ANNUAL REPORT 2017
CONTENTS
01: OUR BUSINESS
03: SUSTAINABILITY
WHAT WE DO
OUR VALUES
THE YEAR IN REVIEW
FINANCIAL HIGHLIGHTS
04
05
08
10
OUR PEOPLE
HSEQ
COMMUNITY ENGAGEMENT
BOARD OF DIRECTORS
EXECUTIVE CHAIRMAN’S REPORT 12
EXECUTIVE TEAM
CHIEF EXECUTIVE OFFICER’S REPORT 14
04: FINANCIAL REPORT
02: OUR APPROACH
MULTI-DISCIPLINED
APPROACH
OIL & GAS
METALS & MINERALS
INFRASTRUCTURE
OTHER ACTIVITIES AND
FUTURE DEVELOPMENTS
CORPORATE GOVERNANCE
CORPORATE REGISTRY
18
20
22
24
26
INDEPENDENT AUDITOR’S REPORT 67
FINANCIAL REPORT
71
STATISTICS OF SHAREHOLDERS 130
NOTICE OF AGM
PROXY FORM
132
138
30
32
34
36
38
47
66
Some of the workforce at our West Coast Facilities, Henderson
OUR
BUSINESS
3
OUR BUSINESS
ANNUAL REPORT 2017
WHAT WE DO
Civmec is an integrated multi-disciplinary heavy engineering and
construction provider to the metals and minerals, oil and gas,
infrastructure and marine and defence markets.
Commencing operations in 2009 with a
vision to develop a leading multi-disciplinary
organisation, Civmec has experienced
tremendous growth and is now a turnkey
solutions provider, completing some of
Australia’s most prestigious projects.
Fundamental to our strategy is our
diverse range of capabilities that enables
us to provide a large scale 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 and minor works,
refractory and offshore logistics.
We have a corporate culture programme that
all employees adopt called ‘Never Assume’ – it
describes our principles and values as well as
underpinning the culture of our Company.
It drives the behaviour, attitude decisions
and actions by all in the business to
create a sustainable, successful Civmec.
At Civmec we believe our high performing
and experienced employees are a key factor
in the success we have had to date.
Our west coast state-of-the-art facility in Perth
has kept approximately 550 skilled people
permanently employed. Set on 200,000m2
of waterfront land, with access to a further
400,000m2 within the Australian Marine Complex
(AMC) the facility offers extensive undercover
area (44,100m2), deep water wharves and
modern plant and equipment to ensure we
remain globally competitive.
Our east coast facility in Newcastle, New South
Wales has kept approximately 140 skilled people
permanently employed. The facility is located on
227,000m2 of land - just 12 kilometres from the
port of Newcastle with riverfront access.
OIL & GAS
Y
R
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F
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R
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AC C E S
OLU TIO
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S U R F A CE
R E A T M ENT
T
PRECAST
CONCRETE
S
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I
I
&
&
C
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S
I
METALS & MINERALS
T
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W
O
R
C
K
I
V
S
I
L
E
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E
I
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Y
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S
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S
I
G
F
F
O
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O
M
A
I
N
T
E
N
A
N
C
E
U LAR
S E M BLY
M
D
S
O
A
S M P
INSTA L L A T I O
N
IN
IN
DUSTRIAL
STALLATION
INFRASTRUCTURE
MARINE & DEFENCE
4 / WHAT WE DO
ANNUAL REPORT 2017
OUR VALUES
Amrun module within the Australian Marine Complex
COMMITMENT
Our individual
commitment to
contribute towards
the company
achieving its targets
and objectives.
INNOVATION
Our innovative
thought process
develops our
company’s drive to
continually improve.
VALUE
DRIVEN
Our performance-
driven attitude
results in
providing value.
MAKE A
DIFFERENCE
Our motivation
to influence and
challenge means
we ensure long-term
sustainability.
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.
5 / OUR VALUES
ANNUAL REPORT 2017
FACILITIES & LOCATIONS
Civmec’s facilities are in key Australian regions, all of which support
on-site activities. By controlling the supply chain we ensure our on-site
activities have the best opportunity for success.
PROJECT
Amrun – Process Plant
Gruyere Gold Project
Altura – Pilgangoora Lithium
Pinjarra Refinery Expansion
Nammuldi Below Water Table
Orebody 18 Dump Pocket and TLO
Modifications
Cloudbreak Shutdown Works
MARKET
Metals and Minerals
LOCATION
Weipa, QLD
Metals and Minerals
Yamarna, WA
Metals and Minerals
Port Hedland, WA
Metals and Minerals
Pinjarra, WA
Metals and Minerals
Tom Price, WA
Metals and Minerals
Pilbara, WA
Metals and Minerals
Pilbara, WA
Anderson Point Shutdown Works
Metals and Minerals
Pilbara, WA
Roy Hill Iron Ore Project
Yarwun Refractory Works
Perth Stadium
Pacific Highway Upgrade
Barangaroo Ferry Hub
Narellan Road Works
Sydney Light Rail – Moore Park Tunnel and
Eastern Distributor Bridge
Nepean River Shared Path Bridge
Northwest Rail Link
Westconnex
Treendale Bridge
Metals and Minerals
Roy Hill, WA
Metals and Minerals
Gladstone, QLD
Infrastructure
Infrastructure
Infrastructure
Infrastructure
Infrastructure
Infrastructure
Infrastructure
Infrastructure
Infrastructure
Perth CBD, WA
Macksville, NSW
Sydney, NSW
Sydney, NSW
Sydney, NSW
Sydney, NSW
Sydney, NSW
Sydney, NSW
Eaton, WA
Woodman Point Wastewater Treatment Plant
Infrastructure
Woodman Point, WA
Greater Western Flank Phase 2
Ichthys LNG Project
Wheatstone LNG Project
Campbell Barracks
OK Tedi Mining Mine
Oil and Gas
Oil and Gas
Oil and Gas
Cape Lambert, WA
Darwin, NT
Onslow, WA
Marine and Defence
Perth, WA
Metals and Minerals
PNG
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
LOCATIONS
Perth
A
B
C
D
E
F
G
H
I
Newcastle
Darwin
Broome
Gladstone
Sydney
Papua New Guinea (Civmec-Mala)
Uganda (Civtec)
Singapore
6 / FACILITIES & LOCATIONS
ANNUAL REPORT 2017
Global Operations
H
I
Singapore
Uganda
(Civtec)
Papua New Guinea
(Civmec-Mala)
G
25
Australian Operations
22
Darwin
C
1
Broome
D
7
8
3
23
6
5
21
9
Pilbara
Region
2
Perth
Perth Metropolitan
A
24
11
4
19
20
7 / FACILITIES & LOCATIONS
10
E
Gladstone
12
B
Newcastle
F
Sydney
Sydney CBD
13
14
15
16
17
18
WANTSAQLDNSWVICTAS ANNUAL REPORT 2017
YEAR IN REVIEW 2016/2017
JUL16
• Awarded additional contract on the Roy
Hill Iron Ore Project
AUG16
• Awarded 2016 Corporate Business of the Year at
the Rockingham Kwinana Chamber of Commerce
Business Awards
SEP16
• Employer of the Year at the Western Australia
Training Awards
• Awarded Orebody18 Dump Pocket and TLO modifications
co ntract for BHP Billiton
OCT16
• Substantially completed the Perth Stadium project
• Awarded additional contract on Nammuldi
Below Water Table for Pilbara Iron
• Awarded 500 metres of tunnel works for the
Sydney Light Rail
NOV16
• Secured Woodman Point Waste Water Treatment
Plant Upgrade in an alliance with Black and Veatch
and the Water Corporation
• Awarded first maintenance contract in Papua New
Guinea for Barrick Niugini PJV
• ForgacsValco subsidiary established
8 / YEAR IN REVIEW
ANNUAL REPORT 2017
DEC16
• Secured significant contracts for the
Amrun Project with Rio Tinto and Sandvik
• Held ground-breaking ceremony for new
state-of-the-art modularisation facility
FEB17
• Awarded contract for Treendale Bridge for
Main Roads WA
MAR17
• Entered a Memorandum of Understanding with ASC
Shipbuilding to bid on the $3 billion offshore patrol vessel
contract with Luerssen and Damen
APR17
• Awarded EPC contract – Gruyere Gold Project,
in joint venture with Amec Foster Wheeler
MAY17
• Awarded civils contract for Altura Mining
Lithium Operations
9 / YEAR IN REVIEW
JUN17
• Awarded EPC contract for Alcoa’s Pinjarra
Alumina Refinery
ANNUAL REPORT 2017
FINANCIAL HIGHLIGHTS
East coast facility in Newcastle
REPORTING CURRENCY S$’000
2017
2016
CHANGE
Sales revenue
EBITDA
Net profit after tax
Operating cash flow
Earnings per share (cents)
Dividend per share (cents)
Return on equity (%)
345,955
22,863
8,220
(26,758)
1.68
0.7
4.70
396,752
33,946
17,292
34,924
3.45
0.7
10.8
(12.8%)
(32.6%)
(52.5%)
(176.6%)
(51.3%)
-
(56.5%)
OPERATING CURRENCY A$’000
2017
2016
CHANGE
Sales revenue
Net profit after tax
330,266
7,927
392,393
17,130
(15.8%)
(53.7%)
Cashflow from operations was
negative at S$26.8 million,
impacted by the delay in cash
receipts and extended payment
terms from clients. Significant
cash proceeds were used during
the year in further improvements
at the Newcastle and Henderson
facilities. Despite this the Group
recorded a cash balance of
S$24.0 million at year-end.
The Company was pleased
to continue our relationship
with the National Australia
Bank during the year, with total
facilities available to the Group
including insurance bonds of
approximately S$255.0 million.
The Group’s Balance Sheet is
underpinned by a high-quality
asset base. As at 30 June
2017, the Group had Total
Assets of S$324.6 million, Net
Assets of S$174.7 million and
Net Tangible Asset backing per
share of 34.95 Singapore cents.
Total shareholders’ equity
increased 8.9% to S$175.1
million in FY2017 from S$160.8
million in FY2016.
The chart opposite outlines our
comparative performance in our
present operating currency (A$).
The Group has continued to be
profitable in challenging market
conditions and recorded a
positive result for the financial
year ended 30 June 2017
(FY2017).
Revenue for FY2017 amounted
to S$346.0 million compared
to S$396.8 million a year
ago (“FY2016”). The decline
was a result of delays earlier
in the year in securing and
commencement of new project
awards.
For FY2017 Earnings Before
Interest, Tax, Depreciation and
Amortisation (EBITDA) was
S$22.9 million while Net Profit
After Tax (NPAT) was S$8.2
million.
Despite the lower revenue,
gross margins remained steady
at 10.7% in FY2017 compared
to 10.9% in FY2016.
During the year, the Group
made the decision to invest
in its future and maintain a
level of corporate overhead to
support the growth expected in
the coming financial years.
10 / FINANCIAL HIGHLIGHTS
ANNUAL REPORT 2017
REPORTING CURRENCY (S$)
$346.0m
$22.9m
$8.2m
1.68c
0.7c
$610m
OPERATING CURRENCY (A$)
$330.3m
$7.9m
11 / FINANCIAL HIGHLIGHTS
$405.9m$433.7m$499.2m$396.8m$54.3m$53.8m$45.8m$33.9m$36.0m$35.1m$30.3m$17.3m0.7c$339m0.7c$301m0.7c$250m0.7c$155m7.20c7.00c6.05c3.45c$319.1m$374.9m$453.4m$392.4m$28.3m$30.2m$27.3m$17.1m ANNUAL REPORT 2017
EXECUTIVE CHAIRMAN’S
STATEMENT
During the year, the Company has made solid progress
on its market growth and diversification strategy,
ending the year in a positive financial position.
It is with pleasure that I present the 2017
Civmec Limited Annual Report.
Whilst the 2017 financial year did not deliver
revenue or profit growth the Company has
performed well in a challenging business
environment.
Civmec has continued with its development
plans of its facilities on the east and west coast
of Australia in line with our strategy to grow, gain
greater market share and take advantage of the
increased opportunities in the markets in which
we operate.
We are committed to further advancing the long-
term growth strategy and broadening of revenue
sources. This will be achieved by leveraging
our multi-disciplinary services and capabilities
provided to our clients and entering new markets
domestically with keeping a conscientious
overview on international opportunities.
FINANCIAL PERFORMANCE
Sales revenue for FY2017 was S$345.9 million,
down 13% compared to a year ago (“FY2016”),
because of delays early in the year in the
securing and commencement of new projects.
Net Profit after Tax for FY2017 amounted to S$8.2
million, down from S$17.3 million in FY2016.
The Company’s Balance Sheet is strong with a
net asset position of S$174.7 million underpinned
by our significant investment in property, plant
and equipment and cash balance of S$24.0
million at year-end.
DIVIDENDS
The Board of Directors has recommended a
cash dividend of S$0.7 cents per share, subject
to shareholders’ approval at our Annual General
Meeting on 26 October 2017.
The full year dividend payment represents
a 43.0% payout ratio. Dividends paid will
continue to be reviewed in line with trading
conditions, requirements for cash and investment
opportunities.
The dividend will be paid on 14 December 2017.
SAFETY PERFORMANCE
We continue our steadfast commitment to safety
and to be recognised as an industry leader in
health and safety management. Our focus for
the coming year will be on further promoting our
“Never Assume” safety initiative and developing
a strong leadership and safety culture throughout
the business.
PEOPLE
At Civmec, we recognise that our people are our
greatest assets, and contribute a big role in the
Company’s journey towards long-term sustainability
and success. It is the capability, innovation and
commitment of our people who continually enables
us to successfully deliver to our clients.
Employee numbers remained consistent with those
of previous years with a total direct workforce of
approximately 1,700 employees during the year.
We as a company strive to maintain our competitive
advantage by self-performing delivery and
developing and retaining talent.
12 / CHAIRMAN’S STATEMENT
ANNUAL REPORT 2017
As a business, we are committed to being a good
corporate citizen by taking responsibility for all our
social, ethical and environmental actions.
EXECUTING OUR STRATEGY
During the year, Civmec successfully capitalised
on several opportunities in core markets including
establishing the business as a leading EPC
contractor that has secured a number of significant
contract awards.
The past year has seen an increase in investment
activity in the metals and minerals sectors including
the gold and lithium sectors. This combined with the
well documented infrastructure boom on the east
coast of Australia has resulted in strong tendering
activity and future opportunities for the Company.
FY2017 has been a successful year and while we
have not achieved financial growth we have been
resolute in our commitment to execute our strategy
and focused on tomorrow’s future.
Our ability to innovate, adapt to market conditions
and our clients’ needs, while continually evolving
as a business has enabled us to finish the financial
year positively, with a strong order book and a
strong pipeline of opportunities.
FUTURE FOCUS
Our FY2017 results demonstrate the Company’s
ability to be value-driven and our commitment to
remain profitable, even in difficult market conditions.
This highlights Civmec’s resilience and adeptness
in responding to challenges by creating new
opportunities.
We will continue with our strategy to provide cost-
effective, intelligent engineering solutions for our
clients and maintain our disciplined approach to
capital management.
The business has invested significant resources
in establishing a solid platform for the coming
year. We look forward to further growing and
expanding our capabilities, as well as securing
further work in the Defence and Energy markets.
We have strategically positioned the business as
a strong contender to participate in the Australian
government’s projected defence investment
and have commenced building a state-of-the-art
modularisation facility at our Henderson facility
13 / CHAIRMAN’S STATEMENT
which will be Australia’s largest undercover
construction and modularisation facility.
The 60-metre high facility will also allow us to
carry out larger modular assemblies undercover
for the oil and gas and metals and minerals
markets, and further our capacity with our
expansion in shipbuilding and ship maintenance
which is another way of ensuring we are globally
competitive. This significant investment will play a
major role in the Company’s long-term future.
The Company will continue to explore and
extend core services to overseas markets with
several potential opportunities identified in our
current markets.
The strength of our Balance Sheet provides the
Company with substantial capacity to pursue
investment opportunities to advance our long-
term growth strategies.
Our strategic position as a market leader in
engineering and construction services and our
strong order book provides us with confidence
that Civmec will enjoy significant revenue and
earnings growth over the coming years.
To assist in our chances of securing Australian
defence and infrastructure projects, and to
reinforce our strong presence in Australia,
investigations are currently underway to explore
options for a dual listing on the Australian Stock
Exchange (ASX) in the near future. We will
keep our shareholders updated on this as the
investigations progress.
On behalf of the Board, I would like to extend my
appreciation to all employees for their valuable
contributions. To our loyal shareholders, thank
you for your continued support as we forge
ahead to achieve our vision.
Yours sincerely,
JAMES FINBARR FITZGERALD
Executive Chairman
Civmec Limited
ANNUAL REPORT 2017
CHIEF EXECUTIVE OFFICER’S
REPORT
Following on from having already achieved creditability
as a multi-disciplinary provider of turnkey solutions
to our clients in our many markets, FY2017 was
very much focused on elevating our capabilities and
securing more projects as an EPC contractor. For the
12 months ended 30 June 2017, we placed emphasis
on securing high-value contracts while maintaining
operational efficiencies, enabling us to enter the new
year with a very healthy order book and a strong
platform for growth.
BUSINESS PERFORMANCE
During FY2017, we continued to focus on
the future, including broadening our project
base, and securing contracts with asset owners.
We have expanded our horizons and developed
our capabilities to now be able to complete
EPC contracts as well as delivering as a
sub-contractor.
New contracts valued at approximately
S$821 million were secured throughout
FY2017 across our four markets - oil and gas,
metals and minerals, infrastructure and marine
and defence.
Major contracts in our metals and minerals
market were secured, including two contracts
on the Amrun project in North Queensland
for Rio Tinto and Sandvik, an EPC contract
in joint venture with Amec Foster Wheeler for
the construction of the Gruyere Gold project
and a civils contract for Altura Mining on the
Pilgangoora Lithium project. Continuing our
relationship with Alcoa Australia, we were
awarded an EPC contract for the Pinjarra
Alumina Refinery.
We continue a hardworking approach with
our clients to ensure they are getting the best
overall solution for their exclusive projects and
it is very satisfying to see our efforts being
rewarded with these contracts.
14 / CHIEF EXECUTIVE OFFICER’S REPORT
Building on last year’s infrastructure
contracts – the majority in New South Wales
for their public transport development – we
secured additional contracts with our existing
client base, working on the Sydney Light Rail
and Westconnex M4 and M5 road infrastructure
project as well as the manufacture of the Eastern
Distributor Bridge, to name a few.
Meanwhile, we continue to reach target
milestones in our alliance project with the
Water Corporation and Black and Veatch for
our Woodman Point wastewater treatment plant
upgrade. This was a landmark win for Civmec as
it opens us to further project opportunities in the
water industry.
Over the year, we also secured long-term
maintenance contracts across Australia.
These contracts help to lay a foundation for
future works.
STRATEGY
In order to provide a more sustainable
foundation for the future, focus for FY2017
has been the continual development of our
Henderson and Newcastle facilities. Our
Henderson facilities will now stand at a total
200,000m2. We are currently completing the
ANNUAL REPORT 2017
earthworks and to make way for the paint and
blast facility to be built first, followed by the
modularisation facility.
At our Newcastle facility, we are nearing
completion of our stage one development and
will now focus on further development of the site.
We continued to strengthen our team during
FY2017 with the appointment of a Business
Systems Manager who will ensure our systems
keep up with the growth of disciplinary
diversification that the Company is undergoing.
We also introduced an Aboriginal Affairs
Coordinator, who will focus on implementing
our first Reconciliation Action Plan (RAP) and
broaden our Aboriginal engagement strategies.
Our overall strategy for the year was to secure
high-value contracts, preserve our balance
sheet and maximise our shareholders’ returns.
