CAPITALISING ON
OPPORTUNITIES
THROUGH
DIVERSIFICATION
Civmec is an integrated,
multi-disciplined construction
and engineering services
provider to the resources
and infrastructure sectors.
Our success is a direct result
of an unwavering commitment
to our clients, underscored
by our responsive and flexible
approach to meeting their
complex requirements.
TABLE OF
CONTENTS
About Our Company
Goal and Values
A Year in Review
Locations
Capabilities Overview
Financial Highlights
Executive Chairman’s Statement
CEO’s Report
Oil and Gas
Mining
Infrastructure
02
03
04
06
08
10
12
14
16
18
20
Health, Safety, Environment and Quality
Our People
Corporate Social Responsibility
Board of Directors
Executive Team
Corporate Governance
Corporate Registry
Financial Reports
Statistics of Shareholders
Notice of Annual General Meeting
Proxy Form
22
24
26
28
30
40
53
55
97
99
105
ANNUAL REPORT 2015 | CIVMEC 1
ABOUT
OUR COMPANY
Our diverse capabilities enable us to
provide our clients with a wide range
of complementary in-house core
competencies and services.
We provide heavy engineering and other services
including modular assembly; precast concrete; site
civil works; structural, mechanical and process piping
installation; industrial insulation; surface treatment;
access solutions; offshore logistics; refractory and
maintenance services.
Civmec operates a number of facilities strategically
located in Australia’s key energy, resources and
urban regions.
Our headquarters and main facilities are located at
Henderson, 35km south of Perth’s CBD. Spread
over 120,000m2 of land with direct waterfront
access, it is the largest heavy engineering facility
of its kind in Australia.
In addition to this, we operate specialist facilities in
Darwin (NT), Broome (WA), along with an office in
Sydney (NSW), a facility in Gladstone (QLD) and a
presence in Singapore.
With our diverse capabilities, resources and experience,
our dedicated teams can deliver projects throughout
Australia and beyond.
Civmec Limited has been listed on the Singapore
Exchange (SGX) since April 2012.
OUR APPROACH
At the core of our
organisation lies Civmec’s
strength and the attitude
of our people in achieving
positive outcomes across all
elements of our business.
PROJECT LIFECYCLE
Our diverse and
integrated capabilities
support construction
and engineering activities
across all stages of the
project lifecycle.
CAPABILITIES
Our multi-disciplinary
capability offerings,
complemented by our
strength in innovation,
provide the foundation for
the delivery of high quality,
cost-effective solutions.
KEY MARKETS
We are strongly focussed
on delivering innovative
solutions and developing
long-term partnerships that
achieve positive outcomes
across these markets.
2 CIVMEC | ANNUAL REPORT 2015
2 CIVMEC | ANNUAL REPORT 2015
GOAL
AND VALUES
Our goal is to grow a sustainable
company that will deliver mutually
beneficial outcomes to our
stakeholders, today and into
the future.
We are focussed on enhancing our future growth by embracing sound
work ethics, innovation and technology while continually striving to provide
outstanding service to our customers.
Our values shape every decision
we make and every action we take
as a business.
Our core values:
• Safety and wellbeing
• Accountability
• Teamwork
• Integrity
• Politeness and courtesy
• Openness and trust
Our values and goals are pivotal to our
successful business model, positioning us
to perform well, develop a strong client
base and convert high levels of customer
satisfaction into repeat business.
SAFETY &
WELLBEING
ACCOUNTABILITY
TEAMWORK
INTEGRITY
POLITENESS &
COURTESY
OPENNESS
& TRUST
ANNUAL REPORT 2015 | CIVMEC 3
ANNUAL REPORT 2015 | CIVMEC 3
A YEAR
IN REVIEW
• Commenced operations at our 12,000m2
logistics base in Broome, Western Australia
• Secured contract for Technip on Shell’s
Prelude Floating Liquefied Natural Gas
(FLNG) Project for fabrication and testing
of subsea components
• Awarded contract by Technip on the
Chevron-operated Wheatstone LNG
Project for fabrication and testing of 5.5km
of jumper spools
• Commenced construction of precast
concrete modules on the A$1 billion
Gateway Project - a major road
infrastructure project for Western Australia
CEO Patrick
Tallon named
“Construction
Executive of the
Year” by CEO
Magazine
July2014
August2014
October2014
December2014
Awarded contract on
a major infrastructure
project in Perth’s CBD,
Elizabeth Quay, for civil
works and fabrication
components
• New Chief Financial Officer -
Ms Justine Campbell - appointed
• Civmec Construction & Engineering
South East Asia presence
commenced
• Fabrication works commenced on the
55 million tonne per annum Roy Hill
Iron Ore Project
4 CIVMEC | ANNUAL REPORT 2015
4 CIVMEC | ANNUAL REPORT 2015
• Awarded further
contracts on the Roy
Hill project, taking
total to four contracts
• Sydney office
opened
• 3,305m2 Gladstone
facility established
December2014
January2015
February2015 March2015
May2015
June2015
• Refractory
Division established
to provide a
comprehensive
solution to all
refractory service
requirements
• Awarded A$73
million new Perth
Perth
Stadium Steelwork
Stadium Steelwork
Package contract
involving fabrication
and site erection of
steelwork
• Received 2015
Received 2015
Subsea Energy
Subsea Energy
Australia (SEA)
Australia (SEA)
Company of the
Company of the
Year award
Year award
Year award
Year
• Won the Heavy
• Won the Heavy
Civil Construction
Civil Construction
Award for Civtrac at
Award for Civtrac at
the 2015 Singapore
the 2015 Singapore
Business Review
Business Review
(SBR) Listed
(SBR) Listed
Companies Awards
Companies Awards
ANNUAL REPORT 2015 | CIVMEC 5
ANNUAL REPORT 2015 | CIVMEC 5
LOCATIONS
Our strategy to pursue growth through diversification led to an
expansion of our operating footprint during FY2015.
We opened a new office in Sydney to increase our exposure to the Australian Eastern
seaboard and pursue new business opportunities in public infrastructure. In line with this
goal, we also established a facility in Gladstone, Queensland, to expand our maintenance
and refractory service offerings to the resources and infrastructure markets.
Our primary facilities in Henderson, Western Australia, are now fully developed
in line with our initial plans. In 2015, we completed a 1,200m² specialist subsea
facility and built a new 2,300m² operational readiness facility to further improve
our core capabilities.
We are now present in:
• Perth
• Darwin
• Sydney
• Broome
• Gladstone
• Singapore
GLADSTONE
SYDNEY
6 CIVMEC | ANNUAL REPORT 2015
3,000T Wharf
6,000T Wharf
15,000T Wharf
Floating Dock
Surface Treatment Facility - 4,800m2
Heavy Engineering Facility - 29,300m2
Specialist Subsea Facility - 1,200m2
Office Headquarters - 6,500m2
GLADSTONE
SYDNEY
Operational Readiness Facility - 2,300m2
ANNUAL REPORT 2015 | CIVMEC 7
ANNUAL REPORT 2015 | CIVMEC 7
CAPABILITIES
OVERVIEW
Civmec is a leading end-to-end provider of specialist heavy engineering and construction
services and we do this by offering a comprehensive suite of in-house core competencies.
We combine state-of-the-art facilities with experienced people to deliver exceptional results for our clients
to succeed, safely and efficiently.
Heavy Engineering:
We undertake large and small fabrication projects ranging from structural and
platework packages to complex structures which require specialist welding of exotic
materials such as titanium, stainless steels, duplex steel and copper alloys.
Modular Assembly:
Our large custom-built manufacturing facility enables large modular assemblies to be
fabricated and assembled offsite into single units for safe and efficient construction.
Structural, Mechanical, Piping, Electrical and
Instrumentation (SMPE&I) Installation:
We carry out complex site structural, mechanical and piping installation projects for the
energy and resources sectors. We have an extensive range of suitable heavy lift cranes
and other equipment to deliver large projects.
Precast Concrete:
We manufacture reinforced concrete products of all sizes and complexities with the
ability to produce from our Henderson facility or from remote set-ups closer to site.
Site Civil Works:
We offer a full range of civil works services and are at the forefront of creating
innovative construction techniques. We have an extensive range of plant and equipment
to ensure site efficiency.
8 CIVMEC | ANNUAL REPORT 2015
8 CIVMEC | ANNUAL REPORT 2015
Painting, Insulation and Fireproofing:
With support from our technologically advanced engineering facilities, we are able
to provide integrated painting, insulation and fireproofing solutions for both onsite
and offsite operations.
Refractory:
We provide a complete refractory lining service for new build and ongoing
maintenance and deliver tailored solutions specific to clients’ individual needs.
Access Solutions:
Our access solutions provide support for our clients across all aspects of project,
maintenance and shutdown works.
Offshore Logistics:
We provide comprehensive, integrated supply chain solutions to the onshore and
offshore industry.
Maintenance Services:
Our diverse capabilities enable us to provide a single solution
for industrial maintenance such as plant shutdowns, ensuring our clients
maximise their output.
ANNUAL REPORT 2015 | CIVMEC 9
ANNUAL REPORT 2015 | CIVMEC 9
FINANCIAL
HIGHLIGHTS
REPORTING CURRENCY (S$)
RECORD REVENUE OF
S$499.2m
2012
2013
2014
2015
328.7
405.9
433.7
499.2
EBITDA OF
S$45.8m
2012
2013
2014
2015
48.6
54.3
53.8
45.8
NET PROFIT AFTER TAX OF
S$30.3m
2012
2013
2014
2015
30.3
36.0
35.1
30.3
OPERATING CASH FLOW
S$45.0m
2012
2013
2014
2015
26.1
8.6
30.3
45.0
EARNINGS PER SHARE
6.05 cents
2012
2013
2014
2015
6.1
7.2
7.0
6.05
DIVIDENDS PER SHARE
0.7 cents
2012
2013
2014
2015
0.6
0.7
0.7
0.7
10 CIVMEC | ANNUAL REPORT 2015
FINANCIAL
HIGHLIGHTS
Reporting Currency S$’000
2015
2014
Change
Sales revenue
EBITDA
Net profit after tax
Operating cash flow
Earnings per share (basic)
Dividend per share (cents)
Return on equity (%)
Financials
The strength of our client service model
has enabled us to achieve record
turnover of S$499.2 million for FY2015,
delivering a net profit after tax (NPAT) of
S$30.3 million.
Earnings before interest, tax,
depreciation and amortisation (EBITDA)
was S$45.8 million, and earnings
before interest and tax (EBIT) was
S$35.7 million.
While we realised a slight movement
in margins when compared to
FY2014, they remain very healthy at
9.2% for EBITDA, 7.1% for EBIT and
6.1% for NPAT.
Operating Currency A$’000
Sales Revenue
EBITDA
Net Profit After Tax
499,153
433,677
45,802
30,308
44,905
6.05
0.7
20.0
53,779
35,079
25,855
7.01
0.7
24.3
+15.1%
-14.8%
-13.6%
+73.7
-13.6%
-
-17.7%
This resulted in a return on equity
of 20% and earnings per share of
6.05 cents.
Our continued focus on cash flow
discipline resulted in a cash balance
at year end of S$37.6 million with
S$33.8 million of borrowings repaid
during the year as at 30 June 2015.
We now have a stronger balance
sheet with total net assets of
S$151.7 million in FY2015.
The Group’s FY2015 total
comprehensive income included a
negative on unrealised foreign
exchange of S$19.2 million
arising from the weakening of
the Australian dollar (the Group’s
functional currency) against the
Singapore dollar (the Group’s
reporting currency).
In A$ terms, the Group achieved
record growth of 20.9% at A$453.4
million with net profit after tax of
A$27.3 million.
The chart below outlines our
comparative performance in our
present operating currency (A$).
2015
453,381
41,385
27,338
2014
374,927
46,480
30,231
Change
+20.9%
-10.9%
-9.6%
OPERATING CURRENCY (A$)
RECORD REVENUE OF
A$453.4m
NET PROFIT AFTER TAX OF
A$27.3m
2012
2013
2014
2015
252.9
319.1
374.9
453.4
2012
2013
2014
2015
23.3
28.3
30.2
27.3
ANNUAL REPORT 2015 | CIVMEC 11
EXECUTIVE
CHAIRMAN’S STATEMENT
It is my pleasure to present Civmec Limited’s 2015
Annual Report.
The company has had a solid 12 months to 30 June
2015. In the face of some challenges, particularly in
terms of the documented downturn in the resources
sector, we have continued to grow the company by
moving into new markets and broadening the range
of services we offer our clients.
FINANCIAL PERFORMANCE
As a result, Civmec has delivered
revenue of S$499.2 million, a
record for the company with
net profit after tax for the year of
S$30.3 million.
The company remains in a very strong financial
position and so, in line with our commitment to
maximise returns to our shareholders, the Board
has recommended a cash dividend of 0.7 cent
per share, subject to shareholders’ approval at
our Annual General Meeting on 29 October 2015.
The dividend will be paid on 15 December 2015.
EXECUTING OUR STRATEGY
The success of the past year can in no small
part be attributed to the company’s diversification
strategy which has been a focus for the Board
and Executive Team over the past two years.
During FY2015, we expanded into new
geographical markets opening an office in
Sydney and establishing a facility in Gladstone
Queensland, from where we can offer our clients
infrastructure, maintenance and refractory services
– an example of our determination to expand our
service offerings, as we continually evolve to meet
the changing environment of our major clients.
We have successfully diversified into the public
infrastructure space, securing a number of
significant projects which demonstrate our flexibility
to operate in a sector which is continuing to present
significant growth opportunities.
12 CIVMEC | ANNUAL REPORT 2015
As our company grows, we never lose sight of
the fact that safety remains at the very core of our
business. At 30 June 2015, our Total Reportable
Injury Frequency Rate (TRIFR) was 3.79; however
our goal is zero and with continual focus we
believe this can be achieved. In FY2016, we are
embracing an awareness campaign of “Never
Assume”, meaning never assume you are not
responsible for safety. Our philosophy still stands –
a safe day is a good day.
It is very pleasing to see that we are continuing
to receive industry recognition, with the company
being presented a number of major awards over
the past 12 months. These include being named
Company of the Year at the Subsea Energy
Australia Business Awards; receiving the Heavy
Civil Construction Award for our in-house Civtrac
Management System at the Singapore Business
Review Listed Companies Awards; and our Chief
Executive Officer, Mr. Patrick Tallon being named
Construction Executive of the
Year by CEO Magazine.
OUTLOOK
The Board remains very optimistic about the
outlook for the business over the next financial
year and beyond.
Our broadened range of service offerings
and capabilities allow us to pursue business
opportunities in the growing Australian public
infrastructure sector as well as the resources
industry as it shifts towards operating expenditure
investments. As always, our focus remains on
working hard to solidify our position as a leading
heavy engineering company and enhance value
for our shareholders.
Areas such as subsea and other complex
technical work, along with the opportunities
arising from further tendering activity in the
engineering, procurement and construction
(EPC) sector, are all regarded as sources of
future growth. We will also continue to explore
business opportunities in other geographic
locations, both in Australia and worldwide.
We believe our strategy to diversify has placed
us in an excellent position to capitalise on these
opportunities and continue to grow the business.
While we may experience a slowing in some of
the sectors we operate in we are committed to
achieving sustainable growth. Most importantly,
we have a strong balance sheet which provides
a solid foundation for our development and
enables us to pursue opportunities as they arise.
In closing, I wish to place on record the Board’s
appreciation for the hard work and outstanding
achievements of Mr. Patrick Tallon, the Executive
Team and the Civmec staff over the past 12
months. We are fortunate to have a highly skilled
team, at all levels, committed to delivering
real value and service to our clients, and it is
this commitment that enables us to deliver
consistently for our shareholders.
Yours sincerely,
James Finbarr Fitzgerald
Executive Chairman
Civmec Limited
PHOTO: CEO Patrick Tallon (left) with MC for the 2015 CEO Magazine
Awards, Mr Eddie McGuire.
ANNUAL REPORT 2015 | CIVMEC 13
CEO’S REPORT
As we reflect on the 12 months to 30 June 2015,
I am pleased to report that Civmec has had another
strong year.
BUSINESS PERFORMANCE
During FY2015, we have continued to diversify our
capabilities, expanded our geographic footprint
within Australia and solidified our reputation as a
strong, multi-disciplined provider.
The company’s success was reflected in a 15%
increase in revenue to S$499.2 million with a
healthy NPAT margin of 6.1%. Our move towards
infrastructure projects and some significant awards
in this sector, combined with an increase in
maintenance activities, has assisted in offsetting
a slowdown in other areas.
As the business has matured, so has our safety
culture. Our robust systems, investment in our
Health, Safety and Environmental department
and our focus on giving supervisors more
knowledge, training and support will
improve our performance. A highlight in
the past year was securing Environmental
the past year was securing Environmental
Accreditation ISO 14001.
Accreditation ISO 14001.
This year has been marked by the
This year has been marked by the
successful award and commencement
successful award and commencement
of major projects in the public
of major projects in the public
infrastructure, mining and oil and
infrastructure, mining and oil and
gas sectors, providing a platform
gas sectors, providing a platform
for continued, sustainable growth.
for continued, sustainable growth.
Our decision to focus heavily
Our decision to focus heavily
on infrastructure work was
on infrastructure work was
validated with the award of
validated with the award of
a major contract on the
a major contract on the
prestigious new Perth
prestigious new Perth
Stadium Project, along with
Stadium Project, along with
involvement on some of
involvement on some of
WA’s most iconic projects
WA’s most iconic projects
including Elizabeth
including Elizabeth
Quay – a major Perth
Quay – a major Perth
city public space
city public space
development - and
development - and
the Gateway WA
the Gateway WA
Project – Perth’s
Project – Perth’s
largest roads
largest roads
infrastructure
infrastructure
project.
project.
The successful delivery of separate packages on the
Yandicoogina Sustaining Project (civil and structural,
mechanical and process piping (SMP)) and full
vertical package delivery on the Nammuldi Iron Ore
project (civil, SMP, electrical and instrumentation (E&I))
strengthened our proven delivery capability in the
sector. Our ability to leverage our capabilities in this
sector also led to the award of multiple packages
for the Roy Hill Iron Ore Project, with more than 500
personnel mobilised to deliver the project.
Our oil and gas division performed well in FY2015,
completing a major service order for Shell’s Prelude
Floating LNG Development, along with the fabrication
and testing of subsea jumper spools for the Chevron-
Operated Wheatstone LNG Project.
At our Henderson waterfront facility, the completion
of our 1,200m2 specialist subsea facility has
enhanced our ability to produce high quality products
without the threat of material cross-contamination.
With contracts currently being delivered for GE Oil
and Gas, Technip and FMC Technologies, we are
well-positioned and resourced to grow our presence
in this sector.
During the year, we established a new entity with
the David Liddiard Group (DLG) – known as Civmec
DLG. Our vision for this entity is to provide Indigenous
Australians with more opportunities to participate
in the economy through employment and career
enhancement. The company is specifically targeting
opportunities within the Australian defence sector
and is already engaged in tendering activity.
STRATEGY
Our strategic focus for the past
two years has been to build on our
capabilities and offer clients an end-
to-end vertically integrated, turn-key
project solution. The approach is
paying dividends, as evidenced by
our success in both winning repeat
work from existing clients, as well as
attracting new clients.
14 CIVMEC | ANNUAL REPORT 2015
14 CIVMEC | ANNUAL REPORT 2015
Since its establishment in January 2015, our new
refractory division has secured several contracts,
demonstrating the high level of demand for our
services and the confidence our clients have in our
ability to deliver excellent results.
appointment of Ms. Justine Campbell as the
company’s new Chief Financial Officer. We
now have a very experienced team in place that
is highly focussed on growing the business and
capitalising on any opportunities we identify.
Our focus on developing innovative project
delivery methodologies has, in many instances,
resulted in us being requested to collaborate
with the client early in the planning process.
This strengthens client relationships and
potentially opens up new areas of opportunities
for us going forward.
We are continuing to improve productivity and
drive efficiencies by enhancing our internal
systems and processes; seeking new ways
to develop every aspect of our operations
in response to the current climate. While the
majority of materials will continue to be procured
in Australia, we can now leverage off our size to
investigate procurement opportunities globally. We
have also updated our organisational structure
to streamline the way we do business and how
we work with clients. Additionally, our business
management tools and the transparency we
provide through our award-winning Civtrac – a
fully integrated project progress tracking system –
has positioned us favourably for the future.
Our geographic expansion continued in FY2015
with an office established in Sydney and a facility
in Queensland’s resources hub of Gladstone –
which will assist us in capitalising on opportunities
available on Australia’s East Coast. Overseas, our
Singapore presence serves as a base to establish
a global footprint and we look to offer our multi-
disciplined service providing beyond Australia.
Over the past 12 months we have completed the
Phase A development of our facility at Henderson,
including our operational readiness facility for our
construction projects and the specialist subsea
facility for exotic materials. Our location, with
immediate access to wharves, undoubtedly gives
us a strategic advantage in the market.
