Civmec Limited Annual Report 2016

← All annual reports

FY2016 Annual Report · Civmec Limited

Loading PDF…

ANNUAL REPORT

2016

OUR STRATEGIC
INVESTMENTS WILL
STEER OUR FUTURE

TABLE OF CONTENTS

ABOUT OUR COMPANY

GOAL AND VALUES

A YEAR IN REVIEW

LOCATIONS AND FACILITIES

CAPABILITIES OVERVIEW

FINANCIAL HIGHLIGHTS

EXECUTIVE CHAIRMAN’S STATEMENT

CEO’S REPORT

OIL AND GAS

METALS AND MINERALS

INFRASTRUCTURE

MARINE AND DEFENCE

HEALTH, SAFETY, ENVIRONMENT & QUALITY

OUR PEOPLE

CORPORATE SOCIAL RESPONSIBILITY

BOARD OF DIRECTORS

EXECUTIVE TEAM

CORPORATE GOVERNANCE

CORPORATE REGISTRY

FINANCIAL REPORT

106

STATISTICS OF SHAREHOLDERS

108

NOTICE OF ANNUAL GENERAL MEETING

113

PROXY FORM

CIVMEC 2016 ANNUAL REPORT ABOUT US

E &

R I N

META

COMMITMENT

INNOVATION

VALUE DRIVEN

MAKE A DIFFERENCE

EXCELLENCE

COLLABORATION

Civmec is an integrated
multi-disciplinary
heavy engineering and
construction provider to
the metals and minerals,
oil and gas, infrastructure,
marine and defence
sectors.

TRUCTURE

INF

Our diverse capabilities enable us
to provide our clients with a wide
range of complementary in-house
core competencies and services
including heavy engineering,
modularisation, structural
mechanical and piping, electrical
instrumentation and control, site
civil works, precast concrete,
industrial insulation, access
solutions, maintenance, refractory
and offshore logistics.

Our strategically located
facilities are positioned in key
Australian energy, resources
and urban regions.

The headquarters and west coast
facility are based in Henderson,
Western Australia, 30 kilometres
south of Perth’s CBD. Our
120,000m2 site is strategically
located within the Australia Marine
Complex (AMC) with our heavy
engineering workshop covering
an area of 29,300m2 under one
roof, making it one of the largest
undercover waterfront workshops
of its kind in Australia.

Our east coast facility is based
in Newcastle, New South Wales,
just 14 kilometres from the port
of Newcastle. Our 227,000m2
site is strategically located with
535 metres of riverfront access
and offers our clients a range of
integrated services in line with
those provided at the west
coast facility.

In addition to this, we operate
specialist facilities in Darwin (NT),
Broome (WA), along with an office
in Sydney (NSW) and a presence
in Singapore.

Civmec Limited has been listed on
the Singapore Exchange (SGX)
since April 2012.

CIVMEC 2016 ANNUAL REPORT

GOALS AND
VALUES

Our goal is to grow a sustainable company that will deliver mutually beneficial outcomes to
all stakeholders for today and into the future.

We are focused on enhancing our future growth by embracing sound work ethics, innovation
and technology while providing outstanding service to all our customers.

Our core values drive us in every decision we make as a Company, enabling us to enhance
our service delivery and financial performance.

COMMITMENT
Our individual commitment to
safety and the environment
means our company targets
are achieved

INNOVATION
Our innovative thought
process develops our
company’s drive to
continually improve

VALUE DRIVEN
Our sustainable
growth drives our
company to deliver
value

MAKE A DIFFERENCE
Our desire to care for our
community means our
company can make long
term sustainable change

EXCELLENCE
Our aspiration to be the
best at what we do results
in our company being a
world-class service provider

COLLABORATION
Our focus on working
together means we will retain
our team and our clients for
now and the future

Civil, structual, mechanical, piping, electrical and commissioning
works on the Jimblebar Expansion Project

CIVMEC 2016 ANNUAL REPORT

3
3

CIVMEC 2016 ANNUAL REPORT YEAR IN
REVIEW

•

Received
certification for
Main Roads
Western
Australia

5
1
0
2
T
S
U
G
U
A

5
1
0
2
Y
L
U
J

•

Awarded additional
contract on the Perth
Stadium for precast
concrete

Completion of operational
readiness facility in
Henderson

Formed Civmec
DLG Pty Ltd

•

5
1
0
2
R
E
B
M
E
T
P
E
S

Launched new Defence
division and appointed
Mike Deeks CSC as
General Manager

Awarded first EPC contract
in JV with Sedgman
for BHP’s Jimblebar
Expansion Project

6 •
1
0
2
H
C
R
A
M

•

Appointment of two
new executives -
Damian Kelliher and
Charles Sweeney

Awarded first
fabrication contract in
New South Wales for
Port Kembla Coal
Terminal Reclaimer
Project

Acquisition of Forgacs -
Newcastle

• National RTO accreditation

6 •
1
0
2
Y
R
A
U
R
B
E
F

6 •
1
0
2
L
I

R
P
A

Civmec
Electrical &
Instrumentation
Pty Ltd certified
as an electrical
contractor

CIVMEC 2016 ANNUAL REPORT

•

Awarded further contract
for Prelude FLNG
Project involving the
fabrication of rigid jumper
spools and spreader bar

5
1
0
2
R
E
B
O
T
C
O

Received certification
by Transport Roads &
Maritime Services - NSW

6 •
1
0
2
Y
A
M

•

5 •
1
0
2
R
E
B
M
E
V
O
N

•

Formed Civmec
Construction & Engineering
Africa Limited

Formed Civmec
Construction & Engineering
Uganda Limited

Awarded further contracts
on the South Hedland
Power Station involving
SMPEI&C works

6 •
1
0
2
E
N
U
J

•

Accredited under the Australian
Government Building and Construction
WHS Accreditation Scheme

Awarded A$29 million North West
Rail Link contracts involving FRP and
precast concrete

Awarded first pre-stressed contract for
the Pacific Highway Upgrade Project

Established Forgacs Marine and
Defence Pty Ltd

CIVMEC 2016 ANNUAL REPORT

5
5

CIVMEC 2016 ANNUAL REPORT

LOCATIONS AND
FACILITIES

Our facilities are located
in key Australian regions
to meet our clients’
demands.

We further expanded our presence
to New South Wales, through
the acquistion of a facility in
Newcastle.

The establishment of the
Newcastle facility, now means
we have an east coast office and
facility as well as our headquarters
on the west coast of Australia.

This sets a platform for
continuous success while
positioning ourselves as a
sustainable organisation.

Our expansion included further
international growth - including
Uganda, Africa where we set up an
office for our subsidiaries Civmec
Construction & Engineering Africa
Limited and Civmec Construction
& Engineering Uganda Limited,
and we are working towards
securing works in the infrastructure
and water industry.

GLADSTONE

NEWCASTLE

SYDNEY

CIVMEC 2016 ANNUAL REPORT East Coast Facility - Newcastle

West Coast Facility - Henderson

CIVMEC 2016 ANNUAL REPORT

7
7

CIVMEC 2016 ANNUAL REPORT CAPABILITIES
OVERVIEW

We provide a complete turnkey solution, offering a range of capabilities across
the oil and gas, metal and minerals, infrastructure, marine and defence markets. With
our state-of-the-art facilities, highly experienced people, strong focus on safety and
quality, we are able to offer our clients the best service.

Heavy Engineering
We undertake both large and small fabrication
projects including structural steel, plate work,
tanks, vessels, pipe spooling, specialist welding
of exotic materials, beam manufacturing and
plate rolling.

Modularisation
We offer our clients efficient construction and
enhanced design and fabrication process through
our large custom-built manufacturing facility which
enables large modular assemblies to be fabricated
and assembled offsite into single units.

Site Civil Works
We provide a full range of civil services and are at the
forefront of creating innovative construction techniques,
with our dedicated on-site teams delivering the highest
level of workmanship and safety.

Precast and Pre-Stressed Concrete
We have the capability to manufacture reinforced concrete
products of all sizes, complexities and tight tolerances. We are
also able to work to stringent specifications associated with
concrete mixes and controlled curing temperatures.

Structural Mechanical and Piping
We can undertake complex site structural, mechanical
and piping projects, with the capacity to mobilise quickly to
undertake site installation projects locally and at
remote locations.

CIVMEC 2016 ANNUAL REPORT Industrial Insulation, Surface
Treatment and Fireproofing
We provide integrated insulation, surface
treatment and fireproofing, all of which are
supported from our technologically-advanced
engineering facilities.

Electrical Instrumentation
and Control
We are a licensed electrical contractor who
provides comprehensive turnkey electrical
instrumentation solutions to clients.

Offshore Logistics
We provide comprehensive integrated supply
chain solutions to the onshore and offshore
industries, with our strategic locations we ensure
our offshore logistics bases are ideally placed to
provide complete support to our clients.

Maintenance
We provide a single source solution for brownfield
industrial maintenance - including delivering
shutdowns, modifications and repair works across
the entire life cycle of the facilities.

Refractory
We have a team of experienced refractory
specialists who execute complex refractory
projects, performing works to international best
practice standards of engineering.

Access Solutions
We provide in-house scaffolding capabilities which
supports our business across projects, maintenance
and shutdown services providing full project
management throughout delivery.

CIVMEC 2016 ANNUAL REPORT FINANCIAL
HIGHLIGHTS

Revenue for the financial year
ended 30 June 2016 (“FY2016”)
amounted to S$396.8 million
compared to S$499.2 million a
year ago (“FY2015”), impacted by
the weaker market conditions in
the resources and energy sector,
as well as the Australian dollar’s
decline against the Singapore
dollar.

For FY2016 Earnings Before
Interest, Tax, Depreciation and
Amortisation (“EBITDA”) was
S$33.9 million while Earnings
Before Interest and Tax (“EBIT”)
was S$23.0 million.

Due to the change in the Group’s
project mix, which included more
infrastructure projects, and the
tighter margins in the resources
and energy sectors, gross profit
margins slipped slightly as
compared to the previous year.

Despite the decline, margins
achieved in FY2016 are still in

line with industry standards with
margins at 8.5% for EBITDA, 5.8%
for EBIT and 4.4% for NPAT.

This resulted in a return on equity
of 10.8% and earnings per share
of 3.45 cents.

Our prudent cash flow
management allowed the Group
to register a cash balance at year
end of S$39.8 million.

Total shareholders’ equity
increased 6.0% to S$160.8 million
as at 30 June 2016, despite the
weaker Australian dollar which
impacted reserves by S$4.8
million.

The chart below outlines our
comparative performance in our
present operating currency (A$).

REPORTING CURRENCY S$’000
Sales revenue
EBITDA
Net profit after tax
Operating cash flow
Earnings per share (cents)
Dividend per share (cents)
Return on equity (%)

OPERATING CURRENCY A$’000
Sales revenue
Net profit after tax

2016
396,752
33,946
17,292
34,924
3.45
0.7
10.8

2016
392,393
17,130

2015
499,153
45,802
30,308
44,957
6.05
0.7
20.0

2015
453,381
27.338

CHANGE
(20.5%)
(25.9%)
(42.9%)
(22.3%)
(43.0%)
-
(46.0%)

CHANGE
(13.4%)
(37.3%)

OPERATING CURRENCY (A$)

REVENUE

2016

2015

2014

2013

2012

392.4
453.4
374.9
319.1
252.9

A$392.4m

NET PROFIT AFTER TAX

2016

2015

2014

2013

2012

17.1
27.3
30.2
28.3
23.3

A$17.1m

CIVMEC 2016 ANNUAL REPORT REPORTING CURRENCY (S$)

REVENUE

2016

2015

2014

2013

2012

396.8
499.2
433.7
405.9
328.7

S$396m

EBITDA

2016

2015

2014

2013

2012

33.9
45.8
53.8
54.3
48.6

S$33.9m

NET PROFIT AFTER TAX

OPERATING CASH FLOW

2016

2015

2014

2013

2012

17.3
30.3
35.1
36.0
30.3

S$17.3m

2016

2015

2014

2013

2012

34.9
45.0
30.3
8.6
26.1

S$34.9m

EARNINGS PER SHARE

DIVIDENDS PER SHARE

2016

2015

2014

2013

2012

3.45
6.05
7.00
7.20
6.10

3.45 cents

2016

2015

2014

2013

2012

0.7
0.7
0.7
0.7
0.6

0.70 cents

Trial lift of subsea jumper spool for the Wheatstone
LNG Project

CIVMEC 2016 ANNUAL REPORT

EXECUTIVE
CHAIRMAN’S
STATEMENT

On behalf of the Board of
Directors, I am pleased to
present the Annual Report
of Civmec Limited for the
year ending 30 June 2016
(“FY2016”). Despite tighter
market conditions, it’s pleasing
to see that our Balance Sheet had
reasonable growth again this year.

Civmec maintained its disciplined approach to capital

management in FY2016 while continuing to invest in
strategic initiatives to broaden its services in core markets

and further expand into infrastructure.

As at 30 June 2016, the Balance Sheet remained in a strong
position with significant cash on hand and substantially undrawn

debt facilities.

This outcome ensures that the Company is well placed to continue
to pursue investment options and other initiatives while still having

due regard to market conditions.

Financial Performance

Sales revenue for the year was S$396.7 million down 20% and Net Profit after
Tax (NPAT) was S$17.3 million down 43% compared to the result in FY2015.

This was mainly due to the weakening Australian Dollar against the Singapore

Dollar and the drop of revenue from major projects.

Our disciplined approach to working capital management ensured the
maintenance of a healthy Balance Sheet. This approach helped the

Company achieve a cash position of S$39.8 million and cash flow from
operations of S$34.9 million for the year.

Dividends

The Board of Directors has recommended a cash dividend of

S$0.07 cents per share, subject to shareholders’ approval at our

Annual General Meeting on 27 October 2016.

The full year dividend payout represents a 20.6% payout

ratio. Dividends paid will continue to be reviewed in line

with trading conditions, requirements for significant cash

and investment opportunities.

The dividend will be paid on 15 December 2016.

THE BOARD IS VERY
MUCH FOCUSED ON
THE LONG TERM
SUSTAINABILITY
AND SUCCESS
OF THE BUSINESS

CIVMEC 2016 ANNUAL REPORT

Safety
Performance

The Company continued to
focus on our “Never Assume”
safety program and achieved an
improved safety performance.
As at 30 June 2016, our Total
Injury Frequency Rate (TRIFR)
was 3.71, a 2% improvement on
the previous year. A continuing
focus on safety leadership and
the progressive development of
processes and systems underlies
the Company improvement in
safety performance.

People

While some market conditions
have changed, the achievements
of FY2015/16, were only made
possible by the dedication and
efforts of our people. We as a
company remain committed to
attracting, developing and retaining
highly competent people, who live
our values and actively contribute
to our long-term overall success.

We retained a workforce in the
region of 1,600 employees during
the year, which was reasonably
consistent and somewhat in line
with the number of employees in
the previous year.

Executing Our
Strategy

Our strategy continues to adapt to
the market and our clients’ needs;
as conditions fluctuate, we adjust
our cost base where possible,
always with the aim to protect
margins and to ensure overheads
remain aligned with business
activity levels.

FY2016 has been a successful
year and while we haven’t
experienced financial growth, we

have had a year of consolidation
while still growing into new regions
and securing work from new
clients and gaining revenue from a
wider customer base

•

Sensible investment in people
and capability

Focus on costs at every level in
the business

It is our team’s ability to think
broadly and innovatively that has
allowed us to move forward and
finish the financial year positively
with our strategic investments
steering our future growth.

Future Focus

Our FY2016 results demonstrate
the success of the Group’s ability
to diversify through a broadening
of services and extending reach
into new markets.

During the year, we successfully
grew our capability with new work
in the Defence sector, first projects
on the East Coast and performing
large scale EPC work for BHP
Billiton.

It is these new sectors and
capabilities that will present new
and different opportunities for the
Group over the coming years.

We are looking forward to FY2017
where we will continue to seek
ways to strengthen the business.
The Board is very much focused
on the long term sustainability and
success of the business, building
on the achievements of the past
seven years.

Basic principles we will continue to
follow include:

•

Focus on innovation with the
aim of constantly improving
productivity

Preserve our balance sheet
strength and cash position

Continue sustainable
diversification

Our strategy is simple and is
based on our ambition to build a
diverse and strong engineering
and construction business where
we are innovative and capable
of delivering significant projects
in Australia and abroad in the
metals and minerals, oil and
gas, infrastructure and defence
markets.

Civmec’s ability to deliver on
its diversification strategy has
and will continue to be one of
its key strengths and will assist
in generating significant future
shareholder value.