While always conscious of our overhead costs,
our decision to retain key people to ensure
success in securing future projects has paid off.
We have subsequently reviewed the overhead
and made suitable positive adjustments for the
year ahead.
OUR PEOPLE
At Civmec, our high-performing employees
drive our Company to success. They are
dedicated and committed, ensuring a future
for the Company.
The number of direct employees at the end of
FY2017 was approximately 1,700, while during
the year at least another 1,000 people were
employed as a result of our activities.
Across our offices, facilities and sites,
Civmec continues to support its people through
learning and development opportunities that
highlight their strengths and abilities.
15 / CHIEF EXECUTIVE OFFICER’S REPORT
Our vision is to ensure every person that
comes to work at Civmec is proud of the
company they work for, with a strong work
ethic, and willing to adopt our principles and
values to ensure we create a sustainable and
successful Civmec.
OUTLOOK
As we look to the future, we will continue
to engage with key stakeholders involved in
the future Naval Defence Acquisition Programme.
We will also further develop our Henderson and
Newcastle facilities.
Our continuing strategy in the marine and
defence market is to evaluate further opportunities
in the water space, as well as understand what
lies ahead in the energy market. We will also
direct our infrastructure segment towards a focus
on high-level specialised projects.
We see the outlook as positive and are looking
forward to a successful future.
Yours sincerely,
Patrick Tallon
Chief Executive Officer
Civmec Limited
Light rail bridge structure being installed over Eastern Distributor, New South Wales
OUR
APPROACH
17
OUR APPROACH
ANNUAL REPORT 2017
OUR MULTI-DISCIPLINED
APPROACH
We have a self-performing model with the ability to be a
turnkey solutions provider, offering an integrated, multi-
disciplined service across the oil and gas, metals and minerals,
infrastructure and marine and defence markets.
We offer flexibility and budget benefits through
economies of scale, enabling us to meet the
demands of our clients’ critical time frames and
individual project-specific requirements.
We are safety conscious with a dedicated and
loyal workforce that ‘Never Assumes’. We are
growing, developing and constantly learning
and improving.
By continually refining our strategy over the
years and focusing on diversifying, investing
and always delivering, we have seen growth and
returns from our key markets. During the year,
we explored opportunities with the marine and
defence market, as well as water and energy,
and we see these as strong prospect areas for
our future.
We are passionate about playing our part
in ensuring that Civmec and Australian
manufacturing is recognised as a world leader in
producing the highest quality assets for our clients.
Hence, we have the confidence to invest heavily
in creating the world’s most efficient systems,
facilities, construction methods, with a skilled
and passionate workforce that uses the most
modern tools and equipment.
Successful turnkey solution provider
PEOPLE
CLIENTS
HSE
QUALITY
FINANCIAL
GOVERNANCE
Our success
is achieved
through our
high-performing
workforce.
Satisfied
clients provide
sustainment and
key long-term
relationships.
Our ‘Never
Assume’ culture
is aimed to
ensure that
all our people
can operate
in a safe work
environment.
Embracing
innovation and
technology
provides us with
improved quality
and efficiencies.
With a strong
balance sheet
and significant
financial facilities,
we can offer
our clients
assurance.
A strong
understanding
of governance
provides us
with strong
decision-making
skills.
Heavy
Engineering
Modularisation
Site Civil
Works
Precast
Concrete
Structural
mechanical
piping
Electrical
instru-
mentation
control
Mainten-
ance and
shutdown
works
Insulation
& Surface
Treatment
Refractory
and
Associated
services
Access
Solutions
Oil & Gas
Metals & Minerals
Infrastructure
Marine & Defence
Commitment
Innovation
Value Driven
Make a
Difference
Excellence
Collaboration
18 / OUR MULTI-DISCIPLINED APPROACH
ANNUAL REPORT 2017
Some of our people at various locations across Australia
19 / OUR MULTI-DISCIPLINED APPROACH
ANNUAL REPORT 2017
OIL & GAS
Despite market predictions, we managed to sustain a reasonable
turnover and explored new opportunities, indicating improved
prospects going forward.
HIGHLIGHTS
Annual turnover
S$54 million
S$45 million
in new contract awards
and extensions
AWARDED
IMPORTANT CONTRACTS
for the Ichthys LNG and
Varanus Island
We continue to build on our current relationships
with major LNG developers, while developing new
relationships with clients for future opportunities.
Through FMC Technologies, we continued to be
awarded works for Woodside, involving complex
piping and structural fabrication items. We also
continued our scope of works on phase 2 of the
Greater Western Flank (GWF) manifolds project,
which is due for completion later this year.
After successfully carrying out works on the
GWF, we were awarded the contract for supply,
fabrication, surface treatment and testing of
two jumper spools by Fugro. Clients have the
confidence in us to deliver high-quality products,
on time and on budget. This is a key factor when it
comes to awarding extra scope of works.
New client Quadrant, an oil and natural gas
provider, awarded us the brownfields structural,
mechanical and piping tie-in works within the East
Spar Gas Plant, including final connection to the
existing process piping and vessels.
We have also been awarded extension packages
for the Inpex Ichthy’s LNG combined cycle
power plant project for site civil, site logistics,
pipe spooling, fabrication and mechanical
rectification works.
Continuing our support for the onshore combined
cycle power plant on the Ichthys LNG project, we
secured a direct contract with JKC for the execution
of civil works. We have worked on this project
since 2014 and were delighted to continue, having
established a strong relationship with the client.
OUTLOOK
Our focus is to continue to build strong
relationships with our key clients for future
opportunities. Tendering activity within the oil
and gas market is moderate and we anticipate
an increase in 2019.
20 / OIL & GAS
ANNUAL REPORT 2017
Greater Western Flank - Subsea Modules
Ichthys LNG Project - Combined Cycle Power Plant
Caption needed
Some of our workers on the Ichthys LNG Project
21 / OIL & GAS
ANNUAL REPORT 2017
METALS & MINERALS
Our Metals and Minerals division had another successful year of
completing vertical package solutions for major clients on some
of Australia’s most prestigious projects. We have also secured
additional resource and energy contracts with new clients.
Expanding on last year’s focus of providing a
full turnkey solution, we secured a significant
construction contract on the Amrun project for
Rio Tinto. This contract involves extensive off-
site modularisation and the construction of the
bauxite processing plant facilities on the Cape
York Peninsula in North Queensland.
In addition to our contract with Rio Tinto, we
were also awarded a contract with Sandvik
for the supply, fabrication, surface treatment,
mechanical and electrical installation and the
modularisation of stacker, reclaimer and ship
loader for bauxite material handling on the
Amrun project.
We continued our relationship with Roy Hill,
completing the fabrication and installation of
steel arches for the five COS tunnels and the
fabrication, installation and concrete works for
the three primary crushing stations.
We continued our relationship with Rio Tinto Iron
Ore with the award of works on the Nammuldi
Below Water Table for the tyre change facility
and the supply and installation of all structural,
mechanical, piping and electrical works at the
Cape Lambert and Mesa J sites.
Additionally, we strengthened our relationship
with BHP with the award of modification works
on Orebody 18 Dump Pocket and TLO facilities,
and the supply and fabrication of new transfer
load-out flow enhancers for their Newman Hub.
In April 2017, we were awarded another EPC
contract as part of the Amec Foster Wheeler
Civmec joint venture (ACJV) for the Gruyere
Gold Project. This is one of the largest and most
prestigious projects in Western Australia for
2017 and we are proud to play a major role.
HIGHLIGHTS
Annual turnover
S$191 million
S$642 million
in new contract award
and extensions
AWARDED
SIGNIFICANT CONTRACTS
for the Amrun, Gruyere Gold,
Pinjara Alumina and
the Pilgangoora Lithium
Plant Projects
22 / METALS & MINERALS
Port Kembla Coal Terminal - Stacker’s and Reclaimer
Roy Hill Project - Tunnel Strengthening Works
ANNUAL REPORT 2017
Building on our successful track record of
delivery on previous and current EPC projects,
Civmec was awarded a significant EPC contract
by Alcoa of Australia Ltd for the Pinjarra Alumina
Refinery. We are responsible for the design and
construction of the filter building and material
handling system.
In May 2017, we were awarded civil construction
works for a greenfields project, the Pilgangoora
lithium plant in Port Hedland for Altura Mining.
This is a significant award that represents
our expanding client and knowledge base by
delivering a lithium project, an emerging mineral
base mined in Australia.
OUTLOOK
With the continued success of our Metals
and Minerals division, we intend to capture
new opportunities, proving our clients a
turn-key solution.
Our tendering activity is high in this division, as
there are a variety of projects across capex and
sustaining capital and increasing opportunities
in the gold and lithium operations.
During the last year we have increased our
refractory, maintenance and minor works area of
the business, with the strategy in place to build
on this as we see many plants heading towards
this requirement in their life cycle.
Cape Lambert Maintenance Works
23 / METALS & MINERALS
ANNUAL REPORT 2017
INFRASTRUCTURE
Our Infrastructure division continued to grow this year with the award
of significant contracts throughout New South Wales, as well as the
completion of the Perth Stadium. This year also saw the award of a
major water contract with The Water Corporation.
HIGHLIGHTS
Annual turnover
S$101 million
S$134 million
in new contract award
and extensions
AWARDED
SIGNIFICANT CONTRACTS
for the Sydney Light Rail and
Woodman Point Wastewater
Treatment Plant
Since commencing works on the Perth Stadium
in 2015, we are proud to have been a major
contributor supporting the West Australian
Government on this iconic Western Australian
project. In October 2016, having successfully
completed both the structural frame and
installation of the precast seating platforms,
we achieved a significant milestone when we
completed the installation of 50 roof trusses.
Further to our precast and concrete works
on the Northwest Rail Link project, we were
successfully awarded additional packages for
the supply and installation of structural steel
components for various train stations. These
will all form part of the Sydney Metro Northwest,
offering a reliable public transport service to
the region.
As NSW is going through a development and
expansion phase, we also secured works on the
Sydney Light Rail, a new light rail network for
Sydney extending from Circular Quay. For the
first package of works, we supplied concrete
elements that make up the light rail bridge. This
was installed over five nights and sits over one
of the busiest roads in New South Wales. The
second package awarded was the structural
and concrete works for the nine-metre deep
Moore Park Tunnel, consisting of over 20,000m2
of formwork and 7,000m3 of concrete and
stretching 500 metres.
In December 2016, in joint venture with Black
& Veatch, we were awarded an EPC alliance
model contract with the Water Corporation
of Western Australia for the design and
construction of the Woodman Point Wastewater
Treatment Plant Upgrade to 180ml/day. Securing
this contract will help contribute to the water and
wastewater infrastructure division as a long-term
business opportunity.
24 / INFRASTRUCTURE
Woodman Point Wastewater Treatment Plant
ANNUAL REPORT 2017
Other contract awards include the Treendale
Bridge for Main Roads Western Australia, with
the supply, fabrication and delivery of structural
steel beams for the new bridge.
OUTLOOK
Our outlook for the infrastructure market is
strong, as we continue to involve ourselves
with steel fabrication and precast concrete
opportunities for public infrastructure works with
a strong focus on high-level specialised projects.
With the further development of our Newcastle
facility, we are able to offer our clients a high-
end product for major infrastructure projects in
New South Wales.
Sydney Light Rail - Moore Park Tunnel
Perth Stadium Project - Fabrication and Concrete Works
Load-out of Stage One Narellan Road Bridge
25 / INFRASTRUCTURE
OTHER ACTIVITIES AND
FUTURE DEVELOPMENTS
Throughout the year, we have made progress in our efforts to broaden
our capabilities with the addition of valve maintenance, pressure testing
and electrical installation. In addition, we have also progressed with our
planned expansion into the marine and defence market.
NEW FACILITIES
As we build and invest in the future of Civmec, we
held a ground-breaking ceremony in December
2016 to announce plans for the expansion of our
Henderson facilities. This facility will be large enough
to house complete Air Warfare Destroyers or Frigates
as well as large integrated modules for the Oil and
Gas and Mining sectors.
NAVAL SHIPBUILDING
To further our opportunities in the Naval Defence
Acquisition programme, in March 2017 we signed an
MOU with Australia’s largest naval steel shipbuilder,
the Australian Government-owned ASC Shipbuilding,
to work together for minor naval vessel construction
in Western Australia, with our initial target being the
Offshore Patrol Vessels (OPVs) programme.
The bid for the OPVs saw us work closely with
OPV designers Leurssen Werft GmbH & Co. KG of
Germany and B.V. Sheepswerf Damen Gorinchem
of the Netherlands. Both these companies have
generations of shipbuilding experience which they
are bringing to Australia and sharing with Civmec.
ELECTRICAL WORKS
Civmec, through its wholly-owned company
Civmec Electrical and Instrumentation Group,
is now licenced to self perform electrical work
throughout Western Australia, South Australia, New
South Wales, Northern Territory and Queensland.
This adds to our capabilities as a turnkey solution
provider to our clients by enabling us to perform
electrical works in-house.
HIGHLIGHTS
Building the
largest
undercover modularisation
and maintenance facility in
Australia.
Key
partnerships
with prime shipbuilding
companies.
Electrical
licence
Licenced electrical contractor in
WA, SA, NT, NSW and QLD
2626 / MARINE & DEFENCE
ANNUAL REPORT 2017 Ground-breaking ceremony - commencing construction
FORGACSVALCO
In November 2016, Forgacs, a Civmec
Company, signed an agreement with French
Valve Company Valco to set up a valve servicing
and maintenance centre in Western Australia
under the name ForgacsValco. Its offerings
include valve diagnostics and repair, spool
hydraulic and pneumatic testing, and on-site
maintenance engineering support.
OUTLOOK
Our continuing strategy is to broaden our
scope of capabilities we can offer in-house to
our clients with a greater suite of services fully
under our control.
ForgascsValco activities
Planned development of the Henderson facilities
2727 / MARINE & DEFENCE
ANNUAL REPORT 2017 Workers at the West Coast Facility, Henderson
SUSTAINABILITY
29
29
SUSTAINABILITY
ANNUAL REPORT 2017
OUR PEOPLE
Our high performing employees drive Civmec to success. They
are dedicated and committed, ensuring a future for the Company.
We continue to support our people through
learning and development opportunities,
highlighting their strengths and abilities
whilst identifying areas for further development.
With our in-house Registered Training
Organisation (RTO), we are able to offer our
employees a range of training programmes.
Over the past 12 months, we set ourselves a target
of employing and retaining more apprentices. We
are happy to say we currently have 40 apprentices
and trainees, up 42.4% from last year. Employing
apprentices at Civmec is fundamental to the future
of the Company and our industry, while providing
individual learning and development opportunities.
In January 2017, we were delighted to welcome
our first Aboriginal Electrical Apprentice. We
intend to employ more apprentices, as this helps
us provide a sustainable workforce for the future.
We continued to build our workforce across
the country, employing local people in the
regions to work on some of Australia’s most
prestigious projects.
By providing ongoing employment opportunities,
we provide a framework for people to build their
career with us. We recognise that the greatest
thing we can instill in our people is pride in who
they are, what they do and who they work for.
Our people are proud of the growth we have
achieved together and are genuinely excited
about our future.
ABORIGINAL ENGAGEMENT
At Civmec, we continue to ensure we have an
environment where Aboriginal and Torres Strait
Islander (ATSI) peoples are valued and respected.
Civmec’s intention is to make a positive and lasting
difference in the lives of ATSI peoples.
Our Reconciliation Action Plan (RAP) is in its
final stages and will outline our commitment
to making a difference through several key
strategies, which has been ongoing since our
establishment in 2009.
In November 2016, we employed a full-time
Aboriginal Affairs Coordinator who will focus on
ensuring Civmec is engaged in the right Aboriginal
engagement strategies for the right reasons.
He brings with him a wealth of knowledge and
experience, and we look forward to increasing our
Aboriginal engagement activities.
DIVERSITY
We are committed to an equal workforce, where
we are dedicated to inclusion and diversity among
all divisions. With this commitment in place, we
believe we will be able to attract and retain the best
talent within the market.
Civmec is proud of the number of women
we have working within the Company, especially
in executive and management positions including
Chief Financial Officer, Group Manager –
HR/IR, Group Manager - Strategy and
Development, Business Systems Manager,
Training and Development Manager, Senior HSE
Superintendent and Recruitment Manager, just to
name a few.
In addition, through our apprentice program, we
welcomed various female apprentices in both
our Henderson and Newcastle facilities, in the
disciplines of mechanical fitting, boiler-making,
and electrical and instrumentation.
Some of our apprentices during an open day
30 / OUR PEOPLE
ANNUAL REPORT 2017
Some of our people at various locations across Australia
31 / OUR PEOPLE
ANNUAL REPORT 2017
HSEQ
We are proud of our equal focus on health and safety in addition
to environment, quality and socio-economic targets. We have a
driven workforce focused on sustainability, and are willing to be
held accountable while measuring our performance.
Sustainability at Civmec is the over-arching
element in our corporate culture programme –
‘Never Assume’. It describes the principles
and values adopted by all employees and
underpins the culture of Civmec, driving the
behaviour, attitude, decisions and actions
by all in the business to create a sustainable,
successful Company.
HEALTH AND SAFETY
We are a safety conscious company with
a dedicated and loyal workforce. We are always
aiming to develop new methods and striving to
be a market leader.
Our people are the cornerstone of the Health
and Safety management plan, which empowers
them to embrace robust safety practices and
lead by example in the workplace.
The ‘Never Assume’ programme ensures
everyone remains vigilant and focused on the
task at hand, ensuring their safety and that of
everyone around them.
Our increased focus on critical risk management
and targeted audit protocols reduces our
exposure to high risk activities and ensures our
workforce is further protected whilst at work.
Civmec ensures it records the number of
Lost Time Injuries (LTIs) which are industry
recognised metrics, and the Lost Time Injury
Frequency Rate (LTIFR) is used as a lag
indicator of injury prevention performance. As
at the end of FY2017, our LTIFR remained fixed
at 0.33 and during 2016/2017 we reached a
milestone of 600 days LTI free.
As the Company moves to strengthen our
electronic based HSE platform in late 2017,
we will further enhance our ability to support
front-line management in understanding our
critical risk controls and implementing key risk
reduction strategies. Providing direct access
to current Health and Safety requirements and
initiatives will ensure no-one operates under any
assumptions in the workplace. In everything we
do, we Never Assume!
Employees getting ready to start the day
32 / HSEQ
ANNUAL REPORT 2017
Employee partaking in Planet Ark Tree Planting Day
QUALITY
Civmec is proud to be a market leader for
complex fabrication in Australia, and succeeded
in achieving certification to ISO 3834.2 Quality
Requirements for Welding. Our Henderson
workshop became certified for the ASI National
Structural Steelwork Compliance Scheme
(NSSCS), conforming to AS/NZS 5131.
Civmec is the first company in Australia to
achieve compliance with the National Structural
Steelwork Fabrication and Erection Code of
Practice in accordance with the Construction
Category 3. Both the NSSCS and ISO 3834
certifications provide the construction industry
with assurance Civmec has achieved the quality
benchmark required - a great achievement for
the Company, as it broadens our capabilities.
Our internally developed, web-based integrated
business management, quality and tracking
system, Civtrac, continued to develop. We rolled
out productivity tracking, quality control and
completion management activities occurring in
the field on tablets in real time.
This has enabled Civtrac to have a seamless
flow from fabrication through to on-site
installation and commissioning. As with all
previous modules of Civtrac, our clients are
provided access to ensure transparency and
compliance functionality. This ensures a high
level of service, product delivery and execution
of projects - while maximising value.
The ongoing integration of the Health, Safety,
Environment and Quality systems ensures
effective controls in place to ensure our clients’
needs are met on all fronts.
