STRENGTH THROUGH
INNOVATION
Growth as a
result of forces
working together
www.civmec.com.au
Civmec supplied precast concrete
and structural steel components for the
Chevron operated Gorgon Project on
Barrow Island, Western Australia
1
view online at www.civmec.com.auCIVMEC LIMITED ANNUAL REPORT 2012/2013 TABLE OF CONTENTS
Table of Contents
FINANCIAL HIGHLIGHTS
4
$406
$36
$329
$30
2012
2013
2012
2013
SALES REVENUE S$M
23.5%
PROFIT AFTER TAX S$M
18.9%
$54
$49
$49
$44
Record revenue of
S$405.9 million and
a profit after tax of
S$36.0 million, up 18.9%
on 2012
2012/2013 HIGHLIGHTS 6
2012
2013
2012
2013
EBITDA S$M
11.6%
EBIT S$M
11.5%
7.20
22.0
6.05
17.8
Civmec demonstrates
its versatility and
innovative approach
through the successful
delivery of key projects
2012
2013
2012
2013
EARNINGS PER SHARE S$(CENTS)
NTA PER SHARE S$(CENTS)
19.0%
23.6%
CAPABILITY OVERVIEW 10
Civmec is a multi-
disciplinary services
provider to the oil and
gas, resources and
other industries
CIVMEC TIMELINE 12
A chronology of
key milestones and
achievements
2 Civmec Limited Annual Report 2013
CHAIRMAN’S STATEMENT
14
Civmec has
consolidated its
strengths and is now
poised to continue the
momentum
CEO ANNUAL REVIEW
16
Civmec continued
to achieve solid
performances across all
segments and delivered
increased revenue and
profits in 2013
view online at www.civmec.com.au
SEGMENT REPORTS
28
CORPORATE SOCIAL RESPONSIBILITY 32
BOARD OF DIRECTORS
EXECUTIVE TEAM
CORPORATE GOVERNANCE
CORPORATE REGISTRY
FINANCIAL REPORTS
STATISTICS OF SHAREHOLDERS
36
38
40
55
56
127
NOTICE OF ANNUAL GENERAL MEETING 129
PROXY FORM
133
3
FINANCIAL HIGHLIGHTS
Financial Highlights
Civmec continued to achieve solid performances across all
segments and delivered increased revenue and profit in 2013.
• RECORD REVENUE OF S$405.9 MILLION, 23.5% INCREASE ON 2012
• EBITDA OF S$54.3 MILLION, 11.6% INCREASE ON 2012
• NET PROFIT AFTER TAX OF S$36.0 MILLION, 18.9% INCREASE ON 2012
• FINAL DIVIDEND RECOMMENDED 0.7 CENTS, TAX EXEMPT
FOUR YEAR
PERFORMANCE
S$’000
Revenue
EBITDA
EBIT
NPAT
Operating Cash Flow
EPS - Basic (cents)
Dividend per share (cents)
N/M - Not meaningful
* Proposed
AT YEAR END
Total Equity
Total Assets
Current Ratio (times)
NTA per share (cents)
2010
22,293
6,042
4,859
3,236
6,949
N/M
N/M
2011
61,007
14,579
12,359
7,522
1,694
1.50
N/M
2012
2013
328,654
405,924
48,640
44,058
30,310
26,144
6.05
0.6
54,285
49,116
36,049
8,643
7.20
0.7*
S$’000
2012
2013
CHANGE
89,412
179,358
1.53
17.8
110,178
193,256
1.84
22.0
23.2%
7.7%
20.3%
23.6%
4 Civmec Limited Annual Report 2013
$406
$36
$329
$30
2012
2013
2012
2013
SALES REVENUE S$M
23.5%
PROFIT AFTER TAX S$M
18.9%
$54
$49
$49
$44
2012
2013
2012
2013
EBITDA S$M
11.6%
EBIT S$M
11.5%
7.20
22.0
6.05
17.8
2012
2013
2012
2013
EARNINGS PER SHARE S$(CENTS)
NTA PER SHARE S$(CENTS)
19.0%
23.6%
5
view online at www.civmec.com.au 2012/2013 HIGHLIGHTS
Operational Highlights
SUCCESSFUL DELIVERY OF
KEY EXPANSION PROJECTS
The successful delivery of two major expansion projects for Rio Tinto at the
Hope Downs 4 and Marandoo mine sites affirms Civmec’s position in the
market as a leading provider of site civil construction works.
CIVMEC AWARDED
INCREASED
SCOPE OF WORKS
ACROSS MULTIPLE
DISCIPLINES
6 Civmec Limited Annual Report 2013
Fabrication & assembly of modules for BHP Billiton
Precast & assembly of seawater intake tank for Chevron
INNOVATIVE APPROACH
SECURES OIL AND GAS CONTRACT
Civmec’s culture of innovation is demonstrated through its
integrated capability, innovative project methodology and
ability to rapidly develop a remote manufacturing facility. We
REPEAT CONTRACT
ATTRIBUTED
TO DELIVERY
PERFORMANCE
Further to the 11,000 tonnes of
modularised structures delivered
for the BHP Biilliton Inner Harbour
project, Civmec was awarded a
contract for the fabrication and
modular assembly of systems
T, Y and U for Finucane Island
also mobilised a skilled workforce to a remote job site as part
Blending Yards.
of our contract with Best JV to supply 37,500m3 of precast
concrete to the Wheatstone LNG project.
PRECISION REQUIREMENTS
ACHIEVED FOR SUBSEA PROJECT
Civmec’s ability to deliver high end technology for the subsea
environment was evidenced through the delivery of the Coniston
subsea manifold for Apache.
The three systems consist of 36
pre-assembled modules and weigh
approximately 2,300 tonnes. The
148 man team completed the
assembly of all modules on the
29th of June 2013, recording zero
safety incidents for the duration of
the project.
Throughout the project,
Civmec achieved all
delivery milestones.
7
view online at www.civmec.com.au 2012/2013 HIGHLIGHTS
Development Highlights
ORGANISATIONAL
RESTRUCTURE
Through our diverse capabilities and existing customer relationships,
Civmec can readily adapt to meet market requirements, in particular,
increased emphasis on output efficiency.
During the year Civmec added Asset Management and Integrated
Services to our operational management structure to maximise our focus
on, and alignment with, this business stream.
8 Civmec Limited Annual Report 2013
OCCUPANCY OF
NEW OFFICE
6,500m2 FOUR STOREY
OFFICE COMPLETE
DEDICATED TRAINING
FACILITIES
STRATEGIC ASSET
LOCATED ON OUR 100,000m2
LANDHOLDING IN OIL AND
GAS PRECINCT
EXPANSION OF
GEOGRAPHIC
FOOTPRINT
CIVMEC APPLIES PROVEN
CAPABILITIES TO NEW
GEOGRAPHIC MARKETS
ESTABLISHMENT OF
OPERATIONAL BASE IN
DARWIN, THE CAPITAL OF
AUSTRALIA’S NORTHERN
TERRITORY
WORKFORCE
PEAKED AT OVER
1100
IN 2013
9
view online at www.civmec.com.au
CAPABILITY OVERVIEW
Capability Overview
Civmec’s multi-disciplinary capability offerings enable us to strategically deliver
on all project life cycle requirements.
SITE CIVIL WORKS
Our civil business has been the heart of Civmec’s operations and is still core
to what we do. We are at the forefront of creating innovative construction
techniques that enable us to meet constrained deadlines. We provide a
full range of civil services which include: detailed earthworks, reinforcing
steelwork, formwork, cast in embedments, concrete placement, backfill
and compaction to final handover. Leveraging off our precast concrete
operations, we can offer alternative site construction methods to deliver site
labour efficiencies across our projects.
PRECAST CONCRETE
Our precast concrete business has the capability to manufacture reinforced
concrete products of all sizes for the civil construction industry including:
structural foundations, caissons, floor slabs, retaining walls and suspended
slab sections. We are able to manufacture precast concrete structures to
tight tolerances to suit mechanical interfaces during site installation. We are
also able to work to stringent specifications associated with concrete mixes
and controlled curing temperatures. The precast business can draw on our
steel fabrication capabilities to manufacture custom steel formwork for
multiple use applications.
HEAVY ENGINEERING
Civmec’s 29,300m2 undercover waterfront facility is fully equipped with
modern automated fabrication and robotic welding equipment. We
fabricate: structural steel, platework, tanks, vessels, materials handling
equipment, offshore structures, subsea structures and pipe spooling for
all types of process plants. We undertake both large and small fabrication
projects including specialist welding of exotic materials such as titanium,
stainless steels, duplex steel and copper alloys.
10 Civmec Limited Annual Report 2013
MODULARISATION
Our large undercover facility has high bays to cater for the assembly of
large modules up to 29m wide x 19m high x 149m long. These can be
fabricated and assembled into single units in our central bay. With the use
of the onsite 4,600 tonne capacity Self Propelled Modular Transporters,
modules can be transported with ease to the 6,000 tonne and 15,000
tonne wharves located only 500 metres away without the need to cross
any public roads.
SMP
Our structural, mechanical and piping (SMP) installation business has
the technical expertise, project experience and skilled staff to undertake:
structural assembly and erection, site welding, mechanical installations and
alignments, piping installation and pre-commissioning support. We have the
capacity to mobilise quickly to undertake site installation projects locally
and at remote sites throughout Australia.
INSULATION
The Cape Civmec Insulation Group (CCIG), a 50% Civmec-owned
company, provides industrial insulation solutions. We have the capability to
undertake: sheet metal fabrication, light gauge fabrication, site installation
of hot, cold, acoustic and cryogenic insulation systems. The sheet metal
workshop is equipped with modern machinery including a high production
computerised processing and forming machine.
OFFSHORE LOGISTICS
Our offshore logistics business provides comprehensive integrated supply
chain solutions to onshore and offshore drilling. Further services offerings
include production support services, offshore logistic support including
onshore supply base, container hire, chartering of marine vessels, supply of
offshore works equipment, project and procurement management.
11
view online at www.civmec.com.au CIVMEC TIMELINE
Civmec Timeline
July 2009
Commenced Operations
April 2011
Workshop officially opened
The Hon. Premier Colin Barnett
(shown on right) officially opens
Civmec’s 29,300m2 waterfront
manufacturing facility.
2009
2010
2011
December 2009
Sod Turning (first activity on Henderson land)
Ceremony officiated by the State Minister
for Industrial Development,
the Hon. Mr Troy Buswell (shown
on right).
April 2010
Commenced Erection of Workshop
Erection of Civmec’s 29,300m2
waterfront manufacturing facility
commenced.
12 Civmec Limited Annual Report 2013
June 2013
Acquisition of DOLB
Civmec expands its geographic
footprint through the acquisition of
Darwin Offshore Logistics Base in
Australia’s Northern Territory.
April 2012
Publicly Listed on the Singapore
Exchange
Following a successful initial public
offering, Civmec Ltd was listed on
the Singapore Exchange.
2012
2013
August 2012
Commencement of Office Development
Construction of Civmec’s 6,500m2
office development began.
April 2013
Office development completed
Civmec took occupancy of new
headquarters in Australian Marine
Complex in Henderson.
13
view online at www.civmec.com.au CHAIRMAN’S STATEMENT
FOUNDATIONS
READY FOR SOLID
FUTURE GROWTH
After four years of developing relationships, building capability and capacity,
and most importantly successfully delivering on projects for major companies
in the oil and gas, and mining sectors, Civmec has consolidated its strengths
and is poised to continue the momentum.
When establishing this business, our goal was to develop a multi-disciplinary
organisation strongly focused on servicing the oil and gas, mining, utilities
and infrastructure sectors. The soundness of that strategy has been evidenced
by the tremendous growth Civmec has achieved in such a short period. That
growth continued in the 2013 financial year as the company substantially
grew its activity in the expanding oil and gas sector and matured its position
in the mining sector. The Board and executive leadership team continues to
implement strategies to further develop the business, in particular through
applying our proven capabilities in new geographic markets and expanding our
service scope to align with the changing needs of our existing customer base.
In contrast to a backdrop of challenging global economic conditions, I am
pleased to report that our revenue increased by 23.5% from S$328.6 million to
S$405.9 million for the financial year ended 30 June 2013. In turn the Group’s
net profit after tax has grown by 18.9% from S$30.3 million to S$36.0 million.
That this profit result is substantially higher than the company’s total revenue in
2010 is a mark of how much Civmec has grown, and how well it has performed.
“Civmec has
consolidated its
strengths and is
poised to
continue the
momentum”
James Fitzgerald
Executive Chairman
14 Civmec Limited Annual Report 2013
the A$29 billion Wheatstone LNG
and A$33 billion Ichthys underway
in western and northern Australia
respectively. In line with strategy,
Civmec made significant inroads in
this sector during the year, increasing
revenues by 81% to S$144 million
meaning it now represents over one-
third of total revenue.
To further capitalise on predicted
growth in this sector, and to continue
our strategic plan of geographical
expansion, we established an
operational base in Darwin, the capital
of Australia’s Northern Territory.
The Darwin Offshore Logistics Base
strategically places the Group for
the A$44 billion in resources and
energy projects already underway or
planned for the Northern Territory. We
are genuinely excited by the future
benefits it will bring.
satisfying company performance.
I am immensely proud of what we
have achieved together.
On behalf of the Board I extend our
thanks to Mr Chelva Retnam Rajah,
who retired as an Independent
Director with effect from October
25, 2012. The insights and expertise
Chelva brought to the boardroom
were highly valued and will be
missed. I also welcome Mr Douglas
Owen Chester to the Board as
Independent Director. He has already
proved to be a valuable addition.
On a personal level I thank the
current Board of Directors for
providing the vision and guidance
that our organisation needs to ensure
our continued success. Finally I
would like to extend my appreciation
to all our shareholders who continue
to show tremendous support for the
As we look to the future we will continue to serve
all our stakeholders with diligence.
Behind our achievements lies the
strength of Civmec – our diversity,
our innovation, our reputation for
excellence, and our people.
Our strength in innovation provides
the foundation for the delivery of
high quality, cost effective solutions
to our clients, which in turn builds
our reputation. At the heart of this
are our people, whose dedication
and expertise has been the catalyst
for the company’s success.
Civmec’s proven culture of success
derives from combining our
motivated and skilled workforce with
leadership from our Chief Executive
Officer and his highly regarded and
experienced management team. It is
this driving culture and passion that
gives the confidence and belief to
achieve Civmec’s long-term vision.
I take this opportunity to thank
our staff for the contribution they
have made to this year’s extremely
company as we enter into an exciting
phase of our strategic direction.
As we look to the future we will
continue to serve all our stakeholders
with diligence. Our mission is to
provide innovative solutions to our
clients and be known as a company
that delivers and is ever dependable.
We will achieve this by investing
in our people, by challenging our
processes with rigour to continually
improve, and by continuing to
position the business to meet future
requirements.
Yours Sincerely
James Finbarr Fitzgerald
Executive Chairman
Civmec Limited
15
Our plan to initially focus on
Australia’s robust resources
sector has been instrumental in
countering adverse global economic
effects. Civmec has matured and
strengthened its market position in
this sector and remains well placed
to pursue both new mine expansion
and mine infrastructure and upgrade
contracts going forward.
Through our diverse capabilities
and existing customer relationships,
Civmec can readily adapt to
the perceived shift in resources
investment, in particular increased
emphasis on output efficiency in
the mining sector. During the year
we added Asset Management
and Integrated Services to our
Operational Management structure
to maximise our focus on, and
alignment with, this business stream.
This forms part of our corporate
strategy of expansion and provides
an avenue to meet the current focus
of the mining sector.
It also establishes the basis for
future opportunities in the oil and
gas sector, which remains strong as
is evident with new projects such as
view online at www.civmec.com.au
STRENGTH THROUGH
INNOVATION
•
PROFIT GROWTH CONTINUES AS REVENUES REACH NEW RECORD
• OIL AND GAS LEADS GROWTH ACROSS ALL SEGMENTS
•
STRATEGIC EXPANSION INTO NORTHERN AUSTRALIA AND
ASSETS MANAGEMENT SEGMENT
• OIL AND GAS INVESTMENT FORECAST TO INCREASE
• CONTINUED HIGH MINING INVESTMENT DEMAND
Pat Tallon
Chief Executive Officer
16 Civmec Limited Annual Report 2013
16 Civmec Limited Annual Report 2013
CEO ANNUAL REVIEW “Sustaining our
competitive advantage
is driven through
innovation and
unlocking its value”
After another strong year it is a pleasure to present
and refining the organisational resources necessary
our 2013 Annual Report to our shareholders and
to continue to meet our targeted market’s evolving
stakeholders. Following on from a successful 2012,
requirements. This included the completion of capital
Civmec achieved solid performances across all
projects such as our new office facilities.
segments in 2013 and once again delivered substantial
increases in revenue and profit.
At the same time as we were consolidating those
key ingredients for success, the company began
After significant growth in the prior year, we made
to establish the complementary resources and
significant inroads into the Oil and Gas sector,
relationships that will drive future growth in other
strengthened our position in the mining sector, and
regions and segments, particularly oil and gas. The
expanded our facilities, workforce and capabilities
results to date have been very pleasing.
accordingly.
With solid foundations in place and new strategic
A key focus of the 2013 financial year was consolidating
initiatives underway Civmec is well positioned to
the company’s position in all our operating markets.
capitalise on the substantial pipeline of investment in
This was achieved by successfully delivering major
its key operating markets.
projects and securing new work, while bedding down
17
view online at www.civmec.com.au 54,593
54,593
48,640
48,640
49,420
49,420
44,058
44,058
35,912
35,912
30,310
30,310
CEO ANNUAL REVIEW
EBITDA
EBITDA
2012
2012
2013
2013
EBIT
EBIT
S$000’s
S$000’s
NPAT
NPAT
Financial Result
405,924
405,924
’
’
0
0
0
0
0
0
$
$
S
S
E
E
U
U
N
N
E
E
V
V
E
E
R
R
’
’
0
0
0
0
0
0
$
$
S
S
A
A
D
D
T
T
I
B
I
B
E
E
’
’
0
0
0
0
0
0
$
$
S
S
X
X
A
A
T
T
R
R
E
E
T
T
F
F
A
A
T
T
I
F
I
F
O
O
R
R
P
P
61,007
61,007
14,579
14,579
328,654
328,654
Over the four-year period of our initial business plan, Civmec’s revenues have
grown eighteen fold from $22.3 million in 2010, to $405.9 million in 2013, a new
record and a 23.5% increase on the previous year (2012: $328.6 million).
22,293
22,293
The company’s success in building business in the Oil and Gas sector was reflected
in a substantial increase in revenue to $144 million (2012: $79 million). We also
2012
2012
2013
2013
2010
2010
2011
2011
achieved growth in the mining sector, which contributed revenues of $262 million
(2012: $249 million).
