share capital of
Civmec Construction & Engineering Pty Ltd and Controlled Entities is adjusted to merger reserve
based on the “pooling of interest method”.
24
Commitments
(a)
Operating lease
The future minimum lease payable under non-cancellable operating leases contracted for where the
Group is a lessee at the reporting date but not capitalised in the financial statements are as follows:
Not later than 12 months
Between 12 months and five years
More than five years
Group
2012
S$’000
2011
S$’000
1,540
7,369
62,037
70,946
1,152
5,004
24,994
31,150
69
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
24
Commitments (cont’d)
(a)
Operating lease (cont’d)
The Group has three commercial operating leases:
•
•
•
The Kwinana property lease at 10 Ocean Street, Kwinana, Western Australia terminates in
December 2012.
The lease at 36 Stuart Drive in Henderson terminates in October 2012.
The Henderson land lease at Lot 804 (16) Nautical Drive, Henderson Western Australia is
for a 35-year period from July 2009 with an option to renew for a further 35 years. Rent
increases are per the CPI Index.
(b) Capital expenditure commitments
The Group has capital expenditure commitments contracted for at the reporting date but not
recognised in the financial statements as follows:
Plant and equipment purchases
New office building, property and factory
Not later than 12 months
Between 12 months and five years
25
Guarantees
Group
2012
S$’000
2011
S$’000
2,232
18,194
20,426
20,426
-
20,426
3,666
13,092
16,758
3,666
13,092
16,758
The Group is, in the normal course of business, required to provide guarantees in respect of their
contractual performance related obligations. These guarantees and indemnities only give rise to a
liability where it fails to perform its contractual obligations.
During the course of business, the Company also provides letters of credit for international trading
when required.
70
8 9
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
25
Guarantees (cont’d)
As at 30 June 2012, the Group has provided the following:
Bank guarantee
Surety bond facility
Letter of credit
2012
S$’000
2011
S$’000
469
21,706
388
22,563
-
954
-
954
The surety bond facility is provided for the provision of performance bonds to customers of the
Group. It has a limit of A$30 million (equivalent to S$39 million) as at 30 June 2012 (2011: A$18
million: S$23 million).
26
Related Party Transactions
The Group’s main related parties are as follows:
Entities Exercising Control over the Group
The largest shareholders are James Finbarr Fitzgerald and Olive Theresa Fitzgerald (acting as
trustees for the JF & OT Fitzgerald Family Trust) (19.47%) and Goldfirm Pty Ltd (acting as trustee
for the Kariong Investment Trust) (19.47%).
Key Management Personnel
Any person having authority and responsibility for planning, directing and controlling the activities
of the entity, directly or indirectly, including any director (whether executive or otherwise) of that
entity is considered key management personnel.
Remuneration paid to key management personnel is as follows:
Group
2012
S$’000
2011
S$’000
959
25
77
1,840
142
3,043
-
-
-
958
78
1,036
Directors’ remuneration
Salaries and other related costs
Directors’ fees
Post-employment benefits
Key management personnel
Salaries and other related costs
Post-employment benefits
71
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
26
Related Party Transactions (cont’d)
Other Related Parties
Other related parties include immediate family members of key management personnel and entities
that are controlled or significantly influenced by those key management personnel, individually or
collectively with their immediate family members.
Transactions with Related Parties
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
The following transactions occurred with related parties:
(a)
Purchases of goods and services:
Other Related Parties:
-
Rental paid to a related party (who
is a spouse of one of the directors)
- Management fee paid to a related
party who is a convertible loan
holder
(b)
Finance cost
- On convertible loans held by
directors of the Company who are
also pre-IPO investors
Loan from a director
-
(c)
Borrowings
Other Related Parties:
-
Proceeds from loans from related
parties
Repayment of loans from related
parties
-
- Advances from related parties
-
Convertible loans held by directors
of the Company who are also pre-
IPO investors
Group
2012
S$’000
2011
S$’000
(257)
(184)
-
-
-
-
-
105
-
(639)
(102)
(314)
32
(4,628)
21
639
The advances from related parties represent amounts due from a former director who is now a
shareholder of Civmec Ltd and Clarendon Pacific Ventures Pte. Ltd. These advances are non-trade
in nature, interest-free and repayable in cash/on demand.
The loans from related parties are non-trade in nature, non-interest bearing and repayable on
demand.
72
9 1
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
27
Financial Information by Segments
Management has determined the operating segments based on the internal reports which are
regularly reviewed by the Operations Management that are used to make strategic decisions.
The Operations Management comprises of the Executive Chairman, Chief Executive Officer, Chief
Operations Officer, Chief Financial Officer, Finance Manager and the department heads of each
operating segment.
The business is managed primarily on the basis of different products and services as the
diversification of the Group’s operations inherently have notably different risk profiles and
performance assessment criteria.