ENVIRONMENT
Civmec acknowledges the delicate surroundings
in which many of our projects are located, and
remain committed to minimising our impact on
the environment. We have strengthened our
compliance and auditing of all facilities and
major projects since our ISO 1400 accreditation.
By actively measuring and monitoring our
performance across the business we have been
able to recognise areas of success and those
that require improving.
Civmec has also demonstrated success across
key environment and sustainability programmes
which are also reflected in our Corporate HSEQ
Objectives. These programmes include:
•
•
•
Communicating environmental requirements
across all work groups through a training and
awareness programme;
Improving our resource efficiency by
reducing unnecessary waste and reducing
waste going to landfill; and
Measuring and monitoring of all inputs
(energy, water and materials) and outputs
(waste and emissions), allowing Civmec to
understand our impact on the environment.
In 2017 the integration of key environmental
themes was introduced to the ‘Never Assume’
programme, which further advances the culture
relating to our People, Safety, Quality
and the Environment.
The coming 12 months will see the
development of the Civmec Sustainability
Policy and Agenda, including Environmental,
Social and Governance factors. This information
will be reported in late 2018 in the Company’s
first Sustainability Report.
Civmec is committed to continually improving its
environmental performance and contributing to a
more sustainable future.
33 / HSEQ
ANNUAL REPORT 2017
COMMUNITY ENGAGEMENT
At Civmec, community engagement is a key component to showing
what is important to us, not only as a company but also as individuals.
Many of our people are involved in various not-for-profit organisations
where they participate in a variety of activities to help disadvantaged
people. We are passionate about working with key charities, community
groups and schools to create better opportunities for all people.
VARIETY CLUB
We have been working with the Variety Club
for over a year, having donated $10,000 at
Christmas toward the purchase of iPads for
children with autism, which will assist them in
overcoming learning challenges.
ANGLICARE
We donated $5,000 at Christmas to the Young
Hearts programme, which assists many families
affected by domestic violence.
MORLEY GAELS FOOTBALL CLUB
During FY2017, we donated funds towards the
Morley Gaels Football Club to assist them in the
purchase of their guernseys for the season.
ASHFIELD PRIMARY SCHOOL
We collaborated with Mikayla King, a local
Aboriginal artist, to create an Aboriginal painting
that was raffled off to raise funds for Ashfield
Primary School – a local school that aims to
improve the attendance of Aboriginal and Torres
Strait Islander (ATSI) students, as well as help
minimise the numeracy and literacy gap.
ASSISTING OUR EMPLOYEES
We continue to invest in our personnel by assisting
them with their events, sponsorships and activities.
One of our employees was selected to represent
Australia in the world arm-wrestling federation
championship in Budapest, Hungary.
34 / COMMUNITY ENGAGEMENT
KWINANA INDUSTRY COUNCIL
IWOMEN PROGRAMME
Civmec delivered fire training to the Kwinana
Industry Council (KIC) iWomen programme. iWomen
is an annual programme that offers young high
school women exposure to career opportunities
within the local industry. This includes building
self-esteem, leadership skills and professional
development, such as preparing for interviews and
how to write a resume. This year, 32 female students
were invited from 19 high schools associated
with the KIC Education Partnership. Civmec was
delighted to be a part of the unique programme.
On the awards night, Civmec sponsored the event
and our CEO Pat Tallon presented the award for the
trainee that demonstrated outstanding leadership
and initiative during the iWomen programme.
LEEUWIN OCEAN ADVENTURE FOUNDATION
Civmec, in partnership with OneSteel, recently
sponsored the steel piping for the STS
Leeuwin mast replacement. This was a much-
appreciated contribution by the Foundation
to help them achieve refit plans for 2017. The
Leeuwin Ocean Adventure Foundation is a not-
for-profit organisation based in Fremantle with
their primary programme being the Youth
Explorer Voyages.
SPONSORSHIP OF CHILDREN’S EVENTS
Civmec - in collaboration with The Starlight
Foundation, The Variety Club WA, Perth
Children’s Hospital Foundation, Anglicare WA
and The Wirrpanda Foundation - has on many
occasions sponsored events for children and
their families by hosting them for sporting events
and stage shows, including Disney of Ice and
The Wiggles at Perth Arena.
TEAL SISTERS
One of our employees was diagnosed with
Neuroendocrine Carcinoma of the Cervix
(NCC) and has created a charity called the
Teal Sisters, which aims to create awareness
and raise research funds. Civmec has been
involved in various fundraising activities for the
Teal Sisters, including hosting a morning tea, a
silent auction and selling raffle tickets. We have
donated more than $7,000 to the Teal Sisters –
with funds going to a great cause.
MSWA
MSWA is a charity that is close to our employees’
hearts, with family members diagnosed with
neurological diseases. Civmec has sold raffle
tickets, chocolates and held various fundraising
activities to help MSWA provide vital support
and services to people living with neurological
conditions in Western Australia; such as multiple
sclerosis, stroke, Parkinson’s Disease, Huntington’s
Disease, Motor Neurone Disease, and acquired
Brain Injury, to name a few.
PROJECT BASED INITIATIVES
Throughout the year, our projects and
employees around Australia were involved in
fundraising activities for Movember, Cancer
Councils Biggest Morning Tea, RUOK Day,
NAIDOC Day, and various other events.
Civmec also supported Reconciliation Week,
sponsoring the Department of Aboriginal Affairs
Reconciliation Week Street Banner Project,
which saw banners throughout Perth CBD and
the Cockburn area.
We continued our relationship with the
Wirrpanda Foundation throughout FY2017,
providing free training for Aboriginal job seekers.
In addition, our training department provided
free consultancy services to help them set up
their own training organisation.
35 / COMMUNITY ENGAGEMENT
ANNUAL REPORT 2017
BOARD OF DIRECTORS
James Finbarr Fitzgerald
Executive Chairman
Mr. James Finbarr Fitzgerald was appointed to our Board on
27 March 2012. He is responsible for the Company’s corporate
direction and implementing the company’s vision and strategic
directions. With more than 35 years’ experience, Mr. Fitzgerald
has a wealth of experience, with the ability to create solutions
for complex tasks, he has a strong belief in training, strong
corporate governance and with uncomplicated systems as a
cornerstone to his and the Company’s growth and success.
Patrick John Tallon
Chief Executive Officer
Mr. Patrick John Tallon was appointed to our Board on
27 March 2012. He is responsible for implementing the
strategic decisions and policies of the Group, with a strong
focus on safety culture, team building, leadership and the
Group’s financial performance. Over the past 29 years, Mr.
Tallon has been refining his knowledge in the oil and gas,
metals and minerals, infrastructure and defence markets,
building an understanding of key stakeholder requirements
at all levels. Never content to accept that we have reached
full efficiency. He is a key driver in company innovation,
productivity improvement and the waste elimination programs
within the business.
Kevin James Deery
Chief Operating Officer
Mr. Kevin James Deery was appointed to our Board on
27 March 2012. He is responsible for ensuring a safety-
focused workplace, delivering a high-quality product, while
overseeing the ongoing business operations of the Group’s
quality-orientated culture, compliance and operational
productivity. Mr. Deery has more than 21 years’ experience,
with extensive experience in the construction and engineering
services industry throughout Australia.
36 / BOARD OF DIRECTORS
ANNUAL REPORT 2017
37 / BOARD OF DIRECTORS
Chong Teck Sin
Lead 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, InnoTeck 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.
Douglas Owen Chester
Independent Director
Mr. Douglas Owen Chester was appointed to our Board
on 2 November 2012. He is Lead Independent Director of
Kim Heng Offshore & Marine Holdings Limited. Prior to his
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.
Wong Fook Choy Sunny
Independent Director
Mr. Sunny Wong Fook Choy was appointed to our Board
on 27 March 2012. He is a practicing 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.,
InnoTeck Ltd. and KTL Global Ltd. Mr. Wong holds a Bachelor
of Law (Honours) from the National University of Singapore.
ANNUAL REPORT 2017
EXECUTIVE TEAM
Justine Campbell
Chief Financial Officer
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 and marketing of the
Company. Ms. Campbell has more than 17 years’ experience
in finance, accounting, corporate transactions and commercial
projects, with extensive experience in overseeing major
acquisitions and implementing numerous systems.
Charles Sweeney
Executive General Manager - Construction
Mr. Charles Sweeney has grown within the Group since
inception and is responsible for managing the Group’s
construction division. With a passion for effective leadership,
Mr. Sweeney is focused on developing the operations
department and client solutions. He has been fundamental in
the completion of key projects, ensuring safety and quality of
the highest standards, including Jimblebar Expansion Project,
Roy Hill Iron Ore Project and Tropicana Optimisation Project.
Damian Kelliher
Executive General Manager – International
Mr. Damian Kelliher joined our Group in 2015 and is responsible
for the management and strategic direction of our international
division. FY2017 saw Mr. Kelliher transition from Group Manager
- Support Services to Executive General Manager - International,
which is forward looking focus for the Company as it investigates
opportunities to expand outside Australia in the future. Mr.
Kelliher has accumulated significant knowledge and experience
in these international markets and is focused on improving our
capability framework internationally.
38 / EXECUTIVE TEAM
Rodney John Bowes
Group Manager Proposals
Mr. Rod Bowes joined our group in 2010 and is responsible for
managing the Group’s business development and tendering
activities. Mr. Bowes brings over 40 years of experience in the
fabrication and construction industry with 23 years’ experience
across various entities, Mr. Bowes is focused on securing a
strong and profitable order book for the group and played a
significant part in securing several major projects during the
year namely - WP180 - Woodman Point Alliance, Gold Roads
- ACJV Gruyere Project, Alcoa - Pinjarra Filtration Project and
Altura Mining Lithium Operations.
Terence Hemsworth
Commercial Manager
Mr. Terence Hemsworth joined our Group in 2010 and is
responsible for the commercial management on the Woodman
Point Wastewater Treatment Plant project, based in Western
Australia. Mr. Hemsworth has held various roles within the
Group, including Henderson Operations Manager and Support
Services Manager. Mr. Hemsworth’s career spans more than
40 years in the construction and fabrication industry, having
worked on major projects for the oil and gas, mining, resource
and infrastructure sectors in Australia the United Kingdom,
South Africa, New Zealand, Singapore and Malaysia.
ANNUAL REPORT 2017
39 / EXECUTIVE TEAM
ANNUAL REPORT 2017
FINANCIAL
REPORT
DIRECTORS’ STATEMENT
42
REPORT ON CORPORATE GOVERNANCE
CORPORATE REGISTRY
INDEPENDENT AUDITOR’S 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
47
66
67
71
72
73
75
77
79
130
132
138
FINANCIAL REPORT
41
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 2017 and the statement of financial position of the Company as at 30 June 2017.
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 71 to 129 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 2017 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 Teck Sin
Mr. Wong Fook Choy Sunny
Mr. Douglas Owen Chester
Executive Chairman
Chief Executive Officer
Chief Operating Officer
Independent Director
Independent Director
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 43.
3 DIRECTORS’ INTERESTS IN SHARES AND DEBENTURES
The interests of the Directors holding office at the end of the financial year in the share capital of the Company and
related corporations as recorded in the register of Directors’ shareholdings were as follows:
HOLDINGS REGISTERED
IN THE NAME OF
DIRECTORS
HOLDINGS IN WHICH A
DIRECTOR IS DEEMED TO HAVE
AN INTEREST
AT 1.7.16
AT 30.6.17
AT 1.7.16
AT 30.6.17
NO. OF ORDINARY SHARES
-
54,000
-
-
97,720,806
54,000
97,566,806
-
13,295,250
97,720,806
97,566,806
13,295,250
The Company
Mr. James Finbarr Fitzgerald
Mr. Patrick John Tallon
Mr. Kevin James Deery
There was no change in any of the above-mentioned interests between the end of the financial year and 21 July 2017.
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.
42
ANNUAL REPORT 2017
DIRECTORS’ STATEMENT
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 Teck Sin and Mr. Douglas Owen Chester.
The CESOS forms an integral and important component of the employee compensation plan, which is designed
to primarily reward and retain key management and employees of the Company whose services are integral to the
success and the continued growth of the Company.
Principal terms of the Scheme
(i) Participants
Under the rules of the Scheme, executive and non-executive Directors (including independent Directors) and
employees of the Company, who are not Controlling Shareholders or their associates, are eligible to participate in
the Scheme.
Persons who are Controlling Shareholders and their Associates shall not participate in the CESOS unless:
(a) written justification has been provided to Shareholders for their participation at the introduction of the CESOS or
prior to the first grant of Options to them;
(b) the actual number and terms of any Options to be granted to them have been specifically approved by
Shareholders who are not beneficiaries of the grant in a general meeting in separate resolutions for each such
Controlling Shareholder; and
(c) all conditions for their participation in the CESOS as may be required by the regulation of the SGX-ST from time to
time are satisfied.
(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.
43
ANNUAL REPORT 2017 DIRECTORS’ STATEMENT
4 SHARE OPTIONS (Continued)
CIVMEC LIMITED EMPLOYEE SHARE OPTION SCHEME (CONTINUED)
Principal terms of the Scheme (Continued)
(iv) Grant of Options
Under the rules of the Scheme, there are no fixed periods for the grant of options. As such, offers for the grant of
options may be made at any time, from time to time at the discretion of the Committee.
In addition, in the event that an announcement on any matter of an exceptional nature involving unpublished price
sensitive information is imminent, offers may only be made after the second market day from the date on which the
aforesaid announcement is made.
(v) Termination of Options
Special provisions in the rules of the Scheme deal with the lapse or earlier exercise of Options in circumstances which
include the termination of the participant’s employment in the Company, the bankruptcy of the participant, the death of
the participant, a take-over of the Company and the winding-up of the Company.
(vi) Acceptance of Options
The grant of options shall be accepted within 30 days from the date of offer. Offers of options made to grantees,
if not accepted by the closing date, will lapse. Upon acceptance of the offer, the grantee must pay the Company a
consideration of S$1.
(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 2017, 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
11 September 2023
4,500,000
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 2017 are as follows:
EXPIRY DATE
EXERCISE PRICE
NUMBER OF OPTIONS
11 September 2023
$0.65
4,500,000
44
ANNUAL REPORT 2017 DIRECTORS’ STATEMENT
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 Teck Sin and Mr. Douglas Owen Chester.
The CPSP forms an integral and important component of the employee compensation plan, which is designed to
primarily reward and retain key management and employees of the Company whose services are integral to the success
and the continued growth of the Company.
Principal terms of the Scheme
(i) Participants
Under the rules of the Scheme, employees including Executive Directors and Associated Company Employees,
who are not Controlling Shareholders or their associates, are eligible to participate in the Scheme.
Persons who are Controlling Shareholders and their Associates shall be eligible to participate in the Civmec Performance
Share Plan if:
(a) their participation in the Civmec Performance Share Plan, and;
(b) the actual number and terms of the Awards to be granted to them have been approved by independent Shareholders
of the Company in separate resolutions for each such person.
(ii) Size of the Scheme
The aggregate number of new Shares in respect of which Awards may be granted on any date under the CPSP,
when added to (i) the aggregate number of Shares issued and issuable in respect of options granted under the Civmec
Employee Share Option Scheme, and (ii) any other share schemes to be implemented by the Company, shall not exceed
15% of the number of issued Shares on the day immediately preceding the relevant Date of the Award
(or such other limit as the SGX-ST may determine from time to time).
(iii) Grant of Awards
Under the rules of the Plan, there are no fixed periods for the grant of Awards. As such, offers for the grant of Awards may
be made at any time, from time to time at the discretion of the Committee.
In addition, in the event that an announcement on any matter of an exceptional nature involving unpublished price
sensitive information is imminent, offers may only be made after the second market day from the date on which the
aforesaid announcement is made.
(iv) Lapse of Awards
Special provisions in the rules of the Plan deal with the lapse of Awards in circumstances which include the termination
of the participant’s employment in the Company, the bankruptcy of the participant, a take-over of the Company and the
winding-up of the Company.
(v) Release of Awards
After the end of each performance period, the Remuneration Committee (the “RC”) will review the performance targets
specified in respect of the Award and if they have been satisfied, will release Awards to Participants.
(vi) Duration of the Plan
The Plan shall continue in operation for a maximum duration of 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
45
ANNUAL REPORT 2017 DIRECTORS’ STATEMENT
6 AUDIT COMMITTEE
The members of the Audit Committee (“AC”) at the end of the financial year are as follows:
Mr. Chong Teck Sin
Mr. Wong Fook Choy Sunny
Mr. Douglas Owen Chester
Chairman
Member
Member
All members of the Audit Committee are non-executive Directors. The Audit Committee performs the functions
specified by the Listing Manual of the Singapore Exchange Securities Trading Limited (“SGX-ST”) and the Code of
Corporate Governance.
The nature and extent of the functions performed by the Audit Committee are detailed in the Corporate Governance
Report set out in the Annual Report of the Company.
INDEPENDENT AUDITORS
7
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 2017
46
ANNUAL REPORT 2017
REPORT ON
CORPORATE GOVERNANCE
INTRODUCTION
The Board of Directors (the “Board”) and the Management of Civmec Limited (“Civmec” or the “Company”)
together with its subsidiaries (the “Group”), recognise the importance of good corporate governance in ensuring
greater transparency, protecting the interests of its shareholders, as well as strengthening investors’ confidence in
its management and financial reporting and are, accordingly, committed to maintaining a high standard of corporate
governance throughout the Group.
This corporate governance report (“Report”) describes the Company’s corporate governance practices that were in
place during the financial year ended 30 June 2017 (“FY2017”) 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 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.
All Directors are aware of their fiduciary duties and exercise due diligence and independent judgement in ensuring that
their decisions are objective and in the best interests of the Company.
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 Office, Mr. Patrick John Tallon and the Chief Operating
Officer, Mr. Kevin James Deery. Matters that are specifically reserved for the approval of the Board include,
among others:
•
•
•
•
•
•
reviewing the adequacy and integrity of the Group’s internal controls, risk management systems,
compliance and financial reporting systems;
approving the annual budgets and business plans;
approving any major investment or expenditure;
approving material acquisitions and disposal of assets;
approving the Company’s periodic and full-year results announcements for release to the SGX-ST;
approving annual report and audited financial statements;
• monitoring Management’s performance;
recommending share issuance, dividend payments and other returns to shareholders;
ensuring accurate, adequate and timely reporting to, and communication with Shareholders; and
assuming responsibility for corporate governance.
•
•
•
47
ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
BOARD’S CONDUCT OF AFFAIRS (Continued)
Principle 1 (Continued)
The Company has adopted a policy on signing limits, setting out the level of authorisation required for specific
transactions, including those that require Board approval.
All the Board members are actively engaged and play an important role in ensuring good corporate governance within
the Company. Visits to the Company’s business premises are 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 regularly 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 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 2017 (“FY2017”) is set out below:
BOARD COMMITTEES
BOARD
AUDIT
COMMITTEE
REMUNERATION
COMMITTEE
NOMINATING
COMMITTEE
RISKS AND
CONFLICTS
COMMITTEE
4
4
4
4
4
4
4
4
4*
4*
4*
4
4
4
2
No. of Meetings Attended
2*
2*
2*
2
2
2
2
2*
2*
2*
2
2
2
4
4*
4*
4*
4
4
4
No. of Meetings Held
James Finbarr Fitzgerald
Patrick John Tallon
Kevin James Deery
Chong Teck Sin
Wong Fook Choy Sunny
Douglas Owen Chester
*By Invitation
48
ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
BOARD’S CONDUCT OF AFFAIRS (Continued)
Principle 1 (Continued)
All Directors are updated regularly on changes to the Company’s policies 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.
BOARD COMPOSITION AND GUIDANCE
Principle 2: Strong and independent element on the Board.