I would like to take this opportunity
to thank you our shareholders for
your support and look forward to
your ongoing support on what will
be an exciting journey in FY2017
and beyond.

Finally, on behalf of the Board I
wish to thank every member of the
Civmec team for the contribution
they have made over the past 12
months. We are very fortunate to
have a highly committed, talented
hardworking team, and this is a
critical factor in our ongoing growth
and success as a business.

Yours sincerely

James Finbarr Fitzgerald
Executive Chairman
Civmec Limited

CIVMEC 2016 ANNUAL REPORT

CEO’S
REPORT

WE HAVE INVESTED IN
PLANT AND EQUIPMENT,
INNOVATIVE METHODS,
FACILITIES, SERVICE
OFFERINGS AND OUR
PEOPLE FOR THE
LONGEVITY OF THE
COMPANY

CIVMEC 2016 ANNUAL REPORT

In the 12 months ended
30 June 2016 (“FY2016”),
Civmec focused on
building capabilities, tapping
strategic opportunities,
expanding our geographical
footprint, improving productivity
and reducing costs.

We have delivered a strong performance amid the
ongoing challenges of the current economic conditions,

which demonstrates how our strategic thinking has

helped us capitalise on opportunities in various markets.
Throughout FY2016, we maintained a solid reputation
within markets such as oil and gas, metals and minerals,
and infrastructure. We also commenced operations in the

marine and defence sector.

We at Civmec owe our continued success to our valued
partners and employees. We will continue to expand our service

offerings to add even greater value for clients in the future.

Business Performance
Despite the slide in oil prices, we delivered strong results in the oil
and gas market. We received large orders for projects such as Prelude

FLNG and Greater Western Flank 2, as well as the Persephone project.
Our reputation and ability to produce works of both value and quality
keep us at the forefront of the industry.

FY2016 was another successful year for our metals and minerals
division. We completed major projects for blue chip clients,

increased our service offerings, and won our first major engineering,
procurement, construction and commissioning contract.

Since our announcement in FY2015 that we would establish
a standalone division for infrastructure, we have shown
strong growth in this division. We secured several contracts
for supply, delivery and installation on many of New South
Wales multi-billion dollar public transport projects.

This year also marked the beginning of a strategic
diversification into marine and defence, with the
appointment of former Royal Australian Navy
Commodore, Mr. Mike Deeks CSC, as General

Manager. Our increased focus in this sector has
already reaped rewards, with some new contracts in

defence and infrastructure.

opportunities to deliver sustainable
earnings across our businesses.

By drawing on our skilled
workforce and multi-disciplinary
capabilities, we will continue to
provide innovative solutions to
our clients and gain recognition
as a company that delivers on
its promises. On behalf of the
management, I would like to thank
the entire Civmec team for all their
hard work.

Yours sincerely

Patrick Tallon
Chief Executive Officer
Civmec Limited

In February 2016, we completed
the strategic acquisition of Forgacs
shipyard facilities and assets located
at Tomago, New South Wales. The
Hunter Region, with its river access
and close proximity to the port of
Newcastle, is a hub of economic
activity.

We plan to capitalise on
Forgacs’ rich history to develop
our Newcastle site as a multi-
disciplinary facility, which will
eventually replicate our current
headquarters and flagship facility
in Henderson, Western Australia.
We believe our presence in
Newcastle will provide significant
benefit to the Group in the
long term.

Strategy
Civmec’s success depends on
investments in our plant and
equipment, innovative production
methods, facilities, service
offerings and our workforce.

This year, we added bulk
earthworks, shutdown and
maintenance works and
electrical instrumentation
and control into our suite of
service offerings.

We are confident that these
strategic investments will
deliver substantial rewards in
the coming years. Going forward,
we will continue to develop our
capabilities to offer clients
end-to-end vertically integrated,
turn-key project solutions.

Our aim is to be the major heavy
engineering provider on Australia’s
east coast. This will position us as
leaders in the region and create
a variety of opportunities not only
for us, but for potential employees
and local service providers.

Our People
Our workforce remained consistent
with approximately 1,600 people
during FY2016 - our in-house
recruitment team were able to
source quality people who are
experts in their field for key
positions in the corporate office
and project teams.

Our people are instilled with
the right culture throughout
the Company, who live the
Civmec values. We believe in
the continuous investment in
our people, offering them further
training to encourage them to
reach their full potential and
grow as individuals.

The commitment of our people
ensures we have the right people
delivering the right projects,
providing our clients with
smart solutions, best technical
knowledge, and high performance
across our diverse services and
markets which underpins our
offering and success.

We pride ourselves on our ability
to treat all parties—whether
client, subcontractor, supplier or
employee—as key stakeholders.
This “stakeholder involvement”
state of mind extends to
Civmec operating with a policy
of transparency and honesty,
ensuring that our clients’ project
expectations are exceeded and
our employees are developed and
mentored by senior management.

Outlook
In past financial years, we
have invested in our facilities,
technology, people and service
offerings. We are now well-
positioned for future growth
and will continue to tap into

CIVMEC 2016 ANNUAL REPORT

OIL AND GAS

HIGHLIGHTS

• Turnover of S$90 million

•

Continued to be awarded large packages for Technip Oceania
on the Prelude FLNG project

•

Continued work for CKJV Gorgon LNG project

We continued to deliver
strong results in the oil
and gas market, despite
the slide in oil prices
and a large number
of projects reaching
completion and either
deferred or canceled due
to uncertainty.

We continued to be awarded large
packages thanks to our reputation
and ability to deliver both value and
quality. Our approach in this business
unit is to keep our overheads down
while preparing for medium term
opportunities in maintenance and
brownfield work.

We completed the Wheatstone
jumper spools and spreader
beams for Technip Oceania during
the final quarter of 2015. Work
is now underway for Technip
Oceania on the Prelude Floating
Liquefied Natural Gas (FLNG) rigid
jumper spools due for completion

late 2016.

Since the completion of the
suction piles for the Prelude
FLNG project early 2016, we
have further strengthened our
relationship with Technip Oceania
and were subsequently awarded
the fabrication of the riser heel
anchors and chain tensioners. We
are positioned for sustainment in
the oil and gas market through our
relationships with major oil and
gas providers and contractors.

Other work completed includes
supporting Wesfarmers LPG
with both labour and fabrication
on a brownfield project based at
their Kwinana facility. We continue
to provide piping and structural
fabrication items for Woodside
to support the Karratha Life
Extension Project through
both WorleyParsons and
WoodGroup.

We also completed the fabrication
of Woodside’s Persephone

subsea manifold for FMC in
December 2015 and have since
been awarded the Woodside
Greater Western Flank 2 Manifolds
project from FMC, with fabrication
starting in September 2016. We
are delighted to strengthen our
relationship with FMC and with
Woodside. The work we have
carried out on the Persephone
project demonstrates our ability to
win repeat work in the market from
our existing client base. This is a
good indication that the client is
satisfied with our service.

Analysts expect oil and gas prices
to stay low during 2016-2017.
However, the long-term outlook for
Australia is generally good, and
we are strategically positioning
ourselves with a positive outlook in
mind while investing in the future.

CIVMEC 2016 ANNUAL REPORT Assembly of spools for the Prelude FLNG Project

Suction piles for the Prelude FLNG Project

Load out of jumper spools for the Wheatstone LNG Project

Cladding works for the Ichthys LNG Project

CIVMEC 2016 ANNUAL REPORT METALS AND
MINERALS

HIGHLIGHTS

• Turnover of S$170 million

• S$68 million in new contract awards and extensions

•

Additional in-house service offering to include
electrical, instrumentation and control

Awarded first major Engineering, Procurement,
Construction and Commissioning contract

Our Metals and Minerals
division has had
another successful year
completing major projects
for blue chip clients and
increasing our service
offering.

Even with the key mining
customers significantly reducing
capital expenditure, we have been
able to secure packages with
current and new clients.

During FY2016, we focused on
growing our capabilities to ensure
we can provide a full turnkey
solution, expanding to include
bulk earthworks and electrical
instrumentation and control into
our service offering.

We completed a contract for
Samsung C&T at the Roy Hill

Iron Ore project - proving our
capabilities through execution. We
successfully completed scopes
including site civil works, trenching
and underground services,
installation of a rotary car dumper
- which tips two ore cars at a time
- along with associated structural,
mechanical, piping, electrical and
commissioning works.

Continuing our long standing
relationship with Rio Tinto we
completed a contract for the Fuel
Infrastructure project at Parker
Point and the Brockman Fuel
Hub Construction. The scope of
work involved the site civil works,
structural mechanical and piping
erection works and the electrical
and instrumentation erection
works within the existing Rio Tinto
operations.

Our relationship with Sedgman

Ltd saw us deliver the civil and
structural, mechanical, platework
and pipework installation works
at Alcoa’s Kwinana Filtration
Facility. The works were located
at the existing filtration plant in
Kwinana, Western Australia and
involved the provision of offsite
fabrication and assembly services,
onsite structural and mechanical
installation, onsite piping
fabrication and installation,
onsite platework assembly
installation and onsite Bondek
and concrete works.

In September 2015 we were
awarded our first major
Engineering, Procurement,
Construction and Commissioning
(EPCC) contract for A$145 million
with joint venture partner Sedgman
Limited to deliver civil, structural,
mechanical, piping, electrical
and commissioning works on the

CIVMEC 2016 ANNUAL REPORT Jimblebar Expansion
project for BHP Billiton.

Building on our
relationship with IHI
Engineering, we were able
to secure further packages
on the South Hedland Gas
Turbine Power Station to
deliver a vertical package
solution. We completed the
earthworks and site civil works
packages in 2015 and were then
awarded fabrication and SMPEI&C
packages, which is currently
underway and due for completion
late 2016.

We have also been awarded two projects
by AngloGold Ashanti at the Tropicana
Gold Mine Optimisation project north-east
of Kalgoorlie, Western Australia.
The scope of works included delivering a
vertical package solution involving fabrication,
site civil works, onsite tank erection, structural
mechanical piping erection works and the
electrical instrumentation and control within the
operations area of the existing gold mine.

In March 2016, we were awarded our first fabrication
contract for New South Wales. This contract included
supply, fabrication, surface treatment and assembly of
primary structures at the Port Kembla Coal Terminal
for ThyssenKrupp.

As many plants are entering the maintenance
lifecycle, we have created a team within our metals
and minerals division that focuses solely on minor works
and maintenance. As a result we have secured minor
maintenance works with Fortescue Metals Group (FMG) at
some of their mine sites in the Pilbara region of WA.

The continuing success of the metals and minerals division is
complemented by our multidisciplinary service offering and the
dedication of senior management and key personnel throughout
the tendering and execution phases.

Civil and structual, mechanical platework and pipework
installation works at Kwinana Filtration Facility

Fabrication for the Port Kembla Coal Terminal

SMPEI&C works at the South Hedland
Gas Turbine Power Station

Vertical package solution at the
1919
Tropicana Gold Mine Optimisa-
tion Project

INFRASTRUCTURE

HIGHLIGHTS

•

Annual turnover S$136 million

S$79.3 million in new contract awards
and extensions

Awarded significant contracts
on major infrastructure projects in
New South Wales

20
20

CIVMEC 2016 ANNUAL REPORT

CIVMEC 2016 ANNUAL REPORT Structual steelwork and precast elements at Perth Stadium

Since establishing our
infrastructure division
last year, we have
continued to grow
in the infrastructure
market during the 2016
financial year and we
added additional service
offerings - including
bulk earthworks and
electrical instrumentation
and control to expand
our multidisciplinary
construction and
engineering solutions.

We have continued work on the
Perth Stadium, an iconic Western
Australian infrastructure project
that will be home to future sporting
and entertainment events in
Perth, carrying out the supply
and installation of the structural
steelworks and precast elements
packages. This has been an
exciting operation, and we are
thrilled to be a part of this local
project. Completion of this project
is expected to be December 2016.

We continue to win work in a
tight market in Western Australia.
In July 2015, we were delighted
to be awarded the contract to
repair concrete defects related
to the precast concrete works for
York Marine and Civil JV on the
Fremantle traffic and rail bridge
pier protection project.

With the majority of the
infrastructure investment occurring
on the east coast of Australia,
we have established ourselves

there and have successfully
secured work during the year.
The first infrastructure project in
NSW was awarded by Pacifico
(ACCIONA Ferrovial JV) on the
Pacific Highway project. We set
up a precast facility in Macksville
to accommodate the supply
of precast bridge barriers and
transfloor panels for the projects.
Since the original award of this
project, we have subsequently
been awarded a further package
for pre-stressed planks.

In August 2015, we achieved
roads and bridges certification
for Main Roads Western Australia.
Following this we also obtained
certification as Road Bridge
Specialists by Roads, Maritime
and Marine in New South Wales.

Since obtaining these
certifications, we were awarded
two east coast fabrication
contracts, the first for the Narellan
Road Stage B works for the
supply, delivery and site assembly
of bridge girders and supply
of a bridge support tower and
traffic sign frame. The second for
the Nepean River shared path
bridge for the fabrication, off-site
trial assembly, delivery and site
assembly of a 300-metre-long
bridge. Both contracts were
awarded by Seymour Whyte.

Major awards for Sydney CBD
projects were secured in May
2016 for the manufacturing and
delivering of precast planks,
beams and onsite precast concrete
arrestor tubs for McConnell Dowell
at the Barangaroo Ferry Hub
which will connect people to the

Sydney CBD, and the supply and
delivery of precast bridge parapets
for the WestConnex M4 Widening
project between Parramatta and
Homebush NSW for Rizzani CPB
Joint Venture.

In June 2016, we secured two
packages on the Northwest Rail
Link project, for NRT Infrastructure
JV (NRTIJV). This is the first stage
of Sydney’s A$8.9 billion public
transport infrastructure project. The
first package of works to be carried
out will supply critical precast
components to the site. The
second package awarded to us
is to carry out site concrete works
as well as precast installation for
certain individual stations.

Since acquiring the Newcastle
site in NSW we have commenced
redevelopment of the site. With a
dedicated pre-stressing concrete
workshop equipped with state-of-
the-art plant and equipment, we
offer the state a service that is in
high demand for various high
profile public transport
infrastructure projects.

Our outlook for the infrastructure
market is positive. Combined with
our recent success on the east
coast of Australia and our strategic
investment in the Newcastle
area, we see this region as a key
contributor to the future growth
of our business. We are building
strong relationships with long-
established companies that are
highly successful and key players
in the infrastructure market.

CIVMEC 2016 ANNUAL REPORT MARINE AND
DEFENCE

HIGHLIGHTS

•

Marine and Defence established
as a standalone business market

Acquisition of major marine and
defence company Forgacs

We made the
strategic decision to
expand our market focus
to include a dedicated
Marine and Defence
division in September
2015, where we appointed
a former Royal Australian
Navy Commodore,
Mr. Mike Deeks CSC, as
General Manager -
Marine and Defence to
head the division.

Late 2015, we demonstrated how
our skills and capabilities apply to
the defence market through the
construction of a submarine hull
section. This was completed to show
the Defence Industry that our people
can design the production apparatus,
build processes and produce a
quality product meeting the exact
requirements of modern submarine
designers for dimensional accuracy
and weld quality.

22
22

CIVMEC 2016 ANNUAL REPORT
CIVMEC 2016 ANNUAL REPORT

With the announcement of
AUD$200 billon spending over the
next 10 years, we have identified a
number of significant opportunities
in the defence market, including
maintenance and in-service support
of Australian frigates, building
of future submarines, building
of future ships, and defence
infrastructure construction.

Therefore, building on Civmec’s
inherent expertise and history in
civil construction projects, we are
pursuing a number of opportunities
in Defence Infrastructure.
The 2015 Defence White Paper
identified a significant investment
in facilities and infrastructure to
support new equipment and the
overall growth of the Australian
Defence Force in the coming
years. We are aiming to compete
for work packages in a range of
projects on airbases, maritime
facilities and barracks across
Australia.

As a part of this strategy, we
have secured works on projects

around Australia. Including
work on the Helicopter Aircrew
Training System (HATS) at HMAS
Albatross near Nowra, New
South Wales, carrying out the civil
works package for earthworks,
excavation, demolition, roadworks
and landscaping services. A further
precast and prestressed concrete
package has recently been
awarded at the SAS headquarters
at the Campbell Barracks in
Western Australia.

In line with our strategic growth
plans, we acquired the name
of the well-known marine and
defence company Forgacs, along
with their shipyard facilities and
assets located at Tomago, New
South Wales.

We saw the Newcastle region
as a potential hub of activity.
This helped solidify our decision
to establish a presence in the
area. Over the next three years,
we plan to capitalise on the rich
history and name of Forgacs and
further develop the Newcastle site

to operate as a multi-disciplinary
facility which will in future replicate
our flagship operations at
Henderson, Western Australia.