Reportable segments disclosed are based on aggregating operating segments where the segments are
considered to have similar economic characteristics and are also similar with respect to the
following:
•
•
•
•
•
the products sold and/or services provided by the segment;
the manufacturing process;
the type or class of customer for the products or services;
the distribution method; and
any external regulatory requirements
The two main reportable segments for the Group are: (1) Oil and Gas (2) Mining and Others. The
business activities include civil construction, fabrication, precast concrete, SMP (Structural,
Mechanical and Piping Erection), insulation, maintenance and plant hire.
Basis of Accounting for Purposes of Reporting by Operating Segments
(a)
Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision
makers with respect to operating segments, are determined in accordance with accounting policies
that are consistent to those adopted in the consolidated financial statements of the Group.
(b)
Inter-segment transactions
An internally determined transfer price is set for all inter-segment sales. This price is reviewed
quarterly and is based on what would be realised in the event the sale was made to an external party
at arm’s length. All such transactions are eliminated on consolidation of the Group’s financial
statements.
Inter-segment loans payable and receivable are initially recognised at the consideration received/to
be received net of transaction costs.
73
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
27
Financial Information by Segments (cont’d)
Basis of Accounting for Purposes of Reporting by Operating Segments (cont’d)
(c)
Segment assets and liabilities
The Group does not identify nor segregate its assets and liabilities in operating segments as these are
managed on a “group basis”.
Geographical Segments (Secondary Reporting)
The Group operates within Australia.
Major Customers
The Group has a number of customers to whom it provides both products and services. The Group
supplies to a single external customer in the Oil and Gas segment who accounts for 45% (2011: 0%)
of external revenue. The next most significant clients account for 20% and 18% (2011: 0% and
45% respectively) of external revenue.
74
9 3
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
27
Financial Information by Segments (cont’d)
Revenue - external sales
Cost of sales (excluding depreciation)
Depreciation expense
Segment results
Unallocated costs
Other income
Share in profit of joint venture
Finance costs
Profit before income tax
Income tax expenses
Net profit for the year
Segment assets:
Intangible assets
Unallocated assets:
- Assets
- Other current assets
- Deferred tax assets
Total assets
Oil and
Gas
S$’000
43,185
(29,590)
(330)
13,265
2011
Mining and
Others
S$’000
17,822
(9,819)
(1,321)
6,682
2012
Mining and
Others
S$’000
249,429
(208,450)
(2,112)
38,867
Oil and
Gas
S$’000
79,225
(55,543)
(1,755)
21,927
234
Total
S$’000
328,654
(263,993)
(3,867)
60,794
(17,866)
1,514
234
(1,483)
43,193
(12,883)
30,310
13
13
13
176,538
337
2,470
179,358
75
Total
S$’000
61,007
(39,409)
(1,651)
19,947
(7,588)
316
-
(1,557)
11,118
(3,596)
7,522
13
71,462
492
833
72,800
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
27
Financial Information by Segments (cont’d)
Oil and
Gas
S$’000
2012
Mining and
Others
S$’000
Total
S$’000
Oil and
Gas
S$’000
2011
Mining and
Others
S$’000
Total
S$’000
Segment liabilities:
Unallocated liabilities:
- Liabilities
- Borrowings
- Current income tax liabilities
- Deferred tax liabilities
- Provisions
Total liabilities
Other segment information
Capital expenditure
58,338
13,373
13,852
341
4,042
89,946
16,516
76
11,308
35,441
3,663
261
832
51,505
30,809
9 5
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
28
Financial Risk Management
The Group’s financial instruments consist mainly of deposits with banks, accounts receivable and
payable, borrowings and finance lease liabilities. The key financial risks include interest rate risk,
foreign currency risk, credit risk and liquidity risk.
(a) Market risk
Interest rate risk
Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end
of the reporting period whereby a future change in interest rates will affect future cash flows or the
fair value of fixed rate financial instruments. The Group is also exposed to earnings volatility on
floating rate instruments.
Interest rate risk is managed using a mix of fixed and floating rate debt. At 30 June 2012,
approximately 100% (30 June 2011: 59%) of the Group’s debt is fixed. There is no variable interest
rate borrowings which exposes the Group to interest rate changes as at 30 June 2012 (2011:
S$8,792,033).
The Group has cash balances placed with reputable banks and financial institutions. Such balances
are placed on varying maturities and generate interest income for the Group.
The Group obtains additional financing through bank borrowings and leasing arrangements.
Information relating to the Group’s interest rate exposure is also disclosed in the notes on the
Group’s borrowings and leasing obligations. They are at both fixed and floating rates of interest.
The policy is to retain flexibility in selecting borrowings at both fixed and floating rates interest.