As at the date of this Report, the Board comprises six (6) Directors, three (3) of whom are Executive Directors and
the remaining three (3) Directors being Independent Directors who make up half of the Board. 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.
No individual or group of individuals dominates the Board’s decision-making as half of the Board consist of
Independent Directors. 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/or government,
and as such, each contributes significant weight to Board decisions.
The Board in concurrence with the Nominating Committee (“NC”) is of the view that the current Board and the board
committees comprises an appropriate balance and diversity of skills, experience and knowledge of the Company,
which provides broad diversity of expertise such as accounting or finance, business or management experience,
industry knowledge, strategic planning experience and customer-based experience and knowledge who, as a group,
provide core competencies necessary to meet the Company’s requirements. Further details on the key information and
the profile of the Directors including their academic and professional qualification, and other directorships in other listed
companies is set out on pages 36 of this annual report.
The current Board composition provides a diversity of skill, experience, and knowledge to the Company as follows:
CORE COMPETENCIES
BALANCE AND DIVERSITY OF THE BOARD
NUMBER OF
DIRECTORS
6
1
1
6
3
PROPORTION OF
BOARD
100%
17%
17%
100%
50%
6
0
100%
0
Business Management
Accounting or finance
Legal or corporate governance
Strategic planning experience
Relevant industry knowledge or experience
GENDER
Male
Female
49
ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
BOARD COMPOSITION AND GUIDANCE (Continued)
Principle 2 (Continued)
The Company valued diversity and equal opportunity and has adopted diversity policy to ensure that its workforce is
made up of individuals with diverse skills, values, backgrounds and experience to the benefit of the Group. Diversity
refers to characteristics such as age, gender, sexual orientation, race, religion, disability and ethnicity. All appointments
and employment of employees including directors are based strictly on merit and equal opportunity and not driven by
any gender bias. Management is responsible for achieving the diversity objectives and report the progress towards
and achievement of diversity objectives to the Board of Directors.
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. Each Director is required to declare any circumstances in which
he may be considered non-independent. The NC will then review the Confirmation of Independence to determine
whether a Director is independent. 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. However, taking into account the need for Board refreshment, the Board will develop 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 balance of view-points.
The Independent Directors communicate regularly without the presence of the other Executive Directors and
Management to discuss matters such as succession and leadership development planning, board processes and
corporate governance initiatives matters. Feedback on the outcomes of these discussions is provided to the
Executive Chairman.
The Lead Independent Director will represent the Independent Directors in responding to shareholders’ questions and
comments that are directed to the Independent Directors as a group.
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.
To facilitate more effective check on management, the Non-Executive Directors meet as and when necessary and at
least once a year with Auditors without the presence of the management.
The Board and management fully appreciate that a fundamental of good corporate governance is an effective
and robust Board whose members engage in open and constructive debate and challenge management on its
assumptions and proposal.
The Company has in place processes to ensure that the Non-Executive Directors are well supported by accurate,
complete and timely information, have unrestricted access to management and have sufficient time and resources to
discharge their oversight function effectively. These include informal meetings for management to brief the Directors
on prospective deals and provide the Board with regular information on projects and initiatives. To keep the Board
abreast of relevant business developments, the Company regularly circulates to the Board, analyst and media
commentaries on matters in relation to the Company and the industries in which it operates.
50
ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
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 Executive Chairman bears responsibility for providing guidance on the
corporate direction of the Group and leadership to the Board, and the CEO has executive responsibility for the
Company’s day-to-day business. The Executive Chairman and the Chief Executive Officer are not related.
The Executive Chairman ensures that Board meetings are held when necessary and approves the agenda in
consultation with other Directors and ensures that Board members are provided with complete, accurate and timely
information on a regular basis to enable them to be fully cognisant of the affairs of the Company.
The Executive Chairman monitors communications and relations between the Company and its shareholders, and
between the Board and management to encourage constructive relations and dialogues amongst them. As well, the
Executive Chairman works to facilitate the effective contribution of Directors and assists to ensure procedures are in
place to comply with the Company’s guidelines on corporate governance
At the annual general meeting and other shareholders’ meeting, the Executive Chairman ensures constructive
dialogue between Board, management and shareholders, and promotes high standards of corporate governance.
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 shareholders and to facilitate a two-way
flow of information between shareholders, the Executive Chairman and the Board.
51
ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
BOARD MEMBERSHIP
Principle 4: There should be a formal and transparent process for the appointment and re-appointment of
Directors to the Board.
The Company had established a NC to make recommendations to the Board on all board appointments. The NC
comprises of three members, all of whom including the NC Chairman are Independent Non-Executive Directors:
Chairman
Mr. Douglas Owen Chester
Mr. Chong Teck Sin
Member
Mr. Wong Fook Choy Sunny Member
The formal terms of reference of the NC are to:
•
•
•
•
•
•
•
•
nominate Directors (including Independent Directors) taking into consideration their competencies, contribution,
performance and ability to commit sufficient time and attention to the affairs of the Group taking into account
the Directors’ respective commitments outside the Group;
review and recommend to the Board the composition of the Audit Committee, Remuneration Committee and
Risks and Conflicts Committee;
re-nominate Directors for re-election in accordance with the Constitution at each annual general meeting and
having regard to the Director’s contribution and performance;
determine annually whether or not a Director of the Company is independent;
decide whether or not a Director is able to and has been adequately carrying out their duties as a Director;
assess the performance of the Board as a whole and contribution of each Director to the effectiveness of
the Board;
review and recommend succession plans for Directors, in particular, the Chairman and the CEO; and
review and recommend training and professional development programmes 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 Articles 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. James Finbarr Fitzgerald
2. Patrick John Tallon
3. Kevin James Deery
4. Chong Teck Sin
5. Wong Fook Choy Sunny
6. Douglas Owen Chester
52
ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
BOARD MEMBERSHIP (Continued)
Principle 4 (Continued)
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,
Singapore Pte. Ltd.
The Company does not have a practice of appointing alternate Directors.
The dates of Director’s initial appointment, last re-election and their directorships are set out below:
NAME OF DIRECTOR
DATE
OF INITIAL
APPOINTMENT
DATE
OF LAST
RE-ELECTION
PRESENT
DIRECTORSHIPS IN
LISTED COMPANIES
PAST
DIRECTORSHIPS IN
LISTED COMPANIES*
James Finbarr Fitzgerald
27 Mar 2012
27 Oct 2016
Patrick John Tallon
27 Mar 2012
27 Oct 2016
Kevin James Deery
27 Mar 2012
27 Oct 2016
-
-
-
-
-
-
AVIC International
Maritime Holdings
Limited
Changan Minsheng
APLL Logistics
Co., Ltd(1)
InnoTeck Limited
Accordia Golf Trust
Management Pte Ltd.
Mencast Holdings Ltd
KTL Global Ltd
Excelpoint Technology
Ltd
InnoTeck Limited
Kim Heng Offshore
& Marine Holdings
Limited
Blackgold International
Holdings Limited(2)
China Medical
(International)
Group Limited
Stamford Land
Corporation Limited
Chong Teck Sin
27 Mar 2012
27 Oct 2016
Wong Fook Choy Sunny
27 Mar 2012
27 Oct 2016
Douglas Owen Chester
2 Nov 2012
27 Oct 2016
* Within the past three years
Notes:
(1) Listed on Hong Kong Stock Exchange
(2) Listed on Australian Stock Exchange
53
ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
BOARD MEMBERSHIP (Continued)
Principle 4 (Continued)
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 their 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.
In addition, the NC also determines annually whether a Director with multiple board representations is able to and has
been adequately carrying out their duties as a Director of the Company. The NC takes into account the results of the
assessment of the effectiveness of the individual Director and the respective Directors’ actual conduct on the Board.
The NC is satisfied that for FY2017 sufficient time and attention have been devoted by the Directors to the affairs of
the Company and the Group. As such, there is presently no need to implement internal guidelines to address their
competing time commitments notwithstanding that some of the Directors have multiple board representations.
The NC will, however, 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.
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 is 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 performance of individual Directors is assessed based on factors which include their attendance, participation
at Board and Board committee meetings and contributions to the Board in long range planning and the business
strategies as well as their industry and business knowledge.
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 FY2017 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 FY2017.
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
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 at least a week prior to each meeting, so that all
Directors may better understand the issues beforehand, allowing more time at meetings for discussion and deliberations.
Directors are provided with a copy of documents containing wide range of relevant information, including, quarterly and
yearly financial results, progress reports of the Group’s operations, corporate developments, business developments,
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.
Management’s proposals to the Board for approval include background and explanatory information such as, resources
needed, risk analysis and mitigation strategies, financial impact, regulatory implications, expected outcomes, conclusions
and recommendations. Employees who can provide additional insight into matters to be discussed will be present at
the relevant time during the Board and Board committee meetings. In order to keep Directors abreast of the Group’s
operations, the Directors are also updated on initiatives and developments on the Group’s business as soon as
practicable and/or possible and on an on-going basis.
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 ensures that the requirements of the Companies Act (Chapter 50), Listing Manual and other governance
matters applicable to the Company are complied with. The Company Secretaries work together with the Company to
ensure that the Company complies with all relevant rules and regulations. The appointment and removal of the Company
Secretaries are subject to the approval of the Board.
The Board in fulfilling its responsibilities can, as a collective body or individually as Board members, when deemed fit,
direct the Company and at the Company’s expense, 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 Chairman
Mr. Chong Teck Sin
Mr. Douglas Owen Chester
Member
Member
The formal terms of reference of the RC, are to:
•
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
• perform such other acts as may be required by the SGX-ST and the Code from time to time.
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
REMUNERATION MATTERS (Continued)
Principle 7 (Continued)
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, incentive schemes and
benefits-in-kind.
The RC also oversees the administration of the Civmec Employee Share Option Scheme (“Civmec ESOS”) and
Civmec Performance Share Plan (the “Civmec PSP”) upon the terms of reference as defined in the Civmec ESOS
and Civmec PSP. 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.
During the financial year, the fixed remuneration of executives was benchmarked against peers based on the industry
salary surveys sourced from AON Hewitt.
Th Reward Practice was also engaged to provide advice on the structure of longer term incentive plans and the
comparison of the Company’s plan to market trends.
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. The Executive Directors owe a fiduciary duty to the Company. The Company should be able to avail
itself to remedies against the Executive Directors and key management personnel in the event of such exceptional
circumstances of breach of fiduciary duty.
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.
Executive Directors and key management personnel remuneration comprises a fixed and a variable component, the
latter of which is in the form of a 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.
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
REMUNERATION MATTERS (Continued)
Principle 8 (Continued)
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 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 remuneration packages of the Executive Directors and the key senior management personnel 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.
During FY 2017, no share option and performance rights have been granted to the Executive Directors and key
management personnel.
The remuneration of the Independent Directors is in the form of a fixed fee which is subject to shareholders’ approval
at the AGM. Each member of the RC abstains from voting on any resolution, participating in any deliberation of the RC,
and making any recommendation in respect of their remuneration.
The Independent Directors’ fees were derived using the fee structure as follows:
Independent Director who is the Chairman of
Audit Committee
Other Independent Director
ANNUAL FEES (S$)
80,000
70,000
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 2017. Instead, the Company discloses the bands of remuneration as follows:
REMUNERATION BAND AND
NAME OF DIRECTOR
SALARY
BONUS
DIRECTORS’
FEES
ALLOWANCES
AND OTHER
BENEFITS
TOTAL
84%
84%
84%
-
-
-
4%
4%
4%
-
-
-
-
-
-
100%
100%
100%
12%
12%
12%
-
-
-
100%
100%
100%
100%
100%
100%
S$600,000 to S$849,999
James Finbarr Fitzgerald
Patrick John Tallon
S$350,000 to S$599,999
Kevin James Deery
Below S$349,999
Chong Teck Sin
Douglas Owen Chester
Wong Fook Choy Sunny
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
REMUNERATION MATTERS (Continued)
Principle 9 (Continued)
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 2017 are set out below. For competitive reasons, the Company discloses only the
band of remuneration of each management personnel as follows:
REMUNERATION BAND
AND NAME OF KEY
EXECUTIVE
S$350,000 to S$599,999
DESIGNATION
SALARY
BONUS
ALLOWANCES
AND OTHER
BENEFITS
TOTAL
Justine Campbell
Chief Financial Officer
Terence Hemsworth
Commercial Manager WP180
Rodney John Bowes
Proposals Manager
Charles Sweeney
Damian Lee Kelliher
General Manager – Metals
and Minerals
General Manager – Support
Services
81%
83%
83%
67%
83%
5%
3%
3%
22%
3%
14%
14%
14%
11%
14%
100%
100%
100%
100%
100%
The annual aggregate remuneration paid to all the above mentioned Directors and key management personnel of the Group is
S$4,284,000 in FY2017.
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 FY2017, the Company does not have any employees who are immediate
family members of a Director or CEO during FY2017. 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 43, in the “Directors’ Statement” in the
“Financials” section of this Annual Report.
ACCOUNTABILITY AND AUDIT
Principle 10: The Board should present a balanced and understandable assessment of the Company’s performance,
position and prospects.
The Management has provided all members of the Board, on a quarterly basis, with management accounts, operation review,
sundry reports and any other information the Board may require together with such explanation and information as the Board
may require to enable the Board to make a balanced and accurate 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.
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
ACCOUNTABILITY AND AUDIT (Continued)
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 Member
Mr. Wong Fook Choy Sunny Member
Chairman
The RCC is guided by its Terms of Reference which highlights its primary responsibilities are to:
•
•
•
review and monitor the Group’s risk management framework and activities, including the Group’s levels of risk
tolerance and risk policies;
report to the Board regarding the 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;
recommend and adopt appropriate measures to control and mitigate the business risks of the Group, as and when
these may arise; and
• 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;
revised the Risk Mitigation Plan presented by Management to mitigate and monitor the risk exposure;
reviewed the Project Risk and Opportunity Reporting Improvements; and
reviewed the Policies adopted by the Company such as Bribery & Corruption Policy and Procedures and the
Code of Conduct.
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.
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
ACCOUNTABILITY AND AUDIT (Continued)
Principle 11 (Continued)
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:-
(i)
that the financial records have been properly maintained and the financial statements give a true and fair view of
the Company’s operations and finances; and
(ii) that the Company’s risk management and internal control systems are adequate and effective.
The Board notes that all internal control systems are designed to manage rather than eliminate risks and no system
of internal controls could provide absolute assurance against the occurrence of material errors, poor judgment in
decision-making, human error losses, fraud or other irregularities.
Principle 12: Establish an Audit Committee with written terms of reference which clearly set out its
authority and duties.
The Audit Committee comprises the following three (3) members, all of whom, including the AC Chairman, are Non-
Executive Independent Directors:
Mr. Chong Teck Sin
Mr. Douglas Owen Chester Member
Mr. Wong Fook Choy Sunny Member
Chairman
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 terms of reference with its primary responsibilities as follows:
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
•
•
•
•
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
ACCOUNTABILITY AND AUDIT (Continued)
Principle 11 (Continued)
•
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:
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
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;
review interested person transactions (if any) falling within the scope of Chapter 9 of the Listing Manual;
review the Groups’ hedging policies, procedures and activities (if any) and monitor the implementation of the
hedging procedure/policies, including reviewing the instruments, processes and practices in accordance with any
hedging polices approved by the Board;
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;
generally to undertake such other functions and duties as may be required by statute or the Listing Manual, and by
such amendments made thereto from time to time;
review the effectiveness and adequacy of the administrative, operating, internal accounting and financial
control procedures;
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;
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
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.
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
ACCOUNTABILITY AND AUDIT (Continued)
Principle 12 (Continued)
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:
•
•
•
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;
•
reviewed interested person transactions of the Company;
• met with the Company’s external auditors and internal auditors without the presence of the management;
•
•
reviewed the external auditors’ independence and objectivity; and
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, is 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 FY2017 is
S$103,000 which comprises audit fee of S$75,000 and S$28,000 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 AC is kept abreast by the external auditors of changes to accounting standards, SGX-ST Listing Rule and other
regulations which could have an impact on the Group’s business and financial statements.
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 has ensured that
arrangements are in place for independent investigations of such matters and for appropriate follow up actions.
All whistle-blowing reports will be addressed to the AC Chairman, either directly or through STOPline, the whistle
blowing service provider. 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 FY2017.
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
ACCOUNTABILITY AND AUDIT (Continued)
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, which 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.
Staffed by suitably qualified and experienced executives, the Internal Auditors have unrestricted direct access to the
AC and unfettered access to all the Company’s documents, properties and personnel. 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 and conducting regular in-depth audits of high
risk areas.
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 reviews the adequacy of the function of the internal audit annually and based on this review believes that the
Internal Auditors have adequate resources to perform their function effectively and objectively.
The AC is satisfied with the effectiveness of the existing internal control systems put in place by the Management to
meet the needs of the Group in its current business environment.
SHAREHOLDERS RIGHTS AND RESPONSIBILITIES
Principle 14: Companies should treat all shareholders fairly and equitably, and should recognise, protect
and facilitate the exercise of shareholders’ rights, and continually review and update such governance
arrangements.
Principle 15: Companies should actively engage their shareholders and put in place an investor relations
policy to promote regular, effective and fair communication with shareholders.
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
SHAREHOLDERS RIGHTS AND RESPONSIBILITIES (Continued)
Principle 16: Companies should encourage greater shareholder participation at general meetings of
shareholders, and allow shareholders the opportunity to communicate their views on various matters
affecting the company.
The Company recognises the importance of regular, timely and effective communication with the shareholders.
The Company does not practise selective disclosure. In line with continuous 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.
The Company ensures that shareholders have the opportunity to participate effectively and vote at shareholders’
meetings. In this regard, 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 on
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.au. Shareholders are invited and given the
opportunity to voice their views, put forth any questions and seek clarification on questions they may have regarding
the Company. The Directors, Management and the external auditors are normally available at the AGM to answer
shareholders’ queries. Shareholders are also informed of the rules and voting procedures governing such meetings.
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 in and vote at all the general
meetings. 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 measure 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 as the
authentication of shareholder indemnity information and other related security issues still remain a concern.
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 with institutional investors to update its business
operations and to solicit feedback as well as hearing its investors’ views and addresses their concern, if any, and
where appropriate. All investors and analyst briefings presentation materials are uploaded onto SGXNET for all
investors’ information.
The Company has in place an investor relation policy which sets out the principles and practices that the Company
applies in order to provide shareholders and prospective investors with information necessary to make well informed
investment decision and to ensure the level playing field.
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ANNUAL REPORT 2017 REPORT ON
CORPORATE GOVERNANCE
SHAREHOLDERS RIGHTS AND RESPONSIBILITIES (Continued)
Principle 16 (Continued)
In additional, the Group has engaged WeR1 Consultants as its media and investor relations team that
communicates with its shareholders and analysts regularly and attends to their queries. The Investor Relation team
helps the Company promote relations with, and acts as liaison for, institutional investors and public shareholders.
The Group’s website also includes a tab labelled “Investor Relations” which provides investors with all the
information they may require.
As at the date of this Report, the Company does not have a formal dividend policy in place as the Board intends
to conserve cash for its operations. 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 pay-outs 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 2017, 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 FY2017.
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 material interested person transactions for FY2017.
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.