The recent rebranding of wholly
owned Forgacs Marine and
Defence is part of our initiative to
become the vehicle through which
our Marine and Defence business
is pursued.

The acquisition of Forgacs allows
us to combine the rich history
of Forgacs - a successful ship
and module builder and vessel
maintenance company - with our
experience as an integrated, multi-
disciplined heavy engineering and
construction services provider to
offer a range of capabilities and
services to the marine, defence
and infrastructure sectors.

Our strategy is to have a
long standing future in the
defence industry - working on
prestigious projects and re-
energising the Forgacs name
within the industry.

CIVMEC 2016 ANNUAL REPORT

HEALTH, SAFETY,
ENVIRONMENT
AND QUALITY

Safety
It is vital for us to have
commitment from our personnel
to achieve zero harm across the
Company so that each day at
Civmec is a ‘Safe Day Good Day’.

Our goal of zero harm requires
continuous improvement
throughout our business.
Our emphasis is to achieve this
by allowing our employees to take
more responsibility for their own
safety as they carry out their roles.

A team effort from every individual
in conducting our activities in the
safest manner possible is the
cornerstone of our business.

Environment
Since our accreditation to
ISO14001 last financial year,
we have significantly improved
our facility and site-based
environmental management
strategies. Key focus areas
are: integrating environmental
management into safety and
health management systems,
improving our resource efficiency
through waste minimisation,
recycling and diverting waste to
landfills and to continue to improve
on our environmental performance
across the business.

Quality
With the move into Marine and
Defence we continue to set high
quality standards across the business.
We pride ourselves on our high
standards, a level achieved through
our work of some of the most complex
fabrication and construction projects.
We are a strong believer that this
pride plays a big part in the ongoing
production of a quality product and
our culture is based around
achieving continuous excellence.

With our continuous high
standards, we acquired
accreditation to the
ISO9001:2015 standard
early 2016 to keep us
current and relevant in
the marketplace. This
new standard sets a
structure making it
easier to use in
conjunction with
other management
system standards.

CIVMEC 2016 ANNUAL REPORT WHS Accreditation
Scheme
We continue to increase our
accreditations which assists
in broadening our opportunities
and capabilities. We achieved
Australian Government
Building and Construction WHS
Accreditation Scheme from the
Office of the Federal Safety
Commissioner, which entitles
us to enter into head contracts
for building work that is funded
directly or indirectly by the
Australian Government.

Never Assume
Program
In FY2016, we implemented a
program called ‘Never Assume’,
which was developed to further
advance the culture of our
organisation across key business
areas of Safety, Environment,
Quality and the Community.
The program is underpinned by
our values and guiding behaviours
which defines:

• The way we conduct our

operations;

• The way we treat our

employees;

• The way we treat our

customers; and

• The way we treat the wider

community.

CIVMEC 2016 ANNUAL REPORT

25
25

CIVMEC 2016 ANNUAL REPORT PEOPLE

Essential to our
continual growth and
success are our high
performing personnel
who are committed,
dedicated and
enthusiastic about the
future of the Company.
We have been able to
attract and retain loyal
personnel who live our
core values and add
to the success of our
business.

We are committed to investing in our personnel and the future of our
business. As a part of our Registered Training Organisation (RTO) we
have the opportunity to assist our people in learning and development
programmes.

We continued to welcome apprentices into the business as a part of
our ongoing Apprenticeship Program. Over the last 12 months we
have trained personnel who are on their way to becoming qualified
boilermakers, carpenters, riggers and welders. Our RTO delivered more
than 1,658 nationally accredited courses, 3,290 VOCs and 330 non-
accredited courses, all of which we have received feedback from our
clients’ surveys saying they are 100% satisfied.

With our newly acquired facility in Newcastle, our goal is to be the new
major heavy engineering provider on the east coast. This involves an
expansion of our workforce. We will be involved within the region to
create a variety of opportunities for potential employees of the Company -
offering them employment, apprenticeships and training opportunities.

Investing in the future of the Company is apparent in our people. We
continue to build a diverse workforce to suit varied services that meet
the demands of the oil and gas, metals and minerals, infrastructure and
marine and defence markets.

CIVMEC 2016 ANNUAL REPORT Indigenous
Engagement
We have a diverse workforce which consists of people
from various cultures and backgrounds. At Civmec our
vision is to make a positive difference in the lives of
Aboriginal and Torres Strait Islander people.

In July 2015, we formed a joint venture with David
Liddiard Group (DLG) - our subsidiary is called Civmec
DLG - which aims to provide Indigenous Australians with
more opportunities to participate in the economy through
employment and career transition, and has a vision to
create a nation in which Indigenous and non-Indigenous
Australians share social and financial equality.

We continue to finalise our Reconciliation Action Plan
(RAP), which will cover the 2016-2018 period.
The purpose of our RAP is to build on our commitment
towards making a difference and ensure that our
commitment to provide Aboriginal and Torres Strait
Islanders employment, training opportunities and cultural
diversity awareness within our organisation, is authentic.

Pantone 368 C

Pantone
Reflex Blue C

CIVMEC 2016 ANNUAL REPORT CORPORATE
SOCIAL
RESPONSIBILITY

We are committed to
sustainable development
of our business by
contributing to the welfare
of people, our community
and the environment.

Fundamental to this commitment is our

contribution to the community which is

underpinned by our values and actions of both
the Company and each of our staff. This financial

year, we have seen an increase in staff and

project team participation in philanthropic activities

across the business.

Sun Valley Elementary School, Phillippines

CIVMEC 2016 ANNUAL REPORT Civmec donated Christmas hampers to the St Patricks Community Centre

Children
and
Education
We support a number of
charities focused around

children and education
throughout the year, including

Princess Margaret Hospital
Foundation, Starlight Foundation,

David Wirrpanda Foundation and

the Dreamfit Foundation.
These charities offer children

opportunities that they would not
usually have access to, be it therapy,

activities, education or to just put a

smile on their face.

Health
Through ongoing fundraising efforts by Civmec
staff we have raised critical funds for the Breast

Cancer Foundation WA, Autism Association of
WA, The Teal Sisters Foundation, Melanoma WA
and Multiple Sclerosis Society of WA. These funds
will assist with further research into these diseases
to hopefully finding a cure one day.

Sporting and Community
We have made significant contributions to the
St Patrick Community Centre, WA GAA Minor Football
Committee, Morley Gaels Ladies GFC, Claddagh
Charity Golf Day, Cockburn Billycart Festival, Cockburn
Basketball Association. These funds will assist in
contributing to emergency relief, housing crisis,
sponsoring of sporting groups to attend competitions
and participate in sporting events.

Project Based Initatives
Our projects around Australia have come together to
raise vital funds for charities and communities of all
kinds including:

•

Waroona Fire Appeal (Perth Stadium)

The Care for Hedland Environmental Association
(South Hedland Power Station)

Sun Valley Elementary School, Philippines
(South Hedland Power Station)

Gold Diggers Social Club
(Tropicana Gold Mine Project)

CIVMEC 2016 ANNUAL REPORT 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.

CIVMEC 2016 ANNUAL REPORT (Left to right: Douglas Owen Chester, Kevin James Deery, James Finbarr Fitzgerald, Patrick John Tallon, Wong Fook Choy Sunny, Chong Teck Sin)

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 Australia’s
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 China Medical (International)
Group 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.

CIVMEC 2016 ANNUAL REPORT 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 41 years
in the construction and fabrication
industry, having worked on major
projects for the oil and gas, mining,
resource 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. Mr. Bowes brings more
than 21 years’ experience and
knowledge to this role. Prior to
joining our Group, Mr. Bowes
was General Manager (Marketing
and Proposals) at Ausclad Group
of Companies (AGC) for eight
years, where he was in charge of
the management of the Business
Development, and the Marketing
and Estimating departments.

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 an ASX200 Listed Company,
she has spent more than 16 years
overseeing major acquisitions and
implementing numerous systems.
A highlight during 2015/16 for
Ms. Campbell was the acquisition
of Forgacs Engineering.

CIVMEC 2016 ANNUAL REPORT Charles Sweeney
General Manager
Metals and Minerals

Damian Kelliher
Group Manager
Support Services

Mr. Charles Sweeney joined our
Group in 2010 and is responsible
for managing the Group’s
metals and minerals division.
With a passion for effective
leadership, Mr. Sweeney is
focused on developing the metals
and minerals department and
client solutions. He has been
fundamental in the completion
of key projects including Hope
Downs 4, Yandi Sustaining Project,
Nammuldi Below Water Table
Project and Roy Hill Iron Ore.

Mr. Damian Kelliher joined
our Group in 2015 and is
responsible for the management
and coordination of our support
services department which
encompasses the functions of
human resources management,
recruitment, industrial relations,
commercial, procurement, legal
and business systems. Having
previously held various senior
positions in CPB Contractors
(formally Leighton Contractors
Pty Ltd) including Commercial
Director on the Gorgon LNG
Project, Civil and Underground
Services package.

CIVMEC 2016 ANNUAL REPORT Load out of spools for the Prelude FLNG project

34
34

CIVMEC 2016 ANNUAL REPORT

CIVMEC 2016 ANNUAL REPORT FINANCIAL
REPORT

TABLE OF CONTENTS

DIRECTORS’ STATEMENT

REPORT ON CORPORATE

GOVERNANCE

CORPORATE REGISTRY

INDEPENDENT AUDITORS’ REPORT

CONSOLIDATED INCOME
STATEMENT

CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME

STATEMENTS OF
FINANCIAL POSITION

CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY

CONSOLIDATED STATEMENT

OF CASH FLOWS

NOTES TO THE FINANCIAL
STATEMENTS

STATISTICS OF SHAREHOLDERS

NOTICE OF
ANNUAL GENERAL MEETING

PROXY FORM

106

108

113

CIVMEC 2016 ANNUAL REPORT

35
35

CIVMEC 2016 ANNUAL REPORT
DIRECTORS’ STATEMENT

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 2016 and the statement of financial position of the Company as at 30 June 2016.

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 59 to 105 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 2016 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.

1. DIRECTORS

The directors of the Company in office at the date of this report are as follows:

Mr. James Finbarr Fitzgerald

Mr. Patrick John Tallon

Mr. Kevin James Deery

Mr. Chong Tek Sin

Mr. Wong Fook Choy Sunny

Mr. Douglas Owen Chester

Executive Chairman

Chief Executive Officer

Chief Operating Officer

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 37.

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:

THE COMPANY

Mr. James Finbarr Fitzgerald

Mr. Patrick John Tallon

Mr. Kevin James Deery

HOLDINGS REGISTERED IN
THE NAME OF DIRECTORS

HOLDINGS IN WHICH A DIRECTOR IS
DEEMED TO HAVE AN INTEREST

At 1.7.15

At 30.6.16

At 1.7.15

At 30.6.16

54,000

NO. OF ORDINARY SHARES

54,000

97,620,806

97,566,806

13,295,250

97,720,806

97,566,806

13,295,250

There was no change in any of the above-mentioned interests between the end of the financial year and
21 July 2016.

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.

CIVMEC 2016 ANNUAL REPORT DIRECTORS’ STATEMENT (cont’d)

4. 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 Tek Sin and Mr. Douglas Owen Chester.

The CESOS forms an integral and important component of the employee compensation plan, which is designed
to primarily reward and retain key management and employees of the Company whose services are integral to
the success and the continued growth of the Company.

Principal terms of the Scheme

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;

the actual number and terms of any Options to be granted to them have been specifically approved by
Shareholders who are not beneficiaries of the grant in a general meeting in separate resolutions for each
such Controlling Shareholder; and

all conditions for their participation in the CESOS as may be required by the regulation of the SGX-ST
from time to time are satisfied.

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.

CIVMEC 2016 ANNUAL REPORT

DIRECTORS’ STATEMENT (cont’d)

4. SHARE OPTIONS (cont’d)
CIVMEC LIMITED EMPLOYEE SHARE OPTION SCHEME (cont’d)
Principal terms of the Scheme (cont’d)

Termination of Options

Special provisions in the rules of the Scheme deal with the lapse or earlier exercise of Options in circum-
stances which include the termination of the participant’s employment in the Company, the bankruptcy of the
participant, the death of the participant, a take-over of the Company and the winding-up of the Company.

vi. Acceptance of Options

The grant of options shall be accepted within 30 days from the date of offer. Offers of options made to
grantees, if not accepted by the closing date, will lapse. Upon acceptance of the offer, the grantee must pay
the Company a consideration of S$1.

vii. Duration of the Scheme

The Scheme shall continue in operation for a maximum duration of ten years and may be continued for any
further period thereafter with the approval of the shareholders by ordinary resolution in general meeting and
of any relevant authorities which may then be required.

Options Granted under the Scheme

As at 30 June 2016, 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

5,000,000

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 2016 are as follows:

EXPIRY DATE

11 September 2023

EXERCISE PRICE

$0.65

NUMBER OF OPTIONS

5,000,000

5. 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 Tek 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.

CIVMEC 2016 ANNUAL REPORT

DIRECTORS’ STATEMENT (cont’d)

5. PERFORMANCE SHARE PLAN (cont’d)
CIVMEC LIMITED PERFORMANCE SHARE PLAN (cont’d)

Principal terms of the Scheme

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:

their participation in the Civmec Performance Share Plan, and;

the actual number and terms of the Awards to be granted to them have been approved by independent
Shareholders of the Company in separate resolutions for each such person.

ii.

Size of the 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.

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 ten years and may be continued for any
further period thereafter with the approval of the shareholders by ordinary resolution in general meeting
and of any relevant authorities which may then be required.

Awards Granted under the 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

CIVMEC 2016 ANNUAL REPORT

DIRECTORS’ STATEMENT (cont’d)

6. AUDIT COMMITTEE

The members of the Audit Committee (“AC”) at the end of the financial year are as follows:

Mr. Chong Tek Sin

Mr. Wong Fook Choy Sunny

Mr. Douglas Owen Chester

Chairman

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.

7. INDEPENDENT AUDITORS

The independent auditors, Moore Stephens LLP, Public Accountants and Chartered Accountants, have expressed
their willingness to accept re-appointment.

On behalf of the Board of Directors

James Finbarr Fitzgerald
Chairman

Patrick John Tallon
Director

Singapore

31 August 2016

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE

30 June 2016

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
greater transparency, protecting the interests of 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 2016 (“FY2016”) 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 development of the Company.

Apart from its statutory duties and responsibilities, the Board oversees the management and affairs of the Group
and approves the Group’s corporate strategy and 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, including ethical 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 major investments 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 the annual report and audited financial statements;

monitoring Management’s performance;

recommending share issuance, dividend payments and other returns to shareholders;

ensuring accurate, adequate and timely reporting to, and communication with Shareholders; and

assuming responsibility for corporate governance.

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.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

BOARD’S CONDUCT OF AFFAIRS (cont’d)
PRINCIPLE 1 (cont’d)

All the Board members are actively engaged and play an important role in ensuring good corporate governance
within the Company. Visits to the Company’s business premises are arranged to acquaint the non-executive
Directors with the Company’s operations and ensure that all the Directors are familiar with the Company’s
business, policies and governance practices.

The profile of each director is presented in the section headed “Board of Directors” of this Annual Report.

The Directors have access to the Company Secretary and Management. They may also seek independent
professional advice concerning the Company’s affairs when necessary. Prior to their respective appointments to
the Board, each of the Directors was given an orientation and induction programme to familiarise them with the
Company’s business activities, strategic directions, policies and key new projects. In addition, newly appointed
directors are introduced to the senior management team. Upon appointment of each Director, the Company
provides 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 described in the
following 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 Constitution of the Company provides for directors
to conduct meeting by teleconferencing or videoconferencing or other similar means of communication whereby
all persons participating in the meeting are able to hear each other. The Board and Board Committees may also
make decisions by way of circulating resolutions.

The number of Board and Board Committee meetings held and attended by each Board member during the
financial year ended 30 June 2016 (“FY2016”) is set out below: -

BOARD COMMITTEES

BOARD

AUDIT
COMMITTEE

REMUNERATION
COMMITTEE

NOMINATING
COMMITTEE

RISKS AND
CONFLICTS
COMMITTEE

NO. OF MEETINGS HELD

James Finbarr Fitzgerald

Patrick John Tallon

Kevin James Deery

Chong Teck Sin

Wong Fook Choy Sunny

Douglas Owen Chester

* N/A = Not Applicable

N/A

NO. OF MEETINGS ATTENDED

N/A

All Directors are updated regularly on changes to the Company’s policies and are provided with 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 are given
briefings by the Management on the business activities of the Group.