REVENUE UP BY
REVENUE UP BY
23.5%
23.5%
54,285
54,285
The company continued to increase its profits while maintaining a solid Earnings
48,640
48,640
Before Interest, Tax, Depreciation and Amortization (EBITDA) margin of 13.4%. Net
Profit after tax improved 18.9% to $36.0 million (2012: $30.3 million) and EBITDA
rose to $54.3 million (2012: $48.6 million). Earnings per Share were 7.20 cents
6,042
6,042
(2012: 6.05 cents).
As a consequence of this pleasing financial performance, the Board is
2010
2010
2011
2011
2012
2012
2013
2013
recommending a final dividend of 0.7 cents per ordinary share, subject to approval
by our shareholders at the forthcoming Annual General Meeting. During the year, an
ordinary dividend of 0.6 cents per ordinary share was paid on 21 December 2012, as
36,049
36,049
EBITDA UP BY
EBITDA UP BY
11.6%
11.6%
recommended in last year’s report.
30,310
30,310
Our investment in infrastructure to support continuing expansion of project
delivery, and in particular the completion of the office building at Henderson,
7,522
7,522
contributed to higher capital expenditure this year. Together with a maiden
3,236
3,236
dividend, a substantial increase in tax payments and other minor capital items,
the net cash reduced to $23.1 million (2012: $33.8 million). At year end, net debt to
2010
2010
2011
2011
2012
2012
2013
2013
equity is a very conservative 5.8% (2012: -22.8%).
PROFIT AFTER TAX UP BY
PROFIT AFTER TAX UP BY
18.9%
18.9%
0
0
0
0
0
0
$
$
S
S
’
’
0
0
0
0
0
0
$
$
S
S
’
’
Cashflow Movement 2012
Cashflow Movement 2012
Cash at
Cash at
beginning of
beginning of
year
year
Operating
Operating
Activities &
Activities &
Other
Other
Investment
Investment
Activities
Activities
Financing
Financing
Activities
Activities
Income
Income
Taxes Paid
Taxes Paid
Cash at
Cash at
End of Year
End of Year
Cashflow Movement 2013
Cashflow Movement 2013
70,000
70,000
60,000
60,000
50,000
50,000
40,000
40,000
30,000
30,000
20,000
20,000
10,000
10,000
70,000
70,000
60,000
60,000
50,000
50,000
40,000
40,000
30,000
30,000
20,000
20,000
10,000
10,000
Cash at
Cash at
beginning of
beginning of
year
year
Operating
Operating
Activities &
Activities &
Other
Other
Investment
Investment
Activities
Activities
Financing
Financing
Activities
Activities
Income
Income
Taxes Paid
Taxes Paid
Cash at
Cash at
End of Year
End of Year
18 Civmec Limited Annual Report 2013
Financial Result
RECORD REVENUE
$405.9 MILLION
23.5%
UP ON 2012
EBITDA OF
$54.3 MILLION
11.6%
INCREASE ON 2012
NPAT OF
$36 MILLION
18.9%
INCREASE ON 2012
FINAL DIVIDEND OF
0.7CENTS
P R O P O S E D
view online at www.civmec.com.au
19
view online at www.civmec.com.au
CEO ANNUAL REVIEW
Financial Result (cont’d)
PERFORMANCE
S$’000
2012
2013
CHANGE
Revenue
EBITDA
EBIT
NPAT
Operating Cash Flow
EPS - Basic (cents)
Dividend per share (cents)
* Proposed
AT YEAR END
Total Equity
Total Assets
Current Ratio (times)
NTA per share (cents)
328,654
405,924
<
23.5%
48,640
54,285
<
11.6%
44,058
49,116
<
11.5%
30,310
26,144
6.05
0.6
36,049
<
18.9%
8,643
<
-66.9%
7.20
0.7*
<
19.0%
<
16.7%
S$’000
2012
2013
CHANGE
89,412
110,178
<
23.2%
179,358
193,256
<
7.7%
1.53
17.8
1.84
22.0
<
20.3%
<
23.6%
20 Civmec Limited Annual Report 2013
54,593
49,420
48,640
44,058
48,640
35,912
30,310
54,593
49,420
44,058
35,912
30,310
EBITDA
EBIT
NPAT
2012
2013
S$000’s
2012
2013
S$000’s
EBITDA
EBIT
NPAT
54,593
48,640
49,420
405,924
44,058
328,654
35,912
30,310
61,007
22,293
405,924
328,654
’
0
0
0
$
S
E
U
N
E
V
E
R
61,007
22,293
EBITDA
EBIT
NPAT
2010
2011
2012
2013
2012
2010
2013
2011
2012
S$000’s
2013
REVENUE UP BY
23.5%
405,924
54,285
328,654
48,640
61,007
14,579
22,293
6,042
2010
2010
2011
2011
2012
2013
2012
2013
REVENUE UP BY
EBITDA UP BY
23.5%
11.6%
54,285
48,640
36,049
30,310
14,579
7,522
6,042
3,236
2010
2011
2012
2013
’
0
0
0
$
S
A
D
T
I
B
E
’
0
0
0
$
S
X
A
T
R
E
T
F
A
T
I
F
O
R
P
2010
2012
2013
PROFIT AFTER TAX UP BY
EBITDA UP BY
2011
11.6%
18.9%
REVENUE UP BY
23.5%
54,285
48,640
14,579
6,042
2010
2011
2012
2013
EBITDA UP BY
11.6%
36,049
7,522
30,310
RETURN ON
EQUITY
32.7%
PROFIT AFTER TAX UP BY
3,236
2010
2012
2011
2013
18.9%
’
0
0
0
$
S
E
U
N
E
V
E
R
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21
view online at www.civmec.com.au
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view online at www.civmec.com.au
CEO ANNUAL REVIEW
Operational Overview
• Successfully completed approximately 13,000 tonnes of fabricated and
modularised structures for BHP’s S$5.6 billion Port Facility.
• Manufactured and supplied subsea manifolds for Apache’s Coniston project,
and awarded further works for the Balnaves and Greater East Spar projects.
• Supplier of modules and structural steel for the Chevron A$52 billion Gorgon
LNG Project.
• Manufactured and supplied approximately 120,000 tonnes of precast concrete
for the Chevron Gorgon LNG Project on Barrow Island.
• Awarded contract to supply 90,000 tonnes of pre-cast Accropode II units to
the Chevron Wheatstone LNG Project.
• Successfully completed the fabrication and delivery of the largest iron ore car
dumpers ever built in Australia.
• Successful completion of circa 35,000m3 concrete civil packages for Rio Tinto.
Given the high levels of forecast expenditure in the oil and gas sector in
coming years, the significant growth achieved by our Oil and Gas Segment was
particularly pleasing. In this sector the company secured and commenced a
number of new contracts for the manufacture and supply of high-specification
subsea manifolds.
As the main Australian supplier of structural steel for the A$52 billion Gorgon
Liquefied Natural Gas (LNG) Project, Civmec was invited to also manufacture and
“Synergies achieved
through the integration
of the company’s
supply approximately 120,000 tonnes of precast concrete modules.
various core capabilities
Reflecting the strong relationships we have developed as a result of successful
project work, several key contracts that were secured and commenced in 2012
increased in scope and value during the year, providing additional site civil,
fabrication and precast concrete works.
Among many notable operational highlights during the year, the company
successfully completed 13,000 tonne of fabrication and modularised structures
for BHP’s port facility, as well as completing the fabrication and delivery of the
largest iron ore car dumper ever built in Australia.
continued to enable
Civmec to deliver
smarter and more
cost-effective projects
during the year.”
Further details of operations undertaken are included in the Segment Operational
Reports on pages 28 to 30.
22 Civmec Limited Annual Report 2013
Safety
At Civmec, health and safety remains our priority in conducting our business.
The well being of our employees is of the utmost importance and we continually
strive to ensure we have a ‘safe day, good day’ everyday.
We have a practical and effective safety management system which is used
to direct and assist employees in working safely in accordance with our high
standards. The commitment of our Board and Management, along with the
cooperation and involvement of our people, is essential in achieving a high level
of accident prevention and by engaging input from employees at all levels, we
continually improve our procedures and standards.
The development and implementation of our “positive safety culture”
throughout our sites has improved site safety statistics and provided a
considerable morale boost for the site teams. With the support and guidance
of management, the safety initiatives were established and implemented by
the site teams and were based on the principle of “respect”, being the respect
and well being for each other, and respect for company assets and equipment.
This resulted in the Total Recordable Incident Frequency Rating (TRIFR) on site
reach an all time low of 1.5. We continue to see positive results with the number
of incident free days improving.
Civmec has also implemented an employee safety incentive which will
simultaneously benefit The Dreamfit Foundation, a not-for-profit organisation to
help people with disabilities fulfil dreams. By achieving specific safety KPI’s, the
company will donate proceeds from the subsequent savings to Dreamfit.
23
view online at www.civmec.com.au CEO ANNUAL REVIEW
STRATEGIC
HIGHLIGHTS
In addition to successfully
executing a number of major
projects, and securing further work
in existing markets, Civmec made
significant progress on a number
of initiatives that will enable the
company to continue to build on its
ability to provide turnkey solutions,
by expanding and evolving its
capabilities and skilled disciplines.
We are proud to see the
completion and occupancy of our
new, purpose-built headquarters
office complex adjacent to our
existing 29,300m2 waterfront
workshop facilities in Henderson,
Western Australia. The new offices
enable us to better meet the
needs of our clients and provide a
greater support to our subsidiary
operations in Onslow, Darwin
and other site locations. This
enables us to maximise off site
project planning and management
activities, resulting in a lower
project cost base and more
attractive value proposition for our
current and prospective clients.
During the year, we further
expanded the Henderson facilities
with the inclusion of adjacent land
Civmec’s CEO, Pat Tallon
addressing the CCI Resource
Conference in June 2013
“Civmec made significant progress on a
number of initiatives that will enable the
company to continue to build on its ability
to provide turnkey solutions”
The company has committed to enhance its capabilities and onsite lifting
capacity through the purchase of several all-purpose cranes that range
from 20 to 275 tonnes. These investments further improve our ability to
provide turn-key solutions to remote major construction projects.
The company has also expanded to secure additional work in northern
Australia by establishing an operational foothold in Darwin. Darwin is the
economic and industrial hub of the Northern Territory, and approximately
4,000kms from our Henderson headquarters.
for a greater modular assembly
The acquisition of name and assets of the Darwin Offshore Logistics Base
and storage capacity. Now spread
facility provides a 38,000m2 operational support base and offsite storage
over 100,000m2 and featuring a
capacity to service the oil and gas and mining industries, as well as private
‘state of the art’ modern fabrication
and government funded infrastructure projects throughout the region.
facility as well as waterfront access,
To do this successfully, we intend to replicate the core management and
the Henderson complex is the
workforce capabilities and structures that have been instrumental in
largest heavy engineering facility
growing the business in Western Australia in recent years.
of its kind in Australia.
24 Civmec Limited Annual Report 2013
Civmec’s new 6,500m2 four storey ‘state of the art’ office in Henderson, Western Australia, is fully equipped to a high
standard and can accommodate over 450 personnel. Facilities include: Training and induction centre, medical centre
with a qualified nurse for onsite first aid and pre-employment medicals, boardroom and meeting rooms with video and
conferencing facilities and fully serviced Client offices.
In order to focus on further opportunities in the mining
This is another way in which Civmec can unlock value,
sector, and as miners pursue a renewed emphasis
and exploit synergies, by maintaining and developing
on maintaining and improving output efficiencies
strategic partnerships with all the stakeholders and
from existing infrastructure, we supplemented
contributors who share a common vision in achieving
our operational structure with a dedicated Asset
project goals and outcomes.
Management and Integrated Services business unit.
This contributes to the company’s expansion strategy
by enabling us to pursue more opportunities in the
operational cycles of mines and other infrastructure,
while continuing to leverage our existing customer
relationships and company capabilities.
25
view online at www.civmec.com.au CEO ANNUAL REVIEW
“Although we
recognise the timing
risks associated with
project horizons,
we will continually
position ourselves
to ensure we take
advantage of the
opportunities”
26 Civmec Limited Annual Report 2013
OUTLOOK
Following extraordinary growth in 2012, 2013 was a year in which
successes were consolidated by maintaining a consistent order book. As a
result the company is now ready to capitalise on those solid foundations
and embark on a longer term expansion phase. Our ability to leverage
our multi-disciplinary capabilities to adapt and service a broad range
of construction and fabrication work in all our key operating markets
and beyond provides expansive scope for securing new business. This is
reflected in our high levels of tendering activity, which also contributes to
our positive outlook.
With A$268 billion committed to
additional investment focus on
Australian resources and energy
output capacity and efficiency
projects, and a further A$378
improvements that will involve
billion either announced or in the
strategic infrastructure and
feasibility stage, both the oil and gas
upgrades. Our new Asset
and mining market sectors remain
Management and Integrated
positive. With 65% of the committed
Services segment is specifically
projects and 44% of the announced/
targeting these opportunities.
feasibility stage projects in Western
Australia and the Northern Territory,
we are well positioned to capitalise
on those opportunities, particularly
as a result of the strategic initiatives
and facility investments made during
the year.
With the A$52 billion Gorgon LNG
project well underway and the A$29
billion Wheatstone LNG recently
commencing, the oil & gas market is
strong and is forecast to remain so
for a number of years.
Although not experiencing the
rapid growth of recent years, capital
expenditure in the mining sector
is forecast to remain at high levels
despite some new mine projects
being deferred to recommence in the
future. There are however a number
of new projects that are likely to
come online in the near future.
Strategically and geographically we
are positioned well to capitalise on
these prospects.
The outlook for other infrastructure
projects is also encouraging as
investment in port upgrades,
defence, energy and agriculture
sectors gain momentum.
Although we recognise the timing
risks associated with project
horizons, we are continually
positioning the company to
ensure we take advantage of the
opportunities.
Our ability to capitalise on the
opportunities that lie ahead, as with
our success to date, is very much a
team effort. To that end I am very
pleased the leadership, passion
and enthusiasm of the founding
executive team has been instilled
throughout the company. These
values and culture have produced
proactive, skilled teams with an
innovative ‘can do’ attitude that
continues to successfully deliver
the standard of excellence our
customers have come to expect
Capital expenditure in the mining
from Civmec.
sector is also supplemented by
RESOURCE AND ENERGY PROJECTS
WESTERN AUSTRALIA
A$297bn
NORTHERN TERRITORY
A$44bn
$141.7b
$76.9b
$78.2b
$2.5b
$7.9b
$33.8b
QUEENSLAND
A$206bn
TOTAL AUSTRALIA
A$645bn
$32.1b
$80.8b
$145.0b
$267.6b
$93.6b
$232.5b
Announced
Feasibility Stage
Committed
(Source: Bureau of Resources and Energy Economics, major projects report April 2013).
I thank and congratulate all our employees for
We look forward to the challenges and opportunities
their effort and achievements over the year, and
during the 2014 financial year and beyond.
their unfaltering contribution in maintaining our
reputation of being the supplier of choice. Finally, I
would also like to thank my fellow Directors on the
Board, our shareholders, business partners and other
stakeholders, for their ongoing support of Civmec.
Yours sincerely,
Through the commitment and passion of our Board,
the Executive team and all our employees, we will
continue to ensure we provide value for money for
Patrick John Tallon
Chief Executive Officer
our shareholders and clients.
Civmec Limited
27
view online at www.civmec.com.au SEGMENT REPORTS
OIL AND GAS
The Oil and Gas Segment performed well during the 2013 financial year, increasing revenue contribution by more than
80%. New contracts included subsea projects for Apache’s Coniston, Balnaves and Greater Eastern Spar projects. Critical
to the oil and gas industry, subsea work is both high quality and growing in size, so our ability to secure these projects
reflects our high-end capabilities and potential for the future. The scope of works included the fabrication and assembly
of a three and six slot oil manifold; two oil production line end manifolds (PLEMs); and a number of goosenecks. Civmec
also provided support and site services through factory acceptance and integrated systems testing.
For the Gorgon LNG project – one of the world’s largest natural gas projects, and the largest single resource project in
Australia’s history – the company has supplied over 11,000 tonnes of structural steel and manufactured approximately
120,000 tonnes of precast footings under its contract for underground services package. The ability to produce this
at the waterfront facility in Henderson eliminated environmental impact at the site. Demonstrating Civmec’s ability
to deliver both quality and quantity to support project requirements, peak production of these precast concrete
components reached 1,250m3 per week.
Reflecting the high regard in which the company’s capabilities are held, Civmec was awarded additional scope in
surface treatment, pipe spooling and modular assembly. Additional Gorgon contracts for structural steel components
fabricated in the Henderson facility are now being assembled and erected.
The company also marked its entry into the Chevron operated Wheatstone LNG project by securing an Australian-first
contract to produce 37,500m3 of Accropode II precast concrete blocks for construction of the LNG wharf. To facilitate
efficient project delivery Civmec established a 50,000m2, purpose built yard and set up a nearby accommodation
village to house our workforce, close to the installation site, and established the equipment and facility required to
produce 12,500 individual Accropode II units.
CONISTON SUBSEA MANIFOLD &
PLEM (PIPELINE END MANIFOLD)
Location: Coniston/Novara Oil field
development
Civmec scope of works: Supply,
fabrication and assembly of an
Oil Manifold and Oil Production
Line End Manifold. The Coniston
Development Project is a new
subsea oil field development located
in the Exmouth Basin offshore North
West Australia.
28 Civmec Limited Annual Report 2013
MINING
The successful completion of major site civil works at Rio Tinto mines contributed to the Mining Segment’s
continued solid performance in the 2013 financial year. The Marandoo and Hope Downs 4 projects involved
placing approximately 35,000m3 of concrete and 3,500 tonnes of steel reinforcement over a period of 24 months.
Civmec recognises further opportunities in supporting and upgrading existing mines as some miners seek to
increase capacity by improving output efficiencies in lieu of opening or expanding into new mines.
The company also successfully completed the supply of approximately 13,000 tonnes of fabricated and
modularised structures for BHP’s S$5.6 billion Port Facility. The quality of product earned high praise from the
client who described it as ‘industry leading’. This also lead to a follow on package of work that comprised 2,300
tonnes of fabricated and modularised structures for the project.
Another stand out project undertaken by the segment was for Metso. For this Civmec manufactured and delivered
the largest iron ore car dumper ever built in Australia. Following on from this the segment secured contracts for
two more tandem car dumpers.