Variable rates
Fixed rates
Within
1 Year
S$’000
Between
2 to 5
Years
S$’000
Within
1 Year
S$’000
Between
2 to 5
Years
S$’000
Non-
interest
bearings
S$’000
Total
S$’000
2012
Financial Assets
Cash and bank balances
Trade and other
receivables
Financial Liabilities
Trade and other
payables
Borrowings – Finance
lease
Payable to related
parties
33,801
-
33,801
-
-
-
-
-
-
-
-
-
-
-
-
33,801
86,620
86,620
86,620
120,421
-
54,239
54,239
3,318
10,055
-
13,373
-
3,318
-
10,055
123
54,362
123
67,735
-
-
-
-
-
-
-
77
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
28
Financial Risk Management (cont’d)
(a)
Market risk (cont’d)
Interest rate risk (cont’d)
Variable rates
Fixed rates
Within
1 Year
S$’000
Between
2 to 5
Years
S$’000
Within
1 Year
S$’000
Between
2 to 5
Years
S$’000
Non-
interest
bearings
S$’000
Total
S$’000
6,620
-
6,620
-
-
-
-
-
-
-
-
-
-
8,792
-
-
-
-
-
-
-
-
-
-
-
1,585
5,592
-
-
8,792
-
-
1,585
-
19,472
25,064
-
6,620
20,403
20,403
20,403
27,023
9,475
9,475
-
-
21
-
9,496
8,792
7,177
21
19,472
44,937
2011
Financial Assets
Cash and bank balances
Trade and other
receivables
Financial Liabilities
Trade and other
payables
Borrowings – Bank
bills
Borrowings – Finance
lease
Payable to related
parties
Convertible loans
Foreign Currency Risk
There is no significant exchange rate risk as substantially all financial assets and financial liabilities
are denominated in Australian Dollar, which is the functional currency of the Company and of each
entity in the Group. Accordingly, the sensitivity analysis to currency risk exposure is not disclosed
as management is of the view that this is not significant.
Credit Risk
Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contractual obligations that could lead to a financial loss to the Group.
Credit risk is managed through maintaining procedures ensuring, to the extent possible, that
customers and counterparties to transactions are of sound credit worthiness and includes the
utilisation of systems for the approval, granting and renewal of credit limits, the regular monitoring
of exposures against such limits and the monitoring of the financial stability of significant customers
and counterparties. Such monitoring is used in assessing receivables for impairment. Depending on
the division within the Group, credit terms are generally 30 days from the date of invoice.
78
9 7
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
28
Financial Risk Management (cont’d)
(a)
Market risk (cont’d)
Credit Risk (cont’d)
The Group has a concentration of credit risk with one counterparty accounting for 56% of trade
receivables as at 30 June 2012 (2011: 83%). The main source of credit risk to the Group is
considered to relate to the class of assets described as “Trade and other receivables”.
The following table details the Group’s trade and other receivables exposed to credit risk (prior to
collateral and other credit enhancements) with ageing analysis and impairment provided for thereon.
Amounts are considered as “past due” when the debt has not been settled within the terms and
conditions agreed between the Group and the customer or counterparty to the transaction.
Receivables that are past due are assessed for impairment by ascertaining solvency of the debtors
and are provided for where there are specific circumstances indicating that the debt may not be fully
paid to the Group.
Within
initial
trade
terms
Gross
amount
S$’000
S$’000
Past due but not impaired
61-90
days
S$’000
31-60
days
S$’000
>90 days
S$’000
2012
Trade receivables
Other receivables
Total
2011
Trade receivables
Other receivables
Total
59,536
27,084
86,620
32,870
27,084
59,954
23,113
-
23,113
1,368
-
1,368
17,164
3,239
20,403
9,568
3,239
12,807
7,306
-
7,306
78
-
78
2,185
-
2,185
212
-
212
Past due
and
impaired
S$’000
-
-
-
-
-
-
The Group did not hold any financial assets whose terms have been renegotiated, but which would
otherwise be past due or impaired.
The Group believes that the unimpaired amounts that are past due by more than 30 days are still
collectible based on historic payment behavior and extensive analyses of customer credit risk,
including underlying customers’ credit ratings, when available. Based on the Group’s monitoring of
customer credit risk, the Group believes that, apart from the above, no impairment allowance is
necessary in respect of receivables not past due or past due by 30 days and above.
79
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
28
Financial Risk Management (cont’d)
(a)
Market risk (cont’d)
Credit Risk (cont’d)
Credit risk related to balances with banks and other financial institutions is managed by investing
surplus funds with counterparties that are at a Standard and Poor’s rating of at least AA. The
following table provides information regarding the credit risk relating to cash and cash equivalents
based on Standard and Poor’s counterparty credit ratings.
Group
2012
S$’000
2011
S$’000
Company
2012
S$’000
2011
S$’000
33,801
6,620
1,295
20
Cash and cash equivalents:
AA Rated
Liquidity Risk
Liquidity risk is the risk that the Group will encounter difficulty in meeting its commitments
concerning its financial liabilities. The Group manages this risk though the following mechanism:
•
•
•
•
•
•
Preparing forward-looking cash flow analysis in relation to its operational, investing and
financing activities;
Monitoring undrawn credit facilities;
Maintaining credit risk related to financial assets;
Obtaining funding from a variety of sources;
Only investing surplus cash with major financial institutions; and
Comparing the maturity profile of financial liabilities with the realization profile of financial
assets.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities. Bank
overdrafts have been deducted in the analysis as management does not consider that there is any
material risk that the bank will terminate such facilities. The bank does however maintain the right
to terminate the facilities without notice and therefore the balances of overdrafts outstanding at year
end could become repayable within 12 months. Financial guarantee liabilities are treated as payable
on demand since the Group has no control over the timing of any potential settlement of the liability.