We have continued to strengthen our team
during FY2015 including the introduction of a
General Manager to drive our Singapore and
South East Asian expansion plans along with the
LOOKING FORWARD
We are seeing an increase in infrastructure spending
within the Australian market, potentially creating
immediate opportunities for our civil, precast and
fabrication capabilities on the East Coast and for the
expansion of our maintenance offering.
As the resources sector shifts from a capital
expenditure phase to an operating environment,
we are focussed on securing sustainable work
with repeat, longstanding clients as well as
building on our relationships with some new
clients such as Samsung C&T, Brookfield
Multiplex and FMC Technologies.
The efficiency, quality standards and schedule
surety our fabrication business unit delivers will assist
us in attracting prestige projects in the future. With
our facilities adapting to growing demand, we can
now offer economies of scale and capitalise on these
prospects.
The changing face of our industry and the challenges
faced during FY2015 created multiple opportunities
for our company. In response, we have made
significant investments in our people and our service
offerings. We firmly believe our diverse capabilities
are evidence of our ability to not only survive any
period of economic uncertainty, but thrive and grow.
Yours sincerely,
Patrick Tallon
Chief Executive Officer
Civmec Limited
ANNUAL REPORT 2015 | CIVMEC 15
OIL AND GAS
16 CIVMEC | ANNUAL REPORT 2015
16 CIVMEC | ANNUAL REPORT 2015
PHOTO: As part of the Prelude Floating LNG Project, Civmec fabricated eight Pipe Line End Teminations
(PLETs), along with associated buckle triggers and suction piles.
HIGHLIGHTS
• Improved turnover of S$146.8 million, a 12.5% increase from the previous period
• Delivering contracts on four of Australia’s LNG projects –Prelude, Wheatstone, Gorgon and
Ichthys
• S$106.5 million in signed new contracts and extensions
Our oil and gas division
delivered strong results in
FY2015, supporting our
strategy to increase tendering
in the sector while pursuing
larger and longer-term
projects.
In August 2014, we were awarded major contracts
for two prominent projects in Western Australia by
global engineering and construction company,
Technip Oceania. The first was a master service
order contract for the fabrication and testing of
subsea components for the Prelude Floating
Liquefied Natural Gas (FLNG) development,
owned by Shell. Civmec’s scope of work
on the world’s first floating LNG project
includes the manufacture of eight Pipe
Line End Termination (PLETs), associated
buckle triggers and suction piles.
The second major contract was with
Chevron’s Wheatstone Liquefied
Natural Gas (LNG) Project for the
fabrication and testing of 5.5km
of subsea jumper spools and
supporting site works.
Combined with the award of modular and site
works for Chevron’s Gorgon LNG Project and a
precast contract on INPEX’s Ichthys Project, we
are now working across four major LNG projects
in Australia.
Civmec also successfully delivered diverless spools
for Woodside’s Xena Subsea Installation Project for
our client, Fugro-TSM.
These projects reaffirm our position in the oil and
gas market as a leading provider of high quality,
complex fabrication, precast supply and onsite
construction. These credentials have been widely
recognised by the market, providing access to
opportunities in other sectors with significant
capital expenditure budgeted in the near future.
Looking forward, a key component of our oil and
gas strategy is to strengthen our relationships
with current clients while positioning ourselves for
strategic long-term works. As these projects move
from construction to first gas, our maintenance
capability, along with our ability to operate across
both upstream and downstream construction,
will ensure opportunities are presented across
all stages of the project lifecycle. We are actively
positioning ourselves for the transition to
commissioning and operations, and are well
placed to extend our geographic reach across
Australia through our new locations on the Eastern
Seaboard. Also instrumental in our growth strategy
was the completion of our specialist subsea facility
at Henderson.
PHOTO: As part of Woodside’s Xena Subsea Installation Project, Civmec fabricated 8-inch super duplex
rigid pipe tie-in spools, complete with diverless connections.
ANNUAL REPORT 2015 | CIVMEC 17
MINING
HIGHLIGHTS
• Annual turnover of S$352.3 million, a 16.2% increase from FY2014
• Extensions and new contracts worth S$237 million
• New contracts secured on major mining projects for Rio Tinto and Roy Hill
Civmec remains optimistic
about its growth prospects in
the mining sector, particularly
given our ability to deliver
maintenance services.
Our mining division delivered yet another strong
performance for FY2015 despite challenging
resources sector dynamics, recording a 16.2%
increase in revenue. Furthermore we were awarded
S$237 million in new contracts and contract
extensions this financial year.
These wins reflect our competitive positioning,
where we strive to offer clients holistic, cross-
disciplinary, turnkey solutions from across our suite
of capabilities.
Similar to what is being witnessed in the oil and
gas sector, there has been a noticeable shift in
the mining industry from capital expenditure
towards operational expenditure in the form of
maintenance and sustaining capital upgrades.
Civmec’s strategic approach from early FY2015
was to better position the company to pursue
opportunities emerging from the changing nature of
activity in the resources sector.
Over the past 12 months, we were awarded four
new contracts for work at the Roy Hill Project, a
55 million tonne per annum iron ore mining, rail
and port project currently being developed in the
Pilbara region of Western Australia. Roy Hill is the
only independent iron ore project with majority WA
ownership (70%) by Hancock Prospecting Pty
Ltd. Our initial contract was for an SMP installation
package and through our execution of this work at
Roy Hill, we were successful in securing additional
scope for site civil works and trenching on behalf of
Samsung C&T on the project.
18 CIVMEC | ANNUAL REPORT 2015
We completed a contract for Rio Tinto at the
Yandicoogina Sustaining Project, demonstrating
the strength of our diversified operating model
in delivering civil site works, fabrication, modular
assembly and structural, mechanical and process
piping to the project. We also completed work for
Rio Tinto at their Nammuldi Below Water Table
Project – a vertical package delivering fabrication,
civil site works, structural, mechanical and process
piping and electrical and instrumentation, while
also providing commissioning support.
Our scope of work with Rio Tinto expanded in
2015, and we are currently constructing a second
fuel facility in the greater Brockman area, following
our earlier delivery of a similiar facility at Nammuldi.
The project includes fabrication, civil site works,
structural, mechanical and process piping and
electrical and instrumentation work.
The facility, which forms part of a broader
Fuel Infrastructure Project, is setting
a new standard for fuel transport,
storage and management across
their Pilbara operations.
We also secured a contract from
Sedgman to undertake structural,
mechanical, platework and piping
installation works for a new filtration
plant at Alcoa’s Kwinana Refinery.
The project involves building
and installing tanks and filter
equipment including six filter
presses, each weighing more
than 135 tonnes.
We are also pleased to have
delivered miscellaneous
packages of works for BHP
Billiton Iron Ore, among
others, throughout
FY2015.
PHOTO: This rail car dumper was installed by Civmec crews on the Roy Hill
Project in WA’s North West.
PHOTO: Civmec fabricated and installed 6,500T of structural, platework,
conveyor trusses and approximately 30km of process pipework for the
Yandicoogina Sustaining Project.
ANNUAL REPORT 2015 | CIVMEC 19
ANNUAL REPORT 2015 | CIVMEC 19
INFRASTRUCTURE
HIGHLIGHTS
• Infrastructure established as a standalone sector
• S$105M in new contract awards
• Awarded significant contracts on two major infrastructure projects in Western Australia
Creating a dedicated
infrastructure buseinss unit
was a large component of our
FY2015 strategy which has
proven timely given the recent
allocation of government
funding to such projects.
Civmec entered the public infrastructure sector
to diversify our contract pipeline and provide our
integrated, multi-disciplinary construction and
engineering solutions to a new client base.
Our strategy has already yielded positive results
with the award of site civil works, supply and
installation of precast concrete and the fabrication
of the pedestrian bridge arches at the A$2.6 billion
Elizabeth Quay waterfront development in Perth,
Western Australia.
We tendered and were awarded a contract on the
A$1 billion Gateway WA: Perth Airport and Freight
Access Project – a major road infrastructure project
designed to increase the safety and efficiency of
this primary transport hub.
In March 2015, we secured the largest project
for client, Brookfield Multiplex, on the new Perth
Stadium worth A$73 million. We are now in
the process of fabricating and erecting circa
14,500 tonnes of structural steelwork for the
superstructure. We have subsequently secured
the manufacture and installation of various precast
components for the same project.
Our office in Sydney and presence in Queensland
positions us well to capitalise on infrastructure
projects coming to market. Additionally, tendering
activity on the East Coast is very active with Civmec
targeting entry into the defence sector in FY2016.
The Australian Federal Government has stated
it will invest approximately A$50 billion across
Australia over seven years which, when combined
with State, Territory and private sector funding,
will be a catalyst for additional infrastructure
investment that is publicly forecast to be in
excess of A$125 billion1.
Our outlook for the infrastructure sector is
positive and given our proven ability to
effectively adapt our capabilities into new
sectors, we see this is a significant area
of future growth.
1http://budget.gov.au/2014-15/
PHOTO: The fabricated pedestrian bridge arches being lifted into place on the Elizabeth Quay Project.
20 CIVMEC | ANNUAL REPORT 2015
PHOTO: Civmec carried out the fabrication and assembly of approximately
2,500T of painted and galvanised steelwork for the Perth Airport Extension.
PHOTO: Progress on the new Perth Stadium Steelworks Package.
ANNUAL REPORT 2015 | CIVMEC 21
ANNUAL REPORT 2015 | CIVMEC 21
ANNUAL REPORT 2015 | CIVMEC
HEALTH, SAFETY,
ENVIRONMENT
AND QUALITY
PHOTO: A pre-start meeting at the Yandicoogina Sustaining Project.
22 CIVMEC | ANNUAL REPORT 2015
We are committed to incident
prevention through continuous
improvement of our positive
safety culture which encourages
open communication and
embraces the workforce in a
confident manner.
Our Group’s Total Reportable Injury Frequency
Rate (TRIFR) reached a low of 2.65 during FY2015,
substantially below the industry norm. Our Lost Time
Injury Frequency Rate (LTIFR) of 0.31 is industry-leading,
dramatically below the construction industry at 10.93
and manufacturing industry statistics at 12.54(1). A key
reason for these low statistics is a strong focus placed
on supervision and accountability – ensuring everyone
adopts the Safe Day, Good Day philosophy.
Due to the nature of our business, the ongoing target is
reducing these statistics to our goal target of zero. Along
with management commitment and leadership visibility on
site, a key to achieving this is to instil a culture which places
people’s safety at the forefront of everything we do. FY2016
will see the company focus on a new awareness campaign
titled “Never Assume”, which sends the message that
constant vigilance is critical. The campaign aims to enhance
the mindset of our people and our business.
In FY2015, we invested time building our safety, quality
and environmental management systems to better suit
the needs of our business. In terms of quality, we pride
ourselves, and are recognised by our clients, for our high
quality products. This past year we extended the scope
of our ISO 9001 Quality System certification to cover our
new surface treatment activities.
The high quality required for subsea work has set the
new standard for quality for the entire company – this
new baseline for Civmec will see our clients across
all sectors receive the highest quality products, often
beyond their expectations.
Through our Civtrac system, we have provided our
clients with surety of material control and greater
transparency across their projects. Going hand-in-hand,
our increased focus on the monitoring of small tools and
equipment usage has resulted in increased productivity
in the workplace.
In May 2015, we gained our ISO 14001 environmental
certification to complement our existing AS 4801
certification for our safety management system.
Like our approach to safety, we are committed to
continually improving our environmental performance
and minimising our impact on the environment. A key
focus for FY2016 is to create greater environmental
awareness amongst our people and encourage them
to work in an environmentally responsible manner.
(1) Worksafe
ANNUAL REPORT 2015 | CIVMEC 23
growth for employees. This new structure not only
supports the growth of the company but will position
us well for future success.
In FY2015, we continued to build on our training
program, improving the quality and offerings of our
Registered Training Organisation, which we established
last financial year to provide skills and competency-
based training courses. Our Registered Training
Organisation, Civmec Training, delivered more than
2,500 recognitions of competency to many of our
1,550-strong workforce in FY2015. Our integrated
Frontline Management Course, vital for investing in our
future leaders, was attended by many of our supervisors.
We continued to develop our people to bring new
expertise and skills into the organisation with some of
our trainees progressing into trainer positions –providing
them with enhanced long-term career opportunities.
Our internally developed business management system,
Civtrac, was formally recognised by the Singapore Business
Review in 2015, receiving the Heavy Civil Construction
award at the SBR Listed Company Awards in Singapore.
Additionally, Civmec won the Company of The Year title
at the coveted Subsea Energy Australia (SEA) Business
Awards for our company’s vision, enthusiasm and drive
and in December 2014, Chief Executive Officer Mr. Patrick
Tallon was named Construction Executive of The Year by
Australia’s CEO Magazine.
OUR
PEOPLE
“The greatest thing you can
instil in a workforce is a pride in
who they are, what they do and
who they work for. At Civmec,
our people are proud of the
growth we have achieved
together and are genuinely
excited about our future,”
– Pat Tallon, CEO.
Our shared values are the foundation of building a united
and successful organisational culture in the company.
Our success has been the result of a committed
workforce who are engaged and dedicated to the
realisation of our core values and vision.
A key to securing a strong future is investing in dedicated
individuals who want to build their career with Civmec.
In the past 12 months, we worked closely with tertiary
institutions to bring several graduates and interns into
the business, many of whom have progressed into
permanent, full-time employees. Our Apprenticeship
Program reached a total of 23 people who are currently
being trained to be our next wave of skilled welders,
carpenters and boilermakers.
In terms of our Indigenous engagement, we have
worked hard to ensure an Indigenous presence on all
major sites. While we always strive to do more, we are
focused on staying local where possible and look to
engage local Indigenous employees and contractors in
the areas we operate.
FY2015 also saw the business strategy focus more on
succession planning with senior executives identifying
future leaders within the business. The professional
development of these individuals will ensure they are on
the right path for growth within Civmec. This past year
also saw some changes to our organisational structure,
providing more clarity and a clearer direction for potential
24 CIVMEC | ANNUAL REPORT 2015
ANNUAL REPORT 2015 | CIVMEC 25
ANNUAL REPORT 2015 | CIVMEC 25
ANNUAL REPORT 2015 | CIVMEC 25
CORPORATE
SOCIAL RESPONSIBILITY
At Civmec, we strive to achieve sustainable business growth
by continually contributing to the welfare of people, our
community and the environment.
We know our contribution to the community should encompass the values and actions of both the
company and the individual members of our staff. In line with this philosophy, we actively support our
employees’ engagement in community endeavours alongside our own philanthropic activities.
DREAMFIT FOUNDATION
Our longstanding relationship with the Dreamfit Foundation continued this year through our unique
employee safety incentive. Dreamfit uses innovative engineering to overcome challenges and fulfill
the dreams of people with disabilities. In a fitting synergy with Civmec’s own approach to business,
Dreamfit receives the proceeds from savings attributable to the achievement of specific safety
performance targets by our employees. In Fy2015, we made two donations – one for $7,500
and one for $25,000.
PRINCESS MARGARET HOSPITAL FOUNDATION
The Princess Margaret Hospital Foundation is the official fundraising body for the Princess
Margaret Hospital for Children in Perth, raising money for the funding of medical
equipment, research, specialist services, capital projects and education.
Over the past year, we donated more than $26,000 to the Foundation with proceeds
going towards the $1.7 million Single Plane Angioplastic Interventional System which is
used to assist more than 1,000 surgeries each year.
INDIGENOUS ENGAGEMENT
This year, we were an official sponsor of the “Make Smoking History” Survival
Day Concert, hosted by Indigenous Services Australia. Survival Day is a national
celebration of Australia’s Aboriginal and Torres Strait Islander cultures and
communities, showcasing music, dance, art and food.
We have committed to the development of a Reconciliation Action Plan
which will enable our commitment to provide Indigenous employment,
training opportunities and cultural diversity awareness within our
organisation to become authentic and appropriate around the key areas
of opportunities, respect and relationships.
26 CIVMEC | ANNUAL REPORT 2015
PHOTO: Civmec donated $26,000 to the Princess Margaret Hospital Foundation’s Single Plane Angioplastic Interventional System.
PHOTO: Civmec made two donations to Dreamfit during FY2015 from savings attributable
to the achievement of specific safety performance targets by our employees.
ST PATRICK’S COMMUNITY CENTRE
St Patrick’s Community Centre offers a wide range
of services to vulnerable community members
including residential accommodation, nutritious meals,
comprehensive health clinics and vocational and
recreational health programs. This year, we made food
donations to St Patrick’s to ensure the Centre could
continue to provide meals to those in need.
PINK RIBBON BREAKFAST
Our commitment to providing practical, financial and
emotional support for breast cancer patients and families
saw Civmec raise awareness through donations to the
National Breast Cancer Foundation.
AUTISM ASSOCIATION OF WA
The Autism Association of Western Australia is dedicated
to serving the needs and interests of people with autism
and their families. Our staff working at the Yandicoogina
Sustaining Project donated money to Autism WA to
provide personal development, equal opportunity and
community participation for people with autism.
MOVEMBER
Movember is an annual event where men grow their
moustaches during the month of November to raise
awareness of men’s health issues, such as depression
and prostate cancer. Our staff supported Movember
again this year. We made two donations to the cause,
one on behalf of Civmec and one from money raised by
our staff and champions of the cause.
COCKBURN BASKETBALL
ASSOCIATION
We sponsored a local Basketball Association where
some of our employees and their families are involved,
enabling a junior Western Australian Basketball League
to purchase new uniforms and continue its success
on the court.
PHOTO: Civmec donated $26,000 to the Princess Margaret Hospital Foundation’s Single Plane Angioplastic Interventional System.
ANNUAL REPORT 2015 | CIVMEC 27
BOARD
OF DIRECTORS
James Finbarr Fitzgerald
Executive Chairman
Patrick John Tallon
Chief Executive Officer
Kevin James Deery
Chief Operating Officer
Mr. James Finbarr Fitzgerald was
appointed to our Board on 27 March
2012. He is responsible for the
corporate direction and implementing
the company’s vision and strategic
direction. With more than 34 years’
experience, he has extensive
knowledge in civil, structural,
mechanical and piping works, as well
as insulation and modularisation of
structures onshore and offshore.
Mr. Patrick John Tallon was
appointed to our Board on 27
March 2012. He is responsible
for the development and
performance of the Group,
including building culture and
leadership. Over the past
28 years, Mr. Tallon has
accumulated significant
knowledge and experience
in all aspects of the
construction industry
and has been involved
in many major oil
and gas, mining
and infrastructure
projects.
Mr. Kevin James Deery was
appointed to our Board on 27
March 2012. He is responsible for
overseeing the ongoing business
operations of the Group’s quality-
orientated culture, compliance and
operational productivity.
Mr. Deery has more than 20 years’
experience having previously
managed structural, mechanical and
process piping construction works
for major clients.
28 CIVMEC | ANNUAL REPORT 2015
(Left to right: Chong Teck Sin, Douglas Owen Chester, James Finbarr Fitzgerald, Patrick John Tallon, Kevin James Deery, Wong Fook Choy Sunny)
Chong Teck Sin
Lead Independent Director
Douglas Owen Chester
Independent Director
Wong Fook Choy Sunny
Independent Director
Mr. Chong Teck Sin was appointed
to our Board on 27 March 2012.
Mr. Chong is currently an
independent director of Changan
Minsheng APLL Logistics Co., Ltd.
and Audit Committee Chairman of
AVIC International Maritime Holdings
Limited, InnoTek Limited and
Accordia Golf Trust Management
Pte. Ltd. Mr. Chong has a Bachelor
of Engineering from the University
of Tokyo and a Masters of Business
Administration from the National
University of Singapore.
Mr. Douglas Owen Chester
was appointed to our Board
on 2 November 2012. He is an
Independent Director and Audit
Chairman of Stamford Land
Corporation Limited and Lead
Independent Director of Kim Heng
Offshore & Marine Holdings Limited.
Prior to this appointment, he held
the role of High Commissioner to
Singapore. Mr. Chester holds a
Bachelor of Science (Honours) from
the Australian National University.
Mr. Sunny Wong Fook Choy was
appointed to our Board on 27
March 2012. He is a practising
advocate and solicitor of the
Supreme Court of Singapore and
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., InnoTek Ltd.
and KTL Global Ltd. Mr. Wong
holds a Bachelor of Law
(Honours) from the National
University of Singapore.
ANNUAL REPORT 2015 | CIVMEC 29
ANNUAL REPORT 2015 | CIVMEC 29
ANNUAL REPORT 2015
EXECUTIVE
TEAM
Terence Hemsworth
Henderson Operations Manager
Rodney John Bowes
Group Manager Proposals
Justine Campbell
Chief Financial Officer
Mr. Terence Hemsworth joined our
Group in 2010 and is responsible for
the management and coordination
of our Henderson facility which
encompasses fabrication, modular
assembly and surface treatment
operations of the Group.
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, resources and
infrastructure sectors in Australia, the
United Kingdom, South Africa, New
Zealand, Singapore and Malaysia.
Mr. Rodney John Bowes joined our
Group in 2010 and is responsible
for managing the Group’s business
development and tendering activities.