The segment has also won new contracts for site civil and fabrication works in the gold mining region of
Kalgoorlie. The scope of works on the Mungari Gold contract includes detailed earth works and concrete works as
well as onsite tank and bin fabrication.
Other sectors including ports, energy, agriculture and water continue to provide infrastructure project
opportunities for the segment’s existing capabilities.
HOPE DOWNS 4
EXPANSION PROJECT
Location: Pilbara, Western
Australia
Civmec scope of works:
Since September 2011, Civmec
have been working with Rio
Tinto at the Hope Downs 4
mine site delivering major site
construction civil works to
sustain tonnage as the
company seeks to reach 360
Mt/a capacity in the Pilbara.
view online at www.civmec.com.au
29
view online at www.civmec.com.au GORGON DOWNSTREAM LNG PROJECT - BARROW ISLAND
Location: Barrow Island, Western Australia
Civmec scope of works:
Civmec was awarded the contract for the Shop Fabrication of
Structural Steel for the Gorgon Downstream LNG Project at Barrow
Island off the Northwest coast of Western Australia.
The project involves the construction and commissioning of a liquefied
natural gas plant, condensate handling facilities, carbon dioxide
injection facilities and various utilities and comprises 3 trains for which
Civmec is supplying over 11,000 tonnes of structural steel. Civmec
was also awarded the preassembly of modular frames in various
configurations and both carbon and stainless steel pipe supports.
We also delivered over 120,000 tonnes of precast concrete
components for the Gorgon Barrow Island LNG onshore process plant.
ASSET
MANAGEMENT
& INTEGRATED
SERVICES
The company expanded and
realigned its operational structure
to include the new Asset
Management and Integrated
Services Segment during the 2013
financial year.
The company has strategically
positioned the segment to take
advantage of Civmec’s core skills
and capabilities in meeting the
requirements of the mining sector’s
output efficiency focus. These
requirements include infrastructure
upgrades, major maintenance and
servicing work.
Shutdowns and capital
maintenance scheduling generated
by the oil and gas sector are also
a focus. With its extensive modern
waterfront facility in Henderson
and a large skilled workforce
that can be quickly mobilised,
the company is well positioned
to provide offsite fabrication and
other support for these activities.
While not a quick entry market
sector, the segment is evolving and
the outlook remains positive as the
new project management team
gains momentum.
New opportunities to service
customers have already been
identified, with scaffolding services
recently added to the segment’s
suite of capabilities. Continuing
contracts including the Brockman
projects for civil and maintenance
works are performing well.
30 Civmec Limited Annual Report 2013
SEGMENT REPORTS Strength Through Innovation
Civmec sustains its competitive advantages by driving and unlocking the
value of innovation, and developing strategic partnerships. The success of the
company’s projects demonstrate the benefits of continually nurturing a culture
of innovative thinking and continuous improvement. As the following examples
show, strength through innovation has delivered customised solutions and
ensured cost effective outcomes without compromising safety and quality.
• Accropodes II units for the Wheatstone LNG Project – innovative manufacturing methods enabled
Civmec to be price competitive against imports from lower cost countries, resulting in the first ever
contract for Australian made units.
• Tandem car dumpers for Metso – the completion of the design award winning tandem car dumper
for Rio Tinto was followed by the awarding of contracts for a further two tandem car dumpers.
• Precast concrete modules for Gorgon – the use of re-usable custom made formwork and application
of methodologies that improved safety, accuracy, and productivity were innovations that contributed
to the success of this contract for Leighton.
• Workshop innovation – continuous improvements in workflows and materials handling, use of
high-tech multi-purpose robotic tools, and automated beam and plate processing contribute to the
company’s highly efficient, high quality fabrication.
• Safety innovations – this has been the driving force behind our teams’ willingness and initiative to
introduce new safety methods across our projects. The high level of accountability and innovation
demonstrated by our team members allows us to deliver projects in a safer work environment, whilst
delivering positive project cost efficiencies, in many cases.
Civmec’s strength through innovation has delivered customised solutions and ensured cost effective
savings without compromising safety and quality.
view online at www.civmec.com.au
31
view online at www.civmec.com.au CORPORATE SOCIAL RESPONSIBILITY
Our People,
Our Community
& the Environment
SUPPORTING OUR COMMUNITY
Civmec acknowledges its position and responsibility in
the community and is committed to supporting various
charitable initiatives and community partnerships. During
the year, the company supported several recognised
initiatives for the personal development, health and well
being of individuals as well as the broader community.
THE DREAMFIT FOUNDATION
THE DAVID WIRRPANDA
FOUNDATION
By actively participating in a
charity fun run – “Cool Night
Classic” – Civmec and its
employees made a combined
effort in raising funds for this
organisation, which is focused on
improving the quality of life for
Civmec has introduced a unique employee safety incentive whereby
it donates the proceeds from savings attributable to the achievement
of specific safety performance targets to Dreamfit, a not-for-profit
organisation that uses innovative engineering to overcome challenges and
fulfil dreams of people with disabilities.
indigenous people.
INDIGENOUS
COMMUNITY
INVOLVEMENT
The company is committed to
improving indigenous employment,
cultural diversity training, work
readiness training and other
indigenous cultural and economic
awareness activities and engages
with indigenous consultants to
achieve sustainable benefits for
indigenous communities.
APPRENTICE OF THE
YEAR AWARD
Civmec sponsored the Master
Builders WA award for the
“Apprentice of the Year”. This
award acknowledges excellence of
training and skills in the building
and construction industry in
Western Australia.
32 Civmec Limited Annual Report 2013
OUR VALUES
SAFETY AND WELLBEING
ACCOUNTABILITY
TEAMWORK
INTEGRITY
POLITENESS AND COURTESY
OPENESS AND TRUST
“Our values drive us to
achieve our goals and are
what we aspire to see in
all our people”
EMPOWERING OUR PEOPLE
We believe that shared values are the foundations to
building a stronger and more united organisational culture.
We promote positive attitude, teamwork and client
focus. All our employees are dedicated to delivering the
company’s core values.
SAFE DAY GOOD DAY
The well being and safety of our employees is an utmost priority at
Civmec. Using a practical and effective safety management system,
and a strong safety culture, we are continually improving our safety
procedures in accordance with our high safety standards
Civmec is certified to AS4801 for its Occupational, Health and Safety
management systems.
TRAINING AND DEVELOPMENT
We recognise the importance of developing our people and providing
them with the right skills for today and for the future. We continue
to invest in the training and multi skilling of our people through our
traineeships, apprenticeships and course enrolments.
We encourage employees to be innovative and actively share ideas
in the workplace. We believe that each employee has a unique
contribution to make to the organisation.
EMPLOYEE ASSISTANCE PROGRAM (EAP)
Civmec has implemented an Employee Assistance Program (EAP)
to provide all employees with access to professional counselling and
assistance to help deal with work and life issues.
33
view online at www.civmec.com.au CORPORATE SOCIAL RESPONSIBILITY
INVESTORS IN THE ENVIRONMENT
Civmec proactively identifies the environmental aspects associated with
its business activities and implements measures to continually improve
its environmental performance. The company’s focus is on three dynamic
areas; its environmental plan, its commitment and its involvement.
34 Civmec Ltd Annual Report 2013
THE PLAN
THE COMMITMENT
An Environmental Management
Civmec is committed to achieving excellent environmental outcomes and
Plan lays the foundations
does so by providing visible leadership in promoting the highest practicable
for Civmec to manage all
standards. To achieve this commitment the organisation:
environmental requirements
and comply with the ISO 14001
standard for Environmental
Management Systems. It is
the essential link between the
assessment of the environmental
impacts and project activities.
• Reduces resource consumption and waste generation.
• Applies best practice standards for environmental management and
complies with all applicable laws, regulations and standards.
• Creates awareness and provides training and support to employees to help
them to work in an environmentally responsible manner.
• Conducts regular reviews to ensure compliance and continual improvement
THE INVOLVEMENT
Civmec participated in “Clean Up Australia Day Campaign” in September 2012.
It is a voluntary initiative where companies participate by collecting rubbish and
waste from the local environment. Civmec Employees volunteered to assist in the
clean-up area along Karijini drive to the Punurrunha Camp facility in the Pilbara.
view online at www.civmec.com.au
35
view online at www.civmec.com.au BOARD OF DIRECTORS
Patrick John Tallon
Chief Executive Officer
Mr Patrick John Tallon is the Chief Executive Officer and was appointed to our Board on 27 March 2012. Mr Tallon
is a founding member of the Group and has been with the company since its inception in July 2009. He has the
executive responsibility for the strategic decisions and policies of the company, including safety, setting a culture
of openness, team building, and the Group’s financial performance. He is also responsible for the implementation
of the company’s long and short term plans. Over the past 26 years Mr Tallon has accumulated significant
knowledge and experience in all aspects of the construction industry, whilst developing and refining his leadership
skills. His involvement in many major oil & gas, mining and infrastructure projects has provided him with a strong
understanding of the stakeholders’ requirements at all levels in those respective segments.
Chong Teck Sin
Lead Independent Director
Mr Chong Teck Sin is our Lead Independent Director and
was appointed to our Board on 27 March 2012. He was
formerly the Executive Director and Group Managing
Director (Commercial) of SGX-listed Seksun Corporation
Ltd (subsequently known as Enporis Greenz Limited after
the sale of its core business to a private equity in Oct 2007)
from 1999 to 2004, and thereafter, served as a non-executive
director on the boards of directors of companies and/
or entities. Mr Chong was also formerly an independent
director of Beyonics Technology Limited and ASX-listed
Blackgold International Holdings Limited and is currently
an independent director of AVIC International Maritime
Holdings Limited and InnoTek Limited. Mr Chong is also an
independent director of Changan Minsheng APLL Logistics
Co., Ltd, which is listed on the Stock Exchange of Hong Kong
Limited. Between April 2004 and March 2010, Mr Chong
was a board member of the Accounting and Corporate
Regulatory Authority (ACRA). Between October 2008
and July 2010, Mr Chong was also a board member of the
National Kidney Foundation. Mr Chong graduated with a
Bachelor of Engineering from the University of Tokyo in 1981
and a Masters of Business Administration from the National
University of Singapore in 1987.
36 Civmec Limited Annual Report 2013
Kevin James Deery
Chief Operating Officer
Mr Kevin James Deery is the Chief Operating
Officer and was appointed to our Board on 27
March 2012. He is responsible for the overall
operations of the Group, including setting the
groups budgets, management and development
of the Group’s operations as well as setting
safety and quality culture and compliance. He
is also charged with heading up the group’s
strategy for the improvement of productivity
and minimisation of waste. From 2001 to 2009,
Mr Deery held various positions including
Manager of Projects with AGC Industries Pty
Ltd where he managed SMP construction works
for major clients. Mr Deery has over 19 years
of experience in fabrication and construction
projects for the oil and gas and mining sectors.
Mr Deery holds a Bachelor of Engineering
(Mechanical) Degree from Curtin University.
James Finbarr Fitzgerald
Executive Chairman
Mr James Finbarr Fitzgerald is the Executive Chairman of the Group and was appointed to our Board on 27
March 2012. He is responsible for the corporate direction, development and performance of the Group. Mr
Fitzgerald is a founding member of the Group and has been with the company since its inception in July 2009.
With over 32 years experience he has gained extensive knowledge in the civil, structural, mechanical, piping
and insulation contracting sectors. Mr Fitzgerald founded Ausclad Industries (AGC) in 1988 where he was
responsible for the strategic direction, organisational performance and sustainable growth of the company
during his 20 year tenure. Mr Fitzgerald also has significant experience in the modularisation and installation of
structures for both offshore and onshore developments.
Wong Fook Choy Sunny
Independent Director
Mr Sunny Wong Fook Choy is an Independent
Director and was appointed to our Board on 27
March 2012. He is a practising advocate and solicitor
of the Supreme Court of Singapore. Mr 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 director of Albedo
Limited, Excelpoint Technology Ltd., Mencast
Holdings Ltd. and KTL Global Ltd. Mr Wong holds
a Bachelor of Law (Honours) from the National
University of Singapore.
Douglas Owen Chester
Independent Director
Mr Douglas Owen Chester was appointed to
our Board as an Independent Director on 2
November 2012. He was formally the Australian
High Commissioner to Singapore (2008-12). He
retired from the Australian public service in late
2012 after a 33 year career. Mr Chester held
senior positions in the Department of Foreign
Affairs and Trade and was Deputy Secretary
from 2003. In addition to Singapore, he served
in Washington and Brunei. He is an independent
director of Stamford Land Corporation
Limited. Mr Chester holds a Bachelor of
Science (Honours) from the Australian National
University. He is a member of the Singapore
Institute of Directors and a member of the
Australian Institute of Company Directors.
view online at www.civmec.com.au
37
EXECUTIVE TEAM
Civmec Executive Team
Giuseppe Carrabba
Chief Financial Officer
Mr Giuseppe Carrabba is our CFO. He joined our Group in July 2011 and is responsible for the financial
management of our Group. Mr Carrabba commenced his career in 1993 in public practice as an accountant.
In 1999, he was an accountant in Lycopodium Ltd, an Australian based engineering and project management
company. In 2002, Mr Carrabba joined PMP Print Ltd, a printing and distribution company listed on the Australian
Securities Exchange as a Commercial Manager. In 2007, he joined the Industrial Foundation for Accident
Prevention, an independent, not-for-profit, member based occupational health and safety training organisation
as Chief Financial Officer. Mr Carrabba holds a Bachelor of Business from Curtin University of Technology and is a
member of CPA Australia.
Adam Portaro
General Manager - Oil and Gas
Mr Adam Portaro is our General Manager of Oil & Gas. He joined our Group in April 2013 and is responsible for
the management of the Oil and Gas activities of our Group. Adam Portaro is an industry veteran with in-depth
contracting expertise. He most recently held executive construction management positions in public companies
Leighton Constructions (3 years) and prior to that an executive management position responsibile for heavy
engineering and construction with AusGroup, a position held for 12 Years.
Len Greenhalgh
General Manager - Asset Management and Integrated Services
Mr Lenard William Greenhalgh is our General Manager Asset Management and Integrated Services. He joined our
Group in March 2013 and is responsible for the management of the maintenance and integrated services activities
of our Group. Prior to joining our Group, he held a number of senior management roles WorleyParsons, QR
National Rail, Transfield and Alstom. The past 10 years was spent in various construction and project management
roles in the minerals, energy and infrastructure sectors. Mr Greenhalgh is an Associate of the Institution of
Engineers, Australia and a Graduate of the Society of Engineering Associates.
Terence Hemsworth
Support Services Manager
Mr Terence Hemsworth is our Support Services Manager. He joined our Group in 2010 and is responsible for the
management and coordination of our Support Services Department which encompasses the functions of human
resource management, recruitment, industrial relations, commercial, procurement, legal, risk and insurance and
business systems. Mr Hemsworth’s career spans more than 40 years in the construction and fabrication industry,
having worked on major projects for the oil and gas, mining, resource and infrastructure sectors in the United
Kingdom, South Africa, New Zealand, Australia, Singapore and Malaysia.
38 Civmec Limited Annual Report 2013
Rod Bowes
Proposals Manager
Mr Rodney John Bowes is our Proposals Manager. He joined our Group in 2010 and is responsible for the
management of our Estimating Department, the preparation of tenders and contract documentation, and the
negotiation of contracts. Prior to joining our Group, Mr Bowes was General Manager (marketing and proposals) at
Ausgroup Limited for eight years, where he was in charge of the management of the business development, and
the marketing and estimating departments.
Giusseppe Macri
Business Development Manager
Mr Giuseppe Macri is our Business Development Manager. He joined our Group in 2010 and is responsible for
identifying and targeting new business opportunities, preparing and submitting pre-qualification expressions of
interest documentation, and preparing prospect assessments and process evaluation for bidding tenders. Prior to
joining our Group, Mr Macri was the Business Development Manager of AGC Industries Pty Ltd (a wholly-owned
subsidiary of AusGroup Limited). Prior to joining AusGroup Limited, Mr Macri joined Transfield Construction Pty
Ltd in 1967, and was appointed General Manager of fabrication operations in Western Australia in 1974, a position
he held until 2002. Mr Macri brings to our Group approximately 47 years of experience in the heavy engineering
and construction industry.
Colin Swan
Finance Manager
Mr Colin Brown Swan is our Finance Manager. He joined our Group in 2009 and is responsible for the day-to-
day management of the financial operations of our Group. Prior to joining our Group, from 2008 to 2009, Mr
Swan was Finance Manager at Civmec Construction & Engineering Pty Ltd (then a subsidiary of VDM Group
Limited). From 2002 to 2006, Mr Swan was Financial Manager at Intervid International, where he was responsible
for implementing various systems for the management of accounting and financial operations. Mr Swan is an
associate of the Institute of Chartered Secretaries and Administrators (ICSA), a Member of the Institute of Public
Accountants, and holds a certificate in management from the Graduate Institute of Management and Technology.
39
view online at www.civmec.com.au CORPORATE GOVERNANCE
Corporate Governance
“Good governance
is a foundation of
our business and
The Board of Directors (the
The revised Code of Corporate
“Board”) and the Management of
Governance 2012 (the “2012 Code”)
Civmec Limited (the “Company”)
will take effect in respect of annual
together with its subsidiaries (the
reports of the Company for financial
“Group”), recognise the importance
years commencing on or after 1
of good corporate governance
November 2012.
is embedded in our
in ensuring greater transparency,
management culture.”
protecting the interests of
its shareholders, as well as
strengthening investors’ confidence
in its management and financial
reporting and are, accordingly,
committed to maintaining a high
standard of corporate governance
throughout the Group.
This Report describes the
Company’s corporate governance
practices that were in place during
the financial year ended 30 June
2013 (“FY2013”) with specific
reference to the Code of Corporate
Governance 2005 (“Code”). Where
there are deviations from the
Code, appropriate explanations
are provided.
40 Civmec Limited Annual Report 2013
BOARD’S CONDUCT OF AFFAIRS
Singapore Exchange Securities Trading Limited
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
(“SGX-ST”);
• Approving annual report and audited financial
statements;
• Monitoring management’s performance;
achieve this and the Management remains accountable
• Recommending share issuance, dividend
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
payments and other returns to shareholders;
• Ensuring accurate, adequate and timely reporting
to, and communication with Shareholders; and
• Assuming responsibility for corporate
governance.
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.
and directions. The Board is also responsible for
All the Board members are actively engaged and
implementing policies in relation to financial matters,
play an important role in ensuring good corporate
which include risk management and internal control
governance within the Company. Visits to the
and compliance. In addition, the Board reviews
Company’s business premises are also arranged
the financial performance of the Group, approves
to acquaint the non-executive Directors with the
investment proposals and sets values and standards for
Company’s operations, meet with senior staff and
the Company and the Group.
ensure that the Directors are familiar with the
The Board has delegated the day-to-day management
Company’s business, policies and governance practices.
of the Group to Management headed by the Executive
The profile of each Director is presented in the section
Chairman, Mr James Finbarr Fitzgerald, the Chief
headed “Board of Directors” of this Annual Report.