The Company encourages the Directors to learn and develop as directors. The Directors may attend training,
conferences and seminars which may have a bearing on their duties and contribution to the Board, organised
by 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 the accounting standards and
industry developments and business initiatives.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

BOARD’S CONDUCT OF AFFAIRS (cont’d)
PRINCIPLE 1 (cont’d)

The briefing, updates and training programmes undertaken by individual Directors in FY2016 included:

ACRA-SGX-SID Audit Committee Seminar - Raising the Bar for Financial Reporting and Audit

ii. AICD - Boardroom Financial Acumen

iii. AICD - Directors’ Workshop: The new silk road

iv. AICD - The Essential Director Update 15

BOARD COMPOSITION AND GUIDANCE

PRINCIPLE 2
Strong and independent element on the Board.

The Board comprises six (6) Directors, three (3) of whom are Executive Directors and the remaining three (3) directors
being Independent Directors. The Company has adopted the Code’s definition of “Independent Director” and its guidance
in respect of relationships which would deem a Director to be regarded as non-independent. This composition exceeds
the Code’s requirement of at least one-third of the Board of Directors to comprise independent Directors.

No individual or group of individuals dominates the Board’s decision-making. Collectively, the Executive
Directors and Independent Directors bring a wide range of experience and expertise as they all currently occupy
or have occupied senior positions in industry and public life, and as such, each contributes significant weight
to Board decisions. The Board, collectively, possess an appropriate balance and diversity of skills, experience
and knowledge of the Company, which provides core competencies such as accounting or finance, business or
management experience, industry knowledge, strategic planning experience and customer-based experience
and knowledge.

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 46 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 Independent 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. As well the NC considers
the actions and conduct of the Independent Directors, including in formal Board meetings, to assess their
independence. The NC has carefully reviewed and subsequently determined that the Independent Directors are
independent. None of the Independent Directors has served on the Board beyond nine (9) years from the date of
his first appointment. Guideline 2.4 of the Code is therefore not applicable to the Board. The Board will, however,
consider developing a policy on this at the appropriate time. 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 co-ordinate and lead the Independent Directors and to provide a non-executive perspective
and to bring about a healthy balance of view-points.

The Non-Executive 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 co-operation 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.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

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 an
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.

As mentioned earlier, the Company has appointed a Lead Independent Director, Mr Chong Teck Sin. As well as
representing the views of the Independent Directors, he is also available to facilitate a two-way flow of information
between shareholders, the Chairman and the Board.

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 Nominations Committee (NC) to make recommendations to the Board on all
board appointments. The NC comprises three members, all of whom including the NC Chairman are Independent
Non-Executive Directors:

Mr. Douglas Owen Chester

Mr. Chong Teck Sin

Mr. Wong Fook Choy Sunny

Chairman

Member

The formal terms of reference of the NC are to:

v. nominate Directors (including Independent Directors) taking into consideration their 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 the Group;

vi.

review and recommend to the Board the composition of the Audit Committee, Remuneration Committee and
Risks and Conflicts Committee;

vii.

re-nominate Directors for re-election in accordance with the Constitution at each annual general meeting and
having regard to the Director’s contribution and performance;

viii. determine annually whether or not a Director of the Company is independent;

ix.

decide whether or not a Director is able to and has been adequately carrying out his duties as a Director;

assess the performance of the Board as a whole and contribution of each Director to the effectiveness
of the Board;

xi.

review and recommend succession plans for Directors, in particular, the Chairman and the CEO; and

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

BOARD’S MEMBERSHIP (cont’d)
PRINCIPLE 4 (cont’d)

xii. 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 short-listed 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 Constitution, 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.
2.
3.
4.
5.
6.

James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Wong Fook Choy Sunny
Douglas Owen Chester

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

BOARD MEMBERSHIP (cont’d)
PRINCIPLE 4 (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.

Mr Chong Teck Sin was appointed a Director of the Group’s subsidiary, Civmec Construction & Engineering Pte. Ltd.

The Company does not have a practice of appointing alternate directors.

The date of Director’s initial appointment, last re-election and their directorships are set out below:

NAME OF
DIRECTOR

DATE OF
INITIAL
APPOINTMENT

DATE OF
LAST
RE-ELECTION

PRESENT
DIRECTORSHIPS IN
LISTED COMPANIES

PAST DIRECTOR-
SHIPS IN LISTED
COMPANIES*

James Finbarr Fitzgerald

27 Mar 2012

29 Oct 2015

Patrick John Tallon

Kevin James Deery

Chong Teck Sin

27 Mar 2012

29 Oct 2015

27 Mar 2012

29 Oct 2015

27 Mar 2012

29 Oct 2015

Blackgold
International
Holdings Limited(2)

AVIC International
Maritime Holdings Limited

Changan Minsheng
APLL Logistics Co., Ltd(1)

InnoTeck Limited

Accordia Golf Trust
Management Pte Ltd.

Wong Fook Choy Sunny

27 Mar 2012

29 Oct 2015

Mencast Holdings Ltd

KTL Global Ltd

Albedo Limited

Excelpoint Technology Ltd

InnoTeck Limited

Stamford Land
Corporation Limited

Kim Heng Offshore &
Marine Holdings Limited

Douglas Owen Chester

2 Nov 2012

29 Oct 2015

* Within the past three years
Notes:
(1)
(2)

Listed on Hong Kong Stock Exchange
Listed on Australian Stock Exchange

The NC has considered and taken the view that it would not be appropriate, at this time to set a limit on the
number of listed company directorships that a Director may hold. 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.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

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 &
development and interaction with other Directors, Management and stakeholders.

All Directors complete an evaluation questionnaire designed to seek their view on the various aspects of their
individual and Board performance so as to assess the overall effectiveness of the Board.

The completed questionnaire are collated by the Company Secretary and the results of the evaluation exercise
are subsequently considered by the NC, before making recommendations to the Board. The Chairman of the
Board may take actions as may be appropriate according to the results of the performance evaluation, which will
be based on objective performance criteria proposed by the NC and approved by the Board.

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, all 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 conducted a performance evaluation of the Board and Board Committees for FY2016 consistent with
this process and determined that all Directors has demonstrated full commitment to their roles and contributed
effectively in the discharge their duties. Both the NC and the Board are of the view that the Board has met its
performance objectives for FY2016.

ACCESS TO INFORMATION

PRINCIPLE 6
Board members should be provided with complete, adequate and timely information prior to board
meetings and on an on-going basis.

The Board has separate and independent access to the senior Management of the Company and the Company
Secretaries at all times. Request for information are dealt with promptly by Management. The Board is informed
of all material events and transactions as and when they occur. The Management consults Board members as
necessary and appropriate. Detailed board papers, agenda and related material, background or explanatory
information relating to matters to be discussed are sent out to the Directors, usually a week prior to each meeting,
so that all Directors may better understand the issues beforehand, allowing more time at such meetings for
discussion and deliberations.

Directors are provided with a wide range of relevant information, including, management information, sector
performance, budgets, forecast, capital expenditure and personnel statistics, reports from both external and
internal auditors, significant project updates, business strategies, risk analysis and assessments and relevant
regulatory updates.

The Company Secretaries administer and are available to attend Board meetings, and assist the Chairman
in implementing appropriate Board procedures to facilitate compliance with the Company’s Constitution.
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.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

ACCESS TO INFORMATION (cont’d)
PRINCIPLE 6 (cont’d)

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, to 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 had established a Remuneration Committee (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

Mr Chong Teck Sin

Mr Douglas Owen Chester

Chairman

Member

The formal terms of reference of the RC, are to:

ii.

iii.

recommend to the Board a framework of remuneration for the Directors and key management personnel;’

determine specific remuneration packages for each Executive Director;

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
abstains 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 that review.
Directors are not 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 but not limited to Directors’ fees, salaries, allowances, bonuses, incentives schemes and
benefits-in-kind.

The RC also oversees the administration of the Civmec Employee Share Option Scheme (“Civmec ESOS”) and
Civmec Performance Share Plan (the “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
2012 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.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

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.

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 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 reviewed by the RC and
is valid for a period of three (3) years with effect from the date of 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.

The Executive Directors and the key senior management personnel’s 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.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

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.

For competitive reasons, the Company does not disclose remuneration of each individual Director for the financial
year ended 30 June 2016. Instead, the Company discloses the bands of remuneration as follows:

REMUNERATION BAND
AND NAME OF DIRECTOR

S$500,000 TO S$749,999

James Finbarr Fitzgerald

Patrick John Tallon

Kevin James Deery

BELOW S$250,000

Chong Teck Sin

Douglas Owen Chester

Wong Fook Choy Sunny

SALARY

BONUS

DIRECTORS’
FEES

ALLOWANCES AND
OTHER BENEFITS

88%

100%

12%

TOTAL

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 2016 are set out below. For competitive reasons, the Company discloses
only the band of remuneration of each management personnel as follows:

DESIGNATION

SALARY

BONUS

REMUNERATION BAND
AND NAME OF KEY
EXECUTIVE

S$500,000 TO S$749,999

S$250,000 TO S$499,999

Justine Campbell

Chief Financial Officer

Terence Hemsworth

Henderson Operations Manager

Rodney John Bowes

Proposals Manager

Charles Sweeney(1)

General Manager - Metals and Minerals

Damian Lee Kelliher(1)

General Manager - Support Services

ALLOWANCES
AND OTHER
BENEFITS

TOTAL

15%

14%

16%

100%

85%

86%

74%

70%

12%

14%

(1) Mr Charles Sweeney and Mr Damian Lee Kelliher were appointed as Executives of the Company on 23 March 2016.

The annual aggregate remuneration paid to all the above mentioned Directors and key management personnel of
the Group is S$3,673,824 in FY2016.

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 FY2016, , the Company does not have any
employees who are immediate family members of a Director or CEO during FY2016. 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 37, in the “Report by the Board
of Directors” in the “Financials” section of this Annual Report.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

ACCOUNTABILITY AND AUDIT

PRINCIPLE 10
The Board should present a balanced and understandable assessment of the Company’s
performance, position and prospects.

The Management provides all members of the Board, on a quarterly basis, with management accounts, and
sundry reports together with such explanation and information as the Board may require to enable 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.

In this respect the Board is responsible for the release of quarterly and full year results, price sensitive
information, the annual report and other material corporate developments in a timely manner and within the
legally-prescribed period.

In addition, all price sensitive information was publicly released either before the Company met with any of the
Company’s investors or analysts or simultaneously with such meetings. Financial results and other 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 Company has established a Risks and Conflicts Committee (RCC) to advise and make recommendations to
the Board on risk and conflict matters.

The RCC comprises three (3) members, all of whom, including the RCC Chairman are Independent
Non-Executive Directors:-

Mr Chong Teck Sin

Mr Douglas Owen Chester

Mr Wong Fook Choy Sunny

Chairman

Member

The RCC is guided by its Terms of Reference which highlights its primary responsibilities as to:

review and monitor Group’s risk management framework and activities;

ii. report to Board regarding Group’s risk exposures, including review 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;

iii. recommend and adopt appropriate measures to control and mitigate the business risks of the Group, as and
when these may arise; and

iv. perform any other functions as may be agreed by the Board.

During the year, the RCC has:

reviewed the Risk Register and Risk Management Framework;

ii. revised the Risk Mitigation Plan presented by the Management to mitigate and monitor the risk exposure;

iii. reviewed the Project Risk and Opportunity Reporting Improvements; and

iv. reviewed the Policies adopted by the Company such as Bribery & Corruption Policy and Procedures and

the Code of Conduct.

CIVMEC 2016 ANNUAL REPORT

REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

ACCOUNTABILITY AND AUDIT (cont’d)
PRINCIPLE 11 (cont’d)

The Group’s internal controls and systems are designed to provide reasonable assurance on 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 controls, 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.

The Company’s Internal Audit function prepares an annual internal audit plan, which takes account of the
Company’s key risks and other assurance activities performed, enabling internal audit resources to be targeted to
areas of greatest value across the Company’s operations, including group and subsidiary structures. Processes
subject to internal audit include financial, administrative, operational and project specific activities and systems.
The Internal audit function provides advice on the effectiveness of risk management processes and material
internal controls, recommends corrective actions and control improvements and follows up on the implementation
of action plans designed by management to address any control deficiencies or improvement opportunities.
Internal audit reports containing internal audit results, recommendations and agreed action plans are presented to
the AC on a quarterly basis.

The Group appoints internal auditors to carry out a review of the adequacy and effectiveness of the Group’s key
internal controls, including financial, operational, compliance and information technology controls as well as risk
management systems to the extent of their scope as laid out in their audit plan.

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 and that was in place throughout the financial year and up to the date of this report
provides reasonable, but not absolute, assurance against material financial misstatements or losses, and includes
the safeguarding of assets, the maintenance of proper accounting records, the reliability of financial information,
compliance with appropriate legislation, regulations and best practices, and the identification and containment
of financial, operational and compliance risks. 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:-

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.

PRINCIPLE 12

Establish an Audit Committee with written terms of reference which clearly set out its authority and
duties.

The Audit Committee comprises three (3) members, all of whom, including the AC Chairman, are Non-Executive
Independent Directors:

Mr Chong Teck Sin

Mr Douglas Owen Chester

Mr Wong Fook Choy Sunny

Chairman

Member

CIVMEC 2016 ANNUAL REPORT
REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

ACCOUNTABILITY AND AUDIT (cont’d)
PRINCIPLE 12 (cont’d)

None of the AC members are previous partners or directors of the Group’s auditors, Moore Stephens LLP and
none of the AC members hold any financial interest in Moore Stephens LLP.

The Board ensures that the members of the AC are appropriately qualified to discharge their responsibilities and
they possess the requisite accounting and/or financial management expertise and experience.

The AC is governed by the terms of reference with its primary responsibilities highlighted as follows:

ii.

iii.

iv.

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;

to provide a channel of communication between the Board, the Management team, the external auditors
& internal auditors on matters relating to audit;

to monitor Management’s commitment to the establishment and maintenance of a satisfactory control
environment and an effective system of internal control (including any arrangements for internal audit);

to monitor and review the scope and results of external audit and its cost effectiveness and the
independence and objectivity of the external auditors; and

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 are to:

ii.

iii.

iv.

vi.

review with the external auditors the audit plans, their evaluation of the system of internal controls, their
management letter and the Management’s response thereto;

review with the internal auditors the internal audit plans and their evaluation of the adequacy of the internal
control and accounting system before submission of the results of such review to the Board for approval;

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;

review the internal control and procedures and ensure co-ordination between the external auditors and the
Management, review the assistance given by the Management to the auditors, and discuss problems and
concerns, if any, arising from the interim and final audits, and any matters which the auditors may wish to
discuss (in the absence of our Management where necessary);

review and consider the appointment or re-appointment of the external auditors and matters relating to
resignation or dismissal of the auditors;

review 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.

xi.

review potential conflicts of interest, if any, and to set out a framework to resolve or mitigate such potential
conflicts of interests;

undertake such other reviews and projects as may be requested by the Board and report to the Board its
findings from time to time on matters arising and requiring the attention of the Audit Committee;

review and discuss with investigators, any suspected fraud, irregularity, or infringement of any relevant laws,
rules or regulations, which has or is likely to have a material impact on 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;

CIVMEC 2016 ANNUAL REPORT

REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

ACCOUNTABILITY AND AUDIT (cont’d)
PRINCIPLE 12 (cont’d)

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 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 co-operation of and complete access to the Company’s management. It has full discretion to
invite any director or executive officer to attend the meetings, and has been given reasonable resources to enable
the discharge of its functions.

As at the Report date, the AC has:

ii.

iii.

reviewed the scope of work of the external auditors;

reviewed the scope of work of the internal auditors;

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 interested person transactions of the Company;

v. met with the Company’s external auditors and internal auditors without the presence of the 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 were no non-audit
services rendered that would affect the independence of the external auditors. The AC recognises the need to maintain
a balance between the independence and objectivity of the external auditors and the work carried out by the external
auditors based on monetary consideration.

The aggregate amount of agreed fees to be paid to the external auditors, Moore Stephens LLP for FY2016 is
S$214,000 which comprises audit fee of S$163,000 and S$51,000 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 a whistle-blowing policy where staff of the Group may, in confidence, raise
concerns about possible improprieties in matters of financial reporting, fraudulent acts and other matters, and
ensure that arrangements are in place for independent investigations of such matters and for appropriate follow
up actions. Staff are regularly informed of the existence of the whistle-blowing mechanism and encouraged to
report relevant matters.

There were no reports received through the whistle-blowing mechanism during FY2016.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

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 auditors of high risk areas and undertaking investigations as directed by the AC.