Prior to joining our Group, Mr. Bowes
held the role of General Manager
(Marketing and Proposals), where he
was in charge of the management
of the Business Development,
Marketing and Estimating
departments. Mr. Bowes brings
more than 20 years’ experience and
subsequent knowledge to this role.
Ms. Justine Campbell joined our
Group in October 2014 and is
responsible for all financial and risk
management operations including
the development of financial
strategies, developing and
monitoring of control systems.
Having previously held positions
of CFO and Company
Secretary with a ASX200
Listed Company, she has
spent more than 15
years overseeing major
acquisitions and
implementing
numerous systems.
30 CIVMEC | ANNUAL REPORT 2015
30 CIVMEC | ANNUAL REPORT 2015
PHOTO: The team at Nammuldi after the successful installation of the train loadout bin.
ANNUAL REPORT 2015 | CIVMEC 31
ANNUAL REPORT 2015 | CIVMEC 31
CAPITALISING ON
OPPORTUNITIES
THROUGH
DIVERSIFICATION
FINANCIAL REPORT
CONTENTS
CIVMEC LIMITED AND ITS SUBSIDIARIES 30TH JUNE 2015
Report of the Directors
Statement by Directors
Report on Corporate Governance
Corporate Registry
Independent Auditors’ Report
Consolidated Income Statement
Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Notice of Annual General Meeting
Proxy Form
34
39
40
53
54
55
56
57
58
59
99
105
ANNUAL REPORT 2015 | CIVMEC 33
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 2015 and the statement of financial position of the Company as at 30 June 2015.
1. DIRECTORS
The Directors of the Company in office at the date of this report are as follows:
Mr. James Finbarr Fitzgerald
Executive Chairman
Mr. Patrick John Tallon
Mr. Kevin James Deery
Mr. Chong Teck Sin
Chief Executive Officer
Chief Operating Officer
Lead Independent Director
Mr. Wong Fook Choy Sunny
Independent Director
Mr. Douglas Owen Chester
Independent Director
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
“Shares” in this report on page 34 and 35.
3. DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES
The interests of the Directors holding office at the end of the financial year in the share capital of the Company and
related corporations as recorded in the register of Directors’ shareholdings were as follows:
Holdings registered in the name
of Directors
Holdings in which a Director is
deemed to have an interest
At 1.7.14
At 30.6.15
At 1.7.14
At 30.6.15
The Company
Mr. James Finbarr Fitzgerald
Mr. Patrick John Tallon
Mr. Kevin James Deery
-
-
-
No. of Ordinary shares
-
-
-
97,620,806
97,620,806
97,620,806
97,620,806
13 ,710,000
13 ,295,250
There was no change in any of the above-mentioned interests between the end of the financial year and 21 July 2015.
Except as disclosed in this report, no Director who held office at the end of the financial year had interests in shares, share
options, warrants or debentures of the Company, or of related corporations, either at the beginning of the financial year, or
date of appointment, if later or at the end of the financial year.
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 notes to the financial statements.
5. SHARE OPTIONS
Civmec Limited Employee Share Option Scheme
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.
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.
34 CIVMEC | ANNUAL REPORT 2015
REPORT OF THE DIRECTORS (cont’d)
5. SHARE OPTIONS (CONT’D)
Civmec Limited Employee Share Option Scheme (cont’d)
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.
(ii) Size of the Scheme
The aggregate number of new Shares in respect of which Options may be granted on any date under the
CESOS, when added to (i) the number of new Shares issued and issuable in respect of all Options granted
thereunder, and (ii) all new Shares issued and issuable pursuant to any other share-based incentive schemes
of our Company, shall not exceed 15% of the number of issued Shares on the day immediately preceding the
relevant Date of Grant (or such other limit as the SGX-ST may determine from time to time).
(iii) Options, Exercise Period and Exercise Price
The Options that are granted under the Scheme may have exercise prices that are, at the Committee’s
discretion, set at a price as quoted on the Singapore Exchange for five market days immediately preceding the
date of grant (the “Market Price”) equal to the weighted average share price of the shares for the last trading
day immediately preceding the relevant date of grant of the option or at a discount to the Market Price (subject
to a maximum discount of 20%). Options which are fixed at the Market Price (“Market Price Option”) may be
exercised after the first anniversary of the date of grant of that option while options exercisable at a discount
to the Market Price (“Incentive Option”) may only be exercised after the second anniversary from the date of
grant of the option. The vesting of the options is conditional on the key Management personnel or employees
completing another two years of service to the Group and the Group achieving its targets of profitability and
sales growth once the options are vested, they are exercisable for a period of three years.
(iv) Grant of Options
Under the rules of the Scheme, there are no fixed periods for the grant of options. As such, offers for the grant
of options may be made at any time, from time to time at the discretion of the Committee.
In addition, in the event that an announcement on any matter of an exceptional nature involving unpublished
price sensitive information is imminent, offers may only be made after the second market day from the date on
which the aforesaid announcement is made.
(v) Termination of Options
Special provisions in the rules of the Scheme deal with the lapse or earlier exercise of Options in circumstances
which include the termination of the participant’s employment in the Company, the bankruptcy of the participant,
the death of the participant, a take-over of the Company and the winding-up of the Company.
(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.
ANNUAL REPORT 2015 | CIVMEC 35
REPORT OF THE DIRECTORS (cont’d)
5. SHARE OPTIONS (CONT’D)
Civmec Limited Employee Share Option Scheme (cont’d)
Principal terms of the Scheme (cont’d)
(vii) Duration of the Scheme
The Scheme shall continue in operation for a maximum duration of 10 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
As at 30 June 2015, the following options to subscribe for ordinary shares of the Company pursuant to the CESOS
were granted:
Date of grant
Exercise period
Expiry date
Number of options
11 September 2013
12 September 2014 to
10 September 2023
10 September 2023
6,000,000
The options granted by the company do not entitle the holder of the options, by virtue of such holding, to any right to
participate in any share issue of any other company.
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
Details of all the options to subscribe for ordinary shares of the Company pursuant to the CESOS, outstanding as at 30
June 2015 are as follows:
Expiry date
Exercise price
Number of options
11 September 2023
$0.65
6,000,000
6. PERFORMANCE SHARE PLAN
Civmec Limited Performance Share Plan
The Civmec Limited Performance Share Plan ( the“CPSP”) for key Management personnel and employees of the
Group was approved and adopted by shareholders at the Annual 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 Scheme
(i) Participants
Under the rules of the Scheme, employees including Executive Directors and Associated Company Employees,
who are not Controlling Shareholders or their associates, are eligible to participate in the Scheme.
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 Civmec Performance Share Plan, 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.
36 CIVMEC | ANNUAL REPORT 2015
REPORT OF THE DIRECTORS (cont’d)
6. PERFORMANCE SHARE PLAN (CONT’D)
Civmec Limited Performance Share Plan (cont’d)
Principal terms of the Scheme (cont’d)
(ii) Size of the Scheme
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
Civmec Employee Share Option Scheme, 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).
(iii) Grant of Awards
Under the rules of the Plan, 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 Plan 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 Remuneration Committee (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 Plan
The Plan shall continue in operation for a maximum duration of 10 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 Scheme
The details of the awards granted under the Scheme during the financial year are as follows:
Year of Award
No. of holders
No. of shares
Nil
-
-
7. AUDIT COMMITTEE
The members of the Audit Committee (“AC”) at the end of the financial year are as follows:
Mr. Chong Teck Sin
Mr. Wong Fook Choy Sunny
Mr. 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.
ANNUAL REPORT 2015 | CIVMEC 37
REPORT OF THE DIRECTORS (cont’d)
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
On behalf of the Board of Directors
James Finbarr Fitzgerald
James Finbarr Fitzgerald
Chairman
Patrick John Tallon
Patrick John Tallon
Director
Singapore
20 August 2015
38 CIVMEC | ANNUAL REPORT 2015
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
set out on pages 57 - 60 are drawn up so as to give a true and fair view of the financial position of the
Company and of the Group as at 30 June 2015 and the financial performance, changes in equity and cash
flows of the Group for the financial year ended; and
(b) at the date of this statement, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they fall due.
On behalf of the Board of Directors
James Finbarr Fitzgerald
James Finbarr Fitzgerald
Chairman
Chairman
Patrick John Tallon
Patrick John Tallon
Director
Singapore
20 August 2015
ANNUAL REPORT 2015 | CIVMEC 39
REPORT ON CORPORATE GOVERNANCE
INTRODUCTION
The Board of Directors (the “Board”) and the Management of Civmec Limited (“Civmec” or the “Company”) together
with its subsidiaries (the “Group”), recognise the importance of good corporate governance in ensuring transparency,
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 corporate governance report (“Report) describes the Company’s corporate governance practices that were in
place during the financial year ended 30 June 2015 (“FY2015”) with specific reference to the Principles of the Code
of Corporate Governance 2012 (the “Code”).
In line with the commitment of the Company to maintaining high standards of corporate governance, the Company
will continually review its corporate governance processes to strive to fully comply with the Code.
The Board is pleased to report compliance of the Company with the Code and the Listing Manual of the Singapore
Exchange Securities Limited (the “SGX-ST”) where applicable except where otherwise stated.
BOARD’S CONDUCT OF AFFAIRS
Principle 1: Effective Board to lead and control the Company. The Board is collectively responsible for the
long-term success of the Company. The Board works with Management to achieve this objective and the
Management remains accountable to the Board.
The primary role of the Board is to protect and enhance long-term shareholders’ value and to ensure that the
Company is run in accordance with best international Management and corporate governance practices, appropriate
to the needs and growth of the Company.
Apart from its statutory duties and responsibilities, the Board oversees the Management and affairs of the Group and
approves the Group’s corporate strategy and directions. The Board is also responsible for implementing policies in
relation to financial matters, which include risk Management and internal control and compliance. In addition,
the Board reviews the financial performance of the Group, approves investment proposals and sets values and
standards for the Company and the Group.
The Board has delegated the day-to-day Management of the Group to Management headed by the Executive
Chairman, Mr. James Finbarr Fitzgerald, the Chief Executive Officer, Mr. Patrick John Tallon and the Chief Operating
Officer, Mr. Kevin James Deery. Matters that are specifically reserved for the approval of the Board include,
among others:
• Reviewing the adequacy and integrity of the Group’s internal controls, risk Management systems compliance and
financial reporting systems;
• Approving the annual budgets and business plans;
• Approving any major investment or expenditure;
• Approving material acquisitions and disposal of assets;
• Approving the Company’s periodic and full-year results announcements for release to the SGX-ST;
• Approving annual report and audited financial statements;
• Monitoring Management’s performance;
• Recommending share issuance, dividend payments and other returns to shareholders;
•
Ensuring accurate, adequate and timely reporting to, and communication with, Shareholders; and
• Assuming responsibility for corporate governance.
The Company has adopted a policy on signing limits, setting out the level of authorisation required for specific transactions,
including those that require Board approval.
All Board members are actively engaged, and play an important role, in ensuring good corporate governance within
the Company. Visits to the Company’s business premises are also arranged to acquaint the non-executive Directors
with the Company’s operations and ensure that the Directors are familiar with the Company’s business, policies and
governance practices.
The profile of each Director is presented in the section headed “Board of Directors” of this Annual Report.
40 CIVMEC | ANNUAL REPORT 2015
REPORT ON CORPORATE GOVERNANCE (cont’d)
BOARD’S CONDUCT OF AFFAIRS (CONT’D)
Principle 1: Effective board to lead and control the Company. The Board is collectively responsible for the
long-term success of the Company. The Board works with Management to achieve this objective and the
Management remains accountable to the Board. (cont’d)
The Directors have access to the Company Secretary and Management. They may also seek independent
professional advice concerning the Company’s affairs when necessary. Prior to their respective appointments to
the Board, each of the Directors was given an orientation and induction programme, so as to familiarise them with
the Company’s business activities, strategic directions, policies and key new projects. In addition, newly appointed
Directors are also introduced to the senior Management team. Upon appointment of each Director, the Company
will provide a letter to the Director setting out the Director’s duties and obligations.
To assist in the execution of its responsibilities, the Board has established several Board Committees namely:
Audit Committee (“AC”), Nominating Committee (“NC”), Remuneration Committee (“RC”) and Risks and Conflicts
Committee (“RCC”). These committees function within clearly defined terms of references and operating procedures,
which are reviewed on a regular basis. The effectiveness of these committees is also constantly monitored and
reviewed by the Board. The roles and responsibilities of these committees are provided for in the latter sections of
this report.
The Board meets on a regular basis, and as when necessary, to address any specific significant matters that may
arise. Board meetings are scheduled in advance. The Articles of Association of the Company provide for Directors
to conduct meeting by teleconferencing or video conferencing 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 the financial
year ended 30 June 2015 (“FY2015”) is set out below:
Board Committees
Board
Audit
Committee
Remuneration
Committee
Nominating
Committee
Risks and
Conflicts
Committee
No. of Meetings Held
4
4
2
No. of Meetings Attended
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Wong Fook Choy Sunny
Douglas Owen Chester
* Not Applicable
4
4
4
4
4
4
N/A
N/A
N/A
4
4
4
N/A
N/A
N/A
2
2
2
2
N/A
N/A
N/A
2
2
2
4
N/A
N/A
N/A
4
4
4
All Directors are updated regularly on changes in the Company’s policies and are provided briefings from time to time
and are kept updated on relevant new laws and regulations including Directors’ duties and responsibilities, corporate
governance and financial reporting standards. Newly appointed Directors will be given briefings by the Management
on the business activities of the Group. The Directors may also attend other training, conference and seminars which
may have a bearing on their duties and contribution to the Board, organised by the professional bodies, regulatory
institutions and corporations at the Company’s expense, to keep themselves updated on the latest developments
concerning the Group and to keep abreast of the latest regulatory changes. During the year, the Board was briefed
and/or updated on recent changes to accounting standards and industry developments and business initiatives.
ANNUAL REPORT 2015 | CIVMEC 41
REPORT ON CORPORATE GOVERNANCE (cont’d)
BOARD COMPOSITION AND GUIDANCE
Principle 2: Strong and independent element on the Board.
The Board comprises six (6) Directors, three (3) of whom are Executive Directors and the remaining three (3)
Directors being Independent Directors. No individual or group of individuals dominates the Board’s decision making.
The Company has adopted the 2012 Code’s definition of “Independent Director” and its guidance in respect of
relationships which would deem a Director to be regarded as non-independent. This composition exceeds the
Code’s requirement of at least one-third of the Board of Directors to comprise Independent Directors.
The Board is of the view that the current Board comprises persons who, as a group, provide core competencies
necessary to meet the Company’s requirements. The profile of the Directors is set out on pages 30 of this
annual report.
The independence of each Director is reviewed annually by the NC in accordance with 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 declaration, which is drawn up based on the definitions and guidelines
set forth in Guideline 2.1 in the Code, requires each Director to assess whether he considers himself independent and
not having any of the relationships identified in the Code. The NC has reviewed and determined that the Independent
Directors are independent. None of the Independent Directors has served on the Board beyond nine years from the
date of his first appointment. The Board reviews the size of the Board on an annual basis, and considers the present
Board size as appropriate for the current scope and nature of the Group’s operations.
In order to strengthen the independence of the Board, the Company has appointed a Lead Independent Director,
Mr. Chong Teck Sin, to coordinate and lead the Independent Directors and to provide a non-executive perspective
and to bring about a healthy balance of viewpoints.
The Non-Executive Independent Directors provide constructive review and assist the Board to facilitate and develop
proposals on strategy and monitor the performance of the Management in meeting agreed objectives. The non-
executive Directors have full access to and cooperation from the Company’s Management and officers. They have full
discretion to have separate meetings without the presence of Management and to invite any Directors or officers to
the meetings as and when warranted.
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
Principle 3: Clear division of responsibilities between the leadership of the Board and the executives
responsible for managing the company’s business. Chairman and Chief Executive Officer to be separate
persons to ensure appropriate balance of power, increased accountability and greater capacity of the
Board for independent decision makings.
Mr. James Finbarr Fitzgerald is the Executive Chairman of the Company, while Mr. Patrick John Tallon is the Executive
Director and Chief Executive Officer (“CEO”).
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
day-to-day business. The Executive Chairman and the Chief Executive Officer are not related.
The Chairman ensures that Board meetings are held when necessary and approves the agenda in consultation
with other Directors. The Chairman ensures that Board members are provided with complete, accurate and timely
information on a regular basis to enable them to be fully cognisant of the affairs of the Company.
BOARD MEMBERSHIP
Principle 4: There should be a formal and transparent process for the appointment and re-appointment of
Directors to the Board.
The Company had established a NC to make recommendations to the Board on all board appointments. The NC
comprises of three (3) members all of whom, including the NC Chairman, are Independent Non-Executive Directors:
Mr. Douglas Owen Chester – Chairman
Mr. Chong Teck Sin - Member
Mr. Wong Fook Choy Sunny - Member
42 CIVMEC | ANNUAL REPORT 2015
REPORT ON CORPORATE GOVERNANCE (cont’d)
BOARD MEMBERSHIP (CONT’D)
Principle 4: There should be a formal and transparent process for the appointment and re-appointment of
Directors to the Board. (cont’d)
According to the written terms of reference of the NC, the NC performs the following functions:
(i) nominate Director(s) (including Independent Directors) taking into consideration each Director’s competencies,
contribution, performance and ability to commit sufficient time and attention to the affairs of our Group taking into
account the Directors’ respective commitments outside our Group;
(ii) review and recommend to the Board the composition of the Audit Committee, Remuneration Committee and
Risks and Conflicts Committee;
(iii) re-nominate Directors for re-election in accordance with the Articles of Association at each annual general
meeting and having regard to the Director’s contribution and performance;
(iv) determine annually whether or not a Director of the Company is independent;
(v) decide whether or not a Director is able to and has been adequately carrying out his duties as a Director;
(vi) assess the performance of the Board as a whole and contribution of each Director to the effectiveness of
the Board;
(vii) review and recommend succession plans for Directors, in particular, the Chairman and the CEO; and
(viii) review and recommend training and professional development programs for 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;
If required, the NC may engage consultants to undertake research on, or assess, candidates for new positions on
the Board;
the NC meets with shortlisted candidates to assess their suitability and ensure that the candidates are aware of the
expectations; and
•
the NC makes recommendations to the Board for approval.
Pursuant to Article 118 of the Company’s Articles of Association, all the Directors are required to retire from office at
every Annual General Meeting (“AGM”) of the Company.
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 at the forthcoming AGM:
1. James Finbarr Fitzgerald
2. Patrick John Tallon
3. Kevin James Deery
4. Chong Teck Sin
5. Wong Fook Choy Sunny
6. Douglas Owen Chester
Having considered the inconvenience of retirement and re-election of all Directors at each AGM, the NC has
proposed and the Board has agreed to recommend amendment to the existing Article 118 of the Company’s Articles
of Association. The revised Article requires at least one third of the Directors for the time being to retire from office by
rotation at each AGM and all Directors must retire at least once every three (3) years. The proposed amendment is
also to be in line with the market practice where one third of the Board members retire at each AGM. The Company
will seek shareholders’ approval of the aforesaid amendment at the forthcoming AGM.
ANNUAL REPORT 2015 | CIVMEC 43
REPORT ON CORPORATE GOVERNANCE (cont’d)
BOARD MEMBERSHIP (CONT’D)
Principle 4: There should be a formal and transparent process for the appointment and re-appointment of
Directors to the Board. (cont’d)
For the year under review, the NC held two (2) meetings and evaluated the Board’s performance as a whole and the
contribution of each Director to the effectiveness of the Board. The NC has adopted a formal process and criteria to
assess the effectiveness of the Board and each of the Directors. The evaluation is carried out annually.
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 decision to consider the appointment of the
Independent Director into the principal subsidiaries, if necessary.
In November 2014, Mr. Chong Teck Sin was appointed as an Independent Director to the Group’s newly incorporated
subsidiary Civmec Construction & Engineering Singapore Pte Ltd.
The Company does not have a practice of appointing alternate Directors.
The date of each Director’s initial appointment, last re-election and their Directorships are set out below:
Name of Director
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Date of Initial
Appointment
Date of Last
Re-election
27 Mar 2012
27 Mar 2012
27 Mar 2012
27 Mar 2012
28 Oct 2014
28 Oct 2014
28 Oct 2014
28 Oct 2014
Wong Fook Choy Sunny
27 Mar 2012
28 Oct 2014
Douglas Owen Chester
2 Nov 2012
28 Oct 2014
* Within the past three years
Notes:
(1)
(2)
Listed on Hong Kong Stock Exchange
Listed on Australian Securities Exchange
Present
Directorships in
Listed Companies
Past
Directorships
in Listed
Companies*
-
-
-
AVIC International
Maritime Holdings Limited
Changan Minsheng APLL
Logistics Co., Ltd (1)
InnoTeck Limited
Accordia Golf Trust
Mencast Holdings Ltd
KTL Global Ltd
Albedo Limited
Excelpoint Technology
Ltd
InnoTeck Limited
Stamford Land
Corporation Limited
Kim Heng Offshore &
Marine Holdings Limited
-
-
-
Blackgold
International Holdings
Limited (2)
-
-
The NC has considered and taken the view that it would not be appropriate to set a limit on the number of listed
company Directorships that a Director may hold because Directors have different capabilities. The nature of the
organisations in which they hold appointments and the committees on which they serve are of different complexities,
and accordingly, each Director would personally determine the demands of his competing Directorships and
obligations and assess the number of listed company Directorships they could hold and serve effectively. Currently,
none of the Directors hold more than five (5) Directorships in other listed companies. The NC is satisfied that sufficient
time and attention have been devoted by the Directors to the affairs of the Company and the Group, notwithstanding
that some of the Directors have multiple board representations. The NC will continue to review from time to time, the
Board representations and other principal commitments to ensure that Directors continue to meet the demands of
the Group and are able to discharge their duties adequately.