65
ANNUAL REPORT 2017 PRINCIPAL OFFICE AND CONTACT
DETAILS
16 Nautical Drive,
Henderson WA 6166
Australia
Tel: +61 8 9437 6288
Fax: +61 8 9437 6388
SHARE REGISTRAR AND SHARE
TRANSFER AGENT
Tricor Barbinder Share Registration Services
(a division of Tricor Singapore Pte Ltd)
80 Robinson Road, #02-00,
Singapore 068898
AUDITORS
Moore Stephens LLP
10 Anson Road, #29-15 International Plaza
Singapore 079903
Partner in Charge: 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
CORPORATE REGISTRY
BOARD OF DIRECTORS
Mr. James Finbarr Fitzgerald (Executive Chairman)
Mr. Patrick John Tallon (Chief Executive Officer)
Mr. Kevin James Deery (Chief Operating Officer)
Mr. Chong Teck Sin (Lead Independent Director)
Mr. Wong Fook Choy Sunny (Independent Director)
Mr. Douglas Owen Chester (Independent Director)
AUDIT COMMITTEE
Mr. Chong Teck Sin (Chairman)
Mr. Douglas Owen Chester
Mr. Wong Fook Choy Sunny
REMUNERATION COMMITTEE
Mr. Wong Fook Choy Sunny (Chairman)
Mr. Douglas Owen Chester
Mr. Chong Teck Sin
NOMINATING COMMITTEE
Mr. Douglas Owen Chester (Chairman)
Mr. Wong Fook Choy Sunny
Mr. Chong Teck Sin
RISKS & CONFLICTS COMMITTEE
Mr. Chong Teck Sin (Chairman)
Mr. Douglas Owen Chester
Mr. Wong Fook Choy Sunny
COMPANY SECRETARIES
Mr. Tan Wee Sin
Ms. Ang Siew Koon
REGISTERED OFFICE
80 Robinson Road, #02-00,
Singapore 068898
Tel: (65) 6236 333
Fax: (65) 6236 4399
66
ANNUAL REPORT 2017 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CIVMEC LIMITED
REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS
OPINION
We have audited the financial statements of Civmec Limited (the “Company”) and its subsidiaries (the “Group”), which
comprise the consolidated statement of financial position of the Group and the statement of financial position of the
Company as at 30 June 2017, 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 notes to the financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying 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 Companies Act, Chapter
50 (the “Act”) and Financial Reporting Standards in Singapore (“FRSs”) so as to give a true and fair view of the
consolidated financial position of the Group and the financial position of the Company as at 30 June 2017 and of the
consolidated financial performance, consolidated changes in equity and consolidated cash flows of the Group for the
year ended on that date.
BASIS FOR OPINION
We conducted our audit in accordance with Singapore Standards on Auditing (“SSAs”). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section
of our report. We are independent of the Group in accordance with the Accounting and Corporate Regulatory Authority
(“ACRA”) Code of Professional Conduct and Ethics for Public Accountants and Accounting Entities (“ACRA Code”)
together with the ethical requirements that are relevant to our audit of the financial statements in Singapore, and we
have fulfilled our other ethical responsibilities in accordance with these requirements and the ACRA Code. We believe
that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period. These matters were addressed in the context of our audit of the financials as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Revenue recognition on construction contracts
We refer to Note 3(a)(ii) under “Critical Accounting Judgements and Key Sources of Estimation Uncertainty” and Note
4 to the consolidated financial statements.
The Group’s revenue arising from construction contracts amounted to S$346.0 million for the financial year ended 30
June 2017. Revenue is recognised by reference to the stage of completion of the contract activity at the balance sheet
date. We have focused on this area because of the significant judgment involved in estimating the contract revenue,
contracts costs, and the percentage of completion of each project.
Our response:
We performed procedures to understand, evaluate and validate relevant key controls put in place by the management
over the revenue and costs recognition on construction contracts.
We assessed management’s assumptions in determining the forecast contract revenue, percentage of completion of
the projects and the total budgeted cost estimated for the project.
We have challenged the appropriateness of the variations and claims included in the computation of the construction
revenue. In particular, we focused on whether there were subsequent approval of these variations and claims or where
it is probable that these variations and claims will be thereafter approved.
We evaluated the appropriateness of inputs, amongst others, materials, subcontractor and labour costs used by
management in their estimation of the total cost to complete and obtained supporting documentation on the major inputs.
67
ANNUAL REPORT 2017 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CIVMEC LIMITED
KEY AUDIT MATTERS (CONTINUED)
Our response: (Continued)
We also examined key project documentation and discussed the progress of the significant projects with the Group’s
key project personnel and management for potential disputes, variation order claims or significant events that could
impact the estimated contract revenue, estimated contractual costs and stage of completion. We then assessed the
arithmetic accuracy of the revenue and profit recognised based on the percentage of completion computation for
individually significant projects.
We have also checked that appropriateness of the carrying value of the work-in-progress by reviewing management’s
assessment of foreseeable losses on projects by focusing on projects with low or negative margins.
Our findings:
In determining the percentage of completion of projects, the Group has a structured process and takes into account
variations and claims depending on the status of the variation and nature of the variation or claim. Management
conducts regular meetings to review the status of the projects including the variations and claims and any potential
foreseeable losses.
We found the Group’s estimation process to be robust. Management’s judgement used in the estimation of the
percentage of completion and decision on whether to include emerging profits from variations and claims or to
recognise foreseeable losses is balanced, reflective of their internal project discussions and external discussions with
customers and appropriate.
Recoverability of trade and other receivables
We refer to Note 3(b)(i) under “Critical Accounting Judgements and Key Sources of Estimation Uncertainty” and Note
10 of the consolidated financial statements.
The carrying amount of trade and other receivables of the Group was S$157.4 million for the financial year ended 30
June 2017. We focused on this area because of its significance and the degree of judgement required in determining
the carrying amount of trade and other receivables as at the reporting date.
The Group assesses at each financial year end where there is objective evidence that the receivables are impaired.
When there is objective evidence of impairment, the amount and timing of future cash flows are estimated based on
historical loss experience for assets with similar credit risk characteristics.
Our response:
We obtained an understanding of the Group’s credit policy and evaluated the processes for identifying impairment
indicators. We selected sample transaction to test the accuracy of the ageing computation. We have also reviewed
significant outstanding trade and other receivables for any known significant difficulties of debtors.
Our findings:
Based on our audit procedures, we found management’s assessment of the recoverability of trade and other
receivables to be reasonable and the disclosures to be appropriate.
OTHER INFORMATION
Management is responsible for the other information. The other information comprises the Annual Report, but does not
include the financial statements and our auditor’s report thereon.
68
ANNUAL REPORT 2017 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CIVMEC LIMITED
OTHER INFORMATION (CONTINUED)
Our opinion on the financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
RESPONSIBILITIES OF MANAGEMENT AND DIRECTORS FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation of financial statements that give a true and fair view in accordance with
the provisions of the Act and FRSs, 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.
In preparing the financial statements, management is responsible for assessing the Group’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis
of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic
alternative but to do so.
The directors’ responsibilities include overseeing the Group’s financial reporting process.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with
SSAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SSAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error,
design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit 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
Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and
related disclosures made by management.
69
ANNUAL REPORT 2017 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF CIVMEC LIMITED
Auditor’s Responsibilities for the Audit of the Financial Statements (Continued)
•
Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial
statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the
Group to cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and
whether the financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the consolidated financial statements. We are responsible for the
direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in
the audit of the financial statements of the current year and are therefore the key audit matters. We describe these
matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
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
subsidiaries incorporated in Singapore of which we are the auditor have been properly kept in accordance with the
provisions of the Act.
The engagement partner on the audit resulting in this independent auditor’s report is Lao Mei Leng.
Moore Stephens LLP
Public Accountants and Chartered Accountants
Singapore
31 August 2017
70
ANNUAL REPORT 2017 CONSOLIDATED INCOME STATEMENT
For the year ended 30 June 2017
Revenue
Cost of sales
Gross profit
Other income
Share in (loss)/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
4
4
16
7
5
8
GROUP
2017
S$’000
345,955
(308,896)
2016
S$’000
396,752
(353,257)
37,059
43,495
2,215
(260)
(26,774)
(2,575)
(119)
9,546
(1,326)
1,181
3,890
(23,439)
(1,945)
(133)
23,049
(5,757)
8,220
17,292
8,427
(207)
8,220
17,441
(149)
17,292
EARNINGS PER SHARE ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY (CENTS PER SHARE):
• Basic
• Diluted
9
9
1.68
1.68
3.45
3.45
71
ANNUAL REPORT 2017 CONSOLIDATED STATEMENT
OF COMPREHENSIVE INCOME
For the year ended 30 June 2017
Profit for the year
Other comprehensive income:
Item that may be reclassified subsequently to profit or loss
Exchange differences on re-translation from functional
currency to presentation currency
GROUP
Note
2017
S$’000
8,220
2016
S$’000
17,292
9,308
(4,854)
Total comprehensive income for the year
17,528
12,438
Total comprehensive income attributable to:
Owners of the Company
Non-controlling interest
17,735
(207)
17,528
12,587
(149)
12,438
72
ANNUAL REPORT 2017 STATEMENTS OF FINANCIAL POSITION
As at 30 June 2017
GROUP
COMPANY
2017
S$’000
2016
S$’000
2017
S$’000
2016
S$’000
Note
12
10
11
8
15
16
10
13
14
8
18
19
20
19
20
24,044
157,273
1,262
4,470
39,788
80,007
882
5,475
187,049
126,152
25
42
29,233
27,707
4
4,498
33,760
12
5,475
33,236
-
129
162
-
5,641
6,648
136,063
119,513
11
1,162
137,527
324,576
10
511
132,323
258,475
8,023
7,590
-
-
-
-
-
-
-
-
12
8,035
41,795
36
7,626
40,862
79,643
5,275
5,115
90,033
56,696
3,129
59,825
149,858
57,230
6,616
5,940
69,786
25,498
2,494
27,992
97,778
155
-
-
155
-
-
-
128
-
-
128
-
-
-
155
128
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Other current assets
Current tax recoverable
Non-current assets
Investment in subsidiaries
Investment in joint venture
Trade and other receivables
Property, plant and equipment
Intangible assets
Deferred tax assets
TOTAL ASSETS
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables
Borrowings
Provisions
Non-current liabilities
Borrowings
Provisions
TOTAL LIABILITIES
73
ANNUAL REPORT 2017 STATEMENTS OF FINANCIAL POSITION
As at 30 June 2017
Capital and Reserves
Share capital
Treasury shares
Other reserves
Retained earnings
Total equity attributable to the
Owners of the Company
Non-controlling interest
TOTAL EQUITY
Note
21
21
23
GROUP
COMPANY
2017
S$’000
2016
S$’000
2017
S$’000
2016
S$’000
37,864
37,864
37,864
(11)
(11)
(14,123)
(23,431)
151,345
175,075
146,425
160,847
(11)
(2,464)
6,251
41,640
37,864
(11)
(4,789)
7,670
40,734
(357)
(150)
-
-
174,718
160,697
41,640
40,734
TOTAL LIABILITIES AND EQUITY
324,576
258,475
41,795
40,862
74
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l
ANNUAL REPORT 2017
CONSOLIDATED STATEMENT
OF CASH FLOWS
For the year ended 30 June 2017
Cash Flows from Operating Activities
Profit before income tax
Adjustment for:
Depreciation of property, plant and equipment
Loss on disposal of property, plant and equipment
Share in loss/(profit) of a joint venture
Finance cost
Interest income
Foreign exchange differences
Bad debts written-off
GROUP
Note
2017
S$’000
2016
S$’000
9,546
23,049
13
5
16
7
4
5
10,742
119
260
2,575
(280)
(30)
-
8,952
128
(3,890)
1,945
(516)
10
3
Operating cash flow before working capital changes
22,932
29,681
Changes in working capital:
(Increase)/Decrease in trade and other receivables
Increase in other current assets
Increase/(Decrease) in trade and other payables
(Decrease)/Increase in provisions
Cash (used in)/generated from operations
Interest received
Finance cost paid
Income tax refund
Income taxes paid
Net cash (used in)/generated from operating activities
Cash Flows from Investing Activities
Proceeds from sale of property, plant and equipment
Purchase of property, plant and equipment
13
Investment in joint venture
Cash distribution from joint venture
Net cash used in investing activities
(69,378)
(323)
23,524
(658)
(23,903)
280
(2,474)
4,550
(5,211)
(26,758)
377
(20,642)
(3,631)
9,070
(14,826)
18,551
(730)
(11,613)
725
36,614
516
(1,937)
10,574
(10,841)
34,926
499
(34,316)
(9,893)
8,076
(35,634)
77
ANNUAL REPORT 2017 CONSOLIDATED STATEMENT
OF CASH FLOWS (continued)
For the year ended 30 June 2017
Cash Flows from Financing Activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net cash generated from financing activities
Note
21
Net (decrease)/increase in cash and cash equivalents
Effects of currency translation on cash and cash
equivalents
Cash and cash equivalents at the beginning of the
financial year
Cash and cash equivalents at the end of the financial year
12
GROUP
2017
S$’000
2016
S$’000
58,314
(30,847)
(3,507)
23,960
(17,624)
1,880
39,788
24,044
58,731
(51,161)
(3,507)
4,063
3,355
(1,210)
37,643
39,788
78
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
THESE NOTES FORM AN INTEGRAL PART OF AND SHOULD BE READ IN CONJUNCTION WITH
THE ACCOMPANYING FINANCIAL STATEMENTS.
1 GENERAL INFORMATION
Civmec Limited (the “Company”) was incorporated in the Republic of Singapore on 3 June 2010 under the Singapore
Companies Act, Chapter 50 (the “Act”) as an investment holding company for the purpose of acquiring the subsidiary
companies pursuant to the Restructuring Exercise. On the 29 March 2012 the company changed its name to Civmec
Limited. The Company was listed on the Singapore Exchange Securities Ltd (SGX-ST) 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, joint venture and joint operations are set out in Note 15, 16 and 17.
The financial statements for the financial year ended 30 June 2017 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
The accounting policies adopted are consistent with those of the previous financial year except that in the current
financial year, the Group has adopted all the new and revised standards which are effective for annual financial
periods beginning on or after 1 July 2016. The adoption of these standards did not have any effect on the financial
performance or position of the Group and the Company.
(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 2017 onwards.
79
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(B) ADOPTION OF NEW/REVISED SINGAPORE FINANCIAL REPORTING STANDARDS
(CONTINUED)
(ii) New or Revised FRS issued but not yet effective (continued)
Amendments to FRS 7 Statement of Cash Flows
The amendments require new disclosure about changes in liabilities arising from financing activities in respect of:
(a) changes from financing cash flows;
(b) changes arising from obtaining or losing control of subsidiaries or other businesses;
(c) the effect of changes in foreign exchange rates;
(d) changes in fair values; and
(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.
Amendments to FRS 12 Income taxes – Recognition of deferred tax assets for unrealised losses
The amendments clarify the application of FRS 12 to unrealised losses on debt investments, and the assessment of
future taxable profits against which deferred tax assets can be recognised.
1. Deductible temporary differences will result from unrealised losses on debt investments measured at fair value
in financial statements, but measured at cost for tax purposes. This is regardless of how the entity intends to
realise the investment.
2. Estimates of future taxable profits used to assess recoverability of deferred tax assets resulting from deductible
temporary differences:
(a)
includes profits on the recovery of assets for more than their carrying amount if such recovery is probable;
(b)
includes only income types against which those temporary differences qualify to be deducted under tax
legislation; and
(c) excludes tax deductions resulting from the reversal of those temporary differences.
Amendments to FRS 12 is effective for annual periods beginning on or after 1 January 2017. Early application is
permitted.
The Group is currently evaluating the impact of the changes and assessing whether the adoption of FRS 12 will have
an impact on the Group.
FRS 109 Financial Instruments
FRS 109 prescribes the accounting requirements for financial instruments and replaces the existing guidance in
FRS 39 Financial Instruments: Recognition and Measurement. FRS 109 prescribes a new classification and
measurement framework for financial instruments, requires financial assets to be impaired based on a new expected
credit loss model, changes the hedge accounting requirements, and carries forward the recognition and de-recognition
requirements for financial instruments from FRS 39. These amendments are effective for annual periods beginning
on or after 1 January 2018.
The Group is currently evaluating the impact of the changes and assessing whether the adoption of FRS 109 will
have an impact on the Group.
80
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(B) ADOPTION OF NEW/REVISED SINGAPORE FINANCIAL REPORTING STANDARDS
(CONTINUED)
(ii) New or Revised FRS issued but not yet effective (Continued)
FRS 115 Revenue from Contracts with Customers
FRS 115 establishes a revised framework for revenue recognition based on the following five-step approach:
-
-
Identification of the contracts ;
Identification of the performance obligations in the contract
- Determination of the transaction price
- Allocation of the transaction price to the performance obligations
- Recognition of revenue when (or as) an entity satisfies a performance obligation
FRS 115 will replace the existing revenue recognition guidance including FRS 18 Revenue, FRS 11 Construction
Contracts and INT FRS 113 Customer Loyalty Programs. These amendments are effective for annual periods
beginning on or after 1 January 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.
FRS 116 Lease
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
(i) 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:
-
the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other vote
holders;
81
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(C) BASIS OF CONSOLIDATION (CONTINUED)
(i) Subsidiaries (Continued)
-
-
-
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.
82
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(C) BASIS OF CONSOLIDATION (CONTINUED)
(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.
Joint Operations
The Group’s joint operations are joint arrangements whereby the parties (the joint operators) that have joint control of
the arrangement have rights to the assets, and obligations to the liabilities, relating to the arrangement.
The Group recognises, in relation to its interest in the joint operation:
-
-
-
-
-
its assets, including its share of any assets held jointly;
its liabilities, including its share of any liabilities incurred jointly;
its revenue from the sale of its share of the output arising from the joint operation;
its share of the revenue from the sale of the output by the joint operation; and
its expenses, including its share of any expenses incurred jointly.
When the Group sells or contribute assets to a joint operation, the Group recognises gains or losses on the sale or
contribution of assets that is attributable to the interest of the other joint operations. The Group recognises the full
amount of any loss when the sale or contribution of assets provides evidence of a reduction in the net realisable value,
or an impairment loss, of those assets.
When the Group purchases assets from a joint operation, it does not recognise it share of the gains and losses until
it resells the assets to an independent party, However, a loss on the transaction is recognised immediately if the loss
provides evidence of a reduction in the net realisable value of the assets to be purchased or and impairment loss.
The accounting policies of the assets, liabilities, revenues and expenses relating to the Group’s interest in a joint
operation have been changed where necessary to ensure consistency with the accounting policies adopted by
the Group.
INVESTMENT IN SUBSIDIARY COMPANIES
(D)
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.
83
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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(h) 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”).
INCOME TAX
(F)
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:
(i)
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
84
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
INCOME TAX (CONTINUED)
(F)
(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.
(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.
85
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(G) FOREIGN CURRENCY TRANSLATION (CONTINUED)
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.
(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:
(i)
total contract revenue can be measured reliably;
(ii) 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.
86
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(H) CONSTRUCTION CONTRACT AND WORK IN PROGRESS (CONTINUED)
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
(i) 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.
(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.
87
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(I) FINANCIAL ASSETS (CONTINUED)
(iv) Impairment (Continued)
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 capitalization.
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.
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.
88
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(K) PROPERTY, PLANT AND EQUIPMENT (CONTINUED)
Depreciation (Continued)
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
3%
5 – 15%
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.
IMPAIRMENT OF NON-FINANCIAL ASSETS
(L)
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.
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.
89
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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.
90
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(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.
91
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(Q) EMPLOYEE BENEFITS (CONTINUED)
Share-based payments (Continued)
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.
(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:
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.
i.
ii.
iii.
92
ANNUAL REPORT 2017
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
2 SIGNIFICANT ACCOUNTING POLICIES (Continued)
(T) RELATED PARTIES (CONTINUED)
b. An entity is related to a reporting entity if any of the following conditions applies:
i.
ii.
iii.
iv.
v.
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.