The RCC 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 regularly reviews the performance of the internal auditors and determines their reappointment and level
of remuneration.

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 exer-
cise 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.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

SHAREHOLDERS RIGHTS AND RESPONSIBILITIES (cont’d)
PRINCIPLE 16 (cont’d)

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 disclosure 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 via SGXNET of all major developments that will or
expect to have an impact on the Company or the Group.

Shareholders are informed of shareholders’ meetings through notices contained in annual reports or a circular
sent to all shareholders. These notices are also published in the local newspaper and posted onto the SGXNET.

In addition to SGXNET announcements and its annual report, the Company updates shareholders of its corporate
developments thought its corporate website at www.civmec.com

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
Constitution allows the appointment of not more than two 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.

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 at the registered office of the Company at 80
Robinson Road #02-00, Singapore 068898 during normal business hours upon written request.

For greater transparency, the Company has adopted the voting of all its resolutions 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 are announced at the meeting and via announcements on SGXNET made on the
same day.

The Company conducts regular investor and analyst briefings to update its business operations and to solicit
feedback as well as hearing its investors’ views and addresses their concerns, if any, and where appropriate.

As at the date of this Report, the Company does not have a formal dividend policy in place. The form, frequency and
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 tax exempt
(foreign source) First and Final Dividend of S$0.7 Singapore cents per ordinary share for the financial year ended 30 June
2016, payment of which is subject to shareholders’ 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 FY2016 or if not, then
subsisting entered into since the end of the previous financial year.

INTERESTED PERSON TRANSACTIONS
The Company has established procedures to ensure that all transactions with interested persons are reported in
a timely manner to the AC and these interested person’s 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 FY2016.

CIVMEC 2016 ANNUAL REPORT REPORT ON CORPORATE GOVERNANCE (cont’d)

30 June 2016

OTHER GOVERNMENT PRACTICES (cont’d)

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 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.

The Company has complied with Rule 1207(19) of Listing Manual.

CORPORATE REGISTRY

BOARD OF DIRECTORS

PRINCIPAL OFFICE AND CONTACT DETAILS

Mr James Finbarr Fitzgerald (Executive Chairman)

Mr Patrick John Tallon (Chief Executive Officer)

16 Nautical Drive,

Henderson WA 6166

Mr Kevin James Deery (Chief Operating Officer)

Australia

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
Mr Tan Wee Sin

Ms Ang Siew Koon

REGISTERED OFFICE
80 Robinson Road, #02-00,

Singapore 068898

Tel: (65) 6236 3333

Fax: (65) 6236 4399

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: Ms Lao Mei Leng

(Appointed since the financial year ended 30 June
2016)

PRINCIPAL BANKER
National Australia Bank

Level 14

100 St Georges Terrace

Perth WA 6000

Australia

CORPORATE WEBSITE
http://www.civmec.com.au

CIVMEC 2016 ANNUAL REPORT INDEPENDENT AUDITORS’ 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 59 to 105, which comprise the consolidated statement
of financial position of the Group and the statement of financial position of the Company as at 30 June 2016, 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.

AUDITORS’ 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 2016 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 and by those subsidiary
corporation incorporated in Singapore of which we are the auditors have been properly kept in accordance with the
provisions of the Act.

Moore Stephens LLP
Public Accountants and Chartered Accountants

Singapore
31 August 2016

CIVMEC 2016 ANNUAL REPORT CONSOLIDATED INCOME STATEMENT

For the year ended 30 June 2016

Revenue

Cost of sales

Gross profit

Other income

Share in profit of a joint venture

Administrative expenses

Finance costs

Other expenses

Profit before income tax

Income tax expense

Profit for the year

PROFIT ATTRIBUTABLE TO:

Owners of the Company

Non-controlling interest

Note

GROUP

2016
S$’000

396,752

(353,257)

2015
S$’000

499,153

(437,046)

43,495

62,107

1,181

3,890

(23,439)

(1,945)

(133)

23,049

(5,757)

933

(22,114)

(2,122)

(3,133)

35,671

(5,363)

17,292

30,308

17,441

(149)

17,292

EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY (CENTS PER SHARE):

• Basic

• Diluted

3.45

30,308

6.05

CIVMEC 2016 ANNUAL REPORT CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME

For the year ended 30 June 2016

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

Note

GROUP

2016
S$’000

17,292

2015
S$’000

30,308

(4,854)

(19,368)

Total comprehensive income for the year

12,438

10,940

TOTAL COMPREHENSIVE INCOME ATTRIBUTABLE TO:

Owners of the Company

Non-controlling interest

12,587

(149)

12,438

10,940

CIVMEC 2016 ANNUAL REPORT STATEMENTS OF FINANCIAL POSITION

As at 30 June 2016

ASSETS

Current assets

Cash and cash equivalents

Trade and other receivables

Other current assets

Current tax recoverable

Non-current assets

Investment in subsidiaries

Investment in joint venture

Trade and other receivables

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

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

GROUP

COMPANY

Note

2016
S$’000

2015
S$’000

2016
S$’000

2015
S$’000

39,788

80,007

882

5,475

126,152

5,641

6,648

37,643

108,466

162

11,610

157,881

119,513

98,017

511

191

132,323

98,218

27,707

5,475

33,236

104

4,446

2,591

7,154

7,590

7,836

7,626

33,510

41,346

258,475

256,099

40,862

48,500

57,230

6,616

5,940

69,786

25,498

2,494

70,967

12,683

5,972

89,622

12,718

1,993

27,992

14,711

128

186

3,619

3,805

1,128

97,778

104,333

128

4,933

37,864

(11)

(23,431)

146,425

37,864

(11)

(18,577)

132,491

37,864

(11)

(4,789)

7,670

37,864

(11)

(184)

5,898

160,847

151,767

40,734

43,567

(150)

(1)

160,697

151,766

40,734

43,567

TOTAL LIABILITIES AND EQUITY

258,475

256,099

40,862

48,500

CIVMEC 2016 ANNUAL REPORT CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY

For the year ended 30 June 2016

OTHER RESERVES

SHARE
CAPITAL
S$’000

TREASURY
SHARES
S$’000

MERGER
RESERVE
S$’000

FOREIGN
CURRENCY
TRANSLATION
RESERVE
S$’000

SHARE
OPTION
RESERVE
S$’000

RETAINED
EARNINGS
S$’000

TOTAL
S$’000

NON-CON-
TROLLING
INTEREST
S$’000

TOTAL
S$’000

37,864

(11)

9,010

(27,871)

284

132,491

151,767

(1) 151,766

17,441

(149)

17,292

(4,854)

17,441

12,587

(149)

12,438

(3,507)

37,864

(11)

9,010

(32,725)

284

146,425

160,847

(150) 160,697

37,864

(11)

9,010

(8,503)

227

105,685

144,272

(1) 144,271

30,308

(19,368)

30,308

10,940

(3,502)

(19,368)

10,940

(3,502)

37,864

(11)

9,010

(27,871)

284

132,491

151,767

(1) 151,766

GROUP

Balance as at
01 July 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

Dividends paid
(Note 21)

Balance as at
30 June 2016

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
(Note 21)

Balance as at
30 June 2015

CIVMEC 2016 ANNUAL REPORT CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended 30 June 2016

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 in profit of a joint venture

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:

Decrease in trade and other receivables

Increase in other current assets

Decrease in trade and other payables

Increase in provisions

Cash generated from operations

Interest received

Finance cost paid

Income tax refund

Income taxes paid

Net cash generated from operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

Proceeds from sale of property, plant and equipment

Purchase of property, plant and equipment

Investment in joint venture

Cash distribution from joint venture

Net cash used in investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings

Repayment of borrowings

Dividends paid

Net cash generated from/(used in) 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

GROUP

Note

2016
S$’000

2015
S$’000

23,049

35,671

8,952

128

(3,890)

1,945

(516)

29,681

18,551

(730)

(11,613)

725

36,614

516

(1,937)

10,574

(10,841)

34,926

499

(34,316)

(9,893)

8,076

(35,634)

58,731

(51,161)

(3,507)

4,063

3,355

(1,210)

37,643

39,788

8,020

162

2,122

(400)

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

These notes form an integral part of and should be read in conjunction with the accompanying financial statements.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2016

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) since
13 April 2012.

The registered office and principal place of business of the Company is at 80 Robinson Road #02-00,
Singapore 068898.

The principal activity of the Company is that of an investment holding company. The principal activities of its
subsidiaries are set out in Note 16.

The financial statements for the financial year ended 30 June 2016 were authorised for issue on the date of the
statement by the directors.

2. SIGNIFICANT ACCOUNTING POLICIES

A. 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.

B. ADOPTION OF NEW/REVISED SINGAPORE FINANCIAL REPORTING STANDARDS

i. New or Revised FRS Effective in the Current Year

For the financial year ended 30 June 2016, 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:

Related Party Disclosures - Key Management Personnel

Amendments to FRS 24
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 amendments are effective for the annual periods
beginning on or after 1 July 2015 and are applied retrospectively.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
B. ADOPTION OF NEW/REVISED SINGAPORE FINANCIAL REPORTING STANDARDS (cont’d)
i. New or Revised FRS Effective in the Current Year (cont’d)

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. These amendments are effective for
annual periods beginning on or after 1 July 2015 and are applied retrospectively.

ii. 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 2016 onwards.

Disclosure Initiative

Amendments to FRS 1
These amendments to FRS 1 are designed to further encourage companies to apply professional judgment in
determining what information to disclose in their financial statements. The standard is effective for accounting
periods beginning on or after 1 January 2016. As this is a disclosure standard, it will not have any impact on
the financial performance or financial position of the Group upon implementation.

Amendments to FRS 7
The amendments require new disclosure about changes in liabilities arising from financing activities in respect of:

Statement of Cash Flows

changes from financing cash flows;
changes arising from obtaining or losing control of subsidiaries or other businesses;
the effect of changes in foreign exchange rates;
changes in fair values; and

a.
b.
c.
d.
e. other changes.

The above disclosure also applies to changes in financial assets if cash flows from those financial assets are
included in cash flows from financing activities. The amendments are effective for annual periods beginning
on or after 1 January 2017. As this is a disclosure standard, it will not have any impact on the financial
performance or financial position of the Group upon implementation.

Equity Method in Separate Financial Statements

Amendments to FRS 27
The amendment will allow entities to use the equity method to account for investments in subsidiaries, joint
ventures and associates in the entities’ separate financial statements. This is in addition to the accounting
policy choice to account for such investments at cost less impairment, or fair value (in accordance with FRS
39), which currently exists and will continue to be available. The standard is effective for accounting periods
beginning on or after 1 January 2016.

The adoption of this standard will not have any material impact on the financial performance or financial
position of the Group.

Amendments to FRS 107
Financial Instruments Disclosures
The amendments to FRS 107 provide additional guidance to clarify whether an entity has continuing
involvement in a transferred financial asset as a result of a servicing contract for the purpose of the
disclosures requirements. The standard is effective for accounting periods beginning on or after 1 January
2016. As this is a disclosure standard, it does not have any impact on the financial performance or financial
position of the Group upon implementation.

CIVMEC 2016 ANNUAL REPORT

NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
B. ADOPTION OF NEW/REVISED SINGAPORE FINANCIAL REPORTING STANDARDS (cont’d)
ii. New or Revised FRS issued but not yet effective (cont’d)

Financial Instruments

FRS 109
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.

FRS 115
FRS 115 establishes a revised framework for revenue recognition based on the following five-step approach:

Revenue from Contracts with Customers

• 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
• 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 Construc-
tion Contracts and INT FRS 113 Customer Loyalty Programs. 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 115
will have an impact on the Group.

Lease

FRS 116
FRS 116 requires lessees to recognise right-of-use assets and lease liabilities for all leases with a term of
more than 12 months, except where the underlying asset is of low value. The right-of-use asset is depreciated
and interest expense is recognised on the lease liability. The accounting requirements for lessors have not
been changed substantially, and continue to be based on classification as operating and finance leases.
Disclosure requirements have been enhanced for both lessors and lessees. The standard is effective for
accounting periods beginning on or after 1 January 2019.

The Group is currently evaluating the impact of the changes and assessing whether the adoption of FRS 116
will have an impact on the Group.

C. 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 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:

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
C. BASIS OF CONSOLIDATION (cont’d)
i.

Subsidiaries (cont’d)

•

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.

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.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
C. BASIS OF CONSOLIDATION (cont’d)

ii.

Joint arrangements

A joint arrangement is a contractual arrangement whereby two or more parties have joint control. Joint control
is the contractually agreed sharing of control of an arrangement, which exists only when decisions about the
relevant activities require the unanimous consent of the parties sharing control.

A joint arrangement is classified either as joint operation or joint venture, based on the rights and obligations
of the parties to the arrangement.

To the extent the joint arrangement provides the Group with rights to the net assets of the arrangement, the
arrangement is a joint venture.

The Group reassesses whether the type of joint arrangement in which it is involved has changed when facts
and circumstances change.

Joint ventures
The Group recognises its interest in a joint venture as an investment and accounts for the investment using
the equity method.

Under the equity method, the investment is initially recognised at cost, and the carrying amount is increased
or decreased to recognise the investor’s share of the profit or loss of the investee after the date of acquisition.

D. INVESTMENT IN SUBSIDIARY COMPANIES
Investments in subsidiary companies are carried at cost less accumulated impairment losses in the statement of
financial position of the Company.

On disposal of investments in subsidiaries, the difference between the net disposal proceeds and the carrying
amount of the investments are recognised in the profit or loss.

E. 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”).

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
F. 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:

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

ii. based on the tax consequence that would follow from the manner in which the Group expects, at the balance

sheet date, to recover or settle the carrying amounts of its assets and liabilities.

The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
tax asset to be utilised. Unrecognised deferred tax assets are reassessed at the end of each reporting period and
are recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset
to be recovered.

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.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)

G. 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$), which is considered to
be more relevant to investors as the equity securities of the Company are traded in the Singapore Exchange
Securities Ltd (SGX-ST).

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.

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.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
H. 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:

ii.

total contract revenue can be measured reliably;

it is probable that the economic benefits associated with the contract will flow to the enterprise;

iii. both the contract cost to complete the contract and the stage of contract completion at the balance sheet date

can be measured reliably; and

iv.

the contract costs attributable to the contract can be clearly identified and measured reliably so that actual
contract costs incurred can be compared with prior estimates.

When the outcome of a construction contract cannot be estimated reliably, contract revenue should be recognised
only to the extent of contract costs incurred that it is probable, will be recoverable and contract costs should be
recognised as an expenses in the period in which they are incurred.

When it is probable that total contract costs will exceed total contract revenue, the expected loss should be
recognised as an expense immediately.

Contract revenue comprises the initial amount of revenue agreed in the contract and variations in the contract
work and claims that can be measured reliably. A variation or a claim is recognised as contract revenue when it is
probable that the customer will approve the variation or negotiations have reached an advanced stage such that it
is probable that the customer will accept the claim.

The stage of completion is measured by reference to the proportion of contract costs incurred to date to the
estimated total contract costs for the contract. Costs incurred during the financial year in connection with future
activities on a contract are excluded from costs incurred to date when determining the stage of completion of a
contract. Such costs are shown as construction contract work-in-progress on the balance sheet unless it is not
probable that such contract costs are recoverable from the customers, in which case, such costs are recognised
as an expense immediately.

At the balance sheet date, the aggregated costs incurred to date plus recognised profit (less recognised loss) on
each contract is compared against the progress billings. Where costs incurred plus the recognised profits (less
recognised losses) exceed progress billings, the balance is presented as due from customers on construction
contracts within “trade and other receivables”. Where progress billings exceed costs incurred to date plus
recognised profits (less recognised losses), the balance is presented as due to customers on construction
contracts within “trade and other payables”.

Progress billings for work performed but not yet paid by customers and retentions are included within “trade and
other receivables”. Amounts received before the related work is performed are included within “trade and other
payables”.

I. FINANCIAL ASSETS

Classification

Financial assets are recognised on the statement of financial position when, and only when, the Group
becomes a party to the contractual provisions of the financial instrument. The classification depends on
the nature of the asset and the purpose for which the assets were acquired. Management determines the
classification of financial assets at initial recognition and re-evaluates this designation at every reporting date.

Loans and receivables are non-derivatives financial assets with fixed or determinable payments that are not
quoted in an active market. They are presented as current assets, except those maturing later than twelve
months after the balance sheet date which are classified as non-current assets. Loans and receivables are
presented as “trade and other receivables”, “loans receivable” and “cash and cash equivalents” at the balance
sheet date.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
I. FINANCIAL ASSETS (cont’d)

ii. 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.

iii.

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.

iv.

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.