44 CIVMEC | ANNUAL REPORT 2015
REPORT ON CORPORATE GOVERNANCE (cont’d)
BOARD PERFORMANCE
Principle 5: Formal annual assessment of the effectiveness of the Board as a whole and its board
committees and the contribution by each Director to the effectiveness of the Board.
The NC undertakes an annual formal review and evaluation of both the Board’s performance as a whole, as well
as individual Director’s performance, such as board commitment, standard of conduct, competency, training and
development and interaction with Directors, Management and stakeholders.
All Directors complete an evaluation questionnaire designed to seek their view on the various aspects of their
individual and the Board performance so as to assess the overall effectiveness of the Board.
The completed questionnaires are collated by the Company Secretary and the results of the evaluation exercise are
considered by the NC, which makes recommendations to the Board, aimed at assisting the Board to discharge its
duties more effectively. The Chairman of the Board may take actions as may be appropriate according to the results
of the performance evaluation, which will be based on objective performance criteria proposed by the NC and
approved by the Board.
The Board holds the view that there is a direct relationship between the performance of the Group and that of the
Board. The NC is satisfied that despite some of the Directors having board representations in other non-Group
companies, the Directors are able to and have adequately carried out their duties as Directors of the Company.
Each member of the NC abstains from voting on any resolutions and making any recommendations and/or
participating in any deliberations of the NC in respect of the assessment of their performance and re-nomination
as a Director.
The NC has conducted a performance evaluation of the Board and Board Committees for FY2015 and determined
that all Directors has demonstrated full commitment to their roles and contributed effectively to discharge
their duties.
ACCESS TO INFORMATION
Principle 6: Board members should be provided with complete, adequate and timely information prior to
board meetings and on an ongoing basis.
The Board has separate and independent access to the senior Management of the Company and the Company
Secretaries at all times. Request for information are dealt with promptly by Management. The Board is informed of
all material events and transactions as and when they occur. The Management consults Board members as
necessary and appropriate. Detailed board papers, agenda and related material, background or explanatory
information relating to matters to be discussed are sent out to the Directors prior to each meeting so that all
Directors may better understand the issues beforehand, allowing more time at such meetings for questions and
deliberations that the Directors may have.
The Company Secretaries administer and are available to attend all Board meetings, and assist the Chairman
in implementing appropriate Board procedures to facilitate compliance with the Company’s Memorandum and
Articles of Association. The Company Secretaries also ensure that the requirements of the Companies Act (Chapter
50), Listing Manual and other governance matters applicable to the Company are complied with. The Company
Secretaries work together with 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 and at the Company’s expense, appoint independent professionals to render advice.
REMUNERATION MATTERS
Principle 7: The policy on executive remuneration and for fixing remuneration packages of individual
Directors should be formal and transparent. No Director should be involved in deciding his own
remuneration.
The Company has established a RC to make recommendations to the Board on remuneration packages of individual
Directors and key Management personnel. The RC comprises of three (3) members, all of whom including the RC
Chairman are Independent Non-Executive Directors:
Mr. Wong Fook Choy Sunny – Chairman
Mr. Chong Teck Sin - Member
Mr. Douglas Owen Chester – Member
ANNUAL REPORT 2015 | CIVMEC 45
REPORT ON CORPORATE GOVERNANCE (cont’d)
REMUNERATION MATTERS (CONT’D)
Principle 7: The policy on executive remuneration and for fixing remuneration packages of individual
Directors should be formal and transparent. No Director should be involved in deciding his own
remuneration. (cont’d)
According to the written terms of reference of the RC, the functions of the RC are as follows:
(i) recommend to the Board a framework of remuneration for the Directors and key Management personnel;
(ii) determine specific remuneration packages for each Executive Director;
(iii) 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
(iv) perform such other acts as may be required by the SGX-ST and the Code from time to time.
The recommendations of the RC are submitted for endorsement by the entire Board. Each member of the RC shall abstain
from voting on any resolutions in respect of their own remuneration package. Also, in the event that a member of the RC is
related to the employee under review, they 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 Management personnel covering all aspects
of remuneration including but not limited to Directors’ fees, salaries, allowances, bonuses, incentive schemes and
benefits-in-kind.
The RC also oversees the administration of the Civmec Employee Share Option Scheme (“Civmec ESOS”) and Civmec
Performance Share Plan (“Civmec PSP”) upon the terms of reference as defined in the Civmec ESOS and Civmec PSP.
Both the Civmec ESOS and Civmec PSP were established on 27 March 2012 and 25 October 2013 respectively with a 10
year tenure commencing on the establishment date.
The RC has access to expert professional advice on human resource and remuneration matters whenever there is a need
to consult externally.
The RC reviews the fairness and reasonableness of the termination clauses of the service agreements of Executive
Directors to ensure that such contracts of service contain fair and reasonable termination clauses which are not overly
generous, with an aim to be fair and avoid rewarding poor performance.
The RC is of the view that it is currently not necessary to use contractual provisions to allow the Company to reclaim
incentive components of remuneration from the Executive Directors and key Management personnel in exceptional
circumstances of misstatement of financial statements, or of misconduct resulting in financial loss to the Company
and the Group.
Principle 8: The level of remuneration should be aligned with the long-term interest and risk policies of
the company, and should be appropriate to attract, retain and motivate (a) the Directors to provide good
stewardship of the company, and (b) key Management personnel to successfully manage the company.
However, companies should avoid paying more than is necessary for this purpose.
In making its recommendations to the Board on the level and mix of remuneration, the RC strives to be competitive,
linking rewards with performance. It takes into consideration the essential factors to attract, retain and motivate
the Directors and senior Management needed to run the Company successfully, linking rewards to corporate and
individual performance, and aligning their interest with those of the shareholders.
The Executive Directors and key Management personnel 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 Civmec ESOS and Civmec PSP, are in place to strengthen
the pay-for-performance framework by rewarding and recognising the key executives’ contributions to the growth of
the Company. This is designed to align remuneration with the interests of shareholders and link rewards to corporate
and individual performance so as to promote the long-term sustainability of the Group.
The Company has renewed the service agreements with the Executive Directors, Mr. James Finbarr Fitzgerald, Mr. Patrick
John Tallon and Mr. Kevin James Deery. Each service agreement has been agreed by the RC and is valid for a further three
(3) years with effect from the date of the expiry of the initial period. During the renewal period of three (3) years, either party
may terminate the Service Agreement at any time by giving to the other party not less than six (6) months’ notice in writing,
or in lieu of notice, payment of amount equivalent to six (6) months’ salary. The Executive Directors do not receive
Directors’ fees.
46 CIVMEC | ANNUAL REPORT 2015
REPORT ON CORPORATE GOVERNANCE (cont’d)
REMUNERATION MATTERS (CONT’D)
Principle 8: The level of remuneration should be aligned with the long-term interest and risk policies of
the company, and should be appropriate to attract, retain and motivate (a) the Directors to provide good
stewardship of the company, and (b) key Management personnel to successfully manage the company.
However, companies should avoid paying more than is necessary for this purpose. (cont’d)
The Executive Directors and key Management personnel remuneration packages are based on service contracts
and their remuneration is determined having due regard to the performance of the individuals, the Group as well as
market trends.
The remuneration of the Independent Directors is in the form of a fixed fee which will be subject to shareholders’ approval
at the AGM. Each member of the RC abstains from voting on any resolution, participating in any deliberation of the RC,
and making any recommendation in respect of their remuneration.
Principle 9: Clear disclosure on remuneration level and mix of remuneration, and the procedure for setting
remuneration in the Company’s annual report.
For competitive reasons, the Company does not disclose remuneration of each individual Director for the financial
year ended 30 June 2015. Instead, the Company discloses the bands of remuneration as follows:
Remuneration band and
Name of Director
Salary
Bonus
Directors’
Fees
Allowances
and Other
Benefits
S$500,000 to S$750,000
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Below S$250,000
Chong Teck Sin
Douglas Owen Chester
Wong Fook Choy Sunny
87%
87%
86%
-
-
-
-
-
-
-
-
-
-
-
-
100%
100%
100%
13%
13%
14%
Total
100%
100%
100%
100%
100%
100%
Details of remuneration paid to key Management personnel (who are not Directors of the Company) of the Group for
the financial year ended 30 June 2015 are set out below. For competitive reasons, the Company discloses only the
band of remuneration of each Management personnel as follows:
Remuneration band and
Name of Key Executive
S$500,000 to S$750,000
Designation
Salary
Bonus
Allowances
and Other
Benefits
-
-
-
-
-
S$250,000 to S$499,999
Justine Campbell (1)
Terence Hemsworth
Rodney John Bowes
Ian Anthony Criddle (2)
Below S$250,000
Wil Cuperus (3)
Chief Financial Officer
Henderson Operations
Manager
Proposals Manager
General Manager
South East Asia
86%
85%
86%
78%
-
-
-
-
14%
15%
14%
22%
Chief Financial Officer
70%
12%
18%
100%
(1)
(2)
(3)
Ms. Justine Campbell was appointed to the Company on 1 October 2014
Mr. Ian Criddle was appointed to the Company on 24 October 2014
Mr. Wil Cuperus resigned from the Company on 30 September 2014
.
ANNUAL REPORT 2015 | CIVMEC 47
Total
-
100%
100%
100%
100%
REPORT ON CORPORATE GOVERNANCE (cont’d)
REMUNERATION MATTERS (CONT’D)
Principle 9: Clear disclosure on remuneration level and mix of remuneration, and the procedure for setting
remuneration in the Company’s annual report. (cont’d)
The annual aggregate remuneration paid to all the above mentioned Directors and key Management personnel of the
Group is S$3,330,859 in FY2015.
Apart from Thomas Tallon, being the brother of Patrick Tallon, the CEO who holds the position of “Supervisor –
Construction” with a remuneration of S$200,000 to S$250,000 for FY2015, the Company does not have any
employees who are immediate family members of a Director or CEO during FY2015. The RC 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 Civmec PSP and Civmec ESOS can be found on page 34, in the “Report by the
Directors” in the “Financials” section of this Annual Report.
ACCOUNTABILITY AND AUDIT
Principle 10: The Board should present a balanced and understandable assessment of the Company’s
performance, position and prospects.
The Management has provided all members of the Board with Management Accounts, and sundry reports together
with such explanation and information on a quarterly basis, and as the Board may require from time to time enabling
the Board to make a balanced and understandable assessment of the Company’s performance, position and
prospects. The Board is mindful of its obligations to furnish timely information to its shareholders, the public and
regulators and to ensure full disclosure of material information to its shareholders in compliance with the statutory
requirements and the Listing Manual.
Price sensitive information was publicly released either before the Company meets with any of the Company’s
investors or analysts or simultaneously with such meetings. Financial results and corporate announcements of the
Company are disseminated through announcements via SGXNET.
Principle 11: Maintains a sound system of risk Management and internal controls to safeguard the
shareholders’ interests 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 its assets. Procedures are in
place to identify major business risks and to 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 control, including financial, operational, compliance, information technology controls as well
as risk Management systems 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 and RCC.
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 in place throughout the financial year and up to the date of this report provides
reasonable, but not absolute, assurance against material financial misstatements or losses, and includes the
safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information,
compliance with appropriate legislation, regulations and best practices, and the identification and containment of
financial, operational and compliance risks. Based on the risk Management and internal control systems established
and implemented by the Group, and work conducted by the internal auditors, external auditors and our internal audit
team, the Board, with the concurrence of the AC, is of the opinion that the Company’s system of internal controls
and risk Management procedures maintained by the Group are adequate and effective to meet the needs of the
Company in addressing the financial, operational, compliance, information technology controls and risk Management
systems in the Group’s current business environment pursuant to Listing Rule 1207 (10) of the Listing Manual.
The Board has received assurances from the CEO and Chief Financial Officer:
(i)
that the financial records have been properly maintained and the financial statements give a true and fair view of
the Company’s operations and finances; and
(ii)
that the Company’s risk Management and internal control systems are adequate and effective.
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.
48 CIVMEC | ANNUAL REPORT 2015
REPORT ON CORPORATE GOVERNANCE (cont’d)
ACCOUNTABILITY AND AUDIT (CONT’D)
Principle 12: Establish an Audit Committee with written terms of reference which clearly set out its
authority and duties.
The AC comprises all the three (3) Non-Executive Independent Directors namely Mr. Chong Teck Sin, Mr. Douglas
Owen Chester and Mr. Wong Fook Choy Sunny. The AC is chaired by Mr. Chong Teck Sin.
The Board ensures that the members of the AC are appropriately qualified to discharge their responsibilities and they
possess the requisite accounting and financial Management expertise and experience.
The AC is governed by the terms of reference with its primary responsibilities highlighted as follows:
(i)
to assist the Board in discharging its responsibility to safeguard the Group’s assets, maintain adequate
accounting records, and develop and maintain effective systems of internal control with the overall objective of
ensuring that our Management creates and maintains an effective control environment in the Group;
(ii)
to provide a channel of communication between the Board, the Management team, the external auditors and
internal auditors on matters relating to audit;
(iii) to monitor Management’s commitment to the establishment and maintenance of a satisfactory control
environment and an effective system of internal control (including any arrangements for internal audit);
(iv) to monitor and review the scope and results of external audit and its cost effectiveness and the independence
and objectivity of the external auditors; and
(v)
to monitor and review the scope and results of internal audit and its cost effectiveness of the internal auditors.
In addition, the functions of the AC shall be as follows:
(i) 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;
(ii)
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;
(iii) review the quarterly, and annual financial statements and any formal announcements relating to our 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;
(iv) review the internal control and procedures and ensure coordination 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 our Management where necessary);
(v)
review and consider the appointment or re-appointment of the external auditors and matters relating to
resignation or dismissal of the auditors;
(vi) review and consider the appointment or re-appointment of the internal auditors and matters relating to
resignation or dismissal of the auditors;
(vii) review interested person transactions (if any) falling within the scope of Chapter 9 of the Listing Manual;
(viii) review the Groups’ hedging policies, procedures and activities (if any) and monitor the implementation of the
hedging procedure/policies, including reviewing the instruments, processes and practices in accordance with any
hedging polices approved by the Board;
(ix) review potential conflicts of interest, if any, and to set out a framework to resolve or mitigate such potential
conflicts of interests;
(x) 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;
ANNUAL REPORT 2015 | CIVMEC 49
REPORT ON CORPORATE GOVERNANCE (cont’d)
ACCOUNTABILITY AND AUDIT (CONT’D)
Principle 12: Establish an Audit Committee with written terms of reference which clearly set out
itsauthority and duties. (cont’d)
(xi) 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 our Group’s operating results or financial
position, and our Management’s response thereto;
(xii) 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;
(xiii) review the effectiveness and adequacy of the administrative, operating, internal accounting and financial
control procedures;
(xiv) 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;
(xv) review our 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; and
(xvi) 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 cooperation of and complete access to the Company’s Management. It has full discretion to invite
any Director or executive officer to attend the meetings, and has been given reasonable resources to enable the
discharge of its functions.
As at the Report date, the AC has:
(i)
reviewed the scope of work of the external auditors;
(ii)
reviewed the scope of work of the internal auditors;
(iii) reviewed audit plans and discussed the results of the respective findings and their evaluation of the Company’s
system of internal accounting controls;
(iv) reviewed the interested person transactions of the Company;
(v) met with the Company’s external auditors and internal auditors without the presence of Management;
(vi) reviewed the external auditors’ independence and objectivity; and
(vii) 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 having reviewed the external auditors’ non-audit services, 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 monetary consideration.
The aggregate amount of agreed fees to be paid to the external auditors Moore Stephens LLP and Moore Stephens
Pty Ltd for FY2015 is S$273,124 which comprises of audit fees of S$228,977 and S$44,147 non-audit fees. The AC
has recommended to the Board the re-appointment of Moore Stephens LLP as the Company’s external auditors at
the forthcoming AGM.
The Company confirms that Rules 712 and 715 of the Listing Manual have been complied with.
The Company has established the whistle-blowing policy where staff of the Group may, in confidence, raise concerns
about possible improprieties in matters of financial reporting, fraudulent acts and other matters, and ensure that
arrangements are in place for independent investigations of such matters and for appropriate follow up actions.
50 CIVMEC | ANNUAL REPORT 2015
REPORT ON CORPORATE GOVERNANCE (cont’d)
As of to-date there was no report received through the whistle-blowing mechanism.
ACCOUNTABILITY AND AUDIT (CONT’D)
Principle 13: Establish an effective internal audit function that is adequately resourced and 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 the
Company’s assets.
The Company’s internal audit function is outsourced to Deloitte Touche Tohmatsu, who is independent of the
Company’s business activities. The internal auditors conduct audit based on the standards set by internationally
recognised professional bodies. The annual 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. The AC reviews the adequacy and effectiveness of the internal audit function quarterly.
The role of the Internal Auditors is to support the AC in ensuring that the Group maintains a sound system of internal
controls by monitoring and assessing the effectiveness of key controls and procedures, conducting in-depth audits
of high risk areas and undertaking investigations as directed by the AC.
The Company has a Risks and Conflicts Committee and it reviews all significant control policies and procedures
and highlights all significant risk matters to the Board for discussions and to take appropriate actions, if required.
The Company’s external auditors also conduct annual reviews of the effectiveness of the Group’s material internal
controls for financial reporting in accordance with the scope as laid out in their audit plans.
The AC is satisfied with the effectiveness of the existing internal control systems put in place by the Management to
meet the needs of the Group in its current business environment.
SHAREHOLDERS’ RIGHTS AND RESPONSIBILITIES
Principle 14: Companies should treat all shareholders fairly and equitably, and should recognise,
protect and facilitate the exercise of shareholders’ rights, and continually review and update such
governance arrangements.
Principle 15: Companies should actively engage their shareholders and put in place an investor relations
policy to promote regular, effective and fair communication with shareholders.
Principle 16: Companies should encourage greater shareholder participation at general meetings of
shareholders, and allow shareholders the opportunity to communicate their views on various matters
affecting the company.
The Company recognises the importance of regular, timely and effective communication with the shareholders.
The Company does not practise selective disclosure. In line with continuous obligations of the Company pursuant
to the Listing Manual and the Companies Act of Singapore, it is the Board’s policy that all the shareholders should
be equally informed, on a timely basis, of all major developments that will or expect to have an impact on the
Company or the Group.
At the AGM, shareholders are given the opportunity to voice their views and seek clarification on questions regarding
the Company. The Directors, Management and the external auditors are normally available at the AGM to answer
shareholders’ queries.
Resolutions are, as far as possible, structured separately and may be voted on independently.
The Group fully supports the Code’s principle to encourage shareholders’ participation. The Company’s Articles of
Association allows the appointment of not more than two (2) proxies by shareholders, to attend the AGM and vote
on his/their behalf. Shareholders who hold shares through nominees are allowed, upon prior request through their
nominees, to attend the general meetings as proxies without being constrained by the two-proxy requirement.
The Company, however, has not implemented measures to allow shareholders who are unable to vote in person
at the Company’s AGM the option to vote in absentia, such as via mail, electronic mail or facsimile transactions.
ANNUAL REPORT 2015 | CIVMEC 51
REPORT ON CORPORATE GOVERNANCE (cont’d)
SHAREHOLDERS’ RIGHTS AND RESPONSIBILITIES (CONT’D)
Principle 16: Companies should encourage greater shareholder participation at general meetings of
shareholders, and allow shareholders the opportunity to communicate their views on various matters
affecting the company. (cont’d)
The Company Secretary prepares minutes of general meetings that include substantial and relevant comments
or queries from shareholders relating to the agenda of the meetings and responses from the Board and the
Management, and to make these minutes available to shareholders.
For greater transparency, the Company will put all resolutions to vote by poll at the general meetings and an
announcement of the detailed results of the number of votes cast for and against each resolution and the respective
percentages will be made on the same day.
As at the date of this Report, the Company does not have a formal dividend policy in place. The form, frequency
amount of dividends declared each year will take into consideration the Group’s profit growth, cash position, positive
cash flow generated from operations, projected capital requirements for business growth and other factors as the
Board may deem appropriate. Any payouts are clearly communicated to shareholders in public announcements and
via announcements on SGXNET when the Company discloses its financial results. The Company has proposed a
foreign sourced tax exempt First and Final Dividend of 0.7 Singapore cent per ordinary share for the financial year
ended 30 June 2015, payment of which is subject to approval at the forthcoming AGM.
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 FY2015 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 persons transactions are conducted on an arm’s length basis and are
not prejudicial to the interests of the shareholders. There were no interested person transactions for FY2015.