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
(i) 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 2017 was S$136,063,000
(2016: S$119,513,000) (Note 13). A 10% difference in the expected useful lives of these assets from management’s
estimate would result in an approximately S$1,074,200 (2016: S$895,200) variance in the Group’s profit before tax.
(ii) 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.
93
ANNUAL REPORT 2017
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
3 CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF
ESTIMATION UNCERTAINTY (Continued)
(A) CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS (Continued)
(ii) Determination of percentage of completion on construction contracts (Continued)
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.
(iii) 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 2017 were current
tax recoverable of S$4,470,000 (2016: S$5,475,000) and current tax recoverable of S$4,498,000 (2016: S$5,475,000)
respectively. The carrying amounts of the Group’s and Company’s deferred tax assets and liabilities as at 30 June
2017 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:
(i) Impairment of receivables
The Group assesses at each reporting date whether there is any objective evidence that a financial asset is impaired.
To determine whether there is objective evidence of impairment, the Group considers factors such as the probability of
insolvency or significant financial difficulties of the debtor and default or significant delay in the payment. The Directors
exercise their judgement in making allowances for receivables.
A specific allowance for impairment of receivables is made if the receivables are not collectible. The factors considered
in making allowances are payment history, past due status and trading terms.
No impairment loss on trade receivables were recorded for the financial year ended 30 June 2017 (2016: S$3,000).
The carrying value of the Group’s and the Company’s trade and other receivable as at 30 June 2017 is S$157,435,000
(2016: S$86,655,000) and S$29,233,000 (2016: $27,707,000).
(ii) 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 2017
and 2016.
The carrying amount of property, plant and equipment at 30 June 2017 is S$136,063,000 (2016: S$119,513,000).
94
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
4 REVENUE AND OTHER INCOME
Revenue
Construction contract revenue
Revenue from the rendering of services
Revenue from sales of goods
Other Income
Benefits from fringe benefits and payroll tax
Fuel tax rebate
Interest income:
- Bank balances
-
Late payment from clients
- Tax authorities
Rental from warehouse storage
Recovery of bad debts and costs
Miscellaneous income
GROUP
2017
S$’000
338,751
6,419
785
345,955
1,298
386
198
-
82
65
144
42
2016
S$’000
392,824
3,543
385
396,752
-
584
392
71
53
-
-
81
2,215
1,181
The benefits from fringe benefits and payroll tax pertain to reimbursement from Australian Taxation Office for the
Living-away-from-home allowance relating to prior years.
95
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
5 PROFIT BEFORE INCOME TAX
The following items have been included in arriving at profit before income tax:
Included in cost of sales:
Direct materials
Employee benefits
Subcontract works
Workshop and other overheads
Depreciation of property, plant and equipment
13
13
6
Included in administrative expenses:
Audit fees:
• Auditors of the Company
• Other auditors
Non-audit fees:
• Auditors of the Company
• Other auditors
Business development
Communications
Depreciation of property, plant and equipment
Directors’ fees
Employee benefits
Occupancy expenses
Office costs
Other administrative expenses
Other professional fees
Tax fees
Net foreign exchange loss
Included in other expenses:
Bad debts written-off
Loss on disposal of property, plant and equipment
96
GROUP
2017
S$’000
2016
S$’000
Note
52,449
6
157,046
68,806
172,159
56,935
47,015
8,342
90
73
28
92
840
1,485
610
222
44,206
44,975
10,220
75
79
28
72
1,196
1,615
522
220
18,797
14,894
719
464
736
1,488
730
29
-
119
585
633
629
1,960
1,181
117
3
128
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
6 EMPLOYEE BENEFITS EXPENSES
Wages and salaries
Contributions to defined contribution plans
Other employee benefits
7 FINANCE COSTS
Bank bills and bank guarantees
Finance leases
Premium funding
Other finance costs
GROUP
2017
S$’000
2016
S$’000
167,079
175,569
7,100
1,664
9,199
2,285
175,843
187,053
GROUP
2017
S$’000
2016
S$’000
1,852
613
43
67
947
855
61
82
2,575
1,945
97
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
8
INCOME TAX EXPENSE
Current income tax
Deferred income tax
Under/(Over) provision in prior years
• Current income tax
• Deferred income tax
GROUP
2017
S$’000
2,103
784
2,887
(139)
(1,422)
(1,561)
1,326
2016
S$’000
5,555
1,641
7,196
575
(2,014)
(1,439)
5,757
The Group’s tax on profit before income tax differs from the amount that would arise using the Australian standard
rate of income tax as follows:
GROUP
Profit before income tax
Income tax at 30% (2016: 30%)
Add/(Deduct) tax effect of:
Under/(Over) provision of income tax in respect of prior years*
Over provision of deferred tax expense
Unrecognised deferred tax asset on foreign operation
Non-allowable items
Non-taxable items
Weighted average effective tax rates are as follows:
2017
S$’000
9,546
2,864
(139)
(1,422)
60
-
(37)
1,326
14.0%
2016
S$’000
23,049
6,915
575
(2,014)
246
35
-
5,757
25.0%
* 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.
98
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
8 INCOME TAX EXPENSE (Continued)
As at 30 June 2017, the Group has tax losses of approximately S$9,648,000 (2016: S$9,202,000) 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$2,801,000 (2016:
S$2,663,000) are not recognised as there is no reasonable certainty that future taxable profits will be available to
utilise the tax losses.
The tax rate used for the 2017 and 2016 reconciliations above is the corporate tax rate of 30% payable by
corporate entities in Australia on taxable profits under the tax law in that jurisdiction. The Group’s operations are
located in Australia.
The following shows the details of the deferred tax assets:
Group deferred tax assets:
Property, plant and equipment
Fringe benefits tax instalments
Receivables
Trade and other payables
Other current assets
Provisions
Carried forward tax losses
Unrealised foreign
exchange losses
Others
Balance at 30 June 2016
OPENING
BALANCE
S$’000
CHARGED TO
PROFIT OR
LOSS
S$’000
CURRENCY TRANS-
LATION
S$’000
CLOSING
S$’000
(4,247)
(29)
(1,204)
2,022
2
2,389
2
1,163
93
191
959
28
1,192
(1,058)
(2)
254
40
(1,126)
86
373
126
1
29
(56)
-
(77)
-
(27)
(49)
(53)
(3,162)
-
17
908
-
2,566
42
10
130
511
99
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
8 INCOME TAX EXPENSE (Continued)
OPENING
BALANCE
S$’000
CHARGED TO
PROFIT OR
LOSS
S$’000
CURRENCY
TRANSLATION
S$’000
CLOSING
S$’000
Group deferred tax assets:
Property, plant and equipment
Receivables
Trade and other payables
Provisions
Carried forward tax losses
Unrealised foreign
exchange losses
Others
Balance at 30 June 2017
Company deferred tax
assets:
Loan receivables
Trade and other payables
Balance at 30 June 2016
Cast at bank
Loan receivables
Trade and other payables
Balance at 30 June 2017
(3,162)
17
908
2,566
42
10
130
511
(1,157)
29
(1,128)
-
16
20
36
1,021
(24)
(18)
(41)
(306)
25
(11)
(32)
638
1,150
(9)
1,141
4
(16)
(14)
(26)
-
-
10
25
1
1
13
23
-
23
-
-
2
2
(2,165)
1
877
2,285
68
(1)
99
1,162
16
20
36
4
-
8
12
Aggregate amount of temporary differences associated with investment in subsidiaries and goodwill amounted to
S$6,103,404 (2016: S$3,868,779) and S$71,142,107 (2016: S$67,300,947) respectively, for which deferred tax assets
have not been recognised.
Current tax recoverable
Current tax recoverable mainly arose from Group’s overprovision of income taxes in respect of the current year and is
expected to be recovered in the 2017/18 financial year.
100
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
9 EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the Group’s net profit attributable to ordinary equity holders for the
financial year by the weighted average number of ordinary shares issued.
GROUP
2017
2016
Profit attributable to the owners of the Company (S$’000)
8,427
17,441
Share capital
501,000,000
501,000,000
Weighted average number of ordinary shares issued
• Basic
• Diluted
Earnings per ordinary share (S$ cents)
• Basic
• Diluted
500,985,000
500,985,000
500,985,000
500,985,000
1.68
1.68
3.45
3.45
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 2017 and 2016, the diluted earnings per share is the same as the basic earnings per share as it
does not include the effect of 4,500,000 (2016: 5,000,000) unissued ordinary shares granted under the CESOS
(Note 22(b)). The effect of the inclusion is anti-dilutive.
101
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
10 TRADE AND OTHER RECEIVABLES
GROUP
COMPANY
2017
S$’000
2016
S$’000
2017
S$’000
2016
S$’000
Note
59,567
5,460
65,027
34,036
881
34,917
(a)
91,315
42,345
-
-
-
-
-
-
-
-
-
-
931
157,273
-
29,233
27,707
2,485
260
80,007
-
-
-
-
29,233
27,707
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
Total trade and other receivables
162
157,435
6,648
86,655
-
-
29,233
27,707
(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
388,692
33,185
421,877
387,023
43,790
430,813
(336,604)
(392,824)
1,739
87,012
(361)
37,628
18
91,315
(4,303)
87,012
42,345
(4,717)
37,628
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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.
102
ANNUAL REPORT 2017
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
11 OTHER CURRENT ASSETS
Prepayments
Consumables inventory
GROUP
COMPANY
2017
S$’000
824
438
1,262
2016
S$’000
2017
S$’000
2016
S$’000
579
303
882
4
-
4
12
-
12
12 CASH AND CASH EQUIVALENTS
Cash at bank and in hand
GROUP
COMPANY
2017
S$’000
24,044
2016
S$’000
39,788
2017
S$’000
25
2016
S$’000
42
Cash at banks earns interest at floating rates ranging from 0.01% to 1.5% (2016: 0.01% to 1.75%) per annum.
A floating charge over cash and cash equivalents has been provided for certain debt.
103
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
13 PROPERTY, PLANT AND EQUIPMENT
LAND
S$’000
BUILD-
INGS
S$’000
PLANT
AND
EQUIP-
MENT
S$’000
SMALL
TOOLS
S$’000
MOTOR
VEHICLES
S$’000
OFFICE
EQUIP-
MENT
S$’000
IT
EQUIP-
MENT
S$’000
ASSETS
UNDER
CON-
STRUC-
TION
S$’000
TOTAL
S$’000
2017
Cost
At 01 July 2016
Additions
Transfer
Disposals
Currency translation
At 30 June 2017
16,277
-
-
-
930
17,207
55,605
-
-
-
3,173
58,778
46,576 12,602
1,438
-
(567)
737
52,390 14,210
1,702
2,061
(670)
2,721
6,900
62
-
(363)
387
6,986
1,374
-
-
(1)
79
1,452
2,044
-
-
-
117
2,161
4,850
17,440
(2,061)
-
588
20,817
146,228
20,642
-
(1,601)
8,732
174,001
Accumulated depreciation
At 01 July 2016
Depreciation for
the year
Disposals
Currency translation
At 30 June 2017
-
-
-
-
-
(5,817)
(2,552)
(12,456)
(4,248)
(3,682)
(2,468)
(2,885)
(884)
(631)
(172)
(1,244)
(418)
-
(352)
(8,721)
433
(739)
(17,010)
426
(219)
(5,943)
245
(166)
(3,690)
1
(39)
(841)
-
(71)
(1,733)
-
-
-
-
-
(26,715)
(10,742)
1,105
(1,586)
(37,938)
Net carrying amount
At 30 June 2017
2016
Cost
At 01 July 2015
Additions
Transfer
Disposals
Currency translation
At 30 June 2016
17,207
50,057
35,380
8,267
3,296
611
428
20,817
136,063
5,475
11,062
-
-
(260)
16,277
46,174
7,055
3,914
-
(1,538)
55,605
7,318
43,374
5,052
4,728
1,192
934
(686)
(1,060)
(1,400)
(274)
46,576 12,602
6,092
1,187
-
(180)
(199)
6,900
1,312
127
-
(23)
(42)
1,374
2,384
217
-
(484)
(73)
2,044
6,188
4,888
(6,040)
-
(186)
4,850
118,317
34,316
-
(2,433)
(3,972)
146,228
Accumulated depreciation
At 01 July 2015
Depreciation for
the year
Disposals
Currency translation
At 30 June 2016
-
-
-
-
-
(4,090)
(1,877)
(9,757)
(3,800)
(2,419)
(1,790)
(2,298)
(783)
(462)
(206)
(1,274)
(496)
-
150
(5,817)
752
349
(12,456)
434
93
(3,682)
116
80
(2,885)
20
17
(631)
484
42
(1,244)
-
-
-
-
-
(20,300)
(8,952)
1,806
731
(26,715)
Net carrying amount
At 30 June 2016
16,277
49,788
34,120
8,920
4,015
743
800
4,850
119,513
104
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
13 PROPERTY, PLANT AND EQUIPMENT (Continued)
(a) As at the balance sheet date, the net book value of property, plant and equipment that were under finance leases
was S$20,901,000 (2016: S$24,744,000) (Note 19).
(b) The carrying amount of property, plant and equipment that are pledged for security are as follows:
PROPERTY,
PLANT AND EQUIPMENT
BORROWINGS
GROUP
Leased plant and equipment
Finance lease
Remaining property, plant and
equipment
Bank bills
Refer to Note 19 for further information on Borrowings.
14 INTANGIBLE ASSETS
Goodwill
2017
S$’000
20,901
115,162
2016
S$’000
24,744
94,769
136,063
119,513
GROUP
2017
S$’000
2016
S$’000
11
10
Goodwill arose from the excess of the consideration paid for a business acquired from a third party. Goodwill has been
allocated to the cash-generating unit, Metals and Minerals division.
Management is of the opinion that the recoverable amount will exceed the carrying amount on the basis that this cash
generating unit has been generating profit since acquisition and management forecasts the results of this subsidiary
to be in a net profit position for the financial year ended 30 June 2017. In arriving at this assessment, management
has determined the recoverable amount using a two (2016: two) year forecasting process based on the current order
book, projected orders and a consumer price index (“CPI”) factor of 1.9% (2016: 1.2%) per annum on direct costs and
overhead costs.
105
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
14 INTANGIBLE ASSETS (Continued)
Balance at the beginning of the year
Currency translation
Balance at the end of the year
15 INVESTMENT IN SUBSIDIARIES
At cost:
Balance at the beginning of the year
Currency translation
Balance at the end of the year
GROUP
2017
S$’000
2016
S$’000
10
1
11
10
-
10
GROUP
2017
S$’000
2016
S$’000
7,590
433
8,023
7,836
(246)
7,590
Details of the Company’s subsidiaries at 30 June 2017 are as follows:
NAME
OF ENTITY
PRINCIPAL
ACTIVITIES
COUNTRY OF
INCORPORATION
% OF EQUITY HELD
BY THE GROUP
2017
2016
Held by the Company
Civmec Construction &
Engineering Pty Ltd*
Civmec Construction &
Engineering Singapore Pte Ltd**
Engineering
and construction
services
Engineering
and construction
services
Australia
100
100
Singapore
100
100
Held by Civmec Construction & Engineering Singapore Pte Ltd
Civmec-Mala PNG**(a)
Engineering
and construction
services
Papua New Guinea
88
-
106
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
15 INVESTMENT IN SUBSIDIARIES (Continued)
Details of the Company’s subsidiaries at 30 June are as follows (Continued):
NAME
OF ENTITY
PRINCIPAL
ACTIVITIES
COUNTRY OF
INCORPORATION
% OF EQUITY HELD
BY THE GROUP
2017
2016
Held by Civmec Construction & Engineering Pty Ltd
Civmec Holdings Pty Ltd*
Multidiscipline Solutions Pty Ltd*
Civmec Pipe Products Pty Ltd*
Civmec Electrical and
Instrumentation Pty Ltd*
Civmec DLG Pty Ltd*(b)
Forgacs Marine and Defence
Pty Ltd*
Civmec Construction
& Engineering Africa Ltd*
Asset holding
company
Asset holding
company
Labour supply
Asset holding
company
Electrical
services
Engineering
and construction
services
Marine and
defence services
Asset holding
company
Australia
Australia
Australia
Australia
Australia
Australia
Mauritius
100
100
83.5
100
50
100
100
100
100
83.5
100
50
100
100
Held by Forgacs Marine and Defence Pty Ltd
Forgacs Valco Pty Ltd*(a)(b)
Valve services
Australia
50
-
Held by Civmec Construction & Engineering Africa Ltd
Civmec Construction
& Engineering Uganda Ltd*
Asset holding
company
Held by Civmec Construction & Engineering Uganda Ltd
Civtec Africa Ltd*(b)
Engineering
and construction
services
Uganda
100
100
Uganda
50
50
Audited by Moore Stephens (WA) Pty Ltd
*
** Audited by Moore Stephens LLP Singapore
(a) Newly incorporated during the current financial year
(b) Deemed to be a subsidiary as the Group controls the entity via substantive rights
107
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
16 INVESTMENT IN JOINT VENTURE
Details of the Group’s joint venture that is accounted for using the equity method at the end of the
reporting period are as follows:
NAME
OF ENTITY
PRINCIPAL
ACTIVITIES
COUNTRY OF
INCORPORATION
% OF EQUITY HELD
BY THE GROUP
2017
2016
Held by Civmec Construction & Engineering Pty Ltd
Sedgman Civmec Joint Venture
Engineering
and construction
services
Australia
50
50
The summarised financial information below represents amounts shown in the joint venture’s financial statements.
Summarised statement of financial position
2017
S$’000
2016
S$’000
Cash and cash equivalents
Trade receivables
Other assets
Total current assets
Trade and other payables - current
Net assets
Summarised statement of comprehensive income
Revenue
Operating expenses
Interest income
Administrative expenses
Profit before tax
Other comprehensive income
Total comprehensive income
108
72
1,530
4,295
5,897
5,640
257
2017
S$’000
20,002
(20,610)
95
(7)
(520)
-
(520)
8,295
21,560
1,362
31,217
19,935
11,282
2016
S$’000
126,723
(118,997)
81
(27)
7,780
-
7,780
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
16 INVESTMENT IN JOINT VENTURE (Continued)
Reconciliation of the above summarised financial information to the carrying amount of the
interest in the joint venture recognised in the consolidated financial statements:
Net assets of the joint venture
Proportion of the Group’s ownership interest in the joint venture
Carrying amount of the Group’s interest in the joint venture
2017
S$’000
2016
S$’000
257
50.0%
129
11,282
50.0%
5,641
17 JOINT OPERATIONS
The Group has interests in the following joint operations which are proportionately consolidated:
NAME OF JOINT
OPERATION
PRINCIPAL ACTIVITIES
PRINCIPAL PLACE OF
BUSINESS/COUNTRY OF
INCORPORATION
PROPORTION (%) OF
OWNERSHIP INTEREST
HELD BY THE GROUP
Black & Veatch Civmec JV
(“BCJV”)
Engineering and
Construction Services
Amec Foster Wheeler
Civmec JV (“ACJV”)
Engineering and
Construction Services
Australia
Australia
2017
2016
50
50
-
-
BCJV project is for the design and construction of the wastewater treatment plant upgrade and ACJV is for the
design, procurement and installation of process plant, administration office and warehouse. The Group is entitled
to a proportionate share of the construction contract revenue earned and bears a proportionate share of the joint
operations’ expenses.
109
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
18 TRADE AND OTHER PAYABLES
Trade creditors
Sundry payables and accrued expenses:
Accrued expenses
Amount due to customers for
contracts in progress
Goods and services tax payable
Advanced billings
Other taxes payable
GROUP
COMPANY
Note
10
2017
S$’000
34,406
21,700
4,303
3,179
12,635
3,420
79,643
2016
S$’000
32,776
13,767
4,717
2,156
-
3,814
57,230
2017
S$’000
2016
S$’000
-
155
-
-
-
-
-
128
-
-
-
-
155
128
Trade and other payables are usually paid within 45 days.