Cash flows realised from financial assets reflect management’s expectation as to the timing of
realisation. Actual timing may therefore differ from that disclosed. The timing of cash flows
presented in the table to settle financial liabilities reflect the earliest contractual settlement dates and
do not reflect management’s expectations that banking facilities will be rolled forward. Balances
due within 12 months equal their carrying amounts as the impact of discounting is not significant.
80
9 9
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
28
Financial Risk Management (cont’d)
(a)
Market risk (cont’d)
Liquidity Risk (cont’d)
Carrying
Amount
S$’000
Contractual Undiscounted Cash Flows
Within
Between
1 year
2 to 5 years
S$’000
S$’000
Total
S$’000
54,240
13,373
123
67,736
9,475
7,177
8,792
19,472
21
44,937
54,240
3,318
123
57,681
9,475
2,144
481
1,182
21
13,303
-
54,240
10,055
-
10,055
13,373
123
67,736
-
9,475
6,385
10,716
19,690
-
36,791
8,529
11,197
20,872
21
50,094
2012
Financial liabilities:
Trade and other payables
Borrowings:
-
Finance lease
Payable to related parties
Total financial liabilities
2011
Financial liabilities:
Trade and other payables
Borrowings:
-
Finance lease
-
Bank bills
-
Convertible loans
-
Related parties
Total financial liabilities
Capital Management
Management controls the capital of the Group in order to maintain a good debt-to-equity ratio,
provide the shareholders with adequate returns and to ensure that the Group can fund its operations
and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by
financial assets.
The Group and the Company have no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and
adjusting its capital structure in response to changes in these risks and in the market. These
responses include the management of debt levels, distributions to shareholders and share issues.
The net debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as
total financial liabilities less cash and cash equivalents.
81
A N N U A L R E P O R T 2011/2012
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
28
Financial Risk Management (cont’d)
(a)
Market risk (cont’d)
Capital Management (cont’d)
Net debt
Total equity
Net debt-to-equity ratio
Group
2012
S$’000
2011
S$’000
33,935
89,413
0.38
38,318
21,296
1.80
There were no changes in the Group’s approach to capital management during the year.
Fair Value Estimation
The fair values of financial assets and financial liabilities can be compared to their carrying values
as presented in the statement of financial position. Fair values are those amounts at which an asset
could be exchanged, or liability settled, between knowledgeable, willing parties in an arm’s length
transaction.
Fair values derived may be based on information that is estimated or subject to judgement, where
changes in assumptions may have a material impact on the amounts estimated. Areas of judgement
and the assumptions have been detailed in Note 3 to the consolidated financial statements.
The fair value of current financial assets and financial liabilities approximate the carrying value due
to the liquid nature of these assets and / or the short term nature of these financial rights and
obligations.
The fair values of non-current loans receivables and borrowings are calculated based on discounted
expected future principal and interest cash flows. The discount rates used are based on market rates
for similar instruments at the reporting date.
29
Subsequent Events
The Company has had an offer for the purchase of vacant land accepted for 2 & 8 Stuart Street,
Henderson. It is now subject to approval by the Foreign Investment Review Board. A factory is to
be built on the premises. These items are covered in Note 24 (b) Capital Expenditure Commitments.
82
1 0 1
NOTES TO THE FINANCIAL STATEMENTS
F I N A N C I A L R E P O R T S
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2012
30
Cash Flow Information
(a)
Proceeds from issuance of shares of the Company
Balance at beginning of year
Issuance of shares of the Company for the year
Balance at end of year
Movement in share capital during the year:
Issuance of shares of the Company for the year
Conversion of loans to equity
IPO expenses debited to equity
Proceeds from issuance of share of the Company
(b) Declaration of first and final dividends
Group
2012
S$’000
2011
S$’000
-
37,864
37,864
37,864
(18,919)
1,580
20,525
-
-
-
-
-
-
-
For the financial year ended 30 June 2012, the board of directors proposed a first and final dividend
of S$0.60 cents per share, subject to the approval of the shareholders at the forthcoming annual
general meeting.