J. 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.

K. 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

Land and leasehold building are stated on the cost basis and are therefore carried at cost. Leasehold building
includes the construction costs and borrowing costs that are eligible for capitalisation.

Plant and equipment

Plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses.
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.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
K. PROPERTY, PLANT AND EQUIPMENT (cont’d)
Plant and equipment (cont’d)

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. Assets under construction are not depreciated.

The depreciation rates used for each class of depreciable assets are:

CLASS OF FIXED ASSET

Buildings

Plant and equipment

Leased plant and equipment

Small tools

Motor vehicles

Office and IT equipment

DEPRECIATION RATE

5 - 15%

5 - 33.33%

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.

L. 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.

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.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
L. IMPAIRMENT OF NON-FINANCIAL ASSETS (cont’d)

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.

M. 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.

N. 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.

O. 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.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
P. 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.

Q. EMPLOYEE BENEFITS

Defined contribution plans

The Group participates in the national pension schemes as defined by the laws of the countries in which it has
operations. Contributions to defined contribution pension schemes are recognised as an expense in the period in
which the related service is performed. The Group has no further payment obligations once the contributions have
been paid.

Provision for employee benefits

Provisions are made for the Group’s liability for employee benefits arising from services rendered by employees
to the end of the reporting period. Employee benefits that are expected to be settled within one year have been
measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than
one year have been measured at the present value of the estimated future cash outflows to be made for those
benefits. In determining the liability, consideration is given to employee wage increases and the probability that
the employee may not satisfy vesting requirements. Those cash flows are discounted using the market yields on
high quality corporate 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.

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.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

2. SIGNIFICANT ACCOUNTING POLICIES (cont’d)
R. SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the executive
committee whose members are responsible for allocating resources and assessing performance of the operating
segments.

S. SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of new ordinary
shares are deducted against the share capital account.

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.

T. RELATED PARTIES
A related party is defined as follows:

A related party is a person or entity that is related to the entity that is preparing its financial statements (referred to
as the ‘reporting entity’).

a. A person or a close member of that person’s family is related to a reporting entity if that person:

ii.

iii.

has control or joint control over the reporting entity;

has significant influence over the reporting entity; or

is a member of the key management personnel of the reporting entity or of a parent of the reporting entity.

b. An entity is related to a reporting entity if any of the following conditions applies:

ii.

iii.

iv.

vi.

vii.

viii.

the entity and the reporting entity are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others);

one entity is an associate or joint venture of the other entity (or an associate or joint venture of a
member of a group of which the other entity is a member);

both entities are joint ventures of the same third party;

one entity is a joint venture of a third entity and the other entity is an associate of the third entity;

the entity is a post-employment benefit plan for the benefit of employees of either the reporting entity
or an entity related to the reporting entity. If the reporting entity is itself such a plan, the sponsoring
employers are also related to the reporting entity;

the entity is controlled or jointly controlled by a person identified in (a);

a person identified in (a)(i) 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); or

the entity, or any member of a group of which it is a part, provides key management personnel services
to the reporting entity or to the parent of the reporting entity.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES

OF ESTIMATION UNCERTAINTY

Estimates, assumptions and judgements are made in the preparation of the financial statements. Management
continually evaluates its judgements and estimates in relation to assets, liabilities, income and expenses, and
disclosures made. They are assessed continually based on historical experience and on other various factors that
are believed to be reasonable under the circumstances. The estimates and assumptions that have a significant
risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year are discussed below:

A. CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Useful lives of property, plant and equipment

The useful lives of assets have been based on historical experience, lease terms and best available information
for similar items in the industry. These estimations will affect the depreciation expense recognised in the financial
year. There is no change in the estimated useful lives of plant and equipment during the year.

The carrying amount of the Group’s property, plant and equipment as at 30 June 2016 was S$119,513,000 (2015:
S$98,017,000) (Note 14). A 10% difference in the expected useful lives of these assets from management’s
estimate would result in an approximately S$895,200 (2015: S$802,000) variance in the Group’s profit before tax.

Determination of percentage of completion on construction contracts

Contract revenue is recognised as revenue in profit or loss using the percentage of completion method in the
reporting periods in which the work is performed. The stage of completion is measured by reference to the
contract costs incurred to date compared to the estimated total costs for the contract or on the basis of value of
work completed. In making the judgment, 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 18.

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 Group’s and Company’s current income tax positions as at
30 June 2016 were current tax recoverable of S$5,475,000 (2015: S$11,610,000) and current tax recoverable of
S$5,475,000 (2015: S$2,591,000) respectively. The carrying amounts of the Group’s and Company’s deferred tax
assets and liabilities as at 30 June 2016 are disclosed in Note 8.

B. CRITICAL JUDGEMENTS IN APPLYING THE GROUP’S ACCOUNTING POLICIES
In the process of applying the Group’s accounting policies, management has made the following judgement,
apart from those involving estimations, which have a significant effect on the amounts recognised in the financial
statements:

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.

During the year, the Group has written off trade receivables of S$3,000 (2015: S$2,971,000) to profit or loss as
disclosed in Note 5.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

3. CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES

OF ESTIMATION UNCERTAINTY (cont’d)

B. CRITICAL JUDGEMENTS IN APPLYING THE GROUP’S ACCOUNTING POLICIES (cont’d)
Impairment of receivables (cont’d)

The carrying value of the Group’s and the Company’s trade and other receivable as at 30 June 2016 is
S$86,655,000 (2015: S$108,466,000) and S$27,707,000 (2015: S$4,446,000).

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 2016 and 2015.

The carrying amount of property, plant and equipment at 30 June 2016 is S$119,513,000 (2015: S$98,017,000).

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 2016 and 2015.

The carrying amount of the Company’s investment in subsidiaries as at 30 June 2016 is S$7,590,000
(2015: S$7,836,000).

4. REVENUE AND OTHER INCOME

GROUP

REVENUE

Construction contract revenue

Revenue from sales of goods

Revenue from the rendering of services

OTHER INCOME

Interest income:

• Bank balances

• Late payment from clients

• Tax authorities

Rental income

Net foreign exchange gain

Fuel tax rebate

Miscellaneous income

2016
S$’000

392,824

385

3,543

396,752

392

584

1,181

2015
S$’000

494,878

608

3,667

499,153

400

496

933

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

5. PROFIT BEFORE INCOME TAX

The following items have been included in arriving at profit before income tax:

GROUP

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:

• Auditors of the Company

• 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

INCLUDED IN OTHER EXPENSES:

Bad debts written-off

Loss on disposal of property, plant and equipment

Note

2016
S$’000

68,806

172,159

56,935

47,015

8,342

840

1,485

610

222

14,894

585

633

629

1,960

1,181

117

128

2015
S$’000

76,026

216,812

64,677

72,200

7,331

131

621

981

689

192

16,543

558

420

665

556

570

2,971

162

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

Note

GROUP

2016
S$’000

175,569

9,199

2,285

187,053

2016
S$’000

947

855

1,945

2016
S$’000

5,555

1,641

7,196

575

(2,014)

(1,439)

5,757

2015
S$’000

220,151

10,059

3,088

233,355

2015
S$’000

706

1,361

2,122

2015
S$’000

5,985

2,999

8,984

(5,281)

1,660

(3,621)

5,363

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

Bank bills and bank guarantees

Finance leases

Premium funding

Other finance costs

8. INCOME TAX EXPENSE

Current income tax

Deferred income tax

UNDER/(OVER) PROVISION IN PRIOR YEARS

• Current income tax

• Deferred income tax

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

8. INCOME TAX EXPENSE (cont’d)

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:

GROUP

Profit before income tax

Income tax at 30% (2015: 30%)

ADD/(DEDUCT) TAX EFFECT OF:

Under/(Over) provision of income tax in respect of prior years*

(Over)/Under provision of deferred tax expense

Effect of tax consolidation in Australia jurisdiction **

Deferred tax assets not recognised

Non-assessable items

Unrecognised deferred tax asset on foreign operation

Non-allowable items

Difference in tax rates between Australian and foreign operations

Weighted average effective tax rates are as follows:

2016
S$’000

23,049

6,915

575

(2,014)

246

5,757

25.0%

2015
S$’000

35,671

10,701

(5,281)

1,660

(1,420)

(416)

5,363

15.0%

The under/(over) provision 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.

As at 30 June 2016, the Group has tax losses of approximately S$815,000 (2015: Nil) that are available for
offset against future taxable profits of the companies in which the losses arose, for which no deferred tax asset is
recognised due to uncertainty of its recoverability. The use of these tax losses is subject to the agreement of tax
authorities and compliance with certain provisions of the tax legislation of the respective countries in which the
companies operate. The deferred tax assets arising from these tax losses amounted to S$246,000 (2015: Nil) are
not recognised as there is no reasonable certainty that future taxable profits will be available to utilise the
tax losses.

The tax rate used for the 2016 and 2015 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:

RECLASSIFI-
CATION DUE TO
CHANGE IN TAX
JURISDICTION
S$’000

OPENING
BALANCE
S$’000

CHARGED
TO PROFIT
OR LOSS
S$’000

ACQUISI-
TIONS
S$’000

CURRENCY
TRANSLA-
TION
S$’000

CLOSING
S$’000

DEFERRED TAX LIABILITIES:

Property, plant and equipment

Fringe benefits tax instalments

Interest bearing borrowings

Unrealised foreign exchange gain

Balance at 30 June 2015

Balance at 30 June 2016

293

244

620

(50)

(33)

(293)

(244)

(620)

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

8. INCOME TAX EXPENSE (cont’d)

RECLASSIFI-
CATION DUE TO
CHANGE IN TAX
JURISDICTION
S$’000

OPENING
BALANCE
S$’000

CHARGED
TO PROFIT
OR LOSS
S$’000

CURRENCY
TRANSLA-
TION
S$’000

CLOSING
S$’000

DEFERRED TAX ASSETS:

Property, plant and equipment

Interest bearing borrowings

Fringe benefits tax instalments

Receivables

Trade and other payables

Other current assets

Provision

Carried forward tax losses

Unrealised foreign exchange losses

Unrealised foreign exchange gain

Contract in progress

Intangibles

Others

548

1,506

2,613

496

(50)

(293)

(33)

(244)

(5,047)

(238)

(1,282)

742

774

229

(36)

(1)

751

(17)

(4,247)

(29)

(1,204)

(226)

2,022

(323)

2,389

(107)

1,163

(3)

(6)

191

Balance at 30 June 2015

5,303

(620)

(4,659)

167

Property, plant and equipment

Fringe benefits tax instalments

Receivables

Trade and other payables

Other current assets

Provisions

Carried forward tax losses

Unrealised foreign exchange losses

Others

Balance at 30 June 2016

(4,247)

(29)

(1,204)

2,022

2,389

1,163

191

959

1,192

(1,058)

(2)

254

(1,126)

373

126

(3,162)

(56)

908

(77)

2,566

(27)

(49)

(53)

130

511

Aggregate amount of temporary differences associated with investment in subsidiaries, goodwill and capital
losses amounted to S$3,868,779 (2015: S$4,309,803), S$67,300,947 (2015: S$70,246,765) and Nil
(2015: S$2,623,937) respectively, for which deferred tax assets have not been recognised.

CURRENT TAX RECOVERABLE
Current tax recoverable mainly arose from Group’s overprovision of income taxes in respect of the current year
and is expected to be recovered in the 2016/17 financial year.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

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

• Basic

• Diluted

EARNINGS PER ORDINARY SHARE (S$ CENTS)

• Basic

• Diluted

GROUP

2016

17,441

2015

30,308

501,000,000

500,985,000

3.45

6.05

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 2016 and 2015, the diluted earnings per share is the same as the basic earnings per share as it
does not include the effect of 5,000,000 (2015: 6,000,000) unissued ordinary shares granted under the CESOS
(Note 22(b)). The effect of the inclusion is anti-dilutive.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

10. TRADE AND OTHER RECEIVABLES

GROUP

COMPANY

Note

2016
S$’000

2015
S$’000

2016
S$’000

2015
S$’000

34,036

881

34,917

64,098

2,085

66,183

(a)

42,345

42,114

2,485

260

169

27,707

4,417

80,007

108,466

27,707

4,446

CURRENT:

Trade receivables

• Third party

• Retention on construction claims

Amount due from customers
for contract in progress

Receivables from subsidiaries

Advances to joint venture

Other receivables

NON-CURRENT:

Trade receivables

• Retention on construction claims

6,648

Total trade and other receivables

86,655

108,466

27,707

4,446

(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

387,023

43,790

430,813

470,613

63,392

534,005

(392,824)

(494,878)

(361)

(3,292)

37,628

35,835

42,345

(4,717)

37,628

42,114

(6,279)

35,835

Receivable from subsidiaries are non-trade, unsecured, interest-free and repayable on demand in cash.

Advances to joint venture are reimbursable cost incurred on behalf of the joint venture. The amount is non-trade,
unsecured, interest-free and repayable on demand in cash.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

11. OTHER CURRENT ASSETS

Prepayments

Consumables inventory

GROUP

COMPANY

2016
S$’000

579

303

882

2015
S$’000

162

2016
S$’000

2015
S$’000

12. CASH AND CASH EQUIVALENTS

Cash at bank and in hand

GROUP

COMPANY

2016
S$’000

39,788

2015
S$’000

37,643

2016
S$’000

2015
S$’000

104

Cash at banks earns interest at floating rates ranging from 0.01% to 1.75% (2015: 0.01% to 2.50%) per annum.

A floating charge over cash and cash equivalents has been provided for certain debt.

13. LOANS RECEIVABLE

The loans granted to a subsidiary are unsecured and interest bearing at 6% per annum (2015: 6%).
Interest income recognised for the year amounted to S$1,183,000 (2015: S$2,073,000).

The repayment terms are reviewed at the end of each financial year. The loans have been settled during the
current financial year.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

14. PROPERTY, PLANT AND EQUIPMENT

LAND
S$’000

BUILDINGS
S$’000

PLANT AND
EQUIPMENT
S$’000

SMALL
TOOLS
S$’000

MOTOR
VEHICLES
S$’000

OFFICE
EQUIPMENT
S$’000

IT
EQUIPMENT
S$’000

ASSETS
UNDER CON-
STRUCTION
S$’000

TOTAL
S$’000

2016

COST

At 01 July 2015

5,475

46,174

43,374

11,062

7,055

4,728

(1,060)

3,914

934

Additions

Disposals

Transfer

Currency
translation

(260)

(1,538)

55,605

(1,400)

(274)

46,576

12,602

7,318

5,052

(686)

1,192

6,092

1,187

(180)

(199)

6,900

1,312

127

(23)

(42)

1,374

2,384

217

(484)

6,188

4,888

(6,040)

(73)

2,044

(186)

4,850

At 30 June 2016

16,277

ACCUMULATED DEPRECIATION

At 01 July 2015

Depreciation
for the year

Disposals

Currency
translation

At 30 June 2016

NET CARRYING AMOUNT

(4,090)

(9,757)

(2,419)

(2,298)

(462)

(1,274)

(1,877)

(3,800)

(1,790)

150

752

349

(783)

116

434

(206)

(496)

484

(5,817)

(12,456)

(3,682)

(2,885)

(631)

(1,244)

118,317

34,316

(2,433)

(3,972)

146,228

(20,300)

(8,952)

1,806

731

(26,715)

At 30 June 2016

16,277

49,788

34,120

8,920

4,015

743

800

4,850

119,513

2015

COST

At 01 July 2014

6,230

48,339

49,562

Additions

Disposals

Currency
translation

At 30 June 2015

3,929

3,006

(3,249)

(755)

5,475

(6,094)

46,174

(5,945)

43,374

5,726

2,712

(279)

(841)

7,318

7,031

215

(308)

(846)

6,092

1,446

2,078

(4)

(178)

1,312

614

(20)

(288)

2,384

5,004

1,778

(594)

6,188

ACCUMULATED DEPRECIATION

At 01 July 2014

Depreciation
for the year

Disposals

Currency
translation

At 30 June 2015

NET CARRYING AMOUNT

(2,916)

(9,255)

(1,679)

(2,070)

(299)

(885)

(1,626)

(3,676)

(1,223)

1,996

219

(730)

221

452

1,178

264

281

(215)

(550)

141

(4,090)

(9,757)

(2,419)

(2,298)

(462)

(1,274)

125,416

12,302

(3,860)

(15,541)

118,317

(17,104)

(8,020)

2,459

2,365

(20,300)

At 30 June 2015

5,475

42,084

33,617

4,899

3,794

850

1,110

6,188

98,017

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

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$24,744,000 (2015: S$24,933,000) (Note 19).

b. The carrying amount of property, plant and equipment that are pledged for security are as follows:

PROPERTY, PLANT AND EQUIPMENT

Leased plant and equipment

BORROWINGS

Finance lease

Remaining property, plant and equipment

Bank bills

Refer to Note 19 for further information on Borrowings.