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
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, to familiarise
systems, compliance and financial reporting
them with the Company’s business activities, strategic
systems;
• Approving the annual budgets and business
plans;
• Approving any major investment or expenditure;
• Approving material acquisitions and disposal of
assets;
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”)
• Approving the Company’s periodic and full-
and Risks and Conflicts Committee (“RCC”).
year results announcements for release to the
41
view online at www.civmec.com.au CORPORATE GOVERNANCE
Corporate Governance (cont’d)
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 provides for Directors, where necessary, 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.
The number of Board and Board Committee meetings held and attended by each Board member during FY2013 is
set out below:-
Board Committees
Board
Audit
Remuneration
Nominating
Committee
Committee
Committee
Risks and
Conflicts
Committee
4
4
4
4
4
1
4
3
4
4*
4*
4*
4
1
4
3
4
No. of Meetings Attended
4*
4*
4*
4
1
4
3
4
4*
4*
4*
4
1
4
3
4
4*
4*
4*
4
1
4
3
No. of Meetings Held
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Chelva Retnam Rajah(1)
Wong Fook Choy Sunny
Douglas Owen Chester(2)
Notes:
* By invitation
(1) Mr Chelva Retnam Rajah retired from the office on 25 October 2012.
(2) Mr Douglas Owen Chester was appointed as Independent Non-Executive Director on 2 November 2012. He
was also appointed as Chairman of Nominating and a member of Audit, Remuneration and Risks and Conflicts
Committees on 2 November 2012.
42 Civmec Limited Annual Report 2013
BOARD’S COMPOSITION AND GUIDANCE
Principle 2:
CHAIRMAN AND CHIEF EXECUTIVE
OFFICER
Strong and independent element on the Board.
Principle 3:
The Board comprises six (6) Directors, three (3) of
Clear division of responsibilities at the top of the
whom are Executive Directors and the remaining
Company. Chairman and Chief Executive Officer to
three (3) Directors being Independent Directors. This
be separate persons to ensure appropriate balance of
composition exceeds the Code’s requirement of at
least one-third of the Board of Directors to comprise
power, increased accountability and greater capacity
of the Board for independent decision makings.
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. The profile of the Directors is set out on pages
36 and 37 of this Annual Report.
The Company has adopted the 2012 Code definition
of ‘Independent Director” and its guidance in respect
of relationships which would deem a Director to be
regarded as non-independent.
The independence of each Director is reviewed annually
by the NC in accordance to the Code’s definition of
independence. Each Director is required to declare his
independence by duly completing and submitting a
“Confirmation of Independence” form. The form, which
is drawn up based on the definitions and guidelines
set forth in Guideline 2.1 in the 2012 Code, requires
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”).
The two roles are separated whereby 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
each Director to assess whether he considers himself
of the Company.
independent despite not having any of the relationships
identified in the 2012 Code. The NC has reviewed
and determined that the Independent Directors are
BOARD MEMBERSHIP
independent. None of the Independent Directors has
Principle 4:
served on the Board beyond nine years from the date
of his first appointment.
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.
There should be a formal and transparent process for
the appointment of new Directors to the Board.
The Company had 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
Douglas Owen Chester, Mr Wong Fook Choy Sunny and
Mr Chong Teck Sin.
The NC is chaired by Mr Douglas Owen Chester, who is
not associated with any substantial shareholders of
the Company.
43
view online at www.civmec.com.au
CORPORATE GOVERNANCE
Corporate Governance (cont’d)
According to the written terms of reference of the NC,
• The NC makes recommendations to the Board
the NC performs the following functions:
for approval.
(a) nominate Directors (including Independent
Pursuant to the Articles of the Company, all the
Directors) taking into consideration each
Directors are required to retire from office at every
Director’s contribution, performance and ability
Annual General Meeting (“AGM”) of the Company.
to commit sufficient time and attention to
the affairs of the Group taking into account
the Directors’ respective commitments outside
our Group;
After due review, the Board has accepted the
recommendation of the NC and, accordingly, the below
named Directors will be offering themselves for re-
election:
(b) review and recommend to the Board the
composition of the Audit Committee,
Remuneration Committee and Risks and
Conflicts Committee;
(c) re-nominate Directors for re-election in
accordance with the Articles of Association at
each annual general meeting and having regard
1. Mr James Finbarr Fitzgerald
2. Mr Patrick John Tallon
3. Mr Kevin James Deery
4. Mr Chong Teck Sin
5. Mr Wong Fook Choy Sunny
to the director’s contribution and performance;
6. Mr Douglas Owen Chester
(d) determine annually whether or not a Director
For the year under review, the NC evaluated the Board’s
of the Company is independent;
performance as a whole and the contribution of each
(e) decide whether or not a Director is able to and
has been adequately carrying out his duties as
a Director; and
(f) assess the performance of the Board as a
whole and contribution of each Director to the
effectiveness of the Board.
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
Board, prepares a description of the role and
the essential and desirable competencies for a
particular appointment;
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
structures in the principal subsidiaries are already well
organised and constituted. The Board and Management
will from time to time renew the Board Structures of
the principal subsidiaries and will make an appropriate
corporate decision to consider the appointment of the
Independent Director into the principal subsidiaries.
The Company does not have a practice of appointing
•
If required, the NC may engage consultants to
alternate Directors.
undertake research on, or assess, candidates for
new positions on the Boards;
• The NC meets with short-listed candidates to
assess their suitability and to ensure that the
candidates are aware of the expectations; and
44 Civmec Limited Annual Report 2013
The date of 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
27 Mar 2012
25 Oct 2012
Patrick John Tallon
27 Mar 2012
25 Oct 2012
Kevin James Deery
27 Mar 2012
25 Oct 2012
Chong Teck Sin
27 Mar 2012
25 Oct 2012
-
-
-
AusGroup Limited
-
-
AVIC International
Maritime Holding Limited
JES International Holdings
Limited
Changan Minsheng APLL
Logistics Co., Ltd(2)
Wanxiang International
Limited
InnoTeck Limited
Wong Fook Choy Sunny
27 Mar 2012
25 Oct 2012
Mencast Holdings Ltd
KTL Global Ltd
Albedo Limited
Sihuan Pharmaceutical
Holdings Group Ltd
Beyonics Technology
Limited
Eastgate Technology Ltd
Blackgold International
Holdings Limited(3)
Global Testing Corporation
Limited
Advanced Integrated
Manufacturing Corp. Ltd.
Douglas Owen Chester(1)
2 Nov 2012
-
* Within the past 5 years
Excelpoint Technology
Ltd
Stamford Land
Corporation Ltd
-
Notes:
(1)
(2)
(3)
Mr Douglas Owen Chester was appointed as an Independent Non-Executive Director on 2 November 2012.
Listed on Hong Kong Stock Exchange
Listed on Australian Stock Exchange
45
view online at www.civmec.com.au CORPORATE GOVERNANCE
Corporate Governance (cont’d)
BOARD PERFORMANCE
Principle 5:
senior Management of the Company and the Company
Secretaries at all times. Requests for information are
dealt with promptly by Management. The Board is
Formal assessment of the effectiveness of the Board
informed of all material events and transactions as and
as a whole and the contribution by each Director to
when they occur. The Management consults Board
the effectiveness of the Board.
members as necessary and appropriate. Detailed
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 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.
Board. The Chairman of the Board may take actions
The Company Secretaries administer, attend and
as may be appropriate according to the results of
document all Board meetings, and assist the Chairman
the performance evaluation, which will be based on
in implementing appropriate Board procedures to
objective performance criteria proposed by the NC and
facilitate effective compliance with the Company’s
approved by the Board.
As the Company has been listed on the SGX-ST for less
than two (2) years, 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 adequate. 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.
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
segments 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
Each member of the NC shall abstain from voting on
render advice.
any resolutions and making any recommendations
and/or participating in any deliberations of the NC in
respect of the assessment of his performance or re-
REMUNERATION MATTERS
nomination as a Director.
Principle 7:
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
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-
46 Civmec Limited Annual Report 2013
Executive Directors namely Mr Wong Fook Choy Sunny,
Principle 8:
Mr Douglas Owen Chester and Mr Chong Teck Sin and
is chaired by Mr Wong Fook Choy Sunny.
Remuneration of Directors should be adequate but
not excessive. A significant proportion of executive
According to the written terms of reference of the RC,
Directors’ remuneration should be structured so as to
the functions of the RC are as follows:
link rewards to corporate and individual performance.
(a) recommend to the Board a framework of
In making its recommendations to the Board on the
remuneration for the Directors and key
level and mix of remuneration, the RC strives to be
management personnel;
competitive, linking rewards with performance. It takes
(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; and
(d) perform such other acts as may be required by
the Singapore Exchange Securities Trading
Limited 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 package. 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
Civmec Performance Share Plan (the “Share Plan”) (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 and
Share Plan. The Option Scheme and Share Plan were
established on 27 March 2012 and 25 October 2012
respectively and had a 10 year tenure commencing on
the establishment date.
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 and Share Plan, 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 admission to the Official List of the SGX-ST.
Upon the expiry of the initial period of three years,
the employment of each Executive Directors 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
its 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 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.
47
view online at www.civmec.com.au
CORPORATE GOVERNANCE
Corporate Governance (cont’d)
The remuneration of the Independent Directors is in the form of a fixed fee which is 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.
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 FY2013 are set out below:
Remuneration band and
Name of Director
Bonus
Salary
Directors’ Fees
S$500,000 to S$749,999
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Below S$250,000
Chong Teck Sin
Douglas Owen Chester(1)
Wong Fook Choy Sunny
Chelva Retnam Rajah(2)
87%
86%
89%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
100%
100%
100%
100%
Allowances
and Other
Benefits
13%
14%
11%
-
-
-
-
Total
100%
100%
100%
100%
100%
100%
100%
Note:
(1)
(2)
Mr Douglas Owen Chester was appointed as Independent and Non-Executive Director on 2 November 2012.
Mr Chelva Retnam Rajah retired from the office on 25 October 2012.
Remuneration band and Name of
Details of the remuneration of the Key Executives for FY2013 are set out below:
Key Executive
Designation
Salary
Bonus Allowances
and Other
Benefits
Total
S$500,000 to S$749,999
Trevor White(1)
S$250,000 to S$499,999
General Manager
(Operations)
86%
-
14%
100%
Terence Hemsworth
Support Services Manager
Giuseppe Macri
Rodney John Bowes
Colin Swan
Below S$250,000
Giuseppe Carrabba
Lenard Greenhalgh(2)
Business Development Manager
Proposals Manager
Finance Manager
Chief Financial Officer
General Manager (Asset
Management and Integrated
Services)
84%
83%
84%
80%
79%
91%
Adam Portaro(3)
General Manager (Oil and Gas)
87%
Note:
(1)
(2)
(3)
Mr Trevor White resigned from the company on 12 April 2013.
Mr Lenard Greenhalgh joined the company on 18 March 2013.
Mr Adam Portaro joined the company on 08 April 2013.
48 Civmec Limited Annual Report 2013
-
-
-
-
-
-
-
16%
17%
16%
20%
21%
9%
100%
100%
100%
100%
100%
100%
13%
100%
Apart from Thomas Tallon who holds the position
The AC is chaired by Mr Chong Teck Sin.
of “Supervisor - Construction” with a remuneration
exceeding S$150,000 for FY2013, being the brother of
Patrick Tallon the CEO, the Company does not have
any employees who are immediate family members of a
Director or the controlling shareholders during FY2013.
The Remuneration Committee is of the view that the
remuneration of Thomas Tallon is in line with the staff
remuneration guidelines and commensurate with his
job scope and level of responsibilities.
More details of each of the Share Plans can be found in
the “Report of the Directors” in the Financials section
of this Annual Report.
ACCOUNTABILITY AND AUDIT
Principle 10:
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) to assist the Board in discharging their
responsibility to safeguard the company’s
assets, maintain adequate accounting records,
and develop and maintain effective systems
of internal control with the overall objective
of ensuring that the management creates and
maintains an effective control environment in
the Group;
The Board should present a balanced and
(b) to provide a channel of communication
understandable assessment of the Company’s
between the Board, the management team
performance, position and prospects.
and the external auditors on matters relating
The Board is responsible for providing a balanced
to audit;
and understandable assessment of the Company’s
(c) to monitor management’s commitment to the
performance, position and prospects, to its
establishment and maintenance of a
shareholders, the public and regulators. The Board
satisfactory control environment and an
is accountable to its shareholders and is mindful
effective system of internal control (including
of its obligations to furnish timely information and
any arrangements for internal audit); and
to ensure full disclosure of material information to
its shareholders in compliance with the statutory
requirements and the Listing Manual.
(d) to monitor and review the scope and results
of external audit and its cost effectiveness and
the independence and objectivity of the
Price sensitive information will be publicly released
external auditors.
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 Independent Non-
Executive Directors namely Mr Chong Teck Sin, Mr
Douglas Owen Chester and Mr Wong Fook Choy Sunny.
In addition, the functions of the AC shall be as follows:
(a) 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;
(b) review with the internal auditors the internal
audit plans and their evaluation of the
adequacy of the internal control and
accounting system before submission of the
results of such review to the Board for
approval;
49
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CORPORATE GOVERNANCE
Corporate Governance (cont’d)
(c) 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;
(d) review the internal control and procedures and
ensure co-ordination between the external
auditors and the management, review the
assistance given by the 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 the management
where necessary);
(e) review and consider the appointment or re-
appointment of the external auditors and
matters relating to resignation or dismissal of
the auditors;
(f)
review interested person transactions (if any)
falling within the scope of Chapter 9 of the
Listing Manual;
(g) review the Group’s 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 the Board;
(h) review potential conflicts of interest, if any, and
to set out a framework to resolve or mitigate
such potential conflicts of interests;
(i) 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;
(j)
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 the management’s response thereto;
(k) 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;
(l)
review the effectiveness and adequacy of the
administrative, operating, internal accounting
and financial control procedures;
(m) review the findings of internal investigation
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;
(n) review the 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
reports or if the findings are material, to be
immediately announced via SGXNET;
(o) review arrangements by which the 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
(p) 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 authorise
investigations into any matters within its scope
of responsibility. The AC is authorised 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
50 Civmec Limited Annual Report 2013
meetings, and has been given reasonable resources to
enable the discharge of its functions.
As at the Report date, the AC has:
appropriate follow up actions.
To date there were no reports received through the
whistle-blowing mechanism.
(a) reviewed the scope of work of the external
Principle 12:
auditors;
(b) reviewed the audit plans and discuss the results
of the respective findings and their evaluation
of the Company’s system of internal accounting
controls;
(c) reviewed the interested person transactions of
the Company;
(d) met with the Company’s external auditors
without the presence of the management;
(e) reviewed the external auditors’ independence
and objectivity; and
(f)
reviewed the Company’s procedures for
detecting fraud and whistle-blowing matters
and to ensure that arrangements are in place
by which any employee, may in confidence,
raise concerns about improprieties in matters
of financial reporting, financial control, or any
other matters. A report is presented to the AC
on the quarterly basis whenever there is a
whistle-blowing issue.
The AC has reviewed the external auditors’ non-
audit services, and was of the opinion that there was
no non-audit services rendered that would affect
the independence 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 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.
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 were in place throughout the financial year
and up to the date of this report provide reasonable,
but not absolute, assurance against material financial
misstatements or losses. This 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. The Board is therefore of the view, with the
concurrence of the AC, that the system of internal
controls and risk management maintained by the Group
is adequate to safeguard shareholders’ investments and
the Group’s assets in the current business environment.
The Company has established a 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
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.
51
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CORPORATE GOVERNANCE
Corporate Governance (cont’d)
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
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;
Messrs Deloitte Touche Tohmatsu, which is independent
- annual reports prepared and issued to all
of the Company’s business activities. The internal
shareholders;
auditors conduct audit based on the standards set by
internationally recognised 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 AC in overseeing
and monitoring the implementation and improvements
required on internal control weaknesses identified.
- quarterly and annual financial statements containing a
summary of the financial information and affairs of the
Company for the period;
- notices of general meetings; and
- the Company’s website www.civmec.com.au provides
corporate information, announcements, press releases
and other information pertaining to the Company.
The Company does not practice selective disclosure as
all material and price-sensitive information is released
The role of the Internal Auditors is to support the AC
in ensuring that the Group maintains a sound system
through SGXNET.
of internal controls by monitoring and assessing
the effectiveness of key controls and procedures,
conducting in-depth audit of high risk areas and
undertaking investigations as directed by the AC.
Principle 15:
Companies should encourage greater shareholder
participation at AGMs, and allow shareholders the
opportunity to communicate their views on various
The Company has a Risks and Conflicts Committee
matters affecting the company.
which monitors and reviews the Company’s risk
management policy and procedures.
At the AGM, shareholders are given the opportunity
to voice their views and seek clarification on questions
The Company’s external auditors also conduct annual
regarding the Company. The Directors, Management and
reviews of the effectiveness of the Group’s material
the external auditors are normally available at the AGM to
internal controls for financial reporting in accordance
answer shareholders’ queries.
with the scope as laid out in their audit plans.
COMMUNICATION WITH
SHAREHOLDERS
Principle 14: Companies should engage in regular,
effective and fair communication with shareholders.
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
52 Civmec Limited Annual Report 2013
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
There were no material contracts of the Company and its subsidiaries, including loans, involving the interests of
any Director, the CEO or the controlling shareholders either still subsisting at the end of FY2013 or if not, then
subsisting entered into since the end of the previous financial year.
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 person transactions are conducted on an arm’s length basis and are
not prejudicial to the interests of the shareholders.
During FY2013, the Board has reviewed the transactions entered into with interested persons and disclosure of
interested person transactions is set out below:
Name of interested
person
Nature of transaction
Aggregate value of all
interested person transactions
during the financial year under
review (excluding transactions
less than $100,000 and
transactions conducted
under shareholders’ mandate
pursuant to Rule 920 of the
Listing Manual)
Aggregate value of
all interested person
transactions conducted
under shareholders’
mandate pursuant to Rule
920 of the Listing Manual
(excluding transactions
less than $100,000)
Ann Tallon and Tallon
Investment Trust(1)
Lease Agreement
S$159,000
-
Note:
(1) The lease agreement expired on 31 December 2012 and was not renewed.
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.
53
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CORPORATE GOVERNANCE
Corporate Governance (cont’d)
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.