83
A N N U A L R E P O R T 2011/2012
STATISTICS OF SHAREHOLDERS AS AT
19 SEPTEMBER 2012
SHARE CAPITAL
Class of Shares
Voting Rights
No. of issued shares
No. of treasury shares
:
:
:
:
Ordinary Shares
One vote per Ordinary Share
501,000,000 Ordinary Shares
Nil
DISTRIBUTION OF SHAREHOLDINGS
SIZE OF SHAREHOLDINGS
NO. OF
SHAREHOLDERS
1 - 999
1,000 - 10,000
10,001 - 1,000,000
1,000,001 and above
0
301
345
51
%
0
43.18
49.50
7.32
NO. OF
SHARES
0
1,826,417
39,402,161
%
0.00
0.36
7.87
459,771,422
91.77
TOTAL
697
100.00
501,000,000
100.00
TWENTY LARGEST SHAREHOLDERS
No. Name
No. of Shares
%
1. GOLDFIRM PTY LTD
2.
JAMES FINBARR FITZGERALD AND OLIVE TERESA FITZGERALD
3. CLARENDON PACIFIC VENTURES PTE LTD
4. GLENN ALLAN STEPHENSON
5. GIUSEPPE MACRI AND CAROLYN CHRISTINA MACRI
6. MICHAEL VAZ LORRAIN
7. RAFFLES NOMINEES (PTE) LTD
8. KEVIN JAMES DEERY AND CHAYCHANOK DEERY
9. R.C.S.S. VITELLI NOMINEES PTY LTD
10. CARLO SILVERA AND GISELLE JAYNE SILVERA
11. ANG KONG HUA
12. FOO SIANG GUAN
13. BANK OF EAST ASIA NOMS PTE LTD
14. LEE TECK LENG
15. MAYBANK KIM ENG SECS PTE LTD
16. TAN SIEW HUAY
17. DBS NOMINEES PTE LTD
18. TERENCE HEMSWORTH AND SANDRA ANN HEMSWORTH
19. HSBC (SINGAPORE) NOMS PTE LTD
20. NEO CHEE BENG ( LIANG ZHIMING)
Total
97,566,806
97,566,806
23,812,000
21,107,606
15,177,000
15,177,000
14,079,700
13,660,000
13,659,300
13,355,760
11,628,677
11,534,849
5,952,000
5,700,200
5,543,000
4,966,845
4,693,300
4,524,800
4,487,500
4,292,000
19.47
19.47
4.75
4.21
3.03
3.03
2.81
2.73
2.73
2.67
2.32
2.30
1.19
1.14
1.11
0.99
0.94
0.90
0.90
0.86
388,485,149
77.55
1 0 3
STATISTICS OF SHAREHOLDERS AS AT
19 SEPTEMBER 2012
PERCENTAGE OF SHAREHOLDING IN PUBLIC’S HANDS
As at 19 September 2012, approximately 50.04% of the issued ordinary shares of the Company was held in the
hands of the public (on basis of information available to the Company). Accordingly, the Company has
complied with Rule 723 of the Listing Manual of the Singapore Exchange Securities Trading Limited.
SUBSTANTIAL SHAREHOLDERS
Direct Interest
Indirect interest
Name
No. of Shares
%
No. of Shares
%
JT & OT Fitzgerald Family Trust(1)
Kariong Investment Trust (2)
Michael Vaz Lorrain(3)
James Finbarr Fitzgerald (and Olive Teresa
Fitzgerald)(1)
Goldfirm Pty Ltd (2)
Patrick John Tallon(2)
97,566,806
97,566,806
17,688,000
-
19.47
19.47
3.53
-
-
-
23,812,000
97,566,806
-
-
-
-
97,566,806
97,566,806
-
-
4.75
19.47
19.47
19.47
Notes:
1. Mr. James Finbarr Fitzgerald and his spouse (Olive Teresa Fitzgerald) are the trustees of the JF & OT
Fitzgerald Family Trust. Pursuant to Section 4(3) of the SFA, Mr James Finbarr Fitzgerald, his spouse
(Olive Teresa Fitzgerald), their children (Sean Fitzgerald, Claire Fitzgerald and Sarah Fitzgerald) and
Parglade Holdings Pty Ltd (which is equally held by Mr James Finbarr Fitzgerald and his spouse) are
deemed to have an interest in the Shares owned by the JF & OT Fitzgerald Family Trust which are legally
held in the names of Mr James Finbarr Fitzgerald and his spouse, Olive Teresa Fitzgerald, as trustees.
2.
Goldfirm Pty Ltd is the trustee of the Kariong Investment Trust. Mr. Patrick John Tallon has a deemed
interest in the Shares which are held by Goldfirm Pty Ltd as trustee. Pursuant to Section 4(3) of the SFA,
Mr. Patrick John Tallon is also deemed to have an interest in the Shares owned by the Kariong Investment
Trust, which are legally held in the name of Goldfirm Pty Ltd, as trustee.
3. Michael Vaz Lorrain is deemed interested in 23,812,000 shares which are held by Clarendon Pacific
Venture Pte. Ltd.
A N N U A L R E P O R T 2011/2012
NOTICE OF ANNUAL GENERAL MEETING
CIVMEC LIMITED
Company Registration No. 201011837H
(Incorporated in the Republic of Singapore)
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at M
Hotel Singapore, Shenton Room, Basement 1, 81 Anson Road, Singapore 079908 on Thursday, 25
October 2012 at 3.30 p.m., to transact the following businesses:
AS ORDINARY BUSINESSES:
1.