Dealing in Securities
The Company has put in place a policy prohibiting share dealings by Directors and employees of the Company
when they are in possession of price sensitive information and for the period of two (2) weeks before the release of
quarterly results and one (1) 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 during permitted trading periods. An officer should also not deal
in the Company’s securities on short-term consideration and/or possession of unpublished material price-sensitive
information relating to the relevant securities.
RISK MANAGEMENT COMMITTEE
The RCC comprises all the Non-Executive Independent Directors. The Chairman of the RCC is Mr. Chong Teck Sin.
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 is guided by its Terms of Reference which highlights its primary responsibilities as follows:
1. Review and monitor the Group’s risk Management framework and activities;
2. Report to the Board regarding Group’s risk exposures, including the review of risk assessment model used to
monitor the risk exposures and Management’s views on the acceptable and appropriate level of risk faced by
Group’s Business Units;
3. Recommend and adopt appropriate measures to control and mitigate the business risks of the Group,
as and when these arise; and
4. Perform any other functions as may be agreed by the Board.
The Company has complied with Rule 1207(19) of Listing Manual.
52 CIVMEC | ANNUAL REPORT 2015
CORPORATE REGISTRY
BOARD OF DIRECTORS
PRINCIPAL OFFICE AND CONTACT DETAILS
Mr. James Finbarr Fitzgerald (Executive Chairman)
Mr. Patrick John Tallon (Chief Executive Officer)
Mr. Kevin James Deery (Chief Operating Officer)
Mr. Chong Teck Sin (Lead Independent Director)
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
RISKS & CONFLICTS COMMITTEE
Mr. Chong Teck Sin (Chairman)
Mr. Douglas Owen Chester
Mr. Wong Fook Choy Sunny
COMPANY SECRETARIES
Ms. Ang Siew Koon
REGISTERED OFFICE
80 Robinson Road, #02-00,
Singapore 068898
Tel: (65) 6236 3333
Fax: (65) 6236 4399
16 Nautical Drive,
Henderson WA 6166
Australia
Tel: +61 8 9437 6288
Fax: +61 8 9437 6388
SHARE REGISTRAR AND SHARE
TRANSFER AGENT
Tricor Barbinder Share Registration Services
(a division of Tricor Singapore Pte. Ltd.)
80 Robinson Road, #02-00,
Singapore 068898
AUDITORS
Moore Stephens LLP
10 Anson Road, #29-15 International Plaza
Singapore 079903
Partner in Charge: Mr. Christopher Johnson
(Appointed since the financial year ended 30 June 2011)
PRINCIPAL BANKER
St George Bank
Level 2 Westralia Square,
167 St Georges Terrace
Perth WA 6000
Australia
CORPORATE WEBSITE
http://www.civmec.com
ANNUAL REPORT 2015 | CIVMEC 53
INDEPENDENT AUDITOR’S REPORT
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 55 to 96, which comprise the consolidated statement
of financial position of the Group and the statement of financial position of the Company as at 30 June 2015, 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, (Chapter 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 financial statements 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.
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 financial position of the Group and of the Company as at 30 June
2015 and the financial performance, 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
20 August 2015
54 CIVMEC | ANNUAL REPORT 2015
CONSOLIDATED INCOME STATEMENT
FOR THE YEAR ENDED 30 JUNE 2015
Note
4
4
16
16
7
5
8
9
9
Revenue
Cost of sales
Other income
Share in profit of a joint venture
Negative goodwill
Administrative expenses
Finance costs
Other expenses
Profit before income tax
Income tax expense
Profit attributable to:
Owners of the Company
Non-controlling interest
Earnings per share attributable to equity
holders of the Company (cents per share):
- Basic
- Diluted
Profit for the year
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
Group
2015
S$’000
499,153
(437,046)
62,107
933
-
-
(22,114)
(2,122)
(3,133)
35,671
(5,363)
30,308
30,308
-
30,308
6.05
6.05
30,308
(19,368)
10,940
10,940
-
10,940
2014
S$’000
433,677
(369,922)
63,755
1,014
462
1,058
(18,769)
(1,652)
(389)
45,479
(10,400)
35,079
35,079
-
35,079
7.01
7.00
35,079
2,305
37,384
37,384
-
37,384
ANNUAL REPORT 2015 | CIVMEC 55
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Current tax recoverable
Non-current assets
Investments in subsidiaries
Loans receivable
Property, plant and equipment
Intangible assets
Deferred tax assets
TOTAL ASSETS
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Borrowings
Payable to related parties
Provisions
Current tax liabilities
Non-current liabilities
Borrowings
Provisions
Deferred tax liabilities
TOTAL LIABILITIES
Capital and Reserves
Share capital
Treasury shares
Other reserves
Retained earnings
Total equity attributable to the
Owners of the Company
Non-controlling interest
TOTAL EQUITY
Note
12
10
11
8
16
13
14
15
8
17
18
25
19
18
19
8
20
20
22
Group
2015
S$’000
37,643
108,466
162
11,610
157,881
-
-
98,017
10
191
98,218
Company
2014
S$’000
2015
S$’000
2014
S$’000
32,557
143,324
65
-
175,946
-
-
108,312
13
5,303
113,628
104
4,446
13
2,591
7,154
7,836
33,510
-
-
-
41,346
186
8,571
-
-
8,757
8,916
35,648
-
-
18
44,582
256,099
289,574
48,500
53,339
70,967
12,683
-
5,972
-
89,622
12,718
1,993
-
14,711
82,446
30,584
-
6,713
2,485
122,228
20,459
1,996
620
23,075
186
-
3,619
-
-
3,805
-
-
1,128
1,128
156
-
2,492
-
106
2,754
-
-
537
537
104,333
145,303
4,933
3,291
37,864
(11)
(18,577)
132,491
37,864
(11)
734
105,685
151,767
144,272
(1)
151,766
(1)
144,271
37,864
(11)
(184)
5,898
43,567
-
43,567
37,864
(11)
5,879
6,316
50,048
-
50,048
TOTAL LIABILITIES AND EQUITY
256,099
289,574
48,500
53,339
56 CIVMEC | ANNUAL REPORT 2015
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
-
-
-
-
-
-
-
-
-
-
-
Balance as at
01 July 2013
37,864
Group
Balance as at
01 July 2014
Profit for the year
Other comprehensive
income for the year:
Exchange
differences on
re-translation
from functional
currency to
presentation
currency
Total comprehensive
income for the year
Share based
payment
Dividends paid/
declared (Note 20)
Balance as at
30 June 2015
Profit for the year
Other comprehensive
income for the year:
Exchange
differences on
re-translation from
functional currency
to presentation
currency
Total
comprehensive
income for the year
Shares
repurchased during
the year
Shares granted via
employee share
scheme
Share based
payment
Dividends paid
(Note 20)
Balance as at
30 June 2014
Other reserves
Foreign
currency
translation
reserve
Share
option
reserve
Treasury
shares
Merger
reserve
Retained
earnings
Total
Non-
controlling
interest
Total
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
Share
capital
S$’000
37,864
(11)
9,010
(8,503)
227
105,685
144,272
(1) 144,271
-
-
-
(19,368)
30,308
30,308
-
30,308
-
(19,368)
-
(19,368)
-
-
-
(19,368)
30,308
10,940
-
-
57
-
-
57
(3,502)
(3,502)
-
-
-
10,940
57
(3,502)
37,864
(11)
9,010
(27,871)
284
132,491
151,767
(1) 151,766
-
-
-
-
(948)
937
-
-
9,010
(10,808)
-
-
-
-
-
-
-
-
2,305
2,305
-
-
-
-
-
-
-
-
-
-
-
74,113
110,179
(1) 110,178
35,079
35,079
-
35,079
-
2,305
-
2,305
35,079
37,384
-
37,384
-
-
-
(948)
937
227
-
-
-
-
(948)
937
227
(3,507)
-
(3,507)
(3,507)
37,864
(11)
9,010
(8,503)
227
105,685
144,272
(1) 144,271
ANNUAL REPORT 2015 | CIVMEC 57
-
-
-
-
-
-
-
-
-
227
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
Group
Note
2015
S$’000
2014
S$’000
35,671
45,479
14
16
16
6
7
4
5
14
16
12
8,020
162
-
-
57
2,122
(400)
(57)
2,971
48,660
15,180
(69)
(1,589)
(331)
62,513
400
(2,122)
3,014
(18,848)
44,957
1,239
(12,302)
-
(11,063)
13,112
(33,833)
(3,502)
-
-
(24,223)
9,671
(4,585)
32,557
37,643
6,648
389
(462)
(1,058)
227
1,652
(652)
870
-
53,093
(51,124)
115
30,937
4,081
37,102
652
(1,652)
3,014
(13,261)
25,855
482
(37,915)
3,298
(34,135)
35,514
(14,815)
(3,507)
(948)
936
17,180
8,900
549
23,108
32,557
Cash Flows from Operating Activities
Profit before income tax
Adjustment for:
Depreciation of property, plant and equipment
Loss on disposal of property, plant and equipment
Share of profit in joint venture
Negative goodwill
Expense recognised in respect of equity-settled share-based payments
Finance cost
Interest income
Foreign exchange differences
Bad debts written-off
Operating cash flow before working capital changes
Changes in working capital:
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in other current assets
(Decrease)/Increase in trade and other payables
(Decrease)/Increase in provisions
Cash generated from operations
Interest received
Finance cost paid
Income tax refund
Income taxes paid
Net cash generated by operating activities
Cash Flows from Investing Activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
Net cash of acquired subsidiary
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Purchase of treasury shares
Treasury shares reissued
Net cash (used in)/generated from financing activities
Net 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
58 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
These notes form an integral part of and should be read in conjunction with the accompanying financial statements.
1. GENERAL INFORMATION
Civmec Limited (the “Company”) was incorporated in the Republic of Singapore on 3 June 2010 under the Singapore
Companies Act, Chapter 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) on 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 2015 were authorised for issue on the date of the
statement by the Directors.
2. SIGNIFICANT ACCOUNTING POLICIES
(i) Basis of preparation
The financial statements have been prepared in accordance with Singapore Financial Reporting Standards (“FRS”)
and have been prepared under the historical cost convention, except as disclosed in the accounting policies below.
The preparation of financial statements in conformity with FRS requires Management to exercise judgement in
the process of applying the Group’s critical accounting policies and requires the use of certain critical accounting
estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent
assets and contingent liabilities at the reporting dates, and the reported amounts of revenue and expenses during
the relevant periods. Although these estimates are based on Management’s best knowledge of historical experience
and other factors, including expectations of future events that are believed to be reasonable under the circumstances,
actual results may differ from those estimates. The estimates and underlying assumptions are reviewed on an
ongoing basis.
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.
(ii) Adoption of New/Revised Singapore Financial Reporting Standards
(a) New or Revised FRS Effective in the Current Year
For the financial year ended 30 June 2015, 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:
FRS 27 (Revised) Separate Financial Statements
FRS 27 (Revised) will now solely address separate financial statements, the requirements for which are substantially
unchanged. There was no material impact on the financial position or financial performance of the Group when implemented.
FRS 110 Consolidated Financial Statements
FRS 110 supersedes FRS 27 Consolidated and Separate Financial Statements. The standard changes the
definition of control and applies it to all investees to determine the scope of consolidation. FRS 110 requirements
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 application of this standard had no impact on the financial position or financial performance
of the Group when implemented.
FRS 112 Disclosures of Interests in Other Entities
FRS 112 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, the application of this standard had no impact on the financial position or financial
performance of the Group when implemented.
ANNUAL REPORT 2015 | CIVMEC 59
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(ii) Adoption of New/Revised Singapore Financial Reporting Standards (cont’d)
(a) New or Revised FRS Effective in the Current Year (cont’d)
Amendments to FRS 24 Related Party Disclosures – Key Management Personnel
The amendments clarify that an entity is a related party of the reporting entity if the said entity, or any member of
a group for which it is a part of, provides key Management personnel services to the reporting entity or the parent
company of the reporting entity. The amendments also clarify that the reporting entity that obtains the Management
personnel services from another entity (also referred to as the Management entity) is not required to disclose the
compensation paid or payable by the Management entity to its employees or Directors. The reporting entity is
required to disclose the amounts incurred for the key Management personnel services provided by a separate
Management entity. The application of this standard had no impact on the financial position or financial performance
of the Group when implemented.
Amendments to FRS 108 Operating Segments – Aggregation of Operating Segments and Reconciliation of
the Total Reportable Segments’ Assets to the Entity’s Assets
Amendments to FRS 108 require entities to disclose the judgement made by Management by aggregating two
or more operating segments. This disclosure should include a brief description of the operating segments that
have been aggregated in this way and the economic indicators that have been assessed in determining that the
aggregated operating segments share economic characteristics. The amendment also clarifies that an entity shall
provide reconciliations of the total reportable segments’ assets to the entity’s assets if such amounts are regularly
provided to the chief operating decision maker. The application of this standard had no impact on the financial
position or financial performance of the Group when implemented.
(b) New or Revised FRS issued but not yet effective
At the date of authorisation of these financial statements, the Group has not applied the following new and revised
FRS that have been issued and which are relevant to the Group but will only be effective for the Group for annual
periods beginning 1 July 2015 onwards.
FRS 115 Revenue from Contracts with Customers
FRS 115 establishes a revised framework for revenue recognition based on the following five-step approach:
•
•
Identification of the contracts;
Identification of the performance obligations in the contract;
• Determination of the transaction price;
• Allocation of the transaction price to the performance obligations; and
• Recognition of revenue when (or as) an entity satisfies a performance obligation.
FRS 115 will replace the existing revenue recognition guidance including FRS 18 Revenue, FRS 11 Construction
Contracts and INT FRS 113 Customer Loyalty Programs These amendments are effective for annual periods
beginning on or after 1 January 2017.
The Group is currently evaluating the impact of the changes and assessing whether the adoption of FRS 115 will
have an impact on the Group.
FRS 109 Financial Instruments
FRS 109 prescribes the accounting requirements for financial instruments and replaces the existing guidance
in FRS 39 Financial Instruments: Recognition and Measurement. FRS 109 prescribes a new classification and
measurement framework for financial instruments, requires financial assets to be impaired based on a new
expected credit loss model, changes the hedge accounting requirements, and carries forward the recognition
and de-recognition requirements for financial instruments from FRS 39. These amendments are effective for
annual periods beginning on or after 1 January 2018.
The Group is currently evaluating the impact of the changes and assessing whether the adoption of FRS 109
will have an impact on the Group.
60 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(iii) Basis of Consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an
entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the date that control ceases.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there are
changes to one or more of the three (3) elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee when
the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally.
The Company considers all relevant facts and circumstances in assessing whether or not the Company’s voting rights
in an investee are sufficient to give power, including:
•
•
•
•
the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other
vote holders;
potential voting rights held by the Company, other vote holders or other parties;
rights arising from other contractual agreements; and
any additional facts and circumstances that indicate that the Company has, or does not have, the current ability
to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous
shareholders’ meetings.
The Group applies the acquisition method to account for business combinations. The consideration transferred for
the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of
the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any
asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and
contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition
date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis,
either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s
identifiable net assets.
Acquisition-related costs are expensed as incurred
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held
equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from
such re-measurement are recognised in profit or loss. Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration
that is deemed to be an asset or liability is recognised in accordance with FRS 39 either in profit or loss or as a
change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and
its subsequent settlement is accounted for within equity.
The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the identifiable net
assets acquired is recorded as goodwill. If the total of consideration transferred, non-controlling interest recognised
and previously held interest measured is less than the fair value of the net assets of the subsidiary acquired in the
case of a bargain purchase, the difference is recognised directly in profit or loss.
Inter-company transactions, balances and unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated. When necessary, amounts reported by subsidiaries have been
adjusted to conform with the Group’s accounting policies.
Change in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions
– that is, as transactions with the owners in their capacity as owners. The difference between fair value of any
consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in
equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
ANNUAL REPORT 2015 | CIVMEC 61
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(iii) Basis of Consolidation (cont’d)
Disposal of subsidiaries
When the Group ceases to have control, any retained interest in the entity is re-measured to its fair value at the
date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture
or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that
entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that
amounts previously recognised in other comprehensive income are reclassified to profit or loss.
(iv) 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”).
(v) Income Tax
Income tax expense represents the sum of the tax currently payable and deferred tax.
Current income tax is 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 is 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:
(a) 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
(b) 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.
62 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(v) Income Tax (cont’d)
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.
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.
(vi) Foreign Currency Translation
Functional and presentation currency
The financial statements of each entity in the Group are measured using the currency that best reflects the economic
substance of the underlying events and circumstances relevant to each entity (the “functional currency”). The
functional currency of the Company is Australian dollar (“A$”).
The consolidated financial statements are presented in Singapore dollar (“SGD” or S$).
Transactions and balances
In preparing the financial statements of the individual entities, transactions in currencies other than the entity’s
functional currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the
transactions. At the end of each reporting period, monetary items denominated in foreign currencies are retranslated
at the rates prevailing at that date.
Currency translation differences resulting from the settlement of such transactions and from the translation of
monetary assets and liabilities denominated in foreign currencies at the closing rates at the balance sheet date are
recognised in profit or loss, unless they arise from borrowings in foreign currencies and other currency instruments
designated and qualifying as net investment hedges and net investment in foreign operations. Those currency
translation differences are recognised in the currency translation reserve in the consolidated financial statements and
transferred to profit or loss as part of the gain or loss on disposal of the foreign operation.
Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.
Group companies
The consolidated results and financial position of foreign operations whose functional currency is different from the
Group’s presentation currency are translated into the presentation currency as follows:
• Assets and liabilities for each statement of financial position presented are translated at 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.
ANNUAL REPORT 2015 | CIVMEC 63
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(vi) Foreign Currency Translation (cont’d)
Group companies (cont’d)
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.
(vii) Construction Contract 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:
(a) total contract revenue can be measured reliably;
(b) it is probable that the economic benefits associated with the contract will flow to the enterprise;
(c) both the contract cost to complete the contract and the stage of contract completion at the balance sheet
date can be measured reliably; and
(d) 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”.
64 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(viii) Financial Assets
(a) 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.
(b) 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.
(c) 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.
(d) 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.
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.
(ix) 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.
(x) 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.
ANNUAL REPORT 2015 | CIVMEC 65
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(x) Property, Plant and Equipment (cont’d)
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.
The depreciation rates used for each class of depreciable assets are:
Class of Fixed Asset
Depreciation Rate
Buildings
Plant and equipment
Leased plant and equipment
Motor vehicles
Office and IT equipment
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.
(xi) Impairment of Non-Financial Assets
Non-financial assets are tested for impairment whenever there is any 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.
66 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(xi) 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.
(xii) 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.
(xiii) 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.
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.
ANNUAL REPORT 2015 | CIVMEC 67
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(xiv) 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.
(xv) 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.
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.
(xvi) 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.
Share-based payments
The Group operates an equity-settled share-based compensation plan. The fair value of the employee services
received in exchange for the grant of options is recognised as an expense with a corresponding increase in the share
option reserve over the vesting period.
The total amount to be recognised over the vesting period is determined by reference to the fair value of the options
granted on the date of the grant. Non-market vesting conditions are included in the estimation of the number of
shares under options that are expected to become exercisable on the vesting date.
At each balance sheet date, the Group revises its estimates of the number of shares under options that are expected
to become exercisable on the vesting date and recognises the impact of the revision of the estimates in profit or loss,
with a corresponding adjustment to the share option reserve over the remaining vesting period.
The charge or credit to profit or loss for a period represents the movement in cumulative expense recognised as at
the beginning and end of that period.
No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional
upon a market condition, which are treated as vested irrespective of whether or not the market condition is satisfied,
provided that all other performance and/or service conditions are satisfied. The employee share option reserve is
transferred to retained earnings upon expiry of the share options. When the options are exercised, the employee
share option reserve is transferred to share capital if new shares are issued, or to treasury shares if the options are
satisfied by the reissuance of treasury shares.
68 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
2. SIGNIFICANT ACCOUNTING POLICIES (CONT’D)
(xvi) Employee Benefits (cont’d)
Share-based payments (cont’d)
In situations where equity instruments are issued and some or all of the goods or services received by the entity
as consideration cannot be specifically identified, the unidentified goods or services received (or to be received)
are measured as the difference between the fair value of the share-based payment and the fair value of any
identifiable goods or services received at the grant date. This is then capitalised or expensed as appropriate.
(xvii) 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.
(xviii) 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.
Treasury shares
When any entity within the Group purchases the Company’s ordinary shares (“treasury shares”), the consideration
paid including any directly attributable incremental cost is presented as a component within equity attributable to the
Company’s equity holders, until they are cancelled, sold or re-issued.
When treasury shares are subsequently cancelled, the cost of treasury shares are deducted against the share capital
account if the shares are purchased out of capital of the Company, or against the retained earnings of the Company if
the shares are purchased out of the earnings of the Company.
When treasury shares are subsequently sold or re-issued pursuant to the employee share option scheme, the cost
of treasury shares is reversed from the treasury share account and the realised gain or loss on sale or re-issue, net of
any directly attributable incremental transaction costs and related income tax, is recognised in the capital reserve.