The advanced billings pertain to advances from the customer of the joint operation of the Group to assist with its cash
flow and shall be repaid through deductions to future progress claims to the customer.
19 BORROWINGS
Note
19(a)
19(b)
19(a)
19(b)
Current:
Finance lease liabilities - secured
Bank bills – secured
Non-current:
Finance lease liabilities - secured
Bank bills – secured
Loan from related parties – unsecured
Total borrowings
GROUP
COMPANY
2017
S$’000
2016
S$’000
2017
S$’000
2016
S$’000
5,179
96
5,275
6,234
50,107
355
56,696
61,971
5,538
1,078
6,616
9,108
16,309
81
25,498
32,114
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(a) Finance Lease Liabilities
The Group (the lessee) leases motor vehicles, workshop equipment and office fitout from non-related parties under
finance leases. The Group will obtain the ownership of the leased assets from the lessor at no extra cost at the end of
the lease term. The average lease term is between 4 and 5 years at interest rates ranging from 3.52% to 7.77% per
annum (2016: 3.52% to 9.59%).
110
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
19 BORROWINGS (Continued)
(a) Finance Lease Liabilities (Continued)
The finance lease liabilities are secured by the underlying leased assets:
Property, plant and equipment
13
20,901
24,744
2017
S$’000
2016
S$’000
Note
The present values of finance lease liabilities are analysed as follows:
2017
Less than one year
Between one and five years
2016
Less than one year
Between one and five years
MINIMUM
LEASE
PAYMENTS
S$’000
FUTURE
FINANCE
CHARGES
S$’000
NET PRESENT VALUE
OF MINIMUM
LEASE PAYMENTS
S$’000
5,562
6,489
12,051
6,080
9,567
15,647
(383)
(255)
(638)
(542)
(459)
(1,001)
5,179
6,234
11,413
5,538
9,108
14,646
(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 2017, the Group did meet all of these financial covenants.
As at 30 June 2017, the Group has a commercial bank facility amounting to S$55,897,000 (2016: S$26,339,450)
which was utilised 90% (2016: 62%). Interest rates are variable and ranged between 2.72% to 3.08% (2016: 2.94%
to 3.38%) per annum during the financial year.
The bank bills are secured by certain property, plant and equipment as disclosed in Note 13 to the
financial statements.
111
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
20 PROVISIONS
Current
Provision for employee benefits
Non-current
Provision for employee benefits
Movements in provisions are as follows:
Current
Opening balance at the beginning of the year
Provisions made during the year - Included in employee benefits
Provisions utilised during the year
Currency translation
Closing balance at the end of the year
Non-current
Opening balance at the beginning of the year
Provisions made during the year - Included in employee benefits
Provisions utilised during the year
Currency translation
Closing balance at the end of the year
GROUP
2017
S$’000
2016
S$’000
5,115
5,940
3,129
8,244
2,494
8,434
GROUP
2017
S$’000
2016
S$’000
Note
6
6
5,940
8,684
(9,824)
315
5,115
2,494
503
(21)
153
5,972
9,872
(9,715)
(189)
5,940
1,993
568
-
(67)
3,129
2,494
Provisions pertain to employee benefits relating to long service leave for employees. In calculating the present value
of future cash flows in respect of long service leave, the probability of long service leave being taken is based upon
historical data and the discount rate used range from 2.28% to 4.00% (2016: 2.52% to 3.32%).
112
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
21 SHARE CAPITAL
(a) Fully Paid Ordinary Shares
2017
2016
NO. OF
SHARES
S$’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.
The Company approved the payment of First and Final dividend of 0.7 Singapore cents per ordinary share
(2016: 0.7 Singapore cents) amounting to S$3,507,000 (2016: S$3,507,000) for the financial year ended 30 June
2016. The dividend payment was made on 09 December 2016.
The Board has recommended a first and final dividend of 0.7 Singapore cents per ordinary share for the financial year
ended 30 June 2017, subject to shareholders’ approval at the forthcoming Annual General Meeting.
(b) Treasury Shares
Balance at the beginning
and end of the year
2017
2016
NO. OF
SHARES
S$’000
NO. OF
SHARES
S$’000
15,000
11
15,000
11
Treasury shares relate to ordinary shares of the Company that are held by the Company.
113
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
21 SHARE CAPITAL (Continued)
(c) Share Options
2017
2016
NO. OF
SHARES
EXERCISE $
NO. OF
SHARES
EXERCISE $
Balance at the beginning of the year
Options cancelled during the year
Balance at the end of the year
5,000,000
(500,000)
4,500,000
0.65
6,000,000
(1,000,000)
0.65
5,000,000
0.65
-
0.65
These options vested but were not exercised during the reporting period. Share options granted under the Civmec
Employee Share Option plan carry no rights to dividends and no voting rights. Further details of the employee option
plan are contained in Note 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.
114
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
22 SHARE-BASED PAYMENTS (Continued)
(b) Employee Share Option Scheme (Continued)
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
11 September 2013
TOTAL NUMBER
GRANTED
6,000,000
VESTING PERIOD
1 year
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
2017
2016
NO.
5,000,000
(500,000)
4,500,000
WAEP
$
NO.
WAEP
$
0.65
6,000,000
-
(1,000,000)
0.65
5,000,000
0.65
-
0.65
Exercisable at the end of the year
4,500,000
5,000,000
The weighted average remaining contractual life of options outstanding as at 30 June 2017 is 6 years (2016: 7 years).
The exercise price of outstanding shares was S$0.65 (2016: $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.
115
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
22 SHARE-BASED PAYMENTS (Continued)
(b) Employee Share Option Scheme (Continued)
The weighted average fair value of options granted was $0.0472 (2016: $0.0472). These values were calculated using
the Binomial option pricing model applying the following inputs:
GRANT DATE:
Vesting period
Dividend yield
Weighted average exercise price
Share price
Expected average life of the option
Expected share price volatility
Risk-free interest rate
11 SEPTEMBER 2013
1 year
11%
S$0.65
S$0.65
5.9 years
26%
2.68%
The expected volatility of the Company has been determined having regard to the historical volatility of the market
price of the Company’s shares and the mean reversion tendency of volatilities.
The life of the options is based on the expected exercise patterns, which may not eventuate in the future.
A liquidity discount has also been applied to the value of the options to account for historically low trading volume
of the shares.
23 OTHER RESERVES
GROUP
COMPANY
2017
S$’000
2016
S$’000
2017
S$’000
2016
S$’000
Foreign currency translation reserve
(23,417)
(32,725)
Merger reserve
Waiver of interest receivable
from a subsidiary
Share option reserve
9,010
-
9,010
-
284
284
(14,123)
(23,431)
(8,417)
9,010
(3,341)
284
(2,464)
(10,742)
9,010
(3,341)
284
(4,789)
(a) Foreign Currency Translation Reserve
Exchange differences relating to the translation of the net assets of the Group’s foreign operations from their functional
currency to the Group’s presentation currency (i.e., S$) 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.
116
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
23 OTHER RESERVES (Continued)
(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
2017
S$’000
2016
S$’000
2,579
14,410
57,009
73,998
2,586
8,919
36,082
47,587
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 2016, 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 2017.
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 Central Park Drive, Macksville for a 2-year
period from August 2016.
The Group has entered an additional 7 hectares of land adjoining its Henderson facility in Western Australia
for a 28-year period from December 2016 with an option to renew for another 45 years.
117
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
24 COMMITMENTS (Continued)
(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
GROUP
2017
S$’000
2016
S$’000
1,734
22,132
23,866
1,258
1,640
2,898
23,866
2,898
25 GUARANTEES
The Group is, in the normal course of business, required to provide guarantees in respect of their contractual
performance related obligations. These guarantees and indemnities only give rise to a liability where it fails to perform
its contractual obligations.
During the course of business, the Company also provides letters of credit for international trading when required.
As at 30 June 2017, the Group has provided the following:
Bank guarantee
Surety bond facility
GROUP
2017
S$’000
10,484
105,258
115,742
2016
S$’000
32,390
47,729
80,119
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$132.33 million) as at 30 June 2017 (2016: A$125 million
(equivalent to S$125.19 million).
118
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
26 RELATED PARTY TRANSACTIONS
The Group’s main related parties are as follows:
Entities Exercising Control over the Group
The largest shareholders are James Finbarr Fitzgerald and Olive Theresa Fitzgerald (acting as trustees for the
JF & OT Fitzgerald Family Trust) (19.47%) and Goldfirm Pty Ltd (acting as trustee for the Kariong Investment Trust)
(19.47%).
Key Management Personnel
Any person having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any Director (whether executive or otherwise) of that entity is considered key
management personnel.
Remuneration paid to key management personnel is as follows:
Directors’ remuneration
- Salaries and other related costs
- Directors’ fees
- Benefits including defined contribution plans
Other key management personnel
- Salaries and other related costs
- Benefits including defined contribution plans
GROUP
2017
S$’000
2016
S$’000
1,569
220
211
1,981
303
4,284
1,449
222
200
1,732
292
3,895
Directors’ interest in Employee Share Benefit Plans
At the end of the reporting date, the total number of outstanding share options that were issued/allocated to the
Directors and key management personnel under existing employee benefit schemes is given below:
GROUP
2017
S$’000
2016
S$’000
-
-
3,000,000
3,000,000
Directors
Key management personnel
119
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
26 RELATED PARTY TRANSACTIONS (Continued)
Other Related Parties
Other related parties include immediate family members of key management personnel and entities that are controlled
or significantly influenced by those key management personnel, individually or collectively with their immediate family
members.
Transactions with Related Parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those
available to other parties unless otherwise stated.
The following transactions occurred with related parties:
Purchase of goods and services
Other Related Parties:
- Consultant fee paid to a related party (who is a Director of the Company)
(8)
(8)
GROUP
2017
S$’000
2016
S$’000
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.
The three main reportable segments for the Group are: (1) Oil and Gas (2) Metals and Minerals and (3) Infrastructure.
The business activities include civil construction, fabrication, precast concrete, SMP (Structural, Mechanical and Piping
Erection), insulation, maintenance and plant hire.
120
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
27 FINANCIAL INFORMATION BY SEGMENTS (Continued)
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.
(b) Inter-Segment Transactions
An internally determined transfer price is set for all inter-segment sales. This price is reviewed quarterly and is based
on what would be realised in the event the sale was made to an external party at arm’s length. All such transactions
are eliminated on consolidation of the Group’s financial statements.
Inter-segment loans payable and receivable are initially recognised at the consideration received/to be received net of
transaction costs.
(c) Segment Assets and Liabilities
The Group does not identify nor segregate its assets and liabilities in operating segments as these are managed on a
“group basis”.
Geographical Segments (Secondary Reporting)
The Group currently operates in three geographical areas – Australia (main operations), Papua New Guinea and
Uganda.
Major Customers
The Group has a number of customers to whom it provides both products and services. For the year ended
30 June 2017, the Group supplies to a single external customer in Metals and Minerals segment who accounts for
15.2% of external revenue (2016: Infrastructure 24.8%). The next most significant client accounts for 7.8%
and 7.4% (2016: 15.7% and 11.4%) of external revenue.
121
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
27 FINANCIAL INFORMATION BY SEGMENTS (Continued)
2017
OIL AND
GAS
S$’000
METALS
AND
MINER-
ALS
S$’000
INFRA-
STRUC-
TURE
S$’000
TOTAL
S$’000
OIL AND
GAS
S$’000
2016
METALS
AND
MINER-
ALS
S$’000
INFRA-
STRUC-
TURE
S$’000
TOTAL
S$’000
54,016
191,356
100,583
345,955
90,670
170,040
136,042
396,752
(38,929) (161,373)
(98,374)
(298,676)
(81,164)
(140,545)
(123,206)
(344,915)
(2,121)
12,966
(5,688)
24,295
(2,411)
(202)
65
-
-
(260)
-
11
-
-
-
(10,220)
37,059
(26,774)
-
65
2,150
(260)
(2,575)
(119)
9,546
(1,326)
8,220
(1,908)
7,598
(3,597)
25,898
(2,837)
9,999
(3)
-
-
3,890
-
-
(8,342)
43,495
(23,439)
(3)
-
1,181
3,890
(1,945)
(130)
23,049
(5,757)
17,292
11
-
10
-
10
322,142
1,261
1,162
324,576
79,643
61,971
8,244
149,858
20,642
257,072
882
511
258,475
57,230
32,114
8,434
97,778
34,316
Revenue –
external sales
Cost of sales
(excluding depreciation)
Depreciation expense
Segment results
Unallocated costs
Bad debt
Other income:
recovery of bad debt
Other income: others
Share in (loss)/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
122
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
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
(i)
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 2017, approximately 19%
(2016: 51%) 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% (2016: 1%) with all other variables remain constant, the Group’s
profit before tax will be approximately lower/higher by S$264,000 (2016: S$153,000) as a result of higher/lower
interest expenses on these borrowings.
The Group and the Company has cash balances placed with reputable banks and financial institutions. Such balances
are placed on varying maturities and generate interest income for the Group and the Company.
The Group obtains additional financing through bank borrowings and leasing arrangements. Information relating to
the Group’s interest rate exposure is also disclosed in the notes on the Group’s borrowings and leasing obligations.
They are both fixed and floating rates of interest. The policy is to retain flexibility in selecting borrowings at both fixed
and floating rates interest.
123
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
28 FINANCIAL RISK MANAGEMENT (Continued)
(a) Market Risk (Continued)
(i)
Interest rate risk (Continued)
VARIABLE RATES
FIXED RATES
WITHIN
1 YEAR
S$’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
24,044
-
24,044
-
-
96
-
96
39,788
-
39,788
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,107
355
50,462
-
-
-
-
-
16,309
81
16,390
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,179
-
-
5,179
-
-
-
-
5,538
1,078
-
6,616
-
-
-
-
-
-
-
-
-
-
-
-
-
-
157,435
157,435
24,044
157,435
181,479
-
6,234
-
-
6,234
-
-
-
-
9,108
-
-
9,108
-
-
-
-
-
-
-
-
-
-
56,106
-
-
-
56,106
56,106
11,413
50,203
355
118,077
-
86,655
86,655
39,788
86,655
126,443
46,543
-
-
-
46,543
46,543
14,646
17,387
81
78,657
25
29,233
29,258
25
29,233
29,258
155
155
155
155
42
27,707
27,749
42
27,707
27,749
128
128
128
128
Group
2017
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings – finance lease
Borrowings – bank bills
Borrowings – related parties
2016
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
Borrowings – finance lease
Borrowings – bank bills
Borrowings – related parties
Company
2017
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
2016
Financial Assets
Cash and cash equivalents
Trade and other receivables
Financial Liabilities
Trade and other payables
124
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
28 FINANCIAL RISK MANAGEMENT (Continued)
(a) Market Risk (Continued)
(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 counterparties of
contractual obligations that could lead to a financial loss to the Group and the Company.
Credit risk is managed through maintaining procedures ensuring, to the extent possible, that customers and
counterparties to transactions are of sound credit worthiness and includes the utilisation of systems for the approval,
granting and renewal of credit limits, the regular monitoring of exposures against such limits and the monitoring of the
financial stability of significant customers and counterparties. Such monitoring is used in assessing receivables for
impairment. Depending on the division within the Group and the Company, credit terms are generally 30 days from the
date of invoice.
The main source of credit risk to the Group and Company is considered to relate to the class of assets described as
“Trade and other receivables”.
The Group has a concentration of credit risk with one counterparty accounting for 17% (2016: 21%) of trade
receivables as at 30 June 2017.
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.
125
ANNUAL REPORT 2017
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
28 FINANCIAL RISK MANAGEMENT (Continued)
(b) Credit Risk (Continued)
GROSS
AMOUNT
S$’000
WITHIN
INITIAL
TRADE
TERMS
S$’000
PAST DUE BUT NOT IMPAIRED
31 – 60
DAYS
S$’000
61 – 90
DAYS
S$’000
> 90
DAYS
S$’000
PAST
DUE
AND IM-
PAIRED
S$’000
65,189
92,246
157,435
41,595
92,246
133,841
41,565
45,090
86,655
31,117
45,090
76,207
21,399
-
21,399
9,979
-
9,979
29,233
29,233
29,233
29,233
27,707
27,707
27,707
27,707
-
-
-
-
1,033
-
1,033
309
-
309
-
-
-
-
1,162
-
1,162
160
-
160
-
-
-
-
-
-
-
-
-
-
-
-
Group
2017
Trade receivables
Other receivables
Total
2016
Trade receivables
Other receivables
Total
Company
2017
Receivables from
subsidiaries
Total
2016
Receivables from
subsidiaries
Total
The Group and the Company did not hold any financial assets whose terms have been renegotiated, but which
would otherwise be past due or impaired.
The Group believes that the unimpaired amounts that are past due by more than 30 days are still collectible
based on historic payment behaviour and extensive analyses of customer credit risk, including underlying customers’
credit ratings, when available. Based on the Group’s monitoring of customer credit risk, the Group believes that, apart
from the above, no impairment allowance is necessary in respect of receivables not past due or past due by 30 days
and above.
Credit risk related to balances with banks and other financial institutions is managed by investing surplus funds
with counterparties that are at a Standard and Poor’s rating of at least AA. The following table provides information
regarding the credit risk relating to cash and cash equivalents based on Standard and Poor’s counterparty
credit ratings.
126
ANNUAL REPORT 2017
NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
28 FINANCIAL RISK MANAGEMENT (Continued)
(b) Credit Risk (Continued)
Cash and cash equivalents:
AA Rated
GROUP
COMPANY
2017
S$’000
2016
S$’000
2017
S$’000
2016
S$’000
24,044
39,788
25
42
(c) Liquidity Risk
Liquidity risk is the risk that the Group and the Company will encounter difficulty in meeting its commitments
concerning its financial liabilities. The Group and the Company manages this risk through the following mechanism:
- Preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities;
- Monitoring undrawn credit facilities;
- Maintaining credit risk related to financial assets;
- Obtaining funding from a variety of sources;
- Only investing surplus cash with major financial institutions; and
- Comparing the maturity profile of financial liabilities with the realisation profile of financial assets.
Cash flows realised from financial assets reflect management’s expectation as to the timing of realisation.
Actual timing may therefore differ from that disclosed. The timing of cash flows presented in the table to settle
financial liabilities reflect the earliest contractual settlement dates and do not reflect management’s expectations that
banking facilities will be rolled forward. Balances due within 12 months equal their carrying amount as the impact of
discounting is not significant.
127
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
28 FINANCIAL RISK MANAGEMENT (Continued)
(c) Liquidity Risk (Continued)
The table below reflects an undiscounted contractual maturity analysis for financial liabilities.
CONTRACTUAL UNDISCOUNTED
CASH FLOWS
CARRYING
AMOUNT
S$’000
WITHIN
1 YEAR
S$’000
BETWEEN
2 TO 5
YEARS
S$’000
TOTAL
S$’000
56,106
56,106
-
56,106
11,413
50,203
355
5,562
96
-
6,489
53,203
388
12,051
53,299
388
Group
2017
Financial Liabilities
Trade and other payables
Borrowings:
- Finance lease
- Bank bills
- Related parties
Total financial liabilities
118,077
61,764
60,080
121,844
2016
Financial Liabilities
Trade and other payables
Borrowings:
- Finance lease
- Bank bills
- Related parties
46,543
46,543
-
46,543
14,646
17,387
81
6,080
1,100
-
9,567
17,581
86
15,647
18,681
86
Total financial liabilities
78,657
53,723
27,234
80,957
Company
2017
Financial Liabilities
Trade and other payables
Total financial liabilities
2016
Financial Liabilities
Trade and other payables
Total financial liabilities
155
155
128
128
155
155
128
128
-
-
-
-
155
155
128
128
The Group’s undrawn borrowings and guarantee facilities are disclosed in Note 25 to the financial statements.