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 2013, proceeds from the initial public offering on 13 April 2012 has been fully utilised in accordance
with the “use of proceeds and listing expenses” in the Company’s offer document dated 5 April 2012.
54 Civmec Limited Annual Report 2013
Corporate Registry
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 Wong Fook Choy Sunny (Independent Director)
Mr Douglas Owen Chester (Independent Director)
AUDIT COMMITTEE
Mr Chong Teck Sin (Chairman)
Mr Douglas Owen Chester
Mr Wong Fook Choy Sunny
REMUNERATION COMMITTEE
Mr Wong Fook Choy Sunny (Chairman)
Mr Douglas Owen Chester
Mr Chong Teck Sin
NOMINATING COMMITTEE
Mr Douglas Owen Chester (Chairman)
Mr Wong Fook Choy Sunny
Mr Chong Teck Sin
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
RISKS & CONFLICTS COMMITTEE
Partner in Charge: Mr Christopher Johnson
(Appointed since the financial year ended 30 June
Mr Chong Teck Sin (Chairman)
Mr Douglas Owen Chester
Mr Wong Fook Choy Sunny
2011)
PRINCIPAL BANKER
COMPANY SECRETARIES
St George Bank,
Ms Sin Chee Mei
Ms Ang Siew Koon
Level 2 Westralia Square, 167 St Georges Terrace
Perth WA 6000 Australia
CORPORATE WEBSITE
http://www.civmec.com.au
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FINANCIAL REPORTS
Contents to the Financial Reports
REPORT OF THE DIRECTORS
STATEMENT BY DIRECTORS
INDEPENDENT AUDITORS’ REPORT
CONSOLIDATED INCOME STATEMENT
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
57
64
65
67
68
69
71
72
74
56 Civmec Limited Annual Report 2013
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Report of the Directors
30 JUNE 2013
REPORT OF THE DIRECTORS
The directors present their report to the members together with the audited consolidated financial statements
of Civmec Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”) for the
financial year ended 30 June 2013 and the statement of financial position of the Company as at 30 June 2013.
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
Douglas Owen Chester
Executive Chairman
Chief Executive Officer
Chief Operating Officer
Independent Director
Independent Director
Independent Director (Appointed on 2 November 2012)
2
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” and “Performance Share Plan” on pages 58 and 61 respectively.
3
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:
Holdings registered in name
of director or nominee
Holdings in which a director is
deemed to have an interest
At
01.07.2012
At
30.06.2013
At
01.07.2012
At
30.06.2013
-
-
-
-
-
-
97,566,806
97,566,806
13,660,000
97,566,806
97,566,806
13,660,000
The Company
(No. of ordinary shares)
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
There was no change in any of the above-mentioned interests between the end of the financial year
and 21 July 2013.
1
57
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FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Report of the Directors (cont’d)
30 JUNE 2013
REPORT OF THE DIRECTORS
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 Teck Sin and Mr Douglas Owen Chester.
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) 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;
(b)
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
(c)
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
58 Civmec Limited Annual Report 2013
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Report of the Directors (cont’d)
30 JUNE 2013
REPORT OF THE DIRECTORS
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 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.
3
59
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FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Report of the Directors (cont’d)
30 JUNE 2013
REPORT OF THE DIRECTORS
5
Share Options (cont’d)
Civmec Employee Share Option Scheme (cont’d)
Principal terms of the Scheme (cont’d)
(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.
(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 Exercised
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, no options to take up unissued shares of the Company and its
subsidiaries were granted.
4
60 Civmec Limited Annual Report 2013
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Report of the Directors (cont’d)
REPORT OF THE DIRECTORS
30 JUNE 2013
6
Performance Share Plan
Civmec Performance Share Plan
The Civmec Performance Share Plan (the“CPSP”) for key management personnel and employees of
the Group was approved and adopted by shareholders at the Extraordinary General Meeting held on
25 October 2012.
The Remuneration Committee (the “RC”) administering the Scheme comprises directors, Mr Wong
Fook Choy Sunny (Chairman of the Committee), Mr Chong Teck Sin and Mr Douglas Owen Chester.
The CPSP 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 CPSP
(i)
Participants
Under the rules of the CPSP, employees including Executive Directors and Associated
Company Employees, who are not Controlling Shareholders or their associates, are eligible to
participate in the CPSP.
Persons who are Controlling Shareholders and their Associates shall be eligible to participate
in the Civmec Performance Share Plan if:
(a)
their participation in the CPSP, and;
(b)
the actual number and terms of the Awards to be granted to them have been approved
by independent Shareholders of the Company in separate resolutions for each such
person.
(ii)
Size of the CPSP
The aggregate number of new Shares in respect of which Awards may be granted on any date
under the CPSP, when added to (i) the aggregate number of Shares issued and issuable in
respect of options granted under the CESOS, and (ii) any other share schemes to be
implemented by the Company, shall not exceed 15% of the number of issued Shares on the
day immediately preceding the relevant Date of the Award (or such other limit as the SGX-ST
may determine from time to time).
5
61
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FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Report of the Directors (cont’d)
30 JUNE 2013
REPORT OF THE DIRECTORS
6
Performance Share Plan (cont’d)
Civmec Performance Share Plan (cont’d)
Principal terms of the CPSP (cont’d)
(iii)
Grant of Awards
Under the rules of the CPSP, there are no fixed periods for the grant of Awards. As such,
offers for the grant of Awards 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.
(iv)
Lapse of Awards
Special provisions in the rules of the CPSP deal with the lapse of Awards in circumstances
which include the termination of the participant’s employment in the Company, the
bankruptcy of the participant, a take-over of the Company and the winding-up of the
Company.
(v)
Release of Awards
After the end of each performance period, the RC will review the performance targets
specified in respect of the Award and if they have been satisfied, will release Awards to
Participants.
(vi)
Duration of the CPSP
The CPSP 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.
Awards Granted under the CPSP
During the financial year, no awards for shares of the Company and its subsidiaries were
granted.
6
62 Civmec Limited Annual Report 2013
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Report of the Directors (cont’d)
30 JUNE 2013
REPORT OF THE DIRECTORS
7
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
Douglas Owen Chester
Chairman
Member
Member
All members of the Audit Committee are non-executive directors. The Audit Committee performs the
functions specified by the Listing Manual of the Singapore Exchange Securities Trading Limited
(“SGX-ST”) and the Code of Corporate Governance.
The nature and extent of the functions performed by the Audit Committee are detailed in the
Corporate Governance Report set out in the Annual Report of the Company.
8
Independent Auditors
The independent auditors, Moore Stephens LLP, Public Accountants and Chartered Accountants, have
expressed their willingness to accept re-appointment.
On behalf of the Board of Directors
…………………………………
James Finbarr Fitzgerald
Chairman
.......................................……….
Patrick John Tallon
Director
Singapore
25 September 2013
7
63
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FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Statement by Directors
30 JUNE 2013
STATEMENT BY DIRECTORS
In the opinion of the directors,
(a)
the statement of financial position of the Company and the consolidated financial statements of the
Group as set out on pages 67 to 126 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 2013 and of the results of the business, changes
in equity and cash flows of the Group for the financial year then ended; and
(b)
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
Singapore
25 September 2013
8
64 Civmec Limited Annual Report 2013
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
Independent Auditors’ Report
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 67 to 126, which comprise the
consolidated statement of financial position of the Group and the statement of financial position of the
Company as at 30 June 2013, and the consolidated income statement, consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash
flows of the Group 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, (Cap. 50) (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 judgement, 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.
29
65
view online at www.civmec.com.au
FINANCIAL REPORTS
INDEPENDENT AUDITORS’ REPORT TO THE MEMBERS OF
Independent Auditors’ Report (cont’d)
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 2013 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
Chartered Accountants
Singapore
25 September 2013
30
66 Civmec Limited Annual Report 2013
CIVMEC LIMITED
(Incorporated in Singapore)
Consolidated Income Statement
for the year ended 30 June 2013
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2013
AND ITS SUBSIDIARIES
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
Profit attributable to:
Owners of the Company
Non-controlling interest
Note
Group
2013
S$’000
2012
S$’000
4
4
17
7
5
8
405,924
(335,977)
328,654
(267,860)
69,947
60,794
742
568
(21,512)
(1,605)
48,140
(12,091)
1,514
234
(17,866)
(1,483)
43,193
(12,883)
36,049
30,310
36,049
-
36,049
30,310
-
30,310
Earnings per share attributable to equity holders of the
Company (cents per share):
− Basic
− Diluted
9
9
7.20
7.20
6.05
6.05
The accompanying notes form an integral part of the consolidated financial statements.
31
67
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FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Consolidated Statement of Comprehensive
Income
for the year ended 30 June 2013
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2013
AND ITS SUBSIDIARIES
Profit for the year
36,049
30,310
Note
Group
2013
S$’000
2012
S$’000
Other comprehensive income:
Item that may be reclassified subsequently to profit or loss
Exchange differences on re-translation from functional
currency to presentation currency
Total comprehensive income for the year
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interest
(12,277)
185
23,772
30,495
23,772
-
23,772
30,495
-
30,495
The accompanying notes form an integral part of the consolidated financial statements.
68 Civmec Limited Annual Report 2013
32
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Statements of Financial Position
as at 30 June 2013
STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2013
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Non-current assets
Investment in joint venture
Investments in subsidiaries
Loans receivable
Property, plant and equipment
Intangible assets
Deferred tax assets
TOTAL ASSETS
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Borrowings
Payable to related parties
Provisions
Current tax liabilities
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
Note
Group
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
12
10
11
17
16
13
14
15
8
18
19
25
20
19
20
8
23,108
89,873
118
113,099
33,801
86,620
337
120,758
725
-
-
75,037
12
4,383
80,157
232
-
-
55,885
13
2,470
58,600
403
4,188
31
4,622
-
8,769
35,355
-
-
-
44,124
1,295
5,082
-
6,377
-
9,792
37,380
-
-
-
47,172
193,256
179,358
48,746
53,549
48,016
9,521
-
3,233
681
61,451
19,955
1,330
342
21,627
58,215
3,318
123
3,400
13,852
78,908
10,055
642
341
11,038
180
-
1,001
-
-
1,181
-
-
-
-
359
-
901
-
-
1,260
-
-
-
-
TOTAL LIABILITIES
83,078
89,946
1,181
1,260
32
69
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FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
Statements of Financial Position (cont’d)
as at 30 June 2013
STATEMENTS OF FINANCIAL POSITION
AS AT 30 JUNE 2013
(cont’d)
Capital and Reserves
Share capital
Other reserves
Retained earnings
Total equity attributable to the
Owners of the Company
Non-controlling interest
TOTAL EQUITY
TOTAL LIABILITIES AND
EQUITY
Note
21
22
Group
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
37,864
(1,798)
74,113
110,179
(1)
110,178
37,864
10,479
41,070
89,413
(1)
89,412
37,864
4,940
4,761
47,565
-
47,565
37,864
10,432
3,993
52,289
-
52,289
193,256
179,358
48,746
53,549
33
70 Civmec Limited Annual Report 2013
Consolidated Statement of Changes in Equity
for the year ended 30 June 2013
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2013
Group
Other reserves
Share
capital
S$’000
Merger
reserve
S$’000
Foreign
currency
translation
reserve
S$’000
Retained
earnings
S$’000
Balance as at 01 July 2012
Profit for the year
Other comprehensive loss for the year
Total comprehensive income for the year
Dividends paid
37,864
-
-
-
-
1,469
-
(12,277)
CIVMEC LIMITED
(12,277)
(Incorporated in Singapore)
-
9,010
-
-
-
-
41,070
36,049
-
36,049
(3,006)
Total
S$’000
89,413
36,049
(12,277)
23,772
(3,006)
Balance as at 30 June 2013
37,864
AND ITS SUBSIDIARIES
(10,808)
9,010
74,113
110,179
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2013
Non-
controlling
interest
S$’000
(1)
-
-
-
-
(1)
Total
S$’000
89,412
36,049
(12,277)
23,772
(3,006)
110,178
(cont’d)
Group
Balance as at 01 July 2011
Profit for the year
Other comprehensive income for the year
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 IPO
Costs directly attributable to IPO
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
242
-
34
-
-
1,284
-
185
185
10,760
30,310
-
30,310
-
(242)
-
-
-
-
-
-
-
-
-
-
21,296
30,310
185
30,495
125
18,677
20,400
(1,580)
(1)
-
-
-
-
-
-
-
21,295
30,310
185
30,495
125
18,677
20,400
(1,580)
Share
capital
S$’000
Merger
reserve
S$’000
-*
-
-
-
125
18,919
20,400
(1,580)
9,010
-
-
-
-
-
-
-
Balance as at 30 June 2012
37,864
9,010
-
1,469
41,070
89,413
(1)
89,412
*Less than S$1,000
35
71
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CIVMEC LIMITED
(Incorporated in Singapore)
FINANCIAL REPORTS
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Consolidated Statement of Cash Flows
for the year ended 30 June 2013
FOR THE YEAR ENDED 30 JUNE 2013
Note
Group
2013
S$’000
2012
S$’000
Cash Flows from Operating Activities
Profit before income tax
Adjustments for:
Depreciation of property, plant and equipment
Amortisation of management fee
Gain on disposal of property, plant and equipment
Share of profit in joint venture
Write-back of interest on convertible loans
Finance cost
Interest income
Exchange translation differences
Operating cash flow before working capital changes
Changes in working capital:
Increase in trade and other receivables
Decrease/(Increase) in other current assets
(Decrease)/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
14
4
17
4
7
4
48,140
5,169
-
(34)
(568)
-
1,605
(629)
(4,023)
49,660
(3,253)
219
(10,199)
521
36,948
629
(1,605)
(27,329)
8,643
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
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
14
102
(32,716)
(32,614)
333
(16,516)
(16,183)
36
72 Civmec Limited Annual Report 2013
CIVMEC LIMITED
(Incorporated in Singapore)
AND ITS SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
Consolidated Statement of Cash Flows (cont’d)
for the year ended 30 June 2013
(cont’d)
FOR THE YEAR ENDED 30 JUNE 2013
Note
28
Cash Flows from Financing Activities
Proceeds from issuance of shares
IPO expenses deducted from proceeds
Proceeds from borrowings
Repayment of borrowings
(Repayment to)/Advances from related parties
Dividends paid
Decrease/(Increase) in deposits pledged
Net cash generated by financing activities
Net (decrease)/increase 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
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
Group
2013
S$’000
2012
S$’000
-
-
31,759
(12,517)
(123)
(3,006)
993
17,106
(6,865)
(2,819)
32,792
23,108
23,108
-
23,108
20,525
(1,580)
9,355
(11,755)
105
-
(1,009)
15,641
25,602
570
6,620
32,792
33,801
(1,009)
32,792
37
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view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
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 2013 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 (Note 21).
74 Civmec Limited Annual Report 2013
38
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
1
General Information (cont’d)
(b)
Group Restructuring Exercise (cont’d)
(i)
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)
Cost of
investment
(A$)
% of equity
held by the
Company
7,578,683
100%
Principal
activities
Civil
construction
Structural
Mechanical
Process piping
(SMP)
Civmec Holdings Pty Ltd
30 June 2009
(Australia)
Asset holding
company
120
Ballymount Holdings Pty
Ltd
17 January 2005
(Australia)
Asset holding
company
2,288,930
Civmec Pipe Products Pty
Ltd
28 June 2010
(Australia)
Asset holding
company
835
100%
(held by
CCE)
100%
(held by
CCE)
83.5%
(held by
CCE)
39
75
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FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
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.
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.
76 Civmec Limited Annual Report 2013
40
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(a)
Basis of Preparation (cont’d)
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.
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 2013, the Group and the Company has adopted the
following new or revised FRS that are mandatory for application in the said year and which
are relevant to the Group as follows:
Amendments to FRS 1
Presentation of Items of Other Comprehensive Income
The amendments to FRS 1 changes the grouping of items presented in other comprehensive
income. Items that will be reclassified subsequently to profit and loss when specific
conditions are met would be presented separately from items that will not be reclassified
subsequently to profit or loss. As the amendments only affect the presentation of items that
are already recognised in other comprehensive income, there is no impact on the financial
position or performance of the Group upon adoption of these amendments.
(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 and 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 2013 onwards.
FRS 27 (Revised)
Separate Financial Statements
FRS 27 (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 position or financial
performance of the Group when implemented.
41
77
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FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
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 28 (Revised)
Investments in Associates and Joint Ventures
FRS 28 (Revised) changes in scope as a result of the issuance of FRS 111 Joint
Arrangements. It continues to prescribe the mechanics of equity accounting. The changes
are effective for accounting periods beginning on or after 1 January 2014, and will have no
impact on the financial position or financial performance of the Group when implemented.
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.
The standard 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.
It requires an investor to reassess the decision 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 has reassessed
which entities the Group controls and expects no change.
FRS 111
Joint Arrangements
FRS111 which is effective for annual periods beginning on or after 1 January 2014,
supersedes FRS 31 Interests in Joint Ventures Arrangements, eliminates the option of using
proportionate consolidation for a jointly controlled entity and FRS 31’s ‘jointly controlled
operations’ and ‘jointly controlled assets’ categories. These categories will fall into the
newly defined category ‘joint operation’. The adoption of this standard will have no impact
on the financial position or financial performance of the Group when implemented.
78 Civmec Limited Annual Report 2013
42
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
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 112
Disclosures of Interests in Other Entities
FRS 112 Disclosures 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; a schedule of the impact on the parent entity is required for changes
in the ownership interest in a subsidiary without a loss of control; details of any gain/loss
recognised on loss of control, and the line item of the income statement in which it is
recognised; year ends of subsidiaries, joint arrangements or associates if different from the
parent’s that are consolidated using different year ends and the reasons for using a different
date. As this is a disclosure standard, it will not have any impact on the financial position or
financial performance of the Group when implemented.
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 requires disclosures of a fair value hierarchy for all assets and
liabilities measured at fair value. This FRS is to be applied for annual periods beginning on
or after 1 January 2013. The Group is in the process of assessing the impact on the financial
statements. As for the disclosures, it will not have any impact on the financial position or
financial performance of the Group when implemented.
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view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
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)
Amendments to FRS 32
Offsetting of Financial Assets and Financial Liabilities
The amendments to FRS 32 clarify that an entity must currently have a legally enforceable
right of set off that is:
(a)
(b)
not contingent on a future event; and
legally enforceable in all of the following circumstances:
(i)
(ii)
(iii)
the normal course of business;
the event of default; and
the event of insolvency or bankruptcy of the entity and all of the
counterparties.