(xix) 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’).
a. A person or a close member of that person’s family is related to a reporting entity if that person:
1. has control or joint control over the reporting entity;
2. has significant influence over the reporting entity; or
3. is a member of the key Management personnel of the reporting entity or of a parent of the reporting entity.
b. An entity is related to a reporting entity if any of the following conditions applies:
1. 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);
2. 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);
3. both entities are join ventures of the same third party;
4. one entity is a joint venture of a third entity and the other entity is an associate of the third entity;
5. 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;
6. the entity is controlled or jointly controlled by a person identified in (a); or
7. a person identified in (a)(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).
ANNUAL REPORT 2015 | CIVMEC 69
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
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:
(i) 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 2015 was S$98,017,000
(2014: S$108,312,000) (Note 14). A 10% difference in the expected useful lives of these assets from Management’s
estimate would result in an approximately S$802,000 (2014: S$665,000) variance in the Group’s profit before tax.
No expense is recognised for options that do not ultimately vest, except for options where vesting is conditional
upon a market condition, which are treated as vested irrespective of whether or not the market condition is satisfied,
provided that all other performance and/or service conditions are satisfied. The employee share option reserve is
transferred to retained earnings upon expiry of the share options. When the options are exercised, the employee
share option reserve is transferred to share capital if new shares are issued, or to treasury shares if the options are
satisfied by the reissuance of treasury shares.
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. In making the judgement, the Group evaluates this by relying on past experience and knowledge of the
project specialist.
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 17.
Income taxes
The Group has exposure to income taxes of which a portion of these taxes arose from certain transactions
and computations for which ultimate tax determination is uncertain during the ordinary course of business. The
Group recognises receivables or liabilities on expected tax issues based on their best estimates of the likely taxes
recoverable or due. Where the final tax outcome of these matters is different from the amounts that were initially
recognised, such differences will impact the income tax and deferred tax positions in the period in which such
determination is made. The carrying amounts of the Groups’s and Company’s current income tax positions as at 30
June 2015 were current tax recoverable of S$11,610,000 (2014: current tax payable of S$2,485,000) and current tax
recoverable of S$2,591,000 (2014: Nil) respectively. The carrying amounts of the Group’s and Company’s deferred
tax assets and liabilities as at 30 June 2015 are disclosed in Note 8.
(ii) 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:
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
70 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION
UNCERTAINTY (CONT’D)
(ii) Critical Judgements in Applying the Group’s Accounting Policies (cont’d)
Impairment of receivables (cont’d)
During the year, the Group has written off trade receivables of S$2,971,000 (2014: Nil) to profit or loss as disclosed in
Note 5.
The carrying value of the Group’s trade and other receivables and the Company’s loans receivable as at 30 June
2015 and 2014 is S$ 108,466,000 and S$ 33,510,000 (2014: S$ 143,324,000 and S$ 35,648,000), 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 2015 and
2014.
The carrying amount of property, plant and equipment at 30 June 2015 is S$98,017,000 (2014: S$108,312,000).
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 2015 and 2014.
The carrying amount of the Company’s investment in subsidiaries as at 30 June 2015 is S$7,836,000
(2014: S$8,916,000).
4. REVENUE AND OTHER INCOME
Class of Fixed Asset
Revenue
Construction contract revenue
Revenue from sales of goods
Revenue from the rendering of services
Other Income
Interest income on bank balances
Rental income
Net foreign exchange gain
Fuel tax rebate
Group
2015
S$’000
494,878
608
3,667
499,153
400
12
25
496
933
2014
S$’000
429,292
326
4,059
433,677
652
12
-
350
1,014
ANNUAL REPORT 2015 | CIVMEC 71
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
5. PROFIT BEFORE INCOME TAX
The following items have been included in
arriving at profit before tax:
Included in cost of sales:
Direct materials
Employee benefits
Subcontract works
Workshop and other overheads
Depreciation of property, plant and equipment
Included in administrative expenses:
Audit fees:
• Auditors of the Company
• Other auditors
Non-audit fees paid to other auditors
Business development
Communications
Depreciation of property, plant and equipment
Directors’ fees
Employee benefits
Occupancy expenses
Office costs
Other administrative expenses
Other professional fees
Tax fees
Net foreign exchange loss
Bad debts written-off
6. EMPLOYEE BENEFITS EXPENSES
Wages and salaries
Contributions to defined contribution plans
Other employee benefits
Share-based expense ₁
(1)Employee share option scheme.
7. FINANCE COSTS
Class of Fixed Asset
Bank bills
Finance leases
Premium funding
Other finance costs
72 CIVMEC | ANNUAL REPORT 2015
Note
6
6
Note
22
Group
2015
S$’000
76,026
216,812
64,677
72,200
7,331
98
131
44
621
981
689
192
16,543
558
420
827
556
570
-
2,971
Group
2015
S$’000
220,151
10,059
3,088
57
233,355
Group
2015
S$’000
706
1,361
50
5
2,122
2014
S$’000
104,280
159,636
52,899
46,954
6,153
96
94
38
544
1,118
495
191
12,962
410
866
956
375
559
65
-
2014
S$’000
162,647
7,308
2,416
227
172,598
2014
S$’000
193
1,411
45
3
1,652
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
8. INCOME TAX EXPENSE
Current income tax
Deferred income tax
(Over)/Under provision in prior years
• Current income tax
• Deferred income tax
Group
2015
S$’000
5,985
2,999
8,984
(5,281)
1,660
(3,621)
2014
S$’000
14,109
(544)
13,565
(3,165)
-
(3,165)
The Group’s tax on profit before income tax differs from the amount that would arise using the Australian standard
rate of income tax as follows:
5,363
10,400
Profit before income tax
Group
2015
S$’000
35,671
2014
S$’000
45,479
Income tax at 30% (2014: 30%)
10,701
13,644
Add/(Deduct) tax effect of:
Over provision of income tax in respect of prior years*
Under provision of deferred tax for prior year income tax returns
Effect of tax consolidation in Australia jurisdiction **
Non-assessable income
Unrecognised deferred tax asset on foreign operation
Non-allowable items
Difference in tax rates between Australian and foreign operations
Negative goodwill
Share in profit of a joint venture
Utilisation of previously unrecognised deferred tax asset
Weighted average effective tax rates are as follows:
(5,281)
1,660
-
(1,420)
(416)
45
41
33
-
-
-
5,363
15.0%
(3,165)
-
(347)
-
86
-
(319)
(141)
642
10,400
22.9%
* The overprovision in prior years resulted from the final tax outcome difference from the amounts that were originally estimated on the Group’
tax incentive.
** Civmec Limited and its 100% owned Australian subsidiaries formed an Australian income tax consolidated group effective from 1 July 2014.
ANNUAL REPORT 2015 | CIVMEC 73
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
8. INCOME TAX EXPENSE (CONT’D)
The tax rate used for the 2015 and 2014 reconciliations above is the corporate tax rate of 30% payable by
corporate entities in Australia on taxable profits under the tax law in that jurisdiction. The Group’s operations
are located in Australia.
The following shows the details of the deferred tax liabilities and assets:
Opening
balance
Reclassification
due to change in
tax jurisdiction
Charged
to profit
or loss
Acquisitions
Currency
translation
Closing
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
Deferred tax liabilities:
Property, plant and equipment
Share of profit in joint venture
Pre-payments
Fringe benefits tax instalments
Interest bearing borrowings
Unrealised foreign exchange gain
Balance at 30 June 2014
Property, plant and equipment
Fringe benefits tax instalments
Interest bearing borrowings
Unrealised foreign exchange gain
Balance at 30 June 2015
Deferred tax assets:
Property, plant and equipment
Interest bearing borrowings
Expenses accrued
Other current assets
Provision
Carried forward tax losses
Unrealised foreign exchange
losses
Contract in progress
Intangibles
Balance at 30 June 2014
Property, plant and equipment
Interest bearing borrowings
Fringe benefits tax instalments
Receivables
Expenses accrued
Other current assets
Provision
Carried forward tax losses
Unrealised foreign exchange
losses
Unrealised foreign exchange gain
Contract in progress
Intangibles
Others
Balance at 30 June 2015
123
218
1
-
-
-
342
50
33
293
244
620
48
1,176
1,137
19
1,421
1
564
16
1
4,383
99
548
-
-
1,506
-
2,613
1
496
-
39
1
-
5,303
74 CIVMEC | ANNUAL REPORT 2015
-
-
-
-
-
-
-
(50)
(33)
(293)
(244)
(620)
-
-
-
-
-
-
-
-
-
-
(50)
(293)
(33)
-
-
-
-
-
-
(244)
-
-
-
(620)
(74)
(217)
(6)
32
288
240
263
-
-
-
-
-
49
(637)
340
(19)
1,128
-
(76)
22
-
807
(5,047)
(238)
-
(1,282)
742
2
99
-
774
229
(36)
(1)
99
(4,659)
-
-
5
-
-
-
5
-
-
-
-
-
-
-
4
-
20
-
-
-
-
24
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1
(1)
-
1
5
4
10
-
-
-
-
-
2
9
25
-
44
-
8
1
-
89
751
(17)
4
78
(226)
-
(323)
1
(107)
15
(3)
-
(6)
167
50
-
-
33
293
244
620
-
-
-
-
-
99
548
1,506
-
2,613
1
496
39
1
5,303
(4,247)
-
(29)
(1,204)
2,022
2
2,389
2
1,163
-
-
-
93
191
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
8. INCOME TAX EXPENSE (CONT’D)
Aggregate amount of temporary differences associated with investment in subsidiaries, capital losses and goodwill,
for which deferred tax assets/liabilities have not been recognised amounted to S$77,180,505 (2014: deferred tax
liabilities S$3,903,812).
Current tax recoverable
Current tax recoverable mainly arose from Group’s tax incentive claims and overprovision of income taxes in respect
of prior years’ expected to be recovered in the next financial year.
9. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the Group’s net profit attributable to ordinary equity holders for the
financial year by the weighted average number of ordinary shares issued.
Profit attributable to the owners of the Company (S$’000)
Share capital
Weighted average number of ordinary shares issued
Group
2015
30,308
501,000,000
2014
35,079
501,000,000
• Basic
• Diluted
500,985,000
500,985,000
500,352,162
505,956,277
Earnings per ordinary share (S$ cents)
• Basic
• Diluted
6.05
6.05
7.01
7.00
Basic earnings per share is calculated by dividing the consolidated profit after tax attributable to the equity holders of
the company, by the weighted average number of ordinary shares outstanding during the financial year.
As at 30 June 2014, the diluted earnings per share is calculated by dividing the consolidated profit after tax
attributable to the equity holders 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 at 30 June 2015, the diluted earnings per share is the same as the basic earnings per share as it does not include
the effect of 6,000,000 unissued ordinary shares granted under the CESOS (Note 21(b)). The effect of the inclusion is
anti-dilutive.
ANNUAL REPORT 2015 | CIVMEC 75
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
Company
2014
S$’000
2015
S$’000
2014
S$’000
-
-
-
-
4,417
-
29
4,446
-
-
-
-
3,261
5,294
16
8,571
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10. TRADE AND OTHER RECEIVABLES
Note
(a)
Current:
Trade receivables
•
•
Third party
Retention on construction claims
Amount due from customers for contract
in progress
Receivables from subsidiaries
Dividends receivable
Other receivables
Total current trade and other receivables
(a) Contracts in progress:
Contract costs incurred
Recognised profits
Less: Progress billings
Currency translation
Amount due from customers for
construction contracts
Presented as:
Due from customers
Due to customers
Group
2015
S$’000
64,098
2,085
66,183
42,114
-
-
169
108,466
470,613
63,392
534,005
96,774
99
96,873
45,735
-
-
716
143,324
365,681
63,611
429,292
(494,878)
(3,292)
(387,499)
764
35,835
42,557
17
42,114
(6,279)
35,835
45,735
(3,178)
42,557
Receivable from subsidiaries are unsecured, interest-free and repayable on demand in cash.
76 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
11. OTHER CURRENT ASSETS
Pre-payments
12. CASH AND CASH EQUIVALENTS
Cash at bank and in hand
Group
2015
S$’000
162
Group
2015
S$’000
37,643
Company
2015
S$’000
13
2014
S$’000
65
Company
2015
S$’000
104
2014
S$’000
32,557
2014
S$’000
-
2014
S$’000
186
Cash at banks earns interest at floating rates ranging from 0.01% to 2.50% (2014: 0.01% to 2.50%) per annum.
A floating charge over cash and cash equivalents has been provided for certain debt. Refer to Note 18 for
further details.
13. LOANS RECEIVABLE
Balance at the beginning of the year
Currency translation
Balance at the end of the year
Company
2015
S$’000
35,648
(2,138)
33,510
2014
S$’000
35,355
293
35,648
The loans granted to a subsidiary are unsecured and interest bearing at 6% per annum (2014: 6%). Interest income
recognised for the year amounted to S$2,072,517 (2014: S$2,124,134).
The repayment terms are reviewed at the end of each financial year. As at 30 June 2015, there were no loans which
are required to be repaid within the next twelve (12) months.
ANNUAL REPORT 2015 | CIVMEC 77
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
14. PROPERTY, PLANT AND EQUIPMENT
Land
Leasehold
building
Plant and
equipment
Small
tools
Motor
vehicles
Office
equipment
IT
equipment
Assets under
construction
Total
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
S$’000
6,230
-
-
48,339
3,929
-
49,562
3,006
(3,249)
5,726
2,712
(279)
7,031
215
(308)
1,446
48
(4)
(755)
(6,094)
(5,945)
(841)
(846)
(178)
2,078
614
(20)
(288)
5,004
1,778
-
125,416
12,302
(3,860)
(594)
(15,541)
2015
Cost
At 01 July 2014
Additions
Disposals
Currency
translation
At 30 June 2015
5,475
46,174
43,374
7,318
6,092
1,312
2,384
6,188
118,317
Accumulated
depreciation
At 01 July 2014
Depreciation for
the year
Disposals
Currency
translation
At 30 June 2015
Net carrying
amount
At 30 June 2015
2014
Cost
At 01 July 2013
Additions
Additions via
acquisition of
subsidiary
Disposals
Currency
translation
-
-
-
-
-
(2,916)
(9,255)
(1,679)
(2,070)
(1,626)
(3,676)
(1,223)
(730)
-
452
1,996
1,178
219
264
221
281
(299)
(215)
3
49
(885)
(550)
20
141
(4,090)
(9,757)
(2,419)
(2,298)
(462)
(1,274)
-
-
-
-
-
(17,104)
(8,020)
2,459
2,365
(20,300)
5,475
42,084
33,617
4,899
3,794
850
1,110
6,188
98,017
6,127
-
37,737
9,791
-
-
-
-
103
811
30,218
18,286
1,090
(816)
784
3,782
1,887
4,295
2,641
-
(40)
97
5
(30)
120
545
930
-
(53)
24
1,268
1,046
-
(261)
25
1,575
3,334
85,547
37,915
7
-
88
1,102
(1,200)
2,052
At 30 June 2014
6,230
48,339
49,562
5,726
7,031
1,446
2,078
5,004
125,416
Accumulated
depreciation
At 01 July 2013
Depreciation for
the year
Disposals
Currency
translation
At 30 June 2014
Net carrying
amount
At 30 June 2014
-
-
-
-
-
(1,458)
(6,090)
(857)
(1,365)
(1,408)
(3,144)
(833)
(678)
-
(50)
131
(152)
40
(29)
7
(34)
(111)
(195)
13
(6)
(2,916)
(9,255)
(1,679)
(2,070)
(299)
(629)
(390)
138
(4)
(885)
-
-
-
-
-
(10,510)
(6,648)
329
(275)
(17,104)
6,230
45,423
40,307
4,047
4,961
1,147
1,193
5,004
108,312
78 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
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$28,656,706 (2014: S$36,078,242) (Note 18).
(b) The carrying amount of property, plant and equipment that are pledged for security are as follows:
Property, plant and equipment
Borrowings
Leasehold building
Leased plant and equipment
Remaining property, plant and equipment
Bank bill, Escrow and multi-option facility
Finance lease
Floating charge on multi-option facility
Refer to Note 18 for further information on Borrowings.
15. INTANGIBLE ASSETS
Goodwill
Group
2015
S$’000
42,084
24,933
31,000
98,017
2014
S$’000
42,084
24,933
31,000
108,312
Group
2015
S$’000
10
2014
S$’000
13
Goodwill arose from the excess of the consideration paid for a business acquired from a third party. Goodwill has
been allocated to the cash-generating unit, Mining and Others division.
Management is of the opinion that the recoverable amount will exceed the carrying amount on the basis that this
cash generating unit has been generating profit since acquisition and Management forecasts the results of this
subsidiary to be in a net profit position for the financial year ending 30 June 2016. In arriving at this assessment,
Management has determined the recoverable amount using a two year forecasting process based on the current
order book, projected orders and a consumer price index (“CPI”) factor of 1.2% per annum on direct costs and
overhead costs.
Property, plant and equipment
Balance at the beginning of the year
Currency translation
Balance at the end of the year
16. INVESTMENT IN SUBSIDIARIES
At cost:
Balance at the beginning of the year
Incorporation of a wholly-owned subsidiary
Currency translation
Balance at the end of the year
*Issued and paid-up capital less than 1,000
Group
2015
S$’000
2014
S$’000
13
(3)
10
12
1
13
Group
2015
S$’000
2014
S$’000
8,916
-*
(1,080)
7,836
8,769
-
147
8,916
ANNUAL REPORT 2015 | CIVMEC 79
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
16. INVESTMENT IN SUBSIDIARIES (CONT’D)
Acquisition of Subsidiary
On 24 April 2014, the Group’s subsidiary company, Civmec Construction & Engineering, acquired the remaining 50%
shareholding of its joint venture Cape Civmec Insulation Group Pty Ltd (CCIG) from Cape Australia Investments Pty Ltd.
The remaining 50% shareholding in CCIG was acquired for a nominal cash consideration of A$1. The consideration
was determined by the parties after taking into account the net tangible asset value of A$1,950,627 (S$2,254,535)
and the retention of an ongoing relationship and partnering in Australia.
As a result of the acquisition, CCIG became a wholly owned subsidiary and changed its name to Civmec Coatings &
Insulation Group Pty Ltd.
The roll forward analysis of the Group’s investment in the joint venture up to the acquisition date is as follows:
Balance at the beginning of the year
Share of profits in the joint venture
Currency translation
Balance at the acquisition date
Group
2015
S$’000
2014
S$’000
-
-
-
-
725
462
(60)
1,127
No gain or loss recognised on the disposal of the 50% equity interest held by the Group in the former joint venture.
The fair value of the identifiable assets and liabilities of the acquired subsidiary as at the acquisition date:
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Non-current assets
Property, plant and equipment
Deferred tax assets
Current liabilities
Trade and other payables
Provisions
Current tax liabilities
Non-current liabilities
Shareholders’ loans
Deferred tax liabilities
Total identifiable net assets at fair value
Less: Proportionate share in the net identifiable assets of the former joint venture at the acquisition date
Currency translation
Negative goodwill
Total
S$’000
3,298
2,327
61
1,102
24
(2,253)
(66)
(1,059)
(1,175)
(5)
2,254
(1,127)
(69)
1,058
On the acquisition date, the previously held equity interest in a former joint venture is less than the fair value of the
Group’s share of the identifiable net assets of the subsidiary acquired, the difference is recognised directly in profit
or loss.
80 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
16. INVESTMENT IN SUBSIDIARIES (CONT’D)
Acquisition of Subsidiary (cont’d)
Net cash inflow on acquisition of subsidiary
No gain or loss recognised on the disposal of the 50% equity interest held by the Group in the former joint venture.
The fair value of the identifiable assets and liabilities of the acquired subsidiary as at the acquisition date:
Consideration paid in cash
Less: cash and cash equivalent balances acquired
Balance at the acquisition date
* less than 1,000
Details of the Company’s subsidiaries at 30 June 2015 are as follows:
Group
2015
S$’000
-
-
-
2014
S$’000
-*
(3,298)
(3,298)
Name of Subsidiary/ country of
incorporation
Principal activities
% of equity held
by the Group
Held by the Company:
Civmec Construction & Engineering Pty
Ltd* Australia
Civil construction
Structural Mechanical Process piping
(SMP)
2015
%
100
Civmec Construction & Engineering Singapore
Pte Ltd**
Engineering and Construction Services
100
Held by Civmec Construction &
Engineering Pty Ltd
Civmec Holdings Pty Ltd*
Australia
Ballymount Holdings Pty Ltd*
Australia
Civmec Pipe Products Pty Ltd*
Australia
Asset holding company
Asset holding company
Asset holding company
Civmec Coatings & Insulation Group Pty Ltd*
Australia
Insulation
*
**
Audited by Moore Stephens Australia
Audited by Moore Stephens LLP Singapore
100
100
83.5
100
2014
%
100
-
100
100
83.5
100
ANNUAL REPORT 2015 | CIVMEC 81
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
17. 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
Note
10
Trade and other payables are usually paid within 45 days.