2.
3.
4.
5.
To receive and adopt the Audited Financial Statements of the Company for
the financial year ended 30 June 2012 together with the Directors’ Report
and Independent Auditors’ Report thereon.
To approve the payment of a tax exempt (1-tier) First and Final Dividend of
0.6 Singapore cents per ordinary share for the financial year ended 30 June
2012.
Resolution 1
Resolution 2
To approve the payment of Directors’ fees of S$45,901 for the financial
year ended 30 June 2012.
Resolution 3
To approve the payment of Directors’ fees of S$175,000 for the financial
year ending 30 June 2013, to be paid quarterly in arrears.
Resolution 4
To re-elect the following Directors retiring pursuant to Article 118 of the
Company’s Articles of Association :-
(a) Mr. James Finbarr Fitzgerald
(b) Mr. Patrick John Tallon
(c) Mr. Kevin James Deery
(d) Mr. Chong Teck Sin
Resolution 5
Resolution 6
Resolution 7
Resolution 8
Mr. Chong Teck Sin, will, upon re-election as Director of the
Company remain as Chairman of Audit Committee and Risks and
Conflicts Committee and a member of Nominating and Remuneration
Committees. Mr. Chong will be considered independent for the
purpose of Rule 704(8) of the Listing Manual of Singapore Exchange
Securities Trading Limited.
(e) Mr. Wong Fook Choy Sunny
Resolution 9
Mr. Wong Fook Choy Sunny, will, upon re-election as Director of the
Company remain as Chairman of Remuneration Committee and a
member of Audit, Risks and Conflicts and Nominating Committees.
Mr. Wong will be considered independent for the purpose of Rule
704(8) of the Listing Manual of Singapore Exchange Securities
Trading Limited.
1 0 5
NOTICE OF ANNUAL GENERAL MEETING
6.
To note the retirement of Mr Chelva Retnam Rajah as a director of the
Company, pursuant to Article 118 of the Company’s Article of Association.
[See Explanatory Note (i)]
7.
To re-appoint Messrs Moore Stephens LLP as the Auditors of the Company
and to authorise the Directors to fix their remuneration.
Resolution 10
AS SPECIAL BUSINESSES :
To consider and, if thought fit, to pass the following ordinary resolutions with or without
modifications:-
8.
Authority to allot and issue shares
Resolution 11
“THAT pursuant to Section 161 of the Companies Act, Cap. 50 (the “Act”)
and the Listing Manual of the Singapore Exchange Securities Trading
Limited (“SGX-ST”), authority be and is hereby given to the Directors of
the Company to:
(a)
issue shares in the capital of the Company whether by way of bonus
issue, rights issue or otherwise; and/or
(b) make or grant offers, agreements or options
(collectively,
“Instruments”) that might or would require shares to be issued,
including but not limited to the creation and issue of (as well as
adjustments to) warrants, debentures or other instruments convertible
into shares; and/or
(c)
issue additional Instruments convertible into shares arising from
adjustments made to the number of Instruments
at any time and upon such terms and conditions and for such
purposes and to such persons as the Directors may, in their absolute
discretion, deem fit; and (notwithstanding the authority conferred by
this Resolution may have ceased to be in force) issue shares in
pursuance of any Instrument made or granted by the Directors while
this Resolution was in force, provided that:
(i)
the aggregate number of shares and convertible securities that
may be issued shall not be more than 50% of the total number
of issued shares (excluding treasury shares) in the capital of the
Company or such other limit as may be prescribed by the SGX-
ST as at the date the general mandate is passed;
(ii) the aggregate number of shares and convertible securities to be
issued other than on a pro-rata basis to existing shareholders
shall not be more than 20% of the total number of issued shares
(excluding treasury shares) in the capital of the Company or
such other limit as may be prescribed by the SGX-ST as at the
date the general mandate is passed;
A N N U A L R E P O R T 2011/2012
NOTICE OF ANNUAL GENERAL MEETING
(iii) for the purpose of determining the aggregate number of shares
that may be issued under sub-paragraphs (i) and (ii) above, the
total number of issued shares (excluding treasury shares) shall
be calculated based on the total number of issued shares
(excluding treasury shares) in the capital of the Company as at
the date the general mandate is passed after adjusting for new
the conversion or exercise of any
shares arising from
convertible securities or share options or vesting of share
awards which are outstanding or subsisting as at the date the
general mandate is passed and any subsequent bonus issue,
consolidation or subdivision of the Company’s shares; and
(iv) unless earlier revoked or varied by the Company in general
meeting, such authority shall continue in force until the
conclusion of the next Annual General Meeting or the date by
which the next Annual General Meeting is required by law to
be held, whichever is earlier.”
[See Explanatory Note (ii)]
9.