15. INTANGIBLE ASSETS

Goodwill

GROUP

2016
S$’000

24,744

94,769

119,513

2015
S$’000

24,933

73,084

98,017

GROUP

2016
S$’000

2015
S$’000

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 2017. 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.

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

(3)

COMPANY

2015
S$’000

8,916

(1,080)

7,836

2016
S$’000

7,836

(246)

7,590

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

16. INVESTMENT IN SUBSIDIARIES (cont’d)

Details of the Company’s subsidiaries at 30 June are as follows:

NAME OF SUBSIDIARY/ COUNTRY
OF INCORPORATION

HELD BY THE COMPANY

Civmec Construction & Engineering
Pty Ltd*
Australia

Civmec Construction & Engineering
Singapore Pte Ltd**
Singapore

PRINCIPAL ACTIVITIES

% OF EQUITY
HELD BY THE GROUP

2016
%

2015
%

Civil construction
Structural Mechanical Process piping (SMP)

100

Engineering and Construction Services

100

HELD BY CIVMEC CONSTRUCTION & ENGINEERING PTY LTD

Civmec Holdings Pty Ltd*
Australia

Multidiscipline Solutions Pty Ltd*(a)
Australia

Civmec Pipe Products Pty Ltd*
Australia

Civmec Electrical and Instrumentation
Pty Ltd*(b)
Australia

Civmec DLG Pty Ltd*
Australia (c)

Forgacs Marine and Defence Pty Ltd* (c)
Australia

Civmec Construction & Engineering
Africa Ltd* (c)
Mauritius

Asset holding company

100

Asset holding company

83.5

Electrical services

Engineering and Construction Services

Asset holding company

HELD BY CIVMEC CONSTRUCTION & ENGINEERING AFRICA LTD

Civmec Construction & Engineering
Uganda Ltd* (c)
Uganda

Asset holding company

HELD BY CIVMEC CONSTRUCTION & ENGINEERING UGANDA LTD

Civtec Africa Ltd* (c)
Uganda

Engineering and Construction Services

Audited by Moore Stephens (WA) Pty Ltd

*
** Audited by Moore Stephens LLP Singapore
(a) Name changed from Ballymount Holdings Pty Ltd
(b) Name changed from Civmec Coatings & Insulation Group Pty Ltd
(c) Newly incorporated during the current financial year

100

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

17. INVESTMENT IN JOINT VENTURE

Details of the Group’s material joint venture at the end of the reporting period are as follows:

NAME OF JOINT VENTURE / COUNTRY
OF INCORPORATION

PRINCIPAL ACTIVITIES

HELD BY CIVMEC CONSTRUCTION & ENGINEERING PTY LTD

% OF EQUITY
HELD BY THE GROUP

2016
%

2015
%

Sedgman Civmec Joint Venture*
Australia

Audited by KPMG Brisbane, Australia

Engineering and Construction Services

The above joint venture is accounted for using the equity method in these consolidated financial statements.

Summarised financial information in respect of the Group’s material joint venture is set out below. The
summarised financial information below represents amounts shown in the joint venture’s financial statements.

SEDGMAN CIVMEC JOINT VENTURE
Summarised statement of financial position

Cash and cash equivalents

Trade receivables

Other assets

Total current assets

Trade and other payables - current

Net assets

Summarised statement of comprehensive income

Revenue

Operating expenses

Interest income

Administrative expenses

Profit before tax

Other comprehensive income

Total comprehensive income

2016
S$’000

8,295

21,560

1,362

31,217

19,935

11,282

2016
S$’000

126,723

(118,997)

(27)

7,780

2015
S$’000

Reconciliation of the above summarised financial information to the carrying amount of the interest in the joint
venture recognised in the consolidated financial statements:

Net assets of the joint venture

Proportion of the Group’s ownership interest in the joint venture

Carrying amount of the Group’s interest in the joint venture

2016
S$’000

11,282

50.0%

5,641

2015
S$’000

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

18. TRADE AND OTHER PAYABLES

GROUP

COMPANY

2016
S$’000

2015
S$’000

2016
S$’000

2015
S$’000

Note

Trade creditors

32,776

32,687

SUNDRY PAYABLES AND ACCRUED EXPENSES:

Accrued expenses

13,767

25,518

128

186

Amount due to customers for contracts in progress

Goods and services tax payable

Other taxes payable

4,717

2,156

3,814

6,279

3,176

3,307

57,230

70,967

128

186

Trade and other payables are usually paid within 45 days.

19. BORROWINGS

CURRENT:

Finance lease liabilities - secured

Bank bills - secured

NON-CURRENT:

Finance lease liabilities - secured

Bank bills - secured

Loan from related parties - unsecured

Total borrowings

Note

19(a)

19(b)

19(a)

19(b)

GROUP

COMPANY

2016
S$’000

2015
S$’000

2016
S$’000

2015
S$’000

5,538

1,078

6,616

9,108

16,309

25,498

32,114

7,513

5,170

12,683

12,718

25,401

A. FINANCE LEASE LIABILITIES
The Group (the lessee) leases motor vehicles, workshop equipment and office fitout from non-related parties
under finance leases. The Group will obtain the ownership of the leased assets from the lessor at no extra cost
at the end of the lease term. The average lease term is between 4 and 5 years at interest rates ranging from
3.52% to 9.59% per annum (2015: 3.94% to 9.59%).

The finance lease liabilities are secured by the underlying leased assets:

Property, plant and equipment

Note

2016
S$’000

24,744

2015
S$’000

24,933

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

19. BORROWINGS (cont’d)
A. FINANCE LEASE LIABILITIES (cont’d)
The present values of finance lease liabilities are analysed as follows:

MINIMUM
LEASE PAYMENTS
S$’000

FUTURE FINANCE
CHARGES
S$’000

NET PRESENT
VALUE OF MINIMUM
LEASE PAYMENTS
S$’000

6,080

9,567

15,647

8,387

13,494

21,881

(542)

(459)

(1,001)

(874)

(776)

(1,650)

5,538

9,108

14,646

7,513

12,718

20,231

2016

Less than one year

Between one and five years

2015

Less than one year

Between one and five years

B. BANK BILLS

Banking Covenants

The Group is required by the banks to maintain certain financial ratios such as loan value ratio and interest cover
ratio. As at 30 June 2016, the Group did meet all of these financial covenants.

As at 30 June 2016, the Group has a commercial bank facility amounting to S$26,339,450 which was utilised 62%
(2015: 16%). Interest rates are variable and ranged between 2.94% to 3.38% per annum during the financial year
(2015: 3.0% to 3.63% per annum).

The bank bills are secured by certain property, plant and equipment as disclosed in Note 14 to the financial
statements.

20. PROVISIONS

CURRENT

Provision for employee benefits

NON-CURRENT

Provision for employee benefits

GROUP

2016
S$’000

2015
S$’000

5,940

5,972

2,494

1,993

8,434

7,965

CIVMEC 2016 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

20. PROVISIONS (cont’d)

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

Note

GROUP

2016
S$’000

5,972

9,872

(9,715)

(189)

5,940

1,993

568

(67)

2,494

2015
S$’000

6,713

16,366

(16,290)

(817)

5,972

1,996

254

(257)

1,993

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 2.52% to 3.32% (2015: 2.75% to 4.75%).

21. SHARE CAPITAL

A. FULLY PAID ORDINARY SHARES

2016

2015

NO. OF SHARES

S$’000

NO. OF SHARES

S$’000

Ordinary shares issued and fully paid

501,000,000

37,864

501,000,000

37,864

Shares held as treasury shares

(15,000)

(11)

(15,000)

(11)

500,985,000

37,853

500,985,000

37,853

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 29 October 2015, the Company approved the payment of First and Final dividend
of 0.7 Singapore cents per ordinary share (2015: 0.7 Singapore cents) amounting to S$3,507,000 for the financial
year ended 30 June 2015. The dividend payment was made on 21 December 2015.

The Board has recommended a first and final dividend of 0.7 Singapore cents per ordinary share for the financial
year ended 30 June 2016, subject to shareholders’ approval at the forthcoming Annual General Meeting.

B. TREASURY SHARES

2016

2015

NO. OF SHARES

S$’000

NO. OF SHARES

S$’000

Balance at the beginning and end of the year

15,000

Treasury shares relate to ordinary shares of the Company that are held by the Company.

CIVMEC 2016 ANNUAL REPORT
NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

21. SHARE CAPITAL (cont’d)

C. SHARE OPTIONS

Balance at the beginning of the year

Options cancelled during the year

Balance at the end of the year

2016

2015

NO. OF SHARES

EXERCISE $

NO. OF SHARES

EXERCISE $

6,000,000

(1,000,000)

5,000,000

0.65

6,000,000

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 22.

22. SHARE-BASED PAYMENTS

A. 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.

No issuance of share-based payment transactions in the current financial year.

B. 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 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 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

TOTAL NUMBER GRANTED

VESTING PERIOD

11 September 2013

6,000,000

1 year

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

22. SHARE-BASED PAYMENTS (cont’d)

B. EMPLOYEE SHARE OPTION SCHEME (cont’d)
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

Cancelled during the year

Outstanding at the end of the year

2016

2015

NO.

WAEP
$

NO.

WAEP
$

6,000,000

(1,000,000)

5,000,000

0.65

6,000,000

0.65

6,000,000

0.65

Exercisable at the end of the year

5,000,000

6,000,000

The weighted average remaining contractual life of options outstanding as at 30 June 2016 is 7 years
(2015: 8 years). The exercise price of outstanding shares was S$0.65 (2015: $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 (2015: $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

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.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

23. OTHER RESERVE

Foreign currency translation reserve

Merger reserve

Waiver of interest receivable from a subsidiary

Share option reserve

GROUP

COMPANY

2016
S$’000

(32,725)

9,010

284

2015
S$’000

(27,871)

9,010

284

(23,431)

(18,577)

2016
S$’000

(10,742)

9,010

(3,341)

284

(4,789)

2015
S$’000

(9,478)

9,010

284

(184)

A. FOREIGN CURRENCY TRANSLATION RESERVE
Exchange differences relating to the translation of the net assets of the Group’s foreign operations from their
functional currency to the Group’s presentation currency (i.e., S$) are recognised directly in other comprehensive
income and accumulated in the foreign currency translation reserve.

Exchange differences previously accumulated in the foreign currency translation reserve (in respect of translating
the net assets of foreign operations) are reclassified to profit or loss on the disposal or partial disposal of the
foreign operation. The movement in the foreign currency translation reserve is shown in the consolidated
statement of changes in equity.

B. MERGER RESERVE
Pursuant to the completion of the Restructuring Exercise, the share capital of Civmec Construction & Engineering
Pty Ltd and Controlled Entities is adjusted to merger reserve based on the “pooling of interest method”.

C. 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 22 Share-based payments.

24. COMMITMENTS

A. OPERATING LEASE
The future minimum lease payable under non-cancellable operating leases contracted for where the Group is a
lessee at the reporting date but not capitalised in the financial statements are as follows:

Not later than 12 months

Between 12 months and five years

More than five years

GROUP

2016
S$’000

2,586

8,919

36,082

47,587

2015
S$’000

2,747

9,817

57,883

70,447

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 2-year period from July 2016.
Rent increases as per the CPI index.

The Broome property lease at 266-268 Port Drive, Minyirr is for a 5-year period from August 2014.
Rent increases as per CPI index.

The New South Wales land leases at 42 Kylie Street and Lot 07 Centra Park Drive, Macksville for a 2-year
period from August 2015.

The Group also has entered into short term operating leases in New South Wales during the year.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

24. COMMITMENTS (cont’d)

B. 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

25. GUARANTEES

GROUP

2016
S$’000

1,258

1,640

2,898

2015
S$’000

950

368

1,318

The Group is, in the normal course of business, required to provide guarantees in respect of their contractual
performance related obligations. These guarantees and indemnities only give rise to a liability where it fails to
perform its contractual obligations.

During the course of business, the Company also provides letters of credit for international trading when required.

As at 30 June 2016, the Group has provided the following:

Bank guarantee

Surety bond facility

Letter of credit

GROUP

2016
S$’000

32,390

47,729

80,119

2015
S$’000

9,461

63,037

360

72,858

The surety bond facility is provided for the provision of performance bonds to customers of the Group.
It has a limit of A$125 million (equivalent to S$125.19 million) as at 30 June 2016 (2015: A$95 million
(equivalent to S$98.23 million).

26. RELATED PARTY TRANSACTIONS

The Group’s main related parties are as follows:

ENTITIES EXERCISING CONTROL OVER THE GROUP
The largest shareholders are James Finbarr Fitzgerald and Olive Theresa Fitzgerald (acting as trustees for the
JF & OT Fitzgerald Family Trust) (19.47%) and Goldfirm Pty Ltd (acting as trustee for the Kariong Investment
Trust) (19.47%).

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

26. RELATED PARTY TRANSACTIONS (cont’d)

KEY MANAGEMENT PERSONNEL
Any person having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any director (whether executive or otherwise) of that entity is considered key
management personnel.

Remuneration paid to key management personnel is as follows:

DIRECTORS’ REMUNERATION

Salaries and other related costs

Directors’ fees

Benefits including defined contribution plans

KEY MANAGEMENT PERSONNEL

Salaries and other related costs

Benefits including defined contribution plans

GROUP

2016
S$’000

1,449

222

200

1,732

292

2015
S$’000

1,590

192

243

1,260

237

3,895

3,522

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

2016
S$’000

2015
S$’000

3,000,000

2,000,000

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:

PURCHASE OF GOODS AND SERVICES

Other Related Parties:
Consultant fee paid to a related party (who is a shareholder of the Company)

(8)

GROUP

2016
S$’000

2015
S$’000

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

27. FINANCIAL INFORMATION BY SEGMENTS

Management has determined the operating segments based on the internal reports which are regularly reviewed
by the Operations Management that are used to make strategic decisions.

The Operations Management comprises of the Executive Chairman, Chief Executive Officer, Chief Operations
Officer, Chief Financial Officer 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

Although the Operations Management receives separate reports for each project in the Oil and Gas, Metals and
Minerals, and Infrastructure businesses, these have been aggregated into the respective reportable segments as
they have similar long-term average gross margins.

During the year, the Group has diversified and included a new reportable segment. The three main reportable
segments for the Group are: (1) Oil and Gas (2) Metals & Minerals (previously known as Mining and Others), and
(3) Infrastructure. The business activities include civil construction, fabrication, precast concrete, SMP (Structural,
Mechanical and Piping Erection), insulation, maintenance and plant hire.

BASIS OF ACCOUNTING FOR PURPOSE OF REPORTING BY OPERATING SEGMENTS

a. Accounting Policies Adopted

Unless stated otherwise, all amounts reported to the Board of Directors, being the chief decision makers with
respect to operating segments, are determined in accordance with accounting policies that are consistent to
those adopted in the consolidated financial statements of the Group.

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.

Segment Assets and Liabilities

The Group does not identify nor segregate its assets and liabilities in operating segments as these are
managed on a “group basis”.

GEOGRAPHICAL SEGMENTS (SECONDARY REPORTING)
The Group operates within Australia.

MAJOR CUSTOMERS
The Group has a number of customers to whom it provides both products and services. For the year ended
30 June 2016, the Group supplies to a single external customer in Infrastructure segment who accounts
for 24.8% of external revenue (2015: Metals & Minerals 41.6%). The next most significant client accounts
for 15.7% and 11.4 % (2015: 14.9% and 10.7%) respectively of external revenue.

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

27. FINANCIAL INFORMATION BY SEGMENTS (cont’d)

2016

2015

OIL AND
GAS
S$’000

METALS &
MINERALS
S$’000

INFRA-
STRUC-
TURE
S$’000

TOTAL
S$’000

OIL AND
GAS
S$’000

METALS &
MINERALS
S$’000

INFRA-
STRUC-
TURE
S$’000

Revenue - external sales

90,670

170,040

136,042

396,752

146,819

352,334

Cost of sales
(excluding depreciation)

(81,164)

(140,545)

(123,206)

(344,915)

(134,686)

(295,029)

Depreciation expense

(1,908)

(3,597)

(2,837)

(8,342)

(2,292)

(5,039)

7,598

25,898

9,999

43,495

9,841

52,266

(3)

3,890

(23,439)

(3)

(2,971)

1,181

3,890

(1,945)

(130)

23,049

(5,757)

17,292

TOTAL
S$’000

499,153

(429,715)

(7,331)

62,107

(22,114)

(2,971)

933

(2,122)

(162)

35,671

(5,363)

30,308

257,072

882

511

258,475

57,230

32,114

8,434

97,778

34,316

255,736

162

191

256,099

70,967

25,401

7,965

104,333

12,302

Segment results

Unallocated costs

Bad debt

Other income

Share in profit of a 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

Provisions

Total liabilities

OTHER SEGMENT INFORMATION

Capital expenditures
during the year

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

28. FINANCIAL RISK MANAGEMENT

The Group’s and the Company’s financial instruments consist mainly of cash and cash equivalents, accounts
receivable and payable, borrowings and finance lease liabilities. The key financial risks include interest rate risk,
foreign currency risk, credit risk and liquidity risk.