18. BORROWINGS
Note
18(a)
18(b)
18(a)
Current:
Finance lease liabilities - secured
Bank bills – secured
Non-Current
Finance lease liabilities - secured
Total borrowings
(i) Finance Lease Liabilities
Group
2015
S$’000
32,687
25,518
6,279
3,176
3,307
70,967
Group
2015
S$’000
7,513
5,170
12,683
12,718
12,718
25,401
Company
2015
S$’000
2014
S$’000
-
186
-
-
-
186
-
156
-
-
-
156
Company
2015
S$’000
2014
S$’000
-
-
-
-
-
-
-
-
-
-
-
-
2014
S$’000
29,225
39,975
3,178
5,000
5,068
82,446
2014
S$’000
8,780
21,804
30,584
20,459
20,459
51,043
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 four (4) and five (5) years at interest rates ranging from 3.94% to
9.59% per annum (2014: 4.73% to 9.59%).
The finance lease liabilities are secured by the underlying leased assets:
Property, plant and equipment
Group
2015
S$’000
24,933
2014
S$’000
36,078
Note
14
82 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
18. BORROWINGS (CONT’D)
(i) Finance Lease Liabilities (cont’d)
The present values of finance lease liabilities are analysed as follows:
Minimum lease
payments
Future finance
charges
Net present value
of minimum lease
payments
S$’000
S$’000
S$’000
8,387
13,494
21,881
10,192
22,070
32,262
(874)
(776)
(1,650)
(1,412)
(1,611)
(3,023)
7,513
12,718
20,231
8,780
20,459
29,239
2015
Less than one year
Between one and five years
2014
Less than one year
Between one and five years
(ii) 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 2015, the Group did meet all of these financial covenants.
As at 30 June 2015, the Group has a commercial bank facility amounting to S$32,364,200 which was utilised 16%
(2014: 64%). Interest rates are variable and ranged between 3.0% to 3.63% per annum during the financial year
(2014: 3.62% to 4.71% per annum).
Repayment of the bank bill facilities is on an interest only basis and is repayable within the next 12 months where the
terms of the bank bill will then be renegotiated.
(iii) Other Financing Facilities Available
The Group has a Multi Option Facility available for a limit of A$15,000,000 (approximately S$15,510,000) (2014:
A$15,000,000 (approximately S$17,647,500)). This is secured by:
•
•
•
First registered real property mortgage by Civmec Holdings Pty Ltd over the leasehold interest in the Commercial
property located at 16 Nautical Drive, Henderson WA 6166.
First registered real property mortgage by Civmec Holdings Pty Ltd over the leasehold interest in the Commercial
property located at 2 & 8 Stuart Drive, Henderson WA 6166.
First registered fixed and floating charge over the assets and undertaking of Civmec Construction & Engineering
Pty and Civmec Holdings Pty Ltd.
• Unlimited guarantee and indemnity given by Civmec Holdings Pty Ltd and Civmec Ltd.
• Consent to Mortgage of Lease over Commercial property located at Lot 804 (16) Nautical Drive, Henderson WA
6166 given by Western Australian Land Authority.
• Unlimited guarantee and indemnity given by the Company.
ANNUAL REPORT 2015 | CIVMEC 83
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
19. PROVISIONS
Current
Provision for employee benefits
Non-current
Provision for employee benefits
Movements in provisions are as follows:
Current
Opening balance at the beginning of the year
Provisions made during the year - Included in employee benefits
Provisions utilised during the year
Currency translation
Closing balance at the end of the year
Non-current
Opening balance at the beginning of the year
Provisions made during the year - included in employee benefits
Currency translation
Closing balance at the end of the year
Group
2015
S$’000
2014
S$’000
5,972
6,713
1,993
7,965
1,996
8,709
Group
Note
2015
S$’000
2014
S$’000
6
6
6,713
16,366
(16,290)
(817)
5,972
3,233
9,911
(6,546)
115
6,713
1,996
1,330
254
(257)
633
33
1,993
1,996
Provisions pertain to employee benefits relating to long service leave for employees. In calculating the present value
of future cash flows in respect of long service leave, the probability of long service leave being taken is based upon
historical data and the discount rate used range from 2.75% to 4.75% (2014: 2.65% to 3.08%).
20. SHARE CAPITAL
(i) Fully Paid Ordinary Shares
Ordinary shares issued and fully paid
Shares held as treasury shares
84 CIVMEC | ANNUAL REPORT 2015
2015
2014
No. of shares
S$’000
No. of shares
S$’000
501,000,000
(15,000)
37,864
(11)
501,000,000
(15,000)
37,864
(11)
500,985,000
37,853
500,985,000
37,853
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
20. SHARE CAPITAL (CONT’D)
(i) Fully Paid Ordinary Shares (cont’d)
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.
At the Annual Meeting held on 28 October 2014, the Company approved the payment of a foreign-sourced
dividend of 0.7 Singapore cents (2014: 0.7 Singapore cents) per ordinary share amounting to S$3,502,000 (2014:
S$3,507,000) for the financial year ended 30 June 2014. The dividend payment was made on 16 December 2014.
(ii) Treasury Shares
2015
2014
No. of shares
S$’000
No. of shares
S$’000
Balance at the beginning of the year
Purchase of treasury shares
Reissued pursuant to the performance share plan
Balance at the end of the year
15,000
-
-
15,000
11
-
-
11
-
1,214,000
(1,199,000)
15,000
-
948
(937)
11
Treasury shares relate to ordinary shares of the Company that are held by the Company.
(iii) Share Options
Balance at the beginning of the year
Options issued 11 September 2013
Balance at the end of the year
2015
2014
No. of shares
Exercise $
No. of shares
Exercise $
6,000,000
-
6,000,000
0.65
-
0.65
-
6,000,000
6,000,000
-
0.65
0.65
These options vested but were not exercised during the reporting period. Share options granted under the Civmec
Employee Share Option plan carry no rights to dividends and no voting rights. Further details of the employee option
plan are contained in Note 21.
21. SHARE-BASED PAYMENTS
(i) 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.
Under the CPSP, 1,199,000 ordinary shares with a market value of S$0.70 per share were fully allotted out of treasury
shares issued by the company on 13 June 2014. The share based payment expense was based on the cost of the
treasury shares acquired for S$0.78 per share in December 2013.
The employee benefits expense in the 30 June 2014 statement of profit and loss includes an amount of S$935,834
which relates to equity-settled share-based payment transactions.
ANNUAL REPORT 2015 | CIVMEC 85
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
21. SHARE-BASED PAYMENTS (CONT’D)
(ii) Employee Share Option Scheme
The Civmec Employee Share Option Scheme (the “CESOS”) was established on 27 March 2012 and formed part
of the Civmec Limited prospectus dated 5 April 2012. The CESOS is a long term incentive scheme to reward and
retain key Management and employees of the Group whose service are integral to the success and the continued
growth of the Group. 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.
Controlling shareholders or their associates cannot participate in the scheme unless certain conditions are satisfied
and shareholder approval is obtained.
The options are issued for no consideration and carry no entitlements to voting rights or dividends of the Group and are
not transferable. The number of options granted is subject to approval by the Remuneration Committee and is based on
a performance framework which incorporates financial and/or non-financial performance measurement criteria.
Options are forfeited immediately after the holder ceases to be employed by the Group (except in the case of ill
health, retirement, redundancy or bankruptcy), unless the committee determines otherwise.
The options are issued with a strike price that is at the Remuneration Committee’s discretion, set at a price as quoted
on the Singapore Exchange for three (3) market days 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%).
The vesting period for options issued with no discount to market price is over one (1) year.
On 11 September 2013, 6,000,000 options were granted to employees under the CESOS to take up ordinary shares
at an exercise price of S$0.65 per share. The options are exercisable on or before 11 September 2023.
Options granted to employees are as follows:
Grant date
11 September 2013
Total number granted
Vesting period
6,000,000
1 year
Since the end of the reporting period, no employees have retired from the Group. During the financial year, these
options vested but were not exercised during the period (2014: Nil).
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in share
options during the year:
Outstanding at the beginning of the year
Granted during the year
Outstanding at the end of the year
Exercisable at the end of the year
2015
2014
No.
6,000,000
-
6,000,000
6,000,000
WAEP
$
0.65
-
0.65
No
-
6,000,000
6,000,000
-
WAEP
$
-
0.65
0.65
86 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
21. SHARE-BASED PAYMENTS (CONT’D)
(ii) Employee Share Option Scheme (cont’d)
The weighted average remaining contractual life of options outstanding as at 30 June 2015 is eight (8) years
(2014: 9 years). The exercise price of outstanding shares was S$0.65 (2014: $0.65).
The fair value of the options granted to employees is deemed to represent the value of the employee services
received over the vesting period.
The weighted average fair value of options granted was $0.0472 (2014: $0.0472). These values were calculated
using the Binomial option pricing model applying the following inputs:
Grant Date
Vesting period
Dividend yield
Weighted average exercise price
Share price
Expected average life of the option
Expected share price volatility
Risk-free interest rate
11 September 2013
1 year
11%
S$0.65
S$0.65
5.9 years
26%
2.68%
The expected volatility of the Company has been determined having regard to the historical volatility of the market
price of the Company’s shares and the mean reversion tendency of volatilities.
The life of the options is based on the expected exercise patterns, which may not eventuate in the future.
A liquidity discount has also been applied to the value of the options to account for historically low trading volume of
the shares.
22. OTHER RESERVES
Foreign currency translation reserve
Merger reserve
Share option reserve
Group
Company
2015
S$’000
2014
S$’000
2015
S$’000
2014
S$’000
(27,871)
9,010
284
(18,577)
(8,503)
9,010
227
734
(9,478)
9,010
284
(184)
(3,358)
9,010
227
5,879
(i) Foreign Currency Translation Reserve
Exchange differences relating to the translation of the net assets of the Group’s foreign operations from their
functional currency to the Group’s presentation currency (i.e., S$) 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.
(ii) Merger Reserve
Pursuant to the completion of the Restructuring Exercise, the share capital of Civmec Construction & Engineering Pty
Ltd and Controlled Entities is adjusted to merger reserve based on the “pooling of interest method”.
(iii) Share Option Reserve
The share option reserve relates to share options granted to employees under the employee share option plan.
Further information about share-based payments to employees is set out in Note 21 Share-based Payments.
ANNUAL REPORT 2015 | CIVMEC 87
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
23. COMMITMENTS
(i) Operating Lease
The future minimum lease payable under non-cancellable operating leases contracted for where the Group is a lessee
at the reporting date but not capitalised in the financial statements are as follows:
Not later than 12 months
Between 12 months and five years
More than five years
Group
2015
S$’000
2,747
9,817
57,883
70,447
2014
S$’000
2,566
10,309
67,974
80,849
The Group has below commercial operating leases:
•
•
•
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. Since March 2015,
the Group has increased the area of land leased.
The Darwin property lease at 56 Pruen Road, Northern Territory is for a three year (3) period from July 2014 with an
option to renew for a further three (3) years. Rent increases as per the CPI index.
The Broome property lease at 266-268 Port Drive, Minyirr is for a five year (5) period from August 2014. Rent
increases as per CPI index.
•
The Group also has entered into short term operating leases in Queensland and Sydney during the year.
(ii) Capital Expenditure Commitments
The Group has contracted capital expenditure commitments at the reporting date but not recognised in the financial
statement as follows:
Plant and equipment purchases
Capital projects
Not later than 12 months
24. GUARANTEES
Group
2015
S$’000
950
368
1,318
1,318
2014
S$’000
810
4,755
5,565
5,565
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.
88 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
24. GUARANTEES (CONT’D)
As at 30 June 2015, the Group has provided the following:
Bank guarantee
Surety bond facility
Letter of credit
Group
2015
S$’000
9,461
63,037
360
72,858
2014
S$’000
1,384
66,449
-
67,833
The surety bond facility is provided for the provision of performance bonds to customers of the Group. It has a limit of
A$95 million (equivalent to S$98.23 million) as at 30 June 2015 (2014: A$75 million (equivalent to S$88.24 million).
25. RELATED PARTY TRANSACTIONS
The Group’s main related parties are as follows:
Entities Exercising Control over the Group
The largest shareholders are James Finbarr Fitzgerald and Olive Theresa Fitzgerald (acting as trustees for the JF & OT
Fitzgerald Family Trust) (19.47%) and Goldfirm Pty Ltd (acting as trustee for the Kariong Investment Trust) (19.47%).
Key Management Personnel
Any person having authority and responsibility for planning, directing and controlling the activities of the entity, directly
or indirectly, including any Director (whether executive or otherwise) of that entity is considered key Management
personnel.
Remuneration paid to key Management personnel is as follows:
Directors’ remuneration
Salaries and other related costs
Directors’ fees
Benefits including defined contribution plans
Key Management personnel
Salaries and other related costs
Benefits including defined contribution plans
Group
2015
S$’000
2014
S$’000
1,590
192
243
1,260
237
3,522
1,918
191
130
2,383
185
4,807
Directors’ interest in Employee Share Benefit Plans
At the end of the reporting date, the total number of outstanding share options that were issued/allocated to the
Directors and key Management personnel under existing employee benefit schemes is given below:
Directors
Key Management personnel
Group
2015
No.
-
2,000,000
2014
No.
-
2,000,000
ANNUAL REPORT 2015 | CIVMEC 89
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
25 RELATED PARTY TRANSACTIONS (CONT’D)
Other Related Parties
Other related parties include immediate family members of key Management personnel and entities that are controlled
or significantly influenced by those key Management personnel, individually or collectively with their immediate family
members.
Transactions with Related Parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Group
2015
No.
2014
No.
Purchase of goods and services
Other Related Parties:
• Consultant fee paid to a related party (who is a shareholder of the Company)
(8)
(22)
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 and the department heads of each operating segment.
The business is managed primarily on the basis of different products and services as the diversification of the Group’s
operations inherently have notably different risk profiles and performance assessment criteria.
Reportable segments disclosed are based on aggregating operating segments where the segments are considered
to have similar economic characteristics and are also similar with respect to the following:
•
•
•
•
•
the products sold and/or services provided by the segment;
the manufacturing process;
the type or class of customer for the products or services;
the distribution method; and
any external regulatory requirements.
The two main reportable segments for the Group are: (1) Oil and Gas (2) Mining and Others. The business activities
include civil construction, fabrication, precast concrete, Structural, Mechanical, Piping Erection (SMP), insulation,
maintenance and plant hire.
Basis of Accounting for Purpose of Reporting by Operating Segments
(i) 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.
(ii) 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.
(iii) 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”.
90 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
26 FINANCIAL INFORMATION BY SEGMENTS (CONT’D)
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 2015, the
Group supplies to a single external customer in Mining & Others segment who accounts for 41.6 % of external revenue (2014:
51.9%). The next most significant client accounts for 14.9% and 10.7 % (2014: 8.2% and 7.8%) respectively of external revenue.
2015
Mining &
Others
S$’000
352,334
Oil and Gas
S$’000
146,819
Total
S$’000
499,153
Oil and Gas
S$’000
130,444
2014
Mining &
Others
S$’000
303,233
Total
S$’000
433,677
(134,686)
(295,029)
(429,715)
(107,410)
(256,359)
(363,769)
(2,292)
(5,039)
(7,331)
(1,231)
(4,922)
(6,153)
9,841
52,266
(2,971)
-
-
Revenue – external sales
Cost of sales (excluding
depreciation)
Depreciation expense
Segment results
Unallocated costs
Bad debt
Other income
Negative goodwill
Share in profit of joint venture
Finance costs
Other expenses
Profit before income tax
Income tax expense
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 tax liabilities
Deferred tax liabilities
Provisions
Total liabilities
Other segment information
Capital expenditures during
the year
-
-
21,803
41,952
462
-
62,107
(22,114)
(2,971)
933
-
-
(2,122)
(162)
35,671
(5,363)
30,308
63,755
(18,769)
-
1,014
1,058
462
(1,652)
(389)
45,479
(10,400)
35,079
10
10
-
13
13
255,736
162
191
256,099
70,967
25,401
-
-
7,965
104,333
12,302
284,193
65
5,303
289,574
82,446
51,043
2,485
620
8,709
145,303
39,017
ANNUAL REPORT 2015 | CIVMEC 91
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
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.
(i) Market Risk
(a) 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 2015, approximately 80% (2014:
57%) 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 % (2014: 1%) with all other variables remain constant, the Group’s profit
before tax will be approximately lower/higher by S$51,700 (2014: S$218,000) as a result of higher/lower interest
expenses on these borrowings.
The Group and the Company has cash balances placed with reputable banks and financial institutions. Such
balances are placed on varying maturities and generate interest income for the Group and the Company.
The Group obtains additional financing through bank borrowings and leasing arrangements. Information relating to
the Group’s interest rate exposure is also disclosed in the notes on the Group’s borrowings and leasing obligations.
They are both fixed and floating rates of interest. The policy is to retain flexibility in selecting borrowings at both fixed
and floating rates interest.
Group
Variable rates
Fixed rates
Within
1 year
S$’000
Between 2 to
5 years
S$’000
Within
1 year
S$’000
Between 2 to
5 years
S$’000
Within
1 year
S$’000
Between 2
to 5 years
S$’000
2015
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings – finance lease
Borrowings – bank bills
2014
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings – finance lease
Borrowings – bank bills
37,643
-
37,643
-
-
5,170
5,170
32,557
-
32,557
-
-
21,804
21,804
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,513
-
7,513
-
-
-
-
8,780
-
8,780
-
-
-
-
108,466
108,466
37,643
108,466
146,109
-
12,718
-
12,718
58,205
-
-
58,205
58,205
20,231
5,170
83,606
-
-
-
-
143,324
143,324
32,557
143,324
175,881
-
20,459
-
20,459
69,200
-
-
69,200
69,200
29,239
21,804
120,243
92 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
27 FINANCIAL RISK MANAGEMENT (CONT’D)
(i) Market Risk (cont’d)
(a) Interest rate risk (cont’d)
Company
Variable rates
Fixed rates
Within
1 year
S$’000
Between 2 to
5 years
S$’000
Within
1 year
S$’000
Between 2 to
5 years
S$’000
Within
1 year
S$’000
Between 2
to 5 years
S$’000
2015
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Payable to related parties
2014
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Payable to related parties
(b) Foreign currency risk
-
-
-
-
-
-
186
-
186
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
--
-
-
-
-
-
-
-
-
-
-
-
-
104
4,446
4,550
186
3,619
3,805
-
8,571
8,571
156
2,492
2,648
104
4,446
4,550
186
3,619
3,805
186
8,571
8,757
156
2,492
2,648
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.
(ii) 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. Depending on
the division within the Group and the Company, credit terms are generally 30 days from the date of invoice.
The main source of credit risk to the Group and Company is considered to relate to the class of assets described as
“Trade and other receivables”.
The Group has a concentration of credit risk with one counterparty accounting for 38% of trade receivables as at 30
June 2015 (2014: 66%).
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.
ANNUAL REPORT 2015 | CIVMEC 93
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
27 FINANCIAL RISK MANAGEMENT (CONT’D)
(ii) Credit Risk (cont’d)
Group
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$’000
Within
1 year
S$’000
Between 2
to 5 years
S$’000
2015
Trade receivables
Other receivables
Total
2014
Trade receivables
Other receivables
Total
66,183
42,283
108,466
96,873
46,451
143,324
53,485
42,283
95,768
11,023
-
11,023
92,108
46,451
138,559
4,649
-
4,649
1,485
-
1,485
116
-
116
Company
Variable rates
Fixed rates
Within
1 year
S$’000
Between 2 to
5 years
S$’000
Within
1 year
S$’000
Between 2 to
5 years
S$’000
Within
1 year
S$’000
2015
Receivables from subsidiaries
Other receivables
Total
2014
Receivables from subsidiaries
Dividends receivable
Other receivables
Total
4,417
29
4,446
3,261
5,294
16
8,571
4,417
29
4,446
3,261
5,294
16
8,571
-
-
-
-
-
-
-
-
-
-
-
-
-
-
190
-
190
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Between 2
to 5 years
S$’000
-
-
-
-
-
-
-
The Group and the Company did not hold any financial assets whose terms have been renegotiated, but which would
otherwise be past due or impaired.
The Group believes that the unimpaired amounts that are past due by more than 30 days are still collectible based on
historic payment behaviour and extensive analyses of customer credit risk, including underlying customers’ credit ratings,
when available. Based on the Group’s monitoring of customer credit risk, the Group believes that, apart from the above, no
impairment allowance is necessary in respect of receivables not past due or past due by 30 days and above.
Credit risk related to balances with banks and other financial institutions is managed by investing surplus funds with
counterparties that are at a Standard and Poor’s rating of at least AA. The following table provides information regarding the
credit risk relating to cash and cash equivalents based on Standard and Poor’s counterparty credit ratings.