128
ANNUAL REPORT 2017 NOTES TO THE
FINANCIAL STATEMENTS
30 June 2017
28 FINANCIAL RISK MANAGEMENT (Continued)
(d) Capital Management
Management controls the capital of the Group in order to maintain a good debt-to-equity ratio, provide the
shareholders with adequate returns and to ensure that the Group can fund its operations and continue as a
going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
The Group and the Company have no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing the Group’s financial risks and adjusting its capital
structure in response to changes in these risks and in the market. These responses include the management of debt
levels, distribution to shareholders and share issues.
The net debt-to-equity ratio is calculated as net debt divided by total equity. Net debt is calculated as total financial
liabilities less cash and cash equivalents.
Net debt
Total equity
Net debt-to-equity ratio
GROUP
2017
S$’000
2016
S$’000
94,033
175,075
0.54
38,869
160,847
0.24
There were no changes in the Group’s approach to capital management during the current financial 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 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.
129
ANNUAL REPORT 2017 STATISTICS OF
SHAREHOLDERS
SHAREHOLDERS’ STATISTICS AND DISTRIBUTION AS AT 15 SEPTEMBER 2017
Class of Shares
Voting Rights (excluding treasury shares)
No. of issued shares
No. of issued shares excluding treasury shares
No. of treasury shares
: Ordinary Shares
: One vote per Ordinary Share
:
:
:
501,000,000 shares
500,985,000 shares
15,000
DISTRIBUTION OF SHAREHOLDINGS
SIZE OF SHARE-
HOLDINGS
NO. OF SHARE-
HOLDERS
1 - 99
100 - 1,000
1,001 – 10,000
10,001 – 1,000,000
1,000,001 and Above
TOTAL
3
41
374
451
32
901
%
0.33
4.55
41.51
50.06
3.55
100.00
NO. OF SHARES
82
31,119
2,369,967
44,822,253
453,761,579
500,985,000
%
0.00
0.01
0.47
8.95
90.57
100.00
TWENTY LARGEST SHAREHOLDERS AS AT 15 SEPTEMBER 2017
SHAREHOLDER'S NAME
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
MAYBANK KIM ENG SECURITIES PTE LTD
FOO SIANG GUAN
LEE TECK LENG
VAZ LORRAIN MICHAEL
ANG KONG HUA
POH ENG CHOO
UNITED OVERSEAS BANK NOMINEES PTE LTD
NG KEE CHOE
GOH GEOK LING
LAI VOON NEE
LEYAU LAY HOON
HENG KHENG LONG
OCBC SECURITIES PRIVATE LTD
PANG CHIN FATT
Total
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
130
NO OF SHARES
%
170,266,466
97,720,806
43,668,945
29,287,300
23,812,000
9,419,621
9,271,073
7,415,249
5,700,200
4,877,000
4,628,677
4,622,006
4,537,700
3,700,134
3,425,134
3,300,000
3,260,399
3,255,845
3,205,200
2,273,000
33.99
19.51
8.72
5.85
4.75
1.88
1.85
1.48
1.14
0.97
0.92
0.92
0.91
0.74
0.68
0.66
0.65
0.65
0.64
0.45
437,646,755
87.36
ANNUAL REPORT 2017 STATISTICS OF
SHAREHOLDERS
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
14,888,000
-
-
%
19.51
19.47
2.97
-
-
54,000
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 15 September 2017 and to the best knowledge of the Directors, approximately
50.63% 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.
131
ANNUAL REPORT 2017 NOTICE OF
ANNUAL GENERAL MEETING
NOTICE IS HEREBY GIVEN that the Annual General Meeting of the Company will be held at Novotel Singapore
Clarke Quay, The Clove Room, Level 5, 177A River Valley Road, Singapore 179031 on Thursday, 26 October 2017
at 2.30 p.m, to transact the following businesses:
AS ORDINARY BUSINESS:
1.
2.
3.
4.
To receive and adopt the Audited Financial Statements of the Company for the
financial year ended 30 June 2017 together with the Directors’ Statement and
Independent Auditors’ Report thereon.
Ordinary Resolution 1
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
2017.
Ordinary Resolution 2
To approve the payment of Directors’ fees of S$220,000 for the financial year
ending 30 June 2018, to be paid quarterly in arrears. (FY2017: S$220,000)
Ordinary Resolution 3
To re-elect the following Directors retiring pursuant to Article 118 of the Company’s
Constitution:-
Ordinary Resolution 4
Ordinary Resolution 5
Ordinary Resolution 6
Ordinary Resolution 7
Ordinary Resolution 8
Ordinary Resolution 9
Ordinary Resolution 10
Ordinary Resolution 11
(a) Mr James Finbarr Fitzgerald
(b) Mr Patrick John Tallon
(c) Mr Kevin James Deery
(d) Mr Chong Teck Sin [See Explanatory Note (i)]
(e) Mr Wong Fook Choy Sunny [See Explanatory Note (ii)]
(f) Mr Douglas Owen Chester [See Explanatory Note (iii)]
5.
To re-appoint Messrs Moore Stephens LLP as the Auditors of the Company and to
authorise the Directors to fix their remuneration.
AS SPECIAL BUSINESS:
To consider and, if thought fit, to pass with or without modifications the following resolutions:
6.
Authority to allot and issue shares
THAT pursuant to Section 161 of the Companies Act, Chapter 50, and the Listing
Rules of the Singapore Exchange Securities Trading Limited (“SGX-ST”), authority
be and is hereby given for the Directors of the Company at any time to such persons
and upon such terms and for such purposes as the Directors may in their absolute
discretion deem fit, to:
(i) issue shares in the capital of the Company whether by way of rights, bonus or
otherwise;
(ii) make or grant offers, agreements or options that might or would require shares
to be issued or other transferable rights to subscribe for or purchase shares
(collectively, “Instruments”) including but not limited to the creation and issue of
warrants, debentures or other instruments convertible into shares;
(iii) issue additional Instruments arising from adjustments made to the number of
Instruments previously issued in the event of rights, bonus or capitalisation
issues;
and (notwithstanding the authority conferred by the shareholders may have ceased
to be in force) issue shares in pursuant to any Instrument made or granted by the
Directors while the authority was in force, provided always that:
132
ANNUAL REPORT 2017 NOTICE OF
ANNUAL GENERAL MEETING (continued)
(a) the aggregate number of shares to be issued pursuant to this Resolution (including
shares to be issued in pursuance of Instruments made or granted pursuant to
this Resolution) does not exceed fifty per centum (50%) of the Company’s total
number of issued shares (excluding treasury shares and shares (if any) held by
a subsidiary), of which the aggregate number of shares (including shares to be
issued in pursuance of Instruments made or granted pursuant to this Resolution)
to be issued other than on a pro-rata basis to shareholders of the Company
does not exceed twenty per centum (20%) of the total number of issued shares
(excluding treasury shares and shares (if any) held by a subsidiary), and for the
purpose of this Resolution, the total number of issued shares (excluding treasury
shares and shares (if any) held by a subsidiary) shall be the Company’s total
number of issued shares (excluding treasury shares and shares (if any) held by
a subsidiary) at the time this Resolution is passed, after adjusting for:
(i) new shares arising from the conversion or exercise of convertible securities,
or
(ii) new shares arising from exercising share options or vesting of share awards
outstanding or subsisting at the time this Resolution is passed, and
(iii) any subsequent bonus issue, consolidation or subdivision of the Company’s
shares;
(b) such authority shall, unless revoked or varied by the Company at a
general meeting, continue in force until the conclusion of the next Annual
General Meeting or the date by which the next Annual General Meeting
of the Company is required by law to be held, whichever is earlier.”
[See Explanatory Note (iv)]
7.
Authority to allot and issue shares under the Civmec Employee Share Option
Scheme and the Civmec Performance Share Plan
Ordinary Resolution 12
“THAT authority be and is hereby given to the Directors of the Company to allot and
issue from time to time such number of Shares in the capital of the Company as may
be required to be allotted and issued pursuant to the exercise of the options under
the Civmec Employee Share Option Scheme (the “CESOS”) and/or the vesting of
awards under Civmec Performance Share Plan (the “Share Plan”), provided always
that the aggregate number of additional Shares to be allotted and issued pursuant
to the CESOS and the Share Plan shall not exceed fifteen per centum (15%) of
the total number of issued shares (excluding treasury shares) in the capital of the
Company from time to time and that such authority shall, unless revoked or varied
by the Company in a general meeting, continue in force until the conclusion of the
next Annual General Meeting of the Company or the date by which the next Annual
General Meeting of the Company is required by law to be held, whichever is earlier.”
[See Explanatory Note (v)]
8.
Proposed Renewal of the Share Purchase Mandate
Ordinary Resolution 13
That:
for the purposes of Sections 76C and 76E of the Companies Act, Chapter 50 of
Singapore (the “Companies Act”), and such other laws and regulations as may
for the time being be applicable, the exercise by the Directors of the Company
(“Directors”) of all the powers of the Company to purchase or otherwise acquire
issued ordinary shares in the share capital of the Company (“Shares”) not exceeding
in aggregate the Prescribed Limit (as hereafter defined), at such price(s) as may be
determined by the Directors of the Company from time to time up to the Maximum
Price (as hereafter defined), whether by way of:
133
ANNUAL REPORT 2017 NOTICE OF
ANNUAL GENERAL MEETING (continued)
(i) on-market purchases (“On-Market Share Purchase”) transacted on the
Singapore Exchange Securities Trading Limited (“SGX-ST”); and/or
(ii) off-market purchases (“Off-Market Share Purchase”) (if effected otherwise
than on the SGX-ST) in accordance with an equal access scheme(s) as may
be determined or formulated by the Directors as they may consider fit, which
scheme(s) shall satisfy all the conditions prescribed by the Companies Act and
the SGX-ST Listing Manual,
(the “Share Purchase Mandate”);
(b) any Share that is purchased or otherwise acquired by the Company pursuant
to the Share Purchase Mandate shall, at the discretion of the Directors of the
Company, either be cancelled or held in treasury and dealt with in accordance
with the Companies Act;
(c) the authority conferred on the Directors of the Company pursuant to the Share
Purchase Mandate may be exercised by the Directors at any time and from time
to time during the period commencing from the passing of this Resolution and
the expiring on the earliest of:
(i) 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;
(d) in this Ordinary Resolution:
“Prescribed Limit” means 10% of the total number of Shares as at the date of
passing of this Resolution (excluding any treasury shares and subsidiary holdings
that may be held by the Company from time to time), unless the Company has
effected a reduction of the share capital of the Company in accordance with
the applicable provisions of the Companies Act, at any time during the Relevant
Period, in which event the total number of Shares of the Company shall be taken
to be the total number of Shares of the Company as altered;
“Relevant Period” means the period commencing from the date the last annual
general meeting of the Company was held before the date of passing of this
Resolution, and expiring on the date the next annual general meeting of the
Company is held or is required by law to be held, whichever is the earlier, after
the date of passing of this Resolution;
“Maximum Price” in relation to a Share to be purchased, means an amount
(excluding related brokerage, commission, applicable goods and services
tax, stamp duties, clearance fees and other related expenses) not exceeding
105% of the Average Closing Price, excluding related expenses of the share
purchases, and where:
“Average Closing Price” means the average of the closing market prices of
a Share over the last five (5) Market Days, on which transactions in the Shares
were recorded, immediately preceding the date of making the On-Market Share
Purchase or, as the case may be, the day of the making of an offer pursuant to
the Off-Market Share Purchase, and deemed to be adjusted, in accordance with
the rules of the SGX-ST, for any corporate action that occurs after the relevant
five (5) Market Days;
134
ANNUAL REPORT 2017 NOTICE OF
ANNUAL GENERAL MEETING (continued)
“Day of the making of the offer” means the day on which the Company
announces its intention to make an offer for the purchase of Shares from
Shareholders, stating the purchase price (which shall not be more than the
Maximum Price calculated on the foregoing basis) for each Share and the
relevant terms of the equal access scheme for effecting the Off-Market Share
Purchase; and
“Market Day” means a day on which the SGX-ST is open for trading in
securities; and
(e) the Directors of the Company and/or any of them be and are hereby authorised to
complete and do all such acts and things (including without limitation, executing
such documents as may be required) as they may consider desirable, expedient
or necessary to give effect to the transactions contemplated by this Ordinary
Resolution.
[See Explanatory Note (vi)]
9.
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
11 October 2017
135
ANNUAL REPORT 2017
NOTICE OF
ANNUAL GENERAL MEETING (continued)
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 37 of the Annual Report 2017. 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 37 of the Annual Report 2017. 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 37 of the Annual Report 2017.
There are no relationships (including family relationship) between Mr Douglas Chester and the other Director or the
Company or its 10% shareholders.
(iv) Resolution No. 11, if passed, will empower the Directors of the Company from the date of the passing of Ordinary
Resolution No. 11 to the date of the next Annual General Meeting 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 issue shares in the capital of the
Company and to make or grant instruments (such as warrants or debentures) convertible into shares, and to issue
shares in pursuance of such instruments, up to an amount not exceeding in total 50% of the issued shares (excluding
treasury shares and shares (if any) held by a subsidiary) in the capital of the Company, with a sub-limit of 20% of the
issued shares (excluding treasury shares and shares (if any) held by a subsidiary) for issues other than on a pro-rata
basis to shareholders.
(v) Resolution No. 12, 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) Resolution no. 13, 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 Company’s Letter to Shareholders dated 11 October
2017.
136
ANNUAL REPORT 2017 NOTICE OF
ANNUAL GENERAL MEETING (continued)
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
(ii) 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
(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.
137
ANNUAL REPORT 2017 PROXY FORM
ANNUAL GENERAL MEETING
CIVMEC LIMITED
(Company No. : 201011837H)
(Incorporated in the Republic of Singapore)
Important
1. Relevant intermediaries as defined in Section 181 of the Companies Act, Chapter 50 of Singapore may appoint
more than two proxies to attend, speak and vote at the Annual General Meeting.
2. This Proxy Form is not valid for use and shall be ineffective for all intents and purposes if used or purported to be
used by CPF/SRS investors who hold ordinary shares through their CPF/SRS funds. CPF/SRS Investors should
contact their respective Agent Banks/SRS Operators if they have any queries regarding their appointment as
proxies.
*I/We,
(Name) (NRIC/Passport/Co Reg. 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 Annual General Meeting of the Company (the “Annual General Meeting”) as
*my/our *proxy/proxies to attend, speak and vote for *me/us on *my/our behalf at the Annual General Meeting to be
held at Novotel Singapore Clarke Quay, The Clove Room, Level 5, 177A River Valley Road, Singapore 179031 on
Thursday, 26 October 2017 at 2:30 p.m. 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/her/their discretion, as *he/she/they will on any other matter arising at the Annual General
Meeting and at any adjournment thereof.
Voting will be conducted by poll.
138
ANNUAL REPORT 2017
PROXY FORM
ANNUAL GENERAL MEETING (continued)
No. Ordinary Resolutions
For#
Against#
1.
2.
3.
4.
5.
6.
7.
8.
9.
Adoption of the Audited Financial Statements of the Company for the
financial year ended 30 June 2017 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
2017.
Approval of the payment of Directors’ fees of S$220,000 for the financial
year ending 30 June 2018 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.
10.
Re-appointment of Messrs Moore Stephens LLP as the Auditors.
SPECIAL BUSINESS
11.
12.
Authority to allot and issue shares.
Authority to allot and issue shares under the Civmec Employee Share
Option Scheme and the Civmec Performance Share Plan.
13.
Renewal of Share Purchase Mandate.
Dated this ________day of ____________________ 2017
No. of
Shares
Total number of
shares in
(a) CDP Register
(b) Register of
Members
Signature(s) of Member(s)/Common Seal
* Delete accordingly
# If you wish to exercise all your votes “For” or “Against” the relevant resolution, please indicate with an “X”
within the box provided. Alternatively, if you wish to exercise your votes both “For” and “Against” the relevant
resolution, please insert the relevant number of shares in the box provided.
IMPORTANT. PLEASE READ NOTES OVERLEAF.
139
ANNUAL REPORT 2017 PROXY FORM
ANNUAL GENERAL MEETING (continued)
Notes :
1. Please insert the total number of shares held by you. If you have shares entered against your name in the Depository
Register (maintained by The Central Depository (Pte) Limited), you should insert that number of shares. If you have
shares registered in your name in the Register of Members (maintained by or on behalf of the Company), you should
insert that number of shares. If you have shares entered against your name in the Depository Register and shares
registered in your name in the Register of Members, you should insert the aggregate number of shares entered against
your name in the Depository Register and registered in your name in the Register of Members. If no number is inserted,
the instrument appointing a proxy or proxies shall be deemed to relate to all the shares held by you.
2.
(a) A member who is not a relevant intermediary is entitled to appoint not more than two proxies to attend, speak and
vote at the Annual General Meeting. Where such member’s form of proxy appoints more than one proxy, the
proportion of the shareholding concerned to be represented by each proxy shall be specified in the form of proxy.
(b) A member who is a relevant intermediary is entitled to appoint more than two proxies to attend, speak and vote at
the Annual General Meeting, but each proxy must be appointed to exercise the rights attached to a different share or
shares held by such member. Where such member’s form of proxy appoints more than two proxies, the number and
class of shares in relation to which each proxy has been appointed shall be specified in the form of proxy.
“Relevant intermediary” has the meaning ascribed to it in Section 181 of the Companies Act, Chapter 50 of Singapore.
3. A proxy need not be a member of the Company.
4. A corporation which is a member may also authorise by resolution of its directors or other governing body such
person as it thinks fit to act as its representative at the Annual General Meeting, in accordance with Section 179 of the
Companies Act, Chapter 50 of Singapore to attend and vote for and on behalf of such corporation.
5. The instrument appointing a proxy or proxies must be under the hand of the appointor or of his attorney duly authorised
in writing. Where the instrument appointing a proxy or proxies is executed by a corporation, it must be executed under
its common seal or signed on its behalf by an officer or attorney duly authorised in writing.
6. Where an instrument appointing a proxy is signed on behalf of the appointor by the attorney, the letter or power of
attorney or a duly certified copy thereof must (failing previous registration with the Company) be lodged with the
instrument of proxy, failing which the instrument may be treated as invalid.
7. The instrument appointing a proxy or proxies must be deposited at the registered office of the Company at 80 Robinson
Road #02-00, Singapore 068898, not less than forty-eight (48) hours before the time appointed for holding the Annual
General Meeting. The appointment of a proxy or proxies shall not preclude a member from attending and voting in
person at the Annual General Meeting. If a member attends the Annual General Meeting in person, the appointment of
a proxy or proxies shall be deemed to be revoked, and the Company reserves the right to refuse to admit such proxy
or proxies to the Annual General Meeting.
8.
In the case of joint shareholders, all shareholders must sign the instrument appointing a proxy or proxies.
9. 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 Annual General Meeting in person. CPF and SRS Investors who
are unable to attend the Annual General Meeting but would like to vote, may inform their CPF and/or SRS Approved
Nominees to appoint the Chairman of the Annual General Meeting to act as their proxy, in which case, the CPF and
SRS Investors shall be precluded from attending the Annual General Meeting.
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PROXY FORM
ANNUAL GENERAL MEETING (continued)
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 entered in the Depository Register, 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) to attend, speak and vote at the Annual
General Meeting and/or any adjournment thereof, a member of the Company (i) consents to the collection, use and
disclosure of the member’s personal data by the Company (or its agents or service providers) for the purpose of the
processing, administration and analysis by 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,
take-over rules, regulations and/or guidelines (collectively, “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.
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