A. MARKET RISK

Interest rate risk

Exposure to interest rate risk arises on financial assets and financial liabilities recognised at the end of the
reporting period whereby a future change in interest rates will affect future cash flows or the fair value of fixed
rate financial instruments. The Group is also exposed to earnings volatility on floating rate instruments.

Interest rate risk is managed using a mix of fixed and floating rate debt. At 30 June 2016, approximately 51%
(2015: 80%) 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 % (2015: 1%) with all other variables remain constant,
the Group’s profit before tax will be approximately lower/higher by S$153,000 (2015: S$51,700) 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.

100

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

28. FINANCIAL RISK MANAGEMENT (cont’d)
A. MARKET RISK (cont’d)
i.

Interest rate risk (cont’d)

VARIABLE RATES

FIXED RATES

WITHIN
1 YEAR
S$’000

BETWEEN
2 TO 5 YEARS
S$’000

WITHIN
1 YEAR
S$’000

BETWEEN
2 TO 5 YEARS
S$’000

NON-INTEREST
BEARINGS
S$’000

TOTAL
S$’000

GROUP

2016

Financial Assets

Cash and cash equivalents

39,788

Trade and other receivables

Financial Liabilities

Trade and other payables

Borrowings - finance lease

Borrowings - bank bills

Borrowings - related parties

39,788

2015

Financial Assets

Cash and cash equivalents

37,643

Trade and other receivables

Financial Liabilities

Trade and other payables

Borrowings - finance lease

Borrowings - bank bills

COMPANY

2016

Financial Assets

Cash and cash equivalents

Trade and other receivables

Financial Liabilities

Trade and other payables

2015

Financial Assets

Cash and cash equivalents

Trade and other receivables

Financial Liabilities

Trade and other payables

Payable to related parties

37,643

5,170

16,309

16,390

5,538

1,078

6,616

7,513

12,718

9,108

86,655

46,543

9,108

46,543

39,788

86,655

126,443

46,543

14,646

17,387

78,657

37,643

108,466

146,109

58,205

20,231

5,170

83,606

27,707

27,749

128

104

4,446

4,550

186

3,619

3,805

101

108,466

58,205

27,707

27,749

128

104

4,446

4,550

186

3,619

3,805

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

28. FINANCIAL RISK MANAGEMENT (cont’d)
A. MARKET RISK (cont’d)

ii. Foreign currency risk

There is no significant exchange rate risk as substantially all financial assets and financial liabilities are denominated
in Australian Dollar, which is the functional currency of the Company and of each entity in the Group. Accordingly,
the sensitivity analysis to currency risk exposure is not disclosed as management is of the view that this is not
significant.

B. CREDIT RISK
Exposure to credit risk relating to financial assets arises from the potential non-performance by counter-parties 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 21% of trade receivables as at
30 June 2016 (2015: 38%).

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.

102

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

28. FINANCIAL RISK MANAGEMENT (cont’d)
B. CREDIT RISK (cont’d)

PAST DUE BUT NOT IMPAIRED

GROSS
AMOUNT
S$’000

WITHIN INITIAL
TRADE TERMS
S$’000

31 – 60
DAYS
S$’000

61 – 90
DAYS
S$’000

> 90
DAYS
S$’000

PAST
DUE AND
IMPAIRED
S$’000

41,565

45,090

86,655

66,183

42,283

108,466

27,707

4,417

4,446

31,117

45,090

76,207

53,485

42,283

95,768

27,707

4,417

4,446

9,979

309

11,023

1,485

11,023

1,485

160

190

GROUP

2016

Trade receivables

Other receivables

Total

2015

Trade receivables

Other receivables

Total

COMPANY

2016

Receivables from subsidiaries

Total

2015

Receivables from subsidiaries

Other receivables

Total

The Group and the Company did not hold any financial assets whose terms have been renegotiated, but which
would otherwise be past due or impaired.

The Group 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.

Cash and cash equivalents:
AA Rated

GROUP

COMPANY

2016
S$’000

2015
S$’000

2016
S$’000

2015
S$’000

39,788

37,643

104

103

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

28. FINANCIAL RISK MANAGEMENT (cont’d)

C. 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.

CONTRACTUAL UNDISCOUNTED CASH FLOWS

CARRYING
AMOUNT
S$’000

WITHIN
1 YEAR
S$’000

BETWEEN
2 TO 5 YEARS
S$’000

TOTAL
S$’000

GROUP
2016
Financial Liabilities
Trade and other payables
Borrowings:

• Finance lease
• Bank bills
• Related parties
Total financial liabilities

2015
Financial Liabilities
Trade and other payables
Borrowings:

• Finance lease
• Bank bills

Total financial liabilities

COMPANY
2016
Financial Liabilities
Trade and other payables
Total financial liabilities

2015
Financial Liabilities
Trade and other payables
Payable to related parties
Total financial liabilities

46,543

14,646
17,387
81
78,657

58,205

20,231
5,170
83,606

128
128

186
3,619
3,805

46,543

7,180
1,100
-
54,823

58,205

8,387
5,325
71,917

128
128

186
3,619
3,805

9,567
17,581
86
27,234

13,494
-
13,494

-
-

-
-
-

46,543

16,747
18,681
86
82,057

58,205

21,881
5,325
85,411

128
128

186
3,619
3,805

The Group’s undrawn borrowings and guarantee facilities are disclosed in Note 25 to the financial statements.

104

CIVMEC 2016 ANNUAL REPORT NOTES TO THE FINANCIAL STATEMENTS (cont’d)

For the year ended 30 June 2016

28. FINANCIAL RISK MANAGEMENT (cont’d)

D. CAPITAL MANAGEMENT
Management controls the capital of the Group in order to maintain a good debt-to-equity ratio, provide the
shareholders with adequate returns and to ensure that the Group can fund its operations and continue as a
going concern.

The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.

The Group and the Company have no externally imposed capital requirements.

Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting
its capital structure in response to changes in these risks and in the market. These responses include the
management of debt levels, distribution to shareholders and share issues.

The net debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as total
financial liabilities less cash and cash equivalents.

Net debt

Total equity

Net debt-to-equity ratio

GROUP

2016
S$’000

38,869

160,847

0.24

2015
S$’000

45,963

151,767

0.30

There were no changes in the Group’s approach to capital management during the year.

E. 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.

105

CIVMEC 2016 ANNUAL REPORT STATISTICS OF SHAREHOLDERS

Shareholders’ Statistics and Distribution as at 16 September 2016

Class of Shares

: Ordinary Shares

Voting Rights (excluding treasury shares)

: One vote per Ordinary Share

No. of issued shares

No. of issued shares excluding treasury shares

No. of treasury shares

501,000,000 shares

500,985,000 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

TOTAL

No. of
Shareholders

No. of Shares

3
42
383
475
30

933

0.32
4.50
41.05
50.91
3.22

82
33,919
2,366,467
46,510,142
452,089,390

0.00
0.01
0.47
9.28
90.24

100.00

501,000,000

100.00

TWENTY LARGEST SHAREHOLDERS

No.

Shareholders’ Name

No. of Shares

CIMB SECURITIES (SINGAPORE) PTE LTD

JAMES FINBARR FITZGERALD OR OLIVE TERESA FITZGERALD

DBS NOMINEES PTE LTD

RAFFLES NOMINEES (PTE) LTD

CLARENDON PACIFIC VENTURES PTE LTD

CITIBANK NOMINEES SINGAPORE PTE LTD

FOO SIANG GUAN

VAZ LORRAIN MICHAEL

LEE TECK LENG

MAYBANK KIM ENG SECURITIES PTE LTD

ANG KONG HUA

LEYAU LAY HOON

NG KEE CHOE

GOH GEOK LING

LAI VOON NEE

BNP PARIBAS NOMINEES SINGAPORE PTE LTD

PANG CHIN FATT

HENG KHENG LONG

HONG LEONG FINANCE NOMINEES PTE LTD

WONG YEW MENG

Total

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

106

182,482,755

97,720,806

42,625,545

29,330,923

23,812,000

9,853,598

6,781,849

5,877,000

5,700,200

4,898,401

4,628,677

4,237,899

3,700,134

3,425,134

3,300,000

2,412,300

2,273,000

2,255,845

1,857,000

1,683,000

36.42

19.51

8.51

5.85

4.75

1.97

1.35

1.17

1.14

0.98

0.92

0.85

0.74

0.68

0.66

0.48

0.45

0.37

0.34

438,856,066

87.59

CIVMEC 2016 ANNUAL REPORT

STATISTICS OF SHAREHOLDERS (cont’d)

Shareholders’ Statistics and Distribution as at 16 September 2016

SUBSTANTIAL SHAREHOLDERS

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)

Note:

Direct Interest

Deemed interest

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

19.51

19.47
19.47

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 2016 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.

107

CIVMEC 2016 ANNUAL REPORT 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, 27 October 2016 at 2.30 pm,
to transact the following businesses:

AS ORDINARY BUSINESSES:

To receive and adopt the Audited Financial Statements of the Company for the
financial year ended 30 June 2016 together with the Directors’ Statement 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 2016.
To approve the payment of Directors’ fees of S$220,000 for the financial year
ending 30 June 2017, to be paid quarterly in arrears. (FY2016: S$220,000)
To re-elect the following Directors retiring pursuant to Article 118 of the Company’s Constitution: -

Ordinary Resolution 1

Ordinary Resolution 2

Ordinary Resolution 3

(a) Mr. James Finbarr Fitzgerald

(b) Mr. Patrick John Tallon

(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

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:

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;

108

CIVMEC 2016 ANNUAL REPORT NOTICE OF ANNUAL GENERAL MEETING (cont’d)

AS SPECIAL BUSINESSES (CONT’D)

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)]

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.”

Ordinary Resolution 12

[See Explanatory Note (v)]

Proposed Renewal of the Share Purchase Mandate

Ordinary Resolution 13

That:

(a)

for the purposes of Sections 76C and 76E of the Act and such other laws and regulations as may for the
time being be applicable, the exercise by the Directors of the company (‘Director’) 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 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 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 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, either be cancelled or held in treasury and dealt with in
accordance with the Act;

(c) Unless varied or revoked by the company in general meeting, the authority conferred on the Directors
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)

the date on which the next Annual General Meeting of the Company is held or required by law to be
held;

(ii)

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;

109

CIVMEC 2016 ANNUAL REPORT NOTICE OF ANNUAL GENERAL MEETING (cont’d)

AS ORDINARY BUSINESSES (CONT’D)

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 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 in accordance with the rules of the SGX-ST
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 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)]

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

12 October 2016

110

CIVMEC 2016 ANNUAL REPORT
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 [31] of the Annual
Report 2015/2016. 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 31 of the Annual
Report 2015/2016. 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
31 of the Annual Report 2015/2016. 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 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 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 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 12 October 2016.

Notes:

(a) Save for members which are nominee companies, a member of the Company shall not be entitled to appoint
more than two proxies to attend and vote at the general meeting of the Company. A proxy need not be a
member of the Company.

(b) Where a member appoints two proxies, he shall specify the proportion of his shares (expressed as a percentage

of the whole) to be represented by each proxy.

(c) Pursuant to Section 181 of the Companies Act, Cap. 50 of Singapore, any member (who is a Relevant
Intermediary*) may appoint more than two proxies, but each proxy must be appointed to exercise the rights
attached to a different share or shares held by him (which number and class of shares shall be specified).

*Relevant Intermediary is:

(i) a banking corporation licensed under the Banking Act (Cap.19) or a wholly-owned subsidiary of such a banking
corporation, whose business includes the provision of nominee services and who hold shares in that capacity;
or

111

CIVMEC 2016 ANNUAL REPORT
NOTICE OF ANNUAL GENERAL MEETING (cont’d)

(ii) a person holding a capital markets services license to provide a custodial service for securities under the

Securities and Futures Act (Cap.289) and who holds shares in that capacity; or

(iii) the Central Provident Fund Board established by the Central Provident Fund Act (Cap.36), in respect of shares

purchased on behalf of CPF investors.

(d) A corporation which is a member may appoint an authorised representative or representatives in accordance
with Section 179 of the Companies Act, Cap. 50 of Singapore to attend and vote for and on behalf of such
corporation.

(e) 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.

(f ) 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.

(g) 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.

(h) 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 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 agent 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.

112

CIVMEC 2016 ANNUAL REPORT PROXY FORM
ANNUAL GENERAL MEETNG
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. A Relevant Intermediary may appoint more than two proxies to attend the Annual General Meeting and vote

(please see Note 4) for the definition of “Relevant Intermediary”).

3. 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.

4. CPF investors who wish to attend the Meeting as an observer must submit their requests through their CPF Approved

Nominees within the time frame specified. If they also wish to vote, they must submit their voting instructions to the CPF
Approved Nominees within the time frame specified to enable them to vote on their behalf.

*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, 27 October 2016 at 2.30pm 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.

113

CIVMEC 2016 ANNUAL REPORT
PROXY FORM
ANNUAL GENERAL MEETNG

No.

Ordinary Resolutions

For#

Against#

10.

11.

12.

13.

Adoption of the Audited Financial Statements of the Company for the
financial year ended 30 June 2016 together with the Directors’ Statement and
Independent Auditors’ Report thereon.

Approval of 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
2016.
Approval of the payment of Directors’ fees of S$220,000 for the financial year
ending 30 June 2017 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.
Renewal of Share Purchase Mandate.

Dated this ________day of ____________________ 2016

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

114

CIVMEC 2016 ANNUAL REPORT PROXY FORM
ANNUAL GENERAL MEETNG

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 81SF of the Securities and Futures Act, Chapter 289 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.

Save for members which are nominee companies, a member of the Company shall not be entitled to appoint
more than two proxies to attend and vote at the general meeting of the Company. A proxy need not be a
member of the Company.

Where a member appoints two proxies, he shall specify the proportion of his shares (expressed as a
percentage of the whole) to be represented by each proxy.

A member who is a Relevant Intermediary* may appoint more than two proxies, but each proxy must be
appointed to exercise the rights attached to a different share or shares held by him (which number and
class of shares shall be specified).

*Relevant Intermediary is:
(a)

a banking corporation licensed under the Banking Act (Cap.19) or a wholly-owned subsidiary of such a
banking corporation, whose business includes the provision of nominee services and who hold shares in
that capacity; or

(b)

a person holding a capital markets services license to provide a custodial services for securities under the
Securities and Futures Act (Cap.289) and who holds shares in that capacity; or

(c)

the Central Provident Fund Board established by the Central Provident Fund Act (Cap.36), in respect of
shares purchased on behalf of CPF investors.

A corporation which is a member may appoint an authorised representative or representatives in accordance
with Section 179 of the Companies Act, Cap. 50 of Singapore to attend and vote for and on behalf of such
corporation.

The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly
authorised in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must
be executed under its common seal or signed on its behalf by an officer or attorney duly authorised in writing.

Where an instrument appointing a proxy is signed on behalf of the appointor by the attorney, the letter or
power of attorney or a duly certified copy thereof must (failing previous registration with the Company)
be lodged with the instrument of proxy, failing which the instrument may be treated as invalid.

The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at
80 Robinson Road #02-00, Singapore 068898, not less than forty-eight (48) hours before the time appointed
for holding the Annual General Meeting.

In case of joint shareholders, all shareholders must sign the instrument appointing a proxy or proxies.

10. An investor who buys shares using CPF monies (‘‘CPF Investor”) and/or SRS monies (“SRS Investor”)

(as may be applicable) may attend and cast his vote(s) at the Meeting in person. CPF and SRS Investors
who are unable to attend the Meeting but would like to vote, may inform their CPF and/or SRS Approved
Nominees to appoint the Chairman of the Meeting to act as their proxy, in which case, the CPF and SRS
Investors shall be precluded from attending the 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 seventy-two (72) 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 accept and agrees to
the personal data privacy terms set out in the Notice of Annual General Meeting dated 12 October 2016.

115

CIVMEC 2016 ANNUAL REPORT 2016 ANNUAL REPORT

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

civmec.com