The amendment to FRS 32 is effective for annual periods beginning on or after 1 January
2014. The Group is in the process of assessing the impact on the financial statements.
Amendments to FRS 107
Disclosure of Offsetting of Financial Assets and
Financial Liabilities
Amendments to FRS 107 contain new disclosure requirements for financial assets and
financial liabilities that are offset in the statement of financial position or are subject to master
netting arrangements or similar agreements. Therefore, an entity needs to identify all financial
assets and financial liabilities that fall within the two categories mentioned. The amendments
explain that their scope includes financial assets and financial liabilities subject to similar
agreements that cover similar financial instruments and transactions. It is effective for annual
periods beginning on or after 1 January 2013. As this is a disclosure standard, it will not have
any impact on the financial position or financial performance of the Group when implemented.
(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.
80 Civmec Limited Annual Report 2013
44
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(c)
Basis of Consolidation (cont’d)
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 income statement, consolidated statement
of comprehensive income, consolidated statement of changes in equity and statements 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.
(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.
Rental income is recognised on a straight-line basis over the lease term as set out in specific rental
agreements.
Revenue from construction contracts is recognised in accordance with the Group’s accounting
policy on construction contract (see Note 2(g) Construction Contracts and Work in Progress below).
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 goods and services tax (“GST”).
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view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(e)
Income Tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current income tax are recognised at the amount expected to be paid to or recovered from the tax
authorities, using the tax rates and tax laws that have been enacted or substantively enacted by the
balance sheet date.
Deferred income tax are recognised for all temporary differences arising between the tax bases of
assets and liabilities and their carrying amounts in the financial statements except when the deferred
income tax arises from the initial recognition of goodwill or an asset or liability in a transaction that
is not a business combination and affects neither accounting nor taxable profit or loss at the time of
the transaction.
Deferred tax liabilities are recognised on all temporary differences except for taxable temporary
differences associated with investments in subsidiaries and joint venture, where the Group is able to
control the timing of the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, carry forward of unused
tax credits and unused tax losses, to the extent that it is probable that future taxable profit will be
available against which the deductible temporary differences, and the carry forward of unused tax
credits and unused tax losses can be utilised except where the deferred tax asset relating to the
deductible temporary difference arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss. In respect of deductible temporary differences associated
with investments in subsidiaries and interest in joint venture, deferred tax assets are recognised only
to the extent that it is probable that the temporary differences will reverse in the foreseeable future
and taxable profit will be available against which the temporary differences can be utilised.
Deferred tax assets and liabilities are measured:
(i)
(ii)
at the tax rates that are expected to apply when the related deferred tax asset is realised or
the deferred income tax liability is settled, based on tax rates and tax laws that have been
enacted or substantively enacted by the balance sheet date; and
based on the tax consequence that would follow from the manner in which the Group
expects, at the balance sheet date, to recover or settle the carrying amounts of its assets and
liabilities.
The carrying amount of deferred tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to
allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are
reassessed at the end of each reporting period and are recognised to the extent that it has become
probable that future taxable profit will allow the deferred tax asset to be recovered.
82 Civmec Limited Annual Report 2013
46
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(e)
Income Tax (cont’d)
Current income taxes are recognised in profit and loss except to the extent that the tax relates to
items recognised outside profit or loss, either in other comprehensive income or directly in equity.
Management periodically evaluates positions taken in the tax returns with respect to situations in
which applicable tax regulations are subject to interpretation and establishes provisions where
appropriate.
Deferred tax relating to items recognised outside profit and loss is recognised outside profit and loss.
Deferred tax items are recognised in correlation to the underlying transaction either in other
comprehensive income or directly in equity and deferred tax arising from a business combination is
adjusted against goodwill on acquisition.
Sales tax
Revenues, expenses and assets are recognised net of the amount of sales tax except:
- Where the sales tax incurred on a purchase of assets or services is not recoverable from the
taxation authority, in which case the sale tax is recognised as part of the cost of acquisition of
the asset or as part of the expense item as applicable; and
- Receivables and payables that are stated with the amount of sales tax included.
The net amount of sales tax recoverable from or payable to, the taxation authority is included as part
of receivables or payables in the statements of financial position.
(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$”).
The consolidated financial statements are presented in Singapore dollar (“SGD” or S$).
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view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(f)
Foreign Currency Translation (cont’d)
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.
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:
(cid:127)
(cid:127)
(cid:127)
Assets and liabilities for each statement of financial position presented are translated at the
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) are 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.
On the disposal of a foreign operation (i.e. a disposal of the Group’s entire interest in a foreign
operation, or a disposal involving loss of control over a subsidiary that includes a foreign operation
or loss of joint control over a jointly controlled entity that includes a foreign operation), all of the
accumulated exchange differences in respect of that operation attributable to the Group are
reclassified to profit or loss. Any exchange differences that have previously been attributed to non-
controlling interests are derecognised, but they are not reclassified to profit or loss.
84 Civmec Limited Annual Report 2013
48
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(g)
Construction Contracts and Work in Progress
When the outcome of a construction contract can be estimated reliably, contract revenue and
contract costs are recognised as revenue and expenses respectively by reference to the stage of
completion of the contract activity at the balance sheet date (“percentage-of-completion method”).
The outcome of a construction contract can be estimated reliably when:
i.
ii.
total contract revenue can be measured reliably;
it is probable that the economic benefits associated with the contract will flow to the
enterprise;
iii. both the contract cost to complete the contract and the stage of contract completion at the
balance sheet date can be measured reliably; and
iv. the contract costs attributable to the contract can be clearly identified and measured reliably
so that actual contract costs incurred can be compared with prior estimates.
When the outcome of a construction contract cannot be estimated reliably, contract revenue should
be recognised only to the extent of contract costs incurred that it is probable, will be recoverable and
contract costs should be recognised as an expenses in the period in which they are incurred.
When it is probable that total contract costs will exceed total contract revenue, the expected loss
should be recognised as an expense immediately.
Contract revenue comprises the initial amount of revenue agreed in the contract and variations in the
contract work and claims that can be measured reliably. A variation or a claim is recognised as
contract revenue when it is probable that the customer will approve the variation or negotiations
have reached an advanced stage such that it is probable that the customer will accept the claim.
The stage of completion is measured by reference to the proportion of contract costs incurred to date
to the estimated total contract costs for the contract. Costs incurred during the financial year in
connection with future activities on a contract are excluded from 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 balance sheet 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 balance sheet date, the aggregated costs incurred to date plus recognised profit (less
recognised loss) on each contract is compared against the progress billings. Where 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 costs incurred to date plus recognised profits (less recognised losses), the
balance is presented as due to customers on construction contracts within “trade and other payables”.
Progress billings for work performed but not yet paid by customers and retentions are included
within “trade and other receivables”. Amounts received before the related work is performed are
included within “trade and other payables”.
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view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(h)
Financial Assets
Classification
Financial assets are recognised on the statement of financial position when, and only when, the
Group becomes a party to the contractual provisions of the financial instrument. The classification
depends on the nature of the asset and the purpose for which the assets were acquired. Management
determines the classification of financial assets at initial recognition and re-evaluates this
designation at every reporting date.
Loans and receivables are non-derivatives financial assets with fixed or determinable payments that
are not quoted in an active market. They are presented as current assets, except those maturing later
than twelve months after the balance sheet date which are classified as non-current assets. Loans and
receivables are presented as “trade and other receivables” and “cash and cash equivalents” at the
balance sheet date.
Recognition and Derecognition
Regular way purchase and sales of financial assets are recognised on the trade-date – the date on
which the Group commits to purchase or sell the asset. Financial assets are derecognised when the
rights to receive cash flows from the financial assets have expired or have been transferred and the
Group has transferred substantially all risks and rewards of ownership.
On disposal of a financial asset, the difference between the net sale proceeds and its carrying amount
is recognised in profit or loss.
Initial and Subsequent Measurement
Loans and receivables are initially recognised at fair value plus transaction costs. Subsequent to
initial recognition, loans and receivables are measured at amortised cost using the effective interest
method, less impairment. Gains and losses are recognised in profit or loss when the loans and
receivables are derecognised or impaired, and through the amortisation process.
Impairment
The Group assesses at each balance sheet date whether there is objective evidence that a financial
asset or a group of financial assets is impaired and recognises an allowance for impairment when
such evidence exists.
Significant financial difficulties of the debtor, probability that the debtor will enter into bankruptcy,
and default or significant delay in payments are objective evidence that these financial assets are
impaired.
The carrying amount of these assets is reduced through the use of an impairment allowance account
which is calculated as the difference between the carrying amount and the present value of estimated
future cash flows discounted at the original effective interest rate. When the asset becomes
uncollectible, it is written off against the allowance account.
86 Civmec Limited Annual Report 2013
50
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(h)
Financial Assets (cont’d)
Impairment (cont’d)
The allowance for impairment loss account is reduced through profit or loss in a subsequent period
when the amount of impairment loss decreases and the related decrease can be objectively measured.
The carrying amount of the asset previously impaired is increased to the extent that the new carrying
amount does not exceed the amortised cost had no impairment been recognised in prior periods.
(i)
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.
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 leased 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.
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view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(j)
Property, Plant and Equipment (cont’d)
Depreciation (cont’d)
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.
(k)
Impairment of Non-Financial Assets
Non-financial assets are tested for impairment whenever there is any objective evidence or
indication that these assets may be impaired.
At the end of each reporting period, the Group reviews the carrying amounts of its non-financial
assets to determine whether there is any indication that those assets have suffered an impairment
loss. If any such indication exists, the recoverable amount of the asset is estimated in order to
determine the extent of the impairment loss (if any), on an individual asset.
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. Where a
reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to
individual cash-generating units, or otherwise they are allocated to the smallest group of cash-
generating units for which a reasonable and consistent allocation basis can be identified.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
88 Civmec Limited Annual Report 2013
52
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(k)
Impairment of Non-Financial Assets (cont’d)
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its
carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its
recoverable amount. The difference between the carrying amount and recoverable amount is
recognised as an impairment loss in profit or loss.
An assessment is made at each reporting date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased.
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-
generating unit) is increased to the revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that would have been determined
had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss.
(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. If it is no longer probable that an outflow of economic resources will
be required to settle the obligation, the provision is reversed. If the effect of the time value of money
is material, provisions are discounted using a current pre tax rate that reflects, where appropriate, the
risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as a finance cost.
(m)
Financial Liability 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.
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.
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view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
2
Significant Accounting Policies (cont’d)
(m)
Financial Liability and Equity Instruments Issued by the Group (cont’d)
Financial liabilities (cont’d)
After initial recognition, financial liabilities are subsequently measured at amortised cost using the
effective interest rate method. Gains and losses are recognised in profit and loss when the liabilities
are derecognised, and through amortisation process.
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.
90 Civmec Limited Annual Report 2013
54
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
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
the joint venture is accounted for in the consolidated financial statements using the equity method.
On disposal of investment in joint venture, the difference between the net disposal proceeds and the
carrying amount of the investment are recognised in profit or loss.
(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.
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view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
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)
(6)
(7)
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 or joint venture of the other entity (or an associate or joint
venture of a member of a group of which the other entity is a member);
both entities are join ventures of the same third party;
one entity is a joint venture of a third entity and the other entity is an associate of the
third entity;
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).
92 Civmec Limited Annual Report 2013
56
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
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 2013 was S$75,037,000 (2012: S$55,885,000) (Note 14). A 10% difference in the expected
useful lives of these assets from management’s estimate would result in an approximately
S$517,000 (2012: S$416,000) variance in the Group’s profit before tax.
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 Notes 10 and 18.
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$4,383,000 (2012: S$2,470,000).
57
93
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
3
Critical Accounting Judgements and Key Sources of Estimation Uncertainty (cont’d)
(b)
Critical Judgements in Applying the Group’s Accounting Policies
In the process of applying the Group’s accounting policies, management has made the following
judgement, apart from those involving estimations, which have a significant effect on the amounts
recognised in the financial statements:
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.
No impairment loss on trade and other receivables were recorded for the financial years ended 30
June 2013 and 2012.
The carrying value of the Group’s trade and other receivables as at 30 June 2013 and 2012 is
S$89,873,000 and S$86,620,000, 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 loss on property, plant and equipment were recorded for the financial years ended 30
June 2013 and 2012.
The carrying amount of property, plant and equipment at 30 June 2013 is S$75,037,000 (2012:
S$55,885,000).
94 Civmec Limited Annual Report 2013
58
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
3
Critical Accounting Judgements and Key Sources of Estimation Uncertainty (cont’d)
(b)
Critical Judgements in Applying the Group’s Accounting Policies (cont’d)
Impairment of investment in subsidiaries
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 years ended 30 June 2013 and 2012.
The carrying amount of the Company’s investment in subsidiaries as at 30 June 2013 is S$8,769,000
(2012: S$9,792,000).
4
Revenue and Other Income
Revenue
Construction contract revenue
Revenue from sales of goods
Revenue from the rendering of services
Other Income
Interest income on bank balances
Rental income
Gain on disposal of property, plant and equipment
Net foreign exchange gain
Write-back of interest on convertible loans
Group
2013
S$’000
2012
S$’000
404,988
902
34
405,924
328,016
631
7
328,654
629
79
34
-
-
742
618
-
78
9
809
1,514
59
95
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
5
Profit before Income Tax
Note
Group
2013
S$’000
2012
S$’000
The following items have been included in
arriving at profit before tax:
Included in cost of sales:
Direct materials
Employee benefits
Subcontract works
Manufacturing and other overheads
Workshop costs
Depreciation
Included in administrative expenses:
Amortisation of management fee
Audit fees:
Auditors of the Company
Other auditors
Non-audit fees paid to other auditors
Business development
Communications
Depreciation
Directors’ fees
Employee benefits
IPO expenses
Occupancy expenses
Office costs
Other administrative expenses
Other professional fees
Tax fees
Foreign exchange difference, net
6
Employee Benefits Expenses
Wages and salaries
Contributions to defined contribution plans
Other employee benefits
96 Civmec Limited Annual Report 2013
60
6
6
103,786
134,924
73,612
11,698
7,247
4,710
-
106
122
32
281
695
459
196
13,568
-
2,588
1,320
1,692
151
294
7
80,460
106,708
53,353
17,605
5,867
3,867
422
90
91
12
256
754
293
25
9,143
634
2,506
1,270
1,538
30
48
245
Group
2013
S$’000
2012
S$’000
146,875
990
627
148,492
114,775
722
354
115,851
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
7
Finance Costs
Bank bills
Finance leases
Premium funding
Other finance costs
8
Income Tax Expense
Current income tax – current year
Deferred income tax – current year
(Over)/Under-provision in respect of prior years
Group
2013
S$’000
2012
S$’000
372
1,121
95
17
1,605
354
1,084
45
-
1,483
Group
2013
S$’000
2012
S$’000
15,680
(2,347)
(1,242)
12,091
14,400
(1,573)
56
12,883
The Group’s tax on profit before income tax differs from the amount that would arise using the
Australian standard rate of income tax as follows:
Profit before income tax
Income tax at 30% (2012: 30%)
Add tax effect of:
Non-assessable items
Non-allowable items
(Over)/Under-provision respect of prior years
Group
2013
S$’000
2012
S$’000
48,140
43,193
14,442
12,958
(1,137)
28
(1,242)
12,091
(346)
215
56
12,883
Weighted average effective tax rates are as follows:
25.1%
29.8%
61
97
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
8
Income Tax Expense (cont’d)
The tax rate used for the 2013 and 2012 reconciliations above is the corporate tax rate of 30%
payable by corporate entities in Australia on taxable profits under the tax law in that jurisdiction.
The Group’s operations are located in Australia.
The following shows the details of the deferred tax liabilities and assets:
Property,
plant and
equipment
(tax
allowance/
impairment)
S$’000
Borrowing
costs
S$’000
Share of
profits in
joint
venture
S$’000
Prepayment
S$’000
Total
S$’000
Deferred tax liabilities:
Balance at 1 July 2011
Charged to profit or loss
Currency translation
Balance at 30 June 2012
259
16
(4)
271
2
(2)
-
-
Balance at 1 July 2012
Charged to profit or loss
Currency translation
Balance at 30 June 2013
271
CIVMEC LIMITED
(132)
(Incorporated in Singapore)
(16)
AND ITS SUBSIDIARIES
123
-
-
-
-
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
-
70
-
70
70
171
(23)
218
-
-
-
-
-
1
-
1
261
84
(4)
341
341
40
(39)
342
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
Unrealised
foreign
exchange
losses
S$’000
Contract in
progress
S$’000
Intangibles
S$’000
Total
S$’000
Deferred tax assets:
Balance at 1 July 2011
Credited to profit or loss
Currency translation
Balance at 30 June 2012
Balance at 1 July 2012
Credited to profit or loss
Currency translation
Balance at 30 June 2013
34
(33)
-
1
1
52
(5)
48
220
406
(5)
621
621
669
(125)
1,165
156
461
(5)
612
612
648
(123)
1,137
21
-
-
21
21
-
(2)
19
233
808
(8)
1,033
1,033
62
(114)
981
16
164
(1)
179
179
307
(46)
440
-
1
-
1
1
11
(1)
11
152
(150)
(1)
1
1
-
-
1
-
-
-
-
-
620
(56)
564
-
-
-
-
-
18
(2)
16
1
-
-
1
1
-
-
1
833
1,657
(20)
2,470
2,470
2,387
(474)
4,383
98 Civmec Limited Annual Report 2013
63
62
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
8
Income Tax Expense (cont’d)
Unrecognised temporary differences relating to investments in subsidiaries
At the end of the reporting period, no deferred tax liability (2012: Nil) has been recognised for taxes
that would be payable on the undistributed earnings of certain of the Group’s subsidiaries as the
Group has determined that undistributed earnings of its subsidiaries will not be distributed in the
foreseeable future.
Such temporary differences for which no deferred tax liability has been recognised aggregate to
S$797,959 (2012: S$891,058). The deferred tax liability is estimated to be S$239,388 (2012:
S$267,317).
Tax consequences of proposed dividends
There are no income tax consequences (2012: Nil) attached to the dividends to the shareholders
proposed by the Company but not recognised as a liability in the financial statements (Note 28 (b)).
9
Earnings per Share
Basic earnings per share is calculated by dividing the Group’s net profit attributable to ordinary
equity holders for the financial year by the weighted average number of ordinary shares issued.
Group
2013
2012
Profit attributable to the owners of the Company (S$’000)
36,049
30,310
Weighted average number of ordinary shares issued
501,000,000 501,000,000*
Basic and diluted earnings per share (cents)
7.20
6.05
* Assumed to be issue throughout the entire financial year presented
Diluted earnings per share is 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.