Authority to issue shares under the Civmec Employee Share Option
Scheme (the "Scheme")
Resolution 12
“THAT authority be and is hereby given to the Directors of the Company,
from time to time, to allot and issue such number of shares in the capital of
the Company as may be required to be issued pursuant to the exercise of
options granted under the Scheme, provided that the aggregate number of
shares to be issued pursuant to the Scheme shall not exceed fifteen per
centum (15%) of the total number of issued shares (excluding treasury
shares) of the Company from time to time, as determined in accordance
with the provisions of the Scheme.”
[See Explanatory Note (iii)]
10. To transact any other business which may properly be transacted at an
Annual General Meeting.
BY ORDER OF THE BOARD
Sin Chee Mei
Ang Siew Koon
Company Secretaries
8 October 2012
Singapore
1 0 7
NOTICE OF ANNUAL GENERAL MEETING
Explanatory Notes:-
(i)
Ordinary Business – Item 6 of the Agenda
Mr. Chelva Retnam Rajah, who is retiring pursuant to Article 118 of the Company’s Article of Association has
indicated that he will not be seeking re-election as a Director of the Company. Upon Mr Rajah retirement, he will
cease to be the Chairman of Nominating Committee and a member of Audit, Risks and Conflicts and Remuneration
Committees.
(ii)
Special Business – Item 8 of the Agenda
The Resolution No. 11 proposed in item no. 8 above, if passed, will empower the Directors of the Company to issue
shares and convertible securities in the Company up to a maximum of fifty per centum (50%) of the total number of
issued shares (excluding treasury shares) in the capital of the Company, of which the aggregate number of shares and
convertible securities to be issued other than on a pro rata basis to existing shareholders shall not exceed twenty per
centum (20%) of the total number of issued shares (excluding treasury shares) in the capital of the Company for such
purposes as they consider would be in the interests of the Company. This authority will continue in force until the
conclusion of the next Annual General Meeting of the Company or the expiration of the period within which the next
Annual General Meeting is required by law to be held, whichever is the earlier, unless the authority is previously
revoked or varied at a general meeting.
(iii) Special Business – Item 9 of the Agenda
The Resolution No. 12 proposed in item no. 9 above, if passed, will empower the Directors of the Company to allot
and issue shares pursuant to the exercise of such options under the Scheme not exceeding fifteen per centum (15%) of
the total number of issued shares excluding treasury shares, of the Company from time to time.
Notes:
(a)
A member of the Company entitled to attend and vote at the Annual General Meeting of the Company is entitled to
appoint not more than two proxies, to attend and vote on his / her behalf, save that no such limit shall be imposed on
the number of proxies appointed by members which are nominee companies. A proxy need not be a member of the
Company.
(b) Where a member appoints two proxies, he shall specify the proportion of his shareholding (expressed as a percentage
of the whole) to be represented by each proxy. If no such proportion or number is specified, the first named proxy
may be treated as representing 100% of the shareholding and any second named proxy as an alternate to the first
named.
(c)
(d)
A corporation which is a member may appoint an authorised representative or representatives in accordance with
Section 179 of the Companies Act, Cap. 50 of Singapore to attend and vote for and on behalf of such corporation.
The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly
authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be
executed under its common seal or signed on its behalf by an officer or attorney duly authorised in writing.
(e) Where an instrument appointing a proxy is signed on behalf of the appointor by the attorney, the letter or power of
attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the
instrument of proxy, failing which the instrument may be treated as invalid.
(f)
The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 80
Robinson Road, #02-00, Singapore 068898, not less than forty-eight (48) hours before the time appointed for holding
the Annual General Meeting.
CIVMEC LIMITED
(Company No. : 201011837H)
(Incorporated in the Republic of Singapore)
ANNUAL GENERAL MEETING
PROXY FORM
*I/We
of
IMPORTANT
1. For investors who have used their CPF monies to buy
Civmec Limited’s shares,
is
forwarded to them at the request of their CPF Approved
Nominees and is sent FOR INFORMATION ONLY.
the Annual Report
2. This Proxy Form is not valid for use by CPF investors
and shall be ineffective for all intents and purposes if
used or purported to be used by them.
3. CPF investors who wish to attend the Meeting as an
observer must submit their requests through their CPF
Approved Nominees within the time frame specified. If
they also wish to vote, they must submit their voting
instructions to the CPF Approved Nominees within the
time frame specified to enable them to vote on their
behalf.
being *a member/members of Civmec Limited (the “Company”), hereby appoint
Name
NRIC/Passport No.
Proportion of Shareholdings to be
represented by proxy
No. of Shares
%
Address:
* and/or
Name
Address:
NRIC/Passport No.
Proportion of Shareholdings to be
represented by proxy
No. of Shares
%
or failing him/her, the Chairman of the Meeting as *my/our *proxy/proxies to vote for *me/us on *my/our behalf and, if
necessary, to demand a poll, at the Annual General Meeting of the Company to be held at M Hotel Singapore, Shenton
Room, Basement 1, 81 Anson Road, Singapore 079908 on Thursday, 25 October 2012 at 3.30 p.m. and at any adjournment
thereof.