Group
2015
S$’000
2014
S$’000
2015
S$’000
2014
S$’000
37,643
32,557
104
186
Cash and cash equivalents:
AA Rated
94 CIVMEC | ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
27 FINANCIAL RISK MANAGEMENT (CONT’D)
(iii) Liquidity Risk
Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting its commitments concerning its
financial liabilities. The Group and the Company manages this risk through the following mechanism:
• Preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities;
• Monitoring undrawn credit facilities;
• Maintaining credit risk related to financial assets;
• Obtaining funding from a variety of sources;
• Only investing surplus cash with major financial institutions; and
• Comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
Cash flows realised from financial assets reflect Management’s expectation as to the timing of realisation. Actual timing
may therefore differ from that disclosed. The timing of cash flows presented in the table to settle financial liabilities reflect
the earliest contractual settlement dates and do not reflect Management’s expectations that banking facilities will be rolled
forward. Balances due within 12 months equal their carrying amount as the impact of discounting is not significant.
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
Group
Contractual Undiscounted Cash Flows
2015
Financial Liabilities
Trade and other payables
Borrowings:
Finance lease
Bank bills
Total financial liabilities
2014
Financial Liabilities
Trade and other payables
Borrowings:
Finance lease
Bank bills
Total financial liabilities
Carrying
amount
S$’000
Within
1 year
S$’000
Between
2 to 5 years
S$’000
Total
S$’000
58,175
58,175
-
58,175
20,231
5,170
83,576
8,387
5,325
71,887
13,494
-
13,494
21,881
5,325
85,381
69,200
69,200
-
69,200
29,239
21,804
120,243
10,192
22,620
102,012
22,070
-
22,070
32,262
22,620
124,082
Company
Contractual Undiscounted Cash Flows
2015
Financial Liabilities
Trade and other payables
Payable to related parties
Total financial liabilities
2014
Financial Liabilities
Trade and other payables
Payable to related parties
Total financial liabilities
Carrying
amount
S$’000
Within
1 year
S$’000
Between
2 to 5 years
S$’000
Total
S$’000
186
3,619
3,805
156
2,492
2,648
186
3,619
3,805
156
2,492
2,648
-
-
-
-
-
-
186
3,619
3,805
156
2,492
2,648
ANNUAL REPORT 2015 | CIVMEC 95
NOTES TO THE FINANCIAL STATEMENTS (cont’d)
27 FINANCIAL RISK MANAGEMENT (CONT’D)
(iv) Capital Management
Management controls the capital of the Group in order to maintain a good debt-to-equity ratio, provide the shareholders
with adequate returns and to ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
The Group and the Company have no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the Management of debt levels,
distribution to shareholders and share issues.
The net debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as total financial liabilities
less cash and cash equivalents.
Net debt
Total equity
Net debt-to-equity ratio
Group
2015
S$’000
45,963
151,767
0.30
2014
S$’000
87,686
144,272
0.61
There were no changes in the Group’s approach to capital Management during the year.
(v) 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.
The fair value of current financial assets and financial liabilities approximate the carrying value due to the liquid nature of
these assets and / or the short term nature of these financial rights and obligations.
The fair 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. The carrying amounts of financial assets and financial liabilities are assumed to approximate their respective fair
values. The Group does not anticipate that the carrying amounts recorded at the balance sheet date would be significantly
different from the values that would eventually be received or settled.
96 CIVMEC | ANNUAL REPORT 2015
STATISTICS OF SHAREHOLDERS AS AT 16 SEPTEMBER 2015
: Ordinary Shares
Class of Shares
: One vote per Ordinary Share
Voting Rights (excluding treasury shares)
No. of issued shares
: 501,000,000 shares
No. of issued shares excluding treasury shares : 500,985,000 shares
No. of treasury shares
: 15,000
DISTRIBUTION OF SHAREHOLDINGS
Size of Shareholdings
1 - 99
100 - 1,000
10,001 – 10,000
10,001 – 1,000,000
1,000,001 and Above
No. of
Shareholders
2
41
424
500
33
%
0.20
4.10
42.40
50.00
3.30
No. of Shares
67
34,819
2,665,367
49,287,453
449,012,294
%
0.00
0.01
0.53
9.84
89.62
Total
1,000
100.00
501,000,000
100.00
TWENTY LARGEST SHAREHOLDERS
No.
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Shareholders’ Name
No. of Shares
%
CIMB SECURITIES (SINGAPORE) PTE LTD
JAMES FINBARR FITZGERALD OR OLIVE TERESA FITZGERALD
RAFFLES NOMINEES (PTE) LTD
DBS NOMINEES PTE LTD
CLARENDON PACIFIC VENTURES PTE LTD
VAZ LORRAIN MICHAEL
LIM KIM LYE
FOO SIANG GUAN
LEE TECK LENG
CITIBANK NOMINEES SINGAPORE PTE LTD
MAYBANK KIM ENG SECURITIES PTE LTD
ANG KONG HUA
BANK OF SINGAPORE NOMINEES PTE LTD
LEYAU LAY HOON
NG KEE CHOE
GOH GEOK LING
LAI VOON NEE
BNP PARIBAS NOMINEES SINGAPORE PTE LTD
PANG CHIN FATT
HENG KHENG LONG
Total
182,644,971
97,720,806
30,022,721
25,095,400
23,812,000
12,877,000
6,859,245
6,781,849
5,700,200
4,846,689
4,675,600
4,628,677
4,395,000
4,237,899
3,700,134
3,425,134
3,300,000
2,412,300
2,273,000
2,255,845
431,664,470
36.46
19.51
5.99
5.01
4.75
2.57
1.37
1.35
1.14
0.97
0.93
0.92
0.88
0.85
0.74
0.68
0.66
0.48
0.45
0.45
86.16
ANNUAL REPORT 2015 | CIVMEC 97
STATISTICS OF SHAREHOLDERS AS AT 16 SEPTEMBER 2015 (cont’d)
SUBSTANTIAL SHAREHOLDERS
Direct Interest
Deemed interest
Name
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)
No. of Shares
97,720,806
97,566,806
15,888,000
-
-
54,000
%
19.51
19.47
3.17
-
-
0.01
No. of Shares
-
-
23,812,000
97,720,806
97,566,806
97,566,806
%
-
-
4.75
19.50
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 Securities and Futures Act (“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 16 September 2015 and to the best knowledge of the Directors,
approximately 50.43% 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.
98 CIVMEC | ANNUAL REPORT 2015
NOTICE OF ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Amara Hotel Singapore, Level
3, Connection Room 1, 165 Tanjong Pagar Road, Singapore 088539 on Thursday, 29 October 2015 at 3pm, 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 2015 together with the Directors’ Report and
Independent Auditors’ Report thereon.
To approve the payment of a tax exempt (foreign sourced) First and Final
Dividend of 0.7 Singapore cents per ordinary share for the financial year ended
30 June 2015.
Ordinary Resolution 1
Ordinary Resolution 2
To approve the payment of Directors’ fees of S$220,000 for the financial year
ending 30 June 2016, to be paid quarterly in arrears. (FY2015: S$190,000)
Ordinary Resolution 3
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
[See Explanatory Note (i)]
(e) Mr. Wong Fook Choy Sunny
[See Explanatory Note (ii)]
(f) Mr. Douglas Owen Chester
[See Explanatory Note (iii)]
Ordinary Resolution 4
Ordinary Resolution 5
Ordinary Resolution 6
Ordinary Resolution 7
Ordinary Resolution 8
Ordinary Resolution 9
5.
To re-appoint Messrs Moore Stephens LLP as the Auditors of the Company
and to authorise the Directors to fix their remuneration.
Ordinary Resolution 10
AS SPECIAL BUSINESSES:
To consider and, if thought fit, to pass with or without modifications the following resolutions:
6.
Authority to allot and issue shares
Ordinary Resolution 11
“THAT pursuant to Section 161 of the Companies Act, Chapter 50 (the “Act”) and
the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”),
authority be and is hereby given to the Directors of the Company to:
(a) issue shares in the capital of the Company whether by way of bonus issue, rights
issue or otherwise; and/or
(b) make or grant offers, agreements or options (collectively, “Instruments”) that might
or would require shares to be issued, including but not limited to the creation and
issue of (as well as adjustments to) warrants, debentures or other instruments
convertible into shares; and/or
(c) issue additional Instruments convertible into shares arising from adjustments
made to the number of Instruments at any time and upon such terms and
conditions and for such purposes and to such persons as the Directors may, in
their absolute discretion, deem fit; and (notwithstanding the authority conferred by
this Resolution may have ceased to be in force) issue shares in pursuance of any
Instrument made or granted by the Directors while this Resolution was in force,
provided that:
(i) the aggregate number of shares and convertible securities that may be issued
shall not be more than 50% of the total number of issued shares (excluding
treasury shares) in the capital of the Company or such other limit as may be
prescribed by the SGX-ST as at the date the general mandate is passed;
(ii)
the aggregate number of shares and convertible securities to be issued other
than on a pro-rata basis to existing shareholders shall not be more than 20%
of the total number of issued shares (excluding treasury shares) in the capital
of the Company or such other limit as may be prescribed by the SGX-ST as
at the date the general mandate is passed;
ANNUAL REPORT 2015 | CIVMEC 99
NOTICE OF ANNUAL GENERAL MEETING (cont’d)
AS SPECIAL BUSINESSES (CONT’D)
6.
Authority to allot and issue shares (cont’d)
Ordinary Resolution 11
(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 shares arising from the conversion or exercise of any 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 (iv)]
7.
Authority to allot and issue shares under the Civmec Employee Share Option
Scheme and the Civmec Performance Share Plan
“THAT authority be and is hereby given to the Directors of the Company to allot and
issue from time to time such number of Shares in the capital of the Company as may
be required to be allotted and issued pursuant to the exercise of the options under
the Civmec Employee Share Option Scheme (the “CESOS”) and/or the vesting of
awards under Civmec Performance Share Plan (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 and that such authority shall, unless revoked or varied by the Company
in a general meeting, continue in force until the conclusion of the next Annual General
Meeting of the Company or the date by which the next Annual General Meeting of the
Company is required by law to be held, whichever is earlier.”
[See Explanatory Note (v)]
Ordinary Resolution 12
8.
Proposed Renewal of the Share Purchase Mandate
Ordinary Resolution 13
That:
(a)
for the purposes of Sections 76C and 76E of the Companies Act, Chapter 50 of
Singapore (the “Companies Act”), and such other laws and regulations as may
for the time being be applicable, the exercise by the Directors of the Company
(“Directors”) of all the powers of the Company to purchase or otherwise acquire
issued ordinary shares in the share capital of the Company (“Shares”) not
exceeding in aggregate the Prescribed Limit (as hereafter defined), at such price(s)
as may be determined by the Directors of the Company from time to time up to
the Maximum Price (as hereafter defined), whether by way of:
(i) on-market purchases (“On-Market Share Purchase”) transacted on the
Singapore Exchange Securities Trading Limited (“SGX-ST”); and/or
(ii) off-market purchases (“Off-Market Share Purchase”) (if effected otherwise
than on the SGX-ST) in accordance with an equal access scheme(s) as may
be determined or formulated by the Directors as they may consider fit, which
scheme(s) shall satisfy all the conditions prescribed by the Companies Act
and the SGX-ST Listing Manual,
(the “Share Purchase Mandate”);
(b) any Share that is purchased or otherwise acquired by the Company pursuant
to the Share Purchase Mandate shall, at the discretion of the Directors of the
Company, either be cancelled or held in treasury and dealt with in accordance
with the Companies Act;
(c)
the authority conferred on the Directors of the Company pursuant to the Share
Purchase Mandate may be exercised by the Directors at any time and from time
to time during the period commencing from the passing of this Resolution and the
expiring on the earliest of:
(i)
(ii)
the date on which the next Annual General Meeting of the Company is held
or required by law to be held;
the date on which the share purchases are carried out to the full extent
mandated; or
(iii)
the date on which the authority contained in the Share Purchase Mandate is
varied or revoked;
100 CIVMEC | ANNUAL REPORT 2015
NOTICE OF ANNUAL GENERAL MEETING (cont’d)
AS ORDINARY BUSINESSES (CONT’D)
8.
Proposed Renewal of the Share Purchase Mandate (cont’d)
Ordinary Resolution 13
(d)
in this Ordinary Resolution:
“Prescribed Limit” means 10% of the total number of Shares as at the date
of the last annual general meeting of the Company held before this Resolution
is passed or as at the date of passing of this Resolution, whichever is the higher
(excluding any treasury shares that may be held by the Company from time to
time), unless the Company has effected a reduction of the share capital of the
Company in accordance with the applicable provisions of the Companies Act,
at any time during the Relevant Period, in which event the total number of
Shares of the Company shall be taken to be the total number of Shares of
the Company as altered;
“Relevant Period” means the period commencing from the date the last annual
general meeting of the Company was held before the date of passing of this
Resolution, and expiring on the date the next annual general meeting of the
Company is held or is required by law to be held, whichever is the earlier, after
the date of passing of this Resolution;
“Maximum Price” in relation to a Share to be purchased, means an amount
(excluding related brokerage, commission, applicable goods and services tax,
stamp duties, clearance fees and other related expenses) not exceeding 105%
of the Average Closing Price, excluding related expenses of the Share Purchases,
and where:
“Average Closing Price” means the average of the closing market prices of
a Share over the last five (5) Market Days, on which transactions in the Shares
were recorded, immediately preceding the date of making the On-Market Share
Purchase or, as the case may be, the day of the making of an offer pursuant to
the Off-Market Share Purchase, and deemed to be adjusted for any corporate
action that occurs after the relevant five (5) Market Days;
“day of the making of the offer” means the day on which the Company
announces its intention to make an offer for the purchase of Shares from
Shareholders, stating the purchase price (which shall not be more than the
Maximum Price calculated on the foregoing basis) for each Share and the
relevant terms of the equal access scheme for effecting the Off-Market Share
Purchase; and
“Market Day” means a day on which the SGX-ST is open for trading in
securities; and
(e)
the Directors of the Company and/or any of them be and are hereby authorised
to complete and do all such acts and things (including without limitation,
executing such documents as may be required) as they may consider desirable,
expedient or necessary to give effect to the transactions contemplated by this
Ordinary Resolution.
[See Explanatory Note (vi)]
9.
Proposed Alternation of the Articles of Association
“That Article 118 of the Company be altered by deleting the existing Article 118 in its
entirety and substituting the following therefor:-
Special Resolution 1
Article 118
Subject to these Articles and to the Act, at each annual general meeting at least one
third of the Directors for the time being (or, if their number is not a multiple of three, the
number nearest to but not greater than one-third) shall retire from office by rotation,
provided that all Directors shall retire from office at least once every three years.”
[See Explanatory Note (vii)]
10.
To transact any other business which may properly be transacted at an Annual
General Meeting.
BY ORDER OF THE BOARD
James Finbarr Fitzgerald
Executive Chairman
7 October 2015
ANNUAL REPORT 2015 | CIVMEC 101
NOTICE OF ANNUAL GENERAL MEETING (cont’d)
EXPLANATORY NOTES:
(i) 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. Key information on Mr Chong can be found on page 29 of the Annual Report 2014/2015. There
are no relationships (including family relationship) between Mr Chong and the other Director or the Company or its
10% shareholders.
(ii) 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. Key information on Mr Wong can be found on page 29 of the Annual Report 2014/2015. There
are no relationships (including family relationship) between Mr Wong and the other Director or the Company or its
10% shareholders.
(iii) Mr. Douglas Owen 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. Key information on Mr Douglas Chester can be found on page 29 of the Annual Report
2014/2015. There are no relationships (including family relationship) between Mr Douglas Chester and the other
Director or the Company or its 10% shareholders.
(iv) The Ordinary Resolution No. 11 proposed in item no. 6 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.
(v) The Ordinary Resolution No. 12 proposed in item no. 7 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.
(vi) The Ordinary Resolution no. 13 proposed in item no. 8 above, if passed, will empower the Directors of the
Company, effective until the conclusion of the next Annual General Meeting of the Company or the date by
which the next Annual General Meeting of the Company is required by law to be held, whichever is the earlier, to
repurchase ordinary shares of the Company by way of on-market purchases or off-market purchases of up to ten
per centum (10%) of the total number of issued shares in the capital of the Company at the Maximum Price as
defined in the Appendix to the Company’s Letter to Shareholders dated 7 October 2015.
(vii) The Special Resolution no. 1 proposed in item no. 9 above, is to alter the Articles 118 of the Company’s Articles
of Association. Please refer to the Letter to Shareholders dated 7 October 2015 for more details.
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 more than one proxy, 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) 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.
102 CIVMEC | ANNUAL REPORT 2015
NOTICE OF ANNUAL GENERAL MEETING (cont’d)
EXPLANATORY NOTES (CONT’D)
Notes (cont’d)
(d) 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.
(g) In the case of joint shareholders, all shareholders must sign the instrument appointment a proxy or proxies.
Personal Data Privacy:
By submitting an instrument appointing a proxy(ies) and/or representative(s) to attend, speak and vote at the
Annual General Meeting and/or any adjournment thereof, a member of the Company (i) consents to the collection,
use and disclosure of the member’s personal data by the Company (or its agents or service providers) for the
purpose of the processing, administration and analysis of the Company (or its agents or service providers) of
proxies and representatives appointed for the Annual General Meeting (including any adjournment thereof) and the
preparation and compilation of the attendance lists, minutes and other documents relating to the Annual General
Meeting (including any adjournment thereof), and in order for the Company (or its agents or service providers)
to comply with any applicable laws, listing rules, regulations and/or guidelines (collectively, the “Purposes”), (ii)
warrants that where the member discloses the personal data of the member’s proxy(ies) and/or representative(s)
to the Company (or its agents or service providers), the member has obtained the prior consent of such proxy(ies)
and/or representative(s) for the collection, use and disclosure by the Company (or its agents or service providers) of
the personal data of such proxy(ies) and/or representative(s) for the Purposes, and (iii) agrees that the member will
indemnify the Company in respect of any penalties, liabilities, claims, demands, losses and damages as a result of
the member’s breach of warranty.
ANNUAL REPORT 2015 | CIVMEC 103
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104 CIVMEC | ANNUAL REPORT 2015
PROXY FORM
ANNUAL GENERAL MEETING
CIVMEC LIMITED
(Company No. : 201011837H)
(Incorporated in the Republic of Singapore)
Important
1. For investors who have used their CPF monies to buy Civmec Limited’s shares, the Annual Report is forwarded to them at the
request of their CPF Approved Nominees and is sent FOR INFORMATION ONLY.
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 OBSERVERS must submit their requests through their respective CPF Agent
Banks so that their Agent Banks may register, in the required format with the Company Secretary, by the time frame specified.
(Agent Banks: Please see Note 10 on required format.) Any voting instructions must also be submitted to their Agent Banks
within the time frame specified to enable them to vote on the CPF investor’s behalf.
*I/We,
(Name) (NRIC/Passport no.)
of (Address)
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 Amara Hotel Singapore, Level 3, Connection Room 1, 165 Tanjong Pagar Road, Singapore
088539 on Thursday, 29 October 2015 at 3pm and at any adjournment thereof.
*I/We direct *my/our *proxy/proxies to vote for or against the 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.
ANNUAL REPORT 2015 | CIVMEC 105
PROXY FORM
ANNUAL GENERAL MEETING
No. Ordinary Resolutions
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
Adoption of the Audited Financial Statements of the Company for the financial
year ended 30 June 2015 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 2015.
Approval of the payment of Directors’ fees of S$220,000 for the financial year
ending 30 June 2016 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.
13.
Renewal of Share Purchase Mandate.
No. Special Resolution
1.
The proposed Alteration of the Articles of Association.
For#
Against#
For#
Against#
Dated this ________day of ____________________ 2015
Total number of shares in
No. of Shares
(a) CDP Register
(b) Register of Members
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.
106 CIVMEC | ANNUAL REPORT 2015
PROXY FORM
ANNUAL GENERAL MEETING
Notes:
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. In case of joint shareholders, all shareholders must sign the instrument appointing a proxy or proxies.
9. The Company shall be entitled to reject the instrument appointing a proxy or proxies, if it is incomplete, improperly
completed, illegible or where the true intentions of the appointor are not ascertainable from the instructions of the
appointor specified on the instrument appointing a proxy or proxies. In addition, in the case of shares entered in
the Depository Register, the Company may reject any instrument appointing a proxy or proxies if a shareholder of
the Company, being the appointor, is not shown to have shares entered against his/her 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.
10. Agent Banks acting on the request of CPF Investors who wish to attend the Annual General Meeting as observers
are requested to submit in writing, a list of details of the members’ names, NRIC/Passport numbers, addresses
and numbers of Shares held. The list, signed by an authorised signatory of the Agent Bank, should reach the
Company Secretary, at the registered office of the Company not later than 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.
Personal Data Privacy:
By submitting an instrument appointing a proxy(ies) and/or representative(s), the members accepts and agrees to the
personal data privacy terms set out in the Notice of Annual General Meeting dated 7 October 2015.
ANNUAL REPORT 2015 | CIVMEC 107
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108 CIVMEC | ANNUAL REPORT 2015
CIVMEC Limited
Company Registration No. 201011837H
SINGAPORE
80 Robinson Road #02-00
Singapore 068898
AUSTRALIA
16 Nautical Drive, Henderson
Western Australia 6166
Telephone: +61 8 9437 6288
Facsimile: +61 8 9437 6388
Email: civmec@civmec.com.au
www.civmec.com