64
99
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
10
Trade and Other Receivables
Current:
Trade receivables
- Third party
- Retention on
construction claims
Amount due from
customers for
contracts in progress
Receivables from
subsidiaries
Receivables from joint
venture
Dividends receivable
Other receivables
Total current trade and
other receivables
Note
Group
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
54,959
55,236
14,914
69,873
4,300
59,536
(a)
19,091
26,238
-
-
-
-
-
-
-
-
-
651
-
258
-
727
-
119
4,188
-
-
-
2,076
-
3,006
-
89,873
86,620
4,188
5,082
(a) Contracts in progress:
Contract costs incurred
Recognised profits
Less: Progress billings
Currency translation
Amount due from
customers for
construction contracts
Presented as:
Due from customers
Due to customers
18
331,456
73,532
404,988
(392,063)
(1,170)
267,860
60,785
328,645
(302,262)
(145)
11,755
26,238
19,091
(7,336)
11,755
26,238
-
26,238
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
Other Current Assets
Group
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
Prepayments
118
337
31
-
100 Civmec Limited Annual Report 2013
65
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
12
Cash and Cash Equivalents
Group
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
Cash at bank and in hand
Short-term bank deposits
23,108
-
23,108
32,792
1,009
33,801
403
-
403
1,295
-
1,295
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
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
23,108
33,801
-
23,108
(1,009)
32,792
403
-
403
1,295
-
1,295
The effective interest rate on short-term bank deposits was 4.12% per annum in the previous
financial year. These deposits matured and were released on 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
Balance at the beginning of the year
Loans granted during the year
Currency translation
Balance at the end of the year
Company
2013
S$’000
2012
S$’000
37,380
-
(2,025)
19,638
18,000
(258)
35,355
37,380
The loans granted to a subsidiary are unsecured and interest bearing at 6% per annum (2012: 6%).
Interest income recognised for the year amounted to S$2,231,464 (2012: S$1,351,798).
The repayment terms are reviewed at the end of each financial year. As at 30 June 2013, there were
no loans which are required to be repaid within the next twelve months.
66
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view online at www.civmec.com.au
FINANCIAL REPORTS
Notes to the Financial Statements (cont’d)
30 June 2013
14
Property, Plant and Equipment
Land
S$’000
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
2013
Cost
At 01 July 2012
Additions
Disposals
Currency translation
At 30 June 2013
-
22,461
27,581
6,737
19,403
-
(610)
6,127
(26)
(4,101)
37,737
6,187
(119)
(3,431)
30,218
Accumulated depreciation
At 01 July 2012
Depreciation for the year
Disposals
Currency translation
At 30 June 2013
-
-
-
-
-
(908)
(735)
26
159
(3,913)
(2,925)
80
668
1,290
4,739
62,535
2,609
1,599
(9)
(417)
3,782
(458)
(499)
8
92
3,547
1,262
(32)
(482)
4,295
(958)
(587)
30
150
308
296
-
(59)
545
(48)
(75)
-
12
166
(42)
(146)
1,268
(365)
(348)
16
68
(2,934)
-
(230)
1,575
32,716
(228)
(9,476)
85,547
-
(6,650)
-
-
-
-
(5,169)
160
1,149
(10,510)
(1,458)
(6,090)
(857)
(1,365)
(111)
(629)
Net carrying amount
At 30 June 2013
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
6,127
36,279
24,128
2,925
2,930
434
639
1,575
75,037
-
-
-
-
-
-
-
-
-
-
-
-
-
21,932
824
-
(295)
16,108
12,278
(525)
(280)
811
1,918
(98)
(22)
2,381
1,213
(9)
(38)
22,461
27,581
2,609
3,547
138
172
-
(2)
308
481
820
-
(11)
5,516
(709)
-
(68)
47,367
16,516
(632)
(716)
1,290
4,739
62,535
(156)
(761)
(2,016)
(2,211)
(132)
(420)
(501)
(475)
(8)
(40)
(115)
(253)
4
-
5
(4)
278
40
-
90
4
-
9
9
-
-
-
-
-
3
(908)
(3,913)
(458)
(958)
(48)
(365)
-
-
-
-
-
-
(2,928)
(4,160)
-
377
61
(6,650)
21,553
23,668
2,151
2,589
260
925
4,739
55,885
102 Civmec Limited Annual Report 2013
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
CIVMEC LIMITED
(Incorporated in Singapore)
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
14
Property, Plant and Equipment (cont’d)
(a) As at the balance sheet date, the net book value of property, plant and equipment that were
under finance leases was S$19,127,229 (2012: S$14,384,043).
(b) The carrying amount of property, plant and equipment that are pledged for security are as
follows:
Property, plant and equipment Borrowings
Leasehold building
Leased plant and equipment
Remaining property, plant and
equipment
Bank bill, Escrow and
Multi-option facility
Finance lease
Floating charge on Multi-
option facility
Refer to Note 19 for further information on Borrowings.
15
Intangible Assets
Goodwill
Group
2013
S$’000
2012
S$’000
36,279
21,554
19,127
14,384
19,631
75,037
19,947
55,885
Group
2013
S$’000
2012
S$’000
12
13
Goodwill arose from the excess of the consideration paid for a business acquired from a third party.
Goodwill has been allocated to the cash-generating unit, Mining and Others division.
Management is of the opinion that the recoverable amount will exceed the carrying amount on the
basis that this cash generating unit has been generating profit since acquisition and management
forecasts the results of this subsidiary to be in a net profit position for the financial year ending
30 June 2014. In arriving at this assessment, management has determined the recoverable amount
using a two year forecasting process based on the current order book, projected orders and a
consumer price index (“CPI”) factor of 1.2% per annum on direct costs and overhead costs.
69
103
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
15
Intangible Assets (cont’d)
Movement in goodwill during the year is follows:
Balance at the beginning of the year
Currency translation
Balance at the end of the year
16
Investment in Subsidiaries
At cost:
Balance at the beginning of the year
Issuance of shares for acquisition of subsidiaries
Currency translation
Balance at the end of the year
Details of the Company’s subsidiaries at 30 June 2013 are as follows:
Group
2013
S$’000
2012
S$’000
13
(1)
12
13
-
13
Company
2013
S$’000
2012
S$’000
9,792
-
(1,023)
8,769
-
9,010
782
9,792
Date and
place of
incorporation
and principal
place of
business
Name of subsidiaries
Held by the Company
Civmec Construction
& Engineering Pty
Ltd*
22 June 2009
(Australia)
Principal
activities
Cost of
investment
2013
$$’000
2012
$$’000
% of equity
held by the Group
2012
2013
%
%
8,769
9,792
100
100
Civil
construction
Structural
Mechanical
Process
piping (SMP)
104 Civmec Limited Annual Report 2013
70
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
16
Investment in Subsidiaries (cont’d)
Name of subsidiaries
Held by Civmec Construction
&Engineering Pty Ltd
Civmec Holdings Pty Ltd*
Date and place of
incorporation and
principal place of
business
Principal
activities
% of equity
held by the Group
2012
2013
%
%
30 June 2009
(Australia)
Asset holding
company
100
100
Ballymount Holdings Pty Ltd*
17 January 2005
(Australia)
Asset holding
company
100
100
Civmec Pipe Products Pty Ltd*
28 June 2010
(Australia)
Asset holding
company
83.5
83.5
*Audited by Moore Stephens Pty Ltd, Perth, Australia
17
Investment in Joint Venture
The joint venture of the Group as at the balance sheet date is set out below:
Name of entity
Held by Civmec Construction
&Engineering Pty Ltd
Cape Civmec Insulation Group Pty Ltd*
Date and place of
incorporation and
principal place of
business
Principal
activities
% of equity
held by the Company
2013
%
2012
%
16 September 2011
(Australia)
Insulation
50
50
*Audited by Moore Stephens Pty Ltd, Perth, Australia
71
105
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
17
Investment in Joint Venture (cont’d)
The cost of investment in the joint venture was S$1. The roll forward analysis of the Group’s
investment in the joint venture is as follows:
Balance at the beginning of the year
Share of profit in the joint venture
Currency translation
Balance at the end of the year
Group
2013
S$’000
2012
S$’000
232
568
(75)
725
-
234
(2)
232
The following is the financial information for Cape Civmec Insulation Group Pty Ltd:
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Revenue
Cost of sales
Expenses
Group
2013
S$’000
2012
S$’000
4,243
1,163
2,905
1,176
9,043
6,977
929
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 2013 is S$568,000 (2012:
S$234,000).
106 Civmec Limited Annual Report 2013
72
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
18
Trade and Other Payables
Trade creditors
Sundry payables and
accrued expenses:
Accrued expenses
Amount due to
customers for
contracts in progress
Goods and services tax
payable
Other taxes payable
Other payables
Note
Group
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
23,399
29,161
-
-
12,393
25,078
121
359
10
7,336
3,197
1,632
59
48,016
-
2,564
1,412
-
58,215
-
-
-
59
180
-
-
-
-
359
Trade and other payables are usually paid within 45 days.
19
Borrowings
Current:
Finance lease liabilities
- secured
Bank bills - secured
Non-current:
Finance lease liabilities
- secured
Bank bills - secured
Note
19(a)
19(b)
19(a)
19(b)
Group
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
5,434
4,087
9,521
3,318
-
3,318
12,185
7,770
19,955
10,055
-
10,055
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total Borrowings
29,476
13,373
73
107
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
19
Borrowings (cont’d)
(a)
Finance lease liabilities
The Group (the lessee) leases motor vehicles, workshop equipment and office fitout from non-
related parties under finance leases. The Group will obtain the ownership of the leased assets from
the lessor at no extra cost at the end of the lease term. The average lease term is between 4 and 5
years at interest rates ranging from 5.23% to 9.59% per annum (2012: 6.49% to 9.56%).
The finance lease liabilities are secured by the underlying leased assets:
Property, plant and equipment (Note 14)
19,127
14,384
The present values of finance lease liabilities are analysed as follows:
Group
2013
S$’000
2012
S$’000
Minimum
lease
payments
S$’000
Future
finance
charges
S$’000
6,478
13,277
19,755
4,272
11,251
15,523
(1,044)
(1,092)
(2,136)
(954)
(1,196)
(2,150)
Net present
value of
minimum
lease
payments
S$’000
5,434
12,185
17,619
3,318
10,055
13,373
2013
Less than one year
Between one and five years
2012
Less than one year
Between one and five years
108 Civmec Limited Annual Report 2013
74
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
19
Borrowings (cont’d)
(b)
Bank bills
Banking covenants
The Group is required by the banks to maintain certain financial ratios such as loan value ratio and
interest cover ratio. As at 30 June 2013, the Group did meet all of these financial covenants.
As at 30 June 2013, the Group has a commercial bank facility amounting to S$21,306,644 which
was utilised at 56% (2012: Nil). Interest rates are variable and ranged between 4.40% to 6.54% per
annum during the financial year ended 30 June 2013 (2012: ranged between 7.11% to 7.52%).
Repayment of the bank bill facilities is on an interest only basis of which 34% is repayable within
the next 12 month and 66% is repayable on 14 June 2016 where the terms of the bank bill will then
be renegotiated.
(c)
Other financing facilities available
The Group has a Multi Option Facility available for a limit of A$10,030,000 (approximately
S$11,604,710) (2012: A$10,030,000 (approximately S$12,958,660)). This is secured by:
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
first registered real property mortgage by Civmec Holdings Pty Ltd over the leasehold
interest in the Commercial property located at 16 Nautical Drive, Henderson WA 6166.
first registered fixed and floating charge over the assets and undertaking of Civmec
Holdings Pty Ltd.
unlimited guarantee and indemnity given by Civmec Holdings Pty Ltd.
consent to Mortgage of Lease over Commercial property located at Lot 804 (16) Nautical
Drive, Henderson WA 6166 given by Western Australian Land Authority.
unlimited guarantee and indemnity given by the Company.
75
109
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
20
Provisions
Current
Provision for employee benefits
Non-current
Provision for employee benefits
(a)
Movements in provisions are as follows:
Current
Opening balance at the beginning of year
Provisions made during the year
- included in employee benefits (Note 6)
Provisions utilised during the year
Currency translation
Closing balance at the end of year
Non-current
Opening balance at the beginning of year
Provisions made during the year
- included in employee benefits (Note 6)
Provisions utilised during the year
Currency translation
Closing balance at the end of year
Group
2013
S$’000
2012
S$’000
3,233
3,400
1,330
4,563
642
4,042
Group
2013
S$’000
2012
S$’000
3,400
621
10,069
(9,862)
(374)
3,233
642
830
-
(142)
1,330
10,263
(7,459)
(25)
3,400
211
1,825
(1,389)
(5)
642
Provisions pertain to employee benefits relating to long service leave for employees. In calculating
the present value of future cash flows in respect of long service leave, the probability of long service
leave being taken is based upon historical data and the discount rate used range from 2.76% to
3.30%.
110 Civmec Limited Annual Report 2013
76
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
21
Share Capital
At the beginning of the year
Issuance of shares
Share swap
Share conversion
Issuance of shares pursuant to the IPO
IPO expenses debited to equity
At the end of the year
Number of
shares
501,000,000
-
-
-
-
-
501,000,000
Issued and fully paid
Number of
shares
2013
S$’000
1
37,864
-
12,499,999
- 323,938,000
- 113,562,000
51,000,000
-
-
-
37,864 501,000,000
2012
S$’000
-
125
-
18,919
20,400
(1,580)
37,864
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 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).
On 11 June 2010 and 15 December 2010, 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) 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. This conversion
occurred on 27 March 2012.
On 13 April 2012, the Company was listed on the SGX-Mainboard. The Company issued
51,000,000 new shares valued at S$0.40 for each offer share.
Share Options
The Civmec Limited Employee Share Option Scheme (the “CESOS”) for key management
personnel and employees of the Group formed part of the Civmec Limited prospectus dated 5 April
2012.
Under the rules of the Scheme, executive and non-executive directors (including independent
directors) and employees of the Company, who are not Controlling Shareholders or their associates,
are eligible to participate in the Scheme.
77
111
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
21
Share Capital (cont’d)
Share Options (cont’d)
There are no fixed periods for the grant of options. As such, offers for the grant of options may be
made at any time, from time to time at the discretion of the Committee.
In addition, in the event that an announcement on any matter of an exceptional nature involving
unpublished price sensitive information is imminent, offers may only be made after the second
market day from the date on which the aforesaid announcement is made.
Particulars of the CESOS are set out under “Share Options” of this Directors’ Report.
The Scheme shall continue in operation for a maximum duration of ten years and may be continued
for any further period thereafter with the approval of the shareholders by ordinary resolution in
general meeting and of any relevant authorities which may then be required.
During the current financial year, there were no shares of the Company or its subsidiaries issued by
virtue of the exercise of options to take up unissued shares (2012: Nil).
22
Other Reserves
Foreign currency
translation reserve
Merger reserve
Group
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
(10,808)
9,010
(1,798)
1,469
9,010
10,479
(4,070)
9,010
4,940
1,422
9,010
10,432
(a)
Foreign currency translation reserve
Exchange differences relating to the translation of the net assets of the Group’s foreign operations
from their functional currency to the Group’s presentation currency (i.e., S$) 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 reserve is
shown in the consolidated statement of changes in equity.
(b)
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”.
112 Civmec Limited Annual Report 2013
78
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
23
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
The Group has two commercial operating leases:
Group
2013
S$’000
2012
S$’000
2,187
9,014
53,435
64,636
1,540
7,369
62,037
70,946
(cid:127)
(cid:127)
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 as per the CPI Index.
The Darwin property lease at 56 Pruen Road, Northern Territory is for a 3-year period from
July 2013 with an option to renew for a further 3 years. Rent increases as 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
Capital projects
Not later than 12 months
Group
2013
S$’000
2012
S$’000
8,195
344
8,539
2,232
18,194
20,426
8,539
20,426
79
113
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
24
Guarantees
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.
As at 30 June 2013, the Group has provided the following:
Bank guarantee
Surety bond facility
Letter of credit
Group
2013
S$’000
2012
S$’000
1,289
30,687
61
32,037
469
21,706
388
22,563
The surety bond facility is provided for the provision of performance bonds to customers of the
Group. It has a limit of A$40 million (equivalent to S$46.28 million) as at 30 June 2013 (2012:
A$30 million: S$39 million).
25
Related Party Transactions
The Group’s main related parties are as follows:
Entities Exercising Control over the Group
The largest shareholders are James Finbarr Fitzgerald and Olive Theresa Fitzgerald (acting as
trustees for the JF & OT Fitzgerald Family Trust) (19.47%) and Goldfirm Pty Ltd (acting as trustee
for the Kariong Investment Trust) (19.47%).
114 Civmec Limited Annual Report 2013
80
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
25
Related Party Transactions (cont’d)
Key Management Personnel
Any person having authority and responsibility for planning, directing and controlling the activities
of the entity, directly or indirectly, including any director (whether executive or otherwise) of that
entity is considered key management personnel.
Remuneration paid to key management personnel is as follows:
Directors’ remuneration
- Salaries and other related costs
- Directors’ fees
- Post-employment benefits
Key management personnel
- Salaries and other related costs
- Post-employment benefits
Other Related Parties
Group
2013
S$’000
2012
S$’000
1,945
174
143
2,488
199
4,949
959
25
77
1,840
142
3,043
Other related parties include immediate family members of key management personnel and entities
that are controlled or significantly influenced by those key management personnel, individually or
collectively with their immediate family members.
Transactions with Related Parties
Transactions between related parties are on normal commercial terms and conditions no more
favourable than those available to other parties unless otherwise stated.
81
115
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
25
Related Party Transactions (cont’d)
Transactions with Related Parties (cont’d)
The following transactions occurred with related parties:
Group
2013
S$’000
2012
S$’000
(a)
Purchases of goods and services
Other Related Parties:
(cid:127) Rental paid to a related party (who is a spouse of
one of the directors)
(cid:127) Consultant fee paid to a related party (who is a
shareholder of the Company)
(159)
(257)
(20)
-
(b) Borrowings
Other Related Parties:
(cid:127)
(Repayment to)/Advances from related parties
(123)
105
The advances from related parties are non-trade in nature, interest-free and are now fully repaid
during the financial year.
26
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:
(cid:127)
(cid:127)
(cid:127)
(cid:127)
(cid:127)
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
116 Civmec Limited Annual Report 2013
82
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
26
Financial Information by Segments (cont’d)
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.
(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. For the year
ended 30 June 2013, the Group supplies to a single external customer in Mining & Others segment
who accounts for 35% of external revenue (2012: 45%). The next most significant client accounts
for 22% and 20% (2012: 20% and 18% respectively) of external revenue.