*I/We direct *my/our *proxy/proxies to vote for or against the Ordinary Resolutions to be proposed at the Annual General
Meeting as indicated hereunder. If no specific directions as to voting are given, the proxy/proxies will vote or abstain from
voting at *his/their discretion.
To be used on a show
of hands
To be used in the event
of a poll
For#
Against#
For**
Against**
No.
Ordinary Resolutions
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Adoption of the Audited Financial Statements of the Company
for the financial year ended 30 June 2012 together with the
Directors’ Report and Independent Auditors’ Report thereon.
Approval of payment of a tax exempt (1-tier) First and Final
Dividend of 0.6 Singapore cents per ordinary share for the
financial year ended 30 June 2012.
Approval of the payment of Directors’ fees of S$45,901 for the
financial year ended 30 June 2012.
Approval of the payment of Directors’ fees of S$175,000 for the
financial year ending 30 June 2013 to be paid quarterly in
arrears.
Re-election of Mr. James Finbarr Fitzgerald as a Director of the
Company.
Re-election of Mr. Patrick John Tallon as a Director of the
Company.
Re-election of Mr. Kevin James Deery as a Director of the
Company.
Re-election of Mr. Chong Teck Sin as a Director of the
Company.
Re-election of Mr. Wong Fook Choy Sunny as a Director of the
Company.
Re-appointment of Messrs Moore Stephens LLP as
Auditors.
the
Authority to allot and issue shares.
Authority to issue shares under the Civmec Employee Share
Option Scheme.
Dated this ________day of ____________________ 2012
Total number of shares in
(a) CDP Register
(b) Register of Members
No. of Shares
____________________________________
Signature(s) of Member(s)/Common Seal
* Delete accordingly
# Please indicate your vote “For” or “Against” with a “X” within the box provided.
** If you wish to use all your votes “For” or “Against”, please indicate with an “X” within the box provided. Otherwise, please indicate
number of votes “For” or “Against” for each resolution within the box provided.
IMPORTANT. Please read notes overleaf.
1 0 9
Notes :
1.
2.
3.
4.
5.
6.
7.
Please insert the total number of shares held by you. If you have shares entered against your name in the Depository
Register (as defined in Section 130A of the Companies Act, Chapter 50 of Singapore), you should insert that number
of shares. If you have shares registered in your name in the Register of Members of the Company, you should insert
that number of shares. If you have shares entered against your name in the Depository Register and shares registered
in your name in the Register of Members, you should insert the aggregate number of shares entered against your
name in the Depository Register and registered in your name in the Register of Members. If no number is inserted,
the instrument appointing a proxy or proxies shall be deemed to relate to all the shares held by you.
A member of the Company entitled to attend and vote at the general meeting of the Company is entitled to appoint
not more than two proxies, to attend and vote on his / her behalf, save that no such limit shall be imposed on the
number of proxies appointed by members which are nominee companies. A proxy need not be a member of the
Company.
Where a member appoints two proxies, he shall specify the proportion of his shareholding (expressed as a percentage
of the whole) to be represented by each proxy. If no such proportion or number is specified, the first named proxy
may be treated as representing 100% of the shareholding and any second named proxy as an alternate to the first
named.
A corporation which is a member may appoint an authorised representative or representatives in accordance with
Section 179 of the Companies Act, Cap. 50 of Singapore to attend and vote for and on behalf of such corporation.
The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly
authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be
executed under its common seal or signed on its behalf by an officer or attorney duly authorised in writing.
Where an instrument appointing a proxy is signed on behalf of the appointor by the attorney, the letter or power of
attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the
instrument of proxy, failing which the instrument may be treated as invalid.
The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 80
Robinson Road, #02-00, Singapore 068898, not less than forty-eight (48) hours before the time appointed for holding
the Annual General Meeting.
General :
The Company shall be entitled to reject the instrument appointing a proxy or proxies if it is incomplete, improperly
completed or illegible or where the true intentions of the appointor are not ascertainable from the instructions of the
appointor specified in the instrument appointing a proxy or proxies. In addition, in the case of members whose shares are
deposited with The Central Depository (Pte) Limited, the Company may reject any instrument appointing a proxy or proxies
lodged if the member, being the appointor, is not shown to have shares entered against his name in the Depository Register
as at 48 hours before the time appointed for holding the Annual General Meeting as certified by The Central Depository
(Pte) Limited to the Company.
1 1 1
“
We believe in innovation and technology and are always striving to achieve
outstanding performance and efficiencies by applying the best practices,
processes and procedures across all projects.
“
CIVMEC Limited
Company Registration No. 201011837H
SINGAPORE
80 Robinson Road #02-00 Singapore 068898
AUSTRALIA
16 Nautical Drive, Henderson, Western Australia 6166
Telephone: +61 8 9437 6288
Facsimile: +61 8 9437 6388
Email: civmec@civmec.com.au
www.civmec.com.au