83
117
view online at www.civmec.com.au
FINANCIAL REPORTS
Notes to the Financial Statements (cont’d)
30 June 2013
26
Financial Information by Segments (cont’d)
2013
Mining and
Others
S$’000
Oil and Gas
S$’000
Total
S$’000
Oil and Gas
S$’000
2012
Mining and
Others
S$’000
Total
S$’000
143,634
262,290
405,924
79,225
249,429
328,654
(115,378)
(2,186)
(215,889)
(2,524)
(331,267)
(4,710)
(55,543)
(1,755)
(208,450)
(2,112)
(263,993)
(3,867)
26,070
43,877
568
-
69,947
(21,512)
742
568
(1,605)
48,140
(12,091)
36,049
21,927
38,867
234
-
60,794
(17,866)
1,514
234
(1,483)
43,193
(12,883)
30,310
-
12
12
-
13
13
188,743
118
4,383
193,256
48,016
29,476
681
342
4,563
83,078
32,716
176,538
337
2,470
179,358
58,338
13,373
13,852
341
4,042
89,946
16,516
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
Segment liabilities:
Unallocated liabilities:
Liabilities
Borrowings
Current income tax liabilities
Deferred tax liabilities
Provisions
Total liabilities
Other segment information
Capital expenditures during the year
118 Civmec Limited Annual Report 2013
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
27
Financial Risk Management
The Group’s and the Company’s financial instruments consist mainly of cash and cash equivalents,
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 2013,
approximately 60% (2012: 100%) of the Group’s debt is fixed. The Group’s borrowings at variable
rates are denominated mainly in AUD. If the AUD interest rates increase/decrease by 1% (2012: Nil)
with all other variables remain constant, the Group’s profit before tax will be approximately
lower/higher by S$119,000 (2012: Nil) as a result of higher/lower interest expenses on these
borrowings.
The Group and the Company has cash balances placed with reputable banks and financial
institutions. Such balances are placed on varying maturities and generate interest income for the
Group and the Company.
The Group obtains additional financing through bank borrowings and leasing arrangements.
Information relating to the Group’s interest rate exposure is also disclosed in the notes on the
Group’s borrowings and leasing obligations. They are both fixed and floating rates of interest. The
policy is to retain flexibility in selecting borrowings at both fixed and floating rates interest.
Variable rates
Fixed rates
Within
1 year
S$’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$’000
23,108
-
23,108
-
-
4,087
4,087
-
-
-
-
-
-
-
-
-
-
89,873
89,873
23,108
89,873
112,981
-
-
7,770
7,770
-
5,434
-
5,434
-
12,185
-
12,185
35,851
-
-
35,851
35,851
17,619
11,857
65,327
Group
2013
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings - finance lease
Borrowings - bank bills
86
119
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
27
Financial Risk Management (cont’d)
(a) Market risk (cont’d)
Interest rate risk (cont’d)
Variable rates
Fixed rates
Within
1 year
S$’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
Group
2012
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings - finance lease
Payable to related parties
Company
2013
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Payable to related parties
2012
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Payable to related parties
33,801
-
33,801
-
-
-
-
403
-
403
-
-
-
1,295
-
1,295
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
86,620
86,620
33,801
86,620
120,421
-
3,318
-
3,318
-
10,055
-
10,055
54,239
-
123
54,362
54,239
13,373
123
67,735
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
4,188
4,188
180
1,001
1,181
-
5,082
5,082
359
901
1,260
403
4,188
4,591
180
1,001
1,181
1,295
5,082
6,377
359
901
1,260
120 Civmec Limited Annual Report 2013
87
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
27
Financial Risk Management (cont’d)
(a) Market risk (cont’d)
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 and the
Company.
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. Such
monitoring is used in assessing receivables for impairment. Depending on the division within the
Group and the Company, credit terms are generally 30 days from the date of invoice.
The Group has a concentration of credit risk with one counterparty accounting for 46% of trade
receivables as at 30 June 2013 (2012: 56%). 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 and Company’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 Company 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 and the Company.
88
121
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
27
Financial Risk Management (cont’d)
(a) Market risk (cont’d)
Credit risk (cont’d)
Within
initial
trade
terms
Gross
amount
S$’000
S$’000
Past due but not impaired
> 90
61 - 90
days
days
S$’000
S$’000
31 - 60
days
S$’000
Past due
and
impaired
S$’000
69,873
20,000
89,873
38,272
20,000
58,272
29,970
-
29,970
570
-
570
59,536
27,084
86,620
32,870
27,084
59,954
23,113
-
23,113
1,368
-
1,368
4,188
4,188
4,188
4,188
2,076
3,006
5,082
2,076
3,006
5,082
-
-
-
-
-
-
-
-
-
-
1,061
-
1,061
2,185
-
2,185
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Group
2013
Trade receivables
Other receivables
Total
2012
Trade receivables
Other receivables
Total
Company
2013
Receivables from
subsidiaries
Total
2012
Receivable from
subsidiaries
Dividends receivable
Total
The Group and the Company did not hold any financial assets whose terms have been renegotiated,
but which would otherwise be past due or impaired.
The Group and the Company believe that the unimpaired amounts that are past due by more than 30
days are still collectible based on historic payment behaviour and extensive analyses of customer
credit risk, including underlying customers’ credit ratings, when available. Based on the Group’s
and the Company’s monitoring of customer credit risk, the Group and the Company believes that,
apart from the above, no impairment allowance is necessary in respect of receivables not past due or
past due by 30 days and above.
122 Civmec Limited Annual Report 2013
89
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
27
Financial Risk Management (cont’d)
(a)
Market risk (cont’d)
Credit Risk (cont’d)
Credit risk related to balances with banks and other financial institutions is managed by investing
surplus funds with counterparties that are at a Standard and Poor’s rating of at least AA. The
following table provides information regarding the credit risk relating to cash and cash equivalents
based on Standard and Poor’s counterparty credit ratings.
Group
2013
S$’000
2012
S$’000
Company
2013
S$’000
2012
S$’000
23,108
33,801
403
1,295
Cash and cash
equivalents:
AA Rated
Liquidity Risk
Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting its
commitments concerning its financial liabilities. The Group and the Company manages this risk
through the following mechanism:
(cid:127)
Preparing forward-looking cash flow analysis in relation to its operational, investing and
financing activities;
(cid:127) Monitoring undrawn credit facilities;
(cid:127) Maintaining credit risk related to financial assets;
(cid:127) Obtaining funding from a variety of sources;
(cid:127) Only investing surplus cash with major financial institutions; and
(cid:127) 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 and the Company 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 amount as the impact of discounting is not significant.
90
123
view online at www.civmec.com.au
FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
27
Financial Risk Management (cont’d)
(a)
Market risk (cont’d)
Liquidity Risk (cont’d)
Carrying
amount
S$’000
Contractual Undiscounted Cash Flows
Between
Within
2 to 5 years
1 year
S$’000
S$’000
Total
S$’000
35,851
17,619
11,857
65,327
54,239
13,373
123
67,735
180
1,001
1,181
359
901
1,260
35,851
6,478
4,267
-
35,851
13,277
8,197
19,755
12,464
46,596
21,474
68,070
54,239
4,272
123
-
54,239
11,251
-
15,523
123
58,634
11,251
69,885
180
1,001
1,181
359
901
1,260
-
-
-
-
-
-
180
1,001
1,181
359
901
1,260
Group
2013
Financial liabilities:
Trade and other payables
Borrowings:
− Finance lease
− Bank bills
Total financial liabilities
2012
Financial liabilities:
Trade and other payables
Borrowings:
− Finance lease
Payable to related parties
Total financial liabilities
Company
2013
Financial liabilities:
Trade and other payables
Payable to related parties
Total financial liabilities
2012
Financial liabilities:
Trade and other payables
Payable to related parties
Total financial liabilities
124 Civmec Limited Annual Report 2013
91
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
AND ITS SUBSIDIARIES
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
27
Financial Risk Management (cont’d)
(a)
Market risk (cont’d)
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, distribution 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.
Net debt
Total equity
Net debt-to-equity ratio
Group
2013
S$’000
2012
S$’000
42,219
110,179
0.38
33,934
89,413
0.38
There were no changes in the Group’s approach to capital management during the year.
Fair Value Estimation
The fair values of financial assets and financial liabilities can be compared to their carrying values
as presented in the statement of financial position. Fair values are those amounts at which an asset
could be exchanged, or liability settled, between knowledgeable, willing parties in an arm’s length
transaction.
Fair values derived may be based on information that is estimated or subject to judgement, where
changes in assumptions may have a material impact on the amounts estimated. Areas of judgement
and the assumptions have been detailed in Note 3 to the consolidated financial statements.
The fair value of current financial assets and financial liabilities approximate the carrying value due
to the liquid nature of these assets and / or the short term nature of these financial rights and
obligations.
92
125
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FINANCIAL REPORTS
CIVMEC LIMITED
(Incorporated in Singapore)
Notes to the Financial Statements (cont’d)
30 June 2013
NOTES TO THE FINANCIAL STATEMENTS - 30 JUNE 2013
AND ITS SUBSIDIARIES
27
Financial Risk Management (cont’d)
(a)
Market risk (cont’d)
Fair Value Estimation (cont’d)
The fair value of non-current loans receivables and borrowings are calculated based on discounted
expected future principal and interest cash flows. The discount rates used are based on market rates
for similar instruments at the reporting date.
28
Cash Flow Information
(a)
Proceeds from issuance of shares of the Company
Balance at beginning of year
Issuance of shares of the Company for the year
Balance at end of year
Movement in share capital during the year
Issuance of shares of the Company for the year
Conversion of loans to equity
IPO expenses debited to equity
Proceeds from issuance of share of the Company
(b) Declaration of first and final dividends
Group
2013
S$’000
2012
S$’000
37,864
-
37,864
-
37,864
37,864
-
-
-
-
37,864
(18,919)
1,580
20,525
For the financial year ended 30 June 2013, the board of directors proposed a first and final
For the financial year ended 30 June 2013, the board of directors proposed a first and final dividend
dividend of 0.7 Singapore cents per ordinary share, subject to the approval of the
of 0.7 Singapore cents per ordinary share, subject to the approval of the shareholders at the
shareholders at the forthcoming annual general meeting.
forthcoming annual general meeting.
126 Civmec Limited Annual Report 2013
93
Statistics of Shareholders
CIVMEC LIMITED
as at 20 September 2013
STATISTICS OF SHAREHOLDERS AS AT 20 SEPTEMBER 2013
Class of Shares
Voting Rights
No. of issued shares
No. of treasury shares
:
:
:
:
Ordinary Shares
One vote per Ordinary Share
501,000,000 shares
Nil
STATISTICS OF SHAREHOLDINGS
SIZE OF SHAREHOLDINGS
NO. OF
SHAREHOLDERS
%
NO. OF
SHARES
%
0.00
0.46
9.37
1 - 999
1,000 - 10,000
10,001 - 1,000,000
1,000,001 and Above
3
377
466
37
0.34
42.70
52.77
4.19
368
2,317,185
46,958,194
451,724,253
90.17
TOTAL
883
100.00
501,000,000
100.00
TWENTY LARGEST SHAREHOLDERS
No. Shareholders’ Name
No. of Shares
%
1. CIMB SECURITIES (SINGAPORE) PTE LTD
2.
JAMES FINBARR FITZGERALD AND OLIVE TERESA FITZGERALD
3. CLARENDON PACIFIC VENTURES PTE LTD
4. VAZ LORRAIN MICHAEL
5. RAFFLES NOMINEES (PTE) LTD
6. HSBC (SINGAPORE) NOMINEES PTE LTD
7. FOO SIANG GUAN
8. DBS NOMINEES PTE LTD
9. LEE TECK LENG
10. MAYBANK KIM ENG SECURITIES PTE LTD
11. LEYAU LAY HOON
12. TAN SIEW HUAY
13. CITIBANK NOMINEES SINGAPORE PTE LTD
14. UNITED OVERSEAS BANK NOMINEES (PRIVATE) LIMITED
15. ANG KONG HUA
16. GOH GEOK LING
17. LIM KIM LYE
18. LAI VOON NEE
19. BANK OF EAST ASIA NOMINEES PTE LTD
20. ABN AMRO NOMINEES SINGAPORE PTE LTD
187,322,272
97,566,806
23,812,000
15,277,000
14,479,321
13,155,000
11,484,849
9,900,038
5,700,200
5,482,000
5,477,899
5,016,845
4,388,386
4,263,000
4,153,677
3,425,134
3,360,000
3,300,000
3,062,000
2,800,000
37.39
19.47
4.75
3.05
2.89
2.63
2.29
1.98
1.14
1.09
1.09
1.00
0.88
0.85
0.83
0.68
0.67
0.66
0.61
0.56
TOTAL
423,426,427
84.51
127
view online at www.civmec.com.au
STATISTICS OF SHAREHOLDERS
Statistics of Shareholders (cont’d)
as at 20 September 2013
SUBSTANTIAL SHAREHOLDERS
Direct Interest
Deemed interest
Name
No. of Shares
%
No. of Shares
%
JT & OT Fitzgerald Family Trust(1)
Kariong Investment Trust (2)
Michael Lorrain Vaz (3)
James Finbarr Fitzgerald (and Olive Teresa
Fitzgerald)(1)
Goldfirm Pty Ltd (2)
Patrick John Tallon(2)
97,566,806
97,566,806
17,788,000
-
19.47
19.47
3.55
-
-
-
23,812,000
97,566,806
-
-
-
-
97,566,806
97,566,806
-
-
4.75
19.47
19.47
19.47
Note:
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 and his spouse
(Olive Teresa Fitzgerald), their children (Sean Fitzgerald, Claire Fitzgerald and Sarah Fitzgerald) and
Parglade Holdings Pty Ltd (which equally held by Mr James Finbarr Fitzgerald and his spouse) are
deemed to have an interest in the Shares owned by 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 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 Lorrain Vaz is deemed interested in 23,812,000 shares which are held by Clarendon Pacific
Venture Pte. Ltd.
PERCENTAGE OF SHAREHOLDING IN PUBLIC’S HANDS
Based on Shareholders’ Information as at 20 September 2013 and to the best knowledge of the Directors,
approximately 50.02% of the issued ordinary shares of the Company is 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.
128 Civmec Limited Annual Report 2013
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 Tuesday, 29
October 2013 at 10.30 a.m., to transact the following businesses:
AS ORDINARY BUSINESSES:
1.
2.
3.
4.
To receive and adopt the Audited Financial Statements of the Company for
the financial year ended 30 June 2013 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
0.7 Singapore cents per ordinary share for the financial year ended 30 June
2013.
To approve the payment of Directors’ fees of S$190,000 for the financial
year ending 30 June 2014, to be paid quarterly in arrears. (FY2013:
S$175,000)
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 1
Resolution 2
Resolution 3
Resolution 4
Resolution 5
Resolution 6
Resolution 7
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 8
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.
129
view online at www.civmec.com.au
CIVMEC LIMITED
Notice of Annual General Meeting
NOTICE OF ANNUAL GENERAL MEETING
5.
To re-elect Mr Douglas Owen Chester, the director retiring pursuant to
Article 123 of the Company’s Articles of Association :-
Resolution 9
Mr Douglas Chester, will, upon re-election as Director of the Company
remain as Chairman of Nominating Committee and a member of Audit,
Risks and Conflicts and Remuneration Committees. Mr Douglas Chester
will be considered independent for the purpose of Rule 704(8) of the
Listing Manual of Singapore Exchange Securities Trading Limited.
6.
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:-
7.
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
130 Civmec Limited Annual Report 2013
CIVMEC LIMITED
Notice of Annual General Meeting
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;
(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 (i)]
8.
Authority to allot and issue shares under the Civmec Employee Share
Option Scheme and the Civmec Performance Share Plan
Resolution 12
“THAT authority be and is hereby given to the Directors of the Company
to offer and grant options in accordance with the Civmec Employee Share
Option Scheme (the “CESOS”) and/or to grant awards in accordance with
the Civmec Performance Share Plan (the “Share Plan”) and allot and issue
from time to time such number of Shares in the capital of the Company as
may be required to be issued pursuant to the exercise of the options under
the CESOS and/or the vesting of awards under the Share Plan, provided
always that the aggregate number of additional Shares to be allotted and
issued pursuant to the CESOS and the Share Plan shall not exceed fifteen
per centum (15%) of the total number of issued shares (excluding treasury
shares) in the capital of the Company from time to time.”
[See Explanatory Note (ii)]
9.
To transact any other ordinary business which may properly be transacted
at an Annual General Meeting.
BY ORDER OF THE BOARD
Sin Chee Mei
Ang Siew Koon
Company Secretaries
14 October 2013
Singapore
131
view online at www.civmec.com.au
NOTICE OF ANNUAL GENERAL MEETING
CIVMEC LIMITED
Notice of Annual General Meeting
Explanatory Notes:-
(i)
Special Business – Item 7 of the Agenda
The Resolution No. 11 proposed in item no. 7 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.
(ii)
Special Business – Item 8 of the Agenda
The Resolution No. 12 proposed in item no. 8 above, if passed, will empower the Directors of the Company to allot
and issue shares in the Company of up to a number not exceeding in total fifteen per centum (15%) of the total
number of issued shares (excluding treasury shares) in the capital of the Company from time to time pursuant to the
exercise of the options under the CESOS and vesting of the share awards under the Share Plan.
Notes:
(a)
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.
(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.
132 Civmec Limited Annual Report 2013
CIVMEC LIMITED
(Company No. : 201011837H)
(Incorporated in the Republic of Singapore)
PROXY FORM
ANNUAL GENERAL MEETING
*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 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 Tuesday, 29 October 2013 at 10.30 a.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.
No.
Ordinary Resolutions
For#
Against#
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 2013 together with the Directors’ Report and
Independent Auditors’ Report thereon.
Approval of payment of a tax exempt (1-tier) First and Final Dividend of
0.7 Singapore cents per ordinary share for the financial year ended 30
June 2013.
Approval of the payment of Directors’ fees of S$190,000 for the financial
year ending 30 June 2014 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-election of Mr Douglas Owen Chester as a Director of the Company.
Re-appointment of Messrs Moore Stephens LLP as the Auditors.
Authority to allot and issue shares.
Authority to allot and issue shares under the Civmec Employee Share
Option Scheme and the Civmec Performance Share Plan.
Dated this ________day of ____________________ 2013
Total number of shares in
(a) CDP Register
(b) Register of Members
No. of Shares
____________________________________
Signature(s) of Member(s)/Common Seal
* Delete accordingly
# 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.
view online at www.civmec.com.au
133
PROXY FORM
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.
134 Civmec Limited Annual Report 2013
view online at www.civmec.com.au
135
“Civmec has
consolidated
its strengths
and is
poised to
continue the
momentum”
James Fitzgerald
Executive Chairman
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
136 Civmec Limited Annual Report 2013
www.civmec